Executive Summary

U.S. dairy export figures provided by the USDA were recently updated with values spanning through Mar ’21. Highlights from the updated report include:

• U.S. butterfat export volumes finished 140.0% higher on a YOY basis throughout Mar ’21, reaching a seven year high seasonal level. Butterfat imports exceeded export volumes for the first time in the past three months, however.
• U.S. cheese export volumes increased 10.7% on a YOY basis throughout Mar ’21, reaching a record high seasonal level. U.S. dry whey export volumes increased 37.7% on a YOY basis throughout Mar ’21, reaching a ten year high seasonal level, while whey protein concentrate export volumes increased 37.0% YOY, reaching a three year high seasonal level.
• U.S. nonfat dry milk/skim milk powder export volumes increased 38.8% on a YOY basis throughout Mar ’21, reaching a record high monthly level for the second consecutive month.

Additional Report Details

Butter – Exports Reach a Seven Year High Seasonal Level However Net Trade Finishes Negative

According to the USDA, Mar ’21 U.S. export volumes of butterfat increased to a 28 month high level, finishing 140.0% higher on a YOY basis and reaching a seven year high seasonal level. The YOY increase in butterfat export volumes was the eighth experienced throughout the past ten months and the largest experienced throughout the past 30 months on a percentage basis. Butterfat import volumes exceeded export volumes for the first time in the past three months throughout Mar ’21, however. Butterfat import volumes had exceeded export volumes over 32 consecutive months through the end of the 2020 calendar year, prior to net trade finishing higher on a YOY basis throughout the months of January and February.

’19-’20 annual butterfat export volumes declined 24.1% on a YOY basis, reaching a four year low level. ’20-’21 YTD butterfat export volumes have rebounded by 77.5% on a YOY basis throughout the first half of the production season, however.

Canada continued to be the top destination for U.S. butterfat export volumes throughout Mar ’21. Canada, Saudi Arabia, the EU-27+UK, Egypt and Bahrain combined to account for over three quarters of all butterfat export volumes throughout the month.

Butterfat export volumes destined to Saudi Arabia increased most significantly on a YOY basis throughout the month, followed by shipments destined to the EU-27+UK and Egypt, while butterfat export volumes destined to Mexico finished most significantly lower.

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 have increased 7.6% on a YOY basis throughout the past 12 months however volumes destined to Mexico have declined by 15.4% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 105.7% throughout the past 12 months, led by an increase in volumes destined to Saudi Arabia.

Cheese – Export Volumes Reach a Record High Seasonal Level, Finish up 10.7% YOY

U.S. cheese export volumes increased 10.7% on a YOY basis throughout Mar ’21, reaching a record high seasonal level. The YOY increase in cheese export volumes was the second experienced in a row. Cheddar cheese export volumes increased 7.5% on a YOY basis throughout the month while other-than-cheddar cheese export volumes finished 11.1% higher YOY.

’19-’20 annual cheese export volumes increased 2.4% on a YOY basis, reaching a six year high level. ’20-’21 YTD cheese export volumes have declined by 4.1% on a YOY basis throughout the first half of the production season, however, despite the most recent increase, and are on pace to reach a four year low level.

Mexico was the top destination for U.S. cheese export volumes throughout Mar ’21, accounting for over a quarter of the total export volumes. Mexico, South Korea and Japan combined to account for over half of all cheese export volumes throughout the month.

YOY increases in cheese export volumes were led by product destined to Japan, followed by volumes destined to Mexico and Chile, while cheese export volumes destined to Indonesia and Singapore finished most significantly lower.

Mexico and South Korea have historically been the largest importers of U.S. cheese, accounting for nearly 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 3.3% on a YOY basis throughout the past 12 months.

Whey – Dry Whey and Whey Protein Concentrate Export Volumes Remain Higher YOY

U.S. dry whey export volumes increased on a YOY basis for the 14^th consecutive month during Mar ’21, finishing up 37.7% and reaching a ten year high seasonal level. Dry whey export volumes had finished lower on a YOY basis over 17 consecutive months through Mar ’20, prior to the 14 most recently experienced YOY increases.

’19-’20 annual dry whey export volumes rebounded 15.6% on a YOY basis from the 15 year low level experienced throughout the previous production season. ’20-’21 YTD dry whey export volumes have increased by an additional 47.2% on a YOY basis throughout the first half of the production season and are on pace to reach a three year high level.

U.S. whey protein concentrate (WPC) export volumes increased 37.0% on a YOY basis during Mar ’21, reaching a three year high seasonal level. The YOY increase in WPC export volumes was the eighth experienced throughout the past nine months. ’19-’20 annual WPC export volumes increased 18.4% on a YOY basis while ’20-’21 YTD export volumes have increased an additional 20.5% YOY throughout the first half of the production season.

China was the top destination for U.S. whey export volumes throughout Mar ’21, accounting for nearly half of the total export volumes.

YOY increases in whey export volumes continue to be led by product destined to China, while volumes destined to New Zealand finished most significantly lower on a YOY basis throughout the month.

China has historically been the largest importer of U.S. whey products, accounting for nearly 40% of the total U.S. whey export volumes throughout the past five years. U.S. whey export volumes destined to China have increased 140.9% YOY throughout the past 12 months, more than offsetting a 9.1% YOY decline in whey export volumes destined to all other countries over the same period. Chinese whey demand has rebounded of late from reduced levels stemming from weaker feed demand due to African swine fever.

NFDM/SMP – Export Volumes Reach a Record High Monthly Level, Finish up 38.8% YOY

Mar ’21 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) increased 38.8% on a YOY basis, reaching a record high monthly level for the second consecutive month. The YOY increase in NFDM/SMP export volumes was the second experienced in a row and the largest experienced throughout the past eight months on a percentage basis.

’19-’20 annual NFDM/SMP export volumes increased 25.4% on a YOY basis, reaching a record high level. ’20-’21 YTD NFDM/SMP export volumes have increased by an additional 7.3% on a YOY basis throughout the first half of the production season.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Mar ’21, accounting for nearly one third of the total export volumes. Mexico, Indonesia and Vietnam combined to account for over half of all NFDM/SMP export volumes throughout the month.

YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to China and the Philippines, while export volumes destined to Ghana 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 45% of all U.S. NFDM/SMP export volumes throughout the past five years. U.S. NFDM/SMP export volumes destined to Mexico have declined 5.2% on a YOY basis throughout the past 12 months while volumes destined to all other countries have increased 35.3% YOY over the same period.

Export Volumes Normalized to Production

U.S. butterfat, cheese, dry whey and NFDM/SMP export volumes as a percentage of production all finished above previous year figures during Mar ’21.

Overall, U.S. dairy export volumes were estimated to be equivalent to a record high 19.5% of total U.S. milk-solids production during Mar ’21 while dairy import volumes were estimated to be equivalent to 3.1% of total U.S. milk-solids production. Mar ’21 net dairy trade was estimated to have increased 36.3% on a YOY basis, finishing higher for the 11^th time in the past 12 months.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 27.0% on a YOY basis throughout Mar ’21, reaching a record high monthly level. The YOY increase in dairy exports as a percentage of milk-solids production was the largest experienced throughout the past 35 months. ’19-’20 annual exports as a percentage of milk-solids production finished 11.8% above previous year levels but remained below the ’17-’18 record high figures. ’20-’21 YTD exports as a percentage of milk-solids production have increased by an additional 7.1% on a YOY basis throughout the first half of the production season.

Mar ’21 U.S. dairy imports as a percentage of milk-solids production are estimated to have declined 6.1% on a YOY basis, finishing lower for the sixth time in the past seven months. ’19-’20 annual imports as a percentage of milk-solids production finished 0.6% above previous year levels however ’20-’21 YTD imports as a percentage of milk-solids production have declined by 11.0% on a YOY basis throughout the first half of the 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 for the seventh time in the past eight months throughout Mar ’21 while the U.S. finished as a net importer of butter for the first time in the past three months.