Strong 2013 Dairy Exports Cap Off 'Transformative Decade'

Dairy industry is listening to overseas demand, boosting market share

Published on: Feb 13, 2014

U.S. dairy exporters shipped record levels of milk powder, cheese, whey products, lactose and fluid milk in 2013, gaining market share among the world's leading suppliers, says the U.S. Dairy Export Council.

Overseas sales were worth $6.7 billion last year, up 31% from the year before. On a volume basis, exporters sold 3.91 billion lbs. of milk solids, 19% more than 2012. Exports were more important to the U.S. dairy industry than ever, accounting for 15.5% of U.S. milk production, a step up from the 13.1% average achieved in 2010-12.

"U.S. exporters were able to capitalize on favorable market conditions for most of the year, as well as their increasing attention to the needs of the global market," explains Tom Suber, USDEC president.

Dairy industry is listening to overseas demand, boosting market share
Dairy industry is listening to overseas demand, boosting market share

"Overseas demand remained strong, led by China and Russia. Production from Oceania, Europe and South America was shorted by weather issues. And world prices rallied significantly in the second quarter, making U.S. prices more attractive by comparison. Faced with these factors, overseas buyers turned to the United States like never before, and U.S. suppliers responded," he says.

Exports and the domestic market
Exports played a key role in clearing the domestic market, notes Paul Rovey, a dairy farmer from Arizona and chairman of USDEC.

"In 2013 we had our second-best milk price ever, and we accomplished this in a year when commercial inventories of cheese, butter and powder climbed to record highs in the first half of the year. But from Memorial Day to Thanksgiving we reduced stocks by a third – mostly to fill orders from overseas customers.

"Our strong export sales at historically high prices are a major contributor behind the tight markets and strong commodity and milk prices we see today," he says.