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Milk Archive

Food Law and Policy Weekly Review, February 9 -13

February 12, 2015
  • Salon.com ran a candid and insightful piece on the financial challenges of starting and operating a small farm. You should read the whole thing – you don’t get too many chances to hear a young farmer talk about how tough it actually is to run these small scale diverse farms everyone seems so excited about. The article provoked some of our thoughts on farm leasing, which we posted to the Food Law Firm Blog yesterday.
  • SrirachaWe were surprised to learn that Sriracha – the original Sriracha – never sought trademark protection for their brand. The owner of the company explains the logic behind this in the LA Times this week, which makes some kind of perverse sense actually: “He believes all the exposure will lead more consumers to taste the original spicy, sweet concoction — which was inspired by flavors from across Southeast Asia and named after a coastal city in Thailand.” Though he seems to be doing quite well, we respectfully disagree considering how relatively cheap it is to seek trademark protection.
  • Chicagomag.com profiles outgoing CEO of McDonald’s, Don Thompson. Thompson will step down as CEO on March 1 after a serious of poor quarterly earnings reports. He seems a decent fellow.
  • QSR.com discusses Chipotle’s recent challenges supplying its restaurants with humanely raised pork. On several occasions during the Carnitas Crisis, we’ve been put-out during our (frequent) visits to Chipotle, having to substitute our first choice of pork with the still delightful chicken or beef alternatives. We therefore remain interested in future stories on Chipotle’s experience with the complexities of hog contracting.
  • A Philadelphia CBS affiliate reports on an FDA study which claims to have found milk in several brands of dark chocolate. Milk is an allergen under the Food Allergen Labeling and Consumer Protection Act, and few of the dark chocolate manufacturers seem to be in compliance with the allergen declarations required by the law.
  • The Environmental Working Group reports on a study indicating that consumers are not “scared away” by a GMO label: “…there was no consistent statistically significant difference in the average level of concern for GMOs expressed by people shown different labels.  That is, the mere presence of the GMO label did not lead to a greater level of concern about GMOs.” Also quoted in the Environmental Working Group Article were two economists with the USDA who hold the opinion that “labels are generally a weak policy tool for changing consumer consumption behavior.” So is labeling an effective way to communicate with consumers or not? In last week’s Review, we linked to a study indicating that affluent consumers are more likely to heed warning labels.
  • Reason.com reports that the U.S. Dietary Guidelines Advisory Committee will no longer list cholesterol among its “nutrients of concern.”

Aspartame in Milk: Your Dairy is About to Change and You Won’t Even Know It When It Does

March 27, 2013

The dairy industry recently created quite a stir after the public release of its petition to the FDA to amend the definition of milk. Essentially, the industry wishes to change the standard of identity of milk so that a product flavored with a “non-nutritive sweetener” like aspartame can still marketed and labeled as plain ol’ milk. See 78 FR 11791-01; 21 C.F.R. § 131.110 Milk. The dairy industry petition states the amendment would “promote more healthful eating practices” and “reduce childhood obesity” by providing low-cal flavored milk options. Id.

“What’d that guy just say?”

Currently, if the industry wishes to add artificial sweeteners to milk, they have to label it as such, or at least include a nutrient content claim like “reduced sugar” or “low-calorie” to the label. But under the proposal, the industry could completely eliminate these claims from milk labels. As long as an artificial sweetener is included in the listed ingredients, the product may simply be labeled “milk.”

The dairy industry defends this measure by insisting nutrient content claims are unattractive to consumers. It even goes as far as saying that consumers can “more easily identify the overall nutritional value” of artificially-sweetened milk products if “the labels do not include such claims.” id.

Consumer advocacy group SumOfUs.Org has already collected over 111,000 signatures petitioning the petition. Kaytee Riek of SumOfUs.org shared with HuffPost that a major problem with the proposed amendment is that it creates an effect running counter to its stated purpose: “Hyper-sweet additives like aspartame rewire children’s brains so that they always want sugary foods, turning the kids into tiny consumption machines.”

Others are concerned about consumer deception. By not fully disclosing that a milk product may be loaded with chemical sweeteners, the milk industry faces major consumer wariness.

Amid a national decline in milk consumption, it is obvious the industry is doing what it feels best to increase numbers. From a business standpoint, it makes sense for the dairy industry to jump on the artificial sweetener bandwagon.

But let’s be honest folks. Robbing consumers (many of whom dislike or distrust artificial sweeteners) of label notifications like “reduced-sugar” won’t help us. It will anger us. In our very busy lives, the last thing we need is to run to the store for some “milk,” only to come home and discover we got something different than we bargained for. The dairy industry certainly has the right to sell artificially-sweetened milk, but we have just as much right to be fully-informed consumers.

The FDA’s comment period on the dairy industry petition lasts through May 21. If you have thoughts you would like to share, learn how to make your own submission here.

– By Gabriella Agostinelli

Organic Milk, Contracts, and Risk Management

February 16, 2012

Via HuffPo, demand for organic milk is surging, so why doesn’t supply increase concomitantly? Purchasing contracts between organic dairies and wholesalers shift the risk of production costs onto the dairies, not the customers. I spotted this little gem of a quote with  my super-special legal eyes:

The [organic] farmers’ plight illuminates an unusual feature of the U.S. dairy economy: Most farmers do not set their own milk prices. Organic farmers typically enter into contracts with processors. This provides stability compared with the month-to-month pricing of conventional milk, but it has caused problems once food and fuel costs took off.

Organic producers are decoupled from the commodity milk cycle, but must negotiate their own production contracts with organic milk wholesalers through their local cooperatives. Though they have the freedom to negotiate their own terms, the contracts they negotiate for themselves aren’t always favorable in the long term. The terms place all of the risk of input cost fluctuation onto the dairy. Not the best financial risk management strategy. Production contracts should not be entered into unless the prices are pegged to key input costs. Risk management begins with the contract. True for dairy and true for any other agricultural product.



Milk Prices and the “Greek Yogurt Effect”

February 9, 2012

As a result of the exploding demand for Greek-style yogurts, processors like Chobani and Fage are dramatically expanding their processing facilities within New York State. I started to wonder if the state’s dairy farmers were doing better off as a result. Milk policy and pricing is terra incognita to me, so I had to lean on some friends to explain to me the relationship between aggregate demand and the prices which dairy farmers receive for their toil.

Doreen Barker of Barrows Farm did some fancy footwork in a recent blog post that answered some of my questions about what the near-term future will look for dairy farmers in the state

I also have to thank Lorraine Lewandrowski for sending me a series of articles that appeared last year in Farmshine, a weekly dairy publication available only in print. Authors Tammy Graves and Sherry Bunting did such a good job of reporting on the relationship between greek yogurt, milk policy, and dairy demand that it is a shame the articles are not widely available on-line. With their permission, I have put them up here in PDF format. Must read!

Mailbox Price and Milk Demand In New York State, By Sherry Bunting

Dairy Processing in New York: The Good, the Bad and the Ugly , by Tammy Graves and Sherry Bunting.

I cannot link to Part Two of The Good, The Bad, and The Ugly because the PDF size is over my meager limit, but here is a key quote:

Despite this news, New York’s mailbox milk prices, as report- ed by USDA, lag the U.S. average most months since 2008 (see graph). And, when central New York producers compare milk checks with colleagues elsewhere in the state, net returns do not fare well in the comparisons. Class I utilization and location dif- ferential zones are part of this equation. But putting it all togeth- er, New York’s mailbox milk price has lagged the U.S. average mailbox milk price beginning markedly in 2008 and continuing through the recent first quarter of 2011.

So far, it looks like the dairy farmers are not seeing any appreciable gain from the increased demand for their products. The “Greek Yogurt Effect?” There isn’t one.