While we love working with dairy cows, we can’t forget that the role of dairy farmers and those that support them is to provide nutritious milk and dairy products to the population. Expanding the customer base for those products is critical to our industry’s survival, particularly as cow and farm production continues to rise. That’s why we have come to look even beyond our own borders for customers that can benefit from the value and quality U.S. dairy products offer.

Currently, about 17% of annual U.S. milk production goes toward fulfilling dairy demands in other countries, and as the panelists of the September 14 Hoard’s Dairyman DairyLivestream discussed the factors that will play into the future of that number, they were very confident about the role dairy exports will have on our industry in 10 years. When asked what percentage of American milk might be directed to exports in 2032, the projections ranged from 25%, shared by Cornell University agricultural economist Chris Wolf, to 38%, estimated by DairyAmerica CEO Patti Smith.

Megan Sheets, senior director for strategic development and insights for the U.S. Dairy Export Council, said that it’s certainly possible 30% of U.S. milk will be going to exports in 10 years. In the shorter term, she shared that there are multiple reasons to be optimistic about the opportunity of selling U.S. dairy abroad to reach that lofty mark.

One is the current milk shortages in key competing regions, particularly Europe and New Zealand. Farmers in those areas are dealing with increasingly strict environmental regulations that are only expected to continue as well as weather challenges, forcing them to reduce cow numbers and milk production. That situation will help build the momentum American dairy companies have gained with overseas customers. “It’s really opening up the door for the U.S. to gain additional market share,” said Sheets.

Another factor is that consumer preferences around the globe are reflective of what we’ve seen happen at home: demand for cheese is booming. While the specific tastes vary by location, USDEC research has shown that often the most desirable products are ones we are well-equipped to produce here, like cream cheese, Mozzarella, and Cheddar, Sheets said.

A final benefit for U.S. dairy that Sheets described is that foreign consumers are interested in the health and wellness benefits of dairy just like Americans. That focus on nutrition and demand for protein is a trend they’ve seen in all 10 of USDEC’s international offices.

“We’re seeing an increase in consumption of protein sources across the board, but specifically, consumers are looking for high-quality dairy proteins to fulfill their nutritional needs,” Sheets explained. “That strong interest in health and wellness we know will fuel demand for many different dairy categories.”

There are certainly short-term headaches for exporting dairy products, among them supply chain logistics, continued inflation, and the fact that the U.S. dairy herd has yet to bounce back from last year’s culling. However, the outlook is still bright that American dairy farmers will have expanding markets for their products abroad in addition to their domestic customers.

“We believe we can continue to see growth if we have product to export and we can remain competitive on price in the global markets, both of which we’re fairly optimistic about for the future,” summarized Sheets.

To watch the recording of the September 14 DairyLivestream, go to the link above. The program recording is also available as an audio-only podcast on Spotify, Google Podcasts, Apple Podcasts, and downloadable from the Hoard’s Dairyman website.

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The next broadcast of DairyLivestream will be on Wednesday, October 12 at 11 a.m. CT. As of January 2022, we moved to a new system. If you have not yet, you will need to re-register to continue receiving email updates and links to the webcasts. You can sign up here now. Registering once will sign you up for all future events.

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(c) Hoard's Dairyman Intel 2022
September 19, 2022
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