Aug 22, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

South America Emerges as a U.S. Cheese Destination

October 15, 2013
Exports   ship
U.S. cheese exports to South America increased for nine straight years through 2012 and are well on their way to breaking the 10,000-metric-ton mark in 2013.  
 
 

Poised to break the 10,000-metric-ton mark in 2013, South America is a different animal than China or Southeast Asia.

By Angélique Hollister, Vice president, cheese and consumer products, U.S. Dairy Export Council (USDEC) 

When you think "U.S. cheese export opportunity," the first destination that comes to mind is likely Mexico or Japan or South Korea—our three largest cheese export markets. Or perhaps the Middle East or Southeast Asia—two up-and-coming cheese consuming regions. And of course you can never discount the potential of China.

Rarely would South America pop into your head.

Quietly and under the radar, South America has steadily grown into a significant market for U.S. cheese exports, and signs suggest greater opportunity lies ahead, as USDEC’s Brazil office representative Sonia Amadeo will point out in her presentation, "Opportunities for Dairy in Latin America," at the Global Cheese Technology Forum in Reno, Nev., Oct. 21-23.

U.S. cheese exports to South America increased for nine straight years through 2012 and are well on their way to breaking the 10,000-metric-ton mark in 2013. Through the first seven months, volume jumped 27% to 6,503 metric tons.

The appreciation of South American currencies against the U.S. dollar in recent years has helped build sales, in effect reducing the price of dairy imports. But the main factor driving demand is similar to that driving dairy demand in other developing nations: rising incomes creating a larger middle class and causing a shift to higher protein diets.

At the same time, South America is a different animal than China or Southeast Asia. It has a longer history with cheese—predominantly fresh white cheese, but specialty varieties as well—and cheese-knowledgeable consumers.

In addition, two dairy powerhouses—net exporters Argentina and Uruguay—boast a significant geographical advantage over the United States in providing cheese to the region’s major buyers. Chile and Brazil also have sizable dairy industries, and New Zealand cheese export giant Fonterra Cooperative Group owns Soprole, Chile’s largest dairy processor.

Conventional wisdom suggests South America would be able to service its own cheese needs through domestic production and intraregional trade. But for a variety of reasons, conventional wisdom is wrong. Not only is the Argentine dairy export sector focused on milk powder, federal regulations aimed at controlling inflation hinder export growth and diversification. While Uruguay exports cheese, it has significant volume commitments with Venezuela, Brazil and even Argentina, and lacks the capacity to meet the entire region’s needs. Chile, too, lacks capacity to produce much beyond its growing domestic needs.

Demand in general is growing faster than the South American dairy sector can service it, which has opened the door to imports beyond traditional suppliers in the European Union.

A major reason for U.S. success lies in our free trade agreements (FTAs) with Chile, Colombia and Peru. Those three deals combined are a casebook in how FTAs can propel the industry.

READ MORE
Previous 1 2 Next

See Comments


 
Log In or Sign Up to comment

COMMENTS

No comments have been posted



Name:

Comments:

Receive the latest news, information and commentary customized for you. Sign up to receive the AgWeb Daily eNewsletter today!.

 
 
Enter Zip Code below to view live local results:
bayer
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions