Let’s Chat Dairy – 27 December 2024

Let’s Chat Dairy is a weekly podcast, hosted by HighGround Dairy’s top analysts. At the end of every week, they sit down to recap the week in dairy markets and summarize recent reports and relevant news. The podcast can be found here on our dashboard, or wherever you listen to your podcasts. Subscribe so that you never miss an episode!

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Transcript:

(0:14) Alyssa Badger:
Hello everyone and welcome back to Let’s Chat Dairy, your favorite weekly market podcast powered by HighGround Dairy. Today’s Friday, December 27th, and you’re joined by me, Alyssa Badger. It was an incredibly quiet week given all the holiday celebrations, so this will be pretty short and sweet.

(0:33)
Let’s kick things off with the CME Spot market recap. Spot market only traded four times this week due to the US market being closed for Christmas. Barrels dropped on Monday continuing their losses from the week prior, and on Christmas Eve fell an additional $0.0125 per pound. On Boxing Day, the market remained at a $1.74 per pound. Into today, the market received a very small boost with the week averaging out at a $1.75 per pound. Just eight loads of cheddar barrels traded this week, with five of them taking place today. Blocks saw a slight increase on the week, averaging $1.8613 per pound on a total of six trades. Butter saw a slight price increase this week as well, as the commodity saw the highest amount of trades of the spot market this week on 12 loads trading hands. Nonfat was quiet but did eke out gains from the prior week on 10 trades taking place. Lastly, dry whey sat at $0.74 per pound for most of the week, but caught an extra cent into today, reaching $0.75 per pound. This brought the weekly average to $0.7425 per pound. We will also have a holiday interruption next week on the 1st of January, so I expect things to remain quiet for now.

(1:48)
Before Christmas, the market did receive the November US Cold Storage Report, which we already did a podcast episode about, but to recap, butter was bullish and cheese was neutral. A huge amount of butter was drawn out of inventories from October to November. In fact, it was the largest between the two months since 2021. California makes about one-third of the nation’s butter supply, and with the big loss in milk production there in November, this likely caused some of the massive declines. Total cheese stocks were not nearly as exciting though, with warehouses holding 1.335 billion pounds of cheese. Still, inventories are the lowest for the month since 2020.

(2:29)
The National Dairy Product Sales Report came out Thursday, a day late, and things were pretty much as expected. Of note though, nonfat dry milk is at the highest levels since January 2023, and dry whey now the highest since May of 2022. Committed dry whey sales have been particularly notable in December, with sales reaching 20.3 million pounds so far this month, the most for the first three weeks of December since 2017.

(2:58)
US Weekly Dairy Cow Slaughter figures are in line with expectations, while Upper Midwest Class III Spot Basis is also following seasonal trends lower. Cream Multiples were well above prior year across the West and Northeast, and they did not drop off significantly into the end of the year as they have in the past. Even though Upper Midwest Cream Multiples were well above prior year, despite falling slightly from the week prior. All these details can of course be found on our website under the Thursday USDA Data Releases segment.

(3:29)
International markets were also very quiet as we covered China and New Zealand trade as well as milk production on last week’s episode. Next week though, we will be releasing our Asia Trade Flow Analysis, with some interesting numbers coming out of Japan and South Korea so far. Japan’s import volumes leaned a bit more positive than South Korea’s though, as November cheese imports into South Korea fell 50% from prior year. Japan though reported very strong skim milk powder imports during November, as well as butter and whey. The Philippines import volumes, though only out through September in recent days, were also very strong on milk powders, whey, and cheese. Lastly of note was a solid gain in Indonesia’s October imports on skim milk powder, whey, and lactose. Again, be on the lookout for that report early next week.

(4:22)
Before we end the episode, just a quick note on the European Union. Only France and the Netherlands released indices this week, while Germany did not. Dutch whole milk powder, skim milk powder, and butter moved slightly lower in US dollar terms, while French milk powders saw gains. A few things on the radar otherwise in the region is the fact that Eastern Europe is suffering from drought. Russia launched a series of missile and drone strikes on Christmas Day, continuing to target Ukraine’s power grid. And lastly, President-elect Trump has suggested that the European Union should address its trade deficit with the US by purchasing more US oil and gas. He indicated that failure to do so could result in the imposition of tariffs on European imports, potentially impacting transatlantic trade relations.

Well, that’s it for this episode. As we wrap up the year, I want to take a moment to thank all of you, our listeners and our customers, for your continued support and engagement. It’s been an incredible journey, and we’re excited for what’s ahead. Wishing you all a happy, healthy, and prosperous new year. See you in 2025. Cheers.