In his weekly report issued to the industry, Nate Donnay, Director of Dairy Market Insight at StoneX Financial Inc., writes that April New Zealand exports were weaker than expected, down 8.4% from last year, while April NZ milk production was stronger than forecast, up 11.6% compared to 7% forecast. The March EU-28 milk production was up 0.8%, April forecast at +1.3% and April U.S. stocks were very close to forecast, cheese –1.7% YoY and butter +3.4%
He continues, saying the supply side turned out a little better than expected globally with production rebounding in the EU, the US running strong and NZ production coming in a little higher than forecast for March and April. Global imports were higher than expected for Q1, but April exports out of NZ and Argentina were both lower than expected. Some of that April export weakness may be logistics issues.
U.S. cheese, butter and NFDM prices were all weaker than was expected the past two weeks. The food box program was absorbing about 1.2 to 1.5% of milk production but it ends this week. Combine that with milk production that is running strong, food service pipelines fully restocked and schools closing for the summer and the market could be a little heavy until milk production drops off seasonally.
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