Cinco de Mayo Reminds Us That Mexico is Still Our Largest Dairy Export Market

The last few years it has been fashionable to talk about the growth of China, Southeast Asia and the Middle East/North Africa region. But Mexico has been No. 1 all along.

Last year, the United States sold more than $1.6 billion worth of dairy products to our southern neighbors, almost a fourth of all our exports. Mexico is our largest buyer of milk powder, cheese and fluid milk, and one of our top buyers of whey proteins and butterfat as well.

We saw the value of our relationship with Mexico last summer, when the world market downshifted. While sales dropped off to some of our major customers, sales to Mexico held up pretty well.

Here are a few stats:

• In the second half of 2014, our exports to Mexico, by value, were up 4 percent, while exports to the rest of the world were down 16 percent.

• On nonfat dry milk/skim milk powder, our exports to Mexico (on a volume basis) were up 37 percent in the first two months of the year, while exports to the rest of the world were down 37 percent. In fact, Mexico made up nearly half of our powder exports in January-February.

• On cheese, our export volumes to Mexico were flat in the first two months of the year, while exports to rest of the world were down 20%.

Mexico is still one of the world’s largest dairy importers—and in fact, in the six months to January 2015, Mexico’s imports were up about 10 percent year-over-year. They’re still dairy-deficit; they need to import about one-third of their consumption. The United States has very high market share of imports—about 75 percent. We have a well-established position. And maybe most importantly, NAFTA gives U.S. suppliers a big tariff advantage, underscoring the value and benefit of good trade agreements.

Cinco de Mayo has taken on a life of its own here in the United States, making it a good time to raise a glass to our southern neighbor and No. 1 dairy customer.

The U.S. Dairy Export Council is primarily supported by Dairy Management Inc. through the dairy farmer checkoff that builds on collaborative industry partnerships with processors, trading companies and others to build global demand for U.S. dairy products.