U.S. Dairy Exports Decline YOY for Second Consecutive Month…
According to USDA, the total value of all U.S. dairy exports in Sep ’14 declined YOY for the second consecutive month, declining 16.4% YOY. The Aug-Sep ’14 YOY declines were for first experienced in over a year and a half, with the Sep ’14 YOY decline being the largest in nearly five years. The total value of all U.S. dairy exports also declined on a MOM basis, falling 14.1% vs. Aug ’14 figures on a daily average basis. The MOM decline was the fifth in the last six months. Overall, the total value of all U.S. dairy exports declined to an 18 month low in Sep ’14 on a daily average basis.
Butter – Exports Continue to Weaken, Reach Two Year Low
Sep ’14 export volumes of butterfat continue to weaken, declining 78.6% YOY and 31.3% MOM on a daily average basis. Butterfat export volumes reached a two year low in Sep ’14, with the YOY percentage decline being the largest in over five years. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. Despite the recent YOY declines, ’13-’14 YTD butterfat exports finished 27.8% higher than the previous year.
U.S. butterfat exports to Middle Eastern and Northern Africa countries were particularly weak, especially in Morocco and Saudi Arabia. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. Recently, the spreads have increased, with U.S. butter prices trading at an 80.6% premium to Europe and a 128.1% premium to Oceania throughout September. Domestic butter price premiums declined in October, but prices remain significantly higher than international prices. If this trend continues it is reasonable to expect an extended relative decline in U.S. butter exports.
Cheese – Exports Continue to Decline MOM but Remain Higher on YOY Basis
Sep ’14 U.S. cheese exports declined 8.1% MOM on a daily average basis but remain up 8.1% YOY. Although U.S. cheese exports have increased YOY for 16 straight months, signs of relative weakness have begun to show. U.S. cheese exports have declined MOM for five of the last six months and the Sep ’14 YOY percentage increase in cheese exports was the lowest in 16 months. Cheddar cheese exports declined YOY for the third straight month, down 6.7%. ’13-’14 YTD cheese exports finished 30.8% higher than the previous year with cheddar cheese exports finishing up 47.1% YOY.
Dry Whey – Exports Decline YOY for Fourth Consecutive Month
Sep ’14 export volumes of dry whey declined 12.0% YOY and 1.6% MOM on a daily average basis. YOY dry whey export volumes have declined for four consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. Despite the recent YOY declines in volumes shipped, ‘13-’14 YTD dry whey exports finished 4.0% higher than the previous year.
NFDM/SMP – Exports Decline Significantly for Second Straight Month
Sep ’14 export volumes of NFDM/SMP declined 29.6% YOY and 27.0% MOM on a daily average basis. The YOY percentage decline was the largest in nearly three years. U.S. NFDM/SMP export volumes have declined 47.1% from the record high volumes shipped in Jun ’14. Despite the recent YOY declines in volumes shipped, ‘13-’14 YTD NFDM/SMP exports finished 12.4% higher than the previous year.
See the table below for a summary of key U.S. dairy product exports as a percentage of production in Sep ’14.
Butter – Exports Continue to Weaken, Reach Two Year Low
Sep ’14 export volumes of butterfat continue to weaken, declining 78.6% YOY and 31.3% MOM on a daily average basis. Butterfat export volumes reached a two year low in Sep ’14, with the YOY percentage decline being the largest in over five years. Butterfat exports began to slow in the second quarter of 2014, with 2Q ’14 export sales 36.2% below 1Q ’14 export sales on a daily average basis. Despite the recent YOY declines, ’13-’14 YTD butterfat exports finished 27.8% higher than the previous year.
U.S. butterfat exports to Middle Eastern and Northern Africa countries were particularly weak, especially in Morocco and Saudi Arabia. It has been speculated that EU-28 butter could displace U.S. butter in the Middle East due to the Russian dairy import ban that was announced in early August. Russia accounted for nearly a third of EU-28 butter exports in 2013.
U.S. butter prices have traded at a premium to Europe and New Zealand butter prices when adjusted to 80% butterfat since May, reducing export demand. Recently, the spreads have increased, with U.S. butter prices trading at an 80.6% premium to Europe and a 128.1% premium to Oceania throughout September. Domestic butter price premiums declined in October, but prices remain significantly higher than international prices. If this trend continues it is reasonable to expect an extended relative decline in U.S. butter exports.
Cheese – Exports Continue to Decline MOM but Remain Higher on YOY Basis
Sep ’14 U.S. cheese exports declined 8.1% MOM on a daily average basis but remain up 8.1% YOY. Although U.S. cheese exports have increased YOY for 16 straight months, signs of relative weakness have begun to show. U.S. cheese exports have declined MOM for five of the last six months and the Sep ’14 YOY percentage increase in cheese exports was the lowest in 16 months. Cheddar cheese exports declined YOY for the third straight month, down 6.7%. ’13-’14 YTD cheese exports finished 30.8% higher than the previous year with cheddar cheese exports finishing up 47.1% YOY.
Dry Whey – Exports Decline YOY for Fourth Consecutive Month
Sep ’14 export volumes of dry whey declined 12.0% YOY and 1.6% MOM on a daily average basis. YOY dry whey export volumes have declined for four consecutive months after beginning the ’13-’14 production season with YOY increases in seven of the first eight months. Despite the recent YOY declines in volumes shipped, ‘13-’14 YTD dry whey exports finished 4.0% higher than the previous year.
NFDM/SMP – Exports Decline Significantly for Second Straight Month
Sep ’14 export volumes of NFDM/SMP declined 29.6% YOY and 27.0% MOM on a daily average basis. The YOY percentage decline was the largest in nearly three years. U.S. NFDM/SMP export volumes have declined 47.1% from the record high volumes shipped in Jun ’14. Despite the recent YOY declines in volumes shipped, ‘13-’14 YTD NFDM/SMP exports finished 12.4% higher than the previous year.
See the table below for a summary of key U.S. dairy product exports as a percentage of production in Sep ’14.