For most of the year the dairy industry has been concerned with lagging mozzarella cheese production. According to the USDA’s Dairy Product Report mozzarella production had been running just below last year’s levels. However, the October Dairy Products Report released last week changed all of that. Now it’s running 3.7 percent ahead of last year.

In the October report, USDA revised Mozzarella production numbers for each month so far in 2002. All told that added 85.9 million pounds of Mozzarella cheese production to the table. That lifts mozzarella production from 1.97 billion pounds to 2.06 billion pounds for the year so far.

Market analysts had been pointing to decreased mozzarella production as signs that pizza sales were slowing. However, given this new information, it appears the demand picture is not as soft as the industry had feared. In fact, it could mean that dairy demand in 2003 will shape up to be a bit brighter than anticipated. All of which could be good news to dairy prices.

There is however, one potential fly in the ointment. That is if similar revisions are made in the cold storage report due out Dec. 20. At this point, market watchers view the discovery of additional mozzarella cheese production as good news and assume the additional product has been consumed.

Also announced in the Dairy Products Report last week:

  • American-type cheese production was up 2.6 percent from last month and down 1.0 percent compared to October 2001.
  • American-type cheese production From January through October is 3.06 billion pounds, up 4.8 percent compared to the same period last year.
  • Cheddar cheese production was down 6.5 percent compared to October 2001.
  • Cheddar cheese production from January through October was up 2.7 percent compared the same time period one-year ago.
  • Butter production was down 7.1 percent compared to last October.
  • Year-to-date butter production is up 11.2 percent when compared to the same time period last year.