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Latest round of NAFTA talks
includes dairy; progress stalls

October 20, 2017

WASHINGTON— The fourth round of talks on the North American Free Trade Agreement (NAFTA) concluded this week, and representatives from the United States, Canada and Mexico discussed the agreement’s agriculture chapter, including dairy.

In a new proposal, U.S. negotiators asked Canada to address U.S. concerns about Canada’s new dairy pricing policy, which effectively has blocked some U.S. dairy exports to Canadian markets and lowered prices for skim milk powders around the globe.

Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), attended the talks and says that although maintaining the U.S. dairy export market in Mexico is IDFA’s top priority in the modernization efforts, he consistently has pushed the administration to address Canada’s new Class 7 pricing policy, which undercuts skim milk powder prices on the global market. (See “Dairy industry seeks action over Canadian trade policy” in the April 7, 2017, issue of Cheese Market News.)

“Securing NAFTA provisions that curb pricing policies like this will help to ensure that U.S. dairy products can compete fairly in Canada, as well as in other markets,” Dykes says.

In this week’s talks, 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.

“The agreement has become very lopsided and needs to be rebalanced,” says U.S. Trade Representative Robert Lighthizer. “Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners.”

Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), says NMPF is pleased that U.S. trade negotiators have told Canada that its problematic dairy policies must be addressed in NAFTA negotiations.

He adds NMPF is pleased with the U.S. insistence that Canada rescind its new Class 7 milk pricing scheme.

“Class 7 is a government-sanctioned effort to dump Canada’s surplus milk solids onto the world market to the detriment of dairy farmers in the United States and around the world who have to compete with these subsidized exports,” Mulhern says. “It has to go.”

Mulhern adds the proposal advanced by the U.S. Trade Representative is the right approach to move dairy trade between the two countries closer to the free trade relationship that exists for most other agricultural products under NAFTA.

“For too long, Canada’s exorbitant tariffs on dairy imports — in the range of 250 to 300 percent — have been at odds with an overall free trade policy between our countries,” he says. “The administration’s proposal to reduce those tariffs and increase dairy trade between the United States and Canada is good for consumers on both sides of the border.”

The trade talks, which originally were expected to wrap up by year-end, have now been extended into the first quarter of 2018. The next round is scheduled for Nov. 17-21 in Mexico City.

“NAFTA partners are working hard to ensure the new agreement provides a solid framework to create jobs, economic growth and opportunity for the people of North America,” says a trilateral statement from Lighthizer, Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Secretary of the Economy Ildefonso Guajardo.

The leaders say negotiators will continue intersessional engagement as well as intensive consultations with their respective stakeholders.

“There are critical issues on the table for dairy, and IDFA recognizes that additional rounds of talks are necessary to resolve these issues,” Dykes says.

Mulhern adds that NMPF is gratified its trade negotiators have heard the concerns of America’s dairy farmers and cooperatives and made dairy trade a key objective in the U.S.-NAFTA agenda.

“The problems created by Canada’s dairy system must be resolved as part of the current negotiations,” he says. “There can be no acceptable NAFTA outcome unless these issues are resolved.”


CCFN raises concerns over
danbo cheese GI approval

October 20, 2017

WASHINGTON— According to the Consortium for Common Food Names (CCFN), in an aggressive new push by the European Union (EU) on geographical indications (GIs), the EU this week abandoned its commitment to international standards by confirming its approval in EU Official Journal a new GI that grants Denmark sole use of a common cheese name — “danbo.”

Unlike other GI registrations, “danbo” already holds the status of a generic term according to Codex Alimentarius, one of the leading international standards-setting bodies. In addition, both the EU as a whole and Denmark individually participated in and approved the process to preserve the inclusion of “danbo” in the Codex cheese standards, a process that was finalized in 2007.

“The EU has thumbed its nose at its World Trade Organization (WTO) commitment to respect international standards. This is an extremely alarming precedent that shows the EU breaking commitments in order to create its own international standard — with the aim to monopolize use of a term and gain an unfair advantage in the marketplace,” says Jaime Castaneda, executive director, CCFN.

“The European Commission has stated numerous times that its only goal is to protect a handful of names and leave generic terms alone,” he adds. “But this action suggests that this is not so, and we once again respectfully request that the EU put in writing all the generic food names and terms that are in jeopardy in its ongoing name grab. By approving a GI for an internationally standardized term, the EU demonstrates that all names are in question, including numerous names long covered by those international Codex standards — from mozzarella to cheddar.”

Castaneda says when producers no longer can use a common name, it effectively shuts them out of that category, which, he says, is the EU’s intention when it abuses GI policy.

“With today’s move, there is no longer any safe ground,” he says.

Danbo, a semi-soft cheese, is produced in numerous countries, including Uruguay, Argentina and South Africa, among others.

“It is inconceivable that the EU is proceeding with this step when Argentina and other nations are current producers of danbo,” says Osvaldo Capellini of the Federacion Panamericana de Lecheria (Panamerican Dairy Federation) and the Centro de la Industria Lechera Argentina (Argentina Dairy Association). “What is even more astonishing is that the EU is ignoring our interests even as they are seeking to negotiate on trade issues with Argentina and other Mercosur nations. This is not a positive beginning.”

The Uruguayan Dairy Association, representing manufacturers of danbo in that nation, echoed Capellini’s sentiments.

Castaneda notes that a fair solution regarding “danbo” would have been to include the geographical component of the name, which is done through compound terms such as “Provolone Valpadana” or “Prosciutto di Parma.” Multiple other GIs have employed this compound formulation, coupled with a clear reassurance that the generic portion of that name — such as “prosciutto” or “provolone” — remains generic for general use.

“One need only look at an approved name like ‘Gouda Holland’ to know that a better solution exists. ‘Danish Danbo’ would be a legitimate GI that includes the geographic location in its name,” he says.

“An equitable approach to GIs is possible, but food industries, farm organizations and governments — even individual nations within the EU itself — need to stand up to these EU encroachments to maintain fair competition in the global marketplace,” Castaneda says. “We invite all those who care about the importance of preserving a level playing field through international standards and commitments established under the WTO agreement to join with CCFN in insisting on a better way forward on GIs.”


Budget amendment would
protect farm bill from cuts

October 20, 2017

WASHINGTON — U.S. Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Committee on Agriculture, this week filed an amendment to the 2018 Senate budget resolution to protect the next farm bill from cuts in funding.

The U.S. Senate this week began debate on its fiscal year 2018 budget resolution.

“The 2014 Farm Bill streamlined over 100 programs and is already saving taxpayers $100 billion while still investing in our farmers and ranchers,” Stabenow says. “As we write the next farm bill, we need to send a clear message to our farmers, families and rural communities that they are not on the chopping block for cuts. This budget amendment will protect the farm bill from harmful reductions in funding and ensure that we continue to protect our land and water and invest in our farmers and small towns.”

Earlier this year, more than 500 food, farm and rural development groups came together to ask Congress not to make any cuts to the farm bill. Last week, Stabenow raised concerns that the budget resolution would open the door for cuts to agriculture. The amendment filed this week would protect the farm bill by creating a point of order against any reductions in funding to resources for crop insurance, nutrition, conservation, rural development and other important priorities during consideration of the 2018 Farm Bill.

“The Stabenow amendment is critical for the health of our communities,” says Roger Johnson, president of the National Farmers Union. “This budget must not cut farm and nutrition programs. Any budgetary cuts would come on top of the $23 billion in cuts made to the last farm bill and the estimated $100 billion in savings already realized under it. Family farmers are facing significant economic hardships, as net farm income has declined roughly 50 percent over the last four years. The situation demands adequate funding, not less. The federal budget should not be balanced on the backs of family farms.”


California dairy, ag sectors
assess wildfire damage

October 20, 2017

SACRAMENTO, Calif.— More than 10,000 firefighters continue making progress on nine large wildfires burning across California. This week, cooler temperatures and higher humidity aided firefighters in their efforts and allowed for additional evacuations to be lifted, according to the California Department of Forestry and Fire Protection (Cal Fire).

Since the start of the October fire siege Oct. 8, Cal Fire has responded to 250 new wildfires. At the peak of the wildfires there were 21 major wildfires that, in total, have burned more than 245,000 acres. Firefighters battled the destructive fires that at one time forced 100,000 to evacuate, destroyed an estimated 6,900 structures and took the lives of 42 people. Cal Fire notes more than 15,000 people remain evacuated by the fires.

Overall weather conditions in Northern California will remain cooler as a light storm system moves into the region, bringing rain in some areas in the late hours and overnight, Cal Fire said Thursday. However, a red flag warning is in effect in the Tahoe Basin and the Eastern Sierra for gusty winds and low humidity. Gusts up to 50 mph are possible.

While Cal Fire is leading overall operations, as of Oct. 15, the Forest Service also has committed more than 1,500 firefighters to the effort.

California Gov. Edmund G. Brown Jr. recently announced that the White House has approved California’s request for direct aid to individuals and families in Orange and Nevada counties who have suffered losses due to the fires. Brown notes the same assistance is available for residents of Napa and Sonoma counties as well as Butte, Lake, Mendocino and Yuba counties.

Melissa Lema, North Coast field representative for Western United Dairymen (WUD) notes the fires have been devastating for many people including those in the dairy sector.

While it is still too early to know the extend of the damage to acreage, Lema says there has been significant damage to pastureland.

“This area relies heavily on grazing and production of feed,” she says.

Several members had to evacuate, and milk was not able to be picked up for several days, Lema says. She notes many were able to return at least intermittently to milk cows last week, but wind direction change has made it difficult for residents to feel secure. This week, evacuation orders in residential areas have been lifted, and dairymen have been able to return permanently, she adds.

Lema notes that since many of the cows graze on open pasture, there was some “defensible space” around the dairies, sparing them from more significant damage.

Several groups including WUD have been collecting donations for those in need. WUD is holding a supply drive today and is working with area shelters to assess their specific needs.

Point Reyes Farmstead Cheese, Point Reyes Station, California, says its farm was not affected by the fire, but the company is matching gift card donations (clothing and groceries preferred) from donors who visit their farm or booth at the farmers’ market.


Frigo Cheese Heads introduces line extensions, promotions for all ages
Saputo says line is an ideal fit with snacking trends

By Kate Sander

SAINT LEONARD, Quebec — Frigo Cheese Heads is among the brands that leading dairy processor Saputo Inc. is taking to new heights.

With dozens of plants in Canada and the United States as well as other parts of the world, Quebec-based Saputo Inc. — through numerous large acquisitions over the past two decades — has grown to one of the top 10 dairy processors in the world, according to Rabobank, which annually lists the world’s top dairy companies.

In addition to Frigo Cheese Heads, which is the No. 1 String cheese producer in the United States in total volume sales, Saputo’s products are sold in countries around the world under well-known brand names including Saputo, Alexis de Portneuf, Armstrong, COON, Cracker Barrel, Dairyland, DairyStar, Friendship Dairies, La Paulina, Milk2Go/Lait’s Go, Neilson, Nutrilait, Scotsburn, Stella, Sungold, Treasure Cave and Woolwich Dairy.

Saputo says it is the largest cheese manufacturer and the leading fluid milk and cream processor in Canada. In the United States, Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products. The company also is one of the top three dairy processors in Argentina, and among the top four in Australia.

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Dairy issues on agenda in
fourth round of NAFTA talks

October 13, 2017

WASHINGTON — As the fourth round of North American Free Trade Agreement (NAFTA) renegotiation talks kicks off here this week, stakeholders say U.S. Agriculture Secretary Sonny Perdue has indicated negotiators are set to discuss dairy issues among the agreement’s three countries.

According to the International Dairy Foods Association (IDFA), in remarks last week to the Washington International Trade Association, Perdue confirmed the negotiators’ intent to put dairy and other critical agricultural trade issues on the table and said he believes negotiations offer “real opportunity” for U.S. access to Canada’s currently limited dairy market.

Michael Dykes, IDFA president and CEO, is attending the talks to advocate for U.S. dairy interests and engage with U.S. negotiators as a cleared agricultural advisor. During previous talks in Ottawa, Canada, Mexico City and Washington, D.C., Dykes participated in several briefings and consulted with U.S. congressional staff, U.S. negotiators and other foreign dairy industry leaders.

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

“Securing NAFTA provisions that curb these actions is the most important way we can ensure that new Canadian market access is meaningful for U.S. dairy companies and that U.S. dairy products can compete fairly in third-country markets,” Dykes says.

NAFTA negotiators also could consider adding provisions to block the European Union’s (EU) attempts to restrict the use of common food names in Canada and Mexico. Last month, the EU and Canada provisionally implemented a bilateral trade pact that blocks American dairy companies from using the common cheese names asiago, feta, fontina, gorgonzola and munster. The EU currently is revising its pact with Mexico to achieve similar exclusions.

While the U.S. dairy industry expresses hope that this week’s talks will address issues of importance to the industry, media reports this week indicated agriculture and business groups are concerned about the Trump administration’s plans for revamping NAFTA.

Reports indicate Trump continues to threaten possibly withdrawing from the agreement altogether. Trump met with Prime Minister of Canada Justin Trudeau at the White House on Wednesday, saying it was “possible” a deal could be made but also “possible” the United States would drop out of NAFTA.

News reports also say Trump is considering separate trade deals with Canada and Mexico should a NAFTA deal not be reached.

Ahead of the meeting, more than 300 state and local chambers of commerce representing businesses from all 50 states sent a letter to Trump expressing their support for a modernized NAFTA and urging the Trump administration to “do no harm” as negotiations continue.

“We’ve reached a critical moment, and the chamber has had no choice but to ring the alarm bells,” says Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. “There are several poison pill proposals still on the table that could doom the entire deal. The U.S. business community will stand up for an important agreement that makes North America stronger and more prosperous.”

The letter to Trump reiterated the business community’s support for NAFTA and the millions of American jobs it supports.

“Business leaders across the country know first-hand that trade with Canada and Mexico has created American jobs, boosted economic growth and strengthened local communities,” the letter says. “But we know we can do even more to seize the benefits of trade with our North American neighbors. To help facilitate that growth, we urge you to support America’s workers, farmers, ranchers and businesses of all sizes by protecting and preserving the deep economic ties and benefits the United States continues to enjoy under NAFTA.”

The fourth round of talks will conclude Oct. 17. No date has been announced for the fifth of seven planned rounds.

In other trade news, two influential agriculture voices in Washington, D.C., last week made it clear that the administration’s growing trade team is focused on issues that matter to the dairy industry, according to IDFA.

IDFA says Perdue stressed the importance of seeking new markets for agricultural trade in China, Japan, Indonesia, Vietnam, Thailand and the Philippines in comments last week at the Washington International Trade Association. He stressed the need for U.S. agriculture to “generally strengthen our commercial ties in this key area of the world.”

Meanwhile, if confirmed as Chief Agricultural Negotiator, Gregg Doud last week said he would work to preserve existing trade agreements, starting first with NAFTA, where he said there are “opportunities we can do better with regards to dairy and Canada.” Doud shared the remarks in a confirmation hearing before the Senate Finance Committee, where he also stressed the need for the United States to pursue bilateral trade deals in the Asia Pacific region, according to IDFA.

Doud says the U.S. “has to play offense” in countries such as Japan and China. For agricultural products, he says “the southeast Asian part of the world is the best opportunity we have.”

“It is encouraging to hear that the administration is prioritizing the current issues U.S. dairy faces in Canada and recognizing that gaining access to new markets now is critical for U.S. agriculture,” Dykes says. “Modernizing NAFTA is a great start, but the industry also needs an ambitious U.S. trade agenda to provide opportunities for dairy products in emerging markets with increasing protein demands.”


Northern California dairy, ag
industries grapple with fires

October 13, 2017

By Alyssa Mitchell

SACRAMENTO, Calif. — Some California dairy farms and operations have had to evacuate, and many are dealing with poor air quality conditions this week as wildfires continue to burn across the Northern California region.

According to the National Weather Service, elevated to critical fire weather conditions will continue in parts of California into the weekend. Dry, gusty winds and low humidity will continue to hinder firefighting efforts, especially late Friday into Saturday night.

The number of deaths from the fires rose to at least 23 as of press time, and an estimated 170,000 acres and 3,500 structures already have burned, ranking the fires as some of the most destructive in state history, California state officials say.

California Gov. Edmund G. Brown Jr. declared a state of emergency earlier this week for several Northern California counties including Solano, Napa, Sonoma and others and requested a Presidential Major Disaster Declaration to support the state and local response to the fires, which was approved.

Jennifer Giambroni, director of communications for the California Milk Advisory Board (CMAB), says some dairy farms have had to evacuate but there have been no reported injuries. Some farms were able to relocate cows.

In Sonoma County, a historic Clover Stornetta building was lost in the fires. While the building was unoccupied, it had historical significance; the dairy was founded in 1932 and used to be part of the dairy company Clover Stornetta Farms, now called Clover Sonoma.

In a statement on its Facebook page, Clover Sonoma says “although we’re extremely sad to see this bit of history lost, we’re happy to report this isn’t our current processing plant where we make our products. All of the Clover buildings are luckily safe here in Petaluma. The empty historic Stornetta building that was lost in the fire was a landmark of sorts, one the community admired as part of our local history, and belonged to a Clover neighbor who has tragically lost part of their land.”

Clover Sonoma adds it is working closely with its employees and farmers to take care of loved ones and the animals on the farms.

Weirauch Farm & Creamery, located in Sonoma County, on its Facebook page says it relocated its flock of sheep to a friend’s ranch toward the coast in case the fire creeps over the mountain from the Bennet Valley and Annadel Park fires that are closest to the creamery.

“Much relieved to have critters out of the smoke and safe despite the inconvenience,” the post says. “Just trying to hold it together and help others in the area. So much loss...heart hurts. Keeping our farm infrastructure and pasture watered down with sprinklers. We are safe. All OK. Fingers crossed.”

The Specialty Food Association this week provided an update on members in the impacted areas, including some cheesemakers.

According to the update, Bellwether Farms in Petaluma says the creamery is OK, but there is a lot of embers and ash around the property as the fire came very close.

Point Reyes Farmstead Cheese Co., located in Point Reyes Station, says it is OK and the farm is not in danger.

As the fires continue to impact the heart of Sonoma County farm and dairy land, officials say the impact on the local agricultural economy could be devastating.

A notice from the Dairy Council of California this week says Western United Dairymen (WUD) is gathering donations for residents in need. WUD says while its members are safe, some have sustained losses.

WUD next Friday, Oct. 20, will hold a supply drive. Trucks will be available to haul donations to Sonoma County. Those interested in donating can drop items at the WUD office in Modesto Oct. 20.

For more information, contact Melissa Lema, WUD North Coast Field Rep, at 707-779-2214 or email


WDE symposium looks at
changing dairy landscape

October 13, 2017

MADISON, Wis. — The dairy industry faces new opportunities and challenges as it adapts to changing trends in milk production, genetics, processing, consumer demand and shifting trade agreements, experts say.

The Wisconsin Department of Agriculture, Trade and Consumer Protection last week held a symposium during the World Dairy Expo in Madison, Wisconsin, featuring leading researchers from several top U.S. dairy states who shared insights about current issues facing the dairy industry.

Mark Stephenson, director of dairy policy at the University of Wisconsin-Madison, was joined by Christopher Wolf, professor of agriculture, food and resource economics at Michigan State University, and Andrew Novakovic, professor of agricultural economics at Cornell University.

Stephenson discussed the changing landscape of milk production across the United States. He notes changes including altering genetics in herds, milk production increases beyond local processing capacity as well as contraction in some regions are revealing themselves in milk prices.

He notes an increasing demand for milk particularly in the Southeastern United States while the bulk of milk production is coming out of Northern regions and California.

He adds the Northern region has experienced cooler-than-normal temperatures during this year’s milk-production season, resulting in even higher yields from dairy cows.

“Regional milk production patterns change and so must food systems,” he says.

Wolf, who has been researching farm-level financial data, presented a summary of findings in different regions, sizes and business models on dairy farms.

Wolfe notes three methods for measuring farm financial performance — profitability, solvency and liquidity.

Profitable farms have adequate returns to ownership, and financially viable farms have a positive net worth as well as liquidity and cash flow, he says.

Wolf discussed the average net farm income from 2000 to 2016 in Michigan, Wisconsin and New York as well as average rate of return on assets and debt to income ratio for various herd sizes.

Wolf notes that until the 1980s, lenders focused primarily on the balance sheet of farms (solvency), while today, lenders focus on debt repayment capacity (liquidity).

He adds that large herds tend to be more resilient because a lower cost of production means higher profitability. Larger farms typically have newer technologies and use market-based price risk tools. They also are more likely to be incorporated with tax and state transfer benefits, he says.

In addition, large herds recover more quickly in challenging years, and large herd performance is more uniform across farms than smaller herd performance, he says.

For processors looking to build plants, it’s important to take heed of factors including cost, which products to produce, customer base and transportation/distribution, Stephenson says. He notes global trade has been good for the U.S. dairy industry.

“Exports have supported a level of growth that we couldn’t otherwise have had,” he says, noting the Wisconsin shift toward specialty cheeses has crowded out many imports.

However, there also are downsides to world dairy trade, including stocks backing up during a downturn, and greater susceptibility to price volatility, he adds.

Novakovic provided an overview of both domestic and export demand for dairy products, including insights into recent imbalances in fat and protein.

Although cream and fat-based products are showing recent growth, the slack is being taken up by exports, which are primarily skim-solids based.

Exports of lowfat or non-fat products, in particular, are growing, he adds.

Novakovic notes milk prices have become more volatile with the elimination of the Dairy Product Price Support Program, trade liberalization and product price formulas.

Meanwhile, domestic conditions are more important to cheese and butter markets, but there is still volatility, he says, noting a divergence of U.S. and world prices occurs because various factors restrain imports, including substitutability of foreign products, inertia in sales relationships, various market transaction costs and tariffs.

Novakovic notes that dairy is an important part of the diet in high-income countries, providing both nutritional quality and pleasure. It is less important as a basic food (except for children) in developing countries and is less adaptable to food aid. Growth in consumption is rapid in emerging market countries, he adds.


USDA report ups forecast for milk output in 2017

October 13, 2017

WASHINGTON — Although forecast cow numbers for late 2017 and 2018 are slightly lower, USDA increased its 2017 and 2018 milk production forecasts in its “World Agricultural Supply and Demand Estimates” report released Thursday due to a more rapid pace of growth in milk per cow. Milk production now is forecast at 216.2 billion pounds in 2017, up 200 million pounds from last month’s forecast. Milk production in 2018 is forecast at 220.4 million pounds, up 300 million pounds from last month’s forecast.

Fat basis imports for 2017 and 2018 are raised on strength in butter imports but skim-solids imports are lowered for 2017 and unchanged for 2018, USDA says. Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018. Skim-solids exports for 2017 and 2018 are raised, primarily on stronger expected shipments of whey products, USDA says.

For 2017, butter and nonfat dry milk (NDM) prices are lowered on large supplies. Butter now is forecast to average $2.335-$2.365 per pound, down from $2.355-$2.395 in last month’s report. NDM is forecast at $0.870-$0.890, down a penny from last month’s report.

The 2017 whey price forecast, now $0.450-$0.460, is unchanged at the midpoint, and the cheese price forecast is raised on current demand strength to $1.625-$1.635, up from $1.610-$1.630 in last month’s report.

For 2018, continued demand strength for cheese is reflected in a higher price forecast, with cheese forecasted at $1.645-$1.735, up from last month’s $1.630-$1.730 projection. 2018 butter, NDM and whey prices are lowered on larger supplies and pressure from international prices, USDA says.

Butter is forecast to be in the $2.315-$2.435 range in 2018. NDM is forecast to be $0.815-$0.885, and dry whey is forecast at $0.380-$0.410.

The Class III price forecast is raised for 2017 to $16.15-$16.25 per hundredweight on stronger cheese prices, but for 2018, lower whey prices are expected to more than offset the increases in cheese prices, and the price forecast is lowered from last month to $16.00-$16.90.

The Class IV price is lowered for both years due to lower forecast butter and NDM prices. In 2017, Class IV is forecast at $15.25-$15.45. In 2018, Class IV is forecast at $14.70-$15.70, down from $15.10-$16.20

The 2017 all-milk price forecast range is $17.75-$17.85, unchanged at the midpoint, but the 2018 price is lowered to $17.45-$18.35, down from $17.55-$18.55 in last month’s forecast.


Industry: Trump should address EU GI lists with Japan, Mexico

October 6, 2017

WASHINGTON — In a letter sent this week to President Donald Trump, U.S. food and dairy industry groups representing farmers and food manufacturers across several sectors urged the United States to immediately impress upon Japan, Mexico and the Mercosur nations that the lists of geographical indications (GIs) they are considering for approval with the European Union (EU) — or soon will be considering — must not include common food and beverage terms such as “parmesan,” “vintage” and “bologna.”

Stakeholders note that in trade discussions with Japan and Mexico, the EU currently is pushing approval for lists of GIs that include many common food names in an effort to monopolize those terms and block market access for various foods, wines and other beverages.

Japan and Mexico are closing their comment periods on the lists within the next few days, after which they are expected to finalize their negotiations with the EU.

“On behalf of American farmers and food manufacturers across this country, we ask for your direct attention to an issue that could have a significant negative impact on U.S. market access with two major trade partners: Mexico and Japan,” the letter says. “If the U.S. government firmly expresses its concerns now to Mexico and Japan regarding the importance of safeguarding common names and terms for all to use, both nations might be more inclined to take the right and just steps in these discussions.”

The letter adds that for the same reasons, the groups encourage firm and clear communications on these points with the Mercosur bloc of countries — which includes Argentina, Brazil, Paraguay and Uruguay — the U.S. trading partner region most likely to next initiate a similar process to the ones currently underway in Mexico and Japan in light of ongoing EU-Mercosur free trade negotiations.

The letter is signed by American Farm Bureau Federation, Brewers Association, Consortium for Common Food Names (CCFN), Grocery Manufacturers Association, International Dairy Foods Association, National Council of Farmer Cooperatives, National Milk Producers Federation, North American Meat Institute, United Fresh, U.S. Dairy Export Council, USA Rice and Wine Institute.

Stakeholders say the Office of the U.S. Trade Representative (USTR) has recognized the severity of EU abuses of GI policies, noting in this year’s intellectual property (IP) report that “the EU GI agenda remains highly concerning, especially because of the significant extent to which it undermines the scope of trademarks and other IP rights held by U.S. producers and imposes barriers on market access for American-made goods and services that rely on the use of common names, such as parmesan or feta.”

Moreover, it is an agenda that continues to expand and is likely to threaten even more products, such as plant varieties, moving forward, USTR says.

“Many U.S. companies — and the farmers who provide them with raw goods — will be harmed if Japan and Mexico fully accept the EU lists as is without pushing back and objecting to the inclusion of common terms,” the industry letter to Trump says. “We hope the United States will make its voice heard with Mexico and Japan, and in turn with Mercosur countries, clearly stating that we expect them to respect current trade agreements, including our market access rights under those agreements, and that it is in their best interests to safeguard common terms for all producers.”

Jaime Castaneda, executive director of CCFN, says the EU’s strategy of using its free trade talks to hamper market access for its competitors, including many small and medium-sized U.S. companies, must not be tolerated.

“As Japan and Mexico prepare to make their final decisions on lengthy EU GI lists that would impair the use of common names, we call on the administration to send a firm message at the highest levels that we expect our trading partners to abide by their existing trade commitments to us and preserve market competition in these common product categories,” he says.


Dairy industry supports bill creating ag worker program

October 6, 2017

WASHINGTON — A coalition of dozens of dairy farm organizations, led by the National Milk Producers Federation (NMPF), is supporting new congressional legislation that would help address one of the most challenging issues affecting America’s milk producers: obtaining a dependable, legal workforce.

A founding member of the Agriculture Workforce Coalition (AWC), NMPF was joined by 57 dairy cooperatives and state dairy farmer associations this week on a letter backing Rep. Robert Goodlatte’s, R-Va., new Agriculture Guestworker (AG) Act.

The AG Act would establish an entirely new visa program, dubbed the H-2C visa, which would allow farm employers to bring in foreign workers on a year-round basis. It would replace the existing H-2A temporary visa program, which dairy farmers cannot use because their labor needs are year-round, not seasonal, stakeholders say.

A hearing on the Agricultural Guestworker Act has been postponed due to pressure from NumbersUSA, according to news reports. On its website, NumbersUSA defines itself as an “immigration-reduction organization.”

A notice on the House Judiciary Committee’s website says the markup, originally scheduled for Wednesday, is postponed until further notice.

NMPF President and CEO Jim Mulhern says Goodlatte’s bill is a significant step forward in providing positive, workable solutions for dairy farm employers.

“It recognizes that we need to move past the status quo and pursue a new approach to matching the supply and demand for workers in U.S. agriculture,” he says.

Mulhern says Goodlatte’s AG Act reflects many of the key principles that NMPF and its members have offered to the Judiciary Committee as the measure was developed. In addition to establishing the new type of visa for future workers, it would allow current undocumented farm workers to apply for H-2C visas so that they can participate legally in the agricultural workforce. The new H-2C program will be administered by USDA, not the Department of Labor, he notes.

George Rohrer, a dairy farmer in Dayton, Virginia, and a member of the NMPF board of directors, says that farmers “have waited for years for lawmakers to fix our broken immigration system. The AG Act is evidence that Congressman Goodlatte has listened to many of our concerns and is willing to try a new approach to the problem. As a farmer, it’s difficult to plan for tomorrow when you don’t know whether you’ll be able to hire qualified people today.”

In addition to legislation addressing the needs of farm employers, the House Judiciary Committee also will consider a measure requiring the use of the E-Verify database program. NMPF has been clear that mandatory E-Verify participation should only be required if farmers first have protections in place for current workers and access to a future labor pool.

The American Dairy Coalition this week also wrote to Goodlatte expressing support for the AG Act.

“Our country, and especially our agriculture industry, has been waiting for more than 20 years for positive immigration reform,” the coalition says. “We commend Chairman Goodlatte’s dedication, understanding and ambition to provide a legal guest worker program that will assist with the current agriculture labor shortages, add many new jobs for domestic workers and spur economic growth.”

Meanwhile, this week Ben & Jerry’s announced it has reached an agreement with Migrant Justice to implement a worker-driven “Milk with Dignity” (MD) Program in Ben & Jerry’s Northeast dairy supply chain.

Ben & Jerry’s says over the past two years, the parties have worked to accomplish their shared goal to bring together farm workers, farmers and dairy buyers to ensure just and dignified working conditions in Ben & Jerry’s Northeast dairy supply chain.

Work will begin this fall on a multi-year plan with the goal of eventually sourcing 100 percent of Ben & Jerry’s milk through the MD Program and a holistic dairy program that addresses all key aspects of dairy farming.

Migrant Justice’s Milk with Dignity Program, modeled after the Fair Food Program, enlists the resources of food industry leaders, such as Ben & Jerry’s, to provide a premium for dairy ingredients to participating farmers who agree to work toward compliance with the labor standards in the Milk with Dignity Code of Conduct. The premium paid to farmers helps offset farms’ costs of compliance with the code, rewards farms that comply and allows farmers to pass through a portion of the premium as a bonus paid to workers.

In the Milk with Dignity Program, compliance on the farm is achieved through a problem-solving approach among farmers, farm workers and the Milk with Dignity Standards Council (MDSC). The MDSC is an independent nonprofit that works with farmers and farm workers to understand, participate in and achieve compliance with labor standards in the code.

“This is an historic day for dairy workers,” says farm worker organizer and former dairy worker Enrique Balcazar. “We have worked tirelessly to get here, and now, we move forward towards a new day for us dairy workers. This is a huge step forward for us and for all workers, and we appreciate that Ben & Jerry’s has taken a leadership role to source its milk in a way that improves working and housing conditions on dairy farms.”

Both organizations put pen to paper at the Ben & Jerry’s scoop shop in their shared hometown of Burlington, Vermont. The plan now is to put the buyer’s agreement into practice by recruiting farmers from St. Albans Cooperative to join the program as soon as possible. Moving forward, the MD Program will be one of the focused “pillars” of Ben & Jerry’s new dairy sourcing to address the full farm ecosystem.

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World Dairy Expo contest auction raises $33,823

October 6, 2017

MADISON, Wis. — The 15th annual World Dairy Expo Championship Dairy Product Contest auction was held Tuesday evening at the World Dairy Expo. The auction, sponsored by the Wisconsin Dairy Products Association (WDPA), raised $33,823.

“This year’s contest far exceeded our hopes and expectations” says Brad Legreid, executive director, WDPA. “The number of product entries jumped almost 30 percent from last year, reaching a record total of 1,489 entries. These entries encompassed a full range of dairy products submitted by a comprehensive collection of dairy plants throughout North America. This contest keeps growing at a staggering rate as more and more companies learn about it and its myriad benefits.”

The 79 first-place winners received their trophies at the Oct. 3 auction and will have opportunities to market and promote their award-winning products.

A portion of the auction proceeds will be used to fund the Dr. Robert L. Bradley Scholarship, Wisconsin Dairy Products Association Scholarship and Madison Area Technical College Culinary Foundation Scholarship, all of which will be awarded annually to deserving students pursuing careers in the dairy industry. WDPA also will use a portion of the proceeds to fund a major sponsorship of the National Collegiate Dairy Product Judging Contest. Product donations also have been made in the past to the MATC Culinary Arts School, UW Food Science Department, the Ronald McDonald House and Second Harvest Food Bank.

The winning bids for each lot (some lots combined contest classes) are as follows:

• Lot 1: Foremost Farms Combined Class — Ecolab purchased a combined 65 pounds of Cheddar made by Foremost Farms, Marshfield, Wisconsin; Whole Milk Mozzarella made by Foremost Farms, Baraboo, Wisconsin; and Natural Flavor Provolone made by Foremost Farms, Clayton, Wisconsin, for $40 per pound for a total of $2,600.

• Lot 2: Open Class Cheese — Wisconsin Aging & Grading Cheese purchased a 20-pound wheel of Pastorale Blend made by Sartori Co., Plymouth, Wisconsin, for $90 per pound for a total of $1,800.

• Lot 3: Cold Pack Cheese — Masters Gallery Foods purchased 12 pounds of Swiss & Almond Cold Pack Cheese Food made by Pine River Pre-Pack Inc., Newtown, Wisconsin, for $160 per pound for a total of $1,920.

• Lot 4: Butter Combined Class — T.C. Jacoby & Co. purchased a combined 52 pounds of European Style Salted Butter made by California Dairies Inc., Visalia, California; 80 Percent Unsalted Butter made by Michigan Milk Producers Association, Constantine, Michigan; and Whipped Butter made by Dairy Farmers of America, Winnsboro, Texas, for $10 per pound for a total of $520.

• Lot 5: Dean Foods Combined Class — Dairy Farmers of America purchased a combined 6 pounds of Cottage Cheese with Pineapple and Sour Cream made by Dean Foods Co., Rockford, Illinois, for $75 per pound for a total of $450.

• Lot 6: Aldi Combined Class — Cheese Market News, Madison, Wisconsin, purchased a combined 18 pounds of Swiss & Gruyere Shredded Cheese and Make Fudge Not War ice cream made by Aldi Inc., Batavia, Illinois, for $6 per pound for a total of $108.

• Lot 7: Gifford’s Combined Class — Grassland Dairy Products purchased a combined 32 pounds of Old Fashioned Vanilla Ice Cream and Orange Sherbet made by Gifford’s Dairy Inc., Skowhegan, Maine, for $20 per pound for a total of $640.

• Lot 8: AMPI Combined Class — Kerry Ingredients purchased a combined 50 pounds of Monterey Jack made by Associated Milk Producers Inc. (AMPI), Rochester, Minnesota, and Pasteurized Process Monterey Jack and American Cheese with Red Bell & Jalapeno Peppers made by AMPI, Portage, Wisconsin, for $80 per pound for a total of $4,000.

• Lot 9: Schreiber Combined Class — Food Safety Net Services purchased a combined 26 pounds of Garden Vegetable Cream Cheese Spread, Whole Milk Plain Greek Yogurt, Non-Fat Greek Black Cherry Yogurt and Chipotle MAIO made by Schreiber Foods Inc., Green Bay, Wisconsin, for $80 per pound for a total of $2,080.

• Lot 10: Kelley Country Combined Class — Organic Valley purchased a combined 11 pounds of Dark Chocolate Ice Cream, Coffee Mill and Brownie Chipper Ice Cream Cookie Sandwich made by Kelley Country Creamery LLC, Fond du Lac, Wisconsin, for $60 per pound for a total of $660.

• Lot 11: Cabot Combined Class — DSM Food Specialties purchased a combined 45 pounds of White Oak Cheddar and Cabot Garden Veggie Sour Cream Dip made by Cabot Cooperative Creamery, Cabot, Vermont, for $20 per pound for a total of $900.

• Lot 12: Prairie Farms Combined Class — Kerry Ingredients purchased a combined 14 pounds of Neufchatel and Cream Cheese made by Prairie Farms Dairy Inc., Monona, Iowa; Regular Cottage Cheese 4 Percent and Lowfat Cottage Cheese 2 Percent made by Prairie Farms Dairy Inc., Carbondale, Illinois; Lowfat Sour Cream made by Hiland Dairy, Omaha, Nebraska; and Sour Cream Dip Jalapeno made by Prairie Farms Dairy, Fort Wayne, Indiana, for $55 per pound for a total of $770.

• Lot 13: Gelato — M-3 Insurance purchased 14 pounds of Mint Cookie Gelato made by Cedar Crest Ice Cream, Manitowoc, Wisconsin, for $60 per pound for a total of $840.

• Lot 14: Lidl Combined Class — Kellman Consulting purchased a combined 19 pounds of Extra Mature Cheddar, Blue Cheese Crumbles, Double Creme Brie Wedge and Pomegranate Mixed Berry Yogurt made by Lidl US LLC, Arlington, Virginia, for $35 per pound for a total of $665.

• Lot 15: Vanilla Ice Cream Combined Class — T.C. Jacoby & Co. purchased a combined 18 pounds of French Vanilla Ice Cream made by Hudsonville Ice Cream, Holland, Michigan, and Vanilla Bean Ice Cream made by The Dutch Udder LLC, Troy, New York, for $15 per pound for a total of $270.

• Lot 16: Wisconsin Cheese Combined Class — Dr. Bob Bradley purchased a combined 20 pounds of Brick made by Mill Creek Cheese, Arena, Wisconsin, and Fresh Mozzarella made by Crave Brothers Farmstead Cheese, Waterloo, Wisconsin, for $40 per pound for a total of $800.

• Lot 17: Wisconsin Cheese Combined Class — Galloway Co. purchased a combined 20 pounds of Low-Moisture Part-Skim Mozzarella made by Baker Cheese Inc., St. Cloud, Wisconsin, and Gouda made by Babcock Hall Dairy, Madison, Wisconsin, for $215 per pound for a total of $4,300.

• Lot 18: Frozen Yogurt — Wisconsin Aging & Grading Cheese purchased 18 pounds of Black Raspberry Frozen Yogurt made by Kwik Trip, La Crosse, Wisconsin, for $160 per pound for a total of $960.

• Lot 19: Marquez Brothers Combined Class — Chr. Hansen purchased a combined 14 pounds of Jalapeno Habanero Jack and El Mexicano Guava Drinkable Yogurt made by Marquez Brothers International Inc., Hanford, California, for $15 per pound for a total of $210.

• Lot 20: Yogurt Combined Class — Dr. Bob Bradley purchased a combined 18 pounds of Chobani Flip Perfect Peach Cobbler Yogurt made by Chobani, Twin Falls, Idaho; Strawberry Lowfat Yogurt made by Belfonte Ice Cream and Dairy Foods Co., Kansas City, Missouri; and Lowfat Blended Blueberry Yogurt made by Upstate Niagara Cooperative, Buffalo, New York, for $25 per pound for a total of $450.

• Lot 21: Combined Class — Masters Gallery Foods purchased a combined 15 pounds of Queso Fresco made by V&V Supremo Foods, Chicago, and Cranberry Cinnamon Chevre made by Saputo Cheese, Milwaukee, for $50 per pound for a total of $750.

• Lot 22: Combined Class — T.C. Jacoby & Co. purchased a combined 21 pounds of Smoked Gouda made by Fair Oaks Farms, Fair Oaks, Indiana, and Galbani Marinated Fresh Mozzarella Cherry Size made by Lactalis American Group, Nampa, Idaho, for $50 per pound for a total of $1,050.

• Lot 23: Ice Cream Combined Class — Grassland Dairy Products purchased a combined 24 pounds of Old Fashioned Ice Cream made by Arethusa Farm Dairy, Litchfield, Connecticut; Raspberry Cone Crunch Ice Cream made by Southeastern Grocers, Jacksonville, Florida; and Pistachio made by Oberweis Dairy, North Aurora, Illinois, for $25 per pound for a total of $600.

• Lot 24: Grand Champion Ice Cream — AgSource purchased 8 pounds of Cookie Dough Peanut Butter Ice Cream made by Oberweis Dairy, North Aurora, Illinois, for $135 per pound for a total of $1,080.

• Lot 25: Grand Champion Grade A — Dairy Farmers of America purchased 2 pounds of French Onion Dip made by Dean Foods Co., Rockford, Illinois, for $300 per pound for a total of $600.

• Lot 26: Grand Champion Cheese & Butter — Masters Gallery Foods purchased a 20-pound wheel of Black Pepper BellaVitano made by Sartori Co., Plymouth, Wisconsin, for $240 per pound for a total of $4,800.


Production of U.S. cheese climbs 2.3 percent in August

October 6, 2017

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 1.028 billion pounds in August, 2.3 percent above August 2016’s 1.005 billion pounds but down 0.7 percent from the 1.034 billion pounds produced in July 2017, according to preliminary data released this week by USDA’s National Agricultural Statistics Service
(NASS). (All figures are rounded. Please see CMN’s Dairy Production chart at right.)

Mozzarella was the most-produced cheese in the United States in August with 335.8 million pounds produced, up 2.3 percent from August 2016. Total Italian-type cheese production, of which Mozzarella is the largest component, was up 2.5 percent from the previous August to 436.0 million pounds.

Cheddar was the second-most produced cheese in the United States in August, with 284.7 million pounds produced. This was a 1.2-percent increase from the previous year. American-type cheese production, of which Cheddar is the largest component, totaled 398.6 million pounds in August, up 1.5 percent from August 2016.

Wisconsin led the nation’s cheese production with 272.3 million pounds of cheese produced in August, up 1.5 percent from its production in August 2016 but down 0.8 percent from July 2017. California followed with 208.9 million pounds, up 1.6 percent from its production a year earlier but 2.0 percent below its production in July 2017.

NASS says New York was the third-largest cheese-producing state in August with 77.8 million pounds, a 6.3 percent increase from its reported August 2016 production and up 13.7 percent from July 2017.

These states were followed by Idaho with 72.0 million pounds, down 8.0 percent from August 2016; Minnesota with 58.7 million pounds, up 11.4 percent from a year earlier; and New Mexico with 58.7 million pounds, down 4.9 percent from a year earlier.

California led the nation’s butter production with 38.7 million pounds produced in August, up 1.2 percent from its production in August 2016.

Total U.S. butter production in August was 131.2 million pounds, up 6.2 percent from August 2016’s 123.5 million pounds but down 3.4 percent from July 2017’s 135.8 million pounds.


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Today's Cheese Spot Trading
October 23, 2017

Barrels: $1.6600 (+2)
Blocks: $1.7125 (+4 1/4)

Click here for more market activity
Cheese Production
U.S. Total August
1.03 bil. lbs.

Milk Production
U.S. Total August
18.050 bil. lbs.

Guest Columnist

Statistically, run your business like you have to sell it

Bob Wolter, CBS-Global

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