Writing in the most recent U.S. Dairy Exporter Blog, USDEC staff summarized March 2022 dairy product export data:
Value basis: March 2022’s total U.S. dairy export value surged 25% from a year ago to $859.6 million, the highest month on record by a considerable margin.
Volume basis: Global consumers are buying more U.S. cheese. March 2022 cheese exports were up 13% from a year ago to 41,693 metric tons (MT). After three straight underwhelming months, exports of low-protein whey exports rose slightly. Exports of dry whey and nonfat dry milk/skim milk and whole milk powders were weaker.
- Milk solids basis: At 213,553 metric tons (MT), March 2022’s export volume of dairy solids fell just 1% short of the record-high 215,557 MT exported in March 2021.
Short-term headwinds to export volume growth include constrained milk supplies, strong domestic demand, logistics frustration and high prices, which are slowing growth among lower-income global consumers, according to USDEC. Export value, on the other hand, is poised to continue to build off the success of 2021 as a result of the tight global market and increased U.S. shipments of higher-value products like cheese, butter and protein.
Clouding the outlook for whey exports is China’s recent COVID-19-related lockdown and corresponding fallout regarding supply chains, which could cause whey shipments to fluctuate significantly in the short term.
Southeast Asian markets are opening up after two years of relatively tight COVID-19 restrictions, and buyers are expected to become increasingly active in anticipation of demand growth.
Closer to home, high input costs are reportedly slowing Mexico’s domestic milk production growth, necessitating imports to meet domestic demand. Greater movement of nonfat dry milk south of the border is forecast, and cheese exports should continue to perform well.
Longer term, two trends are combining to create a supply/demand imbalance that spells opportunity for U.S. dairy farmers and suppliers, noted USDEC President and CEO Krysta Harden. Speaking recently at two major dairy conferences, she said global dairy consumption will continue to rise well into the future, and at the same time, the two largest global suppliers – New Zealand and the European Union (EU) – are facing structural constraints that are already limiting their ability to keep pace and will make it more difficult for them to significantly increase milk output in the years ahead.
Read: With global milk production constrained, Harden sees opportunity to expand U.S. dairy exports.
The National Milk Producers Federation (NMPF) updated Cooperatives Working Together (CWT) program-assisted export contracts. April 2022 sales contracts covered 6.3 million pounds of American-type cheeses, 9,000 pounds of butter, 827,000 pounds of whole milk powder and 331,000 pounds of cream cheese.
Through the first four months of the year, contracts total 42.8 million pounds of American-type cheese, 46,000 pounds of butter, 15.6 million pounds of whole milk powder and 4.3 million pounds of cream cheese, for a total milk equivalent for the year of 543 million pounds (milkfat basis). CWT estimates are based on contracts for delivery, not completed export volumes.
Here’s a look at other export trends followed by Progressive Dairy:
Hay exports remain strong
With March numbers in the books, first-quarter 2022 U.S. alfalfa hay exports are just slightly behind last year’s record-setting pace.
March alfalfa hay exports hit a five-month high at 251,719 MT. Shipments to Saudi Arabia hit an 11-month high at 17,603 MT, offsetting a slight decline in sales to China. Nonetheless, China remained the leading market for alfalfa exports at 116,382 MT, about 46% of the month’s total. At 67,717 MT, Japan was the second-leading market and represented 27% of the month’s total. Alfalfa hay exports were valued at about $393 per ton, down $6 from February.
At 123,974 MT, March exports of other hay also rebounded. Sales to Japan were estimated at 80,636 MT, representing 65% of the U.S. total for the month. Sales to South Korea at 24,8804 MT represented 20% of March sales. Other hay exports were valued at about $390 per MT, down about $5 from February.
For more on hay exports and market conditions, check out Progressive Forage’s Forage Market Insights update.
Dairy heifer exports plummet
Limited supplies, higher prices and transportation costs, and geopolitical unrest slammed the gate on exports of U.S. dairy replacement heifers in March. Just 97 head were exported during the month, the lowest monthly total dating back to January 2009. Of the month’s total, 50 heifers moved to Bangladesh, 42 went to Canada and five to Suriname, a small country off the northeast coast of South America.
Year-to-date exports now stand at 2,911 head, the lowest first-quarter total for any year dating back to 2016. Tony Clayton, Clayton Agri-Marketing Inc., Jefferson City, Missouri, expects the trend to continue for the foreseeable future.
Thanks to strong sales of dairy embryos to China in January, first-quarter 2022 exports of dairy embryos are the highest in recent years. Of the 3,435 embryos exported in January-March, 2,338 were shipped to China.
- Progressive Dairy
- Email Dave Natzke