DMI by the numbers, proprietary path of partners is paved

By Sherry Bunting, Farmshine, August 30, 2019

CHICAGO, Ill. — As the path of dairy checkoff promotion continues to evolve — especially since 2008 when a series of memorandums of understanding were signed by Dairy Management Inc. (DMI) and the National Dairy Council (NDC) with then USDA Secretary Tom Vilsack — the money flows increasingly toward DMI partnerships, agency services and executive staff through sub-agencies of DMI that facilitate the proprietary partnerships.

Innovation Center for U.S. Dairy, U.S. Dairy Export Council, GENYOUth, Newtrient LLC, are a few of the vehicles for “proprietary” industry partnerships, which DMI refers to as ‘leveraging industry resources.’

In particular the Innovation Center, working closely with USDEC, is the vehicle for pre-competitive “proprietary” dairy innovations.

In fact, this innovation really began through a relationship between Fonterra USA and DMI as early as the 2006-08 time frame. Their respective ‘test kitchens’ are just three miles apart on the outskirts of Chicago, where milk proteins and ingredients, concentrators, extenders and utilization characteristics have been the focus of proprietary work.

As DMI CEO Tom Gallagher stated at a dairy conference in Wisconsin in March, food scientists from DMI have “cracked the code” on cheese-melting characteristics for partners like Taco Bell and Pizza Hut. He also talked about the new pizza cheese innovations with Dominos to meet USDA school lunch rules, calling them “wildly popular with students.”

From that March presentation at the Professional Dairy Producers of Wisconsin conference in Madison, the Wisconsin State Farmer quoted Gallagher summing up his job: “My job is real simple. I have to get the industry to do things with your product after it leaves the farm — that consumers want.”

Toward that end, Gallagher explained to the shift away from television ads and other “one-way” promotions to social media “conversations” and industry “partnerships.” It has shifted from promoting milk and dairy to providing product development specialists working for DMI’s partners — like McDonald’s, Dominos, Taco Bell and others — to get them to “do stuff” that puts more dairy in the fast-food pipeline (look for more on this in a future article).

A key driver of the shifting direction of checkoff promotion is the world renown Edelman company, with its headquarters in Chicago — 17 miles east of DMI’s offices and just two miles from the Chicago headquarters of Fairlife LLC, two miles from the Chicago offices of Coca-Cola and a mile and a half from PepsiCo’s Chicago offices.

According to Richard Edelman, in his May 2017 blog post at the company’s website, the Edelman company (known worldwide simply as Edelman) has been the public relations and communications firm for DMI for over 20 years. 

In this particular post, Richard Edelman writes about the launch of DMI’s Innovation Center for U.S. Dairy in 2008 and how he is looking forward to the leadership of the former USDA Secretary Tom Vilsack coming on board that year (2017) as president and CEO of checkoff-funded USDEC and Innovation Center for U.S. Dairy (after signing MOU’s with DMI while Secretary in 2008-09).

This Edelman blog post covers the launch of the Undeniably Dairy campaign that month (May 2017), calling it the first time Edelman has had a project “bringing together a fully integrated campaign at this scale.”

With offices worldwide and mergers throughout the advertising and public relations industry, Edelman is the world’s largest such firm and is open about their re-alignment of clientele around “social responsibility” and  “global environmental sustainability.” In fact, they’ve dropped clients with businesses not deemed “environmentally sustainable.”

Edelman and its clients — such as PepsiCo, Danone, Unilever and others — are listed as prime sponsors buying-in to the EAT Forums that are pushing the EAT Lancet report about the ideal global diet of cutting per-capita animal protein consumption – meat, dairy and eggs – by more than 75% over the next 10 years to “reduce the environmental impact of feeding 10 billion people.”

The firm was instrumental in setting up GENYOUth in 2008 and recommending CEO Alexis Glick as its coordinator. Not only are DMI and PepsiCo clients of Edelman, so is the National Football League. The NFL has a longstanding relationship with PepsiCo that predates the GENYOUth / Fuel Up to Play 60 alliance with dairy checkoff.

And, while PepsiCo is an Edelman client, Coca Cola is a headline client of Edelman’s spinoff Zeno Group, a global integrated communications agency founded 20 years ago by Richard Edelman’s father Daniel J. Edelman after Richard had taken over the reins of Edelman.

Edelman, fairlife (Coca Cola) and NFL Properties are the Top 3 Contractors paid by DMI in 2017, as shown on the IRS 990.

So what do the numbers tell us about the above-mentioned relationships?

According to the IRS 990 forms filed by DMI for tax-year 2017, the Daniel J. Edelman, Inc. company, mind-bending mastermind of “social marketing”, was paid $15.3 million in 2016 and $17.8 million in 2017 for “agency services.” That was 11.5% of DMI’s total budget of $155 million in 2017.

DMI paid NFL Properties LLC, New York, N.Y., $5.12 million in 2016 and $5.63 million in 2017 for “Promotion.” Is this the pay-to-play cost of the GENYOUth alliance and MOU? After all, the NFL is positioned as a partner with dairy farmers in the “dairy-farmer-initiated” GENYOUth. The NFL was in on the MOU signing with DMI and Tom Vilsack while he was Secretary of Agriculture.

But, while the NFL’s annual contributions to dairy checkoff’s GENYOUth are listed on GENYOUth IRS 990s as ranging from $370,000 in 2014 to $945,000 in 2017, DMI lists checkoff payments to NFL Properties of between $5 and $6 million for 2016 and 2017 on the DMI IRS 990.

It’s all about the kids, right? There’s more here than kids and breakfast carts.

Meanwhile, fluid milk sales continued to decline, even more rapidly over the 2008-18 decade as low-fat and fat-free school promotion and provision was dairy checkoff’s best play while the plant-based alternatives continue blitzing consumers with – you guessed it — television ads and “one-way” promotions that DMI says “don’t work.”

The alt-beverage industry has worked with Edelman client PepsiCo on its low-fat product portfolio through a variety of incubator projects involving plant-based alternatives for dairy products.

The alt-beverage industry is working closely with Edelman client Danone, which has set a goal to transition much of its yogurt market into plant-based alternatives over the next 5 to 10 years, opening the world’s largest plant-based yogurt facility in upstate Pennsylvania earlier this year.

The alt-beverage industry has even convinced the nation’s largest dairy-farmer-owned cooperative, DFA, to invest in alternative beverage production assets and to innovate with a DMI-checkoff-funded product innovation — a new blend of low-fat, lactose-free dairy milk combined with 50% almond or oat beverage that rolled out in Minnesota in August 2019, with sights set on the Northeast by 2020.

DMI is spending checkoff dollars in search of the next fairlife on which to hang dairy promotion’s hat.

Incidentally, Fairlife LLC received $8 million in DMI checkoff funds in 2017 for “promotion,” according to the most recent publicly-available IRS 990 documents.

So, what else can be learned from DMI’s IRS 990 returns in 2017?

For starters, they had $2 million fewer dollars to work with compared with 2016. Total revenue controlled by DMI was $155 million, along with the unified marketing plan that filters down through regional agencies spending the other half of the dairy farmer checkoff revenues that total right around $320 million. Some state dairy promotion order boards, like in New York, automatically give 25% of their budget (2.5 cents of the state’s dime) to DMI as a matter of course. For other boards, the pass-through may be more, or less.

Looking at program areas, the most recent IRS 990 for 2017 shows that $110 million of the $155 million in checkoff funds under direct management of DMI was described to the IRS as “program funding revenue,” $39.5 million as “core funding revenue” and $5.6 million as “contract services revenue.”

Of the total $155 million in revenue for 2017, DMI categorized $82.2 million as “domestic marketing”, $17.1 million as “export”, while $7.85 million was research, and nearly $7 million for contract services and other expenses.

Since we know that Edelman received $17.6 million from DMI for “agency services” in 2017, it’s clear that some of that is in a category other than “contract services.”

Compensation of board officers, directors and trustees totaled just shy of $3 million.

Other salaries and wages totaled $17.6 million, with pensions and contributions $3.1 million, other employee benefits $2.3 million, and payroll taxes $1.37 million.

Legal, accounting and other totaled around $550,000, office expenses $1.5 million, information technology $2.7 million, rents or occupancy $1.65 million.

In total compensation from DMI and related agencies under DMI control, the highest paid staff in 2017 was executive vice president Dr. Greg Miller (Doctor Dairy), who heads up NDC’s Dairy Research, at $1,546,760.

Listed as a “former highest-compensated employee”, Daniel Chavka, one of several DMI chief financial officers, was paid $769,475. Chief financial officer Carolyn Gibbs was second-highest, paid staff at $1,191,557 through July, and another CFO Quinton Bailey earned $246,542 in 2017.

DMI CEO Tom Gallagher was paid $899,810, followed by executive vice president Jean Ragalie-Carr at $857,406. She is a registered dietician serving as National Dairy Council president.

Fifth-highest paid officer is former Secretary of Agriculture Tom Vilsack in his first year as a DMI executive vice president, serving as president and CEO of DMI’s USDEC. From DMI and related agencies under DMI control, Vilsack was paid $800,557 in 2017.

DMI president Barb O’Brien was compensated $649,419 in 2017.

Additionally, two other DMI executive vice presidents Mark Leitner and Elizabeth Engelmann were compensated $638,041 and $478,809, respectively, in 2017.

The total for items related to salaries, other compensation, and employee benefits for 2017 was listed at $27.37 million – 17.7% of total revenue in 2017.

The agency services of Edelman, at $17.8 million, was 11.5% of total 2017 DMI revenue.

The $8 million paid to Fairlife LLC was 5% of total revenue.

DMI travel was listed at $3.55 million, while the line item for conferences, conventions and meetings was $1.46 million in 2017.

The DMI board chair (listed as Paul Rovey in 2017) was paid $25,000. Other board officers and members of the executive board saw compensation ranging from $1800 to $8600, while many board directors were listed as receiving zero compensation.

To be continued

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DMI’s mission has undeniably strayed

By Sherry Bunting, Farmshine, August 23, 2019

CHICAGO, Ill. – Since Dairy Management Inc (DMI) was formed, it has grown to include (and control) many agencies and partnerships that put much of the work into the zone of “proprietary,” even to the 81 voting DMI board members.

In the portion of the most recent 2017 IRS 990 form, where DMI is asked to describe its program accomplishments, the responses specify that, “DMI partners with foodservice industry leaders to help create dairy-based innovation to drive dairy sales and build trust in dairy products.”

The response describes 2017 activity in detail. 

While the work done to boost cheese use by restaurant chains resulted in increases of milk equivalent tonnage that are quite impressive, according to DMI (look for more on that in a future article), it is the fluid milk sector reinvention that we will examine here.

In its 990 description of fluid milk partnerships, DMI states: “The dairy checkoff program, working with committed milk processors, embarked on a comprehensive revitalization strategy to reinvent the milk experience for consumers.”

What does that mean? 

DMI explains: “The focus includes milk as a standalone beverage as well as an ingredient in other beverage segments such as coffee, tea, smoothies, energy drinks and more.”

As part of this “comprehensive revitalization” effort, the DMI board approved partnerships since 2010 with eight companies they deem as leaders and innovators in the milk and beverage arena, including: Dairy Farmers of America (DFA), which just recently launched the Live Real Farms Dairy + Almond and Dairy + Oat ‘milk’ comprised of half low-fat lactose-free dairy milk and half almond or oat beverage; Darigold/Northwest Dairy Association, which among other new fluid milk products markets a fat-free creamer it calls ‘fat-free half-and-half’ (a contradiction in terms).

Also among the eight are these current partners as of 2017: The Kroger Company, which sources 80% of its milk to Select Milk Producers / Fair Oaks;  Shamrock Farms, which partnered with DMI on the Rockin Refuel brand found in chains like Subway nationwide; and Coca-Cola/Fairlife.

Specifically, the 990 form reports that, “The Checkoff program supported Lactaid innovation, marketing and health professional outreach, which spurred innovation and growth in the lactose-free segment overall.”

The 990 description states that the dairy checkoff supported innovation in extended shelf-life brands as well.

But its signature is fairlife, according to the 2017 form 990, which states: “DMI assisted and invested in the national 2015 launch of fairlife milk. The goal was to create a national fluid milk brand leveraging the resources and scale of Coca-Cola. Fairlife has been a tremendous success and continues to grow, achieving dollar sales of $250 million,” according to DMI.

“This is a feat that fewer than 1% of new products achieve,” DMI states further, adding that, “About 50% of consumers repeat their purchase of fairlife, a good predictor of its success moving forward. Based upon fairlife’s initial success, fairlife’s owners have announced (in 2017) the addition of two new production lines to meet consumer demand.”

Those production lines, according to DMI, were planned for installation in 2018. Production lines are also planned for Canada as the product was piloted there in 2018.

According to DMI, a new fairlife plant in Arizona is set to begin production in late 2019.

Other partnership products, such as Shamrock’s Rockin Refuel and the coffee and tea latte drinks with Shamrock and with Kroger were mentioned in the fluid milk portion of DMI’s 990 description of accomplishments.

In summary, states DMI, “Our partnerships are already stimulating change in the industry and fundamentally changing the way the fluid milk industry does business by driving investment in modern infrastructure and by creating new products.”

In fact, according to the DMI 990 form, the agency states that the lactose-free milk segment grew by 15% in 2016 and 11.5% in 2017.

Meanwhile, diet and health professionals are increasingly recognizing the benefits of regular whole milk and the A2 milk on digestive sensitivity. This is something that is not promoted by any mandatory dairy checkoff organization and whether it is conventional whole milk or A2 milk, there is no need to further process the milk to obtain the benefits on digestive sensitivity or lactose intolerance.

For example, New York City registered dietician, certified diabetes educator and author Laura Cipullo writes: “When someone eats full-fat dairy versus low-fat dairy, the fat will actually delay the absorption of the milk’s sugar (lactose). As a result, blood sugar rises more slowly over a longer period of time. Consequently, insulin follows this same pattern. Less circulating insulin means less risk for development of insulin resistance and diabetes.”

This was further supported at the recent hearing in Harrisburg, Pa. that focused on getting whole milk back in schools.

During the hearing and rally, registered dietician and nutrition professor Dr. Althea Zanecoskey stated that whole milk provides ‘satiety’, helping those consuming it stay fuller, longer. She said studies show how children consuming whole milk, compared with low-fat (1%) milk, had lower body fatness and less risk of obesity. They also had higher vitamin D status. It took three cups of low-fat milk to get the vitamin D status seen in children after consuming just one cup of whole milk. Vitamin D is a nutrient of concern, according to medical professionals finding it lacking in children and youth.

Whole milk, in and of itself, checks all the boxes.

According to Cipullo, the milkfat found in whole milk “calms digestive sensitivity.”

In fact, according to various expert comments at the USDA Dietary Guidelines docket in the Federal Register, the beneficial milkfat consumed in Whole Milk, reduces the amount of lactose per 8-oz serving, and even more important, as stated above, the milkfat in Whole Milk slows the absorption of the lactose.

Cipullo explains: “Full-fat dairy is lower in lactose, making it easier for individuals with lactose intolerance to digest compared to low-fat or no-fat dairy,” she writes. “Meanwhile one specific fatty acid contained in dairy is known to aid in gastrointestinal health, and according to a 2013 review from Polish researchers, may actually hold promise in the treatment of IBS and promoting healthy gut bacteria.”

While the innovators partner with dairy checkoff to “reinvent the milk experience”, there is evidence now that a simple solution — that would benefit all dairy farmers paying into the mandatory dairy checkoff from all markets — would be to promote and support real, simple, un-fooled-around-with whole milk.

USDA’s oversight and the flawed Dietary Guidelines are the only obstacles standing in the way, despite a growing list of research-based information showing that whole milk holds beneficial keys to health, not harm, when it comes to long-term cardiovascular disease risk, obesity, body mass index, diabetes and other metabolic disorders, digestive health and sensitivity, vitamin D status, nutrient density, nutrient absorption, satiety (feeling fuller, longer), memory and cognitive focus, as well as mood and mental sharpness. Not to mention the more than a dozen essential nutrients that ride along when people choose whole milk because it tastes good instead of opting for empty calories from other non-dairy beverages.

DMI shows its goals for innovation, further processing, blending, and marketing of ‘dairy-based’ or ‘dairy-included’ beverages as a market-building path for the future.

But at the same time, stronger promotion of the original, purely perfect Real Whole Milk would resonate with consumers, because most do not know anything about milk, and when they learn the truth, it opens their eyes to whole milk as a choice.

Whole milk could be ‘reinvented’ just as it is, with better packaging and the freedom to actually promote it. But due to USDA’s control of the message and direction of dairy checkoff, and the proprietary nature of the many partnerships that the checkoff funds, it may be time to reinvent the mandatory dairy checkoff.

Does milk need reinventing?  Simply-unfooled-around-with whole milk checks all the boxes for health and flavor. Meanwhile, DMI states in a 2017 IRS form 990 that it has a “comprehensive revitalization strategy to reinvent the milk experience for consumers.” Since whole milk was pulled from schools in 2009, more young people are growing up believing they are lactose intolerant. Meanwhile, the innovations brought to market with DMI partners over this time period are dairy-based low-fat lactose-free and blended beverages. However, a growing body of research shows science-based reasons why the fat-free and low-fat milk consumption promoted to youth by the dairy checkoff through FUTP60 and GENYouth, in partnership with USDA, may actually be creating much of the new and milder forms of digestive sensitivity that could be avoided by simply consuming regular whole milk. Graphic by Sherry Bunting

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Value added? Or subtracted? DMI, DFA partner on new blend

By Sherry Bunting, Farmshine, July 26, 2019

MINNEAPOLIS, Minn. – The news of DFA’s new Dairy Plus Blends – a half lactose-free low-fat milk / half plant-based beverage concoction broke mid-July. DFA’s Live Real Farms brand website showed Lund and Byerly’s stores as the place to buy the Dairy + Almond and Dairy + Oat, but a visit to two stores on the list at the Minneapolis city limits did not have the beverages in the dairy case – yet.

Looking at the packaging, a first impression is: Wow, why doesn’t 100% milk packaging look this good. If only the agencies managing mandatory milk promotion funds and dairy-farmer-owned co-ops put as much thought into packaging and marketing 100% Real Whole Milk as they do for a diluted “innovation,” imagine what could be accomplished!

A further examination of the new Dairy Plus Blends packaging brought this thought: Why use words such as “Purely Perfect” and “Original” for a blend, when such words would seem best reserved for marketing the actual original, purely perfect 100% Real Whole Milk that the DFA member-owner dairy farmers produce and that actually results in the dairy-checkoff promotion funds.

We asked DFA for some background. In fact, we sent 11 questions to DFA and to DMI communications staffs because we were aware that DFA’s Live Real Farms brand is part of a checkoff-supported partnership between DMI and DFA to innovate products in the fluid milk space under the auspices of DMI’s Innovation Center for U.S. Dairy.

We first wanted to know, why the blend? Why not just create an almond FLAVORED 100% real milk beverage? Because, after all, the new Dairy Plus Blends have half the calories, but they also have half the natural nutrients and only slightly more than half the protein of real 100% dairy milk.

It seemed like value was being subtracted, not added.

We all know that almond beverage has barely any almond in it, being mostly filtered water and some additives, so it seemed like the product is an offering of diluted milk. Since we couldn’t find any on the shelf yet at Lund and Byerly’s in Minneapolis, we aren’t sure if consumers will be asked to pay more – for less.

Of course, the packaging does have more. It touches all the right chords.

DFA was kind enough to answer some of our questions, although we have heard nothing back yet from DMI.

“In an effort to meet the demands of modern consumers, Live Real Farms has launched a new beverage, Dairy Plus Blends, which combines all the nutritional benefits of real cow’s milk with the flavor and texture of alternative beverage options like almond or oat,” stated Rachel Kyllo, senior vice president of growth and innovation at Live Real Farms, a DFA-owned brand.

The reply came by email to the questions we submitted.

“All the nutritional benefits of real cow’s milk”? (The label says 5 grams of protein per 8-ounce serving, not 8, and the other naturally occurring nutrients in real cow’s milk are also reduced.)

Kyllo continues in the reply:

“Nearly 50% of consumers who buy plant-based beverages also have dairy milk in the fridge, so they’re buying both products,” she writes. “This product is not about pivoting away from dairy, instead we saw an opportunity to fulfill a need as people like almond or oat drinks for certain things and dairy for others. This product combines the two into a new, different-tasting drink that’s still ultimately rooted in real, wholesome dairy.”

We wanted to know DMI’s part in developing this concept, seeing that dairy farmers mandatorily pay a checkoff promotion fee on every 100 pounds of milk they sell.

DFA’s response stated that, “The overall product concept for Dairy Plus Blends was developed along with DMI and the Innovation Center for U.S. Dairy. Consumer focus groups were conducted with Millennial and Gen X primary shoppers. Overall feedback was positive regarding the product concept, taste and packaging.”

We wanted to know more about how the product will roll out.

“Dairy Plus Blends are now being test marketed at more than 300 retail stores in Minnesota,” the DFA response stated. “If successful in test, the brand plans to roll out more broadly across the United States, beginning in the Central and Northeastern regions of the U.S.”

DFA has already been bottling plant-based alternatives in copacking arrangements in the Midwest. And, the Cumberland plant in New Jersey, formerly owned by the Camalero family, and purchased in 2017 by DFA, bottles plant-based beverages also as the Camaleros still operate the plant, and they retained ownership of their plant-based beverage investments.

We also wanted to know how the real dairy milk that makes up 50% of the new Dairy Plus Blends is classified for Federal Order pricing, but that question was not answered.

And, we wanted to know if DFA in its “partnership to innovate” with DMI has any plans to innovate the marketing and packaging of 100% Real Whole Dairy Milk in such a pleasing and attractive way as they have with the Dairy Plus Blends? That question was not answered either.

We also wondered if this “blend” will pull dairy milk drinkers as they hear all this talk about becoming “flexitarian” – cutting back on foods that come from cows and adding more foods that come from plants to, you know, save the earth and all.

Along these lines, DFA’s response attributed to Kyllo at Live Real Farms was: “We’re confident milk will continue to have a place on family tables for years to come, but we also understand and appreciate that consumers have choices in what they drink today. We think Dairy Plus Blends offer a refreshing taste experience and provides a unique way to get dairy in front of consumers who might explore other beverage options.”

We wonder if this is an invitation by a dairy-farmer-owned cooperative, funded in part by dairy-farmer-checkoff to lure consumers into experimenting with something new instead of dairy milk or will it appeal to people who have no intention of drinking 100% real dairy milk? It’s hard to tell, but it’s worth watching.

Some advocates of this kind of experimentation say that the fluid milk market needs more lactose-free choices. There are already lactose-free milk choices, there is also A2 for other types of digestive sensitivity, and there’s one thing everyone seems to be forgetting. Whole milk is more easily digested by people with these sensitivities. There’s actual real proof of this now, not just personal experience, but that’s a story for another day.

In this time of continued fluid milk sales losses, farm milk prices below breakeven for five years and dairy farms exiting the business, why does the dairy-checkoff not re-brand and re-market and innovate the packaging and promotion of Real 100% Whole Milk that is virtually 97% fat-free and loaded with natural goodness? Why not actually partner to innovate the brand-promotion MILK? What a novel idea!

Oops, that’s right. I think USDA lawyers would have a problem with that.

One thing that is impressive coming out of Live Real Farms is the Wholesome Smoothie line of Whole Milk yogurt smoothies last year. DFA says it plans to develop “a robust product line with the launch of additional, innovative products over the next three to five years.”

We’ll be paying attention to all of them.

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Dairy mis-leaders call for unity, bring on misery

By Sherry Bunting, Farmshine Op-Ed, July 19, 2019

Dairy producers find joy in the big and little things in life on the farm, working with family, raising children on the farm, building or continuing a family business, seeing the sun rise and set as they work, producing wholesome milk they take pride in, helping a cow have her calf, watching that calf grow and develop, planting tiny seeds, watching a crop grow.

We know personal stress on farms is at an all-time high, amid price and weather pressures. There is some optimism returning as last month’s milk checks were a bit better, and the futures markets fueled some optimism before hitting the see-saw again. Also, the first round of dairy margin coverage (DMC) checks have been received or are in the mail. (Signups for 2019 DMC end Sept. 20).

But despite the return of some optimism, stress continues to build on our dairy farms because the hole that has been dug is so deep, the ground to make up so vast, and the future sustainability of family farm businesses more challenged by the industry’s control of how they operate.

My thoughts here are based on personal meetings, phone conferences, emails and other communications with young farm families operating small herds and multi-family operations with very large herds. 

In my various work and volunteer efforts as a freelancer — I visit a lot of dairy farms. 

Even though milk prices are gradually rising, net mailbox prices are flat and costs are going up, eating into the price gains. Forages are tight, weather is an added burden, farmers are utilizing new strategies, adopting progressive practices, improving their business management – and yet, their farms and families are fraying over the question of whether to stay the course or sell the cows and leave it behind. 

Many are taking on other work and adding to their already long days with efforts to bring in income to support the farm.

Communities are feeling the long fingers, and farmers and related agribusinesses are supporting each other as best they are able. The levels of farm community unity have probably never been higher in this regard: People are coming together to promote milk through voluntary efforts, to support their neighbors, and to reach out to each other as friends and colleagues.

The industry leaders say the dairy industry must be unified. They say it is wrong to challenge the path of the industry because doing so is “depressing and divisive” and “brings more stress onto the farmers.”

Don’t challenge the system, they say, because this creates negativity and stress when farmers need to stay positive and united. This, I’ve been told by leaders.

Questions and challenges are not meant to divide or stress our farmers. The stress is already there. It may not always be spoken, but it is there, and it is visible. 

This stress cannot be painted over with pretty colors.

Stress on dairy farms today is rooted in the way this industry and various milk pricing and nutrition policies have economically failed our farmers (and our consumers), especially since 2008.

To talk about the industry’s path — to discuss and debate marketing decisions made with producer dollars — does not mean one is being divisive. This is America where ideas and challenges can still be discussed and debated, and where leaders can be questioned and held accountable.

How much more divided can an industry become than to see marriages, families, businesses, dreams fractured from the undue stress of not only a tough deal on the milk pricing but perhaps even more concerning, the increased levels of control that this same system puts upon our farmers, and how they manage their farms, as a condition to keep their milk contracts?

This loss of independence and loss of their ability to control the ‘controllables’ is of utmost concern. If we ignore these trends — in an attempt to be passively non-divisive — does that make the issue or problem go away? Certainly not.

Rapid streamlining of the dairy industry is underway, at least in part because this is the path charted in 2008 by the DMI Innovation Center for U.S. Dairy and the U.S. Dairy Export Council working via memorandums of understanding with USDA Ag Secretary Tom Vilsack who is today a DMI leader as USDEC president and CEO and instrumental in the Innovation Center for U.S. Dairy. 

Both USDEC and the Innovation Center are primarily supported by the mandatory checkoff paid by dairy farmers; but they also partner with food supply chain companies that work on proprietary products, ideas and concepts for the expressed purpose of growing the dairy sector globally.

The industry leaders tasked with spending the farmer’s 15 cents per hundredweight say raising exports to 20% (last year was 16%) is the key for a growing dairy industry.

Most notably, Vilsack reported in May that, “2018 was a record year for U.S. dairy exporters with export volume up 10% from the prior year. Simply put, exports support the growth aspirations of the U.S. dairy sector.”

Nowhere in his statement, or the entire blog post at USDEC, did Vilsack mention the dairy farmers who pay his salary. He mentions the dairy exporters and the dairy sector, but not the dairy producers.

Are exporters and sectors paying his salary of $750,000? No, not really. A small portion of USDEC is funded by ‘industry’ memberships, and importers pay a smaller checkoff, but the bulk of the agency and its CEO Tom Vilsack are funded directly from government-mandated dairy producer checkoff funds.

Where are the statements about a promotion agenda that seeks to return a fair price and livable income to those producers paying the agenda-makers salaries?

At various meetings last year where milk markets were discussed, dairy traders stated that exports do not raise farm-level milk prices. Interestingly, 2018 exports were higher than 2017 while 2018 prices paid to dairy farmers were much lower than 2017.

The direction of the dairy checkoff is toward growth of the dairy sector globally, at all costs, and yet the U.S. dairy farmers are paying the bill for this, with USDA having very close control of it.

This goal has been positioned to farmers as an all-out race to gain global market share before other countries do it, without a methodical approach or review on the impact to domestic markets and producers along the way.

This global agenda is also steering the sustainability frameworks and alliances DMI’s Innovation Center is forming that will control more aspects of management at the farm level in the future.

In recent proof of conversations between farmers and checkoff staff and board members, questions about Innovation Center projects, alliances and partnerships were passed off as though the board receives its information on these projects on a “need to know” basis. A board member stated in these exchanges that they are not concerned with seeing every detail of a proprietary project because DMI’s attorneys and USDA’s attorneys know the details, and the board trusts the staff.

(I have served on boards elected by citizens. Trust in staff is critical, but so is transparency of projects paid for by a checkoff — the same as a school tax.)

For some, a call for unity means don’t ask questions. For others, it means get informed and start mobilizing a grassroots unifying effort.

In a copy of non-executive February DMI board minutes received by Farmshine, a strategy is detailed by the Farmer Relations and Consumer Confidence Committee. According to the minutes, a key discussion at the February 19-21 board meeting was stated as “farmer engagement around checkoff value is more important than ever before.”

A key bullet point was for national and local checkoff board members to “focus on the movable middle.”

Another bullet point of the discussion in the minutes is that DMI is “learning from the checkoff Facebook page and regional media coverage (Farmshine) reinforcing that you do NOT continue to engage with those detractors that cannot/will not be moved.”

While Farmshine was still seeking answers to questions and had not yet published the DMI chair’s letter of response (published Feb. 21), DMI had already taken a position in its Feb. 20 board discussion to “not engage” with detractors, mentioning Farmshine parenthetically by name in this category.

According to the minutes, the rest of the DMI board discussion on this topic centered on the need to “reach out to those farmers who see/hear from the unmovable detractors” (that would mean Farmshine readers as per the above). According to the minutes, “ways to reach the movable middle” were discussed.

So, while organizations chart a course for unity and reaching out to a movable middle, dairy farm families are focused on finding ways to move forward on their farms and to unify and inform their communities.

Even though our legislators are taking notice of the growing crisis — and some sincerely care and are trying to do something — these stopgaps and investments are a drop in a very large bucket. Those drops are appreciated, but there are big things to tackle that require courage when it comes to the needed changes in nutrition rules, checkoff rules, promotion rules, labeling rules (and also lack of standard of identity enforcement), complex milk pricing rules (while processors and co-ops are readying a proposal for their make allowance increases as soon as prices improve a bit), not to mention rules that impact the cost of doing business every day on the farm.

As dairy farm families keep moving forward, finding ways to do more with less, working longer hours with less help, taking on off-farm employment and finding other revenue streams to pay their bills — They are consequently burning the candle at both ends and incurring more stress.

The stress on farms of all sizes can be overwhelming and is felt by even the best operators.

We do need unity, yes, but the question farmers are asking themselves is: Who will be part of dairy’s unified and globalized future? They deserve to know the direction the organizations they fund are taking their product, their market, and the industry they have supplied with wholesome milk for generations.

We can do better than this in America where agriculture truly is our backbone. Without strong farm families, all else fails eventually, including our liberty and security as a nation. 

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Genetics firm gets ‘Dynamite’ boost

PA-based upstart has world’s only son of Co-Vale Dempsey Dina 4270-ET EX96

By Sherry Bunting, Farmshine, July 12, 2019

LEBANON, Pa. — Genetics is the multifaceted red-hot topic with nuances that vary across the spectrum of dairies, from small to large, breeder to commercial — and everything in between. It’s objective and subjective. Art and science. Logic and passion. Fact and opinion. All rolled up into one subject that can keep you talking for hours, if not days.

What cuts across all, is managing progress — finding ways to move a herd forward in an environment of rapid change in the face of economic constraints.

For Kendra Nagle, with the help of her righthand man Brandon DeLong, and her father Ken Reist, Top Notch Genetics LLC is that labor of love.

Collaborating with her father Ken Reist and righthand man in bull research and selection Brandon DeLong, Kendra Nagle is bullish on dairy herd progress. They launched Top Notch Genetics, LLC in March 2018. Photo by Rhoda Reist

“Our goal is to keep the dairy farmer moving forward in their genetic progress,” says Kendra, about the genetics company based from her home in Lebanon, Pennsylvania and launched March 1, 2018 — two years after starting Got Embryos.

Friday’s ‘Dynamite’ release has ignited some bullishness, and there’s more to come.

“The most exciting thing yet is Dynamite from Bob Landis. He’s by Kenosha out of the famous Dina,” Kendra reports. “We are super excited to get him out there and get people using him and hope to see babies in the next nine to 12 months. We’re excited to see how they look.”

Bob Landis of Landis Marketing and Landis-MRK Holsteins already knows how Dina’s daughters look, he’s working with many of them already.

“We’re convinced Dynamite will make pretty show babies,” says an obviously excited Kendra.

Top Notch owns bulls, leases bulls and partners on bulls. Their catalog is growing, and they offer some services that put eyes on cattle — not just the numbers and pedigrees — with linear scoring for matings based on what is, not what should be. They even help farms better utilize what’s already in their own inventory.

Co-Vale Dempsey Dina 4270-ET EX96 pictured after being named grand champion of the 2017 Canadian Royal Agricultural Winter Fair. Dina has fans around the world, but her biggest fans may be the ones in Lancaster County, Pennsylvania. Dynamite is her only son, worldwide, and he is available through Top Notch Genetics. Photo submitted

And they are handling bulls from all over. The bulls are housed and collected at two locations in California, and Brandon, who lives in Lebanon and hails from a dairy farm in Michigan, travels to the Midwest every other week, north once a month and throughout the Mid-Atlantic on the days in between.

“Brandon finds the bulls, he does the research, talks to the farmers, sets up the leases. He is an encyclopedia of cattle, especially in the show world — knowing sires, daughters, families. He knows it inside and out,” Kendra relates.

Recently, two representatives in Lancaster County have been added — James Mast, Morgantown, and Joe Wivell, Columbia — just in time for Dynamite.

Jordan Zimmerman of Misty Z Holsteins, East Earl, Pa. was the first to light that fuse, and others in Lancaster County are also getting in. It’s not every day that the son of an internationally-renown cow with some local heritage is offered, available and approachable for everyone. 

In addition to Dina’s ‘cool local story,’ her fans are worldwide with international interest coming in for the only son in the world by three-time All American Co-Vale Dempsey Dina 4270-ET EX96. 

Brandon DeLong (right) of Top Notch Genetics congratulates Jordan (left) and Dale Zimmerman as the first to purchase straws of Dynamite to light the Dina fuse at Misty Z Holsteins, East Earl, Pa. Photo submitted

Dina made her mark on the international stage in 2017, when she was reserve grand champion of the International Holstein Show at World Dairy Expo and grand champion Holstein of the Canadian Royal Agricultural Fair. That year she was also unanimous All-Canadian and All-American 4-year-old.

She came back last fall as first place 5-year-old, best udder and best production cow of a very large and competitive International Holstein Show at the 2018 World Dairy Expo.

And in January of this year, Dina was upgraded to EX-96, after unanimous consideration from multiple Holstein USA classifiers.

Since 2017, Dina has been co-owned and exhibited by Milksource of Kaukauna, Wisconsin, where she lives today and was visited by the Pennsylvania delegation during the National Holstein convention in the Dairyland State in June. Ransom Rail, Perry, New York is also a co-owner.

But her story has a twist for the locals who have followed her for all of her five years. Whether in the showring or attending cattle auctions and Holstein events, Lancaster Countians had a front-row seat for Dina’s development as the 4-H show calf of Bob’s granddaughter Olivia Gold.

Born in Preble, New York and bred by the Cates family of Co-Vale Holsteins, the Ex-96 black beauty’s story started here when Bob and his granddaughter purchased Dina as a calf at a GTPI Type Sale in 2013.

When she calved in 2014, Bob reports that he and Olivia sold half-interest to the Dueppengiessers of Ransom Rail. Nominated fall yearling in milk that year, she went on to be undefeated at World Dairy Expo in Madison and at the Royal in 2015. By July of 2017, Bob had sold his half to Milksource at the Radiance of Ransom Rail.

Dynamite will be pictured this fall, and Kendra says he’s tall, strong and deep with “a great foot and leg score and great udder traits.” What also makes him special is as a cross with no Doorman in his pedigree.

“We were thrilled when Bob called and asked if we would be interested in carrying him,” Kendra recalls. “He’s the only Dina son in the world right now being collected and available for everyone.”

For Kendra, it’s all about relationships and access. She built an international network through Got Embryos, and that’s how she met Brandon. “We launched the genetics business, started the catalog, kept collecting and growing and hitting the pavement,” she says. “We’ve been through four proofs since we started, and are streamlining, getting better genetics and seeing opportunities open up.”

The bullishness continues. Kendra reports another Lancaster County bull from Bob Landis will debut this week.

“Denali has a cool story too,” she says. He carries Bob’s prefix, but Gary Martin is his owner with Bob and Top Notch buying-in for collection.

Bob had Denali’s dam at the Martin farm for calving, and when she had a bull calf, Bob said ‘keep him’ as toward payment. Gary is a smart 17-year-old. 

“He liked the pedigree and saw some interesting things behind the little bull calf, so before making any decisions he got Denali genomic-tested, and he came back +4.06 for Type,” Kendra recounts. “He called Bob and said, ‘so, I’ve got this thing to tell you.’ Bob was surprised and called us right away to see if we would be interested in carrying this Crush son. His dam is a Byway out of Gold Chip Dina and out of Gold Deb EX-95.”

In addition to Dynamite and Denali from Landis-MRK, Top Notch is working with bulls from Luck-E and others in the Midwest, and Waddell, Penn England, Tom Mercuro, Ladys Manor, and Cool Lawn, just for example in the East. The bulls they are collecting span from Pennsylvania, New York, New England and Virginia to Ohio, Wisconsin, Iowa, Washington and even Canada.

Kendra Nagle connects with Matt Engel of Luck-E Holsteins, Hampshire, Illinois about bull prospects at World Dairy Expo. Engel has Luck-E’s Keona-Red (and Polled) son of Kandie in the Top Notch lineup.  Photo submitted

On the sales side, internationally, they’ve worked with herds in Mexico, Brazil, Australia, Peru and the Middle East and are working on Europe and Canada.

 “We don’t sleep, especially when proofs come out,” Kendra confesses.

She’s driven by wanting to help dairy farmers get the genetics that best fit their herds, even as she, herself, has been searching for her ‘fit’ since 2011, when the cows on her parents’ farm were sold.

Kendra is understandably proud of the conception rates they are seeing above the average by 4 to 15%. “We listen to farmers, do our research, work out of my home, and try to keep prices affordable so farmers can use higher net merit and GTPI bulls,” she explains.

And there are no strings attached: “All of our bulls are free agents. Farmers can use a 2900 GTPI bull to make a heifer or bull and do what they want with them.”

She’s learned some lessons in these three years. “The biggest is that genetics move really fast,” she says. “Those numbers move and they change. So it’s important for us to learn and listen for what our farmers are wanting, and to match that — to be comprehensive, competitive and smart when picking genetics, to look at genomics, scores, net merit, but also cow families and to make sure the other things are there, like daughter pregnancy rate and calving ease, and to have a good offering across the board.”

Kendra loves being around dairy cows and working with the farmers. Her passion is contagious.

“I think I’ve found my fit,” she says.

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Vilsack reveals ‘Net-Zero Project’ in Senate testimony, Climate policy table set

Vilsack lays out plan for USDA to partner in ‘Net Zero’ pilot farms, using results to set governmental policies and incentives

By Sherry Bunting, Farmshine, May 24, 2019

(Above) DMI’s checkoff-funded Innovation Center for U.S. Dairy was formed in 2008, the year Tom Vilsack became U.S. Secretary of Agriculture. This timeline shows the events from 2008 to 2019 around the Innovation Center, sustainability programs, FARM program and various MOU’s with USDA while Vilsack was Secretary and after he became president and CEO of U.S. Dairy Export Council in 2017. 

WASHINGTON, D.C. — FARM program evaluations over the past few months have yielded reports from dairy producers on new questions they are being asked about their feeding practices and usage, nutrient management plans, manure management systems and cropping practices, feed rations by class of cattle, livestock and feed inventories on the farm and heifer inventories raised off the farm, milk receipts and receipts for cattle sold for beef purposes, energy and fuel usage and costs, specific questions about wetlands on farm properties as well as new questions about human resources.

Over the past two years, the National Dairy Farmers Assuring Responsible Management (FARM) has added new ‘silos’ to the 4-part program. In addition to Animal Care, the newer portions are Environmental Stewardship, Antibiotic Stewardship, and Workforce Development. With all four in place, virtually every management aspect of a dairy farm falls under the FARM umbrella.

The FARM program is funded by the mandatory dairy checkoff through DMI’s Innovation Center for U.S. Dairy. FARM is administrated by National Milk Producers Federation (NMPF).

98% of milk enrolled

According to its 2018 Report, 98% of the milk produced in the U.S. is enrolled in FARM. The Animal Care silo is mandatory for all 115 participating cooperatives and processors, and 20 of the 115 adopted the Environmental Stewardship module by the beginning of this year.

Development of the Environmental Stewardship (ES) module began at FARM’s inception in 2009 but did not become a ‘silo’ in FARM until 2017. The FARM website states that this portion is currently “voluntary for program participants.”

This simply means that the 115 cooperatives and processors that are participating in FARM can voluntarily add the ES module. When added by the participating cooperative or processor, the components of the module become — in effect — mandatory for the farms.

The FARM materials clearly state that FARM is not a legal document. And yet, its modules have expanding levels of authority beyond a milk shipper’s legal milk contract obligations, without expanding compensation.

FARM’s Environmental module was developed, according to the 2018 annual report, as “a tool participants (co-ops and processors) can use to communicate progress towards reducing their carbon and energy footprint.”

The report says further that the Environmental portion of FARM is geared toward assuring dairy customers and consumers of the dairy industry’s commitment to “ongoing environmental progress (by) asking a set of questions to assess a farm’s carbon and energy footprint and then providing farmers with reliable, statistically robust estimates.” It also “tracks advances in dairy production efficiency.”

The questions and data are evaluated based on a life-cycle assessment (LCA) of fluid milk conducted by the Applied Sustainability Center at the University of Arkansas, incorporating modeling piloted on 500 example dairy farms across the country.

Checkoff-funded GHG calculator

This LCA development was launched in 2009 at the inception of FARM. By 2010, the greenhouse gas (GHG) LCA was completed, and by 2012, the comprehensive environmental LCA was completed. The program’s ‘Farm Smart’ tracking tool was piloted on the ‘model’ farms in 2013-14.

Farm Smart became a transitional tool in 2016 during a period of analysis, replication, system testing and piloting. In 2017, the FARM program added the Environmental module and began using this ‘Farm Smart science’ to establish the GHG calculator.

FARM environmental audits

For those producers who are being asked these new questions during their FARM evaluations in the past few months, their answers are recorded, and farm data are entered into a spreadsheet, from which annual Environmental audits will be randomly selected.

A video at the FARM website explains the process evaluators use to enter the farm name, zipcode and most recent daily milk shipment in pounds of fat and energy-corrected milk.

The spreadsheet automatically groups these farms by 3-digit zipcode and automatically ranks them within their geographic area by production quartiles — the top 25% of farms with the largest daily milk shipments are in quartile 1 and the smallest 25% are in quartile 4 with the other two quartiles automatically segregated.

Another built-in formula then sorts the farms by 3-digit zipcode and then by production quartile to break out ‘subset’ lists from which 33% of each subset will be randomly selected for annual audits.

Evaluators are told in this training video that the information they are collecting is “purely informational and will be used by National Milk Producers Federation (NMPF) at a later time.”

So, as FARM evaluators come to the dairy farm, ask new questions and record new information to develop profiles of farms to run through a Farm Smart GHG calculator, the tracking of the milk supply is well on its way.

This tracking eventually becomes a point of oversight and internal regulation to reach the goals set by the checkoff-funded DMI Innovation Center for U.S. Dairy.

Checkoff sets GHG goals

During a Senate hearing on Agriculture and Climate Change this week (May 21), former USDA Secretary and current president and CEO of the checkoff-funded U.S. Dairy Export Council stated that “U.S. Dairy” is “on pace” to meet its goal (set while he was Secretary in 2009) of reducing GHG by 25% by 2020.

Vilsack also announced that the new benchmark set by DMI’s Innovation Center for U.S. Dairy is net-zero emissions (by 2030).

When introducing Vilsack at the hearing, the Senate Ag Committee leadership referred to him not only as the honorable Secretary, but as president and CEO of the dairy “exports and innovation.”

The former Ag Secretary in his current role is instrumental in DMI’s Innovation Center for U.S. Dairy as this entity partners with multi-national corporations operating global supply chains sourcing dairy products and ingredients.

In fact, Vilsack spent much of his time in front of the Senate Ag Committee Tuesday pressing for government support and partnership in setting up pilot farms where all technologies for meeting the net-zero benchmark can be “measured, verified, cost-assessed and then marketed.”

He said the dairy industry needs a “showcase” of pilot farms and ecosystem markets, and he said business opportunities and jobs will follow. Vilsack also indicated that a net-zero achievement is necessary so “U.S. Dairy has a marketing advantage to be competitive in global markets.”

In the past, the ‘showcase’ dairies for the various pursuits of DMI’s Innovation Center for U.S. Dairy, have included Fair Oaks, and Mike McCloskey of Fair Oaks, based in northern Indiana has been a key driver in DMI’s Innovation Center for U.S. Dairy, headquartered an hour or so north in Chicago. The Innovation Center also provided funding for fairlife as a startup over the past decade of these developments.

Vilsack involved from inception

The Innovation Center for U.S. Dairy was implemented by DMI in 2008. The FARM program came under that umbrella in 2009. Both the GENYOUth and the Sustainability Memorandums of Understanding (MOU) were signed by DMI and USDA in 2009 and 2010 near the beginning of Vilsack’s 8-year tenure as Secretary. And, in 2010, DMI’s Innovation Center set a goal to reduce the already tiny carbon footprint of dairy by 25% by 2020. As now DMI employee Vilsack testified Tuesday, the Innovation Center’s new goal is net-zero by 2030.

In fact, in the final days of the Obama administration, on January 13, 2017, former Secretary Vilsack stepped from the office of the USDA Secretary on Independence Avenue, Washington D.C., and just 11 days and 4 miles later on January 24, 2017 stepped into his current office as president and CEO of the checkoff-funded U.S. Dairy Export Council, sharing offices with National Milk Producers Federation (NMPF) on Wilson Boulevard, Arlington, Virginia.

As noted, the dairy checkoff — under the increased guidance of the Edelman public relations and marketing firm — started down this road in 2008 with the formation of the Innovation Center for U.S. Dairy and the close working relationship with Vilsack while he was Secretary of Agriculture.

Through the MOU’s signed with USDA at that time, it is clear that DMI and its fledgling Innovation Center for U.S. Dairy was working closely with the USDA for all eight years Vilsack was Secretary and has carried the same direction and workload over to his employment with DMI in continuing to set benchmarks for dairy ahead of the current anti-cow discussions that have percolated over that same time within federal agencies through the influence of activist non-governmental organizations.

The DMI Innovation Center partnership with World Wildlife Fund became solidified in 2016, as Vilsack’s term as Ag Secretary was expiring.

Barely two years into his employment through dairy checkoff, Vilsack is back before the Senate Ag Committee talking about net-zero emissions, pilot farms, ecosystem markets and other concepts that align with the Green New Deal outlook on cows as a problem that needs to be solved by meatless Monday and have its methane button turned off in order to be acceptable in the EAT Lancet world where billionaires have invested in the replacement technologies of fake meat and fake dairy while simultaneously investing in U.S. global policy initiatives that were initiated while Vilsack was Secretary and were referenced by Senator Bob Casey (D-Pa.) during Tuesday’s hearing (that’s another story).

Again, instead of partnering with the private sector and organizations that understand the already small emissions of cattle when looking at the complete carbon cycle, dairy checkoff has aligned with groups like the World Wildlife Fund (WWF) and companies with technologies that are geared toward capturing methane and achieving net-zero GHG emissions.

This all sounds good, right? But what does it really amount to?

Net-zero by the numbers

The current benchmark set by DMI and USDA via the MOU in 2009-10 set the goal of reducing U.S. Dairy’s GHG by 25% by 2020. U.S. GHG inventories — according to the Environmental Protection Agency (EPA) — show that total agriculture accounts for 9%. Dairy and livestock, combined, account for half of agriculture’s contribution at 3.9%. Dairy, alone, is at 1.9% on its way, presumably, to 1.5% by 2020.

Even at that point, 25% of 2 is a savings of 0.5% of total U.S. GHG. Part of the FARM program’s tracking of GHG is to look at the number of animals culled for beef so that a portion of their GHG calculation can be pushed over onto the beef footprint and out of the dairy footprint. Can we see how the minutia goes on and on over tiny fractions of impact vs. standing tall to tell the true story about how small the cow’s impact really is?

Vilsack (above): ‘It’s time to get to net-zero’. Mitloehner (below): ‘Cattle do not increase global warming’.

Methane facts vs. fiction

Scientists are pointing out how the methane focus on cattle is being misplaced, or at least not evaluated properly. They point out in a new report that methane is a ‘flow’ emission, not a ‘stock’ emission. In other words, it doesn’t stick around or build up.

Slightly muted Tuesday was the expert testimony given by Dr. Frank Mitloehner, world renowned GHG expert and professor at University of California – Davis. He separated fact from fiction on the carbon footprint of livestock and dairy.

More importantly, he described methane, which is the main GHG of concern for agriculture and especially livestock and dairy. He explained how methane differs from the other two greenhouse gases – carbon dioxide and nitrous oxide – that together make up total GHG.

“For example, carbon dioxide lives for 1000 years, once we emit CO2 with our vehicles, let’s say, it stays there for 1000 years, same for nitrous oxide,” Mitloehner testified. “But methane is very different… with a lifespan of only 10 years.”

He described how a 1000-cow dairy after 10 years, for example, is no longer an emitter of new methane because the methane emitted is also being destroyed at the same rate, becoming part of the carbon cycle through plant photosynthesis, ruminant consumption of these plants and so forth on a continuum.

He explained this destruction process – hydroxyl oxidation – that “occurs constantly,” saying that, “Any kind of discussions that I am part of is a discussion where that fact is left out, and it shouldn’t be left out because it’s critical.”

In fact, Senator Joni Ernst of Iowa said “Some of us are pretty struck today because we have heard that methane is horrible, we need to reduce our livestock herds, and we should have meatless Mondays. We’ve heard that time and time again. It’s been done in various federal agencies in past administrations.”

Mitloehner pointed out that while methane is an important climate pollutant and almost 30 times more potent than CO2, “If we maintain constant livestock herds and flocks, then we are not increasing methane and therefore not increasing global warming as a result of that.”

In that context, mitigating methane becomes a tool to counteract global warming, which is a different discussion and one that gives the methane mitigation a valuation for potential compensation.

Surprisingly, Mitloehner’s contribution received far fewer questions from Senators than one would expect. Most of the Senators gave Vilsack multiple opportunities to come back to his theme of driving dairy and agriculture to net-zero and the business opportunities and marketing advantages this would provide for “U.S. Dairy” in global markets.

Meanwhile, a growing number of scientists are agreeing with a more realistic perspective on methane, that a more ideal approach would be aimed at zero emissions for stock pollutants that are long-lived such as carbon dioxide (through a combination of energy efficiency, more food per lower energy inputs and carbon sequestration through crops, grasses and forages) while aiming for flow pollutants like methane to be low and stable instead of zero because methane is short-lived and part of a continuous sun-powered carbon cycle in which cows are already an integral part on the positive side.

GHG tracking

With dairy farms representing 1.9% of total U.S. GHG and the transportation sector representing 80%, who is then calculating the GHG impact of transportation in a consolidating industry where the new term coined by Vilsack of ‘ecosystem markets’ substitute on a larger scale for the ‘environmentally-friendly’ concepts of regional food systems and eating ‘local.’

On the methane tracking in this deal, a split in thought processes is beginning to emerge.

Meanwhile, the Innovation Center for U.S. Dairy — and its birthing of the FARM program — provide the vehicle to meet the net-zero benchmark this checkoff-funded entity has set. The pilot farms the former Secretary wants the government to partner in supporting would develop another template of practices and technologies farms can implement to meet new Environmental FARM criteria so the net-zero benchmark can be met and marketed over the next 10 years.  

While achieving, marketing and capitalizing on net-zero emissions sounds great, what does it mean for all of the farms being forced to pay into the dairy checkoff with expectations that this money is for promotion and research of the milk they produce and the care they have always taken of the resources they steward?

When benchmarks, streamlining vehicles, government cross-over specialists, evolving science, assumed needs and fuzzy baselines, converge and align, where does this leave the single-family farm of 50 to 200 cows or multi-generational dairy farm of 300 to 1500 cows?

Will they be credited for destroying as much methane as they produce by keeping their herds fairly stable in size?

Without the financial incentives or compensation to implement template technologies to achieve net-zero, how will their tiny profiled-and-tracked GHG emissions be handled in FARM Environmental Stewardship audits and mandatory correction plans in 2020, 2025, 2030?

The drive toward installation of methane digesters to actually capture the methane is great science, and it works for some farms, but not others. It’s a pathway to net-zero, and yet it is unclear whether these other factors regarding methane will be highlighted in the Farm Smart GHG calculator developed by the DMI Innovation Center for the NMPF FARM implementation. Once in place, this GHG calculator will track dairy farm GHG progress as their cooperatives and processors add the Environmental ‘silo’ to the FARM requirements of shippers.

From Innovation Center documents and USDA MOU’s and WWF partnerships documents, the descriptions of the work done between 2010 and 2016 on the GHG calculator have a tracking focus on the same thing the anti-cow folks are focusing on, and that is methane’s 30-times greater heat-trapping capabilities compared with carbon dioxide, and totally ignoring the fact that the methane is short-lived at 10 years vs. carbon at 1000 years so the livestock and dairy industries have already dramatically reduced methane by having fewer animals producing more food today than 30 and 40 years ago.

Will appropriate credit be given to small and mid-sized dairy farms that have had modest growth rates over decades or generations putting them in a place of zero new methane? Or will they need to capture methane to satisfy the net-zero benchmark their checkoff program has set in order to make space for new cows to be added in the rapid growth and industry consolidation areas of the country?

In fact, as part of a flow pattern that involves plants (feed) and cows in reducing the GHG heat-trapping potential of carbon dioxide and methane, combined (see fig. 2), what’s newsworthy is  science does support more accurate modeling to credit the sequestration of long-lasting carbon and accounting for short-lived methane destruction.

On methane, Dr. Mitloehner stated that the mere fact that there are 9 million dairy cattle today compared with 24 million in 1960 and producing three times more milk shows that dairy producers are collectively not only emitting zero new methane, they are reducing total methane as old methane and carbon are eradicated by the carbon cycle and less new replacement methane is emitted.

The problem may be this: Year-over-year cow numbers for the U.S. creeped higher from 2014 to 2018 before backing off a bit in 2019. While still much lower than three or four decades ago, the issue emerging for DMI’s Innovation Center for U.S. Dairy is how to accommodate growth of the new and consolidating dairy structures to attain the expanded global export goal if dairy farms in other areas remain virtually constant in size or are grow modestly by comparison.

To reach the Innovation Center’s new net-zero goal, cows would have to leave one area in order to be added in another area, or they will all have to have their methane buttons turned off or the methane captured because now the emissions are being tracked in order to meet one collective “U.S. Dairy” unit goal under the DMI Innovation Center and NMPF / FARM. Dr. Frank Mitloehner testified that dairies already create zero new methane but this can be tricky when cattle move from one area to another (as we see in the industry’s consolidation).

Will all dairy farms have to get to net-zero to survive over the next 10 years under the GHG calculator developed by the checkoff-funded Innovation Center, which has now been added to the FARM program? That’s the big question.

Before the Senate, Vilsack repeatedly went back to his main premise that the Net Zero Project is  “critical for U.S. dairy.” His written testimony specified that the Net Zero Project comes out of the collaborative work of several dairy checkoff-funded entities along with various global dairy food companies, including DMI’s Innovation Center for U.S. Dairy in combination with DMI-funded U.S. Dairy Export Council, and checkoff-supported Newtrient LLC, as well as an industry consortium called the Global Dairy Platform.

According to Vilsack, the Net Zero Project presents a  “global marketing advantage for U.S. dairy,” he said.  “This is how U.S. Dairy will compete.”

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Timeline tells the story

Consumer ‘trust-building’ (or activist placating) becomes heavy-hand on the farm

By Sherry Bunting, from Farmshine, May 10, 2019

BROWNSTOWN, Pa. — Dairy promotion has been an organized deal for over 100 years, since the formation of the National Dairy Council in 1915. It’s an understatement to say times, they are a-changing.

There’s a difference between reacting to change and being proactive to get ahead of “the next thing.” And there’s a fine line between being intuitive and proactive to influence the direction of that “next thing” as compared with charting a course that actually positions an industry to require its dairy farmers to implement x-y-and-z in order to sell milk.

Yes, it’s better to be at the table than to be the meal carved on the table by others. But when dairy producer checkoff funds — paid by all dairy producers — are used to launch products that benefit only some producers in more vertically-integrated processing structures or to launch programs that lead ultimately to requirements that determine who can sell milk, those are red flags.

As the accompanying timeline illustrates, a lot has been going on since DMI was established in 1995 to manage the checkoff and develop unified marketing plans. That was also the year the U.S. Dairy Export Council (USDEC) was created.

What is even more apparent is the proliferation of logo’d programs, initiatives and strategies put forth since the 2008 creation of the Innovation Center for U.S. Dairy. This followed closely on the heels of the U.S. Supreme Court decision protecting checkoff speech as “government speech” and insulating the dairy checkoff from future court challenges in terms of the rights of producers paying the checkoff and the ability of outside organizations to challenge dairy promotion messages.

The formation of the Innovation Center for U.S. Dairy brought the processing, manufacturing and other industry sectors within the inner circle of checkoff promotion, education, and ‘streamlining’ strategies. Unification of the dairy industry is a worthy goal from a marketing perspective; however, there is a fine line between streamlining and steam-rolling, and it is important to pay attention to this because these efforts are dairy-producer-checkoff-funded and should therefore benefit — and certainly not harm — all producers paying in mandatorily.

DMI’s Innovation Center is where GENYOUth was born. Under the legal non-profit name of Youth Improved Incorporated, GENYOUth aligns with USDA dietary policy.

In fact, the Innovation Center is the entity from which two Memorandums of Understanding were signed with USDA, one involving GENYOUth and the other involving the Dairy Sustainability Guidelines and Framework.

The Innovation Center is also where new products are born, like fairlife, deemed the dairy checkoff’s fluid milk “success story.” Others are following suit (like the July launch of DFA’s Live Real Farms half dairy / half almond or oat ‘milks’ aka Dairy + Almonds and Dairy + Oats).

The Innovation Center is also where producer checkoff dollars fund the National Dairy FARM program (Farmers Assuring Responsible Management) program and its three sectors by which dairies are increasingly controlled: Animal Care, Environmental Care, and Workforce Development.

While FARM is administered and managed by National Milk Producers Federation (NMPF), it is funded by DMI via dairy producer checkoff monies. According to the FARM program website, 98% of U.S. milk production is “enrolled” in FARM (via processors and cooperatives).

We are seeing evidence that the animal care portion — and in the not too distant future the sustainability and employee care portions — are being implemented with ever-increasing mandatory authority. FARM can now over-ride Veterinary Client-Patient Relationships, federal and state regulatory milk inspections and affect legal contracts to sell milk.

What started as a voluntary program to help farms improve while demonstrating to consumers the ways in which dairy farms care for animals, environment and employees, is morphing today into a mandatory auditing and probation tool with as much or more power as legal contracts and food safety inspections.

The Innovation Center for U.S. Dairy is also the entity where producer checkoff funds are used to develop Sustainability Guidelines, Frameworks and Alliances, which are leading to goals, benchmarks, and now practices. These developments are in the staging process to become mandatory as part of the increasingly “regulatory” approach of the producer-checkoff-funded FARM program.

We got a glimpse of the direction of DMI on “sustainability” in a 2018 Report by DMI CEO Tom Gallagher.

Among the “five keys to building and maintaining consumer and thought-leader trust” outlined by Gallagher in a 2018 report, global nutrition policy and sustainability ranked at the top.

On the global nutrition side, DMI seeks to “work with external groups that are educating the United Nations on what policy should look like,” Gallagher reported. He also linked the 2020 U.S. Dietary Guidelines now being evaluated by a USDA-appointed committee to being the “guidelines that will ultimately focus on how we will achieve the 2030 Sustainable Development Goals.”

He noted that Dr. Greg Miller, head of the science and research of the National Dairy Council, is involved in global discussion to “help U.S. Dairy remain a key player as dietary and sustainability standards are worked out.”

As part of this, Gallagher mentioned the Global Sustainability Framework and Reporting, developed under the Innovation Center for U.S. Dairy and now being made part of the FARM program. “A unified voice that represents the entire dairy community is essential to reinforce consumer trust. This has been core to our programs, through organizations such as the farmer-founded Innovation Center for U.S. Dairy,” said Gallagher in the 2018 DMI Report.

“As the dominant dairy community organization for the U.S. market, the Innovation Center will use the Dairy Sustainability Framework (DSF) to demonstrate global leadership in sustainable food systems,” he said. “The DSF was developed to provide overarching goals and alignment of dairy’s actions globally on the path to sustainability.”

Part of the Innovation Center’s path in this way is its partnering alliance with World Wildlife Fund (WWF) in developing the DSF.

“The DSF will enable Dairy to take an all-encompassing approach to sustainability through a common language and alignment of international activity,” said Gallagher, “and through this generate a common sustainability commitment that can be expressed at global, regional, national and organizational levels.”

These are Edelman-style techniques for building consumer trust. Edelman is the Chicago-based firm with offices worldwide, that has been working for DMI for 20 years, and increasingly over the past 10 years.

In fact, Edelman developed the Undeniably Dairy campaign, which DMI leadership has stated on record is designed to be a new seal for dairy products in the future. DMI states that the goal is to replace the REAL Seal that used to be owned by ADA / UDIA and then DMI but is now owned by NMPF.

The Innovation Center, via DMI, is also part of a relatively new initiative called Newtrient LLC, focused on sustainability, and in particular, manure management systems with a heavy emphasis on methane digesters.

According to its website www.newtrient.com, Newtrient LLC was founded in 2015 by 12 dairy cooperatives — DFA, Land O’Lakes, Maryland-Virginia, Select Milk Producers, Agri-Mark, Darigold, Prairie Farms, Michigan Milk Producers, Southeast Milk, Tillamook, United Dairymen of Arizona, and Foremost Farms. At its website, under “Dairy Leadership”, the logos of these co-ops are shown, and the explanatory paragraph states the ground-floor involvement of Dairy Checkoff and it goes this way:

“Newtrient’s founding entities include leading dairy cooperatives from across the U.S. representing nearly 20,000 dairy farmers — and producing one-half of the nation’s milk supply — as well as the two associations that advance the entire dairy industry in terms of promotion, research, education, innovation, issues management, international trade and public policy,” the statement reads. Though not named, the description of the two associations at the end of that sentence would be DMI and NMPF.

“These organizations recognize the need to bring manure management technologies and providers together with dairy farmers, researchers and other stakeholders in order to seize the opportunities from manure, while supporting environmental sustainability,” the statement reads.

In a sense, the Dairy Checkoff continues doing promotion, education and research, but is morphing with increased momentum since 2008-09 toward developing the unified voice and streamlined template by which dairy farmers will be measured for future participation in milk markets.

The Innovation Center for U.S. Dairy works like an “incubator” hatching new products, technologies, programs, guidelines, frameworks and strategies that not only unify the dairy industry message, but also streamline its participants.

With 98% of U.S. milk production enrolled in its premier programs, like FARM, the producer-funded direction is one that now possesses the increasing authority to mandate dairy farm practices, in some cases to a micromanagement level – all in the name of that beginning notion of building consumer trust.

The logos on the accompanying timeline tell this story.

Meanwhile, it appears that the idea of regionally-sustained dairy-sourcing is becoming diluted as Dairy Checkoff board decisions are weighted by shifting milk volume geographies.

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Related links

Who is empowering whom? 1/11/19: https://wp.me/p329u7-1rG

Funding their own demise? 1/18/19: https://wp.me/p329u7-1rW

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4th and 40 backed up to our own endzone 2/8/19: https://wp.me/p329u7-1t2

Money spent, points missed 2/8/19: https://wp.me/p329u7-1sX

How did we get here 2/15/19: https://wp.me/p329u7-1u3

Animal Ag in globalists’ crosshairs 2/15/19: https://wp.me/p329u7-1u9

‘Government speech’ rules, producers have little say 2/22/19: https://wp.me/p329u7-1uI

With science fiction, they socially herd us 3/1/19: https://wp.me/p329u7-1uO

Need for more digging is obvious 3/8/19: https://wp.me/p329u7-1v6

Keep zigging? or time to zag? 3/10/19: https://wp.me/p329u7-1ve

Should dairy farmers be forced to fund government speech?: https://wp.me/p329u7-1ve

DMI CEO on fluid milk 3/22/19: https://wp.me/p329u7-1vL

Funding real milk’s demise? 3/29/19: https://wp.me/p329u7-1vU

Peeling back the layers, 4/5/19 https://wp.me/p329u7-1wn

Truth and thoughts: a tragedy government won’t accept: https://wp.me/p329u7-1wN

Farmers bring questions to DMI chair 4/19/19: https://wp.me/p329u7-1×0

Childhood Nutrition Reauthorization in D.C. 4/26/19: https://wp.me/p329u7-1wF

Vilsack reveals Net Zero Project 5/24/19: https://wp.me/p329u7-1yf

“Government is between you and the consumer” 6/14/19: https://wp.me/p329u7-1xW