USDA communicates with DOJ as Dean ‘Estate’ misses final payments on April milk; lawsuit filed to block sale to DFA

deanfoods

By Sherry Bunting, Farmshine, May 22, 2020

HOUSTON, Tex. — Dean is a dead duck, with an estate. The ‘pools’ (no pun intended), in which it reigned as top duck — and most of the pool toys it gathered over the past 20 years — have been sold to its largest supplier, Dairy Farmers of America (DFA), leaving just the Dean Foods (Southern Foods Group) Estate to settle its affairs, including paying farmers for April milk sold in good faith.

But the funds to do that are locked into the Chapter 11 plan handling all manner of administrative expense claims that could take days, weeks or months to sort out. Part of the issue is that the super-priority credit facility of $850 million was extended to Dean to keep operating before sale. Now the sale is consummated, and that credit facility is not being used for critical vendors. In fact, what was used of the $850 million becomes the first post-petition debt to settle.

Meanwhile, dairy farmers are looking at their contracts and the regulated pricing structures and even those states with bonding and wondering what recourse they have for payment. Most have no recourse. In states like Pennsylvania, there is bonding of licensed milk buyers through the Pennsylvania Milk Marketing Board, and it is a complex process.

On a recent DMI ‘open mic’ call for producers, Jim Mulhern of National Milk Producers Federation was a guest. He said they have looked into whether the Packers and Stockyards Act guaranteeing prompt payment for livestock could be use. It can’t, he said. There is no national insurance-bonding of milk buyers like there is for meat and poultry.

Not only did Dean milk suppliers not receive payment, cooperative handlers also went without payment, and the Federal Order pools in which Dean Foods is regulated did not receive their settlement payments. This then affects payments to handlers from the pool for April milk, which in turn affects other dairy producers paid by those other handlers.

Dean Foods did pay the April advance – the first of two monthly checks paid to dairy farmers. But the settlement funds for April milk due mid-May have not been paid, and Federal Milk Marketing Orders have established dates in each milk marketing area of the country stating when the settlement payments are made to the pool, when the handlers are paid from the pool and when the producers are paid by the handlers.

All of those dates for all Federal Milk Marketing Orders have now passed as of May 19, and Dean Foods’ Estate has not honored any of these April milk settlement obligations.

According to USDA Dairy Programs, “Dean Foods, DIP, (Dean) is fully regulated in all Federal milk marketing orders except the Pacific Northwest and Arizona. Dean did not make payment into the Producer Settlement Fund (PSF) for April pooled milk to any FMMO where it is fully regulated.”

USDA also confirms that, “Dean is responsible for paying the blend price to the independent producers who supply its plants. That payment is not contingent on whether or not Dean pays into the Producer Settlement Fund.”

Dairy farmers that ship to Dean Foods confirm no payment has been received, and the Pa. Milk Marketing Board confirms being notified of the same as it regulates these payments in Pennsylvania as well.

USDA indicates that it is “closely monitoring the situation and is keenly aware of the impact this failure to pay has on the dairy industry.”

Furthermore, USDA is continuing to consult with the Department of Justice in an effort to work within the confines of the bankruptcy laws to recoup monies owed to the Pool Settlement Funds.

UNITED STATES DEPARTMENT OF AGRICULTUREHandlers were notified by USDA via memorandum (see Order 5 example of what went out to all FMMO handlers above). They were notified of the non-payment and the pro-ration of available producer settlement monies.

Some handlers have indicated this affects their funds to pay their producers by 20 to 30% for April milk.

In Pennsylvania, where there is bonding through the Pa. Milk Marketing Board, every bond claim is unique and fact-dependent, so there’s no set time that has to pass before a claim is made.

Activity reports are not due to the Pa. Milk Marketing Board until May 25, so a bond claim cannot be made for Pennsylvania milk until the PMMB knows how much is owed.

On the national side, USDA confirms that Dean did timely file its milk receipts and utilization report for April, but these figures are confidential and proprietary, so the amounts owed to farmers and the Producer Settlement Fund are not known.

While USDA is communicating with the U.S. Department of Justice on this, the PMMB is reportedly doing their best to communicate and work with Dean to determine if there’s anything it can do — short of the agency filing a bond claim to have Pennsylvania producers paid. There are four Dean plants in Pennsylvania and at least two out-of-state plants, including one in New Jersey, receiving milk from Pennsylvania and surrounding states.

For Dean’s part, Gary Rahlfs is the chief financial officer overseeing the “winding down” of the Dean Foods Estate. In an email reply early this week, he referred to the May 6 public announcement at the Dean restructuring website after the sale of plants and other assets was completed that week, stating: “Dean Foods anticipates that the plan will provide for the full payment of all administrative expense claims in several months (following the repayment of its senior secured super-priority post-petition financing facility) as proceeds continue to come into the Dean Foods Estate.”

In addition to the public announcement, Rahlfs confirmed that administrative expense claims do include the payments Dean owes for April milk and many other payables.

“We are working diligently to ensure this process and the payments are made as quickly as possible,” Rahlfs wrote in an email response to Farmshine.

Unfortunately, it appears from the wording of the announcement that this could take several months, and the super-priority credit facility Dean used to continue operations during the bankruptcy sale process is being prioritized for repayment as income comes in from sale of assets and prior sales of product during this “winding down” plan for the bankruptcy.

All through the bankruptcy and sale proceedings in the Southern District of Texas, Judge David Jones referred often to how it was a priority of his to ensure a sale process that would not leave schoolchildren without milk and would not leave farmers without markets or employees without jobs. He talked often of fond memories as a child of milk delivered by the milkman.

In fact, this is one reason, Judge Jones approved retainment bonuses for professional staff to be sure that the people who understand the milk business would continue in their positions so the company and its 57 plants would remain in operation and viable during the bankruptcy sale to avoid the chaos that would result if the company fell into Chapter 7 status.

However, a detail left hanging is the final payment to farmers and cooperatives supplying milk to Dean Foods.

Back in November, when Dean Foods filed under Chapter 11, farmers had many questions about whether or not they would continue to be paid for milk. Credit facility of $850 million was secured, and the court gave permission to use income and credit facility for day to day operations to pay employees and critical vendors, including farmers.

Dean Foods Raw Milk Supplier FAQ — First Day

In fact, a Raw Milk Supplier FAQ dated November 2019 still searchable in a cache file of the Dean restructuring website stated (as shown above) states: “We intend to pay suppliers in full under normal terms for goods and services provided after the filing date (Nov. 12).”

That language is no longer readily shown on the website. It was replaced when DFA became heir-apparent by a completely new and different Raw Milk Supplier FAQ dated February 2020.

While DFA, the buyer of 44 of the 57 Dean plants at a price of $433 million, has been Dean Foods’ largest milk supplier, the company also has many independent family farm shippers throughout the Northeast, Southeast and across the country. All are left waiting for payment at a time when they’ve already come through five years of low income and below-break-even prices and at a time when they are taking further losses in milk pricing and additional marketing costs due to the COVID-19 pandemic.

In a separate action this week, a lawsuit was filed for an injunction against the sale of 44 of Dean’s 57 plants to DFA. The lawsuit was filed by Food Lion and Maryland Virginia Milk Producers Cooperative in Federal District Court for Middle North Carolina in Greensboro Tuesday, May 19.

The lawsuit states that DFA’s ownership of Dean’s milk plants is the “coup de grâce (final blow) for competition” in fluid milk markets, arguing the merger gives DFA monopoly over the dairy supply chain, the death of the independent, family-owned dairy farms, and higher prices ultimately for consumers.

Plaintiffs are specifically asking the Court to grant a preliminary injunction to block the sale and want DFA to divest at least one of the Dean facilities in the Carolinas to an unaffiliated independent purchaser.

“This action arises out of Defendant Dairy Farmers of America, Inc.’s (“DFA”) longstanding effort to seize control of the milk supply chain. Indeed, for the past two decades, DFA has rapidly consolidated and dominated the market for the supply of raw milk not by competing on the merits, but through unlawful conduct and anti-competitive agreements through which it has gained near-complete control over the purchasing of key nationwide milk processors,” the plaintiffs state in their filing.

“This anti-competitive campaign has allowed DFA to transform itself from a modest regional dairy cooperative into the Standard Oil of the modern dairy industry.”

The U.S. Department of Justice (DOJ) already approved the deal three weeks ago with the stipulation that three plants in Wisconsin, Illinois and Massachusetts be divested from the 44-plant DFA purchase.

Prior to the bankruptcy and sale, Dean Foods was DFA’s largest customer and DFA was Dean Food’s largest milk-supplier.

“Their partnership was forged through a corrupt bargain entered into at the time of a prior merger between Dean and another dairy processing giant, in order to avoid U.S. Department of Justice (“DOJ”) scrutiny through subterfuge and deception,” the plaintiffs state.

“On May 1, 2020, DFA and Dean closed on the Asset Sale, transforming DFA overnight into both the largest milk producer and the largest milk processor in the United States,” plaintiffs continue. “With capability to wield market power at two levels of the supply chain, DFA now has both the ability and the incentive to wipe out any remaining pockets of competition.”

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DMI details decent dairy conditions on all fronts during industry, media calls

Exports up, Retail up, Food banks up, Inventories stable, Foodservice down but recovering, Future unknown

By Sherry Bunting, May 22, 2020

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CHICAGO, Ill. – How do dairy industry leaders view the status of dairy sales, marketing and promotion and what insights will they share? A few themes emerged from phone conferences with media and producers.

First, it appears that not only is Dairy Management Inc (DMI) working to move product to “hunger” systems, including schools, food banks and charitable organizations, they are also working to reassure consumers — both domestically and overseas — that the U.S. is producing a reliable supply of milk and dairy products, despite the news of so much milk dumping.

After six to eight weeks of supply chain disruptions, milk dumping news, sparse dairy case shelves and/or purchase limits, DMI says national, state and local teams have worked to get stores to remove limits, keep shelves stocked and assure domestic consumers and export buyers that the milk will keep coming.

The news from dairy checkoff leaders is pretty decent on how dairy looks on many of its marketing and inventory fronts. Exports are up. Retail sales are up. Food bank usage and government purchases are up. Inventories are stable. And the previously plunging foodservice sector is recovering.

Meanwhile, dairy farmers received April settlement milk checks in the $10 to $12 range, many with COVID-19 deductions as high as 87 cents/cwt. Some report milk checks netting a single-digit price for April milk. And for direct shippers to Dean Foods, zero checks or deposits were received in mid-May for April milk.

Top dairy leadership talked Tuesday on a media conference call as well as Monday on a producer ‘open mic’ call about some of the dairy market statistics and insight, and how DMI is “pivoting” during the Coronavirus pandemic to “get more dairy in the hands of consumers.”

On the research front — “We need to maintain the things we have to maintain and alter the things we can alter,” said DMI CEO Tom Gallagher in the May 19 media call. One example he emphasized is “DMI’s commitment to publishing milkfat research to keep that front and center.”

On the “open mic’ call with producers the day before, Gallagher said dairy checkoff has been involved in either funding or publishing 59 studies related to milkfat since 2002. He said that the Dietary Guidelines won’t change until there is a “preponderance” of evidence – a “mountain” that is so large — large enough to overcome 40 years of anti-fat dietary advice.

In looking at the list, most are studies related to full-fat cheeses and the role or impact of dairy consumption, no matter the fat content, on various health indicators. Some are studies of milkfat composition, beyond the saturated fat portion, and a handful of the 59 studies pertained to fluid milk of all fat percentages (more on this in a future edition of Farmshine).

On the foodservice front — Sharing data provided to DMI by Inmar Insights, Gallagher said that the foodservice losses can now be measured by transactions but not by dollars or volume, yet.

At the lowest point in the pandemic, the number of sales transactions in the quick serve restaurants (QSR) was down 42% below year ago, but now these transactions are down 20% from year ago.

For full-service restaurants, transactions were down 80% at the height of the pandemic, and now they are 60% below year ago as more full-service restaurants adopt curbside and contactless meal options.

“At the height of the pandemic, 70% of consumers said they would avoid eating outside the home. That percentage is now 50%, and we believe it will reduce over time,” said Gallagher.

Various fresh dairy products

On the retail sales front — Gallagher shared that fluid milk sales pre-COVID were trending 5% below year ago. “But in the first two weeks of the pandemic, fluid milk sales jumped 34% higher, and now, in the past month or so, fluid milk sales are averaging 10% above year ago,” he said.

Looking at products that surround a milk choice, Gallagher noted that cereal sales have been declining 1 to 3% per year pre-COVID. But in the first two weeks of the pandemic, cereal sales jumped 78% and are now averaging 17% above year ago.

He said milk used on cereal has historically accounted for 3% of all fluid milk sales, so the rise in cereal sales is at least a partial factor in the increased fluid milk sales, according to Gallagher.

Looking ahead, Gallagher noted that DMI expects to receive “deep analysis” this week about “why people buy what they bought” both in the first two weeks of so-called “panic buying” and for the four to six weeks after as conditions stabilized.

“There is a lot of conjecture and a lot of opinions out there,” said Gallagher, “But we can’t be in the business of taking our opinion of nutritional or comfort reasons, we really have to understand what was the motivation.”

Gallagher noted that the total all-beverage sector saw very large increases in sales post-COVID, and that the alternative dairy beverage category showed very high percentage increases but are still a very small percentage of volume.

“On an incremental basis, (non-dairy alternative beverage) increases are nowhere near what the increase was for fluid milk sales,” he said.

Another retail category DMI highlighted was frozen pizza sales. “Historically, frozen pizza sales were flat, pre-COVID,” said Gallagher, adding that in the first two weeks of the pandemic, frozen pizza sales jumped 120% over year ago, with sales over the past month averaging 39% higher than year ago.

“That’s just as important to us as cereal sales,” said Gallagher.

Looking ahead, he noted that the “deep analysis” of why consumers buy what they bought will be used as a benchmark and monitored periodically for changes.

“Ultimately, what happens to sales will not be determined by some great ad or some smart thing that one group does, it will be determined by what is the behavior of consumers after this pandemic,” he explained. “We know going into this pandemic, we have moved from consumers spending 90% of their food dollars in the home in the 1950s and 60s to over 50% spent outside the home. Now, those at-home dollars are way up.

“At the end of this, what will their behavior be? Will they eat more at home? Will they keep eating cereal? Or will they go back to breakfast on the go? Will they still do more baking?” Gallagher wondered aloud.

“The idea that we can just educate and the problem will be solved, it wouldn’t,” said Gallagher. “If you look at the competition up and down the grocery aisle, there are two aisles with no dairy in them in the nutrient-rich niche market for on-the-go (shelf-stable). That could have been dairy, but now it’s not, and we have to play catchup.”

He said consumers “eating at home can be a hope that would be huge for the white gallon, but if we think the white gallon is the innovation of the future, it’s not.”

While Gallagher acknowledged that these current retail buying trends during COVID-19 bode well for fluid milk and butter, and DMI can market toward that once they understand why, he also countered these trends, observing that, “If consumers go back to where they were, then we are back to the same opportunities and issues that were always there. The reality will likely be somewhere between those two extremes.”

Gallagher pointed out that many people believe consumers are responding to messages about dairy nutrition, and that it might seem to be a good idea to “market to nutrition, but it’s not that simple,” he said. “What we do for dairy farmers has to be based on the reality of the data.”

In other words, DMI will market to the why’s behind the sales data once they receive the next layers of  “deep analysis” – to continue a promotion direction of following consumers with partner ‘innovations’ instead of leading them with an emphasis on product information.

On the export front — “The numbers look better than we anticipated for the first quarter of 2020 despite the virus, and we hope this will continue for the year,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council (USDEC).

Specifically, Vilsack reported that the U.S. exported 109,000 more metric tons of dairy products in the first three months of 2020 as compared with a year ago, and these exports were worth $528 million more than exports a year ago.

He expects to see a decline in exports into the summer with a rebound later in the year.

He said USDEC is “using aggressive social media in all export markets for U.S. cheese and dairy ingredients to make sure buyers know milk is still being produced here.”

According to Vilsack, export buyers are diversifying their purchases and spreading supply risk, “so some of that market share is coming our way from diversification,” he said. “Our price-competitiveness is good at the moment, and this is something we watch, so our ‘Next 5%’ plan for growth continues even in this much-changed landscape.”

USDEC is marketing with Costco in China and Southeast Asia, including significant advertising about American-made cheeses. In the Middle East, recipes using cheese are being included in grocery bags and hung on doorknobs, said Vilsack. Culinary efforts are also being geared to encourage the next generation of overseas chefs to use American cheeses.

On the inventory front — Vilsack noted that USDEC sent a “warning shot” letter to the European Union and other to be sure any dairy intervention does not lead to a stockpile of powder or dairy products like the EU accumulated in 2015, which had led to three of the past five years of dismal global milk prices.

In a producer call the day before, Gallagher’s guest Jim Mulhern from National Milk Producers Federation described U.S. dairy commodity inventories as “not that bad.”

Mulhern said some dairy product stocks were building at the start of the pandemic, but mostly inventories are “not really burdensome right now. We are not in bad shape (inventory-wise). That’s one reason barrels moved is stocks are not that large right now,” he said.

“That’s one of the reasons we focused on the need to have USDA buy products now and get them into commerce through feeding programs and into food banks right away. The need is there, and we have the product,” said Mulhern. “We don’t want to go back to holding product in storage and selling it on the market later.”

On the food bank front — Vilsack confirmed that there is a 70% increase in overall food demand by the food bank system, and Gallagher added that fluid milk is still the most requested item.

“Food banks get most of their food from retail, and this is a challenge at a time when the retail sector is challenged by this higher demand,” said Vilsack, who in addition to being CEO of the dairy checkoff-funded U.S. Dairy Export Council, sits on the board for the Feeding America national food bank system.

Vilsack noted there is a significant demand for volunteers and for equipment such as refrigeration to handle these higher volumes of food being supplied to serve the expanded need brought on by around 30 million newly unemployed workers during the COVID-19 economic shut down.

National Dairy Board president Barb O’Brien talked about the “emergency action team” that was assembled after foodservice and restaurant trade began to shut down with business restrictions.

“We shifted our focus,” said O’Brien, noting that DMI partner Kroger, with its 16 milk plants, got involved in moving “hundreds of thousands of gallons of milk into the hunger system.

“We also worked with other processors on fluid milk, cottage cheese and turning 40-pound blocks into smaller packages, and we worked with processors to solve infrastructure challenges around refrigeration, to get coolers and refrigerated trucks placed at pantries,” O’Brien said, explaining that their teams are looking at the supply chain issues in four quadrants: schools, hunger, foodservice, and retail and then “working with farmers, processors and cooperatives to redistribute product.”

For school feeding, some of the regional checkoffs developed free emergency menu resources, donated thousands of coolers at alternative school feeding sites, worked with school nutrition personnel and USDA to help translate the rules – to understand the waivers that allow bulk or gallon containers for multiple meal service.

On the schools front –  Also on the media call was Alexis Glick, CEO of GENYOUth. She talked about the COVID-19 School Fund that was launched on March 30 two weeks into the closure of schools and non-life-sustaining businesses.

The purpose of the fund, which has raised $5.5 million to-date, is to provide grants and resources to help schools package, distribute and deliver meals in the grab and go model. Glick said they have received $33 million in requests so far as 12,000 school buildings, to-date, have applied for individual $3000-grants for equipment needed for such distribution.

“So far, $5.5 million in cash and equipment has been awarded to support over 6000 schools, said Glick. She estimates that these 6000 are collectively delivering 50 million meals per week (two meals per day).

“We are aiming to approve 250 to 500 grants per week by prioritizing schools that are serving the highest number of meals with the highest numbers of (USDA) free- and reduced lunch eligibility,” she said.

Glick noted that “alongside dairy farmers,” support for the COVID-19 School Fund has come from financial institutions, Domino’s, PepsiCo, National Football League, United Healthcare and a recent partnership with the Rockefeller Foundation as well as private donations from chefs, athletes and celebrities.

“We are working with our health and wellness partners, our partners at USDA, the School Nutrition Association, celebrities and media entities to get the word out and draw awareness. Just because the school year ends, doesn’t mean the end for hungry kids,” said Glick.

GENYOUth’s technology partner SAP has developed a “resource locator” called SAP for Kids to connect families to school meal resources in their zipcodes.

Glick also said school meals will convert soon to summer feeding sites and then in the fall, meals at schools will likely change based on CDC recommendations for eating in classrooms instead of cafeterias. “Schools will need our help to buy equipment that they will need for that,” she said.

Moving and messaging — As mentioned in the Farmshine article last week, O’Brien again touted the “deep relationships” dairy farmers have with ‘some of the biggest foodservice partners.” saying those partners “extend what we can do to immediately drive incremental cheese volume.”

An example she gave is an extra two ounces of cheese on pizzas and new national ads to be run by Papa Johns and Pizza Hut now through the end of August about more cheese. She also highlighted Domino’s new concept launching carside delivery full-tilt in July, saying this will move “more cheese.”

Meanwhile, said O’Brien, the “Undeniably Dairy” messaging is focused on “building trust and bringing joy by reassuring people that dairy farmers and the dairy community are essential and working tirelessly to ensure a safe and consistent supply.”

They are also repurposing content to provide virtual farm tours for parents and teachers to access for at-home curriculum and promoting recipes.

“Consumers are still interested in where their food comes from and how it is produced,” said O’Brien. So, these “tell your story” and “sustainability” themes the checkoff has been focusing on pre-COVID will continue, but are changed a bit to conform to stay-at-home communication venues.

Among the planned media segments leading up to June Dairy Month are the one Monday, May 18 on Fox and Friends featuring Maryland dairy farmer Katie Dotterer-Pyle and the 30-second video produced with footage from several dairy farms that will be shown 20 times in the following weeks and will be picked up by other stations through online “streaming.”

She also said that the MilkPEP television commercial that was running about dairy farmers, haulers, bottlers, and store employees has now been “co-branded” with a large Undeniably Dairy logo, it reinforces the essential care of the entire dairy supply chain.

O’Brien hinted at a surprise promotion to happen May 21 in partnership with a major pizza chain on late-night-TV — a ‘pizza party’ celebrating 2020 graduates as their traditional graduation ceremonies have been suspended by COVID-19.

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USDA steps up dairy purchases; $437 mil. in new buys

Borden gets nearly half the ‘food box’ dairy total, most of the fluid milk buy

Farmers to Families Food Box

By Sherry Bunting

WASHINGTON, D.C. – USDA announced on May 8 it has awarded $317 million in dairy purchases as part of the new “Food Box” program. These purchases are separate from the flurry of new bid invitations that also appeared on the USDA AMS food procurement website Friday to fulfill the separate ramping up of $120 million in dairy purchases for “normal” distribution in July under “normal” USDA feeding channels.

Friday’s contracts for the Farmers to Families Food Box Program covered a total of $1.2 billion in first-batch purchases. In addition to the $317 million for dairy products, of which roughly half is for fluid milk purchases and half for dairy product boxes, the awards include $258 million in meat product purchases, $461 in fresh fruit and vegetable purchases and $175 million to vendors supplying “combination boxes.”

This first award announcement uses over one-third of the $3 billion set on April 17 by Ag Secretary Sonny Perdue for food box purchases as part of the overall $19.2 billion Coronavirus Food Assistance Program (CFAP).

In this unique program, USDA is partnering with national, regional and local suppliers — whose workforces have been significantly impacted by the closure of restaurants, hotels and other food service businesses.

The approved suppliers will package products into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other non-profits serving Americans in need from May 15 through June 30, 2020.

The biggest winner across the board was Borden Dairy Co. with a total government contract of $147 million — all of it designated as fluid milk purchases — with $99 million for the Southeast region, $40.6 million Southwest and $7.3 million Midwest. This represents nearly half of the total $317 million in dairy purchases announced Friday as part of the food box program, and it constitutes the lion’s share of the fluid milk purchases awarded.

Prairie Farms Dairy cooperative based in Illinois was awarded the next largest dairy contract in the food box program at $27.3 million, with 90% of this for the Midwest region and 10% for multi-region distribution outside of the Midwest. The majority (80%) of the contract is identified as dairy products boxes and 20% for fluid milk purchases.

In The Northeast and Midatlantic regions: Schneider Dairy, Pittsburgh, Pa. was third highest dairy purchase award at $4.27 million, of which $4 million is for fluid milk purchases and the balance for dairy product boxes. Turner Dairy Farms, Penn Hills, Pa. was awarded $315,450 to supply dairy product boxes. Marburger Farm Dairy, Evans City, Pa. was awarded $78,000, with roughly 70% in fluid milk purchases and 30% in dairy product boxes. And HP Hood, Lynnfield, Mass. was awarded $11,000 in fluid milk purchases.

In addition, an array of wholesalers, foodservice distributors, aggregators, missions, common markets, farm-to-table organizations etc., were awarded contracts that included dairy product boxes, and to a lesser degree, fluid milk purchases.

For example, Philadelphia’s Common Market was awarded $5.76 million for use in the Midatlantic and Southeast regions, with almost $1 million of this earmarked for dairy product boxes in the Midatlantic region.

In using the balance of the $3 billion in CFAP food box funds, USDA Agricultural Marketing Service reports it may simply extend these contracts using “option” periods instead of the bid-solicitation process that is used for its other food purchases — depending upon the program’s success in this first go-round.

In addition to the “Farmer to Families Food Box” purchases Sec. Perdue announced a new and additional $470 million in “Section 32” food purchases for delivery to normal USDA feeding programs beginning in July – including $120 million in new spending for dairy products.

These supplemental Section 32 purchases use the normal USDA AMS bid procurement process with solicitations opening in the coming weeks for June approval.

“America’s farmers and ranchers have experienced a dislocated supply chain caused by the Coronavirus. USDA is in the unique position to purchase these foods and deliver them to the hungry Americans who need it most,” said Secretary Perdue in the announcement.

USDA AMS Section 32 purchases of domestically produced and processed agricultural products are ongoing, and USDA anticipates spending a total of $4.89 billion this fiscal year. The new fiscal year begins in July, and USDA says fourth quarter purchases will be determined by industry requests, market analysis and food bank needs.

Additional information on the Farmers to Families Food Box Program, including webinars and an FAQs, is available on the AMS website at www.ams.usda.gov/selling-food-to-usda/farmers-to-families-food-box.

Details on how vendors can participate in Section 32 food and dairy purchases are available at https://www.ams.usda.gov/selling-food

Dairy product specifications and quantities for bid solicitations are shown as they are announced at this website: https://www.ams.usda.gov/open-purchase-request/Dairy_Products%2C_Grades_&_Procurement_of

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Signups begin May 26 for $16 bil. CFAP; dairies payments equate to Q1 milk x $6.20/cwt

Farmers and ranchers deemed essential to our nation’s future; bulk of payment totals under two calculations to be sent a week to 10 days after signup

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By Sherry Bunting

WASHINGTON, D.C. – President Trump and USDA Secretary Sonny Perdue released the long-awaited details on the $16 billion Coronavirus Food Assistance Program (CFAP) direct payments to farmers this week, indicating that dairy farmers will be eligible for two payment rates across first and second quarter production — and those rates pencil out to be equal to $6.20 per hundredweight multiplied by first quarter production, including milk that was dumped.

Farms using USDA Dairy Margin Coverage (DMC), Dairy Revenue Protection (DRP) or Livestock Gross Margin (LGM) programs, or certain types of forward pricing through cooperatives or brokers based on futures markets, are eligible for CFAP direct payments on all pounds of milk production, even the pounds enrolled in these types of risk management tools. Participation in other forms of government aid through the Small Business Administration does not affect a farm’s eligibility for direct payments through CFAP.

Signups with USDA Farm Service Agencies begin May 26, and USDA intends to send 80% of the total calculated Q1 and Q2 payment to farms within seven to 10 days of their signups. The remaining 20% will be paid later, pending the availability of funds in the $16 bil. package after all eligible commodity applicants receive first payments.

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Screenshot of CFAP payment spreadsheet calculator across all eligible commodities. A preview video on how to use the calculator and fill out forms can be found at this link — Check back at www.farmers.gov/CFAP for the spreadsheet calculator or find it through your FSA portal.

Applications will be received until August 28, 2020. USDA has a video for signup, explaining how to use the online calculator spreadsheet, across commodities at this link.

To calculate payments, USDA is using $4.71/cwt from the CARES Act applied to a dairy farm’s first quarter (Jan-Mar) “actual” milk production and $1.47/cwt from CCC funds for a second quarter (Apr-Jun) “calculated” production that is equivalent to the first quarter pounds multiplied by a factor of 1.014 to reflect seasonal production increase for Q2.

Those two payment rates with the second quarter calculation of production push the total payment to be equivalent to multiplying first quarter production by about $6.20/cwt.

With the 80 / 20 split in how this total payment will be sent, farms shipping 5 million annual pounds of milk with roughly 200 cows could expect a payment around $60,000 by early June if they sign up at the end of May, with the balance of roughly $15,000 in a later payment, pending availability of funds.

Responding to bipartisan support from members of Congress asking for payment limits to be increased so that larger multi-generation family farms can benefit, USDA expanded the payment limits to $250,000 per farm entity even with multiple eligible commodities. The previous limit was $125,000 per commodity and $250,000 per farm.

The payment limits were increased for larger farms with multiple ownership structure. Partnerships with two owner-operators would have a payment limit of $500,000, and the maximum limit for any farm structured as an LLC, LLP or corporation with three or more owner-operators is $750,000.

These payment limits apply to the total amount of money a farm can receive even if applying under more than one commodity, such as dairy and crop or dairy and beef.

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Graphic by Center for Dairy Excellence risk management coordinator Zach Myers.

Doing the math on larger herds, it appears that a 1000-cow dairy would stand to receive around $325,000 total payment (split 80%, or $260,000, right away, and the remaining 20% later pending available funds). This puts a 1000-cow dairy over the single-owner limit but under the partnership two-owner limit.

The rough math on a 2000-cow dairy comes out to a total payment of around $650,000, which is getting close to the hard-cap of $750,000. A farm of this size or larger, with three or more owner-operators, would have a payment limit of $750,000.

Dairy economists Mark Stephenson and Andrew Novakovic at the Dairy Markets and Policy website have a more detailed paper on this that can be downloaded downloaded here.

Eligibility is limited to owner-operators who materially participated in the dairy (400 hours minimum). For those deriving 75% or more of their income from farming/ranching, there is no adjusted gross income limit for eligibility. For owners not in that category, the adjusted gross income limit to be eligible for CFAP payments is $900,000.

To be eligible for these payments, farms must also show “conservation compliance” regarding the highly erodible land and wetland conservation regulations.

The original USDA notice stated that milk priced on forward contracts would be ineligible for CFAP direct payments, and under ‘dairy eligibility’ was original language stating: “Any milk production that is not subject to price risk for any time during January, February or March is ineligible.” However, USDA removed this language about forward contracting in the final rule for May 21 Federal Register publication.

USDA has confirmed that milk pounds covered by USDA risk management programs like DMC, DRP and LGM, as well as some types of forward contracts based on futures markets through cooperatives and brokers, are eligible for the CFAP direct payments. 

Forward contracts are a gray area. An example of ineligibility could pertain to milk pounds that are specifically priced under a binding contract where pricing is determined ahead of time, such as cost-plus, and where no changes were made to reduce those contracts or charge marketing fees during COVID-19. These are not common contracts, but some larger farms have such contracts with certain processors outside of the Federal Milk Marketing Orders.

In short, the final rule as prepared for Federal Register publication on May 21 no longer contains language excluding risk-managed milk from being eligible, but a farmer applying for CFAP payments is still signing a statement that the pounds of milk certified had price losses of more than 5% and incurred other marketing and inventory costs or deductions during COVID-19.

Producers are encouraged to call their local FSA offices as soon as possible to set up phone appointments for application and to find out how to provide the information required for their applications and forms, such as tax ID number, ownership structure of the farm, adjusted gross income if applicable and pounds of first quarter milk production via milk check settlement statements Jan. through March, or other documentation for dairies doing on-farm processing.

Any milk that was dumped on farms in March due to COVID-19 supply chain disruptions that is not included in the milk check pounds can also be self-certified by a producer’s record of this dumping, according to USDA.

These CFAP payments help producers offset COVID-19-related declines in income by price loss and sales loss for dairy as well as livestock and identified specialty and non-specialty crops.

Secretary Perdue indicated that for livestock and poultry growers forced to euthanize animals due to supply chain disruptions, a different program will handle those losses once USDA has the data on these occurrences to review. These CFAP payments are only for animals sold in the first quarter and animals subject to price risk that are a part of a producer’s inventory on the date chosen in the second quarter.

Included under livestock are payments per head for specified classes of cattle (excluding cattle intended for dairy production), hogs, sheep (lambs and yearlings only) and wool.

CFAP_Livestock_Payment_Rate_Figure_2

As a side note, there are questions about whether or not CFAP payments for beef cattle apply to dairy cull cows. It is clear that cattle sales intended for dairy are not eligible for cattle payments. However, dairy producers feeding Holstein or Dairy-cross cattle for the beef market, or raising / backgrounding such calves for feedlots may apply for cattle payments. Cull cows may be eligible under “Mature Slaughter Cattle” for Q1 actual sales, but the “inventory at risk” method is not appropriate for dairy cull cows since they are dairy production animals while they are in “inventory,” not beef animal inventory waiting for a slot at the packing yards. Youngstock sold for to beef or veal growers, not dairy replacements, can be entered under feeder cattle. Check with your FSA office.

Assistance to cattle producers has two components – cattle sold between January 15, 2020 to April 15, 2020 and cattle inventory subject to price risk on a date of the producers choosing between April 16, 2020, to May 14, 2020. Livestock payments are per-head are shown in the Farm Bureau chart above by the two rates used for Q1 and Q2.

USDA confirmed in a media call that payments will only go to producers with eligible cattle and livestock, including contract growers if their contract allows them to have price risk in the livestock. Processor-owned livestock are not eligible for these direct farm payments.

CFAP_Non_Specialty_Payment_Rate_Figure_1_CorrectedIncluded under non-specialty crops are payment rates for malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat and hard red spring wheat. Crops grown for on-farm feeding of dairy animals or livestock are not eligible, but cash crop sales are.

Included under specialty crops are payment rates for a variety of fruits and vegetables as well as almonds, pecans and walnuts, beans and mushrooms.

USDA has a special webpage devoted to the CFAP program at https://www.farmers.gov/cfap

CFAP payments are not government “handouts” or “bailouts”, but rather the government’s recognition that our nation’s farmers and ranchers are essential to our nation’s future. Like other businesses receiving federal assistance during this worldwide COVID-19 pandemic and economic shut down, the losses farmers are suffering are monumental and totally outside of their control and outside of the disrupted supply chain’s ability to handle under these unprecedented conditions.

Throughout the past eight weeks of publicized empty shelves, purchase limits and dumping of milk — as well as euthanizing of livestock and plowing under of produce unable to be harvested – consumers are showing renewed appreciation for American farmers and ranchers. These much-needed funds will not make farmers whole but are a life boat in uncharted waters.

According to American Farm Bureau Federation, this program is considered “an important downpayment in helping farmers and ranchers deal with the unprecedented and unexpected economic fallout related to COVID-19.”

According to Jim Mulhern of National Milk Producers Federation, the details on the dairy payments are “more than we anticipated,” but at the same time “more is needed,” he said.

Both AFBF and NMPF – as well as other farm organizations – indicate they are working with lawmakers for additional assistance in the future as the full extent of the pandemic and crisis become known. USDA will be replenishing the CCC by $14 billion in July, and Congress is currently looking at what additional measures are necessary to assist producers of commodities not included in the CFAP package.

Mulhern noted in a PDPW Dairy Signal webinar Tuesday that the dairy industry stands to lose nearly $9 billion this year if the recently released World Agriculture Supply and Demand Estimates of 2020 milk price comes to fruition – or worsens.

He said that even with the expanded limits for CFAP, “This still leaves larger operations (over 2000 cows) without coverage for larger losses. I think there’s a good chance that additional legislation, like the House ‘HEROES’ bill, to have the payment limit issue removed.”

Mulhern also noted that one of the biggest CFAP benefits to all dairy farmers right now are the nearly $450 million in new dairy purchases that were recently announced through the $317 in dairy product awards for the new food box program May 15 through June 30 and the $120 million in additional Section 32 dairy purchases out for bid for delivery to food programs in July.

The good news is that cheese, butter, powder, and milk futures prices have been rallying over the past four weeks with near-term Class III milk contracts well into the $17s — more than $5/cwt higher than the current for May. Mulhern expects to see a volatile pattern in dairy product and futures markets for the rest of this year.

To stay up to date on information from USDA about the CFAP payments, including an FAQ, click here

The 40-page official rule on was published today, May 21, in the Federal Register. Read it here.

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Consumer trends amid COVID-19 have DMI a bit perplexed

Gallagher skeptical about ‘comfort and nutrition’, wants data from partners, not opinions. O’Brien says ‘future of dairy’ may go fast-forward

Various fresh dairy products
Data shared by DMI in the May 4, 2020 industry call shows all retail dairy sales categories are up significantly year over year. DMI CEO Tom Gallagher noted that the level of increased sales of fluid milk compared with a year ago are “still relatively consistent” as of the end of April.

By Sherry Bunting, Farmshine, May 15, 2020

CHICAGO, Ill. — Amid the supply chain disruptions brought on by COVID-19 restrictions, Dairy Management Inc. (DMI) and the National Dairy Board are having weekly conference calls. They say 100 to 150 farmers have been participating.

And they are scratching their heads a bit over what to make of the now ‘unleashed’ consumers.

‘Unleashed consumers’ is the phrase I have coined for describing consumers now in control over their food, beverage and dairy choices, now that they are not so completely influenced by away-from-home and institutional feeding that adhere more closely to the dietary guidelines.

This has emerged most notably in the huge increases in whole milk sales that have boosted the fluid milk category well over year ago levels to the first year-over-year increase last month in decades. It has also shown up in the demand for butter, full fat cheeses and other cream products that sell out quickly at retail and prompt spot shortages.

On the May 11 DMI call, Russell Weiner, Domino’s COO and president of the Americas, was a guest and he highlighted his company’s partnership with dairy checkoff since 2008. That is a separate and quite interesting story. One thing he referenced is that pizza sales have been strong through the pandemic, and that consumers historically spend 5% of their disposable income in the quick-serve-restaurant (QSR) sector through recessions and other crises. This appears to be holding true amid the pandemic.

DMI CEO Tom Gallagher and National Dairy Board president Barb O’Brien also gave updates about what DMI is doing about consumer buying patterns and future trends. It was evident in the discussion that DMI has a future of food concept for dairy based on prevailing insights from its partners and does not want to deviate from this framework unless data from partners points to a true shift in consumer purchasing and unless they have a “why” behind the shift.

Gallagher stressed that DMI, and the states and regions, are collecting every piece of information from every partner they can to “see what it will mean post-COVID or during COVID. There are a lot of opinions out there,” he said, “but it’s too early for us to put our stake in the ground as to this is what it will be.”

He talked about DMI’s data partner Inmar Analytics, which did the recent 2019 “Future of Food Retailing” report. “At no charge to us, they are looking at the buying patterns after the initial ‘panic buying,’” said Gallagher. “We know what people bought, but why did they buy it? Was it because they were interested in comfort food or nutrition? Or were they hoarding? Or were they baking more? I am a data guy. I want to see the data as to why they buy what they bought.”

In a skeptical tone, Gallagher went on about these so-called “opinions” on the buying patterns revealed by COVID-19 impacts.

“Some say, ‘Oh, it’s a return to nutrition.’ And some say, ‘Oh it’s a return to comfort food.’ But what really drove their behavior? And what strategies should really influence our thinking about the future? We don’t know. In the meantime, we will collect information,” Gallagher said. “We all have opinions, but we want to be informed with data, not opinions, to design how we move forward.”

Gallagher mentioned a study coming out this week on what food companies are thinking will be the patterns after COVID. When pressed later about how to hang on to the new-found bump in purchases of certain dairy products at retail (such as whole milk and butter), given that some of these purchases may be relatively new for some consumers, Gallagher was steadfast on not changing the future plan because of current “opinions.”

He stated — again — that Inmar Analytics will be able to tell DMI “exactly what shoppers put in their baskets and compare it to what they put in prior to COVID. They will be able to tell us what changed and through technology, why did that change occur, that’s the data I want,” he said.

One ‘why’ for ‘what changed’ (in this reporter’s opinion) may be too subtle for the Inmar Analytics surveys to detect — that is the nuances of just how much consumers have been controlled by the Dietary Guidelines pre-COVID, without even realizing it. There is rarely any talk from DMI about what those flawed guidelines — set by the government with very little opposition by the dairy industry — actually do to buying patterns when people are consuming 54% of their calories away from home and much of that in schools, workplaces, quick-serve-restaurants and other institutional settings where food choices are more “formulated.”

The COVID-19 pandemic has abruptly unleashed consumers nationwide from the fat-restrictive Dietary Guidelines. Now, consumers are able to use more of their own discretion and choice apart from institutional food settings, guidelines and formulas. Some experts ‘reading the tea leaves’, such as Nielson Global Insights, observe that after a significant event like a pandemic of this magnitude, consumers can be expected to stay with some of the choices that made them feel healthy and safe during the pandemic, once the world gets back to a new-normal. That could be significant for dairy — but it may not line up with the ‘future of dairy’ pathway set by DMI and its partners.

O’Brien explained that dairy checkoff teams are actively involved in both long-term and immediate efforts.

“We are looking at the future of dairy. COVID-19 may fast-forward some of that future to happen more quickly,” she said. “In the immediate term, our retail teams are working with MilkPEP, to keep stores stocked and address the concerns people have about value, and we’re doing things with e-commerce to offer recipes that extend the use of the dairy products they bought.”

DMI’s ‘future of dairy’, as we know, is built on partnerships, innovation, and promotion of dairy farmers and sustainability and animal welfare practices, not education and promotion about milk and dairy products. It is well known that the innovations over the past decade have been focused on consumers eating dairy, not drinking it; and in the fluid space, these innovations emphasized through DMI partnerships have focused on ultrafiltered, shelf stable, lower-fat dairy beverages and blends and away from the whole milk gallon jug.

But we also can see that in their time of freedom to choose for their families amid the pandemic, consumers are reaching for the whole milk gallon jug. In fact, prices are rising on whole milk by $1 to $2 per gallon, while other fat content milks have remained the same, and still sales of whole milk are strong.

A producer from Wisconsin on the call asked Gallagher to make sure to track convenience store purchases when gathering the data, not just grocery retail, noting that many consumers buy their milk at convenience stores. Gallagher responded that they may have to check with another data partner for that piece.

O’Brien also stressed that while they gather data about consumer patterns, DMI will continue to chart the path it has set. That is to “gain the trust of consumers and celebrate dairy’s role in sustainably nourishing families and communities,” she said, adding that a media segment is being prepared for Fox and Friends next Monday morning, May 18 that will feature Katie Pyle of Cow Comfort Inn Dairy in Maryland.

“That piece will help bring to life our dairy farmers’ commitment to sustainably producing nutritious food,” said O’Brien. An estimated 2.5 million viewers will see the spot, and it will be supplemented with “live-streaming” on two other network stations where farmers will be interviewed to “tell their story.”

“That piece is supported by a 30-second video drawing footage from many farms and will run this week to the end of the month in streaming venues,” said O’Brien. She also explained that DMI has been working extensively with MilkPEP (fluid milk processors promotion) and that MilkPEP’s ‘Love what’s real’ ads are on television right now during the COVID period (when everyone is at home). The ads review the essential role of dairy farmers, and others involved in the dairy supply chain, she said.

“We co-brand these ads using the Undeniably Dairy logo, and design ways to help them reach consumers with these interests,” said O’Brien. “That’s our runway into June Dairy Month.”

While Gallagher said he expected to have some data insights from Inmar Analytics as early as next week, he added that it will begin a process to use technology to interact with consumers to learn more of the why’s behind their choices so that DMI — and its partners — can “appeal” to those drivers.

Stay tuned.

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Dairy farmers prompt Franklin County, Pa. Milk Drop

Over 2000 families blessed with 3600 gallons of whole milk

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Zach Meyers (center), Franklin County Farm Bureau president among the volunteers ready with gallons of whole milk and half gallons of whole chocolate milk

By Sherry Bunting, Farmshine, May 15, 2020

CHAMBERSBURG, Pa. — “Watching Franklin County help Franklin County is the best way I can summarize this. Seeing the community come together was a blessing to witness,” says Lucy Leese who helped organize the 3600-gallon Milk Drop at Franklin Feed and Supply, Chambersburg, Pa. on Saturday, May 2. Leese is the office manager for the Franklin County Farm Bureau, and she works part-time on a local dairy farm.

The idea came from dairy farmers in the county seeing other such events in Lancaster and Tioga counties. Franklin County Farm Bureau president Zach Meyers, an area feed nutritionist, was contacted about it by one of his dairy clients.

“They knew Farm Bureau could reach more people to make this work, so we helped organize it,” says Meyers. “But the farmers get the credit. They made most of the donations. With this event, they basically sent a personal message to the entire community — that dairy farmers love you and care for you.”

May 1st dawned sunny, and people were itching to get out. They came in droves for the Milk Drop, some even breaking out their restored cars for the lineup.

Organizers say some people came because of true need in these hard times, others simply to show support for the dairy industry, and others just wanting something to do — to take a drive and be part of something. Whatever the reason or season – sunshine or rain – these Whole Milk Donation Drops, Drive-throughs, Challenges, call them what you will, are really catching on and spreading all over.

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Lucy Leese works for a local dairy farm and as office manager for Franklin County Farm Bureau. Along with the whole milk, they gave out goodie bags with dairy facts, recipe and coloring books from county dairy promotion. Photos submitted

From idea to event, a whirlwind eight days transpired. Leese communicated with county Farm Bureau members and others by email and social media about the plan, and she quickly saw the high level of community interest through donation pledges as well as people expressing interest in coming out.

“We also reached out to others who have done this. Mike Sensenig (New Holland) had a lot of insight and gave us some things to think about ahead of time,” she said.

“Our biggest thought was that we wanted to be sure to use Pennsylvania milk, so we worked with Harrisburg Dairies,” Meyers relates in a Farmshine interview. “Most of the dairy farmers here are already producing milk at a significant income loss, and yet they still gave money to buy milk for the Milk Drop.”

According to Meyers, the vast majority of funds were donated by dairy farmers and supportive agribusinesses. A few donations also came from individuals and businesses with no connection.

“We wanted it to be whole milk,” said Meyers. “What is better than giving a gallon of whole milk and a half gallon of whole chocolate milk and having our community actually taste something good?”

Over 2000 vehicles, in about a five-hour time frame, snaked through the Franklin Feed property off Rte 11 into four lines on either side of two Harrisburg Dairies trucks with 30 volunteers handing out milk and a goodie bag with a dairy fact sheet, recipe book and coloring pad courtesy of Franklin County dairy promotion.

The size of the event exceeded early expectations. They initially had money pledged for 500 gallons on Sat., April 25. By Monday evening, when they had their video chat to organize the event, they had funds to buy more than 2000 gallons. By Wednesday, April 29, three days before the event, they had pledges and paypal funds for seven times the original amount and confirmed their final count with Harrisburg Dairies for Saturday morning.

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Pretty cool to see 15 tons of milk come in on three box trucks. Harrisburg Dairies sent employees to man the lifts and keep the milk moving to the distribution tables between four lines of cars. 

“It was pretty cool to see 15 tons of milk come in on three box trucks,” says Leese. “Harrisburg Dairies sent their own guys to man the lifts and keep the milk moving to the distribution tables.”

The community was eager. “We had cars coming in at 7:45 a.m. right behind the trucks, so we started letting them through at 9 instead of 10,” says Leese, describing the initial rush of cars that gave way to a steady flow into the early afternoon.

In the end, Shippensburg Food Pantry sent a refrigerated truck for the 150 gallons that were left at 2:15. Earlier in the day, folks from a nursing home in Waynesboro had come through for 40 gallons. “They said they weren’t able to get whole milk, and their folks needed milk,” Leese reports.

Hearing the emotion in Leese’s voice as she described the experience in a Farmshine phone interview, it’s obvious that an event like this truly touches the givers and the receivers.

“Several times people asked for additional milk for their neighbors or grandparents. We said from the beginning all are welcome, no questions asked, because we are all in a tough situation right now,” Leese explains.

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Two teams of volunteers kept milk moving from three trucks. Throughout the 5 hours, area dairy producers took shifts. For them, it was personal, to show love for their community.

“It was encouraging for us as volunteers to be able to serve and give back to the community here at a time that we have felt helpless for so many weeks. This was an opportunity to be active and to serve,” she adds. “The folks coming through were just so grateful with words of thanks and blessings, and if they could, they gave money to pay forward for other Milk Drops.”

The way the lines flowed into Franklin Feed from Rte 11 gave the event a special touch for homebound families getting out. Wide-eyed children looked around at the sights of grain bins and feed equipment and then the milk trucks as they lined up between them.

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Over 2000 vehicles, in the space of five hours, filed off route 11 in Chambersburg, snaking around the grain bins at Franklin Feed and Supply before breaking into four lines on each side of two Harrisburg Dairies trucks.

“People actually thanked us for the tour,” Leese said. “We needed to move quickly so the line wouldn’t back up to route 11, so we had four lines, and the volunteers came in shifts.”

While the Franklin County Farm Bureau is not planning another, others in the community are talking about more milk drops.

“As people are seeing and recognizing the need and the positive response, the idea is really taking off,” Leese observes, adding that they’ve been contacted by their peers in Centre County wanting to do one. Also, Harrisburg Dairies has been involved in other events like this, but this was likely their largest one-day, one-location event.

“We learned that people will give whatever they can to support something like this,” she says.

Leese’s advice for others includes: Overplan your volunteers, have popup tents for shade, wear gloves and masks.

“When you are standing there giving something to people, you can still smile with your eyes and be pleasant — even wearing a mask,” says Leese.

“People have been missing interactions, so we wanted to be cheery and welcoming, and people noticed. It helps raise everyone’s spirits,” she reflects.

Leese is grateful to the dairy farmers who had the idea, the many volunteers, and to Franklin Feed and Supply for providing the accommodations and being so helpful.

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Ron Wenger, county Farm Bureau vice president, directed traffic into four lines to keep traffic from backing up onto rte. 11.

She says Farm Bureau first vice-president Ron Wenger, a dairy farmer from Pleasant Hall, was instrumental in figuring out the traffic patterns to make sure they had things flowing well.

“Coming from a farm background, working for a farm and the Farm Bureau, I know what farmers are going through, what they are facing, and it’s not pretty. Yet a portion of the donations came directly from dairy farmers, and they were out here to share and to give and to protect people. To see the community respond in such a positive way to this outpouring from the dairy farmers was gratifying.

“People understood that they were getting something good for them from farmers who care for them, so we got some kind of understanding happening here,” she observes.

“Now the question is how to hold on to that, and make it flourish.”

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‘Forgotten Farms’ will be remembered in NYC

Over 100 food-thinkers and influencers attend Forgotten Farms film premier in New York City, bring questions and perspectives

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Lorraine Lewandrowski (left) and Forgotten Farms film creator Sarah Gardner (second from right) take questions from attendees after the premier showing at Project Farm House in Manhattan on March 9. Photo CADE / Zachary Schulman

By Sherry Bunting, Farmshine, May 8, 2020

MANHATTAN, N.Y. — While new farmers are celebrated by food-thinkers and thought-influencers, there’s another farmer mostly left out of the local food celebration. Traditional dairy farmers are underestimated and seen as declining, when in fact, they remain the backbone of rural communities and are integral to a renewal of regional food systems — their farms have served urban neighbors in some cases for a century.

Yet these essential farms have been essentially forgotten by the food movement as they fight for survival…

On March 9, they were remembered and celebrated thoughtfully during a premier showing of the acclaimed Forgotten Farms film in New York City. A group of upstate dairy farmers hosted the occasion. The documentary shows the cultural divide between the new food movement and traditional farming. It can be streamed at http://www.forgottenfarms.org or by purchasing a DVD.

After months of work and years of time invested in building relationships with food-thinkers in the metropolitan area, Herkimer County, N.Y. dairy producer and attorney Lorraine Lewandrowski — working closely with the Center For Agricultural Development and Entrepreneurship (CADE) — secured a beautiful Manhattan venue at Project Farmhouse to show the documentary film.

Lewandrowski is @NYFarmer on Twitter with near 33,000 followers and has tweeted nearly a quarter of a million times over the past decade spanning everything from issues of the day to simple photos of a day on the farm.

Always looking for ways to connect dairy farmers with food-interested people, Lewandrowski and other dairy producers tag-teamed as hosts for the Forgotten Farms film premier in Manhattan on March 9 and had a booth at the International Restaurant Show at the Javits Center on March 10.

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Photo CADE / Zachary Schulman

For many of the 100 food-thinkers, food-writers, and food-influencers attending the film, it was their last congregating event before New York City began safe-at-home policies as the novel Coronavirus pandemic hit the region a few days after. In the throws of the pandemic’s impact on global and national food supply chains, the Forgotten Farms documentary brings a timely message — looking into the past and ahead at a vision for a future regional food system.

“This event was made possible by (CADE) in Oneonta, New York and event coordinator, Lauren Melodia of Brooklyn,” writes Lewandrowski in an email interview with Farmshine recently. “We had seating for 100 New York City food-thinkers, influencers, writers and students. In just over an hour, the film told the stories of Northeast dairy farmers. Actual dairy farmers, some of them ‘real unique characters,’ were the stars of this award winning film created by Sarah Gardner and David Simonds.”

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Sarah Gardner and David Simonds (Photo S.Bunting)

Gardner was also present to join Lewandrowski on a panel taking questions from attendees as they enjoyed the beautiful cinematography while learning about a few central themes: The challenges of farming, milk pricing, history of farm communities, abundant natural resources of the Northeast and the feeling in dairy farm communities that dairy farmers were forgotten by the popular urban food movement.

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Photo capture from Forgotten Farms preview trailer

“The event was also a ‘deep listening’ session for us as farmers while attendees expressed their ideas, asked questions of us and gave us information from their perspectives,” Lewandrowski reflects. She notes that for the group of New York farmers the opportunity to really hear what is on the minds of city food-thinkers is essential to bridge the gaps and communicate about the future of food systems and dairy farming.

All the more telling in the eight weeks of COVID-19 impact to the national and global food supply chain, were the regional themes of the Forgotten Farms film showing the wealth of resources tended by farmers within a short drive of New York City.

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Dr. Keith Ayoob tells the audience his concerns about public belief that imitations are ‘equivalent’ to dairy milk. Photo CADE / Zachary Schulman

“A young coffee bar owner asked what she should say to the increasing number of consumers who ask for oat ‘milk.’ A pediatric nutritionist, Dr. Keith Ayoob, told the audience his concerns about public belief that imitations are ‘equivalent’ to dairy milk,” Lewandrowski relates. “Dr. Ayoob brought copies of a letter he had written in the March 7, 2020 New York Daily News rebutting Brooklyn Borough President, Eric Adams, who has called for ‘plant based’ milks and for dairy farmers to transition out of producing milk.”

Attendees asked the farmers if they knew which New York City officials are interested in regional food and who they should support politically.

Lewandrowski described these encounters:

One consumer asked how to respond to fellow environmentalists who disparage dairy milk while urging almond beverages as better for the environment.

A group of food studies students told how the film inspired them to question food “shockumentaries” they have seen in their programs and to seek trustworthy sources of information.

“Each of these questions and comments gave us ideas on other projects we as farmers can do during future trips into the City,” writes Lewandrowski.

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Photo capture from Forgotten Farms preview trailer

“A high point of our Project Farmhouse event was the support shown for the Cobleskill Dairy Judging team by attendees, most of whom have never touched a cow,” she notes. “Our announcement that the students from SUNY Cobleskill had placed first in the nation in junior college dairy judging was met with a big round of applause. We sold raffle tickets for a gift basket of New York food products to benefit these students, and the atendees gave generously to support the dairy students that they saw as their “home team.”

In speaking with guests after the film, Lewandrowski reports they were invited to do more showings in Queens, Brooklyn, Manhattan and Westchester County.

“We also met New York City food policy leaders and some of the people who have quietly worked behind the scenes as the ‘guardian angels’ of the farmers and NYC food security,” she writes. “It is the work of these unsung people that has built an extensive network of farmers markets in NYC and who are now connecting with more rural dairy farmers who sell into commodity networks.

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Photo CADE / Zachary Schulman

“Now is the time that the work of these people will be recognized and respected as city planners think about regional food in the years following the Coronavirus impact,” she adds. “Young urban supporters of farmers showed us the seaport area of southern Manhattan and invited us to return to host a NYC Dairy Festival. They urged that the public would love to see and sample cheeses, ice creams, and other products of our rich dairy region. How could such an event be accomplished?”

On the following day, Jacob Javits Center hosted the combined International Restaurant Show, the Natural Foods Show and the Coffee Festival. The dairy presence was very thin, while imitation “milks” had several booths, Lewandrowski reported. CADE organized a booth for dairy farmers where they proudly handed out fresh whole milk bottled by Clark Farm in Delhi, New York.

“Although the dairy and beef checkoffs were absent, we were happy to see booths from Belgioioso Cheese and Tillamook Creamery, both of whom drew enthusiastic cheese sampling,” Lewandrowski explains. “The Government of Quebec had multiple booths showcasing their dairy, cheeses, beef, bison and specialty lamb. Irish beef also had a presence, catering to specialty marketing in New York City.”

To be continued