Dairy Science Department
BS in Dairy Science
The opportunities for increasing exports of California dairy products to the Japanese and South Korean markets were determined by identifying current obstacles in the California dairy industry and determining the characteristics of consumers in the Japanese and South Korean markets. As the largest milk-producing state and the supplier of 7.5% of total U.S. dairy exports, California’s economic activity greatly affects the rest of the nation and the world. The trends in the California dairy industry include increasing total milk production and per-cow milk production, a diminishing number of total dairy operations, and a rising number of large dairy operations. These factors are contributing the rising annual volumes of United States dairy exports to trade partners, including Japan and South Korea. However, domestic issues such as environmental regulation suggest that the cost of business in California may hinder growth opportunities and disenfranchise industry professionals from investing in California processes.
As diets and consumption become more westernized, the consumption of dairy foods in Japan and South Korea is increasing. Due to instability in the Japanese dairy industry following a butter shortage, the United States was able to enter another sector of the lucrative Japanese dairy import market and secure the largest share of butter imports to Japan. Despite desirable attributes of the product and recent trade agreements, the Japanese demand for United States’ dairy products is depressed by the perceived inflexibility of the United States, inconsistent and questionable quality of its products, and disregard for the Japanese business environment.
These concerns prevent the development of stronger and potentially long-lasting partnerships between the United States and must be addressed with innovation from California and United States industry officials. Promotion targeting college-aged individuals and housewives in Japan are likely to realize the greatest return, based on the reported levels of interest in new dairy products, however the demand for processed and unprocessed cheeses, as well as value-added organic products marketed as “healthy” will increase in Korea and should be anticipated. In addition to advertising United States’ products as “American Specialty,” California processors should continue to promote lactose and skim milk powder exports to Japan and South Korea, but incorporate the Japanese quality standards into production.