HIGHLIGHTS: JANUARY 19, 2024
• USDEC talks with China’s ag minister
• Letter thanks U.S. government for Codex leadership
• USDEC joins Alliance for Sustainable Packaging for Food
• First-quarter ingredient events slated for Southeast Asia
• Market Summary: GDT going strong
• Algeria replaces milk powder destroyed in warehouse fire
• New Zealand reports shipping delays due to ongoing canal attacks
• East Coast dockworker contract expiration on the horizon
• FrieslandCampina Ingredients lists 2024 dairy trends
• Tirlán’s thoughts on Asia-Pacific opportunity
• Company news: Starbucks, Food Union Europe, Danone
Featured
USDEC speaks up for U.S. dairy at roundtable with China’s ag minister
USDEC
COO Martha Scott Poindexter emphasized U.S. dairy export priorities
this week at a roundtable discussion with China’s Agricultural Minister
Tang Renjian. The event was hosted by the U.S. China Business Council
and she was joined by Shawna Morris, USDEC executive vice president,
Trade Policy and Global Affairs.
Poindexter
highlighted the high value the U.S. dairy industry places on its trade
relationship with China, calling the country a “priority partner” for
the United States. With China’s cooperation, the U.S. dairy sector is
eager to grow its role as a supplier of the full spectrum of sustainably
produced, high-quality dairy products, from milk powders to whey to
cheese to lactose to infant formula.
Larger role for U.S. dairy
China
currently relies too heavily on New Zealand as its primary dairy supply
source, Poindexter suggested. Diversifying its supply base would help
ensure that Chinese customers and consumers have a variety of reliable
sources for the foods and beverages they seek. The U.S.-China dairy
trade relationship has ample room for growth, particularly in products
like cheese and skim milk powder, where U.S. suppliers are
underrepresented. Poindexter asked how the U.S. can work with China to
support a greater role for U.S. dairy suppliers.
Phase 1 trade commitments
The
U.S.-China Phase 1 Agreement contained important commitments related to
facility approvals and common name protections. Poindexter touched on
both topics.
On
facility registration, Poindexter expressed appreciation for the fall
2023 dairy facility renewals while underscoring the importance of timely
updates to the list of authorized importers. Phase 1 called for China
to update its facility list within 20 days of notification by the U.S.
Food and Drug Administration of any update needs. Last year, that
process took several months.
For
common names, Poindexter pointed to the need for consistency in how
China treats common names. Prior Agriculture policy preserving common
names should not be allowed to be undermined by China’s intellectual
property office taking a contrasting position. Failing to do so, she
noted, would grant EU exporters monopoly rights over certain widely used
terms, (including parmesan) at the expense of other trading partners,
Chinese buyers and, ultimately, Chinese consumers.
USDEC-led letter thanks U.S. officials for leadership and success at recent Codex meetings
Members of the Food Industry Codex Coalition (FICC), led and facilitated by USDEC, sent a letter
from 22 agriculture and food associations this week to a group of six
U.S. cabinet chiefs. The letter commends their efforts and the work of
their staffs in defending U.S. positions at the 85th Codex Executive Committee and 46th Session of the Codex Alimentarius Commission (CAC).
“Codex’s
commitment to science-based decision making, risk assessment,
transparency and participation by all relevant stakeholders makes it
exceptional and so critical to U.S. food and agriculture producers,” the
letter states. “Yet, these commitments are increasingly being
challenged by certain international stakeholders that seek to advance
their national or regional trade agendas, try to push Codex beyond its
scope and mandate, and/or undermine other foundational Codex values.
United States leadership and resolute engagement in Codex is needed now
more than ever.”
The 46th
CAC delivered key positive Codex outcomes, many of which USDEC has
engaged on over the last five-plus years, due to the successful
execution of the U.S. interagency Codex strategy developed under the
leadership of USDA. In particular, the meeting resulted in the
successful prevention of revisions to key portions of the Codex
Procedural Manual ensuring Codex will adhere to science and risk-based
decision-making in the future.
The
letter specifically calls out individuals from USDA, USTR, the State
Department, the U.S. Codex Office, as well as other members of the U.S.
delegation to CAC. The organizations also asked USDA, the State
Department, the Department of Commerce, USTR, the Environmental
Protection Agency and the Department of Health and Human Services to
continue to empower their respective staffs to dedicate their time,
resources and talents to ongoing Codex issues.
USDEC joins Alliance for Sustainable Packaging for Food
USDEC
has partnered with a coalition of industry associations and
non-governmental organizations to form the Alliance for Sustainable
Packaging for Foods (ASPF). The ASPF brings together a diverse group of
global stakeholders to advocate for a holistic and harmonized approach
to the development of new food packaging regulations to achieve more
sustainable food systems without compromising on food safety and public
health. Initial efforts will focus on the EU, which is in the final
stages of developing a new sustainable packaging regulation, and Canada,
which is in the earlier stages of its legislative effort.
The organization’s new website
details the alliance’s key principles and an analysis of published
peer-reviewed studies focusing on the role of packaging in food safety
and food loss/waste. Sandra Benson, vice president of Market Access and
Regulatory Affairs, will serve on the executive committee.
Events
Check out USDEC Southeast Asian ingredient marketing events on tap for early 2024
USDEC has posted information on three first-quarter marketing activities slated for Southeast Asia.
- USDEC is sponsoring a symposium within the 17th Thailand Congress of Nutrition,
which takes place March 6-7 in Bangkok. About 800 nutritionists,
dieticians, academics and students are expected to attend the
conference. The USDEC-sponsored symposium will feature a Thai nutrition
expert focusing on how dairy proteins can support a healthy and active
lifestyle.
- On March 12, USDEC will kick off this year’s B2B customer education and outreach efforts with “Signposts for 2024”—a
virtual, region-wide dairy market outlook webinar. The event targets
Southeast Asian food and beverage buyers and end-users. Presenters from
USDEC's global economic affairs team and Southeast Asia office will
explore U.S. and global supply and demand, export expectations for 2024,
and what it all means for opportunities for U.S. dairy customers in
Southeast Asia.
- USDEC’s first ingredient innovation workshop of 2024
will take place at the U.S. Center for Dairy Excellence (U.S. CDE) in
Singapore on March 27-28. The workshop will focus on bakery innovation,
targeting Malaysia and Thailand, but food and bakery formulators from
across the region are invited. Through classroom education and
interactive training elements, USDEC staff will demonstrate to attendees
how to create Southeast Asia-friendly bakery applications with U.S.
dairy proteins, permeate and milk powder.
For more information on any of these activities, please contact Suzanna Stohr at sstohr@usdec.org or visit the Marketing Events
section at usdec.org. Also, for a visual overview of prior USDEC
nutrition outreach and innovation activities in Southeast Asia, peruse this video covering September 2023 Nutrition Week activities.
Market Summary
GDT continues to rise
The
Global Dairy Trade (GDT) Price Index gained 2.3% at the Jan. 16
auction, marking the fourth straight increase. Market sentiment is
clearly on an upward swing as all products except mozzarella posted
gains. But the current run of price hikes are increasingly looking like
they are due more to growing concerns about milk supply than they are
about reenergized demand.
Volume
of WMP, SMP, AMF and cheddar were all below the previous auction and
the same auction the previous year (although the latter was a given,
since pre-auction allocations were significantly below the previous
year). North Asia (China) disappointed again, although it still led all
buyers in SMP, butter and lactose. The Middle East, however, led all WMP
buyers, purchasing more than the previous auction and the same auction
last year. Southeast Asia led cheddar purchasing and South/Central
America purchased the most AMF.
Product
by product, SMP rose 1.2% to US$2,638/MT after two straight auction
declines. WMP increased 1.7% to US$3.353/MT, marking its ninth increase
in the late 10 auctions. Butter led all gainers, jumping 5.8% to
US$5,906/MT. The average winning butter price is up 22% since the Nov.
21, 2023, auction. AMF increased 4.3% to US$5,842/MT. Cheddar and
mozzarella went in opposite directions, rising 1.0% (to US$4,217/MT) and
falling 3.3% (to US$3,830/MT), respectively.
Warehouse fire boosts Algerian milk powder purchases
A
fire at an Algerian storage warehouse on Dec. 31 destroyed a
significant quantity of recently purchased milk powder. The exact amount
of lost powder was not reported, but sources speculate it was likely in
the area of 12,000 MT. The first prompted Algeria’s buying agency,
ONIL, to hold a new tender for approximately 20,000-25,000 MT of SMP and
15,000 MT of WMP earlier this month. Most of the SMP volume went to EU
suppliers, while Europe, New Zealand and South America won the WMP
volume. Product prices were reported to be about US$3,050/MT CFR Algeria
for SMP and US$3,700-$3,800/MT CFR Algeria for WMP.
Supply Chain
Shipping disruptions delaying New Zealand dairy exports by up to three weeks
Ongoing
drought in the Panama Canal and military conflict in the Red Sea are
causing some New Zealand dairy exporters to increase cargo transit times
to international markets by up to three weeks. In Panama, canal
officials have decreased the number of ships passing through the
waterway each day, and the resulting backup has caused some New Zealand
cargo to be delayed. Other New Zealand vessels are rerouting around
Africa’s Cape of Good Hope to avoid attacks by Houthi rebels on
commercial ships trying to access the Suez Canal. Dairy giant Fonterra
said it believes the congestion and delays could last for some time, and
that the company is working to prioritize and manage orders to minimize
their effects.
Red Sea update
Despite
warnings from military and trade authorities to stay away from the Red
Sea, many ships continue to travel through the Suez Canal. Carriers
including Evergreen, HMM, OOCL and COSCO are still moving through the
waterway, even after a U.S.-owned merchant vessel carrying steel
products was hit by a Houthi missile in the Gulf of Aden this week. No
one was injured and the ship continued its journey, but the attack
prompted the U.S. Department of Transportation to warm U.S. merchant
ships to avoid the Red Sea until further notice. After initial
airstrikes at the end of last week, U.S. and UK military forces
continued its attacks against the Iran-backed Houthis this week in an
effort to keep the waterway safe.
The
Houthis vow to maintain their Red Sea actions for the duration of the
Israel-Gaza conflict. The attacks and subsequent uncertainty have
triggered rate heights, surcharges and insurance challenges, driving
shipping costs higher. The situation is also prompting fears of rising
inflation and empty container shortages due to port congestion,
dislocation and increased demand for alternate rail, road, air and sea
services. (Farmers Weekly, 1/17/24; Bloomberg, 1/15/24; Supply Chain Dive, 1/16/24)
Concern growing over potential for U.S. East Coast, Gulf port problems this fall
With
the West Coast dockworkers’ port contract well in the review mirror and
the New Year having dawned, it’s time to turn attention to the upcoming
East and Gulf Coast labor contract. The labor contract between the
International Longshoremen’s Association (ILA) and the United States
Maritime Alliance (USMX) expires on Sept. 30. Negotiations between USMX,
which represents employers at 36 ports on the east and Gulf coasts, and
ILA, which represents roughly 70,000 dock workers, began last February
but have been on hold for several months. Sticking points include worker
pay increases, work allocation and automation. Talk of potential
strikes has already begun, but much time remains for the two sides to
strike a deal. (The Loadstar, 1/15/24)
Company News
FrieslandCampina reveals nutrition trends for 2024
FrieslandCampina
Ingredients has identified key trends it says will shape the coming
year in the food, drink and supplement industries, as consumers turn to
nutrition as a source of comfort and control in a tumultuous world. In
its “Nutritional Trends 2024”
report, the Dutch dairy cooperative says an increased focus on healthy
eating will manifest itself in nutrition trends including: sustainable,
planet-first nutrition; accessible and tailored nutrition for all;
innovation in alt proteins; advancing gut health; and healthy ageing and
recovery. (Company reports)
Meiji increases investment in Danone tablet formula plant in Ireland
Japan’s
Meiji is nearly doubling its investment in Danone’s infant formula
production facility in Wexford, Ireland. The company added €10.5 million
(about US$11.4 million) in new funding, pushing its total investment in
the facility to €22.5 million (about US$24.5 million). The money will
go toward increasing capacity to meet rising demand for the product,
which was rolled out in to several European markets in 2022. (Just Food, 1/11/24)
Tirlán offers thoughts on dairy opportunity with Asia
Ann Meaney, Tirlán’s head of ingredient marketing, recently sat down with editors from DairyReporter for a Q&A on dairy ingredient trends and opportunities in the Asia-Pacific region. Click here
to read Meaney’s thoughts on nutrition, innovation, the marketing
advantages of “grass-fed” and more. Glanbia Ireland and Glanbia Co-op
changed their name to Tirlán in late 2022. (DairyReporter, 1/11/24)
Mergers, acquisitions and joint ventures
Hong Kong-based investment firm PAG Private Equity agreed to acquire a controlling stake in Food Union Europe,
a Latvia-based provider of ice cream and frozen dairy treats to
consumers in Latvia, Estonia, Lithuania, Denmark, Norway and Romania. (Company reports, 1/10/24)
Company News Briefs
Tata Starbucks,
the joint venture between Starbucks and India’s Tata Consumer Products,
said it plans to add 1,000 new stores in India by 2028. The expansion
plan involves entering some of India’s Tier 2 and 3 cities, increasing
staff to roughly 8,600 people, and expanding the venture’s drive-thru,
airport café and 24-hour store offerings. … Danone
plans to shut down its dairy and plant-based yogurt facility in Parets
del Vallès, north of Barcelona, Spain, in a move aimed at improving
manufacturing efficiencies. It did not reveal a timeline, but news
reports say the company is already looking for a buyer for the plant. …
As part of the country’s efforts to boost earnings by farmers, Kenyan
President William Ruto commissioned a new Kenya Cooperative Creameries
(KCC) factory in Nyahururu that’s expected to process at least 150,000
liters of milk a day. Ruto also directed KCC to begin paying farmers
KSh50 (about US$0.31) per liter for milk beginning March 1, up from the
current KSh 40 (US$0.25). … Paris-based food technology startup Standing Ovation, which is backed by Bel Group,
received €3 million (roughly $US 3.3 million) in public sector funding
to increase its production of animal-free casein from precision
fermentation. (Just Food, 1/12/24; Green Queen, 1/12/24; Inside Retail, 1/10/24; Office of the President of the Republic of Kenya, 1/10/24)
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