Executive Summary

U.S. dairy export figures provided by the USDA were recently updated with values spanning through Aug ’21. Highlights from the updated report include:

• U.S. butterfat export volumes finished 151.4% higher on a YOY basis throughout Aug ’21, reaching an eight year high seasonal level. Butterfat import volumes continued to exceed export volumes for the third consecutive month, however.
• U.S. cheese export volumes reached a record high seasonal level throughout Aug ’21, finishing 18.1% above previous year levels, however dry whey export volumes declined 17.3% on a YOY basis, finishing below previous year levels for the third consecutive month. Whey protein concentrate export volumes increased 5.1% on a YOY basis, finishing higher for the third consecutive month.
• U.S. nonfat dry milk/skim milk powder export volumes finished 15.4% higher on a YOY basis throughout Aug ’21, reaching a record high seasonal level.

Additional Report Details

Butter – Exports Reach an Eight Year High Seasonal Level, up 151.4% YOY

According to the USDA, Aug ’21 U.S. export volumes of butterfat finished 151.4% above previous year levels, reaching an eight year high seasonal level. The YOY increase in butterfat export volumes was the ninth experienced in a row. Butterfat import volumes continued to exceed export volumes for the third consecutive month throughout Aug ’21, however.

’19-’20 annual butterfat export volumes declined 24.1% on a YOY basis, reaching a four year low level. ’20-’21 YTD butterfat export volumes have rebounded by 103.1% on a YOY basis heading into the final month of the production season, however, and are on pace to reach a seven year high level.

Canada continued to be the top destination for U.S. butterfat export volumes throughout Aug ’21, accounting for over a quarter of the total export volumes. Canada, China, South Korea and Saudi Arabia combined to account for over three quarters of all butterfat export volumes throughout the month.

Butterfat export volumes destined to China increased most significantly on a YOY basis throughout the month, followed by shipments destined to South Korea and Canada, while butterfat export volumes destined to Japan finished most significantly lower.

Canada and Mexico have historically been the largest importers of U.S. butterfat, accounting for over half of the total U.S. export volumes experienced throughout the past five years. U.S. butterfat export volumes destined to Canada have increased 56.1% on a YOY basis throughout the past 12 months however volumes destined to Mexico have declined by 24.7% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 162.1% throughout the past 12 months, led by increases in volumes destined to Bahrain.

Cheese – Exports Reach a Record High Seasonal Level, up 18.1% YOY

Aug ’21 U.S. cheese export volumes finished 18.1% above previous year levels, reaching a record high seasonal level for the month of August. The YOY increase in cheese export volumes was the second experienced in a row. Cheddar cheese export volumes increased 74.9% on a YOY basis throughout the month while other-than-cheddar cheese export volumes finished 10.6% above previous year levels.

’19-’20 annual cheese export volumes increased 2.1% on a YOY basis, reaching a six year high level. ’20-’21 YTD cheese export volumes have increased by an additional 3.2% on a YOY basis heading into the final month of the production season.

Mexico was the top destination for U.S. cheese export volumes throughout Aug ’21, accounting for over a quarter of the total export volumes. Mexico, South Korea and Japan combined to account for over half of all cheese export volumes throughout the month.

YOY increases in cheese export volumes were led by product destined to Japan, followed by volumes destined to Chile and Mexico, while cheese export volumes destined to South Korea finished most significantly lower.

Mexico and South Korea have historically been the largest importers of U.S. cheese, accounting for nearly 45% of total U.S. cheese export volumes throughout the past five years. Combined U.S. cheese export volumes destined to Mexico and South Korea have declined 6.1% on a YOY basis throughout the past 12 months, however.

Whey – Dry Whey Export Volumes Remain Lower YOY, Whey Protein Concentrate Volumes Higher

U.S. dry whey export volumes remained below previous year levels for the third consecutive month throughout Aug ’21, finishing down 17.3%. The YOY decline in dry whey export volumes was the largest experienced throughout the past 21 months on a percentage basis. Dry whey export volumes had finished higher on a YOY basis over 16 consecutive months through May ’21, prior to declining on a YOY basis over the three most recent months of available data.

’19-’20 annual dry whey export volumes rebounded 15.7% on a YOY basis from the 15 year low level experienced throughout the previous production season. ’20-’21 YTD dry whey export volumes have increased by an additional 24.2% on a YOY basis heading into the final month of the production season and are on pace to reach a three year high level, despite the most recent decline.

U.S. whey protein concentrate (WPC) export volumes increased 5.1% on a YOY basis during Aug ’21, finishing above previous year levels for the third consecutive month. ’19-’20 annual WPC export volumes increased 18.7% on a YOY basis while ’20-’21 YTD export volumes have increased an additional 9.4% YOY heading into the final month of the production season.

China continued to be the top destination for U.S. whey export volumes throughout Aug ’21, accounting for over 40% of the total export volumes.

YOY increases in whey export volumes continue to be led by product destined to China, followed by volumes destined to Mexico and Vietnam, while volumes destined to Japan finished most significantly lower on a YOY basis throughout the month. YOY increases in modified whey export volumes and whey protein concentrate volumes more than offset lower dry whey export volumes throughout the month.

China has historically been the largest importer of U.S. whey products, accounting for nearly 40% of the total U.S. whey export volumes throughout the past five years. U.S. whey export volumes destined to China have increased 81.4% YOY throughout the past 12 months, more than offsetting a 3.0% YOY decline in whey export volumes destined to all other countries over the same period.

NFDM/SMP – Exports Reach a Record High Seasonal Level, up 15.4% YOY

Aug ’21 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) finished 15.4% above previous year levels, reaching a record high seasonal level. The YOY increase in NFDM/SMP export volumes was the sixth experienced throughout the past seven months and the largest experienced throughout the past five months on a percentage basis.

’19-’20 annual NFDM/SMP export volumes increased 25.1% on a YOY basis, reaching a record high level. ’20-’21 YTD NFDM/SMP export volumes have increased by an additional 8.3% on a YOY basis heading into the final month of the production season, already reaching a record high annual level.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Aug ’21, accounting for over 40% of the total export volumes. Mexico, the Philippines, Indonesia, China and Vietnam combined to account for over three quarters of all NFDM/SMP export volumes throughout the month.

YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to the Philippines, while export volumes destined to Peru finished most significantly lower on a YOY basis throughout the month.

Mexico has historically been the largest importer of U.S. NFDM/SMP, accounting for over 40% of all U.S. NFDM/SMP export volumes throughout the past five years. U.S. NFDM/SMP export volumes destined to Mexico have increased 12.4% on a YOY basis throughout the past 12 months while volumes destined to all other countries have increased 3.8% YOY over the same period.

Export Volumes Normalized to Production

U.S. butterfat, cheese and NFDM/SMP export volumes as a percentage of production finished above previous year figures during Jun ’21 while dry whey export volumes as a percentage of production finished lower YOY.

Overall, U.S. dairy export volumes were estimated to be equivalent to 18.4% of total U.S. milk-solids production during Aug ’21 while dairy import volumes were estimated to be equivalent to 2.9% of total U.S. milk-solids production. Aug ’21 net dairy trade was estimated to have increased 21.6% on a YOY basis, finishing higher for the 16^th time in the past 17 months.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 12.5% on a YOY basis throughout Aug ’21, remaining at a record high seasonal level for the fourth consecutive month. The YOY increase in dairy exports as a percentage of milk-solids production was the seventh experienced in a row.

’19-’20 annual exports as a percentage of milk-solids production finished 11.8% above previous year levels but remained below the ’17-’18 record high figures. ’20-’21 YTD exports as a percentage of milk-solids production have increased by an additional 8.3% on a YOY basis heading into the final month of the production season and are on pace to reach a record high annual level.

Aug ’21 U.S. dairy imports as a percentage of milk-solids production are estimated to have declined 20.1% on a YOY basis, finishing lower for the eighth time in the past nine months. ’19-’20 annual imports as a percentage of milk-solids production finished 0.7% above previous year levels however ’20-’21 YTD imports as a percentage of milk-solids production have declined by 10.7% on a YOY basis heading into the final month of the production season.

Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net cheese trade volumes exceeded net dry whey trade volumes for the fourth consecutive month throughout Aug ’21 while the U.S. finished as a net importer of butter for the third consecutive month.