Declines in milk powder and whey overshadow another strong month for U.S. cheese shipments.

October U.S. dairy exports declined 2% year-over-year (YOY) in milk solids equivalent (MSE) terms. While U.S. cheese exports continued to soar, disadvantageous U.S. prices on low-protein whey and nonfat dry milk/skim milk powder (NFDM/SMP) created headwinds for U.S. suppliers, particularly in Southeast Asia.

U.S. MSE volume was the lowest since January. But U.S. year-to-date (YTD) volume through October remained up 0.6%, despite the monthly decline.

U.S. export value was a different story. Elevated commodity prices and ongoing improved sales of higher-value products like cheese and high-protein whey (WPC80+) lifted October’s U.S. dairy export value by 11% to $695.7 million. After declining 5% in the first half of 2024, U.S. export value rose 9% over the four-month period of July-October. The streak lifted the YTD total to $6.92 billion—a gain of 1% over the first 10 months of 2023.

Cheese and high-protein whey (WPC80+) remain the stars of the show.

U.S. cheese exports rose 12% (+4,455 MT) to 40,283 MT in October. It was the seventh time this year that U.S. shipments topped 40,000 MT. To put that in perspective, the previous high for exceeding 40,000 MT in a month was in 2022, when U.S. suppliers did it four times.

Mexico again led the gain, as volume jumped 27% (+3,693 MT), but widespread geographic growth characterized the month. YOY October cheese exports to South Korea rose 36% (+1,220 MT), volume to Australian gained 67% (+955 MT), and sales to Central America increased 22% (+823 MT). (For a deeper dive on cheese, see below.)

After an uncharacteristic 1% YOY decline in September, WPC80+ exports bounced back in October, climbing 25% (+2,153 MT). The September decline was the first September 2023, and the quick rebound the following month would normally suggest a temporary blip if it weren’t for signs of price resistance in key markets and questions about low-protein whey destined for China being misclassified as high-protein. (For a deeper dive into both low- and high-protein whey, see below.)

From a regional perspective, much of October’s decline can be attributed to a bad month in Southeast Asia. Total YOY U.S. NFDM/SMP volume dipped 4% in October (-2,808 MT), but sales to Southeast Asia fell 31% (-6,117 MT). Total YOY low-protein whey exports dropped 12% (-5,499 MT), and the bulk of that came from a 19% fall (-2,406 MT) in volume to Southeast Asia.

Those are sharp declines from a region that is the No. 2 U.S. customer for both products, particularly in light of the first three quarters of 2024. YOY U.S. NFDM/SMP exports to Southeast Asia were up 1% through September, and low-protein whey volume to the region was up 20% and running at a near-record pace after nine months.

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

Cheese exports continue to shine
Cheese exports extended their trajectory of outstanding performance through October, posting yet another month of substantial gains. U.S. exporters sent 40,282 MT of cheese abroad during the month, a record volume for October and 12% (+4,455 MT) more than in the same month last year.

Most cheese varieties experienced stronger exports in October, a testament to the breadth of demand for U.S. product. Exports of fresh cheese, which includes varieties such as cream cheese and fresh mozzarella, jumped by 22% YOY, adding 1,745 MT to the monthly tally. Not to be outdone, exports of other cheese, including varieties like cheddar and gouda also posted a 21% (+2,344 MT) gain. YOY shredded cheese exports rose by 5% (+667 MT).

As domestic demand falters, U.S. cheese manufacturers have increasingly oriented their production toward serving the export market, prioritizing the production of cheese varieties popular with buyers abroad. As a result, output of gouda, which is principally exported to Mexico, increased 31% through October, while mozzarella production grew by 4%. This shift has largely come at the expense of other American-style cheeses, which saw output tumble by 4% so far this year.

Throughout 2024, strong cheese exports have been underpinned by robust demand across a broad range of destinations. But perhaps no geography has impressed as much as Mexico. YTD cheese exports to Mexico rose 33% (+39,572 MT). This trend extended into October, as YOY U.S. exports jumped 27% (+3,693 MT) to 17,272 MT, making it the third largest month ever of cheese exports to Mexico, after May and July of this year.

Cheese shipments to Mexico have been bolstered by strong exports of other cheese varieties, including gouda, which rose by 33% (+2,078 MT) for the month. Shredded cheese also contributed to the total, rising by 30% (+1,596 MT). The strength of exports to Mexico has been particularly impressive considering that the peso has progressively lost value against the dollar since June, rendering imported product more expensive.

Mexico was not the only region to report gains for the month as cheese exports also rose to South Korea (+36%, +1,220 MT), Australia (+67%, +956 MT), and Central America and the Caribbean (+14%, +796 MT). These gains more than compensated for weakness in markets like China (-62%, -1,010 MT), Canada (-28%, -625 MT), and Southeast Asia (-32%, -580 MT).

With persistent global demand and new production capacity coming online imminently, the U.S. appears well-positioned to continue serving the global market and growing cheese exports over the long term.

Whey exports stumble
The story of U.S. whey exports has generally been a positive one to tell this year. However, the category ran into some challenges in October as low-protein whey exports fell below prior-year levels for the first time since March. Exports slipped across the portfolio of low-protein products, although permeate felt the largest losses with volume down 20% (-3,431 MT). Whey protein concentrate under the 0404.10 heading slipped 14% (-1,837 MT), while dry whey gave up 2% (-230 MT).

Weakness in Southeast Asia (SEA) was the principal driver of the declines, with shipments to the region down 21% (-2,706 MT). Reduced buying from the Philippines (-38%, -993 MT) had the largest impact on the regional total, while a slowdown in Malaysia (-52%, -441 MT), Thailand (-42%, -483 MT), and Vietnam (-17%, -799 MT) further undermined export performance. Despite October’s lackluster figures, YTD exports of low-protein whey to SEA still led the prior year by 13% (+13,036 MT).

However, SEA wasn’t the only region that ran into challenges for low-protein whey demand in October. Shipments to Mexico fell 22% (-1,099 MT) YOY, while Japanese demand tumbled by 51% (-964 MT). U.S. low-protein exports to China eked out a 1% (+141 MT) gain, as stronger shipments of dry whey and whey protein concentrates made up for a slowdown in permeate exports. Even so, concern abounds that an impending slowdown in Chinese pork production may reduce demand for U.S. whey for piglet feed in the coming months.

As low-protein whey exports stumbled, high-protein exports continued their upward charge—at least on paper. Official data reports that exports of WPC80+ rose by 25% (+1,551 MT) in October, emboldened by surging shipments to China (+225%, +2,779 MT). However, our analysis of export unit values suggests that there are likely some lower-protein whey products being incorrectly included under HS 3502.20 and artificially boosting the total high-protein whey figure but likely underselling the low-protein total.

Outside of dubious Chinese figures, high-protein whey export performance is less encouraging. Exports of WPC80+ to Japan and Korea slipped 39% (-661 MT), while shipments to Canada dropped 50% (-565 MT). After rising consistently over most of the last two years, exports of WPC80+ to South America slowed dramatically in October (-26%, -156 MT), falling relative to the prior year for the third month in a row, as high-protein prices likely slowed demand.

Learn more about global dairy markets

• Strong September lifts U.S. dairy exports to best quarter in nearly two years

• U.S. dairy exports rise for second straight month

• After a Modest First Half of 2024, U.S. Dairy Exports Surged in July

• Cheese, whey continue to buoy U.S. dairy exports in June

  
  

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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.