While U.S. dairy product exports are headed for a record year, the ongoing supply chain crisis could cause irreparable harm going forward, dairy industry representatives warn.
First, a look at some topline numbers. According to monthly data released by the U.S. Department of Commerce on Nov. 5, the value of U.S. dairy product exports for fiscal year (FY) 2021 (October 2020-September 2021) hit $7.394 billion, up 13% from FY 2020 and about equal with the previous record high of $7.4 billion in FY 2014. (The USDA and Department of Commerce also calculate the value of exports based on World Trade Organization definitions. Under those calculations, FY 2021 dairy exports totaled $7.319 billion.)
Despite those numbers, current logistical problems pose a permanent threat to U.S. dairy exporters, Mike Durkin, president and CEO of Leprino Foods, said during a U.S. House Agriculture Committee hearing on Nov. 3.
“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”
Durkin’s oral testimony, on behalf of the International Dairy Foods Association (IDFA), is available in a four-hour video of the hearing, beginning at about minute 49:15. His full written testimony is available here.
Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation and take other steps to help U.S. agriculture producers reach their foreign markets effectively. His concerns were echoed by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF).
“The strain of shipping challenges is taking a heavy toll on dairy exporters,” said Krysta Harden, president and CEO of USDEC. “Dairy exporters are working hard to get American-made products to foreign customers in a reliable and affordable way, but the present situation can’t be sustained long term.”
“Dairy depends on exports, a vital part of the total demand for the milk produced every day by America’s hard-working dairy farmers” said Jim Mulhern, president and CEO of NMPF. “We risk damaging foreign market relationships and long-term customers if we cannot better assure efficient export flows.”
A look at September from USDEC
The USDEC provided an in-depth analysis of September 2021 dairy exports in its U.S. Dairy Exporter Blog:
- Volume basis: Compared to year-earlier levels, September export volumes were up across all major dairy product categories, including: nonfat dry milk/skim milk powder (NFDM/SMP), up 16%; cheese, up 20%; butterfat, up 223%; whey, up 5% and lactose, up 6%.
- Value basis: The news on the value side was even…
Read More: Dairy exports headed toward record year but ‘crisis’ ahead