U.S. dairy exports dip for first time in a year

U.S. Dairy Export council reports year-over-year (YOY) U.S. dairy exports slipped 0.4% in milk solids equivalent (MSE) terms in March (-910 MT), marking the first MSE decline in exactly a year. (March 2022 U.S. MSE exports fell 0.5% before going on an 11-month streak of YOY gains.)

Because of the strong U.S. performance in January, year-to-date value and volume still grew for the first quarter (1Q). U.S. dairy export volume rose 5% (+25,398 MT MSE) and value increased 3% (+$65 million). And on the volume side, most key product categories held their own for the quarter: NFDM/SMP (+3%), cheese (+4%), MPC (+13%), WPC80+ (+18%) and lactose (+26%).

However, headwinds of increased competition, inflation, economic uncertainty, and lackluster Chinese demand are taking a toll and should challenge U.S. suppliers through at least mid-year when we expect EU milk production gains to soften and China’s appetite to recover more fully.

On the positive side, U.S. sales to Latin America (Mexico, Central and South America and the Caribbean) continue to grow, even in the face of those headwinds.

In March, total U.S. dairy export volume to Latin America expanded by 23% (+17,110 MT). Cheese and NFDM/SMP led the way. U.S. cheese shipments to the region grew 20% (+3,918 MT) versus the previous March, while NFDM/SMP jumped 37% (+14,003 MT). U.S. NFDM/SMP exports to Mexico set an all-time record at 42,391 MT. The only other time U.S. NFDM/SMP shipments to Mexico topped 40,000 MT in a single month was in October of 2016 when volume reached 42,303 MT.