Executive Summary U.S. dairy commercial disappearance figures provided by USDA were recently updated with values spanning through Mar ’16. Highlights from the updated report include: • Mar ’16 U.S. commercial disappearance for milk used in all products increased 2.1% YOY on a milk-fat basis and 1.5% YOY on a skim-solids basis, each finishing at new record high values for the month of March. • Mar ’16 butter and cheese disappearance figures each finished at record highs for the month of March however dry whey and NFDM disappearance finished lower on a YOY basis as declines in export demand outweighed increases in domestic consumption. • U.S. fluid milk sales remained lower on a YOY basis for the 32nd time in the past 34 months during Feb ’16, as sales of fat-free milk remained particularly weak. Additional Report Details All Milk – Disappearance Finishes at Record March Highs on both a Milk-Fat and Skim-Solids Basis According to USDA, Mar ’16 U.S. commercial disappearance for milk used in all products increased 2.1% YOY on a milk-fat basis and 1.5% YOY on a skim-solids basis, each finishing at new record high values for the month of March. Domestic demand outpaced international demand on both a milk-fat and skim-solids basis, increasing by 3.1% YOY and 7.6% YOY, respectively, throughout the month. Butter – Disappearance Reaches Record High for the Month of March Mar ’16 U.S. butter commercial disappearance increased 27.3% MOM on a daily average basis while also finishing 8.8% above the previous year consumption level, setting a new record high for the month of March. Mar ’16 domestic butter demand finished up 10.7% YOY, more than offsetting a 57.2% YOY decline in international demand. YOY strength in domestic butter consumption was partially due to an earlier than normal Easter experienced during 2016. ’14-’15 annual U.S. butter commercial disappearance declined 4.6% YOY to a three year low as a 74.8% decline in export volumes more than offset a 2.3% increase in domestic demand. ’15-’16 YTD U.S. butter disappearance has rebounded by 2.9% YOY throughout the first half of the production season. Cheese – Disappearance Remains Strong, Finishes at Record High for the Month of March Mar ’16 U.S. cheese commercial disappearance remained strong, increasing by 0.2% MOM on a daily average basis and 1.7% YOY to a record high for the month of March. YOY increases in cheese disappearance have been exhibited throughout nine consecutive months through Mar ’16. Other-than-American cheese disappearance was particularly strong throughout March, increasing by 5.3% YOY and more than offsetting a 3.7% YOY decline in American cheese disappearance. Domestic cheese demand increased 3.9% YOY however export demand remained weak, declining 25.7% YOY. Cheese export volumes have declined YOY for 18 consecutive months while domestic demand has increased YOY for 19 consecutive months through March. ’14-’15 annual U.S. cheese commercial disappearance finished up 2.1% YOY to a new record annual high as a 3.4% 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 3.2% YOY throughout the first half of the production season. Dry Whey – Disappearance Finishes Lower on YOY Basis as Export Demand Remains Weak Mar ’16 U.S. dry whey commercial disappearance declined 4.9% MOM on a daily average basis and 1.0% YOY as strong domestic demand was not enough to offset a decline in export volumes. Domestic dry whey demand increased 32.1% YOY, however dry whey export volumes declined on a YOY basis for the 22nd consecutive month during Mar ’16, finishing down 39.1%. ’14-’15 annual U.S. dry whey commercial disappearance increased 0.4% YOY as a 24.6% increase in domestic demand more than offset an 18.0% decline in export demand. ’15-’16 YTD U.S. dry whey disappearance remains up an additional 11.0% YOY throughout the first half of the production season, despite the most recent monthly decline. NFDM/SMP – Disappearance Finishes Lower on YOY Basis for Third Consecutive Month Mar ’16 U.S. NFDM/SMP commercial disappearance declined 3.3% MOM on a daily average basis and 5.1% YOY as export demand turned negative throughout the month. U.S. NFDM/SMP domestic disappearance increased on a YOY basis for the first time in four months during Mar ’16 however NFDM/SMP export demand declined on a YOY basis for the first time in seven months, finishing 25.2% lower. Total NFDM/SMP disappearance has finished lower on a YOY basis for three consecutive months through March. ’14-’15 annual U.S. NFDM/SMP commercial disappearance finished up 2.9% YOY as a 14.8% increase in domestic demand more than offset a 6.1% decline in export demand. ’15-’16 YTD U.S. NFDM/SMP disappearance has declined 2.1% YOY throughout the first half of the production season, however, as recent declines have continued. Fluid Milk Sales – Fat-Free Sales Continue to Weigh Down Overall Figures Feb ’16 U.S. fluid milk sales of 4.04 billion pounds were lower on a YOY basis for the 32nd time in the past 34 months, declining 1.3% and finishing at a record low for the month of February when adjusted for leap day. Sales of whole milk remained strong, finishing up 2.9% YOY, while fat-free milk sales declined 10.5% YOY. ’14-’15 annual U.S. 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% throughout the year. ’15-’16 YTD U.S. fluid milk sales are down at additional 1.3% YOY throughout the first five months of the production season. Overall, Mar ’16 YOY increases in domestic commercial disappearance were widespread as were YOY declines in international disappearance.