With the uncertainty of imports and their cost being so high right now, it would be easy to think that all areas of agriculture are taking a hit and struggling through this year. However, one specific area of agriculture is doing really well right now. That area is the exports from the dairy industry. Dairy exports are on track to hit new records as we close out this calendar year. The United States dairy industry mainly exports to China, Canada, and Mexico. There are 133 total countries that received U.S. exports. China has been buying lots of dairy products recently. Throughout the first half of 2021, U.S. dairy exports to China increased by 32%. This is excellent news not just because of the increase in profit, but because of the concerns and challenges the dairy industry faced mainly in 2020.

From 2000 through 2018, the amount of milk that each American drank dropped by 26%. Smaller farms were in trouble because of the growing popularity of large firms (like Walmart) opening up their own farms to produce their own dairy products. Prices for producers were rising before 2020, which shrunk farmer’s profit gap smaller and smaller. All of these factors were apparent before March of 2020, when COVID hit. Then, dairy farmers went through increased struggle. Milk prices had to be lowered to encourage buyer demand to go up. Products had to be thrown away or dumped because there was a lack of transport to get them to places to sell before they spoiled. More factors played into this tough time for dairy farmers too. Thankfully, the dairy industry is back on the upswing in exports and has the chance to break export records. 

Why are people more interested in buying dairy products again? Well, one major factor is that the health benefits of dairy have been advertised to potential consumers throughout the pandemic. In a time where talks about health are so present, it is great that the dairy industry is able to benefit from the push for health. Specifically in China, their government is pushing to their citizens how nutritious milk is, how it is good for immunity, and how they should go out and buy it. Chinese consumers then go and buy dairy products, and the United States’ dairy industry has been able to export more and more cheese, milk, etc. 

The issue that the dairy industry does still face with exports is the same problem that is delaying many imports right now. Transportation of the goods. Shipping, especially on the West Coast, has been a major challenge that dairy companies have to solve. Other countries that are buying U.S. goods have to make sure that they trust the U.S. to get the products to their destination on time, which is critical for a fresh product like most of the products in the dairy industry. If they don’t fully trust them, how does that change willingness to pay? The countries we are exporting to may not be willing to pay as much for the goods if they aren’t arriving quickly enough for them to have a decent amount of time to sell them. Thankfully, trade policies have been coordinated with members of multiple parties that emphasize that dairy and other agriculture exports are placed on a list of high importance to be exported first, given that other countries are willing to pay the right price for them. 

Looking forward into 2022, there are expectations for China’s consumption of imports to slow down. Demand will likely be distributed between more countries, so China’s demand slowing down should not be a large hit to the U.S. dairy industry.