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Growing export market aids
U.S. dairy prices, panelists say

July 18, 2014

By Alyssa Mitchell

EGG HARBOR, Wis. — Exporting is becoming increasingly important to the U.S. dairy industry as the world moves toward a more global dairy market. As export numbers continue to rise, they lend support to domestic dairy prices.

Three industry experts examined emerging foreign marketplaces and discussed how exporting is redefining traditional product pricing during the 2014 Wisconsin Dairy Products Association Dairy Symposium held this week in Door County, Wis.

The panel, moderated by Bob Fassbender, technical director, T.C. Jacoby & Co., St. Louis, included comments from Dermot Carey, senior vice president of Darigold Inc., Seattle; Phil Plourd, president of Blimling & Associates, Madison, Wis.; and Gus Jacoby, director, T.C. Jacoby & Co.

Fassbender notes that in 1994, U.S. dairy exports accounted for less than 4 percent of available milk solids. In 2013, U.S. dairy exports accounted for 15.5 percent of available milk solids.

Jacoby says U.S. dairy exports increased 15 percent in January through May 2014 compared to the previous year, adding that butterfat exports alone were up 84 percent and skim-solids exports (nonfat dry milk, skim milk powder, lactose, whey) were up 8.2 percent, collectively, while U.S. milk production was up just 1.1 percent.

“There’s definitely a deficit of butterfat which is lending support to the high butter price at the Chicago Mercantile Exchange,” Jacoby says.

On a broader scale, the international vs. domestic ratio for many companies’ overall revenue has increased, he says.

“The U.S. dairy industry is going through a significant change as the international impact is growing,” Jacoby says. “Exports are up faster than production. Dairy consumption trends are ever-changing, and constant changing dynamics of suppliers and customers is keeping the industry interesting and challenging.”

Carey notes that today, Darigold Inc. exports about 42 percent of the milk it receives on a daily basis.

While milk production growth has been moderate this year, Carey says the United States still produces more milk than it consumes. Fluid milk consumption in the United States is dropping annually, and the export market helps to sustain the industry.

In addition, population and middle class sectors are growing in emerging world markets with milk production deficits, such as China, he adds.

“They want our skim solids and whole milk powder to make their own products,” Carey says, noting that GDP growth and disposable income are driving consumption.

He adds that while China’s demand has slowed a bit from earlier this year, it will continue to import dairy products as it has milk production challenges due to lack of clean water, production costs and the transportation of raw milk.

Plourd notes that the growing export market has had an impact on relative pricing in the United States.

“There is some convergence globally in terms of price,” he says, noting the correlation seen between U.S. prices and prices at New Zealand’s Global Dairy Trade auction over the past couple of years as one example.

“The forward curve matters,” he adds. “People are using our futures markets to price exports, and the futures market also can indicate what’s to come. We watch it for clues.”

Carey notes some challenges for U.S. exporters are that the country is later than some to introduce products to foreign markets, and customers overseas have unique product specifications. For examples, Oceania has had a hold on the Chinese market for years, and the United States is only just beginning to prove itself as a new supplier.

“We’ll need to cater to consumer cultural needs internationally to continue the export demand we’ve seen,” Jacoby adds.

Plourd agrees, noting that while the United States produces a lot of nonfat dry milk, 80 percent salted butter and more Cheddar and Mozzarella, many foreign markets are looking for skim milk powders, 82 percent unsalted butter and Gouda.

Plourd notes the U.S. dairy industry does have a strong foodservice pipeline to foreign markets, particularly for Mozzarella through international pizza sales.

Plourd also asks how global the market really is, noting that the United States exports much of its product to Mexico, New Zealand to China, and the European Union to the Middle East/North Africa region.

“Can everyone win?” he asks. “Convergence by its nature probably means that prices go up in some regions and go down in others.”

He adds that while business is booming and prices are high, everyone is happy — but what happens if things go south?

“We’ve had unprecedented prosperity in the past five years, but will attitudes change if things go sour?” he asks. “Over time, will the ‘price losers’ stay in the game?”


Hearing eyes GMO benefits;
labeling advocates protest

July 18, 2014

WASHINGTON — The use of genetically modified organisms (GMOs) in agriculture and consumers’ views on this were key topics in a recent public hearing by the House Agriculture Committee’s Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture. Witnesses at the July 9 hearing to consider the benefits of biotechnology included professors from Cornell University, Harvard University and Tuskegee University, as well as a Vermont dairy farmer, mother and blogger who testified on behalf of Agri-Mark Dairy Cooperative and the National Council of Farmer Cooperatives.

All four witnesses emphasized how consumers, farmers and the environment have benefitted from traditional and modern applications of biotechnology. They also responded to questions from committee members concerning the challenges of relaying factual information about these technologies to the public.

Subcommittee Ranking Member Kurt Schrader, D-Ore., says the hearing made it clear that a lot of work still has to be done to communicate with the public about the benefits of biotechnology, and that he believes the committee can play a vital role in doing that.

“As science and technology advances,it’s important that we don’t pit different agriculture production systems against each other — we should support all forms of agriculture,” Schrader says. “From the creation of seeds that can better withstand drought to the development of fortified rice to assist those suffering from a deficiency of essential vitamins and minerals, biotech is playing a crucial role in our society by feeding the world, protecting our environment and improving global health.”

Joanna Lidback, a dairy farmer from northeast Vermont who also keeps a blog — — documenting her family’s life on the farm, testified that farmers need to do a better job connecting with the public when talking about the benefits that biotechnology brings to producers, consumers and the environment.

“The science shows that GMOs are safe and bring tremendous benefits, but we in agriculture have failed to communicate this effectively with the public,” Lidback testified.

She also highlighted the impact that being forced to use non-GMO feed would have on the 45-cow dairy farm she operates with her husband. She says their feed costs would go from $5,160 a month to $11,370 a month.

“We face a challenge brought on by what many in agriculture see as irrational consumer fears creating the potential for limiting our ability to use biotechnology in order to best utilize the resources we have in a sustainable way,” she says. “I’m happy to continue speaking up for our right to farm in whatever way we choose, which in our case includes biotechnology and the use of GMOs.”

David Just, professor at the Charles H. Dyson School of Applied Economics and Management at Cornell University and co-director of the Cornell Center for Behavioral Economics in Child Nutrition, testified about observations he has gathered from his research and studies that include consumer responses to food choices and the impact of food and agricultural policy on production and trade practices, including issues related to GMOs.

He noted in his testimony that consumers tend to view GMOs as a technology with a single set of characteristics rather than the thousands of differentiated modifications that now appear in the market.

“This misperception allows consumers to perceive GMOs in caricature, with each being equally risky and none possessing any particular benefits,” Just says. “Generally, when consumers consider GMOs, they tend to regard them in comparison to some hypothetical alternative food that is pristine and presents no perceived health risk. In essence, they consider it a question of GMO vs. an ideal food. In reality, the non-GMO alternative generally presents a greater and quantifiable health risk.”
For example, Just says, GMOs often are introduced specifically to eliminate the use of pesticides or other chemical treatments that can present a health risk, such as is the case with Bt corn, one of the products consumers are most likely to encounter.

Consumers have developed these misperceptions in part because the industry does not explain those benefits to them, Just says.

“Industry has focused understandably on marketing the benefits of growing these crops to farmers, leaving consumers with a latent understanding of why genetic modifications are introduced in the food supply to begin with,” he says. “When given the choice between conventional foods and GMOs, consumers express a strong preference for conventional foods. However, my research has shown that when the same choice is presented in such a way that consumers can understand the reasons for genetic modification, they overwhelmingly choose GMOs.”

The hearing comes in the midst of an ongoing debate over whether GMO foods should be labeled. In May, Vermont became the first state to enact a law that will require the labeling of foods that contain GMOs or that are produced with genetic engineering. (See “Vt. governor signs GMO labeling bill, braces for lawsuits” in the May 9, 2013, issue of Cheese Market News.) Last year Connecticut and Maine both passed GMO labeling laws that will take effect if enough surrounding states pass similar laws. More than 70 bills and ballot initiatives on GMO labeling have been introduced in more than 30 other states in 2013 and 2014, according to the non-profit Environmental Working Group.

Meanwhile, a bill was introduced in April by U.S. Rep. Mike Pompeo, R-Kan., that would set federal labeling standards for GMO foods and preempt states from passing their own mandatory GMO labeling requirements. This bill, the “Safe and Accurate Food Labeling Act,” has drawn support from dairy industry groups such as the International Dairy Foods Association and National Milk Producers Federation. (See “Bill seeks federal standards for GMO labeling” in the April 11, 2014, issue of Cheese Market News.)

On July 10, a day after the subcommittee hearing on biotechnology in agriculture, groups supporting GMO labeling gathered on Capitol Hill to protest Pompeo’s proposed bill.

“I came to Washington to stand up for transparency in our nation’s food supply,” says Jerry Greenfield, cofounder of Vermont-based ice cream company Ben & Jerry’s, which has been a strong supporter of Vermont’s recently-passed GMO labeling law. “I hope legislation that would keep consumers in the dark never sees the light of day, so states can continue to demand more information about their food.”

Greenfield and the other protesters delivered to lawmakers the names of more than 500,000 people who oppose Pompeo’s bill and urged them to support competing legislation introduced by Sen. Barbara Boxer, D-Calif., and Rep. Peter DeFazio, D-Ore., that would require a federal label on GMO foods.

Craft Restaurants’ owner and chef Tom Colicchio helped collect more than 250,000 of the names through Food Policy Action’s website and

“The overwhelming majority of Americans want GE (genetically-engineered) foods to be labeled,” he says. “As a chef and father, I want to know what I’m serving my customers and kids, and the majority of Americans want honest information about the food on their tables. Food Policy Action will be scoring co-sponsorship of the Pompeo bill in our annual scorecard and urging the public to hold lawmakers accountable for it come November.”


DFA agrees to settlement
in Northeast antitrust suit

July 18, 2014

KANSAS CITY, Mo. — Dairy Farmers of America (DFA) this week announced it has agreed to pay a total of $50 million to Northeast dairy farmers to settle antitrust allegations from a 2009 class action lawsuit.

The lawsuit alleges that DFA, Dairy Marketing Services and Dean Foods Co. were working together to monopolize the market for raw milk in the Northeast.

DFA notes it does not admit any wrongdoing under the terms of the settlement.

“After aggressively defending ourselves in a class action lawsuit filed in 2009 on behalf of dairy farmers in the Northeast region, DFA has agreed to a settlement in the case,” the cooperative says in a statement.

“While we believe the allegations against us were without merit and the activities of DFA, Dairy Marketing Services (DMS) and other affiliated milk marketing cooperatives in the Northeast benefited cooperative members and independent producers alike, the cost to continue to defend ourselves has become too great,” DFA says. “Under terms of the settlement, DFA has admitted no wrongdoing. This settlement will not affect DFA’s ability to operate, our members’ equity or the services provided to DFA members or DMS producers.”

Dean Foods in late 2010 agreed to a $30 million settlement in the same lawsuit and also did not admit any wrongdoing (see “Dean reaches $30M settlement with dairy farmers” in the Dec. 31, 2010, issue of Cheese Market News).

DFA notes that as a farmer-owned cooperative, it works hard to ensure the success and profitability of dairy farmers.

“We believe the milk marketing structure created in the Northeast — one that enables dairy farmers to work together to market milk — has benefited all dairy farmers,” DFA says. “With settlement reached, we look forward to moving beyond this matter.”


Stolen Tillamook tour buses found,
suspects arrested

July 18, 2014

MANTECA, Calif. — A Tillamook truck, trailer and three cheese sampling tour VW buses were stolen last weekend from a hotel parking lot in Manteca, Calif., where Tillamook’s Loaf Love Tour team was promoting its cheese.

Earlier this week, police found the truck and trailer, which were severely burned. However, police later found the three Tillamook VW mini cheese sampling buses in apparently original condition.

“We are thrilled with this news and extremely pleased to be able to recover our beloved cheese buses,” Tillamook says in a statement released Tuesday.

Manteca, Calif., police say on July 14, information was received on the possible whereabouts of the three stolen buses, valued at $300,000, which had been taken while parked overnight in the City of Manteca. Tillamook had offered a $10,000 reward for the safe recovery of the buses.

At approximately 8:30 p.m. on Monday, based on information gathered, a search warrant was obtained for a recently-rented storage unit at 49 Cosmic Court in the city of Copperopolis, Calif. The search warrant subsequently was served, and police located the three stolen Tillamook buses inside the storage locker. Police say the vehicles were found in their original condition and appeared to be undamaged.

Police have arrested three men suspected in the theft, booking them at the San Joaquin County Jail on charges of stolen vehicle, possession of stolen property, arson and conspiracy. The suspects, all Sacramento residents, are 32-year-old Brian Michael Lancaster, 38-year-old Ryan Anthony Monaco and 38-year-old Timothy Michael Davy.

The San Joaquin County’s Delta Regional Auto Theft Task Force, consisting of the California Highway Patrol, the Manteca Police Department, the San Joaquin County Sheriff Department, the Lodi Police Department, the San Joaquin County Probation Department and the San Joaquin County District Attorney’s Office, took the lead in the investigation.

“As we await further information about the conclusion of the investigation, Tillamook would like to express sincere appreciation to the law enforcement agencies who have been tirelessly working this case over the past few days, as well as to all of the media outlets and loyal Tillamook fans that helped spread the word about our missing vehicles,” Tillamook says in its statement. “While this kind of senseless crime is shocking and saddening, we are grateful for this happy ending.”


Parmissimo brand offers high-end, convenient cheese for U.S. consumers

By Kate Sander

ENGLEWOOD, N.J. — Convenience, portion control, high-end specialty foods — all of these are buzzwords in today’s retail marketing. But sometimes for consumers, it doesn’t seem like it all can be achieved simultaneously — convenience is sacrificed for the high-quality cheese that must be cut and sliced at the deli counter or at home, or conveniently packaged snacking cheese is difficult to find when it comes to specialty varieties.

However, Parmareggio, an Italian cheese company, is offering a product line that puts authentic Parmigiano Reggiano in convenient packaging, ranging from exact-weight wedges to flakes to individually-packaged single-serve chunks perfect for throwing into a lunch bag or pulling out of the refrigerator for a quick snack.

The cheese, marketed under the Parmissimo brand, has been available in Europe for years, but only since 2012 has been imported in the United States by Vitelli Foods, also imports pasta and Italian canned tomatoes.

“There was a need for an exact-weight format in the marketplace,” says Michael Giarratani, Parmissimo USA. “Deli managers are really busy and don’t have time to cut and weigh everything.

“At the same time, today’s consumer wants variety. People want to trade up and have alternatives. A 30-month Parmesan wedge is an opportunity to trade up,” he says.
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Cheese, butter price strength
expected throughout summer

July 11, 2014

By Alyssa Mitchell

MADISON, Wis. — Now in the midst of summer, cheese and butter prices at the Chicago Mercantile Exchange (CME) continue their hold at higher price levels, with market analysts anticipating continued price strength heading into fall.

While CME prices for cheese and butter currently are at a premium to most international price levels, they are more or less supported by strong U.S. demand and some tighter supply factors.

Brian Rice, principal at Rice Dairy LLC, Chicago, notes that demand for U.S. dairy has proven deep, global stocks are thin and data is not yet available that show a strong increase in milk production.

Strong demand for U.S. ice cream and other cream-based products overseas has contributed to tightness in the cream market, analysts add.

According to the Daily Dairy Report — compiled by dairy economists Mary Ledman, Sara Dorland, Sarina Sharp and Karen Endres — U.S. exports of ice cream in May were at a record 8,133 metric tons, 8.1 percent above the previous year.

“Consumers worldwide are enjoying more ice cream, Greek yogurt and cream-based dips than they have in the past, and firm demand for ice cream and other products that use milkfat has cut into butter production,” Daily Dairy Report says.

USDA’s Dairy Market News in its weekly market update notes the market tone for butter remains firm on account of constricted bulk butter and cream supplies hindering the rebuilding of stocks.

Dairy Market News says that while export activity for butter has stalled recently, domestic sales are strong for foodservice, retail and industrial use.

“Contacts note the higher butter price generally hasn’t affected demand,” Dairy Market News says.

CME butter continues to reach new records for the year, most recently June 30 when it reached $2.50 per pound. While it has retreated from that price level over the past week, butter still remained well above $2 to close out the week at $2.3725.

CME Cheddar prices have pulled back slightly from last month’s $2 highs but remain within the upper $1.90s range. Cheddar barrels closed the week at $1.9875 per pound, while blocks closed at $1.97.

Dairy Market News says that a tighter milk supply situation has kept cheese production at less than desired levels.

“Sales of cheese overall are strong, with some manufacturers struggling to fill contracted orders,” Dairy Market News says.

“Cheese prices are steadying and will probably remain in the $1.90s for at least a few months,” says Leslie J. Butler, agricultural economist at the University of California-Davis.

“As we sit in the dog days of summer and looking at our peak demand period only a few months away, lower prices seem less likely,” adds Bob Wellington, senior vice president and economist for Agri-Mark Inc., Methuen, Mass. “However, the large export market for U.S. dairy products cannot be maintained at recent levels due to the disparity in prices. Eventually the prices will align much closer, which will likely mean lower U.S. prices. The question is whether ‘eventually’ means this summer or next winter.”

Rice notes that while prices may ease later this year, it likely will take until autumn to have enough data to show stocks are trending toward significant build and cow numbers are growing. In addition, the timing of southern hemisphere production coming online and allowing product to push back or come into the United States may be a factor.

Anticipated U.S. milk production growth in the second half of the year could pressure commodity prices lower, analysts add.

Recent reports also have anticipated lower feed prices for the year.

“Dairy farmers have experienced very favorable margins in 2014, and the outlook for margins is good even as milk prices come off their peak,” Ledman says.

Rice says lower feed costs for sustained periods will help milk production, growing supply.

“If this materializes, this will be a key ingredient to lower dairy prices this fall, but demand will have a say in price, too,” he says.

Butler says he anticipates milk prices to ease a bit by the end of the year as high commodity prices and lower feed costs are likely to increase milk production.

Ledman notes that May milk production was the first month of the year to post an on-trend year-over-year gain.

“Favorable margins and feed costs are likely to further support milk production through the second half of 2014,” she says.

She adds that the “perfect storm” of a dramatic downturn in prices would include European, Oceania and U.S. milk production up more than 3 percent, continued recovery in China’s domestic milk output and a corresponding slowdown in milk powder imports, as well as increased imports of butterfat and cheese for processing in the United States during the fourth quarter.


Dairy groups eye use of GIs,
market access in trade talks

July 11, 2014

By Rena Archwamety

WASHINGTON — As trade negotiations continue with countries across both the Pacific and Atlantic, U.S. dairy industry organizations are looking for progress in market access to Japan as well as in negotiations on the use of common food names and geographical indications (GIs).

This week Trans-Pacific Partnership (TPP) negotiations continued in Ottawa, where negotiators, subject matter experts and other officials are meeting July 3-12. Lead negotiators worked to make progress on areas including sanitary and phytosanitary (SPS), intellectual rights and rules of origin chapters, though some of the most difficult elements of the negotiations still are stalled, according to Jaime Castaneda, senior vice president of trade policy, U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF), who attended the Ottawa meetings.

“Primarily, everyone is waiting for the United States and Japan to continue market access negotiations. That will provide a clear vision for where we are going,” Castaneda says.

Earlier this year, Japan’s economic minister said Japan would not abolish tariffs in five “sensitive” agricultural sectors, including dairy. U.S. dairy and other organizations have since been urging TPP negotiators to push Japan to provide meaningful agricultural market access in the agreement, or else to suspend negotiations with Japan and conclude a comprehensive TPP agreement with the other partners. (See “Dairy groups say support for TPP hinges on market access” in the June 6, 2014, issue of Cheese Market News.)

The International Dairy Foods Association (IDFA) says it hopes the agricultural market access talks with Japan move forward and in the right direction for the U.S. dairy industry. Negotiators from both countries plan to meet on a regular basis, including next week and the first week of August, until an agreement is hopefully reached, Castaneda says.

“The United States, because of pressure from organizations like ours, certainly is going back to Japan and saying ‘we cannot close an agreement on the TPP with you unless you open your market for our products,’” Castaneda says.

Meanwhile, negotiators from the United States and European Union meet next week in Brussels, Belgium, for the sixth round of Transatlantic Trade and Investment Partnership (TTIP) talks July 14-18. During this round, negotiators will continue their discussions on regulator issues, trade in goods and services, government procurement, environmental protection and labor rights, energy and raw materials, and opportunities for small- and medium-sized enterprises. As in previous rounds, U.S. and EU negotiators also will spend a day with representatives from industry, non-governmental organizations, consumer groups, trade unions, professional bodies and other groups, listening to their views and updating them on the status of the negotiations.

IDFA, USDEC and NMPF say they continue to oppose the EU’s attempts to claw back common/generic cheese names like parmesan and feta. USDEC’s office in Brussels will be participating in the stakeholders’ meeting, Castaneda says, and USDEC also will be in Brussels the following week to spend more time with negotiators after the meeting.

“USDEC and NMPF continue to press for resolution of the various tariff and non-tariff barriers, including GI restrictions on the use of common food names, that hold back U.S. dairy exports,” says Shawna Morris, vice president of trade policy, USDEC and NMPF. “USDEC staff will be attending the negotiations and using the opportunity to continue to reinforce U.S. dairy industry priorities with U.S. and EU negotiators.”


USDA lowers its 2014
milk production forecast

July 11, 2014

WASHINGTON — In its “World Agricultural Supply and Demand Estimates” report released this morning, USDA lowered its 2014 milk production forecast as slower growth in output per cow more than offsets a more rapid expansion in cow numbers.

The 2014 milk production forecast now is 205.9 billion pounds, down 200 million pounds from last month’s report. Meanwhile, USDA increased its 2015 milk production projection by 300 million pounds to 212.4 billion pounds, as higher milk prices and lower feed costs are expected to support more rapid growth in cow numbers and output per cow. U.S. milk production in 2013 was 201.2 billion pounds.

The report’s export forecasts for 2014 are lowered on a fat basis compared to last month’s report, but raised on a skim-solids basis. High domestic butter prices are expected to limit export opportunities, USDA says, but nonfat dry milk/skim milk powder (NDM/SMP) exports are expected to remain strong. Fat-basis exports in 2014 are forecast at 13.2 billion pounds, down 200 million pounds from last month’s report. The skim-solids basis export forecast for 2014 is increased by 1 billion pounds to 40.4 billion pounds.

For 2015, no change is forecast to fat-basis exports, currently forecast at 13.0 billion pounds, but strength in NDM/SMP sales will help support higher skim-solids exports which are forecast at 39.1 billion pounds, 500 million pounds more than in last month’s forecast.

Product prices are forecast higher for 2014 with strength in butter prices — currently butter is forecast to average $1.965-$2.025 per pound in 2014 ­­— expected to carry into 2015. Butter is forecast to average $1.650-$1.780 in 2015, up 1 cent from last month’s forecast.

Despite increased production, USDA says robust domestic demand and stronger NDM/SMP exports will support prices.

The 2014 NDM price is forecast at $1.835-$1.865, up from $1.820-$1.860 last month. The 2015 NDM price is projected to average $1.605-$1.675, unchanged from last month. Cheese is forecast to average $2.030-$2.060 in 2014, up from $2.015-$2.055 last month. In 2015, cheese is forecast to average $1.670-$1.770, unchanged from the forecast in last month’s report.

The Class III and Class IV prices for 2014 are raised on stronger component product prices. The average 2014 Class III price now is forecast to fall in the $21.00-$21.30 per hundredweight range, up from $20.80-$21.20 last month. The Class IV price is forecast to average in the $21.95-$22.35 range, up from $21.45-$21.95 last month. The 2014 all-milk price is forecast to average $23.25-$23.55, up from $22.90-$23.30.

For 2015, the Class III price forecast is unchanged at $16.95-$17.95, but the Class IV price forecast is increased by 5 cents to $18.70-$19.80, reflecting expected strength in butter prices. The all-milk price forecast for 2015 is unchanged at $19.75-$20.75.


Fire breaks out at Pacific
Cheese plant in Nevada

July 11, 2014

RENO, Nev. — The Reno, Nev., Fire Department responded to a fire Wednesday evening at the Pacific Cheese Co. plant located here.

According to Reno Fire Chief Mike Hernandez, the fire was reported at 7:40 p.m. Wednesday and was on the inside of the second story level of the building. Crews responded with one engine initially but the incident was upgraded to a two-alarm fire due to heavy smoke.

The fire was brought under control in about 90 minutes, Hernandez says, noting fire crews managed to protect as much product as possible and assisted with bringing the facility back online with electricity.

A statement from Pacific Cheese Co. notes the fire originated in the air handling system and impacted a localized area of the building. The company on Thursday temporarily suspended operations in its Reno plant in order to assess the damage.

“In the interim, Pacific Cheese will work diligently to meet customers’ needs with product from our other plants,” the company says. “We will provide a further update on the situation (Friday) to those customers who may be affected by this unfortunate occurrence.”

Hernandez says the fire was contained to the packaging unit on the second floor of the building, which is filled with product and boxes. Preserving the product was one of the main concerns in fighting the blaze, he adds.

No injuries were reported.


Retail shops promote cheeses
for gourmet summer picnics

July 4, 2014

By Rena Archwamety

MADISON, Wis. — The summer season is ripe with outdoor concerts, events in the park and weekend getaways. With more people outside and on-the-go, many cheese retailers are promoting picnic collections as a quick and convenient, yet upscale, way to enhance summer activities and entertaining.

Pastoral Artisan Cheese, Bread & Wine, which has three retail stores in Chicago, recently introduced new seasonal offerings for its 10th anniversary, including picnic selections designed with Chicago’s summer concerts and outdoor festivals in mind.

“Picnics are huge in Chicago, and it’s a really big part of our business. The lake is there, and when things get nice, everyone has a reawakening,” says Greg O’Neill, co-owner/founder of Pastoral.

He says a lot of people will go after work with colleagues to catch a concert at Millennium Park or attend other free events downtown, and the ability to pick up a picnic with cheese, wine and charcuterie from one of Pastoral’s downtown shops means they don’t have to cook or bring food from home. Viewing parties for World Cup soccer matches recently have taken place at Grant Park and Soldier Field, and O’Neill says the showing of the opening match was Pastoral’s busiest night of the season so far.

Pastoral has been offering picnics for years, and each year it comes up with new themes. Among the collections featured this summer are the Bavarian Picnic which includes house-made pimento cheese, two Wisconsin Cheddars, Quark, salami, soft pretzel, toastettes, pickled cauliflower and grainy mustard; the Quesophile Picnic with Spring Brook Raclette, Pecorino Fioretto, Clock Shadow Creamery Chevre, Salemville Blue, Snowfields, 1655 Gruyere and Pastoral’s house-made spiced almonds and fig preserves; and the Grand Picnic, which features Prairie Breeze, Brabander Gouda, Maxx Extra and Driftless cheeses, as well as Prosciutto, Salume, honey, mini oatcakes, spiced almonds and handmade truffles. Others include the Decadent Picnic, Francophile Picnic, Taste of the Midwest Picnic and Carnivore’s Feast Picnic.

All picnics are $39.99, with the exception of the Grand Picnic, which is $69.99, and all are eco-friendly with biodegradable packaging. Pastoral also will help customers pair their picnics with wine, craft beer or cider from the store.

Outdoor concerts and events also help drive picnic basket sales at The Truffle Cheese Shop in Denver. The small European-style shop, which carries a number of French, Italian and Spanish as well as other imported and domestic cheeses, is close to the Denver Botanic Gardens which hosts a popular summer concert series.

“Concert days always are a little busier,” says Janet Schaus, Truffle Cheese Shop manager. “Holidays like Mother’s Day and the Fourth of July also tend to be a bit busier.”

Picnickers can choose from two options: a $60 canvas bag with The Truffle Cheese Shop logo that they can keep, which is filled with three quarter-pound pieces of cheese, a quarter-pound of sliced meat, and accompaniments including olives, jelly, dried fruits, nuts and chocolate orange slices; or a $80-plus-deposit picnic basket, which includes a rental Nantucket Basket Co. lined wicker basket with plates, wine glasses and utensils, filled with four quarter-pound cheese varieties, a quarter-pound of sliced meat, pâte, baguette, olives, jelly, dried fruits, nuts, local chocolate and two bottles of sparkling San Pellegrino water.

The cheese varieties in both picnic collections are “cheesemonger’s choice” and constantly rotate, though the shop will accommodate special requests and substitutions for the cheeses and accompaniments, Schaus says.

“We like to mix up the milks and try to include cow, sheep and goat varieties, and mix textures — hard, medium and soft,” she says. “But they can be customized however the customer wants, and we’re happy to accommodate their needs.”

The Truffle Cheese Shop has been offering some version of a picnic basket for at least eight years, and Schaus says their popularity has grown, particularly with the Botanic Garden concerts where people see others with the picnics and ask about them. But it’s not limited to summertime — the shop also sells quite a few during winter ski season.

“We don’t advertise everywhere, so it’s word of mouth as our regular customers are doing it,” she says. “A lot of men will come in and get them because it’s really easy. We can’t sell wine at our store, so they will buy wine and then come in and buy a picnic basket for birthdays or anniversaries.”

Downtown Madison, Wis., cheese shop Fromagination offers a popular picnic and blanket service for Concerts on the Square, held Wednesday evenings from late June through July on the State Capitol grounds. With a 48-hour advance food order of $150 or more, the shop will put a blanket out on the Capitol lawn for customers earlier in the afternoon so they can simply pick up their food and bring it to their reserved spot just before the concert.

Fromagination owner Ken Monteleone says the concert day blanket service has been very well received.

“A lot of people who work on the east or west side of town don’t have a chance to find a spot,” he says. “We ask them where they want the blanket set out. It’s something they may not have otherwise been able to do.”

While the Wednesday concert night blanket service requires a minimum order, the shop also will loan out picnic blankets with any size purchase during other days of the week for customers who want to enjoy a picnic downtown.

Fromagination offers various themed picnic boxes for around $30 per collection. Many people request local cheeses, and the shop’s Locally Grown Picnic Box includes a selection of Wisconsin cheeses served with Nueske’s summer sausage, Wisconsin dried cherries and cranberries, Potter’s Crackers and a sweet treat. The sausage can be replaced with a side salad for a vegetarian option. French cheeses also play well with the picnic theme, Monteleone says, and the French Countryside Picnic Box includes a variety of classic French cheeses and cured salamis (or additional cheese for a veggie option), French pâte, grainy mustard and cornichons, as well as olives, fresh fruit, a demi baguette and a sweet treat. The shop also offers Italian- and Spanish-themed picnic boxes and recommends wine pairings that can be purchased separately.

This year to promote its picnic offerings and inspire outdoor entertaining ideas, Fromagination partnered with Madison’s A La Crate Vintage Rentals to host a “Pop-Up Picnic” June 7 outside its storefront. Fromagination supplied bottles of wine or beer, cheese and other artisan foods, while A La Crate set up vintage furnishings and decor.

“Because of our location on Capitol Square, we thought it would be a good idea this year to really plant the seed for regular outdoor entertaining,” Monteleone says. “We turned our outdoor patio into an unconventional picnic. We hope the momentum will build throughout the summer.”

Monteleone says Fromagination is looking at doing other pop-up picnics in different locations throughout the city this summer.

“We may visit a jewelry store on the west side, or a bakery on the east side,” he says. “We hope to continue to work with A La Crate and other like businesses. At a jewelry store, people are getting engaged and might be thinking about ideas for a reception. We want to encourage people to enjoy the outside without worrying about much preparation or cooking. It’s another option from your typical barbecue.”


Dairy groups voice concerns
to FDA on proposed FSMA reg

July 4, 2014

WASHINGTON — In comments submitted this week to FDA, the National Milk Producers Federation (NMPF) and International Dairy Foods Association (IDFA) voiced concerns on a pending food safety regulation that would impact the organizations’ members under the Food Safety Modernization Act (FSMA).

In joint comments submitted Monday to FDA’s Division of Dockets Management, NMPF and IDFA express concern with the direction of an FDA proposal on preventing intentional adulteration at dairy processing plants. The groups ask the agency to “fundamentally reconsider its proposed approach,” noting that like dairy farms, dairy processing facilities have worked with FDA to take an active approach in applying food defense concepts to their manufacturing operations.

“At the outset, we want to emphasize the success that voluntary efforts in (the area of food defense) have achieved in the absence of a regulatory mandate,” the groups say. “What our industry has been doing voluntarily to prevent intentional adulteration has been working.”

The “Focused Mitigation Strategies to Protect Food Against Intentional Adulteration” proposed rule addresses potential acts of terrorism that could cause massive public harm and economic disruption, and focuses on processes that are likely to occur at most food manufacturing facilities.

As currently written, the proposed rule would require each facility to pre- pare a Food Defense Plan that would include a review of whether the facility has one or more key activity types and, if so, identify focused mitigation strategies and procedures for monitoring, taking corrective actions and verifying activities. Companies would be required to document all food defense activities, and these documents would be subject to FDA inspection. (See “FDA proposes rules for food defense plans” in the Dec. 27, 2013, issue of Cheese Market News.)

NMPF and IDFA note that FDA’s proposed rule is the first its kind, as intentional adulteration of food has never previously been the subject of regulation in the United States. The food industry’s focus on food defense issues is relatively new, having only developed out of necessity following the terrorist attacks of Sept. 11, 2001, the groups note.

“To the best of our knowledge, since Sept. 11, 2001, there has not been a credible threat against, nor has there been an incident of massive public health harm involving the U.S. food supply,” the groups say. “Accordingly, the agency should proceed with caution and address regulation in this area one step at a time. Our experience has taught us that there are many different ways to effectively manage food defense programs, which is why we are concerned by the prescriptive nature of the proposed rule that focuses only on a narrow scope of activities and mitigation strategies.”

NMPF and IDFA propose that FDA only require basic food defense plans consisting of cost-effective mitigation strategies, allowing facilities to then identify reserved focused mitigation strategies that can be quickly implemented in response to heightened concerns or credible threats.

“We support a requirement that every registered facility (unless exempt) conduct a vulnerability assessment and then implement mitigation strategies for any significant vulnerabilities that were identified, applying practical and tailored management oversight as needed,” the groups say. “It should be acceptable for the vulnerability assessment to be conducted prior to publication of the final rule, and FDA should deem a facility to be in compliance if that facility participated in a government-led vulnerability assessment process.”

They add that “reserved strategies may include steps like changes to processes such as pasteurization temperature or the hiring of additional personnel to be part of a heightened observation process. When and if credible threats or intelligence of terrorist intentions and capabilities surface, FDA needs to communicate that information to its stakeholders so that we can take appropriate action to safeguard our products and the general public.”

In addition to FDA developing its communication system so it can reach stakeholders in the event credible threat information surfaces, FDA should convene, on at least an annual basis, a panel of food industry stakeholders to review the status of food industry threat intelligence, the groups say.

“Such an activity can be accomplished with the existing mechanisms and cleared personnel in the food and agriculture sector,” NMPF and IDFA say. “It should be done at the classified ‘secret’ level. In addition, food industry professionals should, on a periodic basis, meet with intelligence analysts in the respective intelligence community and exchange information about concerns to ensure that analysts and private sector personnel understand the scenarios that are of most concern and that analysts are cognizant of the signs that should cause alarm or additional scrutiny.”

The joint comments also emphasize that each processing facility and dairy farm is unique.

“If FDA were to require food defense plans, the dairy industry must have the flexibility to address intentional adulteration in ways that are custom-tailored with respect to their individual attributes rather than prescribing ‘one-size-fits-all’ specific criteria,” the groups say.

The groups also request that FDA re-propose this regulation to allow stakeholders an opportunity to comment on any modifications the agency plans to make in response to comments.

In separate comments filed Monday with FDA on the proposed rule, NMPF says efforts to impose added regulations on dairy farms under FSMA are not warranted because milk leaving farms for further processing is not a significant public health risk from intentional adulteration.

“We disagree with the premise that on-farm milk destined for pasteurization is a high-risk food,” says Beth Briczinski, vice president of dairy foods and nutrition, NMPF.

Briczinski notes that raw fluid milk for pasteurization moves among various regions of the country and is in constant flux to meet specific processing demands.

Because of the challenge of predicting the precise processing facility and type of product or ingredient to which an individual farm’s milk is ultimately destined, NMPF says that activities on dairy farms should not be addressed through this rule.

“Dairy farmers currently implement a number of general security strategies to protect the investment of their property, equipment, animals and milk supply, which further reduce any risk that may be represented by on-farm milk destined for pasteurization,” NMPF says.

The organization adds that if FDA were to require farms to comply with specific aspects of food defense regulations, such requirements should be developed in close collaboration with federal and state stakeholders, as well as the dairy industry through the National Conference on Interstate Milk Shipments.


U.S., Korea sign equivalency
agreement for organic products

July 4, 2014

WASHINGTON — Organic processed products certified in the United States or Korea now can be labeled as organic in either country, following the announcement of an organic equivalency agreement that was signed and formalized June 30 and took effect July 1.

“Korea is a growing, lucrative market for U.S. organic products, and this arrangement increases demand for American organic products,” says USDA Secretary Tom Vilsack. “This is another chapter in the success story of organic agriculture, which provides more economic opportunities for American producers, more choices for consumers and more jobs in rural communities across the country.”

Without the equivalency arrangement in place, organic farmers and businesses wanting to sell organic processed products in either country would have to obtain separate certifications to meet each country’s organic standards. This typically has resulted in two sets of fees, inspections and paperwork, and delays for U.S. farmers and businesses trying to export. The United States has similar organic equivalency arrangements with Canada, the European Union and Japan. This is Korea’s first organic equivalency arrangement with any trading partner.

The arrangement covers organic milk, condiments, cereal, baby food, frozen meals and other processed products. According to U.S. industry estimates, exports of organic processed products from the United States are valued at approximately $35 million annually.

The Organic Trade Association (OTA) notes that U.S. organic exports to Korea have been on the rise in recent years as the demand for organic products by Korea’s 50 million plus population, which enjoys the highest per-capita income in Asia, has flourished. However, the Korean organic market was effectively closed to the United States at the end of last year due to a change in Korea’s organic certification requirements.

The organic food market in Korea grew by an average rate of 50 percent from 2006 to 2011 and is expected to expand to $6 billion by 2020. In 2011, organic food represented 10 percent of the total agricultural products market in the country. Koreans are eating more organic milk and yogurt, OTA says, along with other organic packaged foods, beverages, baby food, sweets and bread.

“We extend our thanks and congratulations to the officials at the U.S. Department of Agriculture and the Office of the U.S. Trade Representative for their success after a year of rigorous negotiations,” says Lauren Batcha, CEO and executive director of OTA. “OTA and the U.S. organic industry have worked diligently to help make this happen. This new pact streamlines the trade of organic processed food products between the two countries while still upholding the highest standards of organic oversight. It’s a win for the organic sectors and for the consumers of both nations.”


Production of cheese in May up 2.2 percent

July 4, 2014

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 965.0 million pounds in May, up 2.2 percent from a year earlier, 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.)

May cheese production was up 1.3 percent from April 2014’s 952.7 million pounds. On an average daily basis, May cheese production was down 2.0 percent from the previous month.

Production of Mozzarella, the most-produced cheese in the United States, was up 7.1 percent in the May-to-May comparison to 328.9 million pounds. Italian-type cheese production, of which Mozzarella is the largest component, was up 5.1 percent from the previous May to 413.7 million pounds.

May Cheddar production was up 2.5 percent from the previous year to 288.3 million pounds. Total American-type cheese production, of which Cheddar is the largest component, was up 1.0 percent from May 2013 to 391.4 million pounds.

NASS reports cheese production in Wisconsin, the leading cheese-producing state, was up 0.4 percent from a year earlier to 242.7 million pounds in May. California followed with 204.9 million pounds, an increase of 3.2 percent from its production the previous year.

The next four cheese-producing states were Idaho with 73.4 million pounds, up 5.3 percent from its production a year earlier; New Mexico with 67.5 million pounds, up 4.0 percent; New York with 60.4 million pounds, down 2.6 percent; and Minnesota with 58.1 million pounds, up 3.0 percent.

NASS reports total U.S. butter production in May was 164.6 million pounds, up 0.5 percent from May 2013 but down 0.7 percent from April 2014. On an average daily basis, May butter production was down 3.9 percent from April.

California, the nation’s leading butter producer, produced 57.6 million pounds in May, up 1.4 percent from its production a year earlier.


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Today's Cheese Spot Trading
July 23, 2014

Barrels: $2.0325 (-3 3/4)
Blocks: $2.0400 (+1)

Click here for more market activity
Cheese Production
U.S. Total May
964.955 mil. lbs.

Milk Production
23 State Total May
16.897 bil. lbs.

Guest Columnist

The international market led the U.S. higher, is it now leading it down?

Brian Fletcher, Rice Dairy

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