Digest Highlights: The milk pipeline to the Southeast filled despite Hurricane Harvey, but now Hurricane Irma may be on the way. Wisconsin sent 17,000 pounds of cheese to Houston food banks. Saputo is acquiring Southeast Milk’s ELS fluid business. Work advances on California quota plan. Find a summary of these and other news here.
Dairy moves on from Harvey, prepares for Irma
Hurricane Harvey caused some production and transportation delays, but didn’t disrupt the pipeline of milk flowing from the Southwest to the Southeast, according to USDA’s Dairy Market News.
Milk producers in the Southwest worked in advance of the storm to restrict the risk of loss due to Hurricane Harvey. By mid-week, Houston-area bottling plants had begun resuming milk intakes, even as flooding and evacuations continued. Read: Impact of Hurricane Harvey on dairy and feed.
Eastern school lunch supply needs continue to be filled, but a potential new threat is approaching. As of early this week, it was too early to predict the impact of Hurricane Irma as she advanced toward Florida. Some computer models forecast Irma could turn north toward the U.S. by the weekend, with the potential of moving up the East Coast, or head west to the Gulf Coast.
Jim Sleper, chief executive officer with Southeast Milk, Inc., said the dairy co-op’s hurricane preparedness plan is already being implemented. The co-op reserves electrical generators for dairy farms which may need stand-by power, and utilizes satellite telephones if there is a communications system breakdown. The plan even provides chainsaws to milk haulers where fallen trees may block roadways. Diesel tanks have been filled to ensure adequate fuel supplies, and all milk silos will be filled, providing more structural support to withstand high winds and rainfall.
Hurricane Irma has the potential to reach Georgia on Saturday or Sunday. Pam Knox, University of Georgia (UGA) agricultural climatologist, said anticipated rain levels are not likely to reach those seen in Texas during Hurricane Harvey. However, she said agricultural producers may wish to move machinery and livestock to higher terrain.
UGA animal waste specialist, Melony Wilson-Cowart, urged producers to check manure storage lagoon levels in anticipation of heavy rain.
The Florida Department of Agriculture issued a temporary suspension of intrastate movement requirements for transportation of animals from the areas expected to be impacted by Hurricane Irma. Additionally, Alabama, Georgia and Mississippi have waived their interstate import requirements for Florida pets and livestock.
Wisconsin cheese companies send 17,000 pounds of cheese to Houston
The Wisconsin Milk Marketing Board (WMMB) coordinated a statewide effort to send more than 17,000 pounds of cheese to Houston to provide nutritious food for those affected by Hurricane Harvey.
On Sept. 1, WMMB employees, cheese company employees and dairy farmers, packed a delivery truck with smoked string cheese, cheese curds, muenster, parmesan, cheddar, as well as 300 pounds of butter.
The shipment was sent to the Houston Food Bank, which serves nearly 600 hunger relief charities in 18 southeast Texas counties. Shipping and logistics support was provided by Independent Procurement Alliance Program (IPAP), based in Appleton, Wisconsin.
Participating cheese companies include Agropur Inc., Arena Cheese Inc., BelGioioso Cheese, Burnett Dairy Cooperative, Carr Valley Cheese, Chula Vista Cheese, Decatur Dairy, Cow Candy, Ellsworth Co-op Creamery, Emmi Roth USA, Foremost Farms USA Cooperative, Grande Cheese, Grassland Dairy Products, LaClare Family Creamery, Marieke Gouda, Nasonville Dairy, Odyssey Feta, Pine River Pre-Pack Inc., Ponderosa Dairy Products, Sartori Company, Schreiber Foods, Swiss Valley Farms Co-op, Vern’s Cheese, Widmer’s Cheese Cellars, Winona Foods and Zimmerman Cheese.
Saputo acquiring Southeast ESL business
Canada-based Saputo Inc. will acquire the extended shelf life (ESL) dairy product business of dairy cooperative Southeast Milk Inc. (SMI). The sale includes SMI’s ESL processing facility located in Plant City, Florida.
The transaction is expected to close on or around Oct. 1. Financial terms were not announced.
SMI has about 150 dairy farm members in six states, with most members located in Florida, according to Jim Sleper, chief executive officer. SMI markets about 2.6 billion pounds of milk annually, generating about $800 million in sales.
SMI’s ESL activities generated revenues of approximately $47 million (U.S. dollars or $59 million Canadian dollars) for the 12-month period ending on June 30, 2017, according to the Saputo press release.
The sale means SMI will be effectively out of the packaged fluid milk business, although it will continue to be the milk supplier to Saputo. SMI will also continue to process bulk milk during seasonal milk surplus periods, selling ultrafiltered milk and cream to other dairy product manufacturers.
Saputo produces, markets and distributes cheese, fluid milk, ESL milk and cream products, cultured products and dairy ingredients.
In the U.S., Saputo ranks among the top three cheese producers and is one of the largest producers of ESL and cultured dairy products. Saputo is the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, one of the top three dairy processors in Argentina, and among the top four in Australia.
Lanco Dairy expanding
Lanco Dairy Farms will expand cheese-making operations in northern Maryland. The company invested more than $24 million to acquire and refurbish the former Saputo Inc. cheese facility, located near Hancock.
Lanco Dairy Farms is also known as Lanco-Pennland, a marketing cooperative founded in Lancaster County, Pennsylvania, in 1998. The 650-member dairy co-op produces more than 2 million pounds of cheese per month.
To assist with project costs, the Maryland Department of Commerce and Washington County board of county commissioners are providing about $400,000 in conditional loans, based on job creation targets. The company is also eligible for various state and local tax credits.
Work on California stand-alone quota program advances
The next meeting of the California Producer Review Board (PBR) is set for Sept. 12, in Sacramento, California.
The PRB was created to develop recommendations outlining the criteria for a stand-alone producer-funded quota program under a proposed federal milk marketing order (FMMO) in California. The Sept. 12 meeting will discuss public comments submitted on a Quota Implementation Plan, released in early August. Public comments from the mulitiple dairy organizations have been posted on the CDFA’s PBR website.
Once approved by the PRB, the plan must be approved by the California Department of Feed and Agriculture, and presented to California dairy producers for a vote, possibly in October or November. The plan only goes into effect if California producers also separately approve establishing a California FMMO.
European Energy Exchange, Global Dairy Trade evaluating joint dairy product auction
Officials from the European Energy Exchange (EEX) and Global Dairy Trade (GDT) signed a letter of intent to evaluate the possibility of working together to create an auction for dairy products originating in Europe. The joint effort could lead to increased export opportunities and an additional tool for dairy price risk management.
Global Dairy Trade (GDT), a wholly-owned subsidiary of New Zealand-based Fonterra, currently operates twice-monthly public auctions for generic, large-volume lots of products, with more than 520 registered bidders and 80 countries.
EEX’s offering for European dairy products includes financially settled futures on skimmed milk powder, butter and whey powder. Launched in 2015, the market is now the leading exchange market for dairy risk management in Europe.
Under terms of the letter, officials from EEX and GDT will consult with dairy product buyers and sellers about the possibility of jointly offering price discovery for European dairy products through an auction system. 
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Dave Natzke
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