New Yogurt Ruling Fermenting

Yogurt is having an identity crisis.

The FDA set out to clear up the complex that’s been brewing since their last ruling in 1982 and after a National Yogurt Association citizen’s petition in 2000. Needless to say, things have evolved since then.

The ruling took effect July 12 and will allow for new “standards of identity for low-fat and nonfat yogurt” and update labeling requirements.

What it really means:  Additional products can be classified as yogurt under certain conditions as long as they are made with suitable milk-derived ingredients. The ruling also defines when certain labels can be used.

Positives: It encourages transparent food labeling (if you say you’re yogurt, you better be milk-based), and… ahem… might help out a certain other dairy labeling issue next June.

Downsides: The International Dairy Foods Association (IDFA) issued a formal objection to the FDA ruling. From their view, the new ruling doesn’t take into account a modernized view of yogurt and will remove some products from shelves. IDFA represents many yogurt manufacturers and offered feedback it says was “largely ignored” by the FDA.

Time will tell if the ruling has time to culture before the dust settles.

Glass (Over) Half Full

The dairy industry seems to be sitting at something of a crossroads.

And the proof is in the puddi….er, yogurt.

Let’s talk supply: Total milk output is growing and it’s not showing signs of stopping. USDA data is pointing to 2.4% growth in daily milk output over 2020, thanks to 82,000 more milking cows all producing 1.5% more milk. The growth is even pushing the U.S. cow herd to a size it hasn’t seen in more than 30 years.

Supply is so strong that areas like Texas have more milk than processing capacity. The state’s 1.32 billion pounds of milk had it flying by New York to become the nation’s fourth-largest milk producer.

Nice timing: Demand is also surging to pre-pandemic levels. Increased traffic at foodservice, re-opened schools, and elsewhere have kept dairy farms busy. Plus, you know what else doesn’t hurt? The estimated $500 million boost in dairy exports that the USDA predicts for 2021 over 2020 levels.

But don’t forget… even while Commodity Corner has been pretty red as of late, commodity prices are still relatively red hot. Feed costs for dairy farmers continue to be a big burden of a bill. Economists expect the high costs to last well into 2022.

Where this goes: With all signs pointing to no slow in supply, the pressure will be on the demand side of the equation to find a home for all that extra milk.

Milk’s Chill Factor

Milk’s got more going for it than just a mustache these days.

The backstory: With 67% of adults concerned about their stress and anxiety levels, mental health has become a mega-focus.

And as Americans look for new ways to manage stress naturally, one dairy duo is ready to serve them a new-age, scientifically-backed snack.

Stress-snack on this: milk phospholipids.

Launched by dairy ingredient-solutions brand NZMP and backed by colossal dairy cooperative Fonterra, the new products – think snack bars and stir-in powders – use naturally occurring lipids in milk to help consumers manage stress, stay focused, and feel positive. The effects are clinically proven.

A soundbite: “By extending our portfolio into the mental wellness space, we’re helping food brands tap into new consumers’ needs, such as mood-enhancement and cognitive performance under stress — issues that have recently amplified due to the pandemic.” noted Charlotte Ortiz with Fonterra.

Plus this: For Fonterra, it’s a strategic way to put its 4.5 billion gallons of milk to work in an era when global fluid milk consumption is declining while brain-boosting and energy-enhancing foods are on the rise.

Where this goes: Lipid-loaded nutritional bars, ready-to-mix powders, and supplement sachets are launching into the active lifestyle market in the very near future.

Not Your Average Milk-Making Method

Scientists in the Land Down Under may soon be putting your morning glass of milk under a lot of pressure.

The rundown: Naturo, an Australia-based company, just received the go-ahead to begin processing milk using the Haelen technique–an “alternative treatment to pasteurization of raw milk.”

The new method allows the milk to chillax under extreme pressure…killing harmful pathogens without turning up the heat.

To give you some context:

  • 161˚F for 15 seconds: The industry standard for traditional milk pasteurization.
  • 284˚F for 2 seconds: The industry standard for Ultra Heat Treatment (UHT) milk processing.

The best thing since pasteurization: Naturo founder and CEO Jeff Hastings is calling Haelen “the biggest breakthrough in the global milk industry since pasteurization in 1864.”

Since it’s not subjected to traditional heat treatment, researchers tout that the milk will have higher levels of B-vitamins and essential enzymes while maintaining its natural flavor.

Oh, and this: With Haelen killing more germs than pasteurization and UHT, the milk will stay fresh longer…like, way longer. It’ll stay delicious in the fridge for at least two months.

Where this goes: Naturo says Queenslanders can expect to get their first glasses of the “Wholey Milk Company” brand early this year, with plans to expand to the international market in 2022.

Canada’s #Buttergate Conundrum

The Canadian dairy industry is telling its 10,000 farmers to pause the palm oil.’

The issue: Buttergate.

Backstory: In late 2020, social media debates surfaced when consumers became curious about what was up with their butter. Many were noticing that their butter spreads were stiff and less spreadable at room temperature than normal. Canadian foodie and cookbook author Julie Van Rosendaal went as far as to call it rubber-like.’

And if there was any year to notice a change in the butter dish, 2020 was it. Sales jumped 12.4% during the pandemic.

So what led to the mystery dairy spread debacle?

Rumors spread that lower-grade butter was hitting retail shelves as it was diverted from closed schools and restaurants. Others simply blamed colder temperatures.

The lead culprit: palmitic acids.

The fatty byproducts of palm oil processing are in the spotlight as producers ramped up its use last year when demand for butter surged. The feed additive increases butterfat components in the milk without increasing the overall quantity. It became the perfect solution to supply the butter boom without flooding a liquid milk market with plummeting demand.

Worth noting: There’s no scientific evidence proving the palm oil derivative is causing the hardened butter…yet.

Where this goes: In late February, the Dairy Farmers of Canada officially asked producers to switch away from palm oil to feed alternatives while they investigate consumer complaints. An expert working group has begun the process of digging into the data to reveal the root issue.

The Dairy Squeeze

U.S. dairymen and women dream of the good ole days where market volatility and supply chain snafus were as common as oat milk.

But recent economic reports have the industry reflecting on 2020, a rollercoaster of a year. From dumping milk in April to cheering on dairy retail demand in September, dairy folks had all the feels.

Tough stuff: Another 2,500 U.S. dairies closed up shop in 2020, an 8% drop-off from 2019. Wisconsin felt the biggest sting, losing 610 dairies, while Minnesota and Pennsylvania saw 300+ closures each.

But not all is bad… The industry added 97,000 cows and average milk per cow output jumped 1.4% per day. Way to be efficient, ladies.

Looking ahead: When the USDA notes your future as unsettled at best,’ it can be a little unnerving. More supply issues and market volatility could be in the future as experts predict continued foodservice demand flux. Plus, lower government purchases for the Farmers to Families Food Box program won’t help.

Add in the industry’s attempts to combat workforce issues by advocating for H2A programs and immigration reform in D.C., and groups like the National Milk Producers Federation have a lot on their plates.

+ While we’re here: The pandemic boosted fluid and alternative milk product sales throughout 2020. One alt-milk brand, Oatly, is getting a lot of hype. The Sweden-based company with A-list celebrity backing [looking at you, Oprah] filed to go public this week.

USMCA: Drama in the Dairy Department

The U.S. dairy industry isn’t feelin’ the love these days from its neighbor to the North.

Dairy tariff-rate quotas – or TRQs – are the center of contention. Under the USMCA, which replaced NAFTA in July, Canada had pinky-promised to grow its TRQs. By raising that threshold, more U.S. dairy imports could flow into Canada without the bank-busting tariff slap.And this was a big deal for the U.S. For years, dairy groups had complained that Canada was not so neighborly when it came to accepting imports. Dairy issues were even the last topic resolved before signatures on the USMCA were inked. So naturally, drama has ensued.The rift: Canada allocated a chunk of those TRQs to its domestic processors. And those same processors will probably bypass importing high-value, retail-ready U.S. products and instead opt to pay pennies for lower-value milk goods.

AKA: The U.S. isn’t getting as much bang for its trade-loving buck as it would like.

U.S. politicians, trade groups, and dairy associations are up in arms.

Even former/future Secretary of Agriculture Tom Vilsack got in a punch. As he wraps up leading the U.S. Dairy Export Council, he noted, “We knew from day one that enforcement would be key to bringing the intended benefits home to America’s dairy industry.”

Canada’s response: We’re not breaking the rules, eh.

But that’s not stopping the U.S. Trade Representative Robert Lighthizer from revisiting the fine print. Starting last week, analysis of the TRQ obligations began to double check that Canada was doing its part.

Where this goes: Everyone has played nice in the newly-minted USMCA pact so far. Will this dairy drama cause the first big tussle? Stay tuned.

No Thanks, Dean Foods

Nearly 500 dairy farmers are up in arms over a legal shakedown with the ghost of Christmas past, Dean Foods.

The estate of the former dairy enterprise is seeking repayment from producers who shipped them milk in the 90-day preference period leading up to their bankruptcy last year. One Pennsylvania producer was sent a $50,000 bill.

How we got here: Within six months of filing for bankruptcy, Dean Foods was snatched up by Dairy Farmers of America [DFA]. A $433 million price tag bought DFA 44 properties that spanned fluid and frozen dairy processing capabilities. But that didn’t stop bankruptcy proceedings and technical legalities now have the estate chasing after former suppliers.

DFA’s not happy:

“We find it extremely disappointing that hardworking dairy farm families are now put in the position of having to incur costs, either in paying the amounts demanded, or obtaining legal counsel to defend themselves against these farfetched claims. We have no connection to the Dean Foods Estate and are disheartened by its actions.”

Timing couldn’t be worse: Record-breaking price volatility is creating a stressful year-end for dairy producers. And this comes on the back of a year when pandemic-related supply chain issues had farmers dumping milk even when food retailers couldn’t meet demand for dairy products.

And the dairy industry is not having it.

A handful of farm and dairy groups are stepping up to bat to defend the dairy community.

American Farm Bureau demanded the Dean Foods’ estate lawyers back off:

“Shame on these predatory lawyers for bullying dairy farmers at a time when many are struggling to keep their farms running. Someone needs to have the farmers’ backs and I’m proud to say AFBF is stepping-in to do just that,” noted Farm Bureau President, Zippy Duvall.

Where this goes: Expect a legal showdown in the weeks to come.