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November another ‘win’ for dairy exports

Progressive Dairy Editor Dave Natzke Published on 09 January 2020

U.S. exports continued to improve in November, increasing from prior months and topping year-ago levels for the third straight month. Here’s a summary of the numbers from the U.S. Dairy Export Council (USDEC):

  • Volume basis: U.S. suppliers shipped 179,113 tons of milk powders, cheese, whey products, lactose and butterfat during the month, the most since March and up 14% from a year ago.

U.S. suppliers posted record shipments of nonfat dry milk/skim milk powder to Southeast Asia for the second straight month. The total volume of exports to China were the highest of the year and down only 10% from 2018. In addition, shipments to Colombia increased more than fivefold. In contrast, sales to Mexico were down 24%, the lowest volume in nearly two years.

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Paced by strong sales to South Korea, Japan and Mexico, cheese exports were 28,439 tons in November, the most in five months and up 6% from last year. Total whey exports were also the most in five months but still 7% below a year ago.

  • Value basis: The value of November exports was $536.4 million, up 21% and the most since April 2015 (on a daily-average basis). At $96.5 million, the value of exports to Southeast Asia was the highest in more than four years. Suppliers also focused on South America, where exports reached a record high $40.7 million, with more than half going to Colombia.

  • Total milk solids basis: U.S. exports were equivalent to 15.8% of U.S. milk solids production in November (Table 1). Exports accounted for 14.5% of production in the first 11 months of the year.

010820 export percent production

Heifer export should start year strong

November exports of U.S. dairy replacement heifers softened after hitting a 12-month high in October, according to latest estimates from USDA’s Foreign Agricultural Service. Monthly exports totaled 1,986 head, which was still the third-highest monthly total for the year.

According to the USDA, all the exports remained close to home, with 1,590 moving to Mexico and the remaining 394 head relocating to Canada.

November dairy heifer exports were valued at about $2.9 million, raising the year-to-date total to about $29.6 million.

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November sales pushed year-to-date dairy heifer exports to about 16,550 head, still the lowest 11-month total in three years.

Tony Clayton, Clayton Agri-Marketing Inc., Jefferson City, Missouri, expects U.S. dairy replacement heifer exports to remain strong in early 2020 before leveling off.

“The year of 2020 will start with multiple shipments of cattle off the West Coast to Vietnam,” Clayton said. In total, more than 3,000 head of Holstein heifers are bound for Southeast Asia in January and February.

Egypt will also see another shipment in January, bringing numbers exported there to well over 5,000 head in a three-month period.

Despite the strong start anticipated for 2020, U.S. dairy cattle exports may face longer-term supply constraints, as significant and growing management trends related to breeding more females to beef bulls, and aggressively using genomics in herd selection will impact heifer availability.

Read: Dairy heifer exports: Management changes have impact.

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Exports of other hay hit two-year high

U.S. November 2019 alfalfa hay exports came back to earth after rising to new heights in October. Monthly exports were estimated at 232,694 metric tons (MT), down more than 50,000 tons from October but still the fifth highest total in the 17 months. November’s sales pushed the U.S. alfalfa hay export year-to-date total to 2.48 million MT, ahead of the record-setting pace of 2017.

November sales to China totaled 94,497 MT, down about 34,100 MT from October. At 54,599 MT, alfalfa exports to Japan were the highest since July, while sales to Taiwan at 9,106 MT were the highest in at least five years. Sales to the United Arab Emirates (25,538 MT) and South Korea (22,021 MT) were about average with recent months.

While alfalfa exports softened somewhat, November exports of other hay rose to 135,607 MT in November, the largest monthly volume in more than two years. Year-to-date exports of other hay reached nearly 1.28 million MT, ahead of last year’s pace.

Monthly shipments to Japan (72,089 MT) were the highest since February 2014, and sales to South Korea (44,001 MT) were the highest in two years.

November U.S. exports of alfalfa meal and alfalfa cubes were mostly steady.

For more on hay exports and market conditions, check out Progressive Forage’s Forage Market Insights update.

November ag trade surplus improves

Overall, November 2019 U.S. ag trade turned in the largest monthly surplus since December 2017. Exports were valued at $12.66 billion, while ag imports were estimated at $10.31 billion, resulting in a $2.35 billion trade surplus.

With November’s total, calendar year 2019 exports hit $124.8 billion, and imports were estimated at $120.3 billion, leaving an ag trade surplus of about $2.35 billion.

Other dairy trade news

  • The U.S.-Mexico-Canada Agreement (USMCA) was approved by the Senate Finance Committee on Jan. 7 and is closer to ratification. Also, a U.S.-Japanese trade agreement that took effect Jan. 1 will eliminate or lower tariffs for certain U.S. agricultural products, including cheese. However, separately, a new report from the USDA Foreign Agricultural Service said Japan has approved a new program that pays producers to expand the number of dairy and beef cows retained for breeding purposes. Read: Weekly Digest II: Senate committee advances USMCA and Japan to subsidize dairy herd expansion.

  • The U.S. and China struck a “phase one” trade deal that could be signed on Jan. 15. It is still uncertain what the deal means for U.S. agriculture and, specifically, dairy. The National Milk Producers Federation said its staff who serve as trade advisers were prohibited from sharing information until the U.S. government releases it.  end mark
Dave Natzke
  • Dave Natzke

  • Editor
  • Progressive Dairy
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