Are You Interested in Key Economic Stats Pertaining to the Dairy Industry?

We have gatherd information for you about the Dairy Industry sourced directly from the U.S. Census Bureau. They produced the U.S. Bureau of Economic Analysis on U.S. International Trade in Goods and Services updated as of  May 2020, and we thought you might want to take a peak!

Click here to learn more about how Covid_19 has impacted the Economics of U.S. Dairy Goods & Services!

If you are interested in Dairy Product Manufacturing Statistics or Values of Shipments specifically, than click here to learn more! 

Click here to read the most recent reports about imports & exports in trade within the Dairy Industry. 

"Leprino Foods, one of the nation’s leading suppliers of cheese to pizza companies, approached DMI leadership to address a surplus of cheese as restaurants across America were shut down."

There is nothing like the resiliency of pizza. It more than weathered everything that came its way during the COVID-19 pandemic, not only surviving but outselling any other foodservice category in this recent period.

Pizza has always been a shining star for dairy farmers because of what it gives back to us. About 25 percent of all cheese that moves through the foodservice channel is via a piping-hot pie. 

It’s simple: for cheese to succeed, pizza must succeed.

This is the premise for why the checkoff partners with the top two pizza companies, Domino’s and Pizza Hut. The collaboration that has occurred between the dairy checkoff and these major companies has changed the way consumers perceive the product and has raised the stakes for other companies in the category. This is what we call the “catalytic” effect, meaning others follow our partners’ lead to innovate at no cost to the checkoff.

Because of the success of our partnership model, a great opportunity came our way during the pandemic that will make a difference to farmers. Leprino Foods, one of the nation’s leading suppliers of cheese to pizza companies, approached DMI leadership to address a surplus of cheese as restaurants across America were shut down. A meeting followed with Papa John’s, which resulted in the chain agreeing to add 2 ounces of extra mozzarella cheese on several of its menu offerings.

Papa John’s is covering half of the cheese cost while Leprino and Dairy Farmers of America are paying the other half. DMI is providing funding to help market and advertise the effort, which began April 15 and concludes Aug. 31.

Relationship building

I’d be willing to bet that this scenario may not have played out had DMI not experienced years of success with Domino’s and Pizza Hut. It also may not have happened had DMI not forged a relationship with Leprino long ago through the Innovation Center for U.S. Dairy that we founded through our checkoff to unite the entire industry.

Strong relationships and successful partnerships are the cornerstone of the checkoff’s business plan. We’d never be able to do many of these efforts alone as our checkoff dollars can only take us so far. But thanks to our strategy of working “with and through” others, we can do the things that need to be done.

This also is why we made national headlines with our recent Pizza Hut promotion that gave away 500,000 pizzas to graduating high school seniors. The effort to tap into “missed moments” for these students was announced May 21 on The Tonight Show Starring Jimmy Fallon, who credited “America’s dairy farmers” for helping to make this happen. It truly became a pop culture moment with the segment reaching more than 2 million viewers and a potential 45 million more through the show’s social media channels.

Media outlets across the country, such as People, Newsweek, Yahoo and Business Insider, covered the news, hailing it as a feel-good moment during a troubled time. And JuJu Smith-Schuster of the Pittsburgh Steelers brought NFL star power with social media posts (Twitter) and an appearance on NFL Network’s “Good Morning Football,” giving a shout out to hard-working dairy farmers.

The promotion was a smash hit with students. Pizza Hut was showered with an immediate 200,000 downloads of the coupon via its Hut Rewards program and it was forced to put the effort on pause so franchisees around the U.S. were not overwhelmed. When the promotion resumed three days later, it only took a matter of hours for the remaining 300,000 pizzas to be claimed.

The good news for Pizza Hut – and the dairy industry – is that 60 percent of the graduates who claimed the pizza are first-time Hut Rewards members.

It likely is no coincidence that Pizza Hut reported its best week for delivery and carryout average sales in eight years in May and same-store sales improved to the “low teens,” according to a Yum Brands report. Same-store sales for the quarter are up 15 percent for those focusing on carryout and delivery.

More than partners

I often tell farmers that our partners are more than just business associates. It goes deeper to where we understand one another’s cultures and we value all that we have in common. We care about the success of our respective businesses and here is one more example of that. Pizza Hut planned to launch its “3-Topping Stuffed Crust” this fall. The pizza uses close to twice the amount of cheese as a regular pie. However, the chain is putting the pizza into the marketplace now, knowing additional cheese sales will help our industry. This is an exciting promotion that we all need to keep an eye on.

It’s been easy to sometimes get lost in the moment of all that has gone on in our world and how life has changed. Our dairy industry has not been excluded, but I often pause to appreciate our partners and our checkoff teams, nationally and locally, that have been at our side through it all.

I applaud the teamwork, the vision, the hard work and the passion that is helping us through the days and showing us that brighter times are ahead for our industry.

Click here to read the original article! 

June 2020

“National Dairy Month started out as National Milk Month in 1937 as a way to promote drinking milk. It was initially created to stabilize the dairy demand when production was at a surplus, but has now developed into an annual tradition that celebrates the contributions the dairy industry has made to the world. After the National Dairy Council stepped in to promote the cause, the name soon changed to ‘Dairy Month.”

National Dairy Month is a great way to start the summer with nutrient-rich dairy foods. From calcium to potassium, dairy products like milk contain nine essential nutrients which may help to better manage your weight, reduce your risk for high blood pressure, osteoporosis and certain cancers. Whether it's protein to help build and repair the muscle tissue of active bodies or vitamin A to help maintain healthy skin, dairy products are a natural nutrient powerhouse. Those are just a few of the reasons that you should celebrate dairy not just in June, but all year long.

From the International Dairy Foods Association

Vietnam lowers dairy tariffs, benefiting U.S. exports.

"Most tariffs on dairy products and ingredients will decrease by 50% or more." 

Vietnam signed a decree unilaterally lowering tariffs on key dairy products and ingredients, including skim milk powder, whole milk powder, cheese, milk albumin and protein isolate. The decree goes into effect on July 10, according to the Arlington, Va.-based U.S. Dairy Export Council (USDEC). Most tariffs on dairy products and ingredients will decrease by 50% or more. USDEC said it received confirmation on May 28 that the decree was officially announced by Vietnam Prime Minister Nguyen Xuan Phuc.

 

USDEC said it worked for more than a year to secure the measure. It reduces a competitive disadvantage created when the Trans-Pacific Partnership went into effect without U.S. participation, along with other free-trade agreements, including one with the European Union.

Since 2017, U.S. dairy exports to Vietnam have grown by more than 50%, to $170.5 million (86,230 metric tons) last year, making it the U.S. dairy industry’s eighth-largest export market.

 

“Vietnam’s decision to unilaterally lower tariffs will better position the U.S. dairy industry to provide a consistent supply of high-quality and competitively priced dairy products to the mutual benefit of both nations,” said USDEC President and CEO Tom Vilsack. “The effort illustrates how the U.S. Dairy Export Council delivers value to its member companies and dairy farmers.”

With Australia/New Zealand and the European Union all gaining preferred access to Vietnam through the Comprehensive Agreement for Trans-Pacific Partnership and the EU-Vietnam Trade Agreement, USDEC said it saw that U.S. suppliers would soon be facing a significant competitive disadvantage. The Trade Policy team, working with the Market Access and Strategy and Insights teams, began a campaign to reduce that competitive disadvantage.

 

USDEC said it submitted a petition to reduce tariffs to the Vietnamese government in April 2019, traveled to Vietnam to meet with government officials and utilized a focused local team to conduct follow-up contact in-market with Vietnam.

 

“While this is certainly a development to celebrate,” Vilsack said, “USDEC will continue working toward a free-trade agreement with Vietnam that expands U.S. market share by removing all dairy tariffs and ensuring that the access afforded to U.S. suppliers is second to none.”

Click here to read the original article!

Why Dairy Plants Are Unlikely to House Large COVID-19 Outbreaks

“You can walk into a large commercial facility like a block cheese or milk powder plant and aside from the guard at the door, you’d have trouble finding someone,” he says.  (Wyatt Bechtel)

Working conditions and facility design. In meat packing plants employees often work shoulder to shoulder whereas dairy processing is highly automated, explains Sam Alcaine, a food scientist and assistant professor at Cornell University. 

 

“It’s simply a function of having a larger number of employees working in close contact,” he says. “You may have seen photos of the plastic dividers some meat plants have installed, but even they only do so much [to prevent the spread].”

 

Andy Novakovic, a dairy economist at Cornell University, agrees that the fundamental differences between how dairy and meat plants are operated is the biggest factor at play here. 

“You can walk into a large commercial facility like a block cheese or milk powder plant and aside from the guard at the door, you’d have trouble finding someone,” he says. 

At what some call conversion plants, where large blocks of cheese are processed and repackaged into retail sized portions, there are more employees working together, but the numbers are nothing compared to an average meat plant. 

Meat and dairy facilities are inspected by USDA and FDA respectively. Novakovic says dairy plants take food safety and cleanliness to a very high level because of the nature of the product they process.

“In my experience dairy plant employees have a high commitment to cleanliness and food safety already,” he says. “They’ve been changing onsite, washing their hands and disinfecting their boots at every turn for years before this started.”

Novakovic says that previously established cultural commitment to strict protocols enabled plant managers to implement COVID-19 specific protocols faster and also ensured employees followed the guidelines more quickly.  

Community culture. Novakovic and Alcaine agree the community culture among the employees is another huge factor at play. Working in a dairy processing plant requires a different level of education and ability to use technology, which is often directly corelated with socioeconomic status.

“What are the [workforce’s] economic conditions and what do they mean for community spread of the virus outside the plant? Are they primarily carpooling together or taking public transportation because they have limited transportation? That's one case where you have a several people in a confined space going into work that increases the chances of person to person transmission,” Alcaine noted that housing situations may also play a role. “If there are many people in one house, or multiple families together, that can impact how quickly the virus can spread.”

“What are the [workforce’s] economic conditions and what do they mean for community spread of the virus outside the plant? Are they primarily carpooling together or taking public transportation because they have limited transportation? That's one case where you have a several people in a confined space going into work that increases the chances of person to person transmission,” Alcaine noted that housing situations may also play a role. “If there are many people in one house, or multiple families together, that can impact how quickly the virus can spread.”

Alcaine says the economic conditions which impact things like housing or transportation can influence people feeling like they need to work even if they’re sick. “All companies are saying if you’re sick stay home,” he says. “I know that there have been instances of employees still feeling that they need to come in, fearing that if they don’t show up they're at risk of losing their jobs, even though they are being told differently. So that kind of pressure may play into the situation.”

Additionally, geographic location plays a roll, Novakavich says. “If you’re in rural New York, just a long car ride from New York City it’s probably easier to take this situation seriously than if you’re in the middle of Nebraska somewhere.” 

Still, dairy plants are not immune to the challenges presented by COVID-19. Alcaine says plants must remain vigilant about monitoring interaction in break rooms and other areas where a large number of employees congregate, ensuring that there is appropriate social distancing, regular handwashing with soap, and potential use of face coverings, are all important to preventing spread in plant. Additionally, companies need to be sure that all employees know they won’t be penalized for not coming to work if they are sick. 

 

Author: Anna-Lisa Laca Apr 24, 2020

Click here to read the original article!

Dairy is Critical Infrastructure

On March 19, the U.S. Department of Homeland Security (DHS) updated their guidance clarifying what sectors are deemed, “critical infrastructure". Functioning critical infrastructure is imperative during the response to the COVID-19 emergency for both public health and safety as well as community well-being. The dairy supply chain, from farm to fork, has been identified as essential critical infrastructure and as such, employees have a special responsibility in these times to continue operations. 

The memorandum can be accessed here.

Dairy Producers to Receive $6.20 Per CWT in Aid Payments

President Donald Trump and USDA released the long-awaited rules for direct payments under the Coronavirus Food Aid Program (CFAP). CFAP and Commodity Credit Corporation payments combined will total $6.20 per cwt for eligible producers. USDA will begin accepting applications on May 26th for the Coronavirus Food Assistance Program (CFAP) package through the Farm Service Agency.

What is the payment rate for dairy?

A single payment will be made to dairy farmers based on a two part calculation. Part one will be based on a producer's certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundred weight. The second part of the payment is based on a national adjustment to each producer's production in the first quarter multiplied by $1.47 per hundred weight. A total of $6.20/cwt.

 

CFAP Payment Limitations and Structure: 

Payment Limitations:

CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities.

 

Unlike other FSA programs, special payment limitation rules will be applied to participants that are corporations, limited liability companies, and limited partnerships (corporate entities). These corporate entities may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who contribute at least 400 hours of active person management or personal active labor. 

 

For a corporate entity:

• With one such shareholder the payment limit for the entity is $250,000;
• With two such shareholders, the payment limit for the entity is $500,000 if at least two members contribute substantial labor or management with respect to the operation of the corporate entity; and
• With three such shareholders, the limit is $750,000 if at least three members contribute substantial labor or management with respect to the operation of the corporate entity.

 

Payment Structure:

To ensure the availability of funding throughout the application period, producers will receive 80% of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available. 

 

USDA Service Centers are open for business by phone appointment only. 

 

For additional information please click here: https://www.farmers.gov/cfap

 

Producers will receive a single payment determined using two calculations:

• Price losses that occurred January 1- April 15, 2020. 
• • Producers will be compensated for 85% of price loss during that period.
• The second part of the payment will be expected losses from April 15 through the next two quarters and will cover 30% of expected losses.
•  The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. 
• Qualified commodities must have experienced a 5% price decrease between January and April.

 

USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June.

 

On top of these targeted programs USDA will utilize other available funding sources to purchase and distribute food to those in need. USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis, and food bank needs.

 

The FFCRA and CARES Act provided an at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank need and product availability.

Processor Handbook 

November 2016: Developed in Collaboration with Leading Dairy Processors 

This Processor Handbook is a supplementary resource to the Stewardship and Sustainability Framework for U.S. Dairy (Framework) developed to support dairy cooperatives, processors, manufacturers and milk marketing organizations that choose to voluntarily track and communicate progress. This handbook provides measurement guidance for processors across topics essential to sustainable plant operations including: energy and greenhouse gas intensity, water use, resource recovery (waste management), employee investment and community contributions. 

This handbook was developed to aid dairy processors in credibly and consistently using the Framework. It provides insights and guidance which processors can use to assess the sustainability of their operations, highlight responsible management practices and demonstrate the industry’s dedication to continuous improvement against the indicators and metrics defined in the Framework. 

The Innovation Center for U.S. Dairy® (Innovation Center) in partnership with dairy farmers and businesses across the industry intends to continually update the Framework to reflect the latest scientific information and generally-accepted best practices. Through collaboration with the International Dairy Foods Association (IDFA) as well as leading dairy processors, the handbook will be updated accordingly. It is the user’s responsibility to refer to the most updated version of both the Framework and Processor Handbook. 

Read the full Handbook here:  ProcessorHandbook.pdf