Global Markets

Why International Trade Matters to U.S. Dairy Processors

Global trade is one of the most critical components of the U.S. dairy industry today. The potential for U.S. dairy exports has grown significantly over the past few years, with the total value of our dairy exports in 2008 reaching over $3.8 billion - a 26 percent increase over 2007. However, with only 9.5 percent of total milk production being sold overseas in 2007 there is considerable room for lasting growth.

Continued expansion overseas is the market's logical progression for the dairy processing industry. The U.S. market in particular is fairly mature, meaning that domestic consumption of dairy products has leveled off (with the one significant exception of cheese). Demand abroad, however, is growing rapidly. Both developing and developed markets account for about 96 percent of all consumers, which is simply too broad a consumer base to ignore. This substantial percentage of consumers found abroad is due in large part to the changing socioeconomic landscape of developing countries, specifically in Asia. As nations such as China and India become wealthier their citizens' diets change accordingly and start to include nutrient-rich foods such as dairy products.

These opportunities for growth in the U.S. dairy export market are not met without challenges however. Trade-distorting government programs promoting export subsidies, tariffs and income support mechanisms are prohibiting some U.S. exports from meeting their full growth potential. In addition, these tariff and non-tariff barriers are preventing multilateral and bilateral trade negotiations from progressing. A serious commitment by the U.S. government alongside support from U.S. industry is necessary to achieve enforceable trade agreements that eliminate tariff and non-tariff barriers to trade and increase export opportunities for our dairy industry.

Articles



© 2009 International Dairy Foods Association. All Rights Reserved.