What we’re seeing this week
Steve & Jo are back again with new dairy market insights – this time we take a look at what happened to trade back in December, which wasn’t much.. Trade was flat, powders were well down while cheese trade lifted across most regions – all this while prices for the latter commodity firmed.
We also discuss the latest GDT event which saw average price increases across commodities, prompting the GDT Index to lift again (7th consecutive lift in the Index).
Lastly, our chart of the week looks at US cheese demand and how it’s faring in light of Government buying.
Chart of the week
US domestic commercial cheese disappearance fell 3.8% in December, with a 5.3% YOY drop for American varieties. American cheese days-in-stock rose 9.8% month-on-month to 56.5 days at the end of December. Disappearance of “other cheese” varieties (including mozzarella) fell 2.7% YOY in December, the sixth consecutive monthly contraction.
Domestic butter disappearance rose 3% YOY in December. This followed a 2.4% YOY increase in November, bringing full calendar year demand 2.2% above the 2019 comparable. Butter days-in-stock rose to 44 days by month-end, up 30.8% from November and 37.2% higher YOY.
NFDM/SMP domestic disappearance rose a significant 44.9% YOY in December but has been extremely patchy throughout 2020. The general decline in domestic NFDM/SMP demand started in September 2019, and for the year to date weakened 21.3% relative to 2019. Dry whey domestic sales were 24.3% lower YOY in December and have significantly weakened since February 2020. For the 2020 calendar year, WPC and lactose disappearance was down 28.1% and 24.9% respectively.