Dairy Market R
Dairy Management Inc.
Vol u m e 2 5 | N o. 7
Overview
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July 2022
D MI | NMP F
Both dairy supply and demand are being driven by unusual factors in mid-2022, with little immediate respite in sight. Severe cost inflation and limited availability
are affecting virtually all inputs necessary to produce milk, keeping a tight lid on milk production growth and thereby generating record-high milk prices. Sustained tight production is spreading high milk and dairy product prices to retailers; that, in turn, is starting to soften domestic consumption and thus ease wholesale prices. U.S. dairy exports, meanwhile, are now on track to potentially reach record volume this year after a slow start during January and February. In May, a new monthly record was set with 19.4 percent of U.S. milk solids production shipped to foreign markets.
Commercial Use of Dairy Products
U.S. Dairy Trade
Total domestic dairy product use has been down from a year earlier in recent months, most likely reacting to increasing inflation that’s steadily pushed up prices for food and many other items for the past year. Contributing to this have been yogurt and American-type cheese, while fluid milk has continued its longer-term decline. Because retail prices have only recently begun to spike for dairy products, it’s too early to gauge the probable longer-term impact that inflation may have on dairy demand; retail price inflation is relatively uncommon for dairy products, leaving little historical data on which to base reliable predictions.
Monthly U.S. dairy exports as a percent of U.S. milk solids production established a new record of 19.4 percent in May, the first time monthly exports have exceeded 19 percent by this measure. Despite a slow start during the first two months, exports are now on track to potentially establish a new annual record this year. January through May exports totalled 17.3 percent of solids production during those months, which matches 2021’s calendar-year record. Tight world market conditions are holding U.S. dairy imports to relatively modest increases compared with year-earlier volumes, despite near-record price levels in the U.S. market.
Domestic Commercial Use
Mar–May 2022
Mar–May 2021
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)
11,007 1,215 500 1,332 1,987 3,319 144 54,305 44,842 47,782
11,280 1,253 505 1,391 1,923 3,314 197 55,113 45,756 48,635
2021–2022 Change
Percent Change
(million pounds)
-273 -37 -4 -59 64 5 -52 -809 -915 -852
-2.4% -3.0% -0.9% -4.2% 3.3% 0.2% -26.6% -1.5% -2.0% -1.8%