HIGHLIGHTS: October 20, 2023
• World Dairy Summit recap
• Mexican dairy ingredient users visit U.S. on Cochran Fellowship
• Harden shares USDEC's story with news media
• Market Summary: GDT on a roll
• USDEC, NMPF comment on maritime data transmission
• USDEC joins other organizations in urging emergency international food aid
• USDEC staff additions
• Company news briefs: Walmart, Lactalis, Synlait Milk
Featured
Optimism rules at World Dairy Summit
From the Oct. 15 pre-summit research presentations to the final Oct. 19 concurrent session exploring dairy’s place in food systems transformation, one feeling was ever present at this week’s International Dairy Federation World Dairy Summit (IDF WDS). That feeling was optimism.
Speakers and audience members openly acknowledged the many challenges facing dairy—including farm economics; greenhouse gas emissions; water use; measuring, quantifying and standardizing sustainability activities; anti-dairy disinformation; competition from plant- and lab-based products; and others. But at the same time, they expressed belief that dairy’s inherent and unique nutritional proposition and accelerating efforts to improve and communicate dairy’s sustainability credentials attest to the global dairy sector’s healthy future.
“The U.S. dairy sector is vibrant and committed to working with all of you to raise global dairy demand and ensure that dairy maintains its essential place in the future of sustainable food systems,” Nick Gardner, Summit Co-Chair and USDEC senior vice president, Sustainability and Multilateral Affairs, told the audience. “The U.S. dairy industry is open for business, we're looking outward, and we're engaged around the globe. We're working every day to generate value for our farmers, for our processors and for our customers. We're aligned behind a shared vision. We are committed to working together to solve complex problems. And we're expanding the relationships necessary to drive success into the future. But most of all, we're optimistic. And that optimism has been the North Star for our summit.”
More than 1,240 dairy leaders from 55 countries registered for IDF WDS 2023, which took place at Chicago’s McCormick Place Convention Center from Oct. 15-19. The summit delivered four days of dynamic programming, including eight main sessions and 21 break-out sessions focused on policy, scientific and technical insights and exclusive market analysis. (Click here for an IDF press release on the event.)
“It's our unflagging confidence in the dairy sector’s boundless potential and endless possibilities that brings us together and will guide us into the future,” said Summit Co-Chair Nick Gardner, USDEC senior vice president, Sustainability and Multilateral Affairs.
Summit Co-Chair Shawna Morris, USDEC executive vice president, Trade Policy and Global Affairs, highlighted the IDF WDS 2023 Statement, which reinforces the importance of working together and empowering the next generation of leaders within the global dairy sector to maximize dairy’s boundless commitment and endless ambition to sustainably nourishing people and communities and make a positive difference in the world.
A joint effort
A major recurring theme of the summit was the need to cooperate to drive dairy growth, whether that be to build demand, meet sustainability goals, or communicate how nutrient-dense dairy foods are key to global food security. Several speakers, including USDA Secretary Tom Vilsack and Dairy Management Inc. President and CEO Barb O’Brien, spoke directly to the necessity for dairy stakeholders to reach out and work with each other and complementary groups to address many of the challenges facing the industry today.
Secretary Vilsack brought up the need for collaboration in the first official IDF WDS session on Day 1: “IDF World Dairy Summit 2023 Kick-Off.” In outlining USDA’s drive for climate-smart agriculture, Vilsack noted, “We want a partnership that involves not just farmers, but environmental groups and conservation groups and major food companies and retailers and universities and minority-serving institutions. We want all of us to be working collaboratively.”
“Climate-smart agriculture creates an enormous opportunity,” said USDA Secretary Tom Vilsack. The starting point to get there, he added, is listening to farmers. “Farmers basically said to us, we want a system that is voluntary. We want a system that is incentive-based. We want a system that understands the market and encourages the market to recognize the contributions we're making. And we want to make sure that we have a strong and valid method of reporting, measuring, monitoring and verifying the results, so we can assure consumers that the items they're purchasing have been sustainably produced.”
O’Brien, who spoke as part of the Global Leaders Forum, outlined three “key areas where we can begin to join hands and be stronger together.”
- Doing all we need to do to assure nutrition security around the world. “It's incumbent on us as a global sector, to form new partnerships and collaborations to help achieve food and nutrition security for every child for every family for every country who can't support themselves,” she said.
- Continuing to invest in research to deepen and advance dairy’s health and wellness credentials. “We need to ensure that consumers understand the full spectrum of dairy’s benefits at a macro or micro, even a molecular level. And we must provide the science to prove it,” O’Brien said.
- Really proving that the dairy community can play a vital role in sustainable food systems. While “excited and proud” of the progress U.S. dairy farmers are making to address climate change and definitively position dairy products, dairy farmers, the dairy category, and even dairy cows as an environmental solution backed by credible science and is economically viable, “this work requires deeper partnerships and [IDF WDS] is the place to forge that,” she said.
For the dairy industry “to realize our potential as a global sector” we need to identify shared priorities, and identify and take actions toward those priorities together, said DMI President and CEO Barb O’Brien.
Sustainability dominates
The topic of sustainability in all its aspects—social, economic and environmental—was another recurring theme at IDF WDS—mentioned in virtually every session. Secretary Vilsack cited 18 dairy projects being funded by USDA’s Partnerships for Climate Smart Commodities initiative. University researchers provided updates on studies aimed at measuring cows’ methane emissions and efforts to reduce them through more precise feeding regimens, different feed additives and genetically modifying gut microbes. U.S. and global dairy leaders cited clean energy projects, projects to reduce, reuse or recycle packaging, and efforts to improve water quality.
Speakers expressed confidence that technology and innovation would solve the sustainability challenge. But one of the big questions that remains unanswered is who will pay for the required investments.
“It can't be on the backs of the farmer,” said Mike Durkin, president and CEO of Leprino Foods, during the plenary session, “Dairy Processing Around the World: Today’s Focus, Tomorrow’s Vision.”
“It's just prohibitive for farmers at this point. We have farms in the U.S. that actually are net neutral or net negative from a GHG standpoint, but the equipment, the cost and the time to be able to put that in place, it's just not there,” Durkin added. “So from a collaborative standpoint, it's going to take everyone—it's going to take from the farm level, from the processor level, and from a consumer product standpoint.”
“The absolute impact, speed and passion in the need for us to change in regard [to sustainability] is in many ways unprecedented. I think we're up for the challenge. But as we talked about earlier, cost, innovation and technology are going to have to play a role,” said Mike Durkin, Leprino Foods’ president and CEO.
Networking for days
IDF WDS 2023 provided plenty of time for attendees to network before, between and after plenary and concurrent sessions. The “Dairy Bar” and technical poster areas were always crowded. Receptions and dinners after the show gave attendees a taste of Chicago and many hours to mingle, trade ideas and talk issues. And the show floor at McCormick Place served as a giant networking space.
Below are some images from various parts of the show and evening activities.
Just a portion of one of the tables of U.S. cheeses featured at the opening night reception at House of Blues in Chicago.
USDEC Interim Chair Alex Peterson (center) talks with colleagues at the Dairy Bar, where attendees could grab milk, cheese, yogurt and ice cream snacks between presentations.
Scenes from the show floor. From top: The National Dairy Council booth, the Wisconsin Department of Agriculture, Trade and Consumer Protection booth, and the California Planet-Smart Dairy booth.
More to come
This week’s report on IDF WDS covers only a portion of the summit activities. Watch for the Oct. 27 Global Dairy eBrief for more on the summit, including sessions featuring California Dairies Inc. Chair Simon Vander Woude, Hilmar Cheese President and CEO David Ahlem, and the Honorable Tim Groser, former New Zealand Ambassador to the U.S., and former New Zealand Minister of Trade and Minister of Climate Change.
In addition, this page on the U.S. Dairy Exporter Blog curates highlights from the event.
Mexican Cochran fellows learn about U.S. dairy ingredients and cheese on California plant tours and USDEC WDS session
R&D, manufacturing and regulatory representatives from three major Mexican food companies—Sigma Alimentos, Grupo Lala and Qualtia Alimentos—visited the U.S. this month on an educational mission under the auspices of the USDA Cochran Fellowship Program.
The Cochran Fellowship Program provides short-term training opportunities to agricultural professionals from middle-income countries, emerging markets and emerging democracies. It seeks to strengthen and enhance trade ties between eligible countries and U.S. ag interests, among other goals.
USDEC and DMI staff, Cal State and Cal Poly mission leaders and Cochran Fellowship winners in Chicago during the World Dairy Summit.
The mission provided in-depth training on all things U.S. dairy, including learning about on-farm practices and about the chemical and physical properties of milk, dairy ingredients and cheese. Sessions on functionality, sensory, applications, fermentation, packaging and a hands-on cheesemaking workshop were on the agenda. Most of the training took place in California, which also included visiting and touring the facilities of USDEC members Leprino Foods and California Dairies Inc., as well as Point Reyes Farmstead Cheese and fluid milk processor Clover Sonoma. Staff from Cal Poly San Luis Obispo and Cal State Fresno Universities led the mission, which was capped by a visit to this week’s International Dairy Federation World Dairy Summit (WDS) in Chicago.
At WDS, USDEC and Dairy Management Inc. provided a three-hour information session focused on expanding and enhancing participants’ knowledge of U.S. dairy ingredients and deepening their relationships with USDEC. Topics included USDEC’s ingredient marketing activities in Mexico, the U.S. dairy ingredient portfolio, U.S. dairy sustainability and a U.S. dairy regulatory and market access overview.
Harden shares USDEC's story with news media
In several news media interviews, USDEC President and CEO Krysta Harden has shared her enthusiasm about the IDF World Dairy Summit and the positive role USDEC plays to be a catalyst for U.S. dairy exports.
Coverage has included:
- Above) RFD TV taps into Harden’s excitement on-site in Chicago to gather dairy leaders from 55 countries in Chicago.
- A com podcast hosted by Connie Kuber addresses the importance of the Summit and how USDEC has been a catalyst for U.S. exports in Mexico and other markets.
- Brownfield Ag News reporter Larry Lee asks about the positive impact of global leaders signing up for Summit tours to Wisconsin, Indiana and Michigan.
- Samantha Tennent, a reporter for AgriHQ/Dairy Farmer magazine in New Zealand, interviews Harden (photo below) for an upcoming article addressing global dairy markets.
Market Summary
GDT continues to roll
The Global Dairy Trade (GDT) Price Index continued its nascent bull run this week. The Oct. 17 auction saw the index rise 4.3%, the fourth significant gain in a row, with 1) steady (if unspectacular) buying from North Asia (China), 2) Southeast Asia/Oceania (SEA) stepping up for its second big auction performance in a row, and 3) the Middle East showing a reinvigorated appetite for milk powder.
SEA has been most impressive this month. At the Oct. 3 auction, it increased buying in all major products compared to the previous auction and (except for SMP) over the previous year as well. This week, Southeast Asian buyers increased purchasing of WMP and SMP compared to the previous auction and the previous year and led AMF and cheddar buying.
SEA demand, which had lagged significantly through the first half of the year, has hinted at recovery in recent months—as shown in improving SMP exports to the region over the July-August period and in its recent SEA GDT activity.
And SEA wasn’t the only region driving the price gains. The Middle East also increased SMP and WMP volumes compared to both the previous auction and the same auction in 2022.
Pricing tailwinds—for now
The average winning SMP price rose 4.3% to US$2,659/MT at the Oct. 17 auction and is up more than 16% over the last three events. The WMP price rose 4.2% to US$3,059/MT and is up 20% over the last four auctions.
While GDT milk powder prices have been rising, they are still well below 2021-2022 price levels. That relative value, when combined with concerns over New Zealand’s 2023/24 milk production and slowly easing inflation rates in SEA, have created some purchasing tailwinds. However, with the Russia-Ukraine war mired in a stalemate, still-tenuous global economic growth forecasts, China still dealing with big powder inventories and now the added uncertainty over the broader fallout from the conflict in Israel, numerous questions surround the strength of a broader demand recovery.
Cheese and butter
The average winning cheddar price largely held steady (+0.2% to US$3,858/mt). It was a victory of sorts given that GDT cheddar prices had fallen in seven of the previous eight auctions.
AMF surged 7.1% to US$5,310/MT, the highest price since early March 2023. Prices are up 19% since hitting bottom at US$4,452/MT in mid-August. Butter rose 2.9% to US$4,940/MT and is up 9% since the Aug. 15 auction.
Trade Policy
USDEC, NMPF comment on maritime data transmission
USDEC and the National Milk Producers Federation (NMPF) have commented to William Cody, secretary of the Federal Maritime Commission, on the crucial issues of maritime data transmission, accessibility, and accuracy.
USDEC and NMPF emphasized the significant supply chain challenges that have been faced by American dairy exporters since the COVID-19 pandemic.
Their comments are in response to FMC’s request for further information.
To gather insights, USDEC reached out to its members, requesting their input on recent experiences with ocean containers, with a specific focus on the reliability of maritime data transmission.
The responses received from USDEC members represent a wide range of export volumes, varying from companies exporting as few as 10 TEU containers per month to those handling approximately 8,000.
Interestingly, half of the respondents expressed the belief that with improved information on gate slots and vessel schedules, they could enhance container delivery by 25% and achieve greater accuracy in timing.
USDEC and NMPF expressed appreciation for the Federal Maritime Commission’s continued efforts to study and improve the transportation systems that are vital to the daily operations of their members.
USDEC joins other food and ag organizations in urging emergency international food aid
USDEC has joined with 16 other food and agricultural organizations in sending a letter to the chair and vice-chair of the Senate Appropriations Committee, urging "robust" funding for emergency international food aid in any supplemental package or end-of-year funding bill.
The urgency is great, especially as the threat of a government shutdown looms after November 17, the letter points out.
According to the UN World Food Progamme, the number of people facing acute food insecurity has increased from 135 million in 53 countries before the pandemic to 345 million in 79 countries in 2023.
To address this, USDEC and other ag organizations highlight the importance of procuring Ready-to-Use Therapeutic Food (RUTF). This crucial resource can make a significant difference in the lives of over 45 million vulnerable children suffering from acute malnutrition, commonly known as "wasting." With access to RUTF, over 95% of these children can recover, yet historically, only 25% have had the opportunity to receive treatment. Thanks to the leadership of USAID and Congress last year, over $580 million was mobilized for a one-time increase in RUTF procurement, effectively doubling the number of children receiving the care they desperately need.
USDEC Staff Additions
Strategic Insights Team
Max Heston has joined the Strategic Insights team as its Strategic Insights Analyst, bringing three years of market intelligence on trade in agriculture, food and beverage. He led regulatory intelligence for Reach24H Consulting Group in Hangzhou, China, supporting both U.S. and non-U.S. clients in evaluating export opportunities. Max also completed internships in the U.S. and China focused on agribusiness and international trade. He will work from USDEC’s Arlington, Virginia office and can be reached at mheston@usdec.org.
Membership Team
Erica Louder is the newest addition to USDEC's membership team. Based in Boise, Idaho, Erica will focus on supporting USDEC's western-based members while working closely with the rest of the membership team in Arlington, Virginia. With over a decade of experience in agriculture and a deep understanding of the dairy industry -- including roles in communications, public relations, and agricultural finance -- Erica is well-equipped to help expand membership benefits in and beyond her time zone. To get in touch with Erica, reach out to her at elouder@usdec.org.
Ingredient Marketing Team
Suzanna Stohr has joined the USDEC ingredient marketing team as Marketing Coordinator. Maintaining the calendar for upcoming global ingredient marketing activities and organizing Ingredients Advisory Group (IAG) meeting logistics will be among her key responsibilities supporting demand and innovative expansion for U.S. dairy ingredients. She will be based in USDEC’s Arlington, Virginia, office and can be reached at sstohr@usdec.org.
Company News
Company news briefs
Walmart plans to build a new $350 million milk processing plant in Valdosta, Georgia, to provide milk for more than 750 Walmart and Sam’s Club stores in Georgia and neighboring states. It will be the second milk processing plant that Walmart has built after the one that opened in 2018 in Fort Wayne, Indiana … French dairy company Lactalis has received regulatory clearance to finalize the acquisition of Dairy Partners Americas in Brazil after Fonterra and Nestlé put the venture on the market … British online grocer Abel & Cole says it has created the UK’s first environmentally-friendly refillable plastic milk bottle in order to reduce carbon emissions during transportation … New Zealand-based Synlait Milk announced that its exclusivity dispute with The A2 Milk Company remains unresolved and is now entering arbitration … Saudi food conglomerate Savola Group has confirmed that it’s exploring options for its $5.3 billion holding in the Middle East’s largest dairy firm, Almarai. (Associated Press,10/11/23; Just Food,10/12/23; Dairy Reporter,10/16/23; FoodBev.com,10/18/23; Trade Arabia, 10/18/23)
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