July 26, 2021 at 3:14 p.m.
Dairy exports: The opportunity to feed the world
Exports are essential for the entire dairy supply chain. 95% of the world’s population lives outside of the United States, most in areas that are seeking out dairy products and other ingredients that provide much needed protein. Many of these countries cannot meet the demands, providing opportunity for U.S. dairy as we continue to see milk production grow year after year.
According to the U.S. Dairy Export Council, over the last decades, U.S. milk production has increased 15%, or 1.4% per year on average since 2000. That increase is because dairy farmers are good at what they do. Not only has milk production per cow risen, but each hundredweight of milk contains more fat, protein and lactose than ever before. Due to these increases in production, we’ve been generating more milk at a rate faster than demand in our country, creating a surplus that needs to find a home. Exports are the solution to the benefit of the entire industry.
Today, exports are at a record high, with 1 of 6 tankers leaving American farms ending up in dairy products and ingredients exported and sold overseas, including milk that is produced in the Midwest. Virtually every processor in our region is directly exporting or working through partners to export dairy, which means almost every farmer’s milk (or a component of it) is going overseas. And the market prospects are just beginning.
With continued urbanization, a growing middle class and rising awareness of the health benefits of dairy in places like Southeast Asia, the opportunities have just started to be tapped for America’s dairy farmers. That is why USDEC has invested specifically in that region with the newly opened Center of Dairy Excellence in Singapore, which focuses on understanding the needs in that market and identifying new opportunities for U.S. dairy to meet those needs. With these efforts, U.S. dairy exports crossed the $1 billion mark to this market in 2020, exceeding China, South Korea and Japan combined. Southeast Asia also rose in volume by 25% over 2019, moving ahead of Mexico as a top export destination in 2020, with a huge percentage of that market still untapped for U.S. dairy.
There is also continued growth in the Middle East, North Africa and China where exports are up 12% over last May, showing that there is room for dairy products overseas as ports continue to open and supply chain issues are resolved coming out of the coronavirus pandemic.
The other major growth driver for dairy internationally is due to dairy’s efforts toward equitable and sustainable food systems. Dairy not only plays a key role in nutrition but also environmental stewardship and is leading the way for agriculture. With dairy’s FARM initiative, 2050 sustainability goals, Net Zero initiative, as well as the industry’s commitment to food insecurity, we are showcasing to the world how dairy is an environmental solution when it comes to healthy people, planet and communities.
As farmers continue to find new ways to be innovative in the areas of nutrition, animal care and sustainability, milk production will continue to grow, and the international market will be essential for the entire dairy supply chain. The good news is that the dairy checkoff is hard at work to not only increase demand and trust domestically, which will continue to be a top priority, but also to open markets across the globe. While the opportunities in exports will continue to drive dairy demand, what’s even more inspiring is that dairy farmers in the Midwest are working to feed and nourish the world. That is something that can make farmers extremely proud.
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