Dairy Skim – November 2024 US Cold Storage Report

Dairy Skim is a bite-size episode series where HighGround’s top analysts break down the latest dairy data release. Today, Betty Berning discusses the November 2024 US Cold Storage Report. Customers can view the snapshot report here. Subscribe so that you never miss an episode!

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Transcript:

(0:14) Betty Berning:
Hello, and welcome back to the Dairy Skim. This is Betty Burning, HighGround’s Contributing Dairy Economist. We are just two days away from Christmas, and with three elementary-aged boys living at my house, we have been counting down the days, and excitement is definitely building here ahead of the holiday. But there is still data to be analyzed, and USDA dropped one more report ahead of the holiday, November’s Cold Storage. Let’s jump in. Butter was bullish to our expectations, and cheese was neutral.

(0:55)
A huge amount of butter was drawn out of inventories from October to November. Total stocks of 214 million pounds fell 54.2 million pounds month-on-month, and now they sit at just 1 million pounds more than prior year. This comes after tracking well above 2023 levels from June to October. October to November’s decrease is the largest between these two months since 2021. While we won’t know the full story on why stocks declined so much, we do know that California’s milk production was way off in November due to avian influenza. The state makes about one-third of the nation’s butter supply, and with that big loss in November’s milk volumes, it does seem likely that avian influenza in the state may have caused some of the massive decline.

(1:50)
Total cheese stocks were not nearly as exciting as butter. Warehouses held 1.335 billion pounds of cheese in November. The year-on-year decreases persisted, tracking near 7 percent, as they have for the past four months. Month-to-month levels shrunk by 13 million pounds, which is right near the five-year average. Still, inventories are the lowest for the month since 2020.

(2:16)
Breaking the category apart, natural American cheese stores summed to 767 million pounds, marking the eighth month in a row of a year-over-year decrease. From October to November, natural American cheese stocks declined by nearly 8 million pounds, which was more severe than the five-year mean. Other than American cheese, inventories have fallen year-on-year for the past 13 months, and November’s total of 568 million pounds was the smallest for the category since January 2019. This highlights how much levels have fallen in the other-than-American-cheese category. These varieties are typically the ones that are exported, and export demand in 2024 has been decent, which helps to explain and is part of the reason for the multi-year low inventory numbers. As far as revisions, other-than-American cheese in October was raised 3.4 million pounds, or 0.6% of the actual, which was the most significant revision we saw in today’s report.

I will be analyzing the data more this afternoon, and our detailed analysis will be out tomorrow morning. The team at HighGround wishes everyone Merry Christmas and Happy Hanukkah. We hope you enjoy your holidays with your loved ones. We are so grateful to our customers, and if there is anything we can help you with, please reach out to us at info@highgrounddairy.com. As a reminder, markets close at 12pm CST tomorrow and are closed through Christmas Day. Merry Christmas to all of you, and cheers!