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USDA: U.S. dairy export value
soars over 10-year period

December 2, 2016

WASHINGTON — A growing demand for dairy worldwide as well as changing policies of the United States and its trading partners have supported rapid growth in U.S. dairy exports since the early 2000s, according to a recently-published report from USDA’s Economic Research Service.

The report, “Growth of U.S. Dairy Exports,” notes that growth in the value of U.S. dairy product exports more than quadrupled from 2004 to 2014. The United States, which previously focused primarily on domestic demand, became the world’s third-largest dairy product exporter behind New Zealand and the European Union.

USDA notes that several factors contributed to the rapid increase in U.S. dairy exports. Income growth in East Asia, Southeast Asia, Latin America and other regions led to increased dairy consumption, facilitated by rising imports. Free trade agreements also provided the United States with greater access to world markets, especially to Mexico through the North American Free Trade Agreement. China’s market-based reforms have opened up what is now one of the world’s largest markets for dairy product imports, and both the European Union (EU) and United States have reduced domestic support and export subsidies for dairy products in recent years, further opening world markets.

Mexico consistently has been the leading export destination for the United States, the report says. The growth in value of U.S. dairy exports to Mexico was the greatest of any major export destination, increasing $787 million from 2004 to 2015. Canada was the second-leading destination for U.S. exports in 2015. Increases in dairy exports to China and South Korea each grew by about sixfold over this period, while dairy exports to Japan and the Philippines also increased significantly, USDA says.

While increasing demand from foreign countries has been important to the growth of U.S. dairy exports, USDA notes that structural changes in domestic supply conditions also have played an important role. From 2004 to 2015, U.S. milk production grew from 170.8 billion pounds to 208.6 billion pounds, driven by improved milk yields and larger, more efficient dairy farms.

Since 2003, prices of U.S. domestic dairy products and export prices in Oceania and the EU have tended to converge and become more correlated, reflecting changes in government policies, USDA says. The improved price competitiveness of U.S. dairy products, greater market access, reductions in U.S. and EU support measures, and growing world demand have led to rapid growth in U.S. dairy product exports.

However, the value of U.S. dairy exports fell in 2015 to $4.9 billion, a 28-percent decrease from 2014, as global conditions changed. Growth in global demand for dairy products, especially from China, had slowed. In August 2014, Russia imposed a ban on dairy imports from several countries, driving the EU to export to alternative markets in competition with the United States. In April 2015, the EU discontinued its milk supply quotas and EU dairy farmers increased their milk production, boosting exports and crowding out dairy product imports from the United States. The value of the U.S. dollar also was strong relative to other currencies, causing U.S. exports to be less attractive.

The United States produces and exports a large variety of dairy products, though four categories — cheese, skim milk powder, whey products and lactose — accounted for about 80 percent of the total value of dairy exports in 2015. In terms of value, cheese was the top U.S.-exported dairy product in 2015, growing from $248 million in 2004 (valued in 2015 dollars) to $1.388 billion in 2015.

USDA projects U.S. milk production to grow about 23 percent from 2015-2025. Continued expansion of U.S. milk production and strong international demand are expected to allow U.S. dairy products to remain price competitive on the global market, USDA predicts.

“Future growth in dairy trade is contingent on the ability of U.S. producers to remain cost competitive with foreign suppliers while increasing milk supply and encouraging favorable government policies around the globe,” the report says, adding that new trade agreements may play an important role in the future evolution of U.S. dairy trade.

In a May 2016 report, the U.S. International Trade Commission estimated that if the Trans Pacific Partnership (TPP) were to become effective in 2017, by 2032 the value of U.S. dairy product exports would be 18.0 percent greater than they would be if TPP were not enacted. However, U.S. President-elect Donald Trump has promised to pull out of the TPP when he takes office.

The USDA report also says U.S. dairy trade could increase under the Transatlantic Trade and Investment Partnership (TTIP) currently under negotiation between the United States and EU. In 2010, tariffs applied by the United States to EU dairy imports averaged 20.2 percent, while tariffs applied by the EU to U.S. dairy imports were much higher at 42.0 percent.

“While benefits for U.S. dairy exports would vary based on a final agreement, the TTIP would impact global trade by linking two of the world’s largest traders of dairy products,” USDA says.

CMN

 


Milk Source expands east,
purchases Lamagna Cheese

December 2, 2016

By Alyssa Mitchell

KAUKAUNA, Wis. — Milk Source LLC recently finalized the acquisition of Lamagna Cheese Co. in Verona, Pennsylvania.

Milk Source, based in Kaukauna, Wisconsin, was co-founded in 1999 by Jim Ostrom, John Vosters and Todd Willer — each from multi-generational Wisconsin farm families — and traces its roots back to 1965 when a small 30-cow dairy farm was started in Freedom, Wisconsin, by Vosters’s parents.

Milk Source operates dairies in Wisconsin and Michigan, producing milk that is used to make cheese, butter and other dairy products. In addition, Milk Source also has a Wisconsin calf farm and a heifer-raising facility and a business in Kansas, according to Jim Ostrom, partner and CEO.

With this latest acquisition, the company now is expanding its operations further east, says Ostrom, noting it is the company’s first acquisition in Pennsylvania.

Lamagna is a family-owned Italian cheese company which learned the art of cheesemaking in Italy before bringing those skills to the United States in 1928. The company produces Lamagna brand Ricotta, Fresh Mozzarella, shredded and Feta cheeses for the dairy industry as well as sliced Mozzarella and Provolone for the deli sector.

Ostrom says the like-minded cultures of the two family-owned operations and Lamagna’s size make the acquisition a great fit for Milk Source.

“We’re excited to continue to invest in the dairy industry and to now have a great brand of Italian products under our umbrella,” he says, adding that the marketplace access to the East Coast is a great opportunity for Milk Source.

Ostrom notes Lamagna cheese will continue to operate in Pennsylvania, and the employees and family members are staying on as part of the acquisition. Milk Source also plans to hire additional employees.

“We’re really enthusiastic about this brand and the family tradition of Lamagna,” he says, adding that as Milk Source continues to grow, the company hopes to make further acquisitions in the future.

CMN

 


Lanco Dairy now operating
in former Saputo facility

December 2, 2016

By Stephanie Awe

HANCOCK, Md. — Lanco-Pennland Quality Milk Producers, a Hagerstown, Maryland-based cooperative, started operations in a plant this past summer in Hancock, Maryland.

The cooperative purchased the plant in 2015 following the plant’s closure in 2014. The facility, previously owned by Saputo, is now operating under the name Lanco Dairy LLC, and Pennland Pure is the brand the cooperative will be developing, according to Lanco-Pennland.

When Saputo closed the plant, the cooperative and other regional handlers faced challenges with where to send milk. Because of a shortage of manufacturing facilities on the East Coast, a lot of milk was dumped, according to Kurt Williams, general manager, Lanco-Pennland.

Because of this, the cooperative purchased the plant to add capacity to the area, Williams says. The plant receives milk from Lanco-Pennland producers as well as other cooperatives in the area.

The cooperative has invested $25 million into the plant’s renovations, which include the addition of new equipment — such as silo capacity of 300,000 gallons and a cow water recovery system with UV treatment — as well as 5,000 square feet of new building space with an expanded packing area, Williams says.

In addition, the plant has added three cheese towers that will allow for production of hard cheeses, including Cheddar, Parmesan, Asiago and others, according to Williams. The cooperative aims to commission the cheese towers by the end of the year, he says.

The plant offers milk separation and condensing services and currently produces Mozzarella and Provolone cheeses.

Williams expects the plant will handle 1.2 million pounds of milk per day upon completion of the plant’s first phase of renovations, he adds.

Some cheeses will be going to pizza distributors and shredders along the Mid-Atlantic region, while some will be sent to converters and foodservice, Williams says.

The plant, which currently has 50 employees, expects to expand to about 100 employees. About 30 staff members who worked at the former Saputo plant are employed at the plant under its new name, according to the cooperative.

“I’m very grateful and appreciative of returning staff that worked for Saputo,” Williams says. “We were really able to hit the ground running with a team of employees.”

Williams says that, while the cooperative processes conventional milk, the plant is certified organic and will produce some organic products as well. He also says he hopes the plant will earn SQF certification in the first quarter of 2017. He adds he expects the plant will add additional vats and increase milk intake in 2018, going from 1.2 million pounds per day to 1.6 million pounds per day.

CMN


Product seized from Valley
Milk due to Salmonella

December 1, 2016

STRASBURG, Va. — FDA this week announced that the U.S. Marshals Service seized more than 4 million pounds of product produced by Valley Milk Products LLC, Strasburg, Virginia. The company is owned by the Maryland and Virginia Milk Producers Cooperative Association Inc., Reston, Virginia. The seized products include nonfat dry milk (NDM) powder and buttermilk powder packaged in 40- and 50-pound bags for further manufacturing, worth nearly $4 million.

The U.S. Department of Justice filed a complaint, on behalf of FDA, in the U.S. District Court for the Virginia Western District, alleging that the seized products are adulterated under the Federal Food, Drug and Cosmetic Act.

During an FDA inspection of Valley Milk from July to September 2016, FDA investigators observed poor sanitary practices and reviewed the company’s records, which showed positive results for Salmonella in the plant’s internal environmental and finished product samples, FDA says.

FDA investigators observed residues on internal parts of the processing equipment after it had been cleaned by the company and water dripping from the ceiling onto food manufacturing equipment. In addition, environmental swabs collected during the inspection confirmed the presence of Salmonella meleagridis on surfaces food came into contact with after being pasteurized, FDA says.

Throughout the investigation, FDA worked closely with the Virginia Department of Health and Virginia Department of Agriculture and Consumer Services.

“The FDA urged Valley Milk to conduct a voluntary recall of the implicated products,” says Melinda K. Plaisier, FDA’s associate commissioner for regulatory affairs. “The firm refused to recall and, as a result, we have had to intervene and seize this adulterated food to prevent it from reaching consumers who could be exposed to Salmonella from these products.”

FDA used a bacterial typing tool called whole genome sequencing (WGS) to link the samples collected in the facility over time, the agency notes. WGS technology can show the relationship among isolates of bacterial pathogens found in the environment, a food source or a person who became ill from consuming contaminated food. The sampling results indicate that the Salmonella strains from 2016 are nearly identical to Salmonella strains found at the company in 2010, 2011 and 2013, FDA says. These findings of Salmonella meleagridis at the company dating back several years demonstrate the existence of a persistent strain of Salmonella at this facility, the agency adds.

Valley Milk is not currently producing dry powdered milk products. No illnesses linked to Valley Milk products have been reported to date.

Amber Sheridan, corporate communications director for Maryland and Virginia Milk Producers Cooperative Association, says Valley Milk Products is working with FDA to resolve any concerns related to milk powder recently placed under hold by the government.

“Multiple tests conducted by third parties on the milk powder have been negative for the presence of Salmonella,” the cooperative says. “There are no reported illnesses related to this issue, and consumers and customers are not being asked to take any additional action. Out of an abundance of caution, we have not produced any dry milk powder at Valley Milk since the FDA initiated its inspection in late July. We are confident in the work of our farmers, our dairy industry and government regulators that allows us to continue to produce a safe and nutritious product for our customers.”

Sheridan adds that delivering safe and nutritious milk powder for use in food manufacturing is the top priority for Valley Milk Products.

“It is important to note that Valley Milk tests all finished product prior to sale,” she says. “All product sold has tested negative for Salmonella. In light of the FDA’s concerns, we have retested the powder in the warehouse and all tests are negative for Salmonella.”

She adds that the product on hold will remain on hold until there is an agreement reached by Valley Milk and FDA on what can be done with the powder.

CMN


Nasonville Dairy runs its first milk through new advanced Feta plant

By Kate Sander

MARSHFIELD, Wis. — After months of planning and construction, this month Nasonville Dairy begins making cheese at its new Feta plant.

The space reconfiguration and outfitting of new equipment at Nasonville Dairy’s main plant just outside of Marshfield, Wisconsin, will allow the company immediately to increase its Feta production — currently about 20 million pounds annually — by 10 percent. Further production increases will be possible in the future.

“Feta is where we see a lot of growth occurring,” says Ken Heiman, who manages the family-owned business along with his brothers Kelvin and Kim.

However, the biggest advantage of the new plant isn’t increased production but rather high quality, more consistent product, Ken Heiman says. With the company’s products sold nationally and internationally for use in foodservice and private label, consistency from one batch to the next is key. It’s what customers demand, he says.

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Industry eyes new strategies
amid truck driver shortages

November 25, 2016

By Alyssa Mitchell

MADISON, Wis. — Trucking is the No. 1 method for moving dairy products domestically, but projected truck driver shortages, regulatory issues and other factors could hamper the industry’s ability to efficiently move fresh product in the years ahead.

A truck driver shortage has been an ongoing issue in the transportation industry that is expected to worsen in the foreseeable future, says the American Trucking Associations (ATA), an advocate for the trucking industry since 1933.

According to ATA, a deficit of 48,000 drivers is expected as the new year approaches. If the current trend continues, the organization predicts that the shortage will surge to almost 175,000 by 2024.

While retiring truck drivers — the average age of a truck driver is 49 — are the factor behind nearly 45 percent of all new hires, ATA says this shortage is not simply one in which the numbers don’t add up. Instead, the quality of applicants is not up to par with minimum industry standards.

In addition, the industry is facing challenges attracting newer, younger drivers, says Rodrigo Suarez, economic analyst with ATA.

Suarez notes potential truck drivers must be 21 to get their commercial driver’s license, so a lot of 18-, 19- and 20-year-olds will turn to other industries such as construction or the U.S. Army where they can obtain employment right away. It also costs about $4,000-$6,000 to be trained and obtain a commercial driver’s license.

In addition, new hires tend to get longer routes and hauls, a lifestyle that many are not willing to consider, he says.

Meanwhile, ATA’s “U.S. Freight Transportation Forecast to 2027” projects growth in overall freight volumes.

“As we continue to see growth in the overall economy — particularly due to manufacturing, consumer spending and international trade — we will also see increases in the amount of freight moved in America’s trucks,” says Bob Costello, ATA chief economist.

Inventories are at an all-time high, Suarez adds. ATA projects that truckload volumes will grow 2 percent annually between 2016 and 2022 and 1.6 percent per year after that until 2027. Private carrier volumes are projected to grow 2.3 percent annually until 2022 and 2.1 percent each year over the next five years.

“We do know as long as our economy continues to grow, trucks will continue to move the vast majority of America’s goods, underscoring our industry’s critical role in our country’s future,” says Chris Spear, ATA president and CEO.

Hill Pratt, senior vice president of business development for Dairy.com, a provider of market intelligence and software-as-a-service solutions, notes that the driver challenge is about more than just the number of drivers available; it’s heavily influenced by two additional factors — new U.S. Department of Transportation (DOT) regulations and changing quality-of-life expectations.

“A new regime of DOT regulations which limits hours of service and requires electronic logs means that drivers simply cannot continue to put in the very extended hours they often have historically,” Pratt says. “And the newer generation of drivers simply doesn’t want to — nor do they have to.”

Pratt says while the transportation industry initially reacted to the onset of the driver shortage by throwing money at the problem in the form of higher wages and signing bonuses, many transporters have come to recognize that protecting quality of life — providing a decent benefits package, getting drivers home at night and ensuring they have time with their families — is a more effective retention tool.

“Drivers who don’t like the demands placed on them by one carrier/hauler can easily find a more comfortable and pleasant situation elsewhere,” he says. “Many smaller outfits are having trouble competing, meaning that driver retention remains a major ongoing challenge for them.”

Chris Hoeger, CEO of Swiss Valley Farms, Davenport, Iowa, has experienced this first hand. The company has its own truck fleet and also works with independent contractors.

“About a year-and-a-half ago, we started to see a dramatic drop in (freight) employees. We ended up doing a double-digit increase in salary to retain staff,” Hoeger says.

Still, truck driving is not a glamorous career to most, Hoeger adds. “The pay isn’t where it used to be, and we’re seeing an uptick in costs.”

He notes that regional transport is not as much of an issue, but for those traveling long distances, there is a gap in available drivers.

Hoeger says some of Swiss Valley’s product is distributed by rail from Chicago to ports for export, but most of the company’s cheese is distributed by truck on a regional basis for cut and wrap in Wisconsin and nearby areas.

However, with a large number of drivers set to retire over the next decade, “it’s getting tougher and tougher to find qualified drivers,” he adds.

Meanwhile, as some of Swiss Valley’s farms have grown, many are hauling their own milk to market, Hoeger says.

“I think more producers will do it on their own as costs continue to increase,” he says.

“I really think in the dairy industry we’re headed down the path that if a dairy farm isn’t shipping a load of milk as it’s available, they will have a hard time getting it to market,” he adds. “Maybe not today, but five or so years from now.”

Kelly Navin, manager of transportation services at WOW Logistics, Appleton, Wisconsin, says she has noticed capacity is tight for trucks going outbound in Wisconsin, and loads have increased significantly over the past couple of months.

Navin says one of the main challenges WOW faces with its customers is matching price points with carriers and haulers.

“Carriers know they are in high demand and can charge more,” she says. In addition, it’s helpful for customers to be flexible with hauling dates as there have been challenges in matching specific dates with available fleets, due to both freight availability and increasing dairy supplies, she adds.

Hoeger notes a positive is that the dairy industry has historically been able to adapt to market challenges like this.

“We’re always creative and innovative about addressing challenges,” he says.

He recommends that companies evaluate where their shipping channels are and the resources that are available and what the outlook is for the trucking company with which they’re working.

Navin reiterates that flexibility is helpful as well as building a reputation as being “carrier-friendly.”

“It helps if companies offer flexible shipping hours. Drivers want to keep moving,” she says. “Try to develop a reputation of being an easy company to do business with, and they will want to work with you and offer a better rate.”

Pratt says if the dairy industry could do one thing to help ensure that its transporters will be there to service the industry in the future, it would be to focus on eliminating delays.

A recent Dairy.com dairy hauler survey showed that while shortage of drivers, new regulatory requirements and increasing driver wages all are important challenges, the single-highest challenge was plant delays.

“Why? Because plant delays make every other challenge far worse,” he says.

Delays also can lead to detention charges, which are penalty charges against shippers or consignees for delaying carrier’s equipment beyond allowed time. Pratt recommends that shippers pay detention charges if they do not already.

“Not only does this help transporters compensate and retain drivers, but, while paying detention is painful, it is that pain that motivates shippers — and plants, particularly — to solve the problems that cause delays,” he says.

Pratt notes that dairy is inherently tougher on drivers than other industries.

“Cows insist on making milk every day of the year, and limited tank, silo and cold storage capacity, plus perishability/shelf life concerns, mean that product simply has to move regardless of weather, holidays or any other factor,” he says. “Drivers will almost certainly continue to be lured away to other sectors that are more accommodating to lifestyle.”

To help address this, Pratt recommends shippers evaluate their operations and make the process changes and investments to help transporters operate in a way that enables them to take care of their drivers and avoid unnecessary costs.

“Finally, it behooves shippers to treat their carriers as partners,” Pratt says. “Listen to them, take action and recognize that being good to haul for is a real competitive advantage in this era.”

Suarez says because there is no one cause of the driver shortage, there is no one solution. But driver pay increases, more at-home time, a lower driving age and better treatment by the supply chain all could help to ease the burden.

He notes that autonomous commercial trucks eventually could have a positive impact on the driver shortage, but the industry is still years away from truly driverless Class 8 trucks running on the highway as a normal part of the industry.

“Today, even though the technology is available, there are numerous limiting factors that prevent it from being used by carriers,” Suarez says. “Eventually, one could envision an environment when the longer, line-haul portion of truck freight movements are completed by autonomous trucks and local pick-up and delivery routes are completed by drivers. However, motor carriers should not count on this being an option for some time.”

CMN

 


Tradition of innovation helps
boost dairy in the Netherlands

November 25, 2016

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 — The Netherlands.

By Rena Archwamety

MADISON, Wis. — The Netherlands is a small Western European country that is known worldwide for its picturesque windmills, colorful tulips, Golden Age painters and quality Gouda. The dairy industry has particularly benefited from Holland’s tradition of agricultural innovations and is an important part of the country’s economy.

“Dairy is a strong economic sector,” the Dutch Dairy Association (Nederlandse Zuivel Organisatie or NZO) says in its 2015 “Engine of the Economy” report. “Dairy farming and the dairy industry mean tens of thousands of jobs and billions in revenue. Even in times of economic crisis, the sector grows and companies invest.”

NZO reports that the country’s 18,000 dairy farms and 1.6 million cows produce 12.7 billion kilograms (28 billion pounds) of milk per year. The Netherlands accounts for 8 percent of Europe’s milk production — fifth behind Germany, the United Kingdom, France and Poland. Twenty-eight companies and 52 factories in the Netherlands process most of the country’s cheese, butter, pasteurized milk and milk powder, as well as produce high-grade proteins from whey for products like baby food and sports drinks.

The dairy sector comprises about one-sixth of the total Dutch food industry, and NZO says the sector’s growth has been robust despite the country’s recent economic challenges.

“The Dutch dairy sector is in relatively excellent condition: the country’s climate and soil are good for dairy cows and for the grass they eat, the Netherlands is strategically located in Europe, with good access to potential markets, and the logistics infrastructure here is first-rate,” NZO says in its report. “For the Netherlands, dairy is a logical choice.”

• Gouda quality

The most prevalent cheeses made in the Netherlands are Gouda and Edam, traditionally eaten in cheese sandwiches or in cubes. The International Dairy Federation reported in 2015 that annual cheese consumption in Holland was 20.1 kilograms (44.3 pounds) per capita.

“It’s always very simple. They have a sandwich, put butter on it and slices of cheese, and take it to work,” says Marieke Penterman, who grew up on a 60-cow dairy farm in Holland and now makes her signature “Marieke Gouda” in Thorp, Wisconsin. She and her husband Rolf, both dairy farmers, founded Holland’s Family Cheese in 2006.

“They eat a lot of cheese,” Penterman says. “They will cut up meat and cubes of cheeses to be passed along to visitors. As a child, I remember my mom would always have cubes of cheese in the living room.”

Creameries in Holland have started making their own signature cheeses, using different approaches to the traditional Gouda recipe, and these varieties often are enjoyed in the evening with a glass of wine, Penterman says. She adds that the U.S. specialty cheese movement has had some influence in Holland as well.

“People are starting to look a little differently at cheeses now,” she says. “They come experience the cheese world here in America, how people just live and breathe cheese. Cheesemongers are amazing at telling the stories, and people are so passionate about cheese. I think that has come a little more in Holland, too.”

A recent Euromonitor report on cheese in the Netherlands says the cheese category has been under pressure in 2016 as Dutch breakfast and lunch habits are changing.

“Cheese sandwiches used to be a staple for most households, but bread consumption is under pressure as consumers become more interested in alternatives to bread,” Euromonitor says, adding that there are, however, areas of growth. “Cheese which is consumed as a snack between meals and cheese consumed as tapas or a bar snack both recorded growth. Another area of growth is cheese used for cooking. Goat cheese and Mozzarella are two types of cheese which performed well due to this trend.”

Gouda Holland, which is registered as a PGI (protected geographical indication) cheese that can be made only in the Netherlands, has origins that stretch back to the Middle Ages and reached maturity as early as the 17th century “Golden Age,” according to its official PGI application. The name “Gouda” came from the town where this cheese was sold, and it later came to be associated with all full-fat cheeses produced in Holland and shaped like a flattened cylinder.

Today, Beemster is the No. 1 Gouda brand in Holland, the company says, as well as the official supplier to the country’s royal court. Beemster, which offers traditional aged and flavored Gouda varieties, also carries the PDO (protected designation of origin) label for North Holland Gouda, which is prepared from milk from the province of North Holland.

The CONO Kaasmakers cooperative, which supplies milk to Beemster, consists of 460 small dairy farms with an average of 100 cows per farm. The farmers graze their cows on the Beemster Polder, an area of land in North Holland that was reclaimed from the ocean in the early 1600s through the use of windmills and creating a land plan of fields, canals and dikes.

“There is a unique slate-blue clay in that area that is so incredibly mineral rich,” says a spokesman from Beemster. “The breeze from the North Sea carries salty air and leaves salt deposits on the grass, which adds more minerals. It makes for a very tender, high-mineral grass that ends up giving the milk and cheese its ‘terroir.’”

In addition to the terroir from mineral-rich grasses, Beemster cheeses are handcrafted and then aged in historic stone warehouses, some 300-400 years old, which impart unique flavor and aroma characteristics.

“The stirring of the curds is done by hand, and cheese masters every few minutes will squeeze the curds to see how far along they are,” the spokesman says. “What Beemster is most famous for, besides its intensity and uniqueness of flavor, is that it’s very creamy ... at higher ages, when the flavor is most robust, many Goudas tend to be drier, but ours is creamier.”

• World class

Beemster is one of a number of diverse national and multi-national companies with a large presence in the Netherlands and abroad. NZO notes that FrieslandCampina, a cooperative of 19,000 member dairy farms and one of the world’s five largest companies in the dairy industry, is headquartered in Holland. France’s Danone, Switzerland’s Nestlé, Denmark’s Arla and Japan’s Yakult also have a large presence in the Netherlands. In addition to Beemster/CONO and FrieslandCampina, other major cheesemakers include Bel Leerdammer, DOC Kaas, De Graafstroom and A-ware Food Group.

Euromonitor reports that in 2015, the Netherlands exported $6.87 billion worth of dairy products. NZO notes that around half of the country’s dairy exports are cheese and that the Dutch dairy sector trades with more than 150 countries around the world. With 29 percent of product value traded outside of Europe (2014), NZO adds that the Netherlands is the largest dairy exporter of dairy products from inside the European Union to outside the EU.

According to data from USDA’s Foreign Agricultural Service, the United States imported 15,987 metric tons (35.2 million pounds) of cheese, valued at $89.2 million, from the Netherlands in 2015 — up 38 percent by volume and 18 percent by value compared to 2011.

Penterman says she has seen a large increase in Gouda’s popularity since she came to the United States 13 years ago.

“I remember when I told my neighbors I was thinking about starting to make Gouda, I had to explain Gouda to them because some were not familiar with it,” she says. “They asked, ‘Do you have enough Dutch people around who will eat this?’”

Now, she says, Gouda is so familiar in the United States that it’s even showing up on fast-food burgers.

“I’ve seen Gouda really expand, getting name recognition a little more,” she says.

Gouda varieties from the Netherlands and the United States have received plenty of recognition at cheese contests in recent years. FrieslandCampina’s Vermeer, a reduced-fat, reduced-salt mature Gouda made in Steenderen, Netherlands, won top prize at the World Championship Cheese Contest in 2012. The following year, Penterman’s Wisconsin-made Marieke Mature Gouda won the U.S. Championship Cheese Contest. And in this year’s World Championship Cheese Contest, FrieslandCampina’s North Holland Gouda Extra Special Old was named second runner-up overall.

Penterman, who worked as a farm inspector in Holland before moving to the United States, notes that Holland has very strict rules for farms and milk quality, such as a lower somatic cell count limit than there is in the United States. Additionally, she says, milk that is older than two or three days is not allowed to be used in cheesemaking.

“Holland has a top-quality product. They really have made the most of it, and it really has put them on the map,” Penterman says.

• Supportive climate

Penterman and her husband moved to the United States to start dairy farming because many of the regulations as well as limited farmland made it difficult for dairies to expand in Holland. However, she says Holland has a great climate and infrastructure to support the dairy industry.

“Winters are not as cold. The seasons are milder, so they can grow grass and feed,” she says. “It’s a very progressive country, and they have very good technology and infrastructure for dairy.”

NZO notes that one drawback of the Dutch dairy sector is the relatively high price and cost of producing milk. In the future, NZO says, Dutch dairy companies will need to be cost efficient and offer high added value.

NZO also says the Dutch dairy sector has room to grow, and that between 2013 and 2015, the dairy industry invested 2 billion euros (US$2.1 billion) in new factories and expansions of existing factories. In 2013, FrieslandCampina and Danone both opened new centers for innovation in the Netherlands. Beemster also recently opened a new dairy facility about two years ago to help increase its efficiency.

“The new dairy is the greenest, most sustainable dairy in the world. It uses renewable energy and materials,” Beemster’s spokesman says, adding that the company needed special permission to build on the Beemster Polder, which is a UNESCO World Heritage site. “The new dairy has a slightly greater capacity, but not dramatically so. We find if you go to massive production, quality gets compromised, and that’s the one thing you don’t want to happen.”

Other entities that help support Holland’s dairy infrastructure and growth are top dairy research institutions, such as Wageningen University and Research Centre and Utrecht University, as well as financial institutions, notably Rabobank, which also contributes research to the dairy and ag sectors.

NZO notes that in 2013, Rabobank loaned almost 12 billion euros (US$12.7 billion) to Dutch dairy farms.

“The Netherlands is a small country, but it has an excellent reputation in the field of agriculture and food production,” Rabobank says. “The Netherlands is considered to be one of the most productive and most efficient food producers in the world and often takes the lead in innovation.”

CMN

 


Milk production is up 2.7
percent in 23 major states

November 25, 2016

WASHINGTON — Milk production in the 23 major states during October totaled 16.49 billion pounds, up 2.7 percent from October 2015, according to preliminary data recently released by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)

September revised production in the 23 major states, at 15.97 billion pounds, was up 2.3 percent from September 2015. The September revision represents a decrease of 6 million pounds or less than 0.1 percent from last month’s preliminary production estimate.

Production per cow in the 23 major states averaged 1,903 pounds for October, 43 pounds above October 2015. This is the highest production per cow for the month of October since the 23-state series began in 2003, NASS says.

The number of milk cows on farms in the 23 major states was 8.67 million head, 31,000 head more than October 2015, but 2,000 head less than September 2016.

For the entire United States, milk production during October totaled 17.55 billion pounds, up 2.5 percent from October 2015. Production per cow in the United States averaged 1,880 pounds for October, 42 pounds above October 2015. The number of milk cows on farms in the United States was 9.34 million head, 15,000 head more than October 2015, but 2,000 head less than September 2016, according to NASS.

California led the nation’s milk production with 3.30 billion pounds in October, up 1.8 percent from its production a year earlier. Production per cow in California averaged 1,870 pounds, up 45 pounds from a year earlier. There were 1.77 million cows on farms in California in October, NASS says, down 11,000 head from October 2015 but unchanged from a year earlier.

Wisconsin followed with 2.49 billion pounds of milk in October, up 2.2 percent from its production a year earlier. Production per cow in Wisconsin averaged 1,950 pounds in October, up 45 pounds from a year earlier. There were 1.28 million cows on Wisconsin farms in October, down 2,000 head from October 2015 but unchanged from a month earlier.

CMN


Cheese stocks at end of
October are up 6 percent

November 25, 2016

WASHINGTON — Total natural cheese in cold storage was 1.22 billion pounds at the end of October 2016, 6 percent higher than the 1.15 billion pounds in cold storage at the end of October 2015 but 2 percent lower than the 1.24 billion pounds in cold storage at the end of September 2016, according to data released this week by USDA’s National Agricultural Statistics Service (NASS).

Natural American cheese in cold storage Oct. 31, 2016, totaled 729.9 million pounds, up 5 percent from October 2015’s 696.8 million pounds but down 2 percent from the 742.8 million pounds in cold storage Sept. 30, 2016.

Swiss cheese in cold storage totaled 24.2 million pounds Oct. 31, 2016, up 13 percent from the 21.4 million pounds in cold storage Oct. 31, 2015, but 7 percent lower than the 26.1 million pounds in cold storage Sept. 30, 2016.

Other natural cheese in cold storage totaled 461.5 million pounds at the end of October 2016, up 8 percent from Oct. 31, 2015’s 428.0 million pounds but 1 percent lower than the 466.6 million pounds in cold storage at the end of September 2016.

NASS reports butter in cold storage totaled 227.7 million pounds Oct. 31, 2016, 27 percent more than the 178.8 million pounds in cold storage at the end of October 2015 but down 15 percent from the 269.1 million pounds in cold storage at the end of September 2016.

CMN


Dairy, ag sectors discuss key
priorities in next administration

November 18, 2016

WASHINGTON — As the nation prepares for a shifting policy landscape under President-elect Donald Trump, dairy stakeholders are eying key issues for the industry that could be impacted by the next administration.

In addition to the election of Trump, the Republican Party won the Senate, the House and most of the down-ballot contested-for state offices in the central United States, which are heavily agriculturally-oriented, notes a report released this week by Rabobank, “The F&A Sector after the U.S. Election: What to Watch.” With one U.S. Supreme Court vacancy and additional appointments likely to come in the next four years, Republicans now have nearly unprecedented control of the U.S. federal government, the report notes.

“Republican-controlled executive and legislative branches could mean swift action when the new administration takes office,” says Pablo Sherwell, Rabobank head of Food & Agribusiness Research and Advisory, North America. “Our analysts and others around the world are keeping a close eye on trade, labor, the upcoming farm bill and regulations impacting production agriculture as these areas are where potential policy changes could have longer-term implications on the industry as a whole.”

While President-elect Trump’s policies are yet to be clearly defined, his statements during the campaign suggest drastic changes from current policy could be on the horizon, Rabobank says. In the short term, agricultural markets may be affected by foreign exchange volatility as well as changing business appetite and consumer confidence.

The lack of market information creates uncertainty, and uncertainty generates market volatility, Rabobank notes.

“We saw this first-hand last week when an initial uncertainty over President-elect Trump’s policy direction resulted in a short-term sell-off reaction by markets,” Sherwell says.

Over the past week, food, dairy and agriculture groups have congratulated Trump and expressed an eagerness to work together on pressing industry issues in the next administration.

First, though, is unfinished business in the current Congress, says J. David Carlin, senior vice president of legislative affairs and economic policy for the International Dairy Foods Association (IDFA).

Carlin notes the current continuing resolution (CR) funding government operations expires Dec. 9, so congressional leaders will need to pass another CR or appropriations bill during this lame duck session.

“IDFA will use this opportunity to try to include provisions that would allow lowfat flavored milk back into schools,” he says. “There is bipartisan support in both the House and Senate for measures that could increase milk consumption among school-aged children.”

Carlin notes IDFA also is working to delay any further reductions in sodium levels in the allowable school meal program, which are scheduled to go into effect in July 2017.

Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), notes in the coming months NMPF will share its views with the White House and cabinet-level agencies, as well as members of the Senate and House, on strategies to help achieve goals that will strengthen the U.S. economy, provide regulatory clarity to those in agriculture and expand opportunities for U.S. dairy farmers.

“We must strengthen the safety net for dairy farmers here at home, grow markets for farm exports abroad and ensure that pro-farmer policies are in place in areas including labor, environmental regulation and taxes,” Mulhern says.

Looking ahead, trade agreements, agricultural policy and labor will be key areas where potential policy changes could have longer-term implications on the industry as a whole, Rabobank notes.

• Trade

As the No. 1 global agricultural exporter, the U.S. F&A sector is one of the main drivers of global agriculture and trade, reaching nearly $125 billion in 2016, Rabobank notes. Currently, the United States exports commodities that complement the rest of the world’s food supply, and any change to U.S. agricultural trade agreements will not only affect global prices and trade dynamics but also U.S. farmer margins, Rabobank says.

Carlin says that while trade policy is stunted for the remainder of the year, IDFA will continue to advocate for trade agreements that will help to increase dairy export opportunities by supporting the reduction of trade barriers and easing restrictions on the use of common food names.

During his campaign, Trump frequently voiced his opposition to the Trans-Pacific Partnership (TPP), and media reports indicate the fate of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe also is uncertain.

NMPF says that while momentum behind specific trade deals such as TPP and TTIP has faded for the time being, the need for farmers to reach overseas markets has not.

“NMPF will continue to tout the benefits to the U.S. dairy sector of access to foreign markets as the future growth of American agriculture depends heavily on being able to reach overseas markets,” NMPF says. “NMPF will highlight how dairy exports are important both to farmers themselves, as well as to thousands of other workers in rural America whose jobs depend on a healthy and growing infrastructure for milk production, processing and marketing.”

William Loux, IDFA regulatory and international affairs specialist, and Audra Kruse, IDFA communications specialist, this week attended an event hosted by Politico at the Newseum in Washington, D.C. Loux and Kruse say U.S. Trade Representative Michael Froman and House Ways and means Chairman Kevin Brady, R-Texas, struck an optimistic tone on continued U.S. support for free and fair global trade, particularly in the Asia-Pacific region, at Monday night’s event.

They say that despite both speakers acknowledging that TPP will not be passed by the end of the year as originally planned, neither was willing to call defeat, with Froman stating the deal was in “purgatory” rather than dead and Brady pledging to work with President-elect Trump on the new administration’s concerns with the agreement.

Meanwhile, a staunch opponent of TPP, National Farmers Union (NFU) commended Congress for agreeing to forgo a last-minute vote and re-examine what it calls a “deeply flawed trade agreement.”

“We’ve been hearing for months the discontent family farmers and ranchers and American workers have with TPP, and I’m pleased that their concerns have been heard,” says NFU President Roger Johnson. “Sending TPP back to the drawing board is recognition that past trade agreement frameworks are not working for our nation’s family farmers and ranchers, rural communities and consumers.”

• Farm Bill 2018

The current farm bill is scheduled to be renewed in 2018. Because the Republican Party holds the majority, the development, approval and implementation of the 2018 Farm Bill is likely to be a smoother process than that of the previous bill, Rabobank says.

“Regulatory reductions have been a policy direction advocated by President-elect Trump during his candidacy, and it is likely that the direction will shift even more toward an environment of reduced regulation,” Rabobank says.

Paul Bleiberg, senior director of government relations, NMPF, says the organization looks forward to again taking the lead on the Margin Protection Program for Dairy with some proposed changes and plans to work with other groups in the dairy and ag sector to improve the program.

“We’ll begin work on the farm bill early next year to make the push for Congress to start work on it early,” Bleiberg says, noting the leadership in the House and Senate ag committees is expected to remain the same in the next Congress.

Carlin notes it is clear from election results that Trump has strong support in the ag sector, so the farm bill is expected to become a priority for the new administration.

“IDFA will continue to collaborate with food industry and business organizations, as well as farm and consumer groups, to advance policies that acknowledge the value of the U.S. dairy industry and the jobs it creates,” Carlin says.

Johnson says the farm bill will be a major undertaking for the next administration and the new Congress.

“Given the difficult farm economy, we hope to work closely with the administration to quickly provide relief for struggling farmers and ranchers,” Johnson says.

Johnson also emphasizes the importance of compromise, respect and open communication when the diverse sectors of the agricultural industry don’t agree.

“NFU believes that good opportunities in agriculture are the foundation of strong farm and ranch families, and strong farm and ranch families are the basis for thriving rural communities,” he says. “We may not agree on every issue, but we can agree on the need for meaningful solutions for farm families and rural America.”

• Labor

Immigration also was a hot topic during the presidential campaign season.

If immigration laws are enforced more strictly, agricultural business owners may face labor shortages, which would pressure their margins, Rabobank says.

Bleiberg says indications so far show that President-elect Trump recognizes the unique needs the agriculture sector faces.

Carlin says IDFA will continue to advocate for the passage of comprehensive immigration reform that facilitates the employment of seasonal workers on the farm and in manufacturing facilities.

“Our industry needs guest worker rules that recognize cows need to be milked 365 days a year,” he says.

House Speaker Paul Ryan, R-Wis., this week said the nation doesn’t need to panic when it comes to immigration reform.

“Donald Trump isn’t planning to create a deportation force to rid the country of more than 11 million undocumented immigrants,” Ryan says. “We’re focused on securing the border. We think that’s first and foremost before we get into any other immigration issue. We’ve got to know who’s coming and going in the country.”

CMN

 


Parmesan, ‘king’ of Italian
cheeses, boasts rich flavor

November 18, 2016

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 cheese: Parmesan.

By Stephanie Awe

MADISON, Wis. — Known as the “king of Italian cheeses,” Parmesan, a grating cheese, originates from northern Italy — the most famous regions being Parma and Reggio, which is where Parmigiano Reggiano comes from, according to Dean Sommer, cheese and food technologist, Wisconsin Center for Dairy Research.

Parmigiano Reggiano’s name is a protected designation of origin (PDO) to the Parma, Reggio and Modena regions of northern Italy, Sommer says. Traditionally, the cheese is made with raw milk from cows which are fed only grasses. It is traditionally aged for two years, he adds.

Another famous Parmesan, Grana Padano, also is a PDO. It too is produced in northern Italy but in the Po River Valley, Sommer says. It is typically aged around 18 months and also is made with raw milk from grass-fed cows. Its flavor is a bit milder than Parmigiano Reggiano, Sommer adds.

In Italy, these cheeses typically are made in large wheels weighing around 60 to 88 pounds, with Parmigiano Reggiano toward the lighter end of the range and Grana Padano toward the heavier end of the range, he adds.

It is likely that Parmesan manufacture was brought to the United States by early Italian immigrants, Sommer says. Some of these immigrants settled in the northern milk-producing regions of Wisconsin, where they thought the topography and weather was similar to that of northern Italy, he says.

Traditionally, Parmesan in the United States was made in wheels weighing about 22 pounds, much smaller than their Italian counterparts, Sommer says.

Today, Parmesan — typically made with part-skim milk and thermophilic, or “heat loving,” cultures — is expensive to make because it is low yield, he adds. Therefore, unlike traditional methods of brine salting the cheese, some manufacturers in recent years have moved to dry salting and forming the cheese in blocks or barrels instead of wheels.

Parmesan’s production in the United States totaled nearly 340 million pounds in 2015, the third-highest total production among the nation’s Italian cheeses behind Mozzarella and Provolone, according to USDA’s Dairy Products 2015 Summary published in April 2016. This number was up about 12 percent from 2014.

Parmesan has a U.S. standard of identity set by FDA, which states that Parmesan cheese does not contain more than 32 percent of moisture, and its solids contain at least 32 percent of milkfat. In addition, the cheese must be cured for at least 10 months.

While 10 months is the minimum aging time for Parmesan, some manufacturers age the cheese up to two years in order to achieve a more intense flavor — with typical flavor attributes including some sweetness, some nuttiness and some fruitiness that resembles roasted pineapple, Sommer says.

Schuman Cheese, headquartered in Fairfield, New Jersey, offers several Parmesan varieties that differ based on age along with other factors, including milk type, recipe and the cheesemaking process, according to Christophe Megevand, head cheesemaker, Schuman Cheese.

“The best flavor comes from cheese that is aged 14 months or more; we have many varieties that are aged from 18 to 24 months,” Megevand says.

Schuman Cheese’s flagship brand, Cello, includes a Copper Kettle Parmesan that is made using Old World methods and cooked in a traditional copper vat, creating a unique flavor with a “bold, distinctive, caramel finish,” Megevand says.

Similarly, Sartori Co., Plymouth, Wisconsin, offers its Classic Parmesan and SarVecchio Parmesan, which are handcrafted and made in the Italian tradition, according to Mike Matucheski, one of Sartori’s Master Cheesemakers. The biggest difference between the two varieties is the aging process. SarVecchio is aged 20 or more months, whereas the Classic Parmesan is aged a minimum of 10 months.

This aging contributes to differences in flavors, according to the company. SarVecchio contains prominent notes of caramel and has a creamy finish, and the Classic Parmesan has a more mellow, nutty taste.

• Parmesan and naming rights

Parmesan is one of several cheese names, along with others such as Feta and Asiago, that the European Union (EU) is trying to gain exclusive rights to in the United States.

According to a summary of a recent study by Informa Economics IEG, commissioned by the Consortium for Common Food Names (CCFN), U.S. cheese consumption could decline up to 21 percent — or 2.3 billion pounds — over 10 years should the EU succeed. This consumption decline would equal up to $5.2 billion in lost cheese sales, the study says.

This decline would likely be the result of two main reasons, according to Shawna Morris, senior director, CCFN. First, consumers would likely continue to purchase products with names they recognize. In addition, because imported product often is more expensive, there may be an overall decrease in cheese consumption, she says.

Morris adds that it is difficult to predict how the U.S. dairy industry would react due in part to its diverse cheese and dairy sector. As a result, the EU’s success could lead to a “splintering” of the marketplace, where each company uses different terms, she says.

“That would create tremendous upheaval, costs and chaos in the U.S. market for no reason other than to hand the Europeans an undeserved monopoly in products that have been widely produced throughout the U.S. and elsewhere for decades,” she says. “It’s an outcome that must be firmly rejected.”

Bob Starkey, vice president of business development, Winona Foods, Green Bay, Wisconsin, says he would be surprised if the EU succeeds but sees two things that could occur: domestic producers may need to come up with alternative names, or they may revert to using the word “style.”

“On the one side, it gives us an opportunity to create our brand and tell our own story, but on the other side, it makes it more difficult for consumers,” he says, adding that consumer education would be an ongoing effort and that the change would be a setback rather than an end to the industry.
A similar sentiment is expressed at Sartori Co.

“We’ll cross that bridge if and when it comes in regards to domestically labeled Parmesan,” says Sam Allison, export manager, Sartori.

• Adulterated Parmesan

In February of this year, Bloomberg News released findings from an investigation in which store-bought grated cheese was tested for wood-pulp content by an independent laboratory. This investigation followed FDA’s discovery that Castle Cheese Inc. had included fillers in its advertised 100-percent Parmesan. Bloomberg’s results revealed that other products on the market, while advertised as 100-percent Parmesan, contained other fillers.

Due at least in part to such findings, some facilities have gone out of business, Starkey adds.
“That’s the best thing that’s happened to the industry,” he says. “You can change the composition of a product as long as you label it with the correct nomenclature ... It was definitely a black eye for the industry, but in the long haul it’s given us a better market that we’re all on the same playing field.”

Schuman Cheese recently launched its “True Cheese” trust mark, an on-package seal that is intended to verify product quality and manufacturing integrity.

“Recent studies reveal that consumers are more concerned than ever before about ethical behavior, transparency, visibility to the supply chain and authenticity,” says Melyssa Jolivert, senior associate of corporate communications, Schuman Cheese.

The mark will appear on Schuman Cheese and snacks sold in supermarket and mass retail channels. With the launch of the mark, the company also announced a relationship with Covance Food Solutions, Madison, Wisconsin, to provide independent testing of True Cheese labeled products. Covance will randomly select products from retail locations to verify their quality, Jolivert says.

• Retail sales

Volume of Parmesan retail sales has grown annually since 2010, up 5 percent from September 2015 to September 2016 (fixed weight only, U.S. multi-outlet and convenience stores), according to Information Resources Inc. (IRI) data courtesy of Dairy Management Inc.

Parmesan’s retail sales also are somewhat seasonal, with fewer pounds sold in summer months compared to fall and winter. However, while there is a slight uptick of Parmesan’s national distribution around the holiday season, it remains fairly flat throughout the year, the IRI data says.

Parmesan’s highest price point for 2015 and 2016 occurred in January, according to the data. However, the year-over-year increase is minimal, with January 2015 at $8.01 and January 2016 at $8.02 per pound.

While grated is the most popular form of Parmesan with a 59.5-percent share of sales, the form is showing a slight sales decline (U.S. multi-outlet and convenience stores, latest 52 weeks ending Sept. 4, 2016). Finely shredded, partial round, chunk, ball and shaved forms experienced growth over the same time period, according to the data.

On an annual basis as of Sept. 4, 2016, about 55 percent of total U.S. households purchased Parmesan cheese across all U.S. outlets, according to the National Consumer Survey (IRI Group). This number slightly increased over the past year, driven by an increasing amount of repeat purchasers, according to the data.

• Applications, trends and marketing tactics

Schuman Cheese Parmesan works well for culinary applications, such as sauces and toppings, according to Megevand, who adds that the cheeses also are distinctive enough to sit on a cheese board and enjoy with a glass of wine.

Sartori’s Parmesan also is used on cheese boards, as well as pairings to pestos and pizzas, says William Libby, corporate chef, Sartori.

“One of the more imaginative uses we’ve seen is a SarVecchio crisp in lieu of a taco shell,” Libby says. “The fan said it was her go-to, gluten free alternative for tacos.”

Winona offers various solution-based Parmesan cheeses to its customers, including imitation Parmesan, blends and 100-percent Parmesan, which fall under its Della Terra brand. These cheeses are sold across retail, foodservice, industrial, ingredient and private label.

The company recently released its new Saddle Pack stand-up pouch. These two, 24-ounce packs have a handle attached to create a “saddle,” allowing consumers to purchase two smaller packs and open one at a time so that they stay fresher for longer, says Kaitlin Stankowski, regional sales and marketing manager, Winona.

The packs also take up less space than conventional PET plastic jars and come in varieties including Fancy Shredded Parmesan, Shaved Parmesan, Shaved Italian Blend and Shredded Italian Blend.

Ultimately, Stankowski says consumers tend to feel special when eating Parmesan because it is a more expensive cheese. Its consumption reflects where consumer taste is headed, as it is used as a topper on foods and, increasingly, on cheese plates.

“Tastes are going in that direction,” she says. “As we evolve, we want more of the richer flavors.”

CMN

 


New Zealand earthquake
impacts some dairy farms

November 18, 2016

KAIKOURA, New Zealand — A massive earthquake hit New Zealand’s South Island town of Kaikoura Monday, causing landslides, road closures and the evacuation of hundreds of people. Two fatalities have been confirmed.

Thursday evening New Zealand’s Ministry of Civil Defense and Emergency Management reported that more than 800 people had been evacuated from Kaikoura following Monday’s 7.8 magnitude earthquake, and that the national response effort has progressed well. However, due to flooding risks, crews that had been working to reopen a main road to the public were pulled out Thursday due to unsafe conditions.

Fonterra issued an update Monday confirming the safety of its New Zealand staff following the earthquake and reporting that there was no major damage to any of its manufacturing sites. The New Zealand cooperative added that it did expect some milk collection disruption due to road closures and other issues accessing farms in the South Island. Farms that lost power or that could not be reached by tanker due to road closures may need to dispose of their milk, Fonterra adds.

“We’re doing our best to reach everyone who is due for collection immediately,” says Miles Hurrell, Fonterra’s Farm Source chief operating officer. “With power out and phone lines down in some areas, that includes putting Farm Source teams on the road to go door to door to try to update those farmers with the latest information.”

Fonterra says road conditions in Kaikoura mean there are approximately 30 farms in the area that may not have their milk collected, while others around the country may have late collections as tankers are rerouted.

Meanwhile, Fonterra says most of its manufacturing sites around New Zealand were fully operational Monday and processing milk as usual.

“This has been a frightening event for many of our communities, and our thoughts are with those who are suffering losses,” says Robert Spurway, chief operating officer for global operations, Fonterra.

Synlait, a dairy nutritional and ingredient company based in the South Island, also released a statement Monday reporting that its Dunsandel, New Zealand, site had not been affected and is operating as usual following the earthquake and aftershocks.

Synlait confirmed that its employees and some of its milk suppliers that are located in the affected areas of North Canterbury are safe, and that it was working with suppliers to manage any disruptions, which were not expected to be significant.

Eric Meyer, president, HighGround Dairy, says that with no major damage to processing facilities, he does not see the earthquake impacting on global dairy markets.

“There’s not a lot of concentration of farms in that region,” Meyer notes. “Damage to the roadways have inhibited getting to the milk to bring to processing facilities for a limited number of farms in the region. Those are short-term issues, but by and large, I don’t think there will be a lot of impact.”

That said, Meyer says the earthquake has helped to wake the international community up to the overall situation for milk in New Zealand, where the peak month of October has been impacted by excessive rains. This week’s Global Dairy Trade auction saw an increase in prices (see related story in this week’s issue).

“They never saw a peak, but more of a flat-line result,” he says. “I have heard the North Island production was impacted by as much as 10 percent — that’s pretty significant for the peak part of their season. That is probably causing a much stronger impact to what’s going on in New Zealand and global prices than the earthquake.”

CMN


CROPP, Dean form strategic
JV to grow milk brands

November 18, 2016

DALLAS — Dean Foods Co. and CROPP Cooperative are partnering in a strategic joint venture to bring organic milk to retailers through Dean Foods’ processing plants and refrigerated direct store delivery (DSD) distribution system.

The 50/50 joint venture will serve as a strategic growth platform for both companies. Dean Foods will provide processing services and distribution through its extensive refrigerated distribution network, while Organic Valley will provide a select portfolio of recognized brands and products, marketing expertise and access to an organic milk supply from America’s largest cooperative of organic dairy farmers.

Both Dean Foods and Organic Valley will leverage their sales expertise to drive distribution; Dean Foods brings extensive experience in channels such as large format, dollar store and C-store, while Organic Valley brings expertise in the natural channel, emerging markets and specialty distributors.

“Adding Organic Valley to the current lineup of Dean Foods branded dairy products enables Dean Foods to offer retail customers the largest and most comprehensive dairy offering across multiple segments with national brands that consumers know and trust,” says Gregg Tanner, CEO, Dean Foods. “It also allows us to further leverage our manufacturing and distribution network. We believe the dynamic and growing Organic Valley brand of organic milk is the perfect complement to our own category-leading DairyPure and TruMoo brands and gives Dean Foods a strong position in the organic dairy segment.”

George Siemon, CEO, Organic Valley, says the partnership reinforces Organic Valley’s mission to support more organic farmers and grow its business.

“Consumers will enjoy the same Organic Valley quality they’ve come to know and trust; the same farmers will supply the same organic milk,” Siemon says. “But now more Organic Valley organic milk will be on more grocery shelves across the country.”

The companies expect the joint venture to begin processing and shipping Organic Valley products in mid to late 2017.

CMN


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Today's Cheese Spot Trading
December 2, 2016


Barrels: $1.6150 (-1/2)
Blocks: $1.8100 (+3)


Click here for more market activity
Cheese Production
U.S. Total Sept.
982.178 mil. lbs.


Milk Production
U.S. Total Oct.
17.550 bil. lbs.

Guest Columnist

Elections have consequences

Jim Mulhern, National Milk Producers Federation

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