Feedstuffs is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Vilsack optimistic about long-term dairy exports

wissanu01/iStock/Thinkstock. bring imports exports port container ship FDS
U.S. suppliers export $800 million more dairy products and ingredients during first six months of 2019 versus 2018.

Despite a lingering trade war with China, U.S. Dairy Export Council (USDEC) president and chief executive officer Tom Vilsack believes dairy farmers should be optimistic about the long-term growth of U.S. dairy exports, especially in high-demand markets in the Middle East, Asia and Mexico.

"This will require patience. We have to play the strategic long game, but I am convinced now more than ever that we are competing to win, not just for today's dairy farmers but for the next generation," Vilsack said at the World Dairy Expo.

Since USDEC was founded and funded by parent organization Dairy Management Inc., U.S. dairy exports have increased seven-fold to nearly $5.6 billion annually. Last year, the U.S. dairy industry exported the equivalent of nearly 16% of U.S. milk solids.

That 2018 volume percentage set an all-time U.S. dairy export record, despite the drag of retaliatory tariffs in the largest U.S. export market — Mexico — and in the world’s most populous country — China.

For several years, export volume plateaued around 15% of total U.S. milk solid production. Vilsack began an industry-wide initiative in 2017, called “The Next 5%,” that aims to increase export volume to 20% of production.

USDEC reported that value has also increased. “Through the first six months of 2019, U.S. suppliers exported about $800 million more in dairy products and ingredients compared to the same period in 2016. That’s a value increase of more than 30%,” the organization relayed.

Challenges in Mexico, China

The 2018 retaliatory tariffs in Mexico were lifted earlier this year. Vilsack said if Congress passes the U.S.-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement, it will bring more stability. Another positive development: an interim agreement announced last month with Japan, the world’s largest importer of cheese, that will deliver improvements in market access for U.S. dairy.

In China, U.S. dairy exports are roughly half of what they were before the tariffs. Nonetheless, the industry must maintain a strong presence there, Vilsack said, by establishing and cementing relationships to increase demand for U.S. dairy products.

Vilsack met with officials from China’s Ministry of Finance & Commerce Aug. 30 in Beijing, China, to stress that the U.S. has the dairy ingredients, scientific research and know-how to help rebuild China's pig herd, which has been decimated by African swine fever. Eleven days later, China announced that it was waiving its retaliatory tariff on U.S. permeate for feed.

USDEC is playing a role accelerating the uptake of permeate to rebuild China’s swine population with two full-day seminars Oct. 29 in Beijing and Oct. 31 in Nanchang, China.

Promising opportunities

Vilsack said one of the most promising markets is Southeast Asia, where U.S. dairy exports increased 12% last year, and USDEC is making a new investment to develop the U.S. Center for Dairy Excellence in Singapore.

According to Vilsack, “The vision is to create an educational center within the hub of Southeast Asian food innovation.”

As reasons for optimism, Vilsack highlighted other long-term investments by USDEC in fast-growing markets where he said there are “outsized” opportunities for growth, including:

  • Broadening partnerships within Mexico to further build demand for U.S. dairy to capitalize on USMCA, once ratified.
  • Launching U.S. cheese in Mexico and China through Costco retail partnerships as well as in Chile through focused retail engagement.
  • Launching the USA Cheese Guild, an internationally branded effort to facilitate education about and preference for U.S. cheeses within culinary, foodservice, communications and retail channels.
  • Halal food training for dairy exporters exploring growth in Islamic nations, such as Indonesia – a top 10 global dairy importer. Vilsack noted that USDEC is on a trade mission in Indonesia this week with the Foreign Agricultural Service of the U.S. Department of Agriculture and a dozen U.S. dairy ingredient exporters. Indonesia is working to expand its dairy supply chain.
  • A pop-up U.S. dairy display to increase visibility and induce product trials across regions.
  • Partnerships with fitness centers and cheese marketers in Japan. USDEC has a partnership with fitness chain Curves, which sells concentrated whey protein from the U.S. to customers at its 2,000 locations. In addition, Chesco, USDEC's cheese marketing partner in Japan, is introducing high-end U.S. cheeses in its own stores as well as other Japanese grocery and department stores.

“At USDEC, we’re about planting the seeds of new ideas and approaches to grow export markets for a brighter future for the U.S. dairy industry,” Vilsack concluded. “We are poised to compete to win and get to ‘The Next 5%’."

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.