Dairy industry navigates uncharted territory amid COVID-19 pandemic

By Sherry Bunting, Farmshine, Friday, March 20, 2020 (updated March 24)

BROWNSTOWN, Pa. — The ‘new normal’ brought on by the novel Coronavirus / COVID-19 global pandemic evolves rapidly as the U.S. is partway through the 15-day “flatten the curve” effort deemed critical by health officials. Federal, state and local governments worked together to launch the 15-day mitigation strategy early last week to blunt the trajectory of viral transmission so that it does not overwhelm medical and caregiving infrastructure when the virus is expected to reach its peak in 45 days.

The effort led to closures and cancellations of non-essential activities, with some large cities and highly affected states moving to “shelter in place” strategies.

National state of emergency

A national state of emergency was declared March 13. Alongside the more restrictive guidelines, new drive-through testing sites became available in all 50 states, and the Trump Administration cleared the way for certain anti-viral therapies used for other illnesses to move forward through FDA after trials showed positive results.

A 2 trillion-dollar response and aid package is also moving through Congress, and by March 18, President Donald Trump had invoked war powers to utilize military medical resources and ramp up private sector production of items needed to combat the virus.

A key difference from Influenza, say scientists, is COVID-19’s much more rapid rate of transmission and the current lack of management tools like vaccines and anti-viral therapies, making its burden to medical infrastructure a key concern.

Meanwhile, hospitals and health systems adopt strict visitation rules, take stock of bed and equipment capacity, and work through triage plans.

Markets and trade

Financial markets had steep losses again this week in response to the economy slowing to a virus-induced crawl. Travel restrictions and lack of availability of shipping containers are reported as just some of the disruptions to U.S. trade, including dairy. But remember, these disruptions are based on a viral epidemic that current steps are aimed at curtailing, so the longer-term impacts on human and economic health are hard to predict.

On March 18, President Trump and Canadian Prime Minister Trudeau announced the closing of the U.S-Canadian border to non-essential travel. Both leaders assured that trade crossings, especially food, fuel and medicines, will not be affected.

The dairy futures markets suggest that the brunt of the impact on product prices and farm-level milk prices will be felt after May, but this depends largely on what happens over the next two months.

Milk and dairy in demand

Meanwhile, gallon and half-gallon sales of Whole Milk and 2% — as well as cheese and butter and other dairy products — are experiencing surging demand at the retail level, more than overcoming reductions in sales to schools and restaurants to the point of retail milk demand overtaking inventories with retail orders heading into “new territory.”

Pictures of empty dairy case shelves populate social media posts, and USDA Dairy Market News reports Class I milk demand ranging mostly from “strong” and “surging” to “extraordinary” and “haywire.” Given the reported butter surplus in cold storage, the current surge in fluid milk demand means less milk for manufacturing to add to inventories as the spring flush builds.

Milk and dairy products are a centerpiece of “comfort food” and in-home meals. In fact, as families settle into a period of greater isolation, more families are sitting down to eat together. Children are relaxing in the absence of extra-curricular activity schedules, and we may just find milk coming back to tables.

Schools, supermarkets, and restaurants adjust 

State governors have closed schools for at least two consecutive weeks, and now restaurants in many states are closed, except for takeout meals.

As the overall economy grinds to a virus-induced stop, uncertainty prevails even as essential services gear up for what may lie ahead. Amazon, for example, seeks 100,000 additional workers while limiting their warehousing and shipping to be focused on medicines and high-demand essential items.

Supermarkets are working to restock essentials, and there is a universally-reported surge in demand for milk and dairy foods that started March 13 and has accelerated nationwide since then. Stores are modifying operations, and relaxed rules for USDA meal reimbursement allow schools to provide grab and go meals to more families as children are home, and many adults find themselves suddenly out of work.

Supply chain planning and liquidity

Anticipating demand surges to be followed by periods of pull-back, milk plants and cooperatives are monitoring and planning for rapidly changing milk dispatch conditions. Many are looking ahead to make milk and dairy products available to food banks, as they are able, and especially if school half-pints are in inventory and as the product mix in demand is dramatically changing from foodservice to in-home use.

Concerns about liquidity have prompted The Fed to reduce the target interest to zero to 0.25%, and at the agricultural level, Farm Credit and other lenders sent communications Tuesday about working with customers impacted by COVID-19 as the full effects are not yet known in terms of Ag marketing and supply chain challenges.

Dairy market forecasts

Some analysts are going public with forecasts that dairy markets will suffer an average decline over the next 12 months that could be anywhere from 3 to 8% or 20 to 25% below the industry’s pre-COVID-19 milk price forecasts. Some have gone so far as to say milk prices paid to farmers could fall to 2008-09 levels as global and U.S. recession concerns emerge.

However, the underlying fundamentals of the U.S. economy are strong and will prevail unless both the fear and reality of the virus have a deep and long-lasting impact – something that cannot be forecast at this juncture.

Global Dairy Trade (GDT)’s price index is down 8% since COVID-19 fears became prevalent when the situation in China became known and Europe’s cases emerged. And yet, trading volumes have not declined in the biweekly GDT auction. This suggests global dairy demand is holding up.

A big supply-and-demand swing is always China, and there is a bright spot on that score.

Dairy is essential

Dairy is essential to a healthy diet, especially in times like these, and Milk’s immune-building properties are being recognized. For example, in China, where the virus is reported to have peaked and may be leveling off, Chinese dairy associations worked with the Chinese government to issue guidelines to “increase dairy consumption to build immune resistance,” saying “fight COVID-19 with dairy.”

A report this week in Food Navigator details these new dairy consumption guidelines in China as well as specific elements in milk that help boost the immune system. The formal stated: “Milk and other dairy products are an excellent source of high-quality protein and can also provide a source of Vitamin B2, Vitamin A, calcium and other nutrients essential for the human body. So a higher intake of these products for those low in protein, especially when higher immune resistance is required to fight the novel coronavirus, will be very beneficial.”

Dairy industry navigates ‘new normal’

Meanwhile in the U.S., four dairy processors and three milk cooperatives reported in email responses to Farmshine this week that even though all schools, some daycares and many restaurants are closed or curtailed, sales of fluid milk are surging to more than compensate.

“Quick changes in demand require a different product mix (whole gallons instead of 1% chocolate half-pints, for example). From a production standpoint, we have been reinventing the wheel every day for almost a week,” writes Carissa Itle Westrick of Valewood Farms Dairy, Loretto, Pa.

Another western Pennsylvania milk bottler indicated there are no sure answers to any questions just now, but that retail demand is higher, and the hope is that the school grab and go meals in most communities will be able to consume half-pint inventories.

In short, everyone is figuring out their “new normal”, and the industry is shifting its product mix from foodservice and institutional-style demand to in-home use demand.

In the Southeast, where fluid milk sales have been “lackluster” over the past several months, the situation changed dramatically since Friday, March 13.

“Up until last Friday, we had not encountered any changes in overall routing of milk to our regular fluid customers,” notes SMI’s CEO Jim Sleper.  “Then beginning Friday and ever since, it seems like all of our customers have added on additional milk to keep up with the surging demand resulting from customers stocking up, and we are seeing these extra loads far exceed the number of loads lost from schools being out.”

This observation is national in scope as confirmed by numerous industry sources, including Dean Foods, nationally, and other processors in the Northeast.

The concern in the balance is how long will this continue as home-bound refrigerators become full but also have the people at home to consume it?

Supply chain management?

Concern was expressed by some sources as to how the demand pattern will unfold if schools remain closed beyond two weeks right into the spring flush, especially if plants are short on labor or unable to remain open for a time.

According to a notice shared with Farmshine this week, Land O’Lakes informed its eastern members that beginning March 23, its base program will be strictly enforced, assessing members $10/cwt for their production over their individual base allocation, and asking members to “voluntarily” reduce their milk production as well as to prepare to dump milk.

The accompanying letter from Land O’Lakes indicated “business as usual” otherwise, for the moment, but that the cooperative is “preparing for a potential reduction in employee availability at plants across the country,” citing the possibility of having to dump milk. The letter also indicated that daily recorded messages would be sent to members in each milk shed about each milk shed’s respective situation.

All industry sources interviewed expressed heightened levels of emergency preparedness to bring some stability. As SMI’s Sleper put it, “We are treating this uncharted territory similar to our regular Hurricane Preparedness planning.”

Like the daily governmental briefings, milk processors and cooperatives are doing daily, even multiple times a day, conference calls among staff and board to navigate.

Transportation, labor and pricing

In a paper released this week by Dr. Andrew Novakovic of Cornell, the key points of vulnerability for the dairy industry are transportation and labor.

“Transportation disruptions could quickly scale to an industry problem,” he writes.

He also noted that the health of the labor force in milk plants affects the availability of milk more quickly than that of an individual farm.

American Farm Bureau also expressed to USDA that labor, supply chain issues and possible price manipulation top the list of immediate issues farmers are raising.

Optimism and commitment as food providers

In a letter to Secretary of Agriculture Sonny Perdue, AFBF president Zippy Duvall pledged that, “America’s farmers and ranchers will be with you every step of the way, doing all that we can to help you win this fight and to ensure the health, safety and prosperity of all America.”

Sleper also expressed positivity. “Uncertainty seems to breed pessimism especially with the stock market and dairy commodity pricing,” he wrote in an email. “We will endure this like we have other situations.  For SMI, we encountered extremely low milk prices over the past four-plus years, a shortage of available labor, two major bankruptcies, and hurricanes. I’m amazed how resilient (our farmers) have become.”

Novakovic cites a few positives to think about: “Overall, I am optimistic that the food industry, beginning with farmers, will rise to this challenge,” he writes. “Given the longstanding concern and emphasis around animal health and food safety, I think agriculture and food businesses have a leg up in doing what is needed now.”

In fact, FDA released information this week stating that COVID-19 is NOT a foodborne pathogen, confirming that there is no evidence of food or food packaging being associated with any transmission of COVID-19.

“We are lucky in the dairy industry that the sanitation and food safety practices we have in place every day protect us from a variety of outside threats. We have expanded these plans, with an eye toward the unknown,” writes Itle-Westrick in an email. “But as a small business, the possibility of one employee becoming ill is something that would have a big impact on our production and distribution capability, so we are protecting against that.”

Even though schools are closed, their needs continue at a smaller, though increasing, scale. Numerous mainstream media outlets are picking up stories showing how schools are providing these grab and go meals (without congregating) in communities across America.

Krista Byler head chef of Union City Schools in Erie County, Pennsylvania says inventories allowed them to feed participating students for one week, and that they’ll need items like bread, rolls and milk for next week.

“We had sufficient milk on hand to handle breakfast and lunch for one week of service, and will be placing a milk order on Friday for the week of March 23rd,” said Byler in a Farmshine interview.

“I think every foodservice employee in this district is a mom, a grandma. We definitely have a heart for the children here, and we just want to make sure they have the food they need.”

Resources for dairy and agriculture

While there are likely many resource bulletins being put together for farmers and dairy producers,  two good ones include Pennsylvania’s Center for Dairy Excellence at https://www.centerfordairyexcellence.org/covid-19-farm-resources/ and Indiana’s Purdue University at https://www.purdue.edu/newsroom/releases/2020/Q1/a-guide-for-local-producers-to-navigate-the-covid-19-outbreak.html

Gratitude

AUTHOR’S NOTE: Instead of pessimism, a can-do spirit prevails as farm-to-table sectors navigate these unprecedented challenges, including restaurants that are on the front lines as vulnerable small businesses taking a huge hit but in many cases providing takeout meals, even at discounted prices, with an eye on the situation.

As dairy farmers continue their important work each day, we thank you — and all involved in the food supply chain — for your essential contributions

May God bless the medical professionals, caregivers, first-responders… and the farmers who feed us. Stay safe, have faith, and be well as we all pull together to stay apart and curb transmission to starve the enemy COVID-19.

-30-

Judge insists on open, transparent, fair process in sale of Dean Foods assets

Dean-plantsBy Sherry Bunting, Farmshine, Friday, March 20, 2020

BREAKING NEWS UPDATE: After the below story about the March 12 bidding procedures hearing was written and filed with Farmshine for yesterday’s press deadline, docket 1167 — posted late last evening — shows that a motion was filed ahead of today’s anticipated hearing to modify the proposed bidding procedures and withdraw the prior request for DFA to be Stalking Horse Bidder in the sale of Dean Foods assets, noting that DFA will remain a potential bidder in modified proposed bidding procedures. Docket 1167 states in part:…after extensive discussions, DFA and the Debtors (Dean Foods) determined to proceed without being the Stalking Horse Bidder and without Bid Protections. Accordingly, the Debtors (Dean Foods) are withdrawing their request for approval of DFA as a Stalking Horse Bidder, and any approval or authorization of the Stalking Horse Asset Purchase Agreement or Bid Protections. Critically, this withdrawal by the Debtors (Dean Foods) of their request for a Stalking Horse Bidder does not signal a withdrawal by DFA from the bidding process, and the Debtors (Dean Foods) expect and believe that by avoiding litigation over procedure, all parties-in-interest, including DFA, will focus on developing competitive and value-maximizing bids. In addition, the Debtors (Dean Foods) have been working around-the-clock to respond to continuing data requests from the Ad Hoc Group in an effort to provide that key constituency with all of the information needed to formulate a bid…”

HOUSTON, Tex. – Last Thursday (March 12) a hearing here on the Southern Foods Group bankruptcy considered a motion to approve Dairy Farmers of America Inc. (DFA) as “stalking horse bidder” and to set bid procedures outlined in the Dean Foods / DFA $425 million Asset Purchase Agreement covering 44 of Dean’s 57 plants.

Judge David R. Jones instead asked for Dean Foods to come back with a sale process that is “open, transparent and fair to everyone.” He also set a hearing for Thursday March 19 to revisit new bidding procedures and protections sought by DFA,

Judge Jones also expedited proposed sale dates, indicating March 30 at Noon as a deadline for bids to be submitted, a quick turnaround for Dean to “declare winners” ahead of April 1 for parties to file objections, and April 3 as a sale hearing. Dean confirmed this week  that these are the dates they are working with pending the March 19 hearing outcome.

Part of the reason for expediting dates in a more “open” bidding process is the company’s liquidity concerns in the face of financial and commodity market challenges due to school closings and other supply chain happenings related to novel coronavirus / CoVid-19.

It was revealed that 22% of Dean Foods’ sales – approximately $52 million per month – is school milk and foodservice sales.

In separate inquiries this week of several fluid milk processors, including Dean Foods, a surge in demand for milk is being reported that began last Friday when widespread school closings were also announced.

This surge in store demand is currently more than making up for any losses due to school closings in the short-term, but uncertainty is the cloud over everything, especially in this bankruptcy sale where liquidity provided by a combination of cash flow and bankruptcy financing was projected on March 6 to last through June after being projected last fall to last through July. It was noted that recent events may further compress these liquidity projections, an important factor to keeping the bankruptcy from falling into a Chapter 7 category.

In the three-hour hearing with two recesses for parties to confer, Judge Jones heard from counsel representing Dean Foods, DFA, an ad hoc committee for dairy cooperatives, and committees of creditors, bondholders, labor unions and others.

Department of Justice concerns over specific plants included in the 44-plant DFA bid were also referenced, but not explained or detailed, and the Judge expressed his desire to see the winning bid mix handled in a way that would be open to potential regional buyers for single plants and in a way that puts forward the best “mix” that returns the best value, while also keeping the jobs going and milk flowing, and hinges on satisfying any known DOJ concerns.

It was indicated that communication between DFA and DOJ and Dean and DOJ have been ongoing since October.

Essentially, the Judge asked Dean Foods to provide information needed by bondholders working on a potential restructure, to simplify the bidding procedures so that anyone who is not a bankruptcy attorney can understand them, and to provide the opportunity for potential buyers to bid on one plant or multiple plants.

Judge Jones again issued a plea for all parties to work together in the sale of the company he said is in everyone’s best interests to see continue and is “important to our country.”

“I am giving you full flexibility to propose and handle this however you want to handle it and reserving flexibility to drive this process if I have to,” said Judge Jones, indicating that he hoped an auction would not ultimately be necessary on all assets.

Throughout portions of the hearing, counsel for Dean indicated the need for bid protections for DFA, given their work in putting together the first actual sale plan covering a majority of assets.

Part of the “stalking horse” status sought for DFA by Dean’s original motion was to include “break up” fees averaging $15 million per plant that would have to be paid by bidders winning plants in an auction situation and pulling them out of DFA’s 44-plant bid. Judge Jones wasn’t convinced that breakup fees were necessary; although he did indicate that DFA should receive something for their contribution in putting together the first bid for a substantial portion of Dean’s assets to get the process moving – something no other entity has done to-date.

In fact, Judge Jones stated that he was less concerned about breakup fees than he was about the bidding process itself.

Counsel for the creditors committee said they were receiving broad interest from potential bidders on single or multiple plants, but that without a fair and open process and without documents needed to formulate bids, these potential bidders would be operating in the dark or unable to participate.

Judge Jones said that, “It’s theoretically possible to cobble together bids for individual plants (in the asset mix), and they are all telling me they are not getting a fair shake because you won’t give them the opportunity to make a bid for one or two or three plants,” said the Judge. “My way does that.”

He said that they (DFA) aren’t going to get copies of the other bids and that DFA would not have to break down their bid to a plant by plant pricing.

“No way, that’s not going to happen. I am trying to give examples of how unhappy I am with this process. I hear you trying to talk me out of it, and I assure you, I am far more stubborn than you,” said the Judge. “At the end of the day, I get to be right or wrong.”

With the expedited bid deadline — a date certain when every interest would put its best bid forward for a single plant or multiple plants — everyone involved would see everyone else’s bid at the same time, and they would be made public.

In essence, no one got everything they wanted, and everyone got something they wanted in the new process parameters set forth by the Judge to be revisited at the hearing this week (March 19).

Interests pleading for time to put together a bondholder restructure did not get extra time, and interests looking for special protections to streamline majority assets going to DFA did not get that either.

Judge Jones asked no less than three times: “Why do you need an auction at all?”

He said further that Dean has “the best advisers in the world. You have gan asset mix that is incredibly hard to have an auction on to be fair. Let’s set a deadline for everyone to put their best foot forward by that date (potentially March 30 Noon), then you put together the best deal (the best mix of winning bids March 31) and ask me to approve it (potential sale hearing April 3), and if someone has an issue with it, they can stand up and take their shots (objections by April 1). This forces people to put up or shut up.”

Bottom line, said the Judge, “I want a fair and open process, not just for two parties, but for all parties.

“I am not going to lawyer this deal, but I want a process where… everyone gets a shot. The (process) that you have outlined doesn’t do that,” he said of the bidding procedures in Dean’s motion.

In the bankruptcy proceedings, all proof of claims are due by March 27 with the first omnibus hearing still on the court calendar for March 30, followed by another on April 22. Information is available at https://deanfoodsrestructuring.com/ and dockets can be found at https://dm.epiq11.com/SouthernFoods

-30-

Co-ops seek bid process modifications, object to ‘stalking horse’ status in DFA bid for 44 Dean plants

Dean-DFA-plants4

dfa-fmmo (1)

6 co-ops covering 3000 farms and 10% of milk cite bid barriers, antitrust concerns, detrimental impacts

By Sherry Bunting, Farmshine, Friday, March 13, 2020

HOUSTON, Texas – New ripples emerged this week in the Dean Foods Company (Southern Foods Group LLC) Chapter 11 sale proceedings in the bankruptcy court of the southern district of Texas.

Just three days before the March 12 hearing on Dean’s motion to approve DFA as “stalking horse bidder,” an ad hoc committee for dairy cooperatives filed a limited objection on Monday, March 9 regarding the Feb. 17th DFA-Dean asset purchase agreement that covers a majority of Dean’s assets.

If Judge David Jones grants stalking horse status to DFA’s $425 million bid for 44 of the 57 plants and other itemized assets and liabilities, this would become part of the bidding procedures, which the March 12 hearing is expected to further outline, and it would provide certain protections to DFA’s initial bid.

“A potential sale of assets to Dairy Farmers of America Inc. (DFA), if approved, would effectively consolidate DFA’s grip on the national milk market. The ripple effects of the sale will detrimentally impact all of DFA’s competitors, from the largest dairy cooperatives and milk producers, to the smallest farmers,” the objection stated.

“For exactly this reason, the ad hoc committee, which includes certain creditors of (Dean) and competitors of DFA, was formed to… monitor the Chapter 11 cases, examine the impact that a sale to DFA would have on their businesses, and to the greatest extent possible, ensure that some semblance of fairness remains in the competitive process for the benefit of all dairy cooperatives,” the objection stated.

The ad hoc committee represents what is described as a broad cross-section of U.S. farm milk, covering over 3000-member dairy farms producing nearly 10% of the nation’s milk.
Six cooperatives are listed in the objection, and they have a mix of circumstances — one is a creditor of the debtor (Dean Foods) some are non-creditors except for non-pool payments that are owed, some are current suppliers of Dean Foods, and some are competitors in retail milk distribution.

According to the objection on the case docket, the six co-ops are:

• Lone Star Milk Producers, Inc., based in Wichita Falls, Texas with 120 member farms in eight states, marketing 1.9 billion pounds of milk annually;

• Agri-Mark Inc.,with 850 member farms in New England and New York marketing 3.3 billion pounds of milk annually;

• Cayuga Marketing, LLC, based in Auburn, New York with 30 member farms producing 1.3 billion pounds of milk annually;

• Cobblestone Milk Cooperative, Inc., Chatham, Virginia with 19 member farms from Virginia to Georgia marketing 0.6 billion pounds of milk annually;

• Maryland and Virginia Milk Producers Cooperative Association Inc., with 930 member farms in multiple states of the Midatlantic and Southeast producing 2.5 billion pounds of milk annually; and

• Michigan Milk Producers Association with 1300 member farms in Michigan, Ohio, Indiana and Wisconsin producing over 5 billion pounds of milk annually.
The limited objection seeks to address “certain fundamental flaws in the bidding procedures,” which “exacerbate the antitrust issues that plague the debtors’ proposed sale to DFA.”

• In a separate action, Southeast Milk, a Florida-based dairy cooperative also filed a similar objection this week.

At the start of the Chapter 11 cases that were all lumped together under Southern Foods Group LLC, the debtors, Dean Foods, proclaimed intentions of expanding the sale and marketing process and of exploring restructuring alternatives. Instead, the objection asserts that Dean Foods “spent months negotiating and finalizing proposed bidding procedures with DFA that only serve to create unnecessary competitive issues.”

Cited barriers to competing bids included the multi-step qualification process and compressed time frame that make it difficult for others to bid, including the use of terms that are not defined.

“Perhaps by design, these procedures make it a foregone conclusion that DFA will be the successful bidder for all stalking horse assets, even assuming that an auction were to occur,” the objection states.

On these and other grounds, the ad hoc committee for dairy cooperatives filed the limited objection and submitted that, “The proposed bidding procedures are not reasonably designed to secure the highest and best bid for the sale of the bid assets.”

While the debtors assert their proposed bidding procedures were designed to facilitate a flexible, robust and competitive bidding process, the objection asserts that, “The debtors have closely held all sale-related information and other information that they consider to be potentially confidential.”

In addition, objections are raised about the bidding procedures being “strategically crafted to prevent any of the stalking horse assets (44 plants) from being siphoned off by DFA’s competitors and broken down into auction lots that could yield a greater aggregate sale price for the debtors’ estates.”

The breadth of the DFA-Dean asset purchase agreement is a barrier if approved as ‘stalking horse’ assets because few, if any, bidders could compete on those assets collectively — keeping potential regional buyers that could be affected by the outcome from actually bidding.

Several modifications are requested, including how qualifications are set, how much discretion is given to Dean on separating auction lots, extension of the time frame, and a dual track auction process that would provide for back-up successful bidders and back-up alternate bidders for auction lots as separate sale transactions in the event that the DOJ does not provide the necessary regulatory approval for the sale to DFA.

Stay tuned.

 

Change is constant. Innovation is great. But please respect The Milk.

Kroger_milk_9395

By Sherry Bunting, Market Moos, Farmshine, Friday, February 28, 2020

Winter dairy conferences have been replete with talk of a changing dairy industry along with optimism about the future of innovation in dairy foods and beverages. If you’ve read the food and grocer trade magazines or watched the dairy case at supermarkets, the name of the game is new-new-new, everyone wants to put out something new. Some new products fly off the shelves, others not so much.

The big new non-dairy competitor in the milk case these days, for example, is oat beverage — and as the trade journals state, it’s a virtual explosion.

But dairy beverages are getting a makeover too in some quarters.

Meanwhile, we have retailers telling us that 95% of shoppers put a gallon or half gallon of real dairy milk in the cart.When asked what can be done to put more of those attention-getting nutrition tidbits on fancier milk labels, the answer inevitably is “there’s only so much real estate to work with on a gallon milk label,” or “we don’t change our gallon milk labels very often,” or “there are a lot of regulations about what we can and can’t put on a gallon milk label.”

Of course dairy producer audiences are always reminded that that The Milk is a low-margin product.

Put simply, this means the industry doesn’t want to do much with low-margin commoditized milk, they’d rather put their effort into high-margin products, which means new, different, adjusted, blended, extended, ultrafiltered and differentiated products for which they can charge more — all the while loss-leading The Milk right into low-margin or no-margin territory because 95% of shoppers put in their cart. Something is wrong with this picture.

When asking a retailer who spoke at a dairy conference recently in the Southeast if there’s anything that can be done to stop the ridiculous levels of loss-leading we see at stores (outside of Pennsylvania of course), his answer was a question: “How does that sell more milk?”

Explaining that the extreme loss-leading for real dairy milk ($1.50, $1.25, 99 cents/gal) pushes stress back through the supply-chain and conditions consumers to disrespect the most nutritious option — that admittedly most shoppers still put in their cart — my explanation was met with a shrug, and this reminder: “It’s got to be moved, and we eat the loss, and the only thing more expensive than selling milk cheap is throwing it away.”

Hmmmmm. Doesn’t the decision to do extreme loss-leading make The Milk an even lower-margin product?

36957951_10155789942963182_5608066376095760384_n

By the looks of the whole milk shelves in supermarkets and convenience stores — more often than not these days — they’re understocked, hardly in danger of being overstocked, even in Pennsylvania where loss-leading is prohibited.

With all of these new and “high-margin” dairy case beverages and foods and blends and mixtures and substitutes competing for space, at least one retailer revealed that shelf space will begin becoming an issue.

There are opportunities for real whole dairy milk within this strange set of marketing circumstances. It is a curious fact that sectors with more variety — like today’s dairy case — do more in sales overall, but where is the respect for The Milk?

It becomes apparent why the gallon jug is both loved by retailers as the “get you in the store loss-leading staple with a high turnover (but shorter shelf life) ” and at the same time ignored precisely because it is the low-margin high-turnover product they say they don’t make money on taking up all of that space that could be used for high-margin products with longer shelf life and better return.

The answer lies somewhere in the middle of this scenario, and maybe it begins with a simple request of retailers and the dairy industy: please respect The Milk. If we don’t respect it, how can we expect consumers to respect it, desire it and want to pay what it is worth?

unnamed (80)Single-serve 16 ouncers with pretty packaging, that’s one way to differentiate that so-called low-margin whole milk. Experiential flavors is another. Flavored milk is hot, growing by double digits year over year.

But gallons? For families? They are the shopper-draw that doesn’t “capture growth” … just captures customers through the doors where they can buy it cheap.

Processors and cooperatives that are innovating in the real fluid milk space have their work cut out for them when store-brands continue to loss-lead The Milk into a space of disrespect within a dairy case that is literally bursting at the seams with high-margin new products seeking to capture growth… after taking it away from The Milk that got the shoppers in the door.

_DSC0830

-30-

While Dean negotiated with DFA, other interests requested documents they never received

Dean-DFA-plants3Antitrust issues at core of motion to form equity holders committee

By Sherry Bunting, Farmshine, Friday, March 6, 2020

HOUSTON, Tex. – Ahead of next week’s hearings on the Dean Foods Company (Southern Foods Group LLC) bankruptcy and sale, it is illustrative to review the motions hearing of Feb. 19. On tap for March 12 is the hearing to consider DFA as “stalking horse bidder” with the asset purchase agreement DFA and Dean agreed to on Feb. 17 involving 44 plants at a $425 million bid as reported Feb. 21 in Farmshine.

Also on tap next week is a hearing set for March 10 on the motion presented by Joshua Haar to form an adhoc committee of shareholders.

During the Feb. 19 motions hearing, there was extensive discussion about professional bonus payments to keep top staff on board during the bankruptcy. An attorney representing the Teamsters Union challenged these retention bonuses in the face of knowing union contracts will be renegotiated by new buyers, especially if the buyer is DFA.

The bottom line in that exchange was summed up by Judge David Jones’ comment that he is guided by his own interpretation of the numbers, trusts his own bankruptcy experience and skill sets and has clear concern that all parties should work together to see that the assets of Dean Foods continue to operate. Period.

In fact, Judge Jones often chided attorneys to talk in terms of the “practicality” of the situation above their own “strategically” motivated interests.

“I need what’s left of this company to be comfortable and stay in place,” said Jones. “We need to get to a sale process and have people see the opportunity for future jobs to stay in place.”

He showed low tolerance for any party expecting to get 100% of what they have gotten in the past (except for retaining the “critical institutional knowledge” provided by professional staff receiving bonuses), and he indicated that the retention bonus payments are necessary in that regard, giving him “some comfort that we may actually make the end of this because good people will stay in place.”

The Teamsters’ concerns were for financial awards and windfall profits to “talent at the top” while their member employees become creditors owed vacation and so forth.

To understand how Judge Jones views the national fluid milk model of Dean Foods, he said: “This is a business model that worked in the 60s and doesn’t work in 2020,” he said. “I could give a first-year business student this business model and they would look at me and say this is a model that doesn’t work.”

Judge Jones asked during motions, “Why not be hand-in-hand on this issue? I do not want to be responsible for school children not getting their milk, that means a lot to me.”

Saying that the Unions have overstepped in trying to prevent the payment of retention bonuses to professionals that constitute “institutional knowledge,” Judge Jones granted the debtor’s (Dean’s) motion to approve the “key employee retention plan” consisting of a schedule for paying these bonuses.

This exchange about “working together” — with the goal of keeping Dean assets operating — set the stage for Judge Jones to hear a motion by Joshua Haar to form an ad hoc committee of equity holders (shareholders). Haar is the attorney son of Jonathan and Claudia Haar, the New York dairy farmers who were part of the original representatives of the dairy farmer class in the previously settled Northeast Class Action Antitrust Lawsuit against DFA and Dean Foods.

Before hearing Haar’s motion, Judge Jones said he is “getting a sense of urgency,” in regard to seeing an end point and that he did not want to entertain motions that “extend the case on the backs of the vendors, including the farmers supplying the milk.”

In other words, he did not want to see the timeline of this case extended for an “exercise” that did not materially provide a practical solution.

Judge Jones offered to hear Haar’s motion the very next day, for which Haar said he would not be ready. Asking Haar if one hour is sufficient, Judge Jones set hearing on the appointment of an equity committee at 3 p.m. March 10 – two days before the March 12 hearing on the DFA “stalking horse” bid.

As part of this discussion, it was noted that the ad hoc committee of bondholders wanted time to put a plan forward, that they are “actively working on the financing and need time for equity holder involvement,” said Haar.

“On this equity committee request, there will never be an equity recovery here,” said the Judge. In fact, he added later that equity or share holders in Dean Foods, a publicly traded company “are in the worst possible place. If the debtor’s numbers are right, their money was lost years ago, and this is an event that recognizes history.”

Haar’s lengthy motion described milk supply chain and potential antitrust issues inherent in a DFA purchase, seeking time for other options to surface.

Judge Jones said he read the motion, but added: “I want you to understand the standard that is required for an equity committee. I’ll always give you the opportunity to talk and give the shareholder’s view of the world, but if you are looking for a committee, that’s a tough burden, and I expect you not to waste everyone’s time.”

He warned against a prepared speech of “just words… Telling me all the things you might do that are eloquent, I tend to be more blunt… especially when I tell people what’s coming and they choose to ignore it. I want you to represent your people. This is about people. But that’s what I expect.”

He expects an equity holders committee to be able to contribute to the process of the Dean Foods reorganization and sale, not to use one group of stakeholder for the sake of others.

Haar indicated that among the equity holders are persons and entities “connected to 15% of the U.S. milk supply” so in that sense this motion was not trying the milk supply antitrust concerns but rather what could be a legitimate consideration of a better way to move forward with offers that could potentially allow equity holders to participate in value recovery.

It was apparent that Judge Jones needs to be convinced with numbers and math and actual bids that can be consummated in the next few months, not the eloquence of ideas about what can or should or could be some time in the future.

Harr said of the motion that, “We can add significant value to the estate.”

With that, the hearing for Haar’s motion was set for March 10 with response motions due March 3.

Next up in the vein of “other options” was the existing creditors committee. Their attorney indicated concern as to how the asset purchase agreement negotiations with DFA took place.

“They got bid materials. We issued requests for these materials. The debtor (Dean Foods) wanted to share these materials but were unable to share them with us because DFA put a confidentiality clause on it,” said the attorney for the Dean creditors. “We did a letter writing campaign. DFA would not agree. We did file an emergency form to compel the bid materials, and an hour before the bid deadline, the documents flowed to the advisors for the committee.”

In other words, too late to analyze the issues.

As the negotiations between Dean Foods and DFA continued, the creditors committee apparently repeated its requests for information and were told “no.”

 

Finally, a week before the Feb. 19 motions hearing, they received a two-page slide packet from DFA that “gave very little information and did not give the information about what Dean plants were included and excluded in that asset purchase agreement until it was announced publicly.

“The creditors committee’s initial impression is negative,” said the attorney representing the committee, indicating it will be heavily contested. “First and foremost, we are concerned about aggregate consideration… it is not clear that there is enough (in the bid) to pay-in-full the creditors.”

She mentioned that DFA, in addition to seeking stalking horse bidder status, is also a large creditor of Dean Foods with significant payables and that their bid could represent a “dollar-for-dollar deduction in value of assets to cover their claims.”

The Judge was un-moved. “If integration fixes the problem, then we ought to be working on integration,” he said, telling the DFA lawyer to work with the lawyer for the creditor committee. “Get her at your table,” he said.

The response from counsel for the creditors was that they want a seat at the table and would “engage in good faith, but there could still be a contested hearing on March 12.”

Attorneys for DFA and Dean indicated engaging in dialog with the DOJ on antitrust issues.

A potential bondholder bid was also referenced. The attorney for the creditors said the bondholders have done a “tremendous amount of work looking into financial investment into the company. We are hopeful the process can get there before March 12 with a more value-maximizing offer than the one on the table now.”

But again, it was mentioned that a “critical piece of information is still missing. There is some information that the ad hoc bondholder committee needs that the debtor is not willing to provide and we implore the debtor to turn it over now so the bondholders have the information. The next two weeks are critical.”

One item needed is “milk payables. We need to see, or the financiers need to see that, and it has been difficult getting it provided to us for third-party financing.”

Judge Jones offered his office as mediator for emergency hearings to get that flow of documents moving in the event that having the information allows other bid processes to go forward.

In short, the creditors committee, ad hoc bondholders committee and lenders were “left out of the information flow” during the Dean negotiations with DFA on their asset purchase agreement. They all read it at the same time (when it became public on Feb. 17) and are looking for a bid with more value to come in.

Judge Jones turned to the Dean Foods attorney and said “you took this in and you know what to do. I am trying to convey my sense of urgency here. Let’s figure out how to move the process forward. We all have the same goal.”

(Facilities in South Dakota, North Dakota and Minnesota — where Dean bottles under the Land O’Lakes brand — are excluded from the DFA-Dean asset purchase agreement. The licensing of the Land O’Lakes brand elsewhere is also excluded.)

plants in deal

-30-

DFA-Dean reach initial $425 mil. bid agreement, starting point in court-supervised sale

deanfoodsBy Sherry Bunting, Farmshine, Friday, February 21, 2020

HOUSTON, Tex. — Dean Foods Company announced Monday, Feb. 17 that it has reached an initial agreement with Dairy Farmers of America (DFA) regarding sale of a substantial portion of Dean’s assets. The two parties have entered into an asset purchase agreement that was filed in the Southern Food Group bankruptcy case with the Court for the Southern District of Texas in Houston this week, along with other motions.

This is just a first-step in a legal process that will unfold over the next several months and begins with Dean’s motion seeking court approval of DFA as the “stalking horse bidder” with an initial bid of $425 million at a hearing set for March 12.

A “stalking horse bidder” is the low-bid that can be accepted by the debtor in a court-supervised sale, and with certain bid protections for that bidder if other bids are offered.

The agreement includes 44 of Dean’s 57 currently operating plants and other of Dean’s assets as well as certain liabilities related to these assets. But, as learned in an email interview with a Dean Foods spokesperson and a review of court documents, this is not an all-inclusive price for the 44 locations as certain real property connected to these assets is named as for additional purchase.

Furthermore, 14 of Dean’s operating plants and 13 closed plants and/or distribution depots are listed as excluded from the DFA-Dean agreement.

This agreement still requires the approval of the U.S. Department of Justice (DOJ) and the United States Bankruptcy Court for the Southern District of Texas.

Anne Divjak, Dean Foods vice president for government relations and external communications, indicates that the company is cooperating with DOJ’s probe of antitrust concerns by providing requested information and answering questions.

Timeline and competing bids

A timeline for court hearings has been set beginning with the March 12 hearing to approve DFA as “stalking horse bidder.”

Interested parties with competing bids for the assets included in the DFA-Dean agreement as well as bidders for assets excluded from that agreement have until March 31 to provide the court with information in order to be considered as qualified potential bidders.

Those qualified bidders will then have until April 13 to submit bids.

A court-supervised auction would then be conducted sometime in April with an approval hearing set for April 27.

Negotiations continue

Divjak confirmed that Dean is speaking with other parties interested in acquiring assets – including some that are interested in assets excluded from the DFA-Dean agreement. Court documents also confirm that Dean is speaking with advisors and creditor committees about other restructuring options, though no details are provided.

Court documents reveal further that Dean Foods and investment banker Evercore Group, hired in February 2019 to evaluate potential strategies for the future, began negotiations with DFA in October 2019 — believing DFA to be the entity “likely to contribute significant value to the debtor’s businesses,” but they failed to reach agreement prior to the bankruptcy petition date of November 12.

After November 12, Evercore began communicating with additional potential strategic and financial buyers while continuing to engage with DFA, according to court documents.

These documents described the past three months in which Evercore received incoming interest from nearly 100 entities, including 55 potential strategic buyers (18 of them regional dairy companies) and 44 potential financial buyers. Of that number, 38 parties were provided with confidential information regarding Dean’s business. Several of those, including DFA, expressed interest in considering a transaction with Deans and were granted access to a data room containing additional confidential information on the bid assets.

Court documents also show Dean’s explanation that it continued to follow a “competitive process and arm’s length negotiations… to secure a bid from DFA,” which now pertains to the motion filed with the court on Monday seeking approval of DFA as the “stalking horse bidder.”

According to a Dean press release at the Dean Foods restructuring website (https://deanfoodsrestructuring.com/), president and CEO Eric Beringause states that, “We have had a relationship with DFA over the past 20 years, and we are confident in their ability to succeed in the current market and serve our customers with the same commitment to quality and service they have come to expect.”

At a Northeast Dairy Leadership meeting in Syracuse, New York right after the Dean bankruptcy filing in November, DFA CEO Rick Smith was quoted in a Berry on Dairy blog post to say:  “Everybody’s been telling me for years that we are the logical owner of Dean’s. And I’ve already gotten phone calls about people who want to partner with us. We will be interested in some assets, undoubtedly. And not interested in some, undoubtedly. Some (assets) should be closed. Some will require partners.”

Of the assets excluded from the DFA-Dean agreement, half are currently operating plants and half are plants that are closed. Of the 13 closed plants Dean is looking to sell, eight were closed 15 to 20 years ago, several of them in 2001; and five were closed more recently in 2018 when over 130 dairy producers in eight states lost their Dean contracts after Walmart’s first milk bottling plant opened.

What’s included in the DFA-Dean agreement?

Included in the DFA-Dean agreement are all four currently-operating Dean plants in Pennsylvania – Lansdale, Lebanon, Schuylkill Haven and Sharpsville — along with the Florence, New Jersey plant.

Also included are one plant in New York, two in Massachusetts, two in North Carolina, one in South Carolina, two in Florida, two locations (three plants) in Tennessee, five in Texas, two in Ohio, two in Michigan, two in Indiana, three in Illinois, one in Iowa, one in Wisconsin, one in Idaho, two in Utah, one in Nevada, one in New Mexico, two in Montana, two in Colorado, one in California. The Barber Pure plant in Birmingham, Alabama is split with only the ice cream business being included in the Dean-DFA agreement while the fluid milk business has been excluded.

Brand assets that are part of the agreement include DairyPure, TruMoo and Steve’s Ice Cream.

Subsidiaries in Mexico are also mentioned in the agreement. Furthermore, Dean holds an ownership interest with Organic Valley in Organic Valley Fresh, and this distribution joint-venture is included in the DFA-Dean agreement.

Dean’s motions filed this week also seek certain “relief” items in the final auction process, including provisions that DFA would assume certain contracts and leases referred to as “proposed assumed contracts” that are connected to the sale transaction.

How this affects Dean Dairy Direct milk suppliers is unclear in terms of protection under the transfer of these milk supply contracts under the sale of related assets.

On Wednesday (Feb. 19), a hearing was conducted to handle a motion filed by a dairy farmer in Tennessee to end his milk supply contract with Dean to pursue a new contract with another milk buyer out of concern about potentially losing his Dean contract after the sale of assets is approved. Under bankruptcy court-supervised sale and reorganization, critical vendor contracts cannot be terminated or changed by either the debtor (Dean Foods) or the vendor (dairy producer) without court-approval. The outcome of the hearing was not yet available.

What’s excluded from the DFA-Dean agreement?

Among the 13 closed plants that are excluded from the DFA-Dean agreement are the recent closures of Meadow Gold in Erie, Pennsylvania, a Garelick plant in Lynn, Mass., and the Dean plants in Braselton, Georgia, Louisville, Kentucky, Florence, South Carolina and Livonia, Michigan.

They are all for sale, according to Divjak, who indicated Dean was “actively looking for buyers for these facilities before the asset purchase agreement was announced.”

Among the 14 operating plants that are excluded from the DFA-Dean agreement are notably the Land O’Lakes plants in Sioux Falls, South Dakota and Bismark, North Dakota, and several other Minnesota plant locations.

According to Divjak, the Land O’Lakes brand is not part of the DFA-Dean agreement. Dean has a long-term licensing contract with Land O’Lakes cooperative to use the brand name and Indian Maiden logo for fluid milk and soft products sold from Dean plants. That licensing agreement, which Divjak said could be negotiated by potential buyers, also applies to other Dean plants as whipping cream, half-and-half and other products sold under the Land O’Lakes brand name are found at supermarkets nationwide, while the Land O’Lakes line of whole milk, 2% reduced-fat, 1% low-fat and fat-free milk is a well-known brand with a following in the western Minnesota, South Dakota and greater Central Plains region.

Dean Foods’ minority interest in Good Karma, a flaxseed alternative non-dairy beverage, is not part of the agreement and is separate from the bankruptcy proceeding.

Before the November 12 Chapter 11 bankruptcy petition, Dean Foods had secured special financing of $850 million to underpin its position as debtor-in-possession as well as gaining court approval to use operational cash flow to continue operations and payments to critical vendors during bankruptcy and sale. The special financing was previously expected to keep operations going for about nine months — through July or August.

——————————————————————————————-

ADDENDUM PUBLISHED IN MARKET MOOS COLUMN:

Revealing details in Dean deal

A conference hearing Wed., Feb. 19 in the Dean Foods bankruptcy and court-supervised sale case in Houston, Texas, available by teleconference, revealed many details as motions were heard. Attorneys representing the creditors committee, lenders committee, bondholders committees, Dean Foods, DFA, and a growing list of interested parties covered some sale transition concerns and concerns of creditors about the the low bid of $425 million by DFA that Dean is asking Judge David Jones to approve as a “stalking horse bid” at a hearing set for March 12.

Attorneys argued that the flow of necessary proprietary information from Dean Foods to other parties interested in offering bids has been stalled and delayed to the point where other interested parties were learning about what plants are included and excluded in the DFA-Dean agreement for the first time on Monday — the same day as the rest of the world found out via press release from Dean Foods.

For example, the adhoc bondholders committee is still waiting on a critical piece of information related to milk payables. In that regard, an attorney representing the creditors committee revealed that DFA — as a large creditor of Dean Foods with significant payables — could have a $1 for $1 deduction in its bid offer to secure its claims that other creditors do not share because DFA is also a critical vendor.

Judge Jones had earlier commented that the business model of the company “worked great in the 1960s but not 2020.” As a self-proclaimed “numbers guy,” the judge said he has looked at the numbers and done the math, and his assessment was hinted at when he commented that there is a sense of urgency to get this deal done so that the bankruptcy proceedings do not fall on the backs of vendors, including farmers and communities.

He said he did not want to be responsible for schoolchildren not getting their milk if the process is protracted for too long and the company fails.

He also stated that, “If integration fixes the problem, we ought to be working on integration.”

Toward that end he asked the entities to work together to see to it that the information needed flows to where it needs to go, but responsibly, and that he will give hearings and listen to all qualified interests, but that he did not want motions and proposals that simply waste the court’s time.

Also, a dairy farmer seeking permission to end his milk supply contract with Dean in February was granted permission as he asserted concerns about ultimately losing the contract after the company is sold and had another option for his milk.

 

Smiles for young and old during opportunity to ‘Milk-A-Cow’

Milk-A-Cow-2441

Jill Dice of Fredericksburg, co-founder of Spot On Agrimarketing, talks about how she and Stacy Anderson of Lebanon began the Milk-A-Cow Experience three years ago at the Pennsylvania Farm Show. They are grateful to volunteers who either provided cows or helped with the first-time milkers, including Lexi Findley, Katelyn Teaman, Brad Walker, Deidra Bollinger, Michele Reasner, John Brodzina, Olivia Lesher and Seth and Erica Miller. State dairy royalty Paige Peiffer, Denae Hershberger and Vannika Rice also helped provide information to visitors.

By Sherry Bunting, Farmshine, January 31, 2020

HARRISBURG, Pa. – It may be the Farm Show’s “best kept secret,” and in its third year at the 104th Pennsylvania Farm Show, the Milk-A-Cow exhibit drew 500 people over a two-hour window on Friday, January 10.

Those wanting to see what it is like to milk a cow came in all ages from young children who were excited just to be touching a cow to senior citizens claiming the experience of milking a cow was on their “bucket list.”

This slideshow requires JavaScript.

“People just love it,” says Jill Dice of the exhibit she started three years ago with her friend and Spot On AgriMarketing co-founder Stacy Anderson. “The questions we get are really good, and people are so thankful to be able to bring their questions to real dairy farmers.”

(Jill had her hands full that day as the Dice family’s Jersey cow was supreme championof the 2020 Pennsylvania Farm Show!)

Of course, the Milk-A-Cow opportunity would not be possible without the producers and volunteers who bring the cows and work with the public to help them quickly learn how cows are milked so they can try their hand at the chore right there on the spot.

In addition, Jill and Stacy appreciate the volunteers helping answer the public’s questions as they come into the equine arena and get in line for the experience. And they appreciate the dairy princesses who engaged the crowd with milk facts in a fun and entertaining manner while they waited in line or sat in the stands to watch.

Milk-A-Cow-2390

Stacy Anderson, co-founder of Spot On Agrimarketing, started the Milk-A-Cow Experience with Jill Dice. Children like this third-grader from the Harrisburg area lined up for photos with a heifer before moving on to the milk cows.

Jill and Stacy tag-teamed the crowd, with Jill involved in the milking experience area, which is set up in the equine arena after the celebrity milking contest on ‘dairy day’ at the Farm Show. Meanwhile, Stacy trots a heifer out into the hallway to lure-in visitors who are walking through the show so they are aware of the event. Children can come in and pet the heifer and pose for photos before moving on to the milking area.

WGAL sent a television crew for a Farm Show news spot this year and the camera-man, himself, wanted to give it a try.

New this year was the table manned by 97 Milk volunteers, handing out information about whole milk and getting signatures for the “bring whole milk back to schools” petition.

Also new was the increase from four to six cows ready for milking.

In general, the activity is low-key and comfortable. It’s meant to make learning fun, and organizers take every opportunity to use the experience to help the public understand how farmers take care of their cows, the attention they pay to food safety and milk quality and freshness, as well as the nutrition that milk and dairy products provide.

As one local third grader said after his turn “milking” for the first time: “That was really cool!”

He paused and reflected for a moment to say, “Well, actually, it was warm.” He then proceeded to repeat, with authority, what he learned from his helper, Seth Miller of Tulpehocken FFA, that milk comes out of the cow at her body temperature and “goes through pipes to get cool in a huge refrigerator.”

Adults were even more wide-eyed and curious than the children about the whole experience. Some thought the milk would come out faster, others thought it would be easy to do and were surprised to learn it’s not so easy.

One woman who had been wanting to do this since she was a child, was relieved to learn that the cows were milked earlier so it’s not like they were full of milk like at a normal milking time.

“That’s a relief,” she said. “But the farmer had no problem getting the milk to flow, I could only get a little bit. I guess I have renewed respect for what it takes to milk a cow.”

She was also impressed by how calm the cows were: “It’s obvious they really  don’t mind this at all!” the first-time milker said, smiling.

To see the smiles on faces young and old and to share knowledge in such a hands-on and individual way was rewarding for everyone involved.

The event is organized by Spot On AgriMarketing and supported by the Friends of the Pennsylvania Farm Show Foundation.

Milk-A-Cow-2449-2