Dairy checkoff is ‘negotiating’ your future: Train wreck ahead. Stop the train. Correct the track. (DMI Net Zero – Part One)

By Sherry Bunting, Farmshine, Sept. 16, 2022

Dairy farmers are being used without regard. Their future ability to operate is right now being negotiated, and they are paying those negotiators through their 15-cents-per-hundredweight mandatory checkoff with no idea how the negotiations will ultimately affect their businesses and way of life.

Inflated baselines and an inflated methane CO2 equivalent assigned to cows is setting the stage for a head-on collision, a train wreck on the misaligned track laid by DMI’s Innovation Center for U.S. Dairy.

In fact, the Net Zero Initiative has been designed to help everyone but the dairy farmer. It sets up a methane money game for carbon traders at the expense of those dairy farms that have long been environmentally conscious with no-till, cover crops, grazing, and other practices already on their farms.

Such farms will be of no use in what is shaping up to be a focus on harvesting reductions, not attaining neutrality, in DMI’s Net Zero Initiative (NZI).

Small and mid-sized dairy farms that are already at or near carbon-neutral could show smaller reductions for the industry to harvest. 

Conversely, the largest dairies installing the newest biogas systems are realizing even this route could become a dead-end because the credits are signed over and sold for big bucks, a few bucks get kicked back to the dairy, but the methane capture becomes the property of other industries outside of the dairy supply chain.

If the industry does not act now to stop the NZI train for a period of re-examination, adjustment and correction, then the current trajectory may actually move food companies clamoring for reductions ever closer to alternatives and analogs that boast their climate claims solely on the fact that they are produced without cows.

This is a big money game that is operating off the backs of our cows, and the checkoff has been at best complicit as a driver.

RNG (renewable natural gas) operators are signing up large (3000+ cows) dairies left and right for digesters and covered lagoons to capture methane piped to clustered scrubbing facilities to be turned into renewable fuel for vehicles or electricity generation. Meanwhile dairy protein analogs are being created without cows by ‘precision fermentation’ startups partnering with the largest global dairy companies.

In turn, millions if not billions of dollars in carbon credits are generated while farmers and their milk buyers will be left figuring out how to show their reductions when they are left holding the inflated methane bag.

Six organizations, four of them non-profits under the DMI umbrella, officially launched the Net Zero Intitiative (NZI) in the fall of 2019, five months after Ag Secretary Tom Vilsack made headlines talking about it in a Senate hearing while he was pulling down a million-dollar salary as a DMI executive in 2018.

NZI is the proclaimed vehicle for negotiating the terms for U.S. Dairy to continue, terms based on showing carbon reductions that many family farms may find difficult to meet — especially if the farm is already at or close to carbon neutral.

As DMI’s sustainability negotiators data-collect all previous reductions into farm-by-farm comprehensive baseline estimates, where will those farms find new reductions? 

According to DMI staff, over 2000 dairy farms have already gone through their environmental stewardship review via the FARM program to establish their “comprehensive estimates.”

The six organizations, four of them filing IRS 990s under the national dairy checkoff, that launched NZI are: Dairy Management Inc. (DMI), Innovation Center for U.S. Dairy, U.S. Dairy Export Council (USDEC) and Newtrient, along with the other two organizations being National Milk Producers Federation (NMPF), and International Dairy Foods Association (IDFA).

They have collectively bought-into the global definition that inflates the CO2 equivalent used for methane, effectively committing the cow to perpetual GHG purgatory. 

Because the NZI structure is based on continually showing GHG reductions, no farm is insulated with a get-out-of-jail-free-key — not even the largest farms with the most advanced biogas systems.

Why haven’t checkoff funds been used to defend the cow – to get the numbers right, to get the current practices farmers have invested in counted toward reductions not baselines, and to get the methane CO2 equivalent correct — instead of giving in to this notion that feels an awful lot like ‘cows are bad and we are committed to making them better?’

Perhaps it was ignored or embraced because this inflated methane CO2 equivalent gives the suite of tech tools being assembled by DMI’s Newtrient a bigger runway to show reductions — a money maker for the RNG biogas companies and others that will in many cases end up owning the carbon credits after paying the farmer a nominal fee. 

Carbon trading rose 164% last year to $851 billion, according to a Reuters January 2022 report. A big chunk of this is coming from the methane capture and fossil fuel replacement of RNG biogas projects, mostly in California but popping up elsewhere at a rapid rate and mostly traded on the California exchange.

Farmers are getting some money for these projects, but they don’t own the carbon credits once they are sold or signed over. When they are sold outside of the dairy supply chain, this reduction becomes someone else’s property, so it is no longer part of the dairy farm’s footprint nor the footprint of their milk buyer. 

Likewise, this inflated methane equivalent — along with the emphasis on reductions, not neutrality — has some processors wondering if they’ll be able to come up with the Scope 3 reductions they need in ESG scoring.

They are facing upstream pressure from retailers and consumer packaged goods (CPG) companies as well as asset managers to show reductions, and they have counted on big numbers from their Scope 3 suppliers, the dairy farms.

The problem for dairy processors and dairy farmers comes down to the central definitions of methane equivalent and carbon asset ownership — the rights of farmers to own their past, present and future reductions, whether or not they’ve signed them over as offsets to a milk buyer or a project investor and whether or not they’ve sold the resulting credits on a carbon exchange, and whether or not they’ve installed new practices that are now part of a baseline but represent a new investment every year as they operate their businesses.

Back in June, the American Dairy Coalition added this concern to their list of federal milk pricing priorities because of the impact this climate and carbon tracking will have on milk buying and selling relationships and contracts — and the lack of clarity or fairness in this deal for essential food producers at the origination point that is closest to nature, the farm. 

ADC worded their “carbon asset ownership” priority this way: “No matter where a dairy farm’s milk is processed, that farm should be able to retain 100% ownership at all times of its earned and achieved carbon assets, even if this information is shared with milk buyers to describe the resulting products that are made from the milk.”

For its part, IDFA took a swing last Friday, going one step farther to recommend global accounting methods that would allow the dairy supply chain (farmers and processors) to retain carbon credits even if they are sold on a carbon exchange or signed over to an asset company that invested in an on-farm technology. 

IDFA executives penned the Sept. 9 opinion piece in Agri-Pulse laying out the concerns of their members who are starting to realize the future consequences of the rapid and inflated monetization of methane — and the race to sell carbon credits — leaving dairy processors unable to get those credits they were counting on from the farms that supply them with milk, while at the same time being stuck facing the cow’s inflated methane CO2 equivalent in their downstream Scope 3 even while they try to get reductions in their own controlled areas of Scopes 1 and 2.

When dairy farms no longer own their reduction or cannot show a large reduction because they are already virtually neutral, processors become concerned about how they will gain the Scope 3 reductions that are part of the ESG scoring the large retailers and global food companies are pushing. 

All of this has come down through the non-governmental organizations like World Wildlife Fund (WWF), investment and asset management sector via the World Economic Forum (WEF), the global corporate structures through the Sustainability Roundtable and through government entities via the United Nations Agenda 2030. DMI has been at those tables for at least 14 years.

“It is becoming clearer every day that the global accounting standards underpinning GHG measurement and reporting are biased against the very people making the (GHG) reductions,” the IDFA executives wrote in their opinion.

In other words, while some farmers are beginning to profit from GHG-reducing practices that are turned into offsets and traded on the carbon markets, the system is tilted against them because it leaves them without the offsets they traded and leaves them in a position of having to continually reduce in order to secure a position in the value chain.

IDFA points out that under the current rules, once the offset is sold outside of the value chain as a carbon credit – it is gone. The current GHG accounting system says only the buyer of that reduction can claim ownership.

Those farms can no longer claim their own reduction, and it means the company buying milk or other commodities from a producer cannot integrate the reduction into the description of their final product.

This weakens U.S. Dairy, the IDFA opinion states, and it makes dairy farmers less competitive sources of pledge-meeting carbon reductions for retailers and manufacturers – setting real dairy up for fake dairy dilution with the inclusion of whey proteins and other pieces of milk that are being produced in fermentation vats by genetically modified yeast, fungi and bacteria, as well as other analogs.

A bigger problem not mentioned in the IDFA opinion may be the inflated baselines that leave farms that have implemented best practices years ago positioned to show smaller reductions.

While the American Farm Bureau earlier this year lobbied against proposed SEC accounting intrusions for quantifying ESG scoring, it has been silent on the issue of carbon asset ownership for food producers. AFBF has also said little about the recently signed climate bill (Inflation Reduction Act).

National Milk Producers Federation, on the other hand, as reported last week, sang its praises for being right in line with where the industry’s Net Zero Initiative is going.

DMI voices its pride to have been leading the way, positioning its Innovation Center as founded by dairy farmers. They have conceded that dairy farms impact the environment and launched NZI as a collective pledge to reduce that impact.

In other words, DMI submitted to the idea that cows impact the environment, but never fear, through NZI, the Innovation Center and Newtrient, farmers will make them better, and turn them into a climate solution.

This is a fool’s errand given the inflated methane equivalent and the movement of carbon reductions to entities outside of the dairy supply chain such as paper mills, bitcoin miners, and the fossil fuel industry.

Did dairy farmers have a say in any of this? Not really. They were kept in the dark as this was developed over the past decade or more, and the boards representing them on the six organizations that launched NZI (four of them under the checkoff umbrella) have been duped.

Farmers are largely unaware of the NZI train, and their silence as it runs down the track becomes a further signal to the industry and to the government that they approve of the track they are on.

As the industry sits at this crossing, the Net Zero train full of dairy farmer passengers is barreling high speed down the track DMI has laid.

This train must be stopped because the future-bound track needs to be re-examined, adjusted and re-aligned so that the passengers are not ejected by the train wreck – the accelerated consolidator — that lies ahead.

Fundamentals must be vigorously revisited. Every passenger on that train, every dairy farm, must be recognized as an essential food producer, get credit for their prior investment in current practices, and be able to retain ownership of their carbon assets as part of their farm’s footprint — even if these assets have been provided, sold or signed over as offsets to milk buyers or project investors or traders on an exchange.

Furthermore, this train – built with farmer dollars – should protect the so-called founding farmers from being denied a market based on the size of their GHG reductions. If a carbon neutral farm can’t show reductions to its milk buyer, will that buyer look for other downstream vendors who can fulfill their Scope 3 reduction needs?

Will those vendors be other farms with larger perceived GHG reductions or will they be alternative analogs created without cows?

Nestle announced this week it is partnering with Perfect Day toward that end. In fact, the proliferation of plant-based, cell cultured, DNA-altered microbe excrement analogs for dairy protein and other elements are entering the market on big GHG reduction claims based on being made without the cow and the inflated methane CO2 equivalent she has been assigned!

The current standard for methane CO2 equivalency is inflated by orders of magnitude. Dr. Frank Mitloehner has addressed this repeatedly and other researchers back his view with efforts to change it.

As Mitloehner and others point out, climate neutrality should be the goal, not net-zero. Furthermore, the current methane CO2 equivalent is calculated based only on the much greater warming effect of methane vs. CO2. However, the current calculation does not account for the fact that methane is short-lived in Earth’s atmosphere — about 10 years compared with 100 to 100 years for CO2 and other GHG. It also does not account for the cow’s role in the biogenic carbon cycle.

Remember, DMI and company have ignored or embraced this definition. At the same time, the Innovation Center’s data collection of progressive accomplishments are included in the baselines from which new reductions (opportunities) must be found.

These two trains run in opposite directions for a future head-on collision on a mis-aligned track. 

The bigger the perceived GHG problem, the bigger the reduction through technology, and the bigger the monetization of that reduction outside of the dairy supply chain. At the same time, this creates an even bigger problem for farms that are unable to participate in biogas projects, farms that don’t fit the Innovation Center’s 3500-cow-dairy-as-solution template, farms that may be carbon neutral or close to it already.

DMI and company have played fast and loose with the truth. 

Farmshine readers will recall the glaring error reported more than a year ago in the white paper written by WWF for DMI. It showcased these biogas projects and the 3500-cow dairy template it proclaimed could be Net Zero in five years, not 30. 

That paper inflated U.S. Dairy’s total GHG footprint by an order of magnitude! A Pennsylvania dairy farmer brought the error to Farmshine’s attention. In turn, the magnitude of the error was confirmed by Dr. Mitloehner who then contacted DMI. A corrected copy of the white paper magically replaced all internet files with no discussion from DMI or WWF. That number was changed, but all of the assumptions in the paper were left as-is.

Put simply: DMI does not appear to be concerned about inflating the size of dairy’s perceived GHG problem. The bigger the perceived problem, the bigger the reduction that can be monetized, but that is now happening outside of the dairy supply chain. 

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Are we moving toward cow islands and milk deserts?

Opinion/Analysis

By Sherry Bunting, Farmshine (combined 2 part series Aug. 12 and 19, 2022)

In Class I utilization markets, the landscape is rapidly shifting, and we should pay attention, lest we end up with ‘cow islands’ and ‘milk deserts.’

Farmshine readers may recall in November 2019, I wrote in the Market Moos column about comments made Nov. 5 by Randy Mooney, chairman of both the DFA and NMPF boards during the annual convention in New Orleans of National Milk Producers Federation together with the two checkoff boards — National Dairy Board and United Dairy Industry Association. 

Mooney gave a glimpse of the future in his speech that was podcast. (Listen here at 13:37 minutes). He said he had been “looking at a map,” seeing “plants on top of plants,” and he urged the dairy industry to “collectively consolidate,” to target limited resources “toward those plants that are capable of making the new and innovative products.”

One week later, Dean Foods (Southern Foods Group LLC) filed for bankruptcy as talks between Dean and DFA about a DFA purchase were already underway. It was the first domino right on the heels of Mooney’s comments, followed by Borden filing Chapter 11 two months later in January, and followed by three-years of fresh fluid milk plant closings and changes in ownership against the backdrop of declining fluid milk sales and an influx of new dairy-based beverage innovations, ultrafiltered and shelf-stable milk, as well as lookalike alternatives and blends.

The map today looks a lot different from the one described by Mooney in November 2019 when he urged the industry to “collectively consolidate.” The simultaneous investments in extended shelf-life (ESL) and aseptic packaging are also a sign of the direction of ‘innovation’ Mooney may have been referring to.

Two months prior to Mooney issuing that challenge, I was covering a September 2019 industry meeting in Harrisburg, Pennsylvania, where dairy checkoff presenters made it clear that the emphasis of the future is on launching innovative new beverages and dairy-‘based’ products.

Here is an excerpt from my opinion/analysis of the discussion at that time:

“While we are told that consumers are ditching the gallon jug (although it is still by far the largest sector of sales), and we are told consumers are looking for these new products; at the same time, we are also told that it is the dairy checkoff’s innovation and revitalization strategy to ‘work with industry partners to move consumers away from the habit of reaching for the jug and toward looking for these new and innovative products’ that checkoff dollars are launching.”

These strategy revelations foreshadowed where the fluid milk markets appear to be heading today, and this is also obvious from recent Farmshine articles showing the shifting landscape in cow, farm, and milk production numbers.

When viewing the picture of the map that is emerging, big questions come to mind:

Are today’s Class I milk markets under threat of becoming ‘milk deserts’ as the dairy industry consolidates into ‘cow islands’?

Would dairy farmers benefit from less regulation of Class I pricing in the future so producers outside of the “collectively consolidating” major-player-complex are freer to seek strategies and alliances of their own, to carve out market spaces with consumers desiring and rediscovering fresh and local, to put their checkoff dollars toward promotion that helps their farms remain viable and keeps their regions from becoming milk deserts? 

What role is the industry’s Net Zero Initiative playing behind the scenes, the monitoring, scoring, tracking of carbon, the way energy intensity may be viewed for transportation and refrigeration and other factors in Scope 1, 2 and 3 ESG (Environment, Social, Governance) scores? 

Shelf-stable milk may provide solutions for some emerging (or are they self-inflicted?) milk access and distribution dilemmas, and maybe one view of ESG scoring favors it? But ultimately it also means milk can come from cow islands to milk deserts — from anywhere, to anywhere.

It also becomes clearer why the whole milk bill is having so much trouble moving forward. The industry machine gives lip-service support to the notion of whole milk in schools, but the reality is, the industry is chasing other lanes on this highway to ‘improve’ the school milk ‘experience’ and ensure milk ‘access’ through innovations that at the same time pave the road from the ‘cow islands’ to the ‘milk deserts.’ 

It is now clearer — to me — why the Class I mover formula is such a hotly debated topic. 

If major industry-driving consolidators are looking to transition away from turning over cow to consumer fresh, local/regional milk supplies by turning toward beverage stockpiles that can sit in a warehouse ‘Coca-Cola-style’ at ambient temperatures for six to 12 months, it’s no wonder the consolidators want the ‘higher of’ formula to stay buried. What a subversion that was in the 2018 Farm Bill.

In fact, if the industry is pursuing a transition from fresh, fluid milk to a more emphasis on shelf-stable aseptic milk, such a transition would, in effect, turn the federal milk marketing orders’ purpose and structure — that is tied to Class I fresh fluid milk — completely upside down.

Landscape change has been in motion for years, but let’s look at the past 6 years — Dean had already closed multiple plants and cut producers in the face of Walmart opening it’s own milk bottling plant in Spring 2018. The Class I ‘mover’ formula for pricing fluid milk — the only milk class required to participate in Federal Milk Marketing Orders — was changed in the 2018 Farm Bill that went into effect Sept. 2018. The new Class I mover formula was implemented by USDA in May 2019, resulting in net losses to dairy farmers on their payments for Class I of well over $750 million across 43 months since then.

(Side note: Under the formula change, $436 million of Class I value stayed in processor pockets from May 2019 through October 2019, alone. DFA purchased 44 Dean Foods plants in May 2019 and became by far the largest Class I processor at that time.)

These and other landscape changes were already in motion when Mooney spoke on Nov. 5, 2019 at the convention of NMPF, NDB and UDIA describing the milk map and seeing plants on top of plants and issuing the challenge to “collectively consolidate” to target resources to those plants that can make the innovative new products. 

One week later, Nov. 12, 2019, Dean Foods filed for bankruptcy protection to reorganize and sell assets (mainly to DFA).

Since 2019, this and other major changes have occurred as consolidation of Class I milk markets tightens substantially around high population swaths, leaving in wake the new concerns about milk access that spur the movement toward ESL and aseptic milk. A chain reaction.

What does Mooney’s map look like today after his 2019 call for “collective consolidation” and the targeting of investments to plants that can make the innovative products, the plants that DMI fluid milk revitalization head Paul Ziemnisky told farmers in a 2021 conference call were going to need to be “dual-purpose” — taking in all sorts of ingredients, making all sorts of beverages and products, blending, ultrafiltering, and, we see it now, aseptically packaging?

In addition to the base of Class I processing it already owned a decade ago, the string of DFA mergers has been massive. The most recent acquisitions, along with exits by competitors, essentially funnel even more of the market around key population centers to DFA with its collective consolidation strategy and investments in ESL and aseptic packaging.

The South —

The 14 Southeast states (Maryland to Florida and west to Arkansas) have 29% of the U.S. population. If you include Texas and Missouri crossover milk flows, we are talking about 37% of the U.S. population. 

The major players in the greater Southeast fluid milk market include DFA enlarged by its Dean purchases, Kroger supplied by Select and DFA, Prairie Farms with its own plants, DFA and Prairie Farms with joint ownership of Hiland Dairy plants, Publix supermarkets with its own plants, an uncertain future for four remaining Borden plants in the region as Borden has exited even the retail market in some of these states, and a handful of other fluid milk processors. 

In Texas, alone, DFA now owns or jointly owns a huge swath of the fluid milk processing plants, having purchased all Dean assets in the Lone Star State in the May 2020 bankruptcy sale and now positioned to gain joint ownership of all Borden Texas holdings through the announced sale to Hiland Dairy

The Midwest — 

Just looking at the greater Chicago, Milwaukee, Green Bay metropolis, the population totals are a lake-clustered 6% of U.S. population. Given the recent closure by Borden of the former Dean plants in Chemung, Illinois and De Pere, Wisconsin, this market is in flux with DFA owning various supply plants including a former Dean plant in Illinois and one in Iowa with Prairie Farms having purchased several of the Dean plants serving the region.

In the Mideast, there is Coca Cola with fairlife, Walmart and Kroger among the supermarkets with their own processing, and DFA owning two former Dean plants in Ohio, two in Indiana, two in Michigan, and a handful of other bottlers. 

In the West: DFA owns a former Dean plant in New Mexico, two in Colorado, two in Montana, one in Idaho, two in Utah, one in Nevada and one in California, as well as other plants, of course. 

The Northeast —

This brings us to the Northeast from Pennsylvania to Maine, where 18% of the U.S. population lives, and where consolidation of Class I markets, especially around the major Boston-NYC-Philadelphia metropolis have consolidated rapidly against the backdrop of declining fluid milk sales and a big push by non-dairy alternative beverage launches from former and current dairy processors.

DFA owns two former Dean plants in Massachusetts, one in New York, all four in Pennsylvania, one in New Jersey. The 2019 merger with St. Alban’s solidified additional New England fluid milk market under DFA. In 2013, DFA had purchased the Dairy Maid plant from the Rona family in Maryland; in 2014, the prominent Oakhurst plant in Maine; and in 2017, the Cumberland Dairy plant in South Jersey.

More recently, DFA struck a 2021 deal with Wakefern Foods to supply their Bowl and Basket and other milk, dairy, and non-dairy brands for the various supermarket chains and convenience stores under the Wakefern umbrella covering the greater New York City metropolis into New Jersey and eastern Pennsylvania. This milk had previously been supplied by independent farms, processed at Wakefern’s own iconic Readington Farms plant in North Jersey, which Wakefern subsequently closed in January 2022.

The long and twisted tale begs additional questions:

As Borden has dwindled in short order from 14 plants to five serving the most populous region of the U.S. – the Southland — what will happen with the remaining five plants in Ohio, Kentucky, Georgia, Louisiana, and Florida? What will become of Elsie the Cow and Borden’s iconic brands and new products?

What percentage of the “collectively consolidated” U.S. fluid milk market does DFA now completely or partially own and/or control?

Will the “collective consolidation” in the form of closures, sales and mergers continue to push shelf-stable ESL and aseptic milk into Class I retail markets and especially schools… and will consumers, especially kids, like this milk and drink it?

What role are rising energy prices, climate ESG-scoring and net-zero pledges and proclamations playing in the plant closures and shifts toward fewer school and retail milk deliveries, less refrigeration, more forward thrust for shelf-stable and lactose-free milk, as well as innovations into evermore non-dairy launches and so-called flexitarian blending and pairing?

Looking ahead at how not only governments around the world, but also corporations, creditors and investors are positioning for climate/carbon tracking, ESG scoring and the so-called Great Reset, the Net Zero economy, there’s little doubt that these factors are driving the direction of fluid milk “innovation” over the 12 years that DMI’s Innovation Center has coordinated the so-called ‘fluid milk revitalization’ initiative — at the same time developing the FARM program and the Net Zero Initiative.

The unloading of nine Borden plants in five months under Gregg Engles, the CEO of “New Borden” and former CEO of “Old Dean” is also not surprising. Engles is referred to in chronicles of dairy history not only as “the great consolidator” but also as “industry transformer.”

In addition to being CEO of Borden, Engles is chairman and managing partner of one of the two private equity investment firms that purchased the Borden assets in bankruptcy in June 2020. Investment firms fancy themselves at the forefront of ESG scoring.

Engles is also one of only two U.S. members of the Danone board of directors. Danone, owner of former Dean’s WhiteWave, including Silk plant-based and Horizon Organic milk, has positioned itself in the forefront on 2030 ESG goals, according to its 2019 ‘one planet, one health’ template that has also driven consolidation and market loss in the Northeast. 

Not only is Danone dumping clusters of its Horizon milk-supplying organic family dairy farms, it continues to heavily invest in non-dairy processing, branding, launching and marketing of alternative lookalike dairy products and beverages, including Next Milk, Not Milk and Wondermilk. 

There is plenty of food-for-thought to chew on here from the positives to the negatives of innovation, consolidation, and climate ESGs hitting full-throttle in tandem. These issues require forward-looking discussion so dairy farmers in areas with substantial reliance on Class I fluid milk sales can navigate the road ahead and examine all lanes on this highway that appears to be leading to cow islands and milk deserts.

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More Borden plants close under ‘great consolidator’ Gregg Engles

Checkoff cites ‘uncontrollable circumstances’  bringing shelf-stable milk to schools

With an uncertain future for five remaining Borden plants after five plant closures, one partial closure (Class I) and three sell-offs since April, what does the future hold for fluid milk markets in the South and the iconic Elsie? Screen capture, bordendairy.com

By Sherry Bunting, Farmshine, Aug. 12, 2022

DALLAS, Tex. — Last week, yet another round of plant closures was announced by Borden, well-timed as a factor said to be driving shelf-stable milk into schools and other venues in affected regions like the Southeast; however, an industry “innovation” shift to the convenience, “experience ” and reduced deliveries (carbon/energy cost and intensity) said to be associated with lactose-free extended shelf-life and aseptically-packaged milk has been gradually in the making for months, if not years.

The Dallas-based Borden, owned by two private equity firms, will close fluid milk plants in Dothan, Alabama and Hattiesburg, Mississippi “no later than Sept. 30, 2022, and will no longer produce in these states,” the company said.

The Aug. 3 announcement represents Borden’s fifth and sixth plant closures in as many months.

A string of sell-offs and closings since April have occurred under “the great consolidator” — former Dean Foods CEO Gregg Engles. Engles has been CEO of ‘new Borden’ since June 2020, when his Capital Peak Partners, along with Borden bankruptcy creditor KKR & Co., together purchased substantially all assets to form New Dairy OpCo, doing business as Borden Dairy.

“While the decision was difficult, the company has determined that it could no longer support continued production at those locations,” Borden said in the Aug. 3 statement that was virtually identical to the statement released April 4 announcing previous closures of its Miami, Florida and Charleston, South Carolina plants by May 31, including a stated withdrawal from the South Carolina retail market as well.

In addition to ending fluid milk processing at six of its 14 plants — four in the Southeast, two in the Midwest — Borden announced in late June its plans to sell all Texas holdings to Hiland Dairy, including three plants in Austin, Conroe and Dallas, associated branches and other assets.

Hiland Dairy, headquartered in Kansas City, Missouri, is jointly owned by the nation’s largest milk cooperative Dairy Farmers of America (DFA), headquartered in Kansas City, Kansas, and Prairie Farms Dairy, a milk cooperative headquartered in Edwardsville, Illinois that includes the former Wisconsin-based Swiss Valley co-op.

DFA already separately owns the Borden brand license for cheese.

Also in June, Borden announced an end to fluid milk operations in Illinois and Wisconsin at two former Dean plants the company purchased jointly with Select Milk Producers in June 2021 after a U.S. District Court required DFA to divest them.

Borden closed the Harvard (Chemung Township), Illinois plant in July, and local newspaper accounts note the community is hopeful a food processing company other than dairy will purchase the FDA-approved facilities. Borden also ceased bottling at De Pere, Wisconsin on July 9, but continues to make sour cream products at that location.

The combined plant closures and sales by Borden now stand at nine of the 14 plants, leaving an uncertain future for the remaining five plants in Cleveland, Ohio; London, Kentucky; Decatur, Georgia; Lafayette, Louisiana; and Winter Haven, Florida. The sales and closures, including announced withdrawals from some markets, having combined effects of funneling more market share to DFA and to some degree Prairie Farms and others against a backdrop of additional Class I milk plant closures and reorganizations during the 24 months since assets from number one Dean and number two Borden were sold in separate bankruptcy filings.

“Borden products have a distribution area which covers a wide swath of the lower Southeast, including the Gulf’s coastal tourist areas. The Dutch Chocolate is a favorite of milk connoisseurs, and their recent introductions of flavored milks have received great reviews,” an Aug. 6 Milksheds Blog post by AgriVoice stated. A number of Georgia, Tennessee, Alabama and Mississippi farms may be affected by the most recent closures.

Meanwhile, the closures are affecting milk access for schools and at retail. According to its website, Borden serves 9,000 schools in the U.S.  

A random sampling of the many Facebook-posted photos by individuals from northern Illinois to Green Bay, Wisconsin from July 15 to the present after Borden and Select closed two former Dean plants in Illinois and Wisconsin that they jointly purchased from DFA in June 2021. Screen capture, Facebook

In recent weeks, photos have been circulating of empty dairy cases in the Green Bay, Milwaukee and greater Chicago region with signs stating: “Due to milk plant closures, we are currently out of stock on one gallon and half gallons of milk.”

School milk contracts in that region are also reportedly impacted.

However, most notable is the impact on school milk contracts in the Southeast as students begin returning to classrooms.

According to the Aug. 5 online Dairy Alliance newsletter to Southeast dairy farmers, the regional checkoff organization confirmed the latest round of Borden closures are plants that “currently provide milk to 494 school districts… and use around 95 million units a school year.”

The Dairy Alliance reported it is working with schools “to keep milk the top choice for students… We do not want schools to apply for an emergency waiver that would exempt them from USDA requirements of serving milk until they find a supplier.

“These uncontrollable circumstances will lead to more aseptic milk in the region, but this is better than losing milk completely in school districts that have little or no options,” the newsletter stated.

Southeast dairy farmers report their mailed copy of a Dairy Alliance newsletter in July had already forecast more shelf-stable milk coming to schools as part of the strategic plan to protect and grow milk sales by ensuring milk accessibility and improving the school milk experience. In addition to the Borden plant closures, the report cited school milk “hurdles” such as inadequate refrigerated space requiring multiple frequent deliveries amid rising fuel and energy costs and labor shortages.

Southeast dairy farmers were informed that the Dairy Alliance School Wellness Team was already working to mitigate bidding issues with shelf-stable milk for school districts in Alabama, Georgia, South Carolina and Virginia.

Diversified Foods Inc. (DFI), headquartered in New Orleans, was identified as the main supplier of this shelf-stable milk to schools in the region, reportedly sourcing milk through Maryland-Virginia, DFA and Borden.

In addition, DFI is a main sponsor of the Feeding America conference taking place in Philadelphia this week (Aug 9-11), where it is previewing for nutrition program attendees their new lactose-free shelf-stable chocolate milk. DFI also sponsored the School Nutrition Association national conference in Orlando earlier this summer, and social media photos of the booth show the shelf-stable, aseptically packaged versions of brands like DairyPure, TruMoo, Borden and Prairie Farms, along with DFI’s own ‘Pantry Fresh’ shelf-stable milk in supermarket and school sizes.

Coinciding with the flurry of Borden closings and shelf-stable milk hookups for schools, DFA announced last week (Aug. 1) that it will acquire two extended shelf-life (ESL) plants from the Orrville, Ohio based Smith Dairy. The SmithFoods plants will operate under DFA Dairy Brands as Richmond Beverage Solutions, Richmond, Indiana and Pacific Dairy Solutions, Pacific, Missouri. A SmithFoods statement noted the transfer would not affect the farms or employees associated with these plants.

This acquisition aligns with DFA’s similar strategy to “increase investment and expand ownership in this (shelf-stable) space… and create synergies between our other extended shelf-life and aseptic facilities,” the DFA statement noted.

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Deals with the devil at Davos; it all comes down to money… and land

WEF panel at Davos on redirecting capital in agriculture. (screen capture)

NEWS / ANALYSIS

By Sherry Bunting, published in Farmshine Newspaper, June 10, 2022

DAVOS — Let’s follow your checkoff money all the way to Davos, where Klaus Schwab and friends, known as the World Economic Forum (WEF), gather annually in Switzerland. This is where globalist elites have been plotting and planning the net zero economy, complete with food transformation maps.

On May 26, your message was delivered and your future was signed up, with your money through your checkoff programs — a plan 14 years in the making under the DMI umbrella of multiple so-called non-profit foundations and alliances.

Some of the same global actors in the WEF food transformation movement are also represented in the various non-profit alliances that were created by your checkoff in the 2008 through 2012 time-period.

At Davos, the May 26 panel on “redirecting capital in agriculture” is where “farmers voices were heard for the first time,” they said.

Don’t worry, the purpose was to get you the money from Davos billionaires to do all the things they will be requiring you to do to be part of the new net zero economy they are creating with the net zero goal DMI has set for you — despite the fact you didn’t vote on it or sign up for it, and experts can’t even agree on what it means or how it will be measured.

But that’s okay, your checkoff created surveys, sustainability platforms and strategic alliance non-profits to bring the largest processors together “pre-competitively” to set the timelines, plan the parameters, and craft your messages.

DMI “thought leaders” often talk about getting ahead of “societal issues” such as animal care and the environment via the Innovation Center — to avoid regulation. That is the basis of the FARM program, for example.

But the reality is the regulatory side has at least some accountability — a process via our democratic republic if we still have one. 

What democratic process was used to determine the rules your farm will live by — as decreed by the corporations buying what you produce, and now also the access to capital you will need to continue?

Consumers have not asked for this, and neither have you. But your checkoff has done it for you and will help you navigate.

DMI issued a press release just a few days before Davos about how the Sustainability Summit they held state-side to help you, the farmer, navigate this new future they have been creating with your checkoff money.

“Never has the opportunity been greater for us to come together and demonstrate our collective impact,” said DMI CEO Barb O’Brien in opening the pre-Davos Summit. “And frankly, never has it been more urgent as we work to meet the growing demands and expectations of both customers and consumers around personal wellness, environmental sustainability and food security.”

These are pretty words.

The press release cites the U.S. Dairy Stewardship Commitment as having 35 companies representing 75% of the milk market signed on. The four pieces DMI is working on were listed in a vague way: 1) utilizing new ‘digital frontiers’ for point-of-purchase ‘strategies’, 2) promoting a new definition of ‘health and wellness’, 3) fulfilling an ‘impact imperative’ they say exists among consumers positioning U.S. Dairy as the leader in addressing societal challenges such as climate change, and 4) targeting ‘inclusive relevance,’ which O’Brien said Gen Z is the driver as the most diverse generation to-date with societal expectations for companies and brands.

Two weeks later, the thought leader representing you in Davos told the gathered elite, the billionaires, the power-centers, that your soil has “perpetual societal value” and should be invested-in and traded as an “asset class,” that farmers are the “eco workforce to be deployed,” and that investors and lenders should “redirect capital” to “de-risk” the investments farmers must make as “climate warriors that are planting the future.”

We missed that memo. Lots of buzz terms here, so let them sink in.

Here’s the reality: Farmers’ voices were NOT heard in Davos. Instead, what was heard was the voices of the WEF billionaires, the WWF supply-chain leveraging model, the string-pullers (thought leaders), and the plan-developers. 

The World Wildlife Fund 2012 “Better Production for a Living Planet” identifies the strategy depicted in this graphic on biodiversity (30×30), water and climate. Instead of trying to change the habits of 7 billion consumers or working directly with 1.5 billion producers worldwide, WWF stated that their research identified a “practical solution” to leverage about 300 to 500 companies that control 70% of food choices. By partnering with dairy and beef checkoff national boards in this “pre-competitive” strategy, WWF has essentially used farmer funds to implement their priorities in lockstep with the World Economic Forum. Image from 2012 WWF Report

We don’t even know all the tentacles behind the pretty words used to describe what you have already been signed up for. Rest assured, DMI will roll them out gradually through the Innovation Center and FARM, and investors, lenders and others will put them in the fine print of farmer access to capital and markets.

It’s more truthful to say the farmers’ voice is being stolen in this process.

Your autonomy, independence and decision-making is being overridden. Your permission is being granted for the WEF Davos billionaires to step right up, help themselves, and determine your options, your future through their investments in a soils asset class — because, climate.

During the WEF panel, it was Erin Fitzgerald who carried “the farmers’ voice” to Davos.

Erin Fitzgerald (USFRA photo)

Fitzgerald is CEO of U.S. Farmers and Ranchers in Action (name changed in 2020 from the previous U.S. Farmers and Ranchers Alliance). She became the USFRA CEO in 2018 after spending the previous 11 years working for DMI as Vice President of Sustainability and several other roles and titles while the FARM program and net zero framework was being developed. She spoke “for farmers and ranchers” in four sessions at the WEF annual meeting in Davos, including one panel about redirecting capital in agriculture, where she talked about soil as an “asset class” and farmers as the “eco workforce.”

During her comments on the Davos panel about “redirecting capital,” she made it clear that your consumer is “no longer the person at the checkout” in the grocery store. She said it’s the pension fund investors looking for low-risk investments. 

Even that is not entirely accurate. The truth is that DMI — in the creation of its many precompetitive alliances — has its sights set on bigger fish: the billionaires at Davos, the venture capitalists, the global corporations investing in climate. 

In fact, this is being driven behind the scenes by Edelman, the global PR firm that receives $16 to $18 million in checkoff funds annually as the contractor for DMI over the past decade of plotting and planning. Edelman is a key player at Davos. GENYOUth was the Edelman brainchild, and outgoing CEO Alexis Glick was originally tapped by Richard Edelman, himself, to lead GENYOUth as a former financial analyst who made Davos a high point of her itinerary.

Back to the WEF panel on May 26 — the messages that have been crafted were touted, along with a narrative about what you will do in the next 30 harvests as the “eco workforce” of the “new global net zero economy.”

Listening to some of the livestreamed sessions, other panels highlighted the future of food, energy and financing to all be rooted in carbon impact.

Some panels noted the fast pace of the WEF global transformation is creating inflation pain, but the globalist elites are not concerned, even saying “that’s a good thing.”

Other panels delved into individual carbon tracking, to measure, record and score what each one of us eats, where we go, how we get there.

Truth be told, consumers are also being signed up for the net zero economy, although most don’t even know it yet. In a free America, I’m not sure we voted on this global-control-fast-track either.

Fitzgerald, whose role is described as “building sustainable food systems of the future,” laid it out for the crowd of investors, corporations, regulators, and government officials.

On the Davos stage, she said she brought the farmers’ message and referred specifically to the DMI board chair as “my chair Marilyn, a farmer from Pennsylvania.” (Marilyn Hershey also sits on the USFRA board.) 

In the ‘redirecting capital’ discussion, another layer of the World Wildlife Fund (WWF) model of leveraging the few players in the middle of the food supply chain to move consumers and producers at both ends was very much in play.

This is not surprising. The DMI alliance with WWF also spanned a 12-year period from 2008 to 2020 when all of these non-profit alliances were formed under the DMI umbrella to bring global processors together as a platform for “pre-competitively” determining how all farms will operate in the future.

Your innovation and hard work were mentioned, but no credit was given to where you are, what you already accomplish, as farmers. It is all forward-looking to annually “make progress” over “the next 30 harvests.”

The stage was set for farmers to see capital “redirected” to de-risk certain types of operations and to make the soil you farm an “asset class.”

“We officially have our first solution,” declared the Davos panel moderator, turning to the panelist sitting beside Fitzgerald, saying “that’s your area, let’s do it.” Who was this panelist? None other than David MacLennan, the board chair and CEO of Cargill, and a former member of the Chicago Board of Trade and Board of Options Exchange.

Think about this for a moment. Soil as an asset class dovetails nicely with the 30 x 30 land grab, another WEF / WWF / Great Reset / Build Back Better invention.

Lured by money or financing, the soil you farm — if it becomes a tradable asset class with financing channeled to certain practices begs this question: Whose land does it become and what will be your accountability through the Security and Exchange Commission or the Commodity Futures Trading Commission for disclosures? Farm Bureau is already sounding the alarm on proposed rules about supply chain producers being an open book to the SEC for claims made by companies buying their raw commodities.

More importantly, who will make the decisions on your farm? Fitzgerald asked the audience to “put aside the term ‘farmer’ and think about ‘these people’ as the “eco workforce.’”

Your voice, through your checkoff, just went into the den of thieves to offer your land, your future, your autonomy — as a farmer, rancher, landowner, generational steward of God-given resources in your community — and put it on a silver platter for the Davos global elites under the feel-good message of farmer as climate warrior, an eco workforce planting the future in the net zero economy.

They said your voice was heard, your story was told, and they’ll get you the investment funds for projects. In  “thinking about soils as a perpetual asset to society,” Fitzgerald said investors can do what was done for the renewable energy sector in 2008 to “prop it up and get it moving.”

“This eco workforce has boots on the ground,” she said. “They have every bit of capability, but they’re going to be battling the real effects of disrupted markets and climate change, and they also have unbelievable talent. Our farmers are doing amazing work as climate eco warriors. Are we as business agents of change here at Davos really creating the finance models to de-risk their investment to let them plant the future and be the eco warriors they can be in the fight on climate change?” 

More pretty words that might sound inspiring to some, until we pull back the layers and realize deals are being made with the devil.

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Comments due March 24: Ask USDA to end its prohibition of whole milk in schools, give students milkfat choice

Photo credit (Top) USDA FNS website screen capture from https://www.fns.usda.gov/building-back-better-school-meals and (bottom) fat-free flavored milk and fat-free yogurt on a local school lunch tray.
Screen capture and lunch tray photo S.Bunting

By Sherry Bunting, published Farmshine, Feb. 18, 2022

WASHINGTON — As reported in the Feb. 11 Farmshine, USDA announced a ‘transitional standards’ rule on Feb. 4 for milk, whole grains, and sodium for school years 2022-2023 and 2023-2024. 

The transitional standards are only in place while USDA works with stakeholders on long-term meal standards through a new rulemaking. 

The proposed rule for the longer-term is expected to come from USDA in fall 2022 and will become effective in school year 2024-25. It will be based on the Dietary Guidelines for Americans 2020-2025, but USDA says it is conducting a public comment and review process related to the standards and to the “gradual implementation” plan it will develop based in part on stakeholder input. 

In the official transitional standards rule, USDA notes that full implementation of its 2012 meal pattern requirements for milk, grains and sodium have been delayed at intervals due to legislative and administrative actions. “Through multiple annual appropriations bills, Congress directed USDA to provide flexibility for these specific requirements.” 

Read the transitional standards rule here at https://www.regulations.gov/document/FNS-2020-0038-2936 where a comment button can be clicked to provide a public comment to USDA by March 24, 2022.

Now is the time to comment before March 24, 2022 and to call for an end to the prohibition of whole milk in schools. Request that USDA restore the choice of whole milk in schools by commenting at the online rulemaking portal https://www.regulations.gov/commenton/FNS-2020-0038-2936

Comments and questions can also be sent to: Tina Namian, Chief, School Programs Branch, Policy and Program Development Division—4th Floor, Food and Nutrition Service, 1320 Braddock Place, Alexandria, VA 22314; telephone: 703-305-2590. 
Include FNS-2020-0038-2936 in your correspondence. 

In a rare move Feb. 7, the American Association of School Superintendents (AASA) made a public media statement on the transitional standards — pointing out their concern that the long-term standards will be ‘more stringent’ due to the restrictive Dietary Guidelines that were approved by USDA and HHS in 2020. 

The Association of School Superintendents stated: “It is important to acknowledge that healthy meals are only healthy if students eat them.” 

Agreed! This applies to the milk also. Students miss out on 21 minerals, 13 vitamins, complete high quality protein, a healthy matrix of fat and several nutrients of concern when they don’t actually consume the milk offered or served at school. Those nutrients ‘on paper’ are then not realized. Many key nutrients of concern are also fat-soluble. A study at St. Michael’s Children Hospital, Toronto, showed children consuming whole milk had 2.5 to 3x the Vit. D absorption compared with those consuming low-fat milk, and they were at 40% less risk of becoming overweight! Details were presented in a June 2021 hearing in the Pennsylvania Senate, listen here

Milk consumption plummeted and waste skyrocketed since USDA’s 2012 fat-free/low-fat milk rules were set for both ‘served’ milk and competing a la carte offerings. Studies by USDA and others show milk is now one of the most discarded items at school. In fact, USDA did a plate waste study comparing 2011 to 2013 (pre-/ and post-change) They focused on fruits and vegetables, but saw milk decrease significantly, waiving it off as though it were due to an “unrelated policy change.” Technically, it was the smart snacks rules for beverages and it WAS related to the 2012 standards as both were implemented together.

See the losses in Tables 2 through 4 below in ‘selection’ and ‘consumption’ of milk from the USDA study reflecting a 24% reduction in student selection of milk (offer vs. serve) after the 2012 fat-free/low-fat implementation and 10 to 12% reduction in consumption among those students being ‘served’ or selecting the restricted fat-free/low-fat white milk option or fat-free flavored milk option. That’s a double whammy for childhood nutrition and for dairy farm viability. Since 2012, at least one generation of future milk drinkers has been lost.

Charts above are from a USDA study published in 2015 to assess school meal selection, consumption, and waste before and after implementation of the new school meal standards in 2012. Those standards impacted a la carte offerings as well as beverages, not just served meals. The method for the USDA study was: Plate waste data were collected in four schools in an urban, low-income school district. Logistic regression and mixed-model ANOVA were used to estimate the differences in selection and consumption of school meals before (fall 2011) and after implementation (fall 2012) of the new standards among 1030 elementary and middle school children. Analyses were conducted in 2013. The authors note that prior to the full implementation of new nutrition standards in 2012, a variety of fat levels of milk were offered to students and no restriction upon flavored milks. See the report here —– Additionally, a PA school trial offering all fat percentages, including whole milk, revealed a 52% increase in selection of milk and 95% reduction in discarded milk, netting a 65% increase in consumption of milk in 2019.

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Will DMI’s transformation strategy leave dairy unrecognizable?

It was lights-camera-action… but there were barely 25 people, over half of them media and checkoff representatives, attending the DMI ‘tanbark talk’ on dairy transformation at the World Dairy Expo. On the big screens, joining virtually, was Bob Johansen, an author and strategist talking about “the VUCA” world. He was hired by DMI to work through scenarios of the future to arrive at the transformation model. On the stage from left are Dwyer Williams, DMI chief transformation officer; Tom Gallagher, outgoing DMI CEO; Lee Kinnard, a Wisconsin dairy producer; Peter Vitaliano, NMPF vice president of economic policy and market research; and Eve Pollet, DMI’s senior vice president of strategic intelligence. Taking notes at a table in the foreground — seated to the left of the camera man and light-show operator — is Jay Hoyt, a New York dairy producer who challenged DMI’s “bright” transformation picture saying nothing will be bright about the future for dairy farmers, if we can’t provide and promote cold, whole milk to children.

By Sherry Bunting, Farmshine, October 15, 2021

MADISON, Wis. — A picture of the future of dairy was painted with a boastful sort of “insider” arrogance by dairy checkoff leaders on the second day of the World Dairy Expo during DMI’s ‘tanbark talk’ on transformation. It left me both shocked and uninspired, exasperated.

The very next day, a message of light and inspiration was presented in a meeting hosted by American Dairy Coalition (ADC), talking about inspiring loyal consumers as part of a discussion on the viability of America’s dairy farms in the face of rapidly launching confusion via plant-based and lab-grown lookalikes.

Without necessarily challenging DMI’s assumptions about Generation Z and the “future” of dairy, ADC’s guest speaker, a consumer-packaged-goods expert, painted a different picture. From the marketing surveys shared, it appears that future consumers, those under 23 years old today, are much more apt to be brand loyal than their Millennial parents. 

That’s the hope and light DMI left out of their presentation. DMI is taking their “knowledge” of Gen Z in a different direction.

The question is: Who is inspiring loyalty to milk, whole milk, real milk, real dairy, real beef, real animal protein? Not DMI.

DMI wants to take your checkoff dollars down into the darkness of the gaming world. Their guest speaker and futurist collaborator talked about the Gen Z gamers, the immersive learning, the tik tok generation.

One comment made me cringe. “It’s something parents and grandparents don’t like, but it is good for dairy,” said futurist Bob Johansen about the dark world of gaming that has, in his opinion, claimed the perspectives and choices of the next generation.

Repeating the platitude of “meeting consumers where they are”, the DMI presentation left this reporter in a bit of a shock. Do we really know where consumers are? Who is telling us these things and what is it really based on? So much more enlightening was the next day’s presentation about “inspiring loyalty” by reminding consumers about “what they love.”

I believe most dairy farmers want to inspire consumers to what’s real in life instead of being sucked into the unreal and confusing world of gaming.

Where are my thoughts going and what did you miss in the DMI panel at Expo? Not much, really. I heard the DMI dairy transformation strategist suggest that she “likes saying milk has 13 essential nutrients,” but that she thinks it will be so much “cooler to identify, annotate and digitize the 2500 to 3000 metabolites in milk and then be able to pair them to products and brands in the personalized app-driven diets of the future.”

That’s right folks, DMI paints a picture of future diets digitized by apps and algorithms to match up to the individual metabolic needs and desires of consumers. In other words, they won’t really know WHAT they are consuming, just a mix-and-match of elements as presented by global processing corporations that are “all-in” for this future of food confusion.

DMI is in the self-fulfilling prophecy business. They aren’t meeting consumers where they are. They aren’t inspiring consumers to be better, eat better, and enjoy dairy. They are touting USDA dietary policy to the point that even their fellow GENYOUth board members and collaborators are, in some cases, promoting the competition.

Case in point this week, chef Carla Hall, a longtime board member of GENYOUth, who DMI leaders have touted over the past 10 years, is right now running Youtube videos teaching consumers “how to go plant-based without going vegan.”

And guess what? Hall is targeting milk for the ousting. She promotes almond, oat, cashew etc ‘milks’ and guides consumers on how to replace real milk with these fakes in their diets, their recipes, their lives.

When a Facebook post about Hall’s milk-replacing Youtube videos was posted by a New York dairy producer asking “why is this person on the GENYOUth board?” another dairy producer responded wondering if she really was on the dairy-farmer-founded and primarily funded GENYOUth board.

Yours truly, here, replied on Facebook with a simple “yes she is” accompanied by a link to the listing of GENYOUth board members and a screenshot of the page showing Carla Hall among the GENYOUth board member list. Within a couple hours of my comment on that post, I got a notice from Facebook telling me I had “violated Facebook’s community standards.” They called my comment “fraudulent spam” and deleted it!

Yes, my reply was deleted, and I was warned that if I continued my violation of Facebook’s community standards, action would be taken against me.

Wow, I thought, that’s out of left field, isn’t it? I simply showed the truth with a link and a picture that the plant-based beverage promoter is, in fact, on the GENYOUth board.

Yes folks, DMI wants you to believe that your future viability as dairy farmers relies on playing nice with the plant-based and lab-grown lookalikes – blending in with them – and losing your identity.  After all, they say, just be glad your milk has 2500 metabolites that can be digitized and annotated!

They want you to believe that the gaming industry is “good” for dairy while acknowledging that it’s not so good for kids. They want you to partner in that world of unreality and confusion instead of being an inspiration of clarity and a champion for what’s real.

My question is: Do we want to be a beacon of light and inspire Gen Z? Or do we want to stoop to the level of this dark space to “fit in” or “be cool”.

In that space, are those teens and young adults even listening to our story? Or are we being drowned out by the bells and whistles of gaming as it sucks them in and drags them down. The entire gaming world is full of ambiguity and confusion, but this is what DMI and its futurist say the world is going to be, that it is a VUCA world, and we must accept it.

VUCA stands for volatility, uncertainty, complexity and ambiguity. It’s a sort of catchall phrase for what we all know. Yes, the world is crazy out there!

In that talk, DMI leaders said they hired futurist Bob Johansen to help them look at four models for the future of dairy from a range of possible scenarios. They chose the transformation model, and that is how they are transforming checkoff dollars.

“Accept it,” they say, Mr. and Mrs. Dairy Farmer, you must accept that ambiguous messaging is the name of the game for the future of dairy, one that assigns the attributes you are selling in a mix-and-match environment.

Farmers have been dealing with VUCA forever. We’ve long understood that markets are volatile, the future is uncertain, the industry is complicated, and yes, the world and its direction are certainly ambiguous.

However, must dairy farmers accept and enbrace this ambiguity in the messages they send to consumers about the milk they produce?

Must they tow the line of 3-a-day fat-free and low-fat dairy as the only message of clarity because that is the edict written by USDA in its Dietary Guidelines?

Should they be pursuing the digitization of 2500 milk metabolites as the way to pair dairy with certain brands and products to fit personalized diets and ignore the backdrop of confusion about what real milk and dairy are?

The first rule of marketing 101 is that ambiguous messages don’t work. They leave the impression that there’s nothing special about one choice over another.

But that’s the point for the multinational global corporations, some of which make up the pre-competitive work of DMI’s Innovation Center for U.S. Dairy.

They call it innovation, but it is really subjugation – the act of bringing farmers and consumers under domination and control.

They are asking dairy farmers to give away our precious wholesome true message about milk – especially whole milk — so that processors can mix and match protein sources as they see fit.

Of course, they tell us this is for sustainability’s sake and for saving the planet by keeping diets within planetary boundaries, but we all know the score: It’s about corporate profits and control of food… and land.

We knew that already, didn’t we? The dairy transformation strategy is to be the protein that processors choose to include by being the low-cost producer. 

DMI isn’t interested in promoting whole milk or the nutritional value of whole milk as a superior choice. This is obvious no matter how ardently the outgoing DMI CEO Tom Gallagher repeats the mantra that DMI championed the return to full-fat dairy and whole milk. 

He said this again during the World Dairy Expo discussion when New York producer Jay Hoyt stood up to say none of this “bright” transformation future is going to matter if we can’t promote and provide cold whole milk to kids. Gallagher’s response was that no one would be talking about whole milk if DMI had not been the leader on the full-fat dairy research and whole milk message. (What did I miss?)

The transformation strategy of DMI is to be a versatile, low-cost commodity that can be separated to blend and fit and filter its way into dozens of new products, that it has 2500 metabolites that can be digitized and annotated and then selected for personalized diets offered on iphone apps, that it ‘meets Gen Z where they are’ in the immersive learning world of gaming.

This is a game for sure. But who wins?  Certainly not dairy farmers or consumers.

The transformation strategy has no place for promotion of 100% real whole milk and dairy, nor a clear message about what milk is, what it does for you. No place to remind consumers about why they love milk because they’ve helped over the past decade parrot USDA’s propaganda so that Gen Z doesn’t even know they love milk because they weren’t given whole milk – until grassroots promotion efforts started turning those tables.

If we all stand by and twiddle our thumbs — letting the global corporations make the decisions, control the narrative, bow to activist triggers, and define ‘where our consumers are’– by the time DMI and friends are done with dairy, it will be unrecognizable, without a clear message about the real milk diligently produced on our dairy farms.

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MilkPEP stays the course to uphold nutritional values

Doing so means walking away from DMI and NFL constraints

By Sherry Bunting, Farmshine, September 3, 2021

BROWNSTOWN, Pa. — Rather than dilute its rejuvenated milk performance messaging in NFL athletes’ own milk stories, the national Milk Processor Education Program (MilkPEP) walked away from its quest for a fall promotion partnership with Dairy Management Inc. (DMI) and the National Football League (NFL).

According to leaked emails dated August 27 and 28, the decision was made when NFL feedback required removal of references to fluid milk hydration, recovery and performance due to infringement on the territory of a prime NFL sponsor, PepsiCo.

Rather than dilute the campaign’s message to gain NFL approval, the email indicates MilkPEP will use its own creative content with NFL athletes, without the NFL branding. Separate Farmshine requests for official statements from both MilkPEP and DMI were not immediately answered.

‘You’re gonna need milk for that’ is a performance based MilkPEP campaign with athletes’ authentic milk stories and a wealth of milk facts and comparisons to other beverages. The ‘got milk?’ offshoot also links up with MilkPEP’s builtwithchocolatemilk.com website. Screen capture at gonnaneedmilk.com

Some history is in order.

MilkPEP is funded by the mandatory 20-cent per hundredweight assessment that is included in the Class I price and is paid by fluid milk processors on all fluid milk that is processed and marketed in consumer type packages in the U.S. DMI, on the other hand, is funded by a portion of the 15-cent checkoff paid on all milk hundredweights sold by all U.S. dairy producers and the 7.5-cent per hundredweight equivalent paid by dairy importers. 

MilkPEP, under the leadership of CEO Yin Woon Rani since October 2019, has brought back and revitalized milk education messages with an up-to-date modern focus on the nutritional and performance benefits of milk. 

For example, MilkPEP revived ‘got milk?’ in 2020, and even more recently started a related slogan ‘you’re gonna need milk for that.’

At the gonnaneedmilk.com website, Milk is positioned as “fueling athletes for centuries” and as “the original sports drink” with tabs for milk facts, why milk, and milk vs. other beverages. In fact, some state and regional checkoff programs, including the southern Dairy Alliance, are using some of MilkPEP’s fluid milk promotion pieces. MilkPEP also partners with DMI on some projects related to fluid milk promotion.

DMI leaders often point out that their role is research and instead of generic advertising, they focus on innovation via proprietary strategic partnerships that include DMI’s 5-year-old Fluid Milk Revitalization Initiative; while MilkPEP focuses on consumer-facing fluid milk education and promotion. DMI often claims to “further the reach” of MilkPEP promotions through partnering and social media.

A central theme in MilkPEP’s ‘gonna need milk’ campaign is how milk’s unique nutritional attributes fuel extraordinary accomplishments. Through science-based information and the stories of Team Milk athletes, this campaign comes right out to proclaim “Milk: The Original Sports Drink.”  So far this year, the milk stories of Team USA Olympians have been featured.

“I’m sorry we couldn’t get it done with the NFL, but we’ll find a way to get it done,” said Everett Williams, a MilkPEP board member at-large and Madison, Georgia dairy producer when called for his thoughts on the matter. “I have been impressed with what MilkPEP is doing, and it looks like we’ll still be working with the athletes, just not with the NFL branding. 

“But we will still get the message out that ‘you’re gonna need milk for that,’” he said.

The fall promotion work had reportedly been underway for months creating content. Given DMI’s partnership with MilkPEP and with the NFL in schools via the GENYOUth and Fuel Up to Play 60 since 2009, the thought was these MilkPEP promotions could associate the athletes’ stories with the NFL and FUTP60.

However, in the email leaked to many, including to Farmshine, over the weekend, MilkPEP apparently thanked DMI’s teams for working with them on this, but said the organization would follow a different pathway for the fall promotions already created. The email noted that MilkPEP worked with DMI “in an attempt to make compelling content for Gen Z to help us achieve our objective of positioning milk as a valuable performance drink that helps athletes do extraordinary things.”

This created conflict with the NFL.

According to the email, the feedback that was sent back was “very stringent prohibiting this type of content.” 

This feedback would have included editing every player’s authentic testimonials and removing all messaging from the gonnaneedmilk.com website that related to hydration, performance, recovery and sports drinks.

MilkPEP indicated in the email that it was unable to accommodate this level of feedback because the information is fact- and science-based.

In the email, MilkPEP’s continued support was emphasized for GENYOUth, the non-profit formed originally by DMI and the NFL. MilkPEP will pay for the distribution of nearly 4000 flag football kits to schools in October, which will feature the Team Milk NFL and nutritional posters along with the ‘got milk?’ branded pinnies, according to the email.

Outside of the schools, MilkPEP will essentially move forward on their own with their own content and will only use this content featuring attire without NFL or team brands and without any FUTP60 branding and no connection to the NFL.

“I am disappointed that we weren’t able to find a special place for milk in NFL promotion,” said Rob Barley, a MilkPEP board member at-large and dairy producer from Lancaster County, Pennsylvania when asked for his observations.

Barley noted that MilkPEP staff worked very hard on this promotion, and he indicated DMI worked with them, but in the end, the promotion was denied by the NFL as infringing on the areas of other sponsors.

He noted that this decision does not represent a break in the partnership between MilkPEP and DMI on fluid milk promotion, and it does not affect their school participation. Instead, it means MilkPEP is choosing to continue its fall promotion plan, using the unedited milk stories of football players. They just won’t have the approval of the NFL and therefore will not be able to associate with the NFL brand or FUTP60 logo.

“We lack the financial resources of other NFL partners,” Barley said. “It’s that simple.”

NFL sponsorship deals are huge. According to an NS Business report last year, the NFL brought in a combined $1 billion through sponsorship deals from 30 brands during the 2019-20 season. At $100 million, PepsiCo was the fourth largest, allowing it to use the NFL logo and branding on its advertising campaigns for soft drinks as well as its other beverage and snack brands including Aquafina (water), Frito-Lay, Gatorade, Tropicana and Quaker Oats.

By comparison, the entire annual budget of MilkPEP is less than that, estimated at $85 million.

Also in comparison, according to IRS 990 forms, DMI pays the NFL approximately $7 to $8 million annually and provides the staffing and infrastructure for the partnership with the NFL in GENYOUth, where state and regional checkoff organizations, collectively, outspend all other individual donors, including the purchase of breakfast carts and equipment and educational materials for schools. 

Over the past decade, GENYOUth’s in-school materials have evolved well beyond the original realm of nutrition and exercise as more multinational corporate donors from the technology, financial and consumer packaged goods sectors have boarded the school bus.

In 2020 and 2021, GENYOUth has focused its out-of-school messaging on raising funds for delivering school meals amid pandemic disruptions. 

Through GENYOUth and FUTP60, DMI targeted Generation Z over the past 12 to 13 years. In a press conference in May, Anne Warden, DMI’s executive vice president of Strategic Integration, said dairy checkoff “has been focusing on the youth audience ever since making its commitment to USDA on school nutrition (in 2008-09).” She stated that Gen Z is “not interested in facts like vitamins and minerals. They want to know how foods and beverages will make them feel.”

The FUTP60 partnership between the NFL and DMI began in 2009. By 2010, DMI had created the 501c3 non-profit Youth Improved Incorporated, operating as GENYOUth. Its formation includes USDA as an original partner. USDA blog posts and Flickr photos depicted the ceremony where the Memorandum of Understanding (MOU) was publicly signed by NFL Commissioner Roger Goodell, USDA Secretary Tom Vilsack, GENYOUth CEO Alexis Glick, and National Dairy Council President Jean Regalie during the 2011 Superbowl. 

Also in 2011, PepsiCo renewed its longtime partnership with the NFL in a 10-year deal that ESPN reported to be over $90 million per year with additional spending in marketing and promotion of its ties to the NFL.

In 2018, the GENYOUth Vanguard hero award was presented to PepsiCo during the New York City GENYOUth Gala, at a time when dairy farmer heroes were encountering one of their most difficult milk price margin years and whose checkoff had been contributing far more millions to the GENYOUth effort over the previous 10 years than the one-year, one-million PepsiCo had pitched in for Spanish translations and 100 breakfast carts. (PepsiCo has a school foodservice company and website touting USDA-compliant products.)

PepsiCo’s North American CEO accepted the award that evening and indicated the company had “admired the Play 60 program for years.” He then used the dairy-farmer-founded GENYOUth venue to tout Pepsi’s focus on healthy new beverages, including the Quaker brand oat ‘milk’ he announced had arrived in stores (a brand that was subsequently discontinued).

Looking ahead, PepsiCo announced in Feb. 2021, its joint venture with Beyond Meat called The PLANeT Partnership to make and sell plant-based alternative drinks and snacks. In July 2021, Beyond Meat filed to trademark “Beyond Milk.”

(Author’s note: NFL is big business, and its sponsorship deals understandably require rules for the road in which competing sponsors — especially those such as dairy producers with their smaller ‘altruistic’ investments as ‘partners’ in a youth program — are apparently expected to stay in their lane (getting meals to food insecure kids at school; not promoting milk’s nutritional profile in performance, hydration and sports recovery). On the other hand, pay attention…  if / when the PepsiCo / Beyond PLANeT Partnership brings forth a Beyond Milk beverage to go with the trademark application they just filed, dairy farmers will certainly expect the NFL to remember who the MILK lane belongs to.)

GENYOUth hosted the ‘Taste of NFL’ live-streamed event during the 2021 Superbowl and this week began promoting the event for 2022, aimed at using the ‘culinary experience’ to raise awareness and funds to support food insecurity. But traditional football fan-fave cheese never made it on the menu, unless PepsiCo’s Frito-Lay Chee-tos count. Even the GENYOUth cooler behind CEO Alexis Glick looks like convenience stores and school foodservice these days: a small corner for real milk at the top surrounded by plenty of PepsiCo beverages and consumer-packaged snacks. (PepsiCo does, after all, have its own school foodservice company and website.) Official tailgating recipes for the GENYOUth-hosted event contained no dairy: Chicken Doritos Meatballs (Doritos = PepsiCo), BBQ Ribs, Smores, and spicy wings. Alexis did say she’ll ‘have her glass of milk ready’ when ‘spicy’ was mentioned. GENYOUth twitter photo

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Dairy identity crisis

Some blending innovations beg dilution questions… Marketed as “the best of all milks,” and highlighted as offering “enhanced nutrition,” Live Real Farms 50/50 blends entered the second phase of rollout, arriving earlier this year in Northeast and Midatlantic markets. Giant Stores are among the supermarkets carrying the drink, pictured here at a Giant in Lancaster, Pennsylvania, where the Dairy + Almond and Dairy + Oat are shelved beside fairlife and sandwiched between plant-based on the right and below and 100% real milk half gallons and gallons on the left. The low-fat ultrafiltered milk as an ingredient in the Live Real Farms 50/50 blend is not Class I in terms of dairy farm-level pricing. Photo by Sherry Bunting

DMI gets more aggressive in launch of ‘blending’ vision

By Sherry Bunting, Farmshine, August 27, 2021

CHICAGO, Ill. – The future of dairy is “blending”, according to recent messaging and product innovation launches supported with dairy checkoff dollars.

In 2019, the Live Real Farms, “purely perfect blends” – Dairy Plus Almond and Dairy Plus Oat beverages – were launched in test markets in Minnesota. Earlier this year, the roll-out arrived in Northeast markets, including Pennsylvania. For example, in Lancaster County, Pa., certain Giant stores are handling the drink.

According to USDA FMMO definitions for Class I fluid milk, the either/or protein or total solids percentage of this “blend” does not meet the Class I standard, and an official from the Pa. Milk Marketing Board also confirmed in a phone interview that the 50/50 blended products are not regulated as Class I under the PMMB.

This is another aspect of the move toward blending in fluid milk products. Some of these new checkoff-funded fluid milk “revitalization” products classify the milk used in them at manufacturing class prices.

But that’s another story. This article focuses on how DMI is positioning future dairy messaging and supply-chain innovation through blending.

First, many farmers will recall the words of Paul Ziemnisky, executive vice president of DMI’s Global Innovation Partnerships when he spoke in a Center for Dairy Excellence call last fall and again in a webinar during the February 2021 Pennsylvania Dairy Summit.

In those settings, Ziemnisky gave a look at the future of dairy beverages, going so far as to say new processing facilities will “need to be built as beverage plants able to handle all kinds of ingredients for the blended products of the future.”

In essence, he said, the future of fluid milk is “dual purpose” processing plants.

“We will see the beverage space set up differently and our manufacturing plants will need to be set up as dual plants to make milk-based beverages because that is where the consumer is going, and it is our job to keep them where dairy is front and center,” Ziemnisky explained, noting that these blends “are shelved with milk. We’re adding plants to dairy, making lactose-free dairy to address gut health. Our partners have led, and we have driven growth by over 1 billion pounds.”

But where is the sales data on the blends? The dairy industry identity shift has been in the making for the past 12 to 13 years, and ramping up in the past five, with the opening, expanding and planned construction of huge dairy ingredient facilities, processing cheese and “nutritionals”.

Ultrafiltration and low-fat or fat-free milk figure prominently in these blends.

‘Best of all milks?’

So, how is DFA / DMI marketing the checkoff-partnered fluid milk innovation that is Live Real Farms “purely perfect blends”? The evolving liverealfarms.com website, as well as social media platforms, tell the story.

These “blends” of milk plus plant-based beverages, these 50/50 blends, are touted as “the best of all milks,” and “the milk for modern tastes.”

Captured screenshot at 
https://liverealfarms.com/about-us/

Interestingly, the Live Real Farms “about us” page demonstrates that its marketers may be even more confused about whose farm products they are promoting because the photo is clearly that of a farmer standing in a field with BEEF cows – Hereford and Charolais. There’s not a dairy breed in the bunch on the full screen photo at DFA’s Live Real Farms “about us” page.

Across the beef cow and farmer photo are the words “Keeping it real.” (We have to wonder how the photo of beef cows and a blended product keep it real, but that’s a question for another day.)

Moving down through the verbiage, beneath the photo are the words: “Live Real Farms is owned by a co-op of real farmers (DFA) with one really tasty goal: to create deliciously modern dairy products bursting with goodness. Nothing fancy. Nothing artificial. Nothing we wouldn’t put on our own tables.”

Underneath this verbiage, we finally do see a Holstein, and below that picture are these words: “Love Milk Like Never Before: Something so delicious happens when you blend real milk with real almond or oat drink. We love the luscious texture. We love the subtle sweetness and nutty flavors. We love the health benefits too. And so will you.”

Various consumer spots are included touting this blended drink as healthier because you can “sneak more plants into your diet,” or because the blending with oat drink make it better in coffee, and on and on.

The instagram account even urged putting 50/50 Dairy + Almond blend out for Santa last Christmas Eve. (Sorry, but Santa prefers 100% real milk). 

A milk identity crisis?

The chocolate dairy plus almond product was recently reviewed by Afoolzerrand.com – the saga of a man traveling the world tasting and reviewing brands of chocolate milk – over 1500 of them to-date.

Even he was confused about the ‘blend’, stating in his video review that he was “curious about who this (blended) product is for…

“Is there crossover between people who buy almond milk and people who buy regular milk? Maybe? Is it some sort of a compromise? I don’t know. I’m sure they did research to back up putting out the product, but I find it strange who the target market is,” he said.

“It is amusing that at the website for Live Real Farms, about us, it talks about ‘keeping it simple’ and ‘we believe in eating food the way nature intended. It’s funny for me to think about nature intending on a 50/50 almond milk / cow milk blend, let alone a chocolate flavored one. To consider that to be the way nature intended has some comedy value for me,” the chocolate milk connoisseur said in his video review of the product.

He noted that, “It sort of tastes like you would expect sun block to taste,” observing a “dusty” flavor that’s “more sweet than chocolatey”.

He talked about the other 50/50 blends in the line-up, saying “I’m baffled a bit. I’ve certainly tried worse things, it’s less creamy, which you would expect with half low-fat milk, half almond milk… texture-wise it doesn’t do any favors.”

Rating it a 3 out of 10 (Poor), Afoolzerrand went on to note that it offers a lactose-free claim, but he was quick to point out (and show pictures of) the many other lactose free chocolate milks on the market that are made with 100% real milk, that he said are really good.

Whose healthy halo?

So, what does DMI – the purveyor of the blending vision for dairy farmer checkoff dollars – say?

A recently posted “Undeniably Dairy” video at the USdairy.com website sought to explain the blending direction of dairy “to answer questions raised by recent headlines.”

Undeniably, dairy is moving toward blending-in. That’s the word in a recent DMI blog post and video explaining dairy checkoff’s aggressive “overarching framework” of where “milk-based” beverage innovations are headed — to blending-in. Captured screenshot at 
https://www.usdairy.com/for-farmers/blog/value-of-dairy-blending-in

In the video moderated by Scott Wallin, DMI’s communications director, Kristiana Alexander, director of DMI’s Knowledge and Insights, discusses how “consumer desires are influencing the beverage category and how dairy innovation can encourage more fluid milk use. One of the newest innovations are blended products, which combine the goodness of dairy with other ingredients,” she said.

Alexander is asked to give a definition for ‘blended dairy’ in the DMI video entitled ‘Why Fluid Milk Innovation is Important.’

“We are talking about products that are combining dairy with other ingredients or foods that is then made into a single product,” she said.

Wallin notes that Alexander’s team is “constantly monitoring consumer trends” and asks what they are finding when it comes to blended dairy. “What is it that they are looking for?” he asked.

“Today, people are focused on living a ‘holistic lifestyle,” said Alexander explaining what she called DMI’s “overarching framework.”

The holistic lifestyle is “a lifestyle that emphasizes the connection of the mind, body and planet. It encompasses the well-being of the individual, the family, and everything around them. People want to know, is this good for my body? Will I enjoy it? Will I feel good about buying it?,” Alexander says.

She talked about how blended products are showing up in the marketplace, saying: “It’s all about nutrition and flavor experience. It’s about bringing the foods and ingredients that people want more of … and bringing them into dairy. This can include fruits and vegetables for vitamins and antioxidants, functional foods that boost immunity, healthy grains – think like oats and quinoa, nuts, and ‘super powders’ like matcha and turmeric that have a perceived ‘health halo’ around them. And beyond nutrition, it’s flavor experience. Consumers are looking to step out of their comfort zones,” said Alexander.

(Author’s note: Who is promoting milk’s natural healthy halo? The vitamins, minerals, high quality protein, hydrating water, electrolytes, healthy matrix of fats, important fatty acids, essential nutrients of concern in today’s diets, and more? Does dairy suddenly need other ingredients to improve its health halo, according to DMI consumer research? Because consumers do not know much about the health and nutrition of real milk and dairy, blending is the answer?)

Everyone’s doing it?

Alexander went on to say this “blending” trend is not just happening in dairy.

“We see it in meat and poultry,” she said, flashing brands of blended products always using the word “plus” on the screen (like the Live Real Farms does with dairy) and touting chicken-plus-grains blends and beef blended with pea-protein as “great new products” that meet consumer desires.

“We are tapping into consumers’ desires for enhanced nutrition and flavor exploration,” Alexander explained.

“The big question for farmers is, ‘what does it mean for the dairy industry?’” asked Wallin.

Alexander responded to say: “Bringing it home, what it means for dairy and looking at blended dairy… first, we know people are always looking to consume more vegetables, and we are seeing this take place in meat and poultry, and now in dairy.

“It’s not about eliminating foods,” said DMI’s Alexander. “It’s having different options available, and these hybrid foods that provide dairy and vegetables, they do that. There’s ice cream, cheese crackers, dairy beverages that all let consumers get more vegetables in their diets. And then there’s dairy blends that incorporate grains and nuts, meeting different consumer needs.”

She noted that Live Real Farms milk plus almond and oat, in particular, “provide that blended enhanced nutrition.”

(Author’s note: Enhanced nutrition? Over real dairy milk? Really?)

She also noted the “indulgent” blends, such as Shamrock’s milk swirled with almond drink and chocolate as being a new “comfort food” for people looking to indulge and “be comforted” after a stressful year.

Alexander also noted the blended cheeses with lentils and chickpeas providing new textures and … you guessed it… “enhanced nutrition.”

This ‘blending’ discussion has not even publicly touched upon the bioengineered yeast-excrement makers already talking with the largest global makers of ice cream, yogurt and cheese to blend their dairy protein analogs at a starter rate of 5%.

As Alexander noted in the DMI video, it’s happening in meat and poultry also.

Bottom line, dairy farmer checkoff dollars are using the World Wildlife Fund (WWF) supply chain leverage model to move consumers and producers in a direction that certainly appears to be one that transforms food by diluting animal-sourced foods like real milk and dairy.

The World Wildlife Fund in its 2012 Report “Better Production for a Living Planet” identifies the strategy it uses to accomplish its priorities for 15 identified commodities, including dairy and beef, related to biodiversity, water and climate. Instead of trying to change the habits of 7 billion consumers or working directly with 1.5 billion producers, worldwide, WWF stated that their research identified a “practical solution” to leverage about 300 to 500 companies that control 70% of food choices. By partnering with DMI’s Innovation Center for U.S. Dairy with a Memorandum of Understanding for 10 years — 2009 through 2019 — this “supply-chain” leverage strategy is now embedded. Effectively, WWF has used producer checkoff funds to implement their message and priorities to consumers through supply chain decisions and to producers through checkoff-funded programs validating farm practices. 2012 WWF Report image

Business will do what business will do, but should dairy farmers be paying to promote, launch, create, and foster the blending and dilution of their milk and dairy products, including the reclassification of the milk in these beverages at manufacturing class prices? Are they funding their own demise? Should they be funding the education and promotion of dairy’s own superior healthy halo so that consumers know what 100% real dairy provides and can make informed decisions as the lines get blurred?

Who is really benefitting?

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Checkoff leaders describe dairy transformation, milk-based blends, dual-purpose processing

During the 2021 Pa. Dairy Summit in February, dairy checkoff leaders presented a “virtual” breakout session on ‘what dairy checkoff has done lately’. Some key concepts discussed were transformation, trust, supply chain infrastructure and how DMI’s unified marketing plan is driving the industry’s “Dairy Transformation” plan and framework (also known as Dairy 2030). In a previous article, the sustainability and net-zero part of the equation was covered.

By Sherry Bunting, Farmshine, March 5, 2021

HARRISBURG, Pa. — As part of the 2021 Pennsylvania Dairy Summit, virtual attendees had the option of ‘attending’ a zoom session sponsored by American Dairy Association Northeast (ADANE), entitled What has dairy checkoff done for you lately? Moderated by Jayne Sebright, executive director of Pennsylvania’s Center for Dairy Excellence, the guests included Rick Naczi, CEO of ADANE, Barb O’Brien, DMI president, Karen Scanlon, senior VP of sustainability, Paul Ziemnisky, executive VP of global innovation partnerships, and Marilyn Hershey, DMI chair.

The first part of the program was a history lesson on how and why DMI (Dairy Management Inc) was formed to “bring greater efficiency” to how checkoff dollars are used. Leaders stated that DMI “eliminates millions spent in redundant money.” A graph was displayed showing that since the formation of DMI in 1995, total dairy disappearance has risen, along with milk production, to record levels.

A key point made is that DMI leaders see the unified and integrated plan “has helped the dairy industry grow, to help fulfill the dairy producers’ goal of growth.”

Leaders acknowledged that consumers trust farmers, but they believe checkoff’s role is defined as “educating consumers about that trust.”

Paul Ziemnisky gave a look at the future of dairy beverages, going so far as to say new processing facilities will need to be built as beverage plants able to handle all kinds of ingredients for the blended products of the future. In essence, he said, the future of fluid milk is “dual purpose” processing plants.

“We have taken milk to the energy arena, the cold brew with milk arena. We’re adding plants to dairy, making lactose-free dairy to address gut health. Our partners have led, and we have driven growth by over 1 billion pounds,” he said.

Touching on full fat dairy, O’Brien said DMI is “leveraging” the growth in full fat science.

A pressing question of farmers was asked: “Why do we not see television ads?”

The answer, said O’Brien, is “We are going to market differently from the consumer standpoint with less traditional TV ads and shifting to social and retail media channels like other companies are doing. We are looking to our partners, dairy brands, and foodservice brands to elevate their presence and elevate dairy’s presence within that,” she explained.

Ziemnisky pointed out the significant growth in foodservice investment in promoting products that highlight cheese within their own advertising channels.

“For the fluid milk category to be successful,” he said, “Brands need to establish the relationship with consumers.”

Hershey noted that the list of companies that advertised in the Super Bowl 10 years ago include Blockbuster video, Gateway computers, companies that are not in business any more, indicating that television ads are a large investment of ‘past’ industries (even though this year’s Super Bowl had ads by milk’s up-and-coming new competitors).

O’Brien and Hershey explained that DMI and MilkPEP (the fluid milk processor checkoff fund of over $90 million a year) work in “lockstep on consumer understanding, messaging and coordinating with the science.”

“We (DMI) are investing in thought-leadership and university partnerships while they (MilkPEP) have a consumer-focused charter,” said O’Brien.

An example she gave is Amazon launching into groceries in 2017 and ramping up in the last 12 months.

“They won’t settle for being second or third in 10 years, and we (DMI) get to be the ones to educate them on dairy,” she said, stating that Amazon Fresh dairy offerings today are 90% cows’ milk. “That could have been 50/50. We are a voice for dairy in the category.”

This led into further discussion of DMI’s target and the move to blended product partnerships.

Ziemnisky said “90% of consumers who buy plant-based drinks also buy milk today. The urban/suburban mom trying to get in shape is looking for low fat and looking for flavor. We have to give her more flavor. She is looking for advanced nutrition and things to energize her. She’s buying 27 gallons of traditional milk and 5 gallons of plant-based beverage a year because we did not give her almond flavor and oat flavor. She has to trust that we will give her the products she is looking for.”

Toward that end, said Ziemnisky, “We are blending to specific consumers around their dietary needs.”

“We will see the beverage space set up differently and our manufacturing plants will need to be set up as dual plants to make milk-based beverages because that is where the consumer is going, and it is our job to keep them where dairy is front and center,” he explained, noting that these blends “are shelved with milk so that the consumer is not walking over to the plant-based aisle.”

(In most stores, the plant-based is shelved in the dairy aisle so it’s hard to know how these blended products pull sales from solo-dairy or solo-plant.)

Ziemnisky noted, as farmers have heard before, that, “We have to be relevant, to develop formulations that make sure dairy is front and center, but provide the taste, nutrition and sustainability consumers are looking for.”

O’Brien said DMI’s mandate has been to “build trust” and address “shared priorities” while streamlining dairy promotion to be more efficient.

“We know accountability is absolutely critical,” said Hershey. “Farmers make the program and budget decisions through the significant farmer input” of United Dairy Industry Association (UDIA), the portion of the national branch that represents the state and regional promotion entities.

The bottom line, DMI leaders explained, is that the national decisions, strategies and unified marketing plan are ultimately governed by DMI’s board of 15 farmers, with two-thirds of dairy funding still residing with local leadership, but aligning with the “unified marketing plan” as all the state and regional organizations making up UDIA giving 2.5 cents of the local dime to DMI.

DMI works on two levels, said O’Brien, one being as a “global umbrella that farmers have created to address threats over time.”

The other level, they talked about was the domestic side, focused on youth wellness, developing a “deep bench” of nutrition experts and organizations to work with, and engaging on hunger with the food bank system.

On that “global umbrella” level, they explained that the U.S. Dairy Export Council, formed in 1995 receives $20 million annually in checkoff funds and is made up of the membership of 125 dairy companies, including cooperatives.

The Innovation Center for U.S. Dairy was later formed in 2008-09, with World Wildlife Fund (WWF) at the table right from the beginning  “to bring farmers, cooperatives, manufacturers and customers around common sustainability metrics.” Essentially, WWF has been involved from the beginning in the shaping of the FARM program and the sustainability metrics that are part of DMI’s Net Zero Initiative.

O’Brien and Hershey talked about GENYOUth (formed in 2008-09), saying it was “founded by farmers and brings tens of millions of dollars in from other sources to support dairy’s commitment to youth wellness in schools.”

O’Brien noted that since its founding, GENYOUth has “brought in” $100 million from companies outside the dairy industry to achieve the goal of what they calculate to be over 800 million servings of milk per year, and accounting for what they say are school sales of 400 million “incremental” pounds of milk.

In existence for 12 years, with an annual budget of around $10 million, $4 million of which is line-item national and regional checkoff funding, the percentages show the GENYOUth budget now includes more outside money than inside money; however, there is no clear accounting for the ‘vehicle’ costs of the various staff and fixtures, which would likely be additional. Furthermore, there’s the $6 million paid annually to the NFL, which is DMI’s GENYOUth ‘partner’. The purpose of this money was not divulged by DMI leaders during the session. 

Leaders also spent a good portion of time talking about how GENYOUth “worked tirelessly” to raise $17 million of “other people’s money” to support the distribution of milk to schools as cafeterias shut down during the pandemic. They maintained that without these efforts by GENYOUth, milk and dairy products would not have flowed steadily to children through schools. They said GENYOUth grants were given to 14,000 schools to pay for things like coolers for off-site meal distribution.

“We have insured milk and dairy products got to schools during the pandemic,” said O’Brien. She and Naczi both shared how they believe their organizations “pivoted and kept milk flowing” through schools, food banks, CFAP food boxes and other government feeding programs as well as “educating” schools on how to use the waivers for milk and dairy food sizes and packaging during the pandemic. They described national and regional checkoff organizations as the logistical coordinators for the flow of dairy to hunger channels – even though much of this was connected to the USDA CFAP programs.

They also explained how ADANE staff worked with stores to get the purchase-limit signs removed and to keep the dairy cases stocked during the height of the pandemic shut down last spring.

“We knew foodservice channels would get disrupted and looked at how to be sure dairy was going with and through the industry. With the retail influx of volume (purchases), we looked at how we can work across the supply chain,” said O’Brien, adding that dairy outperformed the growth in the rest of the retail sector by three percentage points during the pandemic.

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

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

By Sherry Bunting, Farmshine, November 19, 2020

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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