Friday, August 13, 2021
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Dairy
Dairy exports continue strong pace
By CAROL RYAN DUMAS
Capital Press
Despite challenges, U.S.
dairy exports for the first half
of the year were up 13% in
both volume and value.
Shipments of nonfat dry
milk and skim milk pow-
der led the way with a nearly
15% increase year over year
from January through June —
despite congestion at ports,
particularly in California.
Snarled ports weighed on
U.S. dairy exports to South-
east Asia, particularly milk
powders, according to ana-
lysts with the U.S. Dairy
Export Council. Product still
moved, with nonfat dry milk
and skim milk powder up 1%
in the first half of the year.
“But we believe that
plenty of product that has
been booked for export has
not left U.S. shores yet,” the
analysts said.
With slower exports to
Southeast Asia, the recovery
in milk powder demand to
Mexico has been particularly
welcome. Total nonfat dry
milk and skim milk powder
to Mexico in the first half of
the year increased 25% over a
year earlier.
“While we attribute some
of the strength in Mexi-
co’s demand to drought that
is affecting local milk pro-
duction, the overall gain in
imports is still a positive sig-
nal for recovering consumer
demand within the country,”
the analysts said.
Recession and the pan-
demic
depressed
dairy
demand and imports in Mex-
ico for most of 2020.
As for whey exports, the
story has been one of demand.
U.S. whey exports were up
nearly 24% in the first half of
the year, putting the U.S. on
pace for another record year
in that category.
“At the risk of sounding
like a broken record, China is
fueling the growth,” the ana-
lysts said.
Whey for feed has been
the key driver as China’s
pork industry consolidates
into more commercial opera-
tions and continues to rebuild
its swine herd following the
devastation of African swine
fever.
“The approval for per-
meate to be used in food has
undoubtedly helped as well,
but the market remains small
at this point,” the analysts
said.
Permeate is used globally
in bakery and confectionery
items, beverages, dairy and
snacks.
On the high value side,
China’s push to increase
domestic manufacturing of
infant formula has increased
demand for high-protein
whey, known as WPC80.
The increase is also due to
its use in nutritional sup-
plements, beverages and
yogurt.
Compared with the steady
growth of powder and whey,
U.S. cheese exports have been
on a roller coaster — diving in
January, spiking in April and
diving again in June.
“Still, U.S. cheese sales
managed positive growth
through the first six months
and rose a respectable 2.3%,”
the analysts said.
U.S. dairy exports January – June 2021
Product
(Metric Tons)
2020
2021
% change
NDM/SMP
408,623
469,644
14.9
Dry whey products
257,588
318,607
23.7
Cheese
192,538
197,037
2.3
Lactose
199,996
197,922
-1.0
WMP
20,474
21,401
4.5
Butterfat
11,648
26,716
129.4
MPC
23,103
21,232
-8.1
Infant formula
17,767
14,286
-19.6
Evap/Cond milk
5,444
6,423
18.0
Casein
1,686
1,120
-33.6
64,564
71,312
10.5
Total volume* (metric tons)
1,049,449
1,183,185
12.7
Total value (million dollars)
3,361.7
3,809.4
13.3
Milk/cream (liters)
*milk solids equivalent
Source: U.S. Dairy Export Council and U.S. Census Bureau
Strong powder, whey exports expected
By CAROL RYAN DUMAS
Capital Press
Dairy West
High Desert Milk CEO and co-founder Randy Robin-
son and Brandon Carter, the cooperative’s director
of research and development, examine a milk sam-
ple they’re testing in the Burley, Idaho, processing
plant’s lab.
Idaho milk processor
to double output
Capital Press
BURLEY, Idaho —
High Desert Milk is invest-
ing $50 million in a proj-
ect to increase its annual
butter output from 45 mil-
lion pounds to 85 million
pounds and add a new,
high-demand milk-powder
product — MPC-70 — to
its lineup.
The co-op, in Bur-
ley, Idaho, announced
its expansion in a press
release.
MPC-70 is a milk-pro-
tein concentrate often used
in sports-nutrition bever-
ages, protein bars, icings,
desserts, soups, sauces,
baked goods and dairy
foods.
The co-op plans to pro-
duce 36 million pounds of
MPC-70 annually, with
60% earmarked for Latin
America.
The
new
produc-
tion line, which is part of
a 10-year growth plan,
became operational in
June. Although a coopera-
tive, High Desert recently
began contracting milk.
“Finding new sources
of milk is a new business
model for us as a verti-
cally integrated coop-
erative,” Randy Rob-
inson,
High
Desert
CEO, said in the press
release.
“We currently receive
2.2 million pounds of
milk per day, and when
our MPC-70 production
line goes online our intake
capacity will reach 4.7 mil-
lion pounds per day,” he
said.
The co-op also produces
68 million pounds of non-
fat dry milk annually.
A half-dozen dairy farm
families joined together
in 2001 to establish High
Desert Milk as a market-
ing cooperative to secure
better pricing. It built a
milk powder plant in 2008
and began offering sweet
cream in 2008 and butter
in 2013.
“We have dedicated
people, the resources and
the room it takes to have
a thriving dairy industry
in this state. Our ability
to provide the world with
safe, nutritious, sustain-
able and affordable prod-
ucts is one of our great-
est assets,” Robinson
said.
High Desert Milk han-
dles everything from the
animal feed to the milk-
ing parlor to the package,
allowing the company to
control quality and food
safety, he said.
The company has
been a leading innova-
tor in the food-production
business since its incep-
tion, said Karianne Fal-
low, CEO of Dairy West,
a regional dairy promotion
organization.
The U.S. Dairy Export
Council sees plenty of
demand for milk powders
and whey exports in the sec-
ond half of the year but says
cheese exports will depend on
pandemic progress.
In the first half of 2021,
year-over-year exports were
up 14.9% for nonfat dry milk
and skim milk powder, 23.7%
for whey and 2.3% for cheese.
While port congestion will
remain a headache for U.S
powder exporters through
at least the end of the year,
strong growth is expected as
plenty of product already sold
to overseas buyers is waiting
to be shipped.
“That product will move
— even if it ships two months
later than it was supposed to,”
USDEC analysts said.
With robust U.S. milk pro-
duction expected in the sec-
ond half of the year, there
should be plenty of available
supply for export.
While there remain plenty
of things to keep an eye on
— the most significant being
COVID-19 outbreaks in
Southeast Asia — the U.S
should be well-placed to grow
its powder exports given lim-
ited production in Europe and
New Zealand’s focus on sat-
isfying Chinese demand, the
analysts said.
On the whey front, China’s
insatiable demand for whey
for feed to rebuild its swine
herd has been put into ques-
tion with the collapse of pork
prices in China.
“This seems to have
already impacted whey
demand as U.S. dry whey
prices have fallen from their
peak and industry contacts
confirm Chinese purchasing
has slowed,” the analysts said.
But that price decline fails
to tell the whole story. More
recent outbreaks of African
swine fever in China had pro-
ducers sending hogs to mar-
ket in a frenzy to avoid out-
breaks on their operations,
fueling the collapse in pork
prices.
Pork prices are now at pre-
ASF levels. If they begin to
tick back up, there may be
renewed demand for whey
as pork producer margins
become more conducive to
expansion.
Additionally, the whey
market is not only about
China — particularly regard-
ing higher protein whey.
U.S. whey exports to coun-
tries other than China showed
solid growth in the first
half of the year, despite his-
torically high prices, the
analysts said.
“Overall, demand is
expected to be strong glob-
ally for whey in the back half
of the year. And while there is
risk of a slight pullback from
China, we still expect whey
exports to be at — or, more
likely, above — where they
were in 2020 through the end
of the year,” they said.
U.S. cheese exports have
been on a roller coaster
this year, but favorable
U.S. prices have incentiv-
ized international custom-
ers to look to the U.S. for
supply.
“While nations are tight-
ening foodservice restrictions
in the face of the Delta vari-
ant (of COVID-19), few of
the major cheese buyers have
so far returned to complete
lockdown status,” the ana-
lysts said.
But there’s a lot of uncer-
tainty, and much of U.S.
cheese export performance
will depend on pandemic
progress.
“Overall,
we
antici-
pate favorable pricing, good
demand and plenty of supply
available for export — which
should result in growth in the
second half of the year — but
don’t expect the roller coaster
to be over,” the analysts said.
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