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U.S. Dairy Exports Finish Strong in 2019

USDEC staff

U.S. dairy exports were positive in December, continuing a rebound over the last third of 2019.

During December, suppliers moved growing volumes of nonfat dry milk/skim milk powder (NDM/SMP) to Southeast Asia in particular, while overall shipments of whey products topped year-ago levels for the first time in 16 months. Lactose exports exceeded the depressed levels of 2018. Like NDM/SMP, interest was strong from Southeast Asia on both whey and lactose. Among the four major export categories, only cheese slipped back in December.  

Among December's other highlights:

·  Exports of whey protein isolate (WPI) were an all-time-high 5,412 tons, including record sales to Japan and Southeast Asia.

·  Dairy exports to South America were $48.7 million, a new high, led by record shipments of NDM/SMP to Colombia. In fact, Colombia was the United States' fourth-largest export market, by value, in December.

·  Exports of NDM/SMP to Egypt were the most since April 2013.

·  Sales of cheese to Mexico were the most in 18 months.

·  Exports of whey products to New Zealand were the most ever.  

U.S. suppliers shipped 179,382 tons of milk powders, cheese, whey products, lactose and butterfat during the month, 14% more than the year before. On a solids basis, total dairy exports were up 16%. The value of all exports was $524.0 million, up 22%.  

Recapping 2019: U.S. export value up 25% since 2016  

In 2019, U.S. export value topped $6 billion for the first time since 2014. Overall value was up 8% in 2019, and over the last three years, exports have increased 25%.  

Total volume of milk powders, cheese, whey products, lactose and butterfat in 2019 was 2,035,131 tons, down 7% from 2018. Much of the decline is attributed to lost sales of whey and lactose in China due to retaliatory tariffs and African Swine Fever, plus slower shipments of NDM/SMP in the first eight months of the year as U.S. suppliers struggled to compete with aggressive EU clearance of intervention stocks.  

On a total milk solids basis, U.S. exports were equivalent to 14.5% of U.S. milk solids production in 2019. This is down from 15.7% in 2018.  

NDM/SMP U.S. suppliers shipped 700,930 tons of NDM/SMP in 2019, down 2% from the record level of 2018. Sales improved markedly starting in September, once EU intervention stocks were cleared through the supply chain. Volume was up 29% in the last four months of the year. From September-December, exports to Southeast Asia were up 58%, as shipments to Indonesia and Vietnam more than doubled. For the full year, exports to Southeast Asia were a record high 227,331 tons (+6%).  

Mexico remained the number-one market for U.S. NDM/SMP, purchasing 329,321 tons in 2019. But this figure was down 6% from 2018. Among other top markets, sales to China and Pakistan were just half of what they were in 2018.  

Cheese U.S. cheese exports reached 357,910 tons in 2019, up 3% from the year before and the most in five years. For the second straight year, sales to Southeast Asia (+17%) and Central America (+12%) reached new highs, and shipments to South Korea (+9%), Japan (+6%) and the MENA region (+4%) were the most since 2014.  

Mexico remained the number-one market for U.S. cheese, purchasing 95,632 tons, down 1% from 2018.  

Whey products Total whey exports were 447,950 tons in 2019, down 18% (-98,843 tons) from 2018. Volume to China, the largest market for U.S. whey, dropped in half, accounting for all of the overall decline (-100,597 tons). U.S. suppliers lost share in China due to retaliatory tariffs implemented in summer 2018, and overall China whey imports were depressed in 2019 due to African Swine Fever. U.S. whey sales to China were the lowest in 10 years.  

Trends diverged amongst whey products. Exports of WPI were a record-high 46,947 tons, up 11% from 2018. But shipments of dry whey fell 30% to 153,879 tons, the lowest in 16 years. Exports of whey protein concentrate (WPC) and modified whey products (permeate) were down 17% and 8%, respectively. To partially offset reduced sales to China, U.S. suppliers posted record whey export volumes to Southeast Asia (+4% vs. 2018) and New Zealand (+51%) and increased volume (+10%) to Mexico.  

Lactose U.S. exports totalled 378,456 tons in 2019, down 4% from 2018. However, comparisons improved as the year went on, with fourth-quarter exports up 15%. Exports to Southeast Asia were up 9% last year, and sales to Mexico (+18%) hit a new high. But shipments to China were off 30% (-28,856 tons).  

Other products

·  Fluid milk exports were a record high, up 13% from the 2018. Shipments to Taiwan were the most ever, up 24%, while sales to Canada jumped 42%.

·  Exports of milk protein concentrate (MPC) were up for the third straight year, finishing 5% above 2018. Sales to Canada reached a new high, up 58% from the prior year.

·  Whole milk powder (WMP) exports were down 14% in 2019, but sales improved in the last two months of the year (+59%). During 2019, exports to Vietnam (the largest market in 2018) and China (the number-two market) evaporated, but suppliers found new customers in South America and the MENA region.

·  Butterfat exports were just 24,241 tons, down 46% and a four-year low. Most of the decline came from lost sales to Mexico (-75%).

·  Exports of food preparations (blends) were down 17% in 2019, posting the lowest volume in 16 years. Nearly 60% of the sales went to Canada, which saw a decline in purchases. Exports to Sub-Saharan Africa dropped as well.  

On a value basis, exports to South America (+34%), and Caribbean (+8%) reached record highs in 2019, while sales to Mexico (+11%), Southeast Asia (+22%), South Korea (+14%) and the MENA region (+8%) were the most since 2014.