RaboResearch announces the publication of the North American Agribusiness Review, a summary of market conditions and trends across North American agriculture. Below are the highlights for dairy from the report. For the whole report you can click here.
December milk production fell 0.3%, marking the sixth consecutive month of weaker year-over-year output.
Fewer cows and a minor 0.1 % yield increase contributed to the decline,
in line with recent trends. Less milk was expected in recent months as on-farm margins remained weak until the year’s end. Total 2023 production was up negligibly versus the prior year and unchanged on a percentage basis.
Milk per cow grew a slight 0.1%, climbing in December following two consecutive months of weakness. Yield was up just 0.1 % annually, well below the long-term average 1 % growth rate.
Total cheese production grew 0.9% in December, marking the third consecutive year-on-year and the largest year-on-year gain since January 2023. Output in 2023 was up 0.3% versus 2022. While the final three months of the year showed strength, cheese production was lower in five different months throughout last year. Total cheese stocks grew slightly in December, climbing 6m pounds, or 0.4% versus November to mark the first monthly increase since August.
December butter production jumped 4.4%, the strongest gain since July and a reversal after November’s 3.3% downturn. Output is climbing seasonally as milk production and cream availability increase into the spring flush. All regions increased year-on-year, but the gain was especially notable in the west, up 7.7%.
However, December butter stocks fell by 13.1 m pounds, or 6.2%, dropping to the lowest level since December 2021. It was the steepest December inventory drop in 20 years, another bullish datapoint that could keep the butter price supported throughout this year as availability remains tight.
Combined nonfat dry milk/skim milk powder production fell 15.9% YOY in December, the seventh successive month of lower output. Stocks sank for the tenth consecutive month. At 203.3m pounds, inventories were at the lowest level since November 2015.
Total exports finished 2023 in a similar fashion to the trend set throughout most of last year, with volumes below the record levels of 2022. Total dairy exports were down 5% YOY in December, with exports for the calendar year 2023 down 7%. Only WPC80 and lactose shipments rose in 2023, with all other dairy products losing steam compared to 2022. Cheese exports finished the year on a positive note, up 4% in November and 1 % in December, but the gains were driven largely by continued robust exports to Mexico.
The year-on-year dairy consumer price index fell for the fourth consecutive month in December, with dairy product price deflation emerging following lower milk prices throughout 2023.
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