More open bidding process, accelerated timetable underway for sale of Dean Foods plants

By Sherry Bunting, Farmshine, Friday, March 27, 2020

HOUSTON, Texas – Changes have officially been made to the bidding procedures originally sought by Dean Foods in the conglomerate’s Southern Foods Group Chapter 11 bankruptcy and sale in the Southern District of Texas.

In a very brief continuation of bidding procedures hearing on March 19, U.S. Judge David R. Jones said he would sign an order that outlined the new procedures and accelerated timetable for bankruptcy and sale proceedings. A cover story in last week’s Farmshine described the concerns and changes that led to the new order.

On the evening before the hearing, Dean withdrew its original proposal for Dairy Farmers of America (DFA) to be designated as stalking horse bidder, essentially dissolving key elements of the Feb. 17 Asset Purchase Agreement with DFA on 44 of Dean’s 57 plants.

This move to a “value maximizing” sale process opens the bidding to more opportunities for additional single- and multi-plant bids as well as a potential restructuring bid.

Bids are due by Noon CDT on March 30, 2020, with Dean declaring winners shortly thereafter.

Objections to a sale order or transaction are to be filed in writing by April 1, 2020 at Noon CDT.

A hearing to consider the proposed sale transaction will be held before Judge Jones on April 3, 2020 at 9:00 a.m. CDT.

Attorneys and consultants for interested parties worked together at the suggestion of Judge Jones to modify the original proposal after objections were raised by the creditors committee, potential buyers of Dean assets, and more than a half dozen dairy cooperatives. Their concerns focused on the lack of fairness and transparency in the previously proposed bidding process that sought to designate DFA as lead bidder with protections for its 44-plant bid.

The order at the case docket does not remove DFA as a potential bidder but opens the process by not designating DFA as the stalking horse bidder.

More information can be found at the website for the Southern Foods Group case at https://dm.epiq11.com/case/southernfoods/dockets and at https://deanfoodsrestructuring.com/

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Market Moos: COVID-19 impacts how consumers are supplied with food

By Sherry Bunting, excerpt updated from Market Moos in Farmshine, March 27, 2020

Ten days into the 15-day COVID-19 “flatten the curve” mitigation strategy, supermarkets are still scrambling to remain supplied with in-demand food items — including milk, especially whole milk, dairy products, especially butter, eggs and beef.

Nielson data show nationwide fluid milk sales were up 32% last week, dairy products like butter (up 85%), cheese and yogurt up over 50%, egg sales up 44%, and beef sales, including ground beef, up 77%!

Walmart and other supermarkets have started setting limits on how many gallons of milk or cartons of eggs or packages of butter can be purchased per customer, meaning shoppers will be making more frequent trips to feed their families and supply their older loved ones.

In Pennsylvania, for example, Secretary of Agriculture Russell Redding sent a message out on various television news programs Wednesday evening, asking the state’s consumers to “stop hoarding food” and to “think of others who may need the food.”

Unlike toilet paper (and there’s more to that story too in terms of paper product imports), what we are seeing with food essentials is not “hoarding.”

What may not be clear to state and national ag and government leaders is that consumers are not hoarding food, they are buying what they need for a week at a time (to avoid multiple trips exposing them to multiple people). Their grocery lists are more full because for most of them, their whole families are home all day and evening with schools closed and all non-essential businesses shut down.

In addition, many shoppers are buying provisions for elderly parents or neighbors to leave on their porches for them.

This is not “food hoarding”, this is providing for one’s family now that families are not being institutionally-fed according to the government’s rules restricting calories derived from animal products at least one or two meals at least five days a week.

This is a major shift in where the supply chain needs to focus its distribution of the abundant milk and beef that farmers are producing, but is meeting a severe tamp-down in terms of base pricing, production penalties being deducted from milk checks, and over this past weekend even the dumping of milk due to what industry leaders say is “processing disruption” or “loss of foodservice and hospitality trade” despite huge increases in retail purchasing indicating supply chain shifts. (See more on that here.)

A dilemma for some farms that have transitioned into direct sales to get closer to end-users, is that their businesses often rely on people assembling through agro-tourism, farmer’s markets, events, and casual dining restaurants that are more geared to dining-in than taking-out.

Some of these diversified and direct-to-consumer dairy, beef and farmsteading operations have large and fairly recent processing equipment and marketing investments and now must limit access to the consumers their businesses served.

A provision in the $2 Trillion COVID-19 federal aid package is $9.5 billion for livestock, dairy, and specialty crop producers that are part of “local food systems” where their marketing is impacted by COVID-19.

Farms that have developed consumer-facing businesses may also qualify for “bridge” loans to small businesses that are also part of the package.

Meanwhile, dairy, beef and ag organizations are beginning to also raise a concern to USDA to be alert to price manipulation as sales and value to processors is rising rapidly with the surge in demand for dairy and beef, while the prices paid to dairy and beef producers is falling rapidly in the other direction as both milk futures and live cattle futures plunged.

American Farm Bureau Federation even raised this concern, along with transportation and labor as three points of vulnerability on farmers’ minds.

A spokesperson for National Cattlemen’s Beef Association expressed NCBA’s concerns in a CNBC business news interview indicating that farmers and ranchers selling cattle once a year as their income for the whole year, felt the huge drop in live cattle on the futures market for fats and feeders. This can break an operation selling cattle at this juncture, after the tough year last year.

Meanwhile, boxed beef prices are rising rapidly, to where processor margins are $600 profit per head, whereas farm losses are more than $100 per head. This also happened a year ago when the relationship between farm pricing and wholesale to retail pricing was equally inverse, showing massive profit-taking at the processing level and big losses for cattle producers for many months after a fire at one beef processing plant in Kansas.

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When freed from institutional food-police, what are consumers choosing?

_DSC0830Bad news meets dairy good news as industry navigates COVID-19 pandemic

By Sherry Bunting, Farmshine, Friday, March 27, 2020

BROWNSTOWN, Pa. — We will get to the good news, but first, the bad news…

These are tough times for Americans, and dairy farmers are hearing from their cooperatives and industry in such a way as to put a black cloud of doom over 2020.

Farmers are getting letters and phone calls stating milk base penalties will be strictly enforced beginning this week, in the case of Land O’Lakes, MDVA, DFA — for example — which ask for “voluntary milk reductions” and make plans for dumping milk on farms and at plants as “potential plant closures” meet spring flush.

They indicate that the ability of plants to process milk could “worsen,” giving folks the sense that the ability to process all the milk is already bad. And the dairy industry is preparing its farmers for the possibility of no compensation for displaced / dumped milk.

National Milk Producers Federation’s bulletin and press releases this week state they are seeking three things from the federal government — asking to reopen 2020 Dairy Margin Coverage enrollment, to purchase additional dairy products for humanitarian feeding programs, and to compensate them for “milk disposal” they deem to be “a real possibility as logistical challenges on the farm and at manufacturing plants may create severe disruptions.”

In fact, just 11 days into the COVID-19 national emergency declaration, NMPF came out with an estimate that the dairy industry’s losses “may exceed $2.85 billion”. Analyst after analyst is coming out with new forecasts — projecting milk prices paid to farmers could fall well below pre-COVID-19 forecasts and conjuring up images of 2008-09.

While the pessimistic psychology in these letters, phone calls and industry proclamations is peppered with platitudes such as “we’re in this together” and “we’ll rise to the challenge”…  dairy farmers are already rising to the challenge all day every day producing the milk that consumers are turning to in their time of grave health concern.

The psychology in the letters and phone calls received by farmers stands in stark contrast to the good news.

Now for the good news…

A silver lining became obvious last week and is continuing this week. Consumers are reaching for the jug! In fact, they are reaching for so many jugs that some stores are reportedly limiting milk purchases to one gallon per shopper.

They are also reaching for cheese, butter, yogurt and other dairy products as stores and plants scramble to restock.

While the Dietary Guidelines Advisory Committee is poised to further clamp-down on the allowable percentage of calories from saturated fat (sources say new guidelines might drop to 7% instead of the current 10%!), what are consumers doing?

Consumers are currently free from the government’s flawed and unhealthy “food police” nonsense that the Dietary Guidelines foist upon us by dictating our nation’s institutional feeding and foodservice in schools, daycares, workplaces — even restaurants.

Those dairy farmers attending the dairy checkoff question and answer session in Chester County, Pa. on March 5 heard firsthand from DMI leaders that dairy checkoff foodservice “partners” — like McDonalds – “want to meet the dietary guidelines on saturated fat and calories,” which is why their meals, especially for children, only offer fat free or 1% milk and it’s why the cheeseburger is not on the Happy Meal board. (But you can get a slice of cheese on that kid’s burger if you ask for it, and you can get whole milk in your hot chocolate, they say, if you ask for it.)

In our collective American lives — pre-COVID-19 —  stealth-health according to government rules has been in effect more than we realized.

The point here is this: Supermarkets are where consumers get to choose what they want to feed their families when the menu is theirs to create. And consumers are learning that saturated fat is not to be so-feared, that Whole milk has less fat than they thought, and that Whole milk and dairy products provide more healthy benefits than they ever thought — including immune-building benefits.

Yes, milk education works. As soon as consumers get to choose freely, what are they choosing? They are choosing milk and dairy, and they are choosing whole milk over all other forms — when it is available.

While DMI leaders talk about “consumer insights” and “moving to where the consumers are” and “moving them away from the habit of reaching for the jug to try innovative new products”… what are we seeing when all the stealth-health controls are lifted and people are home choosing what they will feed their families during COVID-19 “social distancing” and “sheltering in place”?

We see them choosing the truly healthy comfort foods. They are choosing whole milk and 2% gallons and half-gallons, butter, full-fat cheeses and red meat for their families.

These items are quite literally “flying off the shelves.” This phrase is used in report after report this week about the demand pattern that is unfolding.

This supply-chain shift is something the dairy industry is wholly unprepared for, as the path charted for dairy processing and promotion has been so heavily linked to flawed dietary guidelines, institutional feeding, foodservice chain partners and new, more expensive, innovative products — that the concept of filling so many jugs with healthy, affordable, delicious milk is a bit off the charted path.

Even USDA Dairy Market News observed in its weekly report on Friday, March 20th what we also reported to you from our sources in Farmshine last week — that the surging demand at the retail level is more than overcoming reductions in sales to schools and foodservice. In fact, USDA DMN reports that retail milk demand is “overtaking inventories” and that retail orders are “heading into new territory.”

Pictures of empty dairy cases populate social media posts. And yes, USDA DMN confirms that Class I milk demand is ranging mostly from “strong” and “surging” in the West and Midwest, to “extraordinary” in the Northeast, to going “haywire” in the Southeast.

Given that the spring flush has begun, the current surge in fluid milk demand means less of this extra milk will go into manufacturing — as long as consumers continue the current level of fluid milk buying and as long as the milk is in the stores for them to buy.

This pattern should help the surplus butter situation, which was revealed again in last week’s February Cold Storage Report. Last year ended with inventories of butter up 18% compared with the end of 2018. The February report showed butter storage was still bursting at the seams.

But earlier this week, at a local grocery store, only a very local brand of butter was available. Zero Land O’Lakes butter could be found in the case.

USDA DMN in its March 20 weekly report stated that cream is widely available, which seemed to contradict the agency’s description of whole milk sales and its notation in the report that butter churns have strong orders from retailers for what they call “print” butter – butter for retail sale, not bulk inventory.

So what do the numbers look like?

It’s more difficult than ever to get timely information from USDA AMS about packaged fluid milk sales, but here’s what virtually every dairy analyst is reporting this week. They cite the Nielson supermarket data showing fluid milk sales were up 32% last week, that sales of whole and 2% are dominating, when available, and that retail sales of other dairy product classes were up double digits.

Milk and dairy products are a centerpiece of “comfort food” and in-home meals. Families are enjoying milk again. Will they keep enjoying it after they return to school and work? Or will they be back in rush zone of packaged carbs instead of cereal and milk, and back in the government’s “stealth-health” or “fake health” zone where fat is restricted and carbs are unlimited?

It will take some time to sort out the buying patterns that linger after the initial surge in dairy demand currently experienced at retail, but here’s some additional positive news to think about.

When consumers are educated and get the opportunity to seriously whet their appetite. When they tune-out the frivolous ‘sustainability’ banter about cows and climate and can ignore the rules about saturated fat… When they focus-in on their families, turn to milk for health, flavor and comfort, and remember or realize for the first time what they were missing… Who knows what they will choose going forward – when they are allowed to choose?

Even when families return to work and school, they may remember coming to dairy for immune-building properties, for comfort, for health.

Nielson has a chart at its public website tracking key consumer behavior thresholds in six quadrants: Reactive health management, pantry preparation, quarantine preparation, restricted living, and living a new normal. It shows their consumer insights on how buying patterns evolve during a health emergency of the scale of COVID-19, and how this peels away some of the frivolous drivel and constraints that influence consumer behavior in ordinary times.

In the sixth phase, “living a new normal,” Nielson describes how “people return to daily routines of work and school, but operate with a renewed cautiousness about health.” It goes on to state that this creates “permanent shifts in the supply chain.”

Citing the use of e-commerce and hygiene practices as examples, this sixth phase of “living a new normal” when returning to daily routines could also apply to food and beverage purchases as consumers returning to true health and comfort during the first five phases may continue to prioritize true health and comfort after those phases have passed.

What do consumers really want? Where are consumers moving when they are free to move?

Without institutional control of daily diets and promotion, we are seeing a glimpse of the answer to that question within the context of COVID-19 pandemic buying patterns. Real whole nutrition, foods that build immunity, awareness of Vitamin D deficiencies in our population affecting immune system response, the role of other elements in milk for immune-building, preference for local food that doesn’t travel so far, and a revitalized awareness of how regional food systems are critical to our food security — these are perspectives that could prevail to influence buying patterns into the foreseeable future.

Uncertainty prevails right now, but hope is alive, and the good news is that milk and dairy have much to offer.

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Dairy industry navigates uncharted territory amid COVID-19 pandemic

By Sherry Bunting, Farmshine, Friday, March 20, 2020 (updated March 24)

BROWNSTOWN, Pa. — The ‘new normal’ brought on by the novel Coronavirus / COVID-19 global pandemic evolves rapidly as the U.S. is partway through the 15-day “flatten the curve” effort deemed critical by health officials. Federal, state and local governments worked together to launch the 15-day mitigation strategy early last week to blunt the trajectory of viral transmission so that it does not overwhelm medical and caregiving infrastructure when the virus is expected to reach its peak in 45 days.

The effort led to closures and cancellations of non-essential activities, with some large cities and highly affected states moving to “shelter in place” strategies.

National state of emergency

A national state of emergency was declared March 13. Alongside the more restrictive guidelines, new drive-through testing sites became available in all 50 states, and the Trump Administration cleared the way for certain anti-viral therapies used for other illnesses to move forward through FDA after trials showed positive results.

A 2 trillion-dollar response and aid package is also moving through Congress, and by March 18, President Donald Trump had invoked war powers to utilize military medical resources and ramp up private sector production of items needed to combat the virus.

A key difference from Influenza, say scientists, is COVID-19’s much more rapid rate of transmission and the current lack of management tools like vaccines and anti-viral therapies, making its burden to medical infrastructure a key concern.

Meanwhile, hospitals and health systems adopt strict visitation rules, take stock of bed and equipment capacity, and work through triage plans.

Markets and trade

Financial markets had steep losses again this week in response to the economy slowing to a virus-induced crawl. Travel restrictions and lack of availability of shipping containers are reported as just some of the disruptions to U.S. trade, including dairy. But remember, these disruptions are based on a viral epidemic that current steps are aimed at curtailing, so the longer-term impacts on human and economic health are hard to predict.

On March 18, President Trump and Canadian Prime Minister Trudeau announced the closing of the U.S-Canadian border to non-essential travel. Both leaders assured that trade crossings, especially food, fuel and medicines, will not be affected.

The dairy futures markets suggest that the brunt of the impact on product prices and farm-level milk prices will be felt after May, but this depends largely on what happens over the next two months.

Milk and dairy in demand

Meanwhile, gallon and half-gallon sales of Whole Milk and 2% — as well as cheese and butter and other dairy products — are experiencing surging demand at the retail level, more than overcoming reductions in sales to schools and restaurants to the point of retail milk demand overtaking inventories with retail orders heading into “new territory.”

Pictures of empty dairy case shelves populate social media posts, and USDA Dairy Market News reports Class I milk demand ranging mostly from “strong” and “surging” to “extraordinary” and “haywire.” Given the reported butter surplus in cold storage, the current surge in fluid milk demand means less milk for manufacturing to add to inventories as the spring flush builds.

Milk and dairy products are a centerpiece of “comfort food” and in-home meals. In fact, as families settle into a period of greater isolation, more families are sitting down to eat together. Children are relaxing in the absence of extra-curricular activity schedules, and we may just find milk coming back to tables.

Schools, supermarkets, and restaurants adjust 

State governors have closed schools for at least two consecutive weeks, and now restaurants in many states are closed, except for takeout meals.

As the overall economy grinds to a virus-induced stop, uncertainty prevails even as essential services gear up for what may lie ahead. Amazon, for example, seeks 100,000 additional workers while limiting their warehousing and shipping to be focused on medicines and high-demand essential items.

Supermarkets are working to restock essentials, and there is a universally-reported surge in demand for milk and dairy foods that started March 13 and has accelerated nationwide since then. Stores are modifying operations, and relaxed rules for USDA meal reimbursement allow schools to provide grab and go meals to more families as children are home, and many adults find themselves suddenly out of work.

Supply chain planning and liquidity

Anticipating demand surges to be followed by periods of pull-back, milk plants and cooperatives are monitoring and planning for rapidly changing milk dispatch conditions. Many are looking ahead to make milk and dairy products available to food banks, as they are able, and especially if school half-pints are in inventory and as the product mix in demand is dramatically changing from foodservice to in-home use.

Concerns about liquidity have prompted The Fed to reduce the target interest to zero to 0.25%, and at the agricultural level, Farm Credit and other lenders sent communications Tuesday about working with customers impacted by COVID-19 as the full effects are not yet known in terms of Ag marketing and supply chain challenges.

Dairy market forecasts

Some analysts are going public with forecasts that dairy markets will suffer an average decline over the next 12 months that could be anywhere from 3 to 8% or 20 to 25% below the industry’s pre-COVID-19 milk price forecasts. Some have gone so far as to say milk prices paid to farmers could fall to 2008-09 levels as global and U.S. recession concerns emerge.

However, the underlying fundamentals of the U.S. economy are strong and will prevail unless both the fear and reality of the virus have a deep and long-lasting impact – something that cannot be forecast at this juncture.

Global Dairy Trade (GDT)’s price index is down 8% since COVID-19 fears became prevalent when the situation in China became known and Europe’s cases emerged. And yet, trading volumes have not declined in the biweekly GDT auction. This suggests global dairy demand is holding up.

A big supply-and-demand swing is always China, and there is a bright spot on that score.

Dairy is essential

Dairy is essential to a healthy diet, especially in times like these, and Milk’s immune-building properties are being recognized. For example, in China, where the virus is reported to have peaked and may be leveling off, Chinese dairy associations worked with the Chinese government to issue guidelines to “increase dairy consumption to build immune resistance,” saying “fight COVID-19 with dairy.”

A report this week in Food Navigator details these new dairy consumption guidelines in China as well as specific elements in milk that help boost the immune system. The formal stated: “Milk and other dairy products are an excellent source of high-quality protein and can also provide a source of Vitamin B2, Vitamin A, calcium and other nutrients essential for the human body. So a higher intake of these products for those low in protein, especially when higher immune resistance is required to fight the novel coronavirus, will be very beneficial.”

Dairy industry navigates ‘new normal’

Meanwhile in the U.S., four dairy processors and three milk cooperatives reported in email responses to Farmshine this week that even though all schools, some daycares and many restaurants are closed or curtailed, sales of fluid milk are surging to more than compensate.

“Quick changes in demand require a different product mix (whole gallons instead of 1% chocolate half-pints, for example). From a production standpoint, we have been reinventing the wheel every day for almost a week,” writes Carissa Itle Westrick of Valewood Farms Dairy, Loretto, Pa.

Another western Pennsylvania milk bottler indicated there are no sure answers to any questions just now, but that retail demand is higher, and the hope is that the school grab and go meals in most communities will be able to consume half-pint inventories.

In short, everyone is figuring out their “new normal”, and the industry is shifting its product mix from foodservice and institutional-style demand to in-home use demand.

In the Southeast, where fluid milk sales have been “lackluster” over the past several months, the situation changed dramatically since Friday, March 13.

“Up until last Friday, we had not encountered any changes in overall routing of milk to our regular fluid customers,” notes SMI’s CEO Jim Sleper.  “Then beginning Friday and ever since, it seems like all of our customers have added on additional milk to keep up with the surging demand resulting from customers stocking up, and we are seeing these extra loads far exceed the number of loads lost from schools being out.”

This observation is national in scope as confirmed by numerous industry sources, including Dean Foods, nationally, and other processors in the Northeast.

The concern in the balance is how long will this continue as home-bound refrigerators become full but also have the people at home to consume it?

Supply chain management?

Concern was expressed by some sources as to how the demand pattern will unfold if schools remain closed beyond two weeks right into the spring flush, especially if plants are short on labor or unable to remain open for a time.

According to a notice shared with Farmshine this week, Land O’Lakes informed its eastern members that beginning March 23, its base program will be strictly enforced, assessing members $10/cwt for their production over their individual base allocation, and asking members to “voluntarily” reduce their milk production as well as to prepare to dump milk.

The accompanying letter from Land O’Lakes indicated “business as usual” otherwise, for the moment, but that the cooperative is “preparing for a potential reduction in employee availability at plants across the country,” citing the possibility of having to dump milk. The letter also indicated that daily recorded messages would be sent to members in each milk shed about each milk shed’s respective situation.

All industry sources interviewed expressed heightened levels of emergency preparedness to bring some stability. As SMI’s Sleper put it, “We are treating this uncharted territory similar to our regular Hurricane Preparedness planning.”

Like the daily governmental briefings, milk processors and cooperatives are doing daily, even multiple times a day, conference calls among staff and board to navigate.

Transportation, labor and pricing

In a paper released this week by Dr. Andrew Novakovic of Cornell, the key points of vulnerability for the dairy industry are transportation and labor.

“Transportation disruptions could quickly scale to an industry problem,” he writes.

He also noted that the health of the labor force in milk plants affects the availability of milk more quickly than that of an individual farm.

American Farm Bureau also expressed to USDA that labor, supply chain issues and possible price manipulation top the list of immediate issues farmers are raising.

Optimism and commitment as food providers

In a letter to Secretary of Agriculture Sonny Perdue, AFBF president Zippy Duvall pledged that, “America’s farmers and ranchers will be with you every step of the way, doing all that we can to help you win this fight and to ensure the health, safety and prosperity of all America.”

Sleper also expressed positivity. “Uncertainty seems to breed pessimism especially with the stock market and dairy commodity pricing,” he wrote in an email. “We will endure this like we have other situations.  For SMI, we encountered extremely low milk prices over the past four-plus years, a shortage of available labor, two major bankruptcies, and hurricanes. I’m amazed how resilient (our farmers) have become.”

Novakovic cites a few positives to think about: “Overall, I am optimistic that the food industry, beginning with farmers, will rise to this challenge,” he writes. “Given the longstanding concern and emphasis around animal health and food safety, I think agriculture and food businesses have a leg up in doing what is needed now.”

In fact, FDA released information this week stating that COVID-19 is NOT a foodborne pathogen, confirming that there is no evidence of food or food packaging being associated with any transmission of COVID-19.

“We are lucky in the dairy industry that the sanitation and food safety practices we have in place every day protect us from a variety of outside threats. We have expanded these plans, with an eye toward the unknown,” writes Itle-Westrick in an email. “But as a small business, the possibility of one employee becoming ill is something that would have a big impact on our production and distribution capability, so we are protecting against that.”

Even though schools are closed, their needs continue at a smaller, though increasing, scale. Numerous mainstream media outlets are picking up stories showing how schools are providing these grab and go meals (without congregating) in communities across America.

Krista Byler head chef of Union City Schools in Erie County, Pennsylvania says inventories allowed them to feed participating students for one week, and that they’ll need items like bread, rolls and milk for next week.

“We had sufficient milk on hand to handle breakfast and lunch for one week of service, and will be placing a milk order on Friday for the week of March 23rd,” said Byler in a Farmshine interview.

“I think every foodservice employee in this district is a mom, a grandma. We definitely have a heart for the children here, and we just want to make sure they have the food they need.”

Resources for dairy and agriculture

While there are likely many resource bulletins being put together for farmers and dairy producers,  two good ones include Pennsylvania’s Center for Dairy Excellence at https://www.centerfordairyexcellence.org/covid-19-farm-resources/ and Indiana’s Purdue University at https://www.purdue.edu/newsroom/releases/2020/Q1/a-guide-for-local-producers-to-navigate-the-covid-19-outbreak.html

Gratitude

AUTHOR’S NOTE: Instead of pessimism, a can-do spirit prevails as farm-to-table sectors navigate these unprecedented challenges, including restaurants that are on the front lines as vulnerable small businesses taking a huge hit but in many cases providing takeout meals, even at discounted prices, with an eye on the situation.

As dairy farmers continue their important work each day, we thank you — and all involved in the food supply chain — for your essential contributions

May God bless the medical professionals, caregivers, first-responders… and the farmers who feed us. Stay safe, have faith, and be well as we all pull together to stay apart and curb transmission to starve the enemy COVID-19.

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Smiles for young and old during opportunity to ‘Milk-A-Cow’

Milk-A-Cow-2441

Jill Dice of Fredericksburg, co-founder of Spot On Agrimarketing, talks about how she and Stacy Anderson of Lebanon began the Milk-A-Cow Experience three years ago at the Pennsylvania Farm Show. They are grateful to volunteers who either provided cows or helped with the first-time milkers, including Lexi Findley, Katelyn Teaman, Brad Walker, Deidra Bollinger, Michele Reasner, John Brodzina, Olivia Lesher and Seth and Erica Miller. State dairy royalty Paige Peiffer, Denae Hershberger and Vannika Rice also helped provide information to visitors.

By Sherry Bunting, Farmshine, January 31, 2020

HARRISBURG, Pa. – It may be the Farm Show’s “best kept secret,” and in its third year at the 104th Pennsylvania Farm Show, the Milk-A-Cow exhibit drew 500 people over a two-hour window on Friday, January 10.

Those wanting to see what it is like to milk a cow came in all ages from young children who were excited just to be touching a cow to senior citizens claiming the experience of milking a cow was on their “bucket list.”

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“People just love it,” says Jill Dice of the exhibit she started three years ago with her friend and Spot On AgriMarketing co-founder Stacy Anderson. “The questions we get are really good, and people are so thankful to be able to bring their questions to real dairy farmers.”

(Jill had her hands full that day as the Dice family’s Jersey cow was supreme championof the 2020 Pennsylvania Farm Show!)

Of course, the Milk-A-Cow opportunity would not be possible without the producers and volunteers who bring the cows and work with the public to help them quickly learn how cows are milked so they can try their hand at the chore right there on the spot.

In addition, Jill and Stacy appreciate the volunteers helping answer the public’s questions as they come into the equine arena and get in line for the experience. And they appreciate the dairy princesses who engaged the crowd with milk facts in a fun and entertaining manner while they waited in line or sat in the stands to watch.

Milk-A-Cow-2390

Stacy Anderson, co-founder of Spot On Agrimarketing, started the Milk-A-Cow Experience with Jill Dice. Children like this third-grader from the Harrisburg area lined up for photos with a heifer before moving on to the milk cows.

Jill and Stacy tag-teamed the crowd, with Jill involved in the milking experience area, which is set up in the equine arena after the celebrity milking contest on ‘dairy day’ at the Farm Show. Meanwhile, Stacy trots a heifer out into the hallway to lure-in visitors who are walking through the show so they are aware of the event. Children can come in and pet the heifer and pose for photos before moving on to the milking area.

WGAL sent a television crew for a Farm Show news spot this year and the camera-man, himself, wanted to give it a try.

New this year was the table manned by 97 Milk volunteers, handing out information about whole milk and getting signatures for the “bring whole milk back to schools” petition.

Also new was the increase from four to six cows ready for milking.

In general, the activity is low-key and comfortable. It’s meant to make learning fun, and organizers take every opportunity to use the experience to help the public understand how farmers take care of their cows, the attention they pay to food safety and milk quality and freshness, as well as the nutrition that milk and dairy products provide.

As one local third grader said after his turn “milking” for the first time: “That was really cool!”

He paused and reflected for a moment to say, “Well, actually, it was warm.” He then proceeded to repeat, with authority, what he learned from his helper, Seth Miller of Tulpehocken FFA, that milk comes out of the cow at her body temperature and “goes through pipes to get cool in a huge refrigerator.”

Adults were even more wide-eyed and curious than the children about the whole experience. Some thought the milk would come out faster, others thought it would be easy to do and were surprised to learn it’s not so easy.

One woman who had been wanting to do this since she was a child, was relieved to learn that the cows were milked earlier so it’s not like they were full of milk like at a normal milking time.

“That’s a relief,” she said. “But the farmer had no problem getting the milk to flow, I could only get a little bit. I guess I have renewed respect for what it takes to milk a cow.”

She was also impressed by how calm the cows were: “It’s obvious they really  don’t mind this at all!” the first-time milker said, smiling.

To see the smiles on faces young and old and to share knowledge in such a hands-on and individual way was rewarding for everyone involved.

The event is organized by Spot On AgriMarketing and supported by the Friends of the Pennsylvania Farm Show Foundation.

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Surprise. Surprise. Whole Milk is on the rise!

… Even in the face of massive opposition by USDA, DMI and others

Editor’s note: Farmshine contributor Sherry Bunting continues her opinion and analysis on where the milk bus is heading and some thoughts on what to do about it.

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By Sherry Bunting, Farmshine, Friday, January 17, 2020

BROWNSTOWN, Pa. — Activist non-governmental organizations (NGOs) are increasingly driving the milk bus as dairy industry organizations, checkoff organizations and government agencies partner with entities such as World Wildlife Fund (WWF) on dietary and sustainability goals.

The leaders who are working with NGOs and government agendas long enough might think they speak for us as consumers, as society. They don’t. But through our organizations partnering with them, they ultimately and incrementally not only speak for us, they are driving the bus.

If we are listening, we’ve heard the model described by industry experts and thought-leaders in articles, at conferences, and in roundtable discussions: Build huge cheese and protein ingredient plants at designated growth locations. Innovate with ultrafiltration and reverse osmosis technologies. And begin to balance the export-driven dairy industry focus and consolidation by transporting ultrafiltered solids “more sustainably” – minus the 88% water portion – and do the reconstitution, extended shelf-life and aseptic packaging on location in the regions that are currently fluid-milk-centered markets, such as the Southeast, Mid-Atlantic and Northeast.

Rampant supermarket loss-leading on fluid milk by the nation’s largest retailers on one hand, with USDA-regulated farm-level price enforcement on fluid milk on the other hand, has produced the vice-grip in which the fluid milk sector has found itself over the past four to five years in particular.

Dairy producers were in the grip the past five years, but now that farm-level prices have ticked a bit higher the past five months, fluid milk bottlers suddenly find themselves unable to weather the margin compression, as we see in the recent high profile bankruptcy proceedings of Dean Foods and Borden, not to mention the smaller companies along the way.

As long as producers were the ones receiving the ugly side of the stick, the conversation could be generally centered on “too much milk” or “market forces” or “trade and tariffs.”

Now that farm-level milk prices have moved up (even though export volume was down), the unsustainable, low-margin, commodity treatment of fresh fluid milk is being seen as a primary factor fueling fluid milk processor bankruptcies – for those looking into these issues more deeply. In fact, checkoff leaders cite the milk bottler bankruptcies as proof that milk should be reinvented. Some have gone so far as to say — in presentations to industry groups — that the goal of innovation is to “move consumers away from the habit of reaching for the jug and toward these new and innovative products.”

While per-capita milk sales have been declining for 45 years, the past 10 years have seen faster rates of decline. This has been no accident. From dietary guidelines, to checkoff’s government speech requirements, to memorandums of understanding, to sustainability objectives, dairy’s own national checkoff organization has partnered with USDA, WWF, and others to move milk in a different direction – yes, intentionally.

Meanwhile, consumers are showing a thirst to know more about milk nutrition, and they are responding by buying more whole milk even in the face of this extreme neglect and alternative direction.

Case in point. While Coca-Cola, now 100% owner of fairlife, cites double-digit growth of the its 3% market share, the USDA Class I packaged milk sales show a different perspective.

The most recent report for October shows that the “other fluid products” category had year-to-date volume growth of over 300% but amounts to just 269 million pounds (10 months) — less than one percent (0.7%) of market share.

Meanwhile, whole milk’s growth for year-to-date volume of 12.5 billion pounds comes in at just under 1% (0.9%) on 33% of market share, which makes fresh whole milk the top VOLUME gainer this year, and it has surpassed sales of 2% reduced-fat milk.

Flavored whole milk is also growing by double-digits some months, with year-to-date sales through October of 629 million pounds – up 8.9% on 1.7% market share.

Under Organic brands, whole milk sales are up 4.4% year-to-date, with 412 million pounds representing 43% of organic milk market share.

Consider this: While whole milk is prohibited in schools and daycare centers, and it goes virtually un-promoted and is often poorly stocked in the dairy case, those sales still manage to be the largest volume growth category under all of these constraints.

Innovation can be good, but the fact remains that whole milk naturally meets many of the desires consumers have even though labeling makes its fat percentage a mystery, and even though it has to overcome a low-fat and fat-free promotion campaign pitted directly against it… In the face of all of that, whole milk’s growth is not too shabby.

In short, fresh whole fluid milk has the potential to solve many of the problems it was previously blamed for in diet and health trends, and it has a ‘clean’ label and local sourcing and flavor and nutrition going for it.

Whole milk checks all the boxes.

Trouble is, if whole milk sales grow faster, then the best laid plans for using innovation and sustainability and dietary edicts to lead farmers and consumers into dairy industry structural transformation would be in jeopardy.

What can be done? What can be accomplished?

Get USDA’s attention. Get the attention of the Administration and Congress and hold industry leaders accountable for the following steps:

Federal Order price reform has never been more needed. The regulated value center is mostly on the diminishing Class I fluid milk sector. That’s a big weight to carry. Many of the innovations and reinventions of fluid milk beverages are not even Class I. Small regional entities wanting to get into the fresh fluid Class I milk market have difficulty doing so because they must – in effect — pay the cartel. Now the recent bankruptcy and potential sale of Dean Foods’ assets to DFA, suggest we could see an even bigger cartel.

In that scenario, an even larger national footprint entity would run the table, deciding how fluid milk markets will be supplied, with what product mix, and from what plants. DFA CEO Rick Smith has already indicated some Dean plants should be shut down. DFA president Randy Mooney in his address at the DMI / NMPF convention a week before the Dean bankruptcy was announced said dairy resources should be consolidated to focus on plants that “make what consumers want”, instead of having “plants on top of plants” in a region.

Add to this the push to normalize ultrafiltration in FDA standards of identity for all sectors of dairy beverage and product development and production, and we see the stage being set for meeting “sustainability” objectives by removing water from the transportation scenario and moving more milk from designated export-growth areas into the markets with higher Class I utilization at a lower cost.

In effect, this trend would use the fluid milk markets to physically and financially ‘balance’ the designated growth regions and huge protein export plants more freely — weakening the position of farms operating in those Class I utilization markets.

Transportation cost is already diluted to where it is not the equalizer it should be for regional milksheds to take local milk first. Ultrafiltration and reinvention of milk in the name of innovation is all coming from the Sustainability Council of DMI’s Innovation Center for U.S. Dairy. At a certain point, the trend – especially with the help of the world’s largest players in ultrafiltration including Coca-Cola – make location and transport even less relevant with milk’s 88% ratio of water taken out of the transport equation. These trends need full and transparent discussion instead of creeping along quietly under the mantra of “innovation” and “sustainability.”

Uphold standards of identity, not just the plant-based deal on the left hand that we are all watching so intently. While the industry talks about FDA’s milk standard vs. the imitations, the right hand is busy behind the scenes working on other dairy identity standards to make changes.

One such change is getting FDA to overlook reconstitution of milk solids with water on long-haul transport. This is a step that could enable Class I fluid milk markets to become the balancer for the huge commodity export plants that are being built in designated growth centers, and which get the make allowances built into manufacturing class prices.

Cheaper transport of excess milk – without the water — into Class I FMMOs would, and potentially is, allowing those suppliers to use eastern fluid markets as the export plant balancers.

Draw a line in the sand with a retail minimum on fluid milk. This step is necessary, at least as an interim step until the larger pricing issues have a full airing. A simple $2/gallon line in the sand certainly allows for capitalistic free markets while stopping the supermarket insanity that makes milk the Cinderella-sister that all other dairy case beverages, dairy and non-dairy, market off the back of and are free to make and keep the profit at milk’s expense.

Unless Walmart and Amazon and Kroger and others want to eat their own loss-leading decisions, themselves, they should not have the ability to price milk at $1.50, $1.15, 99 cents, 67 cents per gallon. This is crushing the supply chain and further diminishing milk’s stature.

Stop dumping skimmed milk on our kids. We’ve already lost at least one generation of milk drinkers, simply allow whole milk at schools for all the reasons that have been written about over and over in Farmshine. It’s also what is right for our kids.

Stop forcing producers to pay a checkoff tax that promotes government speech, and aligns with NGO-influenced government agendas on the future of food. At the very least, allow regions and local entities to keep and target all of their checkoff funds to promote what is made with their milk and to promote sustainable regional supply chains and food security.

Ask checkoff leaders to start promoting all milk instead of using the qualifiers “low-fat / fat-free.” Stop beating everyone over the head with the familiar “fat-free and low-fat” refrain. It’s not helping farmers, and it’s certainly not helping the health and obesity crisis, and it clouds the healthy choices consumers are able to make – once they learn the truth.

This is just a start.

 

Borden second major milk co. in 60 days to file Chapter 11

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‘Business as usual’ motions face lender objections over how cash reserve is accessed and used. Judge grants Jan. 7 ‘interim’ relief with authority to pay pre-petition ‘critical vendors’, including producers supplying milk. A hearing on the final order in regard to critical vendor payments and cash management is set for Jan. 23.

 By Sherry Bunting, Farmshine, Friday, January 10, 2020

WILMINGTON, Del. — Citing unsustainable debt, including pension funds, negative dairy industry trends, fluid milk category declines as well as margin pressure in a loss-leading, commodity-driven market, the Borden Dairy Company, based in Dallas, Texas, but organized in Delaware, became the second major fluid milk bottler in the past 60 days to file for Chapter 11 bankruptcy protection.

Unlike the November Dean Foods filing with intentions to sell assets, Borden states its intentions are to use the Chapter 11 process to restructure its business for the future.

The company seeks to combine the bankruptcy filings of its 12 affiliated milk plants and one transport company stretching from Texas to Florida and north to Ohio under Borden Dairy Holdings LLC, owned by Acon Investments LLC,which had recapitalized these assets as recently as 2017 when purchased from Laguna Dairy after they were spun off from Grupo Lala.

Processing 500 million gallons of fluid milk annually for customers including supermarkets and schools, Borden employs 3300 people at milk plants in Alabama, Florida, Georgia, Kentucky, Louisiana, Ohio, South Carolina, and Texas. Milk is supplied by dairy producers and milk cooperatives in these and other states.

In addition to licensed brands Borden and Poinsettia, other brands involved include Coburg, Dairy Fresh, Dairymens, Flav-O-Rich, Kid Builder, Saba Sunburst, Sallie’s Southern Tea, Sunburst, and Velda. DFA separately owns the Borden brand license for cheese.

In Delaware District Bankruptcy Court, Wilmington, Judge Christopher S. Sontchi heard Borden’s first day bankruptcy pleadings on January 7.

“Concurrent to the decline of the number of milk producers, dairy processers have seen bottling margins decline due to competitive pressures from milk suppliers and large (and sometimes vertically integrated) customers. Couple this with the fact that … consumption has steadily declined, and it is no surprise that Borden and other dairy suppliers (such as Dean Foods) have begun to feel the same negative effects that have plagued dairy farmers for the past decade,” said Borden Chief Financial Officer Jason Monaco in his declaration with the court.

While all expected motions were filed to allow Borden to continue ordinary business while restructuring under bankruptcy protection — including motions to use a cash deposit reserve to pay pre-petition critical vendors such as dairy producers — attorneys for unsecured creditors objected Tuesday.

The lenders argued that, “(Borden) should not, and cannot, be allowed to use chaos of their own making to distract from the clear facts. There is no economic justification for… sudden chapter 11 filings, and the debtors cannot use the lenders’ (cash) collateral to finance an attempt by Acon to re-trade the out-of-court transaction,” that the parties had previously been negotiating.

The unsecured lenders contend that the bankruptcy filing occurred virtually on the eve of their out-of-court terms being ready for signatures. They contend that the $30 million cash deposit reserve is collateral and that other cash collateral Borden seeks access for operations are “insufficient.”

Acknowledging the importance of Borden continuing operations to preserve equity for all parties, the objecting lenders seek various protections from the court, including a position of consent with some oversight of budgets for the use of cash reserve and payment to critical vendors, including milk producers.

A day earlier, Borden CEO Tony Sarsam cited major milestones for Borden last year, including the revival of its spokescow Elsie, the brand’s reintroduction in Ohio and the launch of several innovative products such as state-fair inspired milk flavors and a new Kid Builder flavored milk line using 2% milk and containing 50% more protein and calcium with no added sugar.

Sarsam also explained in a press release that the company “continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry” that have contributed to “making our current level of debt unsustainable. He said ultimately, reorganization through court-supervision was the only solution “for the benefit of all stakeholders.”

Court documents reveal that Borden reported 2018 consolidated net sales of $1.181 billion with gross profit of $292 million but experienced operational income loss of $2.6 million and total net income loss of $14.6 million. These losses continued into 2019, with reported operational income loss of $22.3 million and total net income loss of $42.4 million from January 2019 through December 7, 2019, according to court documents.

Borden maintains that its situation differs from the Dean Foods bankruptcy.

“We believe that, from an operational standpoint, we are in a much better position than Dean Foods. Borden is EBITDA-positive and growing, which means we have solid earnings and are healthy,” Sarsam said in a public statement. “Borden intends to continue operations and strengthen our position … whereas Dean Foods announced its intention to sell substantially all of its assets. We are confident that, once we fix our balance sheet, we will be equipped to win together in the market.”

Documents also note Borden’s “need to raise new investor capital” to “continue to innovate with new products, modernize our facilities and equipment and improve Borden’s ability to compete in today’s market.”

The bankruptcy process is still in preliminary stages with more than 45 items filed on the docket within the first 48 hours.

Stating that this bankruptcy reorganization will not affect dairy producer contracts, Borden announced on Jan. 5 that it fully expects business as usual and to move quickly and efficiently through the bankruptcy process.

However, on Jan. 6 and 7, unsecured lenders filed the objections to many of the motions that would allow business as usual – creating potential ripples in that scenario.

As of Wednesday afternoon, Jan. 8, a signed interim order from the Jan. 7 hearing authorizes Borden to maintain its cash systems and bank accounts and provides interim relief to pay certain pre-petition obligations, such as payments to ‘critical vendor,’ including milk suppliers.

A hearing on the final order in regard to critical vendor payments and cash management is set for Jan. 23.

In the meantime, dairy producers supplying milk to Borden plants, are advised they may need to file a proof of claim with the court to be eligible for payment or otherwise consult an attorney for guidance.

The company’s claims agent, Donlin Recano, can provide appropriate forms once a deadline for filing claims has been set by the court. For more information on that, dairy producers can call the Borden restructuring information center toll free at 1 (877) 295-7345 or e-mail bordeninfo@donlinrecano.com.

A special Borden restructuring website contains various documents, including one that answers questions for raw milk suppliers at https://www.bordenfinancialreorg.com/

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Milk education ‘heroes’: How 97 Milk came to be

AUTHOR’S NOTE: With proof of concept in place, the support of farmers and community running strong (see graphic), and the public response rewarding these efforts, there is something powerful here with the 97 Milk effort, and it is just the beginning. 

By Sherry Bunting from Farmshine, October 23, 2019

RICHLAND, Pa. — One farmer. One roundbale. And six painted words — Drink Whole Milk 97% Fat Free.

The excitement of the 97 Milk effort is contagious. What started with Nelson Troutman’s first painted roundbale in Richland, Pa., has rapidly multiplied into community-wide and nation-wide milk education efforts aimed at consumers on one hand and policymakers on the other.

Nelson Troutman placed his first “Milk Baleboard” in a pasture by an intersection.

By February, retired agribusinessman Bernie Morrissey of Robesonia found five businesses to pay for the first 1000 magnetic 12” x 12” vehicle signs with the same message. Since then, more companies have joined in and some of the original businesses have printed more.

As legislators began to take notice, Morrissey and Troutman assembled a grassroots Pa. Dairy Advisory Committee of 10 farmers that meet monthly in person or by teleconference and interact with lawmakers, including the petition effort to bring whole milk back to schools. More agribusinesses joined in to help fund their expenses.

Then, 4’ x 6’ banners were created for places of high visibility and an effort to place them at stores is underway. A September Farmshine cover story helped spread the word. Morrissey reports the banners “are going like hotcakes” with additional businesses joining in to print more.

Another effort was underway simultaneously, when Rick Stehr invited a diverse group of farmers to a February meeting in Lancaster County to talk about milk education beyond the bale. Today, the joint efforts work together like two well-oiled machines comprised solely of volunteers.

Stehr recalls getting questions back in January. He invited Morrissey to talk about the milk baleboards at R&J Dairy Consulting’s winter dairy meeting. Noted expert Calvin Covington was the keynote speaker that day, and he told the 300 dairy farmers that promotion needs to focus on domestic demand, and that “we in the dairy industry need to talk about milkfat and not hide behind it not wanting things to change. Consumers want that taste, and we’re not talking about it,” he said.

Morrissey then told the crowd about Troutman’s “Drink Whole Milk 97% Fat Free” roundbales that were just starting to multiply at farms and businesses after a cover story appeared in Farmshine.

“As I talked with non-ag people, I realized many of them didn’t know quite what it meant,” says Stehr. “I thought the missing link is education. We needed to educate the public.”

Nelson Troutman and Jackie Behr prepare for a television interview about 97 Milk.

Stehr’s daughter Jackie Behr has long believed milk sales suffer because milk education is missing. She has a marketing degree from Penn State and experience in non-ag positions before becoming R&J’s marketing manager.

Even Behr was surprised by her February focus group interviews with non-ag friends. “I was blown away by the obvious gap between dairy farms, milk nutrition and consumer perception,” she reports.

Behr shared the focus group responses at a February meeting of farmers that included Troutman. “It was an obvious eye-opener for everyone. These were educated women responding to my questions. How did we miss so much milk education all of these years?” Behr wondered.

They not only had zero knowledge of milk’s nutrition — other than calcium — their minds were full of information that was just plain false.

They said they drank organic milk because they ‘didn’t want to drink all those hormones.’ Or they chose almond beverage ‘because there are no antibiotics in it.’

“The biggest misconception is how much fat they thought was in whole milk. Just like Nelson’s been saying. And when you tell them whole milk is standardized to 3.25% fat, their response is ‘Oh, wow!’ That alone is big,” says Behr.

Her marketing savvy kicked in. Ideas for a website were kicked around with obvious choices already taken.

Then one attendee said: “How about 97 Milk?”

It fit. And it captured attention. By the second meeting, they were ready to establish 97 Milk LLC and chose a volunteer board of Lancaster County farmers Mahlon Stoltzfus, Lois Beyer, Jordan Zimmerman and Behr, with GN Hursh serving as chairman.

The website was up and running by the end of February with a Facebook page (@97Milk) that has gained more than 8,500 followers in less than eight months and a weekly average reach of over 150,000. Individual posts have reached up to 1.2 million through thousands of shares and hundreds of interactions. Twitter (@97Milk1) and Instagram (@97Milk) are also active.

Behr says it all stems from what Troutman started, and he was happy to add 97milk.com to the bales with Morrissey making sure the website appears on signs and banners.

“To get someone to change their mind, you have to get the facts in front of them,” Behr observes. “We’ve got three seconds in front of their eyes to leave information that plants a seed.”

With some content help from others, Behr comes up with ideas, designs and coordinates Facebook posts six days a week.

The result? “People are shocked and come back and say, ‘I had no idea,’” Behr explains. “I am in the industry, and even I have learned so much about milk that I didn’t know before.”

“Now that 97 Milk has become a tool used by dairy farmers to educate the public about our product, the conversations that are happening are only the beginning,” Stehr observes. “We could have 97 Milk boards across the nation.”

As interest builds, 97 Milk LLC is looking into how different geographies could have their own chapters, with the website and materials providing some continuity.

“That’s where the power is, with the producers in each community or state,” says Stehr.

He credits Troutman and Morrissey for getting everyone’s attention and believes what they are doing creates the opportunity for the ‘beyond-the-bale’ education piece carried by 97 Milk LLC.

“The word milk has been used liberally, and the understanding of what it is has been diluted,” says Stehr. “We let that happen over the past 30 years and did nothing about it. We let them bash our product. Now we are educating people that the fat in milk is not bad, that there’s not 10% or 50% fat in whole milk, but 3.25%, that there is complete protein in milk and all of these other good things.”

From the baleboards, vehicle signs, banners and communications of the grassroots Pa. Dairy Advisory Committee, to the website, social media and educational events of 97 Milk LLC, a common bond unites these efforts — Troutman’s practical courage when he painted the first roundbale because he was frustrated and had had enough.

“We have lost market share, why? Because people don’t know what milk is and they don’t know what it tastes like,” says Troutman. “By promoting whole milk, we are opening their eyes and their tastebuds.”

While national co-ops think it’s “innovative” to develop a low-fat milk and nut juice blend, those involved in 97 Milk believe the response they see from diverse consumers tells a different story.

“People want to feel good about the products they are buying. The goal of 97 Milk is to share education, to share the dairy farmers’ stories,” says Behr. “You don’t pick up health magazines and see the benefits of milk. People need to see that positive information because they don’t know what milk provides.”

The Dairy Question Desk at the website fields a steady stream of five questions per week and when social media is included, 97 Milk fields 5 to 20 questions a day.

Every one of Behr’s original focus group have switched to whole dairy milk. The experience so far shows her consumers know very little about milk and have a real willingness to learn.

“All of our messages are simple. One fact. An infographic that’s simple to understand and that people can relate to,” says Behr. “Even if we have their eyes for just three seconds scrolling through, that little seed is huge.”

The posts fill other gaps. Behr believes people want to see that dairy farmers love their cows, that they care. The baleboard sightings and “cow kisses” have poured in for posting from several states.

The posts also help consumers fulfill a desire to be connected to their food, to buy local, and to support family-owned small businesses. “The simple fact that 97% of dairy farms are family-owned is a post that generated a lot of activity,” says Behr.

While she sees the environmental discussion as being big right now, she attributes this to the vegan activists driving it. By contrast, the 97 Milk facebook data and demographics reveal that 90% of consumers really want to hear about the health benefits, according to Behr.

She gives the example of the popular “yummy yogurt” infographic posted last week. It was visually attractive and simply listed a few health benefits.

“We get a few facts out on an infographic, and if you’re kind of hungry — or a mother like me trying to find healthy snacks for my kids — it hits,” says Behr. “It’s the simple things that get milk back in and help people feel good about buying milk products.”

The support from the agriculture community, and others, has been overwhelming.

“When someone calls, who you’re not even working with, to complement the work Jackie is doing, that’s rewarding,” says Stehr.

“When you see the response of a person in your community finding out they can drink whole milk and they really like it, that’s rewarding,” says Troutman.

“When legislators hold up a sign, or want their picture taken with a baleboard and say ‘this is the best thing going in dairy right now’, that’s rewarding,” says Morrissey.

“When people write into the Dairy Desk and we can answer their questions, that’s rewarding,” says Behr. “But most rewarding is hearing the excitement, seeing dairy farmers wanting to be involved, understanding the importance of marketing and seeing the results of getting involved. Receiving a simple note thanking us for positive messages, that’s rewarding.”

97 Milk LLC raised funds from more than 20 local and national businesses (see graphic) to cover expenses for the website and printed materials, and they’ve worked with Allied Milk Producers to have milk and dairy products available for parades, corn mazes, and other venues.

Meanwhile, individuals and communities take it upon themselves to paint bales, print bumper stickers, make signs, incorporate the message into corn maze designs, hometown parades, create farm tour handouts, initiate milk tents at athletic events, and more.

Young people are enthusiastic: FFA chapters, 4-H clubs and county dairy maids are printing their own banners and carrying the message at diverse public events. They love participating because it is real milk education, sharing the truth about milk and the life and work of America’s dairy farming families.

Morrissey and Troutman get calls from other states for banners and car magnets, and they’ve sent to these states at cost. Locally, the businesses paying for printing these items are giving them away (see graphic).

Behr has also designed items with the 97 Milk website logo, cows and farm scenes. These files are on the download area at 97milk.com and can be used to make banners, yard signs, license plates, bumper stickers, educational handouts, and more.

Troutman has added new baleboards for community events, including one that reads: Ask for Whole Milk in School. He and Behr recently did a television interview with a local PBS station.

Both the grassroots Pa. Dairy Advisory Committee and the 97 Milk LLC are running on shoestring budgets from donations (see graphic) with all volunteer effort, and the grassroots are blooming where planted to multiply the impact in ways too numerous to mention.

As a glimmer of hope, fluid milk sales nationally were up 0.2% in July, the first year-over-year increase in decades, with whole milk up 3.6% and flavored whole up 10.4%. Stores surveyed in southeastern Pennsylvania, where 97 Milk began, say whole milk sales are up significantly since January. It is also notable that many stores don’t seem to be able to keep enough whole milk on the shelves — a nationally obvious phenomenon.

Also being promoted is the petition to bring whole milk back to schools. This week, the online petition ( https://www.change.org/p/bring-whole-milk-back-to-schools ) topped 8000 signatures, plus 4000 were mailed in envelopes for a first-batch delivery in Washington Oct. 24, with a second batch goal to double that by January.

Reflecting on the past 10 months, Troutman says, “I thought if they’re not going to do it, someone has to, and here I am.”

And he’s happy. “Really, I’m thankful, thankful for so many who are helping make this work.” 

To contact the grassroots Pa. Dairy Advisory Committee about banners, magnetic vehicle signs and baleboards, call Bernie Morrissey at 610.693.6471 or Nelson Troutman at 717.821.1484.

To contact 97 Milk LLC about spreading the milk education to other communities, email 97wholemilk@gmail.com or call Jackie Behr at 717.203.6777 or write to 97 Milk LLC, PO Box 87, Bird in Hand, PA 17505, and visit www.97milk.com, of course.

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Hoffman Farms: ‘We do what we can to promote milk education’

By Sherry Bunting for Farmshine Nov. 8, 2019

Tricia (Hoffman) Adams planned her educational exhibit for months ahead of a multi-county cross country meet at the farm on October 15.

SHINGLEHOUSE, Pa. — Educating the public has long been a passion of the Hoffman family at Hoffman Farms in Potter County, Pennsylvania. The school and home communities of the two generations (five families) involved in the 1000-cow dairy are on both sides of the Pennsylvania / New York boundary.

In fact, Tricia (Hoffman) Adams gave a presentation back in 2006 on how they set up the learning components of their school tours at a Women in Dairy Conference that year. Attendees were inspired to find ways to invite the community in, and the family was later recognized with a Pa. Pacesetter Award in part because of progressive operations on the farm and in part because of their commitment to educating the community about milk and dairy farms.

Today, with tours, community events, a facebook page and the next generation so involved in school clubs and sports activities — in addition to showing dairy animals and market steers and pigs — the family has become a recognized source for their community to ask questions about dairy, livestock and agriculture, in general.

Earlier this year, the Hoffmans were among the many farms painting round bales and placing them in visible areas with the Drink Whole Milk 97% Fat Free message. They have always served whole milk, along with other dairy treats, when schools and community groups tour the farm. The Baleboards drew attention and gave Tricia an opening to answer questions people didn’t even know they had!

She reports that the schoolchildren on tours last spring loved the ‘milk baleboards’ and wanted their pictures taken with the “cool” roundbales.

In fact, the 97 Milk effort has revitalized Tricia’s educational resources, she says. She and her father Dale Hoffman are also both serving on the grassroots Pennsylvania Dairy Advisory Committee.

In September, Tricia worked with two vendors — Dan Rosicka of Progressive Dairy Solutions and Country Crossroads Feed and Seed to help share the good news about whole milk. Each vendor purchased 50 of the 12-inch x 12-inch magnetic vehicle signs with the 97 Milk message and website to make available in the community.

Tricia also acquired a 4-foot x 6-foot banner as well as other materials with the 97 Milk message and milk education information.

And then she added her own flare. She had been thinking about it and working on it on-and-off since summer. The farm was hosting a multi-school championship cross-country meet in October, and she was providing the “recovery” beverages – whole milk and whole chocolate milk — and other goodies.

“I’m not one to sit around and wait for help,” says Tricia. Like other dairy producers she is frustrated with the negativity surrounding milk and meat. “I am upset that our children have to suffer in their school diets, with the lack of milk choice and the meatless days. I decided our farm will do what we can to promote the ag industry through ag education, ag awareness and ag positivity!”  

Each time Hoffman Farms is asked to donate money to a school club or a team sport, they donate dairy products instead — “with a side of education,” says Tricia.

For the North Tier League Championship Cross-Country Meet on October 15 at Hoffman Farms, Tricia set up two tents and tables. In addition to the 97 Milk banner, she had a Chocolate Milk Refuel and Recovery banner. For the “side of education,” she created a large cutout cow and numerous ‘spots’ with questions and answers.

As a farm that buys their own materials for these events and tours, Tricia feels strongly that whole milk products should be served and serves them when the events are after school or at the farm so that the schools are not jeopardized in any way due to the flawed diet rules they have to live by during school hours.

She reports that the young people (and adults) say they look forward to having “the good milk.”

“Whole chocolate milk as a recovery drink after a race, whole milk cheese sticks or toasted cheese sandwich supplies to add to a sports concession stand — whatever helps our industry and our future generation of students is what we are going to focus on,” Tricia explains.

She’ll admit that some days, “It feels like an uphill battle, but we have had many clubs, organizations and businesses wanting to help as well,” says Trica.

“At the end of the day, I’m not sure how many people will benefit or even how much I can change, but I would rather try by doing something constructive.”

Three generations are involved in the award-winning 1000-cow dairy at Hoffman Farms in Potter County, Pa. The farm was founded by Dale and Carol Hoffman with 30 cows. Today their daughter Tricia and sons Keith, Brad, and Josh have transitioned into leadership and a third generation is also involved.

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Mixed feelings prevail after Expo

There were plenty of new things to see among the 859 trade show vendors, but the trade show was down a bit from 887 businesses exhibiting a year ago. Attendance was reported at just over 62,000, down from over 65,000 a year ago and over 68,000 two years ago. International attendance at 2,133 people from 94 countries last week was off by about about 200 compared with a year ago and 500 fewer than two years ago. Photo by Sherry Bunting

By Sherry Bunting, Farmshine, Friday, October 11, 2019

MADISON, Wis. — On the business side of the 53rd World Dairy Expo last week, I came away with feelings as mixed as the weather — gloomy skies and a deluge of rain at the beginning of the week gave way to sunny skies and brisk breezes at the end.

There were plenty of new things to see among the nearly 859 trade show vendors. Annual attendance is reported at around 62,000. U.S. and international attendance did appear to be down from previous years. 

For many, the first three days of the show felt slow in comparison even to last year. Some observed that the steep loss of family farms over the past 18 months was “being felt” at Expo.

Some pointed to the weather as heavy rains produced flooding Tuesday into Wednesday. 

Others blamed the discouraging — and twisted — headlines that came out of a town hall meeting with U.S. Secretary of Agriculture Sonny Perdue at the start of the week. The town hall was attended by around 200 dairy farmers, agribusiness representatives and organization leaders, along with dozens of reporters and television cameras.

What followed the hour of honest and detailed discussion (reported here as in Farmshine last week) were press accounts that warped Sec. Perdue’s comments and went viral through the wire services, starting with the Washington Post and Chicago Tribune and continuing into various agricultural press.

By Thursday, Wisconsin Farmers Union had sent op-ed responses to high profile news outlets, taking on the Secretary for his supposed comments about how we supposedly do things in America.

The stage was effectively set to cast the current Trump administration as purveyors of a factory farm model, attributing to the Secretary a proclamation that, “In America, the big get bigger and small get out.” This is now playing right into the hands of Democratic presidential hopefuls who are pal-ing around with HSUS in the Midwest, pretending to care about cows, farms and fly-over country.

Well, maybe some Democrats do care, but we know HSUS does not, and we know what the purveyors of the Green New Deal think of our cows. That’s another story.

Trouble is, the Secretary never said the words that have started this chain reaction. Or, at least, not in the order in which his words were parsed together in print.

You see, many other words were omitted. Context is everything.

From the sidelines and super busy with other pursuits at the Expo — but having attended the town hall meeting in person and having written my own coverage of the event in last week’s Farmshine — I began to see the headlines erupting on social media as share upon share made the news travel rapidly from Tuesday into Wednesday and then it was off to the races.

I began wondering how I could have missed such a derogatory comment. And I learned by Friday that, no, my notebook and partial recording had not failed me. Full transcripts were released by other reporters — providing that important context.

Transcripts showed clearly that the offending quote from Sec. Perdue was pulled from a very long and detailed response to a question and spliced together to make new statements. Not only is context everything, so is punctuation.

Too late, the discouraging and depressing headlines continued to beat small and mid-sized family farmers over the head all week. They began to feel as though even the USDA could care less about their survival – wanted them gone in fact to make way for “factory farming.”

The narrative was discouraging and many farmers confessed to me just how it made them feel. Several said reading those words made them feel like – why bother even going to Expo?

“Stick a fork in us. We’re done, according to Perdue,” a Wisconsin dairy farmer said to me Thursday.

Bad enough that the headlines erupted after Tuesday’s town hall were discouraging. Worse, that they were false in what they signaled to family farms. But there is also much truth in Sec. Perdue’s observation. He was describing “what we’ve seen in America,” not making a proclamation of how things will be done in America.

And the advancements in science and technology ARE what we have seen in America. Yes, they help smaller farms too, but it is science and technology that are contributing to the progress that is allowing rapid consolidation to take place.

For the record, I am pro-science and pro-technology and pro-innovation. But I also believe we are at a crossroads where it has gone so fast and so far, that we need to walk back and look at outcomes and impact and have a national conversation.

Just one day after the Expo closed, Land O’Lakes CEO Beth Ford and member farms like Dotterer’s Dairy, Mill Hall, Pa. were on CBS 60-minutes talking about how high-tech dairy is today and the market challenges being faced by dairy farmers at the same time.

The twisted quotes from Tuesday’s dairy town hall meeting at Expo gave the impression that Trump’s USDA is proclaiming a factory farm model for the future of agriculture. In a sense, as we embrace rapid technological advancement, we are embracing that transition. These are inescapable facts that must be sorted out and dealt with.

The Secretary was merely observing the reality of what has been happening in America’s rural lands with increasing speed over the past decade.

While some of Perdue’s specific answers to specific questions were disappointing and other responses were encouraging, none of those specifics were reported elsewhere with any attention. All attention was placed on the twisted quote.

We have a Secretary who can see what is happening and who can have an honest discussion about it, while being pragmatic about what the potential solutions are that can be accomplished without the help of a paralyzed Congress.

No matter what we think of Dairy Margin Coverage, it was put in place to help smaller farms withstand these difficult times and figure out their place in the future. That’s just reality.

At the same time, what was lost in those press reports is we have a Secretary that at least took time to cheer-lead for the small and mid-sized family farms by using his bully pulpit to advocate for whole milk in schools. No one picked up on that, except for Farmshine.

Perdue also touted “local” food as a way to bring value back to farms. I haven’t seen any other press reports talk about that.

Most reporters ignored those thoughts. They also ignored the fact that the stage for the rapid consolidation in dairy — that is occurring today — was set 10 years ago under former Secretary of Agriculture Tom Vilsack, who today has his salary paid by dairy farmers through their mandatory checkoff as president and CEO of the U.S. Dairy Export Council and defacto leader of the Innovation Center for U.S. Dairy that is streamlining “U.S. Dairy” through various checkoff funded innovations and programs.

Think about this for a moment: U.S. dairy has progressed with technological advancements that are unparalleled in the world. American farmers have always looked to technology and to the future to produce food for the growing population and to be good stewards of the land.

It is the love of science and technology – along with the love of cows — that draws throngs of U.S. and international visitors to the World Dairy Expo each year. They want to see what’s new. They want to learn from each other. They want to make progress to do more with less.

Technology allows farmers to do more with less. That has meant producing more food from fewer cows. At some point it also means producing more food from fewer farms.

Perhaps it is time to not just praise science and technology with the eagerness of children on Christmas morning, but to have an honest conversation about where science and technology are leading the food industry. 

Sec. Perdue was not very well informed when it came to the topics of fake meat and fake milk that are ramping up through USDA science and technology into cell-cultured and DNA-modified yeast factory vats and bioreactors. Instead of talking about factories replacing farms, he stated that “consumers will choose”, and he said currently those who are choosing fake meat and fake milk aren’t consuming the real stuff anyway.

That was the short-sighted comment that raised my eyebrow, not the parsed-together quote about big and bigger.

It’s time to dig into the structure of things.

Perhaps the real concern and conversation to be addressed is the structures and alliances that have been formed over the past 10 years as they are now coming to light. In former Secretary Vilsack’s talk at Expo about exports and dairy innovation, and in DMI’s workshop about what’s on the horizon, my initial impressions are that we are at a place where the industry is speeding up innovation and wanting more latitude on standards of identity at a time when we should be saying: “let’s push pause please.” 

The race to feed the world has produced immeasurable waste and loss already, will it now change the face of agriculture forever?

Where is science and technology supportive for the family fabric that has made our food production the envy of the world? And where is science and technology promoting a path that leads us away from that model of food production to take it out of the hands of many families enriched by competitive markets and put it into the new emerging models of fewer hands, consolidated markets and lack of competition.

Don’t blame Secretary Perdue for these wheels that have been in motion. Don’t expect the government to solve it. But what we can do is have the honest conversation, ask the questions, hold leaders accountable, and move the needle far enough to provide a more level field of play for the small and mid-sized family farms. 

You can count on Farmshine to break away from the narratives on both sides of this thing to do exactly that.

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