“We export 16% of everything that we produce,” says USDEC senior vice president of trade policy Jaime Castaneda. “Without that market access, we (in the dairy industry) wouldn’t have the opportunity to grow the way we have been growing.”

At a recent press conference, USDEC and other members of the Farmers For Free Trade coalition offered policy recommendations, including pursuing trade agreements that eliminate tariffs and addressing technical barriers to agricultural trade, and safeguarding generic cheese terms such as Feta and parmesan.

The recommendations captured in the roadmap come after months of planning and discussion. Last summer, town hall meetings were held in five US states – Wisconsin, Pennsylvania, Minnesota, Michigan and Iowa – to gain input from the agricultural community. USDEC jointly hosted the Wisconsin event together with NMPF. Much of what was learned at those meetings was included in the final report released, the coalition says.

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As Adrian O’Neill, the Irish Ambassador to Great Britain and Northern Ireland (pictured) says, “There is the commitment of the Irish government to enhance our relationship across the sea, and to sustain warm and friendly relations with our neighbours. We have shared history, shared cultures and proximate geography.” Ireland is both a top exporter of agricultural products to the UK and a top importer of British products, and as such has spent the last few years planning for Brexit.

Which is good, because sometimes I don’t think the UK has been as proactive as Ireland’s government and companies on this matter. Kind of like making a cake and leaving the kitchen in a right state for someone else to clear up.

That being said, the rest of the world can’t sit there and wait. Ireland’s agri-business has been prepping for every eventuality since 2016. An estimated €1 billion of its dairy exports to the UK are at stake, as part of the total exports of €4.4 billion. The good news for Ireland is most British consumers see Irish food as the most trusted in origin outside of the UK, according to Bord Bia (the Irish food and drink agency).

Bord Bia has run readiness radars, collecting data from British companies and has found their top concerns are: UK economic performance, living with Covid-19 and Brexit. They have also been getting their domestic companies ready for the changes in regulations.

Further, US President-elect Joe Biden, whose Secret Service codename is Celtic, is moving into the White House in January. He has already been put on record as saying the Good Friday deal must stand and that hard borders between Northern Ireland and the Republic are not an option.

I think the brash politics of the last few years will give way to more sensible options, both inside and outside the UK. The calm voices that we are now hearing are acting like a balm on many people’s psyches, including mine. While the future remains unsettled, we will need them to get us through the next few months and years, and across the border from Northern Ireland to the Republic of Ireland.

• Suzanne Christiansen, editor, Dairy Industries International.
  Keep in touch via email: suzanne@bellpublishing.com
  Twitter: @dairyindustries or LinkedIn: Dairy Industries International magazine.

The post Ireland on the up appeared first on Dairy Industries International.

Table courtesy of Hochwald

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This followed ratification by the European Parliament on 12 February. Key aspects of the EVFTA are the tariff elimination and bilateral trade facilitation. The EVFTA will eliminate nearly all tariffs except for a few tariff lines that are subject to tariff rate quotas (TRQs). The EVFTA is expected to enter into force in August 2020.

Vietnam’s agricultural sector is predicted to be among the top beneficiaries of the EVFTA.

For dairy, all tariffs will be abolished in a maximum of five years, with quicker reductions on most cheeses, milk powder and liquid milk, amounting to three years. Around 169 EU GIs for food and drink specialities such as Feta cheese, Rioja wine, Parmigiano Reggiano, Cogna, and 39 Vietnam GIs have been recognised and protected under the EVFTA, with the possibility to add others later.

Specific exceptions are made for prior users in Vietnam of the names Champagne, Asiago, Feta, Fontina, and Gorgonzola to address possible coexistence with prior registered trademarks or uses in Vietnam. As all of 39 Vietnamese GIs are related to agricultural products and food, these products are expected to have great chances of brand development in the EU market.

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Prior to the pandemic, NFDM stocks were already reaching historic highs as a result of sluggish demand. School and restaurant closures due to Covid-19 further depressed demand, leading the government to support diversion of fresh milk to further processing. In March and April, NFDM production was estimated to have increased 15% year-on-year.

By comparison, in JFY 2017, Japan imported 34,000 MT of NFDM before lowering imports to 27,000 MT in JFY 2018 and 14,000 MT in JFY 2019.

Separately, Japan will maintain planned imports of 20,000 MT of butter. Butter production also increased 32% during the same period, but the government estimated that increased home-cooking during the pandemic would keep butter demand high, requiring sustained imports.

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Fortunes have starkly changed, however, with well-above average rainfalls since early 2020 throughout most of the previously drought-affected dairy farming regions. Dairy farmers predominantly supplying milk for manufactured products had the advantage of record high prices and, in general, were able to maintain their herd size enabling milk production to rebound quickly in 2020.

This has boosted pasture production, as well as resulted in reduced fodder and grain prices. As a result, milk production in the first quarter of 2020 was nearly 5% above the same period in 2019. FAS/Canberra forecasts overall milk production in 2020 at 9.2 million metric tons, up from 8.83 million in 2019. Cheese production is expected to have the greatest production increase of any of the major manufactured dairy products. Although the Covid-19 outbreak is not currently having a major impact on milk or dairy product production in Australia, it is expected to influence consumption and exports.

Fluid milk exports have seen consistent year-on-year increases over the last decade, increasing by 226% over the last 10 years. However, this growth is expected to stagnate in 2020, with exports forecast at 255,000 metric tonnes, nearly the same as 2019. This is due to disruption in trade caused by Covid-19. The fluid milk export is via air freight on passenger planes. With the large reduction in passenger flights due to Covid-19 there would be an expectation that export volumes would decline. However the Australian government has announced a support package to supplement the cost of air freight of perishable goods which was primarily targeted to the seafood industry but the dairy industry fluid milk and yoghurt products are also eligible and will support this trade. The majority of the growth of fluid milk exports is due to the growth in demand from China which now accounts for over 40%, with Singapore, Malaysia and Hong Kong the other key markets.

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As we have discovered, the law of unintended consequences strikes regularly with such measures. And it is always a bit alarming to see where one side sees help, the other side does not perceive it as such and instead calls it market distorting. It always just depends on what side of the fence one is on, I suppose.

I found this part from the letter the most poignant: “Farmers and dairy processors in our countries and many others around the globe are already in the fight of their lives. We are all dealing with great enough challenges already in our own markets. If the EU does not commit to avoid distorting global markets by dumping their excess intervention stocks onto the world market just as dairy sectors begin to recover, more farmers and processors outside the EU could be forced to close their doors.”

We have seen the issue of intervention causing imbalances in African markets in the past. Only a couple of years ago, African farmers came to Brussels to protest the EU stocks that were being offloaded into their markets.  “The European Union intervened in 2016-17 and held the equivalent of 16% of the global SMP market in government storage. It subsequently released the product on the world market over the next two years, unfairly undercutting international prices and harming the global dairy industry,” the letter notes.

The EU is such a large player in the dairy processing industry, but as such it means the bloc has to proceed with caution and find ways to make the current situation better for its members, to ensure their survival in these challenging times. I’m not sure the best way of doing this is by stepping on and diminishing the less-developed markets of others. These short-term actions can have long-term consequences.

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A coalition of dairy organisations from Argentina, Brazil, Chile, Costa Rica, Ecuador, Guatemala, Mexico, Paraguay, Uruguay and the United States joined together in urging the EU not to repeat the inventory-building and extended market-price suppression it engaged in just a few short years ago.

Exporting large quantities of government-purchased SMP and butter at below-market rates onto the world market will prolong the deeply challenging environment under which dairy sectors are operating worldwide. The EU intervention programme would artificially distort prices for an extended period and displace commercial competition just as the world begins to recover from the immediate impacts of the Covid-19 pandemic. The groups instead urge the EU to adopt measures that further spur consumption within the EU and encourage its producers to implement appropriate production practices to survive during this difficult time.

A coalition representing dairy industries from around the Americas issued the following joint statement:
“The European Commission must avoid dumping government-purchased SMP and butter on the world market and implementing policies that undermine global dairy markets under the guise of protecting its farmers. The EU’s market-distorting practices are harmful enough during normal operations. If used in the wake of the Covid-19 pandemic, which has dramatically eroded dairy prices, they would be disastrous to the world dairy market by prolonging the current crushing economic conditions. Global buyers of SMP and butter will have little incentive to bid up prices as long as the EU government holds significant quantities in intervention.

“It’s critical that the EU act now to put a long-term plan into place regarding how to handle its government-incentivised stockpiling, given that the EU has a demonstrated history of dumping intervention purchases in a way that disrupts the world dairy market. The EU intervened in 2016-17 and held the equivalent of 16% of the global SMP market in government storage. It subsequently released the product on the world market over the next two years, unfairly undercutting international prices and harming the global dairy industry.

“Farmers and dairy processors in our countries and many others around the globe are already in the fight of their lives, working hard every day to help keep the world well-nourished through this crisis. We are all dealing with great enough challenges already in our own markets. If the EU does not commit to avoid distorting global markets by dumping their excess intervention stocks onto the world market just as dairy sectors begin to recover, more farmers and processors outside the EU could be forced to close their doors. We encourage the EU to implement policies that support greater utilisation of dairy products with the goal to increase consumption, particularly with the consumers impacted most by the Covid-19 outbreak.”

The groups issuing the statement include:

• Argentina, Sociedad Rural Argentina (SRA), Centro de la Industria Lechera Argentina (CIL)
• Brazil, Sindicato da Indústria de Laticínios e, Produtos Derivados no Estado São Paulo (SINDLEITE)
• Central America, Federación, Centroamericana de Productores Lácteos (FECALAC)
• Chile, Federación de Productores de Leche (FEDELECHE)
• Costa Rica, Cámara Nacional de Productores de Leche de Costa Rica (CNPL)
• Ecuador, Centro de la Industria Láctea del Ecuador (CIL) Asociación de Ganaderos (AGSO)
• Guatemala , Cámara de Productores de Leche (CPL)
• Mexico, Asociación Mexicana de Productores de Leche, A.C. (AMLAC), Cámara Nacional de Industriales de la Leche de México (CANILEC), Confederación Nacional de Organizaciones Ganaderas (CNOG)
• Paraguay, Cámara Paraguaya de Industriales Lácteos (CAPAINLAC)
• United States, International Dairy Foods Association (IDFA), National Milk Producers Federation (NMPF), US Dairy Export Council (USDEC)
• Uruguay, Cámara de la Industria Láctea del Uruguay (CILU)

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However, the negative effects of these exports on local production were felt by African farmers. Therefore, fellow dairy farmers from the EMB in Europe, along with non governmental organisations such as Oxfam and Veterinarians Without Borders, organised a protest in Brussels against this dumping and met with a number of policy-makers to call for a responsible EU export strategy.

One of the demands was for the Milk Market Observatory (MMO) to compile and publish information about exports from the EU of these milk powder blends. Without transparency on this front, the European Commission would continue to grope in the dark, resulting in disastrous consequences for local milk production in Africa.

The demand for appropriate data collection has now been addressed by policy-makers: As of 2020, an instrument will be implemented to monitor European Union exports of milk powder that has been re-fattened with vegetable fats/oils. With a dedicated customs code for fat-filled skimmed milk powder, it will now be possible to compile data on the exported volume and countries of destination on a monthly basis. The scope of the MMO will thus be expanded to include important additional data.

For the campaign participants, this new instrument is an important interim achievement on the way to an EU export strategy that does not threaten local markets in Africa in any way, she writes.

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Matthias Oettel, chairman of the management, also said the firm’s consumer products division posted significant growth. “The market share for butter has increased by more than 60%.” Meggle butter was also named as winner in a study by Focus magazine.

Oettel also highlighted the subsidiaries, noting, “Our Eastern European CP locations have become important pillars in the company.” Meggle companies in Slovakia, Bosnia and Herzegovina and Serbia are showing growth.
Functional products once again made an important contribution in the company’s financial year. However, the challenging market situation, for example due to US punitive tariffs, is now making itself felt.

Meggle Japan, the easternmost location, achieved a particularly strong result in 2019. Oettel announced that Meggle will continue to grow in Asia and open a representative office in India next year. Additionally, the company plans to invest more than €40 million at its Wasserburg site.  For the butter department new production lines will go into operation, and a new spray tower is being planned in the functional products area.

The post Meggle heads east with butter appeared first on Dairy Industries International.

“Higher commodity prices are a welcome change for dairy producers,” said Ben Laine, RaboResearch dairy analyst. “However, as those prices work through to consumers, their willingness to pay higher prices at restaurants and grocery stores remains to be seen, with much of the world either recovering from, in the midst of, or on the verge of some degree of recession.

EU milk production is poised to grow in 2020, albeit modestly and from low year-ago levels. There are a number of hurdles to herd expansion, including environmental regulations.

Import demand from China is expected to continue to rise, although it will likely be weaker in the first half due to higher carry-over stocks and strong comparables. The potential for weaker domestic demand in the face of economic woes could further reduce the need for imports.

Combined milk production growth among the Big-7 milk-producing regions is expected to remain at, or slightly below, 1% through Q1 2021.

Cheese and SMP are taking the spotlight from butter in the latest price rally. Butter prices have mostly stabilised after varying degrees of decline around the world. Whey prices are gradually improving, but still face limitations due to the reduced demand for pig feed in China.

As market demand shifts towards protein and away from butterfat, processors will need to re-evaluate the product mix in order to capitalize on this reversal from the recent norms, which could lead to greater price volatility than experienced in the past few years.

Much more can be found in Rabobank’s Dairy Quarterly Q4 2019 report. Click here to download the report

The post Dairy Quarterly Q4 2019: Farmers Welcome Higher Prices – Will Consumers? appeared first on Dairy Industries International.

“Passing USMCA would be boon to America’s dairy farmers,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “USMCA will expand trade opportunities with our most valuable partners and secure immediate benefits for our rural communities, adding an estimated $548 million to dairy-farm revenues in its first six years after implementation.

“Newly announced improvements to USMCA will also ensure that if our trading partners flout their dairy obligations under the trade deal, the US has the tools it needs to vigorously enforce our rights. An already good deal for US dairy farmers is even better now, thanks to these changes.”

The US Dairy Export Council (USDEC) said it would specifically like to thank Ambassador Robert Lighthizer, who “provided enormous leadership” working with members of Congress to address their concerns, as well as the work of Speaker of the House Nancy Pelosi and other members of Congress who worked hard to find solutions that addressed concerns over the agreement.

“Washington has worked hard to make USMCA an even better deal for America’s dairy farmers and exporters; now we are counting on Congress to move expeditiously to pass USMCA and usher in its significant improvements to trade rules,” said Tom Vilsack, president and CEO of the US Dairy Export Council.

“Finalising USMCA will bolster international confidence in the US as a serious negotiating partner and build momentum for other trade agreements in key markets abroad. Without this crucial trade agreement, Made-in-America dairy and agriculture products could be left behind in the new year.”

USMCA makes important changes to Canada’s trade-distorting policies, reforms Canada’s controversial dairy pricing system and provides exclusive access to the Canadian market for US farmers and manufacturers. The trade deal also strengthens relationships with Mexico and establishes new protections for common cheese names, using a combination of approaches to protect the continued use of a number of generic cheese terms, such as parmesan and feta.

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“At the time of the final WTO General Council meeting for 2019, we are calling on world leaders, through their representatives in Geneva, to intensify their efforts to progress discussions on WTO reform and agree a pathway forward to ensure that the global rules-based trade system is not put at risk with the potential discontinuation of the dispute settlement mechanism.

“The dairy industries of Argentina (Centro de la Industria Lechera); Australia (Australian Dairy Industry Council); the European Union (Eucolait and the European Dairy Association); and New Zealand (Dairy Companies Association of New Zealand), which represent the majority of global trade in dairy products, are speaking out in light of their growing concerns over lack of progress maintaining and reinvigorating the global trade rules system.

“The rules-based trade system has delivered benefits to the dairy industry across the globe. As industries closely engaged in international trade supply chains, we have operated in a relatively stable environment underwritten by rules governing border and beyond the border trade measures. Global dairy trade has gone from strength-to-strength under this framework.

“For the dairy producers, processors and traders our organisations represent, the international rules- based trading system is more important today than ever. In uncertain times, knowing that there are rules to be followed and a process for both transparency and enforcement underpins confidence in our industries and the global economy at large.

“It pays to remember that global trade has played a major role in lifting hundreds of millions of people out of poverty and that trade openness is strongly correlated to improvements in real income among the lowest earners in developing countries. Uncertainty has the potential to dampen global economic growth. It also risks our ability to achieve progress in other areas, such as in meeting the Sustainable Development Goals: global prosperity is much harder to achieve when adherence to accepted norms becomes optional.

“The system is not perfect, but the risks to our industries of a world without it are unimaginable. We urgently call on negotiators in Geneva and world leaders to find a pathway forward. There is no time to lose.”

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The lift came from a surge in demand for fresh cream from the Continent, where buyers needed it for Christmas products. Some reports had prices rising as high as £1,700/tonne (€1994/tonne), but this peak only lasted a few days and reports suggest prices have dropped back a bit since then. The magnitude of the price increase could be a sign that the actual volumes being traded on the spot markets were thin.

There was disconnect between the cream and butter prices this month, which is a fairly usual effect of the festive demand for cream. The gap between the two prices made it economically difficult to buy cream for butter making as the butter would not make a return at the current spot prices. Those who can draw on stocks were better able to compete. Skim milk powder prices continued to firm in November, rising steadily through the month, bringing another five-year high.

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Milk fat as well as butter became cheaper during the course of the year, after prices had risen to an all-time high in the past two years. Since autumn 2019, however, prices are picking up again.

The weaker market situation in the first half of 2019 led to slightly lower disbursement payments from German dairies to their milk producers. The average milk price in 2019 will be around 33.5 cents/kilogram net raw milk with a fat content of 4 % and 3.4 % protein.

Due to weather conditions, milk deliveries in Germany this autumn are slightly below the same period of the previous year, though 2018 was already a very dry year. Unlike in the previous year, 2019 individual regions within Germany will be much more affected by the drought, so there may be feed shortages or low feed reserves for the winter months up to 2020.

The production capacity for cheese in Germany was expanded in 2019, with new buildings and conversions increasing the possible production volume, which will seek its sales especially in export.

With excitement and (a certain) skepticism, the MIV expects discussions in Brussels on the free trade agreements with Australia and New Zealand. The MIV points out that the EU Commission should not submit too large bids, as the sales volume for European goods will hardly increase on the other side. This is especially true for the New Zealand market.

The EU has imposed new regulations for the future in many areas of business. The “Fair Competition Directive”, which is due to enter into force from 2021, still has to be transposed into national law in Germany. The EU Commission hopes that the new regulation will increase market transparency. In this case, not only must the dairies submit their selling prices to the Federal Institution in Bonn, but so must the food retailer or dealer for the first time. Brussels wants to gain an overview of the profit margins of the different stages in the processing chain.

Further regulations are expected in the food sector. From April 2020 new regulations on voluntary origin labelling will be applied. The MIV continues to reject a compulsory indication of origin in Germany for milk and dairy products.

But the association is looking forward to the deliberations of the EU Commission on genetic engineering labelling law. According to the judgement of the European Court of Justice there is an increasing number of voices, especially from the scientific spectrum, which strive for intensive discussion and reassessment of the topic.

The reform of the Common Agricultural Policy (CAP) 2020, recently discussed in Brussels and Strasbourg, will have very limited impact on the direct prices of agricultural goods such as milk. The focus of the consultations is the distribution of income support. The funds of the first pillar, however, are not least of great importance to farms in the dairy sector, especially in weak market phases.

While the market tends to move sideways, with rising prices, the various European and global political issues raise a variety of issues. However, the past has shown that dairies and dairy farmers in Germany are able to master even the most difficult situations successfully and to produce tasty and healthy food for consumers in the region, in Germany or globally, it was underlined at the annual MIV meeting.

The German Dairy Industry Association represents about 80 large and medium-sized companies in the German dairy industry. With annual sales of around €26 billion, the dairy industry is the largest sector of the German food industry.

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Since 2014, Müller’s 230 Scottish dairy farmer suppliers have cumulatively increased production by the equivalent of an additional 33litres of milk per annum for every person in Scotland.

Surplus milk is currently being transported by Müller to England where markets can be found for it, resulting in more than 6,000 tanker movements travelling a total of 2.5 million miles.

Measures to be introduced by Müller include a reduction in the overall volume of milk purchased in Scotland. Regrettably this will be achieved by serving a full year’s notice on a number of dairy farm suppliers in the North East of Scotland.

Müller will also introduce a tiered transport charge for dairy farmer suppliers in Scotland from February 2020 with the fastest expanding dairy farmers shouldering a proportionately higher charge than those who have grown production more modestly.

Rob Hutchison, milk supply director for Müller Milk & Ingredients said: “We fully appreciate that these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the North East of Scotland, but the current situation is unviable and we must act.

“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.

“But with fresh milk already in 96% of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.

“Our farm services team will now work closely with affected dairy farmers and we will do everything in our power to help them adjust to the changes which we must now make.”

During the review period, Müller sought views and input from the Müller Milk Group farmer board elected to represent dairy farmers, National Farmers Union Scotland and Scottish Government.

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In 1979, Errico Auricchio left Italy with his wife and young children to craft specialty cheeses with the same artisan methods his family had used for 100 years.

“The idea was to start a cheese company in America, find a good manager and go back to Italy,” Auricchio said.

A manager was never found, so Auricchio stayed in the United States to become the manager, president and CEO of BelGioioso Cheese Inc.

Over four decades, Auricchio has built a cheese company with more than 700 employees making more than 30 varieties of specialty cheeses, for America, and export to 45 countries.

These and other accomplishments have made BelGioioso the 2019 Tom Camerlo Exporter of the Year. The award is presented annually by Dairy Foods magazine and sponsored by the US Dairy Export Council in honor of Camerlo, a former USDEC chairman.

The Dairy Foods Exporter of the Year must be a US dairy supplier that:

• Exemplifies leadership in advancing US dairy exports.
• Demonstrates a commitment to export market development.
• Makes exports an integral part of its overall growth strategy.

In a letter to Auricchio, Dairy Foods magazine said it chose BelGioioso as its 2019 honoree because:

• The company has grown its export activities substantially since the mid-1990s, now exporting to 45 countries.
• BelGioioso’s strategic partnership with Tropical Foods helps it target key markets, including the Middle East/North Africa.
• The company has helped USDEC design its cheese activities to meet the needs of specialty US cheesemakers, encouraging more of them to consider exports.
• BelGioioso has led efforts to preserve the right to use common cheese names around the world with Auricchio serving as chairman of the Consortium for Common Food Names.
• The company has found a way to export fresh mozzarella as its No. 1 product at a time when many foreign buyers insist on longer-shelf-life products.

Exporting with patience 

BelGioioso’s relationship with Miami-based Tropical Foods as its distributor opened up global opportunities, and exports now comprise about 6% of BelGioioso’s sales.

“The goal is definitely to increase that percentage,” said Auricchio. “But it takes a long-term investment. You don’t want to go too fast. The consumer should know your brand, know your quality. You need to establish a relationship with a good distributor. You don’t want to do this overnight.”

In China, cheese has not been part of the traditional diet but Chinese consumers are discovering and falling in love with it. The potential upside is huge.

An ongoing trade war featuring retaliatory tariffs between the US and Chinese governments has made exporting cheese to China far more expensive for US suppliers.

When Costco opened its first China store in August, BelGioioso provolone was on display, selling out in one day, thanks in part to a relationship brokered by USDEC with Costco.

Protecting common cheese names 

In his role as chairman of the Consortium for Common Food Names (CCFN), Auricchio works closely with CCFN executive director and USDEC senior vice president Jaime Castaneda to protect cheese and other food names in the public domain.

For years, the European Union has moved to give geographical indications (GIs) to common cheese names like provolone, parmesan, mozzarella and feta.

Auricchio and the CCFN support the proper use of GIs for specialised foods from particular regions, for example, Mozzarella di Bufala Campana, but oppose any attempts that would force farmers and food producers outside of Europe to rebrand familiar foods with unfamiliar names.

The new agreement brokered by CCFN provides greater support for robust protection in the United States and around the world for the name Mozzarella di Bufala Campana. The agreement protects Mozzarella di Bufala Campana as a product originating from parts of Italy but establishes the free use of the generic term “mozzarella.” The deal is a win-win, says Auricchio, because the agreement provides clarity while reducing expensive court battles, enabling cheesemakers to get on with the business of making cheese.

Read Errico Auricchio’s full story here

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In August, US export performance was in line with recent months, with overall volume about the same as June and July. Still, these volumes lagged last August’s totals across most product categories.

Exports of nonfat dry milk/skim milk powder (NDM/SMP) were 50,993 tons in August, down 18% from a year ago. Sales to Mexico were off 23%, while shipments to the Philippines (-62%) and China (-91%) were also significantly lower.

Since record export volume in March, US cheese exports have continually declined five months in a row, due to strong domestic markets. Shipments in August were 26,595 tons, down 6% from a year ago. Sales to Southeast Asia were nearly a record high (2,811 tons, +127%), but lower exports to Australia (-46%), Japan (-42%) and South Korea (-12%) dragged down the total. In addition, sales to Mexico, though up 3%, were the lowest in 11 months.

Total whey exports were 38,722 tons in August, down 21% from last year. As has been the case all year, nearly all the decline can be attributed to lost sales to China from retaliatory tariffs and African swine fever. Suppliers sold just 5,430 tons of whey to China in August, down 63% and the lowest monthly figure in 19 years. These losses were only partially offset by record whey sales to Southeast Asia (12,129 tons in August, +6%).

Within the whey complex, exports of whey protein isolate (WPI) were up 9% in August, and remain at a record pace for 2019, led by improved sales to the EU, Southeast Asia and South Korea.

Lactose exports dipped in August, falling 9% to 31,550 tons. Sales to China were down 40%, while shipments to New Zealand (-43%) and Japan (-31%) also were lower. Suppliers were successful in diverting some of these lost sales to Southeast Asia, where volume was up 36% for the month.

Exports of whole milk powder (WMP) spiked in August, reaching 6,216 tons, more than double last year, and the second-highest monthly figure in the last nine years. More than a third of the volume went to Algeria (vs. nothing last year), and Colombia and Peru also made larger purchases.

Shipments of fluid milk/cream stayed on a record pace, up 13% in August. Nearly 90% of the volume this year has gone to Taiwan, Mexico and Canada.

Among other products, exports of butterfat and food preps (blends) remained depressed in August, down 55% and 26%, respectively.

On a total milk solids basis, US exports were equivalent to 14.2% of US milk solids production in August. In the first eight months of the year, exports accounted for 14.1% of production.

From usedec.org

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Dairy UK has responded to the temporary tariff schedule that was set before Parliament, saying it does not do enough to recognise the real and imminent danger of a no deal Brexit to the British dairy sector.

Currently, a large majority of the UK’s dairy exports go to the EU market but in the event of a no deal Brexit scenario the EU would impose their WTO tariffs on these products. These tariffs are very high and would make British dairy products unable to compete on the EU market.

In real terms, this would result in 150,000 tonnes of cheese and 33,000 tonnes of butter unable to enter the EU market as it does currently, flooding the UK market and creating the potential for huge farm gate price collapses. Across all products, the industry would see nearly £1.3bn in lost export potential to its most profitable market.

Although the government has committed to placing tariffs on selected in-bound dairy products, these tariffs will not be applied to all dairy foods and are too low to offer British processors a level playing field. As a result dairy businesses will lose their EU markets, while products from the EU will continue to come into the country, subject to little or no tariffs. In addition, countries outside the EU would also have access the UK market, with a potentially much lower standard of product.

Dairy UK said that if a deal is not possible then the government must put reciprocal tariffs in place to protect the industry to give this industry a chance to survive. Without this, the government will have to provide financial support to farmers to protect them from potential price collapses short term, and think about what measures businesses might need to help them in facing an uncertain trading future. With the EU accounting for over 90% of dairy exports in 2018 by volume, the absence of reciprocal tariffs allowing British dairy companies to substitute their products for EU imports will see the British dairy market crash.

Chief executive of Dairy UK Dr Judith Bryans said: “As 31 October gets closer and closer we need this government to make a deal. This is not about the politics of remaining or leaving, it’s about the uncertainty, instability and disaster a no deal Brexit would lay at the doors of an industry which helps feed this country and contributes to its economy.

“We have repeatedly voiced our concerns over a no deal scenario to the government as well as our concerns about this liberal tariff regimen, which does not go anywhere near far enough to ensure the survival of the industry. It’s time for the government to start listening. We need fast and effective action now to protect the dairy industry and in particular British cheese, otherwise we’ll see some of our world class dairy products, businesses, and farmers fail.

“Our preference is a deal. One which allows us to have open frictionless trade with our largest export customer, the EU. If that doesn’t happen the government needs to impose reciprocal tariffs to level the playing field and put in place a package of mitigation measures, before businesses are pushed to the wall,” concluded Bryans.

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Distance is no longer a difficulty for Arla Foods, which has pioneered a new supercooling technology, enabling fresh dairy products to travel long distances on ships, opening up international export opportunities.

Every year, Arla exports more than 1 billion kilos of milk-based products from the company’s 10,300 farmer owners from across Northern Europe to international markets as far afield as Asia, the US and Australia. While some fresh dairy products are frozen and flown, this method doesn’t suit the majority of Arla’s fresh portfolio, triggering its innovation team to investigate this new natural, preservative-free transport solution for fresh dairy products.

“An easy and well known way to distribute foods to distant markets is freezing and flying but this destroys the quality of some of our products. We’re seeing more and more markets requesting chilled, fresh tasting and natural products rather than frozen products that require defrosting or products with preservatives. Our new, innovative cooling tool overcomes this challenge, creating possibilities to expand our product portfolio globally,” said Lars Dalsgaard, senior vice president product and innovation.

“We have found that the relationship between time and advanced cooling is one of the keys to unlocking portfolio limitations in markets outside of Europe. Controlling these variables enables us to put the product into hibernation mode, or ‘to sleep’, and deliver it fresh and in top quality at its arrival,” said Lars.

A supercool new launch in Australia

Arla has been looking to expand its range of Castello cheese in Australia, but many of its short shelf-life products can’t be frozen and wouldn’t make the journey from Denmark where they’re made.

Recently, the first shipment of Castello Decorated Cream Cheeses landed in Australia, having been stored in special containers under supercooled conditions.

“We are thrilled by the quality of the product and excited to launch a unique and premium offering of cream cheeses for Aussie consumers. Supercooling has been instrumental for the launch of Castello Decorated Cream Cheeses, but this is just the beginning.” said brand manager for Castello in Australia, Rucha Sarma.

The new process can unlock significant growth opportunities by bringing a broader portfolio of short shelf-life products to markets.

“This may sound simple, but achieving the extremely precise time versus temperature balance, which supercooling requires, demands unwavering persistence and passionate focus from our innovation team. In close collaboration with supply chain, logistics and local markets, they’re making mission impossible, very possible,” said Lars.

The new tool is currently being tested on a range of different fresh dairy products from milk and yogurt to cheeses.

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