The October issue of the NMPF-DMI Dairy Market Report has been released.
Milk prices continued a generally solid recovery from their late-spring low through August, when the U.S. average all-milk price reached $17.10 per hundredweight. The rise was powered largely by a strong increase in Class III skim milk prices, which also drove up Class I skim prices. However, Class III and Class IV prices dropped in September, and milkfat prices have been drifting downward for the past few months. That indicates milk prices may have reached a ceiling for the time being. The Margin Protection Program monthly feed cost calculation dropped steadily from June through August, and the monthly MPP margin rose by more than $3.50 per hundredweight from its low in June to $9.26 per hundredweight in August.
Commercial Use of Dairy Products
After a nearly steady spring,sales of all fluid milk products resumed a pattern of steeper declines during the summer. Fluid sales were 1.7 percent below a year ago for the May–July period. Commercial use grew during May–June for the major dairy product categories, as well as for total milk use in all products.
U.S. Dairy Trade
U.S.exports of cheese and lactose are continuing to drop year-over-year, but the rate of decline has decreased steadily in recent months. A similar pattern of decreasing losses turned positive during June–August for nonfat dry milk, skim milk powder and dry whey, as well as for the percent of all U.S. milk solids exported. Exports of whey protein concentrate and isolate have been growing at a steadily increasing pace for most of 2016. These are all strong indications that the long slide in U.S. exports could be bottoming out and a modest recovery is under way. World demand for imported dairy products has picked up recently, and world dairy product prices are reacting positively. Also helping world prices is the recent stalling of the past year’s explosive growth in European Union milk production.
U.S. cheese imports dropped during June–August after increasing during the first half of 2016. Case in imports have dropped by double-digit percentages all year, but the percent of total U.S. production represented by imports continues to rise by single-digit percentages.