The April Dairy Market Report has fluid milk sales showing the lowest volume decline in almost a year during November 2016–January 2017. American-type cheese consumption continued to outpace that of other cheeses during the same period. American-type cheese exports showed positive growth for the first time in more than a year during December 2016–February 2017. U.S.exports of dry ingredient products continued to grow by double-digit percentages during the same period, as they have since the second half of 2016. U.S. milk production continued to grow by around 2½ percent, as cow numbers have crept up. Product inventories are building and beginning to erode the gains in milk prices registered during the second half of 2016.
Commercial Use of Dairy Products
Sales of all fluid products were down by just 0.3 percent from a year earlier during November 2016–January 2017,the lowest three-month drop in almost a year. Total whole milk sales were up by 5.5 percent during the period,fueling an estimated 2.2 percent year-over-year increase in estimated consumption of milkfat in all fluid products. Commercial use of American-type cheese outpaced that of other cheeses during the period, a pattern that has generally continued since last spring. For the first time since last summer, the growth rates of total milk consumption showed only a relatively small divergence when measured on a milk equivalent milkfat basis versus skim solids basis.
U.S. Dairy Trade
American-type cheese exports showed positive growth for the first time in more than a year during December 2016–February 2017. U.S. cheese exports during calendar year 2016 were 30,000 metric tons less than during calendar year 2015, a drop of 9.7 percent, adjusted for leap year. Competition from other major exporters increased considerably, particularly following the removal of EU milk production quotas. The Corresponding statistics on dairy exports by the other major cheese exporters are: the European Union, 81,000 tons more exports to non-EU destinations, an increase of 11.2 percent; New Zealand, 28,000 tons more, a gain of 8.4 percent, and Australia, a loss of 4,000 tons, down by 2.5 percent. This represents a major realignment of the world’s top cheese exporters, and a serious loss of market share for the United States, during a period of significant growth in cheese exports overall. By contrast, U.S.exports of dry ingredient products rebounded very strongly last year, particularly during the second half of 2016. Butter exports showed a similar rebound, albeit from a very small base, driven mostly by a late-year spike in exports to Canada. During December 2016–February 2017, butter imports showed a slight upturn, while last year’s slow drop in cheese imports stepped up considerably. The rise in milk protein concentrate imports during the second half of 2016, together with a smaller increase in casein imports, coincides with the strong recovery of U.S. dry ingredient exports, which likely increased the net domestic demand for milk proteins.
Milk Production
Milk production in the United States during December 2016–February 2017 was 2.4 percent higher than during the same months a year earlier, adjusted for leap year.U.S.milk production has been expanding at this same rolling three-month rate since the fall of 2016.However, since then, the year-over-year growth rate of milking cow numbers has crept up, from 0.2 percent during the summer and fall of 2016 to 0.6 during the latest three months, while production per cow has shown an opposite, and offsetting trend. National milk production growth is not likely to exceed its current range, based on state-level trends. During the past several months, the rate of year-over-year growth of milk production in the 5 largest milk producing states has been dropping.It has increased in half of the 12 states in the next tier based on production volume,while production has been dropping in all but 6 of the smallest milk producing states. In it’s April outlook forecast, USDA lowered its projection of annual milk production growth in 2017, from 2.4 percent to 2.3 percent.
Dairy Products
Read the full NMPF April Dairy Market Report.
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