• Shipping reform legislation

• EU delays certificate implementation

• Korean Whey Protein Forum

• Register for business plan webinar

• EU June milk production

• USDEC testifies at Colombia milk powder hearing

• Member input wanted: Canadian feed regs

• Dairy implications of climate change report

• Last chance for Exporter of the Year

• New Glanbia plant challenged again

Ocean Shipping Reform Act offers hope for progress on U.S. agricultural shipping issues
New legislation introduced this week by Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) aims to resolve the high costs, extreme delays and inconsistent service U.S. agricultural shippers have been facing for more than a year. The Ocean Shipping Reform Act of 2021 would be the first major update of federal regulations for the global ocean shipping industry since 1998.

“Foreign ocean carriers aren’t playing fairly, and American producers are paying the price,” said Rep. Johnson. “It’s time for updated rules of the road. That’s what our bill does.”

USDEC’s role
USDEC, working with NMPF and a group of agricultural organizations, has been advocating for congressional action to alleviate the port congestion and untenable fees caused by the pandemic and ongoing supply-demand imbalance. That pressure resulted in the House Subcommittee on the Coast Guard and Maritime Transportation listening to testimony from agricultural exporters in a June 15 hearing on the port issues. Reps. Garamendi and Johnson, both members of that committee, subsequently announced their intent to amend the Shipping Act to address the concerns.

Through collaboration with a member working group on port congestion, USDEC provided recommendations to and worked closely with the congressional offices. A number of USDEC’s suggestions were incorporated into the final draft introduced this week.

“Dairy producers and manufacturers have faced unreasonable costs and unfair practices from ocean carriers that negatively affect U.S. exports, increasing costs and putting at risk established trading relationships,” said USDEC President and CEO Krysta Harden in a joint USDEC/NMPF press release on the bill. “This legislation will hopefully curtail those abuses and encourage better export-oriented behavior moving forward.”

USDEC also signed a joint letter as part of a coalition of more than 75 agricultural groups strongly endorsing the legislation. That letter quantifies the extent of the problem, citing an Agriculture Transportation Coalition (AgTC) survey that suggests 22% of U.S. agricultural sales cannot be completed due to ocean carrier rates, carriers declining to carry export cargo, unreasonable demurrage and detention charges and other practices.

Added costs to dairy producers from January-May 2021 alone include over $200 million in extra shipping and related expenses, or about 10% of export value over that period.

What the bill does
The Ocean Shipping Reform Act would provide new authority to the Federal Maritime Commission (FMC) to address unjust and unreasonable practices by ocean carriers. It would institute new penalties against ocean carriers and marine terminal operators for violations of the Shipping Act, require expanded public disclosure from the FMC and carriers, and establish a series of new regulations against unfair carrier practices. It also creates new oversight of carriers' charges and fees and will permit the FMC to dedicate collected penalties as restitution to impacted exporters.

To read a full copy of the bipartisan legislation, click here.

Next steps
USDEC and other ag groups are urging swift passage on the bill. We expect action in the House this fall. We have heard positive indications of a companion bill being introduced in the Senate as well.

The effort to rewrite the Shipping Act has strong support on both sides of the aisle, Garamendi said.

While the legislation represents an important step toward implementing short- and long-term solutions to the ongoing shipping crisis, USDEC will continue to work with NMPF, AgTC and other allies to champion the need for additional solutions that could be implemented more immediately to address the challenges.

EU extends implementation for new dairy and composite certificates
The EU voted this week to extend the transition-related deadlines for its new dairy and composite certificates. The new certificate rules were set for implementation on Aug. 21, 2021. But now, the bloc will allow the use of all current dairy and composite certificates through March 15, 2022, as long as they were issued prior to Jan. 15, 2022.

The announcement follows last week’s good news that USDA’s new verification procedures to comply with the new EU certificates' requirements would impose no additional burdens on dairy farmers or processors (see Global Dairy eBrief, 8/6/21, and the USDEC Aug. 4 Member Alert). The extension will also allow AMS to make sure its electronic Agriculture Trade Licensing & Attestation Solution (ATLAS) system is ready for exporters to complete the EU's new certificates by the time they are required on Jan. 15, 2022.

Read the Aug. 10 update to the EU Implementing Regulation here.

Please contact Bryan Jacoby at bjacoby@usdec.org with any technical questions on the EU certificates and refer to Volume 2 of the USDEC Export Guide for additional details.

Corrections and clarifications
In last week’s Global Dairy eBrief, we left out the word “million” when reporting U.S. dairy export volume through the first six months. The sentence should read, “Halfway through the year, we remain on record pace, having exported products equivalent to nearly 1.2 million MT of milk solids.” We apologize for any confusion caused by the error.

U.S. dairy sustainability, Korea-friendly whey applications spotlighted at Whey Protein Forum
Whey health and wellness messaging in South Korea reached key nutrition leaders last week at the second meeting of the Whey Protein Forum. The chair and vice chair of the Korean Dietetic Association (KDA), the chair of the Korean Nutrition Society, the president of the Korea Food Forum (KOFRUM), and food and nutrition professors from leading universities attended the event, which focused on telling the U.S. dairy sustainability story and how whey protein can easily, conveniently and deliciously fit into Korean daily diets.

Dr. Haejung Lee, professor of food and nutrition at Gachon University, spoke on ways to incorporate whey protein into everyday Korean foods and beverages and offered tips for consuming protein throughout the day. (Check out this LinkedIn post for her protein coffee—or “proffee”—idea.) Dr. Taekyun Park, KOFRUM president, explained the U.S. dairy industry’s world-leading sustainability programs and commitment to people, the planet and communities.

The meeting also reinforced messaging from the first Whey Protein Forum meeting in April, which centered on the importance of protein for reducing sarcopenia risk, differences in protein quality, and the advantages of whey protein. As a rapidly aging society, South Korea is particularly receptive to whey protein messaging related to healthy aging.

Origins
The Whey Protein Forum is a product of USDEC’s collaboration with KOFRUM, which itself stems from our three-year partnership with the KDA. KOFRUM is a non-profit organization comprised of food and health journalists, health professionals and influential food and beverage industry leaders. Working with USDEC, KOFRUM formed the Whey Protein Forum earlier this year.

The Whey Protein Forum is comprised of a cross-disciplinary group of highly respected experts including KDA officials. The aim is for the group, after learning more about the benefits of whey protein (particularly whey protein sourced from the U.S.), to communicate reliable, science-backed information about dairy protein’s health and nutritional benefits to Korean media and consumers—a task they’ve already begun.

Proactive media pitching by USDEC and KOFRUM after the initial Whey Protein Forum in April generated 43 stories in Korean media. The second meeting has so far yielded nine with more to come.

The collaboration also yields educational benefits for U.S. dairy protein suppliers who gain a Korean perspective on whey protein nutrition and how the product might fit regional lifestyles.

The ultimate goal is greater demand for and consumption of U.S. whey protein in South Korea. For more information on the KOFRUM collaboration and USDEC whey protein work in South Korea, please contact Kristi Saitama at ksaitama@usdec.org.

Registration open for All-Member Webinar on USDEC 2022 Business Plan
Register now for USDEC’s Sept. 10 All-Member Webinar to review the draft 2022 Business Plan: A Unified Strategy for Long-Term Growth. The draft business plan outlines how USDEC plans to continue to evolve to meet the needs of a marketplace changed by pandemic and of a membership base increasingly adept at international trade.

Sign up now to hear representatives from all USDEC areas of operation explain how the organization plans to continue to open markets, facilitate trade and build demand for U.S. dairy in the upcoming year.

The meeting is an opportunity to ask questions about the plan and provide feedback on what you’ve read. If you haven’t already downloaded the plan, you can do so here. (You will need a usdec.org username and password to access it.)

We want to hear from you. We want and need your input and participation. Q&A periods during the webinar will allow you to ask questions on USDEC plans, programs and priorities.

The webinar runs from 12:45 p.m.-2:15 p.m. ET. If you need assistance accessing the plan, please contact Weston Abels at wabels@usdec.org.

EU June milk production rise moderates
After posting a strong 2.2% increase in milk deliveries in the peak production month of May, European milk output appears to be coming back down to earth in June.

EU-27+UK milk production was up 1.3% in June, based on data reported by 21 countries. Ireland (+3.7% in June compared to the previous year) and Italy (+5%) continue to drive gains, but overall EU output growth looks like it will fall well short of the estimated 1.3% increase (factoring out the extra day for Leap Year) posted in 2020.

Although June data is incomplete, the largest producer yet to file results, Germany, has posted year-over-year declines every month except May, when deliveries were flat. Nearly every other sizable producer—Denmark, France, the Netherlands, Poland—reported very modest year-over-year gains of +0.2-+0.8 in June. (Spain and UK numbers are still outstanding as well.)

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.

USDEC testifies at Colombia milk powder safeguard hearing
USDEC’s Executive Vice President for Policy Development and Strategy Jaime Castaneda testified before a hearing held by Colombia’s Ministry of Commerce, Industry and Tourism regarding a Colombian safeguard investigation into U.S.-origin milk powder imports. Colombia initiated the investigation in late June stemming from a request from the Colombian Livestock Federation (see USDEC’s July 1 Member Alert).

USDEC’s Trade Policy and Market Access & Regulatory Affairs teams, have been cooperating with members, USTR staff and USDA’s Foreign Agricultural Service, Colombian buyers, USDEC’s South America office and even a Colombian law firm in efforts to prevent the implementation of unwarranted milk powder restrictions.

Testimony highlights
Castaneda expressed deep concerns over the investigation from the U.S. dairy industry as well as the U.S. government. He characterized it as a political move with no economic or commercial merit, aimed at capitalizing on an election year. If implemented, a milk powder safeguard would negatively impact the most vulnerable consumers in Colombia as well as import-dependent small and mid-size industries, he noted. A 25-page written filing offered supporting evidence to the arguments.

Castaneda also cautioned that implementing such a safeguard would create conflict and possible retaliatory moves by the U.S. on Colombian exports ranging from food to clothing to industrial products.

Instead, he suggested that the Colombian dairy industry work hand-in-hand with the U.S. dairy industry for mutually beneficial growth, citing U.S.-Mexico cooperation. U.S.-Mexico collaboration has driven consistent gains in Mexican milk production and per capita consumption, spurred innovation and supported the dairy sectors in both nations.

USDEC will keep you apprised of any further developments in the investigation.

Member input needed: Canadian animal feed regs
USDEC is seeking member feedback by Aug. 17 on a Canadian proposal that would significantly overhaul its animal feed regulations. One of the proposed changes is to modify the list of single-ingredient feeds that are considered already approved and do not require registration.

USDEC is requesting member feedback on the changes to the proposed list. Specifically, we would like to know whether: a) any of the proposed names and descriptions are acceptable, and b) whether there are any dairy ingredient feeds that you would like to see added to the single ingredient feed register.

All feedback on the proposal should go to Bryan Jacoby at bjacoby@usdec.org by Aug. 17. He is also the contact for a full copy of the proposal if you have not read it.

UN report signals increased focus on sustainability
The latest report from the UN Intergovernmental Panel on Climate Change (IPCC) found that without “immediate, rapid and large-scale reductions in greenhouse gas emissions,” limiting global warming to less than 1.5ºC or even 2ºC will be unachievable in the years ahead.

The nearly 4,000-page report—the first of its kind in eight years—paints a clearer picture of global warming and how it is already affecting everything from rainfall patterns to sea level rise to the thawing permafrost. Some of the changes—like extreme storms, extreme heat, rising sea levels—are already locked in for decades or centuries to come, the report says.

Code red
U.N. Secretary-General António Guterres described the report as a “code red for humanity.”

Its dire findings are sure to increase the focus on greenhouse gas (GHG) emissions and sustainability among consumers, businesses and governments.

Notably, the report for the first time urges significant attention to reducing emissions of greenhouse gases that contribute to global warming other than carbon dioxide, including one that is particularly relevant to the dairy industry: methane. The report puts “a lot of pressure on the world to step up its game on methane,” said one IPCC report reviewer.

U.S. dairy well positioned to meet challenge
Although the report marks a new UN focus on reducing methane emissions, methane reduction has always been part of the U.S. dairy’s environmental stewardship commitment and Net Zero Initiative (NZI). While many of our competitors are making pledges focused only on carbon dioxide emissions, U.S. dairy has differentiated its commitment by including all three of the GHGs associated with dairy production and gained recognition as a global leader in the process.

USDEC CEO, Krysta Harden, has made communicating this unique U.S. ambition to global audiences a priority since taking over in February and an important part of the USDEC strategy to establish U.S. dairy as the source of choice for the world. Harden has met with nearly 40 global decision-makers and thought leaders in the lead up to the UN Food Systems Summit, sharing the commitments and discussing the pathways to achieving them. NZI and the U.S. FARM Program have both been recognized by the UN Summit as “game changing” solutions, and USDEC’s ongoing international outreach efforts and in-market sustainability work will only become more important as methane becomes a central focus of the global sustainability conversation.

While a commercially available methane solution remains elusive today, USDEC’s message to the world is clear—U.S. dairy already has the lowest emission rates per kg of milk and is serious about doing more. With competitors and opponents out there spreading misinformation about U.S. dairy’s environmental footprint and bureaucrats looking for ways to limit trade in unsustainable products, USDEC’s efforts are essential to keeping markets open and ensuring that U.S. dairy is recognized around the world as a healthy and sustainable solution.

For a more detailed preliminary overview of the implications of the report for dairy, see this four-page statement from Global Dairy Platform. USDEC is continuing to monitor coverage of the report and plans to work with expert partners and DMI to develop a more robust analysis of its findings. (USDEC staff; IPCC; Reuters, 8/9/21)

 

Last call for Exporter of the Year nominations
An overlooked fact concerning the U.S. Dairy Exporter of the Year selection process is this: Exporting companies can nominate themselves.

In addition, suppliers, consultants, association executives and others allied with the dairy industry may nominate global suppliers.

Being named Tom Camerlo Exporter of the Year is a marketing opportunity to showcase exporting expertise to customers, employees, media, government officials and the general public.

Winners get:

• A tribute in front of industry leaders at USDEC's fall meeting
• A handsome trophy to display at the office
• A video by Dairy Foods magazine
• An article in Dairy Foods magazine
• An article in The U.S. Dairy Exporter Blog
• A news release announcing the winner

You need to move quickly. The deadline is Monday, Aug. 16. There is no cost to nominate. Fill out a form to nominate yourself or someone else here.

Glanbia cheese plant faces another environmental challenge
In July, when an Irish High Court dismissed an appeal to halt construction on a new €140-million (about US$164-million) cheese plant in Belview, it appeared that the long-delayed project—a joint venture between Glanbia Ireland and the Netherlands’ Royal A-Ware—would finally get off the ground. Those hopes were dashed this week when Irish environmental watchdog An Taisce sought leave to appeal the High Court ruling to the Irish Supreme Court.

An Taisce adamant
This is An Taisce’s fourth challenge to the facility and it further highlights the growing focus on environmental issues and sustainability related to the world’s dairy sector. Just last week, Ornua saw its plans for a butter plant expansion put on hold due to impact on the community and environment (see Global Dairy eBrief, 8/6/21).

An Taisce cited a series of reports from the Irish Environmental Protection Agency and other authorities noting “the impacts of intensive agriculture and water and air quality and the increasing greenhouse gas emissions” from the dairy sector. Referring specifically to the Belview project, it said “the consequences for Irish rural communities are enormous and irreversible.”

Defending the build
The Irish Creamery Milk Suppliers’ Association noted that several government agencies have reviewed and approved the project, saying that it aligned with national efforts to transition the dairy sector to a more sustainable model.

Glanbia expressed disappointment with An Taisce’s move and reiterated that it is “committed to bringing this project to fruition,” despite the two-year-and-counting delay The company restated that the plant is critical to the company’s post-Brexit market diversification strategy. (Leinster Express, 8/9/21; Agriland, 8/9/21)

Mergers, acquisitions and joint ventures
Milk Specialties Global purchased the 96,000-sq.ft. Kay’s Processing plant in Clara City, Minn. The company plans to expand the plant to meet demand for extruded protein products . . . Illinois-based kefir maker Lifeway Foods is paying $6 million to acquire certain assets of California’s GlenOaks Farms drinkable yogurt business. (FoodBev.com, 8/11/21, 8/5/21)

 

• 10 questions dairy farmers frequently ask USDEC
• Nominations for Dairy Exporter of the Year due August 16
• U.S. dairy exports on record pace through first half of 2021
• Olympic runner Elle Purrier, who grew up on dairy farm, is an inspiration (retweet)