WMMB CEO: Wisconsin dairy industry thirsty for more milk

2013-02-28T10:29:00Z WMMB CEO: Wisconsin dairy industry thirsty for more milkBY JANE FYKSEN, CROPS EDITOR Agri-View
February 28, 2013 10:29 am  • 

“Why all the talk about our cows?” was the question posed last week at an Agricultural Community Engagement (ACE) meeting in Stevens Point – a collaborative effort by the Professional Dairy Producers of Wisconsin (PDPW), Wisconsin Counties Association and Wisconsin Towns Association.

After Wisconsin Milk Marketing Board (WMMB) chief executive officer James Robson gave his presentation on the strength of Wisconsin’s dairy industry it was clear everyone should be talking about cows, if they aren’t already. Dairy is a major sweet spot for this state’s economy.

Looking to the future, Robson saw one “problem” in the headlights for Wisconsin’s dairy industry? Wisconsin needs more milk, he said.

He said 12 years ago when he came to Wisconsin to head WMMB’s staff, things were “doom and gloom.” Wisconsin was fretting over cows and cheesemaking moving west and there was still a focus on commodity cheese production.

That was then. Wisconsin’s dairy industry has since retooled to become the darling of the consuming public, which is hungry for Wisconsin’s high-quality specialty cheeses. Today, it’s all about innovation and growth.

While Wisconsin used to be known for cheddar, mozzarella and other commodity-type cheese, the state’s cheese industry transformed itself so that 21 percent of its total cheese volume is now specialty cheese, which has lots of consumer appeal. In 2001, the state produced 234 million pounds of specialty cheese. By 2011, specialty cheese production had grown to an estimated 589 million pounds.

Robson noted that Wisconsin covers just over 54,100 square miles – less than 2 percent of the U.S. land mass – and 40 percent of this state is forested, another 20 percent occupied by housing and industry. Even so, Wisconsin produces a quarter of the nation’s cheese, thanks to over 11,000 dairy farms; some 1,200 licensed cheesemakers (Wisconsin is the only state to license its cheesemakers); over 200 cheese, milk and butter plants; and more than 400 milk transport firms.

Robson said if Wisconsin were a country, it would rank fourth in the world in cheese production at 2.63 billion pounds (2011 data), behind the U.S. at 10.6 billion pounds (U.S. total includes Wisconsin’s production), Germany at 4.65 billion, France at 4.26 billion. Wisconsin ranks higher than Italy (No. 5 in the world) with 2.58 billion pounds of cheese annually and No. 6 Netherlands at 1.65 billion.

Dairy makes a $26.5 billion impact annually on Wisconsin. Robson put it differently to drive home just how big an economic engine the dairy industry is: “It means Wisconsin’s dairy industry generates…$2.9 million every hour…$49,000 every minute.”

This state’s dairy infrastructure is the envy of virtually every other dairy region in the U.S., Robson continues of producer education organizations (like PDPW), the UW-Madison’s Center for Dairy Research (recognized as the top dairy research center in the world, he noted), the Wisconsin cheese Markers Association, Wisconsin Dairy Products Association, a highly supportive Department of Agriculture, Trade and Consumer Production and supplier that are “just down the road” and not “states or days away,” as they are for many producers in other states.

That strong dairy infrastructure includes 211 dairy processing plants, 126 cheese plant sites, 50 packagers/marketers (that don’t make cheese themselves but nevertheless sell familiar brands), 40-plus whey processing sites, 200-plus suppliers to the industry and an estimated 146,000 jobs. Zeroing in on whey, which not so long ago was something plants sought to dispose of, is today a highly profitable product to infuse more protein into human diets via protein beverages and protein bars. Robson noted that for some firms in the state, the “byproduct is the cheese,” and whey more profitable.

Robson said dairy farmers and processors have invested $2.65 billion in the past five years to modernize their facilities. Plans include investing another $2 billion in the next five years. He highlighted some of the most recent announcements of Wisconsin infrastructure re-investment:

• AMPI – $7.5 million upgrade, Jim Falls and Blair

• Specialty Cheese Co. – $200,000 expansion, Lowell

• Holland’s Family Cheese – $4 million new plant, Thorp

• Babcock Hall – $32 million expansion, UW-Madison campus

• BelGioioso – $15 million new plant, Freedom

• Emmi Roth – $43 million new plant, Platteville

• Klondike Cheese – $11 million yogurt facility, Monroe (to produce the increasing popular Greek-style yogurt, Robson noted)

• Agropur – $100 million expansion, Luxemburg.

The state dairy checkoff CEO said that the “Wisconsin dairy brand” on cheese is “strong.” When WMMB asked Americans what state or country they attach to cheese, 56 percent responded Wisconsin. Switzerland was second at 12 percent, following by France at 10 percent and Italy at 8 percent. No other region received more than 4 percent (only 3 percent of the pubic named California for its cheese production).

Over 200 “Wisconsin cheese” companies and retail partners use Wisconsin identification on their packaging. To carry the Wisconsin logo, a product must simply be made in a plant in Wisconsin, and origin of milk isn’t audited at all for the Wisconsin logo. Milk flows so freely in and out of the state that Robson said it’s impossible to set some sort of threshold or percentage of Wisconsin-produced milk in a product in order to carry the Wisconsin label. It’s very important the dairy industry maintain this state-brand recognition.

U.S. consumers recognize Wisconsin cheese quality, too. Wisconsin won over a third (37.8 percent) of all the awards at the 2012 World Championship Cheese Contest (or a total of 95 awards), showcased Robson.

Culver’s (i.e. frozen custard and “Butterburgers”) is a strong foodservice promotional partner for WMMB, Robson noted, mentioning that the Wisconsin-originated chain will soon open its 500th store nationally. Culver’s, he said, has restaurants as far away as Texas and Arizona and is now moving into Florida. In total, last year, WMMB’s cheese ads, social media and publicity efforts generated 1.3 consumer impressions (i.e. reached with the Wisconsin cheese message).

Wisconsin needs more milk. Last year’s estimated milk shortfall in Wisconsin (assuming 90 percent of the milk is used for cheese) was 3.1 billion pounds. Wisconsin used an estimated 30.3 billion pounds of milk in the production of cheese, while about 27.2 billion pounds of milk was produced last year, leaving a 3.1-billion pound shortfall. Last year, Wisconsin brought in just over that amount from other states (as far away as Texas), he added.

He told local government officials attending the ACE meeting last week (many of them also farmers) to keep dairy in mind as they consider economic development in their areas. Wisconsin’s dairy industry needs more milk. That means dairy farm startups and expansions for existing operations, as well as welcoming new and expanding dairy processing and other infrastructure components.

Robson foresees increasing innovation with dairy whey, other new product development and additional growth in cheese consumption as well as consumer demand for yogurt.

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