U.S. Dairy Exports Update – Sep ’18
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Jul ’18. Highlights from the updated report include:
Cheese – Export Volumes Increase YOY for the 20th Time in the Past 22 Months, Finish up 1.4%
Jul ’18 U.S. cheese export volumes declined to a six month low but remained higher on a YOY basis for the 20th time in the past 22 months, finishing up 1.4%. U.S. cheese export volumes finished at a four year seasonal high for the month of July. Cheddar cheese export volumes increased 8.9% YOY, finishing higher for the 18th consecutive month, while other-than-cheddar cheese export volumes finished 0.3% higher on a YOY basis throughout the month. ’16-’17 annual cheese export volumes finished up 20.6% YOY to a three year high while ’17-’18 YTD figures have increased an additional 6.7% throughout the first ten months of the production season.
Jul ’18 YOY increases in cheese export volumes were led by product destined to South Korea, followed by volumes destined to Saudi Arabia. Export volumes destined to China, Canada and Japan declined most significantly on a YOY basis throughout the month. Cheese exports destined to Mexico declined to a five month low, finishing 0.6% lower on a YOY basis. Mexico recently imposed retaliatory tariffs on a basket of U.S. agricultural imports including a variety of cheeses. Tariffs on Mexican imports of U.S. cheese will range from 20-25%, effective the first week of Jul ’18.
Dry Whey – Export Volumes Decline to a 22 Month Low, Finish Down 10.7% YOY
Jul ’18 U.S. dry whey export volumes declined to a 22 month low, finishing down 10.7% YOY to a nine year seasonal low for the month of July. The YOY decline in dry whey export volumes was the first experienced throughout the past nine months. U.S. dry whey export volumes destined to China declined most significantly on a YOY basis throughout the month, finishing down 35.5%. China applied a 25% retaliatory tariff to a wide variety of U.S. dairy products including whey during early Jul ’18, contributing to the YOY decline in volumes. Excluding China, U.S. dry whey export volumes destined to all other countries increased 16.6% YOY during Jul ’18, led by increases in volumes destined to Vietnam and Malaysia. ’16-’17 annual dry whey export volumes finished up 22.0% YOY to a three year high while ’17-’18 YTD figures are up an additional 13.7% throughout the first ten months of the production season, despite the most recent YOY decline.
WPC – Export Volumes Decline to a 14 Month Low, Finish Down 18.1% YOY
Jul ’18 whey protein concentrate (WPC) export volumes declined to a 14 month low, finishing down 18.1% YOY to a three year seasonal low for the month of July. The YOY decline in WPC export volumes was the first experienced throughout the past ten months. U.S. WPC export volumes destined to China declined most significantly on a YOY basis throughout the month, finishing down 40.3%. Jul ’18 YOY increases in WPC export volumes were led by product destined to Hong Kong and South Korea. ’16-’17 annual WPC export volumes finished up 5.5% YOY, reaching a record annual high level for the second consecutive year, while ’17-’18 YTD figures are up an additional 21.6% throughout the first ten months of the production season, despite the most recent YOY decline.
NFDM/SMP – Export Volumes Reach a Record Seasonal High, Finish up 28.9% YOY
Jul ’18 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 29.8%. U.S. NFDM/SMP export volumes finished at a record seasonal high for the month of July. U.S. NFDM/SMP prices remained below international averages prices for the 43rd consecutive month during Jul ’18, trading at a 16.0% discount to average Oceania and EU-28 prices throughout the month.
Jul ’18 YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to Indonesia and Malaysia. Export volumes destined to South Korea, the Dominican Republic and Australia declined most significantly on a YOY basis throughout the month. ’16-’17 annual NFDM/SMP exports finished up 12.0% YOY to a record annual high while ’17-’18 YTD figures are up an additional 14.7% throughout the first ten months of the production season.
U.S. butterfat and NFDM/SMP export volumes as a percentage of production finished higher than the previous year during Jul ’18 while cheese and dry whey export volumes as a percentage of production finished slightly lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.0% of total U.S. milk-solids production during Jul ’18 while dairy import volumes were estimated to be equivalent to approximately 3.5% of total U.S. milk-solids production. Jul ’18 net dairy trade finished 17.3% higher YOY, increasing for the ninth consecutive month.
Jul ’18 U.S. dairy exports as a percentage of milk-solids production continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 11.9% to a four year seasonal high for the month of July. ’16-’17 annual dairy exports as a percentage of milk-solids production rebounded by 8.1% from the four year low experienced during the previous year, despite declining by 5.3% over the final third of the production season. ’17-’18 YTD dairy exports as a percentage of milk-solids are up an additional 11.2% throughout the first ten months of the production season.
Jul ’18 U.S. dairy imports as a percentage of milk-solids production increased to a seven month high but remained 2.8% lower YOY, finishing lower on a YOY basis for the eighth time in the past nine months and reaching a four year seasonal low for the month of July. ’16-’17 annual dairy imports as a percentage of milk-solids production finished 6.8% below the eight year high experienced during the previous year and have declined an additional 9.6% throughout the first ten months of the ’17-’18 production season.
Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net dry whey trade volumes exceeded net cheese trade volumes throughout the month while the U.S. finished as a slight net importer of butter for the third consecutive month.
- Jul ’18 U.S. butterfat export volumes increased 66.1% YOY, finishing higher for the tenth consecutive month and reaching a four year seasonal high for the month of July. Butterfat import volumes exceeded export volumes for the third consecutive month during Jul ’18, however, as import volumes finished at a 17 year seasonal high. Jul ’18 U.S. cheese export volumes increased on a YOY basis for the 20th time in the past 22 months, finishing up 1.4% to a four year seasonal high for the month of July.
- Jul ’18 U.S. nonfat dry milk/skim milk powder export volumes increased on a YOY basis for the ninth consecutive month, finishing up 28.9% to a record seasonal high for the month of July. Jul ’18 U.S. dry whey and whey protein concentrate export volumes each declined on a YOY basis on weak Chinese demand, however, finishing down 10.7% and 18.1%, respectively.
- Net dairy trade on a percentage of total U.S. milk-solids production basis continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 17.3%. Export volumes on a percentage of milk-solids production basis finished at a four year seasonal high for the month of July while import volumes finished at a four year seasonal low.
Cheese – Export Volumes Increase YOY for the 20th Time in the Past 22 Months, Finish up 1.4%
Jul ’18 U.S. cheese export volumes declined to a six month low but remained higher on a YOY basis for the 20th time in the past 22 months, finishing up 1.4%. U.S. cheese export volumes finished at a four year seasonal high for the month of July. Cheddar cheese export volumes increased 8.9% YOY, finishing higher for the 18th consecutive month, while other-than-cheddar cheese export volumes finished 0.3% higher on a YOY basis throughout the month. ’16-’17 annual cheese export volumes finished up 20.6% YOY to a three year high while ’17-’18 YTD figures have increased an additional 6.7% throughout the first ten months of the production season.
Jul ’18 YOY increases in cheese export volumes were led by product destined to South Korea, followed by volumes destined to Saudi Arabia. Export volumes destined to China, Canada and Japan declined most significantly on a YOY basis throughout the month. Cheese exports destined to Mexico declined to a five month low, finishing 0.6% lower on a YOY basis. Mexico recently imposed retaliatory tariffs on a basket of U.S. agricultural imports including a variety of cheeses. Tariffs on Mexican imports of U.S. cheese will range from 20-25%, effective the first week of Jul ’18.
Dry Whey – Export Volumes Decline to a 22 Month Low, Finish Down 10.7% YOY
Jul ’18 U.S. dry whey export volumes declined to a 22 month low, finishing down 10.7% YOY to a nine year seasonal low for the month of July. The YOY decline in dry whey export volumes was the first experienced throughout the past nine months. U.S. dry whey export volumes destined to China declined most significantly on a YOY basis throughout the month, finishing down 35.5%. China applied a 25% retaliatory tariff to a wide variety of U.S. dairy products including whey during early Jul ’18, contributing to the YOY decline in volumes. Excluding China, U.S. dry whey export volumes destined to all other countries increased 16.6% YOY during Jul ’18, led by increases in volumes destined to Vietnam and Malaysia. ’16-’17 annual dry whey export volumes finished up 22.0% YOY to a three year high while ’17-’18 YTD figures are up an additional 13.7% throughout the first ten months of the production season, despite the most recent YOY decline.
WPC – Export Volumes Decline to a 14 Month Low, Finish Down 18.1% YOY
Jul ’18 whey protein concentrate (WPC) export volumes declined to a 14 month low, finishing down 18.1% YOY to a three year seasonal low for the month of July. The YOY decline in WPC export volumes was the first experienced throughout the past ten months. U.S. WPC export volumes destined to China declined most significantly on a YOY basis throughout the month, finishing down 40.3%. Jul ’18 YOY increases in WPC export volumes were led by product destined to Hong Kong and South Korea. ’16-’17 annual WPC export volumes finished up 5.5% YOY, reaching a record annual high level for the second consecutive year, while ’17-’18 YTD figures are up an additional 21.6% throughout the first ten months of the production season, despite the most recent YOY decline.
NFDM/SMP – Export Volumes Reach a Record Seasonal High, Finish up 28.9% YOY
Jul ’18 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 29.8%. U.S. NFDM/SMP export volumes finished at a record seasonal high for the month of July. U.S. NFDM/SMP prices remained below international averages prices for the 43rd consecutive month during Jul ’18, trading at a 16.0% discount to average Oceania and EU-28 prices throughout the month.
Jul ’18 YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to Indonesia and Malaysia. Export volumes destined to South Korea, the Dominican Republic and Australia declined most significantly on a YOY basis throughout the month. ’16-’17 annual NFDM/SMP exports finished up 12.0% YOY to a record annual high while ’17-’18 YTD figures are up an additional 14.7% throughout the first ten months of the production season.
U.S. butterfat and NFDM/SMP export volumes as a percentage of production finished higher than the previous year during Jul ’18 while cheese and dry whey export volumes as a percentage of production finished slightly lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.0% of total U.S. milk-solids production during Jul ’18 while dairy import volumes were estimated to be equivalent to approximately 3.5% of total U.S. milk-solids production. Jul ’18 net dairy trade finished 17.3% higher YOY, increasing for the ninth consecutive month.
Jul ’18 U.S. dairy exports as a percentage of milk-solids production continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 11.9% to a four year seasonal high for the month of July. ’16-’17 annual dairy exports as a percentage of milk-solids production rebounded by 8.1% from the four year low experienced during the previous year, despite declining by 5.3% over the final third of the production season. ’17-’18 YTD dairy exports as a percentage of milk-solids are up an additional 11.2% throughout the first ten months of the production season.
Jul ’18 U.S. dairy imports as a percentage of milk-solids production increased to a seven month high but remained 2.8% lower YOY, finishing lower on a YOY basis for the eighth time in the past nine months and reaching a four year seasonal low for the month of July. ’16-’17 annual dairy imports as a percentage of milk-solids production finished 6.8% below the eight year high experienced during the previous year and have declined an additional 9.6% throughout the first ten months of the ’17-’18 production season.
Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net dry whey trade volumes exceeded net cheese trade volumes throughout the month while the U.S. finished as a slight net importer of butter for the third consecutive month.