• Strengthening U.S. dairy’s position in global food systems discussions

• USDEC signs new MOU with World Farmers’ Organisation

• USDEC welcomes farm bill progress

• March U.S. dairy export results

• Morris, Loux at IDF

• Member opportunity! USDA extends application deadline for Colombia mission

• Market Summary: USDEC’s latest International Demand Analysis

• IMF upgrades global economic growth forecast

• March USDEC Export Guide updates

• Welcome to two new USDEC members

• Darigold names Huttema as CEO

• Irish dairy company results

• Company briefs: Milcobel, General Mills, Pizza Hut China 

 

USDEC mission to Italy strengthens U.S. dairy’s position in global food systems discussions
This week, a USDEC-led delegation held a series of meetings in Italy with UN Food and Agriculture Organization (FAO) leaders, representatives from UN member states, and allied dairy groups. The mission is another element of USDEC’s heightened engagement with UN agencies over the past few years, including at the UN Food Systems Summits and Stocktaking Moments held at FAO, attendance at the UN Environment Assembly and engagement with the UN Climate Conference (COP).

This week’s mission had multiple goals, including to:

• Educate FAO staff, policymakers and thought leaders on U.S. dairy’s commitment to being a sustainable source of nutrition for the world and on the essential role trade plays in global nutrition security.
  
  
• Elevate the voice U.S. dairy producers in global policy-setting platforms and create new farmer-focused global partnerships.
  
  
• Strengthen and grow relationships with international dairy industry leaders who recognize the importance of trade, animal-sourced foods, and science, innovation and technology to increase production of nutrient-dense foods while simultaneously decreasing the use of natural resources.

USDEC President and CEO Krysta Harden led the delegation, which also featured USDEC Chair Alex Peterson and Vice-Chair Becky Nyman; DMI Chair Marilyn Hershey; and USDEC Executive Vice President for Policy Development Jaime Castaneda, Senior Vice President for Sustainability and Multilateral Affairs Nick Gardner, and Vice President for Sustainable Nutrition Janice Giddens.

The full USDEC delegation at FAO offices in Rome.

Why it’s important
“Proactive global engagement like this helps USDEC and the U.S. dairy industry shape policies, enhance the U.S. reputation and protect U.S. dairy’s license to operate around the world,” said Harden. “We continue to engage with the UN and its membership because the UN recommends policies that many countries adopt into national law. We want policymakers at the UN to support science-based decision making that recognizes the critical role of U.S. dairy exports in sustainable food systems.”

Over the first two days of the trip, the delegation met with FAO directors and staff from the Office of Climate Change, Biodiversity and Environment; Agrifood Economics Division; Markets and Trade Division; Partnerships and Collaboration; and the U.S. Ambassador to the UN Agencies for Food and Agriculture.

In addition to FAO officials, the delegation held bilateral discussions with representatives from more than a dozen UN member states, including Argentina, Australia, Brazil, Canada, Chile, Kenya, Malaysia, Mexico, Nigeria, Panama, the Philippines, South Africa and the UK. Many of the countries are major markets for U.S. suppliers and/or highly influential in global food systems discussions. Building stronger relationships with them will help USDEC be more successful in promoting the important role of trade, livestock production and animal-sourced foods in achieving global nutrition and sustainability goals.

The meetings offered a unique opportunity for FAO officials and member states to hear directly from U.S. farmers. Using examples from their own farms and businesses, Peterson, Nyman and Hershey outlined how they contribute to a more healthy, sustainable food system through practices that produce nutritious U.S. dairy products with an ever-smaller environmental impact. They also offered first-hand knowledge and practical input on how the UN can support nutrition security and strengthen rural communities around the globe.

The goal of increased farmer engagement in global food systems discussions was further served by a new Memorandum of Understanding (MOU) Harden signed with the World Farmers’ Organization (WFO) on April 30 (see story below, “USDEC signs MOU with World Farmers Organisation,” for more details).

Jeffrey Prescott (center), U.S. Ambassador to the UN Agencies for Food and Agriculture in Rome, flanked by (left to right) Alex Peterson, Marilyn Hershey, Becky Nyman and Krysta Harden.

IDF and Assolatte
Over the final two days of the mission, the delegation traveled north to meet with Piercristiano Brazzale, CEO of Brazzale Foods and president of the International Dairy Federation; Paolo Zanetti, chairman of Italian dairy organization Associazione Italiana Lattiero Casearia (Assolatte); and Attilio Zanetti, president and CEO of Italian cheesemaker Zanetti S.P.A.

USDEC and NMPF signed an MOU with Assolatte in 2023 to work together to promote the nutritional benefits of dairy products and support dairy-friendly policies in global and international forums (see Global Dairy eBrief, 7/28/23). This week’s meetings, which included tours of a Zanetti facility, sought to align 2024 activities under the MOU, strengthen the relationship, and discuss ongoing and new opportunities to deepen collaboration that will help to protect dairy terms.

USDEC signs MOU with World Farmers Organisation
During the mission to Italy, USDEC signed a memorandum of understanding (MOU) with the World Farmers’ Organisation (WFO), a global association whose primary members are national farmer organizations from around the world. The group represents farmers from more than 54 countries in relevant international forums that make decisions about the present and future of farming, including ongoing global dialogues on agriculture, nutrition and sustainability.

While USDEC has informally collaborated with WFO over the last couple years, the new MOU seeks to deepen coordination to support greater farmer representation in global policymaking, promote the role of international trade in delivering sustainable food systems and elevate the focus on nutrition security in climate conversations.

“With the world facing the simultaneous crises of increasing nutrition insecurity and climate change, now is the time for a partnership like the one USDEC signed today,” said USDEC President and CEO Krysta Harden in a joint press release with WFO. “This collaboration with WFO will bring our organizations together to support effective global policy frameworks informed by farmers.”

“It is critical for USDEC to work with partners like WFO,” added Alex Peterson, Missouri dairy farmer and USDEC chair. “This MOU will help ensure decision-makers hear from farmers and see tangible evidence that U.S. dairy responsibly produces the nutrient-dense foods people need while taking meaningful action to optimize our sector’s environmental footprint.”

WFO Secretary General Andrea Porro and USDEC President and CEO Krysta Harden sign the MOU strengthening the collaboration between the two groups in support of U.S. dairy farm and trade priorities.

USDEC welcomes progress on farm bill
USDEC commended reports from the House and Senate Agriculture Committees that the farm bill process is advancing. USDEC President and CEO Krysta Harden issued this statement regarding the progress:

"As both committees continue their consideration of policies for the next farm bill, dairy exporters are eager to see a doubling of funding for the Market Access Program (MAP) and Foreign Market Development program (FMD) to support further expansion of the sale of American-made dairy products around the world, to ensure that the bill establishes a robust new process for safeguarding common food and beverage names in international markets and to enhance USDA’s participation in the decision-making process regarding global food aid programs.

"We look forward to working with both committees to support progress on these key priorities for U.S. dairy producers and processors.”

U.S. sets cheese export record in March; milk powder down; whey mixed
After a strong year-over-year (YOY) performance in February, U.S. dairy exports slipped back into the red in milk solids equivalent (MSE) terms in March. YOY MSE volume fell 7% despite surging U.S. cheese sales and gains in high-protein whey, milk protein concentrate and whey permeate.

The biggest positive highlight in March was cheese. YOY U.S. cheese shipments jumped 20% (+8,494 MT) to 50,022 MT, marking the first time volume ever topped 50,000 MT in a single month. Mexican demand remained strong, with YOY March shipments up 8% to 15,284 MT, but growth was geographically broad based, including the first increase in YOY cheese sales to South Korea in more than a year (+132%, +3,963 MT), a 128% jump to the Middle East (+2,472 MT), and a 52% increase to Japan (+1,734 MT).

In addition to cheese, U.S. WPC80+ exports continued their hot streak in March. YOY shipments jumped 32% (+2,153 MT), also with widespread geographic success: Japan +61% (+603 MT); India up more than 10-fold (+623 MT), Southeast Asia +55% (+354 MT), China +29% (+525 MT), and Canada +77% (+598 MT).

NFDM/SMP found less success in March. U.S. NFDM/SMP shipments fell 18% (-14,335 MT) as sales trends to the top two U.S. markets—Mexico and Southeast Asia—continued to diverge.

YOY U.S. low-protein whey exports fell 8% (-4,081 MT) in March to 45,366 MT. Decreased demand from China remains the overwhelming cause for the ongoing U.S. low-protein whey slump. However, there were a couple of optimistic signs in the category: 1) total U.S. volume for March was the highest since March 2023; 2) whey permeate demand (using the “modified whey, not elsewhere specified” HS code as a proxy) appears to be slowly working its way back. U.S. shipments of whey permeate have grown in volume for three straight months, and March YOY shipments increased 12% (+1,595 MT).

For more detailed coverage—particularly of cheese and NFDM/SMP—click on the U.S. Dairy Exporter Blog story, “March exports slip 7% on mixed results.” Also, experiment with the interactive charts under the U.S. Exports tab in the USDEC Data Hub.

Morris, Loux gather insights on global dairy policy and economic developments, Canadian dairy industry at IDF
USDEC Executive Vice President, Trade Policy and Global Affairs Shawna Morris and Senior Vice President, Global Economic Affairs Will Loux were in Toronto last week for a meeting of the International Dairy Federation’s (IDF’s) Standing Committee on Dairy Policies and Economics. Loux was elected vice chair of the committee at the previous committee meeting in October 2023, and Morris attended as U.S. IDF lead representative.

The meeting provides a forum for members of the global dairy community to assess economic trends and policy developments across key markets, identifying common challenges and areas of potential collaboration to address them.

In addition to the discussions, the host country of the meeting provides a deeper dive into key dairy-related policies in that country. Given the long history of policy-related trade issues between the United States and Canada, USDEC took the opportunity to learn more about Canadian dairy developments and policies.

 

USDA extends application deadline for Colombia ag trade mission
USDA’s Foreign Agricultural Service (FAS) extended the deadline to next Friday May 10 for applications to join the agency’s upcoming trade mission to Bogota, Colombia, the largest U.S. dairy customer in South America. USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor will lead the mission from Aug. 13-15.

Calling Colombia “a top-tier food and agricultural export destination for American farmers, ranchers and processors,” Taylor pointed to the country’s favorable demographics, economic expansion and increasingly modern food retail system as factors that create a fertile environment for U.S. dairy agricultural exports.

FAS-sponsored international trade missions aim to connect U.S. agricultural suppliers with prospective customers, giving U.S. companies the opportunity to forge relationships, gather market intelligence and generate sales. Attendees will meet with potential importers from across Colombia and have opportunities to engage with USDA leadership. FAS and trade experts will provide market briefings and organize site visits and other networking opportunities. For more information on the trip, click here. The online application form is available here.

 

Download USDEC’s latest International Demand Analysis
Even after adjusting for an extra day, global dairy trade posted a surprisingly positive February, climbing 11% year-over-year, according to USDEC’s latest International Demand Analysis. Most major products and regions either grew or were close to neutral. The Middle East/North Africa (MENA) and Southeast Asia led the gains, with volume up 38% and 13%, respectively. Even China managed a 2% increase.

For the first time in over a year, year-over-year exports rose from all the three top suppliers—the U.S., New Zealand and the EU. Whether this momentum can continue remains an open question, but global trade is at least moving in the right direction again.

The International Demand Analysis is packed with charts, graphs and commentary, providing members with a forward-looking glimpse at world markets from a U.S. exporter’s point of view. The report analyzes demand in the key markets for cheese, NFDM/SMP, whey (HS Code 0404.10) and WPC80+, and also includes shorter summaries for lactose, butterfat and WMP. For questions and comments, please reach out to William Loux (wloux@usdec.org) or Stephen Cain (scain@nmpf.org).

IMF raises economic growth forecast
For the second time this year, the International Monetary Fund (IMF) raised its global economic growth forecast. Citing “unexpected economic resilience” in key advanced and emerging markets, the organization expects global economic activity will expand 3.2% in 2024 (up from its 3.1% estimate in January and its 2.9% forecast last October).

The U.S., India, Brazil and Russia are leading the growth. Since its January forecast, IMF increased its U.S. and Russian economic growth estimates by 0.6 percentage points each, Brazil by 0.5 and India by 0.3—all sizable gains. However, the picture is not all positive.

The pace of expansion is still low by historical standards. The latest forecast for global growth five years from now––at 3.1 percent––is at its lowest in decades. Inflation continues to ebb but at a slow pace, and IMF said, central banks still need to navigate a tricky interest-rate balancing act to ensure a return to lower long-term inflation levels. Geopolitical concerns, trade tensions, worries about the strength of China’s economic recovery, and lagging growth in low-income nations have the potential to strengthen global economic headwinds.

 

USDEC makes 82 Export Guide document updates in April
The MARA team updated or revised 82 documents in the USDEC Export Guide last month. Here are some highlights:

Volume 1: Tariffs and Classification

• GCC countries (minus Saudi Arabia): Modified tariff classifications for milk powder of 0402 and food preparations of 1901.90.
  
  
• EU and New Zealand: EU-New Zealand FTA noted as active following May 1 implementation.
  
  
• UK: Eliminated tariffs on certain processed food categories in 1901.90 and 2106.90.

Volume 2: Import Requirements

• India: U.S. Dairy Plant Registration or Approval is modified to indicate that FDA will be assuming responsibility for the plant registration following FSSAI’s notice that firms must be registered by September 1.
  
  
• Israel: Modified to indicate that exporters should obtain the AMS sanitary certificate rather than the VS 16-4 for shipments of dairy products for human consumption.

Volume 3: Labeling and Product Standards

• Australia and New Zealand: Noted implementation date of Plain English Allergen Labeling (PEAL) requirements and grace period.
  
  
• EU: Added details on an amendment to the EU identification mark labeling requirement (plant number from EU list and country of origin) which states that the term “EU” must not be included on labels of goods originating outside of the EU.
  
  
• New Zealand: Added Geographical Indications information following the implementation of the New Zealand-EU FTA on May 1.

Every month, USDEC’s Market Access team emails a list of guide updates to interested members. If there is anyone at your company who should be included on the distribution list for that email in the future, please contact Jessica Smith at jsmith@usdec.org.

 

Jasper Hill, Panhandle join USDEC membership ranks
USDEC is pleased to welcome cheese supplier Cellars at Jasper Hill Farm and cheese and whey manufacturer Panhandle Products as the newest U.S. Dairy Export Council members.

The Cellars at Jasper Hill Farm, a division of Jasper Hill Farm, is an innovative 22,000-sq.-ft. underground facility in Greensboro, Vermont. It was constructed to provide cheese aging expertise and distribution and marketing services for local cheesemakers. The artisan cheese aged in the facility is made by Jasper Hill Creameries and several other local producers. The company joined USDEC to gain export assistance as it continues to develop and grow its export programs. For more information, please visit the Cellars at Jasper Hill Farms website. Katie Losito, president, will serve as the USDEC director.

Panhandle Products is an American-style cheese and whey protein powder processor based in Dumas, Texas, with a focus on the global marketplace. The company was founded in 2021 and completed the Dumas facility and commenced production in 2023. Panhandle joined USDEC to gain export assistance as it expands its WPC business. For more information, please visit the company website. Alex Mikhalin, assistant QA manager, will serve as the USDEC director.

 

Darigold names Huttema CEO
Darigold named Allan Huttema as its CEO. Huttema had been appointed interim CEO in December to replace Joe Coote, who left the dairy company to return to his native Australia. Huttema has been an Idaho dairy farmer and Northwest Dairy Association member-owner for more than 25 years. The board said it chose Huttema for continuity of leadership and because it believed “a strong connection between the company and its farmer-owners is important as we look to complete our Pasco project and build the on-farm capacity we will need as we begin operations there.”

Prior to being named interim CEO, Huttema served as a Darigold director for nine years and chairman for the previous three. Tony Freeman, who had been vice chairman of the board, was chosen to replace Huttema as new chair. (Company reports)

Milcobel to restructure
Following extensive 2023 losses, Belgium-based dairy cooperative Milcobel said it will reorganize the company to make it more flexible, efficient and resilient for the future. A statement from the company, which saw a net loss of 3.7% in 2023, cited rising costs and the turbulent dairy market for the need for flexibility, adding that the major financial impact the company incurred from the implementation of an SAP software package in its Consumer Products division revealed the need for a “different organizational structure in order to achieve greater synergies.” The reorganization plan includes integrating its dairy units to work together more efficiently in a flatter structure, and scaling back milk powder activities beginning in September of this year. (Company reports)

Irish corporate report roundup
Challenging global market conditions ranging from inflation to growing market competition weighed on Irish dairy companies in 2023, as is seen in their most recent financial performance results.

• In its latest annual report, Ireland’s Lakeland Dairies saw 2023 revenues drop €300,000 to €1.6 billion (about US$1.7 billion) and operating profits sink from €32.5 million (about US$35 million) to €14.8 million (about US$16 million), compared to the previous year. The dairy processing co-op said these results were significantly influenced by the “global dairy market collapse.” The co-op said its Food Ingredients business had been “most exposed” but that its Consumer Foods division saw “solid demand throughout the year on the domestic front and inroads being made internationally.” Looking forward, Lakeland Dairies Chairperson Niall Matthews said recent market volatility and regulatory and policy uncertainty has prompted the co-op to shift its strategic focus. “Following rapid dairy industry growth and the expansion of milk production and processing over the past decade, the industry is transitioning from a supply volume perspective into more value-added product positioning,” he said. “We are making very definite steps to move up the value-add chain to support the long-term operations of our farm families.”
  
  
• In its FY 2023 results, Irish dairy cooperative Ornua reported turnover dipped almost 1% from 2022, and operating profit dropped by 8%. The owner of the Kerrygold brand called the results a “strong performance” in light of “continued market pressures and evolving consumer demand and buying behavior across all key markets.” As part of its efforts to grow the brand globally, Ornua opened a new flagship butter production facility in 2023 that doubled its Kerrygold Park cream processing capacity, enabling it to produce nearly 1 million retail packs per day. Looking ahead, the company said it expects the dairy market will stabilize in the first half of the year before firming in the second half, and that global milk pricing is likely to be stable for 2024.
  
  
• Ingredient, flavor and cheese producer Carbery Group also reported a decline in turnover and operating profit for 2023. Group turnover for the company was down 11% from 2022, and Group EBITA dropped 22% from the previous year, results the company characterized as “resilient in an unpredictable market.” Factors cited by the Cork-based company as affecting performance included consumer cost-of-living concerns, high dairy supply from 2022, geopolitical tensions and supply chain disruptions. The company report noted the opening of the Carbery Group Asia Business and Innovation Centre in Singapore as a “significant investment in the region.”
  
  
• In its FY 2023 annual results, Aurivo Dairy Ingredients reported revenue down by 16.4% compared to its record year in 2022, and operating profit off by 71.4%. While the company said its Dairy Ingredients business experienced a “very tough” 2023 due to market conditions, its commercial and new product development team continues to “implement our strategic goal of broadening our product range and the customers we serve.” Examples noted in the report include growth in Central America, the Middle East and Southeast Asia, which now make up more than 40% of annual sales, and two new Aurivo powder brands that are gaining traction in global markets.
  
  
• Arrabawn reported a 20% drop in 2023 turnover and a record operating profit that jumped 12.5% from the previous year. The co-op cited difficult weather conditions and high input costs for the revenue drop but said despite falling markets, 2023 was “one of the most successful in the history of Arrabawn.” CEO Conor Ryan said performance was aided by substantial investments made to Arrabawn’s manufacturing business, including a new entrance and milk intake area at its headquarters. Looking forward, he said the company hopes to complete upgrades to the plant this year, and that “our capacity and ability to produce a range of dairy ingredients on the Nenagh site allows us to widen our network of customers and markets.” (Company reports)

Mergers, acquisitions and joint ventures
Minneapolis-based General Mills is reportedly exploring the sale of its North America yogurt business, which includes its Yoplait brand. Insiders estimate the deal could potentially be worth $2 billion. … After buying a 10% stake in Lithuanian dairy business Rokiškio Sūris in 2017, New Zealand dairy cooperative Fonterra said it will sell its shares as part of a “strategic long-term review of investments.” Rokiškio Sūris, which makes butter, cheese, milk powders and whey protein, plans to buy back the shares, which are valued at €7.9 million (about US$8.5 million), this month. … Simply Good Foods, a Denver-based developer, marketer and seller of branded nutritional foods and snacking products, announced it will purchase Only What You Need (OWYN), a leading plant-based ready-to-drink protein shake brand, for $280 million. … Chinese billionaire Xianfeng Lu and his Moon Lake Investments business plan to sell Australia’s largest dairy farming operation. Moon Lake purchased dairy producer Van Diemen’s Land Co. (VDL) in 2016, but has faced significant criticism about effluent issues, alleged animal welfare practices and farm management problems. The businessman has already sold off around half of the land (originally 47,000 acres) and more than a quarter of VDL’s estimated 19,000 dairy cows. After Fonterra cancelled a major milk supply contract with the company this February, it has reportedly culled at least another 700 head. (Company reports; Australian Financial Review, 4/29/24; Reuters, 4/26/24; The DairyNews, 4/19/24)

Company Briefs
As part of increasing efforts to develop products for the growing number of young, single Chinese consumers who live alone, Pizza Hut China reportedly launched a new product called a Pizza Burger. The burger, which includes bread made from pizza dough and topped with mozzarella and parmesan cheeses, is available in four flavors. … Saudi Arabi’s Almunajem Foods Co. is building a $42-million food factory to produce meat and dairy products. The company did not offer details on what types of dairy. It expects to complete construction in the first quarter of 2026. (USDEC China Office; USDEC Middle East/North Africa office)

• Delegation of U.S. dairy leaders kicks off meetings with senior FAO and member state officials
• USDEC welcomes opportunity to meet with FAO directors for environment, economics and trade
• Important discussions with Rome-based representatives from across Latin America  
• USDEC signs MOU with World Farmers’ Organisation to help elevate the voice of farmers in policy discussions
• U.S. dairy leaders meet with the U.S. Ambassador to UN Agencies in Rome