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meeting also will allow attendees an make a presentation may be given an Supplement Labels,’’ Journal of Consumer opportunity to provide comments to opportunity to speak if time permits. Affairs, Volume 39, No. 1, Copyright 2005 by FDA about the implications of the Persons preregistered or wishing to the American Council on Consumer Interests, available research for further consumer register onsite should check in between 2005. studies that may be needed or that are 7:30 and 8:30 a.m. Because the meeting 3. Qualified Health Claims Consumer Research Project Executive Summary, already underway by other parties to will be held in a Federal building, International Food Information Council assess consumer understanding of meeting participants must present photo Foundation (http://www.ific.org/research/ health claims and the effect of health identification and plan adequate time to qualhealthclaimsres.cfm), March 2005. claims on consumer perceptions and pass through the security system. Dated: October 14, 2005. behaviors. FDA is also interested in IV. Comments hearing from commenters their views Jeffrey Shuren, regarding schemes or signals, other than In addition to attending or presenting Assistant Commissioner for Policy. oral comments at the meeting, interested those already studied, that may, [FR Doc. 05–20969 Filed 10–17–05; 10:49 consistent with the first amendment, persons may submit to the Division of am] Dockets Management (see ADDRESSES) effectively communicate to consumers BILLING CODE 4160–01–S the level of scientific support for health written or electronic comments related claims, without leading consumers to to the focus of this public meeting. All make erroneous inferences about the relevant data and information should be DEPARTMENT OF HEALTH AND claimed substance-disease relationship submitted with the written comments. HUMAN SERVICES and/or other product characteristics. Submit a single copy of electronic FDA anticipates that this meeting will comments or two paper copies of any Food and Drug Administration also include comments from attendees mailed comments, except that about alternative research methods to individuals may submit one paper copy. 21 CFR Part 133 empirically assess consumer Comments are to be identified with the understanding of health claims and the docket number found in brackets in the [Docket No. 2000P–0586 (formerly Docket effect of health claims on consumer heading of this document. Received No. 00P–0586)] perceptions and behaviors. FDA intends comments may be seen in the Division Cheeses and Related Cheese to consider all pertinent information of Dockets Management between 9 a.m. Products; Proposal to Permit the Use from this public meeting in any and 4 p.m., Monday through Friday. of Ultrafiltered Milk rulemaking related to alternatives for V. Meeting Transcript regulating qualified health claims in the AGENCY: Food and Drug Administration, labeling of conventional human foods A transcript will be made of the meeting’s proceedings. You may request HHS. and dietary supplements (see 68 FR ACTION: Proposed rule. 66040, November 25, 2003). a copy in writing from FDA’s Freedom of Information Office (HFI–35), Food SUMMARY: The Food and Drug III. Registration and Drug Administration, 5600 Fishers Administration (FDA) is proposing to Lane, rm. 12A–16, Rockville, MD 20857, Please submit your registration amend its regulations to provide for the approximately 30 working days after the information (including name, title, firm use of fluid ultrafiltered milk (UF) in the public meeting at a cost of 10 cents per name (if applicable), address, telephone, manufacture of standardized cheeses page. The transcript of public meeting FAX (if available), by November 10, and related cheese products. This action and all comments submitted will be 2005. We encourage you to register responds principally to two citizen available for public examination at the online at http://www.cfsan.fda.gov/ petitions: One submitted by the ~ Division of Dockets Management (see comm/register.html or by FAX to American Dairy Products Institute ADDRESSES) between 9 a.m. and 4 p.m., Marion V. Allen at 301–436–2605. (ADPI) and another submitted jointly by Monday through Friday, as well as on Space is limited and registration will be the National Cheese Institute (NCI), the the FDA Web site at http://www.fda.gov/ closed when maximum seating capacity Grocery Manufacturers of America, Inc. ohrms/dockets/default.htm. is reached. Please also specify whether (GMA), and the National Food you need onsite parking when you VI. References Processors Association (NFPA). FDA register. We also will accept The following references have been tentatively concludes that this action registrations onsite, if space is available. will promote honesty and fair dealing in If you need special accommodations placed on display in the Division of the interest of consumers and, to the due to a disability, please contact Dockets Management (see ADDRESSESS) extent practicable, will achieve Marion V. Allen (see FOR FURTHER and may be viewed between 9 a.m. and consistency with existing international INFORMATION CONTACT) no later than 4 p.m., Monday through Friday. (FDA standards of identity for cheeses and November 10, 2005. has verified the Web site address, but If you wish to make a presentation, we are not responsible for subsequent related cheese products. indicate your request when registering changes to the Web site after this DATES: Submit comments by January 17, and submit the following information by document publishes in the Federal 2006. November 10, 2005: (1) A brief written Register.) ADDRESSES: You may submit comments, statement about the general nature of 1. Derby, B.M. and A.S. Levy, ‘‘Working identified by Docket No. 2000P–0586, the views you wish to present and (2) Paper: Effects of Strength of Science by any of the following methods: the names of any copresenters who must Disclaimers on the Communication Impact of Electronic Submissions also register to attend. The amount of Health Claims,’’ Working Paper No. 1, FDA, Submit electronic comments in the time allowed for each oral presentation Center for Food Safety and Applied Nutrition following ways: at the public meeting will be limited (http://www.fda.gov/OHRMS/dockets/ • Federal eRulemaking Portal: http:// dockets/03N0496/03N–0496–rpt0001.pdf), (e.g., 5 minutes each), and will depend September 2005. www.regulations.gov. Follow the in part upon the number of persons who 2. France, K.R. and P.F. Bone, ‘‘Policy instructions for submitting comments. request to speak. Individuals and Maker’s Paradigms and Evidence from • Agency Web site: http:// organizations that do not preregister to Consumer Interpretations of Dietary www.fda.gov/dockets/ecomments.

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Follow the instructions for submitting B. Options Considered reverse osmosis (RO) filtration, the comments on the agency Web site. C. Proposed Amendments membrane pore size is such that all Written Submissions III. Executive Order 12866: Cost Benefit components other than water in the Submit written submissions in the Analysis milk are retained. Nanofiltration uses following ways: A. Need for Regulation membranes with pores that are larger • FAX: 301–827–6870. B. Background and Current Industry than RO membranes, but smaller than • Mail/Hand delivery/Courier [For Practices those used in ultrafiltration. In milk paper, disk, or CD-ROM submissions]: C. Regulatory Options processing, nanofiltration can be used to Division of Dockets Management (HFA– D. Summary of Costs and Benefits remove water as well as some soluble 305), Food and Drug Administration, IV. Small Entity Analysis salts, yet retain all other components of 5630 Fishers Lane, rm. 1061, Rockville, V. Unfunded Mandates milk (Refs. 1 and 2). Ultrafiltration MD 20852. VI. Small Business Regulatory retains macromolecules and particles To ensure more timely processing of Enforcement Fairness Act of 1996 larger than about 0.001–0.02 comments, FDA is no longer accepting (SBREFA) Major Rule micrometers, while microfiltration is comments submitted to the agency by e- VII. Federalism designed to retain particles between mail. FDA encourages you to continue VIII. Environmental Impact about 0.10 micrometers to 5 IX. Paperwork Reduction Act of 1995 to submit electronic comments by using micrometers (Ref. 1). While there is X. Comments some overlap in membrane pore sizes the Federal eRulemaking Portal or the XI. References agency Web site, as described in the and operating pressures used in Electronic Submissions portion of this I. Background ultrafiltration and microfiltration (Refs. paragraph. The standards of identity for cheeses 1 and 3), in dairy processing, ultrafiltration is typically used to retain Instructions: All submissions received and related cheese products are all protein components of milk, must include the agency name and specified in part 133 (21 CFR 133). The including casein and whey proteins, Docket Nos. or Regulatory Information general provisions within part 133, in while some of the lactose, minerals, and Number (RIN) for this rulemaking. All part, define ‘‘milk’’ and ‘‘nonfat milk’’ water soluble vitamins present in milk comments received may be posted that may be used in the manufacture of are lost along with water. without change to http://www.fda.gov/ cheeses and related cheese products. Microfiltration, on the other hand, is ohrms/dockets/default.htm, including The definitions for ‘‘milk’’ and ‘‘nonfat primarily used for fat separation, any personal information provided. For milk’’ in § 133.3(a) and (b), respectively, bacterial removal, and casein detailed instructions on submitting list different forms of milk and nonfat comments and additional information concentration, with a resulting loss of milk, including concentrated, whey proteins, lactose, minerals, and on the rulemaking process, see the reconstituted, and dried forms, that may ‘‘Comments’’ heading of the water soluble vitamins along with water be used in the making of cheeses and (Refs. 1, 2, and 3). SUPPLEMENTARY INFORMATION section of related cheese products. However, fluid this document. or dried filtered forms of milk obtained A. Petitions and Grounds Docket: For access to the docket to through mechanical filtration of milk or FDA received two petitions requesting read background documents or nonfat milk are not included within amendments to existing regulations to comments received, go to http:// these definitions. Therefore, while permit the use of filtered milk in the www.fda.gov/ohrms/dockets/ current regulations permit the use of manufacture of standardized cheeses default.htm and insert the docket concentrated, reconstituted, and dried and related cheese products. number(s), found in brackets in the forms of milk and nonfat milk as basic heading of this document, into the dairy ingredients, they do not provide 1. The 1999 ADPI Petition ‘‘Search’’ box and follow the prompts for the use of fluid or dried filtered milk The ADPI filed a citizen petition (CP) and/or go to the Division of Dockets or fluid or dried filtered nonfat milk as on December 2, 1999 (Docket No. Management, 5630 Fishers Lane, rm. basic dairy ingredients in standardized 1999P–5198 (formerly Docket No. 99P– 1061, Rockville, MD 20852. cheeses and related cheese products. 5198); hereafter referred to as the ADPI FOR FURTHER INFORMATION CONTACT: Ritu Mechanical filtration technologies petition) requesting that the FDA amend Nalubola, Center for Food Safety and available for milk processing include the definition of ‘‘milk,’’ as provided in Applied Nutrition (HFS–820), Food and microfiltration, ultrafiltration, § 133.3(a), to include fluid UF milk, Drug Administration, 5100 Paint Branch nanofiltration, and reverse osmosis thereby permitting the use of fluid UF Pkwy., College Park, MD 20740, 301– (Refs. 1 and 2). In all of these filtration milk in the manufacture of standardized 436–2371. methods, milk is passed over a series of cheeses and related cheese products SUPPLEMENTARY INFORMATION: semipermeable membranes with varying specified in part 133. ADPI requested pore sizes. The portion of milk that that § 133.3(a) be amended to add that Table of Contents passes through the membranes is ‘‘milk may be subjected to an I. Background referred to as the ‘‘permeate,’’ and the ultrafiltration process that results in a A. Petitions and Grounds portion that does not pass through the fluid UF milk for use in the manufacture 1. The 1999 ADPI Petition membranes is referred to as the of cheese.’’ In its petition, ADPI stated 2. The 2000 NCI/GMA/NFPA Joint ‘‘retentate.’’ While the application of that the requested amendment would Petition hydraulic pressure is the driving force improve efficiencies in cheese B. The Government Accountability for these membrane separation manufacturing and result in benefits to Office (GAO) Report processes, the nature of the membrane consumers without alteration of cheese C. Comments to Petitions itself (as well as the orientation of the composition, characteristics, or flavor. D. Forms of Milk Permitted as Basic components) controls which FDA reviewed the ADPI petition and Dairy Ingredients components of milk are separated into determined that it did not present E. Temporary Marketing Permit (TMP) the permeate and which components are reasonable grounds in accordance with II. The Proposal retained in the retentate during these 21 CFR 10.30 to support the requested A. Legal Authority/Statutory Directive filtration processes (Refs. 1 and 2). In a amendment and, therefore, FDA closed

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this petition. However, because the cheese in § 133.113). The petitioners minerals, and some water soluble issues raised in the ADPI petition are maintained that these ‘‘alternate make vitamins) that otherwise would be clearly covered under a second citizen procedure’’ provisions historically have removed in the traditional cheese- petition (Docket No. 2000P–0586 provided the legal basis for the use of making process as whey. In fact, the (formerly Docket No. 00P–0586)/CP2, milk filtration and the resulting filtered petitioners argued, with respect to discussed in section I.A.2 of this milk in cheese making, regardless of filtered milk in cheese, the retentate document), FDA converted the ADPI whether the filtration occurs in the same may actually contain slightly greater petition into a comment to this second plant as other cheese-making concentrations of valuable constituents petition. ADPI was informed of FDA’s procedures or in a centralized filtration (e.g., whey proteins) than the cheese action in a letter dated February 26, facility. The petitioners believe that curd that remains after loss of whey in 2003. FDA has previously acknowledged that traditional cheese making. The the use of filtered milk to manufacture petitioners provided analytical data 2. The 2000 NCI/GMA/NFPA Joint cheddar cheese is covered by the related to cheddar cheese to support Petition alternate make procedure provision of their assertion that cheese made with On June 13, 2000, FDA received a the standard of identity for cheddar filtered milk is not ‘‘nutritionally joint petition (Docket No. 2000P–0586 cheese. Furthermore, the petitioners inferior,’’ as that term is defined in 21 (formerly Docket No. 00P–0586)/CP2; maintained that the requested CFR 101.3(e)(4), to cheese made using hereafter referred to as the NCI petition) amendments are fully consistent with traditional procedures. from the NCI, the GMA, and the NFPA the basis and rationale for amendments Finally, the petitioners argued that requesting an amendment of § 133.3 to that FDA previously made to expand the their proposed amendments are include ‘‘filtered milk’’ in the definition scope of the forms of milk recognized as consistent with the Codex Alimentarius of ‘‘milk’’ and ‘‘filtered skim milk’’ in ‘‘milk’’ for cheese making. The Commission (Codex) standard for the definition of ‘‘nonfat milk’’ for use petitioners stated that FDA authorized cheese. The Codex standard for cheese in standardized cheeses and related the use of certain forms of milk because (Standard A–6–1978, revised in January cheese products. The NCI petition also these forms of milk may be used in 1999) provides for the use of ‘‘milk and/ requested that a new subsection be place of fluid milk to produce a finished or products obtained from milk.’’ The added within § 133.3 to define ‘‘filtered cheese that is equivalent physically and petitioners stated that the Codex milk’’ as: chemically to the traditional cheese standard encompasses mechanical * * * the liquid milk product produced made using fluid milk. filtration technology, provided the by a physical separation technique in which In addition, the petitioners stated that finished cheese meets applicable raw or pasteurized milk is passed over one mechanical filtration has been used in requirements for physical and chemical or more semipermeable membranes to cheese manufacturing in the United properties, which would include partially remove the water phase and its States for the past 20 years, and nutritional and organoleptic properties. constituents, including water, lactose, whey contended that the extensive use of proteins, and minerals. Either before or after B. The Government Accountability filtration technologies, under the filtration, fat may be separated to produce Office (GAO)1 Report filtered skim milk. After filtration, water may existing ‘‘alternate make procedure’’ be partially removed by means of evaporation provisions within some standards of The fiscal year (FY) 2000 FDA to produce more concentrated forms of identity for cheeses, has produced appropriations bill from the U.S. Senate filtered milk.’’ significant benefits by improving requested the Comptroller General to Based on this definition, FDA believes product consistency and yields and conduct a study to determine the that the petitioners requested the agency manufacturing efficiency; lowering milk quantity and end use of UF milk to permit not only ultrafiltration (which refrigeration, hauling and whey disposal imported into the United States and to typically does not result in a loss of costs; expanding milk sourcing options; submit a report describing the results of whey proteins), but also other filtration and enabling cheese makers to respond the study to Congress. In March 2001, techniques such as microfiltration and more effectively to regional disruptions GAO reported (hereafter referred to as subsequent treatment to further in the fluid milk supply. The petitioners ‘‘the GAO report’’ (Ref. 4)), in part, that: concentrate the filtered product, in the also stated that because mechanical There are no specific data on UF milk manufacture of standardized cheeses filtration removes only those imports because UF milk is classified and related cheese products. The constituents that are removed by loss of under the broad category of ‘‘milk petitioners withdrew a previous joint whey in traditional cheese making, it protein concentrates’’ (MPC) by the U.S. petition (Docket No. 2000P–0586 functions simply to rearrange the steps Customs Service. GAO reported that (formerly Docket No. 00P–0586)/CP1) in the cheese making process to permit imports in the broad category of MPC that requested amendments to permit the constituents to be removed earlier. rose dramatically between 1990 and both fluid and dried forms of filtered The petitioners further contended that 1999 from about 800 to 45,000 metric milk in the manufacture of standardized the long history and widespread use of tons, the primary reasons being the cheeses and related cheese products. filtration technology under the alternate difference between U.S. and In support of their requested make procedure provisions have clearly international prices of milk protein, amendments, the NCI, GMA, and NFPA established the equivalence of cheese especially nonfat dry milk (NFDM), and (hereafter referred to as the petitioners) made from filtered milk and cheese the market growth of nutritional argued that the amendments requested made from other forms of milk supplements and other novel foods in the NCI petition are consistent with explicitly permitted under § 133.3. using MPC. GAO also reported that dry established FDA policy. Some cheese The petitioners also argued that MPC imports are used in several foods standards, in addition to specifying a cheese made with filtered milk is other than cheeses, such as frozen specific procedure for preparing the nutritionally equivalent to traditional desserts, bakery products, and sports food, currently provide for the use of cheese because mechanical filtration of and other nutritional supplement ‘‘any other procedure which produces a milk using membranes with pore sizes products. Some in the industry note that finished cheese having the same between 0.0001 and 0.20 microns physical and chemical properties’’ (see removes the water phase constituents 1 The GAO changed its name from the ‘‘General e.g., standard of identity for cheddar (water, soluble protein, lactose, Accounting Office’’ in 2004.

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economic disincentives have prevented addition, they stated that changing the cheese manufacture at that time. domestic production of dry MPC. GAO definition of milk could result in Filtered forms, however, are not noted that there are limited data on increased imports of filtered milk from included within ‘‘milk’’ or ‘‘nonfat domestic production and use of fluid Canada, displacing U.S. milk and milk’’ permitted in standardized cheeses UF milk in cheese making but found causing a surplus. However, these and related cheese products. that 22 dairy plants produce fluid UF comments did not provide any factual In the NCI petition, the petitioners milk used to make cheese within the data or information that would lead argued that the alternate make plant, while 4 dairy farms in New FDA to believe that the use of fluid UF procedure that is provided for in some Mexico and Texas produce fluid UF milk would impact the safety or quality cheese standards historically has milk for transport to cheese plants in the of the product. provided the legal basis for the use of Midwest. GAO also found that FDA and Another comment, from an milk filtration and the resulting filtered State contract inspectors reported no organization representing milk milk as an ingredient in cheese making. violations related to the use of imported producers, unconditionally endorsed FDA does not agree with the petitioners. UF milk or MPC in standardized cheese the ADPI petition, but strongly opposed The alternate make procedure provision in FY 1999, whereas in FY 2000, two the NCI petition, stating that the provides for the use of ‘‘any other plants in Vermont were issued warning commenter does not support any change procedure which produces a finished letters for using imported MPC in to § 133.3(a) that alters which products cheese having the same physical and standardized cheese, and the plants are currently defined as ‘‘milk.’’ This chemical properties’’ as the procedure subsequently discontinued this use. comment stated that the language in the specified in the standard. For example, NCI petition is sufficiently vague that it the procedure for making blue cheese C. Comments to Petitions may be subject to interpretation such described in § 133.106(a)(2) requires FDA received a total of 58 letters and that it subsequently would allow dried Penicillium roquefortii spores to be e-mails, each containing one or more forms of UF milk. The comment also added to the curd. In a final rulemaking comments, to the ADPI (subsequently stated that permitting only liquid forms in 1983, in response to a comment that converted to a comment to the NCI of UF milk has general widespread this requirement should be changed to petition) and the NCI petitions. A large support among different stakeholders, permit the addition of spores to dairy portion of the letters and e-mails and argued that it is essential to ingredients rather than only to the curd, received were from individual dairy establish a definition of ‘‘liquid’’ UF FDA noted that a change is not farmers, organizations representing milk to mitigate potential dairy farmers, and consumers. Nearly misinterpretations regarding the use of necessary because the procedure half of the comments opposed both the dried MPC and provide clarity for described in § 133.106(a)(2) may be ADPI and NCI petitions, while the other enforcement. In this regard, the modified as provided for in half opposed the NCI petition alone comment suggested that a limitation of § 133.106(a)(1), which states that any without commenting on the ADPI 45 percent total solids be included in other procedure may be used which petition. A few comments expressed the definition of ‘‘liquid ultrafiltered produces a finished cheese having the support for the ADPI petition, but none milk,’’ because a requirement of a same physical and chemical properties of the comments supported the NCI maximum of 45 percent total solids (48 FR 2736 at 2739). Rather than petition. The primary concern expressed would allow for the use of UF restricting the manufacturing procedure by the comments opposing either of the technology while preserving the liquid to the one specifically described in the petitions appeared to be the potential state of the ultrafiltered product and standard, this provision allows economic impact of the use of imported preventing subsequent treatment for manufacturers to use alternate milk ingredients, particularly dried concentration beyond ultrafiltration. manufacturing procedures, but not forms of filtered milk or MPC, on U.S. alternate ingredients, provided the dairy farmers. Some comments also D. Forms of Milk Permitted as Basic alternate manufacturing procedure does expressed concern about the use of Dairy Ingredients not adversely affect the physical and imported milk ingredients on the The definitions of ‘‘milk’’ and ‘‘nonfat chemical properties of the cheese. quality and safety of cheese. milk’’ in § 133.3 do not provide for the However, the alternate make procedure The organizations representing dairy use of filtered milk or filtered nonfat provision does not permit the use of farmers expressed strong opposition to milk as basic dairy ingredients in dairy or other ingredients that are not both petitions and stated that the use of standardized cheeses and related cheese specifically provided for in the cheese filtered milk would undoubtedly lower products. In 1983, with respect to the standard. Therefore, the alternate make the quality of cheese products and use of the forms of milk that are provision of current cheese standards greatly increase the flood of imports of permitted as basic ingredients in allows manufacturers to appropriately subsidized MPC and filtered milk with cheesemaking, FDA amended § 133.3 to process the basic ingredient milk during the potential to jeopardize the safety of define the class designations ‘‘milk,’’ the cheese-making process. For cheese products. They stated that the ‘‘nonfat milk,’’ and ‘‘cream’’ and example, the ingredient milk may filtration process removes calcium and provide for alternate forms of milk, undergo an additional step of reduces the lactose content of milk and nonfat milk, and cream, i.e., ultrafiltration prior to being introduced results in cheese that does not have the concentrated, dried, and reconstituted into the cheese vat in a single within- fullness of flavor of traditional cheese. forms to be used in standardized batch and within-plant production line They further maintained that changing cheeses and related cheese products (48 for cheese making. In such a process, the definition of milk to allow the use FR 2736, January 21, 1983). In the the ingredient that is introduced into of liquid filtered milk would ultimately proposed rule, FDA advised of its the cheese-making process is milk. result in the use of dry filtered MPC opinion that these alternate forms can However, fluid UF milk purchased or and, therefore, they reiterated that even be used to produce the same cheese as brought in from another plant, even if only liquid filtered milk were produced from fluid cow’s milk (43 FR within the same company, that is then allowed, while disallowing dry MPC, 42127 at 42128, September 19, 1978), introduced into cheese making is they would still be concerned about which was the only form of milk considered an alternate ingredient product quality degradation. In permitted as the basic ingredient for because the ultrafiltration process is

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used solely for the production of an definition within the industry, the term fluid UF skim milk was described as ingredient that is subsequently used in ‘‘MPC’’ is generally used to refer to ‘‘the product obtained by subjecting cheese making. Therefore, in this case, dried forms of filtered milk and dried skim milk to a physical separation the ingredient is fluid UF milk, not blends and coprecipitates of milk process called ultrafiltration using a milk. proteins (Ref. 9). The existing standards membrane with a pore size of 10,000 In the NCI petition, the petitioners of identity in part 133 do not list MPC Daltons (Da) molecular weight cut-off also stated that FDA has previously as a permitted optional ingredient in the (MWCO), resulting in the partial loss of acknowledged that the use of filtered manufacture of standardized cheeses or lactose, minerals, water-soluble milk to manufacture cheddar cheese is related cheese products. Ingredients that vitamins, and water present in skim covered by the alternate make procedure are not specifically provided for by the milk.’’ The TMP also specified that the provision of the cheddar cheese standard cannot be used in the casein-to-whey protein ratio of skim standard, including when filtration manufacture of a food named with the milk is not altered during the occurs in a separate centralized facility. standardized term. FDA reiterated this ultrafiltration process and that the FDA clarifies that it has previously not statement in 1983 when FDA amended moisture content of fluid UF skim milk objected to the use of fluid UF milk in the standards for nine natural cheeses to is about 80 percent. The TMP permitted cheddar cheese under specific bring them into closer conformance the addition of such fluid UF skim milk circumstances. In 1996, FDA granted with the recommended Codex standards to skim milk at a level needed to temporary permission to Bongards for those cheeses (48 FR 2736). FDA increase the total solids of the cheese Creamery in Minnesota to manufacture advised that dairy ingredients that may milk (or final milk used to make cheese) cheddar cheese using fluid UF milk that be used in manufacture of standardized by 5 to 25 percent, and required fluid is produced on a farm in New Mexico. cheeses are specifically listed in the UF skim milk to be declared in the That permission was granted on a individual standards, and that milk- ingredient statement of the finished limited basis in response to a request derived ingredients other than those cottage cheese as ‘‘ultrafiltered skim from the T.C. Jacoby & Company, Inc., specifically provided for may not be milk.’’ The purpose of the permit was to to run a testing program at Bongards used in these cheeses (48 FR 2736 at allow Wells’ Dairy to measure consumer Creamery during a pilot period to 2737). In addition, specific to the use of acceptance of the product, identify mass demonstrate that the finished cheddar caseinates in standardized cheeses, FDA production problems, and assess cheese made with fluid UF milk as an previously addressed comments on the commercial feasibility. The permit ingredient has the same physical and use of caseinates in previous provided for the temporary market chemical characteristics as traditional rulemakings (48 FR 2736 at 2737 and 58 testing of 15 million pounds (lb) (6.8 cheddar cheese (Ref. 5). In its response FR 2431 at 2439, January 6, 1993), and million kilograms) of the test product to T.C. Jacoby & Company, Inc., FDA advised that caseinates are not among for a period of 15 months. stated that based on its understanding the dairy ingredients provided for use in that ‘‘cheddar cheese produced with the the manufacture of standardized cheeses II. The Proposal retentate that results when milk is in part 133 and, therefore, cannot be A. Legal Authority/Statutory Directive subjected to processing in a used. FDA reaffirms that ingredients ultrafiltration system is nutritionally other than those specifically provided Section 401 of the Federal Food, Drug, equivalent to and is physically and for by the individual standards cannot and Cosmetic Act (the act) (21 U.S.C. chemically identical’’ to cheddar cheese be used in the making of standardized 341)) directs the Secretary of Health and prepared by the standardized procedure, cheeses and related cheese products. Human Services (the Secretary), to issue it would not object to the use of fluid Therefore, under the current regulations fixing and establishing UF milk in the manufacture of cheddar regulations, use of filtered milk, reasonable definitions and standards of cheese at Bongards Creamery on the including fluid UF milk, as an identity, quality, or fill of container limited basis described by T.C. Jacoby & ingredient in a cheese whose applicable whenever such action will promote Company, Inc. (Ref. 6). standard(s) does not provide for its use honesty and fair dealing in the interest Subsequently, FDA stated its would constitute a deviation from the of consumers. Section 701(e) of the act interpretation of the cheese standards standard, and such cheese cannot be (21 U.S.C. 371(e)) directs the Secretary that, as written, they do not allow for named by the standardized term. to publish a proposal for the the use of UF milk as an ingredient (Ref. However, under the provisions of 21 amendment or repeal of any definition 7). FDA reaffirms that the use of filtered CFR 130.17, food manufacturers may and standard of identity under section milk, dried or fluid, including fluid UF request from FDA a temporary 401 of the act for any dairy product (e.g., milk, as an ingredient is not covered marketing permit (TMP) to market a cheese) that is based on a petition of any under the alternate make procedures food that is named by the standardized interested persons showing reasonable provided for in certain standardized term but that deviates from its standard grounds. cheeses. However, while FDA has of identity. B. Options Considered considered the use of UF milk in standardized cheeses, it has stated that E. Temporary Marketing Permit (TMP) FDA considered several options in it would not object to the experimental On August 1, 2002, FDA received an response to the two petitions, including use of fluid UF milk as an ingredient in application from Wells’ Dairy, Inc. the following: (1) Denying the two cheddar and mozzarella cheeses (Ref. 7) (Wells’ Dairy), for a TMP for the use of petitions, (2) proposing to permit the and that enforcement regarding the use UF milk in the manufacture of cottage use of all fluid forms of filtered milk, (3) of UF milk as an ingredient in Swiss cheese. In the Federal Register of proposing to permit the use of all fluid cheese is not a priority (Ref. 8). December 9, 2004 (69 FR 71418), FDA and dried forms of filtered milk, and (4) Substances commonly referred to as announced the issuance of a TMP to proposing to permit the use of fluid UF MPC are also not permitted as Wells’ Dairy to market test cottage milk. FDA concluded that the first ingredients in standardized cheeses. cheese that deviates from the standard option would not be appropriate given While there is no current FDA of identity for cottage cheese in that the that the NCI petition includes within its regulation that defines ‘‘MPC’’ and this product is formulated using fluid UF scope allowing the use of UF milk in term does not appear to have a standard skim milk. For the purpose of this TMP, standardized cheeses, which FDA

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tentatively concludes, for reasons FDA believes that food standards should ingredient of cheese would be discussed under option 4, should be provide for flexibility in manufacturing inconsistent with the basic nature of permitted. procedures and ingredients, provided cheese. The second option, to provide for the that the basic nature and essential C. Proposed Amendments use of all fluid forms of filtered milk in characteristics of the food are preserved. standardized cheeses, was also In determining which filtered products Based on all the information determined to be inappropriate. are appropriate for use as ingredients in available, including the information Standards of identity regulations cheeses, FDA considered how the use of presented by the two petitions and the establish the name of the food, which a type of filtered milk affects the basic comments received thus far, FDA is identifies and describes the food’s basic nature and essential characteristics of proposing to amend the definitions of nature (43 FR 42118 at 42120, cheese. While filtration selectively and ‘‘milk’’ and ‘‘nonfat milk’’ in § 133.3 to September 19, 1978). As FDA discussed variably removes different constituents do the following: (1) Provide for in 1950 during the establishment of the of milk that are lost, to varying degrees, ultrafiltration of milk and nonfat milk cheese standards of identity, the starting during the whey removal process in the and (2) define UF milk and nonfat milk point for all varieties of cheese is milk. traditional cheese-making process, we as raw or pasteurized milk or nonfat In preparing milk for use in cheese do not agree that this fact can form a milk that is passed over one or more making, adjustments may be made by sufficient basis to support the use of all semipermeable membranes to partially adding or removing milk fat in the form forms of fluid filtered milk as remove water, lactose, minerals, and of cream, fresh skim milk, NFDM solids, ingredients. Some forms of filtration water-soluble vitamins without altering or concentrated skim milk so that the result in retentates that are specific the casein-to-whey protein ratio of the ratio of milk fat to the nonfat milk solids individual components of milk and are milk and resulting in a liquid product. is at a desired level (15 FR 5656 at 5657, no longer milk. In addition, research FDA is also proposing that the name of August 24, 1950). FDA reiterates its suggests that milk that is concentrated such treated milk is ‘‘ultrafiltered milk’’ longstanding interpretation that a basic to higher levels of protein is not suited or ‘‘ultrafiltered nonfat milk,’’ as nature of cheese is that it is a food made for use in all types of cheeses, with appropriate. Consequently, when this using milk as the starting ingredient. adverse effects on quality being reported type of milk is used, it would be Proposing to allow the use of all fluid particularly in the case of hard and declared in the ingredient statement of forms of filtered milk in standardized semi-hard cheeses (Refs. 1, 10, and 11). the finished food as ‘‘ultrafiltered milk’’ or ‘‘ultrafiltered nonfat milk.’’ cheeses was rejected because some Moreover, FDA believes that in First, providing for the use of fluid UF forms of filtration concentrates are determining the appropriateness of milk is consistent with the basic nature specific individual components of milk different forms of filtered milk as resulting in a retentate that is no longer of cheese in that the starting ingredient ingredients in cheese a primary is milk. During the process of milk. For example, microfiltration can criterion, based on a fundamental be used to separate whey proteins along ultrafiltration, some of the lactose, principle of food standards, is whether soluble salts, and water-soluble with lactose, minerals, and water- the use of the filtered milk ensures the soluble vitamins from milk resulting in vitamins of milk pass through the integrity of the standardized cheese—its membranes and are removed, while the concentration of casein fractions. basic nature and essential FDA tentatively believes that such protein, fat, fat-soluble vitamins, and characteristics. As explained in the some of the insoluble salts are retained. products that are merely concentrates of previous paragraph, FDA tentatively certain individual milk components are Therefore, unlike microfiltration, concludes that the use of a product of not milk. The use of individual ultrafiltration does not result in the microfiltration as the starting ingredient components of milk, such as specific separation of specific fractions of milk of cheese is not consistent with the milk proteins, as the basic or starting proteins. basic nature of cheese. Therefore, we do ingredient in cheese is not consistent Second, FDA tentatively concludes not agree that it is appropriate to with the basic nature of cheese in that that fluid UF milk can be used in provide for the use of all types of fluid cheese is a food prepared using milk, standardized cheeses while maintaining filtered milk nor do we agree that the not specific individual components of the essential characteristics of these argument about the ‘‘rearrangement’’ of milk. Moreover, as FDA previously cheeses specified in the individual the steps of cheese making (as described noted, when providing flexibility for use standards of identity in part 133. of advances in food technology, food by the petitioners) sufficiently supports Scientific literature suggests that fluid standards should ensure that the basic the appropriateness of the use of all UF milk, especially at low concentration nature of the food remains essentially forms of fluid filtered milk an factors, can be used in different cheeses the same (60 FR 67492 at 67499, ingredient. (including soft, semi-hard, hard, and December 29, 1995). FDA tentatively A third option that was also direct-acidified cheeses and process concludes that allowing for the use of considered inappropriate was to provide cheese) without adversely affecting the technologies that could potentially for all filtered milk, including both fluid physical, chemical, or organoleptic result in the use of a specific component and dried forms. Under this option, properties of the cheese (Refs. 1, 2, and of milk as the starting ingredient of substances such as MPC, dry 11 through 20; Appendix F of the NCI cheese would seem to violate the intent microfiltered (MF) milk, and caseins petition). This appears to be especially of the cheese standards of identity to would be permissible in standardized true with soft cheeses such as cottage preserve the basic nature of cheese. cheeses or related cheese products. cheese (Refs. 1, 14, and 15) and some In the NCI petition, the petitioners FDA’s concerns regarding the use of all direct-acidified cheeses (Ref. 12). also stated that because mechanical fluid filtered milk, which are stated in Specifically with respect to cottage filtration removes only those the two previous paragraphs, also apply cheese, as noted in section I.E of this constituents that are removed by loss of to the use of dried filtered milks. document, FDA reviewed relevant whey in traditional cheese making, it Allowing for the use of technologies that scientific information related to the use functions simply to rearrange the steps could potentially result in the use of of fluid UF milk as an ingredient and in the cheese-making process to permit specific components of milk, such as determined that fluid UF milk may be the constituents to be removed earlier. caseins, rather than milk, as the starting used in cottage cheese without

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adversely affecting the essential enable consumers to identify cheeses proposed in the food standards physical or chemical characteristics, made with milk that has undergone proposal. including nutritional composition and ultrafiltration. For the reasons explained previously organoleptic properties of cottage Finally, providing for the use of fluid in this section, FDA tentatively cheese. FDA issued a TMP to Wells’ UF milk would bring the standards of concludes that providing for the use of Dairy to market test cottage cheese that identity for cheeses in closer conformity fluid UF milk only, rather than for the deviates from the standard of identity with the international standards use of all fluid filtered milk (as for cottage cheese in that the product is adopted by Codex and facilitate requested by the NCI petition), would formulated using fluid UF skim milk (69 increased harmonization. In response to promote honesty and fair dealing in the FR 71418). the ADPI and NCI petitions, FDA interest of consumers by providing FDA notes, however, that the considered the relevant Codex standards greater flexibility in cheesemaking scientific literature also includes some for cheeses and related cheese products. while preserving the basic nature and reports of adverse effects from the use Specifically, FDA reviewed the Codex essential characteristics of the food. of fluid UF milk on the texture and standards for cheese (Codex Stan A–6), Therefore, FDA proposes to amend the development of flavor and aroma of cheeses in brine (group standard) definitions of ‘‘milk’’ and ‘‘nonfat milk’’ certain cheeses, particularly in semi- (Codex Stan 208), cottage cheese within § 133.3 to do the following: (1) hard and hard cheeses and with the use including creamed cottage cheese Provide for ultrafiltration of milk and of fluid UF milk at higher concentration (Codex Stan C–16), cream cheese (Codex nonfat milk and (2) define UF milk and factors (Refs. 1, 11, 17, and 21 through Stan C–31), extra hard grating cheese nonfat milk as raw or pasteurized milk 24). FDA points out that the use of fluid (Codex Stan C–35), unripened cheese or nonfat milk that is passed over one UF milk must not adversely affect the including fresh cheese (group standard) or more semipermeable membranes to physical or chemical characteristics of (Codex Stan 221), named variety partially remove water, lactose, the cheese. The cheese standards of process(ed) cheese and spreadable minerals, and water-soluble vitamins identity ensure the integrity of the process(ed) cheese (Codex Stan A–8(a)), without altering the casein-to-whey cheese by setting limits on its fat, milk process(ed) cheese and spreadable protein ratio of the milk and resulting in solids-not-fat, and moisture content. In process(ed) cheese (Codex Stan A–8(b)), a liquid product. FDA also proposes that addition, FDA considers nutritional process(ed) cheese preparations (Codex the name of such treated milk is equivalency and organoleptic properties Stan A–8(c)), and whey cheeses (Codex ‘‘ultrafiltered milk’’ or ‘‘ultrafiltered of the cheese among other factors to Stan A–7) (Refs. 25–34). FDA notes that nonfat milk,’’ as appropriate. determine whether the essential several Codex standards such as the Consequently, when this type of milk is characteristics of the cheese are standard for cheese, group standard for used, it would be declared in the maintained. Providing for the use of cheeses in brine, and group standard for ingredient statement of the finished fluid UF milk does not preclude a unripened cheese including fresh food as ‘‘ultrafiltered milk’’ or standardized cheese from meeting the cheese all permit the use of ‘‘milk and/ ‘‘ultrafiltered nonfat milk.’’ existing requirements within the or products obtained from milk,’’ which FDA seeks comment on the applicable individual standard(s) of encompasses fluid UF milk, as the raw appropriateness of the proposed identity in part 133. Rather, the use of material in the manufacture of theses amendments, including the provision to fluid UF milk would be optional and cheeses, provided the finished cheese permit the use of fluid UF milk and any cheese made using fluid UF milk meets the relevant physical and fluid UF nonfat milk. The proposed would have to meet all the chemical properties. Additionally, the amendments would allow for optional requirements, including the physical Codex standard for whey cheeses ultrafiltration of the starting ingredient, and chemical characteristics, specified provides for the addition of ‘‘raw milk or nonfat milk, used in cheese in the applicable individual standard(s) materials of milk origin,’’ including manufacturing. Under these proposed of identity. fluid UF milk. Providing for the amendments, whether a manufacturer Third, FDA anticipates that providing optional use of fluid UF milk as a basic uses fluid UF milk is optional and for the use of fluid UF milk would dairy ingredient in cheeses would be entirely up to the manufacturer. enable cheese manufacturers to benefit consistent with, although not as FDA also seeks comment on the from advances in milk filtration expansive as, the provisions of some appropriateness of the proposed technology and provide them with Codex standards. definition of ultrafiltration. With respect greater flexibility in cheese making, In a recent proposed rule (70 FR to the requirement for an unaltered while preserving the basic nature and 29214, May 20, 2005) (the food casein-to-whey protein ratio during essential characteristics of standardized standards proposal), FDA and FSIS ultrafiltration, FDA acknowledges that cheese. Further, using ultrafiltration proposed a set of general principles that some loss of small molecular weight technology may result in better define how modern food standards whey proteins may occur during retention of milk proteins and greater should be structured. The agencies also ultrafiltration of milk with the extent of cheese yields as well as more uniform proposed that, if finalized, the agencies loss partially dependent on the nature of product quality (Ref. 1). In addition, the will require that a CP for establishing, the membrane and the orientation of the petitioners claimed that using fluid revising, or eliminating a food standard molecules in milk (which may be filtered milk (including fluid UF milk) be submitted in accordance with these influenced by the treatment of milk helps manage seasonal imbalances in general principles. Conversely, the prior to or during ultrafiltration). While milk supplies and demand for cheese, agencies proposed that they may find casein and most whey proteins are and reduces the costs associated with deficient a petition to establish, revise, retained in the retentate, proteose- bulk milk distribution, resulting in cost or eliminate a food standard that does peptones with low molecular weights savings that ultimately could be passed not follow these general principles. FDA may be lost in the permeate. Proteose- on to consumers. Furthermore, believes that the action proposed here to peptones have a molecular weight declaring fluid UF milk in the provide for the use of fluid UF milk as between 4,100 and 20,000 Da (Ref. 35). ingredient statement of the cheese as an ingredient in standardized cheeses Because there is expected to be free ‘‘ultrafiltered milk’’ or ‘‘ultrafiltered and related cheese products is cross-flow of these proteins across the skim milk,’’ as appropriate, would consistent with the general principles membranes, the loss of the very low

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molecular weight proteose-peptones the use of any filtered milk, citing nonfat milk, and the different forms may be small and, therefore, as noted in product safety and quality concerns; (including concentrated, reconstituted, published reviews, the casein-to-whey however, these comments did not and dried) that can be used in making protein ratio of milk would not be provide any scientifically sound and standardized cheeses, they do not significantly altered during valid data to support their objections explicitly permit the use of filtered milk ultrafiltration (Refs. 36 and 37). Studies specifically with regard to fluid UF as an ingredient in standardized also have demonstrated complete milk. At this time, FDA does not have cheeses. The use of filtered milk in retention of whey proteins and a any information that raises food safety cheese making provides greater relatively constant casein-to-whey concerns with the use of fluid UF milk flexibility and potential cost savings to protein ratio in milk that has been in standardized cheeses. FDA cheese producers while still preserving ultrafiltered to increasing volume specifically requests that any comments the basic nature and essential concentration (Refs. 13, 38, and 39). The that address the technical aspects of characteristics of the food. FDA information presented by Wells’ Dairy, these proposed provisions include tentatively concludes that revision of Inc., as part of its TMP submission also sound scientific and factual data or the standard is needed to promote demonstrates that there is minimal, information that support the positions honesty and competition in the interest insignificant loss of true protein in the presented in the comments. For of consumers and to allow dairy ultrafiltration permeate resulting in an example, are there analytical data or producers to utilize a safe and effective ultrafiltered retentate with its casein-to- other information that would support a technology. whey protein ratio intact (Docket No. determination that standardized cheeses 2004P–0519; 69 FR 71418). made using fluid UF milk, as defined in B. Background and Current Industry FDA notes that a comment received in this proposed rule, are potentially Practices response to the two petitions suggested unsafe or are nutritionally inferior? Are that any definition of ultrafiltration also there scientific data or information that The sources for this analysis were include a requirement that the fluid UF demonstrate that the use of fluid UF compiled from food research and milk must contain a maximum of 45 milk, as defined in this proposed rule, chemistry journals, milk and cheese percent total solids (or a minimum adversely affects the physical, chemical, industry publications, U.S. Department moisture content of 55 percent). The or sensory characteristics of a particular of Agriculture (USDA) data and reports, comment stated that this requirement is standardized cheese or cheese product other government agency reports, and necessary to define ‘‘liquid’’ UF milk or that would support the determination expert opinions. Sources cited in this and preclude any treatment following that the use of fluid UF milk is not text refer to the specific passage or data ultrafiltration to further concentrate UF appropriate in a particular standardized reported, but all sources found at the milk. However, the comment did not cheese or cheese product? end of the document were used to provide any supporting information or formulate the basis of the analysis. data on the appropriateness of this III. Executive Order 12866: Cost Benefit Analysis The standardization of casein and fat minimum level of moisture. In the content in milk is a common practice in proposed definition of UF milk, FDA is FDA has examined the economic cheese production that improves the not proposing a requirement related to implications of this proposed consistency of the final products, minimum moisture content of UF milk; amendment for part 133 as required by reduces the volatility of total milk Executive Order 12866. Executive Order however, the proposed definition states ingredient costs, and increases the 12866 directs agencies to assess all costs that UF milk is a liquid product. FDA amount of cheese produced per vat (Ref. and benefits of available regulatory seeks comment on whether there is a 9). Not all cheese producers standardize alternatives and, when regulation is need for an added measure to ensure the their milk, but the amount of protein, necessary, to select regulatory liquid nature of this ingredient and/or to specifically in the form of casein, approaches that maximize net benefits preclude any subsequent treatment present in milk for cheese production is (including potential economic, following ultrafiltration to further the single largest factor affecting cheese environmental, public health and safety, concentrate the fluid UF milk. If so, yield. Condensed skim milk and NFDM and other advantages; distributive does a minimum moisture content are widely used to increase the amount impacts; and equity). Executive Order requirement sufficiently address this of casein in cheese milk (Refs. 9 and 40). concern and what is an appropriate 12866 classifies a rule as significant if In 2001, the dairy industry purchased minimum level of moisture? it meets any one of a number of 621 million lb of NFDM, 67.5 percent of FDA also seeks comment on the need specified conditions, including: Having all domestic sales of NFDM. The use of for, and appropriateness of, the an annual effect on the economy of $100 NFDM in hard cheeses made up 43.3 following: (1) Not permitting other million, adversely affecting a sector of percent of the total amount purchased forms of mechanical filtration, such as the economy in a material way, by the dairy industry, and cottage and microfiltration; and (2) the requirement adversely affecting competition, or cream cheeses accounted for an that the casein-to-whey protein ratio adversely affecting jobs. A regulation is additional 6.2 percent (Ref. 41). remain unaltered during ultrafiltration also considered a significant regulatory and the feasibility of such a requirement action if it raises novel legal or policy By adding condensed milk or NFDM for compliance and enforcement issues. FDA has determined that this the cheese producer is adding lactose purposes. If the requirement that the proposed rule is a significant regulatory and minerals that must later be removed casein-to-whey protein ratio remain action as defined by Executive Order from the curd at a greater rate than the unaltered is not appropriate, FDA seeks 12866. casein that provides the benefits (Ref. information on what constitutes an 40). Ideally, cheese producers would acceptable variation of this ratio during A. Need for Regulation standardize their cheese milk with a ultrafiltration of milk so that FDA may Under current standards of identity higher concentration of protein without determine appropriate criteria for for cheese and cheese products, the adding components that later have to be purposes of enforcement. definitions of ‘‘milk’’ and ‘‘nonfat milk’’ removed. The key components of milk In response to the petitions, FDA do not encompass ‘‘filtered milk’’. As a products used in cheese making are received some comments that opposed result, while these definitions list milk, listed in table 1 of this document.

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TABLE 1.—COMPOSITION OF MILK PRODUCTS

Nonfat Dry Fluid MF Milk Isolated Casein Component1 Milk (%) Fluid UF Milk (%) Dry UF Milk (%) Milk (%) (%)2 (%)

Protein 3.3 36 4.48–11.94 42–80 7 .9 89–94

Fat 3.65 0.8 5.51–14.68 1–2.5 10 .5 1.53

Lactose 4 .75 52 4.59–3.68 46–4.1 4.7 0–0.23 1 Percentages compiled from the Wisconsin Center for Dairy Research and the Wisconsin Milk Marketing Board White Paper (2001), Fassbender (2001), Innovations in Dairy (2001), and GAO (2001). 2 As in the case of fluid UF milk, the composition of fluid MF milk can vary but we were unable to find a range of values of protein, fat, and lac- tose content of fluid MF milk in the literature. 3 Maximum values.

Table 1 of this document, reflects the suggests that low concentration Cheese producers, while not the fact that UF milk can be concentrated to replacement has been successfully used direct purchasers of UF technology, a greater or lesser extent to meet the in Cheddar and Mozzarella cheeses would still be affected by the changes in needs of different manufacturing (Refs. 1 and 9), whereas continuous the definition of milk in standardized processes. For some cheeses, the UF process cheese-making from high cheese if they choose to replace some of milk can be highly concentrated then concentration UF milk was not (Ref. 9). their ingredient milk with UF milk. mixed with cream to produce a liquid These two cheeses alone made up two- Many of the benefits of using UF milk ‘‘precheese’’ with the same gross thirds of domestic cheese production in in cheese accrue to the cheese producers composition as the final cheese. It has 2002 with Swiss and other American directly, including, e.g., higher cheese been shown that this precheese can be cheeses, making up an additional 13 yields and increased production used in continuous process cheese percent (Ref. 45). If this proposed rule efficiency as well as a greater ability to making without the use of vats (Refs. 10 is finalized, all standardized cheese eliminate the natural variation in their and 42). Some soft cheeses, processed made in the United States, regardless of milk supplies, and reduced storage cheese, and direct acidified cheese, the variety and including those that costs. particularly those made from goat’s and implement UF technology, must Dairy processors and cheese sheep’s milk, have been reported to be continue to meet the physical and producers are not mutually exclusive successfully produced using highly chemical properties specified in the categories. A dairy processor is a concentrated UF milk (Refs. 12, 13, and standard. manufacturer of dairy products made 43). However, the high concentration of Amending the standard of identity of using milk as the main dairy ingredient. the retentate may affect some properties cheese has the potential to affect two Therefore, cheese producers are all of the milk and require specially related sectors of the dairy industry: dairy processors, but not all dairy designed equipment (Ref. 2). Dairy processors and cheese producers. processors produce cheese. In 2002 More widely accepted for the Milk is produced on dairy farms daily, there were 403 cheese plants and 1,153 common styles of cheese consumed in with the volume and composition dairy processors in the United States the United States appears to be the use varying both seasonally and daily. The (Ref. 45). Some dairy processors either of lower concentrations of UF milk to milk is picked up from dairy farms and manufacture cheese directly or standardize the protein concentration in transported by milk haulers to manufacture dairy products that are cheese milk to produce higher final cooperatives or proprietary operations sold to cheese producers. However, cheese yields (Refs. 4, 10, and 44). Low for distribution or further processing. some dairy processors produce no concentration UF milk replaces a Large dairy farms may encompass cheese products or ingredients percentage of milk, usually between 10 production, processing, and even hard- whatsoever, and instead, produce a and 20 percent, to provide a higher level product manufacturing facilities all at variety of other dairy products of casein in the cheese milk without the one site, whereas other dairy farms may including fluid milk, butter, ice cream, addition of lactose and minerals (Ref. belong to a cooperative or sell their milk and whey products. It is also worth 40). Most of the benefits of using UF to a proprietary operation that processes noting that dairy processors include milk are from standardizing the protein or further distributes the milk at its own cooperatives. In 1997 there were 226 concentrations while still allowing discretion. Except in the cases of large dairy cooperatives that ranged in conventional cheese-making equipment operations, dairy farms do not usually primary function from bargaining-only to be used, or easily adapted for use process their own milk. Therefore, to hard-product manufacturing and (Ref. 10). Other uses include UF milk while there are almost 92,000 dairy fluid processing (Ref. 47). replacement to eliminate the natural operations (an operation is a place with We measure benefits as the net seasonal variation in milk quality, one or more milk cows; a farm may decrease in the cost of producing improving the consistency of cheese include more than one operation) in the cheese. These benefits accrue from all (Ref. 9). United States (Ref. 46), the unit of types of protein-standardization; For the purpose of the economics measurement for purchasing UF however, the extent of the benefits will analysis, and without making any technology is the dairy processor who vary depending on the milk product declarations about what FDA believes is collects milk from one or more dairy used. These benefits lead to cost savings technically sufficient, we use a low operations. In addition to making the that could be passed along to consumers concentration of UF milk with capital investment in UF technology, if the market is opened to a larger approximately 10 percent replacement dairy processors would benefit from the number of dairy producers within the as the appropriate reference for 80 decreased costs for transporting and industry and competition among cheese percent of all cheese made in the United storing UF milk during shipment to producers is enhanced. When only States. This is based on research that cheese producers. those milk processors that are large

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enough to incorporate UF technology in benefits and costs of the baseline are $11 million savings in coagulant usage legitimate alternate-make procedures zero. annually. FDA notes that these (i.e., within plant and within batch) are Option 1: Allow fluid UF milk to be used estimates are uncertain and seeks allowed to use the cost-saving in the making of standardized cheeses comment on the cost savings from technology in standardized cheeses, This option would allow fluid UF rennet and starter cultures. they will be able to sell their goods at milk to be used in the making of Estimating the net social benefits from the market price, which is based on standardized cheese. For most U.S. implementing UF technology requires competition among firms with higher cheese production, this option would subtracting out the private costs to firms production costs. If, however, the result in replacing a percentage of the of making the necessary capital market is broadened so that all firms, milk used in the production of cheese investments. Milk is increasingly being large and small, are able to use the cost- with fluid UF milk. This option differs ultrafiltered during the processing stage, saving technology, competition among from the baseline by substituting fluid usually at manufacturing plants or dairy these firms should bid down the market UF milk for NFDM as the protein-dense cooperatives, so we assume that no price of cheese, passing the savings on replacement milk ingredient. capital investment in equipment by the to consumers. Benefits of Option 1: Fluid UF milk cheese maker is needed to take retains more moisture from milk than We measure the costs of using filtered advantage of UF technology for low NFDM does, so as a percentage of total milk to make standardized cheese as level fluid UF milk concentration composition, UF milk has less protein losses to consumers who prefer cheese replacement (Ref. 48). Cheese producers than NFDM. However, it also contains made under the existing milk can simply replace a portion of milk less lactose than either NFDM or milk. definitions, domestic and international with fluid UF milk purchased from a In fact, the more highly concentrated the market adjustments, and government dairy processor without purchasing new milk is, (the concentrations listed in purchases required under USDA’s equipment. table 1 of this document, vary from 1.5 An early cost-benefit analysis of fluid Commodity Credit Corp., program. to 4 times the solids concentration of UF milk production by Slack, et al. (Ref. Increases in government purchases of milk), the more protein is retained and 51), found that the benefits of UF milk dairy products will not incur unless the the less lactose is unnecessarily added. production outweighed the costs for market prices of specific products fall Replacement of milk with fluid UF milk dairy farms with over 100 cows. below the government floor prices. during the manufacturing process However, this threshold has likely C. Regulatory Options produces yield increases per vat, thus changed as the latest Pasteurized Milk spreading out fixed costs (labor, Ordinance (April 2003 edition) loosened We analyze several options for equipment, physical facility) over more the restriction that allowed only single amending the standards of identity for total weight of cheese (Ref. 9). pass UF systems to now allowing for cheeses and cheese products. Option 1 According to the Technical Director of less expensive recirculating UF systems. would amend the definition of milk in North American Milk Products, a cheese Informal conversations with industry the standards of identity for cheeses to plant that replaces 10 percent of its representatives revealed that the allow fluid UF milk to be used. Option daily milk inputs with fluid UF skim smallest single pass UF systems being 2 would allow fluid UF milk and dry UF milk would see an increase in cheese marketed can process 300,000 lb of milk milk. Option 3 would amend the yield of 12 percent. This increase in per day, the equivalent of production definition of milk in the standards of yield lowers costs by up to two cents from almost 5,000 cows (300,000 lb is identity for cheese to allow all filtration per pound of cheese (Ref. 48). In 2002, roughly 34,800 gallons, which at 7 to 8 methods that resulted in a fluid milk 8.6 billion pounds of cheese were gallons per cow per day, is 4,350 to product to be used in cheese produced (Ref. 45). Therefore, the yield 4,971 cows). Recirculating systems, on production. Option 4 would allow all increase due to partial replacement of the other hand, are available for flow filtration methods that resulted in fluid milk with fluid UF milk in all U.S. rates of 800 gallons per day, or or dry milk products to be used. Option cheese production could save about production from approximately 100 5 would allow all milk or products $172 million per year ($0.02 per pound cows (Ref. 52). obtained from milk to be used in cheese x 8.6 billion pounds). The costs of implementing fluid UF production, in concert with the Codex This estimate may understate the technology differ for four categories of general standard for cheese. potential cost savings; Fassbender (Ref. dairy processors. We estimate the benefits and costs of 49) states that a 10 percent replacement • If a processor already produces the regulatory option compared with the produces a yield increase of 25 percent, fluid UF milk, there is no additional benefits and costs of a baseline. The and an article from Dairy Management, cost to allowing the extended definition baseline reflects the state of the industry Inc., states that a 10–15 percent of milk in standardized cheese. before any new regulation is put in replacement produces a yield increase • If a processor collects milk from place. Therefore, in this analysis the as high as 18 percent (Ref. 50). In fewer than 100 cows, UF technology baseline is leaving the standard of addition, the amount of rennet and may not be economically feasible. If identity for cheese unmodified, i.e., starter cultures which are added to cheese producers switch their input milk, nonfat milk, and the concentrated, cheese milk can be reduced due to the purchases away from milk to fluid UF reconstituted, and dried forms of milk higher solids content in the cheese milk. milk, there might be a redistribution of and nonfat milk are the only basic In one fluid UF milk research study at income away from these very small ingredients allowed in the production of the Wisconsin Center for Dairy dairy processors. FDA believes that few, standardized cheese. Due to the Research, a plant was able to reduce the if any, milk processors will fall into this ‘‘extensive use of nonfat dry milk rennet usage by 4 ounces per vat, for a category. Even though there are many (NFDM) as an ingredient for cheese total annual savings of over $28,000 small dairy farms (72,070 in 2002) milk manufacture in the United States’’ (Ref. (Ref. 49). If we assume this plant is is not necessarily ultrafiltered on-farm. 9), the baseline assumes NFDM is used representative of all cheese Instead, small dairy farms have the as the source of supplemental solids in manufacturing plants, then multiplying option of combining milk with other cheese manufacture. For purposes of $28,000 by the 403 cheese plants in dairy farms in member-owned this analysis, we assume that the 2002 (Ref. 45) gives a rough figure of cooperatives or selling milk to

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proprietary operations that combine purchases of UF equipment would more The transportation and storage costs milk from several farms for processing. likely be recirculating systems, the total associated with fluid UF milk are lower The USDA defines a ‘‘small’’ dairy one time capital expenditure would than milk due to the removal of cooperative as handling less than 50 range from $118 to $237 million. Given approximately two-thirds of the water, million lb of milk each year (Ref. 53), that the UF equipment depreciates over lactose, and ash during the filtration which is roughly the equivalent of milk 7 to 14 years (Ref. 1), we estimated the process (Ref. 48). The 2001 GAO Report from 2,000 cows per day and well above annualized cost over a 10 year period. cites a shipment of fluid UF milk by the 100 cow minimum. With a 3 percent interest rate, the Select Milk Producers, Inc., in which • If a processor collects milk from annualized cost ranges from $14 to $28 the cost of transporting fluid UF milk more than 100 cows but less than 4,000 million. With a 7 percent interest rate, was 73 percent lower than the cost of and is not currently producing fluid UF the annualized cost ranges from $17 to transporting milk. In this same year, milk, then the cost of purchasing $34 million. The annualized cost ranges milk hauling charges in the Upper recirculating UF equipment ranges from indicate the capital expenditure ranges Midwest Marketing Area (which $175,000 to $350,000 (Ref. 52). based on the equipment capacity needs includes California and Wisconsin, the • If a processor collects milk from described previously in this document. top two milk producing states) averaged 4,000 or more cows and is not currently 17.1 cents per hundredweight (cwt) of producing fluid UF milk, then the cost Milk is produced daily, with the milk (Ref. 54). A 73 percent price of purchasing UF equipment ranges volume and composition varying both from $350,000 for a recirculating system seasonally and daily. Demand for dairy reduction in this average hauling cost to $1,372,500 for a single-pass system products also varies both seasonally and lowers the cost of hauling fluid UF milk (Ref. 52). daily, but demand variations are not to an average of 4.62 cents per cwt. As Of the 1,153 dairy processors (which correlated with supply variations (e.g., stated in the section I of this document, includes dairy cooperatives that process milk production peaks in the spring, but we assume that for approximately 80 milk for members), an unknown portion demand for milk and butter peaks in the percent of the cheese produced in the would purchase UF technology in fall months) (Ref. 53). Cheese producers, United States, fluid UF milk is used as response to this proposed rule if however, need to provide a consistent a substitute in cheese production, not finalized. In 2002, cheese production quality cheese, regardless of the day or for milk, but for the baseline used 64,504 million lb of milk, which is season in which the inputs were standardizing ingredient, NFDM. To approximately 61 percent of the 105,961 produced. Replacing a given portion of calculate the transportation savings for million lb used in all manufactured milk with UF milk can eliminate the these cheeses, we take the 64,504 dairy products (Ref. 45). Therefore, we daily variation that occurs in milk million pounds of milk used in cheese estimate that 61percent of the dairy composition by standardizing the ratio production in 2002 (Ref. 45) and manufacturing plants process milk for of casein to fat. However, fluid UF milk multiply by 80 percent to capture the cheese, for a total of 703 dairy plants. does not offer any price stability from amount shipped for American style Given that at least 22 dairy seasonal fluctuations that occur in the natural cheeses. We then calculate 10 manufacturing plants and 4 large dairy supply and demand for both milk and percent of this total to be replaced by farms already produce fluid UF milk cheese, since it cannot be stored past the fluid UF milk and convert it to cwt. This (Ref. 4), a total of 677 dairy processors short term in a liquid form. Nonfat dry is the amount of milk that is subject to may choose to purchase UF technology milk has a shelf-life of 12 to 18 months a 73 percent reduction in shipping as a result of changing the definition of (Ref. 50) and may offer more price costs, giving a total annual cost savings milk in § 133.3. Assuming that new stability from seasonal fluctuations. of about $7 million as follows:

CALCULATION OF TRANSPORTATION COST SAVINGS FOR FLUID UF MILK USED IN AMERICAN STYLE NATURAL CHEESE 80% X 64,504 million lb = 51,603 million lb of milk shipped for American cheese production 10% X 51,603 million lb = 5,160 million lb of milk filtered before shipment to cheese factory 5,160 million lbs/100 lb = 51.6 million cwt of milk filtered before shipment 73% of 17.1 cents/cwt = $0.13 savings per cwt of fluid UF milk shipped $0.13 X 51.6 million cwt = $6.7 million

There would be an additional a potential range for what this cost percent of cheese production would transportation and storage cost savings savings would be, we calculated the replace 100 percent of milk in cheese for the varieties of cheese that are well- transportation savings assuming that the production as a lower bound. The suited to high concentrations of UF milk remaining 20 percent of cheese annual transportation savings here range where replacement values are closer to production would use only UF milk for from $2 to $17 million (See below). 100 percent of the original milk. To get an upper bound and assuming only 2

CALCULATION OF UPPER BOUND OF TRANSPORTATION COST SAVINGS FOR 100% FLUID UF MILK REPLACEMENT 20% X 64,504 million lb = 12,901 million lb of milk shipped for all other cheese production 100% X 12,901 million lb = 12,901 million lb of milk filtered before shipment to cheese factory 12,901 million lb/100 lb = 129 million cwt of milk filtered before shipment 73% of 17.1 cents/cwt = $0.13 savings per cwt of UF milk shipped $0.13 X 129 million cwt = $16.8 million

CALCULATION OF LOWER BOUND OF TRANSPORTATION COST SAVINGS FOR 100% FLUID UF MILK REPLACEMENT 2% X 64,504 million lb = 1,290 million lb of milk shipped for other cheese production 100% X 1,290 million lb = 1,290 million lb of milk filtered before shipment to cheese factory 1,290 million lbs/100 lb = 12.9 million cwt of milk filtered before shipment 73% of 17.1 cents/cwt = $0.13 savings per cwt of UF milk shipped $0.13 X 12.9 million cwt = $1.7 million

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In terms of total transportation cost the procedure specified by the standard (excluding cottage cheeses) were savings for all cheese production, this of identity. This provision only allows produced (Ref. 45), for total consumer calculation gives an annual savings for the use of alternate procedures and expenditure of $31.4 billion) the costs between $9 and $24 million for not for alternate ingredients. Therefore, incurred from fluid UF milk are likely replacing milk with fluid UF milk in the use of UF technology must be within to be low because standardized cheeses cheese production. While this is a cost plant and within batch; fluid UF milk do not tend to have credence attributes. savings over using milk in cheese purchased from another plant, even Credence attributes are characteristics production, it is not a savings over using within the same company, is considered that consumers are willing to pay more NFDM. Reducing the moisture content an alternate ingredient. Allowing fluid for, even though they are not detectable of milk by two-thirds reduced the UF milk as an ingredient effectively after consumption (e.g., ‘‘dolphin-safe’’ shipping costs by 73 percent, so it is removes the barriers to shipment of tuna). The growth in the dairy products reasonable to assume that NFDM with fluid UF milk to cheese producers over the past 20 years has been largely only 3.2 percent moisture (Ref. 40) and throughout the country and allows for attributed to increased demand for pizza an increased shelf-life of 12 to 18 greater competition in the market for and fast food products that contain months (Ref. 50) would be significantly cheese ingredients. cheese, particularly Mozzarella and As stated previously in this less expensive to ship and store than UF American cheese (Ref. 56). These are not milk. Compared with the baseline then, document, approximately 22 dairy the varieties of cheese that tend to be these savings would be reduced by an manufacturing plants and four large associated with cheese connoisseurs amount in excess of $7 million due to dairy farms produce UF milk. It is who demand purity in cheese the actual increase in costs from difficult to ascertain how much of the replacing NFDM with fluid UF milk. UF milk is being used within plants ingredients. There is no evidence that The total annual benefits from using under alternate make procedure consumers place a premium on cheeses fluid UF milk to make standardized provisions, and how much is being made under the existing definition, in cheeses are uncertain, partly because shipped to outside plants. Few records particular because cheese made with UF the number of additional plants that are kept either by the USDA or trade technology must have the same physical would use the UF technology is associations regarding intermediate and chemical properties as cheese made uncertain. The cost savings also depend products like fluid UF milk (See GAO under the existing milk definition and on the size of the plants that decide to report). In 1996, the FDA permitted a because an unknown quantity of invest, the amount of milk which cheese single New Mexico plant to produce cheeses produced in the United States producers replace with fluid UF milk, cold UF milk for shipment to a cheese- are already made using UF technology and whether fluid UF milk replaces making plant in Minnesota for trial under the alternate make procedure milk or NFDM in the production purposes only. Subsequently, the New provisions. process. If all dairy plants switch to UF Mexico plant is said to have increased The U.S. dairy market is regulated technology, the yield and coagulant shipments of UF milk to 15 plants under both Federal and State savings would be high, but investment throughout the country (Ref. 49). regulations. The U.S. Government costs would also rise. If most plants Allowing fluid UF milk to be used in provides price supports for domestic already use this technology, or decide standardized cheese production could milk production under the USDA’s against investing, the yield, coagulant, significantly increase the number of Commodity Credit Corp. A potential and transportation savings would be plants using this cost-saving technology, drop in the demand for milk as cheese low. If NFDM is not extensively used in particularly among smaller operations producers switch to fluid UF milk could that cannot currently afford to purchase current cheese production, the result in the market price dropping UF technology. These smaller cheese transportation savings will be greater. below the support price, thus forcing producers that cannot afford to filter Finally, if larger plants already have UF the government to purchase a larger technology the total capital investment milk as a step in the production process amount of milk. However, fluid UF milk costs will decrease but yield increases could purchase UF milk from a dairy is produced by separating the will not be as dramatic as only smaller processor. In 2002, there were 403 components of milk. Therefore, any systems will potentially invest as a cheese plants and 1,153 dairy decrease in the domestic demand for result of changing the definition. manufacturing plants spread across all In addition to the technical benefits in fifty states (Ref. 45) but only 26 dairy milk resulting from the production and cheese production from allowing fluid plants and farms were producing UF sale of fluid UF milk will be off-set by UF milk to be used in standardized milk. The supply of UF milk is a decrease in the supply of milk, as cheese production, amending the restricted by the current definition, dairies ultrafilter some of their milk standards offers another economic potentially increasing its cost as an instead of selling it directly. As a result, benefit. Specifically, allowing fluid UF input to cheese production. the quantity of milk purchased by the milk to be used as an ingredient in Costs of Option 1: There are no health government is left unchanged. Stated cheese would open the benefits of UF costs associated with the lower another way, if cheese producers technology to a wider range of cheese production costs of cheese made with purchase fluid UF milk instead of other manufacturers. Currently, fluid UF milk fluid UF milk. milk, the demand for milk from cheese can be used in standardized cheese If consumers prefer cheese made producers will fall, while the demand production only under ‘‘alternate make’’ under the existing milk definition and if for fluid UF milk from cheese producers procedures. Under the alternate make they purchase cheese made from fluid will rise. As a result, the dairy procedure provisions, manufacturers of UF milk believing it to be made from processors who find it profitable to do cheese who purchase or produce milk in milk under the existing definition, there so will decrease their supply of milk sufficient quantity to use UF technology will be a small cost incurred by the and instead ultrafilter the milk before may substitute the ultrafiltration of milk consumer. However, even though the they sell it to the cheese producer. If no as a step in the cheese-making process total dollar amount spent on cheese is dairy processors find it profitable to as long as the final finished cheese has large (in 2000, the retail price of 1 lb of ultrafilter their milk before selling it, the same physical and chemical natural cheddar cheese was $3.83 (Ref. then cheese producers will have no properties as the cheese produced under 55) and 8.2 billion lb of all cheeses choice but to purchase milk, again

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leaving the amount purchased by the processing stage, usually at milk prices (Ref. 9) and be better able to government unchanged. manufacturing plants or dairy balance seasonal imbalances than milk In addition, the U.S. Government cooperatives, so we assume no capital or fluid UF milk. provides export subsidies under the investment in equipment by the cheese The transportation and storage costs Dairy Export Incentive Program. Fluid producer is needed to take advantage of associated with dry UF milk are lower UF milk is less expensive to transport dry UF technology for low than either milk or fluid UF milk due to than milk under the standard definition concentration UF milk replacement. the removal of approximately 95 percent of milk in cheese, leading to fears that Cheese producers can simply replace a of the water, lactose, and ash (Ref. 40) expanding the use of fluid UF milk may portion of milk with dry UF milk during the ultrafiltration and increase imports and further decrease purchased from a dairy processor subsequent drying processes. The the demand for domestic milk. As of the without purchasing new equipment. moisture content of dry UF milk is first 9 months of 2002, all UF milk The costs of implementing dry UF similar to that of NFDM; therefore, it is imported into the United States was in technology varies among different types reasonable to assume that shipping and a dry powder form categorized as MPC of dairy processors and will depend on storage costs would also be similar for (Ref. 57). Therefore, allowing the use of their current production technology. If a replacing NFDM with dry UF milk in fluid UF milk as an ingredient in the dairy processor already produces UF protein standardization. If NFDM is not standard of identity of cheese should milk and NFDM, there is no additional being used for protein standardization, not cause foreign-produced UF milk to cost to allowing the extended definition then dry UF milk could offer substantial replace domestic milk in cheese of milk in standardized cheese. If a benefits compared to the transportation production or cause U.S. Government processor collects milk from fewer than and storage of milk, possibly reducing purchases under the Commodity Credit 100 cows, it may not be economically these costs up to 95 percent. Corp. to rise. feasible to implement the UF process, A review of the literature found no Option 2: Allow fluid and dry UF milk making dry UF milk production manufacturers of dry UF milk in the in standardized cheese production impossible even if the dairy processor United States; however, informal This option would allow UF milk has appropriate drying technology. If a conversations with industry either in fluid or spray-dried form. Dry dairy processor collects milk from 100 representatives revealed one joint UF milk is often referred to as MPC, to 4,000 cows and is not currently venture in New Mexico that currently though the definition of MPC is not producing UF milk, then the cost of produces dry UF milk and possibly consistently used and sometimes implementing a UF system ranges from another firm in New York (Ref. 59). includes other dried filtered or $175,000 to $350,000, depending on the Little is known about the cost of concentrated milk products. This option size of the plant. If a processor collects producing dry UF milk, and why there differs from the baseline and Option 1 milk from 4,000 or more cows and is not is little to no U.S. production is a matter by substituting dry UF milk for NFDM currently producing UF milk, then the of some debate. The price floor set by or fluid UF milk as an ingredient in cost of purchasing UF equipment ranges the U.S. Dairy Price Support Program standardized cheeses. from $350,000 for a recirculating system for NFDM is often cited as the cause. At Benefits of Option 2: The protein to $1,372,500 for a single-pass system. the current levels of government composition of dry UF milk ranges from Using the same method as Option 1, the purchase prices for milk protein, U.S. 42 percent to 80 percent (Ref. 40), total one time capital expenditure for manufacturers of dry UF milk products depending on the degree of dairy processors who sell their products would obtain the same or lower return concentration. In addition, as the to cheese producers would be $118 to per pound of protein than they would protein concentration increases, the $237 million. If the dairy processor does for producing NFDM. Given the higher lactose content decreases from 46 not own a spray dryer, additional manufacturing costs associated with UF percent to just 4.1 percent at the highest capital costs would be necessary, on the technology, dairy producers in the concentrations. Therefore, the order of $750,000 (Ref. 58). If half of all United States are often better off supplementation of cheese milk with 703 dairy plants had to purchase this producing NFDM and selling it to the dry UF milk during the manufacturing equipment, the one-time capital government than producing dry UF milk process produces even larger yield expenditure would grow by $264 products for cheese and other food uses increases per vat than fluid UF milk or million for a total of $382 to $501 (Ref. 60). Foreign firms who currently NFDM, thus further spreading out fixed million. Given that the UF equipment export dry UF milk to the United States costs (labor, equipment, physical depreciates over 7 to 14 years (Ref. 1), have greater incentive to open their own facility) over more total weight of we estimated the annualized cost over a plants in the United States, as it would cheese. Given these larger cheese yield 10-year period. With a 3-percent interest reduce their transportation and tariff increases over fluid UF milk, it is safe rate, the annualized cost ranges from costs. to assume that the total yearly savings $45 to $59 million. With a 7-percent Costs of Option 2: There are no health from using dry UF milk would exceed interest rate, the annualized cost ranges costs associated with the lower $172 million. In addition, the amount of from $54 to $71 million. The annualized production costs of cheese made with rennet and starter cultures which are cost ranges indicate the capital fluid or dry UF milk. added to cheese milk can be reduced expenditure ranges based on the If consumers prefer cheese made due to the higher solids content in the equipment capacity needs described under the existing milk definition and if cheese milk. The rough figure of $11 previously in this document. they purchase cheese made from dry UF million savings in coagulant usage Similar to NFDM, spray-drying UF milk believing it to be made from milk annually calculated in Option 1 is milk significantly increases the shelf-life under the existing definition, there will applicable here as well. of the milk. Using such milk powders be a small cost incurred by the Calculating the net social benefits to can eliminate the natural daily and consumer. However, even though the implementing UF technology requires seasonal variation that occurs in milk total dollar amount spent on cheese is subtracting out the private costs to firms composition (by standardizing the ratio large (about $31.4 billion in 2000) the of making the necessary capital of casein to fat). In addition, the ability costs incurred from dry UF milk are investments. Similar to fluid UF milk, to store dry UF milk allows the cheese likely to be low because standardized dry UF milk production occurs at the producer to offset the volatility of fresh cheeses do not tend to have credence

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attributes and there is no evidence that category, including milk protein isolate, other filtration technologies, most consumers place a premium on cheeses whey protein concentrate, whey protein notably microfiltration, as long as no made under the existing definition. isolate, casein, milk protein stabilizer, nonmilk derived ingredients are added Cheese made with UF technology must emulsifier or binder, peptones, and total in the preparation of the liquid have the same physical and chemical milk proteinate. Without a standard concentrates. This option differs from properties as cheese made under the definition for MPC it is not clear that the baseline by permitting the existing definition of milk within the even imports labeled specifically as substitution of fluid UF and MF milk for cheese standards. MPC are 100 percent dry UF milk. NFDM. This technology and the There is some concern over whether In his analysis of MPC imports and resulting product, sometimes referred to allowing dry UF milk (presumably the commercial disappearance of as Native Milk Casein Concentrates, is imported from other countries) in the NFDM, Jesse (Ref. 60) separated the not currently available. However, the definition of milk in cheese would concentrated milk protein imports into availability of the ingredient may be displace purchases of other dairy the following four categories: MPC, driven by outside food manufacturers substitutes that are domestically Casein-MPC, Casein, and Caseinates/ who fractionate milk proteins to harvest produced. A drop in the demand for Other Casein Derivatives. Then, looking milk serum proteins leaving the native milk or NFDM as cheese producers only at the category of MPCs, imports milk casein concentrate for sale to switch to purchasing dry UF milk could increased steadily between 1989 and cheese manufacturers in the near future result in the market price dropping 1997, at a rate of about 4,200 metric tons (Ref. 9). below the support price, thus forcing per year. From 1998 through 2000, Benefits of Option 3: The benefits the government to purchase a larger imports started growing even more from allowing fluid MF milk as an amount of milk. In addition, since dry rapidly, with an average rate of growth ingredient in cheese manufacture are UF milk is much less expensive to at 18,000 metric tons per year (Ref. 60). similar to the benefits from allowing transport than milk and even fluid UF However, 2001 and 2002 saw a reversal fluid UF milk due to similar levels of milk, expanding the use of dry UF milk of this trend, with imports falling from protein, lactose, and moisture (Ref. 63) may increase imports and further 52,900 metric tons in 2000 to 28,500 (see table 1 of this document). There are decrease the demand for domestic milk. metric tons in 2001 (Ref. 57). Estimates other potential benefits from fluid MF As in the case with fluid UF milk, if of 2002 imports were expected to total milk that fluid UF milk does not offer. domestic production of dry UF milk about 35,000 tons, about a 23 percent First, microfilters have larger pore increases as a result of the change in increase (Ref. 60). A news release structures than ultrafilters, allowing definition, any decrease in the domestic published after the second quarter of more whey proteins to pass through the demand for milk resulting from the 2003 by the National Milk Producers membrane. If the cheese producers are production and sale of dry UF milk Federation states that MPC imports were purchasing MF milk, they will have less would be offset by an decrease in the up 39 percent from the first half of 2002 whey to remove in later steps of the supply of milk, as dairies ultrafilter and and approaching year 2000 levels (Ref. cheese-making process. Second, some dry some of their milk instead of selling 61). industry experts believe that MF is the it directly. As a result, the quantity of The impact of these imports increases new direction of cheese fortification milk purchased by the government in significance as USDA purchases more process because it has the potential for would be left unchanged. However, NFDM under the Commodity Credit continuous cheese making without vats unlike fluid UF milk, dry UF milk is Corp. The USDA had 1.2 billion lb of for more varieties of cheese (Refs. 9 and imported from other countries with no NFDM in warehouses, and program cost 64). restrictions on the quantity and under a overruns were almost $3 billion more Costs of Option 3: Because fluid MF very low tariff rate (Ref. 60). The U.S. than its original $1.3 billion estimate in milk is not yet available to cheese Government does not directly support mid-2003 (Ref. 62). The negative impact makers, it is difficult to determine how the price of dry UF milk under the on dairy production in the United States the costs would differ from NFDM. Credit Commodity Corp., purchases; attributable to the MPC imports is Because of the similar process to however, if foreign-produced dry UF uncertain, according to Jesse (Ref. 60) producing fluid UF milk, the costs are milk is substituted in production for somewhere between ‘‘an amount much assumed to also be similar to Option 2. NFDM and other milk products, smaller than government purchases’’ of Option 4: Allow all filtration methods increases in dry UF milk imports would NFDM to an amount that ‘‘exceeds that result in a fluid or dried milk cause government purchases of dairy government purchases, and that excess product to be used in standardized products to increase. If, on the other cheese supplies augmented by MPC and cheese production hand, allowing dry UF milk to be used other milk proteins have depressed the This option would allow milk used in in the production of standardized cheese market.’’ He estimated the production of cheese to be cheese causes domestic manufacturers displacement of NFDM into government supplemented with UF milk as well as of NFDM to produce dry UF milk purchases at almost 430 million lb in milk forms derived from other filtration instead, the amount of government 2002, though he added that his technologies, most notably purchases of NFDM may actually estimates ‘‘very likely err on the high microfiltration, as long as no nonmilk decrease as resources shift to the new side.’’ Bailey (Ref. 56), who separated derived ingredients had been added in product. ‘‘dry whey’’ and ‘‘casein’’ from MPCs, the preparation of these liquid or dried The inconsistency with which the looked at this question from a cost concentrates. This option differs from term MPC is used makes it difficult to angle. He estimated that MPC imports the baseline by substituting both fluid discern how much foreign-produced dry between 1996 and 2000 increased the and dry UF and MF milk for NFDM as UF milk is being imported into FDA’s cost the dairy price support program by the protein standardization ingredient. Operational and Administrative System about $572 million (Ref. 56). As with fluid MF milk, this technology for Import Support (OASIS) database Option 3: Allow all filtration methods and the resulting product, sometimes includes MPC as a separately that result in a fluid milk product to be referred to as Native Milk Casein identifiable product; however, many used in standardized cheese production Concentrates, is not currently available. dried dairy substances other than dry This option would allow fluid UF However, the availability of the UF milk are also included in this milk as well as milk processed with ingredient may be driven by outside

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food manufacturers who fractionate would mirror the Codex general leading to U.S. Government purchases milk proteins to harvest milk serum standard for cheese (Ref. 25). This of domestic dairy products. proteins, leaving the native milk casein option differs from the baseline by D. Summary of Costs and Benefits concentrate for sale to cheese allowing any milk derived ingredient to manufacturers in the near future (Ref. be used as either the sole ingredient or The total annual costs and benefits 9). the protein-standardizing replacement from amending the definition of milk Benefits of Option 4: The benefits of ingredient in cheese production. This used to produce standardized cheeses allowing fluid or dry MF milk as an option would include isolates of casein are uncertain, though FDA does not ingredient in cheese build on the that contain up to 94 percent protein have concerns from a food safety benefits of Option 3, which allows for and little to no lactose. These isolates standpoint. The uncertainty stems from fluid MF milk. In addition to those are not currently manufactured in the several diverse factors: benefits, allowing dry MF milk has United States, but have been used in • The number of plants that would decreased transportation and storage other countries as a fortification implement UF or other filtration costs similar to NFDM and dry UF milk. ingredient (Ref. 9). This option would technology, Costs of Option 4: Because neither also allow for dry blends of different • The number of plants that already fluid nor dry MF milk is available to milk derived ingredients, including use UF technology, cheese producers, we are unable to NFDM, dry UF milk, isolated casein, • The number of plants that already estimate how costs would differ from and whey protein concentrate. use spray-drying technology, NFDM. Dry MF milk, being similar in Benefits of Option 5: The benefits to • The size of the plants that would manufacture to dry UF milk, would be opening the standard to all ‘‘milk and/ decide to invest in new technology, subject to similar costs, including or products obtained from milk’’ are not • The percent of milk that cheese foreign trade and domestic purchase certain, but would allow cheese producers would replace with UF milk adjustments. producers full freedom in choosing in cheese making, and Option 5: Allow all milk and products inputs to maximize their own • Whether UF milk replaces milk or obtained from milk to be used in cheese production yields and profits. NFDM in the production process production, in agreement with the Costs of Option 5: The costs to Table 2 of this document highlights Codex general standard for cheese opening the standard to all ‘‘milk and/ the quantified annual costs and benefits This option would allow milk to be or products obtained from milk’’ are not of Options 1 through 5 using the manufactured with ‘‘milk and/or certain. There may be domestic and assumptions and calculations described products obtained from milk’’ and international market adjustments in the text.

TABLE 2.—COSTS AND BENEFITS SUMMARY

Option 1 Option 2 Option 3 Option 4 Option 5

Annualized $14–$28 million1 $45–$59 million1 Unknown Unknown Unknown Investment $17–$34 million2 $54–$71 million2

Yield Increase $172 million $172 million Unknown Unknown Unknown

Transportation Savings < $9 to $24 mil- > $9 to $24 mil- Similar to Option Unknown lion lion Similar to 2 Option 1

Rennet & Starter Savings $11 million $11 million Unknown Unknown Unknown

Benefits (net savings in production costs) $164–$193 mil- $133–$162 mil- Unknown Unknown Unknown lion1 lion1 $158–$190 mil- $121–$153 mil- lion2 lion2

Government Programs No increase in Potential for in- Unknown Unknown Unknown government crease in gov- purchases or ernment pur- trade impacts chases of NFDM

Costs (change in government program costs) None Uncertain Unknown Unknown Unknown 1 At 3 % interest. 2 At 7 % interest.

FDA does not currently have a best percent) and $153 million ($162 million yields and profits and have the potential estimate on the cost savings of this at 3 percent), respectively. Options 3 to provide benefits to the cheese proposed rule and seeks comment on all through 5 are difficult to quantify based industry in the future. areas of uncertainty listed previously in on the smaller amount of research into IV. Small Entity Analysis this document. FDA believes Options 1 new filtration and separation and 2, if implemented, would lead to technologies in the dairy industry. FDA has examined the economic social benefits potentially as high as These options lead to increasingly implications of this proposed rule as $190 million at a 7 percent annualized greater flexibility for cheese producers required by the Regulatory Flexibility investment rate ($193 million at 3 to maximize their own production Act (5 U.S.C. 601–612). If a rule has a

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significant economic impact on a The Small Business Administration impacted by this proposed rule. The substantial number of small entities, the (SBA) considers a dairy manufacturer, total number of firms listed in table 3 of Regulatory Flexibility Act requires which includes cheese manufacturers, this document is different from earlier agencies to analyze regulatory options to be small if it employs fewer than 500 parts of the analysis because the earlier that would lessen the economic effects workers. Table 3 of this document lists estimates were derived from 2002 USDA of the rule on small entities. FDA finds the dairy manufacturing statistics by data but the most recent Economic that this proposed rule would have a employment size from the U.S. Census Census data available is for 1997. significant economic impact on a Bureau’s 1997 Economics Census for the substantial number of small entities. three industries most likely to be

TABLE 3.–DAIRY MANUFACTURING STATISTICS BY EMPLOYMENT SIZE

Number of Firms with Less Percent of Industry that is Total Number Of Firms than 500 Employees ‘‘Small’’

Cheese Manufacturing 524 518 98 .9

Fluid Milk Manufacturing 612 605 98 .9

Dry, Condensed, and Evaporated Dairy Manufac- turing 213 208 97 .7 Source: U.S. Census Bureau, 1997 Economic Census June 24, 1999 Manufacturing—Industry Series.

Based on the SBA definition of small requirement of production from 100 enable small milk processors and cheese business for the dairy manufacturing cows. According to the National Milk producers to ship ingredients over industries, almost all dairy and cheese Producers Federation (NMPF) Web site, longer distances to meet manufacturing manufacturers qualify. However, the average U.S. dairy cow produces needs. Blayney and Manchester found that about 7 gallons of milk per day (Ref. 66). large dairy manufacturing companies To calculate the minimum weight to V. Unfunded Mandates and cooperatives, those percent with make UF technology financially Title II of the Unfunded Mandates food and nonfood sales in 1998 of $800 feasible, we multiplied 100 cows by 7 Reform Act of 1995 (Public Law 104–4) million or more, accounted for almost gallons per day by 365 days per year to requires cost-benefit and other analyses 70 percent of the industry (Ref. 65). Of get 255,500 gallons per year. We then before any rule making if the rule would this 70 percent, large proprietary multiplied the product by 8.62 lb per include a ‘‘Federal mandate that may companies accounted for 42 percent and gallon (NMPF Web site) to get 2,202,410 large cooperatives for 27 percent. The lb per year. FDA seeks comment on the result in the expenditure by State, local, remainder of the industry was divided financial burden investing in UF and tribal governments, in the aggregate, between smaller companies, including technology imposes on dairy processors or by the private sector, of $100,000,000 cooperatives (Ref. 65). and cheese manufacturers, particularly or more (annually adjusted for inflation) The dairy industry in the United small entities. in any 1 year.’’ The current inflation- adjusted statutory threshold is $113 States exhibits substantial economies of In addition, small milk operations million. FDA has determined that this scale and, historically, small dairy farms combined in cooperatives may be able proposed rule does not constitute a have found ways of combining their to gain additional benefits from UF resources to be able to compete in the technology if they are able to market significant rule under the Unfunded industry. The 1960s saw a wave of their products in a larger geographic Mandates Reform Act. mergers and consolidations, leading to region as a result of the lower shipping VI. Small Business Regulatory almost a complete conversion to ‘‘bulk costs. This issue may be important if Enforcement Fairness Act of 1996 handling and processing’’ of milk at dairies develop in remote locations (SBREFA) Major Rule plants in the 1970s. This trend has around the country as Mermelstein (Ref. continued with ever-decreasing 48) has suggested, or if there is a The SBREFA (Public Law 104–121) numbers of processors handling ever- geographical shift in the production of defines a major rule for the purpose of increasing volumes of milk (Ref. 47). either cheese or its components. Milk congressional review as having caused FDA believes that if cheese production in the West, as a percentage or being likely to cause one or more of manufacturers demand UF milk, dairy of total U.S. production, has increased, the following: an annual effect on the cooperatives will adjust in order to keep and there is some concern that economy of $100 million; a major themselves and their individual Midwestern cheese producers will increase in cost or prices; significant members viable in the market. In 1997, become ‘‘milk-starved’’ (Ref. 49). adverse effects on competition, the last year the USDA did a National Agricultural Statistics Services employment, productivity, or comprehensive survey of dairy data over the past 9 years has shown a innovation; or significant adverse effects cooperatives, dairy cooperatives significant increase in milk production on the ability of United States-based handled 83 percent of all milk delivered in the West, up to 38 percent of the U.S. enterprises to compete with foreign- to plants and dealers in the United total in 2001 and 2002. However, these based enterprises in domestic or export States, and 98 percent of the milk data also show a significant increase in markets. In accordance with the received by cooperatives came directly cheese production in the Western States SBREFA, the Office of Management and from member producers (Ref. 53). These over this same time period, up to 37 cooperatives are diverse in size, but the percent in 2001 and 38 percent in 2002 Budget (OMB) has determined that this average handles 564 million lb (Ref. 67). The significantly lower proposed rule is a major rule for the annually, well above the 2.2 million lb hauling costs for filtered milk may purpose of congressional review.

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VII. Federalism In conclusion, FDA has determined 8. Letter to Mr. Clay Hough, International that the preemptive effect of the Dairy Foods Association from FDA, April 6, FDA has analyzed this proposed rule proposed rule would be consistent with 2005. in accordance with the principles set Executive Order 13132. 9. Babano, D.M., ‘‘ Making Cheese From forth in Executive Order 13132. FDA Higher Solids Milk: Advantages and Pitfalls,’’ has determined that the rule would have VIII. Environmental Impact Proceedings of the 37th annual Marschall cheese seminar, Visalia, CA, 2000. a preemptive effect on state law. Section We have determined under 21 CFR 10. Mistry, V.V. and J-L. Maubois, 4 (a) of the Executive Order requires 25.32(p) that this action is of the type ‘‘Application of Membrane Separation agencies to ‘‘construe***a Federal that does not individually or Technology to Cheese Production,’’ Cheese: Statute to preempt State law only where cumulatively have a significant effect on Chemistry, Physics and Microbiology : the statute contains an express the human environment. Therefore, General Aspects, 3rd edition (Volume 1), Eds: preemption provision, or there is some neither an environmental assessment Fox, P.F., P.L.H McSweeney, T.M. Cogan, other clear evidence that the Congress nor an environmental impact statement and T.P. Guinee, Elsevier Academic Press, intended preemption of State law, or London. pp. 261–285. is required. 11. Acharya, M.R. and V.V. Mistry, where the exercise of State authority IX. Paperwork Reduction Act of 1995 ‘‘Comparison of Effect of Vacuum-Condensed conflicts with the exercise of Federal and Ultrafiltered Milk on Cheddar Cheese,’’ authority under the Federal statute.’’ FDA tentatively concludes that this Journal of Dairy Science, 87:4004–4012, Section 403A of the act (21 U.S.C. 343– proposed rule contains no collection of 2004. 1) is an express preemption provision. information. Therefore, clearance by 12. Hydamaka, A.W., R.A. Wilbey, M.J. Section 403A(a)(1) provides that: OMB under Paperwork Reduction Act of Lewis, et al., ‘‘Manufacture of Heat and Acid * * * no State or political subdivision of 1995 is not required. Coagulated Cheese From Ultrafiltered Milk a State may directly or indirectly establish Retentates,’’ Food Research International, under any authority or continue in effect as X. Comments 34:197–205, 2001. to any food in interstate commerce-(1) any Interested persons may submit to the 13. Rodriguez, J., T. Requena, J. Fontecha, requirement for a food which is the subject et al., ‘‘Effect of Different Membrane Division of Dockets Management (see Separation Technologies (Ultrafiltration and of a standard of identity established under ADDRESSES) written or electronic section 401 that is not identical to such Microfiltration) on the Texture and comments regarding this document. Microstructure of Semihard Low-Fat standard of identity or that is not identical Submit a single copy of electronic Cheeses,’’ Journal of Agricultural and Food to the requirement of section 403(g).*** comments or two paper copies of any Chemistry, 47:558–565, 1999. This proposed rule makes changes to mailed comments, except that 14. Kosikowski, F.V., A.R., Masters, and the general provisions related to the individuals may submit one paper copy. V.V. Mistry, ‘‘Cottage Cheese From Retentate- standards of identity for cheeses and Comments are to be identified with the Supplemented Skim Milk,’’ Journal of Dairy related cheese products. Although this docket number found in brackets in the Science, 68:541–547, 1985. rule would have a preemptive effect in 15. Kealey, K.S. and F.V. Kosikowski, heading of this document. Received ‘‘Cottage Cheese From Ultrafiltered Skim that it would preclude States from comments may be seen in the Division Milk Retentates in Industrial Cheese promulgating requirements for of Dockets Management between 9 a.m. Making,’’ Journal of Dairy Science, 69:1479– standardized cheese and cheese and 4 p.m., Monday through Friday. 1483, 1986. products that are not identical to the 16. Johnson, M., ‘‘Standardization of Milk standards as amended by this proposal, XI. References Using Cold Ultrafiltration Retentates for the this preemptive effect is consistent with The following references have been Manufacture of Swiss Cheese,’’ Unpublished what Congress set forth in section 403A placed on public display in the Division data, 2004. of the act. of Dockets Management (see ADDRESSES) 17. Guinee, T.P., P.D. Pudja, W.J. Reville, and may be seen by interested persons et al., ‘‘Composition, Microstructure and Section 4(c) of the Executive Order Maturation of Semi-Hard Cheeses From High further requires that ‘‘any regulatory between 9 a.m. and 4 p.m., Monday Protein Ultrafiltered Milk Retentates With preemption of State law shall be through Friday. (FDA has verified the Different Levels of Denatured Whey Protein,’’ restricted to the minimum level Web site addresses, but FDA is not International Dairy Journal, 5:543–568, 1995. necessary’’ to achieve the regulatory responsible for any subsequent changes 18. Oommen, B.S., V.V. Mistry, and M.G. objective. Under section 401 of the act to the Web sites after this document Nair, ‘‘Effect of Homogenization of Cream on publishes in the Federal Register.) Composition, Yield, and Functionality of (21 U.S.C. 341), ‘‘[w]henever in the Cheddar Cheese Made From Milk judgment of the Secretary such action 1. Cheryan, M., Ultrafiltration and Microfiltration Handbook, 2d ed., CRC Press Supplemented With Ultrafiltered Milk,’’ Lait, will promote honesty and fair dealing in LLC, Boca Raton, FL, chapters 1 and 3 and 80:77–91, 2000. the interest of consumers, he shall pp. 349–369, 1998. 19. Poduval, V.S. and V.V. Mistry, promulgate regulations fixing and 2. Rosenberg, M., ‘‘Current and Future ‘‘Manufacture of Reduced Fat Mozzarella establishing for any food***a Applications for Membrane Processes in the Cheese Using Ultrafiltered Sweet Buttermilk reasonable definition and standard of Dairy Industry,’’ Trends in Food Science and and Homogenized Cream,’’ Journal of Dairy identity.***’’ Further, section 4(e) Technology, 6:12–19, 1995. Science, 82:1–9, 1999. provides that ‘‘when an agency proposes 3. Smith, K.E., Background on Milk Protein 20. Raval, D.M. and V.V. Mistry, ‘‘Application of Ultrafiltered Sweet to act through adjudication or Products, Dairy Proteins, prepared by the Wisconsin Center for Dairy Research and the Buttermilk in the Manufacture of Reduced rulemaking to preempt State law, the Wisconsin Milk Marketing Board, 2001. Fat Process Cheese,’’ Journal of Dairy agency shall provide all affected State 4. GAO report, ‘‘Dairy Products: Imports, Science, 82:2334–2343, 1999. and local officials notice and an Domestic Production, and Regulation of 21. Raphaelides, S., K.D. Antoniou, and D. opportunity for appropriate Ultra-filtered Milk,’’ March, GAO–01–326, Petridis, ‘‘Texture Evaluation of Ultrafiltered participation in the proceedings.’’ FDA 2001. Teleme Cheese,’’ Journal of Food Science, is providing an opportunity for State 5. Letter to FDA from Mr. Ted Jacoby, Jr., 60:1211–1215, 1995. and local officials to comment on this T.C. Jacoby & Company, Inc., May 1, 1996 22. Lelievre, J. and R.C. Lawrence, 6. Letter to Mr. Ted Jacoby, Jr., T.C. Jacoby ‘‘Manufacture of Cheese From Milk rulemaking. For the reasons set forth & Company, Inc., from FDA, October 21, Concentrated by Ultrafiltration,’’ Journal of above, the agency believes that it has 1996. Dairy Research, 55:465–478, 1988. complied with all of the applicable 7. Letter to Mr. F. Tracy Schonrock, USDA 23. Spangler, P.L., L.A. Jensen, C.H. requirements under the Executive order. from FDA, October 21, 1999. Amundson, et.al., ‘‘Gouda Cheese Made

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From Ultrafiltered Milk: Effects of 44. Johnson and Wendorff, ‘‘Making 63. Dairy Management, Inc., Concentration Factor, Rennet Concentration, Cheese With UF Raw Milk,’’ Dairy Pipeline, ‘‘Opportunities for Membrane Filtration of and Coagulation Temperature,’’ Journal of 10(2):5–7, 1998. Milk,’’ Innovations in Dairy, January 2000. Dairy Science, 73:1420–1428, 1990. 45. USDA, National Agricultural Statistics 64. Berry, D., Microfiltering Milk in the 24. Eckner, K.F. and E.A. Zottola, ‘‘The Services, Dairy Products 2002 Summary, February 2001 ed. of Lab Talk, accessed May Behavior of Selected Microorganisms During 2003. 20, 2002. (http://www.dairyfoods.com/ the Manufacture of High Moisture Jack 46. USDA, ‘‘Milk Production,’’ National articles/2001/0201/0201lab.htm), 2001. Cheeses From Ultrafiltered Milk,’’ Journal of Agricultural Statistics Services, Agricultural 65. Blayney, D.P. and A.C. Manchestern, Dairy Science, 74:2820–2830, 1991. Statistics Board, released February 14, 2003. Large companies active in changing dairy 25. Codex General standard for Cheese, 47. Liebrand, C., ‘‘Structural Change in the industry. Food Review 23(2):8–13, 2000. Codex Stan A–6–1978, Rev. 1–1999, Dairy Cooperative Sector, 1992–2000,’’ 66. NMPF FAQ. 2003. Accessed October 6, amended 2003. USDA, Rural Business-Cooperative Service, 2003 (http://www.nmpf.org/faq), 2003. 26. Codex Group Standard for Cheeses in RBS Research Report 187, 2001. 67. USDA, National Agricultural Statistics Brine, Codex Stan 208–1999, amend. 1–2001. 48. Mermelstein, N.H., ‘‘Concentrating Services, Dairy Product 1994 through 2003 27. Codex International Individual Milk,’’ Food Technology, 56(3):72–74, 78, and Milk Production 1994 through 2003. Standard for Cottage Cheese, Including 2002. List of Subjects in 21 CFR Part 133 Creamed Cottage Cheese, Codex Stan C–16– 49. Fassbender, R. Using Cold Ultrafiltered 1968. Milk in Cheesemaking, Proceedings of the Cheese, Food grades and standards, 28. Codex International Individual 38th Annual Marschall Cheese Seminar, Food labeling. Standard for Cream Cheese (Rahmfrischkase), Visilia, CA, accessed July 16, 2003 (http:// Codex Stan C–31–1973. Therefore, under the Federal Food, marschall.com/marschall/proceed/ 29. Codex International Standard for Extra Drug, and Cosmetic Act and under index.htm), 2001. Hard Grating Cheese, Codex Stan C–35–1978. authority delegated to the Commissioner 50. Dairy Management, Inc., ‘‘Nonfat Dry 30. Codex Group Standard for Unripened Milk Ingredients,’’ DMI–A8040–0500–01, of Food and Drugs and re-delegated to Cheese Including Fresh Cheese, Codex Stan 2000. the Director of the Center for Food 221–2001. 51. Slack, A.W., C.H. Amundson, and C.G. Safety and Applied Nutrition, it is 31. Codex General Standard for Named Hill, Jr., ‘‘On-farm Ultrafiltration of Milk: Part proposed that 21 CFR part 133 be Variety Process(ed) Cheese and Spreadable 2. Economic Analysis,’’ Process Process(ed) Cheese, Codex Stan A–8(a)-1978. amended as follows: Biochemistry, 17:23–33, 1982. 32. Codex General Standard for Process(ed) 52. Sheehan, J., Memo to file, September 1, PART 133—CHEESES AND RELATED Cheese and Spreadable Process(ed) Cheese, Codex Stan A–8(b)-1978. 2005. CHEESE PRODUCTS 53. USDA, Cooperatives in the dairy 33. Codex General Standard for Process(ed) 1. The authority citation for 21 CFR Cheese Preparations (Process(ed) Cheese industry. Rural Business—Cooperative Food and Process(ed) Cheese Spread), Codex Service, Cooperative Information Report 1, part 133 continues to read as follows: Stan A–8(c)-1978. Section 16, released July 2002. Authority: 21 U.S.C. 321, 341, 343, 348, 34. Codex Standard for Whey Cheese, 54. Barske, L.J., Milk hauling charges in the 371, 379e. upper Midwest marketing area, May 2001, Codex Stan A–7–1978, Rev. 1–1999. 2. Section 133.3 is amended by Federal Milk Market Administrator’s Office, 35. Miller, G.D., J.K. Jarvis, and L.D. revising paragraphs (a) and (b) and by McBean, Handbook of Dairy Foods and Staff Paper 02–01, 2002. 55. USDA, Economic Research Service, adding new paragraphs (f) and (g) to Nutrition, second edition. CRC Press LLC, read as follow: Boca Raton, FL, pp. 6–16, 2000. ‘‘Food Marketing and Price Spreads: Farm to Retail Price Spreads for Individual Food 36. Rattray, W. and P. Jelen, ‘‘Protein § 133.3 Definitions. Standardization of Milk and Dairy Products,’’ Items,’’ briefing room, accessed October 17, Trends in Food Science and Technology, 2003 (http://ers.usda.gov/briefing/ (a) Milk means the lacteal secretion, 7:227–234, 1996. foodpricespreads/spreads/table1.htm). practically free from colostrum, 37. Dairy Management, Inc., 56. Bailey, K.W., ‘‘U.S. Market Structure: obtained by the complete milking of one ‘‘Opportunities for Membrane Filtration of The Dairy Industry in the 21st Century,’’ or more healthy cows, which may be Milk. Innovations in Dairy,’’ Dairy Industry Paper presented at the 66th Annual Meeting clarified and may be adjusted by Technology Review, 2000. of the International Association of Milk separating part of the fat therefrom; Control Agencies, Calgary, Alberta, Canada, 38. Mehaia, M.A. and S.M. El-Khadragy, concentrated milk, reconstituted milk, ‘‘Physicochemical Characteristics and Rennet July 14–17, 2002. 57. Bailey, K.W., ‘‘Milk Protein and dry whole milk. Water, in a Coagulation Time of Ultrafiltered Goat Milk,’’ sufficient quantity to reconstitute Food Chemistry, 62:257–263, 1998. Concentrate Imports: Implications for the 39. Green, M.L., J. Scott, M. Anderson, et North American Dairy Industry,’’ Advances concentrated and dry forms, may be al., ‘‘Chemical Characterization of Milk in Dairy Technology, 15:137, 2003. added. For the purposes of this part, Concentrated by Ultrafiltration,’’ Journal of 58. The Economics of Drying, On-line wherever the term ‘‘milk’’ appears in the Dairy Science, 51:267–278, 1984. article on the Chemical Engineer’s Resource individual standards for cheeses and 40. Wisconsin Center for Dairy Research Center, accessed September 30, 2003 (http:// related cheese products, ultrafiltered and the Wisconsin Milk Marketing Board, geocities.com/chemforum). milk as described in paragraph (f) of this Dairy Proteins. Accessed September 26, 2003 59. Sheehan, J., Memo to file, September 1, section, may be used. 2005. (http://www.cdr.wisc.edu/CDRWEBPa.nsf), (b) Nonfat milk means skim milk, 2001. 60. Jesse, E., ‘‘U.S. Imports of Concentrated 41. American Dairy Products Institute, Milk Proteins: What We Know and Don’t concentrated skim milk, reconstituted ‘‘Dry milk products—Utilization & Know?’’ Marketing and Policy Briefing Paper skim milk, and nonfat dry milk. Water, Production Trends,’’ 2002. #80, 2003. in a sufficient quantity to reconstitute 42. Moran, J.W., G.W. Trecker, and S.P. 61. NMPF News Release Latest import concentrated and dry forms, may be Monckton, Continuous Manufacture of watch newsletter sees MPC imports increase, added. For the purposes of this part, Process Cheese, US Patent 6183805, 2001. Surge in Milk Protein Concentrate, Casein wherever the term ‘‘nonfat milk’’ 43. Voutsinas, L.P., C.M. Katsiari, C.P. Again Points Out Need for Tariff Bills, appears in the individual standards for Pappas, et al., ‘‘Production of Brined Soft accessed September 9, 2003 (http:// cheeses and related cheese products, Cheese From Frozen Ultrafiltrered Sheep’s www.aae.wisc.edu/future/), 2003. ultrafiltered nonfat milk as described in Milk. Part 1. Physicochemical, 62. Kampert, P., ‘‘Yogurt Proposal Has Microbiological and Physical Stability Dairy Farmers Sour, They Say Rules on paragraph (g) of this section, may be Properties of Concentrates,’’ Food Chemistry, Imported Protein A Threat,’’ Chicago used. 52:227–233, 1995. Tribune, September 14, 2003. * * * * *

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(f) Ultrafiltered milk means raw or receives adverse comments, we will provide it in the body of your comment. pasteurized milk that is passed over one withdraw the direct final rule and will If you send an e-mail comment directly or more semipermeable membranes to respond to all public comments in a to EPA without going through RME or partially remove water, lactose, subsequent final rule based on this regulations.gov, your e-mail address minerals, and water-soluble vitamins proposed rule. EPA will not institute a will be automatically captured and without altering the casein:whey protein second comment period on this action. included as part of the comment that is ratio of the milk and resulting in a Any parties interested in commenting placed in the public docket and made liquid product. on this action should do so at this time. available on the Internet. If you submit (g) Ultrafiltered nonfat milk means DATES: Written comments must be an electronic comment, EPA raw or pasteurized nonfat milk that is received on or before November 18, recommends that you include your passed over one or more semipermeable 2005. name and other contact information in membranes to partially remove water, the body of your comment and with any ADDRESSES: Submit comments, lactose, minerals, and water-soluble disk or CD–ROM you submit. If EPA identified by Regional Material in vitamins without altering the cannot read your comment due to EDocket (RME) ID No. R05–OAR–2005– casein:whey protein ratio of the nonfat technical difficulties and cannot contact IN–0003 by one of the following milk and resulting in a liquid product. you for clarification, EPA may not be methods: able to consider your comment. Dated: October 7, 2005. Federal eRulemaking Portal: http:// Electronic files should avoid the use of Leslye M. Fraser, www.regulations.gov. Follow the on-line special characters, any form of Director, Office of Regulations and Policy, instructions for submitting comments. encryption, and be free of any defects or Center for Food Safety and Applied Nutrition. Agency Web site: http:// viruses. For additional instructions on [FR Doc. 05–20874 Filed 10–18–05; 8:45 am] docket.epa.gov/rmepub/. RME, EPA’s submitting comments, go to section I(B) BILLING CODE 4160–01–S electronic public docket and comment of the SUPPLEMENTARY INFORMATION system, is EPA’s preferred method for section of this document. receiving comments. Once in the Docket: All documents in the ENVIRONMENTAL PROTECTION system, select ‘‘quick search,’’ then key electronic docket are listed in the RME AGENCY in the appropriate RME Docket index at http://www.epa.gov/rmepub/. identification number. Follow the Although listed in the index, some 40 CFR Part 52 online instructions for submitting information is not publicly available, comments. [R05–OAR–2005–IN–0003; FRL–7981–9] i.e., CBI or other information whose E-mail: [email protected]. disclosure is restricted by statute. Approval and Promulgation of Air Fax: (312) 886–5824. Publicly available docket materials are Quality Implementation Plans; Indiana Mail: You may send written available either electronically in RME or comments to: in hard copy at Environmental AGENCY: Environmental Protection John M. Mooney, Chief, Criteria Protection Agency, Region 5, Air and Agency (EPA). Pollutant Section, (AR–18J), U.S. Radiation Division, 77 West Jackson ACTION: Proposed rule. Environmental Protection Agency, 77 Boulevard, Chicago, Illinois 60604. West Jackson Boulevard, Chicago, (Please telephone Julie Henning at (312) SUMMARY: EPA is proposing to approve Illinois 60604. 886–4882 before visiting the Region 5 a request from the Indiana Department Hand delivery: Deliver your Office.) of Environmental Management (IDEM) comments to: John M. Mooney, Chief, to revise the Indiana State Criteria Pollutant Section (AR–18J), U.S. FOR FURTHER INFORMATION CONTACT: Julie Implementation Plan (SIP) in three Environmental Protection Agency, Henning, Environmental Protection areas: To amend the definition of Region 5, 77 West Jackson Boulevard, Specialist, State and Tribal Planning ‘‘particulate matter,’’ and ‘‘ambient air 18th floor, Chicago, Illinois 60604. Section, Air Programs Branch (AR–18J), quality standards,’’ add new rules Such deliveries are only accepted USEPA, Region 5, 77 West Jackson consistent with these amended during the Regional Office’s normal Boulevard, Chicago, Illinois 60604, definitions, and amend rules pertaining hours of operation. The Regional (312) 886–4882. [email protected]. SUPPLEMENTARY INFORMATION: to sulfur dioxide (SO2) and nitrogen Office’s official hours of business are dioxide (NO2) ambient standards; to Monday through Friday, 8:30 a.m. to I. General Information update the references to the Code of 4:30 p.m. excluding federal holidays. A. What Should I Consider as I Prepare My Federal Regulations (CFR) from the 2000 Instructions: Direct your comments to Comments for EPA? edition to the 2002 edition; and to add RME ID No. R05–OAR–2005–IN–0003. II. What Action Is EPA Taking Today? ‘‘credible evidence provisions’’ into EPA’s policy is that all comments III. Where Can I Find More Information About This Proposal and the state rules consistent with federal received will be included in the public Corresponding Direct Final Rule? requirements. docket without change, including any In the final rules section of this personal information provided, unless I. General Information Federal Register, EPA is approving the the comment includes information SIP revision as a direct final rule claimed to be Confidential Business A. What Should I Consider as I Prepare without prior proposal, because EPA Information (CBI) or other information My Comments for EPA? views this as a noncontroversial whose disclosure is restricted by statute. 1. Submitting CBI. Do not submit CBI revision and anticipates no adverse Do not submit information that you to EPA through RME, regulations.gov or comments. A detailed rationale for the consider to be CBI or otherwise e-mail. Clearly mark the part or all of approval is set forth in the direct final protected through RME, regulations.gov, the information that you claim to be rule. If we do not receive any adverse or e-mail. The EPA RME Web site and CBI. For CBI information in a disk or CD comments in response to these direct the Federal regulations.gov Web site are ROM that you mail to EPA, mark the final and proposed rules, we do not ‘‘anonymous access’’ systems, which outside of the disk or CD ROM as CBI contemplate taking any further action in means EPA will not know your identity and then identify electronically within relation to this proposed rule. If EPA or contact information unless you the disk or CD ROM the specific

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