September 6, 2019

Exports To Mexico Offset Lackluster Asian Market

 |  By: Mike Opperman

While total volume of exports continues to lag, led by a decline in China, exports to other parts of the world continue to grow. This is especially the case with our No. 1 trading partner, Mexico. U.S. exporters shipped nearly 48,000 metric tons of milk powders, cheese, whey, lactose and butterfat to Mexico in July, up 12% from a year ago, according to the U.S. Dairy Export Council (USDEC). Value of shipments to Mexico increased even more, up 30% over last year.  

Much of that increase was due to cheese, which was up 16% over last year. Milk powder exports also improved, up 9%, while lactose exports set a record at 6,396 metric tons, up 74%.

Exports to the Middle East, North Africa and South America were higher as well.

The success in these regions is offset ongoing struggles with exports to China, which remain handcuffed by tariffs. Exports of milk powders, cheese, whey, lactose and butterfat to China were down 35% in July compared to a year ago. Total value of those exports was down 16% compared to July 2018. 

While tariffs remain a significant barrier, African swine fever has impacted exports as well. More than 90% of U.S. exports to China are whey and lactose fed to the country’s hog herd, and Chinese imports of those products have dropped significantly due to the disease outbreak. 

Exports to other regions of Asia were off as well. The volume of dairy product exports to Southeast Asia was down 21% in July compared to last year, and volume was off 9%. Exports to Japan and South Korea were the lowest of the year, according to USDEC.  Volume of cheese exports to these regions, which represent the second and third-largest cheese markets, was down 40% to South Korea and 15% to Japan in July. 

Overall value of U.S. dairy exports was up 10% from last year. In the first seven months of 2019, export values were valued at $3.4 billion, up 3% and the highest since 2014. However, total shipments of milk powders, cheese, butterfat, whey products and lactose were down 6% from a year ago. 

On a total milk solids basis, U.S. exports were equivalent to 14% of U.S. milk solids production. Through the end of July, exports accounted for 14.1% of production. 

To view the full report, click here.