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Terry Etherton

I attended a dairy producer meeting in Breese, Illinois on December 18, 2006. It was an excellent meeting that was organized by two producers, Boyd Schaufelberger and Frank Doll. Over 100 producers attended the meeting. The meeting was prompted by the recent public discussion surrounding recombinant bovine somatotropin (rbST)-free milk and truth-in-labeling. I have written previous articles on this topic, and the reader is directed to these for an in-depth analysis.

Ed Mullins, the CEO and Executive Vice President of Prairie Farms dairy cooperative in Carlinville, Ill. told the group “We’re not trying to stop the technology you are using. But we have a huge consumer base that’s asking for rbST-free milk.” (Later, he acknowledged that about 10 percent of the Prairie Farms’ consumer base is either demanding rbST-free milk or would like to know when rbST-free milk will be available to them.)

Mr. Mullins’s comments are very interesting and illustrate how some in the dairy industry are framing consumer demand to position the idea that there is a growing market for this product. The facts are that there is no up-tick in consumer demand (see a recent IFIC Consumer Survey on Biotechnology). One important aspect of this “increased demand” claim is that it is a strategy where some retailers/processors are trying to create another category of milk at a different, and higher, price point than conventional milk, and using “consumer demand” as the ploy!

The resulting array of milk products available in your dairy case is conventional, rbST-free and organic milk. Compared to conventional milk, the latter two product lines sell for a premium that varies nationally from about $.40 to $2.20 per gallon (for rbST-free milk) and $3.00 to $5.00 per gallon (for organic milk).

The other aspect of this retail ” increased demand” relates to some processors/retailers who cave to pressure from a small, vocal cohort of anti-ag/anti-biotech activists who criticize hormones in milk. A consequent effect is these processors/retailers promote rbST-free milk, and put the squeeze on producers to stop using the production-enhancing rbST so that they can label their product as “non-rbST” and sell it for a lot more. So, we are back to the old story of all milk being the same from a composition and safety perspective; however, milk labeled as rbST-free or organic is being sold at a much higher price!

But the fear marketing continues. I just saw an organic AND rbST-free labeled milk product in the dairy case that touted “no antibiotics, artificial hormones or pesticides”. To some consumers this conveys that other milk just might contain these components. This infers that the product is not safe. This is nonsense!

The IFIC survey mentioned above clearly demonstrates that few consumers are concerned about biotechnology - their primary concerns relate to disease/food contamination and food handling/preparations methods used (see Figure 1).The producer meeting in Illinois concluded with the recognition that the dairy producers in America need to become proactive to represent their interests in the marketplace, hold management of cooperatives accountable for their actions, and become an active participant in consumer education campaigns about biotechnology in agriculture and the food system we have built, which is one of the greatest accomplishments in our society - and in the world.

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Important science-based evidence from Dr. Dale Bauman, Cornell University: Growth hormones exist naturally in a dairy cow and in the milk she produces. The hormone, called bovine somatotropin (bST) or bovine growth hormone (bGH), is a determining factor in how much milk the cattle can produce. Read the full article at MSN…

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Facts about Insulin-Like Growth Factor I (IGF-I) by Dr. Dale E. Bauman, Cornell University Full text of IGF-I Fact Sheet…

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Transcript: Milk Marketing and $5 Billion

Terry Etherton

Any idea how much money has been collected by the producer and processor dairy promotion programs? Since the implementation of the Producer Dairy Promotion Program in 1984 more than $5 billion has been collected! The National Fluid Milk Processor Promotion Program became effective in 1993. In 2005, annual revenue from assessments for the latter program was in excess of $107 million. Collectively, these are staggering amounts of money that have been collected from producers and processors!

The Producer Dairy Promotion Program is funded through a mandatory 15-cent per hundredweight (CWT) assessment on milk produced in the contiguous 48 States, and marketed commercially. A dime of the 15¢ goes to state/regional promotion boards, and the nickel goes to DMI (Dairy Management Inc.). To add an additional perspective, the two leading dairy states in the Northeast, PA and NY, each get more than $10 million dollars per year from the Producer Dairy Promotion Program.

The Fluid Milk Promotion Program is funded by a 20-cent per CWT assessment on fluid milk processed and marketed in consumer-type packages in the contiguous 48 States. The assessment is charged to processors who market more than 3 million pounds of fluid milk per month, and excludes those fluid milk products delivered to the residence of a consumer.

It is clear that a lot of money is collected from America’s milk processors and dairy farmers for promotion purposes. Many would agree that these programs have been hugely successful in raising the awareness of the many benefits of milk, in making it more acceptable and popular with kids, and in helping to stop the overall decline in per capita milk consumption.

Given all of this, then why are some processors and marketers “denting” the brand name of milk that has been built by the dairy industry using an investment in the BILLIONS of dollars? There are processors and others in the dairy marketing sector who are actively participating in a “good milk versus bad milk” milk marketing business, where “good” is rbST-free milk and “bad” is conventional milk. A dairy in New York, that shall remain nameless, touts a label on their milk carton “Certified to come from cows NOT TREATED WITH rBST”. Others are touting organic as the product to consume. None of these various products differ on quality or wholesomeness basis. However, that is not the point. A key factor driving a lot of this nonsense is that rbST-free or organic milk sell at a premium to conventional milk on the grocery store shelf.

It is incredulous that there are those in the dairy industry who are actively undermining the HUGE investment that has been made with checkoff funds by differentiating the same milk into multiple product niches, and touting some while vilifying another. As I have written on my Blog, the only REAL difference among conventional milk, rbST-free milk or organic milk is the PRICE. Jane Shank Stiles in a Viewpoint article in the November 13 2006 issue of Feedstuffs captured this “as payingmore for nothing”. What a way to manage our long-term investment! Is this the image of the dairy industry that we want to feature? I think not.

The anti-bST attack launched by some milk marketers is not only dishonest but plays into the hands of the anti-agriculture and anti-animal activists groups. My hope is that the dairy producers and processors of America will “step up to the plate” to do the right thing, and protect the benefits that have been obtained from investing BILLIONS of DOLLARS since 1984!

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Comments are closed.

Terry Etherton

I attended a dairy producer meeting in Breese, Illinois on December 18, 2006. It was an excellent meeting that was organized by two producers, Boyd Schaufelberger and Frank Doll. Over 100 producers attended the meeting. The meeting was prompted by the recent public discussion surrounding recombinant bovine somatotropin (rbST)-free milk and truth-in-labeling. I have written previous articles on this topic, and the reader is directed to these for an in-depth analysis.

Ed Mullins, the CEO and Executive Vice President of Prairie Farms dairy cooperative in Carlinville, Ill. told the group “We’re not trying to stop the technology you are using. But we have a huge consumer base that’s asking for rbST-free milk.” (Later, he acknowledged that about 10 percent of the Prairie Farms’ consumer base is either demanding rbST-free milk or would like to know when rbST-free milk will be available to them.)

Mr. Mullins’s comments are very interesting and illustrate how some in the dairy industry are framing consumer demand to position the idea that there is a growing market for this product. The facts are that there is no up-tick in consumer demand (see a recent IFIC Consumer Survey on Biotechnology). One important aspect of this “increased demand” claim is that it is a strategy where some retailers/processors are trying to create another category of milk at a different, and higher, price point than conventional milk, and using “consumer demand” as the ploy!

The resulting array of milk products available in your dairy case is conventional, rbST-free and organic milk. Compared to conventional milk, the latter two product lines sell for a premium that varies nationally from about $.40 to $2.20 per gallon (for rbST-free milk) and $3.00 to $5.00 per gallon (for organic milk).

The other aspect of this retail ” increased demand” relates to some processors/retailers who cave to pressure from a small, vocal cohort of anti-ag/anti-biotech activists who criticize hormones in milk. A consequent effect is these processors/retailers promote rbST-free milk, and put the squeeze on producers to stop using the production-enhancing rbST so that they can label their product as “non-rbST” and sell it for a lot more. So, we are back to the old story of all milk being the same from a composition and safety perspective; however, milk labeled as rbST-free or organic is being sold at a much higher price!

But the fear marketing continues. I just saw an organic AND rbST-free labeled milk product in the dairy case that touted “no antibiotics, artificial hormones or pesticides”. To some consumers this conveys that other milk just might contain these components. This infers that the product is not safe. This is nonsense!

The IFIC survey mentioned above clearly demonstrates that few consumers are concerned about biotechnology - their primary concerns relate to disease/food contamination and food handling/preparations methods used (see Figure 1).The producer meeting in Illinois concluded with the recognition that the dairy producers in America need to become proactive to represent their interests in the marketplace, hold management of cooperatives accountable for their actions, and become an active participant in consumer education campaigns about biotechnology in agriculture and the food system we have built, which is one of the greatest accomplishments in our society - and in the world.

Permalink

Comments are closed.

Important science-based evidence from Dr. Dale Bauman, Cornell University: Growth hormones exist naturally in a dairy cow and in the milk she produces. The hormone, called bovine somatotropin (bST) or bovine growth hormone (bGH), is a determining factor in how much milk the cattle can produce. Read the full article at MSN…

Permalink

Comments are closed.

Facts about Insulin-Like Growth Factor I (IGF-I) by Dr. Dale E. Bauman, Cornell University Full text of IGF-I Fact Sheet…

Permalink

Comments are closed.

Listen

RSS Feed

To see a transcript, follow the link below:

Transcript: Milk Marketing and $5 Billion

Terry Etherton

Any idea how much money has been collected by the producer and processor dairy promotion programs? Since the implementation of the Producer Dairy Promotion Program in 1984 more than $5 billion has been collected! The National Fluid Milk Processor Promotion Program became effective in 1993. In 2005, annual revenue from assessments for the latter program was in excess of $107 million. Collectively, these are staggering amounts of money that have been collected from producers and processors!

The Producer Dairy Promotion Program is funded through a mandatory 15-cent per hundredweight (CWT) assessment on milk produced in the contiguous 48 States, and marketed commercially. A dime of the 15¢ goes to state/regional promotion boards, and the nickel goes to DMI (Dairy Management Inc.). To add an additional perspective, the two leading dairy states in the Northeast, PA and NY, each get more than $10 million dollars per year from the Producer Dairy Promotion Program.

The Fluid Milk Promotion Program is funded by a 20-cent per CWT assessment on fluid milk processed and marketed in consumer-type packages in the contiguous 48 States. The assessment is charged to processors who market more than 3 million pounds of fluid milk per month, and excludes those fluid milk products delivered to the residence of a consumer.

It is clear that a lot of money is collected from America’s milk processors and dairy farmers for promotion purposes. Many would agree that these programs have been hugely successful in raising the awareness of the many benefits of milk, in making it moreacceptable and popular with kids, and in helping to stop the overall decline in per capita milk consumption.

Given all of this, then why are some processors and marketers “denting” the brand name of milk that has been built by the dairy industry using an investment in the BILLIONS of dollars? There are processors and others in the dairy marketing sector who are actively participating in a “good milk versus bad milk” milk marketing business, where “good” is rbST-free milk and “bad” is conventional milk. A dairy in New York, that shall remain nameless, touts a label on their milk carton “Certified to come from cows NOT TREATED WITH rBST”. Others are touting organic as the product to consume. None of these various products differ on quality or wholesomeness basis. However, that is not the point. A key factor driving a lot of this nonsense is that rbST-free or organic milk sell at a premium to conventional milk on the grocery store shelf.

It is incredulous that there are those in the dairy industry who are actively undermining the HUGE investment that has been made with checkoff funds by differentiating the same milk into multiple product niches, and touting some while vilifying another. As I have written on my Blog, the only REAL difference among conventional milk, rbST-free milk or organic milk is the PRICE. Jane Shank Stiles in a Viewpoint article in the November 13 2006 issue of Feedstuffs captured this “as paying more for nothing”. What a way to manage our long-term investment! Is this the image of the dairy industry that we want to feature? I think not.

The anti-bST attack launched by some milk marketers is not only dishonest but plays into the hands of the anti-agriculture and anti-animal activists groups. My hope is that the dairy producers and processors of America will “step up to the plate” to do the right thing, and protect the benefits that have been obtained from investing BILLIONS of DOLLARS since 1984!

Permalink

Comments are closed.