Dairy Exporters Beat the Odds, Again
It was just another year in the dairy exporting business. Committed to overcoming all kinds of obstacles, exporters moved more than one billion dollars worth of U.S. dairy products to overseas customers again last year. That's right, again.
For the third consecutive year, exports totaled more than one billion dollars. For the fourth consecutive year, exports used up 5% of the milk produced in the United States. Imports were equivalent to about 4% of U.S. production.
Tom Suber, president of the U.S. Dairy Export Council, sums it up very well: "The global marketplace has always been challenging, whether from strong competition, currency fluctuations, economic downturns in key markets or other factors. However, large and small players in the U.S. dairy industry have made a commitment to include overseas sales channels as part of their growth strategy, and can manage the ups and downs of normal business cycles."
Commercial exports prevailAnd, manage they have! Not many years ago, government subsidies and overseas food assistance (dairy foods given away) accounted for most of the dairy products moving from the United States. Last year, commercial (unsubsidized) sales made up 84% of U.S. dairy exports.
As recently as 1995, almost half of the U.S. dairy products moving in international markets did so with the help of government aid. Since then, three-quarters or more of all exports have been commercial sales.
Whey is the poster child for commercial exports. Commercial shipments last year totaled more than 180,000 metric tons, up 6% vs. 2001. For the past three years, about 25% of the whey produced in the United States has moved to customers across the border.
About 3,000 tons of cheese was exported with the aid of subsidizes, but another 51,000 tons moved in commercial markets. Cheese shipments were up 3% vs. 2001. Exports accounted for 1.4% of the cheese produced during 2002. This may not seem like much, but remember: a 1% shift in production is frequently reflected in sizeable price swings in the domestic market.
Milk to China?Milk, cream, ice cream and lactose sales were below 2001 levels, but every liter and every pound moved as a commercial sale. Twenty-three million liters of milk and cream found a home outside of the United States. Ice cream sales totaled almost 37,000 tons; lactose, more than 188,000 tons.
While milk and cream shipments last year were only a drop in the bucket, it is important to note that U.S. exporters are learning how to be competitive in markets as far away as China and Taiwan. Ten percent of the milk and cream shipped last year found a home in China, the backyard of low-cost producers such as Australia and New Zealand.
The United States is becoming a force in world dairy trade. In fact, on a total-solids basis, dairy exports were greater than imports. During 2002, 1.067 billion pounds of dairy foods were exported. Imports totaled just 852 million pounds on a total-solids basis.
Against all odds, the United States is a net exporter.