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Global Dairy eBrief
February 11, 2016, Volume 23, Issue 6


December NDM/SMP exports
rise 36 percent; full-year volume
sets new record

U.S. nonfat dry milk/skim milk powder (NDM/SMP) set a record for December export volume—46,199 tons—a 36 percent gain compared to the previous year. The increase capped a record year for U.S. NDM/SMP shipments, as volume (559,735 tons) exceeded last year’s all-time high by 3 percent.

That was the most positive news to come out of the export data USDA released last Friday, February 5. Despite the gain in NDM/SMP for the month, challenging market conditions continued to impact overall sales. Aggregate dairy shipments of major products—milk powders, cheese, lactose, whey protein and butterfat—fell 3 percent in December from year-ago levels.

In terms of value, December U.S. dairy shipments totaled $384 million, down 20 percent from the previous year. For all of 2015, dairy export sales totaled $5.24 billion, down 26 percent from 2014’s record level. Overall export volume was off 8 percent, at 3.645 billion lbs. of milk solids (total-solids basis). Exports represented 14 percent of U.S. milk production in 2015, down from 15.3 percent in 2013-14.

For a full recounting of year-end results, see the U.S. Dairy Exporter Blog post, U.S. Dairy Exports End Five-Year Growth Streak. For a deeper dive into December and 2015 export trends, visit the Research & Data section of or click here. To get monthly trade data reports sent direct to your inbox shortly after they are released, sign up for the U.S. Dairy Exporter Blog here.



Click charts to view larger images in your web browser.


A rising index means that a competitor’s currency is strengthening against the U.S. dollar. A falling index means that a competitor’s currency is weakening against the dollar. When a competitor’s currency is strengthening against the U.S. dollar (weak US$), exporters in that country expect lower returns from export markets; when a competitor’s currency is weakening against the U.S. dollar (strong US$), exporters in that country expect higher returns from exports markets. Source:


Note: Numbers in parentheses are changes from previous period. Source: USDA and commercial contacts

ALIC butter tender only partially filled
Buyers submitted bids for 1,686 tons of butter at Japan’s Agriculture and Livestock Industries Corp. (ALIC)
February 9 general tender for 2,000 tons of butter, leaving 314 tons unused. New Zealand secured 924 tons, followed by the Netherlands (450 tons), Germany (288 tons) and Argentina (24 tons). U.S. butter prices kept U.S. suppliers out of the mix.

The tender was not fully utilized because the domestic butter sector, despite projections for Japanese butter
demand to outstrip supply this year, is largely balanced for the moment. ALIC will add the unused 314 tons to the February 25 SBS butter tender. Upcoming tender dates and volumes are as follows:

  • SMP. February 18. General tender for 2,000 tons.
  • Butter. February 23. SBS tender for 2,500 tons.
  • Butter. February 25. SBS tender for 2,814 tons.
  • Whey and modified whey. March 1. SBS tender for 2,500 tons.

For more information, contact USDEC’s Japan office at or (011) 81-3-3221-6410. (USDEC Japan office)



French government urges dairy support action
The French government submitted proposals to EU ag ministers asking for new “market regulation measures” to assist struggling dairy and pig farmers. The proposals call for increasing intervention prices, creating an export credit facility and providing aid to farmers who reduce output when prices decline below a prescribed level. The propositions are not new—farmers and farm groups have been advocating similar measures nearly since the removal of quotas last spring—but this is the first time an EU government called for such changes.

The EU Commission has so far rejected all such calls. EU Ag Commissioner Phil Hogan has been adamant that he is against raising intervention prices. EU Commission President Jean-Claude Juncker this week vetoed a European Milk Board proposal calling for a program that pays farmers for reducing milk output during times of oversupply (see Global Dairy eBrief, 1/21/16).

Separately, dairy farmers in Ireland asked the nation’s ag ministry to seek an immediate extension for producers to pay 2014/15 superlevy fines (amounting to €71.2 million in Ireland). Irish farmers are looking for a longer payoff period to ease cash flow problems. (Dairy Markets, 2/9/16; Reuters, 2/8/16; Agriland, 2/8/16, 2/4/16)

FrieslandCampina halts program supporting lower production
FrieslandCampina ended a program that paid its members a bonus to cut back milk production (see Global Dairy eBrief, 1/7/15). The co-op said the scheme helped reduce supply by more than 35,000 tons of milk over the past six weeks. Nearly two-thirds of its members participated, receiving combined bonuses of €14.1 million (about US$16 million). FrieslandCampina said it launched the program because it lacked capacity to process the volume of milk coming in. It has since made arrangement to handle the higher-than-expected volumes. (Company reports)

End of Iran sanctions sparks dairy interest
Dairy exporters are positioning to take advantage of the end of Iran trade sanctions. The removal of sanctions “will only improve the outlook for us in Iran,” a “key butter market,” noted Fonterra Co-operative Group. European businesses have been quick to jump on the Iran bandwagon, striking a number of deals with the 80-million-person nation over the past few weeks. France, Denmark and the UK all said they were looking to boost ties with an eye toward increasing dairy trade with Iran.

Analysts expect the lifting of sanctions will facilitate economic growth for the country, already ranked as “upper middle income” by the World Bank. It will not only drive trade, they say, but fuel tourism, itself a driver of dairy consumption. Iran hopes to quadruple the number of tourists to more than 20 million by 2025.

Iran purchased 60,000-90,000 tons of dairy products annually over the last six years, mostly butter. (Company reports; CNN Money, 2/9/16; New York Times, 2/8/16; Reuters, 1/28/16; TheDairySite, 1/28/16; Dairy Markets, 1/21/16)

DairyAustralia lowers milk production forecast
Citing dry weather, elevated feed costs and falling milk prices, DairyAustralia’s February Situation and Outlook report now estimates Australian milk production will decline 1-2 percent for the 2015/16 year. The previous Situation and Outlook from October 2015 forecast a 2 percent gain. (DairyAustralia)

New trading platform gains NZ processor
Cream, a new New Zealand-based dairy trading platform for milk powder, butterfat, whey powder, cheddar and lactose, attracted its first Kiwi dairy supplier. Westland Milk Products joined the service on a six-month trial basis. Australian, Irish and U.S. companies are also participating in trials with the platform, according to Cream. The company says it sees the system as a business-to-business ecommerce portal that complements GlobalDairyTrade. For more information, visit

Study projects 11 percent growth in halal foods
Worldwide spending on halal food and lifestyle products could rise by 11 percent per year through 2019, according to a Thomson Reuters study commissioned by the Government of Dubai. The top countries for halal food consumption are Indonesia ($190 billion), Turkey ($168 billion), Pakistan ($108 billion) and Iran ($97 billion), based on 2013 data. (, 2/9/16)



TTIP talks to outlast Obama administration; next round February 22-26
The Obama Administration conceded for the first time that Transatlantic Trade and Investment Partnership (TTIP) FTA negotiations are unlikely to conclude before the president leaves office next year. Market access, regulatory issues, geographical indications and other issues that could impact dairy are all still under discussion. The 12th round of TTIP negotiations takes place in two weeks, from February 22-26 in Brussels. (European Commission; Inside U.S. Trade, 2/9/16)



Arla reorganizes
Arla Foods is overhauling its entire organizational structure to become “more efficient and globally focused.” The multi-national co-op is streamlining management, eliminating 500 jobs and focusing commercial sales on two geographies: Europe and international. The company hopes the changes will help boost organic annual revenue growth from the 2 percent seen over the past four years to 4 percent by 2020. For more on Arla’s plans, click here to read the company’s new release on the move. (Company news)

Foodservice roundup
Global restaurant expansion continues despite economic uncertainty. The Middle East in particular is seeing strong activity from Western and homegrown chain operators. McDonald’s, for example, plans on adding 500 more outlets in the Middle East and Africa by 2020. Here are some other recent developments.

  • UAE-based Glee Hospitality Solutions plans to open at least five new restaurant concepts over the next two years, with a focus on Bahrain, Kuwait, Oman and Saudi Arabia. It already operates 18 different restaurant concepts (35 outlets total) in the region, ranging from gourmet sandwich shops like Burger Hood to casual pizzerias like Chez Amy’s to bakery and coffee shops like Molten Me.
  • McDonald’s opened a new concept store in Hong Kong that features table service, large salad and dessert bars, and a mood-lighted dining area and began testing a new “create their taste” feature at certain locations in the UAE. The UAE program also features table service and allows customers to customize their orders from a wider range of toppings, buns and sauces. Both are meant to compete with the growing number of high-end burger joints.
  • Romano’s Macaroni Grill debuted in Oman and The Cheesecake Factory debuted in Lebanon last month. Lebanon-based Assaad Food & Beverage is the local Cheesecake Factory franchisee. Assaad also owns franchise rights to Texas Roadhouse, Al Forno and P.F. Chang’s. Dubai-based Salen Bin Lahej Group is the Macaroni Grill franchisee in Egypt, Oman and the UAE.
  • Domino’s Pizza plans to add 150 new outlets in India—its largest market outside the United States—in each of the next 2-3 years. The company opened its 1,000th Indian outlet last week. (USDEC Middle East office; Wall Street Journal India Real Time Report, 2/5/16; Sydney Morning Herald, 1/3/16)

Mergers, acquisitions and joint ventures
Dutch dairy processor FrieslandCampina Domo signed a partnership agreement with New Zealand-based carbohydrate expert GlycoSyn to develop new infant nutrition ingredients . . . Canadian dairy processor Agropur said it was interested in acquiring additional U.S. dairy operations. The company called current U.S. buying opportunities “substantial.” (Company reports; Reuters, 2/10/16)

Company news briefs
Blue Lake Dairy Group, a company formed last year by a group of Australian and Chinese investors, plans to build a milk powder manufacturing plant in Tantanoola, South Australia . . . Fonterra implemented a new market-linked milk pricing system aimed at increasing intake of organic milk. Organic milk powder sells for nearly five times the price of non-organic milk powder on the international market, the co-op said. Fonterra said it hopes to process another 600,000 kg/MS of organic milk this year. (Company reports; The Weekly Times, 2/8/16;, 2/5/16)

From the U.S. Dairy Exporter Blog

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