U.S. Commercial Disappearance Update – Mar ’16
Executive Summary U.S. dairy commercial disappearance figures provided by USDA were recently updated with values spanning through Jan ’16. Highlights from the updated report include: • U.S. commercial disappearance for milk used in all products increased 2.5% YOY on a milk-fat basis but declined 0.8% YOY on a skim-solids basis. • Cheese disappearance figures increased on a YOY basis for the 11th time in the past 12 months, finishing at a record January high. • NFDM/SMP disappearance declined sharply throughout Jan ’16, finishing at a six month low for the month of January, while fluid milk sales declined YOY for the 30th time in the past 32 months during Dec ’15. Additional Report Details All Milk – Disappearance Increases YOY on Milk-Fat Basis, Declines YOY on Skim-Solids Basis According to USDA, Jan ’16 U.S. commercial disappearance for milk used in all products increased 2.5% YOY on a milk-fat basis but declined 0.8% YOY on a skim-solids basis. Disappearance on a milk-fat basis finished at a January record high while disappearance on a skim-solids basis remained at the second highest figure on record for the month of January. Domestic demand continued to outpace international demand on a milk-fat basis, increasing by 3.0% YOY, but declining 3.0% YOY on a skim-solids basis. Butter – Disappearance Finishes Slightly Higher YOY Despite Continued Weak Exports Jan ’16 U.S. butter commercial disappearance declined 8.9% MOM on a daily average basis but finished slightly higher on a YOY basis, increasing 1.2%. Jan ’16 domestic butter demand finished up 2.6% YOY while international demand declined 57.0% YOY. The MOM decline of 8.9% was significantly less than the ten year average December – January seasonal decline of 17.6%. ’14-’15 annual U.S. butter commercial disappearance declined 5.2% YOY to a three year low as a 74.8% decline in exports more than offset a 1.6% increase in domestic demand. ’15-’16 YTD U.S. butter disappearance remains down 0.5% YOY throughout the first third of the production season, despite the most recent YOY increase. Cheese – Disappearance Remains Strong, Finishes at Record High for the Month of January Jan ’16 U.S. cheese commercial disappearance declined 6.2% MOM on a daily average basis from the monthly record high experienced in Dec ’15 but remained higher on a YOY basis, finishing up 3.8% to a record high for the month of January. The YOY increase in cheese disappearance was the 11th experienced in the past 12 months. Other-than-American cheese disappearance was particularly strong throughout December, increasing by 6.6% YOY and more than offsetting a 0.4% YOY decline in American cheese disappearance. Domestic cheese demand increased 4.4% YOY however export demand remained weak, declining 7.6% YOY. Cheese export volumes have declined YOY for 16 consecutive months while domestic demand has increased YOY for 15 consecutive months through January. ’14-’15 annual U.S. cheese commercial disappearance finished up 1.7% YOY to a new record annual high as a 2.9% increase in domestic demand more than offset a 14.1% decline in export demand. ’15-’16 YTD U.S. cheese disappearance is up an additional 3.2% YOY throughout the first third of the production season. Dry Whey – Disappearance Declines to 13 Month Low, Finished Down 4.3% YOY Jan ’16 U.S. dry whey commercial disappearance declined 15.4% MOM on a daily average basis and 4.3% YOY to a new 13 month low. The YOY decline in dry whey disappearance was the largest experienced in over a year on a percentage basis. Domestic dry whey demand was particularly weak, finishing 6.5% lower YOY, while dry whey export demand finished down 0.9% YOY. ’14-’15 annual U.S. dry whey commercial disappearance increased 1.2% YOY as a 26.1% increase in domestic demand more than offset a 17.9% decline in export demand. ’15-’16 YTD U.S. dry whey disappearance remains up an additional 14.7% YOY throughout the first third of the production season, despite the most recent YOY decline. NFDM/SMP – Disappearance Declines to Six Year Low for the Month of January Jan ’16 U.S. NFDM/SMP commercial disappearance declined 12.5% MOM on a daily average and 20.4% YOY to a six year low for the month of January. Jan ’16 U.S. NFDM/SMP export demand remained strong, increasing by 22.7% YOY, but the gains were not large enough to offset a 45.9% decline in domestic disappearance. The 12.5% MOM decline in NFDM/SMP disappearance was a contra-seasonal move when compared to the ten year average December – January seasonal increase of 19.1%. ’14-’15 annual U.S. NFDM/SMP commercial disappearance finished up 2.8% YOY as a 12.1% increase in domestic demand more than offset a 4.7% decline in export demand. ’15-’16 YTD U.S. NFDM/SMP disappearance is down 1.6% YOY throughout the first third of the production season. Fluid Milk Sales – Fat-Free Sales Continue to Weigh Down Overall Figures Dec ’15 U.S. fluid milk sales of 4.32 billion pounds were lower on a YOY basis for the 30th time in the past 32 months, declining 1.1% and finishing at a record low for the month of December. Sales of whole milk remained strong, finishing up 4.3% YOY, while fat-free milk sales declined 11.3% YOY. ’14-’15 annual U.S. total fluid milk sales finished down 1.8% YOY to the lowest annual figure on record. Annual whole milk sales finished up 2.2% however annual fat-free milk sales declined 10.8%. ’15-’16 YTD U.S. fluid milk sales are down at additional 0.8% YOY throughout the first quarter of the production season. Overall, Jan ’16 YOY domestic commercial disappearance declined most significantly within NFDM/SMP, followed by dry whey. YOY international disappearance was lower across all products with the exception of NFDM/SMP.