August 10, 2010

US dairy exports soar in March-May

The International Dairy Foods Association (IDFA) has reported a "dramatic surge" in US dairy exports between March and May 2010.

Over the three-month period, cheese exports were 83% above the figures for last year, while butter and nonfat dry milk exports increased on 2009 by 189% and 72%, respectively, IDFA economic analyst Rob Blaufuss said.

These figures represent an acceleration of an already positive trend from the first three months of the year. The end result is that total US dairy exports through to May increased 36% compared to year-ago levels, while total export value experienced an increase of 64%.

For overall demand figures, positive increases were seen in cheese, butter and nonfat dry milk. In cheese, a 0.6% decline in American-type products was offset by a 4.7% boost in demand of other-type cheeses, while commercial disappearance of butter increased 1.3% to May and nonfat dry milk experienced 15.4% growth.

Against these positive trends on the demand side have been production increases on the supply side. IDFA said for the fourth month in a row, total US milk production rose in June - this time by 2.4% compared to a year ago.

Despite this increase in the supply, US dairy prices are continuing to hold up strongly, according to IDFA.

The comments on US prices come as Fonterra in New Zealand warns farmers of a lower payout than expected as prices start to dip following a sharp price recovery that peaked in April.

Following a 13.7% decline at the July event, Fonterra said this month that the globalDairyTrade index, which covers anhydrous milk fat, skim milk powder and whole milk powder, was down 8.3%. Fonterra blamed the strength of the New Zealand dollar, increased production and an uncertain economic picture for the downward trend.