U.S. Dairy Exports Decline to New Four and a…
According to USDA, the total value of all U.S. dairy exports declined YOY for the 13th consecutive month in Aug ’15, finishing 33.3% below the previous year. The total value of all U.S. dairy exports also declined MOM on a daily average basis, falling 6.2% to a new four and a half year low. U.S. dairy product price premiums increased throughout Aug ’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 Seventh Consecutive Month
Aug ’15 export volumes of butterfat increased 5.6% MOM on a daily average basis but remained weak YOY, declining by 34.1%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 16 consecutive months, with total volumes down 62.3% over the period. The U.S. was a net importer of butter for the seventh consecutive month in Aug ’15, with total butterfat import volumes finishing 64.9% 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 69.9% YOY through the first 11 months of the production season.
Cheese – Export Volumes Decline to New Two and a Half Year Low
Aug ’15 U.S. cheese export volumes remained lower on a YOY basis for the 11th consecutive month, finishing down 27.7% while also declining 11.3% MOM on a daily average basis to a new two and a half year low. Cheddar cheese exports remained particularly weak, declining 53.3% YOY. U.S. cheddar cheese prices traded at a premium to international 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. Aug ’15 cheese volumes destined to Mexico fell 12.1% YOY while shipments to South Korea declined 30.1% YOY. Cheese volumes destined to Mexico and South Korea consisted of nearly half of the total U.S. cheese shipments throughout the month. ’14-’15 YTD cheese exports are down 13.6% YOY through the first 11 months of the production season, with cheddar cheese exports down 49.0% over the same period.
Dry Whey – Exports Decline YOY for 15th Consecutive Month, Finish Down 21.5%
Aug ’15 dry whey export volumes remained lower on a YOY basis for the 15th consecutive month, finishing down 21.5% while also declining 16.3% MOM on a daily average basis to a new seven month low. The MOM decline was significantly greater than the ten year average July – August seasonal decline of 2.2%, while export volumes reached a 12 year low for the month of August. ’14-’15 YTD dry whey exports are down 16.9% YOY through the first 11 months of the production season.
NFDM/SMP – Exports Remain Lower YOY for Third Consecutive Month, Finish Down 5.4%
Aug ’15 export volumes of NFDM/SMP rebounded 5.4% MOM on a daily average basis from the four month low experienced in Jul ’15 but remained 5.4% lower YOY. 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 increased 11.7% YOY however volumes shipped to all other destinations declined by 14.8% YOY. ’14-’15 YTD NFDM/SMP exports are down 9.4% YOY through the first 11 months of the production season.
Aug ’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.
Overall, U.S. dairy export volumes were equivalent to 13.2% of total U.S. milk solids production in Aug ’15, which was a six month low. Total dairy import volumes were equivalent to 4.1% of total U.S. milk solids production, reaching a six and a half year high.
U.S. butterfat and cheese import volumes continue to outpace overall dairy import volumes on a YOY percentage basis, increasing by 58.5% YOY and 29.7% YOY, respectively during Aug ’15. Total dairy import volumes increased by 24.2% YOY throughout the month.
Butter – U.S. Remains Net Importer of Butter for Seventh Consecutive Month
Aug ’15 export volumes of butterfat increased 5.6% MOM on a daily average basis but remained weak YOY, declining by 34.1%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 16 consecutive months, with total volumes down 62.3% over the period. The U.S. was a net importer of butter for the seventh consecutive month in Aug ’15, with total butterfat import volumes finishing 64.9% 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 69.9% YOY through the first 11 months of the production season.
Cheese – Export Volumes Decline to New Two and a Half Year Low
Aug ’15 U.S. cheese export volumes remained lower on a YOY basis for the 11th consecutive month, finishing down 27.7% while also declining 11.3% MOM on a daily average basis to a new two and a half year low. Cheddar cheese exports remained particularly weak, declining 53.3% YOY. U.S. cheddar cheese prices traded at a premium to international 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. Aug ’15 cheese volumes destined to Mexico fell 12.1% YOY while shipments to South Korea declined 30.1% YOY. Cheese volumes destined to Mexico and South Korea consisted of nearly half of the total U.S. cheese shipments throughout the month. ’14-’15 YTD cheese exports are down 13.6% YOY through the first 11 months of the production season, with cheddar cheese exports down 49.0% over the same period.
Dry Whey – Exports Decline YOY for 15th Consecutive Month, Finish Down 21.5%
Aug ’15 dry whey export volumes remained lower on a YOY basis for the 15th consecutive month, finishing down 21.5% while also declining 16.3% MOM on a daily average basis to a new seven month low. The MOM decline was significantly greater than the ten year average July – August seasonal decline of 2.2%, while export volumes reached a 12 year low for the month of August. ’14-’15 YTD dry whey exports are down 16.9% YOY through the first 11 months of the production season.
NFDM/SMP – Exports Remain Lower YOY for Third Consecutive Month, Finish Down 5.4%
Aug ’15 export volumes of NFDM/SMP rebounded 5.4% MOM on a daily average basis from the four month low experienced in Jul ’15 but remained 5.4% lower YOY. 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 increased 11.7% YOY however volumes shipped to all other destinations declined by 14.8% YOY. ’14-’15 YTD NFDM/SMP exports are down 9.4% YOY through the first 11 months of the production season.
Aug ’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.
Overall, U.S. dairy export volumes were equivalent to 13.2% of total U.S. milk solids production in Aug ’15, which was a six month low. Total dairy import volumes were equivalent to 4.1% of total U.S. milk solids production, reaching a six and a half year high.
U.S. butterfat and cheese import volumes continue to outpace overall dairy import volumes on a YOY percentage basis, increasing by 58.5% YOY and 29.7% YOY, respectively during Aug ’15. Total dairy import volumes increased by 24.2% YOY throughout the month.