U.S. Dairy Farmers Poised To Capitalize on Chinese Demand

Ultra-high temperature milk could be the next frontier for dairy exports, USDEC says

Published on: Nov 1, 2013

Food safety concerns also play a role in the appeal of imported UHT milk, but the surge in demand really began in 2011, well after the nation's melamine-tainted milk powder scandal, suggesting longer-term supply and demand factors are the primary drivers.

Can America capitalize?

USDEC research explored how the United States might be able to gain a larger share of the imported UHT sector as the scenario of rising demand and limited domestic supply plays out.

Among the recommendations: U.S. suppliers need to develop products that better match Chinese expectations. For example, U.S. UHT milk is primarily consumed in half-pint and pint boxes and bottles, but the Chinese UHT market is dominated by 1-liter boxes.

"To be successful, we need to build capacity dedicated to exports that is closer to shipping points, as well as find a way to offer more competitive pricing for longer-term contract periods," Christieson says.

The opportunity is broader than strictly UHT milk and China. USDEC says it sees potential in other Asian markets, including the Philippines, and for additional products such as UHT cream and lactic acid beverages.

One of the reasons U.S. exports are on pace for their fourth consecutive record year is U.S. suppliers' continuing movement toward broadening their product portfolios to meet the needs of overseas customers, explains Tom Suber, USDEC president.

"Time and again over the past few years we've seen the U.S. dairy industry invest in the people and the processes needed to develop products specifically to meet the needs of foreign markets: bulk gouda cheese, milk protein concentrate, nonfat dry milk/skim milk powder with tighter specifications and, most recently, whole milk powder," he notes. "UHT milk is the next in line."

Source: USDEC