Big Butter Volumes: A whopping 69 loads of butter traded in the CME spot market last week, the highest weekly total since August 2023. The market fell under $3.10/lb. on Friday, the lowest mark since mid-June. It is possible that demand is slowing and more product is becoming available. With the hot weather in California, where a sizable amount of US butter is produced, it seems unlikely to be supply-driven.
Subdued CME Cheddar Blocks: Cheddar markets, particularly blocks, were quieter in terms of price action last week. Blocks fluctuated in a very narrow range ($1.86-1.8650) over the week, with prices falling below Cheddar barrels. Cheddar barrels had a little more life, up $0.025/lb. from Monday to Wednesday, before stagnating at $1.9125/lb. on Thurs and Fri. While cheese prices seem supported in the $1.80s, the significant international demand that drove prices up earlier this year has likely subsided as US prices have risen and are no longer at a steep discount to the rest of the world.
Global Dairy Trade Ekes Out an Increase: Last Tuesday’s auction saw the overall GDT index rise 0.4% after two consecutive events of a decline. Higher fat and cheese prices drove the increase; however, the rise in butter and anhydrous milk fat prices was driven by near-term buying, i.e. someone needed product right away. Whole milk powder and skim milk powder, which comprise most of the auction volume, dropped on weak demand from North Asia (China), as the country becomes more self-sufficient in dairy, resulting in subdued buying.
Domestic Disappearance (Mostly) Up in May: USDA printed May’s Supply & Utilization this past Monday, July 15, although an issue with “Other than American” cheese data resulted in a revision that was published on Thursday, July 18, a rare occurrence. That said, domestic demand across all categories, except whey protein concentrate (WPC) and American cheese, was up year-over-year. Butter domestic usage climbed 18.2% versus May 2023, up by 11.4% from April, as 88.2 million pounds of product were used domestically.
Total cheese demand stateside was solid, too, making a gain of 0.5% compared to the prior May, as “Other than American” varieties carried the day (+3.5% YoY). When looking at the total cheese disappearance, the strong exports remained a factor in May. Both American (+44% YoY) and “Other than American” (+48% YoY) categories were up on a year-on-year basis. “Other than American” logged the fifth consecutive month of double-digit increases on the big demand for grated and fresh cheese, likely Mozzarella, abroad.
Last Week’s Reports & Analysis
Comprehensive Global Dairy Trade Analysis
Global Dairy Trade (GDT) event 360 almost followed expectations, with a somewhat unsurprising blip higher for both milkfat products as near-term desperation for product continues to drive prices higher, although still very skewed as a result of this buying habit…Full Report
May 2024 US Dairy Supply and Utilization
Total cheese consumption was up for the third consecutive month. While exports have been up every month in 2024, domestic demand is the bigger prize, and every month…Full Report
Reports/Events This Week
- June ’24 New Zealand Milk Collections & Export Volumes – Monday, July 22
- Crop Progress Report – Monday, July 22
- GDT Pulse Auction – Tuesday, July 23
- June ’24 US Milk Production Report – Tuesday, July 23
- Weekly EU Dairy Commodity Prices – Wednesday, July 24
- National Dairy Products Sales Report (NDPSR) – Wednesday, July 24
- USDA Dairy Market News Weekly Midpoint Prices – Thursday, July 25
- USDA Upper Midwest Spot Milk Basis – Thursday, July 25
- USDA Weekly Dairy Cow Slaughter Report – Thursday, July 25
- June ’24 US Cold Storage Report – Thursday, July 25
- June ’24 US Monthly Livestock Slaughter Report – Thursday, July 25
- Pre-GDT Pulse Fonterra Offer Volume Forecast – Thursday, July 25