While U.S. dairy exports in March were up 2% in volume and 10% in value year over year, they face headwinds as the COVID-19 pandemic continues.
The U.S. Dairy Export Council went into the year with a lot of optimism, but the virus has caused total disruption globally, Tom Vilsack, USDEC CEO, said in the "Live Dairystream" webinar on Wednesday.
Mexico’s economy wasn’t strong to begin with, and exports there aren’t seeing as much activity as they had. With the cancellation of the Olympics in Japan, opportunities there might not be as robust as anticipated, he said.
Hopefully, he said, the pandemic won’t complicate Chinese purchases in the Phase 1 agreement with the U.S.
Southeast Asia is beginning to rebound with foodservices opening up, and there’s a chance to continue to see growth in U.S. dairy exports to the region, he said.
USDEC is keeping an eye on Europe, which is sitting on a lot of supply that could trigger government intervention with powder purchases, he said.
USDEC continues to deepen its presence in every market with more staff and promotions and working with universities to develop new products, he said.
That’s particularly important in Southeast Asia, where the U.S. Center for Dairy Excellence is set to open in Singapore, he said.
“We wanted to send the message we’re in it for the long haul,” he said.
The center will have a test kitchen and offer sensory panels to educate the growing middle class, new consumers who will be interested in American products, he said.
There is obviously opportunity in India, but the trade environment there is extremely difficult, he said. USDEC is focusing on North Asia and Southeast Asia, where many of the top 10 markets for U.S. dairy are, he said.
It’s also putting a lot of effort into promoting U.S. cheese. During the last couple of years, more U.S. milk production has gone into cheese exports, he said.
USDEC has formed a partnership with Costco in China to provide customers with samples of U.S. cheese and train personnel to encourage customers to buy and use American cheese. The partnership has sparked a similar Costco promotion in Mexico, he said.
There is also a partnership in Japan with foodservice companies to promote U.S. pizza chains operating in the country, as well as partnerships with culinary institutions to educate chefs on how to use cheese, he said.
In all of the opportunities to increase cheese sales, USDEC wants to make sure consumers recognize it’s U.S. cheese, he said.
“That’s important to a certain extent in these markets,” he said.
U.S. cheese is seen as upscale and something that impresses friends. It’s important companies brand it U.S. cheese and get it in the minds of consumers all over the world, he said.
Through all of its activities, USDEC is linking the sustainability message of U.S. dairy, which will ultimately allow the industry to sell more product in the future, he said.