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National Dairy Board stretches budget

Dec. 5, 2013 | 0 comments


            Though budgets for the National Dairy Board and its related groups are still pretty large, one of the ways the dairy farmer members of the board are trying to stretch those dollars is to work in tandem with industry partners on projects that benefit both the dairy industry and the business partner.

            Since 1985, dairy farmers have been contributing 15 cents per hundredweight to national and regional promotion and research programs; milk production has gone up about 1 percent each year.

            Steve Maddox, chairman of the board, said that six years ago the board decided to make more effort to stretch their money by working with partners in the industry. “We began to get away from more generic programs and began working with partners.”

            Doing that, he says, has returned six dollars for every one that the National Dairy Board spent.

            One of the first commercial partners the dairy group worked with was the national chain, Domino’s pizza. The pizza company worked with the dairy board to improve its cheese offerings and in the last four years, says Maddox, it has used an additional 10 billion pounds of milk-equivalent per year.

            Maddox, a Fresno, CA dairyman, has served for several years as chairman of the board. His family’s Maddox Dairy has 4,000 head of cows and has “multi-generational support.”

Marilyn Hershey is part of a dairy farming operation one hour west of Philadelphia and an hour north of Baltimore. In addition to dairying, she works as a freelance journalist, writing a “Common Threads” column for Hoards Dairyman.

            Theirs is a multi-generational farm with her father, 86, working each day feeding calves. Their farm has 650 cows.

            Hershey is in her first year on the National Dairy Board. The two National Dairy Board members recently spoke toWisconsin State Farmer about their industry projects.

            Hershey said Taco Bell is a new partner with the dairy board. “It’s a great partnership because it’s the largest quick-serving restaurant serving Mexican food and on their menu, dairy is part of 90 percent of the offerings.”

            An employee who is being paid by the dairy board’s checkoff funds is working with Taco Bell to develop menu items, especially to get more dairy products into their food offerings. That’s one way the dairy board stretches its checkoff dollars.

             “Taco Bell’s money does the advertising,” she said.

            “The key thing is that when we do a project like this the majority of the product that gets used is natural cheese,” adds Maddox.


Begetting imitation

            At Domino’s, the pizza giant began using more specialty cheeses in its pizzas and more cheese overall, he said, encouraging their customers to become more adventurous in their menu choices and using more dairy products in the bargain.

            That partnership has been ongoing for five years and it is particularly important, says Maddox, since there are 400 local franchises that have arrangements to produce meals for schools in 39 states.

            These fresh delivered pizzas are reduced fat, lower sodium offerings on whole wheat crusts to comply with the wishes of public school nutrition directors. In the process, they are also getting kids to eat more dairy.

            “Domino’s has hired a school team since we started with them,” Hershey said.

            One of the beauties of these industry partnerships, the pair of board members said, is that it provides an incentive for others in that area to follow suit. After Domino’s began working with the dairy board on improving its cheese products and school lunch offerings, Pizza Hut began to work on the same kinds of projects.

            At McDonalds, the dairy board worked with the company to help develop the coffee drinks that move a lot of dairy products. Increasing yogurt sales at the foodservice giant is another goal.

            Hershey noted that the company includes cheese in many of its entrees to add taste. One example is the new egg white and white cheddar breakfast sandwich. “It’s a featured cheese because it’s available.”

            Maddox said the dairy board is disappointed in the consumption of fluid milk by U.S. consumers. “Demographic studies show that fewer people eat breakfast at home and that is traditionally where much of the fluid milk is consumed.”


Innovation in fluid

            The dairy board has moved its partnership model to fluid milk as well, he said, and what they found is that there are very slim margins at bottling plants, there’s really been no innovation in that area and 78 percent of fluid milk sales is in the gallon or half-gallon jugs.

            “We’ve made it into a commodity. How do we get a premium price for a commodity,” he adds.

            Hershey said that one of the ways to improve the premium value of fluid milk is the chocolate milk programs that tout the benefits of the beverage as a drink for active athletes and kids. “Athletes find they need something to refuel.”

            Maddox said the dairy board is working with a number of industry partners to develop shrink-wrapped UHT milk and “refueling” drinks. There is also scientific research ongoing to determine the nutritional value of these kinds of drinks.

            “We have a lot of studies going on to focus on this,” he said.

            In one survey of consumers, 25 percent said they believe they are lactose intolerant and there is a push to promote lactose-free dairy products to those consumers. These kinds of specialty fluid milk have seen an up-tick of 5-6 percent, he said.

            The dairy board is also targeting the extra value of whey in its overall research and promotion program, as whey becomes more important in anti-aging products and those for athletes.

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