U.S. Dairy Exports Grow on Robust World Demand

February 16, 2011 07:06 AM
 

2010 overseas dairy shipments up 40% from 2009

 
Pier G ITS[1] webSource: U.S. Dairy Export Council
 
As the lines between domestic and overseas markets continue to blur, U.S. dairy suppliers registered record export volumes in 2010.
 
On a total solids basis, U.S. dairy exports reached 3.04 billion pounds last year, up 40% from 2009, and up 19% from 2008 volume. Overseas shipments were valued at $3.71 billion, 63% higher than 2009, according to government trade data released last week.
 
Nearly all product categories posted big increases in 2010: milk powder shipments expanded by more than 60%, butterfat volumes doubled and exports of cheese, whey products and lactose reached record levels.
 
With these gains, a growing and significant proportion of the U.S. milk supply is being sold overseas, notes the U.S. Dairy Export Council (USDEC).
 
Exports were equivalent to 12.8% of U.S. milk production, up from 9.3% in 2009 and 11.0% in 2008. The ratio of milk powder, dry whey and cheese sold offshore was the highest ever, a sign of how important exports have become to health of the U.S. dairy industry.
 
“U.S. dairy suppliers resumed their growth path in 2010 after a sharp drop in 2009, yet this welcome result shouldn’t obscure the fact that this is part of an expected, long-term growth trend,” says USDEC president Tom Suber.
 
“Increased trade is driven by a variety of demand factors,” he explains. “Dairy has become an integral part of the diet in large emerging markets like China, India and Southeast Asia as purchasing power there has advanced to the point that they are able to pay more for products they now desire. There are 43 million babies born every year in China and India – and more than ever those infants will start drinking milk-based formula early on. Fast-food chains are expanding dramatically in developing markets, bringing pizza, cheeseburgers and other western foods to millions each day. As a result, cheese exports rose 60 percent, pushing the United States past Australia as the world’s third-largest supplier, behind the EU-27 and New Zealand.
 
“At the same time, local milk producers and traditional international suppliers cannot keep pace with the needs of the world’s expanding middle class. This creates significant opportunity for the U.S. dairy industry,” he says.
 
China’s ‘voracious’ appetite
Of the growing dairy markets in 2010, none had a larger impact on global demand than China. The nation imported 326,000 metric tons of whole milk powder, seven times its 2008 total, and 89,000 metric tons of skim milk powder, a 64% gain over two years. Its share of international whole milk powder trade has grown to around 15%, compared with just 3% in 2008, USDEC notes.
 
The impact of China’s voracious appetite for dairy proteins is twofold: It creates direct opportunities for U.S. suppliers of milk powder, whey, lactose and cheese in China, and it provides indirect opportunities, absorbing huge quantities of whole milk powder from Oceania, which creates geographic and product holes for U.S. exports to fill.
 
‘Suppliers must move to the next level of sophistication’
U.S. suppliers have grown more comfortable with doing business overseas, Suber says. Many companies have committed the necessary resources to grow their export business and adopted an attitude to service foreign buyers. Long-term trade data paint an optimistic future, he notes.
 
“That being said, more is needed to adjust our industry’s policies and practices to support these early movers and facilitate even broader pursuit of internal and external opportunities,” Suber adds. “To compete in an increasingly globalized market, our suppliers must move to the next level of sophistication as international players, toward the role of consistent suppliers.”
 
USDEC role
Over the last 15 years, the investment that U.S. dairy producers and processors have made in USDEC’s marketing programs and technical support has helped suppliers position themselves for the more globalized business setting we see today, USDEC says.
 
“Obviously, USDEC programs can’t change whether the underlying business environment favors or discourages U.S. dairy trade,” says Suber. “Yet, our actions are meant to maximize the upside of favorable market conditions, as they did in the early years of the decade and in 2010, and minimize the downside of unfavorable conditions, as they did over parts of 2008 and 2009.”
 
USDEC is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe.

Back to news


 

Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close