Global dairy thoughts Part 3: Do regulated milk checks reflect true value?

KYTour-223w.jpgBy Sherry Bunting, Farmshine, June 1, 2018

BROWNSTOWN, Pa. — To discuss the U.S. role in global dairy trade and the role of global trade in how the value of milk is, or is not, reflected in milk checks at the farm level, we first have to understand our product differences.

For starters, there are subtle differences between global skim milk powder (SMP) and domestic nonfat dry milk (NDFM), traders say they view the two as one market. Global SMP trends translate promptly to CME trends for NFDM.

Product listings describe SMP as a standardized product with a minimum 34% protein, whereas NFDM is variable, ranging as high as 38% protein. The U.S. price for NFDM normally lags the global price for SMP, in part because it lacks the standardized specifications. Thus, the lag is even more significant on a per-protein-unit basis.

The U.S. makes more SMP today than 10 years ago, but NFDM production, typically a byproduct of butter production, remains more than four times larger than SMP. Year-to-date SMP production through March trailed year-ago by 15% while NFDM production was up 15%.

According to the U.S. Dairy Export Council (USDEC), the U.S. exports 50% of its combined production of SMP and NFDM, and the U.S. has about 25% of the total export marketshare for these powders.

Butter is also different. Globally-traded European style butter is fermented (soured) before churning, mostly sold unsalted and contains 82 to 85% butterfat. U.S.-produced butter is churned from sweet cream that is not cultured, contains 80% fat, and is available salted or unsalted.

More European style butter is made today in the U.S. than 10 years ago, and it has curried favor with urban chefs for its cooking and baking properties.

Specialized dairy ingredients, like milk protein concentrate (MPC) and whey protein concentrate (WPC), are also significant globally and rely on specialized technologies and markets. The U.S. makes and exports a lot of whey products, WPC and WPI as byproducts of cheese production. These products have significant value to ingredient markets.

At a meeting in Lebanon, Pennsylvania last fall, Dr. Mark Stephenson, University of Wisconsin-Madison, indicated how some cheese plants view the whey products as primary to the cheese. Specialty plants have also come online to make MPC and MPI for infant formula, sports and geriatric beverages, and other products for dairy ingredient markets.

Another product that is important globally, and traded only on global platforms, is whole milk powder (WMP). It is a market equalizer. The global market performance of WMP gives insight about both the fat and the protein sides of the market.

China’s current demand for WMP may be driving what is now being described as a potential “acute” global shortage of butter.

Like whole fluid milk sales in the U.S., WMP sales globally represent whole milk finding one market rather than being broken down for various markets. Often, this product is purchased by countries that reconstitute it for drinking milk and flavored dairy beverages. The bakery and confection industries also utilize both SMP and WMP.

More U.S. plants are making WMP. Interestingly, USDA’s March Dairy Products Report showed production of WMP at 21.6 mil lbs — up 11% from February and a whopping 93% greater than a year ago. It was the highest level of WMP production since 1993.

GlobalThoughtsPart3_CHART#2In fact, going back through USDA records to 1983, the U.S. once made up to 700 metric tons of dry whole milk powder (Chart 2). We don’t hear about that.

In the 1980s we also exported a lot of WMP, up to 420 metric tons of it (Chart 3). We don’t hear about that either.

GlobalThoughtsPart3_CHART#3One reason we don’t make more WMP today is we have a large and growing domestic market for cheese and butter and cream products. U.S. manufacturers want to keep the cream and not sell it overseas, whereas other dairy-producing nations — like New Zealand with its much smaller consumer population — make a lot of WMP for Asia.

China is a large, but erratic, buyer of WMP. In first quarter 2018, the U.S. exported 20% more WMP than a year ago, but the amounts are small compared to skim powders.

In fact, the drive of consumers away from margarine has led to greater sales and production of butter in the U.S. As more butter is made, and more cream salvaged for other products, NFDM production also increases as part of that model.

 As fluid milk sales decline in the U.S., more WMP can be made, and as whole fluid milk demand is restricted by dietary guidelines, more fat becomes available as a byproduct to dairy processors.

Right now, China is buying a lot of WMP and paying higher prices. So high, in fact, that Australia is seeing limitations in infant formula sales in their country due to China’s pull on powder stocks from that country.

GlobalThoughtsPart3_CHART_#4One lesser-known category of exports that grew by 85% in the first three months of 2018 is UHT shelf-stable milk. China is the biggest buyer, and DFA is a primary supplier with its California Gold, a primarily 3.5% fat, shelf-stable drinking milk with a non-refrigerated shelf life of one year. This product is shipped to Walmart and other chains in China. These sales have grown significantly since 2006. (Chart 4)

(Interestingly, here in the U.S. during the first five months of 2018, major supply-chain-related absences of whole milk from supermarket shelves — while fat free and lowfat rows are stocked full — have been observed across a wide swath of the U.S., mainly east of the Mississippi, and across a variety of supermarket chains with a sort of random consistency)

With the U.S. system set to keep the cream and export as much powder as possible, problems arise when geopolitical factors interrupt that export market pipeline. This can have big consequences in a market where demand for cream vs. skim is out of whack — in part because the U.S. dairy industry’s processing, marketing, pricing, promotion and exporting schemes have been designed to work in tandem with 40 years of flawed lowfat government health guidelines.

A national dairy pricing hearing is needed to look at the reality of today’s domestic and global markets.

Are dairy farmers receiving the true value of the milk they produce? If the true value of milk components were passed through the supply-chain to the farm level more accurately, could this help encourage right-sized production growth?

Can the pricing of “growth milk” be more directly aligned to global market growth trends? We’ll explore that in a future part of this series, and it is an important question for the industry to tackle.

In Part Four, we’ll look at the differences in U.S. and global trading platforms and pricing.

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As producers struggle, cooperatives fumble: How is ‘excess milk’ determined to be a problem in deficit areas?

By Sherry Bunting, updated from Farmshine, June 1, 2018

KENTUCKY — As the calendar turns to June, the saga of lost markets has meant a transition for some, exits for others, and in Kentucky, 14 producers who still faced May 31, 2018 contract terminations with Dean Foods were given a 30-day reprieve.

“It’s down to the wire and we’re working on a hail-Mary,” says Maury Cox, executive director of the Kentucky Dairy Development Council (KDDC). “We started with 19 affected producers, and we’re down to 14. Some have exited the business and we may lose a couple more.”

According to Cox, the KDDC and other state officials are still working, leaving no stone unturned, for these 14 producers, confirming on May 28 that Dean Foods did extend their contracts to July 1.

Five of the original 19 affected producers in Kentucky have sold their cows and a few others, like Curtis and Carilynn Coombs, are in the process of incrementally downsizing their herds as the termination approaches.

In southern Indiana where seven producers were unable to find a market, Doug Leman, executive director of Indiana Dairy Producers, indicates that some are drying off cows, others are selling, and one is getting into on-farm milk processing. There are a select few that have been offered 30-day Dean contract extensions, mainly because their contract renewal dates were different, and Dean could utilize the milk.

In Kentucky, there is the added and unusual situation of an 800-cow dairy not being able to move into their new 8-robot dairy barn because the processor receiving their milk classified the second location, two miles from the main barn, as a start up instead of an existing patron’s modernization project that in total represented a modest expansion.

As the new robot barn sits empty, and many contacts made with no takers, Kentucky dairy leaders scratch their heads at the gate-keeping that is going on — wondering how is it possible that these things are happening? That in a milk deficit region, just two loads of milk from 14 former Dean Dairy Direct farms — that now have until July 1 — can’t find a home? That in a milk-deficit region, this separate situation happens to  a progressive dairy having to let their new completed barn sit empty and keep milking exclusively in the old facility, in order to keep their existing milk contract with another bottler?

All of this happening in a state that is part of the Southeast region that University of Wisconsin dairy economist Mark Stephenson says has a 41-billion-pound milk deficit in terms of production and consumers. And all of this happening in a state spanning two Federal Milk Marketing Orders (5 and 7) that regularly utilize transportation credits and diversions to move milk — bringing milk in from up to 500 miles away to meet the actual processing needs.

It doesn’t make sense. The movie playing-out in Kentucky could come to other theaters in the eastern U.S., and the previews are already being shown.

Repeated emails to Dean Foods went unanswered over the past two weeks as the company’s corporate communications director indicated by automatic reply that she is on “paid time off” until June 4.

Phone calls and emails to the communications department for the Kroger Company have also not been returned as Kroger bottles 100% of its store-brand milk at its own plants, including the Kroger Winchester Farms Dairy plant in Winchester, Kentucky, which is supplied by Select Milk Producers, Inc. and Dairy Farmers of America (DFA).

IMG-0010x(Incidentally, a billboard popped up recently on I-65 North outside of Louisville, Kentucky –picturing Holstein dairy cows grazing and proclaiming Kroger as “proud to support Kentucky farmers”. What could this mean? As noted in this report, requests to Kroger’s communications department — to understand what these billboards mean and what percentage of milk in Kentucky Kroger stores actually comes from Kentucky farms — have gone unanswered.)

Prairie Farms recently announced it is closing a plant in Fulton, Kentucky and will operate a distribution point there. Prairie Farms and DFA own or supply other milk processing assets in the state and region.

Numerous sources outside the directly affected region indicate that Prairie Farms is working with Walmart to source milk and bottling for Walmart while the Fort Wayne plant start up is delayed . Prairie Farms, Great Lakes Milk Producers and Foremost Farms are the three cooperatives, along with Walmart’s independent milk contracts, meeting the single-source loads requirement for Walmart’s new plant in Fort Wayne, Indiana.

(Author’s note: While Walmart touts the milk for its new bottling plant, once fully operational, will come from within 180 miles of the Fort Wayne plant, the plant’s reach in Great Value bottled milk distribution will be much farther — up to 300 miles away where milk that is more ‘local’ to those Walmart stores in Kentucky and southern Indiana is displaced. So far, none of the cooperatives working with Walmart have taken on this southern milk.)

With Prairie Farms, Dairy Farmers of America (DFA), and Select Milk Producers all supplying milk processing operations in Kentucky, not one has agreed to take on the Dean-dropped dairy producers as members.

New members are a problem for Prairie Farms when their own members are on a quota system, and yet, the cooperative is working with other cooperatives and Walmart to source milk to supply a consumer need that was previously sourced from the dropped herds via the Dean plants.

As for other plants, even Bluegrass Dairy and Food, a dairy powders and ingredients company — with plants in Glasgow and Springfield, Kentucky balancing milk supplies in the region — is not exclusively owned by the local Williams family who founded it in 1995. The majority of the company was purchased in 2010 by a private investment firm. Sources indicate Bluegrass cannot accept the displaced milk from independent producers because they are completely co-op supplied and balance co-op milk at the two Kentucky plants as well as a third plant in Dawson, Minnesota.

When asked if DFA is taking new members, John Wilson, senior vice president and chief fluid marketing officer wrote in an email: “Our Area Councils monitor local milk marketing and manage membership decisions as well as other local issues. Membership decisions by this group of local dairy farmers are evaluated based on a number of factors, including an available market for milk, which continues to be out-of-balance in some areas of the country.”

On the Kentucky situation, specifically, Wilson said that, “We are concerned for family farms. We recognize the dairy farmers in Kentucky and southern Indiana who have been displaced face a tough situation. While there is excess milk in the area and finding a home for this milk will be a challenge, we are working with others to determine if we can provide any assistance.”

DFA-FMMO.jpgFollow up questions about how “excess milk” is determined to be a problem in a milk-deficit area, have not been answered. (Since publication, DFA’s John Wilson replied in an email that the excess milk situation is really the region, not specifically Kentucky.” One can see why when comparing the DFA Area Council Map, above right, to the USDA Federal Order Area Map, above left…  Note how in the above DFA Area Council Map, the lines are drawn with the navy blue of DFA’s Mideast Area Council dipping straight into the maroon of the deficit Southeast Area Council right through central Kentucky, for example, and it becomes apparent that the decisions can be weighted toward surplus transport between Orders within Area Councils and between them.)

After all, milk moves in mysterious (and not so mysterious) ways.

MilkTruck#1Meanwhile, of the over 100 dairy farms in eight states affected by the Dean contract terminations, it has been the willingness of smaller regional bottlers and smaller regional cooperatives to mobilize compassion, leadership and local marketing efforts to pick up the slack.

In Pennsylvania, it was localized (PA Preferred / Choose PA Dairy) bottlers like Schneider’s Dairy and Harrisburg Dairies that picked up many of the eastern and western Pennsylvania farms, with much of the balance being picked up by New York-based Progressive Dairymen’s Cooperative, marketing with United, a bargaining co-op covering both New York and Pennsylvania. Six Pennsylvania farms sold their cows.

In addition, one New York producer shipping to the Erie, Pennsylvania plant slated for closure, made his last shipment of milk on May 31 and sold his 150-cow herd and equipment, although he is hoping to rent the freestall barn he built a year ago.

In Tennessee, at least one farm exited, and all but one remaining were picked up by the new Appalachian Dairy Farmers Cooperative that is marketing to a bottler featuring local milk.

In northern Indiana, the farms with lost markets were picked up by two regional cooperatives Michigan Milk Producers and the Ohio-based Great Lakes Milk Producers.

In addition, with the new Class I Walmart plant in Fort Wayne, and the destabilization of fluid milk sales as U.S. population growth is not making up for declining per-capita fluid milk consumption, Dean plant closings are on the horizon. Sources indicate that Dean plans to close as many as seven plants by September but that no new producer-termination letters are expected in the near-term.

This level of Dean consolidation was mentioned in quarterly earning reports. However, Dean Foods has not publicly announced specific plant closings and repeated emails and calls to the Dallas-based company were not answered.

Three plant closings later this year have been confirmed by town authorities quoted in press reports.

One is the Garelick plant in Lynn, Mass.

Another is Dean’s Meadow Brook plant in Erie, Pennsylvania. The Erie Regional Chamber reported to Erie News Now that Dean intends to sell the Erie plant and transfer its bottling to the plant in Sharpsville, Pennsylvania while purchasing a smaller property in Erie for a distribution center.

The third reported Dean plant closure of an estimated seven to be announced is the Louisville, Kentucky plant where many of the Kentucky and Indiana farms that received contract-termination letters ship their milk.

Meanwhile, as Walmart’s new milk sourcing with the “Midwest supply-chain” gets underway ahead of its new Fort Wayne plant becoming fully operational, the 90 to 100 million gallons of milk per year (roughly 800 mil. lbs) are already being moved away from regional bottling and distribution channels to consolidated sourcing and distribution — with the biggest effects at the farthest edges of the new Fort Wayne plant service area, like Kentucky, where dropped producers are unable to find milk buyers.

There just does not appear to be any market access at other plants in the region without being members of cooperatives like DFA or Select or Prairie Farms, and despite multiple attempts by state dairy leaders, none of these three cooperatives have stepped up to accept the displaced producers as members.

As noted in a May 15 Farmshine report,  the KDDC, Kentucky Department of Agriculture and the Governor’s Office of Ag Policy have all been involved in helping these farms find a solution.

It is not an issue of no processors for the milk. The issue is the gates to these processors are closed to these displaced independent producers because they are not already members of the cooperatives manning the gates.

In the most recent March/April edition of KDDC’s Milk Matters newsletter, president Richard Sparrow talked about the situation for these Kentucky dairy farms as “operating in a very limited, if not closed market, with few or maybe no options.”

In his Milk Matters president’s corner, Sparrow offers this commentary:

“It is a really sad commentary on the state of our dairy industry that all the major fluid milk processors in Kentucky have a large percentage of their day-to-day milk supply coming from farms hundreds of miles outside our state’s boundaries. Yet, at the same time, Kentucky dairy farm families can’t find a home for their milk,” writes Sparrow. “This situation did not happen overnight. It is not an oversupply problem or a quality problem. It is a marketing problem.”

KDDC executive director Maury Cox said in a phone interview that he did not want to be negative. However, when he looks at the whole picture of the market, the increased hauling and marketing fees, the quota programs and base-excess programs in this milk-deficit region, the amount of milk being sold $1.00 or more below mailbox price, and the effect of potentially losing these producers upon the infrastructure for remaining producers, he admits that it is difficult to see light at the end of the tunnel.

“They are putting us out,” he says. “I think we are looking at the complete demise of Kentucky’s dairy industry. I think that is what we are seeing.”

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Fort Wayne bottling startup delayed, How Walmart may shape dairy landscape

By Sherry Bunting, edited from Farmshine and Farmers Exchange May 18, 2018

GreatValueMilk(WalmartPhoto).jpgFORT WAYNE, Ind. — Bottling at Walmart’s first-of-its-kind milk plant in Fort Wayne, Indiana will be delayed.

“We’ll begin bottling later this summer and will kick in to full production later this year,” notes Walmart spokesperson Molly Blakeman in an email response.

Until then, she said, “we have a plan in place to ensure there are no disruptions in the supply chain for customers.”

Described earlier as a 250,000 square-foot plant to bottle Great Value and Member’s Mark milk for 600 Walmart and Sam’s Club stores, Blakeman confirmed: “Once it becomes operational and once fully utilized, it will be one of the largest fluid milk plants in the U.S.”

Processing capacity was not disclosed, but Blakeman did discuss milk sourcing.

“By operating our own plant and working directly with the dairy supply chain in the Midwest, we will further reduce our operating costs and pass these savings on to our customers, so they can save money,” she related.

“We are working with three milk cooperatives and a number of independent farmers. Each farm that is supplying milk to our facility is within 180 miles of the plant,” noted Blakeman, explaining that farms terminated by Dean Foods that are “closer to Fort Wayne have signed contracts with the cooperatives to work with Walmart.”

She indicated the plant will serve stores “throughout most of Indiana, Michigan, Ohio and parts of Illinois and Kentucky.”

Beyond that, she confirmed: “Dean Foods remains a very large fluid milk supplier to many (Walmart) stores.”

When questioned about reports that Walmart is already eyeing sites for future plants, Blakeman said they want to be successful with this plant before seeing if other opportunities exist.

“Walmart’s goal is to produce the highest quality and freshest-tasting fluid white milk and chocolate milk possible — and deliver a great value on that purchase,” Blakeman stated.

Meanwhile, the milk price wars among supermarkets, discounters and big box stores have reached new lows of 67 cents per gallon in states without loss-leader protection — including Indiana, Kentucky, Michigan, Ohio and Illinois, the states to be served by the new Walmart plant.

Does Walmart accept these below-cost retail milk prices as a cost of customer acquisition and loyalty?

Blakeman cited the Federal Milk Marketing Orders (FMMO): “Any loss Walmart takes on milk cannot be passed on to the producer because of how our milk payments are regulated by the FMMO. We, as a non-coop processor, have a minimum milk price that is set by the government that we have to pay our producers and cooperatives.”

Furthermore, noted Blakeman, “Walmart will not do well in this plant if our dairy producers do not do well. We will provide a dedicated market for their milk, so they can focus on milk quality and animal care.”

She notes that Walmart understands the role of quality.

“We have strict policies in place in regard to animal welfare,” Blakeman explained, noting full support for the National Dairy Farmers Assuring Responsible Management (FARM) program initiated by National Milk Producers Federation, a milk cooperative membership organization, and Dairy Management Inc., an organization funded by the mandatory milk promotion checkoff.

At a link provided by Blakeman (https://corporate.walmart.com/policies), Walmart states that it is “committed to continuous improvement and aspires to achieve the globally-recognized Five Freedoms of animal welfare for farm animals in our supply chain.”

When asked how Walmart’s milk-sourcing addresses consumer desires for locally-produced milk, Blakeman put the focus on the plant.

“The farms and coops we are sourcing from are local and family-owned producers,” she said. “Milk being supplied to our plant comes from no further than 180 miles away.”

Walmart also seeks to work with single-source loads instead of commingled farm milk, and their efforts to work more directly with the milk supply chain go beyond the area served by the Fort Wayne plant.

A number of reports have surfaced among industry sources that some of Walmart’s milk-source will make its way to Dean Foods’ plants in Pennsylvania that bottle a mix of in- and out-of-state milk and where Walmart’s Pennsylvania milk dealer license is associated.

“The sourcing strategy in Pennsylvania remains unchanged since the Fort Wayne plant is not supplying any of our stores in Pennsylvania,” said Blakeman when asked about this potential development. She declined to address questions about the milk sourcing strategy further east.

In 2013, Walmart acquired a Pennsylvania milk dealer license from the Pennsylvania Milk Marketing Board listed for six fluid milk bottling plants owned by Dean Foods — one in New Jersey and five in Pennsylvania — including plants that cut half of their dairy farm suppliers, 42 in Pennsylvania, four in Ohio and one in New York.

In Pennsylvania, the 80-year-old milk marketing law authorizes the Pennsylvania Milk Marketing Board (PMMB) to set retail and wholesale milk prices at levels to cover retailer and processor cost-recovery plus a profit margin.

The PMMB also sets a producer-over-order premium that is only followed back to the farm level on milk that meets three criteria — produced and bottled in Pennsylvania and sold to stores or warehouses within Pennsylvania’s borders.

That premium was reduced from $1.60 per hundredweight of milk to 75 cents in January due to pressure from out-of-state milk sourcing that allows retailers and processors to keep the producer premiums.

Tennessee has a loss-leader law for milk. While not as robust or lawyered-up as Pennsylvania’s complex system, the provision keeps retail milk prices from going too low.

In addition, Pennsylvania has a state logo (PA Preferred) plants can apply for, and if qualified, use the logo to signify the milk was produced on farms in Pennsylvania. Efforts are underway in Tennessee to see if something like this can be achieved, and the state already has bottlers doing local marketing.

Producers who received Dean letters in Pennsylvania and Tennessee were largely able to find new milk contracts with bottlers that source and advertise their milk using local marketing strategies, but even in those states, some of the affected farms ultimately had to sell their cows.

While a few farms in each affected state sold cows and exited the dairy business, most who found markets, found them with smaller bottlers or smaller cooperatives. However, 14 in central Kentucky, 7 in southern Indiana , 1 in Tennessee, 2 in Ohio and 1 in western New York, have not. (Update since publication: Dean Foods did give a 30 day extension until July 1 to the Kentucky producers and a select few in southern Indiana whose contract renewal dates differed.)

As reported previously, of the 25 Indiana farms facing Dean contract terminations on May 31, those in northern Indiana have largely been resolved with offers from two cooperatives — Michigan Milk Producers and Great Lakes Milk Producers — while the southern Indiana farms are having more difficulty, according to Doug Leman, executive director of Indiana Dairy Producers.

“We have had contacts with some of the affected Indiana farms and are looking for opportunities for them,” said Doug Brechler for Great Lakes Milk Producers. “Like the affected farms, we are still making decisions. We can only take the milk we have a market for.”

Brechler confirmed that Great Lakes Milk Producers is one of several entities that will be supplying the Fort Wayne Walmart plant. “We’re thankful to be one of the suppliers and look forward to working with Walmart and happy to be a part of providing them with high quality milk and service.”

Brechler and Leman see the new Walmart plant as an opportunity for milk producers in the Mideast milk marketing area even though the current situation in milk markets is difficult at this time.

The farms in Kentucky, southern Indiana, Ohio and western Pennsylvania having trouble finding new milk buyers are on the southern and eastern ends of the area to be served by the new Walmart plant and on the fringes of the Southeast and Northeast regions that are considered milk-deficit. (Update since publication, some of the remaining western Pennsylvania farms were picked up by Schneider’s Dairy, a PA Preferred milk bottler, that has taken on at least 8 of the 16 western Pennsylvania producers dropped by Dean).

These eastern deficit regions were noted recently by University of Wisconsin dairy economist Dr. Mark Stephenson in a “changing dairy landscapes” presentation at the Heartland Dairy Expo in Springfield, Missouri. Stephenson said getting milk from surplus regions to deficit regions is a “tricky challenge.”

Most of the farms still seeking new milk buyers are not large enough to be “single-source-loads,” and they are outside of the 180-mile sourcing distance for the Fort Wayne Walmart plant. Yet the Walmart store brand in their area will be supplied by the new plant instead of the regional Dean plants these farms had long supplied.

According to state officials and Federal Order reports, there are other processors operating in the region, and supplemental milk is regularly brought in from outside the area to serve their needs.

In Kentucky, for example, two cooperatives operating across a wider region are the gatekeepers to these plants, and they have previously indicated they will not accept new members.

Maury Cox, executive director of the Kentucky Dairy Development Council is concerned that losing the 14 Kentucky farms could damage the dairy infrastructure and unravel the state’s significant dairy industry.

“It’s down to the wire and we’re working on a hail-Mary,” says Cox. “We started with 19 affected producers, and we’re down to 14. Some have exited the business and we may lose a couple more.”

He says the KDDC, Kentucky Department of Agriculture and the Governor’s Office of Ag Policy have all gotten involved helping these farms find a solution before their last pickup.

Both Leman and Cox share the concern that if the southern Indiana and central Kentucky farms are lost, other farms in the region — both independent and cooperative – will be more vulnerable in terms of future milk markets and transportation costs.

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Pa. Gov. Wolf names Barley to PMMB, Senate confirmation hearings in June

DairyFarm(EasternLancCo)7138w.jpg

By Sherry Bunting from Farmshine, May 25, 2018

HARRISBURG, Pa. — The Pennsylvania State Senate will take up consideration and confirmation of two new appointments from Governor Tom Wolf for the Pennsylvania Milk Marketing Board (PMMB)

The Governor’s appointment of Lancaster County farmer and dairy producer Rob Barley of Conestoga and education technology consultant Carol Hardbarger, Ph.D., require confirmation by the state Senate.

That process is anticipated for June and begins with a Senate hearing via the Senate Ag Committee, which could be scheduled as early as June 6.

RobBarley (1)

Rob Barley

While the Pennsylvania Milk Marketing Law does not specify two “farmer” representatives and one “consumer” representative, the familiar practice over the years is for the 3-member board to be comprised in this manner. Rob Barley has been nominated by the Governor, pending confirmation by the Senate, to fill the expired “farmer” seat of PMMB chairman Luke Brubaker, also a Lancaster County dairy producer.

According to the Milk Marketing Board website, Brubaker was first appointed by Gov. Tom Ridge in 1997 and re-appointed by Governors Ed Rendell and Tom Corbett. Brubaker’s third term expired in 2016.

“I am supporting Rob Barley’s nomination and think he will do a great job in this position, given the current challenges for dairy today,” said Senator Scott Martin of Lancaster in a phone interview Monday. “Even thought Rob comes from a larger dairy farm, I have already heard from many smaller farms who support his nomination because they see that Rob understands their plight.”

The PMMB completed the second of two listening sessions last week on ideas presented by the Pennsylvania Department of Agriculture through a petition by Ag Secretary Russell Redding as well as ideas presented by the public.

The dairy farming community has brought concerns over the past 10 to 15 years about the transparency of the PMMB over-order premium and other regulatory and statutory aspects of the Milk Marketing Law, as well as questions about the modern-day impact of this unique system not found in other states at a time when milk moves coast to coast and around the world.

“This (appointment) is just one step in us looking at the dairy issue and how it impacts our communities and our local farmers,” said Sen. Martin. “We can’t continue to allow expired positions to go as long as it has in this case. We need to show that we care about these issues, and get this confirmation done.”

Martin notes he is “glad the Governor nominated these individuals for the farmer and consumer representation. We need to get them confirmed and move forward to address the dairy issues.”

Barley operates Star Rock Farms, a diversified dairy, livestock and cropping enterprise, with his brother Tom and cousin Abe. They were recognized as 2017 Mid-Atlantic Master Farmers. Among other involvements, Barley has served on the board of the Lancaster County Ag Council and the township planning commission. He has also served as president of the Dairy Policy Action Coalition and has testified in past years before both the Senate and House Ag Committees when various bills were considered to address transparency in the PMMB pricing system.

If confirmed by the Senate, Barley would fill the expired seat of Luke Brubaker, who has served on the Milk Marketing Board for 21 years, including the past nine as chairman.

Dr. Hardbarger, an education technology consultant, earned her degrees in agriculture and education at Penn State University. She is a former assistant professor at Cornell and has applied her specialized skills to various positions in public and private education with interest in technology and resource utilization, professional development, and grant and proposal writing.

If confirmed by the Senate, Hardbarger would fill the expired board seat of Lynda Bowman, a Lancaster resident who was appointed by Governor Tom Corbett in 2011. She previously served as secretary of the PMMB and is a past president and lifetime member of the International Association of Milk Control Agencies.

The third member of the board unaffected by these appointments is Jim Van Blarcom, a farmer and dairy producer from Columbia Cross Roads, Bradford County. He was appointed by Gov. Tom Corbett in June of 2014.

To support the Governor’s appointments to the PMMB, contact your state Senator. Also contact the Senate Ag Committee chairman Elder Vogel at 717.787.3076 and Senate President Joe Scarnati at 717.787.7084 by June 6. To locate your state Senator, use this guide

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Gratitude

Ag Moos

“For our country, for us all,” read the Marines billboard as I drove through the nation’s heartland this week. I turned the phrase over in my mind, thinking just what kind of courage, heart, and love of country it takes to serve iImagen our nation’s military.

A rush of thankfulness flooded over me as the tires of my Jeep Patriot ate the miles to the next destination, and farmland stretched endlessly on either side of the highway.

I whispered ‘thank you.’

Today, our nation commemorates Memorial Day, which began as Decoration Day, when the grave decorating custom became more prevalent during and after the Civil War, honoring soldiers who died — both Union and Confederate.

Since then, the final Monday in May has become a special time to honor all of the men and women who have died in military service, paying the ultimate price for our freedom and…

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Start your engines… the milk’s a’chillin’

By Sherry Bunting, May 25, 2018

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Photo credit ADAI

INDIANAPOLIS, Ind. — Just as those Indy Cars are fueled to perfection for 500 miles at blistering speeds of 215 to 225 mph, that famed Bottle of Milk fuels the checkered-flag dreams of winners at the finish line of the Indy 500.

It’s the honor of the Milk People (aka dairy farmers) to get it there.

While I didn’t meet this year’s Indy 500 Milk Woman — I did meet her husband and children during a visit to the farm last March while passing through Northern Indiana.

Kim Minich, Triple M Dairy, LaPorte, was the rookie last year when Milk Man Joe Kelsay, Kelsay Farms, Whiteland, had the honor of delivering the “coolest trophy in sports.” This year, Kim is the veteran, and her rookie understudy is Andrew Kuehnert, Fort Wayne. They all hail from six and seven generation Indiana dairy farms.

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Photo credit ADAI

Last year, as the ‘rookie,’ Kim learned the ropes for this year’s 102nd big race at the Indianapolis Motor Speedway, where legends are born, speed and tradition rule, and milk always wins!

During my brief March visit to Triple M Dairy where Kim and her husband Luke are part of the dairy farm that has been in his family since 1909, their children Anna, Kate, Mary, Will and Calvin were looking forward to May. They talked of how exciting it was to see Mom’s rookie year as Milk Woman in 2017 … How it felt like the dairy farmers were celebrities like the Indy car drivers — two long and storied traditions brought together when three-time Indy 500 winner Louis Meyer requested buttermilk to quench his thirst after his second win in 1933.

Indy500-4137According to American Dairy Association Indiana (ADAI), Meyer was then photographed in Victory Lane drinking milk after his third win in 1936. Milk was presented off and on during the next several years until, in 1956, the Bottle of Milk was made a permanent part of the post-race celebration by Indianapolis Motor Speedway owner Anton “Tony” Hulman.

Today, the milk choices of the drivers are kept cold in a secure “Winners Drink Milk” cooler.

The drivers are polled ahead of time on their milk preferences — whole milk (3.5%), 2%, 1% or fat-free, and the cooler is stocked with these choices, so the ‘milk people’ are ready.

For this year’s race, 17 drivers chose the whole milk option, 10 chose 2%, 4 chose fat-free and 2 said any milk was fine with them!

Hoosier driver Ed Carpenter chose to up the ante with a request for the throw-back choice of Louis Meyers: Buttermilk. That could be a lucky move as he is considered a strong contender going into the race scoring a pole position.

Tomorrow, as always, the milk will be kept under lock and key in a secret location with one of the Milk People keeping a watchful eye at all times. This year, in fact, the Milk People will be the first to enter the Indianapolis Motor Speedway grounds at 5 a.m., Winners Drink Milk cooler in tow.

Minich5414wRecalling her mom’s rookie year in 2017, Anna says “they looked like the secret service in sunglasses guarding the milk cooler!”

In 2016, the 100th running ended with a milk toast by spectators. The children wonder what milk drama will unfold this year.

“The bottle of milk is the star,” says Kim’s husband Luke. “When they start making their way toward the winner’s circle with that cooler, and you hear the crowd chanting ‘It’s the milk,’ as a dairy farmer, that’s pretty cool.”

Each year the ADAI selects a dairy producer to represent Indiana’s 1100 dairy farms as the Milk Man or Milk Woman.

People flocking through the gates want to talk to the Milk People (aka dairy farmers), and for weeks ahead of the big day, they have opportunities to tell the story of milk and dairy farming. They even co-host the Fastest Rookie Luncheon earlier in the week.

Kim married into dairy farming, and in one pre-race-day interview, she explained how she grew up in the Indianapolis suburbs and would watch the Indy time trials with her father.

Minich5418wToday in her career as a nurse-practitioner, Kim says she has a big appreciation for the milk-side of the big race and appreciates the opportunity to tell others about the nutritional goodness of milk and dairy products as well as the life their family lives — like other dairy farm families across the country — caring for the animals and the land.

The children are passionate about the farm too. They have a growing array of 4-H projects that make your head spin: Cattle, chickens, rabbits, goats, horses. In fact, while the dairy farm is home to 1000 mainly Holstein milk cows, Luke and Kim’s older children each have a few of their own breed — Anna with Jerseys, Kate with Brown Swiss, Mary with Shorthorns, and Will with Ayrshires. They love their chores and are happy to show visitors, like me, around.

“This is a great way to raise a family and produce a quality product for other families to enjoy,” says Luke on a brisk March day at the farm.

His wife Kim could not agree more, saying in pre-race interviews that being part of the dairy farm “has been absolutely wonderful, and as a nurse practitioner, I’m able to talk to my patients about the importance of dairy.”

As for her job tomorrow as the provider of the Indy 500 Bottle of Milk, “It’s a great honor to do this,” says Kim. “It’s exciting to meet the drivers and to represent our dairy farmers and what we do.”

web2016WinnersDrinkMilk-46As the sun rises tomorrow, drivers and crews will be getting ready, spectators will be pumped, our nation’s service men and and women will be honored, anthems will be sung and tributes given… and after 500 miles of exhilarating speed, the winner drinks milk!

So chill your milk, and get ready. The thrill of the 102nd Indy 500 is hours away.

Here’s a video teaser from the 100th Indy 500! Wait for it… The powerful and patriotic blend of freedom and speed that ensues after the recognition of our military, the moment of silence for fallen heroes, the singing of America the Beautiful, the National Anthem followed by the Blue Angels flyover, the singing of Back Home in Indiana, the anticipated “Gentlemen Start Your Engines”, the breaking free of the pace cars as the field of Indy cars passes the paddock with Old Glory in tow!

 

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School milk: Time to be bold for our kids

By Sherry Bunting, from Farmshine, May 11, 2018  

EAST EARL, Pa. — One would think there would be overwhelming support in the official dairy community for the Whole Milk Act, H.R. 5640, introduced by Rep. Tom Marino, representing Pennsylvania’s 10th legislative district.

Since the bill was introduced on the floor of the United States House of Representatives April 26, it has been given a name and assigned to Education and Workforce Committee that oversees the National School Lunch Program. While the Ag Committee is not the committee for this bill, the USDA’s part is the implementation of the rules and reimbursements of the National School Lunch Program — and its approval of five-year cycles of U.S. Dietary Guidelines for Americans that drive these rules.

cosponsorsMarino’s Whole Milk Act has just one cosponsor as of May 9. That would be longtime whole milk advocate Glenn (G.T.) Thompson — representing Pennsylvania’s 5th legislative district. Thompson is now noted at the bill-tracking website as an original cosponsor.

That’s a good thing, because Thompson serves on the Education and Workforce Committee that oversees the National School Lunch Program, Marino does not. Thompson also is vice chair of the House Ag Committee.

Two more cosponsors include Rep. Claudia Tenney of New York and Rep. James Comer of Kentucky. But more cosponsors are needed!

Where are the farm and dairy associations on the school milk issue? Where, indeed, is the “dairy lobby”? The folks who collect, assemble, process, market and distribute the milk produced on dairy farms? Where is National Milk Producers Federation? Where is the International Dairy Foods Association?

Back at square-one: 1%. Taking baby steps in the face of a brick wall.

Chris Galen, senior vice president of communications for National Milk Producers Federation (NMPF) explains it this way: “While (NMPF is) supportive of efforts to increase milk consumption at school and having more options to help achieve that goal and we  are talking with Rep. Marino about his intentions to move the bill forward, and how he can build support for the measure…”

Wait for it, there is a ‘but’…

“At the same time, we also have to secure the progress made so far to upgrade milk options in school. That’s why we’re also working with Rep. Thompson to help pass his H.R. 4101, which codifies the decision made by Sec. Perdue to allow flavored 1% milk in the schools,” Galen stated in an email response to questions from Farmshine this week. We are still waiting on a response from IDFA.

Last fall, Ag Secretary Sonny Perdue made an administrative change to the National School Lunch Program allowing schools to serve 1% flavored milk. They were already permitted to sell 1% unflavored milk.

States then implement this change by filling out waivers to show that children were drinking less milk because of the fat-free option being the only option for flavored milk in order to then switch to allowing 1% flavored milk.

Kids on a school break

While both 1% milk and whole milk have the same essential nutrients, the children don’t benefit if the nutrients are not consumed and the evidence shows the fat is actually good for adults and especially children. Let’s stand up for our children. There was never any evidence they would benefit from the old heart patient’s diet at school in the first place, and mounting evidence shows what the lowfat craze has done and is doing to them. Istock photo andresr imaging

In Pennsylvania, alone, the Pa. Department of Agriculture reported in March that over 300 schools filled out waivers to serve the choice of 1% flavored milk. Many did not implement the change due to having school milk contracts already set for the current school year. Some have recently added the 1% flavored milk.

For the next school year, the waivers are not necessary. Schools may simply make the choice to include the choice of 1% flavored milk in their contract bids for next school year.

Without a change in the law, however, Sec. Perdue’s administrative change could revert to fat-free in the future, says Galen.

He indicated that the USDA action to allow 1% flavored milk “as welcome as it is, is merely an administrative decision, and could be rolled back in the future by a different administration, which is why it needs a law to fully implement.”

NMPF and IDFA have been on-record publicly as supportive of Thompson’s H.R. 4101 but have not come out with any public statement on Marino’s H.R. 5640.

When asked about NMPF’s support for Marino’s H.R. 5640, Galen stated: “It’s worth noting that this will be an incremental process, given the gradual evolution of dietary science along with the snail’s pace of Congress.”

Thompson’s bill, H.R. 4101, with 38 cosponsors to-date, was introduced in the House on October 24, 2017 and referred to the Education and Workforce Committee, on which Thompson serves.

Marino’s bill, H.R. 5640, with just one cosponsor, Thompson, was introduced in the House on April 26, 2018 and referred to the Education and Workforce Committee, on which Marino does not serve, but cosponsor Thompson does.

Neither bill has been taken up by the Committee.

“Making progress toward allowing higher fat content milks in schools is a function of both whether there is bipartisan support on the committees in the House and Senate that oversee the issue, and also whether there is support in the nutrition community, without whose positive engagement we will not be able make any headway on the issue,” notes Galen for NMPF.

He adds that the composition of the Education and Workforce committee is not the same as the Agriculture committee.

“So, we are pushing to make progress on the issue, but it’s a bigger chore than just asking the dairy sector to pitch in — consumer and health groups have to be part of the coalition. We are sharing with them the emerging science on dairy fat, but that’s an evolutionary process,” notes Galen. “You can’t just send them Nina Teicholz’s book and expect two generations of conventional wisdom about food, wellness and obesity to suddenly change.”

Teicholz spoke during the Pennsylvania Dairy Summit last February about the nutrition aristocracy and her 10 years of investigation as a science journalist and former vegetarian.

Her International and New York Times Best Seller “The Big Fat Surprise” has been around since before the last Dietary Guidelines cycle was begun and later approved by then Secretary of Agriculture Tom Vilsack. Her book exposed the tactics and lack of evidence that brought dietary guidelines to the current fat caps that are still in place today — despite proof and trends both showing the flawed nature of these guidelines and the harm to children for which there was never any evidence in the first place suggesting caps on saturated fat would be beneficial in any way.

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Nutrition Coalition image

To the contrary, the evidence is overwhelming that these guidelines actually harm children, which is the reason the long title for Rep. Marino’s Whole Milk Act (H.R. 5640) spells it out like this: The Wholesome Healthy Original Lactic Excellence Making Intelligent Literate Kids Act.

Looking at the science and the trends, this title for the bill on whole milk, says it all.

Marino’s H.R. 5640 specifically targets the unflavored milk options allowed in school. Thompson’s H.R. 4101 “codifies” the step taken by Sec. Perdue last fall on 1% flavored milk.

Both bills can be vigorously supported. They are not mutually exclusive. Perhaps the Education and Workforce Committee can combine them?

The Nutrition Coalition, founded by Teicholz, — with support from many nutrition, health and medical advocates — brings together the evidence and seeks to challenge the “conventional wisdom” foisted upon the public by the national and international nutrition aristocracy that controls the food supply today.

Leading cardiologists are up to date on their recommendations for middle-aged men even though the American Heart Association is dragging its feet. (I know this from personal experience as well).

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If a cardiac patient in his mid-50s — such as my husband just 14 months ago — can be offered, not just served, a carton of whole milk right out of the cath lab at the esteemed Lancaster General Heart and Vascular Institute, then why can’t our children be served the best nutritional option of whole milk in our schools? I am grateful for my in-shape-and-stress-test-passing husband’s recovery from five stents that had the medical staff in disbelief last year. The point here is that leading cardiologists, like his, recognize the role of sugar in heart disease and the fact that as we remove saturated fats from our diets, our bodies replace this with additional calories from carbohydrates. The science shows no harmful impact — and in fact positive effects on hearth health and other health concerns — in consuming even 18% of calories from saturated fat. That’s nearly double the “conventional wisdom” that controls our food supply today. Photo selfie by Sherry Bunting February 2017.

If leading cardiologists are focusing on dietary sugars and the abundance of carbs in the diet — letting go of flawed guidelines on saturated fat — why is there so much dragging of feet where our children are concerned? Why, indeed, given the fact that as Teicholz points out, there was never any evidence — in the first place — that children would benefit from caps on saturated fats.

Still the U.S. government pushed the lowfat agenda and the dairy industry, in effect, acquiesced, only in the past two years supporting “incremental” change.

“Right now, we don’t yet even have a permanent law permitting 1% flavored milk in schools, so we need to start with that and then move from there,” Galen insists.

Meanwhile, the World Health Organization (WHO), dubbed as the supreme agency in terms of being a nutrition aristocracy for status quo – no matter what the science says – weighed in with a statement this week upholding the over 30 years of flawed dietary guidelines.

WHO persists in its recommendation that adults – and children — should consume a maximum of 10% of their daily calories in the form of saturated fat such as meat and butter and 1% from trans fats, to maintain a healthy heart.

Dr Francesco Branca, director of WHO’s Department of Nutrition for Health and Development said in a statement this week: “Dietary saturated fatty acids and trans-fatty acids are of particular concern because high levels of intake are correlated with increased risk of cardiovascular diseases.”

This regurgitation of proven flawed “conventional wisdom” disregards randomized controlled studies to the contrary at double these levels of dietary fat.

And even though it disregards the evidence, even the WHO’s weigh-in this week does not preclude whole milk, real butter, real cheese, real beef from the school diet. The problem is that not all calories have the same metabolic effect and the calorie threshold of the school lunch program was lowered by the Obama administration, along with the current requirements that less than 9% of those calories can come from saturated fats. This is a further level to the problem.

Last month after USDA closed its unprecedented 30-day public comment period on specific topics for the 2020-25 U.S. Dietary Guidelines, nearly 6000 comments were posted by concerned citizens.

The Nutrition Coalition reports that the USDA sought this input on topics where the science has evolved, particularly on saturated fats and low-carbohydrate diets.

“The results demonstrate a widespread belief that the Guidelines need to be changed in order to reflect the best and most current science,” the Nutrition Coalition reports. “Of the 5944 comments, 1145 mention ‘saturated’ as in ‘saturated fats’, 1288 mention ‘low-carb.’”

This was an unprecedented opportunity to stand up for good science, and the public responded.

The Whole Milk Act is another opportunity to stand up for good science. Let’s respond.

Will the U.S. food and agricultural system continue to dance to the agendas of the World Health Organization? World Trade Organization? One World Order philosophy?

Will we sit back and allow two generations of flawed advice — based on absolutely zero studies on children and even refuted by actual trials when they were finally shown the light of day on adults?

Will we continue to face the brick wall of control over what is best for our children with timid and child-like baby steps? If so, it will it take two generations to right this wrong.

Meanwhile, it is our children and our farmers who will pay the price for our complacency.

There are several ways we can all help support Rep. Marino’s Whole Milk Act.

Contact your representative in the U.S. House and ask them to cosponsor and support H.R. 5640 The Whole Milk Act. If you don’t know who to call, enter your zipcode here to find out who represents you

Also, call the U.S. House of Representatives at 202-225-3121 and let them know that H.R. 5640 is important for the health and well-being of our schoolchildren.

In addition, contact members of the House Education and Workforce Committee and the Committee chairwoman. Ask them to put this bill on the committee’s agenda. Its passage must begin in this committee.

Also, write to Agriculture Secretary Sonny Perdue or contact the USDA with your support for the letter Rep. Marino has sent in conjunction with introducing H.R. 5640 The Whole Milk Act. USDA is key to making school milk great again by making it whole again.

Finally, contact Rep. Tom Marino’s office and thank him 202-225-3731.

Follow H.R. 5640, The Whole Milk Act, at this link.

(Author’s note: Since this report was published, the Pennsylvania Association of Milk Dealers announced their official support for The Whole Milk Act)