USDEC: a widespread and sustained rebound in demand remains elusive
Source: The DairyNews
In the midst of sluggish global economic growth and persistent inflationary pressures in key markets, a widespread and sustained rebound in demand remains elusive, as noted by the U.S. Dairy Export Council (USDEC).
Despite these challenges, there are glimpses of hope in the global cheese market. According to the USDEC's International Demand Analysis, global cheese trade, involving all suppliers, experienced a notable upturn in October, with a significant 12% increase compared to the previous year. This modest surge in demand, coupled with competitive pricing, propelled U.S. cheese exporters in November. Notably, shipments to Mexico surged by an impressive 42% (+4,370 MT), surpassing annual records with a full month of data still to be accounted for. U.S. exports to Central America and the Caribbean also showed positive growth, with increases of 16% (+565 MT) and 14% (+276 MT), respectively. Additionally, shipments to China experienced a remarkable nearly five-fold growth (+1,290 MT).
Similarly, exports of high-protein whey (WPC80+) saw a significant uptick, rising by 37% (+1,960 MT), indicating a potential improvement in global demand. While the top U.S. market, Japan, experienced a downturn, notable increases in shipments to China, Brazil, and India contributed to an overall growth of 18% (+10,805 MT) in year-to-date WPC80+ exports, set to surpass 70,000 MT for the first time when December numbers are revealed.
Unfortunately, the positive narrative takes a downturn in other dairy categories. Skim milk powder/nonfat dry milk (SMP/NFDM) exports slipped by 5% (-3,333 MT), with shipments to Mexico down by 5% (-1,988 MT) in November. The decline extends over the past three months, marking a 9% decrease (-9,240 MT) in sales. Despite a healthy volume of 34,576 MT in November, U.S. suppliers continue to face challenges in replicating Mexico's heightened appetite for SMP/NFDM seen in late 2022.
In a familiar trend, China remains a formidable competitor, undercutting U.S. low-protein whey (0404.10) export volumes. Total U.S. 0404.10 exports experienced a 14% decline (-6,892 MT) in November compared to the previous year, with dwindling U.S. whey shipments to China (excluding WPC80+) being the primary contributor, plummeting by 25% (-7,114 MT).
Despite these challenges, there is a silver lining in positive signals emerging from Southeast Asia after more than a year. Both SMP/NFDM shipments and low-protein whey sales have grown, hinting at a potential stabilization in the market. While the region's growth may not be robust yet, the signs of stabilization are certainly welcome news.
Similarly, exports of high-protein whey (WPC80+) saw a significant uptick, rising by 37% (+1,960 MT), indicating a potential improvement in global demand. While the top U.S. market, Japan, experienced a downturn, notable increases in shipments to China, Brazil, and India contributed to an overall growth of 18% (+10,805 MT) in year-to-date WPC80+ exports, set to surpass 70,000 MT for the first time when December numbers are revealed.
Unfortunately, the positive narrative takes a downturn in other dairy categories. Skim milk powder/nonfat dry milk (SMP/NFDM) exports slipped by 5% (-3,333 MT), with shipments to Mexico down by 5% (-1,988 MT) in November. The decline extends over the past three months, marking a 9% decrease (-9,240 MT) in sales. Despite a healthy volume of 34,576 MT in November, U.S. suppliers continue to face challenges in replicating Mexico's heightened appetite for SMP/NFDM seen in late 2022.
In a familiar trend, China remains a formidable competitor, undercutting U.S. low-protein whey (0404.10) export volumes. Total U.S. 0404.10 exports experienced a 14% decline (-6,892 MT) in November compared to the previous year, with dwindling U.S. whey shipments to China (excluding WPC80+) being the primary contributor, plummeting by 25% (-7,114 MT).
Despite these challenges, there is a silver lining in positive signals emerging from Southeast Asia after more than a year. Both SMP/NFDM shipments and low-protein whey sales have grown, hinting at a potential stabilization in the market. While the region's growth may not be robust yet, the signs of stabilization are certainly welcome news.
