World dairy trade could grow 11% over the next decade. If that comes to fruition, countries around the world would trade an additional 14.2 million metric tons of dairy products.

That projection was made by the Food and Agriculture Organization (FAO) of the United Nations and the Organization for Economic Cooperation and Development (OECD). Most of this projected growth would come from the United States, the European Union (EU), and New Zealand. All told, these countries would account for 65% all dairy products and dairy ingredients sold throughout the world.

That being said, the United States is expected to be the most dynamic large dairy product exporter, when measured by growth, over the next decade. It will significantly expand skim milk powder exports, revealed the report titled OECD-FAO Agricultural Outlook 2023-2032. To reach this goal, this expansion in skim milk powder exports would have to be met by more drying capacity far beyond the country’s current investments. Another reason skim milk powder will grow in the U.S. is because of the country’s strong demand for milkfats.

New Zealand will remain a mighty force. Although it only accounts for 2.5% of the world’s milk production, it is the most export-orientated country. Looking long-term, growth will slow for the island nation. After expanding milk production over the past two decades, new milk has stalled and growth may only be 0.4% annually over the next 10 years.

The collective 27 countries of the European Union would continue to be the world’s main cheese exporter. However, as a single country, the United States would be the largest stand-alone country and should grow its cheese exports, too. As for the largest cheese importers? The United Kingdom heads the list, followed by Japan, Russia, the European Union, and Saudi Arabia.

Overall, 81% of the world’s milk supply comes from dairy cows. An additional 15% comes from buffalo, with goats, sheep, and camels accounting for the remaining 4%. North America, led by the United States and Canada, has some of the highest milk yields per dairy cow. While herd size is expected to remain unchanged over the next 10 years, growth ultimately will take place because yields per a cow will continue to grow.

Environmental legislation could curb milk growth in some areas. Since greenhouse gas emissions from dairy represent such a high portion of their emissions, New Zealand and Ireland could be hit rather hard on this issue, reported the OECD-FAO Agricultural Outlook 2023-2032.

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July 27, 2023

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