January 9, 2014

US 2013 dairy export set record at 17% rise on-year

In 2013, the US set a dairy export record at US$6.1 billion worth of products in the first 11 months alone, representing 17% more than the entire year of 2012, and likely to be about 30% more, or US$6.7 billion total, when the USDA's Foreign Agricultural Service releases year-end data next month.

"The past year marked a major step in US dairy export expansion, not only because of the value and volume gains, but because of the activities of US suppliers and industry organisations to lay the groundwork for future growth," says Tom Suber, president, US Dairy Export Council (USDEC), the checkoff-funded organisation that leads international market development efforts on behalf of the US dairy industry.

While favourable pricing and supply shortages in New Zealand may have accelerated growth in 2013, overall US performance was not surprising given long-term trends: This year marked the fourth consecutive year of record US dairy export volume and ninth record year in the past 10 years. Long-term demand from a growing middle class in emerging markets and an inability of traditional supply sources to keep pace continue to fuel international dairy trade.

"Even with December data yet to be tallied, we expect volume records in non-fat dry milk/skim milk powder (NDM/SMP), cheese, high-value whey protein concentrates and isolates, lactose and fluid milk," says Suber. "But the real highlights of the year lie beyond the numbers. More than in previous years, we are seeing a broad acknowledgement of the critical role exports play in the health and growth of the US dairy industry-an acknowledgment that is spurring action that will continue the trend."

Among the many notable accomplishments of 2013, USDEC cites underlying efforts that illustrate the prominent strategic position overseas markets now hold in the US dairy industry such as US dairy suppliers continued their push to broaden their portfolios to include products in high demand overseas, such as high-specification SMP, whole milk powder, milk protein concentrate and ultra-high temperature, shelf-stable milk. Another effort is USDEC marketing activities continued to drive demand and preference for US dairy products, positioning the US as a preferred and reliable supplier.

Furthermore, the US continued its strong working relationship with Chinese regulatory authorities, facilitating continued access to the world's largest dairy importer. USDEC assistance to aid compliance of US suppliers with new Chinese regulatory procedures, as well as broader global efforts to clarify certification and inspection requirements, and labelling and product standards, helped keep trade flowing.

In addition, the US negotiators made substantial progress toward completing the Trans-Pacific Partnership (TPP) free trade agreement. USDEC has worked since the start of talks to make certain that TPP provides new access to open major new markets (Canada, Japan and Vietnam) to US dairy suppliers as well as establish an enforceable system of sanitary and phytosanitary measures to reduce non-tariff barriers to trade.

Finally, the US dairy industry, through efforts of the checkoff-funded Innovation Centre for US Dairy^®, launched a voluntary enhanced product traceability programme to boost competitiveness in meeting needs of global buyers and proactively address US governmental moves toward ever-stricter food safety regulations.