2023 Butter and Cheese Exports are Down

                         

n 2023 butter and cheese exports were down from 2022.  This post will cover some of the details behind these decreases.  Butter exports have always been minimal as the supply is limited.  Imports of butter are much bigger than exports and the butter imports are growing.  Cheese exports also grew in 2021 and 2022 but fell in 2023.  Mexico is now our biggest importer of cheese.

Data used in the charts below are the export and import quantities published by the USDA.  The USDA uses strictly butter while other sources may include butterfat and anhydrous (no moisture) butterfat. The USDA cheese export and import charts are based on American cheese as it contains 70% cheddar cheese which is used for producer pricing of cheese.

BUTTER EXPORTS AND IMPORTS

Butter exports had a significant jump in 2022 but fell in 2023.  The major difference was the increased exports of butter to Canada in 2023.  Canada has an ongoing shortage of butter and when available, butter is purchased from the U.S.  In 2022, retail butter prices in the U.S. increased significantly (see the prior post). and with that increase, retail butter sales decreased.  That made more butter available for exports and specifically butter exports to Canada. In 2023, butter exports to Canada increased by nearly 200%. 

In 2023, the retail price of butter declined and that increased U.S. retail sales.  Less butter was therefore available and exports to Canada dropped. At the end of 2023 exports to Canada were still above normal levels with an increase of 36% from the beginning of 2021.  Exports peaked at 7% of production and then fell to 3% by the end of 2023.

Chart I - Butter Exports

Butter imports continue to steadily increase (Chart II).  Over the three-year span in Chart II below imports increased by nearly 50%.  The major importer Ireland (think Kerrygold) which represents more than half of U.S. butter imports.  Imports of butter and butterfat from New Zealand are also growing, roughly doubling over the three-year span used in these charts.

Chart II - Butter Imports

Net exports are calculated by subtracting imports from exports. (Chart III).  The U.S. is a net importer of butter, and those imports are growing. They currently supplement U.S produced butter by 5%.

Chart III - Butter Net Exports

AMERICAN CHEESE EXPORTS AND IMPORTS

Cheese exports and imports in Charts IV through VI are based on American cheese only.  Cheddar cheese makes up 70% which is used to price producer milk is most of American cheese.

Cheese exports grew nicely in 2022 but fell in 2023.  Exports to Mexico have grown by 25% over the three-year span from 2021 to 2023.  Unfortunately, sales to South Korea and Japan fell. 

Chart IV - American Cheese Exports

Imports of American cheese are small and currently represent less than 1% of the U.S. American cheese supply. 

Chart V - American Cheese Imports

That leaves a healthy amount of net American cheese exports equal to about 4% of U.S. production.

Chart VI - American Cheese Net Exports

At a time when domestic consumption is volatile, the changes in exports and imports add to the variability.  Dairy is always a volatile business. There are many things in the world that can rock global demand.  Events like COVID "stay at home" policies and inflation have further increased domestic volatility.  

Changes will be followed in future posts to this blog.