January U.S. dairy export values revealed a listless start to 2024. But it is not all pessimism, as shredded cheese continues to bring encouragement to the marketplace. Here’s Progressive Dairy’s 30,000-foot look at dairy-related export categories.
Record cheese shipments carry export market
Cheese sales to Latin America – Mexico, Central America, South America and the Caribbean – boosted overall U.S. cheese exports to a record 38,299 metric tons (MT), up 13% from January 2023. Shredded product continues to bolster the total cheese export category as shipments rose to 13,409 MT in January, twice that of a year ago.
Additionally, high-protein whey exports (WPC80+) rose for the sixth straight month to a staggering 26% (1,139 MT) in January. The growth did not come from the market’s traditional buyers Japan and Brazil, but rather China, the Netherlands, India and Southeast Asia.
This was welcomed news as soft global economic growth continues to weigh on U.S. dairy exports, and weak U.S. milk production has resulted in less U.S. dairy products available to export with buyers not hurriedly restocking inventories. In January, U.S. dairy export volume fell 5% and export value fell 16% to $597.1 million from the previous January, according to the U.S. Dairy Export Council’s monthly market update. Global dairy demand is expected to be rather stagnant through the first half of the year.
CWT-assisted exports
In their latest report released March 5, National Milk Producers Federation (NMPF) stated Cooperatives Working Together (CWT) program-assisted member cooperative year-to-date export sales totaled 24.5 million pounds of American-type cheeses, 112,000 pounds of anhydrous milkfat, 7.1 million pounds of whole milk powder and 2.2 million pounds of cream cheese. The products went to 24 countries in five regions. These sales were the equivalent of 298 million pounds of milk on a milkfat basis.
Over the last 12 months, CWT-assisted sales were the equivalent of 968.4 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 export and delivery of the product is verified by required documentation.
Dairy heifers sent to Saudi Arabia
In an effort to rebuild its dairy herd that was decimated by foot-and-mouth disease (FMD) outbreaks, Saudi Arabia led U.S. dairy replacement heifer purchases in the new year. Based on data from the USDA’s Foreign Agricultural Service (FAS), January export sales of dairy heifers were 4,097 head, the highest since October 2023. Of those sales, Saudi Arabia accounted for 3,650. Other countries that purchased dairy replacement heifers included Mexico (291), Canada (91) and Honduras (65).
Exports of dairy embryos remained weaker as January sales were estimated at 499, the lowest start to the year since 2021. Germany and China carried the market with 167 and 119 sales, respectively.
Hay exports slow in new year
Monthly hay exports were lower in January due to slow port activity around the Lunar New Year. In total, 170,733 MT of alfalfa hay was exported; 57% of that delivered to China. The second-greatest market was Japan, accounting for 19% of U.S. alfalfa hay exports. January alfalfa exports were recorded as the lowest monthly total since May 2023 (167,159 MT).
Other U.S. hay exports were also subdued in January (80,469 MT), reaching the lowest since August 2023 (76,760 MT). In this market, Japan carried the sales with 53% of the total exports.
Trade balance begins with a large deficit
January’s U.S. agricultural trade balance indicated a large deficit to begin the new year. The U.S. Department of Commerce/Census Bureau estimated January agriculture exports at $14.899 billion and imports at $17.44 billion, resulting in a trade balance of -$2.541 billion for the month.
The data reflects a more drastic deficit compared to January 2023, when the trade balance was reported as a deficit of $85.194 million.
Including November 2023’s slight agricultural trade surplus of $98.96 million, the fiscal year-to-date (Oct. 1, 2023, to January 2024) balance settled at a deficit of $2.865 billion.
