If one thing was apparent in the energy and attendance at Dairy Forum 2020, it’s that right now is a really good time to be in dairy. The dairy business in the United States at the consumer level has never been bigger, never been stronger, and it continues to grow. Dairy is highly relevant in the marketplace, and, importantly, the marketplace for dairy is expanding globally.
USDA released agricultural export data for December earlier this month, completing the full picture for exports in 2019. Despite significant disruptions in trade throughout 2019, U.S. dairy exports topped $5.9 billion for the year, up 8 percent in value over 2018. This growth—despite the volatile trade climate—is a testament to America’s dairy industry, which continues to innovate, build new customer bases around the world, and deliver a high-quality product known for consistency, safety, and deliciousness. The task now is to ensure America’s award-winning and globally recognized dairy brands are able to compete on a level playing field with our competitors, where they are certain to succeed.
Need proof of America’s ascendance as a global dairy powerhouse? Look no further than the 2019 World Cheese Awards, where U.S. brands garnered 131 medals—more than France and Italy. For the first time ever, an American cheese from Savencia Cheese USA’s Rogue Creamery took the top prize. Consumers around the world now demand U.S. brands and are getting more familiar with our labels.
High-value exports led the way in 2019, with cheese, whey products, lactose, butterfat, fluid milk and milk powders seeing the biggest year-over-year gains compared to 2018, with some categories experiencing double-digit growth in export value. U.S. cheese export volumes rose for the third consecutive year, nearing 360,000 tons. Sales to Mexico, our top export market, rose 11 percent to more than $1.5 billion. And on the northern side of the border, we increased sales by 4 percent to $666 million in Canada. Other top markets included China, South Korea, Japan, the Philippines, Indonesia, Vietnam, and Colombia.
What’s staggering about these exports values is that two decades ago, U.S. dairy served the domestic market almost exclusively. The past 20 years have been transformational, as dairy exports increased fivefold. Fifteen percent of our consumers now live outside of U.S. borders, and they love American dairy products.
Our task now is to grow markets for the future by putting our brands—and U.S. dairy’s value proposition—front and center. The USDA estimates we are going to increase dairy output by 15 percent by 2028 – that’s 33 billion pounds of milk. In the meantime, we need to develop both domestic and international markets that allow us expand exports from 15 percent to 20 or 25 percent of overall production.
We cannot look at the world as a place where we offload lower-value products. Cheese, whey, lactose, butterfat, and shelf-stable milk—the marketplace demands these higher-value products known for America’s value proposition of high quality, unbeatable taste, safety, and affordability. We also need to continue to innovate—creating new products that consumers want or finding new ways to get them existing products. For example, finding ways to export more shelf-stable milk products to Asia is a priority.
Achieving export growth in dairy requires trade agreements —rules-based, market-oriented trade deals. The deals we’ve recently struck with Canada, Mexico, Japan, and China are important, but they are just the beginning. Our competitors—like the EU—are negotiating trade agreements around the world. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is ratcheting down tariff rates to markets comprising 13 percent of global GDP.
We need to act with urgency. The U.S. dairy industry is the most efficient, reliable supplier in the world, and our IDFA members are innovating and expanding the marketing capabilities to provide the world with the high-quality, value-added dairy products it wants. We need the White House, Congress, and our trading partners to prioritize American dairy products by ending retaliatory tariffs and leveling the playing field for our dairy companies and producers. That is what IDFA is working for on behalf of our members.With more than 95 percent of potential customers living outside the United States, expanding access to international markets is essential for the future America’s dairy industry. Fortunately, we’re on the right track.