Dean Foods reported lower milk costs and higher profits. Saputo ends use of ultrafiltered milk imported from the U.S. Also, dairy companies from California to New York announced new innovations. This and other U.S. dairy industry news can be found here.
Lower milk prices drive Dean profits
Despite lower sales volume, lower raw milk costs improved profitability for Dean Foods.
First-quarter sales volume fell 3.2 percent from a year earlier; sales value fell from $1.88 billion from $2.5 billion during the first quarter of 2015. Dean Foods' share of U.S. fluid milk volumes decreased to 34.6 percent in the first quarter of 2016.
Yet the Dallas-based company posted first-quarter earnings of $39 million, compared with a loss of $74 million for the same period a year ago.
The first quarter 2016 average Class I Mover, a measure of raw milk costs, was $14.49 per hundredweight, down 11 percent from the fourth quarter of 2015 and nearly 14 percent less than the first quarter of 2015.
Gregg Tanner, Dean's CEO, expects sales volumes and raw milk costs to decline further in the second quarter of 2016.
The second quarter 2016 average Class I Mover is forecast at $13.49 per hundredweight, about 7 percent less than the first quarter of 2016 and down 15 percent decline year-over-year.
Agropur fires shot in Canadian-U.S. border battle
Agropur Cooperative became the first Canadian dairy processor to halt use of imported diafiltered milk from the U.S. under a temporary national program to encourage the use of Canadian milk in cheese manufacturing.
The targeted pricing program gives dairy processors access to Canadian “Class 4(m)” milk protein concentrates at reduced prices, effective May 1 through July 31, 2016.
Diafiltered milk, called ultrafiltered (UF) milk in the U.S., was given duty-free access into Canada under the North American Free Trade Agreement (NAFTA). However, in 2008, Canada adopted cheese-manufacturing standards requiring a minimum percentage of protein used in making cheese must be sourced directly from fluid milk.
The temporary program does not ban UF imports from the U.S. It does, however, make those products less economically competitive for use by Canadian processors.
Read Progressive Dairyman’s full article.
Umpqua Dairy wins ‘Quality Chekd’ awards
Oregon-based Umpqua Dairy Products Company received the 2016 Production Excellence Award in cultured products and ice cream categories within the Quality Chekd membership
The selection criteria includes a plant audit and evaluation of all plant processes and systems for assuring product quality, as well as monthly laboratory test scores.
Quality Chekd Dairies, Inc. is a member-owned organization of 26 independent dairy processors with 59 manufacturing facilities located throughout the United States and Colombia.
Saputo names new president
Kai Bockmann was named president and chief operating officer (COO) of Saputo Inc., effective April 1. He succeeded Dino Dello Sbarba, who retired.
Bockmann, who joined Saputo in January 2012, will also continue to serve as president and COO of the company’s international sector. Sbarba will serve as his senior advisor.
Saputo, one of the 10 largest dairy processors in the world, produces, markets and distributes cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients. It is the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, the third-largest dairy processor in Argentina, and the fourth-largest in Australia. In the U.S., Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products.
Humboldt Creamery organic ice cream headed to Walmart
California-based Humboldt Creamery will distribute its super-premium organic ice cream in more than 3,000 Walmart stores nationwide.
The line initially includes four organic flavors: vanilla, chocolate, strawberry and mint chip, sold in 40-ounce containers.
Humboldt Creamery was founded in 1929 and has been owned by the Foster family since 2009. It produces a variety of premium organic dairy products, including fluid milk, ice cream, butter, cottage cheese and sour cream.
Alpina expanding yogurt plant
New York yogurt producer Alpina Foods Inc. will expand its Batavia plant for a separate new line of drinkable yogurt products. The $1.1 million project is expected to start this summer, according to Buffalo Business First.
Dean acquires Friendly’s Ice Cream
Dean Foods Company agreed to acquire Friendly's Ice Cream for $155 million in cash. The transaction is expected to close late in the second quarter of 2016.
Friendly produces ice cream and other frozen dessert products, with distribution in more than 8,000 retail outlets in the northeastern U.S. It reported $166 million in net sales in 2015.
In addition to acquiring Friendly's manufacturing and retail ice cream business, Dean Foods will acquire the Friendly's trademark and all intellectual property associated with the ice cream business.
Friendly's Restaurants will continue to be owned and operated by an affiliate of Sun Capital Partners, Inc. and will license use of the Friendly's trademark under a license agreement with Dean.
Prairie Farms adding to specialty milk lineup
Illinois-based Prairie Farms Dairy is adding to its Chef’s Splendor line of specialty milks for summer.
Three new flavors, blended with 100 percent real milk, include Honey Cookie Milk, Dark Chocolate Truffle and Sea Salt Caramel. The company has introduced 21 specialty milk flavors since 2015.
Prairie Farms is a Midwest dairy cooperative with more than 600 farm family members. It has 35 manufacturing plants, more than 100 distribution facilities with a footprint covering more than 30 percent of the U.S. The co-op's annual sales top $3 billion.
Hiland Dairy launches organic milk
Missouri-based Hiland Dairy Foods Company added organic milk to its product line, available in gallons and half gallons.
Founded in 1937, Hiland operates processing facilities in Arkansas, Kansas, Missouri, Nebraska and Oklahoma. It has distribution in 11 states throughout the Midwest.
Burnett Dairy Cooperative introducing cheese flavors
Wisconsin-based Burnett Dairy Cooperative will introduce new flavors of string cheese and artisan cheese at June’s Dairy-Deli-Bake Expo in Houston, Texas.
Burnett Dairy’s new Garden Veggie variety of natural mozzarella string cheese joins the cooperative’s line, which already includes Pepperoni Pizza, Zesty Teriyaki, Hot Pepper Beef, Smoked and Creamy Original.
Burnett Dairy said its Wood River Creamery artisanal cheese line will introduce five new flavors, and be sourced from dairy farms providing milk not produced using recombinant bovine somatotropin (rBST).
Midwest Dairy Association urges ‘Dairy 3 for Me’ pledge
The Midwest Dairy Association (MDA) is urging consumers to commit to three daily servings of dairy products during June Dairy Month.
Recently, the 2015 Dietary Guidelines reaffirmed dairy’s important place in the diet by maintaining its recommendation that people ages nine and older consume three servings of low-fat or fat-free dairy foods every day.
In celebration of June Dairy Month, consumers can visit the MDA website and take the “Dairy 3 for Me” pledge.
By committing to the pledge, consumers are eligible to win three weekly prizes, and be entered in a drawing for a $250 retail gift card at a grocery store.
March U.S. restaurant sales, traffic mixed
Same-store sales and customer traffic results were mixed in March, but National Restaurant Association members remain cautiously optimistic about business conditions in the months ahead.
The NRA’s Restaurant Performance Index (RPI) consists of two components: the Current Situation Index (measuring current trends), and the Expectations Index (measuring restaurant operators' six-month outlook).
Forty-six percent of restaurant operators reported a same-store sales gain between March 2015 and March 2016, while 38 percent reported a sales decline.
Thirty-eight percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), down from 46 percent who reported similarly last month. Only 13 percent of restaurant operators expect their sales volume in six months to be lower. PD
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Dave Natzke
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