Connie Tipton, IDFA president and CEO, traveled last week to Oslo, Norway, to deliver an opening-day presentation at the 6th Global Dairy Congress. Speaking on "Meeting Demand and Remaining Competitive in the Global Market," Tipton addressed more than 100 dairy executives representing 24 countries, including many European Union nations as well as Russia, Brazil and Japan.
"We welcome the opportunity to share information with companies and dairy trade groups internationally, particularly as the dairy industry becomes more and more global in marketing our products," Tipton told the audience. "And I welcome the opportunity to make valuable connections with colleagues from around the world."
Tipton started her presentation with a look at what's driving global demand and why the United States is uniquely positioned to play a major role in meeting that demand. She also discussed how IDFA is working to reshape U.S. dairy policies so they will promote, not hinder, industry growth and innovation.
Rising Incomes Driving Demand
"Today, four billion people live on less than $2 a day, but as their incomes rise from $2 to $10 a day, they move to diets higher in animal protein," Tipton explained. "When incomes rise to above $10 a day, people buy an even greater variety of foods, including processed foods. This predicts opportunity for dairy, as well as for more innovative products, as incomes around the globe are rising."
Tipton noted that the world population is projected to grow to more than nine billion people by 2050. In this same time span, global demand for dairy is projected to rise by 58 percent, with developing markets providing the greatest growth in demand. The current global dairy supply will be challenged to keep pace with the growing market.
"Today we are approaching exports of 15 percent of our total production with a value of about $5 billion U.S. dollars. That gives us a very favorable trade surplus in dairy," Tipton said.
Need Policy Reform to Be Consistent Exporter
"We have the productive capacity to keep growing, we have the wherewithal financially to make necessary capital investments, we have the ability to make innovative products – so long as we have the right market incentives – and we have the infrastructure and capability to get those products to markets all around the globe," Tipton said. "But the U.S. needs to reform its government pricing schemes and support programs for dairy farmers in order to be a consistent exporter."
Tipton explained why the current U.S. milk pricing system no longer works in today's market and why IDFA is opposed to the Dairy Market Stabilization, or supply management, program included in the draft Farm Bill. She highlighted IDFA's ongoing efforts to gain policy reform, risk management tools for dairy farmers and improved market access for the dairy industry.
"I have no doubt that we’ll continue to grow demand in the U.S., but we'll also become increasingly competitive in growing global markets as we move toward feeding billions more people," she concluded.