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Global Dairy eBrief
June 18, 2015, Volume 22, Issue 24


House approves standalone TPA bill
The House of Representatives approved a standalone Trade Promotion Authority (TPA) bill today by a vote of 218-208. The legislation now moves to the Senate, where Democratic support is unclear.

Fourteen Democratic senators backed the original TPA-Trade Adjustment Assistance (TAA) package that was passed by the Senate in May. So far, two of those senators have already signaled opposition to or skepticism about the standalone bill, citing the need for TAA renewal as well as reauthorization of the Export-Import Bank.

The plan for a new standalone TPA bill came after talks this week between the White House and House and Senate leadership. President Obama said he still wants TPA and TAA legislation to come to his desk together, something congressional leaders assured him would happen.

Reports suggest the Senate will take up the TPA bill next week along with a package that includes both TAA and renewal of U.S. trade preference programs. Should those votes succeed, the TAA-trade preferences legislation would go back to the House for a vote. House Minority Leader Nancy Pelosi (D-Calif.), who was instrumental in stopping last week’s TPA-TAA package, said she is opposed to the plan.

USDEC issued a press release commending the House for passing the standalone legislation and resuming TPA progress this week. To view a copy, click here. (USDEC staff; Inside U.S. Trade, 6/18/15, 6/17/15, 6/16/15, 6/15/15)


Click charts to view larger images in your web browser.


A rising index means that an importer’s currency is strengthening against the U.S. dollar. A falling index means that an importer’s currency is weakening against the dollar. When an importer’s currency is strengthening against the U.S. dollar (weak US$), the importer’s purchasing power increases; when an importer’s currency is weakening against the U.S. dollar (strong US$), the importer’s purchasing power decreases. Source:


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

Turkey extends U.S. market access to Oct. 1, 2015
Turkey’s Ministry of Food, Agriculture and Livestock granted a request by USDA-FAS to extend current certification requirements for U.S. dairy shipments to Turkey (see Global Dairy eBrief, 6/11/15). The agency informed USDA-FAS that it would continue to accept the APHIS certificate currently used until Oct. 1, 2015. If no extension or new agreement is reached in the meantime, no products with certificates dated after Sept. 30, 2015 will be allowed to enter Turkey.

USDEC will continue to monitor the situation and provide updates as warranted. If you have any questions, please contact Matt McKnight ( or Mitch Bowling ( at 703-528-3049.

Europe close to extending Russian sanctions; Russia to retain embargo

This week, European ambassadors voted to extend economic sanctions on Russia through January 2016. Next week, EU foreign ministers will vote to ratify the extension, making the decision final. If European foreign ministers follow through, Russia said it would extend its embargo on certain Western products, including dairy. The EU sanctions were set to expire at the end of July. (New York Times, 6/17/15; AP, 6/18/15)

DMI publishes Research Pipeline Quarterly

DMI released the latest Research Pipeline Quarterly, a report that highlights recent high-impact nutrition research and reports that were accepted or published in scientific journals within the last quarter, as well as scientific and regulatory affairs papers. Among the current issue’s cited documents is a research paper on the impact of cheese consumption on blood lipids, a project analyzing the impact of light and age on fluid milk, a study on how cows’ diets might mitigate methane emissions, and a regulatory affairs update on the FDA’s GRAS determination regarding partially hydrogenated oils. To view a copy of the latest Research Pipeline, click here.

China, Australia sign FTA, release full text
Australian Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng signed the Australia-China FTA (ChAFTA) in Canberra on June 17 and subsequently released the full text of the agreement. The deal will be implemented following their domestic review processes. China does not impose quotas on any Australian-origin dairy products, although the nation has instituted a safeguard on WMP imports. Imports in excess of this safeguard trigger level may be charged up to the MFN or base rate. Tariffs on other products are reduced over a period of years as follows: 5 years, whey and modified whey, blue cheese, lactose, infant formula; 10 years, fluid milk, butter, cheese (except blue); 12 years, SMP, WMP (see safeguard note). The full tariff reduction schedule is available in the Trade Agreements section of the USDEC Export Guide. (USDEC staff)

New Zealand dominates ALIC butter tender
For the third time in two weeks (see Global Dairy eBrief, 6/11/15), New Zealand dominated Japan’s Agriculture and Livestock Industries Corp. (ALIC) butter tender. Kiwi suppliers secured 1,482 tons of the 1,800 tons on offer. Belgium, France and the Netherlands divvied up the remaining 318 tons.

Four more tenders are slated as follows:

  •          June 23: SBS tender for 200 tons of butteroil.
  •          June 23: SBS tender for 330 tons of dairy spread.
  •          June 25: SBS tender for 1,800 tons of butter.
  •          June 30: SBS tender for 2,000 tons of whey. (USDEC Japan office)

Market Conditions

GDT declines 1.3 percent
The GlobalDairyTrade (GDT) Index fell 1.3 percent to US$2,409/ton at the June 16 auction. It was the smallest decline in the past seven auctions, but also marked a seasonal low in terms of volume on offer, a fact that many thought would lead to better signs of an impending market turnaround.

Milk powder did hold largely steady, with the average winning price for SMP (US$1,978/ton) and WMP (US$2,327) slipping just 0.2 and 0.1 percent, respectively. And most other products posted gains: butter (+3.3 percent to US$2,707/ton), cheddar (+2.4 percent to US$3,128/ton), buttermilk powder (+10 percent to US$1,975/ton) and casein (+4.4 percent to US$6,216).

But Chinese buyers remained quiet and volumes are poised to rise for upcoming auctions when the Southern Hemisphere enters its production season. AMF led the market down this week, with the average winning price slipping 8.9 percent to US$2,814/ton, and lactose fell 2.8 percent to US$525/ton. (USDEC staff; GDT; New Zealand Herald, 6/17/15)

Company News

UDP plants get new lease on life
Two mothballed Australian dairy manufacturing plants will be up and running again come September after Beston Global Foods, based in Adelaide, Australia, paid A$12 million for the facilities. Receivers shuttered the plants, once owned by United Dairy Power (UDP), in April after selling off other parts of UDP (see Global Dairy eBrief, 4/23/15). Beston, which operates subsidiaries in Brunei, China, Thailand and Vietnam, plans to spend A$24 million to upgrade the plants (in Jervois and Murray Bridge, South Australia) and produce cheese and milk powder for export to China. (The Australian, 6/17/15)

Nestlé downsizes African operations
Nestlé said it was downsizing its Sub-Saharan Africa operations because growth across the 21-nation region has failed to live up to initial projections. The company has already closed offices in Rwanda and Uganda, plans to cut its workforce by 15 percent and expects to significantly reduce the number of products it offers. The company originally set a high bar, aiming to double its business every three years. Officials said they would be fortunate to reach 10 percent annual growth in future years. (Financial Times, 6/16/15)

Chinese dairies keep focus on infant formula
Chinese dairy manufacturers continue to focus on expanding share in the nation’s infant formula market. No less than four manufacturers have rolled out new entries in the already crowded category over the past few months.

  • Mengniu Dairy launched what is says is the first organic infant formula manufactured domestically in China with European raw milk. Mengniu sources the milk, sold under the Rui B’en brand name, from Austria.
  • New Hope Dairy signed a strategic partnership agreement with Walmart to sell its Akarola infant formula (imported from New Zealand) in the retailer’s 400 Chinese stores.
  • Tianyou Dairy re-launched its Shancheng infant formula after investing $73 million to develop its own dairy farms and $13 million to upgrade its production lines.
  • Feihe Dairy introduced Firmus Supernova infant formula. The company highlights the milk’s origin—its own farms from cows imported from Israel—and the speed at which it moves raw milk from the farm through the manufacturing process. (USDEC China office)

Synlait to supply infant formula to U.S. marketer
New Zealand’s Synlait Milk signed a deal to begin supplying U.S. baby product company Munchkin Inc. with branded, retail-ready infant formula later this year. Munchkin plans to market the line in the United States and China. The formula will comply with New Zealand’s “Grass Fed” standard, which requires the milk to come from cows exclusively given a pasture- and crop-based diet, with no grain feeding or use of feed not grown in New Zealand. Synlait will pay its milk suppliers a premium for the milk. (BusinessDesk, 6/18/15; Reuters, 6/17/15)

Mergers and acquisitions
Danone purchased Algerian yogurt maker Trèfle and reportedly plans to invest $20 million to expand production at the company’s facility in Blida, Algeria . . . Arla Foods sold its share of its Belgian milk powder joint venture Walhorn AG to its joint venture partner Lactalis. (USDEC Middle East office; Company reports)

Company news briefs
Fonterra Co-operative Group raised 1 billion Chinese yuan (about US$163 million) selling its third dim sum bond. The proceeds will help fund its investment in China’s Beingmate . . . Oman’s Mazoon Dairy, a subsidiary of Oman Food Investment Holding Co., plans to build a $258 million integrated dairy farm and milk processing plant in the Al Buraimi Governate to manufacture fluid milk, yogurt, laban, juice and water . . . Citing the prospect of “a substantial lessening of competition,” Britain’s anti-trust authorities are extending their probe into Müller’s proposed acquisition of Dairy Crest’s fresh milk business. The investigation will take approximately six more months . . . Egyptian dairy processor Arabian Food Industries (Domty) plans to launch an IPO by early 2016, hoping to capitalize on rising investor interest in the Egyptian dairy and food sectors. (Reuters, 6/17/15; Trade Arabia, 6/16/15; BusinessDesk, 6/16/15;, 6/15/15)

From the U.S. Dairy Exporter Blog