U.S. better positioned than competitors New Zealand and the EU to grow milk and dairy production to meet rising global demand.

Long-term global dairy consumption will continue to rise well into the future. At the same time, the two largest global suppliers—New Zealand and the European Union (EU)—are facing structural constraints that are already limiting their ability to keep pace and will make it more difficult for them to significantly increase milk output in the years ahead.

Together, the two trends create a supply/demand imbalance that spells opportunity for U.S. dairy farmers and suppliers, said U.S. Dairy Export Council President and CEO Krysta Harden, speaking recently at two major dairy conferences.

Harden’s main message was this: The United States is better positioned than any country in the world to grow milk and dairy production in a sustainable manner that meets rising global demand – if the U.S. dairy industry continues to invest in exports.

“I believe we have such great opportunity because we can continue to produce more,” said Harden during the Senior Leaders Panel at last week’s 2022 Joint American Dairy Products Institute/American Butter Institute Joint Conference in Chicago. “Our farmers are the most productive, they’re the most efficient, they love what they do, they are investing in all the right places—technology, sustainability, environmental improvements. It's clear to me that we can do what our biggest competitors can't do.”

Founded by Dairy Management Inc. with funding from the dairy checkoff, USDEC is a nonprofit, pro-trade membership organization that paves the way for the U.S. dairy industry to meet global dairy demand.

Source: USDEC
Major exporters include the United States, EU27-UK, New Zealand, Australia, Argentina, Belarus, Uruguay

In 2022, USDEC expects milk production from the seven major global suppliers to fall for the first time since 2016. While U.S. output should begin to rebound in the second half of the year, reduced milk production from Europe and New Zealand will likely continue to limit overall milk production growth in subsequent years.

Currently, sky-high input costs and labor shortages are dampening milk production growth around the world, U.S. included. But those are temporary obstacles. The EU and New Zealand face mounting, long-term pressures of limited space for dairying and tightening regulations aimed at reducing dairy’s environmental impact—both of which will undercut expansion potential.

U.S. dairy is committed to reducing its environmental impact while also investing in expanded productivity gains that will be critical for sustainably feeding the world in the decades to come. With a demonstrated record of embracing sustainability and social responsibility, the U.S. dairy industry recently redoubled its commitment to continuous improvement through a series of goals aimed at reducing water use, improving water quality and achieving greenhouse gas (GHG) neutrality by 2050.

Although ambitious, the U.S. Dairy 2050 environmental goals build from a foundation of success. From 2002-2017, the industry already reduced GHG emissions by 20%.

“The U.S. can be the driver of dairy’s critical role in a more sustainable global food system,” said Harden. “We are the most sustainable dairy producers in the world. It is a marketing tool we have in our hands.

“The EU and New Zealand’s loss can be our gain because we have the cows, farmers, technology, natural resources, sustainability practices, land and more to sustainably expand dairy productivity,” said Harden. “I see the investments taking place on the farm and in the processing plants. I see the commitments the industry is making.”

Harden made a similar point to attendees of CheeseExpo 2022 on April 13, adding that the U.S. dairy industry is poised to take advantage of market dynamics presenting opportunities for U.S. exporters.

“The global demand is there for high-value, top-quality reliable products,” said Harden at the three-day event in Milwaukee. “It’s up to us in the U.S. to step up to meet that level of demand … we need to be that reliable, predictable dairy provider.”

Co-sponsored by the Wisconsin Cheese Makers Association and the Center for Dairy Research, the annual event for the dairy processing industry attracted more than 3,800 registered attendees.

In Milwaukee, Harden shared her positive outlook on exports in a one-on-one Q&A with John Umhoefer, executive director of the Wisconsin Cheese Makers Association. She also moderated a panel discussion with executives from three USDEC member companies. The panelists were David Lenzmeier, Milk Specialties Global CEO; David Ahlem, Hilmar Cheese Co. president and CEO, and Marshall Reece, senior vice president of sales and marketing at Associated Milk Producers Inc.

At CheeseExpo 2022 in Milwaukee, Harden moderated a panel of dairy CEOs discussing their outlook for exports. “I’m fired up, said David Lenzmeier (left), CEO of Milk Specialties Global, headquartered in Eden Prairie, Minnesota.

The CEOs on the panel said that with global dairy demand rising and milk production in New Zealand and the EU plateauing, U.S. dairy is well-positioned to increase exports, despite the ongoing challenges of an export supply-chain crisis and the need for more U.S. free-trade agreements.

“I’m fired up. This is the place I want to be,” said Lenzmeier, adding that U.S. suppliers “need to lay down lots of capital” to increase capacity.

Reece said that “based on inquiries we are getting on LinkedIn about product availability, there is a lot of concern about food security.” He added that “the growth is ours for the taking.”

Hilmar’s Ahlem expressed enthusiasm about the potential to develop more innovative dairy products and ingredients. “We’re still unlocking the health potential of dairy proteins to feed the world,” he said.

In the Q&A, Harden said that in addition to abundant milk supply, the U.S. offers the world an increasingly versatile variety of cheese and dairy ingredients.

“I’ll say it to competitors,” said Harden. “I’ll say it to customers. We’re in this for the long haul. But we have to invest. We have to be bold. We have to be ready to take advantage. I think we are.”

Paul Rogers is a correspondent for the U.S. Dairy Export Council who has covered the dairy industry for 25 years. Mark O'Keefe is vice president of editorial services for the U.S. Dairy Export Council. 

Subscribe to the U.S. Dairy Exporter Blog    

The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.