World demand and prices lower, but milk powder numbers stronger

By CAROL RYAN DUMAS
Capital Press

Idaho's dairy exports declined drastically in 2009, but fourth-quarter numbers showed signs the steep dive may be leveling out.

The state's exports of cheese, milk, cream, butter and whey were down nearly 47 percent in 2009 but only posted declines of about 15 percent in the fourth quarter over the same quarter in 2008. Lactose exports, which were down almost 17 percent in 2009, saw an 83 percent increase in the fourth quarter.

Export data are reported on a dollar value, and world prices were down, so the volume losses weren't quite as large.

On the whole, the fourth quarter was down but not down as much as the first three quarters of 2009, said Laura Johnson, manager of Idaho State Department of Agriculture's Market Development Division.

Idaho's dairy exports weren't down across the board in 2009. Exports (excluding lactose) to China, at $20.5 million, were up 15 percent, with an 11 percent increase in the fourth quarter. Lactose exports, at almost $2 billion, were up 244 percent in 2009, with an 144 percent increase in the fourth quarter.

Exports (excluding lactose) to other countries also posted gains. Exports to Egypt increased 90 percent in 2009 -- with a 287 percent increase in the fourth quarter. To Mexico, those exports were up 73 percent in 2009; and to Saudi Arabia, 231 percent.

"We see exports rebounding in 2010. We're already seeing increases," she said.

That's essential in Idaho, where most of the milk production leaves the state. Every man, woman and child in the state would have to drink 41 glasses of milk or eat 2 pounds of cheese every day to consume Idaho's production.

Some of Idaho's production is exported through brokers or company headquarters in other states and those states are noted as the exporter of record, Johnson said.

For example Idaho exports of whey protein to China didn't even show up on the map, but the Ag Department knew both Jerome Cheese Company and Glanbia were shipping sizable volumes.

Jerome Cheese is a division of Davisco Foods International, a privately-held cheese and food ingredient company based in Le Sueur, Minn. Davisco Foods produces 370 million pounds of cheese annually for companies like Kraft Foods. Glanbia Foods, based in Twin Falls, is a division of Glanbia plc, an international company based in Ireland. Glanbia Foods' facilities process more than 12 million pounds of milk daily producing more than 400 million pounds of cheese and 110 million pounds of dairy ingredients each year.

The export data show softened world demand and lower prices in general, Johnson said. But they also show a stronger demand for milk powder and Idaho has become a bigger supplier of milk powder.

"I see a much brighter future," Johnson said. "I'm no economist, but there are economic predictions for improved outlook in many parts of the world."