Despite a slowdown in China’s dairy purchases, total U.S. dairy exports have remained robust, even setting new records at times. For instance, according to Sarina Sharp, analyst with the Daily Dairy Report, “U.S. cheese exports did not run as hot in June and July as in the first five months of this year, but they were still large enough to set a new monthly high for the sixth time in 2024.”

According to the July data from USDA’s Global Agricultural Trade Systems (GATS), the United States sent 88.7 million pounds of cheese overseas, up 9.4% from July 2023. “For the 14th straight month, shipments to Mexico notched a new monthly record high,” Sharp said.

U.S. whey exports easily cleared the low bar they set in 2023, but fell short of 2021 and 2022 volumes, Sharp noted. July U.S. whey exports were 22.4% higher than a year earlier. “The growth in U.S. whey exports were driven by a 34% increase in shipments to China,” Sharp noted, as Chinese hog farmers’ profits improve and the U.S. regains lost market share.

July exports of U.S. nonfat dry milk (NDM) jumped to a 14-month high, outpacing prior-year volumes by 10%. Shipments to Mexico, which climbed 20% above year-earlier volumes, also set a record for the month, according to GATS data. Exports to the Philippines, the second-largest market for U.S. NDM, soared 80% above July 2023 volumes.

“The forecast for milk powder exports is hazy,” Sharp said. “Rising global prices and the uptick in Chinese purchases at recent Global Dairy Trade auctions suggest milk powder stocks are starting to shrink among key exporters and importers, creating more room for U.S. product. But lower U.S. milk powder output and the surge in spot NDM values could limit future sales.”

From September 2023 through July 2024, U.S. milk powder prices have remained about a dime below benchmark values for skim milk powder in Germany and at the Global Dairy Trade platform.

“However, the late-summer increase in spot nonfat dry milk has erased the gap between U.S. and global prices, which will stiffen competition for new business,” Sharp said.

If China’s dairy imports continue to soften, which is expected through 2024, U.S. dairy exports could start to cool given rising domestic prices, but for now, exports remain above year-earlier volumes.

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