Recovery in sales to key Southeast Asia, MENA markets drive the gains.
U.S. dairy export volume reached an all-time high in February (on a daily-average basis), led by strengthening ingredient sales to Southeast Asia, record lactose exports to China and broad-based increases in overseas sales of cheese.
Suppliers shipped 181,797 tons of milk powder, cheese, butterfat, whey and lactose during the month, up 19 percent from last February. U.S. exports were valued at $454 million, up 4 percent.
Sales to Southeast Asia have been robust in early 2018. Shipments of nonfat dry milk/skim milk powder (NDM/SMP) and dry whey to the region were up 71 percent (+11,139 tons) vs. a year earlier. Indonesia and Vietnam bought more NDM/SMP; the Philippines, Malaysia and Vietnam bought more dry whey. On a value basis, total dairy exports to Southeast Asia were $64 million, up 13 percent, year-over-year.
Overall NDM/SMP exports were 66,750 tons, up 28 percent from last year, and the second-most ever. In addition to Southeast Asia, gains were posted in sales to Japan (+773 percent), Peru (+163 percent), and the Middle East/North Africa (MENA) region (+169 percent), while shipments to Mexico were the most in nine months.
(Official U.S. Bureau of Census data continues to show an increase in WMP exports to Mexico. However, Mexican import data and trade sources don’t corroborate this, and we believe this volume represents SMP sales that were misclassified at the port. Therefore, we’ve adjusted NDM/SMP and WMP trade data for June 2016 to February 2018 to account for this misclassification.)
Lactose exports were 33,584 tons in February, the most ever on a daily-average basis, and up 27 percent from a year earlier. Shipments to China (9,184 tons) were double what they were in February 2017.
Cheese exports were 28,150 tons in February, the most in eight months (daily average), and up 7 percent from a year earlier. U.S. suppliers increased sales to China (+100 percent), Japan (+21 percent), Central America (+32 percent) and the MENA region (+23 percent), offsetting slower sales to Mexico (-7 percent).
Total whey exports were 46,168 tons in February, up 7 percent vs. the year before. Suppliers remain particularly aggressive in moving dry whey, with exports up 29 percent year-over-year, and registering the best month (on a daily-average-volume basis) in nearly four years.
Exports of whey protein concentrate (WPC) and whey protein isolate (WPI) were up modestly (+2 percent year-over-year). Sales to Canada and Mexico were higher, sales to Southeast Asia were lower, sales to China were flat.
Overseas sales of modified whey products (mostly permeate) were down 12 percent from last year, the only major category to lag year-ago levels. Losses are attributed to much lighter sales to New Zealand (-57 percent).
Exports of milk protein concentrate (MPC) were the most in nearly three years (daily average), up 65 percent from last February. The bulk of the gain came from larger sales to Egypt.
Fluid milk/cream exports were up 6 percent in February, with continued strong sales to Taiwan (+89 percent vs. last year). Sales to Canada were the most in nine months, though below a year ago.
Exports of butterfat and whole milk powder (WMP) were above year-ago levels, though volumes remain small.
Alongside improved overall ingredient sales to Southeast Asia in recent months, U.S. exports have seen a sharp recovery in exports to the MENA region since the middle of 2017. In the nine months to February, export value was up 43 percent year-over-year. Shipments of cheese, NDM/SMP, butterfat and MPC were all higher.
On a total milk solids basis, U.S. exports were equivalent to 17.2 percent of U.S. milk production in February, the highest since October 2016. Imports were equivalent to just 3.1 percent.
Alan Levitt is vice president of communications and market analysis at the U.S. Dairy Export Council.