gdmo data file - rdwebusdec.files.cms-plus.com/gdmo/usdec-gdmo-201306.pdf · (november-january)....

U.S. exports (MT, Jan-Apr): NDM/SMP 161,298 +3% CHEESE 95,575 +7% WHEY 153,650 +4% BUTTERFAT 18,779 +3%

2011-13 PRICE TREND - SMP, WMP, CHEESE, BUTTER, WHEY* ($/MT)

*Mid-point of range. Milk powder, cheese and butterfat are Oceania; whey is EU. Source: USDA's Dairy Market News.

Markets well supported at mid-yearEUROPE OCEANIA

SMP 3900-4300 4350-4850

(+25) (-300)

WMP 4550-5050 4750-5175

(+50) (-188)

Cheddar 4450-4800 4200-4700

cheese (+175) NC

Butter 5000-5400 4250-4650

(+150) NC

Butteroil 5600-6000 4800-5200

(+100) NC

Dry whey 1225-1450 1575-1750

(-63) (+38)

WPC-34% NA 3100-3500

NC

Lactose NA 1550-1750

(-50)

Source: USDEC.

2010 Wilson Blvd., Suite 400 � Arlington, VA 22201 � USA � PHONE 703.528.3049 � FAX 703.528.3705 � usdec.org Managed by Dairy Management Inc.™

CURRENT PRICES

$/MT, FOB SHIP (with change from mid-April)

Market Outlook

By Alan Levitt, Marc Beck and Brad Gehrke

The global dairy markets have corrected from the New-Zealand-drought-induced rally of a couple months ago, and we come to the mid-point of 2013 with prices relatively steady and well supported. Export prices out of Oceania have pulled back 10-20% since April. European prices have been stable and U.S. prices mixed. The market is expected to remain firm in the third quarter due to ongoing supply constraints in major exporting countries.

Production shortfalls are still hanging over the market. Milk production among the five major suppliers (EU-27, United States, New Zealand, Australia and Argentina) was down approximately 3.2% in March and April, a decline of nearly 1.5 million tons of milk. There’s still not much product available from South America, and the European and United States spring flushes have come and gone. We expect modest improvement in the second half of the year, but project overall milk production from these five suppliers to be about flat for calendar 2013.

Recent rains came too late to salvage New Zealand’s current season --production there was down about 25% in March and April. Because of heavy culling and strong comparables, it will be tough for New Zealand to turn back to positive anytime soon. As a result, we project Kiwi milk production will be down 5-7% for calendar year 2013, a reduction of 1.4 million tons, equivalent to about 160,000-200,000 tons less product available this year to overseas buyers. Furthermore, we expect the cupboard is mostly bare: New Zealand exports were up about 14% year-over-year in the August-to-April period, even though milk production in the same nine months was flat, suggesting significant inventory draw-down ahead of the new season.

Turn to Well supported, p. 2

June 11 2013

Volume 17, No. 6U.S. Dairy

Export Council

© Copyright 2013 U.S. Dairy Export Council. All rights reserved by copyright owners. Reproduction of all portions of this newsletter is permitted with proper

credit to U.S. Dairy Export Council.

GLOBAL DAIRY

1000

1120

1240

1360

1480

1600

2600

3240

3880

4520

5160

5800

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Whey

SM

P,

WM

P, C

heese,

Butter

SMP WMP CHEESE BUTTER WHEY

2011 2012 2013

OVERVIEW 2

TOTAL MILK PRODUCTION FROM MAJOR EXPORTERS (000 MT)

Source: USDA, EuroStat, DairyAustralia, DCANZ, Argentina Ministry of Agriculture.

Well SupportedContinued from p 1

Exporters are making strategic decisions in the face of lower output. New Zealand is focusing its dwindling milk flow on whole milk powder at the expense of cheese and butter. On the other hand, the Europeans are focusing on cheese and butter (for internal needs and for Russia), and producing less milk powder.

Meanwhile, buying activity remains good, though higher commodity prices have given some buyers pause. In addition, substitution has become more feasible, as the premium of dairy protein/fat vs. vegetable protein/fat has risen over the last 6-9 months.

Still, in the first four months of the year, imports from China (+17%), Russia (+25%) and Algeria (+16%) all were strong. Russia milk production is lagging year-ago levels – an indication that imports will continue. Mexico production is flat, even as consumption continues to grow, so they’ll need to buy too. On the other hand, Japan milk production is down this year, but consumption is lower, making more milk available for manufacturing.

Buyers are mostly covered for near-term needs and are now starting to extend coverage for third quarter and into fourth quarter. Of course, purchases from China are seasonally slower. Over the last four years, China’s imports of milk powder and whey were 31% lower in Q3 than in the other three quarters. By fourth quarter, though, China will be ordering heavily again. The safeguard trigger for the China-New Zealand FTA increases again in 2014, and Chinese buyers will be putting in orders in November and December to get product in the pipeline for imports during January and February to get the tariff break before the trigger is hit.

We expect supply tightness will keep prices at or near current levels over the next 3-5 months – at least until Oceania flush production comes on the market. There is a growing belief that markets may remain undersupplied into 2014. However, keep an eye on how quickly supply responds to higher farmgate milk prices in major supply regions. Fonterra’s opening payout price for 2013/14 was up

ABOUT THIS ISSUE

Global Dairy Market Outlook is written and distributed monthly by the U.S. Dairy Export Council (USDEC), 2101 Wilson Blvd., Suite 400, Arlington, VA 22201, USA, (703) 528-3049, FAX (703) 528-3705, website www.usdec.org. Data is compiled and analyzed by Alan Levitt, vice president of communications and market analysis; Marc Beck, executive vice president of strategy and insights; and Brad Gehrke, director of global trade analysis. Analysis is supported by USDEC's network of nine international offices.

This issue of Global Dairy Market Outlook covers conditions at early June, 2013.

USDEC uses sources believed to be reliable but cannot warrant the accuracy of the information herein. Global Dairy Market Outlook is solely for information purposes and is not to be construed as commercial trading advice.

The U.S. Dairy Export Council, primarily funded by Dairy Management Inc. through the producer checkoff, works closely with its member processors, trading companies and others to build global demand for U.S. dairy products.

Includes EU, U.S., New Zealand, Australia and Argentina. EU and Argentina are milk deliveries. 30-day months. * April-June 2013 USDEC estimate.

21% from the prior year, FrieslandCampina and other European suppliers are offering record-high payments (up 20% or more from a year ago), and farmgate milk prices in South America are up nearly 20% since December. All this will eventually bring on more milk.

Current and forecast conditions are favorable for U.S. suppliers. U.S. export prices have returned to a favorable relationship with Oceania and European prices. In April, the United States posted record-high shipments of nonfat dry milk/skim milk powder (55,187 tons) and improved volumes of cheese (25,551 tons), lactose (29,523 tons) and whey proteins (41,456 tons). Tight alternative supplies and firm prices in the months ahead should enable U.S. exporters to boost share versus global competitors in the months ahead.

20,300

20,940

21,580

22,220

22,860

23,500

J F M A M J J A S O N D

2011 2012 2013*

U.S. Dairy Export Council - Global Dairy Market Outlook - Visit us at usdec.org JUNE 11, 2013 - VOLUME 17, NO. 6

U.S. exported 15.7% of its milk production (TSB) in April YTD volumes +6% vs. prior year: PAGE 7 3

U.S. ExportsU.S. DAIRY EXPORTS, TOP 10 MARKETS (JANUARY-APRIL AND % CHANGE VS. PRIOR YEAR)

U.S. exports reach record levels in AprilU.S. EXPORTS AS % OF PRODUCTION

Jan-Apr 2013 yr ago

NDM/SMP 46% 44%

Total cheese 5.7% 5.4%

Butterfat 5.8% 5.8%

Dry sweet whey 48% 47%

Lactose 72% 66%

Total milk solids 13.7% 13.0%

U.S. EXPORTS AND IMPORTS AS % OF PRODUCTION

Source: USDA, USDEC, National Milk Producers Federation.

Capitalizing on steady global demand, declining supply from other exporters and favorable pricing relationships, U.S. dairy exporters moved record volumes overseas in April. U.S. exports of dry ingredients (milk powder, whey products, lactose), cheese and butterfat topped 168,000 tons in April, up 20% compared with March (on a daily-average basis). Total value was $558.8 million, up 16% from March, and also a new high.

Gains were led by an unprecedented level of milk powder shipments. April exports of NDM/SMP were 55,187 tons; the previous high was 47,787 tons in October 2010. Exports were equivalent to 61% of U.S. NDM/SMP production in April, leading to a steep draw-down in manufacturers’ stocks during the month. April also marked the third straight month of improved export volumes. February-April shipments

were 38% higher than volumes posted in the previous three months (November-January).

Shipments of cheese, WPC and lactose also continue to exceed prior-year levels. Cheese exports in the first four months of the year were up 7% vs. a year ago, WPC was up 16% and lactose was up 11%. In addition, fluid milk/cream (+62%) and ice cream (+52%) posted very strong increases in the January-April period.

Dry whey exports improved in April, posting their highest volume since May 2012. April exports of 19,647 were up 6% vs. a year ago.

On a total-solids basis, exports were equivalent to 15.7% of U.S. milk production in April, easily the most ever. Meanwhile, imports as a percent of milk-solids production were 2.9%.

CHINA

$135 m, -3%

JAPAN

$110 m, +7%

SO. KOREA

$88 m, +22%

SOUTHEAST ASIA

$368 m, +10%

MIDDLE EAST/NO. AFRICA

$207 m, +19%

MEXICO

$425 m, +3%

CARIBBEAN

$61 m, -12%

OCEANIA

$94 m, +43%

CANADA

$215 m, +18%

SOUTH AMERICA

$86 m, +11%

1.0

4.4

7.8

11.2

14.6

18.0

2008 2009 2010 2011 2012 2013

% o

f m

ik p

rod

ucti

on

(T

SB

)

EXPORTS IMPORTS

NDM/SMP...................................4Cheese..........................................4Butterfat.......................................4Whey Products.............................5

Lactose..........................................6WMP.............................................6Food Preps (Blends)......................6Fluid milk/cream...........................6


U.S. EXPORTS 4

NDM/SMP, Cheese & Butterfat

NDM/SMP U.S. NDM/SMP EXPORTS - ROLLING QUARTERS (MT) U.S. NDM/SMP CUSTOMERS (MT)

CHEESE U.S. CHEESE EXPORTS - ROLLING QUARTERS (MT) U.S. CHEESE CUSTOMERS (MT)

BUTTERFAT U.S. BUTTERFAT EXPORTS - ROLLING QUARTERS (MT) U.S. BUTTERFAT CUSTOMERS (MT)

Source: USDA.

-

2,000

4,000

6,000

8,000

10,000

SaudiArabia

Iran Egypt Morocco UAE

JAN-APR 2012 JAN-APR 2013

35,000

56,000

77,000

98,000

119,000

140,000

2010 2011 2012 2013

15,000

29,000

43,000

57,000

71,000

85,000

2010 2011 2012 2013

0

14,000

28,000

42,000

56,000

70,000

Mexico SE Asia ME/NA China Peru


-

5,000

10,000

15,000

20,000

25,000

Mexico So. Korea ME/NA Japan Canada


-

5,600

11,200

16,800

22,400

28,000

2010 2011 2012 2013

NDM/SMP exports are trending higher. U.S. powder exports in April were 55,187 tons, 40% more than last year and the highest month ever by a significant margin. In April, volumes to Southeast Asia were up 72% vs. prior year and shipments to Middle East/North Africa more than doubled.

Cheese exports are steady at near-record levels. U.S. exports in April were 25,551 tons, up 6% vs. a year ago. In the first four months of the year, shipments to Mexico were up 10% vs. prior year, while South Korea (+7%), Japan (+35%) and Egypt (+161%) also posted gains.

Butterfat exports slipped back in April after improving in the previous four months. U.S. exports in April were 4,187 tons, down 29% vs. a year ago. So far in 2013, nearly 84% of the volume has gone to the Middle East/North Africa region, primarily Saudi Arabia and Iran.


U.S. EXPORTS 5

Whey Products

U.S. TOTAL WHEY EXPORTS - ROLLING QUARTERS (MT) U.S. TOTAL WHEY CUSTOMERS (MT)

U.S. DRY WHEY EXPORTS - ROLLING QUARTERS (MT) U.S. DRY WHEY CUSTOMERS (MT)

U.S. WPC EXPORTS - ROLLING QUARTERS (MT) U.S. WPC CUSTOMERS (MT)

U.S. WPI EXPORTS - ROLLING QUARTERS (MT) U.S. WPI CUSTOMERS (MT)

Source: USDA.

90,000

99,000

108,000

117,000

126,000

135,000

2010 2011 2012 2013

40,000

48,000

56,000

64,000

72,000

80,000

2010 2011 2012 2013

35,000

43,000

51,000

59,000

67,000

75,000

2010 2011 2012 2013

2,800

3,300

3,800

4,300

4,800

5,300

2010 2011 2012 2013

0

11,000

22,000

33,000

44,000

55,000

China SE Asia Mexico Canada Japan


-

5,400

10,800

16,200

21,600

27,000

China SE Asia Canada Japan Mexico


-

6,000

12,000

18,000

24,000

30,000

China SE Asia Mexico So. Korea Canada


-

400

800

1,200

1,600

2,000

Canada EU SE Asia Japan Brazil China


Whey export volumes are trending higher. U.S. exports of whey products in April were 41,456 tons, up 13% vs. March (daily-average basis). The composition of U.S. whey exports continues to shift up the value-chain: WPC exports were up 16% in the January-April period (vs. prior year), while dry whey shipments were down 5%. China remains the major customer for U.S. whey products, with YTD purchases up 19% vs. 2012.


U.S. EXPORTS 6

Other Products

U.S. LACTOSE EXPORTS - ROLLING QUARTERS (MT) U.S. LACTOSE CUSTOMERS (MT)

U.S. WMP EXPORTS - ROLLING QUARTERS (MT) U.S. WMP CUSTOMERS (MT)

U.S. FOOD PREPS (BLENDS) EXPORTS - ROLLING QUARTERS (MT) U.S. FOOD PREPS (BLENDS) CUSTOMERS (MT)

U.S. FLUID MILK/CREAM EXPORTS - ROLLING QUARTERS (000 LITERS) U.S. FLUID MILK/CREAM CUSTOMERS (000 LITERS)

Source: USDA.

50,000

58,000

66,000

74,000

82,000

90,000

2010 2011 2012 2013

-

6,000

12,000

18,000

24,000

2010 2011 2012 2013

12,500

15,500

18,500

21,500

24,500

2010 2011 2012 2013

-

5,600

11,200

16,800

22,400

28,000

SE Asia China NZ Japan Mexico


-

300

600

900

1,200

1,500

SE Asia Mexico China/Hong Kong Israel Canada


-

2,800

5,600

8,400

11,200

14,000

Canada Africa Mexico SE Asia Central America


9,000

11,800

14,600

17,400

20,200

23,000

2010 2011 2012 2013

-

3,000

6,000

9,000

12,000

15,000

Canada Mexico China/HongKong

SE Asia Caribbean


Lactose and fluid milk exports are moving at a record pace in early 2013. In the first four months of the year, lactose export volume was 114,505 tons, up 11% vs. a year ago. Exports of fluid milk/cream topped 28.3 million liters, up 62% compared with a year earlier.


U.S. EXPORTS 7

5-Year Trend

U.S. EXPORTS VOLUME AND VALUE

NDM/SMP (MT) CHEESE (MT) BUTTERFAT (MT)

TOTAL WHEY (MT) DRY WHEY (MT) WPC (MT)

WPI (MT) LACTOSE (MT) WMP (MT)

FOOD PREPS (BLENDS) (MT) FLUID MILK (000 LITERS) TOTAL EXPORT VALUE (MILLION $)

Sources: USDA, USDEC.

-

14,000

28,000

42,000

56,000

70,000

2009 2010 2011 2012 2013

-

100,000

200,000

300,000

400,000

500,000

2009 2010 2011 2012 2013

-

60,000

120,000

180,000

240,000

300,000

2009 2010 2011 2012 2013 -

50,000

100,000

150,000

200,000

250,000

2009 2010 2011 2012 2013

-

4,000

8,000

12,000

16,000

20,000

2009 2010 2011 2012 2013 -

66,000

132,000

198,000

264,000

330,000

2009 2010 2011 2012 2013 -

15,000

30,000

45,000

60,000

2009 2010 2011 2012 2013

-

18,000

36,000

54,000

72,000

90,000

2009 2010 2011 2012 2013

-

54,000

108,000

162,000

216,000

270,000

2009 2010 2011 2012 2013

-

16,000

32,000

48,000

64,000

80,000

2009 2010 2011 2012 2013 -

1,080.0

2,160.0

3,240.0

4,320.0

5,400.0

2009 2010 2011 2012 2013

TOTAL

YTDfor charts below:* Volume includes SMP, WMP, food preps, whey, cheese, butterfat, lactose

April exports top $558 millionU.S. exports in April were valued at a record-high $558.8 million, 21% more than last year. Aggregate export volume of dry ingredients (milk powder, whey products and lactose), cheese and butterfat was 168,069 tons, 19% more than March on a daily-average basis and 36% more

than the pace of Q4-2012.

130

224

318

412

506

600

50,000

80,000

110,000

140,000

170,000

200,000

2008 2009 2010 2011 2012 2013

Valu

e (

millio

n $

)

Vo

lum

e (

MT

)

AGGREGATE VOLUME, SELECTED PRODUCTS* TOTAL DOLLAR VALUE

-

96,000

192,000

288,000

384,000

480,000

2009 2010 2011 2012 2013


gdmo data file - rdwebusdec.files.cms-plus.com/gdmo/usdec-gdmo-201306.pdf · (november-january)....

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