ADPI/ABI Annual Conference 2017

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

By Mary Ellen Shoup contact

- Last updated on GMT

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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