• UN Food Systems Summit Dialogue

• Why U.S. Dairy needs to be at the FSS table
• New USDEC video series on sustainability

• Letter calls for DOT action on VOCCs

• Importers concerned with U.S. shipping issues

• Shipping issues may last to year-end

• Register now! Post-COVID demand webinar

• Sign up! South American protein webinars

• Market Summary: calm waters

• Tai letter tackles sustainability

• Comments on EU, GCC, Korea, Uganda legislative proposals

• COVID update

 

Creating dairy positive dialogue in run-up to Food Systems Summit
More than 100 stakeholders representing a diverse cross-section of farmers, food manufacturers, academia, nutrition experts, students and future leaders, U.S. government and civil society groups met this week to discuss and brainstorm ideas to enhance dairy’s role in sustainably feeding the world. The virtual conference represents U.S. Dairy’s contribution to one of the few and most critical pathways to formally provide input into the September UN Food Systems Summit (FSS).

The dairy positive conversation generated by the Dialogue will now be compiled into a formal UN FSS submission and become part of the stakeholder input on which Summit recommendations will be based. This is a critical step in continuing to drive balanced Summit outputs that support dairy consumption and promote dairy trade while demonstrating the diversity of groups championing the important role of U.S. dairy in the future of the global food system.

This particular FSS Dialogue was driven by a collaboration between USDEC and National Dairy Council (NDC) and jointly hosted by the NDC, USDEC, The Nature Conservancy and the Global Child Nutrition Foundation (GCNF).

“We wanted to take this unique opportunity to bring together stakeholders that don’t typically work together or always agree to breakdown silos and generate new ideas on a topic we believe couldn’t be more important: sustainable nutrition for children today and future generations,” said USDEC President and CEO Krysta Harden, who presided over the event. “We truly generated dialogue, among our farmers, among our partners and even among some of our skeptics, and we created a space for students who will be our future leaders to shape visionary ideas and practical pathways to achieve them.”

What is the FSS?
The purpose of the FSS is to launch bold new actions to transform the way the world produces food in support of the UN’s Sustainable Development Goals (SDGs), each of which relies to some degree on healthier, more sustainable and equitable food systems (see Global Dairy eBrief, 4/2/21). The FSS aims to not only promote discussion about sustainable food systems, but also create a set of recommended actions for governments, food industry, farmers and other stakeholders to guide how countries produce, trade and consume food. (For more on why U.S. Dairy’s participation and leadership in the FSS is critical, see “Why dairy needs to be at the table” below.)

The FSS is being billed as a “people’s summit,” seeking input from “everyone everywhere,” and with a targeted focus on engaging youth in the process. By bringing together keynote speakers from GCNF, The Nature Conservancy, NDC and 4-H, and a diverse cross-section of participant stakeholders in terms of age, background and perspective, this week’s dialogue held true to spirit of the Summit while showing the value and benefits U.S. Dairy provides to the world.

After initial speaker presentations, attendees split into three breakout sessions focused on: dairy’s role in child health, school nutrition and food security; responsible dairy production; and farm stewardship and animal care. These subject areas fit with key initiatives USDEC and our global partners have submitted to the Summit and highlighted with U.S. government and other stakeholders.

Consensus
There was energy and excitement throughout the event with forward looking youth representatives playing a significant role and bringing new thoughts and ideas to the table. The breakout sessions culminated in consensus on a number of broad goals, including:

• The need for science and evidence to drive opinion and policy on dairy in the food system and in relation to sustainability.
  
  
• Having all voices at the table to build a better food system; bringing all stakeholders together to drive action-based solutions.
  
  
• Improving accountability and equity across the food system and creating positive incentives, particularly for farmers and processors, to improve sustainability.
  
  
• Increasing communication among farmers and processors to share knowledge and resources and collectively capture economies of scale to benefit producers of all sizes.
  
  
• Improving the awareness of U.S. Dairy as a sustainable solution, particularly among students and younger populations.
  
  
• Increasing economic investment, including government support, throughout the supply chain to support positive and continuous improvement.

Feeding these balanced, U.S.-Dairy-positive consensus points into the Summit process provides a unique opportunity to counter some of the anti-livestock, anti-dairy rhetoric of other Summit stakeholders in a way that shows broad buy-in by diverse groups and prioritizes youth voices. This approach is truly consistent with the Summit approach and our constructive input will be impossible to ignore.

We will share more FSS developments as the Summit approaches. The next major event is the July 19-21 Pre-Summit slated for Rome, Italy.

Why U.S. Dairy needs to be at the table for the UN Food Systems Summit
Last Thursday’s panel discussion at the USDEC Spring Membership Meeting made it clear why U.S. Dairy needs to play a leadership role in the lead-up to the FSS and take a prominent position at the table.

“I think this is going to be a huge moment. It’s going to be a moment that reverberates for years to come,” said Sam Kass, food entrepreneur, former white house chef and senior policy advisor for nutrition. The outcomes will be used “as a road map for the world.”

Kass offered his analysis in a session titled, U.S. Dairy and the United Nations Food Systems Summit: Looking Towards the Future of Sustainability,” that also featured former USDA Secretary Dan Glickman; Marilyn Hershey, chair, DMI; and Donald Moore, executive director, Global Dairy Platform, and was moderated by USDEC President and CEO Krysta Harden.

U.S. Dairy needs to be there to make sure we maintain and grow the markets we are in today and enter new markets tomorrow, Harden noted. “We need to make sure that there are not going to be policies or positions that close out U.S. Dairy, make sure that our customers around the world understand who we are in U.S. Dairy and understand our commitment to sustainable nutrition,” she said

Participation critical
Any sector that ignores the FSS process does so at its own peril, Kass added.

Secretary Glickman seconded that notion: “If we’re not at the table, we might as well be in outer space. Others will take our place.”

Those “others” reflect an organized group of livestock detractors, including those who disapprove of dairy. While some cannot be persuaded, there is a large group of Summit stakeholders who have based their positions on outdated figures, anecdotal observations and fundamental misunderstandings of dairy farming and processing. Through strategic engagement and constructive outreach, they can come to see U.S. Dairy as a critical solution to improve the global food system.

The task at hand
How can U.S. Dairy distinguish itself as part of the sustainability solution? According to Kass, we won’t get there by being defensive, but by showcasing the progress we are making and diligently working to do more.

“There are real problems in how we produce our food. There are real problems, specifically, around parts of animal agriculture. I think honestly that dairy is the stand-out,” he said. “No industry has done a better job on environment issues in the animal ag ecosystem than dairy.”

“If the world wants to get this right, they have to be sophisticated and nuanced in how they look at different sectors, their specific impact on the environment and the nutritional benefit that that sector provides the world,” said Kass.

Building bridges
U.S. Dairy has a great sustainability story to tell. The U.S. can be a prime example of a champion—a dairy model for the rest of the world, said Moore. But even the U.S. industry knows it still has work to do, as it has acknowledged in establishing the Net Zero Initiative (NZI) last year.

“We need technology. We need new innovation on our farms to help us get to net zero whether we're talking about feed additives or whether we're talking about digesters,” said Hershey. “The NZI project is not only working on those technologies, vetting them out, seeing what technologies work, it’s also looking at all farm sizes, so every farm can do something. It's about taking those steps to get there.”

The process leading up to the Summit is a time to build relationships, an opportunity to bring in minds, partnerships, technologies, people who can help us solve challenges standing between U.S. Dairy and the industry’s sustainability goals. This work will keep existing markets open, create opportunities to access new ones and build the foundation on which U.S. Dairy plays a critical role in nursing global communities for decades to come.

“Being at the table early, earning credibility, earning trust of others hopefully will help us make sure U.S. Dairy is understood and that we’re a faithful, honest and transparent partner,” said Harden. “We're doing a lot of things but have a long way to go.”

New video series highlights U.S. Dairy sustainability
In conjunction with Earth Day last week, USDEC launched a new video series: “U.S. Dairy: Sustainability at the Heart of Global Ingredient Solutions.” The series will feature examples of U.S. suppliers’ ongoing commitment to the health and well-being of consumers, communities, cows, employees, the planet and business.

The initial video, produced in collaboration with Dairy West, showcases Idaho Milk Products and its sustainability philosophy and practices. Go to the USDEC Dairy Spotlight feature, “Pathways to a Sustainable Future Through U.S. Dairy,” at ThinkUSAdairy.org to watch the first video and read more on U.S. dairy sustainability efforts.

Nearly 300 ag stakeholders call on DOT for action on VOCCs
A group of 290 food and agriculture companies and organizations—including USDEC and NMPF—sent a letter to U.S. Secretary of Transportation Pete Buttigieg calling for urgent action to address damages to U.S. agricultural exports caused by the practices of vessel-operating common carriers (VOCCs). VOCCs continue to turn away U.S. agricultural commodity exports from U.S. ports and impose hundreds of millions of punitive charges on exporters, even though those charges have been determined unreasonable by the Federal Maritime Commission (FMC).

“We need action now; not additional studies,” the letter states. It asks the DOT to assist the FMC in “expediting enforcement options. In addition, we urge the Department of Transportation to consider its existing authorities to determine how it can assist with the transportation needs of the U.S. exporters and farmers and ranchers they serve in overcoming the current challenges in shipping goods and products.”

USDEC’s role
USDEC and NMPF initiated the letter and were integral to developing it. The Trade Policy team drafted the original document and helped refine the signer and recipient targets, including sharing the letter with members, several of whom signed on directly.

The letter is the latest in a series of efforts to resolve the port and shipping issues. USDEC, working together with NMPF and some other Agriculture Transportation Coalition members, is leading efforts with Capitol Hill and the administration to ensure that both are fully aware of the difficulties exporters are encountering due to this unusual situation at the ports and the urgency of addressing those challenges.

U.S. exports still feeling the impact of port issues
USDEC Overseas offices continue to report extended delays on U.S. dairy product imports and growing concern from buyers. Customers in the Philippines have been sticking with their U.S. suppliers despite the shipping issues, in part due to favorable U.S. pricing. But those buyers, as well as others in Southeast Asia, are expressing growing concerns with the situation, particularly if U.S. commodity prices rise.

Some importers have implored USDEC offices to assist with expediting deliveries, others are ordering twice the volume required and hoping half of it comes through. Still others are ordering with extreme lead-times, although the type of product can dictate the feasibility of that strategy.

Logistical issues continue to impact EU dairy shipments as well, but U.S. products are facing the longest delays. Buyers report that New Zealand product—to many but not all destinations—is running on time. (USDEC offices in Japan, Mexico, Middle East/North Africa and Southeast Asia)

Without intervention, no end in sight for fees, delays, equipment shortages
While some ports are reporting incremental operational improvements, conditions remain far from normal. U.S. ag shippers continue to face excessive delays and fees. And now analysts are beginning to say they expect the situation to last not just through mid-year but until the end of 2021.

Freight forwarder Flexport believes freight has been stacking up in Asia, which aligns with others who cite worsening container availability in Asia. Flexport believes May shipping problems may be “the worst people have ever seen.”

Drewry Shipping Consultants says the whole year will be affected by port congestion, and despite an easing of traffic in June, container cycle times won’t return to pre-COVID levels until at least the end of 2021 and possibly into 2022. (The Loadstar, 4/27/21; Bloomberg, 4/26/21; American Shipper, 4/26/21; Wall street Journal, 4/23/21; Daily Breeze, 4/24/21)

Don’t miss USDEC’s exclusive analysis of dairy demand in a post-COVID-19 world
For more than a year, short-term pivots have been the name of the game in business and in life. As the world fights to emerge from the pandemic, we face an important question: Which shifts will last beyond COVID-19 and warrant long-term focus?

To answer that question, USDEC conducted a two-part research project looking at evolving dairy supply and demand forces. Please join our Strategy & Insights Team and Euromonitor International for a May 5 webinar to discuss the “new normal” for dairy demand in key export markets and gain a perspective on what’s here to stay.

The free webinar runs from 9:00 a.m.-10 a.m. ET and will specifically focus on the key demand forces emerging from a 15-country analysis across major dairy export product categories and critical aspects to consider in preparing for the post COVID world.

Register here. For questions, please contact Katie Phelan at kphelan@usdec.org.

South America webinars: Nutrition and Functionality: What You Need to Know About Dairy and Plant-Based Proteins
USDEC is hosting two upcoming webinars aimed at boosting U.S. dairy protein use in Colombia and Brazil. The webinars—slated for May 12 for Colombia and May 19 for Brazil—will outline the functional versatility and nutritional benefits of U.S. dairy proteins for food and beverage processors. Each session will explain why dairy proteins stand out from other protein sources and offer innovation opportunities with U.S. dairy proteins.

Each session features Mary Wilcox, founder of Significant Outcomes, and Matthew Pikosky, vice president of nutrition research, National Dairy Council. Wilcox will highlight the functionality and innovation potential of U.S. whey and milk proteins and provide guidance on selecting the proper ingredient based on desired usage. Pikosky will focus on the importance of protein quality and how the unsurpassed nutrition of dairy proteins distinguishes them as an excellent formulation choice.

We invite members to tune in. Click here to register for the Colombia event; click here for the Brazil session. The Colombia webinar will be simulcast in Spanish, the Brazil webinar will be simulcast in Portuguese. For questions or additional information, please contact Keith Meyer at kmeyer@usdec.org.

Let us know your thoughts about Membership Meeting
USDEC wants to ensure that every membership meeting is worth your time. To do so, we would love your feedback on last week’s virtual conference via our post meeting survey. Follow this link to take the survey; it should only take 5 minutes of your time.

These surveys are important to help us ensure that we continue to deliver quality content, in a meaningful way, to you.

Re-watch the presentation
In case you missed any sessions, or wanted to watch again, we recorded all of them and expect to have those available and posted on the USDEC website by today. Check the Spring Meeting Page to view them. You can also find copies of the PowerPoint presentations on that same page, which you can access by clicking here.

If you have any questions, or need anything else, please do not hesitate to reach out to Luke Waring at lwaring@usdec.org or Weston Abels at wabels@usdec.org.

 

Pricing waters calm
International dairy commodity prices are holding steady with supply and demand largely balanced—for now. Next week’s Global Dairy Trade auction will shed some light on whether New Zealand’s big milk production gain (+10%) in March and further strong gains expected in April given strong farmgate prices and relatively low volume in April 2020.

Download USDEC pricing app
Price trends are always at your fingertips. All you need to do is download the USDEC Commodity Prices Finder app, a mobile resource for tracking a variety of USDA dairy commodity prices. It is available at the Apple Store for iOS devices and Google Play for Android.

 

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.

 

Letter to Tai highlights U.S. ag sustainability efforts, emphasizes support for climate efforts
A dozen agricultural organizations, including USDEC and NMPF, sent a joint letter to USTR Katherine Tai regarding comments she made this month on the relationship between U.S. climate goals and agriculture.

Climate-friendly and sustainable agricultural production is essential to meeting U.S. climate and sustainability goals, and U.S. farmers and ranchers have the ability “to lead the world with innovative carbon conservation practices,” she said.

U.S. agriculture backs goals
The letter highlighted long-term U.S. dedication to responsible production as well as the sector’s commitment to further improving practices to reduce its impact on the environment.

“We support voluntary, market- and incentive-based policies; advancing science-based outcomes; and providing help so that rural economies can better adapt to climate change,” the letter states. “Farmers know that a changing environment will impact their operations and will require a sharpened focus on climate resiliency. There is a growing realization that if done correctly, public policies that promote these practices can also help boost farm income while making a tremendous contribution to reducing GHG emissions.”

Earth Day comments
On Earth Day, Ambassador Tai noted that the USTR’s office will leverage trade tools “to avert an unfolding economic crisis and protect our planet.” She echoed the sentiment the next day during President Biden’s Leaders Summit on Climate, noting that “trade policy can be a powerful tool to create incentives for positive competition and a race to the top in realizing our collective prosperity” as countries make policy on decarbonization, environmental conservation and clean energy.

In their letter, USDEC, NMPF and the other U.S. ag organizations noted that they look forward to working with Ambassador Tai as she discusses the convergence of trade and the environment with her international counterparts. Among other points, the letter emphasized the strides U.S. agricultural has made and continues to make toward environmental sustainability and climate goals.

USDEC comments on draft labeling, antimicrobial and micro criteria legislation
As part of our ongoing review of draft legislation sent to the WTO for public feedback, USDEC submitted comments in the past week on four measures that have the potential to impact dairy exports to some of our largest markets:

• EU. USDEC weighed in on the impacts of a new EU draft regulation on antimicrobials that establishes the regulatory framework to determine which antimicrobials are designated as only for human use. This draft is part of the EU’s overall policy to restrict the use of antimicrobials used within member states, and then to require all countries exporting to the EU to also follow EU antimicrobial requirements at the farm level (see Global Dairy eBrief, 4/2/21, where we commented on an earlier proposal). USDEC notes that this framework legislation does not include the designation of antimicrobials as allowed only for humans, so it contains insufficient information to assess the potential impact on the ground. We also noted that even without those details, we firmly oppose the EU’s proposed approach as being WTO-incompatible due to the intent to impose domestic policies unrelated to food safety or communicable animal health concerns on imported products. The comments urged the U.S. government to continue to push back on the EU’s regulatory overreach related to its planned enforcement of EU antimicrobial policies in foreign countries.
  
  
• Gulf Cooperation Council (GCC). A GCC draft regulation on labeling claims proposes establishing strict requirements for the use of terms such as “natural” and “fresh.” USDEC argued that the limitations on these terms is too narrow and does not include an allowance to use “natural” to differentiate natural cheese from processed, nor does the regulation allow for “fresh” when describing fresh cheese.
  
  
• South Korea. A Korean draft regulation on prepackaged food labeling proposes requiring both an expiration date and use-by date on foods, which is a departure from the current requirement to list only a “best before” date (manufacturer-determined shelf-life). USDEC requested that this proposal not be implemented, since the current Korean regulation is aligned with the Codex labeling standard.
  
  
• Uganda. A Ugandan draft regulation on microbiological criteria establishes requirements for several categories of cheese and infant formula. USDEC provided suggestions on modifications to the overlapping requirements for cheese categories that make determining the applicable levels for cheese types difficult, and suggested alignment with Codex for infant formula.

Contact Sandra Benson at sbenson@usdec.org with questions or for more information.

 

Variants, relaxed restrictions add to COVID recovery uncertainty
While U.S. businesses continue to chart a course toward a “new normal” as vaccinations progress, large parts of the world continue to struggle against rising COVID-19 case numbers and deaths. A combination of relaxed business and social restrictions, pandemic-fatigue and new variants is decimating portions of India and spreading. The Brazilian variant has moved into neighboring South American nations, with Peru, Colombia and Uruguay particularly badly hit. Vietnam is on high alert after spikes in case numbers in Cambodia, Laos and Thailand.

Here is some additional recent developments from the overseas offices:

Japan

• Just weeks after lifting restrictions, Japan declared a state of emergency in Tokyo and Osaka. It is the third COVID state of emergency declaration in the past year.
• Year-over-year sales at restaurants in Japan fell for the 13^th straight month in March. Sales fell 2.9% compare to March 2020 and 19.6% vs. the pre-pandemic 2019 numbers. A survey of 11 major restaurant chains in Japan found that they closed nearly 680 outlets over the past year or around 7% of their total store numbers.

Mexico

• Mexican Customs data indicates two consecutive months (February and March) of overall cheese import gains after five straight months of year-over-year declines. February and March 2020 were strong import months (11,000 MT+ each), suggesting the gradual reopening of foodservice and tourism is beginning to take hold.

Middle East/North Africa

• High Ramadan demand and insufficient domestic milk production are causing dairy product shortages in Dubai. Domestic processors plan to meet with local farms after the holiday to resolve the problem, which has been exacerbated by livestock diseases and monopolistic supply contracts.

South America

• In Brazil, about 12,000 bars and restaurants in the city of São Paulo alone have closed since March 2020. Brazil’s restaurant association believes 50,000 have closed across the state of São Paulo.

Southeast Asia

• Hong Kong and Singapore plan to launch a long-postponed travel bubble on May 26, allowing quarantine-free travel for residents (assuming COVID-19 doesn’t worsen between now and then). (USDEC offices in China, Japan, Mexico, Middle East/North Africa, South America, South Korea, Southeast Asia and Vietnam)

Domty invests in fluid products
Egyptian cheese and bakery products company Arabian Food Industries (better known as Domty) is getting into the fluid business. The company is adding a $2-million Tetra Pak line to produce regular UHT milk, but plans on expanding to flavored milk, heavy cream and other products, with a target to launch one new item a month. The project stems from a pivot made during the pandemic to shift focus from on-the-go snacks (and successful products like its portable cheese sandwich) to products consumed at home. The company said it expects to revive investments in on-the-go products as COVID-19 comes under control. (USDEC Middle East/North Africa office)

Company news briefs
Major New Zealand milk producer Van Leeuwen Dairy Group (VLG) entered receivership. VLG has been struggling since it was identified as the source of New Zealand’s Mycoplasma bovis outbreak in 2017. A long battle for compensation with New Zealand’s Ministry of Primary industries followed. In 2020, it refinanced its operations and tried to sell nine of its 13 dairy farms. Media reports state that the business currently milks about 10,000 cows. (Otago Daily Times, 4/24/21)

• In podcast, Harden discusses the future of exports and why it matters to farmers
• By 2050, U.S. Dairy will achieve carbon neutrality or better
• See how dairy farmers are using “cow power” and other sustainable practices
• The U.S. dairy industry is committed to responsible stewardship
• U.S. dairy supplier snapshot featuring Idaho Milk Products (retweet)