5 Reasons U.S. Dairy Exports Increased 31 Percent

Increased demand in Southeast Asia and China certainly helped, as did a host of other reasons. 

By now, you have probably heard the news. Final 2013 numbers show U.S. dairy exports increased 31 percent to $6.7 billion. That's our ninth record for U.S. exports in the last 10 years. If you are a U.S. dairy exporter, stand up and take a bow. Numbers like these benefit dairy processors and farmers alike.

People ask me what accounts for such growth. It didn’t hurt that market conditions were favorable for U.S. exporters in 2013. For half the year, the United States was the world’s only major exporter to increase milk production.

Meanwhile, global demand remained strong, sharpened by domestic supply drops in China and Russia. As a result, global dairy supplies were tight throughout the year, and U.S. prices were competitive against other sources..

But even with the favorable market conditions noted above, our industry deserves much credit. From my perch as the president of the U.S. Dairy Export Council, I see five things we did right in 2013:

1. Increased Production for SE Asia and China. U.S. manufacturers ramped up production of skim milk powder (vs. nonfat dry milk) in 2013 to meet the needs of Southeast Asian and Chinese buyers, leading to record U.S. exports of milk powder. Shipments of 82-percent- fat butter, milk protein concentrate and gouda cheese also were significant.

2. Spore Progress: USDEC continued to work with the Dairy Research Institute in 2013 to improve NDM/SMP performance through spore reduction. A three-year project aims to make the United States more competitive in value-added, high-spec powders that are in demand overseas. A February seminar and follow-up work provided technical assistance to help the industry better understand the source of spore problems and adopt methods to control growth.

3. More Whole Milk Powder. Multiple U.S. manufacturers began producing whole milk powder (WMP) for the export market. This milestone stems in part from assistance from USDEC over the last few years to look at international opportunities for WMP. Export Council staff and China representatives worked with buyers to build relationships, determine specific product needs and convey U.S. dairy industry capabilities.

4. More Product-Standard Work. In association with other industry groups including the American Dairy Products Institute and the American Butter Institute, and under the leadership of the checkoff funded Innovation Center for U.S. Dairy®, USDEC staff is completing product-standard work on milk protein concentrate, colostrum and anhydrous milkfat.

5. Eyeing UHT Milk. USDEC also continued strategic counseling with U.S. companies to assess future growth opportunities in both dry ingredients and milk beverages. In the case of milk, close consultations resulted in new UHT milk shipments to China, tapping some of the country’s growing UHT milk demand. USDEC also widely conveyed the UHT opportunities for U.S. suppliers in China through a comprehensive 2013 study.

Let's not rest on our laurels. The best may be yet to come if we continue to make the right product, with the right specifications, for export customers

For a more detailed analysis of what went right, see my "2013 Year in Review" here.

Image copyright: 123RF Stock Photo

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.