Dairy Market R
Dairy Management Inc.
Vol u m e 2 6 | No. 6
Overview
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June 2023
DMI | NMP F
Bright spots in the dairy outlook are harder to find than usual at the moment. As in 2015–2019, butter is acting as the pole holding up the dairy price tent, having
found a firm floor at around $2.40/lb, as certified by the current futures. This is happening in spite of what could be described as a case of raging inflation, which peaked at a 31.4 percent annual rate last November, but is now down to just 3.1 percent in May. Most dairy products are unwinding from their peak inflation rates of 2022, although that trend is not yet translating into correspondingly strong wholesale prices; even so, domestic commercial use of milk in all dairy products is recovering from last year’s inflation, and growing by more than 2 percent by all milk equivalent measures. Butter and American-type cheese domestic use is growing again, by at least as much as their production is up.
Commercial Use of Dairy Products
U.S. Dairy Trade
Fluid sales took a large drop in April, bringing down their February–April annual change to -3.5 percent. Domestic yogurt use has turned up this year after spending most of last year below the pandemic-boosted sales of the year before. Domestic butter use was almost 13 percent higher than a year earlier during February–April, after it also spent much of 2022 down year-over-year. U.S. consumption of other than American-type cheese was flat during this period, reflecting stagnant food service use by inflation-stressed consumers. Aggregate use of milk in all dairy products was up more than 2 percent from a year earlier by all milk equivalent measures.
Weakness in 2023 U.S. dairy exports has extended beyond the usual first month or two, with February–April exports down year-over-year for most of the major product categories. Annual declines were well into the double-digit percentages for American-type cheese and fat-based products. Butter and casein imports were up significantly from a year ago during the period, but were down for milk protein concentrate and flat for cheese.
Milk Production The current period of increasing milk production continues to be anemic by various measures, relative to historic experience. continued on page 2
Domestic Commercial Use
Feb–Apr 2023
Feb–Apr 2022
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)
10,529 1,235 536 1,370 1,942 3,312 196 53,796 44,675 47,551
10,907 1,184 475 1,336 1,941 3,277 162 52,082 43,705 46,324
2022–2023 Change
Percent Change
-378 50 61 34 1 35 34 1,714 970 1,227
-3.5% 4.3% 12.8% 2.5% 0.1% 1.1% 20.8% 3.3% 2.2% 2.6%
(million pounds)