Analysts Question Whether U.S. Milk Production Will Slow

Scan this code for breaking Analysts question whether news and the latest markets! U.S. milk production will slow A By Alyssa Sowerwine on page 11.) April 2011 and up 5,000 head 1,000 head from the previous Analysts note that this is a from March 2012. Production month. Production per cow in INSIDE MADISON, Wis. — The lat- smaller year-over-year increase per cow in the United States Wisconsin in April averaged est milk production report in production levels compared is estimated to have averaged 1,785 pounds, 55 pounds more Guest column: released by USDA late last with previous months’ reports. 1,854 pounds in April, 40 than a year earlier. ‘Changing the game.’ week shows a year-over-year “The increase year-over-year pounds more than a year earlier. Rounding out the top ﬁve increase in the 23 major milk- is smaller than the 4-percent in- Analysts also note that U.S. milk-producing states in April

For details, see page 4. producing states slightly under creases we’ve been seeing, but milk production increased 0.4 were New York with 1.12 billion Face Rock Creamery analysts’ expectations, leaving these are still strong production percent in April vs. March 2012, pounds, up 3.6 percent from a to build facility at former many wondering if production performances year over year,” on a daily average basis, a frac- year earlier; Idaho with 1.11 Bandon Cheese site. levels will begin to slow in the says Mike North, senior risk tion of the 1.6-percent gain in billion pounds, up 2.9 percent; For details, see page 5. months ahead. management advisor with First March vs. February 2012. and Pennsylvania with 909.0 Milk production in the 23 Capitol Ag, Platteville, Wis. Analysts say that the April million pounds, down 1.0 per- WDPA names its 2012 major milk-producing states March revised milk produc- production report indicates cent. Pennsylvania was the scholarship winners. during April totaled 15.98 bil- tion in the 23 major states, at that dairy producers are curbing only top milk-producing state For details, see page 8. lion pounds, up 3.3 percent from 16.45 billion pounds, was up production by changing feed ra- to see a decrease in production April 2011, according to pre- 4.3 percent from March 2011. tions and production practices and overall cow numbers over Natural cheese stocks total liminary data recently released The March revision represents that result in lower output per the previous year, notes Bill 1.02 billion pounds, up 2 by USDA’s National Agricultural a decrease of 5 million pounds, cow rather than a significant Brooks, an economist with percent from month earlier. Statistics Service (NASS). (All or less than 0.1 percent, from reduction in the dairy herd. FCStone LLC/Downes-O’Neill. For details, see page 11. figures are rounded. Please see last month’s preliminary pro- California led the nation’s He adds that Idaho also posted CMN’s Milk Production chart duction estimate. milk production with 3.63 bil- a 4,000-head decline in milking Production per cow in the lion pounds, up 3.1 percent cows last month. 23 major states averaged 1,875 from a year earlier. There were “Milk production levels for pounds for April, 40 pounds 1.79 million cows on California April weren’t as strong as what Parmalat buys U.S. unit from above April 2011. dairies in April, up 23,000 head I had been looking for, nor were The number of cows on from a year earlier and up 2,000 cow numbers,” he says. “Still, French parent company Lactalis farms in the 23 major states was head from a month earlier. Pro- there is a lot of milk out there 8.53 million head, 94,000 head duction per cow in California that will take time to work our PARMA, Italy — Parmalat S.p.A, based in Parma, Italy, recently an- more than April 2011 and 4,000 averaged 2,030 pounds, up 35 way through.” nounced that its board of directors has approved the acquisition of head more than March 2012. pounds from a year earlier. USDA’s Dairy Market News Lactalis American Group Inc., the U.S. division of French company For the entire United States, Wisconsin followed with also notes that in areas that Lactalis, parent company of Parmalat. April 2012 production is esti- 2.27 billion pounds of milk, a are still reporting increases in The acquisition, valued at $904 million, includes the distribution, mated at 17.19 billion pounds, 3.5-percent increase from its milk production, milk handlers on an exclusive basis, of the products of the Lactalis Group throughout up 3.2 percent from April 2011. production a year earlier. There are projecting that peak levels the Americas, Parmalat says. Lactalis American Group operates mainly There were an estimated 9.27 were 1.27 million cows on Wis- will be attained by month’s end. in the United States in the production and distribution of cheese and million dairy cows on U.S. farms consin farms in April, up 4,000 However, as schools and other dairy products with brands including Galbani, President, Sor- in April, up 90,000 head from head from a year earlier and up Turn to PRODUCTION, page 11 rento, Precious and Mozzarella Fresca. In 2011, Lactalis American Group Inc. reported revenues of $979.3 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of $84 million, Parmalat says. Last year, the European Commission approved the acquisition of Creamery opens at former Earthquake hits Parmalat by Lactalis of France (see “Under EU regulation, European Italy’s Parmigiano Commission approves Lactalis acquisition of Parmalat” in the June Saputo plant in Vermont Reggiano supply 24, 2011, issue of Cheese Market News). Lactalis owns an approximately HINESBURG, Vt. — Two companies held a ribbon cutting ceremony 83-percent stake in Parmalat. Because of this, the recent announcement last weekend at the site of a former Saputo cheese plant. The grand FINALE EMILIA, Italy is more or less an internal transaction, Lactalis American Group says. openings of Green Mountain Organic Creamery and Vermont Smoke — A 5.9-magnitude earth- “The acquisition will have the effect of consolidating the activities & Cure at this site were held May 19, nearly four years after a fire quake hit Italy’s northeast of the Lactalis Groupe in the Americas under Parmalat, creating a shut down the Saputo cheese plant in September 2008. cheese-producing region market leader in North America and South America,” Lactalis Ameri- Green Mountain Organic Creamery is a new company owned early Sunday morning, kill- can Group says. “The transaction greatly increases the potential for by Cheryl and J.D DeVos, who also are owners of Kimball Brook ing at least seven people, operational synergies in the Americas by improving performance and Farm in North Ferrisburg, Vt. Kimball Brook Farm has a herd of injuring 50 and toppling financial results, and fueling growth in the region.” 200 Jerseys and Holsteins, has been a certified organic farm since several buildings. According Parmalat says the transaction will offer many important develop- 2005 and was named Vermont Dairy Farm of the Year in 2011. The to the Red Cross EU Office, ment opportunities including: DeVoses say they plan to begin processing milk from their farm at the earthquake particularly • Entry into the U.S. dairy market; the new Hinesburg operation by the end of the month, and their shook the region of Emiliana • Increase in revenues provided by value-added products, such as bottled milk, labeled under the Kimball Brook Farm name, will be Romagna, with its epicenter cheese. While Lactalis American Group Inc. is active in “soft and fresh” sold in local grocery stores. They also hope to expand to cheeses, about 35 kilometers north of Turn to LACTALIS, page 10 Turn to OPENING, page 10 Turn to QUAKE, page 10

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 2 CHEESE MARKET NEWS® — May 25, 2012 MARKET INDICATORS

Chicago Mercantile Exchange CHEESE FUTURES for the week ended May 24, 2012 Cash prices for the week ended May 25, 2012 (Listings for each day by month, settling price and open interest)

Monday Tuesday Wednesday Thursday Friday Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 May 21 May 22 May 23 May 24 May 25 MAY12 1.513 1,700 1.513 1,700 1.515 1,700 1.515 1,700 1.515 1,700 Cheese Barrels JUN12 1.551 1,773 1.557 1,774 1.553 1,762 1.565 1,757 1.566 1,758 $1.4700 JUL12 1.556 1,431 1.588 1,432 1.609 1,425 1.621 1,436 1.611 1,441 Price $1.4600 $1.4600 $1.4700 $1.4700 AUG12 1.579 1,295 1.621 1,292 1.633 1,288 1.645 1,288 1.630 1,293 Change NC NC +1 NC NC SEP12 1.620 1,086 1.650 1,086 1.659 1,089 1.675 1,104 1.654 1,113 OCT12 1.643 946 1.650 948 1.663 949 1.665 960 1.665 969 Cheese 40-lb. block NOV12 1.655 973 1.655 973 1.651 980 1.652 983 1.645 992 Price $1.5000 $1.5000 $1.5000 $1.5025 $1.5700 DEC12 1.652 1,017 1.655 1,017 1.658 1,013 1.658 1,013 1.655 1,021 Change NC +1/4 JAN13 1.650 136 1.650 136 1.650 136 1.650 136 1.655 139 NC NC +6 3/4 FEB13 1.645 30 1.645 30 1.645 30 1.645 30 1.645 30 Weekly average (May 21-25): Barrels: $1.4660(+.0100); 40-lb. Blocks: $1.5145(+.0145). MAR13 1.660 11 1.660 13 1.660 14 1.660 14 1.660 14 APR13 1.680 8 1.680 8 1.680 8 1.680 8 1.680 8 Weekly ave. one year ago (May 23-27, 2011): Barrels: $1.7630; 40-lb. Blocks: $1.7660. Total Contracts Traded/ 1 1 2 / 1 0 , 4 7 8 Extra Grade NDM Open Interest 40/10,406 88/10,409 1 0 6 / 1 0 , 3 9 4 1 7 3 / 1 0 , 4 2 9 Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com. Price $1.0825 $1.0825 $1.0900 $1.0900 $1.0900 Change NC NC +3/4 NC NC Grade A NDM Price $1.1250 $1.1300 $1.1400 $1.1425 $1.1550 DRY WHEY FUTURES for the week ended May 24, 2012 Change NC +1/2 +1 +1/4 +1 1/4 (Listings for each day by month, settling price and open interest)

Weekly average (May 21-25): Extra Grade: $1.0870(+.0045); Grade A: $1.1385(+.0150). Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 MAY12 53.50 425 53.50 425 53.50 425 53.50 425 54.75 419 Grade AA Butter JUN12 50.13 472 50.13 472 50.55 465 51.05 461 50.50 464 Price $1.3850 $1.3850 $1.3850 $1.3875 $1.3875 JUL12 47.98 306 47.98 305 48.75 301 50.00 304 49.03 302 Change +3 NC NC +1/4 NC AUG12 46.00 282 46.00 281 47.70 271 50.00 276 48.00 265 SEP12 46.00 245 46.00 245 47.00 248 48.00 250 47.00 251 Weekly average (May 21-25): Grade AA: $1.3860(+.0345). OCT12 45.00 213 45.00 213 46.95 214 46.95 214 46.80 214 NOV12 43.00 193 43.00 193 44.83 187 45.50 187 45.50 187 Class II Cream (Major Northeast Cities): $1.4596(+.0486)–$1.8515(+.1269). DEC12 43.50 176 43.50 176 44.00 178 44.80 181 44.00 181 JAN13 41.00 6 41.00 6 41.00 6 41.00 6 41.00 6 Sign up for our daily fax or e-mail service for just $104 a year. Call us at 608-288-9090. FEB13 40.50 2 40.50 2 40.50 2 40.50 2 40.50 2 MAR13 39.50 2 39.50 2 39.50 2 39.50 2 39.50 2 APR13 38.50 1 38.50 1 38.50 1 38.50 1 38.50 1 Total Contracts Traded/ Open Interest 7/2,323 2/2,321 54/2,300 57/2,309 48/2,294 Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com. Weekly Cold Storage Holdings May 21, 2012 On hand Week Change since May 1 Last Year Monday Change Pounds Percent Pounds Change Butter 11,093 +472 +1,191 +12 8,419 +2,674 Cheese 130,279 -2,544 -652 NC 123,061 +7,218 Dry Products* May 25, 2012 (These data, which includes government stocks and is reported in thousands of pounds, are based on reports from a limited sample of cold storage centers across the country. This chart is designed to help the dairy industry see the trends NONFAT DRY MILK in cold storage between the release of the National Agricultural Statistics Service’s monthly cold storage reports.) Central & East: low/medium heat $1.0500(-2)-$1.2175(-7); mostly $1.0900-$1.1800(-7). high heat $1.1750-$1.2675(-7). West: low/medium heat $1.0200(+2)-$1.1700(-7); CLASS III PRICE mostly $1.0500(+2)-$1.1000(-6). high heat $1.1350(-2 1/2)-$1.2850(-2 3/4). (Dollars per hundredweight, 3.5% butterfat test) Calif. manufacturing plants: extra grade/grade A weighted ave. $1.1440(-.0134) YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC based on 20,970,560 lbs. Sales to CCC: 0 lbs. 2006 13.39 12.20 11.11 10.93 10.83 11.29 10.92 11.06 12.29 12.32 12.84 13.47 2007 13.56 14.18 15.09 16.09 17.60 20.17 21.38 19.83 20.07 18.70 19.22 20.60 WHOLE MILK POWDER (National): $1.3700-$1.4400(-3). 2008 19.32 17.03 18.00 16.76 18.18 20.25 18.24 17.32 16.28 17.06 15.51 15.28 2009 10.78 9.31 10.44 10.78 9.84 9.97 9.97 11.20 12.11 12.82 14.08 14.98 2010 14.50 14.28 12.78 12.92 13.38 13.62 13.74 15.18 16.26 16.94 15.44 13.83 EDIBLE LACTOSE 2011 13.48 17.00 19.40 16.87 16.52 19.11 21.39 21.67 19.07 18.03 19.07 18.77 (FOB)Central and West: $.8300(-2)-$1.0450(+4); mostly $.8800-$.9400. 2012 17.05 16.06 15.72 15.72 DRY WHEY Central: nonhygroscopic $.3800(+8)-$.5700(-2); STAFF SUBSCRIPTION INFORMATION mostly $.4450(-1/2)-$.5325(-1/4). West: nonhygroscopic $.3000-$.5500(-4); Susan Quarne, (PH 608/831-6002; FAX 608/831-1004) mostly $.4500(-1)-$.5275(-3/4). e-mail: [email protected] (FOB) Northeast: extra grade/grade A $.4600(-8 1/2)-$.5950(-2). Kate Sander, (PH 509/962-4026; FAX 509/962-4027) ANIMAL FEED (Central): Whey spray milk replacer $.3700(-3/4)-$.4725(-3/4). POSTMASTER: e-mail: [email protected] Send address changes to Cheese Market News®, Subscriber Alyssa Sowerwine, Services, P. O. Box 628254, Middleton, WI 53562; Form WHEY PROTEIN CONCENTRATE (34 percent): $.9000(-5)$1.4425(-3 3/4); (PH 608/288-9090; FAX 608/288-9093) 3579 requested; or call direct at 608/831-6002. e-mail: [email protected] mostly $1.2000-$1.3425(-4). Rena Archwamety, (PH 608/288-9090; FAX 608/288-9093) e-mail: [email protected] DRY BUTTERMILK Aaron Martin, (FOB)Central & East: $.9500-$1.1000. (PH 608/288-9090; FAX 608/288-9093) (FOB) West: $.9600(-6)-$1.1000(-2 1/2); mostly $.9800(-7)-$1.0700(-2). e-mail: [email protected] REGULAR CONTRIBUTORS CASEIN: Rennet $3.9500-$4.7000; Acid $4.3000-$4.9000. John Umhoefer, Downes-O'Neill LLC, International Dairy Foods Association, National Milk Producers Federation *Source: USDA’s Dairy Market News SUBSCRIPTIONS & BUSINESS STAFF Subscription/advertising rates available upon request Contact: Susan Quarne - Publisher Subscriptions: P.O. Box 628254, Middleton, WI 53562 PHONE 608/831-6002 • FAX 608/831-1004

WEBSITE: www.cheesemarketnews.com

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

to assist interested persons in preparing impacts of the proposals on California 4b for the upcoming hearing over proposed and pool prices, relationship between the changes to the state’s Class 4b pricing proposals and the federal Class III prices, formula. The hearing will be held May and frequency of the dry whey price ﬂoor 31-June 1 in Sacramento, Calif. and ceiling in the proposals, as well as data The workshop included a review and on production and prices. Materials pro- discussion of all the proposals submitted vided by CDFA are at http://cdfa.ca.gov/ to CDFA as well as background materials dairy/uploader/postings/hearings/. CMN

Advanced Prices and Pricing Factors

June 2012 May 2012 For more information please visit www.cheeseshredder.com Base Skim Milk Price for Class I1: $10.61/cwt. $10.76/cwt. Advanced Class III Skim Milk Pricing Factor: $10.61/cwt. $10.76/cwt. Advanced Class IV Skim Milk Pricing Factor: $8.72/cwt. $9.77/cwt. Advanced Butterfat Pricing Factor2: $1.4279/lb. $1.5633/lb. for the week ended May 24, 2012 Class II Skim Milk Price: $9.42/cwt. $10.47/cwt. CME FUTURES Class II Nonfat Solids Price: $1.0467/lb. $1.1633/lb. Class III Milk# Two-week Product Price Averages: Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 Butter: $1.3506/lb. $1.4624/lb. MAY12 15.17 4,691 15.22 4,699 15.22 4,697 15.21 4,627 15.22 4,625 Nonfat Dry Milk: $1.1460/lb. $1.2642/lb. JUN12 15.39 4,741 15.44 4,802 15.41 4,683 15.58 4,669 15.57 4,695 JUL12 15.26 3,504 15.65 3,473 15.87 3,575 16.08 3,749 15.98 3,791 Cheese: $1.5243/lb. $1.5431/lb. AUG12 15.45 3,113 15.96 3,070 16.12 3,058 16.13 3,173 15.98 3,225 Dry Whey: $0.5355/lb. $0.6022/lb. SEP12 15.85 2,782 16.17 2,768 16.27 2,770 16.20 2,797 16.08 2,810 OCT12 15.90 2,399 16.14 2,392 16.14 2,400 16.10 2,423 16.00 2,434 Note: The Class I price equals the Class I skim milk price times 0.965 plus the NOV12 15.89 2,258 15.99 2,266 15.99 2,268 15.99 2,285 15.95 2,289 Class I butterfat price times 3.5, rounded to the nearest cent. DEC12 15.79 2,186 15.89 2,186 15.93 2,191 15.91 2,203 15.85 2,209 JAN13 15.59 367 15.64 367 15.65 371 15.81 383 15.81 383 For information only: The Class I base price is 15.24. FEB13 15.45 216 15.45 222 15.50 222 15.60 222 15.59 222 1/ Higher of advanced Class III or IV skim milk pricing factors. The Class I skim milk price equals MAR13 15.55 157 15.55 159 15.58 161 15.65 162 15.64 162 this price plus applicable Class I differential. APR13 15.51 120 15.51 120 15.54 120 15.55 120 15.55 120 MAY13 15.80 15.80 70 15.85 70 15.90 74 83 2/ The Class I butterfat price equals the price plus applicable Class I differential divided by 100. 70 15.90 JUN13 15.59 46 15.59 46 15.60 46 15.72 49 15.72 49 Data provided by USDA JUL13 15.90 29 15.90 29 15.90 29 15.90 29 15.90 29 AUG13 16.01 26 16.01 26 16.01 26 16.01 26 16.01 26 SEP13 16.08 21 16.08 21 16.08 21 16.08 21 16.08 21 OCT 13 16.05 14 16.05 14 16.05 14 16.05 14 16.05 14 NOV 13 16.09 15 16.09 15 16.09 16 16.09 16 16.09 16 International Dairy Markets May 25, 2012 DEC13 16.08 11 16.08 11 16.08 11 16.08 11 16.08 11 Western and Eastern Europe Total Contracts Traded/ Open Interest 272/26,766 937/26,756 1 , 1 7 9 / 2 6 , 7 4 9 1,649/27,053 938/27,214 Butter: 82 percent butterfat $3,125-$3,350; 99 percent butterfat $3,775-$3,975. Class IV Milk* Skim Milk Powder: 1.25 percent butterfat $2,475-$2,675. Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 Whole Milk Powder: 26 percent butterfat $3,075-$3,250. MAY12 13.67 287 13.67 287 13.67 287 13.67 287 13.67 287 Whey Powder: Nonhygroscopic $1,025-$1,300(+75). JUN12 13.60 273 13.60 273 13.70 273 13.70 273 13.75 273 JUL12 13.65 92 13.65 92 13.79 92 13.79 92 13.85 92 Oceania AUG12 13.80 74 13.80 74 13.90 74 13.91 74 14.00 74 Butter: 82 percent butterfat $2,800(-100)-$3,200(-300). SEP12 14.00 77 14.00 77 14.10 77 14.10 77 14.20 77 OCT12 14.40 68 14.40 68 14.40 68 14.40 68 14.40 68 Cheddar Cheese: 39 percent maximum moisture $3,100(-100)-$4,100. NOV12 14.30 58 14.30 58 14.30 58 14.30 58 14.30 58 Skim Milk Powder: 1.25 percent butterfat $2,550(-125)-$3,000. DEC12 14.60 57 14.60 57 14.60 57 14.60 57 14.60 57 Whole Milk Powder: 26 percent butterfat $2,500(-250)-$3,350(-50). Total Contracts Traded/ Open Interest 0/996 0/996 0/996 0/996 0/996 * Source: Dairy Market News. Prices reported in U.S. dollars per metric ton, F.O.B. port. To convert to price per pound: divide price by 2,204.6 pounds. Cash-Settled NDM Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 MAY12 117.50 301 117.50 301 117.50 301 117.50 301 117.50 301 National Dairy Products Sales Report JUN12 114.25 403 114.25 403 114.25 403 114.25 403 114.25 403 For the week ended: 4/28/12 JUL12 114.03 375 114.03 375 114.50 375 115.50 375 115.50 375 5/19/12 5/12/12 5/5/12 AUG12 115.00 389 115.00 389 115.30 389 115.30 389 116.50 389 Cheese 40-lb. Blocks: SEP12 116.60 339 116.60 339 116.60 339 116.63 339 117.50 339 OCT12 119.00 276 119.00 276 1 $1.5271 $1.5165 $1.5030 276 119.00 276 119.00 119.00 276 Average price $1.5269 NOV 12 121.00 186 121.00 186 121.50 186 123.50 186 123.50 186 2 Sales volume 9,265,699 12,204,502 10,531,144 11,686,869 DEC 12 123.00 126 123.00 126 123.00 126 123.00 126 123.00 126 Cheese 500-lb. Barrels: Total Contracts Traded/ Average price1 $1.5691 *$1.5667 $1.5571 $1.5663 Open Interest 0/2,395 0/2,395 0/2,395 3/2,395 0/2,395 Adj. price to 38% moisture $1.4887 *$1.4939 $1.4837 $1.4906 Sales volume2 9,420,835 *11,368,626 9,668,046 11,685,181 Cash-Settled Butter Moisture content 34.65 34.98 34.93 34.85 Fri., May 18 Mon., May 21 Tues., May 22 Wed., May 23 Thurs., May 24 Butter: MAY12 134.78 615 134.78 615 135.75 615 135.00 614 136.00 614 1 Average price $1.3352 *$1.3701 $1.4135 $1.4268 JUN12 140.00 770 142.75 769 142.75 768 141.00 768 141.00 768 Sales volume2 4,440,673 *3,513,341 4,765,791 4,130,975 JUL12 141.50 688 144.25 687 146.75 686 145.00 683 144.75 698 Nonfat Dry Milk: AUG12 144.00 696 144.75 696 145.75 696 145.50 694 145.75 694 Average price1 $1.1449 *$1.1473 *$1.2167 $1.2177 SEP12 145.50 632 145.75 632 147.00 632 147.00 632 147.25 636 2 OCT12 145.50 613 146.00 613 147.00 613 147.25 611 147.50 612 Sales volume 32,735,694 *27,024,186 *21,908,489 27,541,702 NOV12 147.00 618 147.00 618 148.50 618 148.50 617 148.50 588 Dry Whey: DEC12 147.75 479 147.75 479 149.25 479 149.25 479 149.25 479 Average price1 0.5436 *0.5274 $.5672 $0.5686 JAN 13 149.75 9 149.75 9 149.75 9 149.75 9 151.00 9 Sales volume2 7,335,402 *7,257,827 6,864,869 9,213,590 Total Contracts Traded/ Open Interest 51/5,120 7/5,118 3/5,116 49/5,107 67/5,100 * 1 2 /Revised. /Prices weighted by volumes reported. /Sales as reported by participating manufacturers. Daily market prices are available by visiting CME’s online statistics sites at http://www.cmegroup.com. #The total contracts traded for Class III milk includes electronically-traded contract volumes. Reported in pounds. More information is available by calling AMS at 202-720-4392. *Total Contracts Traded/Open Interest reﬂect an additional month not included in this chart.

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 4 CHEESE MARKET NEWS® — May 25, 2012 GUEST COL UMNIST

absorbing some of the added output, producer community that has been so the companies doing the exporting are shell-shocked by booms and busts that it Perspective: competing with a similar milk tsunami cannot make investments in the future. Industry Matters from our global competitors. The Dairy Security Act gives farmers Clearly, supply and demand are tools they badly need to help manage imbalanced. Eventually, conditions will their price risk, and it complements, correct, due to changes both here at not conflicts with, existing, private- home and abroad. But in the meantime, sector risk management tools. It is this farmers are once again seeing margins same farmer community that currently eroded, not just from milk prices, but invests in new plant capacity, the fund- from high, sustained feed costs. Corn is ing of the U.S. Dairy Export Council, and still in the $6/bushel range for delivery the voluntary backing of Cooperatives this summer. Alfalfa is being sent to Working Together, all of which together China to feed dairy cattle there. And are what has helped boost our exports hard-earned farm equity is again being to 13 percent of current production. lost here at home. But these investments can’t be There is an alternative to this roller sustained without a better safety net. coaster, and it’s what NMPF has been Consumer markets, here in America as promoting for more than a year: the well as abroad, can’t magically absorb Changing the game Dairy Security Act, which will proactive- all this milk during times like these. ly and prudently trim milk output when What we need is a mechanism to put I’m going to start this column where tidal wave of milk. There was just the U.S. dairy farmer margins are stressed, the brakes on, and stop the rush to the I left off with the most recent one I slightest sense of relief when April 2012’s while at the same time providing them abyss before it’s too late. authored for Cheese Market News, back U.S. milk output was only up 3.2 percent margin protection when conditions are As NMPF’s Chairman, Randy Money, in March. In that article, I explained compared to last year; the first quarter of poor — as they are right now. has said: “Whenever we have growing that concerning the next Farm Bill, 2012 saw average production increases Now, we’ve heard claims, mostly demand for products in the world, Congress was engaged in a collective above 4 percent. Nevertheless, April was based on anecdotes, that the occasional dairy farmers in the United States can game of “kick the can” that could result the 27th month in a row that milk pro- implementation of the market stabiliza- supply that product, but we have to in changes in farm policy being delayed duction has grown on a year-over-year tion program to trim milk output slightly do it profitability. And if we can’t do it until 2013. I noted that dairy farmers basis. Cow numbers remain high based will make the United States globally un- profitably, we’re not going to do it. The can’t afford to play that game. on historic patterns; milk output per cow competitive. That assertion is debunked market stabilization program allows As it turns out, the competition in continues to show impressive growth. by the recent report on the Dairy Security us to adjust our supply to get back to which farmers really are engaged is akin Those are the statistics. At the farm Act, prepared by Dr. Scott Brown of the profitability, so we can feed the world.” to a game of financial chicken: They’re level, the hard reality is that we’re up University of Missouri for Congress. He That’s the game we need to be play- collectively careening toward the edge to our udders in milk. Plants are run- found that milk production growth in ing, but we can only change those rules of financial oblivion, in the hope that ning at full capacity; tanker loads are the years 2012-2022 slows just slightly, by passing the Dairy Security Act. CMN someone else will stop the game first. being dispatched across the country with production of dairy products only My analogy refers to surging milk in hopes that someone will buy them 0.2 percent less than if the market sta- The views expressed by CMN’s guest production, from New Mexico to the at a steep discount. Cooperatives are bilization program didn’t exist. columnists are their own opinions Netherlands to New Zealand, which instituting base plans to rein in output. In fact, what will really make the and do not necessarily reflect those of right now is producing a worldwide And, importantly, while exports are United States uncompetitive is a dairy Cheese Market News®.

NEWS/BUSINESS Quarantine lifted from farms in BSE probe Cooperatives Working Together assists WASHINGTON — The quarantine has records that might allow them to be lo- with 5.2 million pounds of dairy exports been lifted from two California dairy cated. The remaining potential cohorts farms that were held under quarantine are no longer alive or have otherwise ARLINGTON, Va. — Cooperatives Work- In 2012, CWT has assisted member during the investigation into a cow that been ruled out. ing Together (CWT) has accepted 24 cooperatives in making export sales tested positive for an atypical strain APHIS confirmed the nation’s requests for export assistance from Dairy of Cheddar, Monterey Jack and Gouda of bovine spongiform encephalopaty fourth case of BSE April 24 in an Farmers of America, Darigold, Maryland totaling 53.8 million pounds, and but- (BSE) or “mad cow disease.” (See “Two animal that was sampled for the & Virginia Milk Producers Cooperative ter and anhydrous milkfat totaling 44.4 California dairy farms quarantined disease at a rendering facility in and United Dairymen of Arizona to sell million pounds, to 27 countries on four as investigation continues into mad central California. The animal was a total of 1,623 metric tons (3.6 million continents. On a butterfat basis, the cow case” in the May 4, 2012, issue of never presented for slaughter for hu- pounds) of Cheddar and Monterey Jack milk equivalent of these exports is 1.465 Cheese Market News.) Both the dairies man consumption, so at no time did cheese and 745 metric tons (1.6 million billion pounds. were released from quarantine after it present a risk to the food supply or pounds) of butter to customers in Asia, CWT will pay export bonuses to inventories were completed and records to human health in the United States, Africa, Central America and the Middle the bidders when delivery of the were reviewed, according to an update APHIS says. East. The product will be delivered May product is verified by the submission on the investigation from USDA’s Animal After USDA’s National Veterinary through November 2012. of the required documentation. CMN and plant Health Inspection Service Services Laboratories (NVSL) com- (APHIS). pleted testing of the samples from the 2012 Farm Bill officially introduced in Senate In addition, investigation of feed animal, the samples were sent to the records at the dairy where the cow World Organization for Animal Health WASHINGTON — U.S. Sen. Debbie Stabenow says. originated has found no anomalies, and (OIE) reference laboratories in Canada Stabenow, D-Mich., chair of the Senate The bill was passed by the Senate audits of all the feed suppliers to this and England. Both laboratories have Agriculture Committee, on Thursday Ag Committee last month. Lawmakers dairy have shown them to be in compli- confirmed that the index cow was posi- announced that the 2012 Farm Bill have indicated that the full Senate will ance with regulations. Test results for tive for atypical (L-type) BSE. has been officially introduced in the consider the bill next month following a progeny of the positive cow also were As the investigation moves toward U.S. Senate. the Memorial Day recess. negative for BSE. completion, local officials from the The bill, authored by Stabenow and “This bill has strong bipartisan sup- Of several hundred potential birth California Department of Food and Senate Ag Committee ranking member port from senators across the country, cohort cattle, APHIS says it is focusing Agriculture and USDA APHIS Vet- Pat Roberts, R-Kan., is a bipartisan bill and I am looking forward to beginning on tracing a small number (10-12) of erinary Services now are in charge to reform U.S. food and farm policy floor consideration soon,” Stabenow says. cattle which may still be alive and have of the incident command. CMN and would save taxpayers $23 billion, “The time for reform has come.” CMN

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com May 25, 2012 — CHEESE MARKET NEWS® 5 NEWS/BUSINESS Face Rock Creamery LLC plans to open cheese factory at site of former Bandon Cheese BANDON, Ore. — Face Rock Creamery A master cheesemaker for the facility the Bandon Cheese brand at the re- Our first step to improve quality was LLC plans to build a new cheese plant hasn’t been named yet. quest of its owners in 2000. After the to move production of Bandon Cheese here at the site of the former Bandon The City of Bandon purchased the Coquille Valley Farmers Cooperative to our Tillamook facility,” TCCA says. Cheese Factory. two-acre property from Tillamook became insolvent in 1986, a series of TCCA ceased cheese production at Earlier this month the Bandon City County Creamery Association (TCCA) owners struggled to profitably operate the Bandon site in 2002 and continued Council approved terms of a lease that in 2011 for $500,000. Under terms of the plant and store. retail sales there until the facility was will bring a new 6,000-square-foot facility the lease agreement the City Council “When we were approached to pur- shuttered in 2005. Citing safety con- to the site. Construction could begin as reached with Face Rock Creamery, the chase the Bandon brand and factory, cerns, the cooperative razed the factory soon as June. city agreed to waive rent on the prop- we believed that buying it would ensure in 2007. TCCA continues to produce Greg Drobot, owner of Face Rock erty for 20 years. In return, Face Rock its longevity and maintain the Oregon Bandon Medium Cheddar at its facility Creamery, told members of the City Creamery will pay the city 1 percent heritage Bandon shares with Tillamook. in Boardman, Ore., the cooperative says. Council he plans to invest at least $2 of gross revenues between $1 million Unfortunately, the milk supply was not Drobot says he anticipates the million in the project. Drobot says he’s and $2.5 million and 2 percent of gross available in the volume or at the quality new cheese plant will create 10 full- enlisted Joe Sinko, former owner of the revenues that exceed $2.5 million. we expected, and the facility itself was time jobs and could be operational Bandon Cheese Factory, as a consultant. TCCA purchased the property and below our standards for consistency. in about a year. CMN Kraft shareholders approve Mondelez International Inc. as new name for snacks company NORTHFIELD, Ill. — The sharehold- high-margin North American grocery The company also has reserved grocery company (Kraft Foods Group ers of Kraft Foods Inc. voted this week to business (Kraft Foods Group Inc.). the symbol MDLZ for the company’s Inc.) will be KRFT. Until the new change the name of its spin-off company “Mondelez has an appealing interna- common stock, which will trade under companies launch, however, the name to Mondelez International Inc. The tional sound that perfectly evokes the this new symbol after the spin-off. The and stock trading symbol for Kraft proposal was approved by more than 90 idea of a ‘delicious world.’ That’s the stock symbol for the North American Foods Inc. will not change. CMN percent of the shareholders who cast a essence of our global snacks company,” vote. The new name will become effec- says Irene Rosenfeld, chairman and tive at the time of the planned spin-off of CEO. Rosenfeld stresses that Mondelez Organic Pastures cleared to sell raw milk the company’s North American grocery International will become the new name SACRAMENTO, Calif. — The California butter and four samples of cow manure business. of the corporation, not a consumer Department of Food and Agriculture from the milking herd. As previously announced, Kraft brand. Mondelez will serve as an um- (CDFA) announced May 18 that raw milk The facility was required to meet Foods Inc. is dividing to create two brella for the company’s many iconic products produced by Organic Pastures, all sanitation requirements and com- industry-leading public companies: a product brands, including Cadbury, Fresno County, Calif., have been released ply with food safety regulations under high-growth global snacks business Jacobs, LU, Milka, Nabisco, Oreo, Tang from a statewide quarantine that began state law before the quarantine could (Mondelez International Inc.) and a and Trident. May 10. (See “Raw milk products made be lifted. During the quarantine, the by Organic Pastures recalled” in last facility was prohibited from producing week’s issue of Cheese Market News.) raw milk products for the retail market. Arla Foods plans mergers in UK, Germany CDFA imposed the quarantine in “We’re working very hard in our op- AARHUS, Denmark — Arla Foods regulatory authorities. response to the detection of campylo- erations department to get our trucks has announced plans for two major “If the owners agree on these bacter bacteria and notification from back to the stores, the product back mergers — one with Germany’s eighth- mergers, it will strengthen Arla Foods’ the California Department of Public to the stores as fast as possible,” says largest dairy company, the cooperative position as one of Europe’s leading Health (CDPH) of reported campy- Mark McAfee, CEO of Organic Pastures, Milch-Union Hocheifel (MUH), which dairy companies,” says Peder Tuborgh, lobacter foodborne illness in people in a recent video statement on the has owners in Germany, Belgium and CEO, Arla Foods. “Both Milk Link and who had consumed Organic Pastures quarantine release. “We’re also happy Luxembourg, and the other with the Milch-Union Hoceifel are strong, well- raw milk. CDPH also isolated Campy- to announce that all the tests in the last United Kingdom’s fourth-largest dairy run dairy groups, which, with their lobacter jejuni from six samples of the week have revealed no pathogens and company, the cooperative Milk Link. product portfolios and production dairy’s raw cream, one sample of raw very, very good bacteria counts.” CMN The two planned mergers will im- systems, will strengthen our business mediately increase Arla Foods’ revenue in both countries.” by approximately $1.5 billion per year, The mergers also would help ensure the company says. As a result of the access to more markets, a broader prod- COOKER / STRETCHER mergers, Arla will for the first time uct portfolio and more stable return for have cooperative owners in the UK, and owners of MUH and Milk Link. its group of owners in Germany will be “We’re already a European dairy DEDICATED TO THE significantly expanded. company, but through a merger CHEESE & DAIRY INDUSTRIES The owner representatives of Arla with Arla, we’re pursuing our strat- FOR OVER FOUR DECADES! Foods and MUH and the members egy of becoming an international With experience dating back to 1964, our cooker/stretcher of Milk Link will make a decision on company that is able to provide a product line has provided cheese makers with the whether to merge on June 26, and the favorable and stable milk price,” says control and reliability they require to produce the finest mergers will require clearance from Rainer Sievers, CEO, MUH. CMN pasta filata style cheese possible. UÊGentle and consistent stretching while reaching optimum cooking temperature Oregon processor agrees to EPA settlement UÊSingle, large auger reduces the cutting and compression resulting in yield preservation SEATTLE — Columbia River Process- leasing nearly 2,500 pounds of ammonia UÊLow auger RPM gently conveys and stretches pasta filata ing Inc. recently agreed to a settlement into the environment, according to the UÊConsistent heating offers minimal differential temperature with the U.S. Environmental Protection EPA settlement. EPA says Columbia between water and pasta filata Agency (EPA) over the company’s failure River Processing failed to immediately UÊAvailable with many options to fit your specific needs to report an anhydrous ammonia release notify local and state agencies about at its Boardman, Ore., cheese processing the release. No injuries were reported - ,6 ÊUÊ "6/" ÊUÊ /" facility in June 2008. The settlement at the time of the incident. includes a $42,435 penalty. The ammonia release and failure to On June 30, 2008, an electrical storm notify appropriate agencies are viola- 6391 Lake Road, Windsor, WI 53598 caused power surges that disrupted the tions of the federal Comprehensive Johnson Industries *\ÊÈän®Ên{È{{ÊUÊ8\ÊÈän®Ên{ÈÇ£x © EMAIL: [email protected] computers and compressors that con- Environmental Response, Compensa- International Inc. WEB: www.johnsonindint.com trol the ammonia system at the facility. tion and Liability Act (CERCLA) and the Your Global Cheese Making and Processing Equipment Resource The computer failure caused a pressure Emergency Planning and Community relief valve to open at the facility, re- Right-to-Know Act (EPCRA). CMN For more information please visit www.johnsonindint.com

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 6 CHEESE MARKET NEWS® — May 25, 2012 NEWS/BUSINESS Darigold, Arla, Kraft among those named in McDonald’s ‘Best of Sustainable Supply’ report OAK BROOK, Ill. — McDonald’s Corp. improve food sources, the environment, be made and can be used for disseminat- million meals through the consumer- recently published its 2012 “Best of communities and employee wellness ing standard operating procedures and participation program the first year Sustainable Supply” report, naming around the world. The winners were training for farm employees. and more than 25 million meals this Darigold, Arla and Kraft Foods among selected based on either measurable “Darigold is honored to be recog- past year. this year’s “Best of Sustainable Supply results or innovation. nized as a world-class supplier by the Kraft Foods also was honored in the Chain” winners. Darigold was honored in the report’s McDonald’s Corp.” says Jim Wegner, “Waste” category of the McDonald’s These three companies were among “Animal Welfare” category specifically president and CEO, Darigold. “The report for realizing its goals of zero 51 recipients of the global honor out of for its web-based surveys to drive im- adoption of our animal well-being survey waste-to-landfill status in 36 plants 400 entries. A panel of McDonald’s ex- provements on dairy farms. Darigold’s is providing verifiable documentation in nine countries, including 24 plants ecutives and external experts, including On-Farm Animal Well-Being Survey rep- that our dairymen do practice excellent in Europe and 12 facilities in North BSR, Conservation International, Food resents a standard for comprehensive animal husbandry.” America. Globally, the company has re- Animal Initiative and World Wildlife assessment within the dairy industry Kraft Foods was honored in the duced net waste from its manufacturing Fund selected the final 2012 Best of and measures cooperative members’ Community Impact” category for its plants by 50 percent from 2005 levels. Sustainable Supply winners. on-farm animal husbandry practices work with Feeding America and Kraft’s Arla also was honored in the report’s The companies highlighted in the re- against industry best practices. The “Huddle to Fight Hunger” campaign “Waste” category for approaching zero port have implemented innovative and survey also provides an understanding of during the 2010 and 2011 football sea- waste-to-landfill in the United Kingdom. effective ways to address challenges to where future on-farm improvements can sons. Kraft Foods donated nearly 21 Arla Foods UK launched plans in 2005 to eliminate all the waste sent to landfills by 2012. By early 2011, Arla’s Ashby Dairy, which supplies fresh milk, milk- shakes and McFlurries to McDonald’s in the UK, became the second site within Arla Foods UK to achieve zero waste to landfill, and the business is on track to ensure all other Arla Foods UK sites are zero waste-to-landfill this year. YOU’RE THE BOSS Additionally, Arla was honored in the “Raw Materials” category for cutting carbon dioxide on dairy farms through Tetra Pak can deliver full line solutions for cheese and whey developing and funding a long-term production. Or individual pieces of equipment. Or components. carbon reduction program in the UK. You tell us what you need. We’ll deliver. Our decades of Arla has launched a three-year program experience are at your disposal. We can help you in any for all 1,400 members of the Arla Foods Milk Partnership who supply milk to – or every – stage of your project, meeting your particular McDonald’s, offering free carbon assess- needs and exacting standards. ments and on-farm workshops. CMN We’d like to show you how we can help you achieve the quality of cheese and the profits you demand. Get in Kronos to process touch with us today to see how we can put our cheese expertise and experience to work for you. Greek yogurt for foodservice industry Just phone Trevor or one of our GLENDALE HEIGHTS, Ill. — Kronos sales engineers at 320 485 4401 Foods Inc., a leading manufacturer of Mediterranean and specialty foods, has or send an email to announced that it has been certified as [email protected] a dairy facility and will begin producing Greek yogurt for the food service industry. As the only USDA-certified facility in the Chicago area to produce both meat and dairy products, Kronos says it now has the capacity to produce Greek yogurt for food service providers nation- ally. Offered in 2-packs of 64-ounce con- tainers, the product allows foodservice operators to create Greek yogurt menu Tetra Pak, and PROTECTS WHAT’S GOOD are trademarks belonging to the Tetra Pak Group. items or utilize it as a recipe ingredient. “While market data shows that consumers are quickly embracing Greek . team yogurt as a healthy alternative option a Pak Tetr in their homes, the biggest opportunity f the rt o pa e – for Kronos is in the foodservice indus- lark r C try,” says Howard Eirinberg, president, evo Tr Kronos Foods Inc. “Greek yogurt is a much healthier alternative to mayo and sour cream in sandwich spreads, salad dressings, dips, side dishes and desserts without compromising the recipe’s flavor. By using Greek yogurt, chefs and foodservice providers can meet consumer demand for taste and lower fat items for breakfast, lunch, dinner and dessert.” For more information, vis- For more information please visit www.tetrapak.com it www.kronosfoodsinc.com. CMN

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 8 CHEESE MARKET NEWS® — May 25, 2012 NEWS/BUSINESS Wisconsin Specialty Cheese Institute announces new website and Facebook presence DELAVAN, Wis. — The Wisconsin statistics and cheesemaker proﬁles, like the perfect time for the WSCI to create mote Wisconsin specialty cheese is Specialty Cheese Institute (WSCI) has www.wispecialtycheese.org aims to a Facebook fan page, at www.facebook. good for the industry,” Knox says. launched a new Facebook page and better serve its growing membership com/specialtycheese, says Shirley Knox, For more information, contact website to better promote and support and provide resources for consumers president of the WSCI board of directors. Kathy Brown, administrator, at info@ the state’s specialty cheese industry. seeking Wisconsin specialty cheese. “Any way we can better con- wisspecialcheese.org or call 1-866- By showcasing a new logo, updated Launching a new website also seemed nect with our membership and pro- 740-2180. CMN

PEOPLE

Comings and goings … comings and goings WDPA names its 2012 scholarship winners The Wisconsin Department of Fuller will assume the role of the Walmart MADISON, Wis. — The Wisconsin involved in 4-H, FFA and the Junior Agriculture, Trade and Consumer and Club Channel sales analyst based in Dairy Products Association (WDPA) Holstein Association. Protection (DATCP) has announced the Rogers, Ark. Pineres will identify and has announced the winners of the 2012 Wallenhorst and Larson will each selection of Rochelle Ripp, of Lodi, Wis., develop new growth opportunities. She Robert L. Bradley Scholarship and the receive a check for $2,000 at the WDPA as Wisconsin’s 65th Alice in Dairyland. also will manage the snack innovation WDPA Scholarship. World Dairy Expo Championship Dairy Ripp is an associate marketing execu- pipeline by assuming leadership of ex- Nicole Wallenhorst is the winner Product Contest auction Oct. 2. tive at Filament Marketing,Madison, isting projects. Additionally, Tim Ross of the Robert L. Bradley scholarship. Both scholarships are annual Wis. She uses strategic marketing and has been named sales manager of the She recently completed her freshman awards valued at $2,000 each, with communications to promote agricultural year in the food service division. He is a year at the University of Wisconsin- funding coming from proceeds of the products, services and initiatives. She seven-time recipient of the honor since Platteville and is majoring in animal World Dairy Expo Championship Dairy was raised on her family’s dairy and joining Sargento in 1985. science with an emphasis on dairy. She Product Contest auction. The scholar- cash crop farm and graduated from Patrick Hickey became chief fi- grew up on a 250-cow dairy farm near ships are awarded each year to two the University of Wisconsin-Platteville nancial officer of Friendly’s Ice Cream Cuba City, Wis., and is a member of students pursuing careers in the dairy in 2009 with a degree in agribusiness LLC April 23. Hickey has worked in 4-H, FFA, Wisconsin Junior Holsteins industry. communications. As Alice in Dairyland, several industry sectors, including the and UW-Platteville Dairy Club. The Robert L. Bradley Scholar- Ripp will receive a $40,000 salary and airline industry, where he held positions Thomas Larson is the winner of the ship is named after Dr. Bob Bradley, professional travel expenses. with Northwest Airlines, U.S. Air and 2012 WDPA Scholarship. He is graduat- longtime professor at the UW-Madison Sargento Foods Inc., Plymouth, American Airlines before taking a posi- ing from Viroqua High School in May and a supporter of WDPA. Bradley Wis., has announced a series of staff tion in financial planning and analysis ranked the second highest student in was active for more than 25 years in changes. In the culinary solutions divi- at Staples. his graduating class. He plans to attend WDPA’s Dairy Product Grading and sion, Bryan Birling has been promoted Holland’s Family Cheese LLC, the University of Wisconsin-Madison in Evaluation Clinic and has been the to senior national accounts manager Thorp, Wis., has announced that the fall and major in biological systems assistant judge for WDPA’s World Dairy and will continue to be responsible Kari Skibble, Menomonie, Wis., and engineering. Thomas grew up on a 200- Expo Championship Dairy Product for sales of meal kits, spreads and side Lindsey Decker, Lake Mills, Wis., acre dairy heifer farm and has been Contest for the past nine years. CMN dishes to club stores and traditional have been named the company’s grocery chain delis. Paul Groth has sales and marketing directors, re- been promoted to senior manager and spectively. Skibble grew up on a Obituaries Brenda Bell has been promoted to in- hobby farm and earned a bachelor’s sights manager of the food ingredients degree in agribusiness at the Uni- Claude F. Bourguignon division. Groth will lead the division’s versity of Wisconsin-River Falls. She research and development team, and also earned a master’s degree at the WAUSAU, Wis. — Claude F. Bour- Merrill, Wis., in the 1970s; produced Bell will be responsible for consumer University of Wisconsin-Madison. guignon, co-founder of All Nations the innovative spreadable French trends, competitive intelligence and Decker has worked in the cheese Cheese Organization (ANCO), died cheese Rondele; and began produc- customer and category analysis. In the industry in marketing management, April 29 following a stroke and a tion of Feta cheese in Minnesota consumer products division, Jake Fuller advertising, promotions and events. battle with dementia. He was 76. under the Athenos brand. has been hired as sales analyst, and She earned a bachelor’s degree in Bourguignon was born in Mon- A pioneer in producing European- Joy Pineres has been hired as senior mass communication from the Uni- treal on Aug. 3, 1936, and became a style cheese in the United States, manager of new business development. versity of Wisconsin-Whitewater. CMN successful accountant,comptroller many multi-national dairy companies and auditor before co-founding took Bourguignon’s lead and began cheese import and distribution producing unique cheeses with company ANCO. The company was European influences. Bourguignon launched from a garage in Byram, and his partners sold ANCO to Kraft Conn., and grew to become a multi- Foods in February 1990. please enter my subscription to million dollar business located in He is survived by his wife, 1 YEAR RATES: ELECTRONIC 1 YEAR RATES: 2 YEAR RATES: Fairfield, N.J. Charlotte, of 46 years; and by his $135 (2nd Class) $135 (E-mail Only. No Mail Service) $195 (2nd Class) Under Bourguignon’s leadership, sister, Yolande Bourguignon-Char- $190 (1st Class/Canada) $210 (E-mail With 2nd $315 (1st Class/Canada) ANCO purchased a Cheddar plant in bonneau; and two nephews. CMN $330 (International) Class Mail Service) $525 (International) Payment enclosed Bill Me Fred J. Heim Jr. Payment by credit card: VISA MASTERCARD AMERICAN EXPRESS Card # ______Exp. Date______Sec. Code_____ OCONOMOWOC, Wis. — Fred J. Heim he worked as a civil engineer. From

NAME: ______Jr., former owner of Heim Cheese Co. 1968 until his retirement, he also owned TITLE: ______in Lowell, Wis., died May 16. He was 77. and operated Heim Cheese Co. Inc. He Heim graduated from the University was a member of the Wisconsin Cheese COMPANY: ______of Wisconsin-Madison with degrees Maker’s Association and served the or- ADDRESS: ______in civil and agricultural engineering. ganization in local and state positions. EMAIL: ______PHONE: ______Upon graduation, he served with the Heim is survived by his wife Helen CITY: ______STATE: ______ZIP: ______Army Corps of Engineers and Army (Hoof), brother Reginald (Sharon) SIGNATURE: ______DATE: ______Reserve, where he retired at the rank Heim, son Fred (Carol) Heim, grand- Mail to: Subscriber Services • CHEESE MARKET NEWS • P. O. Box 628254 • Middleton, WI 53562 of captain. After his military service, children, nieces and nephews. CMN Phone (608) 831-6002 • Fax (608) 831-1004 • E-mail [email protected] • www.cheesemarketnews.com

• EQUIPMENT 1 • EQUIPMENT 1 • HELP WANTED 7 • HELP WANTED 7

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Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 10 CHEESE MARKET NEWS® — May 25, 2012 NEWS/BUSINESS

Nestlé invests $140M in Chile milk factory OPENING Continued from page 1 “We are really pleased OSORNO, Chile — Nestlé has invested located in a rural area close to the dairy more than $140 million in a new fac- farms that supply it with milk. Nestlé to be headquartered tory in Chile that will produce a range officials say this not only enables the yogurt and ice cream in coming years. in a building that of milk products and ingredients with company to trade directly with farmers, “We are really pleased to be head- added nutritional value for domestic but also to provide them with technical quartered in a building that already has already has a history consumption and for export to the assistance and training to improve milk a history of supporting the local working of supporting the local United States, Central America, the production and quality. In Chile, Nestlé landscape,” says Cheryl DeVos. “It fits, Middle East and Asia. operates a dairy support program in all because creating jobs for the community working landscape.” When fully operational, Nestlé says the the regions where its milk factories are is an important part of our goals for the factory will have a production capacity of located, reaching a total of about 1,200 future too — as is producing products Cheryl DeVos 30,000 metric tons (approximately 66.1 milk producers in the country. Since that are good for the environment and GREEN MOUNTAIN million pounds) of milk powder, allowing 2001, the company also has participated healthy for our bodies.” ORGANIC CREAMERY it to meet increased demand for dairy in a government initiative that aims to Vermont Smoke & Cure, which was es- products that offer a nutritional “plus.” strengthen the relationship between tablished in 1962, smokes bacon, ham and The new factory is located in the private companies and their suppliers. other meats for more than 600 farmers. by providing funding. region of Osorno in southern Chile. “We have built an excellent col- After the fire at the Saputo plant, a “In a state filled with successful Nestlé says it will be one of the most laborative relationship with our milk Hinesburg Saputo Redevelopment Steering stories of agriculture reinvention, the technologically-advanced dairy fac- producers in Chile over the years,” Committee was created, which worked with story of the redevelopment of the Saputo tories of its kind in the world, and it says Nestlé CEO Paul Bulcke. “By the Greater Burlington Industrial Develop- site has to be one of the biggest suc- will provide 300 direct jobs and 1,500 working with farmers in this way, ment Corp. and local real estate companies cesses in agricultural redevelopment I indirect jobs. we have fostered a long-term, mutu- to identify and cultivate business prospects have witnessed in my time represent- The Osorno manufacturing site is ally beneficial partnership.” CMN that met the needs of the town. ing the State of Vermont,” says Sen. “With their focus on value added Patrick Leahy, D-Vt., who attended Domino’s nearly triples Smart Slice schools agriculture, Vermont Smoke & Cure and the ribbon cutting. “Utilizing federal Green Mountain Organic Creamery fit programs, state programs, equity and ANN ARBOR, Mich. — Domino’s Pizza schools in early 2011 to more than 3,000 perfectly with the vision Hinesburg had debt, the community and their partners Inc. says school participation in its schools across 37 states. for the former Saputo facility,” says Joe have attracted two businesses to town Smart Slice school lunch program — “We are excited about the success of Colangelo, Hinesburg town manager. that promise to give Vermont farms which meets revised USDA nutrition Domino’s Smart Slice, and are proud to Several state and federal programs opportunities to turn commodities standards for school lunches — has be providing a nutritious, great-tasting helped facilitate the new development into value added products.” CMN tripled over the last year. product that already meets the new fed- Domino’s Smart Slice, when topped eral guidelines,” says J. Patrick Doyle, with light Mozzarella, meets USDA president and CEO, Domino’s Pizza. “The • Stronger competitive position in school lunch nutrition standards for feedback from school districts has been LACTALIS Latin America with the addition, along Continued from page 1 calories, fat and sodium. Each slice overwhelmingly positive — proven by with the current activities in Colombia features 4 grams of fiber, 24 grams of the fact that we saw more than a 250 and Venezuela, of countries such as whole grains and is a good source of percent increase in the number of school cheese, it is currently virtually absent Brazil and Mexico with cheese products calcium, the company says. districts participating in just one year.” from Parmalat’s portfolio; manufactured in Canada, the United The number of schools that now For more information about • Exploitation of opportunities deriv- States and Europe. participate in the Domino’s Smart Domino’s Smart Slice, visit www. ing from the export from Canada to the Parmalat says the transaction will be Slice program has increased from 1,100 schoollunch.dominos.com. CMN United States of Cheddar brands with rel- completely financed by its own means and evant synergies in costs and revenues; and will be completed within July 2012. CMN

CLASSIFIED contacting the dairy processors in the QUAKE region to fully assess the damage. The Continued from page 1 ADVERTISING consortium says currently it knows of about 10 production and maturation Bologna, Italy, between the provinces of facilities that have been damaged and • CHEESE/DAIRY 12 • CHEESE/DAIRY 12 Modena and Ferrara. In addition to the many more that have been impacted due initial quake, another with a magnitude to cheese wheels falling to the ground. of 5.1 occurred early Sunday afternoon An initial estimate showed about 150,000 with the epicenter located in the town of the 300,000 fallen wheels have been of San Prospero in the Modena province. damaged. At least one processing plant Italy’s national farmers’ union, Col- has been damaged and has transferred diretti, says nearly 10 percent of the production to neighboring processors, country’s annual Parmigiano Reggiano but the most serious damage has been to production and 2 percent of its Grana maturing facilities, the consortium says. Padano production have been affected The consortium says in some cases, BIG REWARD OFFERED by the earthquake, which damaged ag- the wheels affected can be retrieved FOR YOUR... ing warehouses in Modena. In its ﬁrst and moved to other maturing facilities, • Cheese Trim • Cheese Fines assessment, Coldiretti found more than though only part of the wheels that have • #1 and Undergrades 300,000 wheels of Parmigiano Reggiano been damaged can be properly re-used in • Close Coded Products fell when the aging racks they were being the short term after obtaining the rele- • Natural, Processed, stored on collapsed, and an additional vant health authorization. In these cases, Imitation or Flavored 100,000 wheels of Grana Padano have only the cheese wheels that have already been affected. passed the quality control examination Call Dean, Eric or Jesse: (877) 914-5400 The earthquake’s total cost to the and 12 months of age can be consumed as region’s food industry, which also Parmigiano-Reggiano cheese, while the includes damage to rural buildings wheels under 12 months will be used for For more information please and equipment and loss of animals, is industrial purposes such as production visit www.whalenfoodsinc.com estimated at 200 million euros (approxi- of melted cheese or food preparations. mately $251 million), Coldiretti says. To date, the consortium says no For more information please STORAGE 13 Technicians from the Consorzio del Parmigiano-Reggiano producers or call 877-914-5400 • Formaggio Parmigiano-Reggiano are agers have been injured. CMN

holding for long. as of Thursday. sales and exports cannot accommodate PRODUCTION “I think inventory will catch up with Kaczor notes that butter production all of the increase in milk production Continued from page 1 us and we’ll see prices move lower,” he did not increase significantly in March, without lower prices. says. As far as how low the price could and reports including those from Dairy “With fluid milk sales continuing to colleges recess for the summer, surplus go, North says that is uncertain. Market News seem to indicate that $1.30 run below year-ago levels, the increase milk volumes may become more avail- “It’s tough to figure out where the was a bottom for butter at this time. in milk production needs to go for manu- able, thus manufacturers and handlers market should be at, especially when “Lower prices are being pushed out factured dairy products,” he says. “A say they are not out of the woods yet, we’re at a level that doesn’t really make to the consumer level, and that sells stronger recovery for the last half of the Dairy Market News says. sense,” he says. more butter,” he says. year is still possible, but it will require John Kaczor, a dairy market consul- Brooks says buyers may be willing to North adds that the butter market a slowdown in milk production along tant for the California Milk Producers pay current prices for cheese because seems to be moving toward where fair with good domestic sales and exports.” Council, says the industry is currently at they likely budgeted to pay at a higher market value is on a world basis. • International outlook a crossroads, and the timing of producers level. Bob Cropp, professor emeritus with Robin Schmahl, commodity broker beginning to really pull back on milking “I think there’s a chance we’ll see the University of Wisconsin Cooperative and owner of AgDairy LLC, Elkhart Lake, herds and production is uncertain. a weakening of prices through June,” Extension in his latest “Dairy Situation and Wis., notes that the United States is not He notes that some cooperatives in he says. Outlook” report, notes that there are some the only country facing a bearish outlook the West have implemented production Meanwhile, after a prolonged period positive signs for domestic sales for dairy. in the face of high milk production. controls on members, but even if this of lower prices, butter has seen gains “Both the Consumer Confidence “World prices are lower also, in part begins to curb milk production in that in recent weeks at the CME. Index and the Restaurant Traffic In- by increased production in other coun- region, other regions nationwide are The cash butter price, which was at dex continue to improve,” Cropp says. ties,” he says. still churning out a strong milk supply. $1.3000 per pound on May 8, has seen “These are positive signs particularly Schmahl says that production in North notes that the difference in a price rally since then, climbing to for cheese sales.” Australia increased 4.1 percent over the way milk is priced in California vs. $1.3550 last week, increasing another He adds that dairy export levels also the past 10 months to the highest pro- at the federal level “certainly has put 3 cents on Monday to $1.3850, and are positive. duction in six years. Production in New some pressure” on Western dairymen. bumping up a quarter cent to $1.3875 However, Cropp notes that domestic Turn to GLOBAL, page 12 “However, it doesn’t appear to have slowed production in the West yet, either,” he says. He adds that there has been some talk of impending hot weather tapering production levels a bit, but no one is certain this will occur. In addition, “most Midwestern dairymen aren’t yet seeing prices that lead to curbed milk production,” North notes. • Spot dairy prices In the face of a strong milk supply, cheese and butter prices have held their ground somewhat in recent weeks at the Chicago Mercantile Exchange (CME), analysts say. Kaczor says there seems to be a mindset that the worst has passed for dairy product price bottoms, and so more buyers that have been holding back now are stepping in. Cheddar barrel prices at the CME have held at $1.4500 per pound or higher since May 11, bumping up a penny last week to $1.4600 and then another penny on Wednesday to $1.4700, where it remained as of Thursday. (For today’s market prices, see chart on page 2.) Cheddar blocks held steady at $1.5000 per pound from May 11 through Wednesday, before bumping up a quarter cent Thursday to $1.5025. “Cheese is at a questionable level, given that it is lower internationally,” North says. “I wonder how buyers will continue to pay this price for cheese.” He adds that with the amount of cheese inventory in the United States, he doesn’t foresee these price levels

Reprinted with permission from the May 25, 2012, edition of CHEESE MARKET NEWS® © Copyright 2012 Quarne Publishing LLC; PH: (509) 962-4026; www.cheesemarketnews.com 12 CHEESE MARKET NEWS® — May 25, 2012 EVENTS CME Group and ADPI to hold dairy market WDPA Symposium scheduled for July 9-10 price-risk training June 18-19 in Chicago DOOR COUNTY, Wis. — The Wisconsin by the presentation of the 2012 WDPA Dairy Products Association’s (WDPA) Presidents Award. CHICAGO — Chicago Mercantile Ex- costs, marketing tools and strategies 2012 Dairy Symposium will be held July 10 begins with a breakfast and for risk management and volatility in change (CME) Group and the Ameri- here at the Landmark Resort July 9-10. the WDPA annual meeting. The main can Dairy Products Institute (ADPI) dairy markets. The conference also The symposium focuses on issues educational program will follow with will hold a conference designed to will feature panel discussions. impacting dairy processors with a full speakers including: Keith Murﬁeld, help dairy industry professionals A pre-conference introductory schedule of program speakers, social CEO, United Dairymen of Arizona; Dave learn concepts to manage price risk session designed for those who are events, a golf outing and opportunities Bush, COO, California Dairies; Dermot and volatility in dairy commodity new to futures markets or are newly to network with dairy executives. Carey, senior vice president, Darigold; markets here June 18-19. involved in risk management opera- The Dairy Symposium begins July 9 and Dr. Dennis Schafﬂer, senior direc- This conference, which will be tions will be offered. The program with a golf outing at the Orchards Golf tor, Elanco. held in the CME Group’s auditorium, will cover basic concepts of futures, Club in Egg Harbor, Wis. A shotgun start An executive roundtable on dairy will provide an introduction to hedg- options and price risk management: will begin at 10 a.m. and lunch, drinks markets also will bring dairy executives ing with dairy futures and options Registration is $395 for ADPI mem- and prizes are included in the golf together to discuss today’s dairy markets contracts. Topics will include: the bers and $445 for nonmembers. For fee. That evening, there will be a gala and share their views on how national mechanics of dairy futures and op- more information, or to register, visit reception, followed by the Presidents and global economies affect their com- tions, techniques for managing input www.adpi.org/events. CMN Award dinner banquet, highlighted panies. The symposium will conclude with a lunch and guest speaker, Beth Briczinski of the National Milk Produc- ers Federation (NMPF). To register, call 608-836-3336 or e-mail [email protected] to obtain a registration brochure. The deadline to secure a room at the Landmark Resort is June 8. The deadline to register for the Dairy Symposium is June 22. CMN

GLOBAL Continued from page 11

Zealand is expected to be up 6 percent over 2011, which already was up 10 ,%'1+2/$&3'%'4+255&%6$#%*/'+$/0+7-$%/%/8 percent over 2010. !"#$%&'( “This has resulted in lower prices in Uur%6r vph%9hv %Q qp%Dvr%69QD%hq%8H@%B %vvr many countries as co-ops cut prices to %%hrq%h%rr%rpvsvphyy%qrvtrq%%ury%qhv %vq % remain competitive,” he says. “This has !"#$%& h vpvh%yrh %ur%xr%ppr%vyrq%v%hhtvt% vpr% vx Er% ' (%! !% reduced farm profitability significantly, hq%yhvyv%v%ur%qhv %pqv%h xr which has been reflected in the past !"#'#% few globalDairyTrade auctions through Uuv%qhhqhuhys%psr rpr%vyy%v qpr%ur%sqhrhy%s 8H@%B %6qv v% weaker prices.” urqtvt%vu%9hv %s r%hq%v%p hp%Uvp%vyy%vpyqr)% Fonterra this week announced a !%T%Xhpxr %9 vr 30-cent decrease in its forecast Farm- Uur%Hrpuhvp%s%9hv %A r%hq%Pv 8uvpht%DG %%% Urpuvr%s %Hhhtvt%D%8% gate Milk Price for the current season Hh xrvt%Uy%hq%T hrtvr%s %Svx%Hhhtrr% to $6.05 per kilogram of milk solids '#()*+#'% Wyhvyv%v%ur%9hv %Hh xr% (kgMS) in response to softening global Pyvr%5%hqv t% Qhry%9vpv)%Uur'8uhyyrtr's'Ihvthvt'Svx' commodity prices. Hhhtrr'v'Uqh'@v r' Fonterra also announced a lower '#()*+',+)-$&.##*% opening forecast payout for the upcom- 69QD Hrir %Shr)%N"($ Uur% t h%hy%vpyqr%h% rpsr rpr%Pvhy%D qp IHrir %Shr)%N##$ ing 2012-13 season starting June 1, Trv%qrvtrq%s %ur%v%ur%qhv %vq %u%h r%rvur %r% reflecting an outlook for higher dairy s r%h xr% %u%h r%ry%vyrq%v%urv %sv % vx%hhtr production around the world leading to r%r hv%Uur% t h%vyy%pr %ihvp%ppr%s%s r )*#"&( lower international dairy prices. v%hq% vpr% vx%hhtrr) Srhvhpr%8uvpht% “Dairy production levels in the U.S. 9%Cry Aqhrhy%s%Crqtvt%vu%9hv %A r and Europe are high, while we continue Aqhrhy%s%Crqtvt%vu%9hv %Pv to have higher-than-normal production %Xr%Xhpxr %9 vr 8uvpht%DG %%% levels from New Zealand,” says Theo Xu%Tuyq%6rq) Spierings, CEO, Fonterra. “All this is 9hv % qpr %_ pr UyyA rr%Srr hv) occurring at a time of heightened un- Q puhr %s%qhv %vt rqvr%% '#%'"$& % certainties in global markets.” Hhshp r %hq%sq%phvr Meanwhile, milk production in Eu- Srr'ur'rvh ' hr's rope is running 2 to 3 percent ahead of */012&34&5267&8393:2;&0<;&:=2&252<:&>388&4288&?@:A 0 '('s 'h'vtyr' 'qiyr' last year, Schmahl notes. 4?&B2&4@62&:?&62C34:26&04&4??<&04&/?443B82D Dairy Market News notes that while )*#"&+,"'"-.$#%*/+!"$0&%/"( the weaker euro has made sourcing ,"8%'#"-+$/0+8"#+$00%#%*/$&+'"9%/$-+ Urqh%Hh%!(%! !% European dairy products more attrac- %/:*-9$#%*/+$#+;;;<$05%<*-8 tive, the international markets have been trending lower for finished dairy 116 N. York St., Suite 200, Elmhurst, IL 60126 ~ Ph: (630) 530-8700 ~ Fax: (630) 530-8707 ~ Email: [email protected] products, and buyers have shown reluc- tance to be market participants when For more information please visit www.adpi.org they perceive lower, future values. CMN