U.S. looks abroad to make up for domestic dairy losses
Domestic dairy sales continue to struggle amid the coronavirus but exports have remained strong as the U.S. dairy industry has continued to look to international markets to help bolster demand.
The industry is looking for any reasons to remain optimistic in a year that started with plenty of optimism.
“USMCA, China Phase 1 Agreement, Japanese Phase 1 Agreement, we saw corresponding activity in the export markets that suggested this was going to be a good year,” Dairy Export Council President, Tom Vilsack said. “Virus comes, total disruption of food services globally, and impacts and effects everywhere.”
Certain products are more at risk from COVID-19 challenges.
“The area that I’m deeply concerned about is on the powder side,” Vilsack said. “Not only did we see significant reduction of possibilities in Mexico, but also in Japan; also with the Europeans having an oversupply.”
Vilscak also has deep concerns about Mexico’s economy, which was weakened because of international oil disputes. Mexico is the United States’ No. 1 market for U.S. dairy.
Challenges with major trading partners has highlighted the need to grow in new markets. For instance, the growing middle-class consumers in Asia, which is projected to have a sharp increase in the next 10-15 years.
“We’re going to continue to sell a lot of product here in the U.S. and continue to be obviously very domestically focused, obviously continue to pay a lot of attention to our No. 1 market in Mexico, we need to complement that with expanding efforts in Asia, starting with Southeast Asia,” Vilsack said.
Despite disruptions from the coronavirus outbreak, dairy exports have been higher than 2019 levels, for the past seven months. The EU recently proposed more trade negotiations with the U.S., including a joint agenda covering everything from aircraft subsidies to agricultural products.