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Dairy stakeholders stress the
importance of trade to Trump

January 13, 2017

WASHINGTON — In a letter sent late last week to President-elect Donald Trump and Vice President-elect Michael Pence, agricultural organizations including the National Milk Producers Federation (NMPF) highlight the importance of trade to U.S. farmers.

Echoing points made in a letter sent by NMPF last month, the groups note that they know securing positive benefits for U.S. farmers, ranchers and workers in trade will be a priority in the Trump administration, noting Trump and Pence throughout the campaign said they are committed to having farmer voices at the table when decisions are made that affect the industry. The groups add, however, that this also must include enforcing existing agreements so that other countries abide by their commitments, as well as expanding market access for U.S. producers through new agreements.

“As the Trump administration assembles its team and policies, U.S. agricultural trade interests must be maintained, not only in existing markets but by expanding access to new markets,” the groups say.

Farm groups must continue to emphasize that the health of U.S. agriculture depends on the industry’s ability to sell its products outside of the United States, says Jim Mulhern, president and CEO, NMPF. “The growth of America’s dairy sector is directly tied to our ability to export,” Mulhern says. “We have a positive trade balance in agriculture and don’t want to see those hard-earned export markets eroded.”

Mulhern notes the U.S. dairy sector exports 14 percent of its milk production. He adds that last year these exports were worth more than $5 billion and generated more than 120,000 jobs in dairy farming, manufacturing and related sectors.

“Any disruption in exports of dairy and other food products would have devastating consequences for our farmers and the many American processing and transportation industries and workers supported by these exports,” he says.

The groups note the special importance of trading relationships with China, Canada and Mexico — U.S. farmers’ and ranchers’ first, second and third largest export markets.

Focusing especially on Canada, NMPF and other dairy organizations including the International Dairy Foods Association, National Association of State Departments of Agriculture and U.S. Dairy Export Council this week told President-elect Trump that Canada’s existing and soon-to-be-expanded protectionist policies are intentionally designed to block imports from the United States. (See “New York Gov. Andrew M. Cuomo sends letter urging Canada to reconsider dairy regulations” in the Nov. 4, 2016, issue of Cheese Market News.)

These policies are in direct violation of Canada’s trade commitments under the North American Free Trade Act (NAFTA) and the World Trade Organization, the organizations say in a letter urging Trump and his key cabinet members to take immediate action.

The letter outlines estimates from USDA that show each $1 billion of U.S. dairy exports generates more than 20,000 jobs for Americans and almost $3 billion of economic output.

U.S. dairy suppliers already are reporting that Canada’s actions are resulting in lost revenues and jobs for dairy farmers and processors across the United States, the groups say.

“This negative impact is conservatively estimated at $150 million worth of ultrafiltered milk exports being lost by companies in Wisconsin and New York, which are highly reliant on their trade with Canada,” the groups say. “In fact, the entire U.S. dairy industry is being hurt, as milk prices are being driven down nationally by Canada’s trade actions. Having an even wider impact on America’s dairy farmers and processors, additional large volumes of skim milk powder will be forced onto the thinly traded global market resulting in a further depression of prices that will negatively impact the revenues of dairy farmers around the world.”

The U.S. dairy industry already is restricted by Canada’s exorbitant tariffs, the groups add, and only limited market access is granted under NAFTA. Canada clearly is flouting its trade obligations by implementing and enforcing these policies, they say.

“The U.S. dairy industry is highly competitive internationally, and overseas markets represent a vital source of future growth opportunities including thousands of new American jobs,” the groups say. “Not long ago, the United States was a net importer of dairy products, but now our nation benefits from a dairy trade surplus of over $2 billion. Enforcement of current trade agreements, whether bilateral or multilateral in nature, is central to strengthening the U.S. economy.”

Copied on the letter were several Cabinet nominees, including Robert Lighthizer, the Trump administration’s nominee for U.S. Trade Representative, along with the leaders and members of the House and Senate agricultural committees.

Meanwhile, in a speech at the Washington International Trade Association this week, outgoing U.S. Trade Representative Michael Froman cautioned the incoming administration on withdrawing from key trade agreements including the Trans-Pacific Partnership (TPP).

“Now, I can’t imagine why any president would want to abdicate our leadership in the Asia-Pacific, to be responsible for handing the keys of the castle to China, for driving our historic allies and China’s historic rivals into China’s arms,” Froman says. “It would be a strategic miscalculation of enormous proportions.”

The rest of the world is not standing still, he adds.

“The EU (European Union) is implementing FTAs with Singapore and Vietnam and is negotiating FTAs with Japan, Mexico, Australia, New Zealand and Mercosur, among others,” Froman says. “Australia has negotiated FTAs with Japan, Korea and China in the last few years. Peru announced that, if TPP did not move forward, it would seek negotiations with China and Russia. Chile and Canada have said the same about China.

“As other countries move forward with their agreements, not only will we see opportunities lost, but we will see current market share eroded,” he adds.

“Trade is not a panacea for the world’s problems, but it certainly isn’t the cause of them either,” Froman says. “We don’t do trade for trade’s sake. We do trade because trade, done right, is a powerful tool for improving the lives of people across the United States and around the world.”


Goat’s milk cheese gaining
in demand, quality, variety

January 13, 2017

Editor’s Note: “Cheese of the Month” is Cheese Market News’ exclusive profile series exploring various cheese types. Each month, CMN highlights a different cheese in this feature, giving our readers a comprehensive look at production, marketing, sales and in-depth aspects of each profiled cheese type. Please read on to learn about this month’s featured variety: goat’s milk cheese.

By Rena Archwamety

MADISON, Wis. — Goat’s milk cheeses have come a long way from the earthy-flavored Chèvre that once dominated the category. While Fresh Chèvre still is the most popular type of goat’s milk cheese in the United States, both the quality and varieties of goat’s milk cheeses have increased by more than a kid’s leap. Soft-ripened goat’s milk cheeses, as well as hard Alpine-style varieties, also have gained success in both sales and awards circuits.

“The quality of (goat’s milk) cheese today is substantially better from most plants than it was years ago. This has, I believe, to do with the quality of milk coming into the plants. It doesn’t matter how good the cheesemaker is. You cannot make good cheese without good milk,” says Larry Hedrich, general manager of LaClare Farms, Malone, Wisconsin.

“It used to be the exception to see goat cheese in the supermarket. Now I see many, many retail outlets carrying at least some goat cheese — not only Chèvre, but carrying some harder goat cheese also,” he adds. “I think the public has begun to appreciate the quality of the goat cheese being made now. I think we’ve still got a challenge of getting beyond the cheese they had years ago that had a goaty aftertaste. With the cheeses we produce, literally we have had people surprised with how good it tastes.”

Hedrich, whose family’s farm has been actively involved with dairy goats since 1978 and with its goat’s milk cheese business since 2008, notes that there are special challenges to making cheeses with goat’s milk.

“Goat’s milk is more fragile than cow’s milk,” he says. “It’s easy to damage the composition of the milk. If traveling long distances, with partial loads, the milk sloshing around in the truck can be impacted before it even gets to the cheesemaker.”

Sandy Goldberg, vice president of business development, Saputo Cheese USA Inc., says another challenge is that peak supply and demand periods do not sync up.

“Goat milk production peaks in the spring and is lowest in the winter, but goat cheese demand is highest during the winter holidays,” he says. “Saputo Cheese USA sources goat milk from local farmers to ensure that we utilize the freshest milk possible.”

• Growing category

According to IRI data, 9.7 million pounds of goat’s milk cheeses were sold in the 52 weeks ending Nov. 27, up 8 percent from a year earlier. IRI also notes that goat cheese volume sales have gained over each of the last six years. Despite the growth, goat’s milk cheese still holds only a 0.32 percent share of natural cheese in the United States (fixed weight, not including deli cheese).

Log/roll, a common form for fresh Chèvre, is the most popular form of goat cheese with 50 percent share of sales, up 6.5 percent in the latest 52 weeks, IRI reports. Crumbled is the next most popular with 21.5 percent share, and chunk has especially grown (+20 percent), coming in third with 18.2 percent share. The majority of goat cheese is sold in small packages — less than 8 ounces — though larger sizes, especially 32-ounce, are gaining, IRI says. The average price per pound of goat cheese is $14.95, varying with holiday seasons and promotions.

IRI data indicate that goat’s milk cheese indexes highest with millennials and households with income greater than $100,000. The number of U.S. households buying goat’s milk cheese has increased 0.5 percent over the past year to 8.5 percent. Goat cheese volume also indexes highest in Boston, New England and other Northeast metro areas.

• New investments

Swiss-based Emmi has greatly increased its goat’s milk businesses since it first entered the category in 2010 with the acquisition of Cypress Grove in Arcata, California. Emmi since has acquired seven other goat’s milk product companies around the world, including Redwood Hill Farm, Sebastopol, California, in 2015; Spain’s Lácteos Caprinos in December 2016; and Meyenberg, Turlock, California, just last week.

“The segment of goat’s milk products is growing whereas consumption of cow’s milk products is stagnating or even declining in some countries,” says Sibylle Umiker, head of media relations, Emmi. “In addition, they generate higher margins compared to conventional cow’s milk products. Finally, sales of goat’s cheese are growing in countries that are particularly relevant for Emmi, such as the U.S. But, due to modest volumes, the goat’s milk products business is still a niche business for Emmi (less than 5 percent of the group’s total sales).

Umiker says Emmi encourages the businesses it acquires to continue operating their businesses autonomously, but the company also offers collaboration through its network of other companies and European master cheesemakers, and has made some additional investments in its goat’s milk acquisitions.

For example, six years after Emmi acquired Cypress Grove, the California company still is run by the same people who were there prior to the merger, though it has added a new production facility as well as a state-of-the-art goat farm that serves as a model goat dairy and learning center for aspiring goat dairy farmers in the United States and abroad.

LaClare Farms also has expanded in recent years, opening a new farmstead dairy plant in 2013 and significantly increasing its milk intake and cheese production.

“With more availability of goat’s milk for our plant, we will be able to produce at a much more optimal level than we have in the past,” Hedrich says, noting that more people are now actively looking at goat farming and producing quality milk. “We essentially have doubled the number of farms we are taking milk from in our plant ... we doubled the size of our herd, also. We do some farmstead cheese right here and are studying the potential of producing non-GMO products here on the farm.”

• Varied cheeses

Canada-based Saputo, which acquired Woolwich Dairy in October 2015, offers goat’s milk cheese through its U.S. cheese division in several formats, including logs, pails and crumbles. The company also offers imported specialty goat’s milk cheeses, such as Bries, spreads and aged items.

“We’ve observed growth in the goat cheese category, particularly in specialty deli and foodservice,” Goldberg says. “Saputo is constantly looking for new opportunities to meet consumer needs and drive excitement in the goat cheese category.”

In recent years, Saputo has launched single-serve goat cheese medallions as well as goat’s milk Cheddar in both shredded and sliced formats, all under the Joan of Arc brand.

Cypress Grove, one of the first major goat’s milk cheese producers in the United States, has grown slowly but steadily over its 30+ years, according to the company’s president, Pamela Dressler, who adds that the majority of Cypress Grove’s cheeses were the first of their type for U.S. goat’s milk cheeses.

“Humboldt Fog, for example, was the first soft-ripened goat cheese with ash. Now there are many,” she says. “Unique combinations of flavors such as lavender and fennel pollen, the use of dill pollen and an assortment of spices, set the fresh line on a pedestal.”

Cypress Grove’s ash-ripened Humboldt Fog remains its most popular cheese, Dressler says. She adds that the company’s imported cheeses, made in collaboration with a Dutch cheese master from a special recipe, continue to grow quickly.

“We are always playing with new cheese varieties and have several ‘in the kitchen’ at all times,” she says. “That said, we do not want to introduce a cheese just for the sake of having something new. We want it to be innovative and stellar.”

Hedrich also says LaClare Farms always is working on new cheeses. One of its more recent introductions is Cave-Aged Chandoka, a mixed cow’s and goat’s milk cheese aged in the Chicago-area Standard Market cheese caves, which was awarded second place overall at the 2015 American Cheese Society.

“We do mixed milk cheese because there still are a lot of people who are not sure they want to have only goat cheese. We look at it as an introductory cheese,” Hedrich says, adding that LaClare Farms has seen more and more demand for all its goat’s milk cheeses.

“Our cheese across the board has escalated in sales. That’s what we’re looking for. We don’t want to have all our eggs in one basket. We like having an array of different cheeses,” he says. “A lot of people are looking for a Pepper Jack-type cheese and do not realize it’s available in goat’s milk. You can do any kind of cheese — it’s up to the imagination of the cheesemaker and getting it out to the public.”


Dairy groups praise bill
on milk labeling standards

January 13, 2017

WASHINGTON — New Senate legislation to enforce the proper labeling of imitation dairy products drew praise this week from the International Dairy Foods Association (IDFA) and the National Milk Producers Federation (NMPF), which together agreed that steps need to be taken to defend the integrity of federal food labeling standards and prevent the misbranding of dairy imitators.

The Defending Against Imitations and Replacements of Yogurt, Milk and Cheese to Promote Regular Intake of Dairy Everyday (DAIRY PRIDE) Act, introduced by Sen. Tammy Baldwin, D-Wis., would protect the integrity of food standards by prompting FDA to enforce existing labeling requirements, specifying foods labeled as “milk” and “cheese” have to come from dairy animals. The bill would require FDA to issue a guidance for nationwide enforcement of these definitions within 90 days. It also would require FDA to report to Congress two years after the bill’s enactment to hold the agency accountable for this update in their enforcement obligations.

“For too long, the FDA has turned a blind eye to the misbranding of imitation dairy products, despite the decades-old federal law that milk comes from animals, not vegetables or nuts,” says Jim Mulhern, president and CEO, NMPF. “None of these imitators provides the same high quality and quantity of nutrition offered by real milk. Sen. Baldwin’s DAIRY PRIDE Act will simply ensure that FDA enforces current law by requiring marketers of these imitation products to call them something other than milk.”

FDA in the Code of Federal Regulations defines milk as a product of a cow. Though existing federal policy is clear on this subject, FDA has not challenged the incorrect use of the terms “milk,” “yogurt” and “cheese” on imitators that have proliferated during the past two decades, according to the dairy industry.

“These plant-based products are imitations, but they are not substitutes for the comprehensive nutrient package offered by real milk,” says Michael Dykes, president and CEO, IDFA. “The reason we have food standards is to preserve the integrity and consistency of what’s inside the packages. Milk should be milk.”

The lack of enforcement of proper dairy terms in the U.S. market stands in sharp contrast to how the matter is handled in other nations, which actually police the matter, the organizations say. While the term “almond milk” is seen on products sold in the United States, it is absent from the same brand of almond beverage also sold in Canada and the United Kingdom.

FarmFirst Dairy Cooperative, Madison, Wisconsin, also praised the bill.

“Consumers deserve to be treated with respect, and that begins with proper and accurate food labels,” says John Rettler of Tin Valley Farms, Neosho, Wisconsin, a FarmFirst member. “Milk is clearly defined by the FDA, and this definition should also be enforced. It’s about time the FDA upheld its responsibility of enforcing existing labeling requirements, especially when it comes to dairy.”

David Cooper, general manager, FarmFirst Dairy Cooperative, notes that the timing of the legislation couldn’t be better, as the National Academy of Science Committee recently suggested a reduction in the amount of dairy servings recommended for women and children involved in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). (See “Dairy stakeholders express concerns with committee’s proposed changes to WIC program” in last week’s issue of Cheese Market News.)

“Dairy products are rich in nutrients and are an important source of nutrition for children and adults,” Cooper says. “Hopefully this legislation can serve to remind everyone of the powerful package that dairy provides consumers, in addition to why this clarity needs to be made within the marketplace.”

The Baldwin legislation comes one month after Reps. Mike Simpson, R-Idaho, and Peter Welch, D-Vt., supported by a bipartisan coalition of 32 other members of the House, sent a letter to FDA urging the agency to more aggressively police the improper use of dairy terminology. (See “Dairy groups applaud congressional letter to FDA on stricter milk labeling enforcement” in the Dec. 23, 2016, issue of Cheese Market News.)


DuPont expands cheese
research, cultures facilities

January 13, 2017

NEW CENTURY, Kan. — DuPont Nutrition & Health this week announced an investment in a laboratory that serves the North American cheese industry. In addition to expanded physical space at the Kansas City metro area lab, new equipment has been installed, including three bio fermenters to simulate external pH control starter production, an incubator for growing cultures, a cheese vat for making cheese and two environmental cabinets for aging cheese.

Previously, testing at the facility was limited to a lab environment. With these upgrades, the facility now is equipped to test cultures in real world environments, as well as to manufacture and age cheese.

“This expansion of our research and development capabilities brings us closer than ever to our customers and enables us to innovate in collaboration with them,” says Roald Mason, director of dairy sales, North America. “These improvements not only allow us to optimize our current cultures offerings and tailor them to our individual customers, but also equip us to develop new retail and finished products.”

DuPont also has added two professionals to its cheese industry innovation team who have more than 35 years of combined experience in the cheese industry. Brian Bartholomew joined the DuPont cheese innovation team as senior applications specialist and James Musetti joined in the application technologist role.

“These moves reinforce our commitment to the cheese and dairy industry,” says Cathy Miller, director of innovation, North America. “For years, cheesemakers and others in the dairy industry have relied on the DuPont Danisco brand of ingredients. Today, our customers continue to rely not only on our broad portfolio of ingredients, but also our unique knowledge, experience and innovation capabilities to advance their business and stay at the forefront of ideas.”

DuPont Nutrition & Health has a long history of serving the cheese and dairy industry. The company serves customers in all corners of the cheese industry — whether fresh, aged or processed, from soft cheese to hard cheese, and from soft-ripened to washed-rind. The DuPont Danisco portfolio offering to the industry includes cultures, enzymes and tailored ingredient systems.

Meanwhile, DuPont Nutrition & Health also has announced it will increase its culture manufacturing capacity in Europe and invest $60 million in expanding three culture production sites as a response to increasing demand for frozen and freeze-dried starter cultures from the global yogurt, fresh fermented and cheese markets.

“This additional capacity in cultures ensures that we maintain our recognized reputation for excellent stability and performance by leading customers around the world,” says Matthias Heinzel, president, DuPont Nutrition & Health. “Our investment will enable us to support their growth and geographic expansion.”

The investments will be at the DuPont Nutrition & Health plants in Sassenage and Epernon, France, and Niebüll, Germany. The first phase of the plan will be commissioned this year with an investment in the Sassenage plant. Part of this project will include increased fermentation capacity, biomass separation and freeze-drying capacity. This will result in increased production capacity for freeze-dried cultures by the end of 2018.

Frozen cultures production capacity also will be increased by investments in the Niebüll and Epernon plants. At Niebüll, some investment already has been made in a new pelletizer, and further investment will be made to expand ultra-cold storage to increase supply of frozen cultures. In Epernon, existing fermentation capacity will be leveraged by investment in a new fermenter.

“The global dairy industry is expected to grow in the next five years driven by the higher consumption of fresh dairy products especially in Asia, as well as by the increased demand for cheese and cheese products for the foodservice industry,” says John Rea, DuPont Nutrition & Health probiotics, cultures and food protection leader. “The investment in both freeze-dried and frozen pellets cultures formats will reinforce DuPont Nutrition & Health’s leading position to serve and anticipates the needs of the global yogurt, fresh fermented and cheese industry.”


Alouette Cheese imports and markets expanded line of French specialties
Company’s lineup includes Saint André, Suprême and Saint Agur

By Kate Sander

NEW HOLLAND, Pa. — Alouette Cheese USA, owned by France-based Savencia, has increased its product line to include a broad range of both domestic and imported specialty cheeses.

In the past year, Alouette Cheese had added imported French specialty cheeses to its existing line of domestic spreads, Bries, crumbles and goat’s milk cheeses, according to Emmanuelle Hofer-Louis, vice president of sales, Alouette Cheese.

Alouette Cheese now is able to provide global category management in the specialty cheese category.

“Previously, my portfolio was limited to premium spreadable cheese, Brie, goat cheese and crumbles,” Hofer-Louis says. “We now have a broader portfolio of products, and that changes the dynamic for us.”

The addition to Alouette’s lineup follows divestitures and structural changes for parent company Savencia, formerly known as Bongrain. At the end of 2014, Savencia sold its U.S. import subsidiary Schratter Foods. While Schratter Foods continues to operate as a separately-owned import company, excluded from the sale were all brands owned by Savencia. Now all Savencia specialty cheese products are being imported and marketed in the United States by Alouette Cheese.

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Agriculture sector abuzz as
Trump selects cabinet posts

January 6, 2017

WASHINGTON — Just two weeks ahead of President-elect Donald Trump’s inauguration, dairy stakeholders are eagerly awaiting an announcement on the incoming president’s pick for U.S. agriculture secretary.

While various contenders have been vetted for the position, Politico this week reports that two sources say former Georgia Gov. Sonny Perdue is the likely front-runner.

Politico reports Perdue is a Republican who served two terms as Georgia governor who grew up on a row farm in Georgia. He has a doctorate in veterinary medicine from the University of Georgia and owns a number of grain and feed processing, farm transportation and crop export companies.

However, CNN this week reported that former California Lt. Gov. Abel Maldonado also is a top contender for the position, citing “a source familiar with the transition process.” Maldonado also has a farming background and owns a vineyard in California, CNN reports.

As current U.S. Agriculture Secretary Tom Vilsack approaches the end of his term, news broke this week that the former governor of Iowa could be the next president of the U.S. Dairy Export Council (USDEC). Former USDEC President Tom Suber retired at the end of 2016. (See Suber’s guest column, “U.S. dairy exports: Lessons from past progress,” in the Nov. 11, 2016, issue of Cheese Market News.)

Media reports from Politico, citing an article from Agri-Pulse, say a “source familiar with” Vilsack’s plans says he is poised to take the reins at USDEC.

Joanna Hunter, executive vice president of consumer confidence for Dairy Management Inc. (DMI) told Cheese Market News Wednesday she could not confirm any speculation on the matter at this time. USDEC is primarily supported by DMI through the producer checkoff that builds on collaborative industry partnerships with processors, trading companies and others to build global demand for U.S. dairy products.

Meanwhile, dairy industry stakeholders this week praised Trump’s selection of Robert Lighthizer as the next U.S. Trade Representative (USTR).

“We welcome the nomination of Robert Lighthizer as the new U.S. Trade Representative,” says Michael D. Dykes, president and CEO of the International Dairy Foods Association. “The U.S. dairy industry is highly competitive internationally, and we look forward to working with him on issues critical to our members.”

Jim Mulhern, president and CEO of the National Milk Producers Federation (AFBF), and Matt McKnight, senior vice president of market access, regulatory and industry affairs, USDEC, note the role of USTR is critical to successful U.S. engagement with growing global markets.

NMPF and USDEC say Lighthizer’s previous experience including positions as deputy USTR and chief of staff for the Senate Finance Committee will serve him well in forging a path forward on trade policy to benefit the United States.

“The U.S. dairy industry, like most other agricultural sectors across America, has significantly benefited from the agricultural provisions of prior U.S. free trade agreements,” Mulhern and McKnight say.

“At the same time, however,” they add, “we face a growing wave of non-tariff barriers that threaten to impede overseas sales.”

NMPF and USDEC note North American Free Trade Agreement partners epitomize both sides of that story.

“Our dairy agreement with Mexico has created an export market worth well over $1 billion a year, while on the other side of the border, Canada has at every opportunity decided to flout its dairy trade commitments to the U.S.,” they say.

“A focus on preserving and growing what is working well, while cracking down further on what is not, will help to expand global markets for U.S. dairy farmers and the companies that turn their milk into nutritious dairy products shipped all over the world,” NMPF and USDEC say. “Given that every $1 billion in U.S. dairy exports translates into over 23,000 jobs in the dairy sector and related industries, expanding dairy sales abroad is a strong job-creation strategy.”

The groups conclude that they look forward to continuing their dialogue with the incoming administration on the importance of pursuing well-negotiated trade agreements that bolster the industry’s ability to serve consumers in foreign markets.

American Farm Bureau Federation President Zippy Duvall this week also expressed “strong support” for Trump’s nomination of Scott Pruitt, attorney general of Oklahoma, as administrator of the U.S. Environmental Protection Agency (EPA). In a letter to U.S. Sens. John Barrasso, R-Wyo., and Tom Carper, D-Del., chair and ranking member, respectively, of the Senate Committee on Environment and Public Works, Duvall urges the lawmakers to vote in favor of Pruitt’s confirmation.
Duvall cites Pruitt’s leadership against EPA’s “Waters of the U.S.” (WOTUS) rule, saying the agency overstepped the bounds laid by Congress and the Supreme Court.

“No one cares more about the responsible stewardship of our land, air and water than American farmers and ranchers. Our livelihoods depend on it,” Duvall says. “In recent years, farmers and ranchers have suffered under burdensome, unnecessary and too often unlawful federal regulations promulgated by the EPA. We desperately need an administrator who understands the challenges our farmers and ranchers face in producing safe, wholesome and affordable food for our nation and the world.”

He adds that Pruitt “will put the EPA back on track and ensure that federal decisions are based on sound science, not politics.”


German cheesemakers offer
traditional and new cheeses

January 6, 2017

Editor’s note: Passport to Cheese is Cheese Market News’ feature series exploring the dairy industries of nations around the world. Each month this series takes an in-depth look at various nations/regions’ dairy industries with coverage of their milk and cheese statistics and key issues affecting them. The nations’ interplay with the United States also is explored. We are pleased to introduce our latest country — Germany.

By Rena Archwamety

MADISON, Wis. — Many beloved cheeses in the United States — Butterkäse, Muenster and Limburger, for example — can trace their roots to Germany, as immigrants brought their cheesemaking traditions overseas.

In turn, many of Germany’s most popular cheeses — Emmentaler, Brie, Gouda, Tilsiter and others — were brought to Germany by immigrants from other European countries, such as Switzerland, France and Holland, according to CMA Global Partners-German Foods, an independent importer, broker and trade promotion agency based in Washington, D.C.

Germany, with its various regional traditions, landscapes and methods of production, has a long history of cheesemaking and boasts more than 600 different types of cheese, according to CMA. Bavaria, which shares borders with Austria, the Czech Republic and Switzerland in the southeast corner of Germany, is home to more than 400 of these cheeses as well as other major dairy production.

“Milk production in Germany is concentrated in the area of green land and near the coast of the North Sea or the Baltic Sea. Cost of production is lower there,” says Eckhard Heuser, CEO of the Association of the German Dairy Industry (Milchindustrie-Verband, or MIV), which represents about 80 dairy companies and 95 percent of the German milk pool.

“In Bavaria, we have all the big brands: Müller Milch, Danone ... One of the advantages of Bavaria is the small distance to Italy. Italy is the biggest importer of German milk products,” Heuser adds.
Germany currently has about 71,000 dairy farms with 4.3 million cows, generating 32.8 million metric tons of milk per year, according to MIV data. In 2015, Germany processed 2.5 million metric tons of cheese, led by Gouda, Edam and Mozzarella varieties, respectively. Cheese and dairy production, as well as exports, have shown steady growth.

“Factors that have contributed to growth was better export performance,” Heuser says. “Fifty percent of our dairy products (milk equivalent, 2015) were sold outside of Germany. Also the abolition of milk quotas was a reason for higher milk production.”

• German cheeses

In Germany, cheese is widely regarded as a healthy food and often is consumed with bread as well as used in cooking and baking, according to a September 2016 report, “Cheese in Germany,” published by Euromonitor. Some consumers also use cheese in their breakfast routines rather than the slightly more traditional jam.

In 2015, cheese consumption in Germany averaged 24.5 kilograms (54.0 pounds) per person, according to MIV. Euromonitor adds that cheese sales are expected to remain stable over the next five years.

“Germans often trade up or down with cheese, depending on changes in their income, but they do not want to do without,” the Euromonitor report notes. “The use of cheese on bread and for cooking and baking makes it a basic food that Germans do not want to forego.”

Bavaria is home to many of Germany’s famous cheeses, including the PDO Allgäuer Emmentaler, first introduced in the 1820s by Swiss dairymen, and Champignon Cambozola, a cheese developed in the 1970s that has become a popular import in the United States.

“One of the reasons cheeses of Bavaria are very distinct is the milk they use,” says Flynne Wiley, director of administration and marketing, Champignon North America. “They mostly maintain Swiss Brown cow breeds. They are hardy to withstand cold winters in the valley and go into the mountains to graze on grasses and flowers in the summer. Their milk is very good for making cheese, with a high fat and protein content.”

Germany’s Kaserei Champignon was established in 1908 by cheesemaker Julius Hirschle and cheese wholesaler Leopold Immler in the Allgäu region of Bavaria. Hirschle had developed a Camembert that had a distinct mushroom-like aroma, therefore naming it “Champignon Camembert,” which became one of the first consumer brands established in the German dairy industry.

“Before 1908, Camembert wasn’t very well-known in Bavaria. There were a lot of hard, mountain cheeses made there,” Wiley says. “If you go to Bavaria now, you will most certainly find a Camembert in a breakfast cheese selection. Cheese is a staple of the Bavarian diet, and because of the company’s presence in Bavaria, there are a lot of soft-ripened cheeses.”

Champignon now is well-known for its original Cambozola, which is made with Penicillium roqueforti and contains characteristics of Camembert and Blue cheeses. The company started making the cheese in the 1970s and exporting it to the United States in the early 1980s through Champignon North America, which is headquartered in Englewood Cliffs, New Jersey.

“It’s not one or the other, it’s its own type of cheese,” Wiley says of Cambozola.

More recently, Champignon introduced the Cambozola Black Label, which is in a smaller and taller format than the original, and which was named Supreme Champion at the 2013 World Cheese Awards. One of its latest introductions, a wax-covered soft Blue cheese called Grand Noir, won reserve champion at the 2016 International Cheese Awards. Champignon also sells a number of other traditional and new cheeses, including soft-ripened cheeses with herbs and spices, and the washed-rind Rougette and Limburger.

“Many of our cheesemakers have been trained in traditional methods, but also in innovative technologies,” Wiley says. “We think of our cheesemakers of having one foot in tradition and one in innovation. While we look back, we also look forward and make sure we always innovate.”

• U.S. imports

U.S. imports of specialty German cheeses such as Cambozola have been growing, but the largest portion of German cheese imports are commodity-type cheeses, according to Thom Phiebig, owner and president of Galaxy Dairy Products, Ramsey, New Jersey, which imports cheeses from Bayernland, a large co-op in Nurnberg, Germany.

In 2015, the United States imported 9,316 metric tons of cheese from Germany, almost half of which was Swiss/Emmentaler, according to data from USDA’s Foreign Agricultural Service.
Galaxy Dairy Products imports mainly bulk Swiss from Bayernland, which is sold in sliced formats in club stores. The company also imports Butterkäse from Bayernland, which has done well in stores like Costco and Trader Joe’s.

“The quality is always good, very consistent,” Phiebig says, adding that there tends to be a bit more “taste” to German cheeses compared to similar domestically-produced styles, due in part to Germany’s grass-fed cows. “German cheeses are rather consistent and have a pretty good flavor.”

The German Swiss and other commodity cheeses tend to be price-driven, Phiebig notes.

“It’s not sold because it’s German, but it’s sold because it’s the right price,” he says. “I think Germany made a mistake 40 years ago by not creating a brand or image.”

He adds that with a renewed interest in specialty items, there has been growth in U.S. demand for German specialty cheeses, though these comprise relatively small volumes compared to commodity imports.

Champignon in 2016 rebranded St. Mang Limburger as well as a line of soft-ripened cheeses to “St. Mang Bavarian Made” in an effort to highlight the story and origins behind these cheeses for international consumers.

“It goes back to interest generally in specialty cheese, and the interest in the origin, the story of cheeses and what’s behind them,” Wiley says of the rebranding. “People ask, ‘Where is it from?’ We wanted to bring forward Bavaria as a cheese producer, where they are making soft-ripened cheeses, and the cheesemakers are very skilled in how they do that.”


U.S. cheese production up
2.7 percent in November

January 6, 2017

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 1.01 billion pounds in November, 2.7 percent above November 2015 but 2.6 percent below October 2016, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart on page 11.) When adjusting for the length of the months, November production was 0.6 percent higher than October 2016 on an average daily basis.

Production of Mozzarella, the nation’s most-produced cheese, was 338.8 million pounds in November, up 1.6 percent from November 2015. Total Italian-type production, of which Mozzarella is the largest component, was up 2.6 percent from a year earlier to 435.9 million pounds.

Cheddar production totaled 281.6 million pounds in November, according to NASS, a 5.9-percent increase from November 2015. Total American-type production, of which Cheddar is the largest component, totaled 394.8 million pounds, up 3.9 percent from November 2015.

Wisconsin led the nation’s cheese production with 265.5 million pounds in November, up 3.8 percent from its production a year earlier. California followed with 209.4 million pounds, up 4.8 percent.

The next four cheese-producing states in November were Idaho with 74.3 million pounds, down 2.8 percent from its production a year earlier; New York with 69.8 million pounds, up 0.1 percent; New Mexico with 65.5 million pounds,up 0.6 percent; and Minnesota with 53.8 million pounds, down 3.6 percent.

NASS reports total U.S. butter production in November totaled 143.7 million pounds, down 5.7 percent from November 2015 but up 1.5 percent from October 2016. When adjusting for the length of the months, November butter production was up 4.8 percent on an average daily basis.

California led the nation’s butter production 42.1 million pounds, a 7.5-percent decline from its production a year earlier.


Emmi acquires Meyenberg goat’s milk business

January 6, 2017

LUCERNE, Switzerland — Swiss-based Emmi Group this week announced it has acquired Jackson-Mitchell Inc., Turlock, California, which produces the Meyenberg brand of goat’s milk products.

Jackson Mitchell Inc., also known as Meyenberg, is a leading supplier of goat’s milk and evaporated and powdered goat’s milk, distributing its products across the United States in national supermarket chains, regional retailers, specialty businesses and online. With 30 employees at production sites in Turlock, California, and Yellville, Arkansas, Meyenberg generates annual sales of almost $30 million. Meyenberg also works with California cheese producers Cypress Grove and Redwood Hill Farm & Creamery (both owned by Emmi) to bridge seasonal milk production.

Emmi is acquiring the company from the Jackson and Mitchell families. The parties have agreed not to disclose the purchase price.

“Since there is no successor in place from within the family, we took our time coming to a decision on the future of our family company,” says 89-year old Meyenberg CEO and co-owner Robert Jackson, whose father acquired the company from its founder, John P. Meyenberg. “We saw how successful the acquisition of Redwood Hill Farm & Creamery was and became convinced that we would be able to trust Emmi with our company as well. Continuity is very important to us.”

Jackson will continue in his role as CEO during the transition period and assist with the search for a suitable successor as a member of the board of directors. COO and board member Frank Fillman and CFO Dough Buehrle, who have been employed at Jackson-Mitchell for many years, will continue to work for the company in their current roles. No other staff changes are planned.

Emmi has acquired a number of goat’s milk processors since 2010. In addition to Cypress Grove and Redwood Hill, Emmi owns Netherlands-based AVH dairy, and last month Emmi announced the acquisition of Spanish goat’s milk company Lácteos Caprinos (see “Emmi acquires Spain’s Lácteos Caprinos” in last week’s issue of Cheese Market News). Emmi says the acquisition of Meyenberg offers opportunities in milk procurement in particular.

“Goat’s milk is in high demand and short supply in the U.S., but it is also a very challenging product as a result of its highly seasonal nature,” says Matthias Kunz, executive vice president Americas for the Emmi Group. “We hope that Meyenberg’s excellent relations with goat’s milk farmers in California, Idaho, Kansas and Missouri will result in opportunities for both of our Californian goat’s milk processors, Cypress Grove and Redwood Hill Farm & Creamery, and that we will be able to even better meet the growing demand for these products as a result.”


Leaders discuss food labeling,
social media, new employees

December 30, 2016

MADISON, Wis. — Food labeling, the use of social media and recruitment of new employees — all are issues discussed in the second part of Cheese Market News’ round table this week.

Each year, the CMN staff asks dairy executives throughout the nation to participate in our round table by providing their written responses to several questions we pose regarding issues affecting the industry. We then run a selection of those responses in a two-part series.

If you missed the first part of the round table last week, please visit our website at to see our panelists’ discussion of hot topics including price forecasts, the Trump administration, the 2018 Farm Bill and proposed federal order changes.

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

This year’s round table participants are:

• Bill Brooks, dairy economist, INTL FCStone, Dearborn, Missouri

• John Iapichino Jr., vice president, Biazzo Dairy Products Inc., Ridgefield, New Jersey

• Bruce Krupke, executive vice president, Northeast Dairy Foods Association Inc., Syracuse, New York

• Sheryl Meshke, co-president and CEO, Associated Milk Producers Inc., New Ulm, Minnesota

• Tim Omer, president/managing director, Emmi Roth USA, Fitchburg, Wisconsin

• Anja Raudabaugh, CEO, Western United Dairymen, Modesto, California

• Bob Starkey, vice president of business development, Winona Foods, Green Bay, Wisconsin

• John Wilson, senior vice president and chief fluid marketing officer, Dairy Farmers of America, Kansas City, Missouri

How likely do you think it is that the European Union (EU) will succeed in its efforts to protect certain food names (e.g., parmesan, feta) to the point where restrictions on the use of those names affect U.S. cheesemakers domestically? If the EU succeeds in its efforts to limit the use of those names, what steps might the U.S. cheese industry need to take?

Brooks: Unfortunately, it could be very likely and even more so if the United States pulls away from its position as one of the lead countries negotiating trade agreements. As for a U.S. response, I am not involved enough in the marketing of dairy products to give an educated answer.

Iapichino: I don’t believe the EU will be successful in protecting the names in the United States if our domestic product is kept in the United States and other countries other than the EU. If the EU does succeed we will need to develop names close to the EU food names and educate consumers.

Omer: Short term, I don’t see much traction due to the negative environment around trade deals. If it does happen, a tremendous amount of money will need to be spent.

Raudabaugh: The opportunity for the EU to negotiate restrictions in the use of certain common food names rests with the ability of the EU to negotiate trade agreements around the globe. The Trans-Pacific Partnership did include language to prevent participating countries from agreeing to those restrictions. The United States will now need to adjust to the new likelihood that trade agreements will be negotiated country-by-country in order to protect the future use of common food names.

Starkey: I feel it is still too soon to weigh in one way or the other. The EU argues that geographic naming not only matters culturally, but economically as well. However, the impact to the domestic dairy trade would be devastating and we share the potential impact economically as well, including loss of jobs, new packaging, potential legal hurdles and the expense of marketing new names to the consumer. But, it does give the industry an awakening that maybe it’s time to develop cheese with unique names, much like we are doing today. Re-educating the consumer will likely be a hurdle that will take time. The Transatlantic Trade and Investment Partnership, along with other trade agreements, should be first on the new administration’s plate.

The paperwork surrounding food safety requirements is considered by many to be burdensome. Would it be realistic for major retailers to get together to come up with a common form for all cheesemakers to use? What other ways might cheese companies and their customers work together to lessen paperwork burdens? (Editor’s note: Edward Zimmerman detailed his thoughts on how such common paperwork might work in a guest column for CMN. For details, check it out at

Iapichino: Regulations are very burdensome in the cheese industry. Food safety is always a main priority. Industry and government should come up with one standard that will apply for both. In addition, that standard should be the same for all customers purchasing product. This at least will streamline the compliance standards.

Krupke: I heard the other day a member say they are hiring a new regulatory compliance employee just to make sure they are adopting and adhering to the tremendous burden of all kinds of local, state and federal government regulations. Yes, it could be good to form a consensus of customers to formulate a common policy and paperwork. Expectation by the customer is driving policies, sometimes farther than government intent. Good communication with customers is essential; it provides them with better insight into how our businesses are run, which in turn could help reduce unnecessary and costly requests. This includes consumer education as well because they are driving much of our everyday customer policies and demands.

Meshke: All AMPI plants are Safe Quality Food (SQF) certified. While this provides a considerable amount of information and verification of our processes for our customers, it doesn’t capture everything. In addition, the paperwork associated with the Food Safety Modernization Act alone is substantial, and will always be required by the FDA. The weight of fiscal responsibility on the cheesemaker in this regard is substantially more than what the customer experiences.

Starkey: As an industry we need to stand strong together and develop a standard template that includes all necessary information to support the Food Safety Modernization Act and the new labeling laws that are coming in 2017. We have too many forms/templates that are individualistic to certain customers and the time and resources to complete each request is tremendous. Whether it’s a Global Food Safety Initiative standard and/or a standard set forth by the International Dairy Foods Association or other dairy industry associations, we have to develop a systematic method of reducing the amount of paperwork required to fulfill these requests.

How should the dairy industry respond to increased consumer interest in how food is produced, including labels such as “all natural” and “GMO-free”? What are the challenges and opportunities?

Brooks: The dairy industry needs to continue to educate the consumer that dairy products are a safe and beneficial part of their diet, no matter the production method. Some producers are doing a very good job of showing how they produce the foodstuffs that consumers depend on. The effort to educate consumers will continue to grow and by taking control of the narrative the industry can provide accurate information to consumers so they can make an informed choice about what they eat.

Krupke: It is critical and essential food labeling terms and descriptors are overseen and monitored by government. Without strict oversight, it leads to misuse, confusion and less trust from the ultimate consumer. We should respond to consumers with as much transparency, truth and response as possible. I’ve witnessed our industry over the last 25 years go from the Real and natural goodness product to one which is questioned and at worse no longer trusted. We need to be very truthful about our disclaimers and marketing intentions. Misleading consumers even slightly, or giving question about our quality, consistency and safety only leads to lower sales and rejection by consumers.

Meshke: The dairy industry is already responding to increased consumer interest in how food is produced. By implementing programs like Safe Quality Food (SQF) and the National Dairy FARM Program — Farmers Assuring Responsible Management — we can assure the safety of our products and the animal care provided by our dairy farmer-owners.

Food labeling should be informative and not deceptive. Absence claims don’t educate consumers about what they are purchasing. Instead, they attach negative connotations to practices that are backed by research and deemed safe.

Omer: The market is looking for transparency. The dairy industry has a great real world story, and we need to define ourselves before someone with a different agenda does.

Wilson: We believe that food labels should be based on sound science, not marketing claims, so that the label isn’t misleading for consumers. We have a good, truthful story to tell.

Ultimately, dairy products like milk, yogurt and cheese are ideally suited to meet consumers’ nutritional needs by providing calcium, plus eight other essential nutrients.

What new products and/or packaging have you seen introduced in the past year that are truly innovative? Are there new consumer-driven trends you see taking shape?

Krupke: Consumers still want convenience, especially the millennials. They want everything easy, with clearly marked packages, such as what are you going to do for me. Some say consumers want even more information; I think they have enough already, to our industry’s potential detriment. Products which include ingredient flips for yogurt or easy to use packaging are popular. In Europe, the marketers provide many more different types of packaging for different types of age groups than here in the United States. Size matters, and when mom and dad are empty nesters, they no longer need to purchase the gallon of milk, and they hate to waste food. Products need to continue to meet the demands and having a good understanding of where and how your product is sold is essential.

Buy local and help the environment are still continuing to grow with consumers. Organic foods are still growing but are starting to level off, possibly reaching their saturation points.

Meshke: The renaissance of butter has brought innovation to a category that previously experienced very little. Looking ahead, we are focusing on the growing popularity of flavored cheese.

Starkey: Convenience and portion control are two trends that Winona Foods continues to lay a foundation for through resealable packaging, smaller pack sizes or bite sized offerings. The “on the go” consumer or the snacking generation will continue to drive these two categories for years to come. Also, our vegan offering continues to grow not only with the vegan/vegetarian community, but with those consumers that perceive vegan as a healthier alternative to dairy-based products or better for the environment. If you haven’t heard of the “flexitarian diet,” it’s here and growing enormously.

Wilson: From an innovation standpoint, I think there’s a lot of potential with flavored cheeses right now. New milk flavors and packaging, single-serve cottage cheeses as well as squeeze-able packaging also have potential to help drive additional eating occasions and growth for dairy foods. It certainly feels like the movement toward higher butterfat products also seems real. It’s exciting!

There has been a lot of discussion about the number of people nearing retirement age in the dairy industry. How is your company addressing this? What strategies have you implemented, or noticed others use, to successfully bring younger people into the dairy industry?

Iapichino: When talented people are found outside of the industry we train them on the art of cheesemaking as well as all around plant operations in each department. We recruit people who have a passion for food so they can take the ownership of quality, productivity and food safety.

Krupke: Labor is a key question which comes up in almost any member meeting I have. Skilled labor is at a premium. Even more importantly, the mindset of an employee is becoming even more important than the skill level. Members tell me they want individuals with the right attitude — a get it done, and find a way to fix it now, efficiently, type of personality. They can find ways to train the skill; they can’t train common sense and attitude. Many are looking to hire relatives or are starting to rely more heavily on personal referrals. They tend to have more success in finding quality long-term loyal employees with this method. In the Northeast, efforts are underway to make high school students aware of the many opportunities of working in a successful manufacturing plant which provides steady, quality and competitive employment.

Omer: Talent development and management is extremely important to Emmi. Identifying key people and providing them with a career track and the support to achieve their personal goals is critical to our company.

Raudabaugh: For a decade and a half Western United Dairymen has conducted the California Dairy Leaders Program offering leadership skills development and educational seminars on various aspects of the dairy industry to early-career people in the state. Our board members consider this role to be vital to the future of the dairy industry in California. And the program is paying off with several graduates now serving in leadership positions in several state and national organizations devoted to advancing the interests of California’s dairy industry.

Wilson: Dairy Farmers of America is absolutely focused on recruiting more millennials into our workforce. We actively recruit at colleges, and our internship program has been valuable in helping bring in young people who, in many cases, we end up hiring. Additionally, we are developing mentorship and leadership programs for employees to allow them opportunities to gain additional exposure and further their development within the agriculture industry. Finally, we continue to work on our succession planning so as to ensure continued success of the cooperative.

Beyond these strategies, what’s really exciting is that we’re getting significant interest from the millennial age group in working with and for dairy farmers. We think that this is likely rooted in the fact that many millennials are particularly interested in where their food comes from and the overall food supply chain. So, working for and being part of a cooperative that contributes to the success of the dairy farmers producing our food, is quite frankly, pretty cool.

What do you see as the pros and cons in the use of social media in marketing dairy products and in spreading the word about animal care and food safety issues?

Brooks: It provides a broad platform to reach and educate individuals who are very removed from how their food is produced. Hopefully, by using social media, consumers learn enough about how food is produced that the message by those who have an agenda against animal agriculture is reduced. Using social media could make that user a target of those organizations that will look for any misstep by animal agriculture to push their own agenda.

Iapichino: We see social media as a great avenue for educating customers on how to prepare recipes using dairy products. Videos should be prepared showing customers how animals are cared for on the farm and the positive impact it makes on our lives. Similarly, videos should be created showing what the food industry is doing today to protect our food chain. Cons of social media today is when false comments are made and consumers are not aware of the truth.

Meshke: Social media joins print and video communications as an important tool in connecting with others. Utilizing each tool correctly is key. The reach and affordability of social media is profound and presents a vocal platform to share the positive messages of dairy with a large audience. However, inaccurate and misleading information spreads fast via online social channels and lacks proper oversight.

Raudabaugh: The use of social media to communicate our story is a must, especially with younger dairy consumers. We constantly update our social media presence in order to let our members know what we are doing on their behalf and to inform consumers of how our industry is responding to demand for our products and the care our farmers take to produce those products responsibly.

Wilson: One of the biggest benefits of social media is its immediacy. Consumers, who are unaware of the facts or are confused on a subject, can be quickly and efficiently communicated with via social channels.

As an industry, we need to continue to leverage social media in order to proactively and positively tell the story about how food is produced and the benefits of dairy products.

What other key issues will affect the dairy industry in 2017?

Brooks: China will once again have influence over markets with regard to revenues. On the cost side, South American grain and oilseeds production could impact dairy producer feed costs either direction. How the new administration ultimately decides to handle immigration and the Renewable Fuel Standard program also will affect the industry. The fate of EPA’s Waters of the United States — in court and with the new administration — could drive costs higher for industry participants, but more than likely the impact in 2017 will be negligible.

Iapichino: Labor in farming will be a key issue with the possible new reforms on immigration from our new administration. It is extremely difficult today to find individuals that want to do extremely hard work even paying a fair commensurate salary.

Krupke: One word, Trump. His influence on national policies and directives could be huge. Topics such as the farm bill, EPA, labor, immigration and trade all will have an impact on our dairy industry in 2017 and well beyond. These policies will trickle down to regional and state policies affecting legislation and regulation.

The dairy industry is in a world marketplace, period. We can’t and shouldn’t look back. We need a cohesive industry working together, not separately or segmented. Dairy farmers and processors should work together to establish goals which will keep us competitive. We need to establish a mission to always ask the question: Are we adopting policies making our industry competitive or not? If we can be productive and competitive, then we will almost always have a place where we can sell our products, and the world is at our doorstep. Emerging societies who want to eat better will include quality and competitively priced dairy products from the United States.

Omer: Our biggest issue is finding people. Our industry needs to work together to find solutions to recruit, hire and retain people that want careers in the dairy industry.

Raudabaugh: The farm labor crisis. Western United Dairymen will continue its national leadership role in championing the three priorities for dairy in immigration reform: legal status for our current workforce, access to year-round workers and an effective program for legal new workers when they are needed.

Wilson: From a global perspective, we are watching world milk supplies, particularly in Europe, as well as demand that’s continuing to grow in countries throughout Asia and the Middle East. Additionally, oil prices will likely affect the industry in 2017. If we continue to see oil prices rebound, there’s potential for dairy demand growth because there’s more money to spend in oil exporting countries, and as a result, we see higher demands for dairy in those countries.

On the domestic front, immigration issues on the farm are certainly paramount for the industry as well as staying focused on the continued innovation of dairy products. Finally, as we head into 2017, changes within our federal and state government will certainly impact regulations on dairy farmers specifically and the dairy industry as a whole.


Rabobank Q4 update says
further price rally expected

December 30, 2016

NEW YORK — Milk supply from dairy export regions has fallen sharply in the second half of 2016, with milk volumes from Oceania and Europe severely challenged, according to “Rabobank Dairy Quarterly Q4 2016.” In addition, domestic demand in the United States and Europe continued to strengthen, negating the need for further stock growth and reducing volumes available for export.

As a result, global dairy prices have “rocketed” upward, increasing by more than 45 percent in the second half of 2016, Rabobank says. Most of the domestic demand growth is for cheese and butter; therefore, the spread in prices across dairy stocks will remain wide, with demand for butterfat driving the market, and surplus protein, including European stocks, weighing on the market.

According to Rabobank, the current price rally has further upside to come as milk supply growth across the export regions will take time, despite improving milk prices. Prices across the dairy product matrix will diverge, driven by higher butterfat demand and surplus protein stocks.

Significant recovery of production and volumes available for export will be delayed until the second half of 2017 as the new Oceania season commences, the report notes. China will return to the international market, and Rabobank forecasts imports to rise by 20 percent.

However, further strengthening of the U.S. dollar, combined with rising commodity prices, will challenge demand from other key importing regions, Rabobank adds.

The report notes that while stock build was a major feature earlier in 2016, demand in export regions has remained positive. This is particularly the case in the United States, where low unemployment, low oil prices and anticipated economic stimulus have added to robust consumer confidence, fueling demand for cheese, butter and cream products, Rabobank says.

According to the report, the result of tightening global production in the second half of 2016 is that stockbuilding has ceased and prices have started to rise. Although these prices will filter through to farmers, reduced cow numbers and production conditions are likely to cause a lag in response, creating further upward pressure on price, the report says.

Rabobank says a key factor will be what happens to the accumulated sell-side stocks, in particular skim milk powder (SMP) in Europe and higher-than-normal levels of cheese in the United States. Despite likely higher levels of exports to China as the market moves into the new year’s very low tariff-rate quota, demand from other import regions is likely to remain subdued, the report notes.

While Rabobank anticipates further price rallies as the market moves into 2017, as the year progresses and production grows, commodity prices will start to moderate, limited by the headwinds of a strong U.S. dollar and probably continued low oil prices, the report says.

With the continued strengthening of the U.S. economy and the inflationary pressures of expected economic stimulus, U.S. interest rates can be expected to continue to rise, Rabobank says. As a result, the U.S. dollar will continue to strengthen. This will, in turn, strengthen the headwinds to U.S. exporters and, at the same time, act as a limiting factor on the level of price rises to be expected in U.S. dollar-denominated markets.

Any changes in interest rate/economic stimulus policy in the United States or across any of the main dairy exporting regions can distort the competitiveness of export in the global market, the report adds.

Rabobank notes the current price rally is caused more by falling supply than growth in demand. As prices rise, emerging markets — already suffering the effects of a strong U.S. dollar and slower income growth — will test demand thresholds in these markets. This “affordability” issue will counter some of the pressure as the price rally continues to develop.


WNY Cheese receives $2 million in state funding

December 30, 2016

ALBANY, N.Y. — New York Gov. Andrew M. Cuomo recently announced $2 million in state funding to support the construction of a new 30,000-square-foot WNY Cheese Enterprise LLC facility in Pavilion, New York.

Empire State Development will provide $2 million in funding to support the $49.7 million project, including a $1.3 million Upstate Revitalization Initiative Capital Grant. Additionally, up to $700,000 will be awarded in performance-based Excelsior Jobs Program tax credits in return for 30 new jobs. The project also is made possible by a $506,000 Community Development Block Grant from New York State Homes and Community Renewal, which was awarded to Livingston County.

“This new production facility and agricultural collaboration will support upstate dairy farmers, create jobs and help bring more New York products to the national stage,” Cuomo says. “This is a great collaboration to help spur further growth in these industries for years to come.”

The $49.7 million production facility is part of a collaboration between Craigs Station Ventures, Denmark-based Arla Foods and Dairy Farmers of America. The facility will create 30 new jobs and is projected annually to produce approximately 15 million pounds of cheese, primarily Cheddar, which then will be transported and packaged for retail sale.

The new WNY Cheese plant will be adjacent to Craigs Station Creamery, a milk plant that opened in 2014 as a collaboration between DFA and Craig’s Station Ventures — a partnership of eight Livingston and Wyoming county dairy farms in New York. DFA will manage operations of the new plant, holding a controlling 70 percent stake in the venture. Arla will have a 20-percent stake in the facility and will market cheese produced there. The Craigs Station farmers will hold the remaining 10 percent stake in the enterprise. In total, local farms are expected to supply more than 16 million gallons of raw milk to the facility each year. Construction of the new facility is underway and is expected to be complete by the end of 2017.


NFU seeks help from Congress for dairy producers

December 30, 2016

WASHINGTON — The National Farmers Union (NFU) is calling on Congress to provide meaningful support to U.S. dairy producers who continue to struggle with multi-year price lows and an inadequate safety net.

“U.S. dairy farmers are experiencing an extended period of very low milk prices which, unless corrected, will force thousands of farmers out of business,” states a resolution recently released by NFU’s board of directors. “NFU calls on Congress to advance spending legislation that includes relief for dairy farmers through additional authority for the USDA to provide direct assistance as an alternative to dairy product purchases and a refund of 2015 Margin Protection Program (MPP) premiums.”

The resolution notes that dairy prices have fallen by more than 40 percent in just the past two years, and that MPP has not performed as expected.

While USDA provided initial relief to the dairy sector in recent months through purchases of surplus cheese, the modest price rebounds have not been enough to stem the amount of producers draining their capital reserves or going out of business, NFU says.

“NFU has been appreciative of USDA’s willingness to provide support to struggling dairy producers, but the agency has run out of options for providing additional relief,” says NFU President Roger Johnson. “Congress needs to act quickly to allow USDA to directly support our nation’s dairy farmers who are struggling to stay in business.”

“While the ultimate aim of Congress should be to improve the long-term safety net contained in the farm bill, failing to provide short-term relief risks doing even more harm to a sector already reeling from low prices and business closures,” the resolution concludes.


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Today's Cheese Spot Trading
January 19, 2017

Barrels: $1.5650 (-4 1/2)
Blocks: $1.7200 (+2 3/4)

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Cheese Production
U.S. Total Nov.
1,010.964 mil. lbs.

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

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