U.S. Dairy Exports Decline YOY for 12th Consecutive Month…
According to USDA, the total value of all U.S. dairy exports declined YOY for the 12th consecutive month in Jul ’15, finishing 32.9% below the previous year. The total value of all U.S. dairy exports also declined MOM on a daily average basis, falling 10.7% to a new six month low. U.S. dairy product price premiums increased throughout Jul ’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 Sixth Consecutive Month
Jun ’15 export volumes of butterfat increased 20.6% MOM on a daily average basis but remained weak YOY, declining by 57.8%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 15 consecutive months, with total volumes down 63.1% over the period. The U.S. was a net importer of butter for the sixth consecutive month in Jul ’15, with total butterfat import volumes finishing 56.6% 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 71.4% YOY through the first ten months of the production season.
Cheese – YOY Export Volumes Remain Lower on Continued Weak Cheddar Cheese Demand
Jul ’15 U.S. cheese export volumes remained lower on a YOY basis for the tenth consecutive month, finishing down 20.8% while also declining 6.3% MOM on a daily average basis to a six month low. Cheddar cheese exports remained particularly weak, declining 40.0% 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. Jul ’15 cheese volumes destined to Mexico declined YOY for the first time in six months, falling by 6.1%, while volumes shipped to all other destinations declined by 26.2% YOY. ’14-’15 YTD cheese exports are down 12.2% YOY through the first ten months of the production season, with cheddar cheese exports down 48.7% over the same period.
Dry Whey – Exports Decline YOY for 14th Consecutive Month, Finish Down 7.6%
Jul ’15 dry whey export volumes remained lower on a YOY basis for the 14th consecutive month, finishing down 7.6% while also declining 8.4% MOM on a daily average basis to a five month low. The MOM decline was significantly greater than the ten year average June – July seasonal decline of 3.7%, while export volumes reached a six year low for the month of July. ’14-’15 YTD dry whey exports are down 16.5% YOY through the first ten months of the production season.
NFDM/SMP –Exports Decline Sharply to Four Month Low
Jul ’15 export volumes of NFDM/SMP declined sharply for the second consecutive month, finishing down 21.9% YOY and 15.8% MOM on a daily average basis. The MOM decline was significantly more than the ten year average June – July seasonal decline of 8.9%, while export volumes reached a five 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 increased 18.4% YOY however volumes shipped to all other destinations declined by 41.6% YOY. ’14-’15 YTD NFDM/SMP exports are down 9.7% YOY through the first ten months of the production season.
Jul ’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 Sixth Consecutive Month
Jun ’15 export volumes of butterfat increased 20.6% MOM on a daily average basis but remained weak YOY, declining by 57.8%. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 15 consecutive months, with total volumes down 63.1% over the period. The U.S. was a net importer of butter for the sixth consecutive month in Jul ’15, with total butterfat import volumes finishing 56.6% 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 71.4% YOY through the first ten months of the production season.
Cheese – YOY Export Volumes Remain Lower on Continued Weak Cheddar Cheese Demand
Jul ’15 U.S. cheese export volumes remained lower on a YOY basis for the tenth consecutive month, finishing down 20.8% while also declining 6.3% MOM on a daily average basis to a six month low. Cheddar cheese exports remained particularly weak, declining 40.0% 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. Jul ’15 cheese volumes destined to Mexico declined YOY for the first time in six months, falling by 6.1%, while volumes shipped to all other destinations declined by 26.2% YOY. ’14-’15 YTD cheese exports are down 12.2% YOY through the first ten months of the production season, with cheddar cheese exports down 48.7% over the same period.
Dry Whey – Exports Decline YOY for 14th Consecutive Month, Finish Down 7.6%
Jul ’15 dry whey export volumes remained lower on a YOY basis for the 14th consecutive month, finishing down 7.6% while also declining 8.4% MOM on a daily average basis to a five month low. The MOM decline was significantly greater than the ten year average June – July seasonal decline of 3.7%, while export volumes reached a six year low for the month of July. ’14-’15 YTD dry whey exports are down 16.5% YOY through the first ten months of the production season.
NFDM/SMP –Exports Decline Sharply to Four Month Low
Jul ’15 export volumes of NFDM/SMP declined sharply for the second consecutive month, finishing down 21.9% YOY and 15.8% MOM on a daily average basis. The MOM decline was significantly more than the ten year average June – July seasonal decline of 8.9%, while export volumes reached a five 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 increased 18.4% YOY however volumes shipped to all other destinations declined by 41.6% YOY. ’14-’15 YTD NFDM/SMP exports are down 9.7% YOY through the first ten months of the production season.
Jul ’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.