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IDFA outlines surge in US dairy exports

By Guy Montague-Jones , 06-Aug-2010

The International Dairy Foods Association (IDFA) has reported a “dramatic surge” in US dairy exports over the past three months.

In a dairy market update, IDFA economic analyst Rob Blaufuss said that between March and May 2010 cheese exports were 83 per cent above the figures for last year, while butter and nonfat dry milk exports increased on 2009 by 189 percent and 72 percent, respectively.

Overall export figures

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 percent compared to year-ago levels, while total export value experienced an increase of 64 percent.

The numbers have played a crucial role in the increase in demand for US dairy so far this year, according to IDFA. Blaufuss said: “Commercial disappearance numbers were buoyed by a dramatic surge in U.S. dairy exports over the past three months.”

As for overall demand figures, positive increases were seen in cheese, butter and nonfat dry milk. In cheese, a 0.6 per cent decline in American-type products was offset by a 4.7 percent boost in demand other-type cheeses, while commercial disappearance of butter increased 1.3 per cent to May and nonfat dry milk experienced 15.4 per cent 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 percent compared to a year ago. (National Agricultural Statistics Service (NASS) figures)

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

Pricing trends

For example, NASS block cheddar cheese prices through the week ending July 17, 2010 averaged about $1.44, more than 20 per cent above their year-ago levels. Butter prices and nonfat dry milk prices are also looking healthy compared to last year – up 29.5 per cent and 43 per cent on 2009, respectively.

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 per cent 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 per cent. Fonterra blamed the strength of the New Zealand dollar, increased production and an uncertain economic picture for the downward trend.

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