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Value of U.S. dairy exports hits four-year high

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U.S. Dairy Export Council says lost sales to China still eroding overall volume.

Total U.S. dairy exports in May were valued at $539.1 million, up 6% and the most in four years, the U.S. Dairy Export Council (USDEC) reported. The rise was fueled by an increase in cheese exports and aided by improved world prices, USDEC said.

In the first five months of the year, overall volume is on track for the third-best year ever, trailing only the pace of 2018 and 2014.

“May’s exports continued trends of recent months. Overall volume trailed the strong levels of May 2018, but nearly all the shortfall came from lost sales to China,” USDEC reported. Shipments of milk powders, cheese, butterfat, whey products and lactose to China were down 67%, while exports to the rest of the world were down just 1%.

In total, however, U.S. export volume was off 13% from a year ago.

Cheese remains a bright spot for the dairy industry, as exports in May were up 11%, and year-to-date volume was the highest in five years, according to USDEC.

Shipments to Southeast Asia, Japan and South Korea were all up by more than 1,000 tons from a year ago. Sales to Indonesia were particularly strong, at 1,317 tons, which is up five-fold and the most in six years. However, in Mexico, the largest market for U.S. cheese, exports were down 7% year to date.

USDEC relayed that exports of skimmed milk powder and nonfat dry milk totaled 63,607 tons in May, the most in 12 months. Sales to Mexico and Peru were the most in nine and 15 months, respectively, but USDEC said these gains were offset by continued declines in sales to China and Pakistan.

It was in the whey category that the lost sales to China showed up the most dramatically. Total U.S. whey exports were 37,961 tons in May, down 29% from last year. Shipments to China were just 6,931 tons, down 67% and the lowest monthly volume in nearly nine years, USDEC said. Dry whey sales to China were the lowest in 11 years, down 83% year over year, and whey protein concentrate and modified whey (permeate) exports were off 60% from a year ago.

Additionally, USDEC said whey sales to Japan were also lighter, with dry whey shipments the lowest in more than 15 years.

Still, U.S. suppliers were able to divert some sales to Southeast Asia (led by Thailand and Malaysia), where total whey volumes reached a record-high 11,525 tons in May (up 17%).

Overall exports of whey protein concentrate were the highest since last September, with Southeast Asia and Mexico posting their highest totals since fall 2017, USDEC noted.

In contrast, exports of modified whey (permeate) were running at their lowest year-to-date pace since 2011.

Lactose exports totaled 30,008 tons in May, down 14% from the same time period last year. Again, lost sales to China were significant, with volume down 52% from a year ago. This was the lowest month in more than five years, USDEC said, adding that sales elsewhere couldn’t compensate for the sharp drop.

Among other products, exports of butterfat (down 41%) and whole milk powder (down 34%) trailed last year’s levels, while shipments of fluid milk and cream were up 24%.

On a total milk solids basis, U.S. exports were equivalent to 14.7% of U.S. milk solids production in May, USDEC reported. During the first five months of the year, exports were equivalent to 14.2% of production, compared with an average of 14.7% from 2014 to 2018.

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