U.S. Dairy Exports Remain Significantly Lower YOY – Dec…
According to USDA, the total value of all U.S. dairy exports declined YOY for the 15th consecutive month in Oct ’15, finishing 20.8% below the previous year. U.S. dairy product prices continued to remain significantly above international prices throughout Oct ’15 while export volumes also continued 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 – Export Volumes Remain Lower on YOY Basis for 18th Consecutive Month
Oct ’15 export volumes of butterfat increased off of the eight and a half year low experienced in Sep ’15 but remained weak on a YOY basis, finishing 56.2% below the previous year. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 18 consecutive months, with total volumes down 62.3% over the period. The U.S. was a net importer of butter for the ninth consecutive month in Oct ’15, with total butterfat import volumes finishing nearly four times as large as 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 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5%. Overall, ’14-’15 annual U.S. imported butterfat reached a new nine year high.
Cheese – Export Volumes Remain Lower on YOY Basis for 14th Consecutive Month
Oct ’15 U.S. cheese export volumes increased 3.0% MOM on a daily average basis but remained lower on a YOY basis for the 14th consecutive month, finishing down 10.1%. Cheddar cheese exports remained particularly weak, declining 39.6% 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. Oct ’15 cheese volumes destined to Mexico increased 26.4% YOY however shipments to South Korea and Japan declined sharply, finishing 54.5% and 45.9% below the previous year, respectively. 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% YOY and other-than-cheddar cheese finishing down 4.6% YOY.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 17th Consecutive Month
Oct ’15 dry whey export volumes increased slightly off of the 11 year low experienced in Sep ’15 but remained lower on a YOY basis for the 17th consecutive month, finishing down 34.1%. Dry whey export volumes reached a 12 year low for the month of October and were the second lowest monthly figure on record over the past seven years on a daily average basis. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low.
NFDM/SMP – Export Volumes Remain Higher on YOY Basis for Second Consecutive Month
Oct ’15 export volumes of NFDM/SMP increased 28.5% YOY and 1.5% MOM on a daily average, driven higher by a significant increase in shipments to Mexico. U.S. NFDM/SMP exports to Mexico increased 94.8% YOY while volumes shipped to all other destinations declined by 11.7% YOY. U.S. NDFM/SMP export volumes to Mexico have increased by a combined 109.5% YOY over the past two months. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY.
Oct ’15 U.S. butterfat, cheese and dry whey exports as a percentage of production remained lower than the previous year, however U.S. NFDM/SMP exports as a percentage of production finished higher on a YOY basis for the second consecutive month.
Overall, U.S. dairy export volumes were equivalent to 13.5% of total U.S. milk solids production in Oct ’15 while dairy import volumes were equivalent to 3.4% of total U.S. milk solids production.
U.S. butterfat and cheese import volumes continue to outpace overall dairy import volumes on a YOY percentage basis, increasing by 103.8% YOY and 15.9% YOY, respectively during Oct ’15. Total dairy import volumes were flat YOY on a milk solids equivalent throughout the month.
Butter – Export Volumes Remain Lower on YOY Basis for 18th Consecutive Month
Oct ’15 export volumes of butterfat increased off of the eight and a half year low experienced in Sep ’15 but remained weak on a YOY basis, finishing 56.2% below the previous year. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 18 consecutive months, with total volumes down 62.3% over the period. The U.S. was a net importer of butter for the ninth consecutive month in Oct ’15, with total butterfat import volumes finishing nearly four times as large as 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 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5%. Overall, ’14-’15 annual U.S. imported butterfat reached a new nine year high.
Cheese – Export Volumes Remain Lower on YOY Basis for 14th Consecutive Month
Oct ’15 U.S. cheese export volumes increased 3.0% MOM on a daily average basis but remained lower on a YOY basis for the 14th consecutive month, finishing down 10.1%. Cheddar cheese exports remained particularly weak, declining 39.6% 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. Oct ’15 cheese volumes destined to Mexico increased 26.4% YOY however shipments to South Korea and Japan declined sharply, finishing 54.5% and 45.9% below the previous year, respectively. 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% YOY and other-than-cheddar cheese finishing down 4.6% YOY.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 17th Consecutive Month
Oct ’15 dry whey export volumes increased slightly off of the 11 year low experienced in Sep ’15 but remained lower on a YOY basis for the 17th consecutive month, finishing down 34.1%. Dry whey export volumes reached a 12 year low for the month of October and were the second lowest monthly figure on record over the past seven years on a daily average basis. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low.
NFDM/SMP – Export Volumes Remain Higher on YOY Basis for Second Consecutive Month
Oct ’15 export volumes of NFDM/SMP increased 28.5% YOY and 1.5% MOM on a daily average, driven higher by a significant increase in shipments to Mexico. U.S. NFDM/SMP exports to Mexico increased 94.8% YOY while volumes shipped to all other destinations declined by 11.7% YOY. U.S. NDFM/SMP export volumes to Mexico have increased by a combined 109.5% YOY over the past two months. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY.
Oct ’15 U.S. butterfat, cheese and dry whey exports as a percentage of production remained lower than the previous year, however U.S. NFDM/SMP exports as a percentage of production finished higher on a YOY basis for the second consecutive month.
Overall, U.S. dairy export volumes were equivalent to 13.5% of total U.S. milk solids production in Oct ’15 while dairy import volumes were equivalent to 3.4% of total U.S. milk solids production.
U.S. butterfat and cheese import volumes continue to outpace overall dairy import volumes on a YOY percentage basis, increasing by 103.8% YOY and 15.9% YOY, respectively during Oct ’15. Total dairy import volumes were flat YOY on a milk solids equivalent throughout the month.