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Home > Industry News & Events from HART > News > U.S. Dairy Exports Remain Solid
Dairy Cheese Exports
September 4, 2020

U.S. Dairy Exports Remain Solid

News

The U.S. Department of Agriculture released July 2020 agricultural export data through the Foreign Agricultural Service’s Global Agricultural Trade System. After reviewing the data, IDFA has made notes on the following trends for the IDFA members:

  • Overall value and volume growth of 14% in global U.S. dairy exports over 2019: Although U.S. dairy exports globally in July did not perform as well as June, overall U.S. dairy exports remain 14% above the same period in 2019 figures by both value and volume. Significant growth markets from January through July 2020 relative to the same period in 2019 were China, Japan, the Philippines, Indonesia, and Vietnam.  Products performing well globally in the reference period are nonfat dried milk (NFDM), cheeses, and whey protein concentrate.
  • The sustained growth of dairy exports to Southeast Asia, setting a path towards a record-breaking year for the region by both value and volume: The Philippines, Vietnam, Indonesia, and Thailand are all contributing to significant and sustained growth month over month year-to-date in Southeast Asia, creating the possibility that the region will post a record-breaking year for U.S. dairy exports. U.S. dairy exports to the region from January through the end of July have already exceeded full-year totals from previous years. Similarly, in certain categories, such as NFDM and whole milk powder, have met or exceeded the entire value and volume of 2019 exports of those same products to the region. Other product categories, such as dried whey, lactose, and whey protein concentrate are also on track to exceed 2019 exports to the region by both value and volume, which itself was the first year U.S. dairy export to the region had recovered to 2014 levels. IDFA remains optimistic about the outlook for U.S. dairy exports to Southeast Asia.
  • Possible return to 2018 levels of dairy exports to China, pending year-end performance and U.S.-China relations: U.S. dairy exports to China in July may not have reached June 2020 levels, but the United States continues to see the sustained recovery of its dairy shipment to China, as July 2020 dairy exports to China far exceeded July 2019 exports to China, creating a pathway for U.S. dairy export to China to rebound to 2018 levels under continued positive market conditions.  Products performing at 2018 levels through the end of July 2020 are whey protein concentrate, dried whey, infant formula, and NFDM, likely due to China’s continued restocking of its swine herd post-African Swine Fever outbreak and eased regulatory restrictions that were resolved under the U.S.-China Phase One Agreement. Given China’s aggressive timeline and goals for restocking its swine inventory, if dairy trade is not a target of potential changes in U.S.-China relations, IDFA is optimistic for China’s continued out-performance in 2020 relative to 2019. 
  • Losses over the previous month, and historically moderate performance for the month of July to Mexico: Mexico saw significant losses in U.S. dairy exports by both value and volume relative to June 2020 data, which was above average, bringing July 2020 back to a level of moderate export performance that suggests U.S. dairy exports to Mexico may finish 2020 short of 2019 levels by value and volume. As Mexico’s cases of COVID continued to climb through the summer months, July posted significant losses from the previous month in U.S. cheese exports in particular. Given the stability offered to U.S.-Mexico trade relations through the implementation of USMCA, IDFA is optimistic that U.S. dairy exports to Mexico will rebound as COVID is mitigated and as the Mexican economy recovers.  
  • Re-emergence of Egypt as a significant market; reaching levels not seen since 2014: Increases in skim milk powder export to Egypt, along with incremental increases in other categories like lactose, are propelling Egypt to re-emerge as a significant market for U.S. dairy exports as it lands at the 16th most important market by value and volume globally, where it had previously been 24th (in 2019) and 29th (in 2018). The U.S. skim milk powder can be competitive with European and New Zealand powders in Egypt under fair trading circumstances, and with the U.S. dollar weakening steadily since April, Egyptian buyers are able to source U.S. product cheaper than competitors. USDA also reports opportunities for U.S. cheeses in the future. The European Commission’s domestic stockpiles of milk powder will be a factor in Egypt’s performance as a significant destination for U.S. products in the future, but IDFA is monitoring the steady re-emergence of this market as a contributor to overall growth in U.S. dairy exports.

IDFA remains optimistic about the future of U.S. dairy exports in light of this data and is continuing to engage the Administration on creating additional opportunities.

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Source: IDFA

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