U.S. Cheese Exports Soar in August Amid Robust Global Demand
Source: DairyNews.today
U.S. cheese exports demonstrated remarkable strength in August 2024, with a total of 42,459 metric tons (MT) shipped internationally, marking a 15% increase year-over-year (YOY) according to the U.S. Dairy Export Council (USDEC). Cumulative shipments through the first eight months of the year are up by 21% YOY (+60,146 MT), underscoring sustained demand across key global markets.
August’s cheese exports benefited from broad-based growth across multiple cheese varieties, with notable increases in fresh and shredded cheeses, up 21% (+1,728 MT) and 20% (+2,289 MT), respectively. The “Other Cheese” category recorded the most significant YOY gain, surging by 31% (+2,771 MT). In contrast, cheddar exports dropped by 26% (-1,639 MT), as shipments to Japan—the largest export market for U.S. cheddar—plummeted by 60% (-1,742 MT), reflecting a shift in production preferences toward Italian-style cheeses, including mozzarella.
Mexico Leads Cheese Import Growth
Mexico remains the largest importer of U.S. cheese, with August shipments to the region increasing by 17% (+2,256 MT). Cheese exports to Mexico grew across nearly all varieties, including “Other Cheese,” which rose 34% (+1,942 MT). Year-to-date (YTD) exports to Mexico are now up 36% (+33,479 MT) compared to the same period in 2023, as Mexican buyers continue to prioritize U.S. cheese despite fluctuating prices.
Diverse Regional Demand for U.S. Cheese
Beyond Mexico, the Middle East and North Africa (MENA) region saw substantial YOY growth, with August exports up 136% (+1,245 MT), driven largely by shredded cheese (likely mozzarella). The Philippines also contributed to the uptick in U.S. cheese exports, with shipments to Southeast Asia rising 93% (+870 MT). South America and Central America/Caribbean also posted gains, with exports increasing 43% (+802 MT) and 13% (+755 MT), respectively.
This robust demand has persisted despite a rise in U.S. cheese prices, which have been above $1.80 per pound since May. However, higher prices could eventually temper demand, especially as contracts adjust to current market rates.
NFDM/SMP Exports Reflect Mixed Performance
While cheese exports posted impressive gains, U.S. nonfat dry milk/skim milk powder (NFDM/SMP) exports faced challenges. Totaling 67,990 MT in August, NFDM/SMP exports fell 1% YOY (-788 MT), marking a minor decline but still reflecting the second-highest monthly volume of 2024.
August saw a strong rebound in U.S. NFDM/SMP exports to Mexico, which increased by 9% (+3,082 MT) YOY, reaching a record high for the month. Market analysts suggest that as Mexican milk production wavers, imports of U.S. milk powder have strengthened, possibly for use in cheese production to offset rising cheese prices. Exports to South America and Japan also rose, with shipments to Colombia driving a 13% (+440 MT) increase to the region.
Competitive Pressure in the Global NFDM/SMP Market
Despite these gains, U.S. NFDM/SMP exports to other regions showed signs of strain. Exports to Southeast Asia fell by 8% (-1,956 MT), while shipments to Central America/Caribbean and MENA declined by 23% (-801 MT) and 39% (-660 MT), respectively. Strong competition from New Zealand, which is reorienting its production towards SMP, has added pressure on U.S. exports, particularly as Chinese demand for whole milk powder softens. Additionally, U.S. milk powder production has lagged, driving domestic inventories to their lowest August levels since 2016 as processors tap into reserves to meet commercial demand.
Outlook: Strength Amid Rising Challenges
U.S. dairy exports have shown resilience through August, with cheese continuing to lead the charge. However, rising cheese prices and increased competition in the global milk powder market present potential challenges for U.S. exporters. As the global dairy market shifts in response to production and demand fluctuations, U.S. exporters will need to remain vigilant to sustain momentum through year-end.
Mexico Leads Cheese Import Growth
Mexico remains the largest importer of U.S. cheese, with August shipments to the region increasing by 17% (+2,256 MT). Cheese exports to Mexico grew across nearly all varieties, including “Other Cheese,” which rose 34% (+1,942 MT). Year-to-date (YTD) exports to Mexico are now up 36% (+33,479 MT) compared to the same period in 2023, as Mexican buyers continue to prioritize U.S. cheese despite fluctuating prices.
Diverse Regional Demand for U.S. Cheese
Beyond Mexico, the Middle East and North Africa (MENA) region saw substantial YOY growth, with August exports up 136% (+1,245 MT), driven largely by shredded cheese (likely mozzarella). The Philippines also contributed to the uptick in U.S. cheese exports, with shipments to Southeast Asia rising 93% (+870 MT). South America and Central America/Caribbean also posted gains, with exports increasing 43% (+802 MT) and 13% (+755 MT), respectively.
This robust demand has persisted despite a rise in U.S. cheese prices, which have been above $1.80 per pound since May. However, higher prices could eventually temper demand, especially as contracts adjust to current market rates.
NFDM/SMP Exports Reflect Mixed Performance
While cheese exports posted impressive gains, U.S. nonfat dry milk/skim milk powder (NFDM/SMP) exports faced challenges. Totaling 67,990 MT in August, NFDM/SMP exports fell 1% YOY (-788 MT), marking a minor decline but still reflecting the second-highest monthly volume of 2024.
August saw a strong rebound in U.S. NFDM/SMP exports to Mexico, which increased by 9% (+3,082 MT) YOY, reaching a record high for the month. Market analysts suggest that as Mexican milk production wavers, imports of U.S. milk powder have strengthened, possibly for use in cheese production to offset rising cheese prices. Exports to South America and Japan also rose, with shipments to Colombia driving a 13% (+440 MT) increase to the region.
Competitive Pressure in the Global NFDM/SMP Market
Despite these gains, U.S. NFDM/SMP exports to other regions showed signs of strain. Exports to Southeast Asia fell by 8% (-1,956 MT), while shipments to Central America/Caribbean and MENA declined by 23% (-801 MT) and 39% (-660 MT), respectively. Strong competition from New Zealand, which is reorienting its production towards SMP, has added pressure on U.S. exports, particularly as Chinese demand for whole milk powder softens. Additionally, U.S. milk powder production has lagged, driving domestic inventories to their lowest August levels since 2016 as processors tap into reserves to meet commercial demand.
Outlook: Strength Amid Rising Challenges
U.S. dairy exports have shown resilience through August, with cheese continuing to lead the charge. However, rising cheese prices and increased competition in the global milk powder market present potential challenges for U.S. exporters. As the global dairy market shifts in response to production and demand fluctuations, U.S. exporters will need to remain vigilant to sustain momentum through year-end.
