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Strong global milk supplies
pressure prices, CME cheese

November 20, 2015

By Alyssa Mitchell

MADISON, Wis. — Overall, Cheddar prices at the Chicago Mercantile Exchange (CME) have weakened this month as milk continues to flow to cheese vats and the holiday buying period begins to wind down.

Cheddar barrel prices dipped into the $1.40s over the past week, but bumped up 8.75 cents today to $1.5025 per pound. Cheddar blocks moved as high as $1.71 to start off last week, but since have weakened and settled at $1.57 per pound today.

USDA’s Dairy Market News says milk production is holding steady in the North Central region, while some increases in production are showing up in the South Central area. Weather has not impacted cow comfort.

“With the block and barrel cheese markets showing uncertainty, orders for milk loads are lower for the week into Class III plants,” Dairy Market News says. “Milk marketers indicate the recent change in demand from that sector was somewhat unexpected after the initial surge in orders at the beginning of the month.”

Throughout the Eastern United States, milk handlers are gearing up for Thanksgiving week, as bottling is expected to slow, causing increases in surplus milk supplies, Dairy Market News adds. In Florida, seasonal residency in the state is accelerating fluid milk sales.

Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle, says recent challenges to global dairy markets include ample milk supplies and the absence of major importers China and Russia.

Ben Laine, commodity hedging manager with Agri-Mark Inc., Methuen, Massachusetts, says his outlook for global dairy markets in the near- to medium-term is bearish.

“Milk production is strong around the world, and it is more than demand can keep up with at the moment,” he says.

He notes that while demand for cheese has been strong in both foodservice and retail, the market is still amply supplied.

“Supply should be fairly steady, so a seasonal slowdown in demand could mean a drop in prices,” he says.

Dairy Market News says weakening cheese prices are increasingly hanging over cheese production scheduling decisions in the Midwest.

“The ever-present factor of spot milk is at the core of the calculations, especially with long holiday weekends ahead this month and next,” Dairy Market News says.

Mike North, president of Commodity Risk Management Group, Platteville, Wisconsin, says looking back at history — which is not always a perfect filter — cheese typically has found support this time of year in the $1.40 range, but he’s uncertain if that price is sustainable.

“That’s still quite a bit out of range with world markets to be competitive, and with our supplies and the U.S. dollar where it’s at, it’s going to be tough to hold U.S. prices at these levels,” he says. “It wouldn’t shock me to get down to the $1.30-$1.35 level.”

CME butter, meanwhile, continues to hold strong just under $3 at $2.885 per pound, where it has stood since Nov. 9.

Dairy Market News notes butter production in the Central region is steady, and some plant managers indicate they would like to have more cream, but light to moderate spot cream availability is curtailing production.

“A few retailers who were awaiting a much-anticipated pre-holiday decline in prices have relented and placed orders to cover retail butter needs through the balance of the fourth quarter,” Dairy Market News says.

“Butter production has been strong, but not near as strong as other products, and no one wants to be caught with high-priced butter, so they are only making enough to meet current needs,” North says.
He adds butter is the “must-have” item in recipes right now and will be more widely used this holiday season, and he expects that demand to continue.

Looking ahead, CME cheese futures on Thursday showed prices in the $1.60s through the end of this year and into 2016 before climbing into the $1.70s in late spring. Butter, meanwhile, is projected to stay at or near $2 per pound or in the $1.90s throughout 2016.

“I would suspect butter will carry a bit more premium than we saw in January 2015, but not necessarily today’s level of $2.80s, although I think it could stay just south of $2 for some time,” North says.

Dorland says she doesn’t think butter inventories have been built up compared to this time last year, and butter’s popularity at retail and foodservice will keep demand up.

Laine notes shifting perspectives on the beneficial qualities of butter and other milkfat products are opening the doors for fat and cream in many directions. Fat contents are increasing in yogurts, restaurant chains are switching from margarine to butter and whole milk sales are strengthening.

“All of these factors are pulling fat out of the total milk supply and tightening the availability of butter. I think we will drop from where we are now, but not to the same levels as past years,” he says. “We may see the same seasonal patterns as before, but we could see them play out at a higher level.”


U.S. milk production climbs 0.1 percent over October 2014

November 20, 2015

WASHINGTON — Milk production in the 23 major milk-producing states during October totaled 16.03 billion pounds, up 0.1 percent from October 2014, according to preliminary data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Production chart.)

September revised production, at 15.60 billion pounds, was up 0.5 percent from September 2014. The September revision represents an increase of 12 million pounds or 0.1 percent from last month’s preliminary production estimate, NASS says.

The number of milk cows on farms in the 23 major states was 8.63 million head, 38,000 head more than October 2014 but 1,000 head less than September 2015, NASS reports. Meanwhile, production per cow in the 23 major states averaged 1,857 pounds for October, 7 pounds below October 2014.

Milk production in the entire United States during October is estimated at 17.08 billion pounds, up 0.1 percent from October 2014. Production per cow in the United States averaged 1,835 pounds in October, 5 pounds below October 2014. The number of milk cows on farms in the United States in October was 9.31 million head, 32,000 head more than October 2014 but 1,000 head less than September 2015.

California, the nation’s leading milk-producing state, experienced a 5.5-percent decline in milk production in October versus the previous year, dropping to 3.24 billion pounds in October 2015. Average milk production per California cow in October was 1,825 pounds, down 105 pounds from a year earlier. The state was home to 1.78 million cows in October, down 2,000 head from October 2014 and unchanged from September 2015.

Wisconsin followed with 2.45 billion pounds of milk produced in October, a 4.5-percent increase from a year earlier. Production per cow in Wisconsin in October averaged 1,910 pounds, a 70-pound increase from a year earlier. The state was home to 1.28 million cows in October, 8,000 head more than in October 2014 and unchanged from a year earlier.


Ownership of DairiConcepts to shift 100 percent to DFA

November 20, 2015

KANSAS CITY, Mo. — Dairy Farmers of America Inc. (DFA) this week announced it would acquire 100 percent ownership of DairiConcepts, the cooperative’s joint venture with Fonterra Cooperative Group Ltd.

Fonterra and DFA have partnered in DairiConcepts as equal owners since 2000 when the joint venture was formed. DairiConcepts plays a key role in DFA’s strategy to further grow its ingredients division and extend its global marketing outreach but was viewed as a non-core component of Fonterra’s strategy, the co-op says. The decision was made by both DFA and Fonterra to consolidate ownership.

“Our relationship with Fonterra remains strong,” says Rick Smith, president and CEO, DFA. “DairiConcepts has historically generated strong returns for our farmer-owners, and we look forward to continuing to strengthen the business and expand markets for our members’ milk.”
Fonterra will remain a key customer of DairiConcepts, which will operate as a wholly-owned subsidiary of DFA once the sale is final Dec. 31, 2015.

DairiConcepts is a manufacturer of cheese, dairy ingredients and dairy flavor systems with eight facilities across the United States. It works with customers both in the United States and around the world as a value-added supplier, committed to creating appropriate lower-cost, quality dairy ingredient solutions.


New Wisconsin Whey Protein plant to make Cheddar

November 20, 2015

By Alyssa Mitchell

DARLINGTON, Wis. — A new Cheddar barrel plant here is set to begin production in early December and will process up to 2 million pounds of milk per day to be made into Cheddar, says K Kachadurian, owner of Wisconsin Whey Protein (WWP), Darlington, Wisconsin, and Stainless Technologies, Menomonie, Wisconsin.

The new Cheddar plant was built to supply WWP with its own source of whey for its whey processing facility, also in Darlington. The firm also owns a whey processing plant producing instantized and regular whey protein isolate and whey protein concentrate-80 using only sunflower lecithin in Turtle Lake, Wisconsin.

Construction on the new cheese plant began in February and took only 10 months to complete. Kachadurian notes that his companies’ ability to do everything in-house — including design, engineering, fabrication, installation, programming and automation — kept the investment cost very low and made completion of the project move very quickly.

“Ten months is unheard of for a plant this size,” he says. The 2 million pounds of milk to be made into Cheddar daily will come from producers in Wisconsin and the surrounding areas.

The company has hired additional employees for the new Cheddar plant and plans to hire more.
“It’s a great thing for the state, the county and the town of Darlington,” Kachadurian says.


Metcalfe’s highlights Wisconsin-made products in its cheese departments
Wauwatosa remodel will double number of cheeses available

By Kate Sander

MADISON, Wis. — With the holiday shopping season upon us, Madison, Wisconsin-area consumers looking for just the right local cheese to share with friends and family have an abundance to choose from at Metcalfe’s Market.

Metcalfe’s is a fourth-generation, family-owned and operated neighborhood market with two stores in Madison — one in the Hilldale area and the other on Madison’s west side near West Towne Mall. The company also owns a store in Wauwatosa that is in the process of remodeling its cheese department and doubling the department’s size.

At any one time, Metcalfe’s marquee Hilldale cheese department will be carrying about 150 Wisconsin artisan cheeses, says Jeanne Carpenter, Metcalfe’s specialty cheese buyer. The store also carries a handful of cheeses from other states and 50-75 imports.

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Online grocery platforms offer
fresh dairy sales opportunities

November 13, 2015

By Rena Archwamety

MADISON, Wis. — As consumers increasingly rely on mobile technology, grocers are finding new opportunities for marketing and sales through digital shopping platforms. And while online grocery shopping used to be seen as a small, niche market limited to mostly dry goods, offerings have now entered the mainstream and feature more fresh items such as dairy, deli and produce.

According to a report on online grocery models recently published by the International Dairy, Deli and Bakery Association (IDDBA), an estimated 3 to 4 percent of total grocery category sales shifted online in 2014. However, the report says this category is expected to increase at a 14-percent compound annual growth rate through 2016, in line with categories like consumer electronics and baby supplies.

This year, several large retailers have introduced or expanded their online grocery programs. Google Express recently added fresh produce, chilled and frozen food options to its grocery delivery services in San Francisco and West Los Angeles. In September, Walmart announced the expansion of its online grocery and free pickup service in eight new markets across the United States. And a couple of weeks ago, Meijer announced the expansion of its pilot Meijer Curbside program to eight additional stores in Michigan and Ohio.

“Our customers are always looking for ways to maximize their time, and we’re delighted to expand Meijer Curbside in Michigan and Ohio,” says Michael Ross, Meijer’s vice president of digital shopping and customer marketing. “We believe the combination of listening to our customers’ needs and providing a convenient digital shopping solution provides customers with time to do other things.”

• Fresh opportunities

Perishables, including cheese and dairy items, hold much potential with the growth of online grocery shopping.

“Fresh is seen as the last barrier to online grocery shopping, though if retailers optimize the delivery and pick-up of fresh groceries a greater share of total retail will move online,” IDDBA says in its report. “As fresh goes online, so does the rest of the grocery trip.”

IDDBA reports that perimeter/fresh categories still under-index as a percentage of total basket online compared to the average store basket. Among six leading online grocery services, including Amazon Fresh, Walmart Grocery and Peapod, dairy items comprise just 4 to 10 percent of the SKUs, according to RetailNet Group research in the IDDBA report. Among the reasons for this, IDDBA says, are higher sensitivity to product quality in these categories, loss of food theater in online grocery, and online customers tend to be less influenced by impulse merchandising.

However, some online grocery platforms are seeing higher growth in cheese and dairy sales. MyWebGrocer, which manages digital solutions for grocers and consumer packaged goods (CPG) brands, reports that for the year ending Aug. 31, 2015, online sales for the dairy category increased year-over-year by 14.3 percent, led by cheese, which had 16.2 percent growth. MyWebGrocer reports that the dairy category comprises 12 percent of its e-commerce sales.

Michelle Cote, vice president of data and insights for MyWebGrocer, says to build the trust of their customers, grocers need to hire and train the best personal shoppers that will prepare the online orders in the store.

“They should know how to choose the right items from the specialty departments and are trained to listen to customers’ individual preferences for things like fresh produce and deli meats and cheeses,” Cote says.

She adds that options like “Click & Collect” — where consumers order groceries online and pick them up at the store rather than schedule and pay for delivery — help grocers to keep down the costs of delivering fresh items and actually are preferred by consumers, who find curb-side pickup more flexible.

“By offering Click & Collect and hiring the right personal shoppers, we know customers already trust and rely on grocers across our platform because dairy items are included in their carts 93 percent of the time,” Cote says.

• Marketing potential

While customers may not be able to see the product first-hand like they would in-store, online grocery shopping offers some unique opportunities for product marketing.

“That’s where it gets fun — digital merchandising is just sweat equity. There’s no limitation on space or potential shrink. You can get as creative as you want to be, displaying products in different ways,” says Jeremy Neren, founder and CEO of GrocerKey, an online platform that works with Woodman’s Markets and Willy Street Co-op in Madison, Wisconsin, as well as Unified Grocers on the West Coast and grocery website provider Webstop.

“Instead of a cheese platter floating in space, shoppers could see a product image with a description of an artisan cheese and where it comes from,” Neren says. “Telling the story and featuring videos of the producer. Focusing on the quality of the image. Those things have a major impact on the likelihood that someone will buy the product.”

Partnerships between retailers and suppliers also can be tailored to the online shopper. In its report, IDDBA notes an example of a recent partnership between Peapod and Barilla to offer meal kits based on recipes online. All the ingredients for a pasta dinner, including salad, pasta, meat and cheese, were pre-measured and packaged for easy online ordering.

The ability to gather and customize information based on each shopper also is an advantage of online grocery platforms.

“Online grocery represents a type of marketing nirvana that CPGs and grocers never had access to,” Cote says. “Grocery e-commerce provides CPGs and grocers with the unique opportunity to learn things about each of their customers — like purchase behavior, intent, product preferences and demographic information — and in doing so, create a personalized and engaging shopping experience.”

Cote adds that marketing in this channel allows retailers and CPGs to fine tune product promotions and advertisements toward a particular shopper.

“Marketing efforts are targeted and more efficient as a result, which creates a relevant experience for customers and in turn breeds loyalty,” she says.

• Specialized products

In addition to providing convenience, online grocery platforms also allow mainstream grocers to offer specialized products that may not be available in brick-and-mortar stores, as well as an opportunity for specialized retailers to offer items to a wider customer base.

Neren says GrocerKey is working with United Natural Foods Inc. (UNFI) on a drop-ship program that will add 30,000 natural food products to a grocer’s existing online offerings on the GrocerKey platform.

“A store could extend those products to existing customers, and they would be shipped directly to the customer from one of (UNFI’s) fulfillment centers,” Neren says.

The rise of online grocery platforms also provides opportunities for specialty food stores and producers to reach a larger audience. One example of this is Artizone, an online grocery delivery service available in Chicago, Dallas and Denver, that features products from artisan producers and retailers — from specialty cheese and meat purveyors to hand-made soaps and cleaning products.

“We built a platform where each artisan, shop owner or farmer can open a platform under one roof,” Artizone co-founder and COO Lior Levy said in a webinar hosted this week by The Food Institute and BMO Harris. “With Artizone today, when customers go online, they can find products from different artisans and shops in their area and put them in a single cart. We provide picking, packing and packaging materials. Consumers have the experience of buying from an online supermarket, but everything is delivered from local farmers and artisans.”

Levy says 50 percent of Artizone’s revenue is generated by customers shopping on average at 19 different shops. More than half of their artisans have delivered in more than 50 zip codes, and key artisans can deliver more than 20 orders a day.

“This opens a conversation that those artisans and shops are becoming more and more unique in what they do,” Levy says. “They get the orders they need day to day to make a profit possible. It lets the artisans do what they do best.”

Neren, who also presented as part of this week’s webinar, notes that the online platform his company developed for Woodman’s has attracted shoppers that previously weren’t visiting the store on a regular basis, driving 80 percent incremental sales and 60 percent revenue growth with minimal advertising. Some of this growth has resulted from small businesses, such as day cares, placing large online orders, he says.

Bill Bishop, co-founder and chief architect of consulting service Brick Meets Click, said in his webinar presentation that some of the areas of greatest potential in online ordering include foodservice and catering.

“For an event, small or large, traditionally consumers make one trip to place the order and one trip to pick it up,” he says. “Online planning and ordering can eliminate that first trip. It’s often focused on deli and bakery ordering and is a chance to sell across all departments. It’s an opportunity to make it easier for customers to plan, place orders, know when it will be ready, and make sure it is accurate.”

Neren says there has been “enormous change” from when he first started an online grocery delivery service geared toward college students in 2006 and now, when online ordering is a basic consumer expectation.

“When I first started my previous business, it was considered a novelty to offer online ordering,” he says. “In 2006, very few grocery stores across the country offered online ordering at all, and very few had on-demand services. It has popped up in the last few years. And now with Amazon and Google getting into that space, all the big players want a piece of the pie. It influences things quite a bit.”


FDA seeks comments on
use of ‘natural’ in food labeling

November 13, 2015

WASHINGTON — Because of the changing landscape of food ingredients and production, and in direct response to consumers who have requested that FDA explore use of the term “natural,” the agency in Thursday’s Federal Register published a request for public comments and information on the use of this term in the labeling of human food products.

FDA says it is taking this action in part because it received three Citizen Petitions asking that the agency define the term “natural” for use in food labeling and one Citizen Petition asking that the agency prohibit the term “natural” on food labels.

Although FDA has not engaged in rulemaking to establish a formal definition for the term “natural,” the agency does have a longstanding policy concerning the use of “natural” in human food labeling. FDA has considered the term “natural” to mean that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.

However, this policy was not intended to address food production methods, such as the use of pesticides, nor did it explicitly address food processing or manufacturing methods, such as thermal technologies, pasteurization or irradiation, FDA says. FDA also did not consider whether the term “natural” should describe any nutritional or other health benefit.

Specifically, FDA is asking for information and public comment on whether it is appropriate to define the term “natural,” and if so, how the agency should define “natural,” and how the agency should determine appropriate use of the term on food labels.

FDA is accepting public comments until Feb. 10, 2016. To submit comments, visit and type FDA-2014-N-1207 in the search box.

For more information, contact Loretta Carey with FDA’s Center for Food Safety and Applied Nutrition at 240-402-2371.


USDA lowers its forecasts for
milk production, 2016 prices

November 13, 2015

WASHINGTON — USDA currently is forecasting the number of U.S. dairy cows to decline more rapidly from a second-quarter peak than the department previously expected. That, combined with growth in milk per cow in 2015 remaining slower than expected, caused USDA to lower its milk production forecasts for both 2015 and 2016 in its latest “World Agricultural Supply and Demand Estimates” report released this week.

USDA now is projecting milk production in 2015 will total 208.7 billion pounds, down 200 million pounds from its forecast last month, while 2016 production is forecast at 212.9 billion pounds, down 100 million pounds from last month.

In the report, USDA also reduces its forecasts for imports on both a fat and skim-solids basis for both years as imports of milk protein concentrates and casein are expected to be lower.

The export forecast for 2015 is reduced on weaker butter, cheese and whey sales. Largely uncompetitive prices are likely to limit growth in export sales of butter and, to a lesser extent, cheese in 2016. USDA is reducing its 2016 export forecast on a fat basis to 9.4 billion pounds, down from 10.0 billion pounds in last month’s report. The 2016 export forecast on a skim-solids basis remains unchanged from last month’s report at 39.5 billion pounds.

Meanwhile, strong domestic demand for butter is expected to support relatively higher butter prices during the remainder of 2015, and the price forecast for butter is bumped to $2.005-$2.035 per pound from $1.920-$1.950 in last month’s report. However, supplies are expected to be large and the price forecast for 2016 is lowered by a half-cent from last month to $1.835-$1.955 per pound.

The cheese price forecasts also are lowered in this month’s report as supplies remain large. The 2015 cheese price is forecast to average $1.645-$1.655, down from $1.665-$1.675 last month. In 2016, the cheese price is forecast to average in the $1.595-$1.685 range, down from USDA’s forecast of $1.6000-$1.690 last month.

The nonfat dry milk (NDM) price forecast also is reduced for 2015-2016 as prices move closer to international levels. The 2015 NDM price now is forecast to average $0.900-$0.920, down from $0.910-$0.930 last month. In 2016, NDM is forecast to average $0.955-$1.025, down from $0.960-$1.030.

The dry whey forecast remains unchanged from the previous month at $0.375-$0.385 in 2015 and $0.280-$0.310 in 2016.

Reflecting the lower cheese price forecasts, the Class III price forecast is lowered for 2015 and 2016. The Class III price is forecast to average in the $15.75-$15.85 per hundredweight range in 2015, down 15 cents from last month’s report, while the 2016 forecast is down 5 cents to $14.70-$15.60.

The Class IV price forecast is raised for 2015 to $14.10-$14.30, up 25 cents from last month due to the strong forecast for butter which more than offsets the lower NDM price. In 2016, though, the Class IV price forecast is lowered by 10 cents to $13.85-$14.85.

The all-milk price for 2015 is projected to average $17.00-$17.10, up 10 cents from last month’s report, while the 2016 all-milk price forecast is lowered 10 cents to $15.95-$16.85.


Counsel for ADPI reviews
NDM/SMP key characteristics

November 13, 2015

CHICAGO — While nonfat dry milk (NDM) and skim milk powder (SMP) are similar substances and overlap in terms of their basic constituents and specifications, they are not necessarily identical, notes Keller and Heckman LLP, Washington counsel for the American Dairy Products Institute (ADPI), in a recent opinion on the interchangeability of NDM and SMP as an ingredient in finished foods.

ADPI requested the opinion from Keller and Heckman, specifically asking:

• Whether SMP is a permissible ingredient in foods covered by standards of identity established by FDA;

• Whether SMP is a permissible ingredient in non-standardized foods;

• How NDM and SMP should be listed in the ingredient statement provided on the label of finished foods; and

• Whether SMP may be identified as Grade A, and if so, whether it may be used an ingredient in Grade A milk products.

Keller and Heckman notes that NDM is covered by a federal standard of identity and is defined as “the product obtained by removal of water only from pasteurized milk. It contains not more than 5 percent by weight of moisture and not more than 1.5 percent by weight of milkfat unless otherwise indicated.”

Similarly, SMP is defined by Codex Alimentarius standard 207-1999 as the product obtained by the partial removal of water from milk or cream such that it contains no more than 5 percent moisture by weight and no more than 1.5 percent milkfat by weight.

Unlike FDA’s standard of identity for NDM, however, the Codex standard permits the addition of lactose, milk retentate and/or milk permeate for protein adjustment purposes and to otherwise meet the compositional requirements for SMP, the firm notes. In other words, the standard of identity for NDM meets the Codex standard for SMP, but SMP may not meet the mandatory standard of identity for NDM because of the addition of certain specified milk constituents that are not permitted under the standard.

Accordingly, the two are not interchangeable, Keller and Heckman says.

The firm says in its opinion that SMP is a permitted ingredient in nonstandardized foods but not in standard of identity foods where NDM is a permitted ingredient, to the extent that the SMP has been adjusted through the addition of milk retentate, milk permeate and/or lactose.

“It is our further opinion that, to the extent that SMP has been so adjusted, it must be listed as a separate ingredient in the ingredient statement provided on a finished food, apart from any NDM that may also be in the food,” Keller and Heckman says. “Finally, it is our opinion that SMP may be labeled Grade A if it complies with the applicable provisions of the Pasteurized Milk Ordinance and, accordingly, may be used as an ingredient in Grade A milk products.”


Stakeholders urge FDA to tread
carefully with raw milk cheeses

November 6, 2015

WASHINGTON — Cheese industry stakeholders are cautioning FDA that changes to the rules on manufacturing cheese from unpasteurized milk could have negative impacts on the industry by limiting the production of quality products that are gaining popularity with consumers.

In comments submitted to FDA, which were due this week, various industry organizations, companies and other stakeholders urge the agency to tread carefully and not stymie businesses with an uncertain regulatory climate.

FDA in July requested public comments, including scientific data and information, that would assist the agency in identifying and evaluating measures that might minimize the impact of harmful bacteria in cheeses made from unpasteurized milk.

“The FDA recognizes that there is broad diversity in cheese manufacturing operations and approaches and that many factors go into ensuring the safety of the food. In issuing this call for data and information, we are interested in learning more about the standards and practices in use by a wide variety of producers, including the growing artisanal cheese manufacturing community,” the agency says.

FDA notes it is taking this action in part based on findings from a joint FDA/Health Canada Quantitative Risk Assessment also released in July.

To conduct the risk assessment, scientists created mathematical models and used them to predict the risk from Listeria monocytogenes in soft-ripened cheese and the impact of various measures meant to reduce the risk. For example, they established baseline estimates for risk from Listeria monocytogenes in soft-ripened cheese made from pasteurized milk and in soft-ripened cheese made from raw milk.

“The risk from soft-ripened cheese made from raw milk is higher,” compared with soft-ripened cheese made from pasteurized milk, the interpretive summary says.

“Although the risk from soft-ripened cheese made from raw milk is higher, the results show that soft-ripened cheese made from pasteurized milk also carries some risk,” it adds.

The current 60-day aging period for cheese manufactured from raw milk has long been presumed to act as a control measure to reduce the risk that pathogens would be present when the cheese was consumed. However, the available data and information raise questions about the safety of cheese manufactured from raw milk, even when aged, FDA says. For example, research has demonstrated that pathogens such as E. coli O157:H7 can survive a 60-day aging period in a hard cheese such as Cheddar, the agency says. (See FDA seeks comments on reducing risk of raw milk cheese, announces risk assessment” in the Aug. 7, 2015, issue of Cheese Market News.)

The risk assessment is available at SafetyAssessment/default.htm.

“For the past 60 years, the requirement that cheese made from raw milk be aged for a minimum of 60 days has proven successful in producing safe cheese,” says the American Cheese Society (ACS) in its comments. “It is imperative that cheesemakers can continue such production unimpeded while FDA considers potential alternatives and that our members’ businesses not by stymied by an uncertain regulatory climate.”

ACS notes its 2012 industry survey indicated that 59 percent of cheesemakers made some cheeses from unpasteurized milk.

“Just this year, 18 percent of the awards in our Annual Judging & Competition went to cheeses made from unpasteurized milk,” ACS says. “Regulatory changes to the manufacture of cheese from unpasteurized milk could have a grave impact on our industry by limiting cheesemakers’ ability to produce many fine quality cheeses which are highly sought-after by consumers.”

ACS says it seeks to understand FDA’s renewed focus on the production and sale of raw milk cheese. The organization says the cases presented to justify FDA’s present request for information involve not only legally and safely produced domestic raw milk cheeses, but also raw fluid milk, products manufactured or imported illegally, and products made in unlicensed facilities or private homes; this conflates many unrelated products.

ACS notes cheeses produced or imported illegally can endanger public health while impugning the reputation of the legitimate cheese industry and should not be factored into statistics on legally produced cheese made by licensed U.S. producers.

“We believe that the proven, current regulations must remain in place and that science may show us that other production methods might provide similar levels of safety,” ACS says. “These methods may differ by type and style of cheese, but ultimately they should add to the safe options for producers, not curtail them.”

ACS notes that although reference to epidemiological data is cited to justify FDA’s current request for information, this evidence actually suggests that environmental contamination by Listeria monocytogenes is the biggest food safety threat facing the cheese and dairy industry.

“Epidemiological records identify few instances of foodborne illness caused by raw milk cheese produced in a licensed U.S. facility according to current regulations,” ACS says. “Few, if any, of those outbreaks identified unpasteurized milk as the source of contamination. FDA’s recent sampling program has confirmed this, revealing a very low incidence of pathogens in unpasteurized milk cheese made domestically by licensed facilities in accordance with all regulatory requirements.”

The International Dairy Foods Association (IDFA) says its members support FDA’s efforts to collect scientific data to help identify and evaluate ways to minimize the impact of harmful bacteria in cheeses made from raw milk. The association notes that since the majority of its members use pasteurized milk to make their cheese, IDFA is unable to provide specific information about practices and control measures used to reduce potential foodborne illness in cheese made from raw milk.

“IDFA believes it is important for FDA to gain an accurate understanding of the scope of the industry that makes cheese from unpasteurized milk,” the association’s comments say. “IDFA will be surveying our members to obtain current industry data on the amounts and types of cheese made from unpasteurized milk, heat-treated milk and raw milk and, if possible, seek information regarding the time and temperatures used to heat treat the milk.”

IDFA says it has a goal of collecting the information in the first quarter of 2016 and will share the findings with FDA when complete.

IDFA adds it believes any future changes to the current regulatory provisions requiring a 60-day minimum aging period for cheese made from raw milk should consider a performance objective or standard for Listeria monocytogenes that is based on sound scientific evidence and can accommodate both traditional cheesemaking practices and new technologies.

The Oldways Cheese Coalition (OCC) — whose mission is to promote artisan cheeses and traditional cheesemaking techniques, including the use of raw milk — notes it educates consumers on the benefits of raw milk cheeses and highlights the work of artisan producers in the United States and abroad.

“We are firm proponents of consumers’ right to choose raw milk cheeses. The coalition’s partners and members support best practices and scientifically-based regulation of cheese,” OCC says.

OCC this fall conducted an online survey on Raw Milk Cheese Consumption and Attitudes. The coalition also conducted in-depth telephone interviews with a sample of willing participants from Oct. 24-27. A total of 2,593 consumers responded to the survey, with 2,150 respondents residing in the United States. OCC says it restricted its analysis to the U.S. participants.

“To a large extent, the survey represents enthusiastic consumers of raw milk cheese,” OCC says, noting 84 percent of survey respondents report purchasing raw milk cheese at least once a month and 20 percent report that they purchase raw milk cheese more than once a week, while 55 percent purchase it regularly — at least once every week or two.

“We can confidently report that 90 percent of U.S. cheese consumers who responded to the survey feel knowledgeable about the distinctions between pasteurized and unpasteurized milk cheeses, and 94 percent of all respondents have knowingly chosen to eat raw milk cheese,” OCC says.

A total of 798 respondents to the survey also opted to submit additional written comments, OCC notes. Their write-in responses addressed two major issues: first, that they believe it is the consumer’s right to choose raw milk cheeses, and second, respondents stressed the importance of having FDA properly address risks posed by other foods while fully considering the benefits of raw milk cheeses.

“Survey respondents overwhelmingly, almost 90 percent, think that raw milk cheeses should remain available to consumers in the U.S.,” OCC adds.

OCC says it encourages FDA to devise a public awareness campaign on the general benefits of raw milk cheeses while educating consumers on the methods used by cheesemakers to maintain a safe food system.

Meanwhile, the Cheese Importers Association of America (CIAA) in its comments says it supports the safety of imported raw milk cheeses and notes there have not been significant human health and safety problems associated with these cheeses.

CIAA says it believes practices such as animal health requirements, hygienic milk collection and storage, fast cooling and microbiological criteria imposed by the countries from which U.S. companies import have adequately protected U.S. consumers.

The association adds it recognizes that there is a growing domestic cheese production industry that may be new to these requirements, but internationally, these practices have been in place for many years and should be recognized, accepted and can be monitored through the upcoming requirements of the Foreign Supplier Verification Program.

“We must caution that the imposition of the various requirements proposed by the various FSMA-related rules is already having an unintended chilling effect on the importation of safe, wholesome cheese products because some suppliers find the requirements to be a financial and operational cost that make exporting cheese to the United States uneconomical and overly complicated,” CIAA says. “For this reason, we respectfully suggest that a further harmonization of international standards should be a goal of all current trade negotiations, particularly the Transatlantic Trade and Investment Partnership, so that our consumers can continue to have access to wholesome and traditionally desired products.”

In addition to the long-standing international production practices, CIAA says reasonable protocols would include:

• Producing cheese in licensed facilities that are routinely inspected;

• Producing cheese under the oversight of licensed dairy handlers;

• Taking part in ongoing food safety education;

• Conducting product and environment testing;

• Maintaining accurate and up-to-date records; and

• Seeking third-party certification.

“Should FDA propose modifications in the so-called 60-day rule, we urge you to consider that any implementation will likely require a long lead time for producers to adapt to modified practices,” CIAA says. “Furthermore, CIAA most strongly believes that any considered changes to the rule should be backed by documented scientific research, information gathered by the collection of raw milk cheese samples collected over the last few years from the import community, as well as a risk assessment related to statistical analysis of illnesses directly caused by consumption of lawful importation of raw milk cheeses.”


Glanbia announces $140M
Southwest Cheese expansion

November 6, 2015

CLOVIS, N.M. — Global nutrition company Glanbia together with its joint venture partners in Southwest Cheese this week announced they are in advanced discussions for a $140 million expansion of their cheese and whey production plant in Clovis, New Mexico. The expansion, which is expected to be completed in two years, will increase milk processing capacity by almost 30 percent and create an additional 50 jobs.

The joint venture between Glanbia and the dairy cooperatives of the Greater Southwest Agency, including Dairy Farmers of America (DFA) and Select Milk Producers, currently processes more than 220 truckloads of milk per day.

“I am delighted to announce, together with our joint venture dairy cooperative partners, that we are at an advanced stage in our discussions for the expansion of Southwest Cheese,” says Brian Phelan, CEO, Glanbia Global Ingredients. “Since the commissioning of the plant in 2005, the partnership has been extremely successful. With this expansion we are making a significant commitment to our employees, our producers, our customers, our local community and the economy of New Mexico.”

The joint venture partners note the importance of local and state government support in New Mexico.

“The construction of Southwest Cheese started in 2004 on a greenfield site in Clovis,” Phelan says. “During our 10 years in the community we have expanded production and grown our footprint. We are thankful to the local and state government and agency support.”

The plant will supply some of the world’s leading food companies and meet cheese and whey demand both domestically and internationally. The expansion will increase Southwest Cheese employee numbers to more than 400 in Clovis.

The Southwest Cheese venture — which manufactures 40- and 640-pound block cheese (Cheddar, Monterey Jack, Pepper Jack, Colby Jack and Gouda) and whey protein powders — is 50 percent owned by Glanbia plc, with the balance primarily owned by DFA and Select Milk Producers.


U.S. cheese production up
2.4 percent vs. year earlier

November 6, 2015

WASHINGTON — Total U.S. cheese production in September, excluding cottage cheese, was 956.0 million pounds, up 2.4 percent from September 2014, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart.)

September cheese production was 2.3 percent lower than August’s 978.6 million pounds, but when accounting for the length of the months September production was up 0.9 percent on a daily average basis from a month earlier.

Production of Mozzarella, the most-produced cheese in the United States, was up 0.6 percent from September 2014 to 317.7 million pounds in September 2015. Total Italian-type cheese production, of which Mozzarella is the largest component, was up 0.4 percent from a year earlier to 403.5 million pounds.

NASS reports Cheddar production was up 3.8 percent from a year earlier to 375.8 million pounds in September 2015. Total production of American-type cheese, of which Cheddar is the largest component, rose 2.8 percent from a year earlier to 375.8 million pounds.

Wisconsin led the nation’s cheese production with 249.6 million pounds in September, up 3.2 percent from its production a year earlier. Meanwhile, California production dropped 3.1 percent from a year earlier to 192.6 million pounds.

The next four cheese-producing states in September were Idaho with 81.0 million pounds, up 5.6 percent from its production a year earlier; New York with 68.0 million pounds, down 3.1 percent; New Mexico with 58.5 million pounds, up 1.7 percent; and Minnesota with 53.7 million pounds, down 1.9 percent.

NASS reports total U.S. butter production was 134.0 million pounds in September, up 0.9 percent from September 2014 and up 4.3 percent from August’s 128.5 million pounds. Adjusted to a daily average basis September butter production was up 7.8 percent.

California led the nation’s butter production with 38.5 million pounds in September, a decline of 6.8 percent versus its production a year earlier.


Kraft Heinz to close Campbell plant, 6 others

November 6, 2015

NORTHFIELD, Ill. — The Kraft Heinz Co. announced Wednesday that it is closing seven manufacturing facilities in North American, including its plant in Campbell, New York, that produces Italian and String cheeses.

The other facilities that will close are in Fullerton and San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. In a staged process over the next 12-24 months, production in these seven locations will shift to other existing factories in North America.

Kraft Heinz also plans over the next two years to move part of its cheese production from its Champaign, Illinois, facility to other factories in its network, leaving the Champaign site to focus on dry and sauce production. It also will expand its Lowville, New York, cream cheese plant, adding more than 100 jobs over the next five years. Additionally, the company will move production at its meat processing facility in Davenport, Iowa, to a new location in the same area and transfer its Oscar Mayer and U.S. meats business unit from Madison, Wisconsin, to its co-headquarters in Chicago.

The company’s North American factory-based employee positions will be reduced by approximately 2,600.

“Our decision to consolidate manufacturing across the Kraft Heinz North American Network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined company. This will make Kraft Heinz more globally competitive and accelerate the company’s future growth,” says Michael Mullen, senior vice president, corporate and government affairs, The Kraft Heinz Co.

“At the appropriate time, affected employees will receive severance benefits, outplacement services and other support to help them pursue new job opportunities,” Mullen adds. “Kraft Heinz fully appreciates and regrets the impact our decision will have on employees, their families and the communities in which these facilities are located.”


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Today's Cheese Spot Trading
November 24, 2015

Barrels: $1.5325 (+6 1/4)
Blocks: $1.5700 (-1/2)

Click here for more market activity
Cheese Production
U.S. Total Sept.
955.970 mil. lbs.

Milk Production
U.S. Total Oct.
17.080 bil. lbs.

Guest Columnist

The changing face of whey

John Lucey, Wisconsin Center for Dairy Research

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