• Rail strike averted

• World Dairy Summit coming to U.S. in 2023

• Roadmap to net-zero emissions

• Harden talks USMCA enforcement

• Member opportunity: Mexican border seminar

• U.S. cheese in the spotlight at FHA

• Japan protein workshop

• Register now! Zoellick to speak at fall board meeting

• Market Summary: EU milk rebounds in July

• Comments to FMC on emergency supply chain situation

• Comments on Kenya trade talks

• IPEF sets negotiating parameters

• Darigold breaks ground

• Fonterra targets wellbeing

• Company news: Emmi, Nestlé, Starbucks

 

Railroads, rail workers reach tentative labor agreement, avert strike
Early yesterday morning, major U.S. railroads and unions reached a tentative deal on a new contract, narrowly averting a nationwide strike that would have crippled the U.S. rail network. The Biden Administration had been working with the unions for months and helped broker the final deal in a marathon 20-hour bargaining session in Washington, D.C.

President Biden called it “an important win for our economy and the American people.”

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” the president said in a statement. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

Crisis averted, but challenges continue
A rail stoppage would have cost the U.S. economy around $2 billion a day and further stressed an already challenged U.S. supply chain. Nearly 30% of U.S. freight, including much of U.S. food, fuel and fertilizer, move by rail.

The agreement now heads to union members for a ratification vote. While the vote is tallied, workers have agreed not to strike.

Despite the good news, the U.S. rail system continues to deal with congestion and delays and remains a supply chain challenge. Nearly 80% of shipping containers at the Ports of Los Angeles and Long Beach, for example, are waiting more than five days to make their rail connections. That number was less than 20% in January.

USDEC’s role
USDEC and NMPF have repeatedly shared concerns over any stoppage of service in conversations with the White House and relevant agencies leading up to the agreement, including a meeting Tuesday with the U.S. Department of Agriculture. U.S. dairy exporters cannot afford to take on additional supply chain congestion, a message that USDEC continues to drive home to the administration as the organization works to pursue solutions to the degradation in rail service.

World Dairy Summit concludes with event hand-off to U.S.
The countdown has begun for the 2023 International Dairy Federation (IDF) World Dairy Summit, hosted by the U.S. On Wednesday, during the gala dinner ceremony at this year’s Summit, the 2022 host country, India, handed off the symbolic host key to the US-IDF Organizing Committee Co-chairs Nick Gardner, USDEC senior vice president, Sustainability and Multilateral Affairs, and Shawna Morris, USDEC senior vice president, Trade Policy.

Shri Meenesh Shah (second from left), Indian National Committee of IDF National Secretary, hands the ceremonial key to the World Dairy Summit to Nick Gardner and Shawna Morris, co-chairs of the US-IDF Organizing Committee for the 2023 World Dairy Summit. The trio is flanked by IDF President Piercristiano Brazzale and IDF Director General Caroline Emond.

“As host, U.S. dairy is developing programming that will feature global and industry leaders, experts, scientists, technical specialists, farmers and more, exploring the global dairy sector’s most significant opportunities today and tomorrow,” said Gardner in a US-IDF press release on the event. It will serve as a forum for all global dairy stakeholders to discuss how to further advance the collective global dairy sector forward in a positive, sustainable manner.

The 2023 Summit, themed “BE Dairy—Boundless Potential. Endless Possibilities,” will take place in Chicago in October 2023. As previously noted, the Summit, with Dairy Management Inc. as the Diamond level sponsor, provides a valuable opportunity to showcase the United States’ global dairy leadership and the U.S. commitment to global market development, sustainability and product innovation.

For more information on the 2023 World Dairy Summit, visit www.idfwds2023.com. For more information about IDF and what does, visit www.fil-idf.org or download the 2022 IDF Annual Report. For more information on the US-IDF, visit www.usidf.org.

USDEC co-authored journal article lays out roadmap to net-zero emissions
A new research article in the journal Scientific Reports outlines how global food systems can expand to feed the growing world’s population while simultaneously facilitating global climate targets. Co-authored by USDEC Senior Vice President, Sustainability and Multilateral Affairs Nick Gardner, the article, “Roadmap for achieving net-zero emissions in global food systems by 2050,” demonstrates USDEC’s ongoing impact on the global conversation about sustainable agriculture, laying out a decade-by-decade plan to guide global food systems to achieving net-zero in the next 28 years.

To achieve net-zero, the global food system must:

• Implement cost-effective mitigation practices and technologies by 2030.
  
  
• Improve country governance and technical assistance by 2040.
  
  
• Implement innovative financial mechanisms and affordable technologies by 2050.

The research looked at 60+ pathways for achieving net-zero emissions as food production intensifies and found that while they could significantly reduce food systems’ emissions, they would fall short of net-zero.

There is no “silver-bullet” solution to the challenge, the paper notes. Increasing the feasibility of reaching the net-zero goal will require a more diverse portfolio of practices and innovative research, including diet shifts and new-horizon technologies.

USDEC talks USMCA with Canadian cheese council and Sartori

Left to right: Sam Allison, director of global markets, Sartori; Marie Lemieux, senior advisor, International Cheese Council of Canada (ICCC); Joe Dal Ferro, ICCC vice chair; Krysta Harden, USDEC president and CEO; and Tony Rice, USDEC trade policy manager met last week at USDEC headquarters in Arlington, Virginia, to discuss enforcement of the U.S.-Mexico-Canada Agreement.

Member opportunity: Mexico border training seminar 
USDEC’s Market Access and Regulatory Affairs team invites members to a special seminar addressing the most common concerns and regulatory hurdles facing USDEC members and their customers in Mexico. Experts in foreign trade will discuss the regulatory climate affecting U.S. dairy exports, with government authorities from each country presenting the most relevant issues suppliers need to know.

The seminar includes presentations on global dairy trends, USDEC Export Guide updates, and discussion panels with U.S. and Mexican government officials, Mexican industry representatives, and private certification and standardization agencies. In addition to representatives from Mexico’s General Directorate of Standards (DGN), Ministry of Economy (ECONOMIA) and General Directorate of Agricultural Standards, Secretariat of Agriculture and Rural Development (SADER), the list of presenters includes:

• William Francis, director, AMS/Washington
• Yvette Percell, International Trade Advisor, FAS/Washington
• Dan Archibald, director, Agricultural Trade Office, FAS/Monterrey, Mexico
• Mariano Salceda Servín de la Mora, president, National Chamber of Milk Industry (CANILEC)
• Juan A. Dorantes, managing partner, Dorantes Advisors
• Abel Hernandez, General Director, Standard and Certification Association (ANCE)
• Miguel Cos Nesbit, director, Confederation of Customs Brokers of the Mexican Republic (CAAAREM)
• Nicolas Miramontes, CEO, Transload Forwarding & Logistics

The event will take place in El Paso, Texas, at the Hotel Paso del Norte. Click here to make room reservations with preferential rates before Sept. 23. It will begin on the evening of Oct. 4 with a casual networking reception and run through lunchtime on Oct. 6, with an optional export facility tour that afternoon. Please RSVP here.

High profile for U.S. cheese at Food & Hotel Asia
Last week’s Food & Hotel Asia (FHA)–Food & Beverage show offered a major platform for USDEC to build recognition of U.S. cheese and dairy products in the foodservice and hospitality channels in Asia. The show, the largest food and beverage event in Singapore, attracted more than 40,000 visitors in its comeback after missing two years due to the pandemic.

USDEC engaged with existing and potential importers, distributors, chefs and members throughout the event, including a cheese reception the evening of Sept. 6.

More than 225 importers, distributors and chefs attended the joint reception hosted by USDEC, the California Milk Advisory Board, the Oregon Dairy and Nutrition Council and Dairy Farmers of Wisconsin during the show. The reception, themed “Travel Through the United States of Cheese,” featured cheese stations representing different regions of the country showcasing 70 cheeses from 40 U.S. cheesemakers. Attendees had the opportunity to see and taste first-hand U.S. cheese quality and variety.

Importers, distributors and chefs taste and discuss U.S. cheeses at the U.S. cheese reception last week during the Food & Hotel Asia–Food & Beverage show in Singapore.

Head of the USDEC Southeast Asia office Dali Ghazalay, USDEC Senior Vice President, Global Cheese Marketing Angélique Hollister and Regional U.S. Agricultural Attaché Timothy Harrison offered opening remarks for the session and USDEC consultant chef John Esser gave an overview of cheeses.

USDEC consultant chefs Muhamad Imran from Singapore and Esser and Barbara Alexander from the United States further engaged with attendees during the reception to explain tastes, pairings and applications for the cheeses.

On the floor
The USA Cheese Guild (USDEC’s customer-facing identity and marketing communication platform for cheese) and eight U.S. dairy suppliers met show-goers at booths in the U.S. Dairy Pavilion from Sept. 5-8. (Five other U.S. suppliers and organizations had booths outside the pavilion.)

USDEC staff met importers/distributors from Singapore, the Philippines, Indonesia, Malaysia, Vietnam, Korea, Taiwan, and other Asian countries, as well as attendees from Australia and the UAE. Twice a day at the USA Cheese Guild booth, Chef Imran conducted demos showing how he uses U.S. cheeses in creating menu items, with attendees getting a chance to sample the dishes.

On the final day of the show, USDEC invited members to tour the U.S. Center for Dairy Excellence (U.S. CDE) in Singapore. U.S. CDE staff explained the features of the facility to provide a better understanding of how they could leverage it in their efforts to expand business in Southeast Asia.

Dali Ghazalay (right), regional director, USDEC Southeast Asia, shows USDEC members the conference room facilities at the U.S. CDE in Singapore. Anoo Pothen (left), USDEC Southeast Asia director of consumer insights, assisted with the tours.

USDEC holds first in-person ingredients workshop in Japan since pandemic
Given Japan’s vigilant approach to COVID-19 and elevated numbers of new case totals in recent weeks, USDEC was uncertain what kind of response last week’s in-person interactive workshop would generate. It was the first face-to-face ingredients workshop in Japan since the start of the pandemic.

The fact that the event attracted 27 representatives from food and beverage companies speaks to the high degree of interest in using U.S. whey and milk proteins as key ingredients in new product development efforts.

Japan is already a growing market for high-protein U.S. whey. U.S. shipments of WPC80+ to Japan jumped 46% to 10,309 MT in 2021, surpassing Canada as the No. 2 U.S. market behind top-buyer China. Through the first seven months of 2022, year-over-year U.S. WPC80+ shipments to Japan spiked another 56%, moving the country into the lead as the No. 1 U.S. market for high-value, high-protein whey.

Workshops like “Protein New Product Development 2.0: Protein Innovation Using U.S. Dairy Ingredients in an Expanding Protein Marketplace” look to continue to build on that momentum.

Tasting prototypes
One of the big advantages of returning to in-person workshops is the ability for attendees to actually feel, smell and taste products made with U.S. whey and milk proteins.

Over the last year, USDEC partner Kiyota Sangyo developed a series of Japan-friendly, everyday health-and-wellness-positioned products made with WPC80, WPI and MPC. Besides illustrating dairy protein versatility, the prototypes reinforce the concept that dairy protein applications extend well beyond traditional sports nutrition products to mainstream food and drinks.

Kiyota Sangyo and USDEC Japan office staff presented many of those prototypes during the tasting portion of the workshop, giving attendees a chance to really experience U.S. dairy protein potential and sparking innovation ideas.

Attendees were able to sample Kiyota Sangyo prototypes during the tasting portion of the workshop. Motoko Takeuchi, program coordinator, USDEC Japan office (at podium) and Kiyota Sangyo’s Yusura Ozaki, R&D department (standing, right of podium), guided the students through the tastings.

Hiroshi Furuyama, senior marketing manager, USDEC Japan office, unveiled brand new product concept testing consumer research assessing consumer feedback on the prototypes, shedding further light on their potential. Other speakers, including Hisao Fukuda, business development director at the USDEC Japan office, highlighted the versatility and nutritional benefits of U.S. dairy protein ingredients, why the U.S. is ideally suited to meet food and beverage processors’ innovation needs, and how USDEC can help them on their product innovation journeys.

FABEX presence
The protein workshop was held in conjunction with the Kansai FABEX Food & Beverage Great Expo and Dessert, Sweets & Bakery Festival in Osaka. USDEC further highlighted the Kiyota Sangyo prototypes at its FABEX booth and distributed a new handout containing QR codes that link to previously recorded webinar speakers since 2020. This includes videos of Kiyota Sangyo speakers discussing how they use U.S. dairy protein to formulate specific prototypes. The QR-code concept ensures that USDEC gets extra mileage out of past events by recreating engagement opportunities with potential customers. (Click here to select from the full slate of videos—in Japanese only.)

Zoellick to speak at fall board meeting
It has been over a decade since the United States initiated a new free trade agreement (FTA) from scratch. Some officials have even called FTAs a tool of the last century. As U.S. dairy export competitors forge ahead with new trade deals, the future of market access for U.S. dairy products is uncertain.

Hear what former U.S. Trade Representative (USTR) Robert Zoellick has to say about the future of U.S. trade policy and the implications for dairy exports at the upcoming USDEC Fall Membership Meeting. Ambassador Zoellick will bring his extensive experience as former USTR, Deputy Secretary of State and World Bank president to provide insights on negotiating trade deals and promoting U.S. overseas business opportunities in a session titled, “The Future of Trade Policy in a World of Uncertainty.” USDEC Executive Vice President, Policy Development and Strategy Jaime Castaneda will moderate.

Register now
The Fall Membership Meeting takes place Oct. 10-11 at Chicago’s Swissôtel. To download the preliminary agenda, click here. To register for the event, click here. The deadline to secure a room rate at the Swissôtel under the USDEC group discount is Monday, Sept. 19.

As was the case for recent membership meetings, the Oct. 11 general session will offer the option to attend in-person or participate virtually. However, activities taking place Oct. 10—including the Trade Policy Committee Meeting and the special session on Southeast Asia (“Southeast Asia Trends Briefing: Consumer Attitudes and Perceptions on Sustainability”)—are in-person only. If you have any questions about registration, please contact Weston Abels at wabels@usdec.org.

EU27+UK milk production rebounds in July
With only Sweden yet to report, EU27+UK milk deliveries rose 0.4% in July, compared to the previous year. It was the first year-over-year monthly gain since February and aligns with expectations for a return to modest EU milk output growth in the second half.

While the region’s top two producers—Germany (-0.6%) and France (-0.2%)—continued to see production erode in July, Poland (+5.8%) and the Netherlands (+3.5%) recorded their largest gains of the year. Southern states generally fared worse than those in the north, with Spain down 4.8%, the Balkan states down 4.3%, Greece down 3.1% and Italy off by 0.1%.

Year to date through July, EU27+UK milk production was down 0.7%.

Member input supports need for FMC declaration of “emergency situation” in supply chain
Member input from USDEC’s recent supply chain surveys is already being put to good use. The Federal Maritime Commission (FMC) requested information related to “whether an emergency situation exists” related to supply chain congestion and whether U.S. suppliers are feeling “any adverse effects” on competitiveness and reliability.

USDEC and NMPF submitted comments this week to FMC noting the ongoing problems facing U.S. dairy suppliers, and based on the member survey:

• 65% of respondents indicated detention and demurrage fees continue to be a challenge.
• 43% indicated container access has not improved.
• 92% responded that they continue to experience canceled or rolled vessel bookings.
• 54% had recent experience with blanked sailings.
• 44% reported ongoing issues with adequate or reliable earliest return dates.

“The significant concerns that our members continue to experience suggest that cargo congestion and inadequate ocean freight transportation services constitute an emergency situation,” the comments note.

They go on to suggest that the FMC, as part of an emergency determination, require that ocean carriers and terminal operators provide more accurate, up-to-date information to shippers, rail carriers and other parties to address the ongoing problems.

The comments suggest six areas where ocean carriers and terminal operators should provide more supply chain status information, including vessel sailing schedules with requirements for advance notice of any blanked sailings, details about the availability and location of empty containers, and advanced prior notice for changes to vessel schedules and related contingency specifications for dwell time related to port congestion.

USDEC submits comments on U.S. Kenya trade negotiations
USDEC and NMPF submitted joint comments on the proposed U.S.-Kenya Strategic Trade and Investment Partnership to the U.S. Trade Representative’s Office. Like the proposed Indo-Pacific Economic Framework and U.S.-Taiwan Initiative on 21^st-Century Trade, a Kenya deal would not be a comprehensive trade agreement with mutual tariff reductions.

But also like the other two proposed talks, USDEC still sees potential benefits to pursuing an agreement. The comments note that USTR could use a potential partnership with Kenya to establish useful precedents for smoother trading conditions and to eliminate nontariff trade barriers in the region. Specifically, the comments urge USTR to address dairy trade impediments to Kenya by:

• Seeking the reduction of WTO Most-Favored Nation (MFN) duties on dairy products.
  
  
• Removing current nontariff barriers to U.S. dairy exports in Kenya.
  
  
• Instituting concrete measures to guard against future unjustified restrictions on U.S. export opportunities, including by establishing robust market access protections for the use of common food names.

“Removing barriers to trade and establishing robust safeguards to guard against future unjustified trade restrictions are imperative to achieving an agreement that delivers tangible opportunities for U.S. dairy producers and manufacturers,” the comments conclude.

IPEF countries agree on negotiating framework
The U.S. and 13 Indo-Pacific countries agreed to parameters for negotiating closer trade, environment and economic ties at last week’s Indo-Pacific Economic Framework ministerial meeting in Los Angeles. The four pillars of the talks are trade (including agriculture), supply chain, clean economy and fair economy. All countries agreed on key outlines for negotiating each of the pillars, except for India who opted out of the trade pillar.

For the agriculture section of the trade pillar, the ministerial text notes that the parties will focus on:

“Advancing food security and sustainable agricultural practices, including promoting the use of appropriate technologies to improve climate-smart, sustainable production practices that are context-appropriate and evidence-based; increase productivity while optimizing land, water, and fuel use; and help contribute to climate change mitigation and adaptation, food security, and resiliency. Further, in a manner consistent with WTO Agreements, we will seek to: enhance food and agricultural supply chain resilience and connectivity; avoid unjustified measures that restrict food and agricultural imports; improve transparency of regulatory processes and procedures; advance science- and risk-based decision-making to protect human, animal, and plant life or health; improve processes and promote cooperation regarding regulatory and administrative requirements; avoid unjustified prohibitions or restrictions on food and agricultural exports; and promote the use of digital tools and other relevant means or arrangements to reduce compliance costs in international food supply chains.”

USDEC continues to vocally press for trade negotiations that address both tariff and nontariff barriers for dairy products in the IPEF, including Indonesian plant registration issues, common name protections and other priorities. USDEC submitted confidential comments to the U.S. government in advance of the launch of last week’s ministerial. That input follows public comments submitted to USTR in April.

U.S. Commerce Secretary Gina Raimondo said the IPEF group is working on a “really aggressive timeline.” USTR Katherine Tai said the first round of discussions on each pillar would take place after the ministerial. A second ministerial meeting is expected in early 2023.

Even as IPEF proceeds, USDEC will continue to press for the need to restart free trade agreements and pursue other measures that yield dairy trade benefits in the Indo-Pacific region.

 

Darigold breaks ground on Pasco plant, bolsters global sales team
Darigold broke ground on its $600-million dairy facility in Pasco, Washington. Originally announced last summer, the Pasco facility, when fully operational, will produce about 80,000 MT of butter and around 125,000 MT of milk powder annually, including high-spec powder for infant formula. The plant will service domestic and export markets.

Darigold also strengthened its global leadership team to support its rapidly growing international business. Kevin Quinn was named vice president of global sales and will lead global manufacturing, account engagement and market development for Darigold’s Class III and IV businesses.

Mariana Lezama and Batthew Pang were named managing directors of the coop’s offices in Mexico City and Shanghai, respectively. Lezama will represent Darigold’s complete portfolio and overseas business execution for all of Latin America. Pang will represent all of Darigold’s product portfolio in North Asia. (Company reports)

Fonterra launches new B2B “nutrition solutions” brand
New Zealand’s Fonterra Co-operative Group launched what it is calling a new “wellbeing nutrition solutions” brand called Nutiani. The brand will focus on three wellbeing categories—physical, inner and mental—with ingredients including lactoferrin, probiotics and lipids. Products tailored to the physical would address conditions such as muscle health and sarcopenia, mobility, weight management and malnutrition. Inner would include immunity, digestive health and metabolic health. Mental would address cognitive health, stress, mood and sleep.

The global market for physical, mental and inner wellbeing nutrition is growing at 6.1% per year, while medical nutrition is expanding at 5% annually, Fonterra said. Together, the two markets are currently worth about US$116 billion.

“There’s no doubt that people are paying more attention to wellbeing and managing it through diet,” said Komal Mistry-Mehta, Fonterra’s chief innovation and brand officer. “Research shows that 96% of consumers actively manage their wellbeing, with more than half of these consciously managing their diet to improve their wellbeing.”

The company says it plans to work with customers to accelerate innovation and respond to rapidly evolving consumer demands, with a focus on the Asia-Pacific region. (Company reports; DairyReporter.com, 9/12/22)

Emmi opens new cheese plant
Swiss dairy processor Emmi replaced a 40-year-old cheese building at its Emmen, Switzerland, manufacturing site with a new CHF50-million (about US$52 million) specialty cheesemaking operation. The new facility, which opened last week, can produce 10,000 MT per year of varieties such as Luzerner Rahmkäse. Emmi said it made the investment to serve long-term rising demand in domestic and export markets. (Company reports)

Company news briefs
Nestlé said it is exploring emerging technologies for the development of animal-free dairy protein-based products. It plans to pilot a novel product through its newly established U.S. R+D Accelerator later this year. The initial product will use a fermentation-derived protein made by animal-free protein pioneer Perfect Day. … Starbucks said it expects sales in China to nearly double over the next three years as it adds about 3,000 new stores to the country. (Company reports; Wall Street Journal, 9/14/22)

 

• U.S. will host IDF World Dairy Summit next year in Chicago
• Nick Gardner wins IDF Prize of Excellence
• Harden addresses unique challenges that women dairy leaders face
• U.S. the only major dairy exporter to see solid growth in exports over the past 12 months
• Nick Gardner co-authors article in science journal on ag sustainability