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Global Dairy eBrief
June 16, 2016, Volume 23, Issue 24


USDEC grades 23 nations
on their pizza cheese potential

While the United States may be the largest pizza cheese user in the world, the fastest growing pizza cheese markets are typically found in Asia, the Middle East and Latin America. In fact, South Korea, Japan and the UAE top a list of 23 global markets in terms of U.S. pizza cheese export potential, according to the just released USDEC research report Pizza Cheese: The Global Market. The new study rates each of the 23 nations based on five factors: market access, ease of doing business, imported pizza cheese market size, per capita pizza cheese consumption and projected growth rate, issuing a “U.S. Pizza Business Score” of 1-5.



Click charts to view larger images in your web browser.CurrencyExchangeRate-6.16.16.jpg

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

The research forecasts that the 23 markets as a whole will increase pizza cheese consumption by 100,000 tons (to 355,000 tons in all) from 2015-2020, posting a growth rate of nearly 6 percent annually.

The groundbreaking report features at-a-glance “Passport” infographics for each country (see sample Kuwait page above) that quickly provide a wealth of information in an easy-to-absorb format: pizza cheese volume, percent imported, pizza cheese use by type (mozzarella, cheddar, analog, etc.), top pizza chains, local vs. international chain breakdown, and opportunities, challenges and trends.

To download a copy of the report, go to the Research Reports section at

DR cracks down on Spanish labeling
Starting this week, the Dominican Republic (DR) said it would tighten enforcement of Spanish-language labeling rules for food imports, particularly dairy products. All food imports into the DR must have Spanish language labels.

The crackdown comes after the domestic milk sector complained that a growing number of dairy imports fail to adhere to federal packaging guidelines. The rules are nothing new—the DR has required labeling in Spanish for many years—regulators are only tightening oversight. For more information on those rules, see the USDEC Export Guide, Volume 3: Labeling and Product Standards. (USDEC staff)

USACC calls on Senate to support U.S. ag exports to Cuba
USDEC and more than 100 other ag organizations and corporations co-signed a letter as part of the U.S. Agriculture Coalition for Cuba (USACC) calling for Senate support for legislation to lift financing, trade and travel restrictions to Cuba.

The letter, sent to the heads of the Senate Appropriations Committee and the Subcommittee on Financial Services and General Government, notes that while changes to U.S. regulations have helped certain U.S. industries do business with Cuba, U.S. agriculture is missing out due to the Trade Sanctions and Reform Act of 2000 (TSRA). The TSRA opened Cuba to humanitarian shipments of U.S. ag commodities and food products, but also codified financing restrictions that prevent agricultural commodity exporters from taking advantage of loosened finance rules implemented over the last year and a half.

USACC cites seven bills introduced in the House and Senate since January 2015 to advance financing, travel and trade with Cuba, asking Congress “to weigh-in by moving the legislation” forward and allow private financing for ag exports to the island nation. It also called on the Senate to reject any language during the remainder of the current Congress that would reverse “the critical progress we’ve made toward a more productive relationship with Cuba.”

The week, the U.S. Department of Transportation (DOT) authorized six U.S. airlines to provide scheduled passenger or all-cargo service to Cuban cities other than Havana. (DOT is still deciding on which airlines it will authorize for Havana service.) Most routes are slated to start-up this fall and winter. (USACC; Sandler, Travis & Rosenberg Trade Report, 6/14/16)

ALIC butter tender draws little interest
Japan’s Agriculture and Livestock Industries Corp. (ALIC) June 14 general tender for butter drew little interest. The Netherlands was the only country participating, securing 100 tons of the 2,000 tons up for bid. The leftover 1,900 tons will be rolled over into the upcoming butter tenders.

Correction: Last week’s Global Dairy eBrief listed the June 9 ALIC tender as a butter tender when it was in fact an SMP tender. We apologize for the error.

Remaining tender dates are as follows:

  • June 21, SBS tender for 2,000 tons of butter.
  • June 23, SBS tender for 200 tons of butteroil.
  • June 23, SBS tender for 330 tons of dairy spread.
  • June 28, SBS tender for 2,000 tons of butter.
  • June 30, SBS tender for 500 tons of sweetened condensed milk.
  • July 5, SBS tender for 2,000 tons of whey and modified whey.

USDEC has compiled a document detailing specifications for each product category. To download that document, click here. (USDEC Japan office)

Next week’s free seminar offers insights on common food name defense
On June 21 at the Chicago Marriott O’Hare, the U.S. Patent and Trademark Office (USPTO) and the Consortium for Common Food Names (CCFN) will hold a free one-day seminar aimed at helping U.S. food processors defend their use of common food names. The event will outline the relationship between trademarks and common names, explore the complexities of intellectual property systems, and review the tools available to protect product names and safeguard sales. To view the full agenda, click here. To register, click here. For more information, contact CCFN at



GDT flat as milk production reports suggest growth starting to slow
Processors hoping for a WMP rebound were disappointed by the June 15 GlobalDairyTrade  (GDT) auction. The average winning price for WMP fell 4.5 percent to US$2,118/ton, despite movement in NZX futures markets suggesting a modest WMP improvement was in the cards. The WMP decline negated gains in SMP (+1.5 percent to US$1,901/ton), butter (+5.3 percent to US$2,910/ton), AMF (+4.4 percent to US$3,619/ton) and cheddar (+6.9 percent US$2,882/ton), keeping the GDT Index unchanged at US$2,339/ton.

Forecasts suggest milk supply growth will continue to slow through the year, possibly providing some upward pricing pressure moving forward. IFCN projects that 2016 will be the first year since 2013 in which global milk demand exceeds supply, while the European Commission revised its estimate for EU milk collection for April-December 2016, projecting it will be down 0.4 percent compared to the same period the previous year. (GDT; USDEC staff; International Farm Comparison Network; Farming UK, 6/8/16)

France, Germany, Poland push for funded voluntary milk reduction scheme
France, Germany and Poland have staked out a common position to convince the European Commission to provide funding for farmers who voluntarily reduce milk production. Even though the Commission implemented in March temporary rules allowing producer groups to work together to reduce milk output, the bloc did not tie financial aid to the scheme.

Separately, the Commission officially requested fixed-rate SMP intervention be raised to 350,000 tons. The extension will enter into force the day after the EU publishes the regulation. (USDEC Europe office; Agriland, 6/14/16; Politico, 6/9/16)

Brazil, Argentina raise monthly milk powder limits
Brazil and Argentina agreed to raise the ceiling on milk powder exports heading from Argentina to Brazil to 4,300 tons/month for the period from June 2016-May 2017 and 4,500 tons/month for June 2017-June 2018. The previous quota was 3,600 tons/month. Brazilian milk production is on track to decline 5-6 percent in the first half of 2016 due to high production costs, poor weather and farmers switching to beef. At the same time, the nation’s dairy consumption is rising.

The countries introduced their powder quota agreement in 2009. It is usually renegotiated annually; this is the first time they agreed to a two-year contract. (Dairy Markets, 6/9/16, 6/13/16)

Uruguay milk output continues to dive
Uruguayan milk production appears set to decline for the third straight year. January-April milk collection fell nearly 11 percent and data suggests further weakening in the months ahead.

Reduced supply and challenging global market conditions are also taking a toll on the nation’s dairy exports. Total Uruguayan dairy export volume declined 17 percent in the first quarter, while value fell by 33 percent. (Global Trade Atlas; Dairy Markets, 6/7/16)



Fonterra doubling lactose production at Edgecumbe, plans to cut imports
Fonterra Co-operative Group is spending NZ$8 million on new filtration technology to double lactose output at its Edgecumbe, North Island, processing plant. The investment will enable lactose recovery from the facility’s waste stream. Fonterra uses lactose to standardize milk powder and has earmarked the Edgecumbe product for a new dryer at its Lichfield, North Island, plant, which it expects to open soon. The co-op expects the project to reduce its dependence on imported lactose. (Company reports)

Mergers, acquisitions and joint ventures
agreed to purchase fellow French cheesemaker Graindorge based in Livarot, Normandy. (Culture, 6/13/16)

Company news briefs
Dairy Farmers of America is expanding its Cass City, Mich., milk plant. The facility currently processes cream, condensed whole milk and condensed skim milk and is situated to supply both domestic and global customers, the company said . . . Latvia’s Food Union shipped its first load of dairy products (7 tons of ice cream) to Iraq. The company says it has negotiated deals to soon begin shipping 20 tons of dairy per month to Iraq as part of its plans to expand operations in the Middle East and Asia (see Global Dairy eBrief, 6/9/16) . . . Citing softening economic conditions, Saudi Arabian dairy and food processor Almarai reduced planned capital spending from an average of about $1.1 billion annually to $773 million through 2021 . . . New Zealand’s Westland Milk Products appointed independent director Brent Taylor as interim managing director while it finds a replacement for current chief Rod Quin, who earlier announced he was stepping down from the position. (, 6/16/16; The Baltic Course, 6/14/16; The National, 6/9/15; The Bullvine, 6/6/16)

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