U.S. dairy exports continue to improve. Export volumes were up during August–October compared to a year earlier for most major product categories. Nonfat dry milk and dry whey prices have been rising due to an improving world market for dairy ingredients. This has helped lift U.S. producer milk prices, starting from when they bottomed out in May. However,the average all-milk price dropped by 70 cents a hundredweight from September to October, mostly due to a drop in Class III and Class IV prices as domestic butter and cheese prices became somewhat volatile heading into the holiday season. The bimonthly margin under the Margin Protection Program (MPP) for the September-October period was $9.16 per hundredweight.
Commercial Use of Dairy Products
During July-September,sales of fluid milk products were 0.5 percent below the same period a year earlier. Within that, organic milk sales – 5.3 percent of the total – were up 5.2 percent,while conventional milk sales were down 0.8 percent. For conventional milk,whole milk sales (including flavored) were up 5.2 percent, while reduced-fat milk sales (including skim) were down 3.7 percent. Commercial use of butter and cheese grew,while nonfat dry milk and skim milk powder were down by 20 percent, largely reflecting therevival of U.S.exports.More generally, increased exports of many ingredient products reduced total domestic use of skim milk solids by 0.8 percent.
U.S. Dairy Trade
The dairy export situation continues to improve.Butter exports during August–October were up nearly 50 percent from a year earlier after being down by double-digit percentages for at least two years.Total cheese exports eked out a small gain following similar losses. Skim milk powder and dry whey exports continued to rebound, while lactose exports registered gains for the first time in 2016. Total dairy exports during August–October were equivalent to 15.5 percent of milk solids production,compared to 13.8 percent a year earlier.