Global dairy markets drifted lower throughout the summer. Buying activity slowed, as China, Russia and other major importers worked off inventories built in the fi rst part of the year. As an indication of the trend, combined exports of milk powder, cheese, butterfat and whey from Oceania, Europe and the U.S. were up 17 percent in the fi rst four months of the year compared with the prior year, but down 3 percent in May and June. As a result, milk powder stocks in Europe and the U.S. have grown.

Buyers remain less aggressive in light of downside risks in the marketplace, including a volatile and unsettled global fi nancial situation, strong production growth in the Southern Hemisphere and an easing of Russian import needs.

Conditions have been favorable for a good start to the Oceania milk production season, which is beginning to build toward its October peak. A severe blizzard last month in New Zealand resulted in temporary plant closures

and milk dumping, but the overall impact was minimal. Milk production growth has been strong elsewhere as well. In the fi rst half

of the year, milk deliveries in the EU-27 were up 2.1 percent, an increase of about 3.2 billion lbs. from last year. And in Argentina, milk production was up 16 percent in the fi rst half of the year, with growth moving into the export market.

� e outlook for the balance of the year may depend on the continued strength of global dairy demand. Oceania’s early-season production is mostly booked, but changes in purchasing from China, Russia or India could change the balance. As we’ve seen in the last few years, small shocks in either demand or supply can have a large impact on price.

One factor that should support global dairy markets is high production costs worldwide. Prices of dairy commodities will need to stay at or above current levels to ensure even “low-cost” suppliers get a suffi cient return. PD

Dairy trade slows in summer months

export

WATCHThe following update is provided by the U.S. Dairy Export Council (USDEC), a non-profi t, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC programs and activities are supported by the dairy checkoff program, with additional funding from the U.S. Department of Agriculture, Foreign Agricultural Service and from membership dues. For more information, go to www.usdec.org

(Che

ddar

, But

ter,

SMP,

WM

P)

WK1

Cheddar Butter SMP WMP Whey

(Whe

y)

5 9 13 17 21 25 29 33

2011 World dairy prices ($/lb.)

Source: USDA’s Dairy Market News. Cheddar, butter, SMP and WMP are Oceania; whey is Europe.

2011 World dairy prices ($/lb.)Global dairy prices eased overthe summer, as buyinginterest slowed.

$1.40

$1.65

$1.90

$2.15

$2.40 0.72¢

0.66¢

0.60¢

0.54¢

0.48¢

Export growth in NZ, EU, US, Australia(% change vs. prior year)

J F M A J J A O N DM F M AS J

Exports from Oceania, Europe and the U.S. were up 17 percent in the first four months of the year compared with the prior year but down 3 percent in May and June.

Includes milk powder, cheese, butterfat and whey. Source: Global Trade Atlas, USDA

-8

0

8

16

24

M J

2010 2011

WORLD M

ARKETS

AAddvvaanncceedd RRaattiioonn FFoorrmmuullaattiioonn TTeecchhnniiqquueess

EExxppeerrtt NNuuttrriittiioonnaall CCoonnssuullttaattiioonn

FFaarrmm MMaannaaggeemmeenntt AAddvviiccee

SSuuppeerriioorr FFeeeeddss && IInnggrreeddiieennttss

SSeeeedd && AAggrroonnoommiicc SSuuppppoorrtt

IInnooccuullaannttss && PPrreesseerrvvaattiivveess

SSppeecciiaallttyy PPrroodduuccttss

PPeerrssoonnaalliizzeedd SSeerrvviiccee

IImmpprroovveedd PPeerrffoorrmmaannccee

SSoolluuttiioonnss ffoorr SSuucccceessss!!

We have Nutritional Consultants in over twenty- five states! Contact us today to locate your

nearest Renaissance Representative!

1.800.346.3649

wwwwww..rreennnnuutt..ccoomm

At Renaissance, we understand the challenges, opportunities, and dreams of dairy

farmers across our nation. We want to be part of your farm management team, working with you every day to achieve solutions for your success!

Americans depend on you for a safe, wholesome and plentiful milk supply. You can depend on Renaissance for solutions!

RREENNAAIISSSSAANNCCEE NNUUTTRRIITTIIOONN

We’re On Your Team!

Renais sance… for Results!

st

nd

FREEZER

The Colostrum Management System

18 Progressive Dairyman Issue 14 • September 22, 2011

U.S.

EXP

ORTS

U.S.

EXP

ORTS

From May 2010 to June 2011, U.S. dairy exports were generally reliable. During those 14 months, aggregate export volume of dry ingredients (milk powders, whey proteins and lactose), cheese and butterfat averaged 132,000 tons per month. Signifi cantly, shipments were between 125,000 and 145,000 in every month but one.

This consistency has been benefi cial for the U.S. dairy sector, which has come to rely on steady overseas sales – rather than ups and downs – to clear supply.

In the fi rst half of the year, aggregate export volume was up 16 percent from last year. Total exports were valued at $2.30 billion, an improvement of 34 percent.

Exports accounted for 13.1 percent of U.S. milk solids production in the fi rst half, compared with 12.8 percent of production

in all of 2010 and 9.3 percent in 2009.NDM/SMP exports were up 39 percent

in the fi rst half of the year, to 218,158 tons. Shipments to Mexico and Vietnam, our two largest markets, more than doubled.

Cheese exports were 119,468 tons in January-June, 48 percent higher than the prior-year level. Major customers were Mexico, South Korea, Middle East/North Africa and Japan. Signifi cantly, exports were equivalent to a record-high 5.0 percent of cheese production during the fi rst half.

Butterfat shipments also increased. Exports in the fi rst six months of the year were 39,854 tons, up 57 percent.

Whey export volumes (217,454 tons in the January-June period) were down slightly from last year.

Exports running at consistent pace

J A J O A J O A J O OJ J A AJJ J

Exports Imports

U.S. Dairy trade as a percent of milk produced(total solids basis) Source: National Milk Producers Federation/U.S. Dairy Export Council.

In January-June 2011, U.S. dairyexports were equivalent to 13.1percent of U.S. milk production.

Exports were equivalent to the milk volumefrom about 1.20 million cows.

1.20 mil 13.1%2007 2008 2009 2010 2011

16

13

9

6

2

U.S. Dairy Exports, January-June (metric tons)

2010 2011 % change2011 % of U.S.

production

NDM/SMP 157,073 218,159 +39% 48%

Whey proteins 230,541 217,454 -6% 62%

Lactose 121,141 152,591 +26% 68%

Cheese 80,644 119,468 +48% 5.0%

Butterfat 25,324 39,854 +57% 9.4%

Fluid milk (in thousand liters) 32,834 38,012 +16% NA

Food preps (blends) 33,014 30,614 -7% NA

TOTAL VALUE ($ million) 1,722.5 2,302.7 +34% NA

U.S. dairy export value was up 34 percent in the fi rst half of 2011.Source: USDA’s Foreign Agricultural Service; U.S. Dairy Export Council

Two years ago, the Innovation Center for U.S. Dairy released the Bain Globalization study, a groundbreaking report on the impacts of globalization on the U.S. dairy industry. This summer it updated the research to determine if fast-changing international dairy market conditions since the 2008 global fi nancial crisis altered the initial fi ndings, conclusions and recommendations. The project was supported by U.S. dairy farmers through the check-off program.

Just as in the fi rst study, the latest analysis showed that long-term demand for dairy products will remain strong, driven primarily by emerging markets. At the same time, traditional sources of supply are constrained and will fall short of expected needs, the report concludes.

“The refreshed study confi rmed the fi ndings of the initial report,” says Kevin Toland, chair of the center’s globalization operating committee and CEO and president of Glanbia USA and Glanbia Nutritionals. “The ‘Consistent Supplier’ strategy is still sound, and we’re on the right track,” he notes.

Additional information from the “Dairy Globalization Refresh: 2011 Update,” is available on the Innovation Center website at www.usdairy.com/globalization

Still ‘on the right track’

®

© 2011 DSM Nutritional Products. Rovimix® is a registered trademark of DSM.

Increase your profitability with the Rovimix® Beta-Carotene cow fertility solution.

Cow fertility problems are one of the costliest productionissues in dairy farming. Research shows that a sound nutritional program that emphasizes sufficient beta-caroteneintake can help reduce the problem.

Scientific studies indicate that DSM’s highly stable Rovimix®

Beta-Carotene is an excellent source of this nutrient forbreeding cows and can increase your profitability.

In addition, DSM offers you various Rovimix® supplementationprograms designed to meet your operation’s particular needs,as well as its unique iCheck technology to ensure your cowsconsistently receive optimal Rovimix® Beta-Carotene levels.

To find out about how Rovimix® Beta-Carotene can enhanceyour business growth, contact us at 1-800-526-0189 or visitwww.unlimitednutrition-na.dsm.com

We’ve conceived a better way to fertility.

ß-CaroteneWe’ve got you covered

from teat to feet!

1-908-722-5000 • www.T-HEXX.com 35 Industrial Parkway • Branchburg, NJ 08876

“...combining quality with innovation”

T-HEXX Dry

T-HEXX Dry Green-S

T-HEXXNaturel

DragonhydeHoof Bath Concentrate

DragonhydePutty

Keep your profi ts high with the help of innovative products from T-HEXX Animal Health! We have ten years of experience providing the highest quality dairy care products. Our superior external teat sealants have been accepted worldwide as an excellent choice when it comes to mastitis prevention during the dry and pre-calving period. In addition, our award-winning Dragonhyde Hoof Bath Concentrate, which is copper sulfate- and formaldehyde-free, has been making its way on to dairies everywhere. Our latest creation, Dragonhyde Putty, is a topical paste for hoof issues used during hoof examination! With a large, expanding range of products, we offer the perfect solution for your dairy. Call for more information.

...and more great products on the way!

P

R

E-C

ALVING

DRY

LAC

TATIO

N

®

®

®

®

®

™

LA

LL

See us at WORLD DAIRY EXPO

AL 197

Issue 14 • September 22, 2011 Progressive Dairyman 19