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

  • What we do at the U.S. Dairy Export Council

    By Margaret Speich April 15, 2016

    More than just a sound bite: The "what," "how" and "why" over two decades of U.S. dairy exporting history.

    about_us_keyboard.jpgWhen people ask me what the U.S. Dairy Export Council does, it's tempting to answer with a quick one-liner. We can do it in one sentence and you can scroll to the bottom to read it. 
     
    But a sound bite doesn't do our organization justice. We do so many things with so many people, both domestically and abroad, especially with our member companies and our parent organization, Dairy Management, Inc. (DMI).
     

    I was recently asked to explain USDEC to a gathering of new employees at DMI. To prepare, I created a chart-filled presentation.

    It not only shows the "what" of USDEC but the "how" and the "why" over more than 20 years of service from our headquarters in Arlington, Virginia, which on most days is just a six-minute Metro ride under the Potomac River and into Washington, D.C.

    Our funding and our history

    USDEC1-1

    Managed by Dairy Management, Inc., USDEC was founded as a partnership between farmers, processors and USDA’s Foreign Agricultural Service.

    That in itself was historic because it was one of the first times U.S. dairy farmers and processors joined forces in one organization.

    A majority of USDEC's funding comes from DMI and the dairy checkoff. Yet, USDEC maximizes its checkoff funding with additional revenue from the U.S. Department of Agriculture and membership dues. 

    USDEC is a membership organization, made up of dairy processors, cooperatives and trading companies. We also have many other allied companies and organizations—and while they may not be exporters themselves, they realize the benefit for everyone across the industry of having strong and growing export markets.

    Last year, USDEC celebrated its 20th anniversary.

    Making a difference over time

    To compare where we were "then" compared to where we are "now," I cite 2015 data, the latest available for an entire year. As we all know, last year was a tough one for global dairy markets. But even using that year as the point of comparison, progress is apparent. 

    then_and_now_chart.png

     Long-term growth, despite volatility 

    Our growth, both in value and volume, was slow back in 1995, as we dipped our toe in the water and tried to figure out exports. But things started to take off in the early 2000s.

    Today the milk from nearly one in seven milk tankers leaving American farms is shipped beyond our borders through U.S. products and ingredients.

    The current downturn

    Last year's decline ended a streak of five straight years of expansion. Exports were equivalent to 14.0 percent of U.S. milk production on a total milk solids basis, down from 15.4 percent in 2014.

    We discussed causes for the decline in global dairy markets in a webinar. They include overbuying by China, a food ban that Russia put in place in August 2014 that indirectly impacted the United States, as well as significant production gains in New Zealand, the European Union and the United States. 

    If exports drop off even a bit, it can cause problems with our domestic market because too much product backs up here. That means lower prices for everyone across the supply chain, including our primary funders, U.S. dairy farmers.

    Our top products and markets

    Milk powder (NDM/SMP) is the most commonly exported U.S. dairy product. 

    In fact, total exports of NDM/SMP reached a new high of 559,735 tons (1.23 billion pounds) last year. Much of it was used in sports and nutritional drinks, recombined milk and bakery items.

    Our biggest export market is Mexico, with grand potential for future growth. 

    Top_chart100

     Free-trade agreements

    It's important to point out that U.S. suppliers built a commanding position in Mexico through a combination of hard work and the advantages gained via the North American Free Trade Agreement (NAFTA), which phased out all Mexican dairy tariffs on U.S. goods by 2004.

    USDEC works hard in Washington to secure free trade agreements that benefit the U.S. dairy industry. For example, we continue to play an active role in the Trans-Pacific Partnership (TPP) trade agreement. 

    An analysis by the U.S. Dairy Export Council and the National Milk Producers Federation shows FTAs helped bring an additional $8.3 billion to the industry from 2004-2014.

    Let's break that down into easier-to-understand financial terms. Free trade agreements brought an additional $7,560 for the average American dairy farmer over the 10 years studied.

    International offices

     USDEC_international_offices.png

    Because our work is focused on exports and because we have an international focus, USDEC and the U.S. dairy industry has representation around the world in our major export markets, such as Mexico, China, the Middle East and elsewhere. 

    Our representatives provide a tremendous resource for our members. They are our “eyes and ears” in key export markets and often times they do the crucial work in facilitating relationships with U.S. dairy suppliers and global customers overseas.

    Major programs

    From a high-level perspective, we assist U.S. dairy exporters in making their way through a complex and competitive environment. We also help them understand and capitalize on export opportunities, while minimizing risks.

    We do that through five major programs. They are:

    • Trade policy. This program is funded by membership dues. Most of USDEC’s work in this area is directed at securing beneficial free trade agreements.
    • Regulatory affairs. These address regulatory and technical issues. Every market has different import regulations and requirements that cover things such as labeling, product standards and paperwork. 
    • Research and insights.This includes market and product research to identify opportunities for U.S. dairy suppliers by showing them how they can expand their product portfolios in markets around the world.
    • Image marketing. ThinkUSAdairy.org and other efforts establish a brand for U.S. Dairy that differentiates our products and suppliers from our competitors, underscoring the advantages of doing business with our member companies. 
    • Crisis preparedness. We work with our exporters to make sure they have the capabilities in place to respond to any potential issue or crisis that may involve their products. 

    Top_chart51-1

    Strength through our members

    USDEC is a collaborative industry partnership with processors, trading companies and others to increase global demand for U.S. dairy products. 

    You can see our list of members with links to their respective organizations here

    For our 20th birthday last year, we created this video tribute to our members.

    Our tone: avoiding hyperbole

    As USDEC's senior vice president, strategic and industry communications, I know it's not just what you say, but how you say it, that's important.

    Tom Suber, our president, has set our tone for 21 years. He reminds our industry not to get overly excited about the bonanza years or too depressed about the down ones. That's the nature of gravity, and global dairy markets. What goes up also comes down. Nonetheless, we are positive about the long-range future of U.S. dairy exports, as describe in our recent report, 2020 Global Demand Forecast for U.S. Dairy Exports.” 

    "We have been careful not to sensationalize the outlook and have avoided hyperbole in discussing export opportunities," Suber wrote to mark our 20th anniversary. "I could cite a dozen quotes where we talk about volatility, the need for patience, and the hard work that goes into building export markets. That remains the case. But conditions today notwithstanding, the long-term outlook also remains strong."

    In conclusion: that one-liner

    That one-line summary I promised describing what we do? 

    Here it is, from the "About Us" section of our site: "USDEC’s mission is to enhance demand for U.S. dairy products and ingredients by securing access and assisting suppliers to meet market needs that facilitate sales." 

    That sentence is quick, but hardly comprehensive. Now you know the rest of the story.

    Learn more: 

    Subscribe to the U.S. Dairy Exporter Blog   


    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.    

    Trade Policy Market Access Research & Data About USDEC
Subscribe to get email updates

10 Most Recent Posts

Most Popular Posts in Past Year

Index of Posts by Date, Author

Archives (by date)

+ more archives