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Pizza makers ramp up pickup, delivery as restaurants close

March 27, 2020

By Rena Archwamety

MADISON, Wis. — Restaurants across the country have felt the impacts of the COVID-19 crisis in recent weeks, as many states have issued “stay-at-home” orders and mandated dining rooms be shut down, allowing for only carryout and delivery to remain open. Pizza businesses, many of which already had these options, still have had to quickly adjust their operations as demand rises for delivery and contact-free options, and guests are no longer able to dine in their restaurants.

Lou Malnati’s Pizzeria, which has locations mainly in the greater Chicago region but also in Arizona, Indiana and Wisconsin, stopped all its dine-in service March 15. All 60 of its restaurants remain open for curbside pickup and delivery.

“We’ve always done carryout and delivery, but we didn’t always do curbside. Our teams did a pretty quick turnaround,” says Jim D’Angelo, chief operating officer, Lou Malnati’s. “We chose curbside because we didn’t want lobbies to be full of people. We also offer contactless delivery if people want us to leave it at the door and alert them.”

This shift to 100% curbside and delivery required quick implementation of new ordering options and staff procedures. D’Angelo says digital ordering had to be set up to include information about what vehicle customers were driving for curbside, or to let drivers know if customers wanted contactless delivery.

• New procedures

Popular national pizza businesses also have been advertising contactless delivery, carryout and curbside options. Little Caesars allows customers to pick up their orders from heated “Pizza Portal” compartments at stores using a QR code that is sent to their smartphones.

“While we’ve always been the place people go for an affordable meal in a pinch, the public is relying on us now more than ever,” says Dave Scrivano, president and CEO, Little Caesars. “We can provide them with something very few other businesses can — a safer way to get inexpensive meals for their families, just when they need them the most. We’ve been doing this for decades.”

Pizza businesses also have ramped up precautions to keep workers and customers safe. Domino’s has mandated additional training in stores to reinforce good hygiene practices and has increased the frequency of the disinfection of all food contact surfaces, delivery bags and other surfaces frequently touched by team members and customers. Pizza Hut says it is doubling down on its long-standing sanitation and handwashing procedures, as well as ensuring the pizza leaves the 400+ degree oven and slides hands-free into the box.

Lou Malnati’s has stepped up its cleaning procedures in addition to implementing social distancing among its staff, which does impact efficiency, D’Angelo says.

“We’ve added to our already rigorous cleaning procedures — extra disinfecting of bathrooms, doorknobs and counter tops — taking it to another level,” D’Angelo says. “Because we’re trying to create social distancing in our spaces while still having to manage the flow of orders, we may have to go up on times, which may reduce people ordering who don’t want to wait as long. It affects throughput if you’re trying to space it out and use less people.”

Spinato’s Pizzeria, which has five restaurants in the greater Phoenix area, closed the dine-in portion of its restaurants March 18 when orders to close dining rooms and bars took effect in Arizona. Typically business is split 50% dine-in and 50% delivery for Spinato’s, and while the dining is gone, delivery and pickup sales have sustained their previous levels, says Todd Vierra, operations director, Spinato’s Pizzeria.

“Overnight, our dining room was closed and we had no guests in the restaurants. Now we have call-in and online ordering available to pick up curbside,” Vierra says. “We have people standing outside, waiting for the vehicle, and staff running back in the restaurant, washing their hands and putting gloves on. Delivery is the same thing. Calling guests when we approach, knocking on the door, taking six steps back when the guests open the doors and thanking them.”

In addition to its restaurants in Arizona, Spinato’s Fine Foods division offers Spinato’s Broccoli Crust Pizza and Spinato’s Marinara sauce in grocery stores nationwide. Spinato’s also has just introduced online ordering for its frozen pizzas, adding a nationwide “no-contact” home delivery option.

Spinato’s had not planned its frozen pizza delivery to coincide with current social distancing and stay-at-home orders. The company was going to promote the launch of online ordering for its Broccoli Crust Pizza this month during Natural Products Expo West, which was canceled due to precautions surrounding the spread of the COVID-19 virus.

“For now, it’s going to be word-of-mouth,” says Michaela Raner, director of marketing, Spinato’s Fine Foods. “We’re letting people know we’re here, we’re a healthy company, and making sure everyone is taken care of. Right now we’re cognizant of our financials and taking one day at a time.”

• Staff and hiring

National pizza companies including Pizza Hut, Domino’s and Papa John’s recently have announced they are hiring thousands of new delivery drivers and other employees to keep up with recent demand.

“While many local, state and federal rules are closing dine-in restaurants, the opportunity to keep feeding our neighbors through delivery and carryout means that a small sense of normalcy is still available to everyone,” says Richard Allison, CEO, Domino’s. “Our corporate and franchise stores want to make sure they’re not only feeding people, but also providing opportunity to those looking for work at this time, especially those in the heavily-impacted restaurant industry.”

Meanwhile Lou Malnati’s and Spinato’s have focused on shifting their employees into new roles as servers, bartenders and other staff currently have less work due to dining room closures.

“We did a hiring freeze and are finding different ways to give existing team members hours in the restaurants,” Vierra says. “Servers, who are most affected by dining room closures, are being cross trained as drivers and cashiers or for curbside pickup.”

D’Angelo says Lou Malnati’s hasn’t had to lay off anyone and is giving its servers the option to place their names in a link to show their availability, where they can work and whether they have transportation. He also has seen employees step up to help each other, such as a high school student giving up hours to others who needed them, or a delivery driver offering to provide transportation for employees to stores not on public transportation routes.

“I think the hardest part has been trying to serve all our people with different needs, capabilities and circumstances. We’re trying to keep people as whole as we can with these different changes and what everyone’s going through,” D’Angelo says. “What’s been most amazing is in times like this, I am so grateful because I get to hear and see all the amazing things our people are doing, whether it’s for one another or whether it’s for our guests.”

CMN


Pennsylvania looks to promote local cheese, stabilize farms

March 27, 2020

Editor’s note: In 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 — Pennsylvania.

By Rena Archwamety

MADISON, Wis. — Pennsylvania is one of the nation’s top 10 dairy states, ranking seventh in total milk production, sixth in total dairy cows and second in dairy farms, according to USDA data. The state also is one of the top producers of butter, hard and soft ice cream, and Swiss cheese.

Like other regions of the country, Pennsylvania dairy farm numbers have declined, though milk production remains fairly stable. Over the past decade, the number of dairy farms in Pennsylvania has decreased by 19% and the number of cows by 5%, notes a recent study on Pennsylvania’s dairy industry prepared for the state’s Legislative Budget and Finance Committee. According to the latest USDA numbers, there are 5,730 dairy farms in Pennsylvania.

“We’ve fallen about 470 farms in the last few years,” says Jayne Sebright, executive director for the Center for Dairy Excellence, a public-private nonprofit organization that aims to strengthen Pennsylvania’s dairy industry.

Poor weather conditions and forages hurt the state’s dairy farmers in 2019 in addition to ongoing low milk prices, Sebright notes. However, up until recent weeks, this year was starting to look more positive with production per cow and total milk production both back up.

“We’ll continue to see some decline in farm numbers, and hopefully will stabilize cow numbers, as milk production per cow continues to increase. There are a lot of opportunities,” Sebright says, adding that the Center for Dairy Excellence currently is collaborating with producers and processors to keep milk going to various marketplaces and stabilize the market through the current COVID-19 crisis.

“Farms are definitely spending a lot of time looking for solutions,” she says. “The center is continuing to supply resources, support in business planning, contingency planning and mental health and wellness. It will be a stressful time, but we’re finding solutions and working through it.”

Dairy farms in Pennsylvania are on the small side, with an average of 84 head per farm, which increases farmers’ cost of production per cow. Land values and labor costs also are higher. The state does have a favorable climate and strong infrastructure for dairy, Sebright says.

“The seasonality makes it very ideal for dairy cows,” she says. “We have a strong infrastructure to support our farms, and there is a positive image in our communities and support for the dairy farm industry in Pennsylvania.”

Pennsylvania is unique in that its Milk Marketing Law, enacted in 1937, establishes minimum prices for milk transactions within Pennsylvania’s borders that apply to the state’s producers, processors and retailers. It also sets over-order premiums based on fluid milk sales. The law is administered by the state’s Milk Marketing Board.

“They also provide bonding for milk processors. If you purchase milk in Pennsylvania, and something would happen where you would not be able to pay the farmers, that bond is in place,” Sebright says. “Its mission is to stabilize the milk supply and ensure a profitable price for producers and processors.”

• Processing facilities

There are a number of large dairy plants in Pennsylvania as well as several independent processors and dozens of smaller operations, including raw milk bottlers and cheesemakers.

“Our state is fortunate to have quite a few independent, family-owned fluid milk processors, comprising about 50% of our fluid milk business,” Sebright says. “We’re seeing more on-farm processors, cheese as well as fluid dairy farmers, bottling and selling milk.”

Dairy Farmers of America has four plants in the state. Also among the larger, USDA-licensed cheese processors in Pennsylvania are Fairview Swiss Cheese in Fredonia, Leprino Foods in South Waverly, Schreiber Foods Inc. in Shippensburg, and Savencia Cheese USA, with both a cream cheese factory and its headquarters in New Holland, Pennsylvania.

“The factory, which started as an Amish cooperative in the early 1900s, was at one time a cottage cheese factory, but it was converted to cream cheese in the 1980s. All products are now cream cheese based, including our flagship product, Alouette Garlic and Herb spread,” says Steve Schalow, director of research and development, Savencia Cheese USA.

Many full truckloads of milk and cream, the milk mainly produced in the Lancaster County, Pennsylvania, area, arrive at the plant each day, and production at the facility has grown over the years Schalow says. The site also includes the headquarters for Savencia Cheese USA and its sister company, AFP Advanced Food Products LLC. The entire complex employs around 400 people.

“We have been a business presence in Pennsylvania as a unit of Savencia Fromage and Dairy and have enjoyed a long and prosperous relationship with the New Holland borough,” Schalow says.

• Promoting Pennsylvania cheese

The Pennsylvania Cheese Guild (PACG) — which has about 30 members or around half of the state’s total cheesemakers, the guild estimates — was formed in 2015 to help provide technical support and other services. The volunteer-run organization holds an annual meeting and works with the state’s agriculture department on testing, raw milk and other regulations impacting cheesemakers. It also works to connect Pennsylvania’s cheesemakers with technical training, bringing in experts and working with local universities and extension programs.

PACG recently received a state grant to help establish October as Pennsylvania Cheese Month, providing funding to create more visibility and outreach opportunities to promote local cheeses. The funding also will allow for a market study and the creation of a Pennsylvania cheese map.

“We’ll utilize individual networks, social media and reach out to wholesale customers to put cheese on menus and bring it to cheese counters,” says Alexandra Jones, project manager for the Pennsylvania Cheese Month grant. “We’ll have a cheese dinner with beverage pairing, classes and other events to get more cheese in people’s mouths. Let them know where they can buy it or eat it at a restaurant, so they learn more about what’s going on in the community with cheese.”

Jones says she’s seen lots of support for Pennsylvania’s cheese industry, from restaurants, supermarkets and consumers. For example, Giant, a national supermarket chain that is based in Pennsylvania, has committed to stocking 30% local brands among its cheese offerings in Pennsylvania stores.

Cheesemakers in the state range from the large producers mentioned earlier to Amish and Mennonite farmers to small, independent businesses started by those who have retired from other careers.

PACG board President Sue Miller, cheesemaker and owner of Birchrun Hills Farm, Chester Springs, Pennsylvania, has been dairy farming with her husband Ken for 30 years. They started making cheese in 2006 to help add value to their milk and offset the volatility of the milk market and rising costs.

“We live in the outskirts of Philadelphia and have the greatest markets at our fingertips with Philadelphia, New York and D.C.,” Miller says. “Our community had been transitioning from farm to suburbanized because areas outside Philadelphia had been hard-hit for development. Farming had a ‘get bigger or get out’ attitude. For me, we had to do something because we did not have that multigenerational equity in our land.”

The Millers milk about 85 cows, using some for cheese production and shipping the rest to a small cooperative. They built a new cheesemaking and aging facility last year and have brought their two grown sons into the business.

Miller started making Blue cheese, and the creamery is mostly known in the region for its Birchrun Blue. She also makes a rustic farmstead-style Fat Cat, a washed rind Red Cat and the alpine style Equinox. The cheeses are predominantly made from raw milk, but with the new facility, she also has started making pasteurized bloomy rind and Fromage Blanc cheeses.

“We just started to work on expanding distribution since February, about a month before the coronavirus started,” Miller says. “We started working with a really great small distributor in the region who works mainly with vegetable farmers and works with restaurants in Washington, D.C. But now people are pulling back. When things are ready and back to normal, we will be ready to bring the cheeses to them.”

Cheesemakers in Pennsylvania are fortunate to have a lot of consumers at their fingertips, Miller adds, and PACG will continue to talk about Pennsylvania cheeses, farmers and their land, and provide education for its members.

“We’re just here educating folks, trying to do the best we can to provide tools for cheesemakers and guide them to the tools. We would like to start a mentorship program, pairing up seasoned cheesemakers with new members,” Miller says.

Jones adds that the Pennsylvania Cheese Month initiative will help to build more community between the industry, its restaurant and retail partners, and consumers.

“We’ll implement it and hopefully grow the program for 2021. We don’t want this to be boring — it shouldn’t be a chore to learn about cheese,” Jones says. “Our goal is to bring people together around this amazing food, see the dimensions of why it is important, and learn about our cheesemakers and their amazing traditions.”

CMN

 


Robotic innovation in the pizza sector adds control, convenience

March 20, 2020

By Trina La Susa

MADISON, Wis. — The pizza industry is no stranger to innovation. From bold new cheese blends to cauliflower crusts, and unique topping combinations and sauces, pizza makers continue to keep pace with consumer trends. As offerings for the pizza industry have grown, so has the technology to make pies.

Automation, robots and artificial intelligence advancements can now support human labor. For example, dough presses, sauce dispensers, equal-slice cutting guides and automated assembly platforms are popping up in the pizza industry.

Currently, pizza automation is mainly being used in high-volume settings with minimal customization activities, such as in foodservice and hospitality, according to Edward Zimmerman, president, The Food Connector.

“In the long run, the pizza chains will have the advantage to substitute capital for labor,” Zimmerman says. “What is more likely overall are robots ‘supporting’ humans, performing a step like portion control to apply tomato sauce or cheese.”

When it comes to full and partial automation in pizza, cleanliness, consistency and portion control of ingredients will improve, but there are some possible downsides such as speed, customization and overall cost, Zimmerman adds.

“Pizza, especially on weekend nights, requires fast turnaround of highly customized orders,” Zimmerman says. “Given that most pizza is delivery or carry out, consumers don’t see the ‘show,’ so the slower performance is a hindrance. I expect robotic companies will solve this in the future.”

• Automated assembly partner

Centerplate, a leader in live event hospitality at more than 200 sports, entertainment and convention venues, has already found success using a robotic pizza innovation to make hundreds of pizzas at the T-Mobile Park baseball stadium, home of the Seattle Mariners. The company partnered with Seattle-based startup Picnic to apply its end-to-end automated assembly platform as part of a trial program last year.

Founded in 2016, Vivid Robotics Inc., doing business as Picnic, has an experienced team of food and technology industry veterans who develop and provide specialized intelligent technology and exclusive solutions for the foodservice and hospitality industries. The company’s automated food assembly platform integrates robotics-as-a-service (RaaS) software, cloud and deep learning technologies in a compact, freestanding system integrating modular and configurable equipment. Picnic says the platform focuses on the production of high-volume, customizable pizzas consistently and sequentially, at a rate of up to 180 18-inch or 300 12-inch pizzas per hour.

Additionally, the system does not require a kitchen remodel to be installed, and Picnic’s business model is RaaS, which means that the food operator doesn’t need to own complex robotics and can pay for the system through savings on operations.

The system is applicable to all foodservice operations as either a retrofit or new installation in settings such as pizza restaurants, stadiums, airports, convention centers, schools, colleges, corporate cafés, convenience stores or retailers. By lowering the cost of production, Picnic says it enables the use of better ingredients to produce consistent results that will make quality food available to a wider range of consumers.

“We always seek to be on the cutting edge when it comes to artificial intelligence, robotics and identifying new technological solutions that enable us to provide a better experience for our fans,” says Adrian Dishington, senior vice president, Centerplate.

Centerplate District Manager Steve Dominguez says the pizza machines make great-tasting pizza, and there is more consistency with doling out the proper ratio of cheese, sauce, pepperoni and other ingredients.

A self-contained, refrigerated compartment is integrated into Picnic’s system and houses the cheese. Portioning for cheese and other ingredients is dependent on the recipe, Picnic says. Picnic also notes that pizza ingredients do not touch human hands when the Picnic robot is producing pizzas.

“The device has an automated arm that lays the pizza on the assembly line, adds the sauce, the cheese, the toppings, all by order from an iPad,” Dominguez says. “From about three minutes after opening the app on the iPad, we were having pizza, and saw it had applications for our ballparks and other lines of business.”

Dominguez says the goal isn’t to go from 1,000 employees to 600, but rather to integrate automation into the workforce to help ensure a consistent product for fans, especially when Centerplate can’t fill a full staff.

“There is still human involvement in the pizza-making process, so this is not about replacing workers at all,” Dominguez says, adding that it is more about fine-tuning a preparation process and enhancing the end product for the consumers.

“The dough preparation, sauce making and baking — the real art of pizza — is left in the hands of our human employees. Picnic also has an engineer on site to ensure everything goes smoothly,” Dominguez says

Picnic says it focused first on pizza because it’s a popular food worldwide, and pizza production in a busy restaurant presents a specific challenge due to the amount of labor required to produce quality pizza in quantity. However, the company’s technology also is applicable to other food categories.

“We are defining the new standard for food preparation and offer the only pizza automation platform supporting mass customization,” says Clayton Wood, CEO, Picnic. “Picnic enables foodservice operators to eliminate many current pain points and address evolving consumer tastes.”

• Wood-fired kiosk

Automated kiosks creating pizzas that customers order also are becoming more available in the market today. Commercial Automation (CA), a kiosk development company based in Leavenworth, Kansas, has partnered with Basil Street Café, a high-tech, innovative pizza vending machine startup company based in Southern California, to develop and deploy an Automated Pizza Kiosk (APK), a robotic, self-serve kiosk solution that bakes and dispenses fresh, brick-oven style pizza on demand, 24 hours a day. APKs are stand-alone vending machines that hold 150 frozen pizzas. Customers use a touchscreen to choose between pizza varieties, then pies are run through the machine’s built-in oven and come out fully cooked.

In addition to design and development efforts, CA has provided Basil Street Café with an entire supply chain solution from deployment to ongoing operations.

Basil Street machines feature three 10-inch Italian style, thin crust pizza offerings: four-cheese, pepperoni and a “Pizza of the Month” selling between $6.95-$11.95. All of Basil Street’s pizzas are made with fresh ingredients and then flash frozen to preserve the flavor and freshness before being cooked-to-order in about three minutes. The cooking process utilizes Basil Street’s patent-pending three element non-microwave speed oven. The combination of the oven technology and pizza quality create a finished product that rivals a high-end brick oven pizzeria, says Deglin Kenealy, CEO, Basil Street, adding that Basil Street has figured out how to deliver a wood-fire oven experience pizza in a fraction of the time.

Basil Street recently closed a $10 million priced round of funding, setting the stage for a multi-city pilot program rollout launching in April across the United States. Locations for the pilot program are still being confirmed, but target regions include Texas, Kansas, Missouri, North Carolina and Southern California.

“After three years of perfecting the process to deliver unmatched brick-oven style gourmet pizza through the convenience of a stand-alone vending machine, we are excited about the next step to bring this unique proprietary concept, and more importantly great tasting pizza, to market,” Kenealy says. “This round of funding enables us to kick off our pilot program next month with the hopes of escalating into a full-scale launch of our kiosks by the end of the third quarter in 2020.”

According to Kenealy, the initial machines in the pilot program are in high demand, as the company has received numerous requests to participate. Those inquiring include large corporate facilities, major medical facilities, universities, military bases and sporting arenas throughout North America. Basil Street also is building a list of global interest for future deployments. In addition, two machines will be delivered to a Basil Street partner, which is one of the world’s largest food and beverage manufacturers.

While the evolution of robotics in the pizza industry is still early in the making, more and more options will come to the marketplace to solve operational problems, increase efficiency, and elevate pizza consistency and quality.

CMN



Caputo Cheese redefines Mozzarella with new CBD-infused Elevated Cow

MELROSE PARK, Ill. — Caputo Cheese has specialized in traditional Italian cheeses since the family-owned business started in 1978 as a small Italian import shop. Initially supplying local pizza shops in Chicago, Caputo Cheese still serves the pizza industry but now on a national and international scale, working with large restaurant chains and foodservice distributors.

Natale Caputo, president of Caputo Cheese, notes that in addition to Mozzarella, his company offers Burrata, Romano, Ricotta and other specialty soft and hard Italian cheeses. He says he receives many requests for unique products as his customers look to differentiate themselves.

“Everyone is trying to stand out in one way or another. We get a lot of odd inquiries, so nothing is ‘crazy’ anymore,” he says. “Fresh Mozzarella is still booming, and we still see an upward trend.”

Caputo Cheese is poised to stand out and rise above with its latest twist on fresh Mozzarella — Elevated Cow, a line of cannabidiol- or CBD-infused fresh Mozzarella. The first products in this line include an 8-ounce cup of Bocconcini balls, a 5-ounce Ovolini ball and 8-ounce slices. Elevated Cow officially will launch April 20, or “4/20.”

“It’s a whole new world. It’s very Star Trek, where no man has gone before. CBD up until now has been mostly relegated to tinctures or homeopathic supplements, or put into snacks,” says Agela Abdullah, marketing director, Caputo Cheese.

“Snacks only get you so far, but sometimes a girl wants lasagna,” she says.
Caputo says he is a fan of CBD in other forms such as oils and gummies, and the new Elevated Cow line combines two things he loves — cheese and stress reduction. He believes his company is the first ever to market it in a cheese formulation.

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Industry groups seek to limit food supply chain disruptions

March 20, 2020

WASHINGTON — As offices are closed, travel restricted and people of all ages are staying home, cheese, dairy and agricultural groups are seeking assurances that the supply chain will remain open to keep essential food products flowing to consumers.

On Wednesday, dozens of ag industry organizations, including the International Dairy Foods Association (IDFA), National Milk Producers Federation (NMPF) and Select Milk Producers, wrote a letter to President Donald Trump requesting assistance to ensure a steady supply of U.S.-produced food, fiber, feed and fuel.

“As you consider additional steps to restrict movement to protect our nation from COVID-19, we ask your administration to be mindful of the food, feed and agricultural supply chain and workforce impacts on the ability of U.S. agriculture to meet the needs of consumers,” the letter says. “These include but are certainly not limited to impacts on accessibility of seed, fertilizer, crop protection products, agricultural labor, equipment, feed and ingredients for food-producing animals, modes of transportation, the availability of required U.S. government inspection service and daily movement of milk.”

Earlier in the week, USDA Deputy Under Secretary for Food Safety Mindy Brashears released a statement that USDA’s Food Safety and Inspection Service, Animal and Plant Health Inspection Service and Agricultural Marketing Service are committed to ensuring the health and safety of their employees while still providing timely delivery of services to maintain the movement of America’s food supply from farm to fork.

“We have all seen how consumers have reacted to the evolving coronavirus situation and how important access to food is to a sense of safety and well-being,” the statement says. “It is more important than ever that we assure the American public that government and industry will take all steps necessary to ensure continued access to safe and wholesome USDA-inspected products.”

The Department of Homeland Security has made clear that the food industry, including the dairy industry, is one of the nation’s “critical infrastructure industries,” which ensures certain safeguards for the food industry and its workforce from disruptions related to federal and state efforts to protect public health during the COVID-19 response, says Blake Anderson, president and CEO, American Dairy Products Institute (ADPI). Both ADPI and IDFA have noted they are collaborating with other industry trade groups to voice concerns related to workforce, utilities and services, transportation, borders and manufacturing to the Trump administration.

On Thursday, USDA and the U.S. Department of Labor (DOL) announced a partnership to help facilitate the identification of foreign and domestic workers available to transfer to other U.S. agricultural sector employers to fulfill critical workforce needs.

“American farmers and ranchers are at the front lines of maintaining the nation’s food supply,” says U.S. Secretary of Labor Eugene Scalia. “In these unprecedented times, it is critical for them to have the workforce they need. This new partnership between USDA and DOL will help support our farmers, ranchers and American families.”

IDFA says it is in close contact with federal agencies and the White House to ensure transportation routes and supply lines in different regions of the country remain free of disruption. IDFA also is requesting that USDA’s Food and Nutrition Service allow 2% milk in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).

“At present, at retail facilities across the country, milk — a nutritious family staple — remains affordable and available,” says Michael Dykes, president and CEO, IDFA. “We are working closely with the USDA to remain flexible in how dairy processors get milk to schools and school districts who are continuing to provide meals to the millions of children who need them each day, despite closures, through distribution at schools, churches, parks and other community sites.”

Additionally, IDFA is keeping its members updated on the latest guidances and other information related to COVID-19 at https://www.idfa.org/news/coronavirus.

NMPF says it is working with lawmakers and regulators to ensure a safe and adequate supply of milk and mitigate potential economic harm to dairy farmers.

“From possible damages to domestic and world markets to supply chain labor disruptions on the farm, at the processing plant or in transporting milk, the potential ramifications for dairy are wide-ranging. We will devote our resources to the best of our ability to helping dairy farmers and cooperatives respond to whatever challenges they may face,” says Jim Mulhern, president and CEO, NMPF.

Industry groups also are raising concerns over how the spread of COVID-19 will affect international trade. The Cheese Importers Association of America (CIAA) says impacts already are being felt by the U.S. cheese importing community.

CIAA notes that earlier this week, FDA issued guidance to food importers in response to the COVID-19 pandemic, stating FDA will temporarily not enforce supplier verification on-site audit requirements for importers under the Food Safety Modernization Act so long as other supplier verification methods are used instead. This guidance was issued in light of domestic and foreign governments instituting travel restrictions and advisories, which may impact the ability of food manufacturers and Foreign Supplier Verification Programs (FSVP) importers to conduct on-site audits of their suppliers.

Travel has been restricted on the Canadian and Mexican borders but will remain open for trade.

FDA also has assured stakeholders in the food industry that any closures announced by state or local governments will not apply to food processing or foods in transit.

IDFA notes that the dairy industry in the European Union this week began seeing “massive loss of demand” due to hotel, retail and foodservice closures, and is asking the government to subsidize storage of powder, butter and cheese.

“Unfortunately, export markets — which generally take 20% of our goods — are flat,” Dykes says. “Smaller processors, co-ops and farms will feel any decline faster than others. Hence, the need for a strong stimulus.”

Increased disruption has been apparent in the specialty retail and restaurant business, as many states have enacted restrictions closing dining areas and restricting gatherings of people. Wisconsin, for instance, has an order prohibiting mass gatherings of 10 people or more, and restaurants and bars can only offer take-out or delivery. Grocery stores and convenience stores are exempted. Yesterday California announced “shelter-in-place” orders that allow only essential services to stay open, while New York state will enforce a similar lockdown starting Sunday.

Artisanal cheese shop Fromagination in downtown Madison, Wisconsin, has announced reduced hours and is allowing no more than seven people in its shop at one time. It is still shipping cheese and providing carry-out lunch items and cheese trays.

Murray’s Cheese in New York is offering virtual cheese classes. As of press time Murry’s cheese shops were open with revised hours, though Murray’s Cheese Bar, Murray’s Mac & Cheese and its classrooms and event spaces are closed for at least two weeks. The Cheese School of San Francisco, which includes a cheese counter, cafe, catering and events, has suspended all business until March 31.

“Your health, our health and the health of our communities are more important than anything else,” The Cheese School says in a statement on its closure. “We’re heeding the advice of medical experts by not gathering together for the foreseeable future in the hopes we don’t overwhelm our medical system.”

CMN


February U.S. milk production, milk cows up from a year ago

March 20, 2020

WASHINGTON — Milk production in the 24 major milk-producing states in February totaled 17.04 billion pounds, up 5.6% from February 2019, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). However, adjusting production for the additional day due to leap year causes February milk production to be up 2.0% on a daily average basis. For the entire United States, February milk production was estimated at 17.87 billion pounds, up 5.3% from February 2019 or 1.7% on a daily average basis when adjusted for leap year. (All figures are rounded. Please see CMN’s Milk Production chart.)

January revised production for the 24 major states totaled 17.96 billion pounds, an increase of 38 million pounds or 0.2% from last month’s preliminary production estimate.

February production per cow in the 24 major states averaged 1,927 pounds, 94 pounds above February 2019. For the entire United States, production per cow in February is estimated at 1,907 pounds, 93 pounds higher than February of last year.

NASS reports the number of milk cows on farms in the 24 major states was 8.84 million head in February, up 39,000 head from February 2019 and up 8,000 head from the previous month. In the entire United States, there were an estimated 9.37 million milk cows in February, 18,000 cows more than a year earlier and 9,000 cows more than January.

California led the nation’s milk production in February with 3.41 billion pounds of milk, up 6.3% from a year earlier. Wisconsin followed with 2.43 billion pounds of milk produced in February, up 2.7% from February 2019.

CMN

 


Market players ‘scrambling’ to assess coronavirus impact

March 20, 2020

UTRECHT, the Netherlands — The upward trajectory in global dairy product prices visible in the fourth quarter of 2019 has stalled in the first quarter of 2020. The onset of the coronavirus in China and its permeation across the globe have buyers and sellers scrambling to assess the market impact, according to the latest RaboResearch Dairy Quarterly, “The Corona Hangover.”

“Global dairy commodity prices have already priced in the uncertainty,” says Michael Harvey, RaboResearch senior dairy analyst. “But a less-than-favorable expected finish to the New Zealand production season is providing some price support.”

Rabobank anticipates China’s consumer buying patterns to normalize by the second half of 2020, with evidence of improvement in some supply chains already visible. The risk of a setback or a delayed economic recovery in China presents a major downward price risk to Rabobank’s current forecasts, the report adds.

Rabobank adds that it is essential to assess the situation within a historical context.

“The forecast reduction in China’s 2020 imports is not expected to be as severe as the 2014-2015 destocking, which resulted in a decline in liquid milk equivalent imports of more than 35% over 12 months,” the report says.

Against this backdrop, global milk production from the “Big 7” — the United States, European Union (EU), Australia, New Zealand, Brazil, Argentina and Uruguay — is rising, Rabobank says. All regions within the Big 7 will report year-on-year growth in the second quarter of 2020, granted against low comparables.

The combination of reduced Chinese imports, significant supply chain disruptions — including extreme competition for shipping containers across the globe — and rising dairy surpluses in export regions will keep downward pressure on global markets through much of 2020, the report says.

Rabobank says the U.S. and EU “spring flush” in milk production will be a key litmus test for global markets.

“Under normal circumstances, the forecast supply growth across the export engine for 2020 would not be enough to overwhelm global markets. But the net effect is a sizeable increase in the combined exportable surplus, and with an absent China, this creates a short-term risk of oversupply,” the report says.

At the same time, lower global prices and weaker Chinese demand are providing an opportunity for buyers to procure at lower-than-expected commodity prices, the report notes. However, Rabobank has not made any significant revision to demand expectations for the broader global market.

Nonetheless, the rate of growth in surplus milk will be restrained, and lower commodity prices in the face of weaker economic growth will support buyers in price-sensitive regions that are not dependent on oil revenue, the report adds. Based on the forecast fundamentals through 2020, this should lead to a down cycle in global dairy markets.

Looking ahead, Rabobank says measures taken by countries around the world to limit the spread of the coronavirus could have a greater-than-expected impact on dairy demand and supply chains.

“Falling tourist numbers are already impacting foodservice sectors in several markets. Southeast Asia is a particularly vulnerable region,” the report says.

A synchronized slowdown in the global economy already was a risk for dairy markets heading into 2020, the report adds.

“The coronavirus and sharply declining oil prices will lead to a global recession, and this may more negatively impact dairy demand in the upcoming months than previously anticipated,” Rabobank says.

According to the report, in the United States, the coronavirus is not expected to impact milk production but could impact the ability to process milk.

“This could be another factor magnifying an already seasonal milk surplus,” Rabobank says. “More milk could be diverted into butter and powder for longer shelf life if there is reduced export and domestic demand for cheese, particularly in foodservice applications. As a result, butter and milk powder prices, as well as the corresponding Class IV milk prices, could retreat further from the current forecast.”

CMN


Caucus formed on coronavirus; FDA stalls foreign inspections

March 13, 2020

WASHINGTON — The Consumer Brands Association (CBA) last week announced its support of the newly created, bipartisan Congressional Supply Chain Caucus in the U.S. House. The launch of the caucus coincides with the coronavirus outbreak that is disrupting global supply chains and threatening access to the products upon which consumers depend.

“American consumers have billions of interactions with consumer packaged goods each day. Ensuring access and affordability of these products is a complex task, made more challenging by the emergence of coronavirus,” says Geoff Freeman, president and CEO, CBA. “Our industry is grateful for the bipartisan leadership of the co-chairs in recognizing the critical role supply chains play and the importance of streamlining them for the benefit of consumers.”

Reps. Colin Allred, D-Texas; Angie Craig, D-Minn.; Rodney Davis, R-Ill.; and David Rouzer, R-N.C., will serve as co-chairs of the caucus and are actively recruiting members to join them as they work to “strengthen and add resiliency to protect the delivery system, which can be severely harmed by geopolitical events such as the recent coronavirus outbreak that has had significant impacts on global supply chains,” as stated in a letter to their congressional colleagues.

“The creation of the House Supply Chain Caucus underscores the need to accelerate policy solutions and technological innovations that deliver for American consumers,” says Tom Madrecki, vice president, supply chain, CBA. “The caucus’ comprehensive approach to identifying policy priorities intended to achieve frictionless supply chains will help Congress create smart, bipartisan solutions that allow Americans better access to affordable, safe products when and where they need them.”

According to the co-chairs, the caucus will collaborate to elevate supply chain issues for their constituents now and in the years to come. Many of these issues are interconnected, requiring greater coordination on Capitol Hill and innovative thinking to deliver the maximum benefit to the consumer. CBA says it will work with the caucus to further engage lawmakers on ways to achieve the most innovative and efficient supply chains.

Meanwhile, as the World Health Organization this week declared coronavirus outbreak a global pandemic, FDA announced it is postponing most foreign inspections through April, effective immediately. Inspections outside the United States deemed mission-critical will still be considered on a case-by-case basis.

FDA says it based this decision on a number of factors, including State Department Level 4 travel advisories in which travel is prohibited for U.S. government employees, Centers for Disease Control and Prevention travel recommendations, access restrictions being imposed on foreign visitors by certain countries, guidance from the Office of Personnel Management and the importance of the health and safety of its employees.

“Another critical factor in taking this action is the confidence we have in our ability to maintain oversight over international manufacturers and imported products using alternative tools and methods,” says Stephen M. Hahn, FDA commissioner.

Hahn says the agency is aware of how this action may impact other FDA responsibilities, including product application reviews.

“We will be vigilant and monitor the situation very closely and will try to mitigate potential impacts from this outbreak in lockstep with the whole of the federal government,” he says. “We stand ready to resume foreign inspections as soon as feasible.”

As an interim measure, FDA will employ additional tools to ensure the safety of products imported to the United States, which have proved effective in the past, the agency says. These include denying entry of unsafe products into the United States, physical examinations and/or product sampling at borders, reviewing a firm’s previous compliance history, using information sharing from foreign governments as part of mutual recognition and confidentiality agreements, and requesting records “in advance of or in lieu of” on-site drug inspections.

FDA will continue working with U.S. Customs and Border Protection to target products intended for importation into the United States that violate applicable legal requirements for FDA-regulated products.

FDA notes it has the ability through its risk-based import screening tool (PREDICT) to focus its examinations and sample collections based on heightened concerns of specific products entering U.S. commerce.

“The PREDICT screening continues to adjust risk scores as necessary throughout the COVID-19 outbreak. We are keeping a close eye out for indications of port shopping or cargo diversion and will continue our oversight of shipments through potentially higher-risk venues such as international mail facilities,” Hahn says. “We can refuse admission of products that fail sample testing or may violate other applicable legal requirements.

“As this remains a dynamic situation, we will continue to assess and calibrate our approach as needed to help advance federal response efforts in the fight against this outbreak,” he adds.

CMN


USDA raises milk production forecast, projects lower prices

March 13, 2020

WASHINGTON — USDA raised its 2020 milk production forecast to 222.3 billion pounds, up from 222.0 billion pounds forecast last month, in its latest World Agricultural Supply and Demand Estimates report released this week.

The 2020 fat-basis import forecast is raised from the previous month to 6.8 billion pounds on recent trade data and stronger anticipated imports of cheese and butterfat products. The fat-basis export forecast is reduced to 9.2 billion pounds on slower expected demand in the first half of the year, USDA says.

On a skim-solids basis, the 2020 import forecast is raised to 5.6 billion pounds on stronger imports of cheese, milk proteins and several other dairy products. The skim-solids export forecast is raised to 43.9 billion pounds on expectations of continued strength in international demand.

Annual 2020 product price forecasts for cheese, butter and nonfat dry milk (NDM) are lowered from the previous month. USDA says cheese now is forecast to average $1.755 per pound, down from $1.790 forecast last month. Butter is forecast to average $1.845, down from $1.910 last month, while NDM is forecast to average $1.175, down from $1.255 last month.

The 2020 whey price forecast is raised to $0.355 per pound, up from $0.345 forecast last month.

Meanwhile, the 2020 Class III milk price forecast is reduced from $16.95 per hundredweight to $16.65 on the lower cheese price forecast, while the Class IV price is reduced from $16.70 to $15.75 on lower butter and NDM price forecasts, USDA says.

The 2020 all-milk price forecast is lowered to $18.25 per hundredweight, down from $18.85 forecast last month.

CMN

 


USDA reports progress on China; dairy industry testifies on trade

March 13, 2020

WASHINGTON — U.S. Secretary of Agriculture Sonny Perdue this week announced China has continued its progress in implementing the first phase of the U.S.-China Economic and Trade Agreement and has taken several additional actions to realize its agriculture-related commitments. The agreement entered into force Feb. 14, and these actions build upon measures announced Feb. 25 (see “USDA, USTR outline progress on implementing China deal” in the Feb. 28, 2020, issue of Cheese Market News).

The most recent actions include updating lists of facilities approved for exporting dairy, infant formula, seafood and fish oil and fish meal. They also cover conditionally lifting a ban on certain beef imports and signing a protocol that allows the importation of fresh California nectarines.

Additionally, China’s new tariff exclusion process went into effect March 2, and importers now can apply for exclusions from retaliatory tariffs (See “China considers tariff exemption, U.S. takes new actions on trade” in the Feb. 21, 2020, issue of Cheese Market News). USDA has published a translation and analysis of China’s guidance for participation in the latest round of exclusions, which is available at www.fas.usda.gov.

USDA says it will continue to closely monitor China’s implementation of the agreement.

“These implementation measures are promising steps showing that China is taking steps to fulfill their purchase commitments,” Perdue says. “Under President Trump’s leadership, this agreement will produce positive gains for the entire economy, especially our agriculture sector. We look forward to China continuing to achieve their commitments in future months.”

Also this week, the U.S. House Agriculture Committee’s Livestock and Foreign Agriculture Subcommittee held a hearing to examine U.S. agricultural trade from the perspective of stakeholders.

“There is no question that trade is vitally important to American farmers and ranchers looking to expand market access for their products. For decades, we’ve seen nations like China, Turkey and India take advantage of our producers with unfair tariffs, nontariff trade barriers and predatory trading practices,” says Subcommittee Ranking Member David Rouzer, R-N.C.

“With 96% of the world’s population living outside of the United States, it’s critical our farmers and ranchers have trade deals in place that allow them to reach every potential customer,” says Committee Ranking Member K. Michael Conaway, R-Texas. “We have long battled the distortions in global markets for farm products, and in these tough times for agriculture, that work is more important than ever.”

The National Milk Producers Federation (NMPF) joined other ag stakeholders at the hearing and was represented by James “Cricket” Jacquier, Connecticut dairy farmer and chairman of the board for Agri-Mark, which is a member of NMPF and the U.S. Dairy Export Council.

In his testimony, Jacquier urged Congress to work with the administration to use negotiating resources wisely to target important agricultural markets and create greater access for U.S. dairy products with key trading partners. He noted that careful and proactive attention to the implementation and enforcement of negotiated trade agreements, such as the U.S.-Mexico-Canada Agreement (USMCA), will be critical in the coming year, emphasizing in particular the importance of ironing out details pertaining to new export access and Class 7-related dairy policy reforms with Canada, and common cheese name safeguards with Mexico as USMCA progresses.

Regarding geographical indications (GIs), Jacquier also raised concerns over the European Union’s (EU) efforts to misuse GIs to confiscate common food names such as parmesan, feta and asiago, as well as wine and meat terms.

“America’s dairy farmers applaud the certainty that lowered tariffs and fairly negotiated trade agreements bring to our industry,” Jacquier says. “However, if we cannot combat outrageous nontariff barriers, such as those the EU is manufacturing to block the export of American-made cheeses, these trade wins can ring hollow. The EU’s stance on common food names is a protectionist and anti-trade policy, and it must be firmly rejected by Congress and by U.S. trade officials at every turn.”

NMPF notes that in 2019, the U.S. dairy industry exported more than $6 billion in dairy products ranging from cheese to ice cream to milk powders. Trade disputes and a lack of market access comparable to U.S. competitors has significantly harmed the dairy industry, NMPF says, contributing to a 15% decline in the number of dairy farmers over the past two years, according to USDA data.

“Our future is dependent on creating market demand for the milk we produce through continued growth in sales to foreign markets,” Jacquier says.

CMN


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Today's Cheese Spot Trading
March 31, 2020


Barrels: $1.2050 (-9 1/2)
Blocks: $1.3300 (-10 3/4)


Click here for more market activity
Cheese Production
U.S. Total Jan.
1.103 bil. lbs.


Milk Production
U.S. Total Feb.
17.865 bil. lbs.

Guest Columnist

Dairy collaboration a bright spot in challenging coronavirus times

Jim Mulhern, National Milk Producers Federation

Pizza: Taking a healthy slice out of 2020 food trends

Mike Gallagher, California Milk Advisory Board

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