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Preference for 'Natural' Boosts Annatto Extract

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Preference for 'Natural' Boosts Annatto Extract Volume 36 September 16, 2016 Number 35 Preference for ‘natural’ boosts Like us on Facebook and follow us on Twitter! annatto extract demand, price A By Rena Archwamety proportion of the world’s an- and certain snacks,” says Camp- lation of its Kraft Macaroni & natto production comes from bell Barnum, vice president of Cheese, replacing synthetic INSIDE MADISON, Wis. — Annatto, the collection of seeds from branding and market develop- colors with colors derived the orange-hued extract from small trees and bushes planted ment at global color provider from annatto and other natural ✦ Prolamina completes seeds of the Bixa orellana tree on family farms. Key markets D.D. Williamson (DDW). “Nor- sources. This greatly increased plant renovation. grown in equatorial regions, from which annatto seeds are bixin is used in natural cheeses the demand for annatto, con- For details, see page 3. has been widely used as a color- sourced include Brazil, Peru, like Cheddar, Red Leicester or tributing to rising prices. ing and spice for centuries and Kenya, India and the Philip- Gouda, vanilla ice cream, peach “Because of the size and ✦ Guest column: as a cheese pigment since the pines. yogurt, chocolate drink mix and scale of these major brands, The ‘longest’ participant late 1800s. Its popularity con- “Annatto is an ancient seed egg substitutes.” this does change the amount in dairy: the EU. tinues to fl ourish, especially as that has been used for a very The use of annatto origi- of supply needed from the For details, see page 4. food companies recently have long time, all the way back to nated as a way to achieve a annatto industry,” Steffensen ✦ Retail WATCH Exclusive: started seeking more natural local tribes using it for face consistent color for cheese, says. “With consumers being BelGioioso moves ingredients due to increased painting and the coloring of according to David Potter, vice more concerned than ever with forward with classic consumer demand. clothes,” says Christian Hjor- president and technical man- what they eat, the demand for cheeses, new creations. Global culture and color tholm Steffensen, marketing ager of Madison, Wisconsin- natural pigments like annatto For details, see page 5. supplier Chr. Hansen has been manager and strategic account based The Dairy Connection, will most likely only go up from supplying annatto colors for manager, Chr. Hansen. an ingredient supplier to small- here.” ✦ House ag committee the cheese and dairy industry Steffensen adds that an- scale cheesemakers. He adds that there may be holds hearing on since 1876, two years after the natto is an affordable and “In the winter it would be even more demand in the future trade with Cuba. company was founded. The widely used natural coloring for very white, and in the summer, as other leading food manufac- For details, see page 12. company notes that the major cheese and other food products when the cows were out on turers such as Mars, General in the United States and most pasture, there was more beta Mills, Kellogg’s and others also parts of the world. carotene in the milk, producing have committed to converting “It’s a relatively inexpensive a richer cheese color,” Potter to natural colors, potentially Global dairy groups seek natural color,” he says. “Many says. “When marketing it on a increasing demand for annatto natural colors are quite ex- large scale, they wanted more of in the confectionery, cereal and WTO action against Canada pensive compared to artifi cial a standardized color approach.” other industries. colors. Annatto is an exception, Potter adds that annatto DDW notes that with the WASHINGTON — Dairy organizations in the United States, Australia, due to its large tradition and tends to be used more in Ched- increased demand, annatto the European Union, Mexico and New Zealand this week called for supply network.” dar in the Midwest, while more supply in the last 24 months has government offi cials to initiate a World Trade Organization (WTO) There are two primary types Cheddars on the East and West gone from OK to fi nely balanced dispute settlement proceeding against Canada regarding recent ac- of annatto coloring: bixin, coasts are white. Annatto also is to tight. Prices currently are tions they say will restrict dairy trade. which is oil-soluble, and nor- used more commonly in barrel higher than they have been in In a joint letter sent this week to trade and agriculture offi cials in bixin, which is water-soluble. cheese and shreds. fi ve to six years. their respective countries, the groups say Canada’s increasingly pro- “The food industry uses • Natural demand “On a year-to-year basis, we tectionist policies violate “international trade obligations, hold out the bixin for things like butter, At the beginning of this year, have seen growth in annatto prospect of trade diversion with the attendant global price depressing processed cheese, popcorn oil Kraft Heinz changed the formu- Turn to ANNATTO, page 10 a impacts and are in confl ict with the principles of free markets and fair and transparent trade.” The U.S. groups, including National Milk Producers Federation (NMPF), the U.S. Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA), oppose a Canadian agreement in principle reached High supply leads to lower Continental Dairy earlier this year between Canada’s dairy producers and processors. (See to add buttermilk “Canada increases butter, SMP support prices; producers, processors USDA cheese price forecast powder, butter agree on new strategy” in the July 22, 2016, issue of Cheese Market News.) WASHINGTON — The 2016 and 2017 forecasts for cheese and The agreement will, among other things, establish a new ingredient butter prices are lowered in USDA’s most recent “World Agricul- COOPERSVILLE, Mich. — milk class to be priced at the lowest of the U.S., EU and Oceania price tural Supply and Demand Estimates” report, released this week, Continental Dairy Facilities for solids-non-fat (SNF) for seven years, the letter notes. This provision as supplies remain high. Meanwhile, prices for nonfat dry milk LLC, Coopersville, Michi- provides both an incentive to substitute those ingredients for their im- (NDM) and whey are forecast higher as the global supply tightens gan, has announced a $50 ported counterparts and a subsidy on the production of the end product and demand strengthens. million expansion project containing those ingredients, violating Canada’s obligations under a Cheese now is projected to average $1.600-$1.620 per pound for butter and buttermilk number of WTO and North America Free Trade Agreement (NAFTA) in 2016, down from $1.610-$1.630 in last month’s report. In 2017, powder at its Coopersville provisions, the letter says. The groups also argue that Canada’s actions USDA forecasts cheese will average $1.605-$1.705, down from its plant. The expansion will would undermine the intent of the pending Trans-Pacifi c Partnership forecast of $1.615-$1.715 last month. create 10 new full-time jobs (TPP) and the EU-Canada Comprehensive Economic and Trade Agree- Butter now is forecast to average $2.080-$2.120 in 2016, down at the dairy. ment (CETA). If ratifi ed, Canada’s agreement would take effect Nov. 1. from the forecast range of $2.140-$2.180 in last month’s report. Continental Dairy Facili- The dairy organizations in the letter request the authorities of Australia, In 2017, USDA forecasts butter will average in the $1.955-$2.085 ties LLC was established in New Zealand, Mexico, the United States and the European Commission range. 2012 and is owned by Select a Turn to CANADA, page 10 Turn to WASDE, page 10 a Turn to EXPANSION, page 10 a © 2016 CHEESE MARKET NEWS® — This is Cheese Market News’ E-subscription and may not be forwarded to anyone other than the intended paid subscriber without the express permission of Cheese Market News (For more information, contact [email protected]) 2 CHEESE MARKET NEWS® — September 16, 2016 MARKET INDICATORS Chicago Mercantile Exchange Cash prices for the week ended September 16, 2016 CHEESE FUTURES for the week ending September 15, 2016 (Listings for each day by month, settling price and open interest) Monday Tuesday Wednesday Thursday Friday Sept. 12 Sept. 13 Sept. 14 Sept. 15 Sept. 16 Fri., Sept. 9 Mon., Sept. 12 Tues., Sept. 13 Wed., Sept. 14 Thurs., Sept. 15 SEP16 1.768 3,843 1.755 3,825 1.758 3,816 1.758 3,795 1.755 3,772 Cheese Barrels OCT16 1.756 3,348 1.728 3,375 1.735 3,378 1.725 3,344 1.729 3,328 Price $1.5700 $1.5500 $1.5275 $1.5200 $1.4800 NOV16 1.741 3,625 1.712 3,656 1.717 3,666 1.719 3,657 1.723 3,663 Change -3 1/2 -2 -2 1/4 -3/4 -4 DEC16 1.697 3,400 1.681 3,427 1.681 3,434 1.681 3,423 1.690 3,424 JAN17 1.670 1,385 1.663 1,391 1.668 1,394 1.669 1,418 1.670 1,427 Cheese 40-lb. Blocks FEB17 1.670 1,220 1.668 1,232 1.672 1,238 1.672 1,266 1.673 1,292 Price $1.6500 $1.6650 $1.6700 $1.6700 $1.6500 MAR17 1.675 1,263 1.674 1,276 1.675 1,280 1.678 1,305 1.678 1,326 APR17 1.678 1,090 1.677 1,101 1.682 1,104 1.682 1,124 1.682 1,124 Change -6 +1 1/2 +1/2 NC -2 MAY17 1.698 1,063 1.698 1,067 1.698 1,069 1.698 1,089 1.698 1,089 JUN17 1.716 890 1.714 897 1.712 899 1.712 919 1.715 919 Weekly average (Sept.
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