Dairy Dialog podcast 135: Great Lakes Cheese, IATP, Real California Milk Excelerator
We have conversations with Matt Wilkinson, vice president, technology & business development at Great Lakes Cheese, and Misty Mayo, president and CEO of the Development Corporation of Abilene; Karen Hansen-Kuhn, program director at the IATP (Institute for Agriculture & Trade Policy); and John Talbot, CEO of the California Milk Advisory Board and Fred Schonenberg, founder of VentureFuel.
Great Lakes Cheese breaks ground on $184.5m Texas cheese plant
Great Lakes Cheese (GLC) and the Development Corporation of Abilene (DCOA) have marked the official groundbreaking of a 286,500 square foot cheese packaging and distribution plant that is expected to employ 500 people in Abilene, Texas.
State and local officials were in attendance to break ground and officially welcome Ohio-based Great Lakes Cheese to their newest home. State Representative Stan Lambert and Adriana Cruz, executive director of economic development and tourism for the office of Governor Greg Abbott, were in attendance.
Family- and employee-owned, Great Lakes Cheese celebrated its 60th year of business in 2018. Through its employee stock ownership plan, all employees have a stake in the business and share in the rewards.
“Great Lakes Cheese is exactly the kind of company the DCOA and DevelopAbilene partners work to bring to our city,” said Misty Mayo, president and CEO of the DCOA.
“This is a great cultural fit and the type of project that will ensure the viability of this community for years to come. Together we are building the Abilene of the future.”
Last month, the DCOA board of directors and Abilene City Council approved a $33.3m incentive package funded by the DCOA. In addition to the funding provided by the DCOA, the project received a Veteran’s Fund and a Texas Enterprise Fund (TEF) grant from the office of Governor Abbott.
Jack Rich, chairman of the DCOA board, said, “For every dollar the DCOA has invested in GLC, the company will invest $12 back into the community through initial capital investment, property taxes, school taxes, sales taxes and wages over the next 10 years.”
The company has a national footprint with facilities in Ohio, New York, Tennessee, Utah, and Wisconsin – with more than 2m square feet of production space and more than 100 production lines. As the country’s largest natural cheese packager, GLC serves grocery, club, and super stores, restaurant chains, and foodservice distributors.
“The project is estimated to generate $1.3bn in total projected economic impact over the next 10 years,” said Mayor Anthony Williams.
Great Lakes Cheese is a manufacturer and packager of natural and processed bulk, shredded, and sliced cheeses. Abilene’s strategic location in south central US with access to major highways was a key factor in the location of GLC’s new facility.
“This groundbreaking marks the beginning of our generational commitment to Abilene,” CEO Dan Zagzebski said.
“Great Lakes Cheese’s expansion into Texas represents our dedication to provide exceptional service to our customers. We look forward to investing in this great community and our Abilene employee- owners.”
California dairy innovation contest returns
The California Milk Advisory Board (CMAB) is bringing back its annual dairy innovation competition with a new name and increased focus on functional dairy product development.
The Real California Milk Excelerator, the third edition of the CMAB dairy product innovation competition with innovation consultancy VentureFuel, will award up to $650,000 in prizes for new dairy products that support performance and recovery benefits.
The 2021 Real California Milk Excelerator taps into the functional foods market – a market that has grown over the past year and is projected to reach more than $275bn globally by 2025. With consumers prioritizing personal health and wellness in response to the pandemic, the competition will seek out early-stage start-ups that utilize California milk.
The competition seeks early-stage, potential for high-growth applicants with a cow’s milk-based product or working prototype that plays a critical role in personal performance (focus, energy, exercise, strength) and/or recovery (rejuvenation, relaxation, gut health, sleep).
Up to 12 applicants will be selected to join the RCM Excelerator program, with each receiving a $10,000 stipend and support to refine and scale their business as well as benefit from group resources including the development of sales and marketing tools. They will also be entered into the CMAB/VentureFuel Mentor Program, which includes counsel from successful founders, investors, leading corporate executives, and those in the design, marketing, sales, manufacturing, distribution, farming and processing industries.
The first place Excelerator winner will receive up to $150,000 worth of additional marketing support from CMAB to accelerate product growth in the marketplace. Second place will receive $100,000 of marketing supports from CMAB. To further advance opportunities for finalists, a private, buyer/investor day event will be hosted for finalists to pitch actual clients to drive business development and secure financing. The total value of the competition awards is $650,000.
For the first time, CMAB and VentureFuel will be awarding up to three companies entry into the new Real California Milk Incubator Boot Camp, an option for companies that have great ideas but are too early for the competition. Led by executives at CMAB, VentureFuel and the California Dairy Innovation Center, Boot Camp participants also will gain entry into the VentureFuel Mentor program as well as review of products, tweaking of pitch, introductions to food labs, nutritionists, etc. (a value of $50,000).
“Consumers are redefining what health and wellness means and looking for foods that provide not only flavor but functionality to help them achieve optimal health. Whether to maximize daily performance or replenishment after physical activity, dairy is the ultimate functional food supplying quality protein plus several vital nutrients that translate to the products consumers are looking for today,” said John Talbot, CEO of the CMAB.
“With the Excelerator and Incubator platforms, we will be able to support companies as they innovate with dairy to bring more of these products featuring milk from California dairy farmers to market.”
Fred Schonenberg, founder of VentureFuel, Inc., said, “By adding the Incubator Bootcamp and Buyer/Investor Day, CMAB continues their commitment to creating a product innovation ecosystem to further increase the demand for California Dairy while supporting and accelerating the influx of new startups and entrepreneurs creating better-for-you products.”
Competition rules and application documents are available online and the deadline for application is June 25, 2021.
Dairy issues between the US and Canada
Some dairy groups in the US are happy after the US advanced the first USMCA dispute panel on dairy, while others are still pressing for the dispute to be dropped.
Ambassador Katherine Tai said the US has requested and established a dispute settlement panel under the United States-Mexico-Canada Agreement (USMCA) to review measures adopted by the Government of Canada that it said undermine the ability of American dairy exporters to sell a wide range of products to Canadian consumers.
The US is challenging Canada’s allocation of dairy tariff-rate quotas (TRQs), specifically the set-aside of a percentage of each dairy TRQ exclusively for Canadian processors. These measures, according to the US, deny the ability of US dairy farmers, workers, and exporters to utilize the TRQs and realize the full benefit of the USMCA.
“A top priority for the Biden-Harris Administration is fully enforcing the USMCA and ensuring that it benefits American workers,” said Ambassador Tai.
“Launching the first panel request under the agreement will ensure our dairy industry and its workers can seize new opportunities under the USMCA to market and sell US products to Canadian consumers.”
Under the USMCA, Canada has the right to maintain 14 TRQs on dairy products: milk, cream, skim milk powder, butter and cream powder, industrial cheeses, cheeses of all types, milk powders, concentrated or condensed milk, yogurt and buttermilk, powdered buttermilk, whey powder, products consisting of natural milk constituents, ice cream and ice cream mixes, and other dairy.
In notices to importers that Canada published in June and October 2020 and May 2021 for dairy TRQs, Canada sets aside and reserves a percentage of the quota for processors and for “further processors.” Kai said this undermines the value of Canada’s dairy TRQs for US farmers and exporters by limiting their access to in-quota quantities negotiated under the USMCA.
Edge Dairy Farmer Cooperative applauded the announcement.
“International trade is key to economic growth and stability for our dairy farmers and processors. That’s why additional market access into Canada is an important part of USMCA,” Edge president Brody Stapel said.
“Edge and our farmers appreciate USTR’s commitment to holding Canada to the agreement and giving the US dairy community greater export opportunities as intended.”
The National Milk Producers Federation (NMPF) had also urged Tai to initiate a dispute settlement case with the Canadian government.
In a letter sent to Ambassador Tai, other US dairy industry groups urged the establishment of a Dispute Settlement Panel.
“The U.S. dairy industry proudly worked with USTR and members of Congress on a bicameral and bipartisan basis during the 116th Congress to secure strong, enforceable dairy provisions in the USMCA. Even while we knew it was important to secure strong text in the agreement, we also knew it was going to be just as critical for the provisions to be properly implemented and enforced. This is why we need USTR to take bold action to ensure the U.S. dairy industry fully benefits from the hard-fought wins included in the USMCA,” said Krysta Harden, president and CEO of USDEC.
“America’s dairy farmers appreciated USTR initiating consultations with Canada on its dairy TRQ allocation measures and the decision to hold USMCA Free Trade Commission discussions to pursue reforms. But Canada has always been obstinate on dairy, and at this stage it is increasingly clear that further action is needed to ensure a fair and transparent enforcement of USMCA. This is why America’s dairy farmers are asking USTR to initiate a dispute settlement case should talks with Canada this week fail to yield a full resolution,” said Jim Mulhern, president and CEO of NMPF.
However, signatories to another letter to the USTR and USDA on Canadian dairy tariff rate quotas, take a different approach.
Their letter, signed by 21 farmer, worker and civil society organizations in the dairy industry, as well as the broader US food system, said, “Dairy farmers and farm workers are fighting for their survival, literally and figuratively, while US trade and agriculture policy is being leveraged against them for the benefit of corporate interests. COVID-19 has disproportionately impacted food chain and farm workers in North America, crippling corporate food system distribution and processing. After more than six years of sinking farm prices (often below the cost of production), mounting debt, and rising bankruptcies, these failures of the highly consolidated food system only added to the economic pain of family-scale dairy producers.
“In the final days of 2020, the Trump administration exacerbated these challenges by filing the first petition for dispute settlement under NAFTA 2.0, or the U.S.-Mexico-Canada Trade Agreement (USMCA), aimed toward undermining Canada’s dairy supply management system. This action, if implemented, would imperil the livelihoods of Canadian farmers and unionized dairy processing workers, pitting U.S. dairy farmers against working families across the border.”
The letter opposes the U.S. government petition against Canada, and is calling on the Biden-Harris administration to rescind the action and instead advance strong worker rights protection and dairy policy reform policy in the US.
It continues: “The US government has been trying to dismantle Canada’s federal and sub-federal supply management systems for years, not to benefit US farmers or workers, but rather corporate dairy interests. During the final USMCA negotiations in 2019, the Trump administration touted the free trade agreement as a “win” for struggling US dairy producers, because Canada had conceded a limited increase in market access under significant political pressure.
Independent US dairy producers rejected this use of trade policy to undermine farmer and worker livelihoods abroad. Nonetheless, the U.S. and Canadian governments settled on a compromise, embodied in Chapter 3 of the trade agreement, which outlines a system of “tariff rate quotas” (TRQs) that require Canada to import more milk protein concentrates (MPCs, a low-cost ingredient often used in the manufacture of cheese and yogurt). Ottawa published a breakdown of TRQ “allocations” in mid-2020, the Trump administration disputed them, and began the process of USMCA dispute settlement, alleging violations of the market access concessions. The Biden-Harris administration has now inherited this dispute process, with both governments currently in consultations.”
The letter said continuing to pursue this complaint is out of step with the new administration’s stated commitments to reform the US trade agenda to be pro-worker rather than a business as usual approach that actively favors multinational corporations.
It said the Biden-Harris administration must recognize the significant economic toll the last three decades of US trade policy has taken on independent, family-scale food producers in the US, particularly in the dairy sector.
“This is the moment for the administration to direct USDA and the USTR to change direction: instead of undermining Canada’s dairy system, they should take a page from Ottawa's popular playbook. We call on them to work with dairy farmer organizations and Congress to design and implement dairy pricing reform and market management policies that protect small farmers, ensure fair prices, and support working families and thriving rural communities.”
It concludes by stating, “Independent dairy producers have long demanded these reforms. The Biden-Harris administration must cut ties with corporate dairy, heed this call for US dairy policy reform, and take immediate action to strengthen worker rights and farmer livelihoods across North America.”
The group consists of California Dairy Campaign, California Farmers Union, Campaign for Family Farms and the Environment, Community Alliance for Global Justice, Dairy Conference, International Brotherhood of Teamsters, Family Farm Defenders, Farm Aid, Farm and Ranch Freedom Alliance, Farm Women United, Food and Water Watch, Institute for Agriculture and Trade Policy, Iowa Citizens for Community Improvement, Land Stewardship Project, Missouri Rural Crisis Center, National Dairy Producers Organization, National Family Farm Coalition, Northeast Organic Farming Association – Vermont, Northwest Atlantic Marine Alliance, Rural Vermont, Washington Fair Trade Coalition and Wisconsin Farmers Union.
While representatives of the group urging the dispute to be shelved told DairyReporter they are disappointed by the ruling, they said this was only the beginning of the second stage, and they would continue to press the USTR to drop the complaint.
