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Stakeholders file briefs ahead of FMMO decision from USDA

April 5, 2024

WASHINGTON — Post-hearing briefs were due this week following the ongoing USDA hearing on proposals to reform federal milk marketing orders (FMMOs). Several stakeholders submitted briefs as the industry awaits a decision from USDA, now expected in July.

The National Milk Producers Federation (NMPF)’s brief emphasized that farmers are the reason the FMMO system exists — and that, by law, their priorities are pre-eminent in USDA consideration of a final plan.

“Our proposed package of proposals to the federal milk marketing order align thoroughly with its mission and purpose, which were intended to put farmers first,” says Gregg Doud, president and CEO of NMPF. “We’ve spent nearly three years painstakingly assembling the broad consensus among dairy farmers that modernization needs to succeed. Our approach is careful and comprehensive, and it benefits farmers of all regions and types of operations.”

NMPF’s proposals include:

• Returning to the “higher of” Class I mover;

• Discontinuing the use of barrel cheese in the protein component price formula;

• Extending the current 30-day reporting limit to 45 days on forward priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting;

• Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas;

• Developing a process to ensure make allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years;

• Updating dairy product manufacturing allowances contained in the USDA milk price formulas; and

• Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

NMPF’s package of proposals reflect its broad-based membership and consensus-driven approach, which resulted in unanimous approval from its board of directors last year, Doud notes. With that unity unbroken, Doud says he looks forward to USDA’s consideration of NMPF’s solid hearing record that was built along with its recently submitted brief, as well as the department’s recommended decision expected at the beginning of July.

“NMPF has taken seriously its role as the policy leader for U.S. dairy farmers and the cooperatives they own, and we continue to draw on the strength of our members,” he says. “Today we’ve taken another big step toward modernization. We continue to look forward to its successful conclusion.” (For more on NMPF’s stance on FMMO reform, see guest column on page 6 of this week’s issue.)

In its post-hearing brief submitted by its outside counsel, the International Dairy Foods Association (IDFA) reiterates the organization’s positions on the 22 proposed changes to the FMMO system that were considered during the hearing.

“USDA must recognize that the U.S. dairy industry continues to go through a period of evolution and transition that has opened new growth opportunities and presented significant new challenges for all participants throughout the dairy value chain, namely farmers and processors,” says Mike Brown, IDFA chief economist.

He notes IDFA values nutritious fluid milk as a sizable portion of the industry’s continued innovation.

“The hearing record amply demonstrates that fluid milk consumption is price sensitive within the category as well with competing non-dairy beverages. An updated federal order structure must ensure that consumers can continue to purchase milk at a reasonable price point relative to other non-dairy beverages,” Brown says.

IDFA also says the FMMO system must recognize the consistent year-over-year declines in fluid milk consumption while the remainder of the dairy industry is stable to growing. USDA must not unduly raise the regulated cost of any dairy products and must take into account the competitive impacts on the growing product offerings throughout the category in the areas of cheese, cultured products, dairy-based health beverages and powders, frozen treats and valued-added milk, among others, IDFA adds

IDFA notes the dairy industry fundamentally has changed since 2008 when the previous FMMO revisions were made, and the current FMMO pricing formulas should be amended to reflect these new market dynamics while positioning U.S. dairy for the future.

Both IDFA’s make allowance and Class I mover proposals are designed to help all dairy processors grow the industry to the long-term benefit of all participants, from farm to consumer, Brown says.

The IDFA make allowance proposal would update the system to better reflect the cost of processing milk into dairy products — something that has not been adjusted since 2008 while the Consumer Price Index has increased by 47% from 2007 to 2023. The IDFA proposal increases the current 2008 make allowance levels based on two new studies, stepwise over a four-year period.

IDFA’s proposal also requires USDA to update the new make allowances if an audited mandatory cost survey conducted by USDA becomes available during this time; in that case, the make allowance numbers from the new survey would be used instead. All major stakeholders, including IDFA, are asking Congress to provide USDA with the statutory authority to conduct regular cost surveys in the next farm bill.

IDFA’s Class I Mover proposal would provide dairy producers with a regulated minimum Class I milk price equal to or greater than what they would receive under the “higher of” mover over time while preserving the ability for producers, processors and their customers to hedge their costs. It would do so in a manner that:

• Preserves the ability of Class I market participants — from producer to processor to end-users — to forward price their milk without extraordinary basis cost risk;

• Encourages increased sales of Class I products, which have been in steady decline for many years; and

• Keeps the regulated Class I price paid to dairy farmers higher over time than either the current Class I mover or the “higher of” proposal.

In its post-hearing brief, the Wisconsin Cheese Makers Association (WCMA) notes it supports Proposal 8 to increase manufacturing make allowances used in FMMOs to 2022 cost of production levels.

Proposal 8, submitted by WCMA, is identical to proposal 9 submitted by the IDFA. WCMA’s testimony supporting Proposal 8 summarized the importance of the serious economic hardship caused by lack of updates to the federal order make allowances.

WCMA notes it opposes the following proposals:

• Proposal 7, which provides inadequate make allowance adjustments;

• Proposal 4, which would include 640-pound blocks in the National Dairy Products Sales Report (NDPSR) Cheese Price Survey;

• Proposal 6, which would include Mozzarella cheese in the NDPSR Cheese Price Survey; and

• Proposal 11, which would remove the farm to plant component loss adjustments from the component price formulas. (For more on WCMA’s stance on FMMO reform, see guest column on page 4 of this week’s issue.)

Meanwhile, USDA recently responded to requests from stakeholders including the American Farm Bureau Federation (AFBF) to adjust the Class I mover utilized in FMMOs as soon as possible to stabilize prices for dairy farmers.

“I recognized the ongoing importance to the industry of the Class I mover, when USDA announced the FMMO national price formula hearing last year and specifically included this issue in the rulemaking scope,” says U.S. Agriculture Secretary Tom Vilsack in a letter to Zippy Duvall, president of AFBF. “Continuing to work through the current national hearing process and our established regulations is the most appropriate means available to resolve this issue.

“As I’ve noted on several occasions, federal milk marketing orders issues are complex, and small changes can create unintended consequences if not carefully and thoroughly considered,” Vilsack adds. “Since the Class I mover is not the only issue impacting dairy farmers today, the national price formula rulemaking proceeding is allowing all parties to publicly share their viewpoints and evidence to USDA on a variety of key price formula issues. Utilizing this transparent process, we’ve received nearly 12,000 pages of testimony which is being analyzed to prepare a recommended decision that will be available for public comment later this year. Due to regulations at 7 CFR 900.16, USDA cannot make any further comment prior to issuance of the recommended decision on this proposal as it would be considered an ex parte communication.”

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Bird flu reported in cows in additional states, one person

April 5, 2024

ATLANTA — The Centers for Disease Control and Prevention (CDC) reported this week that a person in the United States has tested positive for highly pathogenic avian influenza (HPAI) A virus (H5N1 bird flu), as reported by Texas and confirmed by CDC. This person had exposure to dairy cattle in Texas presumed to be affected with HPAI A. (See “USDA confirms avian influenza in cows, but milk remains safe” in last week’s issue of Cheese Market News.)

The patient reported eye redness, consistent with conjunctivitis, as their only symptom, and is recovering. The patient was told to isolate and is being treated with an antiviral drug for flu.

CDC says this infection does not change the H5N1 bird flu human health risk assessment for the U.S. general public, which it considers to be low. However, people with close or prolonged, unprotected exposure to infected birds or other animals, including livestock, or to environments contaminated by infected birds or other animals, are at greater risk of infection.

This is the second person reported to have tested positive for influenza A(H5N1) viruses in the United States. A previous human case occurred in 2022 in Colorado. CDC notes human infections with avian influenza A viruses are uncommon but have occurred sporadically worldwide.

HPAI in dairy cows was first reported in Texas and Kansas by USDA on March 25. On March 29, USDA’s National Veterinary Services Laboratories confirmed HPAI in a Michigan dairy herd that recently had received cows from Texas.

Earlier this week, USDA confirmed additional detections of HPAI in New Mexico, Idaho and Ohio, as well as five additional dairy herds in Texas.

Also this week, the Nebraska Department of Agriculture (NDA) issued an importation order that will require all breeding female dairy cattle entering the state to obtain a permit issued by NDA prior to entry. The new importation order will be in place until April 30, when it will be re-evaluated. More information is available at nda.nebraska.gov/animal/imports.

“The health and safety of livestock in Nebraska is top priority,” says Nebraska State Veterinarian Roger Dudley. “At this time, it appears the HPAI illness found in dairy operations in some states only affects lactating dairy cows and is not being seen in other segments of the cattle industry. Now, more than ever, is the time to enhance biosecurity measures on farms and ranches to help protect livestock from illness.”

He adds that there have been a lot of discussions on the national level about this outbreak, and understanding the details surrounding the transfer of the HPAI virus to livestock is an important part of the epidemiological investigation.
“While troubling, this outbreak does not currently threaten the lives of dairy cattle, and the pasteurization process continues to keep the milk safe,” Dudley says.

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Report: Global dairy prices are forecast to stay near ’23 level

April 5, 2024

COLUMBIA, Mo. — Global dairy product prices are projected on average to be around their 2023 level, down from the peaks of 2022, as demand from China slows and feed prices have fallen, according to the Food & Agriculture Policy Research Institute (FAPRI) at the University of Missouri in an International Agricultural Market Outlook released this week.

Overall, the FAPRI outlook says, agricultural commodity and biofuel market prices mostly weakened in 2023 and are projected to remain below the higher levels seen in 2022 for the next 10 years. Input price pressures have eased, and demand growth is expected to moderate over the projection period through 2033.

In international dairy markets, China continues to be the major driver, FAPRI reports. A relative slowdown in the economy has softened demand for dairy products, while the dairy industry has restructured and production has grown.

Together, these mean China has become more self-sufficient in dairy products, and this likely will constrain further growth in exports of bulk commodities there. Setbacks in production or a fall in confidence in Chinese products could boost prices in some years.

While overall dairy product prices are projected to remain stable, FAPRI says a major area of uncertainty is the relative levels of dairy product prices. Butter prices have traded consistently above cheese and other product prices over the last decade, and this has persisted even as pro-fat diet fads have waned and producers have increased the fat content of milk. Butter is projected to trade above cheese in the projection period, which has important implications for the pricing of U.S. milk, FAPRI adds.

The relative prices of dairy products also have changed in recent history. The situation in China has meant that a gap has developed between Oceania prices and those of Europe and the United States. In FAPRI’s projections through 2023, the gaps shrink in the short run, but some of the difference persists in the medium term.

The report notes European prices for dairy products and milk likely will be supported by a series of reforms within the European Union (EU). In order to meet strict environmental targets, the EU Commission, in conjunction with the member states, have pushed policies that increase costs and constrain supply. This means growth in cow numbers and milk production in the future likely will be limited, even if the commission backs off some of its changes in light of strong farmer protests.

Both New Zealand and Australia also have suggested policies to reduce greenhouse gas emissions that would impact the dairy sector.

For the United States, the report says, a slowdown in the Chinese market could dampen demand for exports, and products from New Zealand and Australia also are looking for other markets in the region. However, pressure on production on those countries and in the EU could mean that expanding U.S. production can find markets where incomes and populations are growing, and where the trade policy environment is favorable.

To read the full report, visit https://fapri.missouri.edu/wp-content/uploads/2024/04/2024-International-Baseline-Book.pdf.

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Sargento innovates with new snack cheeses for consumers of all ages

PLYMOUTH, Wis. — Sargento Foods Inc., the No. 1 national branded company in the natural snack cheese category, has a long-term vision to be the most innovative, best-loved real food company in the country. From being the first company to introduce prepackaged shredded cheese to customers, to its most recent rollouts of Fun! Balanced Breaks and flavored String cheese, Sargento continues its 70-year legacy of pioneering natural cheese products.

“Our ability to build brands with consumers, our ability to continue innovating, and to develop and leverage the Sargento brand, started here with my grandfather over 70 years ago,” says Louie Gentine, CEO of Sargento Foods Inc. and third-generation family owner.

Sargento was founded in 1953 in Plymouth, Wisconsin, by Leonard Gentine. He and his design partner Bill Lindstedt developed a system to vacuum seal cheese in plastic, a groundbreaking new packaging method that allowed cheeses to last longer. Soon after, Sargento would improve this technology and add new processing methods to introduce prepackaged sliced and shredded natural cheese to the industry. Sargento also introduced the peg bar display to dairy aisles in grocery stores in 1969, helping to raise the profile of its cheeses.
In 1986, the company implemented a resealable Zip Pak, making Sargento cheeses the first perishable food item to have a reclosable feature on its package.

More recently, Sargento has continued leading natural cheese innovations with its Ultra Thin Slices, introduced in 2012, and Balanced Breaks, introduced in 2015. Both these products are winners of the Nielsen Breakthrough Innovation Award.

Louie Gentine notes that Balanced Breaks is the branded category leader in multi-component snacking at retail.

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USDA confirms avian influenza in cows, but milk remains safe

March 29, 2024

WASHINGTON — Earlier this week, USDA confirmed highly pathogenic avian influenza (HPAI) in two dairy cattle herds in Texas and two herds in Kansas. USDA also confirmed there is no threat to human health, and milk and dairy products remain safe to consume.

USDA, FDA and the Centers for Disease Control and Prevention (CDC), as well as state veterinary and public health officials, recently have been investigating an illness among primarily older cows in Texas, Kansas and New Mexico that is causing decreased lactation, low appetite and other symptoms. As of Monday, unpasteurized clinical samples of milk from sick cattle collected from two dairy farms in Kansas and one in Texas, as well as an oropharyngeal swab from another dairy in Texas, have tested positive for HPAI.

Additional testing was initiated last Friday and over the weekend because farms also have reported finding deceased wild birds on their properties. Based on findings from Texas, the detections appear to have been introduced by wild birds. Initial testing by the National Veterinary Services Laboratories has not found changes to the virus that would make it more transmissible to humans, which would indicate that the current risk to the public remains low, according to USDA’s Animal and Plant Health Inspection Service (APHIS).

Federal and state agencies are moving quickly to conduct additional testing for HPAI, as well as viral genome sequencing, so that the agencies can better understand the situation, including characterization of the HPAI strain or strains associated with these detections.

“At this stage, there is no concern about the safety of the commercial milk supply or that this circumstance poses a risk to consumer health,” APHIS says in an update published Monday. “Dairies are required to send only milk from healthy animals into processing for human consumption; milk from impacted animals is being diverted or destroyed so that it does not enter the food supply. In addition, pasteurization has continually proven to inactivate bacteria and viruses, like influenza, in milk. Pasteurization is required for any milk entering interstate commerce.”

• Enhanced biosecurity

As information related to an illness affecting dairy cows in several states began to circulate over the past two weeks, APHIS worked with state veterinary authorities as well as federal partners including FDA to swiftly identify and respond to detections and mitigate the virus’ impact on U.S. dairy production. Dairy farmers also have begun implementing enhanced biosecurity protocols on their farms, limiting the amount of traffic into and out of their properties and restricting visits to employees and essential personnel, according to a joint statement issued Monday by the National Milk Producers Federation, International Dairy Foods Association, U.S. Dairy Export Council and Dairy Management Inc.

“Avian influenza is an animal health issue, not a human health concern. Importantly, mammals including cows do not spread avian influenza — it requires birds as the vector of transmission, and it’s extremely rare for the virus to affect humans because most people will never have direct and prolonged contact with an infected bird, especially on a dairy farm. As a precaution, dairy farmers are taking important measures to protect their workers,” the dairy industry statement explains.

The National Dairy FARM (Farmers Assuring Responsible Management) Program offers several valuable biosecurity resources providing dairy farmers with tools to keep their cattle and dairy businesses safe, the statement adds, and dairy producers who believe their cattle may be affected have been instructed to report these signs immediately to state veterinarians or APHIS.

“The U.S. dairy industry will continue to work with the U.S. federal government, trading partners and the World Organization for Animal Health (WOAH) to encourage adherence to WOAH standards and minimize all unnecessary or unfair trade impacts,” the dairy groups also note. “It is essential that trading partners do not impose bans or restrictions on the international trade of dairy commodities in response to these and future notifications and rely on the science-based food safety steps taken in U.S. dairy processing, namely pasteurization, in preserving market access.”

According to Ever.Ag, the current situation doesn’t point to a major supply crisis. However, the situation could change, so it’s too early to make firm predictions.

“At a high level, ‘sick cows’ isn’t a headline that dairy marketers want to see. If consumers react, they probably direct their attention to beverage milk. We doubt the average consumer draws a line between a story like this and cheese on a fast-food burger. If that’s an accurate assessment, we could see modest negative impact,” Ever.Ag says of demand implications.

“We can imagine a potentially larger issue around exports,” Ever.Ag adds. “Is there a chance that importing nations issue restrictions slowing the flow of U.S. product into their markets? That would be potentially damaging to prices.”

APHIS notes that for dairies whose herds are exhibiting symptoms, on average about 10% of each affected herd appears to be impacted, with little or no associated mortality reported among the animals. Milk loss resulting from symptomatic cattle to date is too limited to have a major impact on supply, and there should be no impact on the price of milk or other dairy products, APHIS adds.

“This is a rapidly evolving situation, and USDA and federal and state partners will continue to share additional updates as soon as information becomes available,” APHIS says.

CMN


Capacity ramps up for cheese, milk, ingredients across U.S.

March 29, 2024

Editor’s note: Plants in Progress is a special segment spotlighting new facilities and expansion in the U.S. dairy sector — from initial groundbreaking to full operation and everything in between.

By Alyssa Mitchell

MADISON, Wis. — Across North America, production of cheese, innovative beverages and dairy ingredients is ramping up as new facilities, plant expansions and equipment upgrades boost output to meet worldwide demand for U.S. dairy products.

“We are experiencing one of the most exciting periods of investment and expansion in the history of dairy processing,”
Michael Dykes, president and CEO of the International Dairy Foods Association, said in a recent guest column for Cheese Market News.

That growth certainly is reflected in our latest installment of Plants in Progress. In this highly anticipated special section, you’ll read about innovations in dairy beverages to create protein-forward and shelf-stable products as well as specialty ingredient development to help cheesemakers boost flavor, texture and other attributes in their products.
Not to mention, capacity for cheese itself — from Italian to American and Hispanic styles — is growing as consumers continue to see cheese as a go-to for their favorite snack, a cheese board for entertaining and even an indulgence for dessert.

Beyond consumer demand, many of the companies featured also are investing in state-of-the-art facilities for their employees and expanding their workforces to support local communities.
Please read on for more on these Plants in Progress ...

• Artisanal Caves LLC, Utica, New York

Artisanal Caves LLC, the operating unit of Artisanal Brands and owner of the Artisanal Premium Cheese brand, is undergoing a significant overhaul of its 18,000-square-foot cheese fulfillment center and bakery in Utica, New York to build the Cheese Cave and the Wine Cellar & Barrel Room. The Cheese Cave will offer an extensive variety of domestic and international artisan cheeses aged to peak ripeness. Adjacent will be a place to enjoy a cheese-centric menu. The bakery is being upgraded with seating, along with a Cookie Bar, drive-up window and a wider offering of products.

Artisanal Executive Chairman Daniel Dowe says drawings and permits are completed, and the company is closing on financing to be able to start construction soon.

The company notes its central New York location is the first of several regional shipping hubs that Artisanal intends to open to substantially reduce the distance and shipping costs of online orders from www.artisanalcheese.com.
Dowe says the new Artisanal Cave format will be the inverse of the once-popular Manhattan restaurant, the Artisanal Fromagerie & Bistro, which had a small cheese cave and a large eatery. The next chapter for Artisanal will be a large walk-in cheese aging area in cave-like conditions with precise temperature and humidity controls. Visitors will be able to explore and learn more about cheese and pairings along with their culinary experiences.

• Bates Family Farm, Cedar Bluff, Virginia

Bates Family Farm LLC recently announced it will create 12 new jobs and invest nearly $1 million to relocate its manufacturing facility to a 40,000-square-foot building owned by Russell County, Virginia, to meet growing consumer demand for its skin care products. The new space will allow for the development of new products, additional product capacity and warehouse space. Additionally, Bates Family Farm will be constructing a new creamery to produce food products, bottled goat milk and artisan cheeses for wholesale and retail distribution.

Funding for the expansion was given in part through an Agriculture and Forestry Industries Development (AFID) Fund through the state of Virginia. The Virginia Department of Agriculture and Consumer Services worked with Russell County and the Russell CountyIndustrial Development authority to secure the project for the commonwealth. Gov. Glenn Youngkin also approved a $70,000 grant from the AFID Fund, which Russell County will match with local funds.

“This AFID grant award and the support we have received from Russell County are critical factors in our decision to move forward with this project. We are honored to grow our business in the county we call home and be part of Virginia’s agricultural community,” says Joseph Bates, CEO of Bates Family Farm.

• Bongards Creameries, Perham, Minnesota

Bongards Creameries in September began an expansion project announced last year at its plant in Perham,
Minnesota.

The expansion/modernization of the Perham plant will consist of a new 70,000-square-foot cheese cooler, new cheese vats — which started up this fall — a new whey pasteurizer that came online in August, a new permeate evaporator that started up in January, a new milk intake to be completed in July and a new deproteinized whey dryer/permeate packaging system/permeate warehouse, which will be completed in early 2025. Additionally, all of the equipment that is not being replaced will be expanded by 30% to handle the additional volume the company will be running through the plant once the project is complete.

Total area of the upgrades mentioned above is approximately 150,000 square feet, which will more than double the facility’s capacity, says Daryl Larson, president and CEO of Bongards Creameries. Total project cost is estimated at $125 million.

Earlier this month, National New Markets Fund LLC (NNMF), an affiliate of Los Angeles-based SDS Capital Group, announced it has invested $17.5 million of its New Markets Tax Credit (NMTC) allocation the project. The NNMF investment utilizes capital from the NMTC program, created by Congress in 2000 and administered by the U.S. Treasury Department. Bongards received the NNMF allocation as part of a complex $81 million New Markets Tax Credit financing package. Dudley Ventures is the investor purchasing the NMTCs from each of the participating NMTC allocatees: NNMF, Mascoma Community Development, Waveland Community Development, Rural Development Partners and DV Community Investment.

“With this latest investment, we will be able to continue supporting the growth of our business, allow our current farmer-owners to expand and allow us to bring on new members,” Larson says, noting the company plans to add 22 full-time positions once the project is complete.

Once complete, the Perham facility will process 5.5 million pounds of milk per day, 588,000 pounds of cheese per day and 350,000 pounds of dried whey products per day.

• Dairy State Cheese LLC, Rudolph, Wisconsin

Dairy State Cheese currently is undergoing a project to convert manufacturing to 40-pound block Parmesan. The company, which is owned by Cheese Merchants, has fully commissioned the 40-pound block line and will stop producing 640-pound blocks by April 30. It will continue to make American styles for the foreseeable future, notes Mark Dahlstrom, president of Dairy State Cheese.

He adds rather than increase the size of the facility, the project is upgrading the equipment, resulting in increased efficiencies. Dairy State also expanded its employee entrance area and added new amenities.

Cooler space has been racked to handle pallets instead of 640-pound blocks, and a milk separator is being installed and will begin commissioning mid-April, Dahlstrom says. The company will begin installation of a 50-pound whey protein concentrate 80% packaging line in May.

Phase two of the project will commission in early 2025, when Dairy State plans to install eight new vats, four additional towers and two additional salt belts.

“That equipment is sized to allow us to double plant capacity, but without adding new walls,” Dahlstrom says.

Upon completion, which is slated for the second quarter of 2025, the plant will be able to process 3 million pounds of milk each day into cheese production. Finished product production will vary by cheese type.

• Danone North America, Jacksonville, Florida

Danone North America last year announced it will invest up to $65 million over the next two years to create a new bottle production line in Jacksonville, Florida. The investment will support Danone North America’s long-term growth strategy and will deliver key benefits across the U.S. business, including advancing operational excellence, enabling flexibility in bottle design, accelerating the company’s sustainability goals and driving cost efficiencies.

The $65 million investment will increase production of several of Danone’s coffee and creamer brands in the United States, including International Delight, Silk and SToK. It also serves to meet consumer demand in these categories while supporting the company’s sustainability goals by reducing overall water consumption, decreasing carbon emissions and accelerating the company’s goal of packaging circularity.

Construction has commenced on the expansion, which will create up to 40 new full-time jobs with competitive wages and benefits, and is expected to be complete by the end of this year, says Marissa Lundstrom, director of operations communications, Danone North America.

• Darigold Inc., Pasco, Washington

Darigold Inc. is constructing a new production facility in Pasco, Washington.

When fully operational, the $600 million facility will process approximately 8 million pounds of milk per day from more than 100 dairy farms in surrounding communities.

Chris Arnold, vice president and head of communication for Darigold, says building construction continues to move forward, and the first pieces of processing equipment are being installed inside the building. More than 70% of process equipment has been fabricated, and utility equipment start-up will begin in the coming months.

“We plan to start hiring the first wave of plant process employees this summer,” he says.

When fully operational, the facility will have the capacity to produce approximately 175 million pounds of butter and nearly 280 million pounds of powdered milk annually.

• Emmi Roth USA, Stoughton, Wisconsin

Emmi Roth’s new 134,000-square-foot headquarters and cheese conversion facility in Stoughton, Wisconsin, was complete late last year. A ribbon-cutting ceremony was held at the new location Nov. 29.

Emmi Roth leadership, Emmi Group representatives, and state and local officials were in attendance, including Tim Omer, president of Emmi Roth, Jonas Leu, executive vice president of the Americas for Emmi Group, and Wisconsin Gov. Tony Evers. The ceremony was followed by a reception featuring Emmi Roth cup, bag, wedge, shred and crumble cheeses that will be processed in the new facility.

The facility is the biggest sustainability project in Emmi Roth’s history. It is entirely electric to help the company meet its Net Zero by 2050 goals.

The Stoughton location adds to existing Emmi Roth locations in Monroe, Platteville and Seymour, Wisconsin.

• FlavorSum, Kalamazoo, Michigan

FlavorSum, a North American flavor producer, recently completed construction and opened a 35,000-square-foot expansion at its Kalamazoo, Michigan, facility. The increased footprint enhances the site’s emulsion, extraction and warehousing capacity and includes investment in process automation to increase efficiency, quality and safety.

The site also has an Innovation Center pilot plant featuring new ultra high temperature and high temperature short time pasteurization processing capabilities to support FlavorSum’s Dairy Center of Excellence.

In addition to Innovation Centers in Kalamazoo, Michigan, and Mississauga, Ontario, FlavorSum is opening a 10,000-square-foot Innovation Center in Marlton, New Jersey. The center has an expanded flavor creation lab and analytical and application spaces to facilitate collaborative sessions with a technical team that has expertise in food and beverage flavor solutions. The New Jersey Innovation Center also will house the Beverage Center of Excellence that features pilot capabilities for carbonation, canning, tunnel pasteurization and hot filling.

An official ribbon-cutting and grand opening ceremony will be held in the coming weeks.

• Foremost Farms USA, Middleton, Wisconsin

Employees of Foremost Farms USA, a world-class producer of cheese, butter and dairy ingredients supplied to national and international markets, are settling in nicely to the cooperative’s new headquarters, located in the Wisconsin Trade Center building in Middleton, Wisconsin.

Foremost Farms began the transition from its former headquarters in Baraboo, Wisconsin, in late 2022. Employees made the transition to the new Middleton location in October 2022, and the company continued to build out the space through completion in 2023.

Declan Roche, senior vice president and chief commercial officer, Foremost Farms, says the new location offers the company more growth and innovation opportunities as well as access to a larger talent pool in the Madison, Wisconsin, area, and proximity to the University of Wisconsin-Madison’s Center for Dairy Research.

A highlight of the new space is a state-of-the-art Culinary Center where customers can meet one on one with Foremost Farms experts to test products and explore further innovation.

“When you make commodity products, you’re not always aware of what the end uses are,” Roche notes, “but that’s what this center is all about — building customer relationships and understanding their wants and needs.”
In addition to a welcoming front kitchen area for meeting, testing and tasting products, the space includes an extensive lab with expanded freezer space and ability for future expansion.

Another highlight of the new headquarters is a revamped, open-concept office model for increased collaboration and transparency, Roche notes. Spread across two floors with an open staircase connecting the levels, employees have the ability to easily engage with one another in their workspaces. Each floor features meeting rooms of various sizes so employees can break into teams. Executives are located throughout the office space, embedded with their teams, inviting more transparency and communication.

• GEA, Janesville, Wisconsin

Operations began earlier this year at GEA’s new 86,000-square-foot fabrication, repair, logistics and training facility in Janesville, Wisconsin. Representing an investment of $20 million to meet demand from the company’s growing Midwest customer base, the facility has production capabilities to finalize separator, decanter, valve and pump assembly. The new site has a strong emphasis on sustainability, with environmentally friendly measures including solar panels, water reuse systems and a state-of-the-art building management system.

“Opening the new Janesville facility as anticipated in December 2023 represents a significant step toward meeting our customers where they operate,” says Azam Owaisi, CEO, GEA North America. “It highlights GEA’s commitment to product quality and service excellence. We are excited to become a vibrant employer and partner for the Janesville community.”

Meanwhile, GEA also is investing another $20 million in a state-of-the-art technology center focused on alternative proteins in Janesville. Construction is expected to begin in the coming months with an anticipated opening in 2025.

The new facility will specialize in piloting microbial, cell-based and plant-based food technologies and aims to bridge the current gap in the market for industrial-scale production of alternative proteins. The technology center will help gear the company up to support the industry’s anticipated growth, as indicated in a GEA survey last year, which found that chefs expect a quarter of meals to incorporate alternative proteins by 2040.

• Great Lakes Cheese Co., Franklinville, New York

Great Lakes Cheese Co. is nearing completion on construction of a new cheese manufacturing and packaging plant in Franklinville, New York. With a capital investment exceeding $700 million, the project is both the largest infrastructure investment in the company’s history and the largest privately funded project in New York state, officials say. Hiring is well underway with nearly 100 new employees already hired, with the total workforce reaching 500 when complete.

The new plant will replace the existing facility in Cuba, New York, upon completion. Although the Cuba facility is planned to cease operations, the company still is evaluating with state and local officials possible future uses for the site, company officials say.

The Franklinville packaging operation commenced production in February and will be fully operational in 2025, officials add.

• High Desert Milk, Burley, Idaho

High Desert Milk is upgrading its facility in Burley, Idaho, with a new cream cheese production line, adding about 17,000 square feet of new production floor space and a starting capacity of 20 million pounds of cream cheese per year. High Desert Milk has the ability to ramp up production to 80 million pounds through future equipment additions, company officials say.

“Cream cheese allows for the use of our excess cream and at the same time diversifies our product base,” says Shawn Burton, chief operating officer, High Desert Milk. “In July 2022, we started to take bids for the cream cheese addition, which we started to build later that year.”

He adds that the facility is mostly built and High Desert Milk began commissioning the process lines in February.
The company will be producing 30-pound commercial-size cream cheese blocks, as well as a 3-pound loaf and 8-ounce brick sizes, and has purchased equipment to add a consumer-size tub within the year. The market for these lines primarily will be private label or co-manufactured products for clients, some of whom currently partner with High Desert Milk, Burton says.

• Hilmar Cheese Co., Dodge City, Kansas

Hilmar Cheese Co. progresses toward the opening of its new cheese and whey protein site in Dodge City, Kansas. Production of 40-pound blocks of cheese and a wide range of high-protein whey ingredients will begin later this year, says Denise Skidmore, director of education and public relations at Hilmar.

The building is enclosed, and equipment installation continues. Hilmar provided a thank you lunch for more than 500 contractors earlier this month. The site leadership team continues to hire additional team members with job fairs and community activities planned for the summer.

• HP Hood, Batavia, New York

The Genesee County Economic Development Center (GCEDC) board of directors approved a final resolution for HP Hood’s $120 million proposed expansion project at its meeting earlier this month. The 32,500-square-foot expansion project will create 48 new jobs while retaining 455 full-time employees, adding to the 1,000-plus professionals in the food processing industry and cluster with more than 1.2 million square feet of food and beverage facilities at the Genesee Valley Agri-Business Park.

HP Hood’s expansion, expected to break ground next month, accommodates its automatic storage and retrieval system refrigerated warehouse. The project also will include new batching and processing systems and other upgrades that will allow the company to increase capacity and begin a new production line.

HP Hood’s investment is projected to result in a local economic impact of $49.87 million in wages and tax revenue. The GCEDC approved sales tax exemptions are estimated at $4.52 million, a property tax abatement is estimated at $549,705 based on an incremental increase in assessed value, and a mortgage tax exemption is estimated at $536,000, bringing the value of the proposed financial agreements to approximately $5.6 million. For every $1 of public benefit, HP Hood is investing $16 into the local economy.

• Leprino Foods Co., Lubbock, Texas

Leprino Foods continues construction on its new manufacturing facility in Lubbock, Texas, which it broke ground on in 2022. Hiring will be a priority this year, as the company anticipates opening Phase I in early 2025, with the capability of processing 4 billion pounds of milk each day at the new plant. At full capacity, the 850,000-square-foot plant will employ about 600 people.

“We’ll continue to build upon our heritage of continuous innovation and industry leadership,” says Mike Durkin, president and CEO, Leprino Foods.

• Maola Local Dairies, Philadelphia

Maola Local Dairies, owned by Maryland & Virginia Milk Producers Cooperative Association (MDVA), has purchased a dairy processing plant in Philadelphia previously owned by HP Hood. The acquisition, which was brokered by Pittsburgh-based Harry Davis & Company, will generate new opportunities to bring sustainable milk products into Pennsylvania. The company is planning to expand capacity and upgrade the plant, with details to follow in the coming months.

Maola Philadelphia is an ultra-pasteurized product plant focused on quality, customer service and sustainability together with customers, employees and family-owned farms. The plant produces regular and flavored milks, creams of various fat levels, half and half, eggnog and ice cream mixes. The plant, which has more than 170 employees, offers packaging in gable top pint, quart and half-gallon containers, portion control cups and 2.5-gallon bags. It adds to MDVA’s existing processing capacity in High Point, North Carolina; Landover, and Laurel, Maryland; and Newport News and Strasburg, Virginia.

“We are dedicated to the existing team at Maola Philadelphia as we work to grow capacity at the plant while we produce high-quality dairy products with the customer service our valued customers expect and deserve,” says Jay Bryant, CEO, MDVA.

• Nelson-Jameson, Jerome, Idaho, and Marshfield, Wisconsin

Nelson-Jameson earlier this year announced that its current distribution operation in Twin Falls, Idaho, is relocating to its new 45,000-square-foot strategic distribution center in Jerome, Idaho. The company broke ground on the Jerome location in September 2022 as part of a strategic plan to open its most technologically advanced facility yet. Jerome is one of five Nelson-Jameson distribution centers in the United States to support its core operation of offering a broad range of food processing products and services that help companies uphold the highest standards of safety and compliance.

“Nelson-Jameson’s commitment to the growth of the food processing industry in the Pacific Northwest is exemplified by our company’s expansion in Idaho’s Magic Valley. Our substantial investment in the Jerome distribution center underscores our dedication to the region while prioritizing food quality and safety for our customers,” says Mike Rindy, president of Nelson-Jameson.

The Jerome facility includes approximately 1.5 million cubic feet of combined storage, office space, refrigerated and frozen storage areas, and a service and maintenance area. The company designed the center to align with its forward-thinking environmental goals, including efforts to reduce its carbon footprint and improve sustainability for the food processing industry overall. Construction of the facility includes architecturally embedded, energy-saving features, including insulated concrete tilt wall panels, all LED lighting, occupancy sensors for lighting, high-efficiency HVAC systems, electronically controlled warehouse ventilation and energy-efficient warehouse storage systems.

Peterson Brothers from Twin Falls was the general contractor for the Jerome distribution center, and Excel Engineering from Fond Du Lac, Wisconsin, served as the efficiency design team.

A grand opening event is planned for the near future.

Meanwhile, Nelson-Jameson late last year announced the launch of its newly expanded Service & Repair Workshop and Training Center in Marshfield, Wisconsin. The company has long maintained an “education-first” philosophy and currently offers equipment repair and service training to suppliers and customers. The new facility more than doubles its existing space to a total of 1,450 square feet and includes both in-person and virtual training capabilities.

The facility has been designed for future service growth as well as educational opportunities. Nelson-Jameson will host its own training workshops on topics such as valve, pump and plate heat exchanger maintenance, tech training and safety training, and will develop custom workshops for individual customer needs. The company also will open the Service Training Center to suppliers to conduct partner-supported training workshops within the expanded Service & Repair area. The new space includes upgraded virtual technology features to facilitate connections between customers, suppliers and service teams across the nation.

• Orbis, Urbana, Ohio, and Greenville, Texas

Orbis Corp., an international leader in reusable packaging, late last year announced it has expanded its manufacturing facility in Urbana, Ohio. The expansion adds 30% more space for the production of Orbis totes and pallets and allows the company to add more presses and tools, increase capacity and shorten lead times.

“A more sustainable supply chain starts with reuse. Our customers rely on us to help them move their goods in the supply chain more sustainably with reusable packaging,” says Norm Kukuk, president for Orbis. “This expansion gives us the flexibility and capacity to enhance production of our packaging products. The people of our Urbana plant are dedicated, committed and focused on serving the customer. This expansion gives them the infrastructure to make that possible.”

Reusable packaging products produced at the plant are used in many industries, including automotive, food, beverage and consumer packaged goods, the company notes.

“This new facility is the culmination of a 13-year-long effort to revitalize the former site and bolster the community,” says Rich Ebert, director of the Champaign Economic Partnership, which works with Orbis. “As a community, we’re thrilled that Orbis Corp. has chosen to expand its presence here in Urbana. Its dedication to providing reusable packaging helps meet the sustainability demands of today’s supply chain.”

Meanwhile, Orbis also recently announced it has entered into a lease-to-own agreement for manufacturing space in Greenville, Texas, with EPM Partners of New York. The agreement includes 420,000 square feet of manufacturing space that will be used to produce reusable pallets, totes and bulk containers. Improvements and infrastructure will be required to prepare the space for Orbis’ manufacturing activities. Orbis also will enter a lease agreement with EPM Partners for 240,000 square feet of warehousing space in the same building.

Orbis says it expects to add more than 190 employees within two years of the lease commencement in order to support operations at the new plant. The plant, which is located about 50 miles northeast of Dallas, is projected to begin some operations by the end of 2024.

• Oregon State University Extension, Corvallis, Oregon

Oregon State University (OSU) Extension is in the process of a renovation of a former school theater that is being revamped to accommodate a dairy pilot plant and creamery. Design is complete, and the dairy is working with contractors on scaling up automation to enable smart manufacturing in the future, says Lisbeth Goddik, OSU Dairy Processing Extension specialist.

“We’d like the pilot plant to be a showcase for the next generation in manufacturing,” she says.

Total square footage of the creamery itself is estimated to be 4,500 square feet, she adds, noting there also is a planned quality control lab not included in that estimate, as well as a teaching lab for students.

Some of the existing theater space that was not utilized will become the new home for the OSU winery,
Goddik notes.

The project is expected to be complete in spring 2025.

• Panhandle Products, Dumas, Texas

Panhandle Products LLC, a locally owned cheese and whey manufacturing plant located in the Texas Panhandle, began production of American-style 40- and 640-pound cheese blocks in mid-2023. The facility is on track for a planned production ramp up this year, officials say.

Established in 2021, Panhandle Products processes milk daily, producing American-style cheese and whey protein powders. The company’s Mild Cheddar earned a second-place award at the recent World Championship Cheese Contest.

“We will stay steadfast to a safe and positive work environment, dedicated to our employees and our family. We are looking forward to establishing and sustaining a state-of-the-art facility,” officials say.

• Renards Cheese, Algoma, Wisconsin

Renards Cheese late last year broke ground on a new production facility on County Highway S in Algoma, Wisconsin.
The expansion, which encompasses three phases, will include a new production facility as well as an on-site exact-weight cut-and-wrap operation and warehouse.

The company is putting the finishing touches on the first phase of the 50,000-square-foot project, which largely was completed last fall, says Ann Renard, co-owner of Renard’s Cheese. The exact-weight cut and wrap is in full operation, and new vats and presses, including a trial vat, are installed, she says. A new wastewater holding system also is in place.

Phase 2 of the expansion will be complete in early June, while Phase 3 is expected to begin in late fall to early spring of 2025, dependent on lead times for supplies, with an expected build time of 12 to 14 months, Renard says. The new facility will be able to produce up to 12 million pounds of cheese per year.

• Saputo Dairy USA, Franklin and Reedsburg, Wisconsin, and Tulare, California

Saputo has begun operations at its recently converted state-of-the-art goat cheese manufacturing facility in Reedsburg, Wisconsin. The company will transition production from its recently closed facility in Lancaster, Wisconsin, to Reedsburg, along with that of its facility in Belmont, Wisconsin, the closure of which was previously announced.

Construction also is underway on a greenfield facility in Franklin, Wisconsin, to consolidate and modernize Saputo Dairy USA’s cut-and-wrap activities. This state-of-the-art facility will become the center of Saputo’s expanded cut-and-wrap capabilities in the Midwest and is expected to result in the creation of 600 jobs. This new facility represents an investment of C$240 million and is slated to be operating at full capacity by the third quarter of fiscal 2025.

Once operational, Saputo anticipates transferring existing packaging operations from other manufacturing sites to its new facility in Franklin.

Meanwhile, after ceasing cut-and-wrap activities at its Bardsley Street facility in Tulare, California, as announced in fiscal 2022, Saputo is investing C$75 million to convert this location into a String cheese packaging facility. The investment will help support the company’s growth ambitions and sustain its leadership position in the String cheese product category, officials say. The facility is slated to be operating at full capacity by the third quarter of fiscal 2025.

• Suntado LLC, Burley, Idaho

Suntado LLC last year broke ground on a new state-of-the-art shelf-stable milk and alternative beverage manufacturing facility in Burley, Idaho. The multimillion-dollar facility will process approximately 400,000 pounds to 1 million pounds of local milk per day into a combination of organic, conventional and A2 milk products.

“The plant has gone through its testing phase and is preparing to send commercialized product at the end of April through June on all of the filling lines. Startup has been good,” says Tory Nichols, Suntado business development leader.
He adds that Phase 2 planning officially will begin in June or July of this year.

“The plant is starting up with a first shift, and by August/September, it will be a fully operational plant with all shifts,” Nichols says.

He adds that the plant has its certificate of occupancy and USDA/ISDA plant number, and is finalizing its third-party food safety audit.

Nichols is part of the leadership team reporting directly to Suntado LLC owners Jesus Hurtado and Dirk Reitsma.
The Suntado facility will specialize in processing Class I and Class II milk. The plant also will serve as a co-packer for an array of products including private label and other recognized brands. The product lineup is diverse, ranging from sports, children and adult nutrition to innovative coffee products and alternative beverages. A notable feature of these products will be their packaging, ensuring both extended-shelf-life and aseptic conditions.

Utah-based Big-D Construction is the design-builder for the new facility and has been assisting Suntado in preconstruction and engineering efforts since November 2021.

• Tillamook County Creamery Association, Decatur, Illinois

Tillamook County Creamery Association (TCCA) last year announced plans to open an ice cream manufacturing facility in Decatur, Illinois, in late 2024.

The Decatur facility is TCCA’s first owned and operated manufacturing facility outside of Oregon and is the only facility solely dedicated to ice cream production. It previously was owned by Prairie Farms, which also used it for ice cream production until it was closed in early 2022.

TCCA has spent the past year updating the plant to bring it up to TCCA’s manufacturing quality standards with a goal of October 2024 for the first full ice cream production run.

The new plant is expected to create approximately 45 new jobs in the Decatur community. It will manufacture Tillamook family-size (48 ounce) ice cream as well as Tillamook foodservice (3 gallon) ice cream.

• University of Wisconsin-River Falls, River Falls, Wisconsin

A grand opening ceremony and ribbon-cutting was held Oct. 20 for the Wuethrich Family/Grassland Dairy Center of Excellence at the University of Wisconsin-River Falls (UWRF). The remodeled 6,000-square-foot, $9 million plant in the Agricultural Science Building features brand new equipment and will serve as a hub for students and dairy industry employees to engage in high-tech, hands-on learning. UWRF officials say the first batches of cheese have been made in recent weeks.

Work began 11 years ago to begin building a new dairy pilot plant to replace the longtime plant at UW-River Falls that had become outdated. The old plant ceased operations in 2018 because of its antiquated equipment.

Former dairy pilot plant manager Michelle Farner worked with agriculture industry leaders and the Wisconsin Department of Agriculture, Trade and Consumer Protection, among others, to come up with funding to build the new plant, renamed the Wuethrich Family/Grassland Dairy Center of Excellence after $1 million in donations from the Greenwood, Wisconsin, business helped make the plant a reality.

Late last year, UWRF announced that Farner was leaving the institution and named Rueben Nilsson the new dairy pilot plant manager. Nilsson has spent nearly two decades in the dairy industry. He has worked in numerous jobs at several dairy plants and has overseen operations at them.

“I wanted to return to the vats, to have a direct hand in helping create what gets produced,” Nilsson says. “I really do enjoy the ins and outs of creating, of working on details and being able to find ways to make better-tasting products.”

• Walmart, Valdosta, Georgia, and Robinson, Texas

Walmart late last year announced groundbreaking on a new milk processing facility in Valdosta, Georgia, that will create nearly 400 Walmart jobs in the Valdosta community. It will bolster Walmart’s capacity to meet the demand for high-quality milk while making its supply chain more resilient and building more transparency around sourcing.

Using ingredients sourced from local farmers, the new facility will process and bottle a variety of milk options including gallon, half gallon, whole, 2%, 1%, skim and 1% chocolate milk for the Walmart Great Value and Sam’s Club Member’s Mark brands. The products from the facility will serve more than 750 Walmart stores and Sam’s Clubs in the Southeast.

Meanwhile, this month Walmart also announced the planned opening of another owned and operated milk processing facility in Robinson, Texas. The new facility is slated to open in 2026 and will create nearly 400 new jobs in the Robinson community.

The new facility will allow Walmart to meet the growing demand from customers for high-quality milk, while providing transparency about where its products are sourced and making the supply chain more resilient. The facility will process and bottle a variety of milk options, including gallon, half gallon, whole, 2%, 1%, skim and 1% chocolate milk for the Walmart Great Value and Sam’s Club Member’s Mark brands. The products from the facility will serve more than 750 Walmart stores and Sam’s Clubs throughout the South including Texas, Oklahoma, Louisiana and parts of Arkansas and Mississippi.

CMN


Sustainability top of mind for consumers, partners, industry

March 29, 2024

By Rena Archwamety

DAVIS, Calif. — U.S. consumers are showing increasing interest in sustainably produced food and beverages, as dairy farmers are advancing sustainable practices and working to communicate these to consumers, according to speakers at this week’s California Sustainability Summit. The event was held Tuesday at the University of California Davis Conference Center and virtually, and it was hosted by Dairy Cares, California Dairy Research Foundation, California Milk Advisory Board (CMAB), California Dairy Quality Assurance Program and the Dairy Council of California.

CMAB CEO John Talbot presented findings from an extensive study completed at the end of last year to look at sustainability and dairy in California. According to the study conducted by Hall & Partners for CMAB, more than 60% of people are very concerned with sustainability. This is higher in California, and highest among households with children.
In California, the top general association with sustainability was recyclable packaging, while the top dairy association with sustainability was animal care. The study also indicated that consumers rarely look beyond the package and claims. Scientific terminology confuses consumers, and they tend to gravitate toward familiar topics.

“Topics like water conservation and recycling is what people know and understand. We believe as they become more educated in sustainability, they will seek out more technical topics,” Talbot said, adding that sustainability is more palatable to consumers when paired with other traditional messaging.

Talbot then honed in on what the study found was the most influential dairy sustainability messaging. When it comes to purchasing dairy products for consumers or their household, the following sustainability topics were most influential:

• Animal care — for example, produced by cows that are well cared for, hormone- and antibiotic-free, and fed organically formulated cow feed.

• Longevity — food is produced sustainably with future generations in mind, and in a way that conserves natural resources.

• Environmental impact — Food is produced with renewable energy, using climate- and planet-smart production methods or with zero emissions. It is a greenhouse-gas-, climate- and carbon-neutral product and is water-conscious.

• Packaging — made from biodegradable materials, recycled content, is widely accepted by recycling programs or is plastic-free.

Talbot shared some resources and initiatives CMAB has worked on to help convey dairy’s sustainability to consumers. One was its “Cowpower” campaign, which included a video, social media campaign and signage on busses and at bus stops.

“Our goal was to try and talk about digesters in a way that would be simple, fun and entertaining,” Talbot said. “It actually did really well from a consumer perspective.”

In the future, he said, CMAB is working on general messaging updates, package-specific messaging research and in-market package testing, as well as extensions to the Cowpower campaign that include byproducts used in feed and on-farm water use/recycling.

• Supply chain partnership

Another session focused on a partnership between Starbucks and California Dairies Inc. (CDI) that helps both the coffee business and the dairy cooperative achieve their sustainability goals.

The sustainability partnership is modeled after Starbucks’ work with farmers in the coffee sector. Its goal is to co-create opportunities for California dairy farmers and accelerate progress further and faster than the industry average.
“For over 50 years, Starbucks’ mission has been to really inspire and work on the limitless possibilities of human connection. Our future is tied to farmers and their families’ futures. Sustainability is part of what we do,” said Angela Anderson, director of sustainable dairy at Starbucks.

Anderson, who previously worked for the Innovation Center for U.S. Dairy, noted that while the dairy industry had set aggressive goals to be carbon neutral by 2050, Starbucks wants to have a reduction by 2030. To do this, Starbucks went directly to the dairy cooperatives and decided to cost share and co-invest to see if their work could lead to further and faster progress.

Darrin Monteiro, vice president of sustainability and member relations for CDI, said the cooperative members were hesitant at first, but they jumped in to visit Starbucks’ headquarters, meet the team and learn about their work with their coffee farmers.

“It was a real privilege to learn about the coffee standard they have, bringing up their farmer base to stabilize them and give them tools and resources,” Monteiro said. “Reviewing that standard provided us with a basis of, this is a company we can work with, a team we can unite with and find a right solution.”

In the last 12-18 months of this pilot program, Monteiro said CDI and Starbucks are learning from each other, and that it’s “amazing” how flexible Starbucks and the dairy farmers have been.

“We realized dairy farmers have very similar values to what we do,” Anderson added. “It was surprising how quickly the farmers were involved in the program.”

Anderson explained that instead of sourcing requirements, this sustainability program is really focused on a partnership, and partnerships with cooperatives in various regions each look a little different. The program incorporates the existing National Dairy FARM (Farmers Assuring Responsible Management) animal care program and then asks where the farmers are going above and beyond in these areas. If so, Starbucks asks how it can incentivize these practices and get others to join in.

“We have a great national consulting partner that puts together a sustainable improvement plan — two to four key areas you could work on and invest in, and their potential impact on greenhouse gas or groundwater. If they want to do it, they can apply for cost shares with us. We do not want to put a farmer into debt by doing a program,” Anderson said.

She gave some examples of putting water meters on some participating farms in California to help them understand their water use or if they’re making other water-based decisions. The program also has invested in solar-powered tractors, manure management and feed additives.

“CDI and myself fundamentally believe more partners in the supply chain have to act similar to Starbucks. They have a pool of dollars being used to expedite sustainability,” Monteiro said. “Starbucks found the right track, and we appreciate their openness to work in a fluid model.”

Anderson added that as a coffee company, dairy is Starbucks’ No. 2 commodity, and the company’s global supply chain team saw the need to invest differently in that sector.

“We have to be willing to invest in farmers,” she said. “We’re coming to the table with the dollars to work with farmers to make these changes.”

CMN


FAPRI-MU releases agriculture baseline projections to 2033

March 22, 2024

COLUMBIA, Mo. — The Food & Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) this week released its annual U.S. Agricultural Market Outlook report, which summarizes baseline projections for agricultural and biofuel markets using market data available as of January 2024. FAPRI-MU also is celebrating its 40th year in 2024.

“FAPRI’s spring baseline and subsequent updates offer an understanding of the challenges and opportunities facing agricultural markets,” says FAPRI director Pat Westhoff. “As producers and policymakers evaluate volatile market conditions, the analyses and projections we’ve shared can aid in risk mitigation.”

In its report, FAPRI notes prices for many farm commodities have fallen sharply from their 2022 peaks, contributing to lower farm income and slower food price inflation. While market uncertainty persists, projected prices decline further for crops harvested in 2024, and net farm income falls to the lowest level since 2020.

“Despite a $30 billion drop in net farm income from 2022 to 2023, and another large projected decline in 2024, net farm income remains above annual levels from 2015 to 2020,” Westhoff says. “Still, there’s no question that farm finances are much tighter now.”

This year’s report includes projections out to 2033 for the dairy sector.

According to the report, even with the all milk price averaging above $20 per hundredweight in 2023, the Dairy Margin Coverage (DMC) program paid out more than $1 billion on payments last year as feed costs remained well above average.

Though little change is expected for milk prices in the next couple of years, declining feed expenses will allow finances to improve for many operations, FAPRI notes. The report projects the all milk price to average $20.21 per hundredweight in 2024 and rise to $20.43 in 2025 before declining over the next several years and averaging $19.23 in 2033.

FAPRI notes other dairy product prices fell in 2023 from the lofty levels of the previous year as domestic demand weakened and exports declined for most products.

Butter prices are expected to remain well above most historical years as strong domestic demand remains a key driver, FAPRI says. Spot butter on the Chicago Mercantile Exchange (CME) is projected to average $2.52 per pound this year, down from $2.59 in 2023 but higher than the average prices projected through 2033, though prices will remain above $2 per pound throughout the projection period.

Nonfat dry milk (NDM) prices should see continued recovery as international demand improves following a lull in 2023, the report says. NDM is projected to increase in 2024 to $1.26 per pound and to $1.34 in 2024 before declining to $1.23 by 2033.

Cheese prices could struggle to grow much as increased cheese production capacity may be outpacing domestic demand growth, FAPRI notes. CME cheese is projected to average $1.74 per pound in 2024, even with 2023, and rise to $1.79 in 2025 before slowly declining to $1.75 in 2031 before rising to $1.77 in 2033.

Monthly U.S. dairy cow inventories posted their third-lowest level since the spring of 2016 to begin 2024, the report says. Even as profitability improves with declining feed costs this year, it is expected to take a little time for producers to again increase the milk cow herd. Milk production is expected to grow at an average rate of 1.5% for the next few years, which will require export growth to resume and some domestic demand expansion to keep milk prices at projected levels, the report adds.

To view the full report, visit https://fapri.missouri.edu/wp-content/uploads/2024/03/2024-Baseline-Outlook.pdf.

CMN


Wisconsin dairy groups praise new milk hauling legislation

March 22, 2024

MADISON, Wis. — Wisconsin Gov. Tony Evers yesterday signed Senate Bill 431, authored by Sen. Joan Ballweg, R-Markesan, and Rep. Tony Kurtz, R-Wonewoc, that increases dairy hauling weight limits in the state. The law extends the current allowance for handling fluid milk to all fluid milk products, allowing up to 98,000 pounds over six axles.

Wisconsin dairy organizations praised the signing of this bill into law, which will benefit processors that haul whey to and from dairy plants.

“Wisconsin is a global leader in the production of whey, (and) increasing hauling weight limits for this value-added dairy product will help to keep the industry both sustainable and profitable by reducing fuel consumption, minimizing the number of truck loads and optimizing resource allocation. Creating efficiencies, environmental sustainability and reduced labor needs will strengthen the Wisconsin dairy industry,” says Amy Winters, executive director of the Wisconsin Dairy Products Association (WDPA).

According to Winters, whey, once considered a waste product of the cheesemaking industry, now has become a sustainable value-added product. Wisconsin produces more cheese and dry whey than any other state and is second in the production of whey protein concentrate. Whey typically accounts for approximately 90% to 95% of the milk used; for every 100 pounds of milk converted into cheese, an estimated 90 to 95 pounds of whey are generated, totaling 30 billion pounds annually.

Whey powder and whey protein concentrate are used as value-added ingredients in a wide range of food products worldwide, including processed meat, sausages, health foods, baby food and formula, beverages and confections.

Dried whey represents a significant commercial opportunity for Wisconsin dairy processors, comprising 31% of all the state’s dairy sales abroad, notes the Wisconsin Cheese Makers Association (WCMA), which also supported this bill.

WCMA adds that due to the complexity and cost of drying, whey typically is hauled form cheesemaking plants in liquid form for additional processing. While state regulations allow dairy haulers to transport milk at heavier weight limits on Wisconsin roads, they previously did not account for other liquid dairy products like whey.

“SB 431 facilitates dairy processors’ efforts to transport their liquid whey in an environmentally friendly, financially viable and safe manner,” says Rebekah Sweeney, WCMA senior director of programs and policy. “We’re grateful to Gov. Evers, Sen. Ballweg and Rep. Kurtz for their work to bring this bill across the finish line, and to the Wisconsin Department of Transportation for their partnership.”

WCMA members have expressed how this bill will positively impact their companies and sustainability efforts.

“Thanks to SB 431, BelGioioso stands to reduce the amount of fuel used in transporting loads by nearly 29,000 gallons per year. We’d also reduce our carbon dioxide emissions by 258 metric tons per year,” says Scott Potts of BelGioioso Cheese.

Dave Buholzer of Klondike Cheese Co. adds, “This legislation will help us maximize our resources in so many ways. We’ll be able to use fewer tankers, which means reducing our water usage and cutting down on crowding in our intake area. Less congestion means less administrative work — and more staff time for other tasks that help grow our business.”

In addition to WDPA and WCMA, SB 431 has garnered support from Wisconsin Farm Bureau Federation, Wisconsin Motor Carriers Association, Cooperative Network, Dairy Business Association, the Wisconsin Farmers Union and Wisconsin Potato and Vegetable Growers Association.

CMN


February milk production rises 2.4% in major states from 2023

March 22, 2024

WASHINGTON — Milk production in the 24 major milk-producing states in February totaled 17.36 billion pounds, up 2.4% from February 2023’s 16.95 billion pounds, but down 1.1% on a daily average basis adjusted for leap day, according to data released this week by USDA’s National Agricultural Statistics Service (NASS). For the entire United States, February milk production was estimated at 18.11 billion pounds, up 2.2% from February 2023’s 17.72 billion pounds, but down 1.3% on a daily average basis adjusted for leap day. (All figures are rounded. Please see CMN’s Milk Production chart.)

NASS reports January’s revised production for the 24 major states totaled 18.29 billion pounds, a decrease of 6 million pounds or less than 0.1% from last month’s preliminary production estimate.

February production per cow in the 24 major states averaged 1,955 pounds, up 58 pounds from February 2023, but down 107 pounds from January. For the entire United States, production per cow in February is estimated at 1,941 pounds, up 60 pounds from February 2023 and down 106 pounds from January.

NASS reports the number of milk cows on farms in the 24 major states was 8.88 million head in February, down 61,000 head from February 2023 and up 8,000 head from January. In the entire United States, there were an estimated 9.33 million milk cows in February, down 89,000 cows from February 2023 and up 10,000 cows from January.

California led the nation’s milk production in February with 3.36 billion pounds of milk, up 2.7% from February
2023 but down 0.9% on a daily average basis adjusted for leap day. Wisconsin followed with 2.56 billion pounds of milk produced in February, up 4.2% from February 2023 and up 0.6% on a daily average basis.

CMN


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Today's Cheese Spot Trading
April 11, 2024


Barrels: $1.5475 (-1 1/4)
Blocks: $1.5100 (-6)

Click here for more market activity

Cheese Production
U.S. Total Jan.
1.191 bil. lbs.


Milk Production
U.S. Total Feb.
18.105 bil. lbs.

Guest Columnist

2023 data lends urgency
to make allowance updates

John Umhoefer, Wisconsin Cheese Makers Association

FMMO modernization must put our nation’s farmers first

Gregg Doud, National Milk Producers Federation

Click here for our columnist archives




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