• Executive order seeks ocean carrier solutions

• Exporter of the Year nominations

• Member opportunity: engage Chinese buyers at CDIA

• Market Summary: summer doldrums

• U.S. submits Canadian TRQ argument

• Getting the word out on dairy protein

• Sustainability video: Leprino

• Harden talks export opportunity with Hoard’s

• Company news: Welcome Dairy, Junlebao, Coca-Cola Israel

USDEC and U.S. exporters say executive order a step in right direction, but not enough to ease shipping costs, delays
U.S. exporters applauded President Biden’s July 9 Executive Order aimed at boosting business competitiveness but acknowledged that much more work is necessary to resolve the congestion and cost issues facing U.S. agricultural shippers.

The order establishes the White House Competition Council to coordinate and advance actions to prevent overconcentration, monopolization and unfair competition in or directly affecting the American economy. The council will include the Secretaries of Transportation and Agriculture, as well as the chairperson of the Federal Maritime Commission (FMC). USDEC has been active in briefing USDA, DOT and FMC regarding the challenge the port crisis is posing to the U.S. dairy industry.

FMC directives
Among 72 distinct directives to more than a dozen agencies, the order calls for the FMC to vigorously enforce the prohibition of unjust and unreasonable detention and demurrage charges and work with the Justice Department to “investigate and punish anti-competitive conduct.” The FMC signed an agreement with the Justice Department this week to increase cooperation in assessing antitrust concerns in the maritime sector, although how the two will work together is as of yet unknown.

It also requests the FMC’s Shipper Advisory Committee to issue recommendations for improved enforcement of detention and demurrage and related rules, and for FMC to consider issuing new regulations to improve export shipping conditions.

In the order, the White House cited rapid consolidation in the ocean carrier sector for giving carriers too much power, opening the door to exorbitant detention and demurrage fees.

Next moves up to FMC
The order does not give the FMC new powers, but rather will embolden the agency to escalate detention and demurrage investigations, shipping analysts say. FMC Commissioner Carl Bentzel called the order “a wake-up call” to ocean carriers, adding that liners “should be on notice that we have to take steps rapidly.”

Agriculture Transportation Coalition (AgTC) Executive Director Peter Friedmann echoed the sentiment, saying the order “sends a message those regulators are seen as not protecting the shipping interests of the public. That’s a pretty strong message.” (USDEC is a member of AgTC.)

It remains to be seen whether the directive will be sufficient to prompt FMC to play a more proactive role in enforcing carriers’ compliance with the Shipping Act.

Ocean carriers complain
The World Shipping Council (WSC), the ocean carrier lobbying group, denounced the order, blaming massive U.S. consumer demand—coupled with insufficient U.S. rail and truck capacity and warehouse and port space—for U.S. export issues and saying regulation is not the answer. The WSC called current conditions “a market aberration” brought on by the pandemic. Carrier lines contend they are temporary.

USDEC, working closely with NMPF, is monitoring the implementation of the Executive Order and provide updates. This is only one part of a broad strategy in which we are engaged—both with Congress and the administration—to address the issues of port congestion, high fees and lack of carriers transparency that continues to plague U.S. dairy exporters in the short- and long term. (USDEC staff; The White House; Wall Street Journal, 7/13/21, 7/8/21; The Loadstar, 7/12/21; Container Management, 7/12/21; Journal of Commerce, 7/9/21, 7/8/21)

Nominations open for Tom Camerlo Exporter of Year Award
Every year, the Tom Camerlo Exporter of the Year Award recognizes a U.S. dairy company that exhibits exceptional leadership and commitment to the international market. The past-winner list reads like a who’s who of export trailblazers: Agri-Mark, BelGioioso Cheese, California Dairies Inc., Dairy Farmers of America, Darigold, Davisco International, Glanbia USA, Hilmar Ingredients, Leprino Foods, Milk Specialties Global, Proliant Dairy Ingredients, Sartori, Schreiber Foods, Swiss Valley Farms (now Prairie Farms Dairy Inc.), and United Dairymen of Arizona.

Now, you have a chance to add your company’s name to this prestigious lineup.

Dairy Foods magazine is seeking nominations for the 2021 “Tom Camerlo Exporter of the Year Award.” The criteria for selection include an active role in driving global dairy demand; industry leadership in advancing U.S. dairy exports; a commitment to export market development; and export sales success. To be Exporter of the Year, international trade must play an integral role in a company’s overall growth strategy.

To nominate your company or another USDEC member as the 2021 “Tom Camerlo Exporter of the Year,” visit Dairy Foods’ confidential online nomination page. The nomination deadline is Aug. 16.

USDEC sponsors the award, which is named for former Chairman Tom Camerlo. The winner will be featured in the November issue of Dairy Foods and receive the award at the fall USDEC membership meeting. To read about last year’s winner, Proliant, as well as other previous recipients, click here.

Don’t miss your chance to reach out to Chinese buyers at September’s CDIA meeting
The China Dairy Industry Association (CDIA) Annual Meeting taking place Sept. 11-12, 2021, offers a prime opportunity for U.S. dairy suppliers seeking to strengthen relationships and build business with the world’s biggest dairy importer. The in-person event is expected to attract around 3,000 dairy processors, infant formula makers, and food and beverage companies. Foreign speakers are invited with pre-recorded videos—and that’s where USDEC’s participation comes in.

After the opening ceremony (where USDEC will give one of the speeches), we will hold a half-day symposium with a mix of live and recorded speakers. The speaker lineup is still being developed, but we are inviting USDEC members to participate either through a pre-recorded video or through in-person staff in China (the meeting is being held in Hangzhou).

The focus of the presentations should be new ingredients for the Chinese market, with emphasis on the ingredients’ technical highlights, health and nutrition benefits or other advantages. Alternatively, the presentations should feature company efforts to make products more sustainable. (The theme of the conference is “technology advances dairy and green development.”)

U.S. in the spotlight
The USDEC symposium is one of four being held that afternoon after the opening, with four additional symposia slated for the next morning.

“USDEC is the only foreign dairy group invited to hold a symposium, so the meeting presents an excellent opportunity to reinforce the position of the United States as a global exporter able to meet the needs of the Chinese market,” says Annie Bienvenue, vice president, global ingredients technical marketing services. “The event is a perfect chance for members to renew or reinforce relationships with the Chinese dairy and food industries and remind everyone of the U.S. dairy ingredient portfolio—whey and milk proteins, permeate, lactose, milk powder—and desire and commitment to serve the Chinese market.”

Speaker slots are limited and will be assigned on a first-come, first-served basis. If you are interested in participating in the event, please contact Annie Bienvenue at abienvenue@usdec.org.

Prices continue to ease as summer lull nears
EU commodity prices followed the lead of last week’s Global Dairy Trade auction, with SMP, WMP, butter and even dry whey easing further off early-June peaks. One reason for the slide in whey comes from China.

Pork prices have plummeted as domestic production jumped and the African Swine Fever outbreaks we heard about earlier this year brought more pigs onto the market than expected. With prices down but feed prices high, the incentive to increase pork production has been limited, lowering demand and prices for whey.

That might not be the case for long, however. As China’s pork glut moves through the system, the nation’s supply shortage will likely reassert itself, with pork and whey prices rising through the year-end.

Overall buying interest is moving into a typical summer lull, with European traders set to go on holiday and Oceania production in its off-season.

Chinese milk prices
Chinese raw milk prices hit a new record high for the week ending July 4—20% up from a year earlier. Heavy demand for fresh milk products continues to stoke local production. Prices typically rise at this time of year, but this year, given record average monthly highs since January, they started from a higher point.

The surge in fluid milk demand (precipitated by the pandemic) and high farmgate milk prices have been a potent driver of increased import demand this year in China, and that formula seems likely to remain in place for the time being.

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 U.S. competitiveness. If line is trending down, currency is weakening vs. U.S. dollar (U.S. dollar is strengthening). This is unfavorable for U.S. competitiveness. Currency exchange rates are calculated for Wednesday of each week. Source: Oanda.com.

U.S. files initial written submission in USMCA dispute on Canadian TRQs
The United States filed the U.S. Initial Written Submission regarding the U.S. challenge to Canada’s dairy tariff rate quota (TRQ) regime. The 27-page document outlines the U.S. argument that Canada’s system for allocating TRQs breaches its U.S.-Mexico-Canada Agreement (USMCA) obligations.

USDEC strongly supported challenging Canada’s TRQ system, putting in significant time to raise awareness of the issue, providing analysis to the U.S. government and supporting them in the work needed to get the challenge off the ground (see Global Dairy eBrief, 5/28/21).

It is a positive development to see the process moving forward, not only for U.S. dairy access to Canada but, on a broader scale, because it sends the message that the United States will not hesitate to use enforcement procedures when it is clear that a country is violating its agricultural trade commitments.

New protein product infographic translated for major markets, promoted in podcast
USDEC has posted translations of the recently released “Meet the Dairy Protein Superstars” infographic for sharing with overseas customers. Translations are available in Arabic, French (for North Africa), Japanese, Korean, Portuguese, Spanish and Vietnamese. An additional translation in Chinese is in the works.

The infographic makes a case for formulating new products using U.S. dairy proteins by emphasizing their versatility and popularity around the world. Information from Innova Market Insights’ Innova database shows that global whey protein new product innovations have diversified well beyond the sports nutrition sector and into mainstream foods like baked goods, desserts and ice cream, snacks, confectionery and more. A record 7,409 whey protein products were launched in 2020—that’s nearly double the number of launches just five years earlier.

Combined whey and milk protein new product rollouts outpaced plant proteins in 2020 by over 3,000 products, maintaining a consistent lead held for the past decade.

Getting the word out
USDEC is getting the infographic and the dairy protein new product data to as broad an audience as possible. USDEC’s Kristi Saitama, vice president, global ingredients marketing, and Terri Rexroat, vice president, global ingredients marketing, outlined the messaging on DairyReporter’s Dairy Dialog podcast No. 141 (beginning at the 4:14 mark and running for about 16 minutes). The two outlined trends in dairy protein use, expansion beyond U.S. and European markets and beyond sports nutrition, dairy protein advantages like functionality, clean-label friendliness and healthy aging benefits, and the bright future ahead for further whey and milk protein growth.

In addition, Asia Pacific Food Industry magazine shared the infographic via an eblast this week to its subscriber base of more than 26,000 food and beverage company representatives.

Leprino the subject of second entry in U.S. dairy sustainability video series
USDEC posted a second entry of the new video series: “U.S. Dairy: Sustainability at the Heart of Global Ingredient Solutions.” The video highlights Leprino Foods’ environmental leadership, including its dedication to water efficiency (its Greeley, Colo., plant is a net water generator) and greenhouse gas emissions reduction. You can view it in the “Award-Winning Innovation” and “Resources & Insights” sections of ThinkUSAdairy.org or at this Linked In post.

The video series, which kicked off this past Earth Day (see Global Dairy eBrief, 4/30/21), will continue to feature examples of U.S. suppliers’ ongoing commitment to the health and well-being of consumers, communities, cows, employees, business and, ultimately, the planet.

 

Harden talks dairy opportunity with Hoard’s
As part of USDEC’s ongoing efforts to help U.S. dairy stakeholders understand the value and ongoing growth potential of U.S. dairy exports, USDEC President and CEO Krysta Harden spoke again with Hoard’s Dairyman for the July 12 article, “Opportunities abound for U.S. dairy exports.” The story follows a June feature introducing Harden to U.S. dairy producers. In the latest piece—a Q&A format—Harden covers a lot of ground, from geographical indications to USDEC growth strategy to sustainability.

 

Welcome Dairy buys North Star
Dairy ingredient supplier Welcome Dairy Holdings purchased Minnesota-based spray dryer North Star. North Star provides spray drying services for the food ingredients sector, as well as wet blending and R&D for the food and supplement industries. The purchase gives Wisconsin-based Welcome (a portfolio company of New Heritage Capital) in-house spray-drying capacity. (FoodBev.com, 7/12/21)

China’s Junlebao looks to capitalize on rising demand for adult milk powders
China’s Junlebao is launching three new milk powders tailored to the nutritional needs of specific adult age groups: 40+, 50+ and 60+. It is the first time the company has distinguished between middle-aged and senior customers with its milk powder product line. The company hopes to take advantage of rapid growth in adult milk powder demand and further expectations for rising consumption given China’s rapidly aging population.

Middle-age and senior milk powders grew their share of the total Chinese milk powder market from 8.5% in 2015 to 11.8% in 2019. In 2020, sales of middle-age and senior milk powder products jumped 142%. (USDEC China office)

Company news briefs
Singapore-based Olam International is reportedly planning a new milk processing plant on New Zealand's North Island in South Waikato. The company is supposed to make a formal announcement in the coming months . . . Central Bottling Co. (also known as Coca-Cola Israel) signed a strategic agreement with Israeli startup Biomilk to collaborate on developing products based on Biomilk’s cultured milk technology. Central Bottling plans to invest $2 million in the effort . . . UAE dairy processor Koita, which launched its milk and milk alternative beverages last August in Singapore, is now expanding its presence aggressively in country. The company recently entered two major supermarket chains—Cold Storage Products and NTUC—and is in the process of listing with online seller Amazon Grocery (after already selling product through Lazada) . . . A2 Milk reorganized its Pacific Division into three business units: a China domestic business, an international export business, and an Australia and New Zealand (ANZ) domestic business. (USDEC Southeast Asia office; Rural News Group, 7/13/21; Times of Israel, 7/12/21; Radio New Zealand, 7/12/21)

 

• In Hoard’s Dairyman article, Krysta Harden highlights opportunities for U.S. dairy exports
• USDEC staff experts will discuss dairy export opportunities in SE Asia
• Video: Leprino Foods’ innovative and environmentally conscious practices (retweet)
• Podcast: Rising global demand for new product launches containing dairy proteins (retweet)