INSIDE: - US Dairy Export Council

U.S. Dairy Industry News(continued from cover editorial)sobre Calidad de Quesos; Un articulo sobre el queso Gouda de Estados Unidos y su mayor penetración en los mercados internacionales;además de artículos técnicos acerca de la funcionalidad de los ingredientes lácteos y nutrición entre otros.Con la presente edición de USDECNews, queremos notificar a usted estimado lector, que este boletín informativo dejara de circularpor un tiempo aun no determinado, esperando seguir en contacto con usted a través de nuestra pagina de Internetwww.usdec.org, además de por los demás canales de contacto que usted ya conoce. Muchas Gracias!CordialmenteUSDEC MexicoEditorial ____________________________________________________________________________________________________________ ENGLISHThe Bank of Mexico (Banxico) projects that the gross domestic product (GDP) of the country will grow 2.9% in 2010, according toestimates by analysts from the same government agency. In addition, they expect the Mexican economy to have contracted by7.2% over the full year 2009. Meanwhile, inflation in the country will reach its highest level in at least 2 years with the Mexicangovernment calculating that it will close at 4.5% by the end of 2010.On the other hand, the International Monetary Fund (IMF) anticipates that the Mexican economy will register a growth of 3% during2010.In regards to the Mexican food market, this sector experienced the least amount of decline this year in comparison with otherproduct sectors in the country. Although it is a fact that this year’s economic crisis has strongly affected all sectors, the food sectorreports a fall of approximately 3%, while sectors such as textile, exports and machinery fell 21%, 24% and 36%, respectively.Milk production in Mexico reportedly grew by approximately 2% from January through September 2009, not a sufficient level tosatisfy the annual demand for milk in the country. Nevertheless, Mexican imports of dairy products were 5% lower during themonth of September 2009 compared to September 2008.The United States is currently the main supplier of dairy products into Mexico, providing 65% of the total import volume to satisfythe country’s demand for milk and dairy products.In this edition of USDECNews, you will find interesting reports and articles that include the designation of Hilmar Cheese Co. andHilmar Ingredients as the “2009 Exporter of the Year”, a report on the excellent performance of U.S. cheeses at the World CheeseAwards, an article on U.S. gouda cheese and its increased penetration in international markets, and a review of the specialty functionaldairy ingredients available from U.S. suppliers, among other features.We would like to notify our readers that this is the last issue of our electronic newsletter, USDECNews. However, we will continue toprovide information and updates related to the U.S. dairy industry and U.S.-manufactured dairy ingredients through the officialUSDEC website, www.usdec.org, and through other familiar channels. Many thanks!Cordially,USDEC MexicoUSDEC News is published by the U.S. Dairy Export Council (USDEC) and is designed to provide up to date information about the U.S. dairy industry for thebenefits of our international partners.USDEC was formed by Dairy Management Inc. in 1995 to enhance the U.S. dairy industry’s ability to serve international markets. USDEC is an independentnon-profit membership organization representing dairy processors, exporters, milk producers and industry suppliers.USDEC supports international buyers of dairy products by providing information about U.S. suppliers, their products and capabilities. We bring buyers andsellers together through conferences, trade missions and trade shows. USDEC furnishes application and usage ideas for U.S. dairy ingredients through seminars,one-on-one consultations and technical publications. We assist with foodservice promotions, menu development and education. We also work withlocal authorities to resolve market access issues that ensure reliable delivery for customers and importers. When you work with USDEC and its members, youare partnering with companies that manufacture and export more than 85% of all U.S. dairy products.Copyright © 2009 U.S. Dairy Export Council.2 USDECNews | December 2009

U.S. Dairy Industry NewsHilmar Cheese Co. and Hilmar IngredientsNamed “Exporter of the Year”“Our edible and refined lactose is easilyblended with our whey protein hydrolysatesfor infant formula in marketslike China and India who are experiencingbirth booms,” says Bernard Corkery,general manager, lactose. “Our developmentof high-purity refined edible lactoseand pharmaceutical grade lactosehas also broadened our export possibilitieswith new end uses and new countriesof interest.”Cheese, PleaseIn addition to ingredient sales, HilmarCheese Co. has a growing cheese exportbusiness.Long-time U.S. dairy export pioneerHilmar Cheese Co. and its Hilmar Ingredientsbusiness unit were recognizedby Dairy Foods magazine as the2009 “Exporter of the Year.”The annual award goes to a companythat demonstrates leadership in drivingglobal dairy demand and U.S. dairy exports,commits resources to export marketdevelopment, posts significantexport sales, and makes exports a keypart of its overall growth strategy.Hilmar Ingredients excels on all fronts.“We have a strong willingness andlong-term commitment to serve globalmarkets, and as a result, we devote theresources necessary to this very importantpart of our business,” says KevinVogt, vice president and general managerfor ingredients for the Hilmar, California-basedcompany.Nowhere is that more evident than inthe sharp focus Hilmar Ingredients putson customer service and deliveringproducts suited specifically to clients’functional needs.Customer service and customization “issomething we do everyday,” says Vogt.“We have developed our staff to accommodatethe special needs of internationalmarkets.”Close to the CustomerThe company, which exports to morethan 40 countries, cites the importance ofthe “knowledge value of the interaction,”according to Vogt.“Both sides learn something and the outcomeis an advance in understandingthat moves your thinking forward,whether it’s in new product uses or newappreciation of culture and attitudes.The fundamentals keep us profitable, theinteraction keeps us energized andadroit,” he explains.This leads to the development of productsthat have been specifically tuned forforeign markets, such as Hilmar 8800, analpha-lactalbumin-enriched whey proteinconcentrate (WPC) that suits Asiandemands for specialized nutritionalproducts, like infant formulas and sportsrecovery beverages.Blends of whey proteins and lactosehave also carved a market niche forthemselves.“The Japanese, in particular, have beenimpressed with the consistency andquality of our cheese, and their hungerfor typical American fare provides quitean opportunity,” says Phil Robnett, vicepresident, cheese. Robnett says foodserviceand hospitality buyers have beeneager for applications for “AmericanOriginal” cheeses like monterey jack(plain and with jalapeños) and colby.High Quality StandardsThrough it all, Hilmar Cheese Co. andHilmar Ingredients place a high priorityon mastering the technical requirementsof being a global supplier.“Since we are also dealing with internationalgovernment agencies, it is imperativethat we understand what isrequired in terms of documentation andfood safety precautions,” Vogt says. “Weare serious about serving the internationalmarket and we’re careful to ensureour products adhere to stringentstandards.”Hilmar Cheese Co. and Hilmar Ingredientsfacilities and services are ISO9001:2000 certified. They also followGood Manufacturing Practices and aHazard Analysis Critical Control Pointsprogram at every stage of production.Hilmar’s products are Halal- and Koshercertified,and all products are GMO-freeand conform to European Union standards.Its USP lactose meets additionalquality standards, such as internationalpharmacopoeia requirements.3 USDECNews | December 2009

U.S. Dairy Industry NewsFuture GrowthMoving ahead, Hilmar Cheese Co. andHilmar Ingredients expect continuedexport growth. A new plant in Dalhart,Texas, commissioned in 2007, was designedprimarily to serve the domesticmarketplace. However, its proximity tothe southern border puts Mexico, andCentral and South America at its door.Together, the Dalhart and Hilmar siteshandle more than 17 million pounds(approximately 7.5 million liters) of milkper day, attesting to the company’s supplycapacity. Continuous and large volumeruns deliver consistent and reliableproduct composition, the company says.It plans to start Phase Two of Dalhart in2010, expanding cheese, WPC andwhey protein isolate production.Past winners of the “Exporter of the Year”award include Davisco Foods International,Darigold Inc. and SchreiberFoods.Dr. Kwok-man Lee in the Hilmar IngredientsR&D FacilityIn the News…New USDEC Members• USDEC welcomes three new organizationsto the membership: Blimling& Associates, a commodity brokeragefirm based in Cottage Grove,Wisconsin; SGS North AmericaAgricultural Services, a St. Rose,Louisiana-based inspection, verification,testing and certification company;and Wisconsin CheeseMakers Association, a trade associationbased in Madison, Wisconsin.New Plants and Upgrades• Darigold Inc. will spend $20 million toexpand processing capacity andwastewater treatment at its Boise,Idaho, fluid milk plant. Capacity at thefacility, which also produces ultra-pasteurizedproducts and soy beverages,will grow by 15 million liters annually.The project is expected to be completein the spring of 2010.• Glanbia Nutritionals opened a 650-square-meter research and development(R&D) facility in Twin Falls, Idaho.The new “Glanbia Collaboration Center”is designed to maximize interactionwith customers and to reduceproduct development time by combiningan R&D facility with a pilot plant.The operation will focus on developingand testing prototypes of nutrition andsnack bars, beverages, baked goodsand other applications for Glanbia’sdairy protein and flax ingredients.• Unilever will invest $100 million to expandits Covington, Tennessee, plant,adding 275 jobs. The facility, whichcurrently makes Slim-Fast drinks, willadd production of ice cream andfrozen novelties. Construction is set tobegin during the first quarter of 2010.• Via Cheese, Swanton, Vermont, willreceive $750,000 from the state to upgradethe former Lucille Farmscheese factory, which it bought in2006. Via will use the money for generalrepairs and upgrades to increaseefficiency, and to bring the plant up toU.S. Department of Agriculture standards.• Whitehall Specialties is expandingits Whitehall, Wisconsin, cheese processingplant by 20%. The $8−10 millionproject will add lines forindividually wrapped and slice-onslicecheese products.Moves and Consolidations• Farmland Dairies, once part of ParmalatUSA, sold its Grand Rapids,Michigan, plant to Agropur Co-op ofCanada and its Wallington, New Jersey,operation to Grupo Lala, Mexico’slargest milk processor.• Marathon Cheese Corp.’s MountainHome, Idaho, cheese cut-and-wrapplant will downsize due to a reductionin sales. The plant opened in January2007.Acquisitions and Mergers• Foster Farms, the largest private dairyprocessor in California, was the onlybidder for Humboldt Creamery, acquiringthe bankrupt co-op’s Fernbridgeand Stockton, California, plantsfor $19.25 million. Humboldt’s Los Angelesand Loleta, California, plants arestill available for sale and will be auctionedoff separately.Miscellaneous• Finlandia Cheese changed its nameto Valio USA to reflect its expansionbeyond the cheese case. The company,a subsidiary of Finland’s ValioLtd., will be split into two divisions: theFinlandia Cheese Division and theHealthy Dairy Division. The latter willinclude lactose-free milk and other“dairy innovations,” the company says.4 USDECNews | December 2009

U.S. Dairy Industry NewsU.S. Showing at World Cheese Awards‘Opens Eyes’leapt from culture to culture and countryto country fairly easily in recent years,penetrating and gaining a foothold inmarkets where cheese, at one time, wasa foreign concept,” says Hollister. “Yet theUnited States is not known as a goudaproducer—and some overseas buyersmight not even consider a U.S. sourcewhen looking to purchase it.”On a global stage, an international teamof judges deemed U.S. specialty cheesesamong the best in the world. This year’sWorld Cheese Awards competition, heldin October in Las Palmas, Grand Canaria(one of the Canary Islands), wasjudged by 150 cheese experts from 24countries. The verdict: 36 U.S. companiescollected 83 medals—21 gold, 27silver and 35 bronze—in 43 cheese categories.“The performance at this year’s contestreaffirms that U.S. cheesemakers havecome of age,” says Angélique Hollister,marketing director, cheese and manufacturedproducts, U.S. Dairy ExportCouncil (USDEC). “We have the capabilitiesto compete with any country in theworld in cheese quality and variety.”Indeed, one of the most impressive aspectsof this year’s event was the broadsweep of U.S. success. U.S. cheese artisansearned awards in 43 different categories.U.S. companies scored well in knownspecialties like cheddar and mozzarella,but they also took home medals for othertypes such as camembert, provolone andgouda—varieties that have been rarelyrepresented on the winner’s list in thepast.“Gouda in particular is one of the world’smost popular cheeses, and one that hasHolland’s Family Cheese, a Thorp, Wisconsin-basedcompany, took home fivemedals for its gouda at the competition,with Bravo Farms Handmade Cheese ofTraver, California, picking up a sixth.“That’s one specific instance where anevent like the World Cheese Awards canopen people’s eyes,” says Hollister.More than 2,500 cheeses from all cornersof the globe vied to please the tastebuds of the judges. While all U.S. winnerswere notable, some companiesmerited outstanding recognition.Sartori Foods Corp., Plymouth, Wisconsin,picked up the most medals—11—includingthree golds for its romano,gorgonzola and Sartori Reserve BlackPepper Bella Vitano (hand-rubbed withcracked pepper). Nampa, Idaho-basedSorrento Lactalis, the U.S. arm ofFrance’s Lactalis Group, nabbed ninemedals in five Italian cheese categories.BelGioioso Cheese Inc., Denmark, Wisconsin,took home six medals, three ofthem golds for its Ricotta con Latte,parmesan and aged provolone.Marin French Cheese Co., Petaluma,California, won eight medals in sevencategories—everything from camembertto brie—and earned the USDEC trophyfor “Best U.S. Cheese” for its Le Petit Déjeuner.Marin describes Le Petit Déjeuner as asoft, cow’s milk cheese with an “old-fashionedripened butter flavor,” traditionallyserved with breakfast but versatileenough for hors d’oeuvres with any meal.“The contest has become a showcase forU.S. cheese craftsmen to demonstratetheir world-class cheesemaking expertise,”says Hollister. “The recognition theycontinue to achieve works hand-in-handwith USDEC’s export development effortsto enhance the global image of the U.S.dairy industry as a quality supplier of justabout any variety of cheese a customermay need.”5 USDECNews | December 2009

Cheese & Manufactured ProductsU.S. Cheese Processors Stake Claim inWorld Gouda MarketImporters of bulk gouda have a newfriend in U.S. cheese processors.Relatively recent entrants into the globalbulk gouda scene, U.S. cheese companiesoffer great-tasting, high-qualitycheese at competitive prices. They nowoffer both 40 pound (18.2 kg) blocks ofdry salted gouda as well as 10–20 pound(4.5–9.1 kg) loaves of brined gouda, allcustomizable to fit customers’ needs. Thisnew capacity offers prospective buyersthe chance to mitigate risks by diversifyingtheir supply sources to various regionsof the world.Processors Eager to MeetUnmet Demand for GoudaGouda, a semi-hard cheese made fromcow’s milk, is well known for its fantasticmelting ability. It is, therefore, an ideal ingredientin foods including sauces,soups, casseroles and a wide variety oftraditional dishes in Mexico and elsewhere.Depending on its age, it rangesin taste from buttery and sweet to nuttywith butterscotch undertones. Goudaalso shreds easily, making it a greatcheese in gourmet pizza cheese blends.U.S. cheese processors are known worldwidefor their excellent and abundantcheddar and mozzarella production, andthey were eager to add gouda, the thirdmostpopular cheese in the world, to thatlist. Worldwide consumption of thecheese is expected to reach around900,000 metric tons (MT) once theglobal economy rebounds. And althoughU.S. cheese processors manufactureaward-winning specialty gouda, morethan 60% of the cheese consumedworldwide is made in bulk.U.S. Dairy Export Council staff recognizedthe opportunity for U.S. cheeseprocessors to enter this market but goudaproduction capacity was limited. So in2007, they began working with severalU.S. cheese manufacturers on infrastructurechanges.USDEC provided information to assistthese companies in modifying theirprocesses; with only minor tweaking,their new gouda production systemssoon became fully operational. Next,USDEC arranged for meetings betweenthese U.S. cheese companies and potentialimporters in Mexico, Russia, Koreaand Japan. The meetings included samplingof the cheeses in many differentapplications.In addition, USDEC developed high-profilemarketing and promotion strategiestargeted at local retail and foodservicecustomers, designed to back U.S. suppliers.U.S.-made Gouda Gains Favorwith Mexican ImportersImporters in Mexico, the world’s largestimporter of gouda, have even more reasonto buy U.S.-made gouda: proximity.Even from the far corners of the UnitedStates, Mexican importers can expecttheir gouda to ship in less than a week’stime. This also aids those importers lookingspecifically for very young gouda, regardlessof whether they are motivatedby price or by product use.Mexico imports nearly all of its gouda,giving Mexican importers a vast amountof experience in searching for qualitybulk gouda. U.S. processors thereforeknew the success of their cheeses restedin these importers’ opinion of the taste,quality and functionality of the new U.S.-made gouda.In tasting sessions with U.S. suppliers,Mexican cheese importers have beenimpressed on all counts, and have reportedthat the gouda is at least as goodas any they’ve imported in the past. Theyalso are pleased to partner with U.S.cheesemakers, who have a well-earnedreputation for product quality and consistencyof supply. Most importantly,they’re buying U.S.-made gouda.What Next for U.S.-madeGouda?U.S. processors continue to reach out togouda importers in Mexico and are lookingto move into the Japanese and Russianmarkets as well. If you are interestedin sourcing U.S. gouda, please contactUSDEC.6 USDECNews | December 2009

IngredientsDavisco Foods International, Inc. hasdeveloped and advanced its technologyto precisely specify a product’s biologicaland functional attributes. Biozate ® 3 is ahighly purified, hydrolyzed whey proteinisolate (WPI) with a unique molecularweight profile. The addition of Biozate ® 3to protein bars results in softer-texturedbars over time under various storage conditions.Erie Foods International, Inc. offersECCO 2730, a hydrolyzed sodium caseinateand highly functional milk proteindeveloped to achieve rapid dispersibilityin food and pharmaceutical applications.This product offers good emulsificationproperties, excellent solubility and fatandwater-binding capabilities. Typicalapplications are whipped toppings, specialdietary foods, bakery goods andemulsified meats.Glanbia Nutritionals offers a line of specialtyfunctional products.• Thermax ® 34 whey protein concentrate(WPC) is designed with enhanced heatstability, water retention and gelationproperties for superior performance inbeverages, infant formula, soups,sauces, frozen yogurt and ice cream.• Thermax ® 70 is a WPC with excellentnutritional value and functional propertiessuch as good solubility, high waterretentioncapacity and excellentemulsification.• Thermax ® 690 is a premium, heat-stablehydrolyzed WPI for use in low-acidbeverages. It can be used as the solesource of protein in ready-to-drink beverages.It remains stable throughoutUHT and retort thermal processing. Itshigh solubility, mild flavor, low fat(

Nutritionfat dried milk powder, cheese and yogurtcontains phosphopeptides which helpenhance the re-mineralization of toothenamel for stronger teeth and may alsohelp prevent dental caries when usedover longer periods of time. 4Whey & Immune SupportThe H1N1 virus has put people in manyparts of the globe on alert and madethem more conscious of building ahealthy immune system. One easy way tohelp enhance immune health is byadding whey protein to the diet.The body naturally forms free radicalsduring metabolism or when it needs helpin fighting off unwanted bacteria orviruses. Environmental factors includingpollution, cigarette smoke and UV exposurealso increase free radical production.When the body produces an excessamount of free radicals it creates a stateof imbalance called oxidative stress. Duringthis time the body has a reduced abilityto detoxify the system or repair anyresulting damage. Oxidative stress is directlyrelated to increased aging and avariety of health conditions includingcancer, obesity, diabetes and heart disease.The immune system plays a key role in reducingoxidative stress and this requiresan adequate amount of glutathione(GHS), an important cellular antioxidantthat helps neutralize the free radicals thatcan cause oxidative stress. Factors suchas stress, infection, medication and poordiet all deplete GHS levels. GHS isformed in the cells using the amino acidscysteine, glutamate and glycine. Cysteineis the rate-limiting amino acid in thisprocess and an adequate supply enablesthe body to ward off oxidative stress.Whey protein is among the richest naturalsources of cysteine and contains morethan four times the amount comparedwith other high-quality proteins. 5Whey protein, either in the form of wheyprotein concentrate (WPC) or whey proteinisolate (WPI), is often a preferred ingredientin immune support andenhancing products, both for individualswith special needs and for those in relativelygood health. The individual componentsor fractions in whey, such asimmunoglobulins which comprise10−15% of the total protein, have knownimmune-enhancing properties.Weight & Cancer ConnectionBreast cancer is the most prevalent typeof cancer in women, and generally arisesin mid-life. It is about 100 times less commonin men. Certain dietary habits havebeen associated with an increased risk ofbreast cancer, but this does not includethe intake of dairy foods. In fact, a largemulti-year study reported no consistentassociation between the risk of breastcancer and the consumption of dairyproducts. 6Excess weight is one of the better documentedrisk factors associated with an increasedcancer risk for men and women.According to the WHO, a Western diethigh in calories, fat and refined carbohydrates,combined with a lack of exercise,is responsible for the increase in obesityand cancer.Post-menopausal women are especiallyprone to weight gain—at a time whentheir risk of cancer is also increasing. Calcium-richdairy products have repeatedlybeen shown to help improve body compositionwhen included in a reduced fatand calorie diet. And just recently, a newstudy out of Australia reported evengreater weight loss when people on alower calorie diet ate five instead of threedaily servings of dairy products. Thebioactive peptides in dairy work togetherwith the natural calcium component tohelp increase weight loss, a result thatcannot be duplicated when dairy is replacedwith calcium supplements.Switching from a Western diet to a lowercaloriediet rich in low-fat dairy productsis one way to help look and feel betterwhile at the same time reducing cancerrisk.An added benefit of weight loss is a reducedrisk of heart disease. A body massindex of 25 or greater is a powerful predictorof hypertension and heart diseaseand increases risk by more than 40%. 7Cancer is often treated with chemotherapy,the side-effects of which includenausea, poor appetite and reduced immunity.Nutrition supplements formulatedwith whey protein provide an easy-to-digestsource of high-quality protein andare often recommended during the treatmentphase to help prevent muscle losswhile enhancing the immune system.Age-Related ChangesHormonal changes later in life have varyingeffects, some of which can be life-altering,such as osteoporosis. Menopausehas been shown to be the most importantrisk factor for bone loss in women. Duringtheir lifetime women lose approximately30−50% of their bone surface and bonetissue, and roughly half of this loss occursafter menopause. 8Osteoporosis is generally viewed as a “femaleissue” but it is a growing concernamong men. As men live longer the issuewill become even more apparent. Boneloss in men happens at a slower rate dueto their larger skeletons. Men aren’t affectedby hormonal changes in their 50’slike women, but by ages 65−70 men andwomen have equal rates of bone loss.11 USDECNews | September 2009

NutritionBoth also have a reduced ability to absorbcalcium which can be compoundedby factors like the regular intake of oralmedication.The first step to ensuring good bonehealth is to get adequate amounts of calcium-richproducts, like dairy products,before the age of 20. Children betweenthe ages of 9 and 18 need approximately1,300 mg of calcium per day which isequivalent to four servings (one serving =237 ml milk, 170-227 g yogurt, or 28.4-42.5 g natural cheese) of dairy products.During the adult years the requirementsdrop slightly to between 1,000 and 1,200mg of calcium per day. 9Other frequent complaints associatedwith hormonal changes in both womenand men are insomnia, irritability, fatigueand depression. 10 An extensive surveyanalysis of over 10,000 women in Europefound that a low consumption of dairyproducts contributed to a higher rate ofmenopausal symptoms. One of the componentsin whey protein is alpha-lactalbuminwhich is rich in tryptophan andhas been shown to have a calming effectand improve sleep quality. Alpha-lactalbuminis one of the main protein componentsin human breast milk. 11In SummaryDairy products play an important role atevery stage of life in terms of achievinghealth and wellness. Consumers todayhave more options than ever thanks to improvedmethods of production, storageand transportation.Today, numerous varieties of U.S. cheesesand other dairy products may be found infood outlets all around the world. Foodformulators also have a variety of highqualityU.S. dairy ingredients to selectfrom. The list is expected to grow as U.S.manufacturers continuously find ways tooptimize dairy ingredients, includingwhey proteins and milk powders, to meetthe current and future needs of their customerbase.Please contact the USDEC office in yourarea to learn more about U.S. dairy ingredients,including new opportunities inyour market.References1. Leung BM, J Am Diet Assoc,109(9):1566−75, 20092. Weaver CM, et al, J Bone Min Res,24(8):1411−19, 20093. Michaud DS, et al, Lancet Oncol, 9(6):550−8, 20084. Yoshihara A, Gerodontology, 26:130−6,20095. Cribb P, USDEC Monograph: Whey Proteinsand Immunity, 20046. Pala V, et al, AJCN, 90:1−11, 20097. Forman JP, et al, JAMA, 302(4):401−11,20098. Finkelstein JS, et al, J Clin EndocrinolMetab, 93(3):861−8, 20089. USDEC Reference Manual for U.S. Wheyand Lactose Products, 200310. Pérez JA, et al, Maturitas, 62(1):30−6, 200911. Markus CR, et al, AJCN, 81(5):1026−33,2005U.S. Dairy Industry NewsLetter to the ReadershipThe December 2009 issue of USDECNewswill be the last official issue of the Internationalnewsletter. USDEC would like toexpress their sincere thanks to all thereaders for their constant and loyal supportsince the first issue was publishedexactly three years ago. We hope youhave found the newsletters to be a valuableresource as you look for new ideasand opportunities for dairy ingredients inthe marketplace and U.S. suppliers ofthese ingredients.All past issues of USDECNews will beavailable for reference and downloadingat www.usdec.org/library in the ‘Periodicals’section. The USDEC online libraryalso contains a variety of information andwe encourage you to browse the libraryat your convenience.At the end of January 2010 the webpage foreach individual office will be removed fromthe internet. USDEC will continue to offer avariety of resources at www.usdec.org. Weinvite you to visit the website often for the latestnews and information on a number oftopics including the following:• Innovations in Dairy Ingredients• Current Market Conditions• New U.S. Dairy Ingredient Suppliers• New Product Applications andFormulations• Technical and Research Updates• Trade Shows and SeminarsIf you have any questions, or if you wouldlike any information on U.S. dairy ingredients,please contact your local USDEC office.Representatives will be available toassist you as needed.12 USDECNews | September 2009

Meet Our MembersCommercial Creamery CompanyCommercial Creamery, Spokane, Washington,produces a number of trulyunique products including real sourcream and yogurt powders, naturalcheese powders and shelf-stable Chunkettesand Crumbettes. The privatelyheld company, owned and managedtoday by third and fourth generations ofthe Gilmartin family, exports products tomarkets in more than 30 countries.Earl Gilmartin took over the company in1908. “At first we were a true creamery,making butter,” says his granddaughter,Megan Boell, vice president of sales andmarketing. “But during the 1920s, wewere one of the first to dry eggs. That’show we got into the spray-drying business.Later, we were the first creamery tomake spray-dried cheese powder.”Commercial Creamery employs 100people in Washington and Idaho. Thecompany’s headquarters, research anddevelopment department, and pilot plantare in Spokane. The main production facilityis in Jerome, Idaho, a major cheesemanufacturingcenter in the third rankeddairy state in the United States.Commercial Creamery’s product focus isprimarily on spray-dried cheese powders,which find applications in manyfood sectors, including potato chips andother savory snacks, rice and pastadishes, entrées, baked goods, dips,dressings, sauces and soups. The companyalso manufactures and markets enzyme-modifiedcheeses (EMCs) whichare used in the manufacture of saucesand dressings, as well as flavors, saucemixes, non-dairy specialty powders,shortenings and margarine.Emphasis on QualityDecades of experience, and an emphasison real dairy quality, make CommercialCreamery an industry leader and anobvious choice for many food manufacturersin the United States and abroad,Boell says.“We’re the pioneer. We have a lot of experiencein making cheese powder andspecialty dairy products, and our primaryfocus is in this area,” she says. “Our sourcream powder starts with cultures whichare dried only after the flavor is perfected.”Boell says this makes for a higher qualityproduct with noticeably better flavornotes. The company follows the sametrue-culturing process for yogurt powders,she notes.Commercial Creamery has two trademarked,branded products in Chunkettesand Crumbettes. These are small cheesepieces made from specific varieties ofnatural cheeses. Chunkettes are sold primarilyin the United States, with a smallamount exported to Mexico andCanada. While both are shelf-stable, theCrumbettes are better suited for shippingdue to their high temperature stabilityand are sold worldwide.Commercial Creamery purchases mostof its milk and cream from Idaho dairyfarms. It procures cheese on the openmarket from all over the world, but muchof it comes from Idaho and California.Boell says Idaho is an ideal manufacturinglocation because of the proximity ofmilk sources and because the near-zerohumidity makes for efficient drying operations.The Jerome plant has received theAmerican Institute of Baking’s highestrating for the last several years. The companyhas capacity available on its highspeed,low-shear blending line at theJerome facility, and it offers customblending and drying packages.Export business began in the 1970sunder the leadership of Boell’s father,Earl “Bud” Gilmartin Jr., and it now representsnearly 20% of CommercialCreamery’s business. The company sellsinto world markets both directly, andthrough distributors and brokers.“The Internet has created significant newbusiness and export opportunities forCommercial Creamery,” Boell says. “Wereceive requests every day from companiesaround the world interested in ourproducts.”Export Products• Branded Products: Crumbettes andChunkettes• Cheese Powders: asiago, blue, cheddar,feta, monterey jack, parmesan,romano and swiss• Dairy Powders: butter, cream cheese,sour cream, sweet cream and yogurt• Flavors: blue cheese, butter, cheddarcheese, cream, parmesan and romano• Sauce Mixes: alfredo, au gratin,cheddar, cream, monterey jack, mac &cheese and scallop• Snack Seasonings: barbeque, cheddar,jalapeno, nacho, sour cream &onion and moreContact InformationWebsite: www.cheesepowder.comOffice Location: Spokane, Washington,USAContact: Megan Boell, Vice President ofSales and MarketingEmail: megan@cheesepowder.com13 USDECNews | December 2009

Meet Our MembersInterfood Inc.In August 2008, Interfood Inc. wasformed in Waltham, Massachusetts, becomingthe newest of 16 offices ownedand operated by Interfood Holding ofthe Netherlands. Since 1970, InterfoodHolding has been buying and sellingdairy products around the world.“There has been a lot of opportunity tobuy from America,” says Ferry de Veen,Interfood Inc. managing director.“There is demand in the market so wethought the time was right for us toopen a U.S.-based office.”The office now has a staff of 12, includingcommercial team members JerryOstrowski, Fabian Rivera and ChrisKilibarda and office manager EllisBogers.“Our main interest is in exporting productsfrom the United States to otherparts of the world,” de Veen says. “Thedollar–euro exchange rates havehelped.”Interfood Inc. operates as a componentof Interfood’s global network, which hasoffices on every inhabited continent,and annual sales of more than $1.1 billion.The primary focus of Interfood Inc.is to purchase U.S. dairy products andsell them into other markets, includingChina, Southeast Asia, Oceania, Europe,Mexico and South America.“Products include powdered milk, milkfats, cheese and whey ingredients.These are purchased from numeroussources in the major dairy regionsacross the United States. They are soldfor milk recombination or for use inmaking yogurt, ice cream, bakery andother food products,” de Veen says.Interfood’s customers expect top-qualityproducts at a competitive price. “Wehave the ability to meet these expectationsbecause we know when andwhere to buy,” de Veen says. “We havethe expertise, just like a stockbroker.”Cheese sourced from the United Statesincludes hard grating cheese, cheddar,gouda and mozzarella. A variety ofpowdered milk products are available,including nonfat dry milk, skimmed milkpowder and full cream milk powder.U.S.-made proteins include acid caseinand whey protein concentrates (WPCs)at various protein levels. The companyalso can produce custom-blended milkor whey powders with a wide array ofnutritional profiles.Interfood’s online marketing describesthe company as a “globally operatedtrading house offering extensive servicesto customers and suppliers.” Logisticsis one such service.Interfood has specialized staff that canfile documentation and ensure compliancewith country-specific regulations.In total, 250 employees within InterfoodGroup offices around the world providethe needed backup, working in differenttime zones as part of a multilingual,coordinated team.The company says it also emphasizesstrict quality control. According to deVeen, “From raw materials to finishedproduct, continuous quality checks areperformed in specialized laboratories,which guarantees consistently highstandards for the best results.”Interfood has great expectations for itsU.S. division. “The U.S. market has becomemore and more important,” deVeen says. “And having a U.S. officeputs us in a better position to work withMexico and the rest of the world.”“Market conditions and exchange rateswill have an effect on the division’s volumethis year, but as long as U.S. dairymanufacturers are interested in exporting,and the world markets are interestedin buying, Interfood Inc. isexpected to grow,” says de Veen.Export Products• Caseins: acid casein, rennet casein,calcium caseinate and sodium caseinate• Cheese: cheddar, gouda and parmesan;available in blocks and barrels• Cheese Powder: a variety of typesand forms, including Italian styles• Custom Blends: specific whey andmilk powders formulations• Lactose• Liquid Concentrates: milk permeate25% and skimmed milk 35%• Milk Fats: anhydrous milk fat, butterand butteroil• Milk Powders: buttermilk powder,nonfat dry milk, skimmed milk powderand full cream milk powder• Whey Ingredients: whey protein concentrates(WPC 34, WPC 80 and WPC80 High Gel), whey protein isolates,whey permeate and deproteinizedwheyContact InformationWebsite: www.interfoodinc.comOffice Location: Waltham, Massachusetts,USAContact: Ferry de Veen, ManagingDirectorEmail: ferry.de.veen@interfoodinc.com14 USDECNews | December 2009

Meet Our MembersUnited Dairymen of ArizonaUnited Dairymen of Arizona (UDA),Tempe, Arizona, is a milk marketing cooperativeincorporated in 1960. UDAbegan with the merger of two dairy associationsseeking to ensure a stable marketfor producers and an adequate supply offresh dairy products for consumers.UDA is by no means a newcomer to exports.For instance, 100% of the co-op’slactose output has been exported for manyyears, with the majority shipping to Asia.However, exports have gained significanceover the last five to six years, accordingto James (Jimco) Hrusovszky, vicepresident of business relationships and development.“Last year we exported 8,000 metric tons(MT) of milk protein concentrate with40% protein (MPC 40), 10,000 MT oflactose and 6,000 MT of butter,”Hrusovszky says. “About 20% of our product,by total solids, was exported.”UDA’s membership consists of approximately70 producers, averaging 2,000head per dairy. Collectively, they representabout 85% of the milk in the state. UDA’smodern facility in Tempe is capable of processingup to 4.8 million liters of milk perday. Annual sales are approximately $800million. Earlier this year, UDA completedthe start-up of a cheese subsidiary, ArizonaCheese Company LLC, with its own dedicatedplant, also located in Tempe.Hrusovszky says the co-op has grownwith the Southwest region over the lastfive decades.The co-op has also positioned itself tocapitalize on export opportunities bymaintaining additional capacity. “We alwayssay that we don’t know until we try,”Hrusovszky says. “We are very willing toknock on doors and turn over stones tofind ways to move milk. Exporting is agreat way to do that.”UDA offers an extensive line of productsfor export including milk powders, lactose,butters, cheese and custom blends.“We try to specialize in the not-so-commonthings in terms of our blends,”Hrusovszky says. “We want to make eachrelationship a true win-win situation bycreating products that offer a specificunique function or alternatives that workat a reduced cost-level.”An ample supply of dairy co-productshelps UDA to be cost-effective,Hrusovszky says. Creativity and adaptabilitycome from being a large organizationthat is flexible enough to operatelike a small, proprietary company.Growth through PartnershipsAmong the key components in UDA’sgrowth—and in the emergence of its exportbusiness—has been the formation ofjoint ventures, and its membership inDairyAmerica. “UDA became a foundingmember of the exporting cooperative 11years ago to work with other U.S. companiesto jointly offer more capabilities toglobal buyers while increasing returns.”UDA has a 50/50 joint venture with ErieFoods International, Inc., Erie, Illinois,called EU Blending Company. The partnership,which has allowed UDA to expandits portfolio of blended ingredients,was established in 2008 with a plant innearby Casa Grande, Arizona.The Casa Grande manufacturing facilityis undergoing an expansion to more thandouble its capacity, which will increaseexport opportunities.Blue-veined and feta cheeses are availablethrough UDA from additional jointventures with Wisconsin-basedWiskerchen Cheese and the ArizonaCheese Company. A small percentage ofthe co-op’s cheese is currently exported,but the growth of that business is a keygoal for UDA.Whether they are exported directly byUDA or through a joint venture, productsfrom UDA are entering markets around theglobe, with a particular emphasis on Mexico.“Mexico is one of our largest targets.Since we are only hours from the borderwe have a definite freight advantage,”Hrusovszky says. “That proximity allows usto export skim milk powder, MPC’s, freshcream and condensed skim.”“I believe exports need to stay at the top ofeveryone’s focus. In the near future I thinkthe export market will provide even moreopportunities for U.S. dairy ingredients.”Export Products• Butter: 80% and 82% butterfat; saltedand unsalted, in 25 kg blocks• Cheese: blue-veined, gorgonzola andfeta• Condensed Skim Milk: fresh liquid• Cream: fresh liquid• Edible Grade Lactose Powder: madefrom ultrafiltered (UF) milk permeate• Milk Protein Concentrate: MPC 40,MPC 42 low and medium heat andMPC 70 low heat• Nonfat Dry Milk: all heat treatments• Skim Milk Powder: all heat treatments• Wet Dairy Blends: custom blendsutilizing milk and milk products• Whey Protein Concentrate 34%:fresh liquidContact InformationWebsite: www.uda.coopOffice Location: Tempe, Arizona, USAContact: James (Jimco) Hrusovszky, VicePresident of Business Relationships andDevelopmentEmail: jimco@uda.coopTo learn more about DairyAmerica andErie Foods International, Inc., pleaseread their profiles in the December 2008issue of USDECNews.15 USDECNews | December 2009