U.S. Dairy Cold Storage Update – Feb ’18
Executive Summary
U.S. cold storage figures provided by USDA were recently updated with values spanning through Jan ’18. Highlights from the updated report include:
According to USDA, Jan ’18 U.S. butter stocks increased 32.6% MOM and 1.0% YOY, finishing higher on a YOY basis for the second consecutive month. Butter stocks had finished lower on a YOY basis over eight consecutive months prior to the two most recent YOY increases. Butter stocks finished at a 24 year seasonal high for the month of January, finishing 19.4% above three year average figures.
The MOM seasonal build in butter stocks of 55.1 million pounds, or 32.6%, was fairly consistent with the ten year average December – January seasonal build of 44.8 million pounds, or 36.4%. U.S. butter stocks typically reach seasonal lows throughout the months of November and December, prior to increasing seasonally throughout the first half of the calendar year. The most recent seasonal drawdown in butter stocks of 154.8 million pounds, occurring from Jun ’17 – Nov ’17, was larger than the ten year average seasonal drawdown of 140.2 million pounds.
On a days of usage basis, Jan ’18 U.S. butter stocks remained lower YOY for the third time in the past four months, however. When assuming 12 month rolling average YOY usage rates and known stock values for the month of January, butter stocks on a days of usage basis finished down 21.8% YOY.
Cheese – Stocks Remain at Record High Seasonal Levels, Finish up 7.0% YOY
Jan ’18 U.S. cheese stocks declined 0.4% MOM but remained 7.0% higher YOY, finishing at a record seasonal high for the month of January. The monthly YOY increase in cheese stocks was the 39th experienced in a row however the MOM decline was a contraseasonal move. Cheese stocks have increased by an average of 13.2 million pounds, or 1.3%, from December – January over the past ten years compared to the most recent decline in stocks of 5.3 million pounds, or 0.4%.
U.S. cheese stocks typically exhibit a smaller degree of MOM and YOY variation than U.S. butter stocks. Cheese stocks do not have as large of a seasonal build as butter stocks, with the five year average seasonal build in cheese stocks representing a 12.7% increase in stocks vs. a 121.1% increase in butter stocks. The reduced seasonality exhibited in U.S. cheese stocks has led to less volatile YOY variation, with cheese stocks having a five year average absolute YOY change of 5.3% compared to 26.3% for U.S. butter stocks.
On a days of usage basis, Jan ’18 U.S. cheese stocks also finished higher YOY. When assuming 12 month rolling average YOY usage rates and known stock values for the month of January, cheese stocks on a days of usage basis increased YOY for the tenth time in the past 12 months, finishing up 4.4%.
- Jan ’18 U.S. butter stocks increased on a YOY basis for the second consecutive month, finishing 1.0% above the previous year. Butter stocks finished at a 24 year seasonal high for the month of January.
- Jan ’18 U.S. cheese stocks increased 7.0% YOY, finishing at a record seasonal high for the month of January. Stocks declined slightly from previous month volumes however, which was a contraseasonal move when compared to ten year average seasonal figures.
According to USDA, Jan ’18 U.S. butter stocks increased 32.6% MOM and 1.0% YOY, finishing higher on a YOY basis for the second consecutive month. Butter stocks had finished lower on a YOY basis over eight consecutive months prior to the two most recent YOY increases. Butter stocks finished at a 24 year seasonal high for the month of January, finishing 19.4% above three year average figures.
The MOM seasonal build in butter stocks of 55.1 million pounds, or 32.6%, was fairly consistent with the ten year average December – January seasonal build of 44.8 million pounds, or 36.4%. U.S. butter stocks typically reach seasonal lows throughout the months of November and December, prior to increasing seasonally throughout the first half of the calendar year. The most recent seasonal drawdown in butter stocks of 154.8 million pounds, occurring from Jun ’17 – Nov ’17, was larger than the ten year average seasonal drawdown of 140.2 million pounds.
On a days of usage basis, Jan ’18 U.S. butter stocks remained lower YOY for the third time in the past four months, however. When assuming 12 month rolling average YOY usage rates and known stock values for the month of January, butter stocks on a days of usage basis finished down 21.8% YOY.
Cheese – Stocks Remain at Record High Seasonal Levels, Finish up 7.0% YOY
Jan ’18 U.S. cheese stocks declined 0.4% MOM but remained 7.0% higher YOY, finishing at a record seasonal high for the month of January. The monthly YOY increase in cheese stocks was the 39th experienced in a row however the MOM decline was a contraseasonal move. Cheese stocks have increased by an average of 13.2 million pounds, or 1.3%, from December – January over the past ten years compared to the most recent decline in stocks of 5.3 million pounds, or 0.4%.
U.S. cheese stocks typically exhibit a smaller degree of MOM and YOY variation than U.S. butter stocks. Cheese stocks do not have as large of a seasonal build as butter stocks, with the five year average seasonal build in cheese stocks representing a 12.7% increase in stocks vs. a 121.1% increase in butter stocks. The reduced seasonality exhibited in U.S. cheese stocks has led to less volatile YOY variation, with cheese stocks having a five year average absolute YOY change of 5.3% compared to 26.3% for U.S. butter stocks.
On a days of usage basis, Jan ’18 U.S. cheese stocks also finished higher YOY. When assuming 12 month rolling average YOY usage rates and known stock values for the month of January, cheese stocks on a days of usage basis increased YOY for the tenth time in the past 12 months, finishing up 4.4%.