Projected foodservice demand recovery boosts CME cheese

April 16, 2021

By Alyssa Mitchell

MADISON, Wis. — Cheese prices at the Chicago Mercantile Exchange (CME) moved higher last week following projected higher prices for 2021 in USDA’s latest World Agricultural Supply and Demand Estimates report, as well as increasing demand from foodservice channels and positive export numbers, analysts say.

After settling at $1.6925 per pound for barrels and $1.8300 per pound for blocks April 9, CME prices pulled back a bit earlier this week before increasing again today to settle at $1.6900 and $1.7800, respectively.
USDA’s Dairy Market News says cheese production is busy in light of stronger demand and strengthening market prices.

“Some producers have remained active throughout most of the year and still report being behind on current orders. Spot milk is tightening up a bit. With spring flush underway, contacts are unsure what to expect as warmer weather will assuredly bring lower overall milk output,” Dairy Market News says. “After some turbulence early in the week on the CME markets, cheese contacts still relay they feel somewhat confident in healthy market tones.”

With most market stakeholders anticipating higher cheese prices later this year, last week’s run-up was not surprising, even if the timing of it was a bit unexpected, says Sara Dorland, managing partner with Ceres Dairy Risk Management LLC, Seattle.

She notes the new MWC cheese plant ramping up production in Michigan may be contributing additional tightness to the Midwest cheese market.

According to Lucas Fuess, director of dairy market intelligence at HighGround Dairy, Chicago, the announcement of the end of the Farmers to Families Food Box program caused a mid-week pullback, but moving forward, prices still should see decent support. (See related article below.)

“I think a key question that many in the supply chain are trying to unravel is what will demand be like in the coming months? There are critical uncertainties on both retail and foodservice spending in the coming months. As vaccinations increase and a return to some semblance of normalcy arrives, will grocery shopping habits developed during the pandemic persist? There is pent-up consumer demand for eating out; how strong will restaurant sales be this summer? Participants across the supply chain do not want to be caught short if demand surges and are choosing to ensure product availability. This is keeping cheese prices supported and balancing robust cheese output in many regions of the country, especially in the Upper Midwest,” Fuess says.

Dorland says expectations for increased foodservice demand are cautiously optimistic, with pandemic fatigue, warmer weather and increased vaccinations likely driving more consumers to dine out.

“We expect foodservice demand to be hot this summer, as consumers are excited to spend more time out of the house and get away from doing dishes,” agrees Kathleen Noble Wolfley, senior economist and research specialist for Blimling and Associates Inc., Madison, Wisconsin. “This will likely come at the expense of some retail sales compared to 2020, though we expect sales to still hold on above 2019 levels, supported in part by increased SNAP funding. All in all, we anticipate solid cheese demand on both fronts over the next few months as consumers have money to spend.”

Noble Wolfley says Blimling’s forecast is projecting April block cheese prices around $1.80 per pound.

“In our estimation, though, high prices may not hang around for long as reports continue to cite ample supply and more than adequate milk flows,” she adds.

Analysts say stronger U.S. cheese prices could lead to lower exports if U.S. prices become too steep on the international market.

“At recently-traded levels we’re still competitive overseas, but we could run into issues is if the market runs too high — we saw some occasional setbacks last year,” Dorland notes.

Fuess says cheese exports likely will slow as shipping and logistical difficulties show up in the data after a healthy February.

“Into the second half of the year though, prior-year comparable export volume is easier to beat. If the U.S. cheese price is right, and especially if Mexican purchasing resumes at more normal levels, 2021 cheese exports could exceed volume seen last year,” he says.

Meanwhile, U.S. dairy producers’ feed costs currently are at the highest level since 2014, Noble Wolfley notes.
“It’s still very early in the growing season, but if prices hold at these levels, our model projects it could lead to flat milk production growth in the fourth quarter. Historically, high grain prices are correlated with stronger milk prices, so as long as grain futures stay elevated, it likely results in a risk premium built into dairy markets,”she says.

Fuess says farmers likely are watching both grain and milk futures markets closely.

“We will likely see the exceptional herd size growth noted over the past several months slow or reverse as farmers analyze which cows remain profitable at higher feed costs,” he says. “However, both yield and components will be heavier, keeping production strong. Both export and domestic demand will need to be robust to balance higher milk output.”

CMN

USDA to end food box program, implement donation program

April 16, 2021

WASHINGTON — Speaking at a congressional hearing Wednesday, U.S. Agriculture Secretary Tom Vilsack announced USDA will bring the Farmers to Families Food Box Program to an end in May. The $4 billion program has delivered more than 156 million boxes of dairy, meat and produce since the start of the pandemic.

USDA says the program had “significant challenges,” noting that box distribution was not based on need; rural counties were underserved; prices fluctuated from $28 to $105 per box; food varied in quality and quantity; perishable items often went unrefrigerated; and small businesses struggled to compete for contracts.

Vilsack says USDA plans to direct tax dollars to expand food stamp benefits and increase food purchases through existing government food distribution programs.

“The Farmers to Families Food Box Program represented an innovative approach to tackling what was a massive issue last spring — finding a way to use existing foodservice distribution capacity to deliver nutritious dairy products, fruits, vegetables and meat to people in need,” says Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA). “While we’re optimistic about the positive trajectory of COVID-19 cases, vaccination rates and the relative normalcy returning to restore our economy, millions of Americans continue to face hunger and nutrition insecurity.

“Dairy has a vital role to play in meeting the nutritional needs of Americans, especially in this time of great need,” Dykes adds. “Because dairy products are so nutrient-dense, they deliver more nutrients for fewer dollars in federal nutrition programs. IDFA looks forward to working with USDA on further bolstering of the U.S. nutrition safety net through Supplemental Nutrition Assistance Program, The Emergency Food Assistance Program (TEFAP) and other important programs to ensure families struggling with hunger and malnutrition continue to receive the unique nutritional benefits of dairy products.”

Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF), says while the Farmers to Families Food Box Program was very helpful in responding quickly to both last year’s food supply chain disruptions and the dramatic rise in the number of Americans experiencing food insecurity, it also had its challenges.

“That’s why we are not surprised by the decision to move beyond the food box program, and in fact, expected it,” Mulhern says. “The important focus now is addressing the twin needs of assisting food insecure families and aiding food supply chains like dairy that are still dealing with the effects of reduced foodservice demand. We support USDA’s efforts to use multiple programs, including TEFAP, Section 32, the new dairy donation program and other efforts to purchase dairy products, produce, meat and other products for distribution through food banks and other charitable organizations in the most efficient and effective ways. This will help farmers do what they do best: serve people who benefit from the nutrition they provide.”

USDA this week also announced it soon will implement the $400 million Dairy Donation Program (DDP) as established in the Consolidated Appropriations Act of 2021. The program will facilitate the timely donation of dairy products to nonprofit organizations that distribute food to persons in need and prevent and minimize food waste. Because the statute allows retroactive reimbursements of donations made before donation and distribution plans are approved, USDA is providing advance notice of the minimum provisions to be included in the program to encourage the dairy industry to process and donate surplus milk supplies as it moves through the spring surplus milk production season.

Although the DDP regulations have not yet been published, the following are the minimum key program requirements included in the statute:

• A donation and distribution plan must be submitted and approved by USDA;

• The reimbursement will be at least equivalent to the minimum classified value of milk used to make the donated product on the date of manufacturing;

• Records related to donating and receiving products must be maintained and available for review and/or audit; and

• Eligibility is open to dairy farmer cooperatives and processors who “account to” a federal milk marketing order (FMMO) and donate dairy products to any private or public nonprofit food distribution entity.

IDFA and NMPF issued statements applauding the DDP announcement.

“The U.S. dairy industry stepped up throughout the pandemic to partner with and aid nonprofits, charities and other organizations working to combat our nation’s hunger issues that were exacerbated by the coronavirus pandemic. This new program will help ensure persons in need continue to receive assistance and the unique combination of essential nutrients that only dairy products can provide. IDFA appreciates the department’s work to ensure dairy donations continue during this crucial time of need in our country,” Dykes says.

“NMPF worked closely with Congress to enact the Dairy Donation Program in the Consolidated Appropriations Act of 2021,” Mulhern adds. “This important program will help dairy farmers and the cooperatives they own to continue to do what they do best — feed people. Dairy stakeholders are eager to expand their partnership efforts with food banks and other distributors to provide a variety of nutritious dairy products to food insecure households who have faced uniquely difficult challenges throughout the COVID-19 pandemic, as hunger has risen significantly during the last year. We commend USDA for prioritizing implementation of the DDP and look forward to continue working with the department, the food bank community and all involved to make the program a success.”

For more details on the DDP, visit www.ams.usda.gov.

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Biden budget proposal includes 16% increase in funding for ag

April 16, 2021

WASHINGTON — The Biden administration recently submitted to Congress its priorities for fiscal year 2022 discretionary spending, including $27.8 billion for USDA, a 16% increase from 2021.

U.S. Agriculture Secretary Tom Vilsack says the funding request invests in the core foundations of the country’s strength and advances key USDA priorities, including economic development and growth in rural America, maintaining support for American agriculture, rebuilding scientific expertise in U.S. agencies, aiding in an all-of-government approach to mitigate and adapt to climate change, and supporting a strong safety net to address hunger and nutrition insecurity.

“The president’s budget provides the resources to build back better, stronger, and more resilient and equitably than ever before,” Vilsack says. “This is our moment to solve big challenges by acting boldly — to close the broadband gap facing rural America; to work with farmers, ranchers and producers to transform our nation’s food system and build new markets here and abroad; to protect and manage our nation’s forests and grasslands from catastrophic wildfires; and to ensure Americans have access to healthy and nutritious food. The president’s budget commits to building back better, and USDA is at the heart of that historic commitment.”

The budget proposal outlines a $2.25 trillion investment over eight years. To offset the cost, the plan would also amend the corporate tax code.

“After decades of neglect, our nation’s infrastructure is barely holding together — a fact that has become especially apparent after the pandemic and extreme weather events disrupted the food supply chain, energy production and other critical services,” says Rob Larew, president of the National Farmers Union (NFU).

“It is really encouraging to see these issues and others included in President Biden’s American Jobs Plan. We sincerely hope that this will set the stage for comprehensive improvements that strengthen rural communities, build resilience to climate change and hasten economic recovery,” Larew adds. “In the coming weeks and months, we look forward to reviewing the plan and subsequent legislation in greater detail, including the pay-for provisions.”

The Consumer Brands Association says it is encouraged by the momentum already displayed by the Biden administration and Congress to seize on the opportunity of infrastructure investment and reform.

“We agree that now is the time for investment in an American infrastructure of the future. The president’s plan addresses key issues for the consumer packaged goods (CPG) industry, including significant investments across the national highway system, electric freight vehicles, a 21st century transportation workforce and rural broadband connectivity,” says Geoff Freeman, president and CEO, Consumer Brands Association.

“We are encouraged to see the administration recognize a role for federal leadership in strengthening manufacturing supply chains for critical goods and urge them to consider important improvements, such as an increase in gross vehicle weight standards to increase efficiency while making roads safer and minimizing congestion, and a White House office of supply chain that would streamline disjointed federal policy,” Freeman adds. “While not mentioned specifically, we also believe this plan presents an opportunity for the country to take the steps necessary to create a circular economy, including fixing the nation’s broken recycling system.”

Vilsack notes the discretionary investments reflect only one element of the president’s broader agenda.

“In the coming months, the administration will release a budget that will build on this discretionary funding request and detail a comprehensive fiscal vision for the nation that reinvests in America, supports future growth and prosperity, meets U.S. commitments and does so in a fiscally sustainable way,” he says.
For more information on the discretionary funding request, visit www.whitehouse.gov/omb/fy-2022-discretionary-request.

CMN

USDEC discusses challenges, opportunities for trade, exports

April 9, 2021

By Alyssa Mitchell

MADISON, Wis. — Despite the challenges global dairy industry players have faced throughout the COVID-19 pandemic, international interest in U.S. dairy products remains steady, with opportunities for growth in emerging markets. At the same time, as a new U.S. administration continues to take shape, industry stakeholders are eager to see progress on key trade agreements.

In a session Wednesday during CheeseExpo Global Online, a virtual event hosted by the Wisconsin Cheese Makers Association and Center for Dairy Research, Shawna Morris, vice president of trade policy for the National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC), and William Loux, director of global trade analysis for USDEC, shared updates and insights on how the “new normal” could impact future export and trade opportunities for U.S. dairy.

The Biden administration continues to take shape, with key confirmations already in place for Katherine Tai as U.S. Trade Representative (USTR) and Tom Vilsack as secretary of agriculture. However, some seats remain unfilled, including USTR’s Ag Ambassador, USDA’s under secretary for trade and administrator of USDA’s Foreign Agricultural Service, among others, Morris notes.

Morris says the Biden administration has voiced support for enforcing existing trade agreements, including the U.S.-Mexico-Canada Agreement (USMCA), as well as focusing on workers and environmental sustainability in current and future deals. It remains to be seen what new trade agreements, if any, will be pursued, she adds.

Meanwhile, current Trade Promotion Authority (TPA) will expire July 1, and it is unclear when or if Congress plans to renew TPA before that date, Morris says.

“We haven’t seen a clear indication on what will happen,” she says. “We want to help encourage the pursuit of trade agreements, and TPA is one of the key tools the administration will need to drive that forward.”

The Biden administration has committed to re-engaging in a multilateral process, as the United States rejoined the World Health Organization and affirmed the role of the World Trade Organization (WTO), which recently announced Njozi Okonjo-Iweala as the new director general, Morris says, noting USDEC is part of an agricultural coalition that crafted unified positions under WTO.

USDEC also is focusing on addressing tariffs, particularly retaliatory tariffs, and urging enforcement on China to fulfill its phase one trade agreement with the United States. Other key trade agreements in progress include talks with the United Kingdom, Kenya and Japan.

Since USMCA officially replaced NAFTA in July 2020, USDEC has worked with NMPF to highlight discrepancies with Canada’s tariff rate quota (TRQ) allocations, and also has pressed USTR and organized congressional letters on addressing Canada’s TRQ administration rules that limit market access, Morris says.

In addition to USMCA text implementation concerns, a rise of anti-import sentiment in Mexico has spurred several proposed regulatory hurdles that risk impeding trade, Morris notes. USDEC has worked to spotlight these issues and propose a strategy that combines technical and political avenues to address them.

“The importance of this market to U.S. dairy exporters cannot be overstated,” Morris says.

She adds USDEC has seen a strong surge of protectionist regulatory proposals in the dairy space, such as the issue of common cheese names, and USDEC is urging administration officials to address this in current and future trade agreements. The issue also was called out as a key trade barrier in the recently released USTR National Trade Estimate report. (See “New USTR report outlines trade barriers for U.S. dairy products” in last week’s issue of Cheese Market News.)

Meanwhile, Loux notes that global cheese trade is remarkably steady in spite of the COVID-19 pandemic.
Both cheese and especially whey contributed positively to that growth, he says. The U.S. posted a record year in dairy export volume in 2020, and the most recent data from February is positive.

“Global cheese demand seems robust in spite of the pandemic, and we think it will continue beyond the pandemic,” Loux says.

He notes key markets to watch for U.S. demand include Japan, South Korea and Mexico. Japan still is a growing market, and the United States and European Union (EU) are competing in Korea, where demand is strong.

“We’re optimistic that the U.S. can capture market share, but competition will be stiff,” Loux says.

Mexico still is the United States’ No. 1 cheese market, although there has been a sharp drop in Mexico’s cheese import demand since COVID, he adds, noting employment rates and an economically active population still are trailing pre-COVID levels, which is reflected in reduced cheese demand.

As the United States continues to build on its cheese supply, some of that will need to go to export markets, Loux adds.

At the same time, demand remains positive for U.S. whey powders, particularly whey protein concentrate (WPC), he says.

While the United States is expected to remain the largest producer of WPC and whey protein isolate, the EU may start to close the gap, Loux adds.

“We’re seeing robust demand internationally for high-protein whey products, and we’re fairly confident that will continue moving forward,” he says. “The U.S. is well placed to take advantage.”

CMN

Championship Cheese Auction raises $39,125 to support dairy

April 9, 2021

MADISON, Wis. — The live, virtual Championship Cheese Auction, held Wednesday during CheeseExpo Global Online, raised $39,125 for Wisconsin Cheese Makers Association (WCMA) scholarship programs and industry educational opportunities, as well as the World and U.S. Championship Cheese Contests.

“The Championship Cheese Auction is always a highlight of CheeseExpo, and this year’s virtual event offered a moment of camaraderie and celebration, along with the opportunity to support training for the dairy processing industry’s next generation,” says John Umhoefer, executive director, WCMA.

The 2021 Championship Cheese Auction featured 10 cheeses, all previous winners of the World or U.S. Championship Cheese Contests.

“Our thanks go to auction bidders for participating with generosity and enthusiasm,” Umhoefer says. “In celebrating cheesemaking excellence, they are also ensuring dairy’s future is strong, with a well-trained, highly skilled workforce.”

Auction results are as follows:

• Item 1: Nelson-Jameson Inc. purchased 18 pounds of Marieke Gouda Mature made by Marieke Gouda, Thorp, Wisconsin, for $40 per pound for a total of $720.

• Item 2: Nelson-Jameson Inc. purchased 20 pounds of SarVecchio Parmesan made by Sartori Co., Plymouth, Wisconsin, for $160 per pound for a total of $3,200.

• Item 3: Nelson-Jameson Inc. purchased 10 pounds of Evalon made by LaClare Farms & Mosaic Meadows, Malone, Wisconsin, for $110 per pound for a total of $1,100.

• Item 4: Chr. Hansen purchased a 5-pound Baby Swiss Wheel made by Guggisberg Cheese, Millersburg, Ohio, for $370 per pound for a total of $1,850.

• Item 5: B Team/Brian Eggebrecht purchased 40 pounds of Sharp Cheddar made by Dan Stearns, Agropur Inc., Weyauwega, Wisconsin, for $140 per pound for a total of $5,600.

• Item 6: Alpma USA purchased 5 pounds of Esquirrou made by Savencia Fromage & Dairy & Mauleon Fromagerie, France, for $325 per pound for a total of $1,625.

•Item 7: Great Lakes Cheese Co. Inc. purchased 9 pounds of Le Gruyère made by Gourmino & Bergkäserei Fritzenhaus, Michael Spycher, Emmental, Switzerland, for $400 per pound for a total of $3,600.

• Item 8: DSM Food Specialties purchased 40 pounds of Sharp Cheddar made by Cabot Creamery Cooperative, Cabot, Vermont, for $170 per pound for a total of $6,800.

• Item 9: Great Lakes Cheese Co. Inc. purchased 22 pounds of Rembrandt Gouda made by FrieslandCampina, Wolvega, Friesland, Netherlands, for $260 per pound for a total of $5,720.

• Item 10: Kelley Supply Inc. purchased 18 pounds of Grand Cru Surchoix made by Emmi Roth USA, Monroe, Wisconsin, for $495 per pound for a total of $8,910.

CMN

USDA raises 2021 commodity price, milk production forecast

April 9, 2021

WASHINGTON — USDA raised its 2021 milk production forecast to 227.7 billion pounds in this month’s Supply and Demand Estimates report released today. This forecast is up 400 million pounds from last month’s report, primarily on increased cow numbers.

The 2021 fat basis import forecast is reduced to 6.0 billion pounds while fat basis exports are raised to 10.7 billion pounds on higher shipments of cheese, USDA says. On a skim-solids basis, the import forecast is reduced to 5.3 billion pounds on lower imports of milk proteins and several other dairy products while the export forecast is raised to 49.8 billion pounds on strong gains in shipments of skim milk powders and whey.

However, lactose shipments remain relatively weak, USDA notes.

Product price forecasts are raised on improving demand, both domestically and in international markets.
Prices of cheese, butter, nonfat dry milk (NDM) and whey are raised, boosting both Class III and Class IV prices. Cheese is forecast to average $1.710 per pound in 2021, while butter and NDM are forecast at $1.730 and $1.160 per pound, respectively. Dry whey is forecast to average $0.525 per pound.

The Class III price forecast is raised to $17.10 per hundredweight, while the Class IV price is raised to $15.15. The 2021 all milk price forecast is raised to $18.40 per hundredweight.

CMN

WCMA Championship Cheese Contests evolve over decades

April 2, 2021

By Trina La Susa

MADISON, Wis. — Throughout the past three decades, the Wisconsin Cheese Makers Association (WCMA)has hosted the U.S. Championship Cheese Contest in odd-numbered years and the World Championship Cheese Contest in even-numbered years to promote the quality of cheesemaking and dairy product manufacturing through technical judging. As international recognition has grown, the contests have expanded to accommodate thousands of cheese and dairy product entries, along with new classes.

Due to the pandemic, the Championship Cheese Contest was canceled in 2021. The next World Championship Cheese Contest will be held March 1-3, 2022, in Madison, Wisconsin and the U.S. Championship Cheese Contest returns Feb. 21-22, 2023.

“The Championship Cheese Contests have grown explosively in the last three decades, fueled in part by international recognition of the competitions as rigorous, fair and transparent,” says John Umhoefer, executive director, WCMA. “Equally important, dairy manufacturers value what they learn from this technical product evaluation and can market a contest medal with great effect. We’ve learned over the years that contest wins are also a great recruitment and motivational tool for dairy companies and their skilled teams.”

Looking back to the founding of the contests, Umhoefer says WCMA’s Championship Cheese Contests are directly rooted in the annual member products competition the association first initiated in the 1890s. After decades of state competition, WCMA’s annual cheese contest was opened to national and international entries in 1957.

“Originally named the World’s Cheddar Championship Contest, three judges tasted 85 Cheddar entries from nine U.S. states, Canada, England, Scotland and Australia,” Umhoefer says. “The next year, WCMA brought back this international competition and agreed to hold what is now called the World Championship Cheese Contest in each even-numbered year.”

For decades, he says WCMA’s annual competition had served as the only national, educational dairy contest in the United States, and the association officially recognized the competition in 1981 as the U.S. Championship Cheese Contest, reflecting the participation of cheesemakers across America.

• Entries and classes expand

Continued contest growth over the years reflects the successful expansion of cheesemaking both in the United States and overseas, Umhoefer says. The World Championship Cheese Contest grew to include 212 entries in 1980, surpassed 500 entries in 1990, doubled again to 1,033 entries in 2000 and more than doubled to reach 2,318 entries in 2010.

“The most recent 2020 World Championship Cheese Contest featured a record-breaking 3,667 entries from 26 countries and 36 American states,” Umhoefer says. “These contests now feature more than 60 judges from around the world, gathered for a week in March to inspect, sniff and taste cheese, butter, yogurts, and milk and whey ingredients.”

The growth in contest classes —from less than 20 in the 1980s to more than 130 classes in 2020 — reflects multiple consumer trends, he notes. In the last 10 years, the Championship Cheese Contest added multiple classes for Hispanic-style cheeses, cheeses with added peppers and smoked cheeses. Specialties such as Burrata and paneer also have joined the events, as well as multiple classes reflecting the growth of sheep’s milk cheese, goat’s milk cheese and cheeses from other mammals.

“At the same time, a counter trend toward traditional bandaged and waxed and natural rind cheeses has taken off among artisan cheesemakers and at the contests, as well as growth in smear-ripened cheeses,” Umhoefer says. “The contests have added aged classes for Gouda, Asiago and Cheddar, while at the same time adding classes for popular fresh, young cheeses such as soft-ripened products made from cow, goat and sheep milk.”

Current trends have driven new contest classes, such as the rise in natural snacking cheeses, multiple varieties of spoon-able and pourable yogurt, and flavored butter and cottage cheese, according to Umhoefer. The contests also have expanded into dry dairy ingredients to promote quality manufacturing and functionality of these products for domestic and overseas food industries, he adds.

“Growth in the contest reflects the success of hundreds of entrepreneurial cheesemakers who are inventing new cheese styles and finding niches with convenience, new flavors or new ethnic food styles for consumers to enjoy. Success at Championship Cheese Contests has supported the growth of many new manufacturers — spurring sales after competitors earn a contest medal,” Umhoefer says, noting that many established dairy companies build entire marketing platforms on repeated success at these competitions.

“The quality of the dairy products entered in the contest have improved over the years — since 1987, when I was judging,” said Bob Aschebrock, contest chief judge emeritus, during WCMA’s March 2 webinar on contest history. “You can see the quality go up, and the products are getting better and better all the time.”

Umhoefer says the association always is gratified to hear that score sheets provided to the contest entrants help refine the specifications and make procedures for cheeses and other dairy products. He adds that many companies use contest wins to build team morale and pride, and these benefits can accrue for everyone who enters.

CMN

New USTR report outlines trade barriers for U.S. dairy products

April 2, 2021

WASHINGTON — The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) are urging the Biden administration to work to eliminate tariff and nontariff impediments to U.S. dairy exports following this week’s release by the Office of the U.S. Trade Representative (USTR) of the 2021 National Trade Estimate Report on Foreign Trade Barriers (NTE).

The annual report details progress made and challenges that remain for U.S. trade, investment and services around the world. Compiled from information from USTR, interagency partners and public stakeholders, this year’s report covers 65 countries and regions, including key destinations for U.S. dairy products.

USDEC and NMPF submitted comments on the major trade obstacles facing the U.S. dairy industry last October, pointing out that tariffs and nontariff barriers in many countries remain significant roadblocks to U.S. dairy exports. Several of those concerns were incorporated in USTR’s report, including dairy trade issues in Mexico, Canada, China and the European Union (EU) among others. In its release USTR also noted that the key agricultural trade barriers captured in the NTE included “restrictions on the ability of U.S. producers to use the common names of the products that they produce and export.”

USDEC President and CEO Krysta Harden says, “Exports are extremely important to the U.S. dairy industry, which shipped more than $6.5 billion of product to destinations worldwide in 2020. Obstacles to those exports negatively affect the economic wellbeing of America’s dairy farmers and jeopardize dairy processing jobs and workers throughout the supply chain who support our industry. These barriers must be removed.”

In their comments, USDEC and NMPF focused on barriers in key dairy export markets such as Canada, China, the EU and Mexico. Among the bigger obstacles cited by the organizations were the misuse of geographical indications (GIs) and unscientific import requirements and mandates.

On GIs, for example, the organizations note the EU has sought to effectively monopolize common cheese terms by attempting to prohibit U.S. cheesemakers from using names such as asiago, feta, gorgonzola, gruyere and parmesan, and keep out imports of U.S.-made cheeses with those names not only in EU nations, but in other countries as well.

The Consortium for Common Food Names (CCFN) also praised the Office of the USTR’s prioritization of common name restrictions as a primary trade barrier.

“USTR’s recognition of GI misuse as a means of confiscating market share is an important step toward proactively addressing this problem,” says Jaime Castaneda, CCFN executive director. “We are encouraged that CCFN members’ persistent work alongside the U.S. government on this issue has elevated the concerns surrounding GI abuse from a relatively obscure issue just a decade ago to a priority for the agency.”

USDEC and NMPF note that the EU also is a leading offender in employing prescriptive requirements to limit imports, including dairy products, by imposing, for example, specific animal disease oversight and documentation procedures and limiting the use of veterinary drugs and commonly used antimicrobials.

“We need USTR to continue pressing our trading partners to eliminate tariffs and nontariff barriers that restrict our dairy exports. The best way to do that is by implementing new free trade agreements and enforcing existing agreements,” says NMPF President and CEO Jim Mulhern.

Meanwhile, the Cheese Importers Association of America (CIAA) and the European Dairy Association (EDA) last week received a response from the European Commission to a joint letter the groups sent earlier this year calling for an end to the Large Civil Aircraft (LCA) dispute and related tariffs between the United States and the EU. (See “Cheese Importers Association urges end to U.S.-EU tariff dispute” in the Jan. 22, 2021, issue of Cheese Market News.)

The response, sent by Michael Hager, head of cabinet for European Commission Executive Vice President Valdis Dombrovskis, notes the EU-U.S. agreement to suspend all tariffs imposed in LCA disputes for a period of four months. (See “United States, European Union suspend tariffs for four months in large aircraft dispute” in the March 12, 2021, issue of Cheese Market News.)

Hager notes he believes that “this important step should allow the EU and U.S. to focus efforts to come to a comprehensive and durable negotiated solution to the civil aircraft disputes” and assures the CIAA and EDA that the EU “will continue to spare no effort in engaging with the U.S. on this urgent matter.”

Hager also expresses hope in the letter that the suspension “will provide an important boost to both exporters and importers and help the food and hospitality sector recover from the effects of the COVID-19 pandemic.”

CMN

February cheese production slightly up from one year ago

April 2, 2021

WASHINGTON — U.S. cheese production in February totaled 1.043 billion pounds, up 1.1% from February 2020’s 1.032 billion pounds, and up 4.7% on an average daily basis adjusted for leap year, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Dairy Production chart on page 15.) February’s total was down 8.1% from January’s 1.136 billion pounds, but up 1.7% on an average daily basis.

Italian-type cheese production in February totaled 444.3 million pounds, down 0.9% from February 2020 but up 2.7% when adjusted for leap year. Production of Mozzarella, the largest component of Italian-type cheese production, totaled 347.5 million pounds in February, down 1.6% from a year earlier but up 1.9% when adjusted for leap year.

American-type cheese production in February totaled 425.4 million pounds, up 1.6% from February 2020 and up 5.3% when adjusted for leap year. Production of Cheddar, the largest component of American-type cheese, totaled 301.6 million pounds in February, down 0.3% from 2020 but up 3.3% when adjusted for leap year.

Wisconsin was the leading cheese-producing state with 263.0 million pounds produced in February, up 0.7% from February 2020 and up 4.3% when adjusted for leap year. California produced the second most cheese in February at 193.8 million pounds, down 2.7% from a year earlier but up 0.7% when adjusted for leap year.

U.S. production of butter totaled 185.6 million pounds in February, down 1.3% from February 2020 but up 2.2% when adjusted for leap year. February U.S. butter production was down 11.5% from January’s 209.6 million pounds, and down 2.0% on an average daily basis. California led the nation in butter production with 57.0 million pounds in February, down 1.1% from February 2020 but up 2.5% when adjusted for leap year.

CMN

Industry collaboration essential to achieving nutrition equity

Tammy Anderson-Wise, Dairy Council of California

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