Fair Oaks, fairlife co-founder paints picture of dairy’s future as seen by partner DMI

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By Sherry Bunting, Farmshine, February 14, 2020

STATE COLLEGE, Pa. — The big question Sue McCloskey gets about fairlife is “How did you think of it?”

As co-founder with her husband Mike of Select Milk Producers, Fair Oaks Farms and the fairlife brand, McCloskey spoke about “the spark of innovation” to a crowd of over 500 at the 2020 Pennsylvania Dairy Summit in State College last Thursday, Feb. 6. She was among the featured speakers that were sponsored by ADA Northeast.

“We are all innovators in agriculture,” said McCloskey, telling how they learned of reverse osmosis when a well on their New Mexico dairy backed up 25 years ago, and RO membranes were used to separate solids to restore water quality. That experience introduced them to the concept of filtering solids by molecular size, but her larger message was about the concept of innovation in allowing companies to differentiate in a generic category like milk.

For example, she said, who would think, years ago, that water would become the multi-billion-dollar industry that it is today? And coffee? She cited Starbucks as a catalyst for the rise of coffee houses and coffee drinks and blends today.

As in these examples, someone was the first innovator to bring value to those generic categories. She said for milk, the parallel is fairlife.

“Innovation – thinking outside the box — that’s what grabs people,” she said.

McCloskey maintains that as consumers, “We are all waiting for the next new thing. We want more. We want new. That’s where we have seen success with fairlife.”

The journey

McCloskey talked about her husband’s journey from being a dairy veterinarian to a dairy producer and innovator. They started with 300 cows in California and a partner they still have today in Tim DenDulk. One by one they bought dairies, fixed them up and rolled them over.

Once they got to New Mexico with a 3000-cow dairy, that was the real beginning of it, she said. That’s where they founded Select Milk Producers 25 years ago, which is today the sixth largest cooperative on a milk volume basis with 99 members.

They formed to focus on high quality milk with low somatic cell counts and to sell that concept direct to retailers instead of being part of a co-op that commingled their milk to blend-down the somatic cell counts. That’s where they were introduced, she says, to the concept of what has become fairlife through the use of RO membranes to ultrafilter the milk. She explained that the milk going in must be very low in somatic cell counts because the process of ultrafiltration concentrates the solids – including somatic cells.

She pointed to the “incredible success” of building different plants and beginning to build the fairlife brand, which led them to their next opportunity in the Midwest – Fair Oaks Farms.

When the McCloskeys came to Indiana, DenDulk, their original partner in California, was already in Michigan.

McCloskey said the housing technology had developed by that time to where they felt they could do larger dairies in the Midwest climate. They built the first of the original four 2800-cow dairies in 1999. Today, there are 13 separate dairies totaling over 36,000 cows that are owned and managed by a few families on the roughly 30,000 acres, including the new 800-cow robotic dairy that opened at the end of 2019.

In fact, she spent part of her time talking about the innovations coming out of Fair Oaks to recycle and recover nutrients and to address greenhouse gas emissions to improve the “sustainability” and carbon footprint of dairy.

“There are cool things happening and things we are doing that we really need to embrace,” she said.

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(Sue’s husband Mike, who spoke in March at the PDPW virtual business conference on U.S. Dairy’s goals for GHG emissions, was the first chairman of the Sustainability Initiative when it was launched under DMI’s Innovation Center for U.S. Dairy in 2009-10, and the checkoff’s research and development and marketing assistance for fairlife and Fair Oaks came from DMI through the Innovation Center where such partnerships are born.)

The process

Establishing fluid milk supply relationships with large retailers like H-E-B and Kroger, McCloskey said they have worked over two decades to move closer to consumers as they began using RO and ultrafiltration as early as 1995 to reduce the water moving loads of milk to cheese plants, while at the same time beginning the high protein, low sugar milk proposition partnering with H-E-B in Mootopia in 1996, before what is fairlife today.

They saw other protein drinks in the market they could compete with – by concentrating the protein in milk.

So began the process of building the brand from coast to coast as new products have been added continually. While most people are familiar with fairlife ultrafiltered milk, the CorePower fitness recovery drink was among the first that was created as a competitor for Muscle Milk.

Today, there are flavored Yup drinks, snack drinks that pair ultrafiltered milk with oats and honey, new coffee creamers, and a full line of weight management and healthy lifestyle products that are just emerging under the fairlife brand.

While Select Milk Producers sold its remaining half-interest in fairlife to its early partner Coca-Cola a few weeks ago, McCloskey remains a spokesperson for the brand. Also, the research and development teams remain intact and are still located in Chicago.

The spotlight

What Coca-Cola did for fairlife, said McCloskey, is to provide a nationwide distribution network that the Select co-op could not have achieved on its own.

“The hardest thing in consumer goods is to get a product in front of the people who want to buy it,” said McCloskey. “Our challenge was distribution. So, we formed a partnership with Coca-Cola. With Coca-Cola as 100% owner of fairlife, what happens now is that they are just going to run with it.”

This means that, “Milk is in the spotlight. While we hear the bad news from Dean’s and Borden, the good news is that the Coca-Cola, a top-five company, is involved in milk,” said McCloskey.

With an ultrafiltration plant producing fairlife in Michigan, she explained that the east coast and midwestern markets could be served and that the new Select plant in Arizona will serve the west coast market. A plant is also being built in Canada.

Answering a question about whether fairlife, or this direction of milk innovation, would ever “play ball” with the smaller average size farms in Pennsylvania, she replied that any milk supply for fairlife must be very low in somatic cell counts and will have to meet with flying colors all of the new levels of audits and animal welfare requirements that Select Milk Producers and Coca-Cola have implemented since the undercover animal abuse video at McCloskey’s original farm at Fair Oaks this past summer.

When asked how producers are compensated for these additional measures, she did not disclose proprietary information about how producers are paid.

The proposition

She said the fairlife story shows “there is still room for investment and innovation in milk, innovation that makes milk relevant to consumers.”

McCloskey explained how the ultrafiltration process raises the protein and calcium levels, removes the lactose and reduces the natural sugars in milk without adding anything.

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“And it is still real milk… but better,” she says, explaining that fairlife is finding “amazing growth in differentiation,” that fairlife’s entire proposition to consumers is the concept of  “believe in better.”

“Our core tenets of the master brand are better taste, better nutrition, and better values,” she said.

“The brand is created around values, and these values are not new, but they are done in a way that is a little more creative to today’s consumers.”

She explained that Select Milk Producers sends milk that goes into a jug at Krogers and sends milk to fairlife, “but it’s the innovation and sharing the values that leads to growth.”

Sharing consumer surveys showing 90% of fairlife consumers are satisfied and 69% are repeat customers, McCloskey said this growth and innovation “mean bigger things for dairy than just fairlife.”

She said that 45% of the fairlife market share is coming from within the milk category and 55% of their consumers are coming over from outside of the milk category.

While fairlife’s ultrafiltration process is patented, McCloskey said a dozen new products have come on the market since fairlife that use similar technology or other means of delivering high protein, low sugar outcomes.

This allows these products to differentiate themselves next to the gallon of milk as a generic staple, she explained.

“If someone is on food stamps and can’t afford these new products, that’s okay,” McCloskey said. “They can buy milk. People will still buy milk.”

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The next phase

McCloskey stressed the “tremendous value checkoff organizations bring to dairy farmers to promote how to innovate dairy and make it better.”

She explained the next phase, how DMI is sitting down with young urban-suburban consumers to “learn how they make food choices, to learn what they look for. This is leading us into sustainability and carbon footprint,” said McCloskey.

“We also sit down with the different NGO’s (like World Wildlife Fund for example). We all sit at the table and talk about the challenges that face dairy farmers,” said McCloskey. “The Net Zero Initiative coming out of that is one of the coolest things, and we are a collaborator on what is needed for dairy to get to net zero. It’s a big stake in the ground, but it’s got to be the place where we need to go.”

She explained the Net Zero Initiative under DMI’s Innovation Center for U.S. Dairy has a catalog of technologies to help producers deal with environmental issues.

“What if 37,000 dairy farmers could have net zero greenhouse gas emissions? This is what we have to chase,” she said. “The innovation can’t stop. The whole genome of the dairy cow has been mapped. Manure can be fractionated. There is innovation that is so exciting for us to think about what dairy can look like in the future.”

The forward-looking picture McCloskey painted for Summit attendees includes even more fractionization and extraction of milk’s elements, more use of specialized GMO crops and more consolidation of farms and processors with fewer cows producing more milk to meet new sustainability benchmarks.

McCloskey said the innovation from fluid milk to cheese to fractionating protein into “all kinds of other products” — while reducing the overall dairy carbon footprint — is the road to 2050.

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The ‘perfect laboratory’

“We have only begun to know milk’s power and the different vitamins and elements we are just discovering how to use and extract,” she said.

“And it all happens in nature’s perfect laboratory – the dairy cow.”

On the flip side, McCloskey acknowledged that DMI has also learned consumer choices come back to this bottom line:

“It’s got to taste good and it’s got to do something for me,” she noted. “This is why dairy is not going away. Dairy is real and it tastes great and it makes you feel good.”

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New face, new position, ties ‘Undeniably Dairy’ to ‘milk without cows’

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By Sherry Bunting, Farmshine, July 31, 2020

CHICAGO, Ill. – A new face has “joined” Undeniably Dairy with direct ties to the effort to produce milk without cows.

Caleb Harper is the new hire for a new position via Dairy Checkoff. It was created within the DMI Innovation Center for U.S. Dairy’s Net-Zero project. His title as of May 1, 2020 is executive director of Dairy Scale for Good (DS4G).

On April 30, 2020, as reported last week in Farmshine, Harper left his position as the principle researcher at the M.I.T. Media Lab where he spearheaded the Open Agriculture Initiative, described as a “food computer” project. The lab came under scrutiny last fall for certain financial ties.

According to the May 13 New York Times, Harper’s OpenAg project “was quietly closed amid allegations that its results were exaggerated to sponsors and the public, the university confirmed. The Massachusetts Institute of Technology also announced that it would pay a $15,000 fine to the State Department of Environmental Protection because the project… improperly disposed chemicals into a well at a research center outside Boston where it conducted some experiments.”

For dairy farmers, that’s not even the worst of it. Harper has been a prolific writer and speaker touting cellular agriculture – milk, eggs and meat without animals.

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According to the most recent IRS 990s (2017 and 2018) for New Harvest Inc., Harper was a New Harvest board member during those two years.

This new DMI executive will head the work of scaling up the ‘climate-friendly’ practices dairy farms will implement in the future, when his past is rooted in cell ag to replace them. His direct association with New Harvest as part of their 5-member board is troubling.

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New Harvest describes its purpose as “support for education and scientific research that advance technologies that make animal products (meat, eggs, milk, etc.) without the animals in order to reduce animal suffering, improve human health, and protect the environment.”

We reached out to DMI through Scott Wallin, vice president of industry media relations and issues management. We also sent questions to the DMI chair.

— We asked whether this newly created position filled by Harper had been advertised and if other candidates had been interviewed.

— We asked what are the responsibilities and qualifications for this “executive director of Dairy Scale for Good (DS4G)”? (For his part, Mr. Harper has the following description listed on his resume at Linked-In, that he is “part of an initiative working to help U.S. Dairies pilot and integrate new technology and management practices to reach net zero emissions or better while increasing farmer livelihood.”)

— We asked whether Harper had prior connections to DMI or any member of staff or leadership before getting this position.

— We asked for confirmation of how Mr. Harper’s salary is paid, through what sub-agency of DMI or partnership?

— We asked to know his starting salary, given his listing with a speakers agency showing he charges between $30,000 to $50,000 as a speaker – a speaker who frequents events side-by-side with the executive director of New Harvest, such conferences sponsored by the United Nations, World Government Summit, EAT Forum and other entities on planetary diets, “future of food” and cellular agriculture – milk without cows, eggs without hens, beef without cows.

— We also messaged Mr. Harper to ask him how a board member of New Harvest that funds research and supports technology specifically for milk without cows gets a job paid by mandatory checkoff funds from American dairy farmers who feed, care for and milk cows?

— We asked him what are his interests and qualifications in dairy?

— We asked if he was tapped for this position by someone within the DMI organization or one of DMI’s “partners” or did he simply respond to a job posting and interview for the position?

— We asked DMI how it came to be that a person who is an obvious supporter of technology to create milk without cows became the person hired by dairy checkoff — with dairy farmer money — to help develop, scale and implement environmental practices for real dairy farmers?

So far, the only response we have received was a brief general email from DMI’s Wallin, as follows: “Caleb Harper joined on May 1 to support U.S. dairy’s growing commitment to environmental stewardship and the development of new, scalable technologies and practices to support U.S. farmers.”

Harper, who goes by the handle @CalebGrowsFood on Twitter, has deep connections to cellular agriculture, a new sector populated with Silicon Valley “tech food” startups that the largest global dairy and meat integrators and food giants are now investing in to ramp up to scale. They use false science on human health and environment, especially climate change, as the angle to push these new product investments so they take root in retail and foodservice sectors across the nation, the world.

In fact, the continuation of status-quo low-fat and fat-free diets via the Dietary Guidelines Advisory Committee’s unscientific “Scientific Report,” July 15 is a key in the cell ag arsenal. A primary vegan on the saturated fats subcommittee alluded to “making way for new foods coming” that will deliver the nutrients the government-sanctioned meal patterns leave lacking.

New Harvest has funded and supported research with donations to companies making bovine DNA-altered yeast that excrete “dairy replacement” proteins that companies claim are “interchangeable” with real dairy protein in any food processing application. Companies like Perfect Day tout their B2B model of working with large dairy companies to scale, to provide replacement dairy protein that reduce the need for real dairy protein and thus reduce the need for cows and the “pressure” on the environment.

These “cell ag” companies and non-profits work together to seek from FDA the ability to label their creations as the dairy and meat they replace because they declare them to be biological replicas — achieved through gene-editing and modifying.

They seek the new “healthy” icon FDA is creating with its ongoing development of a Nutrition Innovation Strategy to meet dietary goals, such as low-fat. They say their replacements are superior because they reduce the impact of livestock on the planet and can be genetically customized to meet goals for the low-fat DGA recommendations.

Even the USDA bio-engineered (BE) labeling implemented in January is all set and ready for this, and guess what? Dairy producers helped lobby for it, thinking it applied to the crops they grow. Our industry leaders used producer reactions to non-GMO labeling to get grassroots support for label language that now does not require bio-engineered replacements to be labeled as such unless the engineered DNA is detectable within the final edible food.

A visit to the New Harvest web page at new-harvest.org will make your hair stand on end. Seeing the motto so boldly proclaiming: “Milk without cows. Eggs without Hens. Beef without Cows,” offers the realization that their goal – in concert with World Wildlife Fund (WWF), DMI’s “sustainability partner” — is the end of animal agriculture through cell agriculture.

Don’t get angry and don’t be depressed. Have hope. Be bold.

If every Farmshine reader does some of the suggestions below, maybe the Titanic can be steered away from the iceberg:

1)      Send this article to your Congressional representatives with a short note stating that this is just one example of how your rights as an American dairy farmer are being violated by the 15-cent mandatory dairy checkoff. Ask for his or her help in getting you an exemption from paying the checkoff, or in allowing you to assign your checkoff “tax” to another promotion, research and education entity.

2)      Call, email, or write to the cooperative director who represents you and ask what your cooperative is doing to protect its members from even more FARM requirements, considering an obvious supporter of “milk without cows” will be implementing the “Undeniably Dairy” environmental piece as executive director of DS4G.

3)      Call your state or regional dairy promotion representative or CEO and ask them to keep all of your dime in regional promotion instead of sending those 2.5 to 3 extra cents to DMI’s Unified Marketing Plan. They have the nickel. That’s enough.

4)      Watch for opportunities to support a dairy checkoff referendum. The law states that when 10% or more of the dairy producers and importers subject to the checkoff request a referendum, the Secretary of Agriculture must oblige.

At best, DMI did not do its homework on this, and other decisions that have influence over the future of rank-and-file dairy producers footing the bill.

At worst, DMI’s “pre-competitive” alliances with global food giants and WWF are steering efforts toward dilution in order to meet some ethereal environmental goal.

Meanwhile hard working, conscientious dairy farmers have done and are already doing more good for health, climate, water and soil than the combined efforts of billionaire Silicon Valley ‘tech-food’ startup investors, multinational food corporations, gene-altering animal replacers, plant-based imitators, high-paid future food fast-talkers, sly and cunning dietary do-gooders, cows-and-climate catastrophe exaggerators, and so-called ‘sustainability’ WWFers.

In times like these, dairy checkoff unity could mean circling the wagons to protect dairy farmers with a locked-and-loaded promotion, education and research front that keeps the cunning wolves from getting in, but instead it gives them an opening and some leverage to devour.

Business is business. But dairy farmers should not be forced to fund their own dilution and demise.

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What’s this? DMI hires ‘director of DS4G’, Resume looks impressive if the goal is to keep on diluting dairy

By Sherry Bunting, Farmshine, July 24, 2020

CHICAGO, Ill. – Dairy Management Inc (DMI) has a new hire at the Innovation Center for U.S. Dairy, under the leadership of Tom Vilsack and Mike McCloskey,  as part of the big push to make “sustainability” center of the plate. The definition could surprise us.

We know the goal on climate is to get “U.S. Dairy” to “net-zero” emissions across the supply chain by 2050 or sooner, but for me, this looks like a smoke screen to ramp up the rate at which the dairy food industry giants seek to scale dairy production and fill in the gaps with a little Perfect Day.

No announcement, but an occupation change and new Undeniably Dairy logo’d cover photo on his twitter feed signals that Caleb Harper — the former principle researcher and founder of the now closed Open Agriculture Initiative at M.I.T.’s embattled Media Lab — is the new DMI “Executive Director Dairy Scale for Good,” whatever that means.

Our initial inquiry for DMI’s vice president of media relations and issues management about the position and whether other candidates were interviewed — and other questions — was emailed earlier this week and not immediately answered.

Harper has a long history of advocacy for urban food production in the sense of digitized, software-programmable, particulized and reconstituted food.  He wrote opinion pieces and did TED Talks about how the cutting edge of this movement is agri-‘culturing’ companies making lab-created dairy protein from DNA-engineered yeast and meat replacements from gene-edited muscle cells, stating that these are the food innovations needed to be sure the world does not go hungry.

In a National Geographic opinion piece in 2017, Harper even mentions and advocates for companies like Perfect Day and Modern Meadow, makers of replacement dairy protein from bovine-DNA-altered-yeast, as the future of food production because, according to Harper, people will move to cities and the rural lands will lose population.

Yes, he’s a guy who believes in true factory farms, the kind of factory farms where fermentation vats feed yeast and collect their excrement to separate out interchangeable dairy components, like protein and where gene-edited muscle blobs grow in bioreactors instead of as animals on farms.

All part of the WWF (World Wildlife Fund) plan, I might add. They want to move everyone to the cities, re-wild the farms and rural lands, and they’ve already begun.

Harper, who goes by the handle “CalebGrowsFood” on Twitter, is part of the WWF “Thought Leadership Group.” In fact, Mike McCloskey of Fair Oaks, fairlife, and Select Milk Producers as well as a key leader in DMI’s Innovation Center for U.S. Dairy is also on the WWF Thought Leadership Group. Harper’s association with WWF goes back a long way.

For his part, Harper’s OpenAg Project at MIT set out to prove people in cities could grow their own food in LED boxes controlled by computers. Trouble is, it appears that despite the glowing reviews in 2016-18 when models were featured, the boxes never really worked. Some of the photos and demonstrations were allegedly fudged with plants purchased from local stores, according to Oct. 2019 and May 2020 articles in the New York Times, Propublica, WBUR public radio and several reports in science and technology publications.

On April 30, 2020, Caleb Harper left his position as the lead researcher for the OpenAg Project at MIT.

His departure coincides with the Institute’s investigation into the entire Media Lab at MIT amid the brewing scandal that first came to light last fall when the MIT Media Lab’s main director Joichi Ito was found to have financial ties to Jeffrey Epstein. Epstein is the international financier and socialite, who was a previously-convicted sex-offender and committed suicide last year in prison awaiting trial on new charges of human trafficking.

According to the New York Times, and other sources, the OpenAg project, led by Harper, was being used through various meetings between Ito and Epstein to get Epstein to invest more than the half million the MIT Media Lab was already receiving from him in “discretionary” funds — funds MIT was not aware of. As this became known, the work of the lab itself came under scrutiny, and that scrutiny is still in progress even though the lab shut down at the end of April with Harper’s departure.

Here’s the clincher. MIT began a thorough investigation of its Media Lab after firing the director over the Epstein financial ties, and along with that, is investigating Harper’s OpenAg project. Portions of the investigation were reported on in May of 2020 by various science journals and even the New York Times, indicating Harper’s OpenAg project released water from its “computerized plant boxes” with too much nitrogen, well beyond the levels they were permitted to release, and it went to an underground well. When a researcher on-site blew the whistle with local authorities, resulting in a $25,000 fine, he was reprimanded in an email from Harper for jeopardizing the future of the project, the report indicated.

In addition, Harper’s computerized artificial intelligence plant boxes, that were showcased on 60 Minutes and National Geographic as well as other high profile outlets, never really worked, according to researchers in the lab, who were interviewed by ProPublica, a non-profit journalism entity judged high in their accuracy based on evidentiary reporting.

What we are learning is concerning. Harper, in this Undeniably Dairy Scale for Good position, may be the very person to work with Vilsack and McCloskey on what practices dairy farmers (most likely via the FARM program) must implement in order to remain part of “U.S. Dairy” by meeting their environmental benchmarks on soil, air, and water. That’s being funded with your checkoff funds, and there is a big question mark behind the name of the new hire on implementation. Does he really know anything about those three resources – and how to really produce real food while stewarding them?

To be continued in the July 31, 2020 edition of Farmshine

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

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

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

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

Financial terms were not disclosed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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DMI umbrella covers seen and unseen

New tax-exempt entities form — some with aliases — as checkoff funds flow to partnerships

By Sherry Bunting, Farmshine, Sept. 20, 2019

CHICAGO, Ill. — The Dairy Management Inc. (DMI) umbrella keeps expanding to include a growing number and assortment of tax-exempt 501c3 and 501c 6 organizations, all having addresses of record being either DMI headquarters at 10255 W. Higgins Road, Suite 900, Rosemont, Illinois, or National Milk Producers Federation (NMPF) headquarters at 2107 Wilson Blvd., Suite 600, Arlington, Virginia.

Several file their public IRS 990 forms under alias names, so these forms are a challenge to find. Some of the boards of these related organizations are not announced except on these IRS forms.

In reviewing IRS 990’s, many of these boards are comprised of the executive staff of prominent multinational dairy supply chain companies as well as executive staff and board chairs for prominent dairy cooperatives based in the U.S. and from other countries.

In addition to those IRS forms we could find for 2016-17, there are new organizations that are being formed since 2016-17, for which no IRS forms are yet publicly available.

One up-and-coming new organization is the so-called Center for Dairy Excellence, which is the product of the U.S. Dairy Export Council and the Innovation Center for U.S Dairy under their Dairy Sustainability Initiative and Dairy Sustainability Alliance.

At a recent dairy risk management seminar in Harrisburg, Pa., a panel of DMI staff mentioned the new “Center for Dairy Excellence”, which they said is unrelated to Pennsylvania’s Center for Dairy Excellence, it just happens to use the same name.

An internet search shows the information about this new center is available in the password-protected “members-only” area of USDEC’s website, but the word is that it will be a new hub for product innovation and sustainability.

One point the DMI panelists made really hit home: “We want to move consumers away from the ‘habit’ of reaching for the jug and get them to be looking for these new and innovative products.”

Products that are rooted in what is increasingly the very hands-on work of national dairy checkoff through these proprietary partnerships that are facilitated by this growing series of related tax-exempt organizations that are then able to push decisions about how checkoff funds are used further into the proprietary pre-competitive hands of the global dairy supply chain and multinational corporations that serve on these related boards.

The companies involved benefit from DMI’s ability to use tax-exempt status to conduct new product research and market testing paid for by dairy farmers under entities such as the Dairy Research Institute — a 501c3 organization that files under the alias name of Dairy Science Institute Inc. and includes several university laboratory sites, including Cornell, where the new fake butter made with water and 10% milkfat was recently discovered and paid for by New York dairy promotion dollars (reported in Farmshine Sept. 6, 2019).

The Dairy Research Institute is referenced at the websites for National Dairy Council and the Innovation Center for U.S. Dairy, but most of the links to their work are in a password-protected “members-only” area. Attempts to sign up to view this information were denied.

Yes, dairy farmers pay for the research, the market testing, and so forth, and the companies then bring these products into the marketplace via the national dairy checkoff funding stream via the tax-exempt status of the Innovation Center for U.S. Dairy.

Having gathered as many related IRS 990 forms as we could find (due to the confusing use of alias names), there are some interesting things to learn about how the vehicle of dairy industry consolidation and trends in promotion and research have been forming since 2008 — right under our noses — and how the mandatory dairy farmer checkoff continues to fuel the global supply chain engine.

IRS 990 forms show how executive staff for large multi-national companies – some of them based in other countries – are influential in charting this course under the mantra of “pre-competitive collaboration”, which of course makes it all confidential and proprietary.

These related organization boards include leaders of companies and cooperatives based not just in the U.S. but also in New Zealand, China, Netherlands, Canada and Denmark as they acquire assets and form joint ventures in the U.S.

The 2011 implementation of the 7.5-cent import promotion checkoff that perhaps gave entities like Fonterra the entitlement to help shape this direction, leading UDIA to transfer ownership of the Real Seal to NMPF, which now charges companies a licensing fee to use the Real Seal. (More on that another day.)

While a main focus of the USDEC and U.S. Dairy efforts is to increase exports, it is interesting to note that these gains have had a reverse effect on dairy farm milk price revenue, according to a recent study by dairy economist and supply chain expert Chuck Nicholson (more on that, too, another day).

Suffice it to say for now that export volumes were higher in 2016 and 2018 compared with 2017 and 2019, while dairy farm level milk prices were lower in 2016 and 2018 compared with 2017 and 2019. In fact, former Ag Secretary Tom Vilsack called 2018 “a banner year for exporters.” For dairy farmers, 2018 was anything but banner.

Meanwhile, Tom Vilsack, president and CEO of USDEC and a primary leader on the board of U.S. Dairy, is heavily promoting two of DMI’s new internal campaigns: 1) The “Next Five Percent” campaign wants to move exports from 15% of U.S. milk production to 20% within the next two years, and 2) The Net Zero Initiative wants the entire dairy supply chain at net zero emissions by 2050.

Let’s open the DMI umbrella with a short summary on some of the DMI-funded 501c3’s and 6’s by their known names and aliases. (We published a timeline for some of the major pieces under the umbrella in Keep in mind that NMPF is intrinsically involved in at least two: USDEC and Innovation Center for U.S. Dairy. These are the two organizations spawning a growing number of new tax-exempt organizations under DMI’s umbrella.

U.S. Dairy Export Council

USDEC and NMPF share offices at 2107 Wilson Blvd., Suite 600, Arlington, Virginia, just outside of Washington D.C., according to forms filed with the IRS. According to financial audits, DMI and NMPF trade and buy services from each other, and NMPF rented offices from DMI in Arlington until 2016 when these offices were sold.

In 2017, USDEC listed NMPF as an independent contractor paid $1.85 million for “trade services”.

USDEC paid DMI $6.5 million for management services in 2017, while also listing $6.4 million in salaries and employee compensation.

USDEC’s total revenue was $24.6 mil in 2017, of which $1.43 mil came from membership dues, $5.7 mil from government grants and $17.1 mil from DMI. This means that USDEC received 71% of its funding from national mandatory dairy checkoff and 23% from government grants with just 6% of its funding coming from the membership dues paid by the corporations and cooperatives that are significantly represented on the USDEC board of 140 directors.

The chief financial officer for USDEC in 2017 was Carolyn Gibbs, who was also listed as the CFO for the Innovation Center for U.S. Dairy. Halfway through 2017, she left this position to become a principal officer of Newtrient LLC, another related organization formed under the DMI umbrella in 2017. IRS forms for this organization are not yet publicly available.

Before coming to DMI, Gibbs spent 13 years at Kraft Foods, Inc. Her consulting work today with Newtrient LLC is described as “industry outreach, strategy, Net Zero Initiative, and project continuity.”

Innovation Center for U.S. Dairy

The Innovation Center for U.S. Dairy — a 501c6 formed in 2008 — is officially known to the IRS as Dairy Center for Strategic Innovation and Collaboration doing business as Innovation Center for U.S. Dairy. The national dairy checkoff organizations increasingly refer to this organization simply as “U.S. Dairy,” and the website for some of its activities is USDairy.com.

According to DMI’s IRS 990 form, this organization is directly controlled by DMI.

The “collaboration” has a small budget of around $115,000 for each of the past three years and no paid staff. But it is the hub of new tax-exempt organizations as well as trademarked initiatives.

Innovation Center for U.S. Dairy describes its reason for tax-exempt status on the 990 forms, as follows: “…to provide a forum for the dairy industry to identify opportunities to increase dairy sales through pre-competitive collaboration. It combines the collective resources of the dairy industry to provide consumers with nutritious dairy products and foster industry innovation for healthy people, healthy products and a healthy planet.”

On its 990 forms, U.S. Dairy lists its board of directors — a who’s who of chief executive officers and board chairs for prominent dairy cooperatives as well as multinational dairy processors. The board also includes DMI CEO Tom Gallagher and of course Vilsack.

The Dairy Sustainability Alliance

A key subset of The Innovation Center for U.S. Dairy is The Dairy Sustainability Alliance, trademarked by DMI in June 2017. A search for The Dairy Sustainability Alliance at guidestar.org, a database of non-profits, brings up Global Dairy Platform Inc.

Global Dairy Platform Inc.

Global Dairy Platform is a tax-exempt organization formed and incorporated as a 501c6 in 2012 and it lists its physical address as DMI headquarters in Rosemont, Illinois.

It describes its tax-exempt justification as follows: “A pre-competitive collaboration of dairy sector organizations, the Global Dairy Platform works with its global membership, scientific and academic leaders and other industry collaborators to align and support the international dairy industry to promote sustainable dairy nutrition.”

Chaired by Rick Smith, president and CEO of Dairy Farmers of America (DFA), the Global Dairy Platform (GDP), has a board of 12 executives representing the following corporations, cooperatives and organizations: Fonterra (New Zealand), Saputo (Canada-based multinational), Leprino (multinational), Land O’Lakes, Meiji Holdings Ltd. (China), FrielandCamprino (Dutch multinational), Arla (Denmark multinational), China Mengniu Dairy Company and the International Dairy Federation.

Donald Moore was paid nearly $600,000 as GDP executive director in 2016, the most recent IRS 990 form available. Moore currently also serves as chairman of the International Agri-Food Network and the Private Sector Mechanism to the United Nations Committee on World Food Security.

DMI senior vice president Dr. Greg Miller is listed as the research lead for the GDP, and he is currently also serving on a food and sustainability committee with the UN World Health Organization. He was the highest paid DMI executive in 2017 at $1.49 mil (including benefit package and deferments).

GDP had revenue of $3.74 million from DMI in 2017 — $2.6 mil for program services and $1.12 mil in the form of grants in 2016. According to the IRS 990, $583,329 of this revenue came from the import checkoff assessment. Research projects accounted for $1.85 million of expenses.

Newtrient LLC

Until July of 2017, Carolyn Gibbs was listed as chief financial officer of USDEC and the Innovation Center for U.S. Dairy, where she assisted with the launch of Newtrient LLC, another tax-exempt 501c6 formed in 2018, according to Gibbs’ bio at newtrient.com.

Newtrient falls under the Dairy Sustainability Alliance (Global Dairy Platform), which comes under the Dairy Sustainability Initiative.

No IRS 990 forms are available yet for Newtrient LLC.

Newtrient is described at its website (newtrient.com) as “an entity focused on turning waste into renewable energy and other commercially viable products, while reducing dairy’s environmental footprint and improving economic returns for dairy farmers.”

Dairy Research Institute

The Dairy Research Institute is a name trademarked by DMI, but the IRS recognizes this 501c3 as Dairy Science Institute Inc. doing business as Dairy Research Institute with a physical address at DMI headquarters in Rosemont, Ill.

The Institute describes its tax-exempt status to the IRS as “created to strengthen the dairy industry’s access to and investment in the technical research required to drive innovation and demand for dairy products and ingredients globally. The Institute works with and through industry, academic, government and commercial partners to drive pre-competitive research in nutrition, products and sustainability on behalf of the Innovation Center for U.S. Dairy, the National Dairy Council and other partners.”

The Institute is primarily funded by DMI with reported revenue of $1 million in 2016 and $785,935 in 2017. However, from 2013 through 2017, the Institute received a total of $24.3 million from DMI, including it’s first-year startup grant of $19.16 mil. in 2013.

Its officers are listed as Dr. Gregory Miller, president, Tom Gallagher, chairman and Carolyn Gibbs, CFO through July 2017 (before heading over to Newtrient and being replaced by Quinton Bailey).

Dr. Miller is also the research lead for Global Dairy Platform and chief science officer for the National Dairy Council (NDC), a 501c3 tax-exempt organization formed in 1969 and today controlled by United Dairy Industry Association (UDIA) and managed by DMI.

GENYOUth

While the sustainability organizational rollouts have been ongoing since 2009-10 memorandums were signed between USDA and DMI, another organization was simultaneously formed while Tom Vilsack was Ag Secretary in 2010 through a three-way memorandum of understanding between National Dairy Council, USDA and the National Foodball League.

This 501c3, of course, is Youth Improved Inc. doing business as GENYOUth, describing its tax-exempt status as “activating programs that create healthy, active students and schools, empowering youth as change-agents in their local communities, engaging a network of private and public partners that share our goal to create a healthy, successful future for students, schools and communities nationwide.”

DMI is listed as GENYOUth’s controlling organization and paid one of its partners, the NFL, $5.6 million for promotion in 2017, according to IRS filings. 

At the same time, in 2017, GENYOUth’s most expensive “charitable activity” was listed as Fuel Up to Play 60, costing $5.4 million and giving considerable advertising exposure to the NFL among future fans. That year, the NFL contributed less than $1 million to GENYOUth, and that year the NFL also received $5.6 million from DMI.

Alexis Glick, a television personality until 2009, has been GENYOUth’s CEO since its inception in 2010. In both 2016 and 2017, she was paid $259,584 as “compensation for services provided under an independent contractor agreement.”

Other employee compensation totaled $517,165, including vice president Mark Block, at $221,000. Pension plans and other employee benefits totaled $110,026 and other professional fees paid to contractors totaled $2.36 million.

Since 2010, the organization has brought donors to the table including some of the multinational dairy and foodservice corporations DMI is working with in other tax-exempt product innovation and ‘sustainability’ ventures.

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DMI’s innovation = secret projects with strategic partners

By Sherry Bunting, Farmshine, Friday, Sept. 13, 2019

CHICAGO, Ill. – ‘Proprietary’ describes much of what the Innovation Center for U.S. Dairy initiates as a checkoff-funded industry collaboration under the umbrella of Dairy Management Inc. (DMI).

Some of that work is so proprietary, even the 81 voting DMI board members don’t see details as they vote to approve partnerships, new product developments, promotion grants to launch new products, as well as the ‘sustainability’ initiatives and alliances that come from this collaboration and filter down as requirements for all dairy farms through their respective processor and cooperative milk buyers via the FARM program.

Board members are quick to point out that USDA and DMI attorneys are privy to proprietary details that are kept confidential. They point out that food industry partners and processors must show they are investing more than they are receiving, and that their “innovation” has potential to be a ‘catalyst’ for others to follow.

DMI describes program accomplishments in the IRS 990 form, specifying that, “DMI partners with foodservice industry leaders to help create dairy-based innovation to drive dairy sales and build trust in dairy products.”

The description details the way partnerships are boosting dairy use, especially cheese, by restaurant chains.

At the same time, DMI describes its strategy to revitalize fluid milk by ‘reinventing the consumer milk experience.’ (Reinventing milk was examined in a separate article in the August 23 edition of Farmshine.)

The Innovation Center for U.S. Dairy (under the official tax-exempt name of “Dairy Center for Strategic Innovation and Collaboration, doing business as Innovation Center for U.S. Dairy”) fuels these partnerships with mandatory checkoff funds and is the place where these partnerships are born from the board of DMI staff and processor / co-op chairs and CEOs. (See related article).

Here, we examine the mainly cheesey partnerships DMI has pursued since 2009-10. That is the year in which the Innovation Center for U.S. Dairy was formed under DMI.

In 2017, (DMI) had four domestic, U.S.-focused partners: Dominos, Pizza Hut, Taco Bell and McDonalds. Based upon the success of our U.S. partnerships with Yum! Brands, which includes Taco Bell, Pizza Hut and KFC, we expanded our partnership focus and added two pilot international partnerships in 2017 — KFC, focused on Latin America and Pizza Hut, focused on Southeast Asia.

“The goal of the international partnerships is to increase U.S. Dairy Exports to these markets,” the DMI 990 form states. “DMI partners with these large catalytic companies because they are industry leaders who have the potential to deliver incremental and sustainable dairy sales. Moreover, these partners are closely watched by others in foodservice. Their innovation, whether product-based or technology based, created a catalytic effect, where others follow their actions. These partners were chosen because they commit to invest in innovation and marketing in support of dairy-based products: and they are willing to partner on other dairy industry priorities.”

According to the report, DMI supports a range of programs and initiatives with these influential and global foodservice industry leaders. The programs focus on providing dairy expertise and investment in the areas of consumer insights, new product development, new store and new technology testing, consumer communications and corporate social responsibility. Further, DMI provides on-site scientists and/or culinary experts who lead product development of dairy-based food and beverage products.

The main agencies of DMI handling these proprietary partnerships are the Innovation Center for U.S. Dairy and the U.S. Dairy Export Council (USDEC), which are both listed under the control of DMI on the form and are both under the leadership of former Secretary of Agriculture Tom Vilsack.

DMI also “provides expertise and consultants in the areas of marketing, consumer insights and research, nutrition, sustainability, animal care, food safety, regulatory environment and dairy communications.”

As a signal of success, DMI states that dairy is represented in 70% of their collective menu items among these partners and that these partners spent $11.1 billion between 2012 and 2017, collectively, on advertising their menus, including items that are “dairy-based” like pizza, tacos, ice cream and coffee drinks. But there is no data on how much of the total $11.1 billion was spent on actually advertising the dairy-based menu items.

DMI states that since these partnerships began in 2009, the combined milk equivalent tonnage of these partners, collectively, “has grown by 2.2 billion milk pounds, averaging 4% growth per year (since 2009).”

This is close to the overall global trend of 3% growth in cheese consumption annually.

In the 990 discussion, specific menu items are noted as examples, as well as how ice cream and cheese are reformulated by in-house experts provided by DMI.

Working with Domino’s, DMI helped “create the ‘Smart Slice’ School Pizza, which was in more than 10,500 schools by 2017 and meets the USDA dietary guidelines for being fat-free or lower in fat than regular cheese pizza.”

Also in 2017, Dominos began promoting awareness of the Undeniably Dairy campaign by including “farmer messaging” on 7 million pizza boxes weekly nationwide. DMI states that this “helped Dominos grow milk equivalent tonnage by 8.5% in 2017.”

DMI also partnered with Pizza Hut on the “cheese in more places” products, including the Ultimate Cheesy Crust Pizza with 16 pockets stuffed with nearly one pound of cheese.

As for Taco Bell, DMI states that this partnership has helped the restaurant chain evolve in how they use dairy, from incorporating it as a garnish to being more of a key ingredient …growing their milk equivalent tonnage by 7% in 2017.

However, partners like Taco Bell have also initiated “stealth health” menu-boarding since 2017, to encourage customers to consider condiments other than cheese and sour cream, such as salsa and pico de gala. And partner McDonald’s removed the ‘cheeseburger’ option from the Happy Meal menu last year. A customer can ask for a slice of cheese on the burger, but that option does not appear on the menu board. It’s called “stealth health.”

As for the international partnerships, DMI states that U.S. cheese sales at Pizza Hut Asia Pacific increased 29% in 2017. In fact, DMI leaders communicate that consumers in China, for example, look to the U.S. with confidence in food safety. They say their market research shows that the larger and more technologically progressive our farms are here, the happier moms are to buy U.S. dairy there. In fact, dairy checkoff leaders note in communications that small farms with older facilities conger-up images of concern for consumers in China who have not forgotten their 2014 melamine scare, which the Chinese government ultimately blamed on milk handlers for the network of small farms in China.

While cheese sales increased through these partnerships from 2009 through 2017, according to DMI, fluid milk sales declined even faster in those years than the 30-year trendline

Global supply chain structures also became more prominent as multi-national dairy ingredient suppliers connect with DMI partner-brands.

On the fluid milk side, DMI’s stated goal is to “reinvent the milk experience for consumers.” At the same time, the overall goals are focused on dairy innovation via business plans and structures that are more global in nature, focus on foodservice chains that represent domestic and overseas markets and utilize further processed, reformulated, and blended dairy ingredients while also creating menu items that use these proprietary ingredients to fit USDA’s low-fat dietary guidelines as the restaurant trade moves into ‘stealth health’ mode.

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

By Sherry Bunting, Farmshine, July 26, 2019

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

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

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

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

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

It seemed like value was being subtracted, not added.

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

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

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

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

The reply came by email to the questions we submitted.

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

Kyllo continues in the reply:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We’ll be paying attention to all of them.

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Dairy mis-leaders call for unity, bring on misery

By Sherry Bunting, Farmshine Op-Ed, July 19, 2019

Dairy producers find joy in the big and little things in life on the farm, working with family, raising children on the farm, building or continuing a family business, seeing the sun rise and set as they work, producing wholesome milk they take pride in, helping a cow have her calf, watching that calf grow and develop, planting tiny seeds, watching a crop grow.

We know personal stress on farms is at an all-time high, amid price and weather pressures. There is some optimism returning as last month’s milk checks were a bit better, and the futures markets fueled some optimism before hitting the see-saw again. Also, the first round of dairy margin coverage (DMC) checks have been received or are in the mail. (Signups for 2019 DMC end Sept. 20).

But despite the return of some optimism, stress continues to build on our dairy farms because the hole that has been dug is so deep, the ground to make up so vast, and the future sustainability of family farm businesses more challenged by the industry’s control of how they operate.

My thoughts here are based on personal meetings, phone conferences, emails and other communications with young farm families operating small herds and multi-family operations with very large herds. 

In my various work and volunteer efforts as a freelancer — I visit a lot of dairy farms. 

Even though milk prices are gradually rising, net mailbox prices are flat and costs are going up, eating into the price gains. Forages are tight, weather is an added burden, farmers are utilizing new strategies, adopting progressive practices, improving their business management – and yet, their farms and families are fraying over the question of whether to stay the course or sell the cows and leave it behind. 

Many are taking on other work and adding to their already long days with efforts to bring in income to support the farm.

Communities are feeling the long fingers, and farmers and related agribusinesses are supporting each other as best they are able. The levels of farm community unity have probably never been higher in this regard: People are coming together to promote milk through voluntary efforts, to support their neighbors, and to reach out to each other as friends and colleagues.

The industry leaders say the dairy industry must be unified. They say it is wrong to challenge the path of the industry because doing so is “depressing and divisive” and “brings more stress onto the farmers.”

Don’t challenge the system, they say, because this creates negativity and stress when farmers need to stay positive and united. This, I’ve been told by leaders.

Questions and challenges are not meant to divide or stress our farmers. The stress is already there. It may not always be spoken, but it is there, and it is visible. 

This stress cannot be painted over with pretty colors.

Stress on dairy farms today is rooted in the way this industry and various milk pricing and nutrition policies have economically failed our farmers (and our consumers), especially since 2008.

To talk about the industry’s path — to discuss and debate marketing decisions made with producer dollars — does not mean one is being divisive. This is America where ideas and challenges can still be discussed and debated, and where leaders can be questioned and held accountable.

How much more divided can an industry become than to see marriages, families, businesses, dreams fractured from the undue stress of not only a tough deal on the milk pricing but perhaps even more concerning, the increased levels of control that this same system puts upon our farmers, and how they manage their farms, as a condition to keep their milk contracts?

This loss of independence and loss of their ability to control the ‘controllables’ is of utmost concern. If we ignore these trends — in an attempt to be passively non-divisive — does that make the issue or problem go away? Certainly not.

Rapid streamlining of the dairy industry is underway, at least in part because this is the path charted in 2008 by the DMI Innovation Center for U.S. Dairy and the U.S. Dairy Export Council working via memorandums of understanding with USDA Ag Secretary Tom Vilsack who is today a DMI leader as USDEC president and CEO and instrumental in the Innovation Center for U.S. Dairy. 

Both USDEC and the Innovation Center are primarily supported by the mandatory checkoff paid by dairy farmers; but they also partner with food supply chain companies that work on proprietary products, ideas and concepts for the expressed purpose of growing the dairy sector globally.

The industry leaders tasked with spending the farmer’s 15 cents per hundredweight say raising exports to 20% (last year was 16%) is the key for a growing dairy industry.

Most notably, Vilsack reported in May that, “2018 was a record year for U.S. dairy exporters with export volume up 10% from the prior year. Simply put, exports support the growth aspirations of the U.S. dairy sector.”

Nowhere in his statement, or the entire blog post at USDEC, did Vilsack mention the dairy farmers who pay his salary. He mentions the dairy exporters and the dairy sector, but not the dairy producers.

Are exporters and sectors paying his salary of $750,000? No, not really. A small portion of USDEC is funded by ‘industry’ memberships, and importers pay a smaller checkoff, but the bulk of the agency and its CEO Tom Vilsack are funded directly from government-mandated dairy producer checkoff funds.

Where are the statements about a promotion agenda that seeks to return a fair price and livable income to those producers paying the agenda-makers salaries?

At various meetings last year where milk markets were discussed, dairy traders stated that exports do not raise farm-level milk prices. Interestingly, 2018 exports were higher than 2017 while 2018 prices paid to dairy farmers were much lower than 2017.

The direction of the dairy checkoff is toward growth of the dairy sector globally, at all costs, and yet the U.S. dairy farmers are paying the bill for this, with USDA having very close control of it.

This goal has been positioned to farmers as an all-out race to gain global market share before other countries do it, without a methodical approach or review on the impact to domestic markets and producers along the way.

This global agenda is also steering the sustainability frameworks and alliances DMI’s Innovation Center is forming that will control more aspects of management at the farm level in the future.

In recent proof of conversations between farmers and checkoff staff and board members, questions about Innovation Center projects, alliances and partnerships were passed off as though the board receives its information on these projects on a “need to know” basis. A board member stated in these exchanges that they are not concerned with seeing every detail of a proprietary project because DMI’s attorneys and USDA’s attorneys know the details, and the board trusts the staff.

(I have served on boards elected by citizens. Trust in staff is critical, but so is transparency of projects paid for by a checkoff — the same as a school tax.)

For some, a call for unity means don’t ask questions. For others, it means get informed and start mobilizing a grassroots unifying effort.

In a copy of non-executive February DMI board minutes received by Farmshine, a strategy is detailed by the Farmer Relations and Consumer Confidence Committee. According to the minutes, a key discussion at the February 19-21 board meeting was stated as “farmer engagement around checkoff value is more important than ever before.”

A key bullet point was for national and local checkoff board members to “focus on the movable middle.”

Another bullet point of the discussion in the minutes is that DMI is “learning from the checkoff Facebook page and regional media coverage (Farmshine) reinforcing that you do NOT continue to engage with those detractors that cannot/will not be moved.”

While Farmshine was still seeking answers to questions and had not yet published the DMI chair’s letter of response (published Feb. 21), DMI had already taken a position in its Feb. 20 board discussion to “not engage” with detractors, mentioning Farmshine parenthetically by name in this category.

According to the minutes, the rest of the DMI board discussion on this topic centered on the need to “reach out to those farmers who see/hear from the unmovable detractors” (that would mean Farmshine readers as per the above). According to the minutes, “ways to reach the movable middle” were discussed.

So, while organizations chart a course for unity and reaching out to a movable middle, dairy farm families are focused on finding ways to move forward on their farms and to unify and inform their communities.

Even though our legislators are taking notice of the growing crisis — and some sincerely care and are trying to do something — these stopgaps and investments are a drop in a very large bucket. Those drops are appreciated, but there are big things to tackle that require courage when it comes to the needed changes in nutrition rules, checkoff rules, promotion rules, labeling rules (and also lack of standard of identity enforcement), complex milk pricing rules (while processors and co-ops are readying a proposal for their make allowance increases as soon as prices improve a bit), not to mention rules that impact the cost of doing business every day on the farm.

As dairy farm families keep moving forward, finding ways to do more with less, working longer hours with less help, taking on off-farm employment and finding other revenue streams to pay their bills — They are consequently burning the candle at both ends and incurring more stress.

The stress on farms of all sizes can be overwhelming and is felt by even the best operators.

We do need unity, yes, but the question farmers are asking themselves is: Who will be part of dairy’s unified and globalized future? They deserve to know the direction the organizations they fund are taking their product, their market, and the industry they have supplied with wholesome milk for generations.

We can do better than this in America where agriculture truly is our backbone. Without strong farm families, all else fails eventually, including our liberty and security as a nation. 

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Vilsack reveals ‘Net-Zero Project’ in Senate testimony, Climate policy table set

Vilsack lays out plan for USDA to partner in ‘Net Zero’ pilot farms, using results to set governmental policies and incentives

By Sherry Bunting, Farmshine, May 24, 2019

(Above) DMI’s checkoff-funded Innovation Center for U.S. Dairy was formed in 2008, the year Tom Vilsack became U.S. Secretary of Agriculture. This timeline shows the events from 2008 to 2019 around the Innovation Center, sustainability programs, FARM program and various MOU’s with USDA while Vilsack was Secretary and after he became president and CEO of U.S. Dairy Export Council in 2017. 

WASHINGTON, D.C. — FARM program evaluations over the past few months have yielded reports from dairy producers on new questions they are being asked about their feeding practices and usage, nutrient management plans, manure management systems and cropping practices, feed rations by class of cattle, livestock and feed inventories on the farm and heifer inventories raised off the farm, milk receipts and receipts for cattle sold for beef purposes, energy and fuel usage and costs, specific questions about wetlands on farm properties as well as new questions about human resources.

Over the past two years, the National Dairy Farmers Assuring Responsible Management (FARM) has added new ‘silos’ to the 4-part program. In addition to Animal Care, the newer portions are Environmental Stewardship, Antibiotic Stewardship, and Workforce Development. With all four in place, virtually every management aspect of a dairy farm falls under the FARM umbrella.

The FARM program is funded by the mandatory dairy checkoff through DMI’s Innovation Center for U.S. Dairy. FARM is administrated by National Milk Producers Federation (NMPF).

98% of milk enrolled

According to its 2018 Report, 98% of the milk produced in the U.S. is enrolled in FARM. The Animal Care silo is mandatory for all 115 participating cooperatives and processors, and 20 of the 115 adopted the Environmental Stewardship module by the beginning of this year.

Development of the Environmental Stewardship (ES) module began at FARM’s inception in 2009 but did not become a ‘silo’ in FARM until 2017. The FARM website states that this portion is currently “voluntary for program participants.”

This simply means that the 115 cooperatives and processors that are participating in FARM can voluntarily add the ES module. When added by the participating cooperative or processor, the components of the module become — in effect — mandatory for the farms.

The FARM materials clearly state that FARM is not a legal document. And yet, its modules have expanding levels of authority beyond a milk shipper’s legal milk contract obligations, without expanding compensation.

FARM’s Environmental module was developed, according to the 2018 annual report, as “a tool participants (co-ops and processors) can use to communicate progress towards reducing their carbon and energy footprint.”

The report says further that the Environmental portion of FARM is geared toward assuring dairy customers and consumers of the dairy industry’s commitment to “ongoing environmental progress (by) asking a set of questions to assess a farm’s carbon and energy footprint and then providing farmers with reliable, statistically robust estimates.” It also “tracks advances in dairy production efficiency.”

The questions and data are evaluated based on a life-cycle assessment (LCA) of fluid milk conducted by the Applied Sustainability Center at the University of Arkansas, incorporating modeling piloted on 500 example dairy farms across the country.

Checkoff-funded GHG calculator

This LCA development was launched in 2009 at the inception of FARM. By 2010, the greenhouse gas (GHG) LCA was completed, and by 2012, the comprehensive environmental LCA was completed. The program’s ‘Farm Smart’ tracking tool was piloted on the ‘model’ farms in 2013-14.

Farm Smart became a transitional tool in 2016 during a period of analysis, replication, system testing and piloting. In 2017, the FARM program added the Environmental module and began using this ‘Farm Smart science’ to establish the GHG calculator.

FARM environmental audits

For those producers who are being asked these new questions during their FARM evaluations in the past few months, their answers are recorded, and farm data are entered into a spreadsheet, from which annual Environmental audits will be randomly selected.

A video at the FARM website explains the process evaluators use to enter the farm name, zipcode and most recent daily milk shipment in pounds of fat and energy-corrected milk.

The spreadsheet automatically groups these farms by 3-digit zipcode and automatically ranks them within their geographic area by production quartiles — the top 25% of farms with the largest daily milk shipments are in quartile 1 and the smallest 25% are in quartile 4 with the other two quartiles automatically segregated.

Another built-in formula then sorts the farms by 3-digit zipcode and then by production quartile to break out ‘subset’ lists from which 33% of each subset will be randomly selected for annual audits.

Evaluators are told in this training video that the information they are collecting is “purely informational and will be used by National Milk Producers Federation (NMPF) at a later time.”

So, as FARM evaluators come to the dairy farm, ask new questions and record new information to develop profiles of farms to run through a Farm Smart GHG calculator, the tracking of the milk supply is well on its way.

This tracking eventually becomes a point of oversight and internal regulation to reach the goals set by the checkoff-funded DMI Innovation Center for U.S. Dairy.

Checkoff sets GHG goals

During a Senate hearing on Agriculture and Climate Change this week (May 21), former USDA Secretary and current president and CEO of the checkoff-funded U.S. Dairy Export Council stated that “U.S. Dairy” is “on pace” to meet its goal (set while he was Secretary in 2009) of reducing GHG by 25% by 2020.

Vilsack also announced that the new benchmark set by DMI’s Innovation Center for U.S. Dairy is net-zero emissions (by 2030).

When introducing Vilsack at the hearing, the Senate Ag Committee leadership referred to him not only as the honorable Secretary, but as president and CEO of the dairy “exports and innovation.”

The former Ag Secretary in his current role is instrumental in DMI’s Innovation Center for U.S. Dairy as this entity partners with multi-national corporations operating global supply chains sourcing dairy products and ingredients.

In fact, Vilsack spent much of his time in front of the Senate Ag Committee Tuesday pressing for government support and partnership in setting up pilot farms where all technologies for meeting the net-zero benchmark can be “measured, verified, cost-assessed and then marketed.”

He said the dairy industry needs a “showcase” of pilot farms and ecosystem markets, and he said business opportunities and jobs will follow. Vilsack also indicated that a net-zero achievement is necessary so “U.S. Dairy has a marketing advantage to be competitive in global markets.”

In the past, the ‘showcase’ dairies for the various pursuits of DMI’s Innovation Center for U.S. Dairy, have included Fair Oaks, and Mike McCloskey of Fair Oaks, based in northern Indiana has been a key driver in DMI’s Innovation Center for U.S. Dairy, headquartered an hour or so north in Chicago. The Innovation Center also provided funding for fairlife as a startup over the past decade of these developments.

Vilsack involved from inception

The Innovation Center for U.S. Dairy was implemented by DMI in 2008. The FARM program came under that umbrella in 2009. Both the GENYOUth and the Sustainability Memorandums of Understanding (MOU) were signed by DMI and USDA in 2009 and 2010 near the beginning of Vilsack’s 8-year tenure as Secretary. And, in 2010, DMI’s Innovation Center set a goal to reduce the already tiny carbon footprint of dairy by 25% by 2020. As now DMI employee Vilsack testified Tuesday, the Innovation Center’s new goal is net-zero by 2030.

In fact, in the final days of the Obama administration, on January 13, 2017, former Secretary Vilsack stepped from the office of the USDA Secretary on Independence Avenue, Washington D.C., and just 11 days and 4 miles later on January 24, 2017 stepped into his current office as president and CEO of the checkoff-funded U.S. Dairy Export Council, sharing offices with National Milk Producers Federation (NMPF) on Wilson Boulevard, Arlington, Virginia.

As noted, the dairy checkoff — under the increased guidance of the Edelman public relations and marketing firm — started down this road in 2008 with the formation of the Innovation Center for U.S. Dairy and the close working relationship with Vilsack while he was Secretary of Agriculture.

Through the MOU’s signed with USDA at that time, it is clear that DMI and its fledgling Innovation Center for U.S. Dairy was working closely with the USDA for all eight years Vilsack was Secretary and has carried the same direction and workload over to his employment with DMI in continuing to set benchmarks for dairy ahead of the current anti-cow discussions that have percolated over that same time within federal agencies through the influence of activist non-governmental organizations.

The DMI Innovation Center partnership with World Wildlife Fund became solidified in 2016, as Vilsack’s term as Ag Secretary was expiring.

Barely two years into his employment through dairy checkoff, Vilsack is back before the Senate Ag Committee talking about net-zero emissions, pilot farms, ecosystem markets and other concepts that align with the Green New Deal outlook on cows as a problem that needs to be solved by meatless Monday and have its methane button turned off in order to be acceptable in the EAT Lancet world where billionaires have invested in the replacement technologies of fake meat and fake dairy while simultaneously investing in U.S. global policy initiatives that were initiated while Vilsack was Secretary and were referenced by Senator Bob Casey (D-Pa.) during Tuesday’s hearing (that’s another story).

Again, instead of partnering with the private sector and organizations that understand the already small emissions of cattle when looking at the complete carbon cycle, dairy checkoff has aligned with groups like the World Wildlife Fund (WWF) and companies with technologies that are geared toward capturing methane and achieving net-zero GHG emissions.

This all sounds good, right? But what does it really amount to?

Net-zero by the numbers

The current benchmark set by DMI and USDA via the MOU in 2009-10 set the goal of reducing U.S. Dairy’s GHG by 25% by 2020. U.S. GHG inventories — according to the Environmental Protection Agency (EPA) — show that total agriculture accounts for 9%. Dairy and livestock, combined, account for half of agriculture’s contribution at 3.9%. Dairy, alone, is at 1.9% on its way, presumably, to 1.5% by 2020.

Even at that point, 25% of 2 is a savings of 0.5% of total U.S. GHG. Part of the FARM program’s tracking of GHG is to look at the number of animals culled for beef so that a portion of their GHG calculation can be pushed over onto the beef footprint and out of the dairy footprint. Can we see how the minutia goes on and on over tiny fractions of impact vs. standing tall to tell the true story about how small the cow’s impact really is?

Vilsack (above): ‘It’s time to get to net-zero’. Mitloehner (below): ‘Cattle do not increase global warming’.

Methane facts vs. fiction

Scientists are pointing out how the methane focus on cattle is being misplaced, or at least not evaluated properly. They point out in a new report that methane is a ‘flow’ emission, not a ‘stock’ emission. In other words, it doesn’t stick around or build up.

Slightly muted Tuesday was the expert testimony given by Dr. Frank Mitloehner, world renowned GHG expert and professor at University of California – Davis. He separated fact from fiction on the carbon footprint of livestock and dairy.

More importantly, he described methane, which is the main GHG of concern for agriculture and especially livestock and dairy. He explained how methane differs from the other two greenhouse gases – carbon dioxide and nitrous oxide – that together make up total GHG.

“For example, carbon dioxide lives for 1000 years, once we emit CO2 with our vehicles, let’s say, it stays there for 1000 years, same for nitrous oxide,” Mitloehner testified. “But methane is very different… with a lifespan of only 10 years.”

He described how a 1000-cow dairy after 10 years, for example, is no longer an emitter of new methane because the methane emitted is also being destroyed at the same rate, becoming part of the carbon cycle through plant photosynthesis, ruminant consumption of these plants and so forth on a continuum.

He explained this destruction process – hydroxyl oxidation – that “occurs constantly,” saying that, “Any kind of discussions that I am part of is a discussion where that fact is left out, and it shouldn’t be left out because it’s critical.”

In fact, Senator Joni Ernst of Iowa said “Some of us are pretty struck today because we have heard that methane is horrible, we need to reduce our livestock herds, and we should have meatless Mondays. We’ve heard that time and time again. It’s been done in various federal agencies in past administrations.”

Mitloehner pointed out that while methane is an important climate pollutant and almost 30 times more potent than CO2, “If we maintain constant livestock herds and flocks, then we are not increasing methane and therefore not increasing global warming as a result of that.”

In that context, mitigating methane becomes a tool to counteract global warming, which is a different discussion and one that gives the methane mitigation a valuation for potential compensation.

Surprisingly, Mitloehner’s contribution received far fewer questions from Senators than one would expect. Most of the Senators gave Vilsack multiple opportunities to come back to his theme of driving dairy and agriculture to net-zero and the business opportunities and marketing advantages this would provide for “U.S. Dairy” in global markets.

Meanwhile, a growing number of scientists are agreeing with a more realistic perspective on methane, that a more ideal approach would be aimed at zero emissions for stock pollutants that are long-lived such as carbon dioxide (through a combination of energy efficiency, more food per lower energy inputs and carbon sequestration through crops, grasses and forages) while aiming for flow pollutants like methane to be low and stable instead of zero because methane is short-lived and part of a continuous sun-powered carbon cycle in which cows are already an integral part on the positive side.

GHG tracking

With dairy farms representing 1.9% of total U.S. GHG and the transportation sector representing 80%, who is then calculating the GHG impact of transportation in a consolidating industry where the new term coined by Vilsack of ‘ecosystem markets’ substitute on a larger scale for the ‘environmentally-friendly’ concepts of regional food systems and eating ‘local.’

On the methane tracking in this deal, a split in thought processes is beginning to emerge.

Meanwhile, the Innovation Center for U.S. Dairy — and its birthing of the FARM program — provide the vehicle to meet the net-zero benchmark this checkoff-funded entity has set. The pilot farms the former Secretary wants the government to partner in supporting would develop another template of practices and technologies farms can implement to meet new Environmental FARM criteria so the net-zero benchmark can be met and marketed over the next 10 years.  

While achieving, marketing and capitalizing on net-zero emissions sounds great, what does it mean for all of the farms being forced to pay into the dairy checkoff with expectations that this money is for promotion and research of the milk they produce and the care they have always taken of the resources they steward?

When benchmarks, streamlining vehicles, government cross-over specialists, evolving science, assumed needs and fuzzy baselines, converge and align, where does this leave the single-family farm of 50 to 200 cows or multi-generational dairy farm of 300 to 1500 cows?

Will they be credited for destroying as much methane as they produce by keeping their herds fairly stable in size?

Without the financial incentives or compensation to implement template technologies to achieve net-zero, how will their tiny profiled-and-tracked GHG emissions be handled in FARM Environmental Stewardship audits and mandatory correction plans in 2020, 2025, 2030?

The drive toward installation of methane digesters to actually capture the methane is great science, and it works for some farms, but not others. It’s a pathway to net-zero, and yet it is unclear whether these other factors regarding methane will be highlighted in the Farm Smart GHG calculator developed by the DMI Innovation Center for the NMPF FARM implementation. Once in place, this GHG calculator will track dairy farm GHG progress as their cooperatives and processors add the Environmental ‘silo’ to the FARM requirements of shippers.

From Innovation Center documents and USDA MOU’s and WWF partnerships documents, the descriptions of the work done between 2010 and 2016 on the GHG calculator have a tracking focus on the same thing the anti-cow folks are focusing on, and that is methane’s 30-times greater heat-trapping capabilities compared with carbon dioxide, and totally ignoring the fact that the methane is short-lived at 10 years vs. carbon at 1000 years so the livestock and dairy industries have already dramatically reduced methane by having fewer animals producing more food today than 30 and 40 years ago.

Will appropriate credit be given to small and mid-sized dairy farms that have had modest growth rates over decades or generations putting them in a place of zero new methane? Or will they need to capture methane to satisfy the net-zero benchmark their checkoff program has set in order to make space for new cows to be added in the rapid growth and industry consolidation areas of the country?

In fact, as part of a flow pattern that involves plants (feed) and cows in reducing the GHG heat-trapping potential of carbon dioxide and methane, combined (see fig. 2), what’s newsworthy is  science does support more accurate modeling to credit the sequestration of long-lasting carbon and accounting for short-lived methane destruction.

On methane, Dr. Mitloehner stated that the mere fact that 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. creeped higher from 2014 to 2018 before backing off a bit in 2019. While still much lower than three or four 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 expanded global export goal if dairy farms in other areas remain virtually constant in size or are grow modestly by comparison.

To reach the Innovation Center’s new net-zero goal, cows would have to leave 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 NMPF / FARM. 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).

Will all dairy farms have to get to net-zero to survive over the next 10 years under the GHG calculator developed by the checkoff-funded Innovation Center, which has now been added to the FARM program? That’s the big question.

Before the Senate, Vilsack repeatedly went back to his main premise that the Net Zero Project is  “critical for U.S. dairy.” His written testimony specified that the Net Zero Project comes out of the collaborative work of several dairy checkoff-funded entities along with various global dairy food companies, including DMI’s Innovation Center for U.S. Dairy in combination with DMI-funded U.S. Dairy Export Council, and checkoff-supported Newtrient LLC, as well as an industry consortium called the Global Dairy Platform.

According to Vilsack, the Net Zero Project presents a  “global marketing advantage for U.S. dairy,” he said.  “This is how U.S. Dairy will compete.”

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Timeline tells the story

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

By Sherry Bunting, from Farmshine, May 10, 2019

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The logos on the accompanying timeline tell this story.

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

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Related links

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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