Last year will be a tough act to follow when it comes to dairy exports. A new report by the U.S. Dairy Export Council (USDEC) notes that the numbers were up in several categories. For example, the U.S. sold to buyers outside its borders dairy products valued at $3.822 billion, says USDEC. The report notes that 2008’s overall success was no flash in the pan. It was the fifth year in a row that U.S. dairy exports rose.

Over that time period, their value increased 29 percent. And, the value of the dairy products the U.S. sold to foreign buyers topped the value of the products that were imported. Imports were valued at $3.318 billion, $504 million below the value of the dairy exports.

True, the volume of dairy products the U.S. imported last year was up nine percent over 2007. But on a solids basis, the U.S. exported more than twice the amount it imported.
Last year, U.S. milk processors exported nearly half of their output of certain dairy product categories. For instance, USDEC points out that 55 percent of the lactose produced here went to foreign buyers. In addition, 48 percent of the whey protein was exported. Nonfat dry milk and skim milk powder were not far behind, at 46 percent exported.

What’s more, the volume of nonfat dry milk and skim milk powder exported was up 52 percent from 2007. The volume of those two products sold beyond U.S. borders was 863 million pounds. “Increases were evident in virtually all markets,” according to USDEC. “Sales of nonfat dry milk and skim milk powder to Mexico, the largest single market for U.S. milk powder, increased 58 percent. Exports to Southeast Asia increased 33 percent, with strong gains in shipments to the Philippines and Indonesia. Significant increases in export volumes were also noted to North Africa (primarily Algeria and Egypt), South America, Japan, China, the Caribbean and Central America." The U.S. also sold 12 percent of its butter to foreign markets last year. For cheese, the number was three percent.

It turned out to be a record year for cheese exports from the U.S. Two-hundred-ninety million pounds of cheese were exported. That was up 32 percent from the year before.

Mexico bought the most U.S.-made cheese, increasing its purchases 10 percent from 2007.
Shipments of cheese to other countries besides Mexico also increased, USDEC notes. Cheese sales to North Africa and the Middle East rose 145 percent, while those to Southeast Asia rose 78 percent. South Korea bought 56 percent more U.S.-produced cheese than it did during 2007. Caribbean and Central American countries purchased 40 percent more U.S. cheese. And, for the second year in a row, Australia ranked seventh in purchases of U.S.-made cheese.

Another bright spot for U.S. dairy exports was butterfat. Exports of it more than doubled from 2007, up 125 percent. The butterfat total was 197 million pounds. “This was the highest figure since 1994, when the majority of U.S. exports were via government programs,” USDEC says. More than a third of the exported butterfat went to North Africa and the Middle East. The largest purchasers were Morocco, Saudi Arabia and Egypt.

“The biggest single markets in 2008 were Russia, where U.S. exports increased more than fivefold, and Japan, where butterfat purchases went from virtually nothing in 2007 to 28 million pounds last year,” USDEC points out. “Mexico and Canada remained key markets, as well. Meanwhile, butterfat shipments to the European Union dropped 70 percent.”

Exports of fluid milk also rose. Yes, they diminished during the second half of the year, but overall, fluid milk exports were up eight percent, totaling 110 million pounds.

Two countries n Mexico and Canada n purchased virtually equal amounts of U.S. fluid milk. Canada’s purchases “jumped” 55 percent, USDEC reports, while Mexico’s dropped by 23 percent.

One more category of U.S. dairy exports rose. Lactose exports finished the year at 409 million pounds, up two percent. USDEC lists the major markets for lactose as Southeast Asia, Japan, China and Mexico.

Other products down

While 2008 brought strength in the exports of some dairy products, it brought weakness in others. For example, exports of whey proteins dropped by 737 million pounds, or 20 percent.

USDEC says, “High prices from 2007 had a severe negative impact on global demand. Food formulators in the bakery, confectionery and food processing sector switched to less-expensive vegetable oils and proteins, and livestock operators switched to lower-cost alternatives. Sales were down across all categories.”

Among the subcategories of whey protein, sweet whey exports were off 24 percent, slipping to 444 million pounds. Sales of whey protein concentrate and other modified whey proteins fell 13 percent from the year before, to total 267 million pounds. Whey protein isolate exports were 26 million pounds, a 14 percent decline from 2007.

Although overall exports of whey protein were lower, sales to China rose. They climbed by 23 percent, making China the largest customer of U.S.-produced whey protein.

“Gains were driven by a strong increase in exports of whey protein concentrate and isolate, which nearly doubled from the prior year,” USDEC says. “Exports to Southeast Asia, the next largest market, dropped just three percent.”

But, sales to Canada and Mexico were down a “significant” amount, according to USDED. Those two nations bought 44 percent les whey protein from the U.S. than they did during 2007.

In addition, exports of whey protein were off by 19 percent to Japan. South Korea bought 51 percent less, and South American nations bought four percent less.

Another category that saw lower exports was food preparations containing dairy ingredients. They were down one percent, to 172 million pounds.

Finally, exports of ice cream melted by two percent, shrinking by 56 percent. Mexico remained the primary buyer of U.S. ice cream, but it purchased one percent less than it did the year before.

Overall, Mexico held onto its title as the No. 1 market for exported U.S. dairy products. Mexico spent $925 million on U.S. dairy products.