US dairy demand strong in exports, says USDA

The US Department of Agriculture has reported that international demand for US dairy products remained strong in 2013, with exports reaching another record. “Most dairy products had double digit increases in exports with cheese increasing almost 22%, nonfat dry and skim milk powders increasing 25%, and butter increasing 87%,” according to Uthra Raghunathan, agricultural economist, AMS-Dairy Programs at USDA. “On a fat basis, exports increased by 3.6 billion pounds.”

During the year, prices for the dairy products were highly volatile, with butter and cheese showing patterns that contradicted the usual seasonality. Raghunathan predicts lower costs with a 4.5 million pound increase in supply, due to farmers obtaining more milk per cow. The number of cows is also set to increase by about 0.3%. “The projected growth in 2014 is modest compared to the growth seen historically from the 2000s,” he notes.

That being said, “The US is well positioned to play a major role in supplying international market but expected increases in production by competing exporters is expected to intensify competition in the coming year,” Raghunathan says. Exports may decrease somewhat, but prices should remain strong for products such as cheese and butter