Dairy Skim – October 2023 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 October 2023 US Cold Storage Report. Customers can view the snapshot report here. Subscribe so that you never miss an episode!

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[00:04] Betty: Hello everyone and welcome back to the Dairy Skim, HighGround Dairy’s bite-sized podcast intended to give the dairy industry some flavor into recent reports or events that can impact global commodity pricing. This is Betty Berning, Contributing Dairy Economist, joining you the day before Thanksgiving here in the US. The turkey is thawed here and awaiting its fate tomorrow afternoon. Right now, I’m ready to talk October Cold Storage, released by USDA this afternoon.

[00:34] Both cheese and butter stocks were neutral to HighGround’s expectations. Let’s talk cheese to start. Total cheese inventories of 1.465 billion pounds grew from October 2022 by 1.2%. American cheese inventories of 838 million pounds climbed 0.9% from the prior year, and followed the typical September to October decline, with levels falling 12.8 million pounds, very close to the five-year average drop of 10.5 million pounds. Other than American cheese had similar stats, as USDA reported 626 million pounds of product in warehouses, an increase of 1.5% relative to October 2022. Further, the monthly drawdown of six million pounds was in line with the typical 5.6 million pound decrease. Notably, USDA revised September’s initial print up by over 11 million pounds, with most of the change coming via the other than American cheese category, which was increased by 10.7 million pounds. Given where cheese prices are at, it’s not that surprising to see these numbers come in on-trend with the seasonal decreases, and to see some modest growth against 2022.

[01:55] Moving to the other big number, butter. What a crazy market again this fall. October stocks weighed in at 238 million pounds, the smallest number for the month since 2019, and down 0.6% from October 2022. Still, this number was neutral to expectations as we consider that butter hit record-high prices in October, trading at or above $3.19 per pound, every day. In the midst of the holiday buying season, stocks fell 28.4 million pounds from September to October. However, the five-year average between these two months is a 45 million pound decrease, so it appears buying was beginning to slow in October compared to other years. Still, since warehouses began emptying in June, nearly 130 million pounds of butter have moved out on strong domestic demand in 2023.

Watch your inbox for more analysis, and Happy Thanksgiving to all of you here in the states and thank you for supporting HighGround! Take care.

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