United States annual dairy exports hit five year high at US$6bn

USA – The United States reported an 8% year-on-year increase in annual dairy exports in 2019, reaching a new five year high of US$6.025 billion, according to data from the US Dairy Export Council.

The value of dairy exports also represented a 25% increase over the last three years, despite volumes gain hitting a speed bump primarily due to reduced purchases from China and retaliatory tariffs which eroded U.S. competitiveness in China.

During the twelve months period, US suppliers posted double-digit gains to four of their top six export markets with South America moving into the top 5 last year, passing Japan and South Korea.

Exports to South America were helped by doubling of sales to Colombia. In 2019, US suppliers also increased shipments to other major buyers in the region including Chile (+14%), Peru (+28%) and Brazil (+13%).

In one of its recent reports, the Dairy Export Council noted that the country’s commitment to serving export markets was paying off with positive extended growth trends in US’ primary markets.

The value of US dairy shipments to Mexico and Southeast Asia – the country’s two largest dairy customers – increased in each of the past three years. Mexico and Southeast Asia accounted for nearly US$2.5 billion, or 41%, of sales in 2019. 

Collectively, Mexico, Southeast Asia, Canada, China and South America account for almost two-thirds of US dairy exports, by value.

However, US skim milk powder/nonfat dry milk (SMP/NDM) suppliers faced heightened competitive through the first eight months of the year, as the European Union disposed of the last of its intervention stockpiles of SMP at discount prices.

By September (with those stocks cleared for the first time since 2015), the Dairy Council noted that US suppliers “went on a tear, shipping” 29% more SMP/NDM over the last four months than compared to the same period in 2018.

In 2019, the country’s skim milk powder/nonfat dry milk exports cracked the 700,000-ton mark for the second time in history and fell just 2% compared to the 2018 record of 714,281 tons.

Mexico remained the number-one market for US NDM/SMP, purchasing 329,321 tons in 2019. The volume was however, 6% down from 2018. Among other top markets, sales to China and Pakistan were just half of what they were in 2018.

Similarly, US cheese volume rose for the third straight year, reaching 357,910 tons—the second highest annual total ever while fluid milk exports rose to a record high.

However, whey volume in 2019 felt the impact of Chinese retaliatory tariffs and African Swine Fever. Lactose exports were also 4% down to 378,456 tons in 2019.

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