USDA Announces Improvements to the Dairy Safety Net and New Pandemic Market Volatility Assistance Program

First steps in over $2 billion package of assistance for dairy farmers
Burlington, VT, Aug. 19, 2021 — The U.S. Department of Agriculture (USDA) today announced the details of the Pandemic Market Volatility Assistance Program as part of meetings with farmers and a tour of farms with Senator Leahy. In June, Secretary Vilsack committed to providing additional pandemic assistance for dairy farmers in an exchange at a hearing with Senate Appropriations Committee Chairman Leahy. Through the program, USDA will provide about $350 million in pandemic assistance payments to dairy farmers who received a lower value for their products due to market abnormalities caused by the pandemic. The assistance is part of a larger package including permanent improvements to the Dairy Margin Coverage safety net program.

“The Pandemic Market Volatility Assistance Program is another component of our ongoing effort to get aid to producers who have been left behind and build on our progress towards economic recovery,” said Agriculture Secretary Tom Vilsack. “Family dairy farmers have been battered by the pandemic, trade issues and unpredictable weather and are the life-blood of many rural communities throughout Vermont, the Northeast and many other regions. This targeted assistance is the first step in USDA’s comprehensive approach that will total over $2 billion to help the dairy industry recover from the pandemic and be more resilient to future challenges for generations to come.”

Senator Patrick Leahy (D-Vt.), the chairman of the Senate Appropriations Committee and the senator with the most seniority on the Agriculture Committee, said: “I thank Secretary Vilsack for directing this assistance to small dairies in Vermont and across the country, just as he told me he would when we spoke earlier in the summer. This will help to make up for losses suffered by these family farms due to the pandemic and together with the positive adjustments to the Dairy Margin Coverage Program will be good news for farmers go into the fall.”

Under the Pandemic Market Volatility Assistance Program, payments will reimburse qualified dairy farmers for 80 percent of the revenue difference per month based on an annual production of up to 5 million pounds of milk marketed and on fluid milk sales from July through December 2020. The payment rate will vary by region based on the actual losses on pooled milk related to price volatility. USDA will make payments through agreements with independent handlers and cooperatives. Handlers and cooperatives will distribute the monies on the same basis July – December 2020 payments were made to their dairy farmer suppliers and a formula set by USDA. USDA will reimburse handlers and cooperatives for allowed administrative costs.

USDA will contact eligible handlers and cooperatives to notify them of the opportunity to participate in the Program. USDA will distribute payments to participating handlers within 60 days of entering into an agreement. Once funding is provided, a handler will have 30 days to distribute monies to qualifying dairy farmers. As part of the program, handlers also will provide virtual or in-person education to dairy farmers on a variety of dairy topics available from USDA or other sources. A handler will have until March 1, 2022 to directly provide educational opportunities to dairy farmers.

Additional details about the program are available and will be updated at the AMS Dairy Program website.

The program is part of $6 billion of pandemic assistance USDA announced in March to address a number of gaps and disparities in previous rounds of assistance. Other pandemic assistance to dairy farmers includes $400 million for a new Dairy Donation Program to address food insecurity and mitigate food waste and loss; and $580 million for Supplemental Dairy Margin Coverage for small and medium farms.

Outside the pandemic assistance, USDA will also make improvements to the Dairy Margin Coverage safety net program updating the feed cost formula to better reflect the actual cost dairy farmers pay for high quality alfalfa. This change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021. Unlike the pandemic assistance, this change will also be part of the permanent safety net and USDA estimates it will average about $80 million per year or approximately $800 million over ten years for dairy headed into the upcoming Farm Bill. Full details on these additional actions to support dairy farmers will be provided when regulations are published in the coming weeks. Dairy farmers should wait until these details are available to contact their local USDA Service Center for more information.

Geri Berdak named new CEO of The Dairy Alliance

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Via an email announcement from Glen Easter, the President of The Dairy Alliance, the southeast dairy organization has named Geri Berdak, as their new CEO.
She has previously worked with the St Louis Dairy Council, and was with the Dairy Innovation Center at DMI from 2012-15.
Following is the complete announcement:
“We are pleased to announce that after a nationwide search by Fred Pabst with the search firm Herd Freed Hartz, The Dairy Alliance board has selected a new CEO, Geri Berdak, who will be starting September 1, 2020.
 
“Geri is an executive known for delivering strategic growth for non-profit organizations, CPG and ingredient companies in the wellness marketplace. She holds unique combination of nutrition, marketing and business aptitude and a genuine passion improving people’s lives. Her professional experience in the dairy industry started with her position as a nutritionist and educator for the St. Louis Dairy Council.  
 
She has extensive knowledge in the food and beverage industry holding positions with PepsiCo, Kerry’s, Isagenix, and served as Senior VP, Nutrition Strategy and Business Development with the U.S. Dairy Innovation Center at DMI from 2012-2015. Most recently she created the Cloverquest Group LLC, a marketing consulting group in Chandler, AZ.

Geri has an Master’s of Business Administration from New York Institute of Technology and a Bachelor of Science in Food & Nutrition from Missouri State University.

Our interim CEO, Molly Szymanski, will work closely with Geri to ensure a smooth transition.”

The Dairy Alliance is a dairy promotion organization based in Atlanta, Georgia.  The organization is funded by checkoff monies which are deducted from the milk checks of dairy farmers.
Ms. Berdak can be found on Twitter with the handle of @nutriagirl.
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Borden Dairy Sale: New Dairy Opco, LLC (Engles/Capitol Peak & KKR) wins bid, received Court approval June 26

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UPDATE – June 26 2020: US Bankruptcy Court, District of Delaware, Approves Sale to Capitol Peak and KKR

Engles, (Capitol Peak, Previous Dean CEO) partners with KKR & Co. for Successful Bid

Borden Dairy, and its beloved icon, Elsie, have new owners.
Early on the afternoon of June 15, 2020, New Dairy Opco, LLC, was announced as the winning bidder for Borden Dairy Company and its assets, 5 months after Chapter 11 was filed on January 5, 2020.  A notice was posted on the website filing the Borden Chapter 11 Documents for the US Bankruptcy Court of Delaware, and is included below.
A Sale Hearing has been scheduled for Thursday, June 18, 2020 by the Bankruptcy Court. A series of hearings and court activity, dictated by Rules of Federal Court, will take place in the following weeks before a sale is final.
New Dairy Opco, LLC, is an entity comprised of  KKR and Co., a US-based global investment firm, and Capitol Peak Partners, founded by Gregg Engles, a previous Dean Foods CEO.  A Declaration entered on the Court’s docket on June 20, Docket #879, lists that Colin Murphy is the secretary of New Dairy Opco, which is commonly referred to as New Dairy.
GH Acquisition, LLC, and Prairie Farms Dairy, LLC, were announced as the next highest bidders.
This is a breaking news story, and more details will emerge going forward.
This change in ownership will set a new stage for dairy co-ops and independent dairy farms selling milk to the Borden plants, and hopefully provide more certainty to farmers of markets going forward.
 

The Sale Notice as it appeared on the Court’s Docket:

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New Dairy Opco, LLC, became official as a Delaware corporation on June 1, 2020.
According to a Bloomberg report by Jeremy Hill and Isis Almeida, which doesn’t name sources, New Dairy Opco, LLC, is a joint effort of Capitol Peak Partners, headed by Gregg Engles (a previous CEO of Dean Foods), and KKR, said to be the world’s 2nd largest private equity firm.  KKR had been prominently mentioned in the Borden bidding per the filings on the court docket.
In the late stages of the Dean Foods Chapter 11 process, KKR and Borden, along with some other financial entities, offered an alternative plan to the sale of Dean Foods to Dairy Farmers of America (DFA).

The Bloomberg story in its entirety, as first published at 2:20 pm on June 15th (the story has since been updated – see link above):

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Background & Additional Resources:

General: Borden Fact Sheet – Summary: Borden has 12 plants, 91 branches, has 3,300 employees. The plants operate mostly in the southeast, somewhat in a crescent from Charleston, SC to Florida to Texas.  The Fact Sheet also lists plants in Cleveland, OH, and London, KY.

17 June 2020, 2:30 pm: KKR, Former Dean Foods CEO win bid to buy Borden Dairy Co. in Bankruptcy Court;  by Colleen Kotke for the Wisconsin State Farmer,
15 June 2020, 6:01 pm:  Capitol Peak Partners, KKR Win Bankruptcy Auction for Bordenposted at Morningstar, provided by Dow Jones
15 June 2020, 6:29 pm:  KKR, Former Dean Foods CEO win Auction for Borden Dairy Five Months After Bankruptcy Filing, by Natalie Walters for the Dallas Morning News
26 May 2020, 7:00 am: For a Second Time in Borden’s 163-year History, A Government Contract Could Propel it Through Crisis, by Natalie Walters, for the Dallas Morning News

Look for new developments as the story evolves.

 

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Beringause, Dean Foods: “It is time we stood up for the Dairy Industry, for our nation’s Dairy Farmers . . .”

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In a bold move, the largest processor and direct store distributor of fluid milk in the United States has decided to leave its membership in the International Dairy Foods Association (IDFA), due to differences of opinion with the organization on the labeling of plant-based beverages.

Announcing their decision, Dean Foods issued the following statement: 

“Dean Foods has been a strong supporter of the International dairy Foods Association (IDFA) for many years, however, we have reached a point where one of our key priorities is no longer shared by the entire IDFA organization.  More specifically, as one of the largest dairy processors in the country, we are proud of the role we play in providing one of the most nutritious products in the grocery store – milk – to consumers around the nation.  With this in mind, we believe it is wrong that many plant-based products are currently marketed using milk’s good name, yet are lacking several of the inherent nutrients of their dairy counterparts. Unfortunately, IDFA has been unable to reach consensus and take a stance on this important issue.”

“As a result, we have decided that we can no longer financially support an organization that is not behind one of our core priorities We’ll instead divert our advocacy resources to pursuing accurate product labeling for the benefit of the dairy industry, including farmers, processors, and consumers around the country. We have appreciated IDFA’s support over the years and wish the organization and its member companies the best.”

 

Eric Beringause,  Dean Foods President and CEO, stated the following:

“There are plant-based products called “milk” on grocery store shelves today that don’t include a single drop of dairy.  Even worse, consumers are being misled into believing that these imitation products are as healthy as their dairy counterparts. It is time we stood up for the dairy industry, for our nation’s dairy farmers, for the integrity of our milk products, and for the families who rely on them for adequate nutrition.

We’re exploring every potential avenue for ensuring imitation products are labeled properly, and we welcome others to join us in this effort.”

 

Beringause, who assumed the reins as CEO of Dean Foods on July 29, came with the reputation of having a record of transformation.  In an industry crying for a renewal of sales for ‘nature’s most nearly perfect beverage,’ this decision may be a step in restoring real milk’s identity and reducing consumer confusion.

This move should be well-received by thousands of dairy farmers and industry stakeholders who have been demanding proper labeling of dairy products for years, and who have been seeking a ‘big-player’ advocate with an even bigger voice.

Dean Foods, on behalf of the nation’s dairy farm families, we look forward to working with you to advance the cause of proper labeling in keeping with standards of identity.

 

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