The ITC, an independent nonpartisan, factfinding agency, recently released the report as part of an ongoing series of reports on thousands of products imported into and exported from the United States. The following are other highlights from the report.

• The United States is a small, but increasingly important, participant in international dairy markets, and its share of world markets is expected to rise in the future. Reforms contained in the Federal Agriculture Improvement and Reform Act of 1996 and globalization of dairy markets under the Uruguay Round Agreements should make U.S. dairy products more competitive internationally. However, the United States faces stiff competition from dairy products produced in New Zealand, Australia and (to a lesser extent) Ireland and Argentina.

• Between 1992 and 1996, the average annual value of all U.S. dairy products produced was about $62 billion, while employment was approximately 700,000 persons. International trade is relatively small in comparison to the domestic market. Imports, over 90 percent of which were cheese and casein, constitute only 2 percent of U.S. consumption of all dairy products. Major suppliers are the European Union, New Zealand, and Australia. Exports account for less than 1 percent of U.S. annual production of dairy products, with the principal markets being Mexico, Japan, and Canada.

• World trade in dairy products is highly restricted as a result of both tariff and nontariff measures. Under the Uruguay Round Agreement on Agriculture, the United States agreed to convert its section 22 quotas to minimum access guarantees and tariff-rate quotas. High foreign tariffs and nontariff barriers, such as sanitary certification, labeling, and shelf-life requirements and state trading enterprises, represent major obstacles for U.S. exports.

• Various new technologies are being utilized in the dairy processing industry and are expected to take on a greater importance in the future. Technologies are being used to concentrate milk so that it can be shipped cheaply over long distances, while new packaging techniques provide greater shelf life and the ability to transport perishable products greater distances. Increasingly, new uses are being developed for components of milk and as a result, new products are being formulated.

• The principal U.S. consumers for dairy products include households, restaurants, institutions, producers of foods (such as bakery products, pizzas, and ready-to-eat microwaveable packaged foods), and the U.S. Department of Agriculture. At the retail level, changes in consumer incomes and retail prices for dairy products relative to other foods are the principal factors influencing the demand for dairy products. Other factors affecting consumption include advertising, promotion, concern about health and nutrition, changes in demographics, and government donations.

The foregoing information is from the ITC report Industry and Trade Summary: Dairy Products (USITC Publication 3080, January 1998).

ITC Industry and Trade Summary reports include information on product uses, U.S. and foreign producers, and customs treatment of the product being studied. They analyze the basic factors affecting trends in consumption, production, and trade of the commodities, as well as factors bearing on the competitiveness of the U.S. industry in domestic and foreign markets.

This report is now available for downloading from the ITC's Internet server at (www.usitc.gov). A printed copy may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.