This growth in dairy exports is even more impressive considering the fact that the value of dairy product exports climbed by 18.8% throughout the entirety of 2021. All these gains in international dairy product sales have occurred despite supply chain challenges, inflation concerns, and the effects of lockdowns in China related to their zero-COVID policy.
The value of U.S. dairy product exports to China is only up 8.4% thus far in 2022 after 30.5% growth last year. To this point, reductions in whey export value to China have been more than made up for by growth in nonfat dry milk and other dairy product shipments.
Even in light of expected demand challenges ahead, the outlook for U.S. dairy exports remains optimistic. With other major dairy suppliers facing production challenges of their own, the U.S. stands to gain market share in the coming months even as the outlook for total international demand remains cautious.
For instance, recently released FAS reports for Australia and New Zealand project a combined drop in milk production of 2% this year despite strong milk prices. Labor shortages were cited as a major issue for both of these nations. In conjunction with the milk production decline, nonfat dry milk exports are expected to struggle to meet 2021 levels, with whole milk powder shipments falling by 7%.
The European Union, another major supplier of dairy products in the world market, has seen a decline of 5.7% for nonfat dry milk and 2.2% for whole milk powder for the first three months of 2022.
These reductions for other major world exporters are a big reason that the U.S. can continue to achieve growth despite uncertain consumer spending in the months to come. With a growing likelihood that domestic consumer spending on dairy products could be challenged in the months ahead, international opportunities continue to provide needed diversification for the U.S. dairy industry.
