For years, dairy farmers produced nearly all their milk for domestic consumption. That changed in the early 2000s, according to former U.S. ag secretary Tom Vilsack, who is president and CEO of the U.S. Dairy Export Council.
Vilsack spoke to 370 dairy farmers and industry representatives at the Second Annual Midwest Dairy Conference in St. Paul, Minn., on July 18.
Developing foreign markets
“There are some people who wonder why we focus on dairy exports when our domestic markets are so strong,” Vilsack said. “That’s because U.S. dairy farmers are so good — you keep producing more milk every year. Farmers are producing 1.5% more milk per year and were consuming 1% more milk every year. And the reality is, the world wants and needs our U.S. dairy products.
“Roughly 95% to 97% of the world’s population lives outside the U.S., and that is a population that continues to grow. It’s a younger population in developing and developed countries, where incomes are rising, the middle class is expanding, and cities are growing. There is a tremendous demand for dairy protein. So, in addition to having so many consumers for our products, the world needs and wants dairy.”
Vilsack discussed the purpose, accomplishments and goals of the U.S. Dairy Export Council.
“With resources provided through the dairy checkoff, we have hired more people to sell dairy products, and we have done a lot more promotion,” he explained. “We are continuing to look for new opportunities.”
Vilsack said the council is motivated to sell U.S. dairy products because it helps U.S. dairy producers be more profitable.
“We know if we sell more cheese, you will see your milk check go up,” he said. “It used to be 10 to 15 years ago we were selling commodity cheeses. Now we are selling award-winning specialty cheeses, and we have caught the attention of many countries who want our cheese. We are spreading the word to promote our cheese.”
With the trade war that started in July 2018 with China, which was the U.S.’ second-largest dairy customer, Vilsack said the U.S. is selling a lot fewer dairy products to China, but more to other countries.
“This year we are doing more and better,” he said. “We had a record year in 2018 in sales, with nearly 16% of U.S. milk production being exported.”
Earlier this year, Vilsack said, the U.S. Dairy Export Council trained 70 people to work behind deli counters in Saudi Arabia and parts of Africa to sell cheese in these areas.
“We are also promoting our specialty cheeses to chefs,” Vilsack said. “We are selling a lot of U.S. cheese in Costco stores in foreign countries.”
Vilsack said the council is always looking for creative ways to sell U.S. dairy products.
“We have developed partnerships with countries like Singapore, where we are selling products like whey, cheese and other dairy products,” he explained. “We are trying to get insight into what products consumers are interested in in Vietnam and other countries with growing populations.”
Vilsack said the U.S. Dairy Export Council is “still working with China, even though we have challenges with the tariffs.”
He said the council will hold ingredient innovation seminars in both China and Mexico, the U.S.’ No. 1 dairy customer, to let them know what products are available that they can work into their diets.
“We are telling the U.S. dairy story, which is a very compelling and exciting story,” Vilsack said, noting that foreign countries like how U.S. dairy producers are reducing greenhouse gas emissions and sustainably producing milk.
“I think that will help us boost dairy exports,” he said. “The U.S. brand is not only safe and nutritious, it is sustainable, too. We are also creating international alliances so we can walk in there with a number of votes, not just one vote.”
Vilsack said the European Union is trying to hold back the U.S. by saying our cheese can’t be called Parmesan, for example, because it is produced in the U.S. and not in Italy.
“The European Union knows the U.S. has an advantage in natural resources, land and university resources,” Vilsack said. “But we are pushing back, and we’re preventing them from taking away cheese names like Parmesan. We are looking for more ways to protect the U.S. dairy industry.”
Vilsack said he hopes the new trade agreement with Mexico and Canada — formerly known as the North American Free Trade Agreement — will be signed soon.
“I hope it will pass in the fall,” he said. “I’m not as confident that we will get an agreement with China. They have time on their side. Their leader is president for life. Ours has either one and a half or five and a half years left, depending on the 2020 election.”
Vilsack said that while agriculture is the ninth-largest industry in the U.S., when you combine food and agriculture, it becomes the No. 1 industry — larger than even the auto industry — employing 43 million Americans, or 28% of U.S. employees.
“When we talk to Congress, they listen,” he said. “When we’re working on trade agreements, that’s important.”