The value of U.S. dairy exports from January through August reached a five-year high of nearly $3.92 billion, up 3% from the same period in 2018.
Shipments, however, were down 13% year over year in volume with significant declines in milk powders, butterfat, whey and lactose, according to the U.S. Dairy Export Council.
“Basically, commodity prices are up and therefore value is up,” Alan Levitt, USDEC vice president of marketing and communications, said.
“While world prices for milk powder are part of that, it is more a function of a very tight cheese market,” he said.
Cheese exports in the first eight months of the year were up 2% in volume from a year earlier.
There are two main reasons total export value was up despite lower volumes of most products, William Loux, USDEC global trade analyst, said.
“Prices were more favorable in several of our key commodities than in the beginning of 2018,” he said.
For example, the average export value of skim milk powder January through August was $0.83 a pound in 2018 compared to $1.04 in 2019, he said.
“So even as we export less of it, the value grows,” he said.
The other reason is cheese has the highest value per unit of products the U.S. exports in large quantities, he said.
“So growing cheese grows our export value at a greater rate than SMP (skim milk powder) whey and lactose,” he said.
Higher value in dairy exports doesn’t necessarily correlate to higher farm gate prices. But milk prices are rising as nonfat dry milk and cheese prices have steadily climbed over the past couple of months, he said.
“We’re not looking at 2014 prices, but it’s much improved from where we were. U.S. farm gate milk prices are currently at a 56-month high,” he said.
In its latest report, USDEC said strong domestic markets have been keeping more U.S. cheese at home.
Since posting record export volume in March, cheese exports declined five months in a row compared to the previous month.
In August, cheese exports were 6% below a year earlier in volume, with lower exports to Australia, Japan and South Korea — although sales to Southeast Asia were near record highs.
Export volumes of other products showed even larger declines in August, USDEC reported.
Nonfat dry milk/skim milk powder volumes were down 18%, with significant declines to Mexico, the Philippines and China.
Total whey shipments were off 21%, with nearly all the decline from lost sales to China due to retaliatory tariffs and lower pig feed demand because of African swine fever. Whey protein isolate shipments, however, were up 9% led by improved sales to the EU, Southeast Asia and South Korea.
Lactose shipments fell 9%, with large declines in sales to China, New Zealand and Japan.
Shipments of whole milk powder — which was less than 4% of total exported dairy product — spiked to more than double a year earlier on strong sales to Algeria, Colombia and Peru.