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| Dairy food groups file petition to allow use of sweeteners |
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Meanwhile, the International Dairy Foods Assoc. (IDFA) and National Milk Producers’ Federation (NMPF) have filed a petition with the Food and Drug Administration (FDA) requesting a modification of the standards for milk and other dairy products to allow the use of non-nutritive sweeteners.
The bottom line, according to National Milk’s Chris Galen, is that schools are increasingly trying to use food and beverages that have reduced calorie content due to concern over the obesity rate among kids.
“In order for us to continue providing flavored milk to kids in schools, we have to allow for what are called non-nutritive sweeteners,” Galen explained; things that are not sugar or high fructose corn syrup. They can be used to sweeten flavored milk and still be called milk, he said, but if you use “caloric substitutes” like aspertine or suculose, things that many people use to sweeten coffee or tea, you can’t call it milk because it doesn’t meet milk’s current standards of identity.
NMPF and IDFA is asking the FDA to update those standards of identity for milk to allow sugar substitutes because many schools have a requirement that what they purchase must fall under the legal definition of milk. The caloric substitutes are safe and effective in making low calorie milk, Galen said, but then it can’t be called milk under current standards.
I asked Galen if we might open the door to something we don’t intend by changing these standards and he answered that “It’s difficult to speculate on what could happen 10 or 20 years down the road but, what we know right now is that schools are really trying to reduce the caloric intake of the students served by the school lunch program and one of the areas they’re looking at is fluid milk.”
Flavored milk makes up about 70 percent of the milk served in schools today, according to Galen, and if it was removed, it would be “a huge blow to that very important market for the dairy industry.”
Speaking of milk and schools; kids don’t like the taste of wax with their milk, according to California dairy producer and Dairy Management Incorporated board member, Ron Koetsier. He talked about it at the recent World Ag Expo in Tulare, California and that conversation aired in Monday’s “DMI Update.
He said that was one of the reasons for the popularity of the plastic re-sealable milk containers, a point that was made known to him by another California dairy producer and one that has been confirmed by checkoff taste tests among kids.
“When you take that wax board carton and put that to your mouth, the wax taste that comes along with the milk changes the flavor,” Koetsier said, and it’s not just the size and shape of the plastic containers.
California is lagging in that respect, according to Koetsier, but it’s slowly coming into the state via the “New Look of School Milk” campaign. Processor resistance has slowed the process, he said, funding has to come from somewhere to make up the difference in the cost of the plastic versus the cardboard cartons.
Members of the nation’s largest dairy cooperative gathered in Kansas City this week for Dairy Farmers of America’s (DFA) 11th annual meeting.
DFA reported revenues of $11.7 billion and record-high net income of $61 million in 2008. DFA marketed about 61 billion pounds of milk last year, and paid farmers an average $18.60 per cwt., down from $19.38 the year before.
Addressing the sharp downturn in 2009 milk prices, DFA Board Chairman Tom Camerlo said the co-op had implemented additional producer services to help farmers stressed by high production costs. In addition, DFA president and CEO, Rick Smith, said the co-op will issue member patronage checks early this year to help farmers with cash-flow issues.
DFA suffered through some legal issues in 2008, having been fined by the Commodity Futures Trading Commission (CFTC) for 2004 cheese and milk futures market manipulation, and the revelation that unauthorized payments had been made to former leaders earlier this decade.
Smith said the co-op has gone through a period of “retrenching,” by addressing those issues. He believes all investigations by the Department of Justice, Internal Revenue Service, and CFTC have been concluded, and DFA will fight civil lawsuits related to the dairy market manipulation charges, Natzke said, and, by restructuring or dissolving unprofitable joint ventures and writing down debt, Smith said the co-op was well positioned for the years to come.
On a more hopeful note, Smith said the U.S. milk supply/demand imbalance was coming back into alignment and, as domestic and world economies improve, better financial days are ahead for DFA’s producer members.
Cheese price suffers setback
Cheese price recovery hopes suffered a setback early in the final full week of March following a couple weeks of gains, although Friday’s session ended on an up note. The block price closed Friday at $1.29 per pound, after dipping to $1.25 on Wednesday. The Friday close was down a quarter-cent on the week and 52 cents below that week a year ago. The barrels closed at $1.2975, unchanged on the week, but 45.25-cents below a year ago. Thirty four cars of block traded hands on the week and 39 of barrel. The lagging, NASS-surveyed, U.S. average block price slipped 0.1 cent, to $1.2226. Barrel averaged $1.2768, up 4.6 cents.
Cash Grade A butter closed the week at $1.1875 per pound, up a half-cent on the week, but 17.25 cents below a year ago. Four cars were sold on the week. Cash Grade A nonfat dry milk jumped a penny and a quarter on an unfilled bid, to 84.50-cents per pound, while Extra Grade remained trading at 85 cents.
The NASS-surveyed butter price averaged $1.1603, up 2.4 cents. Nonfat dry milk averaged 81.83 cents, up 0.3 cent. Dry whey averaged 17.38 cents, up 0.9 cent.
Price support purchases for the week amounted to 6.3 million pounds of nonfat dry milk, raising the cumulative total so far to 205.4 million. USDA announced that it will direct 200 million pounds of powder to the school lunch program and food banks, with additional quantities possibly directed to foreign aid programs. There was no word on resurrecting the Dairy Export Incentive Program. The U.S. Department of Agriculture’s latest Cold Storage report didn’t help the markets any. February butter stocks were pegged at 206.1 million pounds, up 17 percent or 29.6 million pounds from January, but down 2 percent or 4.3 million from February 2008. American cheese stood at 577.4 million pounds, up 5 percent or 25.8 million pounds from January. February stocks were up 64.3 million pounds or 13 percent above a year ago.
January data was revised up 12 million pounds.
Total cheese stocks amounted to 892.9 million pounds, up 3 percent or 27.6 million from January, and up 91.9 million pounds or 11 percent from a year ago. January stocks were revised up 3 million pounds.
Many believe the numbers were bearish, although Downes-O’Neill Dairy Economist Bill Brooks reminded us that cheese prices fell the morning before the Cold Storage data was out. The report also showed a “pretty healthy gain” in cheese stocks versus a year ago and the five year average, according to Brooks. |
| 4/2/2009 |
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