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HomeDairy BlogsU.S. dairy export development streak hits seven months in October

U.S. dairy export development streak hits seven months in October

NFDM/SMP exports rise for first time this yr, whereas whey, cheese and butter proceed to put up stable year-over-year good points.

October U.S. dairy exports rose 9% on a milk solids equal (MSE) foundation, marking the seventh consecutive month of development for U.S. suppliers. Most product classes posted good points, together with nonfat dry milk/skim milk powder (NFDM/SMP), which recorded its first year-over-year enhance since November 2021.

For the primary 10 months of the yr, U.S. export quantity was up by 4% MSE.

U.S. export worth rose 24% to $818.7 million in October. By way of 10 months, worth stood at $8.08 billion, already an annual file, topping the 12-month whole of $7.70 billion set in 2021, because of elevated high-value cheese and butter shipments in addition to greater dairy costs on the whole.

October U.S. good points had been widespread throughout most main merchandise, together with NFDM/SMP, whey, cheese and butter.

NFDM/SMP exports grew 11% (+6,975 MT), ending 11 straight months of year-over-year (YOY) shortfalls. Shipments to Mexico jumped 37%—the second straight month of double-digit will increase—fueling the achieve (see under for extra).

U.S. whey exports rose 17%, with good points throughout all product classes: dry whey, whey protein focus (WPC), modified whey and WPC80+. For WPC80+, it was the primary year-over-year enhance since April 2022. A pointy discount in shipments to China has blunted U.S. WPC80+ exports all yr, however information exhibits volumes are recovering as provide availability grows and costs ease.

Most notably, Japan has been a driving pressure behind U.S. WPC80+ quantity in 2022. U.S. exports there doubled (+547 MT) in October and thru the primary 10 months of the yr had been up 35% (+2,850 MT), mitigating greater than half the decline to China.

October U.S. cheese exports rose 4% (+1,589 MT) with widespread geographic good points. Shipments to Japan rose 39% (+1,260 MT), quantity to the Center East/North Africa elevated 67% (+1,029 MT) and exports to Mexico grew 12% (+952 MT). Whereas year-over-year U.S. cheese exports have now risen for 16 straight months, good points shifting ahead could also be more difficult (see under for extra).

Chart2 (3)-Dec-06-2022-08-55-24-6170-PM

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Listed here are our two major takeaways from the October U.S. dairy export commerce information:

Cheese Exports Nonetheless Rising – What’s Subsequent?

As talked about above, U.S. cheese exports continued to impress in October, climbing 4% year-over-year (+1,589 MT), which marks the 16th straight month of rising cheese exports.

Larger image, 4% development in cheese exports is an extremely optimistic story for U.S. exports however does proceed the development of deceleration within the second half of 2022. By way of the primary six months of the yr, U.S. cheese exports grew by 17% YOY however solely by 4% since July. What explains the distinction and what can we count on going ahead?

Chart1 (2)-Dec-06-2022-07-34-27-7284-PM

Within the first half of the yr, the U.S. had a number of elements in its favor. First, the U.S. had the provision accessible for export. From January to June 2022, U.S. home consumption of American-type cheeses fell by 1.7%, whereas manufacturing held regular. With exports more and more vital for sustaining cheddar market steadiness, U.S. American-type cheese exports grew by 59% within the first half!

On the identical time, provides from Europe and New Zealand had been comparatively weak; EU27+UK shipments fell by 3% and New Zealand volumes by 13% within the first half of the yr – a complete decline of over 40,000 MT from these two markets. This provide dynamic opened the door for the U.S. to seize strong cheese demand, significantly from Latin America. Because of this, U.S. cheese exports to Mexico grew by 18% (+9,304 MT), to Central America by 43% (+6,543 MT), and to the Caribbean by 38% (+3,134 MT) in H1.

Extra not too long ago, the elements have shifted much less favorably to export development: European milk manufacturing is recovering with greater farmgate milk costs, resulting in extra competitors abroad; U.S. home gross sales of American-type cheese have picked up, limiting exportable provide development; and Latin American cheese demand is being impacted by cheaper analogue cheese as palm oil costs have fallen of late and financial pressures push customers towards low-cost alternate options.

Wanting forward, these headwinds are prone to stay available in the market into 2023. Nonetheless, USDEC stays optimistic. With the dedicated U.S. funding into cheese exports, forecasted development in U.S. milk provide (and subsequently cheese manufacturing), in addition to demand development in Asia and different key worldwide markets, we forecast cheese exports ought to continue to grow into 2023 – albeit at a development charge nearer to 4% than the 17% seen within the first half of 2022.

NFDM/SMP Positive aspects for First Time in 11 Months

12 months-over-year U.S. shipments of NFDM/SMP jumped 10% (+6,975 MT) in October. It was the primary month-to-month enhance since November 2021. At 73,146 MT, it was the biggest month-to-month quantity since this previous Could when U.S. suppliers shipped 80,406 MT.

Improved U.S. provide—together with downward-trending pricing—have been the principle drivers.

On the provision facet, month-to-month U.S. milk manufacturing grew 1.2% from July-October (after declining 0.7% over the primary half of the yr), fueling a rise in U.S. NFDM manufacturing of 5% over the identical interval. (U.S. SMP manufacturing in contrast stays within the doldrums in 2022—down 24% over the primary 10 months.)

With improved exportable NFDM provides, shipments to the biggest single U.S. milk powder market, Mexico, have picked up considerably. U.S. NFDM/SMP shipments to our southern neighbor jumped 22% (+6,138 MT) in September and surged 37% in October (+10,268 MT).

Against this, U.S. NFDM/SMP shipments to Mexico had been down 6% by the primary eight months of the yr. The sturdy September and October put year-to-date shipments to Mexico up by 1%. The Mexican peso has additionally carried out higher than most different worldwide currencies in 2022, dampening a few of the value impacts.

Whereas Mexico was the principle driver of U.S. NFDM/SMP good points, different key markets additionally recorded encouraging development in October. For instance, U.S. suppliers grew YOY NFDM/SMP shipments to Indonesia (+47%, +2,514 MT); the Caribbean (+261%, +1,370 MT); Malaysia (+89%, +1,128 MT); and China (+32%, +814 MT).

The most important letdown got here within the Philippines, the place October U.S. exports had been minimize in half (-50%, -6,613 MT). Previous to October, U.S. NFDM/SMP exports to the Philippines had been working 7% up on the earlier yr. The poor October displaying dropped year-to-date quantity to the nation to -1%.

Regardless of the October enhance, year-to-date U.S. NFDM/SMP exports by October stay down 8%.

Learn extra about world dairy markets:

The U.S. Dairy Export Council fosters collaborative business partnerships with processors, buying and selling firms and others to boost world demand for U.S. dairy merchandise and components. USDEC is primarily supported by Dairy Administration Inc. by the dairy farmer checkoff. How one can republish this put up.  


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