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Expanding EU milk supply pressures global dairy market

November 17, 2017

By Alyssa Mitchell

MADISON, Wis. — Analysts say growth in European Union (EU) milk production is weighing heavily on dairy markets around the world.

HighGround Dairy, Chicago, says last week showed milk production in Germany in September up 4.5 percent over last year, while United Kingdom production was up 4.2 percent. Meanwhile, milk production in France was up 5.9 percent year over year.

HighGround notes data from Denmark, Greece, Sweden and Austria has not yet been reported, but without those countries, EU-24 milk production in September is up 4.2 percent year over year.

Eric Meyer, president, HighGround Dairy, says this is significantly higher than U.S. milk production growth and is applying pressure to most dairy commodities around the world.

Phil Plourd, president of Blimling and Associates, Madison, Wisconsin, and the services division of Dairy.com, says what happens in the global dairy complex over the next 3-6 months largely will be dictated by what happens in Europe.

“We hear that European prices and exporters are getting aggressive,” he says, noting this could be bearish for future U.S. dairy export prospects.

However, Dave Kurzawski, senior broker with FCStone, Chicago, says U.S. cheese exports are up 24 percent year-to-date through September, so the market is on pace to have a nice year of exporting cheese.

“Global cheese exports cooled a bit in September coming in below year-ago levels for the first time in 17 months,” he says. “This has some folks worried, but I’ll be watching demand in smaller import destinations around the world (collectively about 68 percent bigger than China), which have economies poised to grow in 2018. Time will tell, but I just don’t see a lot of downside for cheese exports right now.”

U.S. cheese and butter prices have been relatively well-supported in the midst of the domestic holiday buying season. Cheddar prices at the Chicago Mercantile Exchange (CME) found support in the $1.70s earlier this week before dipping into the $1.60s Thursday, settling at $1.6275 for barrels and $1.6200 for blocks today.

Analysts anticipate that cheese prices will slide further following the holiday demand period, which typically extends into January for the Super Bowl. CME futures show cheese in the $1.60s in December and the next few months.

Plourd says even if prices do fall in December, he does not anticipate it will be a sharp drop.

Meyer agrees, saying the market may be done moving up, but it’s still early for a big break.

He adds there are still ample cheese stocks and, subsequently, whey stocks also are high.

Kurzawski says while there is no doubt a historic precedent for a post-Thanksgiving drop in cheese prices, when balancing what appears to be solid cheese demand against a fairly orderly cheese market, the market never got too far out of line this fall.

“I don’t look for a massive collapse following the holiday,” he says. “My guess is that we’re a $1.60-$1.80 market through year-end. I think the futures market has done a good job of pricing in both current and future bearishness already.”

Meanwhile, CME butter continues to be well-supported, settling at $2.2150 per pound today. USDA’s Dairy Market News says some contacts are expecting the current market prices to hold steady, between $2.20 to $2.30 into the first quarter of 2018, as markets are somewhat steady of late.

Meyer says he expects the butter market to stay supported into 2018, noting the United States has done little to build more capacity to make butter, and the world is short on fat. However, prices could dip into the $2.10-$2.15 range by year-end, he says.

Kurzawski says that of the dairy complex, it seems butter has the most downside risk heading into next year.

“Presently, demand seems to be robust — particularly on modest breaks in price,” he says. “But the risk I see is more convergence of the massive multi-year butter/powder spread for 2018.”

CMN


Chobani announces $20M expansion of Twin Falls plant

November 17, 2017

TWIN FALLS, Idaho — Chobani is expanding its plant in Twin Falls by adding a 70,000-square-foot facility set to come online summer 2018.

Chobani originally commissioned the plant in 2013, investing more than $450 million to build the 1 million square foot facility. The company invested an additional $100 million last year to expand the plant with new product and production lines and equipment for new product categories.

Chobani is investing $20 million in this second expansion, which will serve Chobani’s employees and guests and will house Chobani’s global research and development team.

“Building the world’s largest yogurt plant, then expanding a few years later, and now expanding again, really indicates the ability of companies to grow with us here in Twin Falls,” says Twin Falls Mayor Shawn Barigar.

Chobani founder and CEO Hamdi Ulukaya has called Twin Falls the “Silicon Valley of food.”

“It’s a special ecosystem when it comes to food making. Our home in Idaho is not only a celebration of our employees and our community, but is also a space to inspire creativity, drive even more innovation and take us further on our mission to bring better food to more people,” Ulukaya says.

The new facility will include a dedicated visitor entrance, where people may learn more about Chobani’s history in the Magic Valley. It also will house a 2,000-square-foot employee fitness center overlooking the Sawtooth Mountains, a 7,000-square-foot gathering space and wellness rooms for new mothers.

Designed with sustainability in mind, the new building also will include 4,000 square feet of “smart glass,” which will regulate internal temperature and decrease energy consumption by 20 percent. Also, the facility will utilize 30,000 square feet of “smart roofing,” which will reflect sunlight and reduce heat absorption. Chobani is seeking LEED Silver certification by the U.S. Green Building Council.

CMN


LaClare acquires Missouri’s Heartland Dairy Creamery

November 17, 2017

MALONE, Wis. — LaClare Family Creamery is acquiring the assets of Missouri-based Heartland Dairy Creamery.

Terms of the transaction between the goat cheesemakers were undisclosed.

“The move will allow us to couple Heartland’s processing with our highly-regarded goat milk supply,” says Katie Fuhrmann, LaClare’s cheesemaker.

Both LaClare and Heartland have been on the ground floor of the growing goat cheese market. In 2015, each was widely recognized at the U.S. Champion Cheese Contest — Heartland winning a silver medal in the goat cheddar class and LaClare earning the runner up “Best of Show” title for its “American Originals” recipe.

“Farmer Charles Sharpe took a ‘family-first’ approach to his workforce when he launched Heartland Creamery in 2005. And that’s certainly another value we share,” says Larry Hedrich, co-founder of LaClare. “While Charles is no longer with us, his vision and values are something we’re privileged to continue.”

The acquisition process will take place over the next several weeks.

CMN


Publix expands dairy plant in Atlanta, Georgia

November 17, 2017

ATLANTA — Publix Super Markets, a Southeast regional grocer and the largest employee-owned grocery chain in the United States, joined the Georgia Department of Economic Development and Partnership Gwinnett in announcing the 40,000-square-foot expansion of the Publix Atlanta Dairy Plant in Gwinnett County located in Metro Atlanta.

The expansion is expected to create 44 jobs and a capital investment of $48.7 million to the area.

Project plans include installation of specialized equipment for extended shelf life products.

“The expansion of the Atlanta dairy plant will allow us to increase the volume of dairy production while expanding our customers’ in-store selections,” says Brenda Reid, Publix media and community relations manager.

This expansion will bring the total square footage for the dairy facility to approximately 240,000 square feet. The facility is a part of the Publix Distribution Center which totals more than 2 million square feet. Publix has nine distribution centers and 11 manufacturing facilities throughout the Southeast.

Publix is privately owned and operated by its 190,000 employees, with 2016 sales of $34 billion. Currently Publix has 1,157 stores in Florida, Georgia, Alabama, Tennessee, South Carolina and North Carolina.

CMN


Simply Artisan Reserve brand brings award-winning cheese to consumers

By Kate Sander

SANDPOINT, Idaho — Growing from roots that date back nearly seven decades, in the last three years Litehouse Foods has burst on the retail scene with its Blue-veined and Feta cheeses.

Best known for its Blue cheese salad dressing in the refrigerated produce section, the company is building its presence in the deli with its Simply Artisan Reserve branded Blue, Gorgonzola and Feta.

• A simple recipe grows into something much bigger

Back in 1949, company founder Ed Hawkins Sr., a chef, had no idea his ingenuity in developing a creamy Blue cheese dressing would lead to a company, let alone a new cheese brand. At the time, he was simply responding to his boss’s feedback that the salad dressing being served at the restaurant where he was working wasn’t high enough quality.

Almost a decade later, in 1958, Hawkins and his wife Lorena purchased their own restaurant, Hurschell’s Lighthouse — the source of the name for and official founding of what would become Litehouse Foods — and began serving his creation atop salads. Located on the shores of Lake Pend Oreille in Hope, Idaho, a tourist town, the restaurant quickly became known for the dressing, so much so that customers would bring in empty jars to fill with dressing to take home.

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Dairy industry touts NAFTA’s value amid talk of withdrawals

November 10, 2017

WASHINGTON — Media reports this week say U.S. Agriculture Secretary Sonny Perdue is working on contingency plans for the agriculture industry should the United States exit the North American Free Trade Agreement (NAFTA).

The fifth round of talks to renegotiate NAFTA is set to begin next week in Mexico City, and while stakeholders are hopeful a resolution can be reached, media reports say Perdue is working with the Trump administration and Congress on plans to help ease the burden on U.S. farmers and ranchers if the United States withdraws from the trade deal.

Media reports say Perdue is hopeful NAFTA will be successfully renegotiated but said there may be “some nervous bumps in the meantime.”

Talks stalled in the latest round held last month as U.S. negotiators put forth a proposal to pare back Canada’s supply management system for dairy and some other foods over the next decade, which was met with resistance. (See “Latest round of NAFTA talks includes dairy; progress stalls” in the Oct. 20, 2017, issue of Cheese Market News.)

This week, ag industry stakeholders including representatives from the International Dairy Foods Association (IDFA) and the National Milk Producers Federation (NMPF) participated in a NAFTA roundtable held by House Ag Committee Chair K. Michael Conaway, R-Texas, and Ranking Member Collin Peterson, D-Minn.

“All parties today were on the same page — NAFTA is important to agriculture and agriculture must remain a top priority in the negotiations,” Conaway says. “I am hopeful that both Canada and Mexico will come to the next round of negotiations prepared to have substantive conversations.”

Peterson adds he supports efforts to renegotiate NAFTA but it’s important to ensure the end result will work for agriculture and will not cause harm to agriculture markets.

“I’m particularly concerned about the impact Canada’s supply management program, which they were allowed to continue under NAFTA, is having on U.S. dairy and poultry producers,” Peterson says.

Michael Dykes, president and CEO, IDFA, attended the roundtable and said that while IDFA members fully support the administration’s efforts to modernize NAFTA, the threat of withdrawing from the agreement is creating uncertainty across the industry.

Dykes says maintaining the U.S. dairy industry’s export market in Mexico is the No. 1 priority for IDFA in the renegotiation, noting IDFA also is pushing for negotiators to address problems with Canada’s use of new milk pricing policies that undercut skim milk powder prices on the international market.

Shawna Morris, vice president of trade policy, NMPF, says the roundtable was a great opportunity to discuss the dairy industry’s key NAFTA priorities and concerns with a large number of House Ag Committee members.

“The message we delivered was that NAFTA is critically important to the U.S. dairy industry given the more than $1 billion we export to Mexico each year,” Morris says. “We absolutely cannot afford to lose NAFTA or see new restrictions on U.S. agricultural exports put in place. We support mending but not ending NAFTA by preserving market access established under the agreement already and focusing on how to further deepen our most important free trade agreement.”

Morris notes that top priorities to further expand North American trade and support U.S. dairy exports include:

• Tackling high Canadian dairy tariffs and resolving Canada’s habitual use of non-tariff policies to distort dairy trade — particularly its Class 7 pricing program introduced earlier this year; and

• Ensuring that non-tariff trade barriers are not erected to block U.S. cheese exports to U.S. dairy’s largest export market, Mexico, in light of European Union efforts to use geographical indications to restrict the use of various common food names in Mexico.

CMN


Foremost Farms USA to build dairy campus in Michigan

November 10, 2017

BARABOO, Wis. — Foremost Farms USA plans to build a dairy processing facility in Greenville, Michigan. Foremost Farms this week closed on the purchase of 96 acres of vacant property in Greenville and is working with the Michigan Economic Development Corp. and other Michigan and Greenville entities to ensure a successful project in the state of Michigan.

The project is contingent upon receiving approvals of necessary local and state incentives and support, including a long-term wastewater treatment solution.

“Foremost Farms’ executive management and board of directors plans to strategically build this facility in Greenville in order to control our own destiny in Michigan and unify our seven-state membership,” says Michael Doyle, president and CEO, Foremost Farms. “All of our members produce high-quality milk, and this facility is part of the plan to optimize that value today and into the future.”

Doyle notes Greenville is located just 30 miles west of the center point of Foremost Farms’ member milk in Michigan.
“It is an ideal location for us, and we look forward to moving ahead with a future dairy processing facility,” he says.

“It is our goal to continue to work with our strategic partners/alliances like we have established in the region with Michigan Milk Producers Association (MMPA) at Constantine, Michigan, to maximize dairy farmer investments, stabilize the regional milk market and add value for all producers in this market,” Doyle adds.

The facility is expected to be operational in 12 to 14 months and would receive up to 6 million pounds of raw milk per day. Foremost Farms initially would process milk solids for internal use in farmer-owned production facilities in the Upper Midwest, and for sales to customers and to strategic alliance partners.

Phase one of the project would provide the base to start a dairy processing “campus” at that site. Foremost Farms is engaged in preliminary talks with companies interested in value-added production facilities/capacity in alliance with Foremost Farms at the Greenville site.

“Our board of directors is looking forward to seeing this project become a reality,” says Foremost Farms Chairman Dave Scheevel. “The move effectively incorporates our Michigan member milk production into our core manufacturing business with a path to growth and stability in the region and for all Foremost Farms members.”

Greenville is located in west-central Michigan and has a population of about 8,500. The 96-acre parcel is part of the Greenville industrial park. The property purchase is the first step in Foremost Farms’ long-term strategy of managing milk solids across the cooperative’s seven-state membership in Wisconsin, Illinois, Michigan, Minnesota, Iowa, Indiana and Ohio, the company says.

Foremost Farms also is involved in a joint venture announced earlier this year to build and operate a new cheese and whey production facility in the state of Michigan. Upon completion, the plant is projected to process 8 million pounds of milk per day.
It is proposed that 50 percent of the joint venture will be owned by Glanbia plc and the 50-percent balance will be owned by Dairy Farmers of America, MMPA and Foremost Farms, according to Glanbia.

As part of the proposed joint venture, DFA, MMPA and Foremost Farms would supply all milk required by the plant, while Glanbia would have full responsibility for all commercial, technical and operational aspects of the business. If the project proceeds as planned, commissioning of the new facility is expected to take place in the second half of 2019. (For more information, see “Glanbia, DFA, MMPA and Foremost Farms announce plans for new U.S. cheese and whey facility” in the Jan. 27, 2017, issue of Cheese Market News.)

CMN


Fonterra joins JV with Tillamook, dairy producer

November 10, 2017

BOARDMAN, Ore. — Fonterra Cooperative Group is joining Tillamook County Creamery Association (TCCA) and dairy producer Threemile Canyon Farms as equal shareholders in Oregon-based whey protein concentrate and lactose manufacturer Columbia River Technologies.

Columbia River Technologies, which was originally founded in 2013 as a joint venture between TCCA and Threemile Canyon Farms, has been producing high-quality whey protein products for the past five years at a state-of-the-art production facility in Boardman, Oregon, adjacent to TCCA’s satellite cheesemaking plant. Since 2013, Fonterra has been the exclusive sales agency for these products.

TCCA has held milk supply agreements with Threemile for the last 16 years. The two organizations established the joint venture to maximize efficiencies at TCCA’s cheesemaking plant and increase value from the natural whey and lactose byproducts of the cheesemaking process.

In addition to being an early customer of the whey protein products, Fonterra has shared its dairy expertise since the joint venture’s start-up through onsite technical support and training.

Joe Coote, Fonterra regional director, ingredients, America, says joining the joint venture as an equal shareholder is a natural progression of Fonterra’s long-term relationship with TCCA and Threemile Canyon Farms. He adds it enables Fonterra to meet growing demand for ingredients such as whey protein from places outside New Zealand.

“The agreement reflects Fonterra’s move to develop a sustainable U.S.-sourcing network, providing a reliable and efficient chain of supply, and complementing New Zealand-sourced ingredients for our sports and infant nutrition customers,” Coote says.

TCCA President and CEO Patrick Criteser say the joint venture aligns with TCCA’s strategy to make responsible use of the byproducts of its primary cheese-making business and continue to create value for its farmer-owners.

“We’re pleased to further strengthen our existing relationship with Fonterra, an organization that understands the cooperative mindset and brings significant expertise in the area of whey products,” Criteser says.

“This agreement represents the logical alignment of three successful businesses with compatible core principles and values,” adds Marty Myers, general manager of Threemile Canyon Farms. “It leverages each company’s expertise and resources, and reinforces an already strong alliance for future strategic growth.”

CMN


Sheila Harsdorf appointed new DATCP secretary

November 10, 2017

WASHINGTON — Wisconsin Gov. Scott Walker today announced the appointment of state Sen. Sheila Harsdorf to serve as secretary of the Department of Agriculture, Trade and Consumer Protection (DATCP). Harsdorf will become the first woman in the agency’s 88-year history to serve as its secretary.

“Sheila’s experience as a highly-respected, dedicated legislator and dairy farmer make her an excellent fit to lead DATCP,” Walker says. “I thank Sheila for her hard work and willingness to continue serving the public, and I look forward to working with her to keep Wisconsin moving forward.”

Harsdorf has represented the Wisconsin State Senate’s 10th District since 2001 and served in leadership roles including majority caucus chair, chair of the Committee on Universities and Technical Colleges, as a member of the Joint Committee on Finance and as a member of the Committee on Agriculture, Small Business and Tourism. She previously represented the 30th Assembly District in the Wisconsin State Assembly from 1989-1998. She holds a degree in animal science from the University of Minnesota.

“I am honored to serve as DATCP secretary, and I thank Gov. Walker for entrusting me to lead,” Harsdorf says. “I’m excited to work with and support our farmers, businesses and consumers to promote a fair marketplace and economic growth in Wisconsin’s vibrant agriculture industry.”

Harsdorf’s resignation from the State Senate is effective at the close of business today, and her effective start date at DATCP is Nov. 13.

The Wisconsin Farm Bureau Federation says it is pleased with Walker’s appointment of Harsdorf.

“Having known Sheila for 30-plus years, she will be an outstanding advocate for Wisconsin agriculture,” says Wisconsin Farm Bureau Federation President Jim Holte. “Sheila understands the diversity and strength in the state’s $88.3 billion agricultural economy. Wisconsin farmers are in good hands with Sheila at the helm of this important agency.”

Holte notes Harsdorf worked diligently with her colleagues on Wisconsin’s right to farm and use value assessment of farmland laws.

“These two pieces of landmark legislation remain critical to the future of agriculture in Wisconsin,” he says. “We look forward to working with Sheila in her new role.”

CMN


Webinar looks at challenges in hiring, retaining workers

November 3, 2017

By Alyssa Mitchell

MADISON, Wis. — In an American Cheese Society (ACS) member webinar Thursday, “Cheese Plant Workers — How to Find and Retain These Essential Employees,” Don Otter with the Center for Dairy Research (CDR), Madison, Wisconsin, discussed the challenges facing the cheese industry today in finding and retaining quality employees.

Otter, a new Zealand native and coordinator for CDR’s Certificate in Dairy Processing Program, has more than 30 years of experience in the dairy industry and has worked in both academic and industry settings.

When it comes to finding and retaining employees, “there’s no magic bullet,” Otter says.

He notes the dairy landscape has changed over time, with more consolidation and less family-run operations.

In “the good ‘ol days,” cheese plant jobs were hard to get and were sought after, he says. There were family connections, and you often had a job for life. The social structure in factories was like a big family.

“Everyone knew each other,” he says. “Chances were, if you were an A shift worker, you likely married someone who also had that shift.”

The term “cheesemaker” has a wide continuum, Otter notes — from those who are on the floor doing manual work all the way through to supervising and management.

As many in the industry are getting ready to retire, recruitment efforts are crucial, he says.

Otter notes some of the perceived “disadvantages” of working at a cheese plant, including long hours that may include weekend work.

“People don’t want to work long hours anymore,” he says.

Meanwhile, while pay is competitive in Wisconsin relative to other manufacturing industries, it may be challenging depending on family size.

In addition, many plants in rural locations face challenges such as lack of affordable housing, reliable transportation and access to child care.

Some companies also have cited challenges in retaining quality employees who can pass drug screenings, he notes.

In rural areas, companies need to think about how to attract younger generations, like millennials, Otter says. Some examples include creating amenities young people want, like broadband, housing, social amenities and access to bike trails.

“We are competing for the workers for a lot of other industries paying roughly the same wage as us,” he says.

Other factors, including national immigration policy, rising incarceration rates, a growing opiate drug epidemic, a geographic mismatch between where workers want to be and where jobs are, and potential loss of public benefits or garnished child support payments are other challenges, Otter says.

He cited a couple of examples from recent articles profiling some Wisconsin cheese companies, noting some successful tactics have included positive word of mouth about the company, more housing opportunities opening up in the area, and offering bonuses like profit-sharing and tuition reimbursement.

Otter also shared results of a 2009 survey on reasons dairy employees left in Merced, San Joaquin and Stanislaus counties in California. Top reasons included compensation and benefits, challenges in the dairy economy, and working schedules and time off.

Otter notes cheesemaking also is hard work. While benefits can include a wealth of information to learn and apply, feelings of control and creativity, and a broad range of talents and skills, cons may include frustration with difficult-to-master skills, a lot of details requiring attention, personal responsibility and possible setbacks in production.

He notes the “three-year rule” is prevalent as retention rates drop dramatically after that time.

In order keep employees, Otter suggests keeping pay competitive, providing opportunities for a fulfilling career, keeping current with technological and other advancements in the industry, and providing tools and resources to be successful. This may include internal and external courses and training programs.

It’s also important to recognize existing talent within the company, he says. Look to highlight good work as well as areas that need improvement, and invest in the talent already working at the plant.

He also suggests looking outside traditional sources for the “right” employee, such as veterans, who are highly skilled, committed, hard working and fit in well.

Some companies also recognize that with today’s shortages, more businesses may move toward automation in plant processes.

“You have to find the right people in the first place, and then work to retain them,” Otter says.

A lot of this comes down to having good supervisors to train and manage people, he adds.

“‘All supervisors should praise everyone at least once a day’ is one thing I heard,” Otter says. “Most supervisors are more likely to tell people what they’re doing wrong, but should also focus on what they’re doing right.”

CMN


Dairy leaders discuss global trade at World Dairy Summit

November 3, 2017

BELFAST, Ireland — Dairy industry leaders from around the world discussed global trade challenges and opportunities during the World Dairy Summit this week in Belfast, Ireland, hosted by the International Dairy Federation (IDF).

International Dairy Foods Association (IDFA) President and CEO Michael Dykes provided an in-depth look at the shifting U.S. trade policy and potential impacts on dairy as part of Tuesday’s Global Dairy Policy and Economics track. He shared a brief history of how America’s growing concerns about job loss and a slow-growing economy have driven the nation’s voters and policymakers to a more protectionist attitude toward international trade policy.

However, the U.S. economy is starting to improve despite a new era of uncertainty about domestic trade policy, and the U.S. government should again embrace a proactive trade policy and focus on new bilateral free trade agreements, Dykes says. He notes that U.S. milk production likely will continue to outpace domestic consumption at the same time that the world’s population is expected to add 2 billion more people over the next 30 years.

Although U.S. consumption is growing for some dairy products, Dykes explains, America’s dairy production is on track to exceed demand with an additional 50 billion pounds of milk in the next decade. Dykes says American dairy products could play an increasingly important role in feeding the growing global population, set to increase to nine billion by 2050. IDFA is encouraging U.S. trade officials to move quickly on bilateral trade agreements before the European Union and other countries secure pacts in these new markets.

“It’s essential for our continued success to strategically secure new trade agreements that provide export opportunities to new and expanding markets before our global competitors gain competitive advantages in these new markets,” Dykes says.

Tuesday sessions at the summit featured several different trade policy discussions covering current issues and trends in the United States, Canada, the European Union, New Zealand and the United Kingdom (UK).

Also speaking Tuesday, Tomas Pietrangeli, UK managing director of Arla Foods, said the industry is facing the “biggest seismic change in the political and financial landscape in our lifetime,” and notes the end of free trade is a major risk.

“In order to protect the health of the dairy industry in the UK, we need to have tariff-free and barrier free trading conditions,” he says. “We are a business and an industry that make a significant contribution to the dairy industry and the wider UK economy.”

Pietrangeli says the UK government needs to publish its future plans for agriculture in the UK through a parliamentary bill at the earliest opportunity next year, adding that any delay would be detrimental to the industry.

“We need to have the best possible trading conditions with the EU,” he says. “We need to get Brexit right. Trade with the EU is the most important market for UK dairy businesses, and UK dairy should be recognized as a key player in Brexit negotiations. We do not want to see a situation where dairy businesses come under pressure because of restrictions on trading conditions.”

He adds, “there will be opportunities from Brexit, but we need time to adapt. We need assurance and we need our voice to be heard.”

New Zealand’s ambassador to the World Trade Organization (WTO), David Walker, told the summit that New Zealand had been involved in free trade deals since 1983 and also has worked through WTO. He says New Zealand hopes to make progress on a deal with the EU, and when the UK leaves the EU, a deal could be arranged between New Zealand and the UK.

Meanwhile, industry leaders indicated that the future for dairy is bright in emerging markets, particularly in Asia, Africa and Latin America.

Michael Hanley, group chief executive of Ireland’s Lakeland Dairies, says a substantial proportion of its revenues are generated from exports, and there is a host of opportunities for dairy businesses in global emerging markets.

“By 2050, three out of four people will either live in Africa or Asia,” he says. “It is vital for dairy businesses in developed markets to invest time and resources in building a presence to ensure dairy remains an integral part of consumers’ diets in these markets.”

The South American dairy industry also has opportunities for growth, says Monica Ganley, principal of Quarterra, a strategic agricultural advisory firm.

“Lucrative opportunities exist for dairy companies in this vibrant and rapidly developing market,” she says. “Recent cross-border (merger and acquisition) activity and consolidation of the industry in the region indicates that the future is bright. Politically and economically, I believe that South America is a tipping point and that the recent high growth in the dairy sector is the beginning of an exciting journey for the industry.”

Judith Bryans, president of IDF and chief executive of Dairy UK, adds, “Asia, Africa and Latin America represent some of the most upcoming markets for dairy produce, and we as an industry must endeavor to provide nutritious and sustainable dairy foods across those core markets.”

CMN


Saputo enters agreement to acquire Montchevre

November 3, 2017

MONTREAL — Saputo Inc. this week announced it has entered into an agreement to acquire Betin Inc., doing business as Montchevre.

Montchevre manufactures, markets and distributes goat cheese in the United States, mainly under the Montchevre brand. Its activities are conducted at one manufacturing facility in Belmont, Wisconsin, and the business employs around 320 people.

Arnaud Solandt, president and cofounder of Montchevre-Betin Inc., says in a statement on the Montchevre website that the decision to sell the company is “based on the conviction that this alliance will provide a stronger, more secure market for our 500-plus milk producers and will help propel Montchevre to new heights.”

Montchevre will become the flagship of Saputo’s goat cheese division, Solandt adds. Jean Rossard will remain the plant manager in Belmont, while Solandt will act as senior advisor assisting in the development of the Saputo goat cheese division.

“Montchevre and Saputo share a passion for quality which will not be compromised. We are confident that our customers will benefit from a broader logistics platform and some improved production capacity,” Solandt says. “Montchevre has worked with Saputo for many years, and together we have enjoyed many successes. We have grown fond of Saputo’s ethics and their commitment to quality. It is their vision for the future that has led us to this decision.”

Saputo says this transaction will enable its U.S. cheese division to broaden its presence in specialty cheese in the United States. The transaction is subject to customary conditions, including regulatory approval, and is expected to close by the end of 2017.

CMN


September U.S. cheese production rises 2.7 percent

November 3, 2017

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 1.014 billion pounds in September, 2.7 percent above September 2016’s 987.3 million pounds, according to preliminary data released this week by USDA’s National Agricultural Statistics Service (NASS).September cheese production was down 1.4 percent from the 1.028 billion pounds produced in August 2017, but when adjusted for the length of the months, production was up 1.8 percent on an average daily basis. (All figures are rounded. Please see CMN’s Dairy Production chart at right.)

Mozzarella was the most-produced cheese in the United States in September with 334.0 million pounds produced, up 0.2 percent from September 2016. Total Italian-type cheese production, of which Mozzarella is the largest component, was up 1.4 percent from the previous September to 435.2 million pounds.

Cheddar was the second-most produced cheese in the United States in September, with 282.8 million pounds produced. This was a 4.5-percent increase from the previous year. American-type cheese production, of which Cheddar is the largest component, totaled 393.8 million pounds in September, up 4.2 percent from September 2016.

Wisconsin led the nation’s cheese production with 271.6 million pounds of cheese produced in September, up 2.2 percent from its production in September 2016. California followed with 194.0 million pounds, down 4.5 percent from its production a year earlier.
NASS says Idaho was the third-largest cheese-producing state in September with 80.6 million pounds, down 1.5 percent from its production in September 2016.

The next three cheese-producing states were New York with 77.4 million pounds, a 10.1-percent increase from September 2016; New Mexico with 60.5 million pounds, up 1.0 percent; and Minnesota with 56.4 million pounds, up 6.6 percent.

California led the nation’s butter production with 36.1 million pounds produced in September 2017, down 9.7 percent from its production in September 2016.

Total U.S. butter production in September was 134.8 million pounds, down 0.3 percent from September 2016’s 135.3 million pounds.

September butter production was up 2.8 percent from August 2017’s 131.2 million pounds; adjusting for the length of the months September butter production was up 6.2 percent on an average daily basis.

CMN


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Today's Cheese Spot Trading
November 20, 2017


Barrels: $1.6400 (+1 1/4)
Blocks: $1.6000 (-2)


Click here for more market activity
Cheese Production
U.S. Total Sept.
1.01 bil. lbs.


Milk Production
U.S. Total Sept.
17.170 bil. lbs.

Guest Columnist

California efforts encourage Mexican consumers to ‘Busque El Sello’

Marco Albarrán Arozarena, Imalinx

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