Whey production

Bags of whey product come off the line at the Davisco Foods cheese plant in Jerome, Idaho. While whey exports were down, the overall value of U.S. dairy exports is at a four-year high.

U.S. exports of dairy products in May tallied $539.1 million, up 6% in value year over year and the highest monthly value in four years, according to the U.S. Dairy Export Council.

USDEC analysts attribute the higher sales to an increase in cheese exports and improved world prices.

Export volume, however, was down 13% from a year earlier — with nearly all the shortfall coming from lost sales to China. Shipments to China were down 67% in volume and 44% in value.

Exports to the rest of the world were only off 1%, however, and overall export volume is on track for the third best year ever, the analysts said in their latest export report.

Cheese remains the bright spot in the export picture. May shipments were 11% higher year over year, and year-to-date volume is the highest in five years. Shipments to Mexico, however, were down 7% January through May.

Much of the lower shipments to Mexico can be assigned to buyer needs, Marc Beck, USDEC executive vice president and strategic advisor, told Capital Press.

“Export numbers were unusually high last year, with tactical buying given the noise around pending tariffs,” he said.

Exports of milk powder in May were the highest in 12 months, with strong sales to Mexico and Peru. But the gains were offset by continued declines in exports to China and Pakistan. Overall, exports of nonfat dry milk and skim milk powder were down 9% in May year over year.

China also played a major role in lower exports of whey. Shipments to China in May were down 67% and the lowest monthly volume in nearly nine years.

Dry whey sales to China were down 83% and the lowest in 11 years. Exports of whey protein concentrate and whey permeate to China were down 60%.

Lost sales of whey to China stem from trade issues and African swine fever, Beck said.

Whey is used for swine feed, and the AFS epidemic is forecast to reduce China’s pig numbers by up to 200 million. Whey shipments to Japan were also down in May and were the lowest in more than 15 years.

Lower exports to Japan reflect aggressive selling by the EU, supported by the Japan-EU trade agreement. They’re also likely influenced by uncertainty around U.S.-Japan trade negotiations, Beck said.

U.S. suppliers were able to divert some sales to Southeast Asia, with record volumes up 17%. But total U.S. whey exports were still down 29% in May compared with a year earlier.

Exports of lactose, also used in swine feed, were down 14% in May, with lower demand in China weighing heavily. Shipments to China were down 52% and the lowest monthly volume in more than five years.

U.S. exports in May were equivalent to 14.7% of U.S. milk solids production. From January through February, exports were equivalent to 14.2% of U.S. production compared with an average of 14.7% from 2014 through 2018.

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