Market Expansion, Demand Drive Dairy Exports in 2013

Dairy exports are on track to be 30% higher than 2012

Published on: Jan 13, 2014

Though final dairy export numbers won't be available until USDA's release at the end of February, preliminary results indicated U.S. dairy exports set a record in 2013, shipping $6.1 billion worth of product in the first 11 months alone – 17% more than the entire year of 2012.

The U.S. Dairy Export Council estimates the final numbers will be somewhere around 30% higher than 2012. It will mark the fourth consecutive year of record U.S. dairy export volume and ninth record year in the past 10.

"The past year marked a major step in U.S. dairy export expansion, not only because of the value and volume gains, but because of the activities of U.S. suppliers and industry organizations to lay the groundwork for future growth," says Tom Suber, president, U.S. Dairy Export Council.

Dairy exports are on track to be 30% higher than 2012
Dairy exports are on track to be 30% higher than 2012

While favorable pricing and supply shortages in New Zealand may have accelerated growth in 2013, overall U.S. performance was not surprising given long-term trends: Demand from a growing middle class in emerging markets and an inability of traditional supply sources to keep pace continue to fuel international dairy trade.

"Even with December data yet to be tallied, we expect volume records in nonfat dry milk/skim milk powder, cheese, high-value whey protein concentrates and isolates, lactose and fluid milk," says Suber. "But the real highlights of the year lie beyond the numbers. More than in previous years, we are seeing a broad acknowledgement of the critical role exports play in the health and growth of the U.S. dairy industry—an acknowledgment that is spurring action that will continue the trend."

Among the many notable accomplishments of 2013, USDEC cites five underlying efforts that illustrate the prominent strategic position overseas markets now hold in the U.S. dairy industry:

• U.S. dairy suppliers continued their push to broaden their portfolios to include products in high demand overseas, such as high-specification SMP, whole milk powder, milk protein concentrate and ultra-high temperature, shelf-stable milk.

• USDEC marketing activities drove demand and preference for U.S. dairy products, positioning the United States as a preferred and reliable supplier.

• The United States continued its working relationship with Chinese regulatory authorities, facilitating continued access to the world's largest dairy importer. USDEC assistance to aid compliance of U.S. suppliers with new Chinese regulatory procedures, as well as broader global efforts to clarify certification and inspection requirements, and labeling and product standards, helped keep trade flowing.

• U.S. negotiators made substantial progress toward completing the Trans-Pacific Partnership free trade agreement. USDEC has worked since the start of talks to make certain that TPP provides new access to open major new markets like Canada, Japan and Vietnam to U.S. dairy suppliers as well as establish an enforceable system of sanitary and phytosanitary measures to reduce non-tariff barriers to trade. Progress in 2013 suggests a final deal may be struck as soon as the first quarter of 2014.

• The U.S. dairy industry, through efforts of the checkoff-funded Innovation Center for U.S. Dairy, launched a voluntary enhanced product traceability program to boost competitiveness in meeting needs of global buyers and proactively address U.S. governmental moves toward ever-stricter food safety regulations.

Source: USDEC