IDFA urges caution on USDA’s proposed import assessment rule
The International Dairy Foods Association applauded the U.S. Department of Agriculture’s efforts to recognize trade concerns when the department released a proposed rule for the Dairy Import Assessment. Meanwhile, IDFA cautioned that the proposal could significantly change the current program that promotes only U.S. dairy products.
Under the new rule, the definition of milk would change from milk produced in the United States to all milk, regardless of its source. As such, the Dairy Board would no longer be able to limit its promotion efforts to domestic milk. Some examples of the changes that would be required under the new rule include the expansion of the Real Seal promotion to allow its use on all dairy products, including those that are imported, and supplier contact information would no longer be constrained to U.S. manufacturers, as is done today on Web sites that are funded through the checkoff program.
The rule also would expand the Dairy Board to include two importer members. Importers would be allowed to use one-third of the required import assessments for qualified national and regional programs that promote imported dairy products.
Read the proposed rule at www.regulations.gov/fdmspublic/component/main?main=DocumentDetail.
WDPA, WMMB team up for contest rebate program
The Wisconsin Dairy Products Association, sponsor of the annual World Dairy Expo Championship Dairy Product Contest, has finalized an agreement with Wisconsin Milk Marketing Board regarding contest entries.
WMMB is sponsoring a contest reimbursement program for all Wisconsin dairy processors. Wisconsin-based companies that enter a new cow’s milk dairy product in the 2009 World Dairy Expo Championship Dairy Product Contest will receive from WMMB a 50% reimbursement on the $50 contest entry fee. A “new dairy product” is one that your company has not entered in a previous World Dairy Expo Championship Dairy Product Contest.
If your company is considering entering any type of dairy product in this year’s contest, WMMB is offering this incentive to boost Wisconsin participation. All dairy products eligible for the contest will be offered this reimbursement. Any product entered in this year’s contest, which previously had been entered in past World Dairy Expo Championship Dairy Product Contests, will not be eligible for reimbursement.
To obtain the rebate, enter the contest as usual and save a copy of the entry forms that are eligible for reimbursement. By Friday, Sept. 4, mail or fax copies of the entry forms to WMMB with a request for the 50% reimbursement. WMMB will work with WDPA to confirm that these are new entries from your company, and WMMB will issue payment.
Mail copies of entry forms can be mailed to Amanda Ritchie, Wisconsin Milk Marketing Board, 8418 Excelsior Drive, Madison, Wis., 53717, or faxed to 608/836-5822.
The World Dairy Expo Championship Dairy Product Contest is the only judging contest of its kind in North America, since no other contest includes all dairy products. This means that cheese, butter, yogurt, ice cream, cottage cheese, fluid milk, whipping cream, sour cream and whey plants will have a unique opportunity to compete in a prestigious, all-dairy national contest.
Marketers, converters, manufacturers, suppliers and end users of dairy products are eligible to enter this contest. The winning companies will be afforded the unprecedented opportunity to promote and market their products as “the best of the best” in North America.
More information is at www.wdpa.net.
Dairy exporters look to 2010 for market recovery
Entering the second half of 2009, recovery in global dairy demand remains elusive, leaving expectations for soft commodity markets for the balance of the year and into 2010.
“Global economic activity is still almost universally down over recent years,” says Tom Suber, president of the U.S. Dairy Export Council. “Developed countries remain in a recession that has lasted more than a year, still struggling with a credit crisis that has sapped normal commercial activity, increased unemployment and far lower commodity prices such as oil that drove demand in many parts of the world. The net impact is sharply less demand for dairy products in emerging markets such as China, Southeast Asia and Latin America, where we saw much of the growth of the past five years.
“Since January, USDEC programs have been repositioned to assist U.S. suppliers to protect share in key markets and despite tough economic conditions, U.S. suppliers remain committed to international sales. Ultimately, the return of consumer demand will only come with the restoration of economic growth,” Suber says, adding that some signs of recovery are emerging, albeit slowly.
The International Monetary Fund believes the global economy is beginning to pull out of recession, though full recovery is expected to be sluggish.
“Financial conditions have improved more than expected,” IMF reported in its July 8 World Economic Outlook Update. “Economic growth during 2009-10 is now projected to be about one-half percentage point higher than projected in April.”
Global Gross Domestic Product is projected to rise 2.5% in 2010, compared with the April estimate of 1.9% growth. This follows an estimated decline of 1.4% in 2009 (down from the earlier 1.3% estimated decline). IMF forecasts world trade volume of all goods and services to increase 1.0% in 2010, after a projected drop of 12.2% this year.
In its June Dairy Quarterly, global lender Rabobank International cautioned that a build-up of inventories could forestall a speedy price rebound in the dairy sector.
“While there is still hope that fundamentals will begin to turn in favor of sellers late in 2009, pricing through third quarter 2009 looks likely to be heavily influenced by the relative strength of intervention buying in the Northern Hemisphere,” Rabobank says.
Strong milk production growth worldwide in response to record high prices in 2007-08 has left substantial supply overhanging the market. While output has begun to contract in the United States and Europe, Suber notes that exporters are still not seeing sustained demand from their customers.
“Today’s commodity buying appears to be non-strategic, spot filling of the pipeline,” he says. “Going forward, we need to see a return of global demand sufficient to sop up supply, plus a work-down of inventories that have built up over the last nine months.”
Soft markets are reflected in declining U.S. dairy exports in 2009. In the January-May period, the value of U.S. dairy shipments was $855 million, down 52% from last year’s record pace, according to U.S. Department of Agriculture/Foreign Agricultural Service data released July 10.
In the first five months of the year, exports represented 8.1% of U.S. milk production, as measured on a total-solids basis. This figure is down from 10.8% of production in 2008 and the lowest percentage since 2004.
Much of the decline in 2009 volumes can be attributed to a drop-off in overseas sales of non-fat dry milk/skim milk powder, the largest U.S. dairy export commodity by volume and value. Exports in January-May were 195.2 million pounds, down 53%. Some exporters, however, have maintained shipments in lieu of selling to CCC through dairy blends and skim milk powder with slightly lower protein levels.
Cheese exports, which reached record-high volumes last year, were off 30%, at 90.4 million pounds. However, exporters were able to increase penetration in Mexico, the largest overseas market for U.S. cheese, with a 15% gain in the first five months of the year. Overall butterfat shipments were just 18.6 million pounds, down 80%. Again, sales to Mexico were higher (+51%) as exporters focused on one of their core markets.
Exports of dairy ingredients like whey and lactose have held up well in 2009. Shipments of dry whey in the first five months of the year were 186.0 million pounds, up 15% from last year. Exports of higher-value whey protein isolates were up 51%, to 14.7 million pounds, while sales of whey protein concentrates were down 17%, to 105.4 million pounds. Overall, whey protein exports to key markets China and Mexico were higher, while shipments to South America and Oceania slackened. Exports of lactose were 182.0 million pounds, up 1% in the January-May period.
For its part, USDEC continues to support U.S. exporters with programs designed to defend share in core markets.
“We do this because our members remain active and committed, but they need help in the face of slow demand and significant competitive supply,” Suber explains.
From May to August, USDEC will conduct more than two dozen promotions, seminars, workshops and reverse trade missions with buyers and consumers in key markets around the globe.
In addition to the commercial impact of USDEC’s market-development activities, the council’s technical and trade policy programs continue to help exporters minimize risk and clear barriers to trade. For example, last fall, USDEC developed a certificate that assured Chinese buyers that U.S. ingredients were melamine-free, allowing sales to continue uninterrupted. USDEC also is working closely with Chinese regulators as they develop new whey standards, ensuring that requirements are compatible with U.S. commercial specifications.
“We continue to support the efforts of U.S. exporters during these challenging market conditions,” Suber says. “Unlike the attitudes that prevailed before the 2007-2008 ‘boom,’ U.S. suppliers appreciate and need these sales, want to stay involved and know our programs and the benefits that they can bring. USDEC long-term programs are aimed at positioning the U.S. industry to capitalize when market conditions become more favorable.”
Help Students Drink Milk For a Change
New ‘Body By Milk’ program inspires teens with tools to increase milk sales in schools.
The new school year kicks off in September with “Drink Milk For A Change,” a new Body By Milk program designed to inspire teens to make a difference in themselves and the world by drinking milk. The Milk Processor Education Program (MilkPEP), creators of the National Milk Mustache “got milk?” Campaign, encourages processors to make sure schools receive the Drink Milk For A Change kit that includes promotional materials to help market milk in schools.
The new promotion offers teens the opportunity to star in their own milk mustache ad. By visiting bodybymilk.com, teens can select the milk benefit that is most important to them and create an ad that represents their unique personality. The customized milk mustache ads can be shared by teens through an official partnership with Facebook as well as other viral channels such as Twitter and MySpace where teens meet and share ideas.
For every milk mustache created, MilkPEP will donate $1 to a teen-relevant charity. The campaign, featuring celebrities relevant to teens such as Jordin Sparks and Chauncey Billups, will be supported throughout the year with national print advertising, public relations, online media, in-school communications and social media outreach.
“Drink Milk For A Change is a unique program that engages teens and responds to their desire to have a voice and make a difference in the world,” said Julie Buric, vice president of marketing for MilkPEP. “The use of social media will expand this year’s Body By Milk campaign and allows teens to express their individuality. Processors can capture the school milk opportunity by taking advantage of MilkPEP marketing materials and working with school accounts to hold sampling events, feature a wide variety of flavors and utilize cool packaging that teens like.”
MilkPEP has also been actively working with coaches and physical education teachers to educate teens about the benefits of drinking chocolate milk within the two hours following exercise. Specially designed Refuel toolkits are available to schools that encourage teens to replenish their muscles with the nine essential nutrients in low-fat chocolate milk. The Refuel message will reach new heights this school year, giving processors a great opportunity to expand milk consumption beyond the cafeteria.
In addition, MilkPEP has teamed up with the NBA to offer “Recovery Clinics” for high school coaches across the country. The free clinics, hosted by NBA coaches and sports dieticians, provide coaches with expert insights to help teen athletes get the most from the two-hour post-exercise window. The Recovery Clinics offer coaches the latest information about the science behind refueling muscles, dehydration techniques, team building drills and stretching exercises.
Schools across the United States will begin receiving materials for Drink Milk For A Change in September. By offering new and improved flavors, plus appealing packaging, processors can work directly with school foodservice professionals to drive more milk sales during the school year. Processors should follow-up with their school customers to ensure they receive the materials.
Processors may consider offering assistance with Drink Milk For A Change materials such as the installation of posters and banners, as well as sampling events at schools. Additionally, processors can use activity for this promotion as an entry for the 2010 MilkPEP Awards.
More information is available online at www.milkpep.org.
August 1, 2009