October 26, 2013

California to Export UHT Milk To China

U.S. suppliers find their latest export opportunity in ultra-high temperature (UHT) milk, particularly to China, as reported by Western United Dairymen TODAY.

With its growing middle class, China’s demand for imported UHT milk is soaring. U.S. Dairy Export Council (USDEC) reported China’s consumption jumped from nearly 18 million pounds in 2010 to a forecast of 331 million pounds this year, and is expected to reach 1.3 billion pounds by 2020.

UHT milk is "ultra pasteurization" for one to two seconds with higher temperatures than traditional pasteurization. It allows a  9-12-month shelf life without refrigeration—until opened. The Chinese UHT import market was worth $76 million in 2012, but topped  $85 million just six months later, and Chinese buyers want U.S. dairy products.

While UHT milk could significantly cut the need for refrigeration, thus reducing green house emissions, high heat in the UHT process can change the taste and smell of dairy products, and UHT milk cartons are raising environmentalists’ eyebrows.

California is the nation’s largest dairy-producing state. It produced nearly 42 billion pounds of milk in 2011, 21 percent of the nation’s total output, according to the Dairy Institute of California. With an oversupply of milk, California may be the most logical U.S. supplier to China.

California’s dairy industry has gone through hard times, losing more than 300 dairies since 2007, as reported by the California Department of Food and Agriculture. Feed prices have skyrocketed from competition with the biofuels industry, regional droughts, and increased shipping and transportation costs. Worse yet, California’s large dairy farms are affecting Central Valley air and water quality, including groundwater.

If these impediments in California’s dairy industry can be resolved, this new dairy relationship with China may very well be a good fit.

Sources: Larisa Epatko, PBS; Western United Dairymen; Susanne Rust and Serene Fang, Center for Investigative Reporting