Taking the nation as a whole, milk production was up 2.4 in June compared to a year earlier. In the top 23 states, milk output was up 2.7 percent. Milk production has been on the rise since February, but the size of June's jump was unexpected.

The growth is coming in higher milk production per cow. The average cow in the U.S. produced 3.7 percent more milk in June than a year ago. There were 108,000 (1.2 percent) fewer cows in the nation this June. But there were 40,000 more cows on U.S. dairy farms in June than there were in December. The U.S. dairy herd now has 9.122 million cows, the most since August 2009.

Industry observers are looking at several factors that could be contributing to the strength in per-cow milk production. The summer of 2009 was mild in the Upper Midwest, home to a lot of cows, and there could be some carryover effect. Also, many people cut back on vitamins, minerals, and other feed additives last year when they were losing money. They found out that the cows did not milk as well; nor were they as healthy or as easy to get bred so they put some of those ingredients back in the ration. Also, many problem cows were culled rather than doctored during the toughest times, and cull cow prices have been better recently. Those who started using sexed semen two or three years ago have more first-calf heifers freshening now so they can sell off more older cows. As a result, the U.S. dairy herd generally is more healthy and younger.

June milk production was up 3.5 percent in California. There was a 6.6 percent rise in milk per cow. Milk per cow jumped 4.7 percent in Wisconsin. With 5,000 more cows (+0.4 percent), Wisconsin milk output was up 5.1 percent in June. New York was up 0.2 percent. Idaho cow numbers were up 10,000 (1.8 percent), and milk production was up 3.5 percent. Michigan was a big gainer being up 4.7 percent with a big jump in milk per cow. Missouri experienced an 8 percent (9,000 head) drop in cow numbers and was down 5.4 percent in milk production.

Despite the milk production report last Monday, cheese prices on the Chicago Merc edged upward. On Tuesday, blocks added 2-1/4 cents a pound to move up to $1.60. Then blocks added another 1/4 cent yesterday.

Meanwhile, the average July through December Class III futures price went from $14.66 on Monday, before the announcement, to $14.63 on Tuesday to $14.64 yesterday. These are lower futures prices than any of us would like to see, but they did not react much to the June milk production report.