DAIRY TRADE UPDATE

On August 11^th, USDA-FAS released June trade data for the dairy complex, marking a full six months of data for the year as well as some revisions for the prior year. U.S. dairy product exports have been somewhat tumultuous in recent years, becoming a large presence globally in 2008, only to be severely stifled in 2009, and then 2010 proved to be the brightest year yet. So, where does 2011 fit in comparison to these years? To more accurately compare, year-to-date figures will be used to include monthly seasonal changes for the six major categories tracked by the LMIC: Milk and Cream (Not Concentrated or Sweetened), Milk and Cream (Concentrated or Sweetened), Buttermilk, Whey, Butter and Cheese.

U.S. exports in 2011 have largely picked up where 2008 and 2010 left off, with steadily increasing quantities sold. In fact, only Whey has declined year-to-date compared to 2010, dropping 6%. Whey has seen large increases in prices both domestically and internationally, reaching 55 cents per pound in July domestically and internationally climbing to near 70 cents earlier this year. The international five year average price for Whey has been around 40 cents per pound, and the U.S. five year average price is usually about 35 cents. In other categories, year-to-date export tonnage compared to 2010’s have increased as follows: Milk and Cream (Not Concentrated or Sweetened) 16%, milk and cream (concentrated or sweetened) 19%, Buttermilk 4%, Butter 58% and Cheese 48%. The second half of the year holds promise for exports, but high prices may limit percentage gains compared to the first half of 2011.

Compared to exports, U.S. imports are quite the opposite directionally. Most categories decreased in 2008 and have continued to do so every year with the exception of Milk and Cream (Not Concentrated or Sweetened), which the U.S. has imported more of since 2009. In 2011, two categories, Cheese and Buttermilk have recorded more imports (January through June up 15% and 24%, respectively). Imports of Milk and Cream (Concentrated or Sweetened), Whey, and Butter have all posted steady declines and compared to a year during January-June were down 11%, 5%, and 76%, respectively. Import categories are expected to continue in the same direction as the mid-year figures indicated.