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July dairy exports see increases to Mexico

Shipments to China remain down as retaliatory tariffs continue.

U.S. exporters shipped nearly 48,000 tons of milk powders, cheese, whey, lactose and butterfat to Mexico in July, 12% more than a year ago, according to the U.S. Dairy Export Council (USDEC). Dairy products moving south of the border were valued at $134.7 million, up 30% from July 2018. Nonfat dry milk (NDM)/skim milk powder (SMP) and cheese volumes were up 9% and 16%, respectively, while lactose shipments reached a record high of 6,396 tons, a 74% increase.

USDEC reported that suppliers also moved greater volumes into the Middle East/North Africa region (MENA) in July: Volume was up 50%, and value was 56% higher, led by increased sales of whole milk powder (WMP), ice cream, cheese and milk protein concentrate (MPC), with most of the purchases coming from Arabia, the United Arab Emirates and Algeria.

According to USDEC, exports to South America were higher as well, with expanded sales of cheese (up 41% by volume) and NDM/SMP (up 79%). Major customers were Colombia, Chile and Peru. On a value basis, total exports to South America were 37% higher than a year ago.

In contrast, sales to Asian markets were lower, USDEC added. Specifically, high retaliatory tariffs continued to limit shipments to China.

“At this point, more than 90% of U.S. exports to China are whey and lactose, and China’s overall whey and lactose imports are significantly reduced as a result of African swine fever,” USDEC said.

Suppliers moved just 15,845 tons of milk powders, cheese, whey, lactose and butterfat to China in July, down 35% from a year ago. Total whey exports were down 41% (with a 65% loss in sales of dry whey), while lactose volume was off 20%. On a value basis, exports to China in July were down 16% from last year.

“After buying aggressively earlier this year, importers in Southeast Asia pulled back this summer,” the council reported.

U.S. exports of dairy ingredients (SMP, WMP, whey products and lactose) to the region totaled 30,221 tons in July, down 21% from a year ago. The Philippines, Indonesia and Vietnam all bought less, USDEC reported. Total export value was $61.2 million, down 9%. However, the bright spot in the region was a 30% increase in cheese sales.

According to USDEC, U.S. exports to Japan and South Korea were the lowest of the year in terms of both cheese volume and total export value.

“For America’s second- and third-largest cheese markets, volume to South Korea and Japan were down 40% and 15%, respectively, compared with a year ago,” USDEC said, adding that whey shipments to both markets were lower as well.

The overall dairy export value to Korea was down 25%, while sales to Japan were down fractionally.

Despite some setbacks, the overall value of U.S. dairy exports topped $474 million in July, up 10% from a year earlier. In the first seven months of the year, exports were valued at $3.4 billion, up 3% and the highest since 2014.

Still, USDEC noted that total shipments of milk powders, cheese, butterfat, whey products and lactose were 160,361 tons in July, down 6% from a year ago.

On a total milk solids basis, U.S. exports were equivalent to 14.0% of U.S. milk solids production in July. Exports for the first seven months of the year accounted for 14.1% of production.

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