U.S. dairy exporters started the new year where they ended the last one, posting double-digit gains in sales value and milk solids volume, according to a monthly market update from the U.S. Dairy Export Council (USDEC).
Based on January data summarized in the most recent U.S. Dairy Exporter Blog:
- Value basis: Year-over-year exports grew 21% in January (+$121.4 million) to $710.9 million.
- Volume basis: Compared to January 2022, export volumes of core U.S. product categories – cheese, nonfat dry milk/skim milk powder (NFDM/SMP) and whey – all grew by double digits. Sales of milkfat-heavy products (butter, anhydrous milkfat and whole milk powder) struggled.
According to National All-Jersey, January U.S. dairy exports totaled 466.1 million pounds, up 54.5 million from 2022. NFDM was up 19.4 million pounds to 150.4 million, total cheese exports were up 10.1 million pounds at 75 million, and dry whey was up 2.3 million pounds at 29 million.
- Milk solids basis: January exports on a milk solids equivalent basis totaled 181,676 metric tons (MT), up more than 25,025 MT (nearly 16%) from a year earlier.
Export drivers, challenges
NFDM/SMP volumes continued to bounce back thanks to robust demand from Mexico, where year-over-year export volume rose for the fifth straight month. The source of the gains can be traced to solid Mexican economic growth, a tight domestic milk supply and favorable U.S. milk powder and cheese prices.
Whey continued to perform well: China bought more low-protein varieties, while high-protein varieties found eager buyers in a host of different markets. With easing prices and readily available supplies, global demand has started to pick up with the U.S. capitalizing on the opportunity.
Despite rising competition in the cheese space, U.S. exports held strong, thanks to solid growth across the world but particularly in Latin America, Middle East/North Africa and Japan. Looking ahead, challenges remain with low-priced European cheese on the market, uncertainty from China and other economic headwinds.
CWT-assisted exports
The National Milk Producers Federation (NMPF) said the latest Cooperatives Working Together (CWT) program-assisted export contracts covered 181,000 pounds of American-type cheeses, 333,000 pounds of butter and 679,000 pounds of cream cheese.
CWT-assisted member cooperative year-to-date export sales total 10.9 million pounds of American-type cheeses, 383,000 pounds of butter, 17.8 million pounds of whole milk powder and 2 million pounds of cream cheese. These sales are the equivalent of 254.2 million pounds of milk on a milkfat basis.
The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to the bidders only when the export and delivery of the product are verified by the required documentation.
Other dairy export highlights
Separately, the Department of Commerce/Bureau of the Census estimated U.S. dairy exports through the first four months of fiscal year 2023 (October 2022-January 2023) at $3.03 billion, up 22% from the same period a year earlier. Fiscal year-to-date dairy imports were estimated at $1.93 billion, up 34%, with cheese imports up 10% at $566 million.
U.S. dairy heifer, embryo exports slip
The latest monthly export report from USDA’s Foreign Agricultural Service (FAS) estimated January sales of U.S. dairy replacement heifers to foreign buyers at just 218 head, a five-month low. Of those, 177 headed to Mexico and 41 moved to Canada.
At 420 head, January beef heifer exports also fell to a five-month low, with 387 exported to Canada.
Exports of dairy embryos were also weaker in January. At 501, it marked the lowest monthly total since January 2021. China remained the largest market for U.S. dairy embryos during the month at 282. Dairy embryo exports totaled 17,579 in 2022, surpassing the recent record high of 14,590 in 2020.
Hay exports start year weak
Regardless of type or category, January 2023 exports of most U.S. hay products were among the weakest in several years.
Exports of alfalfa hay were estimated at 142,959 MT, the lowest monthly total since January-February 2015. At 77,688 MT, sales to China were the lowest since January 2021. China was the destination for about 54% of all U.S. alfalfa hay exports during the month. Sales to Japan totaled 22,691 MT, 16% of the month’s total.
Exports of dehydrated alfalfa cubes and dehydrated alfalfa meal both hit three-month lows at 3,855 MT and 1,314 MT, respectively; sales of sun-dried alfalfa cubes slipped to just 936 MT, the lowest volume since 2006.
Exports of other hay continued to fall, with January’s total at just 66,830 MT, the lowest monthly total since at least 2005. Sales to the major markets of Japan and South Korea continued downward trends started in the second half of 2022. Japan maintained its spot as the top market, taking about 58% of other hay shipments (38,880 MT) during the month, followed by South Korea at 18% (12,328 MT).
For more on hay exports and market conditions, check out Progressive Forage’s Forage Market Insights update.
Ag trade balance
The U.S. ag trade balance turned slightly negative in January after three months in the positive. The U.S. Department of Commerce/Census Bureau estimated the value of January agricultural exports at $17.02 billion and the value of ag imports at $17.11 billion, yielding a deficit trade balance of $85 million for the month. The 2022 calendar year agricultural trade deficit was over $2 billion.
Other dairy trade news
- Two dairy companies will take part in a trade mission to Panama, March 19-23. The mission will be led by Alexis M. Taylor, USDA trade undersecretary. Representatives of Dairy America Inc., Fresno, California, and Leprino Foods, Denver, Colorado, are among the 26 U.S. delegates scheduled to participate.
- The Consortium for Common Food Names (CCFN), USDEC and NMPF prevailed in a lawsuit decision reinforcing that “Gruyere” is a generic term used to market a type of cheese.
- The three organizations also met on Capitol Hill to meet with lawmakers and underscore the need for the U.S. Trade Representative and the USDA to proactively establish with U.S. trading partners strong protections for common names.
- The CCFN appointed Jeff Schwager as chair, succeeding Errico Auricchio, who led CCFN since its founding in 2012. Schwager most recently served as CEO of Sartori from 2009-22, where he led strategic development and oversaw day-to-day operations of the company.
- The value of 2023 U.S. dairy exports isn’t likely to keep pace with the record-setting year of 2022, but it could still be a close second. The latest USDA quarterly Outlook for U.S. Agricultural Trade report, released Feb. 23, forecast the value of U.S. dairy exports at about $8.8 billion in fiscal year 2023 (Oct. 1, 2022-Sept. 30, 2023). That’s down from the $8.9 billion projected last November but not far behind the $9.1 billion in the value of dairy product exports in fiscal year 2022. Click here for additional information.
