HIGHLIGHTS: JANUARY 27, 2023
• New USDEC cheese app for international consumers
• USDEC highlights dairy trade priorities with Congress, administration
• Thai cheese buyers visit U.S.
• Former FDA chief Gottlieb to keynote spring membership meeting
• Market Summary: November Chinese dairy imports
• Download the November International Demand Analysis
• NZ milk production continues to lag despite improvement
• Meet USDEC’s Rick Ortman
• Company news: Corman Miloko, Cimory, Latteria Soresina
Featured
USDEC launches new, customer-facing USA Cheeseboard mobile app
This week USDEC launched its new USA Cheeseboard mobile app. This new marketing tool was created to provide global consumers with a handy digital platform to learn more about U.S. cheese varieties, available brands in their market and the companies behind them, to encourage trial and to drive long-term demand.
“USDEC has developed hundreds of recipes showcasing U.S. cheese in a variety of cuisines from the most internationally known fares like pizza and burgers to more local dishes to encourage consumers to incorporate our products into their daily diet. We’ve also worked with U.S. cheese experts to develop over 300 cheese and beverage pairings—not just the typical wine and beers pairings but also juices, coffees, waters and more,” says Ryan Hopkin, USDEC manager, cheese marketing communications. “The app is filled with beautiful imagery to highlight the quality and craftsmanship of our industry and also features USA Cheese infographics and cheesemaker profiles, so consumers can learn more about the U.S. cheese community and seek out the products at their local retailer.”
In addition to recipes and pairings, the easy-to-navigate app also contains a section called “Cheese Journal” that provides descriptions and storage recommendations for 16 different cheese varieties (to start). The app is currently available only in English, but USDEC’s Cheese Team plans to translate it into one foreign language in 2023 and other languages in subsequent years.
This global marketing tool is a living app and USDEC will be constantly adding to it. Should you desire to have your products, brands, recipes (with credit) featured, please contact Ryan Hopkin at rhopkin@usdec.org.
Download the app today on the Google Play Store for Android devices and the Apple App Store for iOS devices and explore it for yourself!
USDEC lays out dairy trade priorities to key House committees, new USDA and USTR officials
USDEC and NMPF sent joint letters to the leaders of the House Ways and Means and Agriculture Committees, the new Chief Agriculture Negotiator at the USTR and the Under Secretary for Trade and Foreign Agricultural Affairs at USDA welcoming them to their new roles and outlining U.S. dairy trade priorities.
GT Thompson (R-PA) is the new chair of the House Agriculture Committee and David Scott (D-GA) is ranking member. Jason Smith (R-MO) is the new chair of the House Ways and Means Committee and Richard Neal (D-MA) is the ranking member. USDEC has worked with all four congressional offices in the past. Reps. Thompson and Scott, for example, flipped the roles they had served on the Agriculture Committee for the past two years.
Emphasizing priorities
U.S. exports have grown considerably over the years, with 2022 U.S. sales destined to top $9 billion and volume on track to exceed 18% of U.S. milk production, the letters note. To continue to grow, the U.S. needs to open new markets, enforce trade rules that are already in place and continue to fund programs that support dairy exports, among other prerequisites, the letters state.
Each letter (see the Agriculture letter here and the Ways and Means letter here) includes a memo “outlining U.S. dairy priorities and specific areas of needed focus, encompassing both tariff and nontariff barriers that, if resolved, will allow American products to reach store shelves and kitchens around the world.”
Those priorities include:
- Expanding markets through the negotiation of new free trade agreements.
- Diligently enforcing the trade agreements already in place.
- Lowering or removing high tariffs and retaliatory duties.
- Doubling Foreign Market Development and Market Access Program funding in the Farm Bill to promote U.S. agricultural exports.
- Removing unwarranted nontariff barriers to trade.
- Establishing clear protections for common food names to combat the misuse of geographical indications.
- Advocating for science-based standards and trade rules in multilateral organizations.
Letter to Taylor and McKalip
The joint letter to McKalip and Taylor congratulates the pair on their appointments and requests meetings with both to discuss the U.S. dairy industry’s top priorities. It also includes a separate memo laying out U.S. dairy export priorities, some of which overlap those in the House letters. Priorities include:
- Expanding markets through the negotiation of new free trade agreements, prioritizing major dairy importing countries, such as the UK, Japan, Vietnam and key regions, including Southeast Asia and the Middle East.
- Establishing explicit protections for common food names to combat the misuse of geographical indications, starting with defending our market access for these products in current trade agreement partners’ markets.
- Keeping current market access opportunities open and enforcing the terms of existing U.S. trade treaties.
- Leveraging trade and economic forums, including the ongoing Indo-Pacific Economic Framework and Taiwan negotiations, as well as various Trade and Investment Framework Agreement (TIFA) avenues, to address nontariff barriers.
- Restoring export growth to China by addressing the lingering impact of Chinese retaliatory tariffs on U.S. dairy exports.
- Removing unwarranted nontariff barriers to trade in a variety of key dairy markets, while guarding against future barriers in development, such as emerging EU agricultural policies.
- Pursuing WTO reforms to strengthen the rules-based global trading system, including prioritization of market-based trade liberalization, reduced market distortions, enhanced transparency, and a more effective dispute settlement system.
- Advocating for science-based standards and trade rules in multilateral organizations.
All the letters conclude with the offer to work together to strengthen dairy exports and deliver a brighter future for the U.S. dairy industry.
Events
USDEC instructs Thai Cochran fellows on U.S. cheese, the U.S. CDE and U.S. dairy sustainability
Representatives from six Thai retailers and importers plus Sukanya Sirikeratikul from the FAS Office of Agricultural Affairs in Bangkok visited the U.S. this month for an intensive two-week course on U.S. cheese as part of the USDA Cochran Fellowship Program. The fellowship program provides short-term training opportunities to agricultural professionals from middle-income countries, emerging markets and emerging democracies. It seeks to strengthen and enhance trade ties between eligible countries and U.S. ag interests, among other goals.
The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) organized the trip, which featured a visit to the Fancy Food Show in Las Vegas, training at the Center for Dairy Research at the University of Wisconsin-Madison (UW-CDR) and tours of U.S. dairy farms and cheese manufacturing plants, including Belgioioso, Schreiber Foods and Sartori. USDEC Vice President, Global Ingredients Marketing Terri Rexroat took part during an afternoon of dairy presentations at DATCP offices in Madison, Wisconsin.
The Thai Cochran Fellows introduce themselves during the afternoon dairy session at the DATCP offices.
Rexroat highlighted USA Cheese Guild activities aimed at increasing awareness and trial of U.S. cheeses, introduced the U.S. Center for Dairy Excellence in Singapore (U.S. CDE) and explained U.S. dairy’s sustainability story and ongoing efforts to achieve greenhouse gas neutrality, optimize water use and improve water quality. The presentation included a photo gallery of USDEC’s overseas cheese activities and Dairy Management Inc.’s U.S. Dairy Net Zero Initiative video.
Dairy Farmers of Wisconsin provided a selection of U.S. cheeses for participants to sample during an afternoon break.
Former FDA Commissioner Scott Gottlieb to keynote USDEC spring Membership Meeting
USDEC is filling the agenda for the upcoming spring Membership Meeting with a roster of must-see, high-profile trade and policy experts, starting with the very first general session speaker on March 28. Physician and former FDA Commissioner Scott Gottlieb will join USDEC President and CEO Krysta Harden for a “fireside chat” that Tuesday morning. Harden plans to explore a range of topics with Dr. Gottlieb—from COVID and the health of the nation to FDA’s role in exports to dairy and food labeling to infant formula regulations.
Dr. Gottlieb had a historic run as FDA commissioner. During his tenure (2017-2019), the agency approved a record-setting number of novel drugs, medical devices and generic medicines. Under his leadership, FDA advanced new frameworks for gene therapies and other medical treatments, implemented reforms to standardize drug reviews and improve post-market data collection, and promoted policies to improve food safety.
He currently serves on the board of Pfizer and Illumina and is a resident fellow at the American Enterprise Institute, a partner at the venture capital firm New Enterprise Associates, a regular contributor to CNBC, and a best-selling author of the book Uncontrolled Spread: Why COVID-19 Crushed Us and How We Can Defeat the Next Pandemic.
The full Membership Meeting runs from March 27-29 at the Willard Intercontinental Hotel in Washington, D.C. It will be the only USDEC Membership Meeting this year, and there will be no virtual attendance option (although most sessions will be recorded and made available online sometime after the event).
Register now by clicking here and watch your inbox in the coming weeks for more information. Invite a colleague to attend by clicking here and sending the automatically generated email.
To reserve a room at the Willard at a discounted rate, please click here. The unique group code you will need to book the room in the USDEC block is DM3. The deadline to reserve a room at the lower rate is 5 p.m. ET on Feb. 16, 2023.
Market Summary
Chinese dairy imports improve in December, but signs suggest slow start to 2023
Chinese dairy imports (major products, not including fluid) jumped 27% in December, marking only the third year-over-year increase in 2022 and the largest by far. That good news is tempered by the low bar set the previous year. December 2021 Chinese imports (126,491 MT) were the smallest of any month since October 2019. Going back further, the December 2022 results look mediocre at best. December 2022 volume was 5% less than December 2020 and 3% less than December 2019.
So while the gain was a welcome change of pace, it is by no means indicative of a Chinese demand rebound.
Milk powder and whey led the December increase. Chinese WMP imports rose 22% (+7,032 MT) in December, compared to the previous year, while SMP imports jumped 44% (+8,947 MT). Whey continued to rebound, rising 43% (+18,539 MT).
On the downside, Chinese cheese imports fell for the second straight month, down 15% (-2,059 MT) and lactose slipped 9% (-786 MT).
Year-end results poor
Even with December’s increase, China’s 2022 dairy import total paled in comparison to the record year of 2021. Year-end imports (major products, not including fluid) fell nearly 370,000 MT, with double-digit declines across WMP, SMP, whey and cheese.
When China publishes January 2023 import results in February, the new year is almost certain to start on a low note. Global export data (as noted in USDEC’s November International Demand Analysis, see below) point to a huge drop-off in peak-buying demand from China (import data lags export reporting by one to two months).
How much of that pullback was COVID-related remains to be seen. China was still following its zero-tolerance COVID policy in November and economic conditions and social unrest were worsening at the time. USDEC still expects Chinese demand recovery in 2023, but the speed and magnitude remain in question.
November International Demand Analysis ready for download
Year-over-year global dairy trade fell in November for the first time in four months. Total trade declined 3.5% on a milk solids equivalent (MSE) basis, weighed down by a 33% drop in shipments to China.
Of the world’s top three dairy exporters, only the U.S. increased volume in November. EU27+UK exports fell 6% in MSE terms and New Zealand exports declined 8%.
For details on November performance, download USDEC’s latest International Demand Analysis. The 70-page document is packed with charts, graphs and commentary, providing a forward-looking glimpse at global markets from a U.S. exporter’s point of view. It analyzes demand in key markets for cheese, NFDM/SMP, whey (HS Code 0404.10) and WPC80+, and also includes shorter summaries for lactose, butterfat and WMP. For questions, please contact William Loux at wloux@usdec.org or Stephen Cain at scain@nmpf.org.
NZ milk production improves but still falls short
New Zealand milk production fell 0.6% in December. It was the sixth straight year-over-year decline but the smallest of the streak, missing the previous December by only 15,000 MT. In fact, New Zealand milk solids production for December actually rose 0.6%.
Improved weather and pasture growth helped minimize the YOY shortfall, but it was still the 16th NZ milk production decline of the last 17 months. While parts of the South Island are drying out, North Island weather has continued to support good pasture conditions into the new year. Early reports suggest New Zealand could squeak into positive growth territory in January.
USDEC News
Meet Rick Ortman: USDEC consumer insights leader
As overseas dairy competition intensifies and U.S. dairy suppliers seek to expand in existing export markets and diversify into new ones, it is more critical than ever to understand exactly what overseas consumers seek when making food and beverage buying decisions. Rick Ortman, senior vice president, Strategic Insights, joined USDEC last year to help provide that deeper understanding of overseas buyer and consumer needs and deliver actionable insights to members to meet those needs.
Ortman brings 18 years of food and beverage insights experience to USDEC from confectionery colossus Mars Inc. and foodservice giant Sodexo. The key to uncovering accurate, valuable, actionable information on which to base business decisions lies in what Ortman calls “data intimacy.”
“Good insights professionals always understand how their data has been collected and what limitations and biases are built into it,” he says.
Creating an insights department
At Sodexo, Ortman was responsible for building a professional global insights department for the food business from the ground up.
“Sodexo had never had a professional insights function in the past and based their marketing and new product/menu/format decisions on gut opinions vs. data,” he says. “During my time at Sodexo, I established clear, consumer-centric, data-driven processes to evaluate new menu items, new retail formats, as well as product assortment and merchandising decisions.”
Those processes were adopted across developed markets for Sodexo globally. The insights team grew from a single person to include research professionals in Europe, Asia, Australia and the Americas.
Ortman plans to take his experience and similarly bolster USDEC’s insights capacity. He has seen the value members place on the expertise and experience gained from other USDEC departments in helping them navigate the complexities of export markets.
“My goal is for the insights that my team provides to be equally indispensable for our member organizations,” he says.
Identifying universal motivations
What are some of the key consumer insights Ortman has gleaned over the years that translate to dairy?
“Cuisines and flavor preferences vary widely across the globe, but consumers all want solutions to the same kinds of problems,” he says. “Consumers all over the world snack for the same reasons, drink coffee for the same reasons, seek out particular types of dishes for lunch for the same reasons. The key to understanding consumers across the globe is to build motivational frameworks that are universal and adapt to local tastes/cuisines, cultures and lifestyles.”
Company News
Corman Miloko set to close
Corman Miloko, a joint venture dairy spread and butterfat manufacturer based in Carrick-on-Sur, Ireland, plans to close its doors this June. Belgian butter, spread and fats and oils maker Corman owns a 55% stake in the operation, Ireland’s Tirlán (formerly Glanbia Ireland) owns the other 45%. Corman, in turn, is part of the French dairy company Savencia Fromage and Dairy.
The closure comes after “significant restructuring” failed to turn around sagging volume sales. The joint venture company, which has been in business since 2005, sells primarily to export markets. (Agriland, 1/21/23)
Mergers, acquisitions and joint ventures
Italian dairy-co-op Latteria Soresina plans to acquire Italian gorgonzola maker Fratelli Oioli. Sorensina said it hopes the acquisition would open additional export opportunities. … New York-based global equity firm General Atlantic paid $130 million for a 5.6% stake in Indonesian dairy and food processor Cisarua Mountain Dairy, also known as Cimory. Cimory said it plans to use the funding to accelerate growth initiatives, including new product development and broadening its distribution network. (Company reports; FoodBev.com, 1/18/23)
Company news briefs
Korea’s Lotte Confectionery is investing $55 million over the next five years to expand its Indian ice cream subsidiary, Havmor Ice Cream. The project centers on a new 650,000-sq.-ft. manufacturing plant in Pune, Maharashtra. Havmor operates 216 ice cream parlors in India. … Nestlé Health Science is spending $43 million to add two new production lines to its Eau Claire, Wisconsin, manufacturing plant for ready-to-drink beverages. The facility produces an array of medical nutrition products and nutritional drink brands such as BOOST and Carnation Instant Breakfast. (Leader-Telegram, 1/25/23; FoodBev.com, 1/19/23)
In Case You Missed It...
U.S. Dairy Exporter Blog
Market analysis, research and news subscribe hereUSDEC Twitter feed
Follow us here.