In August, INFAGRO participated in a two-week business trip of the Ukrainian delegation of dairy producers to the United States of America. The trip was organized as part of the USDA Cochran Fellowship Program. I managed to get a lot of interesting information on the US dairy industry, which I would like to share.
First, about production of milk. In the US there are more than 40 thousand dairy farms of various size, from 2 cows to tens of thousands. It should be noted that only 3% of all farms in the country are now engaged in milk production. There are 9.3 million cows kept in these farms, in total they produce almost 100 million tons of milk.
In general, the number of dairy farms and number of cows are declining, but milk production annually grows by about 1.5% due to an increase in the productivity of cows, which already exceeds the level of 10 tons/year/cow. On many farms the norm is more than 12 tons/year/cow.
The dairy industry of the USA is based on cooperatives. The market is arranged so that it is quite difficult to conduct business outside these cooperatives. Milk producers and processors which operate independently, simply cannot compete with large cooperatives. So, there occur constant acquisitions of small independent market operators, and there are also mergers of cooperatives.
There are 132 cooperatives in the country. They produce about 84% of all milk. Of these, a dozen of large co-operatives produce and process more than half of all milk:
Source: National Milk Producers Federation
More than 2,000 plants are involved in milk processing in the United States. There are also very old small dairies that are gradually withdrawing from business, and very large modern complexes that are displacing the small ones from the market. There are 625 dairies in the country that produce liquid milk, more than 650 cheese makers, 225 drying and canning companies and nearly 600 ice cream and frozen desserts producers.
The dairy trade in the US becomesmore and more global every next year. Dairy products are often sold in small stores, but generally the number of such outlets is rapidly decreasing. A number of trade networks have been formed in the country. About a half of all dairy sales is carried out by eight networks, and a quarter of all dairy products is sold through a well-known Walmart network.
The US market is very big both in terms of the number of consumers and the average per capita consumption. This is not surprising, as 319 million people live in the country. An average American consumes about 300 kg of dairy products a year (in terms of milk). Most milk goes to production of fresh dairy products: annually an American consumes 68 liters of drinking milk, 17 kg of cheese nd 2.6 kg of butter.
Despite its own large consumption, there are also significant surpluses of milk for export in the US. As Americans say, 8 million cows work for the domestic market and 1.3 million work for export. In general, the US annually exports dairy products of about 6 billion dollars value. The main partner among the foreign markets is Mexico, significant volumes are also sold to Canada, China, Japan and Korea. The main products in dairy export trade are milk powder and cheese.