Dairy Products report neutral to bearish

USDA released its monthly Dairy Products report on Jan. 6, summarizing November 2015 production estimates. Highlights include:

November 2015 Dairy Products
	Nov.	Change from	Y-T-D	Change
	2015	Nov. 2014	2015	From 2014
	(1,000 lbs.)	%	(1,000 lbs.)	%
Total cheese	975,713	0.6	10,681,356	2.3
American types	377,265	-0.3	4,242,032	2.5
Cheddar	266,375	2.0	3,057,320	2.7
Italian types	421,823	-0.5	4,593,599	1.8
Mozzarella	329,850	-2.0	3,604,900	0.7
Butter	150,827	4.4	1,671,378	-0.9
Dry whey, total	81,904	14.6	883,158	11.2
Nonfat dry milk, human	126,091	-16.9	1,666,775	4.1
Skim milk powder, total	44,147	44.1	404,471	-19.2

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Total cheese output (excluding cottage cheese) was 976 million lbs., 0.6% more than November 2014, but 2.2% less than October 2015.

• Italian type cheese production totaled 422 million lbs., 0.5% less than November 2014, but 0.4% more than October 2015.

• American type cheese production totaled 377 million lbs., 0.3% less than November 2014 and 3.6% less than October 2015.

• Butter production was 151 million lbs., 4.4% more than November 2014 and 2.2% more than October 2015.

• Nonfat dry milk (human consumption) totaled 126 million lbs., down 16.9% from November 2014; skim milk powders totaled 44.1 million lbs., up 44.1% from the year before.

Dave Kurzawski, INTL FCStone, termed the report bearish for butter and dry when, and neutral for cheese and nonfat dry milk.

"Capping off four months of butter production gains, November was the strongest production month on record for 2015," Kurzawski said. "Butter production is on the mend, but we wouldn't call today's report very bearish for butter since the price is already 86¢ off November's high price.

"Total cheese production was up 0.6%, rounding out a fairly flat report for cheese production in November," he continued. "Any first-blush bullish feelings for the report likely won't mean much. We're calling this report neutral as production is largely flat versus last year."

HighGround Dairy's Eric Meyer termed the report slightly bearish for butter, and neutral for all other commodities.

To see the full USDA report, click here.