• Dairy sustainability highlighted at COP26

• U.S. cheeses win at World Cheese Awards

• Virtual cheese trade mission for South America

• Market Summary: Whey on a roll
• USDEC Dairy Data Hub

• USDEC offers input on supply chain funding

• China milk powder research about to kick off

• EU alters plant registration requirements 

• Farmer mission to MENA

• MENA cheese promotions in full swing

• Company news: FrieslandCampina, Fonterra

 

Highlighting dairy's role in a sustainable food systems future at COP26
USDEC and the broader U.S. dairy and agricultural sectors stepped to the forefront at the 2021 UN Climate Change Conference of the Parties (COP26) in Glasgow to reinforce the U.S. dairy industry’s climate leadership and critical role in advancing a future built on sustainable food systems. That leadership was evident across a series of meetings, events and one-to-one networking occasions that USDEC was on the ground for during the conference. (COP26 took place from Oct. 31-Nov. 12 in Glasgow, Scotland.)

“To feed a growing population, it’s clear we need to do more with less, to scale production and at the same time minimize our impact on natural resources,” said Barb O’Brien, president and CEO of Dairy Management Inc. and the Innovation Center for U.S. Dairy, in remarks during the “Raising ambitions on climate action in the global dairy sector to achieve the Paris Agreement” event organized by the Global Dairy Platform (GDP). DMI and USDEC are members of GDP and USDEC attended the event in-person to represent U.S. dairy at COP26.

USDEC worked closely with GDP in the planning of the event to capitalize on the unique opportunity it offered to highlight U.S. dairy’s existing sustainability efforts and achievements at a key moment when the world is demanding all sectors do more. The U.S. dairy Net Zero Initiative (NZI), which seeks to make sustainable practices and technologies more affordable and accessible to U.S. dairy farms of all sizes and in all geographies, featured prominently. NZI exemplifies the kind of program that many at COP26 wanted to see from the livestock sector, given its focus on research and innovation to help the U.S. dairy industry be an environmental solution to the world.

USDA touts U.S. dairy actions
The U.S. Department of Agriculture officially joined GDP’s Pathways to Dairy Net Zero initiative during COP26 (see the joint USDEC/NMPF press release, “Dairy groups applaud major climate-smart agricultural initiatives touted at COP26”). USDEC met with USDA in October to urge the agency to more publicly tout dairy and livestock’s positive role in sustainability efforts and to use the COP26 platform to promote U.S. dairy programs like the NZI as a positive solution to address climate challenges. USDEC also conducted multiple meetings with USDA and other U.S. government agencies throughout this year to educate the administration on what the U.S. dairy industry is doing in the sustainable space and on our NZI goals.

USDA Secretary Tom Vilsack echoed some of those messages when he spoke at the GDP event: “Sustainably managed livestock systems must play a critical role in global food and nutrition security,” he said. “But to successfully feed a growing world population, it is also clear we need to scale up sustainable production that minimizes environmental impacts.”

Vilsack went on to point out specific achievements U.S. dairy farmers have already made to reduce greenhouse gas emissions and the necessity for continued climate-smart investment, informed by sound science and addressing the needs of farms of all sizes. He specifically referenced the NZI as a significant private-sector investment in climate-smart agriculture, said USDA would continue to support efforts to reduce methane emissions and build a rural infrastructure for renewable energy generation, and congratulated the global dairy community for taking on the climate challenge.

Vilsack also called on governments and non-governmental organizations to join the Agriculture Innovation Mission (AIM) for Climate that officially launched the previous week (see Global Dairy eBrief, 11/5/21).

Greener Cattle Initiative
The Foundation for Food & Agriculture Research and the Innovation Center for U.S. Dairy announced during COP26 the Greener Cattle Initiative, an industry-oriented consortium that will award approximately $5 million over the next five years to fund research that provides cattle producers with solutions for enteric methane emission mitigation. Enteric methane is the single largest source of direct greenhouse gas emissions in the dairy and beef sectors.

The Greener Cattle Initiative is an AIM for Climate sprint partner. At an AIM for Climate dinner during COP26, USDA Secretary Vilsack again highlighted dairy industry sustainability efforts, citing U.S. dairy’s involvement in the Greener Cattle Initiative as an example of how livestock sectors can work together to reduce environmental impacts.

Global organization outreach
USDEC’s Nick Gardner, senior vice president, sustainability and multilateral affairs, who was on the ground in Glasgow on behalf of USDEC and U.S. Dairy as a whole, networked with an extensive list of representatives from international organizations to emphasize the critical role of U.S. dairy and trade in the future of a sustainable livestock sector and sustainable food systems. Gardner spoke with the Gates Foundation, the Consultative Group for International Agricultural Research (CGIAR), the Food and Agriculture Organization of the UN, The World Farmers Organization, the World Business Council for Sustainable Development, the World Wildlife Fund, The Nature Conservancy and many others about the U.S. dairy sector’s proactive, ambitious efforts to reduce dairy’s environmental impact and the critical role of international trade in advancing food security.

“With the world’s lowest greenhouse gas footprint per gallon of milk, U.S. dairy leads the world in sustainability,” said Krysta Harden, president and CEO of USDEC. “Yet we’re also deeply committed to making further progress as we work together with others in the U.S. and around the world to create environmental solutions that make U.S. dairy ever more competitively globally.”

USDEC plans to continue to engage with COP in 2022. Rumor has it that COP27, which will take place in November 2022 in Egypt, may primarily focus on food and agriculture. The potential impacts on global trade in dairy could be significant, and USDEC is preparing now to ensure U.S. dairy remains a critical part of the global food system.

USDEC sponsors award-winning U.S. cheeses at the World Cheese Awards
The United States won 60 medals at this year’s World Cheese Awards (WCA) in Oveido, Spain. USDEC sponsored U.S. entries again this year, backing a total of 207 cheeses from 35 companies.

USDEC members won 18 of the U.S. medals or 30% of the U.S. total. Sartori took home 12, BelGioioso Cheese won five, including a gold for its burrata, and Dairy Farmers of America earned one.

In addition to awards earned by members, Utah cheesemaker Beehive Cheese won six medals, including a gold for its Red Butte Hatch Chile and the only U.S. “Super Gold” for its Queen Bee Porcini. Oregon’s Rogue Creamery, the 2019-2020 winner of the coveted World Cheese Award’s World Champion Cheese, won six medals, including a gold for its Crater Lake Blue.

Participation in contests like the World Cheese Awards not only builds the U.S. reputation as a top-tier supplier of quality cheeses, but also extends a quality halo across the sector, enhancing the global image of U.S. cheesemakers and the U.S. dairy industry as a whole.

Contact USDEC to set up a meeting for a "virtual trade mission" targeting South American cheese buyers
USDEC is holding a Virtual Trade Mission targeting South American cheese buyers on Nov. 22-23. The cheese mission follows a similar U.S. dairy ingredients trade mission targeting South American buyers taking place from Nov. 16-18 (see Global Dairy eBrief, 11/5/21, for more on the ingredients event).

We invite members to participate in the mission to connect with key contacts in the region—including importers, buyers, retailers and foodservice operators—at a time when COVID-19 complications continue to limit in-person activities.

The mission will take the form of a series of one-to-one virtual meetings over the two days from 1:30-4:30 p.m. ET. USDEC will provide interpretation for members who require it and will also schedule the one-to-one meetings to leave members free to focus on preparing for the event.

If you have questions about the Virtual Trade Mission or are interested in participating—and if you have specific customers you would like to meet—please notify Rebecca Vidal at rvidal@usdec.org by close of business today, Nov. 12.

U.S. whey exports continue to roll
U.S. whey exports rose 9% in September, compared to the previous year. It was a below-average increase, compared to recent U.S. whey export strength, but it continued what has been one of the most remarkable U.S. export streaks in recent history.

September marks the 22^nd straight month of year-over-year U.S. whey export growth. U.S. whey shipments haven’t declined vs. prior year since November 2019.

China, fueled by efforts to rebuild its pig herd over the past two years, has been and remains the main reason for the gains.

U.S. whey exports to China increased by nearly 120,000 MT in 2020 and grew another 76,000 MT through the first three quarters of 2021. The big jump in volume in 2020 is due in part to depressed purchase levels in 2019 caused by the U.S.-China trade war, but U.S. whey shipments to China in 2020 were the second-largest ever, and Chinese demand this year is on pace to set a new record.

WPC80+
Spurred by demand for health and wellness products, U.S. WPC80+ exports will set a record in 2021 as well, exceeding 60,000 MT for the first time. Should trends through the first three quarters hold, we also may see WPC80+ export value exceed 40% of total U.S. whey exports, which would be another first.

And while China is also the largest buyer of U.S. WPC80+, demand and export growth are more broadly distributed from a geographic standpoint. U.S. WPC80+ exports to Japan grew 45% (+2,363 MT) through the first three quarters of 2021; the UK rose 44% (+1,269 MT); South Korea increased 58% (+1,096 MT); South America grew 34% (+950 MT); Mexico jumped 131% (+708 MT); Canada grew 11% (+604 MT); and Singapore expanded 47% (+503 MT).

Check out the USDEC Data Hub
USDEC’s new Data Hub section at usdec.org collects dairy production, pricing, export and import numbers and organizes them into a series of meaningful, interactive tables and graphs for members to investigate trends, plan export strategy and seize global opportunities.

Each week in the newsletter, we will feature one of the Data Hub charts. This week, following the release of September trade data last Thursday, we look at the extraordinary growth streak in U.S. whey exports over the last two years. You can find the graph at the Data Hub under the U.S. Exports tab.

We encourage you to visit the Data Hub to experiment with an interactive version of this and other charts, graphs and tables. If you have any questions regarding the information, please contact William Loux at wloux@usdec.org.

 

USDEC presents options to USDA for $500 million in supply chain funding 
Drawing upon input from their joint ports working group established earlier this year, USDEC and NMPF sent a memo this week to USDA offering suggestions on how the agency should use $500 million earmarked to provide relief to farmers and food producers from agricultural market disruptions, including transportation challenges. The money is part of a $3-billion USDA package targeting urgent challenges facing agriculture today (see Global Dairy eBrief, 10/1/21).

The USDEC Supply Chain Working Group provided significant input into the development of this proposal. In addition, USDEC and NMPF worked closely with the Ag Transportation Coalition to provide additional recommendations from the broader agricultural export sector.

The memo, which follows in-person meetings with officials, outlines four priority options for the funds, all of which are intended to complement additional steps USDEC is advocating the administration and Congress take to address the shipping crisis:

• Offset foreign customer maintenance costs. Offset expenses assumed by exporters, such as costs to facilitate deliveries, penalties for late deliveries, or even air freight for export of goods to customers. U.S. exporters often need to pay such costs due to contracts and/or in order to maintain positive customer relations and future orders.
• Offer carriers export incentives. Engage with ocean carriers to determine if there are incentives that could alter decisions to ship empties instead of containers filled with U.S. ag exports. These may be non-monetary options such as preferred berthing privileges.
• Facilitate vessel chartering. Expedite the chartering of vessels to assure American agriculture exporters have a reliable means of shipping their goods.
• Support the purchase of export shipping equipment. Provide funding for expanded domestic capacity of container, chassis and gensets to reduce dependence on ocean-carriers-owned assets.

We will keep you posted as USDA makes decisions on how to utilize the funding.

Trade Talk delves into China milk powder buying and new USDEC research project
USDEC’s Trade Policy team, working closely with USDEC’s Strategic Insights team, is undertaking research to help identify U.S. SMP opportunities in China as well as the major hurdles to growing U.S. SMP volume and value.

In a USDEC Trade Talk released this week, we discuss the project, offer an analysis of China’s oversized position in global dairy trade growth and expectations for SMP demand moving forward.

Robust growth
Chinese SMP purchasing expanded by more than 100,000 MT from September 2020-August 2021, an increase of 31%. Growth has been fueled by a combination of factors: a boom in demand for dairy beverages, demand from domestic infant formula manufacturing operations and inventory building related to food security concerns.

But with inventories at sufficient levels and with domestic raw milk prices coming down a bit from recent record highs (potentially indicating demand moving more into alignment with supply), the massive SMP appetite China displayed over the year to August 2021 will likely moderate as we move into 2022.

Even if we see slower growth in Chinese SMP purchasing next year, USDEC remains bullish on long-term Chinese demand for both SMP and WMP, and the question over the United States’ lackluster share of China’s SMP imports remains unanswered.

Research to commence
As part of the study, if your company is active in the milk powder export market, you’ll be hearing from our research team in the near future. If we missed you and you would like to participate, please contact Tony Rice at trice@usdec.org.

In the meantime, if there are issues you want to ensure are on our radar, please pass along any insights or questions to the USDEC Trade Policy team.

EU alters plant registration requirements for non-shelf-stable composite products 
All manufacturers that are currently contributing or have the potential to contribute dairy ingredients to non-shelf-stable composite products or shelf-stable composite products containing meat exported to the EU must now register with the U.S. Food and Drug Administration (FDA) to be added to the EU-approved plant list. Please note that there is no change to the plant registration requirements for non-composite products using one of the dairy product certificates; the EU will continue to require plants exporting dairy products to the EU to appear on the EU-approved list. (For complete details, see the USDEC Nov. 9 Member Alert.)

USDEC’s Market Access and Trade Policy teams have been working closely with the U.S. government to advocate for a smooth and timely transition to the new plant registration requirements. Last month, USDEC prepared an overview on the issue for the U.S. government, outlining impacts and the urgency of swift implementation.

Ensuring registration
Given the close proximity of the FDA's Dec. 31, 2021, deadline for registering for the EU list before the new EU certificates' January implementation date, we strongly encourage members to register their facilities with FDA no later than Nov. 30, 2021, due to the risk of shipping delays.

To be included on the FDA list of registered plants, manufacturers must file an application using the FDA Unified Registration and Listing System (FURLS) Export Listing Module (ELM). ELM users should contact FDA directly with questions regarding the system.

EU transiting products
Inclusion on the FDA's list of EU-approved establishments is not necessary for dairy products or ingredients used in products merely transiting through an EU port.

For questions, please contact Bryan Jacoby at bjacoby@usdec.org.

Farmer mission highlights potential in Middle East/North Africa (MENA)
USDEC staff and U.S. dairy farmers traveled to Dubai this week to highlight U.S. dairy’s commitment to and focus on serving the Middle East/North Africa (MENA) region as well as U.S. dairy’s world-leading sustainability and environmental-stewardship efforts. USDEC President and CEO Krysta Harden and COO Martha Scott Poindexter led the mission, together with dairy farmer and USDEC Chair Larry Hancock.

Farmer attendees got a taste for USDEC cheese and ingredients programs in the region, how they are helping contribute to U.S. dairy export growth and why we expect export expansion in the years ahead.

Export expansion
Overall, U.S. dairy export volume to MENA (in milk solids equivalent) has risen for five straight years. From 2016-2020, volume more than doubled to 78,494 MT. Through three quarters of 2021, the United States shipped nearly 85,000 MT to the region.

Through the first three quarters of 2021, U.S. cheese sales to MENA were up 44% to 17,409 MT; NFMD/SMP exports jumped 71% to 48,327 MT; butterfat shipments more than tripled to 13,015 MT; and whey volume grew 41% to 4,014 MT. And the future looks promising. (For more, read the U.S. Dairy Export Blog post, “Seven reasons dairy demand will increase in the Middle East and North Africa”).

Trip highlights
The mission showcased activities for both U.S. dairy ingredients and cheese. Farmers visited the USDEC booth at the Gulfood Manufacturing Show to learn about opportunities for dairy protein concentrates and isolates, as well as milk powder and whey.

A retail tour highlighted USDEC’s multi-faceted in-store promotional efforts (see below for more), while a visit to the International Centre for Culinary Arts (ICCA) highlighted the USA Cheese Guild’s ongoing partnership with the institute on the USA Cheese Specialist™ Certification Program. (Read "Dairy partners to educate future chefs" in Hoard's Dairyman.)

The mission met with the latest graduating class from the program. In the UAE, since the start of the education partnership with ICCA, 259 students earned the designation of USA Cheese Specialist and an additional 185 graduates are expected in 2021. (See this tweet on the most recent graduation.)

Attendees also participated in a local social media event: U.S. Dairy Farmers in the Kitchen. Farmers engaged with social media influencers Nicola Maftoum (@eatlikenicole) and Chef Nikita Gandhi Patni (@theveggiefix), preparing and tasting two regionally-popular recipes while sharing insights on dairy farming in the United States. (See this tweet on the experience.)

MENA cheese promotions in full swing
The USDEC farmer trade mission to MENA went at a good time: the retail program continues to thrive with in-store activations running from Nov. 7-26 at seven Lulu stores in the UAE as part of the Discover America festival.

Point-of-sale materials, the “USA Cheese Truck” as well as talking demos in each store will take place during this period. November and December events are focusing on Lulu and Choithrams supermarkets in the UAE, as well as online promotions through the Lulu web store.

Through the first eight months of 2021 alone, the retail program reached 557 stores in the UAE and Kuwait, placing nearly 59,000 “Cheese from the USA” seals on cheeses from the USA.

Cheeses from the USA are in the spotlight at a Lulu supermarket in the UAE this month.

FrieslandCampina builds mobile yogurt plant for Nigeria
Dutch dairy giant FrieslandCampina has built what it is calling a “mobile yogurt plant” for use in Nigeria. Constructed in the Netherlands out of five 40-ft. shipping containers, the plant can produce more than 18 million pouches of drinking yogurt per year. The company says processing capacity can be quickly scaled up and expects to have the facility up and running in the first quarter of 2022.

The project is part of Nigeria’s Dairy Development Program that aims to increase local milk production, improve milk quality and create more market opportunities for Nigerian farmers. FrieslandCampina exports to Nigeria but has also been operating its own Nigerian dairy plant—FrieslandCampina WAMCO—since 1974 and acquired Nigerian dairy processor Nutricima in 2020. (Company reports)

Fonterra partners to develop targeted nutrition products
Fonterra Co-operative Group is collaborating with Massachusetts-based VitaKey, a company that specializes in nutrition delivery technology. Fonterra is looking to design dairy products that incorporate targeted and time-controlled release of specific dairy nutrients, starting with probiotics, in a way that improves freshness and allows the nutrients “to be more active and beneficial in the body,” Fonterra says. Fonterra expects the partnership to “really drive” its “Active Living” business with products that appeal to the growing health and wellness consumer sector. (Company reports)

Company news briefs
Danone-owned Alpro is investing £41 million (about US$56 million) in its dairy alternative manufacturing plant in Kettering, UK. When complete, the plant will be able to produce 300 million liters of plant-based beverages per year. . . After entering the UAE market earlier this year, Philippine carabao ice cream maker Arce Dairy is planning to expand to the rest of the GCC. Arce is working through its distributor in the region, SandBox. . . . Saputo named Lyne Castonguay as president and COO, Dairy Division (USA), effective Nov. 4, and reaffirmed that Leanne Cutts took over as president and COO, Dairy Division (International and Europe), effective Sept. 20. (Company reports; FoodBev.com, 11/4/21; FoodNavigator-Asia.com, 11/3/21)

 

• In interview, Harden offers advice to women who are starting out in agriculture
• At COP26, Vilsack and others discuss climate-smart initiatives for dairy
• Professional chefs in Dubai graduate from USA Cheese Specialist Certification Program
• Seven reasons dairy demand will increase in the Middle East and North Africa
• Four dairy farmers promote U.S. dairy exports in the Middle East