Dick Groves
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Time To Get Engaged In Dietary Guidelines Process

Two federal agencies have officially kicked off the process of writing the next edition of the Dietary Guidelines for Americans and, at the 2023 Dairy Forum in Orlando, FL, this week, former US Secretary of Agriculture Dan Glickman had this piece of advice for the dairy industry: “Get engaged.”


For the dairy industry, the Dietary Guidelines are “as important as any legislative item” that Congress deals with, Glickman noted. The Dietary Guidelines are a way to inform the American public about what they should eat. The Dietary Guidelines not only impact school meals and federal programs, but they impact “what an average person who buys food thinks about when they go out and buy that food.”

So if the Dietary Guidelines aren’t science-based, or if they reflect a political bias, “it’s going to hurt you,” Glickman told his dairy industry audience. At the same time, the dairy industry has to come out with “well-documented, good evidence” about the impact of what it produces.

It’s “very hard to lobby the guidelines in the classical sense because it’s a science-based group, but every food group does try to influence those guidelines and you should be no different than anybody else,” Glickman said. With all the issues regarding food labeling and other information consumers get before they buy food, the Dietary Guidelines “are really important.”

Glickman’s comments are particularly timely considering that, just last week, the secretaries of the US Departments of Agriculture and Health and Human Services announced the appointment of 20 scientists to serve on the 2025 Dietary Guidelines Advisory Committee (for more details, please see the story on page 17 of last week’s issue).

To be clear, the DGAC does not write the next edition of the Dietary Guidelines; rather, the DGAC is tasked with reviewing the current body of nutrition science and developing a scientific report that includes its independent, science-based advice for USDA and HHS to consider as they develop the next edition of the Dietary Guidelines.

The first meeting of the Dietary Guidelines Advisory Committee will be held Feb. 9-10, and will be open to the public virtually.

Also, and more important for those who wish to take Glickman’s advice and “get engaged,” a public comment period for submitting comments to the DGAC has been opened, and comments may be submitted at www.regulations.gov; the docket number is HHS-OASH-2022-0021.

Notably, this isn’t just a “standard” comment period, which typically runs maybe 90 days and might be extended for another couple of months if deemed necessary. Rather, USDA and HHS said the comment period will remain open until late 2024, throughout the DGAC’s deliberations. That’s almost two years for the dairy industry to provide input to the committee.

So, how does the DGAC’s process work? Well, the 2020 Dietary Guidelines Advisory Committee was appointed in February 2019, and released its report in the summer of 2020, or roughly six months before the 2020 edition of the Dietary Guidelines for Americans was released.

If nothing else, the 2020 DGAC’s report was pretty detailed; it ran some 835 pages. Near the end of that lengthy report (starting on page 817), the report discusses the public comments it received during the course of its deliberations.

Notices published in the Federal Register alerted the public to written comment collection and their right to provide oral comments during two of five DGAC meetings the committee held, the DGAC’s report explained.
All DGAC meetings were open to the public; the meetings were made accessible in person and by webcast.

In addition, USDA and HHS updated the DietaryGuidelines.gov website, sent out GovDelivery notices, and posted social media messages on a steady basis to notify the public of opportunities for engagement throughout the DGAC’s work.

Partly due to these expanded efforts to involve the public, comments increased more than 60-fold from 2015 to 2020. Specifically, an eye-opening total of 62,339 comments were posted from Mar. 12, 2019, through June 10, 2020. Of these, 3,961 were unique and 58,378 were form letters.

Also, just during the initial comment collection period, which spanned Mar. 12 through June 17, 2019, 515 unique comments and 6,222 form letters were submitted, for a total of 6,737 comments. During the next phase of comment collection, which occurred from June 18, 2019, through June 10, 2020, 3,446 unique comments and 52,156 form letters were submitted, for a total of 55,602 comments.

And there was an opportunity to provide oral comments in person at two of the full DGAC meetings in 2019; about 125 people provided comments at those two meetings.

What happened with all those comments? As the DGAC’s report explained, all comment submissions were reviewed by trained federal staff and after being posted were viewable on regulations.gov. Committee members were regularly sent comment summaries organized by topic area and were given instructions for searching and reading the full comments on regulations.gov.

Once again, comments may be submitted at regulations.gov; the docket number is HHS-OASH-2022-0021. As Dan Glickman noted, every food group will be involved in this process; dairy needs to be involved as well
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Future Of Food, Including Dairy, Explored At CES 2023

The city of Las Vegas, NV, is hosting two food-related shows this month.
One of these shows is the Winter Fancy Food Show, which is sponsored by the Specialty Food Association and will take place Jan. 15-17 at the Las Vegas Convention Center.

The other food-related show in Las Vegas this month was CES 2023, formerly known as the Consumer Electronics Show. CES 2023 took place earlier this month.

CES, which is owned and produced by the Consumer Technology Association, is billed as “the most influential tech event in the world — the proving ground for breakthrough technologies and global innovators.” CES “is where the world’s biggest brands do business and meet new partners, and the sharpest innovators hit the stage,” according to the CTA.

CES also features every aspect of the tech sector, including, as it turns out, food, or, more specifically, food technology. Reflecting this, one of the “Partner Tracks” at CES 2023 was “The Spoon: Food Tech Conference,” which was presented by The Spoon, which describes itself as the “go-to source for food tech execs.”

Sessions at the Food Tech Conference had the following titles:
“Reinventing the Food System for a 10 Billion Person Planet”; “The Future of Farming”; “Scaling Towards a Trillion Dollar Alternative Protein Industry”; “The Tech-Powered Restaurant”; “From Food Replicators to Robots: The Kitchen of the Future”; and “Meals on Mars: The Race to Create Food in Space.”

In addition to various conference tracks and keynote speakers, CES 2023 also featured a trade show that’s described as “the largest tech show on the planet, showcasing exhibiting companies that represent the entire consumer technology ecosystem.”

And once again, this included food technology. Indeed, searching for “food tech” exhibitors brought forth a large number of companies, ranging from AgriBluTec Limited to Yo-Kai Express Inc.

A few of these exhibitors grabbed our attention, thanks in part to the pre-CES news releases they issued touting their presence at CES 2023, and also thanks in part to the fact that they are working in the dairy space, or at least the dairy alternative space.

For example, alternative protein development company Armored Fresh Technologies said it has developed its own technology that can produce alternative proteins that replicate casein. The company has applied its alternative protein to plant-based materials to create plant-based emulsifying proteins.

AFT said its focus is on developing plant materials that can function like animal protein using 100 percent plant-based raw ingredients, with the ultimate goal of replacing animal proteins with plant-based materials.
According to AFT, this technology that can be used to replace casein emphasizes the theory that “it is possible to produce substitutes for all kinds of animal dairy products, such as cheese, ice cream, and yogurt, on Mars by using only oxygen and water.”

Another CES 2023 exhibitor was Armored Fresh, which introduced a newly developed product called “Almond Milk American Slices.” Armored Fresh previously launched plant-based cheese cubes at CES 2022, and said those cubes “are receiving such a sensational response that the product is currently being sold at more than 200 stores in New York.”

The plant-based American slices that Armored Fresh introduced at feature “a soft and chewy texture, and high-quality flavor,” the company noted in a pre-show news release. The company had a goal of attracting 10,000 visitors during its time at CES 2023, “which was easily achieved as the enthusiastic response by the attendees spread at the event,” the company noted in a post-show news release. Even though Armored Fresh thought 2,000 samples a day would be enough to satisfy those coming to its stand, each day the grilled cheese was gone in the early afternoon.

Just out of curiosity, we visited the Armored Fresh website to check out the specifics of its American Slices. The product includes the following ingredients: fermented almond beverage (water, plant lactic acid culture, almond), coconut oil, modified starch mix (modified corn starch, modified starch mix), filtered water, carrageenan, salt, almond protein powder, citric acid, trisodium citrate, and oleoresin paprika for color.

Nutritionally speaking, the American Slices contain one gram of protein per 100-gram serving, along with 20 grams of fat, 14 grams of which are saturated fat, and 700 milligrams of sodium. The Armored Fresh website doesn’t include information on the product’s calcium content.

Finally at CES 2023, SK Group and its global partners showed what they called the “present and future of some of the world’s top eco-friendly carbon reduction technologies.” SK Group, which is building a diverse set of carbon-reduction technologies across different industries, displayed more than 40 related new technologies and products.

Featured technologies included: SK Inc. operated outdoor food trucks with “sustainable food.” The trucks offered visitors “eco-friendly foods” such as SK-Bingsu (Sustainable Korea-Bingsu), a Korean shaved ice cream dessert, using alternative milk protein from Perfect Day, and alternative protein cream cheese from Nature’s Fynd, both of which the company has invested in.

Based on CES 2023, it seems safe to conclude that future CES events will feature more and more tech companies looking to upend the “traditional” dairy industry
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117th Congress Left A Lot On The Table

The 117th Congress ended its work a couple of weeks ago and, if nothing else, this Congress can’t really be described as a “do-nothing” Congress.

For better or worse, lawmakers approved a number of significant pieces of legislation, including a bipartisan infrastructure bill and a massive, $1.7 trillion omnibus government spending bill, among many others.

But while the 117th Congress will be remembered in part for what it accomplished, it will also be remembered in part for what it didn’t accomplish. Arguably the most significant issue that Congress failed to address, at least from the standpoint of US agriculture, was immigration reform.

Almost two years ago, it appeared that the 117th Congress would actually successfully tackle the immigration reform issue, when the House passed the Farm Workforce Modernization Act with a bipartisan 247-174 vote.
Over 300 dairy, farm, food, business interest, and other organizations supported the Farm Workforce Modernization Act, and over the last half of 2022, pressure mounted on the Senate to address immigration reform.
But the push from agriculture and other groups was to no avail, as immigration reform failed to make it across the finish line.

This is an astonishing failure by Congress in general and the Senate in particular. And it doesn’t appear that the 118th Congress will pass any sort of immigration reform legislation, meaning it will likely be 2025 at the earliest before this issue is addressed.

That’s not the only dairy- and ag-related issue that Congress failed to address over the past two years. Back in April of 2021, bipartisan legislation was introduced in both the House and Senate that would prohibit the sale of any food that uses the market name of a dairy product (such as milk, yogurt, or cheese) unless the food: is the milk of a hooved animal; is derived from such milk; or contains such milk as a primary ingredient.

Alas, the Defending Against Imitations and Replacements of Yogurt, milk and cheese to Promote Regular Intake of Dairy Everyday Act (DAIRY PRIDE Act) failed to make it out of committee in either the House or the Senate.

However, this issue was addressed, somewhat, in the omnibus spending bill approved late last month. That budget deal expresses concern about the proliferation of products marketed using standards of identity for dairy products that do not contain dairy ingredients, and directs FDA to implement an updated enforcement approach to enforce against imitation dairy products.

Speaking of FDA, as noted in this space a couple of times over the past several months, 2022 wasn’t a very good year for that agency’s food safety efforts, to put it mildly.

With that in mind, legislation was introduced in both the House and Senate back in July to establish the Food Safety Administration, a single food safety agency that would incorporate the existing food programs within FDA, including the Center for Food Safety and Applied Nutrition, Center for Veterinary Medicine, and Office of Regulatory Affairs, into a separate agency.

Interestingly, the independent expert panel that issued an evaluation of FDA’s Human Foods Program examined FDA’s structure, and supported some sort of structural change to address the challenges facing that program.

One of the options suggested was to create a new operating division within the Department of Health and Human Services: a Federal Food Administration that is separate from a Federal Drug Administration, each with a commissioner reporting directly to the HHS secretary.

Such a change would likely require statutory change, which, it seems, would have been addressed by the Food Safety Administration Act. But that legislation failed to make it out of committee in either the House or the Senate. Given that the bill was sponsored only by Democrats in the House, and Republicans will control that chamber for the next two years, it’s safe to say the Food Safety Administration Act won’t see the light of day until 2025 at the earliest.

In late 2021, bipartisan legislation introduced in both the House and Senate, the Food Date Labeling Act, would have established what its sponsors call an easily understood food date labeling system. Specifically, under that bill, “BEST If Used By” would communicate to consumers that the quality of food products may begin to deteriorate after the date, while “USE By” would communicate the end of the estimated shelf life, after which the product should not be consumed.

Like the Food Safety Administration Act, the Food Date Labeling Act failed to make it out of committee in either the House or the Senate.

Finally, legislation was introduced in the House in March of 2021 that revises requirements for milk provided by the National School Lunch Program. USDA regulations require milk to be fat-free or low-fat and allow only fat-free or lowfat milk to be flavored. The Whole Milk for Healthy Kids Act of 2021 would have removed these restrictions and instead permit schools to offer students whole, reduced-fat, lowfat, and fat-free flavored and unflavored milk.

The legislation failed to make it out of committee, but its sponsor, US Rep. Glenn “GT” Thompson, is now the chairman of the House Ag Committee, so this bill’s chances of passage may improve over the next couple of years.

Congress can accomplish quite a bit in the dairy and food arena just by addressing bills that failed to pass in the 117th Congress
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Some Things The Dairy Industry Can Expect In 2023

Making predictions in the dairy industry, or any other industry for that matter, is always a bit perilous, but there are at least a few things the dairy industry can expect to happen in 2023.

First, but not necessarily foremost, is the passing of a new farm bill. This is a relatively easy prediction to make, given that the current farm bill expires at the end of September 2023.

What this piece of legislation will include for the dairy industry is still unknown, of course, but at least some general ideas can be gleaned from the 2018 farm bill. Specifically, that legislation created the Dairy Margin Coverage program, which replaced the Margin Protection Program that had been created under the 2014 farm bill; altered how the Class I skim milk price was calculated for the federal order program; and created the Milk Donation Program.

That was just the dairy title in the 2018 farm bill. Elsewhere in that legislation, the Dairy Business Innovation Initiatives was established; and the Healthy Fluid Milk Incentive Projects program was created.

In the 2023 farm bill, we would expect to see the Dairy Margin Coverage program continued and possibly tweaked a bit; and the Milk Donation Program, Dairy Business Innovation Initiatives and Healthy Fluid Milk Incentive Projects programs also continued, possibly with additional funding.

As far as the Class I skim milk price calculation is concerned, that leads to another prediction for what the dairy industry can expect in 2023: USDA will hold a national federal order hearing.

This expectation is based on at least a couple of things. First, it’s difficult if not impossible to find any dairy industry organization that doesn’t think federal order reforms are long overdue. And many of these organizations have formally approved proposals to update federal order rules.

Second, at the conclusion of an October 2022 industry-wide Federal Milk Marketing Order Forum organized by the American Farm Bureau Federation, AFBF and National Milk Producers Federation agreed on a joint statement regarding the need for federal order improvements.
Among other things, their statement said the following: “We anticipate the prospect of a hearing conducted by USDA in 2023 that would address FMMO price formulas, including all four Classes, as well as the Class I price surface.”

Not only is it pretty easy to predict a national federal order hearing in 2023, it’s also easy to make another federal order-related prediction: any final decision resulting from that hearing won’t be implemented until 2024 at the earliest.

As anxious as the dairy industry might be for federal order reforms, there is simply no getting around the fact that the process for amending federal orders is a mighty long one. USDA has a “brochure” on its federal order website that details the steps for amending a federal order under formal rulemaking procedures; there are 12 steps in all, starting with USDA receiving a proposal and ending with USDA holding a referendum and implementing the amendments.

It’s safe to say that, assuming that we reach at least Step 5 in this process (which is USDA holding a public hearing) sometime next year, there’s no way we then also reach Step 12, which would require USDA to issue both a recommended decision and a final decision. This will simply be far too complicated a proceeding for that to all happen in a single year.

So here’s an early prediction for 2024: USDA will issue a final decision stemming from its 2023 national federal order hearing. Whether dairy producers approve the federal order(s) as amended, or reject the proposed changes, effectively terminating the federal order(s), remains to be seen.

In 2023, we could also see some pretty significant changes at the US Food and Drug Administration. As noted in this space in our Sept. 30th issue, the year 2022 has been “especially difficult” for FDA.

Earlier this month, an external evaluation of FDA’s Human Foods Program was released; that report addressed that program’s culture, structure/leadership, resources and authorities, and provided recommendations that would equip FDA to fulfill its regulatory responsibilities, strengthen its relationships with state and local governments, and secure the US food supply for the future.

FDA Commissioner Robert M. Califf, who has been heading up the agency for less than a year (he also served as FDA chief for most of 2016 and early 2017), said the work of the independent evaluators will help inform a new vision for the FDA Human Foods Program, and that the agency is committed to providing a public update on the new vision at the end of January 2023 and additional public updates by the end of February 2023, including the planned leadership structure and any changes to key internal processes and procedures.

So quite possibly by the end of 2023 we’ll see a new structure in place for the FDA Human Foods Program. That will hopefully be a good thing, given how dysfunctional the Human Foods Program is currently, as evidenced by, among other things, how long it took FDA to issue a final rule to amend the federal standard of identity for yogurt.

Speaking of standards of identity, maybe 2023 will be the year in which the dairy industry finally sees a final rule that amends FDA’s regulations to provide for the use of fluid ultrafiltered milk in the manufacture of standardized cheeses and related cheese products.

The beginning of a new year brings renewed optimism for such things as long-overdue final rules..

FDA Evaluation Hits Home For Dairy Industry

The US Food and Drug Administration last week released an external evaluation of the agency’s Human Foods Program and, as reported on our front page last week, the evaluation found quite a few problems, to put it mildly.

In some ways, these findings are not really news to the dairy industry, which has had to deal with at least some of the problems identified in the evaluation for a number of years now.

One specific part of the evaluation sounded particularly, and frustratingly, familiar. In the section evaluating FDA’s culture, the report noted that the Human Foods Program approach of relying on consensus has “significant drawbacks for making decisions about taking regulatory action.”

The report continued: “In the absence of a collaborative, problem-solving posture enabled by a clear process supporting timely decisions, the scales can be tipped in favor of inaction, minimizing risk, and maintaining the status quo. This culture creates an environment where decision-making is unacceptably slow.”

It’s pretty easy to come with a couple of dairy-specific examples of where FDA’s decision-making has been “unacceptably slow” in recent years. In fact, in one case, it’s been non-existent.

First, it was 23 years ago this month that FDA was initially petitioned, by the American Dairy Products Institute, to provide for the use of fluid ultrafiltered milk in the manufacture of standardized cheeses and related cheese products. Shortly thereafter, FDA received a second, related petition to allow the use of filtered milk in standardized cheeses and related cheese products.

After receiving that second petition, it took more than five years for FDA to publish a proposed rule to provide for the use of fluid UF milk in the manufacture of standardized cheeses and related cheese products.

But as it turns out, that was the just the beginning of many delays on this proposed rule. More than two years after publishing that proposed rule, FDA, in February of 2008 reopened the comment period to seek further comment only on two specific issues raised by the comments concerning the proposed ingredient declaration.

That activity was followed by almost nothing for more than nine years. Then in August of 2017, FDA issued guidance to industry stating that it will exercise enforcement discretion regarding the use and labeling of fluid UF milk to make standardized cheeses and related cheese products.
That guidance was followed by almost three more years of inaction, followed, incredibly, by the reopening, yet again, of the comment period on the use of UF milk to make standardized cheeses and related products.

That comment period finally closed on Aug. 13, 2020.

The dairy industry continues to await a final rule on this issue, more than 23 years after the original petition was filed with FDA.
Meanwhile, about two months after ADPI submitted that initial UF milk petition, the National Yogurt Association petitioned FDA to amend the standards of identity for yogurt.

This rulemaking also moved at a snail’s pace. More than three years after receiving the NYA’s petition, FDA published an advance notice of proposed rulemaking that, in part, announced that FDA had received the NYA petition, and also asked for comments on the ANPRM. Roughly five years later, FDA published a proposed rule to amend the yogurt standards.

Technically, the process of updating the yogurt standards of identity dates back to 1981, when FDA published a final rule establishing standards of identity for yogurt. A number of objections were filed to that final rule, many of which requested a hearing, which prompted FDA to stay the effective date for certain provisions of the final rule.

In its 2009 proposed rule, FDA noted that, to date (that is, as of January of 2009), “due to competing priorities and limited resources, FDA has not held a public hearing to resolve these issues and the effective date for these provisions remains stayed.”

Finally, FDA published a final rule amending the yogurt standards in June of 2021, but the International Dairy Foods Association and Chobani objected and requested a hearing on several provisions of that final rule. Earlier this year, FDA clarified that the effectiveness of certain provisions of that final rule had been stayed, due to those objections.

And now, as reported on our front page this week, FDA announced that it is denying the requests for a public hearing and modifying the final rule in response to the objections, and lifted the stay of the effectiveness of the final regulation. The compliance date of the final rule is Jan. 1, 2024.

More than 40 years after it issued the original final yogurt standards rule, the external evaluation released last week found that FDA’s Human Foods Program is “significantly under-resourced” and additional resources “are critical to future success.”

More specifically, the Human Foods Program “urgently” needs additional personnel, financial, and information technology resources to perform its congressional mandate more effectively, the evaluation stated.
Changes at the FDA Human Foods Program are long overdue, and the external evaluation provides numerous helpful recommendations for improving the agency’s performance.

Let’s hope changes are made at FDA in a lot less time than it’s taken the agency to act on some recent, or rather not-so-recent, dairy industry petitions
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Monthly Cheese Statistics Resemble Previous Annual Numbers

There are quite a few familiar-looking statistics when looking over the cheese production figures contained in the monthly “Dairy Products” report published by USDA’s National Ag Statistics Service. And that’s a good thing, because it reflects how much the cheese industry has grown in recent decades.

For starters, the “Dairy Products” report includes cumulative cheese production statistics, and these figures each represent a milestone in US cheese production — as do the monthly cheese production statistics.

In October, for example, US cheese production totaled 1.17 billion pounds. In fact, the last time the US produced less than a billion pounds of cheese in a single month was in February 2018.

Historically, the first time the US produced more than 1.0 billion pounds in an entire year was in 1942, when cheese output reached a record 1.1 billion pounds. It then fell below a billion pounds in 1943, but has been above the billion-pound mark ever since. That includes 1947, when cheese production reached a record high of 1.18 billion pounds, or about 15 million pounds more than the US produced just in October of this year.

Cumulatively, just looking at quarterly cheese production, during the first quarter of 2022, US cheese production totaled 3.5 billion pounds, which was just slightly below cheese production for all of 1978; cheese production during the first half of 2022 totaled just under 7.0 billion pounds, which was just slightly above cheese output for all of 1995; and cheese production during the first three quarters of 2022 totaled 10.4 billion pounds, which is roughly the same as cheese production for all of 2010.

The largest cheese category, Italian-type cheese, also helps illustrate this statistical trend. In October, the US produced 495.4 million pounds of Italian cheese, which is about 42 million pounds more than was produced in the entire year of 1971.

Italian cheese production during the first quarter of this year totaled just under 1.5 billion pounds, or slightly less than was produced in all of 1985. During the first half of this year, Italian cheese production totaled 2.95 billion pounds, or slightly more than was produced in all of 1997. And Italian cheese output during the first three quarters of 2022 totaled 4.4 billion pounds, or exactly the same volume as was produced in all of 2010.

And through October, Italian cheese production totaled 4.91 billion pounds, slightly less than was produced in all of 2014.

Within the Italian cheese category, Mozzarella production during October totaled about 387 million pounds, or about 12 million pounds more than was produced in all of 1974.

Cumulatively, Mozzarella production during the first quarter of 2022 totaled 1.16 billion pounds, or slightly more than was produced in all of 1985; Mozz output during the first half of this year totaled 2.3 billion pounds, or slightly less than was produced in all of 1998; and production during the first three quarters of 2022 totaled 3.5 billion pounds, or exactly the same volume as was produced in all of 2010.

Through October, Mozzarella production totaled 3.9 billion pounds, slightly below production for all of 2014.

Also within the Italian cheese category, the US in October produced 42.4 million pounds of Parmesan, or about 3.2 million more pounds than in all of 1971.

Just during the first three months of 2022, US Parmesan production totaled 134.3 million pounds, about 4.0 million more pounds than was produced in all of 2004. Parm output during the first half of this year totaled 248.5 million pounds, or about 15 million more pounds than was produced in all of 2010. And Parm production during the first three quarters of 2022 totaled 366.7 million pounds, or almost 28 million pounds more than was produced in all of 2015.

Monthly and cumulative cheese export statistics also help illustrate how much cheese exports have grown over the years. For example, in October, US cheese exports totaled 81.3 million pounds, or about half a million more pounds than was exported in all of 1998.

During the first quarter of this year, US cheese exports totaled 229 million pounds, or about 10 million pounds more than exports totaled in all of 2007. Cheese exports during the first half of 2022 totaled about 505 million pounds, or about 10 million pounds more than exports totaled in all of 2011.

And cheese exports during the first three quarters of 2022 totaled 750 million pounds, or slightly more than was exported during all of 2017.
On a value basis, US cheese exports during October were valued at $194.6 million, or about $3 million less than the value of cheese exports for all of 2004.

The value of cheese exports during the first quarter of 2022 was $481 million, or about $51 million higher than in all of 2009. During the first half of this year, cheese exports were valued at $1.1 billion, roughly the same as for all of 2012. And during the first three quarters of 2022, cheese exports were valued at about $1.7 billion, or about $105 million more than in all of 2020.

Oh, and through October, cheese exports were valued at $1.9 billion, breaking the previous record for an entire year, $1.8 billion, which was just set last year.

Cheese production and cheese export milestones are being passed on an almost monthly basis these days, which serves as yet another reminder of just how much they’ve both grown, and set new records, over the past several decades
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Hard To Understate Importance Of Cheese To US Dairy Industry

USDA’s Economic Research Service recently released updated data on the supply and allocation of milkfat and skim solids by dairy product and, as reported on our front page last week, this data serves as yet another reminder of just how important cheese has become to the US dairy industry.

Specifically, according to the ERS figures, 42.1 percent of the US milkfat supply and 19.0 percent of the US skim-solids supply were used in cheese last year. Cheese is by far the leading user of milkfat, and is currently the second-leading user of skim-solids.

As far as milkfat use is concerned, cheese has been the leading user for as long as ERS has been tracking the supply and allocation of milkfat by product (the ERS figures date back to 2000). Indeed, since 2000, more than one-third of the US milkfat supply has been used in cheese, and since 2009, more than 40 percent of the US milkfat supply has been used in cheese.

Last year was the fifth time in the last seven years that 42.0 percent or more of the US milkfat supply was used in cheese.
While 20th-century statistics aren’t available, it’s a pretty safe bet that cheese wasn’t always such a significant user of the US milkfat supply.
There are a couple of ways to illustrate this point.

First, for a number of years from roughly the mid-1920s to the mid-1940s, per capita US dairy consumption on a milk equivalent, milkfat basis topped 800 pounds per year. During that period, per capita fluid milk consumption averaged around 300 pounds per year (more than twice the level it is today), and almost all of that fluid milk was whole milk.

Also during that period, per capita butter consumption ranged from somewhere around 16 pounds to over 18 pounds annually, while per capita cheese consumption ranged from about four to about 6.5 pounds.

Second, also during that era, US butter production greatly exceeded cheese production. For example, butter production in 1941 reached a record 1.87 billion pounds, a record that wasn’t broken until 2018. Cheese production in 1941 totaled 956 million pounds, or just slightly more than half the level of butter production.

What these historic figures tell us is that, as far as milkfat use goes, cheese is far more important today than it was 80 or more years ago.

And while the percentage of the milkfat supply used in cheese varies somewhat from year to year, it’s safe to say that its lead over the next-largest users, butter and fluid milk, isn’t going to shrink significantly in the near future.

That’s due to the facts that fluid milk sales continue to decline, which helps explain why fluid milk used 18.0 percent of the milkfat supply in 2000 and just 10.6 percent of the milkfat supply in 2021; and butter production, even though it’s topped 2.0 billion pounds for two consecutive years, actually declined in 2021 and is on pace to decline again in 2022.

Cheese production, meanwhile, continues to set new records every year, ensuring that it will remain by far the leading user of milkfat in the future.

As far as skim solids are concerned, as noted earlier, cheese is currently the second-leading user, behind only fluid milk. But there are a couple of points worth noting here.

First, the gap between skim-solids use in fluid milk and cheese continues to shrink. Back in 2000, fluid milk used over one-third of the US skim-solids supply (33.6 percent of the supply, to be exact), more than twice as much as cheese did (15.5 percent).

But that gap has narrowed slowly and steadily over the past two decades, and is now just over 1 percent (20.1 percent for fluid milk, 19.0 percent for cheese). Considering that the gap was over 4.0 percent as recently as 2017 (22.9 percent for fluid milk, 18.6 percent for cheese), it’s pretty safe to conclude that cheese will, in the next year or two, surpass fluid milk and become the leading user of skim solids.

Second, the number three user of skim solids is whey products, at 16.4 percent last year. That means that the “cheese complex” — cheese plus whey products — uses over 35 percent of the total skim solids supply.

And as is the case with cheese, whey products are using a higher percentage of the skim-solids supply than they were two decades ago. In fact, as recently as 2011, whey products used less than 13 percent of the skim-solids supply. Since 2012, however, whey products have used more than 15 percent of the skim-solids supply, including a record high of 18.8 percent back in 2014.

One other point worth mentioning: the US supply of both milkfat and skim solids continues to increase, pretty much every year. This is because US milk production increases pretty much every year (it last declined in 2009), and also, at least in the case of milkfat, because the average milkfat content of the US milk supply has risen impressively in recent years, from 3.66 percent as recently as 2010 to 4.01 percent in 2021.

Most if not all reputable projections point to continued increases in US milk production in the future, meaning that cheese production increases will be needed to keep pace with additional milkfat and skim-solids production.

Granted, there are other dairy products using growing volumes of milkfat and skim solids — sour cream, in the case of milkfat, and yogurt, in the case of skim solids, just to cite two examples — but these and other categories combined can’t match the importance of cheese when it comes to the use of rising volumes of milkfat and skim solids
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‘Science-Based’ Is Sometimes In The Eye Of The Beholder

USDA’s Food and Nutrition Service late last week released a proposed rule to revise regulations governing food packages provided under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

Although we didn’t mention it in our front-page story last week on these proposed WIC changes, USDA claimed, in the headline of the press release announcing the proposal, that the agency is proposing “Science-Driven Updates” to foods provided through WIC. The second sentence in USDA’s press release referred to “science-based revisions”

US Ag Secretary Tom Vilsack also mentioned science, noting that the proposed changes will ensure that WIC provides foods that “reflect the latest nutrition science to support healthy eating and bright futures.” The third paragraph of USDA’s press release also mentioned “the latest nutrition science.”

A similar phrase, “the latest nutritional science,” was also included in the summary of the proposed rule as it appeared in the Federal Register on Monday, Nov. 21. The summary specifically stated that the proposed changes are intended to provide WIC participants “with a wider variety of foods that align with the latest nutritional science...”

All of this talk about science got us thinking about the role of science in this specific rulemaking, and more generally in how the choice of which science to follow can influence such things as proposed and final rules.

USDA’s proposed rule explains how it developed the WIC food package revisions. Some eight years ago, USDA’s FNS contracted with the National Academies of Sciences, Engineering and Medicine (NASEM) to conduct a review of the WIC food packages, in accordance with the Healthy, Hunger-Free Kids Act of 2010, which required USDA to conduct a scientific review of the WIC food packages at least every 10 years.

NASEM’s review process included a review and analysis of available scientific evidence, including, among other things, the 2015-2020 Dietary Guidelines. NASEM released its review of WIC food packages in 2017.

Because NASEM’s review and recommendations were based on the 2015-2020 DGA, to ensure continued alignment with the current DGA (the 2020-2025 DGA was published in December 2020), FNS incorporated relevant updates into the proposed changes to the WIC food packages.

From this background, we can conclude that a fair amount of the “science” that went into the updated WIC food package proposal is based on the Dietary Guidelines for Americans (both the current edition as well as the previous edition). And those guidelines, as we’ve noted previously in this space, are flawed.

Part of the problem with the current Dietary Guidelines is timing. They were released at the end of 2020, which means they were largely written in 2020 and earlier. And in fact the process of developing the next edition of the Dietary Guidelines is already underway; USDA and the US Department of Health and Human Services USDA requested nominations from the public for the 2025 Committee June 15 through July 15, 2022, and aim to appoint the 2025 Dietary Guidelines Advisory Committee early in 2023.

If the 2020 DGAC timetable is followed by the 2025 DGAC, there will be several committee meetings in 2023 and then a final report will be released sometime around mid-2024. From there, USDA and HHS will develop the next edition of the Dietary Guidelines.

USDA is accepting comments on its proposed updates to WIC food packages until Feb. 21, 2023, or before the Dietary Guidelines Advisory Committee holds its first meeting, let alone releases its final report. When USDA previously updated the WIC food packages, it published a proposed rule in August 2006 and an interim rule in December 2007 that implemented revised food packages. A final rule was published in March 2014.

In other words, it would appear that USDA will possibly issue a final rule revising the WIC food packages well before the next edition of the Dietary Guidelines is released, meaning the final WIC food package rule will be based on the “latest” science that’s already several years old (the 2020-2025 DGA).

Then there’s the problem of what’s in the 2020-2025 DGA. Among other things, it’s recommended to limit intake of saturated fat to less than 10 percent of calories per day, a recommendation that has not only been roundly criticized by numerous scientists, researchers, nutritionists, journalists and others, but has also been refuted, or at least called into question, by numerous studies that have been conducted and published in recent years.

Interestingly, one of the questions that will be addressed by the Dietary Guidelines Advisory Committee is as follows: “What is the relationship between food sources of saturated fat consumed and risk of cardiovascular disease?”

Meanwhile, USDA is proposing a total of nine changes to milk and milk substitutions in the WIC food packages. Among the changes: remove cheese from the fully breastfeeding food package, which aligns with the DGA recommendation for reducing saturated fat consumption.

The bottom line on this WIC proposed rule is that USDA is using old and questionable science to reduce access to dairy products for WIC participants, while also acknowledging that it’s unsure about the relationship between food sources of saturated fat and health risks
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Class II Milk Also Being Depooled In 2022

Over the last three years or so, the dairy industry has gained considerable experience in the “art” (or is it science?) of depooling milk in federal milk marketing orders. While much of this depooling (and our reporting of such depooling) has focused on Class III and Class IV milk, as it turns out, a fair amount of Class II milk is also being depooled here in 2022.

Depooling has taken place in federal orders since the early years of the reformed federal orders (it may be recalled that federal order reforms mandated by the 1996 farm bill became effective on Jan. 1, 2000). In fact, by 2006, no fewer than five federal orders had conducted proceedings on their pooling provisions.

More recently, the California federal order has provided an interesting example of depooling on a monthly basis. Since the California order became effective in November 2018, the state has never produced less than 3.2 billion pounds of milk in a single month, nor has it ever had more than 2.6 billion pounds of milk pooled in a single month (the closest it came was in May of 2019, when the volume of milk pooled on the order totaled 2.58 billion pounds).

Obviously, there’s a lot of milk being depooled in California every month.
And still more recently, large volumes of milk have been depooled in Class III and Class IV in a majority of the federal orders. Just looking at some “general” statistics, in 2019, federal order Class III volume totaled 64.2 billion pounds, was above 5.0 billion pounds every month through August, and was only under 3.0 billion pounds in the final three months of the year.

In 2020, Class III volume was never above 5.0 billion pounds in a single month, and was under 2.0 billion pounds for six straight months (June-November). Class III volume that year totaled 32.9 billion pounds.
In 2021, Class III volume was under 2.0 billion pounds for five straight months (January-May), but rebounded during most of the second half of the year and peaked at almost 6.3 billion pounds in December. Class III volume for the entire year totaled 37.6 billion pounds.

Thus far in 2022, Class III volume has never dipped below 4.5 billion pounds, and has topped 7.0 billion pounds in four months (March, August, September and October). For the entire year, Class III volume will easily surpass the 2019 total (which was the first full year of the California order).

Meanwhile, Class IV volume totaled 30.5 billion pounds in 2019, and was below 2.0 billion pounds in just three months (January, February and March). Class IV volume rose to 41.5 billion pounds in 2020, and never dropped below 3.0 billion pounds in a single month.

Then in 2021, Class IV volume remained strong for the first 10 months of the year, dipping below 3.0 billion pounds just twice (in August and September), before dropping to just 1.5 billion pounds in November and then 1.2 billion pounds in December. For all of 2021, Class IV volume totaled 37.3 billion pounds.

That was a sign of things to come for Class IV volumes. Thus far in 2022, Class IV volume has only been above 2.0 billion pounds once (it reached 3.2 billion pounds in May) and was below 1.0 billion pounds in August, September and October.

This brings us to Class II, volumes of which have been far more stable in recent years than Class III and Class IV volumes have been. Specifically, Class II volumes between 2012 and 2021 ranged from a low of 14.7 billion pounds in 2014 to a high of 19.9 billion pounds in 2021 (keep in mind that there was no California order over the 2012-2017 period and 2018 only included the new California order for the final two months of the year).

In that record year of 2021, Class II volume never fell below 1.5 billion pounds except in December, when it fell to 1.3 billion pounds, and never reached 1.9 billion pounds in a single month (the high was 1.87 billion pounds in May).

Thus far in 2022, Class II volume has never been above 1.5 billion pounds (it peaked at 1.47 billion pounds in May), and fell as low as 1.1 billion pounds in September. For the entire year, it’s on pace to total maybe 15.0 billion pounds, probably somewhat lower, which would be far lower than the three years that included the California order and also close to its recent low of 14.7 billion pounds in 2014.

And what these lower Class II volumes have resulted in is lower Class II utilization overall. Specifically, through the first nine months of this year, Class II utilization was 9.72 percent, with a high of 11.6 percent in May and a low of 8.85 percent in September.

Historically, since 2012, Class II utilization ranged from 11.4 percent in 2014 to 13.9 percent in 2015, and then rose to 14.2 percent in 2020 and 14.5 percent in 2021, when large volumes of Class III milk were depooled (and when the California order was in effect, although in 2019, the first full year of the California order, Class II utilization was 11.5 percent).

Notably, Class II volumes would be a lot lower were it not for the Northeast order. That order is, by far, the largest Class II market, accounting for roughly one-third of the federal order Class II volume over the 2019-2021 period.

But this year, with large volumes of Class II milk being depooled in orders other than the Northeast, the Northeast is accounting for close to 45 percent of the federal order Class II volume.

Add Class II to the list of reasons why depooling will be addressed in the next round of order reforms
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Easy Math: US Cheese Exports On Billion-Pound Pace

There are times when interpreting dairy industry statistics can be pretty difficult, and then there are times, albeit much rarer, when interpreting these statistics can be downright easy. A great example of this latter case can be seen in the latest US cheese export statistics.

As reported in our lead story last week, US cheese exports during the January-September 2022 period totaled 750.5 million pounds, up 13 percent from the same period last year.

Put another way: cheese exports through the first three quarters of 2022 totaled exactly three-quarters of a billion pounds. Using some pretty basic math, we can conclude that US cheese exports for the entire year will total...1.0 billion pounds.

If only things were that simple. While there are certainly reasons to believe that US cheese exports will indeed reach 1.0 billion pounds this year, it would be a stretch to reach that conclusion simply based on what happened during the first three quarters of this year.

There are at least a couple of reasons for that. First, it’s sort of a statistical coincidence that cumulative cheese exports just happened to total three-quarters of a billion pounds through the first three quarters of this year.
After all, cheese exports during the first quarter of 2022 didn’t total 250 million pounds (they totaled 229.0 million pounds), nor did they total 500 million pounds during the first half of the year (although they were close, at 505.5 million pounds).

The obvious point here being that cheese exports fluctuate from month to month, and certainly also fluctuate from quarter to quarter.

Second, what are the odds that cheese exports during the fourth quarter will total exactly 250 million pounds? Not all that great — but not impossible, either.

Going back to 2013 (when cheese exports reached a then-record 695.6 million pounds), cheese export volumes have peaked in the fourth quarter twice: in 2013 and in 2016. For the other years, cheese exports peaked in the first quarter in 2014, 2015 and 2019; peaked in the second quarter in 2017, 2018 and 2020; and peaked in the third quarter in 2021.

Meanwhile, cheese export volumes also reached their quarterly lows in the fourth quarter twice: in 2014 and in 2020. For the other years, cheese exports reached their low in the first quarter in 2013, 2017 and 2021; reached their low in the second quarter in 2016; and reached their low in the third quarter in 2015, 2018 and 2019.

Thus far in 2022, cheese exports peaked at 276.5 million pounds in the second quarter, were at their lowest level at 229.0 million pounds in the first quarter, and were in between those volumes in the third quarter, at 245.0 million pounds.

From these statistics, we can conclude that cheese exports could potentially hit exactly 1.0 billion pounds this year, could fall just a bit short of that mark, or could surpass that level by a bit.

Why is it so difficult to predict what will happen with cheese export volumes in the fourth quarter of this year (or any quarter of any year, for that matter)? Because, in part, there are so many unpredictable factors impacting dairy trade.

For example, prior to reaching a record 885.4 million pounds last year, the US cheese export record had been 810.0 million pounds, set back in 2014.
Since then, it’s safe to say that all heck has broken loose in the global dairy market.

In the middle of 2014, Russia announced that it was banning the importation of cheese and other dairy product imports from the European Union, Australia, the US, Canada and Norway. Russia in 2013 had been the EU’s number one cheese export market, meaning the EU had to find other markets for its cheese exports. Not coincidentally, US cheese exports during 2014’s fourth quarter were at their lowest level since the first quarter of 2013, and then 2015 US cheese exports declined more than 110 million pounds from 2014’s record high.

Speaking of the EU, it was in 2015 that the EU lifted its long-time milk production quotas. As a result, EU cheese production rose impressively over the 2015-17 period, with cheese exports dipping slightly in 2015 before making a major leap in 2016. Again not coincidentally, US cheese exports fell another 67 million pounds in 2016, to about 630 million pounds, their lowest level since 2012.

The 2017-2020 period for US dairy trade was characterized by, among other things, tariff wars breaking out between the US and various other countries for various reasons. Also, the US in early 2017 withdrew from the Trans-Pacific Partnership agreement, which was expected to help boost US cheese and other dairy exports to countries such as Japan and Canada.

US cheese exports did post an impressive increase in 2017, reaching almost 750 million pounds, but then increased only slowly through 2020, when they reached 782 million pounds, still short of the 2014 record. Of course, there was a global pandemic in 2020, which helped contribute to a small decline in cheese exports that year, compared to 2019.

These are just a few of the factors that contributed to the volatility in US cheese exports over the past decade. On top of these issues, there have been factors ranging from exchange rates to supply chain problems contributing to trade volatility and unpredictability.

But US cheese exports have nonetheless grown impressively over the past couple of years, and will likely reach close to a billion pounds this year.
And exports of a billion pounds would help make for some easy statistical comparisons in the futur
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Do Dairy Product Prices Have A Long-Term Ceiling?

The CME cash market price for butter fell below the $3.00-per-pound mark on Monday, Oct. 31, ending a rather remarkable streak of 50 consecutive (business) days in which the butter price was $3.00 or higher, including a record $3.2675 per pound back on Oct. 6.

On top of that, butter became the first, and thus far only, dairy commodity sold on the CME cash markets to post an average monthly price above $3.00 per pound — and it did so twice. Specifically, the CME butter price averaged $3.1483 per pound in September and a record $3.1792 per pound in October.

But in stepping back and looking at the “big picture,” we have to wonder if these record-high butter prices are really that “remarkable,” or if they’re just part of ongoing price volatility and represent the most recent price peak — a peak that isn’t that much higher than the one reached several years ago.

It may be recalled that this isn’t the first time CME butter prices topped $3.00 per pound. The first time was back in 2014, when the CME butter price first reached $3.00 a pound on Sept. 12, hit $3.0600 per pound two days later, and then fell below $3.00 a pound the following Monday, Sept. 29, when it dropped to $2.9600 a pound.

For that entire month of September 2014, the CME butter market averaged a remarkable $2.9740 per pound. That was remarkable both because it was so much higher than the previous record-high monthly average butter price ($2.5913 per pound, set one month earlier) and because it was so much higher than a year earlier (the CME butter price had averaged $1.5244 a pound in September 2013).

The CME butter price topped $3.00 a pound again in 2015, for a total of four CME trading sessions, and reached a record high of $3.1350 a pound on Sept. 25. For the entire month of September 2015, the CME butter price averaged $2.6690 a pound, which not only was well below the previous September’s average but also ended up being well below the average two months later ($2.8779 per pound, in November 2015).

The point of this short history of recent butter price peaks is that the current peak, while impressive in the context of the last couple of years, is somewhat less impressive in the context of the last eight years.
Specifically, the new CME monthly butter price record of $3.1792 per pound is roughly 20.5 cents higher than the previous record, which was set some eight years ago. And the new CME daily butter price record of $3.2675 is 13.25 cents higher than the previous record, set seven years ago.

Meanwhile, CME cash cheese market prices have been above $2.00 per pound for significant periods of time this year. Blocks averaged above $2.00 a pound for five straight months (March-July), while barrels have averaged above $2.00 a pound for seven of the last eight months.

On a daily basis, the block price reached a 2022 high of $2.3975 back on Apr. 18. That was the highest block price since July 28, 2020, when blocks were falling from their record high of $3.00 per pound, which had been reached on July 13 (the block price on July 28, 2020, was $2.4400 per pound). And the barrel price reached a 2022 high of $2.4500 per pound back on May 17-18, which didn’t break the record high of $2.5300 per pound, set in late October of 2020, nor was it as high as the pre-2020 record of $2.4900 per pound, set in September of 2014.

So what’s the point of all these price statistics? It seems like, with the exception of 2020’s pandemic-related extreme block price volatility, there is sort of a “ceiling” on dairy product prices.

Granted, that ceiling is kind of “soft,” because prices do still set records from time to time, but generally speaking, it doesn’t seem like butter is likely to trade above, say, $3.30 a pound, nor are the block and barrel markets going to trade much above $2.50 a pound.

Keep in mind what’s been going on this year in the dairy industry. During the first half of 2022, milk production was down 1.0 percent in the first quarter compared to 2021’s first quarter, and then down 0.5 percent in the second quarter compared to a year earlier.

When was the last time that happened? We had to do some digging to come up with the answer to that question; it was actually in 2004 when milk production fell in both the first quarter (down 0.9 percent) and in the second quarter (down 0.6 percent) of the year.

So what else happened back in 2004? Well, that was the first year in which the CME block price topped $2.00. Specifically, blocks hit $2.0050 a pound on March 19 and eventually reached $2.2000 a pound over a period of about a week and a half in April.

That sort of puts this all in perspective. For all the volatility that the dairy industry has seen this century (and certainly before this century as well), with the exception of the anomaly of 2020’s $3.00 price record, the block price has only risen more than 20 cents above that 2004 record in four years: in November of 2007, when it reached $2.2025 a pound; in 2008, when it reached $2.2850 a pound; in 2014, when it reached $2.36 a pound in February, $2.4225 a pound in April and $2.45 a pound in September; and in September of 2019, when it reached $2.2375 a pound.

So when folks start talking about how, for example, the block price has increased by more than a dollar pound since early 2019 (which is true; the block price was $1.3700 a pound on Jan. 9, 2019), it can be pointed out that the block price peak this year was less than 20 cents higher than its 2004 peak.

Dairy prices seem to have a ceiling, and seldom exceed it
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Consensus On Federal Order Reforms Shouldn’t Be Necessary

The American Farm Bureau Federation convened a Federal Milk Marketing Order Forum in Kansas City, MO, on Oct. 14-16, at which the AFBF was joined by representatives of the National Milk Producers Federation, dairy cooperatives, processors, state dairy associations and dairy farmers from across the US.

The event, Farm Bureau noted, provided a platform for farmers’ voices to be heard while also answering the call from US Ag Secretary Tom Vilsack to bring the dairy producer community together to discuss federal order modernization.

While the event was termed “successful” by Farm Bureau, we have to wonder why such an event had to be held in the first place. Credit Farm Bureau for convening the national gathering, but it seems like Vilsack did the dairy industry no favors by calling on the dairy industry to “get in a room” and work collaboratively to build consensus and find solutions to federal order shortcomings. Vilsack specified that “the only way this works for the industry is to do the hard job of listening to one another,” according to Farm Bureau.

There are at least two major problems with Vilsack’s comments. First, they were made last December, or roughly 10 months ago. That was about three months after the Senate Ag Committee held a hearing focusing on the need to modernize federal orders.

More importantly, Vilsack’s comments were made long after pretty much everybody in the dairy industry had acknowledged the need to reform, or modernize, federal orders, if for no other reason than the massive depooling and Class I pricing issues experienced in 2020.

But under a best-case scenario, USDA will finally convene a federal order hearing sometime in 2023, with any changes stemming from such a proceeding unlikely to take effect until 2024. In a world that’s changing more rapidly than ever before, the snail-like pace of recognizing the need for change in 2020 or earlier but not implementing those changes until 2024 or later is a bit hard to take.

Another problem with Vilsack calling for industry consensus is that such consensus isn’t required before a federal order hearing can be called. That’s according to no less an authority than the US Department of Agriculture itself.

USDA’s Ag Marketing Service posts a handy “brochure” on its federal order website explaining the federal order amendment process. Nowhere in that brochure does it mention any need for industry “consensus.”

Instead, the brochure explains that any producer, handler, or other interested party “may submit a proposal for consideration and request a hearing to establish a new Federal order or amend one or more provisions of an existing Federal order.”

Once USDA receives a proposal, the agency has 30 days to issue an “action plan” to complete the hearing within 120 days, request additional information from proponent(s), or deny a request.

So, for example, USDA back in January of 2009 received petitions from National Milk Producers Federation and International Dairy Foods Association to: end the special treatment of so-called “producer-handlers”, and expand and clarify the regulatory exemption of small distributing plants.

A week after receiving those petitions, USDA announced that it was providing an opportunity for interested parties to submit additional proposals regarding the elimination of the producer-handler provision and the revision of the exempt plant provision. The agency received a number of additional proposals, as well as a fair number of comments opposing the IDFA-NMPF proposal, all by Mar. 16, 2009.

USDA did hold a hearing on those petitions, in May of 2009, then issued a recommended decision in October 2009, a final decision in March 2010 and a final rule in April 2010. That final rule became effective on June 1, 2010, or roughly 16 months after it received the initial petitions from IDFA and NMPF.

That proceeding was, of course, relatively uncomplicated in the world of federal order policy. What the dairy industry is likely looking at with this next national hearing is something even more complex and controversial than the make allowance proceeding, which got underway in September of 2005 with a proposal and hearing request from Agri-Mark, included a reconvened hearing, and finally ended with a final rule that became effective Oct. 1, 2008.

And, technically, that initial proceeding ended up being terminated, and the updated make allowances adopted in 2008 were part of a separate proceeding.

The point of this very brief history is that the process of amending federal orders is mighty complicated, but has been accomplished by USDA before and will be accomplished by USDA again, even without industry consensus prior to a hearing request.

And USDA makes clear how this process works, starting with the agency receiving a proposal, holding a public hearing, issuing a recommended decision, accepting comments and exceptions to that recommended decision, issuing a final decision, and then holding a referendum and implementing the amendments. In any recommended or final decision, USDA outlines the testimony received and then decides the outcome.

USDA already has some consensus on this issue: the entire industry agrees that changes are needed. What’s not needed is further delay while waiting for consensus on what those specific changes should be
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An Unhealthy FDA Proposal On Definition Of ‘Healthy’

The US Food and Drug Administration late last month released a proposed rule that would update the definition for the implied nutrient content claim “healthy,” and frankly, we find the proposal a bit sickening, for a number of reasons.

As reported on our front page two weeks ago, the updated “healthy” criteria emphasize the food groups and subgroups identified in the Dietary Guidelines, 2020-2025, as part of a healthy dietary pattern. This includes dairy, which is certainly good news. Under FDA’s proposed, updated criteria, food products would need to contain a certain amount of a “food group equivalent” from at least one of the recommended food groups or subgroups to be labeled “healthy.”

FDA is also proposing that foods continue to adhere to criteria regarding nutrients to limit to be labeled “healthy.” The agency wants to maintain sodium and saturated fat as nutrients to limit (which are already included in the current criteria), along with adding a limit on added sugars.

So what’s wrong with this proposal? For starters, it continues to single out all saturated fat as unhealthy, despite mounting evidence to the contrary.

Yes, FDA is proposing to increase the saturated fat limit for dairy products. Under the baseline saturated fat limit of 5 percent of the Daily Value, lowfat dairy (such as 1 percent milk) would not meet the criteria for bearing the “healthy” claim. FDA is proposing to revise the saturated fat limit for dairy to 10 percent DV or less of saturated fat per Reference Amount Customarily Consumed to allow lowfat dairy to bear the “healthy” claim, provided the other proposed criteria are met.

But of course that means traditional, full-fat dairy products won’t be able to bear the “healthy” claim, nor will reduced-fat dairy products. This despite the fact that, according to FDA’s own proposed rule, nutrients provided by foods in the dairy food group include calcium, phosphorus, vitamin A, vitamin D, riboflavin, vitamin B12, protein, potassium, zinc, choline, magnesium, and selenium; and the fact that about 90 percent of the US population does not meet dairy recommendations.

Also, regarding the science on saturated fat, the long-held view by the federal government, and many health “experts,” to limit saturated fat intake is simply not supported by recent research. Just to cite one example (and we could cite many), according to a review published two years ago in the Journal of the American College of Cardiology, there is “no robust evidence” that current arbitrary upper limits on saturated fat consumption in the US will prevent cardiovascular disease or reduce mortality.

Related to that point, that same JACC review noted that the healthfulness of fats is not a simple function of their saturated fatty acid content, but rather “is a result of the various components in the food, often referred to as the ‘food matrix’.” Indeed, we are hearing more and more about this “food matrix,” which basically means that food is more than simply the sum of its nutrients.

Perhaps the best way to look at the food matrix, at least when it comes to cheese, was described as follows by Dr. John Lucey and Rebekah McBride, of the Wisconsin Center for Dairy Research, in comments submitted to FDA in an earlier “healthy” comment period: “Perhaps overlooked due to the concerns about saturated fat, science is now finding that the chemistry of cheese, or the cheese matrix, is a unique type of food product and an excellent vessel for important nutrients.”

The science regarding sodium is also evolving, and isn’t quite as straightforward as once thought. The current Dietary Guidelines recommendation for sodium intake is 2,300 milligrams per day, while average intake is 3,393 milligrams per day, according to the most recent Dietary Guidelines.

But recent research indicates that average consumption is well within the range of what would be deemed “healthy.” Again, just to cite one example, a study published in the journal Nutrients last year concluded that current evidence indicates that most people around the world consume a moderate range of dietary sodium (three to five grams per day), that this level of intake is associated with the lowest risk of cardiovascular disease and mortality, and that the risk of adverse health outcomes increases when sodium intake exceeds five grams per day or is below three grams per day.

FDA believes the sodium level of 10 percent DV for a “healthy” claim is appropriate, but it seems like a lot of cheese products would be disallowed under this proposal.

Finally, when it released its proposed rule, FDA also noted that the agency is researching a symbol that manufacturers could use on the front of a package to show that their product meets the definition of the “healthy” claim.

Indeed, back in May, FDA issued a procedural notice on the preliminary consumer research it plans to conduct on symbols that could be used in the future to convey the nutrient content claim “healthy.” The symbol would be a “stylized representation” of the “healthy” nutrient content claim, FDA explained.

So imagine a typical supermarket dairy case a few years from now. Lowfat and fat-free dairy products, such as 1 percent and skim milk and fat-free yogurt, would include this new “healthy” symbol on their principal display panel, while other dairy products, such as the vast majority of cheeses, full-fat yogurts and whole milk, wouldn’t be able to use the symbol.

This would be a bummer for the dairy industry, and a bigger bummer for consumers
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An Impressive Leap In Per Capita Cheese Consumption

Increases in per capita cheese consumption, as the cheese industry has learned in recent years, are not guaranteed. Decreases are rare — they’ve happened just twice this century, most recently in 2020 — but they do occur from time to time.

While it’s kind of easy to take per capita cheese consumption increases for granted, it’s also worth noting that there are consumption increases and then there are consumption increases. The increase in per capita cheese consumption that occurred in 2021 most certainly falls into that latter category.

As reported on our front page this week, per capita cheese consumption in the US last year reached a record high of 39.40 pounds, up more than a pound from 2020 and up 0.81 pound from the previous record high, set in 2019.

There are at least three impressive aspects to these latest per capita consumption statistics. First, the US is inching ever-closer to 40 pounds, which will be an amazing achievement when it occurs (possibly as early as this year). It will mean that per capita cheese consumption has increased by 10 pounds since 2001, when it was 30.05 pounds, and has more than doubled since 1982, when it was 19.90 pounds.

Per capita cheese consumption first reached 10 pounds in 1967, first topped 20 pounds in 1983, and first topped 30 pounds in 2001. Just from this information, we can conclude that per capita cheese consumption is due to top 40 pounds in the next year or two.

These are impressive gains, considering when per capita cheese consumption first reached 10 pounds. According to statistics dating back to 1909, per capita consumption back then was just 3.8 pounds.
Obviously, the consumption milestones are more frequent these days than they were a century ago.

Second, the per capita increase in 2021 was a mighty impressive increase, at almost 1.2 pounds over 2020. To put that in some recent historic perspective, there has been exactly one other year this century in which per capita cheese consumption increased by more than one pound; that was in 2016, when per capita consumption of 36.70 pounds was up 1.31 pounds from 2015.

There is some context to keep in mind with these figures. Among other things, last year’s big jump in per capita cheese consumption followed a rare decline in 2020; thus, while the jump from 2020 was mighty impressive indeed, the increase from 2019 was not quite as impressive, at 0.81 pound.

Also, that big jump in 2016 followed seven consecutive increases in per capita cheese consumption. That was the largest per capita increase in that string of seven straight increases, which makes it all the more impressive.

Third, while there are generally at least a few negatives when the increases in per capita cheese consumption are relatively small, last year’s increases were pretty much across the board. There are a lot of positives here, and we’re hard-pressed to find many negatives.

For example, per capita American-type cheese consumption reached a record 16.06 pounds last year, with both Cheddar and other American-type cheeses setting new record highs.

Per capita Italian-type cheese wasn’t quite as impressive, because, although per capita consumption of the category as a whole and both Mozzarella and other Italian cheeses increased, both Italian-type cheese as a whole and Mozzarella fell short of their record highs, which were set back in 2019.

Despite this relative “flatness,” it’s worth noting that per capita Mozzarella consumption last year was up one pound from 2015, while per capita consumption of Italian cheeses other than Mozzarella has increased by more than one pound since 2002.

Among some other cheese categories, per capita Swiss cheese consumption in 2021 was unchanged from 2020 but down from many previous years, including a 21st century high of 1.24 pounds in 2005; per capita consumption of Hispanic cheese, Muenster and Brick increased just 0.01 pound from 2020, although both Hispanic cheese and Muenster set new records; Cream and Neufchatel consumption reached a new record high of 2.86 pounds; and consumption of other cheeses typically made from cow’s milk reached 1.54 pounds, up 0.20 pound from 2020 and the highest level since 2016’s 1.57 pounds.

Oh, and imported cheese not from cow’s milk reached 0.29 pound, up from 0.25 pound in 2020.

Among “processed” products, total per capita processed cheese consumption was 8.24 pounds last year, up from 6.70 pounds in 2020 and the highest level since 2003’s 8.27 pounds; with per capita process cheese consumption reaching 5.82 pounds, up almost a full pound from 2020; and per capita consumption of cold pack, cheese foods, and other foods and spreads reaching 2.42 pounds, the highest level since 2015’s 2.84 pounds.

All in all, 2021 was a mighty impressive year when it comes to per capita cheese consumption, one of the more impressive years in recent memory.
It’s worth keeping in mind that this new per capita cheese consumption record is occurring at the same time US cheese exports are setting new records.

Meanwhile, there are countless cheese plant expansions and new cheese plants being built around the US these days, with this additional capacity coming online in the next several years. With rising per capita consumption, coupled with growing export sales, it looks like all of this additional cheese will find a market, be it in the US or in foreign markets
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