Cheese Stocks Heavier Than Expected

In his weekly update issued on Mar. 25, Nate Donnay, Director of Dairy Market Insight at StoneX, reports:

February U.S. cheese stocks were much heavier than expected (+5.4% YoY) and butter stocks were lower than expected (+16.8% YoY). February New Zealand exports were weaker than forecast, down 1.3%. Exports to China were up 30% while shipments to all other countries –14%. And February NZ milk production was slightly stronger than forecast, +6.7% YoY (adjusted for leap year).

His report continues. While re-opening optimism is still high in the U.S., COVID case counts are now trending higher in more than half of the states. Optimism seems to have crashed in Europe with new lockdowns and downward pressure on cheese/butter prices. NZX futures have also been trending lower with anecdotal comments that buyers in China aren’t willing to pay the elevated GDT prices.

The USDA listening session on the Food Box program wasn’t as boring as I feared. Comments were mostly focused on tweaks to the program and not calling for dramatic changes or a new kind of program. Speakers mostly wanted to shift away from combo boxes, encourage local sourcing, increase lead times, and increase the price per box to support high quality products and local sourcing.

The report entitled Udder Intelligence is available at https://www.stonex.com/Commodities/Dairy/Capabilities/dairy-market-intelligence-packages/