The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • Vilsack Outlines Commitment to Meeting Korea's Growing Demand for Cheese

    By Luke Waring November 7, 2017

    Two-day USDEC event in Seoul deepens supplier-buyer relationships that will foster future export growth.

    SEOUL -- The U.S. Dairy Business & Innovation Conference kicked off today with an upbeat video message from USDEC President and CEO Tom Vilsack outlining how U.S. suppliers are committed to meeting South Korea’s growing demand for dairy, especially cheese.

    "Korea is absolutely essential for USDEC's recently announced strategy for growth," Vilsack said (watch video below). "As a result, we are in the process of strengthening our presence in the country to help cement and develop trade between the countries.

    "This includes, but it is not limited to, having greater presence in the market, focusing on customer service and support, and fostering market-specific innovation. USDEC is delivering content around your key conference themes—business and innovation—to bring value to your businesses going forward."

    Overall South Korean cheese imports grew nearly 150 percent over the last decade, reaching 110,000 metric tons in 2016.
     

    USDEC President Tom Vilsack's opening remarks to U.S. Dairy Business & Innovation Conference in South Korea.

    South Korea is integral to USDEC’s initiative to grow U.S. dairy exports from the equivalent of about 15 percent of annual milk solids production to 20 percent—or The Next 5%, as it has been dubbed.

    The nation is the fourth largest U.S. dairy export market in terms of dollar sales, buying $231 million in 2016. Through the first nine months of this year, U.S. dairy export value was running 35 percent higher. South Korea is a particularly prominent buyer of U.S. cheese—our No. 2 world market, with sales up 24 percent in the first three quarters of 2017.

    Through 2021, USDEC projects significant growth potential for U.S. cheese exports to South Korea as well as gains in high-value dairy ingredient sales.

    A greater in-market presence is a cornerstone for that growth and a driver behind the planning of the Nov. 7-8 U.S. Dairy Business & Innovation Conference. The event highlights U.S. dairy resources and expertise, product diversity and the collaborative spirit of U.S. suppliers seeking to advance mutually beneficial long-term partnerships.

    A prerequisite to reaching The Next 5% is next-level customer service and elevated face-to-face interaction that demonstrate commitment to specific foreign markets. With sessions dedicated to examining the latest dietary trends in Korea and how U.S. dairy ingredients and cheese align with and complement those trends, the conference seeks to foster market specific innovation to help drive Korean dairy consumption and mutual growth.

    The two-day conference provides U.S. dairy suppliers a forum to continue to build on their success in South Korea thus far by strengthening existing relationships with buyers and forming new ones.

    Korea conference.jpg

    USDEC will be sharing highlights from the conference via the U.S. Dairy Exporter Blog as well as the USDEC Twitter feed. For now, what follows is a transcript of Tom Vilsack’s video-taped opening remarks.

    TOM VILSACK VIDEO TRANSCRIPT

    Welcome to both our Korean and U.S. participants to this U.S. Dairy Business and Innovation Conference. Let me express my regret for not being able to make it to the meeting because of a prior commitment, but hopefully I will have the opportunity to visit Korea again in the very near future.

    I have had the privilege of two previous visits to Korea in my prior roles. First, as Governor of Iowa on a trade mission, I was so impressed with the size and sophistication of Seoul. Second, during the Obama Administration as Secretary of Agriculture, I visited as the U.S. representative to the Winter Special Olympics. I will not forget that heartwarming opportunity to see all of the athletes with disabilities compete with so much heart.

    When it comes to being passionate, it is with great pride that I sit here representing more than 42,000 dedicated dairy farmers producing the milk used for high-quality dairy products. As USDEC's President and CEO, I'm proud that this U.S. dairy supply can help nourish people around the world, including in South Korea.

    I am delighted that USDEC can gather so many business partners together to continue to build the strong business ties between the U.S. dairy industry and Korean food and dairy companies.

    The United States is blessed with the land and resources to be a net agricultural exporter, and our aim is to continuously supply safe, high-quality products.

    Since it was signed in 2007, and implemented in 2012, the U.S.-South Korea Free Trade Agreement, known as KORUS, has provided tremendous opportunities for suppliers and customers on both sides of the Pacific Ocean. In 2016, Korea was the U.S. dairy industry's fourth largest export market with sales over $230 million. The solid relationship between the United States dairy industry and Korean food industries is something I cherish, and I believe it is my mission to further strengthen this mutually beneficial relationship and friendship.

    I hope to contribute to the Korean food industry's development through steadily delivering and broadening product development with delicious and safe dairy products from the United States. Now this includes proteins from U.S. milk, which helps support healthy life expectancy, as well as a rich variety of cheeses that can be used in both western and Korean-style cuisines.

    USDEC estimates that total South Korean cheese trade will rise by 27 percent from 2015 to 2021, with the strongest growth projected for cheddar for processing and natural cheeses for food service and retail—a 34 percent increase for each.

    Korean demand is heavily tilted toward pizza cheese, cream cheese and cheddar for processing, which are major strengths of the U.S. dairy industry.

    The U.S. dairy industry is strongly committed to South Korea and our two countries have close historic ties that go well beyond trade and commerce. USDEC has been aggressively defending the KORUS Free Trade Agreement's importance since shortly after last year's election. That work has continued this year, including through various submissions to the U.S. government over the last few months as the current administration has examined our trade relationships with those countries with which the U.S. is running an overall trade deficit, and is focused in particular on our trade with South Korea.

    We know the agreement is vital for competitive market access, especially for cheese.

    South Korea is the No. 2 U.S. cheese export market after Mexico. There were 42,500 metric tons in 2016. Ultimately, we are proactively communicating that Korea is a highly valued U.S. dairy customer with continued bright prospects for mutually beneficial growth opportunities. In fact, we would like to see the agreement strengthened by exploring ways in which we can deepen even further the market-opening commitments made in the free trade agreement such as those relating to dairy.

    Korea is absolutely essential for USDEC's recently announced strategy for growth. As a result, we are in the process of strengthening our presence in the country to help cement and develop trade between the countries. This includes, but it is not limited to, having greater presence in the market, focusing on customer service and support, and fostering market-specific innovation. USDEC is delivering content around your key conference themes—business and innovation—to bring value to your businesses going forward.

    Throughout these next couple of days, I hope you experience first-hand our commitment to help improve the range of products offered and build customer loyalty from our U.S. cheese and ingredient suppliers.

    I want to thank you for your attendance, and I look forward to meeting you in person on my next visit to Korea.

    Luke Waring is manager of communications and membership at the U.S. Dairy Export Council.  

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    The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.  

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