Milk powder, cheese and whey on track to set new highs this year.
U.S. dairy exports sustained a record pace through the first seven months of the year, though volumes slowed in June and July, reports the U.S. Dairy Export Council (USDEC).
Nonfat dry milk/skim milk powder (NDM/SMP), cheese and total whey exports are on track to establish new highs in 2012. Year-to-date, total dairy export value was $3.14 billion, up 16% from 2011 levels, USDEC says in its Sept. 18 “Global Dairy Market Outlook.”
In 2012, the U.S. has increased its share of world cheese trade and maintained its share of NDM/SMP, USDEC says. However, it has lost share on butterfat and whey products.
Among the top five exporters, the United States has maintained share of export volume this year at about 19%. New Zealand and the EU each have about 34%. Australia has 8% and Argentina has 5%. Overall trade volume is up 8% from a year ago.
USDEC expects overall global dairy supplies to be tight through year-end and into 2013. Manufacturers are pushing back deliveries. “Orders have been good, leaving little uncommitted supply,” USDEC says. “A strong season in Oceania will relieve some of the pressure, but prices still have room to come up before buyers push back – at least another $200-$400/ton for milk powder, cheese and butterfat. “
Those supply pressures come in the face of solid demand, particularly in emerging markets, USDEC adds. Purchases from China, the Middle East, Mexico and Southeast Asia have been strong in 2012, helped by lower prices in the first half of the year.
“We caution, however, that as higher commodity prices are passed through to consumers and as overall food inflation becomes more critical in developing countries in the next few months, consumer purchasing power will be eroded,” USDEC says.