Sunday, September 26, 2021

Where is Cheese Production Going? Out of California!

This post will explore where cheese production is going in the U.S.  The data in this post is based on monthly cheese production by state from 2019 to July 2021.  Growth is measured by comparing the first seven months of 2019 to the first seven months of 2021.   In many ways this post compliments the July 11 post on "Where are the Cows Going?".

Most of the large cheese producing states are growing at about 1.5 percent annually except for California which is decreasing by 1.6 percent.  South Dakota had growth of 29 percent per year, far greater than any other state.  The states with fewer than three cheese plants are not reported separately, but they have collectively grown by 7.7 percent.

In the next post to this blog, much of this data will be used to estimate de-pooling in the Federal Orders.  If milk is sold to a cheese plant in a Federal Order, it would be included in the Class III milk usage unless it was de-pooled.  The difference between the milk used for cheese and the amount of Class III milk reported by the Federal Order will be used as an estimate of de-pooling in the Federal Orders.

As shown in Chart I, cheese production in the U.S. is growing at about 2.8 percent annually.  The 2021 increase over 2019 is 60 million pounds per month.  That is more than domestic consumption is growing and is resulting in swelling cheese inventories.  

Chart I - USA Cheese Production

The seven largest cheese producing states will be reviewed individually.  They are listed in order from the largest cheese producing state to the smallest of the seven. 

Wisconsin, Chart II below, is the largest cheese producing state and produced a monthly average of 286 million pounds for the first seven months of 2021.  Wisconsin increased cheese production by eight million pound over the last two years. The annual growth in cheese production over the last two years is 1.4 percent which is less than the national average of 2.8 percent.  

Chart II - Wisconsin Cheese Production

California, Chart III, is the second largest cheese producing state with 2021 YTD production of 204 million pounds per month.  Production of cheese in California is falling at an annual rate of 1.6 percent.  That is a loss of eight million pounds per month between 2019 and 2021.  Even if this shrinking continues, California will remain the second largest cheese producing state for a very long time.

Chart III - California Cheese Production

Idaho, Chart IV, is the third largest cheese producing state with 2021 YTD production of 84 million pounds per month.  Idaho is not in a Federal Order.  Their current growth rate over the last two years is just .6 percent annually.

Chart IV - Idaho Cheese Production

New Mexico, Chart V, is continuing to increase cheese production.  The annual rate of increase over the last two years is 1.3 percent. Currently New Mexico is producing an average of 80 million pounds of cheese per month.

Chart V - New Mexico Cheese Production

New York state, Chart VI, is currently growing cheese production at 1.6 percent annually.   In 2021 YTD, New York state has average of 71 million pounds per month.

Chart VI - New York state Cheese Production

Minnesota, Chart VII, is growing by 1.2 percent annually.  Minnesota has grown significantly in the last year, reaching record levels in the last months of 2020.  In 2021, cheese production has averaged 63 million pounds per month.  Minnesota is now the sixth largest cheese producing state.

Chart VII - Minnesota Cheese Production

South Dakota, Chart VIII, is by far the fastest growing cheese producing state in the U.S. with an annual growth rate of 29 percent.  There have been some major expansions of cheese plants in South Dakota which increased cheese production over the last two years by eight million pounds per month.  The cheese plants in South Dakota are largely in the Eastern part of South Dakota which is in the Upper Midwest Federal Order.

Chart VIII South Dakota Cheese Production

One of the major changes is in the states with less than three cheese plants (Chart IX).  Their growth of 7.7 percent annually is a significant trend.  Over the last two years these states increased cheese production by 22 million pounds which was 37 percent of the total U.S. increase in cheese production.  There is no publicly available data for these individual states, but one of these states is Texas which is home to one of the largest cheese plants in the U.S.

Chart IX - The States with Fewer than Three Cheese Plants

In summary, California is losing significant cheese production while the U.S. overall is growing in cheese production.  The fastest growing cheese producing state is South Dakota. While Wisconsin increased cheese production by 1.3 percent, the Upper Midwest area which includes Wisconsin, Minnesota and part of South Dakota is growing at an estimated 3.3 percent annually.

The next post will use the data on cheese production to estimate de-pooling in 2021 YTD in the major Federal Orders.  Will it be de-pooling by 20 percent, 50 percent, or maybe 80 percent?  Don't miss the next post!  You may be surprised.

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