Can the U.S. Keep Its Dairy Export Advantage?

We’re excited to have Will Loux, senior vice president of global economic affairs for the U.S. Dairy Export Council, join us to share his presentation of the future of U.S. dairy exports.

For years, the U.S. dairy export portfolio has leaned heavily on nonfat dry milk, skim milk powder, lactose and lower-protein whey products.

But our exports are changing.

In the latest episode of The Milk Check, host Ted Jacoby sits down with Will Loux to break down the changing U.S. export picture.

In this episode, we cover:

Why U.S. dairy exports are moving toward cheese, fats and higher-value proteins

How domestic protein demand is pulling skim solids away from dryers

Why more cheese may be produced partly to create additional whey protein

How exports are absorbing a larger share of new U.S. cheese production

Where Latin America offers room for additional cheese growth

What it will take for U.S. butter exports to become more consistent and profitable

The U.S. has the milk. It has new processing capacity. And it is capturing a growing share of international cheese demand.

But growth creates new challenges. Are you ready to meet them?

Listen to The Milk Check episode 104: Can the U.S. Keep Its Dairy Export Advantage?

Also available on: Amazon Music, Apple Podcasts, Spotify, and YouTube.

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Transcript:

Ted Jacoby III: [00:00:00] Coming up on the Milk Check.

Will Loux: What I’ve heard from folks in Europe and elsewhere is how do they manage the U.S. tsunami of exports that’s coming? And I think that, at the Export Council, it makes me excited, but it does mean we need to keep our strategies current.

Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in.

Ted Jacoby III: Today, we are very excited to have Will Loux, Senior Vice President of Global Economic Affairs for the U.S. Dairy Export Council joining us.

A few weeks ago I saw a presentation that Will gave that talked about where the U.S. dairy industry is going, especially from an international perspective. It was an absolutely fantastic presentation, and I couldn’t help but think that just this presentation alone would be an absolutely fantastic topic for our podcast.

I have a bunch of our traders joining us, many of our usual suspects, including:

Ted Jacoby III: Diego Carvallo, Joe Maixner, Miguel Aragon, Mike Brown, all from our trading team.

Guys, thanks for joining us.

Will, thank you so much for joining us. It’s great to see you again.

Will Loux: Good to see you, Ted.

Thanks for having me on.

Ted Jacoby III: Excited to have all of our listeners listen to this. Will, the floor is yours.

Will Loux: Perfect. Well, thank you for having me, Ted, and glad to have so many people on here and another audience for this presentation. I’ve got some slides. For those of you like me who will listen to this podcast usually while driving, feel free to go check it out on YouTube. I am also gonna do my best to reference what is in those slides as best I can remember to do so.

But what is the future of U.S. dairy exports? What we’ve seen, really over the last twenty-five years, has been this tremendous, consistent growth, in aggregate U.S. dairy exports.

We just got May data, and what we saw was on an annualized basis over the last twelve months, the U.S. actually set a new record again. So our exports have never been higher than they are today. But that said, our exports look fundamentally different than what they did 20 years ago. Before, when we were getting started with exports, 75, 80% of our exports were really driven by nonfat dry milk, and low-protein whey products, and lactose. That’s been the vast majority of our portfolio for much of this time, and we’ve had a few different eras where we’ve seen U.S. cheese exports picked up, e