At the Halfway Mark of 2024, U.S. Dairy Exports Showed a 1.7% Decline
Source: The DairyNews
The U.S. Dairy Export Council (USDEC) reported that U.S. dairy exports remained relatively stable in June, despite varied performances across different product categories. Notable gains in cheese, whey, butterfat, and whole milk powder helped mitigate the declines observed in nonfat dry milk/skim milk powder (NFDM/SMP), lactose, and milk protein concentrates. On a milk solids equivalent (MSE) basis, the year-over-year (YOY) volume decreased slightly by 0.3%.
At the halfway mark of 2024, U.S. dairy exports showed a 1.7% decline in MSE, with year-to-date (YTD) export values dropping by 5% to $4.09 billion, despite adjustments made for the additional Leap Year day.
The cheese and whey sectors continued their upward trajectory in June. U.S. cheese exports increased for the sixth consecutive month, rising by 9% (3,203 metric tons), marking the second-largest June performance on record at 38,876 metric tons, only surpassed by June 2022. However, the recent surge in U.S. cheese prices may be influencing export volumes, as June marked the first month in 2024 where shipments fell below 40,000 metric tons.
Year-to-date, U.S. cheese exports reached 263,350 metric tons, representing a robust 24% increase (51,151 metric tons) and setting a record pace.
Whey exports, particularly low-protein and WPC80+, experienced their third consecutive month of double-digit growth, with a 12% increase (5,446 metric tons) in June. This growth was driven by strong demand from the U.S.'s top customers in China and Southeast Asia.
While China's overall dairy import demand remains subdued, impacting major suppliers, U.S. dairy shipments to China in June only saw a minimal 1% YOY decline, the smallest drop this year. Additionally, increased demand from other global markets helped offset China's weaker performance.
U.S. exports to Southeast Asia rebounded in June after two months of decline, with NFDM/SMP and low-protein whey leading the recovery. Shipments to the region rose by 21% (3,474 metric tons) and 19% (1,912 metric tons), respectively.
The U.S. also saw positive YOY growth in total product volume in June to South America (2,131 metric tons), South Korea (2,033 metric tons), and the Caribbean (1,620 metric tons).
However, performance in other key markets was mixed. For instance, while U.S. cheese exports to Mexico increased by 12% (1,484 metric tons) and shipments to Central America surged by 27% (1,001 metric tons), NFDM/SMP exports to both regions saw significant declines, falling by 21% (7,732 metric tons) and 36% (1,585 metric tons), respectively.
Overall, U.S. dairy exports to Mexico decreased by 12% in June, with challenges including a weaker peso and disappointing GDP growth in the second quarter. These factors, coupled with rising U.S. cheese prices, are expected to pose challenges for U.S. suppliers in the coming months.
U.S. whey exports remained strong, with demand improving across all four HS Codes (dry whey, WPC, modified whey, and WPC80+) for the first time since January 2023.
High-protein whey products (HS 3502.20) continued to perform well, with WPC80+ shipments increasing by 5% (344 metric tons) in June. Over the first half of the year, WPC80+ exports grew by 19% (6,886 metric tons), with significant volume increases to Brazil and China.
Dry whey exports (HS 0404.10.4000) rose by 12% (1,511 metric tons) in June, modified whey (HS 0404.10.0850) jumped by 23% (2,740 metric tons), and WPC (0404.10.0500, typically WPC34) increased by 6% (851 metric tons).
China's demand for dry and modified whey saw a 22% increase (2,268 metric tons) in June, driven by rising hog prices and improved producer margins, which are encouraging pig breeding and, in turn, demand for whey products.
In Southeast Asia, U.S. dry whey exports to Thailand surged by 80% (685 metric tons), and exports to Indonesia nearly doubled, rising by 98% (441 metric tons). Modified whey exports to the region's six major buyers increased by 26% (657 metric tons).
The growing export demand for dry whey is contributing to upward pressure on domestic whey prices, with spot dry whey prices reaching multi-year highs in recent weeks.
The cheese and whey sectors continued their upward trajectory in June. U.S. cheese exports increased for the sixth consecutive month, rising by 9% (3,203 metric tons), marking the second-largest June performance on record at 38,876 metric tons, only surpassed by June 2022. However, the recent surge in U.S. cheese prices may be influencing export volumes, as June marked the first month in 2024 where shipments fell below 40,000 metric tons.
Year-to-date, U.S. cheese exports reached 263,350 metric tons, representing a robust 24% increase (51,151 metric tons) and setting a record pace.
Whey exports, particularly low-protein and WPC80+, experienced their third consecutive month of double-digit growth, with a 12% increase (5,446 metric tons) in June. This growth was driven by strong demand from the U.S.'s top customers in China and Southeast Asia.
While China's overall dairy import demand remains subdued, impacting major suppliers, U.S. dairy shipments to China in June only saw a minimal 1% YOY decline, the smallest drop this year. Additionally, increased demand from other global markets helped offset China's weaker performance.
U.S. exports to Southeast Asia rebounded in June after two months of decline, with NFDM/SMP and low-protein whey leading the recovery. Shipments to the region rose by 21% (3,474 metric tons) and 19% (1,912 metric tons), respectively.
The U.S. also saw positive YOY growth in total product volume in June to South America (2,131 metric tons), South Korea (2,033 metric tons), and the Caribbean (1,620 metric tons).
However, performance in other key markets was mixed. For instance, while U.S. cheese exports to Mexico increased by 12% (1,484 metric tons) and shipments to Central America surged by 27% (1,001 metric tons), NFDM/SMP exports to both regions saw significant declines, falling by 21% (7,732 metric tons) and 36% (1,585 metric tons), respectively.
Overall, U.S. dairy exports to Mexico decreased by 12% in June, with challenges including a weaker peso and disappointing GDP growth in the second quarter. These factors, coupled with rising U.S. cheese prices, are expected to pose challenges for U.S. suppliers in the coming months.
U.S. whey exports remained strong, with demand improving across all four HS Codes (dry whey, WPC, modified whey, and WPC80+) for the first time since January 2023.
High-protein whey products (HS 3502.20) continued to perform well, with WPC80+ shipments increasing by 5% (344 metric tons) in June. Over the first half of the year, WPC80+ exports grew by 19% (6,886 metric tons), with significant volume increases to Brazil and China.
Dry whey exports (HS 0404.10.4000) rose by 12% (1,511 metric tons) in June, modified whey (HS 0404.10.0850) jumped by 23% (2,740 metric tons), and WPC (0404.10.0500, typically WPC34) increased by 6% (851 metric tons).
China's demand for dry and modified whey saw a 22% increase (2,268 metric tons) in June, driven by rising hog prices and improved producer margins, which are encouraging pig breeding and, in turn, demand for whey products.
In Southeast Asia, U.S. dry whey exports to Thailand surged by 80% (685 metric tons), and exports to Indonesia nearly doubled, rising by 98% (441 metric tons). Modified whey exports to the region's six major buyers increased by 26% (657 metric tons).
The growing export demand for dry whey is contributing to upward pressure on domestic whey prices, with spot dry whey prices reaching multi-year highs in recent weeks.
