U.S. dairy exports surged to an all-time high in April, but retaliatory tariffs on U.S. cheese by Mexico could put a dent in exports there.
Exports of U.S. dairy products set an all-time monthly record with shipments of 213,115 metric tons of milk powder, cheese, butterfat, whey and lactose.
Those exports were up 31 percent from April 2017 and broke the record of 204,453 metric tons set just a month earlier, according to the latest report from U.S. Dairy Export Council.
April exports were valued at $518.4 million, up 15 percent over a year earlier and the highest monthly value since April 2015.
Exports of ingredients continued to lead the way. Shipments of nonfat dry milk and skim milk powder to Southeast Asia were up 70 percent in volume year over year and sales to Mexico were the fourth-highest ever. Shipments of lactose to China were at record highs for the third month running, USDEC reported.
Total exports of nonfat dry milk and skim milk powder were 37 percent higher in volume than a year earlier, with sales to Mexico increasing 30 percent.
Total whey exports were 24 percent higher in volume and included record shipments to East Asia, up 123 percent.
Butterfat shipment increased 190 percent in volume, with shipment up 1,172 percent to Mexico on low comparables and 37 percent to Canada.
China again led the gains in lactose sales, increasing its imports 79 percent. Total lactose exports increased 23 percent in volume over year-earlier levels.
Cheese shipments were 22 percent higher with increases of 11 percent to Mexico, 31 percent to Japan and 15 percent to South Korea.
But USDEC is concerned with future cheese sales to Mexico, following retaliatory tariffs Mexico has put on imports of U.S. cheese in response to U.S. tariffs on Mexican steel and aluminum.
Mexico is the top export destination for U.S. cheese. With $391 million in purchases last year, Mexico imported 28 percent of all U.S. cheese exports. It is by far the largest U.S. cheese export market, exceeding second-place South Korea by $178 million in sales in 2017, USDEC said.
“Tariffs on cheese will potentially eliminate the competitive advantage we have in our No.1 market,” Tom Vilsack, USDEC president and CEO, said in a press release.
The retaliatory tariffs range from 10 to 15 percent on certain U.S. cheese products, rising to 20 to 25 percent after July 5.
“This is a significant setback for our farmers, processors and our exporters,” Jaime Castaneda, USDEC senior vice president for trade policy, said in the release.
Last year, U.S. suppliers shipped 96,413 metric tons of cheese to Mexico and the U.S. held a 75 percent share of Mexico’s cheese market. Over the last decade, both volume and value of U.S. cheese exports to Mexico have nearly tripled, according to USDEC.
Source: capitalpress.com
