U.S. Dairy Exports Decline YOY for Fourth Consecutive Month…
According to USDA, the total value of all U.S. dairy exports in Nov ’14 declined YOY for the fourth consecutive month, falling 13.5% YOY. The Aug-Nov ’14 YOY declines were for first experienced in over a year and a half, with the Sep-Nov ’14 YOY declines being the largest in over five years. The total value of all U.S. dairy exports increased slightly MOM, up 0.3% vs. Oct ’14 figures on a daily average basis after declining MOM in five of the last seven months.
Butter – Export Volumes Remain Weak, Down 68.2% YOY
Nov ’14 export volumes of butterfat continue increased 42.7% MOM on a daily average basis from the two year low reached in Oct ’14, but continued to decline YOY, down 68.2% and 45.8% vs. the five year average November butterfat export volumes. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. YOY butterfat exports have declined for six consecutive months, down 55.2% over the period.
U.S. butterfat exports to Middle Eastern and Northern African countries were particularly weak, especially in Saudi Arabia, Morocco and Egypt as combined exports declined 90.6% YOY in Nov ’14. Exports to Saudi Arabia, Morocco and Egypt accounted for nearly a third of the total U.S. butterfat exports in November of last year. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. The spreads peaked in Sep ’14, with U.S. butter prices trading at an 80.6% premium to European prices and a 128.1% premium to Oceania prices. Domestic butter price premiums have declined throughout the fourth quarter of 2014, but prices remain at a premium to international prices.
Cheese – Export Volumes Reach New 21 Month Low
Nov ’14 U.S. cheese exports declined 13.2% YOY and 3.6% MOM on a daily average basis to a new 21 month low. The YOY decline was the second in a row after 16 consecutive months of YOY gains were experienced from Jun ’13 to Sep ’14. Cheddar cheese exports were particularly weak, down 45.4% YOY and 29.0% MOM on a daily average basis. Similarly to butter exports, cheese exports to Middle Eastern and North African countries were weak, with combined shipments to Saudi Arabia, Morocco and Egypt down 74.0% YOY.
Dry Whey – YOY Exports Decline for Sixth Consecutive Month
Nov ’14 export volumes of dry whey declined 17.2% YOY and 8.1% MOM on a daily average basis. YOY dry whey export volumes have declined for six consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. The 17.2% YOY decline was the second largest decline in the last 23 months.
NFDM/SMP – YOY Exports Decline for Fourth Consecutive Month
Nov ’14 export volumes of NFDM/SMP declined 6.7% YOY but increased 13.8% MOM on a daily average basis. NFDM/SMP exports have declined for four consecutive months after increasing for 15 of the 16 months leading up to Aug ’14. YOY declines persisted despite export volumes to Mexico increasing significantly, up 74.5% YOY. U.S. NFDM/SMP exports to Mexico accounted for 52.6% of total Nov ’14 shipments. Despite the MOM increase, U.S. NFDM/SMP export volumes remain 29.8% lower than the record high volumes shipped in Jun ’14.
See the chart below for a summary of key U.S. dairy product exports as a percentage of production in Nov ’14 vs. a year ago.
Butter – Export Volumes Remain Weak, Down 68.2% YOY
Nov ’14 export volumes of butterfat continue increased 42.7% MOM on a daily average basis from the two year low reached in Oct ’14, but continued to decline YOY, down 68.2% and 45.8% vs. the five year average November butterfat export volumes. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. YOY butterfat exports have declined for six consecutive months, down 55.2% over the period.
U.S. butterfat exports to Middle Eastern and Northern African countries were particularly weak, especially in Saudi Arabia, Morocco and Egypt as combined exports declined 90.6% YOY in Nov ’14. Exports to Saudi Arabia, Morocco and Egypt accounted for nearly a third of the total U.S. butterfat exports in November of last year. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. The spreads peaked in Sep ’14, with U.S. butter prices trading at an 80.6% premium to European prices and a 128.1% premium to Oceania prices. Domestic butter price premiums have declined throughout the fourth quarter of 2014, but prices remain at a premium to international prices.
Cheese – Export Volumes Reach New 21 Month Low
Nov ’14 U.S. cheese exports declined 13.2% YOY and 3.6% MOM on a daily average basis to a new 21 month low. The YOY decline was the second in a row after 16 consecutive months of YOY gains were experienced from Jun ’13 to Sep ’14. Cheddar cheese exports were particularly weak, down 45.4% YOY and 29.0% MOM on a daily average basis. Similarly to butter exports, cheese exports to Middle Eastern and North African countries were weak, with combined shipments to Saudi Arabia, Morocco and Egypt down 74.0% YOY.
Dry Whey – YOY Exports Decline for Sixth Consecutive Month
Nov ’14 export volumes of dry whey declined 17.2% YOY and 8.1% MOM on a daily average basis. YOY dry whey export volumes have declined for six consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. The 17.2% YOY decline was the second largest decline in the last 23 months.
NFDM/SMP – YOY Exports Decline for Fourth Consecutive Month
Nov ’14 export volumes of NFDM/SMP declined 6.7% YOY but increased 13.8% MOM on a daily average basis. NFDM/SMP exports have declined for four consecutive months after increasing for 15 of the 16 months leading up to Aug ’14. YOY declines persisted despite export volumes to Mexico increasing significantly, up 74.5% YOY. U.S. NFDM/SMP exports to Mexico accounted for 52.6% of total Nov ’14 shipments. Despite the MOM increase, U.S. NFDM/SMP export volumes remain 29.8% lower than the record high volumes shipped in Jun ’14.
See the chart below for a summary of key U.S. dairy product exports as a percentage of production in Nov ’14 vs. a year ago.