June 6, 2014 — Look for “choppiness for the next several weeks” in the cheese market, according to Jerry Dryer, Editor of the Dairy and Food Market Analyst. Speaking in Friday’s
DairyLine, Dryer said the market is “trying to figure itself out.” He adds that the outlook is that supplies are going to be relatively tight however we’re working through the spring flush right now and, while milk has peaked in the Upper Midwest, you still have cheese coming out of the vat and cheese coming out of the cooler as it has to sit in the cooler 10-15 days before it’s eligible to come to the CME or the market. “So you have a little extra product hanging around the edges,” Dryer said, but he believes prices will hover about 2 cents below or above $2 per pound.
First Quarter 2014 commercial disappearance of milk and dairy products was up 3.3% from a year ago, according to USDA’s latest estimates. The data closely matches Dryer’s numbers however Dryer used data from this week’s Dairy Products report to project disappearance through April. Doing so, Dryer reports that disappearance has likely eased some from that 3.3 percent but is still “very strong.”
For the three months ending in April, Dryer reports American cheese disappearance was up 2.4 percent and other cheese was up 3.5 percent. The total cheese category was up about 3 percent and he noted that, interestingly, U.S. cheese sales were down 2.5 percent in that period. All of the increase was attributed to exports, he said, and he reported that he had just got off the phone with a cheese exporter who told him that he was “optimistic about the future and is writing orders as we speak.”
First Quarter butter disappearance was down, according to Dryer, but has since popped sharply higher, up 6.2 percent, in the most recent three months.
“Demand and usage of dairy products has remained relatively strong,” Dryer concluded, but he warned that “Higher prices are going to keep taking a toll on those consumption numbers as we move through the next three or four months.”