Growing cheese stocks could push prices down this summer
July 3, 2015
By Alyssa Mitchell
MADISON, Wis. — While cheese prices at the Chicago Mercantile Exchange (CME) continue to be fairly well-supported — largely due to domestic demand — analysts caution that growing stocks could push the market lower in the second half of the year.
Although milk production is beginning to slow in some areas, particularly in the West due to hot weather, Midwest weather remains favorable for production, and the majority of that milk still is going to cheese vats, as the spread between Class III and Class IV milk makes Class III more attractive to producers, notes Eric Meyer, president of HighGround Dairy, Chicago.
Meyer says that while the ongoing support in the cheese market has been a bit puzzling, the numbers for domestic commercial disappearance continue to be positive, particularly for natural American cheese. He notes this level of sustained domestic support in commercial disappearance numbers hasn’t been seen since 2005.
In addition, total cheese exports for the first half of the year exceeded expectations somewhat, he says.
“Noteworthy is the confidence of manufacturers in being willing to hold cheese for future sale rather than accept slightly fewer cents a pound to sell in early July rather than late June,” says USDA’s Dairy Market News. “Profitability is looking good this year for Midwest cheese manufacturers as the halfway point of the year is reached. The overwhelming majority of comments looking forward a few months are confident about selling however much cheese a plant can make.”
Dairy Market News adds that most cheese plants in the Midwest region will have full schedules over the July 4th holiday weekend.
“Many cheese plants are already running full schedules and may not be able to take much advantage of holiday surplus milk prices below Class,” Dairy Market News says. “At some plants, even many managers are planning to be at work at least some parts of Friday, Saturday and Sunday to help ensure that production continues flowing on schedule, as well as to keep motivating workers who have in many cases sacrificed family time to work overtime for many weeks to cope with milk volumes being made into cheese.”
This week, however, CME cheese began to show some weakness. Last week USDA reported that total natural cheese in cold storage was 1.11 billion pounds at the end of May 2015, up 2 percent from April 2015 and up 4 percent from the end of May 2014. (See “Cheese, butter stocks up from year earlier” in last week’s issue of Cheese Market News.)
Cheddar barrels, which ended last week at $1.6250 per pound at the CME, early this week dipped below $1.60, and ended the week at $1.5825. Cheddar blocks, which ended last week at $1.64 per pound, also fell this week to settle at $1.62 on Thursday.
Meyer says he anticipates both blocks and barrels could be below $1.60 in the near term.
Dave Kurzawski, senior broker with FCStone, Chicago, says the CME has not yet reached a bottom for cheese.
“Summer weather and resulting milk production losses will eventually work their way into market discussions, but we’re making more American and Cheddar-type cheese and we’re putting that cheese away,” Kurzawski says. “I would expect buyers are going to be coming to terms with having ‘enough’ commodity Cheddar to get them through summer and, if that materializes, we could see cheese prices drop 15 or 20 cents rather easily” this month.
Kurzawski adds that “one caveat is that when everybody expects lower prices, we ought to pause and proceed cautiously. Markets bottom when everyone is looking for lower prices.”
Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle, says with milk flows still currently heavy, cheese prices could remain under pressure until stocks rebalance.
“Despite solid domestic demand, supply appears to be well ahead of current needs,” Dorland says. “Prices will need to find a level to clear stocks, so the market could be tested.”
She adds that while supply could start to ease from the levels of the last few months, buyers may not immediately return.
Meanwhile, CME butter continues to show unexpected price strength in the face of growing stocks and lower world prices.
Meyer notes limited fresh cream availability may be lending support to the market.
“Cream was tighter at the end of last week and the beginning of this week, but sources indicated that it will loosen as the end of the week nears, when some processors shut down for the holiday,” says Dairy Market News. “Demand for retail butter is steady to lower as holiday orders are filled. Export interest remains weak.”
CME butter continues to move around $1.90 per pound, settling at $1.9150 last week and climbing to $1.94 to end this week.
Kurzawski says that while cream demand has remained strong and kept the butter price propped up, along with good demand for fat overall, part of the market’s strength is purely psychological.
“The fundamentals have been better than the rest of the dairy complex for some time, but mix that with memories of $3 (butter last year) and you have a willing buy side around $1.90,” he says. “Calm their nerves with another jolt to inventories in July/August and I would expect that butter prices could travel back down to the $1.60 level.”
Dorland notes that while tradeable butter is currently in short supply, USDA’s cold storage numbers suggest stockpiles of butter are expanding.
“At some point during the season, the two factors will need to reconcile,” she says.
Meyer notes that as U.S. butter prices continue to float above their global counterparts, he anticipates a large number of butterfat imports in the fourth quarter.
“Once (fall) holiday buying is over, I don’t have a great outlook for butter,” he adds.
Six states loosen regulations on raw milk and dairy sales
July 3, 2015
WASHINGTON — During the 2015 legislative session, six states passed laws that loosen restrictions on raw milk sales, according to the Farm-to-Consumer Legal Defense Fund (FTCLDF), a nonprofit group that supports the sale of raw milk to consumers.
Last week, Connecticut Gov. Dannel Malloy signed SB 360 into law, which lifts a ban on herdshares. In Connecticut, licensed dairies can sell raw milk on the farm, at farmers’ markets and at retail stores. FTCLDF says the new herdshare law mainly benefits micro-dairies that cannot afford to comply with the requirements for a license.
Oregon Gov. Kate Brown signed legislation in May that lifted an advertising ban on raw milk. HB 2446 stemmed from a 2014 settlement between dairy farmer Christine Anderson and the Oregon Department of Agriculture over a lawsuit challenging the state law prohibiting advertisement.
In South Dakota, SB 45, signed into law in March, expands sales of raw dairy to include cream. However, the bill also limits where producers can sell raw milk to on the farm and through delivery, including farmers’ markets. The new law also creates a new category, “raw milk for human consumption,” with separate regulations from those written for Grade A dairies.
Utah Gov. Gary Herbert in March signed into law HB 104, which allows the distribution of raw milk through cow-share programs as long as there are no more than 2 cows, 10 goats and 10 sheep per farm. Utah previously had banned herd shares through legislation passed in 2007, though the licensed on-farm sale of raw milk has long been legal in the state.
Vermont Gov. Peter Shumlin in late May signed HB 484 into law. This bill includes amendments to the state’s raw milk statutes, increasing the amount of raw milk producers can sell each week if they comply with additional requirements such as inspections, registration and testing. Raw milk producers also will no longer have to test their cows annually for tuberculosis and brucellosis. Also, previously tier 2 producers with one high somatic cell count test were required to warn customers and contact a veterinarian to assess herd and milking procedures. Now under HP 484, the Vermont Department of Agriculture issues a warning if two out of four consecutive monthly tests exceed the limit and may suspend the producer’s sales when three out of five tests are high.
A separate bill in Vermont seeking to expand raw milk sales to retail stores and legalize the sale of other raw dairy products has been held for consideration next year.
The Wyoming Food Freedom Act, also known as HB 56, was signed into law by Wyoming Gov. Matt Mead in March. This law allows farms, ranches and home kitchens to sell any food they produce, other than meat products, directly to consumers without any government regulation or inspection. Sales may take place at farms, ranches, private homes, farmers’ markets or through delivery. This law legalizes the sale of any raw dairy product in the state, including cheese that has not been aged at least 60 days.
Last week the National Conference of State Legislatures (NCSL) published an updated summary of state milk laws, as well as an interactive map, on its website at www.ncsl.org/research/agriculture-and-rural-development/raw-milk-2012.aspx.
NCSL notes that even though the federal government allows only Grade A pasteurized milk to be sold to consumers, 31 states allow for consumers to purchase raw milk directly. In many states, the purchase of raw milk for human consumption is allowed only at the farm, farmers’ markets or through a cow-share program. However, in 12 states, consumers can purchase raw milk at retail stores. In the remaining 19 states, the sale of raw milk to consumers is prohibited.
NCSL notes that 46 states have adopted many or all of the provisions of the Pasteurized Milk Ordinance (PMO), which guides state programs to ensure that no major milkborne disease outbreaks occur. California, Maryland, New York and Pennsylvania have not adopted the PMO but have enacted their own strict milk safety laws.
NCSL says states legalizing raw milk sales or distribution have done so in the following ways: state statues that override the PMO; state administrative rules or regulation that override the PMO; or policy, such as allowing cow-share programs even though raw milk sales are prohibited in the state.
Point Reyes’ Bay Blue wins sofi for outstanding cheese
July 3, 2015
NEW YORK — The winners of the 2015 sofi Awards were announced Monday at a red-carpet awards ceremony at the 61st Summer Fancy Food Show in New York. “sofi” stands for “specialty outstanding food innovation.” Ted Allen, host of Food Network’s “Chopped” delivered a keynote address, and the gold sofi chef statues were handed out by Chef Alex Guarnaschelli, a judge on “Chopped.”
Finalists were selected this spring out of 2,715 entries across 32 awards categories, including outstanding cheese, chocolate and savory snack. (See “Specialty Food Association announces 2015 cheese, dairy sofi Awards finalists” in the May 8, 2015, issue of Cheese Market News.)
The award for outstanding cheese went to Bay Blue, made by Point Reyes Farmstead Cheese Co., Point Reyes Station, California.
Vermont Creamery, Websterville, Vermont, won the award for outstanding classic product for its Cultured Butter Sea Salt Basket.
Outstanding dairy or dairy alternative product was awarded to Bellwether
Farms, Petaluma, California, for its Blackberry Sheep Milk Yogurt.
Speculoos Cookie Butter Ice Cream from Steve’s Ice Cream, Brooklyn, N.Y., won the category of outstanding ice cream, gelato or frozen treat.
Big Picture Farm LLC, Townshend, Vermont, was awarded outstanding confection for its Goat Milk Chai Caramels and outstanding new product for its Raspberry Rhubarb Goat Milk Caramels.
Fat Toad Farm, Brookfield, Vermont, won the award for outstanding product line for its Farmstead Goat’s Milk Caramel line.
Cheese production up 1.8 percent vs. year ago
July 3, 2015
WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 988.6 million pounds in May, up 1.8 percent from May 2014’s 971.0 million pounds, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart at right.) May cheese production also was up from April 2015’s 969.8 million pounds, but when adjusted for the length of the months was down 1.4 percent on an average daily basis.
Mozzarella continues to be the most-produced cheese in the United States with production totaling 337.9 million pounds in May, a 2.1-percent increase compared to May 2014. Italian-type cheese production, of which Mozzarella is the largest component, was 423.2 million pounds in May, up 1.9 percent from May 2014.
Cheddar production in May totaled 290.1 million pounds, up 0.4 percent from May 2014. American-type cheese production, of which Cheddar is the largest component, totaled 400.6 million pounds in May, a 1.6-percent increase from a year earlier.
Wisconsin, the nation’s leading cheese-producing state, saw production reach 251.7 million pounds in May, an increase of 4.0 percent compared to May 2014. California followed with 208.6 million pounds, up 0.4 percent from May 2014.
The next four cheese-producing states in May were Idaho with 76.6 million pounds, up 4.3 percent from its production in May 2014; New Mexico with 68.9 million pounds, up 2.1 percent; New York with 60.6 million pounds, down 4.7 percent; and Minnesota with 58.6 million pounds, up 0.9 percent.
NASS reports total U.S. butter production in May was 169.5 million pounds, up 1.9 percent from May 2014’s 166.3 million pounds. May butter production also was higher than April 2015’s 164.2 million pounds, but was down 0.1 percent on an average daily basis.
California led the nation’s butter production with 54.4 million pounds of butter produced in May, a 5.6-percent decline from its production a year earlier.
Mifroma launches Premium line, introduces Adopt-an-Alp program
By Kate Sander
BONITA SPRINGS, Fla. — Cheeses from Switzerland are highly acclaimed at nearly every international cheese competition, but they haven’t necessarily been well known by U.S. consumers. Setting out to change that, though, has been Mifroma USA, a division of M-Industry USA Inc. and a subsidiary of Migros, Switzerland’s largest food retail chain.
This year, Mifroma USA, which has solidified its role as an importer of Switzerland-produced cheeses, is further expanding its presence in the U.S. market. The company is taking a two-prong approach: the addition of a high-end specialty cheese line marketed in conjunction with distributor Atalanta and an Adopt-an-Alp program that allows retailers and consumers to get up close and personal with seasonal high-end cheesemakers in the Alps.
“We’ve only begun our fifth year in the United States, and we’ve established ourselves quite well,” says Paul Schilt, executive vice president, Mifroma USA. “That’s something we want to continue.
We’ve built our traditional business first, and now we’re expanding.”
Mifroma USA offers a number of Switzerland-produced cheeses including Gruyere, Emmentaler, Appenzeller, and many others. Parent company Migros’ main cheese plant is in the western part of Switzerland, and it operates other dairy-related plants throughout the country as well.
Gruyere is the company’s biggest seller, followed by Switzerland Swiss, a milder pasteurized, rindless square Swiss block cheese. The company’s traditional Emmentaler is a distinctive raw milk cheese made in 200-pound wheels and cave aged for at least four months.
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A fromage marriage: Demand rises for cheese wheel cakes
June 26, 2015
By Chelsey Dequaine
MADISON, Wis. — It seems the negative strings behind the phrase “who cut the cheese?” are falling off. Instead of traditional wedding cakes, brides and grooms are cutting their cheese wheel wedding cakes and saying “I do” to an artisan cheese movement.
Ken Monteleone, owner, Fromagination, Madison, Wisconsin, says he wasn’t shocked when his cheese shop began receiving requests for cheese wheel wedding cakes.
“It happened organically,” he says. “Customers came to us asking for cheese trays for weddings, then we got calls asking for cakes of cheese. It’s still in its infancy, but it seems to be catching on. Being in Wisconsin, people are going to serve cheese at weddings any ways, so why not do it in a unique way?”
Monteleone says Fromagination has two types of customers: those who want a cheese cake at a wedding and those who are looking for cheese in addition to a cake as a reception course before dinner. He says it’s been fun working with couples.
“You can get very creative, especially if you look at the beauty of an artisan cheese wheel,” Monteleone says. “Our cheesemakers are so creative in the shape of their cheeses that they become perfect for a cake.”
Fromagination began making cheese wheel cakes five years ago. The service wasn’t marketed, but Monteleone says the company made them as they were requested.
“The last two years its seems more people come to us wanting cakes,” he says. “We love it. It’s another way to showcase what’s going on in our state with artisan cheeses.”
Depending on the cheese, cakes can be paired with dried fruit. Fromagination also offers guidance with cake decorations.
“It’s interesting when you look at colors and textures,” Monteleone says. “You can make it very unique.”
The demand for Fromagination’s cakes isn’t only in Wisconsin. This month, Monteleone says the store shipped a Groomsmen cake ($50), a small side cake, to Brooklyn.
While Monteleone says most of Fromagination’s orders are custom, he wanted to create a page on the company’s website showcasing what the shop does or could do. Click on the “shop” tab at www.fromagination.com to find “cakes of cheese.”
“The website is a starting point,” Monteleone says. “We sit down one-on-one with people and ask a series of questions. They taste cheeses, then we establish what they like. We build the cake on their preferences. Regardless of the kind of cheese they prefer, we can build a cake from there.”
Fromgination’s El Cantito Cake is the cheapest cheese wheel cake offered on its website ($65). The two bottom layers are LaVon Brie made with cow’s milk. The middle layer is LaClare Farms Martone made with cow’s and goat’s milk. The top layer is Landmark Creamery Petit Nuage made with sheep’s milk. The entire cake serves about 52 people.
“El Cantito — the little song — is not enough for a grand fiesta, but it will serve a small gathering of well-wishers or wedding attendants,” Fromagination says. “All three of the cheeses incorporated pair well with other reception items such as wine, fruit, crackers and preserves.”
The website also features a Rustic Reunion Cake ($350), Meadow Memoir Cake ($350), Summer Festival Cake ($450), La Reine du Pacage Cake ($550), Pure Bliss ($450) and The Old Country Cake ($550).
“Depending on your ancestry, this cake might help you include the spirit of your great-grandmother at your wedding,” Fromagination says of The Old Country Cake, which can serve up to 200 guests. “It features a blend of cow and sheep milk cheeses from Wisconsin, Spain, Ireland and Minnesota.”
Cypress Grove Chevre, Arcata, California, began selling cakes of its signature Humboldt Fog cheese in 2008. The company says the cheese looks like a cake because of its bloomy white penicillium candidum rind that protects the cheese and the line of ash through the center.
“We didn’t think of stacking the different sized wheels into cake form until Venissimo (a San Diego cheese shop with four locations) sent us a picture of its creation,” says Janne Rasmussen, marketing manager, Cypress Grove. “We’ve been selling them directly and through distributors and retailers ever since.”
Cypress Grove’s 9-pound Ultimate Cheese Cake ($205+) starts with a 5-pound wheel of Humboldt Fog, a 3-pound Truffle Tremor in the middle and a 1-pound Humboldt Fog Mini on top . Optional add-ons include a 1-pound Truffle Tremor Mini ($27) or slices of Bermuda Triangle ($37.50) around the outside of the bottom two layers.
“We’re glad to see other cheesemakers and cheese shops jumping on board and offering their own versions,” Rasmussen says. “From groom’s cakes to gluten and sugar-free options, we love seeing cheese become a bigger part of special moments.”
Rasmussen also says Cypress Grove is launching a Facebook giveaway contest of its Ultimate Cheese Cake. Participants tell the company about someone they know who deserves the cake. Cypress Grove will choose one winner who will have a year to claim a Ultimate Cheese Cake for the special occasion of his/her choice. For more information, visit www.Facebook.com/CypressGrove.
Carr Valley Cheese Co., Middleton, Wisconsin, lists four “Celebration Cakes” on its website (www.carrvalleycheese.com), but says the possibilities are endless. The company began offering cakes in 2010.
“I see a movement away from the traditional cakes to more non-traditional choices, so this follows that trend,” says Patty Koenig, senior administrator, Carr Valley. “I see it growing for the future.”
Because Carr Valley offers different types of wheels, the cost varies on the age, style and milk used. Koenig says average prices are $150-$300.
Koenig also says a typical cake would be a 10-pound bottom layer of its Gouda, a 6-pound middle layer of its Glacier Point Blue and a 3-pound top layer of a custom-made Cranberry Chipotle Cheddar all dipped in white wax for $175. Most cake choices take two to three weeks to prepare. The white wax covering allows the hosts to decorate them as they please.
“These cakes have become a favorite of cheese lovers and have been served in place of dessert for those who do not have a sweet tooth, but more commonly we see these as a beautiful and creative way to serve artisan cheese during a cocktail hour or reception,” Koenig says. “The leftovers are a great party favor to offer guests. The partial wheels can be cut, wrapped and distributed to guests as they leave.”
The demand for cheese wheel wedding cakes isn’t just in the United States. Bespoke Cheese Co., England, offers several ready-to-go cake designs ($238-$301). However, Sophie Wilcock, owner, Bespoke Cheese, says the majority of its business is for custom Bespoke designs.
“Customers come to us with their favorite cheeses, the number of people attending the occasion, accompaniments needed and any other details,” Wilcock says. “Then we design a cake tailored to their requirements.”
Bespoke custom designs are typically for larger cakes costing around $475. Wilcock says hard cheeses, such as Cheddar and Yarg, are the most popular.
The biggest cheese wheel wedding cake Bespoke has made was 26-pounds of cheese. While Wilcock says she sees cheese wheel wedding cakes being ordered by mostly young couples, she says cheese knows no age.
“We’ve found while traditional cakes still have a place at weddings, couples are looking for something different –– quirkier,” Wilcock says. “Traditional cake is often left at the end of weddings, whereas cheese seems to go down well and can double as evening food for guests.”
Currently, Bespoke offers artisan cracker selections on request with cakes purchases. However, Wilcock says cake accompaniments is an area the company is looking to expand into in the near future.
While Sartori Cheese, Plymouth, Wisconsin, does not offer completed cheese wheel wedding cakes, it does offer 20-pound wheels of its Reserve Line cheese ($300-$350) via an online cheese shop for customers to assemble their own cakes.
“We’ve been helping cheese aficionados make their wedding dreams come true with these wheels,” says Hannah Geise, assistant marketing manager, Sartori Cheese. “Those connected to the local food, artisan movement are more likely to have this type of presentation.”
Geise says Sartori’s Merlot BellaVitano is popular for cheese wedding cake inquiries because of its purple rind. Additionally, the product description has a wedding theme.
“By wedding this rich, creamy cheese to the berry and plum notes of Merlot, we’ve created a marriage of flavors destined to make your taste buds say, ‘I do,’” says the Merlot BellaVitano description on Sartori’s website. “If you invite a few friends from our pairing guide — toasted walnuts, thin slices of prosciutto and semisweet chocolates for dessert — the honeymoon never has to end.”
Geise also says Sartori’s BellaVitano Gold also is a common choice because of its white/ivory tone. As a cake topper, the 6-pound wheel of Dolcina Gorgonzola ($100) is commonly purchased.
“With specialty cheese trends on the rise and more people falling in love with the artisan movement, we see this happening more often,” Geise says. “It’s something different and memorable, and cheese is a unique alternative for couples who aren’t interested in sweets.”
Fromagination also offers a service where its cheesemongers cut and serve the cake at the wedding or event. If declined, a cake diagram will be included to describe each layer, flavor profile and how to cut it.
Most commonly, Monteleone says fresh cheese is in demand in the summer months, pairing with strawberries, blueberries and champaign. In the fall and winter months, alpine-style and heavier cheeses are more common.
Wedding favors are another new segment of business Monteleone didn’t expect to grow at Fromagination. Instead of buying wedding favors, customers can offer slices of a reserve.
“It’s opening another area of development for us,” he says. “We never thought we would be in the wedding business.”
Monteleone keeps the store active with wedding events. In April, Fromagination held a vintage-inspired wedding open house. In fall, Monteleone says the store plans to be involved in more wedding expos. The company was even included in the June issue of Martha Stuart Weddings representing Wisconsin as it showcased its Wedding Favor Package in “50 Born-in-the-USA Favors”.
“We are learning about where cheese is becoming more popular and has presence,” Monteleone says.
U.S. Senate passes TPA bill; president expected to sign
June 26, 2015
WASHINGTON — The U.S. Senate Wednesday passed Trade Promotion Authority (TPA) by a vote of 60-38, sending the legislation to the president who is expected to sign it into law. TPA will help streamline the passage of trade agreements such as the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) by allowing only an up or down vote by Congress with no amendments. Last week the U.S. House passed the TPA legislation.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, who authored the bill along with Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., and House Ways and Means Committee Chairman Paul Ryan, R-Wis., says Washington has not acted on trade policy of this magnitude in nearly 15 years.
“With Trade Promotion Authority back in our trade arsenal, we can continue as the premier leader on global trade and open more international markets for American farmers, ranchers and businesses,” Hatch says.
Dairy and other agriculture industry organizations praised the Senate’s passage of TPA, saying it will help bring more export opportunities for their products. (See column, “Congress clears path for expanded trade opportunities,” on page 4 in this week’s issue of Cheese Market News.)
“The U.S. dairy industry will continue to grow and prosper with increased trade opportunities, and TPA is critical to ensuring that U.S. dairy companies receive the best deal in future trade agreements,” says Connie Tipton, president and CEO of the International Dairy Foods Association. “We thank all the senators and representatives who supported TPA and look forward to the president signing this important legislation into law as soon as possible.”
The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) say TPA, which expired in 2007, is important to the U.S. dairy industry because the United States now exports the equivalent of one-seventh of its milk production.
“The U.S. dairy industry has been a strong advocate for TPA,” says Jim Mulhern, president and CEO, NMPF. “In turn, we have seen a broad level of support for TPA from many members of Congress in dairy districts and states. TPA now must be used by our negotiators to conclude a positive outcome for U.S. dairy producers in TPP so that we are able to realize the net trade benefits that a strong agreement could offer to the industry.”
USDEC President Tom Suber adds, “To remain competitive globally, our sector needs trade agreements to maximize our export opportunities across the wide range of dairy products produced in the United States. We are confident that TPA will help the United States effectively pursue that path and expect our trade negotiators to insist on nothing less than balanced agreements with positive results for our industry.”
Additionally, NMPF and USDEC praised the Senate’s passage of complementary Trade Adjustment Assistance (TAA) legislation to help those who lose jobs as a result of trade, and they urged the House to quickly approve TAA and send it to the president as well. (See “House passes TPA bill separately from TAA” in last week’s issue of Cheese Market News.)
American Farm Bureau President Bob Stallman says American farmers and ranchers lead the world in exporting food, fiber and energy products, but for their success to continue, the United States must expand access to new markets across the globe.
“The Senate’s bipartisan passage of Trade Promotion Authority sends a strong signal to foreign governments that we mean business at the bargaining table and are ready to complete new agreements that will break down trade barriers and open new markets from Asia to Europe,” Stallman says.
GMA, IDFA appeal ruling on Vermont GMO labeling law
June 26, 2015
WASHINGTON — The Grocery Manufacturers Association (GMA), International Dairy Foods Association (IDFA), Snack Food Association and National Association of Manufacturers this week filed a brief with a federal appellate court claiming that a district court judge erred in refusing to block implementation of a Vermont law that would require the labeling of products with ingredients from genetically engineered (GE) plants.
In the appellate brief filed in the U.S. Court of Appeals for the Second Circuit, the four trade associations are challenging Vermont’s Act 120 as violating the First Amendment’s free-speech guarantee because they say it imposes burdensome new speech requirements on food manufacturers and retailers.
The Vermont law requires food manufacturers to include a label on certain products with GE ingredients that indicates the products are or may be “produced with genetic engineering.” It also prohibits manufacturers from using the word “natural” or similar words to describe those products.
On April 27, the U.S. District Court in Vermont denied a motion for preliminary injunction to stop the law from going into effect while the legal challenge was pending. Vermont’s labeling law is set to take effect in July 2016. (See “Judge rules lawsuit against Vermont GMO law can stand” in the May 1, 2015, issue of Cheese Market News.)
The brief alleges that the judge incorrectly concluded that the Vermont law compels only “purely factual and uncontroversial information” and therefore was subject to lesser judicial scrutiny. The issue of labeling foods with GE ingredients is anything but “uncontroversial,” the brief says: “Indeed, it is difficult to point to a current topic more hotly debated in many circles than genetic engineering of crops.”
The brief also alleges that the judge improperly concluded that Vermont had offered sufficient justification for the law beyond mere consumer curiosity and says, “the State simply lists the reasons why a consumer might be curious about GE-derived food — including public health, food safety, and environmental impact — without actually adopting any of those concerns.”
The groups say under precedent — from the same court of appeals that will hear this case — that justification is insufficient to compel speech under the First Amendment.
Additionally, the brief claims the district court erred in declining to grant a preliminary injunction, noting that the lower court agreed with the groups’ First Amendment challenge to Vermont’s ban on the use of the word “natural” in products containing GE ingredients. Because a First Amendment violation necessarily gives rise to irreparable harm — a prerequisite for an injunction — a preliminary injunction should have been issued, the brief says. The business groups contend that companies will be forced to revise their business practices now in order to comply with the law because of the lead time required to restructure their supply and distribution chains to segregate Vermont-bound products at each level.
“If Act 120 is struck down, their efforts will all be for naught, and the harm done to their businesses cannot be repaired,” the brief says. “The losses of employee time and energy, and the diversion of staff and resources to compliance issues instead of new business opportunities, are also severe irreparable harms to plaintiffs’ members.”
Winners named in 2015
Wisconsin State Fair Contest
June 26, 2015
WEST ALLIS, Wis. — Winners have been selected in the 28 classes of the 2015 Wisconsin State Fair Cheese & Butter Contest, which took place here yesterday at the Wisconsin State Fair Park.
The 2015 Grand Master Cheesemaker will be named and recognized, along with the other winning cheesemakers, during the Blue Ribbon Cheese & Butter Auction Aug. 13 at the Wisconsin State Fair Park. Funds raised at the auction, which features the sale of the blue-ribbon entries, benefit the Wisconsin State Fair Dairy Promotion Board to help support scholarships for students pursuing dairy-related degrees, the House of Moo dairy education center and Wisconsin State Fair milking demonstrations.
This year’s contest included 372 entries from throughout the state. The top three entries in each category are as follows:
• Mild Cheddar
First: Jeff Berg, Land O’Lakes, Kiel, Wis., 99.2.
Second: Dale Schmidt, Land O’Lakes, Kiel, Wis., 98.4.
Third: Dan Stearns, Agropur, Weyauwega, Wis., 98.0.
• Aged Cheddar
First: Terry Lensmire, Agropur, Weyauwega, Wis., 99.625.
Second: Jeff Berg, Land O’Lakes, Kiel, Wis., 99.525.
Third: Dale Schmidt, Land O’Lakes, Kiel, Wis., 99.375.
• Colby, Monterey Jack
First: Kerry Henning, The Artisan Cheese Exchange, Sheboygan, Wis., Colby, 99.225.
Second: Kirk Hansen, Nasonville Dairy, Marshfield, Wis., Colby Jack, 98.525.
Third: Dale Schmidt, Land O’Lakes, Kiel, Wis., Monterey Jack, 98.5.
• Swiss Styles
First: Silvan Blum, Chalet Cheese Co-op, Monroe, Wis., Swiss Wheel, 98.925.
Second: Neal Schwartz, Chalet Cheese Co-op, Monroe, Wis., Swiss Wheel, 98.9.
Third: Team Chalet, Chalet Cheese Co-op, Monroe, Wis., Baby Swiss Block, 98.35.
• Brick, Muenster
First: Gary Grossen, Babcock Hall Dairy Plant, Madison, Wis., Brick, 99.825.
Second: Dave Buholzer, Klondike Cheese Co., Monroe, Wis., Brick, 99.7.
Third: Chad Duhai, Zimmerman Cheese, South Wayne, Wis., Muenster, 99.6.
First: George Crave, Crave Brothers Farmstead Cheese, Waterloo, Wis., Part Skim Mozzarella Ball, 98.7.
Second: Ben Kolaske, BelGioioso Cheese, Green Bay, Wis., Mozzarella Snacking Cheese, 98.675.
Third: Terry Lensmire, Agropur, Luxemburg, Wis., Low Moisture Mozzarella, 98.6.
• String Cheese
First: Cesar Luis, Cesar’s Cheese, Columbus, Wis., Hand-Stretched String Cheese, 99.25.
Second: George Crave, Crave Brothers Farmstead Cheese, Waterloo, Wis., Farmers Rope, 99.1.
Third: George Crave, Crave Brothers Farmstead Cheese, Waterloo, Wis., String Cheese, 98.7.
• Blue Veined Cheese
First: Team Salemville, Saputo Specialty Cheese, Richfield, Wis., Reserve Blue Cheese, 99.075.
Second: Team Salemville, Saputo Specialty Cheese, Richfield, Wis., Blue Cheese, 98.875.
First: Team Salemville, Saputo Specialty Cheese, Richfield, Wis., Gorgonzola, 98.725.
First: Jim Demeter, Klondke Cheese Co., Monroe, Wis., Feta in Brine, 99.5.
Second: Lenny Bass, Lactalis USA, Belmont, Wis., Feta Chunk – Plain, 99.425.
Third: David Schmidt, Agropur, Weyauwega, Wis., Feta, 99.35.
• Flavored Pepper Cheese
First: Heriberto Nickolas, Maple Leaf Cheese Co-op, Monroe, Wis., Chipotle White Cheddar, 99.775.
Second: Duane Peterson, Arla Dofino, Kaukauna, Wis., Jalapeño Havarti, 99.525.
Third: Steve Stettler, Decatur Dairy, Brodhead, Wis., Pepper Havarti, 99.475.
• Flavored Soft Cheese
First: Tony Gessler, Lactalis USA, Merrill, Wis., Garlic & Herbs Spread, 98.9.
Second: George Crave, Crave Brothers Farmstead Cheese, Waterloo, Wis., Marinated Fresh Mozzarella, 98.85.
Third: Lyle Gast Jr., Lactalis USA, Merrill, Wis., Garden Vegetable Spread, 98.8.
• Flavored Semi-Soft Cheese
First: John (Randy) Pitman, Mill Creek Cheese, Arena, Wis., Caraway Brick, 99.4.
Second: John (Randy) Pitman, Mill Creek Cheese, Arena, Wis., Caraway Muenster, 99.05.
Third: Marieke Penterman, Holland’s Family Cheese, Thorp, Wis., Gouda Burning Mélange, 99.0.
• Smoked Flavored Cheese
First: Wally Hartwig, Zimmerman Cheese, South Wayne, Wis., Smoked Brick, 99.575.
Second: Tom Jenny, Carr Valley Cheese, Mauston, Wis., Smoked Creama Kasa, 99.525.
Third: Josh Johnson, Zimmerman Cheese, South Wayne, Wis., Smoked Brick, 99.475.
• Flavored Hard Cheese
First: Mike Matucheski, Sartori Co., Antigo, Wis., Merlot BellaVitano, 99.15.
Second: Mike Matucheski, Sartori Co., Antigo, Wis., Balsamic BellaVitano, 98.95.
Third: Mike Matucheski, Sartori Co., Antigo, Wis., Espresso BellaVitano, 98.4.
• Smear Ripened Cheese
First: Andy Hatch, Upland’s Cheese, Dodgeville, Wis., Pleasant Ridge Reserve, 99.35.
Second: Team Emmi Roth, Emmi Roth USA, Monroe, Wis., Grand Cru Reserve, 99.325.
Third: Team Emmi Roth, Emmi Roth USA, Monroe, Wis., Grand Cru Surchoix, 99.0.
• Cold Pack Cheese, Cheese Food
First: Joey Widmer, Widmer’s Cheese Cellars, Theresa, Wis., Aged Brick Spread, 99.625.
Second: Phil Lindemann, Pine River Pre-Pack, Newton, Wis., Chunky Bleu Flavor Cold Pack, 99.4.
Third: Dan Steeno, Pine River Pre-Pack, Newton, Wis., Chunky Bleu Flavor Cold Pack, 99.3.
• Pasteurized Process Cheese, Cheese Food, Cheese Spread
First: Process Cheese Team, AMPI, Portage, Wis., Pasteurized Process American, 98.7.
Second: Process Cheese Team, AMPI, Portage, Wis., Pasteurized Process American, 98.0.
Third: Dairy Farmers of America, Plymouth, Wis., Pasteurized Process American, 97.8.
• Reduced Fat or Lite Cheese
First: Jim Demeter, Klondike Cheese Co., Monroe, Wis., Reduced Fat Feta Mediterranean, 99.475.
Second: William Knox, Maple Leaf Cheese Co-op, Monroe, Wis., Low Fat Cheddar, 99.3.
Third: Dale Koenig, Foremost Farms USA, Clayton, Wis., Smoked Reduced Fat Provolone, 99.25.
• Open Class — Soft and Spreadable Cheese
First: Shawn Schult, Lactalis USA, Merrill, Wis., Whipped Cream Cheese, 99.325.
Second: George Crave, Crave Brothers Farmstead Cheese, Waterloo, Wis., Mascarpone, 99.15.
Third: Lenny Bass, Lactalis USA, Belmont, Wis., Brie Plain, 98.875.
First: Bruce Workman, Edelweiss Creamery, Monticello, Wis., 99.5.
Second: Steve Stettler, Decatur Dairy, Brodhead, Wis., 98.75.
Third: Decatur Dairy Team, Decatur Dairy, Brodhead, Wis., 98.725.
• Flavored Havarti
First: Ben Workman, Edelweiss Creamery, Monticello, Wis., Dill Havarti, 98.875.
Second: Team Emmi Roth, Emmi Roth USA, Monroe, Wis., Jalapeño Havarti, 98.75.
Third: Matt Henze, Decatur Dairy, Brodhead, Wis., Havarti Dill, 98.45.
• Open Class — Semi-Soft Cheese
First: Brett Krattiger, Maple Leaf Cheese, Monroe, Wis., Gouda, 99.775.
Second: Marieke Penterman, Holland’s Family Cheese, Thorp, Wis., Golden, 99.725.
Third: Brett Krattiger, Maple Leaf Cheese, Monroe, Wis., Swedish Fontina Wheel, 99.6.
• Open Class — Hard Cheese
First: Joel Pagel, Sartori Co., Antigo, Wis., Classic Asiago, 99.45.
Second: Mike Matucheski, Sartori Co., Antigo, Wis., BellaVitano Gold, 99.425.
Third: Saxon Creamery Team, Saxon Cheese, Cleveland, Wis., Saxon Alpine, 99.35.
• Flavored Goat Milk Cheese
First: Jean Rossard, Montchevre-Betin, Belmont, Wis., Blueberry Vanilla, 99.85.
Second: Adam Knapp, Woolwich Dairy USA, Lancaster, Wis., Cranberry Cinnamon Chevrai, 99.7.
Third: Adam Knapp, Woolwich Dairy USA, Lancaster, Wis., Wild Blueberry Vanilla Chevrai, 99.5.
• Natural Goat Milk Cheese
First: Pam Hodgson, Sartori Co., Plymouth, Wis., Extra Aged Goat Cheese, 98.85.
Second: Martin Chavez, Montchevre-Betin, Belmont, Wis., Cabrie, 98.0.
Third: Doug Waechter, Montchevre-Betin, Belmont, Wis., Fromage Blanc, 97.95.
• Latin American Cheese
First: Sam Sweeney, Chula Vista Cheese, Browntown, Wis., Queso Quesadilla, 99.3.
Second: Nick Siedschlag, Chula Vista Cheese, Browntown, Wis., Queso Quesadilla, 99.1.
Third: Chad Duhai, Zimmerman Cheese, South Wayne, Wis., Queso Para Fundir, 99.075.
• Sheep & Mixed Milk Cheese
First: Mike Matucheski, Sartori Co., Antigo, Wis., Pastorale Blend, 99.6.
Second: Anna Thomas Bates, Landmark Creamery, Albany, Wis., Anabasque, 99.375.
Third: Bob Koenig, Carr Valley Cheese, Mauston, Wis., Bessie’s Blend, 99.35.
First: Don Much, Grassland Dairy Products, Greenwood, Wis., salted butter, 99.45.
Second: Reedsburg First Shift, Foremost Farms USA, Reedsburg, Wis., salted butter, 98.95.
Third: Team Chaseburg, Organic Valley, LaFarge, Wis., European Style Cultured Unsalted Butter, 98.9.
Analysts anticipate dairy price
weakness ahead as milk flows
June 19, 2015
By Alyssa Mitchell
MADISON, Wis. — Dairy market analysts note that with healthy milk production levels in the United States and across the globe, price weakness is anticipated for dairy commodities in the second half of this year.
“We should still see steady to growing milk production over the next couple of months,” says Bill Brooks, dairy economist with FCStone LLC, Chicago. Brooks this week presented a “Dairy Outlook” at FCStone’s 12th Annual Dairy Outlook Conference on Thursday in Chicago.
USDA’s May 2015 milk production report released Thursday shows an increase of 1.4 percent in total U.S. milk production over May 2014, as well as an increase of 1.4 percent in the 23 major milk-producing states.
Brooks notes that while profitability for U.S. dairy farmers is not as strong as last year, it’s still decent.
USDA’s Dairy Market News says industry contacts report cheese plants are running at full production.
“In some cases, plants have added Sunday shifts to use the abundant milk for cheesemaking,” Dairy Market News says. “Although there are some reports of disposals, most suggest the milk is being used fully and heavily discounted loads of milk are harder to find. Some manufacturers report additional loads of milk can be found at $1-$2 under Class.”
Brooks anticipates the Class I milk price this year will average $16.62 per hundredweight, down from $23.29 in 2014. He estimates Class I will average $17.30 per hundredweight in 2016.
Class II milk is forecast to average $15.33 per hundredweight, Brooks says. Also a large drop from 2014’s $23.34, he anticipates 2016 Class II will average $15.77.
Brooks’ Class III average price forecast, at $16.51 per hundredweight, is a little stronger given the somewhat unexpected strength in U.S. Cheddar prices at the Chicago Mercantile Exchange (CME). He anticipates CME Cheddar blocks to average $1.6639 per pound in 2015 and climb to $1.7331 in 2016. Class III milk is anticipated to average $17.61 in 2016, he says, noting this is higher than USDA’s latest estimate of $16.15-$17.15 in last week’s “World Agricultural Supply and Demand Estimates” report (see article in last week’s issue).
“Our U.S. demand picture has been good, so in some ways, we’ve kind of fallen back into being a domestically-oriented market,” Brooks says.
“We’re due for a recession, though,” he adds. “We’ve had six years of growth.”
Brooks notes that with U.S. prices higher than global counterparts, he does not believe the United States will be able to maintain the level of dairy exports it has seen in recent years, and he anticipates demand also will be strained domestically in the long term.
“Lower fuel prices have helped put more disposable income into consumers’ pockets, but at the same time, higher or new health care costs have diverted a fair portion of that,” he says.
Meanwhile, a Q2 2015 Dairy Quarterly report released this week by the Rabobank Food & Agribusiness Research and Advisory Group says that while U.S. milk prices have fallen considerably in the last eight months, a surplus of milk on the international market is likely to squeeze U.S. producer margins further as 2015 progresses.
“While we are well off the record level achieved in late 2014, producer milk prices in the U.S. are still 15 percent and 57 percent higher than those presently being paid to dairy farmers in the Netherlands and New Zealand,” says Tim Hunt, Rabobank global dairy strategist and report lead author. “Sustaining these kinds of premiums is going to get tougher in coming months as the impacts of an oversupplied international market filter back home.”
The price of key dairy commodities fell further in international markets in the second quarter and now sit at the lowest levels since 2009, Rabobank notes.
After falling marginally in the first quarter of 2015, production in key export regions rose above prior years in April as weather improved and European Union (EU) quotas were removed, Rabobank adds. In the face of ongoing weakness in China and Russia, other buyers stepped in to take most of this product, though buy-side stocks are now large and supply-side stocks are also showing signs of growing. Weaker commodity markets have fed through to the farmgate in regions like New Zealand and the EU, pushing milk prices toward or even below breakeven for producers.
The U.S. dairy market has held up better than the international market to date, Rabobank says. U.S. wholesale market pricing for nonfat dry milk and whey eased in the second quarter, with product trading in line with international pricing. However, U.S. cheese and butter prices rose and remained at a significant premium to prices in international markets in mid-June, as strong domestic demand for these products, barriers to import and the Cooperatives Working Together program kept the market tight.
Nonetheless, the second half of 2015 is likely to prove a challenging period for U.S. milk producers, Hunt notes.
Rabobank expects the international market to remain oversupplied through the coming six months as supply growth continues to outstrip demand, as China continues to rebalance and buyers end their recent stock build programs.
In this environment, sustaining the current premium for the U.S. domestic market through the second half of the year is likely to prove an impossible task, Rabobank says.
“The higher prices in place in the U.S. market are encouraging much greater production growth here than in most regions of the world,” Hunt says. “At the same time, exports are falling as processors try to direct more product to the more profitable domestic market, and imports are rising as fast as they can within the constraints of U.S. trade barriers.”
This is likely to boost local supply availability faster than the domestic market can soak up and weigh down on U.S. dairy prices, he adds.
“We expect butter and cheese prices to come in considerably below the current levels suggested by the CME forward curve in Q3 and 4, as the international milk glut feeds its way into the U.S. market,” Hunt says.
He adds that Class III milk could easily be priced below $15 per hundredweight by the fourth quarter of 2015, driving the income-over-feed costs below $7 per hundredweight for the average U.S. farmer.
“At (the) global level, we still have more milk than market right now, and unfortunately U.S. producers are unlikely to get through the next six months as easily as current futures pricing suggests,” Hunt says.
Industry stresses need for
federal GMO labeling regs
June 19, 2015
WASHINGTON — This week the U.S. House Energy and Commerce Committee held a hearing to discuss legislation on labeling food containing genetically-modified ingredients (GMOs).
During the hearing, titled “A National Framework for the Review and Labeling of Biotechnology in Food,” committee members discussed an amendment crafted jointly by the House Agriculture Committee and the Energy and Commerce Committee and heard testimony from industry, government and consumer group witnesses.
The hearing comes as Vermont is poised to become the first state to require labeling on foods with GMOs in July 2016, a law that is being challenged in court by food industry groups including the Grocery Manufacturers Association (GMA) and International Dairy Foods Association (IDFA). These and other industry groups instead support federal legislation — the topic of the hearing’s discussion — that would prevent states from passing their own labeling requirements for such foods.
“A patchwork of arbitrary and inconsistent state and local labeling laws will raise consumer costs and negatively affect our ability to enhance food safety, food quality and environmental sustainability,” says Agriculture Committee Chairman K. Michael Conaway, R-Texas. “Legislation to protect and promote interstate commerce in agricultural products derived through the use and non-use of plant based genetic engineering is of critical importance. As the legislative process continues, I look forward to continuing to receive input from stakeholders and technical assistance from the Department of Agriculture to ensure the final text is correct, workable and enjoys significant bipartisan support.”
The National Milk Producers Federation (NMPF) says Thursday’s hearing reinforces the benefits of a national standard for labeling foods with genetically modified ingredients over a patchwork of state requirements that it says would confuse consumers and frustrate food marketers.
“State-by-state GMO labeling is simply not an option,” says Jim Mulhern, NMPF president and CEO. “A better approach is federal legislation endorsed by NMPF that would set up voluntary regulations for labeling foods with GMO ingredients.”
GMA says the costs, complexities and challenges for food manufacturers to comply with Vermont’s food labeling law show the need for Congress to pass federal legislation setting a uniform national food labeling standard. GMA recently sent a letter to Vermont Gov. Peter Shumlin, saying that the costs to change labels and supply chain systems will be so great that these costs could exceed revenue to food manufacturers from the sale of products in the state.
GMA adds that testimony at this week’s House committee hearing warned of the higher food costs and greater consumer confusion from a range of different state labeling mandates and highlighted the need for a uniform national labeling standard.
“This legislation to protect our national food labeling system has strong bipartisan support, and we are pleased to see congressional committees holding hearings on the bill to understand the issues,” says Pamela G. Bailey, president and CEO, GMA. “It is vitally important that the committees move this bill forward so it can be considered and passed by the House this summer and then in the Senate as soon as possible.”
Meanwhile, opponents to the bill say the new amendment will not only prohibit state and local laws on GMO labeling, but also will restrict state and local governments from regulating genetically engineered crops.
“This bill would strip away a state or local government’s basic rights of local control and hand the biotech industry everything it wants on a silver platter,” says Andrew Kimbrell, executive director of consumer group Center for Food Safety. “No member of Congress that cares about the rights and concerns of his or her constituents should support this bill.”
May milk production climbs
1.4 percent over year earlier
June 19, 2015
WASHINGTON — Milk production in the 23 major milk-producing states during May totaled 17.18 billion pounds, up 1.4 percent from May 2014, according to preliminary data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)
April revised production, at 16.63 billion pounds, was up 1.8 percent from April 2014. The April revision represents an increase of 3 million pounds, or less than 0.1 percent, from last month’s preliminary production estimate.
Production per cow in the 23 major states averaged 1,990 pounds in May, 11 pounds above May 2014. This is the highest production per cow for the month of May since the 23-state series began in 2003, NASS says.
The number of milk cows on farms in the 23 major states was 8.63 million head, 72,000 head more than May 2014, and 4,000 head more than April 2015.
For the entire United States, NASS reports milk production totaled 18.35 billion pounds, an increase of 1.4 percent from May 2014.
Production per cow in the United States averaged 1,971 pounds in May, 15 pounds above May 2014.
The number of milk cows on farms in the United States was 9.31 million head, 58,000 head more than May 2014 and 3,000 head more than April 2015.
California, the nation’s top milk-producing state, was home to 1.78 million cows in May, unchanged from May 2014 and also unchanged from April 2015. However, production per cow in California in May averaged 2,050 pounds, down 60 pounds from May 2014, driving a 2.9-percent production decline in the May-to-May comparison to 3.65 billion pounds.
Wisconsin followed with production of 2.50 billion pounds in May, up 4.4 percent from a year earlier. The increase in Wisconsin was driven by both an increase in cow numbers as well as stronger production. Wisconsin was home to 1.28 million cows in May, an increase of 9,000 head from a year earlier and unchanged from a month earlier. Production per cow in Wisconsin in May averaged 1,955 pounds, up 70 pounds from May 2014.
FDA: PHOs not GRAS,
must be removed by 2018
June 19, 2015
WASHINGTON — FDA this week announced that based on a thorough review of scientific evidence, the agency is finalizing its determination that partially hydrogenated oils (PHOs), the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” (GRAS) for use in human food.
Under the declaratory order published in Wednesday’s Federal Register, FDA is giving food manufacturers three years to remove PHOs from products.
“The FDA’s action on this major source of artificial trans fats demonstrates the agency’s commitment to the heart health of all Americans,” says Stephen Ostroff, acting commissioner, FDA. “This action is expected to reduce coronary artery disease and prevent thousands of fatal heart attacks each year.”
The determination will significantly reduce the use of PHOs, a major source of artificial trans fats, in the food supply, FDA says. In 2013, the agency made a tentative determination that PHOs no longer could be considered GRAS and is finalizing that determination after considering public comments. (See “FDA says it will ban artificial trans fats” in the Nov. 8, 2013, issue of Cheese Market News.)
Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. While trans fat intake has significantly decreased, the current intake remains a public health concern. The Institute of Medicine recommends that consumption of trans fat be as low as possible while consuming a nutritionally-adequate diet.
FDA says it set a compliance period of three years to allow companies to either reformulate products without PHOs and/or petition FDA to permit specific uses of PHOs. Following the compliance period, no PHOs can be added to human food unless they are otherwise approved by FDA.
Trans fat can be found in some processed foods, such as certain desserts, microwave popcorn products, frozen pizzas, margarines and coffee creamers.
Currently, foods are allowed to be labeled as having “0” grams trans fat if they contain less than 0.5 grams of trans fat per serving, including PHOs.
Many companies already have removed PHOs from processed foods, and FDA says it anticipates more will eliminate them ahead of the three-year compliance date.
The Grocery Manufacturers Association (GMA) says it is pleased that FDA has acted in a manner that both addresses FDA’s concerns and minimizes unnecessary disruptions to commerce, adding that the association will work in collaboration with FDA to further reduce PHOs in foods.
“GMA’s food additive petition to FDA will show that the presence of trans fat from the proposed low-level uses of PHOs is as safe as the naturally-occurring trans fat present in the normal diet,” GMA says. “Food and beverage companies have already voluntarily lowered the amount of trans fat added to food products by more than 86 percent and will continue lowering PHO use in foods.”
IOI Loders Croklaan, a downstream processing division of IOI Group, one of the world’s largest vertically integrated palm oil producers, since 2003 has been focused on removing trans fat and PHO from all applications. The company has a wide range of sustainable and traceable solutions and also offers technical expertise to develop custom solutions to support customers’ conformation to the FDA mandate.
In addition, in anticipation of FDA’s announcement this week, IOI Loders Croklaan has developed a hands-on, educational course, “PHO Removal 201,” which offers participants the opportunity to work side-by-side with technical experts to learn about options to successfully replace PHOs. The course will be held in the company’s Creative Studio in Channahon, Illinois, Aug. 26-27. For more information on this and future courses, visit www.Go-No-PHO.com.