US Cheese Market Outlook is Optimistic in 2024 Due to Growing Demand

Other Cheese
Published Apr 17, 2024
The US cheese industry is poised for growth in 2024, with production forecasted to reach 6.55 mmt in 2024, a 2.34% increase from 2023. This growth is attributed to significant investments in processing capabilities to meet rising demand. Concurrently, domestic consumption is expected to increase by 1.96% YoY to 6.23 mmt, driven by cheese's nutritional value and changing lifestyles. Despite increased production, imports are forecasted to rise by 7.46% YoY to 144 thousand mt in 2024, fueled by shifting consumer preferences. Meanwhile, US cheese exports are projected to grow by 7.62% YoY to 466 thousand mt, capitalizing on global demand and leveraging competitive pricing. Nevertheless, US exporters may face stiff competition from EU and New Zealand dairy processors as they also ramp up cheese production to cater to the surging global demand.

According to the United States Department of Agriculture (USDA), cheese production in the United States (US) is forecasted to reach 6.55 million metric tons (mmt) in 2024, a 2.34% increase from the 6.4 mmt recorded in 2023. This expansion cements the US's position as a dominant force in cheese manufacturing. According to the USDA, the US contributed to approximately 29% of global cheese output in 2023, placing it second only to the European Union (EU), which held a 47% market share. The projected expansion for 2024 is attributed to significant investments in enhancing processing capabilities to meet the escalating domestic and international demand for cheese.

Figure 1. US Cheese Production and Consumption from 2019 to 2024

Source: USDA

The USDA's Dairy Market News indicates a positive trend in cheese production schedules across the US, with the week ending April 12 witnessing steady to stronger output. Furthermore, reports from cheese plant contacts affirmed steadily stronger production schedules alongside heightened demand, particularly in retail sectors for cheddar and Italian-style cheeses.

Notably, domestic cheese consumption in the US has steadily increased over the past five years, projected to reach 6.23 mmt in 2024, a 1.96% year-on-year (YoY) uptick. This consumption surge is attributed to cheese's rich nutritional profile, which, according to Zoha Sohailet al. (2023), boasts essential vitamins, proteins, and other nutrients. Lifestyle changes and the high consumption of fast-food items like pasta, pizza, and burgers at various quick-service restaurants (QSRs) are major drivers of the US cheese market. Additionally, the long shelf life of cheese products, rising disposable incomes, and growing demand for protein-rich food products contribute to market growth. The development of low-fat cheese through alterations in its chemical properties is expected to further fuel market expansion amid the growing health consciousness among adults.

Despite the projected increase in cheese production, the US is forecasted to import around 144 thousand metric tons (mt) in 2024, a 7.46% rise from the 134 thousand mt imported in 2023. This surge in cheese imports can be attributed to shifting consumer preferences, as more Americans are embracing a wider array of cheese styles and flavors. Factors contributing to this change include the influence of diverse cultural cuisines, greater exposure to international culinary trends, and a growing appreciation for artisanal and gourmet cheeses.

Trade Map data reveals that in 2023, the majority of US cheese imports originated from Italy with 37.45 thousand mt, followed by France with 20.36 thousand mt, the Netherlands with 17.63 thousand mt, and Spain with 15.44 thousand mt. Notably, European cheeses such as Camembert, Parmigiano-Reggiano, Gouda, and Brie have witnessed increased popularity among US households and restaurants.

Figure 2. US Cheese Trade from 2019 to 2024

Source: USDA

According to the USDA, US cheese exports are projected to reach 466 thousand mt in 2024, a 7.62% increase from the 2023 volume of 433 thousand mt. This anticipated growth is attributed to the surging global demand for cheese, with notable interest expected from key markets such as Japan, China, Mexico, South Korea, and the Philippines. Trade Map data reveals that Mexico emerged as the top destination for US cheese exports with 148.71 thousand mt in 2023, followed by South Korea with 45.62 thousand mt, Japan with 41.23 thousand mt, Australia with 28.18 thousand mt, and Canada with 22.29 thousand mt.

The United States Dairy Export Council (USDEC) notes that Jan-24 exports totaled 38.3 thousand mt, a 13% YoY increase driven by heightened purchases from Latin America. USDEC further highlights robust shipments of shredded cheese, underscoring sustained demand for pizza, particularly in key markets like Mexico, Japan, Australia, and Guatemala.

In conclusion, the growth trajectory of US cheese production is expected to persist into 2025, with Tridge expecting to surpass 6.6 mmt. To attain this goal, cheese processors are urged to invest significantly in research and development to diversify their product offerings. The upward trend in cheese consumption is also anticipated, potentially surpassing 6.4 mmt in 2025, driven by the demand for cheese as a key ingredient in popular fast-food items such as burgers, pizzas, sandwiches, and tacos. Furthermore, the outlook for the US cheese trade appears robust, with continued strengthening anticipated in the coming months due to global demand. However, to thrive in an increasingly competitive market landscape, the US cheese industry must focus on delivering cost-effective products.

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