Rep. G.T. Thompson: Whole Milk and Dairy Pride bills ‘more urgent than ever’

Posted on March 9, 2023 by Agmoos

By Sherry Bunting, Farmshine, March 3, 2023

WASHINGTON — Pennsylvania has dairy champions in Congress. Not only has Rep. Glenn ‘G.T.’ Thompson (R-15th) introduced the Whole Milk for Healthy Kids Act, and made it better, Rep. John Joyce (R-13th) is getting ready to launch the House version of the Dairy Pride Act to uphold real milk’s standard of identity.

It’s “more urgent than ever” that Congress act on these bills, in light of recent USDA and FDA proposed rules, said Thompson in a Farmshine phone interview as Congress returned to session Monday (Feb. 27).

The bipartisan 2023 Whole Milk for Healthy Kids Act, H.R. 1147, has been introduced for just over one week, and already the number of congressional cosponsors grows daily at 43 to-date, including prime sponsor Rep. Thompson, a Republican from Pennsylvania and prime cosponsor Rep. Kim Schrier, a Democrat and pediatrician from Washington state.

The other 41 cosponsors so far represent both sides of the aisle from 22 states.

“I’m very honored to reintroduce this whole milk legislation. We made some real progress in the 117^th Congress with not quite 100 cosponsors and broad bipartisan support. That’s what it takes to get things done,” said Thompson. “But we had headwinds with the Republicans not having the majority and the Democratic party owning the demonization of milkfat and the removal of whole milk and flavor from the school system.”

What will be different this time?

Thompson explained it’s a new Congress and he has the support of the new Education and Workforce Committee chair Virginia Foxx, a Republican from North Carolina.

“She is very excited about this bill and has had me speaking on it at a number of events over the past year,” said Thompson.

In addition to being chairman of the House Agriculture Committee, Thompson is also a senior member of the Education and Workforce Committee through which the Whole Milk bill must pass first.

Thompson believes it will be put on the House agenda, and he is optimistic that it will get passed off the House floor.

He is also looking for a sponsor for companion legislation in the Senate.

He said he appreciated former Senator Pat Toomey of Pennsylvania who had previously introduced a version of the bill.

“With Senator Toomey’s retirement from the Senate, we now have to find someone to take the lead in the Senate,” he said.

The fact that the number of cosponsors has grown quickly for the House bill, within the first few days, is a good sign.

This response so far has happened without Thompson “working the floor” yet.

This “speaks to the significant need that this legislation addresses,” he said.

“This bill is about providing the best nutrition for children and addressing the economic impact on rural America,” he explained. “When the Democrats did what they did in 2010 with the nutrition standards, it was a crushing blow to dairy farmers. Dairy is the number one ag commodity in my home state of Pennsylvania, and agriculture is the number one industry. This is the case not just in Pennsylvania.

“This topic comes up everywhere I go and in every state,” he added. “Part of the reason is the awareness as many people and organizations, and quite frankly the 97 Milk grassroots effort, has impacted nationally and internationally by speaking to this need.”

Thompson improved the bill with what he calls a “common sense addition.”

He acknowledged former Senator Toomey for articulating language that would allow whole and 2% milk to fit within the meal calculation for saturated fat since the milk has been included in the meal calculation since 2010.

This way, not only does the Whole Milk for Healthy Kids Act proclaim the permission for whole and 2% unflavored and flavored milk options in school meals, it expands the saturated fat limit to accommodate these options so school foodservice directors are empowered to actually offer them.

“Milk is the only beverage that is regulated within the meal. Meanwhile, students may have access to non-nutritious beverages with high fructose corn syrup and caffeine that are not regulated, so we’re making sure we do not have a situation where the milkfat counts against the meal,” said Thompson.

“Whole milk is only 3 to 3.5% fat compared to the low-fat milk being 1%. That means whole milk is 96.5 to 97% fat free. That extra milkfat is a positive thing in the lives of those young people,” Thompson declared, with a nod to the mountain of scientific evidence.

As the White House is moving rapidly in its proclaimed “whole of government approach” to implement the Biden-Harris Hunger, Nutrition and Health National Strategy, a flurry of bureaucratic actions could further affect milk access for children via USDA and FDA.

USDA just published proposed school nutrition rules, with comment period ending April 10, 2023, which could remove access to flavored milk in elementary and potentially middle schools, while further etching in concrete the fat-free and 1% sole options.

FDA’s healthy labeling proposed rule also presents obstacles for whole milk, and that comment period recently ended.

Plus, FDA last week issued draft guidance allowing imitation non-dairy beverages to be labeled as ‘milk’ with only a ‘voluntary’ recommendation that companies describe shortfalls in key nutrients. That public comment period ends April 24, 2023 (see related article in this week’s Farmshine).

Will the Whole Milk for Healthy Kids Act force revisions of any of these proposed rules?

Rep. Thompson was outspoken on this question.

“I don’t believe they have the authority to do what they are doing now,” he stated.

“These moves are an outgrowth of the White House summit that they weren’t serious about. They failed to invite Republicans, including the Ranking Member of the Ag Committee until 48 hours before the conference. They didn’t want our input. It is more political science than science, and it is really frustrating,” he related.

“It is the Congress that determines nutritional standards, not the bureacrats. While the Whole Milk for Healthy Kids bill is mostly in the Education and Workforce Committee, I will do all I can in the Ag Committee to make sure science, not political science, is foremost.

“Science shows whole milk and whole milk with flavor added, are the most nutritious beverage available,” said Thompson.

On the FDA draft guidance for labeling fake-milk alternatives as ‘milk’, Thompson was even more blunt.

“The Dairy Pride Act is being reintroduced by Rep. John Joyce (R-PA). This bill is more important than ever given the insane draft guidance of the Biden-FDA. It is urgent to pass this one also,” said Thompson, confirming later that the Dairy Pride Act, which was introduced in the Senate this week will also be introduced in the House shortly by Rep. Joyce, along with a bipartisan cosponsor.

Thompson lamented the bombardment of parents and kids with marketing for alternative fake-milk beverages that are proliferating rapidly.

“I have a lot of friends among almond growers and soybean growers, and I like almonds, but this is about truth in advertising. The word ‘milk’ communicates a certain level of nutrition, and FDA has even acknowledged this. If FDA is going to mislead people by allowing the labeling of something as milk that is not milk, then they should be required to truly define the differences,” he said, adding that he’s not surprised.

“This administration can’t define what a woman is, and now it can’t define what milk is,” Thompson declared.

Stay tuned to Farmshine for updates!

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Covington gives 2023 outlook at GA Dairy Conference; sees blend price pressure coming more from demand side, especially in Southeast

Posted on February 10, 2023 by Agmoos

By Sherry Bunting, Farmshine, February 10, 2023

SAVANNAH, Ga. — In a much anticipated market outlook with its full complement of charts and graphs, retired milk co-op executive Calvin Covington told the crowd of 500 attending the mid-January Georgia Dairy Conference in Savannah that 2022’s record-high blend prices outpaced his earlier projections, and he sees the pressure in 2023 coming more from the demand side than the supply side.

At levels more than $7 per hundredweight higher than 2021, Covington calculated the 2022 Federal Order blend price averages at $26.42, $28.42 and $26.87 for Orders 5, 6, and 7, respectively.

The higher national butterfat price — up almost $1.50 per pound from 2021 — accounted for more than 40% of southeastern fat-skim blend prices and was a big factor in record milk prices for farmers in multiple component pricing FMMOs, nationwide, in 2022.

Covington projected the Federal Order blend prices to average $22.84, $24.83 and $23.07 for Orders 5, 6 and 7, respectively, in 2023.

If the more than $3.50/cwt. decline is realized this year, and prices don’t go below these projections, “2023 could still have the third highest blend prices on record,” he said.

He cautioned that his projections are FO blend prices, not farm mailbox milk prices and said relatively small changes can make a big impact on these prices.

Covington stressed the high cost to balance the fluid milk markets affects how the blend prices translate to mailbox milk checks in the Southeast.

“This high cost to balance Class I is something we have to keep educating the rest of the country about,” he said. (In fact this is one reason a public hearing is set to begin Feb. 28 for the Appalachian, Florida and Southeast Federal Orders to consider proposals to amend inter-market transportation credits in Orders 5 and 7 and adopt plant delivery credits, otherwise known as intra-market transportation credits, in Orders 5, 6 and 7.)

Nationwide, Covington expects milk production growth in 2023 to be constrained by several factors including interest rates, operating margins and available replacements.

On the demand side, however, he said domestic and export sales on a total solids basis — while up year-over-year – are showing softer growth.

Looking ahead, he said the dry whey price is something he watches because it is the dairy commodity with the most worldwide impact. He sees it as a bellwether for milk prices going up or down. (Dry whey prices had come under pressure in December and January, but showed strength in spot sales on the CME into the beginning of February.)

Over the longer term, Covington looks at total milk production, number of cows as well as demand in terms of sales and product inventories on a quarterly basis to take the month-to-month variation out of the equation.

“In 2022, we had three quarters of lower milk production that helped bring up prices. Why? Cow numbers. We had a lot of cows in the first half of 2021, and those numbers began to get depleted into 2022.

“Now we are starting to get a little more milk from dairy farmers adding a few more cows,” he said.

On the demand side, Covington looks at domestic and export demand separately by tracking commercial disappearance, trade, and inventories. He reported domestic dairy product demand was up 0.5% in 2022 on a total solids basis vs. prior year, compared to a 5-year average annual growth of 1.5%.

“Domestic demand has slowed down,” he said.

On the export side, it was a record year; however, export sales on a total solids basis were up 3.5% year-to-date through October, compared with a 5-year average annual growth of over 6%, according to Covington.

Combining these figures for the first 10 months of 2022, he said total demand was up 1% from prior year, compared to a 5-year average increase of 1.8% on a total solids basis. Covington said this could change slightly when November and December figures are included.

Bottomline, he sees dairy demand is growing, but this growth is slower than the average annual growth over the past five years.

Higher prices and overall inflation are affecting butter sales as reflected in commercial disappearance comparisons and anecdotal evidence shared by Covington. Using a chart of commercial disappearance comparisons, he said American cheese demand appears to be declining, while other cheese categories are showing demand growth. Dry skim milk powder represents 72% of all exports, and even though exported quantities were up in 2022, total commercial disappearance was down.

Some of these commercial disappearance trends are also a function of what is being produced and manufactured in the first place.

“The good news going into this new year is inventories,” he said. “We have no overly burdensome inventories to be concerned about.”

Covington projects 2023 milk production to increase by no more than 1% over 2022, and he thinks the increase could be less than that. Why? Higher interest rates, lower operating margins and the prevalence of beef-on-dairy limiting the supply of dairy replacement heifers. (A tighter than expected supply of dairy replacements was later confirmed in the January 1 semi-annual All Cattle and Calf Inventory Report released by USDA on January 31.)

In the Class I fluid milk markets during 2022, Covington reported sales January through November were off 2.3% from prior year, and he highlighted the fact that the number of fluid milk plants is dwindling.

A producer asked why this is happening, and Covington’s answer was blunt: “There’s no money in it, no profitability. Class I sales are down, so that business is not able to grow volume, and some of those plants are on land that’s a whole lot more valuable to sell than to run a milk plant,” he said.

Over the past two years, the 10 southeastern states have lost 8 fluid milk processing plants, “and that’s done some damage,” said Covington.

At the end of December 2022, USDA listed 39 pool distributing plants for the three southeastern FMMOs — down from 44 a year earlier and down from 70 in the year 2000. The only balancing plants now located in the region are in Kentucky and Virginia.

Of the 39 pool distributing plants across Orders 5, 6 and 7, Covington said 18 are owned by cooperatives, 9 by grocery stores and 12 are privately-owned, but smaller.

“The bulk of your fluid milk is being processed by plants owned by cooperatives — by you — or by retail stores,” he said.

Meanwhile, most of the loss in fluid milk plants has occurred in Order 7, which has half as many fluid milk plants today as in 2000, according to Covington.

Located in Order 7 is Georgia, which has become the Southeast’s new leading state in total milk production. Georgia’s production growth is offsetting Florida’s production losses, moving Georgia to surpass Florida in total output.

At the same time, Georgia has the fewest number of fluid milk plants — down to just two. This combination left Georgia’s farmers producing a per-capita fluid milk surplus of 53 pounds.

Together, the 10 southeastern states remain milk deficit, but the relationship between milk supply and fluid milk demand is steadier across the region, according to Covington. He said the 10-state production total over the past three years “has started to level a bit at 8.1 billion pounds, and is more concentrated to Georgia and Florida with Georgia as a milk producing state, not a milk processing state.”

With producers making 101 pounds of milk per person across the 10 southeastern states, and fluid milk consumption at 133 pounds per person, the Southeast had a 32-pound per person deficit in 2022, he said.

That is a smaller deficit than in 2010 — just before the accelerated annual declines in fluid milk sales began accumulating over the past decade. But as the milk supply in the southeastern states has steadied relative to declining fluid milk sales, the Class I utilization percentage across the three Orders has increased. Averaged at just over 74% for 2022, this was 4 points higher than in the year 2000, although the breakdown shows Class I utilization has been steadily increasing in Order 5 (Appalachian) while decreasing in Order 6 (Florida) and fluctuating in Order 7 (Southeast).

“The major challenge for milk markets in the Southeast is we need more of them,” said Covington. “A lot of the fluid milk products that are sold in the Southeast are not processed here. If we are going to have a viable dairy industry in the Southeast, we need growing and stable markets for milk produced in the Southeast.”

On the production side, he said the region has seen location shifts about every 40 years. “Since the 1980s, Florida was the highest and now into the 2020s, Georgia is number one,” Covington said. Together, they account for over 50% of the milk produced in the Southeast. Before the 1980s, Kentucky was number one with Tennessee a close second.

Covington predicts this pattern will continue while other states in the Southeast become smaller and are vulnerable to begin losing infrastructure.

When asked why Georgia is growing so fast, Covington said simply: “Good dairy farmers. If you look at production per cow and how this has improved, we see Georgia has had one of the highest per-cow production increases in the U.S.”

At the same time, he said, addressing the Georgians in the audience of around 500 people from multiple states: “Your farms are growing, and the state seems conducive to allowing you to grow. You just need to build some milk plants.”

The challenge for the Southeast region is to expand profitable sales at existing plants and/or seek to attract new dairy processing to the region, said Covington.

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Having already killed whole milk, USDA proposed school rule now takes aim at flavored milk with appalling lack of concern for nutrient-density

Posted on February 10, 2023 by Agmoos

By Sherry Bunting, (updated from Farmshine print edition, Feb. 10, 2023)

WASHINGTON — USDA is taking aim at a different area of school milk with new proposed rules announced Feb. 7 that could limit flavored milk to only students in grades 9 through 12. A second option would be to allow all grade levels access to flavored milk, but with draconian cuts to the amount of added sugar they could contain, without regard for nutrient density.

We already have nonsensical restrictions on fat levels for school milk. The more fat is removed from diets, the more sugar is added. That’s a default truth, especially for chocolate milk.

With a 30-minute webinar panel moderated by Ag Secretary Tom Vilsack On Feb. 3, Vilsack cited the Tufts University Friedman School – developer of the infamous Food Compass – as an authoritative source for the Biden-Harris National Strategy on Hunger, Nutrition and Health. The proposed rule itself mentions a “Healthy Eating Index” — a rating system — was applied to align with the 2020-25 Dietary Guidelines.

In the subsequent news release, USDA stated that the proposed rule is part of this National Strategy, which was released in conjunction with the White House Conference on Hunger, Nutrition and Health in September. The conference development, incidentally, was headed up by Dariush Mozaffarian, Dean of the Tufts University Friedman School of Nutrition Science and Policy.

(Please note that the FDA Healthy Labeling proposed rule is another piece of the National Strategy. Public comments on that end Feb. 16, 2023 at this link)

The goal of the National Strategy and the Feb. 7 proposed school meal rule, said Vilsack, is to end hunger and diet-related diseases by 2030.

With that pronouncement and other platitudes about hunger and health… USDA set off to the races on a set of new standards in a proposed rule for school meals that will further limit consumption of nutrient dense foods as multi-year implementation begins when ‘transitional flexibilities’ end in the 2024-25 school year.

Reducing added sugar and sodium levels, as well as increasing the percentages of whole grains, are at the core of the new rules, but there are pages and pages of rules to analyze.

Saturated fat restrictions, including milkfat, will continue and will be more restrictive as the transitional flexibilities USDA has allowed since the Covid pandemic and supply chain disruptions will end in school year 2024-25; however, more flexibility is granted to saturated fats from plant-based sources, such as seed oils.

Secretary Vilsack insists USDA has been on the right track with school meals since 2010. He applauded the results since the Healthy Hunger Free Kids Act was passed (which set up the vehicle for USDA to further restrict saturated fat and to remove whole and 2% milk from schools).

He said that the rate of obesity has declined among children in lower income brackets in every year since 2010. (We’ll have to dig into that because we’ve seen studies and reports showing quite the opposite trend.)

In other words, Vilsack is fully committed to the fat restrictions, and now added sugar and sodium are the new screws to be tightened.

“This makes me sad for our kids,” wrote one school foodservice director in an email after reading the proposed rule.

“If they don’t want us anymore, just tell us now and save us all the misery,” a milk bottler said in conversation upon hearing the news.

“Do public comments ever really make a difference?” a prominent nutrition and health investigator and advocate wrote in an email. “It seems to me that it’s so much window-dressing.”

Friday’s panel with Secretary Vilsack could be described as window-dressing. Consisting of a school-involved mother, a teacher, and a foodservice director, they each called for greater flexibility, more resources and support and more tools to feed nutritious meals as well as more time for children to eat their meals.

Flexibility was a big part of their panel comments. However, the new proposed rule is anything but flexible.

Take a look. Public comments close April 10, 2023

According to the USDA news release Monday, the USDA Food Nutrition Service describes this as “a gradual, multi-year approach to implementing a few important updates to the nutrition standards.”

These include, according to USDA:

— Limiting added sugars in certain high-sugar products and, later, across the weekly menu;

— Allowing flavored milk in certain circumstances and with reasonable limits on added sugars;

— Incrementally reducing weekly sodium limits over many school years; and

— Emphasizing products that are primarily whole grain, with the option for occasional non-whole grain products.

In some of these areas, USDA FNS proposes different options and is requesting input on which of the options “would best achieve the goal of improving child health while also being practical and realistic to implement.”

Specifically for milk, the proposed rule open to public comment contains two options, stating: “Both options would include the new added sugars limit for flavored milk and maintain the requirement that unflavored milk is offered at each meal service.

The two options further restrict flavored milk — even after the added sugars are reduced — as follows:

• Option 1: Allow only unflavored milk for grades K-8 and allow flavored and unflavored for grades 9-12. OR Allow only unflavored milk for grades K-5 and allow flavored and unflavored for grades 6-12. Either proposal would be effective School Year 2025-26.

• Option 2: Continue to allow flavored and unflavored milks for all grades (K-12).

On added sugars affecting the milk as well as other dairy products served in schools, the proposed rule states:

• Limits for grain-based desserts, breakfast cereals, yogurts, and flavored milks, effective in school year (SY) 2025-26.2 are product-based. (This means different rules for different foods).

• Weekly added sugars limit that must average less than 10% of calories per meal, effective school year 2027-28.

Stricter sodium levels are another area of multi-year implementation that will impact cheeses served in schools.

Dairy organizations are noting in their statements that they are looking into the particulars of these changes, and are at least glad to see non-fat and low-fat milk and dairy included but share concern about the proposed flavored milk restrictions.

(In this reporter’s opinion, the food police are going too far. We must find a way to feed and nourish children at school without jeopardizing their actual consumption of nutrient-dense whole foods that strengthen them and help them learn.)

One thing is clear about children. If it doesn’t taste good, they’re not going to consume it. In fact, several surveys indicate that if flavored milk is removed at the grade levels USDA is proposing, school milk sales could drop as much as 40%. This is on top of the 30% drop seen since 2012 when USDA — under then Secretary Vilsack — issued the rule restricting school milk to be fat-free or 1% low-fat unflavored or fat-free flavored options only.

First, USDA removed the fat, which is one element of milk’s flavor, not to mention a wealth of scientific evidence USDA continues to ignore on the health and nutritional benefits of milkfat, especially for growing children. Now, USDA proposes to remove the flavored options of milk until high school (or middle school).

Offering only fat-free and 1% low-fat white milk to elementary and middle-school aged students will be a non-starter for most of them.

Count on this leading to reduced consumption of a most nutrient-dense food and beverage, more wasted milk headed to landfills as the requirement to serve the milk stays intact, and a faster decline in fluid milk consumption into the future.

The proposed rules do not address the role of ‘offer vs. serve’. Currently, many schools allow students to refuse one or two of the meal options to cut down on waste. If fat-free or 1% low-fat white milk is the only milk option for students until 9^th grade or 6^th grade, count on it being refused, which then produces trends that have cumulative effects on school milk orders.

USDA FNS encourages all interested parties to comment on the proposed school meal standards rule during the 60-day comment period that began February 7, 2023 and ends April 10, 2023.

To read the proposed rule and comment on the docket FNS-2022-0043-0001, click here

Or mail comments to School Meals Policy Division, Food and Nutrition Service, P.O. Box 9233, Reston, Virginia 20195. Reference Docket # FNS-2022-0043-0001

Meanwhile, Congresswoman Elise Stefanik of New York recently introduced — again — her bill requiring schools to offer flavored milk. This was a response in the last legislative session to prevent the New York City mayor and others from removing flavored milk options from schools. It looks like now this is a bill that will directly compete with USDA’s proposed new rule. Interested parties may also want to contact their members of Congress to support the flavored milk bill and to support the choice of whole milk in schools, WIC and other government feeding programs. More on such legislative efforts later.

NJ-based Cream-O-Land to acquire Clover Farms, Reading, Pa.

Posted on February 6, 2023 by Agmoos

Companies say: ‘Transaction will secure operations into future’

By Sherry Bunting, previously published in Farmshine, February 3, 2023

READING, Pa. — For over a year, the dairy industry has been aware that the iconic Clover Farms Dairy in Reading, Berks County, Pennsylvania was up for sale, and something was in the works, as its owners and officers near retirement.

On January 23, a joint statement by Clover Farms Dairy and Florence, New Jersey-based Cream-O-Land Dairy confirmed what had been rumored, that the two companies are working together to close a deal that will keep the Berks County plant operational. The recent official statement announces that a subsidiary of Cream-O-Land will purchase Clover Farms, but no details are being revealed.

Clover’s milk shippers received letters dated Jan. 18, stating “Clover Farms Management is pleased to announce that an asset purchase agreement has been executed between Clover Farms Dairy and Cream-O-Land Dairy” and that “both parties are working diligently to close the transaction, likely to occur within two months.”

“I hope this is a seamless transition,” observed Pennsylvania Senator Judy Schwank in a public statement the next day, January 24. Schwank represents Pennsylvania’s 11^th district in which the Clover Farms plant and a large number of its patron dairy farms reside.

“I understand independent dairy farmers who have been shipping their milk to Clover Farms have a commitment from Cream-O-Land Dairy to continue that arrangement, and the plant in Berks County will remain operational,” she said. “Milk processors are a key component of the dairy industry infrastructure in Pennsylvania; so it’s important that we maintain existing processing plants. Clover Farms is an iconic brand, and is known as a premium local product, my hope is it will continue to be while under new ownership.”

Specifically, the Clover Farms letter states that, “This transaction will secure operations into the future as a strong regional dairy processor, which provides hundreds of jobs in eastern Pennsylvania and a stable market for the independent producer network.”

According to its website, Clover Farms employs 300 people, and is supplied by 170 independent dairy farms. These farms are located in Berks, Lancaster, Lebanon and Lehigh counties. According to additional sources close to the situation, milk supplies are often balanced via cooperatives.

Clover Farms milk and dairy products are sold throughout eastern Pennsylvania as well as in New Jersey, New York, Delaware and Maryland. Clover Farms also bottles private label store brands, including the Redner’s Warehouse Markets whole milk. The two companies have had a longstanding business relationship.

With the tagline “fresh taste, local farms,” Clover Farms Dairy has focused on connecting consumers to farmers, being among the first to put a simple QR code on packaging that can be scanned with a cell phone to go to links on the internet with stories and videos about some of the farms supplying the milk, and to understand how milk goes “from cow to carton.”

Sources close to the situation indicate Clover Farms and Cream-O-Land have had an existing co-packing and distribution business relationship for a number of years.

Clover Farms Dairy was established in 1937 by the Rothenberger family, with John B. Rothenberger still listed as treasurer at Dun and Bradstreet; however, digital entries at OpenCorporates indicate he and president Rick Hartman were removed as officers in April 2022 in anticipation of a transition in ownership.

Cream-O-Land Dairy was established in 1943 by Samuel Schneier. According to its website, the company is run today by grandsons Jay and Robert.

Cream-O-Land’s logistical footprint, according to its website, includes a network of warehouses and truck fleets that service grocery stores, supermarkets, schools and colleges throughout New Jersey, New York, Pennsylvania, Delaware, Connecticut, Florida, and The Bahamas.

In addition to its Cream-O-Land brand of milk, cream and cultured dairy products, the company distributes specialty milks such as lactose-free, fortified, organic, flavored and seasonal; as well as New York brands Five Acre Farms and Ronny Brook; several brands of teas, waters and juices; eggs, salad and bakery items; and non-dairy alternative almond, soy and pea beverages under brands like Ardmore Farms, Pacific and Ripple, as well as the Elmhurst ‘Milked’ brand of plant-based alternative beverages bottled in Steuben, New York.

Calls to Clover Farms and Cream-O-Land were not immediately returned.

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Danone may dump Horizon Organic – announcement follows Northeast contract terminations, big investments in fake-milk

Posted on February 6, 2023 by Agmoos

By Sherry Bunting, previously published in Farmshine, February 3, 2023

PARIS, France — Danone put Horizon Organic on the proverbial chopping block last week, positioning itself to take another step away from real milk after spending the past several years building an operational runway to catapult the French-based global food and beverage giant even further into the world of fake-milk.

On January 26th, Danone announced it is exploring the “strategic option” of selling its U.S. organic dairy line — namely the Horizon Organic and Wallaby businesses.

“Both are strong, much-loved brands with compelling growth opportunities,” said Danone CEO Antoine de Saint-Affrique in a brief press release. “That said, seen through the lens of our Renew Strategy, which requires us to stay disciplined in how we allocate our resources, they fall outside of our priority growth areas of focus.”

Previously, Danone executives noted Horizon and Wallaby represent 3% of global revenues and have a “dilution impact on operational margins.”

On the chopping block

Wallaby is an Australian-style organic yogurt found mostly in natural food stores as well as the Whole Foods chain throughout the U.S.

Horizon Organic is ubiquitous and foundational. It became the first public organic food company in 1994 and was purchased by Dean Foods in 2004, where it became part of WhiteWave holdings alongside International Delight, Silk and other fake-milk brands. A 2012 spin-off separated WhiteWave from Dean, taking former Dean CEO Gregg Engles with it, until April of 2017, when Danone purchased WhiteWave, and Engles continued as a current Danone S.A. board member.

The announcement that Danone may dump Horizon comes just before Danone’s fiscal 2022 earnings call, just before the final extensions expire on previously announced contract terminations for 89 Northeast Horizon Organic dairy farms, and just after Danone closed the book in its final negotiations under pressure from organic and consumer groups by presenting its 2023 Northeast Region Investment Package.

Ed Maltby, executive director of Northeast Organic Dairy Alliance (NODPA), recounted the final communication.

Pegged at $18 million, Danone’s package “is designed to drive meaningful impact in the region and the organic farming community in both the immediate and longer term,” Chris Adamo, Danone vice president of public affairs and regenerative agriculture policy, told the Northeast organic community in his December 2022 presentation.

Three Northeast projects were promised:

First, a partnership with dairy farming co-ops and processors to invest more than $14 million to “establish new relationships with more than 50 dairy producers in western New York.”

“A year earlier, in December 2021, Danone maintained they were going to take on 50 new organic dairy farm suppliers to replace those farms they had dumped as part of improving their trucking logistics,” Maltby reflected. “Is this investment geared to making these farms more efficient to improve the supply of milk to Danone, or perhaps to improve their co-op’s infrastructure? How can producers access this money or is it just for processors?”

Second, a ‘market-premium price payment’ is included, whereby Danone commits to providing “direct financial support to farmers in the Northeast, along with additional pay price increases totaling approximately $3.6 million.”

Maltby wonders: “Is this the transition payment that Danone already said it had paid to producers that they dumped? Or is it an increase in pay price for those farms they took on when they dumped their existing producers?”

Third, Danone pledges $500,000 in new grants, administered by The Organic Center in 2023, to “support projects connected to the future of organic dairy and Northeast farming.” Recipients can be individual farms, groups representing farmers, non-profit organizations, academic institutions and universities, groups that provide agricultural technical assistance or groups that train and educate farmers on emerging agricultural topics.

“(Adamo) left many of us, and a few State Agriculture Commissioners, confused about exactly who would get what, when, and how. The phrase ‘smoke and mirrors’ accurately describes the way they have attempted to make consumers believe that something is being done to assist Northeast organic dairy farm families when it is not,” writes Maltby.

“Danone’s lack of transparency at every step, and their green-washing, does not surprise anyone. Their actions have highlighted the problems faced by the Northeast organic dairy community that we continue to work on with support from consumers and other organic advocates,” he adds.

The potential offload of Horizon is not surprising, considering Danone’s pattern of ending contracts with smaller organic dairy farms, consolidating its conventional non-GMO pledge milk via larger farms, while at the same time making a big push into plant-based fakes. These pathways integrate operational control with green-washed growth.

Meanwhile, the promises made by Danone appear to skate all the way around the core impacts and could be up in the air if Horizon Organic comes under new ownership.

The entire organic dairy farming complex has long operated as a premium-priced real milk option alongside what are now ramped-up and continually reinvented plant-based fake-milks. Now they brace for what a Horizon sell-off could mean, and hope to see a real dairy renewal strategy of their own.

Danone’s timeline has shaped up like this:

In July 2016, Danone launched the Dannon Pledge for non-GMO verified, positioning its conventional milk supply around a concept of ‘almost-organic.’

In April of 2017, Danone purchased the Dean WhiteWave spinoff, which included Horizon Organic and the Silk, So Delicious, and Alpro plant-based brands. The DOJ Antitrust Division required Danone to simultaneously divest its Stonyfield Farms subsidiary.

In 2018, Danone quietly notified smaller Horizon Organic dairy farms in the western states that their future contracts would not be renewed amid a glut of organic milk and differences in how USDA’s organic livestock origin rules were being applied. Some of these producers were offered conventional non-GMO milk contracts using Danone’s proprietary Cost Performance Model (CPM). Some found other markets, and many exited the business. According to Danone’s 2021 Regenerative Agriculture Report, more than half of all U.S. milk collected by Danone now comes from farms with CPM contracts.

In February 2019, Danone completed construction of the world’s largest plant-based yogurt factory in Dubois, Pennsylvania, where other non-dairy lookalike products are also made.

In February 2020, Danone told investors the rising global temperature is a business opportunity, and the company would accelerate food transformation with climate at the core of its growth strategy.

In October 2020, Danone announced its partnership with a bioscience startup to use artificial intelligence to explore new formulations to improve taste and texture of plant-based dairy alternatives.

In January 2021, Danone’s So Delicious brand launched its first plant-based cheese, and Danone S.A. was acknowledged as the largest plant-based company in the world. The company told investors it would grow revenue in plant-based with further acquisitions and a “plant-based acceleration unit.”

In April 2021, Danone and the EAT Lancet Commission announced a strategic partnership to promote a so-called “healthier and more sustainable food system by driving a change to planetary diets.” Danone pledged to use its ‘One Planet. One Health’ framework to “accelerate this food revolution.”

In July 2021, Danone announced three new plant-based fake-milk launches for 2022, along with a list of other lookalikes. During the July 2021 earnings call, Danone executives identified the U.S. as a “key plant-based market,” but noted 60% of U.S. consumers are not in the category because of product taste and texture. They announced a plan to win them over “with new dairy-like technology under Silk NextMilk, under So Delicious Wondermilk and under Alpro Not Milk.”

In August 2021, Danone sent letters notifying all 89 of its organic dairy farms in New England and eastern New York that their milk contracts would be terminated in 12 months’ time. Later, under pressure from organic groups, officials and consumers, Danone agreed to a Feb. 2023 extension.

In January 2022, Danone launched the three new fake-milks: NextMilk and Wondermilk hit U.S. dairy cases, and Not Milk hit shelves in Europe.

(Interestingly, the Silk NextMilk Whole Fat has 6 grams of saturated fat from processed coconut and seed oils. That’s more saturated fat per serving than Real Whole Dairy Milk naturally from cows. Danone’s Silk NextMilk is packaged in red and white cartons with the words ‘Whole Fat’ appearing directly under the brand name to mimic the Whole Milk appearance. Interestingly, the FDA’s proposed healthy labeling rule sets a tougher threshold for saturated fat in dairy products compared to saturated fats from plant-sources.)

In March 2022, Danone described its Horizon Organic and “traditional dairy” holdings as “troubled offerings,” telling investors: “There are no sacred cows,” as they “keep pruning” the portfolio to “boost growth” and “distance” the company from “underperformance”… by investing more in “winning products” and selling existing brands or buying new ones.

In May 2022, Danone launched its “Dairy & Plants Blend” baby formula (60% plant-based, 40% dairy) “to expose children to food tastes early in life that can help shape their future food preferences… while shifting toward plant-rich diets and embracing alternative sources of protein to help reduce carbon emissions.”

In October 2022, Danone announced it would use artificial intelligence through its bioscience partner BrightSeed, to reformulate over 70% of its plant-based fake-milk alternatives to reduce added sugars and increase nutrient density. At the same time, it allocated $15 million to “partner with retailers on healthy eating education” and $7 million to partner with community-based programs that provide nutritious foods.

(Timing is everything: Danone is among the financial supporters of the infamous Tufts University Food Compass, launched recently into the federal nutrition policy arena through the Biden-Harris Hunger, Health and Nutrition Strategy and the FDA proposed rule on “healthy labeling.” The Food Compass nutrition profiling algorithm rates nonfat dairy yogurt high as an encouraged food, along with plant-based fake-milks; but real milk and cheese are rated lower as foods to moderate or discourage. More artificial intelligence, to be sure.)

This brings us to January 2023, when Danone announced it is eyeing sale of Horizon Organic, saying it falls outside of their key areas of focus.

(Previously, Danone set its sights on being among the first multinational corporations to achieve global B-Corp certification by 2025, already certified in the U.S. Part of this certification involves accountability for social elements such as fair trade and treatment of suppliers. This posed a problem throughout 2022 as Danone was called upon to rethink the Northeast farm contract terminations or to provide financial assistance for the farms and the region.)

Heading into February 2023, the contract extensions end for the terminated Horizon Organic dairy farms in the Northeast. Some have gone out of business. Others have gone to Stonyfield or Organic Valley, which eventually agreed to take on the remaining Northeast farms facing Horizon termination, along with 40 organic dairies cut last year by Maple Hill in New York.

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Federal Farm Bill hearing: ‘We need all of you involved in this process”

Posted on February 6, 2023 by Agmoos

By Sherry Bunting, previously published in Farmshine

HARRISBURG, Pa. – “It’s crunch time and we are obligated to get this done on time and get it done right,” the new U.S. House Ag Committee Chaiman G.T. Thompson (15^th-Penna.) told a packed room attending his first listening session for the 2023 Farm Bill on Jan. 13 during the Pennsylvania Farm Show in Harrisburg.

Thompson is the first Congressman from the Keystone State to chair the Ag Committee since 1855.

“We’re a little overdue,” he said, indicating he is proud and humbled to serve as he introduced eight of his colleagues joining him for the listening session, where 20 people from a diverse spectrum of agriculture and nutrition testified.

Thompson encouraged more feedback by scanning the QR code on signage posted around the room (or click here).

“We want to hear from rural America and the farmers who touch the lives of every American more times a day than any other industry,” said Thompson.

Joining him from Washington were several Ag Committee members who were officially named four days later on January 17: Austin Scott (8^th-Ga.), Doug LaMalfa (1^st-Calif.), Mark Alford (4^th-Mo.), Chellie Pingree (1^st-Maine), Mary Miller (15^th-Ill.) and Derrick Van Orden (3^rd-Wis.). Also joining the panel of lawmakers were Dwight Evans (3^rd-Pa.), who formerly served on the House Ag Committee but is now on the Ways and Means Committee as well as Dan Meuser (9^th-Penna.) serving on the Finance Committee.

Pennsylvania Ag Secretary Russell Redding (above left) also participated, and it was announced that Redding has agreed to stay on as the Commonwealth’s Ag Secretary under incoming Governor Josh Shapiro. Chairman Thompson (above right) noted that Pennsylvania is the first to also have a state farm bill, which Redding said would not be possible without a federal farm bill.

On the importance of research, Dean Roush represented the Penn State College of Ag Sciences, stressing the need for more investment in land grant universities.

“A nation that controls its food controls its destiny. We are being outspent by China and others,” he said.

Crop insurance was deemed critical by many who testified, and suggestions were given to make good programs better and to make them easier for diverse farmers to participate.

On dairy, representing the Pennsylvania Dairymen’s Association, executive director Dave Smith, a dairy farmer in Lebanon County, said having a reliable workforce is essential, and he highlighted crop insurance and the Dairy Margin Coverage (DMC) program.

Smith said the Supplemental DMC was helpful in 2021, but that dairy farmers should have the opportunity to bring their production history more current. He also said the coverage cap for tier one should be raised to more adequately reflect the average U.S. herd size of 316 cows as of 2021.

Smith called for Congress to “make a good program better” by raising the highest coverage level above the current margin of $9.50 per hundredweight as other farm costs are going up that are not included in the milk over feed cost margin.

On milk pricing, Smith said real reforms are needed, but should be accomplished through federal order hearings, not through legislation.

“That process allows industry professionals to examine proposals more thoroughly,” said Smith as he touched on the Class I pricing change made in the last Farm Bill that was exacerbated by the pandemic and led to disorderly marketing.

“The Federal Milk Marketing Orders were established to ensure orderly marketing,” said Smith. “It’s failing and has led to a significant loss of dairy farmers. The Class I change was made with the best of intentions but has led to lost revenue.”

Smith concluded by stressing the need to get legislation over the finish line that restores whole milk in schools and allows whole milk to be offered throughout the government’s charitable feeding programs.

(Representing the Grassroots PA Dairy Advisory Committee was yours truly. In my testimony, I thanked G.T. Thompson for his sponsorship of the legislation seeking to bring whole milk choice back to schools, and that even though this doesn’t fall under the Farm Bill, the Nutrition Title should exempt nutrient-dense foods, like whole milk, from the out-dated and arbitrary fat limits of the Dietary Guidelines. I noted the poor performance of the Class I change made in the last Farm Bill and expressed farmer concerns on emissions tracking and how methane is calculated. See my full written testimony here.)

Frank Stoltzfus, a Lancaster County beef producer representing the Pennsylvania Cattlemen’s Association and NCBA (recently elected to the executive board), said a livestock title is “not necessary in the farm bill. We don’t want one. We don’t want to open the door to unnecessary regulations and mandates.”

However, he did cite the importance of strengthening risk management tools, disaster recovery, animal health and conservation programs to remain voluntary and incentive-based, where farmers are recognized for what they have already done for the environment.

“We are pretty good at this,” said Stoltzfus. “We can do it with your help.”

He also stressed that farm policy and climate policy should recognize cattle as a solution, not a problem — that beef cows efficiently use land not suited to crops to produce protein, nutrient dense food, that is “necessary for the sustaining of America and its people.” He applauded Chairman Thompson for adopting this position.

“Cattle take land that is too-something — too steep, too wet, too rocky, too-something — and they naturally turn that into a valuable food product,” said Stoltzfus, a past environmental stewardship award winner.

“Cattlemen and take blue sky and green grass and make red meat — a protein that really feeds the world,” he said.

A full house of farmers and ag-interested people attended House Ag Committee Chairman G.T. Thompson’s 2023 Farm Bill listening session at the Pennsylvania Farm Show last week.

Rep. Doug LaMalfa, chair of the Conservation and Forestry subcommittee, picked up on this. His family grows rice in northern California, and he was blunt.

“I would caution folks with cattle, that when cows are vilified on methane, stay strong. Don’t be pulled into that. Don’t be railroaded into doing all of this climate stuff,” said LaMalfa.

He went on to note his concern about the electric conversion of everything, mentioning the talk recently about banning gas-powered stoves and generators.

“We need to take a lot of this with a grain of salt and apply commonsense. We have a lot of commonsense in Rural America,” said LaMalfa.

Earlier in the listening session, Shawn Wolfinger of Horizon Farm Credit touched on climate, noting that “Agriculture is part of the solution for mitigating the impact, but our ask is that the farm bill provide voluntary, incentive-based assistance and that private sector and ag lending not be required to be conditioned on adoption of certain ag practices,” he said.

Conservation programs were highlighted as critical to agriculture and ecosystems, but testifiers noted these programs are 50% oversubscribed and need more funding to provide voluntary, incentive-based assistance to more farms.

Rep. Pingree of Maine said streamlining conservation programs so they are easier to use by small and specialty crop farms and dealing with food waste are important for the future. “We want to treat farmers as partners – our best partners – in renewable energy, innovation and research. We have to work hand-in-hand,” she said.

National Farmers Union president Michael Kovach highlighted the need for “decentralization of our food system” and “renewal of our soils.”

Representatives for Pennsylvania Farm Bureau and Pennsylvania Corn Growers both stressed the need for robust crop insurance programs to manage risk.

Among the panel of lawmakers, Rep. Austin Scott from Georgia, chairman of the subcommittee on General Commodities and Risk Management, made it clear these tools “are there to reduce risk, not guarantee profit.”

He said reference prices have not been updated since 2004, so that’s on tap for re-evaluation in this round, along with loan rates.

Rep. Mark Alford of the ‘show me’ state, said he comes from the media world with a career in television news and a desire to get the important farm bill messages out there.

“Our food security is our national security,” he said, noting his goals for a Farm Bill in which “farmers are protected, the nation is fed, children are healthy and we are good stewards of God’s resources.”

Rep. Mary Miller of Illinois, took the opportunity to state her support for whole milk for healthy kids. “We raise corn, cattle and kids,” she said. “Our seven children are all trim and healthy adults and they grew up on whole milk.”

Rep. Derrick Van Orden of Wisconsin said he looks forward to being a new member on the Ag Committee and is a firm believer that “milk comes from cows, not from nuts.”

He also touched on the need to reset baselines, look at the Federal Milk Marketing Orders and to reinforce nutrition in programs like SNAP.

There is no time like the present to get nutrition right. That was a central message pointed out by Joe Arthur, testifying as director of the Central Penn Food Bank, part of the Feeding America network.

“The food crisis is not over and we fear it might be deepening,” he said.

Stating the importance of the SNAP, WIC and TEFAP programs as a lifeline for food and nutrition, Arthur said one goal should be to strengthen the partnership with local farms when their markets face disruptions.

“We are now well beyond the pandemic, and the crisis of inflation and food system supply chain challenges are almost as impactful as the height of the pandemic,” he said. “We saw 20% more food bank distribution in 2022 than in 2019.”

Rep. Evans from Pennsylvania noted the importance of bridging the language gap between urban and rural for better understanding. “We are all in this together,” he said.

For his part, Pennsylvania’s continuing Ag Secretary Redding thanked Chairman Thompson for bringing the Farm Bill information-gathering process to Pennsylvania. He stressed that farm policy at the federal and state levels is critical to “food, jobs and quality of life. It’s rural and urban, west and east, north and south, and the pieces need to fit together and find that equilibrium.”

“We need all of you involved in this process,” said Thompson. “The only way to get it right, to restore a robust rural economy and grow it, is for farmers to be at the table and stay at the table.”

-30-

Pennsylvania dairy farmers Dale Hoffman (left) of Potter County and Nelson Troutman of Berks County are both members of the Grassroots PA Dairy Advisory Committee and attended the 2023 Farm Bill listening session Jan. 13 at the Pennsylvania Farm Show.

Berks County dairy farmer Nelson Troutman attended the Farm Bill listening session wearing his Drink Whole Milk – 97milk.com hat. In fact, he reports that Congresswoman Mary Miller of Illinois, who was recently named to the House Ag Committee, noticed his cap and came right over to him before the Farm Bill listening session began. She told him how much she loves whole milk and appreciates this education effort. He is pictured after the listening session with grandchildren (l-r) Emma, Madalyn, Jace, and Nolan.

My testimony at the Chairman’s Farm Bill listening session in January

Posted on February 6, 2023 by Agmoos

Good afternoon honorable Chairman, members of Congress, farmers, colleagues and friends. Thank you for this opportunity to make comments on the importance of the federal farm bill.

My name is Sherry Bunting. For 40 years, I have served as an ag journalist. Before that I milked cows. I am a volunteer resource person with the Grassroots PA Dairy Advisory Committee, which I am representing today. The grassroots committee works with the separate volunteer 97 Milk education effort that began when Berks County dairy farmer Nelson Troutman painted a round bale ‘Drink Whole Milk 97% Fat Free.’

Our main effort is to educate policymakers about the importance of children having the simple choice of whole milk in schools. We thank Congressman GT Thompson and the cosponsors of The Whole Milk for Healthy Kids Act in the last legislative session and hope to see it become reality in the next session.

We understand this does not fall within the farm bill; however, there are some intersections.

Bottomline:

We believe children should be able to choose nutrient dense whole milk that they will enjoy and therefore actually consume in school meals and other USDA-funded nutrition programs.

We believe farmers should be free to offer children the quality product they actually produce and be free to use their own mandatory promotion checkoff funds to promote what they produce: That would be the nutrient dense whole milk that is naturally 3.25 to 4.5% fat, mostly standardized at 3.25% fat – or virtually 97% fat free.

Under the Nutrition Education part of the Nutrition Title, we support language to exempt nutrient dense foods, like whole milk, from the arbitrary and outdated fat-limits imposed by the Dietary Guidelines for Americans (DGA).

We support a farm bill provision to untie the hands of the dairy checkoff program to come out from under these arbitrary fat-limits so farmers can promote the nutrient dense whole milk they produce.

The cafeteria where Pennsylvania state lawmakers and staff have lunch offers the choice of whole milk, whereas our children are federally prohibited from choosing whole or 2% milk at school where they have two meals a day, five days a week for three-quarters of the year.

Nutrition title

The nutrition title of the farm bill sends mixed messages. Are we nutritionally supporting families in need when the arbitrary fat-limits unfairly keep nutrient dense foods like whole and 2% milk out of schools and other programs like WIC for children over age 2?

Worse, USDA has proposed a new rule to reduce the amount of milk a mom can buy under WIC.

The administration’s new Hunger, Health and Nutrition Strategy goes even farther, using FDA authority to – as President Biden and Secretary Vilsack put it — “tell us what we should eat”. This is a chilling thought.

Under the proposed FDA Healthy Labeling rule, whole milk will qualify as nutrient dense but may not qualify for a healthy label because of these outdated fat-limits.

Meanwhile, we see the SNAP program puts few if any limits on sugary snacks and sodas with zero nutrients. We hear from our own school nurse committee member that it’s normal to see donuts with sugary sprinkles and fat-free flavored milk for school breakfast while nutrient dense whole milk is forbidden. How does this make sense?

Dairy policy

After more than 10 years of allowing only fat-free and 1% milk at schools, a generation of milk drinkers has been lost and milk consumption declined more rapidly.

The Class I pricing change in the 2018 farm bill was supposed to help fluid milk innovation while being farmer-neutral, but it made these trends worse. Over the past 4 years, we have seen the following:

1) More price risk put onto dairy farmers with a net loss of $941 million in Class I value over 4 years comparing the new Class I pricing formula to the old one, including $264 million in losses for 2022 losses, alone; (Backgrounder submitted)

2) Disruption in how risk management tools work so farmers have less confidence in using them;

3) More processors de-pooling milk, so just 60% of U.S. milk production participated in federal milk marketing orders in 2021,

4) Rapid increases in the number of competing highly processed ‘fake-milks’, and

5) A large number of fluid milk plant closures and rapid consolidation of the industry toward cow islands and milk deserts. (Some analysis from 2021 and 2022 can be found at these two links:

https://wp.me/p329u72Cq and

https://agrite.files.wordpress.com/2021/07/dairy_situation_analysis_bunting_july_2021_final-1.pdf

6) Industry consensus for reverting to ‘higher of’ (AFBF stakeholder meeting in Kansas City in October 2022 – coverage at these two links:

https://wp.me/p329u7-2Ee and https://wp.me/p329u7-2Ez

The Class I ‘mover’ formula should revert back to the ‘higher of’ at least until national hearings can explore the future of the milk pricing system and figure out what to do about farmer payment protections if more processors stop participating in federal orders. Only Class I fluid milk processors are required to be regulated under federal orders.

Dairy farmers appreciate and rely on farm bill programs like Dairy Margin Coverage, Dairy Revenue Protection and Livestock Gross Margin. However, these programs don’t make up for, nor do they function properly, if we don’t have transparent pricing and competitive markets.

Also, these margin programs do not consider rising fuel costs. Farmers pay transportation to bring inputs on the farm and to ship milk off the farm.

Sustainability

Moving ahead, we see sustainability targets as the next big consolidator. We have concerns about how methane is calculated and see an anti-cow bias that started with the anti-fat Dietary Guidelines, now moving into the way climate targets are discussed and measured. We encourage you to look at the work of Dr. Frank Mitloehner on how Global Warming Potential is incorrectly calculated for cattle.

We believe the farm bill should remain focused on conservation and innovation research and assistance. It should be voluntary and not tie needed farm programs to climate goals.

We believe farmers should get credit for what they are already doing, such as here in Pennsylvania, where farmers have long used cover cropping and conservation tillage practices.

Thank you for your work on developing a farm bill that recognizes our farmers as the environmental and economic backbone of America and to support farm vitality that will ensure our nation’s food security and freedom.

Respectfully submitted,

Sherry A. Bunting for Grassroots PA Dairy Advisory Committee / 97 Milk

Lifelong resident of Lancaster County, Pennsylvania; freelance writer and columnist, Farmshine; former school board director, Eastern Lancaster County School District; member North American Ag Journalists

717.587.3706 mobile

agrite2011@gmail.com

Address: 1918 Barnett St., East Earl, PA 17519

Is the dairy checkoff getting its methane math right? Nope!

Posted on February 6, 2023 by Agmoos

Study says dairy should aim for climate neutrality, not net-zero carbon. Dr. Frank Mitloehner explains meaningful metric, achievable goal post during webinar

Sherry Bunting, previously published in Farmshine

BROWNSTOWN, Pa. — Net-zero carbon, net-zero GHG, net-zero GHG footprint, carbon neutrality, GHG neutrality… These terms are being used to describe the dairy checkoff’s 2050 commitments via DMI’s Net Zero Initiative.

But do they consider the warming impact of methane from dairy cows over time?

Bottomline, the so-called “Net-Zero Initiative” of DMI is a set up to be always chasing the cow’s biology without measuring her methane as the flow gas it really is — without considering the short-lived nature of methane and the biogenic cycle cattle are a part of.

If net-zero carbon is the goal, and if methane is measured on carbon dioxide equivalency without considering its short-lived cycle, then dairy farmers could find themselves in the position of unnecessarily and continually chasing the natural biology of their cows without a meaningful and accurate metric and without an achievable goal post that satisfies what all industries around the world are really being asked to do, and that is to limit additional warming.

A new study by foremost animal scientists and air quality specialists Dr. Frank Mitloehner and Dr. Sara Place is calling for the U.S. dairy industry to aim for climate neutrality (net-zero warming) rather than net-zero carbon or net-zero GHG.

The peer-reviewed study from the University of California-Davis CLEAR Center and Elanco Animal Health was published recently in the Journal of Dairy Science. It outlines a path for the U.S. dairy industry to reach climate neutrality by 2041 with small methane reductions every year, and even sooner with more aggressive reductions.

Dr. Mitloehner brought dairy farmers up to date and took questions during the American Dairy Coalition’s annual meeting by webinar in December.

One important take-home message was for dairy producers to understand that how methane’s global warming potential is quantified (whether GWP100 or GWP*) “has a profound impact on the predicted warming of your industry. The only way you can become climate neutral is by using a metric fit for purpose, one that predicts the warming, and that is GWP*,” said Mitloehner.

He explained how methane is an important and powerful greenhouse gas (GHG), but it is different from other gases because it is the only one that undergoes atmospheric removal in a chemical process that takes about a decade. This does not occur for carbon dioxide or nitrous oxide, which are stock gases that remain in earth’s atmosphere for 1000 and 100 years, respectively.

“Methane is the most important gas for agriculture, so its removal must be included in the calculation also,” he confirmed, noting that GWP* does that. “Methane is fast and furious. It has a good punch that is 28 times more trapping of heat from the sun (vs. carbon dioxide), but it is also fast. It doesn’t stay in the atmosphere for long.”

In a slide showing all global methane sources and sinks, Mitloehner noted that nearly 560 terragrams of methane are produced worldwide annually, and at the same time 550 are destroyed by this natural atmospheric process.

In terms of atmospheric growth, “the net is then 10. This is still a number we want to reduce, but it is not 560,” he said.

As the DMI Innovation Center’s Sustainability goals, Net Zero Initiative and FARM program are on the cusp of calculating these things at the farm level, both the measurement and the goal matter.

A net-zero carbon or GHG commitment poses a problem for dairy farmers. This is compounded by the CO2 equivalency for methane being calculated using GWP100.

The GWP100 metric has been around since the 1990s, but it describes stock gases, whereas methane is a flow gas.

Using GWP100 with a net-zero carbon commitment is not only unnecessary, it’s problematic.

“It means the belches from your cows are (being calculated) in addition to what they belched last year, and the year before that, and so forth 10 years from now,” said Mitloehner. “In reality, constant herds are a constant source of methane that generates a constant warming, not a new warming. That’s what the Paris Treaty asks all sectors to do – to limit additional warming.”

Aiming for climate neutrality or net-zero warming instead of net-zero carbon would put the focus where it needs to be — on the warming impact of the emitted methane over time. This is important because methane makes up 62% of the estimated total GHG for dairy, according to the CLEAR Center study.

“If we use GWP100 to describe a relatively constant source, to characterize that methane, then we are overblowing its impact by a factor of 3 to 4, and we are overlooking the ability for the U.S. dairy industry to reduce warming when we reduce methane,” said Mitloehner, citing page 173 of the Intergovernmental Panel on Climate Change (IPCC) 2021 Assessment Report 6.

The metric GWP-star (GWP*) is also mentioned on this page of the IPCC report. GWP* was developed by the University of Oxford. It is based on GWP100, but it looks at how methane warms the planet over time. It characterizes methane as the flow gas that it is and calculates it based on CO2 warming equivalents (CO2we), not as accumulating CO2 stock equivalents (CO2e).

A white paper published with the peer-reviewed CLEAR Center study explains it this way:

“Net zero carbon refers to a state where carbon is removed from the atmosphere (through carbon sinks or other offsets) at a rate equal to carbon being emitted into the atmosphere. This balance between carbon emission and removal creates a ‘net-zero’ carbon output. Climate neutrality, on the other hand, focuses on temperature impacts from emission sources, referring to the point in which no additional warming is added to the atmosphere.”

The paper goes on to explain how “climate neutrality is analogous to net-zero carbon when dealing with long-lived greenhouse gases such as carbon dioxide, but short-lived pollutants like methane do not need to reach net-zero carbon to be climate-neutral.”

“Is it new and additional carbon being added to the atmosphere? Do constant herds add new warming? No, they do not,” said Mitloehner.

“Belched out methane is the number one source in agriculture, but again, it doesn’t stay in the atmosphere for 1000 or even 100 years like carbon dioxide and other GHG,” he explained while also noting the pathway of the carbon in this methane is already present in the atmosphere, is captured by plants, then consumed by cows. Some of this consumed carbon (energy) is converted to carbohydrate and some of it is emitted in the methane by the cow in a continuous cycle.

Unlike fossil fuel emissions, this is not ancient carbon brought out of the ground and into the atmosphere as a one-way-street, he explained: “Do not fall for the people who are comparing cars to cows. The University of Oxford says this is a mischaracterization, and I agree.”

What is exciting, “is if we reduce methane, we can come to a point where we produce negative warming or a cooling effect. That’s what my work is about (Fig. 4). If we do a couple of things to reach no new warming, and if we then get aggressive to go further, we can sell credits as offsets,” said Mitloehner, referencing the implications, limitations and conclusions of the CLEAR Center study.

As innovations related to managing cattle diets are being developed, the good news is emerging tools show the promise of steering more of that carbon, that energy, toward milk yield and components and less of it to methane that is belched back into the cycle.

In contrast, a net-zero carbon or net-zero GHG goal that measures methane as a stock gas (GWP100) and does not accurately describe its warming impact and flow-gas status in the way GWP-star (GWP*) does, would leave dairy farmers needlessly and continually chasing what under the GWP100 scenario are accumulated and continuing belches from their cows.

If the industry continues to chart net zero carbon, will dairy farms be forever chasing their belching cows with tech investments and offsets?

“In my opinion, you will never reach net zero carbon. Your cows will always produce methane no matter how aggressive you are. You will over promise and leave stakeholders disappointed. We are dealing with a biological system, the microbial fermentation in the rumen. It is not feasible and I have advised the industry in the past against it, but that is the direction it goes – in general,” said Mitloehner.

As for unintended consequences on the path to ‘net zero,’ Dr. Mitloehner was clear to say: “What matters is climate neutrality. If you tell the world you want to be climate neutral with no new warming and achieve it through annual reductions of 0.3 to 0.5%, you will indeed be climate neutral in less than 20 years. At a 1% per year reduction in methane, you will accelerate that timeline. But you will never achieve it with GWP100. It’s not possible and not necessary to go that way of treating methane as if it were a stock gas. It doesn’t account for the reduction.”

A piece of good news, he said, is that GWP-star (GPW*) can be used parallel to GWP100. The maitrix is a more scientific predictor of what you (dairy) has to do to bend that curve and how strongly.

“The excel spreadsheet calculator in the white paper helps you identify when in the future as a creamery or a statewide association reach the point that you are no longer creating additional warming, and that should be the goal,” Mitloehner explains.

Net zero carbon or net zero GHG is a setup to always be chasing the cow’s biology without acknowledging her gas is a flow gas, not a stock gas. It does not accumulate. Some will say “you can use offsets” for the cow’s biology. But why? They are not necessary as offsets and could be viewed as solutions if the dairy industry gets its math right. (We’ve seen this movie before)

Dutch farmer protest update: What if you woke up tomorrow and learned your farm is to be reduced or closed based on climate targets that use fuzzy math?

Posted on February 6, 2023 by Agmoos

When food is plentiful, and climate reduction targets kick-in… How do farmers attract the strong public support they need to continue?

By Sherry Bunting, previously published in Farmshine

NETHERLANDS — Headlines here in the U.S. indicate the Dutch government is offering buy-out of up to 3000 farms and other so-called ‘peak polluters’ to reduce ammonia and nitrous oxide emissions to bring the country into compliance with EU pledged targets. They say farms will be offered more than 100% of their value to quit, but the value of these farms is now reduced by the reduction targets.

A November 30 article in The Guardian quotes the Dutch nitrogen minister Christianne van der Wal saying “there will be a stopping scheme that will be as attractive as possible,” and that forced buyouts will follow next year if the voluntary measures this year fail.

Some may read these headlines and figure Holland is such a progressive agricultural powerhouse that the number of planned closures is but a dent.

Think again.

Farms in Holland and around the world are the thin green line. Challenging them with inflated climate data and restrictive targets puts world food security at risk.

Consider that the BBC reported recently that Ireland is also looking at agricultural emissions, namely methane from cattle and sheep, in terms of meeting its Climate Action Plan targets of a 25% reduction by 2030. Estimates vary on how much culling would need to occur to meet these targets, how the methane is measured, and how fast various feed additives can help farms meet new targets. The most glaring concern is how carbon equivalents and methane are measured.

What if you woke up tomorrow and learned that your farm is targeted for similar reductions or closure based on the location of your farm on a map, based on climate targets set by your state or your milk buyer or the federal government, based on making cuts from where you are now — not from where you might have been before whatever improvements you’ve already made?

We reached out to Dutch dairy farmer Ad Baltus this week for an update from Holland, having interviewed him six months ago for the story about the Dutch farmer protests in July 2022.

Baltus farms 170 acres in the village of Schermerhorn with his wife and 7-year-old daughter. They milk 130 dairy cows, grazing in summer and growing corn and collecting fresh grass and dry hay from fields as well.

In July, he reported that his farm is one of the “luckier” ones. He is in a location in North Holland that will have to reduce the amount of nitrogen (or sell cows) by 10 to 15%. Some zones have been designated to reduce by up to 75 to 90%. The percentages are to meet reduction targets, and are not based on what a farm is measured to produce. Building and infrastructure projects can’t move forward without near-term offsets, which is why the situation has reached this extreme point in the Netherlands.

“It feels like the government throws figures in the air, and they wait to see what will happen,” says Baltus. “In my point of view, they try to make farmers worried as a tactic of smoking them out. That’s what you see now. The farms (targeted for higher reductions based on location) nearby the nature areas are getting tired of it, and they sell. I see the last couple of months a lot of farms, nice farms, being sold, and that worries me. If they stop farming, and go abroad, what will be left in Holland?”

He observes that the older farmers stay on the farm until they stop for retirement. “But when the young farmers stop and go abroad — that’s the future leaving. The young farmers are the future. The young farmers don’t want to wait for what is clear and what is going to happen. The problem is now — in the next five years,” he says, indicating a cycle of new targets that never seems to end. “Every time the government throws new figures out. This time it’s the nitrogen, then it’s the water quality, and then it’s the biodiversity, then there is CO2. Every time there comes new regulation, young farmers worry about their future.”

He sees agriculture in his country at a crossroads and warns that if this can happen in Holland, where agriculture is so progressive, it can happen anywhere.

“It could go the right way, and they will begin to appreciate farming in Holland, or it could go the other way, and farming may be over in 10 or 20 or 30 years. My biggest worry is you need some minimum amount of farmers to let the companies behind the farms live. I see it that when you have a feed company, they need a certain amount of farms to deliver their feeding products. When it comes down below some level, they say that is too small for us, and it is a spiral going down. That’s a worry for me, that we make it difficult for too many farmers, and they stop.”

Baltus confirms that the large Dutch farmer protests of the summer have quieted down, but the efforts and periodic protests continue on a different scale. “We are not giving up. We are struggling ’til the end, but it is a hard battle to convince (the government) that this is not the good way to go.

“We also see the farm groups talking to the government. We see the (symbolic) red handkerchief. The Dutch flags turned upside down for a month got attention. The protest is maybe not as loud as it was, but it is still there, and a little spark to the gunpowder barrel, it will explode again,” he says, noting that there are elections in March 2023.

As for the big picture, Baltus describes it as Dutch farmers having to ‘catch up’ quickly to the long-time networks built by the NGOs.

“Farmers have been too long on their own farms, and now you see things changing. Since 2019, when the first farmer protests began, you see farmers are now talking more to the media. They get a better speech to government officials,” says Baltus.

On the other hand, the NGOs, like Greenpeace, and a variety of others, are a small number of people relative to the population of Holland, but they have already been working 20 to 30 years on this. They are well-organized, well-funded, and have people throughout all levels of government and media, he explains.

“We are just now three or four years fighting against that, and it takes a time to change and get that understanding of nature and practice to the government,” Baltus relates, adding that it also takes time for new technologies to come to market that will help farms make further reductions, though European farms are already pretty progressive that way.

Baltus sees European farmers coming together more for each other now — even if their respective governments are not. As other countries in the EU are beginning to experience similar pressures of emissions targets that could essentially reduce dairy and livestock numbers or put farms out of business, solidarity is on the rise among those farmers who are paying attention.

Farming is hard work with a lot of risk, but as Baltus points out, Holland is a good place to farm, with good soil, good logistics, and a good climate for crops and livestock.

“It is one of the best jobs in the world. I love what I do. I want the adventure that every day is different. I like working in nature, working outside,” he says. “When the younger generation doesn’t have to worry about all of the things which are not farming, then they will go to farming because the work is that good. It is only the things that come from outside into the farm that make it hard.”

One part of a future solution is exemplified in something Baltus has done at his farm for 30 years — providing a school on the farm to teach young children how to make cheese and to make jam. His cheese school reaches a few thousand children each year.

“We do it so the children learn how much work it is to make that little piece of cheese and that little pot of jam,” he says. “When they learn the effort that goes into food, they appreciate it more, I think.”

The children get a bucket of milk, and in two hours they go home with a little cheese. They have to turn in 14 days and put on a little salt, and in another 14 days they eat their own cheese. When Baltus started the cheese school 30 years ago, maybe one or two farms did this kind of thing.

Today, more farms are doing similar memorable learning experiences. Baltus sees more farms connecting with the public in recent years. Some have cabins on the farm that they rent to the public. Others provide daycare on the farm, so children can grow up with some real-world attachment to farming. In his neighborhood, there are four farms with daycare.

“The new generation learns what it is to farm, so maybe they will be farming or an advocate. If they go to work as a plumber or a trucker, but as a child lived a few years on a farm at a daycare, it’s good for when they are older, even if they work in other things,” he explains.

“The solution is also that everyone you speak with — say to them what you are doing. When you are at a party or on holiday, say you are a farmer, say how you do things, why you do things — explain it,” Baltus suggests. “People come to appreciate these things when they know about them. There are things (farmers) can do better, but when we explain that we need 5 or 10 years (as technology develops), they accept we’re not perfect but are working to make it more perfect.”

In general, Baltus has found the public has a good opinion of farmers. When he meets someone from the city, they say “Oh, you’re a farmer. That is good of you.” And that’s that. They think well of farmers, but have no reason to worry about food, and therefore don’t make the connection to the impact of the threat the farmers face.

“People have other worries. Do I have a job next year? Can I pay my bills for electricity? Will my children have a good education? But food? There is always food. People will worry about food when there is no food,” he says.

As it stands now in Holland, “What is happening with farms is not really their business. People can go to the supermarket, and most everything they want they can buy there,” Baltus observes, saying he understands this disconnection.

Even if there are changes to the mix of foods available in stores and restaurants, there is no fear of finding food to eat. While Holland is considered a large agricultural exporter, Baltus notes that his country is a net-importer of food when looking at it on a protein and energy needs basis.

“We have the cheese and potatoes and cabbage, but we don’t have the coffee, the cocoa and the citrus. I see it in the way of trading. When that balance is lost, what happens when there is a shortage and we don’t have the cheese or potatoes to export?”

The bottom line, says Baltus, is that “When you are a carpenter or a plumber and there is, every day, food in the supermarket, why would you have to worry about food?

“In Africa, they know food is important. They know what it is like to not have food. But in the western world, there is food everywhere. You can pick up the phone, and in 30 minutes have a pizza on your plate.”

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Measure every decision by cow comfort and know your numbers: ‘That’s how you fight inflation’

Posted on December 23, 2022 by Agmoos

By Sherry Bunting, Farmshine, December 23, 2022

NEW HOLLAND, Pa. – “Too much money chasing too few assets,” that’s the definition of inflation, said Gary Sipiorski, ag lender and financial consultant from Wisconsin.

He didn’t have to tell the over 250 dairy farmers attending Homestead Nutrition’s dairy seminar at Yoder’s Restaurant in New Holland on December 7 that inflation is real, because they are feeling it.

His bottom line is to measure every decision by its impact on cow comfort and manage the net income the cows generate.

As president and CEO of Citizens State Bank of Loyal, Wisconsin, Sipiorski is also an advisor to the Federal Reserve Board of Chicago. He expected the Fed would raise interest rates another half a percent, and several days later, that’s what they did.

Raising interest rates is meant to slow things down enough to curb that inflation, and as farmers, “you’re feeling the effects of both,” he said.

Sipiorski described the effects of both the disease and the cure as something that creeps up gradually to squeeze the margin.

“You can be taking good care of things and don’t see this happening, as the temperature gradually increases. It sneaks in slowly,” he said. “The war on inflation will continue for at least the next 12 months, and we are likely to see interest rates continue higher before stabilizing around the middle of next year.”

The good news for dairy, he said, is that even though consumers are drinking a little over half as much milk per capita as they did 50 years ago (18 gallons vs. 30 per person per year), they are eating more than double the gallons of milk in the form of all dairy products, combined.

In 2021, Americans consumed 667 pounds (77 gallons) of dairy products per capita. That’s 12 more pounds per capita than in 2020.

“We didn’t drink the 77 gallons, we ate it,” said Sipiorski, adding that dairy exports have also become crucial.

“By the end of this year, 20% of your milk production will be going elsewhere,” he said. “That shows the faith the rest of the world has in the superior product you make.”

Inflation, rising interest rates and supply disruptions are slowing the rate of dairy expansion, as the industry focus turns inward to manage margins even more tightly as feed costs have doubled, cropping costs have quadrupled, lines of credit cost more and are harder to get, machinery and parts cost more and are harder to find, and some farms must deal with a milk base program from their milk co-op or buyer — putting penalties on overbase milk in the output side of that margin equation.

Sipiorski shared his insights on the most important things the top 30% of dairy producers do in a talk he titled ‘Chasing inflation with a cow.’

The top third of dairy producers double-down on managing these primary areas: feed, debt, labor, cow comfort, and knowing their numbers.

Minimize feed shrink

With feed and cropping costs so much higher, Sipiorski told dairy farmers the 10 to 20% they can be losing in feed shrinkage is a significant area to manage.

“Losing 10 to 20% of the feed from field to rumen is a big cost to the dairy,” he said. “We are seeing more investment in feed storage sheds, bringing the mixing indoors and thinking about how you mix the feed, in what order.”

Pay down lines of credit, not term debt

Choosing carefully what debt to pay down at this time of rising rates is also critical. Paying down lines of credit that have adjustable interest rates and keeping some of that cash liquidity may make more sense than paying additional principal on longer-term fixed rate loans.

“Your thought process may be to pay down that term debt, but if the rate is locked-in, and you pay it down, that money is gone, and you may need that money later, and then pay a higher interest rate for it,” Sipiorski explained, advising farmers to talk with their lenders about their debt structure.

Push pencil on machinery

“Do the math on whether to lease or buy machinery,” Sipiorski urged. “If it is something you use three months of the year, can you afford it? Can you afford the cost to have and maintain that piece of equipment?”

He noted that the top dairy farms push the pencil to compare costs of owning new equipment, leasing it, or hiring custom operators for segments of their field work.

Time is money, spend it wisely

In addition to dealing with hired labor cost and availability, Sipiorski advised farmers to “count your steps and measure your time.”

In other words, know what your time is worth and find ways to streamline chores for yourself and your employees. One example he gave was to put tools around where they will be used to minimize time spent going back and forth for tools needed.

Keep improving cow comfort

“Cow comfort is a place to keep improving to fight that inflation with that dairy cow,” Sipiorski declared.

It’s the accumulation of a lot of simple little things the top third of producers do, such as providing enough space at the feedbunk, waterer and in the dry cow area.

“The dry cows are working just as hard for you, so don’t cheat them” he said, adding that top producers are absolutely passionate about cow comfort.

The cows require a lot of investment, and the top producers benchmark the investment per cow at $8,000 to $20,000, while benchmarking gross income per cow at $5,000.

“Cow comfort is an area of investment that brings you the most return. Every decision you make, ask yourself, are you making money with that decision?” he said. In other words, “are you making cows more comfortable with that decision?”

Keep improving milk components, quality

Producing milk with higher component levels and lower somatic cell counts (SCC) is what the top third of producers are doing, said Sipiorski.

“This is even more important if your co-op has a base program. If you can’t produce more milk, make the milk you are producing better,” he said, noting that components drive value.

Quality as measured in SCC will also increasingly drive value and market access. Sipiorski sees the industry getting to the place where milk will eventually have to be under 150,000 SCC.

While he didn’t specifically mention transformation in the processing sector, it’s becoming clear that ultrafiltration and microfiltration in some of the newer dairy plants is aimed at removing the lactose from the milk to be used in making cheese, other dairy products and lactose-free high protein milk beverages.

Those working with this technology have repeatedly said it requires farm-level SCC thresholds to be even lower because, as the water and lactose are removed through membranes and reverse osmosis, the remaining solids are condensed. This includes the SCC being concentrated with those valuable solids, so those processors expect a lower-SCC limit at the starting point.

Get educated on marketing

Sipiorski advised farmers to be “educating yourself on marketing and risk management.”

He noted that milk markets are volatile, and marketing through a broker or a cooperative program or other risk management can be good or bad.

“You won’t know if it’s a good deal or not, if you don’t know your cost of production, your margin,” he said.

Know the numbers, focus on high quality forage production, and look at areas where changes and investments can help fight inflation, he advised.

One thing he has seen more farms moving toward – to reduce marketing costs – is to increase milk storage to go from once a day to every-other-day pickup to reduce fuel costs, transportation and ‘stop’ charges.

This is something that has been occurring at the retail end for years, with less frequent deliveries from processors to retailers becoming the norm today.

Benchmark against industry or self

Benchmarking the dairy to itself year over year or to industry averages is important financial management, according to Sipiorski.

The numbers that are needed to do this are found on the balance sheet, income statement, and accrual accounting of yearend income – not the IRS tax return.

He said that doing a business plan with projected cash flows helps make better financial decisions.

Sipiorski gave farmers some financial benchmarks to keep in mind, noting again that the numbers need to be based on accrual accounting, not the year end IRS tax return.

“In that tax return, you have prepayments and depreciation,” he said. This skews the cost of production calculation, for example, because the cost of inputs are not directly aligned with the output revenue.

Sipiorski ticked through some industry benchmarks to be aware of: Equity position (50%), liquidity (2:1), net profit margin (10%), cost of production ($17-22.00/cwt), operating expense as a percentage of gross income (65-80%), and debt to revenue ratio (1:1).

The bottom line, he said, is “you need to produce 100 pounds of milk for less than you sell it for.”

On that point, he noted the most recent USDA forecasts at the end of November are for Class III milk to average $19.80 in 2023 with the All-Milk price next year forecast to average $22.70, while the cost of production in 2022 is averaging $20 to $22.00 across the industry, but the range is wide.

“Pennies (per hundredweight) are a big deal,” he said, showing that the 47-pennies per hundredweight difference in a Q2 2022 comparison of the net margin per hundredweight of $6.64 for all herds vs. $7.11 for the ‘top 30% of herds’ amounts to just shy of $113 per cow annually.

“That’s $2800 on 25 cows, $11,280 for a 100-cow dairy. That’s how we fight inflation with a cow,” he said. “Who in this room wouldn’t want another $11,000 in the pocket to fight inflation?”

Sipiorski described dairy as a dynamic business full of chaos and volatility, but with that comes lots of opportunities.

He sees a ‘barbell-shaped’ future for dairy, where there will be opportunities for small and mid-sized family dairies even if a large portion of the milk supply comes from much larger dairies.

-30-

Gary Sipiorski, a lender from Wisconsin, talked about dairy financial management in these inflationary and volatile times. Despite the chaos and consolidation, he sees opportunities for small and mid-sized family dairies in the future, even if a large portion of the milk supply comes from much larger dairies. Photo by Sherry Bunting

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