By Rob Blaufuss, IDFA Economic Analyst

Strong international demand for dairy, especially from Southeast Asia, helped lead to a dramatic rebound in U.S. dairy products in both export value and quantity during 2010 compared to year-ago levels.

On a quantity basis, the United States exported a record level of dairy products during 2010. A total of 3.53 billion pounds of dairy products was exported, representing a 39-percent increase over year-ago levels and 17 percent above the previous record-high level experienced in 2008. U.S. dairy product export value totaled $3.69 billion during 2010, but it fell just short (1.6 percent to be exact) of breaking the previous level set in 2008 ($3.75 billion).

Total U.S. dairy import quantity during 2010 was at its lowest level since 2000, while the total value of imports increased slightly (1.5 percent) compared to year-ago levels. The significant increase in export quantity coupled with lower import quantities helped lead to a record-high trade balance during 2010. The United States last year exported nearly 2.2 billion pounds more than it imported, which is 780 million pounds higher than the 2008 level.

Dry whey and related products represent the most-exported dairy-product category during 2010. Total dry whey exports were 1.02 billion during 2010, a 30-percent increase compared to year-ago levels. Nonfat dry milk export levels increased 55.1 percent, equaling 846.8 million pounds. Lactose was the third most-exported dairy product, with 605.2 million pounds exported (+25.2 percent higher than year-ago levels).

Cheese and curd product exports experienced their highest export level on record during 2010, with a total of 382.6 million pounds (+60.1 percent higher than year-ago levels). Other dairy products, a category that includes mostly food ingredients, rounded out the top five with exports increasing only 1 percent to 262.8 million pounds during 2010 compared to year-ago levels.

The dramatic surge in total U.S. dairy export value was led by the tremendous turnaround in the value of nonfat dry milk exports in 2010, which totaled nearly $1.04 billion, more than double the value of exports in 2009. Cheese and curd export value increased 61.4 percent during 2010 compared to year-ago levels, with a total export value of $694.2 million.

Several smaller value-share dairy products, such as condensed and evaporated milk (+177.5 percent), dry whole milk and cream (+171.3 percent) and butter and milkfat (+151.1 percent) experienced drastic increases in their total export values in 2010 compared to year-ago levels.

Mexico maintained its spot as the top U.S. dairy-product export destination during 2010, with exports totaling $836.8 million, a 31 percent increase compared to year-ago levels. Other top destinations included Canada ($385.5 million) and China ($237.3 million), which experienced a 16-percent and a 73-percent increase in their respective import value levels.

Countries such as the Philippines (+138 percent), Indonesia (+145 percent) and Vietnam (+176 percent) also experienced dramatic increases in their respective dairy import levels during 2010 compared to year-ago levels. Southeastern Asia is an increasingly important market for U.S. dairy exports, representing seven of the top 10 destinations last year.