Reasons Behind Decade-Long Dairy Export Growth

USDA Economist Jerry Cessna shares factors that led to US dairy export values quadrupling over the course of a decade in a recent publication he co-authored examining the factors in this amazing expansion

Cessna: "The report discusses the increase of dairy consumption in developing countries around the world — particularly Mexico as incomes in these countries has risen they have increased their consumption of dairy products. That has played a big part in global dairy trade. Another thing that we looked at are government policies in both the U.S. and abroad. Changes in policies have increased trade openness and provided opportunities for U.S. dairy exports to become more competitive. We've liberalized trade that was brought about by the WTO in 1995. That served as an impetus for future trade openness. We've had free trade agreements especially NAFTA that served to increase our growth in dairy exports to Mexico. There has been a reduction in elimination in export subsidies — especially for the U.S. and the E.U — this has brought about more trade openness. The U.S. and E.U have both reduced domestic support measures and that has helped the global trade to become more market-oriented."

Despite that dramatic decade increase from 2004 to 2014, there were several factors that lead to a decline in dairy exports in 2015 as Cessna explains

Cessna: "There was weaker global demand for dairy products especially China. We had a stronger dollar, that made exports not as attractive to countries around the world."

He adds that a discontinuation of milk supply quotas in the European Union caused higher production in the EU.