USDEC data shows global dairy exports on the rise despite slowdown of exports to Mexico

08-Mar-2017 - Last updated on 09-Mar-2017 at 07:06 GMT

US exports of whey to China are keeping its overall export figures positive, according to USDEC monthly data. ©iStock/marekuliasz

USDA data showed that whey and milk powder export volumes have increased for the eighth month in a row, but the data also confirmed a slowdown of dairy exports to Mexico, the largest export market for the US.

The data seems to somewhat confirm the dairy industry’s concern of the potential negative impact of the Trump Administration withdrawing the US from the Trans-Pacific Partnership, which includes Mexico.

“This puts the US agriculture sector at a competitive disadvantage,” the president of NMPF, Jim Mulhern, said at the time.

US shipments to Mexico decreased 2% to $93m in January of this year compared to the same period last year and were the lowest amount since August 2015.

“Official USDA data continues to show an increase in WMP exports to Mexico. However, we believe this volume represents SMP sales that were misclassified at the port,” USDEC said in its monthly market analysis.

Conversely, overall exports of nonfat dry milk/skim milk powder rose 13% from a year ago due to increases in sales to Pakistan and Southeast Asia.

Whey exports remain strong, especially in China

US whey exports registered the strongest growth of 41,220 tons in January 2017, up 24% from last year. According to USDEC, nearly half of whey export sales went to China, a market that has increased its dairy imports by 73% over the last eight months.

Kristi Saitama, vice president of export marketing ingredients at USDEC, penned in a recent blog that three growing demographic groups are driving demand for whey protein in China including: health-conscious adults and seniors, infants and toddlers, and “middle-class fitness enthusiasts.”

According to UN projections, the over-65 demographic will reach approximately 1.5bn people in 2050 worldwide with China representing the biggest segment of this age group. In addition, Chinese companies are increasingly looking to whey as a main source of protein for child nutrition products like infant formula.

Shrinking exports to Canada

The US dairy industry has urged Canada multiple times to drop what it calls “protectionist” trade policies that create incentives for Canadian farmers to purchase dairy products domestically instead of abiding by the rules and regulations laid out in NAFTA.

USDEC found that US exports of fluid milk and cream were up 12% in January, but shipments to Canada began to slow. Exporters sold 821,575 gallons (3.11m liters) to Canada in January of 2017, compared to an average of 1.83m gallons (6.91 million liters/month) in the fourth quarter of 2016, a decrease of 55%.