Dairy Market R
Dairy Management Inc.
Vol u m e 2 4 | N o. 9
Overview
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September 2021
DMI | NMP F
Following more than a year of pandemic-related tumult, milk prices have settled into a more traditional alignment, with an improved balance of supply and demand
supporting higher prices. A series of positive, and growing, producer price differentials in federal orders has resulted from this return to normalcy. Still, markets have continued to move sideways, indicating that more confidence is needed that the balance is sustainable for prices to move higher. Milk production made additional progress during May–July in coming into alignment with commercial use of dairy products. Meanwhile, year-to-date exports maintained a record pace in terms of percent of U.S. milk solids production exported in July, further raising the chances that 2021 will set a new such record, despite ongoing difficulties affecting shipping products to foreign destinations.
Commercial Use of Dairy Products Fluid milk sales have reverted to more normal consumption patterns after unusual gyrations in 2020 that have accordingly made for wildly fluctuating year-over-year comparisons. Both American-type and other cheese are returning to more normal growth patterns following large spikes in April. Despite these distinct trajectories for individual products, domestic commercial use of milk in all products was essentially unchanged over a year ago during May–July.
U.S. Dairy Trade U.S. dairy exports set a new record in terms of percent of U.S. milk solids production during each month of the
May–July period this year. Together with near record exports during the first four months, this moves the industry further toward setting a new record for calendar year 2021, despite ongoing export shipping delays. January through July exports equaled 17.5 percent of milk solids production, while the previous record for a full calendar year was 16.0 percent set last year. Cheese was the only major category of dairy Imports that showed major growth during the May–July period, likely reflecting the recent removal of U.S. tariffs on certain cheeses from the European Union that were originally imposed in connection with a bilateral dispute on aircraft subsidies.
Domestic Commercial Use
May–Jul 2021
May–Jul 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)
10,501 1,169 486 1,366 1,919 3,285 143 55,438 45,128 48,254
11,143 1,143 492 1,330 1,917 3,248 230 54,953 45,283 48,199
2020–2021 Change
Percent Change
-642 26 -6 36 2 37 -87 486 -155 55
-5.8% 2.3% -1.2% 2.7% 0.1% 1.1% -37.8% 0.9% -0.3% 0.1%
(million pounds)