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Dairy Leaders Talk Strategies for Dairy Investment, Growth

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Dairy Leaders Talk Strategies for Dairy Investment, Growth Volume 37 February 3, 2017 Number 3 Dairy leaders talk strategies Like us on Facebook and follow us on Twitter! for dairy investment, growth A By Alyssa Mitchell LLC, Chicago; Sue Taylor, vice America (DFA), Michigan Milk creating new jobs. president of dairy economics Producers Association (MMPA) Waldvogel agrees that in- INSIDE ORLANDO, Fla. — Dairy and policy at Leprino Foods and Foremost Farms USA are in centives are important, but “no stakeholders discussed strate- Co., Denver; and Jay Waldvogel, advanced discussions to create one’s going to move somewhere ✦ Guest column: gies for investment and expan- senior vice president of strat- a stand-alone joint venture to that’s not economically viable ‘Dairy market volatility and sion of the U.S. dairy sector egy and global development build and operate a new cheese just for an incentive.” fundamental uncertainty.’ as well as factors at play in for Dairy Farmers of America, and whey production facility in “They can’t make a bad deal For details, see page 4. the market today and what to Kansas City, Missouri. Michigan. (See “Glanbia, DFA, good but can make a good deal expect in the future Tuesday Panelists note that while MMPA and Foremost Farms great,” McCully agrees. ✦ Nestle USA to move during the International Dairy farm milk production in the announce plans for new U.S. Waldvogel says most valuable headquarters to Virginia. Foods Association’s (IDFA) United States has grown by cheese and whey facility” in the are long-term incentives, such For details, see page 5. Dairy Forum here. more than 35 percent in the Jan. 27, 2017, issue of Cheese as job training programs and The session, “Where’s the past 25 years and U.S. dairy Market News.) long-term investment tools, that ✦ Kathleen Glass receives NCI Investment in Dairy?” was export volumes have grown by Waldvogel says picking a tie the plant to the community Laureate Award; Connie moderated by Marin Bozic, approximately 400 percent, location for a plant is not a rather than just money up front Tipton named Soaring Eagle. assistant professor in dairy unfortunately, reports of farm short-term or easy decision. — which can disappear quickly. For details, see page 8. foods marketing economics milk being dumped instead of Many factors go into choosing Taylor notes challenges in the Department of Applied processed have plagued the in- a site, including looking for a with feed prices, water qual- ✦ TCCA donates $1.5 million Economics at the University dustry in recent years, resulting region with a sustainable, long- ity and availability push many for OSU research facility. of Minnesota, and included in lower levels of investment in term quality milk supply and a current investments east of the For details, see page 12. panelists Michael McCully, processing capacity. good customer base. Rocky Mountains. owner of the McCully Group McCully notes that over the “You’re looking at invest- “The High Plains desert last 10 years, milk production and ments that are not quarterly, certainly remains attractive in production capacity have grown they’re not annually, they’re not terms of the intersect between in the West and Upper Midwest even generational. A plant you where cows are very comfort- INA CH but declined in the Southeast and put up in Michigan is going to able and productive,” therefore PASSP RT most of the Northeast. be there for 40, 50, 60 years. So bringing potential high profi t- A “I think one of the questions what do you need to make that ability at the farm level, without R R I VA L TO CHEESE is, do you put a plant in, thinking, choice, and if you’re making running into as many “not my ‘if you build it, they will come?’ a decision for 60 years, make back yard” issues,” she says. It’s really the opposite. You’re sure it’s the right one,” he says. “Whereas maybe 20 years going to go into an area where’s McCully notes it can be ben- ago, you might have been Foodservice fuels China’s there’s already a growing milk efi cial to research labor avail- looking more the California or supply and then build that plant.” ability — and whether there is New Mexico direction, I think demand for cheese imports • Location, location a union — and companies also those have reached a satura- McCully cites as an example may take into consideration tion point” with greater water Editor’s note: Passport to Cheese is Cheese Market News’ feature the recent announcement that state tax incentives that might concerns as well as regulated series exploring the dairy industries of nations around the world. Glanbia plc, Dairy Farmers of be available for expansion or Turn to GROWTH, page 11 a Each month this series takes an in-depth look at various nations/ regions’ dairy industries with coverage of their milk and cheese sta- tistics and key issues affecting them. The nations’ interplay with the United States also is explored. We are pleased to introduce our latest country — China. Dairy sector urges action 2016 U.S. cheese production tops By Rena Archwamety on Canada, trade with Cuba 12 billion pounds MADISON, Wis. — Cheese may be an unlikely fi nd among traditional WASHINGTON — The U.S. dairy industry this week continued to push back against Canada’s protectionist policies that are WASHINGTON — Total Chinese cuisine, but across China, restaurants are adding cheese to U.S. cheese production, the menu as Western-style foods like pizza, burgers and even tacos are effectively blocking American dairy exports into the country. A group of 17 dairy companies representing dairy farmers and excluding cottage cheese, gaining popularity among a growing urban, middle-class and young was 1.050 billion pounds in consumer base. processors from coast to coast has asked governors in 25 states to urge Canadian policymakers to uphold existing trade commitments December 2016, up 1.3 per- “Consumption of cheese has grown exponentially, and we expect cent from December 2015’s this trend to continue in the foreseeable future,” says Merle McNeil, with the United States and halt the imminent implementation of a national strategy they say would unfairly subsidize Canadian 1.036 billion pounds, ac- director of market research and analysis, U.S. Dairy Export Council cording to preliminary data (USDEC). “Most of the growth is driven by foodservice — pizza dairy products in domestic and global markets. “[U.S.-Canada] trade cannot be a one-way street with Canada released Thursday by USDA’s cheese, cream cheese, or cheese for making processed slices for use National Agricultural Sta- in foodservice.” expecting to enjoy the benefi ts of exporting its products of interest to our market while denying a sector accounting for hundreds tistics Service (NASS). (All Though it is growing, cheese remains a tiny part of people’s diets in fi gures are rounded. Please China. According to the International Dairy Federation’s World Dairy of thousands of jobs in rural America reliable access to the Canadian market,” the group says in its letter to the governors. see CMN’s Dairy Production Turn to CHINA, page 6 a Turn to TRADE, page 9 a Turn to NASS, page 10 a © 2017 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® — February 3, 2017 MARKET INDICATORS Chicago Mercantile Exchange Cash prices for the week ended February 3, 2017 CHEESE FUTURES for the week ending February 2, 2017 (Listings for each day by month, settling price and open interest) Monday Tuesday Wednesday Thursday Friday Jan. 30 Jan. 31 Feb. 1 Feb. 2 Feb. 3 Fri., Jan. 27 Mon., Jan. 30 Tues., Jan. 31 Wed., Feb. 1 Thurs., Feb. 2 JAN17 1.699 2,736 1.699 2,732 1.698 2,743 1.701 2,799 -- -- Cheese Barrels FEB17 1.671 2,575 1.667 2,609 1.680 2,612 1.686 2,601 1.705 2,606 Price $1.4600 $1.5175 $1.5775 $1.6975 $1.7075 MAR17 1.725 2,831 1.713 2,864 1.724 2,856 1.722 2,839 1.744 2,819 Change +1 1/4 +5 3/4 +6 +12 +1 APR17 1.751 2,501 1.740 2,572 1.738 2,576 1.742 2,583 1.753 2,584 MAY17 1.759 2,475 1.748 2,480 1.744 2,483 1.744 2,488 1.755 2,486 Cheese 40-lb. Blocks JUN17 1.774 2,281 1.768 2,309 1.764 2,335 1.765 2,340 1.771 2,329 Price $1.6900 $1.7075 $1.7500 $1.8500 $1.7400 JUL17 1.784 1,441 1.789 1,472 1.782 1,503 1.784 1,574 1.784 1,687 AUG17 1.795 1,314 1.798 1,360 1.790 1,393 1.795 1,427 1.797 1,456 Change +1/4 +1 3/4 +4 1/4 +10 -11 SEP17 1.795 1,269 1.797 1,352 1.790 1,382 1.791 1,421 1.792 1,457 OCT17 1.780 1,110 1.779 1,144 1.779 1,146 1.781 1,173 1.784 1,208 Weekly average (Jan. 30-Feb. 3): Barrels: $1.5920(+.1250); 40-lb. Blocks: $1.7475(+.0950). NOV17 1.770 1,343 1.768 1,364 1.768 1,386 1.770 1,401 1.771 1,419 Weekly ave.
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