NDB, American Institute Study Finds Markets U fuTvTy ZXST Pl* Tf"* lional Dairy ProVnotii. and Re- petitivc prices. SiKr said. £ jJ J ± ’ ‘. t ’ * h <£ h was S,OW sean* Board and the American Despite U.S. pri<* and supply ate unifonn standards and of Dairy Products Institute shows advantages, the study found that „ rad _, hllu . I j ie B IDWtn “ that increasing exports of whey rising concerns among overseas dence y confl- oduction outpar and lactose has great potential for buyers over U.S. quality and con- .xL in H llcfr „ k . ~ roduction indi boosting the U.S. dairy industry, sistency could limit long term Tom Suber. director of export whey and lactose exports To identify itomw lleetb ind programs at the Nauona Dairy compound the problem. U.S. facilitatc two communica- Board, reminded Nauonal Dairy whey product producers have luUc tions with customers using a re- “ Board members at their annual contact with their buyers since gional indlis try representative; Zf y T meeting May 18-20 that the study brokers play a major role in hand- and was conducted because of the fol- ling U.S. exports. . The industry hclp lowing trends in the U.S. dairy This is not surprising since create maikct acceM b sector: cheese is the primary business raising profit of whey mi “ • U.S. exports of whey and lac- not whey and lactose for most lactose trade barriers with US lose were rising and broadening U.S. producers. Suber said. This government trade negotiators their geographic coverage; insulation from the customers pre- The study analyzed condensed • Domestic production was in- vents whey product producers w h ey w hey powders and tmose creasing: and from learning and correcting the wen y* spccific • Elements of the industry were problems in packaging, lack of petitivc position of those US pre ttying to determine how to coor- purity and inconsistent specifics- ducts in eight key overseas mar dinate or increase their export ac- tions. In addition, without person- jjets Mexico Japan Korea tivity. 1 al contact, the overseas buyer feels Hong Kong. Taiwan, the Philip Just as significant was an earlier no commitment to the U.S. supply pines Th ailand and Venezuela, study by the Dairy Marketing Ini- source. Suber coun|ries balive in Wisconsin which esti- sent about 74 percent of the total mated that every 1-cent rise in the u.s. 1992 whey and lactose ex price of whey results in a S-cent ports, increase in the farm-level price of raw milk for cheese, Suber said. “Given recent trends in U.S. dairy processing and exporting and the fact that studies show dairy farmers receive a consider able benefit in their milk price from the sale of whey and lactose prompted the Dairy Board to fund the study with the help of ADPI,” Suber said. “We (Dairy Board) wanted to find out what we and the rest of the industry can do to help move whey and lactose over seas." U.S. suppliers currently have a favorable position in eight key Suber said, the U.S. dairy in dustry must work together to cor rect quality and image problems before it can reach its full potential in increasing whey and lactose sales abroad. Suber cited the fol lowing recommendations from the study: • The U.S. industry should pro vide more customer services such as technical information regarding uses for whey and lactose while offering to help solve quality problems; • Foreign whey and lactose buy ers need more information through trade missions, while the U.S. industry needs to leant more about overseas markets through export marketing seminars and Whey As a direct consequence of growing cheese industries, the European Community and the U.S. account for 39 percent and 24 percent respectively of total raw product Fresh whey production in 1991 grew at just under 1 percent compared with the late 1980 s. The EC dominated whey pow der production and utilization in 1991 with 57 percent of the mar ket The U.S. was second with 31 percent of the production and 26 percent of the utilization. World production of whey powder amounted to 1.7 million tons. In 1991, growth equalled 4.6 per cent, which was slower than the early 1980 s. The growth of whey powder production outpacing fresh whey production indicates more low value fresh whey was processed and used as a higher-value powder than just thrown away, Suber said. Utilization or consumption of whey powder is growing at a strong 6 percent on a worldwide basis. Quoting the study. Suber said, this reflects the technological advancements that have made milk proteins competitive with ve getable (primarily soy) proteins. In most of the countries studied though, the primary use of whey was for animal feed. Even in Ja pan, over half of the whey, most of which is imported, is used in feed compounds. However, most everywhere this ratio is shifting to more high-value uses in human foods and infant formula. Lactose The EC produces more than half of the world’s lactose, while the United States was second at 34 percent Total world lactose pro duction in 1991 was about 250,000 tons with U.S. supplies' growing at the fastest rate. Japan had the highest lactose utilization in 1991. Japan used 36 percent of the total world lactose supply. The U.S. used the second largest portion at 26.1 percent Ja pan’s heavy lactose use comes from its value as a milk sweetener, better suited to local taste prefer ences than other sweeteners. In 1991, Japan dominated lac tose imports with SB.S percent of world imports. The EC and U.S. imported an insignificant amount The EC dominated lactose trade wjth 54.3 percent of the world’s exports. The U.S. ranked a distant second with 18.5 percent, but the U.S. and Finalnd (4.9 percent of world exports) have had the fast est recent growth rates. Conclusions The research cited Japan and Mexico as remaining good mar kets for importing U.S. dairy pro ducts, particularly whey and lac tose. On a volume basis, the two countries will generally lead all other markets, but the fastest growth for both products will come in Southeast Asia. The study offered the following basic conclusions regarding whey and lactose production, use and export; • Among the products studied, whey powder is the most widely used, with a broad shift from ani mal feed to human food use; • Whey product sales are grow ing most rapidly for those whey products with the highest value. One dramatic exception is China and its huge and rising use of con densed whey; • The EC dominates the produc tion and overall utilization of .whey, but at present has a lower share of exports than the U.S.; • World demand will grow fast er than production. U.S. exports will continue to rise through the year 2000 due to a competitive price and abundant supply. But certain constraints exist that will prevent the U.S. from keeping up with world trade, thus losing mar ket share. . For a copy of the complete re port, call the National Dairy Board’s Export Market Enhance ment Department at (703) 528-4800.
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