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Partnerships help to grow DMI Consumer Confidence initiative

October 24, 2014

By Alyssa Mitchell

MADISON, Wis. — The U.S. dairy industry is increasingly looking for ways to share its story with today’s consumers who are evermore concerned with tracing how and where their food is made. Dairy Management Inc. (DMI) is helping marketing partners tell consumers the story of where their food comes, while the partners in turn not only help sell more dairy but also give dairy farmers a channel to reach consumers.

Consumers today want high quality, safe and nutritious dairy foods and ingredients that are produced in a way that is socially, economically and environmentally responsible, notes Mollie Waller, chief communications officer for DMI, which manages the national dairy producer checkoff program.

“We can help meet those consumers and reconnect them with modern food and dairy production and talk with consumers where they are, which includes social media,” Waller says.

The dairy checkoff’s Consumer Confidence initiative is seeking to ramp up this effort by using a unified voice to reconnect consumers with agriculture in order to ensure farmers a future market, improve dairy’s image, and protect and grow dairy sales, DMI says.

“Dairy farmers and dairy companies are critical voices in telling dairy’s story to consumers,” DMI says. “We want consumers to understand that dairy is ‘where good comes from.’”

Through channels such as the checkoff’s online newsroom at DairyGood.org and social media, the industry is working to effectively engage consumers by introducing dairy into topics they already are talking about, DMI notes.

DMI’s Dairy Good Newsroom monitors news and trends and provides dairy a voice in pertinent consumer, industry, thought leader and farmer conversations, DMI says.

“We monitor for issues that could impact consumer confidence and provide strategies that engage other industry organizations to assure a unified voice,” Waller says.

“Farmers are out there telling their stories, but everyone in dairy needs to work together to better connect consumers to agriculture,” Waller says.

Less than 2 percent of Americans work in agriculture, so there is a disconnect, she notes.

“Misinformation is spread quickly, so trust is critically important,” Waller says. “And we’ve really found that trust equals sales.”

Key marketing partnerships between DMI and major brands — including Domino’s Pizza, McDonald’s,Quaker, Pizza Hut and Taco Bell — help to bridge the gap between dairy and consumers as well as ensure a long-term pipeline of dairy products coming from these relationships, notes Barb O’Brien, senior executive vice president of DMI and president of the Innovation Center for U.S. Dairy, founded by DMI and the producer checkoff program.

“In most cases, these are long-term relationships, and they evolve over time,” O’Brien says.

She notes that McDonald’s sees 27 million customers each day in the United States.

“We as an industry can help them tell the story of where their food comes from, and they in turn can help us to have a voice,” O’Brien says.

She notes that milk now is the default beverage offered in McDonald’s Happy Meals as dairy is becoming part of a health and wellness halo that the company is bringing to its children’s meals.

An advertising campaign McDonald’s did for Happy Meals last year featured the minions from the popular film “Despicable Me 2” blowing milk bubbles and a downloadable milk bubbles computer app for children.

“It’s a subtle way to put dairy out there, and it can depict the healthfulness of dairy in a fun way,” O’Brien says.

DMI’s 6-year partnership with Domino’s includes an initiative called Delivering Dairy Goodness, which launched during June Dairy Month in 2013. Domino’s, working with local dairy promotion organizations around the country, invited the public to “Delivering Dairy Goodness” events, both on and off the farm.

“It’s a way for Domino’s local business owners, along with dairy farm family businesses, to connect with their communities around the country,” O’Brien says. “It also allowed Domino’s franchisees to make direct connections with local dairy farmers and learn where products come from.”

Domino’s current advertising helps consumers trace back the pizza-making process to the dairy farmer, she adds.

“(Domino’s has) a great pizza box with six dairy cows on the cover and there is a back story on the dairy and the cows,” O’Brien says.

“Those are vehicles that DMI’s partnerships and relationships have gained with making things fun and creative through our connections,” Waller adds.

O’Brien notes that since DMI first partnered with Domino’s, cheese usage has increased across the entire pizza category.

“Since 2009, there has been an increase of 10 billion pounds in incremental milk use across the pizza category,” she says.

Meanwhile, DMI’s newer partnership with Quaker Oats encourages U.S. consumers to make oatmeal with lowfat milk instead of water and serve it alongside a glass of milk.

For the first time since 1877, the Quaker Oats Man, known as Larry, is donning a new accessory — the iconic milk mustache. An ad featuring Larry’s new accessory debuted recently in People magazine. In addition to the ad in People, the partnership features TV and online ads.

The image also is featured on Quaker Oats canisters, marking the first time a milk mustache has made its way onto shelves in the grocery aisle with the slogan “Make it with milk.” On-pack messaging also features interactive mobile technology allowing shoppers to scan the package to unlock recipes and share photos.

“This is a win-win for us. This partnership with Quaker and dairy marries two nutrition powerhouses,” O’Brien says.

She adds that Quaker also acknowledges America’s dairy farmers in some of its advertising.

“These brands can give confidence to consumers by talking about dairy and farming and where the food comes from,” O’Brien says.

Waller notes that efforts to increase consumer confidence are only successful when the whole industry and supply chain is involved.

To that end, DMI’s DairyGood.org website and newsroom create an opportunity for a network of more than 100 communicators across the industry to come together and find a common voice, she says.

“It’s a place where we can monitor the news and trends, connect with consumers,” she says. “At the same time, we’re also starting our own conversations about dairy to get positive information out there.”

DMI currently is working to further engage Millennials — consumers age 18-34 — who have $2.5 trillion in spending power, Waller notes.

“Their influence is enormous — over people both ahead of and behind their generation,” she says.

“They want to buy from people who are doing good business, and they get a lot of their info by word of mouth.”

It’s also an audience that is in jeopardy of not getting the nutrients they need, Waller adds.

“We feel we have a moral obligation to help these generations,” she says. “It’s our honor and privilege to provide these products to help them with this challenge.”

O’Brien notes the Millennial generation of farmers are very tech savvy.

“They’re very connected, which presents a wonderful opportunity to get them connected with consumers,” she says.

O’Brien adds that dairy processors also have the opportunity to capture the power of the dairy farmer in telling their brands’ story.

“Some processors have done well in bringing dairy’s story to light,” she says. “No matter where you sit in the supply chain, consumers want to know where their food comes from.”

Looking ahead, DMI also is working on the launch of a cookbook next summer. “The Dairy Good Cookbook” will celebrate the heritage of dairy farmers in the industry and feature recipes from farmers and celebrity chefs. It will be in stores to coincide with June Dairy Month in 2015.
Next year also will mark the 100-year anniversary of the National Dairy Council and the 20-year anniversary of DMI and the U.S. Dairy Export Council.

“We have some major Consumer Confidence initiatives planned for 2015,” Waller says. “There’s a lot to celebrate.”

CMN


Symposium speaker highlights key Codex issues for U.S. dairy

October 24, 2014

By Alyssa Mitchell

MADISON, Wis. — As the U.S. dairy industry expands its presence in the global marketplace, Allen Sayler, managing partner with the Center for Food Safety and Regulatory Solutions (CFSRS), provided an overview of key Codex issues for the U.S. dairy industry during the American Dairy Products Institute Technical Symposium held here this week.

The 2-day symposium included discussion on key technical aspects of dairy manufacturing as well as regulatory issues impacting the industry.

Sayler’s discussion provided an overview of Codex as well as key issues to watch that could affect U.S. dairy.

Since it was formed by the Conference of the Food and Agriculture Organization (FAO) of the United Nations in 1961 and the 16th World Health Assembly in 1963, the Codex Alimentarius Commission has held 50 sessions. There are currently 173 member countries, Sayler notes.

“Codex Alimentarius” means food code. The primary purpose of the intergovernmental organization, known informally as Codex, is to develop international food standards, guidelines and codes to reflect international norms on food safety and identity.

Sayler says Codex is important to the North American and global dairy industries because if countries participate, Codex dairy standards automatically become individual country dairy standards. Codex supercedes bilateral and multilateral trade agreements, he says.

In addition, international trade disputes under the World Trade Organization (WTO) can be settled using Codex dairy standards, he notes.

“If you are a member of Codex, you are supposed to take the Codex standards and incorporate them into your own country’s standards,” Sayler says.

However, “we have a little problem in the U.S.; we have not adopted Codex standards ourselves, and we have a vulnerability if a country tried to export a product here that meets Codex standards but not U.S. standards and we rejected it,” he says. “Technically, if it meets the Codex standards, it should be able to be imported to the U.S., and conversely, we should be able to export products that meet these standards.”

Sayler notes the U.S. dairy industry has been expanding internationally.

“U.S. dairy exports have exploded sine 2003, while dairy imports are down,” he says.

In 2003, the United States produced 170.3 billion pounds of milk, and U.S. dairy exports accounted for 9.7 billion pounds, Sayler notes.

By 2013, the United States produced 201.2 billion pounds of milk, and U.S. dairy exports accounted for 31.2 billion pounds, he says.

“Just shy of 70 percent of all the milk production growth since 2003 entered the export market,” he says.

At the same time, new bilateral and regional free trade agreements in South Korea and Colombia are coming into effect; the United States and European Union (EU) are negotiating the Transatlantic Trade and Investment Partnership (TTIP); the United States is a key leader in negotiations for the Trans Pacific Partnership (TPP) to open new markets in Asia to U.S. exports; and prospects remain for an updated WTO multilateral free trade agreement to further reform agricultural commodity and food trade, Sayler notes.

International trade agreements have reduced the ability of countries to protect their domestic industries from competition from other countries’ industries, he says.

“Economic growth around the world, but especially in developing countries, has increased the demand for food and agricultural commodity trade,” he says.

Sayler also outlined some key issues to watch that are currently being considered in Codex:

• New standard

A Processed Cheese Codex Physical Working Group Meeting is set for Jan. 20-22, 2015, in Brussels, Belgium.

The issue at hand is the development of some type of generic description of processed cheese to be used by countries so that they have some amount of dairy ingredients and are “cheese-like,” Sayler says. He notes the U.S. dairy industry has “much to lose and little to gain” with this issue. (See

“Codex renews effort to develop new standard for processed cheese” in the July 18, 2014, issue of Cheese Market News.)

There’s also a discussion paper on whey permeate powder standards in the works, he says.

• Labeling of non-retail containers

Sayler notes there is a discussion paper on the labeling of non-retail containers.

Current standards state that information, and if necessary, storage instructions, shall be given either on the container or in accompanying documents, except that the name of the product, lot identification and the name of the manufacturer or packer shall appear on the container, and in the absence of such a container, on the product itself, Sayler says.

However, lot identification and the name and address may be replaced by an identification mark, provided that such mark is clearly identifiable with the accompanying documents, he adds.

“There are 31 Codex dairy standards with ‘non-retail’ labeling sections that allow labeling to be on the product packaging or in ‘accompanying documents,’” he says. “This is a common method of providing labeling information to the buyer.”

However, India is proposing that more information be required on the container itself.

“This is unnecessary and something that we want to make sure does not go forward,” he says.

• Food hygiene

A food hygiene meeting is set for Nov. 17-21 in Lima, Peru, to review a proposed draft annex on statistical and mathematical considerations to the Principles and Guidelines for the Establishment and Application of Microbiological Criteria Related to Foods, Sayler notes.

This could be problematic as the draft contains the need to conduct end product testing for Salmonella, and environmental testing for Salmonella and Enterobacteriaceae, he says.

“This could have as much impact on those who export as the Food Safety Modernization Act has on domestic products,” he says.

“It’s well along on the Codex process of getting finalized,” he adds. “I’m meeting with U.S. government officials next week to see where we stand on this issue.”

Sayler says other unfinished and developing issues in Codex include sustainability and environmental issues, as well as discussion on milk permeate powder, cheese standards and specific food additives.

He notes the United States tends to be more reactionary than proactive when it comes to Codex standards.

“It seems in the U.S., we’re almost always reacting,” Sayler says. “I’d love to go to a Codex meeting with something our industry is proposing.

“We’d like more U.S. participation,” he adds. “Things are getting much more interesting, and we need people from the industry involved.”

CMN


U.S. milk production up 4 percent in September

October 24, 2014

WASHINGTON — Milk production in the 23 major milk-producing states during September totaled 15.49 billion pounds, up 4.1 percent from September 2013, according to recently-released data from USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart on page 11.)

August revised production in the 23 major states, at 16.17 billion pounds, was up 2.6 percent from August 2013. The August revision represents a decrease of 3 million pounds or less than 0.1 percent from last month’s preliminary production estimate, according to NASS.

For the entire United States, milk production totaled an estimated 16.47 billion pounds in September, according to NASS, up 4.0 percent from September 2013.

NASS says U.S. milk production during the July-September quarter totaled 51.13 billion pounds, up 3.5 percent from the July-September quarter last year. The average number of dairy cows in the United States during this quarter was 9.27 million head, 15,000 head more than the April-June quarter and 44,000 head more than the same period last year.

In September, there were an estimated 9.27 million dairy cows on U.S. farms, up 2,000 head from the previous month and 59,000 head more than the previous year. Production per cow in September was an average of 1,777 pounds, up 58 pounds from September 2013.

In the 23 major states, there were 8.59 million cows in September, up 4,000 head from August and up 78,000 head from September 2013. Production per cow averaged 1,804 pounds in September, an increase of 56 pounds vs. September 2013.

California led the nation’s production with 3.29 billion pounds in September, up 2.9 percent from its production a year earlier. NASS says there were 1.78 million cows on California dairies in September, unchanged from August and 2,000 head less than a year earlier. However, production per cow was up 55 pounds from the previous September to 1,850 pounds in September 2014.

Wisconsin, the next-highest milk-producing state, saw production climb 3.2 percent in the September-to-September comparison. NASS reports there were 1.27 million cows on Wisconsin dairies in September, unchanged from the previous month and down 2,000 head from a year earlier.

Production per cow in Wisconsin averaged 1,805 pounds in September 2014, up 60 pounds from a year earlier.

CMN


WTO decision on COOL puts dairy exports in jeopardy

October 24, 2014

WASHINGTON — The World Trade Organization (WTO) this week issued a compliance panel report that found the U.S. country-of-origin labeling (COOL) revised rule violates U.S. international trade obligations. Canada and Mexico had challenged the rule in the WTO, claiming it has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market.

Backed by the finding, Canada and Mexico may retaliate against a wide range of U.S products, including dairy products, with high, burdensome tariffs, according to the International Dairy Foods Association (IDFA). These countries represent two of the largest markets for U.S. agricultural goods, IDFA notes.

The COOL rule requires most retailers to provide country-of-origin labeling for fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, meat and poultry.

IDFA is a member of the COOL Reform Coalition, which promotes reforms to the COOL requirements to ensure that they are compliant with international trade obligations. In a statement released this week, the coalition says the ruling “could cause significant economic repercussions for

U.S. manufacturing and agriculture, unless Congress intervenes.”

“If Congress fails to ensure that U.S. COOL requirements comply with our international obligations, U.S. jobs and manufacturing will be put at risk,” says Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers, another coalition member. “The United States helped create the WTO to ensure that all countries play by the rules. U.S. leadership in complying with our own obligations is critical to the United States’ ability to address effectively unfair and WTO-violative trade barriers by our trading partners around the world.”

Meanwhile, National Farmers Union President Roger Johnson says the ruling by WTO on COOL can be handled by USDA and notes the strong support by the public and in rural America for the labeling law.

“American consumers want to know where their food comes from, and America’s family farmers and ranchers are proud to provide that information,” Johnson says. “Nothing about (this) ruling changes that rudimentary fact.

“Under the guidance of USDA, any changes to COOL to ensure full compliance with today’s decision should be able to be made administratively, while maintaining the integrity of COOL labels,” he adds.

IDFA says it anticipates the United States will appeal the WTO decision, with final adjudication by the WTO expected as early as mid-2015.

To view the WTO report, visit www.wto.org/english/news_e/news14_e/384_386rw_e.htm.

CMN

 


Red Barn Family Farms introduces American Original, continues to grow

By Kate Sander

APPLETON, Wis. — In an environment where bigger is often deemed better or at least necessary to survive, veterinarian Terry Homan kept seeing small dairy farms operated by families who excelled at animal husbandry, and he connected that animal care to the high-quality milk those farms produced.

Due to economies of scale, those small dairies were — and are — often talked about as if they don’t have a future. However, Homan and his wife Paula Homan, both of whom grew up on dairies themselves, decided that wasn’t right.

“I came to the conviction that excellent small dairy farms should have a place in the future,” Terry Homan says.

In response to what they saw as an opportunity to give small dairies a strong foothold in the future, the husband and wife team founded Red Barn Family Farms.

Starting in 2008, Red Barn Family Farms contracted with Lamers Dairy, Appleton, Wis., to process its branded milk for northeast Wisconsin hospitals, colleges and coffee shops. The company also began contracting with what is now a handful of Wisconsin cheesemakers to produce cheese, including American Originals like its newly introduced Cupola, for institutional foodservice providers and specialty food distributors across the United States.

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Dairy producers grapple with persistent drought in the West

October 17, 2014

By Alyssa Mitchell

MADISON, Wis. — As drought conditions persist in the Western United States, dairy farmers are getting creative in ways to conserve water and supplement feed, and the costs are starting to add up.

“We’ve all been taking steps to minimize water usage,” says Perry Tjaarda, owner of Tjaarda Dairy in Shafter, Calif., outside Bakersville and a board member of Dairy Farmers of America (DFA).

“On the farm itself, we’re constantly scrutinizing what we’re using water for and if we need to,” he says.

Tjaarda, who currently milks about 3,200 cows on his farm, notes how important water is to a dairy operation.

“The girls need to drink, and we need water to keep things cleaned and sanitized,” he says.

Tjaarda is one of many producers in the West facing a tight water supply. And it’s not an issue affecting only the dairy industry. The state of California’s drought is entering its fourth year, with reservoirs only 36 percent full, according to recent reports.

“The drought in California has had a tremendous impact on the state’s agriculture industry and is a serious concern,” says John Azevedo, member-owner and chairman of the board for California Dairies Inc. and owner of Azevedo Dairy Inc., Patterson, Calif.

While all sectors of agriculture have felt the effects of the drought, some sectors are experiencing it much more severely, he adds.

“Those hardest hit by the drought are the permanent crop farmers who rely on state and federal water contracts for their water needs. Those contracts have received zero water allocations for the year,” Azevedo says. “The largest impact the drought has had on the California dairy industry is seen in the increased cost of forages. To combat high-priced forages, dairymen are feeding their cows differently by substituting high-priced forages with lower-cost rations.”

Currently, 58 percent of the state is classified as D4, Exceptional Drought, according to the U.S. Drought Monitor managed by the National Integrated Drought Information System (see chart on page 16).

In January of this year, California Gov. Jerry Brown issued an Emergency Drought Proclamation and called for state residents to voluntarily reduce water use by 20 percent.

Water conservation efforts throughout the state are ongoing, and a recent report from the State Water Resources Control Board (State Water Board) in California says that water conservation efforts in the state’s urban communities continued an upward trend in August, climbing to 11.5 percent increased conservation statewide.

“Many more California communities are taking the drought seriously and making water conservation a priority — and residents are responding,” says Felicia Marcus, chair of the State Water Board.

“However, while we can hope for rain, we can’t count on it, so we must keep going. Every gallon saved today postpones the need for more drastic, difficult and expensive action should the drought continue into next year.”

The California Department of Food and Agriculture (CDFA) recently announced that it is accepting applications for a second round of funding for the State Water Efficiency and Enhancement Program (SWEEP), authorized by emergency drought legislation.

SWEEP is an opportunity for farmers to receive financial assistance to install water distribution systems that save water and reduce greenhouse gases. Up to $150,000 will be provided directly to agricultural operations for water and energy conservation projects. The funding can support a broad range of irrigation-related projects such as pump improvements, equipment to facilitate water-saving measures and other reduction management practices.

Application guidelines and more information can be found at www.cdfa.gov/go/SWEEP.

Applications are due Nov. 10 by 5 p.m. Pacific Time.

Leslie J. Butler, agricultural economist at the University of California-Davis, notes that California producers are finding it difficult to source suitable feed in these conditions, and what is available is expensive.

“If the drought continues, I would expect many dairy producers will continue to find it difficult to source feed in California,” he says. “The biggest difficulty for most California producers will be purchasing alfalfa locally, and therefore, transportation costs become a nightmare for most of them when they have to ship it in from out of state.”

Tom Barcellos, owner of 800-cow T-Bar Dairy in Porterville, Calif., and president of Western United Dairymen (WUD), says historically he has grown and sold his own feed, which has supplemented his income, but in recent conditions he has had to purchase additional hay.

“We also didn’t plant corn this year in order to use up less water,” he adds. “You need a lot of water for quality corn.”

He notes conditions have hit the dairy harder this year as last year he was still able to plant all of his acreage.

“Going forward, we have some feed inventory, but we’re waiting to see if there’s any rain this winter to get winter forages planted,” he says.

The operation needs more surface water, Barcellos says

“The best solution to our issues is any surface water that becomes available,” he says. “I have to make sure I have enough water for the cows, too.”

Meanwhile, in addition to water limitations, organic dairy farmers are facing challenges in available pasture suitable for their herds to feed on.

According to the Agricultural Marketing Resource Center, California is the state with the most organic dairy cows, a position it gained in recent years, and the lack of rainfall makes it harder for farmers to keep grasses green.

“The quality of our pasture has been OK, but it is far less pasture than normal,” says Lucas Deniz, owner of Deniz Dairy, an organic and conventional operation in Petaluma, Calif. Deniz milks about 150 conventional cows and 350 organic cows.

Deniz says that organic regulations typically require organic cows to be on pasture for a minimum of 120 days.

“Thankfully, in light of recent circumstances, that requirement has been reduced to 60 days,” he says.

He notes he also is paying about $400 a ton for organic hay that is used as a supplement.

“Typically, we don’t need that when they are feeding on pasture in better conditions,” he says.

Deniz says he is thinking about drilling a well in the next few months.

“At about $70,000, it’s certainly not cheap, but if you don’t have water, you have nothing,” he says.
He adds that California does not have a statewide plan for groundwater but the state is beginning to put in more regulations and restrictions.

“Down the line, I’m sure we’ll see increased restrictions and regulations on the amount of water we can pump from our wells, and we’ll likely have to pay for a permit, so the long-term effects and costs are certainly looming,” he says.

Other western dairy operations outside of California are feeling the pinch, too.

“Last year was a 65 to 70 percent allocation for our water usage; this year it’s 40 percent,” says Alan Perazzo, another DFA member and owner of Perazzo Brothers Dairy in Fallon, Nev., about 4 miles from the recently-opened DFA operation there.

“The last two years we’ve been affected by this drought,” he says. “Less forage was able to be grown, and this year was the first year in awhile we have not been able to grow corn.”

Perazzo has planted rye, milo and Sudan grass as supplement feedstuffs, but they do not provide as much energy as corn silage, he says.

“We are able to take other commodities and make a mix,” he says. “We’ve just had to get creative and do things differently than before.”

Weather analyst Joe D’Aleo, co-chief meteorologist with WeatherBELL Analytics, based in New York, N.Y., seems cautiously optimistic that the coming year could yield more moisture for the Western United States.

“We are in a developing El Niño pattern. Normally this is cheered because it brings rain,” D’Aleo says. “However, El Niños are not a 100 percent guarantee that it will be wet.”

He adds that he does think there will be a break in warm conditions and some storms could penetrate the winter and bring snow to the Sierras.

“There has been some rain in the north this month, but not enough to feed the system,” he says.

“Every El Niño is different,” he adds, noting that a weaker El Niño or even no El Niño doesn’t necessarily mean it’s going to be dry in Northern California.

Tjaarda says it’s hard to know what to expect.

“I’ve heard varying reports on the prospects for El Niño this winter, but it seems to change a lot,” he says.

At least it seems current conditions have not yet impacted milk production levels in the state. In fact, California milk production is steady to slightly higher on a week-to-week basis, USDA’s Dairy Market News says this week. Total milk volumes remain above a year ago by 2 to 4 percent, as reported by processors.

“Milk production has been up,” Tjaarda says. “It’s a funny thing with drought. As long as you have feed and water, the dry conditions do create good milk-making conditions.”

However, if the drought persists, “effects could be devastating,” he adds.

“I don’t worry about feed so much. You find feed, though it may cost more. This gives you time to come up with a solution,” Tjaarda says. “However, if you run out of water, you have minutes to hours, tops, to come up with a solution. The cows need to drink.”

Barcellos says while things are currently working at the farm, that could change long term if conditions don’t improve.

“We find ways to make things work, but at some point, if this situation continues, there will be challenges,” he says. “I know people who are looking to sell, but you need a viable place in order to sell.

“There are many elements of concern, and everyone is being diligent in seeing what’s next,” he adds. “If we get to January and haven’t had any rain or snow, I’ll be very concerned.”

He adds that the next 3-6 months will be crucial.

Tjaarda agrees, noting there could be serious consequences if the Sierras do not get some rain or snow.

“You’re trying to stay ahead of what’s happening, but there are no guarantees,” he says. “You just don’t know.”

CMN


U.S. butter price drops; butter up at GDT, but auction bearish

October 17, 2014

By Alyssa Mitchell

MADISON, Wis. — With the price of U.S. butter at a premium to global prices for much of this year, it comes as little surprise to most that spot butter at the Chicago Mercantile Exchange (CME) has fallen in recent weeks.

The speed at which it has fallen, however, is impressive.

“The old saying goes, ‘prices take the stairs up and the elevator shaft down,’ but 93 cents inside of two weeks is impressive by anyone’s expectations,” says Dave Kurzawski, senior broker at FCStone, Chicago.

In the first four days of this week alone, butter fell a total of 67.5 cents, settling at $2.13 per pound on Thursday. Butter was still above $3 per pound less than a month ago, when it settled at $3.05 Sept. 26, the beginning of its descent. (For today’s prices, see chart on page 2.)

“I think we were always anticipating a sharp drop, and futures were predicting this would happen,” says Eric Meyer, president of HighGround Dairy, Chicago. “We expected this would happen as seasonal demand ebbs. It was a question of whether it would be this month or next.”

Kurzawski notes these are largely thin markets but they follow the same rules as any other market — greed and fear.

“For the past few weeks we’ve got a front row seat for commodity market emotion, but inventories have not been built yet,” he says. “Look for some level of support to come back into butter before we crack $2 per pound.”

Meyer agrees there could be some support at the $2 level with people filling pipelines for orders now that prices are lower, “but we may be in the $1.70s or $1.80s by early December.”

Analysts have been anticipating weakness in both the cheese and butter market as U.S. dairy prices have been far above global prices for some time. While the price of butter improved a bit this week in New Zealand at Fonterra’s Global Dairy Trade (GDT) auction, the overall results still had a bearish tone, Meyer says.

“Convergence of U.S. and world prices is 99 percent on the U.S. side so far,” he says.

“The U.S. market is doing the heavy lifting in terms of closing the huge price disparity to the world,” Kurzawski agrees. “And we’ll have to continue in that fashion because the latest GDT event is more an indication of price stabilization that anything. Buyers are bottom-feeding and sellers still have inventory to clear. Volumes are up but prices are stable, and I expect that to be the case for some time to come.”

The GDT price index this week was up 1.4 percent and the average price achieved across all contracts and contract periods for butter increased 3.9 percent to US$2,614 per metric ton FAS ($1.1857 per pound).

Prices also increased for anhydrous milkfat, up 7.4 percent to US$3,346 per metric ton FAS ($1.5177 per pound); sweet whey powder, up 4.3 percent to US$1,225 per metric ton FAS ($0.5557 per pound); and whole milk powder, up 3.1 percent to US$2,503 per metric ton FAS ($1.1354 per pound).

Meanwhile, prices weakened for buttermilk powder, down 3.8 percent to US$2,685 per metric ton FAS ($1.2179 per pound); Cheddar, down 1 percent to US$3,007 per metric ton FAS ($1.3640 per pound); rennet casein, down 5.3 percent to US$7,780 per metric ton FAS ($3.5290 per pound); and skim milk powder, down 3.6 percent to US$2,462 per metric ton FAS ($1.1168 per pound).

The next trading event will be held Nov. 4. For more information, visit www.globaldairytrade.info.

CMN


Camel’s milk poised for increased role in dairy

October 17, 2014

By Emily King

MADISON, Wis. — Although not often thought of in connection with dairy, camels stand to play a larger role in the industry’s future. While it will never be more than a specialty item in the United States, camel’s milk items are poised to become slightly more popular thanks to a handful of newer U.S. producers. In addition, camel chymosin (CC) has seen success as a coagulant in certain types of cheese.

Californian camel dairies

Oasis Camel Dairy, Ramona, Calif., proclaims it was America’s first camel milking farm. Owned by Gil and Nancy Riegler, the dairy supports the efforts of furthering the education of the public about the nature of camels and their milk.

The dairy does not sell any of the raw milk from its camels, but Oasis Camel Dairy uses the milk to make camel’s milk lotions, soaps, lip treatment and skin serum. The family also drinks the milk themselves.

Another California-based camel’s milk dairy, Desert Farm Camel Milk — a brand within Santa Monica, Calif.-headquartered Desert Farms Inc. — just started production this year in Los Angeles.
California allows camel dairies and the sale of camel’s milk, provided it is produced and distributed from a properly permitted and licensed facility.

The founder of Desert Farms, Walid Abdul-Wahab, was in his hometown of Jeddah, Saudi Arabia, when he encountered a friend with a bag of camel’s milk and found it delectable. He moved to California shortly thereafter and viewed it as the perfect environment for creating a market for camel’s milk.

“I started Desert Farms right out of college as the first company in the United States to capitalize on the sale of camel’s milk, based on the idea that American consumers are constantly searching for the ultimate healthy beverage,” Abdul-Wahab says. “America’s health-conscious consumer appetite has lead to the rise of many dairy alternative beverages, but each has been met with unique flaws.”

Camel’s milk has been used for centuries as a natural remedy in Middle Eastern, Asian and North African cultures. In the United States there is demand for the beverage in the autism community, Abdul-Wahab says.

According to Abdul-Wahab and the Rieglers, the success camel’s milk has had in improving autism symptoms, other ailments and the overall health benefits of the product were the driving force behind the dairies’ inceptions.

Last year, “Camel Milk as a Potential Therapy as an Antioxidant in Autism Spectrum Disorder,” was published in Evidence-Based Complementary and Alternative Medicine. The findings suggested that camel’s milk could improve behavior in those with autism spectrum disorder (ASD), specifically by decreasing oxidative stress, something those with ASD are vulnerable to.

The results of the study showed a reduction of oxidative stress after camel’s milk consumption; this could be attributed to the antioxidant nutrients in camel’s milk such as magnesium, which also enhances vitamin E and C absorption. Vitamin E, along with zinc and magnesium — all present in camel’s milk — could be the driving force behind the production of certain enzymes and the decrease of oxidative stress in those with ASD.

“It has a unique composition that differs from other ruminants’ milk,” the study says. “It contains lower fat, cholesterol and lactose than cow’s milk, higher minerals and vitamins A, B2, E and C compared to cow’s milk, and it contains no beta lactoglobulin and beta casein, which are the main causative of allergy in cow’s milk.”

The composition of camel’s milk is responsible for its many potential therapeutic effects, such as with food allergies, diabetes mellitus, hepatitis B and other autoimmune diseases, the study says.

Camel’s milk will never be a major player in the industry though because it is difficult to produce and as a result is extremely expensive. Milking camels only produce 5-6 liters per day. In addition, camels have long pregnancies, are difficult to train and are not easy to breed, Abdul-Wahab says.

Like Oasis Camel Dairy, Desert Farm sells an assortment of camel’s milk soaps. The milk it does sell retails for $18 for a 16-ounce bottle of raw camel’s milk.

• Camel’s role in mainstream dairy has more potential with chymosin

Camel may have more of a future in dairy on the ingredient side. In a study published last year in the Journal of Dairy Science called “Effect of camel chymosin (CC) on the texture, functionality, and sensory properties of low-moisture, part-skim (LMPS) Mozzarella cheese,” scientists compared the effects of bovine calf chymosin and CC on the functional and sensory properties and performance shelf life of LMPS Mozzarella.

Chymosin is a protease found in rennet. It is produced by newborn ruminant animals in the lining of the stomach to curdle the milk they ingest and is widely used in the production of cheese. During the study, the chymosin made by camels was found to be more effective at clotting cow’s milk than the chymosin made by the calf, which was interesting and surprising to John Lucey, director of the Wisconsin Center for Dairy Research (CDR) and co-author of the study.

Lucey says CDR has worked on many different kinds of rennets over the years and was aware that initial research on CC indicated lower proteolytic activity in cheese.

“Protein breakdown by rennet is one of the key degradation mechanisms in LMPS Mozzarella that shortens its useful performance shelf life,” Lucey says. “So we wanted to see how well CC worked in this cheese and determine the extent of any possible increase in its shelf-life.”

Since the CC proved to be successful in extending the shelf life of LMPS Mozzarella in comparison to bovine chymosin, it is an attractive proposition for many LMPS cheese manufacturers. It may allow them to have product in distribution for a longer time or allow them to service more distant markets, Lucey adds.

There are a number of cheeses where less protein breakdown during ripening can be helpful, such as fresh cheese types where shelf life is relatively short. The use of CC will not impact the other key determinants of shelf life such as growth of spoilage organisms.

“We have also found that the use of CC leads to less bitterness, and switching to CC is an option for cheese manufacturers that have difficulties with this defect,” Lucey says.
Chr. Hansen, Hørsholm, Denmark, developed FAR-M, a pure CC produced by fermentation, in 2012. The product is designed for both camel’s and cow’s milk processing, and is available in the United States.

FAR-M is available in liquid and powder forms — the latter allowing for transportation at ambient temperatures and distribution to rural areas, the company says.

CMN


N.Y. Gov. Cuomo designates yogurt official state snack

October 17, 2014

ALBANY, N.Y. — On Wednesday, New York Gov. Andrew M. Cuomo signed legislation making yogurt the official snack of New York State just before the second New York Yogurt Summit being held the same day.

“Yogurt is now the official snack of New York State, and the fourth-graders at Byron-Bergen Elementary School deserve all of the credit,” says State Sen. Michael H. Ranzenhofer. “From initially suggesting the idea to traveling to the state capitol earlier this year, these students deserve high marks for their efforts to get this legislation signed into law.”

Ranzenhofer introduced Senate Bill No. 6695 Feb. 28, and it was approved by the State Senate Investigations and Government Operations Committee in May. (See “Bill to make yogurt N.Y. snack goes to Senate” in the May 16, 2014 issue of Cheese Market News.)

The first New York Yogurt Summit convened in 2012 resulted in a number of initiatives to eliminate barriers to business growth and help manufacturers continue to grow, Cuomo says.

At the 2014 New York State Yogurt Summit this week, Cuomo highlighted progress in the industry and shared ideas on how to move it forward. A number of measures will be put in place as a result of the summit, which was hosted at Cornell University’s College of Agriculture and Life Sciences.

“At last year’s summit, we listened to New York’s yogurt producers and dairy farmers for what we as the state could do to make the industry grow, and this year we are doing the same,” Cuomo says. “The success we have seen is another example of how we can work together to create jobs and develop this sector, which is vital to the economy.”

These steps include increased sales of New York State dairy products in state-run institutions, financial assistance to help increase technical assistance for the dairy industry, and initiatives to make the industry more energy efficient. The state also will explore ways to increase access to risk management tools which will better stabilize the industry during times of market instability.

The New York Department of Corrections and Community Supervision recently added a 4-ounce vanilla yogurt to its statewide menu. This new business partnership will result in the consumption of approximately 1.2 million cups of yogurt annually.

In addition, with a commitment of up to $1 million from New York State, as well as federal and private funds, State University of New York (SUNY) Cobleskill will build a teaching dairy processing facility.
SUNY Cobleskill will provide a certificate of training for laboratory technicians, processing specialists and quality technicians, among others. Foods processed at the facility will be used throughout the existing campus dining to promote local food and local processing.

At the first summit, Cuomo doubled the amount of per project funding for anaerobic digesters in the state from $1 million to $2 million.

A new Renewable Energy for Agriculture Task Force will advise Cuomo on renewable opportunities and industry-specific needs. The task force will be comprised of state and industry representatives, and the New York State Energy Research and Development Authority will commit $75,000 to this initiative.

In addition, to continue advancements in digester technology, the New York State Energy Research and Development Authority is prepared to provide up to $1.2 million to support the construction of anaerobic digester technology at Cornell University’s Dairy Research Facility in Hartford, N.Y.

CMN


Up-in-the-air federal elections could shift dairy, ag leadership

October 10, 2014

By Alyssa Mitchell

WASHINGTON — As the November midterm elections draw near, stakeholders are closely watching races that could shift current agriculture committee leadership and impact key policy affecting the dairy industry.

The nation has been abuzz recently with the potential for an overturn in Senate leadership from Democrats to Republicans, which would shift Senate Agriculture Committee posts. Further, a couple of close races could lead to runoffs and a delay in knowing the final outcome until later this year or early next, stakeholders say, potentially impacting the prospects of legislation advancing in the Lame Duck session.

• Ag committee uncertainty

Currently, Democrats control the Senate 55-45 (two independent senators caucus with the Democrats), and Republicans would need a gain of six seats to win control. In a 50-50 Senate, the tie is broken by Vice President Biden.

“Almost anything is in play in the Senate, including control of the Senate,” says John Hollay, vice president of government relations for the National Milk Producers Federation (NMPF).

He notes that two races — Louisiana and Georgia — appear likely to head into runoff elections, as no candidate is polling above 50 percent in the two races, the margin necessary for victory.

Louisiana will have a Dec. 6 runoff, while Georgia’s runoff is not until Jan. 6, after the next Congress is scheduled to convene.

This could mean that the final roster of new agriculture committee leadership may be not fully determined for some time, Hollay notes.

If Democrats do retain control of the Senate, Sen. Debbie Stabenow, D-Mich., is expected to stay on as the agriculture committee chair.

“This would be good for dairy as she was a strong advocate for dairy farmers throughout the farm bill process,” Hollay says.

Dave Carlin, senior vice president for legislative affairs with the International Dairy Foods Association (IDFA), also notes the organization has had a great relationship with Sen. Stabenow, though he says he thinks the industry will be in good shape no matter the outcome.

Hollay notes there are several possibilities for leadership should Republicans take control that also would be good for the industry.

Sen. Pat Roberts, R-Kan., is in a close race to keep his seat and is a possibility to take over as Senate Ag Committee chair if Republicans take the majority, for example, Hollay says.

“We’ve worked with Sen. Roberts for awhile now and certainly have enjoyed working with him,” he says.

Hollay adds NMPF also has had a good working relationship with Sen. John Boozman, R-Ark., another possibility for leadership of the ag committee.

Carlin reiterates that the dairy industry is likely to be in good shape for working relationships moving forward with whoever takes leadership of agriculture and other key committees in the Senate.

Meanwhile, in the U.S. House, Republicans are expected to maintain the majority. Agriculture committee leadership will shift, however, as current ag committee Chair Frank Lucas, R-Okla., is at the end of his term for leadership of the committee.

Hollay says Rep. Mike Conaway, R-Texas, current chair of the commodities subcommittee, likely will assume leadership of the ag committee.

“We have a number of producers in the counties he represents, so I think we’ll have a good working relationship with him moving forward,” he says.

Hollay notes that ag committee Ranking Member Collin Peterson, D-Minn., is in a close race with an uncertain outcome.

“We’ve had a lot of support from him, and in our conversations with farmers in Minnesota, there is strong support for him,” he says.

• Overarching policy issues

Both NMPF and IDFA note that a key issue on the legislative agenda is upcoming reauthorization of school nutrition programs next year. Reauthorization will need to happen by next September.

Stakeholders also are looking at trade and immigration reform as key issues to be addressed.

“The U.S. immigration system is broken,” says Laurie Fischer, director of dairy policy for the Wisconsin Dairy Business Association (DBA). “Republicans, Democrats and independents agree the immigration system is in urgent need of repair.”

Fischer says U.S. businesses can’t reply on a 20th-century immigration system to address their labor necessities in the 21st century.

“Legislators know we have a broken immigration system, and we have a chance to fix this shattered system if the Senate and House are in agreement,” she says. “If the Senate flips its majority to Republicans, we feel much more confident that an immigration bill will be passed and will be put on the president’s desk for his signature.”

Michael Marsh, CEO of Western United Dairymen (WUD), says he hopes the House at least could take up immigration reform in their chamber in the Lame Duck session.

“Immigration reform is a top priority for us, and it has to get fixed,” he says.
Marsh notes that WUD supports the re-election of Republican Congressmen David Valadao and Jeff Denham, both of California, as they have come out in support of immigration reform in the United States.

“We think they could both help immigration reform move forward in the House,” he says.
He adds that Valadeo also is a dairyman in California, which is beneficial for organizations like WUD.

CMN


IDDBA report examines new habits of modern U.S. shoppers

October 10, 2014

 

MADISON, Wis. — U.S. demographics are evolving to include more single-person households and more varied family structures, changing the nature of food eating and sourcing, says a new report,

“Engaging the Evolving Shopper: Serving the New American Appetite,” recently released by the International Dairy-Deli-Bakery Association (IDDBA).

The report, compiled by The Hartman Group, showcases the evolving U.S. shopper of six fresh perimeter categories — dairy, deli, bakery, prepared foods, specialty cheese and specialty meats — through the lens of Millennials, modern eating, health and wellness, and digital engagement.

The report notes that Millennials are proving a dominant force in shaping food trends, both now and for the future, particularly in fresh perimeter categories.

These changing demographics, when combined with the new demands of modern life, have resulted in an eating culture defined by a blurring of boundaries, rituals and food traditions, the report says.

Today, eating can happen anytime and anywhere; both snacking and immediate consumption behaviors are shaping how shoppers think about fresh perimeter categories.

Why shoppers eat what they do has shifted; trends in health and wellness have redefined how shoppers see the role of food in their lives, the report notes. Food choices now reflect a growing aspiration toward an experiential, positive, holistic and proactive approach to wellness.

• Technology is totally integrated in shoppers’ lives

As online and offline have blurred, technology has become totally integrated into shoppers’ lives and, more specifically, their interactions with food as they choose, plan, experience, share and buy food online, the report notes.

From laptops to smart phones and beyond, shoppers have seamlessly integrated technology into their lives, fundamentally altering the way they engage with the world around them, including how and what they eat, the report adds.

While Millennials may be the most digitally-connected generation, this does not mean that they are completely satisfied with all that is social media, the report notes. Outreach efforts through social media will resonate best by being relevant to Millennials’ needs for inspiration, information and value.

The report suggests that manufacturers and retailers should examine the type of social media platforms available and consider if their user profiles match the intended audience. Equally as important, the report says, consider who shoppers prefer to hear from. Shoppers of all ages prefer to hear from established experts such as chefs, or from fresh perimeter category staff, depending on the issue. Thus when establishing a social media-based communications strategy in these areas, retailers and manufacturers should be sure that their voice is infused with this expertise.

• Choices made on a department-by-department basis

According to the report, while 83 percent of all primary shoppers purchase at least monthly from two or more of the six fresh perimeter categories, Boomers (38 percent) and Millennials (35 percent) stand out for their collective purchasing strength.

More than previous generations, Millennials choose fresh perimeter items based on quality, selection and value on a department by department basis (i.e., they may leave their primary store for another to ensure they can meet the standards they require in these categories). Millennials also are more likely to use fresh perimeter departments for everyday needs, rather than just for special occasions, the report says.

According to the report, fresh/specialty stores, although small, are attracting shoppers away from some conventional fresh perimeter departments. While only 5 percent of shoppers select a fresh/specialty store as their primary store overall, they will shop these stores to fill specific fresh category needs.

Compared to choosing a fresh/specialty store as a primary store, shoppers are at least twice as likely to prefer a fresh/specialty store for purchasing specialty cheese (16 percent), prepared foods (11 percent), bakery (10 percent), deli (10 percent) and specialty meats (10 percent), the report notes.

While some of the fresh perimeter category migration away from one’s primary store is to fresh/specialty stores, the vast majority is to other conventional food retailers, suggesting stores can focus more effort on retention strategies, the report says. Between a quarter and half of fresh perimeter category shoppers leave their primary store to fill fresh category needs elsewhere. In all six fresh perimeter categories, shoppers cite delivering better value and variety/selection as ways to keep them in their primary store.

While value strategies can take the form of price discounts or price promotions, stores also can offer value through higher quality, discovery through unique and specialty items, flavor distinctions, personalized recommendations, freshness cues, healthier offerings, compelling narratives and portion/package sizes that reduce waste, the report says.

According to the report, Boomers are, compared to Millennials, more satisfied with their primary store for fresh perimeter categories. They are least likely to migrate to other stores for dairy (25 percent) and bakery (30 percent) but most likely to prefer another store for specialty cheese (46 percent). Millennials are much more likely than Boomers to leave their primary store for specialty meats (48 percent), prepared foods (46 percent) and bakery (41 percent). To retain Millennials, stores will need to offer more variety and unique items to discover.

• Eating occasions have changed

According to the report, snacking (eating outside of meals; often alone) and immediate consumption (i.e., eating within an hour of purchase) are influencing how shoppers use fresh perimeter categories.

Seventy-seven percent of all adult eating occasions in the United States now involve at least some foodservice, prepared or ready-to-eat items; for Millennials, it’s 88 percent, the report adds.
As immediate consumption has become a normal way of sourcing food, shoppers are increasingly sourcing out, yet eating in, enjoying the fun of the restaurant-quality food with the ease and relaxation of home dining. They are essentially outsourcing cooking, the report notes. Innovative retailers are leveraging their own strengths to compete for a greater share of immediate consumption occasions. They are connecting shoppers’ desire for cooking assistance, customization and instantaneous food with thoughtfully curated fresh perimeter categories.

Millennial priorities, their preferences for communications and their use of interactive technologies within the store center around getting ideas about what to eat and buy rather than just about how best to fulfill their desires at the best available value.
Snacking has evolved from an incidental eating behavior to a purposeful, rich cultural practice, the report says. Food retailers are the primary source for snacks. Shoppers, especially Millennials (who snack more), are looking beyond center-store snack aisles to fresh, real food choices in fresh perimeter categories. They are looking at the quality of calories (nutritional density) rather than counting calories.

Beyond just avoiding “negatives” such as high sodium, high fructose corn syrup and chemical additives, they also are shifting their diets to include more real and whole foods, including more fruits and vegetables, whole grains, dairy and good meats and seafood, the report adds.

According to the report, fresh perimeter categories cue up shoppers’ aspirations for fresh, real, whole and minimally processed foods. They tap directly into current conversations about what is healthy and delicious to eat. The dairy department, in particular, signifies a real-food source of protein in the form of yogurt, milk, cheese, eggs and tofu.

Dairy remains ever central as a health and wellness category through its traditional associations with positive nutrition and protein, and now as a place to find attributes that support good digestion (e.g., probiotics and prebiotics, fermented and cultured foods and beverages, dairy-free alternatives, vegetarian/vegan foods, etc.), the report says. According to the report, bakery shoppers prioritize having no artificial ingredients or preservatives along with no high fructose corn syrup; dairy shoppers seek lowfat, 100 percent natural and fat-free; deli and prepared foods shoppers look for natural, no artificial ingredients and low sodium; specialty cheese shoppers seek natural and no artificial ingredients or preservatives; and specialty meat shoppers prioritize having no artificial ingredients or preservatives and minimal processing.

To order a copy of the report for $795 for non-members (IDDBA members can view the report for free), visit www.iddba.org or call 608-310-5000.

CMN


AMPI to lay off 90 workers as part of repositioning plan

October 10, 2014

PORTAGE, Wis. — Associated Milk Producers Inc. (AMPI), based in New Ulm, Minn., says approximately 90 positions will be eliminated now through the end of the year at its Portage, Wis., retail and foodservice packaging facility, which employs between 400 and 415 people.

According to Sarah Schmidt, communications director, AMPI, the cooperative’s board of directors recently decided that capital and floor space at the Portage facility would best benefit from being redirected to AMPI’s foodservice business, which currently is the largest portion of the Portage operation.

Meanwhile, the retail line, which packages cheese for sale in stores, will be transitioned to Great Lakes Cheese, Hiram, Ohio. As a result, some positions will be phased out.

“They’ve been a longtime customer of AMPI’s bulk natural cheese, so it’s a natural fit,” Schmidt says.

She adds that Great Lakes Cheese will be purchasing much of the bulk cheese needed to fill those retail orders from AMPI.

Schmidt says the decision is part of a plan for AMPI to best position themselves for the future.

She adds that the shift could lead to expansion and new positions being created at Portage down the line, though no specific details on that are available at this time.

“Our foodservice business is growing, and it’s an exciting area for the co-op,” she says.

CMN


USDA lowers 2014 forecast for milk production

October 10, 2014

WASHINGTON — In its latest “World Agricultural Supply and Demand Estimates” report, USDA forecasts U.S. milk production in 2014 will total 206.1 billion pounds, down 200 million pounds from the department’s forecast last month.

USDA says it reduced the forecast from last month due to slower growth in milk per cow. However, for 2015, the production forecast is raised by 300 million pounds to 212.8 billion pounds as growth in output per cow is expected higher with relatively lower-priced feed.

The commercial export forecast on a skim-solids basis is lowered in this month’s report to 39.2 billion pounds in 2014, down from 39.8 billion pounds forecast last month, as U.S. dairy prices are less competitive.

In the report, USDA upped its price forecasts for 2014 cheese, butter and whey as domestic demand continues to support prices.

Cheese is forecast to average $2.160-$2.170 per pound in 2014, up from $2.135-$2.155 in last month’s forecast. The 2015 cheese price forecast is $1.695-$1.785.

Butter is forecast to average $2.220-$2.250 in 2014, up from $2.170-$2.210 in last month’s forecast. The 2015 butter price forecast is $1.680-$1.800.

Dry whey is forecast to average $0.650-$0.660 in 2014, up from last month’s forecast of $0.640-$0.660.

The nonfat dry milk (NDM) price forecasts for both 2014 and 2015 are reduced as U.S. prices are expected to decline to increase the competitiveness of U.S. NDM exports. NDM is forecast to average $1.760-$1.780 this year, down from last month’s forecast of $1.775-$1.795. USDA projects the 2015 NDM price will average $1.450-$1.520, down from its forecast of $1.565-$1.635 last month.

The Class III price for 2014 is raised on stronger cheese and whey prices to $22.40-22.50 per hundredweight, up from last month’s forecast of $22.15-$22.35. The midpoint of the Class III price forecast is unchanged for 2015, with USDA projecting the average to fall in the $17.25-$18.15 range.

The Class IV price forecast for 2014 is raised to $22.40-$22.60, up from $22.30-$22.60 last month, as higher butter prices more than offset the decline in NDM prices. For 2015, the lower forecast NDM prices results in a lower Class IV price. The 2015 Class IV price now is forecast at $17.45-$18.45, down from $18.45-$19.55 in last month’s report.

The 2014 all-milk price forecast is raised to $24.10-$24.20, and is lowered for 2015 to $18.95-$19.85.

CMN


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Today's Cheese Spot Trading
October 30, 2014


Barrels: $2.0650 (NC)
Blocks: $2.1350 (+2)


Click here for more market activity
Cheese Production
U.S. Total Aug.
939.633 mil. lbs.


Milk Production
23 State Total Sept.
15.485 bil. lbs.

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