The July issue of the NMPF-DMI Dairy Market Report is now available online.
Dairy futures markets suggest milk prices have likely bottomed out for the year, following a drop of $0.50 per hundredweight in May. In other positive developments, domestic commercial use of milk continues to expand faster than milk production, while record stocks of butter and American-type cheese in May did not restrain increases in Chicago Mercantile cash prices for these products that month. However, the monthly Margin Protection Program margin dropped by more than a dollar per hundredweight in May on the lower milk price and higher feed costs.
Commercial Use of Dairy Products
Domestic commercial use increased year over year for most products during February–April as increasing domestic prices and intense competition in world markets continue to draw products away from export sales. Domestic use grew at least as fast as production for most manufactured products, as well as for total milk use in all products. The rate of annual decline in fluid milk sales continues to slow, while consumption of milkfat in the entire fluid milk category continues to grow. Fluid sales during February–April were just 0.6 percent under a year ago, adjusted for leap year. Milkfat consumption in fluid products during the period was 1.7 percent higher than a year earlier.