Digest Highlights St. Johns, Michigan, selected for cheese and whey production facility California’s share of dairy exports should influence aid distribution Labels, labels, labels September California Class 1 prices improve July global dairy price index weakens USDA releases three-year Chesapeake Bay watershed action plan
St. Johns, Michigan, selected for cheese and whey production facility
Glanbia Nutritionals, Dairy Farmers of America (DFA) and Select Milk Producers Inc. have named St. Johns, Michigan, as the preferred location for a new joint venture: a large-scale cheese and whey production facility.
The facility will process 8 million pounds of milk per day into cheese and whey products for U.S. and international markets. According to a press release from Michigan Economic Development Corporation, the three companies have formed Spartan Michigan LLC. Glanbia will oversee commercial, technical and business operations. DFA and Select members will supply milk to the processing plant. While not an investor in the new plant, Michigan Milk Producers Association is also expected to supply milk to the plant.
In addition, the partners confirmed an agreement with Proliant Dairy Ingredients to process the whey permeate for both human and animal consumption.
Construction for both facilities – with a total investment approaching $550 million – is expected to begin in September and be completed by December 2020.
The project is supported by an estimated $27.6 million in grants and tax abatements from the Michigan Strategic Fund, the Michigan Department of Agriculture and Rural Development, and the Michigan Department of Transportation.
WUD: California’s share of dairy exports should influence aid distribution
As USDA wrestles with how to distribute aid to agricultural producers financially harmed by the ongoing tariff wars, the head of the Western United Dairymen (WUD) wants to make sure California dairy farmers are adequately compensated. In a letter to U.S. Ag Secretary Sonny Perdue, WUD Chief Executive Officer Anja Raudabaugh said California’s dairy producers should be reimbursed in proportion to the state’s percentage of the dairy export market.
Citing latest available export data, Raudabaugh said California dairy farmers produce about 18 percent of the milk in the country, but are responsible for 32 percent of annual U.S. dairy exports. She urged USDA to make aid payments on a per-hundredweight-of-milk-production basis, and not include volume limits.
“California dairy producers will continue to experience an outsized impact from these tariffs because of the aggressive efforts taken over the past two decades to develop export markets for our products,” Raudabaugh wrote. “As such, because California represents high percentages of both milk production and dairy exports, it should receive a commensurate share of the funds available to help mitigate the negative impact of the tariffs.”
Jim Boyle, president of the Western States Dairy Producers Association (WSDPA), submitted a similar letter to Perdue. He said WSDPA members were on the front lines in the ongoing trade war, marketing a disproportionate percentage of their milk and dairy products to foreign buyers engaged in the trade disputes.
Citing economic analysis using milk futures prices, Boyle recommended a $1-per-hundredweight (cwt) direct payment to dairy farmers for milk produced from June 2018-November 2018, without production caps. Based on actual milk production for June 2018 and estimates for production going forward, the cost of those payments was estimated at about $1 billion.
Labels, labels, labels
The U.S. Food and Drug Administration’s move toward enforcing the standard of identity for “milk” isn’t the only focus on dairy labels. While dairy farmers work on producing what goes inside the dairy foods’ packages, here’s what’s drawing attention on the outside:
• Nestle USA seal target of legal complaint. Attorneys are seeking a class-action lawsuit against Nestle, alleging the company’s marketing and packaging misleads consumers seeking foods produced without genetically modified (non-GMO) sources. The complaint (Latiff v. Nestle, Case No. 2:18-cv-6503), alleges Nestle created packaging with a “No GMO Ingredients” seal that mimics a label from the Non-GMO Project. The Non-GMO Project serves as a third-party auditor, certifying whether foods are made from GMO crops or sourced from animals consuming GMO feeds. The complaint, filed in late July in the U.S. District Court in the Central District of California/Western Division, demands a jury trial.
• Cornucopia updates organic dairy scorecard. Charging that the USDA’s failure to adequately regulate the organic dairy market is driving small family farms out of business, The Cornucopia Institute updated its Organic Dairy Brand Scorecard. The scorecard rates approximately 160 brands in terms of their dairy procurement practices. The products, both name brand and private-label (store brand) options, are rated on the basis of a questionnaire, site visits, aerial photography and satellite images, and data mining of state and federal regulatory records. It is mobile-friendly, allowing users to view Cornucopia’s ratings while shopping.
• Spore formers: Milk carton "sell by" dates may become more precise. The “sell by” and “best by” dates on milk cartons may soon become more meaningful and accurate. Cornell University food scientists have created a new predictive model that examines spore-forming bacteria and when they emerge.
“Putting dates on milk cartons is a big issue because consumers often discard the milk if it is past the sell by date,” said Martin Wiedmann, food safety professor and a senior author of research published in the Journal of Dairy Science.
Ariel Buehler, Ph.D., the paper’s lead author, said the spore-forming bacteria are found throughout the dairy chain, including in soil, silage, feed, bedding material, milking equipment and in raw and pasteurized milk. Additionally, the bacteria can survive harsh heat (pasteurization), desiccation (dryness) and sanitizers. When they have the opportunity to grow in pasteurized milk, they can cause off flavors and curdling.
Reducing the spoilage from spore-forming bacteria could extend the shelf life for milk from two weeks to perhaps a month, said Nicole Martin, research support specialist at Cornell’s New York State Milk Quality Improvement Program laboratory.
September California Class 1 prices improve
The California Department of Food and Agriculture (CDFA) announced the September Class 1 price at $16.87 per cwt for the north and $17.14 for the south. Both are 73 cents more than August 2018 but $1.78 less than September 2017. Through the first nine months of 2018, the north average is $16.21 per cwt; the south average is $16.48 per cwt. They are about $1.72 per cwt less than the same period in 2017.
July global dairy price index weakens
Declining dairy product prices pushed the global index of food prices lower in July 2018, according to the latest U.N. Food and Agriculture Organization (FAO) Food Price Index.
The FAO Dairy Price Index includes global average prices for butter, cheese, skim milk (SMP) and whole milk powders (WMP). The July 2018 index declined 6.6 percent from June and was 8 percent lower than the same month a year earlier. July prices for all dairy products declined, with sharpest falls registered for butter and cheese. Global dairy markets have remained under downward pressure, supported by ample export supplies, including good production prospects in New Zealand.
The FAO Food Price Index is a measure of the monthly change in international prices of a basket of five food commodities – cereal, vegetable oil, dairy, meat and sugar. The 3.7 percent decline in the overall index was the sharpest decline since December 2017.
USDA releases three-year Chesapeake Bay watershed action plan
The USDA’s Natural Resources Conservation Service (NRCS) released a Chesapeake Bay watershed action plan.
The plan covers a three-year period (fiscal years 2018-20), leaving openings for any additional provisions included in the 2018 Farm Bill. Priorities include improving water quality, soil health, and fish and wildlife habitat, while also targeting conservation training, technological advancements and public engagement. Conservation practices will be applied to improve water quality on 920,000 acres. In addition, NRCS aims to improve soil health for 700,000 acres and improve wildlife habitat on 120,000 acres.
The watershed is about 64,000 square miles, covering portions of six states (Delaware, Maryland, New York, Pennsylvania, Virginia and West Virginia) and the District of Columbia. Agricultural land comprises nearly 30 percent of the watershed, and the region has more than 83,000 farms responsible for more than $10 billion of agricultural production each year.
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