Executive Summary U.S. dairy export figures provided by USDA were recently updated with values spanning through Jun ’18. Highlights from the updated report include:

• U.S. butterfat export volumes increased 3.4% YOY, finishing higher for the ninth consecutive month and reaching a four year seasonal high for the month of June. Butterfat import volumes exceeded export volumes for the second consecutive month during Jun ’18, however, as import volumes finished at a 14 year seasonal high.
• U.S. cheese export volumes increased on a YOY basis for the 19^th time in the past 21 months, finishing up 11.8%, as strong Mexican imports more than offset a slight decline in volumes destined to all other countries. U.S. dry whey and nonfat dry milk/skim milk powder export volumes each increased on a YOY basis for the eighth consecutive month, finishing up 14.0% and 24.1%, respectively, while U.S. whey protein concentrate export volumes increased 5.3% YOY, finishing higher for the ninth consecutive month.
• Net dairy trade on a percentage of total U.S. milk-solids production basis continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the eighth consecutive month, finishing up 26.2%. Export volumes on a percentage of milk-solids production basis finished at a four year seasonal high for the month of June while import volumes declined to a four year seasonal low.

Additional Report Details Butter – Export Volumes Reach a Four Year Seasonal High, Finish up 3.4% YOY Jun ’18 U.S. export volumes of butterfat declined to a three month low but remained higher on a YOY basis for the ninth consecutive month, finishing up 3.4%. U.S. butterfat export volumes finished at a four year seasonal high for the month of June. U.S. butterfat export volumes destined to Mexico increased most significantly on a YOY basis throughout the month, while butterfat export volumes destined to Canada finished most significantly lower YOY. ’16-’17 annual butterfat export volumes finished up 27.9% YOY while ’17-’18 YTD figures are up an additional 48.3% throughout the first three quarters of the production season. Despite Jun ’18 export volumes reaching a four year seasonal high, butterfat import volumes exceeded export volumes for the second consecutive month during Jun ’18 as import volumes finished at a 14 year seasonal high for the month of June. Cheese – Export Volumes Increase YOY for the 19^th Time in the Past 21 Months, Finish up 11.8% Jun ’18 U.S. cheese export volumes increased on a YOY basis for the 19^th time in the past 21 months, finishing up 11.8%. Cheddar cheese export volumes increased 22.2% YOY, finishing higher for the 17^th consecutive month, while other-than-cheddar cheese export volumes finished 10.4% higher on a YOY basis throughout the month. ’16-’17 annual cheese export volumes finished up 20.6% YOY to a three year high while ’17-’18 YTD figures have increased an additional 7.3% throughout the first three quarters of the production season. Jun ’18 YOY increases in cheese export volumes were led by product destined to Mexico. Cheese export volumes destined to Mexico increased 43.2% on a YOY basis throughout the month while cheese export volumes destined to all other countries declined by 0.3% on a YOY basis throughout the month. U.S. cheese export volumes destined to Mexico will likely weaken in months to come as Mexico recently imposed retaliatory tariffs on a basket of U.S. agricultural imports including a variety of cheeses. Tariffs on Mexican imports of U.S. cheese will range from 20-25%, effective the first week of Jul ’18. Dry Whey – Export Volumes Increase YOY for the Eighth Consecutive Month, Finish up 14.0% Jun ’18 U.S. dry whey export volumes increased 14.0% YOY, finishing higher for the eighth consecutive month. U.S. dry whey export volumes finished at a five year seasonal high for the month of June. Jun ’18 YOY increases in dry whey export volumes were led by product destined to Vietnam, followed by volumes destined to Japan, Morocco and Malaysia, while dry whey export volumes destined to China finished most significantly lower YOY. ’16-’17 annual dry whey export volumes finished up 22.0% YOY to a three year high while ’17-’18 YTD figures are up an additional 16.3% throughout the first three quarters of the production season. WPC – Export Volumes Increase YOY for the Ninth Consecutive Month, Finish up 5.3% Jun ’18 whey protein concentrate (WPC) export volumes continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the ninth consecutive month, finishing up 5.3%. U.S. WPC export volumes destined to Mexico increased most significantly on a YOY basis throughout the month, while WPC export volumes destined to China finished most significantly lower YOY. ’16-’17 annual WPC export volumes finished up 5.5% YOY, reaching a record annual high level for the second consecutive year, while ’17-’18 YTD figures are up an additional 26.2% throughout the first three quarters of the production season. NFDM/SMP – Export Volumes Increase YOY for the Eighth Consecutive Month, Finish up 24.1% Jun ’18 U.S. export volumes of nonfat dry milk (NFDM) and skim milk powder (SMP) continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the eighth consecutive month, finishing up 24.1%. U.S. NFDM/SMP export volumes finished at a four year seasonal high for the month of June. U.S. NFDM/SMP prices remained below international averages prices for the 42^nd consecutive month during Jun ’18, trading at a 15.4% discount to average Oceania and EU-28 prices throughout the month. Jun ’18 YOY increases in NFDM/SMP export volumes were led by product destined to Mexico, followed by volumes destined to the Philippines, Vietnam and Malaysia. Export volumes destined to Japan and South Korea declined most significantly on a YOY basis throughout the month. ’16-’17 annual NFDM/SMP exports finished up 12.0% YOY to a record annual high while ’17-’18 YTD figures are up an additional 13.4% throughout the first three quarters of the production season. U.S. cheese, dry whey and NFDM/SMP export volumes as a percentage of production finished higher than the previous year during Jun ’18 while butterfat export volumes as a percentage of production finished flat on a YOY basis. Overall, U.S. dairy export volumes were equivalent to approximately 16.4% of total U.S. milk-solids production during Jun ’18 while dairy import volumes were equivalent to approximately 3.1% of total U.S. milk-solids production. Jun ’18 net dairy trade finished 26.2% higher YOY, increasing for the eighth consecutive month. Jun ’18 U.S. dairy exports as a percentage of milk-solids production continued to decline from the Apr ’18 record high but remained higher on a YOY basis for the eighth consecutive month, finishing up 13.9% to a four year seasonal high for the month of June. ’16-’17 annual dairy exports as a percentage of milk-solids production rebounded by 8.1% from the four year low experienced during the previous year, despite declining by 5.3% over the final third of the production season. ’17-’18 YTD dairy exports as a percentage of milk-solids are up an additional 11.1% throughout the first three quarters of the production season. Jun ’18 U.S. dairy imports as a percentage of milk-solids production declined 19.7% YOY, finishing lower on a YOY basis for the seventh time in the past eight months and reaching a four year seasonal low for the month of June. ’16-’17 annual dairy imports as a percentage of milk-solids production finished 6.8% below the eight year high experienced during the previous year and have declined an additional 10.3% throughout the first three quarters of the ’17-’18 production season. Net trade of U.S. NFDM/SMP continued to outpace that of butter, cheese and dry whey as import volumes remain minimal. Net cheese trade volumes exceeded net dry whey trade volumes throughout the month while the U.S. finished as a slight net importer of butter for the second consecutive month.