SALEM — Despite trade uncertainty in several key markets, 2018 was a record year for U.S. dairy exports, with 15.8% of total milk production heading overseas.
Tom Vilsack, former secretary of agriculture under President Barack Obama, has his sights set on an even more ambitious goal.
Vilsack, who now works as president and CEO of the U.S. Dairy Export Council, delivered the keynote address at the annual Oregon Dairy Industries Conference April 10 in Salem, where he discussed efforts to boost dairy exports to 20% and avoid a domestic surplus that could further depress prices for farmers.
To do that, Vilsack said the council has adopted three basic strategies — increase the number of people working abroad on behalf of U.S. dairy, expand promotions and unlock new partnerships with food associations, culinary institutes and universities to promote awareness.
“There are ways in which we can deepen our presence in these export markets,” Vilsack told the Capital Press.
Last year, the council hired six new people to work on business development in the Middle East, North Africa and Asia. The council also recently hired a business development director in Mexico, which ranks as the number one export market for U.S. dairy.
Vilsack said the council launched new promotions for U.S. cheese, including a deal with Costco in China, South Korea and Japan, reaching out to their 2 million members. Just 6% of American cheese is currently exported, compared to 70% of milk powder.
“If we really want to help the farmer, and we really want to get to that 20% (exports), we gotta sell more cheese,” Vilsack said.
Part of the challenge is resolving the litany of trade disputes and retaliatory tariffs in countries like China and Mexico. Through the first five months of 2018, Vilsack said U.S. dairy saw a nearly 40% increase in exports to China, before tariffs were assessed and sales plummeted.
Meanwhile, countries are still working to ratify the United States-Mexico-Canada Agreement, or USMCA, which would replace the North American Free Trade Agreement. Vilsack said the dairy industry is supportive of the USMCA, however if it is ratified without first resolving retaliatory tariffs, it would basically negate additional opportunities laid out in the deal.
As for Japan, Vilsack said a bilateral free trade agreement is needed after the U.S. pulled out of the new Trans-Pacific Partnership. Japan entered into an economic partnership agreement with the European Union as well in February.
“If three of our top four or five markets are constrained by tariffs, or because we are at such a disadvantage because we don’t have a free trade agreement, it puts of lot of pressure on our other remaining markets in the top five or 10,” Vilsack said. “It makes it that much more difficult.”
A major selling point for U.S. dairy is efficiency and sustainability, Vilsack said. According to a recent United Nations report looking at greenhouse gas emissions from the dairy sector, North American dairies emit 50% less greenhouse gases per kilogram of milk than the global average.
“Not only is it marketable, it’s essential,” he said. “The U.S. dairy industry has a good message to convey. I think we need to do more of that.”