WCMA Notes: Despite Disruptions, Export Engagement Still Offers Great Opportunity

On October 1, East Coast and Gulf Coast dockworkers went on their first strike in nearly 50 years, halting activity at 36 ports and straining supply chains. While the United States Maritime Alliance and the International Longshoreman’s Association worked to broker a deal, economic analysts emphasized the gravity of the situation, noting the cost to the nation up to $5 billion per day.

While rare, this conflict was only the latest disruption for American exporters. International trade is inherently dynamic, and often volatile, due to a host of domestic challenges and geopolitical risks.

In this case, though, with risks can also come reward.

That was highlighted last week when Ambassador Doug McKalip, who serves as Chief Agricultural Negotiator for the Office of the U.S. Trade Representative (USTR), visited Wisconsin Cheese Makers Association member plants run by BelGioioso Cheese and Schuman Cheese.

“Traveling domestically arms me with first-hand knowledge of the practices our farmers and producers are implementing, while also allowing me to spread the word of the new market opportunities available,” said McKalip.

Both BelGioioso Cheese and Schuman Cheese are invested in growing their export sales, and McKalip offered encouragement and a commitment to partner in that effort. “In 2023, U.S. dairy exports to the world totaled $8.1 billion, down from the 2022 blockbuster year for U.S. dairy, but up from the $7.6 billion of 2021.  We want to build from this strong foundation – expanding existing markets and opening new markets worldwide – and all regions, all trading partners are important,” he said.

With rapid population growth and a growing middle class, McKalip noted countries in Asia and Southeast Asia are important targets both now and the future, but said, “Truly, from USTR’s perspective, we work with trading partners worldwide to identify ways to remove barriers and expand access for U.S. dairy.”

The team’s latest achievement has come in Chile, where lawmakers moved in September to safeguard the rights of all U.S. cheesemakers to use common food names, including parmesan, to market their products in-country.  It’s particularly impactful as Chile already stands as our largest cheese market in South America. McKalip expressed hope that this understanding on common food names could be replicated across the continent, growing value-added dairy sales. “We want to make sure that market access of U.S. cheese and meat products will not be restricted in foreign markets due to the mere use of certain terms. While each agreement will look different, our agreement with Chile demonstrates that we are able to make progress with trading partners on this issue. We will continue to press this issue in markets around the globe on behalf of our dairy producers and I’m confident that we will be able to continue this success,” McKalip said.

Negotiators may have benefited, to a degree, from a 20-year-long free trade agreement the U.S. already had in place with Chile.  Absent new agreements in other parts of the world, it seems that building upon existing trade relationships is an immediate focus for export maintenance and growth.

This week, World Dairy Expo has attracted numerous international buyers’ groups to America’s Dairyland, and processors and farmers alike have hosted eager delegations from Indonesia and Hungary. The small-but-mighty team at Wisconsin’s International Agribusiness Center is also working with groups from Guatemala, Kazakhstan, Kenya, Kyrgyzstan, the Philippines, Uzbekistan, Venezuela, and Vietnam. Later this month, an influential group from Taiwan will also visit, thanks in part to state-level investments in export endeavors, advocated for by WCMA members.

Increasingly, international buyers want to talk about American companies’ sustainability practices as a differentiator in the global marketplace.  During his visit, McKalip noted this as a strength for American agriculture, saying, “While we all can and should always be doing more, the conservation practices of U.S. farmers are something we are touting in our conversations at the World Trade organization and other multinational institutions, as well as with individual trading partners. We make sure to fully represent what the U.S. does very well, which is to have high-quality products that are made in a sustainable way.”

While in Wisconsin, McKalip hosted a roundtable talk with representatives from Grande Cheese, Klondike Cheese Company, Nasonville Dairy, Sartori Cheese, Schreiber Foods, with several companies detailing their work to streamline shipping, recapture and reuse water, and partner with farmers on land and energy conservation. “On the part of U.S. dairy, the more we can showcase our farmers and the care they put into their high-quality products, the better,” McKalip said.

Sustainability practices and strategic messaging, enthusiastic relationship building, advocacy for export investments, aggressive policy defense – none of these result in overnight export success.  But consistency on all of these fronts, paired with a refusal to be rattled by temporary disruptions, can pay off for dairy exporters in the long term.