Egypt implements new plant registration requirements
Egypt implemented new plant registration requirements that are scheduled to enter into force on February 29, 2016. The new rules require foreign plants exporting retail dairy products to Egypt to register with the Egyptian General Organization for Export and Import Control (GOEIC). Products will be allowed entry into the Egyptian market only if they are produced in factories on the GOEIC list of eligible manufacturers. The decree also gives the Minister of Trade the right to exempt factories from some or all the registration requirements, although it is unclear at this point what is required to obtain this exemption.
The manufacturer’s legal representative, the owner of the trademark or an authorized representative is responsible for carrying out the registration. The requirements to register the manufacturing facility are included in Volume 2 of the USDEC Export Guide. Please contact Matt McKnight at mmcknight@usdec.org or Sandra Benson at sbenson@usdec.org with any questions.
First Dairy Plant Food Safety Workshop of 2016 slated for February 10-11
The Innovation Center for U.S. Dairy will hold the first of five 2016 Dairy Plant Food Safety Workshops on February 10-11 in Collinsville, Ill. More than 1,300 industry professionals have attended the Innovation Center’s popular workshop series over the last four years.
“I cannot think of another seminar that I have attended in which I learned so much,” noted Robert Shumaker III, QA manager at Great Lakes Cheese, in feedback about one of the 2015 Dairy Plant Food Safety meetings.
Each workshop is hosted by one or more U.S. dairy processors and covers both wet and dry products. The May 17-18 session in Denver focuses specifically on dry products, which, since over half of U.S. milk powder, whey and lactose is exported annually, makes it especially relevant to USDEC members.
The workshops, which are designed and run by industry professionals, combine lectures with hands-on, interactive exercises and explore a range of topics, including pathogen control, environmental monitoring, sanitary design, corrective actions and sanitation.
“They provide a unique chance to ask questions in a safe environment and to compare notes with peers who face similar challenges,” says Tim Stubbs, VP, product research, DMI. “When it comes to food safety, the dairy industry continues to take a proactive stance to protect consumers.”
The 2016 Dairy Plant Food Safety Workshop schedule is as follows:
- February 10-11, Collinsville, Ill., hosted by Prairie Farms
- May 17-18, Denver, hosted by Leprino Foods, Hilmar Cheese and Ingredients and California Dairies Inc.
- June 7-8, Plymouth, Wis., hosted by Sargento Foods and Foremost Farms USA
- August 23-24, Hiram, Ohio, hosted by Great Lakes Cheese
- October 25-26, Arden Hills, Minn., hosted by Land O’Lakes and Glanbia Foods
For more information or to register for one of the workshops, click here.
USDEC calls for deepening trade and investment ties with Africa
Noting that it is in the best long-term economic interest of all parties, USDEC and NMPF encouraged the United States to seek more reciprocal trade and investment agreements in Africa. The recommendation came in comments submitted this week to USTR in response to the agency’s call for input on deepening U.S.-Africa trade and investment relationships beyond one-way preferential arrangements like the African Growth and Opportunity Act (AGOA).
“One-sided programs can only go so far in furthering our overall bilateral trade and investment relationships in Africa,” USDEC and NMPF noted.
The comments cited the growth of bilateral trade agreements involving Sub-Saharan countries and other nations around the world, including the EU, and the potential problems they could bring should the United States fail to more aggressively pursue comparable arrangements.
“Our industry is particularly sensitive to the need to pursue similar initiatives in Africa and elsewhere because we have witnessed EU efforts, too often successful, to use its trade negotiations to extract commitments from its partners that they will adopt policies that unfairly benefit EU products at U.S. suppliers’ expense,” the comments stated.
To view the full written comments, click here.
MARKET CONDITIONS
GDT falls again over China worries, milk production outlook
The GlobalDairyTrade (GDT) Index declined 1.4 percent to an average price of US$2,405/ton at the January 19 auction. A steady flow of media reports questioning China’s economic prospects and the flow-on effects to other world economies has many questioning demand strength in the months ahead.
This week, the International Monetary Fund reduced its 2015 economic growth forecast for the third time in less than a year (down to 3.1 percent), and China reported its worst annual growth rate in 25 years: 6.9 percent.
Supply remained characterized by resilient milk production reports from Europe and better-than-expected New Zealand milk collection. Fonterra Co-operative Group had predicted a 6 percent decline in milk output for 2015/16, but through seven months collections were down just over 4 percent and expectations for a severe milk-sapping drought in the nation are receding. In December, Fonterra collections slipped less than 3 percent, and South Island output actually rose 2 percent. With peak production past, sharp declines would be required the remainder of the season to reach its 6 percent estimate.
Elsewhere, though, a few signs may indicate a slowdown is in the offing.
- Australian analysts said heat and dry weather that stoked bushfires in recent weeks (see Global Dairy eBrief, 1/14/16) caused 4-5 percent milk production declines in key producing regions in November and December. Official November data released today indicated a 5.3 percent decline in milk production in the main milk-producing state of Victoria and a 3.4 percent decline overall in Australia in November.
- LTO Nederland reported that milk prices for the 16 leading European co-ops and processors fell again in November and are approaching levels not seen since the crash of 2009.
- And ANZ reported “murmurings out of China of significant raw milk pricing reductions and renegotiations (falls) of farmer supply contracts by domestic processors.”
For now, GDT prices fell nearly across the board. The average winning price for SMP declined 3.2 percent to US$1,835/ton; WMP slipped 0.5 percent to US$2,188/ton; cheddar decreased 3.4 percent to US$2,867/ton; and butter lost 5.9 percent to US$3,162/ton. Only AMF (+2.4 percent to $3,724/ton) and buttermilk powder (+2.7 percent to $1,620/ton) posted gains. (Complete auction results can be viewed here.)
The auction results significantly increase the likelihood that all Kiwi farmers will soon be seeing another reduction in their forecast 2015/16 payouts. The nation’s No. 2 processor Open Country Dairy this week lowered its 2015/16 farmgate milk price estimate by NZ$0.30 to NZ$4.00-$4.30/kgMS (equivalent to about US$7.87-$8.46/cwt.). Other analysts quickly adjusted forecasts into the same range. Fonterra’s current farmgate milk price estimate is NZ$4.60/kgMS. Kiwi farmers are likely to remain under cash flow pressures until at least early 2017, noted ANZ. (USDEC staff; GDT; ANZ; DairyAustralia; New Zealand Herald, 1/20/16; Interest.co.nz, 1/20/16; BusinessDesk, 1/20/16, 1/18/16; Otago Daily Times, 1/20/16; The Weekly Times, 1/20/16; Agrimoney.com, 1/18/16; Dairy Markets, 1/11/16)
Argentina to implement new dairy package
The Argentine government under new president Mauricio Macri criticized the previous administration for its “lack of vision” in developing the domestic dairy industry and announced a new package of dairy support measures. The package includes a guaranteed minimum milk price for farmers, supplemental payments on the first 6,800 lbs. of milk produced each day for every farmer in the first quarter of 2015, and easier access to farm loans.
In addition, Macri committed to efforts to open foreign markets to Argentine dairy exports, particularly markets in the Mercosur zone. Government negotiators reportedly already secured a 900-ton-per-month increase in the monthly milk powder cap on shipments to Brazil. The new monthly cap—in place through the end of the year—is 4,500 tons, instead of 3,600 tons. (Dairy Markets, 1/19/16)
EU dairy farmers heighten push for dairy policy changes as stocks build
EU dairy farm groups are growing more vocal in their calls for industry assistance and new leadership.
The Irish Milk and Cream Suppliers Association (IMCSA) criticized both the Irish government and European Commission leadership for failing to take sufficient action to provide more assistance to farmers and alleviate the current market imbalance. Saying leaders had “an attitude that is just wholly and demonstrably inadequate to the scale of the challenge,” the IMCSA called for action to raise the intervention price and intensify efforts to reopen the Russian market.
The European Milk Board continues to attack EU Ag Commissioner Phil Hogan (the group launched a campaign to oust him in December) and is calling for a Market Responsibility Program (MRP) to address falling farmgate prices and EU overproduction. Under the MRP, farmers would receive bonuses to reduce production when a yet-to-be-developed market index that measures supply and demand drops below a prescribed level.
More SMP moved into intervention in each of the first two weeks of January (6,300 tons and 5,500 ton, respectively) than any week since prices first broached intervention levels in July 2015. SMP, butter and cheese quantities offered into the EU’s Private Storage Aid scheme also rose at the start of the year.
In terms of farmgate prices, “It’s very hard to see any upside in the first half of 2016,” said Bernard Condon, Ornua’s director of dairy trading and ingredients. “In the absence of a rapid supply correction, the coming months will be difficult.” (Irish Independent, 1/20/16; Agriland, 1/19/16, 1/12/16; DairyReporter.com, 1/19/16)
Data updates on USDEC.org
Have you checked out the interactive charts of market and trade data on the USDEC website? Key metrics like milk production, exports and imports and prices are updated regularly. This week we learned:
- In the first 11 months of the year, Algeria imported 209,717 tons of WMP, up 9 percent from the prior year. However, SMP imports (130,599 tons) were down 16 percent.
- In October, Mexico imports of milk powder, cheese, butterfat and whey were up 42 percent from the year before.
- Milk production from the top 5 suppliers was up approximately 2.3 percent in November.
- Indicative price and currency graphs are updated each week as well.
To browse the full Market Data section of usdec.org, click here.
MARKET ACCESS
Iran gets clearance to ship to Russia
Russian regulatory authorities reportedly cleared Iran to begin exporting dairy products this week. In 2014, Iran exported $600 million in dairy products, primarily yogurt and cheese, the vast majority to its neighbor Iraq. Through three quarters of 2015, shipments were down 7 percent by value and 4 percent by volume. (Global Trade Information Services; Pravda.ru, 7/1/16)
COMPANY NEWS
Morinaga opens Singapore subsidiary
Japan’s Morinaga Milk industry opened a new subsidiary in Singapore called Morinaga Nutritional Foods to capitalize on rising demand for high-specification dairy ingredients in Southeast Asia, particularly for use in infant nutrition products. “Singapore is now becoming a focal point for major global infant formula manufacturers and raw material suppliers,” Morinaga said. To see the company’s press release on the new venture, click here. (Company reports)
Mergers, acquisitions and joint ventures
Switzerland’s Emmi purchased the remaining 24 percent stake in German organic dairy processor Gläserne Molkerei, giving it 100 percent ownership in the company . . . Arla Foods merged its two UK cooperatives—Arla Milk Link and Arla Milk Cooperative—into a single cooperative body: Arla UK Farmers. (Company reports; The Scottish Farmer, 1/15/16
Company news briefs
Fonterra officially opened its Beijing Applications Center, its fourth such facility in the country (see Global Dairy eBrief, 11/5/15) . . . Australia’s Lion Dairy and Drinks is consolidating its distribution network, outsourcing warehousing and investing A$40 million to increase fluid milk capacity at its Perth facility in Western Australia, a plan meant to underpin domestic expansion plans . . . Krispy Kreme Doughnuts signed a franchise agreement with Panama’s Barcenas Group International to open 16 stores in Panama by the end of 2020. The deal is part of a focused push by Krispy Kreme into Latin America . . . The official name for the new business created by the integrated Müller Wiseman Dairies and Dairy Crest dairy operations is Müller Milk & Ingredients . . . Cargill opened a $2 million Technology Applications Center in Izmir, Turkey, to assist dairy and poultry customers in Turkey, the Middle East and Africa leverage feed technologies to grow their businesses. (USDEC China office; Company reports; Queensland Country Life, 1/20/16; DairyReporter.com, 1/18/16; Winston-Salem Journal, 12/22/15)
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