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Cheese designed for the grill gaining in sales, recognition

Jan. 11, 2019

By Rena Archwamety

MADISON, Wis. — There’s classic grilled cheese — a slice of American between buttered toast — and there’s cheese for grilling — a slab or round of cheese especially designed to throw on the grill, cook and eat, no bread required.

Grilling cheeses are a very small segment (0.02 percent) of the cheese category in the United States, but they are demonstrating strong growth, according to IRI data courtesy of Dairy Management Inc. (DMI). During the 52 weeks ending Dec. 2, 2018, sales of grilling cheeses rose 9.1 percent by volume, driven largely by the Finnish-style Juustoleipa variety, which DMI reports rose 36.2 percent during this period.

“Juustoleipa is really deep-fried cheese without batter and without deep frying,” says Chad Galer, director of food safety and product innovation for the National Dairy Council, which is managed by DMI. “It’s not going to be a health and wellness trend, but it’s really ‘cheese first,’ with a positive halo of attributes.”

Galer adds that experience-driven consumers are looking for foods like grilling cheeses to enjoy.

“Consumers are asking questions and talking about it,” he says. “They want to try cheese in different ways. They want to experience the great taste of grilled cheese, with the caramelized butter flavors, without the bread.”

Another style of grilling cheese, Halloumi, has not seen as much growth in the United States but has rapidly escalated in popularity abroad. The traditional Mediterranean cheese, made from a mixture of sheep’s and goat’s milk, has been made on the island Cyprus for hundreds of years. Its higher-than-normal melting point makes it ideal for grilling and frying.

“The demand for Halloumi cheese is on the rise and the popularity is not foreseen to decline anytime soon,” notes a global market insight report on Halloumi recently published by market research firm Fact.MR. “Producers in Cyprus are focusing on increasing the total production, whereas key players are investing in R&D to keep up with this overwhelming demand.”

• Juustoleipa

Pasture Pride Dairy, Cashton, Wisconsin, makes six varieties of its flagship grilling cheese “Juusto,” including a garlic variety it introduced late last year, sourcing its milk from local Amish farms. It also makes a goat’s milk variety called “Guusto.” Pasture Pride first developed its Juusto after owner and cheesemaker Kevin Everhart attended a 2002 seminar on Juustoleipa at the Wisconsin Center for Dairy Research.

“With most cheeses, you add bacterial cultures to it, which brings the pH level down and allows it to break down the milk,” Everhart says. “Juusto doesn’t use any cultures in it, so it doesn’t melt as easily.”

Within 24 hours of the cheesemaking process, the Juusto is baked, packaged and shipped to stores all across the United States as well as to some international customers. The cheese is designed to be heated again before it is served — on a stovetop, in the oven, on a grill or microwaved — and lends itself to a variety of possible applications.

“In Scandinavia, Juustoleipa is made from reindeer milk or combinations with goat’s and cow’s milk, and it is typically a breakfast cheese,” says Mary Bess Michaletz, national sales director, Pasture Pride Dairy. “Here it is used for entertaining, more of an event cheese. Folks in the U.S. like to see different flavors, paralleling the national trend of flavored cheeses.”

She notes that backpackers can bring Juusto along when camping to cook over an open fire, or it can be toasted quickly at home on a pancake griddle.

“If you throw it in hot oil, it’s almost as if you drenched it in panko — it forms a beautiful crispy layer,” Michaletz says. “Our next recipe card is going to be ‘Juusto Fondue.’”

• Halloumi-style

Ballard Family Dairy and Cheese, Gooding Idaho, makes a Halloumi-style grilling cheese from its own Jersey cow milk. Owners Steve Ballard, who runs the dairy farm side, and his son Travis, who is the cheesemaker, developed the recipe for their “Idaho Grillin’ Cheese” around 2006 after attending a short course at University of Wisconsin River Falls.

“We’re on about the 10th generation of perfecting the recipe, and demand is increasing,” Steve Ballard says. “We started making 100 pounds a month, then 200, and now we’re a little lower than 2,000 pounds a month.”

Travis Ballard says they developed a local market for Idaho Grillin’ Cheese through farmers’ markets, getting it out in public and talking to restaurants. Currently 85 percent of their market is in Idaho, though it also is shipped to places like Beecher’s Cheese in Seattle. While the Ballards have spent years working to develop a market for their cheese and teach people how to use it, they also have benefitted from recent trends favoring grilling cheeses.

“Within the last year or two years, people have been using Halloumi,” Travis Ballard says. “By using Halloumi, they also are using our cheese as a local substitute. Grilling cheeses have been coming up in the last couple of years. More people have had it and know what it is.”

Idaho Grillin’ Cheese differs from Juusto in that it does use some cultures in the cheesemaking process, and it isn’t baked before packaging.

“We use cultures because we want a little more shelf-stable product without salting it so much,” Steve Ballard says. “The cool thing about it, since you’re doing the finishing of the product on the stove itself or in the barbecue, that’s where it picks up additional flavors.”

The cheese can be diced and skewered with cherry tomatoes to grill on the barbecue, picking up a roasted tomato flavor, or tossed in a bowl with salt, pepper and a little balsamic vinegar. Travis Ballard says he has seen it used by chefs in a number of creative applications.

“Grillin’ Cheese tacos — it can be grilled up and be a vegetarian-type deal — we have a restaurant that does that. They also do a lot of appetizers, and a few are using it as more of a main course. One puts the Grillin’ Cheese on top of meat to make into a sandwich, adding a different texture,” he says. “It’s a really fun cheese for chefs and consumers to enjoy. It offers a lot of different experiences, and for me, that’s what food is about, the experience and enjoyment. One of our chef friends calls it ‘the solution to world peace.’”

• New varieties

Two new cheeses for the grill are set to appear on U.S. store shelves this year, as Champignon North America is launching Rougette Bonfire Grilling Cheeses in two varieties at the Winter Fancy Food Show in San Francisco Jan. 13-15.

The product line includes a mild and creamy soft-ripened cheese, and a semi-soft cheese marinated in herbs which comes in a ready-to-grill pan.

Made in Bavaria, Germany, by Käserei Champignon, these two cheeses have been available under the Rougette brand in Germany for several years — becoming so popular that there have been many product extensions. The “Bonfire Grilling Cheese” sub-brand was created for the U.S. market to help describe how the cheese can be used.

“I think Halloumi has been a mainstay for grilling cheeses, but in some markets, it’s more of an ethnic cheese, so unless people know about Greek cheeses, they’re not as aware,” says Flynne Wiley, CEO, Champignon North America. “As we’ve seen more interest in the market, and our success in launching these items in Bavaria, we thought maybe this is the time. We’ve done market research and see interest in these cheeses, which are very different from Halloumi.”

Wiley describes the round mild and creamy Grilling Cheese as a “crisp Brie” that uses special cultures that allow the cheese to retain its form when grilled.

“The rind gets slightly crispy, and it’s slightly melted inside. It’s very mild, not very salty like Halloumi or the chewy texture like Juustoleipa,” she says.

The semi-soft Marinated Grilling Cheese that comes with a pan also is not too salty with a mild, approachable palate, Wiley says.

“If retained longer in the pan on a grill, it melts and can be used as a dip,” she says. “It can be diced when cold and heated, retaining that form. It depends on how long it’s heated up — it can just be warmed, or heated into a dip.”

Both cheeses come two to a pack and are designed for entertaining.

“The idea is to bring people around the grill and eat cheese in a new way,” Wiley says. “The responses we’ve gotten so far run the gamut. It can be used as an appetizer — they are fairly large pieces to eat in one serving — but people say the (soft ripened cheese) patty would be a great vegetarian option, or an indulgent stack of cheese on a burger. You can cut it and put it on salads, with the creamy texture and crunchy rind, or take it off the grill and serve it with jam and honey at the end of a meal.”

The marinated semi-soft Rougette also has a variety of options, Wiley says.

“It can be an appetizer, a dip topped with cucumbers and onions. Or you can use it as a base and layer with grilled vegetables, cut into it and serve it as a main course. We also have uses where you can pair it on a skewer with watermelon for a nice summer-season recipe.”

Wiley says Champignon has had interest already from some retailers in Texas and hopes to see the products go across the entire United States. The company will be doing in-store demos as well as digital promotions on how to use the cheeses, with May as a target launch date in stores.

“We’re very excited to see our Rougette Bonfire Grilling Cheeses bring people together around the grill this summer,” Wiley says. “Now grill masters and cheese lovers alike can enjoy specialty cheeses in a totally new way.”

CMN


Farmer aid deadline extended, SNAP benefits will continue

Jan. 11, 2019

WASHINGTON — While the ongoing federal government shutdown is causing delays in various market reports and increasing market uncertainty, USDA is allowing some flexibility for certain programs.

USDA recently announced it will extend the deadline for farmers to apply for Market Facilitation Program payments to help offset losses they are experiencing as a result of trade tensions between the United States and other countries, particularly China. Applications were due Jan. 15, but the department’s Farm Service Agency (FSA), which operates the program, closed on Dec. 28 after the agency ran out of funding because of the partial shutdown of the federal government.

U.S. Agriculture Secretary Sonny Perdue says the application deadline will be extended “for a period of time equal to the number of business days FSA offices were closed, once the government shutdown ends.”

At the direction of President Donald Trump, Perdue this week also announced a plan to ensure that low-income Americans have access to the nutrition they need by providing full benefits for participants in USDA’s Supplemental Nutrition Assistance Program (SNAP) for the month of February.

When USDA’s funding expired Dec. 21, SNAP benefits for January were fully funded. States already have received that money and have been distributing it to participants, USDA notes. Since the lapse in appropriations, USDA has been reviewing options available to the department for funding February benefits without an additional appropriation from Congress.

To protect SNAP participants’ access for February, USDA is working with states to issue February benefits earlier than usual. USDA will rely on a provision of the just-expired continuing resolution (CR), which provides an appropriation for programs like SNAP and child nutrition to incur obligations for program operations within 30 days of the CR’s expiration. USDA will be reaching out to states to instruct them to request early issuance of SNAP benefits for February. States will have until Jan. 20 to request and implement the early issuance.

USDA also has ensured the other major nutrition assistance programs have sufficient funding to continue operations into February. The child nutrition programs, including school meals and after-school programs, have funding available to continue operations through March. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) has prior year funding that USDA will begin to provide states this week to facilitate February benefits. Other Food Nutrition Service programs, which provide assistance to the nation’s food banks, the elderly and tribal nations, may continue to utilize grant funding provided prior to the lapse in appropriations. Commodity deliveries to those programs will continue.

Meanwhile, as the shutdown approaches the end of its fourth week, work on National Agricultural Statistics Service (NASS) and Office of the Chief Economist-World Agricultural Outlook Board (OCE-WAOB) reports have been suspended since Dec. 22 and remain suspended. Given the lead time required for the analysis and compilation of Crop Production, Crop Production-Annual, World Agricultural Supply and Demand Estimates (WASDE), Grain Stocks, Rice Stocks, Winter Wheat and Canola Seedings, and Cotton Ginnings reports, those reports will not be released today as originally scheduled even if funding is restored. The date of all NASS and OCE-WAOB releases will be determined and made public once funding has been restored, USDA says.

This week, U.S. Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Agriculture Committee, wrote a letter to USDA to raise concerns and request information regarding the impact of the government shutdown on farmers, families and rural communities.

“I am deeply concerned that the shutdown is having a devastating impact on USDA’s operations, hurting many American farmers and families,” Stabenow says.

Stabenow raises a number of questions, including how the shutdown would affect the implementation of the 2018 Farm Bill, which the president signed into law a day before the government shutdown began.

“Careful and quick implementation of the farm bill is critical to the well-being of American farmers and families,” Stabenow says. “This shutdown will greatly slow implementation of this important bill, making it even more difficult for farmers to make planting decisions for this new crop year.”

The letter also highlights a number of impacts the government shutdown is having on USDA customers across the country, including the closure of thousands of FSA county offices, preventing farmers from signing up for farm bill programs, applying for loans and getting necessary information for their farming operations.

The Center for Science in the Public Interest (CSPI) this week notes that the ongoing federal shutdown has halted FDA’s regular food inspections.

“That puts our food supply at risk. Regular inspections, which help stop foodborne illness before people get sick, are vital,” says Sarah Sorscher, CSPI deputy director of regulatory affairs. “Work to finish rules under the Food Safety Modernization Act has also ground to a halt, impairing efforts to improve produce safety, recall communication and outbreak tracing.”

While FDA claims that it will continue to conduct “for cause” inspections and pursue criminal and civil investigations related to “imminent threats to human health or life,” the agency has posted no new warning letters since the shutdown began more than two weeks ago, CSPI notes.

“That raises concerns that enforcement activities effectively may have stopped,” Sorscher says, noting FDA’s food center is probably more affected by the shutdown than any other part of FDA, due to the center’s very limited dependence upon user fees.

In a tweet this week, FDA Commissioner Scott Gottlieb says, “We’re taking steps to expand the scope of food safety surveillance inspections we’re doing during the shutdown to make sure we continue inspecting high risk food facilities.”

CMN


Trade deals, trade wars could impact dairy exports in 2019

Jan. 11, 2019

WASHINGTON — As the new year starts amid a federal government shutdown, the dairy industry continues to keep tabs on the Trump administration’s policies with trading partners to guide expectations on dairy exports in 2019.

U.S. dairy exports January-October 2018 were up 4 percent by value and 15 percent by aggregate volume over the same period in 2017, according to the latest export numbers available from USDA and the U.S. Dairy Export Council (USDEC). The November export report, which was expected to be released earlier this month, has been delayed due to the government shutdown.

In addition to the increase in exports, the U.S. dairy industry is making progress on a goal, “The Next 5 percent,” to build U.S. dairy exports from the equivalent of about 15 percent of U.S. milk solids to 20 percent, according to Matt McKnight, USDEC’s chief operating officer, in recent commentary published on USDEC’s blog. Through the first 10 months of 2018, U.S. dairy exports were equal to about 16.3 percent of U.S. milk solids, up from 14.7 percent in 2017 and a new record, McKnight notes.

Among the “signposts” that will shape U.S. dairy export opportunities and direction in 2019 are issues dealing with retaliatory tariffs as well as trade deals involving the United States as well as trade deals between U.S. competitors, McKnight says.

In its December U.S. export report, USDEC noted that in the four months since China put additional retaliatory tariffs in place, U.S. whey exports to China were down 36 percent, skim milk powder sales were down 54 percent, whole milk powder sales were down 97 percent and cheese exports were down 56 percent.

McKnight cites a report from Texas A&M’s Center for North American Studies that predicts U.S. dairy export losses from Chinese and Mexican retaliatory tariffs as high as $800 million per year, resulting in U.S. dairy farmers losing up to $2.8 billion per year due to lost sales and lower milk prices.

“We are hopeful for a resolution with Mexico, where the retaliatory tariffs are specifically related to U.S. Section 232 tariffs on steel and aluminum,” McKnight says. “China’s retaliatory tariffs, however, are related to much broader U.S.-China economic differences and likely will take more time to resolve.”

On the plus side, McKnight notes, U.S. and Chinese leaders have agreed to postpone additional tariff hikes that were set to kick in Jan. 1, and they have set a March 2 deadline to reach a deal and avert further escalation of the trade conflict.

“The retaliatory tariffs won’t grind all U.S. dairy exports to a halt and, on their own, do not doom growth aspirations,” McKnight says. “Indeed, U.S. suppliers have had some success redirecting products to other markets like Southeast Asia. But the tariffs make us less competitive in two critical markets and heighten the challenge of getting to The Next 5 percent.”

Trade deals also will have an impact on growing U.S. export dairy prospects, McKnight says.

The U.S.-Mexico-Canada Agreement (USMCA) will help strengthen U.S. dairy export prospects in North America, including mitigating Canada’s trade-distorting practices and tackling geographical indications, he says.

“Whether the beneficial provisions of USMCA foster U.S. dairy export growth in 2019 lies in part with the deal’s congressional approval and implementation,” which is not assured to be this year, McKnight says.

The Trump administration also has announced its intention to start talks with Japan, the United Kingdom and the European Union in 2019. Headway on new trade deals is important, McKnight says, because U.S. competitors are aggressively implementing them. The Comprehensive and Progressive Trade Agreement for Trans-Pacific Partnership (CPTPP) entered into force Dec. 30, and the new EU-Mexico trade agreement is expected to enter into force soon.

“One of the big questions for 2019 is: How quickly will markets shift in response to these competitors’ trade deals,” McKnight says. “The other big question is: Even thought trade negotiations can take considerable time to finalize, will we see U.S. progress in advancing talks with Japan and other markets to match or counter our competitors’ efforts?”

To read McKnight’s entire commentary, visit blog.usdec.org.

CMN




Sargento leads with innovation
Sunrise Balanced Breaks, Sargento Blends 3 Cheese Creamy Jack are latest new product introductions

By Kate Sander

PLYMOUTH, Wis. — This past year, Sargento Foods marked 65 years in business. Best known for its natural shredded, sliced and snack cheeses, the company also provides cheeses, appetizers and sauces to restaurants and other food manufacturers.

The company is led by Louis (Louie) Gentine II, the grandson of founder Leonard Gentine, who started the business with his friend and neighbor, Joe Sartori, in 1953. The Gentine family has solely owned the business since 1965.

Leonard Gentine set out to build a family business, but in the end, he created a “business family,” his grandson says.

“Hire good people and treat them like family was my grandfather’s motto,” Gentine says, noting that those words have been a pillar of the company’s foundation and an important contributor to its success. He adds that the company believes in treating its employees with “respect and trust, like your own son or daughter.”

Through its 65 years, the Sargento business family has grown to approximately 2,200 people at facilities in Plymouth, Elkhart Lake, Kiel and Hilbert, Wisconsin.

Annual revenues total more than $1.4 billion and are expected to continue climbing. With snacking a growing trend among U.S. consumers, Sargento Foods remains a category leader, studying what consumers want and need and offering innovative new items.

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116th Congress convenes as federal shutdown continues

Jan. 4, 2019

WASHINGTON — The 116th Congress is in session as a partial federal government shutdown continues.

As Democrats took control of the House on Thursday after eight years in the minority, members elected Nancy Pelosi, D-Calif., as the new Speaker of the House.

With the majority flip, Rep. Collin Peterson, D-Minn., now is the chair of the House Agriculture Committee after serving as ranking member under the Republican majority.

Meanwhile, in the Senate, Majority Leader Mitch McConnell, R-Ky., welcomed newly elected senators, which increased the Republican majority in that chamber.

House Democrats have said they plan to pass a bill to temporarily fund the federal government, but leaders on the Senate side indicate they will not pass any bills that do not have President Trump’s approval, news reports say.

The funding impasse largely centers on funding for a border wall between the United States and Mexico, with Trump demanding that $5 billion be included for the wall in any spending package Congress sends to his desk.

For the dairy industry, the shutdown has impacted the release of some market data, including the monthly Dairy Products report that was scheduled for release on Thursday.

USDA late last week released an updated assessment of how the lapse in federal funding will affect services and programs now that the shutdown has stretched into the new year.

While some services will carry on, others were discontinued Jan. 1 because available funds have been expended.

Certain USDA activities remain active because they are related to law enforcement, the protection of life and property, or are financed through available funding (such as through mandatory appropriations, multiyear discretionary funding, or user fees). During the first week of the shutdown, 62 percent of USDA employees have been either exempted or excepted from shutdown activities. If the shutdown continues, this percentage would decrease, and activities would be reduced as available funding decreases, USDA says.

Among the USDA activities that ceased Jan. 1 are:

• USDA Farm Service Agency county offices closed at the end of business Dec. 28, 2018.

• National Agricultural Statistics Service statistics, World Agricultural Supply and Demand Estimates report, and other agricultural economic and statistical reports and projections.

• Economic Research Service (ERS) Commodity Outlook Reports, Data Products, research reports, staff analysis, and projections. The ERS public website could be taken offline.

• Provisions of new rural development loans and grants for housing, community facilities, utilities and businesses.

• Recreation sites across the U.S. National Forest System, unless they are operated by external parties under a recreational special use permit, will be closed. While technically closed, many will still be physically accessible to visitors at their own risk, but without staffing at ranger stations and without access to facilities such as public restrooms.

• New timber sales.

• Most forest fuels reduction activities in and around communities.

• Assistance for the control of some plant and animal pests and diseases unless funded by cooperators or other non-appropriated sources.

• Research facilities except for the care for animals, plants and associated infrastructure to preserve agricultural research.

• Provision of new grants or processing of payments for existing grants to support research, education and extension.

• Most departmental management, administrative and oversight functions, including civil rights, human resources, financial management, audit, investigative, legal and information technology activities.

• Mandatory audits will be suspended and may not be completed and released on the date mandated by law.

CMN


CPTPP enters into force; USTR outlines Japan trade objectives

Jan. 4, 2019

OTTAWA, Ontario — The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force Dec. 30, 2018, among the first six countries to ratify the agreement — Canada, Australia, Japan, Mexico, New Zealand and Singapore. CPTPP will enter into force for Vietnam Jan. 14, 2019, and for the remaining countries — Brunei Darussalam, Chile, Malaysia and Peru — 60 days after they complete their respective ratification processes.

The 11 countries signed the CPTPP March 8, 2018, in Santiago, Chile. The agreement includes countries previously involved in the Trans-Pacific Partnership (TPP) agreement, minus the United States, which abandoned the TPP agreement soon after President Trump took office in early 2017. The CPTPP agreement incorporates many of the elements that were negotiated as part of the TPP, but with some differences, as participants agreed to suspend 22 items from the original TPP agreement as they concluded negotiations in January 2018.

The economies included in the CPTPP agreement represent 495 million consumers and account for an estimated 13.5 percent of world gross domestic product (GDP), worth a total of US$10.6 trillion.

Meanwhile, the United States has been planning to start bilateral negotiations with Japan. The Office of the United States Trade Representative (USTR) late last month released negotiating objectives for a U.S.-Japan trade pact.

The International Dairy Foods Association (IDFA) notes that Japan is U.S. dairy’s fourth-largest international market, representing sales of more than US$290 million. Several of the administration’s goals align with IDFA’s requests to USTR, specifically measures that focus on:

• Promoting equitable access to Japan’s agriculture market by eliminating practices such as discrimination toward U.S. agricultural goods, trade distortion and prices cutting activities by state-owned enterprises;

• Eliminating or reducing tariffs on U.S. agricultural products;

• Eradicating technical barriers to trade, such as by providing reasonable adjustment periods for U.S. import-sensitive agricultural products; and

• Preventing barriers in market access for U.S. products through improper use of Japan’s system for protecting or recognizing geographical indications.

IDFA adds that USTR included several other agricultural goals of interest to dairy companies, including:

• Engaging in close consultation with Congress on agricultural products before initiating tariff reduction negotiations;

• Promoting greater regulatory compatibility to reduce burdens associated with unnecessary differences in regulations and standards, including through regulatory cooperation when appropriate; and

• Providing for enforceable and robust commitments to sanitary and phytosanitary measures that build upon World Trade Organization rights and obligations.

The earliest day that official negotiations can begin is Jan. 20, according to Trade Promotion Authority rules. IDFA says it will remain engaged throughout the negotiations.

CMN


Emmi Roth acquires Great Lakes Cheese’s Seymour, Wis., plant

Jan. 4, 2019

FITCHBURG, Wis. — Emmi Roth is expanding with the acquisition of Great Lakes Cheese’s Blue cheese plant in Seymour, Wisconsin.

With the purchase of the Great Lakes Cheese plant, Emmi Roth will not only be able to expand its Blue cheese production, but also increase its capabilities to develop new Blue cheese products and packaging solutions.

“We believe in the Blue cheese category and see this as an opportunity to strengthen our position in the market,” says Tim Omer, Emmi Roth president and managing director. “This acquisition gives us access to a talented group of cheesemakers and provides us with additional resources to expand our current production and develop new Blue cheese products for our customers.”

Emmi Roth will assume ownership of Great Lakes Cheese’s Seymour factory, related land, production facility and equipment Feb. 28.

“We know Emmi Roth to be as passionate about cheese and as committed to its employees as we are,” says John Epprecht, vice president, Great Lakes Cheese. “They are well positioned to guide Seymour’s business and its dedicated workforce into the next stage of growth.”

Great Lakes Cheese’s Seymour plant currently employs 50 people; Emmi Roth will offer continued employment to all employees at the Seymour location.

This acquisition will grow Emmi Roth to four locations in Wisconsin, also including Monroe, Platteville and Fitchburg, employing nearly 300 people.

CMN



CMN’s annual round table:
Panelists share observations on emerging consumer trends

Dec. 28, 2018

MADISON, Wis. — Last week, panelists in Cheese Market News’ annual round table discussed their takes on international trade issues. This week the conversation continues with panelists looking at other issues including consumer trends, the use of the term “milk” in non-dairy products and the challenges of developing a stable and knowledgable dairy work force.

This year’s round table participants are:

• Blake Anderson, president and CEO, American Dairy Products Institute (ADPI), Elmhurst, Illinois;

• Alyssa Badger, director of operations, and manager, dairy market intelligence, HighGround Dairy, Chicago;

• Ralph Hoffman, president of Optimally, a Schuman Cheese dairy services agency, Fairfield, N.J.;

• Joe Moreda Jr., vice president, Valley Ford Cheese & Creamery, Valley Ford, California;

• Kathleen Noble, senior economist and research specialist, Blimling and Associates Inc., Madison, Wisconsin;

• Rob Vandenheuvel, senior vice president, member and industry relations, California Dairies Inc. (CDI), Visalia, California; and

• John Wilson, senior vice president and chief fluid marketing officer, Dairy Farmers of America (DFA), Kansas City, Kansas.

We thank each of our round table participants for taking time in the midst of busy schedules to provide written responses to our questions.

How can cheese and dairy companies reach out to customers who have increasing options for convenience, such as ready-to-consume items, online ordering and delivery services?

Anderson: Cheese and dairy companies need to be able to have their products available in all places people purchase food products and across all the distribution channels. Finding partners that can enable this will be the key.

Badger: An area where dairy has the potential to enhance buying interest lies in getting closer to the primary source of the product, i.e. traceability. The customer can feel better about sustainability involvement if they see a producer or farm name on their product and can associate their purchase with an individual.

As snacking continues to expand, dairy products need to be at the forefront of this trend, whether through grab and go milks, precut cheese slices, or drinkable yogurt. As grocery delivery expands, we must ensure that dairy is a go to, easily deliverable item that continues to make its way into consumer grocery carts — either physical or online.

Noble: Just about every time a consumer buys something online, it is an opportunity to sell dairy. Pizza order. Want double cheese? Amazon order. Want to toss M&Ms into the cart? Buying groceries. Want to browse our specialty cheese selection? The dairy industry needs to take a more proactive and dynamic approach to marketing to the increasingly online shopper.

Moreda: We strive to offer our customers convenient and affordable options to purchase our products. Our new retail shop offers a unique experience for locals, tourists and food enthusiasts. Our website has an online store where products can be purchased any time, including holiday gift packs. Our website also has a tab where people can go to find locations where they can find our products near them. In 2019, we will be launching a cheese club. Our social media and marketing campaigns keep consumers updated on all company happenings, including farmers markets schedules, special events, trade shows, conferences and many more. Small companies may be at some logistical disadvantages regarding maximizing convenience for consumers, but we strive to get the most out of our opportunities and are always looking for more.

What are some recent culinary trends or flavors you’ve seen that could incorporate, or be incorporated into, cheese and dairy products?

Anderson: Coffee (destination derived), teas (black & green), artisan chocolate and vanilla (destination derived), spice extracts ( for cheese), culinary salts, etc.

Moreda: Chefs are increasingly experimenting with new and innovative uses for cheese in food. Not only does this mean new flavors and ingredients, but also new applications. Mixing of different food groups, unconventional meals and different times of day. Thinking outside the box with items such as: Parmesan cheese crisps; mac ’n cheese waffles; mixing cheese with nuts, jellies, fruits, and veggies; cream cheese with eggs; cheese infused jalapeño peppers; and kale salad with cheese. Simple and clean ideas with a healthy claim are the goal.

Noble: Hot sauce. The American palate is spicier and Pepper Jack is far from a spicy punch.

Wilson: Much like we’re seeing in other food categories, we’re seeing a trend toward REAL foods as consumers want to know where their foods come from and are looking for more naturally occurring nutritional and wellness benefits versus products with added nutrients or processed ingredients. Cheese and other dairy foods offer high-quality nutrition, which gives them a real inherent nutrition story that resonates with consumers. Additionally, we’re continuing to see consumers have more and more interest in exploring global flavors and taste experiences, not only when dining out but also in the comfort of their home with more products at retail incorporating unique spices and sauces with Middle Eastern, African and Asian influence and flavor profiles.

FDA says it will be addressing the use of the term “milk” in non-dairy products that use soy, almond or other nondairy ingredients. How important to you believe this labeling issue is for the dairy industry? How can the dairy industry continue to “win” consumers over with dairy instead of these plant-based alternatives?

Badger: Consumer trends are changing, and placing emphasis on the unparalleled nutrition values that are derived from dairy products versus its plant-based competitors will remain an essential detail within marketing strategies. There lacks a necessary education component for buyers that have recently been bombarded by negative rhetoric toward animal husbandry and dairy products.

While it is important to address the term, it’s also important to remember that fluid milk sales face stiff competition elsewhere as well, including from bottled water and soda. Better branded, better looking fluid products, starting with but not limited to Fairlife milk, can be important to pursue as well.

Hoffman: Truth in labeling is always important for consumers, so they know what they are buying. Plant-based beverages labeled as “milk” have significantly fewer nutrients compared to real milk, which creates the potential for confusion by consumers who mistakenly believe that plant-based beverages are a nutritional equivalent to real milk. The dairy industry needs to continue promoting real milk and its nutritional benefits and debunk negative perceptions. I think it’s also worthwhile to educate consumers about the additional processing aids that are needed to process plant-based beverages compared to natural milk.

Noble: There’s nothing wrong with defending terminology, but in our estimation, it’s unlikely to slow the shift toward alternatives.

Vandenheuvel: First off, let me be clear that CDI strongly supports the enforcement of “standards of identity” when it comes to all dairy products. We take our responsibility seriously to ensure all the products we make adhere to federal and state nutritional and quality standards, and we expect our competing products on the store shelves that want to carry dairy names to be held to that same standard. As for winning over the consumers, there is no substitute for taste and quality, which must be a priority of any food marketer. Great care must be given to how our products are manufactured, handled, and ultimately marketed to make sure the customer is getting the best experience possible. Fortunately for dairy products, we can then combine that superior taste and quality with a great story to tell about the nutritional value of milk and dairy products. It must be an “all-of-the-above” strategy — superior taste, quality and nutrition. If we meet those three goals, I believe real dairy products will win in the end.

Wilson: We think consumers deserve to have accurate labeling and believe it’s misleading to label a plant- or nut-based product as “milk” when it doesn’t contain real cow’s milk. Regardless of where the labeling issue lands, as an industry, we need to focus on continuing to develop and deliver innovative, great-tasting products that meet consumers’ wants and needs.

Is pre-competitive product development beneficial to the industry? Should — and if yes, how can — the dairy industry work together to respond to consumer preferences and emerging trends with innovative new products?

Anderson: Pre-competitive product development as it applies to ingredients derived from dairy can be and is valuable to ensure consistency and efficacy for finished product developers. Ingredient manufacturers can work directly with finished goods manufacturers to develop innovative products and applications driven by consumer preference data and trends. The dairy industry trade organizations are beginning to realize the importance of this now and we are seeing more and more cooperation amongst the larger players like International Dairy Foods Association, National Milk Producers Federation, ADPI and Dairy Management Inc. (DMI).

Badger: According to the International Food Information Council’s 2017 Food and Health Survey, 55 percent of millennials say convenience is a top driver when buying food. This should spark innovation in packaging rather than having to focus on the anti-GMO trend. Homing in on utilizing recycled or sustainable packaging has the potential to displace negative rhetoric built into animal feed and antibiotics.

From a pre-competitive level, the dairy checkoff investment that DMI performs does continue to drive sales. Whether through incorporating greater cheese usage at fast food restaurants or other innovations, initial industry investments can be taken by individual dairy companies to push sales, benefiting everyone in the end.

Moreda: Pre-competitive product development through universities, industry associations, and organizations can be helpful in the overall advancement of the industry, including new product innovation. These serve as reasonable venues for the sharing of information, resources, and capabilities. However, it is reasonable for companies to want to keep direct product development projects in house, due to the competitive nature of the markets and the desire for growth.

Vandenheuvel: Yes, the industry can play an important role in helping to identify and support emerging trends and innovative new products. That is already happening with a growing percentage of our industry checkoff dollars. I do believe, however, that we need to consider how those support efforts are structured going forward. If the industry is making the investment to help individual companies innovate and ultimately go to the market with new products, I believe it is appropriate to ask those companies benefiting from the investment of the industry to return some of that value back to the industry. By doing so, those dollars can be re-used on additional investments in innovation.

What are the biggest challenges — and possible solutions — for recruiting, hiring and retaining people who want careers in the dairy industry?

Anderson: We as an industry need to do a better job of educating young people as to how broad the industry is and it is “just not milking cows” on a farm. Our industry embodies sales, marketing, finance, supply chain, research & development, science, communication and packaging, just to name a few disciplines. We need to be more aggressive in “marketing to young people” the career opportunities available via the dairy industry. Once we attract young people to our industry, we need to be able to articulate the value proposition of a dairy-centric industry career. We also need to provide growth and development opportunities so as not to suffer attrition.

Hoffman: Labor availability is becoming more impactful in many industries, including in dairy. The labor market is very tight with historically low unemployment rates, and immigration challenges make finding a steady pipeline of labor to work long hours increasingly difficult. Another issue is more of a generational shift. As family farmers get close to retirement age, many of their children have left the farms for other careers with less stress and a potential for greater returns. There are some functions on the farm and in processing plants that can be replaced with robotics and automation, but those investments are expensive for farmers considering the low milk checks they have received over the past few years.

Moreda: The biggest challenges we face in our area are location and cost of living. In rural areas it can be difficult to find qualified candidates who would be willing to re-locate or commute to work. The cost of living is so high in the Bay Area of California that it can be difficult for smaller and newer companies to offer a competitive package that would be attractive enough for a candidate to accept. Some other challenges include compliance with laws and regulations and workforce training and development. Developing a quality company culture, building a reputation as a leader in the community and industry, offering as competitive a compensation package as possible, and marketing employment opportunities to all types of people are ways in which small companies can stay competitive.

Vandenheuvel: Attracting and retaining talented individuals to any industry is difficult. Fortunately, I still believe that most of America has a deep-rooted love of agriculture, which puts our industry in a good position to attract talented individuals. This does not happen automatically, however, and we must be intentional in our efforts to promote agricultural careers. Agricultural programs in school and 4-H extracurricular programs can play a big role in that. We also need to continue looking for ways to engage with our local colleges and universities and take an active role in promoting agricultural careers.

Wilson: We’ve had a lot of success with going after and identifying people who are passionate and excited about the food business, not necessarily those with an agriculture background, but individuals who are really interested in food and where it comes from. Particularly with millennials, we’re seeing pretty significant interest in working with and for farmers, which is likely rooted in the fact that many are interested in knowing more about where their food comes from and the overall food supply chain.

What other key issues will affect the dairy industry in 2019?

Badger: 1. There is no question that lower commodity prices have sparked innovation in the quickservice restaurant sector, primarily from McDonald’s as the company adds additional cheese slices to breakfast sandwiches and cheese options to be served with french fries into 2019. Similar yet additional steps forward will help in the process of clearing ample cheese inventories in the United States.

2. While the U.S. economy continues strong, dairy demand has recently experienced a slowdown domestically as disappearance levels have slowed on American cheese, butter, nonfat dry milk, dry whey and lactose. As trade has also been leaning negative on a number of products, a continued loss in sales within U.S. borders can continue to hamper prices further.

3. Globally, New Zealand and the European Union are making strides toward environmental rule changes. Producers have the potential to get hit with demerits within their milk checks, which will take time for the industry to adhere to. Further environmental restrictions are likely in the future in the United States, potentially in the form of higher costs that dairies will need to absorb.

Hoffman: Trade negotiations, tariffs, labor, sustainability, farm economics, global milk production, contraction of U.S. milk production and U.S. GDP growth should all be in play as key impacts to dairy in 2019. Low farm income could lead to reduced milk and cheese production, which eventually will lead to increased prices for dairy. Domestic demand for dairy has been robust with our 3.5 percent GDP growth; any contraction in the economy could cause issues with consumption and put a brake on price appreciation. New Zealand and South American milk production has been strong in their most recent season, which will create more competition for U.S. dairy products overseas. As always, any unexpected weather event in major milk producing regions will trump other fundamentals until conditions stabilize.

Noble: Higher freight rates are hampering the flow of product across the marketplace and adding cost with every move. Increasing costs will likely drive further changes in how product is marketed and sold across the country — with greater reliance on the CME, specifically, where manufacturers can push more freight risk onto the end-user.

Vandenheuvel: In addition to milk price and profitability considerations, the coming year will have additional risks and opportunities for U.S. dairy families. One area that continues to be a risk is our lack of a sensible immigration policy, which continues to create uncertainty for on-farm labor needs. On the positive side of the equation, I believe 2019 could see new opportunity in the area of milk price risk management. A combination of the new Dairy Revenue Protection Program and the Dairy Margin Coverage program in the new farm bill can potentially provide a stronger risk management/safety net protection than previous programs (Margin Protection Program or Milk Income Loss Contract). U.S. dairies need all the tools they can get in helping to combat this feast-or-famine volatility in dairy markets.

Wilson: European powder inventories will certainly remain a factor in 2019. While inventories are coming down, their existence still puts a bit of a lid on U.S. skim milk powder prices. We’re also keeping a close eye on world milk production as Europeans are getting hit with some of the same economics that U.S. dairy farmers have been facing. With more attrition, we’ll likely see an impact on prices.

CMN


Illinois’ central location, milk supply good for dairy business

Dec. 28, 2018

Editor’s note: As part of our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes 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 latest state — Illinois.

By Rena Archwamety

MADISON, Wis. — Illinois is home to 630 dairy farms — 562 of which are Grade A — and 35 dairy processing plants. The state’s central location, ideal landscape for raising cows and crops, and proximity to population centers make it a good place for both dairy farming and processing, according to those in the industry.

Kilgus Farmstead in Fairbury, Illinois, is a farmstead milk processor with 150 Jersey cows, slightly more than the typical 120-cow average herd size in the state. Like most of the state’s dairy farms it is family owned, with four families running the operation.

“We started processing about 10 years ago as a way to bring the next generation back to the family farm,” says Jenna Kilgus, one of the farm’s owners.

She notes that in the last five years, her family’s business has seen a large increase in demand for local milk from coffeehouses as well as higher-end restaurants.

“We’re 100 miles form Chicago, and being within that 100-mile radius of that big a city has definitely helped us,” Kilgus says, adding that all of their milk is distributed within Illinois. “Probably about 40 percent of the milk goes to Chicago and the rest stays downstate in Bloomington, Champaign, Peoria and those areas.”

In addition to the demand for local product, Kilgus says Illinois is a good place to raise cows and grow feed.

“Over 90 percent of the food our cows eat we grow ourselves,” she says. “We’re able to pasture graze cows in the spring, summer and fall months.”

For dairy farms that don’t process their own milk, there are plenty of processing facilities in the state.

“Some, depending on the area, could move into the Wisconsin side, but 85-90 percent of the milk raised here in Illinois goes to Illinois processors and co-ops. Most of the milk we produce here is used for fluid milk, though there is some cheese production,” says Tasha Bunting, manager of the Illinois Milk Producers’ Association.

Illinois Milk Producers’ Association is a resource managed by the Illinois Farm Bureau that advocates for the state’s dairy industry interests. It is a federation of the major dairy cooperatives in Illinois (Foremost Farms USA, Dairy Farmers of America, Mid-West Dairymen’s Co. and Prairie Farms), as well as independent dairy producers, allied industry members and universities.

“We host educational and training events,” Bunting says, giving examples such as dairy summits that feature various dairy management tools and technologies, summer dairy farm tours and training seminars for farmers. “Recently we partnered with an insurance group that will provide dairy revenue protection insurance.”

• Major processors

Prairie Farms is the largest co-op in Illinois, marketing around 60 percent of the milk produced in the state. Approximately 288 of the cooperative’s 850 dairy farmers are located in Illinois. Headquartered in Edwardsville, Illinois, Prairie Farms operates 21 plants across the state that make fluid milk, cheese and ice cream. It also has a joint venture plant with Muller-Pinehurst Dairy in Rockford, Illinois; a GMS Transportation subsidiary in Granite City, Illinois; and several distribution centers across the state. This year Prairie Farms celebrated its 80th anniversary.

“Illinois is an ideal location for Prairie Farms because it is home to so many of our dairy farmers and processing plants,” says Darin Copeland, public relations manager, Prairie Farms Dairy Inc. “Geographically speaking, Illinois is centralized within our territory that primarily serves the Midwest. From a workforce perspective, Illinois offers a qualified pool of farmers and workers that we need for success in the dairy business.”

Brewster Cheese Co., another Illinois Milk Producers’ Association member and the largest Swiss manufacturer in the United States, has a production plant in Stockton, Illinois, that processes close to 45 million pounds of cheese a year as well as liquid whey. The Ohio-based company purchased the former Kraft plant in Illinois in 1998 and has two other plants in Ohio and Idaho.

“We were looking to increase our footprint in the cheese business, and that plant had become available,” says Mike Walpole, national sales manager, Brewster Cheese. “We are the biggest employer in Stockton, which is a very small town, but at one time was a bigger manufacturing center. We are glad we can stay in this area and contribute commerce to the community.”

Walpole notes that the milk supply in the region, as well as its proximity to many of its wholesale customers, made Illinois an ideal location for the cheese plant, which takes in about 35 million pounds of milk each month from roughly 200 dairy farmers in Illinois and surrounding states. The plant has undergone a number of upgrades in recent years.

“The last five years have been nothing but major renovations,” Walpole says. “New cheese vats, whey operations, updated utilities, a new cold storage facility ... quite a bit of work, all required to stay competitive.”

• Challenging conditions

Like many other regions in the United States, Illinois is experiencing a decline in the number of dairy farms and cows, compounded by the challenges of low milk prices. According to the latest USDA milk production data, there were 89,000 milk cows in Illinois in November 2018, down 4,000 head from a year earlier. Bunting says with the current low milk prices, many of Illinois’ smaller producers are deciding it’s time to retire as they’re not finding the same opportunities there used to be in dairy.

“A lot of dairy farmers are anxious with this lull in milk prices to start seeing an uptick,” she says. “Thankfully, new tools available through the farm bill and the dairy revenue protection launched this fall will keep them going, and hopefully keep them in it for the long run.”

Some farms in the state are finding ways to stay afloat and remain flexible to current market conditions and changing trends in demand.

“Unfortunately you don’t see the dairy industry growing in Illinois,” Kilgus says, noting that her family’s farm and milk business has found ways to adjust and diversify to react to changing markets and demand. For example, it has started selling meat as well as milk to its customers who are looking for local products.

“I think the industry is constantly changing,” she adds. “When we first started bottling 10 years ago, our main focus was selling at grocery stores and retailers. Five years ago, that shifted to coffeehouses. It keeps shifting and changing. We always have to keep our blinders off and be on the lookout for what’s going to happen in the future.”

CMN


Federal government shutdown may affect trade aid payments

Dec. 28, 2018

WASHINGTON — Current funding levels for several federal government programs expired last week as Congress and President Trump were unable to reach a budget agreement to keep the federal government open.

Prior to the partial shutdown becoming official at 11:59 p.m. Eastern Time Dec. 21, USDA Secretary Sonny Perdue last week detailed which functions of USDA will remain available during the lapse in government funding.

“During a shutdown, we will leverage our existing resources as best we can to continue to provide the top-notch service people expect,” Perdue says.

Some USDA activities are shut down or significantly reduced, and some USDA employees are furloughed. However, certain USDA activities continue because they are related to law enforcement, the protection of life and property, or are financed through available funding (such as through mandatory appropriations, multiyear discretionary funding, or user fees). However, if the shutdown continues, activities will be reduced as available funding decreases.

USDA’s Market News Service, which provides critically important market information to the agricultural industry, still is in operation, Perdue says. However, USDA’s Economic Research Service (ERS) Commodity Outlook Reports, Data Products, research reports, staff analysis and projections will not be published during the shutdown, and the ERS public website is not being updated. In addition, National Agricultural Statistics Service (NASS) statistics, the World Agricultural Supply and Demand Estimates report, and other agricultural economic and statistical reports and projections will not be available.

According to HighGround Dairy, both Dairy Market News and the National Dairy Product Sales Reports are administered by USDA’s Market Information branch, which will remain active during the shutdown for the time being.

Following the first week of the shutdown, farm loans and some farm payments — including direct payments, market assistance loans, market facilitation payments for those producers who have not certified production and disaster assistance programs — also may not be available, Perdue says.

Notably, the U.S. government’s payments to farmers as part of trade aid relief will temporarily stop next week if the federal shutdown continues, USDA says.

For more details, visit www.usda.gov.

CMN



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Today's Cheese Spot Trading
January 16, 2019


Barrels: $1.2000 (-1)
Blocks: $1.4175 (NC)


Click here for more market activity
Cheese Production
U.S. Total Oct.
1.119 bil. lbs.


Milk Production
U.S. Total Nov.
17.370 bil. lbs.

Guest Columnist

Dairy and the Evers administration

John Umhoefer, Wisconsin Cheese Makers Association

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