Analysing HIS data, Italian dairy economic consulting firm Clal reported that US dairy exports recovered in February after a year in negative territory. The resurgence was driven by cheese exports, which grew by more than 10,000 tons, or 32.1% year on year.
The lower prices of almost all major dairy products likely supported the increase in export activity, including in cheese where an average unit price stood at $4.56/kg, 15% lower year-on-year.
CLAL predicts a possible upward push in SMP prices, however, if demand increases, particularly given the recent rise in demand from Asian countries. US production of SMP had been kept at minimum for several months now and stocks in February are more than 30% lower than the same time last year, the firm reported. According to FAS-USDA data, domestic consumption of SMP in Jan-Feb 2024 increased more than 20%.
During February’s Agricultural Outlook Forum hosted by the USDA, agricultural economist Michael McConnell said dairy exports were projected to grow faster than imports as tight supplies in the global markets increase the competitiveness of US dairy prices.
“Overall, global dairy trade is expected to be constrained by lower milk production in several key exporters - notably the European Union and New Zealand,” McConnell explained. “Lower milk production in these markets is expected to translate into lower exports of several dairy products, in particular butter and non-fat dairy milk. This is expected to help support global dairy prices.
“The reduced production in Europe and Oceania would provide opportunities for other dairy exporters to meet global demand, with the US well-positioned to ship product to key markets,” he said.
McConnell added that skim-solid exports are projected at 4% higher than 2023, though export demand is set to compete with domestic use.