Guest Opinions

Idaho dairy needs a level playing field for exports, especially in Japan

Wilf Costello
Wilf Costello

At our plants in Gooding, Twin Falls, Blackfoot and Richfield, Glanbia Nutritionals turns more than 12 million pounds of milk per day into nutritious cheese and dairy ingredients, not just for Idaho, but the world.

When you include our innovation centers and corporate office in Twin Falls, and our farm relations teams throughout our milk-supply region, Glanbia Nutritionals directly employs more than 800 people. That’s a lot of jobs, but it’s just the beginning when you consider the positive economic ripple effect dairy has on other sectors of Idaho’s economy.

To continue this success story, we must look beyond our borders.

Ninety-five percent of the world’s population lives outside the United States. Exports have been a sales driver for the U.S. dairy industry, rising from less than $1 billion annually to well over $5 billion over the last 15 years.

That is why it is so important for the United States to approve the U.S.-Mexico-Canada Agreement (USMCA) that maintains open access to our No. 1 export market, Mexico. It is also critical to resolve U.S. trade disputes with Mexico and with China, the largest dairy importer in the world, so that we can restore normal trading conditions with both.

A new study by the U.S. Dairy Export Council (USDEC) shows it is similarly critical that the U.S. establish a trade agreement with Japan.

Japan implemented trade deals the past two months that lower dairy tariffs for our biggest export competitors: Australia, New Zealand and the European Union. The USDEC study projects that these agreements will put exporters like us at a competitive disadvantage in Japan, resulting in lost U.S. sales of $5.4 billion over 21 years.

We cannot afford to fall behind our competitors as they conclude trade deals that disadvantage or even lock us out of key markets like Japan.

As the second-largest cheese importer in the world, Japan purchased $1.2 billion in cheese from the United States and other suppliers in 2018.

Japanese cheese consumption is growing at 4 percent per year as the country’s domestic cheese production shrinks. We see considerable export opportunity ahead, especially as Japan’s expanding senior population pursues whey protein and other dairy products that support muscle maintenance as people age.

With the infrastructure, people and experience we have built in Idaho, Glanbia Nutritionals can compete anywhere in the world, including Japan.

We can’t make this happen ourselves. Trade negotiations between the United States and Japan are expected to begin soon.

For the jobs the dairy industry supports in Idaho and across the country, the Trump administration and Congress must find a way to put their differences aside to give us a level playing field wherever we compete.

We need a strong trade treaty with Japan that builds upon the dairy deals secured by Australia, New Zealand and the EU to keep us competitive in this key market.

Wilf Costello is chief commercial officer, global cheese/marketing and insights at Glanbia Nutritionals in Twin Falls.