In his President’s Breakfast address at this year’s Dairy Forum — held in sunny Palm Desert, Calif. — Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association (IDFA), discussed notable recent industry achievements, as well as opportunities (and challenges) going forward. Among the industry wins he pointed to is a united IDFA/National Milk Producers Federation request to the House and Senate agriculture committees for improved policies in the 2018 farm bill. The changes would improve the Margin Protection Program for dairy farmers, bolster risk protection for processors and build domestic demand for milk through the Supplemental Nutrition Assistance Program.
“Members of Congress have called our collaborative efforts historic, refreshing and, best of all, exceedingly helpful to their farm bill efforts,” Dykes said.
Other triumphs realized in 2017 include a ruling allowing low-fat flavored milk in schools and another enabling ultrafiltered milk to be used in all standardized cheeses, he noted.
“We’ve also made significant progress in protecting common food names for cheeses in global markets,” Dykes stated, pointing to a number of efforts on IDFA’s part, both individually and in conjunction with other industry associations.
He also outlined the top three opportunities for the dairy industry in the years ahead. The first among those centers on consumers and their perception of dairy. He noted that growing consumer sophistication has resulted in “increasingly complex motivations” for beverage consumption — and that beverage categories have expanded from just three in the 1970s (milk and juice, soft drinks, and coffee and alcohol) to 15 today.
“More choice seems to be a clear demand, and our diverse industry is well-positioned to meet it,” Dykes said. “As an industry, we need to do more listening, responding, educating, engaging, satisfying, understanding, persuading and serving consumers because everything hinges on their perception and purchases.”
The messages the industry shares also are worth careful consideration, he said.
“Consumers still care about how products taste or what they cost, but they are demanding more,” Dykes stressed. “They want to know the list of ingredients, and it better be a short one. They want products that are produced responsibly — that means with equal respect for the farm animals, the employees and the environment. They also want to connect with the values and beliefs of the brand they’re purchasing.”
Almost as critical an opportunity is innovation, he added. The industry needs to stay on top of emerging trends and uncover ways to gain a market advantage.
“We are in a new era where a gallon of milk is much more than a beverage,” Dykes said. “It represents a whole series of valuable ingredients and marketable fractions that will continue to emerge and lead to expanded market opportunities. We will need the manufacturing capabilities and global regulatory oversight to ensure consumer safety and confidence in these new product opportunities.”
New product opportunities go hand-in-hand with new market opportunities — the third opportunity on Dykes’ list. Gaining market access is a key goal for the dairy industry, especially in light of this country’s current milk surplus.
“With U.S. farm milk production continuing to outpace domestic consumption, we’ll need exports to grow northward of 20% to take up that production volume,” Dykes said. “And it’s imperative for us to have a level playing field in those markets to take full advantage.”
Beyond our country’s current trade partners, U.S. dairy processors should be looking to developing nations such as those in the Middle East and Africa for growth, he suggested. But a “proactive U.S. trade policy” will be essential to being able to do so, he stressed.