American cheddar cheese exports are experiencing a sharp surge this year, increasing 83% in the first few months of 2018 compared to the same period in 2017.
Apparently, the world is seeking to get its dairy fix, and turning to the US.
Exports of US cheddar are at the highest levels the country’s dairy industry has seen in about four years, the result of global weather fluctuations and comfier American cows.
The European Union, New Zealand, and the US produce and sell the bulk—more than 80%—of the world’s cheeses. And sometimes, if unforeseeable circumstances arise, competition between the three markets can tip global cheese sales. That includes unusually wet or dry spring seasons, which can throw a wrench into farming operations and cause competing markets to see export spikes.
This year, American farmers got lucky. New Zealand experienced unusually dry spells this past spring, in August and September, explains Chicago-based HighGround Dairy analyst Alyssa Badger. Those dry stretches burned out the grass the nation’s dairy cows eat. So a normally reliable market ended its peak dairy months short on supplies.
“Volatile weather hampered grass growth which meant the cows didn’t have enough to eat and they weren’t producing enough milk fat,” Badger says.
Most the milk fat the New Zealand cows did produce wound up being used to create powdered milk formula, which is popular in the Chinese market and can be sold at a higher cost than many cheeses, in part because of past food-safety scares in that country.
The global cheddar supply took another hit several months later, when Europe was slammed by a cold, wintry blast during the start of its own spring season. Faced with less product than normal, European farmers poured most of their milk fat into producing Italian-style cheeses—including gorgonzola and parmesan—which in most cases can be sold at a higher premium than cheddar.
Combined, those two weather events left American farmers in a position to fill the cheddar gap left by their fellow cheesemakers.
So far this year, the US has exported about 75 million pounds of cheese, with cheddar making up about 20% of that total. Blocks of cheddar are actually pretty handy for food companies, as they can be melted down and blended to create other types of cheeses commonly sold in grocery stores, including Colby and Monterey jack cheeses, among others.
To be sure, this isn’t the first time the US dairy industry has seen a big bump in exports. In 2014, cheddar exports soared even higher than they have this year. That said, the numbers this year are welcome news to American dairy farmers, who’ve weathered a tumultuous bout of headlines around global trade as US agricultural interests have suffered (paywall) as a result of president Donald Trump’s policies on tariffs. With steady weather conditions, American dairy farmers are poised for a strong 2018.
By: Chase Purdy