As part of their Biannual Global Dairy Report the U.S. Foreign Ag Service says Mexico removing tariffs on U.S. cheese will greatly improve exports which are expected to increase by eight percent from 2018.
According to the agency, the European Union remains the greatest competitor to the U.S. as free trade agreements between the EU and other countries put the U.S. at a disadvantage.
Meanwhile, trade issues for skimmed milk powder and export competition have the USDA forecasting exports decline by four percent this year after the last four years of increase.
Drought conditions and hot weather in other parts of the world has led to decreased milk production in Australia, New Zealand and Argentina. Output from New Zealand and the EU is expected to turn around in the second half of 2019 and show slight increases over last year. USDA is forecasting China to increase milk production by six percent with increasing consolidation and prices growing supplies.