'Dairy not in trouble,' DFW CEO proclaims
DE PERE – “Dairy is not in trouble” in Wisconsin regardless of what the popular belief tends to be, Dairy Farmers of Wisconsin chief executive officer Chad Vincent told members of county dairy promotion groups from the state's northeast region at their annual conference.
By that comment, Vincent didn't mean to deny that many of the state's dairy farms are facing economic woes due in large part to unfavorable raw milk prices since 2015. He framed it in the context of the state's internal dairy sector and how it compares to other parts of the country.
On a related point, an attendee wanted to know if DFW could offer more than its current annual support of $4,750 to each county promotion group to help them pay for give-aways because many of those suppliers are also facing a financial pinch. Vincent's answer was that some of those recipients have used such contributions well while others did not.
To a question about competition from plant-based dairy imitations, Vincent replied “that's not our problem,” indicating that the volume of soy “milk” sales is equal to that of eggnog.
“Don't be distracted by that squirrel,” he said. (The most recent statistics indicate that the annual soy “milk” sales volume is the equivalent of one day's milk production in Wisconsin while non-dairy “cheese” has annual sales equivalent to .25 percent of one day's cheese production in the United States.)
Positive Dairy Outlook
What excites Vincent, who is completing three years in his position, is Wisconsin's prominent place in the national dairy sector and the rise in the annual per capita consumption from an equivalent of 530 pounds of milk when the state and national check-off supported entities were formed in 1983 to 671 pounds today. He pointed out that the continuing drop in fluid milk consumption is being more than offset by the consumption of cheese and other dairy products.
“In Wisconsin, we eat our milk,” Vincent declared. “Cheese is our bread and butter. People love cheese and ice cream.”
Outside the state, Vincent emphasizes how cheeses made in one or more of Wisconsin's 125 cheese plants can be found in 98 percent of the nation's supermarkets despite some expressed doubts about that. While on a recent trip, Vincent found 27 Wisconsin cheeses in a small store in Louisiana. He acknowledged that there is room for labeling changes which would more clearly show that the cheese was made in Wisconsin.
The 90/90 Formula
About 90 percent of the milk produced in Wisconsin is used to make cheese and 90 percent of that cheese is sold outside the state, Vincent reminded the conference attendees. To a question about the appropriateness of using milk originating from outside of the state, he explained that applicable legalities allow the Wisconsin label to be placed on any cheese made within the state but added that DFW reduces its level of support to manufacturers who bring milk into the state for processing.
Wisconsin's conversion to the production of specialty cheeses, up by 24 percent during the past five years compared to 2 percent for non-specialty or commodity cheeses, puts the state's dairy sector in a strong position, Vincent remarked. The state accounts for 50 percent of the nation's production of specialty cheeses, helping those manufacturers to enjoy higher prices rather than having to compete for sales on a price difference of a little as .25 cent per pound with Cheddar blocks and barrels, he explained.
Within Wisconsin, the latest economic analysis credits the dairy sector with a cumulative $45.6 billion in annual economy activity, generating $1.79 in economic activity for every $1 in the dairy sector and supporting 157,100 jobs, Vincent pointed out.
International Outlook
On the international front, Vincent pointed out that approximately one of every seven days of milk production in the United States is being exported in the form of various dairy products. He commended former federal Secretary of Agriculture and current U.S. Dairy Export Council executive director Tom Vilsack for an ability to “open anybody's door.”
Wisconsin is also the home, at the University of Wisconsin – Madison, of the Center for Dairy Research, which receives 50 percent of its funding from DFW, 4 percent from the university's budget, and the balance from dairy industry and other sources, Vincent noted. “The CDR is the gold standard around the world for dairy research.”
Retail Sector Successes
Although the United States constitutes “a pin prick only” in the potential for growth in the dairy sector around the world, Vincent cited a series of particular successes in increasing domestic consumption through partnerships with major brand name companies and the possibility for even more of them.
In particular, Vincent reported how the national Dairy Management Inc., which is also supported by the milk check-off of 15 cents per hundred, used the input of scientists to persuade McDonald's to replace margarine with butter. “Then others followed,” he noted.
With cheese on pizza accounting for a large portion of the per capita equivalent of milk consumption increases, Vincent described how leading companies such as Domino's and Pizza Hut have learned that the quality of their product increases as they add more cheese rather than reducing it. Domino's, which specializes in deliveries, learned that extra cheese holds the heat longer, making customers happier, he stated.
Wisconsin-based Culvers, which Vincent called “a great partner,” has outlets in 37 states and obtains all of its dairy ingredients in Wisconsin except fluid milk at its distant locations. A & W sells only Wisconsin-made cheese curds, which are now outselling its French fries, he reported.
Promotional Activities
With an estimated 80 percent of people under age 40 watching media on their own time, “we have moved beyond television advertising” in large part to the digital sector and social media instead, Vincent indicated. That's a way for DFW to spend “pennies rather than dollars to reach the right people at the right time” while the national MilkPEP program, funded by fluid milk processors, still spends up to $70 million annually on TV advertising for fluid milk, he observed.
Vincent cited the recent promotion of Wisconsin cheeses on the Kelly Clarkson Show at no cost to the DFW. With its 1.9 million viewers, it garnered an estimated $450,000 in free publicity time while other vendors on the same show paid large fees.
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He also mentioned the display of 160 cheeses on the world's largest cheeseboard project in Madison which obtained media exposure worth about $5 million. All of the TV, print, and other media exposure that DFW's public relations ventures generate is worth about $50 million per year compared to the organization's annual budget of about $30 million, he noted.
On what's ahead, Vincent cited the DFW's sponsorship of Marvin Kimble, a Milwaukee gymnast who's a candidate for the 2020 Olympics. Drawing from that thematic point, an audience member asked why fluid milk labeling couldn't imitate the seasonal advertising and merchandising based on Christmas, Halloween, Thanksgiving, Easter, Valentine's Day, and other annual observances. That suggestion drew audible reactions of approval from people in the crowd here.
Building Trust
Beyond those and other efforts to “make a home for your milk,” Vincent advises dairy farmers to not underestimate “the influence” that they can have on behalf of the consumption of dairy products. At a time when trust is lagging in many parts of the societal spectrum, he assures farmers that “your influence matters” because farmers enjoy “lots of trust.”
Farmers themselves can serve as the best counter when “consumers hear lots of bad things about dairy,” Vincent suggests. “We need to keep building trust. There's so little trust with anybody today. We're leading with you farmers to build the trust that's lacking elsewhere.”
Vincent prefers that this effort be locally sourced and driven. He calls on farmers to “tell the story, your story, on the right to farm and to continue to do so.”
Vincent can be contacted by e-mail to cvincent@wisconsindairy.org or by phone at (608) 836-8820.