Market CommentaryBack to all Market Commentary
Improved cheese shipments highlighted U.S. export performance in February.
Cheese exports totaled 32,515 tons, up 16% from the prior year. On a daily-average basis, this is the second-highest total ever, falling just short of the record achieved in March 2014.
Sales of cheese to South Korea were the most in nearly four years - 7,154 tons, up 71%. Exporters also posted gains in sales to almost every other top market, including Mexico (+9%), Japan (+18%), Australia (+8%), Southeast Asia (+41%) and Central America (+24%).
In addition, exports of fluid milk and cream were up 30%, reaching a 26-month high (daily-average basis) of 10.2 million liters. Butterfat (+34%) and whole milk powder (+64%) also posted increases, albeit on small volumes.
(USDEC has adjusted official U.S. Bureau of Census trade data for milk powder since June 2016 to account for shipments we believe are misclassified.)
Overall, suppliers shipped 160,457 tons of milk powders, cheese, butterfat, whey products, and lactose in February, up from the previous three months and good for the second highest February volume ever, but still down 14% from the strong performance of February 2018. Total U.S. exports were worth $468.2 million, up 3%, year-over-year.
Totals were pulled down by continued weakness in whey and other exports to China due to retaliatory tariffs in place since last summer, plus the spread of African Swine Fever. In addition, overall exports of nonfat dry milk/skim milk powder (NDM/SMP) and lactose lagged prior year levels.
Total U.S. whey exports were 32,818 tons, down 29% from last year. Shipments to China were just 8,529 tons, down 58%, and the lowest since February 2011. Sales to Japan also were lower (-45%) as new trade agreements that benefit our competitors came into force, cutting U.S. competitiveness. On the positive side, U.S. exporters increased whey sales to Mexico (+32%) and South Korea (+72%).
Exports of NDM/SMP were 55,164 tons, down 17%. Volumes to Mexico were flat, but shipments to Southeast Asia (-11%), China (-78%), Peru (-83%), and the Middle East/North Africa region (-85%) were all significantly lower.
Lactose exports were 27,042 tons in February, down 19%. Again, volumes to China (-34%) were much lighter. In addition, sales to India fell 83%.
On a value basis, sales to Mexico were up 17% vs. the prior year, and sales to South Korea were the most in nearly four years (+51%).