Northeast Dairy Magazine | Q2 2019 by NortheastDairyMag

FEATURE

Protecting Dairy Foods

Second Quarter 2019

LEGISLATION

Whatâ&#x20AC;&#x2122;s Happening in Your State?

INDUSTRY NEWS

Meet the Modern Milkman

BUSINESS

Managing Baby Boomers

nedairyfoods.org

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contents

Second Quarter • Spring 2019 • Volume 2, No. 2

FEATURES

22 FRONT DESK 04

PRESIDENT’S MESSAGE: NDFA Vigiliance Is a Safety Priority

BY MIKE SUEVER

PRESIDENT’S MESSAGE: NDFA Summer Events

BY OZZIE ORSILLO

EXECUTIVE VP MESSAGE Protecting our Food Supply

BY BRUCE W. KRUPKE

LEGISLATIVE REPORT Mid 2019: Where Does Legislation Stand?

BY BRUCE W. KRUPKE

ECONOMIC REPORT Could Milk Prices Rise?

BY GARY LATTA

FOOD DEFENSE: Employees, Protocol, Vulnerability Assessments Make the Difference

When/Why Did We Start Pasteurizing Milk?

Who’s at Greatest Risk?

BY CAROLINE K. REFF

FSMA Final Rule

Global Food Safety Initiative

Food Fraud Is Often Intentional, Economically Motivated

NDFA Letter Opposes Raw Milk

Raw Milk: Fact vs. Fiction

CDC Investigation of Brucella Due to Raw Milk

What Is That in my Ice Cream?

Do You Really Know Your Supplier?

SQF: Global Stamp of Approval

BY CAROLINE K. REFF

NYS Ag Dept. Unconcerned With Small Business Transport

READ ALL ABOUT IT! 45

MilkPEP! Campaigns Educate, Boost Consumption

Meet the Modern Day Milkman

MEMBER PROFILE Yancey’s Fancy Brings the Wow! Factor

MEMBER PROFILE Battenkill Valley Creamery: Customers Appreciate Local Quality and Freshness

STAY CONNECTED

WORKPLACE TOOLS OF THE TRADE 54

427 S. MAIN ST, NORTH SYRACUSE, N.Y. 13212 315-452-MILK (6455)

BY RYAN OSTERHOUT

www.nedairyfoods.org www.neastda.org

reatively Managing Baby C Boomer Retirement

rocess Safety P Management for Ammonia Refrigeration

uestions on Establishing Q Premium on NH Milk Logo

BY WENDY YOVIENE

L eadership Dictates Business Culture, Success BY CHRISTOPHER MOMINEY

BY JASON WOODRUFF, CIH, CSP NED Magazine | Second Quarter 2019 • 1

contents

Fourth Quarter • Fall 2018 • Volume 1, No. 4

NORTHEAST DAIRY FOODS ASSOCIATION, INC. EXECUTIVE VICE PRESIDENT

Bruce W. Krupke

EXECUTIVE ASSISTANT

Leanne Ziemba

DIRECTOR OF MEMBERSHIP AND COMMUNICATIONS

Alex Walsh PRESIDENT

Mike Suever HP Hood, LLC

VICE PRESIDENT

Daniel R. Lausch Lactalis America Groups, Inc. TREASURER

Michael P. Young Guida’s Dairy SECRETARY

Rick Sedotto Midland Farms

NORTHEAST DAIRY SUPPLIERS ASSOCIATION, INC. PRESIDENT

TREASURER

VICE PRESIDENT

SECRETARY

Ozzie Orsillo Evergreen Packaging Co.

ASSOCIATION UPDATES 62

019 Convention 2 Information

Member & Industry News

Welcome New Members

In Memoriam

DFA Welcomes ADP as N Endorsed Service Provider

Amazon Adds Dairy

ntonacci Receives A “Dairy Good Friend” Award from NDFA

IN THE INDUSTRY 71

eport Criticizes R Europe for Targeting U.S. Dairy Exports

Bill Elliott Northeast Great Dane

Melissa Fryer Alfa Laval Ryan Osterhout KCO Resource Management

NORTHEAST DAIRY MAGAZINE TEAM EXECUTIVE EDITOR

Bruce W. Krupke bk@nedairyfoods.org PUBLISHER/DIRECTOR OF SALES

Bill Brod billbrod@nedairymedia.com EDITOR

Caroline K. Reff creff@nedairymedia.com CREATIVE DIRECTOR

CONTRIBUTORS

Christopher Mominey, Ozzie Orsillo, Ryan Osterhout, Mike Suever, Jason Woodruff, Wendy Yoviene PRODUCED BY

Northeast Dairy Media

Editorial correspondence should be directed to editor@nedairymedia.com. Advertising correspondence and materials should be sent to billbrod@nedairymedia.com. POSTMASTER: Send address changes to bk@nedairyfoods.org.

Robin Barnes robinb@datakey.org GRAPHIC DESIGNER

Greg Minix

An official magazine of the Northeast Dairy Foods Association, Inc., a nonprofit organization. This publication carries authoritative notices and articles in regard to the activities and interests of the associations. In all other respects, neither the association nor the producer of the publication, Northeast Dairy Media, is responsible for the contents thereof or the opinions of the contributors. The entire contents are © 2019 by Northeast Dairy Media. Nothing may be reproduced in whole or in part without written permission of the publisher. The association and Northeast Dairy Media reserve the right to print portions or all of any correspondence mailed to the editors without liability on its part and no such correspondence will be returned. Visit Northeast Dairy Foods Association online at nedairyfoods.org for current information on association programs and services, or call the association at 315-452-MILK (6455). Questions and comments may also be sent to the association at bk@nedairyfoods.org.

2 • Northeast Dairy Foods Association, Inc.

Join the Dairy Industry Associations A full service trade association representing dairy processors, manufacturers and distributors since 1928.

nedairyfoods.org

WINTER

A supplier and vendor member association dedicated to the growth and Magazi ne of No rtheast Dair y Pr oc essors, Manufac advancement of The the dairy food industry in the northeast. Established in 1932.

neastda.org

NED Magazine | Second Quarter 2019 â&#x20AC;˘ 3

EDIT

turers t

FrontDesk

Vigilance Is a Priority When It Comes to Food Safety BY MIKE SUEVER, PRESIDENT, NORTHEAST DAIRY FOODS ASSOCIATION

his issue of Northeast Dairy magazine deals with some difficult topics that our membership has to face every day — food fraud, food defense and food safety. If you’re not thinking about these topics and the potential they could have on your brand and our industry, then it’s high time to start. Few of us have forgotten the Romaine lettuce scare from late last year, and none of us ever wants to be in a position where our products cause any level of harm to others, whether it be through sabotage, unsafe practices, unreliable suppliers or even a lack of knowledge on the part of the consumer. Thankfully, we live in a country where our food supply is generally safe, well-monitored and highly regulated. Many American consumers assume that what they are eating is safe and that precautions are in place to protect them. And, for the most part, this is absolutely true. But, let’s face it, things still happen. Not a month goes by that there isn’t a product recall, whether in our industry or another. Every day a consumer contracts a foodborne illness from some kind of food that was exposed to harmful bacteria along the supply chain or wasn’t kept under the correct conditions in the consumer’s kitchen. (Let me be clear, this is not unique to the dairy industry. We, of course, are particularly concerned with issues pertaining to dairy, but every food industry has its risks.) And let us not forget that we are living in a time when consumers are especially savvy. They want to know what’s in their food. Is it genetically modified? Does it come from animals that are treated humanely? Was it sourced sustainably and responsibly in terms of environmental resources and labor? Does it contain exactly the ingredients it says it does and nothing more? American consumers are not going to let us off the hook. They demand to know the answers to these questions, and, if they don’t get — or like — the 4 • Northeast Dairy Foods Association, Inc.

Put all of this together, and there is simply no excuse for anything but responsible and tireless monitoring and protection of our food from farm to table. We simply cannot be complacent because those who look to harm, defraud and simply cut corners to save a buck are out there. — MIKE SUEVER answers, they simply take their dollars elsewhere. Finally, there’s no denying that we live in a litigious society. Who among us wants to be on the other end of a lawsuit? No one — giving us all the more reason to increase our vigilance, verification and best practices. Put all of this together, and there is simply no excuse for anything but responsible and tireless monitoring and

protection of our food from farm to table. We simply cannot be complacent because those who look to harm, defraud and simply cut corners to save a buck are out there. I hope you will take the time to read the informative articles in this issue of Northeast Dairy and learn more about the risks and reasons to remain vigilant. Rod Wheeler of the Global Food Defense Institute tells some interesting stories of food defense and reminds us that our frontline employees are often our most effective means of protection. Another piece, featuring information from one of our own board members, Kim Bukowski, talks about the realities of what unwanted substances might be added to our food as a means of profit. And, of course, read how our own Bruce Krupke continues to closely monitor and fight for all of our members when it comes to issues that might compromise the safety and reputation of dairy foods. I hope this issue is both helpful and thought provoking. We welcome your comments and thank you for your support of our association.

GIVE US SOMETHING TO CHEW ON. Are you introducing an interesting product? Have you instituted cutting-edge processes? Are you welcoming a new hire? Is your business expanding, moving or changing? Do you have other news to share? Northeast Dairy magazine is always looking for Member and Industry News. Email your information, news releases and/or captioned photographs to us at editor@nedairymedia.com.

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NED Magazine | Second Quarter 2019 â&#x20AC;˘ 5

FrontDesk

Summer’s Calendar is Filling Up: Don’t Miss a Thing! BY OZZIE ORSILLO, PRESIDENT, BOARD OF DIRECTORS, NORTHEAST DAIRY SUPPLIERS ASSOCIATION, INC. .

ummer is finally here! And with that comes a lot of exciting events for our association. Following our June 1 deadline (appropriate as it was World Milk Day), we started pouring through applications for our 2019/2020 NDSA scholarships. We are pleased to offer all members and immediate family of our members the opportunity to receive a scholarship from our organization. Ten scholarships totaling $15,000 will be distributed very soon, and we are excited to inform our recipients. Stay tuned! Our annual Dairy Industry Clambake 2019 is just around the corner on July 10. As always, it is held on the second Wednesday of July. There is a lot of buzz around our new clambake location, the Spinning Wheel Event Center at 7384 Thompson Road, North Syracuse, New York. It’s only a few miles from our former venue with all the great fun, friends and food you have come to enjoy. Some of the same features include a free-flowing beer garden (for the rowdy crowd), all-day buffet stations, steamers and raw-clam bars, 50/50 raffle, silent auction items and gaming activities. This year will include our newly featured pig roast, so come hungry and leave happy! Our association has opened up ticket sales beyond the Northeast Dairy Suppliers Association. Ticket sales are now open to all paid members of the Northeast Dairy Foods Association, too! A great opportunity for executive management of regional businesses to treat their staff teams to an appreciation day in this fun and social atmosphere. Tickets can be purchased online at our websites, www.neastda.org, or by calling the office at 315-452-MILK (6455). Also, on July 10, starting with an 8 a.m. shotgun, is our golf outing, which has had a change of location, too. We are moving to Rouges’ Roost in Bridgeport, New York, just a short drive from Syracuse (and the afternoon clambake!). This new location offers two courses, which will help us all 6 • Northeast Dairy Foods Association, Inc.

Our annual Dairy Industry Clambake 2019 is just around the corner on July 10. Some of the same features include a free-flowing beer garden, all-day buffet stations, steamers and raw-clam bars, 50/50 raffle, silent auction items and gaming activities. This year will include our newly featured pig roast, so come hungry and leave happy! — OZZIE ORSILLO get in a fun morning of golf with plenty of time to make it to Spinning Wheel. Since we have an early tee start time, we have negotiated discount rates at two area hotels for those of you traveling in the night before: The Double Tree Hotel at Carrier Circle in East Syracuse (315-432-0200) and the

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Maintenance. Comfort Suites Cicero (315-752-0150). You can call the hotels directly for reservations, but be sure to mention our association for the discount rate. Go to www.neastda.org for more details. While September gets us all thinking of autumn, it’s technically still summer when the Northeast Dairy Foods Association/Pennsylvania Association of Milk Dealers Annual Northeast Dairy Convention is held from Sept. 11 to Sept. 13. Our location choice is in Cooperstown, New York, home of the Baseball Hall of Fame, so don’t forget to pack your peanuts and crackerjacks! Our convention will be held at the beautiful Otesaga Hotel in downtown Cooperstown, directly on Otsego Lake and home to the Leatherstocking Golf Course. This property is simply perfect and an easy walk to any downtown attraction. We guarantee it will be hard to leave once you arrive! Cooperstown is a busy place, so make sure to reserve your rooms early by calling the Otesaga Hotel at 607-547-9931. Be sure to mention that you are a part of the convention for the best rates available. We have a packed business session and a special guest speaker (stay tuned!) that will take us on a journey of baseball history from his hall-of-fame perspective. An opening night cocktail reception will carry a baseball theme, so feel free to wear the colors of your favorite team — just not the Yankees. Don’t miss this very special event. (Note to NDSA members: We have display tables available if you wish to exhibit your company products and services. Please call or email Leanne Ziemba at the office to reserve yours. See further sponsorship opportunities on Page 62.) Admittedly, my contribution to this publication tends to lean toward the lighter side of our industry and the fun events we all love participating in. However, this issue spotlights a very serious topic: food fraud/food safety. This is important to our businesses and our personal lives. We as an association are delighted to provide this material to you, and we hope you find it informative. If you have a need for more information after reading through the magazine articles, please contact the Northeast Dairy Foods Association’s main office for assistance. I hope to see you all in July and September, and, as always, thank you for your support.

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FrontDesk

What You Need to Know: Protecting Our Food Supply, Fair Labor Practices, Summer Association Events BY BRUCE W. KRUPKE, EXECUTIVE VICE PRESIDENT, NORTHEAST DAIRY FOODS ASSOCIATION, INC.

t our Northeast Dairy Convention in Gettysburg, Pennsylvania, last September, we hosted two individuals who provided attendees with information on food defense and food fraud. The positive input from attendees told us these were topics of high importance to our members, so we’ve taken the opportunity to explore them further in this issue of Northeast Dairy. Do you ever ask yourself, “Is the food I’m putting in my mouth really what I think it is?” This is not to be confused with whether or not it is good for you. Otherwise, if you are like me, you’d never eat another hot dog again. In this issue, we will dive deeper into the topic of food fraud, which I define as pro— BRUCE viding a product that is not up to the standard set by internal policy, by your customers or by the government primarily for financial gain. It is a topic that, at first glance, you might not think much about. When you start to dig and learn more about it, you realize there is much more to learn. Food fraud can come in many variations and examples. In the manufacturing of Kosher products, for instance, it is important for consumers to know those products are held and

made according to strict standards. And what about foods that come from other countries? Do they contain the proper ingredients, nutrition and meet the standards that are expected? Food defense is even more worrisome. In this post-9/11 era, the reality is that our food supply is at risk from terrorism, sabotage and even carelessness. It’s hard to believe, but it’s true. Read more about how you can protect your facilities and your products by having a proactive plan in place before the worst happens. Finally, we look at the topic of food safety itself. Are dairy products being kept at the proper temperature? Has an item been monitored along the entire supply chain to make sure it’s safe to eat? If you’ve ever experienced even a mild case of food poisoning, you W. KRUPKE surely want to know the answers to these questions.

In this issue, we will dive deeper into the topic of food fraud, which I define as providing a product that is not up to the standard set by internal policy, by your customers or by the government primarily for financial gain.

8 • Northeast Dairy Foods Association, Inc.

FARM WORKER’S FAIR LABOR PRACTICES Next, I’d like to briefly talk about a very important legislative issue in New York called the Farm Worker’s Fair Labor Practices Act. Recently, I attended and testified at a Senate sponsored hearing on this topic at the State University of New York at Morrisville State College. Identical bills have been introduced in both New York state legislative chambers

FrontDesk

to change farm labor laws, which are different from the to 13, the Northeast Dairy Convention will take place in ones most other businesses and industries in the state must Cooperstown, New York, home of the Baseball Hall of Fame. comply with. This initiative hits directly at the heart of what You are invited to gather for two full days of educational prefarm work is all about. The legislative intent is to change the sentations, networking events and more at the Otesaga Hotel. labor law for farms to allow employee collective bargaining, We will even give you the opportunity to meet a Baseball Hall mandate overtime to be paid after 40 hours and other time-off of Famer! More information can be found by contacting us requirements. Our association is vehemently opposing this or visiting our member website at www.nedairyfoods.org. legislation. Farms and their workers need to work when the Finally, June is Dairy Month and July is National Ice Cream job must be done. Mother Nature is one of the main reasons Month. Celebrate by having a cold glass of milk (chocolate the laws are different. Work has to be done when the weather is my favorite) with a meal or two and indulging in a cone permits — seeds need to be planted, crops harvested and cows or bowl of your favorite flavor of ice cream. Promote our need milking when necessary. You can’t have your farm hands industry and help increase consumption of real nutritious at home playing video games or watching Netflix when work dairy products! needs to be completed! Farm work is very hard. Everyone knows that — both the workers and the owners do — with, it seems, the exception of New York City legislators. Farm workers and owners both put the time in when necessary and generally don’t complain Personal Safety Food Safety because they know that is the nature of the business. Should this legislation be passed, and it could be by the time you receive this magazine, it will have a major negative impact on our dairy farms and state’s agriculture community in general. We’ll watch to see if other Northeast states E-A-R™ • Peltor™ Clean-Trace™ • Petrifilm™ try to adopt similar legislation. I’ll keep you updated.

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CELEBRATE! Hey, it is summertime, and with it we have two great networking and educational events for you in the coming months. Consider attending our Northeast Dairy Supplier’s Association Dairy Industry Clambake on Wednesday, July 10, at Spinning Wheel Event Center in North Syracuse, New York. Members can obtain tickets from their suppliers or directly through our office. And from Sept. 11

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Legislative+RegulationsReport

As We Hit the Midway Point of 2019, Where Does Legislation Stand? BY BRUCE W. KRUPKE

here has been a great deal of introduced legislation in all eight Northeast states. As the 2019 legislative activity is at the mid-point, we can cautiously state most proposed legislation we are opposing will not pass, with a few exceptions. Most of these bills specifically address and would affect you, our members, although there are also many general business topics that, if passed, would increase your costs and require more regulatory attention. One key observation we make is that plastic has become the new â&#x20AC;&#x153;Enemy No. 1â&#x20AC;? in many states. Plastic straws, containers and other products and materials are being targeted. One of 10 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

the most visible targets are plastic shopping bags. Many states are starting to outlaw them. Ironically plastic might be more environment friendly when you consider it takes more energy to chop down trees to make paper bags. It also requires by a ratio of 7:1 more trucks to deliver paper bags than plastic bags because of storage and space requirements. Have we forgotten what it is like to try to carry more than two paper bags of groceries to the car while the bottoms give out due to condensation from frozen and refrigerated products? Are we really making progress by making plastic the bad guy? Retailers are upset, as well, as paper bags will cost them more. If plastic bags are not outlawed, then many states are proposing a fee for those

Legislative+RegulationsReport who want one — anywhere from 1 cent to 10 cents tax per bag, of which a portion would go to the retailer. When we decide which bills to lobby, we are directed by policy that is created by our board of directors. There are three policy provisions we follow: 1. What does the current law state? (We support the law unless the board of directors takes a specific action to change it.) 2. Does the proposed legislation place our members in a competitive disadvantage with other states or countries? 3. Does the topic involve product quality or safety for consumers? These three statements help guide our association’s policy in support or opposition for proposed legislation, current law or regulations.

BREAKING IT DOWN: STATE-BY-STATE I’ll summarize the most important topics and bills we are working on by state. CONNECTICUT Connecticut is tax happy drunk. The legislature is considering many taxes on food products, such as the 10 cents for the plastic bag you use to take home a rotisserie chicken, under a tax package the Democratic-led finance committee passed recently. The state appears, for now, to have discarded a proposed 1.5 cent per ounce tax on sugary beverages. Members of the Committee on Children have introduced a bill that would eliminate flavored milk from children’s meals in restaurants. House Bill 7006 states, “An act to prohibit restaurants from including soft drink beverages on children’s menus and in children’s meals.” The way the bill is written disallows flavored milk. Specifically, the bill states, “On and after January 1, 2020, no beverage listed or displayed on a children’s menu shall be a beverage other than water, sparkling water, flavored water with no added sweeteners, unflavored milk or a non-dairy milk alternative.” This bill has not moved in the past two months, and with our lobbing efforts we believe it won’t move this year. A recent introduction into General Assembly is Bill 727, an act restoring funding for the dairy sustainability fund. Our association is supporting this legislation, as it allows for continued funding for a program that assists dairy farm operations. MAINE The state of Maine, like Vermont and Connecticut, has a commission or committee that tends to oversee dairy issues and topics. Maine

will present to its respective legislators’ advice, direction and suggestions. Maine is the most active due to the fact it has, by law, a minimum pricing system that supports the farmer, milk distributor and retailer, all coming at the expense of higher consumer prices. Ironically, the main focus of this system is to support the dairy farmer, although producers there have gone out of business at the same rate as — or faster than — most other states. The minimum pricing system does not keep dairy farmers in business, although it, in turn, costs consumers more money for fluid milk. In addition, the Maine legislature, like many other states, is considering marijuana legalization, outlawing plastic straws and bags, paid family leave and increase minimum wages. We are happy to report that LD 1345, the Restrictive Scheduling bill, was recently killed by the Labor & Housing Committee recently. This bill would have required minimum wage or equivalent employees to be scheduled out two weeks and mandatory payment for hours if shifts were cancelled. We reported in our last issue the introduction of LD 292, which would allow for donations to be made to local food banks, bypassing the state’s minimum pricing system. The issue with this is that by allowing these donations, the minimum milk pricing system would be bypassed. The dairy industry in Maine — from farmers to retailers — does not like to have the system tinkered with, even with a seemingly innocuous and well-intentioned bill. This bill has not made progress, although discussions continue within the industry. A second bill in Maine that we are lobbying against is LD 102. Beginning Jan. 1, 2020, this bill prohibits a manufacturer from selling, offering for sale or distributing for sale in the state a single-use plastic beverage container unless the container is composed of at least 15 percent postconsumer recycled plastic. We are happy to report this bill has been “laid aside” and will not be considered. The bill sponsor, Rep. Victoria Doudera (D), has re-considered the legislation opting for more future input. MASSACHUSETTS

Sometimes, state government tries to better understand the effect laws have. Massachusetts has introduced an interesting bill (H207) that would allow for studies to be conducted on the impact of minimum pricing laws. Since the dairy industry is mandated by the federal government under the USDA’s Federal Milk Marketing Orders to pay dairy farmers a minimum price, the law, if passed, NED Magazine | Second Quarter 2019 • 11

Legislative+RegulationsReport would examine the effects of this program. To which I say, good luck! This will be a major undertaking to say the least. It is possible some good information can be derived from this law if passed. Other dairy legislation introduced includes two bills that we are opposing. The first is one that has been introduced in the past few years without much success. S480 would allow for the sale of raw milk to cow share program participants to be sold through a third party distributor under contract with the dairy farm distributing the raw milk. Our association opposes these types of bills for the primary reason that raw milk can be very dangerous to consume, as it has not been pasteurized. We strongly feel raw milk sales direct to consumers should not be allowed. A good way to look at this is to say, well if dairy farmers are allowed to sell raw milk to consumers, why not a traditional milk processor? Why go through the cost and hassle of the pasteurization process at all? For those of you in the business, the answer is clear: because raw milk could contain dangerous pathogens that can make you sick and, in extreme cases, even cause death. The other bill to bring to your attention is H2837, which would create and require deposits on certain non-carbonated beverage containers. Another similar bill (H2859) would impose a recycling fee on beverages sold in beverage containers. Although milk and dairy products are excluded from these bills, our members sell many other types of products that would qualify. These types of bills, although well-meaning, only create more red tape, increased taxes and higher costs for consumers. Our association is opposing these bills. NEW HAMPSHIRE There is only one piece of legislation our association is monitoring that has been introduced in the Granite State — HB 476, an act replacing the milk producer’s emergency relief fund with the dairy premium fund. Our association is not in support of this legislation primarily because it will allow an unfair competitive advantage for milk processors doing business there. The bill would create a new program to promote “Made in New Hampshire” processed fluid milk products. The state would mandate any product voluntarily participating to affix a seal identifying it as “dairy premium program milk products.” The law would establish a price at which these products would be sold with profits to be returned to the state for distributed to New Hampshire dairy producers, as well as some funds going to support a promotional campaign for the program. 12 • Northeast Dairy Foods Association, Inc.

In the past, when these types of programs were created, they tended to discriminate against processors who sell out of state because the intent is to encourage in-state “local sales” of product. Out-of-state residents usually do not pay attention to local produced product programs. Additionally, this program would be targeted for retail-only sales, without regard to packaging, which might be sold in a food service location. A further summary of this bill is provided in this issue by our legal counsel Wendy Yoviene (see article on Page 58). A hearing was held on March 26 on the proposed legislation. It is undetermined if this legislation will actually pass. It is our association’s position that, should the law be passed, participation will be non-existent due to the many constraints and mandates placed on participants. NEW JERSEY The Garden State legislature has been very active on many of the same social, business and dairy issues as other states. It is considering legalizing marijuana, outlawing or taxing plastic items like grocery bags and passing a paid family leave law. Unfortunately, Gov. Phil Murphy and legislators have come to an agreement for the state to become the fourth in the nation to pass a $15/hour minimum wage to commit to significantly raising incomes to that level and reflecting a growing national movement to address what they define as economic inequality. The wage rate will be in full effect in 2024 and be raised by a CPI index. Our association opposed this legislation citing the only end results would be increased inflation and more employment tax dollars supplied to the government. The following dairy-related legislation we are monitoring have not moved out of their respective committees: • A2977 removes milk weight licensing mandates (Oppose) • A4325 requires the Department of Agriculture to provide for electronic submittal of milk dealer license applications (Support) • A502 permits the sale of raw milk under certain conditions and establishes a raw milk permit program (Oppose) • S403 authorizes use of retail coupons for purchase of milk by consumers (Support) • SJR116 recognizes the last week of June as Dairy Week (Support)

Legislative+RegulationsReport NEW YORK The Empire State Democratic Party legislators are now in control and have been hard at work passing social issue laws and many anti-business legislation initiatives in New York since the beginning of the year. One piece of introduced legislation will directly affect farms of all kinds in the state including dairy. Although our focus is to lobby on bills that directly affect you and your businesses, we will also divert attention to issues that affect the producers of the milk you process, manufacture and distribute. One such piece of legislation has reared its ugly head this session. It is called the Farm Workers Fair Labor Practices Act, S2837/A2750. This proposed legislation would change farm labor law to mandate paid overtime after 40 hours, permit collective bargaining and force specific time-off requirements. Our association is opposing this legislation. The main reason this legislation should not be passed is because work on farms is much different than most other industries and businesses. Mother Nature dictates when crops need to be planted and harvested. Other outdoor work and chores must be accommodated around the weather. When work is ready and able to be accomplished, all farm workers must be on the job. A series of three Senate hearings were held in early April — two upstate and one on Long Island. The hearings were sponsored by the bill sponsor, Sen. Jessica Ramos (D), District 13, Queens, New York. Guests who were allowed to testify were both equally in support and against the bill. In the past four years, the Assembly has passed the legislation. Since the New York State Senate is now controlled by the Democratic Party, mostly New York City senators feel it is their time to pass this legislation. Gov. Andrew Cuomo has indicated his support for the bill. Should the legislation pass, it is written to go into effect immediately. Based on input from those farmers who testified, labor costs for over time alone could be anywhere from 25 to 110 percent more. Seasonal farms would be most vulnerable with the threat of a strike looming when the crops need harvesting. One could also argue that the Farm Workers Fair Labor Practices Act directly affects NDFA members. Should this law pass, increases in raw product cost from milk sourced outside of New York eventually would have to be made. Going outside of the state for raw milk supply would mean increased hauling costs. Both of these scenarios would decrease the competitiveness of New York state plants.

Another more serious proposed bill, which will have an even more direct impact on your company, is what is commonly referred to as the Single Payer Health Care, or The New York Health Act. Northeast Dairy Foods Association, Inc., opposes this legislation, A5428 and S3577, which would create a government run, “single payer” health care system that would replace New York’s current system of health coverage. The single payer system would be financed by a mandatory new payroll tax on both employers and employees, as well as new taxes on other income such as interest and capital gains. The New York Health Act would result in the largest state tax increase in the history of the U.S. An independent study conducted by the RAND Corporation found that the legislation will require at least $210 billion in new taxes when fully implemented. RAND did not include the cost of long-term care benefits, which requires an additional $42.7 billion in taxes. This is three times more than what New York state currently collects ($76 billion) to pay for everything from schools to roads and bridges. Although proponents of single payer health care systems like the New York Health Act like to say there would be “Medicare for all,” Medicare allows people to choose a health plan and purchase additional coverage if desired. Under this legislation, New Yorkers would not have any choice in their health care coverage; the only option available would be the government-run single payer system. A May 28 public hearing was called by the bill sponsors in Albany, which is a sign of intent to move the bill. The Senate already had 32 sponsors, the minimum to pass it in that House. Signatures are still being collected in the Assembly. Other bills previously reported have not been passed or moved out of their respective committees: • A01624 requires public schools to offer plant-based food options in food service (Oppose) • A01672 requires supermarkets to make surplus food available to qualifying charities (Oppose) • A02263 relates to the sale of certain foods in vending machines on school grounds or property (Oppose) • A02473 requires sugar-sweetened beverages to be labeled with a safety warning (Oppose) • A01110 mandates the labeling of food products from cloned animals (Oppose) • A00390 enacts provisions imposing a five-year moratorium on the planting and growing of genetically modified crops (Oppose) (continued on next page) NED Magazine | Second Quarter 2019 • 13

Legislative+RegulationsReport

RHODE ISLAND The Ocean State’s dairy industry is very small in comparison to all others in the Northeast. Usually the state does not have much legislation that requires a great deal of attention, but that has changed in 2019. Here is a review of the bills we are monitoring and lobbying in Rhode Island: • S0407 exempts the producers of certain milk and milk product produced for personal consumption from the inspection requirements of the milk sanitation code. This legislation would remove restrictions from farm inspection laws to allow herd sharing for the purpose of selling unpasteurized raw milk (Oppose) • S0418 creates a tax on sugary drinks and creates a dedicated revenue source for programs designed to benefit public health (Oppose) • H5427 creates the Healthy Beverage Act, which would require that children’s meals offered by restaurants include certain healthy beverage options if the beverage is automatically included in the meal (Oppose) • S0421 entitles dairy farms to the exemptions from taxation granted to farmland, forestland or open space (Support) VERMONT The Vermont legislature has been extremely busy with issues that affect all businesses, including dairy-specific targeted legislation. As you may be aware, Vermont is considering Senate Bill 23, which would increase the minimum wage standards to $15/ hour by 2024, then be adjusted by 5 percent or the annual CPI, whichever is smaller. Our association opposed this legislation. However, the bill was passed by the Senate and is now awaiting action in the Assembly. Gov. Phil Scott is not supportive of the legislation and may veto the bill. Another bill, H451, would increase bottle redemption to include more beverages and increase the fee from 5 cents to 10 cents per container. The good news is that the deposits on containers do not apply to any fluid milk beverages, although it would apply to juice and other types of drinks. Our association opposes this bill on the premise that it decreases consumption, is a regressive tax on the poor, affects beverages our processors make and opens the door for milk containers to someday be included. Our suggestion is to have all containers be recycled without requiring deposits. 14 • Northeast Dairy Foods Association, Inc.

A bill we reported on in our last issue of Northeast Dairy was Senate 141. The concept of this bill would be to enact nutritional requirements for kid’s meals sold at food service locations. We have successfully lobbied skim and 1% milk be allowed without restrictions to be sold in the meals. The bill would limit calories to no more than 600 per meal, along with sodium, sugar and fat restrictions. Our association opposes this bill. Restaurant owners should be free from this kind of government oversight, and parents should choose what kids eat, especially when not in school. Another bill that passed the Assembly is H107, which would create a mandatory paid family leave. There are efforts to make this voluntary, not mandatory. Our association opposed this legislation, although New York state and others have already passed similar legislation. Vermont is experiencing a labor shortage. Business owners point out the state is crippling their operations by enacting higher minimum wages and allowing employees to take more time off while companies are not able to find sufficient workers. This scenario is being played out in many other Northeastern states, as well. WASHINGTON, D.C. Since our last report, initiatives by Congress affecting the dairy industry have not shown much movement. It appears Congress is more concerned about the Mueller Report than other important topics. That being said, our association is working on supporting passage and approval of the new USMCA agreement. This is the new “NAFTA,” which was negotiated by President Donald Trump in 2018 with Mexico and Canada. Included in the agreement are provisions for making our dairy products that are exported more competitive. In the Canadian portion of the agreement, Canada has agreed to remove Class 6 and 7 products, which were created to unfairly compete pricewise with our MPC and powder product exports to that country. With the elimination, there is an opportunity for those products to be sold in Canada. We are also supporting immigration reform. Dairy farms and some plants in the Northeast will hire workers from other countries. These farms especially rely on seasonal, H2A and migrant workers to do the work necessary. Domestic workers are in short supply, and many farms legally employ workers from Mexico, the Dominican Republic, Guatemala and some South American countries.

Legislative+RegulationsReport

We are also continuing our support of HR832 sponsored by House Rep. Glenn Thompson (R-PA) and Agriculture Chairman Collin Peterson (D-MN), which is called the Whole Milk for Healthy Kids Act of 2019. This act would amend the Richard B. Russell National School Lunch Act to allow schools that participate in the school lunch program under such act to serve whole milk. The sponsors recognize the nutritional importance whole milk plays for growing children and teenager’s well-being. Most state legislative sessions will adjourn by the end of June, unless called back for a special session in the fall. We encourage our members to get involved. Let your voice be heard in your state capitol! You can easily view the 2019 Bill Introductions Report we’ve discussed in this article on our association’s website in the “Members Only” Legislative Update Section. As a member, you will need a username and password

to view this report. If you haven’t obtained your username yet, it is easy and will give you access to many other useful pieces of information. Visit our website at www.nedairyfoods.org to see all the information your membership provides. You can also request a copy of our lobbying activities and bill report by contacting our office at 315-452-MILK (6455). Thank you for your attention to the important legislation that we, as your association, are monitoring with your best interests in mind. While what’s happening in one state may not be in play in your state, that doesn’t mean it might not one day be the case, so it’s important to see what’s on the horizon. As always, thank you for your support, and please don’t hesitate to contact me with your opinions and concerns. Bruce Krupke is the executive vice president of Northeast Dairy Foods Association, Inc.

NED Magazine | Second Quarter 2019 • 15

ECONOMIC REPORT Could Higher Milk Prices Be in the Cards? BY GARY LATTA

umerous factors are at play that indicate rising milk prices for the rest of 2019. Block and barrel CME cheese prices have been transitioning weekly in an up and down pattern since the beginning of the year but now seem to be on a slow steady upward incline. The upward trajectory appears especially prominent for barrels lately. Nonfat dry milk prices at the CME are up quite sharply and have climbed to their highest since 2015. While cheese and powder inventories remain at relatively high levels, growth in the sheer quantity of these stocks and their production has slowed. 16 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

For now, butter prices at the CME are holding quite steady and close to where they were last year. Butter production and cold storage holdings are seasonally steady currently. Whey prices on the other hand have fallen sharply since the beginning of the new year primarily because of lost exports to China. Class III milk prices have risen lately because of higher cheese prices. Class III would be much higher right now if whey prices recovered to January levels.

U.S. COW NUMBERS ARE FALLING Slower growth in dairy product inventories and rising prices are a result of lower milk production. U.S. cow numbers

Economic Outlook

have been falling since the middle of last year. The latest U.S. Department of Agriculture milk production report indicated 50,000 fewer cows for March this year vs. last year and a 9,000 cow drop from February to March. Cow culling has been measuring about 6 percent higher as the herd size contracts and producers exit the business. The USDA reported a drop of 0.4 percent in national milk production for March, and a 0.1 percent drop within the top 23 states. Production per cow, however, continues to climb and set new records but with fewer numbers in the national herd. The top 23 states highlighted in the latest milk production report showed New York production up +2.3 percent on 2,000 more cows. In contrast, Pennsylvania production was down -6.9 percent with a drop of 29,000 cows. Pennsylvania appears to be especially hard-hit by the loss of farms in the recent downturn. Vermont production was up +1.3 percent for March with 2,000 fewer cows. Ohio milk production was down -5.1 percent with 10,000 fewer cows compared to this same time last year. In other top 23 states across the country, we have Arizona March milk production down -4.9 percent with 10,000 fewer cows, California production up +0.7 percent with 9,000 fewer cows, Wisconsin production up +0.4 percent with 4,000 fewer cows, Texas production up +5.8 percent with 27,000 more cows and Idaho production up +1.4 percent with 9,000 more cows. The slowing of national milk production is clear but mixed among the top key states.

INTERNATIONAL SLOW DOWN In other parts of the globe, we are witnessing a slowdown in milk production among key countries, some of which are significant competitors of the United States for export markets. The international slowdown of milk production combined with reduced global surplus stocks could bode well for U.S. exports later this year. Australia has been experiencing a myriad of “extreme” weather conditions. Severe drought in many Australian dairy producing regions

has taken a toll on milk production there. Compounding the weather-related situation are increases in feed, water and energy costs, all of which have led to a near 8 percent decline in milk supply from last year. Many Australian milk producers have exited the business, and others are considering doing the same. Like Australia, New Zealand also has been impacted rather suddenly by drought, with severely dry conditions contributing to an 8.3 percent decline in March milk production there. Until recently, New Zealand milk production had been quite brisk. For the EU, some drought conditions have persisted, and the Brexit negotiations have put a cloud of uncertainty in the air there. Global dairy observers like Rabobank are now forecasting much slower milk production growth for most major dairy exporting countries in 2019.

U.S. RECLAIMS PLACE AS TOP CHEESE EXPORTER No doubt tariffs have taken a toll on U.S. export sales. However, despite retaliatory tariffs from Mexico and China, last year U.S. dairy export sales reached a record-high volume and a 9 percent increase from 2017. According to the U.S. Dairy Export Council, the value of U.S. exports in 2018 was $5.59 billion and represented a 2 percent increase from 2017. Last year’s exports represented 15.8 percent of U.S. milk solids production, a new record high. In the three years prior to last year, exports represented an equivalent 14.2 percent of production. The U.S. Dairy Export Council also reported that the U.S. has reclaimed its place as the world’s largest single exporter of cheese. Mexico, Southeast Asia, Canada, China and South Korea are the top five destinations for U.S. dairy products. Cheese exports to South Korea are up over 70 percent. Mexico and Southeast Asia continue to be the leading importers of U.S. products and are responsible for near 40 percent of dairy export dollar value. World dairy demand and growing exports are becoming very important to the U.S. industry. (continued on next page) NED Magazine | Second Quarter 2019 • 17

Economic Outlook

WILL U.S. AND CHINA FIND A TRADE WAR RESOLUTION? Negotiations to settle the trade war between the U.S. and China are ongoing. Recent news reports indicate significant progress is being made toward a resolution. Since the start of the trade dispute, U.S. dairy exports to China have fallen 22 percent. The sheer size of the Chinese market and its growing appetite for high-quality safe dairy markets makes it a top priority for the U.S. to regain its place as a preferred supplier. Since the start of the trade war, China has been sourcing much of its whole milk powder and infant formula from Australia and New Zealand. It will be interesting to see if recent droughts and scarce milk supplies in Australia and New Zealand make Chinese imports from these two countries more expensive. If so, this could serve as an incentive for China to end its trade war with the U.S. sooner rather than later.

U.S. AG LEADERS WANT USMCA APPROVED The United States-Mexico-Canada Agreement is scheduled to replace the current 25-year-old North American Free Trade Agreement that governs trade in North America. While Mexico and Canada appear ready to move forward, the U.S. Congress has been wrangling to strengthen various issues within the agreement. Most agricultural leaders in the U.S. believe it is imperative that the USMCA be approved. Speaker Nancy Pelosi and the Democrats, who now control the House of Representatives, have indicated the new trade agreement must address concerns over the enforcement provisions that protect labor rights in Mexico. The Mexican government is addressing these concerns and has approved a reform to allow Mexican workers to organize and grants them more control over their contracts.

18 • Northeast Dairy Foods Association, Inc.

Canada and Mexico have both indicated that in moving forward with the USMCA they expect the U.S. to ease remaining tariffs placed on aluminum and steel in their countries. Even among Republicans, there is some discontent as Senate Finance Committee Chairman Charles Grassley (R-Iowa) recently warned that the USMCA is dead if tariffs remain in place. “There is no appetite in Congress to debate USMCA with these tariffs in place,” wrote Grassley. President Donald Trump himself has further shaken things up by threatening Mexico with auto tariffs and closing the border over immigration issues.

PROGRESS WITH THE FARM BILL Progress toward full implementation of the new Farm Bill is underway. USDA leaders have been working diligently to get the numerous sections of the bill in place and on time for the benefit of the agricultural industry. Among these, and one that will hopefully provide significant benefit to dairy producers, is the new Dairy Margin Coverage program. The new DMC program replaces the Margin Protection Program. The new DMC program will offer a combination of reduced premiums, more flexibility and increased margin protection levels than the previous Farm Bill program. Participation in the new DMC program is voluntary and offers risk management and financial planning opportunities to producers. Payouts will be made when margins, the difference between the all-milk price and the average feed cost, drops below a dollar amount chosen by the producer. Sign-up for DMC begins June 17 at local Farm Service Agency offices. DMC planning and decision making has become even more farm-friendly. The USDA recently announced a new online decision-making tool that allows producers to

Economic Outlook

54,599 farms had milk cows in 2017. Over 74 percent of these had 99 or fewer cows. Nearly 17,000 of these 54,599 farms had between one and nine cows.

Among this group of 54,599 farms with cows on

them, only 39,303 had sales of milk from the farm.

estimate how the program would work for their individual operations by inserting variables under different scenarios. USDA Secretary Sonny Perdue announced the new webbased tool was developed in conjunction with the University of Wisconsin. Dairy producers are strongly encouraged to explore this wonderful new margin decision program and simulation tool at fsa.usda.gov/dmc-tool. The new Class I fluid milk price formula took effect May 1. The new formula was a provision in the Farm Bill and was developed by the combined efforts of the National Milk Producers Federation and the International Dairy Foods Association. The new Class I skim milk price formula under the Federal Milk Marketing Order program is now the average of the monthly Class III and Class IV advanced pricing factors, plus $0.74 per cwt and the applicable adjusted Class I differential. This amendment is effective indefinitely, until further modified, and may not be modified sooner than two years after the effective date of this rule. Industry participants believe the new formula will bring more stability and less volatility to monthly fluid milk prices. Increased stability should allow for improved risk management and better use of Class III and IV futures market contracts for fluid processors.

AG CENSUS REPORT RELEASED BY USDA The USDA released its Ag Census report on April 11. This report is issued about every five years and is used as a reference tool for legislators, researchers and financial planners. Titled the 2017 Census of Agriculture, it is 820 pages of mind-numbing tables, graphs, figures and text on everything agriculture. The dairy sections present some interesting stats. For example, 54,599 farms had milk cows in 2017. Over 74 percent of these had 99 or fewer cows. Nearly 17,000 of these 54,599 farms had between one and nine cows. Among this group of 54,599 farms with cows on them, only 39,303 had sales of milk from the farm. Many of these smaller dairy operations are likely considered “micro-farms” or “hobby farms” where much of the milk produced is consumed by the family. To learn more about the makeup, trends and landscape of U.S. agriculture download a copy from the USDA’s website (www.usda.gov). Domestic sales of dairy products should be good for the rest of 2019 fueled by a robust economy. The exception being fluid milk sales, which continue a downward trend. For five consecutive months now, the USDA has lowered its estimate of 2019 milk production. Its logic for doing

NED Magazine | Second Quarter 2019 • 19

Economic Outlook

this is based on observations and forecasts of fewer cows for the remainder of the year. As global surplus dairy stocks are drawn down and production growth slows, market prices of several key products are inching higher. The prices on the Global Dairy Trade Index have been increasing steadily since the start of the year, especially cheddar cheese and butter. For the first time in years, large surpluses of stored dry dairy products, called “intervention stocks,” have been sold off and no longer weigh on global market prices.

MILK PRICES TO RISE IN 2019 With all these issues happening simultaneously, the consensus among the agricultural community is that milk prices will rise as we head further into 2019. Several marketplace signals indicating higher prices down the road have

become more sustained and therefore more reliable. A few university economists now feel that Class III could climb to $17 later in the year. Feed prices remain steady to a little higher. Weather plays a big factor, and lately it has been wet. In its latest monthly forecast, the USDA has lowered projected annual milk production for the fifth month in a row, as cow numbers continue to decline. Milk production is still expected to grow but at a slower pace than what was projected earlier. Production per cow, of course, is expected to continue its climb upward. The USDA now estimates 219.5 pounds of milk will be produced in the U.S. for 2019. This is a reduction of 0.2 billion pounds from its previous month’s estimate. The USDA lowered its export estimate based on its belief that tariff wars, especially with China, will continue. Whey prices have been weaker because China has

(Used by permission from Hoard’s Dairyman Intel and author Corey Geiger)

20 • Northeast Dairy Foods Association, Inc.

Economic Outlook

not has imposed tariffs but is experiencing problems with swine fever, which has reduced its demand for whey as feed. The USDA raised its domestic use forecast based upon strong domestic demand over the last few months and expected continuation of a vibrant economy. The biggest change the USDA made to the product price forecasts was in cheese, which was raised another 4 cents. Whey was lowered 4.5 cents. The butter price, which has been holding quite steady, was revised down slightly from the previous forecast. It appears as if butter prices are expected to remain steady between $2.26 to $2.36 per pound for the remainder of the year. Nonfat dry milk estimates were reduced very slightly from the previous monthâ&#x20AC;&#x2122;s forecast. However, the USDA may be too conservative with their NDM forecast because the potential for increased exports remains probable, as other exporting countries like New Zealand and Australia contract. The USDA now has the Class III price forecast for the year at $15.10 to $15.60 per cwt, which is 15 cents higher at

the midpoint of the range than in the previous month forecast. The USDA expects higher cheese prices to outweigh lower expected whey prices. The Class IV price forecast was lowered 5 cents at the midpoint of the range to $15.75 to $16.35 per cwt due to lower expected butter and NDM prices. This could change quickly with world demand. As global dairy product prices increase, U.S. prices become more attractive, which could lead to more exports. The allmilk price for 2019 is now forecast at $17.25 to $17.75 per cwt, an increase of 20 cents at the midpoint of the range from the last forecast. Gary Latta is a dairy product specialist consultant for the Northeast Dairy Foods Association, Inc. He has more than 30 years of experience in providing economic analysis, statistics and information to the dairy processing industry. NED Magazine | Second Quarter 2019 â&#x20AC;˘ 21

22 â&#x20AC;¢ Northeast Dairy Foods Foods Association, Association, Inc. Inc.

FOOD DEFENSE/FRAUD/SAFETY

ave you ever seen someone in your facility who seems out of place? Did you say or do something about it? Rod Wheeler has made a career out of walking into buildings or on to food facility production floors unannounced (except to select management) and seeing just how far he can get without being questioned. In many cases, no one stops him or even gives him a second glance. Once, he followed posted signs that pointed him right to a manufacturer’s raw materials and pre-packaging areas, having full access to products being prepared to go out to consumers. Had he intended to lace these products with deadly contaminants, he would have easily had access. Over the past 10 years, he’s gone through the front door of many a company, signed the visitor’s log as Osama bin Laden and has never been questioned. At one major food processor, he approached a security guard, told him who he was and was given a full access pass to a food facility — without ever having to show identification. The security guard even showed him a shortcut through the production area to get to his presumed destination. Wheeler believes the security guard figured he was on the upand-up because he was wearing a suit and tie. “Guess what?” Wheeler said. “A terrorist can wear a suit and tie, too!” With a career in law enforcement, Wheeler is founder and CEO of Global Food Defense Institute based in Washington, D.C. Previously, he served as the director of the Office of Homeland Security & Emergency Preparedness with the Food Products Association and as secretariat of the Food and Agricultural Coordinating Council, a group made up of high-level federal and state government officials and senior representatives from the food industry. Today, his work with the GFDI brings him into food manufacturing plants across the nation as a trained set of eyes that can see what those on the inside might not notice. Through the GFDI, he has orchestrated approximately 500 physical security and vulnerability assessments and written countless security response and crisis management plans for companies of all sizes. The Food and Drug Administration’s Food Safety Modernization Act Final Rule for Intentional Adulteration goes into effect in June in an effort to “prevent intentional adulteration from acts intended to cause wide-scale harm to

You don’t want to wait until something happens to say, ‘What are we going to do about this?’ You need a plan place now. public health by targeting the food supply” (see sidebar on Page 25). This deadline has created an even greater need for companies of all sizes to make sure their safety and security protocols meet — or exceed — the standards. Wheeler credits the dairy industry for having a head start on food defense protocols, in part, thanks to the work of the International Dairy Foods Association under the leadership of its former vice president of regulatory affairs and counsel, Clay Detlefsen. However, he also acknowledges that the dairy industry is vulnerable, particularly as it deals in liquids, which can be particularly vulnerable to tampering. Because of this, he does not believe in simply “checking off the boxes” of FSMA IA Rule compliance. “The angle I use with companies is ‘Yes, of course, you are going to comply with the FSMA deadline, but, at the end of the day, does this make your facility safe and secure?’” Wheeler said. “You don’t want to wait until something happens to say, ‘What are we going to do about this?’ You need a plan place now.” “We as a country have changed since 9/11,” he said. “Before that, we didn’t have to worry about security of doors, access management and checking IDs or making sure people were who they said they were,” he noted. “It’s different now. We know all it takes is one incident. The wanna-be bad guy gets to try over and over to attack us, but we only get one opportunity to stop them. We can’t be asleep at the wheel.” “What do you do if you are the receptionist who receives a call saying someone has placed a deadly contaminant into your ingredients? Do you stop production? Call the FDA? Notify your customers? Call the police? And, if so, which police or law enforcement agency?” Wheeler asked. “Most police departments do not have a protocol for this type of incident, so a company needs to have its own plan ready to go.” (continued on next page) NED Magazine | Second Quarter 2019 • 23

FOOD DEFENSE/FRAUD/SAFETY

With that in mind, GFDI has a number of options from employee awareness training to a response plan for a contamination threat. Having a plan in place and giving employees the information they need if something goes awry can be both effective and empowering. “You need to think like a criminal or a terrorist,” said Wheeler, who has been known to enter facilities at 2 a.m. — when there are fewer workers around — and place playing cards in vulnerable places to prove he’s been there. The next morning, he shows employees how easily someone can gain access to their facility. “Terrorists don’t just operate from 9 to 5. You’re going to have to change your thought process. If you think like the bad guy, it will be easier to identify the vulnerabilities in your facilities,” he said. And, it’s not only large corporations in big cities that need to be on alert. A food security/defense breach can happen anywhere — large or small. Terrorists don’t always come from the outside either; sadly, they can even be employees. Every food manufacturer is vulnerable and needs to stay vigilant. Wheeler’s unannounced visits haven’t gone entirely unnoticed, however, and he’s glad of it. At one facility, he entered with a clipboard and grabbed a white smock hanging by the door before entering a production area where a few dozen employees were working. Most probably assumed he was just

24 • Northeast Dairy Foods Association, Inc.

an inspector, but no one asked. That is until he heard someone yell, “Stop! Stop!,” as an older female employee shooed him out immediately. She didn’t sound the alarm because she thought he was a terrorist, but she knew he didn’t belong there. Why? Because she noticed that he wasn’t wearing the required hair net or shoe protectors around the food products. Frontline workers like this woman are the greatest asset in the face of food defense, according to Wheeler. “You can buy all the cameras you want or install the best high-tech card access system, but none of these devices can compare to someone who works on the production floor day-after-day and has the ability to notice that something is amiss,” he said. “It’s the frontline worker who is going to stop the next 9/11.” Recently, Wheeler has been working with members of the Northeast Dairy Foods Association, including the Upstate Niagara Cooperative, Inc., and applauds them for making the commitment to really understanding the threats that exist and designating the needed resources to make sure their facilities, products and customers remain safe and secure. “Food defense has become very important to the dairy industry, and the training sessions were a great way to help improve employee awareness throughout our organization,” said Gene Butzer, director of corporate quality assurance for Upstate Niagara Cooperative, Inc. “Upstate Niagara Cooperative

FOOD DEFENSE/FRAUD/SAFETY will be partnering further with Mr. Wheeler to perform site vulnerability assessments and upgrade our food defense plans based on these assessments. Key individuals will be trained and certified to ensure our facilities comply with FSMA Food Defense/Intentional Adulteration requirements. We are excited to continue our partnership with Rod Wheeler and the Global Food Defense Institute.” Wheeler knows the information and strategies he’s providing make a difference. He recently got an email from a senior vice president of a food industry company who went to visit one of the facilities that had received training. The vice president had attempted to cut through the production area of one of his company’s locations but was stopped by

a frontline worker who asked him who he was. When he replied that he was a senior vice president of the company, the frontline worker politely but emphatically said, “Well, if you are who you say you are, then you know you need to follow our procedures and check in with our receptionist.” The VP quickly complied. For more information on GDFI’s programs, which include “What Would You Do?” Management Training, Uniformed Security Officers First Responder Training, Active Shooter Readiness and Awareness or “See Something-Say Something” Frontline Employee Training, visit www.myfooddefense.com. Caroline K. Reff is the editor of Northeast Dairy.

WHAT DOES THE FSMA FINAL RULE FOR MITIGATION STRATEGIES REQUIRE? The FDA Food Safety Modernization Act final rule “is aimed at preventing intentional adulteration from acts intended to cause wide-scale harm to public health, including acts of terrorism targeting the food supply. Such acts, while not likely to occur, could cause illness, death, economic disruption of the food supply absent mitigation strategies,” according to a fact sheet put out by the U.S. Department of Health and Human Services/U.S. Food & Drug Administration. The proposed rule was originally issued in 2013, but changes were made to answer questions or provide clarification and additional information to stakeholders trying to understand how to best assess their facilities, put strategies into place and ensure these strategies are working effectively. The rule is a compilation of information taken from the intelligence community and the food industry and is primarily intended to prevent “acts intended to cause wide-scale harm,” and includes “acts of disgruntled employees or economically motivated adulteration.” According to the FDA fact sheet, the rule was created for large and mid-sized companies with a wide reach — approximately 3,400 companies that operate almost 10,000 food facilities. Although some smaller food processors are also included in the rule, very small companies, including farms, are exempt from this rule. It does, however, apply to large and mid-sized scale producers and manufacturers in the dairy industry and to those international companies that export products to the U.S. They, too, must comply with the rule. The FDA has put forth requirements that zero-in on identification, evaluation and control of food safety hazards. Each facility that falls under this rule is required to create and implement a written food defense plan that “identifies vulnerabilities and actionable process steps, mitigation strategies and procedures for food defense monitoring, corrective action and verification.” The food defense plan must be reviewed and revised every three years. (continued on next page)

NED Magazine | Second Quarter 2019 • 25

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ACCORDING TO THE FDA, THE PLAN MUST INCLUDE THE FOLLOWING: • Vulnerability assessment, which identifies “vulnerabilities and actionable process steps for each type of food manufactured, processed, packed or held at the food facilities.” • Mitigation strategies “to provide assurance that vulnerabilities will be minimized or prevented” and tailored to the facilities and their specific procedures. • Mitigation strategy management components that dictate that “steps must be taken to ensure the proper implementation of each mitigation strategy,” including monitoring, correction action and verification. • Training and recordkeeping to “ensure that personnel assigned to the vulnerable areas receive appropriate training; facilities must maintain records for food defense monitoring, corrective actions and verification activities.” Compliance dates, which is the first rule of its kind according to the FDA, and a focus on education and outreach have been put into place. The FDA is providing an extended timeline in order for facilities to meet both existing FSMA rules, as well as comply with the intentional adulteration rule. Businesses have different compliance date requirements based on size. Very small businesses (averages less than $10 million annually) must comply within five years of the date of publication of the final rule. Small businesses with fewer than 500 employees have four years to comply; and other businesses without exemptions have three years to comply. For more specific information, visit www.regulations.gov or the FDA’s Food Safety Modernization Act page at www.fda.gov/FSMA.

26 • Northeast Dairy Foods Association, Inc.

FOOD DEFENSE/FRAUD/SAFETY

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Food Fraud Is Often Intentional, Economically Motivated

hen experts in the dairy industry hear the term “food fraud,” it quickly brings to mind one of the worst cases in recent history where approximately 300,000 children in China suffered kidney stones and renal failure due to milk powder used in infant formula. This was 2008, and more than 50,000 infants were hospitalized from drinking tainted formula. Six babies died. As this tragedy unfolded, it was discovered that more than 22 companies in China, including some linked to the U.S., were adding melamine to dry powdered infant formula in an effort to misrepresent the level of protein said to be contained in the product. (Melamine is an organic compound that is often combined with other substances to create items that range from plastic kitchenware and floor tiles to fertilizers and fire-retardant fabric. Contact with it at appropriate levels appears to be safe. Consumption of it, however, can be dangerous and even deadly.) 28 • Northeast Dairy Foods Association, Inc.

News of the tainted baby formula spread quickly, prompting the U.S. Food and Drug Administration to issue new methods for the analysis of melamine and cyanuric acid in infant formulas (although not allowed in the U.S.), as did other regulatory bodies in countries around the world. China, too, passed new laws regulating additives to food and toughened government safety controls, including a specific set of rules for baby formula. However, it was too little too late. According to The New England Journal of Medicine, many Chinese children who consumed melamine-tainted formula in 2008 were still suffering long-term health effects almost a decade later. Today in China, consumers prefer foreign brands of baby formulas, according to a recent study of 10,000 Chinese parents conducted by consulting firm McKinsey & Co. According to Food Fraud and Prevention: Economicallymotivated Adulteration put out by Nestle, “food fraud commonly encompasses a wide range of deliberate fraudulent acts.” The

FOOD DEFENSE/FRAUD/SAFETY TOP 10 FOODS MOST VULNERABLE TO FRAUD • OLIVE OIL • MILK • HONEY • SAFFRON • FRUIT JUICE

• COFFEE • BLACK PEPPER • TEA • FISH • MAPLE SYRUP

(Source: Kimberly Bukowski Presentation, 2018 NDFA Convention)

report goes on to say that this issue involves “the intentional or economically-motivated adulteration of foods — adding non-authentic substances or removing, replacing authentic substances without the purchaser’s knowledge — for the economic gain of the seller.” Food fraud comes in many forms, including • Sale of food that is unfit or potentially harmful • Recycling of animal by-products back into the food chain • Packaging and selling meat with unknown origins • Deliberately selling goods past their “use by” date • Purposely mislabeling food (e.g., substituting less expensive ingredients or false claims related to the food items source) Even when it’s not physically harmful, it remains unethical for a variety of reasons that stem from greed, carelessness and less rigorous standards in other parts of the world. Just a few years ago, ground beef in Ireland was found to contain horsemeat. Although legal and commonplace in other parts of Europe, it caused quite an outcry in Ireland, as well as in the U.S. Honey labeled from Europe often really comes from China. Olive oil is often derived not from olives but from less desirable palm, sunflower, sesame seed or, most commonly, hazelnut oils. Fruit juice, particularly apple, may be labeled “100 percent juice” but instead contains beet sugar, corn syrup, water, and other ingredients — and sometimes no apples at all! (U.S. company Beech-Nut, in fact, pleaded guilty to federal charges of selling fake apple juice in 1987 to the tune of a $2 million fine and significant impact on its brand.) A cup of coffee may not be ground from only the finest Arabica beans but instead use husks, twigs, malt, starch or even paper as filler. And, milk has been found to contain vegetable protein, milk from other animal species and/or the addition of whey or water. At the 2018 Northeast Dairy Foods Convention, board member Kimberly Bukowski, extension support specialist in

the Department of Food Science at Cornell University, gave a presentation on food fraud and the difficulty in detecting it in order to educate members on the risks out there and ways to minimize the chance of using inferior — and even dangerous — ingredients. The good news is that in the U.S. most consumers are eating what they think they are eating. According to Bukowski, due to stringent government regulations, the United States’ food supply is very safe and doesn’t experience too many instances of fraud. And while milk is one of the Top 10 foods subjected to food fraud worldwide (see sidebar above), there is minimal risk in the U.S., where it is rigidly tested for water content, antibiotics, bacteria, temperature control, etc., from the farm all the way to the dairy case. Strong approved supplier programs, certificates of analysis, sampling, transparency of partner food safety plans and knowing and trusting suppliers add an additional layer of protection. There’s no substitution for vigilance, however, as cracks in the system do happen. Milk labeled “organic” may start out that way on the farm, but steps along the supply chain — from transporting to packaging and more — could prove otherwise by the time dairy products are put in the hands of consumers. Much of the U.S. dairy industry’s concerns, however, stem from items used in dairy products that come from suppliers outside of the country. Ice cream, for example, may contain milk fresh from the local farm but could also contain chocolate, nuts or flavorings from non-U.S. sources that are not as easily verifiable. Unfortunately, food fraud is real, so continuous monitoring and watchfulness is a must. If the price is too low, there’s probably a reason for it. If something doesn’t seem right, it probably isn’t. In the end, however, strict government regulations give us a higher standard to do business with, and greater consumer expectations in the U.S. gives our industry the incentive to ensure that products are what they say they are. NED Magazine | Second Quarter 2019 • 29

FOOD DEFENSE/FRAUD/SAFETY DO YOU REALLY KNOW YOUR SUPPLIERS? How well do you know your suppliers? Have they always been transparent? On time? Reliable? Do the products they supply add value to your product? Is there any financial stress on a supplier’s business that might trickle down to affect your operation? What do their other partners say about them? Do the countries where these suppliers are based have different standards and regulations that don’t mesh with those in the U.S.? “Trust and verify” is the advice given by Patrick Penfield, professor of practice for supply chain management at the Martin J. Whitman School of Management at Syracuse University. “The further your supply chain stretches out, the more issues you can have. A shorter supply chain usually means greater integrity,” he said. Building relationships with your suppliers is key to

a reliable supply chain and decreases the risk of fraud, whether foreign or domestic. Choose the steps along your supply chain carefully. Your business depends on it, after all. In the end, everybody wins, as quality products are good for your company, your customers and consumers.

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30 • Northeast Dairy Foods Association, Inc.

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NDFA Leader’s Letter to the Editor Opposes Raw Milk (Editor’s Note: While we’ve addressed the Northeast Dairy Foods Association’s position on the dangers of raw milk in previous issues, it seemed only fitting to revisit it in this issue revolving around food safety, food fraud and food defense. Recently, Bruce Krupke, executive vice president of the Northeast Dairy Foods Association, sent a letter to Stephen Seeber, the editor of Lancaster

Farming, outlining the association’s position that raw milk is a continued danger to those who consume it. Lancaster Farming is the leading newspaper in the Northeast and Mid-Atlantic with more than 60,000 paid subscribers who look to the publication for news on the industry, market and commodity reports and agribusiness information each week.)

Dear Mr. Seeber: I read in your Feb. 16 edition a report by Phil Gruber on Raw Milk Illness Concern Spreads to 19 States that I’d like to comment on. Dairy farmers all across Pennsylvania and the Northeast U.S. should no longer support the sale of raw milk direct to consumers. At what point will someone stand up and state the practice is not good for the dairy production and processing industries and more importantly, for the consumer? Every time a report comes out and is plastered all across the news media for days and weeks that someone became sick because of consuming raw milk, it is very bad for our dairy industry. Food safety for our consumers should be our industry’s highest priority, but it isn’t in the case of raw milk sales. Government legislators, regulators and some members of our farming community are mute and continue to stick their heads in the sand on the issue. The sale of raw milk across state lines is against the law, (so) why isn’t it enforced? Our association of milk processors and dairy manufacturers opposes the sale of raw milk direct to consumers for the very reason people can become sick and in rare instances can die from consuming it. Just about every week somewhere in the U.S. (there) is a raw milk sickness outbreak report. When someone becomes ill from consuming raw milk, it is at the very least bad PR and at worst contributes to the decreased sales and consumption. The arguments allowing raw milk sales are weak at best. I hear them all the time, such as “I grew up drinking raw milk, and I was never sick” or “raw milk is better for you.” It doesn’t matter if you grew up drinking raw milk; the fact is at any time every batch of raw milk could contain some type of dangerous pathogen. Raw milk is not better for you. It has no mystical properties that cure anything. Consumers don’t know (that) the danger, signage or infrequent farm inspections are not enough to protect them. Everyday milk consumers, the ones we rely on for our sales, have come to know milk and dairy products are safe to consume because they have been pasteurized. They take it for granted; they don’t know the dangers raw milk can pose. But when they read news stories of milk making someone sick and our government agencies warning against consuming milk, they don’t make the correlation between raw and pasteurized. Any negative news story about our product erodes consumer confidence in all our milk and dairy products. If a milk processing plant were to accidentally not pasteurize the milk it packages, allow it to get to a store and then be uncovered by an inspection, a recall would be mandated and potentially the plant shut down. At best, it is hypocritical to allow the (continued on next page) NED Magazine | Second Quarter 2019 • 31

FOOD DEFENSE/FRAUD/SAFETY sale of raw milk to unsuspecting consumers while at the same time outlawing packaged raw milk sales from a milk plant. New York and other state farm bureaus continue to support the sale of raw milk. Although they will also tell you something needs to be done to reverse the continuing decline of milk consumption, these are opposing policies. It should be one or the other. The CDC, numerous health organizations like the Mayo Clinic, and prestigious universities warn about the dangers of consuming raw milk. Why aren’t we listening to them? If you want to drink raw milk and play Russian roulette, fine —– go ahead, buy a cow and milk her. We should call on our state legislatures to support an outright ban on the sale of raw milk to the general public. It is time to help increase milk consumption. We can all start here with the truth and acknowledge selling raw milk from a farm (or in a store, which is allowed in PA) to a consumer is bad policy that is no longer needed and, most importantly, is not safe. Sincerely, Bruce W. Krupke Executive Vice President Northeast Dairy Foods Association, Inc.

RAW MILK: FACT vs. FICTION Raw Milk is more nutritious and generally healthier than pasteurized milk.

FICTION

 Pasteurized milk has most of the same nutritional benefits as raw milk without the risk of serious disease. Raw milk can cause illness when used in other products like ice cream, yogurt or soft cheeses.

FACT

 The dangers of raw milk can carry over into other products that use the ingredient. Milk labeled “organic” is always safe to drink.

FICTION

 Organic milk does not automatically mean pasteurized milk. To avoid illness, always make sure your organic milk is pasteurized. Raw milk is completely safe as long as it comes from healthy animals raised on farms known for their sanitary conditions.

FICTION

 Even healthy animals and farms with outstanding health and safety records can transmit germs that are dangerous to humans. (Source: the Centers for Disease Control at www.cdc.gov)

32 • Northeast Dairy Foods Association, Inc.

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CDC INVESTIGATING EXPOSURE TO RB51 IN 19 STATES DUE TO CONSUMPTION OF RAW MILK The Centers for Disease Control and Prevention and state health officials are investigating potential exposures to Brucella strain RB51 in 19 states, connected to consuming raw milk from a farm in Pennsylvania. An unknown number of people may have been exposed to RB51 recently from drinking this farm’s raw milk. One case of RB51 has been confirmed in New York state. This type of Brucella is resistant to first-line drugs and can be difficult to diagnose because of limited testing options and the fact that early brucellosis symptoms are similar to those of more common illnesses, like influenza. The New York case is the third known instance of an infection from RB51 related to consuming raw milk or raw milk products produced in the U.S. The other two cases occurred in 2018 in New Jersey and Texas and were reported to have been caused by drinking raw milk from an online retailer and a farm, respectively. Hundreds of others were potentially exposed to RB51 during these incidents.

WHAT ARE THE SYMPTOMS OF BRUCELLA? According to the CDC, symptoms of Brucella may include: • Fever, sweats, loss of appetite, headache, fatigue and muscle and joint pain on initial exposure, which can lead to more serious complications. • Miscarriage in pregnant individuals. In addition, symptoms can begin in as little as five days to as long as six months after exposure to RB51. Those who are infected but do not seek treatment can develop serious complications, including heart problems, arthritis, spleen or liver enlargement and, in limited cases, even meningitis. For more information, visit cdc.gov. NED Magazine | Second Quarter 2019 • 33

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WHEN/WHY DID WE START PASTEURIZING MILK?

hose of us in the United States have the luxury of not having to often worry about things like typhoid fever, tuberculosis or dysentery, but there was a time when that simply was not so. These diseases were part of the spark that created pasteurization as a way of killing off diseases that lived in the milk supply and caused illness and even death. The process of pasteurization was first discovered, at least in part, by Louis Pasteur, a French microbiologist who began looking into the process as a way to prevent beer from spoiling. It was first used to remove microorganisms from milk in 1862. Pasteurization became the standard in the U.S. in the 1920s and by 1950s as a way to reduce milk contaminated with bacteria and other foodborne illnesses. According to the CDC, “Most public health professionals and health care providers consider pasteurization one of the public health’s most effective food safety interventions ever.” Many medical and scientific organizations, including the CDC, the Food and Drug Administration, the American Academy of Pediatrics, the American Veterinary Medication Association and the National Association of State Public Health Veterinarians, fully support the pasteurization of all milk consumed by human beings. And why not? Pasteurization heats milk to a temperature high enough to kill the germs that cause many of the illnesses mentioned above. Some say that pasteurization changes the nutritional values of milk, and, to some extent, they may be correct. Pasteurization deactivates some of the enzymes in the milk due to the high heat process, but experts do not believe these particular enzymes are vital to human health. In addition, pasteurization does, in fact, reduce some important nutrients. However, Americans are fortunate enough to have a varied enough diet to replace these nutrients while not taking the chance of contracting the food borne illnesses caused by raw milk.

IS PASTEURIZATION 100% SAFE? Almost any food product has, at some point, had some connection to a foodborne illness. Unfortunately, it is almost impossible to avoid this completely when most things we consume have so many points in the supply chain that may put the product at risk. Thankfully, it doesn’t happen too often. However, yes, even pasteurized milk can, at times, cause illness. According to the CDC, this most often happens after pasteurization; however, “pasteurized milk that is correctly handled in the dairy, bottles, sealed and refrigerated after pasteurization, and that is properly handled by the consumer, is very unlikely to contain illness-causing germs. Considering the massive amount of pasteurized milk that people in the U.S. drink, illness from it is very rare.” 34 • Northeast Dairy Foods Association, Inc.

WHERE ARE THE GERMS LURKING? Many raw milk proponents like to think that the product is safe because it’s “natural.” Often, you’ll hear farmers and their families say they drink milk “straight from the cow,” so it must be OK. Unfortunately, bacteria is lurking everywhere. According to the CDC, milk can become contaminated through animal feces, mastitis and other diseases cows contract (like bovine tuberculosis), contaminants found on processing equipment, insects and rodents, and cross contamination caused by employees. Even the cleanest barn and healthiest animals cannot ensure a bacteria-free environment. These factors only further the justification for pasteurization. While data on outbreaks is kept, it is important to remember that most people who get sick from raw milk probably never report it. Some may have only mild symptoms that they may not even identify with raw milk ingestion. Some may have more severe symptoms but not think to report them. Data is typically drawn from those who become so ill that they need to seek medical attention and are able to pinpoint the cause of their illness. This, in turn, means that there are far more people who have suffered the effects of raw milk than are reported.

WHY SOME STATES BUT NOT OTHERS? The sale of raw milk for human consumption varies from state-to-state. According to the CDC, half of U.S. states have made it illegal to sell directly to consumers; the other half allow it. Federal law does not allow raw milk to cross state lines once packaged for consumption. It can only be transported into another state if it is to be pasteurized or used to make aged cheese before being sold. According to the CDC, “States that allow the legal sale of raw milk for human consumption have more raw-milk related outbreaks of illness than states that do not allow raw mile to be sold legally.”

FOOD DEFENSE/FRAUD/SAFETY WHO’S AT GREATEST RISK? Of course, raw milk isn’t the only thing that can give you food poisoning. Everyone’s heard stories of a bout with a bad clam, macaroni salad left out in the sun or the dangers of handling raw chicken. Almost any kind of food can be dangerous if handled improperly. The good news is that most dairy and other foods are perfectly safe to eat. The bad news is that some groups of people are more susceptible to food poisoning than others, according to information from the U.S. Department of Health and Human Services. • Pregnant women are 10 times more likely than others to get listeria, which is often associated with unpasteurized dairy products, particularly soft cheeses. The infection can be passed to an unborn baby, which in some cases can be deadly. • Individuals with weakened immune systems due to various diseases or those undergoing chemotherapy or radiation cannot fight off germs as well as most healthy individuals, making them more susceptible to food poisoning. • Adults over age 65 are at higher risk because their immune systems typically don’t work quite as well as they once did. Nearly half of the people in this age group who contract foodborne illnesses like salmonella, listeria or E. coli end up in the hospital. • Children who are under the age of 5 are also at greater risk, as their immune systems are still developing. Children younger than 5 are three times more likely to end up in the hospital if they contract salmonella, and one out of seven kids who get E. coli experiences kidney failure.

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THE GLOBAL FOOD SAFETY INITIATIVE: Covering the Supply Chain from Farm to Fork

he Global Food Safety Initiative works collaboratively to make food safer for everyone, everywhere. According to its website, the GFSI “brings together key actors of the food industry to collaboratively drive continuous improvement in food safety management systems around the world.” Managed by The Consumer Goods Forum, the GFSI is a volunteer organization created in 2000 to find “collaborative solutions to collective concerns, notably to reduce food safety risks, audit duplication and costs while building trust throughout the supply.” The organization brings together food safety experts from around the globe in areas of retail manufacturing and food services, as well as international organizations, governments, academia and service providers working within the global food industry. According to mygfsi.com, its objectives are to: • Reduce food safety risks by delivering equivalence and convergence between effective food safety management systems • Manage cost in the global food system by eliminating redundancy and improving operational efficiency • Develop competencies and capacity building in food safety to create consistent and effective global food systems • Provide a unique international stakeholder platform for collaboration, knowledge exchange and networking. 36 • Northeast Dairy Foods Association, Inc.

In March, the Global Food Safety Initiative announced the release of the latest version of the GFSI Benchmarking Requirements, a document outlining what makes a good food safety system and enabling the benchmarking of food safety certification programs. The latest version, called Version 7, focuses on improving auditor competency and covering the entire supply chain, supplying Fast-Moving Consumer Goods businesses with an outline of requirements for a robust food safety infrastructure and explaining the step-by-step process for applying for a GFSI-recognized certificate program. According to a press release put out by GFSI, the latest version is a result of a year of work from a dedicated task force consisting of representatives from GFSI-recognized Certification Program Owners, accreditation and certification bodies and the wider food industry, “making it the strongest yet.” Over the last 18 years, the GFSI has brought together the most influential food industry stakeholders, encouraging them to collaborate on the advancement of food safety. The GFSI Benchmarking Requirements have been an essential part of that mission since the publication of the first version in 2001. This latest version focuses on stricter auditor assessment and coverage of the full supply chain “from farm to fork.” For more information, visit www.mygfsi.com.

FOOD DEFENSE/FRAUD/SAFETY

SQF: A GLOBAL STAMP OF APPROVAL Today’s supply chains don’t just go from your local farmer to your general store. Often, a supply chain is a complex route with many stops along the way — from farm to table may be connected by routes across the nation or across the globe with a wide variety of products and sources. This reality creates an even greater urgency to protect your supply chain and, ultimately, the consumer through safety, security and quality. The Safe Quality Food Program “is a rigorous and credible food safety and quality program that is recognized by retailers, brand owners and food service providers world-wide,” according to the SQF website, www.sqfi.com. This standard is recognized by the Global Food Safety Initiative to “meet industry, customer and regulatory requirements for all sectors of the food supply chain — from the farm all the way to the retail stores.” When a customer sees the SQF certification on a product, he or she can be certain that the

food item has gone through an extensive process to ensure it is safe to consume, no matter where in the world a product or its ingredients originate. It’s an indication of approval based on consistent manufacturing processes, compliance and a commitment to continuous improvement. The Food Safety Modernization Act establishes a minimum requirement for food safety across all food-related industries. This has resulted in a greater focus on SQF certifications, which were updated as recently as last year. Currently, there are three SQF certification levels: • Food Safety Fundamentals: This is an entry-level certification for new businesses. • Food Safety Code: This next level focuses on meeting industry SQF requirements. • Quality Code: This highest level of certification takes a closer look at maintaining quality products through statistical process controls in order to “monitor, identify and reduce process variations.”

NED Magazine | Second Quarter 2019 • 37

FOOD DEFENSE/FRAUD/SAFETY

Excuse Me, but What Is THAT in my Ice Cream?

BY CAROLINE K. REFF

ce cream is a tasty summertime tradition in the Northeast, as friends and families gather at scoop shops for everything from classic chocolate and vanilla to more adventurous mocha almond chip or moose tracks. To the average consumer, the most dangerous thing about ice cream is a hot day that melts the delicious treater faster than one can eat it. However, if you work for an ice cream manufacturer or in a scoop shop, you know that there can be real danger lurking in a tub of bulk ice cream. 38 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

Many scoop shops use some form of a standard 3-gallon tub made of paperboard with a metal ring at the top and bottom that has been in use for a century. Unfortunately, this metal ring poses a real risk for injury, like cuts and scrapes, during the fabrication, manufacturing and scooping process. The earliest bulk ice cream containers were made entirely of metal, until a fiber-based drum supported on both ends by metal rings was introduced in the 1930s. This innovation, first commercialized by Sealright, reduced weight

FOOD DEFENSE/FRAUD/SAFETY

without sacrificing the strength of the containers, but it had its drawback — razor sharp edges around the metal rings! Amazingly, many ice cream manufacturers and scoop shops are still using this type of container, when a number of packaging companies offer non-metal alternatives made of fiberboard and plastic.

CUTS AND SCRAPES HAPPEN Unfortunately, cuts and scrapes are a reality at both the manufacturing and the scooping ends of ice cream. Most injuries involving metal rings happen when fabrication, stocking, storing, manually handling or scooping from the containers. Employees on the manufacturing floor often injure themselves while fabricating bulk containers. Loading fabricating machines with razor-sharp metal strips used to form the metal rings is especially dangerous, and even the slightest miscalculation or malfunction can result in a scrape or even more serious cut to hands and arms. The dangers don’t stop there. While not a regular occurrence, it is possible for metal shavings from the rings or even a nut or bolt from the machinery to drop into the ice

cream during packing. Most food manufacturers use metal detectors to scan for such objects, but this technology is of no use when ice cream is packaged in metal-based containers. Finally, the metal rings are a significant danger at the scoop shop. Employees must handle the containers, as well as reach in and out of them hundreds of times each day to scoop ice cream for customers. Many scoop shop employees will tell you that cuts and scrapes from the sharp edges of the metal rings are a common occurrence, which can result in both injury and waste of an entire tub of ice cream that must be disposed of in case of contamination from bloodborn pathogens. Worst yet is the possibility, though slight, that undetected drops of blood contaminate the product that then goes on to the customer’s ice cream cone! Scoop shop employees are also at risk of scrapes and cuts to legs and

(continued on next page)

NED Magazine | Second Quarter 2019 • 39

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feet, as they typically step on the empty containers to make more room in the trash. No one wants an employee to suffer even the most minor scrape, no less a serious injury, and certainly no consumer wants to find a metal shard or think about the possibility of blood in his or her ice cream. Yet, some manufacturers and scoop shop owners still have not make the switch to safer alternatives.

FINDING A SOLUTION The risk of the metal ring is nothing new. D. Thomas + Associates, a Kansas City, Missouri, company that provides packaging solutions for the food industry, developed the first plant forming system to replace metal ring canisters in 2005. At the time, there were few, if any, non-metal options. Partner Tim Layton remembers visiting various high profile ice cream shops and noticing the metal bands on the containers sticking up. He’d typically ask employees if they were ever cut, and many said it was simply a hazard of the job. D. Thomas + Associates decided it shouldn’t have to be, and the company began working with engineers and others 40 • Northeast Dairy Foods Association, Inc.

in the ice cream industry to design a system to fabricate metal-free containers on site that were also durable enough to preserve the ice cream and light enough to economical transport the ice cream to customers. By 2005, D. Thomas + Associates introduced a non-metal bulk packaging solution, called NMC3. A report from insurance provider Lockton Companies, LLC, and initiated by D. Thomas + Associates in 2006 said the “NMC3 paperboard container and the machinery to fabricate them are product innovations. They can help control costs through enhanced product safety and quality, as well as reduce worker and vendor injuries.” Shortly after D. Thomas + Associates debuted its concept, Weidenhammer New Packaging, LLC, introduced a similar paper/plastic ring in 2008 that represented a more optimum combination of materials and machine. This product offered a water tight seal design, simple modern forming machine technology and excellent lid fit performance. In 2011, D. Thomas + Associates joined forces with Weidenhammer. “We knew we needed a partner to help us take this to the next level,” said Layton.

FOOD DEFENSE/FRAUD/SAFETY

Since then, Weidenhammer has been a driving force behind the switch to non-metal ring bulk ice cream containers. Over the past few years, the company has made a number of public statements illustrating the need to eliminate the risk of metal ring-style bulk drum packaging from the market and continues to make it its mission to inform the industry, customers and the public about this danger and how easily it can be eliminated, according to Glenn Emory, general manager, North America, Weidenhammer New Packaging, LLC. Emory acknowledges that the company certainly sees a profit to be made from this product, but he is always adamant that this is not the primary goal. “We understand that there are other packaging companies out there offering similar solutions, and we applaud that,” he said. “Our main priority is safety. For those who work on the manufacturing end to the employees and customers at the scoop shop, Weidenhammer is convinced that there remains zero justification for the continued existence of metal ring packaging in the ice cream industry.” The industry is catching on, according to Emory, who reported that Weidenhammer has achieved sales of roughly 25 percent of the bulk ice cream market and continues to grow in the double-digit level each year. Many ice cream manufacturers, including Northeast Dairy Foods Association members HP Hood, Turkey Hill and Cornell University, have made the decision to eliminate metal components in their bulk ice cream containers. Some companies, particularly smaller ones that don’t use in-plant forming options, have opted for plastic pails and/or folding cartons as a more affordable and safer option. “Change can be challenging, yet these members and industry pioneers have already blazed the trail by welcoming innovation and product improvement in bulk ice cream packaging. They’ve reassessed their go-to-market strategies, reviewed in-plant material flow, production processes and the impact through to the scoop shop,” Emory explained. “Companies are realizing that metal components in packaging provide zero advantage, but metal-free packaging offers many, including

enhanced worker safety, a wider material selection to support the brand and less product waste. Working together, we, as an industry, can raise awareness, incorporate existing solutions and work together to keep employees and consumers safe from harm.”

FOOD EXPERT: CONTINUAL IMPROVEMENT Scott Rankin, Ph.D., is a professor and chair of the Department of Food Science at the College of Agricultural & Life Sciences at the University of Wisconsin-Madison. Rankin is a known expert on the risks of food contamination and the damage that can ensue. In fact, after hearing about the metal ring-free packaging options, the University of Wisconsin’s Babcock Hall Dairy adopted the design to make the change to non-metal bulk containers. “For us, the plastic closure system represents an improved design,” said Rankin. “There are many concerns related to the potential for a metal closure to pose a physical hazard, including the final manufacture of the container itself and its handling at the retail level. The manufacturing industry

NED Magazine | Second Quarter 2019 • 41

FOOD DEFENSE/FRAUD/SAFETY is continually seeking ways to improve the safety of food products and packaging. As a result, packaging manufacturers seek and employ improved methods and materials for product functionality and safety. Metal packaging materials and closures have their place, such as in canned foods, but other packaging systems can utilize alternate materials that improve functionality, handling, manufacturing, sustainability and of course food safety.” Rankin acknowledges that the risk of bloodborne pathogens ending up in someone’s ice cream cone is slight, but he explained that there are still hazards associated with metal rings that can cause physical injury to employees or result in metal accidentally entering the product during manufacturing or serving. “From our perspective, the plastic design is an improvement,” he stated. “Although there’s no specific regulatory standard on this, there certainly are practical improvements involving package integrity, handling performance and overall safety. Our dairy switched over to a plastic closure design for these reasons.”

THRIFTY ICE CREAM LEADS THE WAY IN SAFER SOLUTIONS Scott Becsi remembers the days when as a young child he would ride his Schwinn bicycle to the local Thrifty Drug Store to peer over the ice cream counter and make his choice from among all the delicious flavors. At the time, a single scoop was a nickel, a double scoop a dime and a triple scoop just 15 cents. “I must have been destined to be a very cost-conscious person because I quickly figured out that purchasing two 5 cent singles was a better deal than one 10 cent double because I was getting two cones!” he said. Today, Becsi’s love for ice cream remains as strong as ever as the general manager of Thrifty Ice Cream, a popular brand 42 • Northeast Dairy Foods Association, Inc.

that has been well known on the West Coast for 80 years. The company is wholly owned by Rite Aid Pharmacies, which has approximately 700 locations in Southern California that dip Thrifty Ice Cream out of canisters that do not have metal components. The company instituted the non-metal technology in 2005 — longer than any other major ice cream manufacturer in the U.S., according to Becsi. After three decades in the ice cream business, Becsi has seen ice cream bulk packaging evolve from the handling of dangerous metal rings to today’s plastic ring options. He acknowledges that the use of plastic closed a huge safety gap for his employees and product. “Before we made the switch, we would take workers’ compensation claims from operators making the containers at least once a month,” he said. “At the ice cream shops, we would also get complaints and sometimes actual claims from employees scooping from and disposing of the metal ring containers. That’s why we made the move to something that was scannable during manufacturing and much safer to handle at every point in our process.” Thrifty partnered with Weidenhammer New Packaging, LLC, for a better solution and has never looked back. Becsi considers this change as a “way of protecting the value of your brand.” “Good news travels fast, but bad news travels at the speed of light,” he said, noting that this has become an even greater concern in the age of social media. “We’re always trying to make things better. Even though it may be a bit of an investment in the short run, in the long run, these kind of improvements and safety precautions are better for our employees, our consumers and out brand.” Becsi has a hard time understanding why every ice cream manufacturer hasn’t made the switch. “I guess it’s the human condition to think change equals conflict,” he said. “People like routine. They have been trained to do things in a certain way. It is difficult to adjust when you’ve been doing something the same way for 40 years, so why change now? In the end, those are really not good arguments from my perspective.” Becsi is proud of Thrifty Ice Cream and the idea that it is as popular today as it was when he was a boy, and he is committed to keeping that reputation growing strong. “Our parent company, Rite Aid, is a Fortune 500 company, and that enables us to set an example for others,” he said. “Thrifty Ice Cream has the ability to be a leader in the industry because of our size and scope, and we intend to continue to share our best practices in the hopes that others may follow.” Caroline K. Reff is the editor of Northeast Dairy.

FOOD DEFENSE/FRAUD/SAFETY

NYS AG DEPARTMENT NOT CONCERNED WITH UNREGULATED MILK TRANSPORT BY SMALL BUSINESSES

e all intend for the food we produce, deliver and sell to consumers to be safe, but, unfortunately, sometimes things do fall through the cracks skirting appropriate oversight or specific regulations. One that has been flying under the radar in the dairy industry, according to Bruce W. Krupke, executive vice president of the Northeast Dairy Foods Association, Inc., is the transport

of small volumes of milk by retailers (e.g., corner markets, bodegas, restaurants and even day care centers). These entities often avoid the cost of contracting with a licensed milk distributor because they use such a small quantity on a daily or weekly basis that they find it is easier to simply go to a big box discount chain (think Costco or Sam’s Club) and purchase just the small quantities they need. It’s most likely cheaper and quicker, but is it safe for consumers?

This sounds simple enough, but the question remains: What happens next? Most of those who purchase only a small quantity of milk do not transport this perishable product in a refrigerated vehicle. Most likely, it’s placed in a trunk or back seat of a standard automobile — the same place where the family dog might have been sitting just a few hours earlier. Is the milk taken directly to the business before the temperature can rise? Or does it sit there for a while as the employee NED Magazine | Second Quarter 2019 • 43

FOOD DEFENSE/FRAUD/SAFETY makes a few more stops along the way? Yes, the milk might return to the proper temperature after it’s been refrigerated at the store or restaurant, but what assurance does the public have that it hasn’t been compromised during transport in the trunk of someone’s car. None, in fact. None at all. However, this process is actually legal under the Agriculture and Markets Law Article 21 in New York, according to a letter received by Krupke from Casey McCue, director of the New York State Department of Agriculture and Markets. McCue went on to explain that the policy has been in effect for years and continues because “it has been determined that the milk transported by such ‘small’ milk dealers was mostly found to be handled in a satisfactory manner, both in terms of temperature and sanitation.” In 1999, Section 257-a was amended, in fact, to align the transport of small quantities of milk with a 3,000-pound licensing exemption policy. According to McCue, this exemption also applies to stores that make off-premise deliveries. McCue concluded his correspondence saying: “Since we have not observed any indication that this is an increased public health risk, we do not believe that a change in regulation is warranted at this time. If such indicators change, we would be happy to assess at that time.” Don and Gina Husted of Husted Dairy are licensed milk distributors in Liverpool, New York, and they see the actions of small milk dealers impacting their business and the safety of the consumer every day. The Husted family has been in business since 1966, and over the years they’ve continued to be frustrated by these actions and lack of regulations. It’s no secret in the dairy industry, particularly to distributors like the Husteds. They know they must comply with laws regulating those that 44 • Northeast Dairy Foods Association, Inc.

deliver in excess of 3,000-pounds, as well as the cost of licensing, Department of Health inspections and more. “We know it goes on, but there’s nobody watching,” said co-owner Gina Husted. “We’ve lost a lot of business.” While Gina Husted acknowledges that her operation has a minimum order that might not seem reasonable for a restaurant that only needs a few gallons of milk per day, she knows there are other factors that add unseen costs to those shopping for their own dairy and also put consumers at unnecessary risk. “Let’s say you take your baby to a day care,” Gina Husted explained. “That day care employee goes into a store to pick up all her food supplies for the week, including milk, puts this in her cart and finishes the rest of her shopping. Then, the milk is put in the back of her car — it’s not refrigerated — and she might continue running errands while the milk that is going to your baby sits in the back getting warm. Think about it; that’s what’s going to be fed to your baby this week!” “If everybody was well regulated by the government and had to sell milk at a minimum like they do cigarettes, then we wouldn’t have such a problem,” she explained. “Small outfits don’t realize the risk involved in buying their own milk this way. They’re not thinking about it. In today’s world, everyone is just trying to save money wherever they can.”

SEEKING A RESPONSE Northeast Dairy reached out to the New York State Department of Agriculture and Markets for a more detailed response as to why this practice is allowed to continue. The department responded as follows: “Public health and food safety are a priority for the New York State Department of Agriculture and Markets. Since neither the department nor the FDA has observed any indication that the transport of small

amount of milk presents an increased public health risk — through consumer complaint systems or networks that monitor foodborne illness — the department does not believe that a change in regulation is warranted in that time. If such indicators change, the department will reassess its positions.” The department went on to include more information to support its stance, stating that: “The CDC has found the foodborne illnesses from pasteurized milk are rare,” citing only 10 outbreaks of foodborne illnesses related to dairy products in the U.S. in 2016. All of these are reported to involved unpasteurized dairy products. Strict federal and state regulations are in place that require milk to be kept at 45 degree F. or less in both manufacturing and retail food store settings. The department stated that many regulatory agencies “promptly investigate” complaints regarding storage and handling of dairy products. “Milk is stored, shipped and sold in closed, sealed containers to ensure the sanitation of the product.” And, the exemption for those transporting small quantities of milk and dairy products “assures that there are not unnecessary regulatory requirements that place an undue burden on small businesses.” “This is all well and good,” responded Krupke, “but it doesn’t truly address the issue at hand — how does the consumer know that the milk that left a big box store at 45 degrees and is later purchased at a small business or served at a restaurant was kept at a safe temperature in transport? This piece of the argument has been dismissed. The state seems to stand by the statistics that say this only impacts a few people each year, but would you want your customer or your family member to be one of those people? I doubt it. We have more work to do regarding this issue.”

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MILKPEP CAMPAIGNS HELP EDUCATE CONSUMERS, INCREASE MILK CONSUMPTION

hen’s the last time you ordered a glass of milk at a restaurant instead of a cocktail, soda or just plain water? Are you often baffled by the numerous offerings in the dairy case — dairy, non-dairy, lactose-free, nut “milk,” etc.? Have you heard the rumors lately that milk is not good for you? You’re not alone. The American consumer is drinking less milk these days, and those who depend on it to make a living are worried. Many in the industry have expressed their concern that the industry itself is not doing enough to promote milk, particularly in the face of so many options, health trends and even misinformation. Enter MilkPEP, the Milk Processor Education Program, based in Washington, D.C., that is funded by milk companies across the country and “dedicated to educating consumers and increasing consumption of fluid milk.” According to MilkPEP’s website, www.milkpep.org, the organization is

monitored by the U.S. Department of Agriculture’s Agricultural Marketing Services. Northeast Dairy magazine recently interviewed Julia Kadison, CEO of MilkPEP, to gain some greater insight into how the organization is promoting milk — and how you can use its resources to promote milk, too!

NDFA: What are the particular challenges of promoting milk consumption at a time when there is such a wide selection of fluid beverages? JK: Yes, there are a lot of beverages out there, and people want choice and the excitement of trying new things. Milk has to stand out within that competitive marketplace, so it’s good to know that there are also a lot of real, dairy milk options, too. From whole milk for foodies to chocolate milk for athletes to single-serve for when you’re on-the-go, or lactose-free for people who don’t want the lactose — there’s real milk for everyone and every situation. But people don’t NED Magazine | Second Quarter 2019 • 45

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always think about milk that way — as individualized for their own needs and experiences. At MilkPEP, we want to show how personal and versatile — and exciting — real milk is. The challenge really is to get people to take another look at milk and to choose it over other options out there. A related challenge is to make sure people recognize the important role that milk does or can play in their lives today. So many of the moments that matter in our lives include milk — think about great food we prepare (or eat) that’s made with milk or accompanied by milk, the moments with friends and family that might include a latte or hot chocolate, simple pleasures like weekend breakfast with the whole family. Milk has and is something worth sharing: real food made by real people, and contributing to so many things that really matter in Americans’ lives. MilkPEP’s programs are working hard to convey to people the special and unique role of real milk.

MEET THE MODERN MILKMAN In April, MilkPEP introduced the Modern Day Milkman e-Commerce Program to promote milk in a world that has certainly been turned on its ear by the e-commerce/online shopping movement of late. The webinar was presented by Michele Brier, shopper marketing for MilkPEP, and Alex Gallagher, account director for arc. According to MilkPEP, more than half of consumers in the U.S. are expected to shop for groceries online in 2019. However, as they do so,

NDFA: What marketing efforts does MilkPEP have in the works? JK: MilkPEP is focused on three strategic imperatives

they worry about receiving fresh items, and milk, which is of

over the long-term, including winning with kids. We know kids represent the greatest milk volume opportunity today and are the parents of tomorrow, so we are driving kids’ milk consumption and usage by talking to them directly, and for younger kids, by talking with their moms and dads. By understanding the current consumer landscape and marrying it with real milk’s unique and ownable benefits, MilkPEP developed a new brand promise for milk: to inspire people to savor what’s real and what really matters, like fitness, health and well-being; fun moments with friends and delicious meals that we share with loved ones. We’re bringing this to life across all of our campaigns, including the new Milk. Love What’s Real campaign that reminds people of all the ways milk helps celebrate life’s real moments; Milk It!, which shows kids being awesome with their friends; and Built with Chocolate Milk, featuring athletes working hard and recovering with delicious chocolate milk. And, we’re not working on this alone. MilkPEP works closely with DMI (Dairy Management, Inc.) and state and (continued on next page)

who came to the door with fresh, cold milk day-after-day. It’s

46 • Northeast Dairy Foods Association, Inc.

course perishable, is certainly one of those items. The Modern Day Milkman is a nod to the classic milkman a bit of nostalgia combined with today’s click-to-purchase buying habits. MilkPEP’s milkman will be introduced into its e-commerce program slated to begin in July, but he won’t be disappearing anytime soon. You’ll be seeing his face year round with seasonal content of still photography and video that keeps him relevant and top of mind. Beginning in July, “The Modern Day Milkman helps you savor summer,” according to MilkPEP, with digital marketing that starts by promoting the online purchase of white milk through platforms like AmazonFresh and Instacart, while emphasizing milk as a fresh item to put in your e-commerce cart. The campaign will also include summer recipes, geotargeting and retargeting of those who click on MilkLife.com’s recipe page. Images of the milkman are available now at www.milkpep.org to customize your brand, as well as digital display banners, social posts and videos ready for download. Make a point to meet The Modern Day Milkman by visiting www.milkpep.org.

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regional dairy councils across the country to amplify the common messages that we all believe in: the importance and relevance of milk in people’s lives. We also work with and for milk brands, ensuring that they have access to the data, insights and communications assets that we believe will help transform people’s attitudes and behaviors to drive milk sales. We believe strongly that it will take the entire dairy community working in lock-step to make a true and lasting difference.

NDFA: How can farmers help promote milk consumption? JK: Across the dairy community, our shared goal is to connect consumers to the great work and to the people behind the nutritious, responsibly produced and real dairy

foods they love. Farmers are the heart and soul of this industry, and people respect and admire them. Farmers are often well-connected in their communities and have lots of friends and family members that can be leveraged to tell the great stories and remind folks about milk — stories of bringing milk’s goodness from the farm to the table and reminders of what real milk is all about and how it connects with the important things in life. From getting out messages of sustainable passion for their cows and their land to celebrating the values of our product, farmers should continue to share what milk means to them in real and authentic ways, helping to create an emotional connection with people and, ultimately, inspiring them to choose real milk.

NED Magazine | Second Quarter 2019 • 47

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NAVIGATING A CHANGING ECONOMY AND INDUSTRY Managing Profitability Through Lean/Six Sigma

inancial experts predict that the economy is due for a global slowdown, which will present additional challenges to U.S. businesses. Already navigating the dynamics of international trade, consumer preferences, industry consolidation and global dairy overproduction, the dairy industry is susceptible to profitability risk. Companies that remain at the forefront of change remain positioned to navigate these challenges with successful outcomes.

a continuous process to strategically assess opportunities and implement improvement initiatives resort to reactive and less effective actions. A strategic and methodical approach to manage profitability improvements will expose the inefficiencies and waste that is inherent within a company, most of which is masked during periods of sustained growth. Lean/Six Sigma methodologies can strategically manage your improvement process.

Where do I Start?

Started in post war Japan, Lean was designed to encourage creative thinking and discussions with employees to result in higher product quality and customer satisfaction. Lean is a customer-centric methodology, asking

Taking the time to look at strategies for managing through the current economic and industry challenges should be at the forefront of your strategy. Often, companies without 48 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

An Overview of Lean/Six Sigma

the question: â&#x20AC;&#x153;What does the customer want?â&#x20AC;? It then organizes its enterprise to provide a solution for what the customer wants, when they want it, at the lowest cost possible and with the highest desired level of quality. Most importantly, this is powered by individuals at all organizational levels. Next, the Greek letter Sigma is defined by statisticians to denote a standard deviation for a set of data. This is an important metric for analyzing business processes as it describes the variations from an established standard within a process. A low variation will typically provide more consistent quality and therefore customer satisfaction. Through the process as a discipline, Six Sigma is a problem-solving methodology dedicated to reducing deviations and improving performance.

Combined, Lean/Six Sigma provides an answer to “Where do I start?” Incorporating the Lean way of thinking with the tools of Six Sigma, a company can significantly improve its bottom line even with economic and industry challenges by eliminating waste through a culture of continuous improvement.

Project Focus/Specified Duration

Companies attempting to engage in a change initiative without a process can, unfortunately, discover a “project” can take on a life of its own. Typical problems that can occur are escalating costs, uncontrollable time commitment, creeping project scope and ultimately an abandonment of the initiative. To combat this situation, Lean/ Six Sigma deployment is structured around a disciplined project model. Each project is carefully planned and documented to ensure everyone is aware of the purpose of the project, why it’s important, the resources being committed to it, how its success will be measured and, most importantly, a start and end date. These criteria and other information are documented and agreed upon between the project team and the owner of the process being improved.

Top Down Training and Organizational Support

To ensure that the company is fully committed to the continuous improvement culture and program, a key first step is management training. Upper and mid-level individuals serve as project sponsors and team leaders, with a project sponsor authorizing project resources. A team leader facilitates the project execution with the assistance of a Master Black Belt project coach

trained in group facilitation and Six Sigma methods. Together, with the members of the project team each representing subject matter experts of the process being improved, they will drive organization alignment and integration necessary for the success of the project.

Consistently Deployed Methodology

Standardization is the key to improved quality and the elimination of waste that can effectively yield significant savings. The realization may be actual dollars or manifested within the elimination of non-value add activities allowing a redeployment of company resources to activities that add value for which customers are willing to pay. Lean/Six-Sigma projects utilize DMAIC, five key steps representing Define, Measure, Analyze, Improve and Control. Each step employs qualitative and statistically-based quantitative tools, which are designed to lead the project team to the desired solution. With a process of collection and subsequent analysis of data driving all decision making, the reliance and buy-in on recommended solutions is typically high since the results are repeatable and measureable.

To remain competitive, leadership needs to seek continuous improvement and drive meaningful change management to be sure the highest value possible is provided to customers with profitable returns to owners. Advances in technology continue to allow for automation, enhanced data analysis for decision making and other changes to traditional models, such as co-sourced and outsourced staffing, all of which are driving change in manufacturing, distribution, selling and administrative processes. The Lean/Six Sigma methodology will enable all companies operating in the dairy industry to gain a competitive advantage while navigating change. Dopkins & Company, LLP, provides full service audit, tax, accounting, consulting and wealth management solutions. Dopkins has a deep understanding of the dairy industry and agricultural cooperatives, and our consulting services include risk management, internal controls, governance, mergers and acquisitions, financing transactions, information technology systems, cybersecurity and profitability improvement. For more information, contact Ralph Jeswald, CPA, at rjeswald@dopkins. com or Andrew Reading, CPA, at areading@dopkins.com or visit www. dopkins.com. NED Magazine | Second Quarter 2019 • 49

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Yancey’s Fancy: Unique Products Bring a Wow! Factor to Cheese World BY CAROLINE K. REFF

rilled Bacon Cheeseburger. Wasabi. Ghost Pepper. Champagne. Strawberry Chardonnay. These are just a sampling of the unique and interesting flavors of handcrafted cheddar cheese produced by Yancey’s Fancy that gives customers what CEO Brian Bailey describes as a certain “Wow! factor.” “We make cheeses with very big flavors, so people who buy our products say, ‘Wow! That’s spicy,’ ‘Wow! That’s creamy!’ ‘Wow! That has some heat!’” said Bailey. “Our cheeses have intense flavors that are different from pretty much anything else out there. Once you take a bite, there’s no questions what you’ve tasted. Ours are the best possible marriage of cheese and other exciting flavors.” Bailey should know. He’s not only the CEO, he actually holds the title of cheesemaker, something he’s proud of, as it has taken him on an interesting journey over the past four decades. Educated as an environmental biologist, Bailey began working for Swiss Valley Farms in the late 1970s as an environmental coordinator but soon was offered the chance to project manage that company’s Swiss cheese division. With the determination to learn everything he could about cheese, he took charge of the largest Swiss cheese operation in the U.S. at the age of 26. “Cheese making is the most fun you can have,” he said, noting 50 • Northeast Dairy Foods Association, Inc.

that his passion for all things cheese gave him the opportunity to spend a summer working with a French cheesemeister, learn at an award-winning dairy cooperative in Finland and also spend time absorbing the craft of cheese making in Holland, Sweden, Denmark and Germany. What is today Yancey’s Fancy has European roots, as well. In the 1920s, Bavarian immigrant Leo Kutter began making specialty cheeses, particularly Limburger, in Cowlesville, New York, until World War II broke out and the scarcity of milk made it too difficult for him to continue. After the war, however, Kutter was back in business, building a new factory in Corfu, New York, where he made Swiss, brick, cheddar and Limburger cheese. His sons, Richard and Tony, worked alongside of him, eventually taking over the business in the early 1960s. In 1995, Bailey bought into the business with the Kutters, serving as president of Kutter’s Cheese. The popularity of Kutter’s products caught the attention of John Yancey, whose family owned the Original Heluva Good Cheese Company. When the Kutter sons retired in the late 1990s, Bailey, Yancey and Mike Wimble joined forces to purchase the Kutter business and opened Yancey’s Fancy. That company, which has been acquired by D&Y Cheeses of Philadelphia, has since grown into a business that offers approximately 50 varieties of cheese and other products. Bailey was named CEO in 2018, and today the company sells

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Yancey’s cheeses and other products at its “old-time cheese factory” outlet store in Corfu, online across the nation and even to some international customers in places like Central and South America, Taiwan and China. The cheeses have won numerous awards from the Cheese Makers Association, the American Cheese Society and the New York State Fair, particularly its Chastinet, which was named Grand Champion in 2016. Bailey believes the potential for cheese is great in the U.S., as it is still less popular than in most of the world, particularly Europe where he said, “Cheese is a part of life.” He sees Americans becoming “more adventurous eaters,” which fits in nicely with the “Wow!” flavors that Yancey’s offers. “Cheese brings something to the daily diet that is filling, pleasing and just yummy,” Bailey said. “Many of our customers will come in and ask, ‘What else is new here?’” noting that the company tries to introduce three of four new flavor offerings annually to keep up with demand. The options are endless, and Yancey’s Fancy is determined to keep tempting the taste buds of cheese lovers everywhere. “We’re always pushing out something new, some-

thing that will continue to give people who buy our products more options, as well as fun and enjoyment in what they are eating,” he said. “We don’t aim to be good; good is just part of the trip. The end game is to be great — to be a great place for our 155 employees to work, to be great citizens and neighbors, and, of course, to make absolutely great cheese!”

WWW.RICHDAIRY.COM NED Magazine | Second Quarter 2019 • 51

Battenkill Valley Creamery: A Local Business With NYS Award-Winning Milk BY CAROLINE K. REFF

attenkill Valley Creamery in Salem, New York, has won Cornell University’s award for “highest quality milk in New York State” twice, in 2010 and 2016, making it the only on-farm processing plant that’s ever achieved this honor. Quality and freshness have been a part of this family’s operation for over 100 years when Seth McEachron’s great-grandfather started milking cows in the Battenkill Valley region of Upstate New York. By the 1940s, McEachron’s grandfather moved the farm to its present location in Salem with just 12 cows, and the reputation for quality began to grow, as did the herd, which now numbers 52 • Northeast Dairy Foods Association, Inc.

approximately 500 Holsteins, Jerseys and Holstein-Jersey crossbreed cows. Today, Battenkill Valley Creamery is run by McEachron and his parents, Donald and Tracy, at three locations — two farms and a creamery — that continue to attract customers looking for locally produced, fresh tasting milk and dairy products without pesticides or artificial growth hormones. McEachron grew up on the farm and has worked there for most of his life. His father, however, encouraged him to go away to college, study business and see what life was like off of the farm before committing to the family business. After graduating in 2004 from Skidmore College, McEachron worked for Farm

Credit for a couple of years, but he knew the farm was where he belonged. In 2003, at a time when dairy farms were struggling, he and his parents began tossing around the idea of bottling their own milk on site. For the next few years, they visited other milk bottling facilities, ran analysis on dairy marketing and had long family discussions before finally deciding to take the leap into bottling. In 2007, they renovated the farm’s existing machine shed into a creamery, and, on Feb. 15, 2008, Battenkill Valley Creamery entered the milk bottling business — taking milk from cow to bottle in fewer than eight hours. Along the way, they found other niche markets for their products. In 2009, the

MemberProfile family opened an ice cream parlor at the creamery after realizing that people might not drive much of a distance just for a bottle of milk, but they would make the trip for a delicious ice cream cone. They were right. From vanilla and chocolate to peanut butter cup and rum raisin, Battenkill’s homemade, super premium ice cream not only draws people from the area but has been known to attract those from as far as two hours away. Patrons were eager for locally made, fresh-fromthe-farm products, and soon the creamery was also offering items from other local businesses like granola, grass-fed beef, maple syrup, a variety of cheeses, beef jerky, free-range eggs, peanut butter, fresh produce and even handmade soap. “We’re located in a small rural town, but people started coming out looking for local products,” said McEachron. “That’s the kind of business we set out to be, and that’s the business we’ve become.” In 2015, the family purchased a second farm nearby after reaching a point where the demand for milk and the growth of the creamery outgrew what the original farm could produce. Today, they milk approximately 800 cows combined on the two farms and have 30 employees working at the three locations. “We are continuing to grow at a steady pace,” said McEachron, noting that Battenkill is looking to add another barn and robot to keep up with the demand for its award-winning milk. That milk can now be delivered directly to customers’ doors, too, as Battenkill began home delivery in 2010. While McEachron said that home delivery is not a huge part of the business, it still accounts for two routes with approximately 300 customers who appreciate the freshness and convenience of farm-to-door delivery. Another piece of the business involves delivery to local supermarkets, like Hannafords and Price Chopper, in and around the Capital Region of New York.

A “good piece” of business also comes from a slightly longer delivery route — approximately 3 ½ hours away — to numerous coffee shops and restaurants in New York City. While most of Battenkill’s milk is put into plastic containers, about 15 percent still heads to the dairy case in glass bottles. According to McEachron, a segment of customers truly appreciates the positive environmental impact of glass. “And, a lot of people think ice cold milk just tastes better coming from a glass bottle,” he explained.

McEachron is proud of his family’s achievements — from the way the farms are run to the quality of the products Battenkill Valley Creamery produces. “We’ve fought through many challenges and some difficult years, but we’ve always found ways to make it work,” he said. “I love what we do here — keeping the barns clean and the cows healthy, taking care of the land, processing the milk, greeting people at the creamery — all of it. We’re proud to provide quality milk from start to finish.” NED Magazine | Second Quarter 2019 • 53

HumanResources

Managing Baby Boomer Retirement Effectively and Creatively Benefits All BY RYAN OSTERHOUT

aby Boomers have been the driving force in the labor market since the mid 1960s. The oldest Boomers are in their mid-70s and the youngest are around 55 years old. It should come as no surprise that the majority of the largest generation will be retired or retiring in the next five years. According to a survey conducted by Willis Towers Watson in 2018, in the next five years, almost 75 percent of the companies surveyed expect to face significant or moderate challenges from late retirements. A sizable share of the companies also expressed concern about early retirements, including the cost of older workers and the challenge of replacing their knowledge and skills that they will take with them when they retire. In the manufacturing industry particularly, the loss of boomers will hit particularly hard. In the survey, 80 percent of manufacturers were concerned about the loss of talent. Most of them reported that a loss of specific company knowledge would be the toughest thing to replace as would finding workers with similar knowledge and skills. The challenge with replacing Boomers is a complicated 54 • Northeast Dairy Foods Association, Inc.

one. How does a company deal with the loss of knowledge of employees who came up in the age of “company loyalty” and generous pensions — and may have worked for a company for 20 years or more? Unfortunately, many companies’ strategies with Boomers have been focused on bringing people into new jobs rather than easing them out of old ones. Larger companies have entire departments devoted to the interviewing and courting of candidates or outsource that process all together. They are allocating all sorts of resources to attract new candidates but are giving less thought to what to do with employees who are near retirement. Often this strategy can backfire, creating a rift between the employer and the long-time employee and causing the Boomer to walk out the door without looking back. When thoughts of Boomer retirements were first being considered, many assumed that there would be a mass exodus over the course of a relatively short period of time. However, over the last several years it has become increasingly apparent that Baby Boomers are often eager to keep working, either because they need to for financial reasons, because they enjoy working or because they understand their duty to pass on their

HumanResources expertise before exiting. Part of the problem is that workers or shorter hours is expected to rise sharply, with 40 percent of and employers are confused about what retirement means companies offering part-time work or flexible hours by 2020, anymore. Pensions are a thing of the past for the most part, and which would be double the current rate. Job sharing is another even companies that have pensions are seeing the funds dry up great option where two people split the responsibilities of one as more and more Boomers retire. That, coupled with the fact full-time role. It’s is a great option because it means the Boomers that many pension funds never recovered from the Recession, don’t have to give up their current role in order to work partare prompting Boomers and employers to get creative with time. They are able to continue to work at a job that they love what it means to be retired. and thrive, while also decreasing financial stress and staying Here are some strategies that companies can utilize to help engaged in the workforce. engage Boomers, utilize their expertise and ease them into reNo one can debate the importance of the Baby Boomer tirement, while also holding on to their invaluable knowledge: generation to the workforce. As they move toward retirement, Value Their Knowledge and Experience. Keep Boomers it is essential for companies in all industries to work hard to engaged by utilizing them for complex projects where their facilitate the transition into retirement or semi-retirement for expertise is most valuable. Transfer duties that take up time to these Boomers and their employers alike. The knowledge that other, less skilled employees. This allows Boomers to focus they possess is irreplaceable, and whether they are passing on what they do best and enjoy the most, while also allowing their knowledge on to a junior employee, or in some cases an their employers to benefit from their expertise and knowledge. automated one, it is a process that must be managed effectively Focus on Mentoring Opportunities. Baby Boomers have in order for all parties to benefit to the greatest extent. a wealth of experience and knowledge about best practices and company history due to their long careers with the same Ryan Osterhout is COO and managing partner of KCO Resource company. Boomers have long occupied high executive and Management. He is also a member of the board of directors management level roles and have assumed big responsibilities and treasurer of the Northeast Dairy Suppliers Association, Inc. within their respective companies. These companies must prepare Millennials and members of Gen X and Z to assume responsibility in the workforce when Boomers are gone. Mentoring is something that can be easily overlooked in a busy work environment, but the knowledge that the Boomers have is invaluable to an organization. Setting up structured mentoring programs is a great way to bridge the generation gap while also building multi-generational collaboration within a company. It can be a great way to improve the culture, allowing Boomers to be empowered by the knowledge that they can share while letting Millennials and Gen X and Z understand the company history and long-standing best practices in addition to the essential knowledge that they are gaining. Offer Part-Time Employment/Job Sharing. Part-time employment and/or job t Agri-Mark, we are continually investing in the Northeast Dairy sharing has become increasingly popular at industry because this is our home. We have finished the $21 milmany companies. This is a great option for lion investment in a new dryer at our butter/powder/condensing plant Boomers who want to reduce their workload in West Springfield, Mass., shown above, for the 950 dairy farm families that own the co-operative. This project boosts the plant’s capacity by but still want a paycheck. According to The roughly 33% and will allow us to better serve our customers. Please conWashington Post, the share of employers oftact us at 978-552-5500 for more information on how we can serve you! fering older workers partial-year employment

NED Magazine | Second Quarter 2019 • 55

Safety

PROCESS SAFETY MANAGEMENT FOR AMMONIA REFRIGERATION

10 Ways to Ensure Safety of Your Personnel and Your Products

BY JASON WOODRUFF, CIH, CSP

perations that process dairy products need to keep them cold for a significant portion of their processing. This is primarily done through ammonia refrigeration or through glycol systems that are cooled with ammonia refrigeration. Any facility that utilizes more than 10,000 pounds of anhydrous ammonia onsite is required to maintain its refrigeration system per the Occupational Safety and Health Administration Process Safety Management standard. Facilities that utilize ammonia in smaller systems can also benefit from complying with many of these requirements, which will reduce downtime, keep employees safe and prevent contamination of products with ammonia, glycol or other industrial chemicals. 56 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

PROCESS SAFETY MANAGEMENT (29 CFR 1910.119) Process safety management includes multiple components. All facilities must maintain a management program to address the following:

1. Employee Participation/Training Employees working near ammonia refrigeration equipment must be trained on the facility emergency action plan, alarms and standard operating procedures associated with the system. In addition, ammonia system maintenance personnel should be involved with process hazard analyses, compliance audits and standard operating procedure development.

Safety

2. Process Safety Information A written PSM program must include piping and instrumentation diagrams, safety data sheets for ammonia, block flow diagrams, process chemistry and maximum inventories.

3. Mechanical Integrity, Inspection and Testing A PSM-regulated facility must have a robust inspection process and, in some cases, non-destructive testing following inspections. Certain inspections are due daily, weekly, monthly, semi-annually, annually and every five years.

4. Process Hazard Analysis A process hazard analysis is a method to determine all the ways that a refrigeration system could fail (either minor or catastrophically), the effects of the failure and methods to prevent this failure or mitigate the failure of the system. This is probably the most difficult component of a PSM program, but once completed it will allow the user to better operate the system and to holistically understand the controls of the system. A PHA is required by OSHA prior to operation of the ammonia system, with any system changes and updated/ revalidated at least every five years.

5. Management of Change/Pre-Start-Up Safety Reviews Whenever a system operator changes the ammonia system by installing new equipment, making changes to the system to increase capacity or altering how the system operates, a comprehensive MOC process must be implemented. This will ensure the system will still operate correctly and safely, while updating standard operating procedures and other PSM components. A documented PSSR is required after an MOC to complete the review and ensure the system is able to be started and operate safely.

6. Standard Operating Procedures All ammonia systems require written SOPs so that everyone operates them the same way and understands the appropriate and safe methods for start-up, shutdown, emergency operation, maintenance tasks and routine inspection tasks.

7. Hot Work Permit Anhydrous ammonia is flammable, as well as very toxic. Very specific procedures must be followed to prevent fire

and explosions in PSM covered areas. Written hot work permits must be completed for any hot work on or around ammonia systems.

8. Contractor Management In addition to facility employees being affected by the ammonia system, contractors (both working on or near the system) must be aware of ammonia safety, SOPs, MOC/ PSSR, emergency action plans, hot work requirements and safely working near the system. All contractors working in or around the ammonia system at the facility must be screened and qualified to work in these areas before being allow to conduct any work, and this should typically be updated annually.

9. Emergency Planning and Response/ Incident Investigation PSM covered facilities must include potential ammonia system emergencies as a part of their overall emergency action plans. Emergency response can be conducted by internal personnel or external emergency response services trained to at least the HazMat technician level. Any ammonia-related accident and/or releases must be thoroughly investigated to identify root cause and appropriate corrective actions.

10. Compliance Audits OSHA requires a comprehensive PSM compliance audit at least every three years to ensure that a facility is implementing the components of the PSM program/requirements as noted above. A PSM program can be very complicated with a large number of management tasks. Once implemented, sustainment of the program is very important to continued safe operation of the ammonia system. Management of these systems can be technical in nature and also may require significant coordination of internal and/or external resources. However, with a robust and deliberate plan, this program is not insurmountable. Jason Woodruff, CIH, CSP, is a senior consultant with Partners Environmental Consulting (formerly Greystone) in Syracuse, New York. He is a consultant to Northeast Dairy Foods Association, Inc., members and can be contacted at jwoodruff@partnersenv. com or 315-212-4053. NED Magazine | Second Quarter 2019 â&#x20AC;˘ 57

Legal

Questions Remain on Bill to Establish Premium on Milk Products Carrying NH Logo BY WENDY YOVIENE

ouse Bill 476 was introduced in the New Hampshire Legislature in January to replace the Milk Producer Emergency Relief Fund with a Dairy Premium Fund. The House record for the New Hampshire Legislature dated Feb. 22, 2019, explains the bill is offered as “a New Hampshire solution to aid and sustain dairy farmers by using a unique marketing approach.” The House record goes on to explain that the bill would utilize “no public monies to market the milk that is produced by New Hampshire dairy farmers.” In order to be eligible to participate, dairy farmers would 58 • Northeast Dairy Foods Association, Inc.

be required to ship milk in New Hampshire and contribute 10 cents per 100 pounds of milk to Granite State Dairy Promotion, an organization that is qualified to receive a portion of a dairy farmer’s federal promotion program obligation to promote New Hampshire milk. Premiums would be charged by processors that use a “New Hampshire’s Own” label, if at least 85% of the raw milk is from New Hampshire or a “Supporting NH Dairy Farms” label if 100% of the raw milk is from New England (hereafter, the New Hampshire logos). The premiums collected would then be remitted to the Dairy Premium Fund. Eighty-six percent of the Dairy Premium

Legal

Fund would be distributed to participating farmers, with the remainder available to promote the program. The legislation does not specify the premium processors using the New Hampshire logos must collect, leaving the determination to the commissioner of the New Hampshire Department of Agriculture, Markets and Food and approval by a new board to oversee the Dairy Premium Fund. However, recently a 50 cent per gallon premium was mentioned as part of an explanation of how the program would work. The processor would be required to track and segregate its raw milk receipts by origin in order to determine eligibility to use the New Hampshire’s Own logo or the Supporting NH Dairy Farms logo. The processor would then be required to collect the premium from net sales of milk carrying one of the logos. Although the House record, as well as other descriptions of the bill, indicate the focus is on New Hampshire dairy farmers, the eligibility requirement for receiving premiums collected by processors is not clearly limited to New Hampshire dairy farmers. “Milk producer” is defined without geographic restrictions, and the other eligibility requirements, including shipping milk in New Hampshire and designating 10 cents to the New Hampshire Granite Promotion, are not geographically restricted to farms located in New Hampshire, unless the New Hampshire Granite Promotion cannot or does not accept designations from out-of-state farmers. However, at a recent hearing before the Senate Energy and Natural Resources Committee, the bill was summarized as distributing premiums to New Hampshire dairy farmers with no mention of out-ofstate dairy farmers also supplying milk to plants using the special labels. Additionally, although cooperatives generally are treated as the producer for collecting milk revenue on sales of member milk, the bill defines “milk producer” as an owner of the animal producing the milk that is sold, which suggests that New Hampshire Dairy Premium Fund distri-

butions might bypass the cooperative for direct distribution to the dairy farmers. This proposal raises practical concerns for processors. It is not clear whether the premium requirement will be enforced if product carrying the logo is sold outside of New Hampshire. If enforced, will out-of-state distributors and retailers be able to argue that New Hampshire is projecting its pricing beyond its borders in violation of the negative Commerce Clause? That answer and whether there is differential treatment between New Hampshire and out-of-state farmers will depend on how the details shake out. The bill would require processors to collect the premium at wholesale, but there does not appear to be a mandate that New Hampshire logo milk includes a required mark-up at retail. With respect to retail pricing there is only a maximum mark-up on New Hampshire logo milk equal to the price of the same milk without the New Hampshire logo plus the Commission-established premium. If the retailer is only able to establish or collect a mark-up that is less than the full premium, why would the retailer be willing to buy New Hampshire logo milk? The economic risk could be too great. These circumstances could make it financially untenable for the processors to use the New Hampshire logo. New Hampshire would do well to minimize the burden on processors in a way that allows it to use the New Hampshire logo but collect and remit amounts retailers can actually pass through. Wendy Yoviene is an attorney at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, a law firm and lobbying group headquartered in Tennessee with offices in Washington, D.C., the mid-Atlantic and throughout the southeastern U.S. Yoviene specializes in food and agriculture, and handles state and federal regulatory, litigation and transactional matters for dairy industry clients across the U.S. NED Magazine | Second Quarter 2019 • 59

Leadership

Turning Cream Into Butter: Leadership Dictates Business Culture, Success BY CHRISTOPHER MOMINEY

ike the three legs of a stool, it is culture, mindset and leadership that all work in tandem to bring about organizational transformation. But how does a leader even begin such an audacious task? How does one begin to change the habits, attitudes, beliefs and expectations of an organization to effect positive and long-lasting change? It all begins with culture. The best and simplest definition of culture: “It’s the way we do things 60 • Northeast Dairy Foods Association, Inc.

around here.” It’s the way we talk, the way we behave, the way we dress, the way we celebrate; the way we do things around here. The culture of the organization is the air that we collectively breathe, the overall atmosphere that we live in, the shared values that encourage us to behave in a certain way. So if culture is the organizational air we breathe, then how important is it for a leader to impact the culture of said organization? Some people who study this aspect of sociology and organizational behav-

ior have called culture the shadow of the leader. It’s what the leader cascades across the organization. It’s the leader’s influence over the organization, the leader’s shadow and what is inside of that shadow that hovers over the organization and creates the environment of that organization, and more importantly, impacts results. Consider this: As I was preparing for my educational leadership certification from the University of Rochester, one of my instructors threw this anecdote out to us. He said, “Folks, I guarantee you,

Leadership that as you advance in your career you will notice that, in most cases, a school takes on the personality of its principal within two years of his or her arrival.” I say the same is true in all organizations and other companies, including those in the dairy industry. So, think about the leaders in your organizations. My guess is that if they are gregarious, hospitable, high energy and innovative, then the collective air that you breathe in your organization looks a lot like that. If your leader is reserved, quiet, more strategic and a high-level thinker, my guess is that your place of work is more reserved, and the collective air that you breathe in that place is more subdued. Those that study organizational culture and leadership development call this the tone at the top. And it’s that tone at the top that trickles down over time to help — and I dare say even directly influence — and define the culture of the organization, no matter the mission. Just ask the now former-CEO of Uber, Travis Kalanick. Why is Kalanick unemployed today? A culture of bulldozing through the marketplace without regard for people, talent management or HR polices. A culture of aggressive behavior, an attitude of arrogance, a belief that “we are untouchable” and a culture that said, “The way we do things around here is to hire strippers at corporate functions and to have pushup contests and fist bumps as a regular part of the work day.” Eric Holder, the former attorney general under President Barack Obama, conducted the investigation, and 75 percent of his study was on the culture of the organization.

Culture is influenced by many factors, but by far the largest influence is the mindset of the leader because he or she is responsible for setting the tone at the top. Innovative leadership leads to an innovative culture. Someone who embraces option-thinking creates a culture of creativity and new ideas. Conversely someone who is assertive, aggressive and authoritarian, while perhaps garnering some level of respect, risks creating a culture of fear and passive behavior.

The two frogs kept swimming around to keep from drowning, and every once in a while they would try to climb out, but this was becoming very tiring. One frog kept saying, “This is useless, we should just give up,” but the other frog just ignored the comment and kept swimming. Finally, the pessimistic frog gave up and drowned. The other frog was sad at the loss of his friend, but he wasn’t going to give up. He kept swimming and swimming, and, finally, the cream turned into butter, and the frog simply climbed out. It’s all about mindset! Leaders and leadership teams that possess a certain mindset act a certain way and embrace a culture that promotes behaviors like creativity, a belief in positivity and expectations of excellence. That becomes “the way we do things around here.” And when the culture, or the collective organizational air we breathe, is transformational, cream turns into butter, and we are able to do great things.

Culture is influenced by many factors, but by far the largest influence is the mindset of the leader because he or she is responsible for setting the tone at the top. Innovative leadership leads to an innovative culture. — CHRISTOPHER MOMINEY We’ve all known some very intelligent people who knew the concepts of their craft very well, but they seemed to lack a certain mindset. That is, their habits, their attitudes, their beliefs and their expectations were sometimes incongruent with their level of intelligence. Consider this story: One day, two frogs were enjoying the day in the barn when they accidently fell into the farmer’s bucket of cream, and they couldn’t get out.

Christopher Mominey is the CEO of the West Chester University Foundation in Pennsylvania. He is a senior education and nonprofit executive with over two decades of experience leading transformational change for organizations seeking growth, innovation and operational excellence. NED Magazine | Second Quarter 2019 • 61

Member News

PLAN TO ATTEND THE NORTHEAST DAIRY CONVENTION Join us for our annual convention put on by the Northeast Dairy Foods Association, Inc., and the Pennsylvania Association of Milk Dealers on Sept. 11 through 13 in Cooperstown, New York. This event, held at the historic Otesaga Hotel, brings together processors, manufacturers, distributors, executives, other dairy experts and guests for an outstanding mix of business sessions, networking and fun, including a tour of the Baseball Hall of Fame!

Registration materials will be available beginning July 1 We have reserved a block of hotel rooms for our members at the Otesaga Hotel, as well as neighboring hotels. Please call 1-800-348-6222 as soon as possible to secure your room. You will find the group discount code on our website, www.neastda.org.

Become a Sponsor There are still some sponsorship opportunities available. Don’t miss the chance to showcase your business with signage, company recognition during the event and acknowledgement in our convention mailings. For sponsor information, contact Leanne Ziemba at 315-452-MILK (6455).

THANK YOU TO OUR CURRENT 2019 SPONSORS:

62 • Northeast Dairy Foods Association, Inc.

Beneﬁts of Association Membership EXECUTIVE DIRECTOR AND INDUSTRY CONSULTANT SUPPORT

NDFA

NDSA

Legislative Representation Through Executive Lobbying and Networking Safety and Environmental Information Economic Analysis and Forecasting Continuing Education and Certification Opportunities Industry Spokesperson Emergency Preparedness

PROFESSIONAL COST-SAVING PROGRAMS Dedicated Industry-Specialized Insurance Programs Employee Benefits, Including 401(k) Retirement Program Energy Supply and Consulting Services

NETWORKING AND MEETING EVENTS Annual Northeast Dairy Convention Contact Booth at the Annual Convention Annual Dairy Industry Clambake Hospitality and Sponsorship Opportunities Industry Plant Tours Annual Charity Golf Outing Fundraiser

COMMUNICATIONS AND PUBLIC RELATIONS Quarterly copy of Northeast Dairy Magazine Direct Customer Advertising Opportunities Industry Scholarship Program Membership Directory with Key Contacts in the Dairy Industry Digital Buyers Guide (launching in 2019)

ADVOCACY An association represents your interests before your government leaders, industry and business community. If your business/industry faces major threats or needs support, our association is right there on the front line fighting for you.

NETWORKING Association events, meetings and member directories make networking a reality for you and your peers. This is the one advantage many view as the most important reason to join! NED Magazine | Second Quarter 2019 • 63

Member News

Member & Industry News Alfred State College in New York will launch the first four-year agriculture program in the school’s history. Classes for the new Bachelor of Technology degree in agricultural entrepreneurship will begin this fall. The new program is designed to provide tomorrow’s agricultural entrepreneurs with the skills to make local agriculture economically viable through the application of traditional production practices and the development of value-added products. Graduates of this program will be qualified for a variety of jobs, including manager or owner of a commercial farm, agricultural credit officer, warehouse manager for farm chemicals, feed, seed, fertilizers and more. In May, Byrne Dairy kicked off the Mighty Fine Challenge for the second year in a row. The challenge to the general and food service managers is to increase gross profit and sales growth at their store locations by striving for “consistency, excellent customer service and clean stores.” Numerous prizes will 64 • Northeast Dairy Foods Association, Inc.

be awarded, including vacations and two Jeep Compass vehicles. When Warwick Public School District in Rhode Island announced that it would deny students with unpaid lunch accounts a hot lunch and offer the children only sunflower seed butter and jelly sandwiches, Chobani stepped in to pay the $77,000 student debt. On Twitter, Chobani founder and CEO Hamdi Ulukaya said, “As parents, news of Warwick Public Schools breaks my heart. Every child should have access to natural, nutritious & delicious food, so Chobani is going our small part to help pay this debt. Business must do its part… our responsibility as members of community. Who will join us?” Sparked by Chobani’s call to action, over $56,000 was almost immediately raised through a GoFundMe account to help provide lunches to the school children. In addition, Chobani donated yogurt to the Warwick community. Chr. Hansen, the world’s leading producer of coagulation solutions, recently

announced the launch of its CHY-MAX Supreme, the most precise and innovative coagulant with superior functionality for modern cheesemakers. This is the third generation of the CHY-MAX fermentation produced chymosin range of coagulants and a result of five years of intensive research. It helps cheesemakers deliver a greater commercial return by offering higher yield, faster and more precise options and superior functionality. “We understand the challenges of modern cheese makers who are under pressure to generate maximum value, increase flexibility and meet customer demand or better functionality and convenient cheese formats,” said Soeren Herskind, vice president of the commercial division. “To accommodate these needs, we are delighted to bring our newest innovation to the market.” Dean Foods recently acquired Steve’s Ice Cream for a reported $1 million and is in the process of relaunching the brand in the artisanal space. Steve’s Ice Cream was known for first making

Member News

super-premium ice cream popular in the 1970s. However, it declared bankruptcy in 2017. Dean Foods intends to target Millennials with unique flavors like spearmint chocolate brownie, Sicilian chocolate cannoli and cold-brewed cinnamon coffee aimed at today’s adventurous eaters. New packaging will also be a part of the rebrand with bold colors, patterns and a distinctive logo. Flavorchem Corporation, an established leader in the manufacturing of flavor and color solutions, recently unveiled a new logo and refreshed brand identity. The refresh symbolizes the company’s commitment to innovation, clean-processing and an evolution to better serve the changing needs of its local and global clients. Certain key elements of the original logo were captured into the new brand identity as a tribute to the company’s history and legacy. Flavorchem’s new logo shows a strong green color palette representing its forward-thinking, global emphasis on natural ingredients and sustainability. “This brand evolution embraces the trust and familiarity of our existing relationships while adapting to the ever-changing marketplace,” said President Ken Malinowski. As part of its 125th anniversary celebration, Hershey’s Ice Cream wanted to do its part to help end childhood hunger. In a national partnership with No Kid Hungry, Hershey’s Ice Cream has pledged to donated enough money to provide up to 1.25 million meals for kids in need. Every time a parlor owner purchases a 3-gallon tub of four desig-

nated flavors, Hershey’s Ice Cream will donate $1 to No Kid Hungry. Featured flavors for spring and summer are Moose Tracks, Magical Unicorn and two new flavors for 2019 — LlamaLicious and Lil’ Blue Panda. Donated funds will support a myriad programs that give kids access to free meals in school and throughout the summer. For more information, visit www.hersheyicecream. com/nokidhungry.

sales and marketing activities while ensuring strategic sales growth aligned with organizational goals. “In his short tenure with Schneider, Mike and his team have contributed to unprecedented sales growth,” said Bob Brotzki, president and owner. “We look to Mike and his team to lead our efforts as Schneider continues to deliver innovative, scalable packaging and palletizing solutions to our customers.”

Perry’s Ice Cream, Inc., is launching its first oat-based, dairy-free frozen dessert: Perry’s Oats Cream, which is available through retail and online. The new line features seven decadent flavors: apple strudel, blueberry pancake, coconut caramel, oat latte, peanut butter coffee cake, peanut butter & cookies and snickerdoodle. These flavors are vegan, non-diary, lactose-free and a good source of fiber made from whole grains. “As a market leader with extensive dairy expertise, we recognize a growing need to bring to market a great tasting plant-based frozen dessert,” said Robert Denning, president and CEO. “Consumers look to their trusted ice cream brands to create quality dairy-free options. We certainly believe our team of talented research and development experts hit it out of the park with a full line of these amazing tasting oat-based, dairy-free products.”

Tremcar is pleased to announce the nomination of Melanie Defresne as director of marketing and communications for Tremcar, Inc., and all its subsidiaries: Tremcar USA, Boston Steel, Tremcar West and Tremcar Industries. Defresne joined Tremcar in 2014 to assist the sales team in representing the company across North American and further reinforcing Tremcar’s trade names. Her accomplishments over the last four years have earned her the new position.

Mike Brewster was promoted to vice president of sales at Schneider Packaging Equipment. Brewster joined Schneider in 2016 as director of sales and marketing, where he was responsible for leading and managing

In March, the Upstate Niagara Cooperative, Inc., signed a purchase agreement for the former Alpina Foods yogurt plant, according to an announcement by CEO Larry Webster of Upstate Niagara. The Alpina plant opened in 2011, underwent a $1.1 million expansion in 2016 and employed up to 35 people when it closed in January. Upstate Niagara purchased the Batavia, New York, location, in part, for its available space and easy access to milk. The cooperative has a significant history of growth and expansion and was recently honored as the area chamber of commerce’s Agricultural Business of the Year. NED Magazine | Second Quarter 2019 • 65

Member News

NEW MEMBERS

he following new members recently joined the Northeast Dairy Suppliers Association, Inc. For more information about the benefits and services available in both the Northeast Dairy Suppliers Association, Inc., and the Northeast Dairy Foods Association, Inc., contact Alex Walsh, director of membership and communication, at 315-452-MILK (6455) or aw@nedairyfoods.org.

BRONDI & ASSOCIATES 624 Route 208 Franklin Lakes, NJ 07417 Phone: 551-579-0054 Bertrand Brondi, president bbrondi@aol.com

KOCH MEMBRANE SYSTEMS, INC. 850 Main St. Wilmington, MA 01887 Phone: 978-694-7294 Darlene Bulger, technology administrative assistant dbulger@kochmembrane.com

MARATHON ENERGY 100 Elwood J. David Rd. Liverpool, NY 13212 Phone: 315-226-4477 Megan Smith Gill, chief marketing officer megan@mecny.com

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8785 AgPark Dr. N. Batavia, NY 14020 Phone: 585-344-4102 Fax: 585-344-4109 Bill Cox, president and CEO bill.cox@marktecprods.com

PERTEN INSTRUMENTS 3200 Robbins Rd. Springfield, IL 62704 Phone: 781-603-9603 Kevin Coltey, eastern regional manager kevinc@deltainstruments.com

QCS PURCHASING, LLC 901 Warrenville Rd. Suite 405 Lisle, IL 60532 Phone: 630-717-1110 Fax: 630-717-1126 Laura Moehs Stringer, members services manager laura@qcspurchasing.com

Member News

In Memoriam

t is with great sadness that the Northeast Dairy Foods Association announces the passing of one of its former board members, Terra J. Jackson, 45, of Kirkville, New York, who passed away in April after battling both multiple sclerosis and cancer. She served the dairy industry well for 19 years, having most recently worked as the milk procurement manager for Chobani and prior to that for Dairylea Dairy Marketing Services. “We are saddened to hear of the loss of our friend and colleague, and, on behalf of our membership, we extend our gratitude and fond memories of her commitment to the Northeast Dairy Foods Association during her tenure on our board of directors,” said Executive Vice President Bruce W. Krupke. Terra was survived by her life partner, Charles Spindler; her children, Zackary Jackson, Emily Besner and Gretchen Spindler; her parents, Cindi and Edward Pfrang; siblings, Gene Krupa, Steve Hart, Jennifer Haines, Pamela Charland, Lonnie Hart and Jeriann Stockholm; and her special aunt and uncle, Patty and Dave Wellner. Donations may be made in her name to St. Jude’s Research Hospital.

Jefferson County, NY We Know The Dairy Business! Northern NY is Home to Dairy Processing Companies Great Lakes Cheese, HP Hood and Kraft Heinz There Are 275,800 Dairy Cows Producing 5.9 billion Pounds of Milk Strong Network of Businesses and Agencies to Support the Dairy Industry We Have Shovel Ready Sites and Prime Location for Access to Eastern Seaboard Markets Come grow with us in Jefferson County — locate your business here! Jefferson County Economic Development Jay Matteson, Ag Coordinator (315) 782-5865 800 Starbuck Ave, Watertown NY 13601 | growwithjeffersoncounty.com NED Magazine | Second Quarter 2019 • 67

Member News NDFA WELCOMES ADP AS ENDORSED SERVICE PROVIDER BY ALEX WALSH, DIRECTOR OF MEMBERSHIP AND COMMUNICATIONS

he Northeast Dairy Foods Association has a new partner to assist our membership with payroll, compliance and human resources solutions. Automatic Data Processing, Inc., commonly known as ADP, has been endorsed by the board of directors. With over 60 years as a payroll, compliance and HR leader, ADP has helped thousands of businesses better manage their cash, people and compliance risk. Whether its related to payroll and tax filing, payments, time and attendance or other HR-related issues, ADP has the solutions. In addition, ADP can help with employer tax credit assistance and the creation of employee handbooks. ADP helps companies manage their cashflow with payment solutions like direct deposit and paycards, as well as mobile solutions that enable the ability to run payroll from anywhere, anytime. ADP also helps minimize compliance challenges by staying on top of changing payroll tax and labor regulations, and can help manage multiple locations, states and local taxes from one portal. One of the best reasons to use ADP is its ability to reduce administrative burdens and better manage employees

with time and attendance, hiring and human resource solutions, which, in turn, helps maximize your time spent on staff productivity and re-focus energy on building your business. Solutions are designed to help grow your business with access to valuable tools and resources from the leading thinkers in payroll and HR, as well as gain access to industry experts who will support your business’s payroll, compliance and HR needs.

ADP joins our other endorsed service providers, which include: • Retirement planning through AXA Financial • Workers compensation through Brown & Brown Empire State • Safety and environmental consulting through Partners Environmental Consulting • Energy reduction consulting through Energy Partner Consultants These services have received the NDFA’s endorsement due to their capabilities, specialty services, commitment

to the association and the ability to work with any member, no matter the size or location. The association endorses service providers to take the burden off our members and their employees in order to save time and money. Each of the above mentioned service providers are members of the Northeast Dairy Suppliers Association, Inc. Members of the NDFA and the Northeast Dairy Suppliers Association are eligible to take advantage of all the endorsed services. ADP is extending special offers and discounts to our members depending on the types of services needed and the number of employees you have. You may still save money with preferred pricing on payroll, HR and payroll tax filing services based on the existing relationship with ADP. New customers may be eligible for a 30% discount on payroll services. If you’d like to learn more about what ADP can offer you, contact: Gina Vono, sales executive: Gina. Vono@adp.com or 315-591-6136 Taylor Sollars, associate district manager: Taylor.Sollars@adp.com or 315-383-5553 Frank Saez, national franchise director: Frank.Saez@adp.com or 609847-2347

AMAZON ADDS MORE DAIRY ITEMS TO PRIVATE LABEL

n February, Amazon premiered milk and dairy products under its private label. These include various lactose free milks, half & half, whipping cream and whipped topping. The products are in addition to its existing Happy Belly varieties of two dozen private label cheeses — ranging from cheddar and mozzarella to provolone and Swiss. Amazon’s latest

68 • Northeast Dairy Foods Association, Inc.

offerings are the first non-Whole Foods private label products and are available to AmazonFresh customers. With AmazonFresh, customers can combine grocery and other shopping into one experience ordering a wide range of items, including fruits, vegetables, meat, seafood, baked goods, beauty products, household goods and now dairy items. Customers can place an order in the

morning and have it delivered as early as that same evening, or order before going to bed and have the items on their doorstep in time for breakfast the next day. Amazon continues to expand its service into more major cities across the country as it attempts to leverage more e-commerce space and tap into the growing trend of home grocery delivery.

AssociationNews

ANTONACCI RECEIVES “DAIRY GOOD FRIEND” AWARD FROM NDFA

he Northeast Dairy Foods Association, Inc., presented New York State Sen. Robert E. Antonacci II with the “Dairy Good Friend” recognition award at the association’s board meeting on March 28, 2019, in Albany, New York. The “Dairy Good Friend” award recognizes legislators and government officials who support dairy processors, manufacturers and distributors. The NDFA publicly recognizes those who understand the challenging agri-business climate and tirelessly work to assist our members and promote dairy products in New York. The agriculture economy, and specifically the dairy industry, is a leading sector for

business and commerce in the Northeast, and New York ranks third nationally in milk production. Antonacci was elected in 2018 to the 50th State Senate District representing parts of New York state’s Onondaga and Cayuga counties. “Dairy processing and manufacturing is a massive, critical component of New York’s economy,” said Bruce W. Krupke, executive vice president of the NDFA. “There are more than 300 milk processing plants in New York, from small to large operations, making powdered milk, yogurt, cheese, ice cream and many other dairy products consumed by millions of people each year. We graciously recognize Senator Antonacci for his efforts to support our industry and continued success

in New York state. He has been an ally to the association and our members, and we truly appreciate the work the senator is doing at the state level.” “I am very honored the Northeast Dairy Foods Association presented me with this award,” said Antonacci. “I know the hard work being done by dairy processors and manufacturers in New York that employ thousands of people with several operations in Onondaga and Cayuga counties. Across the state, these companies purchase over 12 billion pounds of milk annually, from local dairy farmers every day. I will continue to work for them in Albany to represent their interests.” Antonacci is the first recipient of the NDFA’s “Dairy Good Friend” Award. NED Magazine | Second Quarter 2019 • 69

Endorsed Member Services Consider our endorsed services for members to improve your business operations and...

SAVE YOU MONEY! Contact our representatives for more information!

AXA Financial 401(K) Retirement Planning

Brown & Brown Empire State All Lines of insurance

Partners Environmental Consulting

Energy Partners Consultants

Anthony Stevens (315) 425-6307 Anthony.Stevens@axa-advisors.com

Steve Valentine (315) 263-3183 svalentine@partnersenv.com

70 â&#x20AC;˘ Northeast Dairy Foods Association, Inc.

Stephen Messina (315) 474-3374 x420 smessina@bbempirestate.com

Wendy Martin (518) 331-4627 wendym@epchq.com

nedairyfoods.org

/NEDairyFoods

InTheIndustry TRADE REPORT CRITICIZES EUROPE FOR WRONGLY TARGETING U.S. DAIRY EXPORT

n April, U.S. dairy officials lauded the U.S. Trade Representative’s Office for denouncing Europe’s anti-trade agenda against commonly named food products and pursuing avenues to preserve U.S. export access rights, according to the U.S. Dairy Export Council. The U.S. Special 301 Report issued by the USTR categorically rejects EU policies that seek to intentionally disadvantage U.S. suppliers in global markets by blocking their ability to use common names such as fontina, gorgonzola, asiago and feta cheeses. Europe’s actions infringe on the rights of U.S. producers and imposes unwarranted market barriers to U.S. goods. According to the report, “The EU pressures trading partners to prevent all producers, other than in certain EU regions, from using certain product names. This is despite the fact that these terms are the common names for products and produced in countries around the world.” “Europe has disadvantaged the U.S. dairy industry for too long by abusing geographical indications policies,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council.

“We face unfair barriers around the world because of Europe. USTR should be commended for recognizing the problem, and we look forward to working with them to rectify it.” Vilsack urged the USTR to prioritize securing binding commitments from the U.S.’s current trading partners to prevent future restrictions. The market access preservation commitments secured with Mexico as part of the U.S.-MexicoCanada Agreement provided a positive precedent to build upon, according to Vilsack. Europe sent $1.8 billion in dairy goods to the U.S. market in 2018 but only imported $145 million of U.S. products, even though the U.S. is a major supplier to the rest of the world. “Trade is supposed to be a two-way street,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “America’s struggling U.S. dairy producers deserve a lot better than the current one-way trade relationship with the EU whereby they sell us a billion dollars of cheese each year while erecting walls to our ability to compete head-to-head with them overseas.”

Hit it out of the park with Herbein Business Valua�on Merger and Acquisi�on Assistance Li�ga�on Support Cost Benchmarking Product Cos�ng Comparisons Raw Milk Analysis Dairy Industry Seminars Product Shrinkage Control Estate and Re�rement Planning Business Succession Planning Cost Segrega�on Federal Milk Order Consul�ng State Milk Order Consul�ng

www.herbein.com 1.855.HC.Today NED Magazine | Second Quarter 2019 • 71

ADVERTISERS INDEX

Read the previous issues of Northeast Dairy Magazine online.

Ace Sanitary..............................................................7 Afgritech, LLC.........................................................30 Agri-Mark Cooperative...........................................55 Atlas Automation....................................................35 Dairy Farmers of America, Inc................................35

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