HIGHLIGHTS: FEBRUARY 16, 2024
• Gardner builds relationships in Indonesia
• Sign up! USDEC-FAS fact finding mission to China
• USDEC meets with FDA on trade issues
• Indonesia issues regs on foreign halal certificate registration
• Castaneda strengthens dairy relationships in Peru
• Harden outlines U.S. dairy sustainability at NACD meeting
• USDEC visits Hilmar, CMAB
• Member opportunity! Participate in Chinese animal husbandry expo
• Nicholson-West to speak at TPM Cold Chain; discount registration for USDEC members
• Southeast Asia mission pays off for Tedford/Tellico
• Market Summary: NZ forecast payouts and farmer confidence on the rise
• Canada releases dairy support funds
• Fonterra increases cream cheese production
• Company news: Nestlé, Ornua, Danone, Remilk
Featured
USDEC moves forward with technical engagement program in Indonesia
USDEC, the New Mexico Department of Agriculture (NMDA), New Mexico State University (NMSU) and other state departments of agriculture are partnering with Indonesia to create a technical engagement program to support Indonesian dairy farmers. The intent of the program is to make a positive impact on smallholder Indonesian milk producers, strengthen ties with Indonesian dairy importers, build a collaborative relationship with the Indonesian government, and educate farmer and ag students with training in Indonesia and the U.S.
“A strong partnership between the Indonesian and U.S. dairy industries benefits dairy by expanding the U.S. industry's global reach and increasing exposure to potential new markets,” said Jonathan Gardner, USDEC senior vice president, Market Access and Regulatory Affairs.
Fact-finding mission
Gardner, USDEC Southeast Asia office chief Dali Ghazalay and representatives from NMDA and NMSU were in Indonesia in January and February on a five-day fact-finding mission to learn more about how the U.S. dairy sector might be able to work with the local industry to help it address challenges to production and consumption growth. It follows previous USDEC engagement in Indonesia in recent years with government officials and farmers, including a 2023 mission organized by the National Association of State Departments of Agriculture (NASDA). USDEC President and CEO Krysta Harden and NMDA Secretary Jeff Witte participated in that mission.
At that time, the Indonesian government conveyed its desire to improve the long-term livelihoods of its farmers, boost agricultural production, improve resource efficiency and strengthen the public health rationale for good farming practices.
Participants from the USDEC/NMDA/NMSU fact-finding mission to Indonesia at farm co-op Kunak Farming Bogor, where they discussed challenges and opportunities facing the nation’s dairy farmers.
This month’s delegation met with small-scale farmers, co-ops, key opinion leaders and the FAS office in Jakarta.
Indonesian farmers are still recovering from a major outbreak of foot and mouth disease in 2022 that significantly depressed milk production. Other challenges include weather, labor, inconsistent feed practices, minimal emphasis on biosecurity, restrictive government policies, and farmer distrust of academia and resistance to change.
Findings and next step
The slate of meetings helped confirm Indonesia’s objectives for building the technical expertise of its dairy farmers, the areas of technical engagement that would be most useful and viable, and the most effective avenues for technical education and support programs.
USDEC’s next step will be to partner with Indonesian academic institutions, dairy processors and local co-ops to conduct hands-on workshops and training on dairy farming fundamentals for small-scale farmers.
Member opportunity! USDEC-FAS fact-finding mission to China set for June
USDEC, working in collaboration with USDA’s Foreign Agricultural Service (FAS), is organizing a Trade and Fact-Finding Dairy Mission to China June 23-28.
The purpose of the mission is to facilitate U.S. supplier engagement with Chinese buyers of cheese, dry ingredients and milk products and to deepen U.S.-China agricultural relations, reinforcing the importance of regulatory and policy factors with a commercial voice.
General agenda
The mission will consist of two stops: Beijing for a day and a half, followed by Shanghai for three days. The Beijing portion will include a reception organized by FAS, government and association meetings, and one-on-one meetings with key dairy buyers. The Shanghai portion will focus on one-on-one meetings with key buyers, engagement with the Shanghai FAS office, and a visit by USDEC partner Jiangnan University.
This is a valuable opportunity to participate in a unique USDA-U.S. dairy collaboration at a time when the industry will need to tap into a sizably larger share of global markets in light of the significant additional investments made in U.S. cheese and protein ingredient manufacturing capacity, which will come online over the 2024-2026 timeframe.
Costs and registration
There is no participation fee to attend this mission. Covered costs include meeting venues, tours and receptions, group ground transportation, group dinners and consolidated sample shipment. Suppliers will be responsible for their individual travel and lodging costs.
Members interested in participating in the mission can sign up by clicking here. Please RSVP by March 15. If you have questions, please email Angélique Hollister (ahollister@usdec.org), Vikki Nicholson-West (vnicholson-west@usdec.org) and Jaime Castaneda (jcastaneda@usdec.org).
USDEC meets with FDA on dairy trade issues
USDEC and NMPF held a joint meeting this week with FDA’s first Deputy Commissioner for Human Foods, Jim Jones, to discuss ongoing FDA work that significantly affects U.S. dairy trade. USDEC COO Martha Scott Poindexter and NMPF President and CEO Gregg Doud, co-led the meeting, which also included USDEC staff from Market Access and Regulatory Affairs and Trade Policy, as well as NMPF regulatory staff.
The meeting focused on three major issues: FDA’s export facilitation role; dairy equivalence evaluations; and U.S. formula market resiliency.
Interagency cooperation
USDEC discussed FDA’s important role in exports and asked for a prioritization of resources and staff on trade issues, working in collaboration with interagency partners. USDEC views the 2020 MOU between FDA, FAS and AMS as a vital tool for steering this cooperation, as it provides a framework to deepen and streamline activities to the benefit of U.S. dairy farmers and processors.
As part of that discussion, USDEC reiterated to FDA its request to create a single consolidated list of all dairy facilities in good regulatory standing and authorized to export to facilitate export flows.
"As our trading partners’ facility-list demands continue to expand, the need for this consolidated facility list continues to grow,” said Poindexter. “We’d like to see FDA move forward with this while also ensuring that any new costs associated with the benefit of a new consolidated list are viable, particularly for companies with multiple facilities shipping to multiple markets.”
Equivalence and formula markets
New Zealand, the EU and Canada are currently seeking to allow all their facilities to ship Grade A products to the U.S. by pursuing equivalence recognition. USDEC and NMPF stressed that any equivalency determination—particularly where the EU is concerned—should be conducted on a mutual basis, looking at the equivalence of all dairy products and not merely those the EU wishes to focus on for its own export interests.
In terms of formula markets, USDEC and NMPF urged FDA to support efforts that would allow the industry to build toward a larger net exporter footing. That includes holding foreign suppliers to the full review process and level of regulation to which they hold U.S. processors and prioritizing domestic production growth as it works through pending applications from those seeking to expand sales of formula to U.S. consumers.
Peru visit builds relationships in Latin America
USDEC Executive Vice President, Policy Development and Strategy Jaime Castaneda was in Peru this week as part of ongoing USDEC efforts to create new partnerships and strengthen existing commercial links in South America and the broader region. Castaneda met with several key players in the local dairy industry, Peruvian government officials, U.S. embassy representatives and law firms working on geographical indication (GI) issues to defend common cheese names.
The meetings may result in an expansion of our presence in different regions within Latin America where large Latin companies have a strong presence. In addition, the meetings were part of USDEC’s long-standing, continuous efforts to strengthen bilateral ties that enhance the U.S. dairy presence in the hemisphere, address potential issues that might undermine trade and increase dairy consumption to the mutual benefit of all parties.
That engagement can be seen in a growing list of partnerships with dairy and ag producer and processor associations in Latin America, including the Inter-American Institute for Cooperation on Agriculture (IICA), the Pan American Dairy Federation (FEPALE), the Chilean Federacion Nacional de Productores de Leche (Fedeleche), Sociedad Rural Argentina, Asociación Nacional de Ganaderos Lecheros (ANGLAC), Confederación Nacional de Organizaciones Ganaderas (CNOG), Gremio de Productores Lecheros de la Republica Mexicana, and Cámara Nacional de Industriales de la Leche (CANILEC).
Indonesia mandates registration of foreign halal certificates for imports
The Indonesian government issued draft procedural regulations for the Implementation of the Registration Service for Foreign Halal Certificates. This regulation sets out the procedures for the mandatory registration of imported products certified halal by foreign halal certifying bodies (HCBs) accredited by Indonesia's Ministry of Religious Affairs’ Halal Product Guarantee Organizing Agency (BPJPH).
As written, the requirements are unclear, and the MARA team is working to get clarity on several points before the mandate is notified to the WTO for official comments.
USDEC is following this situation closely and will update members as information comes in. Members are advised to work closely with their importers on registration of these foreign halal certificates. If you have any questions, please contact Aimee Pinkerton at apinkerton@usdec.org.
Harden highlights U.S. dairy sustainability story at NACD
This week at the National Association of Conservation Districts’ 78th Annual Meeting in San Diego, USDEC President and CEO Krysta Harden outlined the U.S. dairy sector’s long history of environmental stewardship, ongoing sustainability commitments, and how dairy is one of the keys to nourishing the world’s growing population.
Harden’s presentation, “Dairy—Sustainable Nutrition the World Needs,” highlighted rising global hunger levels and dairy’s unique nutritional advantage in countering nutrient deficiencies. In fact, the UN Food and Agriculture Organization found that milk is among those “crucial sources of much-needed nutrients which cannot easily be obtained from plant-based foods.”
Harden further explained how the U.S. dairy sector is the most efficient in the world, with the world’s lowest greenhouse gas intensity. U.S. milk producers are also using less water and less land while simultaneously decreasing their carbon footprint. And the industry’s ambitious 2050 environmental goals aim to improve all measures across the board.
“With unmatched efficiency and the capacity to grow volume while continuing to reduce emissions intensity, the United States is the only major dairy producer poised to meet increasing global dairy demand, sustainably and efficiently,” Harden said.
USDEC leaders visit Hilmar, CMAB
USDEC's Krysta Harden, president and CEO; Martha Scott Poindexter, COO; and Erica Louder, member services manager, were in California this week to meet with members, including Hilmar and the California Milk Advisory Board. At Hilmar, they met with Becky Nyman, USDEC's vice-chair, who is one of the farmer-owners. Nyman hosted the group for lunch with Hilmar board members, where they discussed USDEC priorities and how those priorities align with Hilmar farmers. Afterward, Denise Skidmore, director of education and public relations for Hilmar, showed off their community outreach efforts—where she annually hosts 15,000 area students.
The group finished the visit at Hilmar’s Innovation Center, where they sampled various cheeses and protein drinks that are currently being tested for the market. Later, Nyman showed the group one of her family’s farms—including her gorgeous Jersey cows, which Harden called a highlight of the visit.
The next day, the group met with the California Milk Advisory Board (CMAB) leadership team. Visiting partnership checkoff programs, like CMAB, helps USDEC create strong working relationships with the organizations that are the grassroots of U.S. dairy farmers in their regions. At the meeting, the group discussed each organization's priorities in the international dairy space, how to complement each other’s efforts, and concerns for U.S. dairy moving into the future.
These stakeholder visits will continue to be a priority for USDEC. They help align priorities, create rapport and better serve membership as we seek to grow the impact of U.S. dairy around the globe.
Harden and Poindexter with Hilmar board members, including Becky Nyman (center) and her brother Brad (second from right), at the Hilmar Cheese Visitor Center.
Poindexter, Nyman and Harden visit with the Jersey herd at one of Nyman’s family farms.
Events
Opportunity to participate in Chinese animal husbandry expo
USDEC has learned of an opportunity for interested member companies to reserve a booth in the USA Pavilion at the China International Animal Husbandry Expo (CAHE), May 18-20, 2024, in Nanchang, Jiangxi Province. CAHE is one of China's largest and most influential trade conventions in the animal husbandry industry, showcasing offerings from livestock production enterprises and related products and services from across the industry's supply chain.
The pavilion is organized by ATO Beijing. Twenty-seven square meters of booth space are still available. The expense for the booth booking is RMB7,000 (about US$972) for 9 square meters, so RMB14,000 (about US$1,944) for 18 square meters.
USDEC will not be exhibiting at CAHE, but the booth space opportunity remains open to members. Click here for the official CAHE website. For more information on the show and how to reserve booth space, please contact Annie Bienvenue at abienvenue@usdec.org.
Vikki Nicholson-West to talk U.S. dairy demand at TPM Cold Chain breakout track
This year’s TPM conference in Long Beach, California is fast approaching. The annual conference, which is produced by the Journal of Commerce unit of S&P Global Inc., takes place from March 3-6 and will explore current issues affecting the global container shipping and logistics industries.
USDEC will be participating in the conference’s TPM Cold Chain breakout event, which will take place March 5-6. Vikki Nicholson-West, USDEC senior vice president, Global Ingredients Marketing, will participate in a panel session titled, “TPM Cold Chain: Commodity Spotlight: Macro Trends and Specialized Needs for Reefer Products.” The panel will be led by William Duggan, North American cold chain advisor at Eskesen Advisory. Nicholson-West will be joined by Peter Friedmann, executive director of the Agriculture Transportation Coalition; Hernán Martínez, Hapag-Lloyd’s senior director-Global Reefer, Specials and DG; and Greg Tyler, president and CEO of the USA Poultry & Egg Export Council.
During the session, Nicholson-West will discuss how the global market has been impacted by COVID and what that has meant for U.S. dairy, including its impact on demand as well as U.S. supply dynamics. Effects include accelerated consumer demand for health and wellness products, and the U.S. growing supply of cheese and whey products with new cheese plants coming online in the next 1-2 years. She will also identify the key industry challenges and opportunities we see for exports in 2024 and the near future: which markets, what sectors, the competitive environment and consumer trends.
USDEC has partnered with the Journal of Commerce and the TPM24 team to secure a flat, $1,000 registration rate for members, about 60% off the lowest conference rate. Register here for TPM24 using the code USDECTPM24 at checkout to secure your place today.
Mission to Philippines helps lift Tedford/Tellico sales to Southeast Asia; more USDA missions coming up
For members on the fence about USDA agricultural trade missions, USDEC member Tedford/Tellico’s experience could be instructive. Tedford/Tellico participated in a July 2022 USDA-sponsored trade mission to the Philippines with the goal of creating new revenue streams and diversifying its customer base. USDEC’s Southeast Asia office was closely involved with the mission, met with all U.S. dairy participants and accompanied the mission’s retail tour to provide further background on U.S. dairy ingredient use in retail products and brands.
Tedford/Tellico connected with potential buyers during one-on-one business meetings, some of which were arranged by USDA’s FAS Office of Agricultural Affairs in Manila and others initiated and facilitated by USDEC. USDEC’s Southeast Asia office also followed up with the members and customers post-mission.
Those contacts and insights Tedford/Tellico made led to the company’s first dairy shipment to the Philippines just two months later. Since then, it has shipped more than 3,150 MT of products worth $2.7 million to new customers in the country.
For more on this year’s planned USDA agricultural trade missions to Angola, South Korea, India, Canada, Colombia, Vietnam and Morocco, click here. Applications have closed for Angola, Korea and India, but USDA will announce the application windows for the other trips as they open. We will report those opening details in upcoming issues of Global Dairy eBrief as they become available.
For information on upcoming USDEC missions please visit the Marketing Events page of usdec.org, click here.
Market Summary
NZ farmer confidence improving on back of milk prices
New Zealand dairy farmer confidence is improving with commodity price gains on the Global Dairy Trade platform, forecast farmgate payout hikes, surprisingly positive weather and strong pasture growth. This week, in the most recent sign of optimism, Fonterra Co-operative Group increased its forecast payout for the 2023/24 season to NZ$7.30-$8.30/kgMS, lifting the midpoint by NZ$0.30 from the previous forecast to NZ$7.80/kgMS. The co-op’s move follows similar increases from ASB and Westpac (who recently raised their forecasts to NZ$7.85/kgMS and NZ$7.90/kgMS, respectively).
Fonterra cited rising demand in the Middle East and Southeast Asia for its latest move. Westpac pointed to increased economic support measures from the Chinese government as another reason for optimism.
While farmgate prices and farm confidence are moving in a positive direction, the latest forecasts—if they hold—would still be the lowest payouts since 2020/21.
Canadian government allocates funds for dairy processors
The Canadian government announced it will allocate up to C$89 million (about US$66 million) of funds to dairy, poultry and egg producers via its Supply Management Processing Investment Fund. The funding, which was announced at the Lactalis Canada cheese plant in Ontario, is part of the Canadian government’s efforts to help processors in supply-managed sectors address the impacts of recent international trade agreements. Lactalis is set to receive up to C$3.3 (about US$2.4 million) for new automated cheese processing and packaging equipment. The funds are designed to help farmers invest in modernized technology that will help them boost production, meet environmental goals and overcome labor challenges. (Government of Canada, 2/5/24)
Company News
Fonterra upping cream cheese production to meet Chinese demand
New Zealand-based dairy cooperative Fonterra said it is increasing production of cream cheese at its Darfield site to meet growing demand from China. Plant officials said the company plans to export around 20,000 MT of cream cheese to China this season—an increase prompted in part by last week’s Chinese New Year celebrations, as cream cheese is commonly found in Chinese pastries, tea macchiatos, cheese lollipops and cheesecakes. (Radio New Zealand, 2/12/24)
Company briefs
Citing the need for “efficient and productive operations” in the current global landscape, Nestlé announced plans to close its dairy plant in Matagalpa, Nicaragua. The plant focuses primarily on producing dairy products under the Switzerland-based company’s Prolacsa brand, which officials say will move its operations to other facilities in Latin America. … Irish dairy cooperative Ornua named Conor Galvin as its new CEO. Galvin, who is currently CEO of Ireland-based coop Dairygold, will assume the new role in May. … France-based Danone inaugurated a new beverage production facility that was recently converted from dairy to plant-based. The site, which took two years to transform and features two production lines, was converted to anticipate consumer demand and is now home to Danone France’s only oat-flour-to-oat-juice production facility. … Israel-based animal-free dairy company Remilk received Health Canada's “Letter of No Objection,” which allows the startup to sell its animal-free beta-lactoglobulin protein in Canada. The company’s products, which incorporate proteins produced via precision fermentation, have also received approval from the U.S., Singapore and Israel. (Company reports; Dairy News Global, 2/12/24)
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