U.S. Senate nutrition hearing seeks new national strategy

50-year crisis cited, but no mention of 50-year low-fat regime’s role

By Sherry Bunting, Farmshine, November 5, 2021

WASHINGTON, D.C. – “Half of the U.S. population is pre-diabetic or has type II diabetes, and one out of almost every three dollars in the federal budget goes to healthcare, with 80% of that spending on treatment of preventable chronic diseases,” said Senator Cory Booker (D-N.J.), chairman of Senate Ag’s nutrition subcommittee as he and ranking member Mike Braun (R-Ind.) began the hearing on the state of nutrition in America Tuesday, Nov. 2. 

Calling the situation a crisis, senators and witnesses cited statistics that have worsened over the past 50 years.

“Our healthcare costs today are 20% of GDP. In the 1960s, it was 7%. It has tripled in 50 years,” said Sen. Braun. In 1960, he said, 3% of the population was obese. Today it’s over 40%, with more than 70% of the population either obese or overweight.

“More shocking,” said Booker, “is that 25% of teenagers are pre-diabetic or have type II diabetes, and 70% are disqualified from military service” — with the number one medical reason being overweight or diabetic.

Witnesses and senators blamed the “epidemic” on a food system designed to solve 20th century problems of ending hunger by investing in cheap calories – especially carbohydrates. They indicated that 21st century goals should be focused on designing a food system that delivers nutrition and makes the nation healthier.

“We want to rethink the way we approach food and nutrition policy. Our lives literally depend on it,” said Sen. Booker, “This nutrition crisis we face is a threat — the greatest threat to the health and well-being of our country and a threat to our economic security and our national security.”

That’s why Senators Booker and Braun recently introduced bipartisan legislation to convene public and private stakeholders in what would be the second White House conference ever to be held on food and nutrition. The first was convened in the late 1960s, when then Senators George McGovern and Bob Dole formed a select nutrition committee in a time of food shortages and high prices.

That time-period was also when the precursor to the Dietary Guidelines was established, which by the 1980s had become the official and now notorious Dietary Guidelines cycle.

While Tuesday’s hearing continually hit this notion that 52 years later we have all of these devastating statistics, it was interesting that there was zero mention of the Dietary Guidelines. Those words were not uttered by any senator or any witness at any point in the over two-hour-long hearing.

Another item that did not pass through any lips Tuesday was the acknowledgment that 52 years of the low-fat dietary regime has prevailed and has progressively tightened its hold over school diets even as these statistics, especially on youth, have worsened into crisis-mode. 

The closest anyone got to mentioning dietary fat was when Senator Roger Marshall (R-Kan.), a doctor by profession, asked witnesses if they thought the CDC missed an opportunity to do public service announcements about “nutrition and building up our own immune systems” during the COVID-19 pandemic.

He talked about volunteering in the ICU and ER of a south Kansas hospital in the spring of 2020 when COVID was sweeping the land.

“There were eight ICU beds and 11 patients, all in their 50s, and all had diabetes or pre-diabetes. Immediately, I called the CDC and said, ‘this virus is going to assault this country.’” He observed that our rates of morbidity and mortality are higher with this virus than some other countries because almost half of the population is diabetic or pre-diabetic.

Sen. Marshall voiced his frustration: “We’ve had a year and a half of this virus, and I thought this might be an awakening for this country, that if we had a better, healthier immune system, that’s how you fight viruses.”

One of the five witnesses — Dr. Dariush Mozaffarian of the Tufts University Friedman School of Food and Nutrition Policy – responded to say that alongside developing vaccines, treatments and guidelines for social distancing, “the huge additional foundational effort should have been to improve our overall metabolic health through better nutrition. So, every time we talk about vaccines, social distancing, mask wearing, why aren’t we talking about nutrition?”

“Everything we need to know about nutrition I learned from my mother and my grandmother,” said Sen. Marshall. “We need to be using our medical assets for nutrition education. Doctors need to understand that Vitamins D, A, E and K are fat-soluble vitamins, so we need to be drinking our whole milk and looking at these general concepts.”

This was the hearing’s only – and subtle — reference to dietary fat. It was the only, but quiet, nod to any suggestion of the impact of federal government restrictions on the diets of children during school hours while their rates of obesity and type II diabetes continue to rise to epidemic proportions. Not one witness or senator delved into this topic in any substantial way.

Throughout the hearing, that seemed to focus on a new paradigm in food and nutrition, there were also strong references to a key part of the problem — the food industry is controlled by a handful of large multinational corporations providing nutrient-poor, addictive and ultra-processed foods.

“Farmers answered the call of a growing population and issues with malnutrition 50 years ago. Through innovation, agriculture makes more from less and works to protect our soils along the way. We’ve made progress but are still geared to address caloric intake, not the content of the calories,” said Sen. Braun. 

He focused his comments on the healthcare industry being the place to make new investments in nutrition as a preventive solution and indicated SNAP purchase restrictions are in order.

Dr. Angela Rachidi, doing poverty studies at the American Enterprise Institute said putting SNAP program restrictions on sugary beverages and incentives for purchasing fruits and vegetables would be positive steps to show SNAP is serious about nutrition. She referenced studies showing that three of the five largest purchase categories with SNAP dollars are sweetened beverages, frozen prepared meals, and dessert items.

Mozaffarian was the first of the five witnesses. He did not mention his Tufts University “Food Compass” project by name, which was published three weeks ago, nor did he mention the $10 million grant received three weeks ago from USDA to develop a “cultivated meat industry,” including assessment of consumer attitudes and development of K-12 education on cell-cultured meat.

“We are on a path to disaster,” he said, calling type II diabetes America’s “canary in the coal mine,” on which the U.S. spends $160 billion annually.

Describing current food and nutrition policy as “fragmented and inefficient,” Mozaffarian said: “Nutrition has no home, no body for focus or leadership across the federal government.”

Mozaffarian’s six recommended government actions paint a picture of a centralized national structure and authority for food and nutrition policy with emphasis on integration of research, the healthcare system, programs like school lunch, and ramping up new innovation startups entering the food system.

He stressed his belief that a “real national strategy” is needed, one that “reimagines the future food system.” He said the science and tools are already available to do this, to integrate into existing programs and make changes – fast.

Perhaps the “tools” Mozaffarian was referring to are within the new Tufts Food Compass he helped create, which ranked “almondmilk” and “soymilk” ahead of skim milk and far ahead of whole milk. It also puts chocolate milk and some types of cheeses near the bottom of the ‘minimize’ category, along with unprocessed beef. 

In fact, the only high-scoring dairy product found in the ‘encouraged’ category was whole Greek yogurt. Cheerios and sweet potato chips ranked higher than dairy products, including the whole Greek yogurt.

Also testifying was Dr. Patrick Stover of Texas A&M’s Agri-Life Center. He noted the public’s “lack of trust” in nutrition science. 

He stressed that the nation’s land grant universities are “a network of extraordinary resources, a national treasure” that benefits from having public trust but lost federal investment levels over the years. 

Stover said Texas A&M is now launching an institute for advancing health through agriculture as well as an agriculture, nutrition and food science center for non-biased research on the human, environmental and economic success of proposed changes.

He supports a “systemic approach to connect people to food and health,” an approach that involves everyone from farm to consumer. He said Agri-Life is positioned to lead such an effort through the land grant university system. 

Stover noted scientists involved in the precision nutrition initiative at the National Institutes of Health are starting to understand how individuals interact with food in relation to these chronic diseases.

“One size does not fit all,” he said.

Witnesses Dr. Angela Odoms-Young, director of Food and Nutrition Education in Communities at Cornell, as well as Dr. Donald Warne, director of public health programs at the University of North Dakota School of Medicine, both talked about the cultural aspects of food. They referenced differing experiences of populations separated from lands and cultures where food was accessible and how certain demographic populations are being targeted by fast-food advertising that is leading to higher rates of chronic diet-related diseases among native Americans and people of color.

Poverty and reliance on cheap highly processed foods was part of that discussion.

“Poor diets and overconsumption of calories are a major crisis,” Dr. Rachidi stressed as a former deputy commissioner of New York City social services overseeing the SNAP program. “Nutrition assistance programs have mixed success” providing food security but also contributing to the problem of poor nutrition.

She said current nutrition policies lack a cohesive strategy. On the one hand harsh restrictions in some programs and no restrictions in others.

“We have to acknowledge the reality, the billions we spend to improve food security are used in a way that is a major contributor to poor health,” said Rachidi.

At the conclusion, chairman Booker stressed his belief that there is a misalignment of government.

“The farmer’s share of the consumer dollar from beef to broccoli has gone down 50% in a food system where everyone is losing,” said Booker. “We are losing the health of our country, seeing the challenges with farmers and the disappearance of family farms, the issues of food workers, what’s happening with animals and the environment. Let’s not be fooled. This is not a free market right now.”

He noted that farmers are “stuck in mono-cropping” without incentives to move to more regenerative agriculture. “We love farmers. They aren’t the problem. We have to figure out a way to align incentives with policy decisions because it is out of whack.”

Asked by Booker to give a ‘business perspective,’ ranking member Braun concluded that the best place to implement a solution is to do it where the most money is being spent on the problem and that is the healthcare system. Food is a bargain, which addresses hunger, “but we need to reconstitute the quality of the calories,” he said, putting the emphasis on the nutrient density of foods.

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National Dairy Shrine 2021 Pioneer Dieter Krieg, ‘a trailblazer with energy, enthusiasm, dedication’

By Sherry Bunting, Farmshine, October 8, 2021

MADISON, Wis. – “It is impossible to overstate the impact Dieter Krieg and Farmshine have had on the dairy industry in 42 years visiting dairy farms and dairy events across the United States. His interviews with top dairymen and dairy leaders have implanted ideas of change to almost all his readers at one time or another over the years,” writes Carl Brown of F.M. Brown Sons, who nominated Dieter for the National Dairy Shrine Hall of Fame Pioneer Leader award.

On Sept. 30 at the National Dairy Shrine (NDS) dinner, Dieter was one of four 2021 Pioneers to be recognized.

Dieter Krieg

“Dieter has been a trailblazer in dairy journalism and occupies a special place in supporting and educating dairy producers and youth. I personally realized the impact that Farmshine was having during one of our Dairy Science Club spring trips,” writes Dale Oliver, Penn State Dairy and Animal Science assistant teaching professor in a letter of recommendation.

“Our group traveled to Arizona to visit some of the leading dairies in that state. One producer wanted to know (the students’) opinions about a recent article published in Farmshine. It was at that point that our students gained a perspective that this publication was not just reaching dairy producers in Pennsylvania but had begun to develop a much broader following,” Oliver said.

Yes, Dieter is known for thought-provoking editorials. A free press is not something he takes for granted, having left Communist East Germany with his family at the age of 10 for freedom in the United States.

Oliver notes that, “Dieter is a humble, caring man who does not seek attention, although he readily provides publicity to others.”

Surprise! There are more pictures and publicity on these two pages than Dieter may be comfortable with, but each one illustrates a connection that can be multiplied many times over — stretching far beyond the few examples here from the NDS awards dinner.
In fact, if you ask him what he has enjoyed most as a publisher, Dieter will tell you it’s the people.

Ever since the June NDS announcement of the 2021 Pioneer recognition, we have been hearing from some of those people — readers, producers, advertisers, colleagues, and former interns who credit Dieter as a mentor, “taking a chance” on them, “giving them a start” that blossomed into careers today that continue that network, touching the lives of others in the dairy industry.

The response has been so overwhelming, we can only capture the essence of so many responses.

Whether the first Farmshine off the press in September 1979 (right) or one of the most recent ‘favorite covers’ 42 years later in September 2021 (left), Dieter Krieg has been publishing the dairy news to Farmshine subscribers across Pennsylvania, across the United States and even in other countries 51 weeks a year. That’s 2,142 weeks, and it doesn’t get old. In that time, he has touched the lives of many as they have touched his. From the chronicles of Rudolph, his famed Oldsmobile driven over 730,000 miles to the most memorable April Fools’, and from the big stories and thought-provoking editorials to the weekly DHIA’s and announcements, Dieter has established a relationship with thousands of readers who look forward to Farmshine every week. The staff and contributors to Farmshine each week are grateful, and we echo what Dieter said in his award acceptance speech that the readers are to be thanked for helping make Farmshine what it is. After all, it’s about cows and farming, but it’s really about the people.

From the paper paste-up and wax-board days to the digital era, Dieter continues Farmshine’s mission of rising each week to cover farming and agribusiness as the first and likely only weekly dairy-focused newspaper with over 13,000 subscribers nationwide.

In his letter of recommendation, former Pennsylvania Holstein Association executive director Ken Raney explains that, “Dieter has ‘done it all’ for Farmshine, he is the editor, feature writer, advertising manager, layout, etc., as the paper has grown. His personal approach to stories has created friendships all over the world. Farmshine not only has current dairy information but features successful dairymen of all types, so readers can garner new ideas.”

Ken also describes Dieter as we know him, “an unassuming enthusiast who welcomes ideas, looks for innovative ways to share the dairy industry story and has been a leader in print media, before many publications of this type were available.”

Writes Stephanie Meyers of Merck, “I was Dieter’s first Farmshine intern in 1989. I stopped by the NDS reception to congratulate him and thank him for giving me my start in dairy journalism, communications and marketing. I’m so thankful he hired me and for teaching me the ropes of dairy journalism and encouraging me to pursue my dreams of a career in dairy communications and marketing. It’s a joy to see him recognized for his many contributions to the dairy industry and for his commitment to telling the stories of dairy farmers.”

Josh Hushon of Cargill writes of what it meant to also be an intern with the paper. “This award is so well deserved. Dieter took a chance on me as a summer intern before anyone else was willing. I was 19 at the time, didn’t really know what I was going to do in life, and had a minuscule portfolio of writing. Despite what I didn’t have, Dieter saw what I did have, which was a passion for the dairy industry and work ethic developed on our farm. He opened the first door for me and I am eternally grateful for that.”

Giving back what he learned, Josh seeks to mentor others and wrote a blog a couple years ago after looking back on his own career path and pointing out moments when the right mentor came along with the right opportunity at the right time.

“One of those mentors is Dieter Krieg, who I recently reconnected with through the Holstein Foundation. He was a huge mentor early in my career as I was learning how to be a storyteller and communicator,” writes Josh.

Andrea Haines echoes these sentiments. Today she operates her own business, ALH Word and Image, and she also looks back on her pivotal internship with Dieter at Farmshine.

“I am forever thankful for Dieter and the opportunity he and his family provided me early on in my career. Finding an ‘internship’ within Farmshine for two summers really taught me how to write, edit, piece together a newspaper (wax-adhered layouts), and most importantly, how to network with people of the dairy industry. I will never forget the many rides in Rudolph (the famed 730,000-plus mile Oldsmobile) and long nights putting together the newspaper,” Andrea recalls.

Karen Wheatley, another intern with a career in the dairy industry notes “Dieter was my mentor too, and the man who got me interested in ‘really’ writing!”

Former Lancaster Farming editor Andy Andrews notes that, “Dieter has been the voice of dairy agribusiness for four decades! He is the publisher and editor the industry has come to rely on; great reporting and fearless with his observations. Dairy farmers have been blessed with his hard work and ‘udder’ devotion.”

Dairy producers also express their appreciation, and friends recount stories. Dave Bitler of Berks County, Pa., notes that he has always been very proud to call Dieter a friend. Recalling the summer of 1973, Dave writes: “We milked together at Dr. Carl Troop’s south of Quarryville. I always enjoyed Dieter’s company and his sharing about his family’s history in Germany and their coming to the United States. Looking back on my life back then as a new high school graduate, I was probably annoying, but Dieter was always kind.”

John and Linda Kisner of northern Pennsylvania write their thoughts as Farmshine readers. Linda recalls Dieter driving through a local town and stopping for gas, seeing the paper that had pictures of their triplet calves on the cover. “He looked us up, came out and took pictures (in Rudolph). Dad loved it.”

“Sometimes it just takes someone in a position to shine a light on certain issues,” adds John. “I think being independent with his own publication has allowed him the opportunity to do that a few times over the years. Where would we be without that sort of initiative?”

Another Pennsylvania farmer, Jeremy Meck, recalls being in 4-H with Dieter as one of the CowsRus 4-H leaders. “I remember learning that he had a small barn and milked a few cows. Even though he was the editor of a great farming newspaper, he still woke up every morning to milk cows before work,” writes Jeremy. “He is a role model for the industry.”

So many more thoughts have been written, but this one brings us back full circle. You see, Dieter wanted to be a dairy farmer, to follow in his father’s footsteps. As his father and brother moved the dairy from Pennsylvania to Florida and grew it to over 500 cows in the 1970s, Dieter wanted to find a farmer to work for in Pennsylvania and maybe find a transition situation where he could work toward having a smaller farm of his own. He confesses that was the reason he took that first newspaper job as editor of the farm page in the Pennsylvania Mirror.

What better way to meet farmers and build connections?

In his last semester at Penn State in Dairy and Animal Science, Dieter had taken a creative writing course because he did enjoy writing letters to family still in Germany, and he enjoyed writing about life on the farm (which later became a popular Farmshine column).

Right off the bat, he innovated that farm page in the Pennsylvania Mirror using a photo of a barn and placing various ag news stories on the side of that barn.

“I was told it wasn’t normal newspaper style, but my goal was that people would not overlook the farm page,” Dieter recalls. To this day, Dieter loves creating page layouts and using big pictures.

It was a hit, and he was a natural, and he found that he loved the job. So the job that was taken originally to meet and connect with more farmers to potentially work into a farm management position turned out to be the calling he was born to follow, which led him to blaze a trail for a weekly all-dairy newspaper in 1979 — no small feat.

After 42 years, what has he loved most? You guessed it: the people. While there is satisfaction in writing the stories and putting the finished product together, for Dieter, it’s really all about the people.

Like agriculture, the newspaper business has its ups and downs, and getting started meant many years of long hours putting the paper together and much travel gathering news and stories. When he looks back, even those early 100-hour weeks, though trying, were enjoyable. Sitting at a banquet, for instance, isn’t really work when you enjoy it, he says.

The mission of Farmshine, he says, always was and still is to get the word out, to tell the story, to cover the issues.

When he looks back at how it all came together, Dieter told the NDS awards dinner crowd, it is obvious God’s hand was working through it because all the pieces came together even before he realized Farmshine would be born. He expressed sincere gratitude for all who had a hand in it, including those who saw something in him to encourage along the way.

In her letter, Mary Shenk Creek of Palmyra Farms notes that, “Dieter and his staff address all aspects of the dairy industry from commercially producing milk to the purebred sector and including alternative niche market opportunities. They do a wonderful job of highlighting individuals and unique accomplishments to shine a light on the personal side of our industry. Dieter is not afraid to tackle controversial issues and takes great effort to show an unbiased report while allowing editorials that stimulate thought.”

She sums up what so many feel, including me, having worked with Dieter on staff and in the later years as a freelance Farmshine contributor…

Mary says it so well: “The things I admire most about Dieter are his energy, enthusiasm and dedication. He is relentless in his commitment to serving agriculture and the dairy industry.”

Thank you Dieter for being a dairy journalism trailblazer, for starting Farmshine, the unique weekly all dairy newspaper 42 years ago, for shining a light, telling the stories, building connections, and touching the lives of others through the news, and so much more.

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Positive insights on domestic milk promotion: ‘There’s hope. We have work to do.’

By the end of the 3-hour discussion on milk marketing and future viability of U.S. dairy farms, hosted by the American Dairy Coalition on Sept. 30, over 40 people — producers and others from east to west — had flowed into the Monona Room at World Dairy Expo and an estimated 30 people attended online.

By Sherry Bunting, Farmshine, October 8, 2021

MADISON, Wis. – A new and different – essentially vigorous — paradigm in milk marketing and promotion was the focus of an American Dairy Coalition discussion in Madison on Sept. 30th during the 54th World Dairy Expo in Madison, Wisconsin.

Bill Gutrich, senior director of food industry engagement-USA with Elanco Animal Health shared his insights and experience having spent his career in the consumer-packaged goods sector for global brands like Coca Cola, McDonalds and Samsung before coming into animal agriculture three years ago.

“We have a great product and producers do a great job, but we need to increase domestic dairy consumption, specifically,” said Gutrich to an in-person audience of over 50 people (flowing in and out of the Monona Room of the WDE Exhibition Hall). Another 30 people attending virtually online.

The ADC event attracted dairy producer thought leaders from east to west and generated follow up discussion and good questions. ADC CEO Laurie Fischer said the discussion is a starting point and hopes to see allied industries that are committed to animal agriculture join in on the bandwagon to shift the milk message, the animal protein message, in the face of the accelerated barrage of new plant-based and lab-grown lookalikes.

“We need a group such as yourselves to help us move forward,” said Fischer. “We are in this together.”

Using IRI data from DMI, Gutrich sees opportunity in targeting the largest group of most loyal customers — milk-only households — along with the next largest sector of households with both milk and alternatives to remind them why they love milk. ‘Own the why’ instead of getting caught up in the ‘hows’ and ‘whats’ and processes and blends that respond to criticisms from the smallest and least loyal subsets of consumers. 

One statistic Gutrich shared that was quite revealing is that 51% of total sales in the milk section are fluid milk, but only 33% of the retail milk space is devoted to milk. On the other hand, he said, 9% of total sales in the milk section are plant-based non-dairy alternatives, but almost twice the space — 17% of the milk space is devoted to non-dairy alternatives because there are so many varieties.

With so many different brands and variations of non-dairy alternative products coming onto the market and ramping up rapidly, this supply chain effort is essentially crowding out real milk in a manner that is not consistent with true consumer demand.

Likewise, the anti-animal activists are small in number but loud in advocacy. In effect, the gap between perception and reality on messaging as well as shelf-space vs. sales is that smaller sales, smaller numbers flood milk’s space and take positive attention away from milk, but this is not necessarily by consumer choice.

If Gutrich had a magic wand, he’d likely look to make milk competitive in the total beverage market, to reframe the competition and look at milk’s share of all drinks instead of share of the milk aisle. For example, consumers love cold whole milk, so if the message puts that first, then already it is connecting with the most loyal sets of consumers and connecting to their ‘why’ to build growth from that solid point.

When innovation focuses mostly on sustainability, then fewer resources are devoted to getting the message right in connecting with what consumers want.

Bill Gutrich, senior director of food industry engagement for Elanco Animal Health had a positive and hopeful message about focusing on domestic consumption and shifting the milk message to “inspire consumer loyalty to animal protein.”

Gutrich’s insights and discussion are consistent with his role with Elanco engaging the food industry and connecting the food chain. He talks to companies and purveyors, and from those conversations, it’s clear, he said, the people attacking animal agriculture are from the outside, pushing in. They don’t want animal ag to exist, but these are not the people we need to connect with to build loyalty to animal protein.

As the son of a police officer, Gutrich said his personal mission is to elevate the level of respect people have for farmers, much like the efforts elevating respect for our country’s veterans and law enforcement.

He said it comes down to “inspiring consumer loyalty to animal protein.”

Having worked around talented marketers outside of animal agriculture, Gutrich said he has come into the animal protein sector seeing “how we market our beautiful, incredible products to consumers.

“Every dollar starts in the hand of a consumer over the counter,” he said, describing how good marketing starts with the ‘why’, not the ‘what’ and the ‘how.’

“What are the emotional needs you need to connect with?” he wondered aloud. “They will buy the why.”

Using a borrowed analogy of the Craftsman drill, he said the ‘what’ is the buyer wants a hole. The ‘how’ is the drill. But the ‘why’ is they want to do it themselves.

The ‘why’ is what wins customer loyalty and offers the potential for a premium, Gutrich explained, noting that the key is to identify the ‘why’ and attribute it, and then “own it. That’s what great brands do.”

For Starbucks, the ‘why’ is the whole coffee-drinking experience. For Mountain Dew it is the ‘energy.’

In the dairy sector, Gutrich gave the example of Sargento Cheese, where the ‘why’ is ‘The Real Cheese People.’

“What did Kraft do?” he asked. “They labeled their cheese ‘made without hormones.’ What does that have to do with my ‘why’?”

These types of labels introduce something scary to consumers, and it has been proven in surveys and market research that these claims have little to do with their ‘why.’

“What this actually does is undermine their trust in the brand and the category,” said Gutrich, “and in the long run it’s bad for both. People want to think about serving a rich protein food, and we’re talking to them about hormones.”

Good marketing talks about consumers. Bad marketing talks about products and processes, according to Gutrich.

“Loyalty is a feeling,” he said, explaining a successful strategy communicates with consumers about the why, not so much about the process, the sustainability. Yes, sustainability and processes need to be handled, but that’s not connecting with consumers on an emotional level about their ‘why.’

“Own your consumer’s ‘why’, don’t let your critics determine your ‘why,’” he said. “All great brands have critics, but they handle the criticism separately, and keep marketing to why people love them.”

Gutrich gave some vivid emotional-connection examples: “Don’t you love how butter melts on your raisin toast or your cold milk on your cereal?”

In another non-ag example, he showed how Michelin tires own the safety-why, Goodyear owns performance. They keep their whole message consistently on their consumers’ ‘why.’

“Protein is hot,” said Gutrich. “Why aren’t we owning protein?”

The peanut butter brands own protein, and people believe peanut butter to be higher in protein than it is.

“We own protein,” said Gutrich about animal agriculture. “But instead of owning it, we create confusing talking points about the ‘whats’ and the ‘hows’ instead of owning the ‘whys.’”

Gutrich noted that supermarket scanner data show how consumers vote with their dollars, but when producers are told that they must ‘own’ sustainability because 85% of consumers want to see it and want to prioritize climate impact in their food choices, the question becomes, how were those questions asked?

When consumers are questioned with an ‘aided awareness’ style of questioning, of course they will say yes. But that percentage drops to 9% when the question does not include ‘aided awareness.’

Among consumers under 23, the Generation Z, Gutrich shared surveys showing this generation to have a higher overall level of brand loyalty (68%) compared with millennials (40%).

“There’s hope,” said Gutrich.

On fluid milk sales, specifically, he observed the well-known saga of sales decline over time, and the steep decline since 2000, but he has a different perspective on it.

“The dairy industry did this to themselves with over 10 years of ‘buy my milk with no hormones,’” he said. “Instead of focusing on your consumer’s ‘why’, the industry opened this chasm of 13% for milk alternatives to climb in.”

He analyzed domestic consumption figures from 1950 to the present, noting that domestic consumption is the issue, and it’s where the focus most likely should be. When domestic consumption growth is put beside U.S. population growth, the sales growth ultimately shows that dairy has “lost its share of stomach.” This is looking at domestic data only, excluding export sales.

“Ultimately, this means we have work to do,” said Gutrich. “How do we get back to the 1950s?”

Well, there’s no time-machine; however, he had a positive message about this, stressing that the non-dairy alternatives “are not going to take us down. Milk is in almost 95% of households. Let’s worry about our own sales growth and not worry about the alternatives.”

Breaking out the percentages, Gutrich showed that 94% of households include milk, 42% have both milk and alternatives, 3% are exclusively plant-based, and 52% are exclusively milk.

A successful brand would look at that breakdown and say: “We want to grow our loyal customers and go after the people that are closer to the ones that love milk. We want to remind them why they love milk so much.”

But instead, there are all of these triggers in the way and all of these other conversations that move the message away from the consumer’s ‘why,’ – away from the ‘why’ of the loyal or closest to loyal consumers fluid milk can build from.

“If we can continue to do better on these triggers like animal welfare, environment, carbon footprint, that’s fine, but we make it worse by talking a lot about it,” he said. “Get the marketing right. It’s about balance. The packaging dynamics are also amazingly important.”

To be continued



Ag Secretary says ‘Dairy will change’, economist digs into how, why

Using a graphic pulled from the September 10, 2021 edition of Farmshine in which a follow up story ran about Danone dropping 89 organic dairy farms from its Horizon brand — all of its Horizon farms in the Northeast — Bozic explained that the ‘social mission’ of cooperatives is to market all of their members’ milk. He said the “primary function of the future” for the Federal Milk Marketing Orders — as an extension of the cooperatives — is to ensure market access for dairy farms. “Market Orders are there to ensure orderly consolidation at a humane pace,” he declared.

By Sherry Bunting, Farmshine, Sept. 24, 2021

HARRISBURG, Pa. – ‘Turning the page’ was the theme for the annual Financial and Risk Management Conference where key takeaways about a changing dairy industry were presented.

The conference was hosted by the Center for Dairy Excellence Sept. 21 in Harrisburg.

Pennsylvania Secretary of Agriculture Russell Redding summarized his own thoughts: “I am still very positive about dairy, but dairy will change. It is changing,” he said.

The Center’s risk management educator Zach Myers set the stage for attending lenders, vendors, producers and industry talking about Dairy Margin Coverage and Dairy Revenue Protection and how these programs have worked (more on that in a separate article.)

Digging into the stress — the ‘change’ — was Marin Bozic, University of Minnesota associate professor of applied economics and dairy foods marketing, who also serves as facilitator for the Midwest Dairy Growth Alliance. He dug right into how and why, discussing some of the Federal Milk Marketing Order complexities, industry trends and pricing relationships. He made the case that more flexibility, competition and innovation are needed in the Federal Orders for a “level playing field” so winners and losers can “self-select.”

Bringing up the 89 organic producers Danone will drop from Horizon next year, Bozic said it is an example that, “One new farm in Indiana replaced 89 or 90 farms in the Northeast, and they can do that. There is nothing illegal about it. They could say they have a fiduciary responsibility to stakeholders and are minding their bottom line, but none of that helps you if 90 producers get dumped in a year.”

He pointed out the “social mission” of the cooperatives is to leave no member behind, so remaining an independent producer carries more risk today than in the past.

Bozic connected the dots to say the “primary function of the future for Federal Milk Marketing Orders — as an extension of the milk cooperatives — is to ensure market access for dairy producers.

“Market orders are there to ensure orderly consolidation at a humane pace,” he declared.

That’s a change from the central promise of the FMMOs today, which Bozic described earlier as “broken.”

“To navigate our businesses over the next year and longer,” said Bozic, “we have to count the passes and see the gorilla” — a nod to the visual exercise he had the audience participate in.

Bozic mentioned a few gorillas in milk. Gorillas in the FMMOs, in risk management, in dairy markets and in the macroeconomic situation – what else is going on in the world.

He showed graphs of what Producer Price Differentials (PPDs) looked like for the Northeast in 2020, the $4 and $5 negatives that represented cash flow bleeding, equity bleeding.

While the futures show the view out to the horizon over the next 6, 12, 15 months that would suggest there won’t be a repeat of that carnage, Bozic cited some of these risks, or gorillas, in the market and in world events that could represent shocks that can make the whole thing “go haywire again.”

Observing that the FMMOs are not the same today as when they were designed many decades ago, Bozic stepped conference attendees through the various long- and short-term impacts that reduce PPD, such as declining Class I utilization compared with increasing Class IV utilization and production.

“Orders were designed around the assumption that there would be plenty of fluid milk usage (as a percentage of total production), and we can just take it and designate it to be the highest and use those funds to make everyone whole,” said Bozic.

“The central promise of the FMMOs is that if your milk is as good as your neighbor’s, you get paid the same, so one farmer does not bid against another for market access and a good price,” he asserted. “That promise is now getting broken, not as much here, the East Coast FMMOs still have Class I.”

The next effect in the Northeast is the rise of protein tests. This impact comes through two channels where higher protein reduces PPD, the economist explained.

“Envision FMMOs as all processors paying into the pool and then taking from the pool. First they pay to the pool with classified pricing based on their respective milk solids. Class I pays on pounds of skim milk as volume, not on protein pounds,” he explained. “Even if sales are the same and the only thing that changes is protein, those (Class I) processors would pay the same amount (on skim) into the pool and take more money out (on protein) so there is less money remaining and a lower PPD.”

The second way higher protein production affects PPD is when the value of protein is lower in the powder than it is in the cheese. The butter/powder plant pays to the pool on nonfat solids price but takes money from the pool on protein price, “so that spread between the value of protein in cheese and powder also leaves less money for PPD,” said Bozic.

He explained the Class III price as an index of butterfat, protein and solids, in a straight formula that equals the class price. “When Class III price is higher than Class IV price, the predicted PPD for the Northeast Order declines,” said Bozic. “It’s almost linear.”

Conversely, when IV is above III, PPD goes up. “This has to do with paying the pool based on protein and nonfat solids, but when handlers take money out of the pool for components, everyone takes protein price leaving less money in the pool for PPD.

Bozic explained the demand shock to this system when the Food Box program “focused on smaller packages of cheese to put in every box. They didn’t take bulk powder and butter. So we went from a record low cheese price on the CME to a record high and no one expected this.”

The pull of 5% of the cheese supply for immediate delivery had everyone scrambling, said Bozic.

The amount of spare cheese available was not as high a volume as the government wanted to buy so cheese went from being long to short, and the price skyrocketed. This translated to an historically higher gap between Class III and IV prices as wide as $10 apart.

So why not just send more milk to make cheese? Bozic maintains that Class IV processing is accustomed to “balancing” fluid milk seasonality so there is extra capacity in that system.

Not so with Class III because those plants already run at capacity. “That’s the only way processors of commodity cheese make margin is to run at capacity, so when the demand shock came, and spare product was used up, there was no spare capacity and the price went higher. That was the main driver of negative PPD in 2020,” said Bozic.

Will it happen again? Bozic doesn’t foresee Food box programs with the same intensity in the future, but, “yes, it can happen, but I would say you need to have a pandemic in an election year. Don’t count on a program like this.”

The industry did ask USDA back in the 2008-09 recession to buy consumer packaged cheese instead of bulk commodities, so it could move instead of being stored to overhang the market later. That wasn’t working either.

“Now we understand that this other method disturbs PPDs so the dairy industry is united behind a more balanced approach,” said Bozic, describing the next iteration of purchases through the Dairy Donation Program will not be as aggressive in moving the markets by three orders of magnitude.”

Bozic said quick rallies and crashes impact PPDs also because of advance pricing on Class I based on the first two weeks of the prior month and announced pricing for the other classes at the end of the month.

Bozic explained why the change in Class I pricing was made: “The dairy industry wants to attract new distributors like Starbucks and McDonalds that are used to hedging their input costs. They don’t want to change prices every month. They want it to be what it is for a year, so the industry wants stable, predictable milk price costs to win favor with new distribution channels by making it easier for them to hedge.”

He said the new average plus 74 cents was designed to be revenue neutral. Looking forward, when Classes III and IV have less than $1.48/cwt spread, PPD under the new system is higher than under the old. But the most it can be higher is by 74 cents on Class I, which translates to 20 cents on the blend price.

The best case scenario is to add 20 cents to the blend price, but when Classes III and IV are far apart “the PPD can go haywire. Bottom line, the upside benefit of the averaging method with 74-cent adjuster is limited but the downside risk is big,” said Bozic.

Questions of science abound, public is clueless, yet USDA seeks ‘public comments’ on labeling of lab-grown cells by Dec 2!

This infographic is an oversimplified laboratory depiction of the ‘cell cultured meat’ process. On Sept. 3, 2021, USDA Food Safety and Inspection Service (FSIS), which will oversee its harvest, processing, packaging and labeling, announced proposed label rulemaking and a 60-day comment period (NOW extended to Dec. 2, 2021) to prepare for market entry. FDA will oversee the sourcing, collection and growing of this un-natural protein process. These products are expected to hit the U.S. market in 2022 and we might not know if they are included as extenders or replacements if labeling is poor. Istock image

UPDATE: The comment period at the Federal Register has been extended an additional 30 days to December 2, 2021

By Sherry Bunting, Farmshine series

WASHINGTON, D.C. — How should ‘cell cultured meats’ be labeled? That’s a loaded question considering how many unknowns surround the commercial production of these lab-grown lookalikes — starting with what are they, really?

USDA Food Safety and Inspection Service (FSIS) announced a 60-day comment period as part of its advance notice of proposed rulemaking in the Federal Register Friday, Sept. 3. The agency seeks “specific types of comments and information that will inform the process of developing labeling regulations for meat and poultry products made using animal cell culture technology.”

Comments are now due by Dec. 2, 2021 and must reference Docket FSIS-2020-0036.

They can be submitted directly here or by going online at the Federal eRulemaking Portal at https://www.regulations.gov and following the on-line instructions; or mail comments to Docket Clerk, U.S. Department of Agriculture, Food Safety and Inspection Service, 1400 Independence Avenue SW, Mailstop 3768, Washington DC 20250-3700. 

In a press release, FSIS officials said ‘cell culture meat’ is a terminology the federal agencies use internally, but this is not necessarily the nomenclature to be used in consumer product labeling.

The actual Federal Register notice is lengthy, explaining that the labels for cell culture products fall under FSIS jurisdiction and “will be subject to premarket review under the same process as other special statements or claims. This will ensure that labeling for products developed using cell culture technology are not false or misleading, that labeling requirements are applied consistently as these novel products enter the marketplace, and that the label provides the necessary product information for consumers to make informed purchasing decisions.”

To-date, FSIS has already provided for a “generic approval” of labeling features, statements, and claims based on “demonstrated prevalent industry understanding of the effective application of those features, statements, or claims and consumer understanding of labeling statements.”

However, the document also notes that there is currently “no widespread industry understanding of the labeling requirements for cell cultured meat and poultry products” and that “consumers have not yet had experience reading these types of labels.”

Furthermore, FSIS will have to determine a process for approving additional claims on the labels of these new and combined products.

The docket language suggests that FSIS already considers these proteins analogous as derivatives of the animals from which the original cells are sourced. But are they? Even scientists debate this assumption.

As billionaire-invested startups have joint-ventured with some of the world’s largest food processing companies, much money is being thrown at certain technology hurdles to avoid having to explain the unsavory aspects of the cell culture process to the public — as these lab-grown un-natural proteins inch their way closer to commercial market entry, especially on boneless products like ground beef and chicken tenders and patties.

The label rulemaking step comes two years after the FDA and USDA entered into a joint agreement to each take responsibility for different halves of the ‘cell culture’ process.

The March 2019 agreement came after a summer 2018 public meeting previously reported in Farmshine, for which thousands of comments and two petitions have been logged. 

In 2018, the U.S. Cattlemen’s Association (USCA) filed a petition requesting that FSIS limit the definition of ‘‘beef’’ to products derived from cattle born, raised, and harvested in the traditional manner, and thereby prohibit foods comprised of or containing cultured animal cells from being labeled as ‘‘beef.’’ The petition similarly requested the same for the definition of “meat” and other common meat terms on labels.

In 2020, FSIS received a petition from the Harvard Law School Animal Law and Policy Clinic requesting adoption of a labeling approach that “respects First Amendment commercial speech protections” and specifically establishes “a labeling approach that does not require new standards of identity and does not ban the use of common or usual meat or poultry terms.”

This came after over 6000 comments were received on the U.S. Cattlemen’s petition. 

In the current rulemaking docket, FSIS states that the comments came from trade associations, consumer advocacy groups, businesses operating in the meat, poultry, and cultured food product markets, and consumers with “most comments opposing the (cattlemen’s) petition overall; however, nearly all generally agreed that cultured meat and beef should be labeled in a manner that indicates how it was produced and differentiates it from slaughtered meat products.”

To some, that kind of interpretation would mean ‘cultured beef without the cow’; to others a better definition would be ‘un-natural beef grown from gene-edited, growth-hormone-promoted laboratory cell cultures.’

Here’s the problem. The lengthy Federal Register docket does very little to explain the real process by which cell cultured un-natural protein is designed and grown before it is harvested, processed and packaged.

The docket includes a description of ‘cell culture’ meat and poultry that fails to specify any of the characteristics, even those that are being questioned by experts in science journals – things that consumers should know and understand via crystal-clear differentiation.

For example, cell culture fake-meat comes from stem cells that are identified and separated from muscle tissue of cattle, pigs, poultry and certain fish. New “continuous cell lines” are being developed from these stem cells using “transformation” processes (gene editing) to make them “immortal.” 

In other words, cells normally have a finite end to their growth, but continuous cell lines — under the right controlled environments — are ‘designed’ to keep dividing and growing, continuously, like a malignancy, without an end point.

Also, the ‘growth medium’ for these ‘cell cultures’ contains Fetal Bovine Serum (FBS), growth promoting hormones, and, when needed, antibiotics and fungicides. The controlled environment provides the exchange of oxygen and carbon dioxide akin to animal respiration, and the temperature must be warmed constantly to be the internal temperature of the bovine to keep the cells from dying. At a certain juncture in the process, the growing cells must be ‘fed’ amino acids and carbohydrates.

Reviews of chemical replacements for Fetal Bovine Serum (FBS) are mixed. Some showed the continuation of cell growth was not consistent. Others showed changes happened within the cells when the growth medium included artificial replacements for the FBS. Portions of the veterinary and medical industries also rely on FBS for culturing, and some reports indicate increased importation of FBS, already, for those uses.

Any label claims about nutrition, environmental footprint, possible changes to the actual cells due to the composition of the growth medium, and so forth, are all based on smaller-scale laboratory observation and scale speculation, while consumers have literally zero understanding of the process, and some scientists even question whether the nutrition profiles, taste and texture are similar enough to meet consumer expectations for real meat and poultry. 

These are standards of identity issues.

Here’s the other key issue for USDA’s rulemaking on ‘cell cultured meat’ labeling… USDA Food Safety and Inspection Service (FSIS) only regulates the back half of the equation. In March 2019, the agreement between USDA and FDA was to “jointly oversee the production of human food products made using animal cell culture technology and derived from the cells of livestock and poultry to ensure that such products brought to market are safe, unadulterated and truthfully labeled.”

Specifically, this agreement delegates the oversight of cell collection, growth and differentiation to the Food and Drug Administration (FDA). Then, at the stage of “harvest” FDA transfers oversight to USDA’s FSIS, which oversees the cell harvest, processing, packaging and labeling of the products.

According to the FSIS rulemaking notice, the agency believes its current food safety and HACCP systems for real meat and poultry are already “sufficient” to be “immediately applied” to the harvest, processing and packaging of these lab-grown lookalikes and that they are only looking at this final labeling piece. This gives us a clue where the labeling is headed.

Specifically, FSIS seeks comments and information from stakeholders over the next 60 days regarding these key areas of the labeling process:

— Consumer expectations about the labeling of these products, especially in light of the nutritional composition and organoleptic qualities (taste, color, odor, or texture) of the products;

— Names for these products that would be neither false nor misleading;

— Economic data; and

— Any consumer research related to labeling nomenclature for products made using animal cell culture technology.

It will be difficult for true consumer advocacy groups (not meat and poultry industry trade groups who are mostly on board for the mix-and-match) to fully consider their views on the above questions. This is further blurred by the oversimplified FSIS description of the cell culture process that does not include any reference to specific characteristics.

For example, the definition does not mention hormones as inputs, it mentions ‘growth factors’. It doesn’t talk about continuously dividing cell lines, but rather ‘creating food’.

In another section, it doesn’t mention FBS, hormones, antibiotics as inputs but rather simply states: “cells are retrieved and placed in a controlled environment with appropriate nutrients and ‘other factors to support growth’ and cellular multiplication. After the cells have multiplied, ‘additional inputs such as growth factors,’ new surfaces for cell attachment, and additional nutrients are added to the controlled environment to enable the cells to differentiate into various cell types.”

The use of innocent code words belie the specifics. 

Of course, states FSIS about the process: “Once produced, the harvested cells can be processed, packaged, and marketed in the same, or similar, manner as slaughtered meat and poultry products.”

Nowhere in this description does it mention the gene editing of the cells to get them to transform for continuous multiplication and growth, nor what evidence exists that consuming such cells is safe. Consumers will want to know what they might be consuming once the world’s largest meat processors begin to use cultured cells as real meat extenders, diluters and substitutes.

Nowhere in this description does it mention the hormones and growth promotants that are the necessary “growth factor inputs” because the cells are growing on their own without the animal’s body, designed by God, to provide the natural hormones for natural growth with natural end points.

Nowhere in this description does the docket mention other clear differences between ‘cell cultured’ un-natural protein vs. real natural meat and poultry. The description suggests they are ‘designer’ derivatives of the real thing, opening the door to claims of being more efficient with less environmental impact. Based on what? A reduction in cattle and other livestock numbers?

Like we’ve seen in dairy with plant-based fakes and lack of standards enforcement by FDA, these ‘novel’ products will get to do the more-than / less-than comparative marketing off the real natural standard while consumers assume all other aspects are equal – when clearly they are not.

Scientific journals such as Frontiers in Nutrition have published scholarly articles pointing out the speculation involved in what this process will look like at commercial scale and what impact it will have on the nutrient characteristics, especially micronutrients like iron and B12, that come from the animal’s interaction with its natural environment. (Even the scaffolds the cells grow on will have methods for stretching cell blobs to simulate movement.)

Some scholarly articles point out that even the environmental claims are suspect because land and water use comparisons for cattle are predominantly what is used in feed production. The lab-grown cell cultures will also have to be “fed”. But they won’t spend part of their ‘lifecycle’ grooming carbon-sequestering grasslands or contributing to planet health in the biogenic carbon cycle.

Furthermore, writes one scientist, the warming required for these cell cultures to grow in bioreactors also create CO2 emissions that are long-lived — potentially adding to the buildup of long-term GHG, whereas the methane emitted from real cattle is short-lived and in fact stable and declining when viewed on a total nutrients per animal basis vs. history. This means, what is seen as a reduction in CO2 equivalents for methane based on the short-term heat-trapping side could be more than lost on the long-term CO2 buildup side, a tough fix down the road.

The problem with climate and environmental label claims is that they are based on speculation about unknowns for un-natural cell culture proteins and are compared to only part of the real story about real natural livestock.

All of these unanswered questions should be part of any USDA FSIS rulemaking process on labeling.  These proteins should be labeled as ‘experimental’ and ‘un-natural’ until processes are widely known and understood by scientists, agencies, industry and consumers.

In the Sept. 2 press release, USDA Deputy Under Secretary for Food Safety, Sandra Eskin, states that, “The (proposed rulemaking) is an important step forward in ensuring the appropriate labeling of meat and poultry products made using animal cell culture technology. We want to hear from stakeholders and will consider their comments as we work on a proposed regulation for labeling these products.”

Perhaps what USDA needs to hear from commenters over the next 60 days is that there is not enough public information about how these un-natural proteins are sourced, grown, and gene-edited — or their true nutritional and environmental profiles — to call them beef or meat with a simple qualifying statement few will truly understand.

Proponents of labeling cell culture proteins as meat because the cells are derivative are already whining to FSIS about how new labeling procedures or standards of identity would “stifle innovation.”

Individuals, businesses and organizations should be standing up for the consumer’s right to know what they are consuming and what production processes they are supporting – un-natural cell factories or natural meat raised by farmers and ranchers. There are also consumer health and nutrition questions on the FDA front end that the labeling needs to address accurately on the FSIS back end.

Just because the initial cells come from a cow or a chicken or a pig, doesn’t mean the un-natural ‘culturing’ process and resulting blobs of cells, once consumed, will behave in our bodies like — or contain the same properties as — natural muscle meat from a cow or a chicken or a pig.

Processors will be able to swap a percentage of this for that and barely change their labels if new standards or full descriptions are not used. 

Labeling should not give the appearance that this is simply meat without the animal. Some would argue this is Frankenfood. Some would argue this is experimental protein that should have to go through rigorous safety tests on the long-term impacts to health and nutrition. But the climate urgency of the United Nations Food Summit this month is already alluding to fast-tracking these “innovations”, applauding Singapore and China for moving forward most aggressively… to save the planet of course.

Perhaps the question to ask is this: How will labeling clearly differentiate so consumers have a clear choice and farmers and ranchers have a real chance… 

The dairy industry is facing this music on its own score with the FDA currently evaluating standards of identity for milk and dairy and looking at the new bovine DNA-altered yeast/fungi/bacteria excrement posing as dairy protein analogs without the cow. Through a process that is in some ways different and in other ways similar to cell culture proteins, the bioengineered yeast excrements are being called “designer proteins from precision fermentation.” 

The latest marketing twist is to say the bioengineered yeast are “10 to 20 times more efficient feed converters than cows.” These proteins are already being marketed to global processors of dairy foods as ‘stretchers’ and ‘functional’ ingredients, even as ‘carbon footprint enhancers.’

The economic concern for producers on both counts – meat and dairy – is dilution of their products and captive supply price-control of their ‘markets’.

The concern for consumers is the long-term healthfulness and safety of these ingredients and the increased potential for global food control in the hands of a few, with China already figuring prominently in the protein concentration manufacturing industry, globally.

This labeling discussion is too important to ignore, too important to allow oversimplification. Some in the industry say we must encourage and work beside these new forms of food production to end hunger, control climate change and feed everyone in the future. But the foundation premises of these beliefs are not settled science. 

The simple play here, by the tech sector to align and dominate the food industry, is to position these un-natural proteins as helpful analogs grown or cultured or fermented without the animals, that these products are needed to supplement animal-sources and reduce environmental impact of livestock, that climate change urgency requires regulatory fast-tracking, and that simple process-qualifiers on a label will differentiate it while making it palatable to consumers. 

Will consumers be led to believe these “innovations” are in all other ways the same as the real thing… when in fact they are not?

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‘Got milk, PA? Ag Sec awards $400,000 Farm-to-School, but where’s the milk?

PA Farm Bill Farm-to-School education grants aim to bridge the gap between children and the food system by connecting them to the fresh, healthy food available from Pennsylvania agricultural producers in their community and the surrounding areas. The 39 grants announced April 30th, totaling $400,000 for 2020-21, and they are thin on real dairy even though real dairy is 37% of Pennsylvania’s agricultural economy. Composite image by Sherry Bunting

By Sherry Bunting, Farmshine, May 14, 2021

HARRISBURG, Pa. — Increasing childhood nutrition and agricultural awareness is the stated purpose of $400,000 in grant awards made recently as part of the Pennsylvania Farm Bill.

On April 30th, Pennsylvania Secretary of Agriculture Russell Redding announced 39 Farm to School grants of up to $15,000 each “to improve access to healthy, local foods and increase agricultural awareness opportunities for children pre-kindergarten through fifth grade.”

The trouble is, among the 39 projects receiving the total of $400,000, dairy is not mentioned, even though the Secretary recently confirmed when asked by state senators that dairy accounts for 37% of the Commonwealth’s agricultural backbone.

(As reported in Farmshine April 23, the Secretary also evaded Senate questions about legalizing whole milk as a simple choice for children in Pennsylvania schools, citing instead that the Dietary Guidelines maintain three servings of dairy a day and that the industry should focus on all the dairy products in school meals.)

“The children of today are the future of Pennsylvania agriculture,” said Redding in a press release announcing the $400,000 in Farm to School grants that are part of the PA Farm Bill’s 2020-21 budget cycle.

“Reviewing these 39 projects, and their goals to invest in programming that not only improves childhood nutrition but gives them opportunities for first-hand agricultural experiences to grow their knowledge and awareness, I see a bright future for the industry that feeds Pennsylvania,” Redding stated.

According to the Pa. Department of Agriculture statements, this grant program “aims to enrich the connection communities have with fresh, healthy food and local producers by changing food purchasing and education at schools and early childhood education sites.”

Any school district, charter school or private school with pre-kindergarten classes, kindergarten, or elementary through fifth grade was eligible to apply.

This week, Farmshine questioned the Pa. Department of Agriculture about the glaring absence of milk in the list of 39 grants awarded. Most of the grants involved school gardens and were tied to local produce grown in Pennsylvania. Some were projects linking to local poultry and eggs.

Dairy and beef were not mentioned at all. The only (not really) dairy reference in the Department’s press release was a grant to the Dubois Area School District in conjunction with Danone North America.

Before thinking Danone represents dairy in this case, think again.

Dubois is home to Danone’s flagship plant-based dairy-free alternative ‘yogurt’, ‘cheese’ and powdered ‘nutritional’ beverage plant.

In fact, Danone’s 180,000 square foot facility on 24 acres of the former airport in Clearfield County is the largest plant-based dairy-alternative plant in the United States.

At the 2019 ribbon-cutting ceremony for Danone’s multi-million-dollar plant-based expansion, the facility’s director, Chad Stone, highlighted “flexitarian” eating patterns as “people are interested in lessening their impact on the environment through diet.”

This plant-based “environmental” theme is already being pushed into school curricula and school foodservice at the national level (see related article in this edition of Farmshine).

In the Pa. Department of Agriculture’s response to our questions about the Farm to School grants lacking dairy, spokesperson Shannon Powers replied to identify five of the 39 grants as “including a dairy component in their application.”

One of the five she highlighted is the Clearfield County grant of $14,985 to the Dubois Area School District for “experiential learning and curricula” that includes “life on a dairy farm” via a field trip to a dairy farm (Kennis Farm was identified in the application). Powers also identified Danone as “a major dairy producer” but indicated that this grant provides experiential learning and curricula through the Danone facility in Dubois “that produces plant-based foods and beverages.”

Instead of using real local milk to make real yogurt, cheese and nutritional beverage powders, this Danone plant specializes in bringing in almonds, coconuts and cashews to make dairy substitutes as a so-called means of reducing “environmental impact” with new “choices” on grocery shelves.

(It’s hard to imagine how the almonds, cashews and coconuts listed in the Vega Protein, So Delicious and Silk brand yogurt, cheese and powder made at the Dubois plants could be locally-grown in Pennsylvania, a top-10 real dairy milk-producing state that is admittedly in ‘search’ of more dairy processing capability).

As for the other four Farm to School grants the Department identified in an email response as containing a dairy component, they are as follows:

In Erie County, a grant for $15,000 to the U.S. Committee for Refugees and Immigrants will do an experiential learning project that includes a dairy field trip.

In Lawrence County, the LCSS Healthy Start Micro Farm Project received $10,000 for a project that includes the purchase of local cheeses and other foods along with a school garden to supply the school kitchen.

In Lackawanna County, a grant of $3,356 to the Bright Future Learning Center was awarded to distribute Community Supported Agriculture (CSA) boxes to preschool children and includes farm field trips. The application noted that fresh local milk would be included in the CSA produce boxes.

In Tioga and Bradford counties, a $15,000 grant was awarded to Stepping Stones Preschool and includes a field trip to a dairy farm to learn about the cheese-making process.

“The PA Farm Bill’s Farm to School grants are awarded to schools and other educational entities to foster early interest in and exposure to agriculture careers and to encourage students to consume fresh, locally-produced foods and develop healthy eating habits,” writes Powers in her Pa. Department of Agriculture response to Farmshine’s questions.

She notes that while dairy is not specifically mentioned in applicants’ proposals, “dairy destinations and themes are included among field trips, and dairy is part of curricula schools develop with grant funds.”

Dairy products are already “virtually always among PA-produced foods served in schools but getting locally-sourced produce into school lunch programs is a greater challenge,” Powers as Pa. Dept. of Agriculture spokesperson stated.

While dairy has been a predominantly ‘local’ product in schools over the years, today, local dairy’s position in Pennsylvania schools is waning. A good example is the removal of the choice of whole milk from schools in 2010 when the federal government tied school lunches more closely to USDA’s flawed Dietary Guidelines.

The most local dairy product available to any school is whole milk. Instead, today, with only fat-free and 1% low-fat milks permitted in schools, and a complex set of rules for meals to mandatorily conform to Dietary Guidelines, large foodservice companies – including PepsiCo – promise ‘guaranteed compliant’ meals and beverages, and schools are moving toward this type of sourcing.

In fact, the beverages students purchase after discarding fat-free and 1% low-fat milk are anything but local or nutritious, but they meet USDA government guidelines because they contain no fat and are formulated with high fructose corn syrup and artificial sweetener combinations to meet calorie thresholds.

According to the Pa. Department of Agriculture, there were 57 applicants for this second round of Farm to School grants. The Farm to School grants were created under the 2019 PA Farm Bill and were funded again in 2020 and proposed for re-funding in the Governor’s 2021-22 budget.

When asked about grant applications that were denied, Powers replied: “Applicants not awarded grants did not meet the criteria or submitted incomplete applications. None of those applications included a dairy element.”

Our questions to the Center for Dairy Excellence, asking if they were aware of any Farm to School grants applications that involved curricula to highlight dairy or connect schools with local dairy, were not immediately answered; however, the Pa. Department of Agriculture in its response was quick to point out its other programs for dairy, as follows:

“The PA Dairy Investment Program in 2019 and Dairy Indemnity Program in 2020 are examples of state funding that has been available exclusively for dairy producers,” writes Powers. “In addition, the PA Farm Bill and Ag research grants include research dollars devoted to developing healthy, economical feed and bedding and controlling disease; conservation dollars to help improve soil and water quality and ensure future productivity; an Agricultural Business Development Center to help connect farmers with funding, grant resources, transition planning and a host of other support that benefits all Pennsylvania producers, including dairy.”

Powers also mentioned “Preferential tax programs like Clean & Green, REAP, Beginning Farmer Tax Credits, and a number of grants from other departments, including the departments of Environmental Protection and Community & Economic Development are available to dairy farmers” and reminds dairy producers seeking financial and planning resources from the state and private partners to “contact the PA Agricultural Business Development Center or the Center for Dairy Excellence, another state-funded entity created specifically to support the needs of PA dairy farmers.”

In a nutshell, the Department of Agriculture views dairy products in schools as already being local and is focusing Farm to School grants on getting other local products, especially produce, into schools. The Department was quick to identify a handful of the 39 Farm to School grants that will include a dairy farm field trip component. One grant the Department highlighted includes experiential learning by visiting a dairy farm and then visiting a plant-based alternative dairy replacement processing facility. And, the Department believes it is providing considerable financial and resource help to dairy farmers to improve their sustainability and to diversify or “transition.”

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Milk Market Moos, June 25, 2021

By Sherry Bunting, published weekly in Farmshine Newspaper

Cutting through consumer confusion

Consumers and producers of food and beverages — anything in the protein market — are going to see a disruptor explosion of new products. As I look through the food-related publications coming across my desk and into my email inbox — Culinology, Progressive Grocer, Food Navigator, Meat + Poultry, Dairy Foods, Food and Beverage, and the list goes on — the sudden onslaught of animal-free cellular agriculture, portrayed as dairy and meat without the animals, is stunning.

Even Facebook pop-up ads push Nick’s ice cream every day in my Facebook ‘newsfeed’ — with the tagline ‘dairy without the cow’ courtesy of Perfect Day Foods.

They use ‘climate’ to generate interest from companies wanting to reduce a carbon footprint by incorporating the excrement of genetically-altered yeast to replace a portion of real dairy protein in the dairy manufacturing space. It’s an easy swap, Perfect Day founders say, and according to the USDA Bio-engineered labeling regulations that became official last January, the stuff doesn’t have to be labeled BE because the genetically-altered yeast are not being consumed — just their excrement harvested from the fermentation vats.

“We ran the numbers, and if we partnered with the dairy industry to use Perfect Day protein in just 5% of their products, we’d save 12.3 million metric tons of greenhouse-gas emissions – equivalent to the carbon emitted from every single car registered in the city of Los Angeles,” says Nicki Briggs, Perfect Day’s vice president of corporate communications in a Berkeleyside online interview on the third day of June 2021. Ms. Briggs was formerly an employee of Chobani.

There are other dairy turncoats and straddlers moving between real and fake and seeking to blend them to some sort of climate / carbon standard. But data like that of Ms. Briggs doesn’t tell the whole cow story. Just like the data Impossible Foods is using to coax schools to replace 50% of their beef with Impossible Burger — now that it has the coveted USDA Child Nutrition Label — are figures that do not consider the entire cycle of cattle for a net figure on GHG.

It is maddening. This onslaught of bright packaging with new and clever names and claims populating the meat, dairy and seafood offerings — starting with plant-based concentrates and chemical combinations and leading to cells growing in bioreactors and yeast excreting protein in fermentation vats. Big Tech is the new wannabe farmer, and Big Ag, Big Food, Big Finance, and Big ole Uncle Sam are in for the deal.

Consumers will begin to feel like they are stuck inside a pinball machine, or to be more current with my analogy, a warp-speed version of a video game bombarded by bangs, pops and whistles.

That’s what Gen Z wants, they all say. And yet, a survey by the Hartman Group recently showed Gen Z — just like the Millennials before them — are most comfortable with the food choices they grew up with, but unlike Millennials who still had a preference for local, seasonal and farm-to-table, Gen Z-ers have a preference for fast food and foods with familiar tastes.

We’ve got some work to do to navigate all of this with a straight forward message that cuts through the climate half-truths and outright lies about cows, that penetrates the government dietary restrictions based on outdated and incomplete reviews of the scientific literature on dietary fat.

We’ve got our work cut out for us to keep educating others, giving them the facts that are being ignored and bullied out of the national, even global, conversation about food as the industry grows its margins for investors through consumer confusion at the expense of consumer’s knowing what’s real.

USDA joins global school lunch deal

USDA can’t even get U.S. school lunch right, but now plans to lead America’s joining into a “global coalition” called the “School Meals: Nutrition, Health and Education for Every Child.”
There’s also a bill before Congress seeking to make three meals and a snack universal for all children through school.

As for the global coalition, this is right up Secretary Vilsack’s alley. In a press release Wed., June 23 about USDA’s leadership in joining the global deal, Vilsack talked about “powerful incentives” and “building resilience to future shocks” by focusing on improving the nutrition, health, and education of vulnerable children and adolescents worldwide. Sounds good, right? Who can argue with words like that? But like everything else out of USDA these days, where’s the details? And what’s it really mean?

The global coalition is centered around education and school meals and will launch at the United Nations’ Food Systems Summit in September. Like the 30 x 30, the Net Zero initiatives, and everything else coming through the pipeline from World Economic Forum, the goal line for this, too, is 2030 — making nutritious meals available for all children by 2030, with other benchmarks set for 2022.

Who can argue with nutritious meals for all children? There’s not a single person who doesn’t want all children to have nutritious meals. The problem is this: Who defines what is nutritious? How will the systemization child-feeding change the future of food and agriculture?

Details, please, because the track record so far where USDA is concerned is marred by lack of logic and reduced application of current nutrition science via institutions like the Dietary Guidelines and restrictive policies for feeding children.

“We look forward to bringing our expertise to bear, expanding our reach, and benefiting millions more vulnerable children by partnering with the World Food Program and other like-minded countries as part of this important coalition,” said Vilsack in Wednesday’s press release.

Okay, let’s hear those details.

Will USDA do dairy?

In a June 15 press release about previously authorized aid for dairy, USDA announced $580 million for Dairy Margin Coverage base changes and $400 million for Dairy Donation Program would be implemented within the next 60 days, but we’ve yet to see the details.

As part of that news release, USDA also noted that, “Additional Pandemic Assistance for Producers (PAP) payments would be targeted to dairy farmers who have demonstrated losses not covered by previous payments.” No details on that either.

However, on the same day of that press release — June 15 — Senator Patrick Leahy, Chairman of the Senate Appropriations Committee, asked USDA Secretary Tom Vilsack about delivering urgently needed relief to dairy farmers. Vilsack replied to say that USDA was announcing that day (again without details).

In the exchange between Vilsack and Leahy during a Senate hearing, Vilsack said: “We are creating a program to help reduce the differential that occurred between Class I and Class III milk pricing because of the disproportionate number of purchases of cheese during the Food Box effort. That distorted the market, and it caused a lot of harm to smaller producers. We’re putting resources in to reimburse those producers for some of the loss they incurred.”

Those ‘differential’ discrepancies have not been outlined yet by USDA, but here are several manifestations Farmshine and other publications have been documenting:

  1. Due to the new Class I base calculation that uses a III / IV averaging method instead of the prior ‘higher of’, which was implemented by USDA in May 2019, over $750 million in cumulative Class I value was lost from May 2019 through May 2021.
  2. As much as $3.5 billion was potentially withheld or represented as inequitable transmission of milk value when massive volumes of Class III milk were withdrawn from FMMOs, as further reflected in severely negative PPDs. This would be a net loss after months of positive PPDs are applied; however, even positive PPDs in some months were smaller than normal.
  3. Both 1 and 2 contributed to the inequitable transmission of Class III value to many producer milk checks
  4. These losses affected the performance of purchased risk management tools, meaning that a change in Class I pricing that was supposed to help dairy processors manage their risk, had the resulting effect of making it more difficult or impossible for dairy farmers to manage their risk — during a time when they needed it most.

Conundrum: U.S. milk production up 4.6% in May

But here is the conundrum in regard to USDA dragging its feet on details for ‘dairy aid’: May milk production nationwide was up a whopping 4.6% over year ago — so says the USDA report released June 22. April production was up over 3% vs. year ago.

USDA looks at this as though dairy producers are doing so well that they are expanding their herds. In fact, in May, there were 145,000 more milk cows in the U.S. than a year ago. Could this be another sign of the inequitable transfer of value in the milk pricing formulas?

More insight on the production report next week’s Market Moos.

July Class I advance $17.42

The July advance Class I base price, or ‘mover,’ was announced Wednesday (June 23) at $17.42. This is 87 cents lower than June’s Class I base price and 86 cents higher than a year ago. The July 2021 Class I base price at $17.42 — using the current formula of average plus 74 cents — is 34 cents higher than it would have been if figured using the previous ‘higher of’ method at $17.08.

July 2021 marks the first time in 12 straight months that the new calculation method resulted in a higher Class I base price than the old method. However, there’s a lot of ground to make up, considering that for 16 of the 27 months since the new method was implemented, the difference between the new ‘average plus’ and the old ‘higher of’ was lower and only 11 months were higher.

In fact, the Class I base value losses for 16 months averages to $3.28 per hundredweight while the value gains (including upcoming July 2021) for 11 months averages to just 39 cents.

Class III/IV milk futures plunge

Class III and IV milk futures were all lower across the board this week. The only green in the sea of red, was the Class III current month gained a dime heading into the last week of June contract trading, but the Class III July contract lost 15 cents and August plunged by $1.00 below week ago, with the rest of the board on Class III milk ranging 10 to 50 cents lower. On the Class IV board, the losses were more evenly spread ranging 20 to 50 cents lower across all 12 months.

As all four dairy commodities trended lower on the CME spot market this week, the 12-month futures average lost 29 cents on both classes, equally, by midweek, so the spread between Class III and IV 12-month future contract averages remained exactly at 67 cents on Wednesday, June 23 — right where it was a week ago and still well below the $1.48 mark.

On Wed., June 23, Class III milk futures for the next 12 months averaged $17.67, down 29 cents from the previous Wednesday’s average, the 7th straight week the 12-month Class III futures price average was lower than the prior week. Class IV contracts averaged $17.00 — down 29 cents from the 12-month average on the previous Wednesday.

Dairy commodities all lower

Butter slid lower almost daily, on the CME daily spot market. By Wed., June 23, the price was pegged at $1.73/lb — down 7 cents from the previous Wednesday with 6 loads trading.

Grade A nonfat dry milk (NFDM) also slipped this week. On Wed., June 23, the CME spot market price was pegged at $1.2575/lb, a penny lower than a week ago with a single load trading.

Cheddar trade plunged lower on the CME, then firmed up a penny or two at midweek. Barrels took the brunt of the decline and by Wed., June 23, both the 40-lb block Cheddar and 500-lb barrel cheese were pegged at $1.49/lb on the spot market with 2 loads of blocks and a single load of barrels changing hands. This was a net 3-cent loss for the week on blocks and a 15-cent loss on barrels.

Whey price was firm on the CME spot market, pegged at 59 1/2 cents with zero loads trading.

USDA to invest over $5 bil. in food supply chain, focus is transformation, not relief; Public comments due June 21

By Sherry Bunting, Farmshine, June 11, 2021

WASHINGTON — Long on transformation framework and short on meaningful details, USDA announced this week (June 8) that it will invest more than $4 billion to strengthen critical supply chains. This follows the June 4 announcement of over $1 billion for ‘healthy food’ and security infrastructure.

What these words mean is still the subject of USDA gathering input through public comments due June 21 and a series of stakeholder meetings. The first one was a 30-minute webinar attended virtually by over 3000 people representing food and agriculture organizations the day after the funding announcement (June 9).

These announcements are billed by Agriculture Secretary Tom Vilsack as part of the “Build Back Better” initiative to be funded by the Consolidated Appropriations Act of 2021 (passed by the 116th Congress and signed by President Trump in January) and the American Rescue Plan Act (passed by the 117th Congress and signed by President Biden in March.)

Vilsack will co-chair, along with Secretaries of Commerce and Transportation, the Biden administration’s new Supply Chain Disruptions Task Force for a “whole of government response.”

According to USDA, its investment announcements will include a mix of grants, loans and “innovative financing mechanisms” for the food production, processing, distribution and market access priorities that will “tackle the climate crisis and help communities that have been left behind.”

It has been six months since CAA funds were appropriated and three months since ARPA funding was authorized. These relief and support funds passed by two sessions of Congress and signed by two Presidents are now sitting in wait of a task force establishing supply chain transformation priorities after public comments and industry stakeholder meetings.

Meanwhile, dairy producers and other sectors of agriculture are still waiting for details about relief that was to some degree spelled out in the prior congressional language of these Acts. 

This includes waiting for USDA’s implementation of what was supposed to be an expanded base option for dairy producers in the Dairy Margin Coverage program; waiting for participation details for the Dairy Donation Program that is supposed to be retroactive; and waiting for a response from USDA to the bipartisan request by Senators seeking relief payments for dairy farmers for the first half of 2021 retroactive to January 1.

In the detailed request for public comment, USDA is making it clear that the CAA and ARPA funds will be spent on transformation, not relief. Guiding the transformation is President Biden’s February Executive Order 14017 America’s Supply Chain.

USDA says it is interested in comments spanning everything from animal, soil, plant and climate health, traceability, monitoring and technologies to agricultural inputs, energy, markets, storage, distribution, and digital security.

“We always knew this, but the pandemic really highlighted it for the rest of the country: Our food system is brittle, and any shock to it can have devastating effects down the chain. Now is the time — not to go back to normal — but to build a new normal,” said Mae Wu, Deputy Under Secretary of Marketing and Regulatory Programs during the first stakeholder webinar this week.

“Before we dealt with the pandemic, we had a food system in which nearly 90% of our farms did not generate the majority of the income for the farm families operating those farms. We had a food and farm system in which soil erosion was occurring at 10 times the rate that soil was being replenished,” said Vilsack as the first stakeholder webinar kicked off.

“We all know we have a substantial number of waterways that are currently impaired, and we also appreciate the fact that we had a food system that was prepared to address climate change but not yet fully embracing the opportunity side of that claim,” Vilsack continued. “So we had a system that needed help. We had a system that also was seeing rapid consolidation and a lack of competition. Then Covid hit and by virtue of Covid we learned that what we thought was a resilient system, really wasn’t resilient at all and had a difficult time shifting from food going into foodservice to going into food assistance.”

Citing the President’s February Executive Order, Vilsack said the focus of the new task force, he co-chairs, is to strengthen supply chains by “beginning the process of transformation.”

In the Federal Register document, USDA states: “(Our) initial thinking includes, but is not limited to, funding, through a combination of grants or loans, for needs such as: supply chain retooling to address multiple needs at once (i.e., achieving both climate benefits and addressing supply gaps or vulnerabilities concurrently), expansion of local and regional food capacity and distribution (e.g., hubs, cooperative development, cold chain improvements, infrastructure), development of local and regional meat and poultry processing and seafood processing and distribution, and food supply chain capacity, building for socially disadvantaged communities.”

In one subsection, USDA notes that it is interested in comments on “the availability of substitutes or alternative sources for critical goods and materials…” For example, USDA says it “encourages commenters to consider agricultural products that could be domestically grown but are not practically available today for various reasons, and to describe whether and how such products (or their alternatives) could be made available through supply chain resilience efforts.”

To-date, there are 297 public comments on the docket. A quick look through 55 that are viewable presently includes many food banks and feeding programs, some mentioning dairy, but few comments are logged from dairy organizations to-date.

For its part, the National Farmers Organization attached a document and stated: “The farmer dumping milk needs a market today, not in the long run. The person standing in a food line needs something to eat today, not in the long run. We need to look more carefully at what is going on if we are to understand, and effectively address, the dilemma of too much milk on one end of the supply chain and not enough dairy products on the other.”

Vilsack (who worked as a dairy checkoff executive for the four years between being Ag Secretary in the Obama and Biden administrations) also referenced milk dumping, saying the dairy industry had bottlenecks as foodservice demand shut down while retail demand for consumer-packaged goods skyrocketed.

In fact, in a recent Fortune magazine interview, Vilsack said the cost of $1.50 per gallon to put milk in a jug created a disincentive to donate excess milk instead of dumping it.

However, in reality, there was more to it than that in parts of the country where Governors brought the curtain down on the economy to strict degrees of people ordered to stay home, while also scolding them in public service announcements for buying too much food. Retailers hit the brakes by putting purchase limits on milk, butter and other dairy products, just as processors loaded up the silos with milk for the retail surge, only to find their retail orders came to a screeching halt as the purchase limits contributed to backing milk up from plant storage into farm pipelines faster than donation efforts could get organized or find facilities to bottle or process.

Facility issues were also cited at the time, in terms of separated cream filling storage silos with nowhere to go as butter capacity was busy switching to pull bulk butter from storage and convert it to print butter, and butter imports skyrocketed. It took a while to unwind the institutional governance of low-fat milk into making more whole milk available as consumers could choose. And it took a while for governments to allow institutions (like schools) to temporarily give whole milk. The result, in the Northeast especially, was a huge volume of dumped milk.

Among the viewable comments to USDA at the Federal Register, so far, are groups citing industry concentration and consolidation.

In its comments, the Montana Cattlemen’s Association pointed out that Secretary Vilsack, along with then Attorney General Eric Holder, held concentration and antitrust listening sessions across the U.S. during the Obama administration, and nothing ever came of it. One of those USDA / DOJ national listening sessions was on dairy, specifically, in Madison, Wisconsin in 2009.

The National Grocers Association echoed these concerns, detailing the way a few global companies already control food retail, foodservice, food processing and distribution, and how this affects farmers and ranchers, independent retailers and restaurants, and thereby affects regional food supply chains, and ultimately consumers and America’s security.

Both the cattlemen and grocers call for specific actions that would increase competition, regional processing and market access and thereby make the U.S. food system more secure and critical supply chains more resilient.

During the stakeholder webinar, Vilsack addressed a question on market competition by saying USDA will “first make sure the markets that do exist are as open and transparent as possible” by looking at the current rules along with other federal agencies and taking any steps to rectify. But he also pointed to developing new markets.

At the other end of the public comment spectrum, groups like the Good Food Institute, a lobbying organization for plant-based and cell-cultured replacements for animal-sourced foods, paint a picture of how their streamlined lab-style production through pop-up bioreactors and fermentation vats in rural, suburban and urban areas can be built to provide supply chain resiliency and food security. GFI also claims that their models would be a climate mitigation strategy.

GFI addressed each of the USDA bullet points on supply chain resilience, climate action and new market opportunities to describe why the CAA and ARPA funds should be used for research and infrastructure that shifts away from animal agriculture to plant-based and cell-cultured through digital and genetic technologies that are already within the USDA Agricultural Research Service wheelhouse.

GFI lays out their description of how recombinant proteins and GMOs, along with the storability of frozen cells and dry plant-based powders, can be turned into food quickly, and in exact amounts needed, and can be grown and manufactured anywhere — without waiting for animals to grow — leaving land available for so-called ‘climate strategies’ and biodiversity. 

But, they say, research and infrastructure are needed to make their science-fiction novel come true. This, despite the huge investments of tech industry billionaires in these replacement technologies, and the way the largest meat and dairy processors are diversifying, to brand – and blend – such alternatives to look, taste, and feel like the real thing.

Interestingly, the food economy is, right now, dealing with supply chain disruptions and inflationary price hikes on animal-sourced products from eggs and milk to bacon, beef, and chicken wings. The price squeeze is having a big impact on independent grocers, independent restaurants, and consumers. At the same time, prices paid to dairy and livestock producers are turning lower just as farmers and ranchers were hoping to get back on their collective feet.

That paradox is not sustainable nor resilient for producers or consumers, but growing cells in bioreactors or harvesting yeast-excrement from fermentation vats — instead of animals on farms —simply gives even more control of food to even fewer entities that would control the genetic alterations that make it scientifically possible.

USDA states in its press release that it wants to address competition and small and medium sized processing capacity and that it wants fairness, competition, equity, and access for producers and consumers, while accomplishing climate mitigation at the same time. 

The question is: What do these buzz words actually mean? The June 9 stakeholder webinar gave a glimpse.

Vilsack explained that USDA is putting the series of funding announcements into a series of four supply chain ‘buckets’: production, processing, distribution / aggregation and markets / consumers.

He said USDA will begin by providing assistance for beginning farmers and socially disadvantaged farmers, including the debt relief for farmers of color.

“We’ll look for ways to provide assistance for those who work on the farms and those who work in the processing facilities. We’ll look for how we can encourage those transitioning from conventional to organic agriculture if they choose to do so,” said Vilsack. “All of this will be designed to create greater resilience in terms of the number of people available to farm and the types of farming systems that we have. You’ll also see investments in urban agriculture.”

Vilsack said on the food processing side, USDA is “very focused” on ways to create more options for farmers by “shoring up and expanding” existing small and medium size processing to create more markets for farmers.

He highlighted “food hubs” in the distribution bucket and “access to healthy foods” in the consumer bucket.

Answering a question later about how government grant-writing is beyond the scope of most farms, especially small farms, Vilsack said: “One way for folks to get expertise and capacity is to join with others who are similarly situated to form a food hub to aggregate products. There is money for food hubs in this.”

Calling the Dairy Donation Program an investment in the production / producer bucket, and referencing it four times in the webinar, Vilsack said the DDP “will enable producers to more quickly shift in the event of a disruption from foodservice or retail that might not be available for whatever reason into food assistance mode.”

He identified the need to “significantly invest in storage and refrigeration infrastructure to accept significant quantities of food to be stored for a period of time and distributed over a period of time. Right now, we are not equipped to handle a great influx of meat, and produce all at one time, and as a result, animals were destroyed and milk was dumped,” he said.

Vilsack said another way to look at USDA’s incremental roll out of the CAA and ARPA funds is that it reflects “how we are going about the transformation of our food and farm system. We need to continue to invest to make sure there are multiple ways for people to get into the farming business and to stay in business.”

To be profitable, he said, “means we need to develop more new and better markets to be invested in. We want to make sure it is sustainable, circular, regenerative in its approach. We want to make sure it is equitable in its application so that people of all races, ethnicities, gender and so forth are able to access the programs completely at USDA,” said Vilsack.

For producers, allied industry, consumers and organizations, now is the time to visit the USDA Federal Register Docket at https://www.regulations.gov/document/AMS-TM-21-0034-0001 to read the guidelines for commenting and submit a “Supply Chain Comment” referencing Docket AMS-TM-21-0034-001 by June 21, 2021.

Comments may also be sent to Dr. Melissa R. Bailey, Agricultural Marketing Service, USDA, Room 2055-S, STOP 0201, 1400 Independence Avenue SW, Washington, DC 20250-0201. For further information about how to comment and the guidelines for commenting, contact Dr. Bailey by phone at 202-205-9356 or email melissa.bailey@usda.gov

(Author’s Note: The pandemic revealed that the institutional feeding models replete with anti-fat rules based on un-scientific Dietary Guidelines are part of the supply chain disruption problem. Governmental and non-governmental organizations continue to try to systemize food distribution into dietary lanes that don’t reflect the science or consumer attitudes about healthy fat and animal protein. Now ‘climate’ is being used as a potential animal-dilution driver. When someone wants to give families a gallon of whole milk (instead of fat-free or low-fat) when they pick up the school lunches for their children during a pandemic, the last thing any governmental or non-governmental organization should be telling them is “you can’t do that, it’s against the rules,” or pushing them into an adjacent parking lot so they aren’t “next to” the institutionally rule-inundated food. That is just one aspect I plan to write about in commenting to the USDALoosen those dietary restraints that give all the power to the global consolidators in foodservice, processing and distribution. Let free-enterprise and good will work for good.)

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NY dairy farmer fights eminent domain as county moves to take best fields for cheese plant relocation, expansion

“If the state — under the auspices of the Industrial Development Agency — can decide how these properties can be used, I think as farmers, we need to realize we can lose our land through eminent domain takings,” says Charlie Bares. He is fighting to save fertile farmland that is key to feeding cows and managing manure nutrients at Mallards Dairy. Photo provided

By Sherry Bunting, Farmshine, May 21, 2021

ANGELICA, N.Y. — It feels like a no-win situation for Charlie Bares ever since Great Lakes Cheese set its sights on fertile Genesee River Valley land that is integral to growing forage and hauling manure for the 3000-cow Mallards Dairy.

The Allegany County (New York) Industrial Development Agency (ACIDA) has moved forward with eminent domain proceedings to condemn 321 acres of Bares’ land, identified in county documents as Marshland LLC, so the county can use the land to build a 480,000 square foot cheese manufacturing facility for Great Lakes Cheese.

The county has a deal with the Hiram, Ohio-based cheese company to give $220 million in tax savings and incentives to build the $500 million plant on Bares’ land. 

The new plant would double the company’s current production at its Empire Cheese plant in nearby Cuba, New York.

According to documents in the public record, Great Lakes Cheese intends to close the Cuba plant after production would begin at the plant it seeks to build on Bares’ land. 

ACIDA and the cheese company began working on this project in October 2019 and have set a timetable for groundbreaking later this year and operations to begin in January 2025.

The public record also indicates that 200 jobs at the Cuba plant, and additional jobs with the expansion, as well as milk markets, are “in jeopardy” if Great Lakes can’t build on this particular land.

Cows have been milked in this operation since 1860, according to Bares, who joined Joe Strzelec as a partner in the 1990s. As the ownership and business changed over the years — with Bares becoming the principle partner and expanding the operation — the Genesee River Valley land the county wants to take has become a key to the dairy business 20 miles away.

“IDA has begun the eminent domain process, and we are fighting it,” said Bares in a Farmshine phone interview. “We are arguing that this is not an overwhelming public benefit, but that it is an overwhelming private benefit.”

A few weeks ago, attorneys representing Bares and Marshacres LLC filed a petition challenging the county’s actions. The legal case is currently in the New York State Appellate Court.

Bares was approached a year ago about selling more than half of the 400 acres for the cheese plant.

“We didn’t want to sell, and we gave a price that reflected that. This land is the biggest and best field for us, and it is an integral part of our business. Selling it would weaken our dairy business,” he explained.

In addition, Bares is concerned about the environmental impact of losing land like this to concrete. While his operations are just outside of the Chesapeake Bay watershed, he is a supporter of the clean water blueprint for the Bay, and has invested over the years in technologies and best management practices profiled in 2015 in a Chesapeake Bay Foundation blog. Tree plantings and riparian buffers for water quality in the Genesee River Basin were also highlighted, among other things, in 2018. 

The ‘market value’ of this land is irrelevant under these conditions. What is relevant is the value of the land to Mallards Dairy and its owners.

In fact, in a letter reported by the Olean Times-Herald, Bares’ attorney John Cappellini observes:  “You are taking property from one company and giving it to another? You have decided that one commercial use, the farm, is somehow less important than a cheese factory.”

Explaining in the letter that the threats from Great Lakes Cheese to close all area facilities and leave the area have motivated officials against his client, Cappellini stated further that, “They are extorting from the taxpayers of Allegany County, and the County Legislature is complicit. They threaten to leave ‘unless you give us what we want.’”

The ACIDA notes that 80 sites were evaluated as Great Lakes Cheese had specific criteria to build a plant that would double its production after the Cuba plant is closed.

Of those 80 sites, the county says this is the only property that meets the company’s criteria.

Reports indicate the land meets three criteria: flat land, proximity to the river and being just off a major highway, I-86. The greenfield approach is the company and county’s least expensive build option with access to cheaper highway transportation.

Bares believes the company has not negotiated in good faith.

Answering questions about milk supply, Bares notes there has been no ‘provincial talk’ guaranteeing this project must use any percentage of its milk from New York State farms. No such stipulations are noted in the public record, except the ACIDA record includes a mention and link to Dairy Farmers of America (DFA).

Over the years, this region of New York has received milk from Michigan, Ohio and northern Indiana as it sits in a part of the state that falls just outside of Federal Milk Marketing Order maps — sitting as a bridge between the Northeast FMMO 1 and the Mideast FMMO 33.

The public record does show conditions that the over 200 employees at the existing Cuba plant would be offered jobs at the new plant.

Meanwhile, Mallards Dairy employs 35 to 40 people and feeds and milks 2500 cows with a total herd of 2900 mature animals. The land the county wants to take is key to that business.

This Allegany County Industrial Development Agency drawing shows the Great Lakes Cheese project, including 480,000 square foot cheese plant, 50,000 square foot wastewater treatment plant, access roads and infrastructure planned for land now belonging to a New York dairy farmer. According to county meeting transcripts, “Building out the Crossroads area that is planned for I-86, Route 19 and CR-20 is the number one immediate priority.” Screenshot under projects at acida.org

At the March ACIDA meeting, officials noted publicly that they hope to break ground in the third quarter of 2021 and be fully operational by Jan. 1, 2025. If the ACIDA is successful in the eminent domain process it has begun, the county would own Bares’ land and lease it to Great Lakes Cheese.

At one point, early on, Bares notes that not only did the selling price he offered reflect the importance of the land to the dairy business, but also the idea of securing a milk market was mentioned to the company. He says Great Lakes Cheese declined, noting simply that they purchase their milk from cooperatives. 

A prime supplier of Great Lakes Cheese is DFA, as the public record reflects. Bares markets his milk through a small independent cooperative.

Having been unable to reach an agreement that would reflect the impact to his dairy business, Bares hired a lawyer.

“This area is very hilly with narrow valleys. There’s not a lot of farmland. This Genesee River Valley land is very good, very fertile, non-erosive land,” said Bares of the land around the main dairy operation outside of Cuba, and the land the county wants to take 20 miles away. “We want to hang on to this land because it’s hard to replace. Every farmer has land that is their best land, that they aren’t going to let go unless they are done farming.”

He says going through this process over the past year has only strengthened his resolve to keep the land and fight the eminent domain process. He notes that his wife Elizabeth has helped him tremendously.

New York’s history of interpretation for ‘public use’ in eminent domain cases is a broader notion than for most states. Bares knows it will be an uphill battle to fight the county’s taking, but he is hoping that his battle will ultimately help others in the future facing a taking of their land.

“Our dairy jobs — and the cows — depend on this collection of land resources we have grown,” says Bares. “This whole thing is wrong for the profitability of our dairy to chip away at the best land. It’s wrong for the environment because this is a beautiful riparian river valley and land like this is disappearing fast. It’s wrong from the social aspect the way the government is using eminent domain to help one private enterprise while harming another.”

He says his attorney is confident and always believes he can win every case until he loses, so Bares is trying to stay positive.

Their petition was filed recently in New York State Appellate Court. The Allegany County IDA has reportedly petitioned the court to expedite proceedings. Bares had expected both sides to be writing briefs through the summer with oral arguments in October, but that could be expedited to August or September.

This land near Angelica, New York is farmed by Charlie Bares to primarily grow alfalfa and receive manure as a key part of nutrient management and forage production for the 3000-cow Mallards Dairy owned by Bares and his partner. The county wants to condemn it through eminent domain for a cheese plant.

“I think everyone should take a dim view of this. Every farmer — everyone — has a property that is head and heels above their other land, their best fields,” Bares suggests. “If the state — under the auspices of the Industrial Development Agency — can decide how these properties can be used, I think as farmers, we need to realize we can lose our land through eminent domain takings. My case is just an example.”

This case is an example because the ‘taking’ is not for a public use. It is for a private business use that the county is using economics to declare as a public use.

Bares has had some support from the community. Some rallies with some turnout, especially in April. There has been support online, and he has received a few phone calls. 

But largely, outside of the southern tier New York and northern tier Pennsylvania region, the story is not known.

A petition by Marshacres and citizens of Allegany County has been started, which has nearly 5500 signatures to-date at https://www.change.org/p/acida-stop-eminent-domain-seizure-of-working-farmland

“No one’s lining up (manure spreaders) at the county courthouse and threatening to open the valves, if that’s what you mean,” he answered.

After a long and quiet pause, he communicates just how difficult this situation has become for everyone.

“The farmers around me, my peers, they want this cheese plant and a stronger market. I believe that’s a big carrot, so it’s not easy. It seems there is little chance that I can come out ahead, either way. Either we chop off part of our business or the cheese plant will not expand here so everyone will view us as economic martyrs,” he explains.

“I feel like I cannot win.”

Even though each of two outcomes at the moment represent a different kind of difficult for Bares, he believes fighting the county’s eminent domain proceedings could help someone else — as untouched land like this that is important to agriculture and the environment is disappearing. 

“Once it’s paved over in concrete, ” he says, “it’s not coming back.”

-30- 

Grassroots efforts continue seeking solution to Class I formula change losses

While the buck is being passed, dairy producers are talking with lawmakers about the unintended consequences from the Class I mover change Congress enacted in the 2018 Farm Bill.

This illustrates the Class I mover formula since May 2019. Prior to that, the ‘higher of’ Class III or Class IV advance skim pricing factors was plugged into the first item under step 1 without the +74-cent adjuster to automatically be used as the Base Class I Skim Milk Price in the rest of the formula. Image Source: USDA

By Sherry Bunting, Farmshine, May 2021

WASHINGTON, D.C. — The Class I ‘mover’ is the subject of much discussion — two years after the averaging method plus 74 cents replaced the ‘higher of’ method to determine the base producer price of Class I beverage milk in May 2019.

A letter drafted by Senator Kirsten Gillibrand of New York is gathering signatures from Senators and will be sent to Ag Secretary Tom Vilsack regarding financial assistance to cover direct and indirect losses borne by dairy farmers due to the formula change exacerbated by the pandemic.

“By allocating more direct payments through CFAP, USDA could take action to reduce the strain that dairy farmers are facing. Specifically, the agency should continue issuing payments to dairy farmers under CFAP, or through any further assistance programs that USDA conceives, including the Pandemic Assistance for Producers initiative, for the first six months of 2021 and make these payments retroactive to January 1st,” the Senator’s letter states.

The American Dairy Coalition is urging producers to contact their Senators about signing onto the letter by end of day Monday, May 17. Senators should contact Dominic Sanchez at Senator Gillibrand’s office by email at Dominic_Sanchez@gillibrand.senate.gov

A transparent USDA hearing process was used 20 years ago to originally set the ‘higher of’ as the method when USDA rejected proposals for averaging Class III and IV due to depooling and negative differentials. However, in the 2018 Farm Bill, the Class I mover was changed from ‘higher of’ to an averaging method legislatively without hearings, without comment, without the producer referendum — without vetting.

Dairy groups are working to raise awareness among key lawmakers and USDA about the 24-month net loss of over $750 million in the Class I mover price from May 2019 through April 2021. In addition, these losses impacted orderly marketing and other factors, contributing to net losses exceeding $3 billion nationwide from inverted class price relationships that produced negative PPDs and led to depooling. In addition, dairy farmers had risk management losses when their milk was devalued, but they paid for risk management that failed because it was aligned with a “market value” they did not receive.

Sen. Gillibrand’s letter highlights the concern about the unintended consequences of the Class I formula change to averaging and away from ‘higher of’.

In the Northeast FMMO 1, for example, the Class I change, alone, accounted for a net loss of over $160 million in Class I devaluation over 24 months, and there were broader impacts of basis losses from reduced and negative producer price differentials (PPD) and depooling.

Northeast producer blend price losses are estimated to be $1.10/cwt, net, from May 2019 through April 2021. (Calculations are being done for other FMMO regions so stay tuned.)

Similar loss estimations can be made for broader impacts across the U.S., depending upon how cheese plants determined pay prices for farmers when the FMMO uniform blend prices were suppressed by $1 to $10 across 7 of the 11 FMMOs that report producer price differentials. These PPDs were severely negative from October through December 2019 and from June 2020 through April 2021.

These formula-related losses are expected to continue through most of 2021 due to current market factors affecting how the class pricing formulas, with the change to Class I, relate to each other and how this impacts depooling.

Producers from the Southeast U.S. also began circulating a letter to Secretary Vilsack this week highlighting the steep losses in the three Southeast FMMOs and seeking direct payments through Coronavirus stimulus funds.

The Southeast letter asserts that milk producers in FMMO 5, 6, and 7 (Appalachian, Florida and Southeast) disproportionately bore 21% ($155 million) of the lost revenue directly attributable to the Class I mover change, because the 21% of Class I value loss fell on dairy farmers shipping just 5.5% of total milk pooled across all orders in the U.S.

Southeast producer blend price losses are pegged at $1.25/cwt.

The Southeast letter states that the loss was not shared equitably among all dairy farmers, due to depooling, which the letter indicates made it possible for dairy farmers marketing milk to cheese plants (Class III) to receive the shortfall.

However, many producers whose milk was depooled from FMMOs did not receive that shortfall from milk buyers, unless they had milk contracts based directly on cheese prices. Many manufacturing class handlers use the FMMO blend price as the benchmark for paying producers outside of pooling.

Several industry sources observe that this change turned out to be a big benefit to processors at great expense to producers. The problem surfaced under market conditions before the pandemic and was made worse by market conditions since the pandemic.

Even National Milk Producers Federation (NMPF) has admitted as much, stating that the International Dairy Foods Association (IDFA) wanted this change in the first place. NMPF indicates they went along with it after studying some historical trends thinking the 74-cent adjuster to the average would produce a result that was “revenue-neutral” for dairy farmers.

It was anything but ‘revenue-neutral’ for dairy farmers, even before the pandemic. The pandemic impact simply magnified the severity of loss.

Proposals continue surfacing since NMPF announced its intention to seek a USDA emergency hearing with a proposal to tweak the adjuster to the average every two years.

Minnesota Milk Producers, Wisconsin Dairy Business Association, Edge Cooperative and the Nebraska State Dairy Association joined together with a concept to change the Class I mover to a Class III-Plus that would be based on Class III announced prices instead of advance prices.

FarmFirst Cooperative based in Madison, Wisconsin, announced it would put forward a proposal to return to the ‘higher of’ calculation — if USDA holds a hearing. However, to-date, no official FMMO hearing requests have been received by USDA.

The first few months of the new Class I mover formula in 2019 were net-positive to the Class I price, but this dissolved by July, almost a year before the pandemic, when the gap between the rising Class III price and the averaging method for the Class I mover narrowed because the spread between Class III and IV widened.

Government food box dairy purchases through the pandemic included more Class III products (cheese) than Class IV (butter/powder) or Class II (soft products that are priced by Class IV).

But food boxes included plenty of Class I (fluid milk). Trouble is, fluid milk is not ‘market valued’ except for the value of its components in manufacturing. Fluid milk is discounted as a ‘loss-leader’ by large supermarkets, especially those that process milk.

Another factor that contributed to the wide spread between Class III and IV pricing has been the difference in product inventory as a factor of production, exports and imports.

In 2020, butter inventory reached a 20-year high, while cheese inventory declined. Butter production increased, especially in the first half of 2020, to exceed the record-breaking production of 2018, making less cream available for cheese production. Meanwhile, cheese exports rose 16% while butter exports declined 5%.

On the flip side, cheese imports declined 10% while butter imports were the second largest on record, up 15% over the previous year for the first 7 months of 2020. The U.S. ended 2020 with butter imports 6% above 2019.

The Class I formula change made FMMOs even more vulnerable to massive depooling against this volatile and divergent backdrop of Class III vs. IV. As averaging reduced Class I pricing, and the Class III milk was depooled, the net result was blend prices that reflected a larger portion of the much lower Class IV (and II). Dairy farmers have been educated to produce milk with higher component levels of fat and protein as a method to improve profitability, but negative PPDs snub this value at the farm level.

Looking through USDA Federal Milk Marketing Order statistical bulletins, this reporter calculates over 70 billion pounds of milk were depooled across all FMMOs from July 2019 through March 2021 due to inverted class pricing.

PPDs reflect the difference between the Class III market value of components minus the blend price of all classes in the pool. When PPDs are negative, it reflects insufficient pool funds to pay that value).

The depooling of Class III milk and the negative PPDs (above) began on the West Coast in July 2019. By September through December 2019, all multiple component FMMOs had negative PPDs, that became more negative as volumes of depooled milk were noted in the central part of the country, moving east.

The four skim/fat pricing FMMOs in the Southeast and Arizona were quite negatively affected by lower Class I minimums in the fall of 2019 and for many of the months thereafter. Topsy-turvy All-Milk and Mailbox Milk prices reported by USDA are further proof of shrinking basis in producer milk checks affecting the performance of purchased risk management tools. Even those USDA-reported All-Milk and Mailbox prices do not tell the whole story because USDA states that “the value is in the marketplace” even if it is not equitably shared with producers.

In essence, the Class I mover change was made to give large global companies buying large volumes of milk a means of ‘hedging’ their risk through forward-contracting on the futures markets. But this ‘benefit’ has resulted in taking real money out of dairy farm milk checks and has made it difficult, in some cases impossible, for producers to manage their risk with tools they purchase in the marketplace and through USDA.

Interestingly, the nation’s largest Class I fluid milk company — Dean Foods — filed for bankruptcy sale and reorganization in November 2019 in the midst of the first appearance of negative PPDs and depooling pre-pandemic.

By January 2020, PPDs turned positive but narrow in comparison to prior history, so that’s still a loss. Then, in February, a month before the Coronavirus shutdown, negative PPDs and depooling again showed up in the Central, Pacific and California FMMOs.

By June 2020 — in the midst of the Covid-19 pandemic and one month after the bankruptcy sale of most of the Dean Foods Class I fluid milk plants to DFA — severely negative PPDs of -$1 to -$10, exacerbated by depooling, were prevalent across all FMMOs, most every month from June 2020 through the present.

Even in the Northeast FMMO, where statistics show positive PPDs in some months when other FMMOs were negative, the basis loss to Northeast producers is real because even the positive PPDs in FMMO 1 over the past 24 months are $1 or more below where they were just two years earlier.

As reported in Farmshine last week, Secretary Vilsack says it’s “complicated” and the industry is “divided” so no “significant” changes can be made “quickly.”

NMPF says it intends to request an FMMO hearing of its proposal to adjust the adjuster to improve equitable treatment of producers.

IDFA is publicly silent.

Other groups are floating a proposal that, if officially proposed in an emergency hearing, would turn the deal into a full and lengthy FMMO hearing.

During a Hoards Dairy Livestream session May 5 with Erin Taylor from USDA AMS Dairy Division, a little more was learned about how USDA handles ‘emergency’ FMMO hearings. Taylor said proposals can be put forward with arguments as part of the package, explaining the emergency to make a case for why the USDA should move quickly. USDA then typically responds and gives the industry a 30 day notice if a hearing is granted, but the statute only requires 15 days, and 3 days at a minimum — depending on the emergency conditions.

Like other FMMO hearings, testimony is taken, and if USDA agrees with the proposal based on the evidence, the department could do a recommended decision, receive public comment and then publish a final decision and conduct the producer vote. Or, the Secretary can do a tentative final decision for immediate producer vote while taking testimony concurrently. In such a scenario, USDA would come back and consider that testimony, and if a change to the tentative final decision is made — based on testimony and comment — then a second producer vote would be conducted.

Generally speaking, according to Taylor, a move to use a tentative final decision cuts about 4 to 5 months out of the hearing process, but this is not done without proponents showing good cause and when there is no opposition to the proposal.

And the Congress? They made the change from ‘higher of’ to ‘average-plus’ at the request of IDFA with agreement by NMPF in the last Farm Bill.

Many members of Congress don’t know what they did. Others are “blowing it off” as “pandemic-related,” when in reality the issues began in 2019.

Lawmakers are also being told the 2018 ‘average-plus’ deal was an historic agreement between “producers” (NMPF) and “processors” (IDFA), when in reality the grassroots in either of those categories had no opportunity to be heard, to testify, to comment, and producers were denied a referendum on the change. In addition, there was little industrywide discussion.

National and state dairy organizations have been collaborating on weekly calls facilitated by American Dairy Coalition to thoughtfully approach a solution from both the short- and long-term perspectives.

While most would agree hearings on long-term FMMO reforms are needed, the short-term fix for the unvetted Class I formula change by Congress could be undone with legislation reverting to the previous formula, or through an expedited FMMO hearing as the flaws of the new formula have been revealed in both the pre- and post-pandemic markets by this average-plus change that was not vetted.

Grassroots efforts seek to raise awareness in Congress to move something forward legislatively.

While the Congress has always said it does not want to set precedent for making milk price formula changes outside of the vetting process of an FMMO hearing, and while the Congress rebuffed numerous requests for a national FMMO hearing in every Farm Bill since 2008, the Congress did go ahead and set that formula-changing precedent in 2018 by passing language in the Farm Bill to change the method for determining the Class I mover from the ‘higher of’ Class III or IV to ‘average-plus’… and here we are.

Producers can point this out when talking with lawmakers, to let them know that the current situation is unsustainable. Producers can explain to their legislators how this impacted them, to help them understand there is more to this story than “it’s the pandemic and you’ll be fine.”

If nothing is done, several industry observers see dairy farm exits rising at a faster rate in the coming year.

In short, the Class I mover change in the 2018 Farm Bill:

— was not vetted through a transparent hearing process,

— disrupted orderly marketing,

— undermined Federal Order purpose,

— created NET losses for producers of $751 million in Class I value (May 2019 through April 2021), and contributed to a net loss of over $3 billion in negative PPDs and depooling,

— created additional losses for producers in the failure of risk management tools not designed for inverted pricing, and

— undermined performance of the DMC safety net due to basis loss.

While the American Dairy Coalition continues to facilitate grassroots producer discussion and seeks a seat at the table for producers with NMPF and IDFA, ADC has also sent an email to dairy producers and organizations with a letter they can provide to lawmakers.

The most important thing is for lawmakers to understand how the pricing change, and the domino effect of negative PPDs and depooling have affected their already struggling dairy farm constituents over the past two years.

To locate the Senators and Representatives for your state, visit https://www.govtrack.us/congress/members