Gains across most product categories help offset lagging SMP and lactose volume.

U.S. dairy exports posted essentially a flat June, as gains in cheese, whey, butterfat and whole milk powder nearly offset declines in nonfat dry milk/skim milk powder (NFDM/SMP), lactose and milk protein concentrates. In milk solids equivalent (MSE) terms, year-over-year (YOY) volume slipped 0.3% for the month.

Halfway through 2024, U.S. dairy exports were down 1.7% in MSE (all year-to-date (YTD) numbers have been adjusted to account for the additional day for Leap Year). YTD U.S. dairy export value was off 5% to $4.09 billion.

Cheese and whey remained on a roll in June. U.S. cheese sales grew for the sixth straight month, rising 9% (+3,203 MT). It was a healthy increase and, at 38,876 MT, the second biggest June ever after June 2022. But the impact of the spring run-up in U.S. prices may be starting to show: June marked the first time monthly U.S. shipments fell below 40,000 MT since January 2024.

YTD, U.S. cheese exports were up 24% (+51,151 MT) to 263,350 MT, a record pace

Total whey exports (low-protein and WPC80+) posted their third straight month of double-digit gains in June, rising 12% (+5,446 MT), with encouraging buying signs from the top two U.S. customers: China and Southeast Asia. (For a deeper dive on whey, see “Whey exports shine” below.)

Despite improvements in Chinese whey demand, its overall dairy import appetite continues to disappoint—with all major supplying countries affected. However, total U.S. dairy shipments to China fell only 1% in June, the smallest YOY decline of the year. In addition, the rest of the world has helped make up for China’s lagging dairy import appetite, which came through in the June numbers.

YOY U.S. exports to Southeast Asia bounced back after two down months. NFDM/SMP and low-protein whey (0404.10) led the gain, with U.S. shipments to the region rising 21% (+3,474 MT) and 19% (+1,912 MT), respectively.

U.S. suppliers also saw solid YOY growth in total product volume in June to South America (+2,131 MT), South Korea (+2,033 MT) and the Caribbean (+1,620 MT).

Performance in other key destinations was mixed. For example, U.S. cheese exports to Mexico increased 12% (+1,484 MT) and cheese shipments to Central America jumped 27% (+1,001 MT), but NFDM/SMP shipments to both regions dropped significantly, falling 21% (-7,732 MT) and 36% (-1,585 MT), respectively.

Overall U.S. dairy product volume to Mexico fell 12% in June. The weaker peso, coupled with disappointing GDP growth in the second quarter, are creating headwinds for dairy imports to the region and will challenge U.S. suppliers in the months ahead, particularly given the rise in U.S. cheese prices since spring.

For more detailed information, as well as interactive charts and data, visit USDEC's Data Hub.

Whey exports shine
U.S. exporters continue to send whey products offshore at a healthy clip. Even though U.S. milk production has faltered in liquid terms so far in 2024, strong component values and upbeat demand from cheese manufacturers have resulted in a plentiful whey stream, which has fueled additional exports.

Whey demand improved across the complex in June with exports rising in all four HS Codes (dry whey, WPC, modified whey and WPC80+) for the first time since January 2023.

High-protein products (HS 3502.20) continued to perform exceptionally well, with YOY shipments of WPC80+ up 5% (+344 MT) in June. Over the first half of the year, sales of WPC80+ grew by 19% (+6,886 MT), as volume to Brazil and China blossomed. Our analysis of the data suggests that some improperly coded product could be artificially boosting the totals into China, but even so, exports this year have been impressive.

High-protein whey isn’t the only category that has seen growth, however. Dry whey exports (HS 0404.10.4000) increased 12% in June (+1,511 MT), modified whey (HS 0404.10.0850) jumped 23% (+2,740 MT) and WPC (0404.10.0500, which is typically WPC34 as opposed to 3502.20 which is usually WPC80 or WPI) increased 6% (+851 MT).

Stronger demand from China boosted both dry and modified whey exports, as combined volume rose 22% (+2,268 MT) for the month. Beginning in 2023 and into this year, low prices and government mandates led to a thinning of the Chinese hog herd. But now, hog prices are on the rise, with some analysts estimating that live pig prices have improved by as much as 30% since the beginning of the year. Higher prices and improved producer margins due to lower feed costs are once again encouraging pig breeding, increasing the demand for whey products for feeding piglets.

China isn’t the only destination delivering growth for dry and modified whey exports either, as bright spots have also emerged in Southeast Asia. In June, U.S. dry whey exports to Thailand leaped by 80% (+685 MT), while Indonesia saw volumes nearly double (+98%, +441 MT). U.S. modified whey exports to the six Southeast Asian buyers (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) increased 26% (+657 MT).

Improving export demand for dry whey is putting pressure on the domestic whey price and has likely played a key part in driving the spot dry whey price up to multi-year highs in recent weeks.

Butterfat exports overcome high prices
Despite elevated domestic prices, U.S. butterfat has made some inroads into international markets. Butterfat exports soared in June, rising by 80% (+2,071 MT) against the same month last year. Most of the gain was achieved through increased exports of anhydrous milkfat (AMF), which jumped 490% YOY (+1,330 MT). June’s strong performance ushered in an increase of 41% (+1,276 MT) for AMF exports over the first half of the year.

Sustained AMF demand from Central America and the Caribbean has boosted exports so far in 2024. Shipments to the region totaling 548 MT in June were the largest since February 2022 and the third-largest volume recorded in any month. Exceptionally strong volumes in June drove YTD exports up by a factor of ten (+924%, +791 MT), accounting for more than half of the increase in total AMF exports over the first six months of the year.

AMF exports to Mexico also soared in June with volumes up by 472 MT (+1,345%). However, dramatically weaker performance earlier in the year resulted in a 26% decline (-310 MT) in YTD volume.

Butter exports also surged in June, with volumes up 32% (+741 MT) versus the same month last year. However, one strong month was insufficient to overcome losses earlier in the year as cumulative butter exports YTD trailed prior year levels by 12% (-2,023 MT).

Canada has been the main protagonist in butter trade in recent months with strong demand driving the June figure upward. Butter exports to Canada jumped 49% (+773 MT). Totaling 2,339 MT, U.S. butter exports to Canada in June were the second highest ever, only falling behind the record 2,865 MT shipped in March 2022. U.S. exports of AMF to Canada also rose by 166% (+514 MT) YOY for the month, suggesting that Canadian buyers were short of fat.


Learn more about global dairy markets:

• U.S. dairy exports slip 5% in May

• April dairy exports rise 3%

• March exports slip 7% on mixed results

• U.S. dairy exports rebound in February

   

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The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.