The U.S. turned in an agricultural trade deficit in April, according to USDA’s monthly export and import estimates. Ag exports were valued at $9.6 billion; imports were estimated at just under $10 billion. A review of dairy product, genetics and hay exports follow.
Milk powders, whey proteins offer bright spot in dairy export picture
Monthly U.S. exports remain well below the three-year average, but April’s bright spots included improved shipments of milk powder and whey proteins, leading to the highest overall volume in 10 months, according to Alan Levitt, with the U.S. Dairy Export Council.
U.S. exporters shipped 150,713 tons of milk powders, cheese, butterfat, whey and lactose in April, up 11 percent from March (on a daily average basis), but still down 19 percent year-over-year. April overall exports were valued at $366.7 million, down 31 percent from a year ago.
Shipments of nonfat dry milk/skim milk powder (NDM/SMP) were the most since last October, built mainly on sales to Mexico. Whole milk powder exports were the highest since May 2010. Exports of whey protein concentrate (WPC) had the second-biggest month ever, with sales to China, southeast Asia and Mexico up.
Exports of the other large-volume categories – cheese, dry sweet whey and lactose – were well off the pace of a year ago.
On a total milk solids basis, U.S. exports were equivalent to 13.4 percent of U.S. milk production in April, matching February for the highest figure in six months. Imports were equivalent to 3.3 percent of production, the lowest in six months.
U.S. dairy exports as a percent of total production, April 2016
Nonfat dry milk/skim milk powder – 45 percent
Total cheese – 4.7 percent
Butterfat – 1.6 percent
Dry sweet whey – 34 percent
Lactose – 71 percent
Total milk solids – 13.4 percent
Sources: USDA, U.S. Dairy Export Council and National Milk Producers Federation
U.S. dairy cattle exports lower, but embryos grow
The U.S. dairy genetics export market hopped back on the roller coaster lower in April.
After topping 1,000 head exported in each of the previous two months, April 2016 foreign sales of live female dairy animals were estimated at just 304 head. Canada was the leading destination, at 171 head, followed by Mexico, at 133.
The April report again fails to account for about 260 dairy heifers shipped to Pakistan earlier this year. Previously, Ellen Dougherty, with USDA's Foreign Ag Service, said delays in filing export documents may account for the absence.
Gerardo Quaassdorff, DVM, sales and management consultant with TK Exports Inc., TKE Agri-Tech Services Inc., Culpeper, Virginia, said the strength of the U.S. dollar against currencies in countries competing for exports continues to be an obstacle to U.S. live cattle exports. The global glut of milk and dairy products is also a factor.
While interest remains strong for U.S. dairy replacement cattle, foreign buyers are sitting on the fence waiting for prices to decline further, said Tony Clayton, president of Clayton Agri-Marketing Inc., Jefferson City, Missouri. “It seems we test the bottom every week,” he said.
Two countries looking to gain access to U.S. replacement dairy cattle are Syria and Algeria.
The U.S. government has imposed trade sanctions due to Syria’s political turmoil, although the U.S. Treasury Department does grant permission for sales of agricultural products.
Farmers in Algeria are pushing to open their market to U.S. cattle, seeking an alternative to the cattle they currently import from France.
The Middle East will be quiet for U.S. cattle trade during the observance of Ramadan, June 6 to July 7, Clayton said.
Dairy embryo exports
Foreign sales of U.S. dairy embryos improved. Exports totaled 972 in April 2016. The month’s exports were valued at $843,000.
China was the leading market in April, purchasing 348 dairy embryos, followed by Japan, at 140. South Africa and the Netherlands each received about 120 embryos, and Russia, which has an embargo on U.S. dairy product exports, took 86.
Imports of genetics are playing a role in improving the quality of China’s dairy cattle. Increased cattle imports from Australia and New Zealand, and their subsequent offspring, are helping support China’s expansion in fluid milk production in 2016.
With Russia blocking imports of dairy products and other foods from the European Union and U.S., Asian businesses are investing in Russia’s dairy production. Recent announcements said Vietnamese dairy producer TH Group broke ground on a 45,000-cow dairy in Volokolamsk, in the Moscow region, and Thailand's Charoen Pokphand Group (CP Group) planned an 80,000-cow milk and dairy complex in the Ryazan region.
Russian agriculture minister Alexander Tkachev, quoted in a Russian newspaper on June 3, said Russia hopes to be completely reliant on domstically produced milk, meat and vegetables by 2020.
However, the USDA Foreign Agricultural Service Global Agricultural Information Network estimated a 2016 Russian dairy cow inventory of about 7.55 million head, 2.6 percent less than 2015. Milk production was estimated down 1.5 percent.
Alfalfa exports maintain strength
U.S. alfalfa hay exports were down in April, but still tipped the scales at more than 190,000 metric tons for a second consecutive month, according to USDA’s Foreign Ag Service.
April 2016 alfalfa hay exports were estimated at 192,143 metric tons, down from the March total of 199,809 metric tons, but up slightly from April 2015. China, which is building its domestic dairy herd, was the only country to increase alfalfa and other hay shipments from the U.S. compared to March, noted Christy Mastin, international sales manager with Eckenberg Farms Inc., Mattawa, Washington. However, shipments to China were less than April 2015, and shipments to major southeast Asia markets were down compared to a year ago. Year-over-year increased shipments to the Middle East, led by United Arab Emirates and Saudi Arabia, somewhat offset those declines.
See the full Progressive Forage article. PD
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Dave Natzke
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