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DELHI, Iowa - A November trade mission to Dubai, a city in the United Arab Emirates, provided a good insight into the prospect of increased dairy exports to the Middle East/North Africa (MENA).
Larry Shover, an Iowa dairy producer who farms with his wife, Nancy, near Delhi, Iowa, was one of four dairy farmers who traveled to Dubai on behalf of the United States Dairy Export Council from Nov. 2-7. They saw USDEC programs in action, toured the port and retail sales areas, attended the first-ever U.S. Dairy Business Conference, and promoted U.S. dairy products.
The Middle East Dairy Producer Mission traveled to Dubai to increase understanding of the growing MENA export market, to examine trends that may expand U.S. exports, and to observe the USDEC programs.
Trip participants were dairy farmers Glenn Easter of South Carolina, Ray Prock of California, Jim Reid of Michigan, and Shover; Alyssa Sowerwine, Senior Editor of Cheese Market News; Corey Geiger, Managing Editor of Hoard's Dairyman; Tom Suber, President, U.S. Dairy Export Council; Mark O'Keefe, Vice President, Editorial Services, USDEC; and Marc Beck, Executive Vice President, Strategy and Insights, USDEC. Nina Bakht Halal, Director, Middle East, USDEC, and her staff made the arrangements and gave a marketing briefing upon the group's arrival.
"It widened my eyes," Shover said in a telephone interview. "Hopefully, our presence gave some indication that we're serious about the market. As a U.S. industry, we want to show that we're in it for the long term, and that USDEC has changed its emphasis. We realize that we haven't been a consistently reliable provider in the past, but we're in a position to be that now. It's even more important to understand and meet the region's specifications for quality, packaging, and labeling."
The Middle East imports most of its dairy. Saudi Arabia, for example, imports 70 percent. U.S. dairy exports to the region have increased 89 percent over the last five years (2007 to 2012). That number was expected to grow even more in 2013 to $750 million, up 74 percent from 2012.
"We expect continued growth of dairy imports because of an exploding youth population, rising disposable income, and an increasing appetite for healthier food. They have a more favorable view of dairy and its healthful aspects than we do in the United States. I was very pleased with that," said Shover, who is on the National Dairy Board and the Dairy Export Committee of Dairy Management Inc., along with involvement in other organizations.
With the world facing an 85 million metric ton supply gap, the U.S. is the country best able to fill the gap. New Zealand is staged to increase its production five percent, but the U.S. can provide more consistent production. Geiger also pointed out that the U.S. has three times the combined milk production of Australia and New Zealand.
"I thought that New Zealand had the advantage in shipping costs but learned that shipping is less from the U.S. because of opportunities for backhaul-that makes us more competitive," Shover said.
With an annual rainfall of only five inches, MENA is the second largest dairy importing entity in the world, and the third largest import customer for the U.S. (after Mexico and Canada).
The United Arab Emirates has a population of six million, with two million in Dubai. The trade area encompasses two billion people.
Members of the trade group toured Jebel Port - the world's largest man made harbor, the ninth largest cargo port in the world and the largest shipping destination in the Gulf. Dubai ports have a strategic location and are among world leaders in container shipping.
"The ports are really modern," Shover said. "They're strategically located, with Iran across the Gulf and Iraq right there."
At the port, the group members toured Jebel Ali Free Zone, one of the world's largest and fastest-growing free economic zones with more than 7,100 companies, including 100 of the Fortune 500. Companies are taxed lightly, if at all.
Dubai is a very cross-cultural city, with only about 20 percent of the people being natives. Immigrants from Asia, the Philippines, India, and other neighboring countries are employed there.
"People are generally very friendly. Most of them in the new part of Dubai speak English," Shover said.
When the group visited the Sharjah Mega Mall and stopped at the new Menchie's Frozen Yogurt Store - one of over 200 worldwide - Shover was pleased to find milk from California. During stops at two supermarkets, Lulu's Hypermarket and Spinneys, the group saw more U.S. products, among them Sargento and Kraft.
"I was impressed by the dairy aisle," Larry said. "They have to import 90 percent of their food, as they don't have the water to grow food."
Larry and other group members were introduced to camel's milk, which is sold in the markets.
"There was date-flavored and regular. We bought some and tried it, but I wouldn't trade it for cow's milk," Larry said with a laugh.
The group visited the Hassani Group of Companies - a family-owned trading and distribution, manufacturing, retail and services, real estate, and contracting organization - that started as a small convenience store in 1912. Today it has 35 subsidiaries, spread around the world, and markets many international brands in the area, including Kellogg's, Crisco, French's, Cadbury, and Jif. Dairy is its top ingredient, buying dairy ingredients and making dairy foods.
"We may not have a lot of finished products there, but they import our products. They buy three-fourths of the butterfat we export," Shover said.
On a visit to the 24 million square foot Mall of the Emirates - the region's ultimate leisure, entertainment, and shopping resort - the group saw Ski Dubai, the first indoor ski, toboggan, and sled run in the Middle East.
"They don't have to go to Switzerland, they can just go there," Larry said.
Participants rode to the 122nd floor observation deck of Burj Khalifa, the tallest man-made structure in the world at 2,722 feet high.
Another interesting stop on the tour was Emirates Flight Catering, based at Dubai International Airport. Employing more than 6,500, it is the world's biggest catering facility by volume, creating 145,000 meals per day for 360 flights. Much of the food is prepared by hand, with men and women working separately at different jobs.
The first U.S. Dairy Business Conference was held on the group's last day in Dubai. Each farmer spoke briefly about his farm. The conference program included an address on risk management and price volatility by Robert Chesler, Vice President Foods Division of FCStone, LLC; comments from USDA Foreign Ag Service attaché Jude Achidenor; a message on the benefits of U.S. Dairy by Vikki Nicholson, Senior Vice President Global Milk, USDEC; and a very positive message from Dr. Carla Habib Hourad, a clinical nutritionist, restaurant owner, author, and TV show host.
"Dr. Hourad's message, to me, was very dairy friendly," Shover said.
He added, "The Middle East/North Africa is hungry for U.S. Dairy but the culture demands trust and trust requires face-to-face interaction. USDEC can provide that through this type of visit."
Suber also addressed the conference, pointing out that a lot of the United States' new production is being exported. He believes the export share will continue to rise. Nearly 17.5 percent of the U.S. milk produced is exported - more than one in seven days of production.
On their last day in Dubai, group members also attended a U.S. Cheese Culinary Conference featuring Mark Todd, "The Cheese Dude" from Monte Rio, Calif., and John Esser, a chef from Madison, Wis.
The group came home feeling very good about the prospect of increased exports to the Middle East/North Africa. The growth potential is enormous as MENA is hungry for U.S. dairy.[[In-content Ad]]

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