As a checkoff board member, I often am asked, “Why should exports matter to me?” I hear, “I am in a fluid market, so how do I know if any of my milk has ever gone overseas in any way, shape or form?”
My response is this: when the world markets change in price, my price changes. It’s not the community you live in that dictates milk’s value. So, it matters what’s happening in Australia. It matters what’s happening in the EU. And it matters what’s happening in Wisconsin and California, too, because we live in a very interconnected dairy market.
As farmers, we have a very sharp business sense and we’re very good at producing milk. Since 2000, U.S. milk production has grown at a compound annual rate of around 1.7%, while domestic consumption has grown at 1%. This requires us to look beyond our borders for new destinations for our milk.
Since 2003, around half of all new milk has gone to export markets in the form of cheese and ingredients. The U.S. shipped nearly 70% of nonfat dry milk/skim milk powder to overseas markets last year. Cheese exports have grown from less than 1.5% of production in 2000 to nearly 6% in 2019. Dairy export value grew from $1 billion in 2000 to $5.6 billion last year, increasing from 611,453 metric tons to 2.3 million in that period.
I credit the checkoff leaders who came before me for having the incredible vision to create USDEC in 1995.
A global player
State and country lines aren’t the barriers to a market that they used to be. All of us are in a global dairy market, and it’s critical for us to have our foot on both sides of those lines. That way, we can move product where it needs to go and capture value, whether it’s in Missouri or Malaysia.
Thanks to USDEC, U.S. dairy is a global player and we’re meeting the needs of a growing market for our products. It’s sometimes hard to believe but 95 percent of the world’s population lives outside our borders. As people in these other countries get more disposable income and enter the middle class, they tend to improve the quality of their diets. And that means including more dairy.
U.S. dairy also is sending a loud message to the rest of the world that we produce quality products. Look no further than the results of the recent World Cheese Awards in Italy where a U.S. cheesemaker – Oregon’s Rogue Creamery – took home the overall honor with its Rogue River Blue. It beat more than 3,800 entries from 42 countries! But the story went far beyond Rogue. U.S. cheesemakers captured 131 medals overall, making a clear statement that our products can stand up to anyone’s around the world.
Since former Secretary of Agriculture Tom Vilsack was named president and CEO of USDEC at the beginning of 2017, he set forth some key priorities.
First, he launched “The Next 5%” plan, USDEC’s goal to increase the volume of U.S. exports from the equivalent of 15% of U.S. milk solids to 20%.
Having boots on the ground in these countries helps us maintain our competitiveness against competitors who have been in these markets for a much longer time.
Another accomplishment was establishing the U.S. Center for Dairy Excellence (CDE) in Singapore that, once it becomes operational next year, will deepen market insights, strengthen the quality branding of U.S. dairy and identify more sales opportunities. USDEC selected Southeast Asia because of its ideal location to engage customers and partners and showcase our sustainability, product quality and product portfolio.
We all understand the implications of retaliatory tariffs and trade deals that continue to be negotiated, yet our exports are weathering the storm. U.S. export value rose 4.3% to $4.4 billion for the January-September period. That is the highest start to a year since 2015.
This is why exports matter to all of us, no matter where we farm. And we have USDEC to thank for giving us exactly what we need: the ability to help secure demand and trust in the great product that we produce across all parts of the world.