The tricky parts is figuring out whether the 10% drop in prices today was the blow-off bottom or the 10% drop tomorrow will be the bottom. Very strong retail sales in the US are keeping physical supplies in balance or a little tight, but consumers are now stocked up and the retail side will cool down. About 24 states have temporarily banned dine-in service at restaurants. So food service demand will be dropping swiftly and significantly in coming weeks. Black Box Intelligence said foodservice sales were only down about 3% last week, but we’re headed for at least a 10% decline and probably more like 20-30%. Butter prices have been hit hard, and with reduced cream going into foodservice and more cream coming from bottling operations the price drop makes some sense.
Udder Intelligence
By Nate Donnay
March 20, 2020
Nate Donnay is the director of dairy market insight at StoneX Group Inc. and has been applying his interest in large complicated systems and statistical analysis to the dairy markets since 2005. As a consultant, he has worked with clients at all levels of the dairy marketing chain from the farm level up to processors and packaged foods companies, food distributors and restaurants, as well as industries such as banks, private equity groups, government agencies and industry associations.
