Posted: 02.17.2010

The crash of global dairy markets in mid-2008 put U.S. exports on course for a decline in 2009, ending a streak of six straight years of expansion.

Dairy export sales totaled $2.32 billion last year, down 39% from 2008’s record level, according to analysis of government trade data conducted by the U.S. Dairy Export Council (USDEC). However, most of the downturn reflected lower world prices; overall export volume was off just 16%, at 2.178 billion lbs. of milk solids (total-solids basis), says USDEC. Export volume represented 9.3% of U.S. milk production in 2009, down from 11% in 2008 and 9.8% in 2007.

After struggling through the first three quarters of the year, U.S. export volumes were up 15% in the fourth quarter. For the full year, volumes of milk powder, butterfat and cheese were lower, while shipments of whey proteins, lactose and fluid milk were higher.

By the end of 2009, U.S. exports displayed far more resilience than forecast in January, and the persistent sales efforts of many value-added exporters does mark a further maturation of the U.S. industry,

 With the ever-present volatile markets, USDEC projects overall U.S. dairy export volumes to increase 7% to 12% in 2010, as global demand cautiously recovers, world commodity prices sustain most of the strength shown at the end of 2009, and U.S. suppliers remain engaged with their overseas customers.

 Large inventories from Europe continue to hang over the market, but milk production in Oceania is forecast to decline in the 2009/10 marketing year, EU and U.S. milk output is trailing year-ago levels as well and the European Union has suspended export subsidies for the time being. All of which should support historically strong world markets in 2010.

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