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Cheese Stocks Shrink

Cream was inexpensive in January, and churns ran hard. Meanwhile, high prices likely continued to weigh on demand, causing butter to pile up in refrigerated warehouses. At the end of January, 262.7 million pounds of butter were in storage, according to USDA’s Cold Storage report released this afternoon. Inventories grew 46.4 million pounds from December to January, a typical rate for the butter stockbuilding season. Butter supplies were 19.7% higher than the prior year but still lower than in early 2021.

Cheese inventories shrank unexpectedly to 1.44 billion pounds as of the end of January, down 0.3% from the prior year. Cheese stocks declined 4.1 million pounds from December to January, bucking the trend of modest growth in most years. Inventories of American-style cheeses fell 6.5 million pounds over the course of the month, putting stocks 2.2% lower than a year ago.

U.S. exporters likely sent a lot of cheese abroad in January, honoring commitments made last year, when U.S. cheese was more competitively priced. Robust exports helped to keep cheese inventories in check last year despite record-breaking output, and the same is likely true for early 2023. But today, Europe is vying to regain market share, and U.S. cheese shipments are expected to slow. If they do, cheese stocks will swell. U.S. cheese prices will need to remain low enough to attract foreign buyers or boost consumption at home.

February 24, 2023


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