Executive Summary

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

• U.S. butterfat export volumes finished 78.8% higher on a YOY basis throughout Jan ’21, reaching a seven year high seasonal level. Net butter trade finished at a positive level for the first time in the past 33 months throughout Jan ’21.
• U.S. cheese export volumes declined 9.9% on a YOY basis throughout Jan ’21, reaching a four year low seasonal level. U.S. whey protein concentrate export volumes declined 0.4% on a YOY basis throughout Jan ’21, finishing lower for the first time in the past seven months, however dry whey export volumes increased 34.4% on a YOY basis throughout the month, remaining at a three year high seasonal level.
• U.S. nonfat dry milk/skim milk powder export volumes declined 9.6% on a YOY basis throughout Jan ’21, finishing lower for the fourth time in the past five months.

Additional Report Details

Butter – Exports Reach a Seven Year High Seasonal Level, Net Trade Finishes Positive

According to the USDA, Jan ’21 U.S. export volumes of butterfat declined from the two year high level experienced throughout the previous month but remained 78.8% higher on a YOY basis, reaching a seven year high seasonal level. The YOY increase in butterfat export volumes was the sixth experienced throughout the past eight months. Butterfat export volumes exceeded import volumes for the first time in the past 33 months throughout Jan ’21.

’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 50.7% on a YOY basis throughout the first third of the production season, however.

Canada was the top destination for U.S. butterfat export volumes throughout Jan ’21, accounting for nearly a third of the total export volumes. Canada, Egypt and Bahrain combined to account for over half of all butterfat export volumes throughout the month.

Butterfat export volumes destined to Egypt increased most significantly on a YOY basis throughout the month, followed by shipments destined to Bahrain, 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 nearly 60% 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 1.5% and 13.9%, respectively, on a YOY basis throughout the past 12 months, compared to a 37.6% YOY increase in U.S. butterfat export volumes destined to all other countries.

Cheese – Export Volumes Finish at a Four Year Low Seasonal Level, Down 9.9% YOY

U.S. cheese export volumes declined 9.9% on a YOY basis throughout Jan ’21, finishing at a four year low seasonal level. The YOY decline in cheese export volumes was the fourth experienced in a row. Other-than-cheddar cheese export volumes declined 11.3% on a YOY basis throughout the month, more than offsetting a 1.9% YOY increase in cheddar cheese export volumes.

’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 10.1% on a YOY basis throughout the first third of the production season, however, and are on pace to reach a five year low level.

South Korea, Mexico and Japan were the top destinations for U.S. cheese export volumes throughout Jan ’21, combining to account for over half of the total export volumes.

YOY declines in cheese export volumes were led by product destined to Mexico, while cheese export volumes destined to South Korea finished most significantly higher. A 49.0% YOY decline in cheese exports destined to Mexico more than offset a 7.4% YOY increase in volumes destined to other countries throughout the month.

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 1.9% on a YOY basis throughout the past 12 months.

Whey – Dry Whey Exports Remain at a Three Year High Seasonal Level, WPC Exports Slightly Lower

U.S. dry whey export volumes increased on a YOY basis for the 12^th consecutive month during Jan ’21, finishing up 34.4% and remaining at a three year high seasonal level. Dry whey export volumes had finished lower on a YOY basis over 17 consecutive months through Jan ’20, prior to the 12 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 57.6% on a YOY basis throughout the first third of the production season and are on pace to reach a three year high level.

U.S. whey protein concentrate (WPC) export volumes declined 0.4% on a YOY basis during Jan ’21, finishing lower for the first time in the past seven months. ’19-’20 annual WPC export volumes increased 18.4% on a YOY basis while ’20-’21 YTD export volumes have increased an additional 14.4% YOY throughout the first third of the production season, despite the most recent decline.

China was the top destination for U.S. whey export volumes throughout Jan ’21, accounting for 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 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 increased 119.8% YOY throughout the past 12 months, more than offsetting a 5.5% 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 Decline YOY for the Fourth Time in Five Months, Finish Down 9.6%

Jan ’21 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) declined 9.6% on a YOY basis, finishing lower for the fourth time in the past five months. NFDM/SMP export volumes had finished higher on a YOY basis over 11 of 12 months through Aug ’20, prior to declining over four of the most recent five months of available data. Despite declining on a YOY basis, Jan ’21 NFDM/SMP export volumes remained at the second highest seasonal level on record.

’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 declined by 5.8% on a YOY basis throughout the first third of the production season, however.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Jan ’21, accounting for nearly two fifths of the total export volumes. Mexico and the Philippines combined to account for over half of the total Jan ’21 U.S. NFDM/SMP export volumes.

YOY declines in NFDM/SMP export volumes were led by product destined to Indonesia, followed by volumes destined to New Zealand and Japan, while export volumes destined to Vietnam and China finished most significantly higher 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 12.6% on a YOY basis throughout the past 12 months while volumes destined to all other countries have increased 31.6% YOY over the same period.

Export Volumes Normalized to Production

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

Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 14.9% of total U.S. milk-solids production during Jan ’21 while dairy import volumes were estimated to be equivalent to approximately 2.5% of total U.S. milk-solids production. Jan ’21 net dairy trade was estimated to have increased 6.8% on a YOY basis, finishing higher for the ninth time in the past ten months.

U.S. dairy exports as a percentage of milk-solids production is estimated to have declined on a YOY basis for the second time in the past three months, finishing down 1.3%. ’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 2.0% on a YOY basis throughout the first third of the production season.

Jan ’21 U.S. dairy imports as a percentage of milk-solids production declined 28.0% on a YOY basis, finishing lower for the fourth time in the past five 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 6.4% on a YOY basis throughout the first third 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 sixth consecutive month throughout Jan ’21 while the U.S. finished as a slight net exporter of butter for the first time in the past 33 months.