The dairy checkoff works

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If you build it they will come.” While that idea may have worked in the baseball movie, “Field of Dreams,” when it comes to building consumer demand for dairy products, it’s not that simple. If it was, then the increase in milk production this past year would have automatically resulted in increased demand. 

Building demand for dairy products takes a plan, time, money and establishing relationships up and down the food chain to develop new products, packaging and marketing strategies. Since 1984, when dairy producers passed the 15-cent checkoff, your checkoff dollars have been used to put all of those pieces in place.

“We’ve spent a lot of time developing the tools and the relationships needed to build demand, and we’re now seeing the fruit of that work,” says Paul Rovey, Arizona dairy producer and chairman of the National Dairy Promotion and Research Board. “I’m terribly excited about the opportunities for the short-and long-run of the industry to build demand for dairy products.”

However, not everyone feels the same way. Earlier this year, a Pennsylvania couple filed suit to challenge the dairy checkoff program as unconstitutional. That case is still pending.

A lot of checkoff programs in other industries have come under fire the past few years. Earlier this year, a South Dakota judge ruled the beef checkoff was unconstitutional. That case is under appeal at the 8th U.S. Circuit Court in Minneapolis. In late October, a Michigan court struck down the pork checkoff as unconstitutional, too. And in early November, in a producer-led suit challenging the beef checkoff, a Montana court ruled it was constitutional.

All of the battles over checkoff programs in other commodities can be confusing. However, one thing is clear: dairy producers should not let negative sentiment about other checkoff programs sway their support for the successful dairy checkoff program. Here are four reasons why you should continue to support the dairy checkoff.

It takes time to build demand
This year’s low milk prices have producers feeling the pinch. And, some producers say they could use that 15-cent per hundredweight checkoff fee in their pocket to help pay bills. However, questioning your support of the checkoff just to help get through a temporary economic pinch would be a shortsighted decision. The dairy checkoff accomplishes targeted goals each year that help build momentum and lay the foundation for building consumer demand.

During the first few years of the checkoff, a lot of time and energy was spent building relationships up and down the food chain, as well as gathering input from dairy producers to determine where the checkoff should focus its efforts in order to build consumer demand. But building consumer demand takes times. It’s not as simple as you do “A” and, therefore, “B” happens.

It’s similar with rearing a heifer and helping her reach her productive potential. You have to do a lot of little things right to build the foundation for her to have a good productive life. And if you end up culling her during her first lactation, she never has the chance to pay her rearing cost and return a profit. The same would be true if you decided to stop supporting the dairy checkoff. You’d lose all of the money invested in ideas, in relationships and in product development — the foundation for building consumer demand.

Although it takes time to see results, the “got milk?” and “Ah, the power of cheese” promotional campaigns, along with kid-oriented promotions, do benefit your dairy.

Look at how far the industry has come since 1983 when the dairy checkoff was instituted nationwide. Total per-capita consumption of dairy products that year was 522 pounds. By the end of 2001, it had climbed to 587 pounds per person. All told, dairy farmers sell an additional 47 billion pounds of milk each year to consumers, compared to 1983, says Scott Higgins, president and CEO of the American Dairy Association and Dairy Council Mid-East.

The brightest news for the dairy industry is that young people are drinking more milk. After a four-year downhill slide, teen milk consumption has increased, and milk consumption of kids ages six to 12 has hit a 10-year high.

Also boosting demand among young people have been the introduction of single-serve, plastic containers, milk in a variety of flavors, milk vending machines in schools, and a renewed commitment to serving milk at the proper temperature in schools.

That’s a great way to measure progress, says Higgins. When you look back you can see what the industry has been able to accomplish. Without the checkoff money, “we would have not been able to accomplish any of these changes.”

A common goal
Since the checkoff began in 1984, producers have been asked for their input on ways to build consumer demand. One clear theme has come through loud and clear in recent years, says Rovey, and that is “fix the school-milk program.” Warm milk, slightly soured milk, and hard-to-open, gable-top paper cartons have led many kids to pass on the milk offered at school.

Checkoff money was used to educate school officials on how to store and serve milk at the proper temperature. And, milk processors were encouraged to produce single-serve milk products in round, plastic, resealable containers. Both of these projects took time, and are considered important stepping stones to achieving the goal of fixing the school- milk program. And more importantly, research shows that milk consumption of kids in school has increased as a result. 

Through the checkoff, dairy producers have learned to step up and approach processors and vendors with new ideas, says David Pelzer, vice president of industry relations, Dairy Management Inc., the non-profit organization that manages the national dairy checkoff program.

“Processors today are more receptive to new ideas than they were five or 10 years ago,” adds Rovey. The relationships forged between producers and processors, using checkoff funds, has made this possible. Now, producers and processors are working together to achieve a common goal.

Consumers want healthy foods
Research from the USDA’s Economic Research Service shows that consumers today base more of their food decisions on the healthfulness of the product than price. This is a major change from the price-driven decisions that consumers made 50 years ago.

For example, until the early 1950s, nearly everyone ate eggs for breakfast. By the 1980s, cholesterol became a concern, and per-capita egg consumption dropped from a high of 390 in 1950 to 233 in 1991. Some consumption was regained, following the release of new health information about eggs, and today consumption stands at 250 eggs per person.

Consumers no longer make food choices without considering the health consequences. That’s why the dairy checkoff remains so important to help maintain and increase consumer demand. You cannot assume that a market for your product will always exist. You have to cultivate that market.

Checkoff dollars have funded research on the health benefits of dairy products, looking specifically at the positive role that dairy products play when it comes to offsetting heart disease, obesity, osteoporosis, and colon cancer. That information is then disseminated to key influencers, such as physicians and dietitians.

The industry must continue this work. “You have to be in it for the long haul,” says Pelzer. “You can’t prove anything with one study, and you have to continually reaffirm for consumers that milk has health benefits.”

It works
Perhaps the most powerful reason for why you should continue to support the dairy checkoff program is that it works. Here are a few highlights of what your checkoff dollars have been able to accomplish for the industry:

  • Cheese consumption has climbed from 17.8 pounds per person in 1983 to 29.6 pounds in 2001. Your checkoff dollars have funded “Ah the power of cheese” promotions. They have been used to build partnerships with large supermarket chains, including Wal-Mart Supercenters, Krogers, Albertson’s and Safeway. And, dairy promotion groups have worked with fast-food restaurant chains, such as Burger King, Wendy’s, Taco Bell and Pizza Hut, in coming up with innovative new menu items and product promotions. 
  • Teen milk consumption is up for the first time in four years.
  • The milk consumption of kids age six to 12 has hit a 10-year high.
  • The recently completed school milk pilot study revealed that kids are drinking more milk in school, thanks to single-serve flavored milks with attractive packaging.
  • The introduction of milk vending machines that dispense properly-chilled, single-serve, flavored milks in plastic bottles have been a big hit in high schools.
  • Per-capita dairy product consumption has climbed to 587 pounds per year.

Changes in demand don’t happen overnight. “Milk does not sell itself,” says Pelzer. “If you want to move beyond a commodity product to a value-added product, you have to know your market. That means we must continually work toward meeting ever-changing consumer demands.”

Growing demand takes a coordinated effort between dairy producers and other members of the food-production and distribution chain, including processors, restaurants, and grocery stores. Checkoff dollars aid this coordinated effort.

Now that the foundation has been laid, we’re seeing results. And, one of the new things on the horizon is a potential partnership between the dairy checkoff, Disney motion pictures and McDonald’s that could help increase fluid milk and cheese sales at hundreds of McDonald’s in the near future.

Good things happen when we all work together to grow demand. That’s what the checkoff is all about.



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