The global dairy market downturn has hurt processors and farmers around the world. US dairy exports declined in 2015, ending a streak of five straight years of expansion.
At the US Dairy Export Council (USDEC), two questions are frequently asked. What’s causing this market downturn? When will it end?
USDEC president, Tom Suber, recently gave a presentation that shed light on the situation with these seven revealing charts:
1. What goes up must come down. All markets have up-and-down histories. The chart below shows how US exports have increased over the last 20 years to the point where nearly one out of seven tankers is sent overseas (on a total milk solids basis). But we are now in what Suber describes as the “Bearing Down” period.
Some good news: Long-term demand looks strong
Despite the current downturn in global dairy markets, the long-term outlook looks much better.
A recent US Dairy Export Council report said the fundamentals driving long-range global dairy trade demand should remain positive through to 2020.
The report, “2020 Global Demand Forecast for US Dairy Exports,” is part of USDEC’s ongoing strategic planning that it conducts with Dairy Management, its primary funder through the dairy check-off.
"Unfortunately, 2016 looks as if it is going to remain about as bad as 2015 was,” Suber said. “But we are encouraged to see that long-term global dairy demand fundamentals are still in place that will again pressure available milk supplies.”
