Cheese Production, Imports, and Exports - Doing the Cow Math

Publication of U.S. and global dairy numbers usually have cheese production in kilo metric tons (kt) and cheese import and export numbers from different countries also expressed in kt. It is hard to relate these numbers to the U.S. dairy industry and even more difficult to judge how their changes can impact supply and demand for cheese and therefore for milk and milk prices.

In this post, everything will be expressed in U.S. type cows numbers - something everyone in the dairy industry can relate to.

All calculations are based on numbers which are based on assumptions. For this quantification, the "assumptions" are based on 20,443 lbs of milk per cow per year (USDA 2008 average) and 9.8 lbs of milk to make a lb of cheese (International Dairy Foods Association conversion factor). In reality, processed "American Cheese" requires less milk because other ingredients are added to real cheese.

NEW ZEALAND CHEESE EXPORTS

In 2009, New Zealand is expected to produce 395 kt of cheese and consume 28 kt of cheese. The remaining 367 kt are exported.

The 367 kt is equal to 390,000 U.S. cows.

(It takes nearly twice as many New Zealand cows to make the equivalent amount of cheese.)

CHANGE IN U.S. CHEESE EXPORTS

In the first 5 months of 2009, the U.S. exported 42 kt of cheese. In the same 5 month of 2008, the U.S. exported 60 kt of cheese.

The decrease of 18 kt over 5 months is equivalent to 46,000 U.S. cows.

At May export rates, this would equate to 53,000 fewer cows needed than in 2008.

U.S. IMPORTS OF CHEESE FROM NEW ZEALAND

In the first 5 months of 2009, the U.S. imported 15 kt of cheese from New Zealand.

This 15 kt is equivalent to 38,000 U.S. cows.

This was 6.9 kt greater than in 2008.

INCREASE IN NEW ZEALAND PRODUCTION OF CHEESE

From 2006 to 2008, New Zealand increased annual cheese production by 80 kt.

This increase of 80 kt is equivalent to 85, 000 U.S. cows.

INCREASE IN U.S. PRODUCTION OF CHEESE

From 2006 to 2008, the U.S. increased annual production of cheese by 196 kt.

This is equivalent to 208,000 U.S. cows!

FUTURE INCREASES OF CHEESE IN NEW ZEALAND

In the next 5 years, New Zealand is expected to increase cheese production by 66 kt annually.

This increase of 66 kt is equivalent to 70,000 U.S. cows.

The comparisons could go on and on, but maybe this helps relate what has happened to cheese and cheese prices and therefore milk prices. However, it certainly leaves a number of questions.

• What will happen to the additional 66 kt of cheese that New Zealand will be making?
• Will New Zealand cheese be cheaper than U.S. cheese on the global market? In the U.S? Will the U.S. dollar get weaker and lower the price of U.S. cheese on the global market?
• How far will U.S. cow numbers have to be reduced to bring the global demand for cheese in line with production? Will other countries reduce their herd sizes?
• How can U.S. cheese making become more efficient? For years, the "make allowance" had increased and increased indicating that making cheese is becoming more costly.

A few of these questions will be analyzed in future posts to this blog.

Your comments please!