CONTACTS:

CONTACTS:

Alan Levitt, USDEC PHONE: (703) 528-4801 FAX: 703-528-3705 alevitt@usdec.org

Arlington, VA

U.S. dairy exporters took another stride forward in 2013, shipping record levels of milk powder, cheese, whey products, lactose and fluid milk, and gaining share among the world's leading suppliers.

Overseas sales were worth $6.7 billion last year, up 31 percent from the year before. On a volume basis, exporters sold 3.91 billion lbs. of milk solids, 19 percent more than 2012. Exports were more important to the U.S. dairy industry than ever, accounting for 15.5 percent of U.S. milk production, a step up from the 13.1-percent average achieved in 2010-12.

"U.S. exporters were able to capitalize on favorable market conditions for most of the year, as well as their increasing attention to the needs of the global market," explains Tom Suber, president of the U.S. Dairy Export Council (USDEC), the trade group that leads the industry's overseas market development. USDEC is funded primarily by the dairy farmer checkoff.

"Overseas demand remained strong, led by China and Russia. Production from Oceania, Europe and South America was shorted by weather issues. And world prices rallied significantly in the second quarter, making U.S. prices more attractive by comparison. Faced with these factors, overseas buyers turned to the United States like never before, and U.S. suppliers responded," he says.

Exports played a key role in clearing the domestic market, notes Paul Rovey, a dairy farmer from Arizona and chairman of USDEC. "In 2013 we had our second-best milk price ever, and we accomplished this in a year when commercial inventories of cheese, butter and powder climbed to record highs in the first half of the year. But from Memorial Day to Thanksgiving we reduced stocks by a third - mostly to fill orders from overseas customers. Our strong export sales at historically high prices are a major contributor behind the tight markets and strong commodity and milk prices we see today."

U.S. suppliers gained share of the world market in 2013 as well. Among the world's top nine exporters, U.S. share of volume of milk powder, cheese, butterfat and whey products was 19.0 percent, up from 16.1 percent the year before. U.S. share of nonfat dry milk/skim milk powder trade among the world's top nine climbed to 31.5 percent (vs. 26.1 percent in 2012) and cheese trade among the world's top nine increased to 16.6 percent (vs. 13.9 percent in 2012).

"2013 caps a transformative decade for the U.S. dairy industry," says Suber. "Over the last 10 years, exports grew nearly every year. They increased 21 percent per year by value and 13 percent per year by volume. A decade ago the United States shipped less than 6 percent of its milk production overseas. Today that figure approaches 16 percent.

"Beyond the numbers, we've seen a dramatic shift in the way U.S. suppliers approach the export market," he continues. "Exports clearly hold a more important place in the strategic plans of our industry. In addition, manufacturers, processors and traders are becoming increasingly attuned to the needs of overseas customers, producing more of the right product, with the right specifications, in the right package, for buyers in dozens of markets around the world. That's great news for the dairy farmers and industry members who fund USDEC."

 

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2013 Dairy Export Highlights

 

Annual U.S. dairy export value hit $6.72 billion in 2013, a gain of 31 percent over the previous year. It was the first time sales cleared the $6 billion mark. U.S. exports have recorded a compound annual growth rate of 21 percent per year over the last 10 years.

U.S. dairy imports increased fractionally in 2013 to $3.18 billion. On a volume (total solids) basis, imports decreased 5 percent from 2012. Export volume was more than five times the level of imports.

U.S. dairy export volume in 2013 (total solids) equated to 15.5 percent of U.S. milk solids production, a significant jump from the previous three years, when an average of 13.1 percent of U.S. solids production headed overseas. Exports represented 58 percent of the NDM/SMP produced in the United States last year, 56 percent of the dry whey, 72 percent of the lactose, 10.7 percent of the butter and 6.3 percent of the cheese.

U.S. dairy exports to Mexico, our No. 1 market, grew 16 percent to $1.429 billion, the third straight year topping $1 billion. Southeast Asia also cracked the billion-dollar mark for the first time last year, with shipments valued at $1.284 billion, up 39 percent. Along with Southeast Asia, our fastest-growing markets were Middle East/North Africa ($788 million, +83 percent) and China ($706 million, +70 percent). Other major customers included Canada ($569 million), Japan ($304 million), South Korea ($301 million), South America ($277 million), and Australia/New Zealand ($258 million).

U.S. exports of NDM/SMP reached a record-high 554,752 tons in 2013, up 25 percent from the prior year. Shipments to Southeast Asia were up 53 percent, to 196,624 tons, led by large increases in sales to Malaysia (+86 percent), Indonesia (+78 percent), Vietnam (+53 percent) and the Philippines (+26 percent). These gains more than offset a modest decline (-7 percent) in exports to Mexico, still our largest single customer at 182,546 tons. In addition, the United States captured significant new sales to China (60,686 tons, +293 percent) and Algeria (17,584 tons, +111 percent).

U.S. cheese exports grew 22 percent to a record 316,558 tons in 2013. Gains were widespread, with double-digit percentage increases in shipments to Mexico (+26 percent), South Korea (+25 percent), Middle East/North Africa (+40 percent), Japan (+21 percent), China (+29 percent) and Panama (+15 percent).

U.S. exports of whey proteins grew 6 percent to 495,130 tons in 2013. Shipments of sweet dry whey were up 21 percent in the second half of the year, to finish the year with a 9 percent gain (to 237,069 tons). Meanwhile, exports of whey protein concentrate (WPC) were down 8 percent in the second half, bringing the 2013 total to 236,007, up 1 percent overall. Exports of whey protein isolate (WPI) increased for the fifth straight year, finishing at 22,053 tons, up 25 percent.

Thirty-eight percent of total U.S. whey protein exports went to China and 20 percent went to Southeast Asia. China whey purchases increased 19 percent, led by a 46-percent gain in imports of U.S. sweet dry whey. Total whey exports to Southeast Asia dropped 3 percent and sales to Mexico declined 8 percent. On WPI, the largest increases came from Japan (+75 percent), China (+44 percent) and the EU-28 (+25 percent).

Shipments of butterfat nearly doubled in 2013, to 90,733 tons. Almost two-thirds of the volume went to the Middle East/North Africa region, primarily Saudi Arabia and Iran. U.S. suppliers also found new customers in Ukraine and Turkey - two countries that bought virtually no U.S. butter in 2012.

U.S. lactose exports were a record-high 341,748 tons in 2013, up 11 percent from a year earlier. Sales to Southeast Asia (led by Indonesia and Singapore) were up 10 percent, while shipments to China were flat. Japan and Mexico boosted imports by 11 percent and 28 percent, respectively. Meanwhile, New Zealand bought 4 percent less.

Exports of fluid milk and cream jumped 42 percent in 2013 to 78.0 million liters. USDA reported overall fluid milk sales to Mexico increased 31 percent and shipments to Canada climbed 36 percent. The two nations combined accounted for 79 percent of U.S. fluid milk exports in 2013.

Ice cream exports rose 31 percent to 61,089 tons in 2013. Almost 40 percent of that volume - 22,773 tons - went to Mexico. Sales to the Gulf Cooperative Council (GCC), mostly Saudi Arabia and the United Arab Emirates, nearly tripled, to 13,378 tons.

Exports of food preparations (blends) increased 3 percent to 77,561 tons. Forty-two percent of the volume went to Canada, where purchases dropped 7 percent from the prior year. Sales to sub-Saharan Africa also were down (-18 percent), but this was offset by gains in sales of blends to Mexico (+204 percent) and China (+77 percent).

Shipments of milk protein concentrate (MPC) jumped 29 percent to a record high 49,456 tons. Major customers for U.S. MPC include New Zealand (20,264 tons), Morocco (11,453 tons) and Mexico (8,008 tons).

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Editor's note: More extensive trade data are available at www.usdec.org.

The U.S. dairy industry exported more than 16 percent of its total solids production over the last nine months of the year. Overall in 2013, exports were equivalent to 15.5 percent of U.S. milk solids production, compared with 13.1 percent in 2010-12. Meanwhile, imports as a percent of milk solids production were just 3.0 percent in 2013. Source: U.S. Dairy Export Council, National Milk Producers Federation.

 

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The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products.