Wisconsin Ag Connection - Panel: Opportunities Lie Ahead for U.S. Dairy Export Market

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Panel: Opportunities Lie Ahead for U.S. Dairy Export Market
Wisconsin Ag Connection - 03/15/2013

There are plenty of reasons to be optimistic about the future of the nation's dairy industry these days. During a panel discussion at the Professional Dairy Producers of Wisconsin business conference in Madison this week, Al Levitt, vice president of communications with the U.S. Dairy Council, identified globalization as the key driver for continued growth of milk and dairy product sales.

"As of now, the United States is exporting about 13 percent of our milk output," Levitt said. "And as our industry has been growing, nearly half of our 'new milk' has been sold overseas in the past decade."

If anything could be changed, Levitt noted that the American dairy sector will need to do a better job of increasing its portfolio of available products if they want to take the export market to the next level. He says global buyers are looking to purchase more powdered milk, specialty cheeses and other products that are not as commonly produced.

Another area that the U.S. dairy industry needs to evaluate going forward, Levitt says, is ensuring product safety through traceability and doing a better job of securing free trade agreements.

Chris Herlache with Schreiber Foods in Green Bay pointed out that other dairy producing countries are seeing some drawbacks that can give the U.S. dairy industry an edge in the global market. Four of the U.S. dairy industry's largest competitors are facing challenges in their respective dairy industries.

"New Zeland is landlocked, Austria has water issues, China is facing a lack of trust in terms of available supply and India tends to have smaller herds and lower production," Herlache said. "Our main challenge here in the states is increased government regulations and a complicated milk pricing structure."

Meanwhile, Anand Rao, general manager of technical services at Fonterra USA, pointed out that the growth in the global market is being driven by the urbanization of third-world countries, as well as a growing middle class in those areas of the world.

"As the economies in those nations grow, we are seeing that the people want more conveniences, such as dining at restaurant and buying snack foods," Rao said. "And families are also paying attention to the nutritional needs of their children, which is boosting demand for dairy products."

Noting that the U.S. milk production has been increasing nearly ever year since 1996, Levitt said the U.S. dairy industry will benefit significantly by taking advantage of available opportunities, leading to bright days ahead.

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