U.S. milk production falls 1% in May, FMMOs pool 13% less milk

Posted on June 29, 2020 by Agmoos

OtherUsePooledMilk_Table_I(withMay2020) (1)

Table 1 showing “other use / milk dumpage” totals by Federal Order includes data for May 2020. The month of May saw 13% less milk pooled on Federal Orders compared with a year ago, and 13% less milk in the “other use / dumpage” category compared with a year ago — down dramatically from the enormous 350 million pounds of “other use” milk pooled in April 2020.

States east of Mississippi cut production, west mainly grow

By Sherry Bunting, Farmshine, June 26, 2020

WASHINGTON, D.C. — As April’s dismal Covid-impacted dairy market spilled into May milk checks, the supply-side of the ship turned in May at the same time as demand was strengthened by dairy donations, retail demand and food-service re-stocking.

USDA Dairy Market News reports each week have signaled progressively tighter milk supplies heading into summer vs. stable to strong demand pushing spot loads to sell above class price in some areas.

In April, cooperatives across the country set base limits on member milk production for May until further notice. Some severely discounted any milk provided that was above 80 to 90% of a member farm’s March marketings. Many producers chose to leave this penalty milk out of the tank.

As these co-op ‘base’ programs went into effect in May, the impact is demonstrated in the USDA May Milk Production report, estimating U.S. output at 18.8 billion pounds, which is 1.1% below year ago for May.

Cow numbers were down 11,000 compared with April, according to USDA, but still 37,000 more milk cows were estimated on farms compared with a year ago.

Nationally, milk output per cow dropped by one pound/cow/day in May compared with a year ago, the report stated.

In addition, Federal Order milk pooling totals and “other use / dumpage” data provided to Farmshine by USDA AMS by request, showed the total volume of milk pooled across all Federal Orders in May dropped like a rock to levels 13% below year ago.

Similarly, the volume pooled as “other use / dumpage” across all Federal Orders fell to levels 13% below year ago nationwide — from the enormous 350 million pounds recorded in April to 36 million pounds in May. (See Table 1.)

What is eyebrow-raising is how the numbers in these reports geographically arrange themselves.

In last Thursday’s Monthly Milk Production Report, the national drop in total output for May masks the fact that among the 24 top milk producing states listed individually in the report, those east of the Mississippi accounted for all of the production decline – plus balancing the accelerated western growth to get the U.S. total a significant 1% below year ago.

States east of the Mississippi saw large decreases in production, while in contrast, the growth states of Texas, Colorado, Idaho, Kansas, Arizona, South Dakota saw increases in production ranging from 1.4 to 9.7% above year ago.

East of the Mississippi, the Northeast milkshed really clamped down on production with Pennsylvania 3% below year ago, New York down 3.7%, and Vermont down 6.4% vs. year ago in May.

Further south, Virginia and Florida were unchanged from a year ago, while Georgia’s production fell 1.4%.

In the Mideast and Midwest, Michigan was off a fraction (0.4%), Minnesota down 1.9% and Wisconsin’s production fell by 3.1% vs. year ago. Indiana, Illinois and Iowa were down 1.7 to 2%. Ohio was the outlier, gaining 0.4% in production over year ago.

In the West, May production was larger than a year ago with South Dakota leading on a percentage basis producing a whopping 9.7% more milk compared with a year ago. Number five Texas grew by 1.9%. Number three Idaho grew by 4.6%, and Colorado grew by 4.8%. Arizona grew by 1.4%, and Kansas by 2.4%.

Three western states were key outliers as California dropped production 1.5% below year ago, Utah was down 3%, and New Mexico fell a whopping 7.2% below year ago. The Pacific Northwest had generally steady production with Oregon unchanged from a year ago and Washington down fractionally.

In Federal Order pooling, the volume pooled nationwide was down a whopping 13% from 15.1 billion pounds in May of 2019 to 13.2 billion pounds this May of 2020.

In the Northeast, total pooled pounds on Federal Order One for April and May of 2020 were essentially equal at 2.3 billion pounds each, but relative to year ago, this was a decline of 1.7% while production on farms in the region fell a whopping 4%, collectively. The difference likely came from elsewhere.

Meanwhile, the amount pooled as “other use / dumpage” in the Northeast Order One dropped abruptly from the enormous 131 million pounds in April to 12.3 million pounds in May, representing a 35% drop in “other use / dumpage” compared with a year ago.

Pooled milk classified as “other use / dumpage” in the Appalachian, Florida and Southeast Orders 5, 6 and 7, also dropped significantly in May compared with April’s large records. In fact “other use” milk in those three Orders fell to levels that were 19% (Appalachian), 9% (Florida) and 32% (Southeast) below year ago. At the same time, total pooled pounds for these three Orders – 5, 6 and 7 – were calculate below year ago in May by 1% in Order 5 (Appalachian), 2.5% less in Order 6 (Florida) and a significant drop of 11.7% less milk pooled compared with a year ago in Order 7 (Southeast).

In a sense, the pull back in production in the Northeast, Mid-Atlantic and Southeast regions, where April’s dumping had been so extreme, helped bring down total pooled pounds in those areas to rein-in the “other use” pounds as well.

Growth areas of the nation showed significantly less “other use / dumpage” pounds in May vs. April. However, in some of the Orders, such as the Southwest (Order 126) and Upper Midwest (Order 30), the “other use / dumpage” category was still above year ago levels by a modest margin, according to the USDA AMS figures.

As the dairy industry right-sizes itself after COVID-19 supply-disruptions that abruptly cut 30 to 40% from producer milk checks, it remains to be seen how states east of the Mississippi can regain their footing as western growth areas kept shipping more milk right on through — without missing a beat.

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Industry, government follow grassroots donations lead, CFAP adds to dairy demand driving markets higher

Posted on June 29, 2020 by Agmoos

By Sherry Bunting, Farmshine, June 26, 2020

WASHINGTON, D.C. – Government and industry dairy donations and record-setting CME cheese prices all got their starter fuel from grassroots dairy producers in what has become one of the good news stories of the COVID-19 era.

Today, USDA has systemized the donating through the Coronavirus Food Assistance Program (CFAP), and dairy processors, cooperatives and checkoff organizations have partnered with food banks and non-profits to extend the reach of efforts begun originally by generous dairy producers and their agribusiness partners supplying grateful consumers.

In April, when milk dumping was at its height, and stores had purchase-limits or sparse supplies of milk and dairy products, farmers and their agribusiness partners and communities went into immediate action. Examples of milk donation drive-through events began popping up in succession – just a fraction of them featured in the pages of Farmshine.

Also in April, farmer-funded Dairy Pricing Association (DPA) purchased 228,000 pounds of block cheddar, immediately moving the CME block cheese price from its $1/lb plummet to $1.20 (adding $1.00 to Class III milk values at the same time).

This DPA move, working with charities for distribution and a Midwest processor to turn their CME-style bulk purchase into consumer-packaged goods for donation, gave a green light to other cheese market participants. Within a week of that purchase and the initial 20-cent gain in blocks that followed, block cheese continued its climb to $1.80/lb, and the upward momentum has not stopped — fueled now by huge government purchases and food-service pipeline re-stocking.

On the heels of these grassroots efforts, dairy checkoff organizations began getting involved to work with their partners and “convene” the industry to do big donations in May.

Meanwhile, the U.S. Congress had passed the Coronavirus Food Assistance Program (CFAP) in April, with $3 billion of the $19 billion set aside for the Farmers to Families Food box purchases. But it was mid-May before USDA announced those first-round contract awards totaling $1.2 billion in fresh food — $317 million of it for fluid milk and dairy products – for distribution May 15 through June 30.

This week, USDA Secretary Sonny Perdue called the food box program a “trifecta, win-win-win”, pointing out how the program is getting farmers, processors and non-profits together to directly provide fresh food to people without burdening food banks with refrigerated inventory they aren’t prepared to handle.

In April, when block cheddar was plummeting to $1.00/lb, the farmer-funded Dairy Pricing Association based in Wisconsin with member-contributors nationwide, purchased 228,000 pounds of block cheese to be cut-down for distribution by several charities. DPA Facebook photo

This was the model of grassroots groups and individuals on their own dime and time doing dairy donation drive-throughs, milk-drops, and whole milk gallon challenges from late March to the present. It was also the model of DPA, funded by voluntary dairy farmer milk check deductions, when DPA purchased the block cheese in April for cut-down and donation. Also in April, we saw the partnership initiated in Pennsylvania between 97 Milk and Blessings of Hope. They raised funds to buy local milk for donation to families in need.

As these grassroots efforts began having an impact, Midwest Dairy got approval from USDA in May to use checkoff funds to donate cheese, and UDIA of Michigan was allowed to provide minimal funding to food banks for “handling costs” associated with receiving cheese donated in May by DFA.

Now, with USDA systemizing that smart approach — started by grassroots efforts — the department stated in a news release that as of June 23, its CFAP Farmers to Families Food Box Program had delivered more than 20 million boxes of fresh food, including milk and dairy products, to families impacted by COVID-19.

The initial round of USDA CFAP contracts ends on June 30. But this week, USDA announced it will extend “well-performing” first-round contracts for similar amounts in a second-round from July 1 through August 31 to total an additional $1.16 billion.

The share of this second-round to be devoted to fluid milk and dairy purchases was not specified in the USDA announcement. One thing USDA did note is that even though most of the second-round dollars will be spent with “selected” current contract awardees, a few new contracts may be awarded to previous applicants that had been passed over due to technical errors or to provide boxes in areas identified as “underserved.”

Throughout the USDA CFAP food box delivery process, regional dairy checkoff organizations have been involved as “facilitators.”

Week after week, Farmshine has received press releases from dairy checkoff organizations, and there have been numerous social media posts, about the CFAP milk and dairy box donations. Regional checkoff organizations say they are working with processors, cooperatives and non-profits — in conjunction with the USDA CFAP food box program — and that area dairy farmers are involved as volunteers to hand out the boxes.

According to National Dairy Council president Barb O’Brien, dairy checkoff organizations began “convening the industry” before CFAP.

“We have leveraged the checkoff’s unique ability to convene companies from across the value chain to identify a number of ways to redistribute excess milk and other dairy products to families facing food insecurity,” writes O’Brien in an email response to Farmshine recently.

In a specific cheese example she had mentioned in a media call described as block cheese being purchased and cut into consumer size portions, our inquiry for details was met with this response:

“In response to lost food-service markets and dairy farmers being asked to dispose of milk, we’ve worked to connect coops to partners that donated processing capacity for any excess milk available for food banks,” O’Brien wrote. “Many other dairy companies — such as the example I gave from DFA of cheese donations in Michigan — provided massive quantities of dairy products to food banks before the USDA Farmers to Families Food Box Program was even put into place. Moving forward, it will be important that we continue working together as an industry to target the greatest needs and find long-term solutions to our nation’s hunger crisis.”

O’Brien cites DMI’s “long-time partner” Feeding America and other relationships with local food banks and pantries. Former Ag Secretary Tom Vilsack, now a top dairy checkoff executive with DMI, sits on the Feeding America board of directors.

O’Brien also noted in her response that dairy checkoff “counseled industry partners and others on how to direct dairy products toward the greatest needs.”

She reports that, “This widescale approach enabled us to pinpoint some of the biggest barriers in getting excess dairy products to hungry families during the pandemic” and to “rapidly initiate an industry response.”

As communities began doing their own grassroots efforts through the generosity of dairy farmers, agribusiness and individuals purchasing milk or contributing milk for dairy donations in the early days of the COVID-19 ‘stay-at-home’ orders, checkoff organizations took note and began to look at what they could do in terms of refrigeration equipment and setting up refrigeration trucks for industry and governmental efforts.

Grassroots whole milk donation events like this one just outside of Lancaster, Pa. in May, have been providing whole nutrition to families across the state and region since the height of COVID-19 ‘stay-at-home’ orders in April. Photo by Michelle Kunjappu

While many of the grassroots-organized milk donations were comprised of whole milk purchases vs. low-fat milk, this week marked the first time a checkoff news release showed red-cap whole milk gallons or even referenced whole milk in their facilitation of USDA CFAP box deliveries. This is another win led by early grassroots efforts.

ADA Northeast (ADANE), for example, indicated in a press release this week that 200,000 gallons of milk will have been handed out in the Northeast / Mid-Atlantic region by the time June Dairy Month ends. The release stated that 20,000 gallons would be donated this week, alone, from DFA, Upstate Niagara and Schneider’s Dairy to be given out in New York and Pennsylvania through the Nourish New York state funds and CFAP food box federal funds.

For the first time among the many news releases sent by ADA Northeast (ADANE) touting checkoff ‘facilitation’ of fluid milk and dairy donations, whole milk is in the box! Here, dairy farmer Joel Riehlman of Fabius, N.Y., and a 4-H member, hand out whole milk in mid-June at a Nourish New York and USDA CFAP Farmers to Families Food Box donation drop in Syracuse. Photo provided by ADANE

In a recent Watertown, New York drop point for these donations, ADANE board member Peggy Murray of Murcrest Farm, Copenhagen, N.Y. volunteered, and she noted in the ADANE press release that, “It was heartwarming to see their gratitude – especially for the whole milk — and to know that people really want the products that we produce on the farm.”

This has been the experience of so many farmers and ag community members involved in the grassroots distributions, as well as the industry and governmental distributions, because each event affirms that consumers love milk and dairy products, especially whole milk, and that they want to support local farms — as evidenced by their comments and long car-lines of families eager to receive these products. In some cases, recipients gave money asking it be put toward more drive-through dairy events.

In the Southeast and Midwest, CFAP contract recipients Borden and Prairie Farms have also been visible this month with Dairy Alliance and Midwest Dairy checkoff organizations often as partners, along with several state dairy producer group members joining in as volunteers and location coordinators.

Overall, the CFAP food boxes have been well-received. The program was designed by USDA to give farmers and food providers a presence within their communities, working with local food banks and non-profits without creating inventory hardships. In this way, USDA has taken what local communities were doing at the grassroots level — on their own dime and time — and systemized it with federal funds and contracts.

While dairy’s share has not been specified in USDA’s announcement of the second round of $1.16 billion in fresh food purchases in the contract extensions through August 31, it is believed fluid milk and dairy purchases will be similar to the first-round total of $317 million because several non-profits indicate they will be supplied with all their milk and dairy needs through the USDA until at least August 31.

This includes Blessings of Hope, which had partnered with 97 Milk in April, and raised over $50,000 for purchasing and/or processing local milk for families they serve in Pennsylvania.

Farms in southeast and southcentral Pennsylvania that were wanting to donate “over-base” milk for this 97 Milk / Blessings of Hope program will have to wait until after August 31, when the USDA CFAP food box program is set to end. It is possible that the CFAP program may again be extended until all $3 billion in food box funds are exhausted.

When Dairy Pricing Association (DPA) first ran an ad in the Cheese Reporter in early April looking for 200,000 pounds of USDA-graded cheddar cheese less than 30 days of age, the calls they received could not fill the order. By requesting USDA-graded cheese, the delay in their eventual purchase of 228,000 pounds showed a void in supplies that led to the initial turnaround in the plummeting block cheese price on the CME, which fueled the advances in manufacturing milk value. CME cheese prices drive Class III milk futures, which have risen rapidly since the DPA purchase bridged the gap in April. Current market strength has been extended through the large USDA food box program demand occurring at the same time as the re-opening of the food-service sector. DPA Facebook image

A positive outcome for farmers from all of these efforts — now extended by these large government purchases — is the real impact they are having in helping drive dairy markets higher since that first farmer-funded DPA purchase of block cheddar in April turned the CME away from its $1.00/lb record-low plummet.

Block cheese is traded every day around noon on the CME spot auction, and the price has set several new record-highs in June, including the most recent record-highs of $2.70/lb on Monday, June 22 and $2.81/lb on Tuesday, June 23.

This rally has pushed Class III milk futures into new contract highs for June, July, and August, while adding strength across the board.

In CME futures trading Monday (June 22) the June Class III milk contract hit $21, up $9 from the USDA-announced May Class III price of $12.14. July’s contract topped at $22.19, and August edged into the $20s. Monday’s Class III milk futures averaged $17.98 for the next 12 months, and Tuesday’s futures trading held most of that level, even adding to the July contract.

There is a supply side to this scenario also. See the related article on USDA milk statistics, pooling, production and dumping.

Trade sentiment is mixed on how long the upward momentum in dairy markets can last.

On the one hand, cheese prices are being driven by the combination of USDA CFAP purchases now continuing through August, re-stocking of food-service pipelines as the country re-opens, and the USDA Dairy Market News reports of consumer buying strength shown in strong pizza sales throughout the Covid period, and stable to strong retail sales meeting tighter supplies of milk and cream.

On the other hand, some experts warn of weakness ahead as these record-setting prices may prompt milk production expansion by fall when demand may wane after the USDA CFAP food box purchases end and food-service pipelines are re-stocked.

Much of the future will depend on how the re-opening of America goes for families, the food-service sector, schools, sports, and the economy at-large.

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Dietary Guidelines catastrophe not understood by most

Posted on June 29, 2020 by Agmoos

— Get involved by sending or phoning a comment to YOUR members of Congress and the Secretaries of Agriculture (USDA) and Health and Human Services (HHS) at this link https://www.nutritioncoalition.us/take-action/

By Sherry Bunting, Farmshine, June 26, 2020

WASHINGTON, D.C. — After months of warning about flaws in the 2020 Dietary Guidelines Advisory Committee process, the June 17th final meeting of the 2020 Dietary Guidelines Advisory Committee (DGAC) unveiled their draft recommendations, which will become their official report at the end of this month for submission to USDA and HHS. That’s when their work will be turned into the official 2020-25 Dietary Guidelines in mid-July for public comment and implementation.

However, the DGAC process and flaws exposed in the weeks leading up to their final meeting — as well as during the final meeting itself — are prompting outrage and actionby various groups and citizens, but little media attention.

On the very same day, a separate panel of scientists published their state-of-the art review “Saturated Fats and Health: A Reassessment and Proposal for Food-based Recommendations” in the Journal of the American College of Cardiology. (Not to mention 20 review papers cited by the Nutrition Coalition.)

So far, media coverage of that has also been scant. Understandably, mainstream media are busy these days with pandemic and protests. But they also don’t seem to understand that these are not just “recommendations.” These Guidelines increasingly control the most vulnerable citizens in our county — children and families in need. The DGAC readily admits that its approved food patterns do NOT come close to meeting the nutrient needs. This shortcoming includes nutrients of concern identified by physicians.

Perhaps more disappointing is the lack of attention the farm and food media have given this whole deal. Where are their voices?

As emails are sent to USDA Secretary Sonny Perdue and HHS Secretary Alex Azar to delay the progress of the final DGAC report due to a number of unsettling factors, form letter “we are committed” responses are what is received.

First and foremost, the DGAC did not follow the Congressional mandate to include the most recent studies on questions about saturated fats. In fact the Committee did not include any key pieces of research conducted prior to 2010 and after 2016.

With cherry-picked studies, their recommendations keep government agencies in place as anti-fat overlords, even recommending reductions in allowable saturated fats as a percentage of calories from 10% (official recommendation) down to 7 or 8% (the committee’s preference) and pushing this agenda onto children under two years of age that up until now could still drink whole milk and eat the animal products that provide the nutrients the government-favored diets do not provide.

Second, the DGAC was found by a Corporate Accountability study to be “subject to undue industry influence that can jeopardize the health of all Americans — especially Black, Indigenous, people of color both during a pandemic and the mounting diet-related disease crisis.”

The corporate accountability brief makes the case that, “It’s time public health policies were set by independent public health professionals, not food and beverage corporations.”

Third, one or more members of the 2020 DGAC have anonymously blown the whistle on the process as being rushed, and lacking scientific rigor. And over 300 doctors and medical professionals have written to urge a delay to investigate these claims.

Fourth, the National Academy of Sciences, Engineering and Medicine has called for a redesign of the process, citing flaws in the criteria for screening research for consideration.

Fifth, the recommendations in a separate panel’s scientific review published in the Journal of the American College of Cardiology demonstrate that important food interactions have been ignored as well as the different biologic effects of saturated fatty acids in whole foods vs. processed foods.

Throughout the DGAC final meeting last Wednesday, the committee could not determine what foods were included and excluded in their own references to red meat, lean meat, and processed meat in different subcommittee reports and research findings. Ditto for milk (was it whole or lowfat?) and for enriched / refined grains and carbohydrates.

While the DGAC said it wanted people to focus on foods, not formulas, the report solidifies a continuation, or lowering of the current saturated fat “formula” applied to institutional feeding such as schools and daycares as well as foodservice menu-boarding.

In short, despite the fact that several foods that are relatively rich in saturated fatty acids — such as whole milk, full-fat dairy, dark chocolate and unprocessed meat — remain on the “avoid” list for the 2020-25 DGAC report, the separate panel of scientists point out the mounting evidence to the contrary — that these foods are not associated with increased cardiovascular disease or diabetes risk.

“There is no robust evidence that current population-wide arbitrary upper limits on saturated fat consumption in the US will prevent cardiovascular disease or reduce mortality,” the JACC paper states.

Quite simply, the DGAC did not follow its Congressional mandate, was not selected to include independent experts open to revisiting these long-held beliefs, and did not include important timely research to answer some of the most important questions.

At one point in last Wednesday’s meeting, it was obvious that some on the committee were frustrated by the inability of the approved diets to provide essential nutrients the medical community lists as nutrients of concern. And at one point, a mention of nutrient-dense foods containing saturated fats had one member of the unbalanced DGAC saturated fat subcommittee alluding to “new foods that are coming” as though a magic wand will fix these issues.

There it is. Without the saturated fat restrictions, and now reintroduction of cholesterol caps, how will billionaire investors in Impossible Meats, Beyond Meat, Perfect Day fake dairy proteins. and the like. get their products off the ground?

There are only two ways these silicon valley food technology investors will get a return on their investments: That is to use the anti-fat Dietary Guidelines and so-called “sustainability” benchmarks to reduce dairy and livestock production and consumption to make way for their fake food.

— Additional information: According to the Nutrition Coalition, the JACC paper comes after the group of scientists attended a workshop, “Saturated Fats: A Food or Nutrient Approach?” in February. Members of that workshop wrote a consensus statement, submitted two formal public comments to USDA, and sent a letter to the Secretaries of U.S. Departments of Agriculture and Health and Human Services (USDA-HHS) on their findings which concluded that limits on saturated fats are not justified and should be re-examined. The USDA-HHS have not yet replied to their letter.

— Get involved by sending or phoning a comment to YOUR members of Congress and the Secretaries of Agriculture (USDA) and Health and Human Services (HHS) at this link https://www.nutritioncoalition.us/take-action/

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Eye on markets as reined-in supply vs. strong demand drive dairy higher

Posted on June 23, 2020 by Agmoos

By Sherry Bunting

Trade sentiment is mixed on how long the upward momentum in dairy markets can last as producers wait for these higher levels to land in their milk checks.

On one hand, USDA Dairy Market News reports strong pizza sales, stable to strong retail sales, and government purchases all stoking demand against reined-in supply. On the other hand, some analysts see weakness ahead as higher prices may prompt milk expansion by fall when demand may wane after CFAP food box purchases end and food-service pipelines are re-stocked. Much will depend on how the economic re-opening goes for families and food-service, as well as what happens with schools and sports. Experts suggest producers evaluate their risk management tools while markets present positive margins in a tumultuous time.

To-date, the USDA Coronavirus Food Assistance Program (CFAP) Farmers to Families Food Box Program has delivered 18.5 million boxes. The first round of May 15-June 30 fresh food purchases totaled $1.2 billion, including $317 million for milk and dairy products. Now USDA is poised to announce a second round of $1.16 billion for July 15-Aug. 30, of which dairy’s share has not yet been specified.

Also, as of June 22, USDA paid $895 million in CFAP dairy farm payments, and a total of 15,222 dairy producers (about half) have applied. The dairy payment formula equates to $6.20 per hundredweight on Q1 milk (including dumped milk). CFAP enrollment continues through August 28, 2020.

Meanwhile, milk futures continued their multi-week march higher on the heels of record-setting CME block-cheese prices through June, pegged at $2.70/lb Monday, June 22 and then $2.81/lb Tues., June 23. Barrels shared the advance, but were a record 44-cent spread behind the block trade at $2.37/lb.

June’s Class III milk contract hit $21 Monday, up $9 from the USDA-announced May Class III price of $12.14. July’s contract topped at $22.19, and August edged into the $20s. Monday’s Class III milk futures averaged $17.98 for the next 12 months — up 69 cents from two weeks ago.

Part of the extent of Monday’s advance is attributed to new rules when higher trading surpasses the 75-cent limit, as happened Friday, the limit doubles for the next trading day, allowing more speculative activity up or down. But Monday’s spot cheese increase shored-up the gains, while after-hours trading hinted a 20-cent pull-back before another spot cheese market gain Tuesday noon narrowed the dip in fall milk futures. At mid-day Tuesday, summer 2020 front-months were another potential nickel or dime in the green, and penny to nickel gains were applied to 2021 Class III contracts.

Screenshot of June-Sept. Class III milk futures trading at Noon CDT Tuesday, June 23 — just after the spot cheese auction on the CME in Chicago saw 40-lb block cheddar trade at yet another record high of $2.81/lb with 500-lb barrels also higher at $2.36/lb — behind blocks by a new record-setting 45-cent spread.

New block cheese futures at the CME were launched in 2020, helping processors manage the risk of the wide spreads between 40-lb block and 500-lb barrel cheddar that broke records in 2019, setting new record spreads again this week.

Class IV milk futures gains into this week have been less stellar as butter had melted off a previous advance, but firmed up late last week, then pegged a 2-penny loss at $1.81/lb Tuesday. Spot powder strengthened last week in active trade after the biweekly Global Dairy Trade auction index rose 1.9%. The first two days this week, the Grade A nonfat dry milk spot price remained pegged at $1.03/lb with just two loads changing hands on the CME.

The awaited June 22 USDA Cold Storage report confirmed that accumulating cheese moved to food-service with a seasonally-unusual and record-large natural cheese inventory pull-out for the month of May. Despite this inventory pull, cheese stocks remain 5% above year ago, and butter stocks are up 21% vs. year ago. Inventory is apparently not as negative to markets as it was pre-Covid due to the retail shortages experienced in April during the height of ‘stay-at-home’ orders. Some companies report wanting to keep more inventory instead of operating ‘hand-to-mouth.’

On the farm side, USDA confirmed 1.1% less milk was produced in May vs. year ago. USDA data also showed 13% less milk was pooled on Federal Orders vs. year ago — abruptly reducing the pooling of dumped and diverted milk. At 36 million pounds, the volume of milk pooled as “other use / dumpage” in May was a fraction of April’s 350 million pounds of “other use / dumpage” milk pooled.

Northeast bore brunt of huge milk dumping in April

Posted on June 20, 2020 by Agmoos

USDA data: 350 million pounds dumped, diverted nationwide. Over one-third of it pooled on Northeast Federal Order. May data show improvement

By Sherry Bunting, Farmshine, June 19, 2020

BROWNSTOWN, Pa. – The picture for May has improved as “other use” milk totals pooled across all Federal Orders came back in line, and total “all use” pooled volume also receded.

But… Remember April? The figures are in, and they are ugly.

April was the month where the COVID-19 shutdown was at its height. Everyone was bracing to flatten the curve. Retail dairy case shelves were often empty or sparse, and many stores had two-item limits on milk, butter, even cheese, yogurt and sour cream.

The milk dumping that had begun during the last weekend of March ramped up in April. By the time final milk checks were received for April milk, producers were dismayed to find big deductions, almost $2 per hundredweight in some cases, as COVID-19 line items on top of additional marketing adjustments, reduced quality premiums, and the like. Of course, hauling was also a bigger deduction, some being told they were charged destination hauling on dumped milk that never left the farm! This, despite the fact that fuel prices fell like milk due in part to COVID.

What do the USDA data tell us?

According to “other use” milk pooling data supplied by USDA AMS Dairy Programs by request, milk pounds pooled at minimum class as “other use, milk dumpage and animal feed” for all Federal Orders totaled almost 350 million pounds in April (349.9 million pounds to be exact). That was 2.57% of the total pounds of milk pooled across all Federal Orders in April, according to USDA AMS data, and it was 1.8% of total U.S. April milk production (pooled or unpooled) as reported by USDA in its Monthly Milk Production Report.

Year-to-date milk dumpage and diversion by Federal Order and total combined — as well as for 2018 and 2019 — are shown graphically in Table 1.

While March saw the milk volume classified as “other use” grow by 142% compared with year ago at 71.3 million pounds. The volume of diverted milk in this “other use” category for April 2020 was absolutely enormous at 349.9 million pounds – up 960% from a year ago.

In fact, the Northeast Milk Marketing Area, Federal Order One, as usual, was dumping-zone-central as more than one-third (37.4%) of all the milk pooled as “other use” in the U.S. showed up in the Northeast pool as minimum class “other use.”

In other words, 37.4% of diverted milk in the entire U.S. was dumped on farms or at plants or otherwise diverted as “other use” including animal feed in the Northeast Milk Marketing Area.

The Northeast Order pooled 131 million pounds of “other use” milk in April – up more than 1000% from the 11.3 million pounds of “other use” milk in April 2019 and the 13.6 million pounds in April 2018. Table 1 shows this enormous amount dwarfing other months, other years and other Orders quite plainly as highlighted in yellow.

This means that the Northeast Order pooled 4.4 million pounds, or 80 loads, of dumped or diverted milk every single day for 30 days in April.

The second largest pooling of “other use” milk was the Southwest Order 126 at 44.4 million pounds, up 1200 percent from 3.4 million pounds a year ago (April 2019) and 3.6 million pounds in April of 2018.

Third largest was the Upper Midwest Order 30, with 38.3 million pounds of “other use” milk pooled, up 1855% from the 1.95 million pounds a year ago (April 2019) and 1.84 million pounds in April of 2018.

Fourth largest was the Florida Order 6, with 31 million pounds of “other use” milk pooled, up 1520% compared with 1.2 million pounds a year ago (April 2019) and 1.5 million pounds in April of 2018.

The Mideast Order 33 came in fifth with 24 million pounds of “other use” milk pooled, up 860% from 2.5 million pounds a year ago (April 2019) and up 460% from the 4.28 million pounds in April of 2018.

USDA AMS confirms that milk purchased by USDA for feeding programs, including the extra Section 32 purchases and new Farmers to Families Food Box milk purchases are included in receipts and utilization as the class of product purchased. This means when fluid milk is purchased with these government funds and then donated to families in need, the fluid milk is to be reported as Class I.

This is also true of milk purchases by businesses, individuals and fundraisers that then use these purchases as donations to families in need or the public at large. These sales also contribute to Class I utilization.

However, when milk destined for dumping or over-base milk kept aside is processed and packaged and donated outside of these marketing channels, it can be considered “other use”.

The equally disappointing news in April was that despite the fact that retail sales data show packaged milk sales to be running about 5% ahead of year ago for April and May, the USDA Class I utilization total for April across all Federal Orders was fell by 9.7% in April compared with March to 3.6 million pounds compared with 4.0 million pounds of milk utilized as Class I in March across all Federal Order pool data. This is down 3.3% from Class I utilization pounds, nationwide, a year ago.

As noted, the milk dumping situation in May improved compared with March and April as “other use” milk totals pooled across all Federal Orders came back in line, and were actually down 13% from a year ago at 36 million pounds – roughly 10% of what was discarded the month prior in April. Total “all use” pooled volume also receded as cooperative base programs kicked in. Government purchases for the CFAP Farmers to Families Food Box Program also began pulling milk the second half of May and will continue through June.

However, keep in mind, the cooperative base programs do cause some milk dumping of non-pooled pounds on farms that choose to only ship what they are paid a price for. Some are feeding cows and other livestock with extra milk. Others are finding local processors to bottle it so they can do community whole milk donations. Some may even be fertilizing fields with extra milk.

It isn’t easy for many to cut by 10 to 20% from March production in May – as many have been asked to do to avoid salvage value and stiff penalties for the “extra”.

Seasonal style dairies especially have their work cut out for them, and it appears the true seasonal dairies with little or no milk production in the first quarter of the year won’t be eligible for CFAP payments as 6 months of payment calculations are being based on production for the first 3 months of the year.

To be continued in next week’s Farmshine with May data on total pooled pounds, Class utilization trends, “other use” data, and other information for the month as well as year-to-date for all FMMOs and individually.

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One-sided bias evident as DGAC edges fat ‘caps’ lower, even our toddlers aren’t safe

Posted on June 18, 2020 by Agmoos

Over 500 pages, 250,000 reports screened-out, nutrient deficiencies ignored, and now toddler food patterns included

By Sherry Bunting, Farmshine, June 19, 2020 edition

WASHINGTON, D.C. — The big news from the final Dietary Guidelines Advisory Committee (DGAC) meeting in which they presented their 500-plus page report Wednesday, June 17, is that the current saturated fat caps — at less than 10% of calories — will stand. But at the same time, the saturated fat subcommittee detailed its true recommendations, pegging saturated fat levels to be at 7 to 8% of calories, and these charts are the ones that will likely be forced on schools and daycares and nursing homes and military diets. (More detail on this to come.)

After 7 hours of subcomittee presentations, in an online virtual format, covering all facets of the 2020-25 DGAC ‘expert’ report, it was hard to choose which of the many eyebrow-raising moments was most concerning. In fact, DGAC comments were at times actually humorous, if this was not such a serious matter.

Perhaps it was the moment when the subcommittee handling the saturated fat questions decided to go backwards from 2015. Not only are they edging the saturated fat caps lower in their forward-looking recommendations, they want to bring cholesterol caps back into the mix. That’s right folks, we’re going back to cholesterol caps “because humans have no need for dietary cholesterol,” they declared matter of factly.

That’s the mentality. No need for cholesterol, which is essential for every single cell in the body and especially important in hormone synthesis, not to mention brain function. But, then again, the DGAC never was happy about giving up those cholesterol caps in 2015, especially since the anti-animal agenda of noted DGAC vegetarian leanings have found they need more than saturated fat caps to hang their hats on — especially since the 2020 DGAC included toddler food patterns in their report for the first time.

That discussion was also perplexing. No less than a full hour was spent going through every diet formulation the subcommittee could conjure up in order to get toddler food patterns closer to a “healthy vegetarian diet”, the one of three currently government-approved dietary patterns favored by the DGAC, now being recommended for children UNDER 2 years of age.

Each combination of foods they walked through (because the new way of presenting these patterns is to have actual foods listed to avoid) had them facing a big dilemma. Within the amount of calories a toddler will consume, there was no way to deliver the nutrients they need for life without more animal protein foods. In each case, the toddler patterns did not provide all the essential nutrients needed for brain development, growth, and health.

Iron was just one of them. When it was pointed out by one DGAC member that animal protein delivers absorbable iron — critical for toddlers — unlike a handy-dandy supplement pill, vegan-leaning Linda Van Horn from the saturated fat committee chimed in with a bizarre comment. She said it was not a concern because research she couldn’t put her fingers on at that moment suggests vegetarian adults have the ability to absorb more iron from supplements and other foods, so, she said, “kids of vegetarian parents could have this ‘accelerated absorption’ capability from their parents.”

Inherited vegetarian genetics? Eye-roll.

Another committee member politely suggested that, yes, there is research showing vegetarians absorb more iron from supplements and other food sources “because they are deficient in iron in the first place.”

DGAC says healthy vegetarian pattern for toddlers is good to go even though it doesn’t meet their needs for essential nutrients for life. No solution was given by DGAC for this problem. Sadly, in fact, children in schools and daycares were referenced as a group that can “adhere” to the diets due to government p.

Unfazed, the committee ignored any attempt at logic on the many questions of these diets missing quite a few “nutrients of concern.” They simply moved on… next slide.

Throughout the discussions of dietary patterns, saturated fat caps, and such, the “nutrients of concern” not being met in the food patterns — mainly fat soluble vitamins like D and A found naturally and more absorbable in whole milk vs. fat free and low fat dairy, for example — they just kept moving on in their direction away from animal foods, comforted by their cherry-picked research. It wasn’t just vitamins D and A and iron, but also iodine, choline, B12 (in adults), potassium, and more. Throughout the daylong presentations, this problem with nutrients not being met kept cropping up for each “life stage” the DGAC was addressing. What was new this time was the addition of food patterns for pregnant and lactating women and children from birth to 24 months of age.

In a more detailed look at the report next week, a few ‘good news’ points for dairy as a food category can be shared, but this underlying avoidance of saturated fat put all things dairy squarely in the fat-free and low-fat zone, and the new and stricter recommendations for added sugars and beverage calories were another concern for children and the dairy sector. Yep, you guessed it. Coke and Pepsico will be happy as their high fructose corn syrup mixed with artificial sweetener concoctions will be looked upon favorably vs. nutrient-dense chocolate milk. (More on that next week.)

Other mentally exhausting moments occurred when subcommittees made recommendations based on limited evidence, or conversely, graded evidence as strong when it was based purely on observational studies. When these concerns were brought up, the answer was to point at the work of the 2015 DGAC that considered “so many more studies” and that the DGAC had decided at the outset to “build on the 2015 report” — more or less picking up where they left off — when it came to the question of dietary fats.

That was the ‘magic wand’ applied throughout the day.

In fact, as Nina Teicholz, author of Big Fat Surprise and founder of the Nutrition Coalition, pointed out in her blow-by-blow twitter feed throughout the day, the movement to subtly edge saturated fat caps lower happened on the very day that a major new review was published on saturated fats to the contrary. The authors of that report — unconsidered by the DGAC of course — included the chair and another member of the former 2005 DGAC.

“Their findings are quite opposite of those by the current one-sided 2020 DGAC,” wrote Teicholz.

Another eyebrow-raising moment came when the committee debated how to “harmonize” the food listings on their charts taken from studies where they had different meanings or included different foods.

Dairy was one example. Whole milk bad, fat-free good, and yet ‘milk’ as an entity showed up with so many positive influences in combined research charts (including cardiovascular disease, all cause mortality, obesity, type 2 diabetes, immune status and more). But the committee didn’t know which milk was in the study, and that distinction is important!

Similarly, they lumped red meat and processed meat together on one chart (the negatives), and then on another chart showing positives, they listed ‘lean meat’ but said they didn’t know if that category included lean red meat or just poultry and fish — even though the same chart had separated poultry and fish into their own categories!

It all seemed like nonsense the DGAC should have taken time to figure out before rushing their report to print.

Even though a letter signed by nearly 300 doctors and medical professionals, letters from dietician groups, letters from members of Congress and others had requested a delay, the DGAC was in a hurry to do the June 17 presentation. In fact, when registering to participate in the presentation online, a note was sent back stating that “this is only a draft and it will have a comment period.”

Trouble is, the expert report is now out, and it’s going to be difficult to put that jack back in the box with a 30-day or 60-day comment period after USDA and HHS formalize it — because so much science was excluded from the beginning. A do-over with a new committee is needed.

This committee took time Wednesday to explain the litany of poor reasons why favorable fat studies were excluded from their cadre. The federal staff that screened for each subcommittee went through a total of 270,000 reports and whittled it down to 1500 on all pertinent questions for this DGAC cycle. That is a story in itself because rigorous evidence was ignored in favor of “associated” studies.

Another concerning moment came early in the day’s presentations when committee members talked about promoting federal diet-tracking, biomarkers and monitoring. Americans will love that kind of intrusion. And in the course of the behavioral recommendations they made, the schoolchildren were their go-to for such monitoring. A captive group of guinea pigs!

But perhaps it was the concluding remarks Wednesday evening at 7:30 p.m. as the daylong meeting came to a close that really stood out. Chairwoman Barbara Schneeman, Ph.D. talked about the enormous task the DGAC had completed over the past 15 months. She said the committee would put its report in final form over the next two weeks, present it to USDA and HHS by the end of June and then USDA and HHS would “formulate it” into recommendations that can be posted for public comment by July 15 and they would be a done deal for implementation by the end of 2020 for the next five years.

Schneeman also went on to talk about how the government nutrition programs needed to be working on how to get more Americans “adhering to these diets”, with emphasis on restricting fat, added sugars and salt while still maintaining positive energy balance and meeting nutrient needs even though the DGAC had not even the slightest answer for the dilemma of meeting nutritient targets with these patterns and recommendations, especially for children.

The clincher. Schneeman pointed out how the COVID-19 pandemic shows just how much the current state of chronic dietary-related diseases put certain populations in the most vulnerable position for infectious diseases like Coronavirus.

But that’s okay, the reason we have an obesity and diabetes epidemic as well as other chronic conditions is because, she said “Americans have never followed our dietary guidelines.”

Begging to differ with their federal statistics, the record is clear that per-capita consumption has declined among the foods DGAC set out over the years to have Americans increasingly avoid. These chronic conditions have worsened with each 5-year cycle moving us further in the fat-free and low-fat direction. So much so, that many of us don’t even realize how we are impacted, and especially how our children are impacted. Now, even the toddlers won’t be safe.

Get involved by sending or phoning a comment to YOUR members of Congress and the Secretaries of Agriculture (USDA) and Health and Human Services (HHS) at this link https://www.nutritioncoalition.us/take-action/

Look for more details in part two.

Past articles on this blog about the DGAC process are listed below

Dietary Guidelines Committee must be stopped…

Call to action: Feds ignore science on saturated fats…

Dairy advisory committee formed…

There is a war to win for our farmers and our children…

Nutrition politics: Kids and cattle caught in crossfire…

Milk industry transformer, ex-Dean CEO Engles leads team winning bid for Borden

Posted on June 17, 2020 by Agmoos

‘New Dairy’ announced as winning bidder for all assets June 15. UPDATE: Sale hearing rescheduled a second time, now set for June 23 at 11 a.m. EDT in Delaware Bankruptcy Court. Milk cooperative SMI files post-auction objection, noting several irregularities with the auction process that had gone private in final days. SMI asserts that their bid on the Winterhaven, Florida plant was not appropriately considered, that they were ignored in the “behind the scenes” negotiations between Borden (debtor) and several other bidders, and that potentially other bidders were also left out of the process due to an alleged lack of transparency and lack of contract and other information needed to formulate appropriate bids.

Borden milk plants throughout the Southeast, mid-South as far north as Ohio are important for dairy producers like these pictured at the London, Kentucky plant chugging the delicious Borden dutch process chocolate milk during a July 2015 Kentucky Young Producers tour sponsored by KDDC. File photo by Sherry Bunting

By Sherry Bunting, Farmshine, June 19, 2020 edition

WILMINGTON, Del. — A team led by Gregg Engles — the transformative ex-CEO of what was modern-day Dean Foods — is poised to gain control of Borden Dairy Company, which includes six of the 11 plants the DOJ required Engles’ Suiza / Dean merger to divest in 2001 to then DFA-led National Dairy.

Pending bankruptcy court approval, the Borden Dairy Company and its iconic mascot Elsie will be purchased by New Dairy OpCo, LLC. The company referred to as “New Dairy” in court documents was formed June 1 by KKR & Co., a major creditor in the Borden bankruptcy joining forces with Capitol Peak Partners, a firm founded by Engles and his partner Ed Fugger, a former executive with Engles in the 2012 Dean spin off WhiteWave.

Borden named New Dairy as the successful bidder in bankruptcy court documents filed Monday afternoon, June 15.

A sale hearing is rescheduled for Thursday, June 19 (now rescheduled to June 23) in the U.S. Bankruptcy Court of Delaware with Judge Christopher Sontchi presiding.

The price to acquire Borden was not disclosed, but creditor KKR offered its sizable debt in the purchase of the assets, according to court documents.

The assets include Borden’s 12 plants in nine states from Ohio through the deep South and Southeast, 91 branches and other assets, as well as the Borden mascot Elsie.

Named by Borden as next-high bidder was GH Acquisitions and Prairie Farms Dairy. On May 1, Prairie Farms, the Illinois-based cooperative marketing products in 14 states, had successfully purchased eight former Dean Foods plants as part of the Southern Foods Group bankruptcy in Houston.

Sources indicate that if the Borden sale to New Dairy is approved by the bankruptcy court Friday, Gregg Engles is the likely new chairman.

Engles, a 1980s Dallas-based ice company consolidator has been referred to as “the great consolidator” turned “milkman to the nation.” He has been credited in various writings with the transformation and consolidation of the fluid milk business, a process that began when he and his partners purchased Suiza Dairy in San Juan, Puerto Rico in the early 1990s.

Engles built Suiza up to over 60 plants by methodically buying the leading plant in a region and those around it to streamline at a time when Wal-Mart and other companies were consolidating the retail grocery sector.

In 2001, Dallas-based Suiza was the largest milk company acquiring the number two Chicago-based Dean Foods. The merged companies operated under the Dean Foods name, and when Howard Dean retired in 2002, Engles became chairman and CEO of the new empire, including the Silk plant-based beverages Engles purchased shares of in 2001 and Dean wholly owned and began expanding in 2002.

The 2001 Suiza / Dean merger, incidentally, led the Department of Justice (DOJ) to require divestiture of about 10% of the two companies’ combined 100-plus milk plant holdings. The 11 identified plants were purchased by National Dairy Holdings, an investor group led by Dairy Farmers of America (DFA), which had 50% ownership at the time it acquired the Dean-divested plants.

By 2009, DFA had over 87% ownership of National Dairy LLC, which had grown to 18 plants with Borden, Dairy Fresh, Flav-O-Rich, Meyer Dairy, Dairymens, Velda Farms and Coburg Dairy brands, and that year sold to Mexico’s largest processor Grupo Lala.

In 2016, Lala spun off National Dairy as Borden Dairy in its new U.S. division through acquisition of Laguna Dairy. In 2017, the Borden Dairy Company transferred to its major investor and current owner ACON Investments.

Six of the 11 plants from the 2001 Dean / Suiza divestiture (two in Florida, one in Kentucky, one in Ohio, one in South Carolina and one in Alabama) are a core of present-day Borden’s 12 plants. National Dairy is also listed as one of the associated legal entities that together comprise the Borden Dairy Company Chapter 11 bankruptcy reorganization filed Jan. 5, 2020 in Wilmington, Delaware.

Both Dean Foods and Borden Dairy Company (National Dairy) have been headquartered in Dallas, Texas since 2001-02.

Capitol Peak Partners 30-Year Track Record

Source capitalpeakpartners.com

According to Capitol Peak’s website, where a colorful and complex graphic depicts 30 years of Engles’ experience in dairy industry acquisitions, mergers, capital structure, category expansions and spin offs, Engles not only consolidated the fluid milk industry, but also was instrumental in expanding organic and plant-based brands. These were combined and spun off as standalone WhiteWave in 2012 with Dean retaining a majority interest.

That’s the point in time when Engles left Dean Foods to be chairman and CEO of WhiteWave, which he later sold to Danone for $12.5 billion in 2017 — the year Engles, who sits on the Danone board today, founded Capitol Peak, the entity that has now teamed up with KKR to buy Borden.

At the time of his departure from Dean Foods in 2012, a New York Times article revealed Engles earned as much as $156 million across the post-merger 2002-12 decade with Dean.

Engles’ tenure with Dean Foods also saw the filing of both the Southeast and Northeast class-action Antitrust Lawsuits that alleged anti-competitive behavior between then Dean CEO Engles and then DFA CEO Gary Hanman. Plaintiff dairy farmers alleged the anti-competitive market behavior caused economic losses and structural change that restricted market access as DFA followed a parallel course, building its national cooperative business in a similar regional merge-acquire-streamline fashion as Dean did with milk plants and companies.

According to biographies about Engles, small family-owned dairy companies were attracted to sell to Dean Foods where some could continue to operate with access to capital and technologies. The same has been said by smaller regional milk cooperative members over the years, where a merger with DFA was attractive due to promises of facility upgrades. Not always did those promises come true, and often those markets were swallowed and absorbed.

Both antitrust cases were eventually settled separately by defendants Dean Foods and DFA / DMS. However, a civil case brought in 2016 by farmers who requested exemption from the Northeast “class” is currently headed to jury trial in Vermont vs. defendant DFA / DMS.

The other half of the Borden buying equation — KKR — has a history with the Borden name.

According to Borden’s website and elsewhere, KKR (Kohlberg Krvais Robers), a global investment firm headquartered in New York, had purchased the original Borden Inc. in 1995 for $2 billion and sold off the varied conglomerate in pieces by the time the landmark Suiza / Dean merger occurred in 2001.

Borden as a brand, and Elsie the cow, no longer autonomous, were still popular but faded from the spotlight. DFA began using the brand for cheese, and in 2009, came out with Borden Essentials, including a “Kid-Builders” cheese line. DFA still uses the Borden brand for cheese today.

As noted, the present-day Borden fluid milk and cream business that is being sold in bankruptcy, traces its current business genesis to the April 2001 formation of National Dairy — the group of investors led by DFA to purchase Crowley and Kemps (Marigold), and later that year (November) the 11 plants divested from the Dean / Suiza merger to satisfy the DOJ.

In 2004, HP Hood acquired Kemps and Crowley from National Dairy (with Hood later trading Kemps back to DFA). Other mergers, acquisitions and spin offs as mentioned above eventually left six of the 11 Dean-divested plants among the core of what is now the Borden Dairy Company.

Borden’s current CEO Tony Sarsam, who took the helm in March 2018, was vocal a year ago in a Food Dive article about the company’s renewed direction to refresh Borden’s branding, bring research and marketing to innovation in the fluid milk sector with a commitment to traditional dairy.

Over the past year, Borden come out with new messaging, reintroduced its mascot Elsie to the public with a modern day twist, and launched new products like the “Kid-Builders” line of 2% fat, no sugar added, flavored milks in attractive individual serving chugs for children as well as new whole milk flavors inspired by the Texas State Fair.

In fact, when Borden filed for Chapter 11 bankruptcy protection in January, the company stated in press releases its intention to come out of the restructure stronger. At one point in the concurrent Dean Foods bankruptcy sale, investors and creditors even looked at ways to have Borden buy Dean. A sale of Borden was not on the radar.

Most in the industry could see the handwriting on the wall for Dean Foods as the large national commodity model had been dealt a stiff blow by Wal-Mart on the one hand, consumers seeking ‘local’ regional brands on the other hand and intrusion by non-dairy alternatives reducing volume to some degree in the background.

But Borden’s bankruptcy filing in January caught many by surprise, as did the sale and auction announcement filed with the court May 5, just four days after the Dean sale was consummated primarily to DFA.

In April, Borden had applied for milk contracts through the USDA Coronavirus Food Assistance Program (CFAP), and on May 12, USDA awarded Borden the lion’s share of the contracts — to the tune of $147 million – to distribute milk through the CFAP Farmers to Families Food Box Program May 15 through June 30.

Even so, on May 22, Borden’s auction procedures were announced. The auction closed June 13, with New Dairy announced June 15 as successful bidder, pending bankruptcy approval.

There are no reports at this juncture of any missed payments to Borden direct dairy producers. Several small claims have been filed on the bankruptcy docket by DFA for Borden milk testing at DFA-owned laboratories, and substantial claims have been filed from milk transport companies, including those like NDH Transport that are now part of the overall Borden Dairy Company bankruptcy restructure.

As for federal order pool payments, USDA AMS indicated this week that they will be filing proofs of claim by the July 3 deadline for monies due the Producer Settlement Funds and other FMMO and Dairy Research and Promotion-related accounts, but the amounts were not disclosed. Substantial claims have been filed for these payments in the separate Dean Foods bankruptcy.

Borden’s 12 milk plants are located in Dothan, Alabama; Decatur, Georgia; Miami and Winter Haven, Florida; London, Kentucky; Lafayette, Louisiana; Hattiesburg, Missouri; Cleveland, Ohio; North Charleston, South Carolina; and Austin, Dallas and Conroe, Texas. They are predominantly fluid milk plants, also making cream, condensed and cultured dairy products.

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‘Good for me, good for the planet?’ GENYOUth drives ‘future of food’ to make future ‘Greta Thunbergs’ of our kids

Posted on June 15, 2020 by Agmoos

By Sherry Bunting, Farmshine, May 29, 2020

BROWNSTOWN, Pa. — Two checkoff-funded vehicles are refining the “U.S. Dairy” machine. They are GENYOUth and the FARM program under the Innovation Center for U.S. Dairy (“U.S. Dairy” for short), with a board representing food supply chain stakeholders and NGO’s like World Wildlife Fund.

It has been 12 years since the formation of these checkoff-funded organizations and programs under the umbrella of DMI (Dairy Management Inc).

How many times have we heard that consumers are driving FARM program requirements? Are they?

How many times have we heard that today’s young people – Generation Z – are agents for change, that they are socially and environmentally attentive in their food choices, that they are concerned about the impact of agriculture on climate and the environment? Are they?

The next wave for FARM will be environmental requirements to fulfill a new “sustainability” platform from U.S. Dairy’s Sustainability Alliance.

And the next frontier for GENYOUth is to use our nation’s schoolchildren and the climate change conversation as leverage for an emerging industry vision for the “future of food.”

In fact, it looks like they want to make future ‘Greta Thunbergs’ out of our school kids. (Thunberg is the teenage vegan anti-animal climate change activist from Sweden who was recognized as person of the year.)

: According to a checkoff-funded survey of 13 to 18 year olds via GENYOUth and Edelman Insights, 56% of teenagers said they have heard of the idea of “sustainable foods” or never really thought about the idea of “sustainable foods” and in saying so, also checked the box that they want to know more. The “want to know more” is what GENYOUth is hanging its hat on to drive new education and influence shifts from food choices that taste good and contribute to personal health to food choices that demonstrate the ‘good for me, good for the planet’ mantra — a self-fulfilling prophecy of food and dairy system transformation DMI food partners want children to lead. — Source GENYOUth Insights Spring 2020

GENYOUth’s tagline is “Exercise your influence,” and in the Spring 2020 edition of GENYOUth Insights — the organization’s newsletter to schools and “partners” — the main article under the headline “Youth and the future of food” connects the dots.

GENYOUth used funding from DMI and Midwest Dairy, under the guidance of Edelman Intelligence, to do a survey of teenagers about their food choices.

There are 30 primary companies set on transforming the food system through the Food Reform for Sustainability and Health (FReSH) initiative that is now linked to the EAT Lancet ‘planetary health diets’. Many of these companies are moving into plant-based and lab-cultured alternatives for animal protein. — Source EATforum.org

Known for its “purpose-driven marketing,” Edelman is the global communications that receives $15 to $17 million a year in checkoff funds from DMI for contract services. Richard Edelman, himself, is a key member of the GENYOUth board of directors. Many of the global companies getting involved in the EAT Forums, such as PepsiCo and Danone, are Edelman clients. Edelman also ‘loaned’ personnel to work with the EAT foundation from Sweden that launched the now infamous EAT Lancet report, and EAT FReSH (Food Reform for Sustainability and Health) Forums last year preaching “planetary boundary diets” that represent huge reductions in consumption of meat, milk and dairy products.

The minds of children are the next frontier. In fact, this is something Edelman identified in that pivotal year of change for DMI. That year, 2008, Edelman launched its “Edelman Food and Nutrition Advisory Panel” staffed by “globally known food and nutrition experts,” who “provide strategic counsel to the firm’s food and nutrition staff in the areas of obesity, food ethics, food policy, functional foods, health claims and nutrition communications,” according to the Holmes Report.

Among those Edelman panel members were past Dietary Guidelines Advisory Committee members as well as a later appointee to the 2015 Dietary Guidelines Advisory Committee.

Fast forward to 2020, the recent GENYOUth newsletter article states in large bold type that, “What youth know, care about and do might make or break the future for healthy, sustainable food and food systems… The future of sustainability – which includes the future of food and food systems – will benefit from youth leadership and voice.”

The GENYOUth Insights article identifies the problem as revealed by the Edelman-guided checkoff-funded survey: “Youth are twice as likely to think about the (personal) healthfulness of their food over its environmental impact,” and the GENYOUth newsletter bemoans this finding needing action because “teens aren’t thinking too much about the connection between food and the health of the planet.”

The GENYOUth / Edelman survey (left) of teens 13 to 18 shows pretty much the same trends as the International Food Information Council (IFIC) 2019 Food and Health Survey (right) of 18 to 80 year olds. Environmental impact is just not the food-purchase driver that global food companies want it to be in order to complete their transformation of global food systems. — Sources GENYOUth Insights Spring 2020 and IFIC 2019 Food and Health Survey at foodinsights.org

Specifically, 65% of youth surveyed said they regularly think about how healthy or nutritious their food is, but only 33% regularly think about whether the food they eat has an impact on the environment.

In fact, when it came to actual food and beverage choices, a whopping 91% of teens said they think about taste, followed by cost (76%), followed by how personally healthy it is (76%). Whether or not the food is produced in an “environmentally friendly” manner was far behind at 60%. (Teens did say “package recycling” ranked high on their list of considerations.)

What’s wrong with teenagers choosing foods and beverages based on taste, cost and personal health? From this reporter’s perspective, those are logical choice factors for maturing young people. Incidentally, those are criteria that bode well for milk and dairy products.

But GENYOUth and friends want to guide teens to make food and beverage choices based on real or perceived “impact on environment.” This opens the door for partnering food companies to do “social purpose-driven marketing” and for organizations like WWF to further influence them.

This would seem to fall in line with the direction of the next round of Dietary Guidelines, which in 2010 became tied more closely to institutional feeding in schools and daycares through USDA administrative rules and the Healthy Hunger-Free Kids Act.

For the 2020 Guidelines, the Committee has ignored good research on saturated fat that was screened out of the process by USDA, and they released a draft report this week that further reduces the recommended level of saturated fat in the diets of children over age 2 and adults.

Back in the last cycle of Dietary Guidelines (2015), the committee attempted to use anti-cattle “sustainability” and “planetary health” as criteria in meal pattern recommendations. At the time, the “sustainability” requirement was directed toward reducing beef (cattle) consumption. The dairy industry was silent, while other animal protein sectors became vocal. One thing to remember is that whatever happens to beef will eventually happen to dairy because cattle are most definitely in the “planetary” crosshairs of anti-animal activists.

The “sustainability” language and framework were ultimately removed from the 2015-2020 Dietary Guidelines, but fat is still the tool.

Back to the Spring 2020 GENYOUth Insights article, a new tagline has been coined: “good for me, good for the planet.”

The walk down the slippery slope begins. GENYOUth and friends, including USDA, want today’s teens to place more decision-making emphasis on the impact of food on the environment. In the Insights article, GENYOUth points out to its partnering companies and schools that kids don’t care enough about the environmental impact of the food they choose to eat.

This is where FARM requirements and checkoff promotion are headed – toward social purpose-driven marketing as defined by the various supply chain partners that have people on these checkoff-influencing boards. The plan is to indoctrinate schoolchildren on sustainable food choices, then adapt what farms have to do to meet new consumer-driven criteria.

Yes, GENYOUth spent 12 years bringing big business into the schools through its non-profit foundation status. During that time, USDA, mainly 2010-2016 under Secretary Vilsack, has tightened the way Dietary Guidelines are tied to school food, NFL has marketed football through FUTP60 (while receiving $5 to $7 million annually from DMI), the NFL’s longstanding beverage partner PepsiCo received the 2018 GENYOUth Vanguard award and has created one of the largest K-12 foodservice companies in the U.S. Meanwhile, the dairy farmers – who started it all and fund the majority of GENYOUth through DMI – are stuck promoting fat-free and 1% milk , fat free yogurt and fat free cheese.

As reported recently in Farmshine, the partnership with DMI also gave Domino’s access to a whole new $63 million a year business making Dietary-Guidelines-correct cheese pizza for schools.

Through GENYOUth, America’s young people are being “led” into their ordained role as “agents of change” to lead the “future of food.”

The GENYOUth Insights article focuses on two examples of climate activism – holding them up as examples of how young people can and should be energized.

First, they reference the recently released report “A Future for the World’s Children?” produced by the World Health Organization (WHO), UNICEF and The Lancet. Think of this as the youth-version of the now infamous 2019 EAT Lancet report where new “planetary boundary” diets, depleted of animal protein, are recommended for human and planetary “health.”

We’ll call this report “EAT Lancet Junior”, and in GENYOUth’s own description, this report “reinforces the importance of placing children at the heart of United Nations Sustainable Development Goals.”

DMI has been actively working to incorporate these U.N. SDGs into “U.S. Dairy’s” sustainability framework and Net Zero emissions benchmark. This work also began over a decade ago when the Innovation Center for U.S. Dairy was formed and GENYOUth was founded and the FARM program was under initial development.

Lead the children through confirmation bias, get them to become energized activists, respond with a “U.S. Dairy” plan that aligns with that activism, and implement it through the FARM program – further refining who can and can’t be part of “U.S. Dairy” in the future.

Microsoft PowerPoint - Mike McCloskey.pptx

Under “Non-governmental organizations”, the NGO on this flowchart for U.S. Dairy is World Wildlife Fund (WWF). Brent Loken is WWF’s lead scientist today. Previously, Brent worked for EAT, the science-based global platform for food system transformation. He was a lead author on the EAT-Lancet report on Food, Planet, Health and is currently working on the roadmaps for how nations will meet GHG goals through changes in food and agriculture. — Sources farmfoundation.org and worldwildlife.org

DMI knows full well that not all farms will be able to meet the criteria that are coming. In fact, according to a news release from PDPW covering the virtual presentation by Dr. Mike McCloskey, a key member of the U.S. Dairy Sustainability Council, acknowledged this fact.

Meanwhile, GENYOUth quotes from the “EAT Lancet Junior” report, asserting that, “Sustainability is for and about the next generation… We must find better ways to amplify children’s voices and skills for the planet’s healthy future.”

In its Edelman Intelligence survey of teenagers, GENYOUth reveals what it calls the “surprising disconnects and opportunities for stakeholders throughout the food ecosystem to do more to help ensure youth can lead, act and choose wisely in today’s food environment.”

When it comes to this idea of ‘food that is good for me, good for the planet,’ teens said they currently rely on their families for most of this information and that they trust farmers for information.

But GENYOUth would like to move schools and food companies into this knowledge building arena – using farmers to ‘tell the story’ and teaching kids how to make ‘good for me, good for the planet’ food and beverage choices.

GENYOUth makes the case in its newsletter that now is the time to move toward ‘good for me, good for the planet’ food choice training of youth, which they say “aligns with a growing interest and sense of urgency among the food industry, farmers and others about the future of food and sustainability.”

So far this plan seems like one in which dairy farmers are helping steer the conversation and future choices, right?

Until we read deeper.

“How can the food industry and farmers become helpful and effective messengers around sustainable nutrition information to support youth?” And “How can schools play a bigger role?” These are two questions GENYOUth asks in its spring newsletter.

The answers, according to GENYOUth, are to see schools and food-related sectors become supporters that engage and inform young people about what foods and beverages are ‘good for me, good for the planet.’

Bottom line? The path to the future of food is one that moves the next generation away from prioritizing personal health, cost and flavor to put more emphasis on the importance of how food impacts communities, animals and the planet. DMI executive and former Ag Secretary Tom Vilsack said as much to the Senate Ag Committee a year ago when he asked Congress to help fund the pilot programs on farms that will get dairy where they believe it needs to be.

It’s not hard to understand why DMI is so slow to want to “educate” consumers about dairy products from a nutrition or comfort-food standpoint and why it is putting its checkoff bets on “sustainability” and “animal care.” Promotion of nutrition puts all dairy farmers on a level playing field. Promotion and implementation of sustainability requirements is a method for refining the U.S. Dairy machine.

GENYOUth says it wants young people to tackle the tradeoffs between health and environment and between taste and environment. They want schools and food companies to reinforce the concept that, “We all must take part in helping to sustain a fragile planet.”

We already see this beginning in our schools. A recent Scholastic Weekly Reader made headlines on social media when fake hamburger was touted as “the meat that could save the planet.” We see it in the vested plans of multi-national companies that are moving toward these products and marketing.

But it was the next part of the GENYOUth spring newsletter that was really shocking. Being held up as the example of youth leadership was Greta Thunberg, the teenage vegan anti-animal climate activist from Sweden, the country from which the EAT Lancet report on new planetary diets originated in 2019.

Don’t forget, the EAT Forum has the backing and participation of most of the top multi-national food companies including the top dairy product companies, as well as NGOs like WWF, and the dairy checkoff’s PR firm Edelman.

According to the GENYOUth newsletter: “We all must take part in helping to sustain a fragile planet. The astonishing power of aware, engaged, passionate youth is being brought home to us daily. As a remarkable example, look no further than Swedish teenager Greta Thunberg as the face of the climate-change movement.

“Aware, informed and engaged youth can be a powerful force for the movement toward food that’s ‘good for me and good for the planet,’” the GENYOUth newsletter continues.

Yes, alongside dairy farmer mandatory checkoff funds that launched and are maintaining GENYOUth administratively are the token funds of so-called “thought leaders” — large multi-national food corporations, sleep companies (because USDA is now interested in sleep studies on kids), technology companies, advertising and marketing companies, as well as celebrities and investor philanthropists.

In the name of breakfast cart donations, they are all riding the GENYOUth school bus to make future Greta Thunbergs of our kids.

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Dietary Guidelines Committee must be stopped, its flawed upcoming report excludes rigorous fat studies

Posted on June 11, 2020 by Agmoos

Drawings by Heidi Krieg Styer as published on Farmshine cover, June 12, 2020 edition

By Sherry Bunting, Farmshine, June 12, 2020

WASHINGTON, D.C. — As we have reported for several years now, there is this thing called the Dietary Guidelines for Americans that most people think is simply government guidance of how Americans should eat to be healthy, and that we can take – or leave – that advice based on our own choices and understanding of the science.

Wrong!

The Dietary Guidelines for Americans increasingly control our choices in ways subtle and obvious, especially where our children are concerned and especially where the poorest among us are concerned.

They began in the 1980s and are updated every five years by a Dietary Guidelines Advisory Committee. Since 2000, these Guidelines have become more restrictive, and in 2010 — under the Obama administration with Ag Secretary Tom Vilsack implementing measures to ban whole milk in schools and then lobbying for the bill, Congress took the step that linked the guidelines more closely than ever to our schoolchildren through the Healthy Hunger-Free Kids Act. The bill is anything but what its name implies.

At the same time, Americans have continued to grow fatter, sicker and sadder as the limits on saturated fat have grown stricter and the federal control more pervasive.

Most of the ‘experts’ on the DGA Committee are free to choose their own meal pattern. Our schoolchildren, our poor, our chronically ill, our elderly, our military, our economically and nutritionally at-risk persons — their dietary choices are controlled by the DGA. According to the CDC, these are the demographic populations dealing with the most pervasive rise in obesity, diabetes and other chronic illnesses many scientists believe are rooted in the DGAs.

For 40 years, the advice coming from the Dietary Guidelines Advisory Committee every five years, and then virtually rubber-stamped by the Secretaries of Agriculture and Health and Human Services, has led Americans down an unhealthy road. The Committee pushes vegetarian eating patterns, high carb / low fat dogma, and increasingly strict saturated fat restrictions despite sound science to the contrary.

The process needs reform, according to the Academies of Sciences.

The 2020-25 Dietary Guidelines draft will be released next Wednesday, June 17 by the current Dietary Guidelines Advisory Committee (DGAC), and as the Nutrition Coalition and others have been warning, this draft is bad for Americans, bad for our children, and bad for our dairy and livestock producers.

What’s more, this draft is based on the deliberations of a committee that excluded rigorous studies showing the saturated fat in milk and dairy products is actually GOOD for us, especially for our children, and that it has little if any negative effect on cardiovascular health and all-cause mortality, with positive effect on Type II diabetes, obesity, cognition, brain function and mood.

Quite literally, the DGAC, Secretaries of Ag and HHS (even Congress and past and present administrations) — in their infinite wisdom and refusal to turn this Titanic away from the iceberg – are happy to watch American health sink, and the survival of our farmers and ranchers to sink right along with it.

If ever there was a time for action (and believe me, this chorus I’ve sung quite a few times since the year 2000), it is now!

Contact your Senators and Representatives in Washington and ask them to urge Secretaries Perdue and Azar to delay this DGAC report until all of the science is considered.

It is unconscionable that USDA – through its strange screening process that includes “conformance to current federal policy” implemented by department interns – was the first layer prohibiting rigorous science from the DGAC work over the past year.

It is even more deleterious that the DGAC further refined the science included in the saturated fat questions to illogical parameters that no other DGAC subcommittee used for its screening process.

Americans are smart. They are choosing whole milk and full-fat dairy products because they are learning about the science that was buried and suppressed over the past 40 years as well as the new studies surfacing.

But that’s only good for the wealthy adults among us. Children are ruled by DGAC decisions, thanks to Congress. Those suffering poor health are ruled by DGAC decisions because medical professionals tend to regurgitate them.

Families in need are perhaps MOST controlled by DGAC decisions because they rely on government feeding programs that must meet these fat-restricting Dietary Guidelines, but are issued SNAP cards that allow them to buy soda and cheap snacks full of carbohydrates that do nothing nutritionally for them.

Amid the COVID-19 crisis, how many times have we heard that the obesity and diabetes in our population, especially the poor, increases how harmful this virus is to certain populations, demographically? With these guidelines governing USDA feeding programs, it’s no wonder.

Shameful!

Not to mention, a year ago, military generals crafted a letter to Congress over their concerns about recruits being too obese or unhealthy to serve. Yes, the military is another sector of government-feeding that is tied to the flawed Dietary Guidelines for Americans.

So, big deal, my family can still choose. Right? For many families, those choices are made for them when dining out as restaurants increasingly document calories, saturated fat and other information on menus. This is required by the federal government for chain restaurants of a certain size. More of these restaurants admit to using “stealth health” to make adjustments to meals to show that they are meeting – you guessed it – the Dietary Guidelines.

In fact, the Food and Drug Administration (FDA) began its multi-year Nutrition Innovation Strategy, whereby it is seeking to “modernize” standards of identity to “achieve nutritional goals.” FDA also is designing a “good for you” symbol that foods will only get if they meet the criteria being developed. The agency in its meetings over the past year, cited reduced consumption of fat and salt as primary nutritional goals, and have made statements such as “American consume too much protein.” The FDA’s “modernization” of food labeling and standards of identity will certainly move forward under the good ‘ole Dietary Guidelines.

Meanwhile, when it comes to the simple “choice” of whole milk or even 2% in schools and daycares for children over two years of age, these wholesome products are outright banned because of the Dietary Guidelines. In fact, not only does the government require non-fat and 1% milk to be served, cheese and yogurt are also limited to low- and non-fat.

When fat is removed from the diet, carbs and sugars replace it, and foods are not consumed that bring tons of nutrients and vitamins to the table.

Here we are at a crossroads in our nation’s health. Obesity and diabetes are reaching epidemic proportions in our children. Iron, iodine, calcium, and certain vitamins, especially fat-soluble vitamins found in whole fat dairy and meats are nutrients of concern. Doctors are finding Americans, especially children and teens, are deficient in these nutrients when low-fat Dietary Guidelines rule the plate.

The only thing that can possibly turn the Titanic as it is already crashing on the iceberg is a groundswell of letters, phone calls, emails and faxes to members of Congress, Secretary of Agriculture Sonny Perdue, Secretary of Health and Human Services Alex Azar, even the President of the United States.

Sheer numbers are needed. To-date, medical and health professionals, scientists, teachers, parents, citizens have commented on the DGAC docket. Many have written letters and opinions, forwarded research that has been excluded, pointed out the flaws in research that was included.

Now Congress needs to hear from their constituents. There’s a war to win for our health and our farmers.

Concerned citizens have met with members of Congress over the past year on issues such as whole milk in schools, and yet the Whole Milk for Healthy Kids Act, House bill 832, and Milk in Lunches for Kids Act, Senate Bill 1810, have stalled at 41 and 3 cosponsors, respectively, which is where they were in October when I went to Washington with the first 10,000 of the 30,000 names on the Whole Milk Choice in Schools petition.

There are heavy hitters on the other side of this fat discussion. Never mind the animal and climate activists with their facts all jumbled up, there are huge investments in the future of food by powerful people who want to see the Dietary Guidelines continue the current path.

Part of the screening process used by USDA for science that will be included or excluded from Dietary Guidelines Advisory Committee consideration is this curious item shown above: “Framed around relevancy to U.S. Federal Policy”. Committee members in October asked for more information on this research screening criteria. USDA explained it to them and those watching that this refers to including only the research that “aligns with current federal policy.”

While I was in Washington in October, my eyes were opened. I sat in on the DGAC meeting and wrote about it in Farmshine. There, I learned that one of the screening criteria by USDA for determining what science was “in” or “out” of the DGAC process is this strange point: “relevancy to U.S. federal policy.” When a question was asked by a member of the committee about that point, it was explained as “research inclusion that conforms or aligns with current federal policy”.

That, my friends, is the unelected bureaucracy feeding itself and pretending to have the scientific basis to use diet to achieve other goals.

I visited Senator Bob Casey (D-Pa.) that day and asked his staffer why Sen. Casey would not support Senator Pat Toomey’s (R-Pa.) Milk in Lunches for Schools bill.

The response? “We (Congress) are not a scientific body. We have a process for that, the Dietary Guidelines.”

Yep. There it is again.

When pressed further, asking how citizens – constituents — can redress their concerns with ELECTED officials if that committee stands in the way, I was surprised to hear the staffer note that National Milk Producers Federation (NMPF) did not support Sen. Toomey’s bill. I had identified myself as a member of the Grassroots PA Dairy Advisory Committee but also as a mother, grandmother and former school board director, but the answer I was given honed-in on my “dairy” reference.

I was told by the Casey staffer that NMPF did not support Toomey’s Senate bill on whole milk because it included language that would not just allow the choice of whole milk, but would also exempt school milk choices from the “10% calories from saturated fat limit.”

Later, I contacted NMPF and spoke with one of their lobbyists who confirmed that NMPF did not support the Toomey bill language. They did not want that exemption for milk because they said they believed “we can win the fat argument.”

Meanwhile, on the day of my trip to Washington in October, as I posted a photo on facebook of USDA Food and Nutrition Services undersecretary Brandon Lipps in front of the Dietary Guidelines sign at the DGAC meeting in the USDA building, I recalled his words to me, that the department loves milk, but that the “science” needs to come together, and that the industry needs to be on the same page. (I had just handed him his copy of the first 10,000 signatures on the whole milk in schools petition)

Mr. Undersecretary, how can “the science” come together when your USDA interns and DGAC members left a lot of the good science on the cutting room floor and effectively screened it out of the “coming together” process these 5-year DGAC cycles are intended to address?

As I walked out of the USDA building to meet with legislators on that day in October 2019, I noticed a post on my facebook newsfeed from Hoard’s Dairyman quoting DMI CEO Tom Gallagher as follows: “Now, we’re not sure if it will be in this go-around with the Dietary Guidelines for Americans . . . but I believe by the next Dietary Guidelines we will get the fat story reversed,” said Gallagher. “That opens up the door to whole milk products and other dairy products in schools, which would be a big plus.”

Already in October, when the DGAC process was near its beginning, the top national dairy checkoff leader was publicly admitting defeat. Or, was he actually telegraphing the wishes of DMI “partners” to USDA, another partner, that they’d prefer to keep stalling it.

In this quote, Gallagher makes it look like DMI supports whole milk in schools, while at the same time stalling a change in policy and conceding to a defeat in 2020 before the game got off the ground — while diverting everyone’s attention to 2025.

Back in 2014-15, I was involved in that DGAC cycle, writing several columns for a metropolitan newspaper. Same story, different year. You’ll find lots of background here.

At the time, I asked checkoff leaders at a dairy meeting why they weren’t involved in turning this around on saturated fat and why were they not more vocal in the guidelines process. I was told in 2015, that they were working on it for 2020.

Stall, delay, stall.

Our kids and our farmers don’t have 5 more years to get 40 years of wrong and 10 years of really-really-wrong, right.

This week, I was pleased to see Bob Gray who has represented the Northeast Council of Dairy Cooperatives sent out a memo to industry colleagues citing what Nina Teicholz and the Nutrition Coalition have been sounding the alarm about. He urged people to contact members of Congress and ask them to get a delay in the release of the DGAC 2020-25 report, to keep it from being released next Wednesday, and to keep it off the table until the science that was excluded is considered.

Unfortunately, at other levels of industry involvement, the response is a shrug.

For example, two weeks ago, I heard from a dairy farmer who contacted her regional dairy checkoff organization and asked for help distributing whole milk gallons to families in need at her local school during lunch pickup.

“You can’t do that,” she was told. “It’s not allowed.”

Unfazed, she contacted the school and the processor anyway, on her own, and both were enthusiastic about making her idea happen. She and her husband purchased the whole milk with their own money – 200 gallons of it – and they stood beside the school foodservice folks and gave it to families driving through picking up school lunches.

Additionally, ADA Northeast is a regional checkoff organization that has indicated to dairy farmers that their taste tests in cities show children don’t really notice the difference between whole milk and 1% low-fat milk, and that consumption of milk did not increase when whole milk was offered, but that consumption did increase when 1% chocolate milk was offered instead of just non-fat chocolate milk.

For the industry – it’s all about the 1% milk in schools. In fact, if the DGAC report is released next Wednesday and gets on its way to USDA / HHS approval, 1% milk will be kissed goodbye in schools as well because the DGAC is doubling-down on saturated fat levels, not loosening them.

Meanwhile, a high school / middle school trial in western Pennsylvania would put these checkoff findings to shame. Teenagers given the choice of whole milk this school year favored whole milk three to one over 1% low-fat milk. The milk choices were put in front of them with no information, and within a short time, they figured it out on their own. Within five months of students having this choice of whole milk, teenagers were consuming 65% more milk and the amount of milk being discarded fell by 95%.

On every level – nutrition, satiety, sustainability, environment – you name it, that’s a win. A win that schools and children will not get to realize if the DGAC issues its 2020-25 report doubling-down on saturated fat.

This Dietary Guidelines scandal has many players and parties involved – and it’s obvious by now this has nothing whatsoever to do with “the science.”

Contact your Senators and Representatives as soon as possible before Wed., June 17 and ask them to urge Sec. Perdue and Sec. Azar to delay the DGAC report and to send the committee back to the drawing board to include the science they left out.

If you don’t know who represents you in Washington, use this link to plug in your home address at this link to find out:

Also, register your comment with Secretaries Perdue and Azar here

Let’s get this Titanic turned around. We don’t have 5 more years to waste. Who’s with me?

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Dean pays independents for April milk, owes millions to co-ops, USDA FMMOs, MilkPEP

Posted on June 11, 2020 by Agmoos

The Dean Foods product lineup as pictured on its website just prior to the November 2019 bankruptcy filing and May 2020 sale.

By Sherry Bunting, Farmshine, June 12, 2020

HOUSTON, Tex. — Dairy producers who ship milk independently to any of the former Dean Foods’ 57 milk plants began receiving their final payments for April milk on Monday, June 8. These were the payments due from Dean debtor in possession (DIP) in mid-May that became part of the administrative expenses in the post-sale proceedings of the Southern Foods Group (Dean Foods) bankruptcy in the Southern District Court of Texas.

Several dairy producers in several states confirmed to Farmshine Tuesday that they received these payments. Furthermore, their May advance payments were timely made by the new owners of the former Dean plants — namely DFA and Prairie Farms.

The Pennsylvania Milk Marketing Board (PMMB) staff also confirmed late Tuesday that, “All Pennsylvania independent Dean producers have been paid what was due them for April.”

For its part, the PMMB staff had initially begun the process of auditing non-payments in preparation of filing bond claims. Seven of Dean’s plants are licensed and bonded in Pennsylvania – a requirement to buy milk from farms in the state. This includes four plants in Pennsylvania, one in New Jersey, one in New York and one in Ohio.

The PMMB quickly shifted gears early this week from auditing non-payments to auditing the payments to independent producers, and as conveyed, found that producers received what was due.

The PMMB staff also indicated they are completing their auditing of what is still owed to milk cooperatives. If payments to cooperatives are not received, PMMB will file the necessary bond claims for any Pennsylvania cooperative milk that remains unpaid by the Dean bankruptcy estate.

Nationwide, independent producers have been paid, but cooperatives are still owed for April milk as of June 10.

In addition, USDA AMS Dairy Programs in Washington replied Tuesday, June 9 that, “USDA has not received payment from Dean (DIP) for April producer settlement funds owed.”

USDA had previously indicated that not only were the pool funds outstanding, Dean had also not paid the FMMOs for producer marketing services, transportation credits and administrative service in nine Federal Orders. Dean Foods is fully regulated in all Federal Orders except for the Pacific Northwest and Arizona.

In mid-May, USDA reported that, “handlers were notified via memorandum of the non-payment and the pro-ration of the available producer settlement monies.”

The loss of Dean’s Class I contributions to Federal Order settlement funds from 57 plants regulated in nine Federal Orders would decrease the blend price paid to all producers in those areas — under normal conditions — by reducing the pool funds drawn by handlers for other class uses. Several cooperatives are handling the loss of pool funds from back in Oct./Nov., and potentially April, by way of milk check deductions that will continue until the pool shortfalls are covered.

In an email response this week to Farmshine, USDA AMS Dairy Programs confirmed that, “No claims for these April producer settlement funds have been filed with the bankruptcy court because the April Federal Milk Marketing Order (FMMO) obligations are post-bankruptcy debts and are recouped through the post-bankruptcy process.”

The post-bankruptcy process involves the Dean estate’s plan being filed with the court outlining how it will pay its vendors (including USDA producer settlement funds) as it winds down operations of the estate. According to USDA, Dean has notified the court that it will file the payment plan by August 3.

How much is owed for April milk to the USDA FMMO producer settlement funds across the U.S. is deemed proprietary information, according to USDA, and “it has not yet been aggregated with appropriate redactions and cannot be released at this time.”

However, some milk cooperative sources handling only manufacturing class milk in the Northeast and Mideast are pegging their losses from these unpaid April settlement funds to be upwards of 30% of the blend price.

In addition to the missed payments to FMMO settlement funds for April, USDA confirmed in an email that it filed proofs of claim in the bankruptcy proceeding for monies owed prior to the bankruptcy filing for October and mid-November 2019 milk marketings.

“Those proofs of claim (for Oct./Nov. 2019) totaled $13.8 million for monies owed to producer settlement fund, marketing service, administrative, and transportation credit funds, as well as the Fluid Milk Processor Promotion Program. The proof of claim documents were filed on April 21, 2020 and can be viewed on the Dean Foods Restructuring website,” USDA stated in an email response this week.

With more than 3000 documents on the Southern Foods Group bankruptcy docket, a search of claims did yield more than two dozen separate proof of claim filings by USDA on April 21, including information showing that Dean owes $3.1 million for Oct./Nov. 2019 to the Fluid Milk Processor Education and Promotion Program (MilkPEP). Fluid milk processors are obligated by USDA to pay 20 cents per hundredweight into this fluid milk promotion fund.

It is unclear how much of what was due the cooperatives back in Oct./Nov. 2019 is also upaid, but proofs of claim filed in March 2020 by milk cooperatives peg the largest amounts owed from last fall at $103.4 million to Dairy Farmers of America (DFA); around $14 million to Southeast Milk (SMI); and over $7 million to Land O’Lakes. The link to claims documents on the Southern Foods Group bankruptcy docket can be found at https://dm.epiq11.com/case/dnf/claims

As for what is owed to USDA for April 2020, it is difficult to estimate an amount based on the proof of claims filed for Oct./Nov. 2019 because COVID-19 disruptions completely altered the milk marketing landscape in April.

While Class I sales were much higher in April 2020 compared with October and November 2019, the Class I base price was $5.00 per hundredweight lower in April vs. Oct./Nov. Also, the amount of milk diverted to the lowest class “dumpage and other use” category for April was enormous – at 350 million pounds across all Federal Orders, this was up 960% from a year ago and represented almost 2% of the entire U.S. milk supply in April (see related story in next week’s edition of Farmshine).

These factors would most assuredly reduce the Dean settlement fund obligations to the FMMOs for April 2020 as compared with “normal conditions”. However, the marketing, transportation credits and MilkPEP checkoff obligations were likely higher in April than last fall.

Producers and state and federal sources indicate that the remaining skeleton staff for Dean Foods, post-sale, has been helpful in keeping lines of communication open. Each step of the way, independent producers, producer groups, state boards and others received information about the process and its potential timelines.

In the case of the independent shippers, at least, the Dean estate paid them the first week of June after letters were sent the week prior, indicating potential payment by mid-June.

State and regional organizations, such as Farm Bureaus, milk marketing boards, state departments of agriculture, and others had written letters to the bankruptcy court and the Dean estate, and articles about the unfolding situation had also been provided, leading up to Dean’s communication with producers and ultimately these payments to independent shippers being made.

As well, the bankruptcy court docket, hearing process, and bidding process seem to have been transparent, for the most part, albeit extremely complex.

In spite of this transparency, bidders other than Dairy Farmers of America (DFA) were not privy to details needed about payables for some of the Dean plants – information that was critical to putting together financing for potential bids. Furthermore, the 44-plant lump-bid by DFA provided an edge to win plants that had multiple contending bidders by lumping them together with plants that had no contending bidders.

What remains unclear is how the more than $100 million dollars, Dean owes to DFA will be handled in relation to DFA’s purchase of substantially most of Dean’s plants and assets at a price of $433 million. The U.S. Department of Justice (DOJ) approved the sale, with the stipulation that three plants located in Wisconsin, Illinois and Massachusetts be divested.

The map of Dean Foods plants as provided by Dean Foods after its bankruptcy filing last November juxtaposed with the map of DFA plants — both wholly owned and affiliated — according to locations listed as such or otherwise publicly available.

Through the Chapter 11 bankruptcy sale process, which was consummated the first week of May 2020, 44 of Dean Foods’ 57 milk plants (including all seven licensed to buy milk from Pennsylvania farms) were acquired by DFA, the nation’s largest milk cooperative, headquartered in Kansas City, Kansas accounting for one-third of the U.S. raw milk supply with members nationwide and sales nationally and internationally. DFA was Dean’s largest milk supplier and the Dean accounts represented DFA’s largest milk buyer, according to court documents.

Eight Dean plants and other assets were acquired by Prairie Farms, a milk cooperative headquartered in Edwardsville, Illinois with members as far south and east as Kentucky to as far north and west as Minnesota, marketing products in at least 14 states. Several years ago, DFA and Prairie Farms jointly purchased and incorporated the previously family-owned Hiland Dairy Foods, headquartered in Kansas City, Missouri, with its 17 fluid milk and dairy plants and 51 distribution centers that together stretch through the Heartland from Texas to South Dakota.

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Ag Moos

Monthly Archives: June 2020

U.S. milk production falls 1% in May, FMMOs pool 13% less milk

Industry, government follow grassroots donations lead, CFAP adds to dairy demand driving markets higher

Dietary Guidelines catastrophe not understood by most

Eye on markets as reined-in supply vs. strong demand drive dairy higher

Northeast bore brunt of huge milk dumping in April

One-sided bias evident as DGAC edges fat ‘caps’ lower, even our toddlers aren’t safe

Milk industry transformer, ex-Dean CEO Engles leads team winning bid for Borden

‘Good for me, good for the planet?’ GENYOUth drives ‘future of food’ to make future ‘Greta Thunbergs’ of our kids

Dietary Guidelines Committee must be stopped, its flawed upcoming report excludes rigorous fat studies

Dean pays independents for April milk, owes millions to co-ops, USDA FMMOs, MilkPEP

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