Lower dairy imports than earlier in the year
Exports, imports
The latest dairy export report was for August. Compared to a year ago, exports were 59% lower for butter, 10% lower for nonfat dry milk, 20% lower for dry whey, 36% lower for whey protein concentrate and 11% lower for lactose. But, cheese was still 11% higher. Due to increase in world milk production and China’s much lower dairy imports than earlier in the year, world dairy product prices have declined substantially and are considerably lower than U.S. prices, lowering U.S. exports.
With world dairy product prices lower than U.S. prices, and strengthening of the U.S. dollar compared to the Euro and Oceania currencies, imports of butter and cheese have increased compared to a year ago. For the January-August period, butter imports were up about 175% and cheese up 3%. Tight butter stocks were also a factor for butter users to seek butter supplies outside the U.S. As of Aug. 31, butter stocks were still 37.4% lower than a year ago. Cheese stocks were not nearly as tight, just 4.2% lower. As U.S. dairy product prices decline and stock levels increase, imports no doubt will decline.
Product prices
Dairy product prices have declined considerably from where they were in September, with butter prices leading the way. Butter prices normally don’t decline until holiday orders are filled sometime in November. But, this year butter on the Chicago Mercantile Exchange (CME) set a record high at $3.06/lb. on Sept. 19, but has fallen to $2.015/lb. as of Oct. 20.