U.S. Dairy Exports Update – Feb ’20
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Dec ’19. Highlights from the updated report include:
Butterfat export volumes destined to Saudi Arabia declined most significantly on a YOY basis throughout the month, while butterfat export volumes destined to Mexico finished most significantly higher.
Canada and Mexico have historically been the largest importers of U.S. butterfat, accounting for over half of the total U.S. export volumes experienced throughout the past five years. U.S. butterfat export volumes destined to Canada and Mexico have declined by 32.6% and 75.3%, respectively, on a YOY basis throughout the past 12 months, compared to a 24.9% YOY decline in U.S. butterfat export volumes destined to all other countries.
Cheese – Export Volumes Decline 9.3% YOY to a Four Year Seasonal Low Level
Dec ’19 U.S. cheese export volumes declined on a YOY basis for the first time in the past four months, finishing down 9.3% to a four year seasonal low level. Cheddar cheese export volumes declined 2.4% YOY throughout the month while other-than-cheddar cheese export volumes finished 10.3% lower.
’18-’19 annual cheese export volumes increased 2.3% on a YOY basis, reaching a five year high level. ’19-’20 YTD cheese export volumes have increased an additional 0.9% on a YOY basis throughout the first quarter of the production season, despite the most recent YOY decline.
Dec ’19 YOY declines in cheese export volumes were led by product destined to South Korea, followed by volumes destined to Saudi Arabia and China, while volumes destined to Mexico finished most significantly higher 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 2.5% on a YOY basis throughout the past 12 months.
Whey – Dry Whey Exports Remain Lower YOY, Whey Protein Concentrate Volumes Remain Higher
Dec ’19 U.S. dry whey export volumes remained lower on a YOY basis for the 16th consecutive month, declining by 6.3% and reaching a 16 year seasonal low level. The YOY decline in dry whey export volumes was the smallest experienced throughout the 16 month period, however.
’18-’19 annual dry whey export volumes declined 29.8% from the four year high level experienced throughout the previous production season, finishing at a 15 year low level. ’19-’20 YTD dry whey export volumes have declined by an additional 24.9% on a YOY basis throughout the first quarter of the production season and are on pace to reach a 16 year low level.
Dec ’19 whey protein concentrate (WPC) export volumes increased 63.2% on a YOY basis, finishing higher for the third consecutive month. WPC export volumes had finished lower on a YOY basis over 11 of 12 months prior to increasing throughout the past three months.
’18-’19 annual WPC export volumes declined 29.1% from the record high level experienced throughout the previous production season, finishing at a four year low level. ’19-’20 YTD WPC export volumes have rebounded by 28.0% on a YOY basis throughout the first quarter of the production season, however.
Dec ’19 YOY increases in whey export volumes were led by product destined to Indonesia, followed by volumes destined to Mexico and Thailand, while volumes destined to China finished 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.
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 50.6% YOY throughout the past 12 months, while whey export volume destined to all other countries have declined by just 0.6% on a YOY basis over the same period.
NFDM/SMP – Export Volumes Increase 37.4% YOY, Reach a Record High Seasonal Level
Dec ’19 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished higher on a YOY basis for the fourth consecutive month, increasing 37.4% and reaching a record high seasonal level.
’18-’19 annual NFDM/SMP exports declined 9.4% from the record high level experienced throughout the previous production season but remained at the second highest annual figure on record. ’19-’20 YTD NFDM/SMP export volumes have rebounded by 30.7% on a YOY basis throughout the first quarter of the production season and are on pace to reach a record high level.
Dec ’19 YOY increases in NFDM/SMP export volumes were led by product destined to Indonesia, followed by volumes destined to Vietnam, while export volumes destined to Mexico and 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 declined 5.0% on a YOY basis throughout the past 12 months, more than offsetting a 1.7% YOY increase in export volumes destined to all other countries,
Export Volumes Normalized to Production
U.S. NFDM/SMP export volumes as a percentage of production finished above previous year figures during Dec ’19 however butterfat, cheese and dry whey export volumes as a percentage of production remained lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.2% of total U.S. milk-solids production during Dec ’19 while dairy import volumes were estimated to be equivalent to approximately 3.6% of total U.S. milk-solids production. Dec ’19 net dairy trade was estimated to increase 25.7% on a YOY basis, finishing higher for the second consecutive month. Net dairy trade had finished lower on a YOY basis over 12 consecutive months prior to increasing YOY over the two most recent months.
Dec ’19 U.S. dairy exports as a percentage of milk-solids production increased on a YOY basis for the second consecutive month, finishing up 18.8%. ’18-’19 annual dairy exports as a percentage of milk-solids production declined 12.3% from the record high level experienced throughout the previous production season, finishing at a three year low, however ’19-’20 YTD figures have rebounded by 9.7% on a YOY basis.
Dec ’19 U.S. dairy imports as a percentage of milk-solids production increased on a YOY basis for the 14th time in the past 15 months, finishing up 0.8%. ’18-’19 annual dairy imports as a percentage of milk-solids production rebounded 12.4% from the four year low level experienced throughout the previous production season, reaching a three year high, while ’19-’20 YTD figures have increased on additional 1.4% on a YOY basis.
Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net cheese trade volumes exceeded net dry whey trade volumes for the second consecutive month during Dec ’19 while the U.S. finished as a net importer of butter for the 20th consecutive month.
- Dec ’19 U.S. butterfat export volumes declined on a YOY basis for the tenth consecutive month, finishing down 12.3% to a 13 year seasonal low level, while Dec ’19 U.S. cheese export volumes declined 9.3% on a YOY basis throughout the month, finishing at a four year seasonal low level.
- Dec ’19 U.S. dry whey export volumes declined 6.3% on a YOY basis, reaching a 16 year seasonal low level, however whey protein concentrate export volumes increased 63.2% YOY, finishing higher for the third consecutive month. Dec ’19 U.S. nonfat dry milk/skim milk powder export volumes increased on a YOY basis for the fourth consecutive month, finishing up 37.4% and reaching a record high seasonal level.
- Net dairy trade on a percentage of total U.S. milk-solids production basis increased on a YOY basis for the second consecutive month during Dec ’19, finishing up 25.7%.
Butterfat export volumes destined to Saudi Arabia declined most significantly on a YOY basis throughout the month, while butterfat export volumes destined to Mexico finished most significantly higher.
Canada and Mexico have historically been the largest importers of U.S. butterfat, accounting for over half of the total U.S. export volumes experienced throughout the past five years. U.S. butterfat export volumes destined to Canada and Mexico have declined by 32.6% and 75.3%, respectively, on a YOY basis throughout the past 12 months, compared to a 24.9% YOY decline in U.S. butterfat export volumes destined to all other countries.
Cheese – Export Volumes Decline 9.3% YOY to a Four Year Seasonal Low Level
Dec ’19 U.S. cheese export volumes declined on a YOY basis for the first time in the past four months, finishing down 9.3% to a four year seasonal low level. Cheddar cheese export volumes declined 2.4% YOY throughout the month while other-than-cheddar cheese export volumes finished 10.3% lower.
’18-’19 annual cheese export volumes increased 2.3% on a YOY basis, reaching a five year high level. ’19-’20 YTD cheese export volumes have increased an additional 0.9% on a YOY basis throughout the first quarter of the production season, despite the most recent YOY decline.
Dec ’19 YOY declines in cheese export volumes were led by product destined to South Korea, followed by volumes destined to Saudi Arabia and China, while volumes destined to Mexico finished most significantly higher 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 2.5% on a YOY basis throughout the past 12 months.
Whey – Dry Whey Exports Remain Lower YOY, Whey Protein Concentrate Volumes Remain Higher
Dec ’19 U.S. dry whey export volumes remained lower on a YOY basis for the 16th consecutive month, declining by 6.3% and reaching a 16 year seasonal low level. The YOY decline in dry whey export volumes was the smallest experienced throughout the 16 month period, however.
’18-’19 annual dry whey export volumes declined 29.8% from the four year high level experienced throughout the previous production season, finishing at a 15 year low level. ’19-’20 YTD dry whey export volumes have declined by an additional 24.9% on a YOY basis throughout the first quarter of the production season and are on pace to reach a 16 year low level.
Dec ’19 whey protein concentrate (WPC) export volumes increased 63.2% on a YOY basis, finishing higher for the third consecutive month. WPC export volumes had finished lower on a YOY basis over 11 of 12 months prior to increasing throughout the past three months.
’18-’19 annual WPC export volumes declined 29.1% from the record high level experienced throughout the previous production season, finishing at a four year low level. ’19-’20 YTD WPC export volumes have rebounded by 28.0% on a YOY basis throughout the first quarter of the production season, however.
Dec ’19 YOY increases in whey export volumes were led by product destined to Indonesia, followed by volumes destined to Mexico and Thailand, while volumes destined to China finished 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.
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 50.6% YOY throughout the past 12 months, while whey export volume destined to all other countries have declined by just 0.6% on a YOY basis over the same period.
NFDM/SMP – Export Volumes Increase 37.4% YOY, Reach a Record High Seasonal Level
Dec ’19 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished higher on a YOY basis for the fourth consecutive month, increasing 37.4% and reaching a record high seasonal level.
’18-’19 annual NFDM/SMP exports declined 9.4% from the record high level experienced throughout the previous production season but remained at the second highest annual figure on record. ’19-’20 YTD NFDM/SMP export volumes have rebounded by 30.7% on a YOY basis throughout the first quarter of the production season and are on pace to reach a record high level.
Dec ’19 YOY increases in NFDM/SMP export volumes were led by product destined to Indonesia, followed by volumes destined to Vietnam, while export volumes destined to Mexico and 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 declined 5.0% on a YOY basis throughout the past 12 months, more than offsetting a 1.7% YOY increase in export volumes destined to all other countries,
Export Volumes Normalized to Production
U.S. NFDM/SMP export volumes as a percentage of production finished above previous year figures during Dec ’19 however butterfat, cheese and dry whey export volumes as a percentage of production remained lower on a YOY basis.
Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.2% of total U.S. milk-solids production during Dec ’19 while dairy import volumes were estimated to be equivalent to approximately 3.6% of total U.S. milk-solids production. Dec ’19 net dairy trade was estimated to increase 25.7% on a YOY basis, finishing higher for the second consecutive month. Net dairy trade had finished lower on a YOY basis over 12 consecutive months prior to increasing YOY over the two most recent months.
Dec ’19 U.S. dairy exports as a percentage of milk-solids production increased on a YOY basis for the second consecutive month, finishing up 18.8%. ’18-’19 annual dairy exports as a percentage of milk-solids production declined 12.3% from the record high level experienced throughout the previous production season, finishing at a three year low, however ’19-’20 YTD figures have rebounded by 9.7% on a YOY basis.
Dec ’19 U.S. dairy imports as a percentage of milk-solids production increased on a YOY basis for the 14th time in the past 15 months, finishing up 0.8%. ’18-’19 annual dairy imports as a percentage of milk-solids production rebounded 12.4% from the four year low level experienced throughout the previous production season, reaching a three year high, while ’19-’20 YTD figures have increased on additional 1.4% on a YOY basis.
Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net cheese trade volumes exceeded net dry whey trade volumes for the second consecutive month during Dec ’19 while the U.S. finished as a net importer of butter for the 20th consecutive month.