Policy: U.S. Dairy Exports Rebound

April 6, 2011 12:05 AM
 

Nearly 13% of U.S. milk solids exported in 2010

A recovering global economy is good news for U.S. dairy exports, with 2010 U.S. sales growing 39% over 2009 levels to 1.5 million tons. This represents nearly 13% of total milk solids sold in 2010, notes the U.S. Dairy Export Council (USDEC).

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USDEC annual report

Challenges ahead

In its Year in Review report, released in late February, USDEC notes: "One of the most noteworthy developments of the past year was the confirmation that 2009’s slowdown in consumption growth was indeed a blip in long-term dairy growth trends. As emerging market economies rebounded so did their dairy appetites.…

"The better news is that this emerging demand is growing at developed market prices, a change from years past when global prices were softened by export subsidies and market barriers. Emerging market buyers have shown that dairy products bring a taste and nutritional value worth paying more for than previously."

China has been a bright spot for world dairy trade. In 2010, China purchased 320,000 metric tons of whole milk powder—seven times the amount it purchased in 2008. It now accounts for 15% of whole milk powder trade in the world, up from 3% in 2008.

New Zealand is supplying much of this demand. That is soaking up much of its production, with New Zealand farmgate prices substantially exceeding U.S. milk prices, say independent sources. But this opens up the door for U.S. sales to others who are seeking milk powder that the Kiwis are now unable to supply.

Market access issues remain for the U.S., however. Most notably, the USDEC and U.S. trade officials are working with their Chinese counterparts to clarify export certificate requirements. In addition, USDA continues to work with European Union officials to determine what EU somatic cell count requirements mean for our exports.
 

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