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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — JULY 8/JULY 15, 2022
StoneX: ‘Dairy Products report looked relatively bearish’ butter production is at This column was written 942.3 million pounds, down for the marketing week end3.5 percent from a year ago. ing July 8. Butter stocks, you’ll recall, You’ll recall that prelimiwere down 22.3 percent nary U.S. Department of from May 2021. Agriculture data showed Yogurt output totaled May milk production was 400.5 million pounds, up down 0.7 percent from May 1.7 percent from a year ago, 2021. The May Dairy MIELKE MARKET with year-to-date output at Products report shows which WEEKLY 1.96 billion pounds, down products got shorted — and 3.1 percent. it wasn’t cheese. By Lee Mielke The extra cheese proMay cheese output duction meant higher totaled 1.188 billion whey product output. pounds, up 2.5 percent Dry whey output from April and 2.1 perclimbed to 84.6 million pounds. This is cent above May 2021. It was the up 1.8 million pounds or 2.2 percent 19th consecutive monthly gain. from April, and 7.3 million or 9.5 perRemember that cheese stocks hit a cent above a year ago. Year-to-date is record high in May, up 3.7 percent at 401.2 million pounds, up 2.3 percent. from a year ago. Cheese output yearto-date stands at 5.8 billion pounds, Dry whey stocks totaled 73.5 million up 2.5 percent from a year ago. pounds, up 300,000 pounds or 0.3 perMay butter output totaled 181.7 mil- cent from April and 5.7 million pounds or 8.1 percent above a year ago. lion pounds, up 500,000 pounds from April but 1.3 million or 0.7 percent Nonfat dry milk output slipped to below a year ago. California output 192.7 million pounds, down 3 million was down 3.2 percent. Year-to-date pounds or 1.6 percent from April, and
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12.8 million or 6.2 percent below a year ago. Year-to-date, powder was at 920.8 million pounds, down 7 percent. Stocks jumped to 316.2 million pounds, up 17.1 million pounds or 5.7 percent from April but 32.3 million or 9.3 percent below a year ago. Skim milk powder output climbed to 38.7 million pounds, up 3.3 million pounds or 9.3 percent from April, but down 9.8 million or 20.3 percent below a year ago. Year-to-date, skim milk powder was at 180.2 million pounds, down 27.6 percent from 2021. Combined nonfat and skim milk powder output was below a year ago for the sixth month in a row. n The Dairy Products report looked relatively bearish, according to StoneX Dairy Group. “Nonfat dry milk in particular stands out as a bear with stock levels 42 million pounds over forecast. The fact that production leaned heavily towards nonfat dry milk and not skim milk powder also would seem to weigh upon that market.” Cheese looked bullish, adds StoneX. “American cheese production was some 6 million pounds less than forecast as we continue to see very strong mozzarella production. Expect cheese exports to remain strong moving forward given the production levels.” Butter looked a bit bearish with heavier than expected production, according to StoneX, while the whey breakdown appeared bullish. “Stock levels were 6 million pounds under expectations. It looks like demand was very strong which makes sense with slightly lower prices we’ve seen of late.” Dairy product prices entered July weaker. The markets were closed for the Fourth of July holiday and July 5 was not a great reopening. The Global Dairy Trade dropped and most CME prices fell soon after. Demand is weaker than most people expected, explained Matt Gould, editor and analyst with the Dairy and Food Market Analyst newsletter in the July 11 “Dairy Radio Now” broadcast. He also pointed to the Fed raising interest rates, the slowing economy, and the loosening of our tight supply chains. When asked if exports will bail dairy out, Gould said, “That’s the almighty question.”
U.S. dairy prices have moved below the rest of the world, he said. “If you’re an international dairy buyer, you look at the United States and say, their dairy products are on sale.” So, while dairy prices have fallen, Gould says “It will not be a total plunge and we will see a floor put in here — if for no other reason than milk supplies globally remain tight.” Milk supplies also remain constrained in most areas of the United States, he said — especially in the West, where drought is a factor and elevated feed costs; “but this is true globally where we don’t have a wall of milk anywhere,” he concluded. n Speaking of exports, the United States sent 89 million pounds of cheese sailing in May. While down slightly from March and April, volume was up 31 percent from May 2021 — the highest May on record, according to HighGround Dairy. Cheddar exports were up 135.1 percent. Mexico remained the top cheese destination, with volume up 14 percent. Butter totaled 8.9 million pounds, down 8.4 percent. Year-to-date, exports are up 17.7 percent. Nonfat dry milk/skim milk powder exports totaled 177.3 million pounds, down 9.4 percent. It is the sixth consecutive month to be below the previous year, but still the second highest May on record, according to HighGround Dairy. Mexico’s imports were down 2.3 percent. The United States exported 35.9 million pounds of dry whey, down 23.4 percent from a year ago — mainly due to deteriorating demand from China, says HighGround Dairy, down 51 percent. n Meanwhile, troubles remain in the Global Dairy Trade which saw the weighted average drop 4.1 percent this week, following the 1.3 percent decline on June 21. Traders brought 51.7 million pounds of product to market, up from 45.8 million on June 21. The average metric ton price fell to $4,360 U.S., down from $4,600. Butter led the declines, plunging 9.1 percent after gaining 2.4 percent on June 21. Anhydrous milkfat was down See MIELKE, pg. 14
