• USDA allocates second RAPP tranche

• Deadline looms for government shutdown

• Getting more dairy into global school meal programs

• USDEC reiterates need for action on supply chain break-ins

• Letters urge Biden, Trump to push for East, Gulf Coast port resolution

• WTO says trade key to feeding the world

• Member opportunity: USDEC booth at IAlimentos and FoodTech

• USDA’s Ag Outlook Forum coming up

• New USDEC research: Southeast Asia; MFGM

• Market Summary: GDT drops to end the year

• EU milk production rebounding

• New Zealand updates emissions reduction plan

• FrieslandCampina merges with Milcobel

• Company news: Schreiber, Kerry, Hema, Baladna

USDEC gets $9.7 million in second tranche of RAPP funding
USDA allocated $300 million to 67 organizations in the second tranche of funding for the Regional Agricultural Promotion Program (RAPP). USDEC, which submitted funding applications for 115 activities, was awarded $9.7 million. (For the full list of recipients and allocations, click here.)

“Once again, we would like to thank USDA Secretary Tom Vilsack, the FAS administrator and staff, and congressional leaders for their decision to make significant investments in developing international markets for America’s dairy farmers and processors,” said USDEC President and CEO Krysta Harden, in a press release applauding the announcement. “These are sound investments that will help ensure U.S. dairy thrives in the future.”

The $9.7 million comes on top of the $10 million USDEC received when the first tranche of funds was allocated in May 2024 (see Global Dairy eBrief, 5/24/24). USDEC has put those funds to good work across a range of activities, some of which have taken place and some that will be executed in 2025, including:

• Scoping and landscape assessment research in Sub-Saharan Africa to assess opportunities for U.S. dairy suppliers and determine the most viable routes to market.
  
  
• Initiating marketing efforts in Taiwan via trade shows, nutrition seminars and targeting mainstream protein fortification.
  
  
• USDEC cheese marketing initiatives in Southeast Asia, such as cheese seminars in Indonesia and the Philippines this fall that attracted over 240 purchasing decision-makers from 100 regional cheese-buying companies.
  
  
• In-person, hands-on ingredient training workshops in Central America and the Dominican Republic with an emphasis on milk powder, WPC, sweet whey and MPC.
  
  
• A major U.S. Dairy Supplier Mission to the Middle East/North Africa spanning cheese and ingredients. The mission, which made stops in Egypt, Morocco and Saudi Arabia, attracted buyers from 152 companies representing 16 countries.
  
  
• A U.S. Dairy Protein Beverage Innovation Workshop specifically for Vietnamese beverage manufacturers. Held at the U.S. Center for Dairy Excellence in Singapore, the event attracted 22 Vietnamese R&D professionals.
  
  
• Consumer social media programs in Japan in the coming year to educate and excite consumers about healthy everyday eating with U.S. dairy proteins.

As with the first round of funding, USDEC plans to use the money to help delve into untapped volume and value opportunities, strengthen the U.S. footprint in regional markets, spotlight prime opportunities in key major markets, and explore new frontiers.

Stay tuned to the Ingredients Advisory Group, the Cheese and Consumer Products committee, the USDEC Spring Membership Meeting and Global Dairy eBrief in the coming year for more information on USDEC RAPP-funded activities.

Midnight deadline for potential government shutdown
At press time, House leaders had proposed a government funding plan to avert a potential government shutdown, as well as an alternative continuing resolution to push the debate into the new year. Should Congress fail to reach a deal, several agencies will see their funding lapse as of midnight tonight. From a U.S. dairy export standpoint, fee-for-service activities will continue, but other services funded through appropriated funds will cease and most U.S. government employees will be furloughed.

Here’s what we know so far (should a funding compromise remain out of reach):

• Export certificates: The Agricultural Marketing Service (AMS) and Animal and Plant Health Inspection Agency (APHIS) will continue issuing sanitary and veterinary certificates for export.
  
  
• AMS grading services and plant surveys: AMS will continue providing grading services and plant surveys.
  
  
• Other services: Staff working on other trade-related matters at USDA’s Foreign Agricultural Service (FAS), AMS and APHIS, as well as FDA and USTR, are expected to be furloughed.

In past funding gaps, FAS foreign posts at the U.S. Embassies remained open with very limited services, but FAS has not yet confirmed staffing for the current shutdown threat. Negotiations on trade-related matters are expected to be on hold.

Monthly U.S. trade data from the Bureau of Census will not be published during a shutdown. USDEC will update its U.S. export data pages and resume analysis of U.S. export performance when the government re-opens.

Exporters should take care to ensure that they are diligent about obtaining certificates in a timely manner for all countries that require certificates to be dated prior to export—the EU, UK, Vietnam, Morocco, South Africa and Turkey—because it is unlikely that U.S. government staff will be available to assist should any consignments be detained. 

Please contact Sandra Benson at sbenson@usdec.org with any questions.

USDEC spotlights dairy’s important role in healthy child development at Global Child Nutrition Forum
USDEC championed the role of dairy in meeting children’s nutritional needs at last week’s Global Child Nutrition Forum in Osaka, Japan. Janice Giddens, USDEC vice president of Sustainable Nutrition, represented U.S. dairy at the forum, which was themed, “School Meal Programs in an Era of Food Systems Transformation.”

The Global Child Nutrition Foundation (GCNF) is the driving force behind the forum. This year’s event attracted 425 representatives of multilateral institutions, national governments and NGOs, as well as school-meal thought leaders, who are directing policy, funding and making decisions regarding the types and quantities of foods served in school meal programs around the world. Eighty-four countries were represented. The forum (which Giddens also attended in 2022) provided USDEC with opportunities to meet allies and build relationships with international policymakers who are developing solutions to sustainably nourish a rapidly growing global population.

Giddens was on hand to engage with school meal authorities and reinforce the key nutritional role dairy plays in healthy childhood development. In addition to relationship building, she presented a poster on the importance of dairy products in school meal programs based on work done for the IDF Bulletin, “The state of milk and milk products in school programmes around the world—Contributing to global child nutrition and development,” published in September. The poster sparked a lot of conversation amongst attendees, and brought about an opportunity for deeper discussions about how U.S. dairy supports positive nutritional and environmental outcomes.

Left to right: Janice Giddens and Laurence Ryken, director-general, International Dairy Federation, with the poster on the role of milk in school meal programs.

School meal work continues
Global and national nutrition guidelines that determine public procurement for school nutrition programs can impact taste preferences and consumption patterns of future generations. Thus, school nutrition programs can present a direct and indirect opportunity for U.S. dairy exports in the short- and long-term.

With funding from the Regional Agricultural Promotion Program (RAPP), USDEC is working with GCNF through 2025 to conduct further research into school meals and potential opportunities for U.S. dairy suppliers in Africa. Information on school meals in Africa is scarce and fragmented, therefore the research aim is to explore and detail the role of dairy foods in school meal programs, and develop strategies for including and enhancing dairy in these programs, including potential challenges and opportunities for the inclusion U.S. dairy products.

The research will also support engagement and relationship building efforts with governments, donors, multilateral organizations, companies and foundations to increase dairy in school meal programs. The effort has several potential benefits, including contributing to the development of a more robust dairy consumer base, reducing hunger and malnutrition, and contributing to increased market share for U.S. suppliers.

Giddens visited Isoshima elementary school to learn about its school meal program and lunch with its fifth graders. Milk is served as a part of school meals in Japan.

USDEC reiterates support for Safeguarding our Supply Chains Act
On Wednesday, USDEC Director, Trade Policy, Tony Rice spoke at a U.S. Chamber of Commerce event to discuss threats to the U.S. supply chain. The event, a series of presentations and panel discussions, focused on “Combating Rising Crime Across Rail, Road, and Retail” and offered an opportunity for USDEC to highlight the container break-in issue and reiterate U.S. dairy support for the Safeguarding Our Supply Chains Act. U.S. Reps. Brad Schneider (D-IL) and David Valadao (R-CA), co-sponsors of the bill, also spoke.

Rice explained how the rise in container break-ins is affecting U.S. dairy suppliers and farmers and actions that could help to resolve the issue, including passage of the Safeguarding Our Supply Chains Act. Even though the thieves are not seeking dairy (or stealing dairy shipments) when they break into containers, the damage they inflict on the dairy supply chain and exports is significant.

When container seals are broken by thieves looking for products to steal, it compromises food safety. Broken seals are often discovered at ports, forcing the supplier to cover the cost of returning and destroying the product. The situation also risks the reputation of U.S. exporters as reliable suppliers, potentially leading to loss of business.

USDEC and NMPF have been working with allied groups and government agencies throughout the year to address the break-in problem and will continue to work to support the legislation and ensure that resolution remains a priority.

Letters urge Biden, Trump to push for East, West Coast dockworkers contract and remove strike threat
A coalition of more than 50 U.S. agricultural organizations, including USDEC and NMPF, sent a joint letter to President Joe Biden and a second joint letter to President-elect Donald Trump urging them to encourage the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) to go back to the negotiating table. The two sides have until Jan. 15, 2024, to hammer out a new dockworkers’ contract agreement or risk a strike at U.S. East and Gulf Coast ports.

The ill effects on U.S. agricultural trade from the previous strike in October (before the two sides reached a tentative agreement on wages) were felt for weeks, even though the strike itself lasted only three days.

The letters point out that “foreign buyers are not captive to our exports. In the event of a disruption, other countries will seize the opportunity to capture this business.” A port shutdown is “a significant threat to the U.S. agriculture sector, and the businesses, workers, and communities who support trade in U.S. agricultural products,” they go on to say.

USDEC continues to engage with allies and government officials to push for a resolution to the contract impasse that removes the strike threat and supports U.S. dairy trade.

WTO defends trade as critical to feeding the world
WTO Director-General Ngozi Okonjo-Iweala championed free trade while in Rome as juror for the Zayed Award for Human Fraternity. During an interview Saturday, Okonjo-Iweala said, “We should keep our eyes on maintaining a stable, free, open and predictable trading system,” adding that global trade is the only way to feed the world and noting that “one in four calories consumed in the world is traded.” Despite the obstacles global trade is facing, Okonjo-Iweala said there are “opportunities within the challenges” and that the WTO needs to move ahead with reforms and push countries to keep the dialogue open. She called for multilateralism and cooperation among countries because “no one country can solve global problems alone.” (Bloomberg, 12/15/24)

Editor’s Note: Next Global Dairy eBrief Jan. 10
Due to the holidays, the next Global Dairy eBrief will run Jan. 10, 2025. If there are important developments over the next two weeks, we will inform members via email. Happy Holidays!

 

Early notification: Sign-ups set to open Jan. 10 for spots in USDEC booths at 2025 IAlimentos and FoodTech Summit
USDEC members will be able to register for a spot in the USDEC booth at two major Latin American trade shows starting Jan. 10, 2025. The USDEC booth will focus on the U.S. dairy ingredient portfolio at both shows, aiming to further suppliers’ traction in the respective markets.

• IAlimentos, the premier food ingredients trade show in Colombia, takes place July 30-31 in Bogotá. (See Global Dairy eBrief, 9/13/24, for more information on last year’s event.)
• FoodTech Summit & Expo occurs on Oct. 8-9 in Mexico City. FoodTech is the largest food ingredients trade show in Latin America—the 2024 edition drew a bigger crowd than the comparable IFT show in the U.S. (see Global Dairy eBrief, 10/11/24, for more information on this year’s event).

Watch for the Jan. 10, 2025, edition of Global Dairy eBrief for details on how to register for space in the USDEC booth at each show.

USDA adds two new speakers to 2025 Agricultural Outlook Forum
USDA announced two additional speakers to the lineup for the 101^st Agricultural Outlook Forum, which takes place Feb. 27-28 in Arlington, Virginia. Jeff Schmid, president and CEO of the Federal Reserve Bank of Kansas City, will address attendees during the plenary session on Feb. 27, and Jim Pillen, governor of Nebraska, will speak at the Feb. 27 dinner.

USDA Chief Economist Seth Meyer will open the event with a presentation on the U.S. agricultural economy and trade. USDA has organized 25 break-out sessions for the two-day meeting, including sessions focused on ocean shipping, diversifying ag trade and a dairy outlook.

For more information, click here. To register for the event, click here.

 

New research on Southeast Asia, milkfat globule membrane
The USDEC Strategic Insights team rolled out two new research reports for USDEC members. To download, click on the respective report title below. If you need a member login, please contact Weston Abels at wabels@usdec.org.

Shades of Healthy in Southeast Asia: This study aims to deepen our understanding of consumer behavior, attitudes and challenges to healthy living in Southeast Asia, with a focus on food and drink choices. As part of the findings, the report segments consumers into different groups based on their health priorities and practices.

Milk Fat Globule Membrane Global Market Landscape: The milk fat globule membrane (MFGM) report is the second in a series spotlighting the application of next-generation dairy ingredients. The findings highlight opportunities in commercial production and consumer demand for MFGM as a beneficial ingredient in infant and adult nutrition.

 

GDT ends year on a down note
The Global Dairy Trade (GDT) Price Index fell 2.8% at the Dec. 17 auction, with declines across all products except lactose. It was the largest single-day decline since a 6.9% plunge on July 2, 2024.

The fall was anticipated by pre-auction SGX-NZX futures markets movement and the most recent GDT Pulse auction. Chinese restocking coupled with improving milk production in the EU and U.S. and ongoing strong output in New Zealand appear to have eased buying urgency. Chinese buyers stepped back from their more aggressive position of the last few months. North Asia (China) accounted for only 38% of volume sold, a sharp decline from the 47-55% purchase levels recorded since late August.

The question is whether China is just taking a breather as it reassesses needs or, having sufficiently contracted for supplies to restock milk powder inventories and meet Lunar New Year needs, this is a return to a more modest GDT stance seen in much of the first half of this year. Given the low levels of WMP and SMP at the end of October (reportedly off 88% and 92% from the previous year), China’s domestic milk production slump and ongoing efforts from the government to stimulate consumption, a temporary buying slowdown seems more likely.

Separately, Southeast Asia stepped up to lead WMP purchasing and finished No.2 overall with 33% of volume purchased (its strongest performance in months). Central America and Africa increased purchasing vs. the previous auction and the same auction the previous year.

Price changes
The average winning prices for key products were as follows:

• WMP -2.9% to US$3,890/MT
• SMP -2.9% to US$2,757/MT
• Butter -0.6% to US$6,631/MT
• AMF -3.8% to US$7,267/MT (Fonterra increased forecast 12-month AMF auction volumes by 2,325 MT prior to the auction)
• Cheddar -0.2% to US$4,682/MT
• Mozzarella -1.8% to US$4,033/MT (marking five declines in the last six auctions since hitting a record high in mid-September)

EU27+UK milk deliveries on the rise
EU27+UK milk deliveries gained nearly 1% in October supported by months of rising farmgate prices and waning bluetongue cases in most countries where the virus had taken hold. It was the second consecutive year-over-year (YOY) increase after YOY shortfalls in July and August. September deliveries ticked up 0.2%.

The biggest October shift came in Ireland. YOY Irish milk production declined for 18 straight months before eking out a 0.6% increase in September. In October, deliveries surged nearly 15% over the previous year. The size of the increase was inflated by sharply lower output the previous year, but it was still the second highest October volume ever, falling short only of October 2022. More solid gains are likely ahead for the country, given very poor comparables at the end of 2023 and the beginning of 2024.

Dutch and German production continued to lag. YOY German milk collections fell 2.3% in October—the fifth straight monthly decline. YOY Dutch output dropped 1.6%—the eighth consecutive monthly shortfall.

Joining Ireland on the growth side were the UK (+3.6%), Poland (+3.3%) and France (+1.1%).

New Zealand unveils new emissions reduction plan
With its first emissions budget coming to a close in 2025, the government of New Zealand released its second Emissions Reduction Plan (ERP2), which outlines its plan to meet the second emissions budget (EB2) for the period 2026–30. Climate Change Minister Simon Watts said the plan sets out how “we can have affordable and secure clean energy, an efficient, competitive agriculture sector and a booming economy while meeting our climate change commitments.”

The plan has targeted actions in the sectors of the economy it says produce the greatest emissions, including agriculture. They include introducing agricultural emissions pricing by 2030 and incentivizing investment in new technologies to reduce their emissions. According to the report, the New Zealand Emissions Trading Scheme (NZ ETS) is the main tool to reduce net emissions. The NZ ETS aims to reduce greenhouse gas emissions by raising the cost of carbon emissions and charging industries for the amount of pollution they produce, encouraging them to switch to cleaner alternatives.

ERP2 projects New Zealand will achieve net zero emissions by 2050. The plan came under fire by Greenpeace, whose spokesperson deemed it “an abject failure” and called out the dairy industry and Fonterra in particular as being New Zealand’s worst climate polluters.

Meanwhile, as part of its commitment to exit coal by 2037, Fonterra announced plans for an NZ$64 million (about US$37 million) investment to convert two coal boilers to wood pellets at its Clandeboye site in South Canterbury. The co-op said the initiative will cut its overall manufacturing emissions by 9% with reductions totaling 155,000 MT of CO2e each year. (New Zealand Ministry for the Environment; Farmer’s Weekly, 12/11/24; Company reports)

   

FrieslandCampina and Milcobel announce merger plans
Dutch dairy cooperative FrieslandCampina and Belgium-based Milcobel revealed plans to merge. The new, combined entity will have a pro forma revenue of more than €14 billion euros (about US$15 billion), operate in 30 countries and process a total volume of approximately 10 million MT of member milk supplied by nearly 11,000 member dairy farms owned by approximately 16,000 member dairy farmers in the Netherlands, Belgium, Germany and Northern France.

A FrieslandCampina statement said the merger “offers further business development opportunities in market segments such as consumer cheese, mozzarella, white dairy products (such as milk, buttermilk and yoghurt), and ingredients, as well as benefits in efficiency and expertise, for example in the area of sustainability.” A detailed proposal for the merger is expected to be finalized in the first half of 2025. The deal is subject to approval by antitrust authorities, FrieslandCampina’s members’ council and Milcobel’s extraordinary meeting of shareholders. (Company reports)

Schreiber Foods announces expansion of Carthage plant
In a move to boost production, Wisconsin-based Schreiber Foods announced plans for a $211-million expansion at its Carthage, Missouri, cheese plant. The initiative includes construction of a new 168,000-sq.-ft. production facility. The dairy company said the expansion “will enhance Schreiber Foods’ process-cheese capabilities in the United States and support the company’s ongoing efforts to partner with customers and meet increasing demand.” A company statement also said Schreiber is pursuing an opportunity that would increase the size of the project. Construction is expected to begin next month, with completion slated for 2027. (Company reports)

Mergers, acquisitions and joint ventures
Kerry Co-Operative Creameries Ltd. and Kerry Group shareholders voted this week to support the sale of Kerry Dairy Ireland to the co-op (see Global Dairy eBrief, 11/15/24). The divestment, which is valued at €500 million (about US$525 million), was backed by 82% of co-op members. … Qatar-based, vertically integrated dairy producer Baladna and Malaysia’s FGV Holdings called off plans to build a major dairy-farming business in Malaysia. The two companies originally announced they were collaborating in 2021 with plans to invest up to $1 billion. They did not offer details on the reasons for scrapping the venture. (Bloomberg, 12/16/24; Just Food, 12/11/24)

Company briefs
Alibaba-owned Chinese retailer Hema and Sinodis (a Chinese importer/distributor and subsidiary of French dairy processor Savencia) reportedly inked a cooperation agreement under which Sinodis will provide Hema with whipped cream products manufactured in New Zealand. … David Nation, managing director of Dairy Australia, is stepping down effective June 2025. The Dairy Australia Board has engaged executive recruitment firm Pacific Search Partners to manage the process of hiring Nation’s replacement, a process expected to take up to six months. (USDEC China office; Dairy Australia)

 

• Happy Holidays from USDEC
• Congratulations to nominees for U.S. Ag Secretary and Trade Representative
• Harden speaks at University of Georgia, advocating food security and a healthy planet
• Harden shares a personal story to underscore the importance of food security
• Ag Secretary Tom Vilsack helps kick off Ag Day at COP29