Idaho Lieutenant Governor Brad Little presented the U.S. Dairy Export Council (USDEC) Mexico office with an "Idaho Valued Partner" Award Dec. 8 for its work to develop the market for U.S. gouda cheese in Mexico. The award recognized the success of Glanbia Foods, Twin Falls, Idaho, one of several U.S. companies seeing increased sales in the market.

USDEC market development programs, which are supported by U.S. dairy producers through their checkoff program, help build overseas demand for U.S. dairy products.

"This is a great success story for the U.S. dairy industry, and a strong example of how dairy producers benefit from export market investment," says Les Hardesty, a dairy producer from Greeley, Colo., chairman of USDEC and a board member of Dairy Management Inc. "We always talk about ‘making what the market wants.' Well, here's a case where USDEC worked with U.S. cheese suppliers and the Mexican trade to develop a profitable outlet for our growing U.S. milk supply."

Building gouda capacity
Mexico has long been the largest overseas customer for U.S. cheese, but about half the cheese consumed in Mexico is gouda – a variety the United States historically didn't make. Three years ago, USDEC embarked on a program to build U.S. gouda capabilities to service this untapped market.

Initial research identified specifications and characteristics buyers prefer. USDEC staff then worked with Glanbia and other U.S. suppliers to help them produce gouda that would meet market needs.

"It was important we got the cheese profile right," says Larry Solberg, USDEC's Mexico office representative. "We did tastings with key buyers to make sure it performed. It had to shred, melt and cut according to their needs."

In 2010, U.S. suppliers shipped 48,844 tons (107.7 million lbs.) of cheese to Mexico, twice the volume posted in 2006, according to U.S. Department of Agriculture (USDA) trade data. Through the first 10 months of 2011, exports were 38,222 tons (84.2 million lbs.), UDSA says. Gouda now makes up close to 20 percent of U.S. cheese sales to Mexico, USDEC estimates.

"Significantly, this is new and ongoing business," says Solberg. "It's not cannibalizing existing U.S. cheese sales. We've branched out into a new variety that has displaced other suppliers from South America, New Zealand and Europe," he explains.

"Glanbia nominated USDEC Mexico for the "Idaho Valued Partner" Award to recognize not only the excellent member services [USDEC Mexico representatives] Larry Solberg and Rodrigo Fernandez provide, but for the invaluable relationships and market knowledge we have been able to leverage through their office that has resulted directly into sales," says Dan Duran, Glanbia Foods' director of international sales. "Mexico will continue to be a focus for our export growth and we look forward to working with USDEC Mexico as a partner in our future success," he says.

For the Export Council, the award validates its long-term market-development strategy.
"We're honored by this recognition," adds Marc A.H. Beck, USDEC's senior vice president of strategy and insights. "It's a testament to the hard work of our Mexico office and our marketing team in Arlington, Va., as well as our member-partners who pursued and capitalized on this opportunity."

The U.S. Dairy Export Council (USDEC), funded primarily by dairy producers through their checkoff program, established an office in Mexico in the mid-1990s, when dairy exports to Mexico were averaging about $165 million a year. Since then, the organization has conducted a wide range of programs incorporating market development, market access assistance and trade policy advocacy. This year, Mexico will become the United States' first billion-dollar dairy market.

01.03.2012