U.S. Commercial Disappearance Update – Aug ’14
All Milk – Commercial Disappearance up YOY for 13th Straight Month According to USDA, Jun ’14 U.S. commercial disappearance for milk used in all products was up 2.7% YOY and 3.8% MOM on a daily average basis. June represented the 13th straight month of YOY increases in commercial disappearance for milk used in all products, with the Jun ’14 figure being the second largest on record. ’13-’14 YTD commercial disappearance for milk used in all products is up 3.6% through the first three quarters of the production season, on pace to be the largest annual increase on record. Butter – Commercial Disappearance up Marginally MOM Despite Higher Prices Jun ’14 U.S. butter commercial disappearance increased 2.8% YOY and 3.6% MOM on a daily average basis. Relative butter disappearance remains low, with May-Jun ’14 combined disappearance being the lowest two month figure in over a year. Demand for U.S. butter appears to have moderated due to recent significant price increases. The Jul ’14 announced butter price was up 52.2% YOY and 7.3% MOM, with additional gains experienced throughout the month of August. Higher butter prices have led to a decline in exports, with Q2 ’14 butter export sales 36.2% below Q1 ’14 sales on a daily average basis. ’13-’14 YTD butter commercial disappearance remains up 9.3% YOY, putting additional pressure on historically tight butter stocks. U.S. butter stocks remain extremely low, with Apr-Jul ’14 average butter stocks down 42.0% YOY. Cheese – YOY Commercial Disappearance Increases Continue Jun ’14 U.S. cheese commercial disappearance increased 4.5% YOY and 5.0% MOM on a daily average basis. Jun ’14 disappearance was the second largest figure on record on a daily average basis, trailing only Oct ’13 disappearance. Despite relatively high prices, U.S. cheese exports have remained strong; with Jun ’14 export volumes increasing 32.2% YOY and 10.3% MOM on a daily average basis. ’13-’14 YTD cheese commercial disappearance is up 3.3% YOY, putting additional pressure on tight cheese stocks. U.S. cheese stocks remain extremely low, with the Mar-Jul ’14 YOY declines in stocks being the largest in over 12 years. Growth in commercial use of other-than-American type cheese (up 4.1% YTD) has been stronger than for American cheese types (up 2.1% YTD), with other-than-American cheese disappearance particularly strong in Jun ’14, increasing 5.6% YOY. NFDM/SMP – Commercial Disappearance off Recent High, Remains up YOY Jun ’14 U.S. NFDM/SMP commercial disappearance increased 1.3% YOY but declined 17.7% MOM on a daily average basis from the recent high experienced in May ’14. U.S. NFDM/SMP export volumes remain robust, implying lower domestic powder demand. Jun ’14 export volumes of NFDM/SMP reached a new all-time high, increasing 26.0% YOY and 3.9% MOM on a daily average basis over the previous record high export volumes experienced in May ’14. ’13-’14 YTD NFDM/SMP commercial disappearance is up 4.2% YOY through the first three quarters of the production season. Fluid Milk Sales – YOY Sales Continue to Decline Through May U.S. fluid milk sales continue to decline, with May ’14 sales down 3.5% YOY and 2.0% MOM on a daily average basis. Higher milk prices have accelerated the decline in demand for fluid milk over the past several months. Monthly fluid milk sales have declined YOY for 13 straight months, with an average YOY decline of 2.3% over the period. ’13-’14 YTD fluid milk sales are down 2.7% through the first eight months of the production season, on pace to be the largest YOY decline in fluid milk sales on record. See the table below for a summary of key Jun ’14 U.S. dairy commercial disappearance figures in addition to the May ‘14 fluid milk sales figure.