US cheese production up for 18th straight year; exports on the rise

By Hal Conick contact

- Last updated on GMT

Cheese exports have been a boon for US dairy. Photo: iStock - Vaskoni
Cheese exports have been a boon for US dairy. Photo: iStock - Vaskoni

Related tags: Cheese, Milk, Us

The US produced 5.3m MT of cheese in 2015, according to USDEC executives, up 2.2% from 2014.

“It’s risen every year; this will be the 18th straight year it’s increased,”​ Al Levitt, vice president of communications and market analysis at the US Dairy Export Council (USDEC), told DairyReporter.

“This will continue in 2016. All the milk production growth is happening in the Midwest, not in California, and all of that milk production goes into cheese.”

Cheese exports have increased 688% in the US since the year 2000​, a USDEC blog post said. 

DR spoke with Levitt and Angélique Hollister, USDEC vice president, cheese and consumer products on the importance of cheese production in the US and across the world.

DairyReporter: Has the worldwide consumption of cheese risen with the increased production in the US?

Hollister:​ If you take the US market, we are huge consumers of cheese. Consumption has been going up consistently and there is definitely a growing demand overseas. In markets like Asia and other non-traditional cheese markets… there’s been a big increase over the past two decades.

It’s constantly growing with consumers that are moving to the middle class and their income is increasing. More money is spent on food; protein and dairy is where some of the money goes. They’re taking a liking to cheese through the expansion of the western chains [like] Pizza Hut and Domino's. All of the fast casual chains are expanding overseas and a lot of them are expanding in Middle East and Asia and increasing the demand of cheese in these markets.

There is good demand from outside the country, even though we still remain big consumers. The percentage of our exports and of our production has really increased over the past 10 to 15 years.

Levitt:​ As recently as 2006, we exported 1.6% of our cheese. Last year (2014) it was 7.1%. In 2015, it will be 6%.

DR: How long has the US had this advantage in cheese? What started it?

AH:​ We’ve been exporters of dairy products for quite some time as an industry. On the ingredients side, we’ve been shipping [whey and lactose] overseas for some time. For cheese, it’s been more recent. We became more competitive on the world market. [The subsidies Europe had] went away in the past 10 to 15 years and that really made us more competitive.

Other dynamics in the export market around 2008-09 really helped us be more competitive in the export market - the buyers really looked at the US for their cheese needs because we do have the capacity to grow compared to other countries. Their capacity to increase production is limited.  Buyers have been looking at the US as the place to go for getting their needs on cheese purchase. Their needs are growing tremendously as the demand grows.

DR: Is it the US’ capacity or produce? Or perhaps innovation in technology?

AH​: Yes, but it’s also the way we feed our animals. There is some [cow] grazing in the country but most of the country uses feed. It’s actually a lot more consistent than [a country like] New Zealand, who has their herd graze. They don’t have consistent milk production, so they can’t be consistent with cheese production. It enables the US to be a consistent supplier to the world all year round and we can manufacture products out of it. We have the capacity to serve the world and the growing need for dairy and cheese

AL:​ Some of it is just our size. If a drought hits New Zealand, it decimates their whole milk production for a year. We had a drought in California, but our milk production continued to increase because of the Northeast and Wisconsin. Because of our size and diversification, we can be more consistent. Some areas will offset other areas.

DR: What will the market look like moving forward?

AL:​ We’re looking at a more competitive, more of a buyers’ market going into 2016 than we had become accustomed to. It’s going to be a challenge for [the dairy industry]. But when we talk to our members, they stay engaged in the market. They’re still good with consumers, still running promotions overseas. We don’t see a huge slow down at the end-user level in terms of fast food openings in Asia, Latin America and the Middle East. It’s still building.

The long term trend is still positive. Market conditions are pretty competitive​ and they will be for a while.

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