Digest Highlights

USDA releases dairy product processing cost report; webinar planned

The USDA has released a report on a study updating dairy product processing costs, one issue cited as discussions over potential Federal Milk Marketing Order (FMMO) reform increase. The study, conducted by Mark Stephenson, director of dairy policy analysis at the University of Wisconsin – Madison, is summarized in the report, “Cost of Processing Study for Cheese, Whey, Butter and Nonfat Dry Milk Plants.“

Natzke dave
Dave Natzke
Editor / Progressive Dairy

The study gathered data from dairy processing plants located throughout the country to estimate the average costs of manufacturing a pound of four dairy commodity products (cheddar cheese, butter, dry whey and nonfat dry milk) that are used in FMMO price formulas. The formulas establish manufacturing or “make” allowances, processing credits designed to reflect the average processing costs associated with producing those products.

Combined with yield factors, make allowances are used in calculating minimum milk prices to dairy farmers in FMMO end-product pricing formulas. Yield factors and make allowances are fixed and can only be changed through an FMMO rule-making proceeding,

Stephenson will review the study’s methodology and results during a webinar hosted by USDA’s Agricultural Marketing Service on Feb. 23, 2022, at 11 a.m. (Eastern time).

A link to the webinar is being created and will be posted on the AMS website by Feb. 22, 2022, 5 p.m. Eastern time. Attendees will be able to submit questions during the webinar. The webinar will be recorded, and a video and transcript of the webinar will be posted after the webinar concludes.

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Previous cost studies are also available on the Program on Dairy Markets and Policy website.

National Dairy Promotion and Research Board appointees named

The USDA has appointed 12 members to the National Dairy Promotion and Research Board (NDB). The appointees will serve three-year terms, effective immediately, through Oct. 31, 2024.

Newly appointed members are: Eugene Kazemier, Oregon; Christina Medeiros and Aaron Wickstrom, California; Suzanne Vold, Minnesota; Sara Bahgat-Eggert, Wisconsin; Kallan Rex, Idaho; and Caleb Crothers, Maryland.

Reappointed members are: David Jackson, Texas; Randy Roecker, Wisconsin; Douglas Carroll, Iowa; Cynthia Adam, Indiana; and Patricia Bikowsky, New York.

The board, composed of 36 dairy farmer members who represent 12 geographic regions within the U.S. and one importer member, develops and administers program funded through the national dairy checkoff.

U.S. dairy organizations hopeful over FDA confirmation

Regional and national dairy organization leaders are hopeful the confirmation of Robert Califf as commissioner of the U.S. Food and Drug Administration (FDA) brings action on mislabeling of plant-based products as “dairy.” Califf was confirmed to the post on Feb. 15.

Responding to questions during his nomination hearing last December, Califf said he was committed to making dairy labeling a priority if he was confirmed.

Brody Stapel, president of Edge, said a national survey co-commissioned by the Midwest dairy cooperative documented consumer confusion over ingredients, protein, fat and caloric contents of plant-based products versus dairy.

“The FDA has strict standards of identity for dairy products, but the agency continues to refuse to enforce the rules. This should have been cleared up a long time ago,” Stapel said. “There is room for a variety of products, and customers should have choices. But the plant-based beverage industry is quick to dismiss the fact that misleading labels confuse customers. That’s unfair.”

“Nutritional confusion over the products is real, with meaningful public health implications, and the Biden administration has promised guidance by midyear. We look forward to working with Dr. Califf as he resolves this long-standing, and growing, concern,” said Jim Mulhern president and CEO of the National Milk Producers Federation (NMPF).

GDT price index up again

The fourth Global Dairy Trade (GDT) auction of 2022, held Feb. 15, saw dairy prices move higher again, with the overall index up 4.2%. By category, dairy product prices were:

  • Skim milk powder was up 6% to $4,295 per metric ton (MT, or about 2,205 pounds).
  • Whole milk powder was up 4.2% to $4,503 per MT.
  • Butter was up 5.1% to $6,686 per MT.
  • Cheddar cheese was up 3.5% to $5,881 per MT.
  • Anhydrous milkfat was up 1.2% to $6,889 per MT.

The GDT platform offers dairy products from six global companies: Fonterra (New Zealand), Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland). The next GDT auction is March 1.

GDT also published its annual report, highlighting summaries of dairy product auctions throughout 2021.

FARM Animal Care Program survey results released

The FARM Program shared results of its animal care version 5 development survey. The report summarizes stakeholder perspectives on animal care issues that may be used to modify dairy animal care standards starting in 2024.

The FARM Animal Care program is updated once every three years to ensure relevance to current industry best management practices and scientific research related to on-farm animal care, according to Emily Yeiser Stepp, vice president of the FARM Program. Additional information on the program and process are available here.

The survey received 682 responses from farmers, veterinarians and dairy industry leaders nationwide. Stakeholders identified care for sick animals, calves and non-ambulatory cattle as dairy’s greatest priority to maintain focus on for version 5. The survey also showed general support for making minor modifications and adding clarity to the program while avoiding large overhauls. Respondents also were in consensus that standards that aren’t direct measures of good animal welfare practices should be updated to prioritize an outcomes-based approach.

The NMPF board of directors provide final approval on FARM standards, which will come into effect starting July 1, 2024.

Saputo announces U.S. investment plan

Saputo will invest $169 million ($ Canadian) to modernize and expand U.S. cheese manufacturing facilities in Wisconsin and California, the company announced Feb. 8. The plan, however, also includes consolidation of its cut-and-wrap activities on the West Coast and will result in the closure of a Bardsley Street, Tulare, California, facility in fiscal 2023.

These modernization and expansion initiatives began in the fourth quarter of the company’s fiscal 2022, which ends March 31, 2022, and are expected to take approximately 24 months to implement. Saputo did not respond to an email request from Progressive Dairy related to specific locations where modernization and expansion plans will be implemented.

Internationally, Saputo is also streamlining operations in two of its manufacturing facilities in Australia.

Saputo is one of the top 10 dairy processors in the world, a leading cheese manufacturer and fluid milk and cream processor in Canada, the top dairy processor in Australia and the second largest in Argentina. In the U.S., Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products.

‘Protecting Your Profits’ webinar is Feb. 23

Zach Myers, risk education manager with Pennsylvania Center for Dairy Excellence (CDE), will host a monthly “Protecting Your Profits” webinar on Feb. 23, 12-1 p.m. (Eastern time). This month’s call will take a deeper dive into export and domestic demand, highlight Class III and IV futures milk price forecasts and share updates on Dairy Margin Coverage (DMC) margins. The DMC and Supplemental DMC 2022 enrollment period remains open until March 25.

Myers will also provide additional updates on the Dairy Revenue Protection (Dairy-RP) program. Dairy-RP policies are available for the second quarter of 2022 through the second quarter of 2023 until March 15.

Advance registration is not necessary. The webinar is available via podcast or phone. To participate, click here or phone: (646) 558-8656. When prompted, enter meeting ID 848 3416 1708 and passcode 474057.  end mark