With the U.S. now at peak flush, dairy operations are in full swing as processing plants cope with the abundant milk supply across the country. With higher cow numbers in the national herd and YOY yield, there is approximately 1 percent more milk around this year compared to 2022. Domestic disappearance has not changed dramatically, and imports of offshore dairy products have outpaced last year. All that said, there have been ample milk supplies to bolster inventories of milk products and generally keep prices in check.
This year’s March inventory is the second highest March inventory in the past decade and a half. Despite the abundant supply of NFDM hanging over the market, brokers were bidding up the NFDM futures this past week on CME.
Meanwhile, butter inventories as reported in the latest month’s cold storage report surprised the market with a drop in stocks month on month.
Despite the small drop, we still have 3.5 percent more butter in cold storage this year vs. 2022, with at least another three months for the country to put product into warehouses to meet higher demand later this year.
The full version of this commentary appeared on our IQ platform May 5, 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.