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Vilsack sworn in as secretary of USDA; stimulus advances

February 26, 2021

WASHINGTON — Tom Vilsack was sworn in as USDA secretary on Wednesday evening by Vice President Kamala Harris following Senate confirmation earlier this week. Vilsack previously served in the position under the Obama administration and returns to the position after serving as CEO of the U.S. Dairy Export Council (USDEC) from 2017-2021.

“After an overwhelmingly bipartisan vote, Secretary Vilsack can now get to work and help our farmers, families and rural communities,” says Debbie Stabenow, D-Mich., chairwoman of the Senate Agriculture Committee. “I look forward to partnering with him to address the challenges for our farmers and rural communities related to the COVID-19 pandemic, feed American families in need and create new markets while curbing the climate crisis.”

Dairy industry stakeholders praised Vilsack’s confirmation, noting his experience with issues of importance to the dairy sector.

“As Mr. Vilsack knows well, one-fifth of the nation’s economy is linked, either directly or indirectly, to the food and agriculture sectors, supporting more than 45 million jobs and trillions in wages. An experienced mayor, governor and two-term agriculture secretary in a previous administration, Mr. Vilsack has the knowledge and understanding to hit the ground running and make immediate progress on pressing issues facing food, agriculture and the rural economy,” says Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA). “He has seen firsthand the pandemic’s impact on health and jobs, and we’re hopeful that with his guidance, we can continue to protect our essential workforce so they can feed our nation.”

To that point, Dykes adds that the nation’s food security will be Vilsack’s top priority upon taking office, and IDFA offers its partnership in finding creative ways to reduce hunger and improve access to nutritious foods including dairy.

“On behalf of the men and women working across the dairy industry — from farms to processing facilities to retail and distribution hubs — IDFA looks forward to working with Mr. Vilsack and his team to make dairy central to solutions,” Dykes says. “Together, we can enhance economic progress for food-producing communities and strengthen export opportunities, unleash innovation to safeguard our food and advance nutrition solutions, and create a more sustainable footprint for our food and agriculture sector.”

Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), says all of U.S. agriculture has an effective advocate in Vilsack, and the nation will be well-served by his return to public service leading USDA.

“We in the dairy community who have had the opportunity to work with him have seen firsthand his deep passion for rural America and his commitment to advancing agriculture and the communities it serves, from farmers and food sector workers to the consumers and businesses that depend on USDA to meet their needs every day, in every way,” Mulhern says. “That’s especially important in light of today’s pressing challenges, which include a farm economy battered by the COVID-19 pandemic; climate change, sustainability and the environment; nutrition and food insecurity; international trade policies that limit U.S. exports; labor shortages that are worsening with time; and the legacies of societal injustice that need to be addressed. Tom Vilsack’s experience and leadership will be crucial to meeting these challenges, and more. We congratulate him on his confirmation and pledge to do our best to contribute to his successful service.”

Thomas Gallagher, CEO of Dairy Management Inc. (DMI), USDEC’s parent organization, congratulated Vilsack on his appointment and thanked him for the work he has done for America’s dairy farmers through his leadership at USDEC.

“The secretary has been a driving force in continuing to create viable global markets for dairy through USDEC, and he will continue to be a strong voice for agriculture in his role at USDA,” Gallagher says.

National Farmers Union President Rob Larew says no one is more qualified to lead USDA than Vilsack.

“After serving as secretary of agriculture for eight years, he knows the agency inside and out, giving him the insight he needs to get to work right away on behalf of family farmers, rural communities and hungry Americans,” Larew says. “That’s a good thing, because there is no shortage of things to get done; most immediately, he must prioritize pandemic recovery. But the pandemic is hardly the only problem beleaguering agriculture; the industry is also grappling with a rapidly changing climate, unchecked corporate power, persistent oversupply, institutional racism, an aging population and insufficient local processing infrastructure. During his second stint as secretary of agriculture, Tom Vilsack can’t let any of these issues fall by the wayside. We look forward to working with him towards lasting, meaningful reforms that will secure a bright and prosperous future for family farmers and their communities.”

In other Cabinet news, President Biden’s nominee for U.S. Trade Representative (USTR) Katherine Tai this week gave remarks before the Senate Finance Committee outlining her vision for leading the agency in pursuit of trade policies that will benefit all Americans and help jumpstart the economy. Tai also detailed her commitment to re-engaging international institutions to address common threats like climate change, the COVID pandemic and the global economic downturn.

“The chance to serve the American people, fight on their behalf and represent them on the world stage once again will be the greatest honor of my life,” Tai says. “It’s a privilege I’ve experienced before at the Office of the United States Trade Representative — and a responsibility that, if confirmed, I look forward to embracing once again. I thank President Biden for providing me with this opportunity.”

Dairy industry stakeholders have voiced support for Tai’s confirmation as well.

Also this week, the Center for Science in the Public Interest (CSPI) urged Congress to confirm California Attorney General Xavier Becerra as secretary of the U.S. Department of Health and Human Services (HHS). CSPI President Peter G. Lurie notes while in Congress, Becerra was a principal legislative architect of the Affordable Care Act, and as California Attorney General, he has led its defense in court.

“Becerra understands the role that prevention and wellness play in promoting health, he respects the role of science and scientists in setting health policies, and he is committed to ending health disparities and ensuring that health care is delivered equitably in this country,” Lurie says. “We urge the Senate to confirm him without delay.”

Meanwhile, progress continues on passage of a $1.9 trillion stimulus package in Congress. News reports say the U.S. House is planning to pass the measure today, while the Senate aims to approve the package by March 14, when key unemployment programs expire.

IDFA notes that the package would allocate $3.6 billion in funding for USDA food purchases and donations, measures to protect essential workers from COVID-19, and other loans and grants to bolster food industry resiliency. It also would expand Pandemic EBT, which has provided meal replacements for children who are attending school virtually due to the pandemic, and expand enrollment in the Special Supplemental Nutrition Program for Women, Infants and Children.

“While COVID-19 cases have slowed in recent weeks, millions of Americans continue to face hunger and nutrition insecurity amidst the economic fallout of the pandemic,” Dykes says. “This legislation will ensure our nation’s most vulnerable have access to a variety of fresh, wholesome, nutritious dairy products, amidst the pandemic.”

Mulhern says NMPF also is grateful to Congress for working to enact additional COVID-19 stimulus legislation as the pending bill includes critical additional agriculture and nutrition support intended to help farmers, rural communities and food-insecure households throughout the nation.

“Throughout the COVID-19 pandemic, the federal government’s strong response has proven invaluable to dairy producers as they keep working, day in and day out, to sustainably provide families here at home and abroad with an abundant supply of nutritious dairy products,” Mulhern says. “However, while the availability of a vaccine is cause for hope, difficult months remain ahead. (This bill) will better position all parts of the country to recover from the stresses of the pandemic and strengthen our communities for years to come.”

CMN


Report: U.S. dairy will benefit from weaker U.S. dollar in 2021

February 26, 2021

DENVER — U.S. dairy exports, among other commodities, could see more opportunities in 2021 as the value of the U.S. dollar continues to be low compared to competitors’ currencies, according to a new report from CoBank’s Knowledge Exchange.

The value of the U.S. dollar has substantially weakened since March 2020 and is expected to experience modest deflation in 2021, CoBank says, noting that a weaker dollar generally makes U.S. agricultural products more competitive on the global export market.

CoBank’s trade-weighted indices for selected agricultural sectors reflect a currency environment that is expected to be positive for some agricultural exports in the year ahead, but is negative for others, the report notes. While U.S. agricultural exports grew in 2020, commodities like grain, animal protein and cotton experienced a modest currency headwind from ag exporting regions like South America and Eastern
Europe, which is expected to continue in 2021.

Meanwhile, U.S. dairy products look to enjoy a more favorable foreign exchange outlook from currency strength in New Zealand and the European Union (EU), and U.S. tree nut exports are expected to see tailwinds from stronger currencies in Australia and Iran.

In its outlook on the dairy sector, the report notes that with the EU and New Zealand being such dominant players in global dairy trade, the euro and New Zealand dollar factor heavily in the trade-weighted currency index for dairy. Combined, the EU and New Zealand comprise 58% of world cheese exports, 51% of nonfat dry milk (NDM) exports and 77% of butter exports. By comparison, the United States claims 17% of the world cheese trade, 31% of NDM exports and only 4% of butter exports.

Both the euro and New Zealand dollar are projected to be stronger against the U.S. dollar in 2021, giving U.S. dairy a tailwind into the global export market, especially into key markets like South Korea, Japan and Australia for cheese; Southeast Asia for NDM; and South Korea for butter. As the United States is a net importer of butter — particularly from Ireland — a stronger euro will raise the cost to bring butter into the United States and potentially support domestic demand for U.S. butter, the report adds.

To read the full report, visit www.cobank.com/knowledge-exchange.

CMN


January U.S. milk production increases from one year earlier

February 26, 2021

WASHINGTON — Milk production in the 24 major milk-producing states in January totaled 18.30 billion pounds, up 1.8% from January 2020, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). For the entire United States, January milk production was estimated at 19.17 billion pounds, up 1.6% from January 2020. (All figures are rounded. Please see CMN’s Milk Production chart.)

December’s revised production for the 24 major states totaled 18.01 billion pounds, a decrease of 74 million pounds or 0.4% from last month’s preliminary production estimate.

January production per cow in the 24 major states averaged 2,049 pounds, up 15 pounds from January 2020 and up 30 pounds from a month earlier. For the entire United States, production per cow in January is estimated at 2,029 pounds, 13 pounds higher than January 2020 and 32 pounds higher than December 2020.

NASS reports the number of milk cows on farms in the 24 major states was 8.93 million head in January, up 92,000 head from January 2020 and up 6,000 head from December 2020. In the entire United States, there were an estimated 9.45 million milk cows in January, 85,000 cows more than January 2020 and 8,000 more than in December 2020.

California led the nation’s milk production in January with 3.51 billion pounds of milk, down 0.7% from January 2020. Wisconsin followed with 2.66 billion pounds of milk produced in January, up 3.1% from January 2020.

CMN



Kingston Creamery continues tradition of quality-crafted Amish Blue cheese

CAMBRIA, Wis. — A new cheese brand, Kingston Creamery, has deep roots in the Kingston Amish community near the Cambria area that is about an hour north of Madison, Wisconsin.

When the Kingston Amish community was established in 1978, there were five dairy plants within a 20-mile radius that received canned milk and provided support for the Amish traditions of hand milking. As dairy farming in Wisconsin and across the nation became more mechanized, local creameries made the decision to no longer accept canned milk, jeopardizing the dairy traditions of the state’s Amish farmers.

Seeking an opportunity to preserve and maintain their way of life and livelihoods as dairy farmers, the Kingston Amish made the decision to build and independently operate a creamery in the heart of their community. They broke ground in June 1984 at the current site in Cambria, and from the very start, Blue cheese was made from milk exclusively supplied by the Kingston Amish community.

For six years, the Blue cheese made at this factory was sold exclusively for industrial use. In 1992, recognizing an opportunity to expand sales to retail, the creamery formed a partnership with Dan Carter Inc. (DCI). The Salemville brand was developed and labels were designed for retail distribution, launched mainly in Kroger stores.

“It’s astounding to recognize that the Kingston Amish, without the benefits of modern technology, have managed to develop, maintain and operate food safety systems at the Cambria plant that meet and exceed the requirements of industry and regulatory agencies,” says Nelson Schrock, operations manager at the plant. “It’s a testament to our dedication to excellence, patience and cooperation.”

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Extreme conditions challenge Texas and U.S. dairy farmers

February 19, 2021

By Rena Archwamety

WACO, Texas — Winter storms, subzero temperatures and power outages are among the challenges dairy and other ag sectors across the country have been facing these last two weeks. Southern states accustomed to more mild winters have experienced devastating severe winter storms, and over the past week, President Biden approved emergency declarations in both Oklahoma and Texas to help coordinate disaster relief.

“For the first time, 254 counties — all the counties in Texas — are covered under a winter advisory at the same time; from the top of the Texas panhandle to the Rio Grande Valley, east to west, has been covered by the storm,” says Gary Joiner, director of communications, Texas Farm Bureau.

On top of challenges of keeping livestock warm, fed and watered in the cold, statewide power outages in Texas related to the extreme winter weather and shortages on the state’s power grid also have impacted dairy processors. The dairy sector has not been exempt from rolling power outages across the state.

“We have a facility in Littlefield, Texas, that had an interruption in its natural gas which prevented the plant from operating,” Joiner says. “Producers are having to dispose of their milk. Hopefully that’s short term and additional natural gas will be made available.”

On Tuesday, Texas Agriculture Commissioner Sid Miller issued a “red alert” about the statewide impact of the winter storm on agriculture and the food supply chain. Farmers and ranchers across the state are seeing devastating effects from the cold weather on livestock, feed and agriculture products, he says.

“I’m getting calls from farmers and ranchers across the state reporting that the interruptions in electricity and natural gas are having a devastating effect on their operations,” Miller reports. “In just one example, dairy operations are dumping $8 million worth of milk down the drains every day because the plants that process that milk don’t have power. Grocery stores are already unable to get shipments of dairy products. Store shelves are already empty. We’re looking at a food supply chain problem like we’ve never seen before, even with COVID-19.”

Miller has called on Texas Gov. Greg Abbott to designate agriculture producers and processors as critical infrastructure that must be provided gas and electricity to continue operations.

“Gov. Abbott must make ag industries a priority for electricity and gas just like hospitals, first responders, fire and police. I salute our hospital workers and first responders as they deal with this natural disaster, but they won’t have food to eat if our farmers are left without power,” Miller says.

In this week’s Fluid Milk and Cream reports, USDA’s Dairy Market News notes that Texas was especially hard-hit, while hauling issues were reported in all Central U.S. regions, as well as in the Pacific Northwest and part of the Southeast. Processing disruptions occurred across U.S. regions as well.

Of Texas, Dairy Market News notes, “Milk dumping reports came early and often. Milk and cream loads that could be salvaged, as balancing plants/end use options are/were limited due to power outages or short to zero staff, were dispersed elsewhere. Even some Upper Midwestern butter manufacturers reported taking on cream just to assist in clearing some of the newly created excess.”

In northern Wisconsin, Dairy Market News says reported temperatures at morning milking have been as low as 40 degrees below zero.

“Ripple effects of the weather system have already been reported, but contacts simply say the damage is far from over, and it will take a long time before it is all tallied,” Dairy Market News says of the Central region.

In the Pacific Northwest, Dairy Market News reports farmers and dairy processors this week continue to grapple with the effects from a strong winter storm over the weekend. Some farmers had to dispose of milk when trucks could not reach the farm. Power outages in this region also stretched into this week.

“Heavy snows, freezing rain and power outages disrupted milk transportation and processing,” Dairy Market News says. “With the loss of power, several manufacturers were unable to process the milk on hand and had to discard milk supplies. Other processors worked with skeleton crews. Bottling demand increased ahead of the storm.”

USDA has posted several resources to assist farmers, ranchers and communities affected by the recent winter storms. Joiner says the Texas Farm Bureau also has been helping the state’s farmers network, putting them in touch with those who can assist them in their local communities and communicating through social media pages and cell phones.

“It’s amazing, if you look at the seven-day forecast, it will be in the 60s and 70s,” Joiner says. “But the real estimates of the damage and impact of the storms, we may not know until the water valves are turned back on and everything is repaired.”

CMN


Cheese volatility persists with ample stocks, demand shifts

February 19, 2021

By Alyssa Mitchell

MADISON, Wis. — The volatility in the cheese spot market seen over much of 2020 continues as manufacturers grapple with ample stocks and demand shifts between retail and foodservice due to the ongoing COVID-19 pandemic.

Dairy market analysts say government intervention continues to shake up spot markets, with the industry in the midst of a food box program that is exercising optional extensions through March and potentially through April.
Brian Fletcher, vice president of commercial services at ever.ag, Chicago, notes additional money is allocated for food purchases in the pending stimulus deal working its way through Congress.

“The new stimulus deal has the ability to allocate funds through the end of the third quarter, so the government is setting a path that there will be continued involvement. On top of that, we have a changing landscape of the pandemic. You can paint lots of different pictures on how the pandemic plays out, but there is a potential that we return to or at least shift to ‘normalcy’ at a time that the government involvement is still high,” Fletcher says. “I think the intersection of each of those has the potential to impact the market over the next several months. So, as long as we are in this pandemic state, I think the dynamic between normal consumption outlets and the government will be very fluid.”

Spot cheese prices have moved around the $1.50-per-pound price point over the last week, settling at $1.4125 per pound for barrels and $1.5375 for blocks today.

Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle, says that with current stock levels, cow numbers and milk production increases, the $1.50 cheese price tag makes sense.

However, a new round of stimulus on top of remaining money to be spent from the December 2020 stimulus could provide sufficient market support and an opportunity to lift prices, Dorland adds.

“For now, markets will wrestle with those two extremes — that suggests more volatility,” she says.

Mike McCully, owner of The McCully Group LLC, Granger, Indiana, notes 2021 has started with a tighter global dairy market but a more bearish situation in the United States.

“The demand outlook is still uncertain, but a post-COVID world gets closer every day. This should help dairy demand recover by mid-year, but not fully,” McCully says.

He notes there are pockets of solid demand, particularly Southeast Asia and China, which, when combined with reduced milk supplies, have pushed Global Dairy Trade (GDT) prices up to multiyear highs.

“While Chinese milk production is growing, the high price of milk encourages continued imports of milk powders and whey products. This dynamic will be a key to how dairy markets evolve throughout the year,” McCully says.

Fletcher notes current U.S. spot cheese prices are at a discount to international prices, which is likely to boost export demand.

“I believe cheese prices around that $1.50-per-pound area are on the lower tier of prices we will see the rest of the quarter, if not the rest of the year,” he says. “At that price, compared to Europe and New Zealand, we are at a 30-40 cent discount, which makes me believe we are likely competitively exporting for the time being, at least on a spot price basis. However, I would imagine the price margins will narrow as we move forward in time.”

Chicago Mercantile Exchange (CME) cheese futures prices show an uptick from current spot levels, though Fletcher says the futures prices are more in line with international prices.

“There are several elements impacting the forward curve. The current feed cost situation for the U.S. dairy farm is significantly higher than this time last year. Without a corresponding price increase on the milk side, we will likely see the feed cost situation put a damper on milk production growth the second half of this year,” he says. “Another element is the idea of U.S. exports being competitive moving forward due to competitive spot and forward prices relative to competing regions. Lastly, a return to increased capacity on the foodservice sector could also cause the supply chain to refill pipelines. Any of those elements coming together at the same time can cause price spikes higher.”

While foodservice demand has ebbed and flowed during the pandemic, current cold weather throughout much of the United States likely is taking a toll, Dorland says.

“That said, in parts of the country where Grubhub and Uber Eats can get food delivered, it may help lift demand that in years past may have suffered from the weather. January was the best performance in a year. February is typically a cold weather month, so on a year-to-year basis some of the reduced consumption is factored in — but the frigid temperatures in Texas and throughout the South may slow demand.” (See related article above.)

McCully says he expects cheese prices, and dairy prices in general, will be higher in the second half of the year due to several factors.

“Hopefully, we are close to or in a post-COVID world where foodservice demand is recovering,” he says. “However, this also will mean retail sales will likely drop back to pre-COVID levels at some point, so the mix shift will be important. In addition, with higher feed costs and lower milk prices, farm margins are getting squeezed, and we are seeing the first signs of a small contraction in the dairy herd. If that continues, milk growth will slow by mid-year. A general recovery in the global economy will also help dairy demand, and a more inflationary commodity environment will boost dairy as well.”

CMN


USDA lowers outlook for dairy exports, raises import outlook

February 19, 2021

WASHINGTON — In its latest Outlook for U.S. Agricultural Trade, USDA projects U.S. agricultural exports in fiscal year (FY) 2021 will reach $157.0 billion, up $5.0 billion from its November forecast, driven by higher oilseed and grain export forecasts. Exports to China are raised $4.5 billion from the November forecast to a record $31.5 billion due to strong first quarter shipments and surging sales, most notably of corn. China is forecast to remain the largest U.S. agricultural market in FY 2021, followed by Canada and Mexico.

The outlook for U.S. dairy product exports for FY 2021 is lowered to $6.5 billion, down from the November forecast of $6.6 billion, as higher export volumes of skim milk powder, butter and whey are offset by lower unit values, USDA says.

Meanwhile, USDA has raised its projection of FY 2021 agricultural imports to $137.5 billion, up $500 million from November’s forecast and $4.3 billion above the total value of imports in FY 2020. This brings the projected 2021 trade balance to $19.5 billion, up from $15.0 billion in November’s projection and $2.5 billion in FY 2020.

The dairy import outlook is raised $100 million to $3.7 billion due to higher expected unit values of a number of products. USDA’s projection for cheese imports also is raised $100 million from November to $1.3 billion.

In its economic outlook, USDA says the global COVID-19 pandemic remains the defining variable impacting
economic growth around the world. The success of both economic relief programs and vaccination deployments is expected to shape the growth rates and extent of recovery in FY 2021. Several new variants of the virus pose concerns for prolonged economic setbacks, but widespread distribution of vaccines has the potential to buffer against further economic disruption, USDA says. Global gross domestic product is projected to grow 5.5% in FY 2021.

For the full outlook, visit https://www.ers.usda.gov/publications/pub-details/?pubid=100578.

CMN


Biden administration addresses trade issues with China and EU

February 12, 2021

WASHINGTON — President Biden this week spoke with President Xi Jinping of China, addressing economic practices, the COVID-19 pandemic, human rights and other issues.

In a readout of Wednesday’s call, the White House notes that the president shared his greetings and well wishes with the Chinese people for the Lunar New Year. He affirmed his priorities of protecting the American people’s security, prosperity, health and way of life, and preserving a free and open Indo-Pacific. Biden also underscored his fundamental concerns about Beijing’s coercive and unfair economic practices, crackdown in Hong Kong, human rights abuses in Xinjiang and increasingly assertive actions in the region, including toward Taiwan.

The two leaders also exchanged views on countering the COVID-19 pandemic and the shared challenges of global health security, climate change and preventing weapons proliferation. Biden committed to pursuing practical, results-oriented engagements when they advance the interests of the American people and America’s allies, the readout says.

China viewed the discussion positively, saying the Xi-Biden call sends “positive signals to the world,” according to commentary from Xinhua, China’s state-run news source. Xinhua says over the past few years, the China-U.S. relationship has encountered “the most serious difficulties since the establishment of bilateral diplomatic ties.” According to Xinhua, Biden said Washington is prepared to have candid and constructive dialogue with China in the spirit of mutual respect and to improve mutual understanding.

“Those agreements bear positive significance for Beijing and Washington to dispel misunderstandings and engage in normal dialogue,” Xinhua says. “With the inauguration of the Biden administration, returning the China-U.S. relationship to the right track has become a common aspiration of the international community.”

Meanwhile, the Office of the U.S. Trade Representative (USTR) announced in today’s Federal Register that it has agreed together with the U.S. aircraft industry that at this time it will not revise any of the tariffs related to the dispute with the European Union (EU) over large civil aircraft subsidies. The most recent revision to the list of goods subject to the total $7.5 billion in Section 301 tariffs against the EU, approved by the World Trade Organization, was effective Jan. 12, 2021. In light of the recent revision, USTR says it is unnecessary at this time to revise the action and will continue to consider the action taken in this investigation.

Imported cheeses from the EU are among the products subject to these tariffs, and the Cheese Importers Association of America has urged an end to these tariffs, saying they are causing severe economic harm to U.S. cheese importers and others in the supply chain (see “Cheese Importers Association urges end to U.S.-EU tariff dispute” in the Jan. 22, 2021, issue of Cheese Market News).

The Office of the USTR also this week announced several key staff appointments, including: Assistant USTR for Intergovernmental Affairs Sirat K. Attapit; Assistant USTR for Congressional Affairs Jan Beukelman; Assistant USTR for Media and Public Affairs Adam Hodge; Chief of Staff Nora Todd; Deputy Chief of Staff Ginna Lance; Executive Secretary Shantanu Tata; General Counsel Greta Peisch; Counselor Brad Steser; Director of Congressional Affairs Samuel Negatu; Digital Media Director Maíra Ferranti Corrêa; Special Assistant to the USTR Ethan Holmes; and senior advisors Jamilla Thompson and Mark Wu.

Biden’s nominee for USTR, Katherine Tai, has yet to be confirmed. In late January, more than 100 agriculture industry organizations, including many in the dairy industry, signed a letter to U.S. Senate Committee leaders to encourage her confirmation.

In other world trade news, the United Kingdom (UK) has formally applied to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which plans to start formal negotiations this year.

UK International Trade Secretary Liz Truss spoke with ministers in Japan and New Zealand on Feb. 1 about the request, which comes one year since the UK left the EU and became an independent trading nation. According to the UK Department for International Trade, joining the partnership will cut tariffs for UK industries such as its food and drink and auto sectors while also creating new opportunities for modern industries like tech and services.

“Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU and deepen our ties with some of the fastest-growing markets in the world,” Truss says.

New Zealand’s Trade and Export Growth Minister Damien O’Connor welcomed the UK’s request to join, noting that under CPTPP guidelines, the next step will be for all CPTPP members to discuss the request and establish a working group to negotiate UK’s accession to the agreement.

The CPTPP is an 11-member trade agreement involving New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore and Vietnam. It was created by countries that were involved in the now-defunct Trans Pacific Partnership (TPP) after former President Trump removed the United States from the TPP upon taking office in 2016.

CMN


Midwest Dairy, Pizza Ranch partner on new breakfast pizza

February 12, 2021

By Rena Archwamety

ORANGE CITY, Iowa — Tuesday was National Pizza Day, and among the options available to help celebrate the occasion this year was a new frozen, ready-to-bake breakfast pizza recently introduced by Pizza Ranch in partnership with Midwest Dairy.

The “Bake @ Home” line of breakfast pizzas officially launched in December and includes three varieties: Sausage Gravy; Bacon Sausage; and Sausage, Pepper & Onions. All three varieties are made on a thin crust and topped with Pizza Ranch’s proprietary cheese blend of Mozzarella and Muenster that it uses on its traditional pizzas.

Midwest Dairy, the regional checkoff organization representing 10 Midwestern states, assisted by providing research on breakfast pizzas, supporting digital advertising and social media efforts, and helping Pizza Ranch with an internal sales incentive contest with prizes for restaurants that sold the most breakfast pizzas.

Earlier in 2020, Midwest Dairy and Pizza Ranch had partnered for June Dairy Month to offer free extra cheese for online pizza orders. This resulted in the purchase of more than 100,000 incremental pounds of cheese during that month. It also helped Pizza Ranch, known for its sit-down, buffet-style restaurants, draw attention to online ordering and delivery at a time when many of its restaurants’ dining rooms were closed.

“A lot of their business hadn’t been online, and they had to switch. We also appreciated them putting the focus on farmers during this time,” says Molly Pelzer, CEO, Midwest Dairy. “We had worked with them and asked, ‘What do we do next?’ They said they got this breakfast idea concept tested, and early results were very promising.”

Pizza Ranch previously had included specialty breakfast pizzas on its lunch and dinner buffet and sold them as catering options, but it was a very small product offering. The company never had officially operated in the frozen pizza or breakfast space.

“It was a niche opportunity being underserved,” says Jon Moss, senior vice president and chief brand officer, Pizza Ranch. “It was purely incremental — no cannibalization to lunch or dinner. Guests would come into our stores and buy a frozen breakfast pizza to bake at home and have on the weekend or in the morning.”

Moss says Pizza Ranch already had started to test the frozen breakfast pizza in eight markets, where it was doing well.

“Midwest Dairy provided us with good research on the growing breakfast category and how breakfast pizza was really growing in popularity, especially in the Midwest,” he says. “When we had the opportunity to partner again in 2020, we started talking about breakfast pizza. It provided incremental sales for us, and more cheese usage for dairy farmers.”

Pizza Ranch ultimately launched its Bake @ Home breakfast pizza sooner than expected across its 205 locations in 15 states. The chain offered a December buy-one-get-one promotion, where guests could take home two frozen breakfast pizzas for $7.99. It was just in time for the holidays, when customers had extra need for breakfast items.

“It went over tremendously. We met over half our year’s goal just in December. We did a lot of ‘scrambling’ in December just to keep up,” Moss says.

He adds, “We had so many guests who decided, ‘That’s what I’m going to do for Christmas morning, and this is going to be a new tradition.’ That’s a day when we’re 100% closed across the chain. People were eating Pizza Ranch pizza on a day we’re not even open!”

Bake @ Home breakfast pizza is now a permanent offering at all Pizza Ranch restaurants and can be either picked up at the store or ordered for delivery. Moss notes that social media response to the breakfast pizzas is “really like nothing we’ve ever seen before,” and he hopes this success also will help drive awareness of the company’s breakfast pizza offerings through catering at breakfast meetings, concession stands or other events. He also says Pizza Ranch plans to continue its partnership with the dairy industry.

“With Midwest Dairy, we’re just in dialogue with both sides, wanting to continue to partner in the future,” he says. “What it will be, I don’t know, but both sides are excited to continue to work together.”

CMN


USDA raises milk production, lowers cheese price forecast

February 12, 2021

WASHINGTON — USDA raised its 2021 milk production forecast to 227.4 billion pounds, primarily on higher dairy cow numbers, in its latest World Agricultural Supply and Demand Estimates report released this week. The February forecast is up 700 million pounds from last month’s forecast.

The 2021 fat basis import forecast is raised on higher expected imports of cheese and butterfat products, while exports are raised on higher shipments of butterfat, USDA says. On a skim-solids basis, the import forecast is unchanged while the export forecast is raised, reflecting expectations of strong international demand.

Annual 2021 product price forecasts for cheese and butter are lowered from the previous month on current prices, increased production and larger stocks. USDA now estimates cheese will average $1.695 per pound, down from $1.740 forecast last month, and butter will average $1.455, down from $1.605.

Nonfat dry milk (NDM) and whey price forecasts are raised from last month on firm demand. NDM is projected to average $1.125 per pound, up from $1.100 forecast last month, while dry whey is estimated at $0.480, up from $0.450.

The Class III price is reduced on the lower cheese price forecast to $16.60 per hundredweight, down from $16.90 forecast last month, USDA says. The Class IV price also is reduced from $14.10 last month to $13.70, reflecting a lower butter price forecast. The 2021 all milk price forecast is reduced to $17.15, down from $17.65 forecast last month.

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Today's Cheese Spot Trading
Feb. 26, 2021


Barrels: $1.4200 (-2 3/4)
Blocks: $1.6175 (-4 1/4)


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Cheese Production
U.S. Total Dec.
1.128 bil. lbs.


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

Guest Columnist

Weak commercial demand key driver of bearish cheese market

Nate Donnay, StoneX

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