Meet your new customers!

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Japan Sandwiches often include meat, cheese and tomato. But a Japanese baker has come up with a sandwich that just has the cheese and tomato.

Cheese from the United States….

Yasuhiro Nakajima, who works at a major bakery company in Tokyo, says he finds Colby Jack cheese interesting because of its marbled look. And, Colby Jack doesn’t have a strong flavor that overrides the other ingredients. Another U.S. cheese he likes to use, Pepper Jack, has a unique accent or taste which, in combination with cream cheese and Parmesan, offers a flavor package that is earning acclaim.

Until recently, many U.S. dairy producers looked at exports as a means to get rid of surplus product. But, increasingly, they are learning that it can be a very lucrative value-added market if they are willing to make the commitment to satisfying the needs of customers, like Nakajima.

Huge success story
Indeed, a huge success story is unfolding with regard to U.S. cheese exports to Japan.

Between 1995 and 2010, there was more than a five-fold increase in the amount of U.S. cheese exported to Japan. And toward the end of 2011, it appeared those exports could be up 50 percent from 2010.

In 2011, U.S. cheese exports to Japan could amount to more than 20,000 metric tons, according to Jeff McNeill, director of the Japan office for the U.S. Dairy Export Council. That would make the U.S. the third-largest supplier of cheese to Japan, with about a 10 percent market share. Australia and New Zealand still remain the largest suppliers.

Not wanting to rely too heavily on New Zealand and Australia, Japan has decided to diversify its purchasing to include more suppliers such as the United States.

Japan has a robust dairy industry of its own, but still must import quite a bit of cheese, whey and other ingredients to meet the needs of its people.

Quite simply, there are fewer and fewer dairy farms in Japan.

According to Benjamin Petlock, agricultural attaché at the U.S. embassy in Tokyo, there are only half as many dairy farms in Japan today as there were in 1995. And, total milk production in Japan has declined by 9 percent from 8.47 million metric tons in 1995 to 7.72 million metric tons in 2010.

One explanation is the age of Japan’s farmers. Twenty-five percent of all farmers in Japan are over 60 years of age, Petlock says, and many are simply deciding to retire.

Consistent suppliers
In November 2011, a group of U.S. dairy producers and export officials traveled to Japan to learn more about that market. They learned there is a high degree of trust in the quality of American products and that American products are also cost-competitive. The biggest question on the minds of Japanese importers and end-users is whether the U.S. will be a long-term, consistent supplier.

“We assured them that the American dairy industry will work toward being a consistent supplier of cheese and dairy products,” says Paul Rovey, dairy producer from Glendale, Ariz., and chairman of Dairy Management Inc., which manages the national dairy checkoff program.

Know the customer
While price is important — and surely the weaker U.S. dollar against Asian currencies has made American products more attractive — a good working relationship and quality products make the critical difference.

A lot of it is building trust and getting to know the customer.

Kurt James, senior vice president of the product and supply chain division for McDonalds in Japan, told the group how a California cheese company got some of McDonald’s business in Japan by being willing to work on a risk-management plan to reduce price volatility.

When asked what the U.S. dairy industry can do to further efforts in Japan, the Dairy Export Council’s Jeff McNeill had this to say:

“The most important thing is to learn more about the market. So, we really appreciate the fact that people from the United States — the suppliers, the farmers — come over to Japan to learn more actively what they can do to meet the needs of the customers here in Japan. This is really very critical. In Japan, they like to have a feel for the history of the company and the people they are dealing with. The face-to-face relations often go a long way to facilitate that.”



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