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Wednesday, December 13, 2017
 China's Soaring Demand For UHT Milk Offers Opportunity for U.S. Processors  

China's soaring demand for imported milk with a six to nine month shelf life offers an opportunity for U.S. processors. To capture some of China's estimated demand of 1.3 billion pounds of the milk by 2020, the U.S. industry needs to expand capacity and develop products that better match China's expectations.

China’s soaring demand for ultra high temperature pasteurized milk offers an export opportunity for U.S. suppliers, and U.S. Dairy Export Council is ready to help processors capture that market called UHT milk, which has a shelf life of six to nine months.

Consumption of UHT milk in China jumped from nearly 18 million pounds in 2010 to 331 million pounds forecast for this year. Demand scenarios suggest China’s appetite for imported UHT milk could grow fourfold to more than 1.3 billion pounds by 2020, according to a new USDEC study.

The Chinese UHT import market was worth $76 million in 2012. In just the first six months of 2013, that value topped $85 million. China is the largest packaged fluid milk importer in the world, and it is growing, the study found.China is not a huge buyer of skim milk powder, cheese or whey — commodity products that are helping to push U.S. exports to 20 percent of domestic milk production — but it has become a big buyer of UHT milk, said Ross Christieson, USDEC senior vice president of market research and analysis.

The U.S. produces about 2 million tons annually of UHT dairy beverages, such as Coffee-mate and Nesquick products and milk for fast food restaurants, but has only played a minor role in supplying China’s booming demand for the product, he said.

Producing UHT milk for the Chinese market would grow exports with a value-added, branded product, and Chinese buyers have expressed growing interest in the U.S. supply to meet its demand, he said. Christieson said he expects a greater push for the U.S. industry to expand UHT milk processing capacity. Capturing any of China’s demand for UHT milk is at least a year away, he said.

Most U.S. processors he’s talked with are interested in the Chinese market, as well as other Asian markets. As yet, however, they haven’t found the right combination of pricing, product mix and purchasing partners, he said. “They need to understand the building blocks to get business done in China, and we can help them,” he said. Finding the right partners is key, and understanding China’s regulatory environment, which is often daunting to U.S. exporters, is also important, he said.

Part of the drive for UHT is the quality issue China has had in its dairy industry The country has also been unable to produce enough milk to meet domestic demand, he said. At the heart of all growing global food demand, however, is economic growth. And dairy is almost universally considered the best food product available, he said.

To gain a larger share of the foreign imported UHT sector, U.S. suppliers need to develop products that better match Chinese expectations. For example, U.S. UHT milk is primarily consumed in half-pint and pint boxes and bottles, but the Chinese UHT market is dominated by 1-liter boxes, according to USDEC’s research. In addition, the U.S. industry needs to build capacity dedicated to exports that is closer to shipping points, as well as find a way to offer more competitive pricing for longer-term contracts, Christieson said. The opportunity for U.S. dairy is broader than strictly UHT milk and China. USDEC also sees potential in other Asian markets, including the Philippines, and for additional products such as UHT cream and lactic acid beverages.

 

Source: Capital Press 

 


Posted on Thursday, October 31, 2013 (Archive on Thursday, November 07, 2013)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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