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Stakeholders urge action on USMCA to open dairy access

July 12, 2019

WASHINGTON — Following last month’s ratification of the U.S.-Mexico-Canada Agreement (USMCA) by Mexico’s Senate, U.S. dairy and agricultural stakeholders are urging action to continue to advance progress on the agreement and open up trade access for U.S. exporters.

The National Milk Producers Federation (NMPF) notes that while the push to complete USMCA received a boost in June when Mexico became the first country to ratify the trade agreement, Washington has yet to take action, making collaboration key as NMPF works with other stakeholders to get the agreement over the finish line.

The Office of the U.S. Trade Representative (USTR) is working with leading members of Congress to hash out a way forward, specifically focusing on concerns expressed by Democrats to guarantee sufficient congressional support, according to NMPF. Complementing that work, about 50 dairy farmers and dairy-cooperative staff took NMPF’s message in support of USMCA’s passage directly to Capitol Hill in June. Their on-the-ground advocacy was dovetailed with NMPF’s work to educate policymakers on the importance of this trade agreement to the dairy industry.

NMPF also has joined forces with the U.S. Dairy Export Council and the International Dairy Foods Association to write to members of Congress from top dairy-producing states, asking them to “please pursue a USMCA vote without delay” on behalf of the dairy farms and businesses they represent.

“Solidifying and expanding trade opportunities abroad through USMCA will improve the prospects of dairy farms here at home,” says Jim Mulhern, president and CEO, NMPF. “In the midst of uncertainty surrounding our trade relationships and yet another year of meager milk prices, the United States lost an average of seven dairy farms a day in 2018. The passage of USMCA will instill a renewed sense of optimism in our dairy farmers.”

NMPF notes USMCA will help bolster the U.S. dairy industry by locking in existing access to the key export market of Mexico while increasing trade opportunities in Canada. USMCA will establish new trade rules to discipline Canada’s trade-distorting dairy policies, discourage unscientific barriers to trade and preserve the rights of common cheese name users. U.S. government estimates calculate that USMCA will increase U.S. dairy exports to Mexico and Canada by $277 million once it is fully implemented.

News report this week said the White House plans to send USMCA to Congress after Sept. 1, setting up a vote by the end of the year.

However, the American Dairy Coalition (ADC) and its member producers this week say they are concerned that the vitality of the nation’s dairy industry will continue to be impaired if there is not swift passage of USMCA by the end of this month.

ADC is asking the U.S. House to come to a consensus with the White House on their remaining concerns with USMCA and expedite a vote to pass the pending trade deal.

“The USMCA would open the possibilities for U.S. products to be competitive across our borders. Passage would bring in an anticipated several hundred million dollars of trade opportunities in dairy as a result of this agreement,” ADC says. “Further, the passage of USMCA would set the tone to improve trade prospects with other countries, most notably with Japan.”

With the looming onset of the 2020 presidential and congressional elections, the necessary votes needed to pass USMCA may be lost if the process is carried into 2020, the organization adds.

“With $9.4 billion in total agricultural exports annually on the line, the importance of passage of this agreement cannot be understated,” says Walt Moore, president, ADC. “Trade will be essential to reviving commodity prices and turning the tide of the deep and prolonged recession of the dairy economy. The current lack of a trade deal with Mexico and Canada is costing us. Dairy farmers need Congress to push this through and push it through quickly.”

The National Farmers Union (NFU) also is urging action on USMCA in addition to encouraging that improvements be made before a final deal is reached. Specifically, NFU is urging improvements to the deal that could help to reduce health care costs and protect rural jobs before it is sent to Congress for approval.

In a letter sent to House Speaker Nancy Pelosi, D-Calif., and House Minority Leader Kevin McCarthy, R-Calif., NFU President Roger Johnson emphasizes the value of trade agreements to agricultural communities.

“Access to export markets is critical for U.S. family farms,” the letter says. “Canada and Mexico are the leading export markets for U.S. agricultural products, and USMCA would maintain those important relationships.”

Though international export markets have provided economic opportunities for family farmers and ranchers, the free trade framework that has dominated U.S. trade deals for the past 25 years has not been without its shortcomings, Johnson says.

“Farmers are increasingly dependent on off-farm employment to make ends meet, but many rural manufacturing and other jobs are moving to foreign markets with cheaper labor and lower environmental standards,” Johnson says. He recommends that congressional leadership include proposals that would address those issues.

“Labor, environment, and enforcement standards must be strengthened to help to keep jobs in rural communities,” he says.

Johnson also expresses concern about the implications of USMCA for rural health care.

“The increasing cost of health care, a top concern among NFU members, is eating into already shrinking farm revenue,” Johnson says, adding that USMCA may exacerbate the problem. As written, USMCA would grant pharmaceutical companies marketing exclusivity for biologic drugs for a minimum of 10 years. If approved, this rule would prevent Congress from acting to hasten the entrance of lower-cost generic drugs to the market, he notes.

Johnson says all Americans should have access to effective health care, but given the added risks of agricultural professions, it is particularly critical that legislators work to improve coverage and affordability in rural areas. USMCA’s prescription drug provision would “limit the actions Congress can take to reduce prescription drug prices,” notes Johnson, and as such, it “must be rectified to allow for future reductions in health care costs.”

CMN


Milk production, demand for ag products projected to grow

July 12, 2019

ROME, Italy — Global demand for agricultural products is projected to grow by 15% over the coming decade, while agricultural productivity growth is expected to increase slightly faster, causing inflation-adjusted prices of the major agricultural commodities to remain at or below their current levels, according to an annual report by the Organization for Economic Cooperation and Development (OECD) and the United Nation’s Food and Agriculture Organization (FAO) released this week.

This year’s edition of the OECD-FAO Agriculture Outlook, presented in Rome, Italy, on Monday, provides an assessment of the 10-year prospects for agricultural and fish commodity markets at national, regional and global levels.

“Global agriculture has evolved into a highly diverse sector, with operations ranging from small subsistence farms to large multinational holdings,” José Graziano da Silva, FAO director-general, and Angel Gurría, OECD secretary-general note in the report. Along with providing food, they note today’s farmers “are important custodians of the natural environment and have become producers of renewable energy.”

The outlook projects that yield improvements and higher production intensity, driven by technological innovation, will result in higher output even as global agricultural land use remains broadly constant. Meanwhile, direct greenhouse gas emissions from agriculture are expected to grow by approximately 0.5% annually over the coming decade, below the 0.7% rate of the past 10 years, and below the projected output growth rate, indicating declining carbon intensity.

At the same time, new uncertainties are emerging on top of the usual risks facing agriculture, the outlook says. These include disruptions from trade tensions, the spread of crop and animal diseases, growing resistance to antimicrobial substances, regulatory responses to new plant-breeding techniques and increasingly extreme climatic events. Uncertainties also include evolving dietary preferences in light of health and sustainability issues, and policy responses to worldwide trends in obesity.

“The outlook makes abundantly clear that trade is critical for global food security,” notes OECD Director for Trade and Agriculture Ken Ash. “Regions that are experiencing rapid population growth are not necessarily those where food production can be increased sustainably, so it is essential that all governments support open, transparent and predictable agro-food markets.”

According to the report, world milk production is expected to grow at 1.7% annually (to 981 million metric tons by 2028) over the next decade, faster than most other main agricultural commodities. In contrast to the previous decade, the projected growth of cow herds (1.2% annually) is higher than the projected average yield growth (0.4%) as cow herds are projected to grow faster in countries with low yields.

It is expected that India and Pakistan will contribute more than half of the growth in world milk production over the next 10 years and account for more than 30% of world production in 2028, the report says. Production in the second-largest milk producer, the European Union, is projected to grow more slowly than the world average as only a small share of production is exported and domestic demand is growing only slightly, the report adds.

The highest average yield per cow is expected to occur in North America as the share of grass-based production is low and feeding is focused on high yields, the report says. Cow herds in the United States and Canada are expected to remain largely unchanged and production growth is expected to come from further increases of what are already high yields. As domestic markets are saturated and milkfat demand continues to increase, U.S. exports will mostly be in the form of skim milk powder, according to the report.

The share of fresh dairy products in world consumption is expected to increase over the coming decade due to strong demand growth in developing countries, driven by income and population growth, the report says. World per capita consumption of fresh dairy products is projected to increase by 1.0% annually over the coming decade, slightly faster than over the past 10 years, driven by higher per-capita income growth, especially in India.

In Europe and North America, overall per-capita demand for fresh dairy products is declining, but the composition of demand has been shifting for several years toward dairy fat, the report adds. The majority of cheese consumption, the second-most important dairy product in terms of milk solids, occurs in Europe and North America, where per capita consumption is expected to continue to increase, according to the report.

The report notes that dairy trade flows could be substantially altered by changes in the trade environment. For example, large amounts of cheese and other dairy products are traded between the European Union and the United Kingdom, and this could be affected by Brexit, while the U.S.-Mexico-Canada agreement is expected to influence dairy trade flows in North America. So far the big dairy consuming countries, India and Pakistan, are not integrated in the international market. Greater engagement in trade by these countries could have a substantial effect on world markets, the report notes.

The European Union will continue to be the main world cheese exporter, followed by the United States and New Zealand, the report says. It is projected that the European Union’s share in world cheese production will be around 48% in 2028 and sustained by increased cheese exports to Canada via the Comprehensive Economic and Trade Agreement (CETA) and to Japan following the ratification of a bilateral trade agreement in 2019.

The United Kingdom, the Russian Federation, Japan, the European Union and China are projected to be the top five cheese importers in 2028. There will be some changes in the order, but most of the main cheese importers are developed countries, the report says. These countries often also export cheese, and international trade is expected to increase the choice of cheeses for consumers.

Meanwhile, the report finds that consumption levels of sugar and vegetable oil are projected to rise, reflecting the ongoing trend toward prepared and more processed foods, notably in many rapidly-urbanizing low and middle-income countries. Concerns about health and wellbeing, meanwhile, are likely to nudge numerous higher-income countries towards lower consumption of red meat and a shift from vegetable oils to butter.

In addition, the demand for feed crops is projected to outpace animal production growth in countries where the livestock sector is evolving from traditional to commercialized production systems, while the use of agricultural commodities as feedstock to produce biofuels is expected to grow primarily in the developing countries, the report says.

Trade in agricultural and fisheries commodities should expand over the coming decade at around 1.3% annually, slower than over the past decade (3.3% average), as growth in global import demand is expected to slow, the report says. On the export side, both Latin America and Europe are projected to increase their sales to foreign markets.

This year’s publication features a special chapter on Latin American and the Caribbean, a region that accounts for 14% of global agricultural and fisheries production and 23% of the world’s exports of agricultural and fisheries products — a share expected to rise to 25% by 2028.

Despite that growth, the region is facing persistent challenges in terms of food security, as many households are unable to afford the food they need, the report says. The region also faces growing natural resource challenges. Ensuring a more sustainable and inclusive pathway for future agricultural growth will depend on developments in the areas of nutrition, social and environmental protection, and support for livelihoods.

The report notes a growing global population will continue to use increasing amounts of agricultural products as food, feed and for industrial purposes. Much of the additional food demand over the coming decade will originate in regions with high population growth, in particular Sub‑Saharan Africa, India, and the Middle East and North Africa.

To view the report, visit www.agri-outlook.org.

CMN


USDA raises all-milk forecast for this year, lowers it for 2020

July 12, 2019

WASHINGTON — In its latest “World Agricultural Supply and Demand Estimates” report, USDA’s 2019 milk production forecast is unchanged at 218.2 billion pounds, but the forecast for 2020 is reduced slightly to 221.8 billion pounds on slower expected growth in milk per cow.

USDA’s “Cattle” report, to be released on July 19, will provide a mid-year estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement, USDA says.

For 2019 and 2020, the fat-basis import forecasts are raised from the previous month on higher expected imports of butterfat products. The forecast for fat-basis exports for 2019 is reduced by 200 million pounds from last month’s report to 9.5 billion pounds on slower expected shipments of butterfat products. The 2020 fat-basis export forecast is reduced by 200 million pounds to 10.2 billion pounds on expectations that U.S. butter exports will continue to be less competitive globally, USDA says.

The skim-solids basis import forecasts for 2019 and 2020 are unchanged from the previous month. However, skim-solids basis exports for 2019 and 2020 are reduced from the previous month on lower exports of lactose, whey products and other dairy products.

The 2019 cheese and nonfat dry milk (NDM) price forecasts are increased from the previous month to $1.660 per pound and $1.020 per pound, respectively, while butter and whey price forecasts are reduced to $2.315 and $0.375, respectively.
USDA increased its 2020 cheese price forecast by half a penny to $1.730 as demand is expected to improve, but the butter price forecast is lowered by 2 cents from last month’s forecast to $2.345. The 2020 dry whey price forecast is reduced by 1.5 cents to $0.360 as export prospects remain relatively weak, USDA says. The 2020 NDM price forecast is unchanged at $1.045.

The 2019 Class III price is raised by 15 cents to $16.05 per hundredweight as the higher cheese price more than offsets a lower whey price, and the Class IV price is raised by 5 cents to $16.45 as a higher NDM price more than offsets the lower butter price, USDA says.

The 2020 Class III price forecast is unchanged at $16.65 as the fractionally higher cheese price is offset by a lower whey price. The 2020 Class IV price forecast, lowered by 10 cents to $16.75, reflects a lower butter price, USDA adds.

The 2019 all-milk price is forecast 20 cents higher at $18.20, but the all-milk price forecast for 2020 is 5 cents lower than the previous month at $18.85.

CMN



Hispanic Cheese Makers-Nuestro Queso marks 10-year anniversary

By Kate Sander

CHICAGO — This month marks the 10-year anniversary of Hispanic Cheese Makers-Nuestro Queso, which was founded in July 2009 with the vision of providing high-quality, authentic Mexican, Caribbean and Central American-style cheeses to consumers across the United States.

It’s been a transforming journey for the company founded as a retail branded cheesemaker. While it has changed direction from where it started, the company is in a solid position to move forward into the next decade and beyond, says Mark Braun, CEO of the company and one of its initial investors.

“We’ve had ups and downs, but we have steadied the ship and have a clear path ahead,” Braun says.

After selling its retail branded business a couple of years ago, Hispanic Cheese Makers now is zeroed in on providing customized private label Hispanic cheese options for companies nationwide. The company offers an array of private label Hispanic cheese while focusing on sustainable and holistic business practices.

Originally founded as Nuestro Queso, Hispanic Cheese Makers was launched by a handful of investors and cheesemakers who believed they could fill a market need by producing quality, authentic Hispanic cheese in the Midwest.

Moving forward with the goal of building a national Hispanic cheese brand, the company executives soon found that to be an ambitious plan in a market segment largely characterized by local and regional offerings, Braun says. However, as the business grew, it received more and more requests to produce private label Hispanic cheese product. With that demand ramping up, the decision was made to sell the Nuestro Queso brand and change the company’s name and business model.

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Probiotic dairy has a place in growing fermented foods trend

July 5, 2019

By Rena Archwamety

MADISON, Wis. — Fermentation has been making waves this year, with fermented foods and beverages proliferating across store shelves and chef creations. One driver for this trend has been increased interest in digestive and holistic health.

“People search online for information about how to improve their health and find lots of positive information about fermented foods of all kinds, not only dairy but kombucha, kimchi and many others. If you launch a fermented food, you are riding on this powerful trend,” says Julian Mellentin, director and founder of global food consulting firm New Nutrition Business.

Digestive wellness is one of the main health benefits promoted by fermented foods, particularly those with added probiotics, and dairy companies have been capitalizing on this benefit for decades. In his report, Mellentin points to Japanese company Yakult Honsha, which launched its daily-dose probiotic dairy drink in 1955 and today is the world’s biggest probiotic dairy brand, with $5.5 billion in global retail sales.

More recently, in 2006 Dannon introduced its Activia probiotic brand in the United States, educating consumers on a large scale about the benefits of probiotics and digestive wellness.

“Dannon’s communication is essentially advertising, and Dannon did a great job with its ‘feel the difference’ promotions, which offered people their money back if they consumed Activia for 14 days and didn’t feel an improvement in their digestive wellness,” Mellentin says. “This ‘feel the difference’ promotion was pioneered by Danone in Europe back in 2002, and it has been such a consistent driver of consumer adoption that the company has used it in almost every market — even China.”

However, other dairy products like cheese, which also are fermented and have experimented with probiotics in the past, have been less successful in this arena.

“There have been several failed attempts at probiotic cheese, and cottage cheese has been unable to capitalize on this benefit, even though it can be a spoonable like yogurt,” Mellentin notes. “Protein is the message that seems to resonate best with consumers in relation to cheese. Quark in Europe also has kept clear of the probiotic message.”

Historically, yogurts and other fermented dairy products such as kefir and buttermilk have been very popular vehicles for probiotics, according to Mirjana Curic-Bawden, senior scientist at Chr. Hansen, which develops and produces cultures and probiotics for dairy and other applications.

“Probiotics can also be used in fermented plant-based products, frozen yogurts and frozen dairy and non-dairy desserts. We also see increased interest in using probiotics in juices, granola or energy bars, powder formulae, etc.,” she says. “However, fermented dairy and plant-based products are still the most popular application. It is partially due to the healthy image, ease of application, refrigeration and relatively short shelf life of the products that ensures good survival of probiotics.”

• Dairy, digestion and health

Fermentation is a key aspect in the production of many dairy products such as yogurt, kefir and cheeses. Cultures are added to milk, digesting the lactose to create lactic acid as well as texture and flavor development during the fermentation process, depending on the specific culture.

Sometimes people assume any yogurt or fermented food has a probiotic benefit, but this is not the case, notes KJ Burrington, dairy ingredient and cultured products coordinator at the Center for Dairy Research in Madison, Wisconsin.

“Yogurt itself has some digestive benefits. For example, if someone has difficulties digesting lactose, bacteria in yogurt can help a person digest it,” Burrington says. “As far as an overall health benefit, the only yogurts that would be considered as having a benefit to GI (gastrointestinal) health are ones that add a probiotic.”

She adds that companies need to do clinical trials to prove that the probiotics added to dairy products truly contain the health benefit they claim.

“During the fermentation process, the probiotics will also grow,” Burrington says. “Once it reaches the end of fermentation, probiotics should be grown up enough that they provide the health benefit a company is looking for. In most cases, companies using probiotics would like to have a certain number still there by the end of shelf life. For most companies, that’s about 100 million bacteria.”

Curic-Bawden notes that probiotics can be added to yogurt after it has been fermented, but the most practical and economical way is to inoculate them at the same time as the yogurt culture, incubate and let them grow.

“The popularity of probiotics targeting gut health and immunity is by far the best documented effect and it is not going away,” Curic-Bawden says. “There is more evidence showing effect of gut microbiome on cognition, stress reduction, anxiety, obesity, diabetes, inflammation, chronic fatigue, IBS, etc.”

In addition to probiotic yogurts, kefir companies have found success in conveying the digestive benefits of probiotics paired with dairy.

Lifeway Foods, the leading kefir supplier in the United States, started in 1986 when Russian immigrants Michael and Ludmila Smolyansky introduced the popular Eastern European fermented dairy drink to mainstream markets in the United States. Their daughter, Julie Smolyansky, now is president and CEO of Lifeway Foods.

“The idea of gut health, fermented dairy and cultured dairy was almost unheard of in the U.S. then,” Julie Smolyansky says. “Slowly but surely, we built this conversation and built awareness. Finally, the medical community, consumers and the general market caught up. Today there is outstanding awareness around gut health and the microbiome. Very recently, the gut has been considered as the ‘second brain.’”

Smolyansky says while kefir has long been known to be good for the urinary system and digestive health, there have been more studies in the last five years connecting digestive health with mental wellness.

“By building a stronger gut and microbiome, you can manipulate stress and anxiety,” she says. “Second, as people make conscious mindful food choices, they move forward with feelings of wellbeing. In very accessible ways, they can improve their health and well-being.”

Consumers are more educated on the benefits of probiotics in dairy products, but Burrington says they also should know that prebiotic fiber is important for probiotics to work.

“The information is getting out to consumers on how important not just probiotics is, but also a good diet that includes prebiotics, having food that probiotics like to eat,” she says. “If you eat junk food and a probiotic, it won’t be as good. Prebiotic fiber from fruits, vegetables and whole grains provide better food for the bacteria.”

• New competition

Though fermented and probiotic dairy products may align with current trends and awareness over digestive health, the maturing segment faces competition from newer, nondairy innovations.

In his recently-published report, “8 Key Trends in Dairy Nutrition,” Mellentin says the success of probiotic dairy helped familiarize people with the idea of fermentation and “good bacteria.” Consumers still want probiotics, he says, but now there are new and different forms available.

“In Europe and the U.S., the level of competition from other probiotic and ‘fermented’ categories means that there is no chance of new probiotics achieving the kind of mass success that probiotic yogurt once achieved,” Mellentin says in the report. “Probiotic dairy brands are either approaching maturity or facing decline — a decline which may worsen if consumers switch their digestive wellness focus to emerging categories such as kombucha or water-based kefirs.”

Total yogurt volume sales dropped 2.5 percent over the 52 weeks ending May 19, 2019, according to IRI data courtesy of Dairy Management Inc. During this same period, kefir sales dropped 10.6 percent, and cottage cheese sales remained steady.

Mellentin notes that in the United States and Europe, most of the yogurt market has become a low- to no-growth commodity category, with pressure from private-label products and few opportunities for differentiation. Meanwhile, he notes the market for kombucha (fermented tea) has grown substantially, as brands such as PepsiCo’s Kevita have invested more heavily in marketing and distribution.

“However, even in competitive markets there are still many ways that dairy probiotic products can increase the chances of success,” he says, giving examples of bundling messaging with other benefits such as protein or permission to indulge, or choosing a different probiotic benefit platform from digestive wellness.

“Media and social media are educating people about the gut microbiome and its positive connection to weight, cognition, etc.,” Mellentin says in his dairy trends report. “For companies willing to invest for the long term, now is the time to get in on the ground floor, focusing on niche products with specific ‘new’ benefits, selling in low volumes at high prices. As yet this is a white space opportunity.”

• Meeting consumer demands

Though there has been a decline in fluid dairy consumption, Smolyansky says pockets of trends also have been emerging.

“While nonfat and lowfat are down, whole milk products are up dramatically,” she says. “People who are consuming dairy want high fat, and science is showing that dairy fat and whole fat are good for you.”

She notes Lifeway has introduced a whole milk kefir made with real fruit puree, which has gained popularity across the country. She also points to trends in single-serve, convenience packaging. Lifeway offers a 3.5-ounce BioKefir shot, as well as an 8-ounce single serve, which has recently expanded across Target and Rite Aid stores.

“Consumers want trial. Millennials don’t want to commit to anything, let alone a family-size kefir,” Smolyansky says. “Time is the biggest commodity we have, and we are giving people their time back.”

One of Lifeway’s latest introductions is a non-dairy, vegan kefir called Plantiful, made with a base of cultured non-GMO pea protein and available in both adult and kids’ lines. Lifeway also is poised to launch a CBD-infused version of Plantiful as soon as FDA approves the sale of these products on a national level.

While she does not advocate for people cutting dairy out of their diets unnecessarily, Smolyansky notes that consumers are demanding alternatives.

“We see a proliferation of customization of people’s dietary needs,” Smolyansky says. “There’s vegan, dairy and a mix of everything. It might not be like a whole household is vegan, but maybe one person is.”

Burrington says some of the faster growing areas for probiotic dairy now is in shot drinks, like the Yakult product that was introduced decades ago in Japan.

“It’s one of the first probiotic drinks that existed, and now we’re just seeing that product in the U.S.,” Burrington says. “It contains a very specific strain of bacteria, but in a very small dose. It’s designed where you would drink it quickly, and it would provide you with all the healthy bacteria you would need for the day.”

While U.S. companies previously tried and failed to introduce similar products over the years, Burrington says consumers are more familiar now with the benefits of fermented dairy and probiotics.

“Now there is much more information available to consumers, much more talk about the microbiome and immunity coming from the GI tract,” she says. “People are much more aware of it now, and that’s why we’re seeing more of those coming onto the market.”

CMN


Total U.S. cheese production increases 1.6% from year ago

July 5, 2019

WASHINGTON — Total U.S. cheese production, excluding cottage cheese, was 1.103 billion pounds in May 2019, 1.6% above May 2018’s 1.085 billion pounds, according to data released Wednesday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart.)

U.S. cheese in production in May was 1.5% higher than the previous month, but when adjusted for the length of the months, May cheese production was 1.7% lower than April on an average daily basis.

Production of Mozzarella, the nation’s most-produced cheese, totaled 370.5 million pounds in May, 3.2% higher than production in May 2018. Total Italian-type production, of which Mozzarella is the largest component, was 471.5 million pounds in May, 2.3% higher than a year earlier.

Cheddar production totaled 319.4 million pounds in May, up 0.2% from May 2018. Total American-type cheese production, of which Cheddar is the largest component, was 440.7 million pounds in May, down 0.5% from a year earlier.

Wisconsin led U.S. cheese production with 287.8 million pounds produced in May 2019, down slightly from 287.9 million pounds produced in May 2018. California followed with 211.3 million pounds, down 2.6% from its production a year earlier.

NASS reports U.S. butter production totaled 163.0 million pounds in May, down 4.2% from May 2018’s 170.1 million pounds. May butter production was down 1.0% from April 2019’s 164.7 million pounds, but when adjusting for the length of the months, May butter production was down 4.2% from the previous month on an average daily basis.

California led the nation’s butter production with 51.8 million pounds produced in May, up 2.2% from its production a year earlier.

NASS reports nonfat dry milk (NDM) production totaled 173.9 million pounds in May, up 5.0% from May 2018’s 165.7 million pounds. NDM production in May was up 5.3% from the previous month’s 165.0 million pounds. When adjusting for the length of the months, May NDM production was up 1.9% from April on an average daily basis.

CMN


Tariff escalation between U.S., China stalls; U.S. eyes EU tariffs

July 5, 2019

WASHINGTON — The United States and China recently agreed to restart trade talks after U.S. President Donald Trump offered concessions including no new tariffs on Chinese goods.

In a June 29 tweet, Trump said: “I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing tariffs that we charge China while we continue to negotiate. China has agreed that, during the negotiation, they will begin purchasing large amounts of agricultural product from our great farmers.”

Trump also tweeted that the United States has “opened up negotiations again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the tariffs currently being charged to China.”

Meanwhile, the U.S. Trade Representative’s Office (USTR) is proposing new tariffs on $25 worth of European imports including Italian cheeses.

The tariffs, which are on top of earlier import taxes proposed in April, are tied to a dispute over what the United States says are illegal aircraft subsidies for Europe’s Airbus, according to a statement from USTR.

USTR will hold a hearing on the matter Aug. 5.

CMN


Dairy Innovation Hub is a top priority in task force’s report

June 28, 2019

MADISON, Wis. — The Wisconsin Dairy Task Force 2.0 voted unanimously to adopt its final report, including 51 recommendations previously approved by the group, at a meeting held last Friday in Madison, Wisconsin.

The final report can be viewed at https://datcp.wi.gov/Documents/DairyTaskForce20FinalReport.pdf.

Among the adopted recommendations marked as “very high” priorities is a Dairy Innovation Hub — a University of Wisconsin (UW) System proposal to add researchers at its agricultural colleges in Madison, Platteville and River Falls — that will focus on land and water use, human health and nutrition, animal health and welfare, and farm businesses and rural communities.

Also among the top priorities is recognizing the importance of exports to Wisconsin dairy. The report notes the United States exports only about 5 percent of its cheese, and exports are a “huge virtually untapped growth opportunity” for Wisconsin’s cheese industry. The task force recommends Wisconsin develop a plan and strategies to help cheesemakers obtain consumer insights and produce new products for export markets, and provide smaller plants with logistical support needed for distribution in these markets. The report recommends a feasibility study for a Wisconsin Cheese Brand and Dairy Export Board specifically to help grow and support dairy export business.

Another highly-prioritized recommendation is helping Wisconsin become a dairy product and business innovation center. The task force notes that the 2018 Farm Bill contains language and authorization to establish at least three dairy product and business innovation initiatives, drawing on existing industry resources such as academic and industry expertise and a dense dairy population — resources which are available in Wisconsin. The report recommends coordination across the UW, Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP), industry associations and others to prepare and submit a proposal to become one of the regionally-located dairy product and business innovation centers.

Also listed as “very high” priorities are staffing analysis and state funds for full-time positions at the Wisconsin Center for Dairy Research and reducing the number of milk classes from the current four to two.

“I am pleased to accept the final report of the Dairy Task Force 2.0 as their recommendations for the long-term success of Wisconsin’s dairy industry,” says Wisconsin Gov. Tony Evers. “While the group’s work has completed, it is now time for all of us to consider how these recommendations could be implemented to maintain Wisconsin’s world leadership in dairy.”

Brad Pfaff, DATCP secretary-designee, says the department already is finding ways to implement the task force’s recommendations.

“Our state’s dairy farmers are facing a triple whammy of low prices, uncertain international trade markets and wet weather,” Pfaff says. “Enacting policies that assist them in both the short and long term is of paramount importance.”

DATCP and the UW System established the Dairy Task Force 2.0 in June 2018 to enable stakeholders to come together to make recommendations on actions needed to maintain a viable and profitable dairy industry in the state. The 31 members of the Dairy Task Force 2.0 include farmers, processors and representatives of allied organizations.

After more than 45 in-person meetings and teleconferences, the final report concludes the work of the Dairy Task Force 2.0. Recommendations highlight the need for additional investments in research, increased innovation, expanded market development and strengthened connections across the industry. In addition to the recommendations, the report provides information about milk production, milk price volatility and changing farm structure across the country.

“Our universities can play a role in helping Wisconsin’s critical dairy industry innovate and identify opportunities to succeed in a especially challenging environment,” says University of Wisconsin System President Ray Cross. “Dairy Task Force 2.0 was diligent in its work, and we are hopeful that the recommendations can improve the lives and work of farmers throughout our state.”

• Dairy Innovation Hub

In Wisconsin’s proposed state budget, the Wisconsin Legislature’s Joint Finance Committee has designated $1 million in the first year and $7.8 million in the second year of a two-year spending plan for the Dairy Innovation Hub. The Joint Finance Committee’s budget plan, including the dairy hub, currently is under consideration in the state Assembly, and both the Assembly and Senate would have to sign off before sending it to the governor, who has veto authority.

Amy Penterman, a dairy farmer from Thorp, Wisconsin, and a member of the Dairy Business Association’s board of directors, who served on the Wisconsin Dairy Task Force 2.0, says the proposed dairy hub will keep farmers, processors and others at the forefront of innovation and help secure a successful future for Wisconsin dairy.

“I hope those in state government take a careful look at our conclusions,” she says.” One of the key recommendations is that we invest in dairy research through the Dairy Innovation Hub. Financial challenges, customer trends and other factors make this a critical time for our dairy community. We are at a crossroads.”

The Dairy Business Association and five other groups representing dairy farmers, processors, cooperatives and other related businesses in Wisconsin this week sent a joint letter to state legislators and the governor’s office emphasizing the importance of the dairy hub proposal. The other groups include Cooperative Network Professional Dairy Producers of Wisconsin, Wisconsin Cheese Makers Association, Wisconsin Farm Bureau and Wisconsin Farmers Union.

“The hub intends to attract the world’s best research talent to our state and provide the tools for making important new discoveries,” the groups say in the letter. “It will train industry leaders, who will help transfer that new knowledge to farms, processing plants, watershed groups and beyond.”

The groups say the hub would be a long-term investment but urgent nonetheless, pointing to financial problems many farmers are facing due to depressed milk prices, increasing operating costs and disruptive trade policies. They also note the need for more research on water quality and soil health.

“The state cannot afford to wait on this,” they write.

CMN


Maine, New Hampshire look to boost local, organic dairy

June 28, 2019

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

By Rena Archwamety

MADISON, Wis. — From the Northeast seacoast to the White Mountain National Forest, amidst a landscape of local farms and food, Maine and New Hampshire are home to many conventional and organic dairies, farmstead processors and specialty cheesemakers.

• Maine

Maine has 218 licensed dairy farms — about a third of which are organic — and more than 140 dairy licensed retail dairy plants, many on-farm, according to the state’s Department of Agriculture, Conservation and Forestry. Oakhurst Dairy, a major regional fluid milk brand owned by Dairy Farmers of America, is in Portland, Maine.

Maine has experienced much growth in its local cheesemaking industry, which is supported in part by the Maine Cheese Guild. The guild hosts an annual cheese festival, which will take place Sept. 8 this year in Pittsfield, Maine, and feature about 30 cheesemakers plus food trucks, wineries, craft beer, workshops and music. The Maine Cheese Guild also hosts hands-on cheese workshops and an open creamery day, and it helps fund Maine cheese entries at the annual American Cheese Society contest.

When the Maine Cheese Guild was launched in the early 2000s, there were 16 cheesemakers in the state. Now there are around 80. There is a high concentration of farmstead creameries in the state’s midcoast region, where some of these cheesemakers have organized the Midcoast Maine Cheese Trail.

“They’re pretty much all small scale, and over 65 percent are farmstead,” says Jessie Dowling, president of the Maine Cheese Guild and owner of Fuzzy Udder Creamery in Whitefield, Maine, which makes artisan sheep’s, goat’s and cow’s milk cheeses.

Dowling notes there is one large-scale cheesemaker, Pineland Farms Dairy Co., in Bangor, Maine. Small-scale production has flourished in part thanks to a strong local food movement but also because the state has a friendly environment for start-ups.

“Our regulations are very amiable to getting licensed and started. You don’t need to own a pasteurizer but can do the same thing with a thermometer, clock and heat treatment,” Dowling says. “There are less barriers to getting involved. You don’t have to have a lot of money to get a license. The Department of Agriculture in Maine is very pro-ag, helping farmers get going and keep going.”

A wide net of support also exists for dairy in Maine from nonprofits such as Maine Farmland Trust and the Maine Organic Farmers and Gardeners Association (MOFGA). MOFGA offers farm visits and troubleshooting to organic dairy farms not only in Maine but throughout New England.

“We’re free to help everyone. It’s very unique, and valuable, like a dairy extension,” says Jacki Perkins, organic dairy specialist, MOFGA.

Perkins, who grew up on an 80-cow organic dairy farm in Maine, notes the average dairy size in the state is 150 milking cows, but farms range from 10-cow Amish dairies to herds of more than 2,000. Almost 70 of the state’s 218 dairy farms are organic.

One challenge for both organic and conventional dairies is a shortage of larger-scale dairy processors in the state. MOFGA recently teamed up with Maine Farmland Trust, Maine Organic Milk Producers, the University of Maine Cooperative Extension and other groups to obtain a USDA grant to conduct a feasibility study to determine whether an in-state processor could help provide more stability for organic dairy farmers. The study’s findings are expected to be released in September.

Perkins says dairy farming is important to Maine, particularly as dairy comprises the most agricultural land of any sector in the state.

“We like to say if there were no dairy, we wouldn’t have fields. Even conventional dairies will pasture their heifers,” Perkins says. “It’s pretty integral to our image of this picturesque, very rural, bucolic kind of draw people think about when they come to Maine.”

• New Hampshire

New Hampshire has a smaller dairy industry with 99 cow dairies and 57 dairy processors, according to the New Hampshire Department of Health and Human Services, which oversees dairy inspection and licensing. Organic yogurt company Stonyfield Farm, owned by Lactalis, is headquartered in Londonderry, New Hampshire.

Like Maine, New Hampshire has a number of small, farmstead cheese and dairy processing operations.

“Some people have had the opportunity to process their own milk, giving them more control over the price. There has been an increase in people doing that over the last 10-15 years, but it seems to have leveled out a bit right now,” says New Hampshire Division of Agricultural Development Director Gail McWilliam Jellie.

One of these farmstead processors is Landaff Creamery, which started making cheese in 2008. Owners Deb and Doug Erb milk about 85 cows on their Landaff, New Hampshire, farm that backs up to the White Mountains, selling part of their milk to Agri-Mark cooperative and using part of it to make their own raw milk cheeses.

The creamery’s flagship Landaff Cheese is a Welsh-style Cheddar, and its Kinsman Ridge Cheese is a semi-soft washed rind cheese similar to a French Tomme. Landaff Creamery also has started crafting small specialty batches “to order,” and currently is doing a Landaff with Truffles for one of its longtime customers. All of its cheeses are aged in the Cellars at Jasper Hill Farm in Vermont, and Jasper Hill markets and distributes the cheeses.

Deb Erb notes that their dairy is among the smaller ones in the state. The larger farms tend to be located along the Connecticut River on the border between Vermont and New Hampshire.

“The average size is growing like it is in all states,” Erb says. “It used to be the average was around 100 (cows) — now one farm in the state has around 1,000 cows, and there are several around the 200-cow size.”

Landaff Creamery is among a dozen cheesemakers included on New Hampshire’s Wine & Cheese Trails, a map of creameries and wineries open to visitors and grouped by region, available online and in printed format from the New Hampshire Department of Agriculture and partner organizations. Granite State Dairy Promotion, the dairy marketing organization in the state, also publishes the Granite State Ice Cream Trail, which lists scoop shops all over the state.

“Agritourism has been a growing enterprise for most farms,” McWilliam Jellie says. “Not just dairy, but most farms have some activity or experiential thing going on at the farm, from pick-your-own to corn mazes or hay rides.”

Erb says there has been more demand for local products such as locally-bottled milk and farmstead cheese, as consumers increasingly want to know where their food comes from.

“People care about their product,” she says.

CMN


Cheese stocks set new record

June 28, 2019

WASHINGTON — Total natural cheese stocks in U.S. refrigerated warehouses as of May 31, 2019, were 1.386 billion pounds, down 1% from the 1.399 billion pounds in cold storage at the end of April, according to data released last Friday by USDA’s National Agricultural Statistics Service (NASS). May 2019 stocks, up less than 1% from the 1.385 billion pounds in cold storage at the end of May 2018, set a new record high for the month of May, according to NASS.

Total American natural cheese stocks were 784.8 million pounds at the end of May 2019, up less than 1% from the 782.6 million pounds in cold storage at the end of April 2019 but down 2% from the 804.1 million pounds in cold storage May 31, 2018.

Swiss cheese in cold storage totaled 24.7 million pounds May 31, 2019, down 12% from the 28.2 million pounds in cold storage April 30, 2019, and down 22% from the 31.4 million pounds in cold storage at the end of May 2018.

NASS reports other natural cheese in cold storage totaled 576.5 million pounds at the end of May 2019, down 2% from the 588.0 million pounds in cold storage at the end of April 2019 but up 5% from May 31, 2018’s 549.4 million pounds. The category of other natural cheese set a new record high for the month of May, according to NASS.

Butter stocks in U.S. cold storage totaled 314.0 million pounds May 31, 2019, NASS says, 8% more than the 290.8 million pounds in cold storage at the end of April 2019, NASS says. May 2019 butter stocks were 7% lower than the 338.5 million pounds in cold storage at the end of May 2018.

CMN


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Today's Cheese Spot Trading
July 15, 2019


Barrels: $1.7125 (-2 3/4)
Blocks: $1.7625 (-2 1/4)


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


Milk Production
U.S. Total May
19.055 bil. lbs.

Guest Columnist

$2.00/lb. cheese on the horizon for first time in five years

Lucas Fuess, HighGround Dairy

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