Focus on global exports critical for the future of dairy
As demand for dairy rises abroad and U.S. exports continue to grow, DFA has set its sights on becoming a leader in the global marketplace. Working with organizations like U.S. Dairy Export Council (USDEC), and building innovative plants for ingredients destined for overseas markets, the Cooperative is thinking globally to deliver increased opportunities to our member-owners.
The value of U.S. dairy exports now exceeds $7 billion every year, based on 2014 figures. One of seven milk trucks leaving American farms is destined for export. The United States has become the world’s leading supplier of cheese, skim milk powder and whey products, bringing nutritious, high-quality American dairy to families around the world.
Much of the growth in U.S. dairy exports has occurred in the past two decades — in 1995, U.S. exports totaled just $982 million. Alan Levitt, vice president of communications for USDEC, says this rapid growth has allowed the U.S. dairy industry to continue to expand.
“We’ve got a relatively mature domestic market, and for the last decade, U.S. milk production has increased about 16 percent, which is the equivalent of 29 billion pounds of milk,” Levitt says.
This growth translates to milk from 1.3 million cows, and more than half of that new milk is exported. This means that if a dairy farmer has expanded his or her herd over the past decade, it is mostly because the U.S. dairy industry has begun tapping into overseas markets, Levitt says.
“Every year, better genes and improved farm practices make our cows more productive. Those productivity gains will cover the growth in the domestic market,” he says. “But if you want to bring another generation into the business or add cows to your herd, you have to be able to sign new markets, and increasingly, those markets are overseas.”
While dairy production has, until this year, outpaced domestic demand, global demand for dairy has grown significantly over the past decade as countries around the world have experienced increasing consumer spending power. As a result, U.S. dairy exports have grown an average of 16 percent per year.
As U.S. dairy exports continue to grow, Levitt says it is USDEC’s job to help U.S. dairy exporters identify global market opportunities, minimize costs and risks and understand the nuts and bolts of doing business globally. Global trade can be complicated, and Levitt says it takes the right products with the right packaging and the right specifications to succeed in global markets — and those requirements vary from one market to the next.
Despite the complexities of global trade, Levitt says the U.S. industry has an advantage when it comes to meeting the strict standards for exported ingredients. Our quality and safety systems are among the best in the world — buyers know that when they purchase dairy from the United States, they’re getting a safe, quality product, Levitt says.
Another major advantage for the U.S. dairy industry is our ample and diverse supply. The United States is the world’s largest cow’s milk-producing country, and our climate is varied enough from coast to coast and season to season that we are always producing.
“Even though California is experiencing drought conditions this year, we have plenty of milk because the whole country is almost never in a drought at the same time,” Levitt says.