U.S. dairy exports on record-setting pace
U.S. dairy exports are on their way to a fourth consecutive record-setting year.
August exports of U.S. dairy products totaled $614 million, up 45 percent from $424 million in August 2012, and were led by increased sales to China, the Middle East and North Africa and Southeast Asia.
The total volume was up 26 percent from year-ago levels. U.S. exporters shipped 175,684 tons of milk powder, cheese, butterfat, whey and lactose during August, according to a new report by U.S. Dairy Export Council.
Conditions have been favorable for U.S. dairy exporters, but the increase is also attributable to the growing sophistication of U.S. dairy suppliers and their increased commitment to foreign markets, said Alan Levitt, USDEC vice president of communications.
U.S. exporters are making the right products with the right specifications and right packaging and offering better customer service to overseas buyers, he said.
U.S. suppliers are no longer viewing exports as a market for selling excess product only. They are seeing foreign markets as a customer that has to be serviced and attended to all the time, in good and not so good conditions, he said.
“They realize they can’t just flake in and out of these markets,” he said.
To be successful, they have to be committed to being in the markets day in and day out, he said.
Hand-in-hand with that commitment, U.S. exporters have been able to capitalize on favorable conditions and being in the right place at the right time, he said. Milk production in most of the other dairy exporting countries has been down, while production in the U.S. has been up slightly.
In the first eight months of 2013, milk production was down 9 percent in New Zealand, 6 percent in Australia, 0.5 percent to 1 percent in the EU and 5 percent in Argentina. Meanwhile, it was up a little less than 1 percent in the U.S., he said.
That gives U.S. competitors a less dairy product to sell at higher prices, and the U.S. a little more to sell at favorable prices, he said.
“Most of the year, our prices have been more of a bargain than our competitors to overseas buyers,” he said.
U.S. dairy exports are up in all of its major markets, with U.S. suppliers able to backfill some of the markets other countries had to let go, he said.
The strong gains in August brought January through August sales to $4.34 billion, 23 percent ahead of last year’s pace of $3.53 billion. For the first eight months, aggregate export volumes of milk powder, whey products, lactose, cheese and butterfat was almost 1.3 million tons, up 14 percent from the same period in 2012. Gains have been made across all categories, with nonfat dry milk/skim milk powder, cheese, whey and lactose at record highs.
USDEC projects 2013 sales will total $6.6 billion, up more than 25 percent from 2012’s $5.2 billion. Barring a dramatic change in market conditions, 2013 would be the fourth consecutive record year for U.S. dairy exports.
With fundamental conditions conducive to continuing world demand and the U.S. having a place in filling that demand, USDEC is very hopeful regarding future U.S. dairy exports. But it will be up to U.S. suppliers to make those sales, Levitt said.
U.S. dairy exporters took market share from competitors this year and hopefully they will defend that market share, even when market conditions are not as favorable as they were this year, he said.