U.S. Dairy Exports Update – Nov ’19
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Sep ’19. Highlights from the updated report include:
Butterfat export volumes destined to Mexico declined most significantly on a YOY basis throughout the month, while export volumes destined to South Korea and China finished most significantly higher. When excluding volumes destined to Mexico, U.S. butterfat exports finished just 1.2% lower on a YOY basis throughout the month.
Canada and Mexico have historically been the largest importers of U.S. butterfat, accounting for 55% of total U.S. export volumes throughout the past five years. U.S. butterfat export volumes destined to Canada and Mexico have declined by 32.1% and 26.8%, respectively, on a YOY basis throughout the past 12 months, compared to a 22.6% YOY decline in U.S. butterfat export volumes destined to all other countries.
Cheese – Export Volumes Increase 12.0% YOY to a Five Year Seasonal High Level
Sep ’19 U.S. cheese export volumes increased on a YOY basis for the second time in the past three months, finishing up 12.0% to a five year seasonal high level. Other-than-cheddar cheese export volumes increased 13.2% YOY throughout the month while cheddar cheese export volumes finished 0.7% higher. ’17-’18 annual cheese export volumes finished up 4.1% YOY, despite declining by 4.9% on a YOY basis over the final quarter of the production season. ’18-’19 annual cheese export volumes increased an additional 2.3% YOY, finishing at a five year high level.
Sep ’19 YOY increases in cheese export volumes were led by product destined to Mexico, while volumes destined to Indonesia finished most significantly lower on a YOY basis throughout the month.
Mexico and South Korea have historically been the largest importers of U.S. cheese, accounting for 45% of total U.S. cheese export volumes throughout the past five years. Combined U.S. cheese export volumes destined to Mexico and South Korea have increased 1.8% on a YOY basis throughout the past 12 months.
Whey – Total Export Volumes Remain Lower YOY on Weak Chinese Demand
Sep ’19 U.S. dry whey export volumes remained lower on a YOY basis for the 13th consecutive month, declining by 22.4% to a four year seasonal low level. ’17-’18 annual dry whey export volumes finished up 12.3% YOY to a four year high, despite declining by 3.0% on a YOY basis over the final quarter of the production season. ’18-’19 annual dry whey export volumes declined 29.8% YOY, however, finishing at a 15 year low level.
Sep ’19 whey protein concentrate (WPC) export volumes finished lower on a YOY basis for the 11th time in the past 12 months, declining by 9.0%. ’17-’18 annual WPC export volumes finished up 17.4% YOY, reaching a record annual high level for the third consecutive year, despite declining by 4.7% on a YOY basis over the final quarter of the production season. ’18-’19 annual WPC export volumes declined 29.1% YOY, however, finishing at a four year low level.
U.S. whey export volumes destined to China remained most significantly lower on a YOY basis throughout the month. China applied a 25% retaliatory tariff to a wide variety of U.S. dairy products including whey during early Jul ’18 while Chinese whey demand has also been reduced on weaker feed demand due to African swine fever. The YOY decline in Chinese imports of U.S. whey products was the smallest experienced throughout the past 15 months on a percentage basis, however.
China has historically been the largest importer of U.S. whey products, accounting for over a third of the total U.S. whey export volumes throughout the past five years. U.S. whey export volumes destined to China have declined 53.9% YOY throughout the past 12 months, while whey export volume destined to all other countries have declined by just 1.6% on a YOY basis over the same period.
NFDM/SMP – Export Volumes Reach a Record High Seasonal Level, Finish up 25.1% YOY
Sep ’19 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished higher on a YOY basis for the first time in the past eight months, increasing 25.1% to a record high seasonal level. ’17-’18 annual NFDM/SMP exports finished up 16.4% YOY, reaching a record annual high level for the second consecutive year, however ’18-’19 annual NFDM/SMP export volumes declined 9.4% YOY, despite the most recent YOY increase.
Sep ’19 YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, Vietnam and Indonesia, while export volumes destined to the Philippines finished most significantly lower on a YOY basis throughout the month.
Mexico has historically been the largest importer of U.S. NFDM/SMP, accounting for nearly half of all U.S. NFDM/SMP export volumes throughout the past five years. U.S. NFDM/SMP export volumes destined to Mexico have increased 3.0% YOY throughout the past 12 months however export volumes destined to all other countries have declined by 19.7% on a YOY basis over the same period.
Export Volumes Normalized to Production
U.S. cheese and NFDM/SMP export volumes as a percentage of production finished above previous year figures during Sep ’19 however butterfat and dry whey export volumes as a percentage of production finished lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.3% of total U.S. milk-solids production during Sep ’19 while dairy import volumes were estimated to be equivalent to approximately 3.7% of total U.S. milk-solids production. Sep ’19 net dairy trade finished 4.9% lower YOY, declining for the 11th consecutive month. The YOY decline in net dairy trade on a percentage of milk-solids production was the smallest experienced throughout the 11 month period, however.
Sep ’19 U.S. dairy exports as a percentage of milk-solids production remained lower on a YOY basis for the 11th consecutive month, finishing down 0.6%. ’17-’18 annual dairy exports as a percentage of milk-solids production finished at a record high value of 16.3%, however ’18-’19 annual figures declined 12.3% YOY, reaching a three year low level.
Sep ’19 U.S. dairy imports as a percentage of milk-solids production remained higher on a YOY basis for the 12th consecutive month, finishing up 15.6%. ’17-’18 annual dairy imports as a percentage of milk-solids production finished at a four year low value of 3.3%, however ’18-’19 annual figures rebounded by 12.7% YOY, reaching a three year high level.
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 for the second consecutive month during Sep ’19 while the U.S. finished as a net importer of butter for the 17th consecutive month.
- Sep ’19 U.S. butterfat export volumes declined on a YOY basis for the seventh consecutive month, finishing down 42.0% to a three year seasonal low level, however Sep ’19 U.S. cheese export volumes increased 12.0% on a YOY basis throughout the month, reaching a five year seasonal high.
- Sep ’19 U.S. dry whey and whey protein concentrate export volumes remained lower on a YOY basis on weak Chinese demand, declining by 22.4% and 9.0%, respectively. Sep ’19 U.S. nonfat dry milk/skim milk powder export volumes increased on a YOY basis for the first time in the past eight months, however, finishing up 25.1% to a record high seasonal level.
- Net dairy trade on a percentage of total U.S. milk-solids production basis declined YOY for the 11th consecutive month during Sep ’19, finishing down 4.9%. The YOY decline in net dairy trade on a percentage of milk-solids production was the smallest experienced throughout the 11 month period, however.
Butterfat export volumes destined to Mexico declined most significantly on a YOY basis throughout the month, while export volumes destined to South Korea and China finished most significantly higher. When excluding volumes destined to Mexico, U.S. butterfat exports finished just 1.2% lower on a YOY basis throughout the month.
Canada and Mexico have historically been the largest importers of U.S. butterfat, accounting for 55% of total U.S. export volumes throughout the past five years. U.S. butterfat export volumes destined to Canada and Mexico have declined by 32.1% and 26.8%, respectively, on a YOY basis throughout the past 12 months, compared to a 22.6% YOY decline in U.S. butterfat export volumes destined to all other countries.
Cheese – Export Volumes Increase 12.0% YOY to a Five Year Seasonal High Level
Sep ’19 U.S. cheese export volumes increased on a YOY basis for the second time in the past three months, finishing up 12.0% to a five year seasonal high level. Other-than-cheddar cheese export volumes increased 13.2% YOY throughout the month while cheddar cheese export volumes finished 0.7% higher. ’17-’18 annual cheese export volumes finished up 4.1% YOY, despite declining by 4.9% on a YOY basis over the final quarter of the production season. ’18-’19 annual cheese export volumes increased an additional 2.3% YOY, finishing at a five year high level.
Sep ’19 YOY increases in cheese export volumes were led by product destined to Mexico, while volumes destined to Indonesia finished most significantly lower on a YOY basis throughout the month.
Mexico and South Korea have historically been the largest importers of U.S. cheese, accounting for 45% of total U.S. cheese export volumes throughout the past five years. Combined U.S. cheese export volumes destined to Mexico and South Korea have increased 1.8% on a YOY basis throughout the past 12 months.
Whey – Total Export Volumes Remain Lower YOY on Weak Chinese Demand
Sep ’19 U.S. dry whey export volumes remained lower on a YOY basis for the 13th consecutive month, declining by 22.4% to a four year seasonal low level. ’17-’18 annual dry whey export volumes finished up 12.3% YOY to a four year high, despite declining by 3.0% on a YOY basis over the final quarter of the production season. ’18-’19 annual dry whey export volumes declined 29.8% YOY, however, finishing at a 15 year low level.
Sep ’19 whey protein concentrate (WPC) export volumes finished lower on a YOY basis for the 11th time in the past 12 months, declining by 9.0%. ’17-’18 annual WPC export volumes finished up 17.4% YOY, reaching a record annual high level for the third consecutive year, despite declining by 4.7% on a YOY basis over the final quarter of the production season. ’18-’19 annual WPC export volumes declined 29.1% YOY, however, finishing at a four year low level.
U.S. whey export volumes destined to China remained most significantly lower on a YOY basis throughout the month. China applied a 25% retaliatory tariff to a wide variety of U.S. dairy products including whey during early Jul ’18 while Chinese whey demand has also been reduced on weaker feed demand due to African swine fever. The YOY decline in Chinese imports of U.S. whey products was the smallest experienced throughout the past 15 months on a percentage basis, however.
China has historically been the largest importer of U.S. whey products, accounting for over a third of the total U.S. whey export volumes throughout the past five years. U.S. whey export volumes destined to China have declined 53.9% YOY throughout the past 12 months, while whey export volume destined to all other countries have declined by just 1.6% on a YOY basis over the same period.
NFDM/SMP – Export Volumes Reach a Record High Seasonal Level, Finish up 25.1% YOY
Sep ’19 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished higher on a YOY basis for the first time in the past eight months, increasing 25.1% to a record high seasonal level. ’17-’18 annual NFDM/SMP exports finished up 16.4% YOY, reaching a record annual high level for the second consecutive year, however ’18-’19 annual NFDM/SMP export volumes declined 9.4% YOY, despite the most recent YOY increase.
Sep ’19 YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, Vietnam and Indonesia, while export volumes destined to the Philippines finished most significantly lower on a YOY basis throughout the month.
Mexico has historically been the largest importer of U.S. NFDM/SMP, accounting for nearly half of all U.S. NFDM/SMP export volumes throughout the past five years. U.S. NFDM/SMP export volumes destined to Mexico have increased 3.0% YOY throughout the past 12 months however export volumes destined to all other countries have declined by 19.7% on a YOY basis over the same period.
Export Volumes Normalized to Production
U.S. cheese and NFDM/SMP export volumes as a percentage of production finished above previous year figures during Sep ’19 however butterfat and dry whey export volumes as a percentage of production finished lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.3% of total U.S. milk-solids production during Sep ’19 while dairy import volumes were estimated to be equivalent to approximately 3.7% of total U.S. milk-solids production. Sep ’19 net dairy trade finished 4.9% lower YOY, declining for the 11th consecutive month. The YOY decline in net dairy trade on a percentage of milk-solids production was the smallest experienced throughout the 11 month period, however.
Sep ’19 U.S. dairy exports as a percentage of milk-solids production remained lower on a YOY basis for the 11th consecutive month, finishing down 0.6%. ’17-’18 annual dairy exports as a percentage of milk-solids production finished at a record high value of 16.3%, however ’18-’19 annual figures declined 12.3% YOY, reaching a three year low level.
Sep ’19 U.S. dairy imports as a percentage of milk-solids production remained higher on a YOY basis for the 12th consecutive month, finishing up 15.6%. ’17-’18 annual dairy imports as a percentage of milk-solids production finished at a four year low value of 3.3%, however ’18-’19 annual figures rebounded by 12.7% YOY, reaching a three year high level.
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 for the second consecutive month during Sep ’19 while the U.S. finished as a net importer of butter for the 17th consecutive month.