News coverage
Global media ran with the story, but the threat so far has not triggered a major backlash from consumers or New Zealand’s infant formula customers. Mainstream Chinese press coverage has focused on the impact to the New Zealand dollar, which plunged to a five-week low after the announcement. Chinese social media carried reports of the incident, but those reports had received little follow-up commentary at press time.
No governments have refused New Zealand dairy shipments, but China’s General Administration of Quality, Supervision, Inspection and Quarantine (AQSIQ) has reportedly increased border testing of New Zealand dairy products and is asking for New Zealand to certify that certain dairy shipments are free of 1080.
During a Wednesday press conference, New Zealand’s Ministry of Primary Industries (MPI) said it was communicating with a wide range of trading partners including China. It said it was working closely with AQSIQ regarding the details of any certification requirements and that the government would have no problem attesting to the safety of the nation’s dairy products.
MPI was unable to confirm reports of product being held up at the China border due to the threat and asked any supplier having difficulties to contact the agency.
New Zealand’s Infant Formula Exporters Association, which represents smaller exporters, claims its members have seen orders reduced by as much as 70 percent since the revelation of the threat, but those reports are unconfirmed as well. The association also said Chinese authorities were holding at least one NZ$2 million shipment of infant formula on the docks because of the 1080 issue and confusion over certification requirements.
Oversight tightened
Since the threat was made, multiple New Zealand government agencies, dairy farmers and manufacturers, and retailers implemented safety measures: strengthening security in retail stores (limiting access to formula, using staff monitors and security cameras, etc.), enhancing milk product testing, providing extra physical security at manufacturing plants, transport and delivery points, and establishing an audit program to confirm processing facilities maintained the highest level of vigilance.
Authorities tested more than 45,000 samples (at an estimated cost of more than NZ$13 million) dating back to September 2014 (prior to the threat) and found no trace of 1080.
In addition, the country implemented new controls over the distribution of 1080 (already a highly regulated substance) that make it unlawful for anyone to have sodium fluoroacetate without prior approval from the New Zealand Environmental Protection Authority.
New Zealand dairy processors Fonterra, Synlait Milk and Westland Milk Products came out with statements assuring customers of the safety and quality of their products and emphasizing the oversight that goes into production from the farm to the point of sale. MPI has consistently repeated that same message.
The investigation is ongoing. The announcement this week appealed to all New Zealanders to contact police if they had any information, including names of people who had expressed strong negative opinions about 1080. As of Wednesday, police had 42 legitimate tips to follow up, a process they acknowledged would take a long time.
The New Zealand government, as well as China’s AQSIQ, is still advising all infant formula buyers to check packages carefully for signs of tampering.
What is 1080?
Pests like possums, rats and stoats have no natural predators in New Zealand and their numbers would explode without some type of population control. Despite 1080 causing a painful death, it is currently the most efficient means of pest control.
The New Zealand Department of Conservation airdrops 1080 in a planned program of rodent culls. Opponents point to its damage to non-target species, like deer and dogs. Internet campaigns showing suffering animals have heightened feelings. A very small dose would be lethal to an infant.
Sodium fluoroacetate is manufactured at a single plant in Alabama. New Zealand uses about 80 percent of the world’s 1080 supply, but it is also exported to Australia, Israel and Mexico. The poison is banned in the United States except for restricted use in chemical collars used on domestic sheep and goats to kill predator coyotes. (USDEC staff; Company reports; National Business Review, 3/12/15; Otago Daily Times/NZME, 3/11/15; Stuff.co.nz; 3News, 3/11/15; Wall Street Journal, 3/11/15; The Standard (Hong Kong), 3/11/15; New Zealand Herald, 3/11/15, 3/10/15; BusinessDesk, 3/11/15, 3/10/15; Dairy Trader, 3/10/15)
January exports slowed by market conditions, port troubles
January U.S. dairy exports declined 31 percent to $401.5 million compared to the previous year, according to USDA trade data released last weekend. Unfavorable market conditions coupled with the West Coast port slowdown eroded U.S. business. It was the lowest monthly export value since July 2012 (on a daily average basis).
Volume also dropped significantly, as nearly every major product declined compared to the previous January: NDM/SMP slipped 10 percent to 34,948 tons; cheese fell 26 percent to 23,767 tons; total whey products dropped 15 percent to 31,128 tons, lactose decreased 23 percent to 22,633 tons and butterfat volume declined 75 percent to 2,503 tons.
On a total solids basis, January exports equaled about 11.2 percent of monthly milk production, compared to 15.4 percent for 2013-2014.
For a deeper look into the numbers, visit the Research & Data section of usdec.org or click here.
Deadlines fast approaching for Singapore Business Conference
Don’t miss the opportunity to participate in the April 16-17 U.S. Dairy Business Conference in Singapore, a not-to-be-missed, by-invitation-only forum for U.S. suppliers and Southeast Asia’s dairy customers to connect and strengthen business ties. Further information about the program, speakers, lodging and registration details for this event are available for immediate download on the U.S. Dairy Business Conference information page on the USDEC website. The conference registration deadline is Wednesday, April 1.
The deadline to book a discounted room is Monday, March 16. USDEC has reserved a block at the conference venue, the InterContinental Singapore, for invited guests at 25 percent off the published price. The rate is S$335 (about US$268) per night for single occupancy and S$365 (about US$292) for double occupancy, including buffet breakfast and broadband Internet access but excluding taxes and fees. After March 16, reservations will be subject to availability and prevailing rates. Click here to make reservations.
Apart from USDEC members, the conference is invitation only. We kindly request that you visit the U.S. Dairy Business Conference information page and click on the “Invite Local Contacts” link to learn how to have an invitation to attend the event extended to your contacts in Southeast Asia. For further questions, please contact John Klees at jklees@usdec.org or 703-528-3049.
USDEC slates Risk Management Workshops for Dubai, Cairo
USDEC will hold Risk Management Workshops for dairy product buyers and U.S. suppliers in Dubai on May 11 and Cairo on May 14. The daylong, interactive seminars will explore the range and mechanics of risk management tools to help buyers of U.S. dairy products mitigate financial exposure to upward and downward swings in global dairy market prices. Three hours of each workshop are reserved for one-on-one meetings between U.S. suppliers and attendees.
USDEC invited more than 140 companies from GCC countries, Algeria, Egypt, Libya, Morocco and Tunisia. For more information or to register to attend, contact John Klees at jklees@usdec.org or 703-528-3049.
Journal of Food Science releases special supplement on dairy proteins
A March special supplement of IFT’s peer-reviewed Journal of Food Science focuses on the latest nutritional and application research in dairy proteins. USDEC collaborated closely with DMI to help assemble the five articles in the issue, one of which (“Global Markets for Dairy Proteins”) is authored by the U.S. Dairy Export Council’s Véronique Lagrange, Dacia Whitsett-Morrow and Cameron Burris.
The other articles are:
- Dairy Proteins in Nutrition and Food Science: Functional Ingredients in the Current Global Marketplace
- Metabolic Advantages of Higher Protein Diets and Benefits of Dairy Foods on Weight Management, Glycemic Regulation and Bone
- Supplemental Protein in Support of Muscle Mass and Health: Advantage Whey
- Innovative Uses of Milk Protein Concentrates in Product Development.
To access the articles through the Wiley Online Library, click here.
COMPANY NEWS
Australia’s Midfield to enter dairy sector with new powder plant
Australian meat processing company Midfield Group commissioned SPX Corp. to build a new milk powder and AMF manufacturing facility. The plant, Midfield’s first foray into dairy, would produce both SMP and WMP for export. The SPX press release on the deal did not specify a location, but Midfield had been working with the Warrnambool, Victoria, government on a potential site. Construction is slated to commence later this year, with completion expected in mid-2016. (USDEC staff; Company reports)
Company news briefs
Agropur unit Davisco completed a major expansion to its alpha-lactalbumin processing capacity at its Jerome, Idaho, facility . . . Arla Foods will offer a wider range of country-specific SMP and BMP on the GlobalDairyTrade auction platform starting with the March 17 event: BMP from Sweden and SMP from either Sweden or Germany . . . Burger King Worldwide says its African expansion plans are “progressing at a very vigorous rate.” Through a partnership with South Africa-based Grand Parade Investments, it expects to open its first units in seven Sub-Saharan nations by early next year as it sets up supply chains, and to double its South African stores to 60 by mid-2015 . . . Spanish dairy group Calidad Pascual pulled out of its 5-year-old Venezuelan joint-venture yogurt business Pascual Andina. Venezuelan partner Empresas Polar will take over the operation, which has posted losses for the past two years in the midst of the declining Venezuelan economy . . . Belarus is reportedly considering naming a single entity to handle all of the nation’s dairy exports, with ZAO Meat and Dairy as the leading candidate. (Company reports; GlobalDairyTrade; Belarusian Telegraph Agency, 3/9/15; Bloomberg, 3/8/15; Dairy Markets, 3/5/15)
WEBSITE TIPS
Netflix-style display makes finding USDEC research reports easier
Do you use Netflix? Millions do. Among other things, it has revolutionized the visual display of movie information, making the selection of films:
- More visual
- More informative
- More fun
When we redesigned usdec.org, Netflix was the inspiration for how we wanted to display our research reports. Here’s the result:
To move the display forward or backward, click the arrows on the bottom.
Just as Netflix organizes its films by different categories, we organize our research reports. The categories are:
Latest Resources
Clicking on the image of a particular report provides more detailed information about it. If you want the report, just click “Request Report” and follow the instructions.
Our hope is that the new display helps you find and get the research you need faster and easier. This works on mobile devices as well as desktops.
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