DMI by the numbers, proprietary path of partners is paved

By Sherry Bunting, Farmshine, August 30, 2019

CHICAGO, Ill. — As the path of dairy checkoff promotion continues to evolve — especially since 2008 when a series of memorandums of understanding were signed by Dairy Management Inc. (DMI) and the National Dairy Council (NDC) with then USDA Secretary Tom Vilsack — the money flows increasingly toward DMI partnerships, agency services and executive staff through sub-agencies of DMI that facilitate the proprietary partnerships.

Innovation Center for U.S. Dairy, U.S. Dairy Export Council, GENYOUth, Newtrient LLC, are a few of the vehicles for “proprietary” industry partnerships, which DMI refers to as ‘leveraging industry resources.’

In particular the Innovation Center, working closely with USDEC, is the vehicle for pre-competitive “proprietary” dairy innovations.

In fact, this innovation really began through a relationship between Fonterra USA and DMI as early as the 2006-08 time frame. Their respective ‘test kitchens’ are just three miles apart on the outskirts of Chicago, where milk proteins and ingredients, concentrators, extenders and utilization characteristics have been the focus of proprietary work.

As DMI CEO Tom Gallagher stated at a dairy conference in Wisconsin in March, food scientists from DMI have “cracked the code” on cheese-melting characteristics for partners like Taco Bell and Pizza Hut. He also talked about the new pizza cheese innovations with Dominos to meet USDA school lunch rules, calling them “wildly popular with students.”

From that March presentation at the Professional Dairy Producers of Wisconsin conference in Madison, the Wisconsin State Farmer quoted Gallagher summing up his job: “My job is real simple. I have to get the industry to do things with your product after it leaves the farm — that consumers want.”

Toward that end, Gallagher explained to the shift away from television ads and other “one-way” promotions to social media “conversations” and industry “partnerships.” It has shifted from promoting milk and dairy to providing product development specialists working for DMI’s partners — like McDonald’s, Dominos, Taco Bell and others — to get them to “do stuff” that puts more dairy in the fast-food pipeline (look for more on this in a future article).

A key driver of the shifting direction of checkoff promotion is the world renown Edelman company, with its headquarters in Chicago — 17 miles east of DMI’s offices and just two miles from the Chicago headquarters of Fairlife LLC, two miles from the Chicago offices of Coca-Cola and a mile and a half from PepsiCo’s Chicago offices.

According to Richard Edelman, in his May 2017 blog post at the company’s website, the Edelman company (known worldwide simply as Edelman) has been the public relations and communications firm for DMI for over 20 years. 

In this particular post, Richard Edelman writes about the launch of DMI’s Innovation Center for U.S. Dairy in 2008 and how he is looking forward to the leadership of the former USDA Secretary Tom Vilsack coming on board that year (2017) as president and CEO of checkoff-funded USDEC and Innovation Center for U.S. Dairy (after signing MOU’s with DMI while Secretary in 2008-09).

This Edelman blog post covers the launch of the Undeniably Dairy campaign that month (May 2017), calling it the first time Edelman has had a project “bringing together a fully integrated campaign at this scale.”

With offices worldwide and mergers throughout the advertising and public relations industry, Edelman is the world’s largest such firm and is open about their re-alignment of clientele around “social responsibility” and  “global environmental sustainability.” In fact, they’ve dropped clients with businesses not deemed “environmentally sustainable.”

Edelman and its clients — such as PepsiCo, Danone, Unilever and others — are listed as prime sponsors buying-in to the EAT Forums that are pushing the EAT Lancet report about the ideal global diet of cutting per-capita animal protein consumption – meat, dairy and eggs – by more than 75% over the next 10 years to “reduce the environmental impact of feeding 10 billion people.”

The firm was instrumental in setting up GENYOUth in 2008 and recommending CEO Alexis Glick as its coordinator. Not only are DMI and PepsiCo clients of Edelman, so is the National Football League. The NFL has a longstanding relationship with PepsiCo that predates the GENYOUth / Fuel Up to Play 60 alliance with dairy checkoff.

And, while PepsiCo is an Edelman client, Coca Cola is a headline client of Edelman’s spinoff Zeno Group, a global integrated communications agency founded 20 years ago by Richard Edelman’s father Daniel J. Edelman after Richard had taken over the reins of Edelman.

Edelman, fairlife (Coca Cola) and NFL Properties are the Top 3 Contractors paid by DMI in 2017, as shown on the IRS 990.

So what do the numbers tell us about the above-mentioned relationships?

According to the IRS 990 forms filed by DMI for tax-year 2017, the Daniel J. Edelman, Inc. company, mind-bending mastermind of “social marketing”, was paid $15.3 million in 2016 and $17.8 million in 2017 for “agency services.” That was 11.5% of DMI’s total budget of $155 million in 2017.

DMI paid NFL Properties LLC, New York, N.Y., $5.12 million in 2016 and $5.63 million in 2017 for “Promotion.” Is this the pay-to-play cost of the GENYOUth alliance and MOU? After all, the NFL is positioned as a partner with dairy farmers in the “dairy-farmer-initiated” GENYOUth. The NFL was in on the MOU signing with DMI and Tom Vilsack while he was Secretary of Agriculture.

But, while the NFL’s annual contributions to dairy checkoff’s GENYOUth are listed on GENYOUth IRS 990s as ranging from $370,000 in 2014 to $945,000 in 2017, DMI lists checkoff payments to NFL Properties of between $5 and $6 million for 2016 and 2017 on the DMI IRS 990.

It’s all about the kids, right? There’s more here than kids and breakfast carts.

Meanwhile, fluid milk sales continued to decline, even more rapidly over the 2008-18 decade as low-fat and fat-free school promotion and provision was dairy checkoff’s best play while the plant-based alternatives continue blitzing consumers with – you guessed it — television ads and “one-way” promotions that DMI says “don’t work.”

The alt-beverage industry has worked with Edelman client PepsiCo on its low-fat product portfolio through a variety of incubator projects involving plant-based alternatives for dairy products.

The alt-beverage industry is working closely with Edelman client Danone, which has set a goal to transition much of its yogurt market into plant-based alternatives over the next 5 to 10 years, opening the world’s largest plant-based yogurt facility in upstate Pennsylvania earlier this year.

The alt-beverage industry has even convinced the nation’s largest dairy-farmer-owned cooperative, DFA, to invest in alternative beverage production assets and to innovate with a DMI-checkoff-funded product innovation — a new blend of low-fat, lactose-free dairy milk combined with 50% almond or oat beverage that rolled out in Minnesota in August 2019, with sights set on the Northeast by 2020.

DMI is spending checkoff dollars in search of the next fairlife on which to hang dairy promotion’s hat.

Incidentally, Fairlife LLC received $8 million in DMI checkoff funds in 2017 for “promotion,” according to the most recent publicly-available IRS 990 documents.

So, what else can be learned from DMI’s IRS 990 returns in 2017?

For starters, they had $2 million fewer dollars to work with compared with 2016. Total revenue controlled by DMI was $155 million, along with the unified marketing plan that filters down through regional agencies spending the other half of the dairy farmer checkoff revenues that total right around $320 million. Some state dairy promotion order boards, like in New York, automatically give 25% of their budget (2.5 cents of the state’s dime) to DMI as a matter of course. For other boards, the pass-through may be more, or less.

Looking at program areas, the most recent IRS 990 for 2017 shows that $110 million of the $155 million in checkoff funds under direct management of DMI was described to the IRS as “program funding revenue,” $39.5 million as “core funding revenue” and $5.6 million as “contract services revenue.”

Of the total $155 million in revenue for 2017, DMI categorized $82.2 million as “domestic marketing”, $17.1 million as “export”, while $7.85 million was research, and nearly $7 million for contract services and other expenses.

Since we know that Edelman received $17.6 million from DMI for “agency services” in 2017, it’s clear that some of that is in a category other than “contract services.”

Compensation of board officers, directors and trustees totaled just shy of $3 million.

Other salaries and wages totaled $17.6 million, with pensions and contributions $3.1 million, other employee benefits $2.3 million, and payroll taxes $1.37 million.

Legal, accounting and other totaled around $550,000, office expenses $1.5 million, information technology $2.7 million, rents or occupancy $1.65 million.

In total compensation from DMI and related agencies under DMI control, the highest paid staff in 2017 was executive vice president Dr. Greg Miller (Doctor Dairy), who heads up NDC’s Dairy Research, at $1,546,760.

Listed as a “former highest-compensated employee”, Daniel Chavka, one of several DMI chief financial officers, was paid $769,475. Chief financial officer Carolyn Gibbs was second-highest, paid staff at $1,191,557 through July, and another CFO Quinton Bailey earned $246,542 in 2017.

DMI CEO Tom Gallagher was paid $899,810, followed by executive vice president Jean Ragalie-Carr at $857,406. She is a registered dietician serving as National Dairy Council president.

Fifth-highest paid officer is former Secretary of Agriculture Tom Vilsack in his first year as a DMI executive vice president, serving as president and CEO of DMI’s USDEC. From DMI and related agencies under DMI control, Vilsack was paid $800,557 in 2017.

DMI president Barb O’Brien was compensated $649,419 in 2017.

Additionally, two other DMI executive vice presidents Mark Leitner and Elizabeth Engelmann were compensated $638,041 and $478,809, respectively, in 2017.

The total for items related to salaries, other compensation, and employee benefits for 2017 was listed at $27.37 million – 17.7% of total revenue in 2017.

The agency services of Edelman, at $17.8 million, was 11.5% of total 2017 DMI revenue.

The $8 million paid to Fairlife LLC was 5% of total revenue.

DMI travel was listed at $3.55 million, while the line item for conferences, conventions and meetings was $1.46 million in 2017.

The DMI board chair (listed as Paul Rovey in 2017) was paid $25,000. Other board officers and members of the executive board saw compensation ranging from $1800 to $8600, while many board directors were listed as receiving zero compensation.

To be continued

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DMI’s mission has undeniably strayed

By Sherry Bunting, Farmshine, August 23, 2019

CHICAGO, Ill. – Since Dairy Management Inc (DMI) was formed, it has grown to include (and control) many agencies and partnerships that put much of the work into the zone of “proprietary,” even to the 81 voting DMI board members.

In the portion of the most recent 2017 IRS 990 form, where DMI is asked to describe its program accomplishments, the responses specify that, “DMI partners with foodservice industry leaders to help create dairy-based innovation to drive dairy sales and build trust in dairy products.”

The response describes 2017 activity in detail. 

While the work done to boost cheese use by restaurant chains resulted in increases of milk equivalent tonnage that are quite impressive, according to DMI (look for more on that in a future article), it is the fluid milk sector reinvention that we will examine here.

In its 990 description of fluid milk partnerships, DMI states: “The dairy checkoff program, working with committed milk processors, embarked on a comprehensive revitalization strategy to reinvent the milk experience for consumers.”

What does that mean? 

DMI explains: “The focus includes milk as a standalone beverage as well as an ingredient in other beverage segments such as coffee, tea, smoothies, energy drinks and more.”

As part of this “comprehensive revitalization” effort, the DMI board approved partnerships since 2010 with eight companies they deem as leaders and innovators in the milk and beverage arena, including: Dairy Farmers of America (DFA), which just recently launched the Live Real Farms Dairy + Almond and Dairy + Oat ‘milk’ comprised of half low-fat lactose-free dairy milk and half almond or oat beverage; Darigold/Northwest Dairy Association, which among other new fluid milk products markets a fat-free creamer it calls ‘fat-free half-and-half’ (a contradiction in terms).

Also among the eight are these current partners as of 2017: The Kroger Company, which sources 80% of its milk to Select Milk Producers / Fair Oaks;  Shamrock Farms, which partnered with DMI on the Rockin Refuel brand found in chains like Subway nationwide; and Coca-Cola/Fairlife.

Specifically, the 990 form reports that, “The Checkoff program supported Lactaid innovation, marketing and health professional outreach, which spurred innovation and growth in the lactose-free segment overall.”

The 990 description states that the dairy checkoff supported innovation in extended shelf-life brands as well.

But its signature is fairlife, according to the 2017 form 990, which states: “DMI assisted and invested in the national 2015 launch of fairlife milk. The goal was to create a national fluid milk brand leveraging the resources and scale of Coca-Cola. Fairlife has been a tremendous success and continues to grow, achieving dollar sales of $250 million,” according to DMI.

“This is a feat that fewer than 1% of new products achieve,” DMI states further, adding that, “About 50% of consumers repeat their purchase of fairlife, a good predictor of its success moving forward. Based upon fairlife’s initial success, fairlife’s owners have announced (in 2017) the addition of two new production lines to meet consumer demand.”

Those production lines, according to DMI, were planned for installation in 2018. Production lines are also planned for Canada as the product was piloted there in 2018.

According to DMI, a new fairlife plant in Arizona is set to begin production in late 2019.

Other partnership products, such as Shamrock’s Rockin Refuel and the coffee and tea latte drinks with Shamrock and with Kroger were mentioned in the fluid milk portion of DMI’s 990 description of accomplishments.

In summary, states DMI, “Our partnerships are already stimulating change in the industry and fundamentally changing the way the fluid milk industry does business by driving investment in modern infrastructure and by creating new products.”

In fact, according to the DMI 990 form, the agency states that the lactose-free milk segment grew by 15% in 2016 and 11.5% in 2017.

Meanwhile, diet and health professionals are increasingly recognizing the benefits of regular whole milk and the A2 milk on digestive sensitivity. This is something that is not promoted by any mandatory dairy checkoff organization and whether it is conventional whole milk or A2 milk, there is no need to further process the milk to obtain the benefits on digestive sensitivity or lactose intolerance.

For example, New York City registered dietician, certified diabetes educator and author Laura Cipullo writes: “When someone eats full-fat dairy versus low-fat dairy, the fat will actually delay the absorption of the milk’s sugar (lactose). As a result, blood sugar rises more slowly over a longer period of time. Consequently, insulin follows this same pattern. Less circulating insulin means less risk for development of insulin resistance and diabetes.”

This was further supported at the recent hearing in Harrisburg, Pa. that focused on getting whole milk back in schools.

During the hearing and rally, registered dietician and nutrition professor Dr. Althea Zanecoskey stated that whole milk provides ‘satiety’, helping those consuming it stay fuller, longer. She said studies show how children consuming whole milk, compared with low-fat (1%) milk, had lower body fatness and less risk of obesity. They also had higher vitamin D status. It took three cups of low-fat milk to get the vitamin D status seen in children after consuming just one cup of whole milk. Vitamin D is a nutrient of concern, according to medical professionals finding it lacking in children and youth.

Whole milk, in and of itself, checks all the boxes.

According to Cipullo, the milkfat found in whole milk “calms digestive sensitivity.”

In fact, according to various expert comments at the USDA Dietary Guidelines docket in the Federal Register, the beneficial milkfat consumed in Whole Milk, reduces the amount of lactose per 8-oz serving, and even more important, as stated above, the milkfat in Whole Milk slows the absorption of the lactose.

Cipullo explains: “Full-fat dairy is lower in lactose, making it easier for individuals with lactose intolerance to digest compared to low-fat or no-fat dairy,” she writes. “Meanwhile one specific fatty acid contained in dairy is known to aid in gastrointestinal health, and according to a 2013 review from Polish researchers, may actually hold promise in the treatment of IBS and promoting healthy gut bacteria.”

While the innovators partner with dairy checkoff to “reinvent the milk experience”, there is evidence now that a simple solution — that would benefit all dairy farmers paying into the mandatory dairy checkoff from all markets — would be to promote and support real, simple, un-fooled-around-with whole milk.

USDA’s oversight and the flawed Dietary Guidelines are the only obstacles standing in the way, despite a growing list of research-based information showing that whole milk holds beneficial keys to health, not harm, when it comes to long-term cardiovascular disease risk, obesity, body mass index, diabetes and other metabolic disorders, digestive health and sensitivity, vitamin D status, nutrient density, nutrient absorption, satiety (feeling fuller, longer), memory and cognitive focus, as well as mood and mental sharpness. Not to mention the more than a dozen essential nutrients that ride along when people choose whole milk because it tastes good instead of opting for empty calories from other non-dairy beverages.

DMI shows its goals for innovation, further processing, blending, and marketing of ‘dairy-based’ or ‘dairy-included’ beverages as a market-building path for the future.

But at the same time, stronger promotion of the original, purely perfect Real Whole Milk would resonate with consumers, because most do not know anything about milk, and when they learn the truth, it opens their eyes to whole milk as a choice.

Whole milk could be ‘reinvented’ just as it is, with better packaging and the freedom to actually promote it. But due to USDA’s control of the message and direction of dairy checkoff, and the proprietary nature of the many partnerships that the checkoff funds, it may be time to reinvent the mandatory dairy checkoff.

Does milk need reinventing?  Simply-unfooled-around-with whole milk checks all the boxes for health and flavor. Meanwhile, DMI states in a 2017 IRS form 990 that it has a “comprehensive revitalization strategy to reinvent the milk experience for consumers.” Since whole milk was pulled from schools in 2009, more young people are growing up believing they are lactose intolerant. Meanwhile, the innovations brought to market with DMI partners over this time period are dairy-based low-fat lactose-free and blended beverages. However, a growing body of research shows science-based reasons why the fat-free and low-fat milk consumption promoted to youth by the dairy checkoff through FUTP60 and GENYouth, in partnership with USDA, may actually be creating much of the new and milder forms of digestive sensitivity that could be avoided by simply consuming regular whole milk. Graphic by Sherry Bunting

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Value added? Or subtracted? DMI, DFA partner on new blend

By Sherry Bunting, Farmshine, July 26, 2019

MINNEAPOLIS, Minn. – The news of DFA’s new Dairy Plus Blends – a half lactose-free low-fat milk / half plant-based beverage concoction broke mid-July. DFA’s Live Real Farms brand website showed Lund and Byerly’s stores as the place to buy the Dairy + Almond and Dairy + Oat, but a visit to two stores on the list at the Minneapolis city limits did not have the beverages in the dairy case – yet.

Looking at the packaging, a first impression is: Wow, why doesn’t 100% milk packaging look this good. If only the agencies managing mandatory milk promotion funds and dairy-farmer-owned co-ops put as much thought into packaging and marketing 100% Real Whole Milk as they do for a diluted “innovation,” imagine what could be accomplished!

A further examination of the new Dairy Plus Blends packaging brought this thought: Why use words such as “Purely Perfect” and “Original” for a blend, when such words would seem best reserved for marketing the actual original, purely perfect 100% Real Whole Milk that the DFA member-owner dairy farmers produce and that actually results in the dairy-checkoff promotion funds.

We asked DFA for some background. In fact, we sent 11 questions to DFA and to DMI communications staffs because we were aware that DFA’s Live Real Farms brand is part of a checkoff-supported partnership between DMI and DFA to innovate products in the fluid milk space under the auspices of DMI’s Innovation Center for U.S. Dairy.

We first wanted to know, why the blend? Why not just create an almond FLAVORED 100% real milk beverage? Because, after all, the new Dairy Plus Blends have half the calories, but they also have half the natural nutrients and only slightly more than half the protein of real 100% dairy milk.

It seemed like value was being subtracted, not added.

We all know that almond beverage has barely any almond in it, being mostly filtered water and some additives, so it seemed like the product is an offering of diluted milk. Since we couldn’t find any on the shelf yet at Lund and Byerly’s in Minneapolis, we aren’t sure if consumers will be asked to pay more – for less.

Of course, the packaging does have more. It touches all the right chords.

DFA was kind enough to answer some of our questions, although we have heard nothing back yet from DMI.

“In an effort to meet the demands of modern consumers, Live Real Farms has launched a new beverage, Dairy Plus Blends, which combines all the nutritional benefits of real cow’s milk with the flavor and texture of alternative beverage options like almond or oat,” stated Rachel Kyllo, senior vice president of growth and innovation at Live Real Farms, a DFA-owned brand.

The reply came by email to the questions we submitted.

“All the nutritional benefits of real cow’s milk”? (The label says 5 grams of protein per 8-ounce serving, not 8, and the other naturally occurring nutrients in real cow’s milk are also reduced.)

Kyllo continues in the reply:

“Nearly 50% of consumers who buy plant-based beverages also have dairy milk in the fridge, so they’re buying both products,” she writes. “This product is not about pivoting away from dairy, instead we saw an opportunity to fulfill a need as people like almond or oat drinks for certain things and dairy for others. This product combines the two into a new, different-tasting drink that’s still ultimately rooted in real, wholesome dairy.”

We wanted to know DMI’s part in developing this concept, seeing that dairy farmers mandatorily pay a checkoff promotion fee on every 100 pounds of milk they sell.

DFA’s response stated that, “The overall product concept for Dairy Plus Blends was developed along with DMI and the Innovation Center for U.S. Dairy. Consumer focus groups were conducted with Millennial and Gen X primary shoppers. Overall feedback was positive regarding the product concept, taste and packaging.”

We wanted to know more about how the product will roll out.

“Dairy Plus Blends are now being test marketed at more than 300 retail stores in Minnesota,” the DFA response stated. “If successful in test, the brand plans to roll out more broadly across the United States, beginning in the Central and Northeastern regions of the U.S.”

DFA has already been bottling plant-based alternatives in copacking arrangements in the Midwest. And, the Cumberland plant in New Jersey, formerly owned by the Camalero family, and purchased in 2017 by DFA, bottles plant-based beverages also as the Camaleros still operate the plant, and they retained ownership of their plant-based beverage investments.

We also wanted to know how the real dairy milk that makes up 50% of the new Dairy Plus Blends is classified for Federal Order pricing, but that question was not answered.

And, we wanted to know if DFA in its “partnership to innovate” with DMI has any plans to innovate the marketing and packaging of 100% Real Whole Dairy Milk in such a pleasing and attractive way as they have with the Dairy Plus Blends? That question was not answered either.

We also wondered if this “blend” will pull dairy milk drinkers as they hear all this talk about becoming “flexitarian” – cutting back on foods that come from cows and adding more foods that come from plants to, you know, save the earth and all.

Along these lines, DFA’s response attributed to Kyllo at Live Real Farms was: “We’re confident milk will continue to have a place on family tables for years to come, but we also understand and appreciate that consumers have choices in what they drink today. We think Dairy Plus Blends offer a refreshing taste experience and provides a unique way to get dairy in front of consumers who might explore other beverage options.”

We wonder if this is an invitation by a dairy-farmer-owned cooperative, funded in part by dairy-farmer-checkoff to lure consumers into experimenting with something new instead of dairy milk or will it appeal to people who have no intention of drinking 100% real dairy milk? It’s hard to tell, but it’s worth watching.

Some advocates of this kind of experimentation say that the fluid milk market needs more lactose-free choices. There are already lactose-free milk choices, there is also A2 for other types of digestive sensitivity, and there’s one thing everyone seems to be forgetting. Whole milk is more easily digested by people with these sensitivities. There’s actual real proof of this now, not just personal experience, but that’s a story for another day.

In this time of continued fluid milk sales losses, farm milk prices below breakeven for five years and dairy farms exiting the business, why does the dairy-checkoff not re-brand and re-market and innovate the packaging and promotion of Real 100% Whole Milk that is virtually 97% fat-free and loaded with natural goodness? Why not actually partner to innovate the brand-promotion MILK? What a novel idea!

Oops, that’s right. I think USDA lawyers would have a problem with that.

One thing that is impressive coming out of Live Real Farms is the Wholesome Smoothie line of Whole Milk yogurt smoothies last year. DFA says it plans to develop “a robust product line with the launch of additional, innovative products over the next three to five years.”

We’ll be paying attention to all of them.

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Dairy mis-leaders call for unity, bring on misery

By Sherry Bunting, Farmshine Op-Ed, July 19, 2019

Dairy producers find joy in the big and little things in life on the farm, working with family, raising children on the farm, building or continuing a family business, seeing the sun rise and set as they work, producing wholesome milk they take pride in, helping a cow have her calf, watching that calf grow and develop, planting tiny seeds, watching a crop grow.

We know personal stress on farms is at an all-time high, amid price and weather pressures. There is some optimism returning as last month’s milk checks were a bit better, and the futures markets fueled some optimism before hitting the see-saw again. Also, the first round of dairy margin coverage (DMC) checks have been received or are in the mail. (Signups for 2019 DMC end Sept. 20).

But despite the return of some optimism, stress continues to build on our dairy farms because the hole that has been dug is so deep, the ground to make up so vast, and the future sustainability of family farm businesses more challenged by the industry’s control of how they operate.

My thoughts here are based on personal meetings, phone conferences, emails and other communications with young farm families operating small herds and multi-family operations with very large herds. 

In my various work and volunteer efforts as a freelancer — I visit a lot of dairy farms. 

Even though milk prices are gradually rising, net mailbox prices are flat and costs are going up, eating into the price gains. Forages are tight, weather is an added burden, farmers are utilizing new strategies, adopting progressive practices, improving their business management – and yet, their farms and families are fraying over the question of whether to stay the course or sell the cows and leave it behind. 

Many are taking on other work and adding to their already long days with efforts to bring in income to support the farm.

Communities are feeling the long fingers, and farmers and related agribusinesses are supporting each other as best they are able. The levels of farm community unity have probably never been higher in this regard: People are coming together to promote milk through voluntary efforts, to support their neighbors, and to reach out to each other as friends and colleagues.

The industry leaders say the dairy industry must be unified. They say it is wrong to challenge the path of the industry because doing so is “depressing and divisive” and “brings more stress onto the farmers.”

Don’t challenge the system, they say, because this creates negativity and stress when farmers need to stay positive and united. This, I’ve been told by leaders.

Questions and challenges are not meant to divide or stress our farmers. The stress is already there. It may not always be spoken, but it is there, and it is visible. 

This stress cannot be painted over with pretty colors.

Stress on dairy farms today is rooted in the way this industry and various milk pricing and nutrition policies have economically failed our farmers (and our consumers), especially since 2008.

To talk about the industry’s path — to discuss and debate marketing decisions made with producer dollars — does not mean one is being divisive. This is America where ideas and challenges can still be discussed and debated, and where leaders can be questioned and held accountable.

How much more divided can an industry become than to see marriages, families, businesses, dreams fractured from the undue stress of not only a tough deal on the milk pricing but perhaps even more concerning, the increased levels of control that this same system puts upon our farmers, and how they manage their farms, as a condition to keep their milk contracts?

This loss of independence and loss of their ability to control the ‘controllables’ is of utmost concern. If we ignore these trends — in an attempt to be passively non-divisive — does that make the issue or problem go away? Certainly not.

Rapid streamlining of the dairy industry is underway, at least in part because this is the path charted in 2008 by the DMI Innovation Center for U.S. Dairy and the U.S. Dairy Export Council working via memorandums of understanding with USDA Ag Secretary Tom Vilsack who is today a DMI leader as USDEC president and CEO and instrumental in the Innovation Center for U.S. Dairy. 

Both USDEC and the Innovation Center are primarily supported by the mandatory checkoff paid by dairy farmers; but they also partner with food supply chain companies that work on proprietary products, ideas and concepts for the expressed purpose of growing the dairy sector globally.

The industry leaders tasked with spending the farmer’s 15 cents per hundredweight say raising exports to 20% (last year was 16%) is the key for a growing dairy industry.

Most notably, Vilsack reported in May that, “2018 was a record year for U.S. dairy exporters with export volume up 10% from the prior year. Simply put, exports support the growth aspirations of the U.S. dairy sector.”

Nowhere in his statement, or the entire blog post at USDEC, did Vilsack mention the dairy farmers who pay his salary. He mentions the dairy exporters and the dairy sector, but not the dairy producers.

Are exporters and sectors paying his salary of $750,000? No, not really. A small portion of USDEC is funded by ‘industry’ memberships, and importers pay a smaller checkoff, but the bulk of the agency and its CEO Tom Vilsack are funded directly from government-mandated dairy producer checkoff funds.

Where are the statements about a promotion agenda that seeks to return a fair price and livable income to those producers paying the agenda-makers salaries?

At various meetings last year where milk markets were discussed, dairy traders stated that exports do not raise farm-level milk prices. Interestingly, 2018 exports were higher than 2017 while 2018 prices paid to dairy farmers were much lower than 2017.

The direction of the dairy checkoff is toward growth of the dairy sector globally, at all costs, and yet the U.S. dairy farmers are paying the bill for this, with USDA having very close control of it.

This goal has been positioned to farmers as an all-out race to gain global market share before other countries do it, without a methodical approach or review on the impact to domestic markets and producers along the way.

This global agenda is also steering the sustainability frameworks and alliances DMI’s Innovation Center is forming that will control more aspects of management at the farm level in the future.

In recent proof of conversations between farmers and checkoff staff and board members, questions about Innovation Center projects, alliances and partnerships were passed off as though the board receives its information on these projects on a “need to know” basis. A board member stated in these exchanges that they are not concerned with seeing every detail of a proprietary project because DMI’s attorneys and USDA’s attorneys know the details, and the board trusts the staff.

(I have served on boards elected by citizens. Trust in staff is critical, but so is transparency of projects paid for by a checkoff — the same as a school tax.)

For some, a call for unity means don’t ask questions. For others, it means get informed and start mobilizing a grassroots unifying effort.

In a copy of non-executive February DMI board minutes received by Farmshine, a strategy is detailed by the Farmer Relations and Consumer Confidence Committee. According to the minutes, a key discussion at the February 19-21 board meeting was stated as “farmer engagement around checkoff value is more important than ever before.”

A key bullet point was for national and local checkoff board members to “focus on the movable middle.”

Another bullet point of the discussion in the minutes is that DMI is “learning from the checkoff Facebook page and regional media coverage (Farmshine) reinforcing that you do NOT continue to engage with those detractors that cannot/will not be moved.”

While Farmshine was still seeking answers to questions and had not yet published the DMI chair’s letter of response (published Feb. 21), DMI had already taken a position in its Feb. 20 board discussion to “not engage” with detractors, mentioning Farmshine parenthetically by name in this category.

According to the minutes, the rest of the DMI board discussion on this topic centered on the need to “reach out to those farmers who see/hear from the unmovable detractors” (that would mean Farmshine readers as per the above). According to the minutes, “ways to reach the movable middle” were discussed.

So, while organizations chart a course for unity and reaching out to a movable middle, dairy farm families are focused on finding ways to move forward on their farms and to unify and inform their communities.

Even though our legislators are taking notice of the growing crisis — and some sincerely care and are trying to do something — these stopgaps and investments are a drop in a very large bucket. Those drops are appreciated, but there are big things to tackle that require courage when it comes to the needed changes in nutrition rules, checkoff rules, promotion rules, labeling rules (and also lack of standard of identity enforcement), complex milk pricing rules (while processors and co-ops are readying a proposal for their make allowance increases as soon as prices improve a bit), not to mention rules that impact the cost of doing business every day on the farm.

As dairy farm families keep moving forward, finding ways to do more with less, working longer hours with less help, taking on off-farm employment and finding other revenue streams to pay their bills — They are consequently burning the candle at both ends and incurring more stress.

The stress on farms of all sizes can be overwhelming and is felt by even the best operators.

We do need unity, yes, but the question farmers are asking themselves is: Who will be part of dairy’s unified and globalized future? They deserve to know the direction the organizations they fund are taking their product, their market, and the industry they have supplied with wholesome milk for generations.

We can do better than this in America where agriculture truly is our backbone. Without strong farm families, all else fails eventually, including our liberty and security as a nation. 

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Genetics firm gets ‘Dynamite’ boost

PA-based upstart has world’s only son of Co-Vale Dempsey Dina 4270-ET EX96

By Sherry Bunting, Farmshine, July 12, 2019

LEBANON, Pa. — Genetics is the multifaceted red-hot topic with nuances that vary across the spectrum of dairies, from small to large, breeder to commercial — and everything in between. It’s objective and subjective. Art and science. Logic and passion. Fact and opinion. All rolled up into one subject that can keep you talking for hours, if not days.

What cuts across all, is managing progress — finding ways to move a herd forward in an environment of rapid change in the face of economic constraints.

For Kendra Nagle, with the help of her righthand man Brandon DeLong, and her father Ken Reist, Top Notch Genetics LLC is that labor of love.

Collaborating with her father Ken Reist and righthand man in bull research and selection Brandon DeLong, Kendra Nagle is bullish on dairy herd progress. They launched Top Notch Genetics, LLC in March 2018. Photo by Rhoda Reist

“Our goal is to keep the dairy farmer moving forward in their genetic progress,” says Kendra, about the genetics company based from her home in Lebanon, Pennsylvania and launched March 1, 2018 — two years after starting Got Embryos.

Friday’s ‘Dynamite’ release has ignited some bullishness, and there’s more to come.

“The most exciting thing yet is Dynamite from Bob Landis. He’s by Kenosha out of the famous Dina,” Kendra reports. “We are super excited to get him out there and get people using him and hope to see babies in the next nine to 12 months. We’re excited to see how they look.”

Bob Landis of Landis Marketing and Landis-MRK Holsteins already knows how Dina’s daughters look, he’s working with many of them already.

“We’re convinced Dynamite will make pretty show babies,” says an obviously excited Kendra.

Top Notch owns bulls, leases bulls and partners on bulls. Their catalog is growing, and they offer some services that put eyes on cattle — not just the numbers and pedigrees — with linear scoring for matings based on what is, not what should be. They even help farms better utilize what’s already in their own inventory.

Co-Vale Dempsey Dina 4270-ET EX96 pictured after being named grand champion of the 2017 Canadian Royal Agricultural Winter Fair. Dina has fans around the world, but her biggest fans may be the ones in Lancaster County, Pennsylvania. Dynamite is her only son, worldwide, and he is available through Top Notch Genetics. Photo submitted

And they are handling bulls from all over. The bulls are housed and collected at two locations in California, and Brandon, who lives in Lebanon and hails from a dairy farm in Michigan, travels to the Midwest every other week, north once a month and throughout the Mid-Atlantic on the days in between.

“Brandon finds the bulls, he does the research, talks to the farmers, sets up the leases. He is an encyclopedia of cattle, especially in the show world — knowing sires, daughters, families. He knows it inside and out,” Kendra relates.

Recently, two representatives in Lancaster County have been added — James Mast, Morgantown, and Joe Wivell, Columbia — just in time for Dynamite.

Jordan Zimmerman of Misty Z Holsteins, East Earl, Pa. was the first to light that fuse, and others in Lancaster County are also getting in. It’s not every day that the son of an internationally-renown cow with some local heritage is offered, available and approachable for everyone. 

In addition to Dina’s ‘cool local story,’ her fans are worldwide with international interest coming in for the only son in the world by three-time All American Co-Vale Dempsey Dina 4270-ET EX96. 

Brandon DeLong (right) of Top Notch Genetics congratulates Jordan (left) and Dale Zimmerman as the first to purchase straws of Dynamite to light the Dina fuse at Misty Z Holsteins, East Earl, Pa. Photo submitted

Dina made her mark on the international stage in 2017, when she was reserve grand champion of the International Holstein Show at World Dairy Expo and grand champion Holstein of the Canadian Royal Agricultural Fair. That year she was also unanimous All-Canadian and All-American 4-year-old.

She came back last fall as first place 5-year-old, best udder and best production cow of a very large and competitive International Holstein Show at the 2018 World Dairy Expo.

And in January of this year, Dina was upgraded to EX-96, after unanimous consideration from multiple Holstein USA classifiers.

Since 2017, Dina has been co-owned and exhibited by Milksource of Kaukauna, Wisconsin, where she lives today and was visited by the Pennsylvania delegation during the National Holstein convention in the Dairyland State in June. Ransom Rail, Perry, New York is also a co-owner.

But her story has a twist for the locals who have followed her for all of her five years. Whether in the showring or attending cattle auctions and Holstein events, Lancaster Countians had a front-row seat for Dina’s development as the 4-H show calf of Bob’s granddaughter Olivia Gold.

Born in Preble, New York and bred by the Cates family of Co-Vale Holsteins, the Ex-96 black beauty’s story started here when Bob and his granddaughter purchased Dina as a calf at a GTPI Type Sale in 2013.

When she calved in 2014, Bob reports that he and Olivia sold half-interest to the Dueppengiessers of Ransom Rail. Nominated fall yearling in milk that year, she went on to be undefeated at World Dairy Expo in Madison and at the Royal in 2015. By July of 2017, Bob had sold his half to Milksource at the Radiance of Ransom Rail.

Dynamite will be pictured this fall, and Kendra says he’s tall, strong and deep with “a great foot and leg score and great udder traits.” What also makes him special is as a cross with no Doorman in his pedigree.

“We were thrilled when Bob called and asked if we would be interested in carrying him,” Kendra recalls. “He’s the only Dina son in the world right now being collected and available for everyone.”

For Kendra, it’s all about relationships and access. She built an international network through Got Embryos, and that’s how she met Brandon. “We launched the genetics business, started the catalog, kept collecting and growing and hitting the pavement,” she says. “We’ve been through four proofs since we started, and are streamlining, getting better genetics and seeing opportunities open up.”

The bullishness continues. Kendra reports another Lancaster County bull from Bob Landis will debut this week.

“Denali has a cool story too,” she says. He carries Bob’s prefix, but Gary Martin is his owner with Bob and Top Notch buying-in for collection.

Bob had Denali’s dam at the Martin farm for calving, and when she had a bull calf, Bob said ‘keep him’ as toward payment. Gary is a smart 17-year-old. 

“He liked the pedigree and saw some interesting things behind the little bull calf, so before making any decisions he got Denali genomic-tested, and he came back +4.06 for Type,” Kendra recounts. “He called Bob and said, ‘so, I’ve got this thing to tell you.’ Bob was surprised and called us right away to see if we would be interested in carrying this Crush son. His dam is a Byway out of Gold Chip Dina and out of Gold Deb EX-95.”

In addition to Dynamite and Denali from Landis-MRK, Top Notch is working with bulls from Luck-E and others in the Midwest, and Waddell, Penn England, Tom Mercuro, Ladys Manor, and Cool Lawn, just for example in the East. The bulls they are collecting span from Pennsylvania, New York, New England and Virginia to Ohio, Wisconsin, Iowa, Washington and even Canada.

Kendra Nagle connects with Matt Engel of Luck-E Holsteins, Hampshire, Illinois about bull prospects at World Dairy Expo. Engel has Luck-E’s Keona-Red (and Polled) son of Kandie in the Top Notch lineup.  Photo submitted

On the sales side, internationally, they’ve worked with herds in Mexico, Brazil, Australia, Peru and the Middle East and are working on Europe and Canada.

 “We don’t sleep, especially when proofs come out,” Kendra confesses.

She’s driven by wanting to help dairy farmers get the genetics that best fit their herds, even as she, herself, has been searching for her ‘fit’ since 2011, when the cows on her parents’ farm were sold.

Kendra is understandably proud of the conception rates they are seeing above the average by 4 to 15%. “We listen to farmers, do our research, work out of my home, and try to keep prices affordable so farmers can use higher net merit and GTPI bulls,” she explains.

And there are no strings attached: “All of our bulls are free agents. Farmers can use a 2900 GTPI bull to make a heifer or bull and do what they want with them.”

She’s learned some lessons in these three years. “The biggest is that genetics move really fast,” she says. “Those numbers move and they change. So it’s important for us to learn and listen for what our farmers are wanting, and to match that — to be comprehensive, competitive and smart when picking genetics, to look at genomics, scores, net merit, but also cow families and to make sure the other things are there, like daughter pregnancy rate and calving ease, and to have a good offering across the board.”

Kendra loves being around dairy cows and working with the farmers. Her passion is contagious.

“I think I’ve found my fit,” she says.

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Timeline tells the story

Consumer ‘trust-building’ (or activist placating) becomes heavy-hand on the farm

By Sherry Bunting, from Farmshine, May 10, 2019

BROWNSTOWN, Pa. — Dairy promotion has been an organized deal for over 100 years, since the formation of the National Dairy Council in 1915. It’s an understatement to say times, they are a-changing.

There’s a difference between reacting to change and being proactive to get ahead of “the next thing.” And there’s a fine line between being intuitive and proactive to influence the direction of that “next thing” as compared with charting a course that actually positions an industry to require its dairy farmers to implement x-y-and-z in order to sell milk.

Yes, it’s better to be at the table than to be the meal carved on the table by others. But when dairy producer checkoff funds — paid by all dairy producers — are used to launch products that benefit only some producers in more vertically-integrated processing structures or to launch programs that lead ultimately to requirements that determine who can sell milk, those are red flags.

As the accompanying timeline illustrates, a lot has been going on since DMI was established in 1995 to manage the checkoff and develop unified marketing plans. That was also the year the U.S. Dairy Export Council (USDEC) was created.

What is even more apparent is the proliferation of logo’d programs, initiatives and strategies put forth since the 2008 creation of the Innovation Center for U.S. Dairy. This followed closely on the heels of the U.S. Supreme Court decision protecting checkoff speech as “government speech” and insulating the dairy checkoff from future court challenges in terms of the rights of producers paying the checkoff and the ability of outside organizations to challenge dairy promotion messages.

The formation of the Innovation Center for U.S. Dairy brought the processing, manufacturing and other industry sectors within the inner circle of checkoff promotion, education, and ‘streamlining’ strategies. Unification of the dairy industry is a worthy goal from a marketing perspective; however, there is a fine line between streamlining and steam-rolling, and it is important to pay attention to this because these efforts are dairy-producer-checkoff-funded and should therefore benefit — and certainly not harm — all producers paying in mandatorily.

DMI’s Innovation Center is where GENYOUth was born. Under the legal non-profit name of Youth Improved Incorporated, GENYOUth aligns with USDA dietary policy.

In fact, the Innovation Center is the entity from which two Memorandums of Understanding were signed with USDA, one involving GENYOUth and the other involving the Dairy Sustainability Guidelines and Framework.

The Innovation Center is also where new products are born, like fairlife, deemed the dairy checkoff’s fluid milk “success story.” Others are following suit (like the July launch of DFA’s Live Real Farms half dairy / half almond or oat ‘milks’ aka Dairy + Almonds and Dairy + Oats).

The Innovation Center is also where producer checkoff dollars fund the National Dairy FARM program (Farmers Assuring Responsible Management) program and its three sectors by which dairies are increasingly controlled: Animal Care, Environmental Care, and Workforce Development.

While FARM is administered and managed by National Milk Producers Federation (NMPF), it is funded by DMI via dairy producer checkoff monies. According to the FARM program website, 98% of U.S. milk production is “enrolled” in FARM (via processors and cooperatives).

We are seeing evidence that the animal care portion — and in the not too distant future the sustainability and employee care portions — are being implemented with ever-increasing mandatory authority. FARM can now over-ride Veterinary Client-Patient Relationships, federal and state regulatory milk inspections and affect legal contracts to sell milk.

What started as a voluntary program to help farms improve while demonstrating to consumers the ways in which dairy farms care for animals, environment and employees, is morphing today into a mandatory auditing and probation tool with as much or more power as legal contracts and food safety inspections.

The Innovation Center for U.S. Dairy is also the entity where producer checkoff funds are used to develop Sustainability Guidelines, Frameworks and Alliances, which are leading to goals, benchmarks, and now practices. These developments are in the staging process to become mandatory as part of the increasingly “regulatory” approach of the producer-checkoff-funded FARM program.

We got a glimpse of the direction of DMI on “sustainability” in a 2018 Report by DMI CEO Tom Gallagher.

Among the “five keys to building and maintaining consumer and thought-leader trust” outlined by Gallagher in a 2018 report, global nutrition policy and sustainability ranked at the top.

On the global nutrition side, DMI seeks to “work with external groups that are educating the United Nations on what policy should look like,” Gallagher reported. He also linked the 2020 U.S. Dietary Guidelines now being evaluated by a USDA-appointed committee to being the “guidelines that will ultimately focus on how we will achieve the 2030 Sustainable Development Goals.”

He noted that Dr. Greg Miller, head of the science and research of the National Dairy Council, is involved in global discussion to “help U.S. Dairy remain a key player as dietary and sustainability standards are worked out.”

As part of this, Gallagher mentioned the Global Sustainability Framework and Reporting, developed under the Innovation Center for U.S. Dairy and now being made part of the FARM program. “A unified voice that represents the entire dairy community is essential to reinforce consumer trust. This has been core to our programs, through organizations such as the farmer-founded Innovation Center for U.S. Dairy,” said Gallagher in the 2018 DMI Report.

“As the dominant dairy community organization for the U.S. market, the Innovation Center will use the Dairy Sustainability Framework (DSF) to demonstrate global leadership in sustainable food systems,” he said. “The DSF was developed to provide overarching goals and alignment of dairy’s actions globally on the path to sustainability.”

Part of the Innovation Center’s path in this way is its partnering alliance with World Wildlife Fund (WWF) in developing the DSF.

“The DSF will enable Dairy to take an all-encompassing approach to sustainability through a common language and alignment of international activity,” said Gallagher, “and through this generate a common sustainability commitment that can be expressed at global, regional, national and organizational levels.”

These are Edelman-style techniques for building consumer trust. Edelman is the Chicago-based firm with offices worldwide, that has been working for DMI for 20 years, and increasingly over the past 10 years.

In fact, Edelman developed the Undeniably Dairy campaign, which DMI leadership has stated on record is designed to be a new seal for dairy products in the future. DMI states that the goal is to replace the REAL Seal that used to be owned by ADA / UDIA and then DMI but is now owned by NMPF.

The Innovation Center, via DMI, is also part of a relatively new initiative called Newtrient LLC, focused on sustainability, and in particular, manure management systems with a heavy emphasis on methane digesters.

According to its website www.newtrient.com, Newtrient LLC was founded in 2015 by 12 dairy cooperatives — DFA, Land O’Lakes, Maryland-Virginia, Select Milk Producers, Agri-Mark, Darigold, Prairie Farms, Michigan Milk Producers, Southeast Milk, Tillamook, United Dairymen of Arizona, and Foremost Farms. At its website, under “Dairy Leadership”, the logos of these co-ops are shown, and the explanatory paragraph states the ground-floor involvement of Dairy Checkoff and it goes this way:

“Newtrient’s founding entities include leading dairy cooperatives from across the U.S. representing nearly 20,000 dairy farmers — and producing one-half of the nation’s milk supply — as well as the two associations that advance the entire dairy industry in terms of promotion, research, education, innovation, issues management, international trade and public policy,” the statement reads. Though not named, the description of the two associations at the end of that sentence would be DMI and NMPF.

“These organizations recognize the need to bring manure management technologies and providers together with dairy farmers, researchers and other stakeholders in order to seize the opportunities from manure, while supporting environmental sustainability,” the statement reads.

In a sense, the Dairy Checkoff continues doing promotion, education and research, but is morphing with increased momentum since 2008-09 toward developing the unified voice and streamlined template by which dairy farmers will be measured for future participation in milk markets.

The Innovation Center for U.S. Dairy works like an “incubator” hatching new products, technologies, programs, guidelines, frameworks and strategies that not only unify the dairy industry message, but also streamline its participants.

With 98% of U.S. milk production enrolled in its premier programs, like FARM, the producer-funded direction is one that now possesses the increasing authority to mandate dairy farm practices, in some cases to a micromanagement level – all in the name of that beginning notion of building consumer trust.

The logos on the accompanying timeline tell this story.

Meanwhile, it appears that the idea of regionally-sustained dairy-sourcing is becoming diluted as Dairy Checkoff board decisions are weighted by shifting milk volume geographies.

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Related links

Who is empowering whom? 1/11/19: https://wp.me/p329u7-1rG

Funding their own demise? 1/18/19: https://wp.me/p329u7-1rW

Finances raise eyebrows 2/1/19:  https://wp.me/p329u7-1sP

4th and 40 backed up to our own endzone 2/8/19: https://wp.me/p329u7-1t2

Money spent, points missed 2/8/19: https://wp.me/p329u7-1sX

How did we get here 2/15/19: https://wp.me/p329u7-1u3

Animal Ag in globalists’ crosshairs 2/15/19: https://wp.me/p329u7-1u9

‘Government speech’ rules, producers have little say 2/22/19: https://wp.me/p329u7-1uI

With science fiction, they socially herd us 3/1/19: https://wp.me/p329u7-1uO

Need for more digging is obvious 3/8/19: https://wp.me/p329u7-1v6

Keep zigging? or time to zag? 3/10/19: https://wp.me/p329u7-1ve

Should dairy farmers be forced to fund government speech?: https://wp.me/p329u7-1ve

DMI CEO on fluid milk 3/22/19: https://wp.me/p329u7-1vL

Funding real milk’s demise? 3/29/19: https://wp.me/p329u7-1vU

Peeling back the layers, 4/5/19 https://wp.me/p329u7-1wn

Truth and thoughts: a tragedy government won’t accept: https://wp.me/p329u7-1wN

Farmers bring questions to DMI chair 4/19/19: https://wp.me/p329u7-1×0

Childhood Nutrition Reauthorization in D.C. 4/26/19: https://wp.me/p329u7-1wF

Vilsack reveals Net Zero Project 5/24/19: https://wp.me/p329u7-1yf

“Government is between you and the consumer” 6/14/19: https://wp.me/p329u7-1xW

Congressman to dairy farmers: ‘Government is between you and the consumer’

Dairy Advisory Committee formed, meets with federal, state lawmakers

During a June 3 roundtable discussion between dairy stakeholders and Pennsylvania state and federal lawmakers, Nelson Troutman (right) said Pennsylvania is a fluid milk island with milk and consumers right here, but pressure pushing in from all sides. He said the state is losing its ability to compete as federal dietary rules suppress fluid milk sales while the state’s antiquated milk marketing law incentivizes more milk-swaps along the four borders as fluid milk sales decline. Clockwise from top left are U.S. Congressmen G.T. Thompson (R-15th) and Dan Meuser (R-9th), State Senator David Argall, Lolly Lesher, Mike Eby, Dale Hoffman, Tricia Adams, Nelson Troutman, Bernie Morrissey, State Senator Scott Martin, Karl Sensenig, Bonnie Wenger, Krista Byler, Craig Lutz for Sen. Argall’s office, and Katie Sattazahn. Also present were various legislative staff. Attendees shared USDA data showing that in the past 12 months, Pennsylvania lost more cows (29,000 head) and more production (66 mil. monthly pounds) than any other state in the nation, with the potential see even greater losses in the next 12 months without substantial change.

By Sherry Bunting, Farmshine, June 14, 2019

HARRISBURG, Pa. — “What I’m hearing here is that the government is between you and the consumer. You would have no problem marketing milk if you could get your message and product to the people,” said U.S. Congressman G.T. Thompson, representing Pennsylvania’s 15th legislative district over a swath of central and northcentral and northwest Pennsylvania.

That summed up the concerns related to school milk, dairy checkoff, fake milk labeling and other issues during a meeting between 11 dairy stakeholders and a dozen state and federal lawmakers and staff in Harrisburg on June 3.

It was a listening session that was followed by a productive work session as the grassroots group will continue to meet and correspond as a Dairy Advisory Committee.

(l-r) Nelson Troutman, Mike Eby, Pa. State Senator David Argall, Bernie Morrissey, Craig Lutz.

Retired agribusinessman Bernie Morrissey and 97 Milk Baleboard initiator Nelson Troutman worked with Pa. State Senator David Argall of Berks and Schuykill counties to set up the meeting.

They pulled together an advisory committee of 11 people, including Troutman and Morrissey, along with Dale Hoffman and his daughter Tricia Adams of Hoffman Farms, Potter County; Mike Eby, a Lancaster County farmer and president of National Dairy Producers Organization; Lolly Lesher of Way-Har Farms, Berks County; Katie Sattazahn of Zahncroft Farms, Womelsdorf; Krista Byler, foodservice director for Union City School District in Crawford and Erie counties, whose husband operates a crop and dairy farm in Spartansburg; Bonnie Wenger of Wen-Crest Farms, doing custom cropping and heifer raising for dairies in Lebanon and Berks counties; and Karl Sensenig of Sensenig Feed Mill, New Holland. 

I was privileged to moderate the discussion, for which an outline was provided in advance.

Congressman Thompson was joined by Congressman Dan Meuser, who represents Pennsylvania’s 9th district covering Carbon, Columbia, Lebanon, Montour and Schuykill counties along with portions of Berks, Luzerne and Northumberland.

In addition to State Senator David Argall, State Senator Scott Martin of Lancaster County attended, as ded legislative aids for Senators Ryan Aument, Elder Vogel, and Mike Folmer with additional interest from State Representatives John Lawrence and David Zimmerman.

Lawmakers said they left the discussion with “more work to do” and an “elevated awareness.” Their message to dairy farmers was: “Keep it up. Keep doing what you’re doing (a nod to the 97 Milk campaign and the planned rally for the Whole Milk for Healthy Kids Act on June 18 at the state Capitol). They said raising public awareness is crucial.

“Every few days, the bill gets another cosponsor,” said Rep. Thompson of HR 832 introduced in late January. “It will take public support and momentum to reverse this. It’s a challenging task.”

Even with evidence that bad science led to the federal school lunch milkfat restrictions, Thompson said the House Committee on Education and Labor must take up the bill in order for it to move forward. He noted that current leadership of that committee is the same as in 2010 when The Healthy Hunger Free Kids Act tightened the vice grip on milk fat. (Learn more about the school lunch changes over the past 10 to 20 years here.)

The 2010 legislation with the blessing of former Ag Secretary Tom Vilsack not only prohibited whole milk in the National School Lunch Program, it also reduced total calories, required less than 10% calories from saturated fat and made the milk part of the meal’s nutrient analysis.

With a nod to Krista Byler, Thompson said he understands more is needed beyond HR 832. “We need to eliminate the beverage information from the nutrient standards limitations,” said Thompson.

Discussion followed about the current Childhood Nutrition Reauthorization process currently underway in the Senate and what opportunities might exist for a regulatory change there.

Byler noted that while every child gets a milk, many students throw the milk away and buy sugary drinks that don’t offer milk’s nutrition.

Legislators were surprised to learn that high school students can’t buy whole milk but they can buy Mountain Dew Kickstart at school. This 80-calorie beverage made by PepsiCo — the company that also created a Smart Snacks website for school foodservice directors and received the GENYOUth Vanguard Award last November — is deemed “okay” by the current USDA Dietary Guidelines because it has fewer calories than milk, zero fat and a list of added, not natural, vitamins and minerals. But it also has 20 grams of carbohydrate, 19 grams of sugar in the form of high fructose corn syrup and zero protein, whereas whole milk has 12 grams of natural carbohydrate and 8 grams of protein.

In addition to Mountain Dew Kickstart, students in high schools and middle schools across the U.S. can buy other sweetened drinks like PepsiCo’s Gatorade as well as iced tea coolers. In addition, high schools are also permitted to have coffee bars.

Yet schools are prohibited from offering whole milk (3.25% fat) or reduced-fat (2%) with its high-quality protein and long list of natural nutrients – unless a child has a medical note from a physician.

On the flip side, schools must provide non-dairy substitutes like soy and almond beverage if a parent, not a physician, writes a note. And no notes are needed for students to throw away the milk and grab a sweetened high-carb beverage from PepsiCo.

“My purpose in coming here, after speaking with other foodservice directors across the state, is the changes that were made to allow 1% flavored milk last spring are having disheartening results. Schools have been doing the fat-free flavored milk as a requirement for so long, they don’t all understand the new rule,” Byler explained.

Part of the issue, she said, is they have their cycle menus done far in advance, and the changes to the milk — even if whole milk were suddenly allowed — do not fit into the nutrient analysis of the meal.

Before 2010, the milk was not included in the nutrient analysis of the school lunch or breakfast.

“It’s a breath of fresh air to hear members of Congress talk about this,” said Byler. “This bill (HR 832) is amazing, but it doesn’t have legs to stand on without the regulatory change to exclude milk from the nutrient analysis of the meal. For schools to have this choice, this bill needs to pass, and the milk needs to be a standalone component of the meal, otherwise schools won’t be able to make it work.”

She said the same goes for the Smart Snacks program. An exception to regulations is needed so schools can offer whole milk, just as they can offer PepsiCo’s energy drinks.

At the federal level, Rep. Thompson said the Pennsylvania Congressional delegation is working on getting a companion bill for HR 832 in the U.S. Senate. (This actually did happene a day after this report was filed for press — Senators Pat Toomey (R-Pa.) and Ron Johnson (R-Wis.) introduced the Milk In Lunch for Kids (MILK) Act this week. Bill number and text have not yet been posted)

“The biggest thing we need is to generate enough public support,” said Thompson.

The Dairy Advisory Committee urged Pa. State Senators to support a resolution on the federal bills.

On The Dairy Pride Act, Thompson was more optimistic. He believes FDA is giving an indication that the public has been misled by competing alternative beverages that infer by the name “milk” to have the nutritional attributes of milk.

Tricia Adams spoke of the many school tours she conducts at Hoffman Farms in the spring and summer, and what the kids tell them about school milk.

She says the kids are “brutally honest. They tell us, ‘This is the good milk!’ But just to get whole milk for a tour, I have to special order weeks in advance,” she says. “It’s a struggle to get enough of it at one time. It’s just not available.”

 Her father Dale Hoffman observed that farmers are so busy, it’s tough to be involved in these things. He said it is scary how fast Pennsylvania is dropping in cow numbers and production.

“Somewhere, we need to get our foot in the door. This has got to be done if Pennsylvania is going to compete. We have the milk and the consumers right here,” said Hoffman. “We need your help. We hear it’s tough to get done, but it’s time to get whole milk back in the schools.”

Mike Eby said he sold his cows three years ago, but producers selling today “are getting half of what I got.” He said the dairy situation is increasingly difficult for farm families to manage whether they are staying in, or getting out, as the value of their assets shrink along with income.

“Where is our milk going to be coming from when we all go out?” he asked.

Eby describe the power of whole milk. He has been part of an effort to give out whole milk that is standardized to 3.5% fat instead of 3.25% to meet the California standards. 

“We give the milk away at four parades a year,” he said, and the math adds up to over 10,000 individual servings. “We could give more! They love it. People are screaming for that milk.”

Circling back to Rep. Thompson’s point. The problem isn’t the product, the problem is the government getting between the farmer and the consumer when it comes to marketing the high value, nutritious and delicious product they produce.

State issues were also discussed, including needed reforms to the Pennsylvania Milk Marketing Law. Each participant also gave a fast view of the long dairy situation.

“The average dairy farmer we serve is under 150 cows, and our feed mill has 107 years in the business. We’ve seen a lot, but nothing as bad as this,” said Karl Sensenig. “We are greatly concerned about what is the future for the generations to come in our business and on the farms. We have become their bank. The situation is beyond dire, and I’m afraid we haven’t begun to see the true loss of farms. Even if the price gets a little better, many are so far gone that there’s no way out.”

Katie Sattazahn also questioned the future. She is integral to the farm operated by her husband and his brother, and she works off the farm. They upgraded their facility three years ago, never expecting a downturn of this duration and magnitude.

“The biggest thing is, we are supposed to be glad when we have a breakeven year, but that has to change. As dairy farmers, we need to be profitable to put something back into our operations,” she said. “Every dollar we spend is spent locally. Our farms provide open space and benefits for the environment, and the money we spend in our business helps the economy.”

With two young children, Sattazahn says, “If it stays the way it is, why would we encourage them to do this?”

Bonnie Wenger explained the conditions she sees in the community of dairy farmers. She explained to lawmakers the added difficulty of this year’s prevented plantings, a struggle that will get worse this fall in terms of feeding cows.

Byler also talked about the dire situation in her county. “The dairy farms support our communities. They support other businesses and bring in revenues for our school districts,” she said. “What will be left for our small rural communities?”

On the school front, she showed examples of the marketing foodservice directors see, pushing them away from animal protein. This included visuals from Fuel Up To Play 60 and its focus on fat-free and low-fat. She wonders why they can’t just talk about milk, why they have to pound home the fat-free, low-fat with every caption, every sentence, over and over. She has trouble seeing the value in it from the side of the dairy farmer or the school program.

Lawmakers and staff were taking notes, writing in the margins and circling things on the outline provided. By the end of the session, Sen. Argall said, “You’ve created a lot of work for us.”

Congressman Meuser noted this is now an even higher priority for him.

Sen. Martin said this is on the Pennsylvania Assembly’s radar, and he mentioned a package of bills coming that are “just a start.” He mentioned the dairy commission being put together to advise the legislature on dairy. 

They reminded the group to urge others to attend the rally on June 18 at 11:00 a.m. at the Capitol Rotunda in Harrisburg to support the federal dairy bills on whole milk in schools and mislabeling of non-dairy beverages. The media will be there, and this is a chance to get the public involvement that is necessary.

Here is another link to 8 ways you can help. (Swipe to read second page of this pdf).

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