Expert: Exports critical to dairy
WASHINGTON — Krysta Harden underscored the importance of dairy exports in an April 6 hearing before the Subcommittee on Livestock and Foreign Agriculture of the U.S. House Agriculture Committee.
The full committee is in the process of reviewing the 2022 Farm Bill.
Harden is president and CEO of the U.S. Dairy Export Council.
From the time of its founding 27 years ago, U.S. dairy exports have grown from $764 million to $7.75 billion last year.
She explained that USDEC is the dairy industry‘s cooperator, which executes programs to increase U.S. dairy exports with the support of the Market Access Program and the Foreign Market Development Program since its founding 27 years ago. As part of that work, USDEC has actively participated in multiple Global Based Initiatives.
Harden said that the support of Farm Bill Title III programs has been instrumental to that growth. Moreover, continued support is critical in sustaining and growing U.S. dairy future exports.
USDEC’s mission is to enhance U.S. global competitiveness. Although Dairy Management Inc. founded USDEC in 1995, and through the dairy checkoff program, is the organization’s largest funder, none of those funds is used for advocacy efforts. Harden noted that USDEC works with the National Milk Producers Federation to promote and advance the trade interests of the dairy community. She added that USDEC’s advocacy with Congress and the Administration related to trade policy issues is solely funded by membership dues.
While employing over 1 million workers, dairy adds $750 billion to the U.S. economy. But to continue its successful support of farmers, workers and consumers, international trade and exports are of utmost importance. Harden said, “Exports underpin U.S. dairy’s success in the present and will support the industry’s growth in the future.”
Today, Harden noted, exports account for 17 percent of U.S. milk production. As expected global demand grows, exports are expected to climb.
Milk consists of milkfat, protein and lactose. Our domestic consumption versus the international uses of those different components varies. In addition, U.S. cows produce more of these essential components than the U.S. consumes. Consequently, export markets are critical to fully use all the components.
Since 2001, U.S. milk production increased by 37 percent, while exports quintupled. The value of exports increased even faster, jumping more than fivefold.
Looking more recently, since 2010 the amount of international dairy traded has grown higher than 4 percent per year on average. However, U.S. dairy consumption growth per year was only 1.5 percent.
Harden pointed out, “The well-being of the U.S. dairy industry is inextricably tied to international trade and the global dairy demand is strongly reliant on the U.S. remaining a consistent and reliable supplier.” She notes that 96 percent of the world’s population lives outside the U.S. and is rising, along with their incomes.
U.S. dairy exports have grown by more than domestic sales in four out of the past five years, Harden stressed. She continued, “And this is despite what U.S. exporters face in key markets with recent export supply chain headwinds and competition disadvantages.”
The U.S. is the third largest dairy exporter. The top two, the European Union and New Zealand, have been active in international markets far longer. Plus, their trade policy strategies are more robust. Between them, one or both have free trade agreements in 15 out of the 17 largest dairy markets by value. In contrast, the U.S. has FTA’s with five.
Harden said that maintaining trade relationships is crucial, and urged the Congress and the U.S. government to work together to prioritize greater market access. The case for free trade agreements is more important than ever. Also, customers around the world continue to demand more high-quality, nutritious, and sustainable dairy products.
Harden pointed out that the benefits of MAP and FMD have exceptional cost-benefit ratios. Export revenues of $20 has been shown with $1 invested.
In addition, she indicated that language in the 2023 farm bill to combat the challenge of geographic indications trade barriers is supported.
USDEC also encourages Congress to examine opportunities to increase the use of U.S. dairy ingredients to target food programs to draw more heavily on the high-quality nutrition that dairy offers.
One example is powdered milk in ready-to-use therapeutic food. She pointed out the underfunded situation means that only one of four children suffering from wasting have access to that life-saving treatment.
Harden urged the pursuit of comprehensive trade negotiations with key Asian markets—Japan, Vietnam, Malaysia, Thailand, Indonesia and the Philippines. FTA’s she pointed out can level the playing field where the U.S. currently loses to competitors.
Existing trade agreement enforcements need to ensure accountability with the USMCA partners. Canada’s proposal to alter its tariff-rate quota commitment falls short. Mexico’s burdensome regulatory proposals pose a threat to U.S. milk powder and cheese exports.
The China Phase One agreement has achieved progress on dairy facility registrations and access to extended shelf-life milk but regulatory tariffs continue.
In addressing the United Nations Food Systems Summit, Harden pointed to the U.S. leadership in encouraging the benefits of a sustainable productivity model and innovations through incentives on our Net Zero Initiative. The dairy industry, she said, provides a prime example of land stewardship.