U.S. Dairy Exports Remain Significantly Lower YOY – Feb…
Executive Summary
U.S. dairy export figures provided by USDA were recently updated with values spanning through Dec ’15. Highlights from the updated report include:
• The total value of U.S. dairy exports declined YOY for the 17th consecutive month in Dec ’15, finishing 19.5% below the previous year.
• The U.S. was a net importer of butter for the 11th consecutive month in Dec ’15 as domestic prices remain at a significant premium to international prices.
• NFDM exports remained higher on a YOY basis for the fourth consecutive month, finishing up 33.5%, as demand from Mexico remained particularly strong.
Additional Report Details
According to USDA, the total value of all U.S. dairy exports declined YOY for the 17th consecutive month in Dec ’15, finishing 19.5% below the previous year. U.S. high milkfat dairy product prices continued to remain significantly above international prices throughout Dec ’15 while export volumes also continued 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.
Butter – Export Volumes Remain Lower on YOY Basis for 20th Consecutive Month
Dec ’15 export volumes of butterfat continued to increase off of the eight and a half year low experienced in Sep ’15 but remained weak on a YOY basis, finishing 50.5% below the previous year. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 20 consecutive months, with total volumes down 62.0% over the period. The U.S. was a net importer of butter for the 11th consecutive month in Dec ’15, with total butterfat import volumes finishing over twice as large as total butterfat export volumes throughout the month.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May ’14, reducing export demand. The U.S. / international butter price spread reached an 11 year high during Nov ’15 prior to declining but remaining at a significant premium in Dec ’15. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5%. Overall, ’14-’15 annual U.S. imported butterfat reached a new nine year high.
Cheese – Export Volumes Remain Lower on YOY Basis for 15th Consecutive Month
Dec ’15 U.S. cheese export volumes increased 4.8% MOM on a daily average basis but remained lower on a YOY basis for the 15th consecutive month, finishing down 9.3%. Cheddar cheese exports remained particularly weak, declining 35.9% YOY. U.S. cheddar cheese prices have traded at a premium to international cheddar cheese prices for nine consecutive months through Dec ’15. Dec ’15 cheese volumes destined to Mexico finished lower on a YOY basis for the first time in four months, declining by 5.1%, while shipments to South Korea and Japan remained lower, finishing 36.0% and 36.6% below the previous year, respectively. Cheese volumes destined to Mexico, South Korea and Japan consisted of over half of the total U.S. cheese shipments throughout the month. ’14-’15 annual total cheese exports finished down 14.1% YOY, with cheddar cheese exports finishing down 49.4% YOY and other-than-cheddar cheese finishing down 4.6% YOY. ’15-’16 YTD cheese exports have declined an additional 8.7% throughout the first quarter of the production season.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 19th Consecutive Month
Dec ’15 dry whey export volumes continued to increase slightly from the 11 year low experienced in Sep ’15 but finished lower on a YOY basis for the 19th consecutive month, declining by 24.0% to a 12 year low for the month of December. Dry whey export volumes have increased MOM on a daily average basis for three consecutive months through Dec ’15, however monthly volumes exported from Sep ’15 – Dec ’15 remain at a seven year low. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low while ’15-’16 YTD dry whey exports have declined an additional 28.9% throughout the first quarter of the production season.
NFDM/SMP – Export Volumes Remain Higher on YOY Basis for Fourth Consecutive Month
Dec ’15 export volumes of NFDM/SMP finished higher on a YOY basis for the fourth consecutive month, finishing up 35.5% to a new record high for the month of December. U.S. NFDM/SMP exports to Mexico were particularly strong, increasing by 44.8% YOY while volumes shipped to all other destinations finished 26.7% above the previous year. U.S. NDFM/SMP export volumes to Mexico increased 24.1% YOY throughout 2015 while export volumes shipped to all other destinations declined by 10.1% over the same period. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY however volumes are up 20.2% YOY throughout the first quarter of the ’15-’16 production season.
Dec ’15 U.S. butterfat, cheese and dry whey exports as a percentage of production remained lower than the previous year, however U.S. NFDM/SMP exports as a percentage of production finished higher on a YOY basis for the fourth consecutive month.
Overall, U.S. dairy export volumes were equivalent to 12.8% of total U.S. milk solids production in Dec ’15 while dairy import volumes were equivalent to approximately 3.8% of total U.S. milk solids production.
Butter – Export Volumes Remain Lower on YOY Basis for 20th Consecutive Month
Dec ’15 export volumes of butterfat continued to increase off of the eight and a half year low experienced in Sep ’15 but remained weak on a YOY basis, finishing 50.5% below the previous year. Butterfat exports began to slow in the second quarter of 2014 and have remained lower YOY for 20 consecutive months, with total volumes down 62.0% over the period. The U.S. was a net importer of butter for the 11th consecutive month in Dec ’15, with total butterfat import volumes finishing over twice as large as total butterfat export volumes throughout the month.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May ’14, reducing export demand. The U.S. / international butter price spread reached an 11 year high during Nov ’15 prior to declining but remaining at a significant premium in Dec ’15. ’14-’15 annual butterfat exports finished down 69.9% YOY while annual butterfat imports finished up 172.5%. Overall, ’14-’15 annual U.S. imported butterfat reached a new nine year high.
Cheese – Export Volumes Remain Lower on YOY Basis for 15th Consecutive Month
Dec ’15 U.S. cheese export volumes increased 4.8% MOM on a daily average basis but remained lower on a YOY basis for the 15th consecutive month, finishing down 9.3%. Cheddar cheese exports remained particularly weak, declining 35.9% YOY. U.S. cheddar cheese prices have traded at a premium to international cheddar cheese prices for nine consecutive months through Dec ’15. Dec ’15 cheese volumes destined to Mexico finished lower on a YOY basis for the first time in four months, declining by 5.1%, while shipments to South Korea and Japan remained lower, finishing 36.0% and 36.6% below the previous year, respectively. Cheese volumes destined to Mexico, South Korea and Japan consisted of over half of the total U.S. cheese shipments throughout the month. ’14-’15 annual total cheese exports finished down 14.1% YOY, with cheddar cheese exports finishing down 49.4% YOY and other-than-cheddar cheese finishing down 4.6% YOY. ’15-’16 YTD cheese exports have declined an additional 8.7% throughout the first quarter of the production season.
Dry Whey – Export Volumes Remain Lower on YOY Basis for 19th Consecutive Month
Dec ’15 dry whey export volumes continued to increase slightly from the 11 year low experienced in Sep ’15 but finished lower on a YOY basis for the 19th consecutive month, declining by 24.0% to a 12 year low for the month of December. Dry whey export volumes have increased MOM on a daily average basis for three consecutive months through Dec ’15, however monthly volumes exported from Sep ’15 – Dec ’15 remain at a seven year low. ’14-’15 annual dry whey exports finished down 18.0% YOY to a new 11 year low while ’15-’16 YTD dry whey exports have declined an additional 28.9% throughout the first quarter of the production season.
NFDM/SMP – Export Volumes Remain Higher on YOY Basis for Fourth Consecutive Month
Dec ’15 export volumes of NFDM/SMP finished higher on a YOY basis for the fourth consecutive month, finishing up 35.5% to a new record high for the month of December. U.S. NFDM/SMP exports to Mexico were particularly strong, increasing by 44.8% YOY while volumes shipped to all other destinations finished 26.7% above the previous year. U.S. NDFM/SMP export volumes to Mexico increased 24.1% YOY throughout 2015 while export volumes shipped to all other destinations declined by 10.1% over the same period. ’14-’15 annual NFDM/SMP exports finished down 6.1% YOY however volumes are up 20.2% YOY throughout the first quarter of the ’15-’16 production season.
Dec ’15 U.S. butterfat, cheese and dry whey exports as a percentage of production remained lower than the previous year, however U.S. NFDM/SMP exports as a percentage of production finished higher on a YOY basis for the fourth consecutive month.
Overall, U.S. dairy export volumes were equivalent to 12.8% of total U.S. milk solids production in Dec ’15 while dairy import volumes were equivalent to approximately 3.8% of total U.S. milk solids production.