• U.S. CDE opens
• Learn how you can use the U.S. CDE

• Action requested: Fill out annual meeting survey
• Mexico ingredient workshop for cheesemakers

• Dairy ingredient webinars in Latin America, MENA

• Defending dairy with IICA

• Market Summary: NZ cheddar rising

• Market Talk with Alyssa Badger

• New EU dairy certificate

• Mexican labeling regs

• Coronavirus update

 

U.S. CDE getting attention in Southeast Asia
This week’s virtual grand opening of the U.S. Center for Dairy Excellence (U.S. CDE) is already generating excitement and interest in U.S. Dairy in Southeast Asia. Nearly 250 food and beverage industry representatives watched the online celebration on Oct. 21. Dali Ghazalay, USDEC regional director, Southeast Asia, and the team are being inundated with well wishes following the launch and have received numerous requests for meetings.

The launch received substantial media coverage and reporters are still following up for further stories. Watch this video from Channel News Asia, or read stories from The Straits Times or Food & Beverage Asia.

High-profile speakers from the U.S. and Singaporean governments, USDEC President and CEO Tom Vilsack, USDEC Senior Vice President, Ingredients Marketing, Vikki Nicholson-West and others emphasized the U.S. CDE’s design features, its objectives, and what it means to the U.S. dairy industry and customers and consumers in Southeast Asia.

Singapore government welcomes U.S. dairy
The region will require an additional $800 billion in investment over the next decade to meet its growing agricultural and food needs, said Low Yen Ling, Minister of State at Singapore’s Ministry of Trade and Industry. “The U.S. Dairy Export Council's decision to locate the center here in Singapore ensures that the U.S. dairy industry continues to be well positioned to tap these commercial and growth opportunities in the region,” she added.

“The center will boost ongoing innovation efforts in sustainable nutrition in Singapore and the region. It will provide the latest R&D insights into the application of dairy products and ingredients,” Minister Low explained to viewers. “The center’s dual role as an education and training center will allow USDEC to train regional distributors as well as market U.S. dairy products to Asian consumers.”

U.S. government lauds effort
From the U.S. government, Rafik Mansour, chargé d’affaires U.S. Embassy in Singapore, highlighted the selection of Singapore as the location for the U.S. CDE.

“As Southeast Asia is world renowned for its culinary innovation and creativity, I can think of no place more fitting for this innovation hub, with its state-of-the-art demonstration kitchen, lab and training facilities,” he said. “I look forward to learning about how new win-win opportunities between U.S. and Southeast Asia businesses develop as the result of the opening of this most promising facility.”

USDEC President and CEO Tom Vilsack asked viewers to recognize the U.S. CDE as a “long-term permanent commitment by the U.S. dairy industry to Southeast Asia and to exports.”

“We recognize the importance of this market, and we recognized it in making the decision to put the U.S. Center for Dairy Excellence in Singapore,” he said. “It's going to allow us to create an education hub, a meeting place where relationships can develop, where we can get better market intelligence, ideation insights, and an opportunity to do valuable research and training—all of which will help strengthen our relationship to the Southeast Asian market.”

Left to right: Emcee Sylvia Tham; USDEC Regional Director Southeast Asia Dali Ghazalay; and Technical Director-Food Applications Martin Teo lead a virtual toast in the demonstration kitchen during the opening celebration for the U.S. CDE this week.

Giving people a taste of U.S. dairy
The celebration concluded with a dairy-based toast. Mixologist Robert Elijah Fajardo Milan and Martin Teo, technical director, food applications, USDEC Southeast Asia, provided a live example of U.S. dairy protein innovation creating a Tangy Yuzu Protiña Colada mocktail.

Participants either received the recipe or a full kit to prepare the drink and make it along with Milan and Teo. After the toast, attendees were treated to a sneak peek of the Robertson Quay facility through a self-guided 360° virtual tour highlighting the U.S. CDE's key features.

Learn more about the U.S. CDE and how it can help your business in Southeast Asia
Want to know more about the features of the U.S. CDE and how members can capitalize on the new USDEC resource? USDEC has created a new, members-only U.S. Center for Dairy Excellence web page at usdec.org.

The page includes videos from Southeast Asia office staff describing the facility’s features, a virtual tour of the floor, infographics explaining the reasons for locating the center in Southeast Asia, and FAQs on how to book space, event parameters and USDEC’s role in the kitchen and sensory lab. A recording of the Oct. 21 virtual launch ceremony is in the works.

The page is part of a series of information pieces on the U.S. CDE that USDEC has been rolling out. Also check out the press release on the virtual grand opening, the U.S. Dairy Exporter blog story, “New USDEC center in Singapore designed to serve SE Asia’s growing need for U.S. Dairy,” and tweets on the virtual grand opening here and here.

Please fill out Annual Meeting survey
Last week’s virtual Annual Meeting was a first for USDEC, and we’d like your input on how things went. Please fill out this short survey on the meeting (with questions on accessibility, content, speakers, etc.) so we know where we need to focus our energies for the next virtual meeting again in the spring of 2021.

In addition, all the presentations from the Oct. 12-15 USDEC Annual Meeting are now posted and available for member viewing at the Meeting & Webinars section of usdec.org. Scroll down and click on Fall 2020 Annual Membership Meeting to watch or re-watch the session of your choice.

Technical workshops target dairy ingredient use in Mexican cheeses
Next week, USDEC will host three one-day, in-person technical training workshops on the benefits of using U.S. dairy ingredients in fresh and semi-hard cheeses that are unique to Mexico, including queso panela, queso ranchero and queso blanco. Held in partnership with Mexico’s INCALEC (Institute of Meat and Milk of Mexico) and leading food technology university Tecnologico de Monterrey, the workshops will take place at INCALEC’s lab and pilot facility in Aguascalientes, Mexico. The target audience is mid-sized cheese manufacturers (about 150 are within driving distance of INCALEC).

Well-known industry and technical experts including Jaime Valencia, consultant to the Mexican dairy industry, and Marco Delgado, general director of INCALEC, will lead the workshops. Rodrigo Fernandez of the USDEC Mexico office will present the U.S. Dairy story.

The program will demonstrate the significant benefits of using U.S. dairy ingredients in fresh cheeses with emphasis on proper hydration of the ingredients among other formulation advice. After the classroom portion, participants will have the opportunity to apply what they’ve learned by using U.S. dairy ingredients to make the cheeses.

Three chances to attend
USDEC and its partners will repeat the workshop three times since social distancing requirements limit the number of attendees. The workshop will take place on Oct. 26, 28 and 30 to meet demand. If cheesemakers express additional interest, we may offer the content again. Workshop content will be live-streamed as well as recorded for post-event viewing.

USDEC is planning additional technical training workshops using U.S. dairy ingredients in yogurt and in beverages. We will notify members as more details become available. For more information, contact Keith Meyer at kmeyer@usdec.org.

Recent webinars bringing U.S. dairy ingredient advantages and marketing opportunities into focus
USDEC’s 2020 U.S. Dairy Ingredient Spotlight webinar series for Brazil, Colombia and the Middle East (primarily GCC countries plus Egypt) furthered its reach and engagement over the past week while positioning U.S. ingredients as an innovation solution. The most recent webinars in each market, “How U.S. Dairy Ingredients Fit into Current Market and Consumer Trends,” were broadcast from Oct. 15-22, with over 600 total registrants and 225 live viewers.

The broadcasts introduced how food and beverage manufacturers’ product development and marketing plans could capitalize on consumer trends with U.S. dairy ingredients. Donna Berry, owner of Dairy and Food Communications, offered Brazilian and Colombian audiences insight into creative ways to align with consumer preferences and lifestyles by harnessing U.S. Dairy’s nutrition and functionality. The Colombia broadcast also attracted viewers from Chile and Peru and even some in Argentina.

Julian Mellentin, founder of New Nutrition Business, recognized long-term trends and accompanying growth opportunities when engaging with the MENA viewers. He analyzed how trends like eating patterns (e.g., increased snacking) and packaging (e.g., what consumers look for packaging to signal), alongside examples of innovative and successful products, underscored potential innovation opportunities with U.S. ingredients.

Mellentin’s strong message was that protein quality is dairy protein’s big and unexploited competitive advantage. He emphasized that this offers a huge opportunity to communicate to consumers to reinforce dairy’s value as a nutritious product that delivers benefits that other protein sources cannot.

Sustainability; nutritional and functional competitive advantages
Communicating the U.S. Dairy sustainability advantage has been a key element in introducing the U.S. portfolio in each edition of webinars in the series thus far. At these events, USDEC’s VP, Global Ingredients Marketing Terri Rexroat discussed sustainability efforts across the U.S. dairy supply chain, from U.S. dairy productivity and efficiency to advantages in processing. Another key element of the webinars has been setting the presentations in the context of how U.S. dairy proteins compare to alternatives from both a nutrition and functionality standpoint.

More to come
The third webinar in the series in each region is scheduled for November and is titled, “Using U.S. Dairy Proteins in Foods & Beverages—Functionality and Applications.” K.J. Burrington, dairy ingredients applications coordinator with the Wisconsin Center for Dairy Research at UW-Madison, will be the keynote speaker. If you are interested in listening to the live broadcasts, we will publish registration information in the Oct. 30 Global Dairy eBrief as well as in the Marketing Events section at usdec.org.

Second USDEC IICA webinar proactively positions role of dairy in sustainable food systems
As noted in last week’s Global Dairy eBrief, the United Nations (UN) Food System Summit, slated for September 2021, poses both a potential threat and opportunity to dairy.

The UN special envoy for the summit is calling for “collective action of all citizens to radically change the way we produce, process, and consume food.” With the intention to produce a formal Political Declaration and Policy Framework that will shape agriculture policies around the world, the Food Systems Summit will impact the regulatory and business environment in which U.S. dairy exports are produced, marketed and consumed for years to come.

Recognizing both the threats and opportunities this system-wide event presents for dairy, USDEC continues to proactively leverage our global partnerships to position U.S. dairy as part of the solution for feeding the world responsibly and sustainably. Earlier this week, we again partnered with the Inter-American Institute for Cooperation on Agriculture (IICA) to host a two-day virtual symposium illustrating the important role of dairy and other animal protein in our global food system.

U.S. Dairy’s active role
U.S. dairy featured prominently in the programming that covered nearly all livestock sectors in the Americas. USDEC President and CEO Tom Vilsack opened remarks stressing the importance of science-based policies to facilitate dairy trade, and U.S. dairy’s commitment to continue enhancing sustainable production. He was followed by Global Dairy Platform Executive Director Donald Moore who described dairy’s contributions to global food systems, and USDEC COO Krysta Harden who presented the U.S. 2050 Environmental Stewardship Goals and U.S. Dairy Net Zero Initiative. The National Dairy Council’s Dr. Greg Miller then provided a detailed look at the importance of dairy in national dietary guidelines while U.C. Davis Professor Frank Mitloehner discussed how dairy producers have leveraged science and technology to significantly reduce methane emissions.

Those dairy-specific presentations will be included in a forthcoming publication of the proceedings of the symposium. The publication is part of a broader USDEC effort to generate a strong evidence base documenting the role of dairy in food systems that will inform preparations for next year’s Food Systems Summit. USDEC will also leverage the publication with international organizations like Codex, the World Health Organization, the UN Food & Agriculture Organization and the World Organization for Animal Health that are increasingly developing food system-based policies and recommendations.

To view an archived version of the symposium or read more about it, please visit this link.

Science-based policies drive dairy consumption and exports
The webinar and forthcoming publication offer a Western Hemisphere perspective on the importance of livestock production and animal protein consumption with science at its core. Too often debates about food policy are being driven by advocates opposed to animal agriculture or who discourage the use of safe, innovative technologies. This is most evident in Europe and fueled by organizations like the EAT Foundation that advocate for a plant-based or plant-only diet.

Unfortunately, European organizations and activists, including the EAT Foundation, are heavily involved in the planning and execution of the Food Systems Summit. This makes it essential that dairy is proactive and engaged to protect important U.S. dairy markets that frequently implement recommendations out of the UN.

A little help from our friends
Livestock producers throughout the Western Hemisphere, united via IICA and energized by programming like the USDEC-organized symposium, will be essential to present a united front that the Summit recommend only sound scientific polices and avoid ideological or regional interests. USDEC remains at the vanguard of mobilization and engagement, but must continue to leverage our international partners and allies.

IICA and its Western Hemisphere network will be essential to amplify dairy and other livestock priorities leading up to the Summit with USDEC uniquely positioned to promote U.S. dairy’s positive sustainability, nutrition and animal-care story globally. Only then can we maximize the potential benefits to global dairy consumption and trade that the Summit offers while minimizing the risks to dairy production and animal-protein consumption presented by some of the Summit’s most ideologically driven supporters.

USDEC will continue to keep you informed about developments for the Food Systems Summit. If you have any questions or would like to get more involved, please contact Nick Gardner, USDEC’s VP for Codex and International Regulatory Affairs, at ngardner@usdec.org.

NZ cheddar on the rise
U.S. cheddar prices weren’t the only ones on the way up this week. Cheddar rose 3% to US$3,803/ton at the Oct. 20 Global Dairy Trade auction. While the United States remains at a significant price disadvantage for cheese in export markets, the GDT increase marked the third consecutive auction gain since NZ cheddar hit a 20-month low of US$3,428/ton in late September.

While the auction’s bidders lifted cheddar prices, we are hearing reports of buyers elsewhere stepping back in anticipation of price declines. In the U.S. in particular, the end of the USDA food box program (Round 3 is slated to conclude Oct. 31, with no new announcement yet for a fourth round), new U.S. capacity set to come online in Michigan and growing uncertainty over foodservice operations as the weather cools and new COVID-19 cases continue to surge around the country will create pricing headwinds.

U.S. milk production rose a surprisingly strong 2.3% in September, and coupled with strong Southern Hemisphere output will increase pressure for demand gains here and elsewhere. Profitable operations in Oceania (Fonterra raised farmgate milk price forecast last week), the EU (average raw milk prices rose for three straight months through September 20) and the United States where some regions are clearly getting signals to expand (24-state cow numbers rose by 46,000 head in August vs. the previous year).

Indian powder plan
Milk powder held fairly steady at the GDT auction. Increased demand from China lifted WMP by 0.3% to US$3,037/ton; SMP declined 0.2% to US$2,851/ton. SMP could be facing increased pricing headwinds with news out of India.

The government in the state of Gujarat earmarked US$20 million to subsidize SMP exports. Gujarat dairy co-ops reportedly have 90,000 tons of SMP sitting in warehouses—50,000 tons of which accumulated since the start of the pandemic. The government plans to underwrite suppliers’ export sales to the tune of $680/ton. With a US$20-million budget, that works out potentially to around 30,000 tons of low-cost SMP on the world market.

EU exports slip
In August, for the first time this year, the EU saw year-over-year volume regression across all major dairy export categories. It was the first year-over-year decline for cheese exports since July 2019 and the first for butter since August 2019. The EU saw significant declines in cheese shipments across North America, potentially a sign of COVID-related demand weakness finally catching up with suppliers.

Badger guests on USDEC Market Talk video
The latest edition of Market Talk is up and ready for viewing in the Global Dairy eBrief Exclusives section at usdec.org. In this installment, Market Talk Special: Conversation on NZ with Alyssa Badger, HighGround Trading Group’s Director of Global Operations Alyssa Badger joins USDEC Analyst William Loux to discuss expectations for New Zealand milk production in the 2020/21 season, Chinese demand and more. Don’t miss it.

USDA releases Dairy and Products Annuals
USDA released 11 2020 Dairy and Products Annuals so far this month. To download each report, click on the respective country or region: Argentina, Brazil, Canada, Chile, China, Japan, Mexico, New Zealand, the Philippines, Taiwan and Ukraine. In addition, the U.S. Ag Trade Office in South Korea released two new short-format “product briefs” on the Korean Butter Market and the Korean Cheese Market.

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.

 

Member Action: comment on new EU dairy certificate
The EU published draft certificates for dairy and composite products that are potentially problematic for U.S. dairy suppliers. USDEC released a Member Alert earlier this week on the measures asking members to engage with importers and ask for their participation in the public comment period that ends Monday, Oct. 26, 2020 through the WTO notification process and Nov. 3 through the EU’s online portal.

The Member Alert outlines USDEC’s concerns, including

• New problematic attestations.
• Impact on goods transiting the EU en route to a third country.
• Impact on U.S. exports to third countries (Canada, New Zealand, etc.) using dairy ingredients as inputs into final products ultimately exported to the EU.

The Member Alert contains more details on the issues as well as links to a sample letter for sharing with importers, as well as the draft regulation and draft model certificates.

USDEC is working with the U.S. government on the proposal and will be filing comments directly with the EU. For questions, please contact Bryan Jacoby (bjacoby@usdec.org) or Sandra Benson (sbenson@usdec.org).

Mexico cracks down on new labeling regs
Mexico’s consumer protection office—PROFECO—took action last week to enforce (at the point of sale) new regulations (NOM-051 on labeling and NOM-223 on cheese). The agency halted the sale of at least 19 cheese products and two yogurts, including two U.S.-origin cheeses.

USDEC has been in contact with the importer/distributor and local representatives for each U.S. cheese brand, who continue to work with PROFECO to settle the matter.

PROFECO cited a variety of reasons for removing the 20+ dairy products, including incorrect net weight, products that replaced milkfat with vegetable fat, and “misleading claims.” At press time, media reports indicated PROFECO had cleared at least 12 of the products, allowing them to be sold again.

USDEC is asking members to please be aware of the new regulations. See the Mexico entry in Volume 3 of the USDEC Export Guide for full details. In addition, please communicate with your customers in Mexico to make sure your products are in compliance. For more information, please contact Oscar Ferrara at oferrara@usdec.org.

Coronavirus update: pandemic leads to Danone reorg
Danone announced that it is accelerating “an ambitious plan” to counter the challenges and capitalize on growth opportunities emerging from “a new COVID-world.” The company reorganized leadership under two macro-regional CEOs in charge of Danone International and Danone North America, and a COO in charge of a newly created strategic end-to-end production system to serve shifting markets more nimbly and in a cost-efficient manner given the pandemic.

It is also conducting a full strategic review of its portfolio of brands, SKUs and assets to support its 3-5% growth agenda, starting with its Vega brand in Argentina. The company is making the move because it believes it has collected enough insights on how COVID-19 is structurally affecting the food and beverage industry, consumers and supply chains, so it can shift the way it operates to accommodate the new reality.

More COVID news from around the world
The following is based on input from USDEC overseas offices and media reports.

Economy: World economic forecasts brought good and bad news over the last two weeks. On the one hand, the International Monetary Fund (IMF) said that the world economy will decline 4.4% this year—less than it expected in June. Similarly, the WTO said it expects global trade to decline by 9.2% this year—also an improvement on its previous prediction of 12.9%. Both organizations said the world is weathering the pandemic better than analysts originally expected.

On the other hand, both groups now say that recovery in 2021 is likely to be slower than originally expected. Separately, a World Bank report concluded that the pandemic could push as many as 100 million people around the world into extreme poverty this year.

Travel: Reopening borders to international travelers continues to vex countries around the world. Vietnam, which took a tentative step by restarting regular airline flights to South Korea earlier this month, temporarily suspended the routes as it awaits more concrete quarantine instructions from authorities.

At the same time, Singapore began allowing visitors from Vietnam and Australia on Oct. 8 and reached an agreement to form an air travel bubble with Hong Kong. Peru is opening air travel to seven Latin American countries. Japan began relaxing restrictions this month on international business travelers who meet certain travel criteria (including a negative COVID test). Oman and Saudi Arabia eased suspensions on international flights. Algeria, on the other hand, said its borders would remain closed until “the end of the pandemic.”

Singapore and the UK are exploring rapid coronavirus tests. Singapore’s would be used to facilitate business conferences, sports events and other gatherings; the UK is looking to boost air travel.

Lockdowns: Australia and Israel ended strict quarantines as daily infection numbers dropped, but Ireland became to the first European country to return to a strict nationwide shutdown in an attempt to fight rising COVID-19 case numbers. Other European nations like Germany, France and the UK are facing mounting pressure for national action as cases rise as well. Ireland is closing nonessential retail businesses for six weeks and asking residents to stay within three miles of their homes. Other nations—even those with troubling COVID-19 trends—remain committed to avoiding strict lockdowns.

Key U.S. dairy export markets continue to adjust their COVID-19 restrictions, with approaches differing broadly nation to nation. South Korea relaxed the COVID threat level from Stage 2 to Stage 1—the least stringent—while simultaneously making masks mandatory on all public transportation and in medical facilities.

Brazil and Peru loosened business and movement restrictions, increasing restaurant capacity and hours of operations as well. Malaysia reimposed conditional movement control orders in some states; Morocco, Oman, Lebanon and Qatar extended curfews and quarantines; the Philippines loosened public transportation restrictions.

All measures remain fluid. (USDEC offices in China, Japan, Mexico, Middle East/North Africa, South America, South Korea, Southeast Asia and Vietnam; International Monetary Fund; World Trade Organization; Washington Post, 10/20/20; Wall Street Journal, 10/18/20)

Mergers, acquisitions and joint ventures
Foremost Farms USA sold its Preston, Minn., separating, condensing and drying facility to Missouri-based Diversified Ingredients. Diversified will operate the plant as a joint venture with Iowa-based Johnson Farms. The new entity will be called Preston Protein Products . . . Synlait Milk’s Dairyworks unit sold its Deep South ice cream operations to New Zealand food company Talley’s Group. Dairyworks said it made the move as part of a broader plan to focus on its core cheese, yogurt and butter businesses. (Wisconsin State Farmer, 10/20/20; Reuters, 10/18/20)

 

• Opening of CDE shows U.S. Dairy’s deepened commitment to SE Asia
• State-of-the-art demonstration kitchen one of highlights at U.S. CDE
• One-year anniversary of a U.S. cheese being judged “Best in World”
• Vilsack sees new market opportunities for farmers with sustainability
• Video: Protecting common cheese names means protecting U.S. dairy jobs