HIGHLIGHTS: February 24, 2023
• Meetings with USDA Under Secretary for Trade and Foreign Agricultural Affairs
• CCFN at APEC
• Sign up now for March 1 Capitol Hill event on common names
• Membership renewal reminder
• USDEC at DMI board meeting
• Membership Meeting: building bridges across borders
• Harden speaks at AMPI
• Market Summary: GDT declines
• New Zealand milk production rises
• ALIC butter tender Feb. 28
• Company news: Saputo, Almarai, Lactalis
Featured
USDEC holds productive meetings with Alexis Taylor
USDEC continues to engage with U.S. agriculture and trade officials on key U.S. dairy export priorities. Last Friday, USDEC President and CEO Krysta Harden; Executive Vice President, Policy Development Jaime Castaneda; and Senior Vice President, Trade Policy Shawna Morris met with new USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor in two separate meetings.
Friday morning, Castaneda and Morris reiterated U.S. dairy priorities that USDEC communicated in a January letter to Taylor and Doug McKalip, the new Chief Agricultural Negotiator at the USTR. Those issues include expanding markets through the negotiation of new free trade agreements (prioritizing major dairy-importing countries), establishing explicit protections for common food names to combat the misuse of geographical indications, advocating for science-based standards and trade rules in multilateral organizations and more. (see the January letter or Global Dairy eBrief, 1/27/23 for the complete list).
Left to right: Senior Vice President, Trade Policy Shawna Morris; USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor; and Executive Vice President, Policy Development and Strategy Jaime Castaneda, discussed U.S. dairy trade priorities last week in Washington, D.C.
Then Harden and Morris were part of a group of ag CEOs who met with Taylor in the afternoon to outline areas of common interest, such as improved market access. The meeting helped provide the new Under Secretary with a strong grounding on cross-agricultural priorities.
Under Secretary Taylor is slated to speak at the spring USDEC Membership Meeting in Washington, D.C. The meeting runs March 27-29 at the Willard Intercontinental Hotel. Download the preliminary agenda to see the full slate of invited and confirmed speakers. Register for the meeting by clicking here.
A group of ag CEOs discussed intersecting trade priorities with Under Secretary Taylor. Back table, left to right, Ted McKinney, CEO of the National Association of State Departments of Agriculture; USDEC President and CEO Harden; Under Secretary Taylor; and Daniel Whitley, administrator, USDA’s Foreign Agricultural Service. USDEC’s Shawna Morris is third from right.
CCFN defends common names at APEC
The Consortium for Common Food Names (CCFN), founded by USDEC, advanced its decade-long fight to preserve the right for companies to use common food names at this week’s Asia-Pacific Economic Cooperation (APEC) meetings in Palm Springs, California. Government officials from 21 APEC member economies gathered for the meetings, which covered a range of topics focused on “enabling a more interconnected, innovative and inclusive future for all.”
CCFN not only spoke at a session dedicated to the topic of common names but also organized common name allies to join the meeting, including Sartori, a Chilean dairy sector representative and the Wine Institute. Jaime Castaneda, USDEC executive vice president, policy development and strategy, led off the common names session highlighting how the policies to restrict their use impact trade.
Sign up now for March 1 Capitol Hill event on common names
CCFN will continue its campaign to defend companies’ rights to use common names when it partners with Sen. Tammy Baldwin (D-WI) and Agri-Pulse to host a Common Names Hill Event on Wednesday, March 1, from 4:00-5:00 p.m. ET at the U.S. Capitol. The event will highlight the need to bolster the U.S. government’s strategy of countering the EU’s aggressive campaign to monopolize common food and beverage names.
Speakers joining Sen. Baldwin include Rep. Adrian Smith (R-NE) and Rep. Jim Costa (D-CA). The event is in-person but will also be live-streamed. USDEC members interested in attending in person should RSVP here. Members interested in joining the proceedings virtually can register here.
Membership renewal due March 15
All USDEC members should have received membership renewal notices in January. If you have not received the invoice or have any questions, please contact Weston Abels at wabels@usdec.org. Membership renewal fees are due by March 15. Thank you, and we appreciate your support!
Events
Staff outlines activities, talks dairy export expectations at DMI annual meeting
With a theme of “Innovation and Exports,” this week’s Dairy Management Inc./National Dairy Board/United Dairy Industry Association Board Meeting required the presence of several USDEC staff members at the Raleigh Marriott Crabtree Valley in Raleigh, North Carolina, where the meeting took place.
USDEC COO Martha Scott Poindexter led the Export Committee presentation, where Angélique Hollister, senior vice president, Global Cheese Marketing; Vikki Nicholson-West, senior vice president, Global Ingredients Marketing, and Shawna Morris, senior vice president, Trade Policy, provided updates on activities in their respective departments.
At a second session titled, “Exports: Meet Your U.S. Dairy Export Experts,” USDEC President and CEO Krysta Harden; USDEC chair Larry Hancock; Poindexter; Steve Seppi, executive director, Dairy Farmers of Washington; and USDEC Vice President, Economics Will Loux highlighted USDEC’s mission and goals as well as last year’s record performance and what to expect in the year ahead.
The session also included an interactive dairy export trivia contest—“Who Wants to Be an Export Expert?”—to engage and inform board members. Poindexter posed questions to the audience. After each table of attendees raised a card with an answer, a USDEC staff member would provide the correct response and explain the facts behind it, bolstering the room’s U.S. dairy export knowledge.
DMI board members get into the spirit of the U.S. dairy export trivia contest at this week’s Dairy Management Inc./National Dairy Board/United Dairy Industry Association Board Meeting.
Membership Meeting: the importance of strengthening global connections
Interruptions in U.S. dairy export flows can significantly impact the success of your export business. Operating in an era of geopolitical and supply chain instability has highlighted the need for stronger cooperation with our international allies in order to avoid costly interruptions.
Come to USDEC’s spring Membership Meeting to gain insights from a prestigious panel of international leaders on how global partnerships and the pursuit of collaboration can contribute to a more secure global trade environment.
USDEC's Jaime Castaneda will lead a discussion highlighting the importance of strengthening global connections with Michelangelo Margherita, Head of Trade Section of the European Commission and Lloyd Day, Deputy Director General of the Inter-American Institute for Cooperation on Agriculture.
The meeting runs March 27-29 at the Willard Intercontinental Hotel in Washington, D.C. Download the preliminary agenda to see the full slate of invited and confirmed speakers. Register for the meeting by clicking here.
This 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).
Harden speaks at AMPI meeting
USDEC President and CEO Krysta Harden offered a balanced analysis of global dairy markets and U.S. export potential to members of Associated Milk Producers Inc. (AMPI) at the co-op’s Annual Meeting this week in Bloomington, Minnesota. While the U.S. is coming off a record year for volume and value in 2022, it is also facing a few more headwinds in 2023, she said, including economic uncertainty, depressed farmer margins and stronger competition from the EU and New Zealand. But U.S. dairy consistency, quality and sustainability are increasingly recognized and preferred globally. And for the long term, the United States has the land, the infrastructure and the efficient, sustainable production practices, making U.S. suppliers better positioned than major competitors to meet rising global dairy demand.
USDEC President and CEO Krysta Harden and Associated Milk Producers Inc. President and CEO Sheryl Meshke at this week’s AMPI Annual Meeting in Bloomington, Minnesota.
Market Summary
GDT decline undercuts hopes for price recovery
The Global Dairy Trade (GDT) Price Index fell 1.5% at the Feb. 21 auction. It was a disappointing result after the 3.2% gain on Feb. 7 and generally positive futures market price movements in the lead-up to the event. The results dashed hopes that the market had found a bottom and might be rebounding.
The WMP price fell 2.0% to US$3,264/MT, while SMP declined 2.4% to US$2,769/MT. Prices fell for all contract periods for both products. North Asia (China) participated and led purchasing but showed no interest in bidding prices up.
Ongoing global economic uncertainty and fewer supply concerns still appear to be driving decision-making.
The GDT Price Index decline would have been greater were it not for a 3.8% increase in the average winning butter price (to $4,922/MT) and a 1.5% increase in cheddar (to US$5,086/MT). It was the third consecutive healthy gain for cheddar, driving the price above US$5,000/MT for the first time since last September. Middle Eastern buyers continue to drive the cheddar price.
NZ milk output finally rises
Year-over-year (YOY) milk production in New Zealand rose 1.2% in January. It was the first increase in 18 months—since July 2021. February production is also expected to rise despite the extreme rainfall seen on parts of the North Island over the last month.
Many North Island farms are still dealing with power outages, significantly damaged infrastructure and destroyed crops, and some dairy farmers in the affected regions have expressed concerns about winter feed supplies. Authorities continue to assess the damage, but estimates of the impact of the storms on current-season milk production are mixed, with some expecting the rains to lay the groundwork for strong pasture growth in the weeks ahead and others expecting the weather to induce an early dry-off. (1News, 2/20/23; Radio New Zealand, 2/19/23)
Next ALIC butter tender Feb. 28
Japan’s Agriculture and Livestock Industries Corp. (ALIC) announced plans for a new SBS butter tender for 300 MT for Feb. 28. Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) will announce tender plans for the remainder of the fiscal year (through March 31, 2023) after it reviews the supply situation. For more information, contact USDEC’s Japan office at usdecjapan@marketmakers.co.jp or (011) 81-3-3221-6410.
Company News
Saputo to expand cream cheese production in Australia
Saputo is spending A$20 million (about US$14 million) to add cream cheese manufacturing to its Smithton, Tasmania, manufacturing plant. The new capacity replaces cream cheese operations at Saputo’s Maffra, Victoria, plant, which the company shuttered last week. (It announced the planned closure last November.) Saputo CEO Lino Saputo Jr. said that he expected more plant closures in Australia due to the country’s shrinking milk supply, “but there will be heavy investments as well in other facilities to focus on higher valued categories of dairy products that we can sell domestically and around the world.” (Just Food, 2/17/23; ABC News, 2/15/23)
Mergers, acquisitions and joint ventures
Saudi Arabian dairy processor Almarai completed the acquisition of International Dairy and Juice Ltd. (IDJ) from its former joint-venture partner PepsiCo. The company paid an estimated 255 million riyals (about US$68 million) for PepsiCo’s 48% share in IDJ. Almarai said that full ownership would facilitate expansion efforts. … Malaysian distributor Farm Fresh paid RM84 million (about US$19 million) for a 65% stake in ice cream chain The Inside Scoop. The company plans to pursue brand collaboration between The Inside Scoop and its Jom Cha boba tea and soft-serve chain. … German regulators will only permit German dairy processor Theo Müller’s purchase of FrieslandCampina’s German dairy business (see Global Dairy eBrief, 6/17/22) if it divests two of the Dutch dairy giant’s brands. Müller said it is already in talks to sell the Tuffi and Landliebe businesses. (USDEC Southeast Asia office; The National News, 2/19/23; New Straits Times, 2/16/23)
Company news briefs
Fonterra Co-operative Group COO Fraser Whineray is resigning at the end of Fonterra’s fiscal year on July 31. … Lactalis is facing criminal charges in France related to a 2017 salmonella outbreak linked to its infant formula that sickened more than 40 children in Europe and impacted Lactalis formula distribution in 80 countries. Prosecutors contend that the company failed to properly carry out a product recall and withdrawal. (Company reports; DairyReporter.com, 2/20/23; Food Safety News, 2/18/23)
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