The white stuff

Disease Control, global demand and going green are all high in the International Dairy Foundation’s agenda. We sit down with President Jim Begg to hear about this year’s key priorities.

“The developing world is where the growth in demand for dairy products is greatest”
-Jim Begg

What are your main responsibilities as president of the International Dairy Federation?
Jim Begg: I get appointed for a period of time which in this case is four years. I also have a day job which is the chief executive of Dairy UK which is a political lobby org based in the UK in London so that's what I do nine to five.  The International Dairy Federation has a full time staff and a secretary based in Brussels. My role is to manage the board and to try to make sure that it stays relevant to the change that is happening in the industry. The dairy industry is hugely dynamic.  It is changing all the time and of course the work of the IDF changes with it. Four or five years ago when I started in the role the focus was on food law and on determining standards for the trade in international food. Now it's moved on, and the main issues are nutrition, the environment, welfare, food safety. The organisation is constantly changing and I must  steer that change and make sure the secretariat of that organisation delivers on the key issues of its members.

What is the biggest priority of the International Dairy Federation?
JB: Above all what we have to do and what the food industry is responsible for as its number one priority is that it ensures that around the world food is safe and this applies to dairy just as much as anything else. The challenge that exists around the world today is the breakdown of traditional detective mechanisms that stop trade from moving round the world. There is a lot more trade in food and in dairy in particular. On top of that there is a general trend towards deregulation of dairy regimes. And when the movement of food is much greater then the whole business of the transfer of animal borne diseases becomes of greater focus and the industry must pay absolute priority attention to that.The most recent issues have been Foot and Mouth Disease and Blue Tongue.  What we're doing all the time is is ensuring that best practice is communicated around the world so that the impact of these diseases is  minimised, and we explain to people round the world how the industry addresses these issues.

How does the IDF respond to the outbreak of diseases such as Blue Tongue or Foot and Mouth Disease?
JB: Our aims it to make sure that when we get problems the response is rapid and the consumers are informed of what is actually being done.  And if there are any gaps in either the detection of these diseases or the way in which the industry controls them, we aim to  get experts together quickly to find methods of addressing the problem and then communicate these ideas. We've got about 1200 experts around the world that we can call on to address issues as they arise.

That is the why organisations like the IDF are so important. We have a presence in 54 countries around the world and we have got something like 85% of the world's milk production in our membership So with that scale of coverage then, communication to organisations around the world becomes a lot more simple. And that's what we do. We're in the business of communicating best practice around the world, and where there are gaps, establishing best practice and communicating that as well.

How important are environmental concerns to the IDF?
JB: It's huge. The whole business of the Kyoto agreement has brought the issue of environmental awareness right into the public arena. It has also presented problems for some of the countries which are the world's polluters but even in those countries the pressure from the marketplace and the pressure from consumers will progressively affect change. We have to make sure in the dairy industry that we're proud of the credentials of our environmental practices and we must explain to people what we are doing. We've been unfairly lambasted as has the livestock sectors around the world. There was an FAO (report about three or four years ago which identified the dairy or the livestock industry as being responsible for 18% of greenhouse gases emissions around the world. But by the authors of the report's  own emission there was a massive degree of estimation in that and we suffered because of a lack of knowledge or statistics that were available.

What is the IDF actually doing to show that the industry is operating in an environmentally friendly way?
JB: We've been addressing the various studies that have now been done to show that the diary industry in particular has not been a major contributor to greenhouse gas emissions and not only that but that it's recording massive efforts by the industry to improve the situation. So we for example in the UK we engaged in some research which generated a figure that was probably nearer to 2% than 18%. And in America one of the studies showed the emissions to be less than 0.5%. So we take a very different view and it beholds organsations like the IDF and everybody else in the dairy industry to communicate the environmental credentials that the industry actually has. We should be proud of our environmental credentials and what we're doing about it rather than being on the defensive.

The US dairy industry hosted a sustainability summit and the outcome of that was the setting up of an innovation centre. And that is designed to develop initiatives right across the supply chain aimed at reducing greenhouse gas emissions from milk production consumption. Part of the innovation centre is the carbon council. And they've recently developed a roadmap which will be a specific action plan for the US dairy industry to reduce greenhouse gases emissions. The US ETA Greenpower Calculator indicated that if these mitigation strategies could be applied, they could reduce greenhouse gas emissions by 52%. That would be equivalent to taking 1.5million US cars off the road for a year.

In what emerging markets is demand for dairy products currently growing and how does the IDF communicate best practice to producers in those countries?
JB: And having such a large coverage of the dairy production industry we're obviously very involved in the developing parts of the world. And the developing world is where the growth in demand for dairy products is greatest. It's also the part of the world where balancing that demand with supply is the most difficult for obvious reasons.

In places like China and India, an urbanisation process which involves consumers going into the cities to work.  That process increases their consumption of dairy products significantly and the industry has a challenge to catch up with that. Now we want to make sure that through publications like the IDF's Good Welfare Practice guide and also the Good Farming Practice guide that the industries in these parts of the world can actually use the best practices that are employed elsewhere in the world in a way in which they are adapted to local situations and circumstances so that they can push production forward in the parts of the world where the demand is greatest. So those particular document or publications will be exensively circulated in the developing world.

How is demand for dairy products affected by the global economic downturn?
JB: There are a lot of positive market drivers at the momemt. We have an ongoing increase in demand for our products and that's stimulated by population growth and income growth around the world. There's a hiccup at the moment with the circumstances but the underlying factors are strong. Demand globally is positive. One issue is the balance between supply and demand and also the rise in the costs of feed stuff. That has pushed the price of dairy products up and it pushed the price of all food prices up in order to maintain sustainability. That obviously has an impact in terms of national  inflation rates and things like that.  But this growth in the food prices has followed ten years of food price stagnation. So what's been happening recently is that food prices and dairy prices have been catching up after a period of long-term stability In term of demand for dairy products, food is an important part of people's expenditure and there is still huge demand for dairy products particularly in Eastern parts of the world, such as China where there is huge demand potential which would mean long term demand for dairy products.

How have the removal of international trade barriers affected the cost of dairy products?
JB: At the moment we are also seeing much less regulation around the world, even in the US and I expect to see that trend continue. When you remove these types of barriers, you get more exposed to volatility in market places.  We expect to see much greater price volatility in the future because of the progressive removal of the regulatory systems and indeed we've seen this in the last two years, so that's going to be a challenge. Competitiveness is going to be a challenge as well and you're going to see a continuing rationalisation of dairy products around the world. This will result in a situation where there are fewer firms operating in more and more international markets in a drive to reduce costs. 

What are the biggest challenges that international dairy industry faces going forwards?
JB: The biggest challenges will come from nutrition and environmental issues. But without any doubt the industry is readily prepared to innovate in both areas. And one of the innovations that I think you will see, is a greater move towards lower fat dairy products. That's happening already and you'll see a continuation of that. Generally we forsee continued demand for dairy products. The consumers around the world love milk so the future is bright for the industry. One challenge stemming from that will be the balance between supply and demand.  In terms of the cost of feed that is falling again. There has been a significant increase in farm costs around the world however the higher price has elicited a production response and feed prices are now falling.

About the International Dairy Federation (IDF)

IDF is the pre-eminent source of scientific and technical expertise for all stakeholders of the dairy chain. Membership covers 53 countries and is growing. IDF accounts for about 82% of current total milk production worldwide.

The mission of IDF is to represent the dairy sector worldwide by providing the best global source of scientific expertise and knowledge in support of the development and promotion of quality milk and dairy products to deliver consumers with nutrition, health and well-being.

IDF is the centre for dairy expertise and is involved in:

• developing scientific knowledge,
• exchanging information,
• addressing global developments and
• facilitating networking within and outside the sector.