President Obama signed free trade agreements with South Korea, Colombia and Panama on Oct. 21.

“We’re pleased that the administration recognized the extreme importance of these trade agreements to the U.S. economy,” says Connie Tipton, president and CEO of the International Dairy Foods Association, Washington, D.C. “The pact with South Korea is particularly important because it would reduce tariffs and expand market opportunities in a high-value market and add 10,000 or more additional U.S. jobs throughout the dairy supply chain.”

South Korea is now the U.S. dairy industry’s sixth largest export market, representing $145 million in exports year to date. That figure is nearly double the value of exports during the same time period last year. According to U.S. International Trade Commission estimates, full implementation of the agreement with South Korea would increase U.S. dairy exports by as much as $336 million a year.

The Panama and Colombia agreements are also strong, with each expected to produce gains of an additional $25 million in exports per year.

Supply control programs could derail anticipated trade gains

IDFA warns legislators to steer clear of proposed U.S. dairy policies that could negate the growth opportunities awaiting the dairy industry.

A report from Bain & Co., Boston, titled “Dairy Globalization Refresh: 2011 Update,” reaffirmed that the global demand for dairy products will exceed supply in the near term. The report, which was commissioned by Dairy Management Inc., Rosemont, Ill., and the U.S. Dairy Export Council, Arlington, Va., and issued in August, also said the United States remains uniquely positioned to become a consistent exporter.

“Supply control programs, such as the price stabilization program included in the Dairy Security Act of 2011 recently introduced by Rep. Collin Peterson have the potential to undermine the market access gains of these trade agreements,” Tipton adds. “Such programs would increase domestic prices for dairy products well above international levels, weakening our competitive position in the global marketplace and limiting our industry’s ability to grow and create more jobs.”

Editor’s note: Due to an editing error in the October article “Dairy Producers at Odds Over Proposed Policy Reform,” Dairy Foods created the impression that all dairy processors support the reform program, Foundation for the Future. Many do not, and IDFA opposes the proposal. A corrected version of the article is on www.dairyfoods.com.