By Amelia Buragas

CHICAGO — In the past year, decreased stocks and a convergence of prices have changed the dynamics of the world butter market and opened the way for the U.S. industry to become a major global player. However, industry experts say U.S. producers must overcome significant challenges in order to turn this temporary advantage into a long-term trend.

During this week’s joint annual meeting of the American Dairy Products Institute and the American Butter Institute, panelists discussed the current global butterfat market. Marc Beck, vice president of marketing, U.S. Export Council, moderated the session, which featured a variety of market viewpoints.

Dermot Carey, vice president of ingredients, Darigold, which produces butter for export, says that as traditional butterfat supply sources have dried up, U.S. manufacturers are stepping up to fill the void.

“Supply from traditional sources has faltered due to economic and weather events,” Dermot says.

In the European Union (EU), policy changes have resulted in drastic reductions in production and export subsidies. In addition, prolonged drought conditions in Oceania have reduced the available supply.

Carey also notes that while world demand for butter imports has been increasing, total world stocks have been declining. Currently, butters stocks account for less than 5 percent of the total available butterfat — a little more than a decade ago, stocks accounted for upwards of 25 percent of the total butterfat.

Carey adds that as traditional suppliers have been unable to meet demand, domestic and international prices have converged.

John Kennedy, Kraft Foods, says these shifting global butterfat price trends are the driving factor behind recent changes in global sourcing patterns. For many years, U.S. butter prices were the highest on the market — reaching heights up to $2.00 to $2.25 per pound while Oceania and European prices were less than $1.00 per pound, Kennedy says. Last year, however, the balance shifted with U.S. prices falling below $1.50 per pound, Oceania prices nearing $2.00 per pound and European prices hitting nearly $2.75 per pound.

Kennedy says these new prices trends have resulted in significant quantities of butterfat from the United States being imported by plants outside of North America where it is used for commodity-related applications. He says overseas companies looking for more specialty applications typically continue to source butterfat locally or from established suppliers.

Carey also notes that annual production of butter is increasing in the United States and that this additional supply is available to global buyers. Carey predicts U.S. exports of butter will approach 50,000 metric tons by mid-year. By comparison, New Zealand exports approximately 400,000 metric tons annually and the EU exports approximately 250,000 metric tons annually.

While production is increasing, Carey says the United States still accounts for a small portion of total world butterfat production. The United States produces 655,000 metric tons of butter products annually, compared to the 6.765 million metric tons produced by the rest of the world. As such, Carey says the global demand is much larger than the U.S. butterfat supply.

In addition, Kennedy warns that global buyers consider recent trends to be short-term, and there is an expectation that traditional sourcing patterns will be re-established in the near future. He says there is concern regarding the long-term commitment of U.S. butterfat suppliers for export markets. In addition, he says U.S. suppliers are challenged by increasing supply chain and logistics costs and that differences in color, flavor and fat specifications of U.S. butter products are “true hurdles.” Finally, Kennedy says it remains to be seen whether the U.S. butterfat industry will invest in the innovation necessary to drive demand.

In order to take advantage of what may be a relatively short-term price advantage, Kennedy says the U.S. industry must focus on innovation to develop new products, better packaging and to improve upon supply chain logistics. In addition, he says suppliers should take advantage of free trade agreements as well as increase the availability of annual fixed pricing options.

Don Street, Ecoval Dairy Trade, notes that the U.S. industry has an adequate cream supply to take advantage of the global market. In addition, he notes the United States has excellent microbiological standards, consistent quality and readily available kosher and halal sources. He notes that Chicago Mercantile Exchange futures contracts can be used to manage risk, but that the markets need more liquidity.

However, he notes that the United States faces a number of weaknesses, including that the United States is not a consistent supply source and traditionally an import market. Other weaknesses include: light color of butter product, freight charges upwards of $400 per metric ton and differing quality standards. In addition, Street notes that it is difficult to produce specialty blends in USDA-inspected plants.

CMN

By Rena Archwamety

Editor’s note: As part of our monthly “State of the Industry” series we take a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our fourth “State of the Industry” — Wisconsin.

MADISON, Wis. — Wisconsin has an unshakable reputation as a cheese state. From the red “America’s Dairyland” across its license plates to the yellow foam “Cheeseheads” worn by football fans, those traveling through will see many reminders of the state’s long and proud legacy.

There was a time, however, when even Wisconsinites questioned how long that legacy would last.

“In the early to mid 1990s, there was a very big gloom and doom attitude in Wisconsin’s dairy industry,” says Brad Legreid, executive director, Wisconsin Dairy Products Association (WDPA).

California had just overtaken Wisconsin in milk production. Farms were going out of business and dairy plants were closing. Industry was beginning to move further west.

“I think Wisconsin was being written off as America’s Dairyland,” Legreid says.

In recent years, however, a number of industry groups and leaders have come together to turn that trend around. Communication between producers and processors has improved. The rate of decline in total number of farms has slowed down, while farms that remain in Wisconsin are expanding and embracing new technologies to increase milk production.

“The whole attitude in the state has changed in the last decade,” Legreid says. “It’s a very positive, re-energized attitude.”

Government support also has increased to help fuel growth in Wisconsin’s dairy industry.

Sen. Herb Kohl, D-Wis., and Rep. Dave Obey, D-Wis., helped secure five years of funding for Wisconsin’s Dairy Business Innovation Center (DBIC), an organization launched in 2004 to help grow the state’s specialty artisan dairy businesses. The center is federally funded and matched by in-kind contributions from Wisconsin’s dairy sector.

The Wisconsin legislature passed a 2004 tax credit to help dairy producers modernize and expand farm operations, and it passed similar credits in 2005 for livestock producers and in 2007 for dairy plants. Another proposed credit that covers dairy cooperatives is expected to pass by next year.

“In the 17 years I’ve been with WDPA, I’ve never seen anything like this. It’s very positive,” Legreid says. “It sends a clear message that the Wisconsin Legislature and government have a strong desire to support our No. 1 industry in the state.”

Attitudes aren’t the only changes in the Wisconsin’s cheese and dairy industry in recent decades. The changing patterns and growing numbers of cheese consumption across the United States have been reflected in Wisconsin dairy as well.

Total annual cheese production in Wisconsin has nearly doubled over 30 years, from 1.28 billion pounds in 1977 to 2.45 billion pounds in 2007. However, Wisconsin’s total cheese production in 2007 fell about 2.1 million pounds from 2006.

While Cheddar still makes up a significant portion of Wisconsin cheese production, traditional American-type commodity cheeses have fallen since their peak production in the mid-1980s. Meanwhile, Italian and specialty cheese production has exploded.

Mozzarella and other Italian cheeses combined made up almost 48 percent of Wisconsin’s cheese production in 2007. Cheeses in the “other” category, which includes specialty cheeses, totaled more than 174 million pounds in 2007 compared to 50 million pounds in 1997 and 22 million pounds in 1987.

“Wisconsin specialty cheese production has realized rapid and sustained growth,” says Patrick Geoghegan, senior vice president of corporate communications for the Wisconsin Milk Marketing Board, which offers a number of programs to help develop and promote Wisconsin cheeses. “Consumers recognize Wisconsin’s quality in cheesemaking, spurring Wisconsin specialty cheese to a 36 percent market share.”

Dominique Delugeau, senior vice president, sales and marketing, DCI Cheese Co., Richfield, Wis., says the company has witnessed a dramatic shift in cheese trends over recent decades.

“You see the specialty cheese industry increasing at a much faster pace in the past 20 years, three times faster than commodity cheese,” Delugeau says, adding that this trend is especially prevalent in Wisconsin.

“Wisconsin is a leader for organic and specialty cheese. It has more startup companies for specialty and artisan cheeses,” he says. “A lot of commodity production has moved west.”

Currently there are at least 600 varieties of cheese made in Wisconsin, more than any other state in the nation, and the number is growing.

Some new varieties include traditional cheeses like Cheddar or Jack with added flavors or attributes. For example, last year DCI Cheese Co. introduced a new line of Wisconsin-made probiotic cheeses under the County Line brand. The line includes Pepper Jack, Colby Jack, Monterey Jack and Mild Cheddar, all containing probiotic Lactobacillus Acidophilus cultures.

“We saw success with probiotics in yogurt and cultured products, so we decided to launch the cheese,” Delugeau says.

“Customers are very intrigued — I think that cheese could follow yogurt,” he says. “I would not be surprised to see more entries in that category in the near future.”

Other cheeses emerging from Wisconsin include one-of-a-kind creations.

Mike Gingrich, co-owner of Uplands Cheese Co., Dodgeville, Wis., started making his Pleasant Ridge Reserve in 2000 to capture the unique flavor properties in the milk from his dairy farm. The washed-rind, Beaufort-style cheese has since won Best of Show twice at the American Cheese Society cheese contest and received several other awards.

“I thought we could produce a unique cheese, but I never realized how receptive this market would be,” Gingrich says. Uplands Cheese produced about 70,000 pounds of Pleasant Ridge Reserve last year — more than 10 times as much as it did during its first year in business.

New cheese and dairy products continue to emerge from Wisconsin. In the last four years, DBIC has helped start-up companies and existing processors launch more than 50 new products.

“We are helping people develop American originals, even Wisconsin originals,” says Jeanne Carpenter, communications director, DBIC. “People always are looking for something new. The market for new good American original cheeses is endless.”

Carpenter says Wisconsin’s excellent dairy infrastructure makes it an ideal place for existing businesses to thrive and new ones to emerge.

“We have the best dairy infrastructure in the United States. There are lots of organizations to help, a good milk supply, lots of veterinarians and scientists,” Carpenter says. “I think other states are envious of the assistance our state offers dairy processors.”

Gingrich, who moved his family from California to Wisconsin in 1978 partially because of Wisconsin’s strong rural, family farm-based culture, agrees.

“The infrastructure for dairying is excellent,” he says. “Cheese plants are not too far away, and you have the opportunity to sell to three or four cheese plants rather than just one.”

He adds that regulations also tend to be more dairy-friendly in Wisconsin than in other states.

“We haven’t had a lot of trouble with regulations, compared with some of the rules in western states with water use, being close to living areas, some of the nightmares dairy people have to deal with in other states,” he says. “The whole regulatory climate in Wisconsin is fairly supportive of the small dairy operator.”

Wisconsin’s strong infrastructure and long-standing tradition for cheesemaking also have attracted investors from outside the country. Earlier this year two Canadian companies, Saputo Inc. and Agropur, acquired major Wisconsin companies Alto Dairy Cooperative and Trega Foods Inc., respectively. Arla Foods of Denmark also recently announced it will invest $15 million in its Hollandtown, Wis., cheese plant which it acquired in 2006.

“Increasing numbers of international investors in the dairy industry are recognizing the value of Wisconsin’s infrastructure of more than 1,300 licensed cheesemakers, equipment manufacturing capabilities, dairy producers, unequaled availability of training and research resources,” Geoghegan says.

“We have seen unprecedented growth and expansion in our cheesemaking infrastructure,” he adds. “More than 30 projects have been completed in the past four years. More than $1 billion has been invested by producer and processing segments of the industry in the past five years.”

And while much focus has been on specialty cheese, Legreid says commodity cheese also has found room to grow in Wisconsin.

“I think we will see companies here in the state continue to find an appropriate market, whether it’s on the commodity side or the specialty side,” Legreid says. “There’s room to grow on the commodity side also. We need both.”

John Umhoefer, executive director of the Wisconsin Cheese Makers Association, says the state’s commodity cheese industry often is overlooked.

“There’s been good press on the number of start ups and new cheeses that have been created. Another untold story is the fact that even our high volume cheeses are not ordinary,” he says. “They’re always geared to specific functionality, specific formulas that make them really the high end in the commodity market. Larger volumes still drive the cheese sales in Wisconsin.”

While California again is nipping at Wisconsin’s heels, approaching it in cheese production volume, the mood in America’s Dairyland is more optimistic these days.

“We’re hearing stories that California is supposed to overtake us in cheese production,” Legreid says. “With milk production increasing and plant capacity increasing, that may not happen for a while.”

Umhoefer adds that with Wisconsin dairy farmers increasing milk production 9 percent in the last three years, the future of the state’s dairy industry looks promising.

“In general I believe Wisconsin has its swagger back,” he says. “We’ve gone from an industry questioned for its ability to survive to one that’s growing quickly. It’s really back to driving the industry.”

CMN

WASHINGTON — Congressional conferees have reached a tentative agreement on a spending framework for the new Farm Bill and say they will have a final bill completed by early May.

The tentative agreement opened the way for another short-term extension of the 2002 Farm Bill through the end of April. Insiders say one more two-week extension is expected to bring the legislation to completion.

“This agreement increases the chance that Congress will pass a new Farm Bill this year,” says Ruth Saunders, senior director of policy and legislative affairs, International Dairy Foods Association. “However, it’s still unclear whether the changes being considered will be acceptable to the administration, which has an outstanding threat to veto the bill if it doesn’t include sufficient reforms.”

The new framework adds an additional $861 million for nutrition programs over 10 years. By reducing crop subsidies and other producer funding to offset the funding shift, conferees have agreed to allocate two-thirds of Farm Bill resources to nutrition.

“It’s not just a Farm Bill,” says Senate Agriculture Committee Chairman Tom Harkin, D-Iowa. “This is a farm and a food and an energy bill.”

However, President Bush — who has threatened to veto the bill on numerous occasions —heavily criticized the deal in a press conference held in the White House Rose Garden. He referred to the proposed Farm Bill as “massive” and “bloated.”

“The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers,” Bush says. “America’s farm economy is thriving, the value of farmland is skyrocketing, and this is the right time to reform our nation’s farm policies by reducing unnecessary subsidies.”

Bush also called for legislation that does not include new tax provisions.

CMN

SALINAS, Calif. — Monterey Gourmet Foods has assumed full ownership of Sonoma Foods.

Monterey Gourmet Foods acquired 80 percent ownership of Sonoma Foods in 2005. As a part of the transaction, Monterey Gourmet Foods will pay an estimated $2.4 million for the remaining 20 percent interest, intangible assets, severance and inventory. Monterey Gourmet Foods CFO Scott Wheeler says that with full ownership of Sonoma Foods, his company will implement cost savings programs expected to save Monterey Gourmet Foods $700,000 annually.

“We are very pleased to have gained full control of the popular Sonoma Cheese brand,” says Eric Eddings, president and CEO, Monterey Gourmet Foods. “Sonoma Cheese brand equity has grown among our customers; however, critical production and procurement decisions created operating losses.”

Eddings say his company intends to focus on Sonoma’s core cheese business and will return the brand to a positive cash flow before any product line extensions are made. Other planned changes include: consolidation of major operations, execution of a brand package conversion that is expected to reduce waste by 25 percent and addition of the California Milk Advisory Board seal to product packaging. In addition, Sonoma’s executive leadership has been released from their employment contracts, which is expected to reduce costs by $500,000 per year.

Monterey Gourmet Foods also has announced financial results for the first quarter of 2008, which ended March 31. Officials say first quarter net revenues are estimated between $24 and $25 million, including approximately $1 million from Sonoma Foods. Revenues for the first quarter in 2007 were $24.7 million, including $2 million from Sonoma Foods.

“We believe in the underlying value of Sonoma Foods and our abilities to improve the unit’s performance,” Eddings says. “Today with solid sales and marketing efforts, over two-thirds of our business is growing revenue profitability. With the impact of our operational changes, we believe Monterey Gourmet Foods will deliver stronger revenue growth and margin improvement.”

CMN

MADISON, Wis. — Panelists at the 2008 International Cheese Technology Exposition this week had a message for cheesemakers: If you aren’t recapturing some value from your whey stream then you need to start doing so now.

The session titled “Advanced whey marketing,” was hosted by the Wisconsin Center for Dairy Research (CDR), Wisconsin Milk Marketing Board (WMMB) and Wisconsin Cheese Makers Association. K.J. Burrington, coordinator of dairy ingredients and applications, CDR, was the seminar moderator.

Jerry Dryer, editor, Dairy & Food Market Analyst, and chief market analyst, Rice Dairy LLC, led off the half-day session. He notes that all cheesemakers felt the squeeze of record-high whey prices last year since they are tied to the federal milk price formulas.

“Whether your recover any value from that whey or not, you need to pay for the value of the whey that was in the milk that arrived to the plant,” Dryer says.

Matt Mathison, vice president of technical services, WMMB, notes that cheesemakers are paying for the value of their whey byproduct, regardless of whether or not they are taking action to recapture that value. Mathison says that for every $0.01 per pound increase in the value of whey, the Class III milk price increases by $0.0586 per hundredweight. When whey prices hit $0.70 per pound last year, it was increasing the Class III price by $2.81 per hundredweight.

“If you’re not able to recapture some of that, it has a significant impact on the bottom line,” Mathison says.

WMMB currently is working on a whey processing research project that will help Wisconsin dairy companies make strategic business decisions on whether to enter the whey processing business. The white paper will develop a program to estimate engineering costs, identify ongoing operative costs, develop a revenue stream model and calculate the return on investment. Data from the study is on schedule to be released this summer.

“You are going to be paying for the whey in the milk whether or not you get any revenue out of it,” Dryer adds. “You need to look at any and all alternatives to generate some revenue out of that whey stream and help recover your milk costs.”

In 2007, prices for dry whey hit all-time highs and averaged nearly $0.60 per pound. This was sharply higher than the 2006 average of approximately $0.34 per pound. Dryer says the 2007 price levels were too high to be sustainable and predicts that prices will return to $0.40-.45 per pound. However, he predicts that price volatility will be the new norm with high risk and significant shifts in price.

Dryer says the good news is that the whey market is not a short-term fad. He points to emerging research that is showing functional benefits of dairy proteins in a number of areas, including cardiovascular health, infant nutrition and immune system health. Because of this, he says this sector has huge potential.

“It seems to me that looking at all those uses and applications for whey, the demand for all whey products will remain relatively high and will continue to grow,” Dryer says.

Tom Petka, vice president and general manager, foods department, Mitsubishi International Corp., shared his insight from importing dairy proteins for Japanese customers who he says are among the most demanding customers in the world.

“The acceptance and use of U.S. whey products in Japan attests to the quality and performance of the product and supplier,” Petka says.

However, he notes that in order to be the global leader in whey products, U.S. producers need to improve in two key areas: packaging and flavor.

In terms of flavor, Petka says New Zealand and Australia often serve as the gold standard. Because those countries heavily rely on pasture-based grazing, their flavor profile is slightly different than that of U.S. products. In addition, he says the United States industry uses different product specifications and names than other countries.

In the area of packaging, Petka says the United State’s competitors use square bottom packages that stack easily and neatly. In addition, he says they have a rip-away outer liner. U.S. producers, he says, have been associated with seal failure and product leaks.

Additional areas that Petka says exporters must excel in to succeed include: consistent quality, traceability, functionality, suppliability, competitive pricing and technical support.

Petka also notes that the U.S. faces challenges compared to other suppliers due to the pricing structure. He notes that U.S. whey markets change weekly whereas Japan and other major buyers prefer to work with quarterly or even 6-month pricing systems.

Connie Cerdena, research fellow, Pepsico R&D Innovations Group, and Jim Stalder, senior research scientist, Frito Lay (a division of Pepsico), discussed what they are looking for from whey products.

“We have not been heavy users of dairy proteins in the past, but going forward the opportunity exists to integrate protein into our innovation pipeline,” Cerdena says.

She adds that in addition to a reliable supply chain, Pepsico is looking for whey products that are bland in flavor, readily dispensable in water, heat stable, low in lactose and high in protein. In addition, she says being a good source of calcium is a plus, as is having substantiated health benefits.

Cerdana says that U.S. products have a come a long way in the the past three years in terms of taste and quality; however, she says there still is room to improve. She says that in Pepsico’s testing, the best tasting whey did not originate from the United Stastes.

Annie Bienvenue, director ingredients technical support, U.S. Dairy Export Council (USDEC), agrees that the United States must improve its product quality, which she says is key to making the United States the premiere supplier of dairy protein products.

“It’s important for the U.S. to be quite aware of the quality and the consistency of the product that they send overseas,” Bienvenue says, noting that in her last trip to Asia she met with some unsatisfied customers.

“That’s going to be the key to the success — to be able to meet the needs and the demands of the customers over there,” she adds. “Our mission is to see the U.S. as the preferred supplier, not the supplier because we have stocks available, but because you really want to buy U.S. first.”

Bienvenue says having high quality and the research to back up functionality claims will allow the United States to reach the higher-return portions of the market, such as infant formulas.

Bienvenue also presented data regarding the current size of the global whey market and its future outlook. According to USDEC, global dry whey production was 2.925 million metric tons in 2006. The European Union is the largest producer of dry whey with 1.944 million metric tons in 2006; however, Bienvenue notes that the majority of the dry whey produced in the EU goes to domestic uses. The United States is the second-largest producer at 748,500 metric tons followed by Oceania with 129,000 metric tons.

When it comes to exporting, the United States is the leader with 337,200 metric tons in 2006 followed by the EU with 302,700 metric tons and Oceania with 99,600 metric tons. Key importers of dry whey are Southeast Asia, which accounts for 23 percent of the market, China (19 percent), Canada (9 percent), Mexico (6 percent) and Japan (6 percent).

Bienvenue says USDEC is forecasting that global demand will remain strong and will hit 1.2 million metric tons by 2011 — an increase of 260,000 metric tons vs. 2006. This will translate into a 2 to 5 percent annual growth rate with the majority of demand being driven by Asia.

CMN

By Rena Archwamety

MADISON, Wis. — Craig Benzel, director of marketing and corporate sales for Wisconsin’s Green Bay Packers, kicked off the first of two general sessions on marketing at the 2008 International Cheese Technology Exposition here Wednesday morning.

As headliner of the Advanced Cheese Marketing session, Benzel drew parallels between marketing a football brand and marketing a cheese brand. He highlighted the importance of maintaining a strong relationship with the customer.

“Our product is football,” Benzel said. “We have to understand the customer. What are their behaviors? How do they consume the Green Bay Packers?”

The Green Bay Packers brand is evolving and changing all the time as the world around the brand is changing, Benzel said. He explained that first, brand marketing helps the Packers to stay relevant and keep strong emotional relationships with the team’s fans and customers. Second, brand marketing is key to determining future growth opportunities.

“We are in the business of making football memories,” Benzel said, stressing the important emotional and social aspects of marketing the team’s tradition while finding new audiences among a younger generation as well as Hispanic and international fans.

The themes of getting to know the customers, meeting their demands and creating memorable experiences carried over to the cheese industry with two panel discussions on bringing the right product to market.

The first discussion featured challenges for cheese marketers and included panelists Mark Schleitwiler, vice president of operations, BelGioioso Cheese Inc.; Tim Omer, president, DCI Cheese Inc.; and Jed Davis, director of marketing, Cabot Creamery Cooperative.

The panelists stressed the importance of learning what your customers want and how they view your products.

Schleitwiler gave examples of how BelGioioso’s products have evolved to meet customer demand, such as pre-sliced and different sized packaging options, extended shelf life and grated products.

“We listened to our customers,” Schleitwiler said. “They wanted something that would last a little bit longer, perhaps a smaller pack size.”

Davis said companies should focus on sending messages that are meaningful to the group they are targeting.

“You need to be focused on a limited number of key messages,” he said. “If you start getting into 12 or 13 different points, you’re going to lose people.”

He said that Cabot’s use of its Vermont home base as a branding symbol can be helpful in some places where people are more familiar with the state, but less meaningful in marketing areas farther from the East Coast.

The panelists also described ways of creating positive experiences for customers to keep them excited about products.

Omer compared DCI’s practice of marketing many brands of specialty cheese to how different varieties of California wine were marketed in the 1970s and 1980s.

“I think (consumers) like the idea, the excitement, the romance of finding different brands,” Omer said. “A little treasure hunting goes on in the specialty cheese business.”

The panelists also said introducing the customer to the product and company through store demos is one of the best ways to market a product.

“We’ve found in-store demos to be quite successful,” Schleitwiler said, adding that BelGioioso offers the customers recipe books on how to use the product they just sampled.

“When we have had demos, we’ve seen upwards of a 20 percent increase for that week in that store,” Schleitwiler said. “It also keeps our product in the forefront. We have to constantly remind customers that our product is available.”

“We want people putting the cheese in their mouth,” Davis added. “If we can get someone to put that in their mouth, we’re halfway there to a committed customer for life.”

The final portion of the first general session featured buyer perspectives on marketing.

Panelists answered a series of questions on topics from supplier relations to gas prices, presented by the seminar’s moderator Dave Leonhardi, director of foodservice and education, Wisconsin Milk Marketing Board.

John Kesterke, category manager, dairy and appetizers, Gordon Food Service, mentioned the importance of providing solutions that customers ask for, which benefits both sides.

“The biggest challenge that we have, now more so than ever, is our customers are asking for a solution,” he said of Gordon’s role as a distributor as well as a buyer, which sometimes means also filling the role of a consultant. “Our customers are saying, help me stay in business, help me be profitable. Help me separate myself from my competition.”

The panelists also stressed the importance of understanding who the customers are and who will be using the products on the foodservice side.

“Some people have no idea what our menu is and what we can do in the kitchen,” said Timon Zander, purchasing manager, supply chain, Culver’s. “I want my suppliers to be engaged in my business.”

CMN

WASHINGTON — Milk production in the 23 major milk-producing states during March totaled 15.14 billion pounds, up 2.4 percent from March 2007, according to data released by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)

February revised production, at 13.94 billion pounds, was up 6.2 percent from February 2007. The February revision represented an increase of 23 million pounds or 0.2 percent from last month’s preliminary production estimate. February 2008 also was a day longer than February 2007 due to leap year.

NASS reports that estimated milk production for the entire nation in March was 16.46 billion pounds, a 2.0 percent increase compared to March 2007. There were an estimated 9.26 million cows on the nation’s farms in March, up 7,000 head from February and up 117,000 head from March 2007. Production per cow averaged 1,778 pounds in March, up 13 pounds from a year earlier.

Milk production in the entire United States in the first quarter totaled 47.55 billion pounds, up 3.2 percent from the January-March quarter last year (this year’s first quarter also includes an additional day). The average number of milk cows in the United States during the first quarter was 9.25 million head, 112,000 head more than the same period last year.

In the 23 major states, NASS says there were 8.44 million cows in March, up 9,000 head from a month earlier and up 141,000 head from March 2007. Production per cow in the 23 major states averaged 1,795 pounds in March, an increase of 12 pounds compared to March 2007.

California, the nation’s highest milk-producing state, produced 3.64 billion pounds in March, up 2.4 percent compared to March 2007. The gain was driven by an increase in the state’s cow numbers. California was home to 1.85 million cows in March, 3,000 head more than a month earlier and 47,000 head more than a year earlier. Production per cow in California averaged 1,970 pounds in March, 5 pounds less than a year earlier.

Wisconsin followed with 2.08 billion pounds of milk in March, a 1.7 percent increase compared to its production a year earlier. There were 1.25 million cows on Wisconsin dairies in March, 1,000 head more than a month earlier and 5,000 head more than a year earlier. Production per cow in Wisconsin averaged 1,660 pounds, 20 pounds more than a year earlier.

New York and Idaho were the other two states that topped 1 billion pounds of milk in March. New York produced 1.05 billion pounds, 2.7 percent more milk than a year earlier. Idaho produced 1.03 billion pounds, 8.2 percent more milk than a year earlier.

CMN

MADISON, Wis. — Weyauwega Star Dairy, Weyauwega, Wis., was the top bidder for the grand champion cheese of the World Championship Cheese Contest at the International Cheese Technology Exposition (ICTE) auction held here this week. The cheese, Le Gruyere Switzerland, was made by Michael Spycher of Kaserei Fritzenhaus, Wasen, Switzerland, and was sold for $100 per pound or $7,500.

The auction raised a total of $65,823.50, and proceeds will support the World Championship Cheese Contest, student scholarships and a member education initiative.

Other purchases included: The first runner-up and Best of Class for Gorgonzola, made by CERPL Cheesemakers, Bologna, Italy, for DCI Cheese Co. was sold to Wisconsin Aging and Grading, Little Chute, Wis. The 9-pound Gorgonzola was sold for $195 per pound or $1,755.

The company also purchased an item comprising three cheeses from Friesland Foods Cheese, Steenderen, Netherlands, including the Edam Class winner made by Cheese Team Marum, the Gouda Class winner made by A. Muilerman and the Gouda, Aged Class winner made by B.J.H. Slotboom. The 141 pounds of cheese sold for $22.50 per pound or $3,172.50.

In addition, Wisconsin Aging and Grading purchased an item consisting of five cheeses — the Flavored Soft, Semi-soft Sheep’s Milk and Mixed Milk Cheeses Class winner made by Brenda Jensen of Hidden Springs Creamery, Westby, Wis., the Surface Ripened Sheep’s Milk and Mixed Milk Cheeses Class winner made by Tom Torkelson of K & K Cheese, Cashton, Wis.; the Semi-soft Sheep’s Milk and Mixed Milk Cheeses Class winner made by Cooperativa Quesera Manchega of La Alberca de Zancara, Spain; the Hard Mixed Milk Cheeses Class winner made by Rod Volbeda of Willamette Valley Cheese, Salem, Ore.; and the Hard Sheep’s Milk Cheeses Class winner made by Team Atalanta of Alimentias EMC, El Puerto de Santa Maria, Spain. The 50 pounds of cheese sold for $17.50 per pound or $875.

From Kaserei Guntershausen, Guntershausen Switzerland, Bernhard Naf’s 220-pound Emmentaler — the second runner-up and Best of Class for Rinded Swiss Style Cheese — was sold to Great Lakes Cheese, Hiram, Ohio, for $9 per pound or $1,980.

Great Lakes Cheese also purchased an item comprised of the Blue Veined Exterior Molding Class winner made by Marin French Cheese Co., Petaluma Calif., and the Blue Veined Class winner made by Rob Richter of Seymour Dairy Products, Seymour, Wis. The 23 pounds of cheese sold for $260 per pound or $5,980.

Spaulding & Associates, Brighton, Mich., purchased an item consisting of the Cheddar, Mild Class winner, made by Jim McClimans of Meister Cheese Co., Muscoda, Wis.; and the Cheddar, Aged 1-2 Years Class winner, made by Roger Larson of Maple Leaf Cheese Co-op, Monroe, Wis. The 41-pound Mild Cheddar and 26-pound English Hollow Cheddar sold for $50 per pound or $3,350.

The Cheddar, Sharp Class winner was purchased by Cargill, Wayzata, Minn. The 42-pound cheese was made by Parmalat Canada Ltd., Winchester, Ontario, and was sold for $60 per pound or $2,520.

DSM Food Specialties, Parsippany, N.J., purchased an item comprising two Cheddars made by Land O’Lakes, Kiel, Wis. — the 40-pound Cheddar, Medium Class winner and the 40-pound Aged Cheddar Class winner. The cheeses were sold for $70 per pound or $5,600.

T.C. Jacoby & Co., St. Louis, Mo., purchased an item consisting of two Bandaged Cheddars, including the 22-pound Bandaged Cheddars, Mild to Medium Class winner made by Chris Renard, Rosewood Dairy Inc., Algoma, Wis.; and the 20-pound Bandaged Cheddar, Sharp Class winner. The cheeses sold for $50 per pound or $2,100.

Chr. Hansen, Milwaukee, Wis., purchased the Monterey Jack Class winner, made by Southwest Cheese Co., Clovis, New Mexico. The 41 pounds of cheese sold for $50 per pound or $2,050.

The company also purchased the Marbled Curd Cheese Class winner made by Gregg Palubicki of Alto Dairy Cooperative. The 40-pound Colby Jack was sold for $45 per pound or $1,800.

In addition, the company purchased the Feta Class winner, made by Tage Christiansen, Nordex Foods A/S, Norager Denmark, and the Feta, Flavored Class winner made by Kenneth Jensen, Saedager Dairy, Hobro, Denmark. The 30 pounds of cheese sold for $35 per pound or $1,050.

The Colby and Pepper Flavored American Style Cheeses were purchased by Hydrite Chemical, Brookfield, Wis. The 43-pound Colby Class winner was made by Ahmet Maksic, Glanbia Foods, Twin Falls Idaho, and the 43-pound Pepper Flavored American Style Cheeses Class winner was made by Mirsad Zuko, also of Glanbia Foods. The cheeses were sold for $50 per pound or $4,300.

Chicago Mercantile Exchange (CME), Chicago, Ill., purchased the Rindless Swiss Style Cheese Class winner and the Cottage Cheese Class winner. The 100-pound Rindless Swiss was made by Don Klotzbach of Swiss Valley Farms, Monona, Iowa, and the 18-pound Small Curd Cottage Cheese, 2 percent also was made by Swiss Valley Farms, Cedar Rapids, Iowa. The item sold for $10 per pound or $1,180.

CME also purchased an item comprised of three spreadable cheeses — the Cold Pack Cheese Class winner made by Ed Blascak, Bel Brands USA Inc., Kaukauna, Wis.; the Spreadable Cheeses Class winner made by Agropur Fine Cheese Division, Quebec, Canada; and the Flavored Spreadable Cheeses Class winner made by Erin Whitman, Family Fresh Pack LLC, Belleville, Wis. The 33 pounds of cheese sold for $15 per pound or $495.

From Sorrento Lactalis, Nampa, Idaho, Emet Parrish’s Whole milk Mozzarella, low moisture — winner of Best in Class for Mozzarella — was purchased by Danisco, New Century, Kan. The 10-pound cheese sold for $120 per pound or $1,200.

Danisco also purchased an item comprised of three cheeses — the String Cheese Class winner made by Rizo Lopez Foods Inc., Riverbank, Calif.; the Quesos Frescos Class winner made by Roberto Encarnacion of Tropical Cheese Industries, Perth Amboy, N.J.; and the Quesos Para Fundir Class winner made by Jamie White of Torkelson Cheese Co., Lena, Ill. The 30 pounds of cheese sold for $15 per pound or $450.

The company also purchased Best of Class winner in the Provolone, Mild category. The 12-pound cheese was made by Land O’Lakes, Denmark, Wis., and sold for $270 per pound or $3,240.

In addition, Danisco purchased six Goat’s and Sheep’s Milk cheeses — the Soft Goat’s Milk Cheeses Winner made by Niana Dunnam of Montchevre Betin Inc., Belmont, Wis.; the Flavored Soft Goat’s Milk Cheeses Class winner made by Mike Santos, Woolwich Dairy, Ontario Canada; the Semi-soft Goat’s Milk Cheese Class winner made by Cedar Grove Cheese, Plain, Wis.; the Flavored Semi-soft Goat’s Milk Cheese Class winner made by Sid Cook, Carr Valley Cheese Co., La Valle, Wis.; Soft Sheep’s Milk & Mixed Milk Cheeses Class winner made by Dave Zielazowski, Lactalis USA Inc., Merrill, Wis.; and the Surface Ripened Goat’s Milk Cheeses Class winner made by Rose Parsons, Coach Farm Inc., Pine Plains, N.Y. The 70 pounds of cheese was sold for $10 per pound or $700.

Cheese Market News, Middleton, Wis., purchased the Mozzarella, Part Skim Class winner made by Steven Scott of Empire Cheese Inc., Cuba, N.Y. The 12-pound cheese sold for $160 per pound or $1,920.

The Provolone, Aged Class winner, made by Steven Tollers of Burnett Dairy Cooperative, Grantsburg, Wis., was purchased by Rice Dairy, Chicago, Ill. The 12-pound Aged Provolone sold for $220 per pound or $2,640.

MCT Dairies, Millburn, N.J., purchased an item comprised of four cheeses — the Baby Swiss Style Class winner made by Ake Dahl of Arla Foods Kalmar, Kalmar, Sweden; the Havarti Class winner made by Torben Pradsgaard, Arla Foods Nr. Vium Mejeri, Videbak, Denmark; the winner of the Havarti, Flavored Class made by Arla Foods Taulou Mejeri, Fredericia, Denmark; and the winner of the Pepper Flavored Cheeses (Other Styles) Class made by Arla Foods Hollandtown, Kaukauna, Wis. The 117 pounds of cheese sold for $21 per pound or $2,457.

From Formaggio Italian Cheese, Hurleyville, N.Y., Anthony Mongiello’s Fresh Mozzarella Bocconcini and Smoked Fresh Mozzarella were purchased by Northern Wisconsin Produce, Manitowoc, Wis. The 12-pound Fresh Mozzarella Class winner and the 10-pound Smoked Cheeses Class winner sold for $20 per pound or $440.

Grundfos, Bjerringbro, Denmark, purchased an item comprised of the Open Class Semi-soft Cheeses winner made by Markus Oswald, Berglandmilch/Schardinger, Pasching, Austria, and the Open Class Hard Cheeses winner made by Obersteirische Molkerei, Knittelfeld, Austria. The 18-pound Schardinger Amadeus and the 15-pound Erzherzog Johann sold for $13 per pound or $429.

R. Mueller Service and Equipment, Monroe, Wis., purchased an item comprised of three cheeses including the Brick, Muenster Class winner made by Steve Stettler of Decatur Dairy Inc., Brodhead, Wis.; the Smear Ripened Soft & Semi-soft Cheeses Class winner made by Andreas Streule of Kaserei Uzwil, Uzwil, Switzerland; and the Smear Ripened Hard Cheeses Class winner made by Roth Käse USA Ltd., Monroe, Wis. The 43 pounds of cheeses sold for $60 per pound or $2,580.

Jana Foods, Secaucus, N.J., purchased an item comprised of three Italian-style cheeses including the Flavored Hard Cheeses Class winner made by Mike Matucheski of Sartori Food Corp., Antigo, Wis.; the Ricotta Class winner made by Mark Federico of Providence Specialty Products, Providence, R.I.; and the Parmesan Class winner made by Australian Cooperative Foods, Lidcombe, Australia. The 52 pounds of cheese sold for $30 per pound or $1,560.

The Pasteurized Process Cheeses Class winner, made by AMPI, Portage, Wis., was purchased by Custom Fabricating and Repair, Marshfield, Wis. The 10-pound cheese sold for $250 per pound or $2,500.

CMN