U.S. Commercial Disappearance Update – Nov ’14
All Milk – Commercial Disappearance Rebounds on Milk-Fat Basis, Finishes Year up 3.0% According to USDA, Sep ’14 U.S. commercial disappearance for milk used in all products increased YOY on a both a milk-fat and skim-solids basis, up 2.5% and 5.8%, respectively. Disappearance on a milk-fat basis rebounded from the first YOY decline in 15 months experienced in Aug ’14, although the 2.5% YOY increase remained lower than the ’13-’14 YTD average monthly gain. The 5.8% YOY increase in disappearance on a skim-solids basis reached a 12 month high. Domestic demand was strong, with disappearance on milk-fat and skim-solids basis’ up 5.6% and 10.2% YOY, respectively. ’13-’14 YTD commercial disappearance for milk used in all products finished up 3.0% on a milk-fat basis and 2.1% on a skim-solids basis. The YOY increase in commercial disappearance on a milk-fat basis set a new record annual high while disappearance on a skim-solids basis finished 0.3% ahead of average annual disappearance. The majority of the ’13-’14 annual increases have stemmed from an increase in international demand. ’13-’14 YTD domestic commercial disappearance for milk used in all products finished up only 1.7% on a milk-fat basis and 1.1% on a skim-solids basis. Butter – Disappearance Rebounds MOM but YOY Declines Continue Sep ’14 U.S. butter commercial disappearance increased 14.4% MOM on a daily average basis from the relative low experienced in Aug ’14 but continued to decline on a YOY basis, down 7.8%. YOY disappearance has declined 13.1% YOY over the past two months. Demand for U.S. butter has moderated due to recent significant price increases. The Sep ’14 announced butter price was double the price of last September and up 13.2% MOM. Higher domestic butter prices have led to a decline in exports, with Q3 ’14 butter export volumes down 60.9% YOY. Despite the recent YOY declines, ’13-’14 YTD total butter commercial disappearance finished up 4.4% YOY, putting additional pressure on historically tight butter stocks. U.S. butter stocks remain extremely low, with average monthly butter stocks down 37.2% YOY over the past six months. Cheese – Disappearance Increases to New Sep Record, Second Highest Monthly Figure on Record Sep ’14 U.S. cheese commercial disappearance increased 4.2% YOY and 5.1% MOM on a daily average basis. The monthly YOY increase was the 15th experienced in the last 16 months. Disappearance increased to the second highest monthly figure ever recorded, trailing only Oct ’13 disappearance. American cheese commercial disappearance increased 6.6% YOY while other-than-American cheese disappearance increased 2.8% YOY. U.S. cheese exports increased YOY for the 16th straight months in Sep ’14 but the YOY percentage increase in cheese exports was the lowest throughout the period. Domestic cheese commercial disappearance rebounded from MOM and YOY declines in Aug ’14, increasing by 3.9% YOY and 6.1% MOM on a daily average basis. ’13-’14 YTD cheese commercial disappearance finished up 3.2% YOY, putting additional pressure on tight cheese stocks. Growth in commercial use of other-than-American type cheese finished up 4.0% YOY while American cheese disappearance finished up 1.9% YOY. U.S. cheese stocks remain extremely low, with the Mar-Jul ’14 YOY declines in stocks being the largest in over 12 years. As milk production has begun to stabilize in the Midwest, stock deficits have lessened, but still remain well below last year. Domestic cheese stocks have declined YOY for 12 consecutive months. NFDM/SMP – YOY Commercial Disappearance Continues to Rebound, up 27.7% YOY Sep ’14 U.S. NFDM/SMP commercial disappearance continues to rebound, increasing 27.7% YOY and 29.0% MOM on a daily average basis. Disappearance increased to the third highest monthly figure ever recorded, trailing only Jun ’12 and May ’14 disappearance. NFDM/SMP disappearance increased despite significantly reduced NFDM/SMP exports, which declined 29.6% YOY And 27.0% MOM on a daily average basis in Sep ’14. Increases in domestic NFDM/SMP commercial disappearance outweighed the declines in export demand, with domestic disappearance increasing 100.9% YOY and 97.9% MOM on a daily average basis. U.S. NFDM prices declined 17.7% MOM in Sep ’14, which is likely to have contributed to the increase in domestic demand. ’13-’14 YTD NFDM/SMP commercial disappearance finished up 4.9% YOY. Fluid Milk Sales – YOY Sales Continue to Decline Through July U.S. fluid milk sales increased 0.7% MOM on a daily average basis but sales continued to decline on a YOY basis with Jul ’14 sales down 3.4% YOY. Monthly fluid milk sales have declined YOY for 15 straight months, with an average YOY decline of 2.6% over the period. Higher milk prices have accelerated the decline in demand for fluid milk over the past several months. ’13-’14 YTD fluid milk sales are down 2.7% through the first ten months of the production season, on pace to be the largest annual YOY decline in fluid milk sales on record. See the table below for a summary of key Sep ’14 U.S. dairy commercial disappearance figures in addition to the Jul ’14 fluid milk sales figure.