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    Report sets out dairy strategy for Northern Ireland post-quotas By Guy Montague-Jones, 13-Aug-2010

    A newly published study on the competitiveness of the Northern Irish dairy industry has called for a greater focus on efficiency and supply chain cooperation.

    The report, undertaken by Promar International, set out how the dairy sector in Northern Ireland should prepare for the EU abolition of milk quotas in 2015.

    Paul Vernon, Dairy UK Northern Ireland chairman Paul Vernon, said: “We know that there will be changes in the CAP over the next few years that will have a significant impact on our industry. This report is an attempt to identify these changes, and suggest strategies that will help ensure that we continue to have a profitable dairy industry in Northern Ireland.”

    Key objectives

    The report lays out two key objectives for the industry, including the fostering of greater revenue generating potential and the development of closer co-operation to increase competitiveness.

    To achieve these broad goals, it then goes on to present a set of strategies. Within the next decade, the authors say the industry should aim to have a Northern Irish milk pool of at least 2 billion litres a year.

    In the same period, the report says the energy costs of the supply chain need to be reduced by 25 per cent to make it competitive with other regions in the UK and other country competitors. It also urges the industry to focus more generally on improving economies of scale and the pursuit of planned and sustained R&D to improve products value and efficiency.

    On the subject of co-operation, the report calls for more interaction at processing level to ensure that milk is turned into products with the best returns from markets.

    Implementation group

    In addition, Dairy UK has agreed to set up an implementation group, responsible to the board of Dairy UK NI, which will identify and consider aspects of the report that have industry level implications.

    The Promar report said the group should evaluate models for pre-competitive research, and recommend a suitable approach for Northern Ireland.

    Funding for the study was provided by industry, the Department of Agriculture and Rural Development and Invest NI.

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    Fonterra gets embroiled in Chinese dairy scare By Guy Montague-Jones, 11-Aug-2010

    Fonterra has insisted that the New Zealand-based dairy is 100 per cent confident in its products as one of its Chinese customers faces an investigation into tainted milk claims.

    Chinese media reported earlier in the week that medical tests had reported excessive levels of hormones in three young girls who had consumed milk powder made by Synutra International.

    Parents of the children and doctors in the Hebei province had expressed concern that the milk powder caused the girls, aged four- to 15 months, to prematurely develop breasts.

    The Chinese health ministry has ordered an investigation into the claims. In the meantime, the manufacturer Synutra International has said that the milk powder in question was sourced from New Zealand.

    Fonterra statement

    Fonterra has responded to this, saying that it is indeed a supplier to the Chinese company but that it is entirely confident that its products are not tainted with growth hormones.

    In a statement released this morning, the company said: “Fonterra is a supplier of milk powder to Synutra International but we understand Synutra sources some milk locally and imports whey powder from Europe.

    “In New Zealand there are strict legislative controls on the use of Hormonal Growth Promotants (HGPs) – they are not allowed to be used on milking cows. The strict controls mean that it is not necessary for New Zealand milk or milk products to be routinely tested.”

    The dairy concluded that it “remains 100 per cent confident about the quality of its products.”

    Allegations that milk products were tainted with growth hormones is another blow for the Chinese dairy industry as it continues to fight melamine contamination scares.

    Chinese produced milk powder laced with the toxin killed six children and sickened an estimated 300,000 in 2008, virtually wiping out the Chinese dairy export market in its wake. Despite efforts by the authorities to improve food safety practices, two fresh cases of melamine tainted milk emerged in December.

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    Ireland sees potential for big milk export push By Guy Montague-Jones, 21-Jul-2010

    Ireland is planning a big increase in milk output once quotas are lifted in 2015 as the government places food at the heart of an export led growth strategy.

    At the launch of the Food Harvest 2020 strategy document, agriculture minister Brendan Smith said: “The ending of milk quotas in 2015 represents an exceptional opportunity to grow our milk output by an estimated 50 per cent.”

    Smith made the comment on the basis of the conclusions reached in the Food Harvest report, which had been drawn up by a committee of industry leaders led by Irish Dairy Board chief executive at Dr Sean Brady.

    Export-led growth model

    The Irish government has expressed a keen desire to pursue export-led growth and it sees the agri-food sector as a key pillar in this strategy.

    In a statement, the government said population growth and the abolition of EU milk quotas gives the Irish food sector significant opportunities for growth.

    Smith said the new Food Harvest report has shown that Ireland can grow its food and beverage exports over 40 per cent by 2020. And a move away from milk quotas at an EU level offers particularly strong opportunities for growth in the dairy sector.

    Dairy threats and opportunities

    Michael Barry, director of the Irish Dairy Industries Association, added that in a more competitive dairy marketplace Ireland stands to benefits from a good low-cost production base although he said consolidation is called for at the processing level.

    Adding a word of caution, Barry told DairyReporter.com that whether the tremendous growth opportunities for the Irish dairy sector are realised over the next ten years will depend to a great extent on outside factors.

    Another slump in global prices could jeopardise export growth and there are other uncertainties facing the industry like how to square the ambitious expansion goals with equally ambitious carbon emission targets. A lot may depend on how government policies are implemented.

    On this point, Barry was optimistic, saying there has been a realisation at government level of the importance of the food sector, and this is feeding into greater support for the industry.

    To help industry full its export potential, the government has set out two guiding principles: ‘act smart’ and ‘think green’.

    Brady expanded on this, saying: “Smart – that means being innovative, investing in research, focusing on what the consumer wants, applying lean manufacturing techniques and ensuring we have the scale at every level to maximise our cost competitiveness.

    “Secondly we must be green. We must build in a meaningful way on our green image to scientifically prove, and then market, the environmental sustainability of our food production systems.”

    A new high level group is to be set up by Smith to ensure effective, joined-up implementation of the strategy.

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    Arla appoints project director for 1bn litre ‘super dairy’ By Elaine Watson

    Arla Foods has appointed a project director to oversee the construction of its much-anticipated 1bn litre ‘super dairy’ in Greater London.

    //

    Jacob Wielandt Nielsen

    Jakob Wielandt Nielsen (pictured) – who has worked for Arla for more than 20 years – will be responsible for finalising the design of the dairy, appointing contractors and overseeing its construction and installation.

    His most recent position was production and technology development director in the global categories and operations business group at Arla’s head office in Aarhus, Denmark.

    While the new dairy will clearly shake up the market when it becomes operational in 2012, most analysts predict it will not add significant net capacity. Arla is widely expected to close plants in Ashby, Hatfield Peverel and Oakthorpe as it comes on-stream.

    “The headline 1bn-litre figure is not necessarily as bad as it seems,” Shore Capital analyst Clive Black told FoodManufacture.co.uk in May. “We believe that Arla will close three plants into the new one.”

    In November, Arla Foods UK chief executive Peter Lauritzen said detailed plans would be presented to the board in “early 2010” although he has yet to update the market on the precise location of the site or the detailed timetable for its construction.

    However, the planning process was “well underway”, Arla insisted.

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    Ireland sees potential for big milk export push By Guy Montague-Jones

    Ireland is planning a big increase in milk output once quotas are lifted in 2015 as the government places food at the heart of an export led growth strategy.

    At the launch of the Food Harvest 2020 strategy document, agriculture minister Brendan Smith said: “The ending of milk quotas in 2015 represents an exceptional opportunity to grow our milk output by an estimated 50 per cent.”

    Smith made the comment on the basis of the conclusions reached in the Food Harvest report, which had been drawn up by a committee of industry leaders led by Irish Dairy Board chief executive at Dr Sean Brady.

    Export-led growth model

    The Irish government has expressed a keen desire to pursue export-led growth and it sees the agri-food sector as a key pillar in this strategy.

    In a statement, the government said population growth and the abolition of EU milk quotas gives the Irish food sector significant opportunities for growth.

    Smith said the new Food Harvest report has shown that Ireland can grow its food and beverage exports over 40 per cent by 2020. And a move away from milk quotas at an EU level offers particularly strong opportunities for growth in the dairy sector.

    Dairy threats and opportunities

    Michael Barry, director of the Irish Dairy Industries Association, added that in a more competitive dairy marketplace Ireland stands to benefits from a good low-cost production base although he said consolidation is called for at the processing level.

    Adding a word of caution, Barry told DairyReporter.com that whether the tremendous growth opportunities for the Irish dairy sector are realised over the next ten years will depend to a great extent on outside factors.

    Another slump in global prices could jeopardise export growth and there are other uncertainties facing the industry like how to square the ambitious expansion goals with equally ambitious carbon emission targets. A lot may depend on how government policies are implemented.

    On this point, Barry was optimistic, saying there has been a realisation at government level of the importance of the food sector, and this is feeding into greater support for the industry.

    To help industry full its export potential, the government has set out two guiding principles: ‘act smart’ and ‘think green’.

    Brady expanded on this, saying: “Smart – that means being innovative, investing in research, focusing on what the consumer wants, applying lean manufacturing techniques and ensuring we have the scale at every level to maximise our cost competitiveness.

    “Secondly we must be green. We must build in a meaningful way on our green image to scientifically prove, and then market, the environmental sustainability of our food production systems.”

    A new high level group is to be set up by Smith to ensure effective, joined-up implementation of the strategy.

    Read more

    New EU regulation sets out rules for dairy imports By Guy Montague-Jones, 16-Jul-2010

    The Commission has published a new regulation covering health and certification conditions for the introduction of dairy products into the EU.

    Regulation No 605/2010, published in the Official Journal of the European Union, replaces the Commission Decision 2004/438/EC, which was adopted in April 2004.

    The new regulation comes into force on 1 August although to avoid trade disruption the Commission said the use of health certificates issued in accordance with Decision 2004/438/EC should be authorised for a transitional period until 30 November.

    Areas covered by the regulation include treatment conditions, health certificates as well as transit and storage conditions.

    It lays down specific conditions for the heat treatment of imported products, giving different requirements for different countries. A stricter set of sterlisation requirements is set out, for example, for countries at risk of foot-and-mouth disease.

    A full list is provided in the annex of the countries that are permitted to export to the EU, and each is classified into three categories to establish the heat treatment requirements.

    The new Regulation covers not only imported dairy products but also those that are passing through the EU on their way to another destination. Specific transit and storage conditions are laid out for such consignments.

    To have a copy of the Regulation click here.

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    China reduces minimum protein levels to combat melamine By Guy Montague-Jones, 15-Jul-2010

    China has lowered minimum protein levels in raw milk in the country’s latest effort to stamp out the use of melamine in the dairy industry.

    Following the revelation last week that more melamine tainted dairy materials had been seized by Chinese authorities, the country has gone on the offensive again to try and prevent any repeat of 2008 when contaminated products left 6 people dead and made hundreds of thousands ill.

    Previously China had tried to tighten food safety laws to discourage companies from using melamine but now the country is loosening quality rules in pursuit of the same goal.

    The logic is that the new rules on protein will remove the reason for adding melamine in the first place.

    The high nitrogen content in the toxic chemical makes protein levels appear higher than they really are, potentially enabling unscrupulous producers to pass protein tests.

    Lower minimum

    Reuters said Chinese health officials have therefore decided to lower minimum protein levels for raw milk from 2.95 per cent to 2.8 per cent. Officials said the new standard is more realistic given how the quality of the feed commonly used in China can lead to low protein levels.

    “The 2.8 percent level is based on a lot of data collected after an investigation by the agriculture ministry and is most suitable for China’s current economic development,” said Wang Zhutian, deputy director of the National Institute of Nutrition and Food Safety at the China Center for Disease Control.

    News of the reform to protein testing comes a week after around 64 tonnes of raw dairy materials were seized from a plant in the Qinghai Province, in northwest China. Much of the contaminated product has been traced to the Hebei Province, which was the source of the toxic infant formula products from the 2008 scare.

    Authorities have therefore suggested that traders may have bought contaminated materials that should have been destroyed after 2008, with the intention of processing and selling them on.

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    New egg replacer could overcome labelling challenges By Jane Byrne , 09-Jul-2010

    A wheat-based egg substitute can replace up to 50 per cent of eggs in sweet bakery products such as eggs, muffins and cupcakes and requires no changes to a product’s labelling, claims UK supplier Ulrick & Short

    Adrian Short, director of the clean label ingredients manufacturer, said that its egg replacer, Ovaparox, is produced from wheat fractions in combination with proteins that the supplier had previously used in products targeted at the meat sector.

    The way in which the wheat-based egg substitute is formed allows us to call it wheat flour, and this, of course, means there are no labelling implications as this ingredient is already declared on baked goods,” he said.

    Ovaparox, continued Short, has a shelf life of 18 months from date of manufacturer and allows bakers, therefore, to hedge their bets against fluctuating egg prices: “They can keep the substitute in storage and simply switch to it in times of sharp increases in the cost of that commodity,” he explained.

    Ovaparox can replace up to 50 per cent of egg in cakes without compromising on quality, taste, bake volume or shelf-life, said the supplier.

    The product is sold in powder form, which is then combined with water to produce the equivalent of liquid egg but this does not impact on shelf life, claims Short, as Ovaparox wraps and binds the water.

    Testing

    He told BakeryandSnacks.com that texture and water characteristics of sponges using the egg replacer were independently tested by technologists based at Sheffield Halham University, with their results showing the end products had properties equivalent to those based on 100 per cent egg based recipes.

    Furthermore, said Short, trials with the supplier’s lead bakery customers based in the UK, Holland and Belgium demonstrated that the egg replacer works on an industrial scale with one manufacturer declaring it to be easier to use than egg in some recipes.

    He said that that Ovaparox can achieve savings of up to 30 per cent for bakery processors.

    Egg supply

    Egg prices have been going up for about 12 months with increases on intensive liquid egg in the order of 10 per cent.

    And food manufacturers are predicting further price hikes and availability worries as European egg producers struggle to get to grips with changing welfare legislation, with new rules banning the use of traditional battery cages to produce eggs, scheduled to come into force in January 2012.

    European Egg Processors’ Association (EEPA) secretary general Filiep Van Bosstraeten told our sister publication Food Manufacturer that it would probably take several years for European egg farmers to make the necessary investments to meet the new welfare rules given the difficulty of accessing finance in the current economic climate: “Finance is not easily available to egg farmers and this is slowing down action in many countries.”

    He added: “Our members are facing significant difficulties in sourcing eggs for processing. Our industry uses 25-30 per cent of total EU egg production to supply the food industry with high-quality egg products needed as ingredients for a wide range of food products.”

    The problem was being further exacerbated by increased imports from Germany, where the welfare legislation came into force earlier this year, he said: “In Germany, they imposed this regulation in 2010 and this has resulted in about 20% less production. Germany was already the largest importer of eggs in the EU and its demand for imports is now much higher.”

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    All bids for SMP intervention stocks rejected again Post a commentBy Guy Montague-Jones, 09-Jul-2010

    EU farming lobby Copa-Cogeca has called on the Commission to exercise caution in managing EU dairy stocks, as the struggle to sell off intervention stocks continues.

    Results of the third tender of the intervention sales of butter and skimmed milk powder (SMP) came out today, and once again the Commission was unable to shift any SMP.

    In a statement the Commission said: “All bids for SMP (ranging from 185 to 215 €/100 kg) were rejected (unanimous vote) because the prices were both lower than the EU average weighted price for SMP for food (232 €/100 kg) and for feed purposes (216.5 €/100 kg).”

    However, the management committee agreed on the sale of a further 210 tonnes of butter at a price of 361 €/100 kg, from cold stores in Eastern Europe. This leaves 1,545 tonnes of butter and 79,553 tonnes of SMP available for the next tender on 20 July.

    There is currently a shortage in the supply of butter giving the Commission the opportunity to sell off stocks at a good price without risking market disruption.

    Finely balanced SMP market

    As for SMP, the feeling is that the market is quite finely balanced and that the Commission may be afraid that selling stocks could cause prices to drop, especially as the Southern Hemisphere moves into its autumn flush.

    Just before the latest tender, Copa-Cogeca, the EU farming lobby, sent out this warning: “We reminded the EU Commission today that they must continue to exercise caution in managing EU dairy stocks, in order to minimise market disruption and contribute to a more stable market situation.”

    It went on to say: “EU buyers need to pay market prices for EU intervention products which contribute to a sustained increase in milk prices for farmers. The current market situation fully justifies further milk prices increases in the coming months, to enable farmers to pay a few of their many outstanding bills.”

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    China uncovers more melamine tainted dairy materials By Guy Montague-Jones, 09-Jul-2010

    More melamine tainted dairy materials have been seized by Chinese food safety authorities, raising suspicions that it may be from the same batch that should have been destroyed following the 2008 scandal.

    Around 64 tonnes of raw dairy materials have been seized from a plant in the Qinghai Province, in northwest China, according to news reports.

    Same origin

    Much of the contaminated product has been traced to the Hebei Province, which was the source of the toxic infant formula products from the 2008 scare that resulted in 300,000 cases of illness and six deaths.

    Authorities have therefore suggested that traders may have bought contaminated materials that should have been destroyed after 2008, with the intention of processing and selling them on.

    The discovery adds to concerns about the effectiveness of legislation on food safety that came into effect last July, following the 2008 scandal.

    Industry impact

    After fresh melamine cases emerged at the beginning of the year, Leatherhead market intelligence manager Chris Brockman said: “China has tried to make a big deal about food safety changes but clearly the processes in place are not as rigid or structured as they need to be.”

    The 2008 scandal almost wiped out the Chinese dairy export industry and continued scares are likely to delay its recovery. At the end of June, the Indian government decided to extend its ban on all imports of milk or milk products from China.

    No such comprehensive ban exists in Europe, but a spokesperson for Dairy UK said the European food industry imports very little dairy material from China and only does so from reliable sources.

    Regulators across the globe have put in place systems to try and prevent melamine contaminated products from entering the supply chain. Only this week at the latest session of the Codex Alimentarius Commission, maximum limits for melamine in food were set. By fixing Codex limits, the Commission hopes to make it easier for governments to identify deliberate contamination.

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