US Dairy Exports Deteriorate

US - US dairy exports were down in five of the six tracked categories, according to a USDA-FAS report.
calendar icon 23 January 2013
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Buttermilk was the only category posting a year-over-year gain. This category has had strong annual increases for most of 2012 the highest month was January 2012, up 83 per cent from 2011. The November data was 16 per cent above 2011’s, making it the fifth month of double digit growth.

Other categories showed significant declines from a year earlier. Even Cheese and Curds posted a year-over-year decline after 8 consecutive months of double digit increases, four of which were over 30 per cent.

The largest drop was in the Butter and Fats category, down 28 per cent from 2011, followed by concentrated milk and cream products, down 21 per cent. Whey had a loss of 11 per cent, milk and cream not concentrated by 9 per cent, and Cheese and Curds posted the smallest decline only down 8 per cent.

U.S. exchange rates moved less favorably for exporting in November particularly in regards to our largest importer of U.S. dairy products, Mexico. Mexico showed declines in November purchases from the previous month in Butter and Milk Concentrates.

Similarly, Japan’s currency weakened against the dollar in November, and although Japan does not import as much product as Mexico, dairy products such as concentrated milk and cream products, whey, and cheese had significant declines from the previous month.

On top of the dollar strengthening, Oceania milk production peaked in October and seasonal production was estimated to be running 4-5 per cent ahead of a year ago in mid-November according to Dairy Market News. FOB prices in Oceania undercut U.S. prices for most products during November and likely contributed to a slowdown in U.S. exports.

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