U.S. Dairy Cold Storage Update – Jan ’18
Executive Summary
U.S. cold storage figures provided by USDA were recently updated with values spanning through Dec ’17. Highlights from the updated report include:
According to USDA, Dec ’17 U.S. butter stocks increased 6.5% MOM from the 23 month low experienced during the previous month while also increasing on a YOY basis, finishing up 1.8%. The YOY increase in butter stocks was the first experienced throughout the past nine months. Butter stocks finished at a 24 year seasonal high for the month of December, finishing 19.1% above three year average figures.
The MOM seasonal build in butter stocks of 10.2 million pounds, or 6.5%, was slightly greater than the ten year average November – December seasonal build of 6.7 million pounds, or 6.2%. U.S. butter stocks typically reach seasonal lows throughout the months of November and December, prior to increasing seasonally throughout the first half of the calendar year. The most recent seasonal drawdown in butter stocks of 154.8 million pounds, occurring from Jun ’17 – Nov ’17, was larger than the ten year average seasonal drawdown of 140.2 million pounds.
On a days of usage basis, Dec ’17 U.S. butter stocks remained higher YOY for the second consecutive month. When assuming 12 month rolling average YOY usage rates and known stock values for the month of December, butter stocks on a days of usage basis finished up 2.3% YOY.
Cheese – Stocks Remain at Record High Seasonal Levels, Finish up 6.9% YOY
Dec ’17 U.S. cheese stocks increased 1.7% MOM and 6.9% YOY, finishing at a record seasonal high for the month of December. The monthly YOY increase in cheese stocks was the 38th experienced in a row while the MOM build in stocks was greater than historical figures. Cheese stocks have increased by an average of 13.1 million pounds, or 1.3%, from November – December over the past ten years compared to the most recent increase in stocks of 21.9 million pounds, or 1.7%. Cheese stocks continued to remain higher on a YOY basis 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 14 consecutive months through November.
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.
On a days of usage basis, Dec ’17 U.S. cheese stocks also finished higher YOY. When assuming 12 month rolling average YOY usage rates and known stock values for the month of December, cheese stocks on a days of usage basis increased YOY for the tenth time in the past 12 months, finishing up 5.5%.
- Dec ’17 U.S. butter stocks increased on a YOY basis for the first time in the past nine months, finishing 1.8% above the previous year. Butter stocks finished at a 24 year seasonal high for the month of December.
- Dec ’17 U.S. cheese stocks increased 1.7% MOM and 6.9% YOY, finishing at a record seasonal high for the month of December. The seasonal increase in cheese stocks was greater than ten year average historical figures.
According to USDA, Dec ’17 U.S. butter stocks increased 6.5% MOM from the 23 month low experienced during the previous month while also increasing on a YOY basis, finishing up 1.8%. The YOY increase in butter stocks was the first experienced throughout the past nine months. Butter stocks finished at a 24 year seasonal high for the month of December, finishing 19.1% above three year average figures.
The MOM seasonal build in butter stocks of 10.2 million pounds, or 6.5%, was slightly greater than the ten year average November – December seasonal build of 6.7 million pounds, or 6.2%. U.S. butter stocks typically reach seasonal lows throughout the months of November and December, prior to increasing seasonally throughout the first half of the calendar year. The most recent seasonal drawdown in butter stocks of 154.8 million pounds, occurring from Jun ’17 – Nov ’17, was larger than the ten year average seasonal drawdown of 140.2 million pounds.
On a days of usage basis, Dec ’17 U.S. butter stocks remained higher YOY for the second consecutive month. When assuming 12 month rolling average YOY usage rates and known stock values for the month of December, butter stocks on a days of usage basis finished up 2.3% YOY.
Cheese – Stocks Remain at Record High Seasonal Levels, Finish up 6.9% YOY
Dec ’17 U.S. cheese stocks increased 1.7% MOM and 6.9% YOY, finishing at a record seasonal high for the month of December. The monthly YOY increase in cheese stocks was the 38th experienced in a row while the MOM build in stocks was greater than historical figures. Cheese stocks have increased by an average of 13.1 million pounds, or 1.3%, from November – December over the past ten years compared to the most recent increase in stocks of 21.9 million pounds, or 1.7%. Cheese stocks continued to remain higher on a YOY basis 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 14 consecutive months through November.
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.
On a days of usage basis, Dec ’17 U.S. cheese stocks also finished higher YOY. When assuming 12 month rolling average YOY usage rates and known stock values for the month of December, cheese stocks on a days of usage basis increased YOY for the tenth time in the past 12 months, finishing up 5.5%.