Year-over-year gains for the third straight month in September drove U.S. dairy exports to its best quarter performance since October through December 2022.
Strong demand for U.S. dairy products around the global, with the exception of China, propelled year-over-year dairy exports forward by 8.5% in September. Here’s Progressive Dairy’s 30,000-foot look at dairy-related export categories.
Latin America is key driver in positive dairy product export performance
As September concluded, one thing was clear – Latin America’s continued demand for U.S. dairy products was pivotal in boosting sales. In total, dairy product exports to Latin America surged 17% year over year and accounted for 41% of all U.S. exports in September (compared to 38% in 2023), as detailed in the U.S. Dairy Export Council’s monthly market update. In monetary terms, the month’s sales boosted year-over-year value by 18% to $715.2 million, the second highest monthly value in 2024, and lifted the year-to-date change in export value to 0.4%.
During the month of September, year-over-year U.S. dairy exports rose 8.5% in milk solid equivalent (MSE), reflecting the third consecutive month of year-over-year gains leading to America’s best quarter for dairy exports since fourth-quarter 2022. Most product categories contributed to the gains, including nonfat dry milk/skim milk powder (NFDM/SMP), cheese and whey.
In the third quarter, Mexico increased purchases for NFDM/SMP with year-over-year volume increasing 17% from July through September, the most NFDM/SMP Mexico has purchased in any third quarter on record. On a monthly basis, NFDM/SMP to Mexico climbed 23% in September, the largest gain posted since May 2023. While cheese exports retreated from record-high levels realized earlier in the year, the export volume is still undeniably strong, with September posting a 19% year-over-year increase.
Results of September’s export growth reiterates Mexico’s importance to U.S. dairy sales. Exports to our southern neighbor were up 23% year over year, improving Mexico’s share of U.S. dairy exports to 29%.
In total, exports to Central America and the Caribbean rose 5% year over year in September and 4% in South America during the same time frame.
While overall gains were noted for the month, weakened Chinese demand dampened U.S. dairy exports as MSE shipments to the country fell 13% year over year; NFDM/SMP sales fell 50%, cheese sales collapsed 85% and lactose folded 39%. The same trend has been noted with U.S. main global competitors as well.
October CWT-assisted export sales reach 11.2 million pounds
In the latest report from Cooperatives Working Together (CWT), member cooperatives added 11.2 million pounds of product to CWT-assisted sales in 2024 from 89 contracts secured in October. Those are the equivalent to 100.9 million pounds of milk on a milkfat basis and will go to customers in Asia, Oceania, Middle East-North Africa, Europe, Central America, the Caribbean and South America through June 2025.
The amount of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to bidders only when export and delivery of the product is verified by required documentation.
Dairy heifer replacements remain mostly in North America as embryo sales plummet
Following trends seen since May, U.S. dairy heifer replacement exports have mostly remained in North America. In September, Canada imported 199 animal units and Mexico, 49. For the first time in four months, a country overseas also imported U.S. dairy heifers with Saudi Arabia purchasing seven.
September’s U.S. dairy heifer replacement exports were up 24% month over month, even while Canada saw a 3% decrease in imports. The month’s value brings total U.S. dairy heifer replacement exports to 12,463 for the year.
Exports of U.S. dairy embryos sank 73% month over month for a total of 172 units in September. The month’s purchasers included Argentina (100), Australia (38), and France and Bangladesh (both 17). For the same month last year, exports were at 604 U.S. dairy cattle embryos.
September’s exports bring the total year-to-date sales of dairy cattle embryos to 4,280.
Hay exports slip for another month
Dairy-quality alfalfa hay exports fell 9% in September for a total of 143,218 metric tons exported. China remained the top purchaser and increased U.S. alfalfa hay imports by 8% from August to September for a monthly total of 59,835 metric tons. While a lesser quantity, Japan posted the largest month-over-month increase at 23% (totaling 34,019 metric tons).
The month’s regression in exports was largely due to Saudi Arabia’s drastic decline in purchases. The country imported 60% less alfalfa hay in September compared to August for a total of 15,379 metric tons.
In total, September’s dairy-quality hay exports added to year-to-date sales of 1,633,483 metric tons.
Japan and South Korea once again led as importers in the U.S. other hay category, yet purchases were mixed between the two countries. Japan posted a 7% increase month over month for a total of 52,406 metric tons of U.S. other hay purchased, while South Korea imported 24% less than a month prior for a total of 17,856 metric tons.
The month’s total U.S. other hay exports were down 7% at 83,815 metric tons. Year-to-date exports are at 794,760 metric tons.
Trade deficit continues to widen
September’s U.S. agricultural trade balance widened in September. The Department of Commerce/Census Bureau estimated September exports at $13.130 billion and imports at $17.387 billion for a trade balance deficit of $4.257 billion.
The fiscal year-to-date (Oct. 1, 2023, to Sept. 30, 2024) balance is a deficit of $31.291 billion.
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