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China considers tariff exemption, U.S. takes new actions on trade

Feb. 21, 2020

WASHINGTON — China’s Tariff Commission of the State Council this week announced it will allow importers to apply for tariff exemptions on certain products from the United States and Canada, including some U.S. dairy imports.

Starting March 2, the commission says it will accept and begin reviewing applications to waive tariffs from a list of nearly 700 products imported from the United States that had countertariffs imposed in response to U.S. Section 301 tariffs. Dairy products included on the list include: milk and cream, solid content less than or equal to 1.5%; whey and modified whey; anhydrous lactose, lactose content greater than or equal to 99% by weight; retail packaged formula for infants and young children; other retail packaged foods for infants and young children; and whey albumin, including two or more whey protein concentrates.

The South China Morning Post reports that other product lines range from soybeans, pork and beef to liquefied natural gas and crude oil. The list also includes dozens of types of medical equipment that could help contain the coronavirus outbreak in China. The tariff exemptions would be effective for one year, subject to approval.

Meanwhile, the Office of the U.S. Trade Representative (USTR) has announced the formation of a new Bilateral Evaluation and Dispute Resolution Office as part of the phase one trade agreement signed Jan. 15 by the United States and China. The phase one agreement entered into effect Feb. 14, 2020.

This newly created office will monitor China’s implementation of its commitments under the agreement and will be responsible for working with China’s corresponding Bilateral Evaluation and Dispute Resolution Office to address disputes that arise over implementation matters.

U.S. Ambassador Jeffrey Gerrish will serve as the “designated deputy USTR” heading the new Bilateral Evaluation and Dispute Resolution Office. Interested parties may raise concerns about implementation matters under the phase one agreement by calling 202-395-3900.

USTR also recently revised the World Trade Organization (WTO) award of $7.5 billion in countermeasure tariffs against the European Union (EU) in the Airbus case, which was implemented Oct. 18, 2019. USTR issued a notice in the Federal Register that the United States is increasing the additional duty rate imposed on aircraft imported from the EU to 15% from 10%, effective March 18, and making certain other minor modifications.

According to the Cheese Importers Association of America (the CIAA), all other goods on the list, including cheese, will continue to be subject to an additional 25% duty, with no increase.

“USTR did not add or remove any cheeses to this tariff action, and all cheeses previously subject to the previous list action from certain countries continue to be subject to the additional Section 301 duties,” the CIAA says. “It is also important to note that while the United Kingdom is officially no longer a part of the EU, certain goods imported from the United Kingdom are still subject to this tariff action.”

Additionally, USTR last week issued a report on the Appellate Body of the WTO. USTR says this is the first comprehensive study of the Appellate Body’s record and it provides an in-depth assessment of the Appellate Body’s failure to comply with WTO rules and interpret WTO agreements as written.

The Trump administration has been critical of the WTO dispute settlement process and since December has blocked reappointments of judges to the Appellate Body, weakening its power to rule on WTO decisions. (See “Global leaders seek reform on WTO issues” in the Jan. 31, 2020, issue of Cheese Market News.)

USTR’s report says the Appellate Body has strayed from the limited role that WTO members assigned to it, increasing its own power at the expense of the authority of the United States and other WTO members. USTR says the Appellate Body has failed to follow basic WTO rules, and the report gives examples of how USTR claims the Appellate Body has altered WTO members’ rights and obligations through alleged erroneous interpretations of WTO agreements. USTR says these actions have harmed the United States and its citizens, workers and businesses and have undermined the effectiveness of the WTO dispute settlement system.

To read the full report, visit https://ustr.gov/sites/default/files/Report_on_the_Appellate_Body_of_the_World_Trade_Organization.pdf. CMN

CMN


Big cheese, efficient farms support dairy in New Mexico

Feb. 21, 2020

Editor’s note: In our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest state — New Mexico.

By Rena Archwamety

MADISON, Wis. — New Mexico, with its arid climate and ample cheese processing, supports a strong dairy industry that ranks in the top 10 for both milk output and cheese production in the United States. The state has 135 permitted dairy farms and 14 permitted dairy processing facilities, including major plants owned by Glanbia, Leprino Foods, Saputo and Dairy Farmers of America (DFA).

“We’re No. 9 in milk production, No. 5 in cheese production, and also No. 1 in efficiency, meaning the lowest carbon footprint as we recycle nutrients and water several times over,” says Beverly Idsigna, executive director, Dairy Producers of New Mexico (DPNM).

While cows do well in New Mexico’s dry heat, water availability is a constant issue, and dairy farms have adopted conservation practices out of necessity. Idsigna says DPNM has worked with the state government to establish the Dairy Rule, legislation passed five years ago that helps dairy farms anticipate what to expect when it comes to groundwater regulations.

“Right now, we probably have the most stringent regulations in the country for groundwater,” Idsigna says. “Our producers are some of the most innovative and resilient. Through the farm labor crises and low milk prices, they learn to adapt and keep going. We’re recycling all our water and putting nutrients back on the fields. They’re doing a good job keeping viable and producing some of the most nutrient-rich dairy products in the world.”

• Big dairies, big cheese

New Mexico’s cow-friendly climate allows for large, efficient dairy farms that over the years have consolidated and continued to expand in cow numbers. Robert Hagevoort, extension dairy specialist and professor at New Mexico State University (NMSU), estimates the state’s average herd size is around 2,500, with the smaller herds still reaching 1,000-1,500 head.

“A lot of large dairies came into New Mexico in the ’90s and early 2000s, most of those coming in from places like California,” Hagevoort says. “The last couple of years of financial difficulty, I don’t think we’ve lost lots of dairies, or at least any cows. We do see consolidation, the same number of cows owned by fewer people. ... We continue to produce more milk. Producers are becoming better at what they do.”

The stability in dairy production is supported by several major processors in the area. In Clovis, New Mexico, Southwest Cheese, a joint venture between Glanbia, DFA and Select Milk, is the world’s largest cheese factory under one roof. Leprino Foods owns a large Mozzarella plant in Roswell, New Mexico, and a major Hilmar Cheese plant is located just across the eastern New Mexico border in Dalhart, Texas. F&A Cheese, owned by Saputo, is in Las Cruces, New Mexico, and Tucumcari Mountain Cheese, a Feta and specialty cheese processor, has been expanding in Tucumcari, New Mexico.

“The milk here is primarily produced for cheese,” Hagevoort says. “There are some fluid contracts in bigger cities around here like Dallas, Houston and San Antonio, but the majority of milk will be for cheese.”

Finding adequate labor on New Mexico’s dairy farms can be a challenge. NMSU has developed audio and video training materials in English, Spanish and K’iche’ to help dairies provide safety and animal training. NMSU also offers a minor in dairy and a summer program that allows students from across the country to experience working with local large-scale dairy operations.

Idsigna notes that the dairy industry is one of the largest private employers in New Mexico, providing both direct and indirect employment. In addition to local and state issues, DPNM advocates on behalf of the state’s dairy industry in support of national legislation like the Farm Workforce Modernization Act and applauded the passage of the U.S.-Mexico-Canada Agreement (USMCA), as much of the dairy processed in New Mexico is exported across its southern border.

• Joint success

Southwest Cheese, the joint venture between Glanbia and the milk member Greater Southwest Agency, which includes DFA and Select Milk, opened in 2006 initially processing 7 million pounds of milk a day. Since then, the plant has undergone two significant expansions and now processes more than 14 million pounds a day. Each year Southwest Cheese, which employs around 450 people, produces more than 500 million pounds of block cheese and 35 million pounds of value-added whey protein powders.

“It’s a great business model that allows both parties to do what they do very well. The milk member’s primary role is milk procurement, assuring enough milk for the facility, and Glanbia handles manufacturing, sales and research and development,” says George Chappell, president of Southwest Cheese and vice president of dairy operations, Glanbia Nutritionals.

Before Southwest Cheese opened, Ireland-based Glanbia had three cheese manufacturing facilities in Idaho and was looking to grow its U.S. footprint. Eastern New Mexico was an ideal location due to the available and expanding milk production in the region.

“The combination of a partner that had a growing milk supply, the milkshed in the region and a need for processing in that region, and Glanbia’s desire to grow, fueled the partnership,” Chappell says. “The milk supply has continued to grow and has really fueled our expansion growth. With each expansion, there was additional milk supply and growing demand for our products. It was a natural fit to grow as both of those happened simultaneously.”

Southwest Cheese provides American-style block cheese to businesses that further process it for ready-to-eat retail or foodservice applications, as well as whey protein for ingredient applications and liquid permeate for animal feed. In recent years, the facility has processed more value-added varieties of both cheese and whey. The New Mexico location also allows Southwest Cheese to conveniently supply into the Mexican market, and the company exports about 15% of its products internationally.

“We partner closely with our customers’ needs both in U.S. and international markets,” Chappell says. “We’re constantly looking for ways to grow the business in terms of volume as well as value. In 2019 we commissioned a volume expansion, and now we are looking for value propositions, taking new products up in the value chain.”

As a major employer and representative of the dairy industry, Chappell notes that Southwest Cheese works closely with local communities and state governing bodies, often welcoming and meeting with business representatives and state officials.

“About 5,400 direct jobs are linked to dairy in New Mexico. Roughly $194 million in direct wages are linked to those jobs, and $1.5 billion direct output goes back to the state,” Chappell says. “The plant itself is significant in its own right, but when you look at it as a whole — overall jobs and agriculture supporting those rural communities — we have a strong place in the top three or four job suppliers in that area. We try to make sure we have a good relationship with all key stakeholders.”

CMN

 


Dairy Farmers of America reaches bid agreement with Dean Foods

Feb. 21, 2020

KANSAS CITY, Kansas — Dairy Farmers of America (DFA) and Dean Foods this week announced an asset purchase agreement has been reached where DFA will acquire a substantial portion of Dean’s assets and business.

“As Dean is the largest dairy processor in the country and a significant customer of DFA, it is important to ensure continued secure markets for our members’ milk and minimal disruption to the U.S. dairy industry,” says Rick Smith, president and CEO, DFA. “As a family farmer-owned and governed cooperative, no one has a greater interest in preserving and expanding milk markets than DFA. We are pleased that we have come to an agreement on a deal that we believe is fair for both parties.”

The two parties have been working to reach an agreement since DFA became aware of Dean’s plan to initiate voluntary Chapter 11 reorganization proceedings. (See “Dean Foods files for bankruptcy, in advance talks for sale to DFA, in the Nov. 15, 2019, issue of Cheese Market News.)

As part of the proposed deal, DFA has agreed to pay a base purchase price of $425 million and assume various liabilities, subject to certain adjustments, to acquire 44 of Dean’s fluid and frozen facilities and real estate, inventory, equipment and all other assets necessary to operate such facilities (the “stalking horse assets”).

“We have had a relationship with DFA over the past 20 years, and we are confident in their ability to succeed in the current market and serve our customers with the same commitment to quality and service they have come to expect,” says Eric Beringause, president and CEO, Dean Foods.

While the parties have reached an agreement on the terms of the asset purchase, the transaction remains subject to various approvals, including approval from the bankruptcy court overseeing Dean’s Chapter 11 reorganization and the U.S. Department of Justice.

If approved by the bankruptcy court at a hearing scheduled for March 12, DFA will serve as a “stalking horse bidder” for the stalking horse assets in a court-supervised sales process, where the agreement with DFA will set the floor for the sale of the stalking horse assets. Accordingly, the proposed agreement is subject to higher or otherwise better offers.

The deadline for interested parties to furnish information to be considered a potential bidder for any or all of the stalking horse assets currently is scheduled for March 31 at 3 p.m. Central Time. Bids may be submitted in the form of an asset purchase or plan of reorganization. Dean also is in active discussions with parties interested in the plants and assets that are not included in the stalking horse assets. The deadline to furnish information to be considered a potential bidder for these plants and assets that are not subject to the DFA bid also currently is scheduled for March 31.

For approved potential bidders, the deadline to submit a qualified bid for the stalking horse assets or any of the plants or assets not included in the DFA bid is April 13 at 3 p.m. Central Time. Interested parties should contact John Kimm, 212-849-3436 or email john.kimm@evercore.com. Additional information, including a list of entities included and excluded from the Dean Foods-DFA asset purchase agreement, is available at DeanFoodsRestructuring.com.

If qualified bids are submitted, an auction would be held starting April 20. A hearing to approve the sale is proposed to be held April 27, subject to the availability of the bankruptcy court.

Davis Polk & Wardwell LLP and Norton Rose Fulbright are serving as legal advisors to Dean Foods, Evercore is serving as its investment banker and Alvarez & Marsal is serving as its financial advisor. DFA is advised in this matter by Latham & Watkins LLP, Bryan Cave Leighton Paisner LLP and Houlihan Lokey.

CMN



Baker Cheese expansion brings more variety to String production

ST. CLOUD, Wis. — The owners of Baker Cheese, a family-run business of more than 100 years and a pioneer in String cheese production, credit the company’s success to three main elements: Strong relationships with customers, service that exceeds expectations and high-quality cheese.

“We’ve built our reputation on a traditional Italian-style make, and we’re able to get a very consistent, high-quality piece of String cheese,” says Brian Baker, president, Baker Cheese. “We make award-winning contest quality String cheese every day. Our crew is concerned with high quality standards. That mantra we hang our hat on is ‘every stick matters.’”

The St. Cloud, Wisconsin, company was founded as a Cheddar-making operation by Baker’s great-grandfather, Frank Baker, in 1916. In the 1950s, Frank and his son Francis Baker transitioned their focus to the rapidly-growing demand for Mozzarella. Recognizing a need for smaller, consumer-sized units, Francis took a ball of Mozzarella, stretched it into a rope and cut it into small chunks. In the 1970s, Baker Cheese was among the first in the country to introduce String cheese, which today is its sole product, produced and packaged at the same facility.

“There is a two-fold approach with our production model — we have a full-scale cheese production area and a full-scale cheese packaging area,” Brian Baker says. “They are integrated into the same turnkey approach. Whatever we’re making, we’re packaging at the same rate throughout the operation day.”
This two-fold approach allows Baker Cheese to offer the freshest possible product. In fact, in less than 48 hours from the time milk leaves the company’s farm partners, the String cheese is packaged and ready to enjoy. Baker adds that the company offers short lead times so its customers don’t have to carry a large amount of inventory, optimizing the quality and freshness of each order.

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Trump’s proposed fiscal 2021 budget would reduce ag funds

Feb. 14, 2020

WASHINGTON — President Trump this week released his proposed $4.8 trillion fiscal year 2021 budget, which would reduce both mandatory and discretionary funding for USDA and other federal agencies while boosting spending on infrastructure and defense initiatives.

The budget seeks to tighten federal rules so producers cannot be reimbursed more than 100% for their losses by doubling up on aid programs.

“Building on the agricultural reforms proposed in the 2020 budget, the administration continues proposals to modify and target crop insurance, conservation and commodity programs in a way that maintains a strong safety net, saving $36 billion over 10 years,” budget text says. “The budget also proposes to eliminate wasteful duplication and excessive subsidies between federally subsidized crop insurance and mandatory disaster assistance. This addresses recent congressional changes that removed safeguards and would ensure that taxpayer-funded assistance is limited and that producers do not collect more than 100% for the same loss.”

Sen. Debbie Stabenow, D-Mich., ranking member of the House Agriculture Committee, says the budget proposal neglects agriculture and rural America.

“While farmers are struggling with uncertainty, the president is once again slashing crop insurance and conservation tools that help producers address the climate crisis,” she says. “I will oppose these cuts. Instead, I will work hard to make sure our nation’s budget invests in our farmers, families and rural communities.”

However, U.S. Agriculture Secretary Sonny Perdue says President Trump’s budget continues to rein in an “overgrown federal government with fiscally responsible cuts in spending.”

“USDA is doing its part to improve our customer service while reducing our economic and regulatory impact,” Perdue says. “We will continue to serve and deliver our programs on behalf of America’s farmers, ranchers, producers, foresters and the food insecure with improved customer service and respect for taxpayer dollars.”

Collin Peterson, D-Minn., chair of the House Agriculture Committee, says the budget includes a call for an 8.2% reduction in discretionary spending at USDA when the department’s field operations are significantly understaffed.

“We will make sure that the farm bill isn’t cut during this year’s budget process,” he says. “The past year has brought serious economic damage to farmers and rural communities, yet the administration is proposing to cut billions in programs that they count on in many different ways.”

The budget also proposes cuts to EPA but boosts funding for the Office of the U.S. Trade Representative and proposes an extra $5 million in funds to FDA to address regulation of increasingly popular cannabidiol goods.

National Farmers Union President Roger Johnson says the “hypocritical” budget proposal overlooks the economic difficulties in farming communities.

“As both a presidential candidate and now as president, Donald Trump has repeatedly expressed his appreciation for and dedication to American farmers. Yet year after year, his budget has failed to address the very real economic challenges facing rural communities,” Johnson says, noting farm debt and farm bankruptcies have skyrocketed, crop prices remain low, climate change is disrupting food production and rural economies continue to lag behind their urban counterparts.

“There are a number of programs and agencies that can help farmers and rural residents with these difficulties — including the Conservation Stewardship Program, the Agricultural Research Service and the Supplemental Nutrition Assistance Program — but the Trump administration is looking to cut funding from all of them,” he says.

However, Johnson says at least one of the proposed changes is warranted.

“For many decades, farm programs have disproportionately benefited the largest and wealthiest farms, something that National Farmers Union has long opposed. President Trump’s budget would address this problem by lowering the adjusted gross income eligibility threshold for crop insurance and commodity programs from $900,000 to $500,000. We are pleased that this change would likely direct more support to the farmers who need it most; however, this gesture seems hypocritical following the USDA’s recent doubling of payment limitations for trade assistance payments,” Johnson says.

“We are similarly ambivalent about the proposed expansion of infrastructure spending,” he adds. “Time and time again, this administration has made big promises to improve national infrastructure, particularly in rural areas, but they have yet to deliver on those promises. We hope that this year’s budget indicates that President Trump will finally invest in our roads, bridges, rails, locks and dams, water and waste systems, and rural broadband.”

Sen. Mike Enzi, R-Wyo., chair of the Senate Budget Committee, notes the budget proposal is only a suggestion and Congress must work together to hash out a final spending plan.

“Presidents’ budgets are a reflection of administration priorities, but in the end, they are just a list of suggestions, as the power of the purse rests with Congress,” Enzi says. “Bipartisan consensus will be necessary to bring our debt and deficits under control. I hope to work with my colleagues on both sides of the aisle to put our country on a more sustainable fiscal course.”

CMN


USDA lowers 2020 price forecasts for cheese, butter

Feb. 14, 2020

WASHINGTON — Total U.S. milk production for 2019 is estimated at 218.3 billion pounds, unchanged from last month’s forecast, says USDA in its latest World Agricultural Supply and Demand Estimates report released this week. The 2020 milk production forecast also remained unchanged from last month at 222.0 billion pounds in this month’s report.

The 2020 fat-basis export and import forecasts are unchanged from last month at 9.4 billion pounds and 6.3 billion pounds, respectively. On a skim-solids basis, the 2020 import forecast is unchanged at 5.5 billion pounds while the export forecast is raised by 200 million pounds to 43.6 billion pounds on the strength of international demand for nonfat dry milk (NDM)/skim milk powder, USDA says.

Annual price forecasts for cheese and butter are lowered from the previous month as demand remains relatively weak, USDA says. The 2020 cheese price now is forecast to average $1.790 per pound, down from $1.835 forecast last month, while the 2020 butter price is forecast to average $1.910 per pound, down from $1.960 last month.

The 2020 NDM price forecast is unchanged from last month at $1.255 per pound, while the whey price forecast is raised from last month to $0.345 per pound.

The 2020 Class III price is reduced on the lower cheese price forecast to $16.95 per hundredweight, down from $17.35 forecast last month, while the Class IV price is reduced from $16.90 to $16.70, reflecting a lower butter price, USDA says.

The 2020 all milk price forecast is reduced from $19.25 forecast last month to $18.85 in this month’s report.

CMN

 


Darigold to invest $67 million in Idaho facility for FIT milk

Feb. 14, 2020

SEATTLE — Darigold Inc. will invest $67 million in its Boise, Idaho, facility this year to support growing consumer demand for Darigold FIT milk.

Launched in the Pacific Northwest market last year, FIT has doubled in sales and distribution over the past six months. The product has 75% more protein and 40% less sugar compared to traditional milk, Darigold says.

FIT was developed in response to consumer trends that demand “better for you” products. Using ultrafiltration, FIT is designed to give consumers the taste they want while being lactose-free and high in protein without introducing anything artificial. Darigold recently broadened the FIT product line to include whole milk, as well as offering 2% white and 2% chocolate milk.

“FIT was inspired by our farmer owners’ desire to revitalize fluid milk. They, more than anyone, know Darigold must provide consumers with new and relevant types of milk that preserve the wholesome and nutritious foundation which makes milk great in the first place. The positive consumer response we have received gives us confidence that FIT is bringing consumers back to fluid dairy,” says Duane Naluai, Darigold’s senior vice president who was behind the product.

The investment in Boise will not only expand FIT but also will serve as a platform for re-launching other classic Darigold beverages.

“We will deliver a better package for both our consumers and channel partners,” Naluai says.

The investment includes a major capacity expansion, as well as modern aseptic packaging to produce FIT as a shelf-stable product that can be shipped and stored without refrigeration. This project will generate 15 new positions in Boise and will reduce the company’s environmental footprint as it relates to water use, plastic, corrugated material and overall energy use, Darigold says.

Many of the local farmers who supply the milk and sponsored the development of FIT are based in Washington state. Tony Veiga, chairman of the Dairy Farmers of Washington’s board of directors, says FIT is yet another example of innovation coming from the entrepreneurial spirit of Darigold’s farmers, building on a tradition of constantly striving to provide more nutritious products in more sustainable ways.

The first production run using the shelf-stable packaging is anticipated for fall of 2020, Darigold says.

“It’s an exciting time for dairy, as innovation is inspiring increased demand among consumers,” says Karianne Fallow, CEO of Dairy West, which represents and promotes dairy across Idaho and Utah. “Darigold FIT is a great example of the kind of new thinking that is revitalizing dairy, and we’re proud of the investment Darigold has chosen to make.”

With the FIT expansion, the local farmer owners of Darigold are investing in their own future, the company says, adding that not only are they stepping up to better serve consumers, they also continue to invest in local farming.

CMN


China announces tariff cuts in response to U.S. reduction

Feb. 7, 2020

BEIJING — China will lower tariff rates on $75 billion of U.S. products starting Feb. 14, according to reports from Chinese news sources.

Earlier this year, the United States agreed to lower added tariffs on $120 billion worth of Chinese imports from 15% to 7.5% (See “Tariffs on some imports from China will be lowered Feb. 14” in the Jan. 24, 2020, issue of Cheese Market News). The first phase of a trade agreement between the two countries was signed Jan. 15.

China is reciprocating with similar tariff cut percentages. According to the government-owned China Daily, China’s Customs Tariff Commission of the State Council announced yesterday that for approximately $75 billion in U.S. imports, goods with 10% tariffs since Sept. 1, 2019, will have the rate decreased to 5%, and those with 5% tariffs will be adjusted to 2.5%.

China will continue to work on the exclusion of additional tariffs on U.S. products, China Daily says.

“The previous measures of tariff exclusion, which have been released, remain in effect,” says a statement from the Customs Tariff Commission as reported by China Daily. “China hopes the two sides can follow the agreement, implement relevant content, enhance market confidence, improve the bilateral economic and trade relations, and promote global economic growth.”

The products covered by China’s tariff reductions on U.S. goods cover automotive and agricultural goods, including pork, chicken, beef and soybeans, chemicals, crude oil, whiskey and seafood, according to the South China Morning Post.

This development comes despite speculation that the recent coronavirus outbreak in China might affect its ability to honor its part of the trade deal, China Morning Post says. Earlier this week, Hu Xijin, editor in chief of the Chinese-run Global Times, posted on Twitter about the trade deal and China’s focus on battling coronavirus.

“The U.S. government should be flexible on China-U.S. phase one trade deal as a way to show goodwill to Chinese people working hard to contain the epidemic,” he posted Wednesday. “I believe doing so will not harm President Trump’s image among American public.”

Meanwhile, following this week’s news of record U.S. dairy export values in 2019 (see related story on front page), Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA) says more must be done to end trade wars as the dairy industry works toward a goal of achieving exports equal to 20-25% of overall U.S. milk production.

“Achieving export growth in dairy requires rules based, market-oriented trade deals,” Dykes says. “Deals with Canada, Mexico, Japan and China are just the beginning. Our competitors — like the EU — are snapping up trade agreements around the world. We need to act with urgency. Therefore, IDFA will continue to advocate, on behalf of the dairy industry to the White House, Congress and our trading partners to end retaliatory tariffs, restore our reputation for reliability, and level the playing field for our dairy companies and producers.”

Last week the Cheese Importers Association of America (CIAA) called on its members to urge their representatives to support pending trade legislation related to tariffs the United States has imposed on goods imported from the European Union (EU).

The FAIR TARIFF Act, introduced by Reps. Bill Pascrell, D-N.J., and Jodey Arrington, R-Texas, would refund Section 301 duties related to the Airbus dispute with the EU paid on goods exported on or before Oct. 9 that arrived Oct. 18 or later.

“This legislation would set a congressional precedent that USTR (the U.S. Trade Representative) needs to exclude goods in transit when applying additional tariffs,” the CIAA says.

CMN


December cheese production up slightly from a year earlier

Feb. 7, 2020

WASHINGTON — In December 2019, U.S. cheese output, excluding cottage cheese, totaled 1.114 billion pounds, 0.2% above December 2018’s 1.112 billion pounds, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart.)

December cheese production was 1.3% above November 2019’s 1.101 billion pounds, but when adjusted for the length of the months, December cheese production was down 2% from November on an average daily basis.

Cumulative 2019 cheese production totals 13.121 billion pounds, up 0.7% from 2018’s total, according to USDA’s preliminary data.

Italian-type cheese production in December totaled 470.7 million pounds, 1.7% below December 2018. Production of Mozzarella, the largest component of Italian-type cheese production, was 370.9 million pounds in December 2019, down 1.6% from a year earlier.

American-type cheese production in December totaled 456.7 million pounds, up 1.9% from December 2018. Production of Cheddar, the largest component of American-type cheese production, was 331.6 million pounds, up 1.7% from December 2018.

Wisconsin was the nation’s leading cheese producer with 280.2 million pounds in December, up 0.2% from cheese production a year earlier. California followed with 202.8 million pounds, down 8.3% from December 2018.

U.S. butter production in December totaled 177.2 million pounds, up 4% from a year earlier. December butter production was up 13.9% from November’s 155.5 million pounds, and up 10.3% on an average daily basis.

California led the nation in butter production at 55.5 million pounds in November 2019, up 16.8% from a year earlier. The preliminary 2019 data puts cumulative U.S. butter production at 1.906 billion pounds, up 0.8% from the 2018 total.

U.S. production of nonfat dry milk (NDM) suitable for human consumption totaled 164.3 million pounds in December, up 15.3% from a year earlier. California led in NDM production with 55.7 million pounds in December, up 19% from December 2018. Cumulative NDM production for 2019 is 1.845 billion pounds, according to the preliminary numbers, up 4.1% from 2018.

CMN

 


December U.S. dairy exports up from year-ago value and volume

Feb. 7, 2020

WASHINGTON — U.S. dairy exports in December were valued at $523.3 million, up 22% from December 2018, and January-December U.S. dairy exports were valued at $6.01 billion, topping $6 billion for the first time since 2014 and up 8% from the previous year’s total, according to the U.S. Dairy Export Council (USDEC).

December U.S. export volume of milk powders, cheese, whey products, lactose and butterfat totaled 179,382 metric tons, up 17% from December 2018. Full-year aggregate export volume totaled 2 million metric tons, down 7% from the 2018 volume.

USDEC notes that during December, suppliers moved growing volumes of nonfat dry milk/skim milk powder (NDM/SMP) to Southeast Asia in particular, while exports of NDM/SMP to Egypt were at their highest levels since April 2013. U.S. exports of NDM/SMP in December totaled 69,190 metric tons, up 37% from a year earlier.

U.S. suppliers shipped 700,930 metric tons of NDM/SMP in 2019, down 2% from the record level of 2018. USDEC adds that sales markedly improved starting in September, once European Union intervention stocks were cleared through the supply chain.

In December. U.S. cheese exports totaled 26,143 metric tons, down 9% from a year earlier. December cheese sales to Mexico were the most in 18 months. For 2019, U.S. cheese exports totaled 357,910 metric tons, up 3% from the year before and the most in five years, USDEC reports.

Whey exports in December totaled 40,364 metric tons, up 17% from a year earlier. Whey protein concentrate exports were up 63% and whey protein isolate (WPI) exports up 51% in December. Exports of whey products to New Zealand were the most ever, USDEC says.

Total whey exports in 2019 were 447,950 metric tons, down 18% from 2018. USDEC notes volume to China, the largest market for U.S. whey, dropped in half, accounting for all of the overall decline. Exports of WPI in 2019 reached a record high of 46,947 metric tons, up 11% from 2018.

In December, U.S. dairy exports were equal to 15.2% of production on a total milk solids basis, up from 12.8% a year earlier. Full-year exports in 2019 were equal to 14.5% of production, down from 15.7% in 2018, USDEC says.

CMN


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Today's Cheese Spot Trading
February 21, 2020


Barrels: $1.5900 (+1/2)
Blocks: $1.7675 (-3 1/4)


Click here for more market activity
Cheese Production
U.S. Total Dec.
1.114 bil. lbs.


Milk Production
U.S. Total Jan.
18.785 bil. lbs.

Guest Columnist

Cheese for breakfast? Yes, please!

Tammy Anderson-Wise, Dairy Council of California

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