July 1, 2014
US aims China''s growing appetite for dairy products
Surging demand from China has been helping offset the decline in domestic dairy consumption in the US, China Daily reported.
In the last 10 years, though US dairy consumption has been slowly growing at about 0.5% per year, milk production has been rising at about 1.5%. However, the good news is that the difference is going overseas, especially China.
According to Jay Waldvogel, senior vice-president of strategy and global development of Dairy Farmers of America, "The big change from the US perspective is that their (China''s) appetite has gotten to a size where it''s a matter of making certain they have certain access to enough products, or being certain they have access to a diversity of supply bases," he said to China Daily. "Their attention has moved much more aggressively, proactively to supply in the last few years."
New Zealand, whose dairy products make up the majority of China''s imports, suffered a drought last year, pushing up milk prices to record highs. As a result, China is trying to diversify import sources and reduce dependence on New Zealand. The US exported over US$700 million worth of dairy products to China in 2013, up significantly from the US$116 million in 2006, according to US Dairy Export Council.
China''s surging demand for dairyis a combination of several factors, the first of which is that China''s growing middle class and increasingly urbanised population consume more dairy products. The Chinese government has also been introducing dairy into school meals.
Meanwhile, China''s food-safety record dented local consumers'' confidence in domestic products, driving up imports from western countries which have good reputation for making high-quality food.
Tapping into China''s increasing trend of importing dairy from overseas, the US has been trying to get back to whole-milk powder market, which the country has historically been absent from. The Dairy Farmers of America opened a new whole-milk powder plant in Nevada. The ultimate goal for its establishment, according to Waldvogel, is produce milk products for the Chinese market.