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August 7, 2019

Lower Sales to China Hurt First Half 2019 Exports

 |  By: Jim Dickrell

First half 2019 U.S. dairy exports were down 14% from 2018, largely due to a decline in sales to China, reports the U.S. Dairy Export Council (USDEC). Chinese sales were down due to retaliatory tariffs and African Swine Fever.

First half 2019 sales of milk powders, cheese, butterfat, whey products and lactose still came in at 1 million tons. Exports of these major products were down 54% to China, but were actually up 5% to other markets.

Due to stronger world dairy prices, the value of those one million tons was $2.95 billion, up for the third consecutive year. But on a volume basis, exports represent 14.1% of U.S. milk production on a solids basis. This compares to exports that averaged 14.7% over the previous five years, reports USDEC.

Cheese exports were up 4% and represented the best volume shipments since 2014. Cheese sales to South Korea, Southeast Asia, Central America and the Middle East/North Africa were all up. But cheese sales plummeted to Mexico, down 15%, and to China, down 46%.

Milk powder sales were off 15%, with volumes lower in all major markets. “U.S. suppliers faced competition from New Zealand exporters, who sought to clear production from a record flush in 2018/2019,” says USDEC.

Whey exports were off 25%, mostly due to lower sales to China, with whey sales there down 58%. Those losses were due to a combination of tariffs and African Swine Fever, which has led to a massive culling of pigs and a reduced need for feed-use dry whey and whey permeate.

Exports of fluid milk/cream were up 16%, led by record volume sales to Taiwan, up 32%, Mexico, up 8%, and Canada, up 46%. Milk protein concentrates (MPC) also were up 17% in the first half, led by a four-fold increase in MPC sales to Canada.

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