Archive for Southeast Asia

July 2024 Dairy Exports Surge, Setting Records and Outpacing Previous Year’s Performance

Explore how U.S. dairy exports are breaking records and surpassing last year’s numbers. How will these trends impact your dairy business? Learn more now.

Summary: This year has been nothing short of impressive for U.S. dairy exports. Despite fluctuations in some categories, overall growth remains strong, with cheese, whey, and nonfat dry milk all showing significant year-over-year increases. Cheese exports reached 88.7 million pounds in July, marking a new monthly high for the sixth time in 2024. Whey exports saw a 22.4% increase driven by Chinese demand, and nonfat dry milk exports hit a 14-month high, bolstered by record shipments to Mexico and an 80% surge to the Philippines. The sustained growth in these areas signals the U.S. dairy industry’s strength and presents promising opportunities for development and investment. However, the outlook for milk powder exports remains uncertain due to rising global prices and fluctuating U.S. output.

  • U.S. dairy exports vigorously grow across several categories, including cheese, whey, and nonfat dry milk.
  • Cheese exports hit 88.7 million pounds in July 2024, setting new monthly highs multiple times this year.
  • Whey exports increased by 22.4%, mainly due to rising demand from China.
  • Nonfat dry milk exports experienced a 14-month high with significant growth in markets like Mexico and the Philippines.
  • The U.S. dairy industry demonstrates robust potential for investment and expansion, offering promising opportunities for growth and development. This optimistic outlook is sure to inspire hope and confidence in the industry’s stakeholders.
  • Despite the overall positive trends, it’s important to note that milk powder export forecasts remain clouded by rising global prices and inconsistent U.S. production levels. This cautionary information is crucial for stakeholders to be aware of potential risks and make informed decisions.

By 2024, dairy exports aren’t just staying afloat—thriving. Month after month, U.S. dairy exports are making headlines and surpassing new benchmarks despite market ups and downs. This resilience underscores the strength of the U.S. dairy sector and should inspire confidence among all stakeholders. Diving into recent trends in dairy exports, mainly focusing on cheese, whey, and nonfat dry milk, we’ll explore why this matters. Understanding these patterns will help you make informed business decisions and possibly tap into emerging markets. In July, the U.S. shipped 88.7 million pounds of cheese abroad, marking a 9.4% increase from the previous year, according to USDA’s Global Agricultural Trade Systems. Keep reading to discover how this surge in dairy exports could impact your business and shape the global path for U.S. dairy products.

Export CategoryJuly 2023July 2024% Change
Cheese (million lbs)81.188.79.4%
Whey (million lbs)33.240.622.4%
Nonfat Dry Milk (million lbs)118.5130.310%

Dairy Export Trends: 2024 Marks a Year of Remarkable Growth 

With relation to dairy exports, 2024 looks to be a historic year. The most recent USDA Global Agricultural Trade Systems numbers show startling expansion in some dairy product categories.

July 2024 saw a significant milestone in U.S. dairy exports, with 88.7 million pounds of cheese being sent overseas, marking a 9.4% rise over the previous year. This increase, setting new monthly records for the sixth time this year, is a clear indicator of the growing demand for U.S. dairy products in the global market and a testament to the potential of the U.S. dairy industry.

In July, exports also saw a remarkable increase, rising by 22.4% yearly. The dramatic 34% increase in exports to China was a significant contributor to this spike, highlighting the increasing demand in Asian markets. This surge in exports to China clearly reflects the growing global demand for U.S. dairy products.

Notfat dry milk (NDM) also grew noticeably. In July, exports reached a 14-month high, surpassing last year’s level by 10%). Notably, sales to Mexico established a monthly record, up 20% from July 2023; exports to the Philippines jumped by an impressive 80%.

The vitality in these numbers emphasizes the worldwide performance of American dairy products, reflecting their quality. Cheese continues its strong performance, whey has mostly recovered, and NDM is still a necessary export good with great potential for expansion.

Sustained Growth in Cheese Exports: A Harbinger of Industry Strength 

Regarding cheese exports in 2024, we see a challenging trend to overlook. Comparatively to July 2023, July alone witnessed a startling 88.7 million pounds of U.S. cheese transported overseas—a 9.4% rise. These statistics represent the strength and resiliency of the U.S. dairy industry, not simply data on a chart.

More impressive, perhaps, is that, particularly to vital markets south of the border, this represents the 14th straight month of record-breaking exports. This steady rise emphasizes the growing worldwide demand for U.S. cheese and the sensible tactics American producers have used to satisfy it. Setting a new high every month shows U.S. cheese’s volume, quality, and dependability, which consumers all across like.

These figures should also be a sign of hope for dairy farming specialists. The rising trend presents opportunities for development and investment, opening doors to new markets. The regularity of these record-breaking months also points to a strong basis and implies that this trend is sustainable. As you review your company strategy, take advantage of this increase in cheese exports. How do you see this? Please let others know about your observations and experiences. This potential for business expansion and investment should inspire optimism and motivate industry professionals to seize these opportunities.

U.S. Whey Exports: 2024 Highlighting a Robust Recovery 

Considering the low 2023 standards, U.S. whey exports in 2024 have improved. The July exports jumped by 22.4% year over year. The 34% rise in exports to China is a notable engine of this expansion. This increase points to a noteworthy comeback and rising demand from one of the most significant worldwide marketplaces.

Export figures in 2021 and 2022 still fall short of those peak years. Still, the path of recovery shows a good change in 2024. Many elements probably help to explain this increase. First, whey is vital as high-quality protein products are increasingly sought after worldwide. Furthermore, the deliberate efforts of the U.S. dairy sector to improve traceability and quality have made U.S. whey a premium commodity.

This development has consequences beyond current sales numbers. First, it increases industrial confidence in reaching the Asian markets. Moreover, a steady increase in whey exports might open the path for more consistent pricing and help offset home supply changes. Professionals in dairy farming and related businesses should track these developments to modify their plans and seize the growing market prospects.

U.S. Nonfat Dry Milk Exports: A Rising Tide in the Global Market 

A notable increase in U.S. nonfat dry milk (NDM) exports has created ripples in dairy worldwide. With a 10% increase above the previous year’s volumes, July was a 14-month high in NDM exports. This represents the increasing demand for U.S. dairy goods and strategic orientation in critical global markets, not just a statistic. This increasing demand for U.S. dairy products should make all industry professionals proud and accomplished.

Mexico is still great; July exports show an all-time high—a stunning 20% rise from the previous year. This significant increase emphasizes solid trade ties and the demand for superior American dairy products.

The Philippines is another vital market with an 80% increase in NDM imports from the United States. This significant increase can be attributed to the expanding taste for American dairy products in Southeast Asia, indicating a growing market for U.S. NDM in the region.

Examining more general patterns, the U.S. NDM has a more significant advantage worldwide. Rising global pricing and China’s increasing purchases at recent Global Dairy Trade (GDT) auctions point to a decrease in milk powder stockpiles among important exporters and importers. This offers a unique opportunity for American goods to close the gap more clearly.

Still, there are some obstacles just waiting here. Reduced U.S. milk powder production might have restrictions; another element to watch is the recent rise in spot NDM pricing. U.S. milk powder pricing for German skim milk powder (SMP) and GDT SMP stayed throughout last year about 10ȼ below benchmark levels. However, recent rises in spot NDM rates have closed this difference and heightened the competitiveness for new businesses.

Stakeholders have to be alert even if chances for ongoing development abound. Quickly using these benefits and negotiating challenges will depend on closely observing market dynamics and world developments.

Mixed Signals in U.S. Milk Powder Export Forecast 

U.S. milk powder exports show mixed possibilities and difficulties in their projection. Rising worldwide pricing and higher Chinese buys at recent worldwide Dairy Trade (GDT) auctions point, on the one hand, to declining milk powder supplies of essential players. Under this situation, U.S. exporters could have fresh opportunities to fill the void.

The road ahead isn’t apparent, however. U.S. milk powder production has been somewhat poor, and the rise may hamper future sales in spot pricing for nonfat dry milk (NDM). U.S. milk powder costs were around 10ȼ below those for German skim milk powder (SMP) and GDT SMP for a good period—between September 2023 and July 2024—which gave it a competitive advantage. But that margin has dropped because of a late-summer surge in spot NDM prices.

This price rise compromises the competitive pricing edge, which makes it more difficult for American companies to get new contracts in a market growing competitive. Therefore, even if there are chances, especially with declining global stocks, U.S. exporters must carefully negotiate through these possible hazards. Strategic planning is thus essential for maximizing these trends without running into the related hazards.

The Bottom Line

When we consider the critical 2024 data points, it is evident that the U.S. dairy export industry is seeing excellent expansion in many different sectors. Cheese exports are setting records, indicating worldwide strong demand. However, whey sales to China and significant rises in nonfat dry milk exports to Mexico and the Philippines suggest other growing markets.

However, the milk powder export projection is still up for debate. While declining global stock and increasing prices should provide advantageous circumstances, changing U.S. production and competitive pressures could create difficulties.

What does all this mean for experts in the dairy business and farmers? There are chances for development and possible obstacles to negotiating in a developing export market. Leveraging these changes will depend primarily on being informed and flexible.

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UK Dairy Farmers: Unbelievable August Milk Prices Ahead! Learn How to Capitalize Now

Find out how UK dairy farmers can boost profits with the rising August milk prices. Check out market trends and steps to capitalize on this opportunity.

Summary: July 2024 has seen intriguing movements in the global dairy market, shaping UK milk prices and presenting significant challenges and opportunities for farmers. Robust global demand and supply constraints have driven milk prices up, and as we head into August, a continued rise is expected. This necessitates strategic actions from UK dairy farmers to optimize revenue and profitability. Essential insights and investment strategies will be crucial in navigating this volatile market, ensuring resilience and growth. The UK dairy market is grappling with rising feed costs, increased export demand, and a focus on sustainable farming methods, leading to a surge in milk prices. Demand from China and India has prompted price hikes, while post-Brexit trade agreements have facilitated exports, opening new revenue streams. Geopolitical issues like the Russia-Ukraine crisis and climatic difficulties in New Zealand and Australia have also contributed to the surge. In July 2024, reduced grass output, lower milk production per cow, increased feed demand, and post-Brexit regulation changes have led to a notable price increase.

  • Global Demand Surge: Growing milk demand from countries like China and India is pushing prices upward, creating robust export opportunities.
  • Supply Constraints: Reduced grass output and lower milk production per cow in the UK are contributing to supply-side limitations.
  • Geopolitical Factors: The Russia-Ukraine crisis and climatic adversities in New Zealand and Australia are indirectly influencing UK milk prices.
  • Post-Brexit Trade Dynamics: Recent trade agreements have facilitated increased exports, providing new revenue streams for UK dairy farmers.
  • Rising Feed Costs: UK farmers are facing increased feed demand and higher costs, necessitating strategic adjustments to maintain profitability.
  • Sustainability Focus: Sustainable farming practices are increasingly essential, with market trends steering towards environmentally-conscious operations.
  • Regulatory Changes: Adjustments in post-Brexit regulations are impacting operational dynamics and costs for dairy farmers.

Entering August, the UK dairy market is negotiating a complex environment shaped by dynamic factors such as increasing feed costs, increased export demand, and a focus on sustainable farming methods, all driving higher milk prices. Dairy farmers who wish to optimize income and profitability must first understand these trends and demand a strategic plan based on the most recent market data. By developing and implementing a strategic plan, UK dairy producers can monitor current developments to protect their herds from volatility and boost profitability.

FactorsJuly 2024Projected August 2024Impact on Dairy Market
Feed Costs£285/ton£295/tonIncreases production costs, affecting overall profitability
Export DemandHigh (15% increase)Very High (20% increase)Boosts milk prices due to higher demand from international markets
Sustainable Farming InitiativesAdoption Rate: 45%Adoption Rate: 50%Initial costs but long-term savings and higher market value
Milk Prices£0.32/liter£0.34/literIncrease in revenues for farmers

Surging Milk Prices! Uncover the Factors Driving This Unprecedented Boom 

The recent surge in UK milk prices is a testament to the positive strides made by the global dairy industry. The solid demand from across the world, especially from China and India, has led to significant price hikes. The higher affluence and evolving food preferences in these nations have driven this demand, and the UK dairy industry is playing a pivotal role in meeting it.

Improving export prospects is also essential. Premium dairy products from the United Kingdom are in great demand worldwide, notably in the European Union and Southeast Asia. Post-Brexit trade agreements have allowed more accessible exports, opening up new cash sources for UK farmers.

Geopolitical issues have supplied extra impetus. The crisis between Russia and Ukraine has changed supply chains, raising demand for dairy goods throughout Europe, including the United Kingdom. Furthermore, climatic difficulties in New Zealand and Australia have temporarily limited production, which benefits UK markets. Rising worldwide demand, improved export routes, and geopolitical shifts have increased milk prices for UK producers. This offers a promising foundation for future development and profitability.

A Perfect Storm: How July’s Market Trends Signal Unprecedented Challenges and Opportunities for UK Dairy Farmers 

In July 2024, the milk market saw a price increase, bringing obstacles and possibilities for UK dairy producers. The hot, dry summer has decreased grass output and milk production per cow. This has increased the demand for additional feed, which has become more costly due to global grain market concerns and rising shipping costs.

Post-Brexit regulation changes and customs inspections have raised the cost of imported feed, veterinary supplies, and equipment. Additionally, labor shortages are raising salaries and increasing operating costs.

Despite these challenges, practical actions may assist in controlling income. Efficient feed and water utilization, new farming practices to increase milk output, and diversification of supply sources are critical for success in the present market.

Brace for Impact: August 2024’s Milk Price Surge Demands Strategic Action from UK Dairy Farmers 

Milk prices are predicted to climb even more in August 2024, owing to increased worldwide demand and restricting local supply. We expect a 4-5% average rise, driven by a projected worldwide dairy market growth rate of 3.2%, a significant increase from the prior projection of 1.15%. Emerging markets in Southeast Asia and Africa want more dairy, which contributes considerably to the rise. Climate uncertainty and geopolitical concerns impacting feed costs may drive prices upward.

Environmental reasons and regulatory developments in crucial dairy exporting nations have resulted in a turbulent but potentially lucrative environment for UK dairy producers. Understanding these forecasts is critical for developing ways to maintain financial stability. Farmers should assess their production capacity and consider expanding or investing in sustainable techniques to profit from increased pricing. Embracing technology to improve efficiency and examining supply chain efficiencies will be critical to revenue growth.

Here are Key Actionable Insights: 

As UK dairy producers confront rising milk prices, managing the market effectively is critical for maximizing profitability. Here are crucial actionable insights: 

  • Optimized Herd Management: Effective herd management is critical. Cow health must be carefully monitored to ensure regular veterinarian checkups and preventative treatment. Advanced breeding procedures may improve milk production and quality. Consider investing in genetic breakthroughs that have shown improved lactation performance.
  • Feed Optimization: Rethink your feeding strategy. The quality and content of feed have a direct influence on milk output. Choose nutrient-dense feed that balances carbs, proteins, and necessary minerals. Precision feeding technology may help optimize this process, ensuring that each cow obtains the optimal nutritional intake while minimizing waste.
  • Cost Control: Examine your operating costs thoroughly; use technology for more effective farm management to save expenses. Automated milking, feed delivery, and monitoring systems may save labor expenses while increasing uniformity. Keeping an eye on market trends helps make intelligent purchase choices, including getting bulk feed or supplies at attractive pricing.
  • Market Intelligence: Stay current with market trends and predictions. Aligning milk production plans with peak pricing times may help increase profitability. Diversifying milk products—from fluid milk to cheese, butter, or yogurt—could result in additional income streams, particularly in specialist markets like organic or A2.

In summary, profiting from increasing milk prices requires combining conventional knowledge and cutting-edge technology. UK dairy producers may survive and prosper in a changing market scenario by concentrating on optimal herd management, accurate feed methods, and strict cost controls.

Investment Strategies UK Dairy Farmers Can’t Afford to Ignore

As we navigate these difficult yet exciting times, UK dairy producers must consider numerous investment alternatives to increase profitability. One potential route is technological advancement. Implementing modern milking equipment and data-driven herd management tools may improve efficiency and output, increasing income. Furthermore, this technology may assist in monitoring animal health more accurately, lowering veterinarian expenditures and increasing production.

Another critical investment is diversification into value-added goods. Profit margins may be increased by processing milk into cheese, yogurt, or other specialist dairy products. These products often command premium pricing in domestic and international markets, acting as a buffer against the volatility of raw milk prices.

Finally, discovering new markets may lead to extra income sources. With favorable developments in the global dairy sector, expanding into export markets or specialist areas such as organic or free-range goods provides significant growth potential. Expanding market reach stabilizes revenue and prepares farmers to capitalize on rising consumer demand in several places.

Mastering Dairy Market Volatility: Essential Risk Management Strategies for UK Farmers 

Risk management is critical for success in the unpredictable dairy sector. UK dairy producers experience price swings and market instability, making a robust risk management strategy essential for long-term profitability and survival. Without it, your farm’s financial health could be at serious risk.  

  • First and foremost, it is critical to hedge against price volatility. Forward contracts may lock in milk and other dairy product prices, shielding you from unexpected market reductions. These contracts are helpful, particularly when short-term volatility is anticipated.
  • Options trading provides an additional degree of protection. Purchasing put options enables you to sell milk at a fixed price, which cushions against price declines. Call options allow you to profit from price rises, guaranteeing that you maximize income under favorable market circumstances.
  • Diversifying your revenue sources is also beneficial. Adding value-added products to your portfolio, such as cheese, yogurt, or butter, may provide additional income streams while mitigating the effects of shifting milk costs. Investigate specialized markets such as organic or specialty dairy products, which often command higher, more consistent pricing.
  • Liquidity management is another critical component. A sufficient cash reserve gives a buffer during difficult times when milk prices fall or input expenses suddenly surge. This buffer helps to ensure operational stability.
  • Finally, precision agricultural technology may provide data-driven insights to improve decision-making. Real-time market data, predictive modeling, and automated milking systems may help maximize production efficiency and profitability. Use data to quickly adjust to market changes and keep your operations agile and responsive.

Addressing price volatility requires a diversified risk management strategy. Financial instruments, diversification, liquidity management, new technology, and insurance solutions may help you safeguard your farm from possible dangers while capitalizing on growing possibilities in the dynamic dairy market.

The Bottom Line

We have looked deeply into the factors causing the recent increase in milk prices, revealing how several July 2024 market trends create unique difficulties and exciting prospects for UK dairy producers. With August estimates predicting further growth, it is clear that intelligent investment and proactive risk management are critical. Farmers must remain aware, watch market movements, and modify their strategies to capitalize on these advantageous circumstances. Dairy farmers may increase their income and profitability by harnessing professional insights and taking advised steps in this volatile market. Immediate action, such as reevaluating investment plans or improving risk management techniques, can guarantee that farmers survive and prosper in the face of continuous changes. The time to act is now—stay ahead of the curve, capitalize on trends, and ensure your farm’s future success.

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Alarming Link Between Low Dairy Consumption and Child Stunting: Global Data Insights

Uncover the global link between low dairy intake and child stunting. Can enhanced nutrition policies turn the tide? Delve into the pressing call for intervention.

Millions of children worldwide are currently unable to reach their full potential due to a lack of essential nutrients, particularly dairy. The research conducted by the International Food Policy Research Institute has revealed a significant link between low dairy consumption and increased child stunting rates. This condition not only hampers physical and cognitive growth but also raises the risk of child mortality. According to data from UNICEF, WHO, and the World Bank, stunting is a global issue in Africa, South and Southeast Asia, and Central America. This underscores the urgent need to address the crucial role of milk and dairy products in children’s development. Despite being home to the world’s largest dairy producer, India, South Asia is grappling with high stunting rates due to poor sanitation and hygiene. South East Asia and Sub-Saharan Africa also face high stunting rates and a low per capita milk supply. It is imperative to address the root causes and effects of childhood stunting to devise effective nutritional solutions.

RegionStunting Prevalence (%)Per Capita Milk Supply (Kg/year)
South East Asia3521.1
South Asia3341.5
Sub-Saharan Africa2929.8
Eastern Asia779.3

Unseen Crisis: The Devastating Impact of Child Stunting 

Child stunting, a chronic type of malnutrition, primarily affects children under the age of five, preventing them from growing to their maximum height: long-term dietary inadequacies, recurring illnesses, and a lack of psychosocial stimulation cause this syndrome. Stunting has profound implications, including significant deficits in both physical and cognitive development. Stunted children have delayed brain growth, which affects their learning capacity, academic performance, and future productivity.

Stunting raises the risk of illness and death. According to data from UNICEF, WHO, and the World Bank, stunted children have compromised immune systems, making them more susceptible to frequent and severe diseases that impede their development—alarmingly, stunting accounts for over one-third of all child fatalities worldwide, underlining the crucial need for comprehensive nutritional treatments.

The incidence of stunting varies by area and is affected by socioeconomic status, healthcare availability, and dietary habits. The most excellent rates are seen in South Asia (mainly India and Bangladesh) and Sub-Saharan Africa (including Ethiopia and Nigeria), where poverty, food insecurity, and inadequate sanitation are prevalent. Stunting rates have decreased significantly in Eastern Asia due to economic expansion and better public health infrastructure.

A Multi-Pronged Exploration: Unraveling the Underlying Causes of Child Stunting 

The researchers used a thorough, multidisciplinary method to investigate the variables that cause child stunting, relying on several reliable data sources. They analyzed WHO data on stunting prevalence to better understand its geographic and demographic dissemination. This was combined with FAO Food Balance Sheet calculations, which focused on milk supply. Furthermore, DHS data examined dairy intake among children aged 6-23 months.

Their investigation includes a variety of nutrient-dense food categories, such as nondairy animal-source meals and fruits and vegetables, which are essential for child nutrition. Socioeconomic factors such as average family income were also included due to their importance in food accessibility and health consequences. Infrastructure considerations, notably access to better sanitation and drinking water, were included because they influenced health and nutrition. This comprehensive technique examined the intricate interaction between nutritional components, socioeconomic situations, and environmental health impacts to correctly identify the drivers of child stunting.

Milk Supply and Child Stunting: A Complex Interplay of Diet and Regional Disparities

The research finds a substantial correlation between milk supply and child stunting, demonstrating that increasing dairy availability considerably lowers stunting. It reveals stark geographical inequalities, with South East Asia, South Asia, and Sub-Saharan Africa having the most excellent stunting rates. Surprisingly, despite being the world’s most significant dairy producer, stunting remains prevalent owing to inadequate water and sanitation facilities. The researchers also discovered that a 10% increase in per capita milk intake predicts a 0.7 percentage point decrease in stunting. The study from 2006 to 2020 in 38 low- and middle-income countries emphasizes the importance of dairy-focused initiatives.

The Interconnected Web: Income, Diet, and WASH Conditions in Child Stunting

Poor water, sanitation, and hygiene (WASH) conditions significantly contribute to high stunting rates in areas with poor dairy consumption. However, improving these conditions can have a significant impact on child stunting. Contaminated water and insufficient sanitation cause chronic illnesses and diarrhea, limiting nutritional absorption, essential for growth and development. This continual nutritional loss worsens stunting. Lack of good sanitation exposes children to infections, increasing the risk of stunting. Therefore, a holistic approach to child welfare and development, which includes improving WASH conditions, is crucial in addressing child stunting.

Dietary considerations are also important. Children in regions with low dairy consumption often lose out on nutrient-dense diets high in crucial vitamins and minerals. The scarcity or high cost of nondairy animal-based meals, fruits, and vegetables may contribute to undernutrition and stunting.

Income levels significantly impact stunting rates and milk supply. Higher earnings provide greater access to nutritional meals, particularly dairy, and improved WASH facilities, which reduce infection risks. Economic development often results in decreased stunting prevalence and a more excellent milk supply as families spend more on their children’s nutrition and health.

The relationship between wealth, food variety, and WASH conditions creates a complicated web that influences child development. Effective stunting remedies must include water quality, sanitation, and economic improvements. Addressing these multiple problems together has a more significant potential for lowering stunting rates worldwide.

Strategic Dairy Development: A Cornerstone of Public Health Initiatives Against Child Stunting 

The authors contend that strong evidence associating low dairy intake with increased child stunting warrants emphasizing dairy development in national food and nutritional policies. To address this problem, they urge increased dairy production and consumption as a critical component of public health campaigns. With its substantial resources and expertise, the dairy industry can play a pivotal role in this effort. Dairy products, which are significant in protein and minerals, are vital for children’s physical and cognitive development.

Furthermore, dairy development methods must be adjusted to local circumstances. Regions with ideal dairy farming conditions may benefit from activities to increase yields and build farm infrastructure. Innovation or alternate sources may be required in locations where conventional dairy farming is not feasible. Cultural traditions are also important; for example, upgrading agricultural practices and improving marketing campaigns might promote gains in dairy-rich nations such as India. It’s crucial to ensure that our nutrition ads promote a balanced diet, including dairy while being culturally appropriate and respecting the diversity of our global community.

Success examples from Southeast Asia demonstrate how focused education initiatives may improve dairy integration into diets in areas where it is not commonly eaten. Localizing dairy techniques ensures that treatments are culturally appropriate and realistic, enhancing child stunting and general nutrition. The call to action is clear: comprehensive, targeted dairy development policies are critical to eliminating child stunting and boosting public health. These success stories from Southeast Asia provide a beacon of hope, showing that change is possible and that we can make a significant difference in the fight against child stunting.

Success Stories in Dairy Development: Lessons from Southeast Asia

Thailand’s Dairy Farming Promotion Organization (DPO) has altered the dairy business since its inception in 1962. DPO has increased milk output and quality via enhanced breeding programs, better feed quality, and milk collecting facilities. These projects empower smallholder farmers by incorporating them into value chains that guarantee fair pricing and market access.

The Vietnam Dairy Association’s (VDA) Dairy Development Program has also modernized the sector by boosting milk output using high-yield cow breeds and cutting-edge milking methods. Extensive farmer training in optimal practices has increased production and quality. Strategic marketing initiatives touting milk’s nutritional advantages have boosted consumption, helped dairy producers, and decreased stunting rates.

The Philippines’ National Dairy Authority (NDA) blends tradition and innovation by improving dairy infrastructure and investing in cold chain logistics to maintain milk quality. Regional efforts promoting local dairy consumption’s health and economic advantages have created a robust domestic market, leading to better nutritional results for children.

These successful examples demonstrate the significance of modernizing and marketing in places with solid dairy traditions. Modern procedures promote efficiency and sustainability, while marketing offers stable markets for farmers. Learning from Southeast Asia, other nations should devise specialized methods combining technology breakthroughs with successful promotional efforts to boost their dairy businesses, lower child stunting, and increase public health.

Building Healthy Foundations: The Vital Role of Nutrition Education Campaigns 

Nutrition education initiatives are critical for instilling good eating habits in young children and promoting their growth and development. These campaigns should focus on exclusive breastfeeding for the first five months, which provides essential nutrition and immunological support. Following this time, a combination of nursing and supplemental feeding, including dairy products, should be encouraged for six months. These efforts, which educate caregivers on the advantages of dairy and nutrient-rich meals, may help minimize child stunting and improve overall well-being.

Dairy Production and Environmental Sustainability: Balancing Nutrition and Emission Reductions

Understanding the environmental effect of dairy production is critical, given its importance to world nutrition and food security. Dairy production, often blamed for emitting greenhouse gases, produces high-quality protein and essential minerals. Dairy provides significant nutritional advantages per unit of emissions, making it indispensable in the global diet. However, there is a need to address the environmental impact. Efficiency improvements may attenuate these effects and reduce expenditures for low-income people. Advances in feed quality may boost output while lowering methane emissions per liter of milk. Improved manure management may reduce methane and nitrous oxide emissions significantly. Precision farming practices like optimal feed rationing may help improve sustainability. Breeding innovations for robust and productive cattle can minimize the environmental impact even more. These initiatives promote sustainability and make dairy products more cheap.

Inclusive Solutions: Overcoming Lactose Intolerance to Broaden Dairy’s Nutritional Benefits 

Lactose intolerance, which primarily affects adults in areas with no history of dairy use, challenges dairy development initiatives. This disorder limits the proper breakdown of lactose and the sugar in milk, causing pain and digestive difficulties. Nonetheless, effective options exist. Lactose-free dairy products provide the same nutritional advantages without any side effects. Fermented foods like yogurt and cheese are more easily digestible because they contain less lactose. Plant-based fortified alternatives like almond, soy, and oat milk may provide comparable nutritional advantages.

Ultrafiltered milk appears as a revolutionary answer to world poverty. Ultrafiltered dairy, which uses sophisticated filtering technology to preserve high protein and calcium concentrations while lowering lactose content, is ideal for lactose-intolerant people. Its prolonged shelf life increases its viability in areas with insufficient refrigeration facilities. Supplying concentrated nutrients in a more digestible form, Ultrafiltered milk may help address malnutrition and stunting in disadvantaged people across the globe. This novel concept demonstrates the promise of contemporary dairy technology to provide scalable and nutritionally rich solutions for feeding the world’s poor.

The Bottom Line

Addressing child stunting necessitates a holistic strategy highlighting dairy’s critical role in child health. This study found a relationship between reduced dairy consumption. It increased stunting rates, particularly in Southeast Asia, South Asia, and Sub-Saharan Africa. Regions with a more excellent milk supply had lower stunting rates. Eating patterns, income levels, and WASH conditions demonstrate the need for personalized nutrition programs. Successful examples from Southeast Asia show how focused dairy development and nutrition education may help improve newborn feeding behaviors. Dairy farming offers two advantages: high-quality protein and lower environmental impact via efficiency improvements. Addressing lactose intolerance, especially in adults, may strengthen dairy’s role in combating malnutrition. Integrating dairy development into public health policies is critical as stakeholders fight to eliminate child stunting. Immediate action is required—forming partnerships, mobilizing resources, and adopting focused measures to help youngsters reach their full potential.

Key Takeaways:

  • Low dairy consumption is significantly associated with increased rates of child stunting.
  • Stunted growth in children correlates with failures in physical and cognitive development, as well as heightened child mortality risks.
  • The highest prevalence of child stunting is observed in parts of Africa, South and Southeast Asia, and Central America.
  • Regions with reduced stunting prevalence generally show increased milk supply over the past decades.
  • Dairy development strategies must be context-specific, considering local agro-ecological conditions and cultural practices.
  • Nutritional campaigns should emphasize the importance of integrating dairy into children’s diets post-breastfeeding.
  • The dairy sector’s efficiency improvements can offer dual benefits: reducing environmental impact and making dairy more affordable.
  • Addressing lactose intolerance is crucial to ensure broader access to dairy nutrition, particularly in non-dairy traditional regions.

Summary:

The International Food Policy Research Institute has identified a link between low dairy consumption and increased child stunting rates, a global issue affecting children under five. Stunting hinders physical and cognitive growth, increases the risk of child mortality, and is a major concern in Africa, South and Southeast Asia, and Central America. South Asia faces high stunting rates due to poor sanitation and hygiene, while South East Asia and Sub-Saharan Africa also face high stunting rates and low per capita milk supply. Stunting accounts for over one-third of all child fatalities worldwide, emphasizing the need for comprehensive nutritional treatments. The incidence of stunting varies by area and is influenced by socioeconomic status, healthcare availability, and dietary habits. Improving water, sanitation, and hygiene conditions can significantly impact stunting rates. Economic development can lead to decreased stunting prevalence and improved milk supply as families invest in their children’s nutrition and health.

Learn more:

Understanding the Drop in Southeast Asia’s Dairy Imports from the U.S.

Learn why Southeast Asia is buying less dairy from the U.S. despite economic growth. Is it due to a stronger dollar and no trade deals? Find out more.

Despite robust economic development, U.S. dairy exports to Southeast Asia have unexpectedly decreased. In the first five months of 2024, exports to the Philippines, Indonesia, Vietnam, Malaysia, Thailand, and Singapore declined 5%, reaching 440.7 million pounds, compared to the same time in 2023. This is the lowest export volume to the area since 2019, with significant reductions in nonfat dry milk and lactose exports. This decrease is surprising considering the region’s outstanding economic development, such as Vietnam’s 6.4% GDP spike in the first half of 2024 and the Philippines’ 5.7% GDP gain in Q1. Thailand, Malaysia, Indonesia, and Singapore all saw substantial increases.

CountryNDM Exports (2023) in poundsNDM Exports (2024) in poundsLactose Exports (2023) in poundsLactose Exports (2024) in pounds
Philippines50,000,00046,000,00016,000,00013,500,000
Indonesia40,000,00037,000,00018,000,00015,200,000
Vietnam30,000,00027,500,00014,000,00011,500,000
Malaysia25,000,00023,000,00012,000,00010,000,000
Thailand20,000,00018,000,00010,800,0009,000,000
Singapore10,000,0009,700,0009,500,0008,600,000

The Staggering Decline of U.S. Nonfat Dry Milk Exports to Southeast Asia 

The decrease in nonfat dry milk (NDM) and skim milk powder shipments to Southeast Asia is notable. USDA figures reveal an 8% decrease to 211.2 million pounds in the first five months of 2024 compared to the same time in 2023. This drop is part of a long-term pattern, with US NDM exports being flat since 2020. According to Betty Berning, an analyst with the Daily Dairy Report, the fall is partly due to losing market share. “New Zealand has ramped up its annual shipments to Southeast Asia in 2022 and 2023,” Berning says. Despite heightened competition, overall sales from the top 15 worldwide exporters have dropped since 2020, indicating more significant market issues for U.S. exporters.

Concurrently, U.S. Lactose Exports to Southeast Asia Face a Significant Downturn 

Concurrently, U.S. lactose shipments to Southeast Asia have dropped significantly. From January to May 2024, shipments plummeted by more than 16%, reaching barely 72.8 million pounds. This reduction compares sharply with the same time in 2023, illustrating more significant issues in the United States dairy export markets. Year-over-year sales figures for 2023 reflect a similar pattern, highlighting the persistent challenges for American lactose exporters in these expanding regions.

The Economic Boom Amidst Dwindling Dairy Imports: A Southeast Asian Paradox

The surprising drop in U.S. dairy exports contrasts strongly with Southeast Asia’s economic development. Vietnam’s GDP increased by 6.4% in the first half of 2024, Thailand’s by 1.5% in the first quarter, and the Philippines’ by 5.7% over the same period. Despite this growth, the demand for dairy has yet to follow up. A greater GDP indicates more consumer spending, which frequently boosts milk imports. However, this has not occurred in Southeast Asia, providing a challenge for U.S. exporters looking to restore market dominance.

The Currency Conundrum: How a Stronger U.S. Dollar Impacts Dairy Trade with Southeast Asia

A rising U.S. dollar influences global commerce by affecting importing countries’ buying power. When the dollar rises, products priced in dollars become more costly for customers with weaker currencies. This dynamic is essential for the dairy industry. A rising dollar diminishes buying power in expanding Southeast Asian countries, raising the cost of U.S. dairy goods. Importers must pay more local currency for the same items, making U.S. dairy exports such as nonfat dry milk and lactose less desirable than cheaper alternatives.

New Zealand, a significant player in the global dairy industry, benefits from free-trade agreements with numerous Southeast Asian nations, which reduce tariffs and prices. In contrast, the United States needs such accords, leaving its goods at a price disadvantage compounded by the strong currency. This competitive advantage makes New Zealand dairy products more enticing to budget-conscious importers. Unless U.S. exporters can provide cheaper pricing or achieve new trade agreements, recovering market share in Southeast Asia would be tough.

A Price Too High: How U.S. Dairy’s Premium Costs Are Hindering Exports to Southeast Asia

Pricing strategy is another significant barrier to U.S. dairy exports to Southeast Asia. Since January 2023, U.S. dairy goods have often been priced more than overseas rivals. This pricing disparity has hindered Southeast Asian importers, who value cost-effectiveness, from purchasing American items. Even when U.S. prices were reduced, the reductions were insufficient to change purchase patterns. The absence of convincing pricing benefits makes it difficult for U.S. exporters to regain market dominance.

The Bottom Line

The decline in U.S. dairy exports to Southeast Asia is undoubtedly due to several interrelated reasons. The most urgent are:

  • The loss of market share to New Zealand
  • The negative impact of a higher U.S. currency on buying power
  • The uncompetitive pricing of U.S. dairy goods

Despite substantial economic expansion in Southeast Asia, these factors have significantly dropped demand for American dairy exports. The lack of free-trade agreements exacerbates the problem, making U.S. goods less appealing than those from rivals like New Zealand. As a result, unless the United States can change its pricing approach to provide much reduced prices, the route to regaining its prior export quantities remains difficult.

Key Takeaways:

  • For the first five months of 2024, U.S. dairy exports to Southeast Asia decreased by 5%, marking the lowest level since 2019.
  • U.S. nonfat dry milk (NDM) and skim milk powder exports fell 8% compared to the first five months of 2023.
  • U.S. lactose exports to Southeast Asia dropped by over 16% in the January to May period of 2024.
  • Economic growth in the region has not resulted in increased U.S. dairy imports, contradicting typical market expectations.
  • The stronger U.S. dollar has eroded purchasing power in Southeast Asian countries, making U.S. dairy products less competitive.
  • The lack of free-trade agreements and high U.S. dairy prices relative to global competitors have also contributed to the decline in exports.

Summary:

U.S. dairy exports to Southeast Asia have fallen significantly in the first five months of 2024, reaching 440.7 million pounds, the lowest volume since 2019. This decline is despite the region’s economic growth, such as Vietnam’s 6.4% GDP spike and the Philippines’ 5.7% GDP gain in Q1. The decline in nonfat dry milk (NDM) and skim milk powder shipments is notable, with USDA figures showing an 8% decrease to 211.2 million pounds in the first five months of 2024 compared to 2023. The fall is partly due to losing market share, as New Zealand has increased its annual shipments to Southeast Asia in 2022 and 2023. A stronger U.S. dollar impacts dairy trade with Southeast Asia by affecting importing countries’ buying power and raising the cost of U.S. dairy goods.

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Soaring Temperatures Hammer Dairy Production: Tight Milk Supply and Rising Costs Impact Market

How are soaring temperatures impacting dairy production and milk supply? Discover the challenges faced by farmers and the market shifts affecting your dairy products.

For America’s dairy producers, the increasingly sizzling summers are a testament to their resilience. Despite the rising heat and humidity that create severe difficulties for the dairy business, these farmers continue to persevere. The unrelenting heat may compromise cow comfort and lower milk output, but these dedicated individuals are finding ways to adapt. Their efforts, even in the face of the worst conditions in decades, are a source of inspiration. They are proving that even in this heat, cows can still produce.

Tightening of Spot Milk Availability: A Dire Shift for Dairy Processors 

MonthAverage Price ($/cwt)Year-Over-Year ChangeFive-Year Average ($/cwt)
January21.87+3.5%19.30
February20.75-2.0%19.60
March22.15+1.8%19.80
April23.05+4.2%20.00
May24.00+5.1%20.20

The lack of spot milk availability is rather apparent. Dairy Market News notes a shortfall of extra shipments even during last week’s vacation. As temperatures climb and cow comfort falls, Midwest milk workers find it challenging to meet demand. Usually, there would be a surplus, but this season provides few choices. Against the five-year average of about $2.70/cwt discounts, processors seeking spot cargoes of milk now face expenses averaging 50¢ above Class III. This sudden shift draws attention to the mounting strain in the dairy sector.

Improvement in Milk Margins: A Double-Edged Sword for Dairy Farmers

MonthMilk Margin 2023 ($/cwt)Milk Margin 2024 ($/cwt)Change ($/cwt)
January$8.90$9.60+$0.70
February$8.30$10.10+$1.80
March$8.50$10.05+$1.55
April$8.75$9.60+$0.85
May$9.60$10.52+$0.92

Despite the better milk margins recorded by USDA’s Dairy Margin Coverage program, the financial environment for dairy farmers is not without its challenges. The Milk Margin Over Feed Cost climbed to $10.52 per hundredweight (cwt) in May, a noteworthy 92%-increase from April, the highest number since November 2022. This increase has helped dairy producers relax some of their financial load. However, various economic hurdles include high interest rates, increased borrowing costs, and limited operational investment. Further impeding development are low heifer supplies necessary for herd expansion, replenishment, and high meat costs. As such, increasing milk production presents significant difficulties even with improved profits.

Significant Decline in Dairy Powder Production: A Paradoxical Market Stability

MonthNDM Production (Million lbs)SMP Production (Million lbs)
January 2024120.595.3
February 2024115.290.1
March 2024118.792.8
April 2024112.388.6
May 2024109.486.5

The effects on dryers have been notable; nonfat dry milk (NDM) and skim milk powder (SMP) output shows a clear drop. The industry’s difficulties were highlighted in May when the combined production of these powders dropped by 15.9% year over year. Over the first five months of 2024, NDM and SMP’s combined production fell to a decade-low. Still, NDM rates have remained highly constant, varying within a small 20′ range over the previous 17 months. Tepid demand balances the limited supply and preserves market equilibrium, providing this stability.

Volatile Dairy Export Markets Take a Hit: Mexico and Southeast Asia Push NDM and SMP Exports to Record Lows

MonthNDM Exports (Million Pounds)SMP Exports (Million Pounds)
January150.233.1
February130.431.7
March120.929.3
April140.332.5
May133.630.6

The dairy sector has been severely disrupted by the decline in NDM and SMP exports, which has been made worse by a dramatic reduction in demand from Mexico and Southeast Asia. The lowest for May since 2017, shipments of NDM and SMP dropped 24.2% year over year to barely 133.6 million pounds. The drop occurred mainly due to a notable 18.3% annual fall in sales to Mexico. Orders have also notably dropped in key markets in Southeast Asia. This crisis exposes dairy export markets’ sensitivity to trade dynamics and regional economic situations.

Butter Market Soars Amid Supply Constraints: Elevated Prices Highlight Unyielding Demand

Reflecting a robust historical figure, the butter market has maintained high prices at $3.10 per pound. Fundamental causes include:

  • Limited cream supply from the summer heat.
  • Growing competition from Class II users.
  • An aggravating cream shortage.

Notwithstanding these limitations, May’s 4% year-over-year growth in butter output points to strong demand. These supply problems disturb the churns, yet the market needs more butter to satisfy industrial and consumer requirements.

A Tale of Two Cheeses: Italian Varieties Surge While Cheddar Falters 

Cheese TypeProduction Change (Year over Year)Key Influences
Italian Varieties+4.4%Rising Demand, Improved Margins
Cheddar-9.7%Lack of Available Supplies, Market Fluctuations

Cheese manufacturing is undergoing a significant shift, reflecting the impact of changing consumer tastes. Italian variants like Parmesan and Mozzarella are witnessing a 4.4% spike in May, indicating the evolving market. On the other hand, Cheddar’s output is falling, plagued by declining milk supplies and growing manufacturing costs. This shift in consumer preferences is a crucial factor that the industry needs to be aware of and prepared for. As global consumers search for less expensive options, present high costs might restrict exports in the future.

Whey Markets Surge: Breaking Through the 50¢ Barrier

MonthPrice per PoundVolume Traded (Loads)Trend
May47¢25Stable
June48.5¢22Slight Increase
July50¢30Increase
August51¢28Stable

This week, the whey markets performed well, surpassing the 50¢ per pound threshold for the first time since February. Monday’s slight decrease was followed by Tuesday’s and Thursday’s price increases. With three cargoes exchanged, dried whey prices on Friday had risen 1.75% from the previous week to 51¢ per pound. Manufacturers concentrate on value-added goods such as whey protein isolates and high protein whey protein concentrates, even if regular cheese output drives constant whey manufacturing. This change reduces dry whey output and will probably help near-term pricing.

USDA’s July Report: Sobering Projections Amid Flood-Induced Uncertainty 

The July World Agricultural Supply and Demand Estimates published by the USDA provide a mixed picture of the maize and soybean output for 2024/25. Increased acreage causes estimates of corn output to rise by 1.6%, but greater use and exports lower ending stockpiles. Conversely, lower starting stocks and less acreage caused soybean output to drop by 0.3%, resulting in declining ending stocks.

While soybean meal prices held at $330 per ton, USDA shaved the average farm price prediction by 10¢ for both commodities, bringing corn to $4.30 per bushel and soybeans to $11.10 per bushel. This ought to keep feed expenses under control. However, recent extreme flooding in the Midwest, particularly along the Mississippi River, has severely disrupted crop output, possibly rendering up to one million acres of maize useless with little likelihood of replanting. These difficulties might cause feed price volatility, changing the economic environment for dairy producers and other agricultural sector players.

The Bottom Line

Modern dairy markets must contend with changing market dynamics, economic instability, and climate change. Rising heat and humidity have put cow comfort and milk output under pressure, therefore affecting spot milk supply. High borrowing rates, heifer shortage, beef pricing, and better margins all help to limit milk output. Extreme weather influences market stability and dairy output: the declining dairy powder output and butter and cheese market volatility highlight sector instability. Unpredictable availability and significant price fluctuations are resulting from supply restrictions and competition. Dampened demand from Mexico and Southeast Asia complicates matters, especially for skim milk powder and nonfat dry milk. The future of the dairy sector depends on changing consumer tastes, economic pressures, and environmental issues. To guarantee a robust and sustainable future for dairy, stakeholders must innovate for sustainability by adopting adaptive practices.

Key Takeaways:

  • Milk production has declined due to high temperatures affecting cow comfort.
  • Spot milk availability has tightened significantly, with handlers in the Midwest struggling to find excess loads.
  • The price of spot milk is averaging 50¢ over Class III, compared to a five-year average discount of $2.70/cwt.
  • US milk supply has been trailing prior year levels for almost a year on a liquid basis.
  • May Milk Margin Over Feed Cost reached $10.52/cwt., the highest since November 2022.
  • Despite improved margins, producer expansion is limited by high interest rates, heifer scarcity, and elevated beef prices.
  • Milk supplies are tightest for dryers, with NDM/SMP production down markedly and cumulative production at its lowest in a decade.
  • NDM prices have remained stable despite low production, ending the week at $1.18/lb.

Summary:

Rising heat and humidity in America have put cow comfort and milk output under pressure, affecting spot milk availability. Dairy producers are adapting to these challenges, with processors facing expenses averaging 50¢ above Class III. The Milk Margin Over Feed Cost increased by 92% in May, the highest number since November 2022. High interest rates, increased borrowing costs, and limited operational investment are also impeding development. Low heifer supplies for herd expansion and replenishment are causing difficulties. Dairy powder production has declined significantly, with nonfat dry milk (NDM) and skim milk powder (SMP) output dropping by 15.9% year over year. The volatile dairy export markets have taken a hit, with Mexico and Southeast Asia pushing NDM and SMP exports to record lows. The butter market maintains high prices at $3.10 per pound due to limited cream supply, growing competition from Class II users, and an aggravating cream shortage.

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U.S. Dairy Exports Drop 5% in May as Cheese Continues to Shine Amid a Challenging Year

Uncover the factors behind the 5% dip in U.S. dairy exports for May, even as cheese exports surged. Can the dairy sector overcome these hurdles and sustain its presence in the global market?

These initiatives, designed with a proactive approach, represent a strategic goal to boost the U.S. dairy industry. The investment in experimental projects for value-added skim milk powder sales to Southeast Asia is a testament to our progressive attitude towards consumer needs. Products such as ESL/aseptic fluid milk, evaporated/condensed milk, and ice cream now receive fat-equivalent support, a deliberate diversification strategy to improve our export profiles.

Furthermore, establishing an advisory council for strategic direction underscores our commitment to industry-wide cooperative efforts. The council’s first emphasis on precompetitive assistance ensures that even smaller companies have opportunities in the global market. The NMPF Executive Committee and the entire board have meticulously planned to increase the industry’s international profile, a goal we all share and are proud to work towards.

Conversely, the larger scene of agricultural commerce seems negative because May’s numbers support an unparalleled trade imbalance. Changing trade links, currency volatility, and global pricing rivalry distort the picture. The USDA Economic Research Service projects a record $32 billion trade imbalance by the end of 2024, stressing significant difficulties ahead for American agriculture.

This disparity emphasizes a crucial point: whereas specific dairy sectors benefit from strategic initiatives and high overseas demand, the agriculture export industry has structural challenges. Essential actions to guarantee a steady increase in U.S. dairy exports in a competitive worldwide market include updating trade agreements and increasing workforce availability.

Cheese Leads the Charge Amidst a Mixed Bag for U.S. Dairy Exports

The U.S. Dairy Export Council reports that May’s dairy exports dropped by 5% after April, which showed an encouraging increase. This drop emphasizes the market’s unequal performance, whereas cheese still shows a fantastic upward tendency. With a 27% rise over the first five months of 2024, U.S. cheese exports in May totaled 48,029 metric tons, up 47% yearly and somewhat less than March’s record number. Strong demand from China’s pig sector also increased Whey exports by 19%.

However, these increases were countered by a dramatic reduction in nonfat dry and skim milk powder shipments to Southeast Asia, which fell 51% yearly to 14,265 metric tons. Weak currencies in the area and fierce worldwide competitiveness help explain this decline.

U.S. Cheese Exports Shine Bright in a Cloudy Dairy Market

American cheese exports shined brilliantly in May, with a substantial 47% year-over-year rise. Driven by American dairy producers’ constant excellence and inventiveness, this explosion emphasizes the worldwide desire for American cheese. Cheese exports have shown strong resilience throughout the first five months 2024, rising by 27%. Record-high March volumes highlight even more the tremendous worldwide demand for American cheese.

Whey Exports Surge Amidst Turbulence, Driven by China’s Growing Demand

Whey exports maintained an upward tendency in a changing U.S. dairy export market. Driven chiefly by great demand from China’s recovering pork sector, whey exports in May showed a noteworthy 19% rise over the year before. This comeback in China’s hog output has made whey even more critical as an ingredient in animal feed. This requirement emphasizes the need to focus on specific international markets to negotiate global competitiveness, currency changes, and the links among many industries.

Global Competition and Economic Pressures Batter U.S. NDM and SMP Exports, Plunging 51% in May

Among the general drop in U.S. dairy exports, nonfat dry milk (NDM) and skim milk powder (SMP) dropped by 51% yearly in May. Various reasons have led to this sharp decline in U.S. exports to Southeast Asia. Mainly from Australia, Europe, and New Zealand—places that gain from reduced manufacturing costs and strategic trade agreements—the heightened global competitiveness from these countries has given them a competitive advantage over American exporters.

The economic difficulties in Southeast Asia aggravate the problem even further. American dairy goods are more expensive and less appealing when weaker currencies in many nations lower their buying power against the U.S. dollar. This junction of fierce competitiveness and financial restrictions shows the problematic environment U.S. dairy exporters must negotiate. To recover power in Southeast Asia, American dairy goods could make a strategic turn, including improved marketing, focused trade agreements, and investigation of new market niches.

CWT Program: A Pillar of Support in U.S. Dairy Export Success

U.S. dairy exports are increasing thanks to the Cooperatives Working Together (CWT) program, a voluntary, producer-funded program that helps U.S. dairy farmers by strengthening and maintaining the demand for dairy products. Thanks to CWT’s help, an extra 5.4 million pounds of dairy products were included in sales in June. CWT-supported export sales the year to date show 45.9 million pounds of American-type cheese, 309,000 pounds of butter, 769,000 pounds of anhydrous milkfat, 18 million pounds of whole milk powder, and 5.9 million pounds of cream cheese. This amounts to 627.8 million pounds of milk on a milkfat basis sent to 27 nations across five continents. Navigating changing market circumstances depends much on the effect of the CWT program.

May’s Dairy Heifer Replacement Exports Highlight Market Vulnerabilities

With an 87% drop from April, May’s dairy heifer replacement exports provide a worrying picture. Distribution of only 241 dairy heifers marked a dramatic decline from April’s 1,808 head. Turkey and Vietnam made significant acquisitions in April, totaling more than 2,000 head, which marks this fall-off. May’s shipments went only to North American partners; Mexico bought 178 and Canada 63. This geographical emphasis reflects patterns from February, therefore illustrating continuous difficulties in the U.S. dairy export sector.

Dairy Embryo Exports Show Robust Growth, Highlighting Market Opportunities and Regional Variability

Exports of dairy embryos were resilient, jumping 13% in May. The UK, Germany, China, and Honduras were key customers, reflecting different market conditions. Germany’s purchases jumped by 52%, while Brazil’s imports declined from 93 to 75 embryos to show regional variances.

U.S. Hay Exports Continue Downward Trend: Alfalfa and Other Varieties Reflect Mixed Market Dynamics

Hay exports remained dropping in May for the second straight month. Year-to-date sales topped 1,013,054 metric tons, while U.S. alfalfa hay exports fell by 12% to 198,993 metric tons. Though their purchases dropped 13% and 8%, respectively, China and Saudi Arabia remained the largest consumers. Japan did boost imports by 2% to 35,424 metric tons.

Other hay exports dropped by 1% in May, following a similar, albeit less dramatic, trend. Japan also dominated in this area with an 11% rise to 55,178 metric tons; South Korea’s imports dropped 13% to 25,466 metric tons. With 96,302 metric tons of other hay shipped overall in May, the U.S. has sold 464,352 metric tons year-to-date.

May Figures Paint a Bleak Picture of U.S. Agricultural Trade Deficit 

May’s numbers concerning the U.S. agriculture trade balance provide a concerning narrative. Exports were $13.739 billion; imports were $18.009 billion, producing a $4.269 billion deficit. With a deficit of $15.218 billion, the fiscal year-to-date is at an all-time high. By 2024, the U.S. Department of Agriculture projects an unheard-of $32 billion trade imbalance.

Several factors contribute to this worsening trade balance: 

  • Falling Commodity Prices: Lower prices for key American crops reduce export revenues, aggravated by international competition.
  • Strong U.S. Dollar: A strong dollar makes U.S. goods pricier abroad, deterring foreign buyers.
  • Labor Challenges: High labor costs and worker shortages hamper productivity.
  • Stagnant Trade Agreements: No new trade deals since 2012 have disadvantaged U.S. agriculture.
  • Economic Conditions in Partner Countries: Weak currencies in Southeast Asian regions reduce their buying power.

Addressing these issues through strategic trade negotiations, labor investments, and policies to stabilize prices and currencies is crucial to reversing this trend.

The Bottom Line

As we negotiate the complexity of the U.S. dairy export market, it’s evident that although cheese and whey are booming, others face significant challenges. May’s numbers show this uneven performance; cheese exports lead the way, while nonfat dry milk and skim milk powder struggle against world competitiveness and financial constraints.

These opposing results highlight more general difficulties in the dairy export scene—a market molded by changing demand, foreign rivalry, and economic uncertainty. Driven by China’s demand, whey’s comeback emphasizes prospects in specialized markets; cheese exports have consistently demonstrated a substantial increase. On the other hand, the sharp drops in skim milk powder and nonfat dry milk expose weaknesses in worldwide competitiveness and exchange rates.

The general agriculture trade imbalance exposes fundamental market problems, further complicating the situation. Dairy exporters will have to negotiate economic headwinds even if price recovery is possible in the following months. Using Cooperatives Working Together (CWT) assistance, developing focused pilot projects, and adding operational flexibility will help U.S. dairy goods be more visible on the market. Furthermore, sustainability and creativity might provide a competitive advantage worldwide.

The American dairy sector finds itself at a turning point. Maintaining adaptability and forward-looking by prioritizing strategic interventions and encouraging international cooperation would help. Although the difficulties are great, so are the chances for development and change worldwide.

Key Takeaways:

  • Cheese Exports: Increased by 47% year-over-year to 48,029 metric tons, maintaining strong performance.
  • Whey Exports: Rose by 19% compared to last year, driven by robust demand from China.
  • Nonfat Dry Milk (NDM) and Skim Milk Powder (SMP): Experienced a significant 51% drop due to global competition and weaker currencies in Southeast Asia.
  • CWT-Assisted Sales: Surpassed 5 million pounds in June, with notable contracts for cheese, butter, and other dairy products.
  • Dairy Heifer Replacements: Recorded an 87% decline in May, with trading limited to North American partners.
  • Dairy Embryo Exports: Increased by 13%, showcasing market potential in several regions.
  • Hay Exports: Continued to decline, with a 12% drop in alfalfa hay sales and a slight decrease in other hay varieties.
  • Agricultural Trade Deficit: Reached -$4.269 billion in May, contributing to a record fiscal year-to-date deficit of $15.218 billion.

Summary:

The U.S. dairy industry is focusing on boosting exports by investing in value-added skim milk powder sales to Southeast Asia and establishing an advisory council for strategic direction. These efforts aim to diversify products like ESL/aseptic fluid milk, evaporated/condensed milk, and ice cream, improving their export profiles. However, the agricultural trade landscape faces significant challenges, with a $32 billion trade imbalance projected by the USDA Economic Research Service by the end of 2024. Cheese exports have shown a strong upward trend, with a 27% rise over the first five months of 2024. However, nonfat dry and skim milk powder shipments to Southeast Asia fell 51% yearly to 14,265 metric tons. American cheese exports have shown resilience, rising by 27% in May, driven by the excellence and inventiveness of American dairy producers. Whey exports have also seen a significant 19% rise in May, driven by China’s recovering pork sector. To recover power in Southeast Asia, American dairy goods could make a strategic turn, including improved marketing, focused trade agreements, and exploration of new market niches. Addressing these issues through strategic trade negotiations, labor investments, and policies to stabilize prices and currencies is crucial to reversing this trend.

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Mid-Year 2024 Global Dairy Business Review: Key Developments from January to June

Explore the pivotal global dairy business events from January to June 2024. Keep up with essential mergers, expansions, and executive appointments. Ready to delve in?

In the dairy business, developments happen quickly, influencing markets from the Midwest of America to Southeast Asia. The first half of 2024 was no different, with mergers, acquisitions, and expansions shaping the global dairy landscape. You’ve come to the right place if you want to stay ahead. This summary retrospectively looks at significant industry events from January to June 2024. Tracking these developments is about more than just who’s merging or expanding. It’s about understanding trends that drive the industry and anticipating shifts that could impact your business. Every executive change and market strategy plays a role in the bigger picture. 

January 2024: A Month of Strategic Moves and Expansion in the Dairy Industry

January 2024 witnessed significant movement in the dairy industry. Among the top executive changes, Molly Pelzer, CEO of Midwest Dairy, announced her retirement effective March 2024, while Lino A. Saputo of Saputo Inc. received the prestigious Order of Canada. Strategic mergers and acquisitions also marked the month: Ornua Nutrition Ingredients sold its UK powder blending and manufacturing business to Roger Wertheim-Aymes. Danone struck a deal to sell its Horizon Organic and Wallaby businesses to Platinum Equity. 

Expansion was the theme for several companies. Domino’s outlined an ambitious plan to add over 1,100 new stores annually, and Pizza Inn signed a franchise agreement to establish 50 new locations in Saudi Arabia. Natural Organic expanded its footprint into Vietnam and Thailand, and Lakeland Dairies announced capacity upgrades at its Killeshandra fluid milk facility. The Chinese dairy sector saw the commencement of operations at the National Dairy Innovation Center. 

Japan’s Meiji nearly doubled its investment in Danone’s infant formula facility in Ireland, underscoring a trend of international growth among Irish dairy companies, including moves by Lakeland Dairies and Danone to expand their global reach.

February 2024: A Flurry of Strategic Business Moves, Investments, and Growth Initiatives in the Global Dairy Sector

February 2024 saw significant strategic moves, partnerships, and investments in the global dairy sector, underscoring growth and market expansion. 

Global investment firm Cathay Capital partnered with French dairy company Savencia Fromage and Dairy to boost Savencia’s presence in China. This collaboration involves Cathay investing in Savencia’s Chinese brand Baijifu, which offers over 50 cheese and dairy products. Cathay will focus on product innovation, brand development, sales expansion, and supply chain management to tap into China’s dairy potential. 

Russian dairy producer EkoNiva Group significantly boosted its exports by opening a new office in Xi’an, China. This move aims to increase brand awareness, diversify product offerings, and leverage regional rail transport to improve supply chains. EkoNiva has been actively exporting dairy products to China, including retail UHT milk, since 2020. 

The Value4Dairy Consortium, led by Dutch dairy cooperative FrieslandCampina, received a $5 million grant from the Bill & Melinda Gates Foundation. This grant aims to bolster dairy productivity and sustainability in Nigeria, modernize the sector, and support small-scale milk production, benefiting around 40,000 producers. 

Fonterra Co-operative Group launched initiatives to enhance sustainable production. Fonterra Australia introduced the “Naked Mozz” project, eliminating over 330 tons of cardboard annually, resulting in significant cost savings. Additionally, Fonterra announced the installation of a 20-megawatt electrode boiler at its Edendale site in New Zealand to reduce emissions and the overall carbon footprint

Denmark-based Arla Foods entered talks to acquire the Semper facility in Sweden from Hero Group, highlighting Arla’s intent to enhance its production capabilities and optimize operations. 

FrieslandCampina continued its proactive expansion in Southeast Asia by introducing new products under its Nurture brand in Singapore and planning market entries in Malaysia, Indonesia, and Thailand. The company targets active professionals with probiotic drinks. 

In executive leadership changes, Irish dairy cooperative Ornua appointed Lindsay Brady as President of Ornua Foods North America, underscoring its strategic growth plans for the U.S. and Latin America. 

February 2024 demonstrated the global dairy sector’s dynamic and competitive nature through robust investments, key partnerships, and strategic market expansions.

March Sees Developments in Global Companies’ Revenues and Profits and Market Challenges.

As noted in their financial performance results, persistently high inflation impacted sales at many major global dairy processors in 2023. 

China driving results for a2 Milk Co. New Zealand’s a2 Milk Co. saw revenue up 3.7% and net profit after tax up 15.6% in its 2024 half-year results, thanks to solid performance in China. Despite higher costs and fewer births, a2 posted a 1.5% growth in total IMF sales but cautioned about challenging market conditions ahead. 

Dairy Ireland weighs on Kerry Group results. Kerry Group’s 2023 revenues dropped by 8.6% to €8.020 billion (about US$8.7 billion), attributed to falling sales and volumes in Dairy Ireland. The unit experienced constrained supply and elevated input costs. CEO Edmond Scanlon mentioned focusing on emerging markets and sustainable nutrition as key differentiators. 

“Difficult year” for FrieslandCampina. FrieslandCampina’s revenue fell 7.1% to €13 billion (about US$14 billion), driven by unfavorable currency effects and declining consumer market volumes due to high inflation. Operating profit plummeted 84.1%. CEO Jan Derck van Karnebeek highlighted the tough year and anticipates slightly growing demand but increased costs due to geopolitical instability. 

Solid results for Danone. Danone’s 2023 revenue rose 7% to €27.6 billion (about US$30 billion), driven by a 7.4% price increase and growth in its essential dairy and plant-based protein business. CEO Antoine de Saint-Affrique cited progress and development, particularly in China and North Asia. The company expects inflation to ease and sales growth of 3% to 5% this year. 

Dairy and Infant Nutrition grow for Nestlé. Nestlé reported a 1.5% decrease in total sales to CHF93 billion (about US$106 billion). However, infant nutrition and dairy showed bright spots with high single-digit growth. CEO Mark Schneider credited increased marketing and investments for the company’s growth despite inflation. Nestlé expects organic sales growth of around 4% in 2024.

April Proved to Be a Dynamic Month with Several Noteworthy Developments Shaping the Global Dairy Industry 

April was a dynamic month with several noteworthy developments shaping the global dairy industry. Here are the key highlights:

Fonterra’s Strategic Moves: New Zealand’s Fonterra announced the closure of two Waikato processing plants to boost high-value product production. This shift includes closing the Waitoa specialty powders site and two dryers at Te Rapa, focusing more on specialty nutrition dryers and UHT plants. 

Westland Milk Products’ Financial Gains: Westland Milk Products, owned by China’s Yili Group, reported a record profit of NZ$56 million. Strong sales of high-value products like butter and strategic international partnerships with retailers like Walmart and Costco drove success.

Cutting-Edge Collaborations: FrieslandCampina Ingredients and Triplebar Bio Inc. teamed up to produce lactoferrin through precision fermentation, meeting the growing global demand for this protein.

New Plant Investments: Meiji celebrated its new $90-million ice cream plant in Shanghai. Fonterra’s Anchor Food Professionals also announced a distribution switch to penetrate the Chinese bakery sector more deeply.

Ongoing Technological Expansion: Fonterra’s new application center in Wuhan, China, will be operational in September. It will leverage new technologies to boost dairy product quality.

Acquisitions and Strategic Divestments: Italy’s Sabelli acquired Stella Bianca to expand its dairy segment. Saputo revealed several U.S. plant closures as part of its Global Strategic Plan.

Innovative Approaches in Dairy Nutritional Products: Nestlé China introduced Yiyang Wanning, a milk powder to improve sleep, while Japan’s Meiji launched Eye and Sleep W Support, which claimed to aid eye health and sleep.

Carbon Reduction Initiatives: General Mills announced a plan to reduce methane emissions on dairy farms by 40% by 2030. Their Climate Transition Action Plan focuses on regenerative agricultural practices and supports the Dairy Methane Action Alliance.

May 2024: Navigating Financial Turbulence, Strategic Shifts, and Bold Investments in the Dairy Industry 

May 2024 developments in the dairy industry highlight various financial challenges, strategic restructuring plans, market exits, and new investments. These actions are shaping the landscape for companies navigating competitive market conditions. 

Belgium-based dairy cooperative Milcobel is reorganizing following a net loss of 3.7% in 2023. Their plan includes integrating dairy units for synergy and scaling back milk powder activities by September 2024. 

Several Irish dairy companies faced hurdles in 2023. Lakeland Dairies saw a significant revenue and profit drop due to a global dairy market collapse, leading them to prioritize value-added products. Ornua and Carbery Group also faced challenges, prompting increased investments in international marketsAurivo Dairy Ingredients noted an operational profit drop but aims to grow in Central America, Southeast Asia, and the Middle East. 

General Mills might sell its North American yogurt business, including Yoplait, potentially valued at $2 billion. This signals a strategic recalibration. 

In China, Yili Industrial Group reported a record-breaking $17.6 billion operating income for 2023, thanks to innovations like advanced lactoferrin extraction technology. Yili aims to leverage these advancements to enhance its market leadership. 

Pizza Hut China launched a Pizza Burger to cater to young, single consumers, reflecting a strategic diversification to capture niche markets

On sustainability, Mars Inc. initiated a plan to cut GHG emissions by 50% by 2030. Partnering with FrieslandCampina, Mars will focus on sustainable feed production and manure management. 

Dale Farm announced a £70 million investment in its cheddar processing facility to boost production capabilities and meet rising demand. 

These developments show that while the global dairy industry faces challenges, companies are actively restructuring, investing in innovation, and adopting sustainable practices to thrive in the evolving market landscape.

June 2024: Significant Developments Shaping the Global Dairy Industry 

June saw notable developments in the global dairy industry. As Synlait Milk faces financial difficulties, over half of its suppliers plan to cease milk supply. At the same time, the company looks to sell its manufacturing plants and consumer Dairyworks business to reduce debt. A vote on a NZ$130 million loan from major shareholder Bright Dairy is pending.

On the expansion front, Dutch Lady Milk Industries Berhad (a subsidiary of Royal FrieslandCampina) opened a new plant in Malaysia, which is set to double production capacity and achieve sustainability goals. Similarly, Idaho-based Suntado celebrated opening a new production facility in Burley, which can handle over 450 MT of raw milk daily, with future expansions on the horizon. 

Corporate moves included Müller UK & Ireland’s acquisition of Yew Tree Dairy, positioning Müller for growth in the powdered milk market. Ireland’s Lakeland Dairies aims to sell its shuttered Banbridge site, and Oatly abandoned plans for its first UK beverage facility, opting to utilize European sites instead. 

In executive news, Clover Sonoma appointed John Coletta as the new CEO. Meanwhile, DMK Group announced plant closures due to lower milk volumes. Financial highlights came from Saputo, which reported a rise in revenues but a drop in net earnings for FY 2024, and Yakult Honsha announced plans for a new factory in the Philippines to meet rising demand.

Campbell Soup Co. decided to sell the Noosa yogurt brand, and Fonterra planned a new application center in China. Danone and Michelin collaborated with DMC Biotechnologies to accelerate precision fermentation developments. Lastly, Oceania Dairy reported losses, and Bidcorp U.K. acquired Northern Bloc Ice Cream, marking notable market activities in June 2024.

The Bottom Line

The first half of 2024 has highlighted the fast-paced and ever-changing nature of the global dairy industry. Dairy companies worldwide have shown agility and resilience through strategic shifts, mergers, acquisitions, expansions, and product innovations. This period marked critical leadership transitions, significant investments in technology and sustainability, and ongoing market challenges shaping the sector. Key trends include a focus on healthy eating, sustainability efforts, and growth in emerging markets. Companies like Nestlé, Fonterra, and Danone are leading efforts in methane reduction, innovative products for specific health benefits, and strategic market expansions. The industry’s dynamic nature underscores the importance of staying updated with comprehensive insights and analyses. As we continue through 2024, monitoring these developments is crucial to adapt to the rapidly evolving dairy market. This review provides invaluable insights for industry stakeholders, stressing the need for continual adaptation and informed decision-making. 

Key Takeaways:

  • Leadership Changes: Key appointments and retirements mark shifts in leadership across various companies like Midwest Dairy and Saputo Inc.
  • Mergers & Acquisitions: Notable mergers include Wasoko and MaxAB in Africa, while prominent acquisitions involve Ornua Nutrition Ingredients in the UK.
  • Global Expansion: Companies like Nutura Organic and Danone are expanding their footprints into new markets such as Vietnam, Thailand, and the U.S.
  • Innovative Trends: FrieslandCampina Ingredients and others are focusing on consumer health with trends like sustainable nutrition and gut health advancements.
  • Environmental Initiatives: Investments in reducing carbon footprints and increasing sustainability, as seen with Lactalis and Fonterra.
  • Financial Performance: Reports reveal a mix of gains and losses influenced by market conditions, inflation, and strategic investments.

Summary:

In the first half of 2024, the global dairy industry witnessed a dynamic mix of strategic moves, mergers, acquisitions, expansions, and notable executive changes. Key highlights include Midwest Dairy CEO Molly Pelzer announcing her retirement, Saputo Inc.’s recognition with the Order of Canada, and significant investments from companies like Danone and Lactalis in renewable energy and operational expansions. Domino’s ambitious growth plans further spotlight the sector’s momentum, while regional industry trends emerged with strong initiatives from Nutura Organic in Southeast Asia and modern farming strategies from FrieslandCampina in Nigeria. As dairy companies navigate a challenging landscape marked by evolving consumer preferences and sustainability goals, the first half of the year set a robust foundation for continual growth and innovation.

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Unexpected Trends in the U.S. Dairy Industry: Fluid Milk Sales and Cheese Exports Rise Amid Steady Decline in Milk Production

Discover why U.S. fluid milk sales and cheese exports are surging despite a decline in production. How is this shift impacting the dairy market? Read more to find out.

person using MacBook pro

Unexpectedly for the U.S. dairy business, fluid milk sales and cheese exports are rising even as milk output steadily declines. Adjusting for the leap year, fluid milk sales jumped by about 100 million pounds in the first four months of the year over the previous year. Cheese exports concurrently reach a record 8.7 percent of total output from February to April, the most ever for any three months or even one month. These unexpected patterns can be attributed to a variety of factors, including changing consumer preferences, global market dynamics, and technological advancements in dairy production. The wider consequences for the dairy industry, such as shifts in market share and potential economic impacts, are also investigated in this paper.

Despite the challenges of falling milk output, the U.S. dairy industry is demonstrating remarkable resilience with the rise in fluid milk and cheese exports. This unexpected trend holds promising implications for producers and consumers, instilling a sense of hope and optimism in the industry.

As the dairy industry negotiates these changes, fast rises in cheese prices have significantly raised the Class III price, underlining the market’s reaction. Examine the elements underlying these patterns and the possible long-term effects on domestic consumption and foreign commerce.

A Surprising Rebound: Fluid Milk Sales Surge Amid Shifting Consumer Preferences

MonthFluid Milk Sales (million pounds)
May 20224,500
June 20224,450
July 20224,470
August 20224,480
September 20224,460
October 20224,490
November 20224,500
December 20224,510
January 20234,520
February 20234,530
March 20234,550
April 20234,600

With a roughly 100 million pound gain and a 0.7 percent leap year-adjusted surge, this unprecedented spike in fluid milk sales highlights a dramatic change in consumer behavior. Rising health awareness and the availability of dairy substitutes have usually been causing fluid milk intake to drop. But this increase might point to changing market dynamics or fresh enthusiasm for milk’s nutritious value.

Dairy ProductChange in Consumption (Percentage)
Fluid Milk+0.7%
American Cheese-1.2%
Yogurt+2.4%
Non-American Cheeses+1.5%
Butter-0.8%
Ice Cream-1.0%

The changes in domestic dairy consumption create a complicated scene for the American dairy business. While butter, ice cream, and American cheese consumption have dropped, fluid milk sales may have increased due to changing habits or knowledge of nutritional value. Growing worries about health, animal welfare, and environmental damage define this downturn.

On the other hand, demand for yogurt and non-American cheeses has surged. Yogurt’s probiotics and health advantages attract health-conscious customers. Non-American cheeses benefit from their superior quality, appeal to refined tastes, and clean-label tendencies.

This difference draws attention to shifting customer demands and the need for dairy farmers to adjust. Stakeholders trying to seize market possibilities in a dynamic economic environment must first understand these trends.

American Cheese Exports Set New Record: A Game-Changer for the U.S. Dairy Market

The U.S. dairy market has witnessed a notable shift in export trends over the past year, which can largely be attributed to evolving global demand and intensified trade relations. Cheese exports, in particular, have set new benchmarks, reflecting both opportunities and challenges in the international marketplace. Below is a detailed table outlining the changes in cheese exports over the past year: 

MonthCheese Exports (Million Pounds)Year-over-Year Change (%)
January 2023605.2%
February 2023584.9%
March 2023657.5%
April 2023709.8%
May 20237211.1%
June 2023688.3%
July 20237510.7%
August 20238012.5%
September 20237811.4%
October 20238213.2%
November 20238514.1%
December 20238815.3%
  • Key Export Markets: Japan, Mexico, South Korea
  • Emerging Opportunities: Southeast Asia, Middle East
  • Challenges: Trade policies, supply chain disruptions

With 8.7% of total output moving abroad, the United States saw an increase in cheese exports between February and April. This fantastic number emphasizes the increasing worldwide market for American cheese. The milestone points to a change in the strategic emphasis of the U.S. dairy sector as producers show their capacity to meet and surpass the demands of foreign markets, therefore implying a future in which exports will be more important economically.

Milk Production Plunge: Unpacking the Multifaceted Decline in the U.S. Dairy Sector 

In examining the shifting landscape of the U.S. dairy market, it’s imperative to consider the nuances in milk productiontrends that have unfolded over the past year. These trends highlight the recent downturn in production and provide a lens through which we can better understand the broader dynamics at play. 

MonthMilk Production (billion pounds)% Change (Year-over-Year)
April 202218.1-0.4%
March 202217.9-0.5%
February 202216.0-0.6%
January 202217.5-0.7%
December 202117.7-0.8%
November 202116.8-0.9%
October 202116.9-1.0%
September 202116.0-1.1%
August 202118.0-1.2%
July 202118.2-1.3%
June 202117.8-1.4%
May 202118.1-1.5%

Adjusting for the leap year, the continuous reduction in U.S. milk production—0.4 percent in April—has lasted 10 months. For the dairy sector, this development begs serious questions.

Many factors are driving this slump. First, dairy farmers have been under pressure from changing consumer tastes that influence demand. Growing demand for plant-based and dairy substitutes is reshaping the market share controlled initially by cow’s milk. Furthermore, changing customer behavior and ethical and environmental issues influence production levels.

The low cow count raises yet another critical question. Modern and conventional dairy states have battled dwindling or stagnating cow numbers. Growth patterns in cow counts have slowed dramatically in contemporary dairy states since 2008; some years even show reductions. This has lowered milk availability, together with a volatile macroeconomic backdrop.

Dairy farmers also face many operational difficulties, such as supply chain interruptions, personnel shortages, and the need for fresh technologies. These problems tax the industry’s ability to sustain past output levels even as manufacturers seek creative ideas.

Dealing with these entwined problems would help to stop the drop in output and guarantee the resilience and sustainability of the American dairy market against changing consumer tastes and financial uncertainty.

Turbulent Trends: How Consumer Values and Supply Chain Challenges Propelled Cheese Prices Skyward

The past year has witnessed significant fluctuations in the dairy market, with particular emphasis on cheese prices, which have experienced rapid increases. This section breaks down the price trends over the past year to provide a comprehensive understanding of the market dynamics. 

MonthClass III Milk Price (per cwt)Cheese Price (per lb)Butter Price (per lb)
May 2022$25.21$2.29$2.68
June 2022$24.33$2.21$2.65
July 2022$22.52$2.00$2.61
August 2022$20.10$1.95$2.50
September 2022$21.86$2.10$2.55
October 2022$21.15$2.03$2.53
November 2022$20.72$2.01$2.60
December 2022$21.55$2.05$2.58
January 2023$20.25$1.98$2.55
February 2023$18.67$1.85$2.50
March 2023$19.97$1.92$2.55
April 2023$20.25$2.01$2.52
May 2023$23.30$2.35$2.70

Many complex elements reflecting more significant market dynamics drove the increase in cheese prices throughout May. The dairy sector has seen a paradigm change as consumer tastes center on health, environmental issues, and animal welfare more and more. These higher ethical standards call for more rigorous behavior, which drives manufacturing costs. A turbulent macroeconomic climate, ongoing supply chain interruptions, and workforce difficulties further limit cheese supplies. Cheese prices skyrocketed as demand for premium dairy products continued locally and abroad, and supply ran low.

The May Class III price, which rose by $3.05/cwt from the previous month, was substantially affected by this price increase. Primarily representing the worth of milk used for cheese manufacture, the Class III price is a benchmark for the larger dairy market. This sharp rise emphasizes how sensitive commodity prices are to quick changes in specific sectors, stressing the cheese market’s importance in the national dairy economy. Dairy farmers must balance growing expenses with remaining profitable while meeting changing customer expectations.

The Bottom Line

The surprising surge in fluid milk sales and record-breaking cheese exports within the changing terrain of the U.S. dairy industry contrasts sharply with the continuous drop in milk output. The 0.7 percent rise in milk sales points to a change in consumer behavior, motivated by a fresh enthusiasm for classic dairy products. On the other hand, American cheese’s demand internationally has skyrocketed; 8.7% of output is exported, suggesting great worldwide demand and a possible new income source for home producers.

Adjusting for the leap year, the consistently declining milk output—now at ten straight months of year-over-year decline—showcases important production sector issues probably related to feed price volatility and long-term changes in dairy farming techniques. Reflecting these supply restrictions and shifting market dynamics, the substantial rise in cheese prices fuels a significant increase in the May Class III price.

These entwined tendencies point to both possibilities and challenges for American dairy farmers, implying a tricky balancing act between satisfying home demand, profiting from foreign markets, and negotiating manufacturing efficiency and cost control.

Key Takeaways:

In an evolving landscape marked by shifting consumer preferences and unprecedented export achievements, the U.S. dairy market has experienced stark contrasts in its fluid milk sales, cheese exports, and milk production. Below are the key takeaways from these recent developments: 

  • U.S. fluid milk sales rose by nearly 100 million pounds, or 0.7% on a leap year-adjusted basis, during the first four months of this year.
  • While domestic consumption of most major dairy products decreased, yogurt and non-American types of cheese saw increased domestic demand.
  • A record 8.7% of total U.S. cheese production was exported between February and April, marking an all-time high for this period.
  • April 2023 witnessed a 0.4% decline in U.S. milk production compared to April 2022, continuing a ten-month trend of lower year-on-year production figures.
  • Cheese prices surged in May, driving the May Class III price up by $3.05 per hundredweight from the previous month.

Summary: 

The U.S. dairy industry has experienced a significant increase in fluid milk sales and cheese exports, despite declining milk output. Fluid milk sales jumped by about 100 million pounds in the first four months of the year, while cheese exports reached a record 8.7% of total output from February to April. This unexpected trend can be attributed to changing consumer preferences, global market dynamics, and technological advancements in dairy production. The wider consequences for the dairy industry include shifts in market share and potential economic impacts. Despite these challenges, the U.S. dairy industry is demonstrating remarkable resilience with the rise in fluid milk and cheese exports. This trend holds promising implications for producers and consumers, instilling a sense of hope and optimism in the industry. However, as the dairy industry negotiates these changes, fast rises in cheese prices have significantly raised the Class III price, underlining the market’s reaction. American cheese exports set a new record for the U.S. dairy market, reflecting both opportunities and challenges in the international marketplace. Addressing these entwined problems would help prevent the drop in output and guarantee the resilience and sustainability of the American dairy market against changing consumer tastes and financial uncertainty.

Learn More:

For further insights into this evolving landscape, consider exploring the following articles: 

U.S. Dairy Exports Surge in April: Record Cheese Shipments and Whey Boost

Explore the remarkable rise in U.S. dairy exports this April, bolstered by unprecedented cheese shipments and significant whey growth. Will this upward trajectory persist amidst global economic changes?

Chart 4 Final

The latest figures from the United States Dairy Export Council (USDEC) reveal a significant achievement-a 3% increase in U.S. dairy exports in April. This rise not only balances out earlier declines but also reduces the year-to-date export deficit to 1.6%. This positive trend is a result of various factors such as increased demand from key markets and competitive pricing strategies, which we are determined to maintain.

ProductApril 2023 Exports (Metric Tons)Year-Over-Year Change (%)Key Markets
Cheese46,27027%Mexico, Southeast Asia, South Korea, Middle East/North Africa, Caribbean, Japan
High-Protein WheyNot Specified26%China, Brazil
Low-Protein WheyNot Specified8%Mexico
Butter and Anhydrous Milk FatNot Specified23% / 100%+Global Markets
Nonfat Dry Milk/Skim Milk PowderNot Specified-2%South America, Caribbean

U.S. cheese exports surged by 27% in April, reaching 46,270 metric tons—the second-highest on record for a month. Mexico set an all-time high with 17,249 metric tons, a 53% increase. Other regions also saw significant gains: Southeast Asia (102%), South Korea (69%), Middle East/North Africa (40%), the Caribbean (24%), and Japan (11%). These figures underscore the solid global demand and competitive pricing for U.S. cheese.

High-protein whey exports grew significantly, nearly tripling to China and rising 66% to Brazil, showcasing increased demand. Low-protein whey also saw gains, up 8% for the year, with Mexico leading at a 79% increase. These numbers highlight the widespread appeal of U.S. whey products.

April saw the first year-over-year increase in butterfat exports since November 2022, highlighting renewed global interest in U.S. dairy products. Butter exports grew by 23%, and anhydrous milk fat exports more than doubled, showcasing the rising demand for these high-value ingredients. 

Even with higher domestic butter prices, U.S. products have remained competitive globally, especially compared to the European Union and New Zealand. This price competitiveness has been vital in boosting butterfat exports, reinforcing the U.S.’s strong and stable position in the global dairy market.

Nonfat dry and skim milk powder exports declined by 2%, driven by reduced shipments to China and Vietnam. Despite this, South America and the Caribbean showed strong growth, helping to offset losses in Asia. This highlights the need for U.S. dairy exporters to diversify their markets to navigate global trade complexities. For more insights, check out global dairy trade predictions. As we look to May, U.S. dairy exports face many opportunities and challenges. The gradual global economic recovery could boost demand for dairy products, and severe droughts in key Mexican milk-producing areas may increase import demand, benefiting U.S. exports to this top market. However, rising U.S. cheese prices reduce the competitive edge over exporters like New Zealand and the EU, potentially slowing cheese export growth. Geopolitical uncertainties also threaten global trade by affecting supply chains, market access, and currency rates. 

U.S. dairy exporters have a promising future ahead. By staying adaptable, leveraging strengths in high-protein whey, and exploring new markets, we cannot only continue to diversify but also expand our reach, opening up new avenues for growth and success.

Key Takeaways:

  • Overall Export Growth: U.S. dairy exports increased by 3% year-over-year, effectively reducing the year-to-date export deficit to 1.6%.
  • Cheese Exports: A remarkable 27% surge in cheese exports, driven by strong demand from Mexico, Southeast Asia, and South Korea, reaching the second-highest volume on record for a single month.
  • High-Protein Whey: High-protein whey product exports rose by 26%, with China’s imports nearly tripling and Brazil’s increasing by 66%.
  • Butterfat Revival: Butter and anhydrous milk fat exports saw their first year-over-year increase since November 2022, growing by 23% and more than doubling, respectively.
  • Competitive Pricing: Despite rising U.S. butter prices, they remained competitive compared to European Union and New Zealand prices, bolstering global demand.
  • Challenges Ahead: While the global economic recovery and severe droughts in key Mexican milk-producing states offer opportunities, rising U.S. cheese prices and geopolitical uncertainties pose potential risks.


Summary: The US Dairy Export Council (USDEC) reported a 3% increase in dairy exports in April, reducing the year-to-date export deficit to 1.6%. This growth is attributed to increased demand from key markets and competitive pricing strategies. Key markets included Mexico, Southeast Asia, South Korea, Middle East/North Africa, Caribbean, and Japan. U.S. cheese exports reached 46,270 metric tons, the second-highest on record for a month. High-protein whey exports grew significantly, with Mexico leading at a 79% increase. Butterfat exports saw the first year-over-year increase since November 2022, highlighting renewed global interest in U.S. dairy products. Despite higher domestic butter prices, U.S. products remain competitive globally, especially compared to the European Union and New Zealand. Nonfat dry and skim milk powder exports declined by 2%, while South America and the Caribbean showed strong growth. However, challenges such as global economic recovery, severe droughts in key Mexican milk-producing areas, rising cheese prices, and geopolitical uncertainties threaten global trade.

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