China Importing Record Dairy Volumes from Around the World
Published: Friday, October 1, 2021
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
China's August dairy imports continue to impress. Whole milk powder totaled 163 million pounds, up 146.6 percent from August 2020 and up 41.9 percent year to date. Volume expanded from every key supplier, according to HighGround Dairy.
Skim milk powder imports, at 74.5 million pounds, were up 22.8 percent and topped year-ago numbers for the eighth consecutive month and marked a new all-time record high for the month, according to HGD.
Butter totaled 12 million pounds, up 8.4 percent, and cheese imports amounted to 34.5 million pounds, up 50.1 percent from a year ago.
Fluid milk and cream import growth was the second strongest, says HGD, following whole milk powder, "and that despite anecdotal chatter that milk production is strong throughout China."
Whey imports, at 137 million pounds, were up 12.1 percent from a year ago, with YTD up 33.3 percent, most coming from the U.S. and up 32 percent from a year ago.
HGD said, "The inventory situation within China is a hot topic at present, but the holiday season will help to absorb heavy stocks and result in strong import volumes through the end of the year. As shipping container shortages remain widespread, China is likely ramping up purchases earlier than normal to make sure product hits their borders by January without interruption. There is also an increased need to keep inventories well above prior year to meet the rising internal demand that has been propelled by the pandemic."
CME Cheddar block cheese closed last Friday at $1.7075 per pound, down 8.50 cents on the week and 84.75 cents below a year ago.
The barrels finished at $1.60, up 9 cents, 6 cents below a year ago, and the spread narrowed to 10.75 cents. Ten cars of block and 19 of barrel were sold.
Cheesemakers told Dairy Market News that spot milk was steady and prices were slightly over Class III, but staffing shortages remain a challenge. Retail and food service cheese demand remains steady in the West, as is international demand. Cheese production is strong in the region, as milk continues to be available for plants to run busy schedules, says DMN.
Butter fell to $1.7225 per pound last Wednesday, lowest since Aug. 30, regained 3 cents last Thursday, then closed last Friday at $1.7275, down 6.25 cents on the week but 22.50 cents above a year ago. Forty-eight sales were reported.
Butter makers tell DMN that cream was more available later in the week, but butter production remains stunted by employee shortages. Export demand is strong, food service demand healthy, and retail demand is seasonally increasing.
Butter churning remains mixed across the West and plant managers report that cream supplies are meeting needs. Retail sales are steady and some say food service orders are trending level to higher while others note spottier demand as some restaurants deal with staffing shortages, reduced hours of service and/or dine-in restrictions from COVID.
Grade A nonfat dry milk got to $1.37 per pound last Thursday, highest since Oct. 17, 2014, but closed last Friday at $1.36, up a penny on the week and 26 cents above a year ago. There were 15 carloads that exchanged hands.
Whey also had a good week, closing at 57.25 cents per pound, 3.75 cents higher on the week, highest since June 28, and 19.50 cents above a year ago. Four sales were reported at the CME.
The October federal order Class I base milk price was announced by USDA at $17.08 per hundredweight, up 49 cents from September, $1.88 above October 2020, and equates to $1.47 per gallon, up from $1.31 a year ago. The 10-month average stands at $16.48, down from $16.50 a year ago and $16.64 in 2019.
U.S. fluid milk sales continue to plunge. USDA's latest data put July sales of packaged fluid milk products at 3.5 billion pounds, down 6.3 percent from July 2020, after plummeting 6.7 percent in June.
Conventional product sales totaled 3.3 billion pounds, down 6.2 percent from a year ago. Organic products, at 221 million pounds, were down 9 percent, and represented 6.4 percent of total sales for the month.
Whole milk sales totaled 1.2 billion pounds, down 4.8 percent from a year ago, with year-to-date consumption down 7.5 percent. Whole milk represented 33.1 percent of total milk sales for the seven-month period.
July skim milk sales, at 200 million pounds, were down 12.2 percent from a year ago and down 14.1 percent year to date.
Total packaged fluid milk sales for the first seven months 2021 amounted to 25.6 billion pounds, down 5.3 percent from 2020. Conventional product sales totaled 23.95 billion pounds, down 5.5 percent. Organic products, at 1.7 billion, were down 2.1 percent, and represented 6.4 percent of total milk sales for the period.
Dairy margins were steady to slightly stronger over the first half of September with limited price movement in the milk and feed markets, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC.
The MW stated that "strength in dairy exports has been a vital source of support for the market." July dairy product exports, which I reported previously, totaled 504.3 million pounds, according to the MW, up 7.9 percent from last year with year-to-date exports running 11.6 percent ahead of 2020. Exports to Mexico totaled 114 million pounds and were 14.3 percent higher than 2020 while exports to China of 88.4 million pounds were likewise strong with the YTD total on pace to exceed 2017's record.
Return to Top of Page