Executive Summary

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

• U.S. butterfat export volumes finished 85.7% higher on a YOY basis throughout Jul ’21, remaining at a seven year high seasonal level. Butterfat import volumes continued to exceed export volumes for the second consecutive month, however.
• U.S. cheese export volumes reached a record high seasonal level throughout Jul ’21, finishing 26.8% above previous year levels, however dry whey export volumes declined 8.7% on a YOY basis, finishing below previous year levels for the second consecutive month. Whey protein concentrate export volumes increased 8.0% on a YOY basis, however, finishing higher for the second consecutive month.
• U.S. nonfat dry milk/skim milk powder export volumes declined 3.1% on a YOY basis throughout Jul ’21 but remained at the second highest seasonal level on record.

Additional Report Details

Butter – Exports Remain at a Seven Year High Seasonal Level, up 85.7% YOY

According to the USDA, Jul ’21 U.S. export volumes of butterfat finished 85.7% above previous year levels, remaining at a seven year high seasonal level. The YOY increase in butterfat export volumes was the eighth experienced in a row. Butterfat import volumes continued to exceed export volumes for the second consecutive month throughout Jul ’21, however.

’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 98.4% on a YOY basis throughout the first ten months of the production season, however, and are on pace to reach a seven year high level.

Canada continued to be the top destination for U.S. butterfat export volumes throughout Jul ’21, accounting for over a quarter of the total export volumes. Canada, Bahrain and South Korea combined to account for over half of all butterfat export volumes throughout the month.

Butterfat export volumes destined to Bahrain increased most significantly on a YOY basis throughout the month, followed by shipments destined to Canada and South Korea, while butterfat export volumes destined to China 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 53.4% on a YOY basis throughout the past 12 months however volumes destined to Mexico have declined by 25.7% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 138.7% throughout the past 12 months, led by increases in volumes destined to Bahrain.

Cheese – Exports Reach a Record High Seasonal Level, up 26.8% YOY

Jul ’21 U.S. cheese export volumes rebounded to a three month high level while finishing 26.8% above previous year levels, reaching a record high seasonal level for the month of July. The YOY increase in cheese export volumes was the first experienced throughout the past three months. Cheddar cheese export volumes increased 62.5% on a YOY basis throughout the month while other-than-cheddar cheese export volumes finished 22.1% 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 increased by an additional 1.7% on a YOY basis throughout the first ten months of the production season.

Mexico was the top destination for U.S. cheese export volumes throughout Jul ’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 Panama, while cheese export volumes destined to South Korea 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 declined 3.3% on a YOY basis throughout the past 12 months, however.

Whey – Dry Whey Export Volumes Remain Lower YOY, Whey Protein Concentrate Volumes Higher

U.S. dry whey export volumes declined to a 14 month low level throughout Jul ’21, finishing 8.7% below previous year levels. The YOY decline in dry whey export volumes was the second experienced in a row and the largest experienced throughout the past 20 months on a percentage basis. Dry whey export volumes had finished higher on a YOY basis over 16 consecutive months through May ’21, prior to declining on a YOY basis over the two most recent months of available data.

’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 30.0% on a YOY basis throughout the first ten months of the production season and are on pace to reach a three year high level, despite the most recent decline.

U.S. whey protein concentrate (WPC) export volumes increased 8.0% on a YOY basis during Jul ’21, finishing above previous year levels for the second consecutive month. ’19-’20 annual WPC export volumes increased 18.4% on a YOY basis while ’20-’21 YTD export volumes have increased an additional 9.8% YOY throughout the first ten months of the production season.

China continued to be the top destination for U.S. whey export volumes throughout Jul ’21, accounting for over 40% of the total export volumes.

YOY increases in whey export volumes continue to be led by product destined to China, while volumes destined to Indonesia finished most significantly lower on a YOY basis throughout the month. YOY increases in modified whey export volumes and whey protein concentrate volumes more than offset lower dry whey export volumes 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 101.8% YOY throughout the past 12 months, more than offsetting a 4.7% YOY decline in whey export volumes destined to all other countries over the same period.

NFDM/SMP – Exports Finish Lower on a YOY Basis for the First Time in Six Months, Down 3.1%

Jul ’21 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished lower on a YOY basis for the first time in the past six months, down 3.1%. Despite declining on a YOY basis, NFDM/SMP export volumes remained at the second highest seasonal level on record for the month of July. NFDM/SMP export volumes had reached record high seasonal levels over five consecutive months through Jun ’21, prior to finishing lower on a YOY basis throughout the month of July.

’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 7.6% on a YOY basis throughout the first ten months of the production season.

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

YOY declines in NFDM/SMP export volumes were led by product destined to the Philippines, followed by volumes destined to Indonesia, while export volumes destined to China and Mexico 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 over 40% of all U.S. NFDM/SMP export volumes throughout the past five years. U.S. NFDM/SMP export volumes destined to Mexico have increased 7.6% on a YOY basis throughout the past 12 months while volumes destined to all other countries have increased 8.0% YOY over the same period.

Export Volumes Normalized to Production

Overall, U.S. dairy export volumes were estimated to be equivalent to 17.9% of total U.S. milk-solids production during Jul ’21 while dairy import volumes were estimated to be equivalent to 3.1% of total U.S. milk-solids production. Jul ’21 net dairy trade was estimated to have increased 15.5% on a YOY basis, finishing higher for the 15^th time in the past 16 months.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 6.0% on a YOY basis throughout Jul ’21, remaining at a record high seasonal level for the third consecutive month. The YOY increase in dairy exports as a percentage of milk-solids production was the sixth experienced in a row.

’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 7.9% on a YOY basis throughout the first ten months of the production season and are on pace to reach a record high annual level.

Jul ’21 U.S. dairy imports as a percentage of milk-solids production are estimated to have declined 23.9% on a YOY basis, finishing lower for the seventh time in the past eight 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 9.7% on a YOY basis throughout the first ten 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 third consecutive month throughout Jul ’21 while the U.S. finished as a net importer of butter for the second consecutive month.