The U.S. dairy product export market rebounded in February with export volumes lifting for the first time in over a year. Cheese was the shining star with historic volumes recorded. Here’s Progressive Dairy’s 30,000-foot view at dairy-related export categories.
Booming U.S. cheese exports lead to all-time record
February’s cheese exports rose 27% year over year to 41,854 metric tons (MT), only the seventh time in history that exports exceeded 40,000 MT in a sole month. If adjusted for a 30-day month, that puts February 2024 U.S. cheese exports at an all-time record. Shredded cheese led the growth, posting a 37% year-over-year increase. Latin America proved to be a major driver of those purchases with Mexico leading the way. Not to be forgotten are Japan and the Middle East, where U.S. dairy product demand rebounded and exports rose 37% and 43%, respectively.
The positivity continued in the milk powder and whey categories. Nonfat dry milk/skim milk powder exports rose 3.4% to 65,214 MT, with Asia fueling that increase. This is only the second time in six months that export volume has exceeded year-over-year levels, leading experts to believe economic conditions and demand may be improving for customers in Southeast Asia. Additionally, whey – specifically WPC80+ – extended its year-over-year growth to seven consecutive months with sales rising 10% in February. Brazil and China coveted that market with year-over-year U.S. dairy export purchases up 70% and 17%, respectively.
In total, exporters moved 501.1 million pounds of U.S. dairy products in February, 5.5% more than a year prior. The month’s buoyant exports in the three major dairy products – cheese, milk powder and whey – offered a glimmer of hope that the markets are improving after U.S. dairy product exports have struggled with weak global demand and uncompetitive prices as noted in the U.S. Dairy Export Council’s monthly market update.
CWT-assisted export sales total 9.5 million pounds in March
In a report released April 3, National Milk Producers Federation (NMPF) stated Cooperatives Working Together (CWT) program-assisted member cooperatives secured over 70 contracts in March. That’s 9.5 million pounds of dairy products to the CWT-assisted sales this year, the equivalent of 96.9 million pounds of milk on a milkfat basis. The products will go to Asia, Central America, the Caribbean, Middle East-North Africa, Oceania and South America.
The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to bidders only when export and delivery of the product is verified by required documentation.
With the CWT program’s expiration approaching at the end of 2024, the developed task force issued a survey to NMPF’s members regarding the value of CWT to their organization and the dairy community as a whole. Survey results will be analyzed as part of the task force’s mission of evolving the program to better meet the needs of its members.
Dairy heifer exports drop
After massive January dairy replacement heifer sales, February exports teetered on the much lower end with sales at 222 head, the lowest since September 2023 (185), based on data from the USDA’s Foreign Agricultural Service (FAS). Mexico was the leading purchaser of dairy replacement heifers at 162, followed by Canada at 44 and the Dominican Republic at 16.
Exports of dairy embryos sunk lower, with February 2024 exports at 166, a 67% change from a year prior. Leading the purchases was Germany at 108 embryos. Australia (33), Switzerland (15) and Bangladesh (10) also contributed to the month’s sales.
Hay exports begin to climb again
A slow uptick in monthly hay exports was noticed in February. In total, 186,908 MT of alfalfa hay was exported. A majority of the hay was delivered to China (85,262 MT) and Japan (37,336 MT). While China’s purchases were actually down 14%, Japan’s purchases were up 17% from January. Following Saudi Arabia’s large purchase of dairy replacement heifers in January, hay exports to the country were increased nearly 700% from 2,360 MT to 18,779 MT.
Other U.S. hay exports were also steady in February (88,627 MT), a 10% increase from January. In this market, Japan continued to carry the sales with 59% of the total exports (52,226 MT).
Trade balance outlook improved
February U.S. agricultural trade balance indicated a smaller deficit than in January, but a deficit nonetheless. The U.S. Department of Commerce/Census Bureau estimated February agriculture exports at $15.72 billion and imports at $16.93 billion, resulting in a trade balance of -$1.21 billion for the month. The data reflects a sharp difference from February 2023, when the trade balance was in a surplus at $49.1 million.
The fiscal year-to-date (Oct. 1, 2023, to February 2024) balance settled at a deficit of $4.075 billion.
With much of the year yet to be seen, U.S. agricultural exports in the fiscal year are projected at $170.5 billion, and imports are forecast at $201 billion, according to the USDA’s Economic Research Service. Dairy exports, in particular, are raised $500 million due to higher prices for those key products. China is predicted to remain the largest market of U.S. agricultural exports ($28.7 billion) despite an $800 million reduction from the November forecast due to strong competition from South America in the corn and soybean markets.
