Spring flush collides with slowing exports
Dairy product manufacturers are running operations full tilt in the midst of the spring milk flush despite ongoing struggles with supply chain constraints, specifically trucking and labor. The abundant flow of milk has resulted in record production of some dairy products.
Cheese manufacturers produced a record amount of cheese at the start of the year, with January and February both notching new high marks. Meanwhile, the pace of butter, nonfat dry milk, and skim milk production also showed improvements over the prior year. The seasonal spike in supply, though, unfortunately collides with a slowing export pace.
As expected, dairy exports are showing signs of lethargy, commensurate with a weakening global economy that is struggling under the trifecta of inflation, rising interest rates, and geopolitical uncertainty. For the first time in over a year, the export pace in February shrank from the year prior. U.S. dairy exports for the month slipped to 458.5 million pounds, down 0.3% year-over-year. On a value basis, exports slowed 3.3% year-over-year to $665.6 million.
April 26, 2023