World Dairy Expo: Southeast Asia demand is key driver in global dairy market
New Zealand may be best positioned to fulfill this demand increase
8 January 2024
2 minute read
By: Lucas Fuess, senior dairy analyst with RaboResearch recently spoke with The Dairy Site’s Sarah Mikesell at the 2023 World Dairy Expo in Madison, Wisconsin, USA.
“We tried to take a really deep dive into the Southeast Asian dairy market,” said Lucas Fuess. “Which has been a pretty key driver of a lot of the global dairy demand increases that we both have seen in the past and expect to see in the coming years and decades and into the future.”
Southeast Asia including countries like Singapore, Malaysia, Vietnam, and the Philippines see very low per capita dairy consumption but are increasingly interested in more western style diets that include much more dairy.
“This report looked at a lot of those demand factors, but then also from an economic perspective, there's been a lot of economic and GDP growth in these nations that we also think will continue to grow,” he said.
New Zealand well-positioned
From a trade perspective, key dairy exporting regions are typically places like the US, the European Union, New Zealand and Australia.
“New Zealand, I think is positioned well to capitalize a lot in fulfilling some of the demand from this part of the world,” he explained. “But it doesn't mean that we should discount other places in the world.”
US exports struggled in 2023
In 2022, the US had a record dairy export year based on both a volume and value basis, so across the board an exceptionally good year for the US.
“This year (2023), we're struggling a little bit more,” Fuess explained. “That is because of some reduced demand from Southeast Asia and that to me, just tells me how big this region has become in terms of a player on these global dairy trade flows.”
The US sends a lot of cheese along with a lot of nonfat dry milk or skim milk powder to Southeast Asia.
“It speaks to how much they've grown and when they pull back, we can immediately feel the impact here in the US,” he said.
China and region's impact
“We've always thought of China as kind of the big country, the big buyer of dairy,” said Fuess. “There's no doubt they are still the largest importer by many measures of dairy products, but when we collectively look at the region around China and if we view them as one player in global dairy demand, they are becoming huge, as well.”
Dairy demand continues to grow, and it is expected to continue to grow for years into the future.
“The Southeast Asia region is just going to continue to be a bigger player in these global dairy markets,” said Fuess.
