U.S. dairy exports recorded their 12th consecutive year-over-year (YOY) monthly decline in January, as soft global economic growth continued to weigh on consumer purchasing in many key markets. U.S. dairy export volume fell 5% in milk solids equivalent (MSE) terms compared to the previous January. Export value fell 16% to $597.1 million.
While global dairy demand is running sideways and is expected to continue to do so through the first half of 2024, the new year started with a few encouraging developments as well. Chief among them was cheese.
U.S. cheese exports set a January record, rising 13% (+4,284 MT) to 38,299 MT. Very strong performance across Latin America—Mexico, Central America, South America and the Caribbean all increased purchasing—fueled the increase. (For more on cheese, see below.)
YOY high-protein whey exports (WPC80+) rose for the sixth straight month, with five of those increases (including January) well into the double digits. January volume jumped 25% (+1,139 MT). That gain came despite a down month from two of the largest U.S. WPC80+ customers: Japan and Brazil, who posted declines of -9% and -23%, respectively. Instead, the growth came from China, where volume nearly tripled (+187%, +759 MT), the Netherlands (+181%, +262 MT), India (+213%, +236 MT) and Southeast Asia (+87%, +189 MT).
Low-protein whey slipped 5%, marking the 12th consecutive month of YOY declines. But it was by far the smallest of the streak, and two of the three HS Codes that make up low-protein whey sales rebounded in January after months of decline. (For more on whey, see below.)
Other products had less success in January. Overall YOY U.S. nonfat dry milk/skim milk powder (NFDM/SMP) exports fell 14% (-9,576 MT). Shipments to our No. 1 market, Mexico, were 28,587 MT (-22%, -7,933 MT)—the second most we’ve ever shipped to the country in January; the most NFDM/SMP volume we ever shipped to Mexico in January was 36,520 MT in 2023.
Moving forward, U.S. suppliers will be challenged to match very strong prior-year Mexican NFDM/SMP purchasing throughout the first half of 2024. U.S. NFDM/SMP exports to Mexico rose 39% (+62,842 MT) in the first half of 2023.
Apart from Mexico, U.S. suppliers did post NFDM/SMP smaller but notable gains to the Middle East/North Africa (+483%, +2,907 MT) and Japan (+1,949 MT from a very small base of 103 MT in January 2023). Despite a 44% increase in NFDM/SMP sales to Malaysia in January, overall YOY volume to Southeast Asia fell 12% for the month.
YOY U.S. exports of low-protein whey (0404.10) fell 5% to 38,044 MT in January, but its three component parts performed very differently.
U.S. shipments of dry whey (HS 0404.10.4000) rose for the first time in a year in January. Volume totaled 13,538 MT for the month, up 3% (+376 MT) compared to the same month last year. Dramatically stronger exports into Japan and Korea underpinned larger figures for the month, as collective shipments to those markets rose by 1,551 MT (+233%). Exports of dry whey to parts of Latin America also improved, with shipments to Mexico up by 81% (+231 MT) and volume to Central America and the Caribbean grew by 26% (+153 MT) in January.
YOY WPC (0404.10.0500) exports also gained—+4% (+456 MT)—only the second increase in the last 12 months. Two markets were responsible for virtually all the gains: U.S. exports to Mexico jumped 84% (+1,550 MT) and sales to Southeast Asia increased 69% (+1,269 MT).
However, low-protein whey overall was still pulled down by a 17% decline in modified whey (0404.10.0850). Lackluster Chinese demand remains the biggest drag on low-protein whey. Aggregate U.S. shipments to China of all three of those HS Codes—dry whey, WPC and modified whey—fell 23% (-4,381 MT in January).
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