Monthly Archives: June 2022

From DMC to FMMOs, from price ‘movers’ to ‘make allowances’: House Ag hearing reviews farm bill dairy provisions

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By Sherry Bunting, June 24, 2022

WASHINGTON — It was a lot to wade through, but after two panels and nearly four hours, many cards were on the table, even if the full deck was not counted. 

The U.S. House Agriculture Committee hearing Wednesday, June 22 was a 2022 review of the current farm bill’s dairy provisions. Chairman David Scott (D-Ga.) set the stage with his opening remarks, noting a significant part of the hearing would be devoted to the dairy safety net, namely the Dairy Margin Coverage (DMC), but also to talk about the Federal Milk Marketing Orders (FMMO) to learn if this system is “the best fit for today’s world.

“We want to continue to listen to farmers and navigate the issue for the best approaches to any changes,” he said, setting the next stage for listening sessions.

Those testifying talked about building consensus for FMMO changes, a charge handed down from Ag Secretary Tom Vilsack last December, and again more recently, when he said a consensus agreement by stakeholders on one plan was needed before a national hearing on milk pricing could be held.

On the Class I ‘mover’ change in the last farm bill, USDA AMS Deputy Administrator Dana Coale noted that the change was authorized by Congress after an agreement was reached between NMPF and IDFA to change the ‘higher of’ to a simple average plus 74 cents. This was designed to be revenue neutral, she said, but the pandemic showed how an unforeseen market shock can create price inversions that significantly change this neutrality. (testimony)

Coale noted that “market abnormalities” brought on a situation where Class I was below Class III, which doesn’t typically happen, and this created losses.

“In the 2018 farm bill Congress authorized a change to the Class I price mover. We implemented that in the department in May 2019. This change was a consensus agreement reached between NMPF and IDFA to benefit the entire industry. Implementation in the farm bill was designed to be revenue neutral. However, nobody foresaw a pandemic occurring, and no one could have projected the implications that pandemic would have on (prices), particularly within the dairy sector. What we saw occur from mid-2020 through mid-2021 was a significant change in that revenue neutrality. As you look at the Class I mover before the pandemic and moving out of the pandemic, it is maintaining pretty much a revenue neutral position compared to the prior mover. However, due to the (class) price inversions that occurred, we had some major losses incurred by the dairy sector.”

Dana Coale, Deputy Administrator, USDA AMS Dairy Programs

On the primary dairy safety net, Farm Service Agency Deputy Administrator Scott Marlow went over the Dairy Margin Coverage (DMC) and explained the beneficial changes that have been implemented since the 2018 farm bill. (testimony)

He noted that supplemental DMC would have to be made permanent in the next farm bill in order for that additional production history between the 2011-13 figure and the 5 million pound cap to be covered in future years.

“In 2021, DMC payments were triggered for 11 months totaling $1.2 billion paid to producers who enrolled for that year, with an average payment of $60,275 per operation. At 15 cents per cwt at the $9.50 level of coverage, DMC is a very cost-effective risk management tool for dairy producers. Ahead of the 2022 DMC signup, FSA made several improvements. The program was expanded to allow producers to enroll supplemental production (up to the 5 million pound cap). In addition FSA updated the feed cost formula to better reflect the actual cost dairy farmers pay for alfalfa hay. FSA now calculates payments using 100% premium alfalfa hay, rather than 50% of the premium alfalfa hay price and 50% of the conventional alfalfa hay price. This change is retroactive to January 2020 and provided additional payments of $42.8 million for 2020 and 2021. We are very concerned about the margins. It is very important the way DMC focuses on the margin. Farmers are facing inflation of costs beyond the feed that is part of this calculation. This margin based coverage has proven to a model and is something we need to look at for other costs and commodities.”

Scott Marlow, Deputy administrator usda fsa farm programs

Dr. Marin Bozic, Assistant Professor Applied Economics at the University of Minnesota gave some long range trends and observed the factors that are decreasing participation in Federal Milk Marketing Orders. (testimony)

He mentioned that a consideration not to be ignored is the status of vibrancy and competition as seen in transparency and price discovery. When asked about proposals to improve this, Bozic said the proposals need to come forward from the industry, the stakeholders, and that the role of academia is to provide numbers, trends, and analysis of proposals, not to decide and determine these marketing structures.

“Farm gate milk price discovery is challenged by this lack of competition,” he said. “If a corn producer wishes to know how different local elevators would pay for corn, all he needs to do is go online or tune in to his local radio station. Dairy producers used to be able to ‘shop around’ and ask various processors what they would pay for their milk.”

Bozic was quick to point out that, “We should not rush to generalize from such anecdotal evidence, but in my opinion, it would also be prudent not to ignore it.”

“FMMOs start from a set of farmer-friendly ideas… They have somewhat lost luster due to declining sales of beverage milk. In regions other than Northeast and Southeast, fluid milk sales no longer provide strong enough incentives for manufacturers to choose to stay consistently regulated under FMMOs. My estimates are that the share of U.S. milk production in beverage milk products is likely to fall from 18.3% in 2022 to 14.5% by 2032. Do Federal Orders suffice to deliver fair market prices to dairy producers? The critical missing ingredient is vibrant competition for farm milk. Whereas just six or seven years ago, many producers had a choice where to ship their milk, today it is difficult. When some dairy producers have asked for milk price benchmarking information from their educators or consultants, those service providers have in multiple instances faced tacit disapproval or even aggressive legal threats from some dairy processors. Further research and an honest debate on competition in dairy is merited.”

Marin bozic, ph.d., department of applied economics, university of minnesota

Where FMMO changes are concerned, Bozic noted some of the broader issues to come out of the Class I pricing change that was made legislatively in the last farm bill. For example in future reforms, when there is lack of wide public debate on proposals, he said: “It increases odds of a fragile or flawed policy design, and lack of grassroots support for the mechanism in changing markets. FMMOs have a comprehensive protocol for instituting changes through an industry hearing process. The Class I milk price formula can be modified through a hearing process.”

From Bernville, Pennsylvania, representing National Milk Producers Federation (NMPF) and DFA, Lolly Lesher of Way-Har Farms shared the benefits of the Dairy Margin Coverage (DMC) program through FSA and other risk management tools through RMA. She said they purchase the coverage at the highest level each year as a safety net for their 240-cow dairy farm. (testimony)

DMC is intended for smaller farms producing up to 5 million pounds of milk annually, but other farms can layer it in with other available tools at the tier one level on the first 5 million pounds or choose to pay the tier two premium to cover more of their milk through that program, but other tools like DRP are also available, Marlow explained.

Turning to the Class I pricing change in the last farm bill, Lesher said the change was an effort to “accommodate a request for improved price risk management for processors, while maintaining revenue neutrality for farmers… but the (pandemic) dramatically undercut the revenue neutrality that formed its foundation.”

“As valuable as the (DMC) program has been, many farmers have not been able to fully benefit because the underlying production history calculation is outdated. It is critical that the (supplemental DMC) production history adjustment be carried over into the 2023 farm bill… The events of the last two years have shined a spotlight on the need for an overall update to the FMMO system. Class I skim milk prices averaged $3.56/cwt lower than they would have under the previous ‘mover’. This undermined orderly marketing and represented net loss to producers of more than $750 million, including over $141 million in the Northeast Order. The current Class I mover saddles dairy farmers with asymmetric risk because it includes an upper limit on how much more Class I skim revenue it can generate… but no lower limit on how much less… those losses become effectively permanent.”

lolly lesher, way-har farm, bernville, pennsylvania, representing nmpf and dfa

According to Lesher’s testimony: “The dairy industry through the National Milk Producers Federation is treating this matter with urgency and is seeking consensus on not only the Class I mover, but also a range of improvements to the FMMO system that we can take to USDA for consideration via a national order hearing.”

Lesher serves on DFA’s policy resolutions committee and she noted that DFA, as a member of NMPF “is actively participating in its process (for FMMO improvements), which involves careful examination of key issues to the dairy sector nationwide… We look forward to working with the broader dairy industry and members of this committee as our efforts advance.”

Representing International Dairy Foods Association (IDFA), Mike Durkin, President and CEO of Leprino Foods Company stressed the “extreme urgency” of updating the “make allowances” in the FMMO pricing formulas. These are processor credits deducted from the wholesale value of the four base commodities (cheddar, butter, nonfat dry milk and dry whey) used in FMMO class and component pricing as well as within the advance pricing for fluid milk. (Leprino is the largest maker of mozzarella cheese in the U.S. and the world. Mozzarella cheese is not reported on the USDA AMS price survey used in the FMMO class and component pricing.) (testimony)

Durkin also noted the importance of making the Dairy Forward Pricing Program that expires September 2023 a permanent fixture in the next farm bill for milk. This program allows forward pricing of milk used to make products in Classes II, III and IV so that longer-duration contracts can be used by this milk when also pooled under FMMO regulation without fear of the authority expiring in terms of the FMMO minimum pricing. (Milk that is used to make products in Classes II, III and IV is already not obligated to participate in or be regulated by FMMOs.)

“The costs in the (make allowance) formula dramatically understate today’s cost of manufacturing and have resulted in distortions to the dairy manufacturing sector, which have constrained capacity to process producer milk. Congress can improve the current situation by directing USDA to conduct regular cost of processing studies to enable regular make allowance updates. The need to address this lag is now extremely urgent. While our proposal to authorize USDA to conduct regular cost surveys will eventually provide data to address this in the longer term, steps must be taken now to ensure adequate processing capacity remains. Updating make allowances to reflect current costs will enable producer milk to have a home. Making the (Dairy Forward Pricing Program for Class II, III and IV) permanent could also facilitate additional industry use of this risk management tool for longer durations without concern about the program expiring.”

Mike Durkin, president and ceo, leprino foods, representing idfa

Lesher also thanked House Ag Ranking Member G.T. Thompson for his Whole Milk for Healthy Kids Act, seeking to bring the choice of whole and 2% milk back to schools. The bill currently has 94 additional cosponsors from 32 states, including the House Ag Chair David Scott and other members of the Agriculture Committee. The bill was referred to the House Committee on Education and Labor.

Other key dairy provisions were reported and questions answered, including a witness representing organic dairy farmers. There’s more to report, so stay tuned for additional rumination in Farmshine and here at Agmoos.com

Recorded hearing proceedings available at this link

Written testimony is available at this link


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Rebuilding ‘the dairy barn’ from the ground up

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By Sherry Bunting, Farmshine, June 10, 2022

Grandiose plans centered on a globalist net zero economy were the furthest things from the minds of the more than 100 people who showed up on two southern Lancaster County, Pennsylvania Amish dairy farms and neighboring properties that took a hit from a May 27 EF-1 tornado. A week later, on June 4, the second of two destroyed dairy barns could be seen taking shape — from the ground up.

Many hands make light work. Farmers are quick to help. They are the ultimate ‘community organizers’ when faced with a big task. They ‘just do it’ instead of standing around talking about it.

Farmers don’t have time for nonsense. Working closely with seasons, land and animals, viewing themselves as stewards of God-given resources, farmers are practical. They are the first to show up when disaster strikes. 

They have a passion for their calling to feed a hungry world, and they don’t expect much in return – the ability to earn a fair price, a decent living, and a little respect. 

They show compassion for others, and gratitude in all things.

It is the farmers who show ultimate resiliency every day, in the face of hardship. They don’t waste food. They don’t waste time. They don’t waste money. And they don’t waste resources.

The world could learn a lot from farmers, if those making the big policy decisions truly listened. So many simple truths are ignored, simple positive changes are hard to get done, because they don’t fit the global agenda.

Why? Perhaps because there is an element of control now involved in food production that has changed the dynamic of “community” and changed the conversation between farmers and consumers.

The good news? Just as this dairy barn destroyed by a storm was rebuilt — board by board, nail by nail – through the efforts of a steadfast community, the same can be said about rebuilding the dialog between farmers and consumers, the sense of community, at the grassroots level.

Consumers are not as focused on the buzz terms of sustainability and net zero as the industry and policy makers and anti-animal activists would have us believe. 

The majority of the people in our communities around the world want to feed their families affordably and healthfully. The majority want to know more about farming and food. The majority want to support farmers. The majority love seeing cows. 

The majority still believe in the strength of local communities, of being there for one another in a time of need. The majority trust farmers because they see how they quietly live their faith.

We can all take part in rebuilding this proverbial ‘dairy barn’ — this connection with consumers at the grassroots community level. 

We’ve seen the storm clouds on this horizon for the past several years. The storm is here. The damage is scattered. The foundation has some cracks…

But the rebuilding is underway, and we are seeing it from the ground up, not the top down. We are seeing it in grassroots efforts, like 97 Milk, that engage others, share truths, and open eyes. The best way to shore-up our dairy farming communities in the face of a global agenda is to get after it — board by board, nail by nail. Many hands make light work.

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On Life, Liberty, Land and Pursuit of Happiness

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EDITORIAL: Deals with the devil at Davos come down to money invested to control carbon, essential to life

By Sherry Bunting, published in Farmshine Newspaper, June 17, 2022

‘Deals with the Devil at Davos’ published in Farmshine June 10, 2022 may have left some readers’ heads spinning. So, let me boil it down to what I see happening: The ramping up of a pervasive global transformation of life itself being leveraged on the masses by the biggest actors in food, energy, capital and policy.

The World Economic Forum (WEF) is the place where plans are hatched to transform food and energy in the name of sustainable climate and environment. (Great Reset)

This includes goals of setting aside 30% of the earth’s land surface by 2030 for re-wilding and biodiversity – 50% by 2050. 

This includes top-tier elite billionaire investor plans to transform food through plant-based and lab-created meat and dairy lookalikes and blends, with the purpose of replacing livestock, especially cattle.

This includes “sustainability” measures being enacted by the world’s largest global food and agriculture companies as the leverage point to position producers and consumers into the headlocks of their vision, their capital, their control.

The bottom line is that the dairy and beef checkoff programs have joined in by creating alliances and initiatives as partners with these WEF actors, including individuals, corporations and the World Wildlife Fund (WWF). This gives the appearance of a bottom-up approach, when in reality it is top-down, and has been gradually bringing more farm-level decisions and practices in line with what the Davos crowd is cooking up.

The vehicle? Measuring, tracking and controlling carbon. 

In other words, controlling energy, food, and land, and with it life, liberty and pursuit of happiness, with a strategy to condition the next generation to accept an alternate reality.

The specifics mentioned in the analysis last week include the involvement of the checkoff programs, through memorandums of understanding with USDA, WWF and others, to position schoolchildren as “agents of change.”

In short, checkoff funds are used at the national level for many things, one key element being dairy transformation to fall in line with the transformation goals of the globalist elites. We can see the business and policy changes that translate to the farm level just beginning amid a void of understanding for the essential role cattle play in true environmental sustainability and the carbon cycle of life itself.

Of all farm and food animals, the life cycle of cattle is tied to the largest land base. Think about that in the context of the land set-aside goals for 2030 and 2050.

Meanwhile, the consumers that the farmers think they are reaching with their checkoff dollars are having their voices stolen by the supply chain actors. On the other end of the spectrum, farmers are also having their voice stolen as their mandatory dollars target the ways they are and may be expected to conform in order to access this narrowing and consolidating supply chain leverage point and the capital to run their farms.

When farmers and consumers talk directly to one another, they find out that they care about the same things and can reach mutual respect and understanding – as long as the WEF’s Klaus Schwab and friends don’t use their position in the supply chain leverage point, the middle, to set the rules of the game.

How are they herding farmers and consumers into headlocks? By transforming the future through their definitions of measuring, tracking and controlling carbon – the essence of life.

These things are happening without voice or vote, and in part, mandatory checkoff funds have been instrumental over the past 12 to 14 years in shaping this transformation through alliances.

Life on earth would not be possible without carbon. It is one of the most important chemical elements because it is the main element in all living things and because it can make so many different compounds and can exist in different forms.

Bottomline: The measuring, tracking, trading and control of carbon means the measuring, tracking, trading and control of life. 

Who will have a voice in life when there is a global consortium laying out the control, access and transformation for the essential element of life – never mind liberty, land (property), and the pursuit of happiness.

Most farmers think they are promoting and educating consumers with checkoff funds. Yes, they are to some degree. However, a significant portion of those funds and/or the direction of funding is tied up in sustainability alliances that ultimately redirect the Davos-hatched transformation agenda right back onto the farm.

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Deals with the devil at Davos; it all comes down to money… and land

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WEF panel at Davos on redirecting capital in agriculture. (screen capture)

NEWS / ANALYSIS

By Sherry Bunting, published in Farmshine Newspaper, June 10, 2022

DAVOS — Let’s follow your checkoff money all the way to Davos, where Klaus Schwab and friends, known as the World Economic Forum (WEF), gather annually in Switzerland. This is where globalist elites have been plotting and planning the net zero economy, complete with food transformation maps.

On May 26, your message was delivered and your future was signed up, with your money through your checkoff programs — a plan 14 years in the making under the DMI umbrella of multiple so-called non-profit foundations and alliances.

Some of the same global actors in the WEF food transformation movement are also represented in the various non-profit alliances that were created by your checkoff in the 2008 through 2012 time-period.

At Davos, the May 26 panel on “redirecting capital in agriculture” is where “farmers voices were heard for the first time,” they said.

Don’t worry, the purpose was to get you the money from Davos billionaires to do all the things they will be requiring you to do to be part of the new net zero economy they are creating with the net zero goal DMI has set for you — despite the fact you didn’t vote on it or sign up for it, and experts can’t even agree on what it means or how it will be measured.

But that’s okay, your checkoff created surveys, sustainability platforms and strategic alliance non-profits to bring the largest processors together “pre-competitively” to set the timelines, plan the parameters, and craft your messages.

DMI “thought leaders” often talk about getting ahead of “societal issues” such as animal care and the environment via the Innovation Center — to avoid regulation. That is the basis of the FARM program, for example.

But the reality is the regulatory side has at least some accountability — a process via our democratic republic if we still have one. 

What democratic process was used to determine the rules your farm will live by — as decreed by the corporations buying what you produce, and now also the access to capital you will need to continue?

Consumers have not asked for this, and neither have you. But your checkoff has done it for you and will help you navigate.

DMI issued a press release just a few days before Davos about how the Sustainability Summit they held state-side to help you, the farmer, navigate this new future they have been creating with your checkoff money.

“Never has the opportunity been greater for us to come together and demonstrate our collective impact,” said DMI CEO Barb O’Brien in opening the pre-Davos Summit. “And frankly, never has it been more urgent as we work to meet the growing demands and expectations of both customers and consumers around personal wellness, environmental sustainability and food security.”

These are pretty words.

The press release cites the U.S. Dairy Stewardship Commitment as having 35 companies representing 75% of the milk market signed on. The four pieces DMI is working on were listed in a vague way: 1) utilizing new ‘digital frontiers’ for point-of-purchase ‘strategies’, 2) promoting a new definition of ‘health and wellness’, 3) fulfilling an ‘impact imperative’ they say exists among consumers positioning U.S. Dairy as the leader in addressing societal challenges such as climate change, and 4) targeting ‘inclusive relevance,’ which O’Brien said Gen Z is the driver as the most diverse generation to-date with societal expectations for companies and brands.

Two weeks later, the thought leader representing you in Davos told the gathered elite, the billionaires, the power-centers, that your soil has “perpetual societal value” and should be invested-in and traded as an “asset class,” that farmers are the “eco workforce to be deployed,” and that investors and lenders should “redirect capital” to “de-risk” the investments farmers must make as “climate warriors that are planting the future.”

We missed that memo. Lots of buzz terms here, so let them sink in.

Here’s the reality: Farmers’ voices were NOT heard in Davos. Instead, what was heard was the voices of the WEF billionaires, the WWF supply-chain leveraging model, the string-pullers (thought leaders), and the plan-developers. 

The World Wildlife Fund 2012 “Better Production for a Living Planet” identifies the strategy depicted in this graphic on biodiversity (30×30), water and climate. Instead of trying to change the habits of 7 billion consumers or working directly with 1.5 billion producers worldwide, WWF stated that their research identified a “practical solution” to leverage about 300 to 500 companies that control 70% of food choices. By partnering with dairy and beef checkoff national boards in this “pre-competitive” strategy, WWF has essentially used farmer funds to implement their priorities in lockstep with the World Economic Forum. Image from 2012 WWF Report

We don’t even know all the tentacles behind the pretty words used to describe what you have already been signed up for. Rest assured, DMI will roll them out gradually through the Innovation Center and FARM, and investors, lenders and others will put them in the fine print of farmer access to capital and markets.

It’s more truthful to say the farmers’ voice is being stolen in this process.

Your autonomy, independence and decision-making is being overridden. Your permission is being granted for the WEF Davos billionaires to step right up, help themselves, and determine your options, your future through their investments in a soils asset class — because, climate.

During the WEF panel, it was Erin Fitzgerald who carried “the farmers’ voice” to Davos.

Erin Fitzgerald (USFRA photo)

Fitzgerald is CEO of U.S. Farmers and Ranchers in Action (name changed in 2020 from the previous U.S. Farmers and Ranchers Alliance). She became the USFRA CEO in 2018 after spending the previous 11 years working for DMI as Vice President of Sustainability and several other roles and titles while the FARM program and net zero framework was being developed. She spoke “for farmers and ranchers” in four sessions at the WEF annual meeting in Davos, including one panel about redirecting capital in agriculture, where she talked about soil as an “asset class” and farmers as the “eco workforce.”

During her comments on the Davos panel about “redirecting capital,” she made it clear that your consumer is “no longer the person at the checkout” in the grocery store. She said it’s the pension fund investors looking for low-risk investments. 

Even that is not entirely accurate. The truth is that DMI — in the creation of its many precompetitive alliances — has its sights set on bigger fish: the billionaires at Davos, the venture capitalists, the global corporations investing in climate. 

In fact, this is being driven behind the scenes by Edelman, the global PR firm that receives $16 to $18 million in checkoff funds annually as the contractor for DMI over the past decade of plotting and planning. Edelman is a key player at Davos. GENYOUth was the Edelman brainchild, and outgoing CEO Alexis Glick was originally tapped by Richard Edelman, himself, to lead GENYOUth as a former financial analyst who made Davos a high point of her itinerary.

Back to the WEF panel on May 26 — the messages that have been crafted were touted, along with a narrative about what you will do in the next 30 harvests as the “eco workforce” of the “new global net zero economy.”

Listening to some of the livestreamed sessions, other panels highlighted the future of food, energy and financing to all be rooted in carbon impact.

Some panels noted the fast pace of the WEF global transformation is creating inflation pain, but the globalist elites are not concerned, even saying “that’s a good thing.”

Other panels delved into individual carbon tracking, to measure, record and score what each one of us eats, where we go, how we get there.

Truth be told, consumers are also being signed up for the net zero economy, although most don’t even know it yet. In a free America, I’m not sure we voted on this global-control-fast-track either.

Fitzgerald, whose role is described as “building sustainable food systems of the future,” laid it out for the crowd of investors, corporations, regulators, and government officials.

On the Davos stage, she said she brought the farmers’ message and referred specifically to the DMI board chair as “my chair Marilyn, a farmer from Pennsylvania.” (Marilyn Hershey also sits on the USFRA board.) 

In the ‘redirecting capital’ discussion, another layer of the World Wildlife Fund (WWF) model of leveraging the few players in the middle of the food supply chain to move consumers and producers at both ends was very much in play.

This is not surprising. The DMI alliance with WWF also spanned a 12-year period from 2008 to 2020 when all of these non-profit alliances were formed under the DMI umbrella to bring global processors together as a platform for “pre-competitively” determining how all farms will operate in the future.

Your innovation and hard work were mentioned, but no credit was given to where you are, what you already accomplish, as farmers. It is all forward-looking to annually “make progress” over “the next 30 harvests.”

The stage was set for farmers to see capital “redirected” to de-risk certain types of operations and to make the soil you farm an “asset class.”

“We officially have our first solution,” declared the Davos panel moderator, turning to the panelist sitting beside Fitzgerald, saying “that’s your area, let’s do it.” Who was this panelist? None other than David MacLennan, the board chair and CEO of Cargill, and a former member of the Chicago Board of Trade and Board of Options Exchange.

Think about this for a moment. Soil as an asset class dovetails nicely with the 30 x 30 land grab, another WEF / WWF / Great Reset / Build Back Better invention.

Lured by money or financing, the soil you farm — if it becomes a tradable asset class with financing channeled to certain practices begs this question: Whose land does it become and what will be your accountability through the Security and Exchange Commission or the Commodity Futures Trading Commission for disclosures? Farm Bureau is already sounding the alarm on proposed rules about supply chain producers being an open book to the SEC for claims made by companies buying their raw commodities.

More importantly, who will make the decisions on your farm? Fitzgerald asked the audience to “put aside the term ‘farmer’ and think about ‘these people’ as the “eco workforce.’”

Your voice, through your checkoff, just went into the den of thieves to offer your land, your future, your autonomy — as a farmer, rancher, landowner, generational steward of God-given resources in your community — and put it on a silver platter for the Davos global elites under the feel-good message of farmer as climate warrior, an eco workforce planting the future in the net zero economy.

They said your voice was heard, your story was told, and they’ll get you the investment funds for projects. In  “thinking about soils as a perpetual asset to society,” Fitzgerald said investors can do what was done for the renewable energy sector in 2008 to “prop it up and get it moving.”

“This eco workforce has boots on the ground,” she said. “They have every bit of capability, but they’re going to be battling the real effects of disrupted markets and climate change, and they also have unbelievable talent. Our farmers are doing amazing work as climate eco warriors. Are we as business agents of change here at Davos really creating the finance models to de-risk their investment to let them plant the future and be the eco warriors they can be in the fight on climate change?” 

More pretty words that might sound inspiring to some, until we pull back the layers and realize deals are being made with the devil.

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Dairyman sees Wagyu as ideal beef cross

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No high energy diet, the key with this breed is to take your time,’ says Adam light (left). He and his cousin Ben (right) are partners in Lightning Cattle Company, Lebanon County, Pennsylvania. They raise Wagyu x Holstein crossbred cattle for direct beef sales. They say the full-blooded Wagyu and dairy crossbreds are quite docile. They leave the heifer barn at Adam’s dairy weighing around 500 pounds, come here to Ben’s father’s farm on grass and supplemental forage until 900 pounds, then finish back at Adam’s dairy to final liveweight 1450 to 1500 pounds. This is Part 2 of a Beef on Dairy series. To read the May 13 edition’s PART ONE, CLICK HERE. Photos and story by Sherry Bunting, Farmshine, May 20, 2022.

MYERSTOWN, Pa. — No, they don’t get massages, and they aren’t fed beer as the stories go about the intimate care of the Wagyu in Japan. 

However, at Spotlight Holsteins in Lebanon County, Pennsylvania, Wagyu is the beef-on-dairy crossbreeding fit, and the cattle are given the time they need to produce the outstanding beef characteristics the Wagyu are known for — doing so on a lower energy diet.

The whole thing started before 2020, the year Adam Light sold his 100-cow registered Holstein tiestall dairy herd in Jonestown and purchased the 240-cow robotic dairy farm and herd from Ralph Moyer in nearby Myerstown (above).

Today, Adam and his cousin Ben Light, a landscaper, are partners in Lightning Cattle Company.

They started with three Wagyu, two bulls and a heifer, purchased from the September 2018 dispersal through Hosking of the late Donald ‘Doc’ Sherwood’s Empire State herd he had bred over 17 years from imported genetics near Binghamton, New York. Doc Sherwood retired that year, and he and his herd were profiled in Farmshine (here)

Adam and Ben brought their investment home and had Zimmerman Custom Freezing collect the bulls. They also flushed the heifer for embryos.

Not only did they begin using those straws of Wagyu on some of Adam’s dairy cows, they also began making some available to other dairy farmers in return for first-dibs to buy the offspring, and they began leasing bulls to farms with beef cow-calf herds.

Today, they have two full-blooded Wagyu bulls, two full-blooded females, plus 34 crossbred animals in various stages of beef production, and they have sold almost a dozen finished beef.

“The key with this breed is to take your time. They need protein to grow, but on the energy side, they don’t need a whole lot. There’s no high energy diet in this. It’s really quite simple. Whatever the dairy heifers get is what the Wagyu crossbreds get, which is a kind of lower energy feed,” Adam explains.

The calves start in the nursery barn at his dairy, grouped with replacement heifers on automated Urban CalfMom feeders, where milk intakes can be customized. They also receive the same calf starter, calf grower and hay.

When they reach 400 to 500 pounds, the crossbreds are moved to Ben’s father’s crop and poultry farm near Jonestown, which is also home-base for Ben’s landscaping company.

There they become Ben’s responsibility until they reach 900 pounds on pasture with some supplemental forage as needed.

At around 900 pounds, the cattle come back to Adam’s dairy, where they are housed and fed the same mostly forage diet on the same steady growth plane of nutrition as the breeding age and bred heifers. 

They finish at 1450 to 1500 pounds at about 26 months of age and are sold as beef quarters, halves and wholes from pre-orders, with the buyers paying the custom butcher for processing.

Like the Wagyu breed, Holsteins are slower to finish out. The difference is a straight Holstein needs a push with a high-energy diet to reach a higher quality grade, whereas the Wagyu crossbreds do it on lower energy feed.

“You really want to raise them 26 months, that’s longer than for other crossbreds. For us, it’s not a problem because we have the facilities, and we can feed them economically — right with our dairy animals — and have a more valuable beef animal at the end,” Adam explains.

After those initial years of lead time, Lightning Cattle Co. sold nine animals for beef in 2021. They expect to sell 10 in 2022, which should put them even on their original investment and the cost to make embryos to keep their Wagyu seed stock rolling forward, and they project to double the number sold in 2023 based on calves started in 2021.

What they sell is known as American Wagyu beef — mostly F1 Wagyu x Holstein with a few Wagyu x Angus and Wagyu x Jersey. 

Having access to the crossbred calves from the dairy and beef herds that are using their Wagyu genetics helps ensure they can expand beef sales as demand grows, without tying up Adam’s dairy herd to make more crossbreds.

On his own cows, Adam turns to Wagyu after giving a cow two or three chances with Holstein. He’ll modify that decision based on visual appraisal and milk production, with an eye for the number and type of cows he needs and wants dairy replacements out of.

“They settle fast with Wagyu. The difference is evident under a microscope,” Adam reports.

Why Wagyu? Adam recalls his grandfather had some back in the early 2000’s. Half a dozen Wagyu cows and a bull were payment on a debt, which he added to the beef herd on his crop and livestock farm.

“No one really knew what they were back then,” Adam recalls, noting they aren’t beef show animals on-the-hoof. The outstanding meat characteristics are only seen on-the-rail as the flecks of fat are distributed evenly throughout the lean.

Almost 20 years later, Adam did the research. He learned about the breed from Japan, where there are different grades, names and regional identifiers for specific lines, and their tenderness transmissibility.

“The dairy industry was pretty ugly, and we were getting a bill instead of a check for our bull calves. Heifers weren’t worth much either, so we wanted to make a valuable animal to offset when other parts of the dairy industry are ugly,” Adam reflects back to 2018.

Wagyu won’t ring bells for average daily gain or fast finishing. While there are feedlots on the West Coast specifically dedicated to finishing F1 Wagyu dairy crosses, it’s different in the East and Midwest where they are mostly marketed into niche direct sales to consumers and restaurants.

Adam sees the Wagyu as a good fit for his dairy because he can optimize the assets he already has and feed them right with his heifers, instead of raising more heifers than his dairy needs. 

“We’ve had different repeat customers tell us the big thing they noticed is the roasts are so much better, with no dry spots,” Adam relates. “I didn’t think there could be that much difference, but there really is, and it seems the Wagyu x Holstein is a great cross for that.”

Even in Japan, the dairy cross is sought as an economical option of their preferred beef — owing to this compatibility. Holsteins deposit marbling in a manner similar to Wagyu — but the Wagyu genetics put the quality into overdrive.

Selling by halves and quarters is less work than selling by beef cuts. Buyers are getting a range of items with some options to customize how they get their portion processed. They can do a simple cut-and-grind or ask for special order items such as bologna.

Lightning Cattle Co. has been approached by restaurants in the area, but to serve them, Adam and Ben would need to use a USDA-inspected plant, not a state-inspected custom butcher. USDA plants are few and far between and booked well into the future.

“We’ve had no issue selling the meat, and we’ve not done any advertising,” Ben notes. “We figured if we advertised too much, we might not be able to meet the demand. We’re taking it step by step.”

To price the quarters and halves, Adam believes in being fair and reasonable.

“We go off what the steers are selling for at the New Holland auction,” he says. 

They look at the Choice and Prime steer price (not the dairy beef) and add a little to that for the Wagyu influence. The customer pays the liveweight price and the butcher’s fee. 

Adam and Ben help buyers understand what they are getting and their cost per pound of cut-and-wrapped beef by converting it on a dressed basis for an informational estimate. 

“It’s tough to create a market that doesn’t exist, but that’s what we’ve had to do,” Ben adds.

This is another reason the Lights have taken it step by step, giving themselves some growing room by spreading seed stock to other dairy farms for access to more calves.

Last fall (2021), they started their biggest group of crossbred calves that will finish out in 2023, double the number for 2022.

They have begun thinking about setting up a facebook page and had Lightning Cattle Co. T-shirts made, but they are still a bit cautious about advertising to be sure demand doesn’t get too far ahead of cattle coming up through.

The cousins like working with cattle, and they take pride in selling a finished product to others in their community. This also gives them opportunities for conversations with consumers about beef, dairy, and farming in general.

“Some people have heard of Wagyu beef from Japan. Some have heard you could pay $200 for a fancy 12-ounce steak, and some people don’t know much about it at all,” says Ben about the learning curve and the way crossbreeding makes this beef more economically accessible.

“What people really like is the idea of buying beef from farms, and that gets them interested in trying it,” he adds.

That’s the window of opportunity for the quality of the beef to sell itself into the future.

“It has been fun,” Adam admits. “It’s something different, and we don’t know where it will take us.”

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