Dairy Farmers of Wisconsin poised to face market challenges

Ray Mueller
The Wisconsin Milk Marketing Board has a new name – Dairy Farmers of Wisconsin (DFW).

DE PERE – When viewed on a national scale, Wisconsin's share of milk production is virtually equal to the volume of the nation's dairy products that are exported annually – about 14 percent in each case.

“One day of every seven days of milk production is exported” is how Dairy Farmers of Wisconsin (formerly Wisconsin Milk Marketing Board) senior vice-president of marketing Patrick Geoghegan stated it in a presentation at an annual regional meeting of county dairy promotion groups.

Patrick Geoghegan

When asked about the retaliatory tariffs on dairy product exports that Mexico, Canada, and China imposed in the wake of tariffs on steel instituted by President Donald J. Trump, Geoghegan agreed that “tariffs don't help us. We know that.” He noted that at least one exporting cheese manufacturer has absorbed a portion of the tariffs but cannot continue to do so indefinitely.

Buffering tariffs

To deal with and potentially offset the exporting challenges that exist with countries which have placed tariffs on dairy products in response to the steel tariffs, Geoghegan reported that Dairy Farmers of Wisconsin (DFW) had sponsored a trade mission to Central America from which “we're seeing results.”

Geoghegan also suggested possible inroads by attending a future trade show in the Middle East and mentioned the opportunity for additional sales of Wisconsin dairy products to countries in North Africa. In recent years, cheese companies have been invited to use space rented by DFW at trade shows in order to promote their brand names, he added.

DFW allocates its budget largely in line with the state's dairy industry percentages of using nearly 90 percent of its milk production to make cheese and selling 90 percent of that cheese outside the state, Geoghegan pointed out. He noted more than 200 brands of the cheese made in the state have arranged to add the new DFW logo to their packaging.

Geoghegan also cited the state's unique Master Cheesemaker program, which started in the 1990s and has 71 qualified members. He noted that those members “are really excited” about the new plan to place their images and signatures on the labels of cheeses they made.

Another method that DFW finds to be very effective in promoting Wisconsin's dairy sector is “getting people here,” Geoghegan continued. By that, he means getting potential buyers and retailers to visit the state, meet with manufacturers, and tour dairy farms.

New ventures

A successful Guinness Book record-setting event earlier this year in Madison was the creation of a 4,500-pound cheese board which attracted a crowd of thousands, Geoghegan observed. The remaining portion of the cheese which was not sampled by the crowd was donated to the Second Harvest food pantry, he stated.

DFW also sponsors gatherings with editors of trade publications and newspapers such as a day earlier this year that focused on building cheeseboards, Geoghegan indicated. He is also impressed with the “amazing and shocking number of hours” that the dairy sector is able to obtain on radio and television stations in Wisconsin.

A new venture with which DFW was very pleased was the newspaper placement of columns written by four Wisconsin dairy farmers in conjunction with National Farmers Day on October 12, Geoghegan remarked. He cited an estimate that those columns reached as many as 2.2 million readers.

Farmers need to be directly involved in the promotion of their products because “people trust you” more than any other group or element in society, Geoghegan emphasized. He said the promotion organization's name change to Dairy Farmers of Wisconsin earlier this year was prompted in large part to foster “better understanding” and to reduce confusion in the media.

Because of their credibility and the need to address “consumer confusion on nutrition claims,” farmers should comment on the federal Food and Drug Administration's review of the use of “milk” in the labeling of beverages which are not derived from milk produced by animals, Geoghegan advised.

The date for those responses has been extended from the previously scheduled Nov. 27 to Jan. 25, 2019. Comments can be submitted electronically at www.regulations.gov on the docket number FDA-2018-N-3522.

Economic impact

Within Wisconsin, DFW continues to call attention to a calculated $43.4 billion annual value to the state's economy that is generated by the dairy sector. Geoghegan cited an economic analysis which credits every $1 of dairy sector activity with putting $1.79 into the state's economy.

When asked if the $43.4 billion (calculated several years ago) is outdated because of lower milk prices now, Geoghegan acknowledged that a new calculation is due soon but emphasized that each progression of that estimate has shown an increase and that milk price is only one of “about 100 variables” used to create the number.

Beyond those somewhat general promotion methods, Geoghegan cited the 5 to 7 million views of each issue of the Grate.Pair.Share online magazine, the nearly 20,000 product demos that DFW had a hand in conducting during fiscal year 2018, the DFW's affiliation with 8 of the top 10 growing pizza chains, Domino's decision to add two ounces of cheese per pizza (stays hot longer and boosts quality), sales links with Meijer's 250 stores and H-E-D's 400 stores in Texas, and (except for some fluid milk) Culver's practice to use only Wisconsin dairy products at the state-based company's more than 600 outlets in 30 states.

In the food service sector, DFW “focuses on organizations that are growing that have new owners,” Geoghegan explained. “We ask if they are interested in switching.”

Geoghegan praised McDonald's for switching from margarine to butter at 14,000 outlets, the fluid milk processors for contributing about $70 million per year to sponsor MilkPEP television ads, and the Fuel Up to Play 60 children's program for which some 500 Wisconsin schools account for 3 million of the nation's total of 38 million participants.

To reach millennials, DFW is deeply engaged in the use of social media such as Facebook, Twitter, and Instagram in addition to numerous more traditional websites which address specific topics, Geoghegan pointed out.

Should there be any doubt, Geoghegan reminded the attendees that use of 15 cent per hundred of milk checkoff for DFW and national promotion, research, and education is restricted to advocacy for the sale and consumption of dairy products and is not allowed to address milk pricing policy. For milk pricing, he suggested working with such policy-oriented groups as the Dairy Business Association and the Farm Bureau.

Geoghegan can be reached by e-mail to pgeoghegan@wisconsindairy.org or by phone to (608) 836-8820.