North American dairy industry driven by the US

Press Release   •   Jul 11, 2013 11:38 BST

The North American dairy industry reached a total market value of $63,054.2 million in 2011, with the US representing the fastest growing country, at a compound annual growth rate (CAGR) of 4.7% over the 2007-11 period.

The North American Free Trade Agreement (NAFTA) is a trade agreement between the countries in North America: the US, Canada and Mexico.

Within the North American dairy industry, the US is the leading country, with market revenues of $48,506.4 million in 2011. This was followed by Canada and Mexico, with a value of $8,666.9 and $5,880.9 million, respectively.

The US is expected to lead the dairy industry in the NAFTA bloc, with a value of $56,851.6 million in 2016, followed by Canada and Mexico with expected values of $10,368.8 and $7,290.2 million, respectively.

In 2012, the United States produced 90,558,996,884,992 kg of milk from 9,225,000 cows producing 9,817 kg per cow. The top dairy states in the United States are California, producing 18,960,612,140 kg of milk from 1,782,000 cows, Wisconsin, producing12,348,597,041 kg of milk from 1,270,000 cows, and Idaho, producing 6,149,804,536 kg of milk from 580,000 cows.

The changing structure of US agriculture has generated concerns about reduced competition in a wide variety of agricultural products markets, including dairy. Two primary areas of concern in the dairy industry are consolidation -- the shift to fewer and larger firms -- and industry concentration -- the extent to which a small number of firms control most of the sales.

Consolidation has been a long-term trend in agriculture. Across the industry, including the dairy sector, rising productivity has led to fewer and larger operations along the production and marketing chain, including farms, cooperatives, processors, and retailers.

Larger operations tend to have lower per-unit costs. As firms reduce their costs, they become more competitive and can increase sales and market share at the expense of less profitable firms. As a result, fewer dairy farms are needed to produce the same amount of milk.

The majority of dairy producers in the US (93%) utilize visual observation as a means to detect estrus in dairy cattle; however, many producers also use tail chalk (35%), and bulls for estrus detection (40%).

In the US, the majority of future growth is expected to come in further processed dairy products such as cheeses and yoghurts. This will require companies to target key trends such as healthy eating, convenience and snacking with innovative product development.

For more information on the North American dairy industry, see the latest research: North American Dairy Industry

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