January U.S. fluid milk sales were down, but sales of whole milk varieties were up again. California’s April Class 1 milk prices will be slightly lower. This and other U.S. dairy economic news can be found here.
January fluid milk sales’ storyline the same
National fluid milk sales trends continued in January 2016, with overall fluid milk sales again below year-ago levels, but whole milk varieties posting gains.
Based on a monthly summary from USDA’s Dairy Market News, January 2016 packaged fluid milk sales totaled 4.29 billion pounds, down 3.1 percent from January 2015. January sales of conventional products totaled 4.08 billion pounds, down 3.5 percent, while sales of organic products, at 218 million pounds, were up 4.0 percent. Organic represented about 5.0 percent of total sales for the month.
As was the trend for most of 2015, sales of conventional and organic whole milk varieties were up compared to year-ago levels. January sales of conventional whole milk were up 2.3 percent, and flavored whole milk sales were up 5.2 percent. Sales of organic whole milk were up 13.4 percent compared to a year earlier.
Milk varieties seeing the largest year-to-year sales declines were reduced fat (2 percent milkfat) and skim products for both conventional and organic categories.
The figures represent consumption of fluid milk products in federal milk order marketing areas and California, which account for approximately 92% of total fluid milk sales in the U.S.
California April Class 1 milk prices lower
California's April 2016 Class 1 minimum milk prices dipped a little, according to the California Department of Food & Agriculture (CDFA).
The April 2016 Class 1 price for the North is $15.26 per hundredweight, with the South at $15.53 per hundredweight. Both are down 12 cents from March 2016, and $1.68 per hundredweight less than April 2015.
Through the first four months of 2016, the Class 1 milk price averaged $15.88 per hundredweight in the North and $16.15 per hundredweight in the South, down about $1.67 from the same period a year earlier.
USDA will announce the April 2016 federal order Class I base price on March 23.
Organic production: Hope springs eternal again
Warmer temperatures in the Northeast and Midwest are helping bring pastures out of dormancy, with cows getting an early start to the grazing season. However, the ongoing struggle to increase domestic organic milk production to meet growing demand, and reduce the need for imports, continues, according to USDA’s Dairy Market News.
Recent springs have boosted optimism regarding increased organic milk production – gains that have mostly gone unrealized. This year’s relatively early spring, coupled with easing of organic feed costs, is contributing to optimism again this year.
One change for 2016, according to Dairy Market News, is increased processor support for dairy producers transitioning from conventional to organic, providing expertise and some financial incentives through the multi-year transitioning process. Past efforts, primarily focusing on the lure of higher organic pay prices, have not fully addressed the challenges of the transition process.
Restaurant index offers mixed news
A factor in determining overall dairy consumption is the level of sales and customer traffic in U.S. restaurants. The latest monthly report from the National Restaurant Association provided mixed news.
Compared to December 2015, January 2016 same-store sales were about evenly split between those seeing sales increases vs. those reporting sales declines. January also represented the second straight month in which restaurant operators reported a net decline in customer traffic levels, according to the NRA’s Restaurant Performance Index.
There are signs indicating a generally positive outlook for business conditions in the months ahead. Restaurant operators are optimistic regarding sales over the next six months, and they’re boosting capital expenditures. PD
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Dave Natzke
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