U.S. Commercial Disappearance Update – Jul ’14
All Milk – Commercial Disappearance Declines MOM on Weakening Exports According to USDA, May ’14 U.S. commercial disappearance for milk used in all products was up 0.6% YOY but down 3.4% MOM on a daily average basis. May represented the 12th straight month of YOY increases in commercial disappearance for milk used in all products but the 0.6% YOY increase was the lowest over the 12 month period. Commercial disappearance for milk used in all products has been weakened primarily by a decline in domestic exports. The value of all U.S. dairy exports in May ’14 declined 4.8% MOM on a daily average basis. ’13-’14 YTD commercial disappearance for milk used in all products remains up 3.8% through the first eight months of the production season, on pace to be the largest annual increase on record. Butter – Commercial Disappearance Declines MOM on Higher Prices, Weakening Exports May ’14 U.S. butter commercial disappearance decreased 3.1% YOY and 17.6% MOM on a daily average basis. Demand for domestic butter appears to have moderated due to recent significant price increases. The Jun ’14 announced butter price was up 41.8% YOY and 6.8% MOM, with additional gains experienced throughout the month of July. May ’14 export volumes of butterfat declined 39.1% MOM and 7.5% YOY with the YOY decline in volume being the largest in over five and a half years. ’13-’14 YTD butter commercial disappearance remains up 10.1% YOY, putting additional pressure on historically tight butter stocks. U.S. butter stocks remain extremely low, with the Apr ’14 and Jun ’14 YOY monthly declines in butter stocks being the two largest declines in over three and a half years on a percentage basis. NFDM/SMP – Commercial Disappearance Up on Record Exports May ’14 U.S. NFDM/SMP commercial disappearance increased 31.6% YOY and 28.2% MOM on a daily average basis. Monthly NFDM/SMP commercial disappearance was the highest in nearly two years, driven by strong powder exports. May ’14 export volumes of NFDM/SMP reached a new all-time high of 128.8 million lbs, increasing by 9.9% MOM, 7.8% YOY, and 5.8% over the previous record export volume shipped in Apr ’13. Overall, YTD NFDM/SMP commercial disappearance is up 4.7% YOY. Prior to the May ’14 figures, USDA reported only NFDM commercial use figures which did not include SMP, the protein-standardized form of NFDM primarily used for exports. Combined NFDM/SMP commercial use figures will be reported in future months. Cheese – YOY Commercial Disappearance Increases Continue May ’14 U.S. cheese commercial disappearance increased 2.5% YOY but declined 2.9% MOM on a daily average basis. Cheese demand remains strong on a YOY basis as prices have declined off recent highs, but domestic cheese exports declined 8.9% on a MOM basis in May ’14. The Jun ’14 announced cheddar cheese price was up 14.3% YOY, but was 13.5% lower than the recent high set in Apr ’14. ’13-’14 YTD cheese commercial disappearance is up 3.1% YOY, putting additional pressure on tight cheese stocks. U.S. cheese stocks remain extremely low, with the Mar-Jun ’14 YOY declines in stocks being the largest in over 12 years. Growth in commercial use of other-than-American type cheese (up 3.8% YTD) has been stronger than for American cheese types (up 2.0% YTD) but American cheese types led the May ’14 increase, up 3.4% YOY vs. 1.8% YOY for other-than-American type cheese.