U.S. Dairy Exports Update – Dec ’16
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Oct ’16. Highlights from the updated report include:
Butter – U.S. Remains a Net Importer of Butter for the 21st Consecutive Month
Oct ’16 U.S. export volumes of butterfat increased on a YOY basis for the second consecutive month, finishing up 211.1%. U.S. butter export volumes increased seasonally to a seven month high but remained at relatively minimal levels overall, finishing 37.1% below three year average figures for the month of October. Despite the YOY gain in export volumes, Oct ’16 butterfat imports exceeded export volumes for the 21st consecutive month.
U.S. butter prices have traded at a significant premium to Europe and New Zealand butter prices when adjusted to 80% butterfat over much of the past year and a half but declined to below average international price levels for the first time in two and a half years during Oct ’16. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5% YOY.
’15-’16 annual butterfat imports increased an additional 27.1% YOY, finishing at a new record high, while butterfat export volumes declined 23.9% YOY over the same period. Growth in butterfat imports over the past 12 months has been led by product shipped from New Zealand, followed closely by imports of butterfat from Ireland and Mexico.
Cheese – Export Volumes Finish Higher on a YOY Basis Despite Weak Cheddar Demand
Oct ’16 U.S. cheese export volumes increased 8.8% MOM on a daily average basis while also finishing 4.9% higher on a YOY basis. The YOY increase in cheese export volumes was only the second experienced in the past two years. The YOY increase in cheese export volumes occurred despite cheddar cheese export volumes declining by 21.4% throughout the month. Cheddar cheese export volumes remained weak despite domestic prices finishing below international average price levels for the first time in 17 months during Oct ’16. Other-than-cheddar cheese export volumes increased 7.9% YOY throughout the month, more than offsetting the weak cheddar cheese demand. Despite finishing higher on a YOY basis, Oct ’16 cheese export volumes remained 3.3% below three year average figures for the month of October.
Oct ’16 YOY increases in cheese export volumes were led by product destined to South Korea (+43.2%) and Mexico (+6.4%), which more than offset a 16.3% decline in export volumes destined to Japan. Cheese volumes destined to Mexico, Japan and South Korea accounted for over half of the total U.S. cheese shipments throughout the month.
Dry Whey – Export Volumes Remain Higher on a YOY Basis, Finish up 54.6%
Oct ’16 U.S. dry whey export volumes increased 24.1% MOM on a daily average basis while also remaining significantly higher on a YOY basis, finishing up 54.6%. U.S. dry whey export volumes have increased on a YOY basis over four consecutive months through October. YOY increases in dry whey export volumes continue to be led by product destined to China, which increased by 223.4% throughout the month. Dry whey export volume destined to China accounted for over a third of all dry whey volumes shipped throughout the month
WPC – Export Volumes Finish Higher on a YOY Basis for the 14th Time in the Past 15 Months
Oct ’16 whey protein concentrate (WPC) export volumes declined 8.6% MOM on a daily average basis but remained higher on a YOY basis for the 14th time in the past 15 months, increasing by 19.9%. U.S. WPC export volumes increased to a nine year seasonal high, finishing 41.7% above three year average figures for the month of October. Recent strength resulted in ’15-’16 annual WPC export volumes finished at a record high annual level.
NFDM/SMP – Export Volumes Increase on a YOY Basis for the Fourth Consecutive Month
U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) increased 10.2% MOM on a daily average basis while also remained higher on a YOY basis for the fourth consecutive month, finishing up 14.4% YOY. U.S. NFDM/SMP prices remained below international averages prices for the 22nd consecutive month during Oct ’16, trading at a 15.0% discount to average Oceania and EU-28 prices throughout the month.
U.S. NFDM/SMP export volumes remained higher on a YOY basis despite volumes destined to Mexico declining by 19.0% throughout the month. U.S. NFDM/SMP export volumes destined to Mexico accounted for over 40% of all NFDM/SMP volumes shipped throughout the month. Declines in U.S. NFDM/SMP export volumes destined to Mexico were more than offset by a 59.3% increase in volumes destined to all other regions. YOY increases in U.S. NFDM/SMP export volumes were led by product destined to the Philippines, Pakistan, Vietnam and South Korea during Oct ’16.
U.S. butterfat, cheese and dry whey export volumes as a percentage of production finished higher than the previous year during Oct ’16 while NFDM/SMP exports as a percentage of production finished slightly lower.
Overall, U.S. dairy export volumes were equivalent to 15.7% of total U.S. milk solids production during Oct ’16, while dairy import volumes were equivalent to 3.4% of total U.S. milk solids production. Net dairy trade finished at the highest value experienced throughout the past 18 months.
Oct ’16 U.S. dairy imports as a percentage of production finished 8.1% below the previous month and flat on a YOY basis. ’15-’16 annual dairy imports as a percentage of production finished up 8.3% YOY, finishing at an eight year high.
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 three quarters of total export volumes throughout the month while butter import volumes continued to exceed export volumes.
- The total value of U.S. dairy exports increased 4.5% on a YOY basis during Oct ’16, finishing at a 16 month high. U.S. dairy exports remained significantly below three year average figures for the month of October, however.
- The U.S. remained a net importer of butter for the 21st consecutive month during Oct ’16, despite domestic prices finishing below international average prices throughout the month.
- U.S. NFDM/SMP export volumes increased on a YOY basis for the fourth consecutive month throughout Oct ’16 as U.S. prices continued to remain below international average levels.
Butter – U.S. Remains a Net Importer of Butter for the 21st Consecutive Month
Oct ’16 U.S. export volumes of butterfat increased on a YOY basis for the second consecutive month, finishing up 211.1%. U.S. butter export volumes increased seasonally to a seven month high but remained at relatively minimal levels overall, finishing 37.1% below three year average figures for the month of October. Despite the YOY gain in export volumes, Oct ’16 butterfat imports exceeded export volumes for the 21st consecutive month.
U.S. butter prices have traded at a significant premium to Europe and New Zealand butter prices when adjusted to 80% butterfat over much of the past year and a half but declined to below average international price levels for the first time in two and a half years during Oct ’16. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5% YOY.
’15-’16 annual butterfat imports increased an additional 27.1% YOY, finishing at a new record high, while butterfat export volumes declined 23.9% YOY over the same period. Growth in butterfat imports over the past 12 months has been led by product shipped from New Zealand, followed closely by imports of butterfat from Ireland and Mexico.
Cheese – Export Volumes Finish Higher on a YOY Basis Despite Weak Cheddar Demand
Oct ’16 U.S. cheese export volumes increased 8.8% MOM on a daily average basis while also finishing 4.9% higher on a YOY basis. The YOY increase in cheese export volumes was only the second experienced in the past two years. The YOY increase in cheese export volumes occurred despite cheddar cheese export volumes declining by 21.4% throughout the month. Cheddar cheese export volumes remained weak despite domestic prices finishing below international average price levels for the first time in 17 months during Oct ’16. Other-than-cheddar cheese export volumes increased 7.9% YOY throughout the month, more than offsetting the weak cheddar cheese demand. Despite finishing higher on a YOY basis, Oct ’16 cheese export volumes remained 3.3% below three year average figures for the month of October.
Oct ’16 YOY increases in cheese export volumes were led by product destined to South Korea (+43.2%) and Mexico (+6.4%), which more than offset a 16.3% decline in export volumes destined to Japan. Cheese volumes destined to Mexico, Japan and South Korea accounted for over half of the total U.S. cheese shipments throughout the month.
Dry Whey – Export Volumes Remain Higher on a YOY Basis, Finish up 54.6%
Oct ’16 U.S. dry whey export volumes increased 24.1% MOM on a daily average basis while also remaining significantly higher on a YOY basis, finishing up 54.6%. U.S. dry whey export volumes have increased on a YOY basis over four consecutive months through October. YOY increases in dry whey export volumes continue to be led by product destined to China, which increased by 223.4% throughout the month. Dry whey export volume destined to China accounted for over a third of all dry whey volumes shipped throughout the month
WPC – Export Volumes Finish Higher on a YOY Basis for the 14th Time in the Past 15 Months
Oct ’16 whey protein concentrate (WPC) export volumes declined 8.6% MOM on a daily average basis but remained higher on a YOY basis for the 14th time in the past 15 months, increasing by 19.9%. U.S. WPC export volumes increased to a nine year seasonal high, finishing 41.7% above three year average figures for the month of October. Recent strength resulted in ’15-’16 annual WPC export volumes finished at a record high annual level.
NFDM/SMP – Export Volumes Increase on a YOY Basis for the Fourth Consecutive Month
U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) increased 10.2% MOM on a daily average basis while also remained higher on a YOY basis for the fourth consecutive month, finishing up 14.4% YOY. U.S. NFDM/SMP prices remained below international averages prices for the 22nd consecutive month during Oct ’16, trading at a 15.0% discount to average Oceania and EU-28 prices throughout the month.
U.S. NFDM/SMP export volumes remained higher on a YOY basis despite volumes destined to Mexico declining by 19.0% throughout the month. U.S. NFDM/SMP export volumes destined to Mexico accounted for over 40% of all NFDM/SMP volumes shipped throughout the month. Declines in U.S. NFDM/SMP export volumes destined to Mexico were more than offset by a 59.3% increase in volumes destined to all other regions. YOY increases in U.S. NFDM/SMP export volumes were led by product destined to the Philippines, Pakistan, Vietnam and South Korea during Oct ’16.
U.S. butterfat, cheese and dry whey export volumes as a percentage of production finished higher than the previous year during Oct ’16 while NFDM/SMP exports as a percentage of production finished slightly lower.
Overall, U.S. dairy export volumes were equivalent to 15.7% of total U.S. milk solids production during Oct ’16, while dairy import volumes were equivalent to 3.4% of total U.S. milk solids production. Net dairy trade finished at the highest value experienced throughout the past 18 months.
Oct ’16 U.S. dairy imports as a percentage of production finished 8.1% below the previous month and flat on a YOY basis. ’15-’16 annual dairy imports as a percentage of production finished up 8.3% YOY, finishing at an eight year high.
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 three quarters of total export volumes throughout the month while butter import volumes continued to exceed export volumes.