August 3, 2018
CapitalPress.com
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Dairy
Diversified Idaho dairy
brings local foods home
By BRAD CARLSON
Capital Press
Yes, that was a milk-de-
livery truck you saw driving
down the street.
Idaho Falls-based Reed’s
Dairy Inc. owns a sizable dairy
and production plant, retail
stores on the state’s east and
west sides, and a fleet of de-
livery trucks. President Alan
Reed said it all aims to con-
veniently put local foods into
customers’ hands.
“Look at farmers’ markets
and how they are growing,”
Reed said. “We are a farmers’
market on wheels bringing it
right to their home. People are
wanting fresh food from the
place it’s grown or produced.”
Reed’s Dairy grew revenue
by about 12.5 percent during
each of the last three years
after retooling to turn around
lower sales, he said. Factors
driving recently higher sales
include growing interest in
food produced locally, busy
lifestyles that prompt house-
holds to order home delivery
of milk and various other food
items sourced from nearby,
and ice cream.
“People just seem to be
coming around to desiring a
nice home-style ice cream,”
Reed said.
Courtesy of Alan Reed
Dairyman Alan Reed continues to expand his retail and delivery
operation in the Boise area of Idaho.
Ice cream sales pow-
ered much of the company’s
growth, particularly in the past
two years, he said. The treat is
a big draw at the Idaho Falls
dairy and in the Boise area,
where Reed plans to open a
second store this fall and where
the company drove around de-
livering free ice cream as part
of an industry promotion led
by the Dairy West organization
July 26.
“We are really happy with
how that has taken off,” Reed
said.
As the company started
adding local food items for
home delivery — from meats
and eggs to hummus and cof-
9
fee — it found that some orig-
inated in the Idaho Falls area
and even more around Boise
on the state’s west side.
“I’m not sure we can make
it just delivering milk. We’ve
got to have other products to
help,” Reed said.
The business has added six
new products for home deliv-
ery since January and is to the
point that customers can get
about 90 percent of the gro-
ceries they need by having it
brought to the doorstep, he
said.
“We are really family-ori-
ented, and so our customers
tend to be families,” Reed said.
Families are fundamental to
ongoing viability in home de-
livery and in the stores, which
offer brand familiarity in a
homey atmosphere.
The business also sells to
some grocery and convenience
stores as well as other ice
cream shops.
Reed’s Dairy chose south-
west Boise for its second Boi-
se-area store, in addition to the
shop in north Meridian, mainly
based on customer feedback,
Reed said. “We just have a lot
of people asking for our ice
cream in the Boise area, and
that seemed to be a popular
spot where we had a lot of re-
quests,” he said.
He is a second-generation
dairyman. The business dates
from 1955. Its dairy has about
180 milking cows out of a total
herd that numbers around 250
including replacements. A pro-
duction plant, upgraded in the
past year, pasteurizes and bot-
tles milk, and produces cheese.
Retail shops operate at the
dairy in Idaho Falls, in nearby
Ammon and for the past year
in Meridian. He employs near-
ly 30 full-time workers and
more than 100 part-time.
“We have to put out a really
good product,” Reed said. “We
just have to really take care
of our customers like they are
part of our family.”
Tariffs taking toll on markets
By CAROL RYAN DUMAS
Capital Press
Milk production has
slowed in the U.S., but re-
taliatory tariffs by China
and Mexico are weighing
heavily on dairy prices.
Milk production in June
grew 1.2 percent year over
year. Normally if exports
hold up, that amount of
growth would be bullish for
prices, Bob Cropp, dairy
economist with the Univer-
sity of Wisconsin, said in
the latest Dairy Situation
and Outlook podcast.
In addition, milk pro-
duction only increased 0.9
percent in May and 0.4 per-
cent in April, he said.
Nevertheless, cash pric-
es for barrel cheese have
fallen 20 some cents since
early June and cash but-
ter prices have dropped 15
cents.
“It appears that maybe
both domestic buyers and
international buyers backed
off some. Even though
these retaliatory tariffs did
not take place until early
July, I think they were an-
ticipating this is going to
have an impact on exports,”
he said.
In May, Cropp fore-
cast Class III milk prices
would be in the high $15s
per hundredweight in July,
high $16s later in the year
and maybe even $17. But
it looks like July prices are
going to drop to $14.20 to
$14.25, he said.
“So the markets are re-
acting to this,” even though
April saw record exports
and May saw the third-high-
est exports, he said.
Cheese exports dropped
about 15 percent in May,
however, with cheese ex-
ports to Mexico down
about 35 percent. And
there’s word some cheese
companies have had orders
canceled or not renewed, he
said.
“So it’s starting to have
an impact,” he said.
“I think a lot of these
things are starting to have
an impact,” Mark Stephen-
son, a fellow University of
Wisconsin economist, said.
Lenders are indicating
it’s getting tough out there
in dairy land. The mailbox
price for Michigan dairy
producers in May was be-
low $14 a hundredweight,
he said.
Tariffs vary, but putting
a 25 percent tariff on chees-
es raises the price 40 cents
per pound, the economists
said.
“That’s really taking us
out of competitive range in
a number of countries. So to
be competitive, prices have
to fall considerably or we
have to find new export op-
portunities where we don’t
have tariffs,” Stephenson
said.
“It’s just not going to be
an easy thing to do; it’s go-
ing to be costly,” he said.
Dairy group wants immediate labeling enforcement
By CAROL RYAN DUMAS
Capital Press
National Milk Producers
Federation is pleased FDA
has finally recognized the
need to increase its scrutiny of
companies using dairy termi-
nology in labeling plant-based
products imitating dairy. But
it doesn’t like the agency’s
announced timeline of a year
to start enforcing its labeling
laws.
At an FDA hearing on July
27 focused on modernizing
food standards of identity,
NMPF argued the agency
should first start enforcing
existing standards on prod-
ucts whose labels a
re
false and misleading.
“For far too long, stan-
dardized dairy terms have
been co-opted by the mar-
keters of fake milk and other
alternative products,” Tom
Balmer NMFP executive vice
president, said in testimony.
Imposters, such as almond
milk, soy cheese and rice
yogurt, bask in dairy’s halo
by using familiar terms to
invoke positive traits — in-
cluding the significant levels
of various nutrients typical-
ly associated with real dairy
foods, he said.
“This is a marketing gim-
mick, and a clever one,” he
said.
Such products not only
lack ingredients specified by
standards, they frequently
fall short in expected sensory
characteristics and are nearly
always less nutritious, he said.
“They are marketed and
merchandized to resemble
real milk and dairy products
in all ways possible, and many
consumers don’t realize that
they’re being shortchanged,”
he said.
Over the last 20 years,
NMPF and its members have
made repeated requests for
FDA to take enforcement ac-
tion on misbranded imitation
dairy products, with FDA
continually claiming the is-
sue is not an agency priority,
NMPF has stated.
“It seems inconsistent to
talk about modernizing stan-
dards to improve nutrition and
assure accurate information
to consumers when FDA has
been allowing nutritionally
inferior products to use stan-
dardized terms like ‘milk’ for
so long,” Balmer said.
“So instead of continuing
to look the other way, let’s
start by enforcing current
standards of identity and then
talk about potential improve-
ments,” he said.
In a statement to the press
that morning, FDA Commis-
sioner Scott Gottlieb said
FDA intends to look at the is-
sue in relation to public health
consequences.
Markets looking at the thermometer
By LEE MIELKE
For the Capital Press
C
ash
dairy
prices
climbed last week,
as did temperatures,
particularly in the West, and
wildfires are burning in Cali-
fornia and elsewhere.
CME block Cheddar closed
Friday at $1.52 per pound,
unchanged on the week but
23 1/2-cents below a year
ago. The Cheddar barrels, af-
ter closing the previous week
at $1.27, also finished Friday
at $1.52, but that after an im-
pressive 25 cent gain on the
week, though still 3 1/2-cents
below a year ago.
Twelve cars of block ex-
changed hands on the week at
the CME and 62 of barrel.
The blocks were un-
changed Monday but the bar-
rels rolled off a cliff, plunging
11 1/2-cents, as uncertainty
Dairy
Markets
Lee Mielke
remains in the minds of trad-
ers. Tuesday’s block price
was down 2 cents, to $1.50,
while the barrels inched up
a quarter-cent to $1.4075,
9 1/4-cents below the blocks.
Traders awaited Thursday af-
ternoon’s June Dairy Products
report.
FC Stone reports that “Re-
placements seem to be plenti-
ful out there to keep our cow
numbers up at the moment.
The semi-annual cattle report
showed milk replacement
heifers at 4.2 million head,
slightly above estimates but
in line with year-ago levels.”
‘Rattled markets’
Some Midwestern cheese
producers suggest that “slow-
ing sales are an indication of
rattled markets,” according to
Dairy Market News, and buy-
ers are taking the bare mini-
mum, waiting out fluctuating
markets. Milk supplies for
Class III vary widely. Some
cheese producers report ample
supplies locally, while others
are seeing thinning supplies
and a number say they are not
interested in spot milk regard-
less of the offer. Milk compo-
nent levels are falling as well
due to the heat, especially in
California.
Western cheese manufac-
turers report that sales are
back up, while others are not
receiving as many requests
as they were a few weeks
ago. According to them, both
domestic and international
sales have slowed some-
what. The alteration of some
of U.S. trade agreements re-
mains a concern for many
players, especially now that
other countries are forging
solid trade agreements with
some of the main competi-
tors of the U.S.
Cheese production is ac-
tive despite a drop in milk
volumes. Inventories are
plentiful and outpace demand
but, as pizza season approach-
es and educational institutions
begin to reopen, processors
hope domestic sales will “re-
boot.”
Cash butter closed Fri-
day at $2.2625 per pound, up
1 1/4-cents on the week but
45 3/4-cents below a year ago,
with 22 cars trading spaces on
the week.
Monday’s butter inched
a quarter-cent higher, then
added 4 1/2-cents Tuesday,
jumping to $2.31 per pound,
the highest CME price in six
weeks.
SAGE Fact #147
25,000 dairy cows milked twice a day equals
1.4 million pounds of milk a day which fills
18 milk tanker trucks a day
31-3/101
31-3/102