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Dairy industry looks to engage
consumers in new campaign

May 19, 2017

ROSEMONT, Ill. — A new multiyear campaign announced this week by the Innovation Center for U.S. dairy in partnership with America’s dairy farm families and importers brings together all dairy products and industry sectors to reach out to and open a dialogue with consumers.

“Undeniably Dairy,” the first category campaign of its kind, aims to reintroduce U.S. consumers to dairy by both showcasing the enjoyment that comes from dairy products and spotlighting the positive role of the dairy community.

“Through the Innovation Center for U.S. Dairy, the dairy community has worked together to establish common ground on our top priorities and values, from responsible production and sustainable nutrition to economic value,” says Barbara O’Brien, president of the Innovation Center for U.S. Dairy. “We feel that now is the absolute right time to come together with one voice to share the community’s story — to celebrate the delicious, nutritious food in the dairy aisle and the people who bring them to your table.”

• Unified message

O’Brien joined Beth Engelmann, chief marketing and communications officer, Dairy Management Inc., and Amber Horn-Leiterman, Wisconsin dairy farmer and chair of the National Dairy Promotion and Research Board, in announcing the new campaign in a news conference Monday.

The Innovation Center for U.S. Dairy has worked over the last two years to formalize a strategic plan focused on social responsibility, O’Brien says. As different sectors of the industry have built trust and understanding among themselves, they are ready now to bring a unified message to consumers as well.

“People want to know who is manufacturing their food,” O’Brien says. “The vision ultimately is to ensure people that they can trust dairy as essential to their life — as a food group, in terms of its role in agriculture, and ensuring a plentiful supply over time.”

Engelmann says the objective of this new campaign is to “really loudly, proudly and in a consistent manner build trust with the consumer over time.”

The campaign will encompass multiple dairy categories, bringing together dairy producers, processors, brands and associations to work with retailers and foodservice, communicating a unified message to consumers. The initiative will span a minimum of three years and feature nimble and engaging content based on metrics and current issues, she adds.

“It heroizes the community. It will spark an emotional connection with consumers,” Engelmann says. “It’s not stagnant, not an advertising campaign. It’s a paid, owned and earned engagement campaign.”

In addition to showcasing the enjoyment that comes from dairy, the “Undeniably Dairy” campaign aims to reestablish the connection between the enjoyment of the product and the hard work and pride of the people who work in the dairy industry, Engelmann says. The campaign also seeks to reach out to the “conflicted health seeker” who has many choices in the dairy aisle, including non-dairy and plant-based alternatives, and people who have questions about the practices of the dairy industry.

“This campaign is unprecedented in that it unifies a vast and diverse dairy industry and array of dairy products behind a single platform,” she says.

• Pillars of dairy

Engelmann explains that the campaign will story tell based on a number of “pillars,” including messaging about responsible production, local communities, the healthfulness and nutrition of dairy, and real enjoyment.

A variety of multimedia content will remind people of the starring role dairy plays in special moments while also sharing how the industry continues to evolve, from using innovation and technology to deliver animal care and a nutrient-rich product, to supporting local communities. The full effort will feature a new logo, as well as convergent on-air and digital marketing with Food Network and the Cooking Channel. Original content will be shared across Facebook, YouTube and other social platforms. Monday a preview of the campaign video and other content were launched on the new website www.undeniablydairy.org.

Currently, the campaign is taking advantage of pre-summer anticipation to launch “Undeniably Dairy” to the industry and business media, as well as engage the dairy community to amplify and share campaign content. The official campaign launch will be in June, celebrating World Milk Day June 1 and kicking off National Dairy Month. It will coordinate with on-farm events in addition to the on-air and digital promotions throughout the month. Then from July through December, the campaign aims to sustain its momentum with ongoing engagement content and earned media opportunities that share the dairy industry story.

• Opening doors

Horn-Leiterman, who farms in partnership with her parents and brother, says in the past 15-20 years, dairy producers have been so focused on farming and their animals, they often have forgotten to open their doors to let people in.

“In that time, consumers have vastly changed. They want to know what we do. They need to trust us,” she says. “People no longer have that grandfather, uncle or cousin who farm to understand where basic food comes from.”

This campaign, she says, offers a chance for dairy farmers to “open the barn door” so that consumers gain trust and feel good about what they produce and how they produce it. She adds that it’s time that farmers share that 97 percent of all dairies are family owned and operated, that they take great care of their lands and utilize technology to be more effective and efficient. She adds that she wants consumers to pick up cheese, milk or ice cream and picture how the dairy produced by farm households crosses into their own homes.

“When you see a dairy farm, you’re usually looking at multiple generations of providing for the community, multiple generations of land conservation, multiple generations of business innovation,” Horn-Leiterman says. “And that often means being an early adopter when it comes to new technology that allows us to advance and improve animal care, capture and reuse our resources and maintain a total commitment to producing products that are safe, healthy and nutritious.”

CMN


Gouda, Edam hold potential
for growth in applications

May 19, 2017

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

By Stephanie Awe

MADISON, Wis. — Gouda and its sister cheese, Edam, have a rich, buttery, slightly sweet flavor and a smooth, creamy texture, developing more complexity and becoming firmer with age.

While the cheeses historically have differences, today they are minimal. With the exception of aged Gouda, both are creamy and mild. Since Edam is a lower fat cheese, it may have a firmer, drier texture than full-fat Gouda, according to David McCoy, managing director, Dairy Insights LLC, Muskego, Wisconsin.

Originating in Holland more than 800 years ago, Gouda first was made around the city of Gouda, in the province of South Holland, Netherlands, McCoy says. Similarly, Edam first was made around the city of Edam, Netherlands.

Cheese was traded in Gouda around this time, which is how Gouda cheese received its name, says Marieke Penterman, cheesemaker and owner, Marieke Gouda, Thorp, Wisconsin.

In the United States today, Gouda cheese’s requirements and make procedure are similar to those of Edam, except that its minimum milkfat content must be 46 percent by weight of the solids, according to FDA’s Code of Federal Regulations.

Meanwhile, Edam cheese must contain a minimum milkfat content of 40 percent by weight of the solids. Like Gouda, it must contain a maximum moisture content of 45 percent by weight.

There are a number of manufacturing procedures for Gouda-type cheeses in the United States, McCoy says. Traditionally, Gouda is made with whole milk, whereas Edam traditionally is made with partially skimmed milk. Once the vat is set, whey oftentimes is drained from the vat, heated and returned to the vat, creating a higher temperature and resulting in a drier cheese, allowing cheesemakers to control the temperature without having to use a steam-jacketed vat, McCoy says.

Eventually, the whey is drained from the vat and may be lightly salted before the curd is put into round hoops, which are gently pressed and brine salted before the cheese is covered with a waxy coating and cured for about 7 to 10 days, McCoy says, noting that raw milk cheese would need to be stored for at least 60 days at not less than 35 degrees Fahrenheit before sale.

Apart from more traditional methods, a number of manufacturers of Cheddar-type cheeses have begun making Gouda-style cheeses to meet export market needs, McCoy says. These manufacturers use a “hybrid” Gouda-Cheddar manufacturing procedure, largely due to the equipment available in mechanized Cheddar plants, he adds.

For this hybrid-type method, the vat typically is set using the same temperature profile as the traditional make, although the culture may differ. The curd typically is heated using the vat’s jacketed system. At the end of the procedure, the curd typically is fully drained, dry salted and pressed into blocks for ripening and aging, McCoy says.

As long as the percentages of fat and dry matter meet FDA’s standards, and the general flavor and texture of the cheese does not change, the nontraditional Gouda meets the regulations, McCoy adds.

• Gouda exports

About 10 years ago, the U.S. Dairy Export Council (USDEC) conducted research on cheeses made and consumed in various countries. USDEC discovered that while Gouda production was not significant in the United States, it is a relatively large traded commodity and is a key player in global cheese processing markets, says Ross Christieson, senior vice president of market research and analysis, USDEC.

In response, USDEC initiated a project to increase U.S. Gouda production and introduced U.S. cheesemakers to end users and customers so they would better understand product requirements. USDEC also helped cheesemakers — mostly commodity plants making Cheddar-type cheeses — understand the technology changes they would need to make to have the right end product, Christieson says.

Since implementing the project, U.S. Gouda export volumes have grown. Starting at about 147 metric tons of exported Gouda in 2007, the United States grew to export 22,112 metric tons in 2015, according to Christieson. Looking at 2015 data alone, U.S. Gouda exports exceeded its imports by nearly 14,000 metric tons.

Most Gouda in the United States is exported, with its main three markets in Mexico, Korea and Japan, Christieson adds.

“My sense is that the U.S. has about 20 percent of world Gouda trade,” Christieson says, also noting that USDEC currently is working to identify other markets where U.S. Gouda exports would thrive.

In terms of consumption, the European Union (EU) consumes about 60 percent of the world’s Gouda (natural only, sold in either retail or foodservice), Christieson says. The second-highest consumption is in Japan, followed by Chile, Mexico, Russia and Argentina. The United States is the seventh largest consumer of Gouda, he says.

The EU also is the largest consumption market for Edam (natural only, sold in retail and foodservice), with 43 percent of the world’s consumption. The EU is followed by Russia, Argentina and Peru. Meanwhile, the United States is eighth in overall Edam consumption, Christieson says.

• Retail sales

In the United States, Gouda retail volume sales were 11.5 million pounds in the latest 52 weeks as of April 16, 2017 (U.S. multi-outlet and convenience stores, fixed weight, natural cheese), according to data from Information Resources Inc. (IRI) courtesy of Dairy Management Inc. This volume was up 14.8 percent, continuing a five-year positive trend. Meanwhile, just 711,440 pounds of Edam were sold in the United States in this timeframe, both domestic and imported.

About 11 percent of retail Gouda sold was imported in the latest 52 weeks as of April 16, 2017, which is down about 10 percent, while domestic sales rose 20.9 percent, the data says. About 12 percent of Edam sold in the United States during this time also was imported, the IRI data adds.

Gouda volume sales are up compared to last year throughout all seasons — especially Thanksgiving and Christmas — and Edam sales have mostly spiked during winter holidays. While Edam sales are down from a year ago, the most recent Christmas week sales spike was higher than the previous year.

In addition, Gouda in retail outlets was sold mostly under national brands as opposed to private label, and Edam cheeses sold have been 100-percent branded, according to the data. While Edam is sold most in ball form, Gouda is most often sold in sliced form.

• Gouda, Edam markets; selling tactics

Companies offering Gouda and Edam have different approaches when it comes to where and how ­to sell their cheeses.

Penterman, who emigrated from Holland, decided to start Marieke Gouda upon moving to the United States and finding a lack of Goudas comparable to the ones produced in the Netherlands. Penterman, who wanted to start her own business before turning 30, returned to the Netherlands to learn how to make cheese and went on to become a licensed cheesemaker in Wisconsin. About 10 days before turning 30, Penterman says she opened the company’s retail store on its farm in Thorp, Wisconsin.

Marieke Gouda, which offers raw milk Gouda varieties using milk from its own farm as well as cultures and herbs from the Netherlands, makes its Goudas following Holland tradition.

Currently, the company exports its Gouda varieties to other regions across the world, although international sales are minimal, Penterman says, adding that it would be nice to get more sales outside of the United States but that domestic sales are the company’s main focus.

“It seems that through the years and wherever I go, more and more people have tried Gouda,” she says.
The company is well represented in the Midwest, Penterman says, but the company is working to open markets on the West Coast.

At Caves of Faribault, a subsidiary of Prairie Farms Dairy Inc. located in Faribault, Minnesota, Jeffs’ Select Gouda and St. Mary’s Grass Fed Gouda, made at Maple Leaf Cheese Co-op in Monroe, Wisconsin, are aged at its caves.

Jeffs’ Select and St. Mary’s were created through a collaboration between Jeff Jirik of Caves of Faribault; Jeff Wideman of Maple Leaf Cheese; and Rueben Nilsson of Caves of Faribault. Bruce Workman of Edelweiss Creamery, Monroe, Wisconsin, made the first batch of St. Mary’s, says Jirik, who is vice president of product development, Prairie Farms Dairy Inc. Cheese Division.

Jeffs’ Select is available nationwide at retail and foodservice outlets but is limited in capacity, while St. Mary’s is available at retail stores in the Midwest.

In addition, Caves of Faribault partnered with Rod Kregel of Swiss Valley Farms, now operating under Prairie Farms Dairy Inc., to offer a 108-pound Gouda block that is available domestically and internationally. The cheese is made at Prairie Farms’ plant in Luana, Iowa, Jirik says.

Gouda is a very exportable cheese, Jirik adds, because it is durable and ages well. He notes that not only is the United States seeing growth in Gouda consumption, but the cheese also is popular in Mexico and South American countries.

At Mullins Cheese, Mosinee, Wisconsin, the company offers 40-pound and 640-pound blocks of both Gouda and Edam, which are sold to customers under private label, says Josh Mullins, plant manager, Mullins Cheese.

He adds that Mullins Cheese’s Gouda and Edam, while comparable in flavor to more traditional versions of the cheeses, are nontraditional in packaging because of their block formats.

The company offers the nontraditional block packaging because it is what the marketplace is accepting, Mullins says, adding that the block format allows customers to put the cheese through high-speed slicers. A wheel, on the other hand, would give customers odd-shaped cuts, he says.

The fourth generation company makes things differently than it did 20 to 30 years ago, and these changes differentiate the company in the marketplace, Mullins notes.

“We’ve adapted to what the industry wants rather than making people adapt to what we want,” he says.

• Innovations and applications

Whether following close to tradition or veering far from it, companies continue to innovative their Gouda and Edam varieties as applications expand.

Caves of Faribault recently developed an aged Gouda with cocoa rubbed on the rind, according to Jill Ellingson, plant manager, Caves of Faribault, Prairie Farms Dairy Inc. Cheese Division. The cheese has been tested through the company’s factory store and will soon become available regionally.

The company also prides itself on the intense flavor of its Jeffs’ Select Gouda, which offers notes of caramel and reggiano. The caramel note, in particular, is challenging to achieve in a Gouda, Jirik says.

He adds that Goudas are versatile with uses for baking and cooking applications, and they can make for a great ingredient on restaurant menus. They also are a good breakfast cheese and do well melted over steaks, added into salads and mixed with fruit and nuts, he says.

Sandwiches are a popular application for Mullins Cheese’s Gouda and Edam blocks, which are ideal for slicing, Mullins says. The slices also are popular on party trays, combined with other cheeses such as Pepper Jack, Colby Jack and Cheddar, he adds.

Penterman notes that Gouda’s changing flavor as it ages ­— from smooth and creamy to sharp — allows for a variety of applications as it develops, including use on grilled cheese sandwiches, pastas, chilis, hamburgers and on cheese platters.

Marieke Gouda’s recently-developed Goudas, including new bacon and truffle flavors, do well with these applications, she says. The company also is working on a new flavor and conducting test batches on it, Penterman says.

CMN


Comments reflect support, concerns on California order

May 19, 2017

WASHINGTON — The comment period closed this week on a recommended decision to establish a federal milk marketing order (FMMO) for the state of California. Among the more than 30 comments filed, stakeholders voiced support but also concerns with the proposal.

USDA in February published a recommended decision proposing the issuance of an FMMO regulating the handling of milk in California. The recommended decision is based on the evidentiary record compiled as part of a public hearing held in Clovis, California, from September to November 2015. (See “Hearing begins on proposals to consider California FMMO” in the Sept. 25, 2015, issue of Cheese Market News.)

The hearing was called in response to an initial proposal submitted by three California dairy cooperatives — California Dairies Inc. (CDI), Dairy Farmers of America (DFA) and Land O’Lakes. (For more details on the cooperatives’ proposal, see “U.S. dairy industry reacts to idea of California federal order” in the Feb. 13, 2015, issue of Cheese Market News.)

Additional proposals then were submitted by the Dairy Institute of California, California Producer Handler Association (CPHA) and Ponderosa Dairy. (For more details on the additional proposals, see “California dairy groups, milk supplier file FMMO proposals” in the April 17, 2015, issue of Cheese Market News.)

The proposed FMMO incorporates the entire state of California and would adopt the same dairy product classification and pricing provisions used throughout the current FMMO system.

• Comments

In comments filed by attorneys on behalf of CDI, DFA and Land O’Lakes, the cooperatives say the recommended decision reflects the enormous efforts of the California dairy industry to bring the largest milk marketing area in the country into the fold of the federal milk marketing system, and the cooperatives “commend USDA-AMS (Agricultural Marketing Service) Dairy Programs for having seized this opportunity when presented.”

The cooperatives say the California FMMO is not only justified by current market conditions in California but also necessary to “establish and maintain” the orderly marketing conditions envisioned and required by the Agricultural Marketing Agreement Act (AMAA) of 1937.

“Generally, the California FMMO strikes the necessary balance of recognizing unique aspects of the California market — such as the historic California quota program — and leveling the playing field, so to speak, between California and the national milk market, both in terms of producer pricing and end product competition,” the cooperatives say.

However, the cooperatives add that it is important that USDA revisit and revise its recommended decision on the key components related to pooling to ensure that the AMAA’s purpose of orderly marketing is indeed established and maintained in the California FMMO as in the rest of the federal orders.

The cooperatives say there is no dispute that the pooling provisions of an FMMO need to be “tailored to the local market,” customized to address the marketing conditions of the marketing area and structured to establish and maintain orderly marketing.

They add that the recommended decision adopted Federal Order 30’s pooling provisions more or less by default simply because there was “no data on the record” of actual pooling experience in California.

“In doing so, however, the unique marketing conditions of California were not addressed,” the cooperatives say.

The cooperatives say if the proposal adopts pooling provisions mirroring Order 30, these provisions do not “establish and maintain” orderly marketing conditions, but will allow intolerably inequitable marketing disorder with 40 percent depooling.

“If, despite the compelling case for adoption of inclusive pooling, the department does not adopt it, the final decision will need to look beyond repooling provisions currently in place in other FMMOs to provide California producers with acceptable levels of price uniformity via marketwide pooling,” the cooperatives say, noting the most stringent repooling limitation currently in force in the federal order system — 115 percent — is in Mideast Order 33.

“That provision, however, will not be workable in California as is clear from comparison of the orders’ disparate characteristics,” the cooperatives add.

Meanwhile, attorneys for the Dairy Institute of California in their comments note that while the U.S. Secretary of Agriculture commendably proceeds to propose an FMMO that generally follows decades of precedent, there is an initial fatal flaw in the underlying proposal, together with an unexplained failure to consider all the record evidence or rely on California’s current market conditions.

“No California FMMO is justified on this record. If such a California FMMO is justified, then the proposed pooling standards that operate like other FMMOs and the decision to have California handle and operate quota are, as the secretary proposes, justified and correct,” Dairy Institute says.

However, the record is replete with discussion from most parties on whether disorderly marketing conditions exist, or are even needed, to warrant promulgation of a California FMMO, the institute notes.

“The secretary seemingly adopts a spectrum approach, where an FMMO may be promulgated if it is somewhat more orderly, even minutely, than the current marketing conditions,” Dairy Institute adds. “But nowhere did Congress say ‘provide more orderly marketing conditions’ as the secretary asserts ... The corollary to the plain meaning rule is that statutes are not to be ‘enlarged,’ and as a result, agencies and courts cannot add language that Congress has not included. Here the secretary seeks to change the meaning of the statute by inserting the word ‘more’ before ‘orderly marketing conditions.’”

Steven J. Rosenbaum, counsel for the International Dairy Foods Association (IDFA), submitted comments agreeing with this point, noting in addition to statutory and precedent reasons, it should as a matter of sound economics and government policy be necessary first to find that disorder exists in a marketplace before promulgating government regulations that are designed to change existing marketplace relationships and behavior.

“IDFA submits that USDA must apply the ‘disorderly marketing conditions’ test in promulgating or amending FMMOs,” Rosenbaum says, noting, however, that IDFA takes no position on whether an FMMO should be promulgated for the state of California.

Dairy Institute continues that “the secretary himself conceded that the proposed federal order will function in much the same way as a state order (notwithstanding the significant increase in the cost of milk), further betraying the inappropriateness of implementing a federal order to replace a fully functioning state order when marketing conditions are not disorderly.”

“If that is the case, why would an FMMO be necessary?” Dairy Institute asks.

Dairy Institute adds that while it cannot accept the secretary’s rationale for adopting an FMMO, it commends the secretary for proposing an order, if any, that has the look, feel and operational consistency with all other FMMOs.

If at some point in the future USDA is able to provide the appropriate foundation for a California federal order, then it must adopt a FMMO that uses traditional performance-based pooling standards to establish which producers are eligible to share in the Class I market and by extension reject mandatory pooling of all California milk, Dairy Institute says.

• Quota program

USDA’s recommendation to establish an FMMO for the state of California also provides for the recognition of producer quota as administered by the California Department of Food and Agriculture (CDFA).

“Throughout the hearing and in post-hearing briefs, dairy farmers and their cooperative representatives stressed that while a California FMMO would provide them a more equitable price for their milk, entry into the FMMO system must not diminish or disturb, in any form, California quota values,” USDA says in its recommended decision. “This decision finds that the package of FMMO provisions recommended in the decision would create more orderly marketing of milk in California, adhere to all the provisions of the Agricultural Marketing Agreement Act of 1937 and allow the California quota program to operate independently of the FMMO. In doing so, the California quota program will not be diminished or disturbed in any form by California’s entry into the FMMO system.”

“In response to the USDA’s recommendation and input from California milk producers, CDFA is ready and willing to establish a stand-alone, producer-funded quota program,” says Karen Ross, CDFA secretary. “However, to ensure a stand-alone quota program is not disrupted, it is necessary to remove any statutory ambiguity that may exist in California’s statutes.”

Therefore, she adds, it is CDFA’s intention to sponsor legislation to ensure the proper authority lies with the department, convene the Producer Review Board, develop the necessary details for a stand-alone quota program and hold a producer referendum on the board’s recommendations.

Ross notes it is CDFA’s goal that all of this should happen prior to the California FMMO producer referendum.

“We believe this would lead to a more efficient administration of the program for all parties,” she says.
Also last week, Ross sent a letter to interested milk market producers noting she has charged the Producer Review Board with developing a recommendation outlining the criteria for a stand-alone producer-funded quota program.

Ross encourages all interested parties to attend and participate in upcoming board meetings (all meetings are public). The first meeting is scheduled for May 30 at the Modesto Centre Plaza in Modesto, with two subsequent meetings to be held June 15 and June 29 at the same location.

In its comments, CDI, DFA and Land O’Lakes note they generally support USDA’s recommendations for maintaining and protecting the California quota program, but the cooperatives propose a minor modification to ensure that the “California Quota Program” properly refers to all applicable statutory and regulatory authority necessary for CDFA’s continued administration and enforcement of the quota program.

“Should CDFA determine, however, that for any reason it cannot continue to maintain, administer and enforce the quota program, then the cooperatives take great exception to the recommended decision’s proposed method of continuing the quota program as inadequate and against the spirit and intent of the 2014 Farm Bill’s mandate with regard to quota,” the cooperatives say.

CPHA in its comments says it is optimistic that through the Producer Review Board, and through its own historical knowledge and experience, CDFA will be able to maintain, administer and enforce the quota program in a way that is consistent with the historical treatment of quota and exempt quota.

“Even with that optimism, the recommended decision does not answer questions about the quota program that need to be answered prior to a vote or closure of a final comment period,” CPHA says.

CPHA recommends that USDA modify the language of the recommended decision to make the quota program mandatory and leave the comment period open for 30 days following CDFA’s final proposal regarding how it will maintain, administer and enforce the quota program.

To view additional comments, visit www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&dct=PS&D=AMS-DA-14-0095.

CMN


USTR announces renegotiation plans for NAFTA

May 19, 2017

WASHINGTON — U.S. Trade Representative (USTR) Robert Lighthizer, who was sworn in Monday, yesterday notified Congress that President Trump intends to renegotiate the North American Free Trade Agreement (NAFTA). Through these negotiations, he says the United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities to trade with Canada and Mexico.

In the letter to Congress, Lighthizer outlines the administration’s commitment to concluding the negotiations with timely and substantive results for U.S. consumers, businesses, farmers, ranchers and workers. He says these goals will be pursued consistent with U.S. priorities and the negotiating objectives established by Congress in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA). Negotiations will begin no earlier than Aug. 16, 2017.

“Today, President Trump fulfilled one of his key promises to the America people,” Lighthizer says. “For years, politicians have called for the renegotiation of this agreement, but President Trump is the first to follow through with that promise. USTR will now continue consultations with Congress and American stakeholders to create an agreement that advances the interests of America’s workers, farmers, ranchers and businesses.”

USTR will publish a notice in the Federal Register requesting public input on the direction, focus and content of the NAFTA negotiations.

Trump announced Feb. 2 the United States’ intention to engage in negotiations related to NAFTA. Since then, USTR has begun consultations with committees of jurisdiction in Congress and advisory committees, as outlined by TPA.

The International Dairy Foods Association (IDFA), the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) commended Lighthizer for taking swift action under the TPA to begin the process for modernizing NAFTA. The groups repeatedly have urged administration officials and legislators to focus on maintaining what has worked well, such as dairy trade with Mexico, while calling for improved market access to Canada.

“Without this trade agreement and the market access it provides, the United States would stand to lose nearly $2 billion annually in dairy exports and tens of thousands of farming and manufacturing jobs in communities across the country,” says Michael Dykes, president and CEO, IDFA. “The issues of geographical indications, intellectual property rights and ways to resolve sanitary and phytosanitary measures (SPS) are also of keen interest to the dairy industry.”

Jim Mulhern, president and CEO, NMPF, says changes to Canada’s new pricing policies would be central to any successful NAFTA negotiations.

“We agree with Ambassador Lighthizer that the current NAFTA agreement has areas upon which we can build as the renegotiation process begins, including the market we have developed in Mexico,” Mulhern says. “Obviously, dairy trade with Canada — where we continue to face 200 percent to 300-percent tariffs and a slew of nontariff policies that distort dairy trade — is an entirely different story, and we need to address it as part of these talks.”

Tom Vilsack, president and CEO of USDEC, also urges the administration to address trade issues with Canada while keeping a positive relationship with Mexico.

“Mexico is our only $1 billion dairy market; finding a replacement for sales that are so critical to supporting tens of thousands of jobs across the country is no small task, so preserving it is essential,” Vilsack says.

U.S. senators also this week have urged Lighthizer to consider the positive impact NAFTA has had for U.S. agriculture as well as to continue engagement with Canada regarding its dairy pricing policy.

On Monday, U.S. Sens. Jeff Flake, R-Ariz., and Deb Fischer, R-Neb., led a letter from 18 republican senators to Lighthizer stressing the positive economic impact of NAFTA.

“Given that the agreement is more than two decades old, there are areas in which NAFTA will benefit from strengthening and modernization,” the senators say in the letter. “On the other hand, efforts to abandon the agreement or impose unnecessary restrictions on trade with our North American partners will have devastating economic consequences.”

On Tuesday, U.S. Senate Committee on Agriculture, Nutrition and Forestry Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich., sent a letter to Lighthizer and USDA Secretary Sonny Perdue requesting continued engagement with the Canadian government regarding Canada’s implementation of dairy pricing changes as part of its new national ingredients strategy.

“These changes have already caused the immediate displacement of U.S. exports of ultrafiltered milk to Canada,” they say, asking that Lighthizer and Perdue continue to engage with the Canadian government to learn more about the new pricing program and evaluate all tools available to help U.S. dairy producers compete with Canada on a level playing field. “As the U.S. considers a renegotiation of NAFTA it is imperative that America’s hard working farmers and ranchers remain a top priority.”

CMN


Finlandia offers best-of-class cheese, new products for U.S. consumers

By Kate Sander

PARSIPPANY, N.J. — New products are abounding for Finlandia Cheese Inc., the U.S. business of Finland-based Valio Ltd.
Emma Aer, CEO, Finlandia, says the company’s aim is to collaborate with customers, distributors and brokers to understand their needs and those of consumers to provide innovative solutions.

“We take pride in understanding what consumers want and look at flavor profiles to make products that fit their needs,” Aer says. “We set the bar high by conducting blind taste tests for new products which the products must pass.”

In addition to innovative new products, evidence of that high bar recently was seen at this spring’s U.S. Championship Cheese Contest in which Swiss cheese made by Ohio-based Guggisberg Inc., using Finlandia’s proprietary recipe, was the first-place winner in the Swiss-style class.

“Here at Finlandia, we take great pride in our all-natural recipe and in the high quality ingredients that we use to make our delicious Finlandia Swiss cheese,” Aer says. “It is an honor to have been recognized by the United States Championship Cheese Contest, alongside our valued partner, Guggisberg Cheese, for a premium product that we are truly proud of.”

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Cabinet, policy continue to
take shape in White House

May 12, 2017

WASHINGTON — Dairy stakeholders continue to stay vigilant on domestic and global issues impacting the agriculture sector as President Trump continues to form his Cabinet and administrative policies.

Dairy leaders this week praised the confirmation of Scott Gottlieb as FDA commissioner.

Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), notes there are a number of issues under FDA purview that impact members, and the organization believes the issues will be efficiently and effectively addressed under Gottlieb’s leadership.

Dykes says Gottlieb’s experience as a physician, resident fellow at the American Enterprise Institute and former federal regulator positions him to bring a multifaceted perspective to leading the federal agency responsible for regulating the food and beverage industry.

“We welcome Dr. Gottlieb’s understanding of the value of engaging all stakeholders to achieve our shared goal of a safe, nutritious and abundant food supply,” Dykes says. “We appreciate the agency’s commitment to science- and risk-based food safety policies, especially as it continues to implement the Food Safety Modernization Act regulations.”

Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), says the organization will engage with FDA’s new leadership on ways to strengthen the safety of the food supply, promote the judicious use of antimicrobials in livestock and ensure the clear, consistent labeling of foods regulated by FDA.

“We share Commissioner Gottlieb’s goal of remedying the bureaucratic inertia that has hindered FDA’s work on several issues,” Mulhern says. “This should include the proper labeling of foods that are disregarding FDA’s standards of identity. For too long, FDA has not responded to dairy imitators’ obvious violation of FDA’s clear definition that milk, cheese, ice cream and yogurt must be made from real dairy sources.” (For more on this issue, see “NMPF urges dairy product imitators to comply with federal food labeling standards” in last week’s issue.)

Meanwhile, newly-confirmed Agriculture Secretary Sonny Perdue is taking a stand on school nutrition and environmental policy. Perdue last week signed a proclamation directing USDA to begin to change current regulations so schools will be able to serve lowfat flavored milk in future school years without receiving a special exemption, a move praised by dairy stakeholders. (See “Dairy industry applauds plans to expand school milk options” in last week’s issue.)

On the environmental side, according to media reports, Perdue has expressed support for continuing the Renewable Fuel Standard, saying that “ethanol is here to stay” and that the department plans to support new technologies to make it more efficient.

Media reports also say the Trump administration is planning a massive reorganization of USDA and that Perdue plans to announce the creation of an undersecretary for trade, a position that was included in the 2014 Farm Bill.

Under the reorganization, the Foreign Agriculture Service, currently under the agriculture undersecretary for farm and foreign agricultural services, would be supervised by the undersecretary for trade, media reports say.

• Foreign affairs

In other trade-related news, Robert Lighthizer on Thursday was confirmed as the U.S. Trade Representative (USTR). Dairy stakeholders including NMPF and the U.S. Dairy Export Council (USDEC) say they are eager to work with Lighthizer to protect and expand market access for U.S. dairy while addressing problematic Canadian dairy policies.

Lighthizer will begin work on a variety of pressing trade policy issues, including the renegotiation of the North American Free Trade Agreement (NAFTA), expanding market access channels in Asia and preventing the loss of common food names.

“We welcome Mr. Lighthizer’s confirmation because of his grasp of global trade rules and understanding of the importance of balanced trade agreements to the U.S. dairy sector,” Mulhern says. “We will continue to urge USTR to focus on protecting Mexico, our No. 1 market, insist that Canada revoke its detrimental new milk pricing policy and pursue additional export opportunities around the world.”

IDFA’s Dykes adds that Canada has a long history of not honoring its trade agreements regarding U.S. dairy imports.

“We appreciate this administration’s efforts to address these problems and to obtain fair market access for U.S. dairy exports to Canada,” he says. “We welcome the experience and expertise that the ambassador now brings to these important discussions with the Canadian government.”

Dykes adds that IDFA is committed to working with Lighthizer and other Trump administration officials to develop and implement an effective U.S. trade policy that increases exports and allows greater market access for U.S. dairy products.

USDEC notes another significant challenge for Lighthizer is the European Union’s (EU) aggressive stance on the use of geographic indications (GIs), the groups say, noting Lighthizer has said not only must the United States resist using GIs at home, but it also should discourage other countries from agreeing to use them.

“As the Trump administration’s trade policy strategy develops, we want to build upon the U.S. government’s past successes in pushing back against the EU’s global GI agenda,” says Tom Vilsack, president and CEO, USDEC. “We also want to examine opportunities for bilateral trade agreements in key markets like Japan.” Vilsack recently visited Japan on a trade mission.

Meanwhile, as part of a new coalition representing the broad U.S. manufacturing sector, IDFA and 14 other organizations this week urged federal agency leaders to defend American economic interests against a “growing wave of activities” conducted by the United Nations (UN) that they say could harm American workers and jobs.

The groups say new UN policies and initiatives, such as price controls, “have not been developed in a manner transparent to all stakeholders and are not based on good regulatory practice or sound science.”

These initiatives have appeared at conferences, in reports and in regulatory guidances that pressure foreign governments to adopt policies that could harm U.S. manufacturers, the Engaging America’s Global Leadership (EAGL) coalition says. IDFA notes it has been working on related issues over the past year with the World Health Organization.

EAGL addressed its concerns to Secretary of State Rex Tillerson, Perdue, Secretary of Commerce Wilbur Ross, HHS Secretary Tom Price and Acting USTR Stephen Vaughn, as well as Nikki Haley, U.S. ambassador to the UN.

“Many of these policy proposals and recommendations are formulated in ways that exclude or marginalize U.S. government and private sector representatives, calling into question the impartiality and motivations of these initiatives,” the coalition says. “These initiatives directly threaten not only U.S. manufacturing success, but our leadership in these institutions. It is imperative that U.S. interests be vigorously defended at all levels of the various global institutions that the United States supports and engages.”

EAGL is focused on fostering effective U.S. leadership to address the growing number of activities at global institutions such as the UN and the Organization for Economic Cooperation and Development that may have a negative impact on U.S. manufacturing competitiveness and jobs.

• Health care

Ag sector stakeholders also are weighing in with reactions to the Trump administration’s health care policies.

Roger Johnson, president of the National Farmers Union, says the American Health Care Act (AHCA) passed last week by the House would cause millions of Americans to lose their health insurance, lessen protections for those with preexisting conditions and adversely affect family farmers and rural Americans.

“NFU has long advocated for the right to affordable, high quality health care for all Americans. Because AHCA would both hinder access to health insurance for millions of people as well as drastically impair the effectiveness and affordability of rural health care, we are deeply disappointed by (last week’s) House vote to approve the bill. We urge the Senate to reject this legislation,” Johnson says.

“Since failing to pass the original AHCA, House leadership has made the legislation worse by providing even fewer protections for family farmers and rural Americans,” he adds. “NFU’s priority for any bill is that it offers coverage for more people rather than fewer. We look forward to working with members of the Senate to defeat this legislation that would fail millions of people, especially family farmers and rural Americans.”

The American Farm Bureau Federation (AFBF), however, stopping short of endorsing AHCA, says that it supports repeal of the Affordable Care Act and that AHCA would repeal the health insurance tax, end penalties on employers that fail to purchase health insurance for their workers and eliminate penalties for individuals who fail to purchase health insurance.

“Farmers and ranchers believe that health care is primarily the responsibility of individuals. We support repeal of mandates that require individuals to purchase insurance and employers to cover their employees,” says AFBF President Zippy Duvall. “Instead, we support a system that incentivizes people to plan for their health care needs and provides for those who are unable to pay for health care themselves.”

CMN


CDC: More raw milk, cheese
consumption ups illnesses

May 12, 2017

WASHINGTON — Raw milk products are consumed only by a small percentage of U.S. dairy consumers but cause 95 percent of outbreak-related illnesses linked to dairy. Meanwhile, the risk for illness is more than 800 times higher for consumers of unpasteurized milk or cheese than for consumers of pasteurized dairy products, according to a study that will be in the June edition of Emerging Infections Diseases, published by the U.S. Centers for Disease Control and Prevention (CDC).

“The growing popularity of unpasteurized milk in the United States raises public health concerns,” the study’s authors say, adding that the number of states where the sale of raw milk is prohibited decreased to 20 in 2011 from 29 in 2004. “This trend toward increased availability of unpasteurized dairy products raises public health concerns, especially because raw milk consumers include children.”

The study, which examined outbreak-related disease associated with raw milk and cheese consumption in the United States between 2009 and 2014, says unpasteurized dairy products are responsible for almost all of the 761 illnesses and 22 hospitalizations that occur annually in this country because of dairy-related outbreaks cased by shiga toxin-producing E. coli, Salmonella, Listeria monocytogones and Campylobacter. Consumers of raw milk and cheese make up 3.2 and 1.6 percent of the U.S. population, respectively, but compared with consumers of pasteurized dairy products, they are 838.8 times more likely to experience an illness and 45.1 times more likely to be hospitalized, the authors report. (Estimates of the proportion of dairy consumers that consumed raw milk or cheese were derived from CDC’s FoodNet Atlas of Exposure, where most respondents that reported consuming raw milk cheese in the past seven days indicated it was store-bought or homemade raw milk Mexican-style cheese.)

More than 95 percent of these illnesses are salmonellosis and campylobacteriosis, the report says. Illnesses caused by Listeria monocytogenes were found to be more often associated with the consumption of pasteurized cheese, albeit only causing 1 additional outbreak-related illness per year on average.

The study also suggests that illnesses and hospitalizations will rise as consumption of unpasteurized dairy products increases. If such consumption were to double, the study predicts the mean number of outbreak-related illnesses that occur every year would increase by 96 percent.

The authors note that the study focuses on outbreak-related illnesses, which is only a fraction of all dairy-related illnesses in the United States, because there is a lack of information on the characteristics of sporadic illnesses.

The American Cheese Society (ACS) has reported that several of its members have expressed concern that a recent outbreak linked to raw milk cheese from New York’s Vulto Creamery might direct additional FDA attention to raw milk and/or soft-ripened cheeses. However, ACS says recent conversations with FDA have indicated that this is not the case, and they are viewing the incident as isolated and facility-specific. ACS leadership met earlier this week with FDA in Washington, DC, to preview FDA’s Food Safety Plan Builder, slated to go live this summer, and discuss FDA’s guidance for “Control of Listeria monocytogenes in Ready-To-Eat Foods,” which currently is out for public comment.

Meanwhile, the Real Food Consumer Coalition (RFCC), which advocates for direct farm-to-consumer food rights, last month filed a petition with FDA requesting that it allow strong warning labels on raw milk products instead of restricting consumer access. The proposed label would warn consumers to heat their raw milk to home-pasteurize it, reducing the risk of illness from possible contamination.

“At its root, the FDA’s regulations aim exclusively at milk, and not a whole host of other foods, like raw sushi, sashimi, meat, fruit and vegetable products, demanding that milk alone be pasteurized to be sold interstate,” says Jonathan Emord, an attorney representing RFCC. “That discriminatory burden is unjustified when disclosure of full information about self-pasteurization can be put on the label to aid consumers of raw milk. This petition asks the FDA to accept such labeling for raw milk products, as an alternative to its draconian prosecution of Amish farmers and others who for centuries have produced and consumed raw milk products.”

In the 2017 legislative session, a number of state lawmakers have introduced bills that would legalize or expand legal access to raw milk sales directly to consumers. According to the Farm-to-Consumer Legal Defense Fund, bills were introduced in Alaska, Hawaii, Illinois, Iowa, Massachusetts, Montana, New Jersey, Rhode Island and Texas.

Among the more high-profile of these bills was one introduced in Montana that would allow small-herd milk producers to sell raw milk and raw milk products directly to consumers. The Montana House passed the bill in February but failed to pass in the Montana Senate last month.

The International Dairy Foods Association (IDFA) and National Milk Producers Federation (NMPF) opposed the bill, writing a letter in February to Montana lawmakers that highlighted the health risks associated with raw milk consumption.

“It is important to emphasize that no claim of health benefits of consuming raw milk has been substantiated in any of the medical literature,” the groups said in the letter. “The scientific consensus is that raw milk can cause serious illnesses and hospitalizations, as well as result in lifelong negative health complications and death.”

CMN


USDA lowers its 2017 milk production forecast

May 12, 2017

WASHINGTON — Due to slower growth in milk per cow, the forecast for 2017 U.S. milk production was lowered by 400 million pounds to 216.9 billion pounds in USDA’s latest “World Agricultural Supply and Demand Estimates” report released this week. For 2018, USDA is projecting milk production will rise to 222.0 billion pounds.

USDA bumped its forecast for 2017 fat-basis commercial exports to 8.5 billion pounds, up from 8.2 billion pounds in last month’s report. Skim-solid basis exports also are forecast higher to 40.5 billion pounds, up from 39.9 billion pounds in last month’s report. USDA currently forecasts exports on a fat basis will reach 8.7 billion pounds in 2018. Skim-solid basis commercial exports in 2018 are forecast at 41.1 billion pounds.

The forecast for 2017 imports on a fat basis was lowered by 400 million pounds to 5.9 billion pounds, while the forecast for imports on a skim-solid basis was increased by 100 million pounds to 6.5 billion pounds. In 2018, USDA forecasts fat-basis imports at 6.1 billion pounds and skim-solid basis imports at 6.4 billion pounds.

In the latest report, the cheese price forecast for 2017 is unchanged at $1.600-$1.650 per pound and dry whey is unchanged at $0.490-$0.520. The butter forecast is lowered slightly to $2.115-$2.195, down from $2.120-$2.200 in last month month’s report, while the nonfat dry milk (NDM) price forecast is bumped up by a penny to $0.875-$0.915.

In its first 2018 projections, the report forecasts cheese will average in the $1.640-$1.740 range next year. Butter is forecast to average in the $2.045-$2.175 range in 2018. NDM is forecast at $0.915-$0.985, while dry whey is forecast at $0.475-$0.505.

The 2017 Class III price forecast is unchanged from the previous month at $16.10-$16.60 per hundredweight, while the Class IV price forecast is raised 5 cents to $14.35-$14.95. The 2017 all-milk price forecast is $17.35-$17.85.

In 2018, USDA forecasts the Class III price in the $16.40-$17.40 range, and the Class IV price in the $14.40-$15.50 range. The 2018 all-milk price is forecast to average in the $17.55-$18.55 range.

CMN


Michigan dairy farmer: Changes to MPP needed

May 12, 2017

WASHINGTON — A Michigan dairy farmer told a Senate farm bill hearing last week that dairy farmers across the nation need federal lawmakers to revise the safety net created in the 2014 Farm Bill to provide them adequate risk management protection.

Darrin Siemen of Harbor Beach, Michigan, at a Senate Agriculture Committee field hearing held last week in Frankenmuth, Michigan, said the Margin Protection Program for Dairy (MPP) created in the 2014 Farm Bill “has failed to deliver the protection farmers need and expect.

“While MPP remains the right model for the future of our industry, changes are needed if Congress wants to prevent dairy farmers like me from going out of business,” he says.

Siemen is a fourth-generation family farmer and owner of Prime Land Farm in Harbor Beach, Michigan. He testified on behalf of the Michigan Milk Producers Association (MMPA) as well as the National Milk Producers Federation (NMPF), of which MMPA is a member.

“Just as we did during our recent hearing in Kansas, it is important for us to get out of Washington to hear directly from folks about the farm bill where it matters most: on our farms, ranches, businesses and communities across the country,” says Pat Roberts, R-Kan., chair of the Senate Ag Committee.

Roberts and Sen. Debbie Stabenow, D-Mich., ag committee ranking member, heard from two panels of witnesses affected by various titles of the farm bill.

“All of agriculture is struggling, not just one or two commodities,” Roberts says. “During the last farm bill debate, the agriculture sector enjoyed high prices. Now, we face multiple years of low prices across the board.”

In his testimony, Siemen notes that MPP is designed to help farmers insure against either low milk prices or high feed costs, but the way the program calculates the relative value of feeds such as corn, soybean meal and hay was “significantly changed” as it was written into law, he says. The change “fundamentally altered the safety net designed by NMPF and other dairy leaders around the country,” he adds.

“Unfortunately, as a direct result of these changes, the MPP safety net has failed to deliver the protection farmers need and expect,” Siemen says.

He notes that in the first two years of the program, 2015 and 2016, farmers have paid $90 million in fees and premiums to USDA while receiving only $14 million in insurance payments, even though margins have been tight during much of that period.

Siemen says this has led to a drastic reduction in the number of farmers paying premiums for higher levels of margin protection, and most now are paying only the minimum annual $100 administrative fee, for which they receive only a low level of insurance coverage.

“I am not asking for a program that guarantees a profit, nor do I want a program that will incentivize excess production,” Siemen says. “However, when Congress made changes to the program, rendering it ineffective, dairy farmers like me lost faith in the idea that MPP could serve as a viable risk management tool under its current formulation. If Congress makes changes to ensure that MPP more accurately reflects the actual costs of production for businesses like mine, participation in the program will increase.”

Siemen notes that in addition to adjusting the feed cost formula and the data sources for the prices of feed and milk, Congress should reassess MPP’s premium rate structure and consider expanding access to the Livestock Gross Margin program, a separate risk management tool offered by USDA.

He says the combination of suggested changes will require the committee to make significant and necessary improvements to the program so that it functions as intended and that producers participate.

“A safety net is not a safety net if no one participates,” Siemen says.

In addition, Siemen notes dairy farmers also are facing other policy challenges, including immigration and labor shortages, tax reform, child nutrition and environmental sustainability.

“The issue of farm labor is important to all dairy farmers, regardless of farm size,” he says. “Dairy farmers try in vain to find interest by American workers, but there has been decreasing interest in careers on a farm. Dairy farmers, like others in agriculture, have had to look to qualified foreign-born workers to meet our labor needs.”

He says NMPF and MMPA continue to urge Congress to act immediately to reform the nation’s immigration system in a manner that addresses agriculture’s needs for a legal and stable workforce.

CMN


Dairy industry applauds plans
to expand school milk options

May 5, 2017

WASHINGTON — Dairy stakeholders this week praised newly-confirmed Agriculture Secretary Sonny Perdue for recognizing the important role school milk plays in ensuring school-aged children get the nutrition they need.

In one of his first actions as ag secretary, Perdue visited Catoctin Elementary School in Leesburg, Virginia, to announce that USDA will implement regulations to allow school districts to again offer lowfat (1 percent) flavored milk as part of the National School Lunch and Breakfast programs. The change was announced via a proclamation signed Monday by Perdue which directs USDA to begin to change current regulations so schools will be able to serve lowfat flavored milk in future school years without receiving a special exemption. (For more on exemptions, see related article on page 14 of this issue.)

Under the Obama administration, USDA eliminated lowfat flavored milk as an option in school meal and a la carte programs. Since then, consumption of school milk has declined as has overall participation in school lunch programs, stakeholders say.

“In just the first two years after lowfat flavored milk was removed from the program, 1.1 million fewer school students drank milk with their lunch,” says Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). “Secretary Perdue’s action today recognizes that a variety of milks and other healthy dairy foods are integral to child nutrition programs in schools.”

In making the announcement in Virginia, Perdue was joined by Senate Ag Committee Chair Pat Roberts, R-Kan.

“This announcement is the result of years of feedback from students, schools and foodservice experts about the challenges they are facing in meeting the final regulations for school meals,” Perdue says. “If kids aren’t eating the food and it’s ending up in the trash, they aren’t getting any nutrition, thus undermining the intent of the program.”

In addition to the school milk flexibilities under the new regulations, USDA says it also is loosening requirements on whole grains, and schools that meet current sodium requirements for the next three school years will be considered to be compliant with USDA sodium requirements.

“Today Secretary Perdue took an important step toward bringing back lunchroom favorites — lowfat chocolate and strawberry milk — that students have been missing,” says J. David Carlin, senior vice president of legislative affairs and economic policy for the International Dairy Foods Association (IDFA). “When kids don’t drink milk, it’s extremely difficult for them to get the proper amounts of calcium, potassium, vitamin D and other nutrients that dairy foods supply.”

IDFA and NMPF say USDA plans to publish an interim rule to cover the regulatory changes needed to allow lowfat flavored milk in schools, but it is unclear when the change will be implemented. It likely would not be finalized until at least the 2018-2019 school year.

“This is a major victory for both school children and dairy farmers,” says David Cooper, general manager of FarmFirst Dairy Cooperative, Madison, Wisconsin.

“Developing healthy habits begins at a young age, and for many students, that nutrition comes from the lunch they receive at school,” Cooper says. “By restoring more milk options in schools, we are restoring children’s interest back in a nutritional powerhouse that is dairy. Our efforts advocating for this valuable policy — both for growing children and dairy farmers — has paid off.”

However, Nancy Brown, CEO of the American Heart Association, says USDA’s announcement is a rollback masquerading as flexibility.

Brown says in the last five years, nearly 100 percent of the nation’s schools have complied with updated school meal standards, and kids have benefitted from the changes.

“If these standards are left in place, they have the potential to decrease childhood obesity cases by more than 2 million by 2025,” Brown says. “We don’t understand why the USDA and some members of Congress want to fix something that clearly is not broken.”

Brown says serving 1-percent flavored milk loads extra calories and sugar back into school meals.

Margo G. Wootan, nutrition policy director at the Center for Science in the Public Interest, also voiced concern with USDA’s announcement.

“Policies that encourage healthy eating should enjoy bipartisan consensus,” Wootan says. “Unfortunately, special interests are prevailing on the Trump administration to delay or undo many of the important nutrition advances of the last decade.”

CMN


Trump’s trade orders establish
policy office, address abuses

May 5, 2017

WASHINGTON — President Trump Saturday signed two executive orders on trade: one establishing an Office of Trade and Manufacturing Policy (OTMP), and another addressing trade agreement violations and abuses.

Trump has chosen Peter Navarro, director of the White House’s National Trade Council, as director of the new OTMP. According to the executive order, the mission of the OTMP is to “defend and serve American workers and domestic manufacturers while advising the president on policies to increase economic growth, decrease the trade deficit, and strengthen the United States manufacturing and defense industrial bases.”

The OTMP will serve as a liaison between the White House and the Department of Commerce, undertaking trade-related special projects, and help improve the performance of the president’s “Buy American and Hire American” policy.

In another executive order signed Saturday, the president has directed the OTMP director to consult with the U.S. Trade Representative (USTR), secretary of state, secretary of the treasury and attorney general to conduct comprehensive performance reviews of all U.S. trade and investment agreements, as well as all trade relations with countries governed by the World Trade Organization with which the United States does not have free trade agreements and runs significant trade deficits in goods.

The performance reviews, which are to be submitted within 180 days of the executive order, will identify violations or abuses in any U.S. trade agreement that are harming U.S. workers, manufacturers, farmers or ranchers, harming intellectual property rights, or impairing U.S. innovation, research and development.

The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) organized a fly-in rally Tuesday and Wednesday where more than 40 farmers and dairy company executives met on Capitol Hill to discuss the importance of trade across North America and urge Congress and Trump administration officials to hold Canada accountable for trade violations. In addition to speaking to elected officials, the members of the dairy coalition also met with USDA Secretary Sonny Perdue, Acting USTR Stephen Vaughn and White House agriculture advisor Ray Starling. Dairy representatives also attended meetings with various members of the House and Senate. In addition to NMPF and USDEC, executives from the International Dairy Foods Association (IDFA) and National Association of State Departments of Agriculture participated in the meetings.

“Canada’s new Class 7 milk pricing scheme unfairly undercuts U.S. dairy exports to Canada and around the world. This is an economic dagger pointed at every farmer in the United States, not just those from a few states,” says Jim Mulhern, president and CEO, NMPF. “We also were clear that the income of thousands of dairy farmers depends on the valuable partnership that we have with Mexico, our largest export market.”

Madison, Wisconsin-based FarmFirst Dairy Cooperative, which represents farms in Wisconsin, Minnesota, South Dakota, Michigan, Iowa, Illinois and Indiana, was among those speaking at this week’s trade policy rally.

“Canada has changed its pricing program to not only incentivize Canadian processors to stop purchasing U.S. dairy exports, such as ultrafiltered milk from Grassland here in Wisconsin, but also has begun to export significant quantities of skim milk powder on the global market at below-cost prices,” says David Cooper, general manager, FarmFirst Dairy Cooperative.

Cooper also shared praise for Mexico as the United States’ key dairy export destination.

“Mexico has been a key trade partner for U.S. dairy products, purchasing $1.2 billion from the U.S. in the last year. Its importance cannot be overstated,” Cooper says. “We must maintain a good trade relationship with Mexico so that they do not seek to reject US. supplies for those from other regions, such as the EU.”

Last week, 138 food and agriculture trade associations and companies, as part of the U.S. Food and Agriculture Dialogue for Trade, urged the U.S. Senate to vote quickly to confirm Robert Lighthizer as USTR. In their letter, the groups say action on Lighthizer’s confirmation is “particularly urgent” given the administration’s plans to notify Congress soon of its intent to renegotiate NAFTA.

The groups note that confirmation of the USTR is an “essential step” in enabling the U.S. government to put its teams in place to engage in trade negotiations on NAFTA and with Asia-Pacific nations and emphasize that delays in scheduling a confirmation vote could imperil national trade interests.

“IDFA believes it’s important to confirm Mr. Lighthizer as USTR immediately to enable the United States to reengage on NAFTA and other trade agreements that will benefit consumers and the U.S. dairy industry,” says Beth Hughes, director of international affairs, IDFA, which is a member of the Dialogue for Trade.

CMN


U.S. cheese production grows 3 percent in March

May 5, 2017

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 1.06 billion pounds in March, 3.3 percent above March 2016, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart on page 15.)

March U.S. cheese production was up 12.7 percent from February’s 942.4 million pounds. When adjusting for the length of the months, March cheese production was 1.8 percent higher on an average daily basis.

Total Italian-type cheese production reached 468.5 million pounds in March, up 2.2 percent from March 2016. Production of Mozzarella, the most-produced Italian-type cheese, rose 0.9 percent in the March-to-March comparison to 361.2 million pounds.

Total American-type cheese production was 415.5 million pounds in March, up 3.5 percent from March 2016. Production of Cheddar, the largest component of American-type production, climbed 8.0 percent from a year earlier to 309.3 million pounds.

Wisconsin led the nation’s cheese production with 288.4 million pounds in March, up 5.6 percent from its production a year earlier. California followed with 216.5 million pounds, a 0.7-percent increase over its production in March 2016.

Idaho was next with 83.2 million pounds of cheese in March, a 0.3-percent increase versus a year earlier, followed by New York with 69.0 million pounds, up 1.9 percent, and New Mexico with 66.7 million pounds, down 3.8 percent.

U.S. butter production totaled 175.5 million pounds in March, up 0.3 percent from March 2016. March butter production was 9.0 percent above February’s 161.1 million pounds but on an average daily basis was down 1.6 percent.

California led the nation’s butter production with 50.7 million pounds, down 8.6 percent from its production a year earlier.

CMN


Dairy organizations commend
USTR report on IP rights

May 5, 2017

WASHINGTON — The U.S. Trade Representative’s office (USTR) last Friday released the 2017 “Special 301” report that reviews global developments on trade and intellectual property (IP), identifying trading partners with harmful records on protection, enforcement or market access.

Among the issues outlined in the report are abuses of geographical indications (GIs), particularly by the European Union (EU). The report highlights ongoing threats to U.S. companies that legally use common food names both within the United States and in global trade. It outlines extensive efforts that the Trump administration is making in numerous countries to stem the EU’s efforts to use GIs to erect barriers to U.S. exports.

The U.S. Dairy Export Council (USDEC), International Dairy Foods Association (IDFA), National Milk Producers Federation (NMPF) and Consortium for Common Food Names (CCFN) have praised the report for sending a strong, positive signal on how the new administration plans to tackle these types of trade and intellectual property issues to preserve jobs and safeguard global opportunities for U.S. companies.

“Many countries protect legitimate GIs, including the United States,” says Jaime Casteneda, executive director, CCFN. “When properly targeted to protect unique regional products, GIs can be a useful intellectual property tool for some producers. But the EU’s approach is far from properly targeted. Rather, it is a system designed to steal commonly used names from those who build markets for those products and monopolize use of those terms in foreign and domestic markets.”

As a trade policy strategy is developed this year, USDEC says it urges the administration to build further upon the U.S. government’s past successes in pushing back against EU’s global GI agenda.

“We appreciate the many positive actions of USTR on this important issue,” says Tom Vilsack, USDEC president and CEO and former USDA secretary. “This work should continue to include both bilateral engagement with our trading partners and incorporation into any trade agreement discussions.”

Jim Mulhern, president and CEO, NMPF, also says GIs need to be addressed in trade discussions to protect the U.S. cheese industry.

“We look forward to working with the administration and with governments of other nations on proper regulation of GIs to avoid harmful losses of U.S. cheese sales opportunities,” Mulhern says. “We cannot allow our trading partners to chip away at the value of prior World Trade Organization or free trade agreement concessions through unjustified restrictions on common terms.”

Countries that are signing bilateral trade agreements with the EU have been granting the EU protection for several generic cheese names that are used in the United States, and those agreements hurt U.S. cheese companies as well as the dairy farmers that supply their milk, says Michael Dykes, president and CEO, IDFA.

“Names like feta and parmesan belong to everyone, not just a small group of producers in Europe,” Dykes says. “The EU’s bid to gain exclusive rights to these names is totally unjustified. We’re pleased to see the administration take on the important issue of GIs, and we look forward to continuing to work with the USTR on the issue.”

The groups add the abuse of GIs could impact a variety of sectors. Earlier this year, the U.S. dairy organizations, CCFN and wine and grocery industry groups all filed comments to USTR expressing concern about the growing threat to U.S. manufacturers of foods with common food names. Specific requests to USTR included: hold trading partners accountable for their commitments, preserve market access negotiated through earlier trade agreements and prevent competitors from monopolizing widely-used generic terms like feta and prosciutto.

CMN


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Today's Cheese Spot Trading
May 24, 2017


Barrels: $1.4625 (-1)
Blocks: $1.6650 (+2)


Click here for more market activity
Cheese Production
U.S. Total March
1.06 bil. lbs.


Milk Production
U.S. Total March
18.710 bil. lbs.

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New product development — A recipe for success

Edward Zimmerman, The Food Connector

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