We’re in the right place at the right time. The global dairy industry is a growth sector — that much is crystal clear.

At the “Future of Food” summit in Washington, D.C., earlier this summer (an event co-hosted by the dairy producer-funded Innovation Center for U.S. Dairy), speaker after speaker talked about the challenges of feeding the planet’s growing population. Solutions will necessarily span policy and technology as the world shifts from managing chronic oversupply to structural shortages in the decades ahead. The summit wasn’t a dairy event, per se, but dairy was a big part of the conversation.

Look overseas and you’ll see global dairy companies restructuring, repositioning and investing to meet these changing conditions. In a single week in mid-June alone, we saw these three announcements:

• In New Zealand, Fonterra Cooperative Group is wrapping up a multiyear effort to create a new capital structure (Trading Among Farmers, or TAF) that brings outside equity into the company to fund further overseas expansion. “We will now be able to implement our strategy and remain a relevant player in the global dairy industry,” CEO Theo Spierings said. “With overall demand for dairy growing, TAF will ensure that we are well placed to grow volumes and protect our position.”

• In Ireland, perhaps more than any other country in the European Union, processors are preparing for the end of milk quotas in 2015. Glanbia PLC opened talks to spin off its lower-margin domestic processing business to give it more flexibility to tap into increased Irish milk volumes and to invest in growing its global nutritionals business. Additionally, Dairygold is planning for milk deliveries to increase 63% from 2015 to 2020, commissioning two new large milk dryers. Most of the expansion will be financed, but co-op members will put up about 40% of the funds through a surcharge on their milk production.

• In Denmark, Arla Foods laid out an ambitious plan to expand its presence in the all-important China market. The company purchased a 6% stake in China’s largest dairy company, Mengniu Dairy, a move expected to increase its local footprint five-fold. It also signed a 10-year supply agreement with Biostime International Holdings, a Guangzhou-based supplier of infant formula powder.

There’s a pattern here. Go back a few months:

• Nestlé bought Pfizer’s infant formula business and initiated investments in whey plants in South America.

• Danone announced it will spend $700 million over the next five to seven years to expand in Russia.

• FrieslandCampina purchased Alaska Milk in the Philippines, giving it a platform to spread in Southeast Asia. FrieslandCampina, by the way, also is adding several new spray dryers in the Netherlands — where milk production is likewise expected to grow, post-quota — demonstrating foresight to build processing capacity three years ahead of the expected supply.

A growing appetite for dairy

All these deals speak to the key drivers of the global dairy business today: worldwide growth in dairy appetite, particularly China and Southeast Asia; growth in the infant formula and nutritionals market; demand for protein; removal of EU quotas. Investment also is driven by the need to find growth outside of traditional dairy markets, where consumption gains have slowed in recent years.

Leading global dairy companies “are working hard to acquire the products, brands and competencies to build footholds in newer growth arenas,” said Rabobank in its “Global Dairy Top 20” ranking of the world’s largest players. “Today, 16 of the largest 20 dairy companies have investments in manufacturing in Asia and/or Latin America; 15 of them have investments in China alone.”

The United States is the world’s largest cows’ milk producer, yet just three U.S. entries land in Rabobank’s Top 18. (And two of those — Dean Foods and Kraft Foods — are not active U.S. exporters.) That’s not necessarily a deficiency on our part; it simply reflects the fragmentation and domestic focus of our industry.

Still, in contrast to the moves of the companies noted above, U.S. dairy businesses seem much quieter in investing for the global market. There are exceptions. But in a more globalized landscape, what are U.S. dairy processors, individually and collectively, doing to position themselves to be successful? What’s our time horizon for investment, and are we building the necessary structure and capacity to compete?

It would be naïve to suggest U.S. companies can match these ambitious expansion plans from where we sit today. For a broad swath of the industry, it’s just not realistic.

For now we’re working on becoming consistent suppliers — and the mid-year returns on 2012 performance are positive. The Innovation Center’s 2009 “Globalization Study” identified an even more ambitious approach, one called “Global Dairy Player,” in which the industry moves beyond a purely export-focused model that includes more off-shore investment.

Clearly we’re not there yet, but it would be nice to see some U.S. players make that next fledgling step. The leading overseas dairy companies are already well along that path forward. The global dairy business isn’t standing still, and our processors can’t stand still either.