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US dairy industry eyes international markets

August 26, 2013
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The United States is likely to change the focus of its dairy industry. While at present it is mostly directed toward the domestic market, specialists believe that dairy producers will increasingly look at opportunities presented by external markets.

According to Tim Hunt, global dairy strategist at New York's Rabobank, traditionally the U.S. dairy market was similar to a fortress. Very little went out and almost nothing came in, due to high tariffs imposed by the government. However, in recent years the growth of the U.S. dairy market has slowed down and businesses have had to look elsewhere for profit, especially since prices overseas have reached levels higher than those at home and returns from exports have become more appealing to producers and processors, Hunt explained.

If the industry decides to focus its efforts on the international market the United States will be perfectly positioned to become a global dairy leader, due to the massive scale of its farm operations, low feed costs and lower U.S. dollar, he added.

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Recent data suggests that dairy exports have already started to increase. For example, milk powder exports rose from 300,000 to 500,000 tons in the period between 2007 and 2012, while exports of cheese soared from 100,000 tonnes to over 250,000 tons.

However, Hunt noted that the U.S. dairy industry will have to clear a few hurdles on its way to world domination, such as export-unfriendly regulation and the fact that domestic plants do not make the products that overseas consumers demand.
 

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