Better whey and butterfat product exports, along with the ever-growing cheese category, helped settle U.S. dairy product exports at a 3% rise in April, marking the second month of the year to record growth. Here’s Progressive Dairy’s 30,000-foot view at dairy-related export categories.
April exports show glimpse of possible good fortune
The U.S. dairy product exports have once again boomeranged from a month of declines to another month of increases, according to the U.S. Dairy Export Council’s monthly market update. April’s report indicated a 3% rise in dairy product exports in milk solid equivalents, mostly due to cheese’s continued rally as well as advances in the whey and butterfat markets.
April’s rise is the second month in 2024 where exports increased. The other month was February, while January and March recorded declines in dairy product exports.
Cheese prolonged its market rally with exports rising 27% to 46,270 metric tons, a near record shipment. March 2024 marked the largest cheese shipment in a single month. While Mexico continued to lead in imports, with purchases climbing 53% to a record 17,249 metric tons, year-over-year volume was up across all geographies. Southeast Asia saw a 102% increase; South Korea, 69%; the Middle East-North Africa, 40%; the Caribbean, 24%; and Japan, 11%.
The high-protein whey and butterfat categories contributed to April’s export growth. Whey continued its streak with a 26% rise in products sold as China and Brazil were large purchasers. Similarly, butter exports jumped 23%. April marked the first monthly year-over-year increase since November 2022.
Couple these product sales with a slowly improving global economic outlook and weakened inventory from other major dairy export regions, the U.S. dairy export marketplace may be positioned for good fortune. However, several factors may sway the pendulum the other way, including decreasing price gaps between the U.S., New Zealand and the European Union, as well political influences weakening the U.S. dollar.
CWT-assisted export year-to-date sales reach 580 million pounds
National Milk Producers Federation (NMPF) reported June 3 that Cooperatives Working Together (CWT) program-assisted member cooperatives recently accepted 16 contracts for 331,000 million pounds of American-type cheese, 5.7 million pounds of whole milk powder and 763,000 pounds of cream cheese. The products are going to customers in Asia, Middle East-North Africa, Oceania and South America.
In May, the program secured over 41 contracts for an additional 13.5 million pounds of product to sales in 2024.
With the latest report, year-to-date export sales total 41.9 million pounds of American-type cheeses, 309,000 pounds of butter, 769,000 pounds of anhydrous milkfat, 17.5 million pounds of whole milk powder and 4.8 million pounds of cream cheese – the equivalent of 580 million pounds of milk on a milkfat basis.
The amount 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.
In May, the CWT Task Force established three expert working groups to develop recommendations for improvement of the program. Those groups include product mix, bid process adjustments and market development. While each team is to assess the program’s effectiveness, they are to make suggestions that reflect three pillars of the program’s overall mission:
- Promote exports of critical dairy products to support domestic market balance and producer prices
- Promote U.S. dairy’s reliability in international markets by helping mitigate price gaps between the U.S. and alternative suppliers for critical dairy products
- Promote long-term U.S. export success through building international demand for U.S. dairy
Dairy heifer replacement exports slip as embryos surge
The market for dairy heifer replacements fell as exports declined a staggering 65% from March to April for a total of 1,808 replacements sold, according to the USDA’s Foreign Agricultural Service (FAS). In March, both Turkey and Vietnam purchased at least 2,000 head. While sales did not surge, those traditional buyers remained, including Turkey as the No. 1 purchaser at 1,609 head. Others were Canada (132), Mexico (40) and Costa Rica (27).
On the contrary, exports of dairy embryos soared 147% in April for a total of 655 embryos sold. Major purchasers included China at 177, Australia (112), Japan (93) and Germany (83). Notably, Australia, with favorable weather conditions and margins, increased their purchase of dairy embryos from 5 the previous month. April marked the country’s largest purchase month this year.
Hay exports fall slightly
After months of continued growth, hay exports fell slightly in April. The global total for purchased U.S. alfalfa hay was 224,875 metric tons for the month, a decline of 3%. China, despite purchasing 17% less than a month prior, remained the top buyer at 91,485 metric tons. Once again, Saudi Arabia posted the largest increase at 57% more U.S. alfalfa hay purchased than in March, with 46,269 metric tons purchased last month.
Other hay exports also declined in April, posting a 4% difference from March. Although 11% less than purchased in March, Japan remained the No. 1 buyer with 49,883 metric tons. South Korea had the greatest percentage increase at 16% more purchased other hay than a month prior with 29,383 metric tons purchased in April.
Largest trade balance deficit on record
April’s U.S. agricultural trade balance marked a record deficit. The U.S. Department of Commerce/Census Bureau estimated April agriculture exports at $14.439 billion and imports at $18.298 billion, for a trade balance of -$3.859 billion. This deficit is the largest on record, but in line with recent trends from 2023-24.
The fiscal year-to-date (Oct. 1, 2023 to April 2024) balance settled at a deficit of $10.784 billion.
