Healthy growths in cheese and whey sales buoyed U.S. dairy product exports in June as nonfat dry milk and skim milk powder, lactose and milk protein concentrates took hits. At the midpoint of 2024, U.S. dairy product exports were down 1.7% in milk solids equivalent. Here’s Progressive Dairy’s 30,000-foot view at dairy-related export categories.
Dairy product exports down again in latest report
As has been the story for much of the year, cheese and whey remained strong in the U.S. dairy product export market while other categories lagged, according to the U.S. Dairy Export Council’s monthly market update. In June, U.S. dairy exports recorded 0.3% decline from the month prior as gains in cheese, whey, butterfat and whole milk powder offset drops in nonfat dry milk and skim milk powder (NFDM/SMP), lactose and milk protein concentrates.
U.S. cheese sales surged for the sixth straight month, gaining 9% in June, to become the second-biggest June at 38,876 metric tons of product, following June 2022. While the category continues to do well, the June report revealed the first time monthly U.S. shipments have fallen below 40,000 metric tons since January, indicating rising prices from spring might now be impacting sales.
Whey exports saw a third straight month of double-digit gains at 12% in June, and all four whey categories (dry whey, WPC, modified whey and WPC80+) rose for the first time since January 2023. Big purchasers of whey products were China and Brazil. China’s demand for whey (rising 22% in June) reflects the country’s recovering hog production.
While China’s appetite for whey was plentiful, the demand for total U.S. dairy product imports has been disappointing. In June, total U.S. dairy shipments to China fell 1% year over year. Yet other countries’ desire for U.S. dairy product imports offset China’s lagging interest. Shipments to Southeast Asia bounced back after two months of declines with NFDM/SMP and low-protein whey leading the gains at 21% and 19%, respectively. Additionally, cheese exports to Central America jumped 27% while Mexico’s U.S. dairy product imports fell 12%, the result of a weaker peso and disappointing gross domestic product growth in the second quarter.
CWT-assisted export sales top 5.8 million pounds
As of July 26, Cooperatives Working Together (CWT) member cooperatives secured 52 contracts, adding 5.8 million pounds of product to CWT-assisted sales in 2024. The full month’s report was not yet available at the time of publishing.
July’s committed product volumes are the equivalent of 56.8 million pounds of milk on a milkfat basis and include 4.731 million pounds of cheese, 780,000 pounds of cream cheese, 220,000 pounds of butter and 75,000 pounds of anhydrous milkfat. These products will go to customers in Asia, Central America, the Caribbean and Oceania.
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.
The National Milk Producers Federation’s (NMPF) board of directors will hold a virtual meeting Aug. 22 to review changes proposed to the CWT export assistance program. Pending board approval, individual cooperatives will determine their support for the program in its new form. The board is set to evaluate the level of support for the program going into 2025 at its Oct. 21 meeting.
The recommended changes were first approved by the NMPF Executive Committee July 9. (Read: U.S. dairy exports struggle as May slips 5%)
Majority of dairy heifer replacements move to Canada
Sales of U.S. dairy heifer replacements were down 44% month over month with June posting a slim 135 animal units exported, based on data from the USDA’s Foreign Agricultural Service (FAS). A majority of those sales went to Canada (129), followed by a sprinkling of heifer replacements to Russia (6).
To date, U.S. dairy heifer replacements are at 11,739 for 2024, nearly 30% higher than this time a year ago largely due to the heifer purchases from Saudi Arabia, Turkey and Vietnam in quarter one.
U.S. dairy embryo sales were down also, 18% lower in June than May for a total of 601 embryos exported. Top purchasers were Germany (132), Japan (115) and the United Kingdom (112). Japan more than doubled its purchases month over month, and Australia purchased 42 times more embryos than what was bought in May.
Year-to-date sales are at 2,293 units, a stark contrast from the same period last year at 6,265 U.S. dairy embryo exports. Last year’s surge in exports was led by countries rebuilding their dairy herds from foot-and-mouth disease outbreaks.
Hay exports slip in June
The total purchased U.S. alfalfa hay in June was 154,397 metric tons, down 22% from May and down 11% from a year prior. Despite less hay purchased, China, Saudi Arabia and Japan continue to lead the charge in U.S. alfalfa hay imports with 54,544 metric tons, 33,365 metric tons and 30,211 metric tons of alfalfa hay purchased in June, respectively. Year to date, the U.S. has exported 1,167,451 metric tons of alfalfa hay.
Other hay purchases were similar with a 19% decrease in exports from May but nearly 2% growth from June 2023. Japan and South Korea posted the most purchased at 40,128 metric tons and 26,636 metric tons, respectively. Although Japan’s purchases were down 27% from a month prior while South Korea increased purchases by 5%. June’s exports brought the total other hay exported in 2024 to 541,923 metric tons.
June’s trade balance shrinks deficit gap
June’s U.S. agricultural trade balance showed slight reprieve from previous months’ growing deficit. The U.S. Department of Commerce/Census Bureau estimated June agriculture exports at $12.94 billion and imports at $16.522 billion, for a trade balance of -$3.582 billion. June’s value is $687 million less than a month prior.
The fiscal year-to-date (Oct. 1, 2023 to May 2024) balance is at a deficit of $18.8 billion.
