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ADPI/ABI Annual Conference 2017

‘Demand is a bit off’ for dairy, Blimling & Associates director says

Mary Ellen Shoup

By Mary Ellen Shoup+

25-Apr-2017
Last updated on 25-Apr-2017 at 10:44 GMT2017-04-25T10:44:31Z

Demand is a little less robust for domestic cheese, director of Blimling & Associates said at the ADPI/ABI Annual Conference 2017. ©iStock/margouillatphotos
Demand is a little less robust for domestic cheese, director of Blimling & Associates said at the ADPI/ABI Annual Conference 2017. ©iStock/margouillatphotos

Demand for cheese is up nearly 3% according to Nielsen data (ending 52 weeks Mar. 25, 2017), a slight drop from 2016 levels of 3.3% demand, but a minimal decrease in demand should not be overlooked, according to Blimling & Associates director, Phil Plourd.

Blimling & Associates, a dairy market intelligence firm based in Madison, Wisconsin, analyzes the trends impacting dairy market pricing.

“Cheese consumption crested early in 2016 and has been sliding ever since,” Plourd said at the ADPI/ABI 2017 Conference in Chicago this week.

“From a cheese perspective, demand has been a little less robust than it was not so long ago and a little bit of change in that regard is a big deal.”

Every 1% in domestic cheese demand translates into roughly 2m lbs of extra cheese per week, Plourd said.

“It helps explain why cheese prices have slid back to $1.50 (per lb) compared to $1.70 at the start of the year,” Plourd added.

The same story can be told for domestic butter demand, which has flattened since being up in demand by 4.7% in 2016, according to Nielsen.

However, the plateau in domestic butter does not necessarily mean less is being sold in retail stores, Plourd explained - pipeline issues and the timing of holidays such as Easter could skew the data.

“But when you look at that trend, it looks like it peaked in early 2016,” he said. “Every 1% of butter demand equals about 8 truckloads per week of product.”

However, Blimling & Associates’ outlook for the dairy market remains mostly positive.

“We’re still not in the danger zone on big picture numbers,” Plourd said.

Global trade outlook

Blimling & Associates does believe that US President Donald Trump’s stance on trade with Mexico will end with a mutual resolution between the two countries.

“I think the Mexican market is way too important for the US beyond dairy,” Plourd said.

“Despite current appearances, we expect the US to reach some sort of peaceful accommodation on trade with Mexico.”

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