U.S. dairy exports hit record highs for volume and value in 2013. The challenge now is to maintain consistency and develop potential for continued growth, according to two speakers at the Dairy Farmers of America (DFA) annual meeting in Kansas City, Mo., March 18.
Tom Suber, president of the U.S. Dairy Export Council (USDEC), congratulated DFA farmer members and the rest of the U.S. industry for achieving record dairy export sales in 2013.
After year's of ”talking the talk,” the U.S. dairy industry was finally “walking the walk” when it came to being a leading participant in the global dairy market, becoming the third-largest dairy exporter in the world, and the largest single-country cheese exporter, Suber said.
Recapping 2013, he noted exports had the biggest impact on farm-level milk prices in the fourth quarter of 2013, at a time when milk production in New Zealand, a major dairy exporter, was recovering.
Despite attaining some monumental export numbers last year, ”there's still more work to be done,” Suber said.
Suber took a “buyer's view” of the global dairy market’s future.
As the global market for dairy products grows and available inventories shrink, buyers are seeking “supply security,” wondering where milk and dairy products will come from, he said. In addition, with improved economic returns in dairy industry, investors are also looking for consistent milk supply areas to invest.
In recent years, the U.S. is now seen as an attractive, reliable supplier – leading the world in milk production, as well as in the middle of the cost curve among major milk producers/exporters – resulting in back-to-back record years for U.S. dairy exports, Suber said.
As a percent of total solids production, U.S. exports have grown from 3.7% in 1996 to 11.0% in 2008; dipped to 9.3% in 2009; but bounced back – an important global market indicator of U.S. resourcefulness – in 2010, to 12.7%, according to Suber. It has increased each year since then and, as a percentage of total solids production, exports totaled 15.5% in 2013.
The next steps
While supply is the major concern right now, emerging issues put the U.S. dairy industry at a pivotal point, Suber said.
He said those issues included price volatility, product diversification, tight quality specifications and dairy processing capitalization. Attention to food safety, including training, traceability guidelines, tighter testing protocols driven by customers and regulators, and consumer confidence, will be critical.