What It Will Take to Move U.S. Dairy from No. 3 to No. 1 in Exports

While U.S. dairy exports have grown steadily since the USDEC's founding in 1995—when only 3-5% of the country’s dairy production was exported—the U.S. now exports between 16-20% of its total production. Yet, as Harden explains, much more is needed to become the world leader in dairy exports.

Capitalizing on Growth Opportunities

Harden highlights the global demand for dairy, particularly in regions where local production is insufficient to meet nutritional needs. U.S. dairy farms, located in every state, have become more technologically advanced, enhancing productivity and sustainability. This positions the U.S. as a competitive player in the global market, with ample natural resources like land and water supporting large-scale dairy operations.

Key Strengths of U.S. Dairy

Harden believes that the U.S. has several strategic advantages over its competitors. These include government support in the form of incentives and assistance programs, particularly through the U.S. Department of Agriculture (USDA). The USDA plays an active role in promoting U.S. dairy products abroad and opening new markets. This support contrasts with the regulatory hurdles that some competitors face in their home countries, which Harden suggests may even push some foreign dairy producers out of business.

Additionally, younger generations are showing renewed interest in the dairy industry, which Harden views as a positive sign for the future. This new wave of enthusiasm could drive innovation and growth within the sector.

Challenges to Overcome

Despite these strengths, several challenges must be addressed to push U.S. dairy to the top spot. One significant issue is the protectionist policies and non-tariff barriers imposed by some countries, which restrict U.S. dairy access to certain markets. Harden emphasizes the need for the U.S. to work closely with foreign governments and processors to overcome these barriers and secure trade agreements that facilitate dairy exports.

Another challenge is the consolidation within the U.S. dairy industry. While consolidation has allowed for larger farms and greater production efficiency, it has also led to the decline of smaller dairy operations. Many small farms struggle to survive without supplementary income from off-farm jobs, and this trend is expected to continue. Nonetheless, U.S. dairy production has remained stable or even increased due to advancements in efficiency and technology, which have helped farmers maximize output.

Strategies for Success

To become the world’s top dairy exporter, the U.S. will need to continue investing in technological advancements that enhance sustainability and production efficiency. Additionally, efforts to educate international consumers, retailers, and food service providers about the benefits and uses of U.S. dairy products will be critical. Harden stresses the importance of building relationships in foreign markets, which includes being present on the ground, engaging with consumers, and ensuring that U.S. dairy products are well-positioned in both retail and food service sectors.

The U.S. dairy industry will also need to address the concerns of communities near dairy farms, particularly as urbanization encroaches on rural areas. Harden notes that educating the public about the realities of dairy farming, including waste management and production practices, will help maintain support for the industry.

Path Forward

While challenges remain, the U.S. dairy industry is well-positioned for growth, with strong governmental support, a solid foundation in sustainability, and a commitment to innovation. By addressing market access issues, educating global consumers, and continuing to improve production efficiency, the U.S. has the potential to surpass New Zealand and the European Union to become the world’s leading dairy exporter.