MRV BLOG: MRV Market Commentary February 12, 2025

Check-in here to see the MRV commentary on what we have seen and are seeing in the dairy market.  These insights have been developed from MRV’s proprietary data, industry experience, and industry reports referenced below. Here’s our latest:

Domestic

Last week’s sales report for dairy commodities showed nothing but declines week-over-week. Butter saw a decrease of 3.3 cents, 40-pound block cheese had a decrease of 2.8 cents, while 500-pound barrel cheese also had a small decrease of one cent from the previous week. NFDM went down marginally, roughly one cent, and dry whey also went down (less than a penny) although not enough to really make an impact.

The latest cold storage report for butter reflected a 9% decrease from the beginning of the month while cheese inventories were showing a marginal decline of 0.4% over the same period. In the previous month, the USDA’s Cold Storage report indicated that, as of December 31, 2024, total natural cheese stocks were approximately 1.332 billion pounds, marking a 1.2% decrease from November 2024 and a 7.2% decline compared to December 2023. Butter stocks were reported at 199 million pounds, which is a 0.4% increase from the same month in the previous year.

These figures suggest a tightening in both cheese and butter inventories. However, prior to the most recent report, butter stocks have remained relatively stable with a slight year-over-year increase.

Exports

In December, U.S. dairy exports experienced a 1.9% decrease in volume, measured in milk solids equivalent (MSE), which contributed to a slight 0.4% decline in the total year-to-date figures.

Despite the reduction in volume, the export market showed strong financial performance. The value of U.S. dairy exports climbed 11% in December, raising the year-to-date total by 2% which is the second-highest annual figure on record. U.S. cheese exports were another bright spot, marking their 12th straight month of year-over-year growth in December. This achievement set a new record for December shipments.

(USDEC)

Futures

Class III futures plummeted today, wiping out gains made earlier in the week due to a weaker spot market. The downturn wasn’t limited to Class III; butter, NFDM, and whey markets also saw notable declines. Second-quarter butter futures hit their lowest point since April, while NFDM prices for the same period slipped below $1.30 per pound for the first time since August. Alongside class III, in the spot market we are also seeing declines in block cheese, butter, whey, NFDM, and class IV for March.

Summary

The most recent sales report for dairy commodities showcased a slight overall decline. Butter prices fell by 3.3 cents, while both 40-pound block and 500-pound barrel cheese saw modest decreases. Cold storage holdings reflected similar trends, with butter inventories dropping 9% from the start of January and cheese stocks dipping 0.4% over the same period. Compared to the previous year, natural cheese inventories were down 7.2%, while butter stocks posted a minor 0.4% year-over-year increase.

On the export front, dairy volumes decreased 1.9% in December, contributing to a 0.4% decline year-to-date. However, export value rose 11% in December, bringing annual figures up 2%. U.S. cheese exports continued strong, marking their 12th consecutive month of growth and surpassing half a million metric tons for the first time. Class III futures took a sharp downturn, with March contracts falling 62 cents, and broader spot markets, including butter and nonfat dry milk, followed suit. Given these trends in declining inventories, falling futures, mixed export performance, and MRV’s proprietary formulaic process, we project downward pressure on dairy prices in the coming month, though strong export values could result in some stabilization of price.

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.

Statistical data referenced here is gleaned from reports by MRV Proprietary Data, CME Group, Dairy Herd Management, USDEC and USDA.