Preposterous ‘preponderance’

Posted on December 30, 2020 by Agmoos

While left hand says it’s busy building ‘mountain’ of evidence, right hand has already moved the nutrition definition goal post

By Sherry Bunting, Farmshine, Dec. 23, 2020

BROWNSTOWN, Pa. — Preponderance of the evidence. We hear that phrase over and over when it comes to the Dietary Guidelines for Americans (DGAs) and the effort to reverse 40 years of increasingly strict rules on dietary fat affecting children in schools and daycares, the military, seniors in nursing care or retirement villages, food-insecure families relying on government feeding programs like WIC, and countless other insidious prohibitions on healthy choices when it comes to whole milk, butter, full-fat cheese, dairy products like sour cream and cream cheese as well as other animal protein foods containing fat.

But the whole concept of ‘preponderance’ is really preposterous when applying the legal definition.

Let’s review.

Last March at a DMI forum on a Chester County dairy farm, DMI chair Marilyn Hershey and executive vice president Lucas Lentsch described the ‘preponderance of evidence’ standard as “building a mountain of evidence.” They said the National Dairy Council is building that mountain, but it takes time to keep pushing more evidence forward “until we have enough.”

When former Ag Secretary Tom Vilsack gave the 2015-20 Dietary Guidelines his stamp of approval, a Congressional hearing took the USDA and HHS secretaries to task, grilling them on science that was not considered then (nor is it now in the 2020 version of the DGAs). Remember, former Ag Sec. Vilsack promptly became the current top-paid dairy checkoff executive for four years (Jan. 2017 to present) and is now poised (again) as President-Elect Biden’s Ag Secretary pick 2021 forward.

During that 2015 congressional grilling, then Secretary Vilsack said “It’s the preponderance of the evidence that is the standard, and we know stuff is always changing so there has to be a cutoff.”

On whole milk (which he helped remove from schools in 2010), then Secretary Vilsack, when confronted in 2015 with what he called “emerging” science on saturated fat — said “the preponderance of evidence still favors the recommendation for fat-free and low-fat dairy.”

Much of the saturated fat discussion during the 2020 DGA Committee work used the 2015 DGA’s body of science, that was one of the screening criteria. The cutoff bar didn’t move.

In 2015, then Secretary Vilsack explained the ‘science’ of the DGAs this way:

“Well, the process starts with a series of questions that are formulated and then information is accumulated and it goes through a process of evaluation,” he said.

Answering a charge by then Congressman Benishek, a physician from Michigan who was concerned about the 52% of Americans who are diabetic, pre-diabetic and carbohydrate intolerant as regards the fat caps and the exclusion of science available — even in 2015 — on low carb, higher fat diets, then Sec. Vilsack stated in 2015:

“The review process goes through a series of mechanisms to try to provide an understanding of what the best science is, what the best available science is and what the least biased science is, and it’s a series of things: the Cochrane Collaboration, the Academy of Nutrition and Dietetics, the aging for health care equality, data quality, all part of the Data Quality Act (2001 under Clinton Admin). That’s another parameter that we have to work under, Congress has given us direction under the Data Quality Act as to how this is to be managed.”

On a further point of contention in 2015, Vilsack stated the following as a definition of how “preponderance” works.

Vilsack said (2015): “In some circumstances, you have competing studies, which is why it’s important to understand that this is really about well-informed opinion. I wish there were scientific facts. But the reality is stuff changes. The key here is taking a look at the preponderance. The greater weight of the evidence. If you have one study on one side and you have 15 on another side, the evidence may be on this side with the 15 studies. That’s a challenge. That’s why we do this every five years to give an opportunity for that quality study to be further enhanced so that five years from now maybe there are 15 studies on this side and 15 studies on this side. It’s an evolving process.”

During a recent dairy checkoff yearend news conference with reporters, DMI CEO Tom Gallagher answered a question about consumer health attitudes and checkoff research targets for 2021. Whole milk was never mentioned in the question, but here is Gallagher’s answer as he, too, cites the “preponderance” criteria:

Gallagher said (2020): “Our research plan (for 2021) is very robust at our centers. The primary research that we focus on is whole milk because we are, number one, the only group to be pushing the research on whole milk and taking it to the scientific community so the scientific community does more research because the Dietary Guidelines will never change until the preponderance – not the best – evidence, but the preponderance of the research is in favor of whole milk. We’re helping to move that needle to that point.”

I looked up the legal definition of this ‘preponderance of the evidence’ phrase, this standard for the DGAs as determined by Congressional statute. It is clear that DMI’s assertion of building a mountain of evidence is not needed to achieve a preponderance, according to the legal definition.

According to the law.com legal dictionary, ‘preponderance of the evidence’ is a lower burden of proof than other evidentiary burdens. It only requires a better than 50% chance that it’s true!

In fact, the law.com definition states “Preponderance of the evidence is based on what is the more convincing evidence and its probable truth or accuracy NOT on the amount of evidence.” An example is given where one credible witness outweighs a pile of other evidence! It’s not the amount of research, then, it is the more convincing in terms of probable truth.

The word preponderance itself means “quality or fact of being greater in number, quantity, OR importance.” Yes, importance and quality can trump quantity to achieve preponderance!

Mountain-building is a stalling tactic by the left hand of industry and government, while their combined right hand is moving the goal post. (In fact, mountain-building is futile because the USDA structure on Dietary Guidelines has not allowed new evidence to be considered on certain dietary fiction it deems as settled science. There are fancy ‘mechanisms’ that have kept credible science out of the equation in 2015 and again in 2020).

Who are the attorneys advising USDA and dairy checkoff as to the meaning of “preponderance of the evidence?” Could it be Mr. Vilsack, an attorney by trade, going from USDA Secretary to top-paid DMI executive and back again potentially as the next Ag Secretary?

Clearly, Mr. Vilsack and his colleagues at DMI are fond of citing “preponderance” as a stalling tactic for fat flexibility in the DGAs. But contrary to Gallagher’s point during this yearend news conference, the legal definition of “preponderance of evidence,” really does mean the BEST evidence can trump the MOST evidence.

It’s not about which theory has the most evidence, but which one has the best and most convincing evidence. This definition suggests that you don’t need 15 studies on one side to match 15 studies on the other side. To add flexibility on school milk choice or to reverse the saturated fat caps set at 10% of calories, a mountain of evidence is NOT needed, and a lot of good and convincing evidence keeps getting excluded from the process anyway.

The saturated fat question and the casting aside of research feels like being forced to doggy paddle in an olympic swimming competition.

The problem is agenda and bias. Who is standing up for producers and consumers?

Ahead of the 2015 DGA cycle, scientists and investigative journalists, like Nina Teicholz, exposed the weak scientific basis for Dr. Ancel Keys’ diet-heart hypothesis that these DGAs have been built on for over 40 years. Not to mention the many studies back then that were buried, once Keys became the dietary darling, and not to mention all of the newer studies that show saturated fat is not the health demon it has been made out to be, and in fact is necessary in diets to prevent chronic diet-related illness.

Here’s a look at where nutrition science is going next.

Yes, they have moved the goal post via climate change. And yes, they are telling us that consumers are more concerned about climate change after Covid-19.

Basing DMI’s 2021 plan assertions on a Kearney report (April 2020), Gallagher said: “Covid-19 has made people more hyper-sensitive to things, like the environment. 58% of consumers are more concerned about the environment since Covid, and 50% want companies to respond to climate change with the same level of urgency as responding to the pandemic.”

When asked where consumers ranked health in that particular survey — given a recent report on CNBC business news about corporations trying to get consumer ‘buy-in’ on sustainability benchmarks and finding the only way to achieve it is to link sustainability to health.

You guessed it. Gallagher was ready with the answer.

“Sustainable nutrition is the phrase you’re going to hear going forward. You’re going to see those two things inextricably tied,” he replied during the yearend and look ahead news conference by phone.

We recall in October 2019, Gallagher telegraphed a message during the 53rd World Dairy Expo that the dairy checkoff simply accepts waiting another five years until 2025 (not the current cycle) as the year that the saturated fat caps could be reversed. The 2020 DGA committee was only just partway into the process back in Oct. 2019 with a whole year of work ahead — and already the head of dairy checkoff was being quoted in the Oct. 14, 2019 Hoard’s article broadcasting that the fat issue could likely happen by the NEXT DGA cycle (2025), not this one (2020).

Gallagher further indicated in that Oct. 2019 Hoards article that the “forest” must be “populated with more trees.” (Again this idea that preponderance is based on the amount of studies, not the importance or reliability of the studies and not acknowledging that half the trees in that so-called forest are being ignored by USDA and the DGA committee — screened out of consideration at the outset. Not one of the checkoff or ag commodity group was standing up for producers and consumers on this score at the START of the 2020 DGA cycle, nor the finish).

However, we now know that the new goal post will be entrenched by 2025: ‘Sustainable nutrition’ will be the new phrase, the new goal post, according to Gallagher’s response during the December 2020 news conference.

Make no mistake about this: As much as the sustainability overlords talk about farmers being paid to plant cover crops (most already plant cover crops after corn harvest) or to recover nutrients and methane through other practices and technologies, paying for offsets and dilution of animal foods in diets are two strategies already on deck. We heard a little of this also during the December 2020 news conference as Gallagher and DMI president Barb O’Brien talked about how their partners are getting into ‘competitors’ (fake dairy lookalikes) because when a family of four comes in to eat, one may want a new taste experience, and DMI partners have to provide that ‘new experience’ to keep from losing the entire family.

DMI is working for its corporate partners like Nestle and Starbucks, both giving the DMI Innovation Center’s Net Zero Initiative up to $10 million over multiple years to pilot sustainable technologies and practices on dairy farms.

Gallagher described the situation this way: “Health, taste, price – those things are still important, but as more and more companies are offering things that are competitive, what we’re seeing people saying is ‘Well, I’m going to look at sustainability as a difference maker in who I purchase from and what I purchase,’” he said.

“The days of 10 to 15 years ago — where things like sustainability were believed to be made up by retailers for marketing — are over,” Gallagher added.

“Everyone gets it. We are past that. The beautiful part is the U.S. dairy industry has the best sustainability story in the world to tell, and we’re telling it,” he said.

As promised, a follow up email provided more details on Gallagher’s whole milk research assertion, stating: “Dairy farmers have been funding research led by National Dairy Council on the role of whole milk dairy foods and wellness for over a decade. In fact, around 70 studies have been published, adding to the growing body of evidence indicating that consuming dairy foods, regardless of fat content, as part of healthy eating patterns is not linked with risk of heart disease or type 2 diabetes. The paradigm shift to more fat flexibility in the dairy group is already happening in the real world as demonstrated through the many actions of consumers and thought leaders.”

Three research items were specifically mentioned in the email — all published within the past 6 to 24 months:

1) A Science Brief: Whole and reduced-fat dairy foods and cardiovascular disease. Upon following the link published January 17, 2019, we find it begins as a regurgitation of 2015-20 Dietary Guidelines with all references to dairy qualified as ‘low-fat and fat-free’, but then goes on to discuss: “Emerging research also indicates that saturated fat intake on its own may be a poor metric for identifying healthy foods or diets.” A downloadable PDF summarizes this “emerging” research on dairy fat at: Science Brief: Whole and Reduced-Fat Dairy Foods and CVD | U.S. Dairy

2) Posted in Sept. 2019 is this resource where National Dairy Council’s Dr. Greg Miller talks about “landmark shifts” and states that, “As the research continues to grow, a preponderance of evidence (exists linking milk, cheese and yogurt, regardless of fat level, with lower risk of chronic diseases like type 2 diabetes and cardiovascular disease. This one is found at: Ask Dr. Dairy: Can Whole Milk-Based Dairy Foods Be Part of Healthy Eating Patterns? | U.S. Dairy

3) The third item posted June 2020 in connection with DMI’s Dietary Guidelines comment talks about dairy consumption lowering risk of high blood pressure and diabetes and cites a study that, “indicates there may be room for fat flexibility in peoples’ dairy group choices to include dairy foods like milk, cheese and yogurt – at a variety of fat levels – as part of healthy eating patterns in the U.S. and worldwide.”

We can see the tight rope being walked, hinging everything on this idea of slowly building a mountain of evidence as though this is the definition of what is needed to fulfill the “preponderance” standard. But as we know from the legal definition, the amount of evidence is not what’s important, but rather what is credible and convincing. The available evidence is already preponderant. Whole milk, at 41% of market share, has grown by leaps and bounds over the past two years, and is now the largest selling product in the milk category because consumers are convinced. In the past two years, they have moved toward choosing health instead of allowing the government to choose for them — at least when they CAN choose.

Thinking on the many topics that were part of the fairy checkoff yearend news conference, some clear themes take us into the new year in terms of the 2021 dairy checkoff plans.

Gallagher, O’Brien and Hershey talked about “moving milk” differently because of Covid, of working in Emergency Action Teams to unify the supply chain with these top priorities in mind:

1) Feeding food insecure people,

2) Responding to climate change,

3) Developing a deeper and closer relationship with Amazon into e-commerce and milk portability, and

4) Developing tools and promotions for corporate partners.

On the latter, Gallagher was proud to give the example of DMI’s funding for Domino’s “contactless delivery” in Japan during the early days of Covid. He said this partner (named as Leprino, DFA and Domino’s) would not have been in a position to move so much pizza cheese when the pandemic hit the U.S. had it not been for DMI’s funding of that contactless delivery innovation first in Japan and then used here.

(Contactless delivery is used by almost every restaurant doing takeout today in the Covid era. It simply means ordering and paying online, texting when arriving, and having your food placed in your car. Not rocket science.)

Since 2008, DMI and USDA — through Vilsack-era Memorandums of Understanding — have a hand-in-glove relationship on GENYOUth and Sustainability. DMI works for its partners and has adopted a role for itself as global supply-chain integrator — the prime mover of milk.

Increasingly, there is the sense that the dairy checkoff bus has morphed into a ride for its key partners, while rank-and-file producers keep paying the fare, just hoping for a lift.

Look for more yearend checkoff review in a future edition of Farmshine.

Heartbreaking, heartwarming: Joshua Heisey, 12, mourned and celebrated with profound faith

Posted on December 28, 2020 by Agmoos

LEBANON, Pa. — Christmas is a time for giving, for sharing, and most of all for spiritual renewal as we celebrate the true gift of life everlasting through the Son of God born to us, a child, laid in a manger.

For Joel and Karen Heisey and their children, the journey last week has been one of loss, as well as of giving. It has been a time of heartbreak and mourning as well as a time of purpose and of miracles as 12-year-old Joshua Heisey passed away December 17, five days after an accident at home on the dairy farm. He never regained consciousness.

With God’s grace and peace, Joshua and his family anointed others. “Joshua will continue to touch and change lives… We believe that God wants to use Joshua to bring physical and spiritual salvation to others,” wrote his mother Karen in a facebook post that evening (Dec. 17).

The very next day, Friday, Dec. 18, was the Lebanon-Berks Christmas Type and Production Sale, dispersing 40 dairy cattle from the Heisey family’s Hy-Hill Holstein herd near Lebanon, Pennsylvania.

The sale had been set for weeks. The preparations had been in place, and the auction and farming community were eager to support the family — to see the sale through.

“Our hearts go out to the family. May God sustain you during this time of grief and loss. Your testimony of faith is truly remarkable,” wrote the crew at Triple Hil Sires in a facebook post Friday morning as the sale got underway. The Heiseys bred and own 525HO125 Wonderboy, a service sire at Triple Hil.

In the hours before the sale, many reached out wanting to honor Joshua’s memory and to give back to the family in a tangible expression of love and support as they had been praying for Joshua and following his journey.

As part of the sale crew, Daniel Brandt had been receiving many inquiries and offers to donate fundraising lots to auction that day. The sale staff decided to choose one donation and raise funds to purchase the package to give both the package and all funds raised to the family.

Jarrod Burleigh offered two embryos from his top-production leading Red and White Holstein, with Rusty Herr offering to implant them free of charge. Funds were then raised from over 60 additional families and individuals to purchase the package during the auction so that the sale crew could give the funds plus the embryo package to the Heisey family.

“In all, $9000 was raised for this purpose,” Brandt reported in an email Monday.

“I personally have been inspired by the Heisey family’s tremendous faith and strength through this tragedy,” Brandt added, echoing what so many have said this week. He and his wife Rebekah will deliver the check and a card with all the names to the family this week.

The sale Friday was attended by the Heisey family as they watched 40 of their selected Hy-Hill cows be sold. Joel, himself an auctioneer, did auction the last lot of the day, with an expression of gratitude to the community surrounding them.

Earlier at the start of the sale, Brandt made an announcement, but most everyone in attendance already knew of the tragedy in their midst.

“The community was very supportive, with people coming from everywhere to bid and to buy one of their animals. Many of the cattle stayed local,” said Amy Bickham, aAa analyzer and cow-breeder. In addition to the pedigrees and worth of the cows, was the feeling of appreciation for and connection with the Heisey family, and to remember their son.

“Joshua was interested in a lot of things, and he did have a strong interest in animals — and insects — and studying so many of these things,” said his father Joel by phone this week.

“Joshua had a cow he had decided not to sell, and so we still have her,” Joel added.

While the family was planning the service for their son, so many thoughts ran through their minds of what happened, how to make sense of it, how to open hearts and minds to God’s peace that passes all understanding, which they say is sustaining them.

In the words written by his mother: “Joshua was pronounced deceased at 3:45 p.m. on Thursday December 17th after a final verification of brain death. He remains at Penn State Hershey Medical Center where he will undergo recovery surgery for organ donation. We left the building this evening with broken hearts, but filled with peace and hope, and the confidence that this is what God wanted for Joshua. May God be glorified as Joshua continues to touch and change lives. Your fervent prayers are being answered, you have blessed our family through your unconditional support, and we are forever grateful.”

Later, it was learned that the miracle so many prayed for would be as his mother described it, “more than one.” Through organ recovery, Joshua will bring miracles to as many as 100 people. Some will be children, others adults.

But to his family and those close to Joshua, there will be a time of remembrance and of grief. A time to share stories and to lift each other up. A time to celebrate a child’s life on earth even as he has been called so young to his heavenly home.

For those acquaintances casually intersecting with the life of 12-year-old Joshua Heisey or his family — or simply reading this article not having known the family at all — it is the Word of God his family brought forward in their journey last week that holds real power to lift others and change lives:

“Have I not commanded you? Be strong and courageous. Do not be afraid. Do not be discouraged, for the Lord your God is with you wherever you go.” – Joshua 1:9

— By Sherry Bunting, republished from Farmshine, Dec. 25, 2020

PHOTO CAPTION: Last summer, five months before his passing, Joshua Heisey is pictured here with 2-year-old Hy-Hill Wonderboy Maxie when Triple Hil had come out to the farm to photograph Wonderboy daughters. Photo courtesy Triple Hil Sires

Joshua’s obituary and service information at this link Joshua Heisey Obituary (2020) – Lebanon Daily News (legacy.com)

PA herd first in nation to make ‘Naturally Better Omega-3’ milk

Posted on December 21, 2020 by Agmoos

New labels are on, and new signage is up in the dairy case at the Oregon Dairy family-owned grocery store. While other brands of milk are sold here, like in any grocery store, the buzz is all about the milk with “mooore” — Naturally Better Omega 3 Oregon Dairy Milk. Since omega-3 is a healthy fat, the benefits are only available in milk products containing fat — whole milk, whole chocolate milk, 2% milk and cream.

By Sherry Bunting, Farmshine, December 11, 2020

LITITZ, Pa. — Whole milk sales are rising. Consumers are returning to fat, and they are looking for healthy, local foods. These trends were underway well before Covid-19 and have only accelerated since. At the same time, dairy farms look for growth in diversification or getting closer to the consumer, rather than expanding cow numbers.

For Oregon Dairy, Lititz, Pennsylvania, those paths intersected. They downsized the dairy herd from milking 500 cows to 60 in July 2019, which was the first step to becoming first in the nation (likely first in the world) to produce and market milk with “mooore omega 3” – naturally. The marketing began recently in November 2020.

“We are very proud of our milk. We have always been tied to the story of our milk from the farm to the store. But we are also looking to go to the next level in differentiating it,” says Jon Hurst, center store manager. “Now we have a story to tell about our Naturally Better Omega 3 Oregon Dairy Milk.”

In fact, shoppers at the family-owned grocery store can scan a QR code on the cap of the milk jug that takes them directly to a video about how the cows are fed to naturally produce milk with more omega 3.

The video talks about healthy omega-3 fat found in dairy foods (and fatty fish).

Therefore (as noted on the dairy case signs below), the higher omega-3 levels pertain to the whole milk (57 mg), whole chocolate milk (53 mg), 2% milk (28 mg) and cream.

While there are other milk brands that increase omega-3 by adding fish oil or algae derivatives directly to the milk in the form of additives, what Oregon Dairy has done is to feed the cows a supplement that balances the ratio between omega 3 and 6, so the cows naturally produce milk with consistently higher levels of omega-3 – and do it within a conventional dairy setting.

The distinct businesses of Oregon Dairy near Lititz, Pennsylvania include the farm, bottling at the grocery store, restaurant, ice cream shoppe and agri-tainment with four brothers, George, Willie, Curvin and Vic, owning different segments. As they partner with the next generation of siblings and cousins, communication has grown closer on a farm-to-table vision that has always had the dairy cow front and center.

Celebrating the ‘Naturally Better Omega 3 Oregon Dairy Milk’ in front of the model cow painted to show her unique digestive capabilities are family members involved in the distinct businesses of Oregon Dairy (l-r), Willie Hurst, Krista Martin, Jon Hurst, Maria Forry, George, Brent and Curvin Hurst. Absent from photo are Vic and Chad Hurst.

Like any grocery store, other big-name brands are sold, but the focus is to continue highlighting local through what they do at the farm and other enterprises under the Oregon Dairy umbrella, as well as partnering with other local farms and businesses in the community.

Before downsizing, the farm — co-owned by George Hurst and his son Chad and daughter Maria and her husband Tim Forry — sold 90% of their milk through a cooperative in the commodity market and just 10% was purchased by the store and restaurant as needed.

Now, the various branches of the Hurst family and sector managers must communicate more directly about milk supply and marketing — putting them in the position to tailor what they do at the farm level to differentiate the milk at the store level.

With 18,000 followers on Oregon Dairy’s social media platforms, Jon has become a promotion powerhouse with the “farm fresh family fun” tagline, producing videos and contests and in-store partnerships that began before the Coronavirus disruptions and have given shoppers something to look forward to — with humor and sincerity — during this Covid-19 era.

For generations, they’ve been just bottling milk at the store and having their cream turned into ice cream by another manufacturer. But Jon and his cousin Maria, see a future of possibilities.

The Naturally Better Omega 3 (NBO3) Oregon Dairy Milk opens opportunities, but it really starts at the basic cow level, where the total mixed ration is balanced for omegas by feeding greatOPlus, an omega-3 nutrient supplement in the TMR mineral pack from Sporting Valley Feeds.

Their longtime nutritionist and veterinarian Dr. Robert Stoltzfus of Lancaster Vet Associates suggested the product last fall — a few months after the cow herd was downsized.

Across species, feeding flaxseed is nothing new, but it is the supplement’s algae derivatives that add additional properties for animal performance and transfer a more optimal omega balance to the meat, milk and eggs the animals produce.

“The benefits are on two levels,” says Paul Rosenberger, a consultant with NBO3, maker of greatO P lus and the largest algae producer in the country. We spoke with him by phone this week to understand the process.

“By balancing the ratios of omega 3 and 6, we get the benefit of omega-3, and in bypassing the rumen, we improve the conversion of that balance to the milk,” he explains about the natural feed nutrient.

Omega-3 has attracted attention as a healthy fat in the human diet, including reducing stress and inflammation, as well as heart health and other benefits the long chain fatty acids provide.

Oregon Dairy is one of a couple dairies Rosenberger is working with to introduce the product and acquire data.

Through Kansas State University, the Manhattan, Kansas-based NBO3 company has already received over 8000 data points from beef herds, poultry (eggs), swine, and now milk from dairy cows.

“In beef cattle, our data show improved marbling and color of the meat. In dairy cattle, there are performance benefits, but what we’re looking at with Oregon Dairy are the ratios of omega 3 and 6 in the milk,” he explains. “They are a natural for us with their retail connection providing so many attractive possibilities.”

Jon and Maria confirm the milk looks and tastes the same. (We took some home and agree, the milk is delicious as always with no difference in taste.) The difference is on the label in the milligrams of omega-3. Getting to that point took nine months of testing.

Maria explains: “We started feeding (the supplement) to our cows at a half a pound per cow in the ration, then tested, then increased our feeding rate until our tests showed we reached the omega-3 levels in the milk and were holding at those levels for months.”

Today the TMR inclusion rate is at about one and a half pounds, and the testing through NBO3 incorporates three prongs: the K-State university system, their own company labs and a third-party verifying lab.

“Once we got to the level of omega-3 in the milk and could sustain it, that’s when we got involved in the marketing and telling the story,” says Jon.

George explains that some producers are feeding the omega-balancing product to improve cow health, fertility and performance. He says they weren’t looking for specific herd improvements, but rather to improve the milk the cows produce.

Tim says the performance of the cows has been quite good in production, SCC and fertility, but again, their goal is what transfers to the milk.

Tim and Maria Forry are flanked on the left by the downsized dairy herd of 60 milk cows and on the right by the new group of 180 beef heifers being fattened for market next spring.

“We want to niche our milk,” George relates. “Downsizing the herd was never a question of not producing milk. It was a business decision on the farm side because of the dynamics of the milk market and dairy pricing. We chose to downsize and diversify.”

The farm has gotten into custom work and a seed dealership. “We went from being 40% overcrowded to having less than 50% of our freestall capacity used, that changes a lot of things,” says Tim.

One thing it changed is feeding the methane digester that has been integral on the farm since the 1980s, so they’re fattening 180 beef heifers that go to commercial markets, along with a small number of pasture-raised Angus cattle, owned by the store, that are finished at the farm.

The beef cattle help keep the digester fed and stable to receive the other waste, to generate electricity and be part of the composting business they started over a decade ago.

Meanwhile, the store was also looking to diversify and capitalize on direct relationships with consumers.

“I go back to the concept of doing what you are good at, and this is what we are good at,” says Jon. As part of the next generation bringing their perspectives to the business, he sees local, natural, family and fun as what Oregon Dairy is good at. This omega 3 niche allows them to envision more about the future.

“We want to be thinking outside the box of how to handle the amount of milk produced and needed,” Jon observes.

“It all ties back to the consumer and the cows. Through our agri-tainment and corn maze and events, we hear consumers talk about health, we talk to consumers about milk and health. I talk to my own friends and family about cows and milk, but it always comes back to a health discussion,” Jon explains. “People in my generation want natural and local, and this is natural and local. Those two words capture carbon footprint and health, and it’s part of our story.”

“I think what is encouraging for other farms to take from this is to look for opportunities to diversify and differentiate within your sphere — to pursue and collaborate with others even in a small way, to find the opportunities whether producing milk, meat or eggs,” George reflects, adding that the beef industry seems to have a better handle on dealing with plant-based competitors where the dairy industry is playing catch up.

Differentiating Oregon Dairy’s milk with “mooore omega 3”, provides new ways to reach consumers with positive messages about the benefits of milk — things you just can’t get from plant-based lookalikes.

For Oregon Dairy, the bottom line in this first-ever product is to provide the same great milk from the same great cows at the same great price with the same local story, the same great health information – but now with a little more to show and tell.

The marketing is so fresh, Jon and Curvin Hurst don’t have a handle yet on how much their sales have increased, except that the omega 3 message dovetails with the trend they already see of consumers buying the higher fat milks.

“Whole milk sales, in general, are higher,” says Jon. “We have seen that shift increase in the last two years. Whole milk is number one now.”

That trend made this possible, because without the fat, there’s no omega 3.

Cousins Maria Forry and Jon Hurst demonstrate how shoppers can instantly pull up the video about Naturally Better Omega 3 Oregon Dairy Milk when scanning the QR code on the bottle cap with a smart phone.

At the store, the staff is trained to answer questions, the QR codes are on the bottle caps, the omega 3 milligrams are on the new labels, the ‘Don’t forget mooore milk’ signage is up with information about omega 3 health benefits, and free milk giveaway contests have been done on facebook, along with celebratory videos launching the message.

Much planning went into the launch, which they never dreamed would happen during a pandemic.

But that really doesn’t matter.

“We are already hyper-local, and now we have this extra step to further differentiate our milk,” says Jon. “As always, our story, even this new story, starts with the cows. Yes, we are proud of our milk.”

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Did you get a ‘Dean estate’ demand letter from ASK LLP? Respond with this simple, approved ‘Declaration’

Posted on December 20, 2020 by Agmoos

By Sherry Bunting, Farmshine, December 18, 2020

HARRISBURG, Pa. — U.S. Dairy producers and haulers who received letters from ASK LLP — the Dean Foods estate trustee seeking money back from producers and haulers paid prior to Dean’s bankruptcy filing Nov. 12, 2019 — should not pay, but will need to act on those letters. Many of the letters were received right before or after Thanksgiving and had deadlines of December 19 or 24.

Dairy producers and milk haulers have an air-tight defense, and now there is a simple one-page Declaration Letter any producer or hauler from any state can use as their response to ASK LLP. Explanation and form are downloadable at the Pa. Milk Marketing Board (PMMB) website at www.mmb.pa.gov or call the PMMB at 717-836-3115. (See below also.)

The Declaration Letters — one for producers (here at this link and pictured below) and one for haulers (here at this link) — were designed by PMMB chief counsel Doug Eberly — working with the state Attorney General’s office and verbally approved by ASK LLP for use by producers and haulers in all states.

“Please, please, please complete this Declaration Letter because it gets you off the hook. You will complicate matters if you don’t send them back,” said PMMB chairman Rob Barley in a Center for Dairy Excellence industry conference call December 10. “It will release you from this if you fill it out. We know it is an inconvenience, but if you don’t fill out the Declaration, you could risk losing that money.”

With hundreds of farmers on the Dec. 10 call, Eberly and others gave updates and answered questions. Here’s what you need to know:

1. Dairy farmers and milk haulers have an air-tight defense.

2. The Declaration Letters developed by PMMB for use in all states demonstrate this defense. Just fill in the blanks about how often milk was picked up and how long you shipped milk to Dean Foods, sign it and email or fax it back to ASK LLP.

3. The Declaration describes how payments for milk and transport are “ordinary course” of business.

4. The legal letters sent by ASK LLP to dairy farmers and haulers are ‘avoidance claims.’ These arise when a business nears the end of a bankruptcy proceeding. All payments made to creditors — including vendors and suppliers — in the 90 days prior to filing are liable for recovery, unless the recipient can show the payments they received were not preferential.

Eberly explained the theory is that some creditors of Dean Foods could have had bargaining power to get money pre-bankruptcy that was not available then to other creditors. This is known in bankruptcy law as “trustee avoidance.”

Bottomline: “ASK needs some kind of documentation from you because they have an obligation to the bankruptcy court to show — pursuant to the bankruptcy code — the things they are charged with doing as the trustee have been done,” said Eberly.

“Farmers kept shipping milk in good faith and kept getting paid for the milk in order for Dean to stay in business,” said Eberly. “If you are a producer or hauler, you received payments in ordinary course of business with Dean. They picked up your milk every day or every other day or you shipped it to them … and they paid you twice a month as the Federal and State Milk Marketing Orders specify. We wrote this in the Declaration that you can fill out, sign and send back to ASK LLP. Doing this, you will demonstrate to the trustee that you do not owe this money back because you were not paid in any preferential way when you got paid.”

In addition to the state Attorney General’s office, PMMB worked with the Pa. Secretary of Agriculture, Center for Dairy Excellence, American Farm Bureau and organizations and individuals from other states.

“ASK LLP has taken a lot of heat on this, and they want to get this behind them because farm groups came together to back the farmers,” said Barley. “We’ve worked with anyone who is able to help as we reached out to other states and they reached out to us and this helps them as well. We are unique to have PMMB in Pennsylvania, and this is a time it has shown brightly to have this in Pennsylvania.”

Eberly noted the insurance bond held by Dean, as is law in Pennsylvania, has already been exercised during the bankruptcy to pay producers, so it would not have been available to help farmers in this situation.

Pa. State Representative Frank Ryan of Lebanon County was also on the call. He specialized in bankruptcy as a certified public accountant before being voted into the state legislature. “These types of ‘demand letters’ are common in bankruptcies,” said Ryan. “They are trying to determine a ‘preference period’. I can’t imagine that any dairy producer got any preference payment or was treated better than someone else (ahead of the bankruptcy).”

Ryan gave an example: “Say I am owed money by Dean for services (as a CPA) on a 90-day invoice. And say you as a farmer did a contemporaneous exchange of something of value (milk) for payment and you are paid every 14 days. You get preference over me. That’s ordinary business. But, if Dean paid me ahead as a CPA for a 90-day invoice instead of you for that contemporaneous exchange of milk for payment, then the trustee would come back to me for payment.

“The Declaration Letters are intended to help producers demonstrate that they do not have to pay that money back,” he said.

If someone went ahead and paid the settlement offer in the ASK LLP letter, Ryan said it may be difficult to get that money back. Using the Declaration and hiring an attorney might be successful to get a settlement payment back. American Farm Bureau and others are looking into this to determine if any producers paid the settlement offer in the letter.

Specific questions and answers handled in the group call Dec. 10 include:

Q. Do the documents on the PMMB website at www.mmb.pa.gov only apply to Pennsylvania, or can other farms from other states send them in?

A. “It is very important that everyone know about these forms because farmers and haulers from other states can use them,” Barley answered.

“We did not make these forms PA-specific,” said Eberly, noting that he has talked with folks from the Kentucky Dairy Development Council, Vermont Attorney General’s office, Michigan Department of Agriculture, and AgriVoice on behalf of several entities in Tennessee.

Q. If I filed a critical vendor contract with the bankruptcy court to be paid during the bankruptcy, is that enough to prove I did not get preferential payments before the bankruptcy?

A. Short answer: No. Eberly stated he is not giving legal advice; however, the critical vendor agreements signed by dairy producers and haulers were standard forms that do not address the points ASK is asking for. On the other hand, the Declarations PMMB got approved are specific to the way milk plants do business with farmers and haulers.

“If you are a dairy producer, the way you prove you did not get preferential payments is you either send all the records that ASK LLP has asked you for, or you send in the Declaration Letter we put together to take care of it. This Declaration Letter is the most efficient way to do that,” said Eberly.

Q. Do the Declaration Letters PMMB provided need to be submitted by an attorney?

A. The Declaration Letter is designed in a way that a dairy producer or hauler can simply fill it out and send it back by email, fax or postal mail — on their own.

Eberly explained that while a person or corporation can’t really represent itself in bankruptcy court, only through an attorney, these Declaration Letters are not going directly to the bankruptcy court. They are going to the law firm (ASK LLP) and will be part of what they show as fulfilling their obligation with the court as trustee.

Q. Who, specifically should the Declaration be sent to?

A. At the top of every demand letter received from ASK LLP is the name, phone number and email address for the paralegal to which your file number has been assigned. Different letters have different names their ‘matter’ has been assigned to. Email your signed Declaration to that person, said Eberly.

There is also a fax number on your packet. That number is 651.406.9676. “Be sure to put the fax to the attention of the paralegal that has been assigned to your particular file,” said Eberly. (If using postal mail, get delivery confirmation or certify the letter.)

Q. Who should sign the Declaration?

A. Whomever has authority to sign on behalf of the farm or hauling business — whether as a single-family sole proprietor, multi-owner LLC or incorporated business — should sign the Declaration.

In general, said Eberly, if three members of an LLC sign other documents for the farm, then they would sign this. If one person for an incorporated farm signs other types of documents, then that’s the person who would sign this. If a farm received separate letters for separate farm locations, return a Declaration Letter in response to each letter received from ASK LLP.

If more than one person legally signs documents for the farm, just cross out ‘I’ and write in ‘we’ with a pen. Do not retype the Declaration, according to Eberly.

Q. Do I need to send anything with the Declaration?

A. The PMMB’s understanding is that filling out the one page Declaration Letter, alone, is sufficient.

Q. What happens if we do not respond to the letter from ASK LLP? Is it possible the entire claim will be dropped on its own?

A. Everyone on the call stated that ignoring the letter is unwise and risky.

“I would caution you not to ignore the letter,” said Rep. Ryan. “Absent the response with this Declaration, it will be in the hands of the court. If you ignore it, and they determine you owe the money, you will get an immediate judgment against you and they (the bankruptcy court) have incredibly powerful ways to get those funds.”

With the Declaration available, there’s no reason to ignore this. Dairy producers and haulers have an efficient, simple way to take a big step to put this behind them.

Q. What is the deadline to submit the Declaration Letter?

A. Submit it by the date on your letter from ASK LLP. Some say Dec. 19, others Dec. 24. Whatever your date is, submit your Declaration by that date. As Dean estate trustee, ASK LLP, will begin filing these claims with the bankruptcy court in January.

Q. Do I need to submit a Declaration Letter if I provided a paralegal with their requested information already?

A. “I would call the paralegal and ask if they had a chance to look at it and make a determination, and I would also submit the Declaration Letter just to be on the safe side,” said Eberly.

Q. What should lenders and others do who received assignments from milk checks direct from Dean Foods if they received these letters?

A. Since everyone is operating under the belief that producers won’t owe money back, then their assignees should not owe money back either because the assign would not have been paid except for the farmer getting paid.

Eberly noted that lenders have access to legal people and accountants to answer questions for them, but producers who had money paid directly to someone out of their milk check should contact them to see if they got a letter and tell them what is being done. Contact the paralegal listed on the ASK letter and let that person know your assignee got a letter and to piggyback your Declaration to cover them as an assignment from your milk check.

A longer version of this article appears here.

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Announcing Vilsack as Ag Sec pick, Biden admits: ‘He helped develop my rural plan’

Posted on December 18, 2020 by Agmoos

Tom Vilsack is pictured here testifying before the Senate Ag Committee in spring 2019 announcing ‘It’s time to get to net-zero.’ He was testifying then as a dairy checkoff executive for DMI serving as president and CEO of USDEC and defacto leader of DMI’s Innovation Center. This week he was officially announced by President-Elect Joe Biden to come back for another term as U.S. Agriculture Secretary, where ‘It’s time to get to net-zero’ is the Biden rural plan Vilsack helped develop while pulling a $1 million salary from mandatory dairy farmer checkoff. Photo by Sherry Bunting

By Sherry Bunting, republished from Farmshine, Friday, December 18, 2020

BROWNSTOWN, Pa. — President-elect Joe Biden this week officially nominated former Iowa Governor and former U.S. Agriculture Secretary Tom Vilsack, a lawyer by trade, to return as Ag Secretary in his administration. This nomination will likely be a fast walk through Senate confirmation, given the supportive words this week from American Farm Bureau and prominent Ag Senators from both sides of the aisle.

But some responses from a few organizations and grassroots efforts, as well as some Senators, are less than supportive or outright aiming to stop the confirmation. Some, because they see the choice as one that does not make diversity, equality, and feeding programs a priority. Some, because he talked about antitrust issues but did nothing when Secretary under Obama. Others, because they remember Vilsack’s role in removing whole milk (and 2% milk and 1% flavored milk) from school menus and prohibiting it from a la carte offerings.

Still others, are being more methodical in thinking through how to deal with a third round of Secretary Vilsack.

Throughout the Biden-Harris campaign for the presidency, Biden made it clear that his slogan — Build Back Better — had as much to do with climate change and new farm and energy policy as anything else. In several stump speeches, Biden drew from the rural policy he admitted this week was in part developed by Vilsack, himself, to talk about paying farmers to put land in ‘land banks’, now being referred to as ‘conservation’ and to plant crops ‘we want you to grow,’ now being called ‘cover crops.’

The terms ‘conservation’ and ‘cover crops’ are familiar terms that put farmers at ease. They plant cover crops already to stabilize ground between main crops and to produce grazing or harvested forage for dairy cows and livestock. Farmers know what payments to idle land can mean for landlords retired from farming. But what does it mean for dairy farmers renting that land? I guess we will soon find out.

Here’s the deal. While introducing Vilsack as his Ag Secretary pick, Biden stated publicly that, “(Vilsack) helped develop my rural plan for rural America in the campaign, and he now has the dubious distinction of having to carry it out,” said Biden with a laugh. “It’s a good plan that includes making American agriculture the first in the world to achieve net zero emissions and create new sources of income for farmers in the process.”

Wait a minute, Tom Vilsack helped develop president-elect Biden’s rural plan for rural America while he was being paid a million dollar salary through mandatory dairy farmer checkoff?

When farmers have asked him to say even one positive word about bringing whole milk back to schools during his private citizen tenure with producer-funded dairy checkoff, the response from DMI was: ‘Sorry, we can’t lobby on government policy.”

But did we just hear Biden properly? We did. He said the top-paid DMI executive Tom Vilsack “helped develop” government farm policy for a partisan presidential campaign candidate who is now president-elect Biden. This policy at the Biden campaign website states ‘the Green New Deal is the framework’. It is policy that aligns directly with what the global, multinational food corporations want. These companies pay membership into the U.S. Dairy Export Council (USDEC) of which Vilsack was president and CEO since January 2017.

In fact, as Biden and Vilsack shared the podium Tuesday, when the Ag Secretary pick was announced officially, they described a USDA and rural plan that fits within the World Economic Forum’s Great Reset (which also uses the Build Back Better tagline).

At the core of the Great Reset are the same huge global food manufacturers and purveyors who are part of USDEC (adding their membership fees to the mandatory producer checkoff funds to have influence). The USDEC, which Vilsack oversaw the past four years is joined at the hip with DMI’s Innovation Center for U.S. Dairy, which was founded by checkoff in 2008 when then Sec Vilsack struck Memorandums of Understanding between USDA and DMI to chart a course for sustainability and to start the low-fat dietary indoctrination of children via GENYOUth.

This train of globalism has been rolling. It slowed down a bit the past four years when the U.S. withdrew from the Paris Climate Treaty and nixed the Trans Pacific Trade Partnership, called out China, and revamped NAFTA.

But the consolidating globalist food transformation train does keep rolling no matter which political party is in power.

“The one bipartisan thing getting done in Washington is this: their ability to work on and move forward the globalization of food and agriculture,” said Mike Eby, a Gordonville, Pa. farmer and executive director of Organization for Competitive Markets (OCM).

He notes the concern of OCM and others that Vilsack has a track record of doing nothing on the antitrust and anti-competitive market issues in agriculture, that he could ignore checkoff referendum requests that will be brought to USDA with the appropriate number of signatures in the next year, just as he ignored the law while Secretary and did not forward the annual reports about the dairy checkoff to Congress for four years. Another concern is that Vilsack’s return to USDA brings an entrenched globalization end-game with no path forward for country of origin labeling.

“Under Republicans, we saw a push toward consolidation, but under this Democratic rural policy developed by Vilsack and now to be fulfilled by Vilsack, we see the choke point at the center of food production through qualifications of standardization determining who can participate and how,” says Eby, who also serves as chairman of the National Dairy Producers Organization (NDPO) and on the Grassroots PA Dairy Advisory Committee that is active in the Drink Whole Milk 97% Fat Free campaign.

“With a net zero or environmental choke point in place, and specific benchmarks, consumers may only have the ability to purchase from the middleman that says the milk or beef meets the ‘net zero’ standard,” Eby continues. “It is a linear goal, either way, that makes it difficult for competitive markets and independent producers to survive.”

Vilsack’s own words in accepting the President-elect’s nomination to return him to his former post as Ag Secretary paint a bit of a picture: “One of our first orders of business is to do all that is possible at Department to aid in the pandemic response, reviving rural communities and economies, addressing dire food shortages and getting workers and producers the relief they need to hang on and come back stronger,” he said.

But read what he said next: “When we emerge from this (pandemic) crisis, we will have an incredible opportunity before us — to position U.S. agriculture to lead our nation and the world in combating climate change. Reaping new good-paying jobs and farm income will come from that leadership.”

He touted Abraham Lincoln’s words when he first established the USDA. Lincoln called it “The People’s Department.”

But in essence, Tom Vilsack is part of an elite class that believes they know best for the people. Through pandemic and climate fear, they are counting on the masses to be scared into submission about food and jobs so systems for the food transformation can be redesigned the way the global organizations, billionaire tech sector investors and multinational companies are planning.

The agenda was crystallized and set in motion in the 2007 to 2009 time period. First, importers were given influence in dairy and beef checkoff messages by including them in the checkoff deduction. Next, the MOU’s between USDA and checkoff etched in stone a path of transformation that throws competitive markets and country of origin labeling to the side in favor of farmers conforming to certain standards. It all begins with things farmers already do and as they get comfortable, the vice their own money places them in starts to squeeze.

The agenda was perpetuated when Dietary Guidelines – the tip of the food transformation iceberg – were adopted in 2015 without full consideration of the science on fats. Again for 2020, the low fat and fat free vegetarian style eating patterns continue, even though current Secretary Sonny Perdue has not yet rubber-stamped them. Vilsack will, of course.

With the low-fat / fat-free emphasis of the DGAs, the new Bioengineered labeling rules, and the FDA Nutrition Innovation Strategy, the dilution of animal proteins with plant- and lab-based lookalikes has an easy road.

Without country of origin labeling, globalized food supply chains are created and sustained to give a few large multinational corporations control.

With dairy and beef checkoff programs continually funded by farmers with importers paying something to be at the table to douse domestic marketing, these global companies are able to sit at a secret, or proprietary table where pre-competitive ‘innovations’ are hatched and the ‘choke points’ of farming practices and production standards in “producer programs” like FARM are decided.

Vilsack’s replacement to head the USDEC (as well as defacto head of the various global partnerships that make up the Innovation Center for U.S. Dairy) is Krysta Harden. DMI announced this week that Harden will be promoted to Vilsack’s vacated post from her current role as DMI’s executive vice president of global environmental strategies.

Harden and Vilsack worked together on the Net Zero Initiative for two of the past four years, and they worked together before that at USDA. When Vilsack was previously Ag Secretary under President Obama, Harden was installed as Deputy Undersecretary for 2013 through 2016.

One thing Biden said Tuesday that really sinks in: “I asked (Tom Vilsack) to serve again in this role because he knows the USDA inside and out. He knows the government inside and out. We need that experience now.”

He might have easily added that Vilsack knows China inside and out as well. While USDA Secretary, Vilsack participated in the joint commission on commerce and trade between the U.S. and China, meeting in 2015 in Chicago. He flowed that right into USDEC with the dairy industry global supply chain companies and will flow them right back to the USDA as he goes back to being Secretary again.

Yes, dairy and agriculture relationships with China are important, but so too is the concept that free trade needs to also be fair trade. Global supply chains don’t care whether U.S. family farms make it. They have an agenda and are using climate-change ‘philanthropy’ to achieve it.

Biden and Vilsack talked about new possibilities, new revenue, new jobs, via a ‘new’ charter for USDA as a climate agency.

With a four-year interruption in the so-called climate agenda seeking farm, food, and energy transformation that was begun 12 years ago, we can expect things to move fast – very fast – on the globalization and transformation of food once Vilsack resumes his former USDA post, especially if the Democratic party gains control of the Senate in addition to already having control of the House and the incoming office of the President of the United States.

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Milk producers, haulers, MUST respond to ‘Dean’ letters; PMMB Declaration Letters can be used by those affected in ALL states

Posted on December 11, 2020 by Agmoos

By Sherry Bunting

There is good news for dairy farmers and milk haulers who received the notices of intended litigation and settlement offers from ASK LLP, a Minnesota law firm representing the Dean Foods estate. The Pennsylvania Milk Marketing Board (PMMB), working with the State Attorney General’s office, and the American Farm Bureau, working through internal and external attorneys, are heroes in bringing resolution to this troubling issue reported on extensively here at the AgMoos blog as well as in Farmshine and at the Milksheds Blog.

BUT… Don’t ignore the letters. Dairy producers and haulers will still need to act on these letters.

The good news is, they can simply fill out the one page DECLARATION LETTER developed by PMMB’s chief counsel Doug Eberly with help from the state Attorney General’s office and verbally approved by ASK LLP.

According to Doug Eberly, chief counsel for PMMB, the Declaration Letters were approved by ASK LLP after a conference call last Friday and can be used by affected dairy producers and haulers from ALL STATES — not just Pennsylvania. There are two separate declaration forms – one for producers and one for haulers.

An explanation of the forms, with instructions can be read and downloaded at: Avoidance Claim Declarations Explanation.pdf (pa.gov) .

A copy of the Producer Declaration Letter appears below, and it can also be downloaded from this direct link: Farmer Declaration Nov 12.pdf (pa.gov) .

A copy of the Hauler Declaration Letter can be downloaded at this direct link: Hauler Declaration November 12.pdf (pa.gov) .

“Please, please, please complete this Declaration Letter because it gets you off the hook, you will complicate matters if you don’t send them back,” said PMMB chairman Rob Barley in a Center for Dairy Excellence industry conference call December 10. “The (Declaration Letter) will release you from this if you fill it out. We know it is an inconvenience, but if you don’t fill out the Declaration (or handle this your own way with your own attorney), you will risk losing that money.”

Barley said it was the hard work of many people to bring this to resolution.

“We emphasize that it is vitally important that farmers and haulers return the completed declarations to ASK LLP as soon as possible,” the PMMB urged in a press statement Wednesday, Dec. 9, two days after releasing the explanation and the forms at its website https://www.mmb.pa.gov/

American Farm Bureau has sent a letter from attorneys to ASK LLP demanding the letters about preference claims be reversed and withdrawn within 10 days. This an important backstop to the PMMB action in order to be sure no farmers or haulers pay money the Dean estate has no right to. Farm Bureau called the move a “predatory shakedown in legalese.”

Attorneys for Farm Bureau have threatened legal action against ASK LLP if the letters are not withdrawn. However, there is no indication that ASK LLP will withdraw the letters, nor that they can withdraw them because of their trustee obligation to the bankruptcy court.

PMMB’s Eberly says he will be glad when every affected farmer has sent in the Declaration and receives absolution back in writing from the Dean estate trustee ASK LLP.

During a Center for Dairy Excellence call Thursday (Dec. 10) with hundreds of farmers on the line, Eberly and others from the PMMB board and staff gave an update and answered questions.

Here’s what you need to know:

1. Dairy farmers and milk haulers have an air-tight defense.

2. The Declaration Letters developed by PMMB for use in ALL STATES show this defense by filling in the blanks regarding how often your milk was picked up and how long you shipped milk to Dean Foods.

3. The Declaration Letter describes how milk payments are “ordinary course” of business.

4. The PA Milk Marketing Board made the Dean trustee letters a priority for the board and the staff to get taken care of, and they have been working as fast as they can to do so.

5. The letters received by dairy farmers and haulers are ‘avoidance claims.’ These arise when a business files for bankruptcy protection. All payments the business made to creditors – including vendors and suppliers – in the 90 days immediately prior to filing are liable to be recovered in order to be used to pay other creditors.

PMMB chief counsel Doug Eberly stated that the PA State Attorney General’s office has the expertise on bankruptcy law and has been involved in the Dean Foods bankruptcy for 13 months because of the seven Dean Foods milk plants that are regulated by PMMB to receive milk from PA farms. They have explained the situation and they have interceded in a way that will help all affected dairy farms and haulers from ALL STATES.

Eberly explained the theory behind these letters from ASK LLP is that some creditors of Dean Foods could have had bargaining power to get money from Dean pre-bankruptcy that was not available then to other creditors.

The Declaration Letters producer can send in show that the payments they (and haulers) received were NOT preferential but represented “ordinary course of business.”

“Farmers kept shipping milk in good faith and kept getting paid for the milk in order for Dean to stay in business,” said Eberly.

“If you are a producer or hauler, you received payments in ordinary course of business with Dean. They picked up your milk every day or every other day or you shipped it to them every day or every other day and they paid you twice a month as the Federal and State Milk Marketing Orders specify,” Eberly explained. “We wrote this in the declaration that you can fill out, sign and send back to ASK LLP – without all of the other things the letter you got was asking for.”

BOTTOM LINE, said Eberly: “ASK needs some kind of documentation from you because they have an obligation to the bankruptcy court to show — pursuant to the bankruptcy code – the things they are charged with doing have been done.”

Sending the Declaration Letter back to ASK LLP shows the unsecured creditor committee that as a farmer or hauler, “you have demonstrated to the trustee that you were paid in the ordinary course of business and do not owe this money back, because you weren’t paid in any preferential way when you got paid.”

PMMB chairman Barley, thanked Eberly for the work he has done. “He took the lead on this and reached out to whoever he needed to and brought this to a quick resolution,” said Barley, noting that the PMMB worked with the state Attorney General’s office, the Secretary of Agriculture, Center for Dairy Excellence, American Farm Bureau and organizations and individuals from other states.

“ASK LLP has taken a lot of heat on this and they want to get this behind them because farm groups came together to back the farmers (and haulers),” said Barley. “We’ve worked with anyone who is able to help as we reached out to other states and they reached out to us and this helps them as well. We are unique to have PMMB in Pennsylvania, and this is a time it has shown brightly to have this in Pennsylvania.”

Eberly noted that the insurance bond held by Dean in the state of Pennsylvania is gone. It has already been exercised during the bankruptcy to pay producers, so it would not have been available to help farmers in this situation.

Eberly’s phone rings a lot these days, but he is diligent to get back to everyone. His phone number is on the explanation page with the Declaration Letters and he freely gives it out.

“You can call me at 717.836.3115. I am getting a lot of phone calls but I will get back to you as soon as I can,” he said.

BELOW ARE SPECIFIC QUESTIONS AND ANSWERS handled on the group call Dec. 10. (Recording is also available here)

Q. If I filed a critical vendor contract with the bankruptcy court to be paid during the bankruptcy, is that enough to prove I did not get preferential payments before the bankruptcy?

A. No. Eberly stated he is not giving legal advice; however, the critical vendor agreements signed by dairy producers and haulers were standard forms that had ways to modify them so they don’t address the points ASK is asking for. The declaration forms PMMB has gotten approved for farmers and haulers are specific to the way milk plants do business with farmers and haulers.

“If you are a dairy producer, the way you prove you did not get preferential payments is you either send all the records that ASK LLP has asked you for, OR you send in the declaration letter we put together to take care of it, and this declaration form is the most efficient way to do that,” said Eberly.

Q. Do the Declaration Letters PMMB provided need to be submitted by an attorney or how does a dairy producer or hauler submit them?

A. The bottom line is that the PMMB with the help of the Attorney General’s office worked with ASK LLP to set up these Declaration Letters in a way that a dairy producer or hauler could simply fill it out and send it back by email, fax or postal mail – ON THEIR OWN.

Eberly explained that while a person or corporation can’t really represent itself in bankruptcy court, only through an attorney, these Declaration letters are NOT going to the bankruptcy court (on their own). They are going to the law firm (ASK LLP) that is trustee for the Dean estate and will be part of what ASK shows as fulfilling their obligation with the court on seeking preferential payments.

As for who signs the Declaration Letter? Anyone with authority to sign something on behalf of their farm or hauling business – whether as a single family sole proprietor, multi owner LLC or incorporated business – can sign the Declaration Letter.

“It never hurts to have a lawyer to check with to make sure what you are doing is the right thing to do,” said Eberly. But in general, he said, if three members of an LLC sign other documents, then they would sign this. If one person for an incorporated farm signs other types of documents on behalf of the farm, they would sign this. If a farm received separate letters for separate farm locations, return a Declaration Letter in response to each letter received from ASK LLP.

Q. Do the documents on the PMMB website at www.mmb.pa.gov only apply to Pennsylvania, or can other farms from other states send them in?

A. PMMB chairman Barley said “It is very important that everyone know about these forms because farmers and haulers from other states can use them. We want to get this information out to every farmer or hauler who received a notice from Dean through ASK LLP so they can use this form. We have shared the forms with other state organizations and with Farm Bureau.”

Eberly earlier stated in an email to Farmshine that ASK LLP will accept these Declaration Letters from producers and haulers in ALL STATES, even though PA Milk Marketing Board is the entity to have constructed them, working with the Attorney General’s office and ASK LLP.

“We did not make these forms PA-specific,” said Eberly, noting that he has talked to the Kentucky Dairy Development Council, the Vermont Attorney General’s office, the Michigan Department of Agriculture, and AgriVoice on behalf of several entities in Tennessee. He said that private individuals have called and are sending the Declaration Letters around and that Farm Bureau is contacting people as well.

Q. In talking with ASK LLP, is there a way to get a list of all the producers and haulers who got Avoidance Claims letters from ASK so they can be directly contacted and informed to use the Declaration Letters?

A. Carol Hardbarger, PMMB executive secretary, said that their office has a spreadsheet of producers who shipped milk to the former Dean Foods that represented 125 to 150 names. She said nationwide the number could be 1000, but that they don’t have such a list. She said it is possible that some producers and haulers many have already paid the settlement offer in the letters from ASK LLP.

“We can send information out to individuals on the list we have for Pennsylvania, but we don’t have names from other states,” she said.

PA Representative Frank Ryan (a former CPA who specialized in bankruptcy, now a state lawmaker) noted that a list of all creditors, and those the trustee is asking for money back would be at the Dept. of Justice website. He said a state Attorney General’s office would be able to access that list to determine who needs to be notified in their state.

Meanwhile, many efforts are being made to get the word out through farm media and word of mouth.

Rep. Ryan stated that while he is not an attorney, he did specialize in bankruptcy as a CPA before being voted into the PA state legislature. “These types of ‘demand letters’ are common in bankruptcies,” said Ryan. “They are trying to determine a ‘preference period’. I can’t imagine that any dairy producer got any preference payment or was treated better than someone else (ahead of the bankruptcy).”

Ryan explains: “Say I am owed money by Dean for services (as a CPA) on a 90-day invoice. And say you as a farmer did a contemporaneous exchange of something of value (milk) for payment and you are paid every 14 days. You get preference over me. That’s ordinary business. But, if Dean paid me as a CPA instead of you for that contemporaneous exchange of milk for payment, then the trustee would come back to me for payment.”

He gave this example to further show that it is hard to imagine a case where a dairy producer, or milk hauler, would be liable for paying back this money because they continued to ship milk and be paid.

“In all likelihood, a farmer or hauler should not have to pay any money back. The Declaration Letters are intended to help those producers demonstrate that they do not have to pay that money back,” he said.

Now, if someone went ahead and paid the settlement offer, Ryan said it may be difficult to get that money back. But he said using the Declaration Letter and hiring an attorney to get it back might be successful.

Q. Who, specifically should the Declaration Letters be sent to?

A. At the top of every demand letter sent by ASK LLP is the name, phone number and email address for the paralegal to which your file number has been assigned. That is who you email your signed Declaration Letter to. If using postal mail, get proof such as delilvery confirmation or certify the letter. There is also a fax number on your packet. That number is 651.406.9676. Be sure if faxing to put the name of the paralegal assigned to your file on cover sheet with your Declaration Letter when faxing. Your Declaration Letter has a spot to fill in your File Number so they can handle your case quickly.

Eberly explained that the letters from ASK LLP to producers and haulers “have a paralegal assigned to your file. That is the name and email address to send to, and it will be different for different farmers.”

Eberly notes that some farmers who don’t have email can fax the Declaration letter back. The ASK LLP fax number is on the letterhead. It is 651.406.9676. Be sure to put the fax to the attention of the paralegal that has been assigned to your particular file, says Eberly.

“On your letter from ASK, it will say ‘this matter is assigned to’ and then a name of a person and their phone number and email. This is the person you want to get your Declaration Letter to,” said Eberly. “Get it to the person you are assigned to so that you hear back faster. Until you hear back from them, you will still be wondering about this, and we want to get you to not wondering as quick as we can.”

Q. Do I need to send anything with the Declaration?

A. Eberly said it is their understanding that the Declaration Letter, itself, is sufficient.

Q. Should the dairy producer retype the Declaration to reflect their operation or just fill in the blank? For example, should we retype to change “I” to “We”

A. According to Eberly, there is no need to retype. In fact, don’t retype. Just cross out “I” and write above it “We”. He said “do it with a pen.”

Q. What do I do if I sold milk to Dean for 30 years through a cooperative and 7 years as an independent? Which number do I put down for the number of years?

A. Eberly said in a case like that, just put what is recent. If you shipped milk for the past 7 years as an independent producer and the letter is addressed to you, enter 7 years on that line. “Seven years is good enough. As a dairy farmer, you are not in the position to bargain for special treatment (prior to bankruptcy) so what you are showing in this Declaration is that your treatment in those 90 days before Dean filed bankruptcy was no different than your treatment by Dean at any other time in the course of your relationship with Dean Foods.”

Q. What happens if we simply do not respond to the letter we received from ASK LLP? Is it possible the entire claim will be dropped on its own?

A. Everyone on the call from Eberly to Barley to Ryan stated that ignoring the letter is unwise and risky. “I would caution you about not answering the letter,” said Rep. Ryan. “Absent the response with this Declaration Letter, it will be in the hands of the court. If you ignore it, and they determine you owe the money, you will get an immediate judgement against you and they (bankruptcy court) have incredibly powerful ways to get those funds, so I caution you not to ignore the letter.”

With these Declaration Letters developed by PMMB and approved by ASK LLP, there’s no reason to ignore this. Dairy producers and haulers have an efficient way to take a big step to put this behind them.

Q. Does the American Farm Bureau have standing to bring legal action if Dean does not meet their demand to retract these claims?

A. No one on the call wanted to really address that, except to say that in Pennsylvania, even with the state Attorney General’s office being involved in navigating this issue, a state AG can only take a case and pursue it under certain circumstances.

Instead of waiting for some sort of court action when bankruptcy courts have so many powers we don’t understand, the easiest thing to do to put this behind us is fill out the Declaration Letter and be done with it. Obviously, if producers and haulers do this, and end up still having a problem, that meets a higher threshold for others to get involved in representing farmers at a higher level.

“If you fill out the Declaration Letter and send it back in, that will provide your defense and you should not need further action,“ said Barley.

Q. What is the deadline to submit the Declaration Letter?

A. Best answer is: Submit it by the date on your letter from ASK LLP. Some packets say December 19, others December 24. Whatever your date is, submit your Declaration by that date.

That said, Eberly noted that for those wanting their attorney to look at it, they do have a little flexibility on that date because the trustee (ASK LLP) will not begin filing these claims with the bankruptcy court until January, and those they believe to be farmers will not be in the first group they file.

You see, this is why Declaration Letters are needed and must be sent back quickly. ASK LLP as trustee will file with the court any entity that was paid in that 90 days for the bankruptcy court to take action against. Your Declaration Letter protects you and it protects the Dean estate trustee by showing that they contacted you about the money you were paid and you exercised your defense in this efficient manner.

“You are not being asked to compile all the records that were in that letter from ASK, you just have to download this form, fill it out and sign it and email or fax it back and be done with it,” said Eberly.

Q. Do I need to submit a declaration letter if I provided a paralegal with their requested information already?

A. “I would call the paralegal and ask if they had a chance to look at it and make a determination, and I would also submit the Declaration Letter just to be on the safe side,” said Eberly.

Q. What should lenders and others do who received assignments from milk checks direct from Dean Foods if they received these letters?

A. Since everyone is operating under the belief that producers and haulers won’t owe money back, then their assignees should not owe money back because the assign would not have been paid except for the farmer getting paid.

Eberly noted that lenders have access to legal people and accountants to answer questions for them. But if you are a producer who has money paid directly to someone out of your milk check, contact them to see if they got a letter and tell them what you are doing. Contact the paralegal listed on your letter and let them know that your assignee got a letter too and piggyback your Declaration Letter to cover them by having that conversation.

‘Vote’ Whole Milk School Lunch Choice: Comment to USDA by Dec. 28, 2020

Posted on December 7, 2020 by Agmoos

EPHRATA, Pa. – Want whole milk choice in school? Become a citizen for immune-boosting nutrition and comment at this link by Dec. 28, 2020: https://www.regulations.gov/comment?D=FNS-2020-0038-0001

Below is a sample comment, you can personalize in the official public comment section at this link https://www.regulations.gov/comment?D=FNS-2020-0038-0001 by Dec. 28, 2020:

Dear USDA,

We appreciate the flexibilities rule, but it does not go far enough to benefit the healthy choices of our school children. WHOLE MILK should be offered as a choice at school meals because children and teens in trials preferred whole milk 3 to 1 over low-fat milk, meaning they drank it and consumed the nutrients instead of discarding! Store sales of whole milk during the pandemic are up 14% (while other classes are down). Parents are choosing whole milk for their families because it is nutritious and offers better absorption of important fat-soluble vitamins and other immune-supporting advantages.

Research shows whole milk consumption among healthy children was associated with higher (immune-boosting) Vitamin D stores and lower body mass index, a 40% reduction in risk of becoming overweight! Children and teens love whole milk so they will drink it instead of throwing it away.

In fact, a high school/middle school trial in Pennsylvania last year showed that when all fat percentages of milk were offered, milk consumption grew by 65% and the volume of milk being wasted / discarded declined 95%!

Current rules and “flexibilities” don’t even allow schools to offer whole milk or 2% reduced fat milk a la carte. We want to see flexibility that allows children to choose 2% milk and whole milk, which is standardized to 3.25% fat, so they can benefit from the healthy nutrition they love instead of being limited to fat-free and 1% low-fat milks that they throw away. Students discard the fat-free and low-fat milk then buy drinks devoid of nutrition and sweetened with a combination of high fructose corn syrup and artificial sweeteners! At middle and high school levels, USDA rules allow the choice of caffeinated energy drinks — but not whole milk! That’s a win for big beverage and foodservice companies, but not for our children. Let the health of our children win with whole milk choice.

BACKGROUND: USDA Food Nutrition Services (FNS) published a proposed rule in the Federal Register Nov. 27 that would ‘maintain’ the flexibility for school meals related to milk, grains, and sodium.

For the milk portion, the proposed rule would make permanent the choice of flavored low-fat 1% milk in child nutrition programs — without waivers. Back in 2010, low-fat flavored milk was eliminated along with whole and 2% reduced-fat white milk. This rule is a small step to solidify the change made by USDA Secretary Sonny Perdue to at least provide schools with flexibility to allow the choice of 1% low-fat flavored milk in 2017. At that time, flavored milk in schools was required to be fat-free.

The recent new rule up for comment was issued as an administrative step to insure that USDA is complying with a 2018 court ruling that challenged these flexibilities. The ruling required a comment period for the rule. Schools currently have this flexibility temporarily in all USDA child nutrition programs through June 30, 2021, in response to the COVID-19 national emergency.

USDA says it is “committed to listening to and collaborating with customers, partners, and stakeholders to make these reforms as effective as possible, and encourages all those who are interested in school meals to share their comments and recommendations for improvement through regulations.gov.”

This is an opportunity for communities to respond and ask USDA for better flexibilities.

The Grassroots PA Dairy Advisory Committee and 97 Milk will post to Regulations.gov docket — again — the 30,000-name petition with hundreds of comments supporting the choice of whole milk in schools. As customers, partners and stakeholders in child nutrition programs, parents, teachers, school foodservice staff, farmers and community in general have a stake in what USDA allows and doesn’t allow as beverage choices in schools.

Here is the link to the full docket regarding the USDA school lunch flexibility rule https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&dct=PS&D=FNS-2020-0038

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UPDATE on Dean trustee letters demanding payment from farmers. Don’t pay. Gather records. Fight back.

Posted on December 3, 2020 by Agmoos

BREAKING UPDATE (events on Dec. 4 after this article was published): Farm Bureau issued statement, stands up for producers. Farm Bureau attorneys sent a letter to ASK LLP and Dean Estate seeking withdrawal of preference demand letters within 10 days. The Pennsylvania Milk Marketing Board (PMMB) is working with the State Attorney General’s office and ASK LLP to resolve avoidance claim settlement offers received by dairy farmers and milk haulers. PMMB says ‘be patient, don’t sign anything and don’t write any checks.’ PMMB expects to provide specific guidance to dairy farmers and haulers prior to the December 10 Dairy Industry Conference Call sponsored by the Center for Dairy Excellence. The call will be open to dairy producers outside of Pa. as well.

Don’t ignore these letters. But don’t pay the settlement offers. Sit tight. Gather records.

AUTHOR’S NOTE: I am not a lawyer, and this is not legal advice. This is more of ‘what we know now’ in a rapidly evolving story. The Pennsylvania Attorney General is involved. Other states are mobilizing to perhaps work together. USDA AMS Dairy Programs is now referring all inquiries to the Department of Justice. American Farm Bureau is taking action. Please know that as dairy farmers, you have produced milk that was paid for according to federal and state milk marketing laws, that provided nourishment to families and that has enabled the Dean Foods Company to continue to operate until it was sold. Without you and those payments to you, Dean would have had to abruptly close, and the estate would have nothing.

By Sherry Bunting, Farmshine, Dec. 4, 2020

BROWNSTOWN, Pa. — Most of the letters descended on dairy farms the day before and after Thanksgiving with due dates of December 19 or December 24. More were received this week, and it is expanding to include assignees. No, these are not Happy Thanksgiving and Merry Christmas John and Jane Q. Dairy Farmer. These are thinly veiled attempts at blackmail — demands to pay the Dean Foods Company estate a portion of milk checks from August 14 through November 12, 2019 in order to avoid being sued for much larger, scarier, sums of money.

ASK LLP, the St. Paul, Minn. law firm approved in September to be the Dean estate trustee, conjured up the ‘ghost of milk payments past’ to extort money from dairy farmers for the big bottler’s bankrupt estate by threatening lawsuits to reclaim payments to dairy farmers during what is known as the ‘preference’ period.

These are called ‘preference action recovery’ or ‘trustee avoidance’ claims. This is the legal basis for the action the letters threaten will occur if farmers don’t pay the ‘settlement offer’ or negotiate it with a satisfactory defense by the due date.

In layman’s terms, the claim is that a defendant farmer (Dean Foods creditor) could have received a pre-bankruptcy payment for milk that could have been a better deal than the ‘trustee’ would have divvied out.

Wrong. Federal and state law set forth dates and formulas for milk payments as a requirement for Class I beverage milk companies to operate. That money has already been spent by dairy farmers keeping cows fed and keeping lights on at farms already beleaguered by five years of marginal and below breakeven prices. No windfall there.

The intimidating letters show ways to assert a defense — through hiring a bankruptcy attorney and showing 15 to 18 months worth of invoices. But it’s cumbersome for farmers. They don’t invoice for their milk!

Of course, they want producers to just pay the settlement offer at a reduced rate, as stated in the letter, to avoid legal action commencing the week after the due date. (Don’t.)

Did I mention the due dates are December 19 for some; December 24 for others?

Did I mention farmers have 21 days from the date of the letter to respond with a defense and 30 days (now down to 14 to 20 days remaining) to sign the ‘settlement offers’ with checks payable to Dean Foods Company or risk – says the letter – paying amounts 5 to 6 times higher? People are still receiving these letters, given the Thanksgiving holiday and backlogged post offices. Some producers may not have opened them. The envelopes are non-descript.

In one example, a family milking 100 cows received a packet with a settlement offer of $20,000 placed next to the threat of paying over $110,000. Larger family farms face even larger sums. This is predatory intimidation to push farmers to send money that the bankrupt Dean estate is not entitled to. Yes, it is extortion.

So what happened? On the day before and after Thanksgiving, notices of Intended Litigation and Settlement Offers were received by dairy farmers from ASK LLP representing the Dean Foods Company estate. The action covers payments by the former Dean Foods to independent dairy farmers for raw milk sales from August 14 to November 12, 2019 — the 90 days prior to Dean’s filing on Nov. 12, 2019 for Chapter 11 bankruptcy protection and sale.

This is a little-known part of bankruptcy law where the estate trustee can go back 90 days before a filing to collect payments believed to be ‘preferential.’

Farmshine has confirmed letters were received by Dean Dairy Direct producers in numerous states — including Pennsylvania, Ohio, New York, Kentucky, Tennessee, and assuredly others.

The letters list payment transactions (on the Federal Order specified dates), a total claim amount the farmer will be sued for, and a settlement offer at about 15 to 20% of that amount due December 19 or 24, 2020 (depending on the date of the letter).

Under Southern Foods Group LLC, case number 19-36313 in the bankruptcy court of Houston, Texas, with Judge David R. Jones presiding, the Dean Chapter 11 reorganization is headed to an omnibus hearing scheduled for Dec. 11, 2020 and disclosure hearing Jan. 11, 2021. Debtor filed its Plan of Reorganization Nov. 30 as file number 3230 on the docket at https://dm.epiq11.com/case/dnf/info (The Milksheds blog offers additional happenings of context and perspective here.)

If you are a dairy farmer who received a ‘demand package’ from ASK LLP representing the Dean estate, don’t ignore this, but don’t panic, don’t pay anything, don’t sign anything, sit tight for a bit, get prepared by gathering records (milk statements, contracts) and know that many trustworthy, well-situated people are working on this.

These letters are an intimidating threat to see what ‘other people’s money’ the law firm can shake loose for the Dean estate after the fire sale in which the bulk of assets were sold to Dairy Farmers of America (DFA).

In an email Wednesday, DFA, a large supplier of former Dean plants they now own, indicated that they did not receive these legal preference action letters.

“As part of the Asset Purchase Agreement, and as a result of a broad release of claims against each other, Dean Foods released DFA from these potential claims,” a DFA representative stated. “Ultimately, we had no idea that the Dean estate was planning to make these claims against independent producers. It’s disappointing that they sould take this kind of aggressive action against hard-working dairy farm families who supplied them with milk prior to the filing.”

The cooperative indicated in a statement that it “DFA does not control the actions or decisions of Dean Foods in its bankruptcy liquidation and was not involved with the decision to pursue these claims.”

Among other cooperatives doing business with the former Dean plants, at least one regional cooperative executive confirmed receiving a letter six weeks ago for dairy ingredient sales (cream and condensed milk) during the 90-day pre-bankruptcy time-period. They have not agreed to nor negotiated any settlement, but they provided their volumes and documentation of these sales to ASK LLP through their bankruptcy attorneys — and are monitoring the situation.

This source also believes other regional cooperatives received letters pertaining to pre-bankruptcy raw milk and ingredient sales.

On Tuesday, we confirmed that a milk hauler received a letter, and at least two entities receiving “assignments” direct from a producer’s milk check have received letters. This goes deep, and it is getting deeper.

The letters mention two potential defenses in a separate “additional instructions” piece, urging producers to “make a copy of this letter and all enclosures to send to your attorney should you choose to defend this matter rather than settle and return the payments.”

Even the ‘instructions’ intimidate the dairy farmer to feel they might have some financial obligation to the Dean Estate (absurd).

The instructions state: “Under certain circumstances you may have a defense warranting settlement of this action at less than the settlement offer extended. We will be happy to consider your defense and ‘explore’ settlement.”

Media calls and emails to several undersigned representatives at ASK LLP have gone unanswered.

Questions posed to USDA AMS Dairy Programs have been met with a blanket response that they are looking into the situation and would be providing a general ‘official’ description of how Federal Orders govern payments for Class I milk in relation to producers showing ‘ordinary course of business’ defense. After all, USDA FMMO market administrators have the specified dates and regulations posted at each of the 11 FMMO websites, and the dates correspond with the payments made to producers as listed in these predatory preference action letters.

USDA has not confirmed nor denied whether market administrators received similar letters regarding payments Dean made to producer settlement funds in the pre-bankruptcy period.

Late Tuesday evening, USDA stated in an email that, “We’re forwarding all media inquiries on this matter to the Department of Justice press office.” This indicates the DOJ is potentially also looking at the concerns surrounding these predatory attempts to intimidate farmers into sending payments to Dean Foods.

In Pennsylvania, where over 100 dairy farmers are affected by the letters, the State Attorney General is involved. Pennsylvania has the added layer of Class I pricing regulation through the Pa. Milk Marketing Law enforced by the Pa. Milk Marketing Board (PMMB).

“The PMMB wants to make sure every Pa. dairy farmer is treated fairly,” states Rob Barley, chairman. “I have complete trust in the PMMB staff in consultation with the Attorney General that this will ultimately happen. We will do all we can in our power to ensure that it does.”

Expressing her concern for dairy farmers receiving these letters with a short time-frame for response at a difficult time, Carol Hardbarger, PMMB executive secretary confirmed late Monday that, “The Pennsylvania State Attorney General’s office is aware of these letters.”

Hardbarger noted that the PMMB board and staff sprang into action with a joint meeting Monday morning after learning about the legal actions over the weekend. They have been working on it ever since. She provided at Farmshine’s request a description of how payments to Pennsylvania farms by Pennsylvania-regulated plants are governed at the state level — in addition to Federal Order rules.

“Dairy farmers selling milk to a dairy processor and being paid per federal and state regulations is a paradigm that is ordinary course of business for the industry,” states PMMB chief counsel Doug Eberly. As with anything, he adds, there may be the odd deviation in that, but he can’t think of any leading to a trustee avoidance claim.

Both Eberly and Hardbarger stressed that the PMMB is working on this within the scope of their authority and working with the State Attorney General’s office as several producers in the eastern and western parts of the state have stepped forward to provide copies to PMMB of the legal packets they received.

More will be discussed as regards Pennsylvania producers at the upcoming Dairy Industry Conference call next Thursday, Dec. 10 where Eberly and Barley will speak.

Other state organizations are reaching out to Farmshine as they learn what Pennsylvania is doing. Even without a milk marketing board, producers and their organizations in other states can contact their Agriculture Secretaries or Commissioners, even lawmakers, and ask that their State Attorneys General look into these surprise legal notices and payment demands and the predatory nature of them.

While stopping short of giving legal advice, Eberly said there are some general points for producers to know within this rapidly evolving situation:

1) Absolutely don’t pay anything now. (And don’t sign anything without consulting an attorney.

2) Start gathering deposit records for the 3-month period identified in the letter (Aug. 14 – Nov. 12, 2020) and the 15 months prior to that (as stated in the letter), so you have this information ready.

3) Don’t worry about putting anything into the requested formats mentioned in the letter, just get these items together for now.

4) Know that the Pennsylvania State Attorney General’s office is aware of these letters.

“The ordinary course of business affirmative defense means that the vast majority of farmers most likely will owe nothing, we just have to get them there in the most efficient way possible,” said Eberly.

More key takeaways for dairy farmers in this rapidly evolving situation here:

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Milk payment process officially described, relevant to Dean trustee ‘avoidance claims’ seeking partial payback from farmers.

Posted on December 3, 2020 by Agmoos

By Sherry Bunting, Farmshine, December 4, 2020

BROWNSTOWN, Pa. – In addition to dairy producers, those receiving assigned amounts directly from producer milk checks, such as haulers, have begun receiving these letters of ‘preference action recovery.’ The wide net being cast by ASK LLP as trustee for the Dean Foods Company estate — in search of money to pay bankruptcy administration costs — may become a web of entanglement.

USDA AMS Dairy Programs has not confirmed nor denied whether Market Administrators for the 11 Federal Milk Marketing Order (FMMO) Producer Settlement Funds (PSF) have received letters from ASK LLP or whether Dean’s pre-bankruptcy payments to them have been made subject to these trustee avoidance claims. If so, this would produce another wrinkle.

While USDA AMS is now referring to the Department of Justice all inquiries about the bankrupt Dean Foods estate trustee letters intimidating farmers to repay a portion of their Aug – Nov 2019 milk checks, the USDA did respond late Wednesday evening to Farmshine’s request for a general official description of FMMO milk payment procedures and dates.

This could be helpful to affected dairy producers because the twice monthly transaction dates listed in the letters correspond directly with these official descriptions — showing pre-bankruptcy payments to farmers, and their milk check assignees, are not only ‘ordinary course of business’ and ‘customary for the industry’, but also regulated by Federal Orders.

In Pennsylvania, there is the added layer of the Pennsylvania Milk Marketing Law enforced by the Pa. Milk Marketing Board (PMMB).

PMMB executive secretary Carol Hardbarger provided a synopsis from state statute regarding how PA-regulated plants pay farmers for milk. There are seven Dean plants that are licensed dealers regulated under PMMB, four of these plants are located in Pennsylvania. All seven are now owned by Dairy Farmers of America (DFA) as part of the Southern Foods Group LLC (Dean Foods and holdings) bankruptcy sale.

The PMMB is recommending that farmers do not pay the settlement offers in these letters, and sit tight for further guidance. In Pennsylvania, the State Attorney General is involved. The PMMB chief counsel and Attorney General’s office plan to communicate with ASK LLP this week.

USDA’s FMMO milk payment description follows:

“In general, handlers report monthly to the FMMO (Federal Milk Marketing Orders) their receipts and utilization of producer milk from the previous month. The receipts include the skim and fat pounds of the milk, as well as its average monthly component tests (protein, other solids, nonfat solids) in the component orders. Utilization reports include how such butterfat and skim milk (including components) were used during that month.

“The FMMO office computes the uniform butterfat price and the uniform skim milk price in the four fat and skim pricing orders (FO 5, FO 6, FO 7, and FO 131) and the producer price differential (PPD) in the seven component pricing orders. These prices are computed based upon the total value of milk in the producer milk received and utilized by all handlers pooling on the Order for the month.

“Reporting and price announcement dates are set in regulation and vary by order (see attached chart). For example, for Orders 5, 6, and 7 (Southeast, Florida and Appalachian Orders), producer prices are released on or before the 11th of the month for the previous month, while the announced producer prices for the Northeast order could occur as late as the 17th of the month for the previous month.

“Each handler with pooled milk for the marketing period receives an accounting from the Market Administrator, indicating their plant(s) use value for the month along with the associated payments due to producers for that milk. If a plant use value is greater than the producer payments, the difference is due to the Producer Settlement Fund (PSF) of that respective Order.

“A handler whose plant use value is lower than the producer payments owed will receive a payment from the PSF to allow them to make the producer payments in a timely fashion. Th above reporting and payment date chart lists when payments are due to and from the PSF.

“Final payments to producers and cooperatives are made a day or two after the payments from the producer settlement fund are made.

“Each of the 11 orders requires (advance) payments by handlers for the milk received during the first 15 days of the month a week or two after the 15th of the month.“

For Pennsylvania regulated plants, payment due dates are outlined in Milk Marketing Law Regulation 143.12 as follows:

§ 143.12. Terms of payment.

“(a) Producers shall be paid not later than the 26th day of each month and the 17th day of the following month, as follows:

“(1) Payment that covers the approximate value of milk or cream purchased from the first to the 15th of each month shall be made not later than the 26th day of each month. This payment need not be accompanied by an itemized statement. This payment shall be at least the lowest announced class price for the previous month for the number of pounds purchased or received during the first 15 days of the month.

“(2) Final settlement for all milk and cream purchased during any month shall be made not later than the 17th day of the following month. The final settlement shall include any balances due for the first 15-day period and shall be accompanied by a statement to each producer setting forth the information required under § 143.14 (relating to monthly statement to producers).“

Ghost of milk payments past invoked as intimidating letters seek money from farmers for big bottler’s bankrupt estate: Don’t pay. Don’t panic. Don’t sign anything. Sit tight. Gather records.

Posted on December 1, 2020 by Agmoos

BREAKING NEWS UPDATES 4:00 – 9:00 p.m. Dec 2: Updates after the essential background article below, appear in separate articles here and here.

USDA is forwarding inquiries about ‘preference action’ letters to DOJ. In PA, the Attorney General’s office is involved.

By Sherry Bunting for Farmshine

Disclaimer: I am not a lawyer, and this is not legal advice, but researched information based on many people working on the issue. This is a ‘what we know now’ pre-press preview of a rapidly evolving story, check Friday’s Farmshine and this link for updates, including information about a conference call for dairy farmers in Pennsylvania and open to affecte producers outside of PA (call details here); other states also mobilizing!

BROWNSTOWN, Pa. — Notices of Intended Litigation and Settlement Offers have been received by dairy farmers last week from ASK LLP, a law firm in St. Paul, Minn., seeking payment to the Dean Foods Company Estate under what is known as preference action recovery or trustee avoidance claims covering payments to dairy farmers for raw milk (and co-ops for ingredients) from August 14 to November 12, 2019 — the 90 days prior to Dean’s Nov. 12, 2019 filing for Chapter 11 bankruptcy protection and sale.

We have confirmed these predatory letters have been received by Dean Dairy Direct producers in numerous states – including Pennsylvania, Ohio, New York, Kentucky, Tennessee and assuredly others — on the day before and after Thanksgiving. These letters contain a record of payment transactions (on the Federal Order specified dates), list a total claim amount the farmer will be sued for, and a settlement offer at about 15 to 20% of that amount due December 19 or 24, 2020 (depending on the date of the letter).

Under Southern Foods Group LLC, case number 19-36313 in the bankruptcy court of Houston, Texas, with Judge David R. Jones presiding, the Dean Chapter 11 reorganization is headed to an omnibus hearing scheduled for Dec. 11, 2020 and disclosure hearing Jan. 11, 2021. Debtor filed its Plan of Reorganization as file number 3230 today, Nov. 30, on the docket at https://dm.epiq11.com/case/dnf/info

If you are a dairy farmer who received a ‘demand package’ from ASK LLP representing the Dean Foods Company Estate, don’t ignore the letter, but don’t panic, don’t pay anything, don’t sign anything, sit tight for a bit, get prepared, and know many trustworthy, well-situated people are working on this.

The letters and legal packets are an intimidating threat to see what ‘other people’s money’ the law firm can shake loose for the Dean Foods Estate after the fire sale in which the bulk of assets were sold to Dairy Farmers of America (DFA). For its part, DFA as the new owner of the bulk of Dean’s plants issued a statement that it does not control Dean’s decisions on their bankruptcy and did not participate in this decision.

The letters do mention two potential defenses in a separate “additional instructions” piece, urging producers to “make a copy of this letter and all enclosures to send to your attorney should you choose to defend this matter rather than settle and return the payments.”

The instructions go on to state: “Under certain circumstances you may have a defense warranting settlement of this action at less than the settlement offer extended. We will be happy to consider your defense and ‘explore’ settlement.”

Even in that statement the ‘instructions’ intimidate the dairy farmer receiving it to feel they might have some financial obligation to the Dean Estate (absurd).

Please know that as dairy farmers, you have produced milk that was paid for according to federal and state milk marketing laws, that provided nourishment to families and that has enabled the Dean Foods Company to continue to operate until it was sold.

What’s happening and what dairy farmers should know:

First. Know that you are not alone and stay tuned. A range of emotions and reactions are no doubt happening on receipt of these letters.

Second. Don’t panic, don’t pay, don’t sign, and hold off in hiring an attorney. If you already have a trusted attorney advisor, talk to them, but these letters are concerning from a collective perspective. They name individual farms as defendants and demand a refund of a portion of what they were paid for milk they produced and shipped to Dean, that was bottled by Dean and sold by Dean in the 90 days BEFORE Dean filed for bankruptcy protection.

The situation may ultimately require farms to individually hire a bankruptcy attorney to assert a defense and prove qualification for exemption. But, well-situated sources indicate that it is also possible that collective group action could occur. More answers are needed by authorities and interested parties.

Yes, this preference recovery action is a loophole in bankruptcy law with farms caught in the shakedown net cast by the law firm working for the Dean Estate. There are concerning aspects based on how dairy farms are paid via federal and state laws that preclude the normal business activities of “invoicing.”

In Pennsylvania, the Pa. Milk Marketing Board is looking into this, and the State Attorney General’s office is aware of these letters. Dairy farmers selling milk to a dairy processor and being paid per federal/state regulations is ordinary course of business.

Third. Sit tight but use this time to be prepared by gathering milk statements for the past 15 to 18 months. Many trustworthy and reputable people are working on this issue affecting hundreds of independent dairy farms, and entities to which portions of their milk checks were assigned.

Sources indicate regional cooperatives may have received such letters for raw milk sales, though none have confirmed this. USDA has not confirmed nor denied whether market administrators received similar letters regarding producer settlement fund payments in the pre-bankruptcy period.

One regional cooperative executive has confirmed receiving a letter six weeks ago in relation to ingredient sales during the 90-day pre-bankruptcy time-period and indicates other regional co-ops have as well. They have not agreed to nor negotiated any settlement, but they provided their volumes and documentation of these sales to the soliciting law firm through their bankruptcy attorneys — and are monitoring the situation.

Dairy farmers can do the same.

Absolutely don’t pay or sign anything right now.
Start gathering deposit records for the 3-month period (Aug 14 – Nov 12, 2019) plus the 15 months before that as stated in the letter’s instructions about potential defense assertions.
Don’t worry about putting any of this information into the requested spreadsheet or other formats mentioned in the letter, just get these items together for now.
The Pennsylvania Attorney General’s office is aware of these letters. Producers in other states could look at involving the offices of their Secretaries of Agriculture and/or Attorneys General.
The ordinary course of business affirmative defense means that the vast majority of farmers most likely will owe nothing, and people are working on how to get producers to that point in the most efficient way possible.

Fourth. Know that USDA AMS Dairy Programs has been contacted and is looking into the matter. Know that every one of the Federal Milk Marketing Order websites shows the strict dates and procedures concerning payment for milk. Dean Foods – or Southern Foods Group LLC as it is named covering all holdings in the bankruptcy case #19-36313 – could not have operated nor could it have been sold to yield any funds for the estate had the farmers not been paid for the milk sold.

Fifth. Know that in Pennsylvania, the Pa. Milk Marketing Board (PMMB) became involved immediately. The board and staff started their day Monday morning with a joint meeting on this issue that was brought to their attention over the weekend. Know that they have begun a conversation with Pennsylvania’s State Attorney General who is looking into this and is already familiar with some of the elements having been involved in getting final payments arranged using the mandatory bond insurance Pennsylvania requires all licensed milk dealers to carry. Know that in Pennsylvania, milk plants follow state payment and bonding regulations in addition to federal orders. Know that there are seven Dean Foods plants regulated by PMMB because they receive milk produced on Pennsylvania farms, and four of these plants are located in Pennsylvania.

Know that producers outside of Pennsylvania can band together and through their state dairy organizations or Secretaries of Agriculture – ask their State Attorneys General to look at this.

Sixth. Know that other well-situated people are looking into a way for all affected producers to fight this together instead of each farm going it alone and having the expense of hiring legal counsel with bankruptcy experience to “assert” their defense in writing to the law firm ASK LLP (aka Ebenezer Scrooge).

Seventh. Know that answers to various questions and concerns are being sought. More will be learned in the coming days, and the situation is one that is rapidly evolving.

Eighth. Know that ASK LLP should know better. The Dean estate trustee should already know that these dairy farmer critical vendor payments are not “preferential” payments warranting trustee avoidance claims. Not only should they know the critical vendors of Dean Foods — since the bankruptcy judge issued orders that dairy farmers be paid as critical vendors during the proceedings so Dean could operate and be sold – they should know that Judge David R. Jones in hearings on several occasions stated his big concern that school children would continue to receive their milk and dairy farmers would continue to be paid during the bankruptcy proceedings.

ASK LLP should know that the very charts they included in their ‘demand packages’ — showing all transfers from Dean plants to individual ‘defendant’ dairy farmers — are made on the precise same dates twice a month as is the regulation for milk payments under Federal Orders.

Ninth. Know that Bankruptcy Judge David R. Jones’ office in Houston, Texas has been notified of the ‘demand packages’ sent to dairy farmers for the pre-petition period. Several high-profile members of the U.S. House and Senate Agriculture Committees have also been notified.

BACKGROUND: The letters descended on dairy farms the day before and after Thanksgiving with due dates of December 19 or December 24. No, these were not Happy Thanksgiving and Merry Christmas John and Jane Q Dairy Farmer, these were thinly veiled attempts at blackmail – demands to pay Dean Foods Company Estate a portion of milk checks from August 14 through November 12, 2019 in order to avoid being sued for much larger sums of money.

Ebenezer Scrooge (ASK LLP) conjured up the ghost of Dean Bankruptcy Past to insinuate that monetary transfers from Dean to dairy farmers — or their assigns — in return for milk they received, processed and sold, were ‘preferential’ resulting in what are called Trustee Avoidance claims by the law firm purported to represent Southern Foods Group LLC the conglomerate name for the bankruptcy and sale of Dean and all of its holdings.

A Trustee Avoidance claim – the legal action that the letters state will occur after the due date for payment of the settlement offer – indicate that such payments to farms could have been ‘preferential’ to avoid the bankruptcy trustee making sure all creditors are treated fairly. In layman’s terms, the claim is that a defendant farmer’s payment for milk pre-bankruptcy could have been a ‘better deal’ than the ‘trustee’ would have divvied out.

Wrong. Federal and state law set forth dates and formulas for milk payments as a requirement for milk companies to operate. That money has already been spent by dairy farmers keeping cows fed and keeping lights on at farms already beleaguered by five years of marginal and below breakeven prices. No windfall there.

Sure, the intimidating packet shows ways a recipient can assert their defense – through hiring a bankruptcy attorney. They can show invoices for those three months – and the 15 months before that – to show “ordinary course of business.” They can assert their defense with milk check statements the scrooge law firm says must be supplied in Excel spreadsheets requiring certain types of entries and documentation. Or they can just pay the settlement offer at a reduced rate to avoid legal action commencing the week after the due date.

Did I mention the due dates are December 19 for some; December 24 for others?

Did I mention farmers have 21 days from the date of the letter to sign and pay the ‘settlement offers’ with checks payable to Dean Foods Company or risk – says the letter – paying amounts 5 to 6 times higher?

Yes. This is what intimidation looks like, a shakedown to see what they can get away with, what money can be extorted, to improve their cut on the deal by threatening hard-working, nose-to-the-grindstone dairy farmers with big numbers, big words, and big assumptions.

They know better, and if they don’t, they should.

-30-

Ag Moos

Monthly Archives: December 2020

Heartbreaking, heartwarming: Joshua Heisey, 12, mourned and celebrated with profound faith

PA herd first in nation to make ‘Naturally Better Omega-3’ milk

Did you get a ‘Dean estate’ demand letter from ASK LLP? Respond with this simple, approved ‘Declaration’

Announcing Vilsack as Ag Sec pick, Biden admits: ‘He helped develop my rural plan’

Milk producers, haulers, MUST respond to ‘Dean’ letters; PMMB Declaration Letters can be used by those affected in ALL states

‘Vote’ Whole Milk School Lunch Choice: Comment to USDA by Dec. 28, 2020

UPDATE on Dean trustee letters demanding payment from farmers. Don’t pay. Gather records. Fight back.

Milk payment process officially described, relevant to Dean trustee ‘avoidance claims’ seeking partial payback from farmers.

Ghost of milk payments past invoked as intimidating letters seek money from farmers for big bottler’s bankrupt estate: Don’t pay. Don’t panic. Don’t sign anything. Sit tight. Gather records.

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