Progress in trade negotiations could help U.S. dairy industry

Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com

Weekend fire breaks out at Darigold powder plantBy Rena Archwamety

LYNDEN, Wash. — A fire broke out early over the weekend at a dairy powder facility in Lynden, Wash., owned by Darigold Inc. The cause of the fire still is under investigation. Darigold spokes-person Michelle Carter says it appears there were two separate fires — one in a dryer and one in the bag house.

Robert Spinner, assistant fire chief for the Lynden Fire Depart-ment, says firefighters initially were dispatched to contain a small fire in the dryer at 10:30 p.m. Saturday night. They worked with the plant’s engineers and used thermal sensors inside to make sure the fire was out and left the scene.

Approximately 30 minutes after the firefighters left, Spinner says they were called back following an explosion and ensuing

Factors driving dairy sector discussed at Outlook Forum By Rena Archwamety

ARLINGTON, Va. — USDA’s Agricultural Outlook Forum 2012, held here Thursday and Friday this week, focuses on “Moving Agriculture Forward” and looks at the economic issues and challenges in many commodity areas including the dairy sector.

USDA last week released its latest long-term outlook for the agricul-tural industry, which projects dairy export values will reach $4.0 billion in 2012, $4.9 billion in 2015 and $7.0 billion by 2021. Milk production is projected to total 198.4 billion pounds in 2012 and climb to 209.2 billion pounds by 2015 and to 227.3 billion pounds by 2021. (For more details, see “Long-term USDA projections show increasing milk production, cheese prices in years ahead” in last week’s issue of Cheese Market News or visit http://ers.usda.gov/Features/Baseline/.)

The forum’s dairy outlook session, which takes place this afternoon, includes a presentation by John Noble, president of Noblehurst Farms Inc., Linwood, N.Y., about meeting the challenges of the dairy sector. Noble looks at the trends driving the dairy industry, what this industry is seeing today, and how Noblehurst Farms’ strategy works with these trends to create a business that will be viable for the next generation. Noblehurst Farms is a sixth-generation, 1,700-cow dairy farm in west-ern New York that also oversees investment in and/or management of 8,000 cows on six sites.

“What’s really surprising to me is in the last 10 years, we’ve lost 40 percent of our herds,” Noble says of the U.S. dairy industry, adding that economic viability and alternatives for use of land are among the major drivers for this loss. “In not all cases have we figured out how to bring folks back into the industry. It’s not exactly high-paying work. The next generation has expectations that are much greater than the previous generation.”

9ROXPH��)HEUXDU\��1XPEHU��

WASHINGTON — The United States is making progress in several export markets with an-nouncements this week on the entry date for the U.S.-Korea Free Trade Agreement, consul-tations with Japan related to its interest in the Trans Pacific Partnership (TPP), and news that Mexico has become the first billion-dollar U.S. dairy export market.

U.S. Trade Representative (USTR) Ron Kirk this week announced the free trade agreement between the United States and Korea will take effect March 15. The announcement follows the completion over the President’s Day weekend of work by the United States and Korea to review each other’s

Progress in trade negotiations could help U.S. dairy industry

laws and regulations related to the implementation of the agreement. Each side has con-firmed the completion of their applicable legal requirements and procedures for the agree-ment’s entry into force.

“Entry into force of this agreement will open up Ko-rea’s $1 trillion economy for America’s workers, businesses, farmers and ranchers while also strengthening our eco-nomic partnership with a key Asia-Pacific ally,” Kirk says.

On March 15, almost two-thirds of U.S. exports of agri-cultural products and almost 80 percent of U.S. exports of industrial products to Korea will become duty-free. The agreement also includes a num-ber of significant commitments related to non-tariff measures, strengthened protections for intellectual property rights and commitments opening up Korea’s $580 billion services market.

The International Dairy Foods Association (IDFA) says once implemented, the U.S.-Korea agreement will allow the U.S. dairy industry to gain tariff-free access for approximately 16,000 metric tons of cheese, milk powders, whey for food uses and other dairy products.

Tariffs on most dairy products eventually will be phased out over a period of 15 years.

The U.S. International Trade Commission estimates that the dairy provisions of the agree-ment could expand U.S. dairy exports by up to $336 million per year on average. In 2011, the value of U.S. dairy exports to South Korea was more than $222.3 million, up 70 percent from the previous year. South Korea currently is the United States’ sixth-largest export market for dairy and dairy products.

“IDFA thanks the admin-istration and U.S. Trade Rep-resentative Ambassador Ron Kirk for their significant ef-forts through the negotiations and final steps leading up to implementation,” says John Kelly, IDFA manager of interna-tional affairs. “IDFA considers the agreement to be a critical step forward for U.S. dairy pro-cessors to take full advantage of growing markets in a vital economic region.”

IDFA notes South Korea is one of Asia’s fastest growing economies, and per-capita consumption of dairy products in South Korea is increasing in part due to the younger generation and an increasing

penchant for Western foods. Additionally, expanding wine consumption is expected to increase demand for a variety of high-quality cheeses. Accord-ing to USDA, most increased demand will be met by imports because local production of cheese is constrained by the lack of manufacturing facilities in Korea.

Also this week, the United States and Japan concluded two days of consultations related to Japan’s interest in the Trans Pacific Partnership (TPP) negotiations. This meet-ing was a follow-up session to a senior-level consultation with Japan held Feb. 7. The United States is engaging in similar TPP consultative processes with Canada and Mexico.

The TPP agreement is an Asia-Pacific regional trade agreement currently being negotiated between the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

USTR says the latest meet-ing with Japan was an oppor-tunity for the United States to continue the assessment of Japan’s readiness to meet the TPP standard. Experts from both governments exchanged

Milk production in major states up nearly 4 percent

A

INSIDE

Turn to TRADE, page 14 D

Turn to FIRE, page 14 D

WASHINGTON — Milk production in the 23 major milk-producing states dur-ing January 2012 totaled 15.78 billion pounds, up 3.7 percent from January 2011, according to preliminary data recently released by USDA’s National Agricultural Statistics Service (NASS). (All figures are rounded. Please see CMN’s Milk Pro-duction chart on page 15.)

Turn to STATES, page 15 DTurn to OUTLOOK, page 15 D

Scan this code for breaking news and the latest markets!

) Guest column: ‘A lot is at stake in 2012.’ For details, see page 4.

) Cheese contest breaks record with 2,503 entries. For details, see page 5.

) CDC report says majority of dairy-related disease outbreaks are caused by unpasteurized milk. For details, see page 6.

) Land O’Lakes’ 2011 sales are co-op’s highest ever. For details, see page 12.

Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.comReprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com

MARKET INDICATORS2 CHEESE MARKET NEWS® — February 24, 2012

DISCLAIMER: Cheese Market News® has made every effort to provide accurate current as well as historical market information. However, we do not guarantee the accuracy of these data and do not assume liability for errors or omissions.

STAFF SUBSCRIPTION INFORMATION&KHHVH�0DUNHW�1HZV��3XEOLFDWLRQ��,661��LV�SXEOLVKHG�ZHHNO\�E\�4XDUQH�3XEOLVKLQJ�//&��6LJQDWXUH�'ULYH��0LGGOHWRQ��:,��3KRQH��)$;��3HULRGLFDOV�SRVWDJH�SDLG�DW�0DGLVRQ��:,��&LUFXODWLRQ�UHFRUGV�DUH�PDLQWDLQHG�E\�4XDUQH�3XEOLVKLQJ�//&��6LJQDWXUH�'ULYH��0LGGOHWRQ��:,� ��POSTMASTER: Send address changes to Cheese Market News®, Subscriber Services, P. O. Box 628254, Middleton, WI 53562; Form 3579 requested; or call direct at 608/831-6002.� �$OO� ULJKWV�UHVHUYHG�XQGHU�WKH�8QLWHG�6WDWHV�,QWHUQDWLRQDO�DQG�3DQ�$PHULFDQ�&RS\ULJKW� &RQYHQWLRQV�� 1R� SDUW� RI� WKLV� SXEOLFDWLRQ� PD\� EH�UHSURGXFHG��VWRUHG�LQ�D�UHWULHYDO�V\VWHP�RU�WUDQVPLWWHG�LQ�DQ\�IRUP�RU�E\�DQ\�PHDQV��PHFKDQLFDO�� SKRWRFRS\LQJ��HOHFWURQLF�UHFRUGLQJ�RU�RWKHUZLVH��ZLWKRXW�WKH�SULRU�ZULWWHQ�SHUPLVVLRQ�RI�4XDUQH� 3XEOLVKLQJ� //&�� 2SLQLRQV� H[SUHVVHG� LQ� DUWLFOHV� DUH�WKRVH� RI� WKH� DXWKRUV� DQG� GR� QRW� QHFHVVDULO\� UHÁHFW� WKRVH� RI�4XDUQH�3XEOLVKLQJ�//&�GED�&KHHVH�0DUNHW�1HZV��&KHHVH�0DUNHW�1HZV��GRHV�QRW�HQGRUVH�WKH�SURGXFWV�RI�DQ\�DGYHUWLVHU�DQG�GRHV�QRW�DVVXPH�DQG�KHUHE\�GLVFODLPV�DQ\�OLDELOLW\�WR�DQ\�SHUVRQ�IRU�DQ\�ORVV�RU�GDPDJH�FDXVHG�E\�HUURUV�RU�RPLVVLRQV�LQ�WKH�PDWHULDO�FRQWDLQHG�KHUHLQ��UHJDUGOHVV�RI�ZKHWKHU�VXFK�HUURUV�UHVXOW�IURP�QHJOLJHQFH��DFFLGHQW�RU�DQ\�RWKHU�FDXVH�ZKDWVRHYHU��&RS\ULJKW��E\�4XDUQH�3XEOLVKLQJ�//&�Subscriptions:��IRU�8�6��VHFRQG�FODVV�GHOLYHU\��IRU�8�6��ÀUVW�FODVV�GHOLYHU\�LQFOXGLQJ�&DQDGD�DQG��,QWHU�QDWLRQDO�UDWH�WR�DOO�RWKHUV��3ULQWHG�LQ�8�6�$�

Susan Quarne, 3XEOLVKHU (PH 608/831-6002; FAX 608/831-1004)��e-mail: [email protected] Kate Sander, (GLWRULDO�'LUHFWRU (PH 509/962-4026; FAX 509/962-4027)��e-mail: [email protected] Sowerwine, 6HQLRU�(GLWRU (PH 608/288-9090; FAX 608/288-9093)�� e-mail: [email protected] Archwamety, 1HZV�:HE�(GLWRU (PH 608/288-9090; FAX 608/288-9093)�� e-mail: [email protected] Aaron Martin, 1HZV�(GLWRU (PH 608/288-9090; FAX 608/288-9093)�� e-mail: [email protected]

REGULAR CONTRIBUTORSJohn Umhoefer, Downes-O'Neill LLC, International Dairy Foods Association, National Milk Producers Federation

SUBSCRIPTIONS & BUSINESS STAFFSubscription/advertising rates available upon requestContact: Susan Quarne - PublisherP.O. Box 628254, Middleton, WI 53562PHONE 608/831-6002 • FAX 608/831-1004

WEBSITE: �www.cheesemarketnews.com

CLASS III PRICE (Dollars per hundredweight, 3.5% butterfat test)

YEAR2006200720082009201020112012

JAN13.3913.5619.3210.7814.5013.4817.05

FEB12.2014.18 17.03 9.31 14.2817.00

MAR11.1115.0918.0010.4412.7819.40

APR10.9316.0916.7610.7812.9216.87

MAY10.8317.6018.18 9.8413.3816.52

JUN11.2920.1720.25 9.9713.6219.11

JUL10.9221.3818.24 9.9713.7421.39

AUG11.0619.8317.3211.2015.1821.67

SEP12.2920.0716.2812.1116.2619.07

OCT12.3218.7017.0612.8216.9418.03

NOV12.8419.2215.5114.0815.4419.07

DEC13.4720.6015.2814.9813.8318.77

(These data, which includes government stocks and is reported in thousands of pounds, are based on reports from a limited sample of cold storage centers across the country. This chart is designed to help the dairy industry see the trends in cold storage between the release of the National Agricultural Statistics Service’s monthly cold storage reports.)

ButterCheese

7,748136,544

+333+3,435

7,033129,008

+926+2,344

+715+7,536

+14 +2

Weekly Cold Storage Holdings Feb. 20, 2012 On hand Week Change since Feb. 1 Last Year Monday Change Pounds Percent Pounds Change

Cheddar Cheese and Dairy Product Prices

Cheese 40-lb. Blocks:

*/Revised. 1/Prices weighted by volumes reported. 2/Sales as reported by participating manufacturers. Reported in pounds. More information is available by calling NASS at 202-690-2424.

1/28/12 2/11/12

Average price1

Minn./Wis. Other states U.S.Sales volume2

Minn./Wis. Other states U.S.

Cheese 500-lb. Barrels:Average price1

Minn./Wis. Other states U.S.Adj. price to 38% moisture Minn./Wis. Other states U.S.Sales volume2

Minn./Wis. Other states U.S.Moisture content Minn./Wis. Other states U.S.

2/4/12 2/18/12

$1.6451$1.5202$1.5311

953,0319,932,488

10,885,519

$1.6069$1.6033$1.6047

$1.5402$1.5222$1.5294

4,865,6767,364,460

12,230,136

35.3234.7034.94

*$1.4990*4,311,396

1.403915,793,617

$.64149,655,720

Butter:Average price1 U.S.Sales volume2 U.S.

Nonfat Dry Milk:Average price1 U.S.Sales volume2 U.S.

Dry Whey:Average price1 U.S.Sales volume2 U.S.

For the week ended:

$1.6780$1.5757$1.5832

803,33310,193,06810,996,401

$1.6480$1.6582$1.6528

$1.5785$1.5778$1.5782

5,329,8664,759,024

10,088,890

35.27%34.84%35.07%

$1.58973,885,001

$1.393622,583,767

$.675110,988,613

$1.6454$1.5513$1.5587

879,64210,242,50311,122,145

$1.6116$1.6203$1.6161

$1.5429$1.5390$1.5409

5,507,0825,886,300

11,393,382

35.24%34.73%34.97%

$1.54853,675,542

$1.385322,190,967

$.66489,723,049

$1.6105$1.4951$1.5046

885,2419,873,023

10,758,264

$1.6037$1.5971$1.6004

$1.5366$1.5137$1.5251

5,938,1815,835,414

11,773,595

35.2934.5834.94

$1.44173,893,451

1.363719,973,007

$.63959,174,670

Total Contracts Traded/Open Interest Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com.*Total Contracts Traded/Open Interest reflect an additional month not included in this chart.

FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12OCT12NOV12DEC12JAN 13

613/7,783

1.5451.5231.5421.5801.6271.6561.6681.6881.7001.6871.6881.706

1,0881,3261,096

849779511529472396361373

2

CHEESE FUTURES for the week ended February 23, 2012* (Listings for each day by month, settling price and open interest)

1.5451.5201.5431.5801.6221.6651.6761.6891.7001.6901.6901.683

1,0881,3261,109

849784523538482412373391

10

116/7,886

1.5511.5351.5391.5701.6101.6621.6761.6901.7061.6951.6901.692

1,0821,3321,120

870814540551497420389399

18

Fri., Feb. 17 Mon., Feb. 20 Tues., Feb. 21 Wed., Feb. 22 Thurs., Feb. 23

1.5401.5381.5701.6111.6431.6651.6821.6951.7051.6951.6921.714

1,0881,3381,095

838689501508434372332357

2

290/7,555 252/8,033

0DUNHWV�&ORVHG

Total Contracts Traded/Open Interest Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com.*Total Contracts Traded/Open Interest relect an additional month not included in this chart.

FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12OCT12NOV12DEC12

132/2,654

63.5055.5050.0047.0045.5045.9546.2545.0043.7543.0043.00

458440333270247167178169144125123

DRY WHEY FUTURES for the week ended February 23, 2012 (Listings for each day by month, settling price and open interest)

63.5055.5050.0047.0044.0344.1046.0045.0042.0042.0342.03

458436333270252165178169144124122

28/2,651

62.2552.0046.0043.0042.3841.1342.0042.0040.0040.7040.50

453426334277263167185169143126122

142/2,668

Fri., Feb. 17 Mon., Feb. 20 Tues., Feb. 21 Wed., Feb. 22 Thurs., Feb. 23*

64.5057.5051.8549.2548.4847.9347.2546.2544.0045.0045.00

459454343266236163178163142 121119

65/2,644

0DUNHWV�&ORVHG

Monday Tuesday Wednesday Thursday Friday

Chicago Mercantile Exchange

Feb. 20 Feb. 21 Feb. 22 Feb. 23 Feb. 24

Weekly average (Feb. 21-24): Barrels: $1.4738(-.0042); 40-lb. Blocks: $1.4750(-.0070).Weekly ave. one year ago (Feb. 22-25, 2011): Barrels: $1.9463; 40-lb. Blocks: $1.9850.

Cheese BarrelsPriceChange

Cheese 40-lb. blockPriceChange

Extra Grade NDMPriceChange

Grade A NDMPriceChange

Weekly average (Feb. 21-24): Extra Grade: $1.2975(NC); Grade A: $1.2925(-.0325).

Grade AA ButterPriceChange

Class II Cream (Major Northeast Cities): $1.6106(+.0238)–$1.7506(-.0525).Weekly average (Feb. 21-24): Grade AA: $1.4156(+.0151).

$1.4750-1/2

$1.4800-1/2

$1.4150NC

Sign up for our daily fax or e-mail service for just $104 a year. Call us at 608-288-9090.

$1.2975 NC

$1.2925NC

Cash prices for the week ended February 24, 2012

$1.4800NC

$1.4850-1/4

$1.2975NC

$1.2925NC

$1.4150NC

$1.4700NC

$1.4675-1 1/4

$1.4150NC

$1.2975 NC

$1.2925NC

$1.4175+1/4

$1.4700NC

$1.4675NC

$1.2975 NC

$1.2925NC

Markets Closed

Markets Closed

Markets Closed

Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.comReprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com

February 24, 2012 — CHEESE MARKET NEWS® 3

DISCLAIMER: Cheese Market News® has made every effort to provide accurate current as well as historical market information. However, we do not guarantee the accuracy of these data and do not assume liability for errors or omissions.

For more information please visit www.cheeseshredder.com

NEWS/BUSINESS MARKET INDICATORS

www.cheeseshredder.comWASHINGTON — Natural American cheese in cold storage totaled 612.5 mil-lion pounds as of Jan. 31, 2012, up less than 1 percent from December 2011’s 611.0 million pounds but down 4 per-cent from January 2011’s 637.9 million pounds, according to data released this week by USDA’s National Agricultural Statistics Service (NASS).

Swiss cheese in cold storage totaled 26.1 million pounds Jan. 31, 2012, down 6 percent from Dec. 31’s 27.6 million pounds and down 28 percent from the 36.3 million pounds of Swiss cheese in cold storage at the end of January 2011.

Other natural cheese in cold storage totaled 339.3 million pounds as of Jan. 31, 2012, NASS reports, down 4 percent from December 2011’s 353.0 million pounds and down 10 percent from January 2011’s 378.1 million pounds.

NASS reports total natural cheese in

Cheese stocks down, butter stocks way upcold storage was 977.8 million pounds as of Jan. 31, 2012, down 1 percent from 991.6 million pounds a month earlier and down 7 percent from 1.05 billion pounds a year earlier.

Meanwhile, butter in cold storage grew. Total U.S. butter stocks as of Jan. 31, 2012, were reported at 171.2 million pounds, a 60-percent jump from Dec. 31, 2011’s 106.9 million pounds and 44 per-cent more than the 118.8 million pounds in cold storage at the end of January 2011.

January’s butter stocks are the high-est they have been since July 2011’s 187.8 million pounds. Butter stocks peaked in 2011 at 190.3 million pounds in June, according to 2011 summary data also released this week by NASS.

In 2011, natural American cheese stocks peaked at 648.8 million pounds in July and were at their lowest point in November at 592.8 million pounds. CMN

MIDDLETON, Wis. — The Wisconsin Association for Food Protection(WAFP) is offering scholarships for students inter-ested in food protection and sanitation.

The WAFP Food Protection Scholar-ship will assist with up to $1,000 in travel expenses for undergraduate or graduate students in Wisconsin who will give a speech at the annual conference of the International Association for Food Pro-tection in Warsaw, Poland. The deadline to apply is April 1.

The WAFP Memorial Scholarship will award $1,000 to a child or dependent of a current or deceased member of the

WAFP is offering three student scholarshipsWAFP. The student must have graduated high school with a “B” grade-point aver-age or better and must be accepted to an accredited university or two-year pro-gram. The deadline to apply is April 20.

The E.H. Marth Food and Environ-mental Scholarship will award $1,500 to a student studying in a program that may lead to a career in dairy, food or environmental sanitation. Applicants must have completed one year at an accredited college in Wisconsin. The deadline to apply is July 1.

For more information, or to download applications, visit www.wafp-wi.org. CMN

Dry Products* February 24, 2012

DRY BUTTERMILK(FOB)Central & East: $1.2600-$1.3450(-1/2).(FOB) West: $1.2300-$1.3200(-1/2); mostly $1.2500(-1)-$1.3000.

EDIBLE LACTOSE(FOB)Central and West: $.7900(+3)-$.9950(-1/2); mostly $.8200-$.9000.

NONFAT DRY MILKCentral & East: low/medium heat $1.2700(-1)-$1.4900(+2); mostly $1.3100(-2)-$1.4200(-1). high heat $1.4400(-1/2)-$1.5350(-2).West: low/medium heat $1.2500(-3)-$1.4250(-2); mostly $1.2800(-2)-$1.3750. high heat $1.3775(-1/4)-$1.5025(-3/4).Calif. manufacturing plants: extra grade/grade A weighted ave. $1.3401(-.0389) based on 17,024,275 lbs. Sales to CCC: 0 lbs.

WHOLE MILK POWDER (National): $1.6200(-3)-$1.7000(-3).

DRY WHEYCentral: nonhygroscopic $.6650(+16 1/2)-$.7550; mostly $.6850(-1/2)-$.7150(-1/2).West: nonhygroscopic $.3900(-9 1/2)-$.6900(-2 1/4); mostly $.5000(-15)-$.6900(-1/4).(FOB) Northeast: extra grade/grade A $.6850(-1 1/2)-$.7450(+1 1/4).

ANIMAL FEED (Central): Whey spray milk replacer $.5200-$.6400(-5 1/4).

WHEY PROTEIN CONCENTRATE (34 percent): $1.4600(-3 3/4)-$1.6775(+1); mostly $1.5100-$1.5450.

CASEIN: Rennet $4.3000-$4.9000; Acid $4.8200-$5.1000.

*Source: USDA’s Dairy Market News

Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com. #The total contracts traded for Class III milk includes electronically-traded contract volumes.*Total Contracts Traded/Open Interest reflect an additional month not included in this chart.

Total Contracts Traded/Open Interest

Cash-Settled NDM*

217207200173214152129109

29/1,649

FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12

Cash-Settled Butter

FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12OCT12NOV12DEC 12


634822575517477403422404408342336

119/5,340

147.00146.50152.50155.00158.00161.00163.00165.00167.50167.25168.25

138.00132.80131.00132.00133.00134.25136.00136.00

217207205180239163129109

49/1,697

147.00146.50152.75155.25158.00160.00163.00165.00166.00167.00168.25

634823576521493418422409417352336

132/5,401

138.00132.50130.50130.25132.25133.00135.00135.00

215208214189261199163115

132/1,812

147.25146.00150.80153.25157.00158.00160.00163.50166.00166.75167.50

632822583538505432430409417371336

128/5,475





FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12OCT12NOV12DEC12JAN13FEB13MAR13APR13MAY13JUN13JUL13AUG 13

Class III Milk#*

16.0715.4115.2615.4515.8416.1816.3216.4016.4116.3316.2616.1316.3516.0816.3016.3916.4016.5016.50

5,5206,2344,0343,3762,9572,2222,1662,1061,8101,6361,592

137954020151613

9

2,034/33,999

16.0715.3715.24 15.4115.7116.0916.2516.3316.3816.2516.2216.0316.2116.0016.2016.3016.3016.4016.40

5,5226,2144,0733,4052,9542,2322,1932,1151,8161,6451,609

147994020151613

9

1,023/34,138

16.0815.2314.9815.1015.4515.8916.1216.2616.3016.1616.1516.0416.1515.9916.2016.3016.2016.2516.40

5,4756,4224,2383,4593,0222,2862,2342,1441,8421,6681,626

154103

4120151715

9

1,718/34,791


Class IV Milk*

FEB12MAR12APR12MAY12JUN12JUL12AUG12SEP12OCT12NOV 12

15.9915.6415.6215.9716.0016.4016.6516.7916.8016.80

333320316250222

5653495657

15.9915.6315.6215.8915.8616.4016.6516.7916.8016.80

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Perspective:Industry Issues

A lot is at stake in 2012

G U E S T C O L U M N I S T C M N E x c l u s i v e !

We’re two months into 2012, and all signs point to a tough political year complete with continued gridlock in Congress, lots of promises on the campaign trail, and consumers and businesses alike wondering what the future might possibly hold other than more of the same.

It’s also a serious business climate for many in the dairy foods industry. Low margins, high input costs and little room to spare in tighter-than-usual budgets are taking their toll. Of course, that scenario varies depending on specific product lines and market niches, but it certainly applies to a lot of companies in the 2012 marketplace. Our economy, the housing market, jobs (and the opportu-nity to create new jobs), our customers, building and saving for the future — a lot is at stake this year.

Ongoing media coverage of the

presidential debates, caucuses and primaries leaves no doubt that this is an election year. But it’s important to focus equal attention on the fact that Americans also will vote this November on candidates for all seats in the U.S. House of Representatives, and roughly a third of the Senate’s 100 seats also are up for grabs. These elections, depend-ing on the majority of winners in the Republican and Democratic parties, will decide who is in charge for both the House and the Senate — at least for the next two years.

The majority matters because the winners get to set the agenda and gar-ner the votes to win on any given issue, depending on the number of legislators in their majority. The leaders in both chambers likely will determine whether we will see a business agenda or a labor agenda, global market opportunities or

stagnant domestic markets, a conserva-tive agenda or a liberal agenda — you get the picture. A lot is at stake.

Before we reach the November elec-tions, though, the current Congress still hopes to rewrite farm policies, keeping a keen eye on the September 2012 deadline. Whether this goal is within practical reach remains to be seen. The divisions in many agri-industry sectors indicate it will be a tough road ahead for legislators to find policy conclusions that will be acceptable to all in such a politically charged and important year.

For dairy, there is broad agreement that our safety net programs for farms are flawed and must be replaced, but consensus on the direction forward remains elusive. This lack of unity is problematic for dairy at a time when we face enormous new global market opportunities mixed with challenges in many domestic markets. For IDFA and its members, the policy direction of continued growth is the easy choice.

Our members have voted to support insurance for dairy farms to avoid cata-strophic losses, farm savings accounts and the phasing out of Federal Milk Marketing Order pricing to reduce volatility in milk markets, and risk management tools to help farms and businesses manage market changes. We support these policy initiatives because they will help the industry grow, not only through increased consumption and product innovation here in the United States, but by taking advantage of new and growing export opportunities.

Getting these policy tools right, especially in the next farm bill, is a big deal for dairy’s future — again, a lot is at stake.

Fortunately, we live in America where we have the freedoms provided by the First Amendment of our Con-stitution to express our points of view and to petition our government to try to influence the course of our future. There are lots of ways to be involved:

• By helping to elect members of Congress who share your ideas and ideals

• By meeting with your senators and congressional representative either at home or in Washington, D.C., to let them know your individual concerns and concerns about your business

• By participating with others in the dairy industry who share your views at fundraisers, meetings and other events where members of Congress are present.

IDFA will offer two great occasions for just that type of involvement. Start-ing early this summer, June 20-21, we’ll have our annual “fly-in” to Washington, D.C., for lobbying visits on Capitol Hill. In the fall, Sept. 19-21, we are planning a unique Policy & Politics Conference, again in Washington, D.C., where food industry professionals will hear from top congressional leaders, Cabinet mem-bers, and policy and political leaders about priority issues and the elections that will be just around the corner.

I encourage you to pencil these events in on your calendar because, with broad industry involvement, we truly can make a difference. It’s never been more important — a lot is at stake! CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

NEWS/BUSINESS

WASHINGTON — Walmart Stores Inc. unveiled its new “Great For You” icon at a Feb. 7 event in Washington, a year after it pledged to develop a front-of-pack label to give customers an easier way to identify healthier food.

Walmart says the icon, part of its healthier food initiative, is an effort to implement a transparent, summary icon backed by rigorous nutrition criteria for its private label brand products. “Great For You” initially will appear on select Walmart Great Value and Marketside items as well as on fresh and packaged fruits and vegetables at Walmart stores nationwide this spring. Among the items that will carry the icon are Great Value instant nonfat dry milk, Great Value organic milk in fat-free, 1 percent and skim varieties, and Great Value milk in lactose-free fat-free, 1/2-percent, 1-percent and fat-free varieties.

“Walmart moms are telling us they want to make healthier choices for their families, but need help deciphering all the claims and information already displayed on products,” says Andrea

Walmart introduces ‘Great For You’ icon to help direct consumers toward healthy foodsThomas, senior vice president of sustain-ability, Walmart. “Our ‘Great For You’ icon provides customers with an easy way to quickly identify healthier food choices. As they continue to balance busy schedules and tight budgets, this simple tool encour-ages families to have a healthier diet.”

The icon is designed as a guide to help people make incremental changes to their diet by encouraging more nutritious food choices through a two-step process. The first step focuses on encouraging people to eat more lowfat dairy, nuts, seeds, lean meats, fiber-rich whole grains, fruits and vegetables, such as 1-percent milk, raw almonds, 93-percent lean ground beef and brown rice. The second step limits the amount of total, trans and saturated fats, sodium and added sugars that can be found in items such as flavored yogurt, sweetened oatmeal, granola bars and frozen meals.

“The nutritionists we engaged told us to make the criteria tough and signifi-cant,” says Jack Sinclair, executive vice president of grocery for Walmart. “We feel confident the ‘Great For You’ icon bal-

ances those objectives, and will become an important tool Walmart shoppers can use to fill their pantries with healthier food at prices our customers can afford.”

Walmart developed the “Great For You” icon as part of an initiative it launched in 2011 to make food healthier and healthier food more affordable. The initiative includes reformulating packaged food to reduce sodium and

added sugars and eliminate industri-ally-produced fats by 2015; providing savings on produce and reducing the price premium on better-for-you items; developing solutions for food deserts; and increasing charitable support for nutrition education programs.

For more information on “Great For You” and nutrition criteria, visit www.walmartgreatforyou.com. CMN

AUCKLAND, New Zealand — Fonterra Brands New Zealand (FBNZ) recently announced a voluntary recall after two isolated complaints it received from consumers who have found a fine metal object in their butter products. Fonterra says there have been no reports of any-one being injured.

The recall includes Mainland Salted Butter 500 gm with a best-before date of Jan. 10, 2013, and Anchor Salted Butter 500 gm with a best-before date of Jan. 26, 2013.

The recall is limited to these two but-

Metal in butter prompts recall by Fonterrater products that are produced and sold in New Zealand. No other FBNZ products are affected. Food recall notices have been placed in daily newspapers across New Zea-land, and authorities have been notified.

“The voluntary recall is a precaution-ary measure as there can be no compro-mise when it comes to product quality or the health and safety of our consumers,” says Peter McClure, FBNZ managing di-rector. “We advise anyone with family or friends who may have bought this prod-uct to contact them in case they do not see or hear this announcement.” CMN


NEWS/BUSINESSFebruary 24, 2012 — CHEESE MARKET NEWS® 5

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MADISON, Wis. — Entries in the 2012 World Championship Cheese Contest have reached a new peak, growing 8 percent to a record-breaking 2,503 en-tries from 24 nations around the world, according to the Wisconsin Cheese Makers Association (WCMA), host of the competition.

Entries are arriving now for the judging competition set for March 5-7 in Madison, Wis.

“It’s a wonderful challenge to execute the world’s largest technical cheese and butter contest,” says John Umhoefer, WCMA executive director. “We would like to congratulate and thank the world dairy community for supporting this exciting competition.”

An international panel of 40 cheese evaluation experts will work three days at the Monona Terrace Convention Center in Madison to select medalists in a record 83 cheese and butter classes.

Cheesemakers and buttermakers will send entries to Wisconsin by today, Feb. 24, for the competition, including makers in Argentina, Australia, Austria, Canada, Croatia, Denmark, England, Estonia, Fin-land, France, Germany, Greece, India, Ireland, Italy, Japan, Netherlands, New Zealand, Poland, Portugal, Romania, South Africa, Spain, Sweden, Switzer-land and the United States.

Judges, working in pairs, will begin Monday, March 5, sniffing, tasting and examining each entry. The top three scoring cheeses and butters in each class will earn gold, silver and bronze medals, respectively.

Each two-person judging team pairs a U.S. judge with an international expert. This year, judges hail from Ar-gentina, Australia, Canada, Denmark, Finland, France, Germany, Ireland, Italy, New Zealand, Netherlands, Portugal, Russia, Switzerland and the United Kingdom, joining 20 judges from 13 states in the U.S.

Assisting and leading this judging team is Chief Judge Robert Aschebrock from Stratford, Wis., emeritus chief judge Will Schlinsog, and assistant chief judges Stan Dietsche with Oshkosh Cheese Sales & Storage, Tim Czmowski with Agropur and Jim Mueller from Denmark, Wis.

More than 250 dairy industry manu-facturers and suppliers — the renowned B-Team led by Brian Eggebrecht with Welcome Dairy in Colby, Wis. — provide

World Championship Cheese Contest breaks record with 2,503 entries from 24 countriesvital support as judges work through the more than 50,000 pounds of cheese and butter entries.

“All of these volunteers join with Wisconsin Cheese Makers Association to host a fair, objective evaluation,” Aschebrock says. “We’re pleased to put all entries and top scores in each class online, in real time. We want to present a contest that’s honest and transparent for all the world to see.”

The international dairy industry has adopted the contest’s MyEntries web-based entry system, according to WCMA’s John Umhoefer. More than 90 percent of entries were received on the discounted, online service. Entrants will see contest photos and scoring results online and will receive electronic ver-sions of the judges’ original score sheets within days after the competition, Umhoefer says.

Strong growth in the contest is reflected in several cheese categories:

• Gruyere entries doubled to 29;• Queso entries grew 50 percent

to 46;• Pepper cheese entries grew 45

percent to 84;• Flavored, hard cheeses nearly

doubled to 51 entries; • Smoked cheeses more than

doubled to 51 entries;• The open class for hard cheese is

the largest class at 85 entries;• Reduced sodium entries doubled

to 20;• Shredded cheese entries grew

to 30;• New Prepared Cheese Foods de-

buted with 16 entries.Thirty U.S. states are sending cheese

or butter entries as well as the Canadian provinces of Alberta, British Columbia, New Brunswick, Newfoundland, Ontario and Quebec. The participating U.S. states include California, Colorado, Delaware, Georgia, Iowa, Idaho, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minne-sota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Utah, Virginia, Vermont, Wash-ington and Wisconsin.

The World Championship Cheese Contest is a technical evaluation of entries, using an objective measure of cheese defects to select the products in each class that best exemplify perfec-

tion for a cheese variety. The contest is open between 11 a.m.

and 4 p.m. on Monday, March 5, and Tuesday, March 6. First round judging will be completed Wednesday, March 7, from 9:00 a.m. to noon.

On Wednesday evening, beginning at 6:30, WCMA and Wisconsin Cheese Originals will host a ticketed event in the ballroom at Monona Terrace. The entire panel of contest judges will evaluate the “Sweet Sixteen” — the top 16 gold medal cheeses in the competition — and determine a best of show winner while attendees enjoy exotic cheeses selected from dozens of contest categories. Tickets are $25 for this evening reception and may be purchased at www.cheesecontest.com.

The championship round, 7 p.m. to 8 p.m. CST March 7, will be broadcast as a live, video-streamed program on

the WCMA website. In addition, contest results and digital images will be posted on the website throughout the competi-tion. Visit www.worldchampioncheese.org for complete contest coverage.

In 2010, cheesemaker Cedric Vuille from Formagerie de La Brevine in the tiny village of La Brevine, Switzerland, was named World Champion in the Championship Round for his Le Gruyere Switzerland.

Winners from around the globe will travel to Madison to receive their awards during the International Cheese Technology Exposition, April 10-12, in Milwaukee. During the expo, gold medal cheeses are auctioned to support the contest, scholarships and the WCMA Member Education Initiative. The expo concludes April 12 with a gala awards banquet for the winning manufacturers. CMN

Chart courtesy of the Wisconsin Cheese Makers Association

ARLINGTON, Va. — Cooperatives Working Together (CWT) has accepted 17 requests for export assistance from Bongards, Dairy Farmers of America, Darigold, Michigan Milk Producers Association and United Dairymen of Arizona to sell a total of 581 metric tons (1.28 million pounds) of Cheddar, Gouda and Monterey Jack and 449 metric tons (989,865 pounds) of butter to customers in Asia, Central America, the Middle East and North Africa. The

CWT accepts 17 bids for export assistanceproduct will be delivered February through June 2012.

In 2012, CWT has assisted member cooperatives in making export sales of Cheddar, Monterey Jack and Gouda totaling 24.5 million pounds and but-ter totaling 19.9 million pounds to 16 countries on four continents.

CWT will pay export bonuses to the bidders when delivery of the product is verified by the submission of the required documentation. CMN



For more information please visit www.uwrf.edu

NEWS/BUSINESS

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GREENEVILLE, Tenn. — A U.S. judge recently granted preliminary approval to a $140 million settlement between Dallas-based Dean Foods Co. and Southeastern U.S. dairy farmers in an ongoing lawsuit.

Under the proposed settlement agreement, Dean Foods would pay a total of $140 million over a period of four to five years into a fund that would be available for distribution to dairy farmer class members in a number of Southeastern states.

The class action lawsuit was brought by Southeast dairy farmers against Dean Foods Co., Dallas; Dairy Farmers of America Inc. (DFA), Kansas City, Mo.; Dairy Marketing Services (DMS) LLC, Syracuse, N.Y.; Southern Marketing Agency (SMA), Prospect, Ky.; National Dairy Holdings L.P., Dallas; and two individuals in 2007.

The suit’s allegations include that the defendants implemented long-term, full-supply agreements to control access

Judge grants preliminary approval for $140 million settlement in case against Dean Foods of Southeast dairy farmers to fluid milk bottling plants; required independent dairy farmers, individuals and entities that “were previously free of DFA’s control” to market their milk through DFA-controlled marketing entities; required dairy farmer members of Mary-land & Virginia Producers Cooperative Association Inc. to market Grade A milk through the DFA-controlled Southern Marketing Agency to gain access to fluid milk bottling plants; threatened to and did cut off independent cooperatives’ and independent dairy farmers’ access to bottling plants; boycotted independent dairy farmers, cooperatives and bottling plants; fixed, depressed and/or stabilized prices for milk paid to Southeast dairy farmers; and “flooded” the Southeast milk market to further depress prices. (See “Producers file suit alleging price fixing by DFA, Dean” in the July 13, 2007, issue of Cheese Market News.)

In an order filed Feb. 14, 2012, Judge Ronnie Greer for the U.S. District Court

of Tennessee in Greeneville granted approval for the settlement between Dean Foods and the farmers, subject to a fairness hearing scheduled for May 15, 2012. In addition, plaintiffs have until today, 10 days after the order was filed Feb. 14, to notify class members of the settlement agreements. To be eligible for payments, farmers must complete, sign and return the claim form by May 1, according to the order.

A smaller, previously proposed settlement between the farmers and SMA for $5 million, which includes requirements to make the milk market-ing process more transparent, also was approved.

“We are pleased to have reached an agreement to settle the Tennessee farmer litigation,” says Liliana Esposito, senior director of public affairs for Dean Foods Co. “The court has now granted our motion for preliminary approval of the settlement agreement, and we support the court’s ruling. We settled

with plaintiffs to remove the distrac-tion of costly and disruptive litigation. As always, we will proceed in the best interests of the company and our stakeholders.”

A trial for remaining defendants including DFA scheduled to begin last September had been postponed but is now set for July 10, 2012 (see “Trial postponed in suit involv-ing Dean Foods, Dairy Farmers of America, Southeast farmers” in the Sept. 16, 2011, issue of Cheese Market News).

A group of DFA farmer members were “decertified” as “class” members in the lawsuit July 28, 2011. However, those who had been decertified from qualifying for the settlement were reinstated into a “DFA settlement subclass” in the Feb. 14, 2012, order.

Calls to DFA seeking comment were not returned by press time. Calls to plaintiffs attorneys also were not returned by press time. CMN

WASHINGTON — The rate of outbreaks caused by unpasteurized milk and products made from it was 150 times greater than outbreaks linked to pas-teurized milk, according to a new study by the Centers for Disease Control and Prevention (CDC). The 13-year review also indicates that states where the sale of raw milk is legal have had more than twice the rate of outbreaks as states where it was illegal.

The study, published Feb. 21 in the CDC journal Emerging Infectious Dis-eases, reviews dairy product outbreaks from 1993 to 2006 in all 50 states. The authors compare the amount of milk produced in the United States during the study period to the amount that CDC estimates was likely consumed raw to determine the 150 times higher rate for

CDC report says majority of dairy-related disease outbreaks linked to unpasteurized milkoutbreaks caused by raw milk products.

The study included 121 dairy-related disease outbreaks which caused 4,413 illnesses, 239 hospitalizations and three deaths. In 60 percent of the outbreaks, state health officials determined raw milk products were the cause. Two hun-dred of the 239 hospitalizations were in those sickened in the raw milk out-breaks. These dairy-related outbreaks occurred in 30 states, and 75 percent of the raw milk outbreaks occurred in the 21 states where is was legal to sell raw milk products at the time.

“This study shows an association between state laws and the number of outbreaks and illnesses from raw milk products,” says Robert Tauxe, deputy director of CDC’s Division of Foodborne, Waterborne and Environmental Dis-

eases. “Restricting the sale of raw milk products is likely to reduce the number of outbreaks and can help keep people healthier. The states that allow sale of raw milk will probably continue to see outbreaks in the future.”

The study also found that raw milk product outbreaks led to much more severe illnesses, and disproportionately affected people under age 20. Thirteen percent of patients in raw milk out-breaks were hospitalized compared to 1 percent in pasteurized milk outbreaks. FDA says this may be because raw milk outbreaks were all caused by bacteria such as E. coli O157, which tend to pro-duce more severe illnesses, according to the study. Meanwhile, pasteurized milk and cheese outbreaks were often caused by relatively mild infections like norovirus and Staphylococcus aureus.

The Weston A. Price Foundation, which supports legalizing raw milk sales, has responded to the study, claiming that the CDC has manipulated and cherry picked its data to make raw milk look dangerous and to dismiss the same dangers associated with pasteur-ized milk.

The foundation says because the incidence of illness from dairy products is low compared to overall foodborne illnesses, the authors’ choice of time period for the study affected the re-

sults significantly. The foundation says CDC data show there were significant outbreaks of foodborne illness linked to pasteurized dairy products the next year in 2007, when 135 people became ill from pasteurized cheese contaminated with E. coli, and three people died from pasteurized milk contaminated with Listeria. The foundation also notes significant outbreaks from pasteurized dairy in the 1980s, including more than 16,000 confirmed cases of Salmonella infection traced back to pasteurized milk from a single dairy in 1985.

“In the context of the very low num-bers of illnesses attributed to dairy in general, the authors’ decision to cut the time frame short, as compared to the available CDC data, is troubling and adds to questions about the bias of this publication,” says Sally Fallon Morell, president of the Weston A. Price Foundation.

The foundation also levels a num-ber of other criticisms at the study, including the reports it uses, the focus on outbreaks rather than illnesses, that it lumps illnesses from illegal “suitcase-style” raw cheese with ill-nesses attributed to fluid raw milk, and that it relies on old data on raw milk consumption rates rather than newer data that shows about 3 percent of the population consumes raw milk. CMN

ST. LOUIS, Mo. — Spartech Packaging Technologies has achieved Safe Quality Food Certification (SQF) for its packag-ing plant in Ripon, Wis.

The producer of rigid packaging achieved the SQF 2000 certification after investing in physical upgrades, creating implementing procedures and employee training, the company says.

Spartech Ripon plant given SQF certification“The SQF certification is a testament

to Spartech’s commitment to continu-ally delighting our customers with the highest level of quality, value, service and innovative solutions,” says Carol O’Neil, senior vice president of packag-ing technologies, Spartech.

In addition to the Ripon plant, the Spartech facility in Muncie, Ind., is also SQF certified. CMN



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SACRAMENTO, Calif. — Commercial production of bulk milk in California to-taled 41.43 billion pounds in 2011, up 2.7 percent from 40.36 billion pounds in 2010, according to the 2011 annual statistics recently published by the California De-partment of Food and Agriculture (CDFA). In 2011 there were 1.84 million milk cows and heifers that have calved on farms in California, down about 22,000 head from 2010, and 1,668 dairies, down from 1,716 in 2010. The average number of cows per California dairy in 2011 totaled 1,101, up from 1,083 in 2010.

Producers in California were paid an annual average price of $18.52 per hundredweight for all bulk milk in 2011, up from and average of $14.70 per hun-dredweight in 2010.

California Class 1 milk sales in 2011 totaled 745.5 million gallons, down 1.6 percent from Class 1 milk sales in 2010. Sales of reduced-fat milk and half-and-half increased in 2011, while sales of whole milk, lowfat light milk and skim/nonfat fat-free milk decreased.

In Class 2 products, production of cottage cheese in California totaled 101.1 million pounds in 2011, up from 87.5 million pounds in 2010. Buttermilk production totaled 8.3 million pounds in 2011, down from 9.8 million pounds the year before. Production of manufactur-ing cream totaled 41.9 million pounds in 2011, down from 42.9 million pounds in 2010. California yogurt production totaled 626.7 million pounds in 2011, down from 649.0 million pounds in 2010. Production of sour cream and sour cream dressing in 2011 totaled 21.8 million pounds, up from the previous year’s total of 20.6 million pounds. Production of other cream in California totaled 26.9 million pounds in

Latest California dairy industry data detail 2011 increases in production, average prices2011, up from 24.9 million pounds in 2010.

In Class 3 production in California, total frozen products were 173.9 million gallons in 2011, up from 170.0 million gal-lons in 2010. California ice cream produc-tion in 2011 totaled 142.1 million gallons, up from 136.6 million gallons in 2010.

In California Class 4a production, but-ter in 2011 totaled 622.4 million pounds, up from 557.1 million pounds in 2010. California production of nonfat dry milk for human consumption totaled 775.1 million pounds in 2011, down from 877.4 million pounds in 2010. Dry buttermilk production totaled 53.4 million pounds in 2011, up from 45.6 million pounds the previous year. California production of

condensed skim and evaporated milk totaled 1.06 billion pounds in 2011, up from 1.05 billion pounds in 2010.

Cheese production in California totaled 2.25 billion pounds in 2011, up from 2.20 billion pounds the previous year. Mozzarella production in 2011 totaled 1.30 billion pounds, up from 1.26 billion pounds in 2010. California Cheddar production totaled 320.6 million pounds in 2011, down from 335.3 million pounds during the previous year. Monterey Jack production totaled 272.9 million pounds in 2011, down from 275.0 million pounds in 2010. Production of Hispanic cheese in California totaled 112.2 million pounds in 2011, down from 113.0 million pounds

in 2010. Provolone production in 2011 totaled 53.3 million pounds, up from 50.9 million pounds the previous year. Produc-tion of other cheese in California totaled 127.1 million pounds in 2011, up from 102.2 million pounds in 2010.

In other Class 4b production, whey protein concentrate (human and isolates) in California totaled 105.5 million pounds in 2011, down from 106.5 million pounds in 2010. California production of lactose powders (human and animal) in 2011 totaled 330.8 million pounds, up from 297.6 million pounds in 2010.

For the complete California annual dairy statistics, visit www.cdfa.ca.gov/dairy/dairystats_annual.html. CMN

F&A Dairy Products launches final phase of solar projectLAS CRUCES, N.M. — Sunspot Solar Energy has entered the final phase of a solar-energy project at F&A Dairy Products Inc. facility here.

Last year, F&A Dairy installed 430 solar panels in the first phase of the project. The final phase of the project should bring the number of solar panels at the facility to about 2,230.

“Electricity production has been so good, we’re moving ahead of schedule,” says Bob Snyder, vice president of New Mexico operations for F&A Dairy.

The company — which produces mostly cheese at its facility in Las Cruces — reports that the solar energy system has already dramatically reduced the electric bill for its water treatment operations.

Sunspot Solar Energy designed the photovoltaic system using solar panels made in New Mexico. Upon completion, the system is expected to decrease carbon dioxide emissions by 700,000 pounds and save 1.7 million gallons of water per year that typically would be used to generate electricity. CMN



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SPX Corp. to establish new plant in ChinaSHANGHAI, China — SPX Corp. says its flow technology segment has been awarded a $40 million contract to es-tablish a new dairy processing plant here for Bright Dairy & Food Co. Ltd.

The new plant will be capable of producing pasteurized fresh milk, as well as ultra-high temperature (UHT) long shelf life milk and yogurt. It’s ex-pected to be one of the largest fresh dairy and yogurt plants in China.

SPX will design and install a se-ries of full-line fresh dairy and yogurt processing systems in Bright Dairy’s 1.6 million-square-foot facility, which is currently under construction in Shanghai. The plant is expected to ex-

pand Bright Dairy’s overall production capacity to more than 2.1 million liters per day and will bring the company’s production of fresh dairy milk and yo-gurt under one roof for the first time, SPX says.

“We look forward to leveraging our deep expertise in dairy processing technologies to help Bright Dairy es-tablish the largest multi-product dairy facility in China’s dairy industry,” says Don Canterna, SPX segment presi-dent. “Bright Dairy is well positioned to help meet growing demand across China for fresh milk, ultra-high tem-perature long shelf life milk and yo-gurt.” CMN

NEWS/BUSINESS

NEW DEHLI — A survey conducted by the Food Safety and Standards Authority of India found that contamination was evident in nearly 70 percent of milk samples collected from 33 Indian states.

The non-governmental watchdog group conducted the survey to ascertain milk quality and identify different types of adulteration in milk throughout the country.

Of 1,791 samples collected from 33 states, contamination was found in 1,226 samples (68.4 percent), according to a summary of the survey.

Milk powder, fat, glucose and water

Survey shows contamination in nearly 70 percent of milk samples from India

were among the substances found in the samples.

Deviation was highest for fat per-centage and solids-non-fat percentage in 574 samples (46.8 percent) of non-conforming samples.

Dilution of milk with water could have caused this, the survey summary says.

Dilution reduces nutritional value of the milk and contaminants in the water can pose further health hazards, the survey notes.

Skim milk powder represented the second highest parameter of noncon-formity as glucose was found in 44.7 percent of 548 samples collected.

The survey found that powdered milk had been reconstituted to meet milk-supply demand.

Detergent also was found in 103 samples (8.4 percent).

Nearly 70 percent of samples col-lected from urban areas were found to be contaminated. Just two states — Goa and Pondicherry — had no contamination.

Shri V.N. Gaur, CEO, FSSAI, says not all nonconforming samples pose health risks, and the survey doesn’t identify particular milk producers. CMN

Review says dairy consumption could speed fat and weight loss LONDON — Incorporating dairy foods such as milk, cheese and yogurt into a weight-loss diet can help accel-erate fat and weight loss, according to a recently-published scientific review.

The review, “Effect of dairy consumption on weight and body composition in adults: a systematic review and meta-analysis of random-ized controlled clinical trials,” was published in the Jan. 17, 2012, issue of the International Journal of Obesity. As part of the review, researchers identified 16 studies that looked at the effect of dairy consumption on weight, body fat mass, waist circumference and lean muscle mass in adults.

After reviewing the studies, the authors concluded that increased dairy consumption without calorie restriction might not lead to a sig-nificant change in weight or body composition. However, the authors say inclusion of three to four servings of dairy foods a day as part of a calorie-restricted diet significantly affects weight, body fat mass, lean muscle mass and waist circumference when compared to usual weight-loss diets.

While the mechanisms for dairy’s weight-loss benefits are not certain, the authors suggest nutrients found in dairy, such as calcium, protein and cer-tain fatty acids, may be involved. CMN



approve.”“This is a logical resolution of

the problem that was identified,” Oemichen says. “This will improve a law that helps keep Wisconsin’s dairy industry vital and moving ahead.”

According to an estimate by the Wisconsin Department of Revenue, SB260 would have minimal fiscal impact on the state.

SB260 now advances to the State Assembly for consideration. Its As-sembly companion bill, AB357, has been recommended for approval by the Assembly Committee on Ag-riculture by a 14-0 margin. CMN

NEWS/BUSINESS

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MADISON, Wis. — A bill that would make tax credit law more flexible for dairy cooperatives that invest in manufacturing facilities in Wisconsin cleared the State Senate on Feb. 14.

Current credit law for dairy manufacturing facility investments offers a tax credit of up to $200,000 for cooperatives that expand or mod-ernize facilities. The law allows that credit to pass-through to members of the cooperative who deliver milk, however, state application deadlines have made it difficult for members of cooperatives to receive the tax credit without incurring additional costs for

Wisconsin senate bill adds flexibility to dairy cooperative credit lawtax preparation.

Senate Bill 260, which passed by a 33-0 margin, would make members eligible for the credit in the taxable year after the plant modernization or expansion. Members also would remain eligible for the credit in the same taxable year the facility improvements are made.

Bill Oemichen, president and CEO, Cooperative Network, which provides government relations and technical services to more than 600 member-cooperatives in Minnesota and Wisconsin, hailed the measure as “a solution that all interests could

Study: Lactoseintolerant people consuming more dairy productsROSEMONT, Ill. — A recent health and wellness study funded by the national dairy checkoff suggests an increase in the consumption of dairy among self-described lactose-intolerant consumers that has led to an additional 276 million pounds of dairy consumption over the last several years.

The Milk Opportunities Study, conducted in September, says fam-ily physicians who recommend dairy alternatives to lactose-intolerant patients have decreased by 44 percent since 2008. Additionally, supermarket scanner data indicate that 1.4 mil-lion more households are purchasing lactose-free milk.

The national dairy checkoff, man-aged by Dairy Management Inc., has launched physician outreach pro-grams to return to the dairy category 53 million adults who claim symptoms of lactose intolerance and are restrict-ing or avoiding dairy consumption.

As part of a partnership with Mc-Neil Consumer Healthcare, a division of Johnson & Johnson Inc. which supplies the natural-source lactase enzyme found in Lactaid, the checkoff aims to reach 10,000 family physicians with lactose-free milk and Lactaid supplement education information and trial opportunities. Another effort engages state and regional dairy pro-motion organizations to reach 25,000 primary-care physicians with informa-tion and trial opportunities. CMN

IARW, Cascade Energy Inc. partner to publish special refrigeration guideWASHINGTON, D.C. — The Inter-national Association of Refrigerated Warehouses (IARW) has partnered with Cascade Energy Inc. to publish a special edition of the Industrial Refrigeration Best Practices Guide.

The guide offers an overview of refrigeration best practices, refrig-eration system basics and strategies to decrease energy usage. It’s written for audiences ranging from system operators and maintenance teams to executives.

“The Industrial Refrigeration Best Practices Guide is yet another way IARW and Cascade Energy Inc. are helping members reduce costs while optimizing performance,” says Bill Hudson, president and CEO, IARW.

The guide is offered free of charge to IARW members and for $50 to non-members. To learn more, visit www.iarw.org. CMN



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David Thomas named chief executive of American Dairy Products InstituteELMHURST, Ill. — The American Dairy Products Institute (ADPI) has announced that David Thomas has been appointed as its new CEO.

“Dave Thomas has the experience, skill and character to lead the American Dairy Products Institute into a very bright future,” says Greg Dyer, president of the ADPI board of directors. “We welcome Dave and look forward to his contribution to our mutual success.”

Thomas comes to ADPI with more than 35 years of experience in the dairy industry, including operations manage-ment roles at Cream O’Weber, Gossner Foods and 15 years as president and CEO of Glanbia Foods. Thomas was instrumental in the growth of Glanbia Foods as he spearheaded several invest-ment and expansion phases, leading the company to become one of the largest producers of American-style cheese and nutritional products derived from whey in the country, ADPI says.

During the course of his career, Thomas also played a key role in help-ing oversee one of the largest Cheddar cheese plants in the world with the construction of the Southwest Cheese Co. facility in Clovis, N.M.

In February 2009, Thomas developed his own business, Dairy Consulting LLC, which provided consulting services to dairy processing companies. The company specialized in development projects, business planning, feasibil-ity studies, management training and process improvement.

“I am excited about starting this new chapter in my career in the dairy industry, and look forward to leading such a distinguished and vital organiza-tion as ADPI,” says Thomas.

Thomas is a past president and board member of the Idaho Milk Pro-cessors Association and a former board member of ADPI and the International Dairy Foods Association (IDFA). CMN

APPLETON, Wis. — Robert G. Lewis, founder of Family Dairies USA, and Doug Caruso, former general manager of the cooperative, were recently honored dur-ing the organization’s 40th anniversary meeting.

Lewis, who received a lifetime achievement award from Family Dair-ies, worked as an agricultural coor-dinator for Wis. Gov. Gaylord Nelson and served with the Kennedy/Johnson administration as a campaign director of National Farmers for Kennedy/Johnson.

He organized The Midwest USDA Qualified Dairy Co-op for the National Farmers Union and served as general manager of the Farmers Union Milk

WASHINGTON, D.C. — USDA is asking milk producers and other interested parties to nominate candidates to serve on the National Dairy Promotion and Research Board. Nominations must be submitted by March 16.

Twelve individuals will be appointed to succeed members whose terms expired Oct. 31. The 12 new members will serve terms ending Oct. 31, 2014.

USDA will accept nominations from the following regions: Region 1 (Alaska, Oregon and Washington); Region 3 (Ari-zona, Colorado, Montana, Nevada, Utah and Wyoming); Region 4 (Arkansas, Kansas, New Mexico, Oklahoma and Texas); Region 5 (Minnesota, North Dakota and South Dakota); Region 6 (Wisconsin); Region 7 (Illinois, Iowa, Missouri and Nebraska); Region 8 (Idaho); Region 9 (Indiana, Michi-gan, Ohio and West Virginia); Region 10 (Alabama, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee and Virginia); and Region 12 (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont). One member will be appointed for each of Regions 1, 3, 5, 7, 8, 9, 10 and 12, and two members will be appointed for each

Family Dairies USA honors two at meetingMarketing Cooperative (which became Family Dairies USA) from 1971-1972. Fol-lowing that, Lewis served as chief econo-mist of the National Farmers Union.

Doug Caruso, who was presented with the 2012 Family Dairies USA Meritorious Service Award, was origi-nally hired to run Family Dairy USA’s public relations department, eventu-ally serving as general manager. He is credited with helping to design Family Dairies original expansion program.

Caruso became agriculture staff specialist for 2nd District U.S. Rep. Robert Kastenmeier, D - Wis., and also served as Wisconsin state executive di-rector of the Farm Service Agency. CMN

USDA seeks 12 nominees to National Dairy Promotion and Research Board

of Regions 4 and 6.The National Dairy Promotion and

Research Board was established under the Dairy Production Stabilization Act of 1983 to develop and administer a coordinated program of promotion, research and nutrition education. The 38-member board is authorized to design programs to strengthen the dairy industry’s position in domestic and foreign markets. The program is financed by a mandatory 15-cent per hundredweight assessment on all milk produced and marketed commercially, and a 7.5 cents per hundredweight as-sessment on milk, or equivalent thereof, on dairy products imported into the United States.

All eligible women, minorities and persons with disabilities are encour-aged to seek nomination for a seat on the National Dairy Promotion and Research Board.

For nominating forms and informa-tion, visit www.ams.usda.gov/dairy, or contact Whitney A. Rick, director, promotion, research and planning divi-sion, dairy programs, AMS, USDA, 1400 Independence Ave., S.W., Room 2958-S, Stop 0233, Washington, D.C. 20250-0233; telephone 202 -720-6909; or e-mail [email protected]. CMN

EVENTSFood Proteins course set for April 17-19

Comings and goings … comings and goings

Koch Membrane Systems Inc. (KMS) has hired Ravichandran Sub-ramanian as its regional commercial manager. He will be responsible for developing the markets for all KMS products in Southeast Asia for the water and wastewater and industrial and life science divisions of the com-pany. Subramanian has more than 15 years of industry experience in sales, management and product management.

University of Wisconsin-River Falls has announced that licensed cheesemaker Michelle Farner has been hired as manager of its dairy pilot plant. Former manager Ranee May has resigned from the position. Farner has worked in quality assurance at two food manufacturing facilities in Wisconsin. University of Wisconsin-River Falls’ dairy pilot plant typically employees seven students and supplies the cam-pus with a variety of fresh products, including cheese, ice cream and milk.

Multivac Inc., Kansas City, has appointed Ty Threedy regional sales manager within the company’s food division. Threedy will serve custom-ers in the northern sections of Cali-fornia and Nevada. He joins Multi-vac from Polychem Corp., where he served as regional sales manager.

National Ice Cream Mix Associa-tion (NICMA), Fort Lauderdale, Fla., has elected Craig Colonno of Anderson Erickson Dairy, Des Moines, Iowa, presi-dent of the organization. Joe Duscher of Upstate Niagara Cooperative, Buffalo, N.Y, was elected vice president, and Pat Galloway of Classic Mix Partners LLC, Neenah, Wis., was elected trea-surer. NICMA also elected Ed Coryn of Dairy-Mix Inc., St. Petersburg, Fla.; Paul Dean, Scholle Packaging Inc., Northlake, Ill.; and Steve Steinwart, Meadowvale Inc., Yorkville, Ill., to serve as representatives on the board of directors for a three-year term. CMN

AMSTERDAM, the Netherlands — The sixth annual Food Proteins Course will be held here April 17-19.

The course, “Food Proteins: Prop-erties, Functionalities & Applications” is designed to give participants a theo-retical and practical overview of veg-

etable and animal proteins currently available for food applications and to provide hands-on information about their properties and functionalities.

Cost to attend the three-day confer-ence is $2,275. To learn more, or to reg-ister, visit www.bridge2food.com. CMN



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IDDBA’s Dairy-Deli-Bake 2012 program to be held June 10-12 in New Orleans

Maine Cheese Guild to host workshops on making British hard cheeses April 28-29

NEW ORLEANS — The International Dairy-Deli-Bakery Association (ID-DBA) has announced the speaker lineup for the Dairy-Deli-Bake 2012 program to be held June 10-12 at the New Orleans Morial Convention Center.

Sarah Palin, Paula Deen and Terry Bradshaw highlight this year’s list of featured speakers during the three-day event.

The event aims to bring 8,000 indus-try insiders together to build relation-ships, sell and buy new products and services, and learn new tactics and strategies.

A full morning of presentations kicks off June 10 with Jack Li, relevance strategist of Datassential Inc., discuss-ing what triggers consumers to pur-chase dairy, deli and bakery products.

Harold Lloyd, of Harold Lloyd Presents, will cover strengthening brands and developing a “cravability factor” in consumers. Jeremy Gutsche, founder of TrendHunter.com, will discuss us-ing social media and viral marketing to make brands matter by “unlocking cool and exploiting chaos.” Paula Deen will share her life’s journey and road to success in her “Best Dishes” presenta-tion. Comedian John Pinette will give his insights on food, eating, buying and merchandising. Morning presentations conclude at 12:30 p.m. and the Show & Sell Center Merchandising Pavilion will remain open until 5:30 p.m.

Morning programming continues June 11 with Steve Beekhuizen, presi-dent of IDDBA and senior vice president of sales for Dawn Food Products Inc.,

discussing supermarkets becoming the restaurants of the future. Carol Christison, executive director of ID-DBA, will discuss leading the food parade with consumers, trends and new products. Sarah Palin will present “The Heart of a Renegade Trailblazer.”Jane Buckingham, president of Trendera.com, will discuss bridging consumer generational gaps. Morning programs will conclude at 12:30 p.m. with Adrian Slywotzky, recognized as one of the top 50 business thinkers by Times of London and Industry Weekly, discussing how to create demand for products before consumers know they want them. The expo and merchandising pavilion will remain open until 5:30 p.m. The day will conclude with a party sponsored by the Wisconsin Milk Marketing Board

from 6-9:30 p.m.June 12 will begin with Jim Carroll,

futurist and innovation expert, discuss-ing the “new normal” in the business world. Terry Bradshaw then will discuss maximizing personal power. The expo and pavilion will be open from 10 a.m.-2 p.m. The program will conclude with a reception and awards banquet from 6-10 p.m.

Registration costs for consultants, spouses or manufacturing representa-tives costs $350 for members or $475 for non-members. Cost for retailers and cooperative representatives is $150 for members or $175 for non-members. Cost for direct store delivery food distribu-tors is $250 for members or $375 for non-members. For more information, or to register, visit www.iddba.org. CMN

BETHESDA, Md. — New research suggests the types and levels of bacteria in the intestines may be used to predict a person’s likeli-hood of having a heart attack, and manipulating these organisms may help reduce heart attack risk. This discovery may lead to new diagnostic tests and therapies physicians use to prevent and treat heart attacks. This research, published online by the Federation of the American Societies for Experimental Biology (FASEB) in the FASEB Journal, also suggests that probiotics may be able to protect the heart in pa-tients undergoing heart surgery and angioplasty.

“Our discovery is a revolutionary milestone in the prevention and treatment of heart attacks,” says John E. Baker, study author from the Division of Cardiothoracis Surgery at the Medical College of Wisconsin in Milwaukee. “The biochemical link between intestinal bacteria, their metabolites and injury to the heart will reduce the risk of death from a heart attack and, coupled with the use of probiotics, will ultimately be able to improve the overall car-diovascular health of the human population.”

Baker and his colleagues con-ducted experiments involving three groups of rats. The first group was fed a standard diet. The second group was given the antibiotic van-comycin in their drinking water.

Probiotics could help with heart protection The third group was fed a probiotic supplement containing Lactobacil-lus plantarum, a bacterium that suppresses the production of leptin.

The group treated with the anti-biotic had decreased levels of leptin, a protein hormone that plays a key role in appetite and metabolism, which resulted in smaller heart attacks and improved recovery of mechanical function compared to the standard diet group.

The antibiotic reduced total bac-terial numbers in the intestines and altered the abundance of specific types of bacteria and fungi that live in the gut. The third group was fed a probiotic that also altered the numbers and types of bacteria and fungi living in the gut. Like those fed the antibiotic, these rats also had decreased leptin levels, resulting in smaller heart attacks and greater recovery of mechanical function compared to the first group.

“We may not be ready to prescribe yogurt to prevent heart attacks, but this research does give us a much better understanding of how the microbiome affects our response to injury,” says Gerald Weissmann, ed-itor-in-chief of the FASEB Journal. “Just as physicians use cholesterol levels, blood pressure and overall body composition as measures of heart disease risk, we may soon evaluate our body’s susceptibility to disease by looking at the microbes that inhabit the gut.” CMN

NEWS/BUSINESS

EVENTS

ROCKPORT, Maine — The Maine Cheese Guild will host workshops on how to make British hard cheeses here April 28-29.

According to legend, British chee-semakers have focused on making

hard cheeses that could survive days and weeks of travel to the markets. Kathy Biss, a British cheesemaker from West Highland Dairy in Scot-land, will lead classes on techniques for making and aging these types

of cheeses, including Lancashire, Cheshire, Gloucester, Wensleydale, Double Gloucester, Red Leicester and Caerphilly.

The workshops are limited in size. To reserve a spot, send contact info (including e-mail address) and a check for the appropriate deposit amount to: Maine Cheese Guild,

c/o Mark Whitney, treasurer, Pin-eview Farms, 32 Farm View Drive, new Gloucester, ME. Visit www.mainecheeseguild.org for more in-formation.

Cost to attend is $300 for non-members and $250 for mem-bers. A deposit of $100 per per-son will reserve a spot. CMN



NEWS/BUSINESS

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BURLINGTON, Vt. — U.S. Sens. Pat-rick Leahy, D-Vt., and Bernie Sanders, I-Conn., and Rep. Peter Welch, D-Vt., recently introduced legislation to ex-tend the Milk Income Loss Contract (MILC) program at current support levels for one year.

Without action, dairy farmers could face a severe drop in support from the MILC safety net come Sept. 1, the lawmakers say. They note the MILC program helps dairy farmers when the price of milk falls below $16.94 per hundredweight. Once triggered, farm-ers receive 45 percent of the difference between that price and the current price of milk, which also takes into account feed costs as a factor in triggering pro-gram payments.

The farm bill, which authorizes many programs under the purview of USDA, is set to expire Oct. 1. For the last month of the farm bill, after Aug. 31, the MILC program support levels for dairy farmers drop significantly, which would leave dairy farmers exposed without a suf-ficient safety net, the lawmakers say.

“While many in agriculture are fo-cused only on Sept. 30 when the farm bill expires, we in dairy know that we are in a unique position and the date that re-

Bill seeks to extend MILC at current levelsally matters is Aug. 31,” Leahy says. “We cannot have our nation’s dairy farmers left exposed without a sufficient safety net. I remain committed to passing a farm bill this year, and I am pleased that Sen. Debbie Stabenow, D-Mich., who chairs the Senate Agriculture Commit-tee, has announced a hearing schedule that will allow us to continue evaluating policy solutions so we can swiftly and effectively craft the 2012 Farm Bill.”

Sanders adds that extending the MILC program for a year will allow Congress to come up with a long-term solution for the fluctuation in the price farmers are paid for their milk.

The International Dairy Foods As-sociation (IDFA) notes that although the organization would like to see support programs move toward risk management tool for dairy farmers, the current MILC program is preferable to production controls and the “stabiliza-tion” program being promoted by the National Milk Producers Federation.

“The stabilization program would not only collect millions of dollars of rev-enues from dairy farmers but would add a new regulatory burden on processors,” says Ruth Saunders, IDFA vice president of policy and legislative affairs. CMN

ARDEN HILLS, Minn. — Land O’Lakes Inc. this week released its 2011 financial results, which included record sales and the company’s second-highest net earnings.

Highlights of 2011 included: • Record net sales of $12.8 billion,

up from $11.1 billion in 2010. • Net earnings of $182 million, the

second-highest in Land O’Lakes’ history, up from 2010’s $178 million.

• $108 million in cash returns to members, the cooperative’s third-highest annual cash return.

“Our 2011 results reflect strong performance in a challenging economy and volatile marketplace,” says Chris Policinski, president and CEO, Land O’Lakes. “These results also continue a trend of strong performance. Over the past three years, Land O’Lakes delivered its top three years in net earnings and cash returns to members, as well as two of our top three years in net sales.”

The co-op says these positive results were driven by the strength of Land O’Lakes’ brands; solid performance by innovative new products; a continued focus on operating efficiency and risk management; and the disciplined pursuit of strategic growth initiatives.

“Agriculture and food production are among the best growth industries of our era,” Policinski adds.

He cites the increasing demand for food, driven by an expanding global population, which is expected to increase from nearly 7 billion people today to more than 9 billion by 2050.• Sales and earnings

Land O’Lakes 2011 net sales totaled $12.8 billion, up 15 percent from 2010’s $11.1 billion. These results include re-cord revenues in the company’s Dairy Foods, Feed and Crop Inputs businesses.

Net earnings for 2011 totaled $182 million, up 2 percent from 2010’s $178 mil-lion. Earnings for 2011 were impacted by $14.7 million in unrealized hedging losses (as of Dec. 31, 2011), while 2010’s earn-ings include the impact of $6.2 million in unrealized hedging gains. Company officials note that unrealized hedging is more an indicator of market conditions at a given time than of performance.

Land O’Lakes releases financial results; 2011 figures show record net sales

• Balance sheetTotal balance sheet debt, including

capital leases, was $915 million at year-end vs. $618 million as of Dec. 31, 2010. This increase was mainly due to higher work-ing capital use, stemming from increased product prices and business growth. The company took advantage of historically low market interest rates to lock in attractive long-term debt during the year, including a $150 million, 10-year term loan at the parent level and a $60 million, five-year term loan at its Moark subsidiary.

The company’s long-term debt-to-capital ratio was 41.3 percent as of Dec. 31, 2011 vs. 32.5 percent at the end of the prior year. During 2011, the company received financial rating upgrades from both Standard and Poor’s and Moody’s Investors Services, achieving Investment Grade status with both agencies.• Dairy Foods performance

Land O’Lakes’ Dairy Foods business reported record sales of $4.3 billion, up 17 percent from 2010. Dairy Foods achieved pretax earnings of $28.1 million for the year, compared to $50.3 million in pretax earnings for 2010. The co-op says these results reflect the impact of an uncertain general economy and late-year volatility in dairy markets. Dairy Foods 2011 results include a $6.5 million unrealized hedging loss (as of Dec. 31, 2011), while 2010 results included a $4.2 million unrealized hedging gain.

While Dairy Foods volumes were mixed, with overall retail volume down 6 percent, margins were strong nearly across-the-board. Notably, the company held its volume in its industry-leading branded butter and deli cheese product lines, and new, innovative products (like Land O’Lakes spreadable tub butter and “Deli Health” cheese) performed well.

The company’s Dairy Foods Business-to-Business operations outperformed the industry, with Foodservice volumes up 8 percent and Ingredients volumes up 1 percent. During the year, Land O’Lakes repositioned its global dairy powders business, shifting from selling dairy-based powders (through a marketing agency) as an unbranded commodity to the mar-keting of value-added, branded powder to key commercial customers. CMN

OSSEO, Wis. — Castle Rock Organic Dairy Plant, Osseo, Wis., recently warned consumers not to drink its whole milk dated Feb. 29, carrying the brand name Castle Rock Organic Farms, because it may not be properly pasteurized.

The Wisconsin Department of Agri-culture, Trade and Consumer Protection (DATCP) conducted laboratory testing on the product and confirmed that pasteurization of the product may have been inadequate. Food safety officials say they are unaware of any illnesses caused by the product.

The milk was sold in half-gallon and quart glass bottles. It has a sell-by date

Castle Rock dairy issues warning on milkof Feb. 29 and dairy plant number of 55-1951 on the bottle. It is believed to have been distributed in Wisconsin, Minnesota and Illinois. The products were produced at Castle Rock Organic Farms in a licensed on-farm bottling plant. The company says consumers who have this product in their homes should discard it.

DATCP says laboratory tests re-sulting from a routine inspection showed the presence of an active enzyme that normally is destroyed by pasteurization. Testing for this enzyme activity routinely is done to check for proper pasteurization. CMN



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NEWS/BUSINESS

please enter my subscription to 1 YEAR RATES: ELECTRONIC 1 YEAR RATES: 2 YEAR RATES:T $135 (2nd Class) T $135 (E-mail Only. No Mail Service) T $195 (2nd Class)T $190 (1st Class/Canada) T $210 (E-mail With 2nd T $315 (1st Class/Canada)T $330 (International) Class Mail Service) T $525 (International)T Payment enclosed T Bill MeT Payment by credit card: T VISA T MASTERCARD T AMERICAN EXPRESSCard # ________________________________________________ Exp. Date______ Sec. Code_____

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information on topics across a range of TPP chapter and issue areas. Japanese officials also provided further informa-tion about Japan’s existing laws and regulations, as well as information on relevant provisions in its existing free trade agreements with other trading partners. Both governments agreed to continue the consultative process, with additional meetings to be arranged at a later date.

In November 2011, Japan announced its intention to begin consultations with TPP countries in a movement toward joining the TPP negotiations. Since that time the USTR has sought public comments and is continuing to consult with Congress and domestic stakehold-ers to address specific areas of concern in the process of assessing Japan’s readiness to meet TPP’s standards for liberalizing trade.

Also addressing the TPP negotiations, this week the U.S. Dairy Export Council (USDEC) sent a letter and report to USTR Kirk and U.S. Secretary of Agriculture Tom Vilsack that continue to express

support for the TPP but cite ongoing con-cerns about anti-competitive practices by the New Zealand dairy industry that it says negatively impact USDEC member companies as they seek to build market share and compete in the global market.

The United States currently does not have a free trade agreement with New Zealand, and USDEC and others in the U.S. dairy industry have sought to pre-vent an individual trade agreement with New Zealand in the TPP negotiations, arguing that such an agreement could put U.S. dairy exports at a disadvantage.

The letter notes that USDEC consis-tently has championed expanding dairy trade opportunities and advocated for a high-quality TPP agreement that, in addition to achieving state-of-the-art trade rules and new market access with important economies including Japan and Canada, also addresses many non-tariff issues that impede greater U.S. exports. USDEC says its report on New Zealand’s anti-competitive practices is part of its effort to tackle major non-tariff concerns negatively impacting U.S. dairy exports through the TPP.

“New Zealand seems to want to have robust and open competition everywhere except in their own dairy

to Mexico topped $1.17 billion last year, up 41 percent from 2010 levels, accord-ing to trade data from USDA’s Foreign Agricultural Service. Mexico is the largest overseas market for U.S. milk powder, cheese and ice cream, providing a vital outlet for more than 3 percent of the U.S. milk supply, USDEC says.

“It was apparent early on that Mexico would be our most important export market,” says Les Hardesty, a dairy producer from Greeley, Colo., chairman of USDEC and a board member of Dairy Management Inc., which is the primary funder of USDEC. “But we needed to invest in a series of programs that, over time, would enable U.S. suppliers to fully capitalize on the opportunity. USDEC’s integrated activities in mar-keting, technical assistance and trade policy advocacy have helped to ensure dairymen have markets for growing U.S. production.”

In the mid-1990s, U.S. dairy exports to Mexico were valued at about $150 million per year, and U.S. share of the nation’s dairy imports was about 20 per-cent. Most of those sales were subsidized by the U.S government. Now U.S. suppli-ers sell that much every six weeks, U.S. import share tops 60 percent, and all of today’s transactions are commercial sales, USDEC says.

“The United States has enjoyed several natural advantages in shipping to Mexico, including NAFTA tariff cuts, geographical proximity and a historic familiarity with U.S. brands and culture. But to fully capitalize on these advan-tages, we had to prove our mettle as dependable partners in the market,” says Tom Suber, president, USDEC.

“None of these market gains hap-pened overnight,” he adds. “We had to lay the necessary groundwork and stay committed through changing conditions. And to their credit, U.S. dairy processors, manufacturers and producers have long appreciated the importance of the Mexican market. They have made investments on both sides of the border to better serve our No. 1 overseas customer.” CMN

fire in the bag house. Spinner says none of the sensors had indicated heat after the initial fire, so they had determined it was safe to leave.

“Apparently though, there had to be some damaged sensors or a small or smoldering fire near the bag house,” Spinner says. “When air was introduced, air and dust from the product may have created the explosion.”

One person was trapped in the dome area above the fire. Spinner says the Lynden Fire Department has a ladder truck it had purchased but was not yet in service, so firefighters from North Whatcom, Wash., brought their ladder truck and helped Spinner rescue the employee from the dome area.

“We were on the scene for another five to six hours after that trying to put the fire out. It was quite a task,” Spinner says.

The employee that had been trapped was taken to the hospital, treated for smoke inhalation and released the same day. Carter says the company is grateful to the Lynden and Whatcom firefighters who helped the employee and contained the fire.

The plant contains two dryers, and with the second dryer still working, Darigold currently is operating the plant at 60-percent capacity. Carter estimates it will take three to five months for the plant to return to full operation. Meanwhile, Darigold is rerouting milk to other processing plants to meet customers’ needs, and no shortage is expected. Darigold has 13 processing plants in six states. CMN

FIREContinued from page 1

TRADEContinued from page 1

industry,” says Mark Davis, chairman of Davisco Foods International and a long-standing USDEC member. “Our concerns center on the fact that the New Zealand government has purposely made exceptions to its regulations to permit one company to gain a tremen-dous amount of market power. If the TPP does not address the actual current situation in New Zealand, it will only further cement that dynamic in ways that punish our industry.”

The National Milk Producers Asso-ciation (NMPF) today released a state-ment applauding USDEC’s report on the anti-competitive practices in the New Zealand dairy industry. NMPF estimates that U.S. dairy farmers could face $20 billion in losses during the first decade of a free trade agreement with New Zealand if U.S. dairy tariffs were fully eliminated for New Zealand’s benefit.

NMPF says the future inclusion of dairy negotiations with Japan and Canada as being among the most signifi-cant new openings TPP could ultimately offer, but that U.S. dairy producers are vehemently opposed to any expansion of U.S.-New Zealand dairy trade as part of the TPP negotiations, given New Zealand’s dairy market concentration and it’s domineering firm’s (Fonterra’s) tremendous global market power.

“New Zealand’s government and dairy industry have been eaming up to spend considerable resources in court-ing members of the U.S. Congress on the TPP, but our representative need to keep in mind the harsh realities of the global dairy industry, where trade is dominated by one company,” says Jerry Kozak, president and CEO of NMPF. “And that dominion has been facilitated by New Zealand’s policy of granting a market concentration exemption to a single company, allowing it to sway both internal and external dairy markets.”

In other dairy export news, USDEC notes that the latest trade data makes Mexico the first billion-dollar U.S. dairy export market in 2011, the cumulation of more than 15 years of broad-based market development efforts. Shipments

WASHINGTON — A federal court has granted FDA a permanent injunction preventing Daniel L. Allgyer and his Rainbow Acres Farm in Kinzers, Pa., from distributing raw milk and raw milk products in final package form for human consumption across state lines.

U.S. District Judge Lawrence F. Sten-gel of the Eastern District of Pennsylvania also ruled that Allgyer’s participation in a “private buying club” does not shield him from federal oversight and that Allgyer’s “cow share” agreements are a subterfuge for sales of raw milk. (See reference to this case in “Several states look at legal avenues for raw milk sales” in last week’s issue of Cheese Market News.)

Allgyer provided association mem-bers who lived outside of Pennsylvania with containers of raw milk even though

Interstate sales banned for raw milk sellerfederal law prohibits sales of raw milk for human consumption across state lines. Raw milk sales are legal within the state of Pennsylvania.

FDA says Allgyer also violated federal law by not providing any labeling on the raw milk containers sold to consumers.

The permanent injunction requires Allgyer to place a statement on his prod-ucts, invoices and website that he will no longer distribute unpasteurized milk or milk products in interstate commerce. He also must keep complete records of each sale, including the name and address of each buyer, the date of sale or distribution and the amount and type of products sold, and must provide a copy of the court’s order to all employees and persons who work with him to distribute unpasteur-ized milk and milk products. CMN


NEWS/BUSINESSFebruary 24, 2012 — CHEESE MARKET NEWS® 15

STATESContinued from page 1

• 2011 production details releasedDecember revised production, at 15.43

billion pounds, was up 2.7 percent from December 2010. The December revision represents an increase of 1 million pounds or less than 0.1 percent from last month’s preliminary production estimate.

The annual production of milk for the United States during 2011 was 196.245 billion pounds, 1.8 percent above 2010, according to this month’s report, which also provides details of 2011 production and updates to 2010 figures. Revisions to 2010 production increased the annual total 29 million pounds. Revised 2011 production was up 29 million pounds from last month’s report.

Production per cow in the United States averaged 21,345 pounds in 2011, 197 pounds above 2010. The average annual rate of milk production per cow has increased 14.7 percent from 2002.

The average number of milk cows on farms in the United States during 2011 was 9.19 million head, up 0.8 percent from 2010. The average number of milk cows was revised up 2,000 head for 2010.

NASS says California led the nation’s milk production in 2011 with 41.46 billion pounds, up 2.7 percent from its produc-tion a year earlier. Wisconsin followed with 26.12 billion pounds, up 0.3 percent from its production a year earlier.

Rounding out the top five milk-producing states in 2011 were Idaho with 13.26 billion pounds, up 3.7 percent from its production a year earlier; New York with 12.83 billion pounds, up 0.9 percent; and Pennsylvania with 10.60 billion pounds, down 1.2 percent.• Beginning of 2012 shows gains

The beginning of 2012 shows con-tinued gains in milk production. Na-tionally, USDA estimates January 2012 production at 16.95 billion pounds, up 3.4 percent from a year earlier.

There were an estimated 9.24 million cows on U.S. farms in January, up 13,000 head from December 2011 and up 76,000 head from January 2011. Milk per cow averaged 1,835 pounds in January 2012, up 45 pounds from a year earlier.

In the 23 major milk-producing states, NASS says there were 8.50 mil-lion cows in January, up 13,000 head from December 2011 and up 93,000 head from January 2011. Production

per cow in the 23 major states averaged 1,857 pounds, 46 pounds more than a year earlier.

California, the nation’s top milk-producing state, saw production climb 6.6 percent in the January-to-January comparison to 3.62 billion pounds. The state was home to 1.78 million cows in January, 2,000 head more than a month earlier and 29,000 head more than a year earlier. Production per cow averaged 2,030 pounds in January, 95 pounds more than in January 2011.

Wisconsin followed with 2.28 billion pounds of milk produced in January, an increase of 3.7 percent from its produc-tion a year earlier. Wisconsin was home to 1.27 million cows in January, holding steady from a month earlier and a year earlier. Production per cow was 1,800 pounds in January, averaging 65 pounds more per cow than a year earlier. CMN

Noble says another major driver in the dairy industry has been ethanol.

“Obviously, ethanol has been a game-changer for the dairy industry. The economics, relationship between feed, cost and milk price, has forced dairymen to control more land in order to control their feed cost,” he says.

Much of the Western dairy industry

has been built on exchanging land that is close to cities and moving out further to bigger tracts. However, Noble says he questions whether the industry is going to see more of that going forward as the industry has moved further away from population centers.

“I’m sure that trend isn’t going to stop, but is it going to slow down, as we see how the economics of the feed situation has changed?” he asks. “We are seeing that with dairies looking to relocate to the Upper Midwest where

corn and feed costs are lower.”In addition to working to help control

feed costs, many in the dairy industry also are moving toward integrating vertically to enhance the value of their milk by climbing a little higher on the value chain, Noble says.

“Hilmar is an example, a group of dairymen who got together to build a cheese plant. They’ve been very suc-cessful in doing that,” Noble says. “Some folks maybe will not go all the way to a finished product, but maybe part way, will condense milk or find something they can do for processors to perceive them as a preferred supplier.”

Noble says the processing side has done a wonderful job innovating with new products, packaging and markets, and says there has been less incentive to get creative on the production side.

“Milk is milk, and you can do what you can with quality, freshness and making it more sustainable in a green fashion, but it hasn’t resulted in higher returns for the dairy farmer,” he says. “In the past, farmers have been able to grow in scale to bring value. If you can fill a tank of milk, that’s an advantage on the processors’ side. But in addition, what can we do to differentiate ourselves and grab a little more of that value chain?

Noble says Noblehurst Farms hires the brightest and best, and the business constantly looks for opportunities to allow talent to break through a glass ceiling of traditional production ag compensation.

“We realize there are glass ceilings

to the positions that are created in our business,” he says. “We’ve reached out to manage other dairy farms and to try some different ventures around our business to create other opportunities for people to move up.”

Noble says he thinks this approach is somewhat unique to his company, but he understands other dairies are worried about being able to compensate its talent as well.

“We need to change and grow our business model to make it attractive to another generation of leadership,” he says.

“We make decisions in many cases that require a payback that spans the generations,” he adds, giving examples of land purchases, specialized facilities and new technologies that will impact future generations.

He says many dairy farms are do-ing many innovative things, much of it revolving around scale, but also diversification of business and getting involved in cropping and other ancillary businesses that support dairy.

Noble says it’s important to invest for the long term but be prepared for the short term.

“We don’t know — we can look at CME (Chicago Mercantile Exchange), the price of cheese, the forecast for next September — but we just don’t know,” he says. “When we make investments, in many cases they’re investments that transcend the generation. You have to try to control the control-lable as much as you can.” CMN

OUTLOOKContinued from page 1

Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com Reprinted with permission from the Feb. 24, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com


NEWS/BUSINESS

For more information please visit www.filtrationeng.com

WASHINGTON — FDA has issued an interim final rule amending its regula-tions on record-keeping by food firms to be consistent with FDA’s access to records. FDA’s authority for access to records was expanded by the FDA Food Safety Modernization Act (FSMA) on Jan. 4, 2011.

The new interim final rule makes the reference to records access in the food-firm record-keeping require-ments under FSMA consistent with the current statutory language in the Federal Food, Drug and Cosmetic Act. FDA’s records access and the record-keeping requirements were first estab-lished by the Public Health Security

FDA issues interim final rule amending regulations on record-keeping by food companiesand Bioterrorism Preparedness and Response Act of 2002.

The interim final rule also allows FDA access to records beyond those relating to specific suspect food ar-ticles if the agency reasonably believes that the other products are likely to be affected in a similar manner.

This new interim final rule is FDA’s latest step in implementing FSMA. The expanded records-access authority is expected to improve FDA’s ability to respond to and contain safety problems with the human and animal food supply, the agency says.

A new draft guidance, “Draft Guid-ance for Industry: FDA Records Access

Authority under Sections 414 and 704 of the Federal Food, Drug, & Cosmetic Act,” has been published to provide more detailed information pertaining to the updated record-availability re-quirement. The new draft guidance is a revision of FDA’s November 2005 guid-ance entitled “Guidance for Industry and FDA Staff Guidance for Records Access Authority Provided in Title III, Subtitle A, of the Public Health Security and Bioterrorism Prepared-ness and Response Act of 2002; Final Guidance.”

FDA also published an update to its Guidance for Industry: Questions and Answers Regarding Establishment and

Maintenance of Records (Edition 4), to ensure the guidance is consistent with the new FSMA requirements. The new publication is Guidance for Industry: Questions and Answers Regarding Establishment and Maintenance of Records By Persons Who Manufacture, Process, Pack, Transport, Distribute, Receive, Hold, or Import Food (Edi-tion 5).

The new interim final rule is ef-fective March 1, 2012. Public com-ments on the interim final rule may be submitted electronically to the docket at http://www.regulations.gov. In addition, public comments to the guidance mentioned above may also be submitted electronically at http://www.regulations.gov.

Comments also may be submitted by mail to Division of Dockets Management (HFA-305), FDA, 5630 Fishers Lane, Room 1061, Rockville, MD 20852. CMN

By Alyssa Sowerwine

NEW BRITAIN, Conn. — Kansas City, Mo.-based Dairy Farmers of America (DFA) has acquired Guida’s Milk, a dairy company based here, for an un-disclosed price.

“We are pleased to announce that Guida’s Milk has become a wholly-owned subsidiary of Dairy Farmers of America,” says Kristi Dale, media rela-tions manager, DFA.

Dale notes that Guida’s Milk’s long-standing relationships with customers and comprehensive portfolio of innova-tive, quality dairy products make it a natural fit with DFA’s commercial dairy businesses and brands portfolio.

“Since 1998, DFA has operated as a milk marketing cooperative and dairy foods processor focused on maximizing returns to its dairy farmer owners,” she says. “The acquisition of Guida’s Milk aligns with this mission.”

Jim Guida, executive vice president, Guida’s Milk, says the company will maintain its current employees and leadership structure.

Guida says that DFA was the best choice for purchase of the company because the cooperative satisfied stakeholders without altering the way the company is. He notes that Guida’s Milk was financially sound before the acquisition, which was part of what attracted DFA in addition to giving the cooperative an operation in the Northeast.

“I feel good about it. I foresee a long relationship together,” he says. “It’s a new chapter for the company.”

Guida’s Milk produces milk, cream, ice cream mixes, fruit juice drinks, water and other dairy products. CMN

Dairy Farmers of America acquires Guida’s Milk in Connecticut

Documents

Progress in trade negotiations could help U.S. dairy industry