Whilst United States dairy exports continue to rise, Australia is seeing a decline in dairy exports. There are several reasons for this trend. First, there has been an oversupply of dairy products on the world market recently, which has pushed down prices and profit margins. The strong Australian dollar, which has made our products more expensive on the world market, has exacerbated this situation even more. In addition, the U.S. dairy industry has been benefiting from government subsidies, which have helped keep its products competitive. The North American Free Trade Agreement also aids the U.S. dairy industry because it gives it access to a bigger market (NAFTA).
This article explores in detail what Australian exporters can learn from the United States to adapt to the dynamic and competitive global market, enabling the industry to become more efficient and competitive. Specifically, this may include improving productivity, investing in new and existing technologies to help streamline processes and seeking new markets.
In July 2022, Australia’s dairy exports fell by 3.4% compared to the same month last year, according to the latest figures from the Australian Bureau of Statistics (ABS). This is the first time since January that Australia’s dairy exports have fallen every year. Exports to China fell by 8.3% in July 2021 compared to the previous month, which was the primary cause of the decline. Exports to other major markets, such as the European Union, the United States, and Japan, were also down, although the falls were not as striking as in China.
The decrease comes when international dairy prices have been rising. The prices are hiking because of the increasing demand from China. However, it is worth noting that Australia’s dairy exports are still well above the levels seen in the years before the COVID-19 pandemic. It will be interesting to see if the export fall continues in the coming months or if it is just a blip in an otherwise robust recovery.
The United States is among the leading exporters of dairy products. Their dairy exports have been rising recently, totalling $7.2 billion in 2020 and $8.1 billion in 2021. July 2022 saw the United States export an all-time high of $9.3 billion in dairy products. They expect the trend to continue and score even better in the future. However, they haven’t lost sight of the fact that there are obstacles to overcome, such as problems with the supply chain and weak global economic growth.
It is worth remembering that this process took some time to yield. The United States dairy industry, from farmers to manufacturers, has worked tirelessly for two decades to increase exports and meet the growing domestic demand for American dairy products. One of the reasons they have been able to overcome current problems and expand the sector is their commitment and dedication to their export customers.
In the past, the United States has had to import dairy products to meet the demands of the global market. However, using technology, the United States has increased its dairy product production and enhanced its exportation process. The country has intensified the use of technology in most parts of its dairy industry, from production to exportation.
The U.S. has digitized their farms to produce more and better quality milk with fewer cows. This is because of the digital growth that enables them to improve their breeds and use robotic milking machines to make work easier. The United States has also used technology to develop new methods of producing dairy products. One example of this is lactose-free milk. Lactose-free milk is made by using an enzyme to break down the lactose in milk. This process makes lactose-free milk taste the same as regular milk but without lactose.
Learning from the United States’ success in increasing its dairy exports presents opportunities for Australia’s dairy industry.
The key takeaway for the industry is to embrace technology which has multiple benefits. Firstly, technology yields quality improvements, as well as opportunities to innovate new dairy products to keep up with consumer demand and trends in the market. Secondly, the implementation of cutting-edge technology, such as robotic milking machines, leads to a boost in productivity and, consequently, export opportunities.
However, with growth and exporting opportunities come challenges with the exporting process. This is why dairy exporters use software to streamline the process and get products to customers as quickly and efficiently as possible. One of the most popular software programs used by dairy exporters is Dairy Export, created by the National Milk Producers Federation. This program allows United States exporters to track shipments, create custom reports, and manage inventory in one place.
Finally, the United States Department of Agriculture has created the Dairy Export Incentive Program, which provides financial incentives to dairy exporters who use approved software programs to track their shipments. Using digital software, United States dairy exporters are increasing opportunities to improve their efficiencies to meet the ever-growing demand for dairy products.
The Australian dairy export industry is worth billions of dollars, and whilst it’s recently seen a slowdown, it is still a significant player in the global trade economy.
But it is critical that Australian dairy exporters find ways to increase supply to stay competitive. This can be achieved by improving pricing, better positioning themselves regarding the quality the industry is renowned for and using software like that used in the United States to facilitate the exporting process. This software will help with order management, shipping tracking, customer data storage, and creating invoices and other necessary paperwork. It will also help with the acquisition of any required certification or documentation.
ImpexDocs helps businesses grow by simplifying your export supply chain with complete export management software solutions and experienced service teams. We believe that every company should conduct its international trade efficiently. As one of the major software platforms in the Asia-Pacific and globally, we help our clients save time, effort, and money by managing their export services from start to finish. Contact us today to know more about how ImpexDocs can help streamline your dairy export operations to make it more profitable, compliant, and resilient.