U.S. Dairy Exports Decline YOY for 11th Consecutive Month…
According to USDA, the total value of all U.S. dairy exports declined YOY for the 11th consecutive month in Jun ’15, finishing 32.6% below the previous year. The total value of all U.S. dairy exports also declined MOM on a daily average basis, falling 6.7% to a new five month low. U.S. dairy product price premiums increased throughout Jun ’15 while export volumes continue to be negatively affected by a strengthening dollar relative to the currencies of traditional buyers of U.S. dairy products. A strengthening dollar results in less purchasing power for importing countries, and ultimately less foreign demand for U.S. products, all other factors being equal.
Butter – U.S. Remains Net Importer of Butter for Fifth Consecutive Month
Jun ’15 export volumes of butterfat increased 17.7% MOM on a daily average basis from the five and a half year low experienced in May ’15 but remained weak YOY, declining by 69.5%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 14 consecutive months, with total volumes down 63.4% over the period. The U.S. was a net importer of butter for the fifth consecutive month in Jun ’15, with total butterfat import volumes finishing 70% higher than total butterfat export volumes throughout the month.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May ’14, 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 declined throughout the fourth quarter of 2014 and into 2015, but have begun to increase once again throughout recent months. ’14-’15 YTD butterfat exports are down 72.3% YOY through the first three quarters of the production season.
Cheese – YOY Export Volumes Remain Lower on Continued Weak Cheddar Cheese Demand
Jun ’15 U.S. cheese export volumes remained lower on a YOY basis for the ninth consecutive month, finishing down 22.1% while also declining 7.2% MOM on a daily average basis. Cheddar cheese exports remained particularly weak, declining 54.9% YOY. U.S. cheddar cheese prices traded at a premium to Oceania cheddar cheese prices throughout Apr ’15 for the first time in five months, with the U.S. price premium continuing to strengthen throughout recent months. Jun ’15 cheese volumes destined to Mexico remained higher on a YOY basis, increasing by 20.2%, however volumes shipped to all other destinations declined 31.7% YOY. ’14-’15 YTD cheese exports are down 11.2% YOY through the first three quarters of the production season, with cheddar cheese exports down 49.5% over the same period.
Dry Whey – Exports Decline YOY for 13th Consecutive Month, Finish Down 10.5%
Jun ’15 dry whey export volumes remained lower on a YOY basis for the 13th consecutive month, finishing down 10.5% while also declining 10.4% MOM on a daily average basis from the 11 month high experienced in May ’15. The MOM decline was significantly greater than the ten year average May – June seasonal decline of 3.7%, while export volumes reached a six year low for the month of June. ’14-’15 YTD dry whey exports are down 17.3% YOY through the first three quarters of the production season.
NFDM/SMP –Exports Decline Sharply to Four Month Low
Jun ’15 export volumes of NFDM/SMP declined sharply from the second highest monthly figure on record experienced in the previous month, finishing down 20.5% MOM on a daily average basis and 23.5% YOY. The MOM decline was significantly more than the ten year average May – June seasonal decline of 4.4%, while export volumes reached a four month low on an absolute basis. The declines in export volumes occurred despite U.S. powder prices continuing to remain competitive in global markets, trading downward over recent months along with Oceania and Europe powder prices. U.S. NFDM/SMP exports to Mexico were particularly weak, declining by 31.7% YOY. ’14-’15 YTD NFDM/SMP exports are down 8.3% YOY through the first three quarters of the production season.
Overall, U.S. dairy export volumes were equivalent to 14.6% of total U.S. milk solids production in Jun ’15, which was a four month low. Total dairy import volumes were equivalent to 3.8% of total U.S. milk solids production, reaching a six month high.
Jun ’15 U.S. butterfat, cheese, dry whey and NFDM/SMP exports as a percentage of production remained lower than the previous year. Reduced export volumes relative to production levels has contributed to significant increases in U.S. dairy product stocks.
Butter – U.S. Remains Net Importer of Butter for Fifth Consecutive Month
Jun ’15 export volumes of butterfat increased 17.7% MOM on a daily average basis from the five and a half year low experienced in May ’15 but remained weak YOY, declining by 69.5%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 14 consecutive months, with total volumes down 63.4% over the period. The U.S. was a net importer of butter for the fifth consecutive month in Jun ’15, with total butterfat import volumes finishing 70% higher than total butterfat export volumes throughout the month.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May ’14, 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 declined throughout the fourth quarter of 2014 and into 2015, but have begun to increase once again throughout recent months. ’14-’15 YTD butterfat exports are down 72.3% YOY through the first three quarters of the production season.
Cheese – YOY Export Volumes Remain Lower on Continued Weak Cheddar Cheese Demand
Jun ’15 U.S. cheese export volumes remained lower on a YOY basis for the ninth consecutive month, finishing down 22.1% while also declining 7.2% MOM on a daily average basis. Cheddar cheese exports remained particularly weak, declining 54.9% YOY. U.S. cheddar cheese prices traded at a premium to Oceania cheddar cheese prices throughout Apr ’15 for the first time in five months, with the U.S. price premium continuing to strengthen throughout recent months. Jun ’15 cheese volumes destined to Mexico remained higher on a YOY basis, increasing by 20.2%, however volumes shipped to all other destinations declined 31.7% YOY. ’14-’15 YTD cheese exports are down 11.2% YOY through the first three quarters of the production season, with cheddar cheese exports down 49.5% over the same period.
Dry Whey – Exports Decline YOY for 13th Consecutive Month, Finish Down 10.5%
Jun ’15 dry whey export volumes remained lower on a YOY basis for the 13th consecutive month, finishing down 10.5% while also declining 10.4% MOM on a daily average basis from the 11 month high experienced in May ’15. The MOM decline was significantly greater than the ten year average May – June seasonal decline of 3.7%, while export volumes reached a six year low for the month of June. ’14-’15 YTD dry whey exports are down 17.3% YOY through the first three quarters of the production season.
NFDM/SMP –Exports Decline Sharply to Four Month Low
Jun ’15 export volumes of NFDM/SMP declined sharply from the second highest monthly figure on record experienced in the previous month, finishing down 20.5% MOM on a daily average basis and 23.5% YOY. The MOM decline was significantly more than the ten year average May – June seasonal decline of 4.4%, while export volumes reached a four month low on an absolute basis. The declines in export volumes occurred despite U.S. powder prices continuing to remain competitive in global markets, trading downward over recent months along with Oceania and Europe powder prices. U.S. NFDM/SMP exports to Mexico were particularly weak, declining by 31.7% YOY. ’14-’15 YTD NFDM/SMP exports are down 8.3% YOY through the first three quarters of the production season.
Overall, U.S. dairy export volumes were equivalent to 14.6% of total U.S. milk solids production in Jun ’15, which was a four month low. Total dairy import volumes were equivalent to 3.8% of total U.S. milk solids production, reaching a six month high.
Jun ’15 U.S. butterfat, cheese, dry whey and NFDM/SMP exports as a percentage of production remained lower than the previous year. Reduced export volumes relative to production levels has contributed to significant increases in U.S. dairy product stocks.