U.S. Dairy Industry Thrives Amid Historic Growth in Domestic Consumption and Exports

By
Tanya Eadie
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56

The U.S. dairy industry has entered a historic growth phase, with domestic dairy product consumption reaching its highest levels in over 60 years and exports nearing record highs, according to a recent report by CoBank. This surge reflects a bullish outlook for the industry, bolstered by global shifts in dairy production and increased investment in U.S. dairy processing capabilities.

Key Insights from the Report

  1. Historic Domestic and Export Growth
    • U.S. dairy consumption has soared, and exports now account for 16% of milk produced, with Mexico as the top destination.
    • U.S. dairy exports to Mexico grew to 1.38 billion pounds on a milk solids basis in 2023, representing over one-fourth of all U.S. dairy exports.
  2. Global Market Dynamics Favor U.S. Dairy
    • Production constraints in the European Union and New Zealand—the top two global dairy exporters—have opened opportunities for U.S. growth.
    • The U.S. now stands as a strong third in global dairy exports, poised to expand its market share.
  3. Unprecedented Investments in Processing
    • $8 billion in new dairy processing assets are set to come online by 2026, with $4 billion allocated to cheese plants and whey facilities.
    • By mid-2025, these investments are expected to process nearly 20 million pounds of new milk daily.
  4. Mexico: A Vital Growth Market
    • U.S. dairy exports to Mexico cover over 80% of the country’s dairy product deficit, driven by strong demand for milk powders, cheese, and whey proteins.
    • Free trade agreements, including NAFTA and the United States-Mexico-Canada Agreement, have fueled a 42% growth in U.S. dairy sales to Mexico over the past decade.
  5. Future Opportunities
    • Expanding free trade agreements with markets such as China, Japan, and Southeast Asia could unlock further growth potential.
    • As Mexico’s middle class grows, its demand for high-quality dairy products is expected to rise, offering continued opportunities for U.S. exporters.

Read the Full Report

For a detailed analysis of these trends and insights, access the full CoBank report here: CoBank Report.

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