CME Spot Dry Whey Price Falls to Lowest Level Since September 2020; Spot NFDM Craters to Levels Not Seen Since August 2021
It is a rare occurrence when CME spot dry whey volume eclipses the other commodities in a given week, but that is exactly what happened with 25 loads exchanging hands. Industry chatter suggests that a large manufacturer is aggressively selling loads and the product is close to the 120 day CME age limit. With higher concentrate whey protein products also seeing swift declines, manufacturers need to get the spread between products in line so as not to overpay for the milk.
CME spot nonfat dry milk prices have also fallen sharply, nearly 6% (or DOWN $0.08 per pound) since the beginning of the year as both manufacturers and traders try to find a level that spurs end-user buying. While the US Dollar has also materially weakened in recent weeks which tends to bring more foreign buyers of US product, European sellers are having an extremely hard time finding homes for numerous dairy commodities, both internally as well as via export channels. The GDT auction (taking place today) will provide more direction as to Asian market sentiment and support levels are close or if prices need to erode more.
Last, CME spot cheese has also participated in recent volatility and has been a seesaw of a market over the past few weeks. After reaching a $2.1975/lb high on Jan 9th, block Cheddar fell sharply during the last two sessions of last week to $2.00/lb, and may have the potential to fall further. With the block/barrel spread still hovering near $0.30/lb, expectations are for that gap to consolidate in the coming weeks as the industry rebalances after the AMPI Portage plant fire.
China’s Population Drops For First Time in 60 Years
China’s population declined in 2022, the National Bureau of Statistics said Tuesday. Mainland China’s population, excluding foreigners, fell by 850,000 people in 2022 to 1.41 billion, the statistics bureau said. Analysts said the decline was the first since 1961 during the great famine triggered by former leader Mao Zedong’s Great Leap Forward. The birth rate also fell to a record low of 6.77 births per 1,000, down from 7.52 a year earlier and the lowest level since the founding of Communist China in 1949. Some 9.56 million babies were born, compared with 10.62 million in 2021 – despite a push from the government to encourage more married couples to have children. The share of the population ages 16 to 59 ticked lower to 62%, down from 62.5% a year earlier.
The new data came alongside the announcement of one of China’s worst annual economic performances in nearly half a century, with the economy expanding by just 3% for the year – far below the government’s target – underscoring the steep economic challenges the country faces as its labor force shrinks and its retired demographic grows. It also follows a UN prediction last year that India will surpass China to become the world’s most populous country in 2023. Separately over the weekend, Chinese health authorities disclosed nearly 60,000 COVID-related deaths in Chinese hospitals between Dec. 8, 2022, and Jan. 12, 2023. The majority were senior citizens, and the average age of death was 80.3 years, authorities said. Sources: CNN and CNBC
Last Week’s Reports & Analysis
November 2022 Dairy Products Report Analysis After falling behind prior year August through October 2022, butter production saw an impressive return to growth, up nearly 9% (+13.9 million pounds) vs Nov 2021, which was the strongest YoY percentage increase since December 2020. The real story in the NFDM/SMP market is the lack of export interest… Full Report
Weekly EU Dairy Commodity Prices Cheese prices continue to consolidate with the EEX gouda and mozzarella indices falling to the lowest levels reported since they were released in November 2021. The cheddar curd value is the lowest since December 2021 while the mild cheddar value dropped to… Full Report
Reports This Week
GDT Auction – Tuesday, January 17
HighGround Dairy’s Monthly Forecast Report – Tuesday, January 17
November 2022 US Dairy Supply and Utilization – January 17
November 2022 EU Milk Production – January 17/18 (Still waiting on data from Spain, Greece & Bulgaria)
Weekly EU Dairy Commodity Prices – Wednesday, January 18
HighGround Dairy’s Forecast Webinar (Sign Up Here) – Wednesday, January 18
National Dairy Products Sales Report (NDPSR) – Thursday, January 18
USDA Dairy Market News Midpoint Prices – Thursday, January 18
USDA Weekly Dairy Cow Slaughter – Thursday, January 18
CME Spot Dry Whey Price Falls to Lowest Level Since September 2020; Spot NFDM Craters to Levels Not Seen Since August 2021
It is a rare occurrence when CME spot dry whey volume eclipses the other commodities in a given week, but that is exactly what happened with 25 loads exchanging hands. Industry chatter suggests that a large manufacturer is aggressively selling loads and the product is close to the 120 day CME age limit. With higher concentrate whey protein products also seeing swift declines, manufacturers need to get the spread between products in line so as not to overpay for the milk.
CME spot nonfat dry milk prices have also fallen sharply, nearly 6% (or DOWN $0.08 per pound) since the beginning of the year as both manufacturers and traders try to find a level that spurs end-user buying. While the US Dollar has also materially weakened in recent weeks which tends to bring more foreign buyers of US product, European sellers are having an extremely hard time finding homes for numerous dairy commodities, both internally as well as via export channels. The GDT auction (taking place today) will provide more direction as to Asian market sentiment and support levels are close or if prices need to erode more.
Last, CME spot cheese has also participated in recent volatility and has been a seesaw of a market over the past few weeks. After reaching a $2.1975/lb high on Jan 9th, block Cheddar fell sharply during the last two sessions of last week to $2.00/lb, and may have the potential to fall further. With the block/barrel spread still hovering near $0.30/lb, expectations are for that gap to consolidate in the coming weeks as the industry rebalances after the AMPI Portage plant fire.
China’s Population Drops For First Time in 60 Years
China’s population declined in 2022, the National Bureau of Statistics said Tuesday. Mainland China’s population, excluding foreigners, fell by 850,000 people in 2022 to 1.41 billion, the statistics bureau said. Analysts said the decline was the first since 1961 during the great famine triggered by former leader Mao Zedong’s Great Leap Forward. The birth rate also fell to a record low of 6.77 births per 1,000, down from 7.52 a year earlier and the lowest level since the founding of Communist China in 1949. Some 9.56 million babies were born, compared with 10.62 million in 2021 – despite a push from the government to encourage more married couples to have children. The share of the population ages 16 to 59 ticked lower to 62%, down from 62.5% a year earlier.
The new data came alongside the announcement of one of China’s worst annual economic performances in nearly half a century, with the economy expanding by just 3% for the year – far below the government’s target – underscoring the steep economic challenges the country faces as its labor force shrinks and its retired demographic grows. It also follows a UN prediction last year that India will surpass China to become the world’s most populous country in 2023. Separately over the weekend, Chinese health authorities disclosed nearly 60,000 COVID-related deaths in Chinese hospitals between Dec. 8, 2022, and Jan. 12, 2023. The majority were senior citizens, and the average age of death was 80.3 years, authorities said. Sources: CNN and CNBC