5 minute read
Mielke Market Weekly
This column was written butter production is at for the marketing week end- 942.3 million pounds, down ing July 8. 3.5 percent from a year ago. You’ll recall that preliminary U.S. Department of Agriculture data showed Butter stocks, you’ll recall, were down 22.3 percent from May 2021. May milk production was Yogurt output totaled down 0.7 percent from May 400.5 million pounds, up 2021. The May Dairy Products report shows which products got shorted — and MIELKE MARKET WEEKLY 1.7 percent from a year ago, with year-to-date output at 1.96 billion pounds, down it wasn’t cheese. By Lee Mielke 3.1 percent. May cheese output totaled 1.188 billion pounds, up 2.5 percent MARKETING The extra cheese production meant higher whey product output. from April and 2.1 per- Dry whey output cent above May 2021. It was the climbed to 84.6 million pounds. This is 19th consecutive monthly gain. up 1.8 million pounds or 2.2 percent Remember that cheese stocks hit a from April, and 7.3 million or 9.5 perrecord high in May, up 3.7 percent cent above a year ago. Year-to-date is from a year ago. Cheese output year- at 401.2 million pounds, up 2.3 percent. to-date stands at 5.8 billion pounds, up 2.5 percent from a year ago. Dry whey stocks totaled 73.5 million pounds, up 300,000 pounds or 0.3 per-
May butter output totaled 181.7 mil- cent from April and 5.7 million pounds lion pounds, up 500,000 pounds from or 8.1 percent above a year ago. April but 1.3 million or 0.7 percent below a year ago. California output was down 3.2 percent. Year-to-date Nonfat dry milk output slipped to 192.7 million pounds, down 3 million pounds or 1.6 percent from April, and
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https://www.research.net/r/100337 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.
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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
