Expanding International Market Opportunities for Dairy
The U.S. dairy industry relies on exports and is constantly finding ways to find market opportunities overseas. Alex Peterson, a dairy farmer from Trenton, Missouri, is chair of the National Dairy Research and Promotion Board. At Farm Journal’s recent MILK Business Conference, Peterson said exports are the key price driver for U.S. dairy.
“More milk than Wisconsin produces in a year is exported by the U.S. So, we’re talking about a lot of milk leaving the door. And that’s what’s holding up the cheese and the powder price, which is Class III and Class IV. So, it doesn’t matter if you’re in Wisconsin in the cheese market or where I’m at in a fluid market, that’s what’s determining our price. So, we have to keep those doors open. And today, the added struggle, everyone wants our product, but getting it there is kind of the struggle for the moment but finding new and innovative ways to make sure that happens.”
However, the U.S. does not have the competitive advantage that New Zealand and the European Union have in being closer to those export markets.
“But that’s something that we’ve been proving that we can overcome to some degree. And I think that we will continue, especially if you look at the EU, milk production is declining as we speak, New Zealand is running out of territory, they can’t expand much. So, these companies overseas, just like U.S. dairy, we have this horizon that we know we want to grow and we want to expand, we want to keep doing better. They know that we’re the only supplier that can be able to do that long term. And so, that also helps as we build these relationships.”
While dairy groups help export dairy products, they also help companies overseas to use U.S. dairy products.
“That’s part of this beautiful partnership or USDEC is a part of DMI, which is good that everything’s kind of under one umbrella. It’s also good that we get to piggyback off each other and so as USDEC goes out and is seeking market access and helping to cut regulatory burdens for businesses looking to export, they also are kind of a business development rep of a ways, say, hey, this is a company that’s looking to do cool things, they just need some partner, whether it’s some support, some insights, all these things we’ve been doing with the McDonald’s, the Taco Bell’s, the U.S., we can replicate that. And so, those partnerships work really well overseas, just like they do here.”
A requirement for the partnership is the companies involved overseas must use U.S. dairy products. U.S. Dairy farmers export 18 percent of milk to overseas markets.