The value of U.S. dairy exports in March topped $700 million for the first time, the U.S. Dairy Export Council reports.
Exports of cheese, whey proteins, lactose and milk protein concentrate all reached new highs, while butterfat exports were the highest in more than 20 years and nonfat dry milk/skim milk powder rebounded from the level of the previous four months.
U.S. suppliers shipped 201,380 tons of milk powders, cheese, butterfat, whey and lactose in March, up 33 percent from last year. Total value of all exports was $717.0 million, up 46 percent.
Exports to China nearly tripled in March, to $91 million, paced by gains in NDM/SMP and whey products. Shipments to Mexico were up 60 percent. They were also up 43 percent to Southeast Asia and up 33 percent to the Middle East/North Africa. These four customers accounted for nearly two-thirds of U.S. exports during the month. China remains the major customer for U.S. whey products, with first quarter purchases up 29 percent from a year earlier.
U.S. exporters also continue to expand shipments of whole milk powder — up 236 percent in the first quarter — and milk protein concentrate, up 55 percent. Major customers for WMP are Vietnam, Mexico, Algeria and China. Top buyers for MPC are New Zealand and Morocco.
U.S. exports on a total milk solids basis were equivalent to 17.7 percent of U.S. milk solids production in March — the most ever. Imports were equivalent to 3.1 percent of production, according to USDEC. Read more at www.usdec.org.
Global Dairy Trade auction slippage slowing
Slippage in the biweekly Global Dairy Trade auction is slowing. Last week’s event saw the weighted average for all products drop just 1.1 percent, following last week’s 2.6 percent fall, 8.9 percent plunge in the April 1 event, 5.2 percent drop in the March 18 event, and a 4 percent drop on March 4.
The downfall was led by a 2.3 percent drop in skim milk powder (down 4.4 percent in the last event), and a 1.8 percent decline in the Cheddar cheese (down 3.3 percent last event). Whole milk powder was down 1.7 percent (down 1.6 percent in the last event) and buttermilk powder was down 1.2 percent (down 8.6 percent in the last event).
There were products that headed up, led by rennet casein, up 6.8 percent, anhydrous milkfat, was up 2.4 percent, after inching up 0.6 percent in the last event, and butter was up 1.6 percent Tuesday, following a decline of 4.9 percent in the last event.
FC Stone reports the average butter price equated to about $1.7652 per pound U.S., up from $1.7383 in the April 15 event ($1.7222/lb. on 80 percent butterfat, up from $1.6959/lb.). The GDT Cheddar cheese average was $1.9029, down from $1.9384. GDT skim milk powder, at $1.7568, is down from $1.8715, and the whole milk powder average was $1.7819, down from $1.8004 in the last event.
Cash cheese heading south; butter soaring
Cash cheese prices tried to rally last week but petered out by Friday and are losing more ground this week. The blocks, after falling 3 1/4-cents last Tuesday, inched back a bit Wednesday and Thursday but closed Friday at $2.0450 per pound, down 2 1/2-cents on the week but still 20 cents above a year ago. They lost 4 3/4-cents Tuesday this week, dipping to $1.9975/lb., and fell below $2 for the first time since December 19, 2013, at $1.9975. The barrels finished Friday at $2.02, down 3 1/2-cents on the week and 29 3/4-cents above a year ago. They gave up 6 cents Tuesday, dipping to $1.96.
Butter closed Friday at $2.1675 per pound, up 9 1/4-cents on the week and 55 3/4-cents above a year ago. It inched up another three-quarters Tuesday, hitting $2.1750 per pound, the highest level since May 27, 2011.
Cheese still above historic levels
While cash cheese prices have plummeted, they are still well above historic levels for this time of year, according to Jerry Dryer, editor of the Dairy and Food Market Analyst. When asked if there was a drop in commercial disappearance, he answered, “Not through the first quarter.”
Through March, American cheese disappearance was up 2.7 percent and other cheese disappearance was up 4.2 percent, he said, and he credited “very strong exports and pretty good domestic use,” but blamed the recent correction in the cheese price to “more recent history, the month of April,” due to push back from the higher prices. That, combined with seasonal increases in milk production and a small bump up in the solids content of milk, he said, means “the market is trying to find a new level.”
When asked about butter at such an unseasonable high level, Dryer credited strong exports.
“Commercial disappearance hasn’t been a pretty picture,” he said. Domestic sales have been “sluggish,” but exports have been strong and “is a poster child for the way prices swing.”
Commercial disappearance for butter was up double digits for the three months ending in January and flat for the three months ending in March, according to Dryer’s data, “and now we got a pop again in April,” which he attributes to “strong exports given tight supplies in Europe and tight supplies here for a whole host of reasons.”