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Rewards and challenges mark
path to artisan cheese success

July 22, 2016

By Alyssa Mitchell

MADISON, Wis. — With the ever-increasing variety of handcrafted, innovative and flavorful artisan cheeses available at retail today, making a good specialty cheese might appear to be a fun, profitable career. While those with the passion certainly find the job rewarding, behind the scenes are myriad financial, production, logistical and regulatory challenges cheesemakers face to get their product off the ground.

Before beginning to make cheese, aspiring artisans need to do their research, experts say.

Location is a primary factor. Selecting a good plant location and doing the homework on how to dispose of waste and wastewater is important, says Jim Dimataris, director of processor relations for the California Milk Advisory Board (CMAB).

“This is a requirement anywhere you operate and plays into having good sustainable practices,” he says. “Next, make sure to get it approved by your department of food and agriculture.”

Dimataris recommends cheesemakers develop a working relationship with their state inspector.

“They will assist you in understanding the construction guidelines, sanitation requirements and standards of identity, including where equipment should be located, where walls are required, etc.,” he says.

Ansally Stuyt, co-owner of Stuyt Dairy Farmstead Cheese Co. LLC, is familiar with the challenges of plant layout. Stuyt and her husband, Rick, own a dairy farm and adjacent cheese plant in Escalon, California, and milk 500 Holsteins. They made their first batch of cheese last fall and sold it in late December last year. The company already is in the process of expanding due to increasing demand as well as logistical issues.

“Our processing room is large, but our aging room is too small,” Ansally Stuyt says, noting she originally planned on doing cut-and-wrap in the plant’s processing room before an inspector told her that wasn’t allowed. She also is facing challenges with cold storage space.

“We’re having to cut and wrap in our aging room, which is much smaller,” she says. “We were so focused on making cheese when we started that we didn’t think of that. We looked at some other cheese operations, but they were larger, so we thought, ‘Oh, we’re small, we don’t need that much space!’”

With the expansion — which will bring the existing 800-square-foot plant to 1,200 square feet — the aging room will be about one-third larger, and the former aging room space will be designated for cut-and-wrap, Stuyt says.

In Wisconsin, Anna Landmark and Anna Thomas Bates, co-owners of Landmark Creamery, currently are circumventing some of these issues by partnering with existing operations to utilize their production space. The two-woman operation — Landmark is a licensed cheesemaker while Thomas Bates handles sales and marketing — primarily makes sheep’s milk cheeses in addition to some cow’s milk cheese and has rented space at Clock Shadow Creamery and Cedar Grove Cheese, both owned by Bob Wills. Now the duo is making cheese at Thuli Family Creamery in Darlington, Wisconsin.

Landmark and Thomas Bates both moved to Albany, Wisconsin, in 2009 but didn’t meet until they found themselves at a potluck for Green County Women in Sustainable Agriculture three years later. The two quickly became friends. After earning a $2,500 scholarship from Wisconsin Cheese Originals in 2012, Landmark plunged into full-time cheesemaking in August 2013 and the two decided to partner on Landmark Creamery, with Thomas Bates overseeing the marketing and sales side.

Thomas Bates notes their decision to rent space in existing operations has its pros and cons.

“It’s a great way to get started,” she says, “but we’re finding as we grow, it’s challenging to become more efficient because we’re not close to home, so it’s a goal to get our own aging and production space.”

In addition to factors such as location and equipment, up-and-coming cheesemakers should be familiar with the market they are trying to sell in.

Tom Johnson, manager of the Master of Professional Studies in Dairy Products Technology program at California Polytechnic State University, is a former cheese company owner. He and his wife, Kristi, started the now-defunct Bingham Hill Cheese Co. in 1999.

“I think many people view artisan cheesemaking as a noble pursuit; you’re providing good, clean products to the community,” Johnson says. “But at the end of the day, it’s about making and selling a product, packaging, distribution — it’s a very complicated affair.”

Johnson says aspiring cheesemakers should keep in mind that the retail cheese case is already full.

“You need to ask yourself why someone would choose your product over what’s already there,” he says. “Think about who would buy your product and why.”

Johnson notes when he and his wife originally wrote the business plan for their cheese operation, they planned on making Cheddar and Monterey Jack.

“We realized there was no way to compete on price with the larger manufacturers,” he says. “We started with Blue cheese. It had a high price point in the market. I urge aspiring cheesemakers to look at high-priced niches where they can be rewarded for doing something by hand.”

Johnson recommends cheesemakers take a close look at the existing products in the retail cheese case for the category they want to compete in.

“Note what stands out to you and why,” he says. “Purchase some of your top picks. Get together with trusted family and friends and discuss what appeals to you from the flavor to the packaging. Compare the quality of the product and packaging to its price point.”

Johnson, like many specialty cheesemakers, started making aged cheese, which led to a major realization.

“If you’re making a cheese that’s aged for six months, you’re waiting at least that long to put it on the market to make a profit, and you need to keep the business running until then,” he says.

Johnson says when he made his first batch of low-moisture Blue, Rustic Blue, he entered it into the American Cheese Society (ACS) annual competition, and it won best in its category.

“We thought this would set us on a path to growth,” he says. “We didn’t think about how we would need to stockpile cheese for six months.”

He adds that for cheesemakers making a longer-hold cheese, it can be beneficial to diversify the product line with a shorter-hold cheese for a quicker sales turnaround.

“We started making fresh cheese as well, and that helped to balance things out,” he says.

However, it’s important not to try to make too many products and attempt to be “all things to all people,” says Margaret Peters-Morris, owner and cheesemaker at Glengarry Fine Cheese in Lancaster, Ontario, and a longtime consultant to cheesemakers across the United States and Canada.

“Make a few good products, and make them well,” she says.

Other factors can impact an operation’s bottom line, such as experimentation in the make process.

“In the development stages, we threw away a lot of product,” Johnson says. “You really need to build that into your financial plan, and we didn’t.”

Stuyt notes sampling to get the product into consumers’ mouths also is important.

“You need to be ready to give away a lot of your product so people can try it,” Stuyt says. She notes sampling also takes time because it’s important for consumers to put a face to the cheese they are trying, so Stuyt herself likes to be present to sample her own cheese.

Peters-Morris recommends artisan cheesemakers do a combination of direct-to-consumer sales and also try to partner on wider distribution.

Meanwhile, while success and growth are obvious goals for aspiring cheesemakers, increasing demand can be tricky to navigate.

Johnson says there comes an awkward point in the growth of a cheese company between being a small, local startup and a company with national distribution — one that some operations may not survive.

“You may do well on a small, local scale, selling to local stores and restaurants, or on a larger scale across the U.S.,” he says. “In between, there are many cheesemakers who are making too much product for the local market but not yet enough for widely expanded distribution. This is a no man’s land. I’ve found it’s easier to either be smaller or larger but difficult to be in the middle.”

Thomas Bates says running the operation with just two people can be very challenging and takes much more time than she first realized.

“It’s definitely a labor of love,” she says.

She adds Landmark Creamery is not yet to a point where it can afford to hire additional employees.

For those who are ready, bringing the right people into the operation is important, Dimataris says.

“A processing plant is only as good as its people, so hiring good and experienced employees that have clean work habits will help ensure success,” he says. “Develop a solid plan for dealing with crisis management, including product recalls. Have this in place from day one and make sure your entire team is fully trained on execution and, more importantly, preventative measures to avoid any potential crises from occurring.”

At the same time, don’t underestimate the time and expense it takes to satisfy regulators, Johnson notes.
“The regulatory authorities are not your friends,” he says. “They’re there to protect the public health, and your interests are not at the top of their list.”

Developing a distribution plan and knowing the costs also is critical to a successful operation.

“You must understand the cost of using a distributor, as it will increase your retail pricing substantially,” Dimataris notes. “Before quoting your wholesale price to the distributor, know what your cost for their services are first, then make sure you have built in enough margin to deal with various retail issues that can and do come up.”

Johnson agrees, noting some things that are paramount when working with a distributor include product consistency, supply, transportation and the ability to support the distributor’s sales efforts, such as offering sampling and promotions.

In the midst of all of these startup challenges, aspiring cheesemakers are not alone.

Thomas Bates says Landmark Creamery occasionally pairs up with other cheesemakers — such as Hook’s Cheese — in order to meet a product quota for distribution.

“We’re in an area that is rich with artisan cheesemaking, and everyone is really helpful,” she says. “We view each other as colleagues more than competitors.”

Proximity to research areas and universities also is helpful, Peters-Morris notes. Short courses offered by academic institutions can help to keep cheesemakers current on the latest technologies, regulations and strategies for their business.

In addition to partnering with existing producers, industry organizations and other resources are available for assistance.

Nora Weiser, executive director, ACS, notes the organization this year released a Best Practices Guide for Cheesemakers as an easy reference for busy cheesemakers — especially small to mid-size producers — that can be readily accessed.

“Regulatory agencies and academics provide information in great detail, but it is often buried within volumes of text,” Weiser says.

The Best Practices Guide for Cheesemakers gleans the key requirements, suggestions and practices from a vast sea of information and attempts to condense them into a more easily digestible format written in more accessible language.

Weiser adds the guide is not a static document and will continually grow and change based on feedback from members, academics, regulators and others.

Interested parties either can purchase a printed copy online or download the guide for free on ACS’s website.

Meanwhile, state organizations like CMAB, the Wisconsin Milk Marketing Board (WMMB), the Wisconsin Specialty Cheese Institute (WSCI) and others also can provide insight, resources and peer-to-peer networking and collaboration.

“WMMB supports adding the Wisconsin Cheese logo on packaging and marketing materials, demo support for retail sampling, trade show booth support and couponing,” says Abby Despins, director of national product communications, WMMB.

WMMB also provides Wisconsin cheese companies with access to retail promotion materials, market information, a cheese and dairy photo library, dairy product safety information, food labeling resources and more.

Meanwhile, WSCI is an organization for artisan and specialty cheese producers based on networking and sharing member resources and information that is valuable for startup companies.

Weiser says the artisan cheesemaking business is not for the faint of heart, and a passion for the craft is essential.

“It takes time. There are a lot of steps and a lot of information you need to know,” she says. “It’s not an easy thing to do well and successfully.”

ACS’s annual conference and competition will take place next week in Des Moines. Weiser notes the industry collaboration and information provided at the conference is invaluable, particularly to small and mid-size producers.

“Even though there are competitors, there’s a lot more collaboration than competition,” she says.
She adds the annual ACS Judging & Competition is a great way for up-and-coming cheesemakers to get feedback on their products.

“Aside from the award aspect, you can get meaningful feedback from the judges to improve your product,” she says.

Peters-Morris says aspiring artisans should keep in mind that getting a specialty cheese operation off the ground will take more time, planning and money than expected.

“Do your homework so you get it right the first time,” she says. “It’s very costly to try to undo something.”

She adds getting on-the-ground experience in an existing plant also can be helpful.

“Learn from others — and never stop networking!” she says.

CMN


Mascarpone makers aim to
spread appeal beyond dessert

July 22, 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: Mascarpone.

By Rena Archwamety

MADISON, Wis. — Mascarpone, a fresh and slightly-sweet soft cheese made from coagulated cream, traditionally was made only for special occasions and specific times of the year.

“Years ago in Italy, Mascarpone was only made in the winter. There was not a lot of refrigeration, and they had to keep the cheese cold. It was really consumed in the northern cities, mostly around Christmastime with Pannetone or in Tiramisu,” says Errico Auricchio, president of BelGioioso Cheese Inc., Green Bay, Wisconsin.

Mascarpone was first introduced in Italy in the late 1800s as a gift back to the farmers for their milk each year around Christmastime, according to Fred Wolff, production manager for Schuman Cheese’s Cello Mascarpone, Turtle Lake, Wisconsin.

“The Italians loved the basic Mascarpone flavor and used it to make the all-famous Tiramisu that became instantly popular,” he says. “Mascarpone has grown in Italy to be a common staple of the household to spread on bagels, toast, fruits and many other fine desserts. Mascarpone is still relatively new to many in the United States but rapidly growing in popularity with many applications.”

Mascarpone has seen growth in the U.S. retail market over the past several years, though usage still is small compared to other cheese varieties. Over the last year, 2.37 million pounds of Mascarpone were sold at retail, up 12.4 percent from a year ago, according to IRI data provided by Dairy Management Inc. (52 weeks ending June 12, U.S. multi outlet plus convenience).

From 2010-2015, Mascarpone had a compound annual growth rate of 5.4 percent. However, the IRI data shows that only 1.8 percent of U.S. households buy Mascarpone, and the average buyer makes only 1.5 trips to the store each year for the cheese.

• Varied applications

One way companies are working to expand sales of Mascarpone is through promoting it as an everyday item like butter, not just as an ingredient for specialty desserts.

“Dessert is its main application, but Mascarpone is also versatile in both sweet and savory recipes,” Auricchio says. “Mascarpone is a lighter version of butter, with half the calories ... we promote it as a substitute for butter. The best way to use it its to spread on bread; my favorite is with jam for breakfast.”

In fact, BelGioioso has an ongoing campaign, “50 Ways to leave your Butter,” which suggests 50 different uses for its Mascarpone — from melting on pancakes, to adding to pasta sauces, to serving with cookies or fresh fruit. The company also recently introduced 3-ounce single-serve Mini Mascarpone cups designed for convenience and everyday use.

“Mascarpone is a delicious, all-natural spreadable cheese, and consumers are tasting and seeing it more often in recipes and want to try it themselves,” says Jamie Wichlacz, marketing public relations manager, BelGioioso Cheese Inc. “Our new Mini Mascarpone cups are the perfect trial size, and consumers are enjoying its light, appealing flavor as a healthy spread.”

Mascarpone has become more popular year-round as people are discovering new applications, agrees Debbie Crave, vice president of Crave Brothers Farmstead Cheese, Waterloo, Wisconsin.

“People are talking about it. I used to notice a spike in Mascarpone for sure at Christmas and Easter, during the holidays,” Crave says. “But boy oh boy, do I think it is becoming more mainstream.”

Crave notes that a restaurant in Waterloo uses the company’s Mascarpone on a sweet apple pizza, while the local Catholic school serves it on top of vanilla wafers as a snack for its students. Savory applications also recently have gained traction.

“In a recipe contest, we had a fig, sweet onion, candied bacon and Mascarpone pizza that’s just to die for,” Crave says, adding that the company commonly serves this savory pizza at its events. “It’s interesting to see people becoming more comfortable with it and trying different things. In restaurants, chefs are using it, and people go home and try it.”

In restaurants, Mascarpone most consistently appears on menus in full-service Italian restaurants, but it also is making limited appearances on some independent Italian quick service and fast casual category restaurant and food truck menus, according to IRI data from Dairy Management Inc. Approximately 65 percent of total Mascarpone mentions on menus are dessert items, particularly Tiramisu, data from the second quarter of this year show. However, Mascarpone also appears on the savory side in entrees and appetizer menu items, from risottos and pasta dishes to flatbread and pizza, where it often is paired with seafood or artichoke ingredients.

“Originally, Mascarpone was used in foodservice, and thanks to the savoir-faire of Italian restaurants, consumers were inspired to reproduce the meals they had tried in restaurants at home,” says Elena Umanskaya, vice president of marketing, Lactalis American Group Inc., Buffalo, New York, which offers both imported and domestic varieties of Galbani Mascarpone.

Lactalis USA suggests some applications of Mascarpone can include adding richness to main courses such as quiche, pasta, meat or fish plates, or using it as a spread for sandwiches, preferably together with salmon, olives or other condiments.

Wolff notes that Schuman Cheese’s teams experiment using Mascarpone in a variety of different applications.

“It has been a wonderful journey from perfecting the traditional Tiramisu and other sweet desserts to creating very rich soups, sauces and dips, all the way to the most flavorful salad dressings,” Wolff says. “Our customers can find themselves on that same journey using our Cello Mascarpone and getting creative to expand their families’ experiences with food.”

• Fresh quality, authentic taste

The simple ingredients used in Mascarpone have not changed much over the last century, though the process has been updated to modern standards.

“In the old days, you added citric acid to cream and put it on a cloth to drain the excess whey to make Mascarpone. Now we remove the whey with ultrafiltration, which removes whey in a sanitary environment so the cheese lasts 3-4 months,” Auricchio says, explaining that Mascarpone actually is closer to butter than cheese as it doesn’t use any rennet.

Wichlacz adds that BelGioioso makes its Mascarpone with the cream it skims off of fresh milk the company receives each day.

“From when we receive the milk to how quickly this product is made, it really stands out as one of the freshest available, made the same day the milk is received,” she says.

Crave Brothers’ Mascarpone also is made from milk from the company’s farm that is “hours old,” and it contains no fillers or sugar.

“All it is is sweet cream acidified — cooked sweet cream,” Crave says. “A visitor asked me, ‘do you add sugar?’ No, those are natural milk sugars.”

Mascarpone’s simplicity adds to its appeal, especially to consumers looking for clean labels and natural foods. Lactalis American Group says its Galbani Mascarpone aligns with consumers’ desire for a natural, authentic product.

“There is an undeniable growing interest in unprocessed cheese and its high quality ingredients, affordability and variety,” Umanskaya says. “Galbani Mascarpone, domestic and imported, is addressing these concerns: Galbani Mascarpone is all-natural and perfectly represents the Italian tradition.”

BelGioioso also believes Mascarpone can act as an all-natural alternative to other foods or ingredients.

“Consumers are pushing the trend of clean ingredients with no additives, and our Mascarpone has always been made with three ingredients and no preservatives,” Wichlacz says. “It’s a delicate cheese, so we educate, providing suggestions for storage and usage. Consumers love that it tastes indulgent without the guilt and tell us that Mascarpone is becoming a staple in their kitchens.”

Some companies offer different varieties of Mascarpone aimed at different home or foodservice use. In addition to its classic version, BelGioioso offers Crema di Mascarpone, with a more whipped texture, preferred by some foodservice professionals, as well as a Tiramisu-flavored Mascarpone that can be used as a ready-made frosting or dessert spread.

Lactalis USA offers Galbani Mascarpone Fresca, made in the United States, and Galbani Imported Mascarpone, made in Italy. Galbani Mascarpone Fresca contains cream, milk and nonfat milk, while Galbani Imported Mascarpone contains just cream and milk. A double concentration process is used with Galbani Imported Mascarpone, giving it more creaminess, a cooked milk taste and a special straw color. The company currently is in the process of revamping all of its packaging for Galbani Imported Mascarpone to reinforce the Italian tradition and authenticity.

“Galbani is Italy’s No. 1 cheese brand, and with more than 130 years of craftsmanship, Galbani has managed to introduce to American consumers the real taste of Italy,” Umanskaya says. “Tradition, authenticity and freshness are the key differentiation elements of Mascarpone from our competitors.”

Schuman Cheese offers both Rich and Creamy Mascarpone, its most popular variety with a dairy fresh flavor, sweet notes and hint of nutty finish, as well as Thick and Smooth Mascarpone, which has a dairy fresh flavor and more of a neutral sweetness.

“We find this works well in industrial applications for pasta fill and dessert applications, where the customer wants the Mascarpone to perform and carry the dairy notes but allow their main dessert flavor to be the highlight of the final product,” Wolff says of the Thick and Smooth variety. “This product offers some customers in our global market a delightful difference of fresh dairy taste in Mascarpone.”

Schuman Cheese also recently introduced a new 8-ounce Mascarpone cup that has been popular among retail consumers, and it has redesigned all of its Cello brand packaging with a cleaner, more contemporary look.

Wolff says demand for Cello Mascarpone is rapidly growing in both foodservice and retail areas to make high-end desserts and premium pasta sauces.

“Trial is a key tactic in our marketing strategy, because we truly do believe that our products have distinct flavors and textures, and there is no better way to communicate this than to have consumers experience it for themselves,” he says. “Top chefs and great cooks around the world are finding how this versatile product can quickly become their secret ingredient.”

CMN


FDA releases summary on
raw milk cheese sampling

July 22, 2016

WASHINGTON — FDA on Thursday released a summary of its raw milk cheese sampling assignment, part of a larger package covering FDA’s overall approach to sampling.

FDA in 2014 set out to collect and test cheese made from unpasteurized milk, also referred to as raw milk cheese, aged 60 days as part of a new proactive and preventive approach to sampling with the ultimate goal of keeping contaminated food from reaching consumers.

FDA says its new approach centers on the testing of a statistically-determined number of samples of targeted foods over a relatively short period of time, 12 to 18 months, to ensure a statistically-valid amount of data are available for decision making. This approach helps the agency determine if there are common factors, such as origin, variety or manufacturing practice, associated with any pathogen findings, FDA says.

FDA issued the raw milk cheese assignment in January 2014 along with two others (for sprouts and avocados) as the initial commodities under its new sampling model. FDA collected 1,606 raw milk cheese samples (exceeding its target by six samples).

Of the 1,606 raw milk cheese samples collected and tested, 473 samples (29 percent) were domestic samples and 1,133 samples (71 percent) were of international origin. FDA sought to design its sampling plan to approximate the ratio of domestically-made versus imported product on the U.S. market but was unable to do so in this case because the federal government does not track production volume of raw milk cheese, the agency says, noting USDA’s Economic Research Service tracks the supply and commercial use of cheese in the United States but has no figures specific to raw milk cheese.

FDA tested samples for the presence of Salmonella, Listeria monocytogenes, E. coli O157:H7 and Shiga toxin-producing E. coli, as well as for generic E. coli. The overall contamination rate for each of the pathogens was less than 1 percent, and the overall contamination rate for generic E. coli was 4.5 percent, FDA says.

FDA notes that while the prevalence for generic E. coli was comparatively high, it bears mention that it rarely causes illness even though it may signal unsanitary processing conditions.

Because the contamination frequency among the pathogens was below 1 percent, FDA was limited in its ability to detect differences in contamination rates based on the type of cheese or its origins (i.e., domestic versus import), even with the large number of samples, the agency says.

In addressing the violative samples of domestic raw milk cheese, FDA worked with the responsible firms to carry out recalls as appropriate and followed up with facility inspections. In addressing the violative samples of imported raw milk cheese, FDA refused entries of raw milk cheese and placed the responsible firms/products on import alert. FDA also worked with a regulatory partner in the European Union to address further follow-up of manufacturing locations abroad.

FDA says Listeria monocytogenes in cheeses, particularly semi-soft varieties, remains a concerns, as demonstrated by the nearly 1 percent contamination rate in semi-soft cheeses. FDA says it believes this contamination rate may be related to product handling practices or procedures.

“Given the serious public health implications of Listeria monocytogenes contamination associated with ready-to-eat foods, FDA plans to continue to work with the cheese industry to identify and correct practices that lead to Listeria monocytogenes contamination in cheese,” the agency says.

The American Cheese Society (ACS) says the report shows a safe track record for raw milk cheese made by licensed producers and aged at least 60 days.

The release of the report prior to ACS’s Preventive Controls Working Group meeting next week in Des Moines allows the group to be informed by these latest findings, ACS notes. Dr. Nega Beru of FDA’s Office of Food Safety will address this report and share other important regulatory updates July 29 in Des Moines at the ACS Annual Conference: Cheese in the Heartland.

Nora Weiser, executive director, ACS, notes the report’s findings of violations were primarily in soft-ripened cheeses, showing that a “one-size-fits-all” approach to regulation for cheese may not be appropriate. She says ACS’s Preventive Controls Working Group also will discuss this next week and is encouraged that FDA appears to recognize not all cheeses are the same.

John T. Allan, vice president of regulatory affairs and international standards for the International Dairy Foods Association (IDFA), says FDA’s results provide further support for the “well-founded idea that detecting generic E. coli does not mean you are more likely to find disease causing, pathogenic E. coli.”

He adds IDFA also is pleased that FDA recognizes in the report that higher levels of generic E. coli may signal unsanitary conditions during production of the cheese, which means that it doesn’t always indicate unsanitary conditions.

“As such, we continue to support FDA’s decision earlier this year to pause enforcement of its current strict generic E. coli standard as the agency re-evaluates its scientific validity and usefulness,” Allan says. “Enforcing such a standard could lead to the destruction of perfectly safe cheese, which would be quite costly — particularly for smaller artisan cheesemakers — and is clearly not an efficient use of limited FDA resources.”

To view the report, visit www.fda.gov/downloads/Food/ComplianceEnforcement/Sampling/UCM512217.pdf.

CMN


Whitehall buys former Castle Cheese facility

July 22, 2016

WHITEHALL, Wis. — Whitehall Specialties has acquired the property, buildings and equipment of the former Castle Cheese manufacturing facility in Slippery Rock, Pennsylvania.

Whitehall says the acquisition represents the company’s fourth processed cheese manufacturing facility. The facility is expected to be operational this fall and will provide additional capacity as the company meets the growing demands of its customer base both domestically and internationally.

Whitehall says the plant location will make servicing East Coast customers faster and more efficient, while also freeing up additional capacity in its three Wisconsin facilities, allowing Whitehall Specialties to continue to deliver a superior customer service experience.

“The expansive facilities and access to an ample, skilled workforce are ideally suited to support our future growth plans,” says Karl Kramer, president and CEO, Whitehall Specialties. “Additionally, its location will enable us to better service our customers in the eastern U.S. while allowing for increased flexibility and capacity throughout our four-plant network.”

Whitehall Specialties is a world leader in the custom non-standardized and processed cheese category, producing a broad line of substitute, imitation, blends and cheese products sold across the United States and in more than 30 countries worldwide.

CMN


Edelweiss Creamery makes plans to expand as demand increases

By Kate Sander

MONROE, Wis. — Traditionally-made 180-pound Swiss Emmentaler wheels make for an impressive piece of cheese, but in the world of modern cheesemaking they are few and far between. In fact, Bruce Workman, owner, Edelweiss Creamery, believes his is the only creamery in the nation to make the cheese in traditional copper kettle vats.

Since 1936, the plant that now is Edelweiss Creamery has stood in Wisconsin’s Green County, a southern Wisconsin county known for its Swiss heritage and talented cheesemakers. It is here that Workman crafts his Emmentaler and other specialty cheeses.

“There used to be over 200 little cheese plants in this county, all producing authentic copper-kettle Swiss,” Workman says. “Over the years, as cheesemaking became industrialized and companies worked to reduce their labor costs, it was abandoned. I set out to bring it back.”

While others make Swiss wheels without copper kettles, the copper is critical for producing authentic Swiss wheels, Workman says.

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Labeling bill passes House,
awaits president’s signature

July 15, 2016

WASHINGTON — The U.S. House of Representatives yesterday passed legislation that will set a uniform national mandate for labeling foods produced with GMO ingredients. This week Senate Bill 764 passed the House by a vote of 306-117 after passing the Senate last week 63-30. (See “Senate votes to pass bill on biotech food labeling” in last week’s issue of Cheese Market News.) It now heads to President Obama’s desk, where it is expected to be signed into law.

The bill requires the disclosure of GMO ingredients in all foods and allows companies to do so either by stating this on a label or including a website or code consumers can scan to find this information. The bill has drawn praise from industry groups for providing information consumers seek while not stigmatizing food and ingredients made with biotechnology. Meanwhile, some consumer groups have argued that the labeling options do not provide enough clear, transparent information to the public.

“I have said this is the most important food and agriculture policy debate of the last 20 years,” says Senate Agriculture Committee Chairman Pat Roberts, R-Kan., who worked with Ranking Member Debbie Stabenow, D-Mich., to craft the bipartisan legislation, said following the bill’s passage in the House.

“I am confident we have put forward a comprehensive solution that considers all aspects of our food production and delivery system while keeping the consumer top of mind,” Roberts adds. “Averting a confusing patchwork of state labeling mandates serves the American economy, farmers and ranchers, and consumers well.”

Jim Mulhern, president of National Milk Producers Federation (NMPF), says the passage of this bill by Congress reasserts the federal government’s role in regulating food labeling and ends potentially conflicting state laws in this area, such as Vermont’s GMO labeling law that took effect July 1.

“National Milk greatly appreciates the efforts of members of both House and Senate on this issue, which unfortunately has been one of the most challenging — and important — food policy issues of the 21st century,” Mulhern says. “We strongly urge President Obama to sign this legislation into law. Once this process is complete, we can begin moving beyond specious arguments over labels, terminology and the absence of claims, and work to address real food safety and nutrition issues, and further the sustainability of our food system.”

Clay Hough, senior group vice president and general counsel of the International Dairy Foods Association (IDFA), says Vermont’s requirements to disclose GMO ingredients will be preempted once the federal bill is enacted.

“The bill passed by the House today includes explicit language that preempts Vermont’s GMO labeling law,” Hough said following yesterday’s House vote. “We understand and hope that President Obama will sign the bill into law soon.”

The Coalition for Safe Affordable Food (CFSAF), whose members include NMPF, IDFA and the Grocery Manufacturers Association (GMA), applauded the House for passing the legislation.

“After more than two years working with Senators and House members from both parties, today’s vote is a resounding victory not only for consumers and common sense, but also for the tremendous coalition of agricultural and food organizations that came together in unprecedented fashion to get this solution passed,” says Pamela G. Bailey, president and CEO of GMA and co-chair of CFSAF.

The Organic Trade Association (OTA) has praised the legislation for its recognition USDA certified organic as the “gold standard” for transparency and non-GMO status.

“While not perfect, this bill covers thousands more products than Vermont’s GMO labeling law and other state initiatives,” say OTA CEO and Executive Director Laura Batcha and Board President Melissa Hughes.

David Just and Harry Kaiser, professors at Cornell University’s Dyson School of Applied Economics and Management, also applauded the House vote, which they say recognizes the positive impact that GMO foods have on the poor and the environment. Just is a professor of behavioral economics who has testified on Capitol Hill about agricultural biotechnology and engaged with the media on the need to avoid injecting unnecessary alarm into GMO labeling efforts. He will help instruct a class this fall on “Science and the Politics of the GMO.” Kaiser teaches and conducts research in the areas of price analysis, marketing and quantitative methods. He directs the Cornell Commodity Program Research Program and conducted some of the first research investigating the economic impacts of climate change on the U.S. agricultural sector.

In an op-ed the two professors published in The Hill earlier this week, they expressed home that representatives do not lose sight of the positive impacts GMO foods have on the environment and the poor.

“Since GMO crops have become widespread, the U.S. has seen environmental benefits form weed and pest resistant GMO crops .... Fewer chemicals in our atmosphere, and soil staying on farm fields instead of washing into streams and lakes, mean widespread benefits for all of us that use waterways recreationally, consume seafood or drink water,” they says.

“The impact of GMOs on the poor is also important,” Just and Kaiser add, pointing out that approximately one in nine people is malnourished worldwide and one in seven people in the United States is considered food insecure. “How can we feed these people in need of food today and ultimately meet the needs of a global population that is headed toward 9 billion? A key element of this solution lies in the process that has enabled us to feed the world’s population as it grew from 1 billion to 7 billion over the past 165 years: the integration of science in agriculture.”

CMN


As regulations loom, industry
gets proactive on food safety

July 15, 2016

By Alyssa Mitchell

EGG HARBOR, Wis. — As FDA fully implements the 2011 Food Safety Modernization Act (FSMA), dairy industry stakeholders must be proactive in readying their plants for inspection and maintaining solid records and a food safety plan, stakeholders said Tuesday during a session at the Wisconsin Dairy Products Association’s Dairy Symposium here.

In the session, “Food Safety in the 21st Century,” panelists shared regulatory, industry and common-sense perspectives on how food safety is becoming increasingly paramount.

Dennis Gaalswyk, Grade A milk safety, senior milk sanitation officer, FDA, provided an overview of some of the key regulations under FSMA that are coming down the pipeline and will affect dairy processors.

Gaalswyk particularly honed in on FDA’s preventive controls rule. The agency released its final rule on Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food in September 2015, and compliance dates for some businesses begin this September.

Under the rule, covered facilities must establish and implement a food safety system that includes an analysis of hazards and risk-based preventive controls. The rule sets requirements for a written food safety plan that includes hazard analysis, preventive controls, and oversight and management of preventive controls, including monitoring, corrective actions and corrections and verification.

Compliance dates for the preventive controls rule vary. Very small businesses (averaging less than $1 million per year, adjusted for inflation) in both annual sales of human food plus the market value of human food manufactured, processed, packed, or held without sale, have three years, except for records to support its status as a very small business. Small businesses (fewer than 500 full-time employees) have two years, while all other businesses have one year to come into compliance with the rule. Of note, businesses subject to the Pasteurized Milk Ordinance (PMO) have three years to comply with the rule. FDA notes compliance dates for these companies were extended to allow time for changes to the PMO safety standards that incorporate the requirements of the preventive controls rule. (For more information on the rule, visit www.fda.gov/Food/GuidanceRegulation/FSMA/ucm334115.htm.)

Gaalswyk notes FDA is working to develop guidance documents to assist stakeholders with implementation, including guidance on hazard analysis and preventive controls, environmental monitoring, food allergen controls, validation of process controls, and a Small Entity Compliance Guide that explains the actions a small or very small business must take to comply with the rule.

Meanwhile, plans for training and technical assistance also are underway, including the establishment of a Food Safety Technical Assistance Network within the agency to provide a central source of information to support industry understanding and implementation of FSMA, he adds. FDA also is collaborating with the Food Safety Preventive Controls Alliance to establish training and technical assistance programs, as well as partnering with the National Institute of Food and Agriculture at USDA to administer a grant program to provide technical assistance to small and mid-size farms and small food processors.

Gaalswyk notes FDA also is working to develop and implement explicit inspection and enforcement strategies that facilitate consistent decision-making by regulators.

A requirement that dairy plants have at least one employee who is considered to be a “Preventive Controls Qualified Individual” (PCQI) also takes effect in September, notes Clay Detlefsen, senior vice president for regulatory and environmental affairs at the National Milk Producers Federation. Dairy companies will need a designated PCQI to be responsible for developing and overseeing every plant’s food safety plan.

Detlefsen recommends companies have more than one individual trained as a PCQI; in fact, he is advocating 2-3 per facility for the next few years.

He also says companies should review their facility’s environmental monitoring program.

“If you’re finding nothing, you’re not doing it correctly,” he says. “You need to find problems and correct them.”

He adds stakeholders should walk their plants and create a flowchart, and identify and group foods being produced.

If an FDA inspector does visit a plant, Detlefsen recommends companies contact their legal counsel but cooperate. Show inspectors safe food is being prepared and that as a company, you are working toward compliance.

Detlefsen notes compliance begins next April for FDA’s sanitary food transportation rule.

“In essence, vehicles must be designed and maintained in a sanitary manner,” he says, noting food completely enclosed by a container — except that which needs temperature control to be safe — is not covered under the rule. Frozen food, including ice cream, also is not subject to this rule.

Detlefsen notes milk powder, whey powder and all packaged dry dairy ingredients are out since they are packaged and not refrigerated for safety.

He adds there are pending waivers in development, including for carriers with valid permits under the NCIMS Grade A milk program. Grade A dairy products (fluid milk, yogurt, cottage cheese, etc.) will be out when the waiver is published, which will occur prior to the one-year compliance date. Non-Grade A dairy products are subject to the rule if they are temperature-controlled for safety.

“Arguably, cheese would fit into that category,” he says.

Detlefsen notes compliance is three years away for FDA’s intentional adulteration/food defense rule, and a cheese vulnerability assessment currently is in development, due to be conducted this October. A Greek yogurt vulnerability assessment is expected at a later date.

Meanwhile, Tom Hedge, vice president of technologies at Schreiber Foods, shared insights from the Innovation Center for U.S. Dairy’s food safety committee, which he chairs. The committee’s objective is to strengthen manufacturing practices in all dairy processing facilities and advance science-based tools to diminish food safety risks that could compromise the reputation of the U.S. dairy industry.

The Innovation Center food safety team comprises several key dairy industry companies and stakeholders including Schreiber Foods, Sargento Foods, Leprino Foods, Dairy Farmers of America, Land O’Lakes, Hilmar Cheese Co. and others.

“What has been particularly impressive is the spirit of collaboration and sharing of food safety experiences and best practices to build this dairy industry education initiative,” Hedge says.

The committee last October released a guidance for the U.S. dairy industry on “Control of Listeria monocytogenes.” The guidance was prepared for the dairy industry by subject matter experts who work daily in the industry and is intended to build knowledge and communicate best practices for a wide spectrum of food safety practitioners: hourly employees, engineers, quality professionals, senior staff, contractors, suppliers and more.

In addition to the Listeria control guidance, the food safety committee also includes other food safety action platforms including pathogen control, supplier food safety management, artisan/farmstead cheese food safety, verification via auditing, a regulatory round table and a listeria research platform. Interested parties can participate in workshops and other risk management tools and guidance offered by the committee. (For more information on the committee and to view the guidance, visit www.usdairy.com/foodsafety.)

CMN


USDA raises forecasts for
dairy prices in 2016, 2017

July 15, 2016

WASHINGTON — USDA lowered its 2016 milk production forecast by 200 million pounds to 212.4 billion pounds in its latest “World Agricultural Supply and Demand Estimates” report this week as the pace of cow herd expansion has slowed. However, USDA raised its 2017 milk production forecast as milk prices and lower feed costs in late 2016 and early 2017 are expected to lead to higher 2017 cow numbers.

In the report, the 2016 forecast for fat-basis exports is lowered by 100 million pounds to 8.4 billion pounds as slowing sales of butter products more than offset higher whole milk powder (WMP) exports. The forecast for 2017 fat-basis exports is unchanged at 8.7 billion pounds.

On a skim-solids basis, the export forecasts for 2016 and 2017 are raised on higher WMP sales. Skim-solids exports are forecast at 36.4 billion pounds in 2016, up 400 million pounds from last month’s report, and in 2017 are forecast at 37.3 billion pounds, up 200 million pounds from last month’s report.

For 2016 and 2017, imports are unchanged on a fat basis, but are raised on a skim-solids basis.
Fat-basis ending commercial stocks are forecast higher for both 2016 and 2017 as stocks of butter remain higher. Ending fat-basis stocks are now forecast at 13.5 billion pounds, up 400 million pounds from last month’s report, in 2016, and at 12.8 billion pounds in 2017, up 600 million pounds from last month’s report. On a skim-solids basis, ending commercial stocks are reduced.

USDA forecasts cheese, butter, nonfat dry milk (NDM) and whey prices higher for 2016 and 2017 as demand remains robust.

As a result, Class III and IV price forecasts for both years also are raised. The Class III price in 2016 is forecast to average $13.90-$14.20 per hundredweight, up from $13.40-$13.80 forecast last month. The 2016 Class IV price is forecast at $13.80-$14.20, up from $13.15-$13.65 in last month’s report. In 2017, the Class III price is forecast to average in the $14.50-$15.50 range, up 50 cents from last month’s report, while the Class IV price is forecast to be in the $13.50-$14.60 range, up 35 cents from the previous forecast.

The all-milk price forecast for 2016 now is $15.55-$15.85, up from $14.95-$15.35. The 2017 all-milk price forecast is $15.70-$16.70, up from $15.25-$16.25.

CMN


Dairy groups urge Senate
to pass child nutrition bill

July 15, 2016

WASHINGTON — With limited time remaining before Congress breaks for the summer, several food organizations including the International Dairy Foods Association (IDFA) and National Milk Producers Federation (NMPF), as well as companies including Dean Foods and Land O’Lakes, in a letter to the Senate this week urged legislators to pass legislation that would reauthorize federal child nutrition programs.

The Improving Child Nutrition Integrity and Access Act of 2016 was unanimously approved by the Senate Agriculture Committee earlier this year but has not yet been considered by the full Senate.

More than 20 agricultural organizations and food companies are asking Senate Republicans to continue the bipartisan history of supporting federal child nutrition programs and to pass the reauthorization bill expeditiously.

“Reauthorization of our child nutrition programs is imperative to addressing issues of waste and fraud in the program, providing school foodservice authorities with needed flexibility in managing their programs, and allowing snack and summer meal providers to adapt the program to best fit local needs,” the groups say in the letter sent Tuesday.

The letter adds that Senate passage of the bill would be an important step in the process of getting a bill to conference with the House and a negotiated agreement to President Obama’s desk as soon as possible. A House version of the bill was passed by the House Education and Workforce Committee in May.

“Over the past five years, program operators and stakeholders have been burdened with overregulation and uncertainty,” the letter says. “Families, school foodservice professionals and those who develop products to meet program demands need solutions. We urge your support of this vital legislation so Congress can work expeditiously to finalize reauthorization of our child nutrition programs and address these important concerns.”

Meanwhile, in a second letter sent this week to every senator, IDFA and NMPF highlighted provisions in the Senate bill that would lead to increased milk consumption. Specifically, the Senate bill includes provisions that would direct USDA to take steps to review and improve milk consumption in federal feeding programs, such as school nutrition programs. It also would address the needs of lactose-intolerant students by calling on USDA to offer lactose-free milk.

The letter notes the importance of improving milk consumption, saying almost all age groups in the United States consume fewer servings of dairy than those recommended by the current Dietary Guidelines for Americans.

“Along with dairy’s long-established role in promoting bone health, reducing the risk of insidious chronic diseases and conditions demonstrates why milk is offered with every school meal and dairy foods are prominent parts of other nutrition assistance programs,” IDFA and NMPF say.

CMN


Design, budget concerns delay
UW’s Babcock Hall, CDR project

July 8, 2016

By Alyssa Mitchell

MADISON, Wis. — A planned renovation and expansion at the University of Wisconsin-Madison’s Babcock Hall Dairy Plant and Center for Dairy Research (CDR) is currently delayed due to the project design coming in far above budget estimates.

According to the Wisconsin Cheese Makers Association (WCMA), at a meeting last week, CDR staff and project fundraising co-chair Dave Fuhrmann learned that the planned CDR addition and Babcock Hall renovation, as currently designed, will cost $11 million more than initially estimated.

John Lucey, director, CDR, confirmed the delay to Cheese Market News this week. Lucey says the project — which originally was expected to break ground this summer with a 26-month construction period — will not start this year and is under review.

Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) Secretary Ben Brancel last month reached out to dairy stakeholders about possible project delays. Brad Legreid, executive director of the Wisconsin Dairy Products Association, alerted members to the news in an email late last month after receiving a call from Brancel. In his email, Legreid noted the UW College of Agriculture and Life Sciences (CALS) is considering revising the original design blueprints.

WCMA Executive Director John Umhoefer says officials hinted at cost overruns earlier last month, but the 32-percent-over-budget $11 million figure revealed last week is much higher than expected.

Umhoefer notes WCMA members and project donors expressed strong concern about cost overruns impacting the CDR addition during a meeting June 24 with UW Senior Associate Dean Dick Straub.

The dairy industry raised more than $18 million for the construction of a world-class research center adjacent to Babcock Hall, Umhoefer says. A fundraising campaign led by WCMA, CDR and the Wisconsin Milk Marketing Board began in 2012 after plans were announced for a renovation of the existing 60-year-old dairy plant and construction of a 37,000-square-foot addition for CDR on the building’s west side. The dairy industry exceeded its goal of raising 50 percent of funds needed for the $32 million (original estimate) building project. (See “Wisconsin governor to kick off funding drive for UW Babcock Hall building project at ICTE” in the March 30, 2012, issue of Cheese Market News.)

“What’s concerning is the proposed revisions we are seeing are primarily cutting from the CDR addition,” Umhoefer says. “It seems CALS wants a shiny new dairy plant over a world-class research center, but the cheese research is what our donors were funding.”

He adds that while the dairy plant needs a facelift, donors did not think they were funding a new dairy plant.

“Cuts are cuts, but I don’t think it should be the cheese research center,” he says.

The “value engineering” plan unveiled to stakeholders last week suggests the elimination of 11,200 gross square feet of the new Center for Dairy Research. An alternative plan retains this square footage as unfinished, walled-in space, Umhoefer says, noting either cut would eliminate food application labs in the basement of the new addition. On the first floor, it would eliminate most of the CDR cultured products research area, and on the second floor, it would eliminate most of the CDR cheese research area, he adds. CDR also would see significant cuts to funds for equipment, including a two-stage dryer and vats.

Meanwhile, no cuts in square footage are currently proposed for the renovated dairy plant, Umhoefer says.

“We’re disappointed to learn the emphasis seems to be on cutting the research center to save money rather than scaling back changes to the dairy plant,” he says.

In a statement released Thursday, CALS Dean Kate VandenBosch says as a university building, the project is going through the planning, design and construction processes that all public buildings in Wisconsin go through prior to completion. She notes that includes working with a contracted design firm on specific construction plans that, when final, the state sends out for bid by construction firms.

“This project is currently in the design phase. The design plans have not been finalized, and therefore the final cost for the project has not yet been established,” VandenBosch says.

“As is common with any renovation or construction process, either at your own home or for a public building, facility users have imagined more functionality than the budget will allow. As is also the case in any construction project, we are now in the process of matching our hopes and dreams with the reality of the budget,” she says. “We expect the final design, which will adhere to the budget as Wisconsin rules and common sense dictate, to be completed this fall. At that point, the project will go out for construction bids. We are working closely with our university faculty, researchers, the outside contractors assigned to the project and our partners at other Wisconsin state agencies to ensure a swift resolution of the outstanding planning issues. I have assigned our assistant dean for facilities, who is also an architect by training, to work with the team to make sure goals get met in a way that meets our needs. We are putting extra effort into the project to make sure it gets on track. We look forward to sharing the completed plans with the broader community once they have received the necessary approvals.”

Meanwhile, dairy stakeholders continue to communicate their concerns to CALS and state officials.

“Right now we are working very hard to maintain the key functions that people expect and want in this facility,” Lucey says.

Brancel and Department of Administration Secretary Scott Neitzel this week announced a meeting next Wednesday for stakeholders to discuss the proposed project and concerns. The meeting will be held at 3 p.m. July 13 at DATCP’s office in Madison.

“The Wisconsin dairy processing industry and the state of Wisconsin have invested a considerable amount of money into this building project, and it is our obligation and responsibility to make sure this project is successful in order to move the dairy industry forward,” says the letter from Wisconsin state officials.

CMN


Global dairy market saturated
with inventory, Rabobank says

July 8, 2016

MADISON, Wis. — Growing inventories will continue to overhang the global dairy market as the world works its way through a supply glut, according to the Rabobank Global Dairy Quarterly Q2 2016 report released this week.

Despite higher buying from China in the first half of 2016, poor economic performance, low oil prices and geopolitics continue to weaken demand in many regions, the report says. Meanwhile, global stocks continue to increase.

Worldwide, dairy markets are showing only modest demand growth. Despite upward movements in prices at the end of the second quarter, the global supply glut continues to weigh on prices, Rabobank says.

Global dairy producers have begun to react to lower milk prices by slowing production growth, the report notes. It is expected that milk production will start to fall in response to low prices, leading to sharp reductions in export surpluses.

Rabobank forecasts that prices will increase in the first half of 2017, but high levels of stocks and weak global demand this year may threaten that outlook, and the recent Brexit announcement could skew global competition if the euro weakens as anticipated, increasing the competitiveness of European products in export markets.

“The light at the end of the tunnel remains undimmed,” the report says. “In the short term, prices will again weaken back to support levels until, as forecast in our previous quarterly, tightening supplies eventually start to turn the market in the first half of 2017. The strength of any price rises will depend on weather patterns, inventory levels and maintaining demand momentum in domestic markets.”

While much of the world has faced milk prices that have forced farmers to reduce costs, the United States has continued to find itself teetering on profitability, the report says. Rabobank notes the U.S. all-milk price for April was $15 per hundredweight, compared to New Zealand’s milk price of US$8.70 per hundredweight and the Dutch price of $11 per hundredweight.

The report notes U.S. supply has continued to grow, primarily in the Midwest due to a warm spring, increased cow numbers and further consolidation of farms.

Higher domestic prices and a stronger U.S. dollar have left U.S. processors with more domestic opportunities for sales than overseas, the report adds, noting U.S. dairy exports are down from last year.

This week U.S. Cheddar price volatility has continued following last week’s run-up at the Chicago Mercantile Exchange (CME). Cheddar barrels settled at $1.72 per pound today, while blocks settled at $1.63 per pound, both above last week’s averages of $1.6285 and $1.5830 per pound, respectively.

USDA’s Dairy Market News says several cheese manufacturers took advantage of the holiday weekend and brought in additional loads of milk.

“Those manufacturers not looking to fill schedules are seeing a drop in milk production for their contracted loads of milk but still feel milk intakes are sufficient for the level of production they are at,” Dairy Market News says. “Components are beginning to drop as temperatures and humidity rise, but processors have yet to see a change in yields. Some cheese manufacturers seem optimistic this week, showing less reservation about running full production schedules.”

Dairy Market News notes this may be attributed to reports of growing sales following the holiday weekend.

“Numerous manufacturers report increased calls from buyers seeking additional loads of cheese. However, a few of these producers do not have the additional cheese stocks to sell and are having to turn down potential sales. Other market participants continue to manage long inventories of aged cheese varieties. The market undertone is mixed,” Dairy Market News says.

Meanwhile, while CME butter prices declined 6.75 cents this week, settling at $2.2825 per pound, Dairy Market News says the market undertone is firm.

“Several manufacturers chose to capitalize on more readily available cream over the holiday weekend and kept their churns running full schedules through the weekend. A few producers running full schedules report the desire to slow production some but are not in the position to do so based on current cream volume intakes,” Dairy Market News says. “Butter manufacturers are taking into consideration what they anticipate to be a strong decrease in cream availability in the upcoming weeks when planning their churn production schedules. Sales are steady this week. Manufacturers and brokers report consistent calls from buyers looking to make purchases. However, they express light interest in moving butter in the current market. Those with inventories not currently committed are confident in their ability to move butter in the upcoming months. Demand for fresh bulk butter is high, but supply is tight and offers from sellers are rare.”

Rabobank notes in the face of a stronger U.S. dollar and higher domestic prices, imports to the United States have increased, although the rate of increase is beginning to slow.

The report notes demand growth in he United States has been driven by lower retail prices, economic growth and renewed interest in dairy products — mainly butter and cheese — but whole milk and full-fat yogurt also deserve honorable mentions, and both are putting strain on the cream stream.

In the face of these fundamentals, the United States has accumulated a sizeable but manageable inventory, Rabobank adds.

“In the near term, the U.S. will see continued strong demand growth for butter and cheese, helping to keep domestic prices for milk around break-even levels (for producer profit),” the report says. “As a result, Rabobank expects to see modest production growth to continue for most parts of the U.S. through the next 12 months.”

The report notes consolidation is expected to continue as smaller farms choose to sell rather than continue to grapple with lower milk prices.

Rabobank anticipates U.S. demand will remain strong as 2017 approaches.

“Demand growth will be propped up by strong consumer trends, drawing Americans back to the dairy shelves and lower commodity prices making their way down to the consumer, in tandem with promotional activity, as companies look to clear inventory,” the report says. “As a result of only modest production growth and continued strong demand, Rabobank sees the U.S. eating its way through the mountain of cheese and butter the market has accumulated, marginally reducing its exportable surplus over the forecast period.”

Meanwhile a new research report from CoBank notes U.S. milk powder producers are set to bring significant amounts of new production capacity online over the next two years despite the ongoing supply glut.

New projects are in the works that could add an estimated 440 million pounds per year of additional powder manufacturing capacity in the United States over the next two years, CoBank says.

“While this expansion may appear to be ill-timed in the current market environment, the longer-term outlook paints a much different picture,” says Ben Laine, a senior economist with CoBank’s Knowledge Exchange Division. “In the long run, emerging markets and a growing world population will enable U.S. producers and processors to expand, especially if our powder industry competitively positions itself.”

To bolster their competitiveness in world markets, U.S. powder manufacturers will need to tailor and calibrate their output to meet global preferences and requirements, CoBank notes. New and upgraded facilities must be increasingly flexible and able to shift production between skim milk powder, nonfat dry milk and whole milk powder.

In addition, the ability to manufacture other milk-based ingredients such as lactose, casein, milk protein isolate, milk protein concentrate and others can diversify product offerings and improve margins, the report says.

“Dairy processors will need to be able to respond to shifts in the dynamics of component values and manufacture the most economically favorable product mix at the time,” Laine says.

CMN


Senate votes to pass bill
on biotech food labeling

July 8, 2016

WASHINGTON — By a vote of 63-30, the U.S. Senate yesterday passed a bipartisan proposal from Sens. Pat Roberts, R-Kan., and Debbie Stabenow, D-Mich, that would provide a national requirement for labeling foods with GMO ingredients and preempt state-specific GMO legislation. The bill now will be sent to the House for consideration next week. The House and Senate are scheduled to start their summer recess July 15.

“Tonight’s vote is the most important vote for agriculture in the last 20 years,” Roberts said after the bill passed the Senate. “Our legislation allows farmers to continue using sound science to produce more food with less resources, gives flexibility to food manufacturers in disclosing information and gives access to more food information that consumers demand.”

Stabenow says the bill’s passage marks a “significant milestone” toward a more transparent food system.

“This bipartisan bill ensures that consumers and families throughout the United States will have access, for the first time ever, to information about their food through a mandatory, nationwide label for food products with GMOs,” Stabenow says. “The advocates that helped raise this issue to a national level should be proud of this accomplishment.”

Last week, both the International Dairy Foods Association (IDFA) and National Milk Producers Federation (NMPF) signed a letter from the Coalition for Safe Affordable Food urging the Senate to pass the compromise bill. (See “Dairy groups urge Senate to pass new biotech law” in last week’s issue of Cheese Market News.) The Organic Trade Association also has spoken out in favor of the bill, saying it would extend a GMO labeling requirement nationwide and acknowledge USDA Organic as the “gold standard” for transparency and non-GMO status. Officials from Dairy Farmers of America praised the bill for providing a clear definition around animal feed, citing that animals, as well as meat and dairy products, are not bioengineered just because they consumed feed with GMO ingredients.

NMPF and IDFA both applauded this week’s passage of the Senate bill.

“We now hope the U.S. House of Representatives will quickly take up and pass the Senate bill next week,” says Jim Mulhern, president and CEO, NMPF. “Vermont’s problematic labeling law will continue to do damage along the food supply chain until both houses of Congress band together and send a bill to President Obama’s desk. Time is of the utmost importance.”

J. David Carlin, IDFA senior vice president of legislative affairs and economic policy, says this bill would bring consistency and additional transparency to the marketplace.

“If passed by the House, the legislation would establish a federal framework for labeling and prevent a state-by-state patchwork of mandates that would only confuse consumers and increase food prices,” Carlin says.

CMN


Cheese production up 1.2
percent in May versus 2015

July 8, 2016

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 998.1 million pounds in May, up 1.2 percent from May 2015’s 986.1 million pounds, according to preliminary data released this week by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart.)

May cheese production was up 0.7 percent from April 2016’s 991.2 million pounds. When adjusted for the length of the months, May production was down 2.5 percent on an average daily basis.

Italian-type cheese production totaled 439.0 million pounds in May, up 5.2 percent from a year earlier. Production of Mozzarella, the largest component of Italian production, totaled 346.0 million pounds, up 4.4 percent from a year earlier.

American-type cheese production totaled 399.9 million pounds in May, down 1.9 percent from May 2015’s 407.7 million pounds, according to NASS. Production of Cheddar, the largest component of American-type cheese production, was 290.5 million pounds in May, down 2.0 percent from a year earlier.

Wisconsin led the nation’s cheese production with 260.3 million pounds in May, up 3.4 percent from its production a year earlier. California followed with 212.7 million pounds, up 0.1 percent from its production in May 2015.

The next four cheese-producing states in May were Idaho with 76.0 million pounds, down 0.7 percent from its production a year earlier; New Mexico with 67.9 million pounds, up 3.9 percent; New York with 59.1 million pounds, up 1.7 percent; and Minnesota with 56.9 million pounds, down 3.8 percent.

NASS reports U.S. butter production in May totaled 169.9 million pounds, up 0.3 percent from May 2015’s 169.4 million pounds. May butter production was down 3.7 percent from April 2016’s 176.5 million pounds; when adjusted for the length of the months butter production was down 6.8 percent on an average daily basis.

California led the nation’s butter production with 49.5 million pounds of butter produced in May, a decline of 9.3 percent from its production a year earlier.

CMN


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Today's Cheese Spot Trading
July 28, 2016

Barrels: $1.7750 (NC)
Blocks: $1.7325 (+1 1/4)


Click here for more market activity
Cheese Production
U.S. Total May
998.115 mil. lbs.


Milk Production
U.S. Total June
17.770 bil. lbs.

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Dairy has unique appeal
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Patrick Geoghegan, Wisconsin Milk Marketing Board

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