‘Good for me, good for the planet?’ GENYOUth drives ‘future of food’ to make future ‘Greta Thunbergs’ of our kids

By Sherry Bunting, Farmshine, May 29, 2020

BROWNSTOWN, Pa. — Two checkoff-funded vehicles are refining the “U.S. Dairy” machine. They are GENYOUth and the FARM program under the Innovation Center for U.S. Dairy (“U.S. Dairy” for short), with a board representing food supply chain stakeholders and NGO’s like World Wildlife Fund.

It has been 12 years since the formation of these checkoff-funded organizations and programs under the umbrella of DMI (Dairy Management Inc).

How many times have we heard that consumers are driving FARM program requirements? Are they?

How many times have we heard that today’s young people – Generation Z – are agents for change, that they are socially and environmentally attentive in their food choices, that they are concerned about the impact of agriculture on climate and the environment? Are they?

The next wave for FARM will be environmental requirements to fulfill a new “sustainability” platform from U.S. Dairy’s Sustainability Alliance.

And the next frontier for GENYOUth is to use our nation’s schoolchildren and the climate change conversation as leverage for an emerging industry vision for the “future of food.”

In fact, it looks like they want to make future ‘Greta Thunbergs’ out of our school kids. (Thunberg is the teenage vegan anti-animal climate change activist from Sweden who was recognized as person of the year.)

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According to a checkoff-funded survey of 13 to 18 year olds via GENYOUth and Edelman Insights, 56% of teenagers said they have heard of the idea of “sustainable foods” or never really thought about the idea of “sustainable foods” and in saying so, also checked the box that they want to know more. The “want to know more” is what GENYOUth is hanging its hat on to drive new education and influence shifts from food choices that taste good and contribute to personal health to food choices that demonstrate the ‘good for me, good for the planet’ mantra — a self-fulfilling prophecy of food and dairy system transformation DMI food partners want children to lead.  — Source GENYOUth Insights Spring 2020 

GENYOUth’s tagline is “Exercise your influence,” and in the Spring 2020 edition of GENYOUth Insights — the organization’s newsletter to schools and “partners” — the main article under the headline “Youth and the future of food” connects the dots.

GENYOUth used funding from DMI and Midwest Dairy, under the guidance of Edelman Intelligence, to do a survey of teenagers about their food choices.

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There are 30 primary companies set on transforming the food system through the Food Reform for Sustainability and Health (FReSH) initiative that is now linked to the EAT Lancet ‘planetary health diets’. Many of these companies are moving into plant-based and lab-cultured alternatives for animal protein.  — Source EATforum.org

Known for its “purpose-driven marketing,” Edelman is the global communications  that receives $15 to $17 million a year in checkoff funds from DMI for contract services. Richard Edelman, himself, is a key member of the GENYOUth board of directors. Many of the global companies getting involved in the EAT Forums, such as PepsiCo and Danone, are Edelman clients. Edelman also ‘loaned’ personnel to work with the EAT foundation from Sweden that launched the now infamous EAT Lancet report, and EAT FReSH (Food Reform for Sustainability and Health) Forums last year preaching “planetary boundary diets” that represent huge reductions in consumption of meat, milk and dairy products.

The minds of children are the next frontier. In fact, this is something Edelman identified in that pivotal year of change for DMI. That year, 2008, Edelman launched its “Edelman Food and Nutrition Advisory Panel” staffed by “globally known food and nutrition experts,” who “provide strategic counsel to the firm’s food and nutrition staff in the areas of obesity, food ethics, food policy, functional foods, health claims and nutrition communications,” according to the Holmes Report.

Among those Edelman panel members were past Dietary Guidelines Advisory Committee members as well as a later appointee to the 2015 Dietary Guidelines Advisory Committee.

Fast forward to 2020, the recent GENYOUth newsletter article states in large bold type that, “What youth know, care about and do might make or break the future for healthy, sustainable food and food systems… The future of sustainability – which includes the future of food and food systems – will benefit from youth leadership and voice.”

The GENYOUth Insights article identifies the problem as revealed by the Edelman-guided checkoff-funded survey: “Youth are twice as likely to think about the (personal) healthfulness of their food over its environmental impact,” and the GENYOUth newsletter bemoans this finding needing action because “teens aren’t thinking too much about the connection between food and the health of the planet.”

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The GENYOUth / Edelman survey (left) of teens 13 to 18 shows pretty much the same trends as the International Food Information Council (IFIC) 2019 Food and Health Survey (right) of 18 to 80 year olds. Environmental impact is just not the food-purchase driver that global food companies want it to be in order to complete their transformation of global food systems. — Sources GENYOUth Insights Spring 2020 and IFIC 2019 Food and Health Survey at foodinsights.org 

Specifically, 65% of youth surveyed said they regularly think about how healthy or nutritious their food is, but only 33% regularly think about whether the food they eat has an impact on the environment.

In fact, when it came to actual food and beverage choices, a whopping 91% of teens said they think about taste, followed by cost (76%), followed by how personally healthy it is (76%). Whether or not the food is produced in an “environmentally friendly” manner was far behind at 60%. (Teens did say “package recycling” ranked high on their list of considerations.)

What’s wrong with teenagers choosing foods and beverages based on taste, cost and personal health? From this reporter’s perspective, those are logical choice factors for maturing young people. Incidentally, those are criteria that bode well for milk and dairy products.

But GENYOUth and friends want to guide teens to make food and beverage choices based on real or perceived “impact on environment.” This opens the door for partnering food companies to do “social purpose-driven marketing” and for organizations like WWF to further influence them.

This would seem to fall in line with the direction of the next round of Dietary Guidelines, which in 2010 became tied more closely to institutional feeding in schools and daycares through USDA administrative rules and the Healthy Hunger-Free Kids Act.

For the 2020 Guidelines, the Committee has ignored good research on saturated fat that was screened out of the process by USDA, and they released a draft report this week that further reduces the recommended level of saturated fat in the diets of children over age 2 and adults.

Back in the last cycle of Dietary Guidelines (2015), the committee attempted to use anti-cattle “sustainability” and “planetary health” as criteria in meal pattern recommendations. At the time, the “sustainability” requirement was directed toward reducing beef (cattle) consumption. The dairy industry was silent, while other animal protein sectors became vocal. One thing to remember is that whatever happens to beef will eventually happen to dairy because cattle are most definitely in the “planetary” crosshairs of anti-animal activists.

The “sustainability” language and framework were ultimately removed from the 2015-2020 Dietary Guidelines, but fat is still the tool.

Back to the Spring 2020 GENYOUth Insights article, a new tagline has been coined: “good for me, good for the planet.”

The walk down the slippery slope begins. GENYOUth and friends, including USDA, want today’s teens to place more decision-making emphasis on the impact of food on the environment. In the Insights article, GENYOUth points out to its partnering companies and schools that kids don’t care enough about the environmental impact of the food they choose to eat.

This is where  FARM requirements and checkoff promotion are headed – toward social purpose-driven marketing as defined by the various supply chain partners that have people on these checkoff-influencing boards. The plan is to indoctrinate schoolchildren on sustainable food choices, then adapt what farms have to do to meet new consumer-driven criteria.

Yes, GENYOUth spent 12 years bringing big business into the schools through its non-profit foundation status. During that time, USDA, mainly 2010-2016 under Secretary Vilsack, has tightened the way Dietary Guidelines are tied to school food, NFL has marketed football through FUTP60 (while receiving $5 to $7 million annually from DMI), the NFL’s longstanding beverage partner PepsiCo received the 2018 GENYOUth Vanguard award and has created one of the largest K-12 foodservice companies in the U.S. Meanwhile, the dairy farmers – who started it all and fund the majority of GENYOUth through DMI – are stuck promoting fat-free and 1% milk, fat free yogurt and fat free cheese.

As reported recently in Farmshine, the partnership with DMI also gave Domino’s access to a whole new $63 million a year business making Dietary-Guidelines-correct cheese pizza for schools.

Through GENYOUth, America’s young people are being “led” into their ordained role as “agents of change” to lead the “future of food.”

The GENYOUth Insights article focuses on two examples of climate activism – holding them up as examples of how young people can and should be energized.

First, they reference the recently released report “A Future for the World’s Children?” produced by the World Health Organization (WHO), UNICEF and The Lancet. Think of this as the youth-version of the now infamous 2019 EAT Lancet report where new “planetary boundary” diets, depleted of animal protein, are recommended for human and planetary “health.”

We’ll call this report “EAT Lancet Junior”, and in GENYOUth’s own description, this report “reinforces the importance of placing children at the heart of United Nations Sustainable Development Goals.”

DMI has been actively working to incorporate these U.N. SDGs into “U.S. Dairy’s” sustainability framework and Net Zero emissions benchmark. This work also began over a decade ago when the Innovation Center for U.S. Dairy was formed and GENYOUth was founded and the FARM program was under initial development.

Lead the children through confirmation bias, get them to become energized activists, respond with a “U.S. Dairy” plan that aligns with that activism, and implement it through the FARM program – further refining who can and can’t be part of “U.S. Dairy” in the future.

Microsoft PowerPoint - Mike McCloskey.pptx

Under “Non-governmental organizations”, the NGO on this flowchart for U.S. Dairy is World Wildlife Fund (WWF).  Brent Loken is WWF’s lead scientist today.  Previously, Brent worked for EAT, the science-based global platform for food system transformation. He was a lead author on the EAT-Lancet report on Food, Planet, Health and is currently working on the roadmaps for how nations will meet GHG goals through changes in food and agriculture.     — Sources farmfoundation.org and worldwildlife.org

DMI knows full well that not all farms will be able to meet the criteria that are coming. In fact, according to a news release from PDPW covering the virtual presentation by Dr. Mike McCloskey, a key member of the U.S. Dairy Sustainability Council, acknowledged this fact.

Meanwhile, GENYOUth quotes from the “EAT Lancet Junior” report, asserting that, “Sustainability is for and about the next generation… We must find better ways to amplify children’s voices and skills for the planet’s healthy future.”

In its Edelman Intelligence survey of teenagers, GENYOUth reveals what it calls the “surprising disconnects and opportunities for stakeholders throughout the food ecosystem to do more to help ensure youth can lead, act and choose wisely in today’s food environment.”

When it comes to this idea of  ‘food that is good for me, good for the planet,’ teens said they currently rely on their families for most of this information and that they trust farmers for information.

But GENYOUth would like to move schools and food companies into this knowledge building arena – using farmers to ‘tell the story’ and teaching kids how to make ‘good for me, good for the planet’ food and beverage choices.

GENYOUth makes the case in its newsletter that now is the time to move toward ‘good for me, good for the planet’ food choice training of youth, which they say “aligns with a growing interest and sense of urgency among the food industry, farmers and others about the future of food and sustainability.”

So far this plan seems like one in which dairy farmers are helping steer the conversation and future choices, right?

Until we read deeper.

“How can the food industry and farmers become helpful and effective messengers around sustainable nutrition information to support youth?” And “How can schools play a bigger role?” These are two questions GENYOUth asks in its spring newsletter.

The answers, according to GENYOUth, are to see schools and food-related sectors become supporters that engage and inform young people about what foods and beverages are ‘good for me, good for the planet.’

Bottom line? The path to the future of food is one that moves the next generation away from prioritizing personal health, cost and flavor to put more emphasis on the importance of how food impacts communities, animals and the planet. DMI executive and former Ag Secretary Tom Vilsack said as much to the Senate Ag Committee a year ago when he asked Congress to help fund the pilot programs on farms that will get dairy where they believe it needs to be.

It’s not hard to understand why DMI is so slow to want to “educate” consumers about dairy products from a nutrition or comfort-food standpoint and why it is putting its checkoff bets on “sustainability” and “animal care.” Promotion of nutrition puts all dairy farmers on a level playing field. Promotion and implementation of sustainability requirements is a method for refining the U.S. Dairy machine.

GENYOUth says it wants young people to tackle the tradeoffs between health and environment and between taste and environment. They want schools and food companies to reinforce the concept that, “We all must take part in helping to sustain a fragile planet.”

We already see this beginning in our schools. A recent Scholastic Weekly Reader made headlines on social media when fake hamburger was touted as “the meat that could save the planet.” We see it in the vested plans of multi-national companies that are moving toward these products and marketing.

But it was the next part of the GENYOUth spring newsletter that was really shocking. Being held up as the example of youth leadership was Greta Thunberg, the teenage vegan anti-animal climate activist from Sweden, the country from which the EAT Lancet report on new planetary diets originated in 2019.

Don’t forget, the EAT Forum has the backing and participation of most of the top multi-national food companies including the top dairy product companies, as well as NGOs like WWF, and the dairy checkoff’s PR firm Edelman.

According to the GENYOUth newsletter: “We all must take part in helping to sustain a fragile planet. The astonishing power of aware, engaged, passionate youth is being brought home to us daily. As a remarkable example, look no further than Swedish teenager Greta Thunberg as the face of the climate-change movement.

“Aware, informed and engaged youth can be a powerful force for the movement toward food that’s ‘good for me and good for the planet,’” the GENYOUth newsletter continues.

Yes, alongside dairy farmer mandatory checkoff funds that launched and are maintaining GENYOUth administratively are the token funds of so-called “thought leaders” — large multi-national food corporations, sleep companies (because USDA is now interested in sleep studies on kids), technology companies, advertising and marketing companies, as well as celebrities and investor philanthropists.

In the name of breakfast cart donations, they are all riding the GENYOUth school bus to make future Greta Thunbergs of our kids.

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DMI details decent dairy conditions on all fronts during industry, media calls

Exports up, Retail up, Food banks up, Inventories stable, Foodservice down but recovering, Future unknown

By Sherry Bunting, May 22, 2020

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CHICAGO, Ill. – How do dairy industry leaders view the status of dairy sales, marketing and promotion and what insights will they share? A few themes emerged from phone conferences with media and producers.

First, it appears that not only is Dairy Management Inc (DMI) working to move product to “hunger” systems, including schools, food banks and charitable organizations, they are also working to reassure consumers — both domestically and overseas — that the U.S. is producing a reliable supply of milk and dairy products, despite the news of so much milk dumping.

After six to eight weeks of supply chain disruptions, milk dumping news, sparse dairy case shelves and/or purchase limits, DMI says national, state and local teams have worked to get stores to remove limits, keep shelves stocked and assure domestic consumers and export buyers that the milk will keep coming.

The news from dairy checkoff leaders is pretty decent on how dairy looks on many of its marketing and inventory fronts. Exports are up. Retail sales are up. Food bank usage and government purchases are up. Inventories are stable. And the previously plunging foodservice sector is recovering.

Meanwhile, dairy farmers received April settlement milk checks in the $10 to $12 range, many with COVID-19 deductions as high as 87 cents/cwt. Some report milk checks netting a single-digit price for April milk. And for direct shippers to Dean Foods, zero checks or deposits were received in mid-May for April milk.

Top dairy leadership talked Tuesday on a media conference call as well as Monday on a producer ‘open mic’ call about some of the dairy market statistics and insight, and how DMI is “pivoting” during the Coronavirus pandemic to “get more dairy in the hands of consumers.”

On the research front — “We need to maintain the things we have to maintain and alter the things we can alter,” said DMI CEO Tom Gallagher in the May 19 media call. One example he emphasized is “DMI’s commitment to publishing milkfat research to keep that front and center.”

On the “open mic’ call with producers the day before, Gallagher said dairy checkoff has been involved in either funding or publishing 59 studies related to milkfat since 2002. He said that the Dietary Guidelines won’t change until there is a “preponderance” of evidence – a “mountain” that is so large — large enough to overcome 40 years of anti-fat dietary advice.

In looking at the list, most are studies related to full-fat cheeses and the role or impact of dairy consumption, no matter the fat content, on various health indicators. Some are studies of milkfat composition, beyond the saturated fat portion, and a handful of the 59 studies pertained to fluid milk of all fat percentages (more on this in a future edition of Farmshine).

On the foodservice front — Sharing data provided to DMI by Inmar Insights, Gallagher said that the foodservice losses can now be measured by transactions but not by dollars or volume, yet.

At the lowest point in the pandemic, the number of sales transactions in the quick serve restaurants (QSR) was down 42% below year ago, but now these transactions are down 20% from year ago.

For full-service restaurants, transactions were down 80% at the height of the pandemic, and now they are 60% below year ago as more full-service restaurants adopt curbside and contactless meal options.

“At the height of the pandemic, 70% of consumers said they would avoid eating outside the home. That percentage is now 50%, and we believe it will reduce over time,” said Gallagher.

Various fresh dairy products

On the retail sales front — Gallagher shared that fluid milk sales pre-COVID were trending 5% below year ago. “But in the first two weeks of the pandemic, fluid milk sales jumped 34% higher, and now, in the past month or so, fluid milk sales are averaging 10% above year ago,” he said.

Looking at products that surround a milk choice, Gallagher noted that cereal sales have been declining 1 to 3% per year pre-COVID. But in the first two weeks of the pandemic, cereal sales jumped 78% and are now averaging 17% above year ago.

He said milk used on cereal has historically accounted for 3% of all fluid milk sales, so the rise in cereal sales is at least a partial factor in the increased fluid milk sales, according to Gallagher.

Looking ahead, Gallagher noted that DMI expects to receive “deep analysis” this week about “why people buy what they bought” both in the first two weeks of so-called “panic buying” and for the four to six weeks after as conditions stabilized.

“There is a lot of conjecture and a lot of opinions out there,” said Gallagher, “But we can’t be in the business of taking our opinion of nutritional or comfort reasons, we really have to understand what was the motivation.”

Gallagher noted that the total all-beverage sector saw very large increases in sales post-COVID, and that the alternative dairy beverage category showed very high percentage increases but are still a very small percentage of volume.

“On an incremental basis, (non-dairy alternative beverage) increases are nowhere near what the increase was for fluid milk sales,” he said.

Another retail category DMI highlighted was frozen pizza sales. “Historically, frozen pizza sales were flat, pre-COVID,” said Gallagher, adding that in the first two weeks of the pandemic, frozen pizza sales jumped 120% over year ago, with sales over the past month averaging 39% higher than year ago.

“That’s just as important to us as cereal sales,” said Gallagher.

Looking ahead, he noted that the “deep analysis” of why consumers buy what they bought will be used as a benchmark and monitored periodically for changes.

“Ultimately, what happens to sales will not be determined by some great ad or some smart thing that one group does, it will be determined by what is the behavior of consumers after this pandemic,” he explained. “We know going into this pandemic, we have moved from consumers spending 90% of their food dollars in the home in the 1950s and 60s to over 50% spent outside the home. Now, those at-home dollars are way up.

“At the end of this, what will their behavior be? Will they eat more at home? Will they keep eating cereal? Or will they go back to breakfast on the go? Will they still do more baking?” Gallagher wondered aloud.

“The idea that we can just educate and the problem will be solved, it wouldn’t,” said Gallagher. “If you look at the competition up and down the grocery aisle, there are two aisles with no dairy in them in the nutrient-rich niche market for on-the-go (shelf-stable). That could have been dairy, but now it’s not, and we have to play catchup.”

He said consumers “eating at home can be a hope that would be huge for the white gallon, but if we think the white gallon is the innovation of the future, it’s not.”

While Gallagher acknowledged that these current retail buying trends during COVID-19 bode well for fluid milk and butter, and DMI can market toward that once they understand why, he also countered these trends, observing that, “If consumers go back to where they were, then we are back to the same opportunities and issues that were always there. The reality will likely be somewhere between those two extremes.”

Gallagher pointed out that many people believe consumers are responding to messages about dairy nutrition, and that it might seem to be a good idea to “market to nutrition, but it’s not that simple,” he said. “What we do for dairy farmers has to be based on the reality of the data.”

In other words, DMI will market to the why’s behind the sales data once they receive the next layers of  “deep analysis” – to continue a promotion direction of following consumers with partner ‘innovations’ instead of leading them with an emphasis on product information.

On the export front — “The numbers look better than we anticipated for the first quarter of 2020 despite the virus, and we hope this will continue for the year,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council (USDEC).

Specifically, Vilsack reported that the U.S. exported 109,000 more metric tons of dairy products in the first three months of 2020 as compared with a year ago, and these exports were worth $528 million more than exports a year ago.

He expects to see a decline in exports into the summer with a rebound later in the year.

He said USDEC is “using aggressive social media in all export markets for U.S. cheese and dairy ingredients to make sure buyers know milk is still being produced here.”

According to Vilsack, export buyers are diversifying their purchases and spreading supply risk, “so some of that market share is coming our way from diversification,” he said. “Our price-competitiveness is good at the moment, and this is something we watch, so our ‘Next 5%’ plan for growth continues even in this much-changed landscape.”

USDEC is marketing with Costco in China and Southeast Asia, including significant advertising about American-made cheeses. In the Middle East, recipes using cheese are being included in grocery bags and hung on doorknobs, said Vilsack. Culinary efforts are also being geared to encourage the next generation of overseas chefs to use American cheeses.

On the inventory front — Vilsack noted that USDEC sent a “warning shot” letter to the European Union and other to be sure any dairy intervention does not lead to a stockpile of powder or dairy products like the EU accumulated in 2015, which had led to three of the past five years of dismal global milk prices.

In a producer call the day before, Gallagher’s guest Jim Mulhern from National Milk Producers Federation described U.S. dairy commodity inventories as “not that bad.”

Mulhern said some dairy product stocks were building at the start of the pandemic, but mostly inventories are “not really burdensome right now. We are not in bad shape (inventory-wise). That’s one reason barrels moved is stocks are not that large right now,” he said.

“That’s one of the reasons we focused on the need to have USDA buy products now and get them into commerce through feeding programs and into food banks right away. The need is there, and we have the product,” said Mulhern. “We don’t want to go back to holding product in storage and selling it on the market later.”

On the food bank front — Vilsack confirmed that there is a 70% increase in overall food demand by the food bank system, and Gallagher added that fluid milk is still the most requested item.

“Food banks get most of their food from retail, and this is a challenge at a time when the retail sector is challenged by this higher demand,” said Vilsack, who in addition to being CEO of the dairy checkoff-funded U.S. Dairy Export Council, sits on the board for the Feeding America national food bank system.

Vilsack noted there is a significant demand for volunteers and for equipment such as refrigeration to handle these higher volumes of food being supplied to serve the expanded need brought on by around 30 million newly unemployed workers during the COVID-19 economic shut down.

National Dairy Board president Barb O’Brien talked about the “emergency action team” that was assembled after foodservice and restaurant trade began to shut down with business restrictions.

“We shifted our focus,” said O’Brien, noting that DMI partner Kroger, with its 16 milk plants, got involved in moving “hundreds of thousands of gallons of milk into the hunger system.

“We also worked with other processors on fluid milk, cottage cheese and turning 40-pound blocks into smaller packages, and we worked with processors to solve infrastructure challenges around refrigeration, to get coolers and refrigerated trucks placed at pantries,” O’Brien said, explaining that their teams are looking at the supply chain issues in four quadrants: schools, hunger, foodservice, and retail and then “working with farmers, processors and cooperatives to redistribute product.”

For school feeding, some of the regional checkoffs developed free emergency menu resources, donated thousands of coolers at alternative school feeding sites, worked with school nutrition personnel and USDA to help translate the rules – to understand the waivers that allow bulk or gallon containers for multiple meal service.

On the schools front –  Also on the media call was Alexis Glick, CEO of GENYOUth. She talked about the COVID-19 School Fund that was launched on March 30 two weeks into the closure of schools and non-life-sustaining businesses.

The purpose of the fund, which has raised $5.5 million to-date, is to provide grants and resources to help schools package, distribute and deliver meals in the grab and go model. Glick said they have received $33 million in requests so far as 12,000 school buildings, to-date, have applied for individual $3000-grants for equipment needed for such distribution.

“So far, $5.5 million in cash and equipment has been awarded to support over 6000 schools, said Glick. She estimates that these 6000 are collectively delivering 50 million meals per week (two meals per day).

“We are aiming to approve 250 to 500 grants per week by prioritizing schools that are serving the highest number of meals with the highest numbers of (USDA) free- and reduced lunch eligibility,” she said.

Glick noted that “alongside dairy farmers,” support for the COVID-19 School Fund has come from financial institutions, Domino’s, PepsiCo, National Football League, United Healthcare and a recent partnership with the Rockefeller Foundation as well as private donations from chefs, athletes and celebrities.

“We are working with our health and wellness partners, our partners at USDA, the School Nutrition Association, celebrities and media entities to get the word out and draw awareness. Just because the school year ends, doesn’t mean the end for hungry kids,” said Glick.

GENYOUth’s technology partner SAP has developed a “resource locator” called SAP for Kids to connect families to school meal resources in their zipcodes.

Glick also said school meals will convert soon to summer feeding sites and then in the fall, meals at schools will likely change based on CDC recommendations for eating in classrooms instead of cafeterias. “Schools will need our help to buy equipment that they will need for that,” she said.

Moving and messaging — As mentioned in the Farmshine article last week, O’Brien again touted the “deep relationships” dairy farmers have with ‘some of the biggest foodservice partners.” saying those partners “extend what we can do to immediately drive incremental cheese volume.”

An example she gave is an extra two ounces of cheese on pizzas and new national ads to be run by Papa Johns and Pizza Hut now through the end of August about more cheese. She also highlighted Domino’s new concept launching carside delivery full-tilt in July, saying this will move “more cheese.”

Meanwhile, said O’Brien, the “Undeniably Dairy” messaging is focused on “building trust and bringing joy by reassuring people that dairy farmers and the dairy community are essential and working tirelessly to ensure a safe and consistent supply.”

They are also repurposing content to provide virtual farm tours for parents and teachers to access for at-home curriculum and promoting recipes.

“Consumers are still interested in where their food comes from and how it is produced,” said O’Brien. So, these “tell your story” and “sustainability” themes the checkoff has been focusing on pre-COVID will continue, but are changed a bit to conform to stay-at-home communication venues.

Among the planned media segments leading up to June Dairy Month are the one Monday, May 18 on Fox and Friends featuring Maryland dairy farmer Katie Dotterer-Pyle and the 30-second video produced with footage from several dairy farms that will be shown 20 times in the following weeks and will be picked up by other stations through online “streaming.”

She also said that the MilkPEP television commercial that was running about dairy farmers, haulers, bottlers, and store employees has now been “co-branded” with a large Undeniably Dairy logo, it reinforces the essential care of the entire dairy supply chain.

O’Brien hinted at a surprise promotion to happen May 21 in partnership with a major pizza chain on late-night-TV — a ‘pizza party’ celebrating 2020 graduates as their traditional graduation ceremonies have been suspended by COVID-19.

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Consumer trends amid COVID-19 have DMI a bit perplexed

Gallagher skeptical about ‘comfort and nutrition’, wants data from partners, not opinions. O’Brien says ‘future of dairy’ may go fast-forward

Various fresh dairy products
Data shared by DMI in the May 4, 2020 industry call shows all retail dairy sales categories are up significantly year over year. DMI CEO Tom Gallagher noted that the level of increased sales of fluid milk compared with a year ago are “still relatively consistent” as of the end of April.

By Sherry Bunting, Farmshine, May 15, 2020

CHICAGO, Ill. — Amid the supply chain disruptions brought on by COVID-19 restrictions, Dairy Management Inc. (DMI) and the National Dairy Board are having weekly conference calls. They say 100 to 150 farmers have been participating.

And they are scratching their heads a bit over what to make of the now ‘unleashed’ consumers.

‘Unleashed consumers’ is the phrase I have coined for describing consumers now in control over their food, beverage and dairy choices, now that they are not so completely influenced by away-from-home and institutional feeding that adhere more closely to the dietary guidelines.

This has emerged most notably in the huge increases in whole milk sales that have boosted the fluid milk category well over year ago levels to the first year-over-year increase last month in decades. It has also shown up in the demand for butter, full fat cheeses and other cream products that sell out quickly at retail and prompt spot shortages.

On the May 11 DMI call, Russell Weiner, Domino’s COO and president of the Americas, was a guest and he highlighted his company’s partnership with dairy checkoff since 2008. That is a separate and quite interesting story. One thing he referenced is that pizza sales have been strong through the pandemic, and that consumers historically spend 5% of their disposable income in the quick-serve-restaurant (QSR) sector through recessions and other crises. This appears to be holding true amid the pandemic.

DMI CEO Tom Gallagher and National Dairy Board president Barb O’Brien also gave updates about what DMI is doing about consumer buying patterns and future trends. It was evident in the discussion that DMI has a future of food concept for dairy based on prevailing insights from its partners and does not want to deviate from this framework unless data from partners points to a true shift in consumer purchasing and unless they have a “why” behind the shift.

Gallagher stressed that DMI, and the states and regions, are collecting every piece of information from every partner they can to “see what it will mean post-COVID or during COVID. There are a lot of opinions out there,” he said, “but it’s too early for us to put our stake in the ground as to this is what it will be.”

He talked about DMI’s data partner Inmar Analytics, which did the recent 2019 “Future of Food Retailing” report. “At no charge to us, they are looking at the buying patterns after the initial ‘panic buying,’” said Gallagher. “We know what people bought, but why did they buy it? Was it because they were interested in comfort food or nutrition? Or were they hoarding? Or were they baking more? I am a data guy. I want to see the data as to why they buy what they bought.”

In a skeptical tone, Gallagher went on about these so-called “opinions” on the buying patterns revealed by COVID-19 impacts.

“Some say, ‘Oh, it’s a return to nutrition.’ And some say, ‘Oh it’s a return to comfort food.’ But what really drove their behavior? And what strategies should really influence our thinking about the future? We don’t know. In the meantime, we will collect information,” Gallagher said. “We all have opinions, but we want to be informed with data, not opinions, to design how we move forward.”

Gallagher mentioned a study coming out this week on what food companies are thinking will be the patterns after COVID. When pressed later about how to hang on to the new-found bump in purchases of certain dairy products at retail (such as whole milk and butter), given that some of these purchases may be relatively new for some consumers, Gallagher was steadfast on not changing the future plan because of current “opinions.”

He stated — again — that Inmar Analytics will be able to tell DMI “exactly what shoppers put in their baskets and compare it to what they put in prior to COVID. They will be able to tell us what changed and through technology, why did that change occur, that’s the data I want,” he said.

One ‘why’ for ‘what changed’ (in this reporter’s opinion) may be too subtle for the Inmar Analytics surveys to detect — that is the nuances of just how much consumers have been controlled by the Dietary Guidelines pre-COVID, without even realizing it. There is rarely any talk from DMI about what those flawed guidelines — set by the government with very little opposition by the dairy industry — actually do to buying patterns when people are consuming 54% of their calories away from home and much of that in schools, workplaces, quick-serve-restaurants and other institutional settings where food choices are more “formulated.”

The COVID-19 pandemic has abruptly unleashed consumers nationwide from the fat-restrictive Dietary Guidelines. Now, consumers are able to use more of their own discretion and choice apart from institutional food settings, guidelines and formulas. Some experts ‘reading the tea leaves’, such as Nielson Global Insights, observe that after a significant event like a pandemic of this magnitude, consumers can be expected to stay with some of the choices that made them feel healthy and safe during the pandemic, once the world gets back to a new-normal. That could be significant for dairy — but it may not line up with the ‘future of dairy’ pathway set by DMI and its partners.

O’Brien explained that dairy checkoff teams are actively involved in both long-term and immediate efforts.

“We are looking at the future of dairy. COVID-19 may fast-forward some of that future to happen more quickly,” she said. “In the immediate term, our retail teams are working with MilkPEP, to keep stores stocked and address the concerns people have about value, and we’re doing things with e-commerce to offer recipes that extend the use of the dairy products they bought.”

DMI’s ‘future of dairy’, as we know, is built on partnerships, innovation, and promotion of dairy farmers and sustainability and animal welfare practices, not education and promotion about milk and dairy products. It is well known that the innovations over the past decade have been focused on consumers eating dairy, not drinking it; and in the fluid space, these innovations emphasized through DMI partnerships have focused on ultrafiltered, shelf stable, lower-fat dairy beverages and blends and away from the whole milk gallon jug.

But we also can see that in their time of freedom to choose for their families amid the pandemic, consumers are reaching for the whole milk gallon jug. In fact, prices are rising on whole milk by $1 to $2 per gallon, while other fat content milks have remained the same, and still sales of whole milk are strong.

A producer from Wisconsin on the call asked Gallagher to make sure to track convenience store purchases when gathering the data, not just grocery retail, noting that many consumers buy their milk at convenience stores. Gallagher responded that they may have to check with another data partner for that piece.

O’Brien also stressed that while they gather data about consumer patterns, DMI will continue to chart the path it has set. That is to “gain the trust of consumers and celebrate dairy’s role in sustainably nourishing families and communities,” she said, adding that a media segment is being prepared for Fox and Friends next Monday morning, May 18 that will feature Katie Pyle of Cow Comfort Inn Dairy in Maryland.

“That piece will help bring to life our dairy farmers’ commitment to sustainably producing nutritious food,” said O’Brien. An estimated 2.5 million viewers will see the spot, and it will be supplemented with “live-streaming” on two other network stations where farmers will be interviewed to “tell their story.”

“That piece is supported by a 30-second video drawing footage from many farms and will run this week to the end of the month in streaming venues,” said O’Brien. She also explained that DMI has been working extensively with MilkPEP (fluid milk processors promotion) and that MilkPEP’s ‘Love what’s real’ ads are on television right now during the COVID period (when everyone is at home). The ads review the essential role of dairy farmers, and others involved in the dairy supply chain, she said.

“We co-brand these ads using the Undeniably Dairy logo, and design ways to help them reach consumers with these interests,” said O’Brien. “That’s our runway into June Dairy Month.”

While Gallagher said he expected to have some data insights from Inmar Analytics as early as next week, he added that it will begin a process to use technology to interact with consumers to learn more of the why’s behind their choices so that DMI — and its partners — can “appeal” to those drivers.

Stay tuned.

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From USDA to checkoff, no one in farmer’s corner

By Sherry Bunting, Farmshine, April 17, 2020

BROWNSTOWN, Pa.– From the fortress of the USDA to the ivory towers of the dietary command to the branches of the checkoff government-speech machine and the centralized, globalized food system ‘partners’ in between — No one is in the farmer’s corner. Not even the people paid by the farmers to be in their corner.

This much is crystal clear by now in the collapsing markets and stark realities laid bare by the COVID-19 pandemic.

The curtains have been opened.

And the usual players do what they do.

They pat themselves on the back, converse about their insights from within their echo-chamber, and lecture those who would dare call attention to the sight before us or deviate from the script.

Over the last week, dairy checkoff newsletters have bragged about what they are doing for dairy demand amid the deepening crisis; how DMI is “adjusting to move more dairy.”

Yep, the bulk butter and bulk cheese and bulk powder plants in growth areas are moving more dairy — right into the already bursting at the seams cold storage inventory warehouses.

Few if any reports from states with these large plants indicate any milk dumping whatsoever.

Butter inventories were already 25% higher than year ago heading into the COVID-19 pandemic and cheese inventory was already growing too.

Reports indicate such fully functioning cheese and whey or powder plants are running full tilt, while a shopper has to store-hop through three or more establishments to find a package of butter, walk into Walmart and see rows of empty cheese racks, try to walk out of a Walmart or Sam’s Club with two gallons of milk and be forced to give one back.

Other supermarkets aren’t much better, except for the smaller family-owned markets. Pictures and texts continue to pour in, while our leaders assure us that the purchasing limits are really lifted.

Go to Kroger’s website (a DMI partner) and see their explanation of why they’ve raised the price of milk. It’s because there is a shortage, they say, while farms all around them are forced to dump milk. Just six weeks ago, a Kroger executive I spoke with said, ‘no we can’t raise the price of milk — it was $1.25/gal pre-COVID (not in PA of course but elsewhere).

I was making the point that we have loss-led and commoditized this deal long enough. Please respect the milk. “No,” I was told, “raise the price? How is that going to sell more milk?”

What is Kroger doing today (and Walmart and other heavy hitters for that matter)? NOW, they are raising the price, even canceling some orders without much to spare, as they are being asked to stop limiting sales.

Meanwhile farmers are forced to dump milk.

As the commodities crash with barrel cheese at around $1/lb and butter headed there too, are the food system heavy-hitters holding back to buy that higher-priced inventory on the cheap just to turn it around and charge more?

We are getting to see how the system works — how the losses and consolidation of a decade or more are threatening our farms and food security. But leaders and policymakers are still convinced this system is the best, and thanks to new stricter rules coming on animal proteins and fat, it’s about to get better, more diluted, and void.

Take the DMI update in the ADA Northeast newsletter from April 6, how proud they are of the “seven ways checkoff is working for you during COVID-19” and how they are “adjusting to move more dairy”, how GENYOUth is “keeping the meals flowing to students”, while in reality the real school chefs and lunch ladies — even bus drivers — are out on the front lines figuring it out for real on their own every day; how proud they are that the National Dairy Council “sorted through milk myths.”

Now that last one is a doozie. Here’s one of the seven ways checkoff is working for you: “National Dairy Council is among the expert organizations to debunk claims that milk can help ward off coronavirus.”

Remember the news about milk and it’s immune-building properties? Even Hoards Dairyman noted milk was “flying off the shelves” as consumers sought the health benefits and comfort of milk.

Remember how DMI tells us “you can’t educate people to drink what you want them to drink?” How “we want to move people away from the habit of reaching for the jug and toward the new innovative products?”

It wasn’t even a week after fluid milk sales skyrocketed 40% that the National Dairy Council helped debunk some of that immune-building “myth” in Reuters story.

And yes, rest assured, DMI is talking to “your (their) partners” to get them to “move more dairy”.

So here’s the clincher. Watching the President’s daily COVID-19 press conference Wednesday evening (April 15), it really hit home, bringing together so much of what I have seen and heard over the past few weeks and the months and years before that.

Agriculture Secretary Sonny Perdue was part of President Trump’s daily presser Wednesday, and I was hopeful when he went to the microphone that he would talk about impact to food and agriculture during the COVID-19 pandemic.

He told Americans that “Our food system is strong, resilient and safe,” despite the bare shelves and limits on purchases that people are seeing in supermarkets.

“In the United States, we have plenty of food for all of our citizens,” Perdue said. “I want to be clear, the bare store shelves that you may see in ‘some’ cities in the country are a demand issue, not a supply issue.” (Huh? At least he didn’t phrase it the way Pennsylvania’s Ag Secretary does, saying in a PDA public service announcement to radio and television stations that store limits, bare shelves and dumped milk are a ‘hoarding issue”, and saying in a dairy industry conference call: “this is what happens when people hoard food.”

No Mr. Secretaries, this is not hoarding and it’s not a ‘demand’ issue, it’s a centralized, consolidated, globalized food industry structure issue.

Back to Sec. Perdue’s moment before the American people… Perdue said simply that there has been a large shift from people eating in restaurants and fast food businesses, and now eating at home, which has spiked in the last few weeks and placed a high demand on grocery stores.

“Our supply chain is sophisticated, efficient, integrated and synchronized, and it’s taken us a few days to relocate the misalignment between institutional settings and grocery settings.” Perdue said.

Bingo. The accelerated creation of this machine over the past decade has been designed by government policy from the flawed dietary guidelines, to the government speech farmers are forced to pay for, to the mergers and acquisitions and antitrust behaviors, to the globalization and centralized decision-making, to the erosion of local/regional milksheds and foodsheds.

Yes, Mr. Secretary, that sophisticated, efficient, integrated, synchronized food supply chain has moved our country closer to cow islands and food deserts and fracturing of regional food security.

Some of the best minds in agriculture economics are seeing it. Consumers are waking up to the realization of what that means when the chips are down. They are watching their communities’ farmers dump milk, depopulate poultry flocks, send milk herds to slaughter.

This pandemic has peeled back the band-aid covering gaping wounds inflicted for years, and now when it is open and bleeding for all to see, the Secretary reassures the nation that this big beautiful bountiful ag food system simply needs to “relocate a misalignment.”

Tammy Goldammer, a cattle rancher friend of mine in Missouri put it bluntly in a social media post after listening. Here are some of her words:

“Production Ag People?

Did you happen to listen to US Ag. Sec. Perdue’s comments today at the Rona Update press conference? Were you reassured about your occupation of raising the highest quality protein sources to feed the world?

Did you find it interesting that there was no mention about “producers” and what is going on with what they raise to feed people?
1. There was no mention of the killing of millions of ready to harvest chickens and turkeys…to leave them to compost.
2. There was no mention of the dumping orders for milk and the orders to let cows go dry and to sell the dairy cow herds.
3. There was no mention of the shuttering of ethanol plants and the resulting depletion (no supply) of by-products utilized in the livestock feeding industries.
4. There was no mention of the Mercantile Exchanges and the crashing commodity prices for livestock, dairy and grain futures.
5. There was no mention of the bankruptcies and insolvencies of feeders who grow the nation and the world’s protein sources.
6. There was no mention of the sucking sound to the south of the beef cattle industry.
7. There was a mention there are a few “slaughter” plant closures due to Covid-19 being detected in some employees.
8. There was a mention that our nation’s food supply is abundant and there should be no fear about food availability.
Do you all like math? Mr. Perdue? Your commentary today to assure the American public was absolutely “void” of speaking to the producers/people who produce what you stated is in good shape and rest assured there are no shortages.
To say I was “stunned” at your “void” on the big picture, well, let’s say I was totally bewildered.”

But never fear oh sophisticated, efficient, integrated and synchronized food system, President Trump followed the Perdue comments with news that there is $15 billion in tariff money left in Sec. Perdue’s charge to help farmers who were targeted and he gave the Secretary the go ahead to use it.

Later this evening, word came that the government will begin buying milk and meat. Yes, as mentioned by Pennsylvania’s own Secretary in his PSA ‘stop hoarding food’… ‘food banks need the food’… ‘we have a system…’

Yes, the integrated centralized system is the proper channel while communities take care of their own with whatever resources they can muster. Good people in communities like mine right here in Lancaster County, Pa. are buying milk, giving it to the needy or seeking processors (for pay) to process milk headed to manure pits so it can be donated, only to bump up against that integrated system.

Kudos to those businesses in the community who are buying milk to give to the needy or stepping up to allow their smaller processing plants get milk ready for food banks before it is wasted.

The efficient, sophisticated, integrated, synchronized food system is not. But it will when the price is low enough and the government starts buying.

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Surprise. Surprise. Whole Milk is on the rise!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Whole milk checks all the boxes.

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

What can be done? What can be accomplished?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This is just a start.

 

Coca-Cola now sole owner of fairlife, beyond the headlines

lead-fairlife (2)By Sherry Bunting, Farmshine, Friday, Jan. 10, 2020

CHICAGO, Ill.  The Coca-Cola Company announced Friday (Jan. 3) that it has acquired the remaining stake in fairlife LLC from its joint venture partner Select Milk Producers, a 99-member cooperative run and founded by Dr. Mike and Sue McCloskey. Mike McCloskey is also co-founder and chairman of the board of Fair Oaks Farms, and he was chairman of the Sustainability Initiative of DMI’s Innovation Center for U.S. Dairy in 2014, when fairlife was officially launched.

As a result of the recent transaction, Coca-Cola now owns 100% of fairlife, up from its previous 42.5% minority stake, according to company statements.

Financial terms were not disclosed.

According to a company statement, fairlife will continue to operate as a standalone business and will continue to be based in Chicago, where the brand got its start as a joint venture of Select Milk Producers and Coca-Cola, and received partnership grants for research and promotion through the Innovation Center of the checkoff-funded Dairy Management Inc. (DMI).

“We are excited for the next chapter of fairlife’s growth and innovation,” said fairlife CEO Tim Doelman in a press release, emphasizing the strength and scale of the Coca-Cola Company.

“It’s important for fairlife to continue to operate as a standalone business based in Chicago,” stated Jim Dinkins, president of Coca-Cola North America in a press release. “This will continue to give Tim and his team the space and running room they need to innovate and build the fairlife brand in a unique and fast-changing category.”

The fairlife LLC launched in 2012 to make use of a patented cold-filtration process known as ultrafiltration, which removes some natural sugars (lactose) while concentrating milk’s protein and calcium. The launch began with a high-protein milkshake called Core Power and has grown to offer a portfolio of products in what Coca-Cola calls “the fast-growing value-added dairy category in North America.”

In addition to Core Power, the line of products includes fairlife ultrafiltered milk with 50% more protein and 50% less sugar, fairlife DHA with DHA Omega-3 fatty acids, fairlife (drinkable) smart snacks, fairlife nutrition plan (shakes), and the new fairlife creamers for coffee.

Coca-Cola reports fairlife sales have grown by double-digits each year since 2014, playing a big role in what the company sees as steady growth of value-added dairy products in contrast with the traditional fluid milk category. The brand has been supported by the reach of Coca Cola’s distribution, both through the Minute Maid system and Coca-Cola bottlers across the country.

According to IRI data, fairlife’s first-year sales were $62 million, representing 0.36% of market share in 2014. According to Nielsen AMC, fairlife surpassed $500 million in retail sales last year, an 8-fold increase and representing just shy of 3% of market share.

A new fairlife milk facility is under construction in Goodyear, Arizona to expand production beyond its current plants in Waco, Texas and Coopersville, Michigan. In 2018, fairlife launched its products for sale in Canada and will begin local production and sourcing in Ontario this spring.

According to Dinkins, Coca-Cola “will continue to ensure that fairlife has the best distribution possible and will be here to provide resources and expertise in areas such as sustainability and supply chain management to make the brand stronger and better for the future.”

In the same week as the Coca-Cola announcement on acquiring whole ownership of fairlife, a joint public statement was released by fairlife and Fair Oaks Farms announcing their new and evolving four-part animal and worker care platform as their long term response to the animal abuse videos that became public last June involving one of the 12 separate dairies at Fair Oaks Farms. This was also mentioned in the ownership transaction press packet.

“To guide this journey, we’ve assembled a fairlife Animal Welfare Advisory Council to ensure we are both learning and leading for the short- and long-term,” Doelman stated in a public statement. “We’re working with our supplying farmers to outline more detailed animal welfare policies… investing with and in our farmers … And we continue to require that every farm in our supply chain is subject to regular third-party unannounced audits with clear action plans for learning and improvement after each audit.”

DMI officials have indicated funding promotion and exhibits at Fair Oaks Farms’ visitor center an hour south of Chicago in Indiana. However, DMI indicates that its financial grants to fairlife for promotion ended in 2019. To receive DMI promotion funding, companies with approved innovations must spend a comparatively larger amount of their own funds.

Available tax forms for 2017 and 2018 list DMI grants to fairlife of $8 million for promotion in each of those years, and prior support was available from affiliated research and development resources in the Chicago suburbs of Rosemont where DMI and Fonterra are both located.

Ultrafiltration is a process that can vary by dairy product application and is used around the world. A 2018 Transparency Market Research report pegged Coca-Cola among the companies it listed as “key players operating in the global ultrafiltered milk market, along with HP Hood LLC, Idaho Milk Products Inc., Fonterra Co-operative Group, Kerry Group, Tatura Milk Industries Ltd., Darigold Ingredients Company, Erie Foods International Inc., Enka Sut Company, Grassland Dairy Products and others.”

In 2017, the FDA said ultrafiltered milk could be used to make any fresh cheese product.

While fairlife milk is still considered a fresh product with a 90-day shelf-life, some products in the lineup are shelf-stable and aseptically packaged.

Dr. McCloskey confirmed in a presentation on “the road to innovation” at the 2016 Georgia Dairy Conference that fairlife ultrafiltered milk was at that time designated a Class I fluid milk product; however, some of the other beverages in the lineup are Class II.

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Politics of whole milk, part 2: Vilsack banned whole milk in schools, gets dairy checkoff’s top pay

By Sherry Bunting, Farmshine, Dec. 13, 2019

The former Ag Secretary instrumental in removing whole milk from schools is now the highest-paid executive at Dairy Management Inc. (DMI) whose virtual $1 million/year in 2018 came from dairy farmers who are going bankrupt.

Farmshine Editor’s Note: Sherry Bunting has written a lengthy, well researched commentary on how the dairy economy and dairy product promotion and marketing evolved over the past decade with Tom Vilsack at the helm. Vilsack served as USDA Secretary in the Obama Administration and is the current chief of the U.S. Dairy Export Council (USDEC), an affiliate of Dairy Management, Inc. Wherever he has been since 2009, Vilsack is unquestionably one of America’s most powerful influencers when it comes to dairying. And the outcome has seldom been favorable to the nation’s milk producers. Part I of this reportappeared in the December 6th edition of Farmshine, page 20. Part II follows

In my journalistic pursuits of the past decade, two statements by checkoff-paid executives and dairy checkoff board members now reverberate in my mind:

1) On milk as a beverage: “Fluid milk is dead, we have to stop beating that horse and innovate for these new beverage markets.” – 2016 during questions after a presentation by a USDEC checkoff-paid employee at a meeting of dairy policy analysts and economists.

2) On dietary guidelines and school milk: “They are a different breed. We have our own plan. We have a friend inside the White House. We are already working with someone on this. And we finally have a drink that consumers want (fairlife).” — 2015 phone call to me from a DMI board member who also served on DFA’s board, challenging an article I had written that year. In the course of our conversation, he made this comment in response to my question to him asking why the dairy industry was being silent on the 2015 Dietary Guidelines that year, and why dairy was not joining forces with beef to push the solid science on animal fat as revealed in Nina Teicholz’s book Big Fat Surprise. I had also asked him why they weren’t supporting the beef industry’s opposition to the “sustainability” driven parts of the 2015 dietary guidelines.

In his Ag Secretary role in 2010, Vilsack was instrumental in the creation of GENYOUth through the MOU signed between USDA, National Dairy Council (Dairy Checkoff) and the NFL. (In fact, as Ag Secretary, Vilsack appointed some of the current Dairy Board members who then hired him at the end of the Obama administration as a DMI executive vice president and CEO of USDEC.)

Fuel Up and Play 60

USDA Photo from Feb. 4, 2011 where then Agriculture Secretary Tom Vilsack spoke to young people at the Fuel Up to Play 60 (FUTP60) event held at the Sheraton Hotel in Dallas, Texas before the 2011 Super Bowl, the same day that the MOU was signed between NFL, USDA, Dairy Checkoff and GENYOUth to focus on ending childhood obesity with fat-free / low-fat foods and beverages and 60 minutes of daily exercise. And so, a decade later… here we are so much farther down this wrong road.

Today, GENYOUth is the bus on which more companies each year are hitching a ride into the schools — paid for primarily by dairy farmers in effect funding their own demise. Meanwhile, dairy farmers are the only ones not free to fully promote their best product, being relegated and regulated to government speech on fat-free / low-fat.

When Vilsack was presented the Vanguard Award during the 2017 GENYOUth Gala aboard the U.S.S. Intrepid in New York City Harbor, former President Bill Clinton spoke his accolades, and congratulated him on being the one to overcome the hurdle of getting beverage calories included in the school meal calculations. It is the very thing the current Senate Bill seeking to allow whole milk in schools would reverse.

Bill Clinton, a vegan, went on in his 2017 GENYOUth Gala speech to emphasize how beverages were a “huge” problem in the obesity epidemic, that we don’t think about how many calories kids consume in a drink, and that regulating school beverages was a big step forward on that front.

He was talking about whole milk. Whole milk is named, specifically, on the list of beverages prohibited from sale on school grounds during school hours.

And yet plenty of PepsiCo beverages — made specially to meet the 60-calorie threshold with a combination of high fructose corn syrup and sucralose, including Gatorade and Mountain Dew Kickstart — are welcomed on those school lunch “smart snacks” acceptable beverage lists.

Vilsack started with DMI six days after the Obama Administration ended in January 2017. But 2018 was his first full year as a DMI executive, and he has been busy earning his highest-paid status.

In May, Vilsack wrote about how the U.S. dairy industry would meet its new goals to export 20% of production, and he praised the record level of exports in 2018 as “a banner year for exporters.” (We all know 2018 was anything BUT banner for dairy farmers paying his salary. In fact, export volumes were higher in 2018 than in 2017 and 2019 while prices paid to farmers were lower in 2018 than in 2017 and 2019.)

In June, Vilsack testified before Congress that the government should partner with the dairy industry to pay ‘pilot farms’ to develop and test the innovations “U.S. Dairy” will need in order to reach the Net Zero emissions goal he has been instrumental in setting. In fact, Senators referred to him as ‘the president of dairy innovation.’

The ultimate vehicle for those practices after they are tested on pilot farms will be the dairy checkoff-funded and NMPF-administrated FARM program initiated through the Innovation Center for U.S. Dairy.

At that “sustainability” hearing of the Senate Ag Committee in June, Vilsack earnestly stated that the Net Zero project – and government assistance for pilot farms to find the practices to achieve it — was essential for the U.S. dairy industry to have an edge in international markets.

In November, Vilsack endorsed former vice president Joe Biden for President of the United States and praised his candidacy “for including a path to addressing climate change while at the same time helping the rural economy and creating jobs by investing in green infrastructure, renewable fuels and low-carbon manufacturing,” according to an article about the Vilsack endorsement of Biden in the Nov. 23 edition of the Des Moines Register.

In fact, the Register article stated that Vilsack “helped write Biden’s plan for rural America.” But that’s not political involvement by a checkoff executive, is it?

It is interesting that when dairy checkoff board members are asked by the farmers paying the checkoff why they can’t stand up for whole milk in schools, the response they always get is: “That’s politics, and we can’t get into that.” Of course, the rules and regs of USDA overseeing checkoff are then cited forward and backward.

But, when it comes to Vilsack’s hands in the political pie – not to mention dairy farmers’ pockets – there are no rules and it’s all good. In fact, it’s encouraged because it’s part of the plan, the future of dairy, of food.

Vilsack is, after all, the dairy checkoff’s highest-paid executive, who is most culpable in his former position as Ag Secretary for putting the last nail in the fluid milk coffin. His policies on milk in schools and the fat-free / low-fat ‘government speech’ that now defines milk promotion, have at the very least contributed to – if not accelerated — the loss of fluid milk sales in the past decade of steepest decline.

In 2015, when confronted with what investigations have revealed about the science on animal fat, especially milk fat – according to the new and previously buried research — Vilsack said the preponderance of the evidence still favored low-fat diets. And with that proclamation, he signed the 2015 Dietary Guidelines that accelerated taking dairy markets – and our nation’s children – down the wrong road.

Think about this. From 2010 to 2018, the era in which the alliance between Vilsack’s USDA and the dairy checkoff was initiated and bloomed and in which he is now the highest paid executive – DMI controlled $140 to $159 million annually in mandatory dairy farmer funds. In that pool of funds, 25% went to salaries and other costs associated with core operations and another 30% went to contractors for promotion in ways that could be considered ‘core operations.’

In 2018, as in previous years, the NFL received $5 million; Edelman, the world’s largest PR firm, received $16 million; Fairlife $8 million, Domino’s $9 million, a marketing firm for GENYOUth with ties to Edelman $4 million, McDonald’s $5 million, and Vilsack got his virtual million.

Yes, folks, hindsight is 20/20. And here we are on the eve of 2020 with former Ag Secretary Vilsack – who was paid a $999,421 salary in 2018 from mandatory dairy producer checkoff funds and is now the top-paid DMI executive — to thank for the removal of whole milk and whole dairy products from our schools. And no one cares to ask him to testify to Congress about why whole milk should be allowed in schools, but he is politically involved in so many other discussions.

The dairy industry had and has Tom Vilsack — or vice versa.

110206_OSEC_AL_1642

Memorandum of Understanding (MOU) was signed on Friday, Feb. 4, 2011 at Sheraton Hotel in Dallas, TX. The MOU outlines the joint commitment of the National Football League (NFL), Department of Agriculture, National Dairy Council (NDC), and Gen YOUth Foundation, to end childhood obesity. (Signing L to R President of the National Dairy Council Jean Regalie, Agriculture Secretary Tom Vilsack, NFL Commissioner Roger Goodell, and GENYOUth Foundation CEO Alexis Glick) 

Today, DMI IRS 990 forms show that Dairy Checkoff pays Tom Vilsack just shy of $1 million/year as DMI’s highest paid executive; Dairy Checkoff pays the world’s largest PR firm Edelman $15 to $17 million/year as the purpose-driven brain-trust behind the GENYOUth and Innovation Center ‘sustainability’ concepts; Dairy Checkoff pays the GENYOUth CEO over $200,000/year to run the foundation; Dairy Checkoff pays the core operations of GENYOUth to the tune of $1.5 million; Dairy Checkoff has USDA attorneys at every meeting and on every conference call to approve promotion projects and messages (government speech); and Dairy Checkoff pays the NFL $5 to $7 million annually for their part in this “promotion.” Meanwhile, NFL promotes its brand through flag-football sets to FUTP60-participating schools; USDA markets and enforces dietary guidelines with the financial assistance of dairy farmers through the checkoff; and other companies participating in GENYOUth, most notably PepsiCo, are able to market their own pet projects, products, brands and influence to kids while the dairy farmers are regulated to government speech. Dairy Checkoff touts the FUTP60 breakfast carts as serving milk with every breakfast, but only fat-free and 1% are promoted and permitted, and USDA’s own studies show that this fat-free and 1% low-fat school milk is among the most frequently discarded items. The entire deal ignores the fact that the dietary guidelines have exacerbated the obesity and diabetes trend, that children are not getting the valuable nutrients from the milk they are served if they don’t like the taste of fat-free and 1% and throw it away to buy something else. And the deal further ignores studies showing that body fatness was lower and Vit. D status higher in children drinking whole milk as compared with children drinking 1% low-fat milk. What will it take to see positive change when the very government figure who was influential in getting us here is now the dairy industry leader that the industry organizations revere and who is looked at by USDA, Congress and other policymakers as speaking for dairy? If he took whole milk out of the schools, and he now ‘speaks for dairy’ and is ‘believed’ to be so concerned about kids, who else matters in the discussion? Does the government care about the over 15,000 online and 5000 by mail signatures of dairy farmers, parents, grandparents, students, teachers, coaches, school boards, town boards, county commissioners, state lawmakers, health experts, nutrition experts, athletes, nurses, doctors, and generally comcerned citizens among these signatures asking for the choice of whole milk in schools

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Politics of whole milk: Dairies go bankrupt, Vilsack gets top pay

When it comes to ‘politics,’ DMI talks out of both sides of the mouth: Top paid executive Tom Vilsack shown here in June asking Senate Ag Committee for government ‘support’ to pay DMI’s ‘pilot farms’ to develop practices for ‘U.S. Dairy’ to reach Net Zero emissions. But ask if DMI can  support whole milk in schools and the response is: “Oh no, that is ‘political’ and we aren’t ‘allowed’ to be ‘political.'” Truth is, DMI’s current top-paid executive — Tom Vilsack — is the one who while serving as Ag Secretary, spearheaded the removal of whole milk from schools in the first place.

By Sherry Bunting, Farmshine, Friday, Dec. 6, 2019

The former Ag Secretary who was instrumental in removing Whole Milk from schools is now the highest-paid executive at Dairy Management Inc. (DMI) whose virtual $1 million/year in 2018 came from mandatory checkoff funds paid by dairy farmers who are going bankrupt. 

On Monday (Dec. 2), the Milwaukee Journal Sentinel reported that their early look at DMI’s IRS 990 forms for fiscal 2018 show that Tom Vilsack became the highest paid DMI executive earning $999,921 in 2018, which was his first full year as an executive vice president of DMI, president and CEO of DMI’s U.S. Dairy Export Council (USDEC), and defacto leader of the Net Zero Project and sustainability and innovation platforms of the Innovation Center for U.S. Dairy.

Let’s go back a decade. Think back to 2009. The bottom fell out of the dairy markets. It was arguably the worst of economic times in memory for dairy farmers as farm level milk prices fell to $10, and equity in the value of cow herds plummeted. 

As farmers were busy trying to save their farms, and the industry and lawmakers were busy outwardly debating National Milk’s version of “supply management” in the Farm Bill that year, dairy leaders and regulators holding overlapping former and current positions within USDA, DMI, NMPF, DFA and IDFA, began charting a future for dairy in terms of pursuing international dominance, developing “sustainability” frameworks, partnering for “innovation”, and focusing on the zone of investment for consolidating the milk production footprint with ultrafiltration technology as the way to move milk without the water.

It all fits together, like pieces of a puzzle — with no picture on the box to show outwardly what it will all look like when complete.

Back in 2010, the Innovation Center for U.S. Dairy was busy on “sustainability” and getting fairlife ‘the better milk’ up and going, with the DMI Innovation Center’s sustainability council leader being none other than Fair Oaks’ / fairlife’s Dr. Mike McCloskey. 

Then Secretary of Agriculture Tom Vilsack was busy too that year. In addition to restricting school milk to fat-free and 1% and promulgating rules that listed Whole Milk as “prohibited” on school grounds during school hours, Vilsack was signing Memorandums of Understanding (MOU’s) with National Dairy Council to create GENYOUth to promote that dogma, and with DMI to link the “sustainability” framework of Vilsack’s USDA to the “sustainability” framework of DMI’s fledgling Innovation Center for U.S. Dairy.

Dairy farmers were coming out of 2008-09 devastation — starved for good news — and were encouraged by all this talk of innovation and sustainability and international markets because they thought it meant the industry was looking to sell more milk and dairy products in such a way as to raise prices paid to them for their milk. 

Who could question this high pursuit of innovation and sustainability and exports – right? That’s the trifecta, the holy grail.

2014’s high milk prices seemed to validate that all was going to be right with the dairy world. But most were not paying attention to the USDA / DMI alliance that was formed and growing — and what it might mean for the future.

Quietly – without much fanfare or protest – USDA began tightening milk restrictions in the school lunch program during this time. In fact, so quiet was this shift that many parents to this day do not realize their kids are getting watered-down milk, cheese, imitation butter, and half-beef-half-soy patties at school.

As the 2010 Dietary Guidelines were implemented, a democrat-controlled Congress passed the Healthy Hunger-Free Kids Act – under the avid lobbying efforts of President Obama’s USDA Secretary Tom Vilsack for the legislation that would tighten school lunch screws even more.

The dairy checkoff had already been called “government speech” in its 2005 Supreme Court defense, so with USDA’s blessing and encouragement – under Vilsack – the low-fat and fat-free dogma became entrenched and proliferated through the GENYOUth alliance. 

And it set the stage for a new era in dairy that today’s leaders speak of. We are hearing it now. A recent DFA newsletter tells members “milk must evolve to remain relevant.” DFA / NMPF chairman Randy Mooney stated last month that the industry needs to consolidate plants to make new products. Northeast DFA leaders heard from a food science writer and DMI contractor about how dairy proteins will complete plant-based diets during their recent meeting in Syracuse. Dairy dilution is all around us. And the industry points to Dean Foods’ bankruptcy as proof that Real Whole Milk isn’t good enough, isn’t sustainable. (Well, of course not, no one is truly marketing it and the government thanks to Vilsack is prohibiting kids from having it. This is not rocket science folks.)

Yes, folks, hindsight is 20/20. And here we are on the eve of 2020 with former Ag Secretary Vilsack – who was paid a $999,421 salary in 2018 from mandatory dairy producer checkoff funds and is now the top-paid DMI executive — to thank for the removal of Whole Milk and whole dairy products from our schools.

And no one cares to ask him to testify to Congress about why Whole Milk should be allowed in schools, but he is politically involved endorsing presidential candidates and writing their rural platforms, testifying in so many other discussions, including climate change and sustainability and seeking Senate approval of funds for Net Zero pilot farms.

Yes, folks, the dairy industry had and has Tom Vilsack — or vice versa.

See part two.

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The time has come to disrupt the disruptors

Opinion: Dean bankruptcy offers opportunity we should earnestly pursue

By Sherry Bunting, Farmshine, Friday, Nov. 29, 2019

If ever there was a time for state governments to sit down with their dairy farmers and agriculture infrastructure for a meeting of the minds… it is now.

The future is very much at stake with Dean Foods – the nation’s largest milk bottler – in Chapter 11 bankruptcy and sale proceedings, as the industry is largely signaling the buyer should be DFA.

But not so fast.

This could be an opportunity to look at the strength of Dean’s holdings and consider a different path forward, one that returns some of the regional branding power to farmers and consumers in the regions served by Dean’s 60 milk processing plants.

Dean Foods accounts for one-third of the milk bottled in the U.S., and the roots of its holdings go back to family operations with brands that were once – and some still are – household names.

In focus groups and shopper surveys, consumers demonstrate they understand what it means to buy local. They understand that buying local – especially fresh staples like milk – means keeping their dollars working in their communities. Consumers also say they want to help local farms. And they want to see clear labeling to know where their milk comes from.

Meanwhile, surveys show the gallon and half-gallon jug are still the most popular packaging among real milk buyers. Even though the category as a whole is declining, it is still a huge category and one that has not been tended or nurtured or cared for in more than a decade. In fact, the category has seen the deck stacked against it by government rules and government speech.

Taste is also important to consumers, as is nutrition. Where fluid milk is concerned, these two areas have also been lacking because checkoff-funded promotion became government speech that pushed fat-free and low-fat milk to the point where consumers have no idea what real milk tastes like – until they switch to whole milk, and they are.

Folks, this is an opportunity to chart a new path for fresh fluid milk, to breathe some life into it. We see it in whole milk sales that are rising. Just think what could be accomplished if significant resources were devoted to truly revitalizing milk.

As the dairy industry streamlines behind innovation and checkoff-funded partnerships to disrupt the dairy case — to be more like the plant-based non-dairy disruptors — there is still a majority of consumers choosing real milk, and more of them are choosing real whole milk as whole milk today is the top seller in the category, and whole flavored milk is growing by double-digits.

Can we disrupt all the disruption with a disruptive back-to-the-future original? I think so. But now is the time to hit it hard. A few years from now will be too late.

Dean Foods has the network and the facilities and the history a savvy consortium of buyers could tap into for going back to local or regional emphasis with brands. The DairyPure national branding experiment started out strong, but in the past few years has been squeezed-out by large retailers – and notably Walmart — pushing their own store brands with loss-leading strategies while hoisting the price of Dean DairyPure much higher.

And that’s part of the problem. Stores think it’s okay to loss-lead with milk, but they are not willing to eat that loss themselves. We need them at the regional dairy future table as well.

In the bankruptcy proceedings at hand, some of Dean Foods’ unsecured bondholders are protesting a rapid sale of assets to DFA in what they say equates to a “fire sale” that doesn’t maximize value. Did Dean receive a proposal from them too before filing bankruptcy? Sources indicate bondholders offered restructuring terms before the bankruptcy filing that would have changed the current picture for Dean Foods.

Will these bondholders that are opposing sale to DFA make an offer now? Can Dean Foods’ assets be sold piece by piece to be broken up more regionally? These questions don’t have clear answers at this time.

What is clear is that payments for milk by Dean to DFA are being delayed five business days as bondholders want to be sure they are truly ‘critical vendor’ payments and that there are no shenanigans between the would-be buyer and seller.

What is also clear is that Dean and DFA have a history, and that history includes the good, the bad, and yes, the ugly.

DFA was there every step of the way as mergers and acquisitions led Dean Foods on its path to become the nation’s largest milk bottler. DFA is Dean’s largest supplier of milk, and DFA leaders are on record stating that Dean Foods is the largest buyer of DFA milk.

If DFA purchases “substantially all” of Dean’s assets, we know more rapid consolidation of the fluid milk market will occur. DFA’s leaders — as well as the leaders of all the prominent organizations in the dairy industry, including the dairy checkoff — have been clear if we’re paying attention. The future they see is in moving away from investing in fresh fluid milk and moving toward ultrafiltration and aseptic packaging and blending and innovating for beverages that can be supplied to anywhere from anywhere without transporting milk’s water-volume by tanker.

Those are more of the ingredients for a monopolization of milk that may not even be considered by the Department of Justice. Without another offer or series of regional offers on the table, DFA would stand as the only option — other than complete failure of the firm under bankruptcy. This, alone, could put the sale to DFA on the fast track as sources talk about bankruptcy clauses that allow purchases to occur — without DOJ approval — when failure is the only other option.

So while consumers are consciously being pursued by the industry and dairy checkoff to move them away from their habit of reaching for that jug of milk and toward new beverages that contain milk — or are innovated new varieties of milk, or are blended and diluted with plant-based alternatives — what happens to the dairy producers in communities whose relevance is tied closely with retaining fresh fluid milk as a nurtured market and being a producer of a ‘local’ and fresh product? These producers are also forced to pay into the dairy checkoff that is developing these alternatives, not promoting or educating about fresh whole milk, and in effect funding their own demise.

Who will tend this store, nurture these customers, satisfy consumer desires to buy-local and ‘help farmers’ and their new-found eagerness to learn more about real fresh whole milk nutrition?

If states and regions don’t work to keep fresh milk facilities in their midst, the global message on ‘sustainability’, ‘carbon footprint’, ‘flexitarian diets,’ and ‘planetary boundaries’ will overtake the public consciousness, and the choices disrupting and diluting the dairy case will overtake fresh fluid milk.

In business today, that’s all we hear: Innovate and disrupt. Maybe it’s time to disrupt the disruptors, to put together a fresh fluid milk branding and packaging campaign that makes milk new again.

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But who’s lifting? And who’s rising?

The theme for the 2019 GENYOUth Gala in Manhattan Dec. 4 will be “Rise, by lifting others.” It’s clear that dairy farmers are doing GENYOUth’s heavy lifting, but for whose priorities? And who is rising? Are our schoolchildren really better off? Are our farmers?

By Sherry Bunting for Farmshine, November 1, 2019

Tom Gallagher is “setting the record straight about the value of the annual GENYOUth Gala, which has garnered millions of dollars for our youth wellness efforts without spending any checkoff dollars,” according to the Oct. 24 weekly checkoff update emailed by American Dairy Association Northeast.

Gallagher is CEO of Dairy Management Inc. (DMI) and chairman of Youth Improved Inc., doing business as GENYOUth, and he writes about the Gala set for Dec. 4 in Manhattan. 

Let’s take a look.

Gallagher says the Gala “will resemble a Hollywood red carpet event” and tells us it’s understandable to see it as being “a bit on the extravagant side.” He states that the “formal-attire affair is held each year in New York City, drawing famous athletes and CEOs from some of the nation’s most recognized companies.”

Gallagher reminds us that this ‘formula’ mixes dairy farmers with corporate influencers!

“It’s a very different look and a very different strategy from the traditional efforts done to support dairy farmers’ priorities,” he writes, asking dairy farmers to “not get blinded by the glitz and glamour of the evening and instead look deeper into the strategic aspect.”

Okay, let’s look deeper.

By now, more dairy farmers are seeing the effects of the ‘strategic aspect’ in DMI’s ‘formula’ put into play over the past 10 years, beginning with deals (MOUs) struck between dairy checkoff and USDA under then Ag Secretary Tom Vilsack in 2008-10. Today, Vilsack collects $800,000 a year working for dairy checkoff.

As reported in the September 20th edition of Farmshine, the ‘formula’ since 2008 has led to the creation of a growing number of tax-exempt organizations with aliases under the DMI umbrella, most of them through the Innovation Center, known to the IRS as Dairy Center for Strategic Innovation and Collaboration doing business as Innovation Center for U.S. Dairy.

The ‘formula’ brings certain multi-national corporations, dairy innovators and dairy production integrators into these tax-exempt organization boards that then influence how dairy farmer promotion dollars are spent via partnerships.

They’ve all got their eyes on our kids, you know. They want to shape those future consumers. But how? With ‘government speech.’

The ‘formula’ also brought in World Wildlife Fund (WWF) to be the stamp-of-approval partner for “sustainability” platforms, including the FARM program. And yet, WWF promotes vegan diets to solve climate change, and USDA, under Vilsack, was instrumental in pushing whole milk out of schools. Some partners, right?

In effect, the ‘formula’ is bringing these ‘foxes’ – a whole den to be precise – into the henhouse and using the hens’ own mandatory funds to do it.

It is disconcerting, to say the least, to hear DMI staff, who are paid with mandatory farmer-funds, speak at a September seminar in Pennsylvania stating that, “We want to move consumers away from the ‘habit’ of reaching for the jug and get them to be looking for these new and innovative products.”

They are talking about the products developed with industry partners using checkoff funds. Most believe that these products are aimed at consumers who are NOT in the habit of reaching for the milk jug, not the consumers who are!

You see, DMI is helping to shape future consumers toward the diluted diets the ‘thought leaders’ promote for our futures. These are touted by USDA through Dietary Guidelines and enforcement of ‘government speech’ in dairy promotion. Diet dilution is embraced by the Edelman company, via their sponsorship and social marketing assistance with the EAT FreSH Initiative that promotes “eating according to planetary boundaries,” meaning less dairy and animal products.

As a key link, Edelman, the purpose-driven social marketing company was instrumental in DMI’s formation of GENYOUth. (Edelman is paid $15 to $17 million a year in dairy checkoff funds as a contractor for DMI according to 2016-17 IRS 990s.)

The ‘strategic aspect’ is clear: Throw a Gala, bedazzle a few dairy producer board members to rub elbows with the elite corporate CEOs and ‘thought leaders’, and everyone goes home feeling good because they think they are working on shared ‘health’ and ‘sustainability’ goals.

Gallagher states in the checkoff update that dairy farmers have the number one health and wellness program in the schools. DMI chairwoman Marilyn Hershey has stated that “other companies would kill to have our what we have in the schools.”

One fox in the henhouse is PepsiCo. Did you know PepsiCo assisted USDA with the development of a Smart Snacks website where school foodservice directors go for lists of products and beverages that are designed to meet the USDA requirements for calories, fat, salt, etc.? Most of them courtesy of PepsiCo?

Guess what is not on the Smart Snacks list? Whole Milk. 

Guess what is on the list? Mountain Dew Kickstart energy drink, Gatorade, Doritos, Breakfast bars, Breakfast cookies, and on and on – courtesy of PepsiCo.

Gallagher states that the Gala “supports a goal that is near and dear to every dairy farmer I have ever met – childhood health and wellness.”

Meanwhile, how is the health and wellness of our kids at school with these diets?

Gallagher also tells us: “Not a single farmer checkoff dollar is used to put on the event. The Gala is underwritten through third-party sponsorships, table sales and on-site auction purchases.”

Well, that’s a relief, right? But think again.

According to IRS 990 forms, the supposed partner of dairy farmers in this effort – the NFL — has donated anywhere from less than $500,000 to a little over $1 million annually to GENYOUth, but at the same time, DMI paid the NFL $5 to $7 million annually for promotion !(according to 2016-17 IRS 990s)

In addition, over 50% of GENYOUth’s total annual expenditures as an organization comes from dairy farmers via their mandatory nickel and the dime. Yes, one can say those regional funds are linked to breakfast carts in schools, but the checkoff nickel portion funds the operating budget, and more.

Meanwhile, the kids. Who has been looking at their breakfast carts lately?

The carton of milk with every breakfast is the same fat-free and 1% milk that USDA’s own studies show is often discarded. The soupy sweet hot pink yogurt doesn’t come close to the real thing; many children turn away from it. The cheese, well they’ll eat that, but it too is fat-free.

What populates the breakfast cart heavily, according to children, is Quaker (PepsiCo) oatmeal bars with chocolate, breakfast cookies, a foil wrapped item similar to a pop-tart, and if you get there early – you’ll find apples or bananas.

Meanwhile, when corporates boarding the GENYOUth schoolbus for this “access” donate to buy ‘grab n go’ breakfast cars or sponsor a table at the Gala, and earmark funds for pet programs. When SAP donates, their funds go specifically for GENYOUth’s recent addition of the AdVenture Capital program, where students can learn about marketing and being entrepreneurs and leaders.

The USDA (MyPlate) is now concerned about students getting enough sleep, so the sleep industry, like Sleep Number, board the GENYOUth schoolbus with donations, and a new sleep program is added to GENYOUth messaging.

GENYOUth has become a marketing vehicle for the ‘foxes’ — cleverly disguised as a school health and wellness program — founded and primarily funded by the ‘hens.’

In fact, dairy farmers are the only ones involved in GENYOUth that are producing a truly healthful product but are not free to truly provide or promote it to the kids.

“One of the great responsibilities we have as your dairy checkoff is to use your investment as wisely and strategically as we can,” writes Gallagher. “This is why we seek globally recognized partnerships that can extend your commitment on goals that matter to you.”

At the Dec. 4, 2019 Gala in Manhattan, the theme will be “Rise, by lifting others.” It’s clear that dairy farmers are doing GENYOUth’s heavy lifting, but for whose priorities? And who is rising? Are our schoolchildren really better off? Are our farmers?

A decade of this ‘formula’ – and the millions spent by dairy farmers annually — have resulted in ‘partners’ profiting while dairy farmer freedom and competitive position diminishes. Meanwhile, new generations of children and adults do not know what real milk and dairy products taste like, and they know absolutely zero about the nutrition in them.

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Addendum after publication:

The latest to board the GENYOUth schoolbus, complete with name and logo-swoosh for its program, is Nike with the “Nike Game Growers”. The program seeks to increase school sports participation — especially among middle-school-aged girls — by having a competition among student teams presenting their ideas for how to grow sports participation at their schools. The Womens National Basketball Association (WNBA) and National Basketball Association (NBA) are also involved in the Nike Game Growers platform. The swoosh has come under fire for its competitive dealings in high school team apparel contracts and recently by female athletes who’ve been sponsored by Nike in ‘elite’ camp teams telling of health impacts from dietary restrictions aimed at keeping them super thin.

The Dec. 4, 2019 GENYOUth Gala (Galabration) Host Committee is made up of: Tom Gallagher, DMI CEO; Alexis Glick, GENYOUth CEO; Roger Goodell, NFL Commissioner; Audrey Donahoe, National Dairy Council Chair; Richard Edelman, Edelman CEO; Carla Hall, former co-host, The Chew famed chef, author and TV personality; Howie Long, commentator, FOX Sports, NFL Hall of Fame; Jeff Miller, NFL EVP Health and Safety; Steve H. Nelson, former United Healthcare CEO; Donald “DJ” Paoni, SAP North America President; Claressa Shields, two-time Olympic Gold Medalist Boxer; DeMaurice Smith, NFL Players Association Executive Director; Selwyn Vickers, M.D., Dean, University of Alabama School of Medicine; Tom Vilsack, President and CEO U.S. Dairy Export Council and former Secretary of Agriculture; Russell Weiner, Domino’s COO and President; and Dr. David Satcher, 16th U.S. Surgeon General emeritus.