Check in here to see the MRV commentary on what we have seen and are seeing in the dairy market. These insights have developed from MRV’s proprietary data, industry experience, and industry reports referenced below. Here’s our latest!
The latest sales data from USDA showcases a subtle rise in price across the board with the exceptions of dry whey and NFDM. Butter price increased $0.002 over last week’s. Cheese rose: block +$0.036 and barrel +$0.049 (WoW), while dry whey and NFDM dropped $0.021 and $0.009 respectively. All sales volumes are within normality for all components.
Production follows a somewhat similar trend this March vs March 2021, with butter production up 1.5%, cheese production up 1.1%, and dry whey production up 5.9% (YoY). However NFDM and skim milk powder (SMP) dropped 10.9% (vs March 2021).
USDA announced April’s Class 3 price at $24.42/cwt. This is the third highest Class 3 price on record, however, it is still trailing the high Class 4 price of $25.31/cwt.
MRV forecasts another increase for whole milk. However, CME futures do suggest a slow decline for butterfat and skim starting in June.
Between trucking shortages, the spike in natural gas and diesel, and feed costs rising, the supply chain continues to have serious disruptions. With the shortage in trucking continuing to create a serious disruption in the supply chain, a survey conducted by the SNA (School Nutrition Association), shows that over 80% of school programs in the northeast claimed late deliveries are a serious issue. Others report up to 15% of shipments are either delayed or canceled. Freight rates were spiking in the 4th quarter of 2021 showing up to a 48% increase.
Along with labor shortages still leaving their mark creating a bottleneck in the dairy ecosystem, the national average of diesel has had an increase of $0.22, creating an all-time high of $5.29 per gallon, that’s a 70% increase over same period last year.
Hay prices are pressing their way to an all-time high as well, with USDA estimating 57% of Hay acreage and 43% of milk cows are suffering in droughted areas, particularly in California.
Exports value was strong while volumes were only okay versus March 2021. Cheese was strong with an increase of 13% while butter exports jumped 47%!
Although China’s import of US dry whey decreased 10% (vs March 2021), Canada and Mexico picked up some slack increasing their buying overall with an increase of 39.7% and 17.4% respectively.
US Exports hit a short-term wall matching 2021’s volumes with many factors restricting dairy exports, namely: strong domestic demand in early 2022, constrained milk supplies, high prices, and logistical issues.
Although 2022’s export volumes have decreased (-1%) from 2021’s, this year’s value has far exceeded it, increasing 25% (YoY) with high value exports like cheese and butter.
Statistical data referenced here gleaned from the following reports and sites:
- MRV proprietary reports
- USDEC blog
- Dairy Herd market news
- Dairy Herd news
- Daily Dairy Report
- The Hoyt Report
- School Nutrition Association
This information cited by MRV Marketing, LLC is for informational and reference purposes only. It is not intended to be a conclusive statement of future market conditions. It is not legal advice or legal documents. The data used in these documents contains references to information created and maintained by other organizations or agencies. Please note that MRV Marketing, LLC does not control and cannot guarantee the accuracy of these outside materials.