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 2011 reaching over $4.7 billion, a 30 percent increase over 2010. However, with only about 13 percent of total milk production being sold overseas, considerable room exists for lasting growth.

Continued expansion overseas is the market's logical progression for the U.S. dairy processing industry. The U.S. dairy market is fairly mature, meaning that domestic consumption of dairy products has begun to level off. Demand abroad, however, is growing rapidly. Both developing and developed markets represent 95 percent of all consumers, and this broad a consumer base is too large to ignore. changing socioeconomic landscape of developing countries, specifically in Asia, is a major reason for this market growth. As nations such as China and India become wealthier, their citizens want and can afford more nutrient-rich foods like dairy products.

These opportunities for growth are not without challenges, however. Trade-distorting government programs that promote export subsidies, tariffs and income-support mechanisms are prohibiting some U.S. exports from meeting their full growth potential. In addition, these barriers are preventing multilateral and bilateral trade negotiations from progressing. A serious commitment by the U.S. government, coupled with 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.

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