USDEC | Ag Moos

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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Timeline tells the story

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