How has COVID Impacted Dairy Exports and Imports? How Will the Russia Invasion of Ukraine Impact Dairy Exports and Imports?

In 2020, COVID hit the entire globe and things changed. Now Russia has invaded the Ukraine and more international events are changing.  How did COVID impact dairy exports and imports?  How might Russia's invasion impact dairy exports and imports?  China is threatening an invasion into Taiwan and that could bring additional major international changes.

Exports and imports of the four commodities used to price producer milk are reviewed in this post, starting with cheese and butter, and then covering exports of nonfat dry milk (NDM) and whey.  

CHEESE

Cheese exports have strengthened during COVID, gaining 14 percent over the prior year in January 2022 based on 12-month moving averages. U.S. cheese was exported to 116 different countries in 2021 with the four largest importers being Mexico, South Korea, Japan, and Australia.  China and Taiwan also received  significant cheese exports from the U.S.  There were very minor cheese exports to Russia.

There was a slight dip in cheese exports to Mexico in 2020 which have now recovered.  It is possible that this was related to COVID as travel to Mexico was restricted.

Chart I - Cheese Exports

Cheese imports were less than cheese exports making the U.S. a net exporter of cheese.  The major imports were from six European countries listed in Chart II below.  In total, cheese was imported from 74 different countries.  Minor amounts were imported from the Ukraine, Croatia, Russia, and Belarus.

Chart II - Cheese Imports

BUTTER

Butter exports and imports are minimal.  Butter production is struggling to meet domestic demand.  Most of the time, imports exceed exports making the U.S. a net butter importer.   Most of the butter exports go to Canada.  With butterfat in short supply, the exports may begin to drop but to-date exports remain relatively strong.  In 2022, U.S. butter was exported to 77 different countries with significant amounts exported to China and a very minor amount shipped to the Ukraine.  None was shipped to Russia.

Chart III - Butter Exports

The real story on butter is the continuing increase in imports of butter from Ireland.  Kerry Gold butter continues to expand shelf space in retail grocery stores.  As of January 2022, the 12-month moving average of imports is dominated by butter from Ireland which is currently 63 percent of butter imports.  No butter was imported from Russia or China.

Chart IV - Butter Imports

NDM

Exports of NDM and skim milk powder (SMP) continue to grow.  Mexico is traditionally the main importer.  The SE Asia countries (Thailand, Indonesia, Malaysia, Cambodia, Singapore, Philippines, Vietnam, Myanmar, Laos, Brunei, and Timor-Leste) have grown their imports significantly.  Together Mexico and the SE Asia make up 75 percent of NDM/SMP exports.  China imported six percent of the U.S. exports of NDM/SMP.

There are no significant imports of NDM or SMP.

Chart V - Exports of NDM and SMP

WHEY

Whey exports go primarily to China.  In 2021, 46 percent of whey exports went to China.  Combined with Mexico and SE Asia, the top three importers make up 76 percent of whey exports.  The data in Chart VI include products like whey permeate (dried whey without whey proteins.)

Chart VI - Exports of Whey Products

There are no significant imports of whey products into the U.S.

SUMMARY

There is very little indication that COVID had any influence on dairy exports or imports.  There is no important dairy trading with Russia, Ukraine, Croatia, or Belarus.

However, there is an important tie to China especially in exports of whey.  A major part of this is whey permeate that is used in swine feed.  China also has significant imports of cheese, butter, and NDM.

The current events do not appear to have any influence on U.S. dairy exports or imports.  However, it is possible that if China invades Taiwan and sanctions are imposed, there could be some difficult issues, particularly with whey exports.