Planning, partnerships, plus plant-alternative blends: DMI’s fluid milk innovations seek ‘relevant’ retail growth

The new line of Dairy Plus/Milk Blends by DFA’s Live Real Farms is described this way at the website: “Something wonderful happens when you blend 50% dairy milk with 50% almond or oat drink. New Dairy+ Milk Blends. Lighter, more refreshing than regular dairy milk. Richer, creamier than plant-based drinks. Together, it’s a whole new taste experience.” In fact, the newest tagline is “The beauty is in the blend. Nutritious, creamy milk meets the reduced sugar and calories of almond or oat drink. It’s the best of all milks. The milk for modern tastes.” This DMI / DFA innovation was launched over a year ago in Minnesota and is expected to roll out in the Northeast early 2021. The sales pitch is unreal, and dairy checkoff funds helped pay for it. We don’t see that kind of packaging and promotion effort in real milk. https://liverealfarms.com/

By Sherry Bunting, Farmshine, November 19, 2020

HARRISBURG, Pa. — In addition to the ‘DMI-led’ launch of DFA’s new ‘teen milk’ called siips, DMI is also working with processors, retailers, foodservice and technology companies to develop other ‘milk innovations’ for schools, foodservice and retail.

On a recent Center for Dairy Excellence industry call, Paul Ziemnisky, executive vice president of global innovation partnerships described DMI’s five-year-old fluid milk revitalization committee as a collaboration between the Innovation Center for U.S. Dairy, MilkPEP, NMPF and IDFA, using DMI’s insights to “make milk relevant.”

In the retail sector, Ziemniskhy talked about how plant-based beverage sales grew by a large percentage since the Coronavirus pandemic, but ‘value-added’ milk sales (such as fairlife, dairy-plus-plant-blends and other milk-based beverage innovations) grew by an even larger percentage than plant-based alternatives alone.

When asked whether dairy farmers’ are paying to fund checkoff research on non-dairy alternative products, DMI president Barb O’Brien said: “We are not doing any ‘dedicated’ research on alternatives. What we are doing has been done from a new product development standpoint,” she said.

“There has been exploration of blended products as consumers look at new flavors and options,” O’Brien defended. “Instead of letting that market walk away from dairy, we have looked at blended or ‘milk-based’ opportunities. We have looked at alternative milk-and-oats, milk-and-nuts to bring flavor and excitement to those new products.”

O’Brien stressed that all of this work has had “farmer oversight.”

“I want to assure you that 85 dairy farmers from across the country sit on the DMI board for approval of our plans,” said O’Brien.

On fluid milk, for example, she said the “dedicated fluid milk committee includes 10 farmers. They were asked to go deep and monitor the specifics of the work and the investments. They see the confidential, proprietary information from investors and make recommendations to the board.”

Ziemnisky did admit that whole milk sales — on a volume basis – topped the growth volume of other beverages in the dairy case, but he and O’Brien both focused on the value-added side of the equation. They revealed how DMI’s focus is to prove to retailers that they will reap sales growth by devoting more space to dairy innovations.

“Our partners have made capital investments of over $1 billion to help us win in retail, foodservice and school channels,” said Ziemnisky, explaining that the large and expanding dairy cases at retail are now confined to a 4 x 6 phone screen because more consumers today are choosing to shop for groceries online. “We are making sure milk is front and center in their media programs. As a result, online sales of fluid milk products are up $500 million year-to-date.”

O’Brien said DMI works “to ensure we keep dairy products moving into markets.”

“Our work covers the spectrum from consumer research to retail marketing and education of dairy case managers,” she said. “When the fluid milk revitalization alliance was formed, we learned brands do a better job of advertising. We built up the category with facts that prove to retailers how the value-added section in milk is growing more than the plant-based alternatives.

“We help them see that we’re the future, that they are getting more growth from us, and we show them: here’s how to grow the category,” O’Brien explained. “Retailers are now activating and using this knowledge to build-out additional space for new milk-based product launches.”

Case in point — the Dairy Plus/Milk Blends made by DFA’s Live Real Farms — is touted as ‘a new taste experience’ (in which the first listed ingredient is lowfat milk, second ingredient is water…)

The line of 50% lowfat, lactose-free milk and 50% almond or oat drink was launched over a year ago in Minnesota and is expected to hit the Northeast in January. Ziemnisky said the milk plus oat and milk plus almond beverages are examples of ‘relevant’ innovation, based on DMI insights.

“The urban and suburban consumer today is trying to get into shape. They are making smoothies. They are flavor explorers. They are putting habanero on cheese. They don’t want basics. We have to bring on the flavor and the innovation,” he said.

“Millennial moms are leaking out of dairy in the low-fat and nutrition space,” Ziemnisky explained. “We did a test of ‘real dairy’ with new flavor blends like oat. We thought, let’s add (oat beverage) to dairy and test it. This added to the retail basket, creating new usage occasions for dairy and grew the overall dairy sales compared to the stores that did not have the new (DFA Dairy Plus/Milk Blends) product.”

Retail sales growth on a dollar basis is very much the focus as Ziemnisky and O’Brien said they are showing retailers that adding these innovations to their offerings will drive category growth and sales revenue.

“We want consumers to experiment with new flavors that are occurring,” Ziemnisky said, using cheese as an example that applies to the fluid milk sector. “Think about cheese, of adding wine and nuts to cheese. You see that massive flavor blending. On a global landscape, we see this flavor thing as an international trend.”

Ziemnisky mentioned Kroger’s new cherry milk and the new ‘cereal milk’ launched recently by Nestle. He said there are “some other things that will launch that we can’t talk about, but think of what ice cream does (with flavor). That’s a hint.”

“To keep consumers from running to plants, we have to add some plants to dairy,” said Ziemnisky, citing this as an example of innovation he said is needed to compete.

“Our piece of that investment is very small,” he added. “Our partners are drawing on our expertise and investing ten times our investment, ultimately, in packaging and marketing at the end day.”

A dairy farmer submitted a question wondering, ‘What percentage of the total DMI budget comes from farmer funds and what portion comes from corporate partners?’

O’Brien replied that, “100% of DMI’s budget comes from America’s dairy farmers.”

(Technically, that’s not entirely accurate because importers pay a 7.5-cent checkoff per hundredweight equivalent. Importers are not dairy farmers, except when the importers are farmer-owned cooperatives.)

As regards DMI’s corporate partnerships, their funds are not mixed into one budget.


“What this plan has been designed to do is to bring partners of all types — foodservice, manufacturing, foundations, government grants — to align other people’s money with and execute against the shared values and shared priorities,” said O’Brien.

She noted earlier that the shift to a partnership planning model occurred in 2008-09, at the same time that the Innovation Center for U.S. Dairy was formed (and a year or so after the importers were required to start paying a 7.5 cent checkoff).

“We have calculated the value of corporate dollars — what I like to call ‘other people’s money’ — to combine with our dollars to become $3 billion for the execution of ‘in market’ plans,” said O’Brien. “This takes into account partners like Taco Bell, McDonald’s, and others. In marketing, they spend 10 to 20 times what we spend in the years we do that.”

O’Brien stated that this partnership plan is a “critical multiplier of farmers’ investments to make a greater impact on farmers’ behalf.”

When asked if DMI considers itself a top-down or bottom-up organization, O’Brien said the fundamental philosophy is “the most powerful partnership I have ever seen. It starts at the farmer level with national and local boards aligning behind shared values and priorities and a plan. That translates to staff sitting nationally and planning and driving strategies, building relationships and implementing the science.”

According to O’Brien, the annual planning process of DMI involves staff leadership and farmer leadership from national and local levels. It is a 9-month process that starts with the consumer insights DMI provides on how the marketplace is changing. Out of those insights, the strategies are brought forward. Then there is agreement on the strategies and tactics. Then the plans are ultimately implemented together.

“The marriage makes it a system that works for farmers,” O’Brien opined.

AUTHOR’S NOTE: Without checkoff-funded promotion, regular whole milk sales grew by 14% on a volume basis year-to-date, according to USDA. Paul Ziemnisky confirmed that whole milk sales are 41% of total dairy case sales on a volume basis, so the gains continue to make whole milk the volume growth leader in the dairy case. Meanwhile DMI fluid milk revitalization is aimed at ‘relevance’ and showing retailers and other partners the sales growth (in dollars) that dairy innovation can deliver.

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Federal prohibition of whole milk in schools challenged in PA Senate committee hearing

The Pennsylvania Senate Policy Committee had a public hearing on the federal prohibition of whole milk in schools at the state capitol June 16, 2021. Pictured is school nurse Christine Ebersole driving from Martinsburg with her daughter Vanessa Wiand, an elementary school teacher, to testify in person. Some testifiers and senators joined by zoom on the big screens. Ebersole gave recorded BMI data for secondary students that would have come up through their school years before and after the whole milk prohibition. Senators Devlin Robinson, Chairman Mario Scavello, Senators David Argall, Cris Dush, and Scott Hutchinson hear Ebersole present her findings, along with Senate Education Committee Chair Scott Martin joining by zoom. At intervals throughout the hearing, other senate committee members joined in person or by zoom, including Senators Camera Bartolotta, Dan Laughlin, Bob Mensch, Judy Ward and Gene Yaw.

‘We need to do this for our children’

By Sherry Bunting, Farmshine, June 2021

It was a deep dive into the impacts of the federal prohibition of whole milk in schools, and positive momentum chipped away at the federal log-jam. The June 16th hearing by the Pennsylvania Senate Majority Policy Committee was livestreamed. A recording as well as written testimony can be viewed at https://policy.pasenategop.com/mp-061621/ 

Even though senators came and went in person and by zoom — due to a busy morning of meetings and votes — they were engaged with good questions and insights.

By the end of the rapid-fire 90-minutes featuring 11 testifiers in three panels, Chairman Mario Scavello (R-40th) had several actionable pathways.

It was a big day for the 97 Milk effort as several volunteers were invited to testify, and Chairman Scavello (above) read — not once but twice — from a 97 Milk handout, saying he wanted to make sure it gets into the hearing record.

“All of this in an 8-ounce cup of milk is what we are taking away from kids (when they discard or don’t take the fat-free or low-fat milk served). What are they thinking out there?” Scavello declared after reading the 6×6 card Nelson Troutman (below), had given him prior to the start of the hearing.

All 11 testifiers that morning supported whole milk as a choice in schools, bringing various farm, school, organization and consumer perspectives to help state senators understand the federal stumbling blocks. Chairman Scavello complimented “the breadth and depth” of what was learned.

These actions were identified by the Chairman:

— Develop and send a Resolution from Pennsylvania to the Federal Government, and if no results, begin to look at the cost and what would be involved to do something at the state level “on our own” to position Pennsylvania schools to be able to offer fuller fat milk.

— Conduct statewide pilot trials — a school district in every county — like the 2019-20 trial at Union City Area School District, to obtain widespread data and create more awareness. Foodservice director Krista Byler had shared her milk choice trial results, and Sen. Cris Dush (R-25th) noted a similar trial was done at a school in his district.

— Reach out to Pennsylvania Department of Agriculture, which did not send representation to the hearing, to seek a direct answer on where the department stands on this.

— Have a second hearing in standing committee.

— Make other states aware of this federal issue and work on getting something done through National Conference of State Legislatures.

— Reach out to federal lawmakers to gain additional support and co-sponsors for H.R. 1861 Whole Milk for Healthy Kids Act, introduced by Representatives Glenn “G.T.” Thompson (R-PA) and Antonio Delgado (D-NY) in the House and to surface a companion bill in the U.S. Senate.

Layers of the onion were peeled.

The issues for students boil down to nutrition and taste. 

The issues for dairy farmers are losing a generation of milk drinkers, giving up market share to global beverage brands, and the resulting economics that are driving farms out of business at a rapid rate.

The issues for schools are lack of awareness, a decade of outright federal restrictions, years of fat-free/low-fat indoctrination among school foodservice personnel — some of this “conditioning” performed by the national dairy checkoff’s school wellness program via the MOU with USDA — and the 2 to 5 cent extra cost of whole milk in tight school budgets.

(Author’s note: currently, students aren’t even permitted to purchase whole milk on school grounds as an a la carte or vending machine or fundraiser option. It seems we could start by legalizing it there.)

Lost generation of milk drinkers cited.

“We lost a generation of milk drinkers since whole milk was taken out of the schools,” said Nelson Troutman. The Berks County dairy farmer painted the first round bale Drink Whole Milk 97% Fat Free. He testified that people don’t know much about milk.

“They also don’t know schools are only allowed to offer fat-free and 1% low-fat milk, that the kids don’t like it and throw it away,” he said. “We had to do something to let consumers know whole milk is not 50% fat or 10% fat or 100% fat, it’s 3.25% fat.”

Jayne Sebright, an Adams county dairy producer, mother, and executive director of the Center for Dairy Excellence said the situation is “not only scary for dairy farmers, but also for our children and our future society.

“The truth is that fuller fat milk in schools could mean the difference between a child developing a life-long milk drinking habit, or not. It’s that simple,” said Sebright. “If they don’t like milk in school, they’re less likely to drink it at home, and if they don’t drink it at home, they’re less likely to drink it as an adult, and if they don’t drink it as an adult, they are less likely to give it to their children. So not only are we losing this generation, we’re losing generations to come.”

Rob Barley, a farmer in Lancaster and York counties and chairman of the PMMB (Pa. Milk Marketing Board) encouraged state senators to help influence a change at the federal level and among other states to “fight for future milk drinkers and the farmers that produce this nutritious product.”

Mike Eby, a Lancaster County farmer, talked about how government policies and industry organizations stand between farmers and the public. Eby serves as chairman of National Dairy Producers Organization and executive director of Organization for Competitive Markets. He also represents the southeast district on the Pennsylvania Farmers Union board.

“I see the divide that keeps farmers and consumers apart — on knowledge, markets, fairness and choice. The issue of allowing children to choose whole milk at school is one that seems to escape the application of logic, freedom and fairness,” said Eby.

The state’s interest was made clear.

Troutman said the issue directly affects Pennsylvania.

“This is a fluid milk state. Pennsylvania does not have 10,000-cow dairies or huge cheese factories. We are communities of small and medium-sized farms owned by families that support their communities,” said Troutman. “We have the land, the water, and the people who want to do the work in Pennsylvania. Dairy is 37% of our number one industry: agriculture. Our dairies are struggling. Without them, we lose other businesses, jobs, support for other parts of agriculture and the economy. Tourism, we lose our tourism.”

Barley also pointed out the state’s interest.

“Fluid milk consumption is vital to the survival of the dairy industry, but even more vital to the Pennsylvania dairy producers. The premium provided by the fluid milk market and the additional premium from the Pa. Milk Marketing Board, have helped to keep Pa. dairy farmers in business,” said Barley. “If milk consumption continues to decrease, there will be a continued exit of PA dairy producers.”

Pennsylvania Farm Bureau president Rick Ebert, a Westmoreland County dairy farmer, noted that, “Providing school children with healthy milk choices is one of our organization’s leading concerns when it comes to strengthening the dairy industry. We have supported several legislative efforts in Congress to repeal current standards and give school districts the flexibility to offer whole milk and flavored whole milk if they so choose.”

Eby highlighted the “significant stake in the impact on farms, allied businesses, jobs and revenue,” he said. “Our state also has an interest in children being able to choose milk they will drink, to actually receive the nutrition, considering they eat one or two meals a day at school.”

Troutman pointed out the volumes of milk being thrown away, a point confirmed by various reports.

“Former Senator Scott Wagner told me I should go along on the garbage truck to schools and see how much milk is thrown away unopened,” said Troutman. “I would want our Governor and Secretaries of Agriculture and Education to go to a school at lunch time and see for themselves how much milk is thrown out. They can ask the students why, and they might be surprised by their answers because kids are brutally honest. Be sure to take the TV cameras along.”

Restoring choice would have positive impacts.

Sebright noted potential shifts in sales from nonfat milk to fuller fat milk would help stimulate overall demand for milk. She said that according to the U.S. Dairy Export Council, 16% of milk produced is exported, and most of that is skim solids, not fat. She said the U.S. dairy industry presently uses 97% of the milk fat produced. More whole milk sales in Pennsylvania would mean more demand for Pennsylvania milk.

On the other side of that equation, in a milk pricing system that can be inequitable, lack price-discovery and transparency, Eby noted: “When milk fat is treated as a byproduct, it can be undervalued as a component. If school children had the choice of whole milk, future generations of milk drinkers would not be lost, and new market and processing opportunities could result for dairy farms right here in Pennsylvania.”

Eby also reminded senators that fresh whole milk is the most locally-produced product in the dairy sector, and it is the class that brings a higher value to farmers in their blend price.

“The overall despair that I am seeing among dairy farmers, is the feeling they’ve got nowhere to turn legislatively or through their cooperatives for any hope of speaking up on their behalf. Being heard on an issue as simple as whole milk choice in schools — and seeing progress on this issue — would give a lot of dairy farmers hope,” he said.

Speaking for Farm Bureau, Ebert gave details about Pennsylvania’s dairy processing infrastructure, pricing mechanisms and proximity to population. “The bottom line is our dairy industry has relied heavily on fresh milk consumption. While our farm families are accustomed to market forces, and are adapting their small businesses to these changing conditions, an increase in fresh milk consumption would be an immediate boost,” said Ebert. “Our organization believes that giving schools the ability to offer whole and 2% milk could lead to a new generation appreciating the taste and nutritional benefits of milk.”

Better health, more revenue, but where’s Dept. of Agriculture?

Troutman noted that the Pennsylvania Department of Agriculture is “out of touch with dairy.” Several Senators also remarked during the proceedings that the Department was absent from testifying or taking a stand on this issue.

Referring to the Pennsylvania Farm Bill, Troutman said: “$400,000 in grants are given by the Department to modernize dairy farms, but these farmers, technically, could get a termination letter at any time from their processor… They give $400,000 in grants for farm to school education, but dairy is not even mentioned because milk is already in the lunch – but it’s not whole milk that the kids like and need,” he said.

Troutman said further that, “Putting whole milk as a drink choice back in schools would cost the state’s taxpayers a lot less money than other things we do. The benefits of whole milk sales would be huge — better health, more revenue — and we could save our Pennsylvania dairy farms. It’s a win-win.”

Chairman Scavello agreed. “We grew up drinking whole milk, and I think we did okay,” he said.

School nurse gives ‘striking’ data

Speaking of the health aspects, Christine Ebersole RN, BSN, CSN, a school nurse in the Williamsburg School District, with 24 years previously working in a hospital. She also mentioned in her testimony the amount of milk she sees thrown away in the cafeteria.

“In 2008, the Federal Government began prohibiting public schools from serving whole milk to students, presumably to decrease obesity in children. Whole milk has 3.25 % milk fat that’s 97% fat free,” said Ebersole.

She explained that each year school nurses are required to record height and weights on students.

“These are called BMI’s or Body Mass Index which measures body fat based on height and weight. A BMI of 85- 95 % is considered overweight and 95-100% is obese. I thought it would be interesting to compare screenings when whole milk was served in schools with the recent screening where students have been served skim, 1% and 1.5% flavored milk through out their years in school. Our graduating seniors would have been served reduced fat milk during their entire school experience.”

Calling the results “striking,” Ebersole said: “The overweight and obese categories for students in grades 7-12 in 2007-2008 school year was 39% with 60% in the proper BMI scale. In the year 2020-2021, after being served reduced fat milk during school hours, the overweight and obese categories were increased to 52% while the proper range was decreased to 46%. That is a 13% increase over the past 13 years! While one cannot assume that the low fat milk alternatives are the only determining factors, they certainly did not have the intended outcome of reducing obesity in school age children.”

Ebersole suggested that in addition to putting the choice of whole milk back in schools, senators could look at bringing back the afternoon “milk break.”

“The miniscule fat content (in whole milk) is more than offset by the fact that students will actually drink their whole milk instead of sugary drinks with empty calories,” said Ebersole.
On the ‘milk break’ suggestion, she explained that many students need an energy boost in the afternoon.

“This would help with meeting their nutritional needs as well as giving then the energy needed to complete their school work,” she explained. “Many junior and senior high school students participate in after school activities, practices and sporting events. The milk would be a nutrient rich drink, that contains 9 essential nutrients to strengthen their mind and bodies.”

(Author’s note, as a testifier, myself, I pointed out that a continued rise in overweight and diabetes among children and teens was acknowledged by experts and U.S. Senators in 2019 during a U.S. Senate Ag Committee Childhood Nutrition hearing in Washington.)

In-school foodservice insights shared

Krista Byler, food service director for Union City Area School District in northwest Pennsylvania deviated from her written testimony to address questions raised by senators about the challenges facing school foodservice directors in getting whole milk to ‘fit’ in their federally-regulated lunch tray, not to mention extreme fat restrictions for a la carte beverages.

She said education is needed for school foodservice directors to understand the benefits of milkfat and the impact current policies have on children and farms. The other area to look at will be pricing, she said. Right now, milk is not seen as a priority by most foodservice directors when it comes to using tight budgets to get meals on the tray.

“Food service directors have been conditioned to think in the past 10 to 12 years that anything but skim milk and 1% milk has any place in the schools,” said Byler. “A lot of our directors are still behind on the science. They truly believe that the fat is too much for our students. They’re still on the bandwagon that this is going to solve the obesity epidemic.”

Byler is starting to see some movement from her peers seeing the milkfat avoidance as outdated information.

Sebright also highlighted the multi-faceted issues, having spent her early career working with school foodservice directors. “If there is a way that we can help those school foodservice directors balance that tray, balance their budget and still include that fuller fat milk that is so critical to their kids needs, that would be amazing,” she said.

One way to do that is to make milk a standalone component of the school lunch, like it used to be, so it’s not part of the meal calculation, said Byler. She went over the results of her milk choice trial.

School trial is an eye-opener

Senators were impressed by the school milk choice trial, so much so that one key action they discussed was for the state to support schools that want to set up a similar trial in every county. This step would create widespread awareness and gather statewide consumption, waste and student response data at the same time.

Byler said the Union City trial’s actual milk data showed 52% more students chose milk as part of their school lunch, and at the same time, the volume of milk thrown away by students was reduced by 95%.

“The students had no idea we were doing the trial, and they had no idea we were restricted from giving them a choice,” said Byler, noting they were “very vocal” when the trial ended, and the 2% and whole milk options were removed from school coolers.

In post-trial student surveys, 64% reported choosing milk more often. On waste, 60% of students said they had thrown milk away before the trial, but after the trial, only 30% of students said they had thrown milk away.

Over half the students said the trial changed their a la carte beverage purchase habits and another 26% of students said the milk choice may have changed their purchase habits. That’s more than 75% impact.

A whopping 85% of the students said they drink whole milk at home.

Statewide trials would help with the education component identified by Byler in her testimony.

“One of the stumbling points we have is getting the schools on board, getting the foodservice directors on board, getting the management companies to come on board and say ‘yes, this is a win-win. This benefits our students. This benefits our Pennsylvania dairy,’” said Byler.

Federal Guidelines drive the school bus

Eby mentioned the Dietary Guidelines for Americans (DGAs) as the umbrella driving the school bus. The most recent 2020-25 DGA cycle was covered extensively in Farmshine over the past two years, drawing tens of thousands of comments, questioning why scientific studies on dietary fat were left out of the process.

“After the 2015 DGA cycle, Congress asked the Academy of Sciences, Engineering and Medicine to review the process. In 2017, their report cited the need for enhanced transparency and stronger scientific rigor,” said Eby.

Despite protests by experts, the 2020-25 DGA committee again ignored large bodies of scientific literature on the positive role of saturated fats, especially milk fat, in a healthy diet.

“Dairy checkoff promotions that farmers must pay into are affected by these guidelines that the industry heartily applauds when they are released,” said Eby. “Checkoff funding of fat-free and low-fat promotion includes innovations that are now blending low-fat milk with almond beverage and ultrafiltration that allows milk solids to move anywhere and be reconstituted in beverages — Coca Cola-style. Meanwhile, the low-fat milk rules at schools turn children away from milk to other drinks in a beverage market dominated by huge global companies. These drinks do not come close to providing the nutrition of whole milk.”

As important to parents as to dairy farmers

Sebright hit the nail on the head when she said: “I think the issue related to whole milk in schools is as important to parents as it is to dairy farmers because really, it’s all about taste.”

In fact, she said, “whole milk builds lifelong consumers.”

Mentioning research about the benefits of whole milk, Sebright noted that there are “nutrients in whole milk that are not found in skim and non-fat that are important for brain development.”

Her testimony also included the benefits of milk, in general, and how critical it is to make sure the children get that nutrition. Sebright talked about her youngest son, who never liked milk in school. She would pay for the milk, and he would throw it away. He did a 7th grade science project, a chocolate milk taste test.

“He had 27 friends blindly taste the two milks, and all of them chose the whole chocolate milk,” Sebright related. “That’s very telling. A processor would tell you it’s because making a good tasting nonfat chocolate milk is very difficult. The fat in milk adds to the flavor appeal, and when that’s not there, it leaves the cocoa tasting bitter.”

In fact when more fat is removed, more sugar is often added in making chocolate milk to make up for losing the pleasing flavor profile contributed by the fat.

Senator David Argall commented on Sebright’s son’s taste test showing 27 to zero preferred whole over low-fat. “(Businesses) are usually happy with 51-49 or 52-48. But 27 to zero, that’s very strong and really rings out to me,” said Argall.

Speaking for the children

Bringing it back to the kids, Tricia Adams of Hoffman Farms, Potter County testified: “I want to talk to you about the good stuff. The good stuff is a phrase I have heard many times throughout the years from my daughters and countless school children I have had the privilege of seeing on our farm tours,” said Adams, testifying as a dairy producer and school-involved mother of three teenage daughters, making it clear she was speaking for the children.

“The good stuff is what they all refer to as whole milk, which is standardized at 3.25% fat. Every day since 2010, our children have been denied milk choice in school,” said Adams. “Why are we allowing a wholesome natural food product to be attacked and denied and substituting it with more heavily processed drinks?”

As a dairy farmer, she said: “This is personal. I have seen our industry weather many storms over the years. I have seen many farms shut their doors, and I have seen our future generations turning away from milk because of this no fat/low fat push. As a farmer, I want the product I proudly produce every day of my life to be enjoyed and provided in its naturally best version. Whole milk is known as nature’s most perfect food. Why change it, especially for growing kids? Countless generations before consumed whole milk and benefitted.”

She noted that, “Some in the industry say ‘let’s not rock the boat’ because it’s only a couple percentage points. They say, does it really make a difference? Just serve whole milk at home and 1% at school. Turn it the other way, it’s only a couple percentage points, so give them the good stuff.”

Adams cited documents showing the extra percentages of milk fat allow for better digestion, reducing some lactose intolerance issues. The fat slows the lactose (carbohydrate) absorption for a more favorable rate.

She pointed to studies (many cited in pages 6 through 15 of this document) showing how whole milk consumption helps kids maintain a healthy body weight, stressing the value of milk’s many essential vitamins and minerals, some of them being fat-soluble, so the milk fat allows the body to get the benefit.

Vitamin D absorption, in one trial, for example, was triple for kids drinking whole milk vs. low fat and risk of being overweight was reduced by 40%.

“That’s huge today,” said Adams.

Senators get it.

Chairman Scavello (below, left) had set the stage for the hearing, noting in his opening remarks that farming is the Commonwealth’s number one industry and dairy is 37% of Pennsylvania agriculture.

“Pennsylvania has the second largest number of dairy farms in the nation, only second to Wisconsin,” he said. “The industry supports approximately 52,000 jobs and contributes $14.7 billion to the state’s economy. Given these facts, it is essential that we continue to follow and review important decisions that are made that can have an impact on such an important part of our economy, such as the federal prohibition of whole milk in schools.”

Senator David Argall (R-29th, above, right) said this hearing “begins a serious conversation about what the state can do to encourage our federal partners to drop this arbitrary provision. Many of our dairy farmers are really struggling, and part of this… is due to the fact that in 2010, Congress passed legislation putting restrictive regulations on the consumption of whole milk in schools.”

He observed that in the first two years of that action, 1.2 million fewer students drank milk at lunch, “but they still had access to sugary juices and soda, which offer none of the nutritional value that whole milk does. This isn’t just hurting our dairy farmers, it’s teaching a terrible lesson in nutrition to our students.”

Joining the Policy Committee by zoom (above) was Senator Scott Martin (R-31st), representing Lancaster County. He chairs the Pennsylvania Senate Education Committee and noted the timeliness of this public hearing topic.

“From an educational standpoint…as a large consumer of milk when I was growing up, it’s amazing from a policy perspective that we ended up where we are trying to teach our kids good habits to what it is now the selection of things that I would put in the category of not so healthy and not having those benefits. What we are teaching and providing, combined with the devastating impact on our family farms? I truly hope we can make inroads in getting the federal prohibition removed,” said Chairman Martin.

“It’s heartbreaking to see as dairy farmers struggle, they are out there educating the public on the nutritional value (of whole milk). You can even see homemade signs or bales of hay wrapped in plastic, talking about the importance of the nutritional value of whole milk,” Martin observed.

Grassroots response is all volunteer

In his brief testimony, retired agribusinessman Bernie Morrissey talked about the start of that ‘homemade’ grassroots campaign, when Berks County farmer Nelson Troutman painted his first wrapped round bale: Drink Whole Milk 97% Fat Free.

“That was the start of this grassroots dairy committee and it’s been going ever since,” said Morrissey about several of the volunteers testifying on panels during the hearing. “The major point is choice for our children, our grandchildren, our great grandchildren… and this area of milk marketing where our farmers have been mistreated, financially. Even on the news yesterday was about the milk prices going up… but not at the farm. The tank truck backs up to their farm, takes their milk. They are business people, just like I am. The truck backs up, takes the milk out of the bulk tank, and they don’t know what they’re going to be paid for it.”

“People don’t know the facts about milk,” said Troutman as he talked about putting that first round bale in the pasture in frustration after a Pa. Milk Marketing Board meeting, painting over 50 of them to put on other farms and businesses, how other farmers painted their own and even got artists to paint some, and how Morrissey worked with other businesses to get banners and signs printed.

“It’s not just this state,” said Troutman, “it’s all over, and New York is one of the biggest. Then the 97 Milk education effort got going all by volunteers and donations.

Testifying from the 97 Milk education effort and in her work with dairy farmers through R&J Dairy Consulting, not to mention as a mother with young children, Jackie Behr gave a quick summary of the grassroots whole milk education efforts online at 97milk.com and through the social media platforms. She volunteers in that effort.

“Consumers are savvy. They want to learn. I can’t begin to share all of the countless responses we have received from people saying, ‘I’m going to switch to whole milk,’” said Behr. “Since removing the option of whole milk from schools, we have lost a generation of milk drinkers.”

Attached with her testimony were 10 reasons for children to have whole milk.

“Yes, of course I give my kids whole milk,” said Behr. “I have done the taste test with my kids. I gave them skim, 1%, and they all have looked at me and said: ‘what is this?’ My kids taste the difference and I want to know how many other kids taste the difference as well. As a mother, I know if we’re going to give something healthy, they need to like it. Our dairy farms are struggling. I see it every day in my business. Something has got to change or we will keep losing our dairy farms in Pennsylvania.”

A healthy child should be our number one priority

It is really the children who were front and center in this hearing. The testimony of 11 people opened eyes and impressed senators, who confirmed how valuable it was to understand the federal issue in order to begin navigating it at the state level.

“We have a responsibility to help our children be the best they can be and allow them to perform to their highest potential. We should want no kid to be hungry,” Adams testified. “Milk fat allows a body naturally to be satiated, so children can concentrate in school. If a hungry, growing child does not get that feeling, they will turn to sugary snacks or drinks to fill the void. For some kids, the school lunch is the only real meal they get in a day. Some, our daughters included, get two meals at school.”

Whole milk satisfies, she added: “A healthy child should be our number one priority, please let us in Pennsylvania lead by example.”

Some of the members of the Grassroots PA Dairy Advisory Committee testified in person at the state capitol (l-r) Mike Eby, Sherry Bunting, Bernie Morrissey, Jackie Behr, Nelson Troutman, and some testified by zoom, Krista Byler, Tricia Adams and Christine Ebersole

FOOD FIGHT: USDA, Scholastic join billionaire-invested brand-marketing of ‘fakes’ in school meals, curriculum

The cover story of a recent Junior Scholastic Weekly Reader — the social studies magazine for elementary school students — was dated for school distribution May 11, 2021, the same week USDA approved a Child Nutrition Label for Impossible Burger and released its Impossible Kids Rule report. This label approval now allows the fake burger to be served in place of ground beef in school meals and be eligible for taxpayer-funded reimbursement. Meanwhile, Scholastic Weekly Reader and other school ‘curricula’ pave the marketing runway with stories incorrectly deeming cows as water-pigs, land-hogs, and huge greenhouse gas emitters, without giving the context of true environmental science.

Is USDA complicit? Or ring-leader? One Senator objects

By Sherry Bunting

WASHINGTON – It’s appalling. Bad enough that the brand of fake meat that has set a goal to end animal agriculture has been approved for school menus, fake facts (brand marketing) about cows and climate are making their way to school curriculum as well. The new climate-brand edu-marketing, and USDA has joined the show.

“Schools not only play a role in shaping children’s dietary patterns, they play an important role in providing early education about climate change and its root causes,” said Impossible Foods CEO Pat Brown in a May 11 statement after Impossible Meats received the coveted USDA Child Nutrition Label. “We are thrilled to be partnering with K-12 school districts across the country to lower barriers to access our plant-based meat for this change-making generation.”

U.S. Senator Joni Ernst (R-Iowa), who was born and raised on a rural Iowa family farm, has called on U.S. Agriculture Secretary Tom Vilsack to ensure students will continue to have access to healthy meat options at schools. The Senator’s letter to the Secretary asked that USDA keep political statements disincentivizing meat consumption out of our taxpayer-funded school nutrition programs.

Food transformation efforts are ramping up. These are political statements where cows and climate are concerned, not backed by science, but rather marketing campaigns to sell billionaire-invested fake foods designed to replace animals. (World Wildlife Fund, the dairy and beef checkoff sustainability partner, figures into this quite prominently.)

As previously reported in FarmshineImpossible Foods announced on May 11 that it had secured the coveted Child Nutrition Label (CN Label) from the USDA. The food crediting statements provide federal meal guidance to schools across the country. The CN label also makes this imitation meat eligible for national school lunch funding.

“This represents a milestone for entering the K-12 market,” the CEO Brown stated, adding that the use of their fake-burger in schools could translate to “huge environmental savings.” (actually, it’s more accurate to say it will translate to huge cash in billionaire investor pockets.)

Concerned about ‘political statements’ made by USDA and others surrounding the CN label approval — along with past USDA activity on ‘Meatless Mondays’ initiated by Vilsack’s USDA during the Obama-Biden administration —  Sen. Ernst wrote in her letter to now-again current Sec. Vilsack: “School nutrition programs should be exempt from political statements dictating students’ dietary options. Programs like ‘Meatless Monday’ and other efforts to undermine meat as a healthy, safe and environmentally responsible choice hurt our agriculture industry and impact the families, farmers, and ranchers of rural states that feed our nation.”

No public information has been found on how Impossible Foods may or may not have altered its fake-burger for school use. My request for a copy of the Child Nutrition Label from USDA AMS Food Nutrition Services, which granted the label, were met with resistance.

Here is the response to my request from USDA AMS FNS: “This office is responsible for the approval of the CN logo on product packaging. In general, the CN labeling office does not provide copies of product labels. This office usually suggests you contact the manufacturer directly for more information.”

I reached out to Impossible for a copy of the nutrition details for the school product. No response.

It’s obvious the commercial label for Impossible is light years away from meeting three big ‘nutrition’ items regulated by USDA AMS FNS. They are: Saturated Fat, Sodium, and Calories.

As it stands now, the nutrition label at Impossible Foods’ website shows that a 4-oz Impossible Burger contains 8 grams of saturated fat. That’s 3 more grams than an 8-oz cup of Whole Milk, which is forbidden in schools because of its saturated fat content. The Impossible Burger also has more saturated fat than an 85/15 lean/fat 4-oz All Beef Burger (7g).

Sodium of Impossible Burger’s 4-oz patty is 370mg! This compares to an All Beef at 75g and a McDonald’s Quarter-pounder (with condiments) at 210 mg. Whole Milk has 120 mg sodium and is banned from schools.

The Impossible Burger 4-oz. patty also has more calories than an All Beef patty and more calories than an 8 ounce cup of Whole Milk. But there’s the ticket. USDA is hung up on percent of calories from fat. If the meal is predominantly Impossible Burger, then the saturated fat (more grams) become a smaller percent of total calories when the fake burger has way more calories! Clever.

In her letter to Vilsack, Sen. Ernst observes that, “Animal proteins ensure students have a healthy diet that allows them to develop and perform their best in school. Real meat, eggs, and dairy are the best natural sources of high quality, complete protein according to Dr. Ruth MacDonald, chair of the Department of Food Science & Human Nutrition at Iowa State University. Meat, eggs, and dairy provide essential amino acids that are simply not present in plants. They are also natural sources of Vitamin B12, which promotes brain development in children, and zinc, which helps the immune system function properly.”

She’s right. A recent Duke University study goes behind the curtain to show the real nutritional comparisons, the fake stuff is not at all nutritionally equivalent. But USDA will allow our kids to continue to be guinea pigs.

In May, Ernst introduced legislation — called the TASTEE Act — that would prohibit federal agencies from establishing policies that ban serving meat. She’s looking ahead. Sen. Ernst is unfortunately the only sponsor for this under-reported legislation to-date.

Meanwhile, within days of the Impossible CN approval from USDA, school foodservice directors reported being bombarded with messaging from the school nutrition organizations and foodservice companies, especially the big one — Sodexo — urging methods and recipes to reduce their meal-serving carbon footprint by using less beef for environmental reasons, and to begin incorporating the approved Impossible.

The Junior Scholastic Weekly Reader for public school students across the nation — dated May 11, the same day as the USDA CN Label approval for ‘Impossible Burger’ — ran a cover story headlined “This burger could help the planet” followed by these words in smaller type: “Producing beef takes a serious toll on the environment. Could growing meat in a lab be part of the solution?”

The story inside the May 11 scholastic magazine began with the title: “This meat could save the planet” and was illustrated with what looked like a package of ground beef, emblazoned with the words: “Fake Meat.”

Impossible Foods is blunt. They say they are targeting children with school-system science and social studies (marketing disguised as curriculum) — calling the climate knowledge of kids “the missing piece.”

In the company’s “Impossible Kids Rule” report, they identify kids as the target consumer for their products, and how to get them to give up real meat and dairy.

Toward the end of the report is this excerpt:“THE MISSING PIECE: While most kids are aware of climate change, care about the issues, and feel empowered to do something about it, many aren’t fully aware of the key factors contributing to it. In one study, 84% of the surveyed young people agreed they needed more information to prevent climate change. Of the 1,200 kids we surveyed, most are used to eating meat every week—99% of kids eat animal meat at least once a month, and 97% eat meat at least once a week. Without understanding the connection between animal agriculture and climate change, it’s easy to see why there has been so little action historically on their parts. Kids are unlikely to identify animal agriculture as a key climate threat because they often don’t know that it is. Similar to adults, when we asked kids what factors they thought contributed to climate change, raising animals for meat and dairy was at the bottom by nearly 30 points.

After showing the impressionable children Impossible marketing, they saw a big change in those “awareness” percentages and noted that teachers and schools would be the largest influencers to bring “planet and plate” together in the minds of children, concluding the report with these words:

When kids are educated on the connection between plate and planet
and presented with a delicious solution, they’re ready to make a change. And adults might just follow their lead,” the Impossible Kids Rule report said.

USDA is right with them, piloting Impossible Burger at five large schools using the Impossible brand name to replace ground beef with fake meat in spaghetti sauce, tacos and other highlighted meals. This allows brand marketing associated with the name — free advertising to the next generation disguised as “climate friendly” options with marketing messages cleverly disguised as “education.”

In the New York City school system, one of the pilot schools for Impossible, new guidelines are currently being developed to climate-document foods and beverages served in the schools.

Impossible doesn’t have a dairy product yet, but the company says it is working on them.

Impossible’s competitor Beyond Meat is also working on plant-based protein beverages with PepsiCo in the PLANeT Partnership the two companies forged in January 2021. PepsiCo is the largest consumer packaged goods company globally and has its own K-12 Foodservice company distributing “USDA-compliant” beverages, meals and snacks for schools.

How can this brand-marketing in school meals be legal? Dairy farmers pay millions to be in the schools with programs like FUTP60 and are not allowed to “market”. In fact, dairy checkoff leaders recently admitted they have a 12-year “commitment” to USDA to “advance” the low-fat / fat-free Dietary Guidelines in schools, top to bottom, not just the dairy portion.

Pepsico has a long history of meal and beverage brand-linking in schools. Working with Beyond, they will assuredly be next on the Child Nutrition alternative protein label to hit our kids’ USDA-controlled meals.

Like many things that have been evolving incrementally — now kicking into warp speed ahead of the September 2021 United Nations Food System Transformation Summit — the taxpayer-funded school lunch program administrated by USDA is a huge gateway for these companies. Ultimately, will parents and children know what is being consumed or offered? Who will choose? Who will balance the ‘edu-marketing’? Will school boards and foodservice directors eventually even have a choice as huge global companies mix and match proteins and market meal kits that are guaranteed to be USDA-compliant… for climate?

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The long and the short of it

In all, 11 people testified during the Pennsylvania Senate Majority Policy Committee’s public hearing about the federal prohibition of whole milk in schools. I testified (right) in one of three panels, which also included (l-r) Nelson Troutman, Bernie Morrissey and Jackie Behr.
Below is the shorter, oral version of my full written testimony for the June 16, 2021 public hearing.

By Sherry Bunting

Good morning Honorable Chairman Scavello and Senate Committee. Thank you for inviting me to testify on whole milk choice in schools. My name is Sherry Bunting. As an ag journalist 40 years and former Eastern Lancaster County School Board member 8 years, not to mention as a mother and a nana, I see this from many sides.

From the dairy side, fluid milk sales had their steepest decline over the past decade as seen in the chart (above) with my written statement. There was a decline slowly before that, but you can see the drop off after 2010.

That was the year Congress passed the Healthy Hunger-Free Kids Act.

Two years prior, the national dairy checkoff, which farmers must pay into, signed a memorandum of understanding with USDA to advance the department’s Dietary Guidelines using the checkoff’s Fuel Up to Play 60 program in schools — promoting only fat-free and low-fat dairy.

(Note: This was confirmed in a May 2021 dairy checkoff press conference, stating that “DMI has been focusing on the youth audience ever since making its commitment to USDA on school nutrition in 2008,” and that Gen Z is the generation DMI has been working on since the launch of Fuel Up to Play 60, which was followed by the formation of GENYOUth and the signing of the memorandum of understanding, MOU, with USDA Secretary Tom Vilsack in that 2008-10 time period.)

By 2011, USDA had their data showing schools that voluntarily gave up whole and 2% milk were meeting the Department’s Dietary Guidelines more consistently — on paper — as far as fat content across the ‘served’ meals and the ‘a la carte’ offerings, combined.

With this data, USDA targeted whole and 2% milk, specifically, for mandatory removal from school grounds during school hours by 2012.

In fact, the ‘competing foods’ regulatory language at the time stated that even if you wanted to have a vending machine (with whole milk) as a fundraiser for FFA, it could only be open for two weeks for the fundraiser, maybe three. The rest of the time it had to be closed between the hours of midnight before the start of the school day and 30 minutes after the end of the school day.

This is how we are treating whole milk.

That looked good on paper, but the reality? Since 2008, the rate of overweight and diabetes has climbed fastest among teens and children after a decade of stipulations that you can only have whole milk until you’re 2 years old — and in the poorest demographics, who rely the most on school lunch and breakfast. This fact was acknowledged during a U.S. Senate Ag hearing on Childhood Nutrition in 2019, where senators even referenced a letter from 750 retired Generals sounding the alarm that young adults are too overweight to serve.

This is a federal and state issue, and I might add, a national security issue. Our state has an interest in the outcomes.

An example…

While Pennsylvania school doors are closed to whole milk — a fresh product most likely to be sourced from Pennsylvania farms — their doors are wide open to processed drinks profiting large global beverage and foodservice companies.

What the kids buy after throwing away the skimmed milk does not come close, as you’ve heard, to offering the minerals, vitamins and 8 grams of complete protein in a cup of whole milk. What’s on paper is not being realized by growing bodies, brains and immune systems. Not to mention the milkfat satiates and helps with absorption of some of those nutrients. A wise foodservice director who saw this coming told me in the late 1990s, while I was serving on the School Board, he said: “when too much fat is removed from a child’s diet, sugar craving and intake increase.” Some of the latest data show he was right.

School milk sales are 6 to 8% of total U.S. fluid milk sales. However, this represents, as you’ve heard, the loss of a whole generation of milk drinkers in one decade.

The Northeast Council of Farmer Cooperatives looked at school milk sales from 2013 through 2016 and reported that 288 million fewer half pints of milk were sold in schools during that period. This does not include half-pints that students were served but then discarded.

This situation impacts Pennsylvania’s milk market, farm-level milk price, and future viability — a factor in Pennsylvania losing 1,974 farms; 75,000 cows and 1.8 billion in production since 2009 – rippling through other businesses, ag infrastructure, revenue and jobs. We are, actually now, 8th in milk production in the U.S. If you go back 15 years, we were 4th. As of last year, we were passed by Minnesota.

The fat free / low fat push devalues milkfat as a component of the price paid to farms, making it a cheaper ingredient for other products. Our kids can have whole milk. There is no shortage of milk fat because if there was, producers would be paid a fairer price that reflected its value.

While the flaws in the Dietary Guidelines process would take a whole hearing in itself, Pennsylvania consumers see the benefits of milk fat in study after study and are choosing whole milk for their families. Redner’s Warehouse Markets, for example, reported to me their whole milk sales volumes are up 14.5%. Nationally, whole milk sales surpassed all other categories in 2019 for the first time in decades. So parents are choosing whole milk, and we saw that during Covid, and even before Covid.

Today, children receive one or two meals at school, and there’s a bill actually being considered by Congress to make three meals and a snack universal at school. Then what?

Many parents don’t even know that whole milk choice is prohibited. Even the New York State Senate Agriculture Committee, during a listening session on various issues, had a request brought up to legalize whole milk in schools. Three of the senators expressed their shock. One asked the person testifying — who is both a dairy farmer and an attorney — how could this be true? They thought she was joking.

(In fact, skepticism prompted Politifact to investigate. They confirmed, indeed, Lorraine Lewandrowski’s statement — “Make it legal for a New York state student to have a glass of fresh whole milk, a beautiful food from a beautiful land” — received the completely true rating on Politifact’s Truth-O-Meter because, yes, there is a federal prohibition of whole milk in schools.)

There’s just not enough people understanding that this is happening. Many people think the kids do have the choice, but they don’t.

My petition, that I started in late 2019, has nearly 25,000 signatures online. The links are with my written statement — and 5000 were mailed to me by snail-mail — so over 30,000 total. Nearly half of those are from Pennsylvania, and New York would be second as far as signatures, but we have signatures from every state in the nation.

When I looked through to vet it, to balance it and make sure we didn’t have people from other countries in these numbers, I started to see who was signing, from all walks of life — from farmers, to parents, to teachers, doctors, and on and on. Even state lawmakers, I recognized some names on there. The whole milk choice petition has opened eyes.

Thank you for this hearing, and please help bring the choice of whole milk back to our schools. Our children and dairy farmers are counting on us.

If I could just have a couple more seconds here, this is personal for me, as a grandmother. One of my grandchildren is lactose intolerant, or I should say, that’s how it would seem, but she has no trouble drinking whole milk at home. Her doctor says she may be lactose intolerant because she keeps coming home from school and having stomach problems at the end of the day. She now is not drinking the milk at school, just drinking whole milk at home. She can’t drink the skimmed milk, and there’s really some science behind that.

A professor in North Carolina (Richard C. Theuer, Ph.D.) mentioned this role of milk fat actually slowing the rate of carbohydrate absorption — which is the lactose. (As a member of the National Society for Nutrition and Adjunct Professor in the Department of Food, Bioprocessing and Nutrition Sciences at North Carolina State University, Theuer addressed this in at least two public comments on the Dietary Guidelines Federal Register docket, once in 2018 and then again in 2019.)

I’ll end my comment here, sorry I went a little over.

— At the conclusion of my time, Pennsylvania Senate Majority Policy Committee Chairman Mario Scavello said this was a good place for me to end my testimony because “what we’ve heard here today is children are not drinking the skim milk and the low-fat milk. We’ve got to get this corrected, the more I listen to this,” he said. Then, turning to Nelson Troutman on the panel in regard to the 97 Milk education effort, Scavello added: “By the way, I did see that 97 percent bale. Thank you for explaining it because I thought, what is this about? I could see the bales while driving on I-80.”

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From GENYOUth to Gen-Z, dairy checkoff’s strategic integration game revealed

In what was billed as a “National Dairy Month” zoom news conference May 26, Gen Z was the focus as DMI activated its new thing: ‘strategic integration.’ Speaking were clockwise from top left, Scott Wallin, VP Industry Media Relations; Anne Warden, Exec. VP Strategic Integration; Barb O’Brien, DMI President; Jordan Maron (aka Captain Sparklez), popular Minecraft gamer; Nevin Lemos, Gen Z California dairy producer.

Who plays? Who pays? Who wins?

By Sherry Bunting, Farmshine, May 28, 2021

ROSEMONT, Ill. — Strategic integration. Gen Z Gamers. Point of origin for innovation. Dairy-‘based’ positioning. Virtual authenticity. Over a decade of planning.

My head is spinning after a DMI press conference this week on three new “activations” for June Dairy Month in the digital world of video games, including “Beat the Lag,” a gamer-recipe contest and the integration of Fuel Up to Play 60 into the virtual world of video gaming exercise.

Dairy Management Inc. (DMI) has been on a 12- to 13-year path to streamline, dilute, blend and innovate dairy with a focus squarely on Gen Z since 2008 in the schools, now integrating rapidly into the digital spaces where dairy checkoff leaders say Gen Z is changing the world of marketing for companies globally.

According to DMI, Gen Z is not interested in facts like vitamins and minerals. They want to know how foods and beverages will make them feel.

On the other hand, DMI leaders described Gen Z as “very capable of discovering facts,” of “looking deeper” for “authenticity” and “relatability,” that when communicating with Gen Z “you want to be really factual and transparent and tap into the emotions that they care about.”

(The paradox of virtual authenticity is hard to overlook.)

Taking center stage at DMI’s Undeniably Dairy website (usdairy.com) was the Beat the Lag Gen Z gamer competition in which this photo is the recipe contest centerpiece from which DMI will glean pathways to “launch future dairy innovations.” That tiny sprinkle of cheese makes this a dairy-based snack, says DMI in a special National Dairy Month media conference by zoom on May 26. usdairy.com screenshot

Dairy-based or ‘sprinkled’ is the future, some cheese on a pizza or snack. Butter in a cookie, splash of milk in a smoothie, a bit of cream added to a soda, a half ultrafiltered low-fat milk / half almond beverage blend. A little here, a little there. Don’t confuse or interrupt DMI’s ‘strategic integration’ flow by talking about having a glass of whole milk or a piece of cheese. DMI’s website has a few posts lately talking about how blending is the future of dairy — tailor-made for flexitarian messaging in the confusing and not-quite-factual climate-impact comparisons and discussion.

It’s all about innovation of new products, integrating (and diluting) milk as a component of beverages. Looking deeper, it’s really all about increasing margins for processors beyond the farmgate in the ramped up $100 billion dollar global “functional beverage” space, also known as ‘designer beverages.’

Gen Z has been DMI’s target for over a decade as the gateway, the point of origin for how strategic integration innovation will be accomplished with dairy farmer checkoff funds.

Anne Warden, executive vice president of Strategic Integration for DMI spoke in the zoom press conference May 26, explaining how DMI has been “focusing on the youth audience ever since making its commitment to USDA on school nutrition (in 2008).”

In fact, in a May 25, 2021 blog post by Warden, she talks about the future of dairy in schools, that Gen Z wants flashy packaging, unique combinations and sustainable dispensers.

According to Warden, Gen Z is the generation DMI has been working on since the launch of Fuel Up to Play 60, which was followed by the formation of GENYOUth and the signing of the memorandum of understanding (MOU) with USDA under Secretary Tom Vilsack in that 2008-10 time period.

This is the very same time period in which the option of whole milk as a beverage choice was removed from schools, even in the Smart Snacks rules governing ala carte beverage purchases and vending machines – paving the way for strategic integration. Put some milk in that soda, maybe? (That will make sense in a few minutes).

Last fall, Farmshine reported on the “partnering” DMI did with Gen Z ‘gamers’ in the popular Minecraft game, which included three dairy farms hosting three gamers to see how dairies operate. But the partnership that is now moving into integration warp-speed through three June Dairy Month “activations” has been years in the making.

Warden was hired by DMI in May of 2019 to head the strategic integration. Prior to that date, she spent three years at Edelman with DMI’s strategic integration as her primary project for Edelman. Warden’s resume at Linked-In notes DMI as one of Edelman’s largest and most integrated services clients.

This means ‘strategic integration’ — courtesy of all-knowing Edelman — has been underway at DMI for more than 5 years. Have we ever heard of it before now? No, because this is what the ‘precompetitive’ Innovation Center works on, where future strategies are decided upon via DMI’s ‘industry partners’ and quietly implemented with dairy farmer dollars.

Warden laid out the rationale for the three activations aimed at using Gen Z’s “love of video games to capture their attention and show how dairy products fit well within their gaming occasions during the day.”

DMI president Barb O’Brien stressed the point that DMI is looking at gaming as a platform with the objectives of communication and “research.”

“The work that’s coming through now with new product concepts, make this a consumer research method to understand where Gen Z will place their dollars in considering new products,” O’Brien related. “So it’s fantastic. (Gaming) is a channel, an occasion and a communications vehicle. It’s all about contemporizing how we do the work of the checkoff. It is the new advertising. Television is one-way. This is interactive.”

(Authentic, relatable, interactive content is deemed the key to communicating with Gen Z in a virtual digital world of gaming to bring forth new products. Let that paradox sink in.)

One of three activations discussed was “Beat the Lag.”

Lag is a term used to describe the frustration that happens when a video game’s graphics won’t load fast enough so the gamer has to wait (like the frustration of your computer screen freezing). DMI is taking that concept, partnering with Jordan Maron, known as Captain Sparklez to his 11 million followers to address “human lag.”

Over the past six weeks (ending May 29), DMI has been running a gaming recipe conest through Maron, soliciting “dairy-based” snack, beverage and recipe ideas from his followers, what do they eat to ‘Beat the Lag?’

DMI wants Gen Z to bring the ideas. “We don’t want to tell them what to eat (or drink),” said Warden.

During the press conference Maron noted that he got involved when approached by DMI because he “eats a lot of dairy.”

“One of my favorite foods is pizza,” said Maron. “I’m an especially huge fan of drinks that have added milk or cream in them, like sodas with cream added… They’re delicious. I love them.”

(A splash of milk or cream in a soda is something that had a hey-day three generations ago. Apparently, it’s making a comeback.)

Maron talked about doing some focus group work for DMI on “new product innovations” last fall along with a virtual farm tour.

“Me, and a few people who are followers of mine, got together in a call, and DMI shared their ideas for products they want to roll out down the line,” said Maron. “We took it to my focus group of three people and then turned that into Instagram story slides I was able to share out with a wider range of followers, and they were able to give their feedback as to what products would interest them, that they would buy or eat in the future.”

Maron said he hoped that his focus group gave DMI “some good insight.”

The press conference moderator, Scott Wallin of DMI, promptly steered away from the product innovation revelation and brought the conversation back to the farm tours and sustainability, saying DMI hopes to show Gen Z gamers the dairy story through Captain Sparklez and others.

Wallin introduced Gen Z dairy farmer Nevin Lemos of California. The 24-year-old fourth generation dairyman started his own 400-cow Jersey herd on a rented farm near his family’s dairy at the age of 20. Lemos admitted he doesn’t have much time for gaming over the past 10 years as his time and passion are spent working his dairy business.

Lemos observed that Gen Z is a generation able to “look behind the façade, to look deeper.”

Calling Gen Z a “savvy audience,” Warden said they exist almost entirely in the digital world, moving between multiple devices and media platforms daily, with 90% of Gen-Zers gaming.

They are aware of what companies are doing for good – beyond making money — and will turn away from products that “don’t match their values and their desire for authenticity,” said Warden, emphasizing Gen Z’s interest to know what companies are doing for the environment.

“We’re going to make sure farmers they can relate to (like Lemos) are showing up in their social media feeds to tell that story,” she said.

Gen Z gamer Maron talked about what it was like last fall to do the virtual farm tour with Gen Z dairyman Lemos, seeing how cows live and are fed and having one named after him: Sparklez.

The activation of DMI’s “Beat the Lag” is aimed at more than sustainability, said Warden, it is to “help re-position milk and dairy to meet Gen Z’s wellness needs.

“It’s about balance,” she continued. “Gen Z is less interested in the particulars of vitamins and minerals in their food or beverage. They are more interested in what that food is going to do for their bodies, how it is going to make them feel.”

Warden said DMI’s research shows that, “Some of dairy’s biggest opportunities with Gen Z are positioning as a food that will sustain their energy throughout the day or let them feel relaxed and recharged while doing the things that they love.”

“Beat the Lag” is themed around “dairy-based foods and beverages giving gamers an energy boost or a tasty pick-me-up after a long stretch of gaming,” said Warden. “We’re not going to tell them what to eat, we’re letting Jordan Maron (Captain Sparklez) and Rosanna Pansino, a gamer and culinary influencer, get gamers suggesting the ideas in ways they can relate to.”

Maron talked about ‘gamer fuel up’ youtube videos he did with Pansino, one being pizza pockets (with cheese).

“This is a contest, and when the (Beat the Lag) contest is all wrapped up, we’ll look at the recipes submitted,” he said, indicating that the winners will be shown in stages through the Minecraft game and win gaming prizes.

In addition to pizza pockets, other snack recipe ideas at the usdairy.com website under “Game On” and “Beat the Lag” include a bowl of vegetables and avocados, with the tiniest sprinkling of grated cheese. A demonstration is posted there also for making “Pixel Jam Heart” cookies. 

During the videos, Maron and Pansino talk about the contest suggesting smoothies, dips, protein drinks and things made with yogurt as ideas for creative contest submissions.

DMI’s O’Brien said: “This is today’s new form of advertising. It’s an opportunity to set the record straight on the nutritional side (vs. major advertising in all venues by plant-based dairy alternatives.)”

She said this avenue allows for “the exchange of factual information,” but was quick to point out that those nutrition facts “are not what is driving Gen Z’s choices.”

Bottom line? The virtual digital world of Gen Z gamers is, according to DMI president O’Brien, “the forum for putting forward innovation, for putting forward innovative products that are relevant to today’s lifestyle. We will be leading with products that are designed for gamers, by gamers, we know will have a much bigger appreciation beyond just gamers…

“We’ll see those products at retail. We’ll see those products at traditional foodservice. This is the point of origin for that innovation, and the inspiration,” she stated matter-of-factly.

There’s a lot to digest here, pieces of a dairy transformation agenda funded by farmers through checkoff. It’s important to know what checkoff dollars are doing in the integration phase of a 12 to 13 year plan to join the milk-disruptors with dairy-based innovations, now putting Gen Z gamers virtually in charge of how DMI’s products that are ready to roll down the line, come to market.

Meanwhile, a Hartman Group survey recently showed Gen Z prefers fast food and familiar tastes with a much lower attention paid to local, fresh products than prior generations. It’s no wonder. This generation has been worked over by PepsiCo, Domino’s, Sodexo, General Mills, brought into schools by USDA via the MOU marriage of low-fat / high-carb Dietary Guidelines and low-fat / high-carb promotion through Dairy Checkoff’s ‘school wellness foundation’ GENYOUth.

In this game, the obvious questions are: Who plays? Who pays? And who wins? 

After that trip into virtual authenticity, I need a tall cold glass of real whole milk to relax and recharge.

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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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DMI’s NZI DS4G eyes climate policies, supply chain partners in net zero fastlane: but who gets the carbon credits?

Author’s Note: This is part two in a multi-part series about DMI’s Net Zero Initiative and Dairy Scale for Good implementation. Part one previously covered some of the 12- to 13-year history as well as the ‘scale’ approach for getting the industry to net zero faster. 

By Sherry Bunting, Farmshine, April 30, 2021

ROSEMONT, Ill. — The official launch of DMI’s Net Zero Initiative (NZI) in October 2020, and World Wildlife Fund’s (WWF) dairy net zero case study published in January 2021 (and corrected in February for a math error that overestimated the industry’s total CO2 equivalent emissions) are two of the mile-markers in farm visits and partnership development since Caleb Harper was hired by checkoff in May 2020 as executive director of Dairy Scale for Good (DS4G).

In those 11 months, Harper reports visiting 100 dairy farms representing over 500,000 cows in 17 states, processing 350 manure samples, and gathering over 8000 ‘data points.’

Earlier this month, Harper, along with Dr. Mike McCloskey, presented a “value proposition” for the dairy industry during a Balchem real science lecture about ‘net zero carbon emissions implementation on the farm.’

McCloskey of Fair Oaks Farm, Fairlife and Select Milk Producers has chaired the DMI Innovation Center for U.S. Dairy’s Sustainability Initiative since inception 12 to 13 years ago.

In short, DS4G pilots are setting up through “sponsorships” from large dairy-buying partners on large farms within their own supply chains. DMI’s former MOU sustainability partner, the WWF, makes the case in its report that “achieving net zero for large farms is possible with the right practices, incentives and policies within five years (by reducing) emissions in enteric fermentation, manure management, feed production and efficiency, and energy generation and use.”

“This value proposition for dairy cuts two ways,” said Harper. Farms of 2500 cows or more can go toward digesters tied to renewable fuel production, while farms 2500 cows and fewer can move toward a digester model that handles food waste, receives tipping fees and generates electricity.

Both models will depend on a combination of government subsidies, low carbon renewable fuel standards, electrification of the U.S., supply chain sponsorship and sale of resulting carbon-credits, according to information presented by Harper and McCloskey.

NZI aligns with climate policies announced and anticipated from the Biden administration, which mirrors what is coming out of the United Nations’ Food Summit, and World Economic Forum (WEF) Great Reset.

WWF has long been tied closely with WEF setting a global agenda and with the World Resources Institute (WRI) that evaluates science-based targets for companies making net zero commitments to “transform” food and agriculture.

“Innovative models are just now starting to bear fruit,” said Harper, citing McCloskey as a forerunner of “building out” the anaerobic digester concept.

For his part, McCloskey said they “counted on incentives” back in 2008 to be able to grow and “be the catalyst.” He talked about a future sustained by marketing the new products created as substitutes for fossil fuels, mined fertilizers and other products, as well as continuing to take in other carbon sources instead of landfills.

“We have the vision to set this all up, to perfect the technology and get it cheaper… so when we’re all doing the same things, incentives won’t be needed,” said McCloskey looking 10 to 20 years down the road when he sees this “surviving on its own.”

Harper described distributive models from the WWF report. One “being born” in California incorporates separate large scale dairies in a cluster – up to 20 or 30 farms within a 20-mile radius — each with its own digester that can “drop compressed methane into a transmission line to a centralized gas cleaning facility.” In this model, dairies either have a manure or land lease contract or an equity position in the operation.

This model, he said, relies on “societal values of green energy.”

Another distributive model being born in Wisconsin is described as a central digester with adjacent gas cleaning and upgrading. In this model, the manure from multiple farms is sent to the centralized digester by pipe or truck.

“These dairy clusters become ‘green’ clusters,” Harper elaborated. “So, it’s not just about the milk. They become a primary source of green energy inside of a state or nation.”

Food waste co-digestion is part of a different DS4G model driven by states adopting regulatory policy to keep organic material out of landfills. Harper said dairy farms can take advantage of such policies by centralizing waste collection for co-digestion.

“As we think about reducing emissions… a big part of that is bringing things grown off farm on farm, destroying their greenhouse gas potential, and taking credit for that ‘sink,’” Harper explained. 

However, in this example, the co-digestion is what gives the dairy its carbon credits, so technology that can handle higher waste-to-manure ratios and state / local regulations allowing farms to handle the off-farm waste are necessary. Such details were not discussed by Harper, and are presumed to be what large scale dairy pilots address.

The WWF case study showed bottom line profit and loss of $500,000 annually for a 3500-cow dairy. Harper believes this is a “conservative” estimate based on electricity production. With the right policies in place, the renewable natural gas value proposition would produce higher returns, according to Harper.

The renewable natural gas market will still be building over the next five to 10 years, he said, so these models also rely on renewable fuel credits and other fixtures they expect to be part of the Biden administration’s climate policies.

Manure handling technologies apart from the digesters were also discussed, which according to the WWF case study, represent one-third of both emissions-reduction and income potential.

Harper is actively engaged in studying the differing chemical profiles of manure between farms, regions, and states — saying he wants to “understand manure” — with and without digester.

Looking at scale, Harper talked about adapting municipal human waste treatment systems for processing manure on large dairies. He highlighted what is called the “omni processor” — a Bill Gates investment to separate small scale municipal waste and create drinking water using a spindle with multiple discs heated to where nonvolatile solids are in the dry matter and the rest are captured as they volatize.

One “off the shelf technology” Harper is focusing on is already in use to produce discharge quality water. It is the membrane system of ultrafiltration (UF) and reverse osmosis (RO) — the same UF RO technology McCloskey pioneered in milk processing to remove water from milk for transport and refine elements for value-added products.

Stressing the large amount of water in dairy manure, Harper said UF RO “is a process designed exactly for de-watering.” Whether this process occurs before or after the digester, he said it is part of “the technology train, so whatever you are tagging onto is working more efficiently, processing less water and more nutrients and refining more things to find value in.”

All of these technologies, according to Harper, can build on each other and tie together with “electrifying” the United States, strengthening low carbon renewable fuel standards, adopting renewable fertilizer standards, and monetizing carbon. 

One unsettled aspect in this regard, however, appears on page 9 of the WWF case study and was not mentioned by McCloskey or Harper in their presentation. 

What happens to farmers when their carbon reductions and removals become part of the supply chain in which they sell their milk, or are sold to companies as part of a milk contract?

The WWF report makes this observation: “There could be significant interest from large dairy buyers in reducing embedded carbon in their products by purchasing value-added carbon ‘insets’ directly from farmers or cooperatives within their supply chains. Were companies to work closely with the dairy industry to advance these initiatives and enable greater GHG reductions, they could potentially use these measures toward meeting their own reduction targets … and incentivize dairies to embrace net zero practices through long-term contracts or other purchase or offtake agreements.”

That’s an aspect of the tens of millions of dollars in dairy pilot partnerships pledged by Nestle, Starbucks and potentially others for their own supply chains through DMI’s NZI DS4G.

WWF explains further in its report that, “Such agreements could provide stability and collateral as dairies consider investing in technology like anaerobic digesters. Some of these companies might even be interested in finding ways to bundle and purchase carbon credits produced on dairy farms where they buy milk.”

Such incentives, contracts and bundling – starting with DS4G pilots — leave dairy farms exactly where in the supply chain?

The WWF report states it this way: “Such purchases would shift the emissions reductions from the farmer to the company. This would result in the dairy essentially selling the credits that would enable its net zero status, as the emissions reductions cannot be double counted. 

“So, if the reductions are sold, the farmer can no longer be considered net-zero. This is a conundrum that is beyond the scope of this paper,” the WWF report admits.

This important detail in the NZI DS4G implementation was not mentioned by Harper or McCloskey.

Meanwhile, these initiatives also rely on climate policy, with former DMI executive Tom Vilsack now having crossed back over into government as U.S. Ag Secretary just 20 months after seeking pilot farm funding and Net Zero target policies when he testified before the Senate Ag Committee in June of 2019 while employed by checkoff as CEO of the U.S. Dairy Export Council.

President Joe Biden has said USDA is a key department in his administration’s climate action policies.

To be continued

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Empowering dairy farmers: knowledge, tools, ideas shared

By Sherry Bunting, Farmshine, April 2021

GORDONVILLE, Pa. — Empowerment. One word with power in it.

“I got to thinking about introducing this session and thought everyone knows what empowerment means, right? Give power. But then I looked up the opposite of empowerment,” said Kristine Ranger, a consultant in Michigan working with farms and writing and evaluates grants. She traveled to Gordonville, Pennsylvania  with National Dairy Producers Organization board member Joe Arens to the farm of Mike Eby, NDPO chairman, for the ‘Empowering dairy farmers’ barn meeting Friday, April 23, 2021.

What is the opposite of empowerment?

“Here are the words in the dictionary,” said Ranger. “Disallow, forbid, hinder, inhibit, preclude, prevent and prohibit. Have any of you been experiencing any of that as you try to build a livelihood with your dairy farms?”

Good question.

From there, the daylong barn meeting moved headlong into weighty topics, but stayed focus on the positive concept of encouraging producer involvement in seeking accountability and transparency in the systems that govern dairy.

Although the sunshine and spring planting kept in-person attendance low, the event was livestreamed on visual and audio with producers listening in from all over.

Traveling from Michigan to the Lancaster County, Pennsylvania farm of Mike Eby (center) for an ’empowering’ farmers meeting were Joe Arens (left), NDPO board member and Kristine Ranger, a knowledge consultant working with farms. Ranger worked with Eby to secure a grant for the in-person meeting and multi-media production. In addition to serving as NDPO (National Dairy Producers Organization) chairman, Eby is executive director of Organization for Competitive Markets (OCM), represents the south district on the PA Farmers Union board and is a member of the Grassroots PA Dairy Advisory Committee collaborating with 97 Milk education efforts.

A thought that kept surfacing in this reporter’s mind listening to the panel of speakers was this: The longer something goes uninterrupted, the more vulnerable it is to become corrupted.

In fact, it tied in directly with Arens’ personal account following Gary Genske on the program. Arens urged producers to look at annual reports and ask questions. “That’s what NDPO is all about, to support your efforts to get to the cooperative boards of directors about what they should be doing at the co-op level,” said Arens, a member of the NDPO board for two years.

“Members own the milk. Members have the power, but the whole thing has been tipped upside down,” said Arens.

“We need to do something to change this,” said Arens. “Get in front of your board members… They are talking about expanding plants, not talking about producer price. Their one and only responsibility is that price on the milk check settlement statement.”

“If producers do not hold their co-ops accountable, then silence is your consent,” said Genske, a certified public accountant since 1974 based in California with a dairy in New Mexico.

He kicked things off at the barn meeting, presenting details about the roles and responsibilities of cooperatives, boards and members. He shared his insights into improving dairy farm milk prices.

Genske is a longtime member of the NDPO board. He highlighted the marketing concepts of 100% USA seal for milk and dairy products, returning to the true standards for fat and components in beverage milk that are still used today in California, and moving toward aligning milk production with profitable demand.

Gary Genske was the kickoff panelist, presenting virtually from his office in California.

The Genske Mulder firm does the financial statements for 2500 dairy farms each year and 10,000 farm tax returns annually. He sees the numbers and knows the deal.

Walking attendees through the various aspects of USDA regulation and the Capper Volstead Act, Genske gave producers the tools and encouragement to accept their responsibilities as cooperative members.

In October, he had a successful lawsuit in Kansas City. After requesting documents from the cooperative in which he is a member, and being denied or provided documents that were mostly redacted, he took the issue to court.

After a two-day hearing, the judge ruled in Genske’s favor on his request for documents, as a cooperative member, with a stated purpose.  

In short, Genske said, “We have to put people in the position of taking care of the members… We want to cull cows not dairy farmers.”

Bernie Morrissey, chairman of the Grassroots PA Dairy Advisory Committee talked after lunch about the 97 Milk effort when farmers empowered themselves to market whole milk, since no one else was; and all kinds of prohibiting, hindering, forbidding, preventing and precluding had been going on regarding whole milk availability and promotion.

“This is it,” said Bernie Morrissey. “The dairy farmers made me successful, so this is me giving back.” He talked about the whole milk education effort and the push to legalize whole milk choice in schools. If ever there was an example of the opposite of ’empower’, it would be the treatment of whole milk by industry and government, especially since 2008. The steep decline in fluid milk sales from 2010-2018 is starting to stabilize as consumers and policymakers are getting the message. Each step is hard work.

“It started with Nelson Troutman who painted the first round bale, just like that sign: Drink Whole Milk 97% Fat Free,” said Morrissey pointing to the large banners and holding up the Drink Whole Milk School Lunch Choice Citizens for Immune Boosting Nutrition yard signs.

With a joint effort underway now for a little over two years – working to educate lawmakers and consumers about whole milk, and pushing efforts to legalize whole milk choice in schools — Morrissey said “It’s working. Things are happening.”

With the FMMO map on the screen behind him, Dick Bylsma of NFO talked about the history, purpose and hot FMMO topics of the day. He said the most empowering tool a dairy producer can have is the right to vote on milk order changes, instead of being bloc-voted by the cooperative.

Dick Bylsma of National Farmers Organization (NFO) traveled from Indiana to brief producers on joint efforts between NFO, Farmers Union and Farm Bureau to empower dairy farmers by getting their individual votes back in Federal Order hearings. He traced the history of Federal Milk Marketing Orders, and the genesis of bloc voting at a time in history when there were hundreds of thousands of farmers and communication was slow.

“It’s time to end bloc voting,” said Bylsma, and he laid out some of the efforts underway around that proposition, also highlighting the purpose of the Federal Orders.

These are just some fast highlights from a day of deep learning. More from these speakers and additional speakers on co-op involvement, systems accountability, checkoff reforms and referendums, and other empowering topics — including more from Genske about ending the silence and exercising rights and responsibilities with communication tools that work for cooperative members — will be published in a future edition.

Similar in-person meetings recently encouraged producers in Michigan and northern Indiana, said Ranger.

For dairy producers who are interested in knowing more, want to get involved, but aren’t sure how, NDPO chairman Mike Eby suggests joining in on the NDPO weekly national Tuesday night call at 8:00 p.m. eastern time at 712-775-7035 Pin 330090#. Every dairy producer in America has a standing invitation.

To hear past calls and learn more, click here

To view a video or listen to a recording of the empowerment meeting, click here

Look for more in a future edition of Farmshine.

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From DMI to NZI to DS4G: Harper, McCloskey explain how scale will drive dairy to net zero

Author’s Note: This is part one in a multi-part series about DMI’s Dairy Scale for Good piece of the Innovation Center for U.S. Dairy’s Net Zero Initiative.

By Sherry Bunting, updated from publication in Farmshine, April 23, 2021

ROSEMONT, Ill. — “Looking at the past 50 years of impressive achievement, everything ladders up to milk efficiency. It’s less land. It’s less manure. It’s less water and less carbon, but it’s all about that milk,” said Caleb Harper, executive director of the Dairy Scale for Good (DS4G) piece of the DMI Innovation Center for U.S. Dairy’s Net-Zero Initiative (NZI).

“For the next 50 years, what if it was all about everything other than the milk. As we continue to advance toward yield of milk… you’ll start to see a rise in the importance of everything else,” said Harper, posing a “value proposition” for the dairy industry.

Harper, along with Dr. Mike McCloskey, of Fair Oaks Farm, Fairlife and Select Milk Producers, talked about NZI and DS4G in an online Balchem ‘real science lecture series’ earlier this month. McCloskey is an officer on the board of National Milk Producers Federation and has chaired the DMI Innovation Center’s Sustainability Initiative since inception.

The future being created, according to Harper and McCloskey, is one of dairy being recognized as an “irreplaceable ecosystem asset — an environmental solution — inside a comprehensive management plan for emissions reduction inside of animal ag livestock.”

Citing the Nestle and Starbucks sponsorships and others coming on near term, Harper said the pilot projects associated with each company will be located in separate supply chains. The sponsorships are being made, he said, because these companies have made big commitments to reducing carbon.

“As checkoff, one of our limitations is the ability to do on-farm work, especially around technology acquisition or measurement, so we need these third-party dollars to come in and be the catalyst to get living laboratories set up,” Harper explained.

Before Harper’s presentation about how the Net Zero Initiative builds-out the ‘everything else’ pieces, McCloskey gave historical context about the birth of the Innovation Center for U.S. Dairy in 2007.

“The trajectory (since 1940) is just phenomenal when you lay out the statistics,” said McCloskey. “We came together – National Milk, DMI, USDEC – and had a great meeting of the minds (in 2007). We said this natural sustainability progress will continue, but we need to accelerate it and be catalytic in how we can become the organization to drive this at a faster speed to net-zero.”

According to McCloskey, 80% of the nation’s milk is represented at this NZI table, and the dairy industry is the one to “really come out of the gate on this.”

The whole value chain from distributors to processors to retailers and companies that create packaging (are represented), so we have a really good understanding of the entire value chain and can focus on how to eliminate carbon footprint to bring it to net-zero,” he said.

The baseline life-cycle assessments (LCA) were the first steps 10 to 13 years ago to figure out “exactly where” the carbon was coming from, and the April lecture discussion focused field to farm, noting that the processors have a separate working group looking post-farm through consumption.

McCloskey said the LCA categorized carbon in 4 areas:

1) Farming (feed production) practices
2) Manure management
3) Enteric emissions from cows
4) Energy intensity of the operation (including renewables)

“Once we knew where the carbon was coming from, we started initiatives to find processes and technologies to innovate and accelerate the process to net-zero even faster,” said McCloskey, explaining the heavy participation from companies serving on committees and through initiatives these past 13 years.

Then, a year and a half ago, “we committed to the term net-zero,” he said. “That was a big jump.”

This bit of history set the stage for Harper to talk about the part of the Net Zero Initiative he heads up: Dairy Scale for Good (DS4G).

Harper was hired by DMI last May for the DS4G position just weeks after exiting M.I.T.’s Media Lab April 30th, after his OpenAg Initiative there came under scrutiny and was quietly closed.

“Caleb is looking at the four areas and how we can take technologies and processes and innovate them into DS4G,” said McCloskey.

Harper noted that dairy and agriculture are not operating in a vacuum. He said the first “bold commitments” to net-zero time frames between now and 2050 were made by big tech companies like Facebook, Amazon, Google, followed by food brands, companies across the food value chain, and then the agricultural input sector.

Throughout his presentation, Harper referenced the Biden administration policies the work hinges on, using much of the same coordinated language that surfaces via the World Economic Forum Great Reset and United Nations Food Systems Summit and what is called “The Fourth Industrial Revolution” in which technology is already rapidly accelerating.

“We’re seeing a shift in philosophy and it’s being driven by all of these commitments,” said Harper, insisting that, “It’s being driven, of course, by consumers.”

He showed pre-Covid poll statistics from the Hartman group. One in particular noted that 88% of consumers surveyed “would like brands to help them be more environmentally friendly and ethical in their daily lives.”

“Dairy has made the commitment to being an environmental solution,” said Harper, which means becoming carbon neutral or better, optimizing water use while maximizing recycling, and improving water quality by optimizing utilization of manure and nutrients.

Three working groups or initiatives were formed within the field-to-farm Net Zero Initiative: 1) Research, analysis and modeling; 2) Viability study, which is DS4G headed by Harper; and 3) Adoption for collective impact.

The Adoption piece will distill and disseminate across the industry what is learned through research, modeling and Harper’s DS4G work.

It is all about driving consumer choices under this net-zero mantra. Industry consolidation also figures into this equation to “scale the process and drive out the risk,” said Harper.

Many of the numbers in Harper’s presentation were taken directly from the World Wildlife Fund (WWF) white paper An Environmental and Economic Path Toward Net Zero Dairy Farm Emission.”

Harper cited environmental pressure and animal activism pressure on the U.S. dairy industry. He said: “This program (Dairy Net-Zero) is being supported by the World Wildlife Fund and others in the environmental space as a path towards a solution on all of these issues.”

Insisting that the Net Zero Initiative and DS4G operate with a “counter-balance” of environment and economics, the examples discussed by Harper included estimates for what producers may expect as returns for various environmental products and services.

Illustrating carbon footprint for a gallon of milk across all sectors from field to consumer, Harper and WWF maintain that the field-to-farm portion represents the largest potential (70%) for reducing CO2 equivalent emissions more than retail, consumption, processing and distribution combined. Harper said he sees this as work and opportunity. McCloskey had noted earlier that the processors have their own working group looking at emissions from farm to consumption.

The WWF white paper lays out the “business case” for the Net Zero Initiative, based on a 3500 cow dairy (a Fair Oaks site with 3000 milking and 500 dry). In fact, Harper’s DS4G work will exclusively pilot and model on dairies of this size.

“This is to make maximum impact on the supply of milk in the short-term,” he said. “If we look at the kind of consolidation going on in the industry, the herd sizes above 1000 cows are a small percentage of the total herd; however, (they account for) 55% of the milk production.”

Harper explained the DS4G concept this way:

“The idea is to use scale to address these (net-zero) issues so we can drive down the risk of adoption, the risk of market-building, the risk of technology… to bring that down to a level and spread it across the industry, across the milk.”

Walking through the technologies and processes that the checkoff-funded DS4G is “thinking about,” Harper indicated that this is “evolving”, and all revenue potential figures are “approximate”.

He mentioned a billion dollars of investment in digesters over the last few years from private equity funds, pension funds, and venture investors, with digesters representing — “rule of thumb” — one-third of the revenue potential of net-zero going forward. The new market opportunities driving that revenue potential, he said, are natural gas prices and the increasing value of the low-carbon renewable fuel credit price. The combination is what is attracting investors, according to Harper.

Harper said he has visited 100 dairy farms in 17 states in his first 11 months as the dairy-checkoff employee heading up DS4G. Of the dairies he has visited with more than 2500 cows, he said not one did not either have a digester or was breaking ground for a digester or in the process of planning a partnership around one.

He also talked about feed additives to address enteric emissions, cropping practices, and manure management technology, including ultrafiltration of manure as part of a “technology train” for the future. To be continued

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(Author’s Notes: The WWF Markets Institute released its dairy white paper Jan. 27, 2021. A mid-February Farmshine report revealed the WWF mathematical error that had inflated the magnitude of CO2 equivalent pounds contributed by all U.S. milk production. WWF on Feb. 25, 2021, corrected this baseline to show the much smaller collective impact of 268 billion pounds CO2 equivalent (not 2.3 trillion pounds). Both Harper and McCloskey serve on the WWF Market Institute’s Thought Leadership Group. Harper also served as a board member of New Harvest 2017-19, a global nonprofit building the field of cellular agriculture, funding startups to make milk, meat and eggs without animals. DMI confirms that dairy checkoff had an MOU with WWF from the inception of the Innovation Center for U.S. Dairy around 2008 through 2019. McCloskey has chaired the Innovation Center’s Sustainability Initiative since 2008. In 2008-09, two MOU’s were signed between DMI and USDA via former U.S. Ag Secretary Tom Vilsack — the Sustainability Initiative and GENYOUth. At the end of the Obama administration, Vilsack was hired by DMI dairy checkoff to serve as president and CEO of USDEC 2016-2021, and earlier this year he became Secretary of Agriculture again after President Joe Biden said Vilsack ‘practically wrote his rural platform and now he can implement it.” McCloskey and Harper also have another connection. According to the Sept. 2019 Chronicles of Higher Education, Caleb Harper’s father, Steve Harper, was a grocery executive. He was senior vice-president of marketing and fresh product development, procurement and merchandising from 1993 to 2010 for the H-E-B supermarket chain based in Texas. According to a 2020 presentation by Sue McCloskey, H-E-B was their first partner in the fluid milk business in the 1990s, followed by Kroger. According to the Houston Chronicle, the McCloskeys also partnered with H-E-B in 1996 to produce Mootopia ultrafiltered milk, an H-E-B brand. This was the pre-cursor to fairlife, the ultrafiltered milk beverage line in which DMI invested checkoff funds through the Innovation Center for U.S. Dairy partnering with the McCloskeys, Select, and Coca Cola.)

Market Moos – Apr. 7, 2021

By Sherry Bunting, republished from Farmshine, April 9, 2021

Class III futures gain big,
Cl. IV modest, spread widens

CME Class III and IV milk futures made a strong turnaround last week and continued to rally higher this week — especially on the Class III where $19s returned to the board for May through August and new contract highs were set all the way across the board.

The big gains on Class III vs. smaller gains on Class IV widened the Class III / IV spread that is currently averaged to determine the Class I base price, which affects PPDs and de-pooling.

The spread between the 12-month averages expanded to $1.75 over the next 12 months, with May through September contracts showing the potential for a $2 to $4 spread between Class III and IV.

On Wed., April 7, Class III milk futures for the next 12 months averaged $18.43 — up 32 cents from last week and almost $1.00 higher than two weeks ago. (Additional gains were made through Fri., Apr. 9.)

Class IV milk futures for the next 12 months, on the other hand, averaged $16.68 on Wednesday — up just 8 cents from last week and 75 cents higher than two weeks ago

CME cheese, powder higher,
whey firm, butter melts off early gain

On the spot dairy product markets via the CME this week, cheese had big gains, powder put on a penny, whey stayed firm at last week’s higher levels, and butter advanced early before erasing the advance at midweek to be a fraction of a penny lower than a week ago.

By Wed., April 7, the 40-lb block cheddar price was pegged at $1.80/lb, up 6 cents from a week ago with 4 loads trading; 500-lb barrel cheddar was at $1.58/lb, up a full dime from a week ago with 3 loads changing hands.

Dry whey on the CME spot market remained firm at last week’s advance, pegged at 66 cents/lb again Wed., Apr. 7 with zero loads changing hands.

Butter gained its way to $1.83 by Tuesday before losing almost 2 pennies Wed., April 7 when 9 loads traded, and the CME spot price was pegged at $1.8150/lb — a fraction of a penny lower than the previous Wednesday’s spot butter price.

Nonfat dry milk gained a penny this week. On Wed., April 7, the spot price for Grade A NFDM was pegged at $1.1925/lb with 2 loads changing hands.

March protein question answered

Last week in this column, the March Class and Component prices announced by USDA last Wed., March 31 were reported, and the protein price at $2.6954/lb — down about 30 cents from February — seemed to be a “head-scratcher” given the fact that all end-product prices were higher, and the Class III, IV and II prices also ended up higher.

Reaching out to USDA questioning whether this was correct or a typo, here’s how a USDA source explained the interaction of the fat and skim as a sort of ‘snubber’ or offset for protein vs. fat when butter gains are larger than cheese gains in value in the wholesale market as reflected by by end-product pricing, with fat and skim yields applied. (There’s a story to this phenomena, stay tuned for another edition explaining the how and why this ‘snubber’ came to be.)

Meanwhile, USDA referred me to this formula for the protein price calculation on page 5 of the monthly Class and Components announcement:

Protein Price = ((Cheese Price – 0.2003) x 1.383) + ((((Cheese Price – 0.2003) x 1.572) – Butterfat Price x 0.9) x 1.17).

The USDA source explained in an email as follows:

“The protein price is a function of both the cheese price and the butter price. If you look at page 5 of the report ‘Announcement of Class and Component Prices’ for March 31, 2021, you will find the formula for the protein price. In that formula, you will note the use of both the cheese price, which is the weighted average of both block and barrels, and the butter price. Please note that the use of the butter price has a negative sign, i.e. as the butter price goes up everything else held the same, the protein price goes down. So, while both the cheese price and butter price went up; the increase in the butter price for March compared with the February price was much larger than the (increase for the) cheese price, so the protein price declined.”

The USDA explanation continues:

“The Class III skim milk price is down in March about 60 cents per cwt ($0.0060 per pound) when compared with February, i.e. using the lower protein price of about 30 cents per pound times 3.1 pounds plus a small increase of about 5 cents in the in the other solids price times 5.9 pounds results in the decline of about 60 cents per cwt ($0.0060) for the Class III skim milk price. The Class IV skim milk price in March is about unchanged, up 1 cent per cwt ($0.0001 per pound) as the nonfat dry milk price was up only $0.0005 per pound.

“Both the Class III and Class IV prices are equal to 96.5 pounds of skim milk times the skim milk price for each class plus 3.5 pounds of butter times the same butterfat price. So, with the Class III skim down 60 cents per cwt ($0.0060 per pound) but the butterfat price up $0.28 per pound. The Class III and Class IV prices both increase. The gain in Class IV was $0.99 per cwt while the Class III price was up 40 cents per cwt.”

USDA reports Feb. All Milk price at $17.10, DMC margin $6.22

February’s All Milk price was announced last week at $17.10 and based on an national average butterfat of 4.10%. This was 40 cents lower than the January All Milk price at the same time that feed costs went higher.

The combined result was a Dairy Margin Coverage (DMC) margin for February announced this week at $6.22/cwt, the lowest since April and May 2020 when at the height of the Coronavirus pandemic shut down, the DMC margin was calculated at $6.03 and $5.37, respectively.

Letter signed by producers, groups, seeking remedy for failed Cl. I formula makes its way to NMPF / IDFA

On Federal Milk Market Order pricing — namely the failed change in how the base Class I price is formulated — National Milk Producers Federation (NMPF) and International Dairy Foods Association (IDFA) are at the table, according to U.S. House Ag Committee Ranking Member G.T. Thompson.

Sources indicate they are discussing various proposals and approaches. Meanwhile grassroots organizations representing dairy producers are continuing their almost weekly group conference calls and seeking a seat at that table.

Farmshine readers are aware that dairy producers from across the U.S., along with many state dairy associations and the American Dairy Coalition, came together in early March to compose a letter to NMPF and IDFA, addressing the impact of massive depooling in relation to large negative PPDs for dairy farmers across the U.S.

The letter specifically identifies the change in how the Class I base price is calculated, which NMPF and IDFA put forward, Congress passed in the 2018 Farm Bill, and USDA implemented in May 2019. The letter, signed by hundreds of producers and many producer organizations, will be officially sent to NMPF and IDFA by the end of this week (April 9), according to the ADC.

Specifically, the Farm Bill language states that the Class III / IV averaging method + 74 cents – instead of the previous “higher of” method – was to be implemented in 2-year periods. This suggests we are now at the point in time where something can be done to adjust this formula before the next 2-year period of implementation begins.

Meanwhile, dairy economists are being featured in webinars, zoom conferences and other venues to explain and ‘educate’ producers on PPDs, what impacts them, and how other aspects of Federal Milk Marketing Order pricing formulas, rules and provisions all work. All of it has become a hot topic since the new Class I formula implemented May 2019 leaves in its wake over $700 million in NET losses on Class I value, alone over 23 months, and upwards of $3 billion when negative PPDs and depooling are factored in.

While the change assisted in the idea of risk management for milk buyers, it has introduced significant and costly basis risk for milk producers, interfering with producer risk management tools, and has led to staggering net value losses by most dairy producers over 23 months since implementation, also undermining the purpose of the FMMOs with regard to the orderly marketing to assure milk moves to Class I fluid milk use.

Education is good. Solutions are better. Remember, the selling point to Congress for making the Class I formula change from ‘higher of’ to average + 74 cents in the 2018 Farm Bill was that dairy producers would be “held harmless”… Instead, they are being robbed. Stay tuned.

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