U.S. Commercial Disappearance Update – Feb ’16
Executive Summary U.S. dairy commercial disappearance figures provided by USDA were recently updated with values spanning through Dec ’15. Highlights from the updated report include: • U.S. commercial disappearance for milk used in all products remained strong on a skim-solids basis but declined YOY on a milk-solids basis for the first time in five months. • Cheese and nonfat dry milk disappearance figures were particularly strong, each finishing at record highs for the month of December. • Butter disappearance declined sharply throughout Dec ’15 while fluid milk sales declined YOY for the 29th time in the past 31 months during Nov ’15. Additional Report Details All Milk – Disappearance Remains Higher YOY on a Skim-Solids Basis, Declines YOY on Milk-Fat Basis According to USDA, Dec ’15 U.S. commercial disappearance for milk used in all products declined 2.9% YOY on a milk-fat basis but remained strong on a skim-solids basis, finishing 2.1% above the previous year. Disappearance on a milk-fat basis remained at the second highest figure on record for the month of December while disappearance on a skim-solids basis finished at a December record high. Domestic demand continued to outpace international demand, increasing 2.9% YOY on a skim-solids basis but finishing down 1.9% on a milk-fat basis. Butter – Disappearance Declines Seasonally, Finishes 10.1% Lower YOY Dec ’15 U.S. butter commercial disappearance declined 23.7% MOM on a daily average basis and 10.1% YOY to a three year low for the month of December. International demand for U.S. butter remained weak, finishing lower on a YOY basis for the 20th consecutive month as U.S. butter prices continue to trade at a premium to international price levels however domestic demand for U.S. butter also declined on a YOY basis, finishing down 8.1%. The sharp MOM decline of 23.7% was larger than the ten year average November – December decline of 15.8%. ’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. Despite the Dec ’15 YOY decline, U.S. butter disappearance remains up 0.2% YOY throughout the first quarter of the ’15-’16 production season. Cheese – Disappearance Remains Strong, Finishes at Record High for the Month of December Dec ’15 U.S. cheese commercial disappearance declined 0.9% MOM on a daily average basis from the monthly record high experienced in Nov ’15 but remained higher on a YOY basis, finishing up 1.5% to a record high for the month of December. The YOY increase in cheese disappearance was the tenth experienced in the past 11 months. Other-than-American cheese disappearance was particularly strong throughout December, increasing by 3.4% YOY and more than offsetting a 1.4% YOY decline in American cheese disappearance. Domestic cheese demand increased 2.2% YOY however export demand remained weak, declining 9.3% YOY. Cheese export volumes have declined YOY for 15 consecutive months while domestic demand has increased YOY for 14 consecutive months through December. ’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 2.7% YOY throughout the first quarter of the production season. Dry Whey – Disappearance Remains Strong, Finishes 11.3% Higher YOY Dec ’15 U.S. dry whey commercial disappearance remained strong, increasing 2.5% MOM on a daily average basis and 11.3% YOY. Domestic dry whey commercial disappearance increased YOY for the 12th consecutive month, finishing 82.1% above the previous year, however U.S. dry whey export demand remained weak, finishing down 24.0% 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 is up an additional 21.9% YOY throughout the first quarter of the production season. NFDM/SMP – Disappearance Finishes at December Record High as Exports Remain Strong Dec ’15 U.S. NFDM/SMP commercial disappearance increased 21.6% MOM on a daily average and 2.3% YOY to a new record high for the month of December. Dec ’15 domestic NFDM/SMP disappearance declined 19.9% YOY however the YOY decline in domestic demand was more than offset by a 35.5% YOY increase in NFDM/SMP exports. The 21.6% MOM increase in NFDM/SMP disappearance was over double the ten year average November – December seasonal increase of 10.2%. ’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 up an additional 6.8% YOY throughout the first quarter of the production season. Fluid Milk Sales – Fat-Free Sales Continue to Weigh Down Overall Figures Nov ’15 U.S. fluid milk sales of 4.16 billion pounds were lower on a YOY basis for the 29th time in the past 31 months, declining 0.1% and finishing at a record low for the month of November. Sales of whole milk remained strong, finishing up 5.2% YOY, while fat-free milk sales declined 11.0% YOY. ’14-’15 annual 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%. Overall, Dec ’15 YOY domestic commercial disappearance declined most significantly within NFDM/SMP and butter but finished significantly higher for dry whey. YOY international disappearance was lower across all products with the exception of NFDM/SMP.