U.S. Dairy Cold Storage Update – Feb ’17
Executive Summary
U.S. cold storage figures provided by USDA were recently updated with values spanning through Jan ’17. Highlights from the updated report include:
According to USDA, Jan ’17 U.S. butter stocks of 223.1 million pounds increased 34.3% MOM seasonally while also remaining significantly higher on a YOY basis, finishing up 16.1% to a 23 year high for the month of January. The MOM seasonal increase in butter stocks of 34.3% was fairly consistent with the ten year average December – January seasonal increase of 36.7%, however on an absolute basis, the MOM build of 57.0 million pounds was significantly greater than the ten year average seasonal build of 43.3 million pounds. Dec ’16 butter stock figures were revised 5.1% lower than previously stated, contributing to the significant MOM build. Butter stocks have increased on a YOY basis over 22consecutive months through January, however the Jan ’17 YOY increase was the second lowest experienced over the period.
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 most recent 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 Record Seasonal High, Finish up 4.6% YOY
Jan ’17 U.S. cheese stocks of 1.23 billion pounds increased 2.9% MOM while also remained 4.6% higher on a YOY basis, finishing at a record seasonal high for the month of January. The monthly YOY increase in cheese stocks was the 27th experienced in a row however the MOM increase was larger than the typical seasonal build on a percentage basis. Cheese stocks have increased by an average of 1.0% from December – January 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. Strong cheese production has been partially offset by continued strong domestic demand and rebounding cheese export volumes, however. Cheese export volumes have finished higher on a YOY basis over three consecutive months through December.
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.
- Jan ’17 U.S. butter stocks remained significantly higher on a YOY basis, finishing 16.1% above the previous year’s level and reaching a 23 year seasonal high. The YOY increase in butter stocks was the second lowest experienced throughout the past 22 months, however.
- Jan ’17 U.S. cheese stocks also remained higher on a YOY basis, finishing up 4.6% to a record seasonal high level. U.S. cheese stocks have increased on a YOY basis over the past 27 months through January.
According to USDA, Jan ’17 U.S. butter stocks of 223.1 million pounds increased 34.3% MOM seasonally while also remaining significantly higher on a YOY basis, finishing up 16.1% to a 23 year high for the month of January. The MOM seasonal increase in butter stocks of 34.3% was fairly consistent with the ten year average December – January seasonal increase of 36.7%, however on an absolute basis, the MOM build of 57.0 million pounds was significantly greater than the ten year average seasonal build of 43.3 million pounds. Dec ’16 butter stock figures were revised 5.1% lower than previously stated, contributing to the significant MOM build. Butter stocks have increased on a YOY basis over 22consecutive months through January, however the Jan ’17 YOY increase was the second lowest experienced over the period.
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 most recent 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 Record Seasonal High, Finish up 4.6% YOY
Jan ’17 U.S. cheese stocks of 1.23 billion pounds increased 2.9% MOM while also remained 4.6% higher on a YOY basis, finishing at a record seasonal high for the month of January. The monthly YOY increase in cheese stocks was the 27th experienced in a row however the MOM increase was larger than the typical seasonal build on a percentage basis. Cheese stocks have increased by an average of 1.0% from December – January 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. Strong cheese production has been partially offset by continued strong domestic demand and rebounding cheese export volumes, however. Cheese export volumes have finished higher on a YOY basis over three consecutive months through December.
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.