Dairy Market R
Dairy Management Inc.
Vol u m e 2 5 | N o. 1
Overview
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January 2022
D MI | NMP F
Dairy markets are in a very different situation than almost any experienced since 2014.
The dominant features of the basic U.S. dairy situation continue to be tighter milk production, record export volumes, higher prices, sluggish domestic consumption, and dropping inventories. Total dairy cows and total milk production in the United States were both lower than a year earlier during the September–November rolling quarter. December prices for nonfat dry milk and dry whey were the highest monthly prices since 2014; they, as well as December butter and cheese prices, were all among the highest observed during all months since the beginning of the year 2000. The long period of tough market conditions from 2014 until recently constitutes a major reason for the production contraction that’s driving the current situation.
Commercial Use of Dairy Products Growth in total commercial use of milk in all dairy products in all markets, domestic and export, was positive for both milkfat and skim solids and averaged about one percent during September–November. However, that growth was due entirely to exports, since domestic commercial use during that period dropped by about half a percent from a year earlier. Fluid milk and American-type cheese were two key categories that showed lower consumption in the United States.
U.S. Dairy Trade The United States exported the equivalent of 17.6 percent of domestic milk solids production during calendar year 2021
to date through November, a record by this measure for the first eleven months of any calendar year, the next highest being 16.2 percent in 2020. Strong growth in exports of fats and cheese coupled with generally lower exports of dried milk and whey products during September–November raises the question of how much these changes indicate a rebalancing of the preponderance of skim milk products in the typical U.S. dairy export mix. The answer is: noticeably, but minor. During the first half of 2021, exports of mostly skim ingredient products, defined as those consisting of 70 percent or more skim milk solids, accounted for an average of 85 percent of total milk solids exported. During July through November, this percentage dropped to 83 percent. The corresponding percentages of higher-fat products, defined continued on page 2
Domestic Commercial Use
Sept–Nov 2021
Sept–Nov 2020
Total Fluid Milk Products Yogurt Butter American–type Cheese All Other Cheese Total Cheese Dry Skim Milk All Products (milk equiv., milkfat basis) All Products (milk equiv., skim solids basis) All Products (milk equiv., total solids basis)
11,229 1,141 615 1,293 1,994 3,287 177 57,548 44,877 48,772
11,517 1,107 613 1,341 1,938 3,279 226 57,903 45,029 49,002
2020–2021 Change
Percent Change
-288 33 2 -48 56 7 -49 -355 -152 -231
-2.5% 3.0% 0.3% -3.6% 2.9% 0.2% -21.6% -0.6% -0.3% -0.5%
(million pounds)