U.S. Commercial Disappearance Update – Dec ’14
All Milk – Commercial Disappearance Declines on Milk-Fat and Skim-Solids Bases According to USDA, Oct ’14 U.S. commercial disappearance for milk used in all products declined YOY on both a milk-fat and skim-solids basis, down 3.0% and 1.5%, respectively. Disappearance on a milk-fat basis has declined by 0.9% YOY in total over the past three months after increasing YOY for 14 consecutive months from Jun ’13 – Jul ’14 at an average rate of 3.3%. Disappearance on a skim-solids basis declined YOY for the first time in six months after increasing by an average rate of 2.7% from May ’14 – Sep ’14. Domestic demand also declined in Oct ’14, with disappearance on milk-fat and skim-solids bases down 0.7% and 1.2% YOY, respectively. The YOY declines in commercial disappearance to begin the ’14-’15 production season follow strong disappearance experienced last year. ’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 gains 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 – YOY Declines in Disappearance Continue on Weak International Demand Oct ’14 U.S. butter commercial disappearance increased slightly MOM, up 1.0% on a daily average basis, but continued to decline on a YOY, down 20.4%. The YOY decline on a percentage basis was the largest in nearly three and a half years. Demand for U.S. butter has moderated due to recent significant price increases, with YOY disappearance down 15.8% YOY from Aug ’14 – Oct ’14. Aug ’14 – Oct ’14 U.S. announced butter prices increased YOY by an average of 79.9%, although Oct ’14 butter prices were off their high experienced in Sep ’14. Higher domestic butter prices have led to a drastic decline in exports, with Aug ’14 – Oct ’14 butterfat export volumes down 73.5% YOY. Despite the higher prices, Oct ’14 U.S. butter domestic commercial disappearance increased YOY for the third consecutive month, finishing up 2.1%. Although growth in domestic demand has continued, lower international demand has helped to reduce U.S. butter stock deficits. U.S. butter stocks continue to lag previous years, however the Nov ’14 deficit in butter stocks was the smallest on a percentage basis in the past 12 months. Cheese – Disappearance Fairly Flat on MOM and YOY Bases Oct ’14 U.S. cheese commercial disappearance declined 0.6% YOY and 0.2% MOM on a daily average basis. Despite the slight MOM and YOY declines, Oct ’14 U.S. cheese commercial disappearance was the third highest monthly figure ever recorded. Oct ’14 U.S. American cheese commercial disappearance was up 0.7% MOM on a daily average basis but down 2.9% YOY while other-than-American cheese commercial disappearance was down 0.7% MOM on a daily average basis but up 0.9% YOY. U.S. American cheese domestic disappearance was down 2.2% while U.S. other-than-American cheese domestic disappearance was up 0.7%. NFDM/SMP – YOY Commercial Disappearance Declines From Relative Highs Oct ’14 U.S. NFDM/SMP commercial disappearance declined 14.5% YOY and 31.5% MOM on a daily average basis. Despite the significant YOY decline, NFDM/SMP commercial disappearance was the second largest October figure on record while the MOM decline was relative to the third highest monthly figure ever recorded in Sep ’14. Oct ’14 U.S. NFDM/SMP domestic commercial disappearance finished up 2.1% 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 Oct ’14 U.S. dairy commercial disappearance figures in addition to the Jul ’14 fluid milk sales figure.