U.S. dairy exports’ strong performance continued in the first half of 2022, following the record-breaking volume and value growth last year. Exports year-to-date are up 27% in value and 2% in volume compared to the same period last year, buoyed by a healing supply chain. In fact, the United States was the only major dairy exporter to see solid growth in exports over the past 12 months (July 2021-June 2022), reinforcing its advantages as the international supplier of choice for dairy products and ingredients.

Despite a global pullback in dairy trade of 3%, U.S. export volume grew 4% over the last 12 months, while the other major exporters, New Zealand and the EU27+United Kingdom saw declines of 8% and 6%, respectively. Australia and Argentina were the only other larger exporters to see growth, but on smaller volumes than the United States. With global dairy demand expected to continue to grow in the back half of 2022, the U.S. is well-positioned to continue providing high-quality dairy products to global customers as other major exporters struggle to keep pace with the growing demand.

Confident in the Face of Uncertainty

Despite the increased macroeconomic uncertainty this year, shipments continue to move with June posting strong growth across many products, building on positive export momentum. The strong June numbers were driven in part by ongoing growth in cheese exports, which grew by 31% year-over-year in June. Exports were equally impressive across other major products, with whey product exports increasing by 23% and lactose exports rising by 22%. Skim milk powder (SMP) was the only major product that saw strong declines in June driven primarily by the continued absence of China from the global market.

Year-to-date (January-June) U.S. export highlights include:

• Cheese: Exports increased 17%, reaching 229,751 MT and on pace to surpass the previous annual record
• Lactose: Exports grew 12%, reaching 220,992 MT
• Whey Ingredients: Exports up 1%, reaching 321,797 MT
• Milk Protein Concentrate: Exports rose 3%, reaching 21,695 MT
• Skim Milk Powder: Exports down 8%, but were nearly 20,000 MT higher than 2020
• Butterfat: Exports climbed 43%, reaching 38,107 MT

A Key Player for the Remainder of 2022 and Beyond

This positive export growth for U.S. Dairy is expected to continue. While U.S. milk production has not seen strong growth over the past year along with other major exporters, the challenges to growth in the U.S. are largely temporary while other major exporters like New Zealand and the EU are facing both temporary challenges as well as are more structural obstacles to milk production growth. As those temporary challenges abate for both the U.S. and others, the structural challenges (increased environmental regulation, water use regulations, etc.) faced by New Zealand and the EU will continue to limit their production growth while the more favorable production environment in the U.S. allows for a return to strong milk production growth moving forward. This ensures high-quality, U.S. milk is available for processing into delicious, nutritious and functional dairy products and ingredients, which is key to fueling exports in the second half of 2022 and beyond.

The U.S. herd is showing signs of growth after the dramatic contraction in 2021 which was largely driven by high costs of inputs and labor shortages. U.S. dairy farmers produce more milk per cow, and more components per liter of milk – such as butterfat, protein, and other skimmed solids – compared to any other country, thanks to impressive technological innovations, improvements in genetics and enhancements in feed rations.

As global demand increases, and major exporters including the EU and New Zealand continue to face structural limitations such as climate, land and water resources and feed input costs, U.S. Dairy is ideally positioned to be able to supply high quality, sustainable dairy products and ingredients on a competitive and consistent basis.

Visit ThinkUSAdairy.org and follow our LinkedIn business page for further information on U.S. Dairy and inspiration for innovation.