This differentiates the U.S. industry from other major exporters like New Zealand, which is less diversified. If there is a drought in New Zealand, it is likely to impact the whole country, Levitt says.
The U.S. dairy industry is not without its challenges. While U.S. dairy is growing its exports, Levitt says the primary focus is still the domestic market. While this is a good thing for the industry, it can be a disadvantage when competing with other exporters who are more focused on global trade. For example, the United States exports about 15 percent of its milk production, while some other countries can export as much as 95 percent.
Levitt says it’s important for the U.S. industry to balance domestic and global needs to keep both markets strong — weakness in global trade can have an impact on the domestic dairy market.
“If we’re not globally competitive, then we risk losing share in our home market to competitors from overseas,” Levitt says. “We’re all competing for share of stomach, and if U.S. dairy isn’t globally competitive, we risk losing share to other competitors or other foods.”
The U.S. industry’s focus on domestic consumption is also challenging because it can impact companies’ policies and the way they invest in production. For example, a U.S. dairy company might choose to build and invest in plants that serve the domestic market, and are not equipped to meet the strict regulations placed on exported dairy products.
This is a challenge that DFA knows well. Director of export sales ingredients Filiberto Heras says the list of specifications for exported dairy products is lengthy — low spore content, heat stability and nitrate levels are just a few of many standards U.S. dairy exports have to meet.
Recognizing the significance of global trade, Heras says DFA is making the investment to manufacture products that consistently meet those specifications. One example is DFA’s Fallon, Nev., facility, built in 2014 from the ground up specifically to meet global standards.
“Fallon is giving us the opportunity to manufacture ingredients that comply with export requirements,” Heras says.
Heras says that Fallon is the first facility of its kind in the United States, and DFA is the first U.S. company that has the ability to use nitrogen in the packaging process of whole milk powder. Nitrogen extends the shelf-life of the product from six months to two years — a big leap that helps make DFA’s ingredients more competitive in the global market.
DFA’s investment in the Fallon plant is an example of the Cooperative’s growing commitment to world trade. Board Director Dan Senestraro, who also serves as chairman of DFA’s Global Trade Committee, says the global market has become a focus for DFA and the rest of the industry only in the past five to 10 years.
“Early on, I’m not sure we really knew why we were creating a committee on global trade,” Senestraro says. “We just knew we needed to be more deliberate in our thinking about global trade and what it means for our company and our industry.”
Now, Senestraro says the committee meets several times a year to discuss DFA’s global trade strategy and goals, and hear from speakers involved in all aspects of trade, from logistics to politics.