U.S. Dairy Cold Storage Update – Dec ’16
Executive Summary
U.S. cold storage figures provided by USDA were recently updated with values spanning through Nov ’16. Highlights from the updated report include:
According to USDA, Nov ’16 U.S. butter stocks of 160.9 million pounds declined 29.5% MOM seasonally but remained significantly higher on a YOY basis, finishing up 21.2% to a 23 year high for the month of November. Butter stocks have increased on a YOY basis over 20 consecutive months through November. The October – November seasonal decline in butter stocks of 67.3 million pounds was significantly larger than the ten year average October – November decline of 42.1 million pounds however the seasonal declines were fairly similar on a percentage basis. Butter stocks have declined by an average of 26.6% from October – November over the past ten years.
U.S. butter stocks typically reach their seasonal peak throughout the summer months, followed by seasonal drawdowns until lows are reached during the month of November. Butter stocks remain significantly higher on a YOY basis despite the current year seasonal drawdown in butter stocks of 172.0 million pounds finishing 15.5% above the previous three year average seasonal drawdown.
Cheese – Stocks Reach a 33 Year Seasonal High, Finish up 2.8% YOY
Nov ’16 U.S. cheese stocks of 1.18 billion pounds declined 3.5% MOM but remained 2.8% higher on a YOY basis, finishing at a 33 year seasonal high for the month of November. The monthly YOY increase in cheese stocks was the 25th experienced in a row however the MOM decline was larger than the typical seasonal October – November drawdown on a percentage basis. Cheese stocks have declined by an average of 1.0% from October – November over the past ten years. Cheese stocks have remained higher on a YOY basis in recent months as milk production has remained strong in Midwestern cheese producing states while weakness in cheese export markets has continued. Strong cheese production has been partially offset by continued strong domestic demand, however cheese exports remained weak through Nov ’16.
U.S. cheese stocks typically exhibit a smaller degree of MOM and YOY variation than U.S. butter stocks. Cheese stocks do not have as large of a seasonal build as butter stocks, with the five year average seasonal build in cheese stocks representing a 12.7% increase in stocks vs. a 121.1% increase in butter stocks. The reduced seasonality exhibited in U.S. cheese stocks has led to less volatile YOY variation, with cheese stocks having a five year average absolute YOY change of 5.3% compared to 26.3% for U.S. butter stocks.
- Nov ’16 U.S. butter stocks continued to decline seasonally but remained significantly higher on a YOY basis, finishing 21.2% above the previous year’s level and reaching a 23 year seasonal high.
- Nov ’16 U.S. cheese stocks also remained higher on a YOY basis, finishing up 2.8% to a 33 year seasonal high.
According to USDA, Nov ’16 U.S. butter stocks of 160.9 million pounds declined 29.5% MOM seasonally but remained significantly higher on a YOY basis, finishing up 21.2% to a 23 year high for the month of November. Butter stocks have increased on a YOY basis over 20 consecutive months through November. The October – November seasonal decline in butter stocks of 67.3 million pounds was significantly larger than the ten year average October – November decline of 42.1 million pounds however the seasonal declines were fairly similar on a percentage basis. Butter stocks have declined by an average of 26.6% from October – November over the past ten years.
U.S. butter stocks typically reach their seasonal peak throughout the summer months, followed by seasonal drawdowns until lows are reached during the month of November. Butter stocks remain significantly higher on a YOY basis despite the current year seasonal drawdown in butter stocks of 172.0 million pounds finishing 15.5% above the previous three year average seasonal drawdown.
Cheese – Stocks Reach a 33 Year Seasonal High, Finish up 2.8% YOY
Nov ’16 U.S. cheese stocks of 1.18 billion pounds declined 3.5% MOM but remained 2.8% higher on a YOY basis, finishing at a 33 year seasonal high for the month of November. The monthly YOY increase in cheese stocks was the 25th experienced in a row however the MOM decline was larger than the typical seasonal October – November drawdown on a percentage basis. Cheese stocks have declined by an average of 1.0% from October – November over the past ten years. Cheese stocks have remained higher on a YOY basis in recent months as milk production has remained strong in Midwestern cheese producing states while weakness in cheese export markets has continued. Strong cheese production has been partially offset by continued strong domestic demand, however cheese exports remained weak through Nov ’16.
U.S. cheese stocks typically exhibit a smaller degree of MOM and YOY variation than U.S. butter stocks. Cheese stocks do not have as large of a seasonal build as butter stocks, with the five year average seasonal build in cheese stocks representing a 12.7% increase in stocks vs. a 121.1% increase in butter stocks. The reduced seasonality exhibited in U.S. cheese stocks has led to less volatile YOY variation, with cheese stocks having a five year average absolute YOY change of 5.3% compared to 26.3% for U.S. butter stocks.