December, annual dairy, cattle and hay trade recap

The value of U.S. dairy product exports improved in December, again topping $400 million for the month. At $418 million, exports were up 4% from November 2012, but about 3% less than December 2011. Total 2012 exports were valued at $5.219 billion, up 7% from 2011 and a new record high.

At $318 million, the value of December 2012 imports was up 6% from November 2012 and 16% from December 2011. Total 2012 imports were estimated at $3.18 billion, up 8% from 2011.

The 2012 dairy trade surplus was $2.038 billion, compared to $1.942 billion a year earlier.

At $135 million, December cheese imports were up 4% from November 2012 and up 36% from December 2011. Total 2012 cheese imports were estimated at $1.093 billion, up 2% from the year before.


‘Total solids’ balance weakens

U.S. December 2012 dairy product exports were equivalent to 11.6% of U.S. milk solids production, the lowest figure since March 2010, according to figures from the National Milk Producers Federation and U.S. Dairy Export Council (USDEC). In the previous 31 months, exports represented 13.5% of U.S. milk solids production. Meanwhile, imports as a percent of milk solids production were 4.0% in December 2012.


2012 a record year, but second half of year was weaker

U.S. dairy exports reached record levels in 2012, but gains were muted by a slowdown in the second half of the year, according to USDEC.

U.S. dairy exports in December were down 23% by volume and 16% by value since the peak levels achieved in May. Still, cheese, whey protein concentrate (WPC), and nonfat dry milk/skim milk powder (NDM/SMP) posted record levels in 2012. Dry whey exports declined for the second straight year, falling 13% from 2011 levels, reflecting that many buyers “traded up” from dry whey to WPC.

Cheese exports in 2012 were a record high 260,033 tons, up 16% from 2011. WPC shipments also reached a new high of 233,362 tons, up 27%.

Overseas sales of dairy products were up 3% by aggregate volume and 8% by value vs. the prior year. However, volume and value were 9%-10% lower in the second of the year than the first. U.S. volume declines and lost share coincided with U.S. benchmark commodity prices moving above comparable to Oceania prices last summer, when drought fears moved U.S. prices up.

The mid-year split played out most dramatically in milk powder. NDM/SMP exports in the first half of the year were up 11% vs. 2011, but were down 6% in the second half. December shipments at 32,454 tons, were equivalent to 37% of U.S. NDM/SMP production during the month, the lowest figure since April 2010, and below the rate of exports needed to prevent inventories from accumulating.