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Ask the Expert Market PricesWhat is relation export volume and market price?

What is relation export volume and market price?

Alta Genetics

May 18th 2011

What percentage of US product is currently exported? How correlated are exports to price?

Mike North

United States

May 18th 2011

On a total solids basis, U.S. dairy exports represented a record of 12.8% of total U.S. milk production in 2010. Exports have been trending higher in the last five years as world economies, mostly in eastern Asia, have continued to enhance their diet with dairy proteins. U.S. dairy exports for 2010 totaled $3.71 billion in value, up 63% from the year prior. It's not so much that exports are correlated to price, but rather that price is correlated to exports. The higher prices go, the more US product is exported. The reason being that the U.S. is viewed as the seller of last resort. When product supplies become thin and buyers have depleted available global supplies through open market purchasing, they come to us. Largely, this is because our products are made to different specs (i.e. salted vs. unsalted butter or non-fat dry milk vs. skim milk powder). They can use our products, but must often make changes to accomodate it.

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