USDEC boosts its dairy export efforts

As part of an ambitious effort to increase exports, the U.S. Dairy Export Council is adding nine on-the-ground professionals to its team in key foreign markets.

The move is part of the “Next 5%” initiative announced last fall to grow dairy exports from 15 percent of U.S. milk production to 20 percent over the next three to five years.

Hiring has already begun, beginning with two professionals in the Middle East and North Africa, called the “MENA” region.

USDEC sees ample opportunity for U.S. suppliers to capture a greater share of that large and growing market.

MENA’s dairy imports grew significantly from 2007 to 2014, and despite a downturn the last three years, imports averaged a 3 percent annual growth over the last decade.

Import numbers are hard to come by, so USDEC uses export data from major suppliers as a proxy, said Al Levitt, USDEC vice president of communications and market analysis.

Exports to the region in 2017 of skim milk and whole milk powders, cheese, butterfat and whey products from the top 11 suppliers totaled 1.513 million tons, he said.

For comparison, China’s imports of the same products in 2017 were about 1.47 million tons, and Southeast Asia’s imports were 1.54 million tons, he said.

Total global dairy trade is about 9.5 million tons. So the MENA region is about 16 percent of total world dairy trade, he said.

“Our exports to the region have plunged since 2014. But now we’re doubling down, applying more resources to try to get some of that share back,” he said.

Oil is a big part of the MENA economy, so when oil prices began their descent in the summer of 2014, dairy import demand followed, declining for three straight years, USDEC reported in January.

Cuts in oil production until the end of 2018, announced by OPEC in late November, are expected to increase oil prices. The International Monetary Fund has also forecast growth in the GDP for MENA’s oil exporters and importers in 2018, USDEC reported.

The fast-growing market spans nearly 4,000 miles from the coast of Morocco to the eastern side of Oman. Dairy demand in the region is strong, and USDEC expects dairy ingredient and cheese imports will increase by more than 160,000 tons and 85,000 tons, respectively, from 2016 to 2021.

Part of the rationale for doubling down in MENA is that increasing U.S. dairy exports in the years ahead will take more than sales to Mexico, Southeast Asia, China, Japan and Korea, Levitt said.

“Those markets alone won’t get us to our goals. The MENA region is a large dairy importing region, and that should continue to grow,” he said.

USDEC will continue to defend and grow U.S. share in critical dairy export markets, but to reach the Next 5%, MENA must get more attention, USDEC stated in a press release on the new hires.

In addition to the new positions in MENA, USDEC will be adding three in China, two in Southeast Asia, one in Japan and one in Korea.

By: Carol Ryan Dumas

Source: Capital Press

Link: http://www.capitalpress.com/Dairy/20180321/usdec-boosts-its-dairy-export-efforts

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