After a sharp decline in May, the United States exported significantly more dairy products in June. The tariff pause with China clearly boosted exports. It's also worth noting that the Netherlands imported significantly more American butter.
Compared to the same month a year ago, exports rose by 15% to nearly 220.000 tons. A month earlier, sales had fallen by 5%, primarily due to disputes with China over trade tariffs. In mid-May, the US and China reached an agreement to pause tariff increases. This led to a return of Chinese demand for American dairy products.
The sales of basic whey powder to China, referred to in the US as 'low protein whey' rose by 16% in June to 6.190 tons. A month earlier, exports had fallen by 33%. A similar pattern is visible for lactose. Sales rose by 14% in June to 5.442 tons, while a 42% decline was reported in May by the American Dairy Export Federation (USDEC). The increase in June is likely to be particularly large because (Chinese) importers frontloading Apply. The tariff pause between the US and China ends on August 12. Because no deal has been reached yet, the deadline will likely be extended.
The American Export Federation says cheese remains the star of dairy exports. Exports rose 34% in June to 13.347 tons, once again surpassing the record volume. In the first six months, cheese exports increased 12% to 294.000 tons. Higher export volumes were seen in June for all manufactured goods, except skim milk powder.
The Netherlands imports butter in large quantities from the US
American butter exports are also performing well. In June, sales doubled to approximately 6.000 tons compared to the same period last year. This increase is remarkable because Canada, traditionally the most important sales market, is importing less volume. Other destinations are considerably more popular. USDEC specifically mentions the Netherlands, which imported 593 tons in June, equivalent to approximately 5% of historical Dutch butter production for that month.
These imports are likely the work of trading houses that buy cheap butter on the American market and bring it here. Normally, Dutch imports represent little to no volume. Last June, only 2 tons of American butter was shipped to all of Europe.
American butter has been considerably cheaper than Dutch butter since last October. The price difference in June was almost $3.500 per ton. Since then, the European import flow, primarily driven by the Netherlands, has begun. Such large price differences are rare, meaning the freight costs are quickly recouped. The price difference has narrowed somewhat, but a significant price gap remains. This likely means trading houses will continue to import American butter for the foreseeable future.