July 11, 2014 — Jerry Dryer, editor of the Dairy and Food Market Analyst, was back on Friday’s DairyLine to report his commercial disappearance data after factoring in USDA’s
latest Dairy Products report last Friday. Dryer prefers to examine the data in three month averages rather than monthly data. He reported that demand was still pretty good through May, adding the caveat that it may have since hit the wall in some respects or at least slowed down.
March, April, May American cheese sales were up about 2 percent, other cheese was up almost 3 percent so the cheese category was holding despite the higher prices at retail. Butter disappearance was up almost 8 percent, although a lot of that was driven by exports, which have now softened because of the high prices. The other side of that, according to Dryer, is that butter stocks are very low, due to that strong demand.
“Typically at the end of May, we have 51 days worth of butter in the cooler, getting ready for the holiday season,” Dryer warned, “And this year we have 35 and a half days worth of product in the cooler so it’s bullish on the butter side of the business.”
The milk powder business, which includes milk protein concentrate, skim milk powder and nonfat dry milk, has slowed down and is below a year ago, he said, by about 0.3 percent for that three month period, but that’s actually a recovery from early in the year.
The whey business “stays in the dumper,” according to Dryer, down 10 percent in that three month period. “The key products driving milk prices, cheese and butter have good sales, good disappearance through the end of May,” he concluded, but “They’re slowing some now as the import orders back off a little bit because of prices and retail sales back off because of higher prices.”