IDFA Dairy Forum 2010: CEO Tipton outlines challenges, opportunities

Almost 900 dairy industry leaders representing nearly sector of the dairy industry pipeline gathered in Phoenix, Ariz., for the International Dairy Foods Association’s Dairy Forum 2010.

In her annual address, IDFA president and CEO Connie Tipton called for industry involvement, innovation and unity as the best ways to combat a sluggish economy and unleash the industry’s potential for growth and success. She reviewed issues affecting the dairy industry, including:

1) government economic and social policies that negatively impact the business climate;

2) regulations and government mandates, especially covering food safety and labeling;

3) changes in diet and nutrition guidelines, including policies impacting federal and school feeding programs that could limit dairy;

4) energy and environmental policies that will change dairy processes, marketing and business strategies;

5) dairy policy “safety nets” and trade policies that limit dairy trade potential; and

6) changes in consumer trends requiring  increased innovation and consumer education.

Touching on the dramatic changes emerging from the Obama Administration and Congress, Tipton warned that a flood of new regulations, taxes and mandates may soon become laws of the land. From health care to food safety, nutrition to cap-and-trade, the industry needs to oppose unnecessary regulations or unjustified fees that will add costs to production without providing benefits to dairy consumers,

she said.

“There are businesses and industries that simply cannot weather additional costs in an increasingly competitive and regulated

marketplace,” Tipton said. “Our industry is not immune to these risks. So we have a real stake in what comes out of this very political process in Washington.”

She said some nutrition initiatives being promoted by the Obama Administration place dairy at the center of dietary restrictions, especially regarding fat and sodium. She warned needless nutrition meddling – such as restrictions on flavored milk – could lead to a decline in dairy consumption, despite its powerful nutritional package. She said efforts related to childhood obesity that target dairy couldl have a detrimental impact on health.

Tipton also pointed out that the past year of “devastating milk prices,” dropping export levels and consumer belt tightening clearly showed that the “so-called safety net programs for our dairymen” don’t work in today’s market economy.

She offered highlights from a comprehensive National Milk Producers Federation plan for reformatting dairy policies and programs. Acknowledging that the plan would affect different businesses in different ways, Tipton encouraged industry leaders to abandon the status quo and give the plan serious consideration.

By doing so, she added, “The U.S. dairy industry has a chance in 2010 to re-chart its future, to build a better, stronger, more cohesive

community, energized at last by genuine teamwork and breakthrough thinking.”

Tipton said the Obama Administration has been slow to promote international trade talks. She expressed hope that days of export subsidies were coming to a close, and that dairy policy reforms – including potential elimination of the Dairy Product Price Support and Milk Income Loss Contract programs – could help promote dairy product innovation and trade.

Despite the debate surrounding climate change and sustainability issues, the dairy industry is moving forward through the Innovation Center for U.S. Dairy to address “green” values held by consumers, including steps to reduce dairy’s “carbon footprint” throughout the production and marketing chain. Those efforts have the potential to change dairy production, processing and marketing practices.

Another lesson the industry learned last year, Tipton said, is that it must listen closely to consumers and provide innovative ideas, products, ingredients and packaging to meet their needs.

The recent economic downturn has resulted in changes to consumer eating habits, with more people eating a greater portion of their meals at home. Consumers are also more frugal in making purchasing decisions, while seeking information on the source and health/wellness aspects of the food they are eating. Dairy has a good story to tell, she said, and should promote itself better, while adjusting to the changing tastes and lifestyles of consumers.

“Fundamental to our success will be how well we compete for the consumers’ palate – at home and around the globe. We need more people eating dairy and choosing dairy ingredients – and that means we’d better know what consumers are thinking and what’s tickling their taste buds,” she said.

She concluded with a call for industry leaders to confront the current policy climate and all industry challenges with resolve and teamwork.

“It’s the only way we can progress, the only way we can win, the only way we can realize the kind of success we all know is possible – the success that is within our grasp,” she said.

Tipton’s complete speech is available in the News & Views section at www.idfa.org.


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