By Merle McNeil
U.S. cheese shipments to China, South Korea, Mexico and Japan have soared and the broader outlook looks promising as the world's growing love affair with cheese continues.
Not all are wearing orange, wedge-shaped, foam hats yet. But the way major cheese importers are buying cheese these days suggests they are increasingly walking the path to become what are known affectionately in Wisconsin as “cheeseheads.”
In 2016, cheese exports from the five leading global dairy traders—Argentina, Australia, the European Union (EU), New Zealand and the United States—increased 5 percent to a record 1.66 million metric tons. And they are picking up steam.
Over the four months from March-June 2017, exports from the top five grew 10 percent from the same period the previous year. Cheese shipments to China, South Korea and Mexico increased more than 25 percent each, while exports to Southeast Asia and Japan jumped 16 percent and 8 percent, respectively.
The main beneficiary for that four-month period was the United States, which boosted exports 32 percent compared to the previous year—a welcome shift after significant cheese volume declines in 2015 and 2016.
That is very good news for U.S. cheesemakers. But in the years ahead, in order to ensure a healthy U.S. dairy industry, we will need to see more consistent sustained expansion of cheese exports—not 32 percent, but annual export volume growth of greater than 10 percent per year.
USDEC estimates the U.S. dairy industry needs to increase U.S. dairy export volume from about 15 percent of the annual milk supply to around 20 percent—an effort we are calling The Next 5%—to maintain strong overall U.S. dairy industry growth.
Increasing cheese exports by around 200,000 metric tons over the next five years is a critical component to achieving that goal.
While such a gain is ambitious, given global dietary trends, we believe it is achievable.
USDEC research suggests global cheese imports will increase more than 500,000 metric tons by 2021. U.S. suppliers essentially would need to win about 40 percent of that additional volume to get an additional 200,000 metric tons. And therein lies the challenge.
To reach that plateau, the United States will need to target the highest growth regions (not necessarily regions where we are traditionally strong in cheese) with products suited to their particular consumer palates (not necessarily products we are accustomed to exporting).
USDEC estimates more than half of the additional 200,000 metric tons will need to come from North Asia (China, Japan, South Korea) and the Middle East/North Africa (MENA)—regions currently dominated by U.S. competitors. If the industry is to get to The Next 5%, it must start exporting more cheese to those two regions. And it must broaden its portfolio to cheese categories and varieties where the United States currently lags its competitors.
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