Exports Bring Ray of Sunshine

(May 18, 2012) Declining milk prices and high feed costs have clouded the spring outlook for the nation’s dairy farmers, but one ray of sunshine so far this year has been dairy exports. Dairy Profit Weekly’s Dave Natzke updated DairyLine listeners on Friday.

“While higher milk production and lower prices have dominated the domestic scene, global dairy product sales have been a bright spot.

USDA’s March dairy trade report indicates exports were valued at a record-high $484 million, topping $400 million for the 13th consecutive month. Paced by record-high cheese sales and continued strong sales of high-value whey products, export values were up 11% from February and 15% more than March last year. Monthly butterfat volumes also improved to a nine-month high.

In contrast, March 2012 imports, at $258 million were up just 5% from February, and down about 7% from a year ago.

When we look at trade balance, March exports were equivalent to 13.6% of U.S. milk solids production for the month, while imports equaled about 2.8% of production. So far in this fiscal year, exports are estimated at more than $2.6 billion, up 24% from the same period a year ago. Imports, at $1.6 billion (dollars), are up 9%, resulting in a dairy trade surplus of more than $1 billion through the first half of the fiscal year.

One program that’s helping boost global sales is the National Milk Producers Federation’s Cooperatives Working Together (CWT) program. So far in 2012, CWT has assisted member cooperatives make export sales of about 50 million lbs. of cheese and 43 million lbs. of butter and anhydrous milk fat. The milk equivalent of these exports is about 1.4 billion lbs., or the same as the annual milk production of more than 66,000 cows.

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