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Stakeholders react to election, hopeful for farm bill progress

Nov. 9, 2018

WASHINGTON — With the midterm elections largely in the review mirror, dairy stakeholders this week expressed eagerness to work with the new Congress in 2019 and are optimistic that a new farm bill will be passed yet this year in the lame duck session.

Following Tuesday’s election, some race results are still outstanding, but it is clear that Democrats took the majority in the House of Representatives, while Republicans gained additional seats in the Senate but still remain shy of the 60 seats needed to pass legislation without bipartisanship.

“By and large, nothing about the election particularly changed my legislative outlook from what it was before,” says Paul Bleiberg, vice president of government relations for the National Milk Producers Federation (NMPF).

The National Restaurant Association notes in addition to the fight for control over the Congress, Republicans and Democrats also battled for several governorships and state legislatures. Voters also weighed in on state ballot referendums that could have an impact on the restaurant industry and how it conducts business. Those initiatives included minimum-wage increases and the introduction of gross receipts taxes.

“Though a divided government can often lead to substantial levels of gridlock, the association’s policy leaders — who consistently work in a bipartisan and bicameral fashion — said they are optimistic there will be opportunities to advance the industry’s priorities,” National Restaurant Association says. “For example, the association is hopeful it can work with the Senate and House on key issues, such as infrastructure, immigration, workforce development and criminal justice reform.”

• Farm bill

Bleiberg and other stakeholders anticipate the leadership of the Senate and House agriculture committees to remain largely unchanged, with the House Ag Committee chairman role likely to be assumed by current Ranking Member Collin Peterson, D-Minn. Peterson was chairman when Democrats last controlled the House.

“The election results seem to have breathed new life into the farm bill negotiations,” says J. David Carlin, senior vice president of legislative affairs and economic policy for the International Dairy Foods Association (IDFA). “While there are still many issues to be worked out in a fairly short period of time, it sounds like all of the key negotiators are working hard to come up with a bill that can pass both chambers before the end of the year.”

News reports this week say Peterson has indicated that farm bill negotiators are getting “relatively close” to an agreement for a final measure that Congress can pass during the lame duck session.

Uncertainly lies mostly within the nutrition title, with lawmakers split on potential new work requirements for Supplemental Nutrition Assistance Program recipients.

“We could have a very fast (bill) without the work rules, but we want the work rules in,” President Donald Trump said Wednesday during a post-election press conference.

Randy Dwyer, director of advocacy and political affairs for the American Farm Bureau Federation (AFBF), says AFBF is looking forward to working with the new Congress, noting a “green wave” of largely pro-agriculture lawmakers is anticipated.

“In the lame duck, we would like very much to see our farm bill conferenced as well as passed and signed. We don’t need to wait for the new Congress to get that taken care of,” Dwyer says.

“We look forward to working with the new Congress to strengthen agriculture by fixing the ag labor problems we face, boosting our farm economy via export growth and reducing the burden and cost of federal regulations,” adds Zippy Duvall, president, AFBF. “It is clear that rural voters turned out for this election, and we are proud of them. We stand ready to work with this wave of elected leaders who will stand up for farmers and ranchers and our ability to feed our nation.”

• Trade

Meanwhile, stakeholders expect finalization of the U.S.-Mexico-Canada Agreement (USMCA) and other trade developments to be pushed to 2019.

“Unless something extraordinary happens, they’re very unlikely to rush through (USMCA) in the lame duck and will do it in 2019,” says Dave Salmonsen, trade policy specialist, AFBF.

He notes a report on the agreement is expected in March. Final text has to be sent to Congress after that, and then the clock starts on congressional consideration.

“It’s likely to be implemented in spring or summer,” Salmonsen says. “Now that Democrats are in the majority, they may ask for concessions in the agreement.”

Meanwhile, tariff retaliation continues from China, Mexico and Canada.

“I don’t know that Congress will do anything legislatively, but they likely will be reflecting and amplifying concerns from farmers,” Salmonsen says.

President Trump last week asked key members of his administration to begin writing potential pact terms for a possible trade deal with China. Trump’s request comes after a call with China’s President Xi Jinping last week, which both sides called “constructive discussions on North Korea and trade,” according to news reports.

CMN


USDA, dairy farmers mark start of California federal milk order

Nov. 9, 2018

WASHINGTON — USDA Under Secretary Greg Ibach joined dairy farmers in Tulare County, California, on Wednesday to celebrate implementation of the new California federal milk marketing order (FMMO) that went into effect Nov. 1.

“America’s dairy farmers face many challenges at home and abroad, so working together is more important than ever,” Ibach says. “This new federal milk marketing order decreases regulation for processors, moving industry into a less regulatory system, and also helps put California’s producers on equal footing with producers across the country.”

California represents more than 18 percent of all U.S. milk production, and with this new order more than 80 percent of the total U.S. milk supply will be covered by the 11 orders overseen by USDA’s Agricultural Marketing Service (AMS).

Federal milk marketing orders are voluntary, industry-initiated, industry-driven marketing tools intended to prevent damaging price competition inherent in the marketing of highly perishable commodities. FMMOs establish the terms of trade between the farmer and the first buyer of milk by enforcing timely payments from milk processors to milk producers and developing minimum milk prices based on market values with respect to supply and demand conditions.

The implementation of the California FMMO concludes a rulemaking process that began in 2015 when three California dairy farmer cooperatives — California Dairies Inc., Land O’Lakes Inc. and Dairy Farmers of America Inc. — jointly petitioned USDA to establish a federal marketing order for the state. A 40-day formal rulemaking hearing was held in the fall of 2015 to collect evidence and testimony and the resulting hearing record consisted of more than 8,000 pages of hearing transcripts, 200 exhibits and 30 post-hearing briefs.

Based on this evidentiary record, USDA published a recommended decision proposing the establishment of a California FMMO in February 2017. A final rule announcing industry approval was published June 7, 2018.

The entire record of the rulemaking is available at www.ams.usda.gov/caorder.

CMN


Judge dismisses central claim in Parmesan labeling lawsuits

Nov. 9, 2018

CHICAGO — A federal judge last week dismissed the central claim in lawsuits accusing five food producers and retailers of deceiving consumers by using “100% Grated Parmesan Cheese” labels to describe products that contained cellulose, an anti-clumping agent.

U.S. District Judge for the North District of Illinois Gary Feinerman found a lack of proof that the labels would mislead reasonable consumers into thinking the products were 100 percent cheese.

The judge allowed some state consumer protection claims to continue in part against Albertsons Cos., Kraft Heinz Co. and Walmart Inc.

He dismissed all claims against two other retailers, Publix Super Markets Inc. and Target Corp.

The complaints allege violations of various state consumer protection statutes, breaches of express and implied warranty, and unjust enrichment stemming from two alleged misrepresentations: the representation on the containers’ front labels that the products are “100% Grated Parmesan Cheese,” when in fact they contain non-cheese ingredients; and the representation on the ingredient lists that cellulose is used to prevent caking, when in fact it could be used as a filler.

The “100%” claims are dismissed, while the anticaking claims are dismissed in large part, the judge says.

In his conclusion, Feinerman writes: “The 100% claims are dismissed in their entirety, as are all anticaking claims against Target/ICCO and all anticaking claims under Alabama law against Albertsons.”

He notes anticaking claims under select state laws are dismissed as well.

The anticaking claims under Connecticut, Michigan, and New York express warranty law are dismissed, as are the anticaking claims against Kraft and SuperValu under Illinois express warranty law. The anticaking claims against SuperValu under Alabama and Illinois implied warranty law are also dismissed, he writes.

Feinerman says plaintiffs may proceed on their anticaking claims against Kraft under select state laws and against Albertsons/SuperValu under Illinois state law. They may proceed with their anticaking express warranty claims against Kraft under Alabama, California, Florida and Minnesota law; against Albertsons under Illinois law; against SuperValu under Alabama law; and against Wal-Mart/ICCO under Alabama, California, Florida, Minnesota, and New Jersey law. They may proceed with their anticaking implied warranty claims against Kraft under California, Connecticut, Michigan, and Minnesota law; against Albertsons under Illinois law; and against Wal-Mart/ICCO under Alabama, California, Florida, New Jersey, New York, and Minnesota law. Finally, Plaintiffs may proceed with their anticaking unjust enrichment claims against Kraft, Albertsons/SuperValu, and Wal-Mart/ICCO, except for the claims against Albertsons under Alabama law.

“No anticaking claims may proceed against Publix and Target, which are dismissed from this litigation,” he writes.

CMN




Award-winning Schuman Cheese aims to ‘push the boundaries of flavor'
Collaboration, expertise are keys to artisan line success

By Kate Sander

FAIRFIELD, N.J. — Schuman Cheese, a fourth-generation, family-owned business, continues to innovate and adapt to changing market needs.

The company started in 1946 as an importer of Italian cheese, expanded to different areas of the world like South America and Eastern Europe to use its expertise to make cheese abroad and, in more recent years, has invested heavily in the United States to produce specialty artisan cheese.

“As we map out our future, innovation is always at the front of our mind,” says Allison Schuman, a member of the Schuman family’s fourth generation and the company’s senior director of sales. “We pride ourselves on being nimble, and we continually challenge ourselves to be disruptive innovators for the cheese category.”

The shift to U.S. production occurred about 13 years ago, Schuman says, noting this was a pivotal point in company history.

“It has allowed us to keep tight control over the quality of what we produce, be near the production and use our creativity to innovate around cheesemaking,” she says, noting the company makes a wide variety of cheeses including Parmesan, Fontina, Blue and Alpine-style cheeses.

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As midterms approach, dairy industry eyes tariffs, farm bill

Nov. 2, 2018

WASHINGTON — Dairy and agriculture industry stakeholders continue to press for action on ongoing tariffs as well as the expired farm bill.

This week at its annual meeting in Phoenix, the National Milk Producers Federation (NMPF) asked President Donald Trump to recognize the significant economic losses milk producers are suffering because of the administration’s implementation of Section 232 and 301 tariffs. The duties have resulted in retaliatory tariffs against U.S. dairy exports, particularly by Mexico and China.

NMPF notes these tariffs continue to cause severe economic harm to U.S. dairy farmers. NMPF’s board of directors has adopted a resolution calling for aid commensurate to that damage.

“In light of the administration’s decision to establish a program to compensate farmers for the damage caused by these retaliatory tariffs, we call on the president to direct USDA to provide assistance to dairy producers at a level that reflects the damage they have caused,” NMPF says, citing estimates that show farmer losses will exceed $1 billion this year.

An initial USDA mitigation package announced in August allocated $127 million to dairy, but stakeholders say further aid is needed.

Agriculture Secretary Sonny Perdue announced this week that the Trump administration will begin a second round of mitigation package payments to dairy producers in December. USDA does not plan to change the payment amounts but could adjust them depending on the state of agriculture trade relations. Perdue says there have been no discussions of the payments continuing into 2019.

Also this week, a new analysis says the United States-Mexico-Canada Agreement (USMCA), once ratified, will provide a bump in U.S. agricultural exports — but those trade gains are overwhelmed by lost exports due to retaliatory tariffs.

The Farm Foundation, an agricultural policy institute, contracted with economists at Purdue University to estimate the impacts on U.S. agriculture from USMCA. The study contrasted USMCA with its predecessor, the North American Free Trade Agreement. The study also looked at the impact of retaliatory tariffs by Canada, Mexico and China against U.S. agricultural exports.

“The modest market access improvements in the USMCA will lead to an expansion of U.S. agricultural exports by $450 million, mostly in the dairy and poultry sectors. However, the retaliatory measures taken by Canada and Mexico, in reaction to the U.S. decision to raise tariffs on their exports of steel and aluminum, will cause U.S. agricultural exports to decline by $1.8 billion, and by $1.9 billion to these key trading partners,” the analysis says. “In today’s broader context of reactive trade retaliation from countries around the world, the United States would see a decline in agricultural exports of $7.9 billion, thus overwhelming the small positive gains from USMCA.”

It could be worse, the analysis continues.

“The USMCA may fail to be ratified. One plausible outcome of a failure to ratify the new agreement would be for the United States to withdraw from the original agreement, in which case all three countries could revert tariff rates to the so-called most favored nation (MFN) status, granted to all countries that are members of the World Trade Organization (WTO). MFN tariff levels would hit U.S. agricultural exports particularly hard. One study estimates that U.S. agricultural exports would decline by more than $9 billion, and lead to higher consumer prices for food,” the analysis says.

To download the analysis, visit www.farmfoundation.org/wp-content/uploads/2018/10/Trade-Analysis-10-31-18-Final.pdf.

Meanwhile, warning that the financial security of America’s farmers and ranchers is in jeopardy, 16 agriculture organizations including the American Farm Bureau Federation (AFBF) this week urged House and Senate agriculture leaders to complete the farm bill by the end of this year.

The 2014 Farm Bill expired Sept. 30. Both the House and Senate have passed separate versions of the legislation. Lawmakers are now working to draft a single bill for Congress to approve and send to President Trump for his signature.

“As you well know, conditions for producers across the country are daunting. Low prices, uncertain market opportunities, and the current weather challenges are all weighing heavily on the minds of our respective members,” the groups wrote in a letter to House Agriculture Committee Chairman Mike Conaway, R-Texas, and Ranking Member Collin Peterson, D-Minn., as well as Senate Agriculture Committee Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich.

The groups note the farm bill provides policies that support food safety, production agriculture, environmental quality, crop insurance, animal disease prevention, conservation, research, renewable energy and new foreign market access. In addition, without a farm bill in place, it’s difficult for farmers to secure the credit they need to plant crops, buy fuel, and repair and invest in equipment in 2019, they add.

“We appreciate each of your efforts to move this bill forward. It is our sincere hope, however, that you will be able to resolve any remaining differences so that this bill can be finalized and sent to the president for his signature before the close of the year,” the groups wrote.

CMN


Mid-Atlantic sees growth in artisan, commodity business

Nov. 2, 2018

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

By Rena Archwamety

MADISON, Wisconsin — The Mid-Atlantic states of Delaware, Maryland and New Jersey are home to a range of dairy processing activity, from artisan goat’s and sheep’s milk cheesemakers to large bottling and converting facilities owned by major cooperatives and corporations.

The number of dairy farms in these states, as in other parts of the country, continues to decline as costs rise, cities encroach and older generations retire. According to the most recent numbers from USDA, dairy cow and licensed dairy herd numbers in all three states are down compared to a year earlier. For 2017, USDA’s National Agricultural Statistics Service reported an average 30 dairy farms in Delaware, 400 in Maryland and 55 in New Jersey.

“For Delaware, and a lot of New Jersey, as urban pressures increase, farms are going to decrease,” says Jerrel Heatwole, chairman of the Dairy Farmers of America’s (DFA) Northeast Council and vice chairman/treasurer of DFA’s corporate board. “Clearly the number of farms will continue to decline as there’s urban encroachment. The more people around, the more regulatory issues you face. Farms are going to continue to get larger.”

Heatwole, who milks 65-75 cows outside Greenwood, Delaware, about 25 miles south of the state’s capital Dover, notes that his farm is in the Chesapeake Bay watershed, which adds extra regulations. Heatwole also has to go out-of-state to access suppliers and services for his dairy equipment. On the positive side, though, dairy farms in the state can grow much of their own feed. The region also has plenty of processing capacity and demand for milk from many high-population centers.

“In the Mid-Atlantic region, we probably have more processing capacity demand than actual milk produced,” Heatwole says. “Demand for our milk hasn’t been an issue.”

• Dairy processing

In 2011, Delaware’s two major dairy processors, Hy-Point Dairy and Lewes Dairy, merged. The combined company, which still uses the two separate names, remains the only major dairy processor in the state, producing butter, milk, ice cream, cream and eggnog. Delaware also has four dairy farms that produce ice cream on a smaller scale, as well as another small dairy that bottles its own milk and sells it at farmers’ market and a few local markets, according to the Delaware Department of Agriculture.

Maryland has more than 50 licensed dairy processors, including a Saputo Dairy Foods plant in Frederick, Maryland, and two facilities owned by Maryland and Virginia Milk Producers Cooperative.

Maryland and Virginia Milk Producers, which has 157 members in Maryland and four in Delaware, notes that it recently modernized both of its Maryland facilities, which include a fluid milk bottling plant in Landover and an ingredients/balancing plant in Laurel.

“At the Landover facility, we added a caseless filling line that we commissioned in spring 2017,” says Amber Sheridan, director of corporate communications, Maryland and Virginia Milk Producers Cooperative. “At our Laurel ingredients facility, we expanded our drying capacity by making modifications and upgrades to our dryer. The Laurel plant is a significant balancing plant for the region and processes milk from several states, though mainly Pennsylvania and Maryland.”

New Jersey has four Grade A commercial fluid processing plants, as well as one on-farm Grade A processor and one state Grade A processor for yogurt, the New Jersey Department of Agriculture says. The state also has 16 cheese processing plants that processed 5.4 million pounds of cheese in 2017.

DFA, which has about 100 farmer members in Delaware, Maryland and New Jersey, last fall acquired Bridgeton, New Jersey-based Cumberland Dairy, a family-owned processor of ultra-pasteurized dairy products with extended shelf life (ESL). DFA notes that Cumberland Dairy manufactures and distributes both branded and private-label products and serves some of the nation’s top quick-service restaurants, convenience chains, grocery chains, wholesale food distributors, fine-casual restaurants and dessert concepts.

“This is DFA’s first acquisition in the ESL space, and we think there is opportunity to grow our work with customers and existing product lines through ESL,” says Pat Panko, senior vice president and chief operating officer, fluid milk and ice cream, DFA.

• Artisan cheese

One of New Jersey’s most visible artisan cheesemakers is Valley Shepherd Creamery, Long Valley, New Jersey, which makes cheese, butter and yogurt from the milk of its 600 sheep, 220 goats and 50 cows. Additionally, the 20-year-old farmstead operation hosts tours, teaches cheesemaking classes and sells its products from its on-farm Sheep Shoppe and its retail and grilled cheese counter in Philadelphia’s Reading Terminal Market, as well as other regional retailers.

“Agritourism is pretty big at the farm here, especially spring and fall,” says Eran Wajswol, owner and cheesemaker, Valley Shepherd Creamery. “We have a tourism center with guided tours and wagon tours. Our cheesemaking classes are always sold out. It’s a very active farm.”

Outside its own shops, Valley Shepherd Creamery cheeses are sold mainly in retailers on the East Coast, though it recently expanded and launched national distribution of its line of sheep’s milk yogurt. The creamery also is working to expand its Jersey Cow cultured butter to meet increasing demand, and it has increased its wholesale accounts for cheeses.

“We’ve been growing from the day we opened. My wholesale person tells me there hasn’t been a week without two or three new customers ... it never seems to stop,” Wajswol says.

Running a farm and processing operation isn’t easy in the suburban landscape of New Jersey. Feed production and procurement, waste management and stringent inspections are among the challenges, Wajswol notes. However, the area’s population also provides a close and constant customer base.

“Demographics is great. The price you pay for being here is getting the demographics,” Wajswol says, adding that the proximity of his customers has made it possible to deliver most of his product without hiring a distributor.

Goat’s milk artisan cheesemaker FireFly Farms also has grown over its 17 years in Accident, Maryland, and the company now is planning an expansion into a second aging, processing, lab and office space over the next couple of years.

FireFly owners Michael Koch and Pablo Solanet left their respective corporate and culinary careers started making cheese from their own goats at their farm in the western Maryland mountains. Eventually they sold their goats to focus exclusively on cheesemaking, and now they source all their milk from six old-order Amish family farms within 20-25 miles from the creamery.

“We’re in northern Appalachia, and just 11 miles north of us is the Pennsylvania border,” Koch says. “We don’t have any trouble (sourcing milk). Actually, we can’t grow as fast as our farmers would like us to grow.”

FireFly Farms’ main market is in the D.C. metro area, with concentration in the Mid-Atlantic and the Northeast. However, the company’s cheeses also are now being distributed as far as Northern California, the Midwest and Florida. FireFly has done business with Whole Foods Market since 2003, and recently was asked to create exclusive, limited-run cheeses for the chain.

“Once we grow and build our new place, we will have more manufacturing and aging space,” Solanet says.

“Our business plan has us going from about 200,000 pounds a year to about three times that size in the next five to eight years,” Koch adds of the planned expansion.

Koch is president of the Maryland Cheese Guild, which has been in existence since 2011 but has had more momentum in the past two or three years, he says. The guild holds an annual festival, which took place earlier in October, in conjunction with the state’s wine guild. The cheese guild now has 28 members, including 10 that have achieved a large enough scale to be “paying” members.

“I’m hoping the mountains of western Maryland look like Vermont in 15 years,” Koch says of the growing interest in artisan cheesemaking. “There’s talk about whether in the future to expand the Maryland guild, whether we should combine forces with Pennsylvania, or maybe there should be a Mid-Atlantic guild. For the meantime, we’re pleased the Maryland guild has formed and are trying to drive as much growth as possible with the cheesemakers who are here.”

CMN


U.S. cheese production climbs 3 percent over year earlier

Nov. 2, 2018

WASHINGTON — Total U.S. cheese production in September, excluding cottage cheese, was 1.06 billion pounds, 3.1 percent above September 2017’s 1.02 billion pounds, according to data released Thursday by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart.)

September cheese production was 2.0 percent below August 2018’s 1.08 billion pounds. Adjusted for the length of the months to a daily average basis, September cheese production was up 1.3 percent from August 2018.

Total Italian-type cheese production was 451.2 million pounds in September, up 4.3 percent from September 2017. Mozzarella production, the largest component of Italian-type cheese production, was up 7.5 percent from a year earlier to 357.1 million pounds.

Total American-type cheese production in September was 419.4 million pounds, a 3.9-percent gain over production a year earlier. Production of Cheddar, the largest component of American-type cheese production, was up 0.4 percent from September 2017 to 293.0 million pounds.

Wisconsin led the nation’s cheese production with 280.5 million pounds in September, up 2.0 percent from its production in September 2017. California followed with 205.5 million pounds, a 5.9-percent gain from its production a year earlier.
NASS reports total U.S. butter production was 134.4 million pounds in September, down 0.1 percent from 134.6 million pounds in September 2017.

September butter production was 0.3 percent higher than August 2018’s 134.0 million pounds. When adjusted for the length of the months, September butter production was 3.6 percent higher than August 2018 production on a daily average basis.
California led the nation’s butter production in September with 43.7 million pounds, up 21.0 percent from the 36.1 million pounds produced in September 2017.

CMN



Dairy stakeholders request more action on tariff impact

Oct. 26, 2018

WASHINGTON — Dairy stakeholders this week ramped up the pressure on USDA to address continuing tariffs that are pressuring U.S. dairy operations.

The National Milk Producers Federation (NMPF) says USDA needs to better reflect the dairy farm incomes lost to tariff retaliation when it calculates its next round of trade mitigation payments.

In a letter sent Tuesday to Agriculture Secretary Sonny Perdue, NMPF Chairman and dairy farmer Randy Mooney cited four studies illustrating that milk producers have experienced more than $1 billion in lost income since May, when the retaliatory tariffs were first placed on dairy goods in response to U.S. levies on foreign products.

In contrast, the first round of USDA trade mitigation payments, announced in August, allocated only $127 million to dairy farmers.

“We are ever-grateful for your advocacy on agricultural trade, which is crucial to the economic health of our industry,” writes Mooney, who operates Mooney Dairy in Rogersville, Missouri, with his wife, Jan. “However, our members are greatly concerned about the level of aid that was provided in the initial effort.”

The letter details four analyses, including two independent studies using sophisticated economic modeling, that each show losses to dairy producers far above USDA’s initial payment level.

NMPF analyzed the Chicago Mercantile Exchange (CME) dairy futures-based milk prices through the end of 2018, based on the settlement prices in late May, just before retaliatory tariffs were announced. NMPF analyzed those same prices after tariffs had been thoroughly incorporated into market expectations. The expected impact of the retaliation may result in roughly $1.5 billion in lost revenue for producers during the second half of 2018.

NMPF notes that USDA’s own monthly World Agricultural Supply and Demand Estimates (WASDE) report showed a drop in its forecast milk prices for the full 2018 calendar year of $0.70 per hundredweight after the imposition of the tariffs. WASDE’s estimate amounts to a loss in dairy farm income of $1.5 billion for the year.

An Informa Agribusiness Consulting study also estimated that the tariffs would lower U.S. dairy farm income by $1.5 billion for the full year 2018, NMPF says. Meanwhile, the Center for North American Studies at Texas A&M University estimated an annual loss of $1.17 billion.

“The five-year effect of Mexican tariffs on U.S. cheese undermines the potential growth of U.S. cheese exports to a rapidly increasing market,” says the Texas A&M study. “Likewise, the five-year impact of Chinese tariffs on U.S. dairy products shows a significantly lower growth probability for whey and dry milk exports and a somewhat lower growth probability for cheese exports. Five-year losses to dairy farmers range from $2.07 billion to $13.87 billion depending on which scenario materializes.”

Mooney notes these estimates show that farmer losses from the tariffs will notably exceed $1 billion in 2018.

“Significant income losses will continue” if tariffs imposed by Mexico and China — two of the largest dairy export markets for the United States — remain in place, he says.

Perdue has indicated a second trade mitigation payment to producers may be made this year after additional calculations of farmer losses.

“We are eager to work with you on a plan that better reflects the struggles dairy producers across the country have faced due to the tariffs,” Mooney writes in the letter to Perdue. “Thank you for considering the critical implications of these trade challenges for us as dairy farmers and cooperative owners.”

Also this week, “Tariffs Hurt the Heartland,” a nationwide grassroots campaign against tariffs, revealed new data about the costs tariffs are imposing on the Wisconsin economy at a town hall meeting in Milwaukee with local businesses and farmers.
The town hall meeting Thursday included Wisconsin manufacturers, business owners and farmers in addition to other local voices and experts.

News report this week noted trade tensions between the United States and China have taken another negative turn, with the United States demanding that China come up with a specific plan to “stop stealing technology.”

The impasse threatens a meeting in late November between U.S. President Donald Trump and China’s Xi Jinping, according to the Wall Street Journal.

Meanwhile, while the recently announced U.S.-Mexico-Canada Agreement (USMCA), a replacement for NAFTA, was a positive step in many stakeholders’ eyes, some say the benefits to U.S. dairy farmers will be minimal.

The National Farmers Organization (NFO) says the new tri-lateral trade agreement may be viewed as a positive step by some but won’t change the low milk price forecast for U.S. dairy producers.

“We appreciate that opening up export markets to more U.S. milk products is important when we have an oversupply of production here at home,” says NFO President Paul Olson. “But, when you consider there are more dairy cows in Wisconsin than all of Canada, the positive impact is significantly offset.”

The new trade deal allows the United States to regain access to the Canadian market for milk powder and milk proteins, or Class 7 products. The United States now will be able to export $560 million worth of dairy products, or about 3.5 percent of Canada’s dairy industry, up from 3.2 percent.

Olson says it could give a short-term psychological boost to markets here at home, but it won’t be a salvation for America’s dairy farmers.

“What our dairy producers need is a new milk production and pricing system based upon balancing supply and demand factors; that is just reality,” he says. “Supply management and structure management changes need serious review by U.S. co-ops and all milk marketing organizations, along with dairy farmers themselves. Then, we will need implementation in a meaningful way.”

CMN


Dairy groups laud progress in U.S.-Philippines trade talks

Oct. 26, 2018

WASHINGTON — U.S. Trade Representative (USTR) Robert E. Lighthizer this week announced progress in talks with the Philippines under the bilateral Trade and Investment Framework Agreement (TIFA). Both governments agreed that enhanced bilateral agreement on trade under TIFA should include work that yields benefits for agricultural producers, importers, exporters and consumers. The governments say they intend to work together in a number of areas including the development of cold chain requirements and best practices.

U.S. dairy producers and processors voiced appreciation for the administration’s work to preserve and deepen market access ties with a country that purchased $243 million in U.S. dairy products last year.

“The dairy industry needs an ambitious U.S. trade agenda to provide opportunities for dairy products in new markets,” says Michael Dykes, president and CEO, International Dairy Foods Association. “We appreciate the administration’s efforts to develop a trade agreement with the Philippines, because expanding access to international markets is essential for our future success.”

National Milk Producers Federation (NMPF) President and CEO Jim Mulhern says developments are positive for dairy producers facing economic challenges.

“The rural economy is having a rough time, dairy prices are low, and our farmers are struggling,” Mulhern says. “Trade will be key to turning things around. USTR’s work to forge positive pathways with the Philippines is a building block in that process. The next step is to move forward with a free trade agreement to allow our industry to compete head to head with other suppliers in the region.”

U.S. officials note that the Philippines has been handling geographical indications (GIs) in a fair manner that preserves the use of common names. The U.S. officials add that they welcome the Philippines’ commitment to discuss ways to ensure that Philippine laws, regulations and policies do not restrict or prohibit entry of U.S. products in the Philippine market.

To further that goal, the Philippines confirmed that “it will not provide automatic GI protection, including to terms exchanged as part of a trade agreement.”

Tom Vilsack, president and CEO of the U.S. Dairy Export Council (USDEC), says this assurance is significant because of the European Union’s ongoing campaign to use GIs to block U.S. dairy sales.

“The Philippine economy is strengthening, its population growing, and more consumers are moving up into the middle class,” Vilsack says. “In short, there is tremendous potential for greater U.S. dairy sales in the Philippines, and this week’s announcement gets us a step closer to realizing this opportunity.”

U.S. negotiators also secured a commitment from the Philippines to consider petitions for voluntarily lowering tariff rates on certain agricultural products, including cheeses. NMPF and USDEC says this is a step in the right direction toward U.S. exporters bridging the competition gap created by trade agreements between the Philippines, Australia and New Zealand.

In other trade news, the European Commission recently adopted the EU-Vietnam trade and investment agreement, paving the way for signatures and conclusion. The trade agreement will eliminate virtually all tariffs on goods traded between the two sides and will provide protection for 169 traditional European food and drink products in Vietnam, including GI protections on cheeses.

According to the Consortium for Common Food Names, upon ratification of the EU-Vietnam agreement, grandfathering clauses will go into effect for asiago, fontina and gorgonzola already in the market, allowing them to retain their names if producers marketed these products in Vietnam before January 2017.

CMN


When you don’t want cake: experts discuss anti-caking

Oct. 26, 2018

By Alyssa Mitchell

MADISON, Wis. — As U.S. exports to foreign trading partners become an increasingly important facet of U.S. dairy business, it is important to ensure the highest quality for the products sent overseas.

In a session during the American Dairy Products Institute’s Technical Symposium, held Oct. 23-24 in Madison, Wisconsin, Karen Smith, dairy processing technologist with the Center for Dairy Research (CDR), provided an overview of common causes of caking in permeate and dry dairy products as well as strategies to avoid it.

Caking occurs when a product that was loose and flowable become lumpy and even brick-like upon storage, Smith notes. This can especially happen when product is shipped overseas.

Components in the powder that are hygroscopic or “water-loving” are the culprits, Smith says.

Proteins, lactose and minerals are the hygroscopic components in dairy powders. While proteins are water-loving, they do not cause problems with caking because they can bind water without becoming sticky, Smith notes. Minerals binding water are only a problem at very high moisture contents that are not seen with dairy powders. Lactose, however, is generally extremely hygroscopic, leading to issues with caking.

While caking is not limited to permeate, it is very common in permeate, Smith notes. Nonfat dry milk also can cake because it contains large amounts of amorphous lactose, which is very hygroscopic.

The amorphous lactose is able to find moisture both in the air and through imperfections in the liner of the packaging material, Smith says. As the amorphous lactose grabs water molecules, the lactose becomes sticky, causing powder particles to bind together and form large clumps.

Smith notes both powders with and without protein can cake, but the presence of protein reduces the severity of caking in susceptible products by limiting the availability of water for mobilizing and crystallizing the amorphous lactose.

“Because less water is available and protein does not become sticky when binding water, powders containing protein such as nonfat dry milk and whey protein concentrate will exhibit less clumping as compared to powders without protein,” Smith says.

Commercial lactose tends to clump less because is it produced by first crystallizing the lactose and then washing away the impurities so that it contains very little amorphous lactose, Smith notes. Crystalline lactose that contains larger amounts of amorphous lactose does in fact cake, which makes it excellent for use in tableting (pill manufacture) applications.

So how can manufacturers determine if their product will cake?

Smith says tests such as water moisture, water activity, composition and product history can be helpful, but a method called the Karl Fischer test measures both free and bound water.

Since bound water is assumed to be 5 percent of the alpha-lactose crystal structure, anything above 5 percent moisture by Karl Fischer is considered to be “free” moisture, Smith says. For example, if the moisture for lactose if 5.3 percent by Karl Fischer, it is listed as 5 percent bound moisture, 0.3 percent free moisture and 5.3 percent total moisture.

Using moisture to determine if a powder will cake has its limitations, Smith notes. If the value for moisture is high, there is a problem. However, if the value is “correct,” there may or may not be a problem with caking.

There is a simple test that is specific to determining if a product will cake upon storage, Smith notes. It is fast, easy, inexpensive and works for all dairy powders including lactose, permeate, whey protein concentrate, milk protein concentrate and others.

This test requires a plastic container with a “shelf” (a size that can fit within the container), an aluminum weighing dish (2-inch diameter), balance, spatula and hot water (140 degrees Fahrenheit).

For this test, the container is filled with the hot water just below the bottom of the tray. Sixteen grams of powder are then put into an aluminum weighing dish and placed in the container, and then the lid is closed for an hour. After an hour, the container is opened and the aluminum dishes are placed on a table for another hours, before they are tipped over and emptied onto paper to be tested with the spatula.

“If it’s working well, you should see condensation on your container lid,” Smith says.

The powder is then ranked from 1 to 5, with 1 being free flowing, 2 being slightly crusty but easily broken up, 3 being crusty or gummy and breaking into chunks, 4 a more severe version of 3, and 5 being a solid that will not break apart.

Smith says a 1 or 2 score is acceptable; the others are not.

“Scores of 1 or 2 indicate a product that should not cake, even under harsh conditions,” she says.

Three things are important to consider when evaluating the caking potential of a dairy ingredients — the amount of lactose, amount of protein and form of lactose present, Smith notes.

“Products that have large amounts of lactose and little protein along with lactose largely in the glass or amorphous form have a high caking potential,” she says. “It does not mean, however, that because these products have a high potential to cake that they will cake. It simply means that greater care must be taken to ensure that there is the least amount of amorphous lactose in the final product as possible.”

CDR offers some other tips to limit caking in product, which include:

• Slow the absorption of water by the powder.

Use a moisture-impervious container or a heavier liner in the bag. Lecithin also can be added to coat amorphous lactose.

• Use a free flowing agent.

In addition to coating and smoothing rough edges of particles so they flow easily, free flowing agents absorb excess moisture in the product and atmosphere to help limit caking. These agents are used in products such as table salt to limit clumping and examples include calcium silicate, cornstarch, cellulose powders and others.

• Crystallize more lactose.

Run higher total solids from the evaporator. The higher the total solids, the greater the percentage of lactose that can crystallize, thereby reducing the overall concentration of amorphous lactose present in the liquid.
A secondary dryer also can be used to convert additional amorphous lactose to alpha-lactose.

• Do not mill the product.

Milling creates heat and results in production of amorphous lactose on the surface of the alpha-lactose crystal.

• While not always practical, it is helpful to limit temperature and humidity variation in storage.

CMN



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November 15, 2018


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Cheese Production
U.S. Total Sept.
1.057 bil. lbs.


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U.S. Total Sept.
17.376 bil. lbs.

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