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July exports paced by increased sales to Mexico

USDEC staff

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. Dairy products moving south of the border were valued at $134.7 million, up 30%. Nonfat dry milk/skim milk powder (NDM/SMP) and cheese volume were up 9% and 16%, respectively, while lactose shipments reached a record high 6,396 tons, a 74% increase.

Suppliers also moved greater volumes into the Middle East/North Africa region (MENA) in July. Overall 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). Most of the buying came from Arabia, United Arab Emirates and Algeria.  

Exports to South America were higher as well, with expanded sales of cheese (+41% by volume) and NDM/SMP (+79%). Major customers were Columbia, 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.  

Shipments to China remain limited due to high retaliatory tariffs that make U.S. commodities uncompetitive. 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.  

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

Elsewhere in the region, U.S. exports to Japan and South Korea were the lowest of the year - both in terms of 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. Whey shipments to both markets were lower as well. Overall dairy export value to South Korea was down 25%, while sales to Japan were down fractionally.  

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.   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. In the first seven months of the year, exports accounted for 14.1% of production.