November 29. 2013 — The Agriculture Department’s latest report of dairy product commercial disappearance is raising some eyebrows. Ditto on its latest milk cost of production data so we have elected not to report it. USDA Economic Research Service economist William McBride, told DairyBusiness Update editor Dave Natzke that they will update the data and issue revised October estimates next month.
Third Quarter commercial dairy product disappearance was very strong, according to data compiled by Jerry Dryer, editor of the Dairy and Food Market Analyst. Speaking in Friday’s DairyLine Radio broadcast, Dryer said USDA’s data was confused at best but his findings are “supportive of current milk prices.”
American cheese was up more than 5 percent, he said, other cheese was up almost 4 percent, and butter was up about 8 percent. The nonfat dry milk and skim milk powder wide of the business was up 14 percent, which he attributes to exports, prompting the question, what will exports look like next year?
Dryer also views the October Milk Production report as bullish with output only being up around 1 percent. Compare that with commercial disappearance for all milk and dairy products being up 3 1/2 percent in the Third Quarter, he said “We’re burning through product faster than we’re producing it.”
He adds that the October Cold Storage report “confirmed that in spades for us.” There were big pull downs, not just in October, according to Dryer, but, looking at June to October and, when we get November data, he believes we will see a huge pull downs June through November, late summer and all of fall which is “very supportive of milk prices,” he concluded.