DairyBusiness Update for Jan. 15, 2013

U.S. dairy cattle exports rebound

Turkey returned to the market in a big way in November, helping U.S. female dairy cattle exports rebound to their highest monthly total since August, according to USDA’s Foreign Ag Service. At 3,569 head, monthly exports topped 3,000 head in 28 of the past 35 months.

Turkey imported 2,079 U.S. female dairy cattle in November, its highest monthly total since June and the second-highest total of 2012. Through November, Turkey had imported 13,250 head.

Russia imported 832 head in November, bringing its 2012-leading total to 16,445.

The 2012 year-to-date (Y-T-D) total is 41,036 head, lagging the 66,620 head for the same period in record-setting 2011.

2012 hay exports ahead of 2011 pace

November 2012 exports of alfalfa hay totaled 150,162 metric tons, down about 13,000 metric tons from October, according to USDA’s Foreign Ag Service. November sales brought the 2012 total to 1.587 million metric tons, about 10% more than the same period a year ago.

November U.S. exports of other hay totaled 189,614 metric tons, down about 11,000 metric tons from October, but still the second-highest monthly total of the year. Through the first 11 months of 2012, the total stands at 1.766 million metric tons, up about 19% from the same period in 2011.

CWT assists with 5.5 million lbs. of butter and cheese export sales

Cooperatives Working Together (CWT) accepted 20 requests for export assistance from Bongards Creameries, Darigold, Maryland & Virginia Milk Producers Cooperative, Michigan Milk Producers Association, United Dairymen of Arizona and Upstate Niagara/O-AT-KA to sell 1.864 million lbs. of cheddar, gouda and Swiss cheese and 3.657 million lbs. of butter to customers in Asia, the Middle East, North Africa, Central and South America. The product will be delivered January through June 2013.

Sp far in 2013, CWT-assisted sales will be going to 14 countries on four continents and are the equivalent of 164.4 million lbs. of milk on a milkfat basis. That is the annual production of 7,800 cows.

November dairy trade value dips

The value of U.S. dairy product exports weakened slightly in November, falling below $400 million for the first time in 21 months, according to USDA’s Economic Research Service (ERS). (The U.S. Dairy Export Council reported just over $400 million in November U.S. sales.)

Estimated at $398 million by ERS, exports were down 4% from October 2012 and about 9% less than November 2011. Year-to-date (Y-T-D, January-November 2012) exports are estimated at $4.801 billion, up 8% from the same period last year.

At $300 million, the value of November 2012 imports was up 15% from October 2012, but 3% less than November 2011. Y-T-D imports are estimated at $2.863 billion, up 10% from January-November 2011.

The 2012 dairy trade surplus stands at $1.94 billion, compared to $1.78 billion a year earlier.

At $130 million, November cheese imports were up 42% from October 2012 and up 12% from November 2011. Y-T-D 2012 cheese imports are estimated at $958 million, down 2% from the year before.

‘Total solids’ dairy trade

November 2012 dairy product exports were equivalent to 12.1% of U.S. milk solids production, the lowest percentage since March 2010. In the previous 30 months, exports represented 13.5% of U.S. milk solids production. Meanwhile, imports as a percent of milk solids production were 3.7% in November 2012.

Source: U.S. Dairy Export Council, National Milk Producers Federation

U.S. export volumes lighter in November

November trade data indicates a rougher month for U.S. exporters, according to the U.S. Dairy Export Council. Overall volume was the lowest in more than two years (since July 2010), coming in 13% below a year ago. November U.S. dairy exports were down 25% by volume and 20% by value since the peak levels achieved in May.

Nonfat dry milk/skim milk powder exports were below 30,000 tons (29,479 tons) for the first time since April 2010, down 21% from last year. Year-to-date, sales to Mexico were up 14% from the prior year, while exports to Southeast Asia were off 31%. Shipments to the Middle East/North Africa more than doubled.

November cheese exports were below year-earlier levels, and down about one-third from the peak levels of earlier this year. Year-to- date, shipments to Mexico were up 37% vs. prior year, while Japan (+21%), South Korea (+10%) and Canada (+29%) also posted solid gains.

Whey protein concentrate exports have pulled back, with shipments down 10% from last year and down 30% from the peak level reached in August. Overall November whey exports were down 12% from last year. China remains the major customer for U.S. whey products

Butterfat fell back after an encouraging increase in October. This year more than three-quarters of the volume has gone to the Middle East/North Africa region (primarily Saudi Arabia), while sales to Mexico and Canada have dropped off.

Lactose exports remained steady. Exports of fluid milk/cream were down 29% in the first 11 months of 2012.

MARKETS: Butter up; Class III futures mixed to mostly slightly higher

Today's market closing prices:

Butter: up 2.75¢, to $1.4875/lb.

Cheddar blocks: down 1.0¢, to $1.71/lb.

Cheddar barrels: unchanged at $1.6725/lb.

Grade A nonfat dry milk: unchanged at $1.5350/lb.

Extra Grade nonfat dry milk: unchanged at $1.56/lb.

Class III milk: -4¢ to +11¢ through December 2013. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $18.27/cwt.; and the 2014 average is $16.37/cwt.

Corn futures higher; soybeans, meal lower

Corn: +4¢ to +8¢ per bushel through September 2014. The 2013 average is $6.77/bu.

Soybeans: -3¢ to -7¢ per bushel through September 2014. The 2013 average is $13.62/bu.

Soybean meal: -$2.90 to -$5.60/ton through September 2014. The 2013 average is $387.94/ton.

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