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Amid uncertainty, CME barrel price hits decade-long low

Jan. 18, 2019

By Alyssa Mitchell

MADISON, Wis. — The Cheddar barrel spot price at the Chicago Mercantile Exchange (CME) this week reached a nearly decade-long low as heavy stocks and a less-transparent market are weighing on prices.

The CME Cheddar barrel price settled at $1.1850 per pound on Thursday. While barrel prices dipped into the low $1.20s in both June and December 2018, Thursday’s barrel price was its lowest since July 28, 2009, when it settled at $1.1800 per pound. Barrels increased 1.5 cents today to settle at $1.2000.

USDA’s Dairy Market News says cheese markets, particularly barrel markets, are struggling to regain some of the steam lost in the fourth quarter of 2018.

The spread between CME barrels and blocks also has widened to 20 cents this week, with blocks settling at $1.4000 per pound today.

Dairy Market News says block producers are concerned about the price chasm.

“They suggest even though there is a chance barrel prices could ascend to meet block prices, the inverse possibility of block prices declining to converge with barrel prices creates hesitant buyers and a generally inferior market dynamic,” Dairy Market News says.

Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle, notes that given additional demand from the NFL football playoffs culminating in the Super Bowl, blocks could remain balanced. Barrels, however, continue to struggle and are having a hard time finding support.

“Looking around the world you’d be hard-pressed to find a weaker dairy market than the market for U.S. Cheddar barrels now,” adds Dave Kurzawski, senior broker at INTL FCStone, Chicago. “The market is seeking a product-clearing price, and it remains to be seen if we’ve gotten to a level that will clear enough product to stop downward price momentum. With other U.S. and global markets bubbling up, however, I’m not so sure how long the U.S. cheese prices can look the other way. All things being equal, likely not much past the first quarter.”

Brian K. Fletcher, vice president at Rice Dairy LLC, Chicago, says key things that could bring support to the CME cheese market include an increase in retail promotional activity and/or improvement in current trade barriers.

“Right now, each element is a major headwind to the market, and I think each has the potential to strengthen the market,” Fletcher says. “Without a change in either of those factors, I think the market will continue to struggle.”

He adds that the combination of consumer and foodservice trends of shifting out of processed cheese into natural cheese — along with significant processed cheese manufacturing capacity added to the market over the last couple years — have led to the wider-than-historical block/barrel spread over the last 18 months.

“I think a wider-than-typical block/barrel spread, with barrels maintaining a discount, is likely to continue until we see more block manufacturing come to the market,” he says.

Dorland agrees, saying given the demand for processed cheese growing at a much slower pace to other cheeses, it is likely the spread remains wide this year with periods of double-digit gaps.

At the same time, cheese inventory levels are high.

“While exports have generally been good, lower-than-typical prices are needed to maintain volume going from the United States to Mexico due to Mexico’s retaliatory U.S. cheese tariff,” Fletcher says. “I would also attribute a lack of domestic promotional activity to the surplus of product as well.”

Dorland notes that while there is plenty of cheese available to the market, some of the stories in the mainstream media are overstating the matter.

“As the industry expands capacity, it also expands working inventory,” she says, noting that:

• Cheese tends to remain in a warehouse for up to 10 days after production.

• If the United States increases cheese production capacity by 100,000 pounds of cheese per day, that would result in an additional 1 million pounds in the warehouse.

“So part of the new working inventory was captured in those figures,” she says.

Unfortunately, the market won’t be getting the latest cold storage figures this month if the current government shutdown continues.

“Lack of data is causing tremendous issue for agricultural markets,” Dorland says. “Additionally, farmers looked to the new Dairy Revenue Protection program (passed in the 2018 Farm Bill) as a viable alternative for risk management. Now that prices have moved higher, dairy producers are unable to secure insurance as the quotes are not available currently.”

Fletcher notes that a significant advantage the U.S. dairy market has over the European Union, New Zealand and other dairy markets around the world is the available consistent data to the public and market participants.

“That competitive advantage is currently gone, in many respects,” he says.

Kurzawski this week noted that New Zealand’s Global Dairy Trade auction “was like a bottle of cold water to hikers lost in the desert.”

“With the U.S. government shutdown, market participants are desperately seeking data,” he says.

However, Kurzawski adds that while he likes to see these reports as much as the next guy, the fact remains that the markets will still function based on what market participants are able to buy and sell at any given time.

“We don’t have the luxury of seeing some data points, but it won’t shut us down,” he says. “Every dairy business can see what’s going on every day without the aid of dated government reports. Have a little faith.”

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Colorado dairy industry sees continued growth in demand

Jan. 18, 2019

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

By Rena Archwamety

MADISON, Wis. — Colorado, home to 178,000 milk cows and 37 dairy processing plants, has seen significant growth in dairy over the last decade. A number of new plants have started production in recent years, and milk cows and production are on an upward climb. According to the most recent milk production report from USDA’s National Agricultural Statistics Service, Colorado had the highest year-over-year milk production growth in November at 375 million pounds, up 7.1 percent from 2017.

Dairy in Colorado employs nearly 15,000 people and generates more than $695 million in direct wages, according to recent data compiled by the International Dairy Foods Association (IDFA). IDFA estimates dairy’s overall direct economic influence in Colorado is approximately $3.3 billion statewide.

Dairy Farmers of America (DFA), which represents a high percentage of the dairy farms in Colorado, says its members have nearly doubled the state’s milk supply to meet local customer demand over the last decade.

“Through our network of valued customers within Colorado, including DFA’s own global foods manufacturing plant located in Fort Morgan, Colorado, we’ve been able to provide our members with a secure and diversified local market for their milk. This market has allowed current and new DFA members to grow at a pace that has carefully matched growing demand,” says Dennis Rodenbaugh, senior vice president and chief operating officer, DFA Western Area.

Rodenbaugh notes as examples partnerships with Leprino Foods as it built and expanded its Greeley, Colorado, Mozzarella and ingredient plant, and with Kroger’s new fluid milk bottling plant near Denver. The Kroger Mountain View Foods plant opened in May 2014, while Leprino completed the third and final phase of its Greeley plant in November 2017.

“DFA worked closely with our national strategic partner, Leprino Foods Co., as they were evaluating the location for their next state-of-the-art dairy manufacturing plant,” Rodenbaugh says. “Since that agreement to build in Greeley, Colorado, we’ve worked closely with Leprino Foods and our members to very closely align the timing of new milk supplies with the new demand.”

Rodenbaugh adds that at this point, Colorado’s milk production growth rate is on pace to meet the known milk demand in the state for the next five years.

• Major headquarters

A number of major national dairy companies are headquartered in Colorado, as well as are many successful local and regional cheese crafters. Global Mozzarella supplier Leprino Foods is based in Denver, while Aurora Organic Dairy, a major supplier for private label organic milk, is based in Boulder, Colorado. Noosa Yoghurt, recently acquired by Sovos Brands, was founded in Colorado in 2009 and remains manufactured in Bellvue, Colorado.

Colorado Ranchers Inc., a national supplier of Hispanic-style cheeses under the Queso Campesino brand, is based in Brush, Colorado, where it also opened a new production plant in 2017. More specialty cheese companies in the state include Haystack Mountain Goat Dairy in Longmont and MouCo Cheese Co. Inc. in Fort Collins, Colorado. Additionally, the American Cheese Society is headquartered in Denver.

Leprino Foods, one of the largest producers of Mozzarella in the world as well as a leading supplier of lactose and whey, started in Denver in 1950 as a small, family-owned market selling grocery items and handmade Italian cheeses.

Today, the company remains family-owned and operates nine U.S.-based manufacturing facilities, including two in Colorado. It employs more than 4,000 people worldwide and has sales in more than 40 countries. More than 1,300 of Leprino’s employees are in Colorado. Its headquarters, which also include a cheese and nutrition pilot plant, a research and development kitchen, and genomics and microbiology labs, are located on the same corner where the Leprino Family’s original grocery store once stood.

“Leprino Foods began as a Colorado company based on dairy. Because we rely on local dairy farmers to deliver a steady supply of milk, having close proximity of fresh milk is an imperative in siting our plants. However, it wasn’t until 1994 that we opened our first large-scale manufacturing facility in the state — in Fort Morgan in northeastern Colorado,” says Mike Reidy, senior vice president, corporate affairs, Leprino Foods.

“We gained full appreciation of the value and growth potential of dairy in our home state through this plant,” Reidy adds. “This region, where the Fort Morgan plant is located, is one of the top agricultural areas in the country and has a strong history of dairy farming. Neighboring Weld County, where our Greeley plant is located, is also a top dairy producing county in the U.S.”
Colorado’s dedicated dairy farmers, strong state and local government support and healthy milk shed make it an excellent location to do business, Reidy says.

“It’s also a great place to live for both dairy farmers and their cows,” he adds. “Colorado offers a high quality of life by boasting a great climate, ready access to several vibrant metro areas, a strong labor force, good educational facilities, and water sources from high mountain peak snow run-off.”

• Organic growth

Aurora Organic Dairy’s Colorado roots trace back three decades to when its founder, Marc Peperzak, started dairy farming in the state in the mid-1980s. Peperzak co-founded Horizon Organic Dairy (now owned by DanoneWave) with Mark Retzloff in the early 1990s. In 2003 and 2004, Aurora Organic Dairy built its vertically-integrated supply chain by adding its on-farm Platteville, Colorado, milk plant to process the organic milk from its farms. The company shipped its first store-brand organic milk to its first retail customer in late 2004.

“In 2003, private branded organic milk was less than 5 percent of the organic dairy category. Since then, retail store brands account for approximately 50 percent market share,” says Sonja Tuitele, spokesperson, Aurora Organic Dairy.

Aurora Organic Dairy owns and operates five organic dairy farms in Weld County, Colorado, including 6,700 acres of certified organic land for pasture, crops and facilities. Its Platteville farm has approximately 1,160 milking cows, and its High Plains Dairies in Gill, Colorado, are made up of four distinct properties and milking parlors with a combined total of approximately 10,585 milking cows. In addition to its Colorado operations, Aurora Organic also has two sites in Texas.

Tuitele says Colorado is a good place for both dairy farming and for doing business, and the company frequently partners with Colorado State University’s Colleges of Agriculture and Animal Sciences to conduct research on its farms.

“We have approximately 500 employees in Colorado. As one of the highest growth states, Colorado is an attractive place to locate a business,” she says. “There is significant agriculture, food processing and natural and organic expertise in Colorado. That allows for a talented pool of knowledgeable people when recruiting new employees. However, there is significant competition for these workers in the state, so we work hard to attract and retain our employees.”

She adds that Colorado is a state that welcomes agriculture, and the high altitude benefits organic dairy farmers because there are fewer pests.

“Colorado is a good place for dairy farming because we have 330 days of sunshine a year, a temperate climate and ample land for grazing,” Tuitele says.

• Local cheese

Another longtime Colorado business, Haystack Mountain Goat Dairy, started in the late 1980s with the homemade Chevre founder Jim Schott made from milking a handful of goats on his 6-acre farmstead. Haystack Mountain now has grown to a $2 million company and added a second creamery in Longmont, Colorado, a couple of years ago. The creamery has won more than 70 awards, including national and international medals, in the last 20 years.

“Jackie Chang, our cheesemaker, has proven time and time again with the awards she has received for our cheeses, that she is in the upper echelon of cheesemakers in the country,” says Chuck Hellmer, president and general manager, Haystack Mountain Goat Dairy.

At one time Haystack Mountain had up to 120 goats on its property, but it now relies on contract milk sources for both goat’s and cow’s milk. For more than 10 years, the company has partnered with Colorado Correctional Industries (CCI) to supply a million-and-a-half pounds of goat milk a year from a 2,000-goat farm CCI runs in Cañon City, Colorado, which is used to help train inmates in animal husbandry and general job skills. Haystack Mountain also sources conventional cow’s milk from nearby Longmont Dairy and organic cow’s milk from Aurora Organic Dairy.

“Goats and Colorado go together well,” Hellmer says. “Goats love dry climates, so you can get good, healthy, strong goats in Colorado.”

Some of Haystack Mountain’s more popular cheeses now include Queso de Mano, a Spanish-style raw goat’s milk cheese similar to Manchego; Buttercup, a mild cheese and the company’s first venture with cow’s milk; and the double-cream, washed-rind Funkmeister made with organic cow’s milk. Gold Hill, an aged goat’s milk cheese introduced two years ago, was named “Best American Cheese” at the 2017 World Cheese Awards.

Hellmer estimates that about 80 percent of Haystack Mountain’s cheese is sold within the Rocky Mountain region, though it is distributed as far as the East and West Coasts.

He notes that the cheeses get lots of support from Colorado’s locally-owned restaurants and dedicated foodies, who have long been buying Haystack Mountain’s cheeses.

“I would say Denver, Boulder, and even up north in Fort Collins, really have pretty strong restaurants, similar to Portland on the local scene,” Hellmer says.

“We have support form the region, and a small group of foodies that love our cheeses,” he adds. “They understand why we’re here, and the benefits of having a company that makes small-batch, handmade, traditional cheeses.”

CMN


Industry grapples with lack of data as shutdown drags on

Jan. 18, 2019

WASHINGTON — The federal government shutdown is now in its fourth week, marking the longest stretch the federal government has not been fully funded, sources say.

The dairy industry continues to operate partially in the dark as key market reports are delayed. The shutdown also impacts progress and implementation of new risk management programs included in the recently passed farm bill, such as the new Dairy Margin Coverage program.

While USDA last week announced it will extend the deadline for farmers to apply for Market Facilitation Program (MFP) payments to help offset losses they are experiencing as a result of trade tensions between the United States and other countries, the delay means payments won’t be coming to producers until weeks — at least— after the shutdown ends. (See “Farm aid deadline extended, SNAP benefits will continue” in last week’s issue.)

However, producers who already applied for MFP and certified their 2018 production by Dec. 28, 2018, already should have received their payments.

This week, U.S. Agriculture Secretary Sonny Perdue announced that several Farm Service Agency (FSA) offices will reopen temporarily to perform certain limited services for farmers and ranchers.

In nearly half of FSA locations, FSA staff will be available to assist agricultural producers with existing farm loans and to ensure the agency provides 1099 tax documents to borrowers by the Internal Revenue Service’s deadline, USDA says.

“Until Congress sends President Trump an appropriations bill in the form that he will sign, we are doing our best to minimize the impact of the partial federal funding lapse on America’s agricultural producers,” Perdue says. “We are bringing back part of our FSA team to help producers with existing farm loans. Meanwhile, we continue to examine our legal authorities to ensure we are providing services to our customers to the greatest extent possible during the shutdown.”

Reopened FSA offices will only be able to provide the specifically identified services while open during this limited time. Services that will not be available include, but are not limited to, new direct or facility loans, new farm loan guarantees, new marketing assistance loans, new applications for MFP, certification of 2018 production for MFP payments and disaster assistance programs.

National Farmers Union (NFU) President Roger Johnson sent a letter to members providing them with the details of the announcement and advising family farmers and ranchers to take advantage of the services available to them.

“We’re urging those of you who have business with FSA to take advantage of this temporary reopening before FSA county offices are once again forced to close their doors,” he says.

Johnson notes that NFU is appreciative of USDA’s efforts to service farmers as much as they can amidst the shutdown and that the organization continues to call on the president and Congress to open the government.

Meanwhile, some organizations and companies are working to provide relief for furloughed government workers during the shutdown.

The Kraft Heinz Co. opened a grocery store pop-up Wednesday in Washington, D.C., to support a program called “Kraft Now Pay Later” that helps federal government workers during the government shutdown. Kraft is helping impacted workers stock up on staples like Kraft Mac & Cheese, Kraft Natural Cheese, Kraft Singles, Kraft Salad Dressings, Kraft Mayo and Kraft BBQ for their dinner tables.

The pop-up store will be open through Jan. 20 at 1287 4th St. NE, two blocks from Union Market in Washington, D.C. Current federal government workers holding their government ID will be able to shop and take home a bag full of Kraft products for their families. In return, Kraft asks workers (if they can) to pay it forward by donating to their charity of choice or someone in need once they are able to do so.

“During the government shutdown, parents should not have to worry about putting dinner on the table because they aren’t receiving a paycheck,” says Sergio Eleuterio, head of marketing for Kraft. “Kraft stands for families, and we want to support the families who have built our brands. This store is one way we can help those affected get the grocery staples they need. And we celebrate all who are doing their part to help.”

For more information on Kraft’s initiative and a full list of other available support in the D.C. area, visit bit.ly/KraftNowPayLater.

The Central Pennsylvania Food Bank this week also began offering federal shutdown food assistance services to employees and their families who are missing paychecks and are in need of food.

“The federal shutdown is becoming a crisis for many employees and their families. We are mobilizing to make sure nobody impacted goes hungry due to this shutdown,” says Joe Arthur, executive director of the Food Bank. “Our 27-county service territory includes almost 25,000 federal workers, a portion of whom will not receive paychecks during the shutdown. Also, there is potential for a ‘downstream funding effect’ and we are concerned that some Pennsylvania state and local government employees and private contractors may also be at risk if the shutdown lengthens. We hope that some of the impacted families will qualify for SNAP benefits or unemployment compensation, but for those who will not, we need to be there for them.”

The food bank will continue its normal operations serving with more than 1,000 partner agencies and programs but this week added federal shutdown services. Instructions for accessing food assistance are located on the food bank’s website at www.centralpafoodbank.org and through a recorded message on the food bank’s federal shutdown food assistance phone line.

CMN




Sargento leads with innovation
Sunrise Balanced Breaks, Sargento Blends 3 Cheese Creamy Jack are latest new product introductions

By Kate Sander

PLYMOUTH, Wis. — This past year, Sargento Foods marked 65 years in business. Best known for its natural shredded, sliced and snack cheeses, the company also provides cheeses, appetizers and sauces to restaurants and other food manufacturers.

The company is led by Louis (Louie) Gentine II, the grandson of founder Leonard Gentine, who started the business with his friend and neighbor, Joe Sartori, in 1953. The Gentine family has solely owned the business since 1965.

Leonard Gentine set out to build a family business, but in the end, he created a “business family,” his grandson says.

“Hire good people and treat them like family was my grandfather’s motto,” Gentine says, noting that those words have been a pillar of the company’s foundation and an important contributor to its success. He adds that the company believes in treating its employees with “respect and trust, like your own son or daughter.”

Through its 65 years, the Sargento business family has grown to approximately 2,200 people at facilities in Plymouth, Elkhart Lake, Kiel and Hilbert, Wisconsin.

Annual revenues total more than $1.4 billion and are expected to continue climbing. With snacking a growing trend among U.S. consumers, Sargento Foods remains a category leader, studying what consumers want and need and offering innovative new items.

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Cheese designed for the grill gaining in sales, recognition

Jan. 11, 2019

By Rena Archwamety

MADISON, Wis. — There’s classic grilled cheese — a slice of American between buttered toast — and there’s cheese for grilling — a slab or round of cheese especially designed to throw on the grill, cook and eat, no bread required.

Grilling cheeses are a very small segment (0.02 percent) of the cheese category in the United States, but they are demonstrating strong growth, according to IRI data courtesy of Dairy Management Inc. (DMI). During the 52 weeks ending Dec. 2, 2018, sales of grilling cheeses rose 9.1 percent by volume, driven largely by the Finnish-style Juustoleipa variety, which DMI reports rose 36.2 percent during this period.

“Juustoleipa is really deep-fried cheese without batter and without deep frying,” says Chad Galer, director of food safety and product innovation for the National Dairy Council, which is managed by DMI. “It’s not going to be a health and wellness trend, but it’s really ‘cheese first,’ with a positive halo of attributes.”

Galer adds that experience-driven consumers are looking for foods like grilling cheeses to enjoy.

“Consumers are asking questions and talking about it,” he says. “They want to try cheese in different ways. They want to experience the great taste of grilled cheese, with the caramelized butter flavors, without the bread.”

Another style of grilling cheese, Halloumi, has not seen as much growth in the United States but has rapidly escalated in popularity abroad. The traditional Mediterranean cheese, made from a mixture of sheep’s and goat’s milk, has been made on the island Cyprus for hundreds of years. Its higher-than-normal melting point makes it ideal for grilling and frying.

“The demand for Halloumi cheese is on the rise and the popularity is not foreseen to decline anytime soon,” notes a global market insight report on Halloumi recently published by market research firm Fact.MR. “Producers in Cyprus are focusing on increasing the total production, whereas key players are investing in R&D to keep up with this overwhelming demand.”

• Juustoleipa

Pasture Pride Dairy, Cashton, Wisconsin, makes six varieties of its flagship grilling cheese “Juusto,” including a garlic variety it introduced late last year, sourcing its milk from local Amish farms. It also makes a goat’s milk variety called “Guusto.” Pasture Pride first developed its Juusto after owner and cheesemaker Kevin Everhart attended a 2002 seminar on Juustoleipa at the Wisconsin Center for Dairy Research.

“With most cheeses, you add bacterial cultures to it, which brings the pH level down and allows it to break down the milk,” Everhart says. “Juusto doesn’t use any cultures in it, so it doesn’t melt as easily.”

Within 24 hours of the cheesemaking process, the Juusto is baked, packaged and shipped to stores all across the United States as well as to some international customers. The cheese is designed to be heated again before it is served — on a stovetop, in the oven, on a grill or microwaved — and lends itself to a variety of possible applications.

“In Scandinavia, Juustoleipa is made from reindeer milk or combinations with goat’s and cow’s milk, and it is typically a breakfast cheese,” says Mary Bess Michaletz, national sales director, Pasture Pride Dairy. “Here it is used for entertaining, more of an event cheese. Folks in the U.S. like to see different flavors, paralleling the national trend of flavored cheeses.”

She notes that backpackers can bring Juusto along when camping to cook over an open fire, or it can be toasted quickly at home on a pancake griddle.

“If you throw it in hot oil, it’s almost as if you drenched it in panko — it forms a beautiful crispy layer,” Michaletz says. “Our next recipe card is going to be ‘Juusto Fondue.’”

• Halloumi-style

Ballard Family Dairy and Cheese, Gooding Idaho, makes a Halloumi-style grilling cheese from its own Jersey cow milk. Owners Steve Ballard, who runs the dairy farm side, and his son Travis, who is the cheesemaker, developed the recipe for their “Idaho Grillin’ Cheese” around 2006 after attending a short course at University of Wisconsin River Falls.

“We’re on about the 10th generation of perfecting the recipe, and demand is increasing,” Steve Ballard says. “We started making 100 pounds a month, then 200, and now we’re a little lower than 2,000 pounds a month.”

Travis Ballard says they developed a local market for Idaho Grillin’ Cheese through farmers’ markets, getting it out in public and talking to restaurants. Currently 85 percent of their market is in Idaho, though it also is shipped to places like Beecher’s Cheese in Seattle. While the Ballards have spent years working to develop a market for their cheese and teach people how to use it, they also have benefitted from recent trends favoring grilling cheeses.

“Within the last year or two years, people have been using Halloumi,” Travis Ballard says. “By using Halloumi, they also are using our cheese as a local substitute. Grilling cheeses have been coming up in the last couple of years. More people have had it and know what it is.”

Idaho Grillin’ Cheese differs from Juusto in that it does use some cultures in the cheesemaking process, and it isn’t baked before packaging.

“We use cultures because we want a little more shelf-stable product without salting it so much,” Steve Ballard says. “The cool thing about it, since you’re doing the finishing of the product on the stove itself or in the barbecue, that’s where it picks up additional flavors.”

The cheese can be diced and skewered with cherry tomatoes to grill on the barbecue, picking up a roasted tomato flavor, or tossed in a bowl with salt, pepper and a little balsamic vinegar. Travis Ballard says he has seen it used by chefs in a number of creative applications.

“Grillin’ Cheese tacos — it can be grilled up and be a vegetarian-type deal — we have a restaurant that does that. They also do a lot of appetizers, and a few are using it as more of a main course. One puts the Grillin’ Cheese on top of meat to make into a sandwich, adding a different texture,” he says. “It’s a really fun cheese for chefs and consumers to enjoy. It offers a lot of different experiences, and for me, that’s what food is about, the experience and enjoyment. One of our chef friends calls it ‘the solution to world peace.’”

• New varieties

Two new cheeses for the grill are set to appear on U.S. store shelves this year, as Champignon North America is launching Rougette Bonfire Grilling Cheeses in two varieties at the Winter Fancy Food Show in San Francisco Jan. 13-15.

The product line includes a mild and creamy soft-ripened cheese, and a semi-soft cheese marinated in herbs which comes in a ready-to-grill pan.

Made in Bavaria, Germany, by Käserei Champignon, these two cheeses have been available under the Rougette brand in Germany for several years — becoming so popular that there have been many product extensions. The “Bonfire Grilling Cheese” sub-brand was created for the U.S. market to help describe how the cheese can be used.

“I think Halloumi has been a mainstay for grilling cheeses, but in some markets, it’s more of an ethnic cheese, so unless people know about Greek cheeses, they’re not as aware,” says Flynne Wiley, CEO, Champignon North America. “As we’ve seen more interest in the market, and our success in launching these items in Bavaria, we thought maybe this is the time. We’ve done market research and see interest in these cheeses, which are very different from Halloumi.”

Wiley describes the round mild and creamy Grilling Cheese as a “crisp Brie” that uses special cultures that allow the cheese to retain its form when grilled.

“The rind gets slightly crispy, and it’s slightly melted inside. It’s very mild, not very salty like Halloumi or the chewy texture like Juustoleipa,” she says.

The semi-soft Marinated Grilling Cheese that comes with a pan also is not too salty with a mild, approachable palate, Wiley says.

“If retained longer in the pan on a grill, it melts and can be used as a dip,” she says. “It can be diced when cold and heated, retaining that form. It depends on how long it’s heated up — it can just be warmed, or heated into a dip.”

Both cheeses come two to a pack and are designed for entertaining.

“The idea is to bring people around the grill and eat cheese in a new way,” Wiley says. “The responses we’ve gotten so far run the gamut. It can be used as an appetizer — they are fairly large pieces to eat in one serving — but people say the (soft ripened cheese) patty would be a great vegetarian option, or an indulgent stack of cheese on a burger. You can cut it and put it on salads, with the creamy texture and crunchy rind, or take it off the grill and serve it with jam and honey at the end of a meal.”

The marinated semi-soft Rougette also has a variety of options, Wiley says.

“It can be an appetizer, a dip topped with cucumbers and onions. Or you can use it as a base and layer with grilled vegetables, cut into it and serve it as a main course. We also have uses where you can pair it on a skewer with watermelon for a nice summer-season recipe.”

Wiley says Champignon has had interest already from some retailers in Texas and hopes to see the products go across the entire United States. The company will be doing in-store demos as well as digital promotions on how to use the cheeses, with May as a target launch date in stores.

“We’re very excited to see our Rougette Bonfire Grilling Cheeses bring people together around the grill this summer,” Wiley says. “Now grill masters and cheese lovers alike can enjoy specialty cheeses in a totally new way.”

CMN


Farmer aid deadline extended, SNAP benefits will continue

Jan. 11, 2019

WASHINGTON — While the ongoing federal government shutdown is causing delays in various market reports and increasing market uncertainty, USDA is allowing some flexibility for certain programs.

USDA recently announced it will extend the deadline for farmers to apply for Market Facilitation Program payments to help offset losses they are experiencing as a result of trade tensions between the United States and other countries, particularly China. Applications were due Jan. 15, but the department’s Farm Service Agency (FSA), which operates the program, closed on Dec. 28 after the agency ran out of funding because of the partial shutdown of the federal government.

U.S. Agriculture Secretary Sonny Perdue says the application deadline will be extended “for a period of time equal to the number of business days FSA offices were closed, once the government shutdown ends.”

At the direction of President Donald Trump, Perdue this week also announced a plan to ensure that low-income Americans have access to the nutrition they need by providing full benefits for participants in USDA’s Supplemental Nutrition Assistance Program (SNAP) for the month of February.

When USDA’s funding expired Dec. 21, SNAP benefits for January were fully funded. States already have received that money and have been distributing it to participants, USDA notes. Since the lapse in appropriations, USDA has been reviewing options available to the department for funding February benefits without an additional appropriation from Congress.

To protect SNAP participants’ access for February, USDA is working with states to issue February benefits earlier than usual. USDA will rely on a provision of the just-expired continuing resolution (CR), which provides an appropriation for programs like SNAP and child nutrition to incur obligations for program operations within 30 days of the CR’s expiration. USDA will be reaching out to states to instruct them to request early issuance of SNAP benefits for February. States will have until Jan. 20 to request and implement the early issuance.

USDA also has ensured the other major nutrition assistance programs have sufficient funding to continue operations into February. The child nutrition programs, including school meals and after-school programs, have funding available to continue operations through March. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) has prior year funding that USDA will begin to provide states this week to facilitate February benefits. Other Food Nutrition Service programs, which provide assistance to the nation’s food banks, the elderly and tribal nations, may continue to utilize grant funding provided prior to the lapse in appropriations. Commodity deliveries to those programs will continue.

Meanwhile, as the shutdown approaches the end of its fourth week, work on National Agricultural Statistics Service (NASS) and Office of the Chief Economist-World Agricultural Outlook Board (OCE-WAOB) reports have been suspended since Dec. 22 and remain suspended. Given the lead time required for the analysis and compilation of Crop Production, Crop Production-Annual, World Agricultural Supply and Demand Estimates (WASDE), Grain Stocks, Rice Stocks, Winter Wheat and Canola Seedings, and Cotton Ginnings reports, those reports will not be released today as originally scheduled even if funding is restored. The date of all NASS and OCE-WAOB releases will be determined and made public once funding has been restored, USDA says.

This week, U.S. Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Agriculture Committee, wrote a letter to USDA to raise concerns and request information regarding the impact of the government shutdown on farmers, families and rural communities.

“I am deeply concerned that the shutdown is having a devastating impact on USDA’s operations, hurting many American farmers and families,” Stabenow says.

Stabenow raises a number of questions, including how the shutdown would affect the implementation of the 2018 Farm Bill, which the president signed into law a day before the government shutdown began.

“Careful and quick implementation of the farm bill is critical to the well-being of American farmers and families,” Stabenow says. “This shutdown will greatly slow implementation of this important bill, making it even more difficult for farmers to make planting decisions for this new crop year.”

The letter also highlights a number of impacts the government shutdown is having on USDA customers across the country, including the closure of thousands of FSA county offices, preventing farmers from signing up for farm bill programs, applying for loans and getting necessary information for their farming operations.

The Center for Science in the Public Interest (CSPI) this week notes that the ongoing federal shutdown has halted FDA’s regular food inspections.

“That puts our food supply at risk. Regular inspections, which help stop foodborne illness before people get sick, are vital,” says Sarah Sorscher, CSPI deputy director of regulatory affairs. “Work to finish rules under the Food Safety Modernization Act has also ground to a halt, impairing efforts to improve produce safety, recall communication and outbreak tracing.”

While FDA claims that it will continue to conduct “for cause” inspections and pursue criminal and civil investigations related to “imminent threats to human health or life,” the agency has posted no new warning letters since the shutdown began more than two weeks ago, CSPI notes.

“That raises concerns that enforcement activities effectively may have stopped,” Sorscher says, noting FDA’s food center is probably more affected by the shutdown than any other part of FDA, due to the center’s very limited dependence upon user fees.

In a tweet this week, FDA Commissioner Scott Gottlieb says, “We’re taking steps to expand the scope of food safety surveillance inspections we’re doing during the shutdown to make sure we continue inspecting high risk food facilities.”

CMN


Trade deals, trade wars could impact dairy exports in 2019

Jan. 11, 2019

WASHINGTON — As the new year starts amid a federal government shutdown, the dairy industry continues to keep tabs on the Trump administration’s policies with trading partners to guide expectations on dairy exports in 2019.

U.S. dairy exports January-October 2018 were up 4 percent by value and 15 percent by aggregate volume over the same period in 2017, according to the latest export numbers available from USDA and the U.S. Dairy Export Council (USDEC). The November export report, which was expected to be released earlier this month, has been delayed due to the government shutdown.

In addition to the increase in exports, the U.S. dairy industry is making progress on a goal, “The Next 5 percent,” to build U.S. dairy exports from the equivalent of about 15 percent of U.S. milk solids to 20 percent, according to Matt McKnight, USDEC’s chief operating officer, in recent commentary published on USDEC’s blog. Through the first 10 months of 2018, U.S. dairy exports were equal to about 16.3 percent of U.S. milk solids, up from 14.7 percent in 2017 and a new record, McKnight notes.

Among the “signposts” that will shape U.S. dairy export opportunities and direction in 2019 are issues dealing with retaliatory tariffs as well as trade deals involving the United States as well as trade deals between U.S. competitors, McKnight says.

In its December U.S. export report, USDEC noted that in the four months since China put additional retaliatory tariffs in place, U.S. whey exports to China were down 36 percent, skim milk powder sales were down 54 percent, whole milk powder sales were down 97 percent and cheese exports were down 56 percent.

McKnight cites a report from Texas A&M’s Center for North American Studies that predicts U.S. dairy export losses from Chinese and Mexican retaliatory tariffs as high as $800 million per year, resulting in U.S. dairy farmers losing up to $2.8 billion per year due to lost sales and lower milk prices.

“We are hopeful for a resolution with Mexico, where the retaliatory tariffs are specifically related to U.S. Section 232 tariffs on steel and aluminum,” McKnight says. “China’s retaliatory tariffs, however, are related to much broader U.S.-China economic differences and likely will take more time to resolve.”

On the plus side, McKnight notes, U.S. and Chinese leaders have agreed to postpone additional tariff hikes that were set to kick in Jan. 1, and they have set a March 2 deadline to reach a deal and avert further escalation of the trade conflict.

“The retaliatory tariffs won’t grind all U.S. dairy exports to a halt and, on their own, do not doom growth aspirations,” McKnight says. “Indeed, U.S. suppliers have had some success redirecting products to other markets like Southeast Asia. But the tariffs make us less competitive in two critical markets and heighten the challenge of getting to The Next 5 percent.”

Trade deals also will have an impact on growing U.S. export dairy prospects, McKnight says.

The U.S.-Mexico-Canada Agreement (USMCA) will help strengthen U.S. dairy export prospects in North America, including mitigating Canada’s trade-distorting practices and tackling geographical indications, he says.

“Whether the beneficial provisions of USMCA foster U.S. dairy export growth in 2019 lies in part with the deal’s congressional approval and implementation,” which is not assured to be this year, McKnight says.

The Trump administration also has announced its intention to start talks with Japan, the United Kingdom and the European Union in 2019. Headway on new trade deals is important, McKnight says, because U.S. competitors are aggressively implementing them. The Comprehensive and Progressive Trade Agreement for Trans-Pacific Partnership (CPTPP) entered into force Dec. 30, and the new EU-Mexico trade agreement is expected to enter into force soon.

“One of the big questions for 2019 is: How quickly will markets shift in response to these competitors’ trade deals,” McKnight says. “The other big question is: Even thought trade negotiations can take considerable time to finalize, will we see U.S. progress in advancing talks with Japan and other markets to match or counter our competitors’ efforts?”

To read McKnight’s entire commentary, visit blog.usdec.org.

CMN



116th Congress convenes as federal shutdown continues

Jan. 4, 2019

WASHINGTON — The 116th Congress is in session as a partial federal government shutdown continues.

As Democrats took control of the House on Thursday after eight years in the minority, members elected Nancy Pelosi, D-Calif., as the new Speaker of the House.

With the majority flip, Rep. Collin Peterson, D-Minn., now is the chair of the House Agriculture Committee after serving as ranking member under the Republican majority.

Meanwhile, in the Senate, Majority Leader Mitch McConnell, R-Ky., welcomed newly elected senators, which increased the Republican majority in that chamber.

House Democrats have said they plan to pass a bill to temporarily fund the federal government, but leaders on the Senate side indicate they will not pass any bills that do not have President Trump’s approval, news reports say.

The funding impasse largely centers on funding for a border wall between the United States and Mexico, with Trump demanding that $5 billion be included for the wall in any spending package Congress sends to his desk.

For the dairy industry, the shutdown has impacted the release of some market data, including the monthly Dairy Products report that was scheduled for release on Thursday.

USDA late last week released an updated assessment of how the lapse in federal funding will affect services and programs now that the shutdown has stretched into the new year.

While some services will carry on, others were discontinued Jan. 1 because available funds have been expended.

Certain USDA activities remain active because they are related to law enforcement, the protection of life and property, or are financed through available funding (such as through mandatory appropriations, multiyear discretionary funding, or user fees). During the first week of the shutdown, 62 percent of USDA employees have been either exempted or excepted from shutdown activities. If the shutdown continues, this percentage would decrease, and activities would be reduced as available funding decreases, USDA says.

Among the USDA activities that ceased Jan. 1 are:

• USDA Farm Service Agency county offices closed at the end of business Dec. 28, 2018.

• National Agricultural Statistics Service statistics, World Agricultural Supply and Demand Estimates report, and other agricultural economic and statistical reports and projections.

• Economic Research Service (ERS) Commodity Outlook Reports, Data Products, research reports, staff analysis, and projections. The ERS public website could be taken offline.

• Provisions of new rural development loans and grants for housing, community facilities, utilities and businesses.

• Recreation sites across the U.S. National Forest System, unless they are operated by external parties under a recreational special use permit, will be closed. While technically closed, many will still be physically accessible to visitors at their own risk, but without staffing at ranger stations and without access to facilities such as public restrooms.

• New timber sales.

• Most forest fuels reduction activities in and around communities.

• Assistance for the control of some plant and animal pests and diseases unless funded by cooperators or other non-appropriated sources.

• Research facilities except for the care for animals, plants and associated infrastructure to preserve agricultural research.

• Provision of new grants or processing of payments for existing grants to support research, education and extension.

• Most departmental management, administrative and oversight functions, including civil rights, human resources, financial management, audit, investigative, legal and information technology activities.

• Mandatory audits will be suspended and may not be completed and released on the date mandated by law.

CMN


CPTPP enters into force; USTR outlines Japan trade objectives

Jan. 4, 2019

OTTAWA, Ontario — The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force Dec. 30, 2018, among the first six countries to ratify the agreement — Canada, Australia, Japan, Mexico, New Zealand and Singapore. CPTPP will enter into force for Vietnam Jan. 14, 2019, and for the remaining countries — Brunei Darussalam, Chile, Malaysia and Peru — 60 days after they complete their respective ratification processes.

The 11 countries signed the CPTPP March 8, 2018, in Santiago, Chile. The agreement includes countries previously involved in the Trans-Pacific Partnership (TPP) agreement, minus the United States, which abandoned the TPP agreement soon after President Trump took office in early 2017. The CPTPP agreement incorporates many of the elements that were negotiated as part of the TPP, but with some differences, as participants agreed to suspend 22 items from the original TPP agreement as they concluded negotiations in January 2018.

The economies included in the CPTPP agreement represent 495 million consumers and account for an estimated 13.5 percent of world gross domestic product (GDP), worth a total of US$10.6 trillion.

Meanwhile, the United States has been planning to start bilateral negotiations with Japan. The Office of the United States Trade Representative (USTR) late last month released negotiating objectives for a U.S.-Japan trade pact.

The International Dairy Foods Association (IDFA) notes that Japan is U.S. dairy’s fourth-largest international market, representing sales of more than US$290 million. Several of the administration’s goals align with IDFA’s requests to USTR, specifically measures that focus on:

• Promoting equitable access to Japan’s agriculture market by eliminating practices such as discrimination toward U.S. agricultural goods, trade distortion and prices cutting activities by state-owned enterprises;

• Eliminating or reducing tariffs on U.S. agricultural products;

• Eradicating technical barriers to trade, such as by providing reasonable adjustment periods for U.S. import-sensitive agricultural products; and

• Preventing barriers in market access for U.S. products through improper use of Japan’s system for protecting or recognizing geographical indications.

IDFA adds that USTR included several other agricultural goals of interest to dairy companies, including:

• Engaging in close consultation with Congress on agricultural products before initiating tariff reduction negotiations;

• Promoting greater regulatory compatibility to reduce burdens associated with unnecessary differences in regulations and standards, including through regulatory cooperation when appropriate; and

• Providing for enforceable and robust commitments to sanitary and phytosanitary measures that build upon World Trade Organization rights and obligations.

The earliest day that official negotiations can begin is Jan. 20, according to Trade Promotion Authority rules. IDFA says it will remain engaged throughout the negotiations.

CMN


Emmi Roth acquires Great Lakes Cheese’s Seymour, Wis., plant

Jan. 4, 2019

FITCHBURG, Wis. — Emmi Roth is expanding with the acquisition of Great Lakes Cheese’s Blue cheese plant in Seymour, Wisconsin.

With the purchase of the Great Lakes Cheese plant, Emmi Roth will not only be able to expand its Blue cheese production, but also increase its capabilities to develop new Blue cheese products and packaging solutions.

“We believe in the Blue cheese category and see this as an opportunity to strengthen our position in the market,” says Tim Omer, Emmi Roth president and managing director. “This acquisition gives us access to a talented group of cheesemakers and provides us with additional resources to expand our current production and develop new Blue cheese products for our customers.”

Emmi Roth will assume ownership of Great Lakes Cheese’s Seymour factory, related land, production facility and equipment Feb. 28.

“We know Emmi Roth to be as passionate about cheese and as committed to its employees as we are,” says John Epprecht, vice president, Great Lakes Cheese. “They are well positioned to guide Seymour’s business and its dedicated workforce into the next stage of growth.”

Great Lakes Cheese’s Seymour plant currently employs 50 people; Emmi Roth will offer continued employment to all employees at the Seymour location.

This acquisition will grow Emmi Roth to four locations in Wisconsin, also including Monroe, Platteville and Fitchburg, employing nearly 300 people.

CMN



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Today's Cheese Spot Trading
January 18, 2019


Barrels: $1.2000 (+1 1/2)
Blocks: $1.4000 (+1 1/4)


Click here for more market activity
Cheese Production
U.S. Total Oct.
1.119 bil. lbs.


Milk Production
U.S. Total Nov.
17.370 bil. lbs.

Guest Columnist

Dairy and the Evers administration

John Umhoefer, Wisconsin Cheese Makers Association

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