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January dairy market report
The January Dairy Market Report is now available. Continued growth in domestic butter and cheese consumption, coupled with further recovery of world prices for skim milk powder and whey, strengthened U.S. milk prices as 2016 drew to a close. The all-milk price hit a high for the first 11 months of the year in November, while the Margin Protection Program (MPP) feed cost was the lowest of all previous months. As a result, the $9.98-per-hundredweight MPP margin for November was the highest for the year up to that point.

Commercial Use of Dairy Products

Domestic sales of fluid milk dropped by half a percent during August–October, compared to the same period a year earlier. This is in line with recent trends in fluid milk sales. Butter consumption was up almost 5 percent from a year earlier, marking a return to the strong growth the category experienced during the first months of 2016. Growth in American-type cheese consumption, at more than 3 percent, was similarly strong compared to recent months. By contrast, the rate of increase in other cheese consumption trended lower throughout 2016. In addition, the use of nonfat dry milk and skim milk powder continues to drop steadily as exports recover and pull more skim solids away from the domestic market. Use of milkfat in all products during August–October rose by 3.6 percent from a year earlier, while the corresponding use of skim solids was 1.4 percent less. This was the largest difference in these two U.S. market growth rates since at least the beginning of 2015, likely symbolizing the growing divergence between the domestic market’s increasing appetite for milkfat and the world market’s recovering need for skim milk solids.

Read the full January Dairy Market Report.

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