U.S. Dairy Exports Decline YOY for the First Time…
According to USDA, the total value of all U.S. dairy exports in Aug ’14 declined 4.6% YOY, the first monthly YOY decline in 20 months. The total value of all U.S. dairy exports also declined on a MOM basis, falling 5.9% vs. Jul ’14 figures. The MOM decline was the fourth in the last five months.
Butter – Exports Continue to Weaken, Reach 20 Month Low
Aug ’14 export volumes of butterfat continue to weaken, declining 59.8% YOY and 32.4% MOM. Butterfat export volumes reached a 20 month low in Aug ’14, with the YOY percentage decline being the largest in nearly five years. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. Despite the recent YOY declines, ’13-’14 YTD butterfat exports remain 47.7% higher than last year through August.
U.S. butterfat exports to Saudi Arabia, which accounted for over a quarter of total U.S. butterfat exports YTD prior to August, were nearly nonexistent, reaching a seven year low and down 99.0% MOM. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013. U.S. butterfat exports were up slightly MOM when excluding exports to Saudi Arabia.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. Recently, the spreads have increased, with U.S. butter prices trading at an 80.6% premium to Europe and a 128.1% premium to Oceania throughout September. If this trend continues it is reasonable to expect an extended relative decline in U.S. butter exports.
Cheese – Exports Down MOM but YOY Gains Continue
Aug ’14 U.S. cheese exports declined 2.6% MOM but remain up 11.4% YOY. Although U.S. cheese exports have increased YOY for 15 straight months, signs of relative weakness have begun to show. U.S. cheese exports have declined MOM for four of the last five months and the Aug ’14 YOY percentage increase in cheese exports was the lowest in 14 months. ’13-’14 YTD cheese exports remain up 33.1% YOY through August.
NFDM/SMP – Exports Decline Significantly MOM for Second Straight Month
Aug ’14 export volumes of NFDM/SMP declined 13.0% MOM and 10.1% YOY. The YOY percentage decline was the largest in 19 months and the Jul ’14 and Aug ’14 MOM declines were the largest in over two years. U.S. NFDM/SMP exports reached a record high in Jun ’14, so recent MOM declines do not come as a surprise, however the YOY decline was only the second in the last 17 months. ’13-’14 YTD NFDM/SMP exports remain up 16.6% through August.
See the table below for a summary of key U.S. dairy product exports as a percentage of production in Aug ’14.
Butter – Exports Continue to Weaken, Reach 20 Month Low
Aug ’14 export volumes of butterfat continue to weaken, declining 59.8% YOY and 32.4% MOM. Butterfat export volumes reached a 20 month low in Aug ’14, with the YOY percentage decline being the largest in nearly five years. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. Despite the recent YOY declines, ’13-’14 YTD butterfat exports remain 47.7% higher than last year through August.
U.S. butterfat exports to Saudi Arabia, which accounted for over a quarter of total U.S. butterfat exports YTD prior to August, were nearly nonexistent, reaching a seven year low and down 99.0% MOM. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013. U.S. butterfat exports were up slightly MOM when excluding exports to Saudi Arabia.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. Recently, the spreads have increased, with U.S. butter prices trading at an 80.6% premium to Europe and a 128.1% premium to Oceania throughout September. If this trend continues it is reasonable to expect an extended relative decline in U.S. butter exports.
Cheese – Exports Down MOM but YOY Gains Continue
Aug ’14 U.S. cheese exports declined 2.6% MOM but remain up 11.4% YOY. Although U.S. cheese exports have increased YOY for 15 straight months, signs of relative weakness have begun to show. U.S. cheese exports have declined MOM for four of the last five months and the Aug ’14 YOY percentage increase in cheese exports was the lowest in 14 months. ’13-’14 YTD cheese exports remain up 33.1% YOY through August.
NFDM/SMP – Exports Decline Significantly MOM for Second Straight Month
Aug ’14 export volumes of NFDM/SMP declined 13.0% MOM and 10.1% YOY. The YOY percentage decline was the largest in 19 months and the Jul ’14 and Aug ’14 MOM declines were the largest in over two years. U.S. NFDM/SMP exports reached a record high in Jun ’14, so recent MOM declines do not come as a surprise, however the YOY decline was only the second in the last 17 months. ’13-’14 YTD NFDM/SMP exports remain up 16.6% through August.
See the table below for a summary of key U.S. dairy product exports as a percentage of production in Aug ’14.