Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60751 

meeting also will allow attendees an 

opportunity to provide comments to 

FDA about the implications of the 

available research for further consumer 

studies that may be needed or that are 

already underway by other parties to 

assess consumer understanding of 

health claims and the effect of health 

claims on consumer perceptions and 

behaviors. FDA is also interested in 

hearing from commenters their views 

regarding schemes or signals, other than 

those already studied, that may, 

consistent with the first amendment, 

effectively communicate to consumers 

the level of scientific support for health 

claims, without leading consumers to 

make erroneous inferences about the 

claimed substance-disease relationship 

and/or other product characteristics. 

FDA anticipates that this meeting will 

also include comments from attendees 

about alternative research methods to 

empirically assess consumer 

understanding of health claims and the 

effect of health claims on consumer 

perceptions and behaviors. FDA intends 

to consider all pertinent information 

from this public meeting in any 

rulemaking related to alternatives for 

regulating qualified health claims in the 

labeling of conventional human foods 

and dietary supplements (see 68 FR 

66040, November 25, 2003). 

III. Registration 

Please submit your registration 

information (including name, title, firm 

name (if applicable), address, telephone, 

FAX (if available), by November 10, 

2005. We encourage you to register 

online at http://www.cfsan.fda.gov/ 

~comm/register.html or by FAX to 

Marion V. Allen at 301–436–2605. 

Space is limited and registration will be 

closed when maximum seating capacity 

is reached. Please also specify whether 

you need onsite parking when you 

register. We also will accept 

registrations onsite, if space is available. 

If you need special accommodations 

due to a disability, please contact 

Marion V. Allen (see FOR FURTHER

INFORMATION CONTACT) no later than 

November 10, 2005. 

If you wish to make a presentation, 

indicate your request when registering 

and submit the following information by 

November 10, 2005: (1) A brief written 

statement about the general nature of 

the views you wish to present and (2) 

the names of any copresenters who must 

also register to attend. The amount of 

time allowed for each oral presentation 

at the public meeting will be limited 

(e.g., 5 minutes each), and will depend 

in part upon the number of persons who 

request to speak. Individuals and 

organizations that do not preregister to 

make a presentation may be given an 

opportunity to speak if time permits. 

Persons preregistered or wishing to 

register onsite should check in between 

7:30 and 8:30 a.m. Because the meeting 

will be held in a Federal building, 

meeting participants must present photo 

identification and plan adequate time to 

pass through the security system. 

IV. Comments 

In addition to attending or presenting 

oral comments at the meeting, interested 

persons may submit to the Division of 

Dockets Management (see ADDRESSES) 

written or electronic comments related 

to the focus of this public meeting. All 

relevant data and information should be 

submitted with the written comments. 

Submit a single copy of electronic 

comments or two paper copies of any 

mailed comments, except that 

individuals may submit one paper copy. 

Comments are to be identified with the 

docket number found in brackets in the 

heading of this document. Received 

comments may be seen in the Division 

of Dockets Management between 9 a.m. 

and 4 p.m., Monday through Friday. 

V. Meeting Transcript 

A transcript will be made of the 

meeting’s proceedings. You may request 

a copy in writing from FDA’s Freedom 

of Information Office (HFI–35), Food 

and Drug Administration, 5600 Fishers 

Lane, rm. 12A–16, Rockville, MD 20857, 

approximately 30 working days after the 

public meeting at a cost of 10 cents per 

page. The transcript of public meeting 

and all comments submitted will be 

available for public examination at the 

Division of Dockets Management (see 

ADDRESSES) between 9 a.m. and 4 p.m., 

Monday through Friday, as well as on 

the FDA Web site at http://www.fda.gov/ 

ohrms/dockets/default.htm. 

VI. References 

The following references have been 

placed on display in the Division of 

Dockets Management (see ADDRESSESS) 

and may be viewed between 9 a.m. and 

4 p.m., Monday through Friday. (FDA 

has verified the Web site address, but 

we are not responsible for subsequent 

changes to the Web site after this 

document publishes in the Federal 

Register.) 

1. Derby, B.M. and A.S. Levy, ‘‘Working 

Paper: Effects of Strength of Science 

Disclaimers on the Communication Impact of 

Health Claims,’’ Working Paper No. 1, FDA, 

Center for Food Safety and Applied Nutrition 

(http://www.fda.gov/OHRMS/dockets/ 

dockets/03N0496/03N–0496–rpt0001.pdf), 

September 2005. 

2. France, K.R. and P.F. Bone, ‘‘Policy 

Maker’s Paradigms and Evidence from 

Consumer Interpretations of Dietary 

Supplement Labels,’’ Journal of Consumer 

Affairs, Volume 39, No. 1, Copyright 2005 by 

the American Council on Consumer Interests, 

2005. 

3. Qualified Health Claims Consumer 

Research Project Executive Summary, 

International Food Information Council 

Foundation (http://www.ific.org/research/ 

qualhealthclaimsres.cfm), March 2005. 

Dated: October 14, 2005. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. 05–20969 Filed 10–17–05; 10:49 

am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 133 

[Docket No. 2000P–0586 (formerly Docket 

No. 00P–0586)] 

Cheeses and Related Cheese 

Products; Proposal to Permit the Use 

of Ultrafiltered Milk 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Proposed rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is proposing to 

amend its regulations to provide for the 

use of fluid ultrafiltered milk (UF) in the 

manufacture of standardized cheeses 

and related cheese products. This action 

responds principally to two citizen 

petitions: One submitted by the 

American Dairy Products Institute 

(ADPI) and another submitted jointly by 

the National Cheese Institute (NCI), the 

Grocery Manufacturers of America, Inc. 

(GMA), and the National Food 

Processors Association (NFPA). FDA 

tentatively concludes that this action 

will promote honesty and fair dealing in 

the interest of consumers and, to the 

extent practicable, will achieve 

consistency with existing international 

standards of identity for cheeses and 

related cheese products. 

DATES: Submit comments by January 17, 

2006. 

ADDRESSES: You may submit comments, 

identified by Docket No. 2000P–0586, 

by any of the following methods: 

Electronic Submissions 

Submit electronic comments in the 

following ways: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web site: http:// 

www.fda.gov/dockets/ecomments. 

60752 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

Follow the instructions for submitting 

comments on the agency Web site. 

Written Submissions 

Submit written submissions in the 

following ways: 

• FAX: 301–827–6870. 

• Mail/Hand delivery/Courier [For 

paper, disk, or CD-ROM submissions]: 

Division of Dockets Management (HFA–

305), Food and Drug Administration, 

5630 Fishers Lane, rm. 1061, Rockville, 

MD 20852. 

To ensure more timely processing of 

comments, FDA is no longer accepting 

comments submitted to the agency by email. FDA encourages you to continue 

to submit electronic comments by using 

the Federal eRulemaking Portal or the 

agency Web site, as described in the 

Electronic Submissions portion of this 

paragraph. 

Instructions: All submissions received 

must include the agency name and 

Docket Nos. or Regulatory Information 

Number (RIN) for this rulemaking. All 

comments received may be posted 

without change to http://www.fda.gov/ 

ohrms/dockets/default.htm, including 

any personal information provided. For 

detailed instructions on submitting 

comments and additional information 

on the rulemaking process, see the 

‘‘Comments’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.fda.gov/ohrms/dockets/ 

default.htm and insert the docket 

number(s), found in brackets in the 

heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Division of Dockets 

Management, 5630 Fishers Lane, rm. 

1061, Rockville, MD 20852. 

FOR FURTHER INFORMATION CONTACT: Ritu 

Nalubola, Center for Food Safety and 

Applied Nutrition (HFS–820), Food and 

Drug Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, 301–

436–2371. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. Petitions and Grounds 

1. The 1999 ADPI Petition 

2. The 2000 NCI/GMA/NFPA Joint 

Petition 

B. The Government Accountability 

Office (GAO) Report 

C. Comments to Petitions 

D. Forms of Milk Permitted as Basic 

Dairy Ingredients 

E. Temporary Marketing Permit (TMP) 

II. The Proposal 

A. Legal Authority/Statutory Directive 

B. Options Considered 

C. Proposed Amendments 

III. Executive Order 12866: Cost Benefit 

Analysis 

A. Need for Regulation 

B. Background and Current Industry 

Practices 

C. Regulatory Options 

D. Summary of Costs and Benefits 

IV. Small Entity Analysis 

V. Unfunded Mandates 

VI. Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA) Major Rule 

VII. Federalism 

VIII. Environmental Impact 

IX. Paperwork Reduction Act of 1995 

X. Comments 

XI. References 

I. Background 

The standards of identity for cheeses 

and related cheese products are 

specified in part 133 (21 CFR 133). The 

general provisions within part 133, in 

part, define ‘‘milk’’ and ‘‘nonfat milk’’

that may be used in the manufacture of 

cheeses and related cheese products. 

The definitions for ‘‘milk’’ and ‘‘nonfat 

milk’’ in § 133.3(a) and (b), respectively, 

list different forms of milk and nonfat 

milk, including concentrated, 

reconstituted, and dried forms, that may 

be used in the making of cheeses and 

related cheese products. However, fluid 

or dried filtered forms of milk obtained 

through mechanical filtration of milk or 

nonfat milk are not included within 

these definitions. Therefore, while 

current regulations permit the use of 

concentrated, reconstituted, and dried 

forms of milk and nonfat milk as basic 

dairy ingredients, they do not provide 

for the use of fluid or dried filtered milk 

or fluid or dried filtered nonfat milk as 

basic dairy ingredients in standardized 

cheeses and related cheese products. 

Mechanical filtration technologies 

available for milk processing include 

microfiltration, ultrafiltration, 

nanofiltration, and reverse osmosis 

(Refs. 1 and 2). In all of these filtration 

methods, milk is passed over a series of 

semipermeable membranes with varying 

pore sizes. The portion of milk that 

passes through the membranes is 

referred to as the ‘‘permeate,’’ and the 

portion that does not pass through the 

membranes is referred to as the 

‘‘retentate.’’ While the application of 

hydraulic pressure is the driving force 

for these membrane separation 

processes, the nature of the membrane 

itself (as well as the orientation of the 

components) controls which 

components of milk are separated into 

the permeate and which components are 

retained in the retentate during these 

filtration processes (Refs. 1 and 2). In a 

reverse osmosis (RO) filtration, the 

membrane pore size is such that all 

components other than water in the 

milk are retained. Nanofiltration uses 

membranes with pores that are larger 

than RO membranes, but smaller than 

those used in ultrafiltration. In milk 

processing, nanofiltration can be used to 

remove water as well as some soluble 

salts, yet retain all other components of 

milk (Refs. 1 and 2). Ultrafiltration 

retains macromolecules and particles 

larger than about 0.001–0.02 

micrometers, while microfiltration is 

designed to retain particles between 

about 0.10 micrometers to 5 

micrometers (Ref. 1). While there is 

some overlap in membrane pore sizes 

and operating pressures used in 

ultrafiltration and microfiltration (Refs. 

1 and 3), in dairy processing, 

ultrafiltration is typically used to retain 

all protein components of milk, 

including casein and whey proteins, 

while some of the lactose, minerals, and 

water soluble vitamins present in milk 

are lost along with water. 

Microfiltration, on the other hand, is 

primarily used for fat separation, 

bacterial removal, and casein 

concentration, with a resulting loss of 

whey proteins, lactose, minerals, and 

water soluble vitamins along with water 

(Refs. 1, 2, and 3). 

A. Petitions and Grounds 

FDA received two petitions requesting 

amendments to existing regulations to 

permit the use of filtered milk in the 

manufacture of standardized cheeses 

and related cheese products. 

1. The 1999 ADPI Petition 

The ADPI filed a citizen petition (CP) 

on December 2, 1999 (Docket No. 

1999P–5198 (formerly Docket No. 99P–

5198); hereafter referred to as the ADPI 

petition) requesting that the FDA amend 

the definition of ‘‘milk,’’ as provided in 

§ 133.3(a), to include fluid UF milk, 

thereby permitting the use of fluid UF 

milk in the manufacture of standardized 

cheeses and related cheese products 

specified in part 133. ADPI requested 

that § 133.3(a) be amended to add that 

‘‘milk may be subjected to an 

ultrafiltration process that results in a 

fluid UF milk for use in the manufacture 

of cheese.’’ In its petition, ADPI stated 

that the requested amendment would 

improve efficiencies in cheese 

manufacturing and result in benefits to 

consumers without alteration of cheese 

composition, characteristics, or flavor. 

FDA reviewed the ADPI petition and 

determined that it did not present 

reasonable grounds in accordance with 

21 CFR 10.30 to support the requested 

amendment and, therefore, FDA closed 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60753 

1The GAO changed its name from the ‘‘General 

Accounting Office’’ in 2004. 

this petition. However, because the 

issues raised in the ADPI petition are 

clearly covered under a second citizen 

petition (Docket No. 2000P–0586 

(formerly Docket No. 00P–0586)/CP2, 

discussed in section I.A.2 of this 

document), FDA converted the ADPI 

petition into a comment to this second 

petition. ADPI was informed of FDA’s 

action in a letter dated February 26, 

2003. 

2. The 2000 NCI/GMA/NFPA Joint 

Petition 

On June 13, 2000, FDA received a 

joint petition (Docket No. 2000P–0586 

(formerly Docket No. 00P–0586)/CP2; 

hereafter referred to as the NCI petition) 

from the NCI, the GMA, and the NFPA 

requesting an amendment of § 133.3 to 

include ‘‘filtered milk’’ in the definition 

of ‘‘milk’’ and ‘‘filtered skim milk’’ in 

the definition of ‘‘nonfat milk’’ for use 

in standardized cheeses and related 

cheese products. The NCI petition also 

requested that a new subsection be 

added within § 133.3 to define ‘‘filtered 

milk’’ as: * * * the liquid milk product produced 

by a physical separation technique in which 

raw or pasteurized milk is passed over one 

or more semipermeable membranes to 

partially remove the water phase and its 

constituents, including water, lactose, whey 

proteins, and minerals. Either before or after 

filtration, fat may be separated to produce 

filtered skim milk. After filtration, water may 

be partially removed by means of evaporation 

to produce more concentrated forms of 

filtered milk.’’

Based on this definition, FDA believes 

that the petitioners requested the agency 

to permit not only ultrafiltration (which 

typically does not result in a loss of 

whey proteins), but also other filtration 

techniques such as microfiltration and 

subsequent treatment to further 

concentrate the filtered product, in the 

manufacture of standardized cheeses 

and related cheese products. The 

petitioners withdrew a previous joint 

petition (Docket No. 2000P–0586 

(formerly Docket No. 00P–0586)/CP1) 

that requested amendments to permit 

both fluid and dried forms of filtered 

milk in the manufacture of standardized 

cheeses and related cheese products. 

In support of their requested 

amendments, the NCI, GMA, and NFPA 

(hereafter referred to as the petitioners) 

argued that the amendments requested 

in the NCI petition are consistent with 

established FDA policy. Some cheese 

standards, in addition to specifying a 

specific procedure for preparing the 

food, currently provide for the use of 

‘‘any other procedure which produces a 

finished cheese having the same 

physical and chemical properties’’ (see 

e.g., standard of identity for cheddar 

cheese in § 133.113). The petitioners 

maintained that these ‘‘alternate make 

procedure’’ provisions historically have 

provided the legal basis for the use of 

milk filtration and the resulting filtered 

milk in cheese making, regardless of 

whether the filtration occurs in the same 

plant as other cheese-making 

procedures or in a centralized filtration 

facility. The petitioners believe that 

FDA has previously acknowledged that 

the use of filtered milk to manufacture 

cheddar cheese is covered by the 

alternate make procedure provision of 

the standard of identity for cheddar 

cheese. Furthermore, the petitioners 

maintained that the requested 

amendments are fully consistent with 

the basis and rationale for amendments 

that FDA previously made to expand the 

scope of the forms of milk recognized as 

‘‘milk’’ for cheese making. The 

petitioners stated that FDA authorized 

the use of certain forms of milk because 

these forms of milk may be used in 

place of fluid milk to produce a finished 

cheese that is equivalent physically and 

chemically to the traditional cheese 

made using fluid milk. 

In addition, the petitioners stated that 

mechanical filtration has been used in 

cheese manufacturing in the United 

States for the past 20 years, and 

contended that the extensive use of 

filtration technologies, under the 

existing ‘‘alternate make procedure’’

provisions within some standards of 

identity for cheeses, has produced 

significant benefits by improving 

product consistency and yields and 

manufacturing efficiency; lowering milk 

refrigeration, hauling and whey disposal 

costs; expanding milk sourcing options; 

and enabling cheese makers to respond 

more effectively to regional disruptions 

in the fluid milk supply. The petitioners 

also stated that because mechanical 

filtration removes only those 

constituents that are removed by loss of 

whey in traditional cheese making, it 

functions simply to rearrange the steps 

in the cheese making process to permit 

the constituents to be removed earlier. 

The petitioners further contended that 

the long history and widespread use of 

filtration technology under the alternate 

make procedure provisions have clearly 

established the equivalence of cheese 

made from filtered milk and cheese 

made from other forms of milk 

explicitly permitted under § 133.3. 

The petitioners also argued that 

cheese made with filtered milk is 

nutritionally equivalent to traditional 

cheese because mechanical filtration of 

milk using membranes with pore sizes 

between 0.0001 and 0.20 microns 

removes the water phase constituents 

(water, soluble protein, lactose, 

minerals, and some water soluble 

vitamins) that otherwise would be 

removed in the traditional cheesemaking process as whey. In fact, the 

petitioners argued, with respect to 

filtered milk in cheese, the retentate 

may actually contain slightly greater 

concentrations of valuable constituents 

(e.g., whey proteins) than the cheese 

curd that remains after loss of whey in 

traditional cheese making. The 

petitioners provided analytical data 

related to cheddar cheese to support 

their assertion that cheese made with 

filtered milk is not ‘‘nutritionally 

inferior,’’ as that term is defined in 21 

CFR 101.3(e)(4), to cheese made using 

traditional procedures. 

Finally, the petitioners argued that 

their proposed amendments are 

consistent with the Codex Alimentarius 

Commission (Codex) standard for 

cheese. The Codex standard for cheese 

(Standard A–6–1978, revised in January 

1999) provides for the use of ‘‘milk and/ 

or products obtained from milk.’’ The 

petitioners stated that the Codex 

standard encompasses mechanical 

filtration technology, provided the 

finished cheese meets applicable 

requirements for physical and chemical 

properties, which would include 

nutritional and organoleptic properties. 

B. The Government Accountability 

Office (GAO)1 Report 

The fiscal year (FY) 2000 FDA 

appropriations bill from the U.S. Senate 

requested the Comptroller General to 

conduct a study to determine the 

quantity and end use of UF milk 

imported into the United States and to 

submit a report describing the results of 

the study to Congress. In March 2001, 

GAO reported (hereafter referred to as 

‘‘the GAO report’’ (Ref. 4)), in part, that: 

There are no specific data on UF milk 

imports because UF milk is classified 

under the broad category of ‘‘milk 

protein concentrates’’ (MPC) by the U.S. 

Customs Service. GAO reported that 

imports in the broad category of MPC 

rose dramatically between 1990 and 

1999 from about 800 to 45,000 metric 

tons, the primary reasons being the 

difference between U.S. and 

international prices of milk protein, 

especially nonfat dry milk (NFDM), and 

the market growth of nutritional 

supplements and other novel foods 

using MPC. GAO also reported that dry 

MPC imports are used in several foods 

other than cheeses, such as frozen 

desserts, bakery products, and sports 

and other nutritional supplement 

products. Some in the industry note that 

60754 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

economic disincentives have prevented 

domestic production of dry MPC. GAO 

noted that there are limited data on 

domestic production and use of fluid 

UF milk in cheese making but found 

that 22 dairy plants produce fluid UF 

milk used to make cheese within the 

plant, while 4 dairy farms in New 

Mexico and Texas produce fluid UF 

milk for transport to cheese plants in the 

Midwest. GAO also found that FDA and 

State contract inspectors reported no 

violations related to the use of imported 

UF milk or MPC in standardized cheese 

in FY 1999, whereas in FY 2000, two 

plants in Vermont were issued warning 

letters for using imported MPC in 

standardized cheese, and the plants 

subsequently discontinued this use. 

C. Comments to Petitions 

FDA received a total of 58 letters and 

e-mails, each containing one or more 

comments, to the ADPI (subsequently 

converted to a comment to the NCI 

petition) and the NCI petitions. A large 

portion of the letters and e-mails 

received were from individual dairy 

farmers, organizations representing 

dairy farmers, and consumers. Nearly 

half of the comments opposed both the 

ADPI and NCI petitions, while the other 

half opposed the NCI petition alone 

without commenting on the ADPI 

petition. A few comments expressed 

support for the ADPI petition, but none 

of the comments supported the NCI 

petition. The primary concern expressed 

by the comments opposing either of the 

petitions appeared to be the potential 

economic impact of the use of imported 

milk ingredients, particularly dried 

forms of filtered milk or MPC, on U.S. 

dairy farmers. Some comments also 

expressed concern about the use of 

imported milk ingredients on the 

quality and safety of cheese. 

The organizations representing dairy 

farmers expressed strong opposition to 

both petitions and stated that the use of 

filtered milk would undoubtedly lower 

the quality of cheese products and 

greatly increase the flood of imports of 

subsidized MPC and filtered milk with 

the potential to jeopardize the safety of 

cheese products. They stated that the 

filtration process removes calcium and 

reduces the lactose content of milk and 

results in cheese that does not have the 

fullness of flavor of traditional cheese. 

They further maintained that changing 

the definition of milk to allow the use 

of liquid filtered milk would ultimately 

result in the use of dry filtered MPC 

and, therefore, they reiterated that even 

if only liquid filtered milk were 

allowed, while disallowing dry MPC, 

they would still be concerned about 

product quality degradation. In 

addition, they stated that changing the 

definition of milk could result in 

increased imports of filtered milk from 

Canada, displacing U.S. milk and 

causing a surplus. However, these 

comments did not provide any factual 

data or information that would lead 

FDA to believe that the use of fluid UF 

milk would impact the safety or quality 

of the product. 

Another comment, from an 

organization representing milk 

producers, unconditionally endorsed 

the ADPI petition, but strongly opposed 

the NCI petition, stating that the 

commenter does not support any change 

to § 133.3(a) that alters which products 

are currently defined as ‘‘milk.’’ This 

comment stated that the language in the 

NCI petition is sufficiently vague that it 

may be subject to interpretation such 

that it subsequently would allow dried 

forms of UF milk. The comment also 

stated that permitting only liquid forms 

of UF milk has general widespread 

support among different stakeholders, 

and argued that it is essential to 

establish a definition of ‘‘liquid’’ UF 

milk to mitigate potential 

misinterpretations regarding the use of 

dried MPC and provide clarity for 

enforcement. In this regard, the 

comment suggested that a limitation of 

45 percent total solids be included in 

the definition of ‘‘liquid ultrafiltered 

milk,’’ because a requirement of a 

maximum of 45 percent total solids 

would allow for the use of UF 

technology while preserving the liquid 

state of the ultrafiltered product and 

preventing subsequent treatment for 

concentration beyond ultrafiltration. 

D. Forms of Milk Permitted as Basic 

Dairy Ingredients 

The definitions of ‘‘milk’’ and ‘‘nonfat 

milk’’ in § 133.3 do not provide for the 

use of filtered milk or filtered nonfat 

milk as basic dairy ingredients in 

standardized cheeses and related cheese 

products. In 1983, with respect to the 

use of the forms of milk that are 

permitted as basic ingredients in 

cheesemaking, FDA amended § 133.3 to 

define the class designations ‘‘milk,’’

‘‘nonfat milk,’’ and ‘‘cream’’ and 

provide for alternate forms of milk, 

nonfat milk, and cream, i.e., 

concentrated, dried, and reconstituted 

forms to be used in standardized 

cheeses and related cheese products (48 

FR 2736, January 21, 1983). In the 

proposed rule, FDA advised of its 

opinion that these alternate forms can 

be used to produce the same cheese as 

produced from fluid cow’s milk (43 FR 

42127 at 42128, September 19, 1978), 

which was the only form of milk 

permitted as the basic ingredient for 

cheese manufacture at that time. 

Filtered forms, however, are not 

included within ‘‘milk’’ or ‘‘nonfat 

milk’’ permitted in standardized cheeses 

and related cheese products. 

In the NCI petition, the petitioners 

argued that the alternate make 

procedure that is provided for in some 

cheese standards historically has 

provided the legal basis for the use of 

milk filtration and the resulting filtered 

milk as an ingredient in cheese making. 

FDA does not agree with the petitioners. 

The alternate make procedure provision 

provides for the use of ‘‘any other 

procedure which produces a finished 

cheese having the same physical and 

chemical properties’’ as the procedure 

specified in the standard. For example, 

the procedure for making blue cheese 

described in § 133.106(a)(2) requires 

Penicillium roquefortii spores to be 

added to the curd. In a final rulemaking 

in 1983, in response to a comment that 

this requirement should be changed to 

permit the addition of spores to dairy 

ingredients rather than only to the curd, 

FDA noted that a change is not 

necessary because the procedure 

described in § 133.106(a)(2) may be 

modified as provided for in 

§ 133.106(a)(1), which states that any 

other procedure may be used which 

produces a finished cheese having the 

same physical and chemical properties 

(48 FR 2736 at 2739). Rather than 

restricting the manufacturing procedure 

to the one specifically described in the 

standard, this provision allows 

manufacturers to use alternate 

manufacturing procedures, but not 

alternate ingredients, provided the 

alternate manufacturing procedure does 

not adversely affect the physical and 

chemical properties of the cheese. 

However, the alternate make procedure 

provision does not permit the use of 

dairy or other ingredients that are not 

specifically provided for in the cheese 

standard. Therefore, the alternate make 

provision of current cheese standards 

allows manufacturers to appropriately 

process the basic ingredient milk during 

the cheese-making process. For 

example, the ingredient milk may 

undergo an additional step of 

ultrafiltration prior to being introduced 

into the cheese vat in a single withinbatch and within-plant production line 

for cheese making. In such a process, 

the ingredient that is introduced into 

the cheese-making process is milk. 

However, fluid UF milk purchased or 

brought in from another plant, even 

within the same company, that is then 

introduced into cheese making is 

considered an alternate ingredient 

because the ultrafiltration process is 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60755 

used solely for the production of an 

ingredient that is subsequently used in 

cheese making. Therefore, in this case, 

the ingredient is fluid UF milk, not 

milk. 

In the NCI petition, the petitioners 

also stated that FDA has previously 

acknowledged that the use of filtered 

milk to manufacture cheddar cheese is 

covered by the alternate make procedure 

provision of the cheddar cheese 

standard, including when filtration 

occurs in a separate centralized facility. 

FDA clarifies that it has previously not 

objected to the use of fluid UF milk in 

cheddar cheese under specific 

circumstances. In 1996, FDA granted 

temporary permission to Bongards 

Creamery in Minnesota to manufacture 

cheddar cheese using fluid UF milk that 

is produced on a farm in New Mexico. 

That permission was granted on a 

limited basis in response to a request 

from the T.C. Jacoby & Company, Inc., 

to run a testing program at Bongards 

Creamery during a pilot period to 

demonstrate that the finished cheddar 

cheese made with fluid UF milk as an 

ingredient has the same physical and 

chemical characteristics as traditional 

cheddar cheese (Ref. 5). In its response 

to T.C. Jacoby & Company, Inc., FDA 

stated that based on its understanding 

that ‘‘cheddar cheese produced with the 

retentate that results when milk is 

subjected to processing in a 

ultrafiltration system is nutritionally 

equivalent to and is physically and 

chemically identical’’ to cheddar cheese 

prepared by the standardized procedure, 

it would not object to the use of fluid 

UF milk in the manufacture of cheddar 

cheese at Bongards Creamery on the 

limited basis described by T.C. Jacoby & 

Company, Inc. (Ref. 6). 

Subsequently, FDA stated its 

interpretation of the cheese standards 

that, as written, they do not allow for 

the use of UF milk as an ingredient (Ref. 

7). FDA reaffirms that the use of filtered 

milk, dried or fluid, including fluid UF 

milk, as an ingredient is not covered 

under the alternate make procedures 

provided for in certain standardized 

cheeses. However, while FDA has 

considered the use of UF milk in 

standardized cheeses, it has stated that 

it would not object to the experimental 

use of fluid UF milk as an ingredient in 

cheddar and mozzarella cheeses (Ref. 7) 

and that enforcement regarding the use 

of UF milk as an ingredient in Swiss 

cheese is not a priority (Ref. 8). 

Substances commonly referred to as 

MPC are also not permitted as 

ingredients in standardized cheeses. 

While there is no current FDA 

regulation that defines ‘‘MPC’’ and this 

term does not appear to have a standard 

definition within the industry, the term 

‘‘MPC’’ is generally used to refer to 

dried forms of filtered milk and dried 

blends and coprecipitates of milk 

proteins (Ref. 9). The existing standards 

of identity in part 133 do not list MPC 

as a permitted optional ingredient in the 

manufacture of standardized cheeses or 

related cheese products. Ingredients that 

are not specifically provided for by the 

standard cannot be used in the 

manufacture of a food named with the 

standardized term. FDA reiterated this 

statement in 1983 when FDA amended 

the standards for nine natural cheeses to 

bring them into closer conformance 

with the recommended Codex standards 

for those cheeses (48 FR 2736). FDA 

advised that dairy ingredients that may 

be used in manufacture of standardized 

cheeses are specifically listed in the 

individual standards, and that milkderived ingredients other than those 

specifically provided for may not be 

used in these cheeses (48 FR 2736 at 

2737). In addition, specific to the use of 

caseinates in standardized cheeses, FDA 

previously addressed comments on the 

use of caseinates in previous 

rulemakings (48 FR 2736 at 2737 and 58 

FR 2431 at 2439, January 6, 1993), and 

advised that caseinates are not among 

the dairy ingredients provided for use in 

the manufacture of standardized cheeses 

in part 133 and, therefore, cannot be 

used. FDA reaffirms that ingredients 

other than those specifically provided 

for by the individual standards cannot 

be used in the making of standardized 

cheeses and related cheese products. 

Therefore, under the current 

regulations, use of filtered milk, 

including fluid UF milk, as an 

ingredient in a cheese whose applicable 

standard(s) does not provide for its use 

would constitute a deviation from the 

standard, and such cheese cannot be 

named by the standardized term. 

However, under the provisions of 21 

CFR 130.17, food manufacturers may 

request from FDA a temporary 

marketing permit (TMP) to market a 

food that is named by the standardized 

term but that deviates from its standard 

of identity. 

E. Temporary Marketing Permit (TMP) 

On August 1, 2002, FDA received an 

application from Wells’ Dairy, Inc. 

(Wells’ Dairy), for a TMP for the use of 

UF milk in the manufacture of cottage 

cheese. In the Federal Register of 

December 9, 2004 (69 FR 71418), FDA 

announced the issuance of a TMP to 

Wells’ Dairy to market test cottage 

cheese that deviates from the standard 

of identity for cottage cheese in that the 

product is formulated using fluid UF 

skim milk. For the purpose of this TMP, 

fluid UF skim milk was described as 

‘‘the product obtained by subjecting 

skim milk to a physical separation 

process called ultrafiltration using a 

membrane with a pore size of 10,000 

Daltons (Da) molecular weight cut-off 

(MWCO), resulting in the partial loss of 

lactose, minerals, water-soluble 

vitamins, and water present in skim 

milk.’’ The TMP also specified that the 

casein-to-whey protein ratio of skim 

milk is not altered during the 

ultrafiltration process and that the 

moisture content of fluid UF skim milk 

is about 80 percent. The TMP permitted 

the addition of such fluid UF skim milk 

to skim milk at a level needed to 

increase the total solids of the cheese 

milk (or final milk used to make cheese) 

by 5 to 25 percent, and required fluid 

UF skim milk to be declared in the 

ingredient statement of the finished 

cottage cheese as ‘‘ultrafiltered skim 

milk.’’ The purpose of the permit was to 

allow Wells’ Dairy to measure consumer 

acceptance of the product, identify mass 

production problems, and assess 

commercial feasibility. The permit 

provided for the temporary market 

testing of 15 million pounds (lb) (6.8 

million kilograms) of the test product 

for a period of 15 months. 

II. The Proposal 

A. Legal Authority/Statutory Directive 

Section 401 of the Federal Food, Drug, 

and Cosmetic Act (the act) (21 U.S.C. 

341)) directs the Secretary of Health and 

Human Services (the Secretary), to issue 

regulations fixing and establishing 

reasonable definitions and standards of 

identity, quality, or fill of container 

whenever such action will promote 

honesty and fair dealing in the interest 

of consumers. Section 701(e) of the act 

(21 U.S.C. 371(e)) directs the Secretary 

to publish a proposal for the 

amendment or repeal of any definition 

and standard of identity under section 

401 of the act for any dairy product (e.g., 

cheese) that is based on a petition of any 

interested persons showing reasonable 

grounds. 

B. Options Considered 

FDA considered several options in 

response to the two petitions, including 

the following: (1) Denying the two 

petitions, (2) proposing to permit the 

use of all fluid forms of filtered milk, (3) 

proposing to permit the use of all fluid 

and dried forms of filtered milk, and (4) 

proposing to permit the use of fluid UF 

milk. FDA concluded that the first 

option would not be appropriate given 

that the NCI petition includes within its 

scope allowing the use of UF milk in 

standardized cheeses, which FDA 

60756 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

tentatively concludes, for reasons 

discussed under option 4, should be 

permitted. 

The second option, to provide for the 

use of all fluid forms of filtered milk in 

standardized cheeses, was also 

determined to be inappropriate. 

Standards of identity regulations 

establish the name of the food, which 

identifies and describes the food’s basic 

nature (43 FR 42118 at 42120, 

September 19, 1978). As FDA discussed 

in 1950 during the establishment of the 

cheese standards of identity, the starting 

point for all varieties of cheese is milk. 

In preparing milk for use in cheese 

making, adjustments may be made by 

adding or removing milk fat in the form 

of cream, fresh skim milk, NFDM solids, 

or concentrated skim milk so that the 

ratio of milk fat to the nonfat milk solids 

is at a desired level (15 FR 5656 at 5657, 

August 24, 1950). FDA reiterates its 

longstanding interpretation that a basic 

nature of cheese is that it is a food made 

using milk as the starting ingredient. 

Proposing to allow the use of all fluid 

forms of filtered milk in standardized 

cheeses was rejected because some 

forms of filtration concentrates are 

specific individual components of milk 

resulting in a retentate that is no longer 

milk. For example, microfiltration can 

be used to separate whey proteins along 

with lactose, minerals, and watersoluble vitamins from milk resulting in 

the concentration of casein fractions. 

FDA tentatively believes that such 

products that are merely concentrates of 

certain individual milk components are 

not milk. The use of individual 

components of milk, such as specific 

milk proteins, as the basic or starting 

ingredient in cheese is not consistent 

with the basic nature of cheese in that 

cheese is a food prepared using milk, 

not specific individual components of 

milk. Moreover, as FDA previously 

noted, when providing flexibility for use 

of advances in food technology, food 

standards should ensure that the basic 

nature of the food remains essentially 

the same (60 FR 67492 at 67499, 

December 29, 1995). FDA tentatively 

concludes that allowing for the use of 

technologies that could potentially 

result in the use of a specific component 

of milk as the starting ingredient of 

cheese would seem to violate the intent 

of the cheese standards of identity to 

preserve the basic nature of cheese. 

In the NCI petition, the petitioners 

also stated that because mechanical 

filtration removes only those 

constituents that are removed by loss of 

whey in traditional cheese making, it 

functions simply to rearrange the steps 

in the cheese-making process to permit 

the constituents to be removed earlier. 

FDA believes that food standards should 

provide for flexibility in manufacturing 

procedures and ingredients, provided 

that the basic nature and essential 

characteristics of the food are preserved. 

In determining which filtered products 

are appropriate for use as ingredients in 

cheeses, FDA considered how the use of 

a type of filtered milk affects the basic 

nature and essential characteristics of 

cheese. While filtration selectively and 

variably removes different constituents 

of milk that are lost, to varying degrees, 

during the whey removal process in the 

traditional cheese-making process, we 

do not agree that this fact can form a 

sufficient basis to support the use of all 

forms of fluid filtered milk as 

ingredients. Some forms of filtration 

result in retentates that are specific 

individual components of milk and are 

no longer milk. In addition, research 

suggests that milk that is concentrated 

to higher levels of protein is not suited 

for use in all types of cheeses, with 

adverse effects on quality being reported 

particularly in the case of hard and 

semi-hard cheeses (Refs. 1, 10, and 11). 

Moreover, FDA believes that in 

determining the appropriateness of 

different forms of filtered milk as 

ingredients in cheese a primary 

criterion, based on a fundamental 

principle of food standards, is whether 

the use of the filtered milk ensures the 

integrity of the standardized cheese—its 

basic nature and essential 

characteristics. As explained in the 

previous paragraph, FDA tentatively 

concludes that the use of a product of 

microfiltration as the starting ingredient 

of cheese is not consistent with the 

basic nature of cheese. Therefore, we do 

not agree that it is appropriate to 

provide for the use of all types of fluid 

filtered milk nor do we agree that the 

argument about the ‘‘rearrangement’’ of 

the steps of cheese making (as described 

by the petitioners) sufficiently supports 

the appropriateness of the use of all 

forms of fluid filtered milk an 

ingredient. 

A third option that was also 

considered inappropriate was to provide 

for all filtered milk, including both fluid 

and dried forms. Under this option, 

substances such as MPC, dry 

microfiltered (MF) milk, and caseins 

would be permissible in standardized 

cheeses or related cheese products. 

FDA’s concerns regarding the use of all 

fluid filtered milk, which are stated in 

the two previous paragraphs, also apply 

to the use of dried filtered milks. 

Allowing for the use of technologies that 

could potentially result in the use of 

specific components of milk, such as 

caseins, rather than milk, as the starting 

ingredient of cheese would be 

inconsistent with the basic nature of 

cheese. 

C. Proposed Amendments 

Based on all the information 

available, including the information 

presented by the two petitions and the 

comments received thus far, FDA is 

proposing to amend the definitions of 

‘‘milk’’ and ‘‘nonfat milk’’ in § 133.3 to 

do the following: (1) Provide for 

ultrafiltration of milk and nonfat milk 

and (2) define UF milk and nonfat milk 

as raw or pasteurized milk or nonfat 

milk that is passed over one or more 

semipermeable membranes to partially 

remove water, lactose, minerals, and 

water-soluble vitamins without altering 

the casein-to-whey protein ratio of the 

milk and resulting in a liquid product. 

FDA is also proposing that the name of 

such treated milk is ‘‘ultrafiltered milk’’

or ‘‘ultrafiltered nonfat milk,’’ as 

appropriate. Consequently, when this 

type of milk is used, it would be 

declared in the ingredient statement of 

the finished food as ‘‘ultrafiltered milk’’

or ‘‘ultrafiltered nonfat milk.’’

First, providing for the use of fluid UF 

milk is consistent with the basic nature 

of cheese in that the starting ingredient 

is milk. During the process of 

ultrafiltration, some of the lactose, 

soluble salts, and water-soluble 

vitamins of milk pass through the 

membranes and are removed, while 

protein, fat, fat-soluble vitamins, and 

some of the insoluble salts are retained. 

Therefore, unlike microfiltration, 

ultrafiltration does not result in the 

separation of specific fractions of milk 

proteins. 

Second, FDA tentatively concludes 

that fluid UF milk can be used in 

standardized cheeses while maintaining 

the essential characteristics of these 

cheeses specified in the individual 

standards of identity in part 133. 

Scientific literature suggests that fluid 

UF milk, especially at low concentration 

factors, can be used in different cheeses 

(including soft, semi-hard, hard, and 

direct-acidified cheeses and process 

cheese) without adversely affecting the 

physical, chemical, or organoleptic 

properties of the cheese (Refs. 1, 2, and 

11 through 20; Appendix F of the NCI 

petition). This appears to be especially 

true with soft cheeses such as cottage 

cheese (Refs. 1, 14, and 15) and some 

direct-acidified cheeses (Ref. 12). 

Specifically with respect to cottage 

cheese, as noted in section I.E of this 

document, FDA reviewed relevant 

scientific information related to the use 

of fluid UF milk as an ingredient and 

determined that fluid UF milk may be 

used in cottage cheese without 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60757 

adversely affecting the essential 

physical or chemical characteristics, 

including nutritional composition and 

organoleptic properties of cottage 

cheese. FDA issued a TMP to Wells’

Dairy to market test cottage cheese that 

deviates from the standard of identity 

for cottage cheese in that the product is 

formulated using fluid UF skim milk (69 

FR 71418). 

FDA notes, however, that the 

scientific literature also includes some 

reports of adverse effects from the use 

of fluid UF milk on the texture and 

development of flavor and aroma of 

certain cheeses, particularly in semihard and hard cheeses and with the use 

of fluid UF milk at higher concentration 

factors (Refs. 1, 11, 17, and 21 through 

24). FDA points out that the use of fluid 

UF milk must not adversely affect the 

physical or chemical characteristics of 

the cheese. The cheese standards of 

identity ensure the integrity of the 

cheese by setting limits on its fat, milk 

solids-not-fat, and moisture content. In 

addition, FDA considers nutritional 

equivalency and organoleptic properties 

of the cheese among other factors to 

determine whether the essential 

characteristics of the cheese are 

maintained. Providing for the use of 

fluid UF milk does not preclude a 

standardized cheese from meeting the 

existing requirements within the 

applicable individual standard(s) of 

identity in part 133. Rather, the use of 

fluid UF milk would be optional and 

any cheese made using fluid UF milk 

would have to meet all the 

requirements, including the physical 

and chemical characteristics, specified 

in the applicable individual standard(s) 

of identity. 

Third, FDA anticipates that providing 

for the use of fluid UF milk would 

enable cheese manufacturers to benefit 

from advances in milk filtration 

technology and provide them with 

greater flexibility in cheese making, 

while preserving the basic nature and 

essential characteristics of standardized 

cheese. Further, using ultrafiltration 

technology may result in better 

retention of milk proteins and greater 

cheese yields as well as more uniform 

product quality (Ref. 1). In addition, the 

petitioners claimed that using fluid 

filtered milk (including fluid UF milk) 

helps manage seasonal imbalances in 

milk supplies and demand for cheese, 

and reduces the costs associated with 

bulk milk distribution, resulting in cost 

savings that ultimately could be passed 

on to consumers. Furthermore, 

declaring fluid UF milk in the 

ingredient statement of the cheese as 

‘‘ultrafiltered milk’’ or ‘‘ultrafiltered 

skim milk,’’ as appropriate, would 

enable consumers to identify cheeses 

made with milk that has undergone 

ultrafiltration. 

Finally, providing for the use of fluid 

UF milk would bring the standards of 

identity for cheeses in closer conformity 

with the international standards 

adopted by Codex and facilitate 

increased harmonization. In response to 

the ADPI and NCI petitions, FDA 

considered the relevant Codex standards 

for cheeses and related cheese products. 

Specifically, FDA reviewed the Codex 

standards for cheese (Codex Stan A–6), 

cheeses in brine (group standard) 

(Codex Stan 208), cottage cheese 

including creamed cottage cheese 

(Codex Stan C–16), cream cheese (Codex 

Stan C–31), extra hard grating cheese 

(Codex Stan C–35), unripened cheese 

including fresh cheese (group standard) 

(Codex Stan 221), named variety 

process(ed) cheese and spreadable 

process(ed) cheese (Codex Stan A–8(a)), 

process(ed) cheese and spreadable 

process(ed) cheese (Codex Stan A–8(b)), 

process(ed) cheese preparations (Codex 

Stan A–8(c)), and whey cheeses (Codex 

Stan A–7) (Refs. 25–34). FDA notes that 

several Codex standards such as the 

standard for cheese, group standard for 

cheeses in brine, and group standard for 

unripened cheese including fresh 

cheese all permit the use of ‘‘milk and/ 

or products obtained from milk,’’ which 

encompasses fluid UF milk, as the raw 

material in the manufacture of theses 

cheeses, provided the finished cheese 

meets the relevant physical and 

chemical properties. Additionally, the 

Codex standard for whey cheeses 

provides for the addition of ‘‘raw 

materials of milk origin,’’ including 

fluid UF milk. Providing for the 

optional use of fluid UF milk as a basic 

dairy ingredient in cheeses would be 

consistent with, although not as 

expansive as, the provisions of some 

Codex standards. 

In a recent proposed rule (70 FR 

29214, May 20, 2005) (the food 

standards proposal), FDA and FSIS 

proposed a set of general principles that 

define how modern food standards 

should be structured. The agencies also 

proposed that, if finalized, the agencies 

will require that a CP for establishing, 

revising, or eliminating a food standard 

be submitted in accordance with these 

general principles. Conversely, the 

agencies proposed that they may find 

deficient a petition to establish, revise, 

or eliminate a food standard that does 

not follow these general principles. FDA 

believes that the action proposed here to 

provide for the use of fluid UF milk as 

an ingredient in standardized cheeses 

and related cheese products is 

consistent with the general principles 

proposed in the food standards 

proposal. 

For the reasons explained previously 

in this section, FDA tentatively 

concludes that providing for the use of 

fluid UF milk only, rather than for the 

use of all fluid filtered milk (as 

requested by the NCI petition), would 

promote honesty and fair dealing in the 

interest of consumers by providing 

greater flexibility in cheesemaking 

while preserving the basic nature and 

essential characteristics of the food. 

Therefore, FDA proposes to amend the 

definitions of ‘‘milk’’ and ‘‘nonfat milk’’

within § 133.3 to do the following: (1) 

Provide for ultrafiltration of milk and 

nonfat milk and (2) define UF milk and 

nonfat milk as raw or pasteurized milk 

or nonfat milk that is passed over one 

or more semipermeable membranes to 

partially remove water, lactose, 

minerals, and water-soluble vitamins 

without altering the casein-to-whey 

protein ratio of the milk and resulting in 

a liquid product. FDA also proposes that 

the name of such treated milk is 

‘‘ultrafiltered milk’’ or ‘‘ultrafiltered 

nonfat milk,’’ as appropriate. 

Consequently, when this type of milk is 

used, it would be declared in the 

ingredient statement of the finished 

food as ‘‘ultrafiltered milk’’ or 

‘‘ultrafiltered nonfat milk.’’

FDA seeks comment on the 

appropriateness of the proposed 

amendments, including the provision to 

permit the use of fluid UF milk and 

fluid UF nonfat milk. The proposed 

amendments would allow for optional 

ultrafiltration of the starting ingredient, 

milk or nonfat milk, used in cheese 

manufacturing. Under these proposed 

amendments, whether a manufacturer 

uses fluid UF milk is optional and 

entirely up to the manufacturer. 

FDA also seeks comment on the 

appropriateness of the proposed 

definition of ultrafiltration. With respect 

to the requirement for an unaltered 

casein-to-whey protein ratio during 

ultrafiltration, FDA acknowledges that 

some loss of small molecular weight 

whey proteins may occur during 

ultrafiltration of milk with the extent of 

loss partially dependent on the nature of 

the membrane and the orientation of the 

molecules in milk (which may be 

influenced by the treatment of milk 

prior to or during ultrafiltration). While 

casein and most whey proteins are 

retained in the retentate, proteosepeptones with low molecular weights 

may be lost in the permeate. Proteosepeptones have a molecular weight 

between 4,100 and 20,000 Da (Ref. 35). 

Because there is expected to be free 

cross-flow of these proteins across the 

membranes, the loss of the very low 

60758 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

molecular weight proteose-peptones 

may be small and, therefore, as noted in 

published reviews, the casein-to-whey 

protein ratio of milk would not be 

significantly altered during 

ultrafiltration (Refs. 36 and 37). Studies 

also have demonstrated complete 

retention of whey proteins and a 

relatively constant casein-to-whey 

protein ratio in milk that has been 

ultrafiltered to increasing volume 

concentration (Refs. 13, 38, and 39). The 

information presented by Wells’ Dairy, 

Inc., as part of its TMP submission also 

demonstrates that there is minimal, 

insignificant loss of true protein in the 

ultrafiltration permeate resulting in an 

ultrafiltered retentate with its casein-towhey protein ratio intact (Docket No. 

2004P–0519; 69 FR 71418). 

FDA notes that a comment received in 

response to the two petitions suggested 

that any definition of ultrafiltration also 

include a requirement that the fluid UF 

milk must contain a maximum of 45 

percent total solids (or a minimum 

moisture content of 55 percent). The 

comment stated that this requirement is 

necessary to define ‘‘liquid’’ UF milk 

and preclude any treatment following 

ultrafiltration to further concentrate UF 

milk. However, the comment did not 

provide any supporting information or 

data on the appropriateness of this 

minimum level of moisture. In the 

proposed definition of UF milk, FDA is 

not proposing a requirement related to 

minimum moisture content of UF milk; 

however, the proposed definition states 

that UF milk is a liquid product. FDA 

seeks comment on whether there is a 

need for an added measure to ensure the 

liquid nature of this ingredient and/or to 

preclude any subsequent treatment 

following ultrafiltration to further 

concentrate the fluid UF milk. If so, 

does a minimum moisture content 

requirement sufficiently address this 

concern and what is an appropriate 

minimum level of moisture? 

FDA also seeks comment on the need 

for, and appropriateness of, the 

following: (1) Not permitting other 

forms of mechanical filtration, such as 

microfiltration; and (2) the requirement 

that the casein-to-whey protein ratio 

remain unaltered during ultrafiltration 

and the feasibility of such a requirement 

for compliance and enforcement 

purposes. If the requirement that the 

casein-to-whey protein ratio remain 

unaltered is not appropriate, FDA seeks 

information on what constitutes an 

acceptable variation of this ratio during 

ultrafiltration of milk so that FDA may 

determine appropriate criteria for 

purposes of enforcement. 

In response to the petitions, FDA 

received some comments that opposed 

the use of any filtered milk, citing 

product safety and quality concerns; 

however, these comments did not 

provide any scientifically sound and 

valid data to support their objections 

specifically with regard to fluid UF 

milk. At this time, FDA does not have 

any information that raises food safety 

concerns with the use of fluid UF milk 

in standardized cheeses. FDA 

specifically requests that any comments 

that address the technical aspects of 

these proposed provisions include 

sound scientific and factual data or 

information that support the positions 

presented in the comments. For 

example, are there analytical data or 

other information that would support a 

determination that standardized cheeses 

made using fluid UF milk, as defined in 

this proposed rule, are potentially 

unsafe or are nutritionally inferior? Are 

there scientific data or information that 

demonstrate that the use of fluid UF 

milk, as defined in this proposed rule, 

adversely affects the physical, chemical, 

or sensory characteristics of a particular 

standardized cheese or cheese product 

or that would support the determination 

that the use of fluid UF milk is not 

appropriate in a particular standardized 

cheese or cheese product? 

III. Executive Order 12866: Cost Benefit 

Analysis 

FDA has examined the economic 

implications of this proposed 

amendment for part 133 as required by 

Executive Order 12866. Executive Order 

12866 directs agencies to assess all costs 

and benefits of available regulatory 

alternatives and, when regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity). Executive Order 

12866 classifies a rule as significant if 

it meets any one of a number of 

specified conditions, including: Having 

an annual effect on the economy of $100 

million, adversely affecting a sector of 

the economy in a material way, 

adversely affecting competition, or 

adversely affecting jobs. A regulation is 

also considered a significant regulatory 

action if it raises novel legal or policy 

issues. FDA has determined that this 

proposed rule is a significant regulatory 

action as defined by Executive Order 

12866. 

A. Need for Regulation 

Under current standards of identity 

for cheese and cheese products, the 

definitions of ‘‘milk’’ and ‘‘nonfat milk’’

do not encompass ‘‘filtered milk’’. As a 

result, while these definitions list milk, 

nonfat milk, and the different forms 

(including concentrated, reconstituted, 

and dried) that can be used in making 

standardized cheeses, they do not 

explicitly permit the use of filtered milk 

as an ingredient in standardized 

cheeses. The use of filtered milk in 

cheese making provides greater 

flexibility and potential cost savings to 

cheese producers while still preserving 

the basic nature and essential 

characteristics of the food. FDA 

tentatively concludes that revision of 

the standard is needed to promote 

honesty and competition in the interest 

of consumers and to allow dairy 

producers to utilize a safe and effective 

technology. 

B. Background and Current Industry 

Practices 

The sources for this analysis were 

compiled from food research and 

chemistry journals, milk and cheese 

industry publications, U.S. Department 

of Agriculture (USDA) data and reports, 

other government agency reports, and 

expert opinions. Sources cited in this 

text refer to the specific passage or data 

reported, but all sources found at the 

end of the document were used to 

formulate the basis of the analysis. 

The standardization of casein and fat 

content in milk is a common practice in 

cheese production that improves the 

consistency of the final products, 

reduces the volatility of total milk 

ingredient costs, and increases the 

amount of cheese produced per vat (Ref. 

9). Not all cheese producers standardize 

their milk, but the amount of protein, 

specifically in the form of casein, 

present in milk for cheese production is 

the single largest factor affecting cheese 

yield. Condensed skim milk and NFDM 

are widely used to increase the amount 

of casein in cheese milk (Refs. 9 and 40). 

In 2001, the dairy industry purchased 

621 million lb of NFDM, 67.5 percent of 

all domestic sales of NFDM. The use of 

NFDM in hard cheeses made up 43.3 

percent of the total amount purchased 

by the dairy industry, and cottage and 

cream cheeses accounted for an 

additional 6.2 percent (Ref. 41). 

By adding condensed milk or NFDM 

the cheese producer is adding lactose 

and minerals that must later be removed 

from the curd at a greater rate than the 

casein that provides the benefits (Ref. 

40). Ideally, cheese producers would 

standardize their cheese milk with a 

higher concentration of protein without 

adding components that later have to be 

removed. The key components of milk 

products used in cheese making are 

listed in table 1 of this document. 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60759 

TABLE 1.—COMPOSITION OF MILK PRODUCTS

Component1 Milk (%) Nonfat Dry 

Milk (%) Fluid UF Milk (%) Dry UF Milk (%) Fluid MF Milk (%)2

Isolated Casein 

(%) 

Protein 3 .3 36 4.48–11.94 42–80 7 .9 89–94 

Fat 3 .65 0 .8 5.51–14.68 1–2.5 10 .5 1.53

Lactose 4 .75 52 4.59–3.68 46–4.1 4 .7 0–0.23

1Percentages compiled from the Wisconsin Center for Dairy Research and the Wisconsin Milk Marketing Board White Paper (2001), 

Fassbender (2001), Innovations in Dairy (2001), and GAO (2001). 2As in the case of fluid UF milk, the composition of fluid MF milk can vary but we were unable to find a range of values of protein, fat, and lactose content of fluid MF milk in the literature. 3 Maximum values. 

Table 1 of this document, reflects the 

fact that UF milk can be concentrated to 

a greater or lesser extent to meet the 

needs of different manufacturing 

processes. For some cheeses, the UF 

milk can be highly concentrated then 

mixed with cream to produce a liquid 

‘‘precheese’’ with the same gross 

composition as the final cheese. It has 

been shown that this precheese can be 

used in continuous process cheese 

making without the use of vats (Refs. 10 

and 42). Some soft cheeses, processed 

cheese, and direct acidified cheese, 

particularly those made from goat’s and 

sheep’s milk, have been reported to be 

successfully produced using highly 

concentrated UF milk (Refs. 12, 13, and 

43). However, the high concentration of 

the retentate may affect some properties 

of the milk and require specially 

designed equipment (Ref. 2). 

More widely accepted for the 

common styles of cheese consumed in 

the United States appears to be the use 

of lower concentrations of UF milk to 

standardize the protein concentration in 

cheese milk to produce higher final 

cheese yields (Refs. 4, 10, and 44). Low 

concentration UF milk replaces a 

percentage of milk, usually between 10 

and 20 percent, to provide a higher level 

of casein in the cheese milk without the 

addition of lactose and minerals (Ref. 

40). Most of the benefits of using UF 

milk are from standardizing the protein 

concentrations while still allowing 

conventional cheese-making equipment 

to be used, or easily adapted for use 

(Ref. 10). Other uses include UF milk 

replacement to eliminate the natural 

seasonal variation in milk quality, 

improving the consistency of cheese 

(Ref. 9). 

For the purpose of the economics 

analysis, and without making any 

declarations about what FDA believes is 

technically sufficient, we use a low 

concentration of UF milk with 

approximately 10 percent replacement 

as the appropriate reference for 80 

percent of all cheese made in the United 

States. This is based on research that 

suggests that low concentration 

replacement has been successfully used 

in Cheddar and Mozzarella cheeses 

(Refs. 1 and 9), whereas continuous 

process cheese-making from high 

concentration UF milk was not (Ref. 9). 

These two cheeses alone made up twothirds of domestic cheese production in 

2002 with Swiss and other American 

cheeses, making up an additional 13 

percent (Ref. 45). If this proposed rule 

is finalized, all standardized cheese 

made in the United States, regardless of 

the variety and including those that 

implement UF technology, must 

continue to meet the physical and 

chemical properties specified in the 

standard. 

Amending the standard of identity of 

cheese has the potential to affect two 

related sectors of the dairy industry: 

Dairy processors and cheese producers. 

Milk is produced on dairy farms daily, 

with the volume and composition 

varying both seasonally and daily. The 

milk is picked up from dairy farms and 

transported by milk haulers to 

cooperatives or proprietary operations 

for distribution or further processing. 

Large dairy farms may encompass 

production, processing, and even hardproduct manufacturing facilities all at 

one site, whereas other dairy farms may 

belong to a cooperative or sell their milk 

to a proprietary operation that processes 

or further distributes the milk at its own 

discretion. Except in the cases of large 

operations, dairy farms do not usually 

process their own milk. Therefore, 

while there are almost 92,000 dairy 

operations (an operation is a place with 

one or more milk cows; a farm may 

include more than one operation) in the 

United States (Ref. 46), the unit of 

measurement for purchasing UF 

technology is the dairy processor who 

collects milk from one or more dairy 

operations. In addition to making the 

capital investment in UF technology, 

dairy processors would benefit from the 

decreased costs for transporting and 

storing UF milk during shipment to 

cheese producers. 

Cheese producers, while not the 

direct purchasers of UF technology, 

would still be affected by the changes in 

the definition of milk in standardized 

cheese if they choose to replace some of 

their ingredient milk with UF milk. 

Many of the benefits of using UF milk 

in cheese accrue to the cheese producers 

directly, including, e.g., higher cheese 

yields and increased production 

efficiency as well as a greater ability to 

eliminate the natural variation in their 

milk supplies, and reduced storage 

costs. 

Dairy processors and cheese 

producers are not mutually exclusive 

categories. A dairy processor is a 

manufacturer of dairy products made 

using milk as the main dairy ingredient. 

Therefore, cheese producers are all 

dairy processors, but not all dairy 

processors produce cheese. In 2002 

there were 403 cheese plants and 1,153 

dairy processors in the United States 

(Ref. 45). Some dairy processors either 

manufacture cheese directly or 

manufacture dairy products that are 

sold to cheese producers. However, 

some dairy processors produce no 

cheese products or ingredients 

whatsoever, and instead, produce a 

variety of other dairy products 

including fluid milk, butter, ice cream, 

and whey products. It is also worth 

noting that dairy processors include 

cooperatives. In 1997 there were 226 

dairy cooperatives that ranged in 

primary function from bargaining-only 

to hard-product manufacturing and 

fluid processing (Ref. 47). 

We measure benefits as the net 

decrease in the cost of producing 

cheese. These benefits accrue from all 

types of protein-standardization; 

however, the extent of the benefits will 

vary depending on the milk product 

used. These benefits lead to cost savings 

that could be passed along to consumers 

if the market is opened to a larger 

number of dairy producers within the 

industry and competition among cheese 

producers is enhanced. When only 

those milk processors that are large 

60760 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

enough to incorporate UF technology in 

legitimate alternate-make procedures 

(i.e., within plant and within batch) are 

allowed to use the cost-saving 

technology in standardized cheeses, 

they will be able to sell their goods at 

the market price, which is based on 

competition among firms with higher 

production costs. If, however, the 

market is broadened so that all firms, 

large and small, are able to use the costsaving technology, competition among 

these firms should bid down the market 

price of cheese, passing the savings on 

to consumers. 

We measure the costs of using filtered 

milk to make standardized cheese as 

losses to consumers who prefer cheese 

made under the existing milk 

definitions, domestic and international 

market adjustments, and government 

purchases required under USDA’s 

Commodity Credit Corp., program. 

Increases in government purchases of 

dairy products will not incur unless the 

market prices of specific products fall 

below the government floor prices. 

C. Regulatory Options 

We analyze several options for 

amending the standards of identity for 

cheeses and cheese products. Option 1 

would amend the definition of milk in 

the standards of identity for cheeses to 

allow fluid UF milk to be used. Option 

2 would allow fluid UF milk and dry UF 

milk. Option 3 would amend the 

definition of milk in the standards of 

identity for cheese to allow all filtration 

methods that resulted in a fluid milk 

product to be used in cheese 

production. Option 4 would allow all 

filtration methods that resulted in fluid 

or dry milk products to be used. Option 

5 would allow all milk or products 

obtained from milk to be used in cheese 

production, in concert with the Codex 

general standard for cheese. 

We estimate the benefits and costs of 

the regulatory option compared with the 

benefits and costs of a baseline. The 

baseline reflects the state of the industry 

before any new regulation is put in 

place. Therefore, in this analysis the 

baseline is leaving the standard of 

identity for cheese unmodified, i.e., 

milk, nonfat milk, and the concentrated, 

reconstituted, and dried forms of milk 

and nonfat milk are the only basic 

ingredients allowed in the production of 

standardized cheese. Due to the 

‘‘extensive use of nonfat dry milk 

(NFDM) as an ingredient for cheese 

manufacture in the United States’’ (Ref. 

9), the baseline assumes NFDM is used 

as the source of supplemental solids in 

cheese manufacture. For purposes of 

this analysis, we assume that the 

benefits and costs of the baseline are 

zero. 

Option 1: Allow fluid UF milk to be used 

in the making of standardized cheeses 

This option would allow fluid UF 

milk to be used in the making of 

standardized cheese. For most U.S. 

cheese production, this option would 

result in replacing a percentage of the 

milk used in the production of cheese 

with fluid UF milk. This option differs 

from the baseline by substituting fluid 

UF milk for NFDM as the protein-dense 

replacement milk ingredient. 

Benefits of Option 1: Fluid UF milk 

retains more moisture from milk than 

NFDM does, so as a percentage of total 

composition, UF milk has less protein 

than NFDM. However, it also contains 

less lactose than either NFDM or milk. 

In fact, the more highly concentrated the 

milk is, (the concentrations listed in 

table 1 of this document, vary from 1.5 

to 4 times the solids concentration of 

milk), the more protein is retained and 

the less lactose is unnecessarily added. 

Replacement of milk with fluid UF milk 

during the manufacturing process 

produces yield increases per vat, thus 

spreading out fixed costs (labor, 

equipment, physical facility) over more 

total weight of cheese (Ref. 9). 

According to the Technical Director of 

North American Milk Products, a cheese 

plant that replaces 10 percent of its 

daily milk inputs with fluid UF skim 

milk would see an increase in cheese 

yield of 12 percent. This increase in 

yield lowers costs by up to two cents 

per pound of cheese (Ref. 48). In 2002, 

8.6 billion pounds of cheese were 

produced (Ref. 45). Therefore, the yield 

increase due to partial replacement of 

milk with fluid UF milk in all U.S. 

cheese production could save about 

$172 million per year ($0.02 per pound 

x 8.6 billion pounds). 

This estimate may understate the 

potential cost savings; Fassbender (Ref. 

49) states that a 10 percent replacement 

produces a yield increase of 25 percent, 

and an article from Dairy Management, 

Inc., states that a 10–15 percent 

replacement produces a yield increase 

as high as 18 percent (Ref. 50). In 

addition, the amount of rennet and 

starter cultures which are added to 

cheese milk can be reduced due to the 

higher solids content in the cheese milk. 

In one fluid UF milk research study at 

the Wisconsin Center for Dairy 

Research, a plant was able to reduce the 

rennet usage by 4 ounces per vat, for a 

total annual savings of over $28,000 

(Ref. 49). If we assume this plant is 

representative of all cheese 

manufacturing plants, then multiplying 

$28,000 by the 403 cheese plants in 

2002 (Ref. 45) gives a rough figure of 

$11 million savings in coagulant usage 

annually. FDA notes that these 

estimates are uncertain and seeks 

comment on the cost savings from 

rennet and starter cultures. 

Estimating the net social benefits from 

implementing UF technology requires 

subtracting out the private costs to firms 

of making the necessary capital 

investments. Milk is increasingly being 

ultrafiltered during the processing stage, 

usually at manufacturing plants or dairy 

cooperatives, so we assume that no 

capital investment in equipment by the 

cheese maker is needed to take 

advantage of UF technology for low 

level fluid UF milk concentration 

replacement (Ref. 48). Cheese producers 

can simply replace a portion of milk 

with fluid UF milk purchased from a 

dairy processor without purchasing new 

equipment. 

An early cost-benefit analysis of fluid 

UF milk production by Slack, et al. (Ref. 

51), found that the benefits of UF milk 

production outweighed the costs for 

dairy farms with over 100 cows. 

However, this threshold has likely 

changed as the latest Pasteurized Milk 

Ordinance (April 2003 edition) loosened 

the restriction that allowed only single 

pass UF systems to now allowing for 

less expensive recirculating UF systems. 

Informal conversations with industry 

representatives revealed that the 

smallest single pass UF systems being 

marketed can process 300,000 lb of milk 

per day, the equivalent of production 

from almost 5,000 cows (300,000 lb is 

roughly 34,800 gallons, which at 7 to 8 

gallons per cow per day, is 4,350 to 

4,971 cows). Recirculating systems, on 

the other hand, are available for flow 

rates of 800 gallons per day, or 

production from approximately 100 

cows (Ref. 52). 

The costs of implementing fluid UF 

technology differ for four categories of 

dairy processors. 

• If a processor already produces 

fluid UF milk, there is no additional 

cost to allowing the extended definition 

of milk in standardized cheese. 

• If a processor collects milk from 

fewer than 100 cows, UF technology 

may not be economically feasible. If 

cheese producers switch their input 

purchases away from milk to fluid UF 

milk, there might be a redistribution of 

income away from these very small 

dairy processors. FDA believes that few, 

if any, milk processors will fall into this 

category. Even though there are many 

small dairy farms (72,070 in 2002) milk 

is not necessarily ultrafiltered on-farm. 

Instead, small dairy farms have the 

option of combining milk with other 

dairy farms in member-owned 

cooperatives or selling milk to 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60761 

proprietary operations that combine 

milk from several farms for processing. 

The USDA defines a ‘‘small’’ dairy 

cooperative as handling less than 50 

million lb of milk each year (Ref. 53), 

which is roughly the equivalent of milk 

from 2,000 cows per day and well above 

the 100 cow minimum. 

• If a processor collects milk from 

more than 100 cows but less than 4,000 

and is not currently producing fluid UF 

milk, then the cost of purchasing 

recirculating UF equipment ranges from 

$175,000 to $350,000 (Ref. 52). 

• If a processor collects milk from 

4,000 or more cows and is not currently 

producing fluid UF milk, then the cost 

of purchasing UF equipment ranges 

from $350,000 for a recirculating system 

to $1,372,500 for a single-pass system 

(Ref. 52). 

Of the 1,153 dairy processors (which 

includes dairy cooperatives that process 

milk for members), an unknown portion 

would purchase UF technology in 

response to this proposed rule if 

finalized. In 2002, cheese production 

used 64,504 million lb of milk, which is 

approximately 61 percent of the 105,961 

million lb used in all manufactured 

dairy products (Ref. 45). Therefore, we 

estimate that 61percent of the dairy 

manufacturing plants process milk for 

cheese, for a total of 703 dairy plants. 

Given that at least 22 dairy 

manufacturing plants and 4 large dairy 

farms already produce fluid UF milk 

(Ref. 4), a total of 677 dairy processors 

may choose to purchase UF technology 

as a result of changing the definition of 

milk in § 133.3. Assuming that new 

purchases of UF equipment would more 

likely be recirculating systems, the total 

one time capital expenditure would 

range from $118 to $237 million. Given 

that the UF equipment depreciates over 

7 to 14 years (Ref. 1), we estimated the 

annualized cost over a 10 year period. 

With a 3 percent interest rate, the 

annualized cost ranges from $14 to $28 

million. With a 7 percent interest rate, 

the annualized cost ranges from $17 to 

$34 million. The annualized cost ranges 

indicate the capital expenditure ranges 

based on the equipment capacity needs 

described previously in this document. 

Milk is produced daily, with the 

volume and composition varying both 

seasonally and daily. Demand for dairy 

products also varies both seasonally and 

daily, but demand variations are not 

correlated with supply variations (e.g., 

milk production peaks in the spring, but 

demand for milk and butter peaks in the 

fall months) (Ref. 53). Cheese producers, 

however, need to provide a consistent 

quality cheese, regardless of the day or 

season in which the inputs were 

produced. Replacing a given portion of 

milk with UF milk can eliminate the 

daily variation that occurs in milk 

composition by standardizing the ratio 

of casein to fat. However, fluid UF milk 

does not offer any price stability from 

seasonal fluctuations that occur in the 

supply and demand for both milk and 

cheese, since it cannot be stored past the 

short term in a liquid form. Nonfat dry 

milk has a shelf-life of 12 to 18 months 

(Ref. 50) and may offer more price 

stability from seasonal fluctuations. 

The transportation and storage costs 

associated with fluid UF milk are lower 

than milk due to the removal of 

approximately two-thirds of the water, 

lactose, and ash during the filtration 

process (Ref. 48). The 2001 GAO Report 

cites a shipment of fluid UF milk by 

Select Milk Producers, Inc., in which 

the cost of transporting fluid UF milk 

was 73 percent lower than the cost of 

transporting milk. In this same year, 

milk hauling charges in the Upper 

Midwest Marketing Area (which 

includes California and Wisconsin, the 

top two milk producing states) averaged 

17.1 cents per hundredweight (cwt) of 

milk (Ref. 54). A 73 percent price 

reduction in this average hauling cost 

lowers the cost of hauling fluid UF milk 

to an average of 4.62 cents per cwt. As 

stated in the section I of this document, 

we assume that for approximately 80 

percent of the cheese produced in the 

United States, fluid UF milk is used as 

a substitute in cheese production, not 

for milk, but for the baseline 

standardizing ingredient, NFDM. To 

calculate the transportation savings for 

these cheeses, we take the 64,504 

million pounds of milk used in cheese 

production in 2002 (Ref. 45) and 

multiply by 80 percent to capture the 

amount shipped for American style 

natural cheeses. We then calculate 10 

percent of this total to be replaced by 

fluid UF milk and convert it to cwt. This 

is the amount of milk that is subject to 

a 73 percent reduction in shipping 

costs, giving a total annual cost savings 

of about $7 million as follows: 

CALCULATION OF TRANSPORTATION COST SAVINGS FOR FLUID UF MILK USED IN AMERICAN STYLE NATURAL CHEESE

80% X 64,504 million lb = 51,603 million lb of milk shipped for American cheese production 

10% X 51,603 million lb = 5,160 million lb of milk filtered before shipment to cheese factory 

5,160 million lbs/100 lb = 51.6 million cwt of milk filtered before shipment 

73% of 17.1 cents/cwt = $0.13 savings per cwt of fluid UF milk shipped 

$0.13 X 51.6 million cwt = $6.7 million 

There would be an additional 

transportation and storage cost savings 

for the varieties of cheese that are wellsuited to high concentrations of UF milk 

where replacement values are closer to 

100 percent of the original milk. To get 

a potential range for what this cost 

savings would be, we calculated the 

transportation savings assuming that the 

remaining 20 percent of cheese 

production would use only UF milk for 

an upper bound and assuming only 2 

percent of cheese production would 

replace 100 percent of milk in cheese 

production as a lower bound. The 

annual transportation savings here range 

from $2 to $17 million (See below). 

CALCULATION OF UPPER BOUND OF TRANSPORTATION COST SAVINGS FOR 100% FLUID UF MILK REPLACEMENT

20% X 64,504 million lb = 12,901 million lb of milk shipped for all other cheese production 

100% X 12,901 million lb = 12,901 million lb of milk filtered before shipment to cheese factory 

12,901 million lb/100 lb = 129 million cwt of milk filtered before shipment 

73% of 17.1 cents/cwt = $0.13 savings per cwt of UF milk shipped 

$0.13 X 129 million cwt = $16.8 million 

CALCULATION OF LOWER BOUND OF TRANSPORTATION COST SAVINGS FOR 100% FLUID UF MILK REPLACEMENT

2% X 64,504 million lb = 1,290 million lb of milk shipped for other cheese production 

100% X 1,290 million lb = 1,290 million lb of milk filtered before shipment to cheese factory 

1,290 million lbs/100 lb = 12.9 million cwt of milk filtered before shipment 

73% of 17.1 cents/cwt = $0.13 savings per cwt of UF milk shipped 

$0.13 X 12.9 million cwt = $1.7 million 

60762 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

In terms of total transportation cost 

savings for all cheese production, this 

calculation gives an annual savings 

between $9 and $24 million for 

replacing milk with fluid UF milk in 

cheese production. While this is a cost 

savings over using milk in cheese 

production, it is not a savings over using 

NFDM. Reducing the moisture content 

of milk by two-thirds reduced the 

shipping costs by 73 percent, so it is 

reasonable to assume that NFDM with 

only 3.2 percent moisture (Ref. 40) and 

an increased shelf-life of 12 to 18 

months (Ref. 50) would be significantly 

less expensive to ship and store than UF 

milk. Compared with the baseline then, 

these savings would be reduced by an 

amount in excess of $7 million due to 

the actual increase in costs from 

replacing NFDM with fluid UF milk. 

The total annual benefits from using 

fluid UF milk to make standardized 

cheeses are uncertain, partly because 

the number of additional plants that 

would use the UF technology is 

uncertain. The cost savings also depend 

on the size of the plants that decide to 

invest, the amount of milk which cheese 

producers replace with fluid UF milk, 

and whether fluid UF milk replaces 

milk or NFDM in the production 

process. If all dairy plants switch to UF 

technology, the yield and coagulant 

savings would be high, but investment 

costs would also rise. If most plants 

already use this technology, or decide 

against investing, the yield, coagulant, 

and transportation savings would be 

low. If NFDM is not extensively used in 

current cheese production, the 

transportation savings will be greater. 

Finally, if larger plants already have UF 

technology the total capital investment 

costs will decrease but yield increases 

will not be as dramatic as only smaller 

systems will potentially invest as a 

result of changing the definition. 

In addition to the technical benefits in 

cheese production from allowing fluid 

UF milk to be used in standardized 

cheese production, amending the 

standards offers another economic 

benefit. Specifically, allowing fluid UF 

milk to be used as an ingredient in 

cheese would open the benefits of UF 

technology to a wider range of cheese 

manufacturers. Currently, fluid UF milk 

can be used in standardized cheese 

production only under ‘‘alternate make’’

procedures. Under the alternate make 

procedure provisions, manufacturers of 

cheese who purchase or produce milk in 

sufficient quantity to use UF technology 

may substitute the ultrafiltration of milk 

as a step in the cheese-making process 

as long as the final finished cheese has 

the same physical and chemical 

properties as the cheese produced under 

the procedure specified by the standard 

of identity. This provision only allows 

for the use of alternate procedures and 

not for alternate ingredients. Therefore, 

the use of UF technology must be within 

plant and within batch; fluid UF milk 

purchased from another plant, even 

within the same company, is considered 

an alternate ingredient. Allowing fluid 

UF milk as an ingredient effectively 

removes the barriers to shipment of 

fluid UF milk to cheese producers 

throughout the country and allows for 

greater competition in the market for 

cheese ingredients. 

As stated previously in this 

document, approximately 22 dairy 

manufacturing plants and four large 

dairy farms produce UF milk. It is 

difficult to ascertain how much of the 

UF milk is being used within plants 

under alternate make procedure 

provisions, and how much is being 

shipped to outside plants. Few records 

are kept either by the USDA or trade 

associations regarding intermediate 

products like fluid UF milk (See GAO 

report). In 1996, the FDA permitted a 

single New Mexico plant to produce 

cold UF milk for shipment to a cheesemaking plant in Minnesota for trial 

purposes only. Subsequently, the New 

Mexico plant is said to have increased 

shipments of UF milk to 15 plants 

throughout the country (Ref. 49). 

Allowing fluid UF milk to be used in 

standardized cheese production could 

significantly increase the number of 

plants using this cost-saving technology, 

particularly among smaller operations 

that cannot currently afford to purchase 

UF technology. These smaller cheese 

producers that cannot afford to filter 

milk as a step in the production process 

could purchase UF milk from a dairy 

processor. In 2002, there were 403 

cheese plants and 1,153 dairy 

manufacturing plants spread across all 

fifty states (Ref. 45) but only 26 dairy 

plants and farms were producing UF 

milk. The supply of UF milk is 

restricted by the current definition, 

potentially increasing its cost as an 

input to cheese production. 

Costs of Option 1: There are no health 

costs associated with the lower 

production costs of cheese made with 

fluid UF milk. 

If consumers prefer cheese made 

under the existing milk definition and if 

they purchase cheese made from fluid 

UF milk believing it to be made from 

milk under the existing definition, there 

will be a small cost incurred by the 

consumer. However, even though the 

total dollar amount spent on cheese is 

large (in 2000, the retail price of 1 lb of 

natural cheddar cheese was $3.83 (Ref. 

55) and 8.2 billion lb of all cheeses 

(excluding cottage cheeses) were 

produced (Ref. 45), for total consumer 

expenditure of $31.4 billion) the costs 

incurred from fluid UF milk are likely 

to be low because standardized cheeses 

do not tend to have credence attributes. 

Credence attributes are characteristics 

that consumers are willing to pay more 

for, even though they are not detectable 

after consumption (e.g., ‘‘dolphin-safe’’

tuna). The growth in the dairy products 

over the past 20 years has been largely 

attributed to increased demand for pizza 

and fast food products that contain 

cheese, particularly Mozzarella and 

American cheese (Ref. 56). These are not 

the varieties of cheese that tend to be 

associated with cheese connoisseurs 

who demand purity in cheese 

ingredients. There is no evidence that 

consumers place a premium on cheeses 

made under the existing definition, in 

particular because cheese made with UF 

technology must have the same physical 

and chemical properties as cheese made 

under the existing milk definition and 

because an unknown quantity of 

cheeses produced in the United States 

are already made using UF technology 

under the alternate make procedure 

provisions. 

The U.S. dairy market is regulated 

under both Federal and State 

regulations. The U.S. Government 

provides price supports for domestic 

milk production under the USDA’s 

Commodity Credit Corp. A potential 

drop in the demand for milk as cheese 

producers switch to fluid UF milk could 

result in the market price dropping 

below the support price, thus forcing 

the government to purchase a larger 

amount of milk. However, fluid UF milk 

is produced by separating the 

components of milk. Therefore, any 

decrease in the domestic demand for 

milk resulting from the production and 

sale of fluid UF milk will be off-set by 

a decrease in the supply of milk, as 

dairies ultrafilter some of their milk 

instead of selling it directly. As a result, 

the quantity of milk purchased by the 

government is left unchanged. Stated 

another way, if cheese producers 

purchase fluid UF milk instead of other 

milk, the demand for milk from cheese 

producers will fall, while the demand 

for fluid UF milk from cheese producers 

will rise. As a result, the dairy 

processors who find it profitable to do 

so will decrease their supply of milk 

and instead ultrafilter the milk before 

they sell it to the cheese producer. If no 

dairy processors find it profitable to 

ultrafilter their milk before selling it, 

then cheese producers will have no 

choice but to purchase milk, again 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60763 

leaving the amount purchased by the 

government unchanged. 

In addition, the U.S. Government 

provides export subsidies under the 

Dairy Export Incentive Program. Fluid 

UF milk is less expensive to transport 

than milk under the standard definition 

of milk in cheese, leading to fears that 

expanding the use of fluid UF milk may 

increase imports and further decrease 

the demand for domestic milk. As of the 

first 9 months of 2002, all UF milk 

imported into the United States was in 

a dry powder form categorized as MPC 

(Ref. 57). Therefore, allowing the use of 

fluid UF milk as an ingredient in the 

standard of identity of cheese should 

not cause foreign-produced UF milk to 

replace domestic milk in cheese 

production or cause U.S. Government 

purchases under the Commodity Credit 

Corp. to rise. 

Option 2: Allow fluid and dry UF milk 

in standardized cheese production 

This option would allow UF milk 

either in fluid or spray-dried form. Dry 

UF milk is often referred to as MPC, 

though the definition of MPC is not 

consistently used and sometimes 

includes other dried filtered or 

concentrated milk products. This option 

differs from the baseline and Option 1 

by substituting dry UF milk for NFDM 

or fluid UF milk as an ingredient in 

standardized cheeses. 

Benefits of Option 2: The protein 

composition of dry UF milk ranges from 

42 percent to 80 percent (Ref. 40), 

depending on the degree of 

concentration. In addition, as the 

protein concentration increases, the 

lactose content decreases from 46 

percent to just 4.1 percent at the highest 

concentrations. Therefore, the 

supplementation of cheese milk with 

dry UF milk during the manufacturing 

process produces even larger yield 

increases per vat than fluid UF milk or 

NFDM, thus further spreading out fixed 

costs (labor, equipment, physical 

facility) over more total weight of 

cheese. Given these larger cheese yield 

increases over fluid UF milk, it is safe 

to assume that the total yearly savings 

from using dry UF milk would exceed 

$172 million. In addition, the amount of 

rennet and starter cultures which are 

added to cheese milk can be reduced 

due to the higher solids content in the 

cheese milk. The rough figure of $11 

million savings in coagulant usage 

annually calculated in Option 1 is 

applicable here as well. 

Calculating the net social benefits to 

implementing UF technology requires 

subtracting out the private costs to firms 

of making the necessary capital 

investments. Similar to fluid UF milk, 

dry UF milk production occurs at the 

processing stage, usually at 

manufacturing plants or dairy 

cooperatives, so we assume no capital 

investment in equipment by the cheese 

producer is needed to take advantage of 

dry UF technology for low 

concentration UF milk replacement. 

Cheese producers can simply replace a 

portion of milk with dry UF milk 

purchased from a dairy processor 

without purchasing new equipment. 

The costs of implementing dry UF 

technology varies among different types 

of dairy processors and will depend on 

their current production technology. If a 

dairy processor already produces UF 

milk and NFDM, there is no additional 

cost to allowing the extended definition 

of milk in standardized cheese. If a 

processor collects milk from fewer than 

100 cows, it may not be economically 

feasible to implement the UF process, 

making dry UF milk production 

impossible even if the dairy processor 

has appropriate drying technology. If a 

dairy processor collects milk from 100 

to 4,000 cows and is not currently 

producing UF milk, then the cost of 

implementing a UF system ranges from 

$175,000 to $350,000, depending on the 

size of the plant. If a processor collects 

milk from 4,000 or more cows and is not 

currently producing UF milk, then the 

cost of purchasing UF equipment ranges 

from $350,000 for a recirculating system 

to $1,372,500 for a single-pass system. 

Using the same method as Option 1, the 

total one time capital expenditure for 

dairy processors who sell their products 

to cheese producers would be $118 to 

$237 million. If the dairy processor does 

not own a spray dryer, additional 

capital costs would be necessary, on the 

order of $750,000 (Ref. 58). If half of all 

703 dairy plants had to purchase this 

equipment, the one-time capital 

expenditure would grow by $264 

million for a total of $382 to $501 

million. Given that the UF equipment 

depreciates over 7 to 14 years (Ref. 1), 

we estimated the annualized cost over a 

10-year period. With a 3-percent interest 

rate, the annualized cost ranges from 

$45 to $59 million. With a 7-percent 

interest rate, the annualized cost ranges 

from $54 to $71 million. The annualized 

cost ranges indicate the capital 

expenditure ranges based on the 

equipment capacity needs described 

previously in this document. 

Similar to NFDM, spray-drying UF 

milk significantly increases the shelf-life 

of the milk. Using such milk powders 

can eliminate the natural daily and 

seasonal variation that occurs in milk 

composition (by standardizing the ratio 

of casein to fat). In addition, the ability 

to store dry UF milk allows the cheese 

producer to offset the volatility of fresh 

milk prices (Ref. 9) and be better able to 

balance seasonal imbalances than milk 

or fluid UF milk. 

The transportation and storage costs 

associated with dry UF milk are lower 

than either milk or fluid UF milk due to 

the removal of approximately 95 percent 

of the water, lactose, and ash (Ref. 40) 

during the ultrafiltration and 

subsequent drying processes. The 

moisture content of dry UF milk is 

similar to that of NFDM; therefore, it is 

reasonable to assume that shipping and 

storage costs would also be similar for 

replacing NFDM with dry UF milk in 

protein standardization. If NFDM is not 

being used for protein standardization, 

then dry UF milk could offer substantial 

benefits compared to the transportation 

and storage of milk, possibly reducing 

these costs up to 95 percent. 

A review of the literature found no 

manufacturers of dry UF milk in the 

United States; however, informal 

conversations with industry 

representatives revealed one joint 

venture in New Mexico that currently 

produces dry UF milk and possibly 

another firm in New York (Ref. 59). 

Little is known about the cost of 

producing dry UF milk, and why there 

is little to no U.S. production is a matter 

of some debate. The price floor set by 

the U.S. Dairy Price Support Program 

for NFDM is often cited as the cause. At 

the current levels of government 

purchase prices for milk protein, U.S. 

manufacturers of dry UF milk products 

would obtain the same or lower return 

per pound of protein than they would 

for producing NFDM. Given the higher 

manufacturing costs associated with UF 

technology, dairy producers in the 

United States are often better off 

producing NFDM and selling it to the 

government than producing dry UF milk 

products for cheese and other food uses 

(Ref. 60). Foreign firms who currently 

export dry UF milk to the United States 

have greater incentive to open their own 

plants in the United States, as it would 

reduce their transportation and tariff 

costs. 

Costs of Option 2: There are no health 

costs associated with the lower 

production costs of cheese made with 

fluid or dry UF milk. 

If consumers prefer cheese made 

under the existing milk definition and if 

they purchase cheese made from dry UF 

milk believing it to be made from milk 

under the existing definition, there will 

be a small cost incurred by the 

consumer. However, even though the 

total dollar amount spent on cheese is 

large (about $31.4 billion in 2000) the 

costs incurred from dry UF milk are 

likely to be low because standardized 

cheeses do not tend to have credence 

60764 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

attributes and there is no evidence that 

consumers place a premium on cheeses 

made under the existing definition. 

Cheese made with UF technology must 

have the same physical and chemical 

properties as cheese made under the 

existing definition of milk within the 

cheese standards. 

There is some concern over whether 

allowing dry UF milk (presumably 

imported from other countries) in the 

definition of milk in cheese would 

displace purchases of other dairy 

substitutes that are domestically 

produced. A drop in the demand for 

milk or NFDM as cheese producers 

switch to purchasing dry UF milk could 

result in the market price dropping 

below the support price, thus forcing 

the government to purchase a larger 

amount of milk. In addition, since dry 

UF milk is much less expensive to 

transport than milk and even fluid UF 

milk, expanding the use of dry UF milk 

may increase imports and further 

decrease the demand for domestic milk. 

As in the case with fluid UF milk, if 

domestic production of dry UF milk 

increases as a result of the change in 

definition, any decrease in the domestic 

demand for milk resulting from the 

production and sale of dry UF milk 

would be offset by an decrease in the 

supply of milk, as dairies ultrafilter and 

dry some of their milk instead of selling 

it directly. As a result, the quantity of 

milk purchased by the government 

would be left unchanged. However, 

unlike fluid UF milk, dry UF milk is 

imported from other countries with no 

restrictions on the quantity and under a 

very low tariff rate (Ref. 60). The U.S. 

Government does not directly support 

the price of dry UF milk under the 

Credit Commodity Corp., purchases; 

however, if foreign-produced dry UF 

milk is substituted in production for 

NFDM and other milk products, 

increases in dry UF milk imports would 

cause government purchases of dairy 

products to increase. If, on the other 

hand, allowing dry UF milk to be used 

in the production of standardized 

cheese causes domestic manufacturers 

of NFDM to produce dry UF milk 

instead, the amount of government 

purchases of NFDM may actually 

decrease as resources shift to the new 

product. 

The inconsistency with which the 

term MPC is used makes it difficult to 

discern how much foreign-produced dry 

UF milk is being imported into FDA’s 

Operational and Administrative System 

for Import Support (OASIS) database 

includes MPC as a separately 

identifiable product; however, many 

dried dairy substances other than dry 

UF milk are also included in this 

category, including milk protein isolate, 

whey protein concentrate, whey protein 

isolate, casein, milk protein stabilizer, 

emulsifier or binder, peptones, and total 

milk proteinate. Without a standard 

definition for MPC it is not clear that 

even imports labeled specifically as 

MPC are 100 percent dry UF milk. 

In his analysis of MPC imports and 

the commercial disappearance of 

NFDM, Jesse (Ref. 60) separated the 

concentrated milk protein imports into 

the following four categories: MPC, 

Casein-MPC, Casein, and Caseinates/ 

Other Casein Derivatives. Then, looking 

only at the category of MPCs, imports 

increased steadily between 1989 and 

1997, at a rate of about 4,200 metric tons 

per year. From 1998 through 2000, 

imports started growing even more 

rapidly, with an average rate of growth 

at 18,000 metric tons per year (Ref. 60). 

However, 2001 and 2002 saw a reversal 

of this trend, with imports falling from 

52,900 metric tons in 2000 to 28,500 

metric tons in 2001 (Ref. 57). Estimates 

of 2002 imports were expected to total 

about 35,000 tons, about a 23 percent 

increase (Ref. 60). A news release 

published after the second quarter of 

2003 by the National Milk Producers 

Federation states that MPC imports were 

up 39 percent from the first half of 2002 

and approaching year 2000 levels (Ref. 

61). 

The impact of these imports increases 

in significance as USDA purchases more 

NFDM under the Commodity Credit 

Corp. The USDA had 1.2 billion lb of 

NFDM in warehouses, and program cost 

overruns were almost $3 billion more 

than its original $1.3 billion estimate in 

mid-2003 (Ref. 62). The negative impact 

on dairy production in the United States 

attributable to the MPC imports is 

uncertain, according to Jesse (Ref. 60) 

somewhere between ‘‘an amount much 

smaller than government purchases’’ of 

NFDM to an amount that ‘‘exceeds 

government purchases, and that excess 

cheese supplies augmented by MPC and 

other milk proteins have depressed the 

cheese market.’’ He estimated 

displacement of NFDM into government 

purchases at almost 430 million lb in 

2002, though he added that his 

estimates ‘‘very likely err on the high 

side.’’ Bailey (Ref. 56), who separated 

‘‘dry whey’’ and ‘‘casein’’ from MPCs, 

looked at this question from a cost 

angle. He estimated that MPC imports 

between 1996 and 2000 increased the 

cost the dairy price support program by 

about $572 million (Ref. 56). 

Option 3: Allow all filtration methods 

that result in a fluid milk product to be 

used in standardized cheese production 

This option would allow fluid UF 

milk as well as milk processed with 

other filtration technologies, most 

notably microfiltration, as long as no 

nonmilk derived ingredients are added 

in the preparation of the liquid 

concentrates. This option differs from 

the baseline by permitting the 

substitution of fluid UF and MF milk for 

NFDM. This technology and the 

resulting product, sometimes referred to 

as Native Milk Casein Concentrates, is 

not currently available. However, the 

availability of the ingredient may be 

driven by outside food manufacturers 

who fractionate milk proteins to harvest 

milk serum proteins leaving the native 

milk casein concentrate for sale to 

cheese manufacturers in the near future 

(Ref. 9). 

Benefits of Option 3: The benefits 

from allowing fluid MF milk as an 

ingredient in cheese manufacture are 

similar to the benefits from allowing 

fluid UF milk due to similar levels of 

protein, lactose, and moisture (Ref. 63) 

(see table 1 of this document). There are 

other potential benefits from fluid MF 

milk that fluid UF milk does not offer. 

First, microfilters have larger pore 

structures than ultrafilters, allowing 

more whey proteins to pass through the 

membrane. If the cheese producers are 

purchasing MF milk, they will have less 

whey to remove in later steps of the 

cheese-making process. Second, some 

industry experts believe that MF is the 

new direction of cheese fortification 

process because it has the potential for 

continuous cheese making without vats 

for more varieties of cheese (Refs. 9 and 

64). 

Costs of Option 3: Because fluid MF 

milk is not yet available to cheese 

makers, it is difficult to determine how 

the costs would differ from NFDM. 

Because of the similar process to 

producing fluid UF milk, the costs are 

assumed to also be similar to Option 2. 

Option 4: Allow all filtration methods 

that result in a fluid or dried milk 

product to be used in standardized 

cheese production 

This option would allow milk used in 

the production of cheese to be 

supplemented with UF milk as well as 

milk forms derived from other filtration 

technologies, most notably 

microfiltration, as long as no nonmilk 

derived ingredients had been added in 

the preparation of these liquid or dried 

concentrates. This option differs from 

the baseline by substituting both fluid 

and dry UF and MF milk for NFDM as 

the protein standardization ingredient. 

As with fluid MF milk, this technology 

and the resulting product, sometimes 

referred to as Native Milk Casein 

Concentrates, is not currently available. 

However, the availability of the 

ingredient may be driven by outside 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60765 

food manufacturers who fractionate 

milk proteins to harvest milk serum 

proteins, leaving the native milk casein 

concentrate for sale to cheese 

manufacturers in the near future (Ref. 

9). 

Benefits of Option 4: The benefits of 

allowing fluid or dry MF milk as an 

ingredient in cheese build on the 

benefits of Option 3, which allows for 

fluid MF milk. In addition to those 

benefits, allowing dry MF milk has 

decreased transportation and storage 

costs similar to NFDM and dry UF milk. 

Costs of Option 4: Because neither 

fluid nor dry MF milk is available to 

cheese producers, we are unable to 

estimate how costs would differ from 

NFDM. Dry MF milk, being similar in 

manufacture to dry UF milk, would be 

subject to similar costs, including 

foreign trade and domestic purchase 

adjustments. 

Option 5: Allow all milk and products 

obtained from milk to be used in cheese 

production, in agreement with the 

Codex general standard for cheese 

This option would allow milk to be 

manufactured with ‘‘milk and/or 

products obtained from milk’’ and 

would mirror the Codex general 

standard for cheese (Ref. 25). This 

option differs from the baseline by 

allowing any milk derived ingredient to 

be used as either the sole ingredient or 

the protein-standardizing replacement 

ingredient in cheese production. This 

option would include isolates of casein 

that contain up to 94 percent protein 

and little to no lactose. These isolates 

are not currently manufactured in the 

United States, but have been used in 

other countries as a fortification 

ingredient (Ref. 9). This option would 

also allow for dry blends of different 

milk derived ingredients, including 

NFDM, dry UF milk, isolated casein, 

and whey protein concentrate. 

Benefits of Option 5: The benefits to 

opening the standard to all ‘‘milk and/ 

or products obtained from milk’’ are not 

certain, but would allow cheese 

producers full freedom in choosing 

inputs to maximize their own 

production yields and profits. 

Costs of Option 5: The costs to 

opening the standard to all ‘‘milk and/ 

or products obtained from milk’’ are not 

certain. There may be domestic and 

international market adjustments 

leading to U.S. Government purchases 

of domestic dairy products. 

D. Summary of Costs and Benefits 

The total annual costs and benefits 

from amending the definition of milk 

used to produce standardized cheeses 

are uncertain, though FDA does not 

have concerns from a food safety 

standpoint. The uncertainty stems from 

several diverse factors: 

• The number of plants that would 

implement UF or other filtration 

technology, 

• The number of plants that already 

use UF technology, 

• The number of plants that already 

use spray-drying technology, 

• The size of the plants that would 

decide to invest in new technology, 

• The percent of milk that cheese 

producers would replace with UF milk 

in cheese making, and 

• Whether UF milk replaces milk or 

NFDM in the production process 

Table 2 of this document highlights 

the quantified annual costs and benefits 

of Options 1 through 5 using the 

assumptions and calculations described 

in the text. 

TABLE 2.—COSTS AND BENEFITS SUMMARY

Option 1 Option 2 Option 3 Option 4 Option 5 

Annualized 

Investment 

$14–$28 million1

$17–$34 million2

$45–$59 million1

$54–$71 million2

Unknown Unknown Unknown 

Yield Increase $172 million $172 million Unknown Unknown Unknown 

Transportation Savings < $9 to $24 million > $9 to $24 million Similar to 

Option 1 

Similar to Option 

2 

Unknown 

Rennet & Starter Savings $11 million $11 million Unknown Unknown Unknown 

Benefits (net savings in production costs) $164–$193 million1

$158–$190 million2

$133–$162 million1

$121–$153 million2

Unknown Unknown Unknown 

Government Programs No increase in 

government 

purchases or 

trade impacts 

Potential for increase in government purchases of 

NFDM 

Unknown Unknown Unknown 

Costs (change in government program costs) None Uncertain Unknown Unknown Unknown 

1At 3 % interest. 

2At 7 % interest. 

FDA does not currently have a best 

estimate on the cost savings of this 

proposed rule and seeks comment on all 

areas of uncertainty listed previously in 

this document. FDA believes Options 1 

and 2, if implemented, would lead to 

social benefits potentially as high as 

$190 million at a 7 percent annualized 

investment rate ($193 million at 3 

percent) and $153 million ($162 million 

at 3 percent), respectively. Options 3 

through 5 are difficult to quantify based 

on the smaller amount of research into 

new filtration and separation 

technologies in the dairy industry. 

These options lead to increasingly 

greater flexibility for cheese producers 

to maximize their own production 

yields and profits and have the potential 

to provide benefits to the cheese 

industry in the future. 

IV. Small Entity Analysis 

FDA has examined the economic 

implications of this proposed rule as 

required by the Regulatory Flexibility 

Act (5 U.S.C. 601–612). If a rule has a 

60766 Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 

significant economic impact on a 

substantial number of small entities, the 

Regulatory Flexibility Act requires 

agencies to analyze regulatory options 

that would lessen the economic effects 

of the rule on small entities. FDA finds 

that this proposed rule would have a 

significant economic impact on a 

substantial number of small entities. 

The Small Business Administration 

(SBA) considers a dairy manufacturer, 

which includes cheese manufacturers, 

to be small if it employs fewer than 500 

workers. Table 3 of this document lists 

the dairy manufacturing statistics by 

employment size from the U.S. Census 

Bureau’s 1997 Economics Census for the 

three industries most likely to be 

impacted by this proposed rule. The 

total number of firms listed in table 3 of 

this document is different from earlier 

parts of the analysis because the earlier 

estimates were derived from 2002 USDA 

data but the most recent Economic 

Census data available is for 1997. 

TABLE 3.–DAIRY MANUFACTURING STATISTICS BY EMPLOYMENT SIZE

Total Number Of Firms Number of Firms with Less 

than 500 Employees 

Percent of Industry that is 

‘‘Small’’

Cheese Manufacturing 524 518 98 .9 

Fluid Milk Manufacturing 612 605 98 .9 

Dry, Condensed, and Evaporated Dairy Manufacturing 213 208 97 .7 

Source: U.S. Census Bureau, 1997 Economic Census June 24, 1999 Manufacturing—Industry Series. 

Based on the SBA definition of small 

business for the dairy manufacturing 

industries, almost all dairy and cheese 

manufacturers qualify. However, 

Blayney and Manchester found that 

large dairy manufacturing companies 

and cooperatives, those percent with 

food and nonfood sales in 1998 of $800 

million or more, accounted for almost 

70 percent of the industry (Ref. 65). Of 

this 70 percent, large proprietary 

companies accounted for 42 percent and 

large cooperatives for 27 percent. The 

remainder of the industry was divided 

between smaller companies, including 

cooperatives (Ref. 65). 

The dairy industry in the United 

States exhibits substantial economies of 

scale and, historically, small dairy farms 

have found ways of combining their 

resources to be able to compete in the 

industry. The 1960s saw a wave of 

mergers and consolidations, leading to 

almost a complete conversion to ‘‘bulk 

handling and processing’’ of milk at 

plants in the 1970s. This trend has 

continued with ever-decreasing 

numbers of processors handling everincreasing volumes of milk (Ref. 47). 

FDA believes that if cheese 

manufacturers demand UF milk, dairy 

cooperatives will adjust in order to keep 

themselves and their individual 

members viable in the market. In 1997, 

the last year the USDA did a 

comprehensive survey of dairy 

cooperatives, dairy cooperatives 

handled 83 percent of all milk delivered 

to plants and dealers in the United 

States, and 98 percent of the milk 

received by cooperatives came directly 

from member producers (Ref. 53). These 

cooperatives are diverse in size, but the 

average handles 564 million lb 

annually, well above the 2.2 million lb 

requirement of production from 100 

cows. According to the National Milk 

Producers Federation (NMPF) Web site, 

the average U.S. dairy cow produces 

about 7 gallons of milk per day (Ref. 66). 

To calculate the minimum weight to 

make UF technology financially 

feasible, we multiplied 100 cows by 7 

gallons per day by 365 days per year to 

get 255,500 gallons per year. We then 

multiplied the product by 8.62 lb per 

gallon (NMPF Web site) to get 2,202,410 

lb per year. FDA seeks comment on the 

financial burden investing in UF 

technology imposes on dairy processors 

and cheese manufacturers, particularly 

small entities. 

In addition, small milk operations 

combined in cooperatives may be able 

to gain additional benefits from UF 

technology if they are able to market 

their products in a larger geographic 

region as a result of the lower shipping 

costs. This issue may be important if 

dairies develop in remote locations 

around the country as Mermelstein (Ref. 

48) has suggested, or if there is a 

geographical shift in the production of 

either cheese or its components. Milk 

production in the West, as a percentage 

of total U.S. production, has increased, 

and there is some concern that 

Midwestern cheese producers will 

become ‘‘milk-starved’’ (Ref. 49). 

National Agricultural Statistics Services 

data over the past 9 years has shown a 

significant increase in milk production 

in the West, up to 38 percent of the U.S. 

total in 2001 and 2002. However, these 

data also show a significant increase in 

cheese production in the Western States 

over this same time period, up to 37 

percent in 2001 and 38 percent in 2002 

(Ref. 67). The significantly lower 

hauling costs for filtered milk may 

enable small milk processors and cheese 

producers to ship ingredients over 

longer distances to meet manufacturing 

needs. 

V. Unfunded Mandates 

Title II of the Unfunded Mandates 

Reform Act of 1995 (Public Law 104–4) 

requires cost-benefit and other analyses 

before any rule making if the rule would 

include a ‘‘Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (annually adjusted for inflation) 

in any 1 year.’’ The current inflationadjusted statutory threshold is $113 

million. FDA has determined that this 

proposed rule does not constitute a 

significant rule under the Unfunded 

Mandates Reform Act. 

VI. Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA) Major Rule 

The SBREFA (Public Law 104–121) 

defines a major rule for the purpose of 

congressional review as having caused 

or being likely to cause one or more of 

the following: an annual effect on the 

economy of $100 million; a major 

increase in cost or prices; significant 

adverse effects on competition, 

employment, productivity, or 

innovation; or significant adverse effects 

on the ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic or export 

markets. In accordance with the 

SBREFA, the Office of Management and 

Budget (OMB) has determined that this 

proposed rule is a major rule for the 

purpose of congressional review. 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60767 

VII. Federalism 

FDA has analyzed this proposed rule 

in accordance with the principles set 

forth in Executive Order 13132. FDA 

has determined that the rule would have 

a preemptive effect on state law. Section 

4 (a) of the Executive Order requires 

agencies to ‘‘construe * * * a Federal 

Statute to preempt State law only where 

the statute contains an express 

preemption provision, or there is some 

other clear evidence that the Congress 

intended preemption of State law, or 

where the exercise of State authority 

conflicts with the exercise of Federal 

authority under the Federal statute.’’

Section 403A of the act (21 U.S.C. 343–

1) is an express preemption provision. 

Section 403A(a)(1) provides that: 

* * * no State or political subdivision of 

a State may directly or indirectly establish 

under any authority or continue in effect as 

to any food in interstate commerce-(1) any 

requirement for a food which is the subject 

of a standard of identity established under 

section 401 that is not identical to such 

standard of identity or that is not identical 

to the requirement of section 403(g).*** 

This proposed rule makes changes to 

the general provisions related to the 

standards of identity for cheeses and 

related cheese products. Although this 

rule would have a preemptive effect in 

that it would preclude States from 

promulgating requirements for 

standardized cheese and cheese 

products that are not identical to the 

standards as amended by this proposal, 

this preemptive effect is consistent with 

what Congress set forth in section 403A 

of the act. 

Section 4(c) of the Executive Order 

further requires that ‘‘any regulatory 

preemption of State law shall be 

restricted to the minimum level 

necessary’’ to achieve the regulatory 

objective. Under section 401 of the act 

(21 U.S.C. 341), ‘‘[w]henever in the 

judgment of the Secretary such action 

will promote honesty and fair dealing in 

the interest of consumers, he shall 

promulgate regulations fixing and 

establishing for any food * * * a 

reasonable definition and standard of 

identity.***’’ Further, section 4(e) 

provides that ‘‘when an agency proposes 

to act through adjudication or 

rulemaking to preempt State law, the 

agency shall provide all affected State 

and local officials notice and an 

opportunity for appropriate 

participation in the proceedings.’’ FDA 

is providing an opportunity for State 

and local officials to comment on this 

rulemaking. For the reasons set forth 

above, the agency believes that it has 

complied with all of the applicable 

requirements under the Executive order. 

In conclusion, FDA has determined 

that the preemptive effect of the 

proposed rule would be consistent with 

Executive Order 13132. 

VIII. Environmental Impact 

We have determined under 21 CFR 

25.32(p) that this action is of the type 

that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

IX. Paperwork Reduction Act of 1995 

FDA tentatively concludes that this 

proposed rule contains no collection of 

information. Therefore, clearance by 

OMB under Paperwork Reduction Act of 

1995 is not required. 

X. Comments 

Interested persons may submit to the 

Division of Dockets Management (see 

ADDRESSES) written or electronic 

comments regarding this document. 

Submit a single copy of electronic 

comments or two paper copies of any 

mailed comments, except that 

individuals may submit one paper copy. 

Comments are to be identified with the 

docket number found in brackets in the 

heading of this document. Received 

comments may be seen in the Division 

of Dockets Management between 9 a.m. 

and 4 p.m., Monday through Friday. 

XI. References 

The following references have been 

placed on public display in the Division 

of Dockets Management (see ADDRESSES) 

and may be seen by interested persons 

between 9 a.m. and 4 p.m., Monday 

through Friday. (FDA has verified the 

Web site addresses, but FDA is not 

responsible for any subsequent changes 

to the Web sites after this document 

publishes in the Federal Register.) 

1. Cheryan, M., Ultrafiltration and 

Microfiltration Handbook, 2d ed., CRC Press 

LLC, Boca Raton, FL, chapters 1 and 3 and 

pp. 349–369, 1998. 

2. Rosenberg, M., ‘‘Current and Future 

Applications for Membrane Processes in the 

Dairy Industry,’’ Trends in Food Science and 

Technology, 6:12–19, 1995. 

3. Smith, K.E., Background on Milk Protein 

Products, Dairy Proteins, prepared by the 

Wisconsin Center for Dairy Research and the 

Wisconsin Milk Marketing Board, 2001. 

4. GAO report, ‘‘Dairy Products: Imports, 

Domestic Production, and Regulation of 

Ultra-filtered Milk,’’ March, GAO–01–326, 

2001. 

5. Letter to FDA from Mr. Ted Jacoby, Jr., 

T.C. Jacoby & Company, Inc., May 1, 1996 

6. Letter to Mr. Ted Jacoby, Jr., T.C. Jacoby 

& Company, Inc., from FDA, October 21, 

1996. 

7. Letter to Mr. F. Tracy Schonrock, USDA 

from FDA, October 21, 1999. 

8. Letter to Mr. Clay Hough, International 

Dairy Foods Association from FDA, April 6, 

2005. 

9. Babano, D.M., ‘‘ Making Cheese From 

Higher Solids Milk: Advantages and Pitfalls,’’

Proceedings of the 37th annual Marschall 

cheese seminar, Visalia, CA, 2000. 

10. Mistry, V.V. and J-L. Maubois, 

‘‘Application of Membrane Separation 

Technology to Cheese Production,’’ Cheese: 

Chemistry, Physics and Microbiology : 

General Aspects, 3rd edition (Volume 1), Eds: 

Fox, P.F., P.L.H McSweeney, T.M. Cogan, 

and T.P. Guinee, Elsevier Academic Press, 

London. pp. 261–285. 

11. Acharya, M.R. and V.V. Mistry, 

‘‘Comparison of Effect of Vacuum-Condensed 

and Ultrafiltered Milk on Cheddar Cheese,’’

Journal of Dairy Science, 87:4004–4012, 

2004. 

12. Hydamaka, A.W., R.A. Wilbey, M.J. 

Lewis, et al., ‘‘Manufacture of Heat and Acid 

Coagulated Cheese From Ultrafiltered Milk 

Retentates,’’ Food Research International, 

34:197–205, 2001. 

13. Rodriguez, J., T. Requena, J. Fontecha, 

et al., ‘‘Effect of Different Membrane 

Separation Technologies (Ultrafiltration and 

Microfiltration) on the Texture and 

Microstructure of Semihard Low-Fat 

Cheeses,’’ Journal of Agricultural and Food 

Chemistry, 47:558–565, 1999. 

14. Kosikowski, F.V., A.R., Masters, and 

V.V. Mistry, ‘‘Cottage Cheese From RetentateSupplemented Skim Milk,’’ Journal of Dairy 

Science, 68:541–547, 1985. 

15. Kealey, K.S. and F.V. Kosikowski, 

‘‘Cottage Cheese From Ultrafiltered Skim 

Milk Retentates in Industrial Cheese 

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Retail Price Spreads for Individual Food 

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#80, 2003. 

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List of Subjects in 21 CFR Part 133 

Cheese, Food grades and standards, 

Food labeling. 

Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs and re-delegated to 

the Director of the Center for Food 

Safety and Applied Nutrition, it is 

proposed that 21 CFR part 133 be 

amended as follows: 

PART 133—CHEESES AND RELATED 

CHEESE PRODUCTS 

1. The authority citation for 21 CFR 

part 133 continues to read as follows: 

Authority: 21 U.S.C. 321, 341, 343, 348, 

371, 379e. 

2. Section 133.3 is amended by 

revising paragraphs (a) and (b) and by 

adding new paragraphs (f) and (g) to 

read as follow: 

§ 133.3 Definitions. 

(a) Milk means the lacteal secretion, 

practically free from colostrum, 

obtained by the complete milking of one 

or more healthy cows, which may be 

clarified and may be adjusted by 

separating part of the fat therefrom; 

concentrated milk, reconstituted milk, 

and dry whole milk. Water, in a 

sufficient quantity to reconstitute 

concentrated and dry forms, may be 

added. For the purposes of this part, 

wherever the term ‘‘milk’’ appears in the 

individual standards for cheeses and 

related cheese products, ultrafiltered 

milk as described in paragraph (f) of this 

section, may be used. 

(b) Nonfat milk means skim milk, 

concentrated skim milk, reconstituted 

skim milk, and nonfat dry milk. Water, 

in a sufficient quantity to reconstitute 

concentrated and dry forms, may be 

added. For the purposes of this part, 

wherever the term ‘‘nonfat milk’’

appears in the individual standards for 

cheeses and related cheese products, 

ultrafiltered nonfat milk as described in 

paragraph (g) of this section, may be 

used. 

* * * * * 

Federal Register / Vol. 70, No. 201 / Wednesday, October 19, 2005 / Proposed Rules 60769 

(f) Ultrafiltered milk means raw or 

pasteurized milk that is passed over one 

or more semipermeable membranes to 

partially remove water, lactose, 

minerals, and water-soluble vitamins 

without altering the casein:whey protein 

ratio of the milk and resulting in a 

liquid product. 

(g) Ultrafiltered nonfat milk means 

raw or pasteurized nonfat milk that is 

passed over one or more semipermeable 

membranes to partially remove water, 

lactose, minerals, and water-soluble 

vitamins without altering the 

casein:whey protein ratio of the nonfat 

milk and resulting in a liquid product. 

Dated: October 7, 2005. 

Leslye M. Fraser, 

Director, Office of Regulations and Policy, 

Center for Food Safety and Applied Nutrition. 

[FR Doc. 05–20874 Filed 10–18–05; 8:45 am] 

BILLING CODE 4160–01–S 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[R05–OAR–2005–IN–0003; FRL–7981–9] 

Approval and Promulgation of Air 

Quality Implementation Plans; Indiana 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

a request from the Indiana Department 

of Environmental Management (IDEM) 

to revise the Indiana State 

Implementation Plan (SIP) in three 

areas: To amend the definition of 

‘‘particulate matter,’’ and ‘‘ambient air 

quality standards,’’ add new rules 

consistent with these amended 

definitions, and amend rules pertaining 

to sulfur dioxide (SO2) and nitrogen 

dioxide (NO2) ambient standards; to 

update the references to the Code of 

Federal Regulations (CFR) from the 2000 

edition to the 2002 edition; and to add 

‘‘credible evidence provisions’’ into 

state rules consistent with federal 

requirements. 

In the final rules section of this 

Federal Register, EPA is approving the 

SIP revision as a direct final rule 

without prior proposal, because EPA 

views this as a noncontroversial 

revision and anticipates no adverse 

comments. A detailed rationale for the 

approval is set forth in the direct final 

rule. If we do not receive any adverse 

comments in response to these direct 

final and proposed rules, we do not 

contemplate taking any further action in 

relation to this proposed rule. If EPA 

receives adverse comments, we will 

withdraw the direct final rule and will 

respond to all public comments in a 

subsequent final rule based on this 

proposed rule. EPA will not institute a 

second comment period on this action. 

Any parties interested in commenting 

on this action should do so at this time. 

DATES: Written comments must be 

received on or before November 18, 

2005. 

ADDRESSES: Submit comments, 

identified by Regional Material in 

EDocket (RME) ID No. R05–OAR–2005–

IN–0003 by one of the following 

methods: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the on-line 

instructions for submitting comments. 

Agency Web site: http:// 

docket.epa.gov/rmepub/. RME, EPA’s 

electronic public docket and comment 

system, is EPA’s preferred method for 

receiving comments. Once in the 

system, select ‘‘quick search,’’ then key 

in the appropriate RME Docket 

identification number. Follow the 

online instructions for submitting 

comments. 

E-mail: mooney.john@epa.gov. 

Fax: (312) 886–5824. 

Mail: You may send written 

comments to: 

John M. Mooney, Chief, Criteria 

Pollutant Section, (AR–18J), U.S. 

Environmental Protection Agency, 77 

West Jackson Boulevard, Chicago, 

Illinois 60604. 

Hand delivery: Deliver your 

comments to: John M. Mooney, Chief, 

Criteria Pollutant Section (AR–18J), U.S. 

Environmental Protection Agency, 

Region 5, 77 West Jackson Boulevard, 

18th floor, Chicago, Illinois 60604. 

Such deliveries are only accepted 

during the Regional Office’s normal 

hours of operation. The Regional 

Office’s official hours of business are 

Monday through Friday, 8:30 a.m. to 

4:30 p.m. excluding federal holidays. 

Instructions: Direct your comments to 

RME ID No. R05–OAR–2005–IN–0003. 

EPA’s policy is that all comments 

received will be included in the public 

docket without change, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through RME, regulations.gov, 

or e-mail. The EPA RME Web site and 

the Federal regulations.gov Web site are 

‘‘anonymous access’’ systems, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through RME or 

regulations.gov, your e-mail address 

will be automatically captured and 

included as part of the comment that is 

placed in the public docket and made 

available on the Internet. If you submit 

an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. For additional instructions on 

submitting comments, go to section I(B) 

of the SUPPLEMENTARY INFORMATION

section of this document. 

Docket: All documents in the 

electronic docket are listed in the RME 

index at http://www.epa.gov/rmepub/. 

Although listed in the index, some 

information is not publicly available, 

i.e., CBI or other information whose 

disclosure is restricted by statute. 

Publicly available docket materials are 

available either electronically in RME or 

in hard copy at Environmental 

Protection Agency, Region 5, Air and 

Radiation Division, 77 West Jackson 

Boulevard, Chicago, Illinois 60604. 

(Please telephone Julie Henning at (312) 

886–4882 before visiting the Region 5 

Office.) 

FOR FURTHER INFORMATION CONTACT: Julie 

Henning, Environmental Protection 

Specialist, State and Tribal Planning 

Section, Air Programs Branch (AR–18J), 

USEPA, Region 5, 77 West Jackson 

Boulevard, Chicago, Illinois 60604, 

(312) 886–4882. Henning.julie@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. What Should I Consider as I Prepare My 

Comments for EPA? 

II. What Action Is EPA Taking Today? 

III. Where Can I Find More Information 

About This Proposal and the 

Corresponding Direct Final Rule? 

I. General Information 

A. What Should I Consider as I Prepare 

My Comments for EPA? 

1. Submitting CBI. Do not submit CBI 

to EPA through RME, regulations.gov or 

e-mail. Clearly mark the part or all of 

the information that you claim to be 

CBI. For CBI information in a disk or CD 

ROM that you mail to EPA, mark the 

outside of the disk or CD ROM as CBI 

and then identify electronically within 

the disk or CD ROM the specific