U.S. Dairy Exports Decline YOY for Fifth Consecutive Month…
According to USDA, the total value of all U.S. dairy exports in Dec ’14 declined YOY for the fifth consecutive month, falling 20.8%. The Aug ’14 – Dec ’14 YOY declines were the first experienced in over a year and a half, with the Dec ’14 YOY decline being the largest in over five years. The total value of all U.S. dairy exports also declined MOM, down 7.5% vs. Nov ’14 figures on a daily average basis.
Butter – Export Volumes Remain Weak, Down 61.0% YOY
Dec ’14 export volumes of butterfat increased 29.9% MOM on a daily average basis but continued to decline YOY, down 61.0% and 24.5% vs. the five year average December butterfat export volumes. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. YOY butterfat exports have declined for eight consecutive months, with total volumes down 56.0% over the period.
U.S. butterfat exports to Middle Eastern and Northern African countries were particularly weak, especially in Saudi Arabia, Morocco and Egypt as combined exports declined 89.4% YOY in Dec ’14. Exports to Saudi Arabia, Morocco and Egypt accounted for over a third of the total U.S. butterfat exports in December of last year. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. The spreads peaked in Sep ’14, with U.S. butter prices trading at an 80.6% premium to European prices and a 128.1% premium to Oceania prices. Domestic butter price premiums have declined throughout the fourth quarter of 2014, but prices have remained at a premium to international prices.
Cheese – Export Volumes Rebound Off 21 Month Low, Remain Down 11.8% YOY
Dec ’14 U.S. cheese exports rebounded 8.5% MOM on a daily average basis off of the 21 month low experienced in Nov ’14, but remained lower on a YOY basis, down 11.8%. The YOY decline was the third in a row after 16 consecutive months of YOY gains were experienced from Jun ’13 to Sep ’14. Cheddar cheese exports were particularly weak on a YOY basis, down 34.1%. Similarly to butter exports, cheese exports to Middle Eastern and North African countries were weak, with combined shipments to Saudi Arabia, Morocco and Egypt down 80.6% YOY.
Dry Whey – YOY Exports Decline for Seventh Consecutive Month, Finish Down 9.4%
Dec ’14 export volumes of dry whey declined 9.4% YOY and 4.7% MOM on a daily average basis. YOY dry whey export volumes have declined for seven consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. The 9.4% YOY decline was less than the 12.6% average YOY decline over the period due to a lower than average November – December seasonal decline in export volumes. Dec ’14 export volumes declined by 1.7 million lbs on a daily average basis, considerably less than the five year average November – December seasonal decline of 4.6 million lbs.
NFDM/SMP – YOY Exports Decline for Fifth Consecutive Month, Finish Down 22.8% YOY
Dec ’14 export volumes of NFDM/SMP declined 22.8% YOY and 22.5% MOM on a daily average basis. NFDM/SMP exports have declined for five consecutive months after increasing for 15 of the 16 months leading up to Aug ’14. Total volumes have declined by 18.7% over the period. YOY declines persisted despite export volumes to Mexico remaining strong, up 12.8% over the five month period. U.S. NFDM/SMP exports to Mexico accounted for nearly half of all Dec ’14 shipments. NFDM/SMP exports to China have weakened considerably, down 57.7% from Sep ’14 – Dec ’14 and down 72.1% over the past three months.
See the chart below for a summary of key U.S. dairy product exports as a percentage of production in Dec ’14 vs. a year ago.
Butter – Export Volumes Remain Weak, Down 61.0% YOY
Dec ’14 export volumes of butterfat increased 29.9% MOM on a daily average basis but continued to decline YOY, down 61.0% and 24.5% vs. the five year average December butterfat export volumes. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. YOY butterfat exports have declined for eight consecutive months, with total volumes down 56.0% over the period.
U.S. butterfat exports to Middle Eastern and Northern African countries were particularly weak, especially in Saudi Arabia, Morocco and Egypt as combined exports declined 89.4% YOY in Dec ’14. Exports to Saudi Arabia, Morocco and Egypt accounted for over a third of the total U.S. butterfat exports in December of last year. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. The spreads peaked in Sep ’14, with U.S. butter prices trading at an 80.6% premium to European prices and a 128.1% premium to Oceania prices. Domestic butter price premiums have declined throughout the fourth quarter of 2014, but prices have remained at a premium to international prices.
Cheese – Export Volumes Rebound Off 21 Month Low, Remain Down 11.8% YOY
Dec ’14 U.S. cheese exports rebounded 8.5% MOM on a daily average basis off of the 21 month low experienced in Nov ’14, but remained lower on a YOY basis, down 11.8%. The YOY decline was the third in a row after 16 consecutive months of YOY gains were experienced from Jun ’13 to Sep ’14. Cheddar cheese exports were particularly weak on a YOY basis, down 34.1%. Similarly to butter exports, cheese exports to Middle Eastern and North African countries were weak, with combined shipments to Saudi Arabia, Morocco and Egypt down 80.6% YOY.
Dry Whey – YOY Exports Decline for Seventh Consecutive Month, Finish Down 9.4%
Dec ’14 export volumes of dry whey declined 9.4% YOY and 4.7% MOM on a daily average basis. YOY dry whey export volumes have declined for seven consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. The 9.4% YOY decline was less than the 12.6% average YOY decline over the period due to a lower than average November – December seasonal decline in export volumes. Dec ’14 export volumes declined by 1.7 million lbs on a daily average basis, considerably less than the five year average November – December seasonal decline of 4.6 million lbs.
NFDM/SMP – YOY Exports Decline for Fifth Consecutive Month, Finish Down 22.8% YOY
Dec ’14 export volumes of NFDM/SMP declined 22.8% YOY and 22.5% MOM on a daily average basis. NFDM/SMP exports have declined for five consecutive months after increasing for 15 of the 16 months leading up to Aug ’14. Total volumes have declined by 18.7% over the period. YOY declines persisted despite export volumes to Mexico remaining strong, up 12.8% over the five month period. U.S. NFDM/SMP exports to Mexico accounted for nearly half of all Dec ’14 shipments. NFDM/SMP exports to China have weakened considerably, down 57.7% from Sep ’14 – Dec ’14 and down 72.1% over the past three months.
See the chart below for a summary of key U.S. dairy product exports as a percentage of production in Dec ’14 vs. a year ago.