U.S. Dairy Exports Show Resilience in August, Driven by Cheese Demand
Source: DairyNews.today
U.S. dairy exports saw modest gains in August 2024, supported by robust global cheese demand, according to the U.S. Dairy Export Council (USDEC). Milk solids equivalent (MSE) volume rose 1.7% year-over-year (YOY), nudging year-to-date (YTD) volume slightly into positive territory at +0.1%.
This minor increase reflects the market's volatility over the first eight months of 2024, with MSE volume showing gains and losses in equal measure.
In terms of export value, the U.S. dairy sector posted a significant 10% YOY increase in August, reaching $708 million—the highest monthly surge this year. This rise was attributed to climbing commodity prices, paired with a strong portfolio focus on cheese and protein products.
Cheese Exports Surge Amid Strong Global Demand
Demand for cheese has been a key driver, with global cheese trade among major suppliers expanding for 10 consecutive months through July. Despite a sharp uptick in U.S. cheese prices earlier this year, the U.S. remains a major supplier, capturing gains across multiple regions. U.S. cheese exports increased by 15% YOY in August (+5,579 MT), as the demand for cheese continued to show resilience against price hikes.
Whey Exports Steady Despite China’s Reduced Orders
U.S. whey exports continued to grow in August, although at a slower pace than in previous months. Low-protein whey shipments rose by 5% YOY (+2,072 MT), a deceleration fr om the May-July average of 19%. This slowdown was largely due to a 12% reduction in purchases by China, the largest market for U.S. low-protein whey, wh ere economic pressures and a fluctuating pig sector have influenced demand. However, stronger shipments to other markets helped counterbalance the shortfall, with Southeast Asia (+20%), South America (+86%), and the Middle East/North Africa (+1,075%) all registering notable increases.
U.S. whey protein concentrate (WPC80+) exports also saw impressive gains, particularly to China, where shipments surged by 281% YOY (+2,521 MT) to reach near-record highs. This helped offset declining exports to Japan and Brazil, as U.S. suppliers responded to shifting market dynamics.
NFDM/SMP Exports Decline Amid Regional Variability
Nonfat dry milk/skim milk powder (NFDM/SMP) exports fell by 1% YOY in August (-788 MT), with a decline in Southeast Asia dragging overall performance. Despite a 32% increase in shipments to the Philippines (+3,102 MT), significant declines in Vietnam (-2,531 MT) and Indonesia (-1,540 MT) contributed to the downward trend. However, Mexico’s demand for NFDM/SMP showed signs of recovery, marking its second consecutive monthly gain with a 9% YOY increase (+3,082 MT).
Market Outlook: Optimism and Caution Ahead
As the global economy stabilizes, with inflation nearing pre-pandemic levels, the outlook for U.S. dairy exports remains cautiously optimistic. The World Bank predicts that inflation will continue to trend downward through 2025/26, creating a more favorable environment for trade. Additionally, China’s recent economic stimulus package—its most substantial since the pandemic—is expected to boost internal consumption, which may benefit U.S. dairy exports indirectly, despite incentives for domestic dairy production.
Nevertheless, several risk factors could temper future growth. These include potential climate-related disruptions and ongoing geopolitical tensions, particularly in the Middle East and Ukraine. U.S. dairy exporters will need to navigate these challenges as they seek to sustain growth in an increasingly complex global market.
In terms of export value, the U.S. dairy sector posted a significant 10% YOY increase in August, reaching $708 million—the highest monthly surge this year. This rise was attributed to climbing commodity prices, paired with a strong portfolio focus on cheese and protein products.
Cheese Exports Surge Amid Strong Global Demand
Demand for cheese has been a key driver, with global cheese trade among major suppliers expanding for 10 consecutive months through July. Despite a sharp uptick in U.S. cheese prices earlier this year, the U.S. remains a major supplier, capturing gains across multiple regions. U.S. cheese exports increased by 15% YOY in August (+5,579 MT), as the demand for cheese continued to show resilience against price hikes.
Whey Exports Steady Despite China’s Reduced Orders
U.S. whey exports continued to grow in August, although at a slower pace than in previous months. Low-protein whey shipments rose by 5% YOY (+2,072 MT), a deceleration fr om the May-July average of 19%. This slowdown was largely due to a 12% reduction in purchases by China, the largest market for U.S. low-protein whey, wh ere economic pressures and a fluctuating pig sector have influenced demand. However, stronger shipments to other markets helped counterbalance the shortfall, with Southeast Asia (+20%), South America (+86%), and the Middle East/North Africa (+1,075%) all registering notable increases.
U.S. whey protein concentrate (WPC80+) exports also saw impressive gains, particularly to China, where shipments surged by 281% YOY (+2,521 MT) to reach near-record highs. This helped offset declining exports to Japan and Brazil, as U.S. suppliers responded to shifting market dynamics.
NFDM/SMP Exports Decline Amid Regional Variability
Nonfat dry milk/skim milk powder (NFDM/SMP) exports fell by 1% YOY in August (-788 MT), with a decline in Southeast Asia dragging overall performance. Despite a 32% increase in shipments to the Philippines (+3,102 MT), significant declines in Vietnam (-2,531 MT) and Indonesia (-1,540 MT) contributed to the downward trend. However, Mexico’s demand for NFDM/SMP showed signs of recovery, marking its second consecutive monthly gain with a 9% YOY increase (+3,082 MT).
Market Outlook: Optimism and Caution Ahead
As the global economy stabilizes, with inflation nearing pre-pandemic levels, the outlook for U.S. dairy exports remains cautiously optimistic. The World Bank predicts that inflation will continue to trend downward through 2025/26, creating a more favorable environment for trade. Additionally, China’s recent economic stimulus package—its most substantial since the pandemic—is expected to boost internal consumption, which may benefit U.S. dairy exports indirectly, despite incentives for domestic dairy production.
Nevertheless, several risk factors could temper future growth. These include potential climate-related disruptions and ongoing geopolitical tensions, particularly in the Middle East and Ukraine. U.S. dairy exporters will need to navigate these challenges as they seek to sustain growth in an increasingly complex global market.
