U.S. dairy exports were up 12 percent in volume and 3 percent in value in August compared with a year earlier, with suppliers shipping nearly 190,000 metric tons of milk powders, cheese, butterfat, whey products and lactose.
Those exports were equivalent to 16.8 percent of U.S. milk production in August, according to the latest export report by U.S. Dairy Export Council.
January through August exports totaled $3.82 billion, up 4 percent from a year earlier on a volume increase of 17 percent.
But retaliatory tariffs seem to be taking a toll on cheese exports to Mexico and powder, whey and cheese exports to China.
Shipments to Mexico in August totaled $126.4 million, up 13 percent year over year — led by a 64 percent increase in powder exports. But cheese exports to the country were down 21 percent, contributing to the 7 percent decline in total U.S. cheese exports.
The decline in exports to China is more drastic than the decline in cheese to Mexico. At $34.3 million, U.S. dairy exports to China in August fell 33 percent year over year. Exports were down 31 percent for milk powders, 26 percent for whey products and 40 percent for cheese, USDEC reported.
Cheese exports were also dinged by a 40 percent decline in shipments to Canada and the lowest shipments to South Korea in seven months, despite a 33 percent increase to Central America and the highest shipments to Australia in nine months.
Total exports of nonfat dry milk and skim milk powders jumped 26 percent in August, driven by the large shipments to Mexico and a 35 percent increase to Southeast Asia — both of which offset the decline to China as well as a 96 decrease to Pakistan and a 76 percent decrease to Japan.
Despite China’s decline in whey purchases, year-over-year exports of whey products increased 2 percent in August — aided by a 40 percent increase in shipments to Southeast Asia.
Lactose exports also made gains, up 16 percent in August, with a 24 percent increase in shipments to China and a 59 percent increase in shipments to New Zealand.
Looking ahead, Alan Levitt, USDEC analysts, said a three-year trend in international dairy trade has played out in a tactical buying cycle of about six months of good orders followed by about three months of lighter orders.
If the pattern continues, markets should see good orders over the next few months before buyers pull back again, he said in USDEC’s exporter blog in late September.
“Of course, this pattern will take place under a backdrop of record New Zealand milk production, resilient European supply and uncertain China demand,” he said.