U.S. dairy export volume posted an 11-month high in May (on a daily average basis), according to Alan Levitt, with the U.S. Dairy Export Council. The strong showing was led by improved sales of whey, lactose and whole milk powder (WMP).
Despite improved dairy export volumes, U.S. agricultural trade turned in a third consecutive monthly deficit in May, the first time that’s happened looking back over USDA estimates dating back to late 1975.
U.S. dairy export volume improves
U.S. exporters shipped 157,909 tons of milk powders, cheese, butterfat, whey and lactose in May, up 1 percent from April (daily-average basis), but still down 10 percent year-over-year. And despite the high-water mark in May, dairy product export volume is still 15 percent below peak levels seen in the first-half of 2014.
Overall May exports were valued at $379.4 million, down 24 percent from a year ago.
Total whey exports were 42,378 tons, the most since last May, led by improved volumes to China. Exports of whey protein concentrate (WPC) were near-record highs for the second straight month. Dry whey export volume in May (16,229 tons) was the most since last July, with stronger sales to China vs. recent months.
Trade data shows a large increase in exports of WMP. U.S. suppliers moved 9,198 tons, the most in more than 17 years, and more than triple the volume posted a year ago. For the second straight month, more than 70 percent of the sales went to Mexico.
Among other key products, shipments of NDM/SMP were 43,899 tons, down 28 percent year-over-year.
Cheese exports, at 23,909 tons in May, were down 19 percent from last year, marking the 20th straight month in which cheese exports trailed prior-year levels. Year-to-date volume is the lowest since 2011.
Sales of butterfat in May were just 645 tons, down 57 percent from last year and the lowest figure since July 2009. Exports were less than 1 percent of U.S. butter production during the month.
On a total milk solids basis, U.S. exports were equivalent to 13.7 percent of U.S. milk production in May, the highest since last September. Imports were equivalent to 3.6 percent of production.
May U.S. dairy cattle exports remain weak
The U.S. dairy cattle export market remained weak in May, with just 360 female dairy cattle replacements finding homes abroad, according to latest trade figures released by USDA’s Foreign Ag Service (FAS).
Combined with April’s sales of 304 head, the two-month total is the lowest since early 2009. May exports were valued at $763,000.
Canda was the leading destination for female replacement cattle in May, at 238 head. Mexico purchased 75 head, and Thailand, an intermittent buyer in the U.S. market, purchased 47 head.
The USDA report still has not accounted for about 300 head reportedly shipped to Pakistan in early March.
Dairy embryo exports
Foreign sales of U.S. dairy embryos increased to the highest level since December 2015. Exports totaled 1,163 in May 2016, and were valued at $1.37 million.
China was the leading market for the month, purchasing 530 dairy embryos, followed by Japan, at 225.
More U.S. alfalfa hay moving abroad
U.S. alfalfa hay exports remain a brighter spot in what is turning into a deficit ag trade picture, according to latest estimates from USDA’s Foreign Ag Service.
May alfalfa hay exports topped 212,200 metric tons, about 20,000 metric tons more than April, and 40,000 metric tons more than May 2015. Chinese alfalfa hay shipments were down slightly, but icreased shipments to the Middle East and Japan offset that decline.
The increases to the United Arab Emirates (UAE) and Saudi Arabia come with a bit of an asterisk, according to Christy Mastin, international sales manager with Eckenberg Farms Inc., Mattawa, Washington.
“This is the alfalfa production from farm ground that was purchased earlier this year, mostly in the Southwest U.S. by companies from these countries for the purpose of exporting the hay,” she said.
The increased volume in May 2016 is also supported by a price drop of $40 per metric ton from 2015 to 2016, Mastin said.
Combined with the higher volume, total alfalfa export values were up more than $4 million from the month before, to $63.5 million.
May exports of other hay increased slightly. Shipments of alfalfa cubes and alfalfa meal were mixed.
The May hay export totals reflect a continued strong start to 2016, despite the challenges posed by currency exchange rates, according to the latest Northwest Farm Credit Service hay market snapshot report.
Through the first part of 2016, shipments to the United Arab Emirates, Taiwan, Saudi Arabia and China were up, but shipments to South Korea and Japan, more traditional markets, were down.
However, in the last six months the Japanese Yen has gained 20 percent against the dollar, strengthening Japanese buying power. Headwinds include relatively inexpensive Australian and Canadian dollars.
Overall trade picture
May U.S. ag exports were valued at $9.777 billion up slightly from April, according to the U.S. Department of Commerce Census Bureau. U.S. agricultural imports were also down slightly, at $9.865 billion, resulting in a trade deficit of about $88.7 million.
Year-to-date fiscal year 2016 (October 2015-May 2016) exports stand at $86.7 billion, with imports at $76.7 billion, yielding a $10 billion ag trade surplus. PD
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Dave Natzke
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