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Demand from Asia sparks 4-Year high for U.S dairy exports

2019-07-23 09:00 Tuesday


Overall dairy exports from America were valued at $539.1 million for May, an increase of 6% and the highest for four years, according to the U.S Dairy Export Council (USDEC). The main reason for the increase was a heightened demand for cheese exports, as well as heightened dairy prices around the world, according to the USDEC.

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The demand from the first five months of the year means that 2019 is poised to be the third-best year ever, beaten only by 2014 and 2018.

The Council explained that “May’s export continued trends of recent months. Overall volume trailed the strong levels of May 2018, but nearly all the shortfall came from lost sales to China”. Shipments of products such as cheese, milk powder, whey products, butterfat, and lactose to China went down 67%, with exports to the wider world dropping by just 1%.

All totalled, however, the amount of dairy goods exported from the U.S was down 13% from a year ago.

Cheese maintains one of the bright spots of the dairy industry with exports increasing 11% in May, with year-to-date volume for exports reaching the highest point in five years, according to the USDEC.

Shipments to Japan, South Korea, and Southeast Asia all increased by over 1,000 tons from the previous year. Sales to Indonesia reached 1,317 tons, too, five times the previous year and the highest amount in a long time. However, exports to Mexico – primarily the largest market for American cheese – dropped by 7% year-to-date.

The USDEC said that exports of Non-fat Dry Milk (NDM) and Skimmed Milk Powder (SMP) reached 63,607 tons in May, which was the highest amount for 12 months. Sales to Peru and Mexico were the highest for 15 months and 9 months respectively. Even so, USDEC said that the gains were offset by the continued drop in sales to Pakistan and China.

Whey was the category with the biggest drop in sales to China. Total whey exports for the USA were 37,961 tons for May, down 29% from the previous year. Shipments of whey to China were 6,931 tons, down 67% from the previous year and the lowest monthly volume for almost nine years. Dry whey sales to China reached their lowest point for 11 years (down 83% year on year), with whey protein concentrate and modified whey (permeate) exports down 60% from last year.

The USDEC also said that whey sales to Japan had dropped, with whey shipments reaching their lowest point in over 15 years. Even so, U.S suppliers were still able to direct sales to Southeast Asia (mostly Malaysia and Thailand) where total whey volume reached record highs of 11,525 tons in May – an increase of 17%.

Overall whey protein concentrate exports reached their highest since last September, with Mexico and SEA posting their highest totals since the fall of 2017, according to the USDEC.

To contrast that, the exports of modified whey are currently their lowest year-to-date pace since all the way back in 2011.

Lactose exports were also down in May, reaching 30,008 tons (down 14% from last year). Once again, there was a significant drop in sales to China, with export volume dropping 52% compared to last year. That was the lowest drop for over five years, according to USDEC, adding all of the sales to other places couldn’t compensate for this decline.

As far as other dairy products, exports of butterfat (down 41%) and whole milk powder (down 34%) were miles behind the previous years’ total, while shipments of fluid milk and cream increased 24%.

In terms of total milk solids, U.S exports were equivalent to 14.7% of U.S milk solids production for May. During the first five months of 2019, exports accounted for 14.2% of all production, compared to the average of 14.7% for 2014 – 2018.

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