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U.S. Dairy Exports Remain Lower YOY but Increase Seasonally…

  • May 8, 2015
  • by wbabler
According to USDA, the total value of all U.S. dairy exports declined YOY for the eighth consecutive month in Mar ’15, falling 23.9%. The total value of all U.S. dairy exports did increase MOM on a daily average basis for the second consecutive month, increasing 13.6% to a seven month high. Dairy exports typically increase seasonally from February – March, with the total value increasing by an average of 9.3% over the past five years. West Coast port issues were resolved in late February, however export volumes continue to be negatively affected by a strengthening dollar relative to the currencies of traditional buyers of U.S. dairy products. A strengthening dollar results in less purchasing power for importing countries, and ultimately less foreign demand for U.S. products, all other factors being equal. Total US Dairy Exports - May Butter – YOY Export Volumes Decline for 11th Consecutive Month, Finish Down 78.6% Mar ’15 export volumes of butterfat remain weak, declined 78.6% YOY and 6.1% MOM on a daily average basis. The YOY decline was the largest in over five and a half years on a percentage basis. 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 remained lower YOY for 11 consecutive months, with total volumes down 62.0% over the period. Monthly US Butterfat Exports - May 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 and into 2015, however export volumes remain significantly below previous years. ’14-’15 YTD butterfat exports are down 72.8% YOY through the first half of the production season. Cheese – Export Volumes Reach Nine Month High, Remain Down 5.1% YOY Mar ’15 U.S. cheese export volumes continued to strengthen, increasing 4.7% MOM on a daily average to a nine month high. Cheese export volumes have increased by a combined 44.3% over the past two months, which was the largest Jan – Mar increase in 11 years. Despite the recent gains, cheese export volumes remained lower on a YOY basis for the sixth consecutive month, finishing down 5.1%. Cheddar cheese exports remained particularly weak, declining 59.1% YOY. Mar ’15 cheese volumes destined to the two largest U.S. export markets remained higher on a YOY basis, with cheese shipments to Mexico increasing 15.9% and cheese shipments to South Korea increasing 47.8%, however volumes to all other destinations declined 24.7% YOY. ’14-’15 YTD cheese exports are down 10.7% YOY through the first half of the production season, with cheddar cheese exports down 49.3% over the same period. Monthly US Cheese Exports - May Dry Whey – Exports Decline YOY for Tenth Consecutive Month, Finish Down 24.4% Mar ’15 export volumes of dry whey increased 13.1% MOM on a daily average basis but remained lower YOY, finishing down 24.4%. The Feb ’15 – Mar ’15 increase was significantly higher than the five year average January – February seasonal increase of 4.5%. Despite the MOM increase, the Mar ’15 YOY decline in dry whey export volumes was the third largest in over two years on a percentage basis. YOY dry whey export volumes have declined for ten consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months, with total volumes declining by 16.7% over the period. ’14-’15 YTD dry whey exports are down 19.1% YOY through the first half of the production season. Monthly US Dry Whey Exports - May NFDM/SMP – Exports Increase Sharply, Finish up 6.6% YOY Mar ’15 export volumes of NFDM/SMP increased sharply, finishing up 6.6% YOY and 39.6% MOM on a daily average basis. The YOY increase in NFDM/SMP exports was the first experienced in the past eight months, while the February – March increase was the largest on record. U.S. NFDM/SMP exports to Mexico were particularly strong, increasing by 67.5% YOY, while accounting for nearly half of total Mar ’15 NFDM/SMP shipments. NFDM/SMP exports to China remained weak, however, declining by 67.4% YOY. ’14-’15 YTD NFDM/SMP exports remain down 9.9% YOY through the first half of the production season. Monthly US NFDM-SMP Exports - May Overall, U.S. dairy export volumes were equivalent to 15.9% of total U.S. milk solids production in Mar ’15, the most since Jul ’14. See the chart below for a summary of key U.S. dairy product exports as a percentage of production in Mar ’15 vs. a year ago. US Dairy Exports, percentage of Production - May
U.S. Dry Product Stocks Update – May ’15
U.S. Milk per Cow Update – May ’15
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