The latest Cold Storage report reveals butter stocks lifted by 23% during the month while cheese stocks expanded a little. Stock levels are considerably stronger than a year ago.
Butter stocks for February are at their highest level in three years. Butter stocks are now 32% higher than a year ago with 235.478 million pounds (106,812t) of butter in cold stores. The stock build during February was the largest monthly build since 2006. The volume of cheese in stock is expected to put pressure on butter prices in the coming months. Butter stocks tend to peak towards the end of the Northern Hemisphere summer.
Cheese stocks are marginally higher than a month ago but but are up 11% from a year ago. There is currently 1,182 million pounds (536,166t) of natural cheese in storage. Cheese stocks are now at 30 year highs. However the lift in cheese stocks during the month of February was much smaller than usual indicating demand and supply were relatively balanced in February. Domestic demand for cheese still appears good but current prices are also encouraging more cheese to be produced. In this environment it is unlikely that cheese prices will increase but so long as demand remains strong then a big price correction is also unlikely.
