U.S. Dairy Exports Update – Jun ’16
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Apr ’16. Highlights from the updated report include:
• The total value of U.S. dairy exports finished lower on a YOY basis for the 21st consecutive month during Apr ’16, finishing down 31.5%.
• The U.S. remained a net importer of butter for the 15th consecutive month during Apr ’16 as domestic prices remain at a significant premium to international prices.
• NFDM/SMP export volumes declined on a YOY basis for the second consecutive month, despite U.S. NFDM/SMP prices trading at a 9.4% discount to average Oceania and EU-28 prices throughout the month.
Additional Report Details
According to USDA, the Apr ’16 total value of all U.S. dairy exports was flat MOM on a daily average basis but remained lower on a YOY basis for the 21st consecutive month, finishing down 31.5%. U.S. high milkfat dairy product prices continued to remain significantly above international prices throughout Apr ’16, contributing to the lower international demand for U.S. dairy products.
Butter – U.S. Remains a Net Importer of Butter for 15th Consecutive Month
Apr ’16 U.S. export volumes of butterfat declined 56.4% MOM on a daily average basis while finishing 42.3% below previous year volumes, reaching a ten year low for the month of April. Apr ’16 butterfat imports exceeded export volumes for the 15th consecutive month, as total butterfat import volumes finished at over double the export volumes experienced 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 U.S. / international butter price spread reached an 11 year high during Nov ’15 prior to declining but remained at a significant premium throughout more recent months. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5% YOY.
Overall, ’14-’15 annual U.S. butterfat imports reached a new nine year high. ’15-’16 YTD butterfat imports have increased an additional 36.5% throughout the first seven months of the production season, while butter exports have declined 18.7% YOY over the same period. Growth in butterfat imports over the past 12 months has been led by product shipped from New Zealand, followed by imports of butterfat from Ireland and Mexico.
Cheese – Export Volumes Remain Lower on YOY Basis for 19th Consecutive Month
Apr ’16 U.S. cheese export volumes declined 14.2% MOM on a daily average basis while also remaining lower on a YOY basis for the 19th consecutive month, finishing down 33.1%. Cheddar cheese exports remained particularly weak, declining by 59.4% YOY throughout the month. U.S. cheddar cheese prices have traded at a premium to international cheddar cheese prices for 13 consecutive months through Apr ’16.
YOY declines in Apr ’16 cheese export volumes were widespread across major destinations as declines were experienced in volumes shipped to Mexico (-29.2%), South Korea (-57.3%) and Japan (-44.0%). Cheese volumes destined to Mexico, South Korea and Japan consisted of over half of the total U.S. cheese shipments throughout the month. ’14-’15 annual total cheese exports finished down 14.1% YOY, with cheddar cheese exports finishing down 49.4% and other-than-cheddar cheese finishing down 4.6%. ’15-’16 YTD cheese exports have declined an additional 17.3% throughout the first seven months of the production season.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 23rd Consecutive Month
Apr ’16 U.S. dry whey export volumes rebounded 21.6% MOM on a daily average basis from the 11 year low experienced during the previous month but remained 27.8% lower on a YOY basis and finishing at a 12 year low for the month of April. The YOY decline in dry whey export volumes was the 23rd experienced in a row. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low while ’15-’16 YTD dry whey exports have declined an additional 24.3% throughout the first seven months of the production season.
NFDM/SMP – Export Volumes Remain Lower on YOY Basis for the Second Consecutive Month
U.S. export volumes of NFDM/SMP finished lower on a YOY basis for the second consecutive month during Apr ’16, declining by 19.5%. The decline in export volumes occurred despite U.S. NFDM/SMP prices remaining competitive with international prices, trading at a 9.4% discount to average Oceania and EU-28 prices throughout the month. Total NFDM/SMP export volumes remained lower during Apr ’16 despite volumes destined to Mexico increasing by 22.1% YOY. U.S. NFDM/SMP export volumes destined to Mexico accounted for over 45% of total NFDM/SMP volumes shipped throughout the month. U.S. NDFM/SMP export volumes destined to Mexico increased 24.1% YOY throughout 2015 while export volumes shipped to all other destinations declined by 10.1% over the same period. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY however, despite the most recent declines, export volumes remain up 3.6% YOY throughout the first seven months of the ’15-’16 production season.
Apr ’16 U.S. cheese, dry whey and NFDM/SMP exports as a percentage of production remained lower than the previous year while U.S. butterfat exports as a percentage of production also finished below the previous year figures. Butterfat export volumes as a percentage of production had increased on a YOY basis for three consecutive months prior to the most recent decline.
Overall, U.S. dairy export volumes were equivalent to 13.4% of total U.S. milk solids production in Apr ’16 while dairy import volumes were equivalent to 3.3% of total U.S. milk solids production.
Apr ’16 U.S. dairy imports as a percentage of production declined 15.4% from the previous month but remained 3.1% higher on a YOY basis. ’15-’16 YTD dairy imports as a percentage of production are up 10.8% YOY throughout the first seven months of the production season.
Net trade of U.S. NFDM/SMP and dry whey continues to outpace that of cheese and butter as dry product import volumes remain minimal. U.S. cheese imports offset over two thirds of total export volumes throughout the month while butter import volumes continued to exceed export volumes.
Butter – U.S. Remains a Net Importer of Butter for 15th Consecutive Month
Apr ’16 U.S. export volumes of butterfat declined 56.4% MOM on a daily average basis while finishing 42.3% below previous year volumes, reaching a ten year low for the month of April. Apr ’16 butterfat imports exceeded export volumes for the 15th consecutive month, as total butterfat import volumes finished at over double the export volumes experienced 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 U.S. / international butter price spread reached an 11 year high during Nov ’15 prior to declining but remained at a significant premium throughout more recent months. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5% YOY.
Overall, ’14-’15 annual U.S. butterfat imports reached a new nine year high. ’15-’16 YTD butterfat imports have increased an additional 36.5% throughout the first seven months of the production season, while butter exports have declined 18.7% YOY over the same period. Growth in butterfat imports over the past 12 months has been led by product shipped from New Zealand, followed by imports of butterfat from Ireland and Mexico.
Cheese – Export Volumes Remain Lower on YOY Basis for 19th Consecutive Month
Apr ’16 U.S. cheese export volumes declined 14.2% MOM on a daily average basis while also remaining lower on a YOY basis for the 19th consecutive month, finishing down 33.1%. Cheddar cheese exports remained particularly weak, declining by 59.4% YOY throughout the month. U.S. cheddar cheese prices have traded at a premium to international cheddar cheese prices for 13 consecutive months through Apr ’16.
YOY declines in Apr ’16 cheese export volumes were widespread across major destinations as declines were experienced in volumes shipped to Mexico (-29.2%), South Korea (-57.3%) and Japan (-44.0%). Cheese volumes destined to Mexico, South Korea and Japan consisted of over half of the total U.S. cheese shipments throughout the month. ’14-’15 annual total cheese exports finished down 14.1% YOY, with cheddar cheese exports finishing down 49.4% and other-than-cheddar cheese finishing down 4.6%. ’15-’16 YTD cheese exports have declined an additional 17.3% throughout the first seven months of the production season.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 23rd Consecutive Month
Apr ’16 U.S. dry whey export volumes rebounded 21.6% MOM on a daily average basis from the 11 year low experienced during the previous month but remained 27.8% lower on a YOY basis and finishing at a 12 year low for the month of April. The YOY decline in dry whey export volumes was the 23rd experienced in a row. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low while ’15-’16 YTD dry whey exports have declined an additional 24.3% throughout the first seven months of the production season.
NFDM/SMP – Export Volumes Remain Lower on YOY Basis for the Second Consecutive Month
U.S. export volumes of NFDM/SMP finished lower on a YOY basis for the second consecutive month during Apr ’16, declining by 19.5%. The decline in export volumes occurred despite U.S. NFDM/SMP prices remaining competitive with international prices, trading at a 9.4% discount to average Oceania and EU-28 prices throughout the month. Total NFDM/SMP export volumes remained lower during Apr ’16 despite volumes destined to Mexico increasing by 22.1% YOY. U.S. NFDM/SMP export volumes destined to Mexico accounted for over 45% of total NFDM/SMP volumes shipped throughout the month. U.S. NDFM/SMP export volumes destined to Mexico increased 24.1% YOY throughout 2015 while export volumes shipped to all other destinations declined by 10.1% over the same period. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY however, despite the most recent declines, export volumes remain up 3.6% YOY throughout the first seven months of the ’15-’16 production season.
Apr ’16 U.S. cheese, dry whey and NFDM/SMP exports as a percentage of production remained lower than the previous year while U.S. butterfat exports as a percentage of production also finished below the previous year figures. Butterfat export volumes as a percentage of production had increased on a YOY basis for three consecutive months prior to the most recent decline.
Overall, U.S. dairy export volumes were equivalent to 13.4% of total U.S. milk solids production in Apr ’16 while dairy import volumes were equivalent to 3.3% of total U.S. milk solids production.
Apr ’16 U.S. dairy imports as a percentage of production declined 15.4% from the previous month but remained 3.1% higher on a YOY basis. ’15-’16 YTD dairy imports as a percentage of production are up 10.8% YOY throughout the first seven months of the production season.
Net trade of U.S. NFDM/SMP and dry whey continues to outpace that of cheese and butter as dry product import volumes remain minimal. U.S. cheese imports offset over two thirds of total export volumes throughout the month while butter import volumes continued to exceed export volumes.