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Globalization Performance Metrics

Globalization Performance Metrics. Becoming a Consistent Exporter. Short Deck and Supporting Data. Data as of 4Q 2013. Stakeholder performance indicators. Increasing global competitiveness Is the U.S. becoming more competitive internationally and domestically?

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Globalization Performance Metrics

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  1. Globalization Performance Metrics Becoming a Consistent Exporter Short Deck and Supporting Data Data as of 4Q 2013

  2. Stakeholder performance indicators • Increasing global competitiveness • Is the U.S. becoming more competitive internationally and domestically? • Is the U.S. dairy industry filling the latent demand gap? • Is the U.S. moving beyond commodity surplus disposal, supplier of last resort? • Strengthening domestic market • Is U.S. becoming more competitive domestically? • Providing value to producers • Is global market providing higher returns to U.S. producers? • Improving commercial focus • Is the U.S. better fulfilling the needs of customers?

  3. Consistent Exporter goal: • Increasing global competitiveness Back to: Stakeholder Questions

  4. 1) Is U.S. becoming more competitive internationally? • U.S. milk solids exported exceeded trend growth during the 12 months ending Mar 2014 after being below trend during the 12 months ending Mar 2013 • During the baseline period, the U.S. growth rate of 1.429 M lbs/mo represented 64% of global growth (Chart A2A) • U.S. milk solid exports averaged 18 M lbs/mo greater than the trend during the 12 months ending Mar 2014 compared with an average of 24 M lbs less than the trend during the 12 months ending Mar 2013 (Chart A2A) • U.S. increases cheese market competitiveness and is leading SMP/NDM exporter • U.S. cheese market share increased from 4.8% to 16.5% • U.S. SMP/NDM market share increased from 25.6% to 30.0% (+4.4 points)… • …however, the EU is a challenging competitor as its market share has also increased from 14.7% to 24% (+9.3 points) Back to: Stakeholder Questions

  5. Global milk solid exports fluctuate around an upward trend; increasing 2.8 M lbs/mo during the baseline and 9.1 M lbs/mo since Jan 2010 Chart: A1A Back to: Stakeholder Questions / Metrics List

  6. U.S. milk solid exports averaged 18 M lbs over trend during 12 months ending Mar 2014 compared with 24 M lbs under trend during 12 months ending Mar 2013 Chart: A2A Back to: Stakeholder Questions / Metrics List

  7. Cheese Quantity: U.S. accounted for 54% of incremental growth over 2005–07 average, increasing share from 4.8% to 16.5% Total Growth: 1.102 B lbs U.S. Growth: 0.594 B lbs Chart: B7C Back to: Stakeholder Questions / Metrics List

  8. Skim Milk Powder Quantity: U.S. accounted for 36% of incremental growth over 2005–07 average, increasing share from 25.6% to 30.0% Total Growth: 1.865 B lbs U.S. Growth: 0.664 B lbs Chart: B3S Back to: Stakeholder Questions / Metrics List

  9. 2) Is U.S. filling global latent demand gap? • Global milk solids exports for the 12 months ended Mar 2014 were 49% greater than the baseline annual average • Global growth totaled 7.337 B lbs • U.S. growth totaled 2.01 B lbs • U.S. accounted for 27% of global growth in milk solids exported… • …increasing U.S. market share from 13.6% to 18.1% • U.S. market share (most recent 12 months) has increased for 13 consecutive months from Mar 2013 through Mar 2014 and has exceeded 17% for five consecutive months starting in Nov 2013 Back to: Stakeholder Questions

  10. Primary Dairy Product Exports, Total Solids:U.S. accounted for 27% of incremental growth Total Growth: 7.34 B lbs U.S. Growth: 2.01 B lbs Chart: B1A Back to: Stakeholder Questions / Metrics List

  11. 3) Is U.S. moving beyond commodity surplus disposal and supplier of last resort? • Historically, U.S. SMP/NDM exports were the last into the market and first out of the market • During the baseline period (2005–07), U.S. NDM/SMP exports decreased nearly 250,000 lbs/mo while exports from ROW increased 162,400 lbs/mo (Chart A8S) • U.S. SMP/NDM exports have grown more slowly than ROW SMP/NDM exports since Jan 2010 • U.S. SMP exports increased by 750,000 lbs/mo(34.1% of total) while ROW exports increased 1.45 M lbs/mo (65.9% of total) (Chart A8S) • U.S. SMP/NDM exports have been above trend • SMP/NDM exports averaged 7 M lbs/mo more than the trend for the 12 months ending Mar 2014 versus 10 M lbs/mo less than the trend for 12 months ending Mar 2013 (Chart A8S) • U.S. market share increased (25.6% to 30.0%), though the EU is a challenging competitor (14.7% to 24.0%) (Chart B3S) Back to: Stakeholder Questions

  12. U.S. SMP exports averaged 7 M lbs/mo over trend during the 12 months ending Mar 2014 compared with 10 M lbs/mo below trend during the 12 months ending Mar 2013 Chart: A8S Back to: Stakeholder Questions / Metrics List

  13. Consistent Exporter goal: • Strengthening domestic market Back to: Stakeholder Questions

  14. 4) Is U.S. becoming more competitive domestically? • U.S. competitiveness in the domestic market increased during the baseline period (2005–07) • U.S. milk solids imported decreased 46,000 lbs/mo during baseline period (Chart C1A) • Average milk solids imported during the 12 months ending Mar 2014 were 25% less than during the baseline period • U.S. milk solids are supplying a larger share of the domestic market • Imports accounted for 3.8% of apparent domestic consumption during the baseline period versus 2.8% during the 12 months ending Mar 2014 • Apparent consumption grew by 2.8% between the baseline period and the 12 months ending Mar 2014 Back to: Stakeholder Questions

  15. Milk solids exported increased at 2.03 M lbs/mo while imports increased at only 5,000 lbs/mo since Jan 2010 Chart: C1A Back to: Stakeholder Questions / Metrics List

  16. Consistent Exporter goal: • Providing value to producers Back to: Stakeholder Questions

  17. 5) Does global market increase returns for U.S. producers? • The export equivalent of the Class III milk price demonstrates that exports contribute to higher U.S. domestic milk prices • The Class III export equivalent averaged $1.89/cwt greater than the actual Class III price during the 12 months ending Mar 2014 • Class III price and export equivalent trends continue to convergence • The actual Class III price is trending upward at the rate of 11.4 cents/mo while the export equivalent is trending upward at the rate of 8.7 cents/mo • The export equivalent is calculated by inserting export unit values for cheese, butter, NDM/SMP, and dry whey into the Class III price formula Back to: Stakeholder Questions

  18. Trends continue to converge as domestic and international markets become more integrated Chart: D1P2 Back to: Stakeholder Questions / Metrics List

  19. Consistent Exporter goal: • Improving commercial focus Back to: Stakeholder Questions

  20. 6) Is the U.S. better fulfilling the needs of customers? • Measure: Global Dairy Buyer Survey • Summary of Baseline Data: • U.S. viewed as an important source of future supply • Long-term consistent commitment to the export market is needed • Improvement wanted in product specs, quality and pricing stability Back to: Stakeholder Questions

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