Exporter urges industry to take advantage of opportunity

By SEAN ELLIS

Capital Press

BOISE -- Expanding opportunities for U.S. dairy exports was the main theme during the United Dairymen of Idaho's annual meeting Nov. 9-10.

During the "Going Global" meeting, policy and industry experts told about 300 industry members that U.S. dairy exports have soared recently. That trend could continue in the future because world demand will continue to outpace supply.

But while the United States is well positioned to supply that growing demand, the industry needs to act now while the opportunity exists, said Tom Suber, president of the U.S. Dairy Export Council.

"The window of opportunity remains open and it appears to be expanding, but that window (won't) remain open forever," he said. "If we don't fill that gap, global capital will fill it by bringing more supply from somewhere else."

Suber said the value of U.S. dairy exports during the first eight months of 2011 totaled $3.2 billion, up 32 percent compared with the same period in 2010. And U.S. dairy trade surplus has increased steadily, from 1.3 percent in 2003 to almost 11 percent this year.

The U.S. exported $3.76 billion worth of dairy products in 2010, a 253 percent increase over 2003.

Exploding demand for dairy products in emerging countries and challenges to increased production faced by U.S. competitors present an opportunity to drive those numbers much higher, Suber said. He said dairy protein consumption between 2007 and 2013 was projected to grow by 7.9 percent in China, 7.5 percent in India, 5.6 percent in Southeast Asia and 3.7 percent in South America.

It's projected to grow 1 percent in the U.S.

U.S. consumption of milk products has basically remained flat the past six years despite a population increase, said Dermot Carey, senior vice president of Darigold Inc.'s ingredients division.

"As an industry, we need that export demand to be sustainable and viable," he said.

Darigold, the fourth largest dairy cooperative in this country, exports dairy products to 33 countries.

"There is more demand than supply (and) there is plenty of demand coming," Carey said. "If we didn't believe there was demand, we wouldn't be committing to those markets."

In the next few years, demand is forecast to exceed supply by about 7 billion pounds of raw milk equivalent, said Jeff Williams, president and CEO of Glanbia Foods.

"It's phenomenal the amount of pent-up demand that is out there," he said. "It's a big prize out there and we have a perfect opportunity to take advantage of that, (but) it's going to take a lot of smart work to do that."

While the opportunities are huge, Suber added, the U.S. industry needs to act quickly to overcome challenges that could result in competitors beating it out.

That includes making key policy reforms, satisfying customer quality and traceability needs that meet and surpass those of global competitors, meeting different customer product specifications and developing better mechanisms to reduce volatility.