Executive Summary

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

• U.S. butterfat export volumes finished 117.3% higher on a YOY basis throughout Feb ’21, reaching a five year high seasonal level. Net butter trade reached a six year high level throughout the month.
• U.S. cheese export volumes increased 1.1% on a YOY basis throughout Feb ’21, finishing higher for the first time in the past five months, as cheddar cheese export volumes increased 28.2% YOY. U.S. dry whey export volumes increased 26.3% on a YOY basis throughout Feb ’21, reaching a three year high seasonal level, while whey protein concentrate export volumes increased 30.3% YOY, reaching a record high seasonal level.
• U.S. nonfat dry milk/skim milk powder export volumes increased 36.1% on a YOY basis throughout Feb ’21, reaching a new record high monthly level.

Additional Report Details

Butter – Exports Reach a Five Year High Seasonal Level, Net Trade Remains Positive

According to the USDA, Feb ’21 U.S. export volumes of butterfat increased to a 27 month high level, finishing 117.3% higher on a YOY basis and reaching a five year high seasonal level. The YOY increase in butterfat export volumes was the seventh experienced throughout the past nine months. Butterfat export volumes exceeded import volumes for the second consecutive month throughout Feb ’21. 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 first two months of 2021. Butter net trade reached a six year high level throughout the month.

’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 64.8% on a YOY basis throughout the first five months of the production season, however.

Canada was the top destination for U.S. butterfat export volumes throughout Feb ’21, accounting for over a quarter of the total export volumes. Canada, Egypt, Saudi Arabia and Mexico combined to account for over three quarters 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 Saudi Arabia and Canada, while butterfat export volumes destined to Israel 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 have increased 4.2% on a YOY basis throughout the past 12 months however volumes destined to Mexico have declined by 16.4% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 72.6% throughout the past 12 months, led by an increase in volumes destined to Saudi Arabia.

Cheese – Export Volumes Increase YOY for the First Time in the Past Five Months, Finish up 1.1%

U.S. cheese export volumes increased 1.1% on a YOY basis throughout Feb ’21, finishing higher on a YOY basis for the first time in the past five months. Cheddar cheese export volumes increased 28.2% on a YOY basis throughout the month, more than offsetting a 1.8% YOY decline in other-than-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 7.6% on a YOY basis throughout the first five months 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 Feb ’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 the United Arab Emirates, followed by volumes destined to Saudi Arabia, while cheese export volumes destined to Indonesia and Mexico 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 1.9% 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 13^th consecutive month during Feb ’21, finishing up 26.3% 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 Feb ’20, prior to the 13 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 49.8% on a YOY basis throughout the first five months of the production season and are on pace to reach a three year high level.

U.S. whey protein concentrate (WPC) export volumes increased 30.3% on a YOY basis during Feb ’21, reaching a record high seasonal level. The YOY increase in WPC export volumes was the seventh experienced throughout the past eight months. ’19-’20 annual WPC export volumes increased 18.4% on a YOY basis while ’20-’21 YTD export volumes have increased an additional 17.6% YOY throughout the first five months of the production season.

China was the top destination for U.S. whey export volumes throughout Feb ’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 the Philippines 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 132.9% YOY throughout the past 12 months, more than offsetting a 7.7% 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 36.1% YOY

Feb ’21 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) increased 36.1% on a YOY basis, reaching a new record high monthly level. The YOY increase in NFDM/SMP export volumes was the first experienced throughout the past four months.

’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 1.5% on a YOY basis throughout the first five months of the production season.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Feb ’21, accounting for over one third of the total export volumes. Mexico, the Philippines 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 Vietnam and the Philippines, while export volumes destined to Columbia and Japan 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 8.5% on a YOY basis throughout the past 12 months while volumes destined to all other countries have increased 33.1% YOY over the same period.

Export Volumes Normalized to Production

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

Overall, U.S. dairy export volumes were estimated to be equivalent to approximately 15.9% of total U.S. milk-solids production during Feb ’21 while dairy import volumes were estimated to be equivalent to approximately 2.3% of total U.S. milk-solids production. Feb ’21 net dairy trade was estimated to have increased 21.6% on a YOY basis, finishing higher for the tenth time in the past 11 months.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 8.9% on a YOY basis throughout Feb ’21, reaching a three year high seasonal level. The YOY increase in dairy exports as a percentage of milk-solids production was the largest experienced throughout the past four 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 3.2% on a YOY basis throughout the first five months of the production season.

Feb ’21 U.S. dairy imports as a percentage of milk-solids production are estimated to have declined 33.2% on a YOY basis, finishing lower for the fifth time in the past six months and reaching a record low seasonal level. ’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 11.9% on a YOY basis throughout the first five months 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 cheese trade volumes exceeded net dry whey trade volumes for the first time in the past seven months throughout Feb ’21 while the U.S. finished as a slight net exporter of butter for the second consecutive month.