By CAROL RYAN DUMAS.Tough market conditions in 2012 didn’t stop U.S. dairy exporters from record sales and defending their hard-won global market share. U.S. dairy exports were on track to crack the $5 billion mark for the first time, according to the U.S. Dairy Export Council. And for the second consecutive year, U.S. export volume represented more than 13 percent of the U.S. milk supply.Dairy exports show continued progress and growth, with a trend line that keeps heading up, said Alan Levitt, USDEC vice president of communications.
Exports have been increasing for the last eight years, doubling in the last three. Exports in 2005 were $1.7 billion and didn’t top $2 billion until 2007. Now they’re on track to hit $5 billion in 2012.
The significance is they continue to grow every year, as U.S. suppliers get better at what they do and the U.S. continues to be a bigger supplier to the international market, he said.
The $5 billion in exports in 2012 is significant, but for USDEC, it’s more about the mentality of U.S. suppliers, he said.
Despite unfavorable pricing for much of the year, historic global milk production gains from January to June, still strong New Zealand output since, and the U.S. drought, U.S. exporters maintained a 19 percent share of total export volume from the five major suppliers.
«U.S. export performance into such headwinds highlights just how far the U.S. industry has come in being a consistent global dairy supplier … clearly a sign of maturation of the industry as a world player,» the USDEC’s report said.
Not only did U.S. suppliers defend market share, they also invested in future growth. They earmarked considerable dollars specifically to produce products demanded by global buyers, adapted their business structures, invested in overseas offices and dedicated export personnel, USDEC said.
«We are seeing, perhaps for the first time, widespread recognition that we are in a global marketplace for keeps, that this is a long-term position, and there’s no turning back — that global trade is the primary source for U.S. dairy industry growth,» the report said.
Companies are doing such things as making varieties of cheese that aren’t popular in U.S. but are in other parts of the world. They are also changing production lines and meeting buyers’ specifications for powders to go into infant formula and shelf stable milk in countries with limited refrigeration, he said.
Another example is Dairy Farmers of America’s new whole milk powder plant in Fallon, Nev., the first in the U.S. dedicated entirely to the international market, he said.
USDEC isn’t expecting a lot of growth in U.S. dairy exports in 2013, due to the pricing competitiveness of other exporting countries, flat milk production in the U.S., and no extra supply of dairy products. But it is hoping the U.S. will maintain its export levels, he said.
Nonetheless, the U.S. is positioned to become an even larger global player. Economic and population growth in emerging markets will drive dairy consumption, and neither domestic industries in those markets nor traditional exporters from Europe and Oceania will be able to keep pace, which will leave the door open to the U.S. and others, the report said.
New Zealand already exports about 95 percent of its milk production and is about capped out on its ability to increase production. Australia and Argentina are also limited due to environmental pressures and chronic drought in Australia and political economic issues in Argentina, he said.
The EU has historically limited production with quotas but could increase production if it saw opportunity when the quotas come off in 2015, he said.
Source: Capital Press
Posted on Thursday, January 17, 2013 (Archive on Thursday, January 24, 2013)
Posted by bsutton@adpi.org Contributed by bsutton@adpi.org
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