September 16, 2019

Seven Strategies To Increase Exports To China, Japan

 |  By: Tom Vilsack

As our farmers look to the future, it only makes sense to gaze across the Pacific Ocean, where consumers are adding dairy to traditional Asian diets. These Asian consumers want more and more high-quality cheeses and dairy ingredients their countries can’t provide. 

We have in abundance what Asia needs, creating a door of opportunity. 

I visited two of our biggest Asian export markets, China and Japan, on an August 28 to Sept. 3 trip. China has a population of 1.4 billion, Japan 127 million. Together, that’s more than four times the number of mouths we feed in this country.

The potential is obvious but trade policy issues pose challenges.

Most notably, Chinese retaliatory tariffs have been a weapon in a lingering trade dispute with the United States. Dairy exports to China fell 43% in the year since the new tariffs began. And in Japan, we see New Zealand and the EU seizing a competitive advantage through new free-trade agreements that tilt the playing field against us.

At the checkoff-funded U.S. Dairy Export Council, we embrace these challenges and opportunities head-on for our farmer-funders and member companies.

Here are seven promising strategies on display during my trip to China and Japan:

1. Build relationships despite trade tensions
In China I met with government officials at the Ministry of Finance and Commerce (MOFCOM) and addressed the China Dairy Industry Association. In the midst of a trade war, I realized there would be little interest in the usual discussion about the benefits of U.S. dairy products as ample, nutritious and safe. I decided to approach the meeting and prepare my presentation in a way that reflected our desire to maintain positive relationships.

2. Help solve the problems of our customers
In China, I took the opportunity to suggest that our industry had learned that more permeate given to piglets in a higher ratio and more whey protein given to lactating sows resulted in faster growth and more pigs per sow. I expressed a willingness of our industry to share our research in the hopes that at some point now or in the future we could export more ingredients to China. I intend to follow up with a letter to the Ministry of Agriculture and Rural Development. 

3. Emphasize our sustainability commitment
I raised the challenge of climate change in China and the opportunity it presents to the global dairy industry. I spoke of the commitment our farmers to reduce emissions. In addition to helping the earth, sustainability can give us a global marketing advantage.

4. Encourage free-trade agreements
When the EU completed its free trade agreement (FTA) with Japan and when the Trans-Pacific Partnership (without the U.S.) went into place, our competitors in the EU and New Zealand gained an immediate competitive advantage. Many of their tariffs fell to zero. Ours didn’t, and our tariffs remained in place. USDEC continues to push for a free-trade agreement to rectify this and I am hopeful that a “mini” FTA recently announced with Japan will go into effect.

5. Develop win-win partnerships
Curves runs nearly 2,000 women’s fitness centers in Japan with a focus on seniors. To combine exercise with nutrition, many members get a monthly supply of whey protein. Nearly 50% of the whey protein sold by Curves comes from the United States. The company is now opening fitness centers for men in Japan and is expanding to other Asian markets. Our U.S. dairy ingredients will go with them.

6. Promote the quality and heritage of U.S. cheese 
The Japan cheese market continues to grow, hitting record imports for four years in a row. My visit with Chesco (owner of 10 cheese stores and a marketer to high-end grocery and department stores in Japan) convinced me a new program with them will succeed. Later this year, Chesco will introduce up to eight American cheeses in high-end grocery and department stores. 

7. Teach future chefs to become U.S. cheese ambassadors

At Hattori Nutrition College in Tokyo, 115 up-and- coming chefs finished the first level in our USA Cheese Specialist™ Certification Program. We are building a generation of chefs and food industry leaders in Japan and elsewhere who will be educated in the quality, versatility and capacity of U.S. cheeses. 

In short, my recent trip left me optimistic that smart strategies are putting our U.S. dairy industry in a position where it can compete to win in China, Japan and around the world.