We may be addicted to oil from Saudia Arabia and Russia, but they can't get enough of our milk-fat products.
U.S. dairy processors shipped butter and cheese abroad at a record pace in the first six months of the year, according to trade data released last week. They capitalized on a weak dollar, high prices for cooking oils and droughts in Australia and New Zealand, which usually dominate the international dairy trade.
Exports of butter shot up 570 percent to more than 56,000 tons, led by sales to Russia and Saudi Arabia. Cheese exports jumped 48 percent to roughly 78,000 tons.
One curious consequence of the export boom, experts say, may be a shift in the type of cheese made in California, the nation's top producer of milk.
Most large-scale cheese plants in the state produce either mozzarella or a combination of cheddar and jack. Cheddar is the variety traded on commodity markets in the United States and much of the English-speaking world.
But elsewhere, standards are different.
"Gouda and Edam are the world currency in cheese," said Bill Schiek, an economist with the Dairy Institute of California, a milk processors group.
Gouda and Edam are produced mainly by smaller, specialty cheese makers in California today, Schiek said. But now the state's big cheese makers are talking about building new "industrial Gouda" plants.
This year, international buyers have been happy to take any type of cheese because supplies are so short, Schiek said. But in the long run, "If we're really going to be a player … we need to think more about making the products that those countries are used to getting."
The federal government doesn't report export data by state, but there's little doubt the California dairy business is cashing in on the boom. The state produced 500 million pounds of butter and 2.3 billion pounds of cheese last year. That's far more than Californians consume, so dairy processors get much of their revenue from out-of-state sales.
"We're probably a fairly large portion of that export market," said Richard Cotta, chief executive of Visalia-based California Dairies Inc., a major butter producer that handles close to half the state's milk.
– By Jim Downing
