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.