August 19, 2013
US dairy exports rise 16% in H1 2013
During the first half of 2013, US dairy exports totalled a record-high US$3.17 billion, up 16% from US$2.74 billion in the first half of 2012, pushed by increasing global demand.
Export volume was up 9% over the same period in 2012, but the increase in export value was also due to higher prices, said Alan Levitt, vice president of communications for US Dairy Export Council.
Exports by value have been up every month in the first half of the year compared with 2012, and exports by volume were only lower in March and only by maybe 1%, he said.
US dairy exports have been up across the board this year, with cheese, skim milk powder and whey protein at record highs. Butterfat has been up as well, although not at record levels.
There''s a combination of factors boosting US dairy exports, but the main reason is that global demand has been solid while there''s been a decline in production in most of the other exporting regions, he said. The US is the only region that has been increasing production and pricing has been favourable, which created opportunity for US exports, he added.
While New Zealand''s exports of milk powder, cheese, butterfat and whey were up 4% in the first half of the year, they were down 7% in the second quarter. Exports of those products were also down 11% for Argentina for the first half of 2013 and down 9% for the EU and 10% for Australia from January through May.
Strong US exports are also a factor of increased commitment and market presence by US manufacturers, making them better able to capitalise on opportunities when conditions are favourable, Levitt said.
Exports are important to the US industry to keep markets and prices strong here at home. The US needs to export 45% of its powder and 4-5% of its cheese to clear domestic markets and keep product from backing up, he said.
In the first half of the year, powder exports were about 50% of US production and cheese exports were almost 6%, he said. Levitt said he expects exports to be equally bullish in the second half of the year because the same conditions still apply -- global production is still sluggish, and there''s no indication demand will suffer.
In addition, world markets are considerably stronger today than they were at this time a year ago, which bodes well for the second-half outlook. Currently milk powder is 60% to 70% higher, cheese is 20% to 30% higher and butter is 30% to 40% higher, he said.
"Conditions are still favourable for us. All indications are that the market is firm. Prices are stable, and no one''s expecting a drop. We should be able to continue doing what we''re doing," he said.
If the US has product to sell, it''s going to be in a pretty good position, he said. The upcoming milk flush in Oceania will be the biggest factor, but there''s still a bit of a residual effect from the drought in New Zealand last spring, he said.
Production there is expected to be flat, but if it''s better than expected, it''ll pressure prices downward. If it''s worse than expected, it''ll cause a panic and pressure prices upward, he said.