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One in every six gallons produced by US dairy farmers is turned into dairy products for export abroad.
Mexico remains the primary market for US dairy exports, having experienced increased imports during 2023. Although international markets can be volatile, U.S. dairy exports appear promising for years to come.
Trends
The dairy industry remains beset with labor shortages. Processors have difficulty recruiting workers and may need to reduce shifts, which has a direct impact on production and profitability. Therefore, support of labor solutions must remain a top priority of future dairy policy initiatives.
Overall exports remain strong despite global market uncertainty. The U.S. dairy industry experienced modest growth while other major dairy exporters like New Zealand and EU27+UK experienced decreases.
These trends reflect cautious confidence in the dairy sector. Domestic demand continues to expand due to aggressive marketing and increased restaurant visitation, and milk prices are gradually returning to stability. Maintaining this rate of growth requires continuous market analysis and adaptable strategies; labor constraints will continue to impede profitability; producers may consider alternative revenue streams such as agritourism as a buffer against rising feed costs and reduced milk output. By prioritizing efficient business practices and improving profitability, they can weather these current market conditions more easily.
Predictions
Dairy farming is an intricate industry spanning multiple nations that impacts countless lives - both human and otherwise - along with associated ecosystems. Although dairy farming can be resilient, certain challenges could negatively impact milk production, distribution and consumption.
COVID-19 caused considerable disruption within the industry and reduced consumer demand across several markets, which may have long-term ramifications on market trends. Furthermore, several major dairy producers are cutting cattle numbers to meet future greenhouse gas emission goals.
These factors could impede dairy exports from Mexico and China in 2023, yet cheese exports should see continued growth as manufacturers invest in technical developments. Meanwhile, high milk prices and cull rates are exerting pressure on return prices to dairy farms, while rising freight costs make finding markets outside Europe for milk difficult in early 2023; hence establishing an export strategy will be integral for dairy business success.
Challenges
COVID-19 has presented all industries with unique challenges, dairy included. Yet its response has shown remarkable resilience and creativity - including supply chain changes and strategic adaptations such as focussing on waste reduction efforts, sustainability efforts, and new packaging options.
Dairy producers must also consider how to stay profitable amidst consolidation and an uncertain demand environment, by prioritizing efficiency and yield maximization as well as creating flexibility in production, such as switching from rigid plastic tubes to flexible ones like Dorner's AquaPruf Ultimate conveyor system. A conveyor system such as this helps eliminate waste while optimizing product flow throughout the production process.
USDEC economists anticipate that solid demand for dairy ingredients in key growth markets will provide sufficient momentum for dairy exports this year and beyond, supported by world population growth, rising middle classes, and the need for sustainable, affordable nutrition. To make this possible, an efficient export supply chain must be in place.
Opportunities
The global dairy market is expanding at an incredible rate, creating opportunities for Dairy foods exporter in Japan and their customers alike. But accessing this global market requires more than knowing which products to sell; it requires understanding a complex web of technical requirements from international health and safety regulations to packaging restrictions that must be navigated successfully in order to gain entry.
NMPF's Trade Policy Team works to minimize this risk from the outset by increasing export demand through USDEC's Market Access and Regulatory Affairs Team as well as programs like trade shows within specific countries or regions. They work closely with U.S. lawmakers to ensure trade deals and market access opportunities align with dairy farmers' priorities - hence our strong support for Trade Promotion Authority reauthorization; TPA provides flexibility needed by dairy communities like ours in expanding equitable trading partners while realizing gains we've made in today's globalized economy.
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