International trade as it relates to the U.S. dairy industry has not been a hot topic of discussion historically. However, a variety of factors recently have made the role of international trade of greater importance as exports of dairy products have increased significantly. In general, trade between countries is the result of complex economic, political and historical relationships, but the key economic basis for the benefits to international trade is comparative advantage. Last year, the U.S. dairy industry set new benchmarks regarding key aspects of international trade. Interpretations of the benefits of international trade rely on where the limits of the analysis are determined. If the limits are set at the world level and include both consumers and producers of all products, then the net economic benefits are rather obvious in economic theory. From a U.S. perspective, even without taking into consideration the possible benefits (or costs) of international dairy trade to consumers, any benefits to international trade depend on how extensive the area is defined. An example would be whether just all milk-based products produced (i.e. cheese, whey) that flow between the U.S. and other countries are measured in terms of benefits/costs of whether all milk-based products and live dairy cattle are considered. Since 1989, the U.S. on a total dollar basis consistently imported more dairy items/dairy cattle than it exported. However, last year (2007) the U.S. dairy industry exported more dollars worth of dairy products and cattle than was imported, thus switching from a net importer to a net exporter which can be credited to a variety of changes that have occurred in the U.S. (i.e. policy) and internationally.