U.S. Dairy Commercial Disappearance Update – Mar ’21

Executive Summary

U.S. dairy commercial disappearance figures provided by the USDA were recently updated with values spanning through Jan ’21. Highlights from the updated report include:

• U.S. commercial disappearance for milk used in all products reached a record high seasonal level on a milk-fat basis throughout Jan ’21 and the second highest seasonal level on record on a skim-solids basis. Domestic demand increased 2.5% YOY on a milk-fat basis and 2.9% YOY on a skim-solids basis throughout the month.
• U.S. cheese commercial disappearance reached a record high seasonal level throughout Jan ’21 while butter commercial disappearance finished at the second highest seasonal level on record. Nonfat dry milk/skim milk powder commercial disappearance remained at a three year high seasonal level, however dry whey and whey protein concentrate commercial disappearance each finished lower on a YOY basis for the fourth 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 Remains Higher YOY 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 consecutive month throughout Jan ’21, finishing up 2.5% and reaching a record high seasonal level. Domestic demand increased 2.5% on a YOY basis throughout the month while export demand finished 3.1% higher YOY.

’19-’20 annual commercial disappearance for milk used in all products on a milk-fat basis increased 1.0% YOY, reaching a record high level. Domestic disappearance increased 1.1%, 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 0.8% on a YOY basis throughout the first third 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 eighth time in the past nine months throughout Jan ’21, finishing up 0.9% and reaching the second highest seasonal level on record. Domestic demand increased 2.9% on a YOY basis throughout the month, more than offsetting a 6.8% YOY decline in export demand.

’19-’20 annual commercial disappearance for milk used in all products on a skim-solids basis increased 1.7% YOY, reaching a record high level, despite domestic demand declining by 1.4%. ’20-’21 YTD commercial disappearance for milk used in all products on a skim-solids basis has increased by an additional 0.7% on a YOY basis throughout the first third of the production season.

Butter – Disappearance Reaches the Second Highest Seasonal Level on Record, Finishes up 12.0% YOY

U.S. butter commercial disappearance increased 12.0% on a YOY basis throughout Jan ’21, reaching the second highest seasonal level on record. Domestic butter demand increased 10.2% on a YOY basis throughout the month while export demand finished 81.9% 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 2.9% on a YOY basis throughout the first third of the production season.

U.S. butter production and import figures outpaced domestic use and export figures throughout Jan ’21, resulting in stocks rebounding seasonally to a four month high level. 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 Reaches a Record High Seasonal Level, Finishes up 3.3% YOY

U.S. cheese commercial disappearance increased 3.3% on a YOY basis throughout Jan ’21, reaching a record high seasonal level. The YOY increase in cheese commercial disappearance was the first experienced throughout the past four months. American cheese disappearance increased 12.7% on a YOY basis throughout the month, more than offsetting a 2.4% YOY decline in other-than-American cheese disappearance. Domestic cheese demand increased 4.0% on a YOY basis throughout the month, more than offsetting a 9.9% YOY decline in export demand.

’19-’20 annual cheese disappearance finished 0.1% below the record high level experienced throughout the previous production season. Domestic disappearance declined 0.2% but remained at the second highest annual figure on record. ’20-’21 YTD cheese disappearance has declined by an additional 1.2% on a YOY basis throughout the first third of the production season, despite the most recent increase.

U.S. cheese production and import figures outpaced domestic use and export figures for the third consecutive month throughout Jan ’21, resulting in stocks rebounding to a seven month high level.

Dry Whey – Disappearance Remains Lower for the Fourth Consecutive Month, Down 11.2% YOY

U.S. dry whey commercial disappearance declined 11.2% on a YOY basis throughout Jan ’21, finishing lower for the fourth consecutive month. Domestic dry whey demand declined 33.0% on a YOY basis throughout the month, more than offsetting a 34.4% YOY increase in export demand. Dry whey exports have finished higher on a YOY basis over 12 consecutive months through December while domestic demand has declined over ten 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 7.8% on a YOY basis throughout the first third of the production season, however.

U.S. dry whey production and import figures outpaced domestic use and export figures for the first time in the past five months throughout Jan ’21, resulting in stocks rebounding to a three month high level.

WPC – Disappearance Remains Lower for the Fourth Consecutive Month, Down 3.6% YOY

U.S. whey protein concentrate (WPC) commercial disappearance declined 3.6% on a YOY basis throughout Jan ’21, finishing lower for the fourth consecutive month. Domestic WPC demand declined 6.6% on a YOY basis throughout the month while export demand finished 0.4% lower YOY. The YOY decline in domestic WPC demand was the 16^th experienced throughout the past 17 months while the YOY decline in WPC export demand was the first experienced throughout the past seven 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 5.4% on a YOY basis throughout the first third of the production season.

U.S. WPC production and import figures outpaced domestic use and export figures throughout Jan ’21, resulting in stocks rebounding from the previous month.

NFDM/SMP – Disappearance Remains at a Three Year High Seasonal Level, Finishes up 17.3% YOY

U.S. nonfat dry milk (NFDM) and skim milk powder (SMP) commercial disappearance increased 17.3% on a YOY basis throughout Jan ’21, remaining at a three year high seasonal level. The YOY increase in NFDM/SMP commercial disappearance was the fifth experienced throughout the past six months. Domestic NFDM/SMP demand increased 152.9% on a YOY basis throughout the month, more than offsetting a 9.6% 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 4.6% on a YOY basis throughout the first third of the production season.

U.S. NFDM/SMP production and import figures outpaced domestic use and export figures for the fourth consecutive month throughout Jan ’21, resulting in stocks rebounding to a six month high level.

Jan ’21 increases in domestic commercial disappearance were led by NFDM/SMP, followed closely by cheese, while declines were most significant for dry whey. 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.