Are we moving toward cow islands and milk deserts?

Posted on August 20, 2022 by Agmoos

Opinion/Analysis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The South —

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

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

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

The Midwest —

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

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

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

The Northeast —

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

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

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

The long and twisted tale begs additional questions:

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

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

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

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

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

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

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

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

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

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

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

Posted on June 23, 2022 by Agmoos

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

NEWS / ANALYSIS

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

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

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

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

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

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

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

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

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

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

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

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

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

These are pretty words.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Will DMI’s transformation strategy leave dairy unrecognizable?

Posted on October 14, 2021 by Agmoos

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

By Sherry Bunting, Farmshine, October 15, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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MilkPEP stays the course to uphold nutritional values

Posted on September 3, 2021 by Agmoos

Doing so means walking away from DMI and NFL constraints

By Sherry Bunting, Farmshine, September 3, 2021

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

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

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

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

Some history is in order.

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

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

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

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

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

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

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

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

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

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

This created conflict with the NFL.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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‘Carbon-negative milk?’ Northeast, Southeast milksheds can already claim it

Posted on July 26, 2021 by Agmoos

EDITORIAL – OPINION

By Sherry Bunting, Farmshine, July 16, 2021

Farmshine readers will recall coverage of the U.S. Senate Ag Committee’s climate hearing in 2019, when Tom Vilsack, then president and CEO of U.S. Dairy Export Council, lobbied the Senate for climate-pilot-farm-funding. Remember, he announced DMI’s Net Zero Initiative at that hearing – five months ahead of its formal unveiling.

In that same June 2019 hearing, animal scientist and greenhouse gas emissions expert Dr. Frank Mitloehner of University of California-Davis explained the methane / CO2 ‘biogenic’ cycle of cows.

He said that no new methane is produced when cow numbers are “constant” in an area because methane is short-lived and converts to CO2 in 10 years time, which is then used by plants, cows eat the plants, and the cycle repeats.

Dr. Mitloehner also said that this cycle changes when cattle concentrations move from one area to another.

Nationally, dairy cow numbers are rising after decades of declining. However, in the Northeast and Southeast milksheds, cow numbers are declining — and by a wide margin.

This should indicate net methane reductions in the biogenic cycle or negative carbon milk for the fluid milk regions of the Northeast and Southeast.

As USDA and the industry coalesce around DMI’s unified approach through the Net Zero Initiative and the work of DMI’s Dairy Scale for Good with partner WWF — stating large integrators can be net zero in five years to spread their climate ‘achievements’ across the footprint of all milk in the dairy supply chain — I have to wonder what this means for the areas of the country beyond the ‘chosen’ growth areas.*(see footnote at the end)*

Looking at the work of DMI’s Innovation Center and it’s fluid milk revitalization committee, sponsoring the launches of various diluted dairy-‘based’ beverages, something occurred to me from a marketing standpoint.

Here is a thought that could be helpful in the future for whole fluid milk bottled regionally to compete with emerging climate claims of dairy-‘based’ beverages that are made with ultrafiltered solids shipped by centralized cheese and ingredient facilities (without the water) to be reconstituted as mixtures with plant-based alternative beverages for population centers on the coasts.

The milk produced and bottled in the Northeast and Southeast milksheds is not just carbon neutral, it’s already carbon negative, producing not just no new methane, but less than prior-decades’ methane.

Bear in mind, these new dairy-‘based’ — blended — beverages are NOT Class I products. I have been informed that the 50/50 blends, for example, do not meet the standard of identity for milk, nor do they meet the milk solids profile that requires Class I pricing. This means that even though milk is part of a fluid dairy-‘based’ beverage, it is not priced as Class I.

The milk used in these emerging products that combine ultrafiltered solids with water, additives and maybe an almond or two, fall into Class IV, some are Class III if whey protein is used. Examples include products like DFA’s Live Real Farms ‘Purely Perfect Blend‘ that arrived recently in Pennsylvania and the greater Northeast after its first test-market in Minnesota.

Think about it. Unity is great on many levels, and is to be encouraged in an industry such as dairy, but when it comes to marketing, who is calling the shots for future viability within the DMI integration strategy, otherwise known as unity?

Pre-competitive alliances and ‘proprietary partnerships’ working on food safety are wonderful because all companies should work together on food safety. But animal care? Environment? Climate? Why not just offer quality assurance resources and pay farmers certain premiums for investing as companies would like to see and pay them for providing the consumer trust commodity — instead of implementing one-size-fits-all branches in programs like F.A.R.M.?

These so-called voluntary programs have the power to negate contracts between milk producers and their milk buyers even though consumer trust is a marketable commodity that producers already own and are in fact giving to milk buyers, and their brands, without being compensated.

Instead, producers are controlled by arbitrary definitions of the consumer trust commodity that the producers themselves originate. This goes for Animal Care, Worker Care, Environment, and Climate.

The pre-competitive model used in food safety is applied to all four of the above areas today. This is exactly the supply-chain model World Wildlife Fund (WWF) — DMI’s ‘sustainability partner’ — set in 2010 to “move the choices of consumers and producers” where they want them to go.

*footnote

In the 2019 Senate hearing referenced at the beginning of the above op-ed, Dr. Mitloehner stated that the mere fact there are 9 million dairy cattle today compared with 24 million in 1960 and producing three times more milk shows that dairy producers are collectively not only emitting zero new methane, they are reducing total methane as old methane and carbon are eradicated by the carbon cycle and less new replacement methane is emitted.

The problem may be this: Year-over-year cow numbers for the U.S. are creeping higher. While still much lower than four to five decades ago, the issue emerging for DMI’s Innovation Center for U.S. Dairy is how to accommodate growth of the new and consolidating dairy structures to attain the checkoff’s expanded global export goal and to accommodate massive new dual-purpose plants if dairy farms in other areas remain virtually constant in size, grow modestly, or decline at a rate slower than the ‘designated’ growth areas are growing.

DMI is at the core of this, you see, to reach it’s new collective net-zero goal, cow numbers would have to decline in one area in order to be added in another area, or they will all have to have their methane buttons turned off or the methane captured because now the emissions are being tracked in order to meet one collective “U.S. Dairy” unit goal under the DMI Innovation Center and F.A.R.M.

At that 2019 Senate hearing, Dr. Frank Mitloehner testified that dairies already create zero new methane but this can be tricky when cattle move from one area to another (as we see in the industry’s consolidation). Then we have DMI’s Dairy Scale 4 Good claiming the dairies over 3000 cows can be net-zero in 5 years and ‘spread their achievement’ over the entire milk footprint. Do we see where this is going?

Will all dairy farms have to meet criteria — set by organizations under the very umbrella of the checkoff program they must fund — to get to a ‘collective’ net-zero using the GHG calculator developed by the checkoff-funded Innovation Center in conjunction with its partner WWF (12 year MOU)? This GHG calculator has been added to the FARM program. These are the big questions.

Dairy situation analysis: What’s up with milk production?

Posted on July 26, 2021 by Agmoos

Record high milk growth vs. record high losses, dissected

Printable PDF: dairy_situation_analysis_bunting_july_2021_final-1 Download

By Sherry Bunting, both parts of a two-part series in Farmshine, July 2021

The dairy industry continues to wait for USDA to provide details on three areas of dairy assistance already approved by Congress or mentioned as “on the way” by Ag Secretary Tom Vilsack.

The fly in the ointment, however, is the record-high 2021 milk production (Table 1) and accelerated growth in cow numbers (Table 2) at a pace the recent USDA World Agriculture Supply and Demand Estimates (WASDE) expect to continue into 2022.

USDA is reportedly looking at production reports — up vs. year ago by 1.9% in March, 3.5% in April, 4.6% in May — to determine how to assist without adding fuel to expansion that could threaten late 2021 milk prices in the face of rising feed costs and a worsening western drought. (The latter two challenges could temper those forecasts in future WASDEs.)

May milk production a stunner

U.S. milk production totaled 19.9 billion pounds in May. This is a whopping 4.6% increase above 2020 and 2018 and a 4.1% increase over May 2019.

Let’s look at year-to-date. For the first five months of 2021, milk totaled 96 billion pounds, up 2.3% vs. the 93.8 billion pounds for Jan-May of 2020, and it is 4.4% greater than the 91.9 billion pounds of Jan-May milk produced in pre-pandemic 2018 and 2019. Of the four years, only 2020 had the extra production day as a Leap Year.

Milk per cow was up 3% over year ago in May. Compared with 2019, output per cow is up 2.2%, according to USDA.

Cow numbers vs. 2018 tell the story

Milk cows on U.S. dairies in May 2021 totaled 9.5 million head, up 145,000 from May 2020’s 9.36 million, up 172,000 from 2019’s 9.33 million, and up 83,000 head from 2018’s 9.42 million.

Counter to the national trend, Pennsylvania had 48,000 fewer milk cows than May 2018 — dropping 30,000 into 2019; 10,000 into 2020, and 8,000 into 2021.

Elsewhere in the Northeast and Southeast milksheds, among the 24 major monthly-reported states, New York had 4000 more milk cows in May 2021 than 2018, Vermont 8000 fewer. Georgia dropped 1000, Florida 12,000, and Virginia 11,000. In the Central states, Illinois was down 10,000 head.

The total decline in cow numbers for the 24 lesser quarterly-reported states, the collective loss in cow numbers is 59,000 head from May 2018 to May 2021

Accelerated growth is coming from three key areas where major new processing assets have been built or expanded.

In the Mideast, where the new Glanbia-DFA-Select plant became fully operational in Michigan this spring, there is a net gain of 32,000 cows for 2021 vs. 2018, Ohio’s cow numbers that had been declining 2018-19, began recovering in 2020-21. Indiana had 18 months of substantial growth, and Michigan returned to its growth pattern in 2020. Taken together, the Indiana-Ohio-Michigan region had a loss of 8,000 cows heading into 2020, but gained a whopping 40,000 cows over the past year.

In the Central Plains, where new plant capacity is starting up this spring and summer — Minnesota, South Dakota and Iowa, combined, added 40,000 cows May 2018 to May 2021.

In the Southern Plains, where joint-venture processing capacity continues to grow, Texas has continued full-steam-ahead, gaining 87,000 cows from 2018 to 2021, along with 29,000 added in Colorado and 17,000 in Kansas. New Mexico regained earlier losses to be 2000-head shy of 2018.

The growth patterns in these regions somewhat mirrored dairy exits from other areas — until Jan. 2020 (Table 2). The past 17 consecutive months of year-over-year increases in cow numbers leave the U.S. herd at its largest number in 26 years (1995).

However, the assumption that ‘dairy producers are okay because the industry is expanding’ ignores several essential factors. The playing field has become more complicated and inequitable. There are four main factors at play. We’ll look at them one at a time.

Ben Butler of South Florida posted this photo that went viral on Twitter April 2, 2020 of milk being dumped in Florida because there was no home for it. A few days later, he tweeted photos of milk gallons also being donated to Palm Beach County families in need. Challenges abound in the dairy supply chain. The unofficial tally of milk dumped in the Northeast and Mid-Atlantic region the first week of April 2020 was north of 200 loads, with additional reports of 130 loads dumped in the Southeast. Meanwhile, stores were not well stocked, most were limiting purchases and foodbanks were getting more requests as over 10 million people were newly out of work.

Factor #1 — Milk dumping and base programs

A year ago in April and May 2020 — at the height of the Coronavirus pandemic disruptions — the dairy industry saw dumping of milk, stricter base programs and bigger milk check deductions. Producers culled cows, dried cows off early, changed their feeding programs, even fed milk in dairy rations.

But milk production still grew, according to the USDA data.

Some cooperatives and milk buyers, like Land O’Lakes, had base programs already in place and triggered them. Others made changes to prior programs or implemented new ones.

Dairy Farmers of America — the nation’s largest milk cooperative, largest North American dairy processor and third-ranked globally by Rabobank — quickly implemented a new base program in May 2020, seeking 10 to 15% in production cuts from members, varying by region, with overage priced on ‘market conditions.’

It is difficult to assess the ‘equity’ in these base programs and the cross-layers among producers between and within regions, or to know how these ‘bases’ are being handled presently. When questioned, spokespersons say base decisions are set by regional boards.

Meanwhile, product inventory and pricing schemes affect all regions, and milk rides between FMMOs in tankers and packages — with ease.

According to USDA, the 11 FMMOs dumped and diverted 541 million pounds of milk pooled as ‘other use’, priced at Class IV, during the first five months of 2020, of which 350 million pounds were in April alone. This is more than three times the ‘other use’ milk reported by FMMOs during the first five months of pre-pandemic 2019 (171.4 million pounds). By June, the amounts were double previous years.

Of this, the largest amount, by far, was the 181 million pounds of ‘other use’ milk in the Northeast FMMO 1 during Jan-May 2020, comprising one-third of all the dumped and diverted milk pooled across all 11 FMMOs in that 5-month period.

In the Southeast milkshed, the Appalachian, Florida and Southeast FMMOs 5, 6 and 7, together pooled 88 million pounds of ‘other use’ milk in the first five months of 2020. The Southwest FMMO 126 had 106.2 million pounds of ‘other use’ milk; Upper Midwest FMMO 30 had 46.1 million pounds; Central FMMO 32 had 36.7 million pounds; Mideast FMMO 33 had 30.7 million pounds; California FMMO 51 had 28.9 million pounds; Arizona FMMO 131 had 21.7 million pounds; and Pacific Northwest FMMO 124 had 1.3 million pounds.

The dumping had begun the last week of March 2020 and was heaviest in the month of April. Producers also saw deductions as high as $2/cwt. for balancing costs, lost quality premiums, and increased milk hauling costs. Unaccounted for, were the pounds of milk that had reportedly been dumped on farms without being pooled on FMMOs.

All of this against a backdrop of pandemic bottlenecks and record-high March-through-August imports of butter, butteroil, milkfat powder, and blends — adding to record-high U.S. butter inventories and contributing to the plunging Class IV, II and I prices vs. Class III (PPD).

Meanwhile, not only did production growth in key areas move ahead, so did strategic global partnerships. Just one puzzling example in October 2020, after eight months of deflated producer milk checks, depressed butterfat value, burdensome butter inventory, record butterfat imports, and a plunging Class IV milk price that contributed to negative producer price differential (PPD) losses, Land O’Lakes inked a deal to market and distribute cooking creams and cream cheeses — Class II and IV products that use butterfat — from New Zealand’s Fonterra into United States foodservice accounts.

The New Zealand press reports were gleeful, citing this as a big breakthrough that could be followed by other of their cheeses entering the “huge” U.S. foodservice market through the Land O’Lakes distribution.

Factor #2 — Class price wars and de-pooling

As reported in Farmshine last summer, dairy farmers found themselves in uncharted waters. As Class IV prices tumbled from the get-go with all of the ‘other use’ dumping and diverting, butter inventory building as butter/powder plants tried to keep up with diverted loads at a disruptive time, the USDA Food Box program started drawing products in the second half of May, and really got going by July 2020.

Cheese, a Class III product, was a big Food Box winner. The cheese-driven Class III milk price rallied $7 to $10 above Class IV, and massive volumes of milk were de-pooled by Class III handlers, which has continued through May 2021.

Reviewing the class utilization reports, an estimated 80 billion pounds of Class III milk normally associated with FMMOs has been de-pooled over the past 26 months.

At the start of this ‘inequitable’ situation, academic webinars sought to explain it.

“We’re seeing milk class wars,” said economist Dan Basse of AgResource Company, a domestic and international ag research firm in Chicago, during a PDPW Dairy Signal webinar a year ago.

He noted that under the current four-class pricing system, and the new way of calculating the Class I Mover, dairy farmers found themselves “living on the edge, not knowing what the PPD (Producer Price Differential) will be” (and wondering where that market revenue goes).

“A $7.00 per hundredweight discount is a lot of capital, a lot of income and a lot of margin to lose with no way to hedge for it, no way to protect it, when the losses are not being made up at home as reflected in the PPD,” Basse said in that summer 2020 webinar.

What does this have to do with year-over-year milk production comparisons?

Two words: Winners. Losers.

Some handlers, and producers won, others lost — between and within regions.

Here’s why all of this matters from a production comparison standpoint: Dairy economists — Dr. Mark Stephenson, University of Wisconsin, and Dr. Marin Bozic, University of Minnesota — are both on record acknowledging that USDA NASS uses FMMO settlement data, along with producer surveys, to benchmark monthly milk production.

So, on the one hand: How accurate are these data for comparison over the past 26 months, given the inconsistent FMMO data from dumping, diverting and de-pooling?

On the other hand: Did the negative PPDs and de-pooling, resulting in part from the 2018 Farm Bill change in the Class I Mover, allow Class III handlers to capture all of that additional market value and use it to fuel the 2020-21 accelerated milk growth for regions and entities connected to the new Class III processing assets?

Factor #3 — New dual-processing concentrates growth

Accelerated growth in cow numbers is fueling record production in 2021. It is patterned around ‘waves’ of major new processing investments in some areas, while other areas — largely fluid milk regions — are withering on the vine or growing by smaller margins with fewer cows.

In the 24 major milk states, production growth was even greater than the All-U.S. total — up 4.9% vs. year ago. In part one, the breakdown was shown vs. 2018.

Here’s the breakdown for just the 12 months from May 2020 to May 2021 — a time in which the industry dealt divergences that created steep losses for some and big gains for others, while FMMOs became dysfunctional.

In just one year, over 40,000 cows were added in Indiana, Ohio, and Michigan, combined, and milk production was up in May 2021 by 12.6, 3.2 and 5.1%, respectively. The draw is the massive new Glanbia-DFA-Select joint-venture cheese and ingredient plant that began operations late last year in St. Johns, Michigan. Sources indicate it reached full capacity this spring. Add to this the 2018 Walmart fluid milk plant in Fort Wayne, Indiana and other expansions in Ohio and Michigan.

Ditto for the Central Plains, where new cheese and ingredient line capacity became operational this spring and summer. Supplying these investments, Minnesota grew production 6%, South Dakota 14.6%, and Iowa 6.2% over year ago.

Number two Wisconsin grew by 5.6% in May 2021 vs. year ago.

Milk production was up 5% in number one California, even though cow numbers were down by 1000 head, and dairy farmers in a referendum voted recently by a slim margin to keep their quota system. They are also dealing with a devastating drought that news reports indicate is now impacting both the dairies and the almond growers.

Then there’s Texas, where growth continues to be a double-digit steamroller, up 10.8% in May 2021 vs. 2020 — pushing New York (up 4.2%) to fifth rank.

The Southern Plains has had several strategic investments, starting in Texas and New Mexico (up 6% vs. year ago).

In Colorado, where production was up 5.3% in May, DFA’s joint ventures and strategic partnerships with Leprino, Kroger and others have fueled growth.

Kansas grew milk production 7.3% vs. year ago. In 2018, a state-of-the-art whole milk powder and ingredient plant became fully operational in Garden City, Kansas. The plant was to be a joint-venture between DFA and the Chinese company Yili but ended up as a joint-venture between DFA and 12 of its member farms that are among the 21 Kansas dairies shipping milk to it.

DFA’s Ed Gallagher gave some insights on this during a May 2021 Hoards webinar. He said, “We went through a period of investing in powder plants in the U.S. It seems like there is a follow-the-leader approach when deciding on investments, and it goes in waves. The industry just completed a wave of a lot of investment in Class IV manufacturing plants, and now… it’s flipping to Class III.”

Looking back on the Class IV ‘wave’ 2013 through 2018, there were several times in those years that Class IV beat Class III, leading to FMMO de-pooling, but not to the extreme extent seen in the past 12 months as Class III now beats all other classes, including Class I, leading to negative producer price differentials (PPDs).

Gallagher sees Class III and IV prices “coming together” in the “next period of years” because the ‘wave’ of capacity investment has flipped from Class IV to III. He predicted more Class III capacity will be added.

Are these past 26 months of PPD net losses for producers the industry’s answer to, in effect, increasing processor ‘make allowances’ without a hearing?

The average PPD value loss (see chart) across the seven multiple component pricing FMMOs was $2.57 per hundredweight for 26 months, which began with implementation of the new Class I pricing method May 2019 through the most recent uniform price announcements for June 2021 milk.

Applying a conservative 5-year average PPD (prior to Class I change) for each FMMO, only the few gray blocks on the chart represent ‘normal.’

This means even positive-PPDs show margin loss for farm milk pooled on FMMOs. In fact, the CME futures markets as of July 14 show August through December divergence between Class III and IV above the $1.48 mark, indicating Class I value loss and negative PPDs or smaller positive PPDs could return after barely a two-month reprieve.

Many handlers that don’t pool on FMMOs also use the uniform prices as a benchmark.

This $2.57 net loss for seven MCP FMMOs across 26 months represents almost a doubling of the current make allowance levels.

Current USDA make allowances and yield factors add up to a processor credit of $3.17 per hundredweight on Class III and $2.17 on Class IV. This already represents 11 to 25% of farm milk value, according to 2018 analysis by John Newton, when he was Farm Bureau’s chief economist.

Why is this important? Because we are already seeing additional margin transfer from Class I to Class IV as the industry moves to blended beverages that mostly use ultrafiltered (UF) milk solids. Blends using whey would fall under Class III.

Looking ahead, DFA now owns most of the former Dean Foods’ Class I fluid milk plants since May 2020. New manufacturing synergies are undeniable, considering the direction of dairy checkoff’s fluid milk revitalization plan emphasizing these dairy-based-and-blended beverages and ‘dual-purpose’ processing facilities.

Dairy + Almond is a Live Real Farms beverage made by DFA and was launched through DMI’s Innovation Center with checkoff funds paid by all dairy farmers. The milk in this beverage is not priced as Class I, though it competes in the dairy case and is being promoted as a “Purely Perfect Blend.”

As low-fat UF milk solids are blended with other ingredients in a manufacturing process to make new combined beverages, the result is a competing beverage, and the milk in the beverage drops from Class I to Class IV.

Meanwhile, these beverages cost more at the grocery store, and the ingredients are not part of the USDA end-product pricing ‘circle’. Therefore, no new make allowances should be requested because processors are already getting a reduced class value, and a higher margin.

DMI’ vice president of global innovation partnerships, Paul Ziemnisky, gave some insights into this “future of dairy beverages” — and how it ties into new processing plants investments during the virtual Pennsylvania Dairy Summit in February.

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

DMI’s usdairy.com website touts the checkoff launches of ‘blended’ dairy-‘based’ beverages — key to DMI’s fluid milk revitalization plan. Not flavorings, these blends dilute milk out of Class I, the highest farm-level pricing, and mainly into Class IV, the lowest. The resulting beverages compete in the dairy cooler with Class I fluid milk. Screen view

While 11 of the top 24 states had milk production increases of 5% or more in May, the 13 states with increases below 5%, or negative, are mainly located within traditional Class I fluid milk marketing areas: Florida, up 0.5%, Georgia up 2%, Virginia down 2.3%, Illinois up 1.9%, Arizona, down 0.5%, Washington, down 0.9%, Pennsylvania and Vermont both up 1.8%, and New York up 4.2%.

Idaho and Utah, up 2% and unchanged, are outliers and largely unregulated by FMMOs. Some beverage assets are coming to that region in the form of ultra-filtration and aseptic packaging, including a plant renovation to make Darigold’s FIT beverage. Additionally, a new Fairlife filtration membrane plant was opened near Phoenix, Arizona in March, and Kroger is doing filtration and aseptic packaging in Colorado.

Meanwhile, Pennsylvania is often described as a ‘fluid milk state’ with a Milk Marketing Board setting minimum prices for fluid milk, and a string of independent milk bottlers that figure prominently in their communities.

Ranked fourth in milk production in 2006, Pennsylvania was passed by Idaho in 2007. By 2016, Michigan had pushed Pennsylvania to sixth. The very next year, in 2017, Texas leapfrogged both Pennsylvania and Michigan. Now, Minnesota has pushed the Keystone State to eighth.

How does the future of dairy affect traditionally ‘fluid milk’ states like Pennsylvania, or the Southeast for that matter?

New dairy-‘based’ beverage innovations can be made anywhere and delivered anywhere, often as shelf-stable products. Most are not Class I products unless they meet the strict FMMO definition which was last spelled out in the USDA AMS 2010 final rule.

For now, this also includes the Pa. Milk Marketing Board. Executive secretary Carol Hardbarger confirms that the 50/50 drinks are not regulated under PMMB, which generally uses federal classification, but that a legal interpretation of the Milk Marketing Law with regard to blends may be in order.

The 50/50 blends are already in some Pennsylvania stores and elsewhere in the Northeast, which is the second phase of the ‘undeniably, purely perfect’ marketing plan for fluid milk revitalization.

Factor #4 — USDA, industry coalesce around climate

Ag Secretary Tom Vilsack has been outspoken from the outset about using and aiming every available USDA program dollar in a way that also addresses the Biden administration’s strategies for equity, supply chain resiliency, and climate action.

Speculating a bit as to why USDA is taking so long to announce details about already funded dairy assistance, it could be that Sec. Vilsack is looking at the fit for ‘climate impact.’

Paid around a million a year in dairy checkoff funds to serve 4 four years as CEO of the U.S. Dairy Export Council — between prior and current Ag Secretary posts — Vilsack understands the future plans of the dairy industry’s checkoff-funded proprietary precompetitive alliances on a global scale.

Vilsack has been privy to the DMI Innovation Center’s discussions of fluid milk revitalization through ‘dual purpose’ plants and blended beverages. He is no doubt looking at the accelerating growth in milk production that is occurring right now for ways to tie dairy assistance to measured climate impacts in the net-zero file.

Producers on the coasts and fringes of identified growth areas have a target — fresh fluid milk and other dairy products produced in regional food systems for consumers who have a renewed zeal for ‘local.’ Fresh fluid milk will have to find a path outside of the consolidating system and cut through the global climate-marketing to directly communicate fresh, local, sustainable messages about a region’s farms, animals, environments, businesses, economies, jobs and community fabric.

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From GENYOUth to Gen-Z, dairy checkoff’s strategic integration game revealed

Posted on July 6, 2021 by Agmoos

In what was billed as a “National Dairy Month” zoom news conference May 26, Gen Z was the focus as DMI activated its new thing: ‘strategic integration.’ Speaking were clockwise from top left, Scott Wallin, VP Industry Media Relations; Anne Warden, Exec. VP Strategic Integration; Barb O’Brien, DMI President; Jordan Maron (aka Captain Sparklez), popular Minecraft gamer; Nevin Lemos, Gen Z California dairy producer.

Who plays? Who pays? Who wins?

By Sherry Bunting, Farmshine, May 28, 2021

ROSEMONT, Ill. — Strategic integration. Gen Z Gamers. Point of origin for innovation. Dairy-‘based’ positioning. Virtual authenticity. Over a decade of planning.

My head is spinning after a DMI press conference this week on three new “activations” for June Dairy Month in the digital world of video games, including “Beat the Lag,” a gamer-recipe contest and the integration of Fuel Up to Play 60 into the virtual world of video gaming exercise.

Dairy Management Inc. (DMI) has been on a 12- to 13-year path to streamline, dilute, blend and innovate dairy with a focus squarely on Gen Z since 2008 in the schools, now integrating rapidly into the digital spaces where dairy checkoff leaders say Gen Z is changing the world of marketing for companies globally.

According to DMI, Gen Z is not interested in facts like vitamins and minerals. They want to know how foods and beverages will make them feel.

On the other hand, DMI leaders described Gen Z as “very capable of discovering facts,” of “looking deeper” for “authenticity” and “relatability,” that when communicating with Gen Z “you want to be really factual and transparent and tap into the emotions that they care about.”

(The paradox of virtual authenticity is hard to overlook.)

Taking center stage at DMI’s Undeniably Dairy website (usdairy.com) was the Beat the Lag Gen Z gamer competition in which this photo is the recipe contest centerpiece from which DMI will glean pathways to “launch future dairy innovations.” That tiny sprinkle of cheese makes this a dairy-based snack, says DMI in a special National Dairy Month media conference by zoom on May 26. usdairy.com screenshot

Dairy-based or ‘sprinkled’ is the future, some cheese on a pizza or snack. Butter in a cookie, splash of milk in a smoothie, a bit of cream added to a soda, a half ultrafiltered low-fat milk / half almond beverage blend. A little here, a little there. Don’t confuse or interrupt DMI’s ‘strategic integration’ flow by talking about having a glass of whole milk or a piece of cheese. DMI’s website has a few posts lately talking about how blending is the future of dairy — tailor-made for flexitarian messaging in the confusing and not-quite-factual climate-impact comparisons and discussion.

It’s all about innovation of new products, integrating (and diluting) milk as a component of beverages. Looking deeper, it’s really all about increasing margins for processors beyond the farmgate in the ramped up $100 billion dollar global “functional beverage” space, also known as ‘designer beverages.’

Gen Z has been DMI’s target for over a decade as the gateway, the point of origin for how strategic integration innovation will be accomplished with dairy farmer checkoff funds.

Anne Warden, executive vice president of Strategic Integration for DMI spoke in the zoom press conference May 26, explaining how DMI has been “focusing on the youth audience ever since making its commitment to USDA on school nutrition (in 2008).”

In fact, in a May 25, 2021 blog post by Warden, she talks about the future of dairy in schools, that Gen Z wants flashy packaging, unique combinations and sustainable dispensers.

According to Warden, Gen Z is the generation DMI has been working on since the launch of Fuel Up to Play 60, which was followed by the formation of GENYOUth and the signing of the memorandum of understanding (MOU) with USDA under Secretary Tom Vilsack in that 2008-10 time period.

This is the very same time period in which the option of whole milk as a beverage choice was removed from schools, even in the Smart Snacks rules governing ala carte beverage purchases and vending machines – paving the way for strategic integration. Put some milk in that soda, maybe? (That will make sense in a few minutes).

Last fall, Farmshine reported on the “partnering” DMI did with Gen Z ‘gamers’ in the popular Minecraft game, which included three dairy farms hosting three gamers to see how dairies operate. But the partnership that is now moving into integration warp-speed through three June Dairy Month “activations” has been years in the making.

Warden was hired by DMI in May of 2019 to head the strategic integration. Prior to that date, she spent three years at Edelman with DMI’s strategic integration as her primary project for Edelman. Warden’s resume at Linked-In notes DMI as one of Edelman’s largest and most integrated services clients.

This means ‘strategic integration’ — courtesy of all-knowing Edelman — has been underway at DMI for more than 5 years. Have we ever heard of it before now? No, because this is what the ‘precompetitive’ Innovation Center works on, where future strategies are decided upon via DMI’s ‘industry partners’ and quietly implemented with dairy farmer dollars.

Warden laid out the rationale for the three activations aimed at using Gen Z’s “love of video games to capture their attention and show how dairy products fit well within their gaming occasions during the day.”

DMI president Barb O’Brien stressed the point that DMI is looking at gaming as a platform with the objectives of communication and “research.”

“The work that’s coming through now with new product concepts, make this a consumer research method to understand where Gen Z will place their dollars in considering new products,” O’Brien related. “So it’s fantastic. (Gaming) is a channel, an occasion and a communications vehicle. It’s all about contemporizing how we do the work of the checkoff. It is the new advertising. Television is one-way. This is interactive.”

(Authentic, relatable, interactive content is deemed the key to communicating with Gen Z in a virtual digital world of gaming to bring forth new products. Let that paradox sink in.)

One of three activations discussed was “Beat the Lag.”

Lag is a term used to describe the frustration that happens when a video game’s graphics won’t load fast enough so the gamer has to wait (like the frustration of your computer screen freezing). DMI is taking that concept, partnering with Jordan Maron, known as Captain Sparklez to his 11 million followers to address “human lag.”

Over the past six weeks (ending May 29), DMI has been running a gaming recipe conest through Maron, soliciting “dairy-based” snack, beverage and recipe ideas from his followers, what do they eat to ‘Beat the Lag?’

DMI wants Gen Z to bring the ideas. “We don’t want to tell them what to eat (or drink),” said Warden.

During the press conference Maron noted that he got involved when approached by DMI because he “eats a lot of dairy.”

“One of my favorite foods is pizza,” said Maron. “I’m an especially huge fan of drinks that have added milk or cream in them, like sodas with cream added… They’re delicious. I love them.”

(A splash of milk or cream in a soda is something that had a hey-day three generations ago. Apparently, it’s making a comeback.)

Maron talked about doing some focus group work for DMI on “new product innovations” last fall along with a virtual farm tour.

“Me, and a few people who are followers of mine, got together in a call, and DMI shared their ideas for products they want to roll out down the line,” said Maron. “We took it to my focus group of three people and then turned that into Instagram story slides I was able to share out with a wider range of followers, and they were able to give their feedback as to what products would interest them, that they would buy or eat in the future.”

Maron said he hoped that his focus group gave DMI “some good insight.”

The press conference moderator, Scott Wallin of DMI, promptly steered away from the product innovation revelation and brought the conversation back to the farm tours and sustainability, saying DMI hopes to show Gen Z gamers the dairy story through Captain Sparklez and others.

Wallin introduced Gen Z dairy farmer Nevin Lemos of California. The 24-year-old fourth generation dairyman started his own 400-cow Jersey herd on a rented farm near his family’s dairy at the age of 20. Lemos admitted he doesn’t have much time for gaming over the past 10 years as his time and passion are spent working his dairy business.

Lemos observed that Gen Z is a generation able to “look behind the façade, to look deeper.”

Calling Gen Z a “savvy audience,” Warden said they exist almost entirely in the digital world, moving between multiple devices and media platforms daily, with 90% of Gen-Zers gaming.

They are aware of what companies are doing for good – beyond making money — and will turn away from products that “don’t match their values and their desire for authenticity,” said Warden, emphasizing Gen Z’s interest to know what companies are doing for the environment.

“We’re going to make sure farmers they can relate to (like Lemos) are showing up in their social media feeds to tell that story,” she said.

Gen Z gamer Maron talked about what it was like last fall to do the virtual farm tour with Gen Z dairyman Lemos, seeing how cows live and are fed and having one named after him: Sparklez.

The activation of DMI’s “Beat the Lag” is aimed at more than sustainability, said Warden, it is to “help re-position milk and dairy to meet Gen Z’s wellness needs.

“It’s about balance,” she continued. “Gen Z is less interested in the particulars of vitamins and minerals in their food or beverage. They are more interested in what that food is going to do for their bodies, how it is going to make them feel.”

Warden said DMI’s research shows that, “Some of dairy’s biggest opportunities with Gen Z are positioning as a food that will sustain their energy throughout the day or let them feel relaxed and recharged while doing the things that they love.”

“Beat the Lag” is themed around “dairy-based foods and beverages giving gamers an energy boost or a tasty pick-me-up after a long stretch of gaming,” said Warden. “We’re not going to tell them what to eat, we’re letting Jordan Maron (Captain Sparklez) and Rosanna Pansino, a gamer and culinary influencer, get gamers suggesting the ideas in ways they can relate to.”

Maron talked about ‘gamer fuel up’ youtube videos he did with Pansino, one being pizza pockets (with cheese).

“This is a contest, and when the (Beat the Lag) contest is all wrapped up, we’ll look at the recipes submitted,” he said, indicating that the winners will be shown in stages through the Minecraft game and win gaming prizes.

In addition to pizza pockets, other snack recipe ideas at the usdairy.com website under “Game On” and “Beat the Lag” include a bowl of vegetables and avocados, with the tiniest sprinkling of grated cheese. A demonstration is posted there also for making “Pixel Jam Heart” cookies.

During the videos, Maron and Pansino talk about the contest suggesting smoothies, dips, protein drinks and things made with yogurt as ideas for creative contest submissions.

DMI’s O’Brien said: “This is today’s new form of advertising. It’s an opportunity to set the record straight on the nutritional side (vs. major advertising in all venues by plant-based dairy alternatives.)”

She said this avenue allows for “the exchange of factual information,” but was quick to point out that those nutrition facts “are not what is driving Gen Z’s choices.”

Bottom line? The virtual digital world of Gen Z gamers is, according to DMI president O’Brien, “the forum for putting forward innovation, for putting forward innovative products that are relevant to today’s lifestyle. We will be leading with products that are designed for gamers, by gamers, we know will have a much bigger appreciation beyond just gamers…

“We’ll see those products at retail. We’ll see those products at traditional foodservice. This is the point of origin for that innovation, and the inspiration,” she stated matter-of-factly.

There’s a lot to digest here, pieces of a dairy transformation agenda funded by farmers through checkoff. It’s important to know what checkoff dollars are doing in the integration phase of a 12 to 13 year plan to join the milk-disruptors with dairy-based innovations, now putting Gen Z gamers virtually in charge of how DMI’s products that are ready to roll down the line, come to market.

Meanwhile, a Hartman Group survey recently showed Gen Z prefers fast food and familiar tastes with a much lower attention paid to local, fresh products than prior generations. It’s no wonder. This generation has been worked over by PepsiCo, Domino’s, Sodexo, General Mills, brought into schools by USDA via the MOU marriage of low-fat / high-carb Dietary Guidelines and low-fat / high-carb promotion through Dairy Checkoff’s ‘school wellness foundation’ GENYOUth.

In this game, the obvious questions are: Who plays? Who pays? And who wins?

After that trip into virtual authenticity, I need a tall cold glass of real whole milk to relax and recharge.

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DMI’s DS4G sees dairy feed, cropping, cow care as ‘big hammers’ for net-zero

Posted on June 8, 2021 by Agmoos

‘Grant’ will start ‘measuring’ air, soil around dairy cropping practices in nine U.S. regions

This is the third and final part of the multi-part series about DMI’s Net Zero Initiative and Dairy Scale for Good implementation. Parts one and two in Farmshine covered some of the 12- to 13-year history, the ‘scale’ approach for getting the industry to net zero faster, and the impact of manure processing, digester models, and renewable energy policies and technologies in the NZI scheme.

By Sherry Bunting, Farmshine, May 7, 2021

ROSEMONT, Ill. — How dairy feed and forage are produced are the “biggest hammers” that are “ripe for innovation in dairy emissions reduction,” said Caleb Harper, executive director of DMI’s Net Zero Initiative (NZI) Dairy Scale for Good (DS4G) implementation.

He and Dr. Mike McCloskey, chairman of the DMI Innovation Center for U.S. Dairy’s Sustainability Initiative, presented information about the Net Zero Initiative (NZI) and ‘implementation on the farm’ during last month’s Balchem real science lecture series.

Much of the presentation used the ‘spreadsheet exercise’ of the World Wildlife Fund (WWF) white paper laying out the “business case for getting to net zero faster”, based on a 3500 cow dairy (a Fair Oaks site with 3000 milking and 500 dry). In fact, Harper’s DS4G work will exclusively pilot and model on dairies about this size.

After explaining that the DS4G goal is to make maximum impact on the entire supply of milk in the short-term using “the consolidation going on in the industry” and the idea of “scale to drive down the risk … and spread the benefit across the industry,” Harper dug into each area and showed how the models tend to work best when multiple areas are combined.

Harper said no till farming, cover crops, innovative crop rotations, renewable fertilizer, precision agriculture all fall into this feed production area of emissions.

“It all boils down to measuring the emissions,” he said, showing a slide of boxes in potato fields in Idaho, where USDA ARS has a project that monitors the air around the crop to show the emissions from a field and mitigation that can be attributed to cropping practices. He said DMI has a grant to do the same thing with dairy cropping practices beginning this year.

The key, according to Harper, is to show that the emissions are being reduced. In addition to boxes in fields measuring emissions around crops, Harper said soil core samples will be taken to determine carbon sequestration of dairy feed cropping strategies.

“This is open science, (meaning still in the proving stage),” said Harper, known for his Open Ag science project growing food in computer controlled boxes at M.I.T. That project ended amid controversy last April a few weeks before Harper was hired by DMI to lead its NZI DS4G.

During the real science lecture in April, Harper said DMI has a grant program starting this year, along with Foundation for Food and Agriculture, to do this type of field box emissions monitoring and soil core sequestration monitoring across nine different U.S. geographies to test conservation tillage practices in terms of carbon emissions and sequestration over the next five years.

Harper said he sees this area as “huge” for innovation and for generating carbon credits that are valued by markets and for reducing one-third of dairy’s ‘field to farm’ emissions while improving soil health and the ability of soil to hold water.

He projects the bottom line potential annual farm revenue on this at $70,000, saying the industry will have to combine this with other strategies, like manure processing, renewable energy generation and such to get the combination of environmental impact toward ‘net-zero’ GHG and the economic revenue stream impact for the dairies.

“Some strategies are more impactful than others,” he said about the WWF models.

In this diagram, which was also shared by DMI leaders in a Pa. Dairy Summit breakout session about what dairy checkoff has done for producers lately, Harper illustrated how WWF models show farms will have to combine areas to merge emissions reduction potential with revenue potential. This shows feed production represents 26% of field to farm emissions reduction potential but just 3% of farm revenue potential; Cow care encompassing feed additives, efficient rations and genetics represents 33% of emissions reduction potential and just 5% of farm revenue potential; but conversely, renewable energy production on the farm represents just 5% of emissions reduction potential and 23% of farm revenue potential.

The ‘hammers’ on the emissions side do not line up with hammers on the revenue side, and the question remains, where will individual dairy farms sit in terms of decision-making as supply chains scale these combinations.

Yet again, the question arises around selling or monetizing the carbon credits generated by the farm once these cropping practices are “measured” and added to models. How does the sale of these credits, or bundling with sales of milk, then change the carbon profile of the farm selling the credits vs. the buyer in the dairy supply chain. Again, as mentioned in Part II on manure technologies and energy generation, this is an important detail that the WWF, NZI and DS4G modeling has not dealt with or worked through.

So, while discussions have already progressed to model how carbon credits and milk could be bundled to milk buyers, with pilots funded by supply chain grants to model how scale can spread impact over the industry and the entire milk supply, the holes in the value proposition are more obvious in this area where farms are already doing great things for land, air and water, by keeping something green and growing on the land as part of dairy feed production: How do farmers get credit for what they are already doing?

Harper also said “amazing things” are happening in the feed additive aspect of reducing enteric emissions, but he acknowledged “it’s early” on the carbon credit side for that.

This area of feed production and feed additives in the DS4G ‘value proposition’ has been spreadsheet-modeled to account for one-third of dairy’s field to farm CO2 equivalent emissions, and yet, at the same time, carbon credits based on this area are still in the research and measurement stage, needing documentation to be ‘monetized.’

Harper cited an example paper from University of California-Davis showing significant reductions in enteric emissions in beef cattle with certain feed additives.

As this work in the area of feed production and feed additives continues, said Harper: “Continuing to optimize rations (for production efficiency) remains important, while feed additives and selecting genetics for lower emissions will become important.”

Author’s Notebook:

The WWF Markets Institute released the dairy business ‘case study’ for scaling to net-zero faster on Jan. 27, 2021. A mid-February Farmshine report revealed the WWF mathematical error that had inflated the magnitude of CO2 equivalent pounds contributed by all U.S. milk production. WWF on Feb. 25, 2021, corrected its baseline to show the much smaller collective impact of 268 billion pounds CO2 equivalent (not 2.3 trillion pounds).

Both Harper and McCloskey serve on the WWF Market Institute’s Thought Leadership Group.

DMI confirms that dairy checkoff had a memorandum of understanding (MOU) with WWF from the inception of the Innovation Center for U.S. Dairy around 2008 through 2019. McCloskey has chaired the Innovation Center’s Sustainability Initiative since 2008.

In 2008-09, two MOU’s were signed between DMI and USDA via former U.S. Ag Secretary Tom Vilsack — the Sustainability Initiative and GENYOUth. At the end of the Obama administration, Sec. Vilsack was hired by DMI dairy checkoff to serve as president and CEO of USDEC 2016-2021, and earlier this year he became Secretary of Agriculture again after President Joe Biden said Vilsack ‘practically wrote his rural platform and now he can implement it.”

Aside from both serving on the WWF Market Institute’s Thought Leadership Group, McCloskey and Harper have another connection. According to the Sept. 2019 Chronicles of Higher Education, Caleb Harper’s father, Steve Harper, was a grocery executive. He was senior vice-president of marketing and fresh product development, procurement and merchandising from 1993 to 2010 for the H-E-B supermarket chain based in Texas. According to a 2020 presentation by Sue McCloskey, H-E-B was their first partner in the fluid milk business in the 1990s, followed by Kroger. According to the Houston Chronicle, the McCloskeys also partnered with H-E-B in 1996 during Steve Harper’s tenure to produce Mootopia ultrafiltered milk, an H-E-B brand. This was the pre-cursor to fairlife, the ultrafiltered milk beverage line in which DMI invested tens of millions of dollars in checkoff funds through the Innovation Center for U.S. Dairy partnering with the McCloskeys, Select, and Coca Cola.

Harper also previously served as a member of the Board of Directors for New Harvest for at least three years (2017-19). New Harvest is a global nonprofit building the field of cellular agriculture, funding startups to make milk, meat and eggs without animals.

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From DMI to NZI to DS4G: Harper, McCloskey explain how scale will drive dairy to net zero

Posted on April 30, 2021 by Agmoos

Author’s Note: This is part one in a multi-part series about DMI’s Dairy Scale for Good piece of the Innovation Center for U.S. Dairy’s Net Zero Initiative.

By Sherry Bunting, updated from publication in Farmshine, April 23, 2021

ROSEMONT, Ill. — “Looking at the past 50 years of impressive achievement, everything ladders up to milk efficiency. It’s less land. It’s less manure. It’s less water and less carbon, but it’s all about that milk,” said Caleb Harper, executive director of the Dairy Scale for Good (DS4G) piece of the DMI Innovation Center for U.S. Dairy’s Net-Zero Initiative (NZI).

“For the next 50 years, what if it was all about everything other than the milk. As we continue to advance toward yield of milk… you’ll start to see a rise in the importance of everything else,” said Harper, posing a “value proposition” for the dairy industry.

Harper, along with Dr. Mike McCloskey, of Fair Oaks Farm, Fairlife and Select Milk Producers, talked about NZI and DS4G in an online Balchem ‘real science lecture series’ earlier this month. McCloskey is an officer on the board of National Milk Producers Federation and has chaired the DMI Innovation Center’s Sustainability Initiative since inception.

The future being created, according to Harper and McCloskey, is one of dairy being recognized as an “irreplaceable ecosystem asset — an environmental solution — inside a comprehensive management plan for emissions reduction inside of animal ag livestock.”

Citing the Nestle and Starbucks sponsorships and others coming on near term, Harper said the pilot projects associated with each company will be located in separate supply chains. The sponsorships are being made, he said, because these companies have made big commitments to reducing carbon.

“As checkoff, one of our limitations is the ability to do on-farm work, especially around technology acquisition or measurement, so we need these third-party dollars to come in and be the catalyst to get living laboratories set up,” Harper explained.

Before Harper’s presentation about how the Net Zero Initiative builds-out the ‘everything else’ pieces, McCloskey gave historical context about the birth of the Innovation Center for U.S. Dairy in 2007.

“The trajectory (since 1940) is just phenomenal when you lay out the statistics,” said McCloskey. “We came together – National Milk, DMI, USDEC – and had a great meeting of the minds (in 2007). We said this natural sustainability progress will continue, but we need to accelerate it and be catalytic in how we can become the organization to drive this at a faster speed to net-zero.”

According to McCloskey, 80% of the nation’s milk is represented at this NZI table, and the dairy industry is the one to “really come out of the gate on this.”

“The whole value chain from distributors to processors to retailers and companies that create packaging (are represented), so we have a really good understanding of the entire value chain and can focus on how to eliminate carbon footprint to bring it to net-zero,” he said.

The baseline life-cycle assessments (LCA) were the first steps 10 to 13 years ago to figure out “exactly where” the carbon was coming from, and the April lecture discussion focused field to farm, noting that the processors have a separate working group looking post-farm through consumption.

McCloskey said the LCA categorized carbon in 4 areas:

1) Farming (feed production) practices
2) Manure management
3) Enteric emissions from cows
4) Energy intensity of the operation (including renewables)

“Once we knew where the carbon was coming from, we started initiatives to find processes and technologies to innovate and accelerate the process to net-zero even faster,” said McCloskey, explaining the heavy participation from companies serving on committees and through initiatives these past 13 years.

Then, a year and a half ago, “we committed to the term net-zero,” he said. “That was a big jump.”

This bit of history set the stage for Harper to talk about the part of the Net Zero Initiative he heads up: Dairy Scale for Good (DS4G).

Harper was hired by DMI last May for the DS4G position just weeks after exiting M.I.T.’s Media Lab April 30th, after his OpenAg Initiative there came under scrutiny and was quietly closed.

“Caleb is looking at the four areas and how we can take technologies and processes and innovate them into DS4G,” said McCloskey.

Harper noted that dairy and agriculture are not operating in a vacuum. He said the first “bold commitments” to net-zero time frames between now and 2050 were made by big tech companies like Facebook, Amazon, Google, followed by food brands, companies across the food value chain, and then the agricultural input sector.

Throughout his presentation, Harper referenced the Biden administration policies the work hinges on, using much of the same coordinated language that surfaces via the World Economic Forum Great Reset and United Nations Food Systems Summit and what is called “The Fourth Industrial Revolution” in which technology is already rapidly accelerating.

“We’re seeing a shift in philosophy and it’s being driven by all of these commitments,” said Harper, insisting that, “It’s being driven, of course, by consumers.”

He showed pre-Covid poll statistics from the Hartman group. One in particular noted that 88% of consumers surveyed “would like brands to help them be more environmentally friendly and ethical in their daily lives.”

“Dairy has made the commitment to being an environmental solution,” said Harper, which means becoming carbon neutral or better, optimizing water use while maximizing recycling, and improving water quality by optimizing utilization of manure and nutrients.

Three working groups or initiatives were formed within the field-to-farm Net Zero Initiative: 1) Research, analysis and modeling; 2) Viability study, which is DS4G headed by Harper; and 3) Adoption for collective impact.

The Adoption piece will distill and disseminate across the industry what is learned through research, modeling and Harper’s DS4G work.

It is all about driving consumer choices under this net-zero mantra. Industry consolidation also figures into this equation to “scale the process and drive out the risk,” said Harper.

Many of the numbers in Harper’s presentation were taken directly from the World Wildlife Fund (WWF) white paper An Environmental and Economic Path Toward Net Zero Dairy Farm Emission.”

Harper cited environmental pressure and animal activism pressure on the U.S. dairy industry. He said: “This program (Dairy Net-Zero) is being supported by the World Wildlife Fund and others in the environmental space as a path towards a solution on all of these issues.”

Insisting that the Net Zero Initiative and DS4G operate with a “counter-balance” of environment and economics, the examples discussed by Harper included estimates for what producers may expect as returns for various environmental products and services.

Illustrating carbon footprint for a gallon of milk across all sectors from field to consumer, Harper and WWF maintain that the field-to-farm portion represents the largest potential (70%) for reducing CO2 equivalent emissions more than retail, consumption, processing and distribution combined. Harper said he sees this as work and opportunity. McCloskey had noted earlier that the processors have their own working group looking at emissions from farm to consumption.

The WWF white paper lays out the “business case” for the Net Zero Initiative, based on a 3500 cow dairy (a Fair Oaks site with 3000 milking and 500 dry). In fact, Harper’s DS4G work will exclusively pilot and model on dairies of this size.

“This is to make maximum impact on the supply of milk in the short-term,” he said. “If we look at the kind of consolidation going on in the industry, the herd sizes above 1000 cows are a small percentage of the total herd; however, (they account for) 55% of the milk production.”

Harper explained the DS4G concept this way:

“The idea is to use scale to address these (net-zero) issues so we can drive down the risk of adoption, the risk of market-building, the risk of technology… to bring that down to a level and spread it across the industry, across the milk.”

Walking through the technologies and processes that the checkoff-funded DS4G is “thinking about,” Harper indicated that this is “evolving”, and all revenue potential figures are “approximate”.

He mentioned a billion dollars of investment in digesters over the last few years from private equity funds, pension funds, and venture investors, with digesters representing — “rule of thumb” — one-third of the revenue potential of net-zero going forward. The new market opportunities driving that revenue potential, he said, are natural gas prices and the increasing value of the low-carbon renewable fuel credit price. The combination is what is attracting investors, according to Harper.

Harper said he has visited 100 dairy farms in 17 states in his first 11 months as the dairy-checkoff employee heading up DS4G. Of the dairies he has visited with more than 2500 cows, he said not one did not either have a digester or was breaking ground for a digester or in the process of planning a partnership around one.

He also talked about feed additives to address enteric emissions, cropping practices, and manure management technology, including ultrafiltration of manure as part of a “technology train” for the future. To be continued

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(Author’s Notes: The WWF Markets Institute released its dairy white paper Jan. 27, 2021. A mid-February Farmshine report revealed the WWF mathematical error that had inflated the magnitude of CO2 equivalent pounds contributed by all U.S. milk production. WWF on Feb. 25, 2021, corrected this baseline to show the much smaller collective impact of 268 billion pounds CO2 equivalent (not 2.3 trillion pounds). Both Harper and McCloskey serve on the WWF Market Institute’s Thought Leadership Group. Harper also served as a board member of New Harvest 2017-19, a global nonprofit building the field of cellular agriculture, funding startups to make milk, meat and eggs without animals. DMI confirms that dairy checkoff had an MOU with WWF from the inception of the Innovation Center for U.S. Dairy around 2008 through 2019. McCloskey has chaired the Innovation Center’s Sustainability Initiative since 2008. In 2008-09, two MOU’s were signed between DMI and USDA via former U.S. Ag Secretary Tom Vilsack — the Sustainability Initiative and GENYOUth. At the end of the Obama administration, Vilsack was hired by DMI dairy checkoff to serve as president and CEO of USDEC 2016-2021, and earlier this year he became Secretary of Agriculture again after President Joe Biden said Vilsack ‘practically wrote his rural platform and now he can implement it.” McCloskey and Harper also have another connection. According to the Sept. 2019 Chronicles of Higher Education, Caleb Harper’s father, Steve Harper, was a grocery executive. He was senior vice-president of marketing and fresh product development, procurement and merchandising from 1993 to 2010 for the H-E-B supermarket chain based in Texas. According to a 2020 presentation by Sue McCloskey, H-E-B was their first partner in the fluid milk business in the 1990s, followed by Kroger. According to the Houston Chronicle, the McCloskeys also partnered with H-E-B in 1996 to produce Mootopia ultrafiltered milk, an H-E-B brand. This was the pre-cursor to fairlife, the ultrafiltered milk beverage line in which DMI invested checkoff funds through the Innovation Center for U.S. Dairy partnering with the McCloskeys, Select, and Coca Cola.)

2021 WWF / DMI ‘Net Zero’ report inflated GHG baseline for total U.S. milk production

Posted on February 25, 2021 by Agmoos

By Sherry Bunting, Farmshine, Feb. 26, 2021

EAST EARL, Pa. – At a time when dairy producers are in the fight of their lives to prove how sustainable they already are in providing nutrient-dense milk and beef from the much-maligned bovine, they can ill-afford publication of overblown climate data on total U.S. milk production. And yet…

Dairy producers have unknowingly paid to applaud, promote and contribute to inflated baseline greenhouse gas (GHG) emissions data via their own national dairy checkoff.

The Jan. 27 report, produced by DMI’s former MOU partner World Wildlife Fund (WWF), established a GHG baseline that has been confirmed and admitted as being mathematically wrong by an order of magnitude — 10 times greater than reality.

So egregious is the mathematical error inflating dairy’s baseline GHG emissions, that the entire WWF / DMI Net Zero Initiative ‘Dairy Scale for Good’ case study is now questionable in the significance of its reductions because the significance of the starting-point — the ‘problem’ — is overblown.

Since receiving the DMI press release and copy of the 14-page white paper on Feb. 1, we have been reviewing it. The WWF Markets Institute ‘white paper’ entitled An Environmental and Economic Path Toward Net Zero Dairy Farm Emission” has been widely promoted by DMI.

Its case-study model was concerning to us initially because of its narrow representation of comparable dairy farms and grand claims about what is needed for large farms to be “net zero in five years” and selecting pilot farms for the industry to prove-out the model.

Yes, the report was produced by WWF, but in a recent Pa. Dairy Summit breakout session on “What dairy checkoff has done for you lately,” DMI president Barb O’Brien confirmed that the WWF report is being promoted because it supports the Net Zero Initiative launched by DMI’s Innovation Center for U.S. Dairy.

More importantly, she said the report is a “spreadsheet exercise” that will now be piloted on large farms by Dairy Scale for Good executive director Caleb Harper to see if the exercise can be “proved out.” An exercise, mind you, that has inflated the significance of the problem it is purporting to solve.

In the same “What has dairy checkoff done for you lately” session at Dairy Summit, O’Brien said the data for the WWF white paper came from DMI input!

This emperor has no clothes. This dog doesn’t walk. This math does not “add up.”

We are talking about the math that established the baseline GHG for all U.S. milk production used to determine the significance of the reduction from the ‘Net Zero’ dairy case study, a 3000-cow Fair Oaks-style dairy, that does not represent reality for many large and small dairies in various geographies. But at the same time overblows the level of the problem everyone else contributes to.

We weren’t the only ones struggling to make sense of the WWF / DMI white paper. A Pennsylvania dairy producer did the math using his bulk tank calibration conversions and brought the “immense blunder” to Farmshine’s attention.

He was concerned about what this means for all dairy farms, stating in an email: “Why would anyone set a specific reduction amount when it can be demonstrated that the starting amount is wrong? DMI may wish to partner with someone with better math skills.”

The producer who wished to remain anonymous pointed out to us in his email – and we agree – that DMI may want to get their facts straight with a Net Zero Initiative that shows this level of baseline blunder. In fact, as the producer observes: “If the objective (as indicated in the WWF report) is for a 10% reduction from the inflated number, then hallelujah! The EPA numbers show a 90% reduction (already — across all milk production).”

Could the inflated GHG baseline have been intentional? After all, that inflated number is instrumental in bolstering the significance of a prescribed ‘case study’ reduction for which pilot farms are being selected to ‘prove out’.

An inflated baseline harms all dairy farms because it does not reflect the truth about how small the GHG emissions really are – already — for all milk produced on all U.S. dairy farms, under sustainable dairy farm conditions, right now!

In fact, when the Pa. dairy farmer who alerted us to the math error supplied his figuring for the CO2 equivalent (CO2e), his figures put the inflation error at 8.6 times greater than reality.

We sent a media inquiry asking GHG expert Dr. Frank Mitloehner of University of California-Davis CLEAR Center to review the WWF report and let us know what we might be missing in our calculations.

Dr. Mitloehner agreed that the starting point for GHG emissions in the WWF / DMI report was off by “an order of magnitude”.

We asked him for his expert review and on Wednesday, we received a copy of a letter Dr. Mitloehner sent to WWF. In it, Mitloehner references the white paper’s value of 2.3T pounds (trillion pounds) of GHGs as the emissions from total U.S. milk production (page 7 of the WWF white paper).

“When I went over your calculations, I noticed some potential errors. My own estimate arrived at GHG emissions that are about 10 times lower than the number you reported,” Mitloehner wrote in his letter to WWF.

“Assuming the conversion of the annual milk production in 2018, using Thoma’s equation, into kg fat-and-protein corrected milk (FPCM) and then changing to gallons of FPMC, my calculated values come out to be 287,453,374,279 (287 billion) pounds (not 2.3 trillion pounds),”

GHG expert Dr. Mitloehner writes. “Using GHG emissions of 10.6 lb CO2e per gallon FPCM, the total GHG come out to 2.87453E+11 lbs CO2e. To simplify the number using the Tera unit prefix, the GHG would be 0.287T pounds CO2e, which differs significantly from the aforementioned value (in the WWF white paper) of 2.3T pounds.”

In his letter, Mitloehner emphasized that the WWF / DMI report was “very informative and points toward solutions that are attainable and scalable, both of which are considerations desperately needed as we look at feeding people in a sustainable manner.”

However, he adds, “I do worry that if the calculations are incorrect, it could lead to misinformation and confusion.”

Along with a copy of his letter to WWF, Dr. Mitloehner included in his email reply to Farmshine the WWF response thanking him for bringing it to their attention.

“There is indeed an error and we are in the process of fixing it and will have an updated PDF soon and will share it with you, and we will fix the links on the website,” wrote Katherine Devine, director of business case development for WWF Markets Institute.

Once again, a climate-focused NGO with global goals against animal agriculture overblows GHG emissions from cattle, in this case dairy cattle. But this time, it happened within the full purview of mandatory producer-funded dairy checkoff.

The reason this is a big deal is that it is being used to set policy. The DMI and WWF press releases point to this report as being based on “stakeholder” data that can “demonstrate what is possible with the right practices, incentives and policies within five years.”

For the four weeks, this WWF report has been applauded and promoted by DMI, using case study data that was contributed by DMI.

The question now is how did this happen and what will the retraction look like?

Will anyone stand up for the sustainability of dairy farms as they are – today – for an accurate baseline of their real contribution to GHG emissions, especially per unit of nutrition provided? Where is logic in the overall equation?

Dr. Mitloehner indicated in his email reply that the overblown GHG baseline does not completely jeopardize the paper’s ideas about strategies that can position dairy as a climate solution. However, when the starting math is off by 10 times the true amount, it becomes obvious the larger truth is that dairy is a small emitter and should already be paid for so-called ‘ecosystem services.’ Why is checkoff not pounding that message?

While dairy farms across the U.S. should be applauded and promoted for the reality of how small their emissions are while producing nutritious food for all of us – already – every day, DMI got its focus set on spreadsheet modeling to tell one story when the truth is they could have used accurate numbers to tell a better story.

Instead, the baseline GHG math error undermines the current sustainable performance of all dairy production while putting on a pedestal the Net Zero model based on a 3000-cow Fair Oaks-style dairy with no heifers on site, 80% of forages grown on site, a ration that is 70% forage, and a methane digester mix made up of more than 50% co-digestion of other waste streams.

In fact, some producers of similar size who have inquired about this model, have hit brick walls in having their sustainable practices even considered to show levels of reduction. No wonder! The starting math for the WWF / DMI model is inflated and banks on that inflation to achieve the “significant” reduction in farmgate pounds of CO2 equivalent (CO2e).

While the math is muddy, the problem here is clear. Cattle as contributors to climate change continue to get a black eye by those inside and outside the industry overblowing the problem to push a marketing agenda that fits a global transformation narrative.

(POSTCRIPT NOTE: Just this morning after Farmshine went to press, we notice the PDF file at the WWF link (previously called ‘version 9’) has been quietly replaced with a file noted in its name as ‘v.10’. In it, on page 7, the total U.S. milk production GHG baseline of 268 billion pounds CO2e now appears where 2.3 trillion pounds once stood. No other change or discussion. We’ll be following up to do comparisons of how the smaller baseline impacts the significance of sweeping transformation, including calculations per unit of nutrition vs. other foods in next week’s Farmshine.)

Connecting dots:

— The January 27, 2021 WWF white paper uses a Fair Oaks-style 3000-cow Net Zero dairy case study. The WWF report was produced by the WWF Markets Institute and was written by WWF Markets Institute senior vice president Jason Clay, Ph.D.

— Clay heads the WWF Markets Institute Thought Leader group. According to the WWF Markets Institute website, the Thought Leader group members include DMI Innovation Center for U.S. Dairy Sustainability Alliance chairman Mike McCloskey of Fair Oaks fame, along with May 2020 DMI hire Caleb Harper serving as Dairy Scale for Good executive director.

— Harper started with DMI a few weeks after his departure from the MIT Media Lab under a cloud of press reports raising questions about aspects of donations, performance and environmental compliance within his digital food research project at MIT. For three years prior to being hired by DMI, Harper served on the board of directors for New Harvest, an organization that supports research and promotion of cell-cultured fake animal protein with the tagline ‘meat, milk and eggs without animals.’

— According to a Sept. 2019 Chronicles of Higher Education article, Harper’s father Steve was a grocery executive, senior vice-president of marketing and fresh product development and procurement from 1993 to 2010 for the H-E-B supermarket chain in Texas and northern Mexico and stayed on part-time through 2012 before retiring.

— During that time, H-E-B became the first and longstanding partner of Mike and Sue McCloskey when they were dairying in New Mexico and founded Select Milk Producers. Sue explained this in her presentation at the 2020 Pennsylvania Dairy Summit, that the H-E-B alliance was instrumental and painted a picture of how it progressed to dairy’s future as seen by DMI’s Innovation Center for U.S. Dairy and its food industry partners, with Mike serving as chair of the Sustainability Alliance.

— According to a June 15, 2014 Houston Chronicle article, the McCloskeys worked with H-E-B, supplying their milk and in 1996 producing Mootopia, the ultrafiltered milk H-E-B store brand and pre-cursor to fairlife, now solely owned by Coca Cola.

— During a February 2021 zoom presentation at the 2021 Pa. Dairy Summit, DMI’s vice president of sustainability Karen Scanlon confirmed that DMI had an MOU partnership with WWF from the inception of the Innovation Center for U.S. Dairy in 2008-09 and that this partnership opened doors with companies on shared priorities over the past decade. The MOU between DMI and WWF expired in 2019 and was not renewed, but Scanlon confirmed that a close relationship and exchange of information continues.

-30-

Ag Moos

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2021 WWF / DMI ‘Net Zero’ report inflated GHG baseline for total U.S. milk production

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