export ship
August 31, 2016

Whey Exports to China Reach Record High

 |  By: Fran Howard

A growing number of Chinese consumers see protein as an indispensible part of a healthy diet, and whey protein has become an essential ingredient in food and beverage manufacturing as well as pig rations. In July, the U.S. dairy industry sent a record volume of whey to China.

According to the Daily Dairy Report, dry whey is a standard product used in the starter rations of piglets to maximize performance, and given recent high Chinese pork prices, producers in China have had ample money to spend on whey.

While China’s whey imports of 102.6 million pounds fell 3.8% below year-earlier levels in July, the United States sent a record high 66.6 million pounds of whey to China, according to the Global Trade Information Services (GTIS). 

“Thanks to competitive prices, the United States is the chief beneficiary of China’s growing appetite for whey,” says Sarina Sharp, agricultural economist with the Daily Dairy Report. She notes that U.S. whey exports to China accounted for 64.9% of the country’s total purchases of whey in July—the highest market share since March 2010.

“Continued growth in Chinese whey product imports, and especially whey protein concentrates, is likely to undergird the U.S. whey products market,” Sharp adds.

At the same time U.S. whey exports to China are increasing, cheese exports are plunging—even though China’s cheese imports reached a record high in July, according to Sharp. China imported 22.6 million pounds of cheese and curd in July, 36.6% more than in July 2015. For the first seven months of the year, Chinese cheese and curd imports climbed 26.4% above 2015 volumes (adjusted for Leap Year), according to GTIS data.

“As a consequence of much higher domestic prices, the United States has seen its cheese shipments to China fall 27.3% short of volumes reported in the first seven months of 2015, while New Zealand and Australia—China’s largest and second-largest suppliers—have both increased their cheese exports to China by nearly 34% each this year,” notes Sharp.

While Chinese demand for whey and cheese is increasing, China’s burgeoning recovery in year-over-year imports of both whole milk powder (WMP) and skim milk powder (SMP) slowed in July.

GTIS data shows that China’s combined WMP and SMP imports in July fell 8.8% below last year and 6.7% below June’s daily average imports. However, for the first seven months of the year, China imported 22.3% more WMP and 0.45% more SMP than during the same period in 2015.

“The United States can clearly compete for China’s growing whey market, but until the gap between world and U.S. market prices narrows, U.S. exporters will continue to be priced out of the cheese and milk powder markets,” Sharp notes.