Gains made across all categories helped U.S. dairy exports post a 9.6% year-over-year rise in milk solids equivalent in July. The month’s success set the tone for an optimistic second half of the year. Here’s Progressive Dairy’s 30,000-foot view of dairy-related export categories.
Dairy product exports rise in all categories
Growth was seen in all U.S. dairy product export categories in July, which helped the month in a 9.6% year-over-year climb in milk solids equivalent, according to the U.S. Dairy Export Council’s monthly market update. July’s remarkable outcome is due in part to low protein whey leading with a 27% growth, marking the fourth consecutive month of growth for that product. Other categories saw respectable increases, all adding momentum to the month: high protein whey at 23%, nonfat dry milk and skim milk powder at 11% despite declines in production, and cheese at 10%.
As cheese purchases from Mexico continued soaring regardless of a weaker peso, two other regions provided reassurance for a stable export market. Sales to Southeast Asia grew 25% in July, the largest monthly gain in more than two years at 8,631 metric tons more than June’s impressive run, and China’s purchases of low-protein whey improved for the fourth straight month with a 35% rise in product imported.
July’s strong growth was welcomed after dairy product exports have buoyed for the first six months of 2024. Moving into the second half of the year, experts predict global headwinds to continue affecting U.S. dairy exports in the International Demand Analysis, but are optimistic as Southeast Asia is poised to become the largest dairy market, and demand for U.S. cheese and whey proteins continue surging globally.
The USDA released the latest quarterly report in August, which forecast dairy exports at $8 billion for fiscal year 2024. To date, total dairy exports are valued at $5.9 billion, but higher global cheese prices and growing interest in nonfat dry milk and lactose are expected to drive pleasant growth in the year ahead. (Read: Dairy exports remain strong in USDA’s latest forecast)
CWT member cooperatives secure 49 contracts
In the latest report from Cooperatives Working Together (CWT), member cooperatives added 5.2 million pounds of product to CWT-assisted sales in 2024 from 49 contracts secured in August. Those sales are the equivalent of 44.8 million pounds of milk on a milkfat basis and will go to customers in Asia, Central America, the Caribbean, Middle East-North Africa and South America through January 2025.
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.
Following a meeting Aug. 22, the National Milk Producers Federation (NMPF) board of directors approved improvements to CWT. These improvements will be considered at NMPF’s annual meeting in October. (Read: U.S. dairy exports struggle as May slips 5%)
Dairy replacements stay in North America
The month of July brought nearly double the amount of U.S. dairy replacements exported a month prior, according to data collected from the USDA’s Foreign Agricultural Service (FAS). In total, 263 units were exported with animals remaining in North America; Canada, 166; and Mexico, 97.
Now halfway through the year, U.S. dairy heifer replacements are at 12,002. Although July’s exports were in line with July 2023 sales, year-to-date sales are up more than 28% due to large purchases from Saudi Arabia, Turkey and Vietnam in the first quarter.
U.S. dairy embryo exports were down 10% in July from June for a total of 543 embryos exported. Despite the lower sales, China imported nearly three times the number of U.S. embryos from June to July for a total of 303 units. Other major purchasers in July included Germany, Japan and the United Kingdom, although all were down more than 50% from the month prior.
Year-to-date U.S. embryo exports are at 3,466.
Hay exports rebuild in July
After June’s alfalfa hay exports slipped month over month, July showed signs of a small rebound. Total purchased U.S. alfalfa hay in July was 165,461 metric tons, up 7% from the month prior. Like last month, China led the charge of U.S. alfalfa hay imports with 81,493 metric tons, nearly double what was purchased in June. Other major purchasers were Saudi Arabia, Japan and South Korea, although they all imported less than a month ago, down 13%, 11% and 27%, respectively.
Year to date, the U.S. has exported 1,332,912 metric tons of alfalfa hay.
Other hay exports were up 2% in July from the previous month. Japan and South Korea once again purchased the largest quantities of hay. However, while Japan increased their imports of other hay by 7% to 42,780 metric tons, South Korea purchased 14% less (23,022 metric tons) than in June. Taiwan posted the greatest month-over-month imports of other U.S. hay on a percentage basis with a 41% increase in July. The month’s total other hay exports now bring the total exported in 2024 to 621,185 metric tons.
Trade balance deficit grows again
July’s U.S. agricultural trade balance grew once again after a small reprieve from a growing deficit in June. The Department of Commerce/Census Bureau estimated July agriculture exports at $13 billion and imports at $17.5 billion, for a trade balance of -$4.5 billion.
The fiscal year-to-date (Oct. 1, 2023, to July 2024) balance is at a deficit of $23.338 billion.
