Global Markets are Challenge for U.S. Exporters

 
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By Alan Levitt, U.S. Dairy Export Council

In the face of soft global demand and strong competition, U.S. dairy exports in June had their weakest showing in four months. Suppliers shipped 154,886 tons of milk powders, cheese, butterfat, whey and lactose in June, down 15 percent from a year ago, and down 9 percent from May (daily average). Total overseas sales were valued at $451 million, down 33 percent from last year, and down 7 percent from May (daily average).

Exporters had a more difficult time moving nonfat dry milk/skim milk powder (NDM/SMP) in June. After averaging nearly 58,000 tons per month in the previous three months, overseas sales were just 46,613 tons. This figure was down 23 percent from the prior year. Shipments to the Philippines and Pakistan were higher, but exports to most other top destinations lagged year-ago levels. Compared with last June, exports to Mexico were down 31 percent, China was down 51 percent and Middle East/North Africa region was down 79 percent.

U.S. NDM/SMP exports were equivalent to 52 percent of production for the month. That left U.S. NDM inventories at the end of June at 119,000 tons, the most ever.

Likewise, after increasing for four straight months, whey exports pulled back in June. Total shipments were 38,082 tons, down 9 percent from a year ago, and down 18 percent from May (daily average). Compared with last year, exports of dry whey were down 10 percent and exports of whey protein concentrate were down 9 percent. Shipments of whey protein isolate (WPI) were up 10 percent from year-ago levels, but still less than half of the volume sold in May.

Overall whey sales to China and Southeast Asia, our two largest customers, were 30 percent lower in June than May (daily average). Sales of WPI to China were just 330 tons, after posting a record high 3,456 tons the month before.

U.S. cheese exports slid for the third straight month. In June, shipments totaled 26,365 tons, compared with an average of more than 32,000 per month in February-April. Exports to South Korea (-36 percent), Japan (-57 percent) and Middle East/North Africa region (-51 percent) were significantly below a year ago. Mexico remained a bright spot, with June exports up 20 percent vs. last year.

U.S._Cheese_chart

Exports of butterfat, whole milk powder and milk protein concentrate also continue to lag year-ago levels. Butterfat exports of 1,470 tons were the lowest since August 2009. Shipments to the Middle East/North Africa region, which averaged nearly 5,000 tons per month in 2013, were less than 600 tons in June.

U.S. exports (on a total milk solids basis) were equivalent to 14.6 percent of U.S. milk solids production in June, bringing the year-to-date percentage to 14.5 percent. Imports were equivalent to 3.8 percent of production in June, the highest of the year.

 

 

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