Dairy Market R
Dairy Management Inc.
Vol u m e 2 6 | No. 4
Overview
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April 2023
DMI | NMP F
Annual growth of total domestic use of milk in all dairy products turned positive during December–February, following several rolling three-month periods of falling
use when retail dairy price inflation was peaking. That trend is fading as the Consumer Prices Indices for most dairy products have begun to fall, rapidly lowering their year-over-year CPI changes. This resurgence in demand is coming at a challenging time for dairy margins. Milk production growth remains below 1 percent, and milk solids production growth was just two-tenths of a percent higher during the three-month period that ended in February. This, combined with the previous demand weakness, has sent wholesale dairy prices down considerably from their highs of last spring and summer. And that’s sent the Dairy Margin Coverage margin into the low $6/cwt territory, as feed costs have not followed milk prices down. Fewer than one in six of the monthly margins have been lower since 2020, when the current DMC feed cost formula began to use only premium alfalfa hay.
Commercial Use of Dairy Products Annual growth of total domestic use of milk in all dairy products turned modestly positive during December–February, following several rolling three-month periods of falling use during the peak of retail price inflation affecting dairy products. This was driven in part by growth in use of most major dairy product categories, other than fluid milk and butter.
U.S. Dairy Trade The pace of growth in U.S. butter, cheese and whey protein concentrate exports slowed during December–February.
Other key export categories, dry skim milk and dry whey maintained steady, though modest growth. The months around the turn of the calendar year are typically slower months for exports, and this year is no exception. However, the current turn-of-the-year slump was deeper a year ago, even as 2022 became the current record-holder for calendar year export volume and value. The pace of butter imports into the United States picked up again during this period, while milk protein concentrate and casein imports remained strong.
Domestic Commercial Use
Dec 2022–Feb 2023
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)
10,920 1,174 484 1,386 1,950 3,336 178 52,785 44,973 47,454
Dec 2021–Feb 2022
2022–2023 Change
Percent Change
-276 54 -16 44 23 67 7 262 250 269
-2.5% 4.8% -3.2% 3.3% 1.2% 2.1% 3.8% 0.5% 0.6% 0.6%
(million pounds)
11,196 1,120 500 1,342 1,927 3,268 172 52,522 44,722 47,185