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Trump: Canada ‘very unfair’ to U.S. farmers in dairy trade

April 21, 2017

By Rena Archwamety

KENOSHA, Wis. — The U.S. government is “going to stand up for our dairy farmers in Wisconsin,” President Donald Trump said Tuesday during a visit to Snap-On Tools in Kenosha, Wisconsin, where he spoke about his “Buy American, Hire American” executive order.

Trump addressed the trade situation with Canada, which the U.S. dairy industry says is undercutting the competitiveness of certain U.S. dairy imports due to a new pricing policy that subsidizes Canadian dairy ingredients. Last week, U.S. dairy industry groups urged President Trump to take action to help restore U.S. dairy exports to Canada, and Wisconsin leaders also appealed to U.S. government agencies to help Wisconsin dairy farms impacted by the loss of sales to Canada. (See “Ag leaders, lawmakers seek help for lost sales to Canada” in last week’s issue of Cheese Market News.)

During his visit to Wisconsin, Trump vowed to work with Gov. Scott Walker, Sen. Ron Johnson, R-Wis., and Speaker of the House Paul Ryan, R-Wis., to come up with a solution to restore free trade with Canada.

“Because in Canada, some very unfair things have happened to our dairy farmers and others, and we’re going to (be) working on that with Ron and with Scott and with Paul, with all of your representatives,” Trump said. “What’s happened to you is very, very unfair. It’s another typical one-sided deal against the United States. And it’s not going to be happening for long.”

The National Milk Producers Federation (NMPF) thanked President Trump for speaking out this week about Canada’s pricing policy and its effort to stifle U.S. competition.

“We have repeatedly stressed that trade must be fair and that all countries should be held accountable when they break the rules. Canada’s repeated disregard for its dairy trade commitments to the United States has left American dairy farmers enduring the severe and unfair consequences,” says Jim Mulhern, president and CEO, NMPF.

“American dairy farmers will continue to work with the Trump administration, Speaker Paul Ryan and other congressional leaders, Wisconsin Gov. Scott Walker, as well as elected officials across the country to resolve this issue as soon as possible,” Mulhern adds.

Also on Tuesday, Canada’s Ambassador to the United States David MacNaughton sent a letter to Gov. Walker and New York Gov. Andrew Cuomo saying the Canadian government is aware of a letter the governors sent last week asking that President Trump address Canada’s dairy policies.

“Canada does not accept the contention that Canada’s dairy policies are the cause of financial loss for dairy farmers in the United States. The facts to not bear this out,” MacNaughton says in the letter, to which he attached a USDA report that he says “clearly indicates that poor results in the U.S. sector are due to U.S. and global overproduction.”

MacNaughton adds that dairy trade between Canada and the United States is important, and the trade balance favors the United States at around five to one.

“Canada upholds our international trade obligations,” he writes. “Under the North American Free Trade Agreement, the U.S. has duty-free and quota-free access for milk protein substances, including diafiltered milk. This duty-free and quota-free access has not changed.”

NMPF responded Wednesday to the ambassador’s comments, calling it “absurd” to assert there is no relationship between Canada’s new Class 7 policy and lost U.S. milk sales.

“The problems this pricing policy are creating for dairy farmers in Wisconsin, New York and Minnesota are real, and they have nothing to do with U.S. ‘overproduction,’ Mulhern says. “U.S. companies had, until recently, supplied Canadian customers during periods of relatively tight supplies and when production increased. The only change has been Canada’s deliberate pricing policy decision — starting last year in Ontario and spreading more recently to other provinces — to create a national ingredients strategy to undercut competition from the United States.”

Yesterday, Wisconsin Agriculture Secretary Ben Brancel announced suggestions on how concerned Wisconsin residents, some of whom have reached out to his office, can help.

Among his suggestions are buying Wisconsin dairy products or donating Wisconsin dairy products to a local food bank to help provide a market for milk produced by Wisconsin dairy families. He also suggests donating to the Great American Milk Drive, which provides vouchers to needy families for the purchase of milk, at

Also this week, Brancel asked dairy processors to think through how they can handle extra milk in the state for the short term and thanked Mullins Cheese in Knowlton, Wisconsin, which recently added eight of the dozens of dairy producers that recently were dropped when Greenwood, Wisconsin’s Grassland Dairy lost ingredient contracts with Canadian buyers.

“Unless the farmers find another market for their milk, these farms will be forced to sell their cows and go out of the dairy business. We are working diligently to avoid this scenario,” says Bill Cosh, communications director, Wisconsin Department of Agriculture, Trade and Consumer Protection. “We continue to meet with farmers, processors, ag lenders and dairy organization leaders to try to come up with a short-term solution before May 1.”

Bill Mullins, co-owner and vice president of Mullins cheese, says the eight producers his company took on were mixed in where the company already has a milk pick-up route. The producers will add 100,000 pounds of milk a day, and the extra 10,000 pounds of cheese a day that the company will produce will be utilized through its network of 50-60 large cheese buyers and foodservice companies throughout the United States.

“We’re running full already, but we can try to squeeze through some more,” Mullins says. “We’re a family operation ourselves, and our heart goes out to these folks. We’re feeling very sad that this is taking place and that we can’t help more.”


Cream cheese, Neufchatel offer culinary applications

April 21, 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: Cream and Neufchatel.

By Stephanie Awe

MADISON, Wis. — Cream cheese, an American original, became popular around 1880, according to the Wisconsin Milk Marketing Board (WMMB). Around this time, dairy facilities underwent a change with the invention of a separator, making it possible to separate the whey from hot solids — a process that allowed cheesemakers to pack the curd hot, and the shelf life for the finished cheese doubled, WMMB says.

Cream cheese came about in 1872 from a dairyman in Chester, New York, according to Kraft’s Philadelphia Cream Cheese, Chicago. In 1880, a New York cheese distributor, A.L. Reynolds, first began distributing this cream cheese wrapped in tin-foil wrappers, calling it Philadelphia Brand.

The name “Philadelphia” was adopted by Reynolds because, at the time, high-quality products originated in or were associated with the city, says Jessica Ryan, director of brand building, Philadelphia.

Typically, when making cream cheese in the United States today, a centrifugal curd separator or ultrafiltration is utilized to separate whey from the curd and obtain the desired fat and moisture contents, according to Rani Govindasamy-Lucey, Ph.D., senior scientist of cheese research, and John Jaeggi, cheese industry and applications coordinator, Wisconsin Center for Dairy Research.

Some smaller, or artisanal, companies, however, separate the cream cheese curd from whey by hanging the curd in muslin bags, allowing the whey to drain. This process can range from about 16 hours to three days, Govindasamy-Lucey and Jaeggi say. Cream cheese usually is made from pasteurized whole or higher-fat cow’s milk, they add.

According to FDA’s Code of Federal Regulations, cream cheese must contain a milkfat minimum of 33 percent by weight of the finished food, and it has a maximum moisture content of 55 percent by weight.

Cream cheese’s lower-fat counterpart, Neufchatel, must contain a milkfat content that is not less than 20 percent but less than 33 percent by weight of the finished food, and the maximum moisture content is 65 percent by weight.

Neufchatel, which originates from the Neufchatel en Bray village of Normandy, France, Govindasamy-Lucey and Jaeggi say, has a lower fat content than cream cheese, meaning its protein and moisture contents are thus higher.

“When you decrease the fat content, the protein and moisture contents go up. Thus, there will be more protein in Neufchatel cheese than cream cheese,” Govindasamy-Lucey says, adding that findings through a study in which she took part found Neufchatel often ranges from about 7.2- to 8.8-percent protein. “Because the fat is lower, Neufchatel sometimes tends to have a grainier mouthfeel.”

• Retail sales

Cream cheese retail volume sales have seen modest gains over the last five years, up 0.4 percent in the latest 52 weeks as of March 19, 2017 (fixed weight only, U.S. multi-outlet and convenience stores), according to Information Resources Inc. (IRI) data courtesy of Dairy Management Inc.
Last year, the lowest average price per pound was $3.76 in December, while the highest average price per pound was $4.52 in August.

Eighty-seven percent of cream cheese volume sold is regular fat, up 1.9 percent from a year ago as of March 19, 2017, according to the IRI data. Light and reduced-fat cream cheese comprised 12 percent of sales, a 5.6-percent decline compared to last year.

• Marketing tactics, product innovations

When it comes to cream cheese, Franklin Foods, Delray Beach, Florida, has noticed a growing trend toward better, easier and wholesome eating, says Rocco Cardinale, vice president of marketing, Franklin Foods.

As a full-line manufacturer, Franklin Foods’ products consist of Cultured Cream Cheese, Cream Cheese, Neufchatel Cheese, Whipped Cream Cheese, Organic Cream Cheese, Greek Cream Cheese and more. The company’s retail brands are Green Mountain Farms and Hahn’s cream cheese. All of Franklin Foods’ products are available nationally and internationally, and the company distributes cream cheese to industry segments including retail private label, foodservice, industrial ingredients, custom applications and export.

With its recent acquisition by Hochland SE, a privately-held Bavaria, Germany-based cheese company, Franklin Foods will have a greater scale to deliver its products both nationally and internationally, says Jon Gutknecht, president and CEO, Franklin Foods.

Franklin Foods will continue to operate independently as a wholly-owned subsidiary of Hochland SE, says Petra Berners, public relations manager, Hochland SE.

“Franklin’s strong manufacturing and sales platform in the U.S. cream cheese market complements Hochland’s international growth strategy,” Berners says.

And with the momentum created from the launch of the Franklin Foods’ Greek Cream Cheese in retail, foodservice and private label markets, the company plans to continue innovating, Gutknecht says.

Overall, there continues to be a great deal of innovation in the category as companies work to meet consumers’ snacking needs.

To address on-the-go consumers who are looking for food solutions that are less processed and can easily fit into their lifestyles, Kraft’s Philadelphia Cream Cheese recently introduced Cheesecake Cups and Bagel Chips & Cream Cheese Dips.

Philadelphia’s Cheesecake Cups provide a rich and creamy cheesecake in a pre-portioned cup. Available at retailers nationwide, the cups are offered in four flavors including Cheesecake with Strawberries, Cheesecake with Milk Chocolate Sauce, Cheesecake with Cherries and Cheesecake with Salted Caramel Sauce, according to the company.

The brand’s new Bagel Chips & Cream Cheese Dip varieties, also available at retailers nationwide, are portable snack cups that include multigrain bagel chips and a choice of Strawberry, Garden Vegetable, Onion & Chive or Brown Sugar & Cinnamon Cream Cheese Dip.

Philadelphia also is introducing a new Garlic & Herb Cream Cheese spread, adding to its portfolio of spreads that includes other flavors such as Original, Smoked Salmon, Pineapple and Spicy Jalapeno.

The new products are supported with a marketing program driving trial and awareness to key consumers, using outlets such as television, in-store promotions and social media. Philadelphia also launched a creative campaign in the United States in January called “It Must Be Philly,” which showcases the ingredients that go into the brand’s products, Ryan says.

The more than 140-year-old brand offers a wide variety of cream cheeses and flavors, all made with real fruits and vegetables that incorporate no artificial preservatives, flavors or dyes, Ryan adds.

At Sierra Nevada Cheese Co., Willows, California, the company offers cream cheese varieties that are made using traditional methods. Its natural, organic and Gina Marie varieties are made with the same recipe that includes cultured milk, cream and salt, says Meghan Rodgers, sales and marketing, Sierra Nevada Cheese.

She adds the milk and cream are cultured overnight and then packed into muslin bags. No gums or stabilizers are added, Rodgers says.

“It’s really what cream cheese should be,” Rodgers says of the company’s traditional make processes, which allow the whey time to drain. These methods deliver a “true old-fashioned flavor,” she says.

Gina Marie, a cream cheese brand that Sierra Nevada Cheese bought from Hilmar Cheese in Hilmar, California, has been around for about 50 years and was named after the original owner’s daughter, Rodgers says. Sierra Nevada Cheese has not changed the packaging in an effort to keep its unique and traditional packaging, she adds.

In addition, the company expects to introduce an old-fashioned Neufchatel this summer. While the company plans to release it first to Whole Foods locations in the Southwest, the product later will become available for other retailers as well. The cheese will be made using the same process as the company’s Gina Marie cheese but will use less cream, Rodgers says.

Schreiber Foods, Green Bay, Wisconsin, offers various cream and Neufchatel varieties in formats such as tubs and cups. It primarily is a customer brand company, providing its cream cheeses to food manufacturers, retail customers and foodservice customers, says Andrew Tobisch, director of communications, Schreiber Foods.
While Schreiber Foods’ marketing efforts are done mostly through its customers, Tobisch notes opportunities for the company’s cream cheese are present in every segment — whether it be retail, foodservice or another outlet — and he has noticed a growing demand from chefs, especially.

“(Cream cheese is) a culinary glue that’s a great flavor carrier,” Tobisch says, adding that it is a versatile cheese and can be an ingredient people feel good about using and consuming.

• Applications

Use of cream cheese on bagels is on the rise, according to Ryan, who notes that the NPD Group, Port Washington, New York, reported that annual eatings per capita of bagels at home also are up slightly over the last three years.

“It’s also exciting to see consumers expanding their usage of cream cheese to new occasions and foods,” Ryan says. “Philly has long been enjoyed as a cool, fresh and creamy addition to a hot bagel — but consumers are increasingly enjoying Philadelphia taste and quality as an ingredient in creamy dips and dishes; in desserts like cheesecake and cream cheese frosting; or on its own as a snack on crackers or veggies.”

Franklin Foods, which has been in business for more than 100 years, follows strict production protocols and time-honored recipes that result in the tang and texture of the company’s cream cheese, says Andy Phillips, vice president of foodservice and industrial sales, Franklin Foods.

“We have proven formulations for performance and functionality that satisfies the most discerning professional chefs and bakers,” Phillips says. “Our products are highly versatile and easy to use for the at-home chef.”

Phillips notes that the company’s cream cheeses, being versatile, work well for use in cheesecakes, frostings, fillings, pastries, sauces and appetizers. There also is growing demand in the Asian and Hispanic markets, Phillips says.

“Asian chefs have long used cream cheese in their crab rangoon recipes,” Phillips says. “As for the Hispanic market, cream cheese is a prominent ingredient featured in many sweet and savory traditional pastries, such as the boleo and the quesito. The cream cheese is typically rolled into the dough and baked. In this case, different fruit fillings may accompany the cream cheese. Variations are common depending upon the region.”

Schreiber Foods’ cream cheeses traditionally are used in cheesecakes, on bagels, as a pastry filling or a frosting base, as well as in soups, dips and sushi, Tobisch says. More recently, it is being used as a flavored spread in dips straight from the cup and on sandwiches or wraps. In addition, he says it is increasingly appearing as fillings for waffles or crepes, in ice cream, on burgers and as white sauce on pizza.

These applications showcase the cheese’s versatility, Tobisch says, noting that Schreiber Foods always is looking for new applications to help fuel growth.


March production climbs 1.8 percent in major states

April 21, 2017

WASHINGTON — Milk production in the 23 major milk-producing states during March totaled 17.52 billion pounds, up 1.8 percent from March 2016, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)

February revised production, at 15.63 billion pounds, was down 1.2 percent from February 2016. However, February 2017 production was 2.3 percent above last year after adjusting for 2016 being a leap year. The February revision represented a decrease of 27 million pounds or 0.2 percent from last month’s preliminary production estimate.

Production per cow in the 23 major states averaged 2,012 pounds in March, 18 pounds above March 2016. This is the highest production per cow for the month of March since the 23 state series began in 2003, NASS says.

The number of milk cows on farms in the 23 major states was 8.71 million head, 72,000 head more than March 2016 and 15,000 head more than February 2017.

For the entire United States, March production totaled 18.71 billion pounds, up 1.7 percent from a year earlier. There were 9.38 million cows on U.S. farms, up 59,000 head from March 2016 and up 15,000 head from a month earlier. Production per cow in the United States averaged 1,995 pounds in March, up 21 pounds from March 2016.

California led the nation’s milk production with 3.50 billion pounds in March, down 2.9 percent from its production a year earlier. There were 1.76 million cows on farms in California in March, down 12,000 head from March 2016 but unchanged from February 2017. Production per cow in California averaged 1,995 pounds in March, down 45 pounds from a year earlier.

Wisconsin produced 2.60 billion pounds of milk in March, up 1.5 percent from its production a year earlier. There were 1.28 million cows in Wisconsin in March, unchanged from a year earlier and also unchanged from the previous month. Production per cow in Wisconsin averaged 2,030 pounds in March, up 30 pounds from March 2016.


Lawsuit alleges Irishgold copies Kerrygold brand

April 21, 2017

MILWAUKEE — A Wisconsin district court has issued a temporary restraining order, requested by the maker of Kerrygold butter, against Sun Prairie, Wisconsin-based Old World Creamery and Eurogold USA, enjoining them from using the “Irishgold” brand to sell an Irish imported butter that last week was introduced at Woodman’s stores throughout Wisconsin.

Steve Knaus, managing partner of Old World Creamery, introduced the company’s new Irishgold butter April 11 at a kick-off event at Woodman’s Market in Sun Prairie. To comply with a Wisconsin law that requires all butter sold in the state to be graded to Wisconsin butter standards, Old World Creamery imported the butter directly from Ireland and then packaged, processed and graded it to Wisconsin standards at its facility in Sheboygan, Wisconsin.

Ornua, an Irish-based company that owns the Kerrygold brand, filed a complaint April 10 against Old World Creamery and Eurogold USA, distributors of Irishgold butter, alleging that the use of the Irishgold mark constitutes trademark infringement. Ornua requested preliminary and permanent injunctive relief, including barring the marketing and sale of Irishgold products, compensation of attorney’s fees and other relief deemed appropriate by the court.

Kerrygold butter has been in the news recently because it is barred from store shelves in Wisconsin due to a law that only allows state- or federally-graded butter to be sold in Wisconsin. In its complaint, Ornua notes that to meet Wisconsin’s requirements, it had been in talks with Knaus to have its butter processed, packaged and graded a second time in his facilities in Wisconsin. Ornua says that despite successful trial runs, Knaus’ company became less responsive earlier this year, and in March Knaus confirmed that Old World Creamery was considering packaging Irish butter for another Irish company, Waterford Butter, at its Sheboygan facility. The talks between Ornua and Old World Creamery broke down when they could not come to an agreement on an exclusive arrangement.

In its complaint, Ornua alleges that “after negotiating with Ornua for months to package Ornua’s Irish butter under the Kerrygold mark, defendants decided instead to sell Irish butter under a new mark obviously derived from Ornua’s Kerrygold mark: Irishgold.”

It adds, “consumers wanting to purchase Irish butter will likely be misled into thinking that defendants’ Irishgold Irish butter is the work-around for selling Kerrygold Irish butter in Wisconsin, and will purchase defendants’ product thinking it is Kerrygold Irish butter.”

Meanwhile, Eurogold and Old World Creamery argued against Ornua’s motion for a temporary restraining order, saying it would be “tantamount to a judicially imposed product recall, when there is no evidence of poor quality and no product currently offered by Ornua on store shelves.”

Furthermore, they note that Old World Creamery would lose marketing and advertising costs and would have to pay its retailers approximately $20,000 to remove Irishgold butter from store shelves.

“Defendants should have their chance to respond with facts and law that will demonstrate the Irishgold mark does not infringe and Ornua is not entitled to the drastic remedy of an injunction,” the companies say in court documents. “Ornua should not be rewarded with an injunction while engaging in predatory and unfair business competition while its product is not on store shelves in Wisconsin to cause confusion.”

However, the court on April 13 granted Ornua a temporary restraining order, noting that the company has a reasonable likelihood of success in the case and would suffer irreparable harm if the defendants are permitted to continue using the Irishgold mark and packaging.

“Ornua appreciates the opportunity to be heard on this matter and welcomes the court’s issuance of a restraining order prohibiting the defendants from using trademarks that are confusingly similar to Ornua’s Kerrygold trademarks. We look forward to a final resolution of this matter,” says Jeanne Kelly, Ornua spokesperson.

Knaus says Old World Creamery will move forward at this point and look at all options available.

“We are disappointed with (last) Thursday’s ruling,” Knaus says. “As I have said many times, ‘when times get tough, it’s important to raise your head higher and keep moving forward.’”


Opportunities for probiotic cheese hold promise despite challenges

By Stephanie Awe

MADISON, Wis. — A popular ingredient in many yogurts, probiotics may hold growth potential in cheese products as well.

Probiotics have grown in popularity in recent years. A 2012 National Health Interview Survey shows that, among adults, probiotics or prebiotics were the third most commonly used dietary supplement other than vitamins and minerals, and the use of probiotics quadrupled between 2007 and 2012, according to the National Institutes of Health’s National Center for Complementary and Integrative Health (NCCIH).

Intended to have health benefits, probiotics are live microorganisms that are not only sold in food products, but in other products such as dietary supplements and skin creams as well, NCCIH says.

Attempts to sell probiotic cheese have been made in the past, but it may have a better chance at success today due in part to the promotion of probiotics by yogurt brands and more mainstream pharmaceutical and supplement companies, says Jeff Lambeseder, cultures product manager for North America, DuPont Nutrition & Health, New Century, Kansas. The company, which manufactures probiotics for dietary supplements and food/beverage categories, works with customers to formulate dairy products to include probiotics.

With higher consumer acceptance of fat in dairy products, consumer interest in probiotics and the “snack-ificiation” of cheese in recent years, probiotic cheese may be better equipped to get its foot in the door today, especially in single-serve portions, Lambeseder adds.

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Marketers outline strategies to
make dairy a customer go-to

April 14, 2017

By Alyssa Mitchell

MADISON, Wis. — In an environment where consumers increasingly want transparency in their product labeling and “clean” foods, it can be challenging to discern which demands are passing fads and which are here to stay. In a session Wednesday at the Wisconsin Cheese Industry Conference here, a panel of leading dairy marketers shared insights and strategies to positively position dairy as a go-to clean, healthy food choice.

The session, “Dairy Marketing and the New Consumer Mind,” was moderated by Kit Yarrow, consumer psychologist, professor and consultant. Panelists included Goedhart Westers, vice president of business development at Grassland Dairy, Greenwood, Wisconsin; Aaron Riipa, sourcing business leader-yogurt at General Mills, Minneapolis, Minnesota; Cathy Strange, global cheese buyer for Whole Foods Markets, Austin, Texas; Chad Vincent, CEO of the Wisconsin Milk Marketing Board, Madison, Wisconsin; and Tripp Hughes, director of brand management at CROPP Cooperative/Organic Valley, Cashton, Wisconsin.

• The new normal

Westers notes that several years ago, consumers became concerned about antibiotics and hormones in their food. Terms like “no antibiotics” and “rbST-free” began to crop up on product labels as companies strived to compete and differentiate their products in the marketplace.

However, while at one time having an “rbST-free” product label might “win” an account, in today’s marketplace, it’s the bare minimum needed just to secure business, Westers says.

“It has moved from ‘order-winning’ to ‘order-qualifying,’” he says. “No-rbST is now the norm.”

He adds that the term has penetrated across the dairy portfolio, from milk to cheese and even powders and ice cream.

“Non-GMO” also has become huge in product labeling, Westers says, noting it’s not only happening in the United States, but in global markets.

“Non-GMO is mainstream in Europe,” he says, noting this adds challenges for U.S. products to compete in world markets.

Meanwhile, “organic” has become mainstream over the years as well, notes Hughes.

At Organic Valley, 100 percent of the products are organic, he says.

“Organic is mainstream; at least 8 out of 10 households have some experience purchasing organic products,” Hughes says. “But many consumers have no idea what it means.”

He notes that a primary motivator for purchasing organic products is avoiding “negatives.”

“Our agriculture production methods never use antibiotics, GMOs or hormones,” he says.

• Generation connection

Riipa discussed the perspective of the millennial generation when it comes to buying food.

“Millennials are the biggest portion of the population, and as they start to have families, their food values will be passed on,” he says, noting millennials care greatly about their food.

To succeed with this group, he suggests companies focus more on the positive attributes of their products versus focusing on what’s not in them. Simple ingredients and telling the story of where products are sourced from can resonate with consumers, he says.

Strange says companies are almost behind if they are still striving to market to millennials, as the next generation, Generation Z, will begin to penetrate the marketplace. Still, millennials are key purchasers today, and Strange says their focus is largely on three things: health and wellness, global cuisine and snacking.

Earning trust with this consumer base is key, Strange notes.

“Millennials want companies to be open and honest about what’s in their food,” she says.

At Whole Foods, marketing focuses on driving innovation and sales, with an attribute-focused portfolio consisting of high-quality, natural and organic products that are non-GMO certified. Whole Foods also focuses on family farms, animal welfare and sustainability, Strange says.

“We want to be the organic go-to retailer,” she says.

Vincent says the dairy industry is well-positioned to stand out in a positive way, but it is facing headwinds in terms of trust, understanding and facts.

He notes it is helpful to understand that what’s top of mind for millennial consumers can be broken down into tiers. In the top tier, they are looking at price and cost of products. In the second tier, they want natural, healthy foods, and they want to buy local. In the third tier, they are thinking about pasture-raised products, sustainability, organic and animal welfare, he says.

Vincent notes that dairy sustainability is still a concept that is largely unknown to consumers.

“They’re still forming beliefs, and we need to grab the conversation,” he says.

Dairy companies can focus on dairy’s essence as a wholesome and natural product, he says.

“Freshness is by far the most important attribute to consumers when buying food,” Vincent says. “Specific to cheese, claims related to no added hormones/steroids and local sourcing are most likely to increase purchase intent.”

Both farmers and friends and family are seen as far more trustworthy to consumers than big food companies, he adds.

• Embracing your company culture

Westers says while these shifting consumer demands can be daunting, they also can be viewed as an opportunity for companies to innovate and diversify their product portfolio.

“It creates opportunities in the U.S. market. At Grassland, we’ve had to broaden our product portfolio,” he says. “I think it’s important for U.S. companies to look for opportunities to grow the dairy category.”

Vincent says companies should embrace their own culture — what do they believe in, and how do they want to innovate? While it’s important to be mindful of trends, not every trend may be worth chasing if it’s not something the company can really stand behind.

“As a marketer, you have to understand, do consumers know the facts and do you agree? If so, then it’s likely not a fad, but a trend here to stay,” he says. “But if you hang your hat on one issue and then science swings the other way, your business will suffer.”

He also notes that while many consumers say they are willing to pay more for products with certain value-added attributes, that’s not always the case at the retail shelf. He notes regular versus free-range eggs as an example. Much of the consumer base years ago wanted everything to be free-range, but when it comes to making the purchase at the store, many will still buy conventional eggs because they are cheaper.

“Focus on consumer trends that lift the entire dairy category,” Vincent says.

Riipa adds that the values have to be reflected along the entire supply chain.

“Work with cooperatives and producers to find ways to partner and establish value for consumers,” he says.


Ag leaders, lawmakers seek
help for lost sales to Canada

April 14, 2017

MADISON, Wis. — Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) Secretary Ben Brancel and New York Department of Agriculture and Markets Commissioner Richard Ball have sent a letter urging USDA to assist in providing assistance to the Wisconsin and New York dairy industries affected by Canada’s recent actions that effectively have shut down ultrafiltered milk trade from U.S. producers.

“Canada informed major Wisconsin and New York processors that they will no longer have a market for ultrafiltered milk,” Brancel and Ball wrote. “In Wisconsin this action impacts about 75 farmers, leaving them with no buyer for about 1 million pounds of their hard-earned dairy milk production as of May 1. If these multi-generational farm families cannot find another market for their milk, they will be forced to sell their cows and go out of business.”

Last week, news broke that Grassland Dairy of Wisconsin informed dozens of its milk suppliers that it no longer could take their milk as of May 1 due to Canadian buyers cancelling their pick-ups. U.S. dairy groups have noted that this is a result of Canada’s new Class 7 pricing policy, which subsidizes Canadian dairy ingredients and makes U.S. product less competitive. (See “Dairy industry seeks action over Canadian trade policy” in last week’s issue of Cheese Market News.)

“For nearly a year, Gov. Walker, Gov. Cuomo, myself, Commissioner Ball, and other state and U.S. dairy officials, warned our federal partners — and Canadian industry and government representatives oat all levels — that Canada’s protectionist regulations would harm our dairy producers,” Brancel says. “Unfortunately, these warnings now have come true.”

Brancel notes that in Wisconsin, DATCP’s Farm Center staff is contacting all milk processors across the state and in other parts of the country to assist Wisconsin dairy farmers impacted by Canada’s actions. Brancel and Ball are urging USDA to assist in their efforts to help their states’ producers by exercising its authority to purchase cheese and butter in storage and distribute it through USDA’s nutritional aid programs, including food banks and national school programs.

They add that Wisconsin is home to 9,236 dairy farms with 1.28 million cows, and that the state’s dairy industry generates $43.4 billion and 78,900 jobs. New York exports more to Canada than to any other country, and New York’s dairy industry has almost 5,000 family-run farms that are home to more than 618,000 cows. In 2015, New York’s dairy community brought in $2.5 billion in sales and employed 20,000 people.

“Wisconsin and New York have always appreciated our partnership with USDA and look forward to working with the department to support our dairy farmers during this trying time,” Brancel and Bell write.

Meanwhile, Speaker of the House Paul Ryan, R-Wis., Rep. Sean Duffy, R-Wis., and the rest of the Wisconsin congressional delegation sent a letter this week to Commerce Secretary Wilbur Ross, Acting U.S. Trade Representative (USTR) Stephen Vaughn and Acting USDA Secretary Michael Young regarding concerns about the recent actions by Canada restricting U.S. milk exports.

The letter expresses the lawmakers’ concern that Canada appears to be violating its existing trade obligations to the United States. It urges the U.S. officials to address this situation in which they say Canada’s trade practices are putting Wisconsin dairy farmers’ livelihoods at risk.

“Exports are critical to the viability of Wisconsin’s dairy farms. These families rely on them for their very livelihood,” Ryan says. “I am encouraged by this bipartisan effort and will continue to work with my colleagues and impacted stakeholders to break down these trade barriers and reach a practical solution.”

The International Dairy Foods Association, National Milk Producers Federation, U.S. Dairy Export Council and the National Association of State Departments of Agriculture also this week sent a joint letter to President Trump urging the administration to tell Canadian Prime Minister Justin Trudeau to halt the new pricing policy and restore imports of the blocked U.S. products, specifically ultrafiltered milk. Additionally, they are asking President Trump to direct U.S. agencies to “examine a full range of tools that could be used immediately to impress upon Canada in a concrete way the importance of dependable two-way trade.”

According to the 2017 National Trade Estimate Report on Foreign Trade Barriers, published last month by the office of the USTR, the United States has raised its serious concerns with Class 7 — and other class modifications that extend discount pricing to a wide range of Canadian dairy ingredients ­— with Canada bilaterally and with the World Trade Organization Committee on Agriculture, and it is examining these milk classes closely.

The report notes that provincial milk marketing boards in Canada began implementing Class 7 in February 2017, and that Class 7 and other recent pricing modifications are aimed at undercutting the price and displacing current sales of U.S. dairy ingredients.


U.S. Championship Cheese
Auction raises $208,300

April 14, 2017

MADISON, Wis. — Bidders raised a total of $208,300 Wednesday night at the U.S. Championship Cheese Auction. The event was held as part of the Wisconsin Cheese Industry Conference here this week.

Proceeds from the auction benefit numerous Wisconsin Cheese Makers Association (WCMA) programs.

“We’ve documented more than $1 million in strategic giving in recent years, such as our $500,000 leadership gift to build the new Center for Dairy Research in Madison,” says John Umhoefer, executive director, WCMA. “But we’re not resting on past accomplishments.”

WCMA is focused on advancing training and education to empower dairy industry management and show a career pathway for the national dairy workforce. The Wisconsin Center for Dairy Research (CDR) is a key partner, as are the University of Wisconsin School of Business and technical colleges throughout Wisconsin.

“With auction dollars, we’ve built Management Skills for Dairy Professionals, with more than 100 graduates, and the new Certificate in Dairy Processing for promising plant workers,” Umhoefer says, noting that this year, WCMA will create Dairy Supervisor Management Training to build skills in middle management.

Auction dollars also fund WCMA’s five student scholarships, provide support for dairy producer organizations and help the organization in its new role as host of the National Collegiate Dairy Products Evaluation Contest.

Lots and their winning bids from Wednesday’s auction are as follows:

• Item 1: AMPI Love It! — Kerry purchased a combined 45 pounds of Mild White Cheddar made by Shawn Sadler, Associated Milk Producers Inc. (AMPI), Jim Falls, Wisconsin, and American Slices made by Process Slice Team, AMPI, Portage, Wisconsin, for $150 per pound or a total of $6,750.

• Item 2: Foremost Finest — R. Mueller purchased 10 pounds of Aged Provolone made by Team B, Foremost Farms USA, Clayton, Wisconsin, for $310 per pound or a total of $3,100.

• Item 3: Famoso Formaggio — Cheese Market News purchased a combined 20 pounds of Truffle Oil & Basil String and Two-Cheese Stuffed Mozzarella made by Anthony Mongiello, Formaggio Italian Cheese Specialties, Hurleyville, New York, for $27.50 per pound or a total of $550.

• Item 4: Agropur Amazes — DSM purchased a combined 40 pounds of Aged Cheddar (U.S. Championship Cheese Contest First Runner-Up) made by Terry Lensmire, Sharp Cheddar and Aged Cheddar made by Daniel Stearns, Agropur, Weywauwega, Wisconsin, and Colby Jack made by Sam Metzger, Agropur, Hull, Iowa, for $325 per pound or a total of $1,300.

• Item 5: Emmi Eminence — Great Lakes Cheese purchased a combined 38 pounds of Whole Milk Havarti and Roth Grand Cru Reserve made by Emmi Roth USA, Fitchburg, Wisconsin, for $200 per pound or a total of $7,600.

•Item 6: Klondike Gold — Sulbana purchased a combined 40 pounds of Odyssey Feta and Odyssey Fat Free Feta made by Steve Webster, Odyssey Mediterranean Feta and Brick made by Luke Buholzer and Odyssey Greek Vanilla Yogurt made by Ron Buholzer, Klondike Cheese Co., Monroe, Wisconsin, for $250 per pound or a total of $10,000.

• Item 7: Mighty Meister — Membrane Process & Controls purchased a combined 40 pounds of Medium Cheddar made by Meister Team 3 and Monterey Jack made by Meister Team 2, Meister Cheese, Muscoda, Wisconsin, for $250 per pound or a total of $10,000.

• Item 8: Montchevre Mastery — Food Safety Net Services purchased a combined 25 pounds of Truffle Fresh Goat Cheese, Blueberry Vanilla Fresh Goat Cheese, Goat’s Milk Cheese Crumble, Apricot & Sage Crumble and Trivium made by Team Montchevre, Montchevre-Betin, Belmont, Wisconsin, for $100 per pound or a total of $2,500.

• Item 9: Mill Creek Streak — Nelson Jameson purchased a combined 15 pounds of Mild Pepper Queso Quesadilla, Farmer and Reduced Fat Muenster made by John (Randy) Pitman, Mill Creek Cheese, Arena, Wisconsin, for $425 per pound or a total of $6,375.

• Item 10: Spectacular Saputo — Koss Industrial purchased a combined 68 pounds of Stella Aged Asiago made by Team Almena, Salemville Gorgonzola made by Salemville Cheese for Saputo Specialty Cheese and Pepper Jack made by Team Alto for Saputo Specialty Cheese, Richfield, Wisconsin, for $300 per pound or a total of $20,400.

• Item 11: Victorious Vermont — Dairy Connection purchased a combined 26 pounds of Moses Sleeper, Harbison and Willoughby made by Jasper Hill Team, Cellars at Jasper Hill, Greensboro Bend, Vermont; Bear Hill made by Grafton Village Cheese, Brattleboro, Vermont; Crème Fraîche Madagascar Vanilla made by Vermont Creamery, Websterville, Vermont; and Mad River Blue made by von Trapp Farmstead, Waitsfield, Vermont, for $25 per pound or a total of $650.

• Item 12: Agropur, For Sure — Masters Gallery Foods purchased a combined 45 pounds of Low-Moisture Part-Skim Mozzarella made by Roger Krohn and Provolone made by Terry Lensmire, Agropur, Luxemburg, Wisconsin, and Smoked Provolone made by Team Lake Norden, Agropur, Lake Norden, South Dakota, for $210 per pound or a total of $9,450.

• Item 13: Gilded Guggisberg — Cherney Microbiological purchased 200 pounds of Emmental Block made by Team Sugarcreek, Guggisberg Cheese, Millersburg, Ohio, for Finlandia, for $17.50 per pound or a total of $3,500.

• Item 14: Super Saxon — Commodity Risk Management Group purchased a combined 36 pounds of Old English Style Cheddar, Aged Smoked Gouda and Aged Gouda with Serrano Peppers made by Saxon Creamery Team, Saxon Cheese LLC, Cleveland, Wisconsin, for $35 per pound of a total of $1,260.

• Item 15: Winning Westby — R. Mueller purchased a combined 10 pounds of Small Curd Cottage Cheese made by Cottage Team and Smari Icelandic Yogurt Plain made by Westby Yogurt Team, Westby Co-op Creamery, Westby, Wisconsin, for $225 per pound or a total of $2,250.

• Item 16: Beloved BelGioioso — Kelley Supply purchased a combined 30 pounds of BelGioioso Parmesan made by Dan Szczepanski and Burrata with Black Truffles made by Bryan Springborn, BelGioioso Cheese, Green Bay, Wisconsin, for $225 per pound or a total of $6,750.

• Item 17: V&V Victories — Masters Gallery Foods purchased a combined 15 pounds of Oaxaca Cheese Ball made by Casey Berget and Cotija Wheel made by V&V Supremo Foods, Browntown, Wisconsin, for $300 per pound or a total of $4,500.

• Item 18: King Cabot — DSM purchased 40 pounds of Vermont 50-percent Reduced Fat Jalapeno Cheddar made by Terry Chase, Cabot Creamery Cooperative, Cabot, Vermont, for $135 per pound or a total of $5,400.

• Item 19: Carr Valley Cadillacs — Jerry Dryer purchased a combined 10 pounds of Swiss Almond Spread and Garlic Bread Cheese made by Carr Valley Cheese Co. Inc., LaValle, Wisconsin, for $300 per pound or a total of $3,000.

• Item 20: Masters Gallery Masterpiece — Prolamina purchased 5 pounds of Gourmet Cheddar Blend made by Masters Gallery Foods, Plymouth, Wisconsin, for $820 per pound or a total of $4,100.

• Item 21: Schuman Shines — T.C. Jacoby purchased a combined 15 pounds of Montforte Bleu Wheel made by Imperia Foods Montfort Team, Yellow Door Creamery Harissa Rubbed Fontal Cheese made by Lake Country Dairy Team and Cello Shredded Parmesan made by Team Schuman, Schuman Cheese, Fairfield, New Jersey, for $450 per pound or a total of $6,750.

• Item 22: Wicked Widmer — Dairy Connection purchased 10 pounds of Washed Rind Aged Brick Spread made by Widmer’s Cheese Cellars, Theresa, Wisconsin, for $360 per pound or a total of $3,600.

• Item 23: Craving Crave Cheese — Nelson Ricks Cheese purchased a combined 10 pounds of Fresh Mozzarella and Jalapeno Cheddar Cheese Curds made by Crave Brothers Team, Crave Brothers Farmstead Cheese, Waterloo, Wisconsin, for $200 per pound or a total of $2,000.

• Item 24: Glanbia Gold — GEA purchased 40 pounds of Green Olives & Pimento Gouda made by Christopher Gonzales, Glanbia Nutritionals, Twin Falls, Idaho, for $125 per pound or a total of $5,000.

• Item 25: Bongards Best — Custom Fabricating & Repair purchased 5 pounds of American Deli Loaf made by Loaf Day Shift, Bongards Premium Cheese, Bongards, Minnesota, for $350 per pound or a total of $1,750.

• Item 26: Peak Organic Valley — Chr. Hansen purchased 5 pounds of Organic Plain Grassmilk Yogurt made by Schreiber Foods for Organic Valley, La Farge, Wisconsin, for $300 per pound or a total of $1,500.

• Item 27: Marvelous Marieke — Commodity Risk Management Group purchased a combined 38 pounds of Marieke Gouda Belegen (Second Runner-Up) and Marieke Gouda Aged made by Marieke Gouda Team, Marieke Gouda, Thorp, Wisconsin, for $80 per pound or a total of $3,040.

• Item 28: Dynamic DFA — Cargill purchased 6 pounds of Whole Milk Mozzarella made by Candido’s Team, Dairy Farmers of America, Turlock, California, for $450 per pound or a total of $2,700.

• Item 29: Decatur Does It Again — Nelson-Jameson purchased 10 pounds of Havarti Mediterranean Herb made by Decatur Cheesemakers, Decatur Dairy, Brodhead, Wisconsin, for $300 per pound or a total of $3,000.

• Item 30: Nordic’s Number Ones — Wisconsin Agricultural Education Center purchased a combined 20 pounds of Cultured Butter and Cinnamon Sugar Butter made by Al Bekkum, Nordic Creamery, Westby, Wisconsin, for $20 per pound or a total of $400.

• Item 31: Rothenbuhler Reigns — Great Lakes Cheese purchased a combined 200 pounds of Baby Swiss made by Casey Petak and Reduced Sodium Swiss made by Connor Bowman of Rothenbuhler Cheesemakers, Middlefield, Ohio, for $30 per pound or a total of $6,000.

• Item 32: Luscious Lactalis — Cherney Microbiological purchased 10 pounds of Président Pub Cheddar Horseradish spread made by Lyle Gast Jr., Lactalis USA, Merrill, Wisconsin, for $300 per pound or a total of $3,000.

• Item 33: Gilman Greatness — Wisconsin Aging and Grading purchased 5 pounds of Horseradish Pasteurized Process with Old Croc Cheddar made by Gilman Cheese Corp. for Trugman Nash, Millburn, New Jersey, for $350 per pound or a total of $1,750.

• Item 34: Schreiber Showstopper — Cargill purchased 10 pounds of Whipped Plain Cream Cheese made by Schreiber Foods, Green Bay, Wisconsin, for $300 per pound or a total of $3,000.

• Item 35: Pearl Valley Pearl — Milk Specialties Global purchased 8 pounds of Smoked Natural Swiss made by Pearl Valley Cheese, Fresno, Ohio, for $150 per pound or a total of $1,200.

• Item 36: Southwest Sweep — Custom Fabricating & Repair purchased a combined 40 pounds of Southwest Asiago, Pepper, Ghost Pepper Jack and Habanero Cheddar made by Team SWC, Southwest Cheese, Clovis, New Mexico, for $225 per pound or a total of $9,000.

• Item 37: Zimmerman’s Pride — Complete Filtration purchased 6 pounds of Smoked Brick made by Team 2, Zimmerman Cheese, South Wayne, Wisconsin, for $425 per pound or a total of $2,550.

• Item 38: Greatest Great Lakes — Cherney Microbiological purchased 10 pounds of Havarti Shingle Slices made by Slice Samurai, Great Lakes Cheese, Plymouth, Wisconsin, for $400 per pound or a total of $4,000.

• Item 39: LaGrander’s Grander — Winona Foods purchased 13 pounds of Colby Longhorn made by Team 2, LaGrander’s Hillside Dairy, Stanley, Wisconsin, for $1,050 per pound or a total of $13,650.

• Item 40: Atta-Boy O-AT-KA — Enerquip purchased 10 pounds of Salted Butter made by Team 1, O-AT-KA Milk Products Co-op, Batavia, New York, for $50 per pound or a total of $500.

• Item 41: Red Barn Royalty — Wisconsin Aging and Grading purchased 13 pounds of Bandaged Cheddar made by Wayne Hintz, Red Barn Family Farms, Appleton, Wisconsin, for $175 per pound or a total of $2,275.

• Item 42: Supreme Sartori — D.R. Tech purchased a combined 20 pounds of Sartori Tre Donnes and Sartori Reserve Black Pepper BellaVitano (U.S. Grand Champion) made by Mike Matucheski, Sartori Co., Antigo, Wisconsin, for $525 per pound or a total of $10,500.


USDA lowers milk production,
dairy price forecasts

April 14, 2017

WASHINGTON — In its “World Agricultural Supply and Demand Estimates” report released this week, USDA lowered its 2017 U.S. milk production forecast to 217.3 billion pounds, down from last month’s forecast of 217.5 billion pounds, as reductions in milk per cow offset increases in milk cow numbers.

The forecast for fat-basis imports is reduced on weaker imports of cheese and butterfat products, but imports of milk protein products support a higher skim-solids basis import forecast. The fat-basis export forecast is lowered on weaker sales of whole milk powder (WMP), but the skim-solids basis export forecast is revised as weaker WMP is more than offset by higher sales of a number of skim-based products, the report says. Ending stock forecasts are raised on both a fat and skim-solids basis, reflecting current large supplies and lower expected domestic use.

Dairy product price forecasts for cheese, butter, nonfat dry milk (NDM) and whey are lowered as both domestic and international supplies are large.

The average cheese price in 2017 now is forecast to fall in the $1.600-$1.650 per pound range, down from $1.645-$1.705 in last month’s report. The butter price range is tightened to $2.120-$2.200 versus $2.120-$2.210 in last month’s report.

USDA now forecasts 2017 NDM prices to average in the $0.865-$0.905 range, down from $0.925-$0.975 in the March report, while the whey price forecast is lowered to $0.49-$0.520 from $0.495-$0.525 last month.

As a result of lower dairy product prices, the Class III and Class IV price forecasts also are reduced from last month. The Class III price is forecast at $16.10-$16.60 per hundredweight, down from $16.60-$17.20, and the Class IV price forecast is lowered to $14.30-$14.90, down from $14.85-$15.55.

The all-milk price forecast for 2017 is lowered to $17.40-$17.90, down from $17.80-$18.40 in the March report.


Dairy industry seeks action
over Canadian trade policy

April 7, 2017

By Rena Archwamety

WASHINGTON — As news this week broke that Wisconsin’s Grassland Dairy Products canceled milk purchasing contracts with a number of dairy farmers, lawmakers and dairy industry organizations have scrambled to put more pressure on Canada’s protectionist dairy trade policies and seek alternate avenues for milk processing.

On Wednesday, the U.S. Dairy Export Council (USDEC), National Milk Producers Federation (NMPF) and International Dairy Foods Association (IDFA) renewed their call for the federal government, as well as governors in northern states, to take immediate action in response to Canada’s violation of trade commitments to the United States.

The groups explain that because of Canada’s new “Class 7” pricing policy, which they say is expressly designed to disadvantage U.S. exports to Canada and globally, multiple dairy companies in Wisconsin and New York have been forced to inform many of their supplying farmers that the Canadian market for their exports has dried up.

Several news outlets reported this week that Grassland sent a letter to 75 farmers informing them it could no longer accept their milk starting May 1. (See column “Canadian policy hits Wisconsin dairy farms” in this week’s issue.)

Grassland says the situation has affected “several dozen” farmer suppliers.

Goedhart Westers, vice president of business development, Grassland Dairy Products, says the company was notified last week that some of its Canadian customers would be making their last pickup of ultrafiltered milk the following Thursday, and that it would lose sales equating to about a million pounds of its total daily milk intake.

“We tried to absorb as much of that as we could in our plant, but we can’t run the full extra million pounds,” Westers says. “We had to make a decision, and we were forced to make a big decision in a very short period.”

Westers says Canada’s new dairy policy, which subsidizes domestic product, has made Grassland’s ultrafiltered milk product completely cost prohibitive in the Canadian market.

“It’s a very effective policy on Canada’s side,” he says. “We still believe it is protectionist in nature and doesn’t align with current free trade agreements. But we lost the sale, and our farms lost a home for their milk. We’ll keep fighting this issue together with USDEC and state and federal officials.”

NMPF says situations like these are a direct consequence of Canada’s National Ingredients Strategy and new Class 7 milk pricing program.

“Canada’s protectionist dairy policies are having precisely the effect Canada intended: cutting off U.S. dairy exports of ultra-filtered milk to Canada despite long-standing contracts with American companies,” says Jim Mulhern, president and CEO, NMPF. “American companies have invested in new equipment and asked dairy farmers to supply the milk to meet demand in the Canadian dairy market. This export access has suddenly disappeared, not because the market is gone, but because the Canadian government has reneged on its commitments.”

U.S. Rep. Mike Gallagher, R-Wis., says Canada is breaking longstanding trade agreements, and Wisconsin farmers are paying the price.

“The announcement that Grassland Dairy will be cutting its milk intake from our local farms because of new Canadian regulations preventing the sale of our dairy products in their country is not consistent with our values nor our agreements,” Gallagher says. “Trade must be free but fair, and Canada must play by the rules.”

Dairy plants in New York and Wisconsin have been challenged to keep up with expanding milk production in their regions for several years. One market opportunity recently developed took advantage of a loophole in what otherwise was a very tightly-controlled dairy trade agreement between the United States and Canada, explains Andrew Novakovic, EV Baker Professor of Agricultural Economics, Cornell University.

“U.S. manufacturers discovered that they could sell ultrafiltration, or UF milk to Canadian cheesemakers through a loophole in our trade agreement. Canada and its provinces quickly reacted to defend their border and producers from this invasion of U.S. milk ingredients, and have now adjusted their system to allow their cheesemakers to buy the same kind of product at a competitive price within Canada,” Novakovic says. “This has left two companies in New York and one company in Wisconsin with a significant amount of milk that now must find new markets at a time when plants are awash in milk and struggling to find breakeven marketing outlets.”

A group of 24 Wisconsin state representatives this week sent a letter to University of Wisconsin System President Ray Cross requesting that the University of Wisconsin system consider researching new uses for dairy milk in response to the abundant supply resulting in part because of Canada’s recent actions.

The letter explains the situation with Grassland and adds that other processors also are swimming in an abundance of milk and cannot absorb it, leaving the farmers with nowhere to sell their milk.

“I’m encouraged that so many of my colleagues recognize and value the importance of dairy to Wisconsin’s overall economy,” says Wisconsin Rep. Travis Tranel, R-Cuba City. “It is imperative that the state does everything it can to protect this vital industry. I hope this letter leads to many more productive conversations as to how we can begin to find innovative new uses for milk and keep dairy farming as a viable opportunity for generations to come.”

Tom Vilsack, president and CEO of USDEC, says while families in the Northeast and Midwest are suffering the immediate consequences of the loss of Canadian markets, “thousands more will suffer if Canada persists in using its programs to distort the global milk powder markets so critical to tens of thousands of American dairy farmers.

“Our federal and state governments cannot abide by Canada’s disregard for its trade commitment to the United States and its intentional decision to pursue policies that are choking off sales of American-made milk to the detriment of U.S. dairy farmers,” Vilsack says. “It is deeply concerning that Canada has chosen to continue down a ‘beggar thy neighbor’ path of addressing its internal issues by forcing the U.S. dairy industry to bear the harmful consequences.”

Michael Dykes, president and CEO, IDFA, says the U.S. dairy industry is united on this issue because Canada’s policies effectively bar a significant U.S. export to Canada, with total losses estimated to hit $150 million worth of UF milk exports from Wisconsin and New York.

“As we feared, these policies are now prohibiting our nation’s dairy processors from accessing the Canadian market,” Dykes says. “IDFA is speaking out against Canada’s protectionist policies on Capitol Hill and asking the Trump administration and state governors and legislators to insist that Canada honor its trade commitments and allow more market access for U.S. dairy products.”

The groups note that despite efforts by the U.S. government and dairy organizations to shed more light on the Canadian program, Canada is refusing to share sufficient details. For instance, limited information has been posted online by certain provinces, and some of that information has subsequently been removed from provincial milk authorities’ websites in what appears to be aimed at obfuscating how the program operates, the U.S. groups say.

The United States is Canada’s largest export market, the groups add, accounting for approximately three-fourths of Canada’s total exports. The organizations have urged both federal and state governments to move swiftly to demonstrate to Canada that trade is a door that must swing two ways to have a functional relationship.


Switzerland enjoys reputation
for high-quality hard cheeses

April 7, 2017

Editor’s note: Passport to Cheese is Cheese Market News’ feature series exploring the dairy industries of nations around the world. Each month this series takes an in-depth look at various nations/regions’ dairy industries with coverage of their milk and cheese statistics and key issues affecting them. The nations’ interplay with the United States also is explored. We are pleased to introduce our latest country — Switzerland.

By Rena Archwamety

MADISON, Wis. — Switzerland, known for its grassy mountains and hard cheeses, has an extensive history of cheesemaking in its Alpine regions.

According to Switzerland Cheese Marketing AG (SCM), a nonprofit marketing organization serving Switzerland’s cheese industry, archeological findings show that cattle were bred on the land that would become Switzerland as long ago as the Neolithic period, and the ancient Romans brought the tradition of hard cheese as far as the Alps.

“Cheesemaking has a long history in Switzerland, and there are mentions of Gruyère (in the Pays d’Enhaut region in the former country of Gruyère) around 1115,” says Manuela Sonderegger, SCM spokesperson.

In the early days of the Swiss Confederation, cheese was not only a food staple but also became commonly used as a means of payment, SCM notes. Craftsmen, day laborers and even priests were often paid “in cheese and money.” Later in the 15th and 16th centuries, Alpine herdsmen would take their surplus cheese supplies down to the valley to sell.

Consumer demand for hard Swiss cheeses significantly increased in the 18th century due to its long shelf life, and since the 1830s, more and more dairies sprang up in Switzerland’s valleys as well, SCM says.

Today, dairy producers are split almost evenly among Switzerland’s valley areas (11,561) and mountainous areas (10,555), according to 2015 data reported by Swissmilk, which represents Swiss dairy producers. Total 2015 milk production was 4.0 million metric tons, and the average herd size of dairy farms in Switzerland is about 25 head.

“Around 80 percent of the cultivated land is unsuitable for farming and is mainly used for livestock breeding ... this is why Switzerland is ideal for cheese production,” Sonderegger says of Switzerland’s landscape. “Farmers live at the max 20 kilometers away from the cheese dairy. And cheese production you can find all over the country.”

There are about 600 village cheese processors in Switzerland, and while the country has a worldwide reputation for its high-quality cheese, it produces only a tenth of the amount Germany does, Sonderegger notes.

“The dairies are mostly family-owned, and the production is similar to the one 100 years ago,” she says. “There are only some machines ... but otherwise it is still a lot of handcraft in every cheese.”

• Cheeses of Switzerland

There are more than 450 varieties of cheeses produced in Switzerland, from the famous hard cheeses Emmentaler AOP and Le Gruyère AOP, to semi-hard cheeses like Raclette Suisse and Appenzeller, to soft mold-ripened and smear-ripened cheeses, cream cheeses and goat’s and sheep’s milk cheeses. Just under half of the milk produced in the country is made into cheese, SCM says.

“Gruyère AOP is the most produced cheese (26,325 metric tons) followed by Emmentaler AOP (17,029 metric tons),” Sonderegger says. “What is sure a trend is that people are looking for natural products in high quality and these are our cheeses.”

Emmentaler AOP, considered the “king of the cheeses” from Switzerland, comes from the valley of the Emme in the canton of Berne. It has been produced there since the 13th century, and today it is made in about 200 different village cheese dairies from unpasteurized milk from cows fed grass and hay but not silage, SCM says. The most typical characteristic of Emmentaler AOP is its holes, which appear during the fermentation process and vary between cherry- and walnut-sized.

Le Gruyere AOP has been produced since at least the 12th century in the region surrounding the small town of Gruyère, and it still is made today in village cheese factories according to the traditional recipe. It owes its subtlety and characteristic taste to quality unpasteurized milk coming straight from cows fed grass during the summer and hay during the winter, SCM says. During the slow maturing stage, which lasts six months, the rounds of cheese are turned and brushed with salted water, and the humidity encourages the cheese rind’s “smear,” which gives Gruyère AOP its well-known distinctive flavor.

According to a September 2016 Euromonitor report on Cheese in Switzerland, cheese was among the most dynamic categories in Swiss dairy in 2016, with an increasing variety of cheese products available in Switzerland. Although imported cheese accounts for more than a third of total cheese value sales in 2016, Swiss consumers remain loyal to their domestic products, the report says.

“Increasing interest in premium cheese and strong attachment to local products and authenticity will be among the positive influences affecting cheese,” Euromonitor reports, adding that the share of cheaper imported products also will continue to grow, limiting growth in value sales.

“Cheesemakers face as a challenge the cheap imports from Europe,” Sonderegger adds.

Switzerland is a major exporter of cheese, exporting 68,459 metric tons, more than a third of its total production, in 2015, according to SCM. Its largest cheese exports are Emmentaler AOP, Le Gruyère AOP and other semi-hard and hard cheeses. Eighty percent of its cheese exports in 2015 went to the European Union, and 13 percent went to the United States.

• Dairy processors

While small village factories are responsible for much of Switzerland’s cheese production, four large companies — Emmi, Cremo, Hochdorf and Elsa — are responsible for processing about 60 percent of Switzerland’s milk production into dairy products, according to Sibylle Umiker, head of media relations, Emmi Management AG. Some large companies like Emmi also help cure and market cheeses from smaller producers.

“Emmi is the largest processor of Swiss milk,” Umiker says. “In Switzerland, the focus in production is on dairy products (milk, butter, cream), fresh products (e.g. yogurt and drinks), fresh cheese (Mozzarella) and milk powder. We also produce cheese, but we are more of a cheese refiner and trader.”

Emmi in 2016 processed a total of 920,000 metric tons of milk at about 25 production sites of various sizes across Switzerland. A stock-listed company since 2004, the majority of Emmi’s shares (about 53 percent) are held by the Central Switzerland Milk Producers, a cooperative of small- and mid-size dairy farmers. Overall, Emmi sources its milk from five producer organizations as well as about 2,500 direct suppliers.

A December 2016 Euromonitor report on Dairy in Switzerland says a large number of dairy farmers in Switzerland remained under economic pressure in 2016. According to Swissmilk, dairy policy needs to be reviewed in order to save Swiss milk production, the report says. Fluid milk prices no longer cover dairy farmers’ expenses, threatening operations, and pressure from imports, cross-border shopping and a strong Swiss franc further contributed to overall negative performance last year. Swiss milk production likely will remain under pressure due to uncertainties about the price of milk, Euromonitor predicts.

• Product trends

While fluid milk consumption in Switzerland has been steadily declining, Euromonitor reports that manufacturers of yogurt and sour milk products have focused on attracting consumer attention by introducing more innovative products this past year. Indulgence also was a focus as manufacturers capitalized on the trend for Greek yogurt, combining health benefits and good taste. Euromonitor adds that dairy product consumers in Switzerland are increasingly aware of the importance of healthy nutrition. The trend toward products with lower fat content, healthier ingredients and other health benefits are expected to evolve in the future.

Among Emmi’s most well-known brands in Switzerland are yogurts like Jogurtpur, without any additives and flavors, and Yoqua, which is high in protein and low in fat. Another bestseller is Emmi Energy Milk, a brand that’s more than 20 years old and known because of some partnerships with Swiss celebrities like tennis player Roger Federer. Umiker notes that Emmi has seen the most growth and current trends in niches like organic or goat’s milk (roughly 10 percent of Emmi sales is organic dairy), high-protein, clean label and low-sugar.

While Emmi produces some of its own cheeses like Scharfer Maxx and Switzerland Swiss, which are available in the U.S. market, some of its most famous cheeses in Switzerland and abroad are its Kaltbach varieties, many of which are procured from smaller dairies and aged in Emmi’s Kaltbach sandstone cave. These include cheeses such as Gruyere AOP, Emmentaler AOP and others.

Emmi’s specialty cheeses, as well as Emmi Caffè Latte drinks, are its most popular exports, and its biggest export markets include the United States, Spain, Germany and Tunisia.


Executive shares strategies
for minimizing recall risk

April 7, 2017

By Alyssa Mitchell

CHICAGO — With recent major multi-manufacturer recalls in the food supply chain and the implementation of the Food Safety Modernization Act (FSMA), Scott Hood, director of global food safety and regulatory affairs at General Mills, shared strategies for minimizing recall risks and a holistic approach to food safety protocol in a session Tuesday during the ProFood Tech conference here.

Tuesday’s session, a “Henry Randolph Symposium,” was established by Mérieux NutriSciences to recognize the achievements of the late “Doc” Randolph through the practical application of food safety and quality principles to improve dairy manufacturing.

Hood has been with General Mills for 18 years. Prior to that, he worked for one of the suppliers of ice cream mix to Schwan’s Sales Enterprises, Marshall, Minnesota. While Hood was working for a supplier to Schwan’s, Schwan’s in October 1994 recalled its ice cream after reports of food poisoning. Investigators found Salmonella bacteria in samples of Schwan’s ice cream eaten by people who became ill.

Hood notes that reviews of trailer receipts for previous truckloads revealed that raw eggs were being transported in the trucks prior to the ice cream mix, which later was revealed as the likely source of contamination. This discovery led to a review of cleaning and sanitation programs related to use of the trucks.

At General Mills, Hood also has dealt with recalls. In November 2007 General Mills issued a recall of 5 million pepperoni pizzas under its Totino’s pizza line. The pizzas were linked to an outbreak of E. coli.

“People were scratching their heads; how do you get sick from a frozen pizza?” Hood says.
He says the source of the contamination was never fully confirmed, but what is suspected is that people were not fully cooking their food. While all of the ingredients on the frozen pizzas had been cooked at one time, “it’s not a ready-to-eat food,” Hood says.

Last May, General Mills issued three recalls related to E. coli in its Gold Medal brand flour.
“Flour is about the most complicated supply chain you’ve ever seen,” Hood says. “With all of the blending, it’s very hard to trace.”

Hood notes that in this instance, investigations revealed people were eating raw cookie dough, the likely cause of illness.

Over time, methods to track the source of contamination have evolved, Hood says. He notes the industry now has whole genome sequencing, the process of determining the complete DNA sequence of an organism’s genome at a single time. These methods help to solve more outbreaks so there are fewer cases of illness per outbreak, he says.

As science has evolved, views on product testing also have changed, Hood says. Historically, companies would test for safety, but over time, companies have taken on more of a prevention mindset.

At General Mills, testing is part of the verification process related to prevention, Hood says.
“The basic principle is that pathogens shouldn’t be present in ready-to-eat foods,” he says. “If we agree, why are we afraid to test? We shouldn’t be.”

General Mills has developed routine testing and a risk assessment of its products to focus on key, low-moisture, ready-to-eat foods with higher risk of contamination, he says.

“It’s not just about preventive measures — testing can lead to discovery and improvement,” he says. “As we increased our testing, our product safety improved over time.

“Testing is one means to verify your preventive systems are working as intended,” he adds.
Hood acknowledges, however, that more testing, at least initially, likely will lead to more positive results for food pathogens.

“It’s certainly not a reason not to test, but something to be aware of as you develop a food safety program,” he says.

When it comes to forecasting and preventing recalls, Hood recommends that companies take a holistic approach to HACCP regulations and preventive controls.

“Conduct risk assessments, and focus on the areas of greatest concern,” he says. “For example, if people are not trained well or if your plant has a high turnover rate, those factors can increase your risk.”

Hood notes that it’s also important to be aware of the most common causes of recalls. He says that General Mills has averaged about five recalls per year over the last five years. Half of those recalls were for undeclared allergens in products, while a quarter were for physical hazards and the other 25 percent for microbiological hazards.

“If you really want to prevent recalls, focus on your allergen programs,” he says.

He adds it’s important to keep in mind that when taking a closer look at prevention and testing to reduce risk, “it gets worse before it gets better,” as a deeper look often leads to more discovery of problems.

However, once those problems are identified and addressed, there is overall improvement for the long term, he says.

“As an industry, we can learn from each other,” Hood says.


Adjusted February cheese
production rises 2.0 percent

April 7, 2017

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 941.7 million pounds in February, 1.4 percent below February 2016 and 9.9 percent below January 2017, according to data released this week by UDSA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart at right.) When adjusted for the length of the months, February cheese production was up 2.1 percent on an average daily basis from February 2016, which was a leap year, and down 0.2 percent on an average daily basis from January 2017.

Italian-type cheese production totaled 407.1 million pounds in February, down 4.0 percent from February 2016 (not adjusted for leap year). Production of Mozzarella, the most-produced Italian-type cheese, totaled 315.6 million pounds in February, 5.1 percent lower than February 2016.

American-type cheese production totaled 373.2 million pounds in February, and, unadjusted for the 2016 leap year, was still 1.7 percent higher than February 2016 production. Production of Cheddar, the largest component of American-type production, was up 6.9 percent, unadjusted, versus February 2016.

Wisconsin led the nation’s cheese production in February with 252.0 million pounds, up 1.8 percent (unadjusted) from February 2016.

California followed with 192.1 million pounds, down 7.8 percent from its production a year earlier.
The next four cheese-producing states in February 2017 were Idaho with 68.3 million pounds, down 3.4 percent;

New York with 66.0 million pounds, down 0.9 percent, New Mexico with 59.4 million pounds, down 1.8 percent, and Minnesota with 51.6 million pounds, down 0.1 percent.

NASS reports total U.S. butter production was 164.3 million pounds in February 2017, down 5.8 percent from February 2016 and down 7.6 percent from January 2017. When adjusted for the length of the months, February butter production was down 2.4 percent on an average daily basis from February 2016, which was a leap year, and up 2.3 percent on an average daily basis from January 2017.

California led the nation’s butter production with 48.6 million pounds in February 2017, down 4.7 percent, unadjusted, from February 2016.


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Today's Cheese Spot Trading
April 27, 2017

Barrels: $1.4200 (NC)
Blocks: $1.5225 (-2)

Click here for more market activity
Cheese Production
U.S. Total Feb.
941.708 mil. lbs.

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

Guest Columnist

Does the world need more or less milk?

Eric Meyer, HighGround Dairy

Better ways to price whey

Mike McCully, McCully Group LLC

Click here for our columnist archives

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