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ADPI virtual panel features economists’ dairy outlook

July 31, 2020

By Alyssa Mitchell

ELMHURST, Ill. — During the first ever virtual joint annual conference held this week by the American Dairy Products Institute (ADPI) and American Butter Institute (ABI), a group of dairy market experts convened in a virtual panel to discuss the dairy market outlook for the months ahead.

Monday’s session was moderated by Mike McCully, president of The McCully Group, and included insight from Jon Davis, chief meteorologist with Riskpulse; Mary Ledman, global dairy strategist, Rabobank; and Phil Plourd, president of Blimling & Associates Inc.

Davis provided an overview of climate conditions over the past several months as the global dairy market has grappled with the coronavirus pandemic.

He notes that while the pandemic has been foremost on stakeholders’ minds, it has been a unique year from a weather perspective as well.

Davis notes it was a warm spring compared to historical norms, and this summer currently is tracking to be one of the hottest — if not the hottest — on record in the United States, particularly in the Midwest.

“This will be the hottest July ever recorded,” he says.

Davis adds that the top 28 dairy-producing counties in the United States — which account for approximately 75% of U.S. dairy production — also correspond with the hottest areas of the United States in June and July.

Even if temperatures drop to more “normal” levels through the end of August, this summer would rank in the top five warmest since 2000, he says.

Unlike the United States, the major dairy-producing regions in Europe have had normal temperatures so far this summer, Davis notes.

“Some of the grain-producing zones in Western Europe are dealing with dryness — but with a lack of extreme heat,” he says, noting this likely will impact yields/production of row crops to a moderate degree.

Meanwhile, New Zealand is in good shape with normal soil moisture conditions and no significant areas of stress, Davis says.
He notes La Niña — a period of colder than normal ocean temperatures in the equatorial Pacific — has been slowly evolving.
“We expect this to continue with La Niña conditions by fall and into winter,” he says.

Ledman notes U.S. milk production is on the rise again, albeit slowly, after low prices forced some producers to dump milk at the onset of the coronavirus pandemic.

She also echoes Davis’ observations about positive climate conditions in New Zealand, noting the Oceania milk pool will expand marginally this year and into next, while in Europe, milk production growth is expected to slow in the second half of 2020.

All eyes are on China as a primary dairy importer, but renewed enthusiasm in farm investments and milk production growth there may reduce imports, Ledman says.

Meanwhile, after facing African swine fever, China’s now-recovering pork sector is good news for the whey industry and global dry whey import demand, she notes. The swine fever outbreak in Asia had put pressure on U.S. whey demand there as China is the world’s largest pork producer and accounts for around 50% of pork production globally. China’s hog industry is a large consumer of dairy-derived animal feed. (See African swine fever, coupled with tariffs, pressures U.S. whey” in the June 21, 2019, issue of Cheese Market News.)

Ledman says foodservice market recovery is critical to the outlook for dairy prices around the globe. In addition, dairy trade is likely to be more challenged in the second half of 2020 and into 2021 due to global GDP destruction in almost all dairy importing countries.

“At last year’s ADPI conference I highlighted the challenges of trade wars and a pending recession,” she says. “Those challenges remain and have only been amplified by the pandemic.

“The economic fallout from lost income and a global recession is expected to result in consumers trading down from branded to private label products,” she adds, but “the health and wellness attributes of dairy can — and likely will — play a more prominent role in a healthier diet.”

Meanwhile, with unprecedented volatility in the U.S. cheese market, Plourd says there are indications that the market may continue trending lower.

He notes U.S. farm financial situations are looking a little brighter, with Dairy Margin Coverage program margins above $10 per hundredweight for 2020 and other government assistance including the Farmers to Families Food Box Program, which soon is launching a third round.

At the retail level, dairy sales still are strong and grocery dairy purchases are up, while restaurants still are struggling, Plourd says.

“Various polls suggest that consumers plan to cook more and eat out less even after restrictions ease — will they follow through when that theory can become reality?” he asks, adding that with more people than ever working from home, the future outlook for restaurants is uncertain.

CMN


Senate unveils new COVID-19 relief bill; House OKs ag funds

July 31, 2020

WASHINGTON — U.S. Senate leadership this week introduced the $1 trillion Health Economic Assistance Liability Protection and Schools (HEALS) Act, the latest legislative response to the COVID-19 national emergency. The bill would provide an additional $20 billion to USDA to help farmers and ranchers.

According to the American Farm Bureau Federation (AFBF), the $20 billion has few restrictions and can be used “to prevent, prepare for and respond to coronavirus by providing support for agricultural producers, growers and processors impacted by coronavirus, including producers, growers and processors of specialty crops, non-specialty crops, dairy, livestock and poultry, including livestock and poultry depopulated due to insufficient processing access and growers who produce livestock or poultry under a contract for another entity.”

The bill allocates an additional $457 million to USDA to address other issues, including $245 million to make up for lost user fees due to the decline in agriculture inspection services and $113 million in rural rental assistance to low-wage residents.

Senate leadership also introduced the Continuing Small Business Recovery and Paycheck Protection Program Act as part of the HEALS Act, which includes several of the technical changes to the Paycheck Protection Program (PPP) supported by AFBF.

Under the bill, Americans would receive direct stimulus payments of $1,200 per adult, or $2,400 per couple, with an additional $500 per dependent. Just as in the CARES Act, payments would begin to phase out at an average of $75,000 in income per person.

However, the Center for Science in the Public Interest (CSPI) called the Senate bill “cruelly out of touch with the needs of millions of Americans,” noting it would significantly cut the temporary COVID-related boost to unemployment benefits.

The bill also omits provisions to alleviate food insecurity through the Supplemental Nutrition Assistance Program (SNAP) by increasing nutrition benefits and protecting access to the program, CSPI says.

“The pandemic is also greatly increasing financial pressures on local schools, including the provision of meals to at-risk children,” Schwartz says. “Yet instead of ensuring that school meal programs operate in the black, and guaranteeing that every child gets breakfast and lunch, it seems the administration and the Senate would rather bribe schools into physically reopening — regardless of local virus conditions.”

Meanwhile, the U.S. House last week approved an appropriations bill funding USDA and FDA for the next fiscal year. The bill includes key advances for dairy, which the National Milk Producers Federation (NMPF) applauds. The bill includes provisions that are top priorities for NMPF as it works to assist dairy producers nationwide.

“(This) House appropriations bill represents key gains for dairy and all of agriculture,” says Jim Mulhern, president and CEO, NMPF. “We especially thank the lawmakers who took extra steps to assist producers, and we look forward to working with senators as legislation advances through Congress.”

The Senate has yet to begin work on its own appropriations measures.

Among dairy’s gains, the House bill:

• Urges FDA in multiple ways to enforce dairy product standards of identity. Rep. Peter Welch, D-Vt., with bipartisan support from 18 of his colleagues, added an amendment on the House floor directing FDA to allocate $5 million to enforce federal rules that reserve dairy product terms for “real dairy products,” NMPF notes. The committee report also directs FDA to start enforcing dairy product standards of identity pursuant to a review process it began two years ago following pressure from NMPF and Congress.

• Allocates $10 million for the Farm and Ranch Stress Assistance Network, a USDA program aimed at connecting those working in agriculture to stress assistance and support programs.

• Provides $990 million, a 78% boost from the current fiscal year, for ReConnect, a USDA Rural Development program working to provide broadband service to eligible rural areas.

• Sets aside $6 million for the Dairy Business Innovation Initiatives program, which provides direct technical assistance and grants to dairy businesses to further the development, production, marketing and distribution of dairy products. While the House Appropriations Committee initially provided $1 million for the program, Welch and Rep. Bryan Steil, R-Wis., secured an additional $5 million with an amendment passed by the entire House.

• Allocates $1 million to the Healthy Fluid Milk Incentives Projects, a program created in the 2018 Farm Bill to create pilot programs to boost milk consumption among SNAP households (see related article in this issue).

CMN


IMPA continues to support the industry, looks ahead to 2021

July 31, 2020

By Trina La Susa

IDAHO FALLS, Idaho — After making the decision to cancel the 2020 Idaho Milk Processors Association (IMPA) Meeting and Conference, the IMPA board of directors continues to provide scholarships to support future dairy professionals, collaborate on a pre-competitive basis and plan for the upcoming conference August 12-13, 2021, in Sun Valley, Idaho.

“Overall, the priority for this year is helping the dairy industry in Idaho and Utah to stay safe and strong,” says Daragh Maccabee, president, IMPA. “The thing we look forward to most is being back in Sun Valley, Idaho, in 2021 as a very strong industry and in a very strong country. That’s what our energies are channeled toward.”

Maccabee says the IMPA board of directors continues to function as it does each year. Most of the ongoing activities of the association outside of the conference include meeting regularly as a board, discussing the current issues facing the industry, continuing the cooperation with Idaho Dairymen’s Association Inc. to establish the Idaho Dairy Worker Training & Safety Program as well as supporting future dairy professionals through the scholarship program.

In absence of the 2020 conference, the IMPA Cheese Contest and the championship cheese auction to help fund the IMPA’s scholarship program did not take place. However, Maccabee says the board was in a position to make sure scholarships were offered for the 2020-2021 academic year.

“We didn’t have the auction’s revenue stream this year, but we thought it was very important to continue to build and support the future generations of industry experts and leaders. We dug into our reserves a little bit to support this program,” Maccabee says.

This year, IMPA awarded scholarships to eight U.S. college students studying food or dairy science. The scholarship program recognizes high-achieving students and provides them with $2,000 each to support their ongoing education expenses.

The 2020 recipients include: Jonathan Brumley, a sophomore at the University of Idaho studying fermentation science; Amninder Singh, a master’s student at Washington State University studying food science; Jason Young, a master’s student at Utah State University studying food science; Abigail Swainston, a senior at Utah State University studying food science; Tsz Wun Koon (“Natalie”), a junior at Brigham Young University (BYU) studying food science; Eliza Brock, a master’s student at BYU studying food science; Sophia Linnemann, a junior at South Dakota State University studying dairy manufacturing and food safety; and Joey Otta, a sophomore at South Dakota State University studying dairy manufacturing.

All the work of the IMPA is done by a volunteer board made up of processors in the state. At least 80% of the milk processed in Idaho is represented on the board, Maccabee says.

“Everything we do is on a pre-competitive basis. We compete for milk, people and sometimes our products compete, but at the same time — like everything in the dairy industry, both at the producer and the processor level — there are so many things that we can work together on for the overall benefit of the industry.”

On behalf of the association, Maccabee says he is currently participating in Idaho Gov. Brad Little’s task force for work on the COVID-19 testing strategy and the safe reopening of the economy. He also is participating in a forum called the Adaptive Recovery Collaborative, an initiative of St. Luke’s working with industry and community leaders to support safe healthcare and safe business operations during the pandemic.

“Obviously there have been ongoing questions around PPE (personal protective equipment), around procedures at plant level and enhanced sanitation processes at plant level — and it’s in everyone’s interest to share best practices at the moment,” Maccabee says. “There’s nothing to be gained from any one of the processors in Idaho being down. It’s a great example of a pre-competitive situation that we can cooperate on for the good of everybody.”

In addition, IMPA is inviting suppliers, customers and other friends of the industry to help the association continue to support and grow the industry in Idaho and Utah by becoming an associate member of IMPA for 2020. The cost of an IMPA annual associate membership is $500 and can be paid by logging on to www.impa.us.

“We appreciate everyone’s support more than ever, and we look forward to seeing everyone back at Sun Valley Idaho, in 2021. We’ll make sure it’s the biggest and best conference ever,” he adds. “In the meantime, to our members, we applaud you and wish you well in your essential work, in persevering and supporting our industry through the challenges of COVID-19 and in continuing to fulfill our collective obligation of feeding and nourishing a nation and the world.”

CMN



Montchevre rolls out new flavor, invites consumers to ‘Try It with a Little Goat’

LINCOLNSHIRE, Ill. — The Montchevre brand is well-known for its fresh goat cheese, with 13 different flavored varieties in addition to its popular Plain Fresh and Original Crumbles.

This spring, the Montchevre brand launched its newest flavor, Blueberry Lemon. The award-winning flavor puts a “tangy twist” on the popular Blueberry Vanilla flavor, says Jenny Englert, marketing manager-retail deli, Saputo Cheese USA Inc.

“Hand-rolled in wild blueberries and infused with lemon zest, this fresh goat cheese is perfect for snacking, picnics and cheese boards all summer long,” she says.

The Blueberry Lemon flavor originally was developed for and sold within the foodservice channel. After the flavor won first place at the 2019 World Dairy Expo Championship Dairy Product Contest, Montchevre decided to bring the flavor into retail and give consumers the opportunity to enjoy it at home.

“Despite its summer seasonal relevance with its crisp citrus and fresh berry flavor, it’s likely to quickly become an everyday favorite, just like our Blueberry Vanilla fresh goat cheese log, which has consistently been one of the three most popular flavors with consumers for years,” Englert says.

The Montchevre brand originated more than 30 years ago, when Montchevre goat cheese was first produced in a small 4,000-square-foot Cheddar plant in Preston, Wisconsin. As demand for goat cheese has grown throughout the decades, Montchevre greatly expanded its reach and capacity at its current facility in Wisconsin. Now owned by Saputo Inc., Montchevre has become the leading brand of goat cheese in the United States.

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10-year global ag outlook weighs impacts of trade pacts, COVID-19

July 24, 2020

BRUSSELS, Belgium — The current global COVID-19 pandemic is causing unprecedented uncertainties in global food supply chains, with potential bottlenecks in labor markets, input industries, agriculture production, food processing, transport and logistics as well as shifts in demand for food and food services, according to a 10-year agricultural outlook recently published by the Organization for Economic Cooperation and Development (OECD) and the United Nation’s Food and Agriculture Organization (FAO).

The joint OECD-FAO Agricultural Outlook 2020-2029 report finds that over the next 10 years, supply growth is going to outpace demand growth, causing prices of most commodities to remain at or below their current levels. Fluctuations in the driving factors of supply and demand could lead to strong price variations around this baseline. At the same time, a decrease in disposable incomes in low-income countries and households caused by COVID-19 is expected to depress demand in the early years of this outlook and could further undermine food security, the report says.

The report also notes open and transparent international markets will be increasingly important for food security.

“A well-functioning, predictable international trade system can help ensure global food security and allow producers in exporting countries to thrive,” says OECD Secretary-General Angel Gurría. “Experience has shown that trade restrictions are no recipe for food security.”

In the report’s chapter on dairy, it notes world milk production (all milks combined) grew by 1.3% in 2019. World milk production is projected to grow at 1.6% per anum over the projection period, faster than most other main agricultural commodities.

The share of fresh dairy products in world consumption is expected to increase over the coming decade due to strong demand growth in India, Pakistan and Africa, driven by income and population growth. World per capita consumption of fresh dairy products is projected to increase by 1% per anum over the coming decade.

In Europe and North America, overall per capita demand for fresh dairy products is stable to declining, but the composition of demand has been shifting over the last several years toward dairy fat such as full-fat fluid milk and cream. The report notes consumers may be influenced by recent studies that have shed a more positive light on the health benefits of dairy fat consumption. The shift also may reflect increasing consumer preference for less processed foods.

The largest percentage of total cheese consumption occurs in Europe and North America, where per capita consumption is expected to increase. Consumption of cheese also will increase where it traditionally has not been part of the national diet, such as in Southeast Asian countries. The dominant use of skim and whole milk powders will continue to be in the manufacturing sector, notably in confectionery, infant formula and bakery products.

The report notes while some regions such as India and Pakistan are self-sufficient, total dairy consumption in Africa, Southeast Asian countries and the Middle East and North Africa is expected to grow faster than production, leading to an increase in dairy imports.

Approximately 8% of world milk production is traded internationally. The three major exporters of dairy products in the base period are the European Union (EU), New Zealand and the United States. These three countries are projected to jointly account for around 65% of cheese, 68% of whole milk powder, 76% of butter and 77% of skim milk powder exports in 2029.

The EU will continue to be the main world cheese exporter, followed by the United States and New Zealand. It is projected that the EU’s share in world cheese exports will be around 44% by 2029, sustained by increased cheese exports to Canada via the CETA agreement and to Japan following the ratification of the bilateral trade agreement in 2019. The United Kingdom, the Russian Federation, Japan, the European Union and Saudi Arabia are projected to be the top five cheese importers in 2029. These countries often also are exporters of cheese, and international trade is expected to increase the choice of cheeses for consumers.

Imports are spread more widely across the countries, with the dominant destinations for all dairy products being the Middle East and North Africa, developed countries, Southeast Asia and China. China is expected to continue to be the world’s major dairy importer, particularly for whole milk powder. Developed countries import a high level of cheese and butter, around 54% and 39%, respectively, of world imports in 2017-2019. These percentages are expected to decline slightly by 2029.

The report says the COVID-19 pandemic has affected daily life worldwide. While it is assumed that food chains are less affected by the constraints implemented to limit its spread, significant disruption of supply chains could occur for perishable products such as milk and dairy products. Additionally, some dairy products like cheese often are consumed away from home, such as in burgers and pizzas, and may see a reduction in consumption levels. The effects over the coming decade are more uncertain as these depend on how long the constraints are kept in place, how fast the world economy will recover and whether there will be any structural changes in global interactions.

In recent years, the role of plant-based dairy substitutes in the fluid milk sector has increased in many regions, though conflicting views exist regarding their environmental impact and relative health benefits, the report notes. As a result, there is uncertainty on the long-term impact these will have on dairy demand.

Changes to or the creation of trade agreements would affect dairy demand and trade flows, the report says. For example, large amounts of cheese and other dairy products are traded between the EU and the United Kingdom, and the continuation of this will depend on the determined trade relations following Brexit, while the U.S.-Mexico-Canada Trade Agreement (USMCA) is expected to influence dairy trade flows in North America. The Russian Federation’s embargo on several dairy products form major exporting countries is expected to end in 2020 and imports are expected to increase slightly, although they are not likely to reach the pre-ban levels.

Dairy trade flows could be substantially altered by changes in the trade environment, the report adds. To date, India and Pakistan, the big dairy consuming countries, have not integrated the international dairy market as domestic production is projected to expand fast to respond to growing internal demand.

CMN


Historic Wood River building at Burnett Dairy lost in fire

July 24, 2020

By Trina La Susa

GRANTSBURG, Wis. — Burnett County Dispatch received a call July 20 at approximately 10:30 p.m. CDT about a structure fire at Burnett Dairy Cooperative in Grantsburg, Wisconsin. All employees were safely evacuated, and there were no injuries. The fire appears to have started in the boiler room and is still under investigation, according to officials.

“The damage was mostly isolated to the boiler area. Right now we still do not know the cause of the fire, and the insurance adjuster said he did not believe it was related to the boiler, but it was in that area,” says Stephanie Miller, marketing manager, Burnett Dairy.

“We do not know the cause yet, but that room was basically our historic Wood River Creamery building that we’ve had around since 1896, so our most historical section of the dairy had to get demolished in order to put the fire out. That part of our building is gone.”

Local news reports say the fire continued overnight until Tuesday morning and Wisconsin’s State Highway 70 was temporarily closed to traffic.

“This was a tremendous effort by all departments involved,” Burnett County Sheriff Tracy Finch and Grantsburg Fire Chief Cory Barnette say in a statement. “A potentially very dangerous situation was mitigated by a quick response.”

The following 13 fire departments responded: Grantsburg Fire, Siren Fire, Webster Fire, Frederic Fire, Cushing Fire, St. Croix Hertel Fire, Pine City Fire, Rush City Fire, Danbury Fire, Scott Fire, Webb Lake Fire, Shell Lake Fire and Spooner Fire. Jackson Fire provided coverage while the others tended to the fire.

North Ambulance, the Burnett County Sheriff’s Office, Frederic Police Department, and Burnett County Emergency Management also responded.

Miller says about 90% of Burnett Dairy’s Grantsburg facility is still there, and it is slowly regaining power. As of the morning of July 23, power was back to more than 50% and more generators were coming in. She notes that the cooler is still running.

“We did have cheese inventory and no cheese was ruined, but we did have to dump the milk that was in the silos, which is about a day and a half worth of milk,” Miller says. “We’re still taking all of our cooperative’s milk, just diverting it to other places. We’ve had a lot of community members and about eight different community dairies reach out to us to take our milk, so our milk currently has a place to go.

“We don’t know yet when we actually can start making new cheese. We can shred the cheese we have to make individual products, but right now we are not making cheese,” Miller adds. “I still don’t know the timeline for when we’ll be up and running to make cheese, but we’re slowly getting power in there and we are optimistic it won’t be too long.

Burnett Dairy’s Grantsburg location is still providing customers with shipping and pickup services for cheese orders. Its offices, cheese store, ag services and general store are open for business.

Burnett Dairy will rebuild the area affected by the fire, but the timeline to start construction and building plans has not been decided, Miller says.

CMN


June U.S. milk production is up slightly from one year ago

July 24, 2020

WASHINGTON — Milk production in the 24 major milk-producing states in June totaled 17.43 billion pounds, up 0.5% from June 2019, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). For the entire United States, June milk production was estimated at 18.31 billion pounds, also up 0.5% from June 2019. (All figures are rounded. Please see CMN’s Milk Production chart.)

May’s revised production for the 24 major states totaled 18.05 billion pounds, an increase of 93 million pounds or 0.5% from last month’s preliminary production estimate.

June production per cow in the 24 major states averaged 1,974 pounds, unchanged from June 2019 but down 69 pounds from a month earlier. For the entire United States, production per cow in June is estimated at 1,958 pounds, 4 pounds higher than June of last year but up 67 pounds lower than a month earlier.

NASS reports the number of milk cows on farms in the 24 major states was 8.83 million head in June, up 43,000 head from June 2019 but down 9,000 head from the previous month. In the entire United States, there were an estimated 9.35 million milk cows in June, 23,000 cows more than a year earlier but 10,000 cows less than May.

California led the nation’s milk production in June with 3.31 billion pounds of milk, up 1.0% from a year earlier. Wisconsin followed with 2.55 billion pounds of milk produced in June, down 1.4% from June 2019.

CMN


Plant-based alternatives look to improve taste, functionality

July 17, 2020

By Rena Archwamety

MADISON, Wis. — As plant-based milk and yogurt alternatives have grown in variety and into mainstream markets, non-dairy cheese alternatives remained in mostly natural markets and purchased by those who could not or chose not to consume dairy products. That is changing now, thanks to a range of new products and innovative techniques from both newer specialty brands and established dairy companies.

“If you went back 3-5 years ago, what you saw was broad distribution but really a heavy core of vegan consumers. For traditional consumers, the product was very different in taste and texture,” says Justin Lambeth, CEO of Treeline Cheese.

In the past couple of years the product quality of plant-based cheeses has dramatically increased, Lambeth says. Furthermore, there are more “flexitarian” consumers — those who are not vegan but are incorporating more plant-based foods into their diet, or live in households where some members eat meat and dairy and some don’t — who are interested in these products.

Traditional cheese and dairy companies also are now wading into the plant-based sector, serving customers who have expanded their offerings to incorporate non-meat and non-dairy alternatives.

Whitehall Specialties, which provides processed and analog cheese to customers across ingredient, foodservice and consumer channels, launched its NewFields plant-based cheese division in March 2019 and has just introduced its new Premier Line that includes Cheddar, Mozzarella, American, shredded Parmesan, grated Parmesan and Blue cheese-style flavors.

“We are innovators in formulating processed cheese. As innovators in formulating, that spurs innovation in plant-based,” says Steve Snyder, president and CEO, Whitehall Specialties. “We’re serving the same audience — people who love cheese — but also those with a passion for a vegan or plant-based lifestyle. The challenge is good taste and good function. We can take our technical expertise and apply it against that problem.”

Plant-based offerings are growing, with 58% of the top 100 foodservice chains in the United States offering plant-based or vegan menu options, according to the 2019 Good Food Institute Restaurant Scorecard.

Snyder says Whitehall’s NewFields division is partnering with new customers as well as many of its existing clients, as there has been a surprising overlap in those who are interested in both dairy and non-dairy options.

“For example, a foodservice customer who might want to serve a meat analog like Beyond or Impossible Burger wants to have a non-animal cheese that they can offer in a restaurant venue,” Snyder says. “Pizza customers might have a plant-based, vegan pizza along with regular conventional pizzas. Even in a salad bar situation, they might want to have shreds so someone who is truly vegan and interested in most of the salad bar, but wasn’t able to enjoy cheese, now will have plant-based options.”

Vevan Foods, a newly-launched division of Schuman Cheese that caters to the plant-based segment, is aiming to make this category more approachable and accessible to everyone interested in these products.

“The plant-based segment is booming,” says Keith Schuman, business unit lead, Vevan Foods. “We have seen a steady rise in consumers eating plant-based diets for years now, whether for environmental or ethical reasons, and those numbers are playing out on retail shelves, where consumers can find more and more options.”

Particularly notable is how accessible plant-based items have become among mainstream grocers; they no longer are a category reserved for specialty stores, Schuman adds. He also points to the diverse demographics of those eating plant-based foods.

“While the audience skews a bit toward millennials, people of all ages eat plant-based foods for a wide range of reasons, whether they have dietary restrictions, such as lactose intolerance, environmental concerns or prefer animal-free protein,” he says. “When it comes to dairy-free products, and specifically cheese, our primary research shows they’re looking for plant-based options that are familiar: authentic flavor, the appealing texture of dairy cheese and a melt like dairy cheese.”

• Cultured creations

For eight years Treeline Cheese has been making plant-based products, and its portfolio includes Classic and Cracked Pepper aged wheels and a soft French-style spread in Herb Garlic, Scallion, Sea Salt & Pepper and Chipotle-Serrano flavors. Earlier this month, the company announced a new line of cream cheeses made from cultured cashew nuts and other natural ingredients, available in Plain, Chive & Onion and Strawberry varieties.

Treeline sells mostly to retail consumers, with about 30% of this business in the natural channel and 70% in traditional grocery retailers, as well as directly from its website. It also provides a small amount for foodservice, either to restaurants or to meal kit companies.

There are two main types of non-dairy cheeses on the market: those with a coconut oil base and those with a cultured nut base, Lambeth notes.

“Coconut oil-based products are easier to make, less expensive and have really good melt and stretch. Those have been around 10 years or more,” Lambeth says. “The downside is one, the taste tradeoff — they don’t have a dairy taste — and two, they’re high in saturated fat.”

Newer brands like Treeline are typically made with nut bases rather than coconut oil, Lambeth says.

“We make ours with cashews, and also we culture the product using acidophilus. It’s a richer product, and also a cleaner nutritional label,” he says. “The two pieces of feedback we consistently get, one is around the flavor. It’s a surprisingly good flavor, due to the simple ingredients and culture, how we make the product. The other thing customers point out is the simple ingredient statement. Take our Plain Cream Cheese — it contains cashews, water, lemon juice, salt, pepper and acidophilus.”

Miyoko’s Kitchen started out selling vegan butter and cheeses in a small storefront in Fairfax, California, in 2014. The company, which now does business as Miyoko’s Creamery, now has plant-based products sold in 2,600 stores across the country.

“We went from 2-4 people in a cheese shop to a company that now employs 140 people. We own a manufacturing facility in Petaluma and even have co-packers helping us make other products,” says Neil Cohen, vice president, Miyoko’s Creamery. “Over the last four years, we have doubled production and doubled sales every year.”

Like Treeline Cheese, Miyoko’s also specializes in cultured specialty products. It offers Organic Cultured Vegan Cheese Wheels in standard and limited edition varieties, including Sundried Tomato Garlic, Double Cream Chive, Herbes de Provence, Sharp and Smoked Farmhouse, Winter Truffle and Black Ash. Other products include Vegan Butter, Vegan Mozz, Vegan Cream Cheese and Vegan Roadhouse spread.

“We’re using a traditional technique, making milk with nuts, oats or whatever plant we choose, and then culturing it, as you would butter or cheese,” Cohen says. “The trick is knowing what cultures will do what with different milks. It’s not like you can take a cow dairy culture or enzyme and make it work. It took years and years of trial and error and experimentation for Miyoko (Schinner, CEO and founder) to figure it out.”

Cohen says that in the past, vegan cheese alternatives got a bad rap as they were so different from the flavors and textures of traditional dairy cheeses.

“Vegans would say, ‘This reminds us of cheese,’ but omnivores and flexitarians wouldn’t eat it,” he says. “We want to change that perception. If you were to taste our butter, cheese wheels or Roadhouse pub cheese, you would go like, ‘No way is this vegan!’”

• New divisions

Schuman Cheese launched Vevan Foods in March 2020. Its initial retail offerings include shred and slice formats in three flavors: Ched, Mozza and P’Jack. Its products are available to foodservice, and Vevan this summer also is adding regional and national retailers, from major supermarket chains to club stores to local grocers.

Schuman says the inspiration for Vevan came from a realization that there is an entire segment of consumers who have chosen plant-based diets and are settling for products that don’t taste or perform the way cheese products should.

“Vevan’s biggest point of differentiation is the care we’ve put into creating an experience that allows plant-based consumers to rediscover familiar textures and flavors they’ve been missing,” Schuman says. “Each recipe has been perfected by artisan dairy cheesemakers who have decades of experience crafting award-winning cheese. They know how cheese should taste, what the texture should be when you bite into it and how it should function, especially when it comes to a perfect creamy melt and a nice stringy stretch.”

Schuman says the response so far to Vevan products has been “incredible.”

“We’ve had buyers tell us they’d easily mistake Vevan for behind-the-glass slicing cheese, and our social platforms are getting flooded with comments from consumers thanking us for creating a plant-based option that tastes so good,” he says. “We get Instagram videos daily from consumers showing us @vevan.foods how they’re using and enjoying Vevan with their families and friends.”

Whitehall Specialties’ NewFields division has just launched more than 30 SKUs in its first full line of plant-based cheese options. These new products are certified vegan, non-GMO, gluten free and were created with minimal ingredients and natural integrity in mind, resulting in cleaner labels. This Premier Line of plant-based cheese ingredients and products was developed for customers across all channels with a focus on foodservice and industrial customers, including cheese and dairy manufacturers.

Snyder notes that Whitehall Specialties was one of the large-scale plant-based cheese industries’ early entrants with its soy protein plant-based cheese.

“As the category grew, we recognized we needed to dramatically increase our focus and investment in talent and equipment to respond to the demand,” he says. “We are becoming experts at managing plant-based starches, water and other flavors, colors and ingredients in a plant-based food matrix. We have a long history of optimizing functional properties such as stretch and melt, along with color and taste, to make great-tasting analog cheeses.”

NewFields now uses a range of different plant-based protein bases for its cheese alternative depending on customers’ specifications, and offers a full range of formats from blocks, shreds and slices to grated, crumbles and chunks. The company uses allergen control and hygienic zoning to ensure its plant-based products are completely isolated from dairy.

At the end of the day, people want delicious options, and that’s most important, Snyder says.

“I think some of the real innovations are being able to break into Parmesan and the hard cheese segment. I think our Cheddar is outstanding,” he says. “Our Blue cheese is surprisingly good. It’s a really hard thing to mimic, particularly in a dressing application. It’s just fabulous, to a point where I would choose it on its own right.”

Snyder emphasizes that NewFields is not replacing cheese, but rather adding new options beyond cheese for those who have that preference.

“We’re fans of cheese,” he says. “We’re growing the market for people who could enjoy all the characteristics of cheese. If you like cheese, keep eating natural cheese. But if you have other drivers and preferences, we feel it’s important to provide options using our innovations.”

Schuman says Vevan’s ability to market to a whole new audience is very liberating. He adds that an interesting nuance of marketing Vevan is the obvious dichotomy of a dairy company making plant-based cheese.

“We deeply respect the work our partner dairy farmers do on the dairy side of our business. That means we don’t shy away from our dairy heritage; conversely, we embrace it,” Schuman says. “Our core demographic is consumers who love and miss cheese, who are likely flexitarian and somewhat fluid in their food choices. Our marketing leads with Vevan’s exceptional flavor and performance and celebrates the contributions artisan cheesemakers are making to the brand.”

CMN


CME cheese hits record-high $3 then drops as volatility persists

July 17, 2020

By Alyssa Mitchell

MADISON, Wis. — Price swings for cheese at the Chicago Mercantile Exchange (CME) continued this week as Cheddar blocks reached a new record high of $3 per pound Monday before dropping 34 cents this week to settle at $2.66 per pound today.

Dairy market analysts took the run-up in stride, as CME block Cheddar prices have been hitting new highs since summer began.
Still, hitting $3 is “definitely a ‘wow’ moment, especially when considering it happened just 61 sessions after the market traded at $1 per pound,” says Phil Plourd, president of Blimling and Associates, Madison, Wisconsin.

“It would be surprising to see pricing persist up here, but demand strength has consistently surprised for weeks,” he adds.

“Midwestern cheese producers continue to relay demand is strong,” says USDA’s Dairy Market News. “Curd producers say buyers are very active. Barrel cheesemakers relay similar notes and say supplies are moving.”

CME Cheddar barrels settled at $2.43 per pound today.

Brian Fletcher, vice president of Rice Dairy, Chicago, notes over the course of the last several weeks, the block market has been very tight.

“I do not believe the market has long-term support in the $3 or even $2.50 area,” Fletcher says. “I think we are in a period of time where supply has contracted and domestic demand from retail and subcategories of foodservice have preformed very well. If U.S. prices maintain these price tiers, relative to the severely discounted global market, about 7% of U.S. cheese production (that is historically exported) will need to find a home domestically.”

Fletcher adds that domestic demand resisting the $3 price point is the lead reason why the market pulled back from that level.
“I wouldn’t be surprised to see continued downside, but I would imagine those who are pushing back at these levels will have to resurface sooner than later and likely sustain above $2 or more for the next couple of months,” he says.
The block/barrel price spread also has widened to a record gap in recent weeks.

“Each time we think spreads can’t get any wider, they do,” says Sara Dorland, managing partner at Ceres Dairy Risk Management, Seattle. “Moreso than the difference between blocks and barrels — something that can be explained by supply and demand, and likely a slowdown in exports that has worked to increase barrel cheese production — the difference between Class III and IV milk has more implications for markets and dairy producers. Negative producer pay price differentials and depooling could last for months.”

Plourd says the market likely is looking at a shortage of fresh 40-pound blocks.

“I get the sense that people are making as many as possible, but demand has been tremendous,” he says. “Demand for barrels has been okay, but not quite as robust. I’m guessing that anyone that can switch from making barrels to blocks — or can switch to using barrels instead of blocks — has already done so. That’s a long way of saying I think the wide spread can persist.”

Fletcher says the record block/barrel spread can benefit cheese processors who buy Class III milk and manufacture blocks, or cheese that is priced off blocks, which is the majority of the processing community.

Conversely, the spead can hurt processors who buy Class III and sell product off a barrel price, he adds.

“I think a prolonged wide price spread should incentivize investment capacity into manufacturing of blocks and/or cheese production that is priced off blocks,” he says.

Fletcher notes consumer behavior has been changing at record rates during the COVID-19 pandemic, and supply movements also have been extremely volatile.

“In periods of extreme uncertainty, I try to simplify as much as possible. Key things I am focused on are global dairy prices and how the U.S. compares relative to the rest of the world,” he says.

He notes the reason to gauge this is to evaluate U.S. export potential as well as cheese prices relative to other dairy prices.

“At this point, the price of cheese relative to nonfat dry milk and butter is a record wide,” Fletcher says. “Lastly, I would stay tuned to see whether or not (USDA’s Farmers to Families) Food Box Program is extended for the September-October delivery period, how much money is allocated toward those months and how much dairy is in the extension.”

Dorland agrees, noting the injection of cash from USDA by that program as well as trade mitigation and Section 32 purchases could be distorting the strength of the cheese market.

“Cheese could see prolonged periods of higher prices as demand continues to expand,” she says.

“Foodservice and retail demand will be key,” Dorland adds. “While consumers are comfortable dining out and moving around in the summer months — what happens when all of this moves indoors this fall?”

Plourd agrees foodservice demand is critical, especially as states roll back operating rules in areas with more COVID-19 cases.

“Are we going to see cheese demand from restaurants begin to fade in the weeks ahead? Seems possible,” he says.

CMN


DGAC releases final Dietary Guidelines scientific report

July 17, 2020

WASHINGTON — USDA this week released the 2020 Dietary Guidelines Advisory Committee’s (DGAC) final scientific report, an objective review of the latest available science on specific nutrition topics. The report’s evidence-based findings will inform USDA and the U.S. Department of Health and Human Services (HHS) as they co-develop the 2020-2025 Dietary Guidelines for Americans.

“Science-based dietary guidance is critical to ensuring a healthy future for America,” says Brandon Lipps, USDA food, nutrition and consumer services deputy under secretary. “USDA greatly appreciates the high-quality work done by this committee comprised of our nation’s leading scientists and dietary experts. We look forward to thoroughly reviewing the report and leveraging their scientific advice as we partner with HHS to develop the next edition of the Dietary Guidelines for Americans.”

USDA and HHS are accepting written public comments on the committee’s final report through Aug. 13. The public also will have an opportunity to provide oral comments on the scientific report to the departments at a public meeting Aug. 11.

The International Dairy Foods Association (IDFA) and National Milk Producers Federation (NMPF) say they are pleased that the DGAC’s final report reaffirms dairy’s crucial role in a nutritious diet.

“The U.S. dairy industry is pleased to see that the science has once again affirmed the unmatched health and nutrition benefits that dairy products provide to people of all ages,” IDFA says.

The DGAC scientific report highlighted new evidence strengthening dairy’s role in reducing risk of hip fracture for adults. The experts also for the first time provided new clarity for families with children from birth to 24 months, recommending small amounts of some foods including dairy foods, alongside fruits and vegetables, nut and seed products, and whole grain products, beginning at 6-12 months and continuing thereafter. For toddlers, dairy foods are particularly important for the vitamins and nutrients they provide, IDFA says.

“This recommendation could not be clearer, demonstrating what the American Academy of Pediatrics has stressed for years — that dairy plays a critical role in the diet of children to bolster long-term health,” IDFA says.

The organization also notes that once again, the committee found no linkage between consumption of dairy foods and incidences of breast cancer, which “should put an end to a longstanding disinformation campaign to alarm and confuse the public.” The committee also said there is no association between a mother’s consumption of dairy and the development of asthma in children.

Jim Mulhern, president and CEO of NMPF, notes the committee restated what consumers already know — that regular dairy consumption offers essential nutrition that nourishes people throughout their lives.

“Across different types of diets and throughout all stages of life, dairy products provide the nutrients people need to be healthy,” Mulhern says.

However, the organizations also expressed concern that the committee failed to recognize newer, broader science that shows the benefits of dairy foods at all fat levels.

“We repeatedly called on the committee to take a fresh look at multiple studies that show beneficial or neutral effects of dairy on chronic disease risk at all fat levels,” Mulhern says. “Unfortunately, the DGAC report does not reflect this newer science.”

IDFA says it also is disappointed that the committee’s report did not include relevant information on scientific studies that show the benefits of dairy at each fat level.

“There is robust evidence to support the inclusion of dairy foods at all fat levels in recommended food patterns. IDFA encourages USDA and HHS to remedy this oversight in the final guidelines to be released by the end of the year,” IDFA says.

Meanwhile, the American Dairy Coalition (ADC) earlier this week sent a letter to USDA and HHS leaders noting that despite an abundance of science that demonstrates that full-fat dairy products reduce chronic disease in children and adults and promote learning readiness in children, the guidelines continue to set caps on saturated fats, effectively banning whole milk from day cares and school nutrition programs.

ADC’s letter encourages HHS Secretary Alex Azar and Agriculture Secretary Sonny Perdue to intervene and delay the publication of the guidelines so they can be updated to include the most recent scientific evidence on the health benefits of saturated fats.
Furthermore, ADC requests USDA and HHS review and address the process by which the Dietary Guidelines are written.

CMN


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Today's Cheese Spot Trading
Aug. 3, 2020


Barrels: $2.0200 (-21 1/2)
Blocks: $2.0775 (-7 1/2)


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


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

Guest Columnist

Conflicting fundamentals at play through year end will drive prices

Lucas Fuess, HighGround

Dairy Also this week: “Trade is something to Cheer about” by Jim Mulhern, and Virtual events provide opportunity for education, spur continued demand” by Laura Werlin

Click here for our columnist archives




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