U.S. Dairy Products Production Update – Jul ’14
Butter – Production Rebounds Slightly, Tight Stocks Continue According to USDA, May ’14 U.S. butter production increased 0.5% YOY, the first YOY production increase in seven months. In addition, USDA revised April ’14 butter production 4.6% higher than previously reported. ’13-’14 YTD butter production remains 3.2% lower than the previous year through the first eight months of the production season. Lower production has resulted in a significant decline in domestic butter stocks. Butter stocks declined to a 24 month low in December before rising seasonally. May ’14 butter stocks ended 40.2% below the previous year’s level. Cheese – Production Remains Strong U.S. cheese production increased YOY for the 14th straight month, as May ’14 production registered a 2.2% YOY gain. May ’14 U.S. cheese production was the third highest production figure ever recorded on a daily average basis, trailing only Dec ’13 and Apr ’14. Cheddar cheese increased YOY for the second straight month after four months of YOY declines, increasing 2.5%. ’13-’14 YTD total cheese production is 1.9% higher than the previous year through the first eight months of the production season. Dry Products – Dry Whey Production Continues to Improve, SMP/NFDM Production Increases U.S. dry whey production increased YOY for only the second time in thirteen months, increasing 2.0% in May ’14. Dry whey production has rebounded off of lows experienced earlier this year, with production up MOM for the third consecutive month. Despite the recent gains, ’13-’14 YTD U.S. dry whey production remains down 11.0%. Prior to May, U.S. dry whey production declined YOY in 11 of the past 12 months with an average YOY decline of 8.9% as U.S. manufacturers shifted toward higher-value whey protein products including whey protein concentrates (WPC) and whey protein isolates (WPI). WPC remained up 11.1% YOY but WPI was down 0.6% YOY in May ’14. Total May ’14 dry whey, WPC, and WPI production increased 4.9% YOY. The increase in dry whey production led to a 11.4% MOM increase in dry whey stocks, with stocks increasing 6.5 million lbs to a total of 63.4 million lbs. Despite the MOM increase, May ’14 dry whey stocks were down 3.3% YOY, although stocks were 20.3% higher than the five year average May dry whey stocks. May ’14 U.S. NFDM and SMP production increased 8.7% YOY and 6.2% YOY, respectively. NFDM and SMP production increased together for the first time in the past ten months. May ’14 combined production of NFDM and SMP was 8.0% higher than the previous year. Recent increased NFDM production has led to a significant increase in stocks. May ’14 U.S. NFDM stocks of 220.6 million lbs are up 8.7% YOY. NFDM stocks reached an all-time high of 239.6 million lbs in April ’14. See the table below for a summary of key U.S. dairy product production in May ’14.