Exports are growing this year despite headwinds from weak macroeconomic factors. But will a change in US trade policy and tax credits threaten US dairy export dominance?

Exports are stronger than expected. Trade volume in October increased for NFDM/SMP, whey products, cheese, and butter. I gave three main reasons for the export growth.

Demand is stronger than expected and prices are rising. Holiday purchases are strengthening demand, and so are exports.

Markets are trending lower. Spot prices of dairy commodities have traded lower. That will result in $20 milk prices which should keep the milk supply stable.

The Yin-Yang of price forecasting. I’m confident that consumers will continue to buy dairy.

In this issue I explore the seemingly contradictory data in the milk production report with a) the market response, b) the dairy products report, and c) August trade data.

Dairy farmers are adding more cows to help fight inflation.

Commodity prices are rising, with butter projected to reach $3.25/lb and block cheese $2.15/lb before year end.

US exports account for 20% of US milk production. So they are important. With a looming recession and slow world GDP growth, US export volume was expected to decline. But so far, exports are holding up surprisingly well.

Supply and demand still determines price. This year both supply and demand havedeclined. So where will prices go?

In this report I examine what impact a recession would have on the US dairy industry.

I estimated that American cheese consumption declined an estimated 8.5% for the period April-May 2022. That's pretty big. It's likely due to cheese prices being too high. A negative correction of 10-12 cents/lb is due this summer.

Inflation is maintaining strong dairy prices. That said, exports have slowed a bit and prices for cheese, NFDM, and dry whey have temporarily softened.

The U.S. milk supply remains tight due to the high cost of dairy inputs such as fuel, feed, labor and other supplies.

Demand for dairy remains strong depite economic headwinds.

How high will milk and dairy prices stay? Will then go higher?

Commodity prices are trending higher. Oil, and now corn prices are rising.

Global markets are pushing U.S. dairy prices higher.