The United States and China signed a memorandum of understanding (MOU) today that should markedly increase access to the Chinese market for U.S. dairy products.
The new agreement holds the potential for “significant opportunities” for milk, cheese, infant formula and dairy ingredients exports, reports Tom Vilsack, president and CEO the U.S. Dairy Export Council. “China is already the world’s largest dairy importer, even though per capita consumption remains far below that of the United States, Europe and even its Asian neighbors like Japan and South Korea. The potential to increase exports there is tremendous,” he says.
The U.S. shipped $384 million worth of dairy exports to China last year, making it the third largest market for the U.S. behind Mexico and Canada. Market access, however, has been an issue.
In 2014, the Chinese implemented “Decree 145,” which mandated exporting countries register and certify dairy facilities to ensure the plants met Chinese food safety standards. In a nutshell, the new MOU will allow third-party safety certification of U.S. dairy processing plants that will then be allowed to send dairy products to China. The MOU should create Chinese market access for more than 200 U.S. dairy exporters in the short-term and paves the way for additional players in the future.