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Reduced Chinese demand holding back dairy exports

The U.S. Dairy Export Council says there are three main headwinds holding back shipments this year.

Vice President of Global Economic Affairs Will Loux tells Brownfield most losses in July were tied to low-protein whey shipments dropping by 40 percent.

“We’re basically facing every headwind you could think of right now on the international market between an absent China, a global economic crisis, and extreme competition from our major export competitors, and yet at the same time, the U.S. is only down six percent,” he says.

Dairy exports are down 12 percent in value for the first seven months of the year.  Loux is expecting China’s demand to pick up but the import mix to change moving forward.

“I think you’re going to see more skim milk powder being imported for bakery and the like, or being imported for ice cream,” he shares.  “I think you’re going to see more cheese going—we’ve seen that a lot this past year.”

Exports of cheese were flat in July (-1%), with a rebound in Japanese sales helping to offset weaker demand.  Nonfat dry milk/ skim milk powder increased slightly (+3%) after a bump in sales to Mexico.