A Data-Based Initiative to Identifying New and Emerging Opportunities for Diversifying U.S. Dairy Exports
Over the past two decades, the U.S. dairy sector has evolved drastically. As milk production has steadily increased, the growth of domestic dairy consumption has moderated slightly. In turn, international markets are consistently purchasing a growing share of U.S. milk production. U.S. dairy exports have grown from under $1 billion in 2000 to nearly $10 billion annually today, primarily through cheese and ingredients. Exports now account for a meaningful and rising portion of U.S. dairy utilization, supporting farm income, processing capacity, and employment across the country.
At the same time, this export success has come with increasing market concentration. Due to geographical proximity, interrelated supply chains, convenience, and market clearing effects, the United States has become heavily reliant on a small number of foreign destinations—most notably China, Canada, and Mexico—which together account for approximately 46% of total U.S. dairy export value and 49% by volume. With the addition of Japan and South Korea, that concentration of total U.S. dairy exports jumps to 58% by value or volume. With nearly 20% of U.S. milk eventually being exported, that means nearly 12% of all U.S. milk finds a home in just five foreign countries.
Based on these figures and trends, U.S. dairy’s underlying lesson can and must be that global market diversification should be a cornerstone of the industry’s long-term export strategy.
Enter IDFA’s Project Diversify, an initiative designed to consider potentially underexamined export regions using data-backed metrics, proprietary weighting, and policy and market analysis. The goal is to provide a fresh look at global markets that may have been overlooked by U.S. dairy exporters. In the first report of this ongoing series, IDFA applies this framework to Western Africa, using specific methodology to evaluate markets based on stability, demand, and growth as related to U.S. dairy exports. The findings identify Nigeria, Senegal, and Côte d’Ivoire as the markets warranting further evaluation by the U.S. dairy industry.
The report concludes with recommendations for U.S. dairy exporters to consider when evaluating these markets. The findings are intended to support informed decision making and sector-wide discussion about how the U.S. dairy industry can build a more resilient, diversified global strategy in the years ahead.
Read the full report for more information. If you are an IDFA member and would like to receive the report appendix, please contact trade@idfa.org.
Becky Rasdall Vargas
Senior Vice President, Trade and Workforce Policy
Elena Clark
Manager, Trade and Economic Policy