Digest Highlights June fluid milk sales slump, but not all the news is bad Italian mozzarella maker to build plant in northeast Indiana California doubles down on digester projects FMD detection possible through bulk milk sample Pennsylvania unveils Dairy Development Plan
June fluid milk sales slump, but not all the news is bad
Only organic whole and reduced-fat milk (2 percent) were able to withstand a June 2018 downturn in sales, according to the USDA’s Dairy Market News. At 3.6 billion pounds, overall sales of packaged conventional and organic fluid milk were down 4.1 percent compared to the same month a year earlier. The June total is quite likely the lowest volume for a single month on record.
June 2018 sales of conventional products totaled 3.4 billion pounds, down 4.2 percent from the previous year. Sales of organic products, at 202 million pounds, were down 3.1 percent. Organic represented about 5.6 percent of total sales for the month.
Through the first six months of the year, U.S. fluid milk sales totaled 23.4 billion pounds, down 2.1 percent compared to the same period a year earlier.
The U.S. figures represent consumption of fluid milk products in federal milk order marketing areas and California, which account for approximately 92 percent of total fluid milk sales in the U.S. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, non-food stores, schools, the food service industry and home delivery.
Year-to-date 2018 sales of conventional products totaled 22.1 billion pounds, down 12.2 percent. January-June 2018 sales of organic products, at 1.3 billion pounds, were down 0.4 percent. Organic represents nearly 5.5 percent of total sales for the year.
Not all the news related to fluid milk sales is bad.
Short term, most of the country is experiencing an uptick in Class I sales as bottlers fill school pipelines. Also, the USDA will purchase $50 million worth of fluid milk (estimated at between 12 million to 15 million gallons) for distribution to domestic food assistance programs. These purchases are separate from any USDA dairy product purchases under another program designed to provide financial assistance to dairy farmers who have been negatively impacted by the ongoing tariff wars.
Longer-term, IRI data provided by Dairy Management Inc. shows retail sales of flavored milk are in a fourth year of growth. Flavored milk represents about 6 percent of retail milk sales volume, but in some markets, it has captured a 10 percent share of sales.
Whole milk continues to be a growth segment; it has a 38 percent share of total retail milk volume, up from 28 percent in 2012. IRI data revealed 60 percent of households purchased whole milk over the past 52 weeks; the average buyer purchased 18 gallons.
Lactose-free has also been a continuous growth driver for milk, accounting for a 4 percent share of retail milk volume, more than double its share in 2012. The average number of lactose-free milk items in a store has increased from 10 to 18.
Italian mozzarella maker to build plant in northeast Indiana
A commercial organic cheese plant will be built in Huntington County, Indiana.
Golfo di Napoli Dairy, a newly established venture, will be owned and operated by a team of fourth-generation cheese producers from Italy. The company, which has already acquired the land, plans to build the $9.5 million, 3,000-square-foot plant on a 40-acre site along Interstate 69 at Exit 278 in Warren, Indiana.
Construction is expected to start in September once the appropriate permits are finalized. Golfo di Napoli Dairy expects to begin production in February 2019. The plant will utilize certified organic milk from Fair Oaks Farms to produce mozzarella, burrata, ricotta, provolone and other cheeses made using the pasta filata technique, which is traditionally used in the Naples region.
“We chose Indiana because we believe that it is the perfect location to produce authentic Neapolitan mozzarella, serving customers across the Midwest,” said Antonio Somma, president of Golfo di Napoli Dairy. “This facility and our partnership with Fair Oaks Farm will allow us to expand our cheese production expertise to the U.S.”
The Indiana Economic Development Corp. (IEDC) offered Golfo di Napoli Dairy up to $300,000 in conditional tax credits based on the company's job creation plans.
California doubles down on digester projects
Forty additional dairy digester projects have been awarded grants under the California Department of Food and Agriculture’s (CDFA) Dairy Digester Research and Development Program (DDRDP). With 40 projects already in operation or in various stages of construction, the state will soon have a total of 80 digesters.
The DDRDP is estimated to deliver the largest greenhouse gas reduction of all investments in California’s climate action portfolio to date. CDFA estimated that the initial 64 projects funded will reduce greenhouse gas emissions by 13 million tons in their first 10 years of operation.
Digesters are one of the three main strategies California’s dairy farmers are using to voluntarily achieve a greenhouse gas emission reduction target established in the state. The goal is to reduce methane emissions from dairy manure management by 40 percent below 2013 levels by 2030.
With continued grant funding, it is conceivable to have 100 to 120 digesters operating within the next four to five years, according to Dairy Cares, a statewide coalition supporting economic and environmental sustainability and responsible animal care.
California’s earlier digester projects were designed to create electricity, but the state is currently investing in projects that will create renewable natural gas (RNG) to be injected in a biomethane pipeline and will be used as fuel in trucks and buses. The state’s Public Utilities Commission will select at least five pilot projects to create centralized infastructure to clean, condition and inject biomethane from multiple digesters. The first projects will be complete by the end of the year.
While the DDRDP is already making great progress, a newer program – the Alternative Manure Management Program (AMMP) – is just getting started. The AMMP provides financial incentives for alternative (non-digester) manure management technologies and strategies to avoid the creation of methane. In the inaugural year (2017), 18 grants were awarded.
FMD detection possible through bulk milk sample
Dairy farmers and animal health professionals may have a faster and easier means to detect the foot-and-mouth disease (FMD) virus by testing pooled milk samples.
Collaborating on the study were researchers at The Pirbright Institute, a United Kingdom-based virus diagnostics and surveillance center, and the USDA Animal and Plant Health Inspection Service (APHIS) Foreign Animal Disease Diagnostic Laboratory.
Based on their report in Veterinary Microbiology, the test is potentially sensitive enough to detect an infected cow in a herd of 100 to 1,000 cows through the sampling of bulk milk storage. The test is able to generate results in about four hours and can detect the virus genetic material in milk up to 28 days after the animal becomes infected.
Sampling from bulk milk storage tanks removes the need to test each animal individually and also does not require a veterinarian to be called out to take blood or tissue samples.
FMD is endemic in large parts of Africa, South America, the Middle East and Asia. The financial impact of the disease is estimated at $11 billion (U.S. dollar) globally each year in direct losses and vaccination costs.
Pennsylvania unveils Dairy Development Plan
Pennsylvania ag and state government officials have unveiled a “Pennsylvania Dairy Development Plan” designed to guide the state’s dairy industry toward growth and development amid a challenging market. The plan was introduced by state Agriculture Secretary Russell Redding during a breakfast of dairy industry leaders at the annual Ag Progress Days exhibition, Aug. 15.
The plan includes a series of intermediate- and longer-term strategies, including calls to better use existing funding to support research and development; an emphasis on identifying economic development projects; incentives for existing producers to upgrade their dairy equipment and facilities, and invest in on-farm processing capacity; further streamlining and reform of Pennsylvania’s regulatory processes; and broader marketing efforts to promote the sale, consumption and health benefits of Pennsylvania milk.
“The Dairy Development Plan introduced by Secretary Redding demonstrates a recognition by the administration of the important contribution dairy makes to our commonwealth. The plan provides a framework to encourage reinvestment in the infrastructure that is so critical to our industry,” said Jayne Sebright, executive director of the Center for Dairy Excellence (CDE). 
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