What is in Store for Dairy Exports in 2024?

The export marketplace has experienced its share of ups and downs throughout the years. But what’s the latest forecast for the U.S. dairy industry? That’s exactly what Vicki Nicholson-West and Will Loux with the farmer-founded U.S. Dairy Export Council (USDEC) discuss on this episode of the Your Dairy Checkoff podcast with host and Minnesota dairy farmer Charles Krause. Nicholson-West, a marketing strategist, and Loux, an agricultural economist, dive deeply into the trends, challenges, and opportunities in the U.S. dairy export market, sharing their insights and analyses.

 

 

Current State of Exports

In 2023, after riding the wave of growth for three successive years, U.S. dairy exports faced a setback. The dip was felt across various categories, notably in low-protein whey products, cheese and non-fat dry milk. While these categories may have seen a decline, high-value whey exports showed an upturn. The global economy’s softness, inflation in developing nations, and a slump in demand from Asian markets, particularly China’s shift toward ramping up domestic production, were primary contributors to the decline, as Loux highlights.

Competition also has heated up, with Europe and New Zealand encroaching on territories that were once U.S. strongholds. However, there are many areas of opportunity. Latin America - particularly Mexico - has displayed an interest in U.S. dairy, with cheese demand soaring and consumer confidence at a high.

Loux emphasizes that while 2023 marked a step back, the U.S. is still in a better position than before the boom, with an expectation that 2024 will see the competition, especially from Europe and New Zealand, taking a step back.

Founded By Farmers

Dairy Management Inc. (the dairy checkoff) founded USDEC in 1995 at the direction of dairy farmers who wanted an entity to represent their interests internationally. USDEC guides dairy processors and co-ops, aiding in the development of international relationships and global market navigation.

With a presence in key overseas markets, USDEC representatives work tirelessly to support and engage with local trade. The checkoff organization underscores the importance of farmer participation in trade missions, which not only educates them on the impact of their contributions but also forges personal connections with international buyers.

Representing the collective voice and strategy of farmers, USDEC and DMI work in unison to push the envelope on international dairy trade.

 

 

U.S. Dairy’s Global Appeal

The allure of U.S. dairy extends far beyond its borders, with the diverse practices of American farmers painting a compelling story of sustainability and quality milk production. It’s this narrative that USDEC champions, seeking international partners and supporting them to venture into new markets through collaboration and support.

Farmers are not just the backbone of domestic markets, but ambassadors on the international stage, with their commitment to producing high-quality milk being a key element driving global demand.

USDEC Unites Dairy

Farmers may ask about USDEC’s purpose and why processors and co-ops don’t establish those export relationships.

Nicholson-West shares that it’s not one or the other. USDEC works with co-ops and processors to develop international relationships and serve as a resource to better understand the complexities of global business.

“Our goal is to help our members understand the marketplace, how to navigate it, what the guidelines are and what constraints they may face,” Nicholson-West said.

 

 

Key Takeaways

Despite current challenges, the future is promising with an increasing global population and rising incomes, suggesting we could see more demand. Opportunities are budding in Mexico, Southeast Asia, Japan, Korea and broader Latin America.

“The future is bright for U.S. dairy abroad to continue driving demand and take advantage of demand growth due to rising populations and increasing disposable income,” explained Loux. “These opportunities won’t be given to us, though. We will need to invest and continue to work for them.”

Dairy farmers can be confident that while they continue to produce milk, the USDEC and DMI teams are working on their behalf to drive demand and build trust in U.S. dairy.

“You have a team of people that are very passionate, excited and believe in the product you produce, and they promote it any chance they get,” Nicholson-West said.

 

 

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