December 26, 2016
In its recently release "Growth of U.S. Dairy Exports" report, USDA's Economic Research Service finds that the value of U.S. dairy product exports more than quadrupled from 2004 to 2014, making the U.S. the world's third largest dairy product exporter. But the outlook for 2015 is less than rosy.
The United States has long been a top milk producing country, but in the early 2000s, the country began to export more products. U.S. dairy product exports grew from around $1.6 billion in 2004 to almost $6.8 billion in 2014.
The rapid increase was fueled by income growth in East Asia, Southeast Asia and Latin America. Free trade agreements provided greater access to world markets, especially Mexico through the North American Free Trade Agreement. China's market-based reforms opened their market – one of the world's largest – for dairy product imports. The U.S. has reduced domestic support and export subsidies for dairy products, bringing greater openness of world markets.
Since 2003, prices of U.S. domestic dairy products and export prices in Australia and New Zealand have become more correlated.
As global conditions changed in 2015, the value of U.S. dairy exports fell to $4.9 billion, a 28% decrease from 2014, which was greater than the 11% decrease in total agricultural exports.
Several reasons are cited for the decrease in dairy exports, including weaker or slower growth in global demand for demand products, especially in China, a Russian ban on dairy imports from several countries, a strong U.S. dollar and the discontinuation of milk supply quotas in the European Union.
Going forward, rising demand in developing countries provides opportunities for continued growth, but this growth depends on ability of U.S. producers to remain competitive with other major dairy exporters.
The U.S. is the leading exporter of what dairy products?
The United States is a leading exporter of lactose and whey products. It also exports significant volumes of butter.
What is the leading export destination for U.S. dairy products?
Mexico is the leading export destination for U.S. dairy products.
What four product categories accounted for about 80% of the total value of dairy exports in 2015?
The four products are cheese, SMP, whey products and lactose. SMP refers to skim milk powder and nonfat dry milk.
Why did U.S. dairy exports decline in 2015?
Exports declined because global demand was relatively weak, especially from China, the value of the U.S. dollar was strong compared to other currencies, Russia has banned imports of most dairy products from the United States and several other countries and the EU has discounted its milk supply quotas.
Source: USDA Economic Research Service
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