Opportunities, barriers for exports considered | AG | kmaland.com – KMAland

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Opportunities and barriers for Wisconsin dairy exports were the focus of a recent AgTalks town hall. A growing middle class in Asia, the Middle East and North Africa provides opportunities for Wisconsin dairy exports. At the same time there are barriers such as geographical indications and trade agreements, said panelists representing the dairy industry. Thomas Vilsack, former secretary of the U.S. Department of Agriculture and currently president and CEO of the U.S. Dairy Export Council, moderated the panel discussion.

Five panelists participated.

  • Jim Mulhern, president and CEO of the National Milk Producers Federation
  • Jeff Schwager, president of Sartori Cheese
  • Chad Vincent, CEO of the Dairy Farmers of Wisconsin
  • Jeff Lyon, general manager of FarmFirst Dairy Cooperative
  • Randy Romanski, secretary-designee of the Wisconsin Department of Agriculture, Trade and Consumer Protection

“The opportunity is huge,” said Mulhern about U.S. dairy exports. “We’re among the most efficient milk-producing countries in the world and we have a strong processing industry. What we need to compete are trade agreements that level the playing field. There are so many barriers around the world. And until we have a level playing field, the European Union and New Zealand will generally have better tariff advantages. We don’t need any special advantages; we just need a level playing field.”

Another challenge is that every four or eight years the United States has a new president. Each has had a different idea of what he wants to do with trade as well as a different set of negotiators, Lyon said. Some governments have the same negotiators in place for a long time.

“They have a strategic plan,” he said. “That’s a challenge we have to overcome.”

If the United States doesn’t have an overall policy that involves increasing U.S. dairy trade as one of its key objectives, the industry will continue to “try and play catch up,” Mulhern said.

“We’ve moved into this bilateral world of agreements with either countries or regions, and we just don’t have enough of those agreements moving us forward,” he said. “If the World Trade Organization worked, that would be the best place to have an international agreement on the reduction of tariffs.”

A reduction in tariffs would provide the United States more access to trade and ultimately drive more exports, he said.

Schwager also said the United States is generally playing catch up in terms of trade agreements. Meanwhile the European Union has been forming a number of bilateral agreements. That includes one with Mexico where the European Union has ensured protection for its geographical indications. The European Commission stated the protection means that, “European Union producers of traditional delicacies are not struggling against copies, and when consumers buy these products they can do so knowing they are buying the real thing.”

To avoid the geographical-indicators issue Sartori has created and named new products. The company is the largest exporter of specialty cheese to Europe, Schwager said.

Sartori recently conducted a market study in Europe. It conducted the same survey 10 years ago with a group of cheese enthusiasts. Just 3 percent of the respondents then thought Wisconsin cheese was equal to or better than European cheese. The most recent survey indicated 61 percent considered it to be equal to or better than European-made cheese, he said.

Wisconsin has export opportunities due to the strength and diversity of its agricultural industry. The state’s cheese and many Wisconsin cheese companies are well-known internationally. The opportunity to compete globally on a fair basis is important. Barriers to exports, Romanski said, involve the instability or lack of coalitions to address some of those issues internationally.

Mexico and Canada remain the two largest markets for U.S. dairy exports. The United States-Mexico-Canada agreement is expected to improve trade. But the North American Free Trade Agreement – in place from 1994 to 2020 – had already increased U.S. dairy-export volume to Mexico by 435 percent and value by 646 percent, according to the U.S. Dairy Export Council.

In 1993 – the year before implementation of the North American Free Trade Agreement – the United States sold only $205 million in dairy exports to Mexico. In 2019 it sold $1.53 billion in dairy products and ingredients to Mexico. That accounted for about one-fourth of all U.S. dairy exports in 2019, the council stated.

The value of U.S. dairy exports to Canada in 2019 was $807 million, an increase of 3 percent from 2018. A key to Canada moving forward will be enforcement of the U.S.-Mexico-Canada Agreement, Mulhern said.

Schwager said that one shouldn’t lose sight of opportunities in Latin America, where trade barriers are less challenging, and Asia, which has long-term potential as Asians incorporate more dairy into their diets.

Asia and Africa are critical places beyond existing dairy markets, Vincent said. Dairy Farmers of Wisconsin is a supporter of the U.S. Dairy Export Council, which helps provide Wisconsin’s dairy industry with access to markets and buyers. Once foreign buyers visit Wisconsin and see the industry’s infrastructure, cheese sales begin to flow, he said.

Ninety percent of the milk produced in Wisconsin is made into cheese and 90 percent of that cheese leaves the state. Whey also is a strong mover; whey exports are expected to increase as other world markets open, Romanski said.

The panelists agreed that the growth of a middle class in Asia and other areas holds significant potential for dairy exports.

Mulhern said to remember that the U.S. population is currently about 330 million and isn’t growing fast.

“The real growth in the world population is in Asia, the Middle East and North Africa,” he said. “The middle class in Asia will dwarf the entire population of the United States in the next 20 years. So the more we can get access with trade agreements we will benefit. But we need a level playing field. If we don’t, the advantage will go to the European Union, New Zealand and Australia.”

AgTalks is a national conversation on trade, supply chains and the future of American agriculture. It’s sponsored by the National Association of State Departments of Agriculture, the National Corn Growers Association, the National Milk Producers Federation, the U.S. Dairy Export Council, the Plant Based Products Council, the Corn Refiners Association, the American Farm Bureau, the Fresh Produce Association of the Americas, Farmers for Free Trade and many others.

Visit AgTalks.net and blog.usdec.org – search for “virtual town hall” for more information.

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