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Volume basis: U.S. dairy export volume (milk solids basis) grew 5% in September (versus the previous year). Through the first three quarters of 2020, dairy exports were up 15.8% by volume.
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Value basis: September export value rose 1.7% to $517.8 million. Through the first three quarters of 2020, dairy exports were valued $4.99 billion, up about 12.6% from the same period in 2019.
- Total milk solids basis: The estimation of U.S. exports as a percentage of total production were not available at Progressive Dairy’s deadline.
Shaping September’s export growth were strong year-over-year sales of whey products, primarily destined for China, and better-than-expected cheese exports to Asia-Pacific markets. With the Phase I agreement in place, demand from China is being fueled by whey, recovering to pre-retaliatory tariff and pre-African swine fever levels, and an expansion of food-grade whey proteins.
September dairy product exports to Southeast Asia extended a year-long growth streak. Through the first three quarters of the year, 28% of total 2020 U.S. exports (milk solids basis) went to Southeast Asia. That is the equivalent of 4.5% of total U.S. milk production.
U.S. dairy shipments to Mexico lagged in September, particularly in the key categories of nonfat dry milk/skim milk powder (NFDM/SMP) and cheese. Ongoing economic troubles, accentuated by the COVID-19 pandemic, have reduced demand from the U.S.’s largest market and southern neighbor.
CWT-assisted exports
As of Nov. 9, the National Milk Producers Federation (NMPF) estimates Cooperatives Working Together (CWT) program-assisted sales for year-to-date 2020 total 28 million pounds of American-type cheeses, 10.9 million pounds of butter, 2 million pounds of anhydrous milkfat, 6.5 million pounds of cream cheese and 48.2 million pounds of whole milk powder. The sales are the equivalent of almost 961 million pounds of milk on a milkfat basis.
Dairy heifer exports jump ... maybe
The USDA reported a big jump in dairy heifer exports in September, although the number for one large shipment may actually represent beef and dairy cattle.
Exports for the month were estimated at 2,376 head, nearly doubling the total for May-August combined and the second-highest monthly total of the year. The September exports included a shipment of 2,050 head to the Republic of Uzbekistan, a country north of Afghanistan in central Asia and a former Soviet republic. Cattle exporters contacted by Progressive Dairy suggest that total likely includes beef and dairy cattle.
The remaining 326 head of dairy cattle moved to Canada.
With the inclusion of the Uzbekistan shipment, the January-September 2020 total stands at 13,462 head, ahead of last year’s pace.
Tony Clayton, Clayton Agri-Marketing Inc., Jefferson City, Missouri, said he expects U.S. exports of dairy cattle to pick up, with large shipments to Vietnam both before and after New Year’s Day. In addition, there’s the possibility of two or three shipments to Pakistan in October-February.
Among U.S. competitors, shipments of dairy cattle to China has resulted in lower inventories and higher prices for heifers sourced from Australia. That’s driving potential customers to the U.S. market. However, U.S. inventories are also diminishing as heifer growers exit the business and dairy producers use beef semen to breed cows.
Exports of U.S. hay continue lower
September 2020 U.S. exports of “other hay” fell to 91,886 metric tons (MT), dipping below 100,000 MT for a second consecutive month. About 86% of the other hay volume went to Japan and South Korea; however, Japan’s total of 57,099 MT was a 12-month low.
At 176,832 MT, September exports of alfalfa hay were the smallest monthly total of the year, with China’s total of 88,431 MT the lowest since February and Japan’s shipments of 36,003 MT the lowest since February 2016.
For more on hay exports and market conditions, check out Progressive Forage’s Forage Market Insights update.
U.S. ag trade balance improves
The overall U.S. ag trade balance improved substantially. September 2020 U.S. ag exports were valued at $12.2 billion, while ag imports were estimated at just under $11 billion, resulting in a $1.3 billion ag trade surplus for the month. It marked just the third month this year that the value of exports was greater than the value of imports.
In year-to-date fiscal year 2020 (October 2019-September 2020), the U.S. ag trade surplus stands at about $2.65 billion, about $2 billion less than the same period a year earlier. On a calendar-year basis, January-September 2020 trade balance is a deficit $2 billion.
Other dairy trade news
Here’s a look at other trade issues affecting U.S. dairy:
- The office of the U.S. Trade Representative (USTR) followed up on a 2018 complaint from the NMPF and USDEC regarding dairy trade access to Indonesia. The review could help secure greater markets for U.S. dairy exports. With an estimated value of $238 million in 2019, Indonesia was the seventh-largest U.S. dairy export market.
- The International Dairy Foods Association (IDFA) asked the USTR to work to remove global trade barriers for U.S. dairy. In comments regarding the USTR’s “National Trade Estimate (NTE) Report on Foreign Trade Barriers to U.S. Exports for 2021,” Becky Rasdall, IDFA vice president for trade policy and international affairs, said more countries have erected obstacles and barriers to U.S. dairy exports in recent years. She said IDFA remains disappointed in a variety of Canadian trade barriers that may violate the U.S.-Mexico-Canada Agreement (USMCA) and is deeply concerned with the European Union’s public intervention stocks programs. IDFA also called out trade-distorting practices by Mexico, Russia, India and Kenya, among others.
- With advocates for a plant-based or plant-only diets expected to have a heavy presence at the 2021 United Nations Food Systems Summit, scheduled for September, the USDEC and the Inter-American Institute for Cooperation on Agriculture (IICA) are on the offensive. The two organizations teamed up to host a virtual symposium, “The Importance of Livestock Production and Animal Protein: The Western Hemisphere Perspective.”
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Dave Natzke
- Editor
- Progressive Dairy
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