The Atten Babler Commodities Dairy Foreign Exchange (FX) Indices strengthened throughout Aug ’21. The USD/Dairy Exporter FX Index increased to a ten month high level while the USD/Dairy Importer FX Index and USD/Domestic Dairy Importer FX Index increased to four and five month high levels, respectively, throughout the month.

Global Dairy Net Trade:

Major net dairy exporters are led by New Zealand, followed by the EU-28, the U.S., Australia and Argentina (represented in green in the chart below). Major net dairy importers are led by China, followed by Russia, Mexico, Japan, Indonesia, Algeria and the Philippines (represented in red in the chart below).

New Zealand accounts for over two fifths of the USD/Dairy Exporter FX Index, followed by the EU-28 at 29% and the United States at 17%. Australia and Argentina each account for between 5-10% of the index.

China accounts for a quarter of the USD/Dairy Importer FX Index while Russia accounts for a fifth. Mexico, Japan, Indonesia, Algeria and the Philippines each account for between 5-10% of the index.

USD/Dairy Exporter FX Index:

The USD/Dairy Exporter FX Index increased 0.4 points throughout Aug ’21, finishing at a ten month high value of 103.8. The USD/Dairy Exporter FX Index has increased 3.3 points throughout the past six months and 23.6 points since the beginning of 2014. A strong USD/Dairy Exporter FX Index reduces the competitiveness of U.S. dairy products relative to other exporting regions (represented in green in the Global Dairy Net Trade chart), ultimately resulting in less foreign demand for U.S. products, all other factors being equal. USD appreciation against the Argentine peso has accounted for the majority of the gains since the beginning of 2014.

USD appreciation within the USD/Dairy Exporter FX Index during Aug ’21 was led by gains against the euro, followed by gains against the New Zealand dollar, Australian dollar and Argentine peso.

USD/Dairy Importer FX Index:

The USD/Dairy Importer FX Index increased 0.1 point throughout Aug ’21, finishing at a four month high value of 139.3. The USD/Dairy Importer FX Index has increased 1.3 points throughout the past six months and 38.7 points since the beginning of 2014. A strong USD/Dairy Importer FX Index results in less purchasing power for major dairy importing countries (represented in red in the Global Dairy Net Trade chart), making U.S. dairy products more expensive to import. USD appreciation against the Russian ruble has accounted for the majority of the gains since the beginning of 2014.

USD appreciation within the USD/Dairy Importer FX Index during Aug ’21 was led by gains against the Mexican peso, followed by gains against the Brazilian real and Australian dollar. USD declines were exhibited against the Russian ruble and Indonesian rupiah.

U.S. Dairy Export Destinations:

Major destinations for U.S. dairy exports are led by Mexico, followed by China, Canada, the Philippines, Indonesia, Japan and South Korea.

Mexico accounts for nearly a quarter of the USD/Domestic Dairy Importer FX Index, followed by China at 12%. Canada, the Philippines, Indonesia, Japan and South Korea each account for between 5-10% of the index.

USD/Domestic Dairy Importer FX Index:

The USD/Domestic Dairy Importer FX Index increased 0.6 points throughout Aug ’21, finishing at a five month high value of 135.8. The USD/Domestic Dairy Importer FX Index has increased 1.6 points throughout the past six months and 29.0 points since the beginning of 2014. A strong USD/Domestic Dairy Importer FX Index results in less purchasing power for the traditional buyers of U.S. dairy products (represented in red in the U.S. Dairy Export Destinations chart), ultimately resulting in less foreign demand for U.S. products, all other factors being equal. USD appreciation against the Mexican peso has accounted for the majority of the gains since the beginning of 2014.

USD appreciation within the USD/Domestic Dairy Importer FX Index during Aug ’21 was led by gains against the Mexican peso, followed by gains against the Canadian dollar, South Korean won and Australian dollar. USD declines were exhibited against the Indonesian rupiah.