According to Tim Hunt of Rabobank, U.S. dairy exports have the potential to grow as domestic demand slows, international prices are high, the dollar is low, and Fonterra reveals a milk powder withdrawal as it investigates the recent botulism contamination scare. U.S dairy is becoming increasingly cost competitive on the global market and some exports are already increasing. Exports of U.S. milk powder increased from 300,000 tons in 2007 to 500,000 tons in 2012 and cheese exports reached 250,000 tons in 2012 from 100,000 in 2007. The recent contamination of Fonterra whey protein concentrate, and recent announcement of the withdrawal of 42 tons of milk powder in May which had tested for levels of nitrites above China’s tolerance of 2 parts per million has prompted some industry watchers such as INTL FCStone to foresee a shift in demand away from New Zealand to U.S. dairy products. The question is, if the U.S. methods of production can keep costs low enough on the global stage.
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