March 24, 2004

Cheese prices reach record levels...Vanilla prices to rise...Dairy Financials..."got milk?" goes international...Wells' Dairy to announce location soon...Charges filed in Fonterra scandal...Domino's reports 2003 results...Ralphs to close stores in California...New Product Scanner...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Cheese prices have reached all-time record levels, boosting milk prices for dairy producers. Prices for 500-pound blocks of cheddar cheese reached $2.00 a pound on the Chicago Mercantile Exchange March 24. Butter prices have also experienced sharp increases recently, climbing to $2.36 a pound. Wholesale butter prices haven't been this high since October 1998. Milk prices, once as low as $10 per hundredweight early last year, will likely climb to as much as $18 per hundredweight because of the increasing butter and cheese prices.

Last week Madagascar was ravaged by the worst cyclone in two decades. The storm decimated its vanilla crop - which accounts for about half of the world's market for "pure" vanilla. As a result, vanilla prices, which are already at an all-time high, are expected to climb even further. Another concern facing Madagascar's economy is that the high vanilla prices may entice some traders to try to sell sub-standard vanilla, causing damage to the country's reputation as being producer of some of the finest natural vanilla in the world. (Food Production Daily)

Dairy Financials: Baraboo, Wis.-based Foremost Farms USA earned net income of $7.6 million in 2003, up from $2.2 million the previous year. Sales were $1.2 billion, the same total as in 2002. Cheese accounted for 53.3 percent of the net sales followed by liquid and condensed milk products at 19.4 percent. Foremost Farms closed six facilities in 2003 to reduce costs. (Company report)...Russian dairy and juice producer Wimm-Bill-Dann Foods OJSC reported sales of $938.5 million in 2003, a jump of 13.8 percent over 2002. These totals pushed gross profits up 11.6 percent compared to 2002. Dairy sales totaled $662.3 million, a gain of 17.6 percent from the previous year. Wimm-Bill-Dann also announced it has purchased a controlling interest in Uzbekistan's largest dairy, Tashkentsut. (Company report; Russian Business Monitor)

New Zealand's Serious Fraud Office has leveled charges against seven people connected with the $33 million illegal export scandal surrounding Fonterra. The scandal, dubbed "Powdergate," alleges that 7,000 tons of milk powder was illegally exported between 2000 and 2001. Names of those charged are being withheld until midnight tonight. However, the dairy cooperative has already suspended one person who is charged with conspiracy to defraud. (The Southland Times, New Zealand)

CUSTOMER CLIPS

Ann Arbor, Mich.-based pizza chain Domino's Inc. increased sales 4.6 percent to $1.3 billion in 2003. Sales, including the company's more than 6,800 franchises, increased 5.8 percent to $4.2 billion last year. Domino's same-store sales increased 1.3 percent in 2003. (Detroit Free Press)

California's Ralphs Grocery Co., a unit of The Kroger Co., plans to shut 15 under-performing southern California stores within the next 60 days. The chain reports that the closures are not related to the recent grocery strikes there. The 600 impacted employees will be reassigned. (Reuters)

NEW PRODUCT SCANNER

The Food and Drug Administration (FDA) plans to set standards for foods advertised as being low- or reduced-carbohydrate. The move aims to protect consumers from products promoted as low-carb that have cut as little as one gram of carbohydrates per serving but still cost more. The FDA has banned the use of "low-carb" or "reduced-carb" until it defines those terms, which could be this summer. In the meantime, products continue to hit the market to capitalize on the low-carb trend. Portland, Ore.-based YoCream International announced it will launch Dannon YoCream Low-Carb Premium Soft Serve Frozen Yogurt. Also, St. Louis-based Hardee's restaurant chain has repackaged its "breakfast bowl" of eggs, meats and cheddar cheese into a low-carb offering. (Associated Press; Company reports)

Redwood Hill Farm, Sebastopol, Calif., recently introduced goat's milk yogurt. It is available in plain, apricot-mango, strawberry, blueberry and vanilla flavors and is sold in natural foods stores and some Whole Foods supermarkets. (Pittsburgh Post-Gazette)

Floresville, Texas-based Promised Land Dairy introduced a new flavor, Marvelous Mocha, to its coffee latte beverages. The flavor blends Mocha Java coffee and 2 percent milk. Promised Land claims its milk contains more calcium and protein than other brands. Marvelous Mocha is sold at Whole Foods supermarkets. (Company report)

IDFA NEWS

Registration, Exhibit Sales Open for 2004 Cultured Dairy Products Conference
Looking to help the cultured dairy industry manufacture and market innovative products, IDFA will hold the 2004 Cultured Dairy Products Conference on May 18-19 at the Hyatt Regency Minneapolis. This year's conference will include technical and market-oriented programming, plus an exhibition to showcase the new technologies, products and services available to manufacturers of yogurt, cottage cheese, cream cheese, sour cream and other cultured dairy products. For complete information, including registration and exhibiting information, click here. http://www.idfa.org/meetings/2004cultureddairy_agenda.cfm

ODDS-AND-ENDS

The Milk Development Council (MDC) in Great Britain has licensed the "got milk?" trademark from the California Milk Processor Board and will begin using it in the U.K. this month. The MDC, which is a promotional program for British dairy farmers, will research consumer attitudes toward the new effort in a few weeks. Meanwhile, stateside, the National Milk Mustache "got milk?" Campaign has signed on TV host Dr. Phil McGraw; his milk mustache ads begin appearing April 2... Wells' Dairy in LeMars, Iowa, will make a decision on the final location of its new $30 million corporate headquarters within 30 days. The dairy will remain in Iowa but a final location has not been determined. The state legislature fast-tracked a bill offering the dairy tax breaks to remain in Iowa; Wells' had been heavily courted by South Dakota and Nebraska. (Associated Press)...In passing: Wilbur John Becker, 89, former president of Hull Co-op Cheese Factory, died March 8 in his home in Colby, Wis. (Marshfield News)...Mario J. Ventura Sr., 85, owner of Mars Cheese Castle, Kenosha, Wis., died March 11 in Milwaukee. (Chicago Tribune)

STOCK MARKET TICKER

As of 3/23/04, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Last Week's D-brief
ConAgra Foods/CAG Dean Foods/DF Dreyer's/DRYR General Mills/GIS Groupe Danone/DA Hershey Foods/HSY Ingles Markets/IMKTA Kraft Foods/KFT Kroger/KR Ruddick Corp./RDK Safeway/SWY Saputo/SAP.TO SuperValu/SVU Unilever PLC/UL Weis Markets/WMK Wimm Bill Dann/WBD Winn-Dixie/WIN		26.03 35.07 78.95 46.35 32.75 82.43 10.90 32.16 16.19 19.18 20.02 31.70 28.33 39.57 32.85 18.15 08.08		+0.17 +0.30 -0.05 -0.06 +0.22 -0.05 +0.15 +0.05 -0.80 +0.73 -0.44 +0.15 +0.15 -0.38 +0.67 +0.00 +0.73		-0.41 +0.65 -0.05 +0.20 +0.05 -0.08 -0.02 -0.24 -0.30 +0.46 -0.33 +1.15 +0.82 -0.52 +0.37 +0.39 +1.37
Source: Yahoo! Finance

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