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Global Dairy eBrief
Sept. 24, 2015, Volume 24, Issue 37


TPP chief negotiators to meet this weekend; positive outcome for U.S. dairy remains uncertain
Chief negotiators for Trans-Pacific Partnership (TPP) countries are slated to meet Sept. 26-30 in Atlanta. Depending on their progress, as well as progress made at a two-day meeting in San Francisco this week on automotive rules of origin, a ministerial meeting could immediately follow. At press time, the USTR’s office declined to confirm the ministerial, and sources indicated it would not likely take place if TPP members did not sufficiently narrow their differences on the three major outstanding issues of dairy market access, autos and protection for biologic pharmaceuticals.

TPP countries have been working bilaterally and in small groups since the July ministerial in Hawaii to come up with “landing zones” on the handful of issues that remain unresolved. USTR Michael Froman said the countries have been making “steady progress” to narrow differences. USDEC has consistently advocated for a TPP dairy outcome that delivers meaningful benefits for U.S. dairy producers and processors. Whether TPP will deliver that result is, at this stage, quite unclear. (USDEC staff; Inside U.S. Trade, 9/22/15, 9/21/15)

California Dairies, Inc. earns 2015 Tom Camerlo Exporter of the Year Award
Dairy Foods magazine named California Dairies, Inc. (CDI) the 2015 Tom Camerlo Exporter of the Year. The magazine presents the award annually to the dairy processor that exemplifies leadership in advancing U.S. dairy exports, demonstrates commitment to export market development and makes exports an integral part of its overall growth strategy. CDI has excelled across all those criteria, as noted in today’s U.S. Dairy Exporter Blog.


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

Dairy Foods will present CDI with the award at Chicago’s Swissôtel on Oct. 15 during the USDEC Annual Board of Directors and Membership Meeting. The magazine will also feature a profile explaining CDI’s exporting success in its November issue.

CDI is the 10th recipient of the award. To catch up on the previous nine winners, go to the USDEC website here. To register for the USDEC annual meeting in Chicago, Oct. 14-16, including the Export Supply Chain Best Practices Forum that precedes it on Oct. 14, click here. Nearly 100 dairy industry executives have signed up so far (a list of registered attendees is available here). 

Member input needed for USDEC online supplier directory
USDEC is making it easier than ever for overseas buyers to find the U.S. dairy products they need by updating the USDEC supplier directory and revamping the supplier search engine. The search engine, the most-visited page on, will soon feature a new service category for allied members.

The supplier directory and search engine are proven tools to reach new audiences. We encourage all members who have not reviewed their existing listings and submitted new information in 2015 to do so as soon as possible. USDEC can provide forms listing all the necessary information, including product descriptions and contact details. For copies of the forms or questions, contact John Klees at or 703-528-3049.

Webinar outlines protein’s effect on weight management, body composition
Over 700 participants watched last week’s National Dairy Council (NDC) webinar, “Weighing In: Protein for Weight Management.” The presentation featured the latest research on the benefits of following a higher protein diet for weight management and offered practical tips and ideas to help bring the science to life. NDC posted a recording of the hour-long event at its whey website.

NDC promoted the webinar to the Food and Culinary Professionals (FCP) Dietetic Practice Group (DPG) of the Academy of Nutrition and Dietetics, which is made up of registered dietitians who have strong interests in food and culinary skills. USDEC funds whey protein health-professional outreach and NDC executes the program.

In related news, NDC also released a new infographic about dairy proteins that offers consumers practical culinary tips to broaden dairy protein use at home: Think Outside the Blender with Dairy Protein

Sign up now for USDEC’s Dairy Spotlight
USDEC encourages members to sign up to receive Dairy Spotlight, a feature of, the customer portion of the USDEC website. Dairy Spotlight provides updates on the U.S. dairy industry—generally once a week to your inbox —highlighting USDEC initiatives, dairy-related nutrition news, and other marketing information of interest to U.S. suppliers. Go to Dairy Spotlight to view the most recent posts and subscribe.


Fonterra lifts 2015/16 payout estimate, reduces milk forecast, cuts more jobs
Fonterra Co-operative Group raised its forecast farmgate milk price by NZ$0.75 to NZ$4.60/kgMS, reflecting, it said, recent gains in global pricing and signs that global milk supply growth was easing. An NZ$0.50-0.60 earnings would put the overall payout of NZ$5.10-5.20. That compares to a final overall payout of NZ$4.65 for 2014/15.

Farmers welcomed the revision, although DairyNZ said about 70 percent of farmers would still be operating in the red even at the increased level.

Fonterra did not believe the rise would reverse 2015/16 milk production forecasts. In fact, the co-op said it expected to collect “at least” 5 percent less milk this season than last season. Previously, it projected a decline of 2-3 percent. Rabobank was even more aggressive in its milk production forecast, projecting an 8-10 percent decline in New Zealand milk output for the current season. Cow culling remains high—more than double in August 2015 compared to the previous August—and sources indicate farmers are planning to further reduce herd numbers in the coming months.

Just prior to releasing its year-end results and updating its forecast for the current season, Fonterra slashed an additional 227 jobs (on top of 523 announced in July (see Global Dairy eBrief, 7/23/15)) as part of an overall business review aimed at cutting costs. Spierings described this year’s market as “one of the most difficult I’ve known” and would likely remain so for the medium term. (Company reports;, 9/24/15;, 9/24/15; AgriHQ, 9/23/15; Agriland, 9/23/15)

GDT officially amends auction rules
Global Dairy Trade (GDT) will implement new Market Rules effective with the Oct. 6, 2015, event. GDT says the rules, which were proposed in June (see Global Dairy eBrief, 6/11/15), aim to strengthen the liquidity and transparency of the platform. To view the amended Market Rules, click here


Fonterra looks to capitalize on pasture-fed reputation
Fonterra is asking its farmers to limit use of palm kernel expeller (PKE) as supplemental feed to “future-proof” its position as a “trusted producer of pasture-based products and to stay ahead of global consumer expectations.” The co-op contends its reputation for grass feeding earns it a premium on the world market, even though its farmers routinely utilize supplemental feed. New Zealand imported more than 2 billion tons of PKE in 2013/14, a 25 percent gain from the previous year. Fonterra’s new guidelines propose a maximum of 3kg per cow per day of PKE. Farmers responded cautiously to the proposal, some asking for data on the kind of premium Fonterra says pasture feeding provides. (Company reports;, 9/21/15)

Mergers and acquisitions
Yashili International paid $165 million for Oushi Mengniu, a wholly owned subsidiary of Mengniu Dairy that manufactures infant formula and adult milk powder products. Mengniu Dairy owns a 51 percent stake in Yashili . . . Chinese infant formula maker Biostime International is paying nearly $1 billion for a majority stake in Australian health supplement maker Swisse Wellness Group . . . Singapore investment group Temasek Holdings and Saudi Arabian food conglomerate Savola Group made an offer to buy fast-food franchiser and vegetable processor Kuwait Food Co. (also known as Americana), which operates Pizza Hut, TGI Friday’s, KFC and other chains in the Middle East and North Africa. (USDEC China office; USDEC Middle East office; Wall Street Journal, 9/23/15; Bloomberg, 9/17/15)

Company news briefs
FrieslandCampina is reportedly considering shipping premium infant formula to western China via rail to shorten delivery times. A new rail line linking Duisberg, Germany, and the southwestern city of Chongqing opened last year and has been gaining popularity . . . Vietnam’s Anova Milk, a subsidiary of Nova Group, launched Anka Milk infant formula via a partnership deal with Kerry Group signed earlier this year (see Global Dairy eBrief, 2/5/15). Kerry manufactures and packages the product in Ireland. Each can features a traceability code that allows consumer to look up a variety of production-related information, including the packaging date and quality tests performed . . . Korea Yakult is considering entering the cheese business to boost sagging revenues. It tangentially ventured into cheese by launching a line of stirred yogurts with cheese earlier this year. (USDEC South Korea office; USDEC Vietnam office; Dairy Industry Newsletter, 9/17/15)

Data Updates on

Have you checked out the interactive charts of market and trade data on the USDEC website? Key metrics like milk production, exports and imports and prices are updated regularly. This week we learned:

To browse the full Market Data section of, click here

From the U.S. Dairy Exporter Blog

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