Better Business
by Connie Tipton
Processor Outlook
The business environment
for the dairy industry seems to be a constant challenge, and this year is a
perfect case in point. Record high prices and government regulations that
raise the cost of doing business top the list of challenges. While the farm
sector is happy to get relief after two years of low prices, no one wins if
product sales decline. Conversely, we have our share of opportunities, too,
such as a growing body of research that shows dairy can be an effective
part of weight management.
Potential shifts in market dynamics are just one thing to consider
as we watch the “Top 100” companies become more global in scope, and more competitive
in the food and beverage marketplace. Dairy companies don’t operate in a vacuum;
they compete against multi-national food and beverage companies for share of
the consumer’s attention and stomach. Yet dairy companies are saddled with many
costly regulations their competitors don’t have.
At IDFA, we have a long and successful history of
working with government agencies and Congress to combat costly and
unnecessary prohibitions and mandates, whether it’s unnecessary
labeling, impractical environmental regulations or the many complexities of
milk pricing regulations. But the reality remains: Dairy companies have a
lot more to contend with than many of their competitors.
In addition to marketing, communications, operational and other
services to help dairy companies compete, IDFA works hard to manage legislative
threats and opportunities for dairy foods companies. For example, IDFA has fought
hard this year for legislation that would permanently authorize voluntary forward
contracting for Class II, III and IV milk. Forward contracting is a proven tool
that helps producers and processors manage the ups and downs of the market —
really important with so much price volatility. We’ve also fought against any
reappearance of a dairy compact, an issue that some members of Congress are
trying to resurrect on Capitol Hill. We continue to advocate for modernizing
standards of identity on ice cream, yogurt and cheese. The goal in these and
all dairy policy discussions is to help dairy foods manufacturers operate and
grow in the marketplace — with minimal government intervention.
While dairy processors and producers won’t always agree on federal
dairy policy, I’ve found the two sides have more in common with each other with
each passing year. After all, we all want to see a strong and vibrant dairy
industry, so we can often agree on issues that build opportunities for dairy.
IDFA has had a positive dialogue and experience this year with dairy producer
leaders on key issues facing the industry. I’ve personally traveled across the
country to major producer meetings, and have welcomed the interactions so that
we might better understand others’ points of view. We also have worked diligently
with the National Milk Producers Federation (NMPF) on better policies for milk
in the school feeding programs, even as the Milk Processor Education Program
(MilkPEP) has worked with Dairy Management Inc. (DMI) on spreading the word
to processors and school foodservice directors on practical ideas for improved
milk offerings and availability in schools.
A major opportunity we’ve taken on as an
industry is “Healthy Weight with Dairy,” spreading the word
about research that links dairy with weight loss. Many milk, yogurt and
cheese processors have obtained licenses from IDFA in order to start making
weight-loss claims on their product labels and in branded advertising. We
hope to see significant, sustained growth in dairy from these efforts. But
it’s important to quickly establish dairy ownership of these
weight-loss messages before others, like calcium supplements, are out
there. Much more information on this program can be found at www.idfa.org,
in the “Product Marketing” section.
IDFA, NMPF, DMI and the U.S. Dairy Export Council have
also worked together for more than two years on substantial crisis
communication plans to assist the industry in case of an outbreak of
foot-and-mouth disease or other crisis. We saw the system work last
December with the first case of mad cow disease (BSE) in this country; our
team was on a conference call within minutes of hearing the news, and the
industry was able to share information and respond with one voice on dairy.
This “issues team” doesn’t just
handle crises. The staff works day to day in monitoring the media, and in
responding to baseless charges by anti-dairy activists like People for the
Ethical Treatment of Animals (PETA). This is truly a collaborative
processor-producer effort that is eliminating pitfalls and helping the
dairy industry prosper.
For dairy foods companies, navigating successfully through the
challenges and opportunities of the dairy business environment is a real achievement.
IDFA salutes the Top 100 dairy processors, and wishes the very best for all
dairy processors, small and large, throughout the country. The Top 100 illustrate
the enormous energy, innovation and resources in this dynamic industry.
Connie Tipton is president and chief executive officer
of the International Dairy Foods Association.
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