To Be “Milk” or Not to Be? That is the Question!

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UPDATE: Comment Period Extended Until October 11!

August 27th is Deadline for Comments to FDA on Milk Standards of Identity

Background Information for the purpose of preparing public comments to the FDA concerning Standards of Identity for Milk

 

On March 29, 2018, FDA introduced the  “FDA Nutrition Innovation Strategy,” a comprehensive effort to review labeling of foods and an impact on human health, particularly in relation to preventable and chronic diseases.

“An almond doesn’t lactate, I will confess.”  And with those words, FDA Commissioner Scott Gottlieb, in a July 17 report by Politico,  amped up the debate about the relabeling of plant beverages which label themselves as ‘milk,’ which many believe are misleading and deceptive.

Although firm enforcement of FDA standards of identity should have been implemented several decades ago when “Plant Beverages” or “Nut Milks” first began to creep onto ‘dairy’ shelves, they were not.  No one knows the reasons why, but here we are, now with a debate and labeling examination which will cost taxpayers – and companies – millions of dollars.  Here’s some background:

A History:

First, it’s helpful to actually read and know about the standards as they exist:

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Standards of Identity for ‘Real Milk” were established in 1938 in the Federal, Food, Drug, and Cosmetic Act.

Part of the controversy results from the “real” vs. “processed” (aka ‘fake/faux ) nutritional properties of real milk.  The Wisconsin Agriculturist, in a July 23rd, 2018 article written by Fran O’Leary,  describes it this way:

Real milk provides eight times more naturally occurring protein in every glass, is wholesome and simple, and is a minimally processed beverage. Real milk also has no added sugar. The sugar in real milk is lactose, which is a naturally occurring sugar. Many types of nondairy milk, such as almond milk, contain sugar. Tell that to your friends and family members who believe otherwise.”

The Wisconsin Agriculturist concludes that article by quoting an emphatic statement from the American Dairy Coalition, which reminds real dairy advocates:

“It is crucial the dairy industry speaks up on the issue,” the American Dairy Coalition said in a statement. “We can no longer stand by” and allow plant-based beverages to be labeled as milk.

On July 26, 2018, the FDA released an official statement concerning its reasoning and approach to re-working milk / dairy labeling standards.

This statement occurred in conjunction with a July 26, 2018 Public Meeting to Discuss FDA’s Nutrition Innovation Strategy.   Several industry stakeholders went on the record with comments at that meeting, and those comments can be accessed via links here. 

Public comments on the FDA Nutrition Innovation Strategy will be taken until August 27, 2018.  (Update / 3rd week of August:  comments now taken until Oct. 11.)  Comments can be posted at this docket folder. (Electronic – OR – written/mail delivery submission is acceptable!).   It is particularly important for dairy FARMERS – those whose livelihood depends most directly on the sales of milk from their farms – to comment either individually, and via any producer organizations of which they are members!!

A Kathleen Doheny Article from WebMd:
“[Gottleib] . . . said the agency has ”probably not” been enforcing the standard of identity — and as a result, this nonenforcement has become the standard.”
– Agency will be ‘modernizing’ the standards of identity
– Comments expected be taken for a year
– Intentions to enforce standard of identity

The article also notes that plant / nut beverage sales increased 61% from 2012-2017, while Real Milk sales decreased 15%.

This proliferation of plant-based beverages has led to sales of those products which are expected to reach over $16 Billion (in US Dollars, but referring to the total world market value)  by the end of 2018.  That competition is in two forms: 1) dollars which have been removed from dairy communities & economies across the United States, and 2) Hundreds of Millions of gallons of real milk from real cows which no longer has a home, and has led to a long cycle of depressed prices which is steadily killing rural economies.

Much of that market displacement – and resultant stress on rural economies –  is believed to be because plant “milk” is a term which cannibalizes and preys on the goodness of natural milk, and the proven knowledge milk is natural protein source, readily absorbed by the human body.  

Spirited Plant-Based Advocacy Organizations and Individuals will challenge Real Dairy / Real Cow-Goat-Sheep-Mammal Advocates:

It should go without saying, but never doubt that those organizations and businesses who continue to build their financial empires while opposing the enforcement of standards of identity of “Real Milk”  will be relentless and tireless in their fight to bend the narrative in their favor.

A collaborative editorial in a Boulder, Colorado, web-based publication, advocates for the blurred lines and gray areas which are the basis for the advocacy of truth-in-labeling for those who believe traditional standards of identity exist for a reason.  Their citations to many will be questionable, and in some cases, outdated in their accuracy, particularly in the Greenhouse Gas Emission discussion.   At least one commenter suggests alternative beverages be called ‘milk substitutes.’

The Good Food Institute, whose website has the tagline “Creating a healthy, humane, and sustainable food supply,’ has already submitted this letter on July 23rd, before the July 26th hearing.

Food Navigator, in an article written by Elaine Watson, relays views of a firm which recently raised $24 Million to commercialize ‘animal-free proteins.”  According to the article, the company ‘takes food grade yeast, and adds DNA sequences . . . which instruct the yeast to produce the proteins found in milk.”

[Note: Admittedly, this technology is morbidly fascinating, but also gives real meaning to the terms “Sci-Fi Food” and “Frankenfood.”  We really, really need to ask ourselves:  just because we can – should we?”] 

 

Dairy Farming: continued decline, will it stabilize, or more consolidation?

It is no secret that the dairy farming industry is in a sea change of transition from smaller (400-head or smaller) herds to large herds of 1000 cows or more. And with that change, rural ag economies, the agribusinesses and services which serve those dairy farms are at risk themselves.

From New York, to Virginia, to Georgia, to Wisconsin, and to other regions, reports of dairy farms exiting from the industry are almost of epidemic proportions.  If these were job losses from a ‘factory in a big building’ closing, the public outcry would be deafening. However, because dairy is so scattered across the landscape and not contained in a single building like an industrial building, the loss of these economies is often a silent erosion that gets little public notice.

One example of some of the abuse that has occurred:

From The Cheese Reporter: Sunflower Butter!  A bid request from the USDA itself

But let’s give credit to #TraderJoes, who actually has an acceptable label on their plant beverages!  Kudos to them, and I’ll be back in their stores because they get it right! This is an example to others that it can be done!

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Additional Links to Consider (and look for others to be added before Aug. 27th!):

From Feedstuffs:  Gottleib:  “FDA . . . is invariably likely to get sued”

For now, please begin to do your homework, and draft your comments.   It could be as simple as “Real Milk comes from Cows, Goats, Sheep and other mammals.  Make this simple, and have “MILK” be labeled that way!”

From the American Dairy Coalition – Background & bullet points:

You can save time, and comment via electronic means directly to FDA via the portal.  As you do this, please remember your comments may be able to be viewed by the public.

And here’s a link to the portal to comment by October 11 deadline – Comment here.

  • As of 5:00 pm on Monday, August 20, 496 comments were received.
  • As of 11:59 pm on Sunday, August 26, 2,303 comments had been posted.

Please make sure that by late evening, on Monday, August 27, and now on October 11, your voice will be among them too.

#MilkTruthMatters  #IdentityMatters  #RulesMatter

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Michigan Spartan LLC: Major ‘Processing Campus’ to be built in Michigan

A News Digest about Michigan’s $510 Million Processing Complex: DFA, Glanbia, Select Milk, and Proliant are Partners

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On Thursday, August 9, 2018, Michigan announced a monumental project which will fill part of the void in worldwide dairy processing capacity.
Michigan Spartan LLC is the business entity developing a ‘world class dairy processing facility’  expected to process over 8 million pounds of milk a day when fully operating, said to be by September of 2020.  American Cheese is projected to be a primary product, with whey permeates, a by-product of cheese production used for food and feed applications, also a product offering.
The new facility is a partnership between Dairy Farmers of America (DFA),  Glanbia, Select Milk Producers, and Proliant Dairy Ingredients.  The venture is said to be similar to Southwest Cheese, a previously existing partnership of DFA, Glanbia, and Select Milk.
Michigan Milk Producers will also be a milk source for the facility.
The evolution of the project included a number of local and regional economic development and government agencies, with the Michigan Economic Development Corporation’s Michigan Strategic Fund board an integral player.  The Michigan Department of Agriculture was also involved.
The sheer magnitude of all the agencies and efforts involved in this monumental project offers many lessons to others considering dairy development efforts in any location.
The project is multi-national in scope, and involves worldwide dairy industry heavyweights.   Dairy Farmers of America is North America’s 2nd largest cooperative and 8th largest dairy company.  Select Milk Producers is North America’s 8th largest dairy cooperative according to Progressive Dairy, (6th largest on USDA’s Top 100 Ag Co-ops – last available, 2016 numbers) and 14th largest co-op on that composite  ranking.  Glanbia Nutritionals is North America’s 22nd largest dairy company, and a subsidiary of Glanbia PLC, based in Kilkenny Ireland. Proliant is based in Ankeny, Iowa.

Following is a digest compiled from media reports of today’s (August 9, 2018) from Michigan and other areas:

From the Detroit News:  “We really try to grow the value of the agriculture industry so that most of the commodities stay here in the state, have them processed here, keep the farmers here,” is a statement from  MEDC CEO Jeff Mason. The project is slated to receive $26.5 Million in Tax Abatements over 15 years. 

From the Lansing State Journal (makes one marvel at the effort put into project):  the project involved a number of state and local government agencies, included tax concessions on several levels, with these project parameters:
  • 146 acres in the site
  • Will process about 8 Million pounds of milk a day (mostly American style)
  • Will produce about 300 million pounds of cheese per year
  • Will operate  24/7, 365 days per year
  • Notes similarities to Southwest Cheese in New Mexico [another Glanbia / DFA / Select Milk joint venture]
  • Will use by-products from each layer of processing (whey from cheesemaking, then permeate from whey concentrated for dairy solids)
  • 259 jobs at the cheese plant
  • 38 jobs at the adjacent whey permeate plant

From Crain’s Detroit Business;  a business publication in the area:

  • Another $40 Million in Tax Incentives likely to come in the future may drive total investment from $510 to $550 Million
  • The project is part of Michigan’s Agriculture Processing Renaissance Zone initative, a program which assisted with another $58 million dairy processing facility (Foremost Cooperative) and a soybean processing facility earlier this year
  • “Adding this capacity to our ecosystem . . . is really going to bring stability to the market” – Peter Anastor, Division Director, Michigan Department of Agriculture

From The Charlotte Observer (an AP story)

  • Glanbia will oversee commercial, tecnical, and business operations
  • The project considered other sites in other locations

 

A worldwide milkshed suffering from a lack of modernized processing capacity should benefit from this project.

Note: Additional links and updates may be added in the future to this blog post.

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Proposal for Multiple Component Pricing in Southeast Withdrawn

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National All-Jersey has withdrawn their request  for a USDA-AMS Dairy Program FMMO Hearing to consider implementation of Multiple Component Pricing for the Southeast (FMMO 7) and Appalachian (FMMO 5) Milk Marketing Orders.
The withdrawal of this proposal culminates a process of several years of discussion and evaluations by producer groups and several dairy cooperatives on how Multiple Component Pricing in the Southeast might affect producer pay checks.
Following is the timeline of this spring’s events:
April 2, 2018: National All-Jersey submitted their 80-page proposal  requesting a hearing.
May 2, 2018:  USDA-AMS then posted an Action Plan.
May 16, 2018: An information session was held in Knoxville, in Knoxville, TN, which was coordinated by Tennessee and Kentucky Farm Bureaus.  The session was recorded in two parts, and each are available for viewing:
  • Part 1:  A 1 hr – 39 minute video recorded by TN Farm Bureau (Dana Coale, explaining FMMO process)
  • Part 2:  A 1 hr. 14  minute video recorded by TN Farm Bureau  (FMMO Administrators and officials explaining the specifics of the process leading to acceptance or denial of an MCP hearing)
June 1, 2018:  Two additional proposals were submitted to USDA-AMS:
  1. A  7-page request from Michael Brown, Director, Dairy Supply Chain for Kroger, stated: “We ask USDA to also include the a proposal to lower the minimum amount of Class I Sales required a distributing plant to achieve pooling status from 50% to 25%. “
  2. The Tennessee Dairy Producers Association, with Stan Butt as Executive Director, submitted a 16-page proposal in opposition to Multiple Component Pricing, with this opening statement:  “Opposition to the proposal submitted by NAJ to changing the current pricing structure in FMMOs 5&7 is based on the proposition that the majority of producers in both orders will be negatively affected.”
June 11, 2018:  A letter-to-the-editor written by John Harrison, Sweetwater Valley Farm in opposition to Multiple Component Pricing was posted by Progressive Dairyman.
June 28, 2018:  The letter withdrawing the Hearing request,  written by Erick Metzger, General Manager of National All-Jersey, posted at USDA-AMS – Dairy Program,  contains these statements:

 
“Marketing conditions in the Appalachian and Southeast Federal Order Marketing Areas are in a state of flux, aggravated by challenging national dairy product markets.
 
The proponents therefore withdraw their proposal for a multiple component pricing hearing in Orders 5 and 7 at this time.”
The letter closes with:
 “We anticipate resubmitting the proposal when the current marketing  challenges have stabilized and resources necessary to advance the proposal again become available.
Here is the letter in its entirety:
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All USDA-FMMO processes are directed and defined by a set of rules, including procedural rules.  It is up to farmers themselves – those most affected by FMMO rules and regulations – to learn the process, and to participate in the process. 
This spring, and the preceding years and months of information seeking, are an example of civil discourse which can occur.
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TN June Dairy Month: Kickoff Luncheon & Then 4-H at work!

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It’s ‘Raise A Glass’ Time in Tennessee!!

For several decades, the Tennessee June Dairy Month Kickoff has been the launch for events across the state highlighting Tennessee’s collective dairy industry.  The 2018 event was held at Battle Mountain Farm, the event venue of Hatcher Family Dairy Farm, College Grove, TN on May 30.  The rural setting, with Holsteins and Jerseys grazing in a nearby pasture, emphasized that tasty and nutritious dairy products truly do begin on a farm.

This event honors several aspects of Tennessee 4-H involvement in dairy related activities.  4-H County Chairmen, who conduct dairy promotion and awareness events across the state are recognized.  The Tennessee 4-H Dairy Quiz Bowl Finals are held. And always, an inspirational speaker brings life’s insights to 4-H’ers as they return home to begin June Dairy Month events.  Their activities allow them to compete for awards in several categories, which are presented at the next years events.

This year’s event was organized by Denise Jones, of The Dairy Alliance, who put the engaging tables and decor together and set a great dairy mood as folks entered the beautiful event venue.  She was assisted by Joan Benton and Cindy Cooper of The Dairy Alliance.

Following are some photo highlights of the event.

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Emma Mull, McMinn County, Grace Rich, Clay County, and Elizabeth Bright of Loudon County, are three of several County Dairy Month Chairs who have a full slate of activities planned.

You can follow Grace on Instagram as ‘udderlylegendairy,  Emma will be social on Facebook as McMinn County June Dairy Month, and Elizabeth Bright’s creative videos and spots are on Facebook at June Dairy Month – Loudon County.  Look for other social promotions and public activities from chairmen in your area of TN!

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Part of the setting front and center of the banquet hall, framing the dynamic Denise Jones, the event organizer, of The Dairy Alliance!  Did you know MILK is Tennessee’s Official Beverage?  It was given that designation in 2009 by the Tennessee Legislature.

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Three 4-H’ers, who will become future consumers, related how their participation both in Dairy Production Projects and Nutrition, Health, and Fitness projects, have made them appreciate dairy’s unparalleled nutritional benefits, along with the hard work of Tennessee farmers who produce that milk. Abigail Ferguson, Ashley Bell, and Kathryn Fellhoelter all gave great presentations.

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Marshall County is the winner of the Dairy Quiz Bowl Competition, and will be headed to the National Contest later this year.

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Some more of our Tennessee County 4-H Chairmen!  Do you know who the 4-H Dairy Chairman is in your county?

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Jeff Aiken, President of TN Farm Bureau, and a former dairy farmer himself, represented the organization as an event sponsor, and brought words of encouragement to those attending.  He was accompanied by many Farm Bureau staff members from across the state, as they came to support the TN June Kickoff event.

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Do You Know “What’s Your Why?”

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George Wilson, who retired from the Tennessee Titans after an NFL career with several teams, challenged the audience with the question “What’s Your Why?”  A two-time Walter Payton Man of the Year in the NFL, he inspired with point after point:

  1. Be the first to show up, and the last to leave. Be grueling, tough, and unrelenting in the pursuit of your dream!
  2. Be mindful of what you do and the choices you make, and of those whom you allow to make decisions for you.  [He began at an SEC school, Arkansas, on an academic scholarship, walked-on and made the football team, and then was able to receive a football scholarship because someone got arrested and lost the scholarship they had.  And that set the stage for his 11-year NFL career.]
  3. Sometimes in life, “Opportunity is Disguised as Hard Work!  [It took 15-16 years of hard work and sweat on the football field to finally get a starting position on an NFL team and an interception against the cowboys on national TV.]
  4. “I give of myself because others gave of themself to me.  THAT’S MY WHY! He prayed, “Lord, if you you allow my dream, I will give back.  And then noted, “that is a debt I’ll never repay!”
  5. Why does he care about Fuel Up to Play 60?  Because his thoughts were captured by this statement: “We could be raising the first generation of kids who won’t outlive their parents.  FUTP 60 puts power and decision-making in the hands of students who participate in the program.”

 

Celeste Blackburn, President of TN American Dairy Association, served as MC for the event, and gave Mr. Wilson an appreciation gift featuring some of Tennessee’s farmstead dairy products.

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At the event close, Jimmy Hopper, Assistant Commissioner of the TN Department of Agriculture overseeing TDA’s Consumer and Industry Services Division, was honored with the TN Outstanding Dairy Promoter Award. One of Hopper’s responsibilities was overseeing the Dairy Quality Division, charged with quality and safety on dairy farms and in milking barns, in processing plants, and addressing retail dairy sales outlets.  Jimmy went above and beyond a ‘job description’ to serve Tennessee’s dairy industry.  And he did it with class and respect for all he worked with. During his tenure, Tennessee’s first robotic milking barn was installed.

The Tennessee Cooperator has a great summary of Hopper’s career.

Always a man of humility, Hopper encouraged young folks present to find a dairy farmer and work with them for a while.  He noted there was no better role model for developing a work ethic that would serve one well throughout a career.

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McMinn & Loudon 4-H’ers Helped with a Milk Drive on World Milk Day!

Wasting no time getting started with June Dairy Month promotions, and in a way that serves others, the McMinn Co. 4-H Chairman, Emma Mull, and Loudon County’s Elizabeth Bright spent World Milk Day (June 1) helping Second Harvest in East TN at the Randy Davis Memorial Milk Drive. 

The event they participated in was held at Lenoir City, in Loudon County, Tennessee’s #1 Dairy County.   On that one night, in a 4-hour period, 1457 gallons of milk were purchased and loaded on a Second Harvest refrigerated truck, destined for distribution to neighbors in need in their 18-county East TN service area.

These annual events, held onsite with the cooperation of Ingles Groceries in East TN, encourage purchases of milk at the groceries for the purpose of distributing milk to hungry neighbors.  With their hands-on approach, the onsite drives encourage human-to-human connections in the spirit of giving back, and ignite a life-long spirit of being a benefactor to the community.

Customers coming in to the grocery stores can contribute in two ways:  they can make monetary contributions, which the Milk Drive Team uses to purchase milk from the store, or  they can purchase the milk themselves and bring to the waiting Second Harvest Refrigerated Truck.

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Tennessee Agriculture has had a very difficult spring in 2018, dealing with price and market challenges in all sectors of agriculture, Dairy included.

With future consumers enthusiastic and connecting with farmers and industry leaders present, the 2018 TN June Dairy Month Kickoff served as a happy occasion to remind us all in the TN Dairy Industry to reflect:

So, “What’s Your Why?”

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Dean Foods to close 7 plants in 2018; No additional producer letters expected soon

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(NOTE:  This is an evolving story affecting Dean Plants across the country.  Sources are a variety of public information and anonymous sources.  Updates will be made as warranted).

Dean Foods will be closing 7 processing plants in seven states in the next months, with the plants located in Kentucky, Georgia, Pennsylvania, Massachusetts, Illinois, Michigan and Minnesota.

News of the plant closings began to emerge through local news outlets in some of the cities involved through the day Tuesday, May 22nd, yet, at this posting, there are yet no official statements from Dean Foods corporate officials.

This announcement follows the jolting announcement in early March that over 100 farmers in 8 states, marketing milk as Dean Dairy Direct (independent producers, meaning not members of a co-op or marketing agency) producers, would have their contracts terminated as of May 31, 2018.  At this point, many of those farmers have found new markets, several elected to disperse their herds, with several still struggling to find a market and income source for their farm’s milk.

The navigation of stormy, wind-tossed oceans of milk in the overflowing worldwide dairy milkshed has led to the announcement that these processing plants will be shutting their doors during the late summer and fall.   Intense competition to find a processing market/plant for milk, exacerbated by declining milk consumption the world over, has converged in a perfect storm of farmers getting caught in the crosshairs with no markets for their milk, along with employees in processing plants losing their jobs as well.

Competition for the prime retail real estate of grocery store shelf space is also a factor in these events.

In the southeast, the two Dean Foods plant closures at Braselton, GA and Louisville, KY follow the early May announcement of the closure of a Fulton, Ky plant, owned by Prairie Farms.  In that event, processing operations will cease, but the facility will remain a distribution center, with 12 of 52 employees remaining.

An anonymous Dean Foods source says that “no more farmer/producer contract terminations via letters from Dean Foods are expected in the near future.”  However, we all know that increasing consumption of fluid milk is the quickest way to stabilize the future of all dairy farms across America.

The Dean plants said to be closed are:

  1. (News report: not initially confirmed by Deans)
  2. (News report: Member of founding family not bitter) 
  3. News report:  (Processes gallons & half-gallons, 120 employees)
  • Braselton, GA [Mayfield brand]   (2015 Dean’s CEO Quality Award Recipient)    (Visitors Center closed in 2014, reopened, Over 1 million folks a year to learn) (Reports from anonymous employees who received notices)
  • Louisville, KY    [Dean’s brand] News report link to WKYT) “That loss will cut production at the company’s Louisville plant, which will shut down.”

This announcement is only one in a series of cost-cutting measures Dean Foods has taken over the past several years.  A PET milk plant in Richmond, VA was closed in the fall of 2017.   In a Food Business News report of March 1, 2018, phrases such as “increasing competition,’ ‘6% decline in volume,’ and ‘reset cost structure,’  were signals more changes are to come.

The Louisville plant closure comes as no surprise, due to its distribution overlap into Indiana of retail centers to be served from the new Walmart milk processing plant opening in Fort Wayne, IN.  However, the opening of that Walmart plant has now been pushed to late summer, for a variety of reasons.  A recent report by Sherry Bunting, which appeared in the Farmers Exchange, features an interview with a Walmart spokesperson on that project’s status.

The closure of the Braselton, GA, Mayfield plant, may have come as a bit of surprise to some folks.  In 2016, this display in the Visitor’s Center relayed some stats which were current at that time, however, today’s employee count is closer to 150.  It is not known if this includes distribution networks.

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Dean Foods, as of an annual Dairy Foods (magazine) report, last published in the August 2017 edition, is the United States second largest milk processor, with Nestle being #1.

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As is common with any company treading in difficult waters, reports of a sale of the company, or of a merger and acquisition, are commonplace.  Sometimes they prove to be nothing, sometimes they prove to be true, and only time will tell which is the case with Dean’s.  It truly will be in the best interest of the United States dairy industry for the company to stabilize, due to the number of farms for which it provides a market, and for the number of employees in plants across the country.

The hardest truth of all of this is that ultimately, farmers in local regions, the rural economies that depend on a viable market for those farmers, and employees at plants, are the ones suffering the most from battles at all levels of the worldwide milkshed. 

Updates, and corrections if needed, will occur as more news becomes available.

 

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Multiple Component Pricing for FMMOs 5 & 7; A Meeting, Action Plan, Information

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Will Multiple Component Pricing be implemented in the Appalachian (FMMO 5)  and Southeast (FMMO 7) Milk Orders?
Multiple Component Pricing, a way to value milk at the farm level based on components found in milk (protein, butterfat, and other non-fat solids),  rather than the skim/butterfat pricing currently implemented, is on the table for the two geographically largest milk orders in the Southeast United States.
Florida and Arizona do not price milk based on MPC, and those areas are not included in this current request for change.
An April 2nd request for a hearing to evaluate the implementation of Multiple Component Pricing for Federal Milk Marketing Order 5 (Appalachian) and FMMO 7 (Southeast) was filed with USDA-AMS by National All-Jersey, Inc.  The 86-page document can be reviewed here.
A great article concisely summing up the request and important factors has been written by Dave Natzke of Progressive Dairyman; read his perspective at this link.
The Tennessee and Kentucky Farm Bureaus have joined together to host an information meeting before the request for Multiple Component Pricing is fully evaluated; A Federal Order Hearing on the matter is tentatively scheduled for July 30, 2018
This May 16th meeting provides producers with a means of direct contact with FMMO officials who can explain not only the MCP proposal, but milk market pricing in detail, and how producers’ milk checks are affected by various market factors.
The details about this FB Information meeting, scheduled for May 16th in Knoxville, TN, are:
What:  Meeting with Dana Coale, Deputy Administrator for USDA -AMS Dairy Programs, along with several officials of Market Administrator Offices in Federal Orders 5 & 7
For:  Any dairy farmer in Federal Milk Marketing Orders 5 & 7
Organizers:  Meeting has been organized by TN and KY Farm Bureau organizations
Several state Farm Bureaus have been involved in dairy farm matters in the past few months – please give them a THANK YOU!)
Date: Wednesday, May 16, Knoxville TN  11:00 am
Time:  Sandwich Lunch @ 11 am; Lunch begins promptly at Noon EDT
Where: University of TN Ag Campus, Hollingsworth Auditorium. Plant Sciences Bldg.
             2505 East J. Chapman Drive; Knoxville, TN  37996
For:  Any dairy farmer in Federal Milk Marketing Orders 5 & 7
Purpose:  To discuss current market procedures and proposed market changes
RSVP / Register by May 11th: 
        Roxann Sanders – Email at rsanders@tfbf.com – OR
                                      Phone at 931-388-7872, ext 2231

The Invitation Letter and Announcement:

Jeff Aiken, TN Farm Bureau President, and Mark Haney, Kentucky Farm Bureau President, co-authored this meeting invite, which was also mailed to dairy producers:
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The Meeting’s suggested agenda:

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Following the announcement of these Knoxville, TN meetings, USDA-AMS has posted an “Action Plan” with a proposed calendar of activity related to Multiple Component Pricing.  Please note additional proposals can be accepted until June 1st!
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Resources for Additional Consideration  (Highly suggested reading!!!):

Multiple Component Pricing (MCP) first began taking place in the Federal Order System in the Great Basin Milk Marketing Order in 1988.  [The Great Basin Order is referenced in this 2002 testimony to a Western Milk Marketing Order Hearing.]
Since that time, several orders have consolidated, but the great majority of the United States dairy producers are paid on a MCP basis.  At this time, this map generally defines the geographic locations of FMMOs across the United States, however, California was conducting a producer referendum, in which voting ended on May 5th to finalize entry into the Federal Order System:
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Producer groups in the southeast, including the Kentucky Dairy Development Council, the Georgia Milk Producers Association, and the North Carolina Dairy Producers, have endorsed a Multiple Component Pricing structure.  The Tennessee Dairy Producers Association is currently opposed (as of May 10th).
Each and every producer should take the time (and it may take a few hours) to evaluate Component Pricing and how it will affect your farm’s income in the future!  Isn’t your farm’s future worth that time?
AND – each producer is highly encouraged to attend the May 16th meeting in Knoxville to have a chance to ask direct questions to USDA-AMS officials.
Your future income depends on accurate information – please make the most of this meeting opportunity!
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3 Southeast Dairy Events: Networks Working Together to Find Solutions

A Compilation of stories and news about 3 challenges affecting Southeast Dairy Producers:  Dean Foods, Maryland-Virginia and Piedmont

 Southeast Dairy:  In the News. Pushing Forward.
 
Introduction:
In the past two weeks, in a time of already depressed milk prices, there has been a three-fold challenge to dairy farms in the southeast.  Tennessee, Kentucky, Virginia, and North Carolina all have farmers affected, with varying degrees of uncertainty about their milk buyer futures.
To say these past days have been painful and a flurry of concern, high emotions, and rumor mills have resulted is an understatement, but yet, as the dust settles, some activity has encouraged some hope, and herd owners are beginning to look forward. Many are making decisions based on faith, and in a calm fashion based on what they believe best for their farm. Some of those farms are being public, while others are remaining cautious and quietly seeking answers behind the scenes.
Bright Spot? Yes!   One farmer asked if there was going to be any good news to share about this whole mess, and yes, actually, there are two:
First, phone calls, texts, and Social Media outcries have indicated loudly and clearly that consumers, government officials, fellow farm organizations, and economic development personnel are indeed concerned about preserving ‘local’ or ‘regional’ milk in their areas, and appear to be eager to learn how they can help accomplish that.
Hopefully, this newfound energy can be channeled for long-term purchases of local milk, from local farms.  Time will tell. Consumer outreach is going to have to continue.
The second is this:  We still have upwards of 40 herds (at least in TN) shipping to Dean. The company is still the largest volume buyer of ‘local’ milk in TN at its three plants.  Putting that in perspective, every Dean Direct herd in Indiana,  with the exception of one, received letters of notice. Several were herds well over 1000 cows.
Background:  The three part challenge:
1.) Dean Foods:  On Friday, March 2, news broke of upwards of 115 (tallies still underway) farmers in 8 states receiving 90-day termination notices of their supply agreements to Dean Foods plants.  10 Tennessee herds and 22-25 Kentucky herds were affected, with 25-27  in Indiana, 42 in Pennsylvania, 6 in the Carolinas, and a yet unknown number in New York.  Three plants in our area – at Athens, TN, Spartanburg, SC, and Louisville, KY are involved in the contract termination decisions.   Herd sizes in all states range from under 100 to 1000 cows; 20 Million pounds of Indiana milk will need to find a new home, or be removed from the already overabundant nationwide supply.
The herds involved were Dean Direct producers, meaning the farm itself had a purchase agreement with Dean Foods plants, instead of gaining access to the plant through a milk co-op. Farmers who were members of co-ops did not receive these termination letters.  All of this activity followed a Dean Foods Earnings Announcement on Monday, Feb. 26 in which the phrases such as ‘rescaling the supply line’ foretold of company wide cuts to come.
2.)  During:  the week prior to the Dean Foods announcement, rumors began to circulate that Piedmont Milk Producers, based in Blountville, TN and serving farms in TN, VA, and NC,  was restructuring their business. (Story below with a video link)
3.)  MD-VA Milk Cooperative with 1,500 members from Pennsylvania to Florida, and some in Kentucky and Tennessee, sent a Feb. 27th letter to all of its members that their advance milk payment checks, expected at the end of the month, would fall to levels of $12.62 cwt in FO 5 & 7, and $10 in FO 1 and $33. The company said it was working on financial restructuring and was renegotiating credit facilities. Over the weekend, sources have begun to indicate that the problems may have been resolved to some degree, but the company has not made any official announcements. With settlement checks expected within a couple of days, some direction will be known.
In the days since, there has been a flurry of activity following the first notices: meetings of  farmers, meetings of farmers and agribusiness personnel, meetings of dairy organizations, and frequent phone calls between many parties in positions to help chart a future course.  AgCentral has been busy assisting producers in a variety of ways in a three-state area. While we have yet to have a formal working group to address what can be done and how to approach a dairy future, a tremendous amount of contacts have been made information gathered.
Following is a “Digest” of some the best information available, in no particular order – stories mentioned include stories of the Watsons and the Stooksburys, as well as a couple of stories from Ohio which further outline the far-reaching affects of the Dean announcements:
1.) Dave Natzke, an experienced and respected dairy industry reporter, now with Progressive Dairyman, published a broad perspective view of the Dean Foods story, and puts it in context with the dairy industry and events across the country. In his article, Dave reports that the Walmart plant was originally announced as a $165 Million Dollar venture, and provides a glimpse into how the Walmart plant may source their milk.
2.) Sherry Bunting, Farmshine, reports with a focus on PA, where 42 herds lost Dean contractsShe notes hauling routes were a factor in terminated Pennsylvania herds, and reports the loss of a Food Lion contract, which was a factor which triggered a decision regarding 5 TN herds in Greene and Hamblen Counties.
From the article: “This affects all size herds and is not a large or small farm thing,” said [Reace] Smith, [of Dean Foods Corporate Communications.]  While she was unable to supply specific information about the farms that were terminated, she said the widespread volume adjustments at multiple plants across four Federal Orders was necessary do to the new Class I plant (Walmart) coming online this month and the loss of a contract through a competitive bidding process. (Food Lion).” 
It is the loss of that Food Lion contract, previously filled largely through a Carolina plant(s), which created a shift in milk hauling from plant to plant, and created an excess at the Dean/Pet plant at Spartanburg, SC, which had to be eliminated.  The milk from five (5) producers in Hamblen and Greene Counties in TN was being hauled to Spartanburg. Those producers are now searching for new markets or making decisions to sell cows.
Dewey Morgan, of the Daily Post-Athenian, in the hometown of the Mayfield plant,  cites these significant stats:
Regarding declining consumption and increased production: “Americans are drinking about 3 gallons less per person since 2010, and 11 gallons less than 1975, while every year, 350 Million more gallons of milk are produced than the year before.”
Amount of local milk: The Dean Foods plant in Athens ‘still sources 90% of our milk from Tennessee.’
The Watson Family: their stories on WVLT-TV and on the Knoxville News-Sentinel website:
The Watsons, who farm near Sweetwater, TN, were one of the southeast TN farms who received 90-day notices.  The senior generation is Robert and Rosemary Watson (mom and dad), who farm with their sons Josh and Caleb.  The family is known for being extremely generous members of their community.  Both Josh and Caleb have been featured in news stories in Knoxville, TN media:
  •  Josh: From WVLT-TV, a story and video clip: Josh states that he doesn’t entirely blame Dean Foods. He adds: “there’s a lot of jobs that revolve around the dairy – it will hurt them.”
  • Caleb: Both a video and a photo album have been posted at the Knoxville Sentinel website. Caleb notes the family will continue to look for a milk buyer, and will look at other options to diversify, he says they will survive.
  • Front Page: The Knoxville News Sentinel published a front page story featuring Caleb on Tuesday, March 13.
Piedmont considering new business structure and how the company operates: story on Knoxville WBIR-TV
  • Brant Stooksbury, and his father Brian in Jefferson County, currently ship their milk through Piedmont Milk Sales, with offices at Blountville, TN. Piedmont, who represents farms in Northeast TN, Virginia, and North Carolina (the great majority are in NC) is making business changes.
 
Farm & Dairy:  Provides additional details on  WalMart distibution
WKBN-TN at Waynesboro, Pennsylvania – a video story describing some of the trickle down effects.
Ongoing:  This story will continue to evolve over the next few weeks, and spring crop work is already cranking up.  We know this challenge is great, but this region has overcome challenges before: at this time 25 years ago, many of us were digging out from a record blizzard, and some went without power for days. 27 years ago, in February of 1991, 400 herds received notices of a Pet bankruptcy, and lost a month’s worth of milk payments, along with having to scramble to find new milk handlers – there were no 90-day notices.
No doubt, our dairy industry is changing, but we have proven we can survive.
P.S.   Rod Carmichael has scheduled a complete herd dispersal for April 27.  Please mark that date on your calendars and keep Rod and Donna in your thoughts.