CWT: Strong Q1 results spur call for increased support

The 2013 Cooperatives Working Together (CWT) Export Assistance program got off to a strong start in the first quarter (Q1) of 2013, according to CWT chief operating officer Tim Tillison. As a result, CWT leaders are asking member co-ops to double the financial support they provide to help export U.S. dairy products.

According to a summary in a quarterly Export Assistance Update, CWT received 513 requests from 10 member cooperatives during Q1 2013. Of those, CWT counter offers were accepted on 280.

The 176 accepted cheese offers will result in 47.1 million lbs. of cheddar, Gouda and Monterey Jack cheese exports to 20 different countries on six continents through September 2013. This is a 28% increase over the 2012 Q1 accepted cheese bids.

Asia accounts for the lion’s share (47%) of the cheese sales, followed by North Africa (30%) and the Middle East (12%). Japan accounted for 49% of the cheese sales to Asia, with sales split evenly between Cheddar cheese and Monterey Jack cheese. Virtually all of the Monterey Jack cheese receiving CWT export assistance was sold in Japan; South Korea had just one purchase of Jack cheese.

Butter offers accepted totaled 99, resulting in the sale of 46.5 million lbs. of 82% butter to 15 countries on three continents. This represents a 45% increase compared to 2012 Q1.

Where CWT-assisted butter is going presents a significantly different picture. While nearly half of the Q1 cheese export sales targeted Asia, none of the Q1 butter export sales were headed there. Instead, of the 46.5 million lbs. of butter CWT is providing export assistance on, 68% (31.6 million lbs.) will go to the Middle East. 

North Africa accounts for 11.2 million lbs., 28% of Q1 exports. Sales to European countries round out the total, at 8% (1.7 million lbs.).

In the Middle East, Saudi Arabia is taking 44% of the product, followed by Israel (32%). Bahrain is next, followed by the United Arab Emirates (U.A.E.) and other countries in the Middle East.

On March 11, the CWT Committee gave preliminary approval to a request to have member cooperatives vote to increase their investment in CWT from 2¢/cwt. to 4¢/cwt, effective July 1, 2013. The adjustment would also apply to 2014 and 2015.

The additional investment is needed to cover the large increase in CWT member requests for export assistance in 2013, as world demand for U.S. American-type cheeses, butter, whole milk powder and anhydrous milk fat continues to grow. Based on the present pace of activity, CWT will not be able to provide the assistance that its members need to compete in world markets during the remainder of 2013, without the adjustment.

One-third of the funds targeted for export assistance in 2012 and 2013 were carryover funds from previous years’ activities. Those carryover monies will be completely exhausted in 2013.

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