Cheese Sales Drive U.S. Dairy Consumption Growth - Cowsmo

Cheese Sales Drive U.S. Dairy Consumption Growth

Total domestic consumption of milk in all products returned to positive annual growth during the third quarter, for the first time since early this year. Strengthened use of all cheese was a key driver of this positive development. Meanwhile, U.S. dairy export volumes backed off a bit during the third quarter from their record pace during the prior quarter but kept the U.S. dairy industry on an almost certain path to set yet another calendar year record. Year-to-date performance through the third quarter was 18 percent of total U.S. milk solids production, up significantly from the current 17.3 percent calendar year record set in 2021.

The U.S. dairy industry has now clearly resumed increasing milk production after many months of below year-ago levels. Despite this greater supply, dairy product prices, which had been falling in recent months, found a floor and rebounded in some cases during October. Retail price inflation for all items, the categories of food and beverages, dairy products and for most individual dairy products moderated in October from a month earlier. The Dairy Margin Coverage program generated a second payment for 2022, of $0.88/cwt for Tier 1 coverage at the $9.50/cwt level, in September. The CME Group dairy futures and USDA’s dairy outlook are currently indicating that milk prices will be about $2.50 to $3.00 per hundredweight lower in 2023 than this year.

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