Friday, March 29, 2024

Roundup: US inventories higher for October

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The USDA cold storage report for October brings bearish news for all three products. Reductions in inventories were very modest by historic standards says Jerry Dryer, chief market analyst at Rice Dairy, Chicago, USA. Milk production growth for October in the US was just 0.1%. Dryer said the bearish tone of the cold storage report has been influenced by weak commercial demand.
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Dryer said he was expecting fairly typical stock reduction during the month of October which would have left inventories abnormally high. Rather, the very modest reductions that eventuated have left inventories even higher than expected.

Butter inventories at the end of October were down 5% from last month, but up 21% from a year ago. Stocks at the end of October were at 179 million pounds, down from 187 million pounds at the end of September and up from 148 million pounds at the end of October 2014.

Dryer said that historically butter inventories have been reduced by about 30 million pounds over October but this year that pulldown has been only 8.5 million pounds. The five-year average is 143 million pounds, Dryer said.

Total cheese inventories in refrigerated warehouses at the end of October were down slightly from the previous month but up 15% from October 2014.

Total cheese inventories at the end of October sat at 1148 million pounds compared to 1152 million at the end of September and 996 million pounds at the end of October 2014. 

Dryer said that normally American cheese inventories would be reduced by 18 million pounds over the month of October but this year were reduced by just 3.2 million pounds.

Inventories of American cheese at the end of October were at 696 million pounds, compared to 699 million pounds at the end of September and 623 million pounds at the end of October 2014. The five-year average is 624 million pounds, Dryer said.

Other cheese inventories are typically pulled down 11 million pounds but this year, Dryer said, they were reduced by less than 1 million pounds.

Inventories at the end of October were at 431 million pounds compared to a year earlier at 347 million pounds. Dryer said the five-year average was 393 million pounds.

Jerry Dryer is chief market analyst at Rice Dairy, Chicago, USA www.dairymarketanalyst.com

Download the full report here

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