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Industry launches Get Real
initiative to spread #milktruth

January 30, 2015

By Alyssa Mitchell

BOCA RATON, Fla. — Dairy industry leaders this week called on the industry to come together to spread positive information and messages about milk and dairy products to fight back against negative information being spread online and in the media.

The Milk Processor Education Program (MilkPEP) in conjunction with Dairy Management Inc. (DMI) and the National Dairy Council this week announced the launch of Get Real — an industrywide initiative to spread positive stories and facts about milk and dairy products to safeguard consumer confidence in dairy — at a session during the International Dairy Foods Association’s Dairy Forum 2015 in Boca Raton, Fla.

For the launch, Tom Gallagher, CEO, DMI; Julia Kadison, CEO, MilkPEP; Mollie Waller, chief communications officer, DMI; and Victor Zaborksy, vice president, marketing, MilkPEP, along with audience members rang cowbells marked with the hashtag #milktruth during a session on Tuesday that was webcast live.

From animal activist claims to fad diets to competitive soy-based and other products, research shows that negative and positive media coverage affects consumer attitudes significantly, Kadison says.

“Using the support of science, credible third parties and the voices of the industry, the Get Real initiative will help take back the conversation about milk, correcting misinformation and communicating the unique nutrient contributions and health benefits of milk,” she says.

“People now get their information through so many different channels,” especially Millennials, consumers age 18-34, notes Gallagher. “What they eat reflects who they are, what they stand for.”

Kadison notes attacks on milk are not new, but the industry is now seeing more attacks from different sources.

“Negative news travels fast,” she says. “The real facts about milk are not being heard.”

Meanwhile, competitors are making confusing claims, science is being misconstrued in the media, alarming headlines are taken out of context and advocacy groups are increasing their attacks against milk, she adds.

As a result, consumers are confused and may be turning away from milk, a nutrient-rich, affordable and available source of high-quality protein and eight other essential nutritions, many of which are lacking in American diets, Kadison says.

“I don’t know about you, but I’ve had enough,” she says.

The industry needs to do more than play defense, Gallagher says. With this launch, stakeholders are leveraging the power of the dairy industry’s collective voice by arming milk companies and dairy farmers with the real facts about milk and giving them a way to quickly and easily communicate those facts.

Zaborsky notes that the focus will be on setting the record straight on five key facts about milk:

• Milk is a nutrient powerhouse and is not just for kids.

• Milk contains a lot that’s good without the “bad” that some people focus on, such as excess calories and fat.

• Milk is simple, especially compared to non-dairy milks that can have more than 10 ingredients.

• Milk provides high-quality protein, while almond and other non-dairy milks may have just 1 gram of protein.

• Milk is a real, wholesome and local product from family farms across the nation.

“It’s about the conversation,” Waller says. “With this new approach, we’re looking at how to use research, stay true to the science and tell positive stories. The collective voice is the most powerful resource we have.”

Stakeholders are calling on the industry to use social media avenues such as Twitter, Facebook and to spread milk’s positive message with hastags #milktruth and #getreal. DMI and MilkPEP also are available as a resource for the industry to aid them in spreading the message.

The initiative’s website,, provides facts on milk as well as milk stories to share and links to organizations that have positive facts about milk including USDA, National Dairy Council, Dairy Council of California, American Academy of Pediatrics and American Heart Association.

DMI and MilkPEP also have a virtual newsroom where they are continuously monitoring the spread of information, both positive and negative, and are ready to engage with industry and consumers. The password-protected hub allows stakeholders to talk amongst themselves and share information. The Get Real hotline at 1-800-9450MILK or getreal@weber also is available for questions and support.

Waller notes that DMI and MilkPEP are prepared to engage, including with negative messages where appropriate, as they know the initiative will have some pushback.

Kadison says the groups held a crisis drill prior to the launch and they are ready to engage.

She encourages industry to reach out to DMI and MilkPEP if there is negative pushback as the groups are available to lend support.

Kadison notes this is bigger than the dairy industry protecting its product imagine.

“It comes down to helping the nutrition and health of American citizens,” she says.

Gallagher cautions that the effort cannot just be a “one-trick pony,” and that industry still needs innovation in products to coincide with positive messages about milk’s attributes.

To that end, DMI last fall announced the launch of a $500 million partnership between DMI and seven companies to reinvigorate the fluid milk category. Partners Dairy Farmers of America, Darigold/Northwest Dairy Association, The Kroger Co., Maryland & Virginia Milk Producers Cooperative, Shamrock Farms, Southeast Milk and The Coca-Cola Co. are working aggressively to pursue growth opportunities for fluid milk through infrastructure, capital, human resource and marketing investments. (See “DMI launches partnerships to reinvigorate fluid milk category” in the Oct. 31, 2014, issue of Cheese Market News.)

A new milk product called fairlife — a collaboration between Coca-Cola and Sue and Mike McCloskey, owners of Fair Oaks Farms, through the cooperative Select Milk Producers — recently started to hit national dairy aisle shelves after being released in the Minneapolis, Denver and Chicago markets last year.

The milk is sold in 11.5-ounce, 32-ounce and 52-ounce sizes and is priced similar to value-added milks such as organic and lactose-free.

The milk comes in four varieties including reduced-fat, chocolate, fat-free and whole. The product is lactose-free, has 50 percent more protein and less sugar than regular milk, and 30 percent more calcium. (See “Coca-Cola, Fair Oaks Farms launch fairlife” in the Jan. 9, 2015, issue of Cheese Market News.)


Protein focus in diets leads to
new dairy-based foods, drinks

January 30, 2015

By Rena Archwamety

MADISON, Wis. — When it comes to healthy choices and eating right, protein is top-of-mind for many U.S. consumers.

According to market research firm Mintel, the trend of high protein foods is well-established in the U.S. market and growing in markets abroad. A quarter of Americans confirmed consuming more protein from food and drink products in August 2014 compared to a year before, Mintel says in a recent report, “Protein Fever.” Mintel adds that launches of high protein food and drink products outside of North America also have been gradually increasing over the past five years. In China, a quarter of consumers surveyed in August 2014 reported eating more protein, while 13 percent of consumers in the United Kingdom claimed to have increased their protein intake.

Consumers also are willing to pay more for protein-enriched foods, according to an NPD market research report, “Protein Perceptions and Needs,” released last year.

“It is important for food and beverage marketers to highlight wherever possible that their products are a good source of lean protein. In fact, the protein study we conducted showed certain messages about protein resonated more than others,” says Darren Seifer, NPD food and beverage industry analyst and co-author of the report. “The study also found nearly half of primary grocery shoppers have purchased protein-enriched foods, and many are willing to pay, or have already paid, a premium for these products.”

Studies on weight management and loss, an aging population and emphasis on muscle and recovery for athletes all have contributed to the evolution of current protein trends, says Don Leyman, professor emeritus, University of Illinois Department of Food Science & Human Nutrition.

In a study on applications and future directions for the food industry that he published last year in the journal Physiology & Behavior, Leyman notes that protein previously was considered relatively unimportant in the diet, but the past decade has produced new knowledge about the importance of protein for muscle health, satiety, body composition and daily energy expenditure.

“There was a transition in the ’70s, ’80s and ’90s, from the ‘fear of fat’ era — cholesterol and saturated fat,” Leyman says. “In the ’90s, one of the starting points was the Atkins diet with zero carbs, high fat and high protein. People went out to prove him wrong, but interestingly, when they started testing it against high-carb diets, it was always better.”

In his study, Leyman notes that new high-protein products are appearing in the marketplace for on-the-go consumers.

“Products that are convenient and portable include protein shakes, protein bars and Greek yogurts,” he says, adding that the amount of protein in yogurts also has considerably increased.

“Ten years ago, yogurts in the United States were mostly desserts containing only 2 to 4 grams of protein per serving with high amounts of sugar,” he says. “Now multiple companies are producing Greek yogurts with 14 to 28 grams of protein per serving.”

• Powerful products

Carlos Ramirez, former general manager of Alpina, founded Powerful Yogurt in 2013 with the goal of introducing a great-tasting, high protein product that would appeal to men.

“I was eating Greek yogurt because of the protein content, and wondering why on the shelf everything was white, pink or blue and talked about digestive health but not protein benefits,” Ramirez says. “I had an idea and said, ‘I think there’s an opportunity here.’ Forty-five percent of consumers are men, but no one was talking to them. I wanted to make a product for men.”

Ramirez says the first reaction he got was, “You’re crazy.” The second reaction was, “I want to invest in your company!”

The Miami-based company’s Greek yogurts, which Ramirez notes also appeal to women, contain 21-25 grams of protein per cup — about twice as much as many other popular Greek yogurts. Ramirez says the high protein content is achieved naturally, first through the yogurt’s larger 8-ounce size, and second through a straining process that leaves more solids in the product.

Powerful Yogurt more recently has added yogurt bars and yogurt protein drinks, containing 20 grams of protein per serving, to its lineup and is eyeing new distribution channels in sports nutrition outlets and beyond the East Coast.

Other dairy companies also recently have introduced products to appeal to those seeking more protein in their diets. Earlier this month Dannon introduced Light & Fit Protein Shakes, with 12 grams of protein and 5 grams of fiber per 10-fluid-ounce bottle, designed for satiety and healthy snacking. Also this month in its Swiss market, Emmi introduced new Emmi YoQua, a probiotic yogurt with extra protein derived from extra milk content. And bringing dairy into the energy and sports drink arena, Dean Foods last summer introduced TruMoo Protein Plus milk, with 25 grams of protein in each 14-ounce bottle.

• Protein choices

Many food manufacturers are looking toward dairy ingredients when looking to create high-protein, great-tasting products. Whey proteins are particularly sought after because of their good solubility and high level of essential amino acids compared to other protein sources.

“A lot of proteins have been developed in the last 10 years or so, and everyone out there is comparing themselves to whey protein,” says K.J. Burrington, dairy ingredient applications coordinator at the Wisconsin Center for Dairy Research (CDR). “Whey protein has a lot of nutritional research behind it, focused around muscle benefits and satiety. The other proteins see that as an opportunity to compare themselves — ‘Can we work as well in beverages? Can we work as well in nutrition bars? But can we also nutritionally compare to whey protein?’ I would say whey protein has sort of become the gold standard.”

Craig Sherwin, technology director at Davisco — a business unit of Agropur that specializes in whey protein isolates and other dairy proteins — says one driving factor in the high-protein foods trend is the availability of more and improved protein ingredients.

“There are so many different options to pick a protein for a particular application,” he says. “We get calls from people wanting protein in anything you can name. Honestly, it’s all over the map — from peanut butter to guacamole to salad dressings. We also get calls to make more traditional dairy foods have even more protein.”

Earlier this month, Davisco announced an increase of its production capacity and a new hydrolyzed whey protein in its BioZate product line. The new BioZate 7 is a clean-flavored protein that can be incorporated into bars and sheeted or extruded snacks without introducing firm textures, the company says.

The new BioZate 7 complements Davisco’s existing BioZate 3 hydrolyzed whey protein, which offers high heat stability and is ideal for beverage applications. Sherwin says BioZate 7, with its cleaner flavor, is ideal for snack food applications such as crunchy puffs, crackers and bars.

“BioZate 7 has very minimal bitter notes,” he says. “It really works well in snack foods because it disappears. It also still has a softening effect. You don’t have to worry about bars getting too hard or chips too crunchy.”

New protein options like this are especially helpful in overcoming challenges companies previously faced when adding protein to certain foods.

Burrington says the next generation of proteins likely will be milk proteins that can hydrate faster and still be functional, and whey proteins that have improved heat stability, texture and flavor. She says it can be hard to find the perfect combination of protein and other ingredients. Manufacturers have to understand the food system they’re working in and what’s the best protein choice.

“Probably some of the most challenging products to put protein in are products that don’t already contain protein,” Burrington says. “The most challenging are things like confections and baked products because traditionally they don’t have any protein in them at all.”

• Maximizing benefits

When formulating snacks and other foods with protein claims, companies often target either 5 grams of protein, which is 10 percent of the recommended daily value and a “good” source of protein, or 10 grams, which is 20 percent of the recommended value and can qualify as an “excellent” source. However, she notes that the 50 grams of protein recommended per day really is only a minimum amount.

“There actually are benefits to getting more than that amount per day,” she says, adding that protein has a pretty high upper limit for those who don’t suffer from kidney disease or other ailments that would limit protein consumption. “If you talk to most nutritionists now, to get the most benefit out of protein and maintain muscle, they would recommend 30 grams of protein at breakfast, 30 at lunch and 30 at dinner.”

She adds that according to research on how much is needed to trigger muscle protein synthesis, 10 grams of protein will stimulate muscle to start reproducing, but 20 grams gives a maximum benefit, which is why some people are looking at yogurts with 20 or more grams of protein.

Leyman says it’s important to balance the amount of protein with the amount of carbohydrates in a snack or other product, depending on the target consumer.

“When you look at snacks, it’s not one size fits all. Are you talking about an athlete, about a child, or about an adult and weight management? I think the appropriate amount per snack varies,” he says.
“The big decision in snacks is, ‘are you eating for satiety because you’re hungry, or are you eating for health benefit or muscle?’ If eating for satiety, there’s not a specific level, but you should balance protein with carbohydrates. If a snack has 15 grams of carbs, it needs a one-to-one balance with protein,” he says.

“But if you’re after the protein effect, you probably need to get at least 20 grams of protein before you get that effect in your snack,” he says, adding that this also depends on the age of the consumer since efficiency of protein use goes down with age.

Leyman says the food industry could do better in following these guidelines rather than the established minimum levels of protein for labeling purposes.

“I don’t see many snacks being produced with any real nutritional purpose,” he says “People in the food industry look at existing guidelines and labels and put marketing together, but I don’t think that’s current with what the research is. I think the industry is at least five years behind where research is at with protein.”

The good news is that there is plenty of research on protein to draw from to educate consumers and create new, functional foods that align with a growing demand.

“It really feels like we are still on the upswing. Protein has been a trend for a couple of years, but it really is backed by good science, not ‘voodoo’ science,” Sherwin says. “It has a real effect, and companies are able to deliver nutrition without sacrificing good taste. I see it really here to stay.”


East Coast blizzard forces
adjustments for dairy sector

January 30, 2015

By Rena Archwamety

MADISON, Wis. — While not as massive as expected, severe winter weather earlier this week in the Northeast left nearly 3 feet of snow in some areas and shut down traffic across several states that implemented travel bans ahead of the storm.

These travel bans, which closed roads to all but emergency vehicles late Monday and into Tuesday, affected some milk distribution in the region. According to USDA’s Fluid Milk and Cream Review - East, milk transporters experienced a range of logistical problems including immobilization and the canceling of loads. Some manufacturers braced for the storm beforehand, accepting milk ahead of schedule or diverting it to other plants.

Jennifer Husan, Northeast Area spokesperson for Dairy Farmers of America (DFA), says the blizzard forced some of DFA’s plants in the area to close or operate on different hours, prompting the cooperative to divert some of its milk to other locations.

“A lot of the haulers in the area worked closely with plants to make sure they were going the extra step to get the farms’ milk a place,” Husan adds.

Doug DiMento, director of communications for Agri-Mark Inc., says the cooperative’s balancing facility in West Springfield, Mass., was able to stay open during the storm, and a lot of its haulers also picked up milk early. He says one farm may have lost milk when the truck got stuck in traffic due to an accident, but most trucks were able to get through.

“We haven’t heard of a lot of milk having to be dumped,” he says. “So far, it seems like we dodged a bullet here in the Northeast because we were prepared for the storm.”

Dean Foods also made preparations the week prior to the storm for milk deliveries.

“As the country’s largest fluid milk processor, we have quite a bit of experience preparing for storms of this nature and have a network of multiple processing plants that can help us manage customer demand and our available milk supply appropriately,” says Jamaison Schuler, senior director of corporate communications, Dean Foods Co. “In the case of a storm like this one, we were able to plan ahead of time with our customers to provide snow allocations prior to the storm’s impact to ensure they have plenty of dairy products prior to the storm.”

Huson notes that the hardest-hit area was southern New England, and Connecticut and Massachusetts took the brunt of the severe weather.

“Right now things are settling down quite a bit,” she says. “All the plants have the milk they need, and they’re just cleaning up a little bit.”


Darigold closing plant in
Medford, Ore., on Feb. 28

January 30, 2015

MEDFORD, Ore. — After 60 years of business in Medford, Ore., Seattle-based Darigold Inc. is closing its milk processing plant there Feb. 28, eliminating employment for 29 people.

According to Darigold, the need to significantly upgrade the facility to maintain compliance with food safety, employee safety and environmental regulations, and the plant’s distance from its core markets, among other reasons, led to the decision to close the plant.

Officials will partner with Worksource Oregon to provide job placement services, support and other benefits to all affected employees, Darigold says.

Darigold says newer, more modern facilities can provide customers, dairies and the public a higher degree of reliable food safety, employee safety and protection of the environment.

The company says it does not take the decision to close the plant lightly, but says it is necessary to ensure it is meeting the needs of customers and the broader community that relies on the safe and environmentally-sound production of high quality dairy products.

The company will continue to operate its 11 other processing sites in Oregon, Washington, Idaho and Montana.


California’s Marin French Cheese celebrates 150 years of business

By Kate Sander

PETALUMA, Calif. — Marin French Cheese Co., thought to be the longest continually operating cheese company in the nation, marks 150 years of business in 2015.

Throughout the year, the California producer of Brie, Camembert and other French-style cheeses will hold events highlighting 150 years of artisan cheese production in the same Marin County location.

The company, owned since 2011 by the Rians Group, will begin celebrating its sesquicentennial at this coming week’s Fancy Food Show in San Francisco and continue throughout the year with public events at its creamery home, the 700-acre Hicks Valley Ranch outside of Petaluma, Calif.

Marin French, the only cow’s milk Brie cheesemaker in California, also will be introducing new cheeses this year that complement its existing offerings.

“At Marin French we are passionate about cheesemaking,” says Philippe Chevrollier, general manager. “We respect traditions and the craft of cheesemaking while striving for innovation.”

As part of 2015’s new offerings, Marin French is introducing Petite Breakfast. This commemorative cheese is a spin off of Marin French’s Breakfast Cheese, a fresh unripened Brie that has been made since the late 1800s. (For the history of this cheese and how it got its name, please see related article on page X). The new product, creamier and fluffier, highlights the sweet local milk and cream the company uses and captures the essence of cool coastal breezes rolling over the Petaluma creamery, says Lynne Devereux, the company’s marketing manager. And it’s not just a breakfast cheese, she notes. While it can satisfy a craving for a creamy, tangy fresh cheese with morning toast, it also pairs perfectly with an evening cocktail, she says.

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CME cheese prices weaken,
may move lower as stocks rise

January 23, 2015

By Alyssa Mitchell

MADISON, Wis. — After a year of record-high prices, Cheddar at the Chicago Mercantile Exchange (CME) has been lower in the first weeks of 2015 following the holiday demand season, and market analysts anticipate additional downward movement in the coming weeks.

Inventory is building at cheese plants, notes USDA’s Dairy Market News. Contributing factors include active cheese production, with some manufacturers using their cheese plants to balance their volume of milk intakes, as well as some potential buyers pulling back during a falling price market.

“Once prices began to fall significantly last week, some buyers slowed orders in an opportunistic buying strategy,” Dairy Market News says. “Other buyers are more regular about taking orders, and this leaves some larger plants with cheese moving out the door mostly as expected.”

CME Cheddar had significant price declines last week, with barrels falling 15.25 cents and blocks falling 12 cents Jan. 14. Barrels closed out the week at $1.45 per pound and blocks at $1.47, down 9 and 10 cents, respectively, from their closing prices Jan. 2.

Cheddar prices haven’t moved dramatically this week, settling at $1.445 per pound for barrels and $1.48 for blocks today.

Wednesday CME futures for cheese showed prices in the high $1.40s for February but then improving to the $1.50s through the summer and up to the lower $1.70s by year’s end.

Michael McCully, owner of The McCully Group LLC, Chicago, says recent price drops in CME Cheddar reflect the increasing supply of cheese.

“Milk and cheese production are up vs. last year, while exports are lower,” he says. “Domestic demand is OK but not strong enough to make up the shortfall in exports. As a result, stocks are building, not just for cheese, but all dairy products.”

Dave Kurzawski, senior broker with FCStone, Chicago, says cheese is expected to move lower in the coming weeks.

“But the question we ought to ask is, can we move the excess inventory of cheese at $1.45 to $1.50?” he says. “If we can’t, the price should move to some lower, market-clearing price.”

Kurzawski says FCStone’s projections are for a mid- to low-$1.30 price average for cheese through May.

“The dairy markets in general remain bearish,” he adds. “Could that story change well before the crowd sees the data changing? Most often does. But from our current vantage point, we ought to expect more price weakness.”

McCully says he expects CME cheese prices to be bound in the $1.30-$1.60 range until the third quarter of 2015.

“I think prices will gyrate within that range as supplies build, but buyers will be more aggressive building inventories at lower price levels,” he adds.

Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle, says if CME cheese is not yet at its price bottom, it should be pretty close.

“That said, it could be tough for U.S. cheese to move higher given the amount of milk still headed to cheese vats,” Dorland says. “Cheese demand is still solid, and consumers did not blink at the prices last year. We are in an over-supplied situation right now.”

However, Dorland adds that given good demand and low prices, cheese could recover faster than most may expect.

“Headed into Super Bowl and pizza time, this gives pizza companies a tremendous ability to discount and promote to encourage further buying,” she notes. “Keep in mind the Super Bowl alone will not clear all of the cheese, but it is a start.”

• Flowing milk production

Alongside cheese, farm milk prices are anticipated to be much lower in 2015 after the high prices seen last year, analysts say.

“The January milk check in two weeks could be the first dose of reality for many of the nation’s dairy farmers,” Dorland says.

However, U.S. dairy producers could still be insulated from the “red zone” for some time due to continued lower feed costs. Many producers also have taken steps to manage risk by signing up for the new Margin Protection Program for Dairy (MPP) under the farm bill, analysts say.

“The bearish market signals have not reached producers,” Kurzawski says. “As it stands, many producers may not feel negative profit margins for several months. Add that to reduced slaughter levels and the milk flush in the U.S. and I don’t see any way around plenty of milk for months to come.”

James Dunn, professor of agricultural economics at Penn State University, says he estimates producer milk margins will drop below their 5-year average this spring and may squeeze some of the higher-cost producers.

However, “in general, most farmers have cleaner balance sheets than a couple years ago, which will make it easier for them to borrow,” he adds.

McCully notes that a sometimes overlooked factor in dairy farm revenue is the impact from very high beef prices.

“Sales from cull cows and bull calves are resulting in much more income for dairy farms than past years,” he says. “For marginal cows, the high beef prices will be a further incentive to cull, so there will be some pullback in milk production, but it likely won’t happen until the second half of the year.”

• International outlook

As high U.S. prices made exports less competitive in the second half of 2014, analysts say current lower prices may boost exports this year. But with a strong U.S. dollar, it may take some time to see improvement in export numbers.

“I expect U.S. dairy exports to be below year-ago levels for the first half of the year,” McCully says. “U.S. suppliers lost out on sales last fall as U.S. prices were much higher than global levels, particularly for cheese and butter. With U.S. prices converging with global prices for most products, the export outlook should improve by the second half.”

USDA’s “Livestock, Dairy, and Poultry Outlook” released last week says the Foreign Agricultural Service estimates 2014 growth in milk production for the five largest dairy exporters combined — Argentina, Australia, the European Union (EU), New Zealand and the United States — at about 4 percent.

“International dairy prices have fallen through the year due to the increase in world milk production, Russia’s ban on imports from certain countries (particularly the EU) and a drop in whole milk powder demand from China,” the report says. “In 2015, exports for the five largest dairy exporters combined are forecast to grow about 1 percent.”

The report notes that projections for 2015 assume that the Russian import ban will be lifted as scheduled in August and that China’s economic growth will slow from an estimated rate of 7.4 percent in 2014 to 6.5 percent in 2015.

China is another unknown factor in the mix for demand, analysts note. The country’s appetite for dairy imports played a large part in buoying U.S. prices for the first half of 2014.

“It looks like China will be a much smaller customer this year because its economy has slowed down,” Dunn says.

“I think it may be awhile before China starts to recover,” he adds. “They have been making a lot of unsustainable decisions to maintain economic growth, but it seems like that government spending is slowing down.”

Kurzawski says the consensus seems to be that demand from China will increase in the second half of 2015.

“For now, demand in many markets globally is rather promising, with the exception being China,” he adds.

Dorland notes that while the export outlook is beginning to turn around, New Zealand and Europe have a four- to five-month jump on the United States.

“Right now we are playing catch up,” she says. “That said, U.S. prices are once again competitive, and that should be positive for exports.”

Dorland adds that China is a tough call. While its stocks are coming more in line and its high cost of milk production model is “cracking under the pressure” — all good news for U.S. exporters — it may fizzle if China’s government decides to protect its dairy industry by making it more challenging for companies to import lower-cost milk powders.

“Just when it looks like China could be back, the government handling this downturn could throw a bit of cold water on the situation,” she says. “China needs to adjust its milking herd appropriately, much like all other dairying regions of the world. In China, that could be a delicate balancing act.”


IDFA commends Obama’s
remarks on trade agreements

January 23, 2015

WASHINGTON — With 95 percent of the world’s customers outside of U.S. borders, America’s businesses need more opportunities to sell their products overseas, President Obama said during this week’s State of the Union Address.

He alluded to the ongoing Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) negotiations, as well as China’s plans to move ahead with its own network of agreements in the Asia Pacific.

“Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region,” Obama said in Tuesday’s address. “That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me Trade Promotion Authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.”

U.S. Trade Representative Michael Froman continued to promote Trade Promotion Authority (TPA), or “Fast Track,” legislation as well as the TPP during an address Wednesday at the U.S. Conference of Mayors in Washington.

“We’re at a critical time in this process,” he said. “The contours of a TPP agreement are coming into focus, and we look forward to continuing our efforts to engage the public and members of Congress in a robust discussion about it.”

He continued, “TPA puts Congress in the driver’s seat to define U.S. negotiating objectives and priorities for trade agreements. It clarifies and strengthens public and congressional oversight by requiring consultation and transparency throughout the negotiating process. It makes clear to our trading partners that the administration and Congress are on the same page in negotiating high standards in our trade agreements — standards that will protect our workers and environment.”

The International Dairy Foods Association (IDFA), representing 550 dairy foods companies and their suppliers, commended the president’s remarks on TPA and the trade agreements.

“We’re encouraged that the president’s call to pass legislation to reauthorize Trade Promotion Authority was welcomed with bipartisan support by many members of Congress. A strong, bipartisan focus on modernizing TPA will have a tremendous, positive impact on the country’s economic growth and job creation,” IDFA says in a statement released this week.

“American businesses and their workers can compete against anyone else in the world when given the opportunity,” adds IDFA, which is a member of the Trade Benefits America Coalition. “The U.S. dairy industry in particular has the potential to benefit greatly from two trade agreements currently undergoing negotiations — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Trade Promotion Authority is an important tool for getting those agreements through Congress and ensuring that the United States has the opportunity to connect U.S. companies and their products with consumers around the globe.”

Bob Stallman, president of the American Farm Bureau Federation, also expressed support for the president’s trade agenda outlined in the State of the Union Address.

“We strongly support President Obama’s efforts to normalize trade and other relations with Cuba,” he says. “Farm Bureau is also encouraged by the president’s strong support for Trade Promotion Authority, which would give Congress the responsibility to vote ‘yes’ or ‘no’ on foreign-trade treaties without deal-killing amendments. Congress must pass bipartisan TPA legislation to strengthen U.S. negotiating positions in future trade agreements.”

However, others remain critical of TPA legislation and the trade agreements, including other ag groups, labor unions and members of the president’s own party.

National Farmers Union (NFU) President Roger Johnson applauded the Obama Administration’s move to reopen relations with Cuba but urged the president to reconsider moving forward with the massive trade agreements currently moving in Congress, arguing that free trade agreements historically have been a lopsided proposal for the United States.

“Free trade agreements are not only exporting American jobs, they are contributing to an increasing trade deficit that has become a major drag on the economy,” he says. “The U.S. government needs to clearly direct our trade negotiators to conclude trade agreements that will erase our trade deficit and lead to more balanced trade in the future.”

On Tuesday in advance of the State of the Union Address, a panel of small business owners joined members of the Congressional Progressive Caucus (CPC) to host a press call discussing President Obama’s trade agenda, which they say will threaten American manufacturing growth and small business employment.

Following the address, CPC Co-Chairs Reps. Raúl M. Grijalva, D-Ariz., and Keith Ellison, D-Minn., applauded many of the president’s policies for working families but criticized his plans for trade.

“... putting working families first also means we cannot enter into trade deals that allow corporations to ship jobs overseas,” they say. “The Congressional Progressive Caucus will not support a trade deal that increases trade deficits and undermines the security of the middle class.”


’14 milk production is just
shy of 206 billion pounds

January 23, 2015

WASHINGTON — U.S. milk production in 2014 totaled 205.994 billion pounds, according to preliminary data released by USDA’s National Agricultural Statistics Service (NASS) Thursday. This was an increase of 2.4 percent vs. 2013’s 201.218 billion pounds.

Preliminary data estimates December U.S. milk production was 17.32 billion pounds, an increase of 3.1 percent vs. December 2013. (Figures are rounded. Please see CMN’s milk production chart.)

NASS estimates there 9.30 million cows on U.S. farms in December, up 100,000 head from December 2013 and up 22,000 head from November 2014. Production per cow averaged 1,862 pounds in December, an increase of 37 pounds from December 2013.

Milk production in the 23 major milk-producing states during December totaled 16.242 billion pounds, up 3.2 percent from December 2013. November revised production, at 15.532 billion pounds, was up 3.5 percent from November 2013, according to NASS. The November revision represents an increase of 12 million pounds or 0.1 percent from last month’s preliminary production estimate.

Production per cow in the 23 major states averaged 1,886 pounds in December, 35 pounds above December 2013. This is the highest production per cow for the month of December since the 23-state series began in 2003, NASS says.

The number of milk cows on farms in the 23 major states was 8.61 million head, 107,000 head more than December 2013 and 16,000 head more than November 2014.

California led the nation’s milk production with 3.471 billion pounds in December, down 0.1 percent from its production a year earlier. NASS reports there were 1.78 million cows on California farms in December, unchanged from a month earlier but down 1,000 head from December 2013. California production per cow in December was unchanged from the previous December at 1,950 pounds.

Wisconsin followed with 2.363 billion pounds of milk in December, up 3.1 percent from its production a year earlier. NASS reports there were 1.27 million cows on Wisconsin farms in December, up 2,000 head from November 2014 and up 4,000 head from December 2013.

Wisconsin production per cow averaged 1,855 pounds in December, up 50 pounds from a year earlier.


U.S. cheese stocks hold mostly
steady in December 2014

January 23, 2015

WASHINGTON — Total natural cheese in cold storage at the end of December 2014 totaled 1.013 billion pounds, up just 3.2 million pounds from December 2013’s 1.009 billion pounds, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). Meanwhile, December 2014 cheese stocks were down slightly from Nov. 30, 2014’s 1.016 billion pounds.

American cheese in cold storage totaled 623.8 million pounds as of Dec. 31, 2014, up 1 percent from Dec. 31, 2013’s 618.3 million pounds but down 2 percent from the 634.8 million pounds in cold storage at the end of November 2014.

Swiss cheese in cold storage totaled 21.3 million pounds at the end of December 2014, down 14 percent from December 2013’s 24.7 million pounds and down 13 percent from the 24.4 million pounds in cold storage at the end of November 2014.

Other natural cheese in cold storage totaled 367.5 million pounds as of Dec. 31, 2014, up less than 1 percent from the 366.4 million pounds in cold storage as of Dec. 31, 2013. December 2014’s other natural cheese stocks were up 3 percent from the 357.0 million pounds in cold storage at the end of November 2014.

NASS reports total butter in cold storage as of Dec. 31, 2014, was 98.6 million pounds, down 12 percent from the 112.5 million pounds in cold storage a year earlier and down 2 percent from the 100.9 million pounds of butter in cold storage at the end of November 2014.





WCMA, NMPF meet to discuss
industry action on animal care

January 16, 2015

By Emily King

MADISON, Wis. — On Tuesday, the Wisconsin Cheese Makers Association (WCMA) invited its members to the Monona Terrace in Madison, Wis., and joined the National Milk Producers Federation (NMPF) in providing information and updates on NMPF’s Farmers Assuring Responsible Management (FARM) program.

“It was a good meeting; it was very interactive,” says John Umhoefer, executive director, WCMA. “We had 50 people in the room representing 20 different companies.”

The dairy industry, through NMPF, and with support from Dairy Management Inc. (DMI), initiated the voluntary FARM program in 2009. The goal is to provide reassurance to consumers that dairy farmers raise and care for their animals in a humane and ethical manner. (See “NMPF strives for increased participation in FARM program” in the Sept. 26, 2014 issue of Cheese Market News.)

“I think there’s definitely momentum for each dairy company to get on board with a program to prove that their farms provide animal care,” Umhoefer says. “The FARM program is a leading candidate for getting the job done. That’s why it felt right for us to expose (our members) to that program.”

At the meeting, Dr. Jamie Jonker, NMPF’s vice president of sustainability, and Emily Meredith, vice president of animal care at NMPF, explained the animal care policies and procedures, and how to execute the FARM program within an organization.

Jonker and Meredith introduced several new administrative changes:

• Mandatory participation

This rule requires that all farms supplying milk directly to dairy companies (cooperative and proprietary) listed as National Dairy FARM Program participants be subject to mandatory on-farm evaluations and, upon completion of the evaluation, be entered into the pool of evaluated farms eligible for inclusion in the third-party verification process.

• Program protocol following allegations of willful mistreatment of animals

The FARM program will place a participating farm on probation if willful mistreatment of animals is observed at any time.

Willful mistreatment is defined as: “Acts that maliciously cause pain, injury or suffering, including, but not limited to: needlessly applying any type of prod to a sensitive part of an animal (prods are only used when animal or human safety is in jeopardy, and as a last resort), malicious hitting or beating of an animal, movement of non-ambulatory cattle in a manner inconsistent with the National Dairy FARM Program guidelines, prolonged lack of access to feed and water, and inappropriate on-farm harvest or euthanasia.”

• Creation of an action plan

Another amendment to the FARM program states that after a second-party evaluation, an action plan is to be developed, if needed, by the dairy farmer and the herd veterinarian or other qualified professionals for those areas identified as needing improvement.

An action plan identifies opportunities for improving animal care, specific actions for improving animal care, specific actions to implement the improvement and a schedule for completion.

Part of what Jonker outlined was the evolution of the FARM program and the steps needed to be successful.

“We can’t do it all at once,” Umhoefer says. “First, we need the industry to get into programs and the next step is to talk to buyers. For us we looked at (the FARM program) as a step one — a look at the program and how to manage something like a video surveillance incident. We think step two is taking veterinarians and fieldmen and training them.”

At the meeting, Dave Crass, an attorney for Michael Best & Frederich, also discussed policy positions that farms and plants can adopt to assure proper animal care.

Crass reviewed some of the recent undercover video incidents and down cow handling before talking about how activists target brands to create tension throughout the distribution chain.

According to Crass, there is a great amount of risk to consumer confidence in brands, corporate relationships and in the farmers themselves when the industry is unprepared in the animal care arena.

The processor’s role in a mandated animal care policy should be comprehensive, Crass says. Processors should communicate and educate expectations up and down the supply chain; they also should consider requiring reporting or certification by producers, mandatory auditing, selecting an animal care training and verification protocol for producer partners or mandating 100 percent participation by producer partners, he says.

Response protocols need to be in place for reported incidents, Crass adds. A processor needs to be prepared to assist the farmer while protecting the company and consumer.

At the meeting, David Pelzer, senior vice president of strategic communications at DMI, explored the processor’s role in crisis preparedness and response.

Pelzer outlined “10 Proactive Ways to Protect Your Company’s Reputation:”

1. Communicate publicly your commitment to animal care — develop a values statement.

2. Get legal counsel on your rights, responsibilities and vulnerabilities related to cases of alleged animal mistreatment.

3. Consider forming an internal advisory group of veterinarians on best management practices.

4. Communicate to your stakeholders your standards on animal care.

5. Assign a staff person to handle animal care questions.

6. Communicate your expectations and guidelines for farms that ship to you — include accepted animal care protocols.

7. Develop a crisis plan — including protocols for how you will handle accusations of animal mistreatment.

8. Learn about industry resources on animal care and crisis communications.

9. Provide resources to your farms — encourage proactive animal care communications and on-farm crisis plans.

10. Host a training workshop for farms.

An overarching theme throughout the meeting was that consumers care about these issues and that consumer confidence is of the utmost importance.

Umhoefer says consumer education is step three of the process.

“We need to show people what it’s like to be on a farm,” Umhoefer says. “I don’t think (animal care programs) are enough on their own. You have to shore-up your defenses and there does need to be outreach to consumers. There has to be consumer education.”

Umhoefer says one of the best tools to use is social media — it reaches a large audience and it’s free.

“The FARM program does not solve the issues of surveillance videos, but it definitely will put every farm in a different place in regard to animal care,” Umhoefer says. “There needs to be written procedures on the farm. We need to be thinking about it in a way that is front-of-mind.”

Umhoefer notes this issue will be a key topic at the Wisconsin Cheese Industry Conference being held at the Alliant Energy Center in Madison, Wis., April 22-23.


New ag leaders appointed as
Congress looks at key issues

January 16, 2015

WASHINGTON — The 114th Congress was sworn into office last week, with 12 new senators and nearly 60 new representatives, ushering in Republican control of the Senate and some significant changes on both the Senate and House agriculture committees.

Sen. Pat Roberts, R-Kan., has taken over as chair of the Senate Agriculture Committee following the decision by Sen. Thad Cochran, R-Miss., the Senate Ag Committee’s top Republican in the 113th Congress, to assert his seniority and take control of the Senate Appropriations Committee.

Roberts is the first member of Congress to hold the top agriculture post in both the U.S. House of Representatives and now in the U.S. Senate. Prior to his election to the U.S. Senate in 1996, Roberts served eight terms in the House, including one as chair of the House Ag Committee.

Roberts is joined on the Senate Ag Committee by four new Republicans: Sens. Joni Ernst of Iowa, David Perdue of Georgia, Ben Sasse of Nebraska and Thom Tillis of North Carolina.

Sen. Debbie Stabenow, D-Mich., former committee chair, will remain the top Democrat on the committee, becoming the ranking member. No new Democrats are joining the committee.

According to the International Dairy Foods Association (IDFA), the Senate Ag Committee is expected to play a key role in the upcoming reauthorization of the Child Nutrition Act.

Roberts, who last week promised an “aggressive schedule” for the committee, says in his role he will continue to ask tough questions of the Environmental Protection Agency (EPA), as well as conduct greater oversight of the enforcement and implementation of Dodd-Frank at the Commodity Futures Trading Commission (CFTC).

“I look forward to an aggressive schedule with hearings providing much-needed oversight of our farm programs, school meals, USDA, CFTC and the EPA,” Roberts says.

After being officially confirmed as chair of the Senate Appropriations Committee last week, Cochran said his goal as chair is to move forward in a responsible and timely manner to fulfill Congress’ constitutional obligation to fund federal government functions.

“We should strive to follow a process that gives all senators an opportunity to shape appropriations measures and help oversee the programs and policies that we fund,” Cochran says.

Meanwhile, in the House, Rep. Mike Conaway, R-Texas, will now chair the House Agriculture Committee, replaying Rep. Frank Lucas, R-Okla., who reached his term limit. Eight new Republican members join the committee: Reps. Jackie Walorski of Indiana, Ralph Abraham of Louisiana, Rick Allen of Georgia, Mike Bost of Illinois, Tom Emmer of Minnesota, John Moolenaar of Michigan, Dan Newhouse of Washington and David Rouzer of North Carolina.

Another significant change to the committee includes the announcement by Conaway that the subcommittees of the House Ag Committee will be reorganized. Dairy issues will fall under the jurisdiction of the Subcommittee on Livestock and Foreign Agriculture, which will be chaired by Rouzer.

Rep. Collin Peterson, D-Minn., will remain the committee’s ranking member. Other Democratic members have yet to be announced but are expected to be named soon.

Hal Rogers, R-Ky., will continue as chair of the House Appropriations committee.

Earlier this week, President Obama and Vice President Biden hosted the bipartisan, bicameral leadership of Congress in the Cabinet room. Leaders discussed a wide range of issues, and Obama highlighted areas where Republicans and Democrats can work together.

Also this week during the annual convention of the American Farm Bureau Federation (AFBF) in San Diego, AFBF President Bob Stallman said that while U.S. farmers and ranchers achieved notable victories on the farm bill and other priorities in 2014, agriculture must push harder for important policy reforms in 2015.

“We cannot ignore the extremes of the left and right, but we must speak to the center: the legislators in both parties who go to Washington because they want to make policy and get things done,” Stallman says. “It’s time for Congress to get back to work — to their job so you can do yours.”


Emmi acquires cheese business of J.L. Freeman

January 16, 2015

LUCERNE, Switzerland — Switzerland-based Emmi this week announced it is acquiring 100 percent of the shares in the cheese business of Boucherville, Canada-based J.L. Freeman,
a leading importer of specialty cheeses, primarily from Switzerland.

Emmi says the move enables the company to expand its position in North America and secure market access for exports from Switzerland.

Emmi notes it has honed its strategy in North America over the past few months. The company’s strategy includes making more targeted use of resources to strengthen its position in the speciality cheese business. This acquisition marks another step in the desired direction, Emmi says.

The deal also allows Emmi to establish another important base in North America that will build on its strong position in the United States and existing presence in Canada, the company says. With this acquisition, the company is extending the value chain of its speciality cheese exports to Canada and creating potential for the export of additional products from the Emmi Group.

J.L. Freeman is one of the leading cheese importers in Canada. More than half of its imports are cheeses from Switzerland — such as Le Gruyère AOP, Emmentaler AOP, Fondue and various specialities — in addition to cheese from Italy and France. J.L. Freeman generates annual sales of about C$38 million and employs 18 people in its cheese business.

“J.L. Freeman is an established, profitable company which has been working successfully with Emmi for almost 60 years,” says Urs Riedener, CEO, Emmi. “Its leading position in the import of speciality cheeses offers an excellent marketing opportunity for Swiss cheese varieties and specialities such as Kaltbach and Swiss Fondue.”

J.L. Freeman’s cheese business will continue to operate independently and under the leadership of its current management in the future.

The acquisition is planned for the first quarter of 2015 and will enter into force once the necessary official authorizations from the Canadian government have been issued, Emmi notes.

Meanwhile, the United States is Emmi’s largest foreign market, and the company has been generating solid sales growth there for years. Emmi’s focus in North America is on the speciality cheese business. The first pillar of this business is Emmi Roth USA, based in Monroe, Wis. The second pillar is Cypress Grove Chevre, which produces goat’s cheese and is based in Arcata, Calif.


U.S. government announces
revised regulations on Cuba

January 16, 2015

WASHINGTON — The U.S. Department of the Treasury and the U.S. Department of Commerce this week announced the revised Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), which implement the changes announced Dec. 17 that will ease U.S. sanctions against Cuba. The changes take effect and are published in the Federal Register today.

These measures will allow and facilitate a number of activities related to trade, shipping, travel, financial services, telecommunications and other areas. Among the major elements of the changes in the revised regulations are the following:

• Importation of Goods — Authorized U.S. travelers to Cuba will be allowed to import up to $400 worth of goods acquired in Cuba for personal use. This includes no more than $100 of alcohol or tobacco products.

• Small Business Growth — Certain micro-financing projects and entrepreneurial and business training, such as for private business and agricultural operations, will be authorized. Also, commercial imports of certain independent Cuban entrepreneur-produced goods and services, as determined by the State Department on a list to be published on its website, will be authorized.

• “Cash in Advance” — The regulatory interpretation of “cash in advance” is being redefined from “cash before shipment” to “cash before transfer of title to, and control of,” the exported items to allow expanded financing of authorized trade with Cuba.

“We firmly believe that allowing increased travel, commerce and the flow of information to and from Cuba will allow the United States to better advance our interests and improve the lives of ordinary Cubans,” says White House Press Secretary Josh Earnest.

“These revised regulations, together with those issued by the Commerce Department, will implement the policies on easing sanctions related to travel, remittances, trade and banking announced by the president on Dec. 17,” says U.S. Treasury Secretary Jack Lew, adding that these changes will help facilitate authorized business for U.S. exporters and enhance communications and commerce between Cuba and the United States.

The National Milk Producers Federation, U.S. Dairy Export Council (USDEC) and International Dairy Foods Association recently voiced support for changes in U.S. policy to facilitate exports and permit open travel to Cuba. (See “Dairy groups support coalition efforts to ease exports to Cuba” in last week’s issue of Cheese Market News.) According to USDEC President Tom Suber, Cuba has been importing approximately $200 million worth of dairy products in recent years, but virtually none has come from U.S. exporters due to the trade restrictions they faced.





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Today's Cheese Spot Trading
January 30, 2015

Barrels: $1.5050 (+1/4)
Blocks: $1.5325 (+2)

Click here for more market activity
Cheese Production
U.S. Total Nov.
948.708 mil. lbs.

Milk Production
23 State Total Dec.
15.741 bil. lbs.

Guest Columnist

Rhymes and reasons

Jim Mulhern, National Milk Producers Federation

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