I spoke next with Polly Olson, Vice President for New Business, Sales and Marketing at Davisco Foods International, Inc. (Eden Prairie, Minnesota): "The dairy products we produce in Minnesota for exports include cheese, whey protein concentrates, lactose and specialty whey products such as BiPRO (whey protein isolate) and BioZate (hydrolyzed whey protein). Export markets are very important for our business. We are currently present in Geneva, Switzerland and Shanghai, China as well as having distribution centers located in Rotterdam, the Netherlands and Tianjin, China. We recently expanded our representative office and distribution center in Singapore to serve the demand from one of the fastest growing dairy consumption markets in the world."
Davisco Foods has been at the very frontier in advanced dairy processing and a strong supporter of fundamental dairy and food science research at the Midwest Dairy Foods Research Center.
I also spoke with Steven O'Reilly, Director of Business Development at Milk Specialties Global (Eden Prairie, Minnesota): "The core of Milk Specialties Global's business, for both domestic and export, is in value-added dairy ingredients including whey, milk and lactose. Dairy exports include whey protein isolate, whey protein concentrate, whey protein hydrolysate, milk protein isolate, micellar casein and lactose. In Minnesota, MSG manufactures and ships 2.5 million pounds of dairy products per month. Of this, approximately 170,000 pounds are exported, for 6.6% of total sales. We are currently serving a strong portion of Asian markets, with growing penetration in countries in the European Union."
Direct dairy exports from Minnesota are important, but given our geographic position perhaps even more important are indirect effects. As more milk produced in the western U.S. gets exported, our companies can capture larger shares of the domestic markets. In the words of Ed Welch, President and CEO of Associated Milk Producers Inc., "If the futures markets hold, AMPI will be moving more milk to its butter/powder operations. That's an advantage AMPI has as one of the largest butter/powder producers in the Midwest. A strong butter/powder market will also keep milk out of West Coast cheese vats and on ships leaving U.S. docks."
Planning for a future where dairy exports play an important role, Ed tells me AMPI is investing in high-value protein manufacturing and marketing. The cooperative currently exports 30 percent of their whey production, along with 60 percent whey protein concentrate, 10 percent nonfat dry milk and 10 percent of their lactose production. AMPI's primary export markets are Asia and Mexico.
Both directly and indirectly, dairy exports will play a major role in future development of the dairy sector in our state. From federal dairy policy and milk pricing to milk quality regulations – with every collective decision we make going forward – we always have to ask, how will this influence our ability to export?