So far, 2023 has been marked by consistently solid inventories of most dairy products and a general softening in prices. The most recent dairy products report showed manufacturers’ stocks of human-grade nonfat dry milk (NFDM) at 300 million lbs. This is just about the monthly average on a YTD basis. However, these inventories have been in slow decline since reaching a peak in February.

It is quite normal for stocks to remain stable or build slightly in the first half of the calendar year. These first six months coincide with the annual flush and peak milk output. In fact, with a slightly higher herd in 2023 and better yield compared to last year, analysts had expected an improvement in stocks of NFDM. The fact that inventories have declined by 16 million lbs over the past four months is not alarming in and of itself, but the data could be signaling a change. With prices at or below $1.20 per lb throughout most of the first half of the year, inventory has been priced to move.

The full version of this commentary appeared on our IQ platform Jul. 12, 2023. Further information, statistics, and pricing for the dairy market are available to IQ subscribers. Learn more about becoming a subscriber.

Posted by: Information Services
Our Information Services team assists our clients with understanding commodity and ingredient market dynamics. Using our extensive database of intelligence, we also produce regular commodity and commercial market publications covering supply and demand fundamentals, news alerts on events that shape the markets, and resource guides to give you a complete picture of the industries we monitor.