Executive Summary

U.S. dairy export figures provided by the USDA were recently updated with values spanning through Feb ’22. Highlights from the updated report include:

• U.S. butterfat export volumes finished 74.6% higher on a YOY basis throughout Feb ’22, reaching a seven and a half year high level, overall. The U.S. finished as a net exporter of butterfat for the second consecutive month.
• U.S. cheese export volumes finished 9.2% higher on a YOY basis throughout Feb ’22, reaching a record high seasonal level. Dry whey and whey protein concentrate export volumes each remained below previous year levels, however, on reduced volumes destined to China.
• U.S. nonfat dry milk/skim milk powder export volumes finished 11.5% below previous year levels throughout Feb ’22, remaining lower on a YOY basis for the fourth time in the past five months.

Additional Report Details

Butter – Exports Reach a Seven and a Half Year High Level, up 74.6% YOY

According to the USDA, U.S. export volumes of butterfat reached a seven and a half year high level throughout Feb ’22, finishing 74.6% above previous year levels. U.S. butterfat export volumes remained at an eight year high seasonal level for the fourth consecutive month. The YOY increase in butterfat export volumes was the 15^th experienced in a row. The U.S. finished as a net exporter of butterfat for the second consecutive month.

’20-’21 annual butterfat export volumes finished 113.1% above the four year low level experienced throughout the previous production season, reaching a seven year high annual level. ’21-’22 YTD butterfat export volumes have increased by an additional 77.5% on a YOY basis throughout the first five months of the production season.

Canada continued to be the top destination for U.S. butterfat export volumes throughout Feb ’22, accounting for over a third of the total export volumes. Canada, Mexico and Bahrain combined to account for over half of all butterfat export volumes throughout the month.

Butterfat export volumes destined to Canada increased most significantly on a YOY basis throughout the month, followed by shipments destined to Bahrain and the Dominican Republic, while butterfat export volumes destined to Saudi Arabia 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 95.2% on a YOY basis throughout the past 12 months while volumes destined to Mexico increased by 32.5% throughout the period. U.S. butterfat export volumes destined to all other countries have increased by 136.2% throughout the past 12 months, led by increases in volumes destined to Bahrain.

Cheese – Exports Reach a Record High Seasonal Level, up 9.2% YOY

Feb ’22 U.S. cheese export volumes increased to a ten month high level while finishing 9.2% above previous year levels, reaching a record high seasonal level for the month of February. The YOY increase in cheese export volumes was the eighth experienced in a row but the smallest experienced throughout the eight month period. Cheddar cheese export volumes increased 59.3% on a YOY basis throughout the month while other-than-cheddar cheese export volumes finished 2.2% above previous year levels.

’20-’21 annual cheese export volumes finished 4.6% above the previous year levels, reaching a record high annual level for the first time in the past seven years. ’21-’22 YTD cheese export volumes have increased by an additional 24.8% on a YOY basis throughout the first five months of the production season.

Mexico was the top destination for U.S. cheese export volumes throughout Feb ’22, accounting for over a quarter of the total export volumes. Mexico, South Korea and Japan combined to account for 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 Panama and Mexico, while cheese export volumes destined to the United Arab Emirates 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 increased 11.6% on a YOY basis throughout the past 12 months as a 23.3% YOY increase in volumes destined to Mexico has more than offset a 2.7% YOY decline in volumes destined to South Korea.

Whey – Dry Whey & Whey Protein Concentrate Export Volumes Both Lower YOY

Feb ’22 U.S. dry whey export volumes rebounded from the 27 month low level experienced throughout the previous month but remained 20.1% lower on a YOY basis. The YOY decline in dry whey export volumes was the eighth experienced throughout the past nine months.

’20-’21 annual dry whey export volumes finished 21.8% above previous year levels, reaching a three year high annual level. ’21-’22 YTD dry whey export volumes have declined by 17.4% on a YOY basis throughout the first five months of the production season, however.

U.S. whey protein concentrate (WPC) export volumes reached a 12 month high level throughout Feb ’22 but remained 1.3% below previous year levels. The YOY decline in WPC export volumes was the sixth experienced in a row but the smallest experienced throughout the six month period.

’20-’21 annual WPC export volumes finished 6.2% above previous year levels, reaching a three year high annual level. ’21-’22 YTD WPC export volumes have declined by 19.3% on a YOY basis throughout the first five months of the production season, however.

China continued to be the top destination for U.S. whey export volumes throughout Feb ’22, accounting for 40% of the total export volumes. China, Canada and Mexico combined to account for over half of all whey export volumes throughout the month.

YOY declines in whey export volumes continue to be led by product destined to China, while volumes destined to Indonesia finished most significantly higher on a YOY basis throughout the month. A 23.7% YOY decline in whey export volumes destined to China more than offset a 15.4% YOY increase in volumes destined to all other countries 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 3.1% YOY throughout the past 12 months, while whey export volumes destined to all other countries have increased by 5.8% on a YOY basis over the same period.

NFDM/SMP – Exports Remain Lower YOY for the Fourth Time in Five Months, Down 11.5%

Feb ’22 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) rebounded to a three month high level but remained 11.5% below previous year levels. The YOY decline in NFDM/SMP export volumes was the fourth experienced throughout the past five months.

’20-’21 annual NFDM/SMP export volumes finished 8.9% above previous year levels, reaching a record high annual level for the second consecutive year. ’21-’22 YTD NFDM/SMP export volumes have declined by 2.5% on a YOY basis throughout the first five months of the production season, however.

Mexico was the top destination for U.S. NFDM/SMP export volumes throughout Feb ’22, accounting for over a third of the total export volumes. Mexico and the Philippines combined to account for half of all NFDM/SMP export volumes throughout the month.

YOY declines in NFDM/SMP export volumes were led by product destined to Vietnam, followed by volumes destined to Mexico, while export volumes destined to China finished most significantly higher 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 14.0% on a YOY basis throughout the past 12 months, while volumes destined to all other countries have increased 3.5% YOY over the same period.

Export Volumes Normalized to Production

U.S. butterfat and cheese export volumes as a percentage of production finished above previous year figures during Feb ’22 while dry whey and NFDM/SMP export volumes as a percentage of production finished below previous year levels.

Overall, U.S. dairy export volumes were estimated to be equivalent to 16.2% of total U.S. milk-solids production during Feb ’22 while dairy import volumes were estimated to be equivalent to 2.7% of total U.S. milk-solids production. Feb ’22 net dairy trade was estimated to have declined 0.8% on a YOY basis, finishing lower for the third consecutive month.

U.S. dairy exports as a percentage of milk-solids production are estimated to have increased 2.1% on a YOY basis throughout Feb ’22, reaching the second highest seasonal level on record. The YOY increase in dairy exports as a percentage of milk-solids production was the 12^th experienced throughout the past 13 months.

’20-’21 annual dairy exports as a percentage of milk-solids production finished 8.4% above previous year levels, reaching a record high annual level for the first time in the past three years. ’21-’22 YTD dairy exports as a percentage of milk-solids production have increased by an additional 4.6% on a YOY basis throughout the first five months of the production season.

Feb ’22 U.S. dairy imports as a percentage of milk-solids production are estimated to have increased 19.4% on a YOY basis, finishing above previous year levels for the third time in the past four months. Despite increasing on a YOY basis, U.S. dairy imports as a percentage of milk-solids production remained at the second lowest seasonal level experienced throughout the past 11 years, however.

’20-’21 annual dairy imports as a percentage of milk-solids production finished 9.5% below previous year levels, reaching a ten year low annual level. ’21-’22 YTD dairy imports as a percentage of milk-solids production have rebounded by 1.7% on a YOY basis throughout the first five months 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 third consecutive month throughout Feb ’22 while the U.S. finished as a slight net exporter of butter for the second consecutive month.