The U.S. exports approximately 15% of farm milk production. The equivalent of about one day’s milk production a week is marketed offshore.
U.S. dairy exports grew from less than a billion dollars in value a year to over $5 billion a year in just the last two decades. Due mainly to lower U.S. farm milk prices, U.S. dairy export sales totaled $4.7 billion in 2016.
The USDA estimates that each $1 billion of U.S. dairy exports generates more than 20,000 jobs and almost $3 billion in economic output at the farm level. At the processing level, each $1 billion of exports supports about 3,200 jobs.
Under the North American Free Trade Agreement (NAFTA), Mexico has developed as the #1 export market for U.S. dairy products. The U.S. exported $1.218 billion in dairy products to Mexico in 2016.
Despite a sharp devaluation of the peso, Mexico alone purchased nearly 50% of U.S. milk powder production in 2016.
Southeast Asia is the second largest export market for U.S. dairy products at $671 million last year.
Canada is our third-largest export buyer at $632 million in U.S. dairy product purchases last year. However, most of Canada’s dairy purchases from us were ingredients for manufacturing products for re-export. Those products are not charged the duty on dairy imports that Canada employs to protect its domestic farm milk quota system. Many of the products Canada manufactures with U.S. ingredients then compete with U.S. products in world markets.
China is, of course, a major potential market for U.S. dairy.
This Administration is encouraged to carefully consider the economic consequence to adjusting existing Free Trade Agreements by involving the Dairy Industry representatives inclusive of both the producer and processor perspectives. The Western States coalition comprised of dairy producers from Washington, Oregon, Idaho, Nevada, California, New Mexico, Arizona, Texas and Utah welcomes the engagement of Administration Officials in matters concerning new and existing Trade Agreements.
