Signposts for 2024 for US exports

The US Dairy Export Council has flagged the key issues that its analysts will be looking at for the next year for dairy import demand and trade, in a blog published online.

Not surprisingly, China is listed as the “first major variable likely to influence the direction of US dairy exports and global markets.” It notes that there is a wide range out outcomes for China’s dairy imports, depending on domestic supply and consumer preferences. The demand there is moving from fresh milk and WMP to cheese, dairy fats and speciality ingredients, the latter three of which are not so easily met by domestic production. 

Mexico saved the day for US exports and is likely to continue to do so, with US suppliers reaching a record high of 631,511 metric tons in milk solids equivalent to the south, making it a 13.5% increase. While economic growth in much of the world sputtered, the Mexican economy outperformed expectations as GDP rose by an estimated 3.2%, according to the IMF. Falling unemployment, a resurgence of tourism, and a wave of foreign investment boosted the desire for consumer products, including dairy. As demand soared, strong economic results drove the Mexican peso to an eight-year high, increasing the purchasing power of Mexican buyers and further bolstering consumer confidence. At the same time, dairy products in the US were moderately priced, creating an ideal buying opportunity, the US DEC noted.  

That being said, 2024 is expected to see more moderate growth rates for the southern neighbour, but the US DEC considered it “relatively bright in a world of uncertainty.” 

Overall, global dairy demand suffered, the Council observed. However, the IMF is predicting higher rates of global growth, to 3.1%, due to easing inflation. 

“Still, despite the obstacles, the global economy as we move into 2024 is not looking quite as bad as we thought. While the obstacles to growth are real, the global economy is weathering inflation better than anticipated, and inflation is expected to continue easing with nearly 80% of global economies anticipating lower inflation this year. Global dairy trade is unlikely to rebound to its pre-inflation level overnight, but growing incomes are a prerequisite to demand getting back on track,” according to the US DEC.