Value added? Or subtracted? DMI, DFA partner on new blend

By Sherry Bunting, Farmshine, July 26, 2019

MINNEAPOLIS, Minn. – The news of DFA’s new Dairy Plus Blends – a half lactose-free low-fat milk / half plant-based beverage concoction broke mid-July. DFA’s Live Real Farms brand website showed Lund and Byerly’s stores as the place to buy the Dairy + Almond and Dairy + Oat, but a visit to two stores on the list at the Minneapolis city limits did not have the beverages in the dairy case – yet.

Looking at the packaging, a first impression is: Wow, why doesn’t 100% milk packaging look this good. If only the agencies managing mandatory milk promotion funds and dairy-farmer-owned co-ops put as much thought into packaging and marketing 100% Real Whole Milk as they do for a diluted “innovation,” imagine what could be accomplished!

A further examination of the new Dairy Plus Blends packaging brought this thought: Why use words such as “Purely Perfect” and “Original” for a blend, when such words would seem best reserved for marketing the actual original, purely perfect 100% Real Whole Milk that the DFA member-owner dairy farmers produce and that actually results in the dairy-checkoff promotion funds.

We asked DFA for some background. In fact, we sent 11 questions to DFA and to DMI communications staffs because we were aware that DFA’s Live Real Farms brand is part of a checkoff-supported partnership between DMI and DFA to innovate products in the fluid milk space under the auspices of DMI’s Innovation Center for U.S. Dairy.

We first wanted to know, why the blend? Why not just create an almond FLAVORED 100% real milk beverage? Because, after all, the new Dairy Plus Blends have half the calories, but they also have half the natural nutrients and only slightly more than half the protein of real 100% dairy milk.

It seemed like value was being subtracted, not added.

We all know that almond beverage has barely any almond in it, being mostly filtered water and some additives, so it seemed like the product is an offering of diluted milk. Since we couldn’t find any on the shelf yet at Lund and Byerly’s in Minneapolis, we aren’t sure if consumers will be asked to pay more – for less.

Of course, the packaging does have more. It touches all the right chords.

DFA was kind enough to answer some of our questions, although we have heard nothing back yet from DMI.

“In an effort to meet the demands of modern consumers, Live Real Farms has launched a new beverage, Dairy Plus Blends, which combines all the nutritional benefits of real cow’s milk with the flavor and texture of alternative beverage options like almond or oat,” stated Rachel Kyllo, senior vice president of growth and innovation at Live Real Farms, a DFA-owned brand.

The reply came by email to the questions we submitted.

“All the nutritional benefits of real cow’s milk”? (The label says 5 grams of protein per 8-ounce serving, not 8, and the other naturally occurring nutrients in real cow’s milk are also reduced.)

Kyllo continues in the reply:

“Nearly 50% of consumers who buy plant-based beverages also have dairy milk in the fridge, so they’re buying both products,” she writes. “This product is not about pivoting away from dairy, instead we saw an opportunity to fulfill a need as people like almond or oat drinks for certain things and dairy for others. This product combines the two into a new, different-tasting drink that’s still ultimately rooted in real, wholesome dairy.”

We wanted to know DMI’s part in developing this concept, seeing that dairy farmers mandatorily pay a checkoff promotion fee on every 100 pounds of milk they sell.

DFA’s response stated that, “The overall product concept for Dairy Plus Blends was developed along with DMI and the Innovation Center for U.S. Dairy. Consumer focus groups were conducted with Millennial and Gen X primary shoppers. Overall feedback was positive regarding the product concept, taste and packaging.”

We wanted to know more about how the product will roll out.

“Dairy Plus Blends are now being test marketed at more than 300 retail stores in Minnesota,” the DFA response stated. “If successful in test, the brand plans to roll out more broadly across the United States, beginning in the Central and Northeastern regions of the U.S.”

DFA has already been bottling plant-based alternatives in copacking arrangements in the Midwest. And, the Cumberland plant in New Jersey, formerly owned by the Camalero family, and purchased in 2017 by DFA, bottles plant-based beverages also as the Camaleros still operate the plant, and they retained ownership of their plant-based beverage investments.

We also wanted to know how the real dairy milk that makes up 50% of the new Dairy Plus Blends is classified for Federal Order pricing, but that question was not answered.

And, we wanted to know if DFA in its “partnership to innovate” with DMI has any plans to innovate the marketing and packaging of 100% Real Whole Dairy Milk in such a pleasing and attractive way as they have with the Dairy Plus Blends? That question was not answered either.

We also wondered if this “blend” will pull dairy milk drinkers as they hear all this talk about becoming “flexitarian” – cutting back on foods that come from cows and adding more foods that come from plants to, you know, save the earth and all.

Along these lines, DFA’s response attributed to Kyllo at Live Real Farms was: “We’re confident milk will continue to have a place on family tables for years to come, but we also understand and appreciate that consumers have choices in what they drink today. We think Dairy Plus Blends offer a refreshing taste experience and provides a unique way to get dairy in front of consumers who might explore other beverage options.”

We wonder if this is an invitation by a dairy-farmer-owned cooperative, funded in part by dairy-farmer-checkoff to lure consumers into experimenting with something new instead of dairy milk or will it appeal to people who have no intention of drinking 100% real dairy milk? It’s hard to tell, but it’s worth watching.

Some advocates of this kind of experimentation say that the fluid milk market needs more lactose-free choices. There are already lactose-free milk choices, there is also A2 for other types of digestive sensitivity, and there’s one thing everyone seems to be forgetting. Whole milk is more easily digested by people with these sensitivities. There’s actual real proof of this now, not just personal experience, but that’s a story for another day.

In this time of continued fluid milk sales losses, farm milk prices below breakeven for five years and dairy farms exiting the business, why does the dairy-checkoff not re-brand and re-market and innovate the packaging and promotion of Real 100% Whole Milk that is virtually 97% fat-free and loaded with natural goodness? Why not actually partner to innovate the brand-promotion MILK? What a novel idea!

Oops, that’s right. I think USDA lawyers would have a problem with that.

One thing that is impressive coming out of Live Real Farms is the Wholesome Smoothie line of Whole Milk yogurt smoothies last year. DFA says it plans to develop “a robust product line with the launch of additional, innovative products over the next three to five years.”

We’ll be paying attention to all of them.

-30-

Timeline tells the story

Consumer ‘trust-building’ (or activist placating) becomes heavy-hand on the farm

By Sherry Bunting, from Farmshine, May 10, 2019

BROWNSTOWN, Pa. — Dairy promotion has been an organized deal for over 100 years, since the formation of the National Dairy Council in 1915. It’s an understatement to say times, they are a-changing.

There’s a difference between reacting to change and being proactive to get ahead of “the next thing.” And there’s a fine line between being intuitive and proactive to influence the direction of that “next thing” as compared with charting a course that actually positions an industry to require its dairy farmers to implement x-y-and-z in order to sell milk.

Yes, it’s better to be at the table than to be the meal carved on the table by others. But when dairy producer checkoff funds — paid by all dairy producers — are used to launch products that benefit only some producers in more vertically-integrated processing structures or to launch programs that lead ultimately to requirements that determine who can sell milk, those are red flags.

As the accompanying timeline illustrates, a lot has been going on since DMI was established in 1995 to manage the checkoff and develop unified marketing plans. That was also the year the U.S. Dairy Export Council (USDEC) was created.

What is even more apparent is the proliferation of logo’d programs, initiatives and strategies put forth since the 2008 creation of the Innovation Center for U.S. Dairy. This followed closely on the heels of the U.S. Supreme Court decision protecting checkoff speech as “government speech” and insulating the dairy checkoff from future court challenges in terms of the rights of producers paying the checkoff and the ability of outside organizations to challenge dairy promotion messages.

The formation of the Innovation Center for U.S. Dairy brought the processing, manufacturing and other industry sectors within the inner circle of checkoff promotion, education, and ‘streamlining’ strategies. Unification of the dairy industry is a worthy goal from a marketing perspective; however, there is a fine line between streamlining and steam-rolling, and it is important to pay attention to this because these efforts are dairy-producer-checkoff-funded and should therefore benefit — and certainly not harm — all producers paying in mandatorily.

DMI’s Innovation Center is where GENYOUth was born. Under the legal non-profit name of Youth Improved Incorporated, GENYOUth aligns with USDA dietary policy.

In fact, the Innovation Center is the entity from which two Memorandums of Understanding were signed with USDA, one involving GENYOUth and the other involving the Dairy Sustainability Guidelines and Framework.

The Innovation Center is also where new products are born, like fairlife, deemed the dairy checkoff’s fluid milk “success story.” Others are following suit (like the July launch of DFA’s Live Real Farms half dairy / half almond or oat ‘milks’ aka Dairy + Almonds and Dairy + Oats).

The Innovation Center is also where producer checkoff dollars fund the National Dairy FARM program (Farmers Assuring Responsible Management) program and its three sectors by which dairies are increasingly controlled: Animal Care, Environmental Care, and Workforce Development.

While FARM is administered and managed by National Milk Producers Federation (NMPF), it is funded by DMI via dairy producer checkoff monies. According to the FARM program website, 98% of U.S. milk production is “enrolled” in FARM (via processors and cooperatives).

We are seeing evidence that the animal care portion — and in the not too distant future the sustainability and employee care portions — are being implemented with ever-increasing mandatory authority. FARM can now over-ride Veterinary Client-Patient Relationships, federal and state regulatory milk inspections and affect legal contracts to sell milk.

What started as a voluntary program to help farms improve while demonstrating to consumers the ways in which dairy farms care for animals, environment and employees, is morphing today into a mandatory auditing and probation tool with as much or more power as legal contracts and food safety inspections.

The Innovation Center for U.S. Dairy is also the entity where producer checkoff funds are used to develop Sustainability Guidelines, Frameworks and Alliances, which are leading to goals, benchmarks, and now practices. These developments are in the staging process to become mandatory as part of the increasingly “regulatory” approach of the producer-checkoff-funded FARM program.

We got a glimpse of the direction of DMI on “sustainability” in a 2018 Report by DMI CEO Tom Gallagher.

Among the “five keys to building and maintaining consumer and thought-leader trust” outlined by Gallagher in a 2018 report, global nutrition policy and sustainability ranked at the top.

On the global nutrition side, DMI seeks to “work with external groups that are educating the United Nations on what policy should look like,” Gallagher reported. He also linked the 2020 U.S. Dietary Guidelines now being evaluated by a USDA-appointed committee to being the “guidelines that will ultimately focus on how we will achieve the 2030 Sustainable Development Goals.”

He noted that Dr. Greg Miller, head of the science and research of the National Dairy Council, is involved in global discussion to “help U.S. Dairy remain a key player as dietary and sustainability standards are worked out.”

As part of this, Gallagher mentioned the Global Sustainability Framework and Reporting, developed under the Innovation Center for U.S. Dairy and now being made part of the FARM program. “A unified voice that represents the entire dairy community is essential to reinforce consumer trust. This has been core to our programs, through organizations such as the farmer-founded Innovation Center for U.S. Dairy,” said Gallagher in the 2018 DMI Report.

“As the dominant dairy community organization for the U.S. market, the Innovation Center will use the Dairy Sustainability Framework (DSF) to demonstrate global leadership in sustainable food systems,” he said. “The DSF was developed to provide overarching goals and alignment of dairy’s actions globally on the path to sustainability.”

Part of the Innovation Center’s path in this way is its partnering alliance with World Wildlife Fund (WWF) in developing the DSF.

“The DSF will enable Dairy to take an all-encompassing approach to sustainability through a common language and alignment of international activity,” said Gallagher, “and through this generate a common sustainability commitment that can be expressed at global, regional, national and organizational levels.”

These are Edelman-style techniques for building consumer trust. Edelman is the Chicago-based firm with offices worldwide, that has been working for DMI for 20 years, and increasingly over the past 10 years.

In fact, Edelman developed the Undeniably Dairy campaign, which DMI leadership has stated on record is designed to be a new seal for dairy products in the future. DMI states that the goal is to replace the REAL Seal that used to be owned by ADA / UDIA and then DMI but is now owned by NMPF.

The Innovation Center, via DMI, is also part of a relatively new initiative called Newtrient LLC, focused on sustainability, and in particular, manure management systems with a heavy emphasis on methane digesters.

According to its website www.newtrient.com, Newtrient LLC was founded in 2015 by 12 dairy cooperatives — DFA, Land O’Lakes, Maryland-Virginia, Select Milk Producers, Agri-Mark, Darigold, Prairie Farms, Michigan Milk Producers, Southeast Milk, Tillamook, United Dairymen of Arizona, and Foremost Farms. At its website, under “Dairy Leadership”, the logos of these co-ops are shown, and the explanatory paragraph states the ground-floor involvement of Dairy Checkoff and it goes this way:

“Newtrient’s founding entities include leading dairy cooperatives from across the U.S. representing nearly 20,000 dairy farmers — and producing one-half of the nation’s milk supply — as well as the two associations that advance the entire dairy industry in terms of promotion, research, education, innovation, issues management, international trade and public policy,” the statement reads. Though not named, the description of the two associations at the end of that sentence would be DMI and NMPF.

“These organizations recognize the need to bring manure management technologies and providers together with dairy farmers, researchers and other stakeholders in order to seize the opportunities from manure, while supporting environmental sustainability,” the statement reads.

In a sense, the Dairy Checkoff continues doing promotion, education and research, but is morphing with increased momentum since 2008-09 toward developing the unified voice and streamlined template by which dairy farmers will be measured for future participation in milk markets.

The Innovation Center for U.S. Dairy works like an “incubator” hatching new products, technologies, programs, guidelines, frameworks and strategies that not only unify the dairy industry message, but also streamline its participants.

With 98% of U.S. milk production enrolled in its premier programs, like FARM, the producer-funded direction is one that now possesses the increasing authority to mandate dairy farm practices, in some cases to a micromanagement level – all in the name of that beginning notion of building consumer trust.

The logos on the accompanying timeline tell this story.

Meanwhile, it appears that the idea of regionally-sustained dairy-sourcing is becoming diluted as Dairy Checkoff board decisions are weighted by shifting milk volume geographies.

-30-

Related links

Who is empowering whom? 1/11/19: https://wp.me/p329u7-1rG

Funding their own demise? 1/18/19: https://wp.me/p329u7-1rW

Finances raise eyebrows 2/1/19:  https://wp.me/p329u7-1sP

4th and 40 backed up to our own endzone 2/8/19: https://wp.me/p329u7-1t2

Money spent, points missed 2/8/19: https://wp.me/p329u7-1sX

How did we get here 2/15/19: https://wp.me/p329u7-1u3

Animal Ag in globalists’ crosshairs 2/15/19: https://wp.me/p329u7-1u9

‘Government speech’ rules, producers have little say 2/22/19: https://wp.me/p329u7-1uI

With science fiction, they socially herd us 3/1/19: https://wp.me/p329u7-1uO

Need for more digging is obvious 3/8/19: https://wp.me/p329u7-1v6

Keep zigging? or time to zag? 3/10/19: https://wp.me/p329u7-1ve

Should dairy farmers be forced to fund government speech?: https://wp.me/p329u7-1ve

DMI CEO on fluid milk 3/22/19: https://wp.me/p329u7-1vL

Funding real milk’s demise? 3/29/19: https://wp.me/p329u7-1vU

Peeling back the layers, 4/5/19 https://wp.me/p329u7-1wn

Truth and thoughts: a tragedy government won’t accept: https://wp.me/p329u7-1wN

Farmers bring questions to DMI chair 4/19/19: https://wp.me/p329u7-1×0

Childhood Nutrition Reauthorization in D.C. 4/26/19: https://wp.me/p329u7-1wF

Vilsack reveals Net Zero Project 5/24/19: https://wp.me/p329u7-1yf

“Government is between you and the consumer” 6/14/19: https://wp.me/p329u7-1xW

Farmers bring questions to DMI chair

By Sherry Bunting, Farmshine, April 19, 2019

GORDONVILLE, Pa. — “You are hearing the negatives, not the positives,” said Marilyn Hershey about the dairy checkoff during a meeting requested by Lancaster County dairy farmers hosted here in Gordonville on Friday, April 12.

Hershey has a dairy farm with her husband Duane in neighboring Chester County, and she serves as the national chairperson of the Dairy Management Inc. (DMI) board.

Approximately 12 of the expected 30 farmers attended the meeting with a range of topics on their minds, in particular fluid milk sales and whole milk promotion.

Hershey got involved in dairy promotion eight years ago, serving first on the National Dairy Board, then becoming vice chair of DMI, the board that combines various boards, before becoming chairperson two years ago. National Dairy Board has term limits, whereas the DMI board does not.

Accompanying Hershey for the discussion was Harold Shaulis of Somerset County, who served 25 years on state, regional and national checkoff boards. Having sold his cows, he is no longer a board member, but helps with promotion.


After a Q&A session with farmers, DMI chairperson Marilyn Hershey supplied this graphic of how dairy consumption has increased while product share has changed from 1985 through 2018. The chart represents National Milk Producers Federation (NMPF) analysis of USDA commercial disappearance. According to USDA, the agency’s commercial disappearance figures include imports and most exports.

Shaulis said the bottom line in dairy promotion is to sell more milk. He said total per-capita dairy consumption has grown since the 1980s, even though fluid milk sales have declined (Fig. 1). He also talked about trade missions to China and Southeast Asia.

“We are in a global market. One out of six loads of milk a day is exported, and we want to see that grow,” he said.

In addition to exports, Hershey said consumers are eating more dairy products, overall. “The National Dairy Council has funded 20 years of research on butter to get it back in the mainstream. We got butter into McDonalds in place of margarine, and 80% of McDonalds’ sales have a dairy ingredient in them,” she explained as an example of DMI’s partnership strategy.

By email, after the meeting, Hershey furnished the previously requested list of National Dairy Council research we will explore for a future edition.

However, a perusal of the science summaries section of National Dairy Council’s own website, where a few summaries are available, each download is prefaced with these words: “Low-fat and fat-free dairy foods are part of the Dietary Guidelines for Americans (DGA) and American Heart Association (AHA) dietary recommendations. You can download our full report, which shows further support for consuming low-fat or fat-free dairy foods as recommended in the 2015 DGA.”

The website also talks about “nourishing communities,” about farm animal care and sustainability measures (FARM program) adopted and funded by checkoff dollars that tie in with the low-fat and fat-free dietary theme.


This screenshot of the landing page for the Undeniably Dairy campaign’s website (https://www.discoverundeniablydairy.com/) illustrates the nourishing communities theme that DMI chair Marilyn Hershey says targets “conflicted health seekers.” She also said: “We want Undeniably Dairy to replace the Real Seal. That is the goal.”

Undeniably Dairy replaces Real Seal

Cross-referenced to the National Dairy Council website is the Undeniably Dairy campaign. Hershey said this promotes positive messages to targeted audiences with school curriculum and through social media.

At this website, the “nourishing communities” theme continues as well as the reinforcement of low-fat and fat-free dairy.

Hershey provided a handout on Undeniably Dairy and said: “We are targeting the ‘conflicted health seeker’ with four messages: Responsibly produced, nutrient rich, locally driven, real enjoyment.”

More interesting is where DMI wants to take the campaign.

“We want Undeniably Dairy to replace the Real Seal. That is the goal,” said Hershey. “We are combining MilkPEP’s ‘Love What’s Real’ campaign with our Undeniably Dairy campaign.” 

The Real Seal was previously owned by UDIA / DMI, but it is now the property of National Milk Producers Federation (NMPF). The Real Seal can only be used on milk and dairy products that contain real dairy ingredients, no imitation dairy ingredients and are made with milk produced and processed in the USA.

This posed a problem for DMI, since importers must pay a small checkoff fee for dairy promotion, so the dairy checkoff stopped promoting the Real Seal and came up with Undeniably Dairy two years ago.

Hershey fielded questions about the requirements for using the Undeniably Dairy Seal. How might those requirements differ from the Real Seal? She did not have the specifics and promised to get back with those details.

In the schools

Fielding questions on the school breakfast carts, Hershey explained that GENYOUth is the umbrella organization, and Fuel Up to Play 60 (FUTP60) is the boots on the ground.

“We don’t just have a foot in the schools, we are IN the schools,” said Hershey. “Companies would love to have what we have in the schools.”

The Northeast program is strong because there are seven football teams here so the program can affect a large number of kids in the Northeast, according to Hershey.

Asked what is on the breakfast carts, she said: “Yogurt, cheese, milk, fruits and vegetables, and some have smoothie machines.”

She said the Grab N Go Breakfast Carts have ice packs to keep the milk cold. She also stated that every dime ADA Northeast sends in to GENYOUth is returned to the Northeast region to fund FUTP60 and breakfast carts as well as other foodservice equipment grants to schools. (See ADA Northeast 2017 Annual Report here)

Hershey confirmed that the GENYOUth Gala raises more money than it spends by getting funds from other donors to buy more carts. She explained, as previously reported in Farmshine, that PepsiCo gave $1 million to translate FUTP60 into Spanish and pay for more breakfast carts. She said PepsiCo made a large 2018 commitment to the program, and that’s why PepsiCo recognized with the Vanguard Award at the 2018 Gala.

“We buy the carts, and we have multi-year contracts with the schools to keep milk on the carts,” said Hershey.

Acknowledging that the milk provided is fat-free or 1%, she stressed that, “As independent dairy producers, we can advocate for whole milk, but DMI, FUTP60, and GENYOUth cannot influence policy,” she explained.

“You have to go to your co-ops and Farm Bureau and G.T. Thompson to get that done. We can’t do it,” said Shaulis.

What we can do is put out our research and promote research,” said Hershey.

Shalis said the FUTP60 breakfast carts “absolutely sell more milk.”

He reported that 95,000 more children participated in school breakfast in 2018 compared with 2017. “That’s 95,000 more servings of milk since they have to take a milk.”

“But do they like it?” asked one farmer.

Hershey quickly replied: “It doesn’t matter if it’s 3%, 1%, 2% or 0%, they are getting the same nutrition. Even though they are not getting the fat content, they are getting the nutrients.”

A discussion of fat-soluble nutrients and bioavailability of nutrients ensued.

When asked if DMI, yes or no, believes 1% and fat-free milk are equal to whole milk, Hershey said: “We have no control over what we serve or promote in the schools. With that carton of 1% milk, we want children to know they are getting the nutrition, we can’t address the fat.”

When asked what DMI can do about 20-plus years of having the low-fat diet-heart hypothesis “forced on us,” Hershey’s reply was that, “It took 20 years to get here and it will take a while to turn it around.”

She informed the group that the American Heart Association has already written a letter to Congress signed by 18 health organizations protesting the House Bill 832: Whole Milk for Healthy Kids Act.

“They are against the bill, so there is a battle in front of us,” Hershey said.

On the positive side, Hershey said farmers can thank Dr. Greg Miller, global chief science officer for the National Dairy Council, for his use of the research on full-fat dairy. She also said dairy farmers can thank the dairy scientists in each partnering company’s kitchen as DMI develops new products for Pizza Hut, Taco Bell, Domino’s and McDonalds.

Beyond the fat

“Lots of things with school milk need changing, not just the fat,” said Hershey as she dove into the innovations side of DMI’s strategy.

“I appreciate that the fat content is your focus, but it has to be the right temperature, delivered correctly and packaged correctly,” she said. “We are working on this with processors.”

She said that giving high school teens the same packaging as kindergarteners doesn’t fly. She cited research showing that when schools switched from paper cartons to plastic bottles, milk sales grew by double-digits in the first year, and waste was down by 20% in those schools.

“Kids want to drink their milk from a bottle because that’s how they drink everything else,” said Hershey, noting that Rick Naczi, executive director of ADA Northeast, pointed this out at a fluid milk meeting DMI had in Chicago in February.

“School milk got a lot of discussion there,” Hershey reported. “But, let’s not get lost in this whole milk point. There is a huge price difference (between whole milk and 1% or fat-free), and school contracts are lost by one-quarter of a penny per carton.”

Some of the farmers in attendance said that didn’t matter unless other beverages can compete for those contracts. The bottom line would be whole milk going into the schools.

Time was also spent talking about the trend toward smaller containers and ultra-high temperature (UHT) pasteurization. “All the milk in Europe is UHT, and it tastes good,” said Shaulis.

Some of the farmers in the room disagreed, sharing their concerns that UHT leaves a less valuable product nutritionally and in flavor. To which, Hershey and Shaulis said the entire food industry is going that way, and there’s nothing they can do about that.

“What we have to try to do (in promotion) is stand by the value milk has and promote what we are able to promote,” said Hershey.

She shared figures showing that overall fluid milk sales represent 18% of total milk production: “79% of consumers are not eating meals as a family. Everything is grab and go. That’s where we need to be,” said Hershey. “We have to meet consumers where they are with our innovation and packaging.”

Citing fairlife, she explained how “that product came through our fluid milk committee, and now others are following. Darigold has a new high protein ‘fitness’ drink. DFA has a couple things coming out under the Live Real Farms label. Kroger and Shamrock are coming out with beverages – all this year. These products have a lot of milk in them,” she said.

Farmers learned that these new products are not Class I products. They are largely Class II.

“We partner on these products,” said Hershey. “We give money for research. They do the product research. We only contribute to the research to try and get the innovation out there in order to survive.”

“We gave up on selling milk. ‘Got Milk’ did nothing,” Shaulis added. “Generic milk advertising doesn’t work.”

Farmers wanted more statistics to back up this claim, and they referenced the overwhelming reaction among consumers to the 97 Milk Baleboards and campaign done voluntarily at a grassroots level, starting in Lebanon County, Pennsylvania with signs and baleboards now in five states and spreading nationwide and internationally through the website and social media.

Hershey did share the news that retail data show whole milk sales grew more in the first quarter of 2019 than the already higher whole milk sales in 2018.

She later sent an email stating that in the Northeast, retail sales data show 40% of fluid milk sales are coming from whole milk sales. She also reported that, nationally, whole milk sales as a percentage of total fluid milk sales rose from 29.7% in 2014 to 39.3% currently.

As one farmer noted, “DMI has done a good job promoting cheese, what we are asking for is more focus on fluid whole milk than we are seeing now.”

Farmers were concerned that if they continue to be forced to pay into a checkoff program that represents their market less and less, what does the future hold for them?

Hershey had explained that the national checkoff boards are represented geographically by milk volume.

Some wondered if making the checkoff voluntary would allow them to put money into promoting local whole milk, and to take on the imitations head-to-head without the restrictive oversight of USDA.

“It’s all or nothing. That’s how the whole world of checkoff programs work,” said Shaulis. “These farmers on the board look at every penny spent, and they look at what is best for the industry while regions look at what is best for their region.”

To be continued.


DMI chairperson Marilyn Hershey and former board member Harold Shaulis met with dairy farmers for a question-and-answer session in Lancaster County, Pennsylvania on Friday, April 12. Hershey explained that DMI, the board she chairs, combines the National Dairy Board and the UDIA board. In this way, DMI brings together the national 5-cent spending with the portion of the 10 regional cents that is brought into national efforts under the unified marketing plan.

Peeling back layers of dairy checkoff report to Congress

The 2016 report touts a $5 to $1 return, but here is a deeper look. More transparency needed, sought

By Sherry Bunting, Farmshine, April 5, 2019

WASHINGTON, D.C. — USDA released the 2016 Dairy Checkoff Report to Congress on April 1, and it focuses on quantifying the return dairy farmers received for their 15 cents per hundredweight — over $320 million collected annually — in mandatory checkoff investment.

Well, not really.

The headliner is that farmers received a $5 to $1 return on their promotion dollars. But let’s look a little deeper.

The $5 to $1 return is an evaluation made by the independent analysis of Texas A&M based on the dollars spent on “demand enhancing” and “promotion” activities, not a return on investment calculated on all dollars mandatorily invested by dairy farmers.

Digging into the charts, this puts the evaluated dollars at around $250 million, and that includes the processor funds in the MilkPEP program. The total dairy farmer checkoff of 15 cents per hundredweight amounts to $320 million annually and the MilkPEP processor funds are close to $94 million annually, according to the report.

Meanwhile, a bipartisan bill was introduced in the U.S. Senate to bring transparency to checkoff programs for all farm commodities. The bill — Opportunities for Fairness in Farming (OFF) Act — was reintroduced a week ago by U.S. Senators Mike Lee (R-Utah), Cory Booker (D-N.J.), Rand Paul (R-Ky.) and Elizabeth Warren (D-Mass.).

According to an advocate of the bill — the Organization for Competitive Markets (OCM) — the OFF Act would put an end to the “most egregious abuses” committed by the boards and contractors of the federally mandated commodity checkoff programs.

OCM states that, “Checkoff programs have fallen under the control of commodity trade organizations representing global agribusiness interests,” noting that “farmers are struggling amidst increasing consolidation, low commodity prices, and excess supply. Net farm income is at a 19-year low. Along with recent trade disruptions and natural disasters, such as the flooding in the Midwest, the last thing farmers want or need is their tax dollars working against them.”

The OFF Act is intended to “rein-in conflicts of interest” and “stop anti-competitive activities” by forcing checkoff programs to publish their budgets and undergo periodic audits so that farmers and ranchers know where their mandatory checkoff dollars are going. It would also stop federally-mandated checkoff dollars from being transferred to parties that seek to influence government policies on ag issues and increase the transparency of the individual boards’ actions by shedding light on how these funds are spent and the purpose of the spending.

In light of this new bill, let’s look at the 2016 Dairy Checkoff Report to Congress released on April 1.

According to the 2016 Report’s executive summary, “… the combined effects of 2016 promotion activities on the consumption of fluid milk, cheese, butter, all dairy products, and dairy exports includes benefit cost ratios (BCRs) for dairy producers, dairy importers and fluid milk processors. For every dollar invested in demand-enhancing activities, the BCRs for producers were: 1) fluid milk $4.11, 2) cheese $4.81, and 3) butter $22.74, 4) exports $8.10. The BCR for fluid milk processors attributed to fluid milk promotion activities is $3.73. And the aggregate BCR on every ‘demand-enhancing’ dollar spent was calculated at $4.78.

Putting those BCR’s in perspective, the 2016 Report totaled the mandatory dairy promotion contributions at $415 million, of which $94 million was contributed by the Milk Processors Education and Promotion Program (MilkPEP), which are the funds paid by fluid milk processors for fluid milk promotion.

When looking at the graphs accompanying this report — since the report does not include the raw data points for 2016 — the total amount of domestic dairy demand-enhancing funds from which the BCRs (aka returns on investment) were calculated, comes out to around $250 million for the year. And a large chunk of that came from the fluid milk processors (over $80 mil).

From 1996 through 2016, the amount of money collected topped $7 billion, according to the report.

During those 20 years, the dollars spent on “demand-enhancing” activities for fluid milk have declined, and the fluid milk sales have declined also. Of the roughly $110 million spent on fluid milk demand-enhancing activities in 2016, most of those dollars came from MilkPEP generic promotion.

Also, keep in mind that the fluid milk sector is the sector held most notably to the standard of “government speech” in its “allowable” promotion i.e. the low-fat and fat-free USDA Dietary Guidelines that have precipitated the decline in fluid milk consumption.

In fact, whole milk sales rose in 2016 while the entire fluid milk category fell. But whole milk was not promoted with any of the producer or processor promotion funds overseen by USDA and evaluated in this report. Consumers chose whole milk based on external factors that are driving the discussion of fats and proteins in the diet.

The fastest growing demand-sectors in recent years include butter. The 2016 Report to Congress states that farmers received a $22 to $1 benefit cost ratio (BCR, aka return on investment) in that category.

That looks really great, right?

But again, this is based on the amount of “demand enhancing” funds actually spent on butter promotion in 2016 — right around $8 million for the year — the lowest category of all product promotion sectors to receive promotional funding, but the fastest rising in demand and value.

Put simply: Very little of the dairy farmer’s promotion funds (less than 2% of total checkoff funds) were used to promote butter, but sales have risen so fast in that category that the return on investment seems to be quite impressive. The “return” may have nothing to do with the “investment” under this scenario.

Meanwhile, Dairy Management Inc. (DMI) has continued consolidating the way it uses its national share of individual farms’ mandatory checkoff funds through business-to-business (B2B) partnerships where the goal is to influence the amount of dairy utilized by the top restaurant chains, pizza chains, and other foodservice companies in what they offer to consumers. This may become increasingly important as the government dietary guidelines and other factors pressure companies to use more plant-based options. But the drawback is that this B2B use of dollars feeds into further consolidation of the industry in terms of geographic winners and losers.

The key to looking at the 2016 Report’s BCR (returns on investment) calculations is the choices consumers are making where they actually have choices. Consumers are choosing whole milk and full-fat dairy at rising rates. Where they don’t have a choice, the low-fat and fat-free versions are enforced and offered. So while $110 million might have been spent by farmers and processors to enhance fluid milk demand, precious little, if any, has been used to promote the whole milk message due to USDA oversight of all advertising messages.

Part of the other half of checkoff funds not included in the “demand enhancing” and “promotion” BCR (return on investment) calculation is in dollars funneled toward the Innovation Center for U.S. Dairy.

What is the Innovation Center, farmers wonder?

The Innovation Center is the part of DMI that is considered “pre-competitive.” This includes new product development, like fairlife.

The Innovation Center also includes the FARM program that governs animal care standards and is increasingly seen as a methodical tool to control and cull dairy farmers by management style. Dairy producer checkoff funds have paid for the FARM program through DMI’s Innovation Center even though National Milk Producers Federation (NMPF) implements and administers FARM with DMI paying NMPF for certain services and NMPF paying DMI for other services.

The Innovation Center also includes the “sustainability” standards being set for FARM in conjunction with World Wildlife Fund (WWF) to streamline the dairy “industry” for WWF’s sustainability stamp-of-approval.

This alliance is clear when spending a little time browsing the WWF website at https://www.worldwildlife.org/industries/dairy. The DMI “partnership” with WWF through the checkoff-funded Innovation Center is also at this link https://www.worldwildlife.org/partnerships/innovation-center-for-us-dairy

Both links are housed by WWF’s website and WWF is also working in alliance with the beef checkoff to set sustainability parameters for U.S. cattlemen as well.

Meanwhile, HSUS is among the proponents of the OFF legislation introduced by Senators a week ago. This is the counter we here, how farm organizations seeking competitive markets are working on the same side with HSUS.

For the record, Dairy Checkoff and Beef Checkoff are working with WWF, and WWF is barely one step away from HSUS in terms of having an anti-animal-use agenda.

Both organizations seek to greatly decrease, or end, the use of animals for food, work, etc., and they seek the re-wilding of lands where farmers and ranchers have gone out of business to accumulate massive sanctuaries for wild animal proliferation while working in close partnership with EAT Lancet-supporting companies to shift the U.S. diet away from animal products to plant-and-laboratory-based-imitations.

What is missing in the “sustainability” discussion that farmers are helping to pay for with their checkoff dollars through their dairy and beef boards is the truth that the plants need the animals and the animals need the plants and we humans need them both for healthy bodies and a healthy planet.

What is also missing is the food security and regional economics of the food industry consolidation that is occurring in the name of “sustainability” through the very checkoff-funded “sustainability” programs that are being developed to appease groups like WWF.

If companies want to consolidate and streamline this way, that’s free market enterprise. They are free to do so. But should farmer checkoff funds be helping to pay for it?

For example, dairy farmer checkoff funds were used — according to the 2016 Report to Congress — to develop a variety of programs aimed at transforming the industry. This has been going on since 2009, according to the Report.

This means a portion of the dairy farmer checkoff funds collected from all dairy farmers on all milk from 2009 through 2016 has gone into developing programs that are not considered demand-enhancing and that are — in effect — picking winners and losers within the dairy farming sector.

These funds have been used to implement aspects of FARM in animal care and environmental sustainability.

These funds have been used to launch programs to reduce greenhouse gas emissions across the dairy supply chain, including a “fleet smart” program that touts its ability to help processors and cooperatives transform their trucking and distribution.

Read that sentence again. What does it mean?

Dairy farmers have funded — through mandatory checkoff — the development of the very programs that are streamlining and consolidating their industry in the name of so-called “sustainability.” As proprietary and co-op processors adapt the transportation and distribution ‘fleet smart’ modules, farmers are, in essence, paying for that with checkoff funds and other assessments put on them by their cooperatives, and in turn, those transformations make some farms desirable and others undesirable simply by size or location.

The invisible hand of the free market picks winners and losers. But in this case, should mandatory dairy farmer checkoff funds be the helping hand to pay for that? To pay for their own demise, in some cases?

It is interesting also to know that USDA is paid for its extensive time and costs to do all of this oversight – paid by these funds to keep the troops in line on toting government speech, among other things.

Here is how the 2016 Report to Congress describes USDA oversight:

“USDA has oversight responsibility for the dairy and fluid milk promotion programs. The oversight objectives ensure the boards and qualifying partners (QPs) properly account for all program funds and administer the programs in accordance with the respective acts and orders and USDA guidelines and policies. USDA reviewed and approved all board budgets, contracts, and advertising materials. USDA employees attended all board and committee meetings, monitored all board activities, and were responsible for obtaining an independent evaluation of the programs. Additional USDA responsibilities include nominating and appointing board members, amending the orders, conducting referenda, assisting with noncompliance cases, and conducting periodic program management reviews. The boards reimbursed the U.S. Secretary of Agriculture, as required by the acts, for all of USDA’s costs of program oversight and for the independent analysis.”

To be continued.

DMI CEO on fluid milk

‘Let’s have dairy-based protein in 3-D printers and whatever comes next.’

Schools represent more consumer touch-points for milk than all other sectors, combined

By Sherry Bunting, Farmshine, Friday, March 22, 2019

CHICAGO, Ill. — The fluid milk category is receiving much attention after a decade of rapid declines in sales. What does the CEO of the national dairy checkoff organization DMI have to say on the topic?

For starters, he says the dairy industry should stop blaming the alternative beverages and start looking at its own failures.

In his CEO’s Report, delivered at the February DMI board meeting, DMI CEO Tom Gallagher addressed the fluid milk question. While no press release or public statement or copy of the CEO’s Report was provided to Farmshine, a video was posted to the private Dairy Checkoff facebook page and was subsequently provided to Farmshine by a dairy farmer participant.

Since Gallagher states while giving his “CEO’s Report” that this information is ‘public’ and that “we want you to take pictures of it and share it, do what you want with it, it’s yours.” So we are sharing with Farmshine readers what was shared with us by dairy farmers what was shared with dairy farmers via the closed facebook group.

Gallagher began his report talking about farmer engagement. 

“The power of the industry is within the industry, it’s the farmer,” he said. “We can commit to activating the dairy farmer at the local and national levels, then we can have a big voice, especially, on what it is that your checkoff really does.”

He talked about the changing world of consumer influence, saying that, “When you think about the things we need to do, more and more they are moving away from the things we are familiar with.”

From there, he referenced a presenter for the following day who would be talking about the future, about 3-D printing of food.

“Well, it’s not the future because you can go on Amazon today, and for $2000, buy a 3-D printer that will print dessert for you,” said Gallagher. “We think, why would people eat that? They don’t like processed foods. But the people who make those and the food production people — and hopefully dairy protein will be in that, not plant protein — they don’t need the 90% of people consuming your product. They just need 5 or 10 or 4% to have a very successful business. If that’s what people are going to be doing, we need to be there.”

Gallagher announced that DMI will be buying a 3-D printer, a few of them. “We’ll buy one, and we’re going to figure it out and we’ll figure out how to approach these 3-D printing companies with dairy-based proteins in foods to be used in them,” he said. “We can’t afford to be nickeled and dimed with 4% of consumers here and 5% there.”

He went on to observe that just 4% of consumers identify as vegan and that vegetarians are also a small number. “What is really driving plant-based foods and beverages is not predominantly the vegan movement, it’s because these companies are investing  hundreds of millions of dollars and are getting really good at taste, are phenomenal at marketing and great at innovation.”

He referenced diets that promote being vegan or vegetarian before 6:00 and other consumer trends.

“I think our goal is it is not either-or, it can be both… We have to be honest with ourselves, there will be plant-based beverages out there, and people will buy them, and they will gain share, not because people are vegan or concerned about sustainability… it’s because the food and beverage companies are doing a great job at what they do,” Gallagher said.

“If we do the same job in the dairy industry, we will be just fine. But if we sit back like we did with fluid milk, we will be where we are with fluid milk,” he added.

Referencing a report in the 1980s before the checkoff was authorized by Congress, Gallagher said: “That report laid out everything that needed to be done for fluid milk, and that same report would be valid today because none of it was done — not until fairlife and a few other things.”

“It’s not that the bad guy came and took it (fluid milk sales), it’s that us, the dairy industry collectively, did not keep growing and innovating and doing what we should do,” said Gallagher from a marketing, not policy, standpoint. “Instead of getting in a lather about plant-based food companies, let’s do what we are supposed to be doing as an industry.

“Let’s do marketing. Let’s do innovation. Let’s have dairy-based protein in 3-D printers and whatever comes next. That’s were we need to be,” said Gallagher. When it comes to policy, nutritional values and sustainability discussions, that’s another discussion we need to enter into.” 

In the breakdown on sales, he said foodservice milk is up slightly even though retail and other sectors are down. The data was by servings, and he explained how sales figures are pieced together and how program evaluations fit into those.

He also talked about a meeting DMI had with the top persons from the five top coops for packaged fluid milk salesn — DFA, Select, Prairie Farms, Darigold and Maryland-Virginia — along with Jim Mulhern of NMPF, Tom Vilsack of USDEC, Rick Naczi of ADANE, Marilyn Hershey, president of DMI, along with a former CEO of fairlife with some insights. 

“We came out of that meeting as positive about fluid milk as ever on how the industry can work together to change the trajectory,” said Gallagher, explaining that they looked at how much of fluid consumption is really pushed down into Class II, and to see if getting and including that number, what that would do to the per-capita fluid milk consumption numbers. 

“The group focused on kids. Kids is the deal — at 6 billion containers a year, when everything else is 5.3 billion,” said Gallagher. “So while schools only represent 7.7% of consumption, it represents more touch-points with consumers than everything else combined. So, they, on their own, quickly came to the conclusion that we have got to deal with the kids for a variety of reasons — sales and trust. And they asked DMI to put together a portfolio of products for kids inside of schools and outside of schools. What are the niches that need to be filled? What’s the right packaging? What needs to be in the bottle? And we can do that,” he said.

Depending on the results of the next meeting, the circle could be expanded. And regulatory, legislative and standards of identity issues were brought up that DMI can’t be involved in, but NMPF can. 

Author’s note: Meanwhile, all of those kids in school, those 6 billion touch-points for milk every year that surpass all other touch-points for milk, combined, are forced to consume (or discard) fat-free or 1% milk. The simple answer would be to give them whole milk that tastes good so they know what milk is vs. trying to re-invent the wheel. As an industry, we can’t know what the per-capita fluid milk consumption figures would look like today if the 60 billion touch-points over the past 10 years had been permitted by the government to consume whole milk. Before reinventing some pre-competitive proprietary wheel, shouldn’t those touch-points (schoolkids) have an opportunity to try real whole milk?

To be continued

The need for more digging is even more obvious

Delays, diversions and disregard for specific questions keep the investigation rolling.

By Sherry Bunting, Farmshine, March 1, 2019

BROWNSTOWN, Pa.– The public record is clear on Dairy Checkoff alliances of the past decade through GENYOUth, and the financial side of the picture is coming into even sharper focus. 

Meanwhile, important questions were only partially answered last week while other questions were outright ignored.

This is especially true about the questions concerning the firm doing public relations and marketing for DMI over the past 20 years. 

Instead of answering those questions, we saw diversions. We saw DMI chairperson Marilyn Hershey, in her letter on page 17 of Farmshine last week (and at the end of the article at this link, here), give Dairy Checkoff the credit for changing the conversation on milk fat! Hard to believe!

While it is true that Dairy Checkoff has moved a bit in that direction since 2014, the change in the conversation can be attributed to independent science writer Nina Teicholz and her 10 years of exhaustive investigation that led to her book The Big Fat Surprise, which led to the interest of Time magazine on this topic.

As for our unanswered questions? We are still waiting.

Last week, we referenced some of the questions that had been sent to DMI three weeks ago. One being the MOU between USDA, Dairy Checkoff and NFL.

In previous installments of this series, we had mentioned the Memorandum of Understanding (MOU) signed by USDA and other government agencies, along with GENYOUth, National Dairy Council (NDC / DMI) and National Football League (NFL), and we included a photo of the original 2011 signing found on a Flickr photo stream link at a USDA blog post that year.

There had been no press release about this development at the time. But that’s water under the bridge.

After examining the public record, we reached out to DMI via chairperson Marilyn Hershey, and her letter, of course, was published on page 17 in the Feb 22 edition of Farmshine and at the end of the report at this link. Instead of answering each of our questions, she chose the option of writing a letter for publication, unedited, in Farmshine.

Most of the questions, however, remain unanswered. While there are vague glimpses here and there of something to hang a hat on, it is the outright silence on some questions that is so telling.

First and foremost, we have not received the requested full copy of the MOU. Our request to DMI was ignored. Our request to USDA has been referred to Public Affairs. And we wait.

Hershey maintained in an email response that the MOU is nonbinding and has nothing to do with how milk is promoted in school. In her letter, she said,“MilkPEP and DMI programs are limited to promoting school milk as governed by the Dietary Guidelines set by USDA.”

As mentioned last week, there is nothing in the Checkoff Order that requires this, just a progression in that direction over the past 10 years, and no sign of the MOU that was in development 10 years ago and officially signed eight years ago.

Another question we asked was: “What role did Edelman (the longtime public relations firm for DMI) play in the creation of GENYOUth as some public articles say Richard Edelman, on the GENYOUth board played a significant role?

This question was completely ignored in both the DMI letter published last week and in any other correspondence with Hershey or DMI staff. It was not even acknowledged. When pressed, it was ignored further.

We also asked: “What role does Edelman continue to play and are you at all concerned that Edelman and other aligned partners in GENYOUth are aligned with the EAT Forum, specifically the FReSH initiative which seeks to accelerate global transformation of the food system to plant-based diets for “healthy people and a healthy planet”?

This question was also completely ignored in both the DMI letter published last week and in any other correspondence with Hershey or DMI staff. It was not acknowledged.

Meanwhile, after these articles were published, the information has come under heavy criticism by DMI staff and board members in discussions with questioning farmers on the private facebook page where farmers can join to ask checkoff-related questions and DMI staff and board members engage in conversation. 

There, farmers who ask are told on the one hand that Edelman is “not involved” in the EAT Lancet Commission or EAT FReSH initiative, and on the other hand that it’s “good to have representation on the inside”. 

But again, no public statement or answers to these questions are forthcoming. This seems odd given that DMI is funded by dairy farmers through an Act of Congress and the questions are being asked by a dairy farming publication.

When asked if a particular statement made by DMI staff on the private Checkoff facebook page is considered an official public statement answering a question for which we have not yet received an answer, the staff reply by email was that these statements are only for the private facebook participants, not official public statements.

To this point, we have information from the public record,  questions for which we have received indirect answers, at best. Many questions that have been completely ignored. And we have a letter of response that contains plenty of diversions.

I find it puzzling that Hershey attempts to position DMI in the letter as the champion of changing the conversation on milk fat, that checkoff would be credited with the Time magazine “Eat Butter” cover in 2014, when that was through the independent work of science writer Nina Teicholz! 

I find it puzzling that I was promised a long list of all the whole milk and full-fat dairy research DMI has done for years to change the conversation, but I am still waiting for that list.

These are more diversions. Look over here, not over there. 

We’ll look at some of the other unanswered questions next week and see if we can press for more information about the Edelman PR firm regarding the EAT FReSH initiative.

As the public record is clear on some of the Dairy Checkoff alliances of the past decade, and as the financial side of the GENYOUth connection comes into sharper focus with additional documentation that is surfacing, and as specific important questions about the Edelman firm doing public relations and marketing for DMI over the past 20 years are ignored, it’s obvious to me that the digging needs to go further. 

And it will. 

-30-

Gov. speech rules; producers have little say

Creation of GENYOUth in 2010 brought Dairy Checkoff and USDA into closer alignment

By Sherry Bunting, Farmshine, February 22, 2019

BROWNSTOWN, Pa. — Examining the public record over the past six weeks, we find no specific language in the Dairy Research and Promotion Order requiring commodity checkoff organizations to promote USDA Dietary Guidelines. Legal and other challenges may have fostered this association as the federal government’s defense of mandatory checkoff programs in the 2006 time frame offered protection as “government speech.”

A slippery slope, but the shoe fit as Congress authorized these programs in 1983, and USDA oversees them, appoints the boards that manage them and enforces the assessments paid by producers to fund them.

With the government declaring checkoff advertising to be “government speech” as a defense to challenges, producers cannot claim they are forced to support private or commercial speech with which they disagree. Instead, they are said to be supporting “government speech,” which is protected from such challenges, according to a scholarly articles published by Parke Wilde, a Cornell-educated professor of nutrition science and policy at the Friedman School at Tufts University. 

Wilde is the author of several editions of “Food Policy in the United States.” His 2010-12 article, entitled Federal Communication about Obesity in the Dietary Guidelines and Checkoff Programs explored this relationship, with special focus on dairy and meat checkoff programs. In fact, he wrote in 2018 about diet as a means of reducing greenhouse gas emissions late in 2018 previewing the EAT Lancet Commission’s report released officially in January 2019.

While Congress has never acted to require checkoff promotion within the boundaries of USDA Dietary Guidelines, the path to align the two was chosen by dairy checkoff in 2010 to protect it from external and internal challenges.

Dairy collects, by far, the largest pot of money among all checkoffs – approximately $350 million annually. Much of this money over the past 10 years has been spent through various partnerships in pre-competitive environments to potentially drive category demand, particularly for cheese.

The creation of GENYOUth in 2010 brought Dairy Checkoff and USDA into closer alignment. 

Unanswered questions remain. On February 11, specific questions and document requests were sent by email to Marilyn Hershey. A Chester County, Pennsylvania dairy producer with her husband Duane, she has served on the DMI board for almost seven years and has been chairperson for almost two years.

We asked specific questions about GENYOUth and Fuel Up to Play 60 (FUTP60) and other aspects of DMI alliances, including a request for information about the role of Edelman in the founding of GENYOUth.  As mentioned last week, Edelman is the world’s largest marketing, communications and public relations (PR) firm, and they have done social marketing and communication strategies for DMI for 20 years, including the 2017 creation of the Undeniably Dairy social ‘trust’ campaign.

We also asked if DMI had knowledge or concern about Edelman’s simultaneous involvement as social marketing and communications strategist for the EAT Lancet Commission, EAT Forum, and in particular the EAT FReSH Initiative — funded by 41 corporations, many of them Edelman clients.

We asked what specific entities received the more than $2 million paid annually in 2014-17 for “professional services” from the GENYOUth fund, which is by DMI’s own 2016-17 audit, described as being primarily funded by DMI “as the primary source of unrestricted funds for administration and operations” to the tune of more than $2.5 million annually.

We asked why the audit shows those numbers funding GENYOUth, which are much larger amounts than the $1.5 million listed annually as DMI contributions on the GENYOUth 990 forms filed with the IRS.

We asked for a full copy of the Memorandum of Understanding (MOU) signed by National Dairy Council, USDA and the NFL in 2011 after the agreement for GENYOUth was solidified in 2010.

We asked for specific dairy sales tracking data from FUTP60 schools before and after receiving a grant for implementation, since we have learned from current and former board members and staff of DMI that this information is available and in fact part of the grant process.

We asked for comments about the benefits of GENYOUth programs to dairy farmers, such as what has been mentioned in the articles already in terms of breakfast carts containing dairy offerings, asking for specific information about recorded dairy sales via the breakfast carts.

And we asked for comments about the GENYOUth alliances being formed, and how they are beneficial for the dairy farmers funding the checkoff, which remains the foundation’s primary sponsor for operations – given the example of PepsiCo’s specific goals to be a leader in plant-based diet transformation through the incubator and ‘oat milk’ the company CEO touted when receiving the Vanguard Award at the 2018 GENYOUth Gala.

These questions were presented, and two options were offered — answering the questions point-by-point or providing a letter of response.

Marilyn Hershey chose the latter, providing Farmshine with a letter of response on Feb. 18, which was published on page 17 of the Feb. 22 edition (see it included at the end of this report).

As an editor’s note, the DMI letter of response by Hershey highlights the June 23, 2014 Time Magazine “Eat Butter” cover story, by Brian Walsh, as a checkoff accomplishment that changed the conversation on fat. However, Walsh in fact wrote the revealing cover story one month after his May 14, 2014 review of The Big Fat Surprise, by Nina Teicholz, which made the New York Times Best Sellers List at that time.

Walsh had reviewed her book before his “Eat Butter” story, stating: “It’s nutrition dogma: saturated fat is bad for you. But a new book makes the case that our obsession with low-fat diets has made us, and he went on to tell of the “6 facts about saturated fat that will astound you” as revealed in Teicholz’s book.

In fact, the checkoff-funded full fat dairy research mentioned by Hershey in her DMI response is said to be within the past five years, which would be since the publication of Teicholz’s book, which lays out the 10 years of investigation Teicholz conducted as an independent investigative science journalist, beginning in 2004. She accepted no industry funds for this work.

Walsh in his Time cover story retraced the steps of Teicholz’s book, leading with: “The taste of my childhood was the taste of skim milk. We spread bright yellow margarine on dinner rolls, ate low-fat microwave oatmeal flavored with apples and cinnamon, put nonfat ranch on our salads. We were only doing what we were told” (And what we are still told).

He then retraced the history Teicholz laid out in her book, beginning at the point in the book where a Senate committee, led by George McGovern in 1977, codified the Dietary Guidelines by 1980.

And, like today with the EAT Lancet Forum unfolding before our eyes, the food industry jumped in step – overnight — filling shelves with lowfat offerings and effectively replacing fat with sugar and carbs.

“… beef disappeared from the dinner plate, eggs were replaced … and whole milk almost wholly vanished,” Walsh wrote in the 2014 Time article patterned from the work of Teicholz he had reviewed a month earlier. “We had embarked on a vast nutrition experiment… Nearly four decades later, the results are in: The experiment was a failure.”

We will leave it to readers to determine whether the letter of response (below the chart) answers these questions.

———————————————————-

DMI chair Marilyn Hershey responds

Marilyn Hershey

I am thankful that Farmshine gave me the opportunity to comment on the series of recent articles that have been published about the work of the checkoff.

Let me introduce myself, I’m Marilyn Hershey, a fourth-generation dairy farmer from Pennsylvania and have been Chairman of Dairy Management Inc., for a little more than a year.

As a dairy farmer, like all of you, I’m experiencing the same economic difficulties and challenges. I invest in the checkoff just like every dairy farmer in the U.S. does. And just like everyone else I expect a solid return on my investment. Like you, I too want to ensure that my checkoff investment is used effectively to increase sales and trust. So does every member of both the DMI Board and the State and Regional Promotion Boards.

My fellow board members and I take great care in knowing and watching how every penny is spent by the checkoff to improve sales and trust on behalf of all dairy farmers. And we take program measurement and accountability seriously.

I have recently read Farmshine articles where GENYOUth and other checkoff related matters are discussed. Many of the statements and conclusions are out of context. 

As a dairy farmer, I am extremely proud of the programming that has been put into place to help raise healthy and high-achieving youth for decades. While my aim is not to provide a counter to each point, I do want to share a few key facts about the achievements we’ve made through farmers’ investments in dairy promotion and youth wellness.    

First, the fact is, dairy processors’ milk promotion board MilkPEP and DMI programs are limited to promoting school milk as governed by the Dietary Guidelines set by USDA. But we have had a laser focus on bringing full fat milk, and its benefits, back to the diet.

As you are aware, the benefits of milk fat are finally being recognized in the public health community as essential in the diet. Why? The checkoff. The checkoff research on the value of dairy fat was an important foundation for the health professional community to rethink the role of dairy fat in the diet, ultimately leading to the Time Magazine cover headline, “Eat Butter.”

This change in thinking, plus the powerful voices of leaders like Nina Teicholz, are why full-fat dairy products such as whole milk are enjoying a resurgence with consumers. For more on farmer-funded NDC research over the last five years, people can visit  http://researchsubmission.nationaldairycouncil.org.

Given all that has been accomplished in this arena, we are hopeful that the next round of Dietary Guidelines will include whole milk. I am also hopeful that the new Dietary Guidelines Committee will include voices around the table that support and stand behind whole milk.

Second, GENYOUth, just like the Gala it hosts, brings a net return of other organizations’ resources and money well above any farmer expenditure.

Through the Fuel Up to Play 60 program, the money coming from other companies has been used to fund school breakfasts and breakfast carts, which always include milk along with rotating options like yogurt, whole grain granola bars, string cheese, oatmeal, and fruit. The resources have also helped translate Fuel Up to Play 60 into Spanish for the increasing number of Hispanic students in America’s schools.

Through our efforts, we have increased millions of school breakfast meals each year consumed by kids, all of which include servings of milk and possibly yogurt and cheese. As a farmer, I’m very proud of this achievement.

As we look at our American Dairy Association North East specifically, we served 104,226 additional breakfasts in 2018. The new dairy occasions were over and above 2017’s numbers. Dairy is optimized in the breakfasts. We calculate that three-quarters of the kids choose milk as their drink of choice in this breakfast opportunity. 

Another recent example of unlocking GENYOUth’s network in partnership with the local promotion group includes securing funds from five new benefactors leading up to Super Bowl 53 — Georgia Power, Delta, The Home Depot, Arby’s Foundation and WellCare. These companies contributed $400,000 to get 53 breakfast carts into Atlanta schools, increasing access to 5.3 million breakfasts over the course of a school year.  

Being a part of GENYOUth, gives us the ability to work with other companies and health professional organizations to extend the message of dairy’s role in the diet. It also gives us the ability to educate others on the exceptional things dairy farmers do on their farm and in their communities.

What’s more, when we need coalition partners to address things like plant-based diets, attacks on dairy farmer practices and/or on animal agriculture in general, we benefit by having partners who speak on our behalf. For example, Domino’s, who sits on the GENYOUth board and funds GENYOUth, has been a strong proponent for dairy farmers. Domino’s has donated $1 million to the future of farming through FFA.

It’s unrealistic to expect to combat animal agriculture detractors without allied partners in health and wellness, environment and agriculture across a wide range of industries. This is a fact.

Since the articles have been published, I am not going to address each point. However, I contribute posts to a checkoff blog at www.dairy.org/blog where I will include more information about GENYOUth and youth wellness programming, as well as keep you informed of other activities the checkoff is implementing locally, nationally and internationally on dairy farmers behalf. Thank you for listening.

-30-