How Your Dairy Checkoff Dollars Are Being Used In the COVID Crisis

Dairy Management Inc. (DMI) leaders on Friday outlined a shift in their business plan to help farmers and the entire dairy industry whether the challenges presented by the COVID-19 pandemic. As the industry wades through an unprecedented time when restaurants are closed and foodservice demand which accounts for a significant amount of domestic demand has plummeted.  

“With unprecedented impact on virtually every aspect of the dairy sector – from farm inputs and production and workforce challenges to disruption in transportation, processing, warehousing and marketplace access, DMI and its network of 16 state & regional units, have quickly responded to the still deepening business and cultural shifts occurring as a result of the global COVID-19 pandemic,” said Barb O’Brien DMI president.

The checkoff has reorganized their staff into four crisis response teams: school nutrition, hunger, food service partnerships and retail.  

“I'd like to make sure the farmers understand and see some hope of where things could go but understand what we're doing today,” DMI CEO Tom Gallagher said on Friday. “The first and most critical, and we've redirected our efforts and staffs and otherwise, is to do things to get product in the hands of people immediately. That’s a dire need.” 

In a letter to Secretary Perdue, O’Brien said the checkoff’s mission of building sales and trust on behalf of U.S. dairy farmers and importers will prioritize limiting milk disposal and redirecting supply to serve those in greatest need over the next two months. The checkoff efforts include working through GENYOUth fundraising and grants to ensure school meals for children who need them. 

On Friday O'Brien noted that GENYOUth created the “For Schools’ Sake – Help Us Feed Our Nation’s Kids!” movement, which so far has generated $3 million in corporate and individual donations most of which are from outside the dairy industry. More than 7,7000 applications have been submitted by school districts across the country requesting up to $3,000 grants for equipment, packaging and other supplies as school foodservice professionals work tirelessly to feed at-risk children. 

Additionally, DMI is working to help food banks meet their growing needs. Leaders say the checkoff is convening cooperative leaders seeking to find a destination for excess supply with local processors and food banks. This effort already is diverting more than 100,000 gallons of milk per week in Texas, New Mexico, Indiana, Michigan, Ohio, New York and New England into the hunger system.

DMI CEO Tom Gallagher explained the roll DMI can play in helping partners like national pizza chains increase their cheese consumption, adding they’ve asked several chains to increase cheese use by 2 oz. per pizza to help boost cheese use. 

“One of the things we're doing as we did in 2009 and 2008 when farmers had serious issues, were working with the larger pizza chains to see if we can stimulate with milk suppliers, cheese suppliers and the pizza chains the addition of two ounces on as many pieces as they're willing and able to put it on,” he said adding they’re in good shape with one chain and their working on two of the other big three chains to commit to helping move milk. 

U.S. Dairy Export Council CEO on Friday also outlined the work they continue to do to increase exports. At the end of 2019 and the beginning of 2020 there was a lot of momentum for U.S. dairy exports. In fact, February export numbers actually show dairy exports leaving at a higher rate than last year and the month added to six consecutive months of positive growth despite port challenges at the onset of the virus. USDEC fully expects exports March exports to feel the impact of the virus because around the world COVID-19 has had similar effects on food service, schools and tourism as it has in the U.S. 

Still, Vilsack says the group is working tirelessly to continue to let the world know there are U.S. dairy products available and ready for export. The organization plans to leverage technology to aid in their efforts through virtual classes and even virtual trade shows. As Southeast Asia enters the recovery phase for the virus, USDEC is focused on boosting exports to that region. 

“We're working extensively with markets in Southeast Asia, because they are obviously in a curve to recover from the virus a bit more quickly than we are in the US. So the hope is that by maintaining these contacts, by having this information available, by continuing to promote even virtually that we continue to make sure that us dairy and certain products and top of mind as restaurants begin to reopen as tourism begins to pick up as we return back to whatever the new normal is going to be,” Vilsack said. “We're excited about the opportunity on the cheap side of establishing a more robust presence in social media, obviously people are currently purchasing a lot of food online with delivery home delivery.”

In summary checkoff leaders say there’s not one easy answer. But when asked Gallagher and Vilsack agree the solution is not suspending checkoff contributions because that would halt moment and result in lost markets in the long run. 

“There’s not one answer,” Gallagher said. “We’ve got to try a ton of different things and hopefully that will help, but it will still come down to some things National Milk and IDFA have asked USDA to do in the bigger picture.”