Executive Summary

U.S. dairy commercial disappearance figures provided by the USDA were recently updated with values spanning through Dec ’20. Highlights from the updated report include:

• U.S. commercial disappearance for milk used in all products reached record high seasonal levels on both a milk-fat and skim-solids basis throughout Dec ’20. Domestic demand increased 0.5% YOY on a milk-fat basis and 0.8% YOY on a skim-solids basis throughout the month.
• U.S. butter commercial disappearance reached a record high seasonal level throughout Dec ’20 while nonfat dry milk/skim milk powder commercial disappearance reached a three year high seasonal level. Cheese commercial disappearance declined to a four year low seasonal level, however, while dry whey and whey protein concentrate commercial disappearance each remained lower on a YOY basis for the third consecutive month.
• U.S. fluid milk sales finished higher on a YOY basis for the first time in the past five months during Dec ’20, increasing by 1.5% but remaining at the second lowest seasonal level on record.

Additional Report Details

All Milk – Disappearance Reaches Record Seasonal Highs on Both a Milk-Fat and Skim-Solids Basis

According to the USDA, U.S. commercial disappearance for milk used in all products on a milk-fat basis increased YOY for the third time in the past four months during Dec ’20, finishing up 0.9% and reaching a record high seasonal level. Domestic demand increased 0.5% on a YOY basis throughout the month while export demand finished 10.0% higher YOY.

’19-’20 annual commercial disappearance for milk used in all products on a milk-fat basis increased 0.9% YOY, reaching a record high level. Domestic disappearance increased 1.0%, also reaching the highest annual figure on record. ’20-’21 YTD commercial disappearance for milk used in all products on a milk-fat basis has increased by an additional 0.4% on a YOY basis throughout the first quarter of the production season.

U.S. commercial disappearance for milk used in all products on a skim-solids basis increased on a YOY basis for the seventh time in the past eight months during Dec ’20, finishing up 0.1% and reaching a record high seasonal level. Domestic demand increased 0.8% on a YOY basis throughout the month, more than offsetting a 2.8% YOY decline in export demand.

’19-’20 annual commercial disappearance for milk used in all products on a skim-solids basis increased 1.6% YOY, reaching a record high level, despite domestic demand declining by 1.5%. ’20-’21 YTD commercial disappearance for milk used in all products on a skim-solids basis has increased by an additional 0.8% on a YOY basis throughout the first quarter of the production season.

Butter – Disappearance Reaches a Record High Seasonal Level, Finishes up 5.2% YOY

U.S. butter commercial disappearance increased 5.2% on a YOY basis during Dec ’20, reaching a record high seasonal level. Domestic butter demand increased 3.0% on a YOY basis throughout the month while export demand finished 164.8% higher YOY.

’19-’20 annual butter disappearance finished 2.4% higher YOY, reaching a record high level. Domestic disappearance increased 2.5%, also reaching the highest annual figure on record. ’20-’21 YTD butter disappearance has increased by an additional 0.7% on a YOY basis throughout the first quarter of the production season.

U.S. butter production and import figures outpaced domestic use and export figures during Dec ’20, resulting in stocks rebounding slightly from the ten month low level experienced throughout the previous month. Butter stocks typically reach seasonal low levels throughout the month of November, prior to increasing seasonally throughout the month of December and the first half of the calendar year.

Cheese – Disappearance Declines to a Four Year Low Seasonal Level, Finishes Down 3.6% YOY

Dec ’20 U.S. cheese commercial disappearance declined 3.6% on a YOY basis throughout Dec ’20, finishing at a four year low seasonal level. The YOY decline in cheese commercial disappearance was the third experienced in a row and the largest experienced throughout the past eight months on a percentage basis. American cheese disappearance declined 5.2% on a YOY basis throughout the month while other-than-American cheese finished 2.6% lower YOY. Domestic cheese demand declined 3.8% on a YOY basis throughout the month while export demand finished 1.0% lower.

’19-’20 annual cheese disappearance finished 0.1% below the record high level experienced throughout the previous production season. Domestic disappearance declined 0.3% but remained at the second highest annual figure on record. ’20-’21 YTD cheese disappearance has declined by an additional 2.6% on a YOY basis throughout the first quarter of the production season.

U.S. cheese production and import figures outpaced domestic use and export figures for the second consecutive month during Dec ’20, resulting in stocks rebounding to a six month high level.

Dry Whey – Disappearance Remains Lower for the Third Consecutive Month, Finishes Down 5.0% YOY

U.S. dry whey commercial disappearance declined 5.0% on a YOY basis during Dec ’20, finishing lower for the third consecutive month. Domestic dry whey demand declined 24.3% on a YOY basis throughout the month, more than offsetting a 36.6% YOY increase in export demand. Dry whey exports have finished higher on a YOY basis over 11 consecutive months through December while domestic demand has declined over nine consecutive months.

’19-’20 annual dry whey disappearance increased 2.7% on a YOY basis from the four year low level experienced throughout the previous production season, despite domestic demand declining by 5.4%. ’20-’21 YTD dry whey disappearance has declined by 6.8% on a YOY basis throughout the first quarter of the production season, however.

U.S. dry whey domestic use and export figures outpaced production and import figures for the fourth consecutive month during Dec ’20, resulting in stocks declining to an 11 month low level.

WPC – Disappearance Remains Lower for the Third Consecutive Month, Finishes Down 1.4% YOY

U.S. whey protein concentrate (WPC) commercial disappearance declined 1.4% on a YOY basis throughout Dec ’20, finishing lower for the third consecutive month. Domestic WPC demand declined 28.7% on a YOY basis throughout the month, more than offsetting a 28.1% YOY increase in export demand. WPC exports have finished higher on a YOY basis over 13 of the past 15 months through December while domestic demand has declined over 15 of the past 16 months.

’19-’20 annual WPC disappearance declined 4.3% on a YOY basis, reaching a seven year low level. Domestic demand declined 24.0%, reaching an eight year low level. ’20-’21 YTD WPC disappearance has declined by an additional 6.0% on a YOY basis throughout the first quarter of the production season.

U.S. WPC domestic use and export figures outpaced production and import figures for the fourth time in the past five months during Dec ’20, resulting in stocks declining to a 16 month low level.

NFDM/SMP – Disappearance Reaches a Three Year High Seasonal Level, Finishes up 1.5% YOY

Dec ’20 U.S. nonfat dry milk (NFDM) and skim milk powder (SMP) commercial disappearance increased 1.5% on a YOY basis, reaching a three year high seasonal level. The YOY increase in NFDM/SMP commercial disappearance was the fourth experienced throughout the past five months. Domestic NFDM/SMP demand increased 44.9% on a YOY basis throughout the month, more than offsetting a 14.7% YOY decline in export demand.

’19-’20 annual NFDM/SMP disappearance increased 5.3% on a YOY basis, reaching a record high level. Domestic demand declined 25.4%, however, reaching a 20 year low level. ’20-’21 YTD NFDM/SMP disappearance has increased by an additional 0.4% on a YOY basis throughout the first quarter of the production season.

U.S. NFDM/SMP production and import figures outpaced domestic use and export figures for the third consecutive month during Dec ’20, resulting in stocks rebounding to a five month high level.

Dec ’20 increases in domestic commercial disappearance were led by NFDM/SMP while declines were most significant for cheese. International commercial disappearance increased most significantly on a YOY basis for dry whey, while NFDM/SMP export demand finished most significantly lower.

Fluid Milk – Total Milk Sales Increase on a YOY Basis for the First Time in Five Months, Finish up 1.5%

U.S. fluid milk sales finished higher on a YOY basis for the first time in the past five months during Dec ’20, increasing by 1.5% but remaining at the second lowest seasonal level on record. Sales of whole milk finished 1.4% higher on a YOY basis throughout the month however sales of fat-free milk remained weak, declining by 10.7% on a YOY basis and reaching the lowest seasonal level on record.

’19-’20 annual total fluid milk sales declined to a record low level for the tenth consecutive year, finishing down 0.6%, as whole milk sales increased to a 13 year high but fat-free milk sales declined to the lowest figure on record, down over 60% from levels experienced ten years ago. ’20-’21 YTD fluid milk sales have declined by an additional 1.6% on a YOY basis throughout the first quarter of the production season.

Fat consumed within U.S. fluid milk also finished higher on a YOY basis for the first time in the past five months during Dec ’20, finishing up 0.3% but remaining at the second lowest seasonal level experienced throughout the past seven years. ’19-’20 annual total fat consumed within fluid milk rebounded 0.1% from the four year low level experienced throughout the previous production season but remained 0.4% below three year average annual figures. ’20-’21 YTD fat consumed within fluid milk has declined by 2.2% on a YOY basis throughout the first quarter of the production season.