USDEC annual meeting to be virtual Oct. 12-15
After thorough consideration and consultation with the USDEC Operating Committee, the 2020 Annual Meeting will be all-virtual. With the health, safety and wellness of our members and staff of primary concern—and given meeting and travel restrictions and ongoing uncertainty related to COVID-19—it was determined that the virtual route is the best option for this important U.S. dairy exporter get together.

We have learned, like most people in business this year, the advantages and limitations of webinars, conferences and other virtual meetings. And we believe we have created a framework that will maximize our ability to communicate important USDEC developments and useful export business information and interact with members while not over-taxing your real or figurative bandwidth.

Preliminary details
The meeting's general sessions will be held for about 2.5 hours per day over the course of three days, Oct. 13-15. The Trade Policy Committee meeting will take place on Oct. 12, prior to the general sessions, and last about 1.5 hours.

While we are still finalizing the agenda, the presentations will feature what you have come to expect from USDEC board meetings: expert analysis of markets, updates on cheese and ingredients programming, state-of-play reviews of trade policy and market access developments, appearances from USDEC overseas representatives (with a specific focus on Mexico), votes on USDEC business (leadership elections and the 2021 Business Plan), and at least one high-profile outside speaker.

Watch your inbox in the coming weeks for more details.

All Member Webinar: A look at 2021 growth plans
How does USDEC plan to open markets, facilitate trade and build demand for U.S. dairy overseas in what we expect will be a challenging post-COVID business environment in 2021? Join us for the annual USDEC All-Member Webinar on Aug. 26 at 2:00 p.m. ET to find out.

USDEC staff will review the 2021 Business Plan in each of their respective sectors:

• Angélique Hollister on cheese programs
• Vikki Nicholson-West on ingredients programs
• Jonathan Gardner on the market access plan
• Shawna Morris on the trade policy strategy

In addition, USDEC’s Alan Levitt and William Loux will review market assumptions and market expectations for the coming year, and Jonathan Gardner and Jaime Castaneda will offer updates on, respectively, the latest market access and trade policy developments from around the world. Multiple Q&A periods will allow you to ask questions on USDEC plans, programs and priorities.

If you haven’t already received a copy of the 2021 Business Plan—“Resolved, Resilient and Reimagined: Navigating Through Adversity to Opportunity”—please download it here, jot down any questions and join us for the discussion.

Register for the webinar here.

Join USDEC demo of the new Volume 1 Export Guide system
USDEC recently launched a complete overhaul of Volume 1 of the USDEC Export Guide, merging current year tariffs in the former Volume 1 module with the competitive trade agreements and future tariff reduction schedules of the Trade Agreements module, and the classification guidance in the Tariff Classification Guide module. The goal was to put all information related to tariffs, taxes and classification in one location.

Join the MARA team on Tuesday, Aug. 25, from 2:00-3:00 p.m. ET for a walkthrough and overview of the new Volume 1 system. To register, email Bryan Jacoby at bjacoby@usdec.org. A meeting invite will be sent to those interested at a later date. We are excited to share the changes and updates to the system with membership.

Gain valuable insights into dairy’s sustainability credentials
Dairy is in the crosshairs of many activist organizations who often omit or distort the industry’s long-standing focus on sustainability. An Aug. 26 webinar organized by the Inter-American Institute for Cooperation on Agriculture (IICA) in conjunction with Global Dairy Platform (GDP) and USDEC aims to underline dairy’s genuine and important role in maintaining a responsible and sustainable food system.

Expert speakers will explore the latest dairy developments in areas including environmental stewardship, animal care, community and economic development, and nutrition and food safety. Manuel Otero, IICA director general; Rick Smith, chair of the GDP board and president and CEO of Dairy Farmers of America; and Tom Vilsack, USDEC president and CEO, will open the event with a short introduction highlighting the dairy sector’s sustainability credentials.

For more information on the webinar, go to the IICA events page for “Dairy’s Role in a Responsible and Sustainable Food System.” There you can find a program agenda, description and speaker list. That same link is also where you would go on Aug. 26 at 11:00 a.m. ET to watch the live transmission of the event.

Markets still in holiday mode
Market activity remains light.

EU prices are mostly lower. Oceania prices are softer, with lower U.S. powder prices a drag on the world market. In addition, butter has sunk to a four-year low, and WMP has backed off after touching US$3,200/ton a few weeks ago—a level that has served as an unofficial price ceiling over the last five years.

With most countries reporting, we estimate EU-28 milk deliveries in June were up about 1.1%, following flat collections in April-May. In the first half of the year, EU-28 deliveries were up about 0.7%.

Among the five major suppliers (EU, U.S., New Zealand, Australia and Argentina), collections in the first half were up about 1.1% from a year ago.

If line is trending up, currency is strengthening vs. U.S. dollar (U.S. dollar is weakening). This is favorable for exports, because it increases import purchasing power. If line is trending down, currency is weakening vs. U.S. dollar (U.S. dollar is strengthening).  This is unfavorable for exports, because it decreases import purchasing power. Currency exchange rates are calculated for Wednesday of each week. Source: Oanda.com.

 

House letter calls for U.S. to utilize USMCA consultation and enforcement measures for dairy
A bipartisan group of 104 House members sent a letter to USTR Robert Lighthizer and USDA Secretary Sonny Perdue urging them to take action to ensure that Canada and Mexico “deliver on all their obligations related to dairy products in a way that is fully consistent with the spirit and letter of the agreement.”

The letter asks Ambassador Lighthizer and Secretary Perdue to “swiftly act to use USMCA’s consultation and enforcement measures” to address Canadian Tariff Rate Quota (TRQ) administration, the elimination of Canada’s Class 6 and 7 milk price classifications and enforce the USMCA side letters on common names.

USDEC’s role
USDEC worked closely with the Representative lead offices to ensure that the letter conveyed the key issues regarding dairy USMCA compliance and captured those concerns, as well as helped build major support for the letter, which garnered a sizable number of congressional signatures. The letter was led by Reps. Ron Kind (D-Wis.), Tom Reed (R-N.Y.), Collin Peterson (D-Minn.), Glenn Thompson (R-Pa.), Anthony Brindisi (D-N.Y.), Russ Fulcher (R-Idaho), Xochitl Torres Small (D-N.M.) and Anthony Gonzalez (R-Ohio).

“We cannot allow Canada or Mexico to undermine the important gains secured in this trade deal,” said USDEC President and CEO Tom Vilsack in a joint USDEC/NMPF news release on the letter. “We are working alongside Congress, the U.S. Trade Representative and the U.S. Department of Agriculture to ensure Canada and Mexico are held accountable to their trade commitments.”

USMCA enforcement fact sheet
To help educate Congressional offices on this issue and secure their support for the letter, USDEC also created a 1-page USMCA enforcement fact sheet. The document emphasizes that U.S. dairy farmers, processors and exporters will not fully realize the benefits of hard won USMCA concessions unless the dairy provisions of the agreement are fully enforced. Feel free to download the fact sheet for use in your communications on this issue as well.

Info packet highlights benefits of exports to Idaho dairy industry, economy, jobs
A new information packet from USDEC and NMPF, put together in close collaboration with Dairy West, spotlights the Idaho dairy industry and the integral role dairy exports play in that industry’s growth. The Idaho dairy industry supports more than 10,500 jobs on the farm and in processing plants, which adds up to more than $400 million in wages. Dairy has a $9.1 billion economic impact on the Idaho economy. And more than 90% of Idaho milk is made into cheese and other dairy products sold to other states or around the world.

The information packet is the latest in a series of informational fact sheets, videos and social media graphics developed by USDEC’s Trade Policy team for sharing with public officials, members, media and other relevant stakeholders.

To download a one-page fact sheet on Idaho dairy and exports, click here. To watch a video on Idaho dairy and exports, read and share this tweet.

UK, Japan trade talks run into cheese issue
Agricultural market access is one of the biggest remaining hurdles to a UK-Japan trade deal, with cheese being an especially contentious category. UK Trade Secretary Liz Truss is reportedly seeking better market access terms for British cheese than Japan granted the EU. Media reports specifically mention blue-veined cheeses like Stilton. (See the Trade Agreements section of the USDEC Export Guide for cheese terms of the EU-Japan agreement.)

At press time, Japan’s trade minister was planning to fly to Britain this week in a bid to wrap up a deal.

The UK will lose EU access terms at the end of the post-Brexit transition period in January 2021. Britain is looking to complete its own agreement with Japan by the end of August. (USDEC Japan office; Financial Times, 8/10/20; CNN Business, 8/11/20)

Coronavirus: Recovery is slow going
For the past two months, nations around the world have been following similar game plans to revive COVID-plagued economies with similar results. Moves to ease lockdowns, reopen businesses and restart schools are followed by pausing or reversing such moves when COVID outbreaks inevitably spike.

Reports from USDEC overseas offices repeatedly outline efforts aimed at reinvigorating economies—stimulus packages to encourage spending and assist industries like tourism and foodservice—often in parallel to a COVID resurgence.

Variable results
Japan is a prime example of the dilemma. The nation’s “Go To” campaign aimed at bolstering the domestic tourism sector but turned out to be a virus vector, spreading COVID as infected travelers took subsidized trips from one prefecture to another.

Some programs are working better in other countries. Brazil extended an emergency aid program through March 21, albeit with a reduced payout to consumers. The program offers direct payments to individuals most in need and has been a life saver to many who use it to buy food, including dairy. The program has helped maintain demand and is expected to continue to do so even in its reduced form.

But a growing number of outside factors are creating an additional layer of complication to reopening efforts around the world, like the port explosion in Lebanon and prolonged, heavy rainy seasons in China, South Korea, India and elsewhere.

Positive movement
Small but important positive signs continue to pop up among reports of overall economic declines, unemployment and business failures. In Japan, household spending fell 1.2% in June—a huge improvement over the 16% drop in April and 11% loss in May.

Dubai’s tourist sector is rebounding strongly on the back of staycations and European and Russian travelers. Dubai airlines are opening to international travelers from 65-70 countries this month, a move that could further energize the tourism sector or, as in Japan, potentially create new outbreaks.

Thailand, one of the most successful countries in controlling COVID, is avoiding that type of risk. While leaders are poised to roll back restrictions to their lowest level, allowing complete in-person schooling, spectators at sporting events and full bus service, they would not reopen international borders to international tourists until 2021, despite tourism’s outsized impact on the nation’s overall economy.

The implicit message is that recovery might take longer than hoped for. In Latin America, for example, economists predict it may take until 2023 for the region to return to pre-pandemic levels. About 2.7 million businesses across the region are expected to close for good, destroying more than 8 million jobs.

Hotspots continue
The United States remains the epicenter of coronavirus, but governments in Europe are implementing new rules like face masks in public and revised testing protocols to quash flare-ups in Germany, France, the Netherlands, Spain and others. The continent, however, is not yet experiencing a resurgence on the scale of the U.S.

One of the big COVID stories this week was the discovery of the first new community transmitted coronavirus cases in New Zealand in 102 days. The nation is tracing five detected cases and raised the threat level in its largest city, Auckland. Depending on the tracing results, a broader tightening of restrictions could be in the works.

The lockdown of Da Nang in Vietnam was extended another two weeks and business closures and social distancing measures extended to many other cities in an effort to halt the reappearance on COVID in that country. (USDEC China, Japan, Mexico, the Middle East/North Africa, South America, South Korea, Southeast Asia and Vietnam offices; Wall Street Journal, 8/11/20, 8/6/20; Washington Post, 8/10/20)

 

Panama bans dairy products from Costa Rica
The Food Safety Authority of Panama is denying export permits to products of animal origin from Costa Rica, including all dairy products. Panama claims Costa Rican food manufacturers failed to deliver documentation required to renew sanitary permits, so on June 30, they halted exports from Costa Rica.

Panamanian farmers and producer groups applauded the move and called on the government to go a step further and review the nation’s trade agreement with Costa Rica. They characterized Costa Rican animal product exports as excessive.

Costa Rica said the move was unacceptable and illegal, noting the country’s sanitary regulations and product standards are unchanged. It also said that Panama is required under Central American regulations to continue accepting imports since it failed to give Costa Rica 90 days to respond to its plant certification demand. The Costa Rican government says that Panama has been denying dairy and animal product imports for three months. It has notified the WTO and is seeking talks with Panamanian authorities to resolve the issue. (USDEC Mexico office; Newsroom Panama, 8/7/20)

 

Nomination deadline extended until today
Dairy Foods magazine extended the deadline for the 2020 “Tom Camerlo Exporter of the Year Award” until today, Aug. 14. So if you want to nominate your company or another deserving exporter, you have a few more hours.

The Exporter of the Year should play an active role in driving global dairy demand; exhibit industry leadership in advancing U.S. dairy exports; display a commitment to export market development; and demonstrate export sales success.

USDEC member BelGioioso Cheese earned the honor last year. Read about BelGioioso as well as previous winners here. To nominate for this year, visit Dairy Foods’ confidential online nomination page.

 

Company news briefs
A consortium of Brazilian dairy processors is purchasing a former Nestlé plant in Rio Grande do Sul that was shuttered a year ago. The plant will produce multiple dairy product lines, but the group says it also plans to turn it into one of the largest and most modern whey drying plants in Brazil . . . Saputo launched the Cathedral Cheese brand in Canada. The brand, acquired when Saputo purchased British dairy processor Dairy Crest, is manufactured in the UK at the former Dairy Crest plant in Davidstow . . . New Zealand’s A2 Milk named HanesBrands executive David Bortolussi as its new chief executive. He will replace interim CEO Geoffrey Babidge in February 2021 . . . State-run milk processor Dairy Farming Promotion Organization of Thailand (DPO) is building a new $3-million headquarters in Bangkok. DPO projects 2020 sales will rise 11% to $360 million. (USDEC South America office; USDEC Southeast Asia office; Sydney Morning Herald, 8/11/20)