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, as the global market is rapidly expanding. U.S. dairy exports have risen from $1.4 billion in 2004 to $4.7 billion in 2016, and our nation now benefits from a dairy trade surplus of nearly $2 billion. This accounts for 15.5 percent of U.S. milk production. Additionally, according to U.S. Department of Agriculture, 20,000 jobs are supported for each $1 billion in dairy exports.
Continued expansion overseas is the market's logical progression for the U.S. dairy processing industry. The U.S. dairy market is mature, meaning that domestic consumption of dairy products will stay at a fairly constant level. Demand abroad, however, is growing rapidly. Both developing and developed markets represent 95 percent of all consumers in the world, which is too broad of a customer base to ignore. Changing socioeconomic landscape of developing countries, specifically in Asia, is a major reason for this market opportunity. As nations like China and India become wealthier, the demand for affordable, nutrient-rich foods like dairy products will increase.
Prospective market growth is not without a complete set of challenges. Trade-distorting government programs that promote export subsidies, tariffs and income-support mechanisms are prohibitive to some U.S. exports. 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. IDFA works toward urging the government to eliminate tariff and non-tariff barriers to trade and increase export opportunities for the U.S. dairy industry.
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