Executive Summary

U.S. dairy export figures provided by the USDA were recently updated with values spanning through Jan ’22. Highlights from the updated report include:

• U.S. butterfat export volumes finished 53.4% higher on a YOY basis throughout Jan ’22, remaining at an eight year high seasonal level. The U.S. finished as a net exporter of butterfat for the first time in the past four months.
• U.S. cheese export volumes finished 16.7% higher on a YOY basis throughout Jan ’22, remaining at an eight year high seasonal level. Dry whey and whey protein concentrate export volumes each remained below previous year levels, however, on reduced volumes destined to China.
• U.S. nonfat dry milk/skim milk powder export volumes finished 5.5% below previous year levels throughout Jan ’22, remaining at a three year low seasonal level.

Additional Report Details

Butter – Exports Remain at an Eight Year High Seasonal Level, up 53.4% YOY

According to the USDA, Jan ’22 U.S. export volumes of butterfat rebounded to a three month high level while finishing 53.4% above previous year levels, remaining at an eight year high seasonal level for the sixth consecutive month. The YOY increase in butterfat export volumes was the 14^th experienced in a row. The U.S. finished as a net exporter of butterfat for the first time in the past four months throughout Jan ’22.

’20-’21 annual butterfat export volumes finished 113.1% above the four year low level experienced throughout the previous production season, reaching a seven year high annual level. ’21-’22 YTD butterfat export volumes have increased by an additional 78.6% on a YOY basis throughout the first third of the production season.

Canada continued to be the top destination for U.S. butterfat export volumes throughout Jan ’22, accounting for over a third of the total export volumes. Canada and Mexico combined to account for over half of all butterfat export volumes throughout the month.

Butterfat export volumes destined to Mexico increased most significantly on a YOY basis throughout the month, followed by shipments destined to Canada, while butterfat export volumes destined to Egypt 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 90.0% on a YOY basis throughout the past 12 months while volumes destined to Mexico increased by 19.4% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 155.1% throughout the past 12 months, led by increases in volumes destined to Bahrain.

Cheese – Exports Remain at an Eight Year High Seasonal Level, up 16.7% YOY

Jan ’22 U.S. cheese export volumes declined to a 12 month low level but remained 16.7% above previous year levels, reaching an eight year high seasonal level for the second consecutive month. The YOY increase in cheese export volumes was the seventh experienced in a row but the smallest experienced throughout the seven month period. Cheddar cheese export volumes increased 72.8% on a YOY basis throughout the month, more than offsetting a 15.3% YOY decline in other-than-cheddar cheese export volumes.

’20-’21 annual cheese export volumes finished 4.6% above the previous year levels, reaching a record high annual level for the first time in the past seven years. ’21-’22 YTD cheese export volumes have increased by an additional 29.9% on a YOY basis throughout the first third of the production season.

Mexico was the top destination for U.S. cheese export volumes throughout Jan ’22, accounting for over a quarter of the total export volumes. Mexico, South Korea and Japan combined to account for half of all cheese export volumes throughout the month.

YOY increases in cheese export volumes were led by product destined to Mexico, followed by volumes destined to Australia and Indonesia, 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 increased 11.0% on a YOY basis throughout the past 12 months.

Whey – Dry Whey & Whey Protein Concentrate Export Volumes Both Lower YOY

U.S. dry whey export volumes declined to a 27 month low level throughout Jan ’22, finishing 33.8% below previous year levels and reaching a 14 year low seasonal level. The YOY decline in dry whey export volumes was the seventh experienced throughout the past eight months and the largest experienced throughout the past 27 months on a percentage basis.

’20-’21 annual dry whey export volumes finished 21.8% above previous year levels, reaching a three year high annual level. ’21-’22 YTD dry whey export volumes have declined by 16.7% on a YOY basis throughout the first third of the production season, however.

Jan ’22 U.S. whey protein concentrate (WPC) export volumes rebounded from the 35 month low level experienced throughout the previous month but finished 10.0% below previous year levels, remaining at a three year low seasonal level for the fourth consecutive month. The YOY decline in WPC export volumes was the fifth experienced in a row.

’20-’21 annual WPC export volumes finished 6.2% above previous year levels, reaching a three year high annual level. ’21-’22 YTD WPC export volumes have declined by 24.3% on a YOY basis throughout the first third of the production season, however.

China continued to be the top destination for U.S. whey export volumes throughout Jan ’22, accounting for over a third of the total export volumes. China, Canada and Mexico combined to account for over half of all whey export volumes throughout the month.

YOY declines in whey export volumes were led by product destined to China, while volumes destined to Canada finished most significantly higher on a YOY basis throughout the month. A 39.7% YOY decline in whey export volumes destined to China more than offset a 9.0% YOY increase in volumes destined to all other countries 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 12.9% YOY throughout the past 12 months, while whey export volumes destined to all other countries have increased by 3.4% on a YOY basis over the same period.

NFDM/SMP – Exports Remain at a Three Year Low Seasonal Level, Down 5.5% YOY

Jan ’22 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) rebounded from the 28 month low level experienced throughout the previous month but finished 5.5% below previous year levels, remaining at a three year low seasonal level for the second consecutive month. The YOY decline in NFDM/SMP export volumes was the third experienced throughout the past four months.

’20-’21 annual NFDM/SMP export volumes finished 8.9% above previous year levels, reaching a record high annual level for the second consecutive year. ’21-’22 YTD NFDM/SMP export volumes have increased by an additional 0.2% on a YOY basis throughout the first third of the production season, despite the most recent decline.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Jan ’22, accounting for over a third of the total export volumes. Mexico and the Philippines combined to account for half of all NFDM/SMP export volumes throughout the month.

YOY declines in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to Vietnam, while export volumes destined to the Philippines 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 17.1% on a YOY basis throughout the past 12 months, while volumes destined to all other countries have increased 7.4% YOY over the same period.

Export Volumes Normalized to Production

U.S. butterfat, cheese and NFDM/SMP export volumes as a percentage of production finished above previous year figures during Jan ’22 while dry whey export volumes as a percentage of production finished below previous year levels.

Overall, U.S. dairy export volumes were estimated to be equivalent to 14.8% of total U.S. milk-solids production during Jan ’22 while dairy import volumes were estimated to be equivalent to 3.0% of total U.S. milk-solids production. Jan ’22 net dairy trade was estimated to have declined 2.6% on a YOY basis, finishing lower for the second consecutive month.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 0.3% on a YOY basis throughout Jan ’22, reaching the second highest seasonal level on record. The YOY increase in dairy exports as a percentage of milk-solids production was the 11^th experienced throughout the past 12 months.

’20-’21 annual dairy exports as a percentage of milk-solids production finished 8.4% above previous year levels, reaching a record high annual level for the first time in the past three years. ’21-’22 YTD dairy exports as a percentage of milk-solids production have increased by an additional 5.2% on a YOY basis throughout the first third of the production season.

Jan ’22 U.S. dairy imports as a percentage of milk-solids production are estimated to have increased 19.8% on a YOY basis, finishing above previous year levels for the second time in the past three months. Jan ’22 U.S. dairy imports as a percentage of milk-solids production are expected to remain at the second lowest seasonal level experienced throughout the past 13 years, however.

’20-’21 annual dairy imports as a percentage of milk-solids production finished 9.5% below previous year levels, reaching a ten year low annual level. ’21-’22 YTD dairy imports as a percentage of milk-solids production have declined by an additional 1.5% on a YOY basis throughout the first third of the production season, despite the most recent increase.

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 second consecutive month throughout Jan ’22 while the U.S. finished as a slight net exporter of butter.