The Atten Babler Commodities Dairy Foreign Exchange (FX) Indices were mixed throughout Mar ’22. The USD/Dairy Exporter FX Index declined slightly throughout the month however the USD/Dairy Importer FX Index reached a record high level while the USD/Domestic Dairy Importer FX Index increased to a three month high level.

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 declined 0.4 points throughout Mar ’22, finishing at a value of 107.1. The USD/Dairy Exporter FX Index remained up 3.9 points throughout the past six months and 26.9 points since the beginning of 2014, despite the most recent decline. 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.

Appreciation against the USD within the USD/ Dairy Exporter FX Index during Mar ’22 was led by gains by the New Zealand dollar, followed by gains by the Australian dollar. USD gains were experienced against the euro and Argentine peso.

USD/Dairy Importer FX Index:

The USD/Dairy Importer FX Index increased 10.8 points throughout Mar ’22, finishing at a record high value of 152.8. The USD/Dairy Importer FX Index has increased 13.9 points throughout the past six months and 52.2 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 Mar ’22 was led by gains against the Russian ruble, followed by gains against the Japanese yen, euro and Algerian dinar. USD declines were exhibited against the Brazilian real.

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 0.8 points throughout Mar ’22, finishing at a three month high value of 138.1. The USD/Domestic Dairy Importer FX Index has increased 2.5 points throughout the past six months and 31.3 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 Mar ’22 was led by gains against the Japanese yen, followed by gains against the Mexican peso, Egyptian pound, Philippine peso and South Korean won.