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U.S. dairy exports post third straight record year

CONTACTS:

Jerry Brown, USDEC
PHONE: (703) 469-2363

ARLINGTON, VA - U.S. dairy exports set new volume and value records again in 2022 despite rampant inflation and a host of other challenges to international trade. It was the third straight record year for volume and the second for value.

Export volume on a milk solids equivalent (MSE) basis increased 5% to 2.4 million metric tons (MT). Export volume in 2022 was equivalent to 18% of U.S. milk produced last year, also an all-time high.

Export value finished the year up 25% to $9.6 billion—the first time it has ever crossed the $9-billion mark.

“We’ve had three consecutive years of record U.S. dairy exports while facing some of the strongest dairy export headwinds that we’ve ever seen,” said Krysta Harden, president and CEO of the U.S. Dairy Export Council (USDEC). “Last year, we saw historic global inflation, slowing economic growth, lingering supply chain challenges and severely reduced Chinese demand. U.S. dairy export performance under those conditions is a testament to U.S. suppliers’ commitment to global markets and also to the value consumers in those markets have come to place on U.S. dairy products.”

The United States continued to assert itself as a growing player in international dairy trade. Through 11 months, it had increased its global market share by 2 points to 25% (full-year results are unavailable until the European Union reports December data). The U.S. set annual export records in cheese, whey and lactose. U.S. cheese shipments were particularly notable, rising 12% to 451,370 metric tons (MT) or nearly 1 billion lbs.

“The U.S. dairy industry didn’t get to this point overnight. It’s taken more than two decades of hard work to reach it—work strengthening the global reputation of the U.S. as a reliable supplier of high-quality dairy products, building relationships with overseas buyers, promoting dairy consumption in high-potential markets, and investing in people, products and infrastructure specifically to serve the varying needs of consumers from Tokyo to Dubai to Lima," Harden said. 

Here are some of 2022’s highlights:

  • The United States increased cheese sales in a truly global fashion in 2022, posting sales gains across continents. Growth highlights include: Mexico +18%; Middle East/North Africa (MENA) +41%; Japan +17%; Central America +17%; Caribbean +25%; South Korea +9%; Australia +14%; and Colombia, +28%.
  • Mexico became the first $2-billion U.S. dairy export market as sales rose 37% to $2.5 billion.
  • Mexico was the No. 1 U.S. market in volume as well, with exports up 9% to 556,497 MT. Better-than-expected economic growth—five straight quarters of GDP gains through December 2022—helped drive a demand rebound. A strengthening peso helped affordability, particularly in the back half of the year. U.S. cheese, nonfat dry milk/skim milk powder (NFDM/SMP) and butterfat sales all set records to Mexico in 2022. U.S. cheese shipments to Mexico rose 18% to 123,579 MT; NFDM/SMP sales jumped 6% to 359,433 MT; and butterfat increased 340% to 14,461 MT.
  • The top U.S. markets by product in 2022 were: Mexico accounted for 27% of U.S. cheese exports, 43% of U.S. NFDM/SMP sales and 30% of U.S. MPC; China accounted for 30% of U.S. whey sales and 26% of U.S. lactose; Canada represented 43% of U.S. butterfat sales; and Taiwan accounted for 38% of U.S. fluid milk and cream exports.
  • U.S. suppliers had their best year for butterfat exports since 2013. Sales rose 43% to 81,721 MT, led by triple-digit gains to Canada and Mexico. U.S. butterfat shipments to Canada more than doubled (+18,345 MT), while exports to Mexico grew more than four-fold (+11,173 MT). U.S. suppliers also saw strong increases to South Korea (+153%, +5,253 MT) and Bahrain (+38%, +2,457 MT).
  • U.S. milk protein concentrate (MPC) exports increased 16% to 47,434 MT, led by growth to Mexico (+2,902 MT), Southeast Asia (+2,746 MT) and Egypt (+2,644 MT).
  • U.S. whey sales were down through the first five months of the year before logging seven consecutive months of double-digit year-over-year growth. The decline in the first five months was largely due to significantly reduced Chinese demand. Chinese purchasing began to rise midyear as domestic pork prices rallied (whey is heavily used in pig feed in China) and U.S. whey prices grew more competitive. U.S. whey exports to China ended the year up 10% (+26,406 MT). U.S. whey shipments to Southeast Asia, the No. 2 U.S. market, grew 6% (+7,713 MT) in 2022. Exports to Canada increased 43% (+17,008 MT) and South America rose 56% (+8,833 MT).
  • U.S. exports of high-value whey protein concentrate with 80% protein or more (WPC80+) were flat, but that was due primarily to muted demand from China (which accounted for nearly a quarter of U.S. WPC80+ volume in 2021) and a sharp decline from the UK. But the United States saw some encouraging market diversification for high-value whey in 2022. Japan took over as the top market with U.S. shipments up 33% (+3,370 MT), while sales to Brazil (+58%, +1,459 MT) and Southeast Asia (+34%, +1,445 MT) also shined.
  • After two years of record volumes, U.S. NFDM/SMP exports declined 6% in 2022 to 827,313 MT. While falling short of 2021, it was still the second most NFDM/SMP ever shipped in a single year by the United States. Besides posting a record year in Mexico, U.S. suppliers also recorded strong gains to Malaysia (+8,499 MT) and Central America (+8,305 MT).
  • Southeast Asia remained the second-largest U.S. market in volume and value terms. However, limited U.S. NFDM/SMP supplies in the first half curtailed overall dairy shipments to the region. U.S. cheese, whey, MPC and lactose shipments to SEA grew collectively by more than 12,000 MT, but a nearly 30,000-MT fall in NFDM/SMP led to an overall decline in volume. Despite the decline, SEA accounted for 19% of U.S. export volume (and 35% of NFDM/SMP sales).

“Every year can’t be a new record, and we are bound to have some down years. But over the long term, overseas demand for U.S. dairy has risen for the last two decades and we believe it will continue to increase moving forward,” said Harden. “The rising global population, the growing middle class and the need for sustainable, affordable nutrition will continue to drive dairy consumption growth. And our biggest competitors—the European Union and New Zealand—are facing challenging supply outlooks and government policies limiting their capacity to grow.”

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The U.S. Dairy Export Council is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe. The U.S. Dairy Export Council prohibits discrimination on the basis of age, disability, national origin, race, color, religion, creed, gender, sexual orientation, political beliefs, marital status, military status, and arrest or conviction record. www.usdec.org.