CEO Interview

USDEC CEO Tom Vilsack pinpoints US dairy export opportunities

By Mary Ellen Shoup

- Last updated on GMT

There is 'tremendous potential' for US dairy exports, USDEC CEO Tom Vilsack told DairyReporter. ©GettyImages/Waldemarus
There is 'tremendous potential' for US dairy exports, USDEC CEO Tom Vilsack told DairyReporter. ©GettyImages/Waldemarus
International partnerships between the US dairy industry and key export markets have formed six months after USDEC introduced the “The Next 5%”, a strategic export plan targeting an increase of dairy exports from 15% to 20%.

“For dairy farm families to have the chance to pass their farms on to their kids, the shift to a global marketplace focus holds the key,”​ USDEC president and CEO Tom Vilsack said. 

The goal of the export plan is to help US dairy gain greater visibility in various markets such as China, Southeast Asia, Japan, Korea, the Middle East, and North Africa, to help alleviate some of the pressure on US dairy farmers to find outlets for their milk supply. 

Prior to joining USDEC as president and CEO in January 2017, Vilsack served as the US Secretary of Agriculture for eight years. 

“We are being more aggressive in these markets and we're being more aggressive in international organizations that can establish rules and regulations for the sale of [US] dairy products,”​ Vilsack told DairyReporter.

USDEC has hired additional staff to help with trade policy, market access, and regulatory affairs, according to Vilsack.  

“I'm pleased to say that as a result of the investments that folks have been willing to make, we've hired additional business development and key account managers in China, in the Middle East, North Africa, and Japan.”

Culinary and retail partnerships

USDEC has increased its efforts in establishing partnerships with culinary institutes and universities in emerging international markets including China, Japan, South Korea, Singapore, and North Africa, according to Vilsack.

“It's not a new strategy but a more extensive and more significant investment of resources and effort at developing more of these relationships,”​ he said.

“We're developing curriculum for chefs and incoming chefs so they understand the ways in which they can use US dairy products in putting together recipes and so forth for high end food service entities.”

USDEC has also expanded retail presence of US dairy including partnerships with Costco in Korea and Japan.

‘By no means should the focus be solely on China’

China has been an important export market for the US as a record amount of cheese was sold to the country of 1.4bn people last year, an increase of 44% between 2016 and 2017.

“There's an opportunity for us to work with major food companies with the retail operations in China – I think there’s a tremendous need for powder and whey,” ​Vilsack said. “But by no means should the focus be solely on China.”

Outside of China, USDEC will be targeting Japan, Korea, and Vietnam, the latter of which is very open to doing business with US dairy, Vilsack added.

The Middle East, particularly the United Arab Emirates, is another key market for USDEC, according to Vilsack, where there is an abundance of consumers interested in high-end products and less stringent trade barriers.

USDEC recently exhibited at Gulfood in Dubai, where the trade organization doubled its trade-show presence.

“A lot of people raise questions about whether or not that's [UAE] feasible or viable,”​ Vilsack said.

“The interesting thing about that scenario is you've got people with a substantial amount of resources and high incomes and US dairy is well thought of in the Middle East.”

Cheese consumption is ten times higher in the Middle East than South East Asia despite having half the population, Vilsack continued.

NAFTA outlook

The Canada Class VII milk pricing system continues to be a major talking point for the US dairy industry during NAFTA renegotiations.

“The one positive thing that's happening in Canada is that consumers are beginning to be more aware of the fact that they're paying more for their dairy products,”​ Vilsack said.

“It's [Class VII] created a serious problem, they've created a world market in powder that is being distorted because of Canadians selling powder at substantially below global prices.”

Vilsack added that the Trump Administration recently introduced tariffs on steel and aluminum has complicated NAFTA talks and that the outcome is “anybody’s guess.”

“We're trying to, through NAFTA renegotiation, get Canada to scrap the Class VII system and open up their markets so that their consumers can benefit and that our dairy producers are treated fairly.”

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