As we edge deeper into 2024 and look forward to 2025, the dairy market remains in a complex landscape of shifting prices, market volatility and fluctuating demand.
Kathleen Wolfley with Ever.Ag spoke on a recent ‘Protect Your Profits’ webinar hosted by the Center for Dairy Excellence where she shared that we have seen a bit more positivity coming into the marketplace as we look at late 2024 on into 2025.
Export Boom
According to U.S. Dairy Export Council, U.S. dairy exports rose 3% year-over-year in April in milk solids equivalent terms (MSE). The increase evened up the monthly scorecard year-to-date, with January and March declining and February and April rising. It also cut the year-to-date U.S. MSE export shortfall to 1.6%. The challenge now will be extending the winning streak beyond one month.
Wolfley shared that roughly 75 million more lbs. of cheese has been shipped into international markets compared to the previous year.
“That’s big volume that in 2023 was looking for a home in the domestic market putting pressure on prices,” she said. “That’s a product that’s finding a home in Mexico, South Korea or Japan where we’ve really been able to take some market share and move some products.”
The strengthening cheese export discussion has alleviated some of the supply pressures in 2024 compared to 2023. Low prices have contributed significantly to moving more products.
“That helps us when consumers across the rest of the world are price sensitive, just like we are here in the States,” she said. “So, I think that low prices going into 2024 helped our exporters book a lot more sales.”
Monitoring Mexico
Despite the recent positive trends, Wolfley mentioned that the recent run in cheese prices over the last three months raises questions about U.S. competitiveness versus other countries.
“It seems to me like maybe we could start to see a little bit of a pushback,” she says. “We’ve already heard that Q3 exports are not looking quite as stellar as they did for Q2.”
One area of particular focus is Mexico, accounting for about 35% of U.S. cheese exports and just shy of 50% of the U.S. powder exports.
“There’s definitely a lot of questions lingering around once Mexico’s appetite going into the latter part of this year and maybe on into 2025,” Wolfley pointed out.
The evolving dynamics of the dairy market emphasize the importance of monitoring international trends and adjusting strategies accordingly. As the market continues to navigate through 2024 and beyond, staying informed and agile will be key for produce looking to maintain their competitiveness and overall profitability.
