U.S. dairy export volume rises 10% in 2018 Q3

Butterfat exports soar, led by increased sales to Mexico and Canada.

November 6, 2018

4 Min Read
U.S. dairy export volume rises 10% in 2018 Q3

U.S. dairy exports tracked higher than year-ago levels in the third quarter of 2018 despite continued setbacks in markets where tariffs have come into play, according to Alan Levitt, vice president of communications and market analysis for the U.S. Dairy Export Council (USDEC).

Suppliers shipped 167,122 tons of milk powders, cheese, butterfat, whey products and lactose in September, an 8% increase from September 2017. Total U.S. exports were worth $435.2 million, 4% above a year ago. In the first three quarters of 2018, dairy exports totaled $4.25 billion, 4% more than the same period in 2017. Overall volume was up 16%, Levitt reported.

U.S. exporters were aggressive in selling milk powder to Mexico and Southeast Asia. Exports of nonfat dry milk and skim milk powder totaled 52,745 tons, a 30% increase versus a year ago. Shipments to Mexico remained heavy, at 29,976 tons (up 40%), while sales to Southeast Asia (mostly the Philippines and Indonesia) more than doubled to 15,743 tons. Levitt said U.S. suppliers this year have exported more than two-thirds of the nonfat dry milk/skim milk powder they’ve produced. Over the previous five years, 56% of production was sold overseas. Meanwhile, sales to China, Peru, Pakistan and the Middle East/North Africa (MENA) region were negligible, down more than 4,600 tons in all compared with a year ago.

According to the latest data, U.S. suppliers also moved record volumes of whole milk powder to Southeast Asia. Total September exports were 6,655 tons, up 164% and the most in more than eight years. Nearly all went to Vietnam and Singapore, Levitt said. In contrast, sales to China were just 40 tons, a fraction of what was shipped last year.

USDEC reported that whey exports in September were 41,053 tons, down 6% from a year ago, with a significant drop-off in sales to China due to retaliatory tariffs. In the first half of the year, China accounted for 42% of U.S. whey exports, but third-quarter shipments to China accounted for just 31% of total U.S. whey exports. Exports to China in September were just 10,961 tons, down 38% and the worst month since January 2016. For the second straight month, Levitt said most of the decline came from lower sales of modified whey (permeate), which hit an eight-year low. Once again, suppliers diverted whey sales to Southeast Asia, where volumes were up 37%.

Cheese exports drifted lower in the third quarter. September volume was 24,569 tons, down 9% and a 20-month low. Levitt said cheese shipments to Mexico of 5,952 tons (down 10%) were lower for the third straight month. He added that U.S. suppliers saw slower sales to Australia (down 36%), China (down 63%), Japan (down 22%) and the MENA region (down 35%). However, notable gains were posted in sales to Southeast Asia (up 99%) and South Korea (up 18%).

Lactose exports totaled 31,152 tons in September, 1% greater than levels posted in September 2017. Shipments to China of 7,411 tons were up 51%, and exports to Southeast Asia of 7,668 tons were up 25%, while sales to Japan were at a five-year high. This was offset by drops in sales to Mexico and New Zealand, USDEC said.

Butterfat exports soared to a total of 3,702 tons, a 168% increase from last year, led by increased sales of 1,686 tons to Mexico (up more than seven-fold) and 1,245 tons to Canada (more than double).

Exports of milk protein concentrate continued to track higher in September, according to the report. Shipments of 3,166 tons were the most in more than three years and were nearly double last year’s total. Sales to Mexico were the largest in nearly a decade, Levitt said.

Shipments of fluid milk and cream were up 12%. For the fourth straight month, Taiwan was the largest U.S. customer, taking 3.9 million liters, up 39%.

Exports of food preps (blends) continued to lag behind year-ago levels. September shipments were just 4,080 tons, down 37% from a year ago.

According to Levitt, on a value basis, sales to Southeast Asia were up 83% from last year’s depressed level. The volume of milk powder, whey, lactose and cheese was nearly twice the September 2017 total. Sales (by value) to Mexico were up 15%, while exports to most other top markets were below year-ago levels.

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