ACCORDING to the latest data on sales abroad, U.S. dairy exports continued to set a strong pace through June.
Supply issues in other parts of the world allowed U.S. processors to pick up some additional business in recent months.
Looking at milk solids, June shipments were worth $597.5 billion — second only to May, when shipments were valued at $628.6 million, according to the Foreign Agricultural Service.
Cheese exports in June were up 9% from a year ago and were a whopping 27% larger than two years ago.
Through June, annual cheese shipments tallied 148,192 metric tons (328 million lb.), compared with 119,483 mt during the first half of 2011 and 140,737 mt for the same period last year.
Market analyst Jerry Dryer, writing at DairyMarketAnalyst.com, noted that nonfat dry milk powder exports were up more than 23% in June, with first-half shipments accounting for 45% of total production.
Butter prices have been a problem for dairy processers in recent months, but lower prices may have prompted additional export demand.
"Butter exports finally gained traction in June, up 98% versus 2012's lackluster performance," Dryer wrote. "Year-to-date shipments totaled 33,059 metric tons, or 7% of production."
Butter prices established a new long-term low in the week ending Aug. 9, dropping another 4.25 cents. Dryer said butter prices had not reached that level in more than a year (Figure).
"It sounds like there could be more downside to butter prices," he explained. "There is plenty of cream available, and between now and sometime in November, butter makers will be more reluctant than ever to make 82% product as they fill domestic holiday orders. Therefore, the 80% supply will continue to overhand the marketplace."
The Agricultural Marketing Service's butter price hit a 13-week low Aug. 3 at $1.4419. Sales volumes, however, were unusually high, at 7.87 million lb., a tally that hasn't been reported in two years.
Block cheese sales were also unusually high during the period, hitting 12.7 million lb. versus what Dryer described as a more typical 11 million lb. per week this year.
Retail sales of natural cheese products were up 1.7% during the four weeks ending July 14, but processed cheese sales were down 1.7%, leaving total sales up just 0.7%.