Year-End Review: U.S. Dairy Exports Face Decline in 2023
Source: The DairyNews
December marked the conclusion of a challenging year for U.S. dairy product exports, with heightened competition from the European Union and New Zealand, coupled with economic factors, resulting in a 7% decline.
Here's a comprehensive overview of the key aspects impacting the U.S. dairy export landscape:
1. Dairy Product Export Overview:
Full-year export volume gains were observed in high-protein whey and lactose, up 18% and 5%, respectively.
Despite positive trends in specific categories, the overall value of U.S. dairy exports concluded the year at $8.11 billion, a 16% decrease from the record year in 2022.
Ongoing factors influencing U.S. dairy exports include elevated inflation, sluggish demand, increased milk output from global competitors, and domestic prices higher than global rates.
2. Positive Signals Amid Challenges:
Positive signals emerged with cheese exports and nonfat dry milk/skim milk powder (NFDM/SMP) both experiencing a 1% increase in December.
Southeast Asia showed a recovery in demand, with two consecutive months of increased shipments of NFDM/SMP.
Cooperatives Working Together (CWT) program-assisted exports played a role in American-type cheeses, whole milk powder, and cream cheese.
3. Dairy Heifer Sales and Embryos:
Despite a slight dip in December, U.S. dairy replacement heifer exports for 2023 reached the second-highest total since 2018, driven by demand from China and countries rebuilding dairy herds.
Dairy replacement heifer shipments to Saudi Arabia led the market, with Turkey as the second-leading market.
Dairy embryo exports, mainly to China, experienced a decline in 2023.
4. Hay Exports Performance:
Alfalfa hay exports increased in December, primarily due to elevated sales to China, reaching a three-month high.
Annual alfalfa hay exports, however, fell to a nine-year low at 2.18 million metric tons.
Other hay exports continued to soften, concluding the year with the lowest volume in at least 17 years.
5. Trade Balance and Fiscal Year Outcome:
December's U.S. agricultural trade balance recorded a negative balance of $161 million, contributing to a record-high agricultural trade deficit of $20 billion for the entire year.
Despite a slight surplus in November, the fiscal year-to-date balance settled at a deficit of $323 million for October-December 2023.
In summary, 2023 proved to be a challenging year for U.S. dairy exports, with various factors impacting different segments of the industry. The industry faces a dynamic landscape as it navigates global competition, economic conditions, and changing demand patterns.
1. Dairy Product Export Overview:
Full-year export volume gains were observed in high-protein whey and lactose, up 18% and 5%, respectively.
Despite positive trends in specific categories, the overall value of U.S. dairy exports concluded the year at $8.11 billion, a 16% decrease from the record year in 2022.
Ongoing factors influencing U.S. dairy exports include elevated inflation, sluggish demand, increased milk output from global competitors, and domestic prices higher than global rates.
2. Positive Signals Amid Challenges:
Positive signals emerged with cheese exports and nonfat dry milk/skim milk powder (NFDM/SMP) both experiencing a 1% increase in December.
Southeast Asia showed a recovery in demand, with two consecutive months of increased shipments of NFDM/SMP.
Cooperatives Working Together (CWT) program-assisted exports played a role in American-type cheeses, whole milk powder, and cream cheese.
3. Dairy Heifer Sales and Embryos:
Despite a slight dip in December, U.S. dairy replacement heifer exports for 2023 reached the second-highest total since 2018, driven by demand from China and countries rebuilding dairy herds.
Dairy replacement heifer shipments to Saudi Arabia led the market, with Turkey as the second-leading market.
Dairy embryo exports, mainly to China, experienced a decline in 2023.
4. Hay Exports Performance:
Alfalfa hay exports increased in December, primarily due to elevated sales to China, reaching a three-month high.
Annual alfalfa hay exports, however, fell to a nine-year low at 2.18 million metric tons.
Other hay exports continued to soften, concluding the year with the lowest volume in at least 17 years.
5. Trade Balance and Fiscal Year Outcome:
December's U.S. agricultural trade balance recorded a negative balance of $161 million, contributing to a record-high agricultural trade deficit of $20 billion for the entire year.
Despite a slight surplus in November, the fiscal year-to-date balance settled at a deficit of $323 million for October-December 2023.
In summary, 2023 proved to be a challenging year for U.S. dairy exports, with various factors impacting different segments of the industry. The industry faces a dynamic landscape as it navigates global competition, economic conditions, and changing demand patterns.
