Executive Summary U.S. dairy export figures provided by USDA were recently updated with values spanning through Jan ’17. Highlights from the updated report include:

• The U.S. remained a net importer of butter for the 24^th consecutive month during Jan ’17 as export volumes declined to a five month low.
• U.S. cheese export volumes declined from the 19 month high experienced during the previous month but remained higher on a YOY basis for the fourth consecutive month, finishing up 3.3%. U.S. dry whey and NFDM/SMP export volumes also remained higher on a YOY basis, each finishing higher for the seventh consecutive month throughout Jan ’17.
• Net dairy trade on a percentage of total U.S. milk solids production basis declined to a ten month low during Jan ’17 but remained 19.9% higher on a YOY basis.

Additional Report Details Butter – U.S. Remains a Net Importer of Butter for the 24^th Consecutive Month Jan ’17 U.S. export volumes of butterfat declined on a MOM basis for the third consecutive month while finishing lower on a YOY basis for the first time in five months, declining 28.4% to a five month low. Butter export volumes declined to a ten year seasonal low for the month of January, finishing 63.3% below three year average seasonal figures. Total butterfat import volumes exceeded export volumes for the 24^th consecutive month during Jan ’17. ’15-’16 annual U.S. butterfat imports increased 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 Ireland, followed closely by imports of butterfat from Mexico and New Zealand. ’15-’16 annual butter export volumes declined to a ten year low however ’16-’17 YTD figures have rebounded by 46.4% throughout the first third of the production season, despite the most recent YOY decline. Cheese – Export Volumes Remain Higher YOY for the Fourth Consecutive Month, Finish up 3.3% Jan ’17 U.S. cheese export volumes declined 20.7% MOM on a daily average basis from the 19 month high experienced during the previous month but remained higher on a YOY basis for the fourth consecutive month, finishing up 3.3%. Cheddar cheese export volumes declined 15.7% YOY throughout the month however the decline was more than offset by a 6.3% YOY increase in other-than-cheddar cheese export volumes. ’15-’16 annual cheese export volumes declined to a four year low however ’16-’17 YTD figures have rebounded by 8.6% throughout the first third of the production season. Jan ’17 YOY increases in cheese export volumes were led by product destined to Australia (+63.2%) and South Korea (+19.7%), which more than offset declines in export volumes destined to Mexico (-27.9%) and Japan (-28.4%). Cheese volumes destined to Mexico, South Korea, Australia and Japan accounted for over half of the total U.S. cheese shipments throughout the month. Dry Whey – Exports Increase on a YOY Basis for the Seventh Consecutive Month, Finish up 14.7% Jan ’17 U.S. dry whey export volumes declined 18.5% MOM on a daily average basis but remained higher on a YOY basis for the seventh consecutive month, finishing up 14.7%. YOY increases in dry whey export volumes continue to be led by product destined to China, which increased by 94.8% during Jan ’17. Dry whey export volume destined to China accounted for over a third of all dry whey volumes shipped throughout the month. ’15-’16 annual dry whey export volumes declined to a 12 year low however ’16-’17 YTD figures have rebounded by 41.7% throughout the first third of the production season and are on pace to reach a three year high. WPC – Export Volumes Finish Higher on a YOY Basis for the 16^th Time in the Past 17 Months Jan ’17 whey protein concentrate (WPC) export volumes increased 12.1% MOM on a daily average basis while also remaining higher on a YOY basis for the 17^th time in the past 18 months, increasing by 51.5%. U.S. WPC export volumes increased to a record seasonal high, finishing 80.9% above three year average figures for the month of January. ’15-’16 annual WPC export volumes finished at a record high level while ’16-’17 YTD figures are up an additional 39.9% throughout the first third of the production season. NFDM/SMP – Exports Increase on a YOY Basis for the Seventh Consecutive Month, Finish up 11.3% Jan ’17 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) increased 2.1% MOM on a daily average basis from the six month low experienced during the previous month while remaining higher on a YOY basis for the seventh consecutive month, finishing up 11.3% YOY. U.S. NFDM/SMP prices remained below international averages prices for the 25^th consecutive month during Jan ’17, trading at a 5.7% 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 4.6% throughout the month. U.S. NFDM/SMP export volumes destined to Mexico continued to account for nearly 40% of all NFDM/SMP volumes shipped throughout the month. Export volumes destined to all other regions increased 25.1% YOY, led by increases in product destined to Indonesia, Pakistan, China and the Philippines. U.S. dry whey and NFDM/SMP export volumes as a percentage of production finished higher than the previous year during Jan ’17 while butterfat exports as a percentage of production finished lower and cheese exports finished flat with the previous year. Overall, U.S. dairy export volumes were equivalent to approximately 12.9% of total U.S. milk solids production during Jan ’17, while dairy import volumes were equivalent to approximately 3.5% of total U.S. milk solids production. Jan ’17 net dairy trade finished at a ten month low but remained up 19.9% YOY. Jan ’17 U.S. dairy exports as a percentage of production declined 11.2% MOM but remained higher on a YOY basis for the fourth consecutive month, finishing up 5.5%. ’15-’16 annual dairy exports as a percentage of production declined 3.8% YOY to a four year low however volumes are up 15.0% throughout the first third of the ’16-’17 production season. Jan ’17 U.S. dairy imports as a percentage of production declined 14.1% MOM and 20.0% YOY from the seven year high experienced during January of the previous year. ’15-’16 annual dairy imports as a percentage of production increased 8.3% YOY, finishing at an eight year high, however volumes are down 3.7% throughout the first third of the ’16-’17 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 fifths of total export volumes throughout the month while butter import volumes continued to exceed export volumes.