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Aging cheeses challenging yet
rewarding in flavor and quality

July 25, 2014

By Alyssa Mitchell

MADISON, Wis. — Like fine wine, some cheeses only get better with age. But the practice of aging cheese, which can be done a number of different ways, is extremely complex and not without its challenges.

Cheese requires a warm, moist environment with proper air circulation and oxygen-carbon dioxide exchange in order to develop properly. The rate of development is influenced by its ripening or aging environment’s temperature, the relative humidity and the degree of air circulation and ventilation in combination with the appropriate range of acidity (pH), moisture content and salt content in the cheese.

Many cheesemakers and agers also are concerned with ammonia vs. oxygen exchange and taking out ammonia that is created during the breakdown of proteins by the secondary microflora, notes Brian Ralph, cave manager, Murray’s Cheese, New York, N.Y.

The size of a cheese as well as the number stored within a given space also influences the rate of development.

“No two cheeses are identical. Aging cheese is a constantly evolving practice that both cheesemakers and buyers are interested in because it changes the product’s value and flavor,” says Dean Sommer, senior management team, cheese & food technologist with the Wisconsin Center for Dairy Research (CDR), Madison, Wis. “Cheese aging and flavor and texture development is very complex. There are still a lot of unknowns.”

A few degrees can make a world of difference in how quickly flavor develops in aging cheeses, so the curing temperature is very important, Sommer notes.

“We’ve experimented with a cheese, curing half of it at 40 degrees Fahrenheit and the other half at 45 degrees — it was so different you wouldn’t know it was the same cheese,” he says.

The optimal curing temperature for cheese depends on its type, notes John Jaeggi, cheese industry and applications coordinator, CDR.

“Cheddar and Mozzarella are commonly aged in Cryovac sealed bags where it sits in an aging environment,” he says. “Cheddars in particular can age in a warmer room to accelerate the ripening of the cheese, up to 48-52 degrees Fahrenheit.”

Sommer notes that the higher the temperature, however, the faster the cheese will cure, which can accelerate the ripening of “off” flavors if the cheese is imperfect.

In other words, aging does not make a bad cheese better.

“Once you get above 50 degrees Fahrenheit, there can be gas formation issues in the cheese. Temperature control is very particular,” Sommer adds.

Jaeggi says cheeses like Parmesan also can have issues with fast curing, such as the acceleration of enzymatic browning.

He notes that other cheeses, such as Swiss, typically are aged at lower temperatures near 35 degrees Fahrenheit.

The surface the cheese is aged on also can vary.

Jeff Jirik, vice president of product development at Swiss Valley Farms, Davenport, Iowa, and former owner of Faribault Dairy Co., now a wholly-owned subsidiary of Swiss Valley, in Faribault, Minn., has experience aging cheese on both wood and other surfaces.

In 1854, German immigrant Gottfried Fleckenstein began using the natural sandstone caves along the Straight River in Minnesota for brewing and storing beer. The largest natural cave (still in use today) was enlarged in 1936, then entirely new caves were hand hewn from the sandstone rock beginning in 1938, Jirik notes.

Faribault Dairy Co. (now known as Caves of Faribault) was founded in June 2001 to revitalize the caves after an eight-year dormancy, he adds.

While the company previously did the bulk of its aging on wood surfaces, Jirik says today most of the cheeses are aged in special forms, either baskets or trays depending on the type of cheese.

Jirik says that while using plastic forms allows for easy cleanability of surfaces as well as stacking efficiency, by switching from wood there is some loss of flavor contribution from the wood itself.

“The primary driver of that change was efficiency and ease of handling,” he notes.

Gouda, for example, is aged on specially-made plastic forms in the company’s sandstone caves.

“The caves are unique and very clean,” Jirik says. “They have a natural temperature of about 52 degrees Fahrenheit and relative humidity of about 98 percent.”

He adds that since the caves originally were used for a brewery, organisms that aged beer still are present today and assist in the cheese aging process as well.

At Murray’s Cheese, New York, N.Y., cheese caves were constructed beneath Bleecker Street in 2004 to maintain and enhance the quality of the products Murray’s sells.

Murray’s caves now are in Long Island City, Queens, N.Y. The company built those caves last year.

“We think of the caves as a representation of our commitment to honoring the craft of each cheesemaker,” Ralph says.

“All of our caves were designed to combine modern technology with old world knowledge,” he notes. “We rely on humidifiers regulated by sensors to aid in humidity retention. Our porous cement walls are breathable and work to promote each cave’s microbial community.”

Low velocity fans round out the caves by providing proper air flow and preventing condensation, he adds.

At Murray’s, cheeses are aged on wood, plastic and stainless steel depending on the type of cheese, Ralph says.

“We have a large volume and we rotate through it fairly quickly,” he says. “We handle a lot of different cheeses, which can be challenging, and sometimes it is better for cheesemakers to focus on aging just one type of cheese.”

Ralph notes a key aspect of successful aging is keeping a close eye on the cheese throughout the aging process.

It takes practice with proper washing of the product, monitoring it as it ages and knowing when to “set it loose,” he says.

“It will continue to mature outside of the aging room, so you need to be mindful of that when sending it out, particularly with soft cheeses,” he says.

At Vella Cheese Co., Sonoma, Calif., cheese is primarily aged on wooden vertical racks where wheels sit on their side for better breathability and minimal contact, says Gabe Luddy, plant manager, Vella Cheese.

“Most people that age cheese do it on shelves and the cheese sits flat, so there is more surface area on the shelf without air flow, and the cheese needs to be turned,” Luddy says, noting that by placing the cheese on its side in vertical racks, Vella Cheese is able to accommodate more product in the same space.

Vella Cheese ages varieties including Dry Monterey Jack, the company’s flagship product, as well as Mezzo Secco, Romanello — its version of a Romano — and an Asiago.

Luddy notes that the use of wood in aging helps to control moisture in the cheese and also allows it to ripen with unique flavors.

Proper cleaning of the wood is paramount, he adds.

“You don’t want to scratch or break the wood because bacteria can get in there,” he says. “As we cycle through the cheeses, we do a dry cleaning of the racks. We do a plastic scraping of the rack and use nylon brushes to brush away any physical remnants. You also need to be sure to repair and replace as needed.”

Luddy adds that maintenance of aging rooms is just as important as caring for a company’s production facilities.

The longstanding practice of aging cheese on wooden boards gained special attention last month when an FDA statement on the practice raised concern among industry stakeholders.

A memo issued in January by Monica Metz, branch chief of FDA’s Dairy and Egg Branch for the Center for Food Safety and Applied Nutrition, stated: “The use of wooden shelves, rough or otherwise, for cheese ripening does not conform to cGMP (current good manufacturing practices) requirements, which require that ‘all plant equipment and utensils shall be so designed and of such material and workmanship as to be adequately cleanable, and shall be properly maintained.’ 21 CFR 110.40(a).”

The agency was responding to an inquiry from New York’s Division of Milk Control and Dairy Services Director Casey McCue. An FDA inspection at a New York farmstead cheese operation last summer found environmental pathogenic contamination, and FDA demanded the plant cease using wooden boards for curing.

News of the memo gained traction the week of June 13, and concerns were raised by industry stakeholders. The American Cheese Society (ACS) issued a position statement on the safety of aging cheese on wood in response to FDA.

“For centuries, cheesemakers have been creating delicious, nutritious, unique cheeses aged on wood,” the ACS statement says. “Today’s cheesemakers — large and small, domestic and international — continue to use this material for production due to its inherent safety, unique contribution to the aging and flavor-development process, and track record of safety as part of overall plant hygiene and good manufacturing practices. No foodborne illness outbreak has been found to be caused by the use of wood as an aging surface.”

FDA then released another statement clarifying that the agency is not banning the use of wooden boards in cheesemaking.

“In the interest of public health, the FDA’s current regulations state that utensils and other surfaces that contact food must be ‘adequately cleanable’ and properly maintained. Historically, the FDA has expressed concern about whether wood meets this requirement and has noted these concerns in inspectional findings. FDA is always open to evidence that shows that wood can be safely used for specific purposes, such as aging cheese,” the statement says. “The FDA will engage with the artisanal cheesemaking community to determine whether certain types of cheeses can safely be made by aging them on wooden shelving.” (See “FDA clarifies stance on cheese aging regs after industry uproar” in the June 13, 2014, issue of Cheese Market News.)

At the annual ACS conference next week in Sacramento, Calif., FDA Deputy Commissioner for Foods and Veterinary Medicine Michael Taylor will host a briefing July 30 to clarify FDA’s position on the use of wood for cheese aging as well as address key questions of concern to ACS members.

Prior to the briefing, ACS says it will meet with Taylor and other FDA representatives for a discussion on issues facing the industry, in particular potential threats to traditional cheesemaking methods.

“The use of wood boards in cheesemaking is an age-old tradition,” Ralph says. “It helps to keep a healthy microbiom in your facility as well as pertinent microflora.”

Jirik notes that the “great cheeses of the world” are aged primarily on wood.

“I think it’s very important for the industry to continue to have this option,” he says.

Luddy says that while use of wood in aging cheese may require more care, it can be adequately cleaned and in many cases is no more difficult to sanitize than stainless steel or plastic.

“The biggest issue for people aging cheese on wood is that the cheese does better on wood; it’s able to breathe and age better and can actually create a safer environment for the cheese,” he says. “Plastic and metal shelves just don’t offer the same characteristics in the aging process, and I don’t think you’re really saving any work with the cleaning.”

Jaeggi notes that while it seems some in the industry are moving toward using plastic over wood to age cheese, scientific evidence is lacking that supports plastic as being a safer option.

“I’m not saying plastic is bad, but I’d like to see more science showing it is safer to justify why more people seem to be moving toward it,” he says.

While aging can be a lot of work — the care and attention to detail, the constant vigilance of the product and the amount of product taking up space in storage — aging allows for the development of so much more of the natural flavors in the cheese, Luddy says.

Aroma and flavor compounds hidden in the milk really can be brought out in the aging process, adds Ralph.

“Aging can create a bouquet of flavors in the cheese that you might not otherwise get,” he says.

Jirik says he is excited about the growing interest in aged cheeses on a consumer level.

“It seems the American palate is getting more adventuresome and looking for more flavor and complexity,” he says.

CMN


Agropur will acquire Davisco Foods,
double U.S. operations

July 25, 2014

LE SUEUR, Minn. — Canadian dairy cooperative Agropur and U.S.-based cheese and dairy ingredients company Davisco Foods this week announced they have entered into an agreement for Agropur to acquire the dairy processing assets of Davisco. The transaction is expected to close Aug. 1, subject to the satisfaction of customary closing conditions.

This acquisition will double Agropur’s U.S. processing operations and will increase its global milk intake by 50 percent. It includes three Davisco cheese processing factories in Le Sueur, Minn.; Jerome, Idaho; and Lake Norden, S.D. It also includes an ingredients plant in Nicollet, Minn.; the Friendly Confines Cheese Shoppe in Le Sueur, Minn.; and sales offices in Eden Prairie, Minn.; Shanghai (China Sales Office); Singapore (Southeast Asia Sales Office); and Geneva, Switzerland (Europe Sales Office); as well as distribution centers in Rotterdam, the Netherlands; and Tianjin, China.

“I am excited about this opportunity and what it affords our suppliers, customers and most importantly, our employees,” says Jon Davis, Davisco CEO. “Davisco and Agropur have built, over 70 years, very similar cultures. Along with all of Davisco’s management team, I look forward to becoming part of the Agropur family and I am very excited about what the future holds. These are exciting times, and it will be a tremendous pleasure and an honor to be part of Agropur going forward.”

Davisco is headquartered in Le Sueur, Minn., and has 900 employees. The company processes 3.8 billion pounds of milk and produces more than 375 million pounds of cheese and 180 million pounds of whey ingredients annually.

Earlier this month, Agropur announced the purchase of Sobeys’ dairy activities and the acquisition of Northumberland Dairy Cooperative’s dairy and food distribution assets, both in Canada.

“With over US$1 billion in annual sales, this acquisition is by far the largest transaction in Agropur’s 76-year history,” says Agropur President Serge Riendeau, of the Davisco agreement. “This transaction, combined with the most recent ones in Canada, will increase our sales to more than US$5.4 billion on an annualized basis, and we should reach 12.1 billion pounds of milk processed each year in 41 plants across North America. As a result of this acquisition, the U.S. operations of Agropur should reach the top five cheese and ingredients processors in the United States to even better serve its clients.”

Agropur will finance the total consideration from existing cash resources and new credit facilities fully underwritten by the co-lead arrangers and joint bookrunners Desjardins Capital Markets, BMO Capital Markets and Rabobank. Desjardins Capital Markets acted as financial advisor to Agropur.

CMN


Wis. raw milk appeal lost;
other access laws debated

July 25, 2014

MADISON, Wis. — As judges make decisions in two cases involving raw milk farmers in the Midwest, laws regarding raw milk access in other U.S. states as well as in other countries continue to be examined.

Wisconsin dairy farmer Vernon Hershberger, who last year was found guilty of violating a holding order to prohibit him from selling or distributing raw milk and other items from his farm to members of a buying club, last week lost his appeal against the conviction.

In May 2013, Hershberger was found guilty on one count for violating the holding order issued by the Wisconsin Department of Agriculture, Trade and Consumer Protection in 2010. He was fined $1,000 plus $513 in court assessments. (See “Wis. raw milk dairy farmer fined $1,000” in the June 21, 2013, issue of Cheese Market News.) He was acquitted on three other counts related to selling raw milk and other food items without a license.

The Court of Appeals’ decision, filed July 17, upholds the original conviction and concludes that “the circuit court properly prohibited Hershberger from collaterally attacking the factual basis for issuance of the holding order, that the circuit court properly prohibited Hershberger from introducing into evidence an unredacted version of the holding order, and that the circuit court’s evidentiary rulings did not deny Hershberger his asserted constitutional right to present a defense.”

Meanwhile, a Minnesota judge recently dismissed a probation violation charge against Gibbon, Minn., farmer Michael Hartmann. Earlier this year Sibley County District Court Judge Erica MacDonald ruled that Hartmann had continued to sell raw milk away from his farm after he pleaded guilty in 2012 to misdemeanor charges that included illegally selling raw milk and raw milk products. Minnesota law allows raw milk to be sold on-farm but not elsewhere.

Following his plea in 2012, Hartmann was fined $585 and sentenced to six months of unsupervised probation. In 2010, the Minnesota Department of Health linked Hartmann’s raw milk products to an E. coli outbreak as well as other reported illnesses.

• Revising raw milk laws

Other states are revising or considering revisions to laws concerning raw milk access. In Vermont, a law that allows delivery of raw milk at farmers’ markets took effect July 1. Act 149 changes the law to establish weekly rather than daily allowances for raw milk sales. Tier 1 producers now will be able to sell 87.5 gallons of raw milk per week, and Tier 2 producers will be able to sell up to 280 gallons per week. The new law also allows Tier 2 producers to deliver raw milk to their customers at farmers’ markets, though these deliveries can only be to customers who have previously visited the farm to become an established customer.

In Illinois, raw milk advocates say that new raw milk regulations under consideration could put some of the state’s raw milk producers out of business. Currently the unlicensed on-farm sale of raw milk is legal in the state. A dairy workgroup under the Illinois Department of Public Health has proposed regulations that would require those who produce and sell raw milk for human consumption to obtain a permit and undergo regular inspections and testing. The proposed regulations would prohibit unlicensed producers from giving milk away to guests at their farms as well as prohibit herdshares and distribution of raw milk through CSAs unless the producer is in Grade A compliance.

• National authorities

FDA continues to warn consumers about the dangers of raw milk. During June Dairy Month, FDA on its website reiterated and updated its warning that consuming raw milk can put people at risk for serious illnesses such as Listeria.

“Most milk and milk products sold commercially in the United States contain pasteurized milk or cream, or the products have been produced in a manner that kills any dangerous bacteria that may be present,” FDA says. “But unpasteurized milk and products made from unpasteurized milk are sold and may be harmful to your health.”

Among FDA’s guidelines on milk and milk products that are OK to eat are: pasteurized milk or cream; hard cheeses such as Cheddar and extra hard grating cheeses such as Parmesan; soft cheeses, cream cheese, cottage cheese and Ricotta made from pasteurized milk; and yogurt, pudding, ice cream and frozen yogurt made from pasteurized milk. Listed as “unsafe to eat” are unpasteurized milk or cream; soft cheeses made from unpasteurized milk; and yogurt, pudding, ice cream and frozen yogurt made from unpasteurized milk.

Canada’s FDA counterpart, Health Canada, earlier this week issued an information update warning that Canadians should not drink raw or unpasteurized milk — especially children, pregnant women, older adults and people with weakened immune systems, since they are at a higher risk of developing food poisoning.

“Some Canadians may believe that pasteurization harms milk and that raw milk is a safe and healthier alternative,” Health Canada says. “However, raw milk can contain dangerous bacteria that could make you and your family seriously sick.”

Since Health Canada made pasteurization mandatory in 1991, the agency says, the number of food poisoning outbreaks has dramatically gone down. Cheeses are the only dairy products in Canada that can be made from raw milk as long as they meet specific requirements.

Meanwhile, the United Kingdom’s Food Standards Agency currently is considering new proposals for the sale of raw milk that could include wider access, including vending machine sales.

The proposals, published earlier this month, follow an extensive review of the UK’s current raw milk controls and a public consultation launched in January. The review found that current controls are managing the potential risks associated with drinking raw milk. There also was strong support from existing consumers and producers for continued, wider and controlled access to raw milk.

Selling raw milk from vending machines placed in retail stores currently is not allowed, though they can be placed on farm premises. The proposals cover England, Wales and Northern Ireland. Sale of raw milk is banned in Scotland.

“Throughout this review process we have sought to balance consumer protection with consumer choice,” says Steve Wearne, head of policy at the Food Standards Agency. “It is clear that the current raw milk regulations have worked well to control the risks from raw milk. We are not advising that these controls should be removed completely as they are necessary for continued consumer protection. However, we believe there is the opportunity for us to make changes which balance modest liberalization of sales with controls on production that ensure continued consumer protection.”

On Wednesday, the Food Standards Agency decided to maintain the current regulations while further evidence is gathered to allow its board members to make a final decision on whether to revise the rules. The board concluded that additional evidence was required on risks from specific pathogens and said a final decision should not be made until the European Food Safety Authority has delivered the findings of its own review of the risks from raw milk, which is expected in December.

CMN


Emmi Roth will expand
New York yogurt operations

July 25, 2014

PENN YAN, N.Y. — New York Gov. Andrew Cuomo recently announced that Emmi Roth USA is expanding its operations and retaining its workforce in Orangeburg, N.Y., and Penn Yan, N.Y., in addition to creating 50 new positions in Penn Yan. Emmi Penn Yan will acquire production equipment and expand its existing structure in order to grow its market share in North America.

“Agriculture is a major source of economic activity in Upstate New York, and (this is) another example of how the state is working to support the industry in order to create new opportunities for New Yorkers in the area,” says Cuomo. “The expansion of Emmi Roth USA in Penn Yan and Orangeburg will mean a stronger regional economy and further growth in the dairy industry. This company made the right decision in choosing Upstate New York for their investment, and I look forward to seeing them help us defend our title as the yogurt capital of the nation.”

Emmi Penn Yan’s manufacturing facility produces Siggi’s brand yogurt, as well as bag-in-box milk and creamers for foodservice dispensers. The facility is currently at capacity. The company’s $11.6 million multi-year investment project includes hiring new personnel in dairy production and attracting new investments focused on food processing.

“The dairy industry is New York state’s leading agricultural sector, and one of our top priorities is encouraging the growth of agri-businesses,” says Kenneth Adams, president, CEO and commissioner, Empire State Development (ESD). “Emmi Roth USA will soon be expanding in Penn Yan, a beautiful part of the Finger Lakes and a perfect spot to increase yogurt manufacturing and create jobs.”

To encourage Emmi Penn Yan to proceed with its expansion in Penn Yan and build on the industry’s growth in the State, ESD will provide up to $400,000 in performance-based Excelsior Jobs Program tax credits, which are tied directly to the company’s job creation and investment commitments.

“Emmi Roth USA is very appreciative of the support by Gov. Cuomo and Empire State Development,” says Matthias Kunz, chairman of the board, Emmi Roth USA. “When we established our operations we certainly had choices, and making our choice to locate in Penn Yan has turned out to be a very positive one. With the great workforce, access to quality dairy products as well as access to our markets, we are very happy to be in Yates County, N.Y.”

This project also falls within the Finger Lakes Regional Economic Development Council’s (FLREDC) strategic plan — one of 10 councils created by Cuomo in 2011 to coordinate and drive economic development on a regional level.

“Emmi Roth continues to be our fastest-growing manufacturer, and we are elated that they are investing further in their Penn Yan facility,” says Steve Griffin, CEO, FLREDC and Yates County Industrial Development Agency. “Yates County has seen tremendous private sector growth and investment in the last few years and this is another great example of our continued success. We appreciate the assistance from Gov. Cuomo and Empire State Development helping Emmi Roth’s continued growth in Penn Yan.”

CMN


Parmissimo brand offers high-end, convenient cheese for U.S. consumers

By Kate Sander

ENGLEWOOD, N.J. — Convenience, portion control, high-end specialty foods — all of these are buzzwords in today’s retail marketing. But sometimes for consumers, it doesn’t seem like it all can be achieved simultaneously — convenience is sacrificed for the high-quality cheese that must be cut and sliced at the deli counter or at home, or conveniently packaged snacking cheese is difficult to find when it comes to specialty varieties.

However, Parmareggio, an Italian cheese company, is offering a product line that puts authentic Parmigiano Reggiano in convenient packaging, ranging from exact-weight wedges to flakes to individually-packaged single-serve chunks perfect for throwing into a lunch bag or pulling out of the refrigerator for a quick snack.

The cheese, marketed under the Parmissimo brand, has been available in Europe for years, but only since 2012 has been imported in the United States by Vitelli Foods, also imports pasta and Italian canned tomatoes.

“There was a need for an exact-weight format in the marketplace,” says Michael Giarratani, Parmissimo USA. “Deli managers are really busy and don’t have time to cut and weigh everything.

“At the same time, today’s consumer wants variety. People want to trade up and have alternatives. A 30-month Parmesan wedge is an opportunity to trade up,” he says.
• Product range

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Growing export market aids
U.S. dairy prices, panelists say

July 18, 2014

By Alyssa Mitchell

EGG HARBOR, Wis. — Exporting is becoming increasingly important to the U.S. dairy industry as the world moves toward a more global dairy market. As export numbers continue to rise, they lend support to domestic dairy prices.

Three industry experts examined emerging foreign marketplaces and discussed how exporting is redefining traditional product pricing during the 2014 Wisconsin Dairy Products Association Dairy Symposium held this week in Door County, Wis.

The panel, moderated by Bob Fassbender, technical director, T.C. Jacoby & Co., St. Louis, included comments from Dermot Carey, senior vice president of Darigold Inc., Seattle; Phil Plourd, president of Blimling & Associates, Madison, Wis.; and Gus Jacoby, director, T.C. Jacoby & Co.

Fassbender notes that in 1994, U.S. dairy exports accounted for less than 4 percent of available milk solids. In 2013, U.S. dairy exports accounted for 15.5 percent of available milk solids.

Jacoby says U.S. dairy exports increased 15 percent in January through May 2014 compared to the previous year, adding that butterfat exports alone were up 84 percent and skim-solids exports (nonfat dry milk, skim milk powder, lactose, whey) were up 8.2 percent, collectively, while U.S. milk production was up just 1.1 percent.

“There’s definitely a deficit of butterfat which is lending support to the high butter price at the Chicago Mercantile Exchange,” Jacoby says.

On a broader scale, the international vs. domestic ratio for many companies’ overall revenue has increased, he says.

“The U.S. dairy industry is going through a significant change as the international impact is growing,” Jacoby says. “Exports are up faster than production. Dairy consumption trends are ever-changing, and constant changing dynamics of suppliers and customers is keeping the industry interesting and challenging.”

Carey notes that today, Darigold Inc. exports about 42 percent of the milk it receives on a daily basis.

While milk production growth has been moderate this year, Carey says the United States still produces more milk than it consumes. Fluid milk consumption in the United States is dropping annually, and the export market helps to sustain the industry.

In addition, population and middle class sectors are growing in emerging world markets with milk production deficits, such as China, he adds.

“They want our skim solids and whole milk powder to make their own products,” Carey says, noting that GDP growth and disposable income are driving consumption.

He adds that while China’s demand has slowed a bit from earlier this year, it will continue to import dairy products as it has milk production challenges due to lack of clean water, production costs and the transportation of raw milk.

Plourd notes that the growing export market has had an impact on relative pricing in the United States.

“There is some convergence globally in terms of price,” he says, noting the correlation seen between U.S. prices and prices at New Zealand’s Global Dairy Trade auction over the past couple of years as one example.

“The forward curve matters,” he adds. “People are using our futures markets to price exports, and the futures market also can indicate what’s to come. We watch it for clues.”

Carey notes some challenges for U.S. exporters are that the country is later than some to introduce products to foreign markets, and customers overseas have unique product specifications. For examples, Oceania has had a hold on the Chinese market for years, and the United States is only just beginning to prove itself as a new supplier.

“We’ll need to cater to consumer cultural needs internationally to continue the export demand we’ve seen,” Jacoby adds.

Plourd agrees, noting that while the United States produces a lot of nonfat dry milk, 80 percent salted butter and more Cheddar and Mozzarella, many foreign markets are looking for skim milk powders, 82 percent unsalted butter and Gouda.

Plourd notes the U.S. dairy industry does have a strong foodservice pipeline to foreign markets, particularly for Mozzarella through international pizza sales.

Plourd also asks how global the market really is, noting that the United States exports much of its product to Mexico, New Zealand to China, and the European Union to the Middle East/North Africa region.

“Can everyone win?” he asks. “Convergence by its nature probably means that prices go up in some regions and go down in others.”

He adds that while business is booming and prices are high, everyone is happy — but what happens if things go south?

“We’ve had unprecedented prosperity in the past five years, but will attitudes change if things go sour?” he asks. “Over time, will the ‘price losers’ stay in the game?”

CMN


Hearing eyes GMO benefits;
labeling advocates protest

July 18, 2014

WASHINGTON — The use of genetically modified organisms (GMOs) in agriculture and consumers’ views on this were key topics in a recent public hearing by the House Agriculture Committee’s Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture. Witnesses at the July 9 hearing to consider the benefits of biotechnology included professors from Cornell University, Harvard University and Tuskegee University, as well as a Vermont dairy farmer, mother and blogger who testified on behalf of Agri-Mark Dairy Cooperative and the National Council of Farmer Cooperatives.

All four witnesses emphasized how consumers, farmers and the environment have benefitted from traditional and modern applications of biotechnology. They also responded to questions from committee members concerning the challenges of relaying factual information about these technologies to the public.

Subcommittee Ranking Member Kurt Schrader, D-Ore., says the hearing made it clear that a lot of work still has to be done to communicate with the public about the benefits of biotechnology, and that he believes the committee can play a vital role in doing that.

“As science and technology advances,it’s important that we don’t pit different agriculture production systems against each other — we should support all forms of agriculture,” Schrader says. “From the creation of seeds that can better withstand drought to the development of fortified rice to assist those suffering from a deficiency of essential vitamins and minerals, biotech is playing a crucial role in our society by feeding the world, protecting our environment and improving global health.”

Joanna Lidback, a dairy farmer from northeast Vermont who also keeps a blog — farmlifelove.com — documenting her family’s life on the farm, testified that farmers need to do a better job connecting with the public when talking about the benefits that biotechnology brings to producers, consumers and the environment.

“The science shows that GMOs are safe and bring tremendous benefits, but we in agriculture have failed to communicate this effectively with the public,” Lidback testified.

She also highlighted the impact that being forced to use non-GMO feed would have on the 45-cow dairy farm she operates with her husband. She says their feed costs would go from $5,160 a month to $11,370 a month.

“We face a challenge brought on by what many in agriculture see as irrational consumer fears creating the potential for limiting our ability to use biotechnology in order to best utilize the resources we have in a sustainable way,” she says. “I’m happy to continue speaking up for our right to farm in whatever way we choose, which in our case includes biotechnology and the use of GMOs.”

David Just, professor at the Charles H. Dyson School of Applied Economics and Management at Cornell University and co-director of the Cornell Center for Behavioral Economics in Child Nutrition, testified about observations he has gathered from his research and studies that include consumer responses to food choices and the impact of food and agricultural policy on production and trade practices, including issues related to GMOs.

He noted in his testimony that consumers tend to view GMOs as a technology with a single set of characteristics rather than the thousands of differentiated modifications that now appear in the market.

“This misperception allows consumers to perceive GMOs in caricature, with each being equally risky and none possessing any particular benefits,” Just says. “Generally, when consumers consider GMOs, they tend to regard them in comparison to some hypothetical alternative food that is pristine and presents no perceived health risk. In essence, they consider it a question of GMO vs. an ideal food. In reality, the non-GMO alternative generally presents a greater and quantifiable health risk.”
For example, Just says, GMOs often are introduced specifically to eliminate the use of pesticides or other chemical treatments that can present a health risk, such as is the case with Bt corn, one of the products consumers are most likely to encounter.

Consumers have developed these misperceptions in part because the industry does not explain those benefits to them, Just says.

“Industry has focused understandably on marketing the benefits of growing these crops to farmers, leaving consumers with a latent understanding of why genetic modifications are introduced in the food supply to begin with,” he says. “When given the choice between conventional foods and GMOs, consumers express a strong preference for conventional foods. However, my research has shown that when the same choice is presented in such a way that consumers can understand the reasons for genetic modification, they overwhelmingly choose GMOs.”

The hearing comes in the midst of an ongoing debate over whether GMO foods should be labeled. In May, Vermont became the first state to enact a law that will require the labeling of foods that contain GMOs or that are produced with genetic engineering. (See “Vt. governor signs GMO labeling bill, braces for lawsuits” in the May 9, 2013, issue of Cheese Market News.) Last year Connecticut and Maine both passed GMO labeling laws that will take effect if enough surrounding states pass similar laws. More than 70 bills and ballot initiatives on GMO labeling have been introduced in more than 30 other states in 2013 and 2014, according to the non-profit Environmental Working Group.

Meanwhile, a bill was introduced in April by U.S. Rep. Mike Pompeo, R-Kan., that would set federal labeling standards for GMO foods and preempt states from passing their own mandatory GMO labeling requirements. This bill, the “Safe and Accurate Food Labeling Act,” has drawn support from dairy industry groups such as the International Dairy Foods Association and National Milk Producers Federation. (See “Bill seeks federal standards for GMO labeling” in the April 11, 2014, issue of Cheese Market News.)

On July 10, a day after the subcommittee hearing on biotechnology in agriculture, groups supporting GMO labeling gathered on Capitol Hill to protest Pompeo’s proposed bill.

“I came to Washington to stand up for transparency in our nation’s food supply,” says Jerry Greenfield, cofounder of Vermont-based ice cream company Ben & Jerry’s, which has been a strong supporter of Vermont’s recently-passed GMO labeling law. “I hope legislation that would keep consumers in the dark never sees the light of day, so states can continue to demand more information about their food.”

Greenfield and the other protesters delivered to lawmakers the names of more than 500,000 people who oppose Pompeo’s bill and urged them to support competing legislation introduced by Sen. Barbara Boxer, D-Calif., and Rep. Peter DeFazio, D-Ore., that would require a federal label on GMO foods.

Craft Restaurants’ owner and chef Tom Colicchio helped collect more than 250,000 of the names through Food Policy Action’s website and www.CREDOMobilize.com.

“The overwhelming majority of Americans want GE (genetically-engineered) foods to be labeled,” he says. “As a chef and father, I want to know what I’m serving my customers and kids, and the majority of Americans want honest information about the food on their tables. Food Policy Action will be scoring co-sponsorship of the Pompeo bill in our annual scorecard and urging the public to hold lawmakers accountable for it come November.”

CMN


DFA agrees to settlement
in Northeast antitrust suit

July 18, 2014

KANSAS CITY, Mo. — Dairy Farmers of America (DFA) this week announced it has agreed to pay a total of $50 million to Northeast dairy farmers to settle antitrust allegations from a 2009 class action lawsuit.

The lawsuit alleges that DFA, Dairy Marketing Services and Dean Foods Co. were working together to monopolize the market for raw milk in the Northeast.

DFA notes it does not admit any wrongdoing under the terms of the settlement.

“After aggressively defending ourselves in a class action lawsuit filed in 2009 on behalf of dairy farmers in the Northeast region, DFA has agreed to a settlement in the case,” the cooperative says in a statement.

“While we believe the allegations against us were without merit and the activities of DFA, Dairy Marketing Services (DMS) and other affiliated milk marketing cooperatives in the Northeast benefited cooperative members and independent producers alike, the cost to continue to defend ourselves has become too great,” DFA says. “Under terms of the settlement, DFA has admitted no wrongdoing. This settlement will not affect DFA’s ability to operate, our members’ equity or the services provided to DFA members or DMS producers.”

Dean Foods in late 2010 agreed to a $30 million settlement in the same lawsuit and also did not admit any wrongdoing (see “Dean reaches $30M settlement with dairy farmers” in the Dec. 31, 2010, issue of Cheese Market News).

DFA notes that as a farmer-owned cooperative, it works hard to ensure the success and profitability of dairy farmers.

“We believe the milk marketing structure created in the Northeast — one that enables dairy farmers to work together to market milk — has benefited all dairy farmers,” DFA says. “With settlement reached, we look forward to moving beyond this matter.”

CMN


Stolen Tillamook tour buses found,
suspects arrested

July 18, 2014

MANTECA, Calif. — A Tillamook truck, trailer and three cheese sampling tour VW buses were stolen last weekend from a hotel parking lot in Manteca, Calif., where Tillamook’s Loaf Love Tour team was promoting its cheese.

Earlier this week, police found the truck and trailer, which were severely burned. However, police later found the three Tillamook VW mini cheese sampling buses in apparently original condition.

“We are thrilled with this news and extremely pleased to be able to recover our beloved cheese buses,” Tillamook says in a statement released Tuesday.

Manteca, Calif., police say on July 14, information was received on the possible whereabouts of the three stolen buses, valued at $300,000, which had been taken while parked overnight in the City of Manteca. Tillamook had offered a $10,000 reward for the safe recovery of the buses.

At approximately 8:30 p.m. on Monday, based on information gathered, a search warrant was obtained for a recently-rented storage unit at 49 Cosmic Court in the city of Copperopolis, Calif. The search warrant subsequently was served, and police located the three stolen Tillamook buses inside the storage locker. Police say the vehicles were found in their original condition and appeared to be undamaged.

Police have arrested three men suspected in the theft, booking them at the San Joaquin County Jail on charges of stolen vehicle, possession of stolen property, arson and conspiracy. The suspects, all Sacramento residents, are 32-year-old Brian Michael Lancaster, 38-year-old Ryan Anthony Monaco and 38-year-old Timothy Michael Davy.

The San Joaquin County’s Delta Regional Auto Theft Task Force, consisting of the California Highway Patrol, the Manteca Police Department, the San Joaquin County Sheriff Department, the Lodi Police Department, the San Joaquin County Probation Department and the San Joaquin County District Attorney’s Office, took the lead in the investigation.

“As we await further information about the conclusion of the investigation, Tillamook would like to express sincere appreciation to the law enforcement agencies who have been tirelessly working this case over the past few days, as well as to all of the media outlets and loyal Tillamook fans that helped spread the word about our missing vehicles,” Tillamook says in its statement. “While this kind of senseless crime is shocking and saddening, we are grateful for this happy ending.”

CMN


Cheese, butter price strength
expected throughout summer

July 11, 2014

By Alyssa Mitchell

MADISON, Wis. — Now in the midst of summer, cheese and butter prices at the Chicago Mercantile Exchange (CME) continue their hold at higher price levels, with market analysts anticipating continued price strength heading into fall.

While CME prices for cheese and butter currently are at a premium to most international price levels, they are more or less supported by strong U.S. demand and some tighter supply factors.

Brian Rice, principal at Rice Dairy LLC, Chicago, notes that demand for U.S. dairy has proven deep, global stocks are thin and data is not yet available that show a strong increase in milk production.

Strong demand for U.S. ice cream and other cream-based products overseas has contributed to tightness in the cream market, analysts add.

According to the Daily Dairy Report — compiled by dairy economists Mary Ledman, Sara Dorland, Sarina Sharp and Karen Endres — U.S. exports of ice cream in May were at a record 8,133 metric tons, 8.1 percent above the previous year.

“Consumers worldwide are enjoying more ice cream, Greek yogurt and cream-based dips than they have in the past, and firm demand for ice cream and other products that use milkfat has cut into butter production,” Daily Dairy Report says.

USDA’s Dairy Market News in its weekly market update notes the market tone for butter remains firm on account of constricted bulk butter and cream supplies hindering the rebuilding of stocks.

Dairy Market News says that while export activity for butter has stalled recently, domestic sales are strong for foodservice, retail and industrial use.

“Contacts note the higher butter price generally hasn’t affected demand,” Dairy Market News says.

CME butter continues to reach new records for the year, most recently June 30 when it reached $2.50 per pound. While it has retreated from that price level over the past week, butter still remained well above $2 to close out the week at $2.3725.

CME Cheddar prices have pulled back slightly from last month’s $2 highs but remain within the upper $1.90s range. Cheddar barrels closed the week at $1.9875 per pound, while blocks closed at $1.97.

Dairy Market News says that a tighter milk supply situation has kept cheese production at less than desired levels.

“Sales of cheese overall are strong, with some manufacturers struggling to fill contracted orders,” Dairy Market News says.

“Cheese prices are steadying and will probably remain in the $1.90s for at least a few months,” says Leslie J. Butler, agricultural economist at the University of California-Davis.

“As we sit in the dog days of summer and looking at our peak demand period only a few months away, lower prices seem less likely,” adds Bob Wellington, senior vice president and economist for Agri-Mark Inc., Methuen, Mass. “However, the large export market for U.S. dairy products cannot be maintained at recent levels due to the disparity in prices. Eventually the prices will align much closer, which will likely mean lower U.S. prices. The question is whether ‘eventually’ means this summer or next winter.”

Rice notes that while prices may ease later this year, it likely will take until autumn to have enough data to show stocks are trending toward significant build and cow numbers are growing. In addition, the timing of southern hemisphere production coming online and allowing product to push back or come into the United States may be a factor.

Anticipated U.S. milk production growth in the second half of the year could pressure commodity prices lower, analysts add.

Recent reports also have anticipated lower feed prices for the year.

“Dairy farmers have experienced very favorable margins in 2014, and the outlook for margins is good even as milk prices come off their peak,” Ledman says.

Rice says lower feed costs for sustained periods will help milk production, growing supply.

“If this materializes, this will be a key ingredient to lower dairy prices this fall, but demand will have a say in price, too,” he says.

Butler says he anticipates milk prices to ease a bit by the end of the year as high commodity prices and lower feed costs are likely to increase milk production.

Ledman notes that May milk production was the first month of the year to post an on-trend year-over-year gain.

“Favorable margins and feed costs are likely to further support milk production through the second half of 2014,” she says.

She adds that the “perfect storm” of a dramatic downturn in prices would include European, Oceania and U.S. milk production up more than 3 percent, continued recovery in China’s domestic milk output and a corresponding slowdown in milk powder imports, as well as increased imports of butterfat and cheese for processing in the United States during the fourth quarter.

CMN


Dairy groups eye use of GIs,
market access in trade talks

July 11, 2014

By Rena Archwamety

WASHINGTON — As trade negotiations continue with countries across both the Pacific and Atlantic, U.S. dairy industry organizations are looking for progress in market access to Japan as well as in negotiations on the use of common food names and geographical indications (GIs).

This week Trans-Pacific Partnership (TPP) negotiations continued in Ottawa, where negotiators, subject matter experts and other officials are meeting July 3-12. Lead negotiators worked to make progress on areas including sanitary and phytosanitary (SPS), intellectual rights and rules of origin chapters, though some of the most difficult elements of the negotiations still are stalled, according to Jaime Castaneda, senior vice president of trade policy, U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF), who attended the Ottawa meetings.

“Primarily, everyone is waiting for the United States and Japan to continue market access negotiations. That will provide a clear vision for where we are going,” Castaneda says.

Earlier this year, Japan’s economic minister said Japan would not abolish tariffs in five “sensitive” agricultural sectors, including dairy. U.S. dairy and other organizations have since been urging TPP negotiators to push Japan to provide meaningful agricultural market access in the agreement, or else to suspend negotiations with Japan and conclude a comprehensive TPP agreement with the other partners. (See “Dairy groups say support for TPP hinges on market access” in the June 6, 2014, issue of Cheese Market News.)

The International Dairy Foods Association (IDFA) says it hopes the agricultural market access talks with Japan move forward and in the right direction for the U.S. dairy industry. Negotiators from both countries plan to meet on a regular basis, including next week and the first week of August, until an agreement is hopefully reached, Castaneda says.

“The United States, because of pressure from organizations like ours, certainly is going back to Japan and saying ‘we cannot close an agreement on the TPP with you unless you open your market for our products,’” Castaneda says.

Meanwhile, negotiators from the United States and European Union meet next week in Brussels, Belgium, for the sixth round of Transatlantic Trade and Investment Partnership (TTIP) talks July 14-18. During this round, negotiators will continue their discussions on regulator issues, trade in goods and services, government procurement, environmental protection and labor rights, energy and raw materials, and opportunities for small- and medium-sized enterprises. As in previous rounds, U.S. and EU negotiators also will spend a day with representatives from industry, non-governmental organizations, consumer groups, trade unions, professional bodies and other groups, listening to their views and updating them on the status of the negotiations.

IDFA, USDEC and NMPF say they continue to oppose the EU’s attempts to claw back common/generic cheese names like parmesan and feta. USDEC’s office in Brussels will be participating in the stakeholders’ meeting, Castaneda says, and USDEC also will be in Brussels the following week to spend more time with negotiators after the meeting.

“USDEC and NMPF continue to press for resolution of the various tariff and non-tariff barriers, including GI restrictions on the use of common food names, that hold back U.S. dairy exports,” says Shawna Morris, vice president of trade policy, USDEC and NMPF. “USDEC staff will be attending the negotiations and using the opportunity to continue to reinforce U.S. dairy industry priorities with U.S. and EU negotiators.”

CMN


USDA lowers its 2014
milk production forecast

July 11, 2014

WASHINGTON — In its “World Agricultural Supply and Demand Estimates” report released this morning, USDA lowered its 2014 milk production forecast as slower growth in output per cow more than offsets a more rapid expansion in cow numbers.

The 2014 milk production forecast now is 205.9 billion pounds, down 200 million pounds from last month’s report. Meanwhile, USDA increased its 2015 milk production projection by 300 million pounds to 212.4 billion pounds, as higher milk prices and lower feed costs are expected to support more rapid growth in cow numbers and output per cow. U.S. milk production in 2013 was 201.2 billion pounds.

The report’s export forecasts for 2014 are lowered on a fat basis compared to last month’s report, but raised on a skim-solids basis. High domestic butter prices are expected to limit export opportunities, USDA says, but nonfat dry milk/skim milk powder (NDM/SMP) exports are expected to remain strong. Fat-basis exports in 2014 are forecast at 13.2 billion pounds, down 200 million pounds from last month’s report. The skim-solids basis export forecast for 2014 is increased by 1 billion pounds to 40.4 billion pounds.

For 2015, no change is forecast to fat-basis exports, currently forecast at 13.0 billion pounds, but strength in NDM/SMP sales will help support higher skim-solids exports which are forecast at 39.1 billion pounds, 500 million pounds more than in last month’s forecast.

Product prices are forecast higher for 2014 with strength in butter prices — currently butter is forecast to average $1.965-$2.025 per pound in 2014 ­­— expected to carry into 2015. Butter is forecast to average $1.650-$1.780 in 2015, up 1 cent from last month’s forecast.

Despite increased production, USDA says robust domestic demand and stronger NDM/SMP exports will support prices.

The 2014 NDM price is forecast at $1.835-$1.865, up from $1.820-$1.860 last month. The 2015 NDM price is projected to average $1.605-$1.675, unchanged from last month. Cheese is forecast to average $2.030-$2.060 in 2014, up from $2.015-$2.055 last month. In 2015, cheese is forecast to average $1.670-$1.770, unchanged from the forecast in last month’s report.

The Class III and Class IV prices for 2014 are raised on stronger component product prices. The average 2014 Class III price now is forecast to fall in the $21.00-$21.30 per hundredweight range, up from $20.80-$21.20 last month. The Class IV price is forecast to average in the $21.95-$22.35 range, up from $21.45-$21.95 last month. The 2014 all-milk price is forecast to average $23.25-$23.55, up from $22.90-$23.30.

For 2015, the Class III price forecast is unchanged at $16.95-$17.95, but the Class IV price forecast is increased by 5 cents to $18.70-$19.80, reflecting expected strength in butter prices. The all-milk price forecast for 2015 is unchanged at $19.75-$20.75.

CMN


Fire breaks out at Pacific
Cheese plant in Nevada

July 11, 2014

RENO, Nev. — The Reno, Nev., Fire Department responded to a fire Wednesday evening at the Pacific Cheese Co. plant located here.

According to Reno Fire Chief Mike Hernandez, the fire was reported at 7:40 p.m. Wednesday and was on the inside of the second story level of the building. Crews responded with one engine initially but the incident was upgraded to a two-alarm fire due to heavy smoke.

The fire was brought under control in about 90 minutes, Hernandez says, noting fire crews managed to protect as much product as possible and assisted with bringing the facility back online with electricity.

A statement from Pacific Cheese Co. notes the fire originated in the air handling system and impacted a localized area of the building. The company on Thursday temporarily suspended operations in its Reno plant in order to assess the damage.

“In the interim, Pacific Cheese will work diligently to meet customers’ needs with product from our other plants,” the company says. “We will provide a further update on the situation (Friday) to those customers who may be affected by this unfortunate occurrence.”

Hernandez says the fire was contained to the packaging unit on the second floor of the building, which is filled with product and boxes. Preserving the product was one of the main concerns in fighting the blaze, he adds.

No injuries were reported.

CMN


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Today's Cheese Spot Trading
July 31, 2014


Barrels: $1.9875 (+4)
Blocks: $1.9775 (+1/4)


Click here for more market activity
Cheese Production
U.S. Total May
964.955 mil. lbs.


Milk Production
23 State Total June
16.177 bil. lbs.

Guest Columnist

The dietary pendulum
is swinging back

Jim Mulhern, National Milk Producers Federation,

Also this week: “Facts for cheese’s future” by the Wisconsin Milk Marketing Board

Click here for our columnist archives



 

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