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Global Dairy eBrief
July 2, 2015, Volume 22, Issue 26


U.S. takes another step in normalizing relations with Cuba

The United States and Cuba agreed to restore diplomatic ties and reopen embassies in each other’s capitals. The move follows a series of actions aimed at easing political tensions and removing barriers to trade—actions made since President Obama first announced his intention to normalize relations with Cuba in December 2014 (see Global Dairy eBrief, 12/18/14).

USDEC is a member of the U.S. Agriculture Coalition for Cuba, a group championing an end to the U.S. embargo against the island nation. Cuba has been importing about $200 million of dairy products annually in recent years, but virtually none of it comes from the United States due to trade restrictions. For more on developing U.S. dairy opportunities in Cuba, read Vikki Nicholson’s U.S. Dairy Exporter Blog post recounting her March trip to the island as part of the U.S. Agriculture Coalition to Cuba delegation. (USDEC staff; Wall Street Journal, 7/1/15)

Food safety workshop focuses on dairy powder

In previous food safety workshops it conducted, the Innovation Center for U.S. Dairy (IC) noticed a heavy concentration of questions and a general lack of resources related to dry products. So this year, the IC tapped experts from Leprino Foods, Hilmar Ingredients, Land O’Lakes, Michigan Milk Producers Association, Agri-Mark, Mead Johnson, Nestlé and Commercial Foods Sanitation to share best practices and design a new food safety workshop designed specifically for dairy powder manufacturers.


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

The course combines lectures with hands-on, interactive exercises and will explore a range of topics, including pathogen control, environmental monitoring, sanitary design, corrective actions and sanitation.

“The workshops are a great way to learn about pathogen controls in a dry manufacturing plant from top experts across the industry,” says Tim Stubbs, VP, product research, DMI. “It’s a unique chance to ask questions in a safe environment and to compare notes with peers who face similar challenges. When it comes to food safety, the dairy industry continues to take a proactive stance to protect consumers.”

The IC will hold the dairy-powder-specific workshop in Coopersville, Mich., Oct. 13-14. A more general food safety workshop that covers powder and other dairy products is slated for Aug. 11-12 in Green Bay, Wis. For more details or to register for either, click here.

USDEC staff, members named to USDA advisory committees
USDA Secretary Tom Vilsack and USTR Michael Froman appointed 129 private-sector members to the Agricultural Policy Advisory Committee (APAC) and six Agricultural Technical Advisory Committees (ATACs) to serve until June 15, 2019. USDEC President Tom Suber, who was serving on the ATAC, will now serve on the APAC. USDEC Senior VP, Trade Policy, Jaime Castaneda, and Dairy Farmers of America Senior VP and Chief Fluid Marketing Officer John Wilson will serve on the ATAC for Trade in Animals and Animal Products. Sue Taylor, VP, dairy policy and procurement, Leprino Foods, and Autumn Veazey Price, director of government relations at Land O’Lakes, will serve on the ATAC for Trade in Processed Foods. (USDA)


Large WMP decline sends GDT down 5.9 percent
The GlobalDairyTrade (GDT) Index fell 5.9 percent to US$2,276/ton at the July 1 auction, with declines across all products except AMF. Higher volumes of product on offer, the continued ongoing global supply/demand imbalance and buyers’ supply chain needs adequately covered kept market sentiment weak and sent prices down for the eighth straight auction.

WMP led the declines, as the average winning price plummeted nearly 11 percent to US$2,054/ton. Other products fared only slightly better: SMP fell 5.8 percent to US$2,327/ton; cheddar dropped 4.9 percent to US$3,060/ton; buttermilk powder decreased 8.1 percent to US$1,878/ton; casein declined 4.1 percent to US$5,901/ton; and butter slipped just 0.3 percent to US$2,694/ton. The average winning price for AMF rose 1.6 percent to US$2,855/ton. (USDEC staff; GDT)

Greece default creates uncertainty in Europe
Greece’s economic troubles came to a head this week after negotiations between the nation and its creditors broke down. At press time, the nation had officially defaulted on a €1.55 billion repayment to the International Monetary Fund, closed all its banks, imposed controls to prevent a flood of money from leaving the country and called for a referendum this weekend on new bailout terms offered by its international creditors. The situation is pushing down the euro and pushing Greece closer to a potential exit from the European single currency, an eventuality that could further undermine its value.

Dairy processors in the region are reacting to the turmoil. Arla Foods withdrew most of its capital from Greece and reduced its risk by cutting stocks in the country. FrieslandCampina, lifted its stocks of condensed milk and infant formula in anticipation of stockpiling by consumers should the situation deteriorate further. (Financial Times, 7/1/15, 6/29/15; Reuters, 6/29/15)

EU farmers renew calls for assistance
A number of EU farmer organizations renewed calls for measures to assist struggling dairy farmers. Copa-Cogeca called for member states to advance direct payments early, for the bloc to return the 2014/2015 superlevy to help dairy farmers cope with cash flow problems and for immediate reassessment of the intervention price. British and Irish farm groups reiterated the demands, noting it was clear that “the EU dairy sector is in crisis” and that farmers needed “urgent help.” (Irish Independent, 7/1/15;, 6/30/15; Farming Life, 6/30/15)

U.S. gets small piece of ALIC whey tender
Japan’s Agriculture and Livestock Industries Corp. (ALIC) held an SBS whey tender for 2,000 tons on June 30. It was the last of a series of eight June tenders and the first time the United States managed to win a portion (77 tons) since the June 4 SMP tender that kicked off the series (see Global Dairy eBrief, 6/4/15).

Volumes were well dispersed among winners, with six countries taking 10 percent or more: Netherlands, 374.5 tons; Australia, 348.89 tons; France, 302 tons; Germany, 297.7 tons; Finland, 250 tons; and Uruguay, 200 tons. New Zealand secured 100 tons and Spain won 50 tons. (USDEC Japan office)

Uruguay government considers dairy supports
The Uruguayan government is considering assistance measures for the domestic dairy sector, whose export income dove 31 percent over the first five months of 2015. Uruguayan dairy farmers and processors have been simultaneously hit by rising input costs, drought and declining product prices. The government is studying a number of financial assistance tools, including low-interest loans and a special dairy stimulus fund. (Dairy Markets, 6/25/15)

India advocates regional dairy plan to boost self-sufficiency
The India government drew up a plan to increase the flow of milk between the nations of South Asia and lower third-party imports into the region. In theory, the “white grid” or “milk grid” plan would help surplus producers like India by providing a convenient and growing customer base among net importers like Bangladesh and Sri Lanka. Deficit producers would benefit from lower prices. The plan calls for all nations in the region to reduce dairy tariffs to below 5 percent and implement expedited border rules that facilitate milk transport.


NZ revisits China FTA
New Zealand has begun preliminary talks with China to eliminate safeguard mechanisms in their bilateral FTA. Under the current terms of the agreement, China may implement an additional safeguard tariff should New Zealand dairy exports exceed certain established thresholds. New Zealand exceeded the trigger levels on multiple products in 2014.

The New Zealand government said it would pursue the changes last year after noting that the Australia-China FTA contained no such mechanisms. The country is aiming to conclude a new deal by next year, a goal that may be overly ambitious given today’s dairy climate and China’s oversupply. (Dairy Markets, 6/30/15)

U.S., EU schedule 10th TTIP round
U.S. and EU negotiators will meet for round 10 of Transatlantic Trade and Investment Partnership (TTIP) talks July 13-17 in Brussels.


Fonterra starts up new dryer
Fonterra Co-operative Group began the commissioning process of its new NZ$235 million WMP dryer at its Pahiatua facility on the North Island. The dryer is the third at the site and lifts the plant’s overall output to 140,000 tons per year. Pahiatua will begin receiving milk in August. (Company reports; Wall Street Journal, 6/29/15)

Company news briefs
China’s Zhongding Dairy Farming and Russia’s Severny Bur are building a $165 joint venture dairy complex in Mudanjiang, Heilongjiang Province, to supply Russia with milk. The partners plan for the complex to eventually support 100,000 cows . . . ConAgra Foods plans to exit its struggling private-label business less than three years after spending $5 billion to acquire it . . . Godiva Chocolatier plans to double its outlets in Saudi Arabia and the UAE to 30 over the next 12 months as part of a global expansion strategy that will also see new stores in India and Latin America . . . Nestlé plans to open a $120 million factory to produce coffee and “culinary products” (including foodservice packaged sauces, bases, and prepared entrees and side dishes) in Dubai by the end of this year . . . Florida-based Sloan’s Ice Cream signed a development deal with LMZ Cuisines, a subsidiary of Dubai hotel/restaurant/real estate firm Landmark Zenath Group. The deal calls for a minimum of five Sloan’s units, with the first opening in Dubai this fall. (USDEC Middle East office; Wall Street Journal, 6/30/15;, 6/29/15)

From the U.S. Dairy Exporter Blog