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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 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!