Ten months into 2024, U.S. dairy exports were on track for another strong year, supported by ongoing growth in existing markets and expansion into less familiar regions.
“For our industry to grow and to continue to be productive and efficient, we need to have markets outside of the U.S.,” says Krysta Harden, president and chief executive officer of the U.S. Dairy Export Council (USDEC). “Every year, we’re growing in our sophistication and our approach to exports … and I’m really hoping 2024 is the springboard into a really good 2025.”
In USDEC’s latest report at the time of this writing (Dec. 5, 2024), year-to-date volume through October 2024 remained up 0.6% (on a milk solids equivalent basis), while value was recorded at $6.918 billion. A key partner in this record year is the North American ally Mexico. The country has become the U.S.’s greatest export partner. Despite steady expansion of Mexico's domestic milk production, demand growth continues to drive import demand. Mexico annually faces a dairy product deficit of 25% to 30%, and the U.S. supplies more than 80% of that shortfall, according to a report published by CoBank.
Other notable partners include Canada, China, the six major dairy buying countries of Southeast Asia region and many Central American countries, including Guatemala, Honduras and Costa Rica, where the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) has provided U.S. suppliers a competitive edge over competitors in Europe and New Zealand.
“That diversification is something that’s so key,” Harden says. “In any given time of the year, based on currency, on inflation, on general economy issues, different markets are buying more or less. And we know we have to be consistent, build up that trust, that information about the quality of our products, and the availability and variety that shows our commitment as a supplier.”
Harden stresses the importance of diversifying the U.S. dairy export market space, using the COVID-19 pandemic as an example of why.
“The economic recovery took a lot longer (after COVID-19) in many locations where there’s just not the income, the support from government for many consumers. In turn, they restrained spending and pulled back,” she says. “We learned from that and we became better in other parts of the world, not just in locations and geographies but also with our portfolio of products.”
Americans, Mexicans and many Latin American communities often incorporate cheese into their diets.
By the middle of this year, almost 20 million pounds of new milk is expected to be flowing through new processing plants, according to a report by CoBank.
“There’s a lot of cheese production coming online,” Harden says. “We can be competitive, I believe, in a number of these markets. The stars are aligning and I’m hopeful for a good 2025.”
Other communities, such as those in Asia, favor dairy powders, proteins, lactose and whey. Part of USDEC’s mission is to assist regions of the world that use U.S. dairy ingredients and incorporate them into their daily use and cultural favorites.
“A lot of our efforts are helping markets understand dairy when it’s not as common and not as well-known,” Harden says. “A recipe can still be your grandma’s favorite recipe, but it can be healthier with the use of U.S. dairy.”
U.S. dairy exports on the horizon
Longstanding trade partnerships are expected to continue in the new year, including Mexico, Canada, Singapore, among others. At the same time, U.S. dairy has every intention of expanding its footprint into underdeveloped markets across the globe, some of which the groundwork was laid in 2024 and previous years: Peru, Colombia, Chile, the Middle East/North Africa, as examples.
“I feel energized about next year because of how we dealt with problems this year, (bird flu), for instance, inflation around the world, currency issues, change in political parties in key places,” Harden says.
One region, in particular, that Harden is eager to see developed is Sub-Saharan Africa. A region of the world that has the fastest growing population but also does not produce enough dairy to sustain the population, the 54 countries that make up Sub-Saharan Africa would benefit greatly from a partnership that introduces U.S. dairy products.
This region is one that will take time and effort to develop to its full potential.
“We’re just starting our efforts there. I may not be around when we see the results of this, but we will be a major player in these markets,” Harden says. “Maybe it’ll take 10 years, maybe 20. Where we’re at with this region is where we were at in Southeast Asia 20 years ago.
“There’s a dance and steps to the dance, and there are no shortcuts,” says Harden about developing dairy export markets. “You have to make the investment.”
Market development is a team effort that begins with the USDEC Strategic Insights department looking at consumer needs and the overall climate of the intended new market. Then, USDEC's Economics team reviews inflation, currency, buying power and tariff and non-tariff barriers, followed by the Market Access and Regulatory Affairs team examining the requirements to enter into that market. Trade missions are also included to conduct on-the-ground intelligence work, such as meeting with potential buyers.
“We bring all of those elements together to create an entire picture about a market,” Harden says. “These teams help us set our priorities and our approach. It’s those foundational efforts that prepare us to be competitive in any given market.”
The path to a new market for U.S. dairy exports is lengthy and costly, but consistently showing up as a major competitor in the global marketplace with high-quality dairy products has set the stage for the industry and its producers to prosper in the future.
“As we’ve matured as an industry – an export industry – we’ve been really aggressive, assertive and ready to go head-to-head with any country and prove we do have the best, most nutritious, high-value, high-quality products in the business,” Harden says. “And really, it’s all thanks to farmers who invest in and trust USDEC to represent them all over the world.”
