Fluid milk business goes to the dogs
BROOKINGS, South Dakota––Perhaps the surest indication yet that the U.S. fluid milk dairy industry is gurgling down the tubes and knows it came in a January 16, 2024 email from South Dakota State University College of Agriculture, Food & Environmental Sciences dean Joseph Cassidy to faculty, staff, and students.
“After exhausting all fundraising opportunities,” Cassidy wrote, “South Dakota State University has decided to discontinue the operations of the SDSU Dairy Research & Training Facility by the end of June 2024.”
Translated AgWeek reporter Ariana Schumacher, herself a 2022 South Dakota State University College of Agriculture alumnus, “The dairy farm at South Dakota State University will be closing down. The farm, which houses roughly 300 Holstein and Brown Swiss dairy cows, will be ceasing operations.”
Headed out to pasture on the manure spreader
In other words, one of the premier training programs for future U.S. dairy farmers is headed out to pasture on the manure spreader, to produce and spread fresh poop no more.
Cassidy pledged that South Dakota State University will continue to offer degrees in dairy production, dairy manufacturing, and “will work with cooperating dairy industry partners to develop a plan providing students with educational opportunities in state-of-the-art dairy facilities,” wrote Schumacher.
That may keep some of the student body enrolled there, but––like Schumacher herself, who double-majored in “agricultural communications” and journalism, they might be looking for alternate career paths.
No money for training dairy farmers
Progressive Dairy managing editor Karen Lee offered further details two days later, on January 18, 2024.
Closing the South Dakota State University Dairy Research & Training facility, Lee indicated, was necessitated by “a lack of funding to upgrade the aging facility,” built in 1994.
“For renovations,” Lee wrote, “the university received a legislative commitment of $7.5 million dollars with the expectation of a matching amount raised from private contributions.
“In a radio interview,” Lee reported, “South Dakota State University president Barry Dunn said they were unable to garner that level of support, and even so, it would have fallen short of the financing required to build a new facility.”
Questions about the state of the industry
This provokes two questions.
First, if the 10 national and international multi-billion-dollar-a-year corporations that now dominate the U.S. milk industry are unwilling to invest in training the next generation of dairy management personnel, with the current average age of dairy farmers 54 years plus, what does that say about industry expectations for the future of a business several of them are already rapidly diversifying out of?
Second, if a moderate-sized dairy farm subsidized by taxpayers is unable to find the money to upgrade 30-year-old facilities to current standards, how can any of the few remaining family-scale dairy farmers stay in business?
Food & Water Watch
The environmental organization Food & Water Watch in a January 2023 report titled The Economic Cost of Food Monopolies: Dirty Dairy Racket found that, “The U.S. lost almost 70% of its family-scale commercial dairies between 1997 and 2017. Today, only about 30% of all U.S. milk is produced on family-scale farms.
“Since 2000,” Food & Water Watch continued, the average U.S. dairy has managed to turn a profit just twice. Much of that is due to increased production costs and plummeting real milk prices which dropped 20% from 2000 to 2021.
“These trends have serious climate implications,” Food & Water Watch worried.
“From 1990-2020,” Food & Water Watch assessed, “the shift to larger operations resulted in a doubling of annual methane emissions from dairy manure management, despite the fact that the number of cows remained the same.”
That, translated, means that an ever-increasing percentage of the U.S. dairy herd of about 9.4 million cows are kept in factory farm conditions, not outdoors on grass.
Further, Food & Water Watch reported, “83% of milk sales are marketed by three dairy cooperatives, Dairy Farms of America, Land O’ Lakes, and California Dairies, Inc. Since 1970, one third of U.S. dairy processors have gone out of business.”
Squeezed out of profitable participation in mainstream milk supply, surviving family-scale dairy farmers are increasingly turning to selling unpasteurized “raw milk” directly to consumers, a business model now legal in all 50 states, with some variation in how it may be done, and bills before several state legislatures that would allow “raw milk producers to expand their markets.
The “raw milk” industry is arguably more humane than the mainstream dairy industry, since more of the cows are on pasture more of the time. Proportionately, however, just as many calves are born to make their mothers produce milk, then sent to slaughter.
Further, far from being the salvation of dairy farmers, the growth of the “raw milk” trade is likely also to be part of the death spiral of the liquid milk dairy industry generally, which has historically been the biggest and most profitable part of the milk market.
Liquid milk has already lost 12% of market share to plant-based alternatives
There are many other milk market segments, including “industrial milk” used in making cheese and other milk products, and milk solids used in baking and other forms of food production.
The “milk ingredients” market in the U.S. amounts to $56 billion per year, and continues steady growth––but the liquid milk market amounts to $59 billion per year, has lost about 12% of market share to plant-based alternatives, and has long been declining, according to U.S. Department of Agriculture data, since consumption peaked at 45 gallons per person in 1945.
Current per capita consumption of fluid milk dropped to 16 gallons in 2021.
The milk industry is still plenty big enough to survive for quite a long time yet, but apparently not big enough, as the South Dakota State University Dairy Research & Training Facility debacle shows, to encourage re-investment.
Reported the USDA Economic Research Service periodical Amber Waves in June 2022, “Nutritionists have pointed out that consumption of sugar-sweetened beverages such as soft drinks and juice drinks increased during the 1980s and 1990s and appeared to be replacing milk. However, in recent years, U.S. per capita consumption of sugar-sweetened beverages also has declined.”
Marketing research, however, has found “evidence that plant-based milk alternatives, such as almond milk and soy milk, do compete with fluid cow’s milk.”
But, continued Amber Waves, “The increase in their sales is much smaller than the decrease in sales of fluid cow’s milk, so plant-based milk alternatives can explain only a small share of overall sales trends.”
What appears to drive down fluid cow’s milk consumption most are health concerns.
Recounted Daniel Fernandez for the Smithsonian magazine on May 11, 2018, “In 1908, [the U.S.] Surgeon General released a 600-page report that attributed most childhood deaths to impure milk and argued that pasteurization was the best way to address the ongoing public health crisis.”
The advent of pasteurization probably saved the fluid milk industry then.
“Before 1938,” reported Fernandez, “an estimated 25% of all foodborne and waterborne disease outbreaks in the USA were associated with milk, whereas nowadays, the percentage of such
outbreaks associated with milk is estimated to be below 1%.
“Between 1880 and 1907,” Fernandez found, “29 milk-borne outbreaks were reported on average each year in the USA. With the adoption of [mandatory] pasteurization in 1938, milk-borne diseases dropped to only 46 outbreaks during the 19-year period from 1973 to 1992, corresponding to an average of 2.4 outbreaks.”
Raw milk drives milk-borne disease outbreaks back up
Summarized Fernandez, “A recent report of the U.S. Centers for Disease Control & Prevention indicates that the vast majority of milk-borne outbreaks in the USA are in states that permit the sale of raw milk.”
That was before the raw milk market opened up to the extent of recent years.
The number of milk-borne disease outbreaks in the U.S. per year has approximately doubled since Fernandez wrote. Outbreaks of note associated with raw milk hit California, Minnesota, Utah, and Wyoming in 2023. Smaller outbreaks, resulting in fewer and less serous illnesses, likely evaded medical notice.
Raw milk devotees, largely self-convinced that raw milk is somehow purer and safer than pasteurized milk, tend to ignore the outbreaks and the mounting data demonstrating that it isn’t.
But raw milk-related disease outbreaks do help to erode consumer confidence in milk generally, already whetted by rising awareness that milk is not the healthy drink the industry has long told the public it is.
Milk vs. peanuts
Switch4Good, describing itself as “an evidence-based nonprofit committed to providing health, wellness and food equity education,” in October 2023 announced that it had “purchased five billboards in heavily trafficked sections of Los Angeles and Atlanta to warn parents about the perils of dairy consumption.”
Talking points promoted by Switch4Good included that, “A landmark British Medical Journal study published in 2021 found that cow’s milk is now the leading cause of fatal anaphylaxis in school-aged children.
Detailed a Switch4Good media release, “Deaths from peanuts, shellfish and eggs receive a lot of media attention, yet cow’s milk, along with products made from dairy such as cheese, ice cream and yogurt, have become the most prevalent and the most-deadly food allergen.
“The British Medical Journal study determined that since 1992, there has been a decrease in the proportion of deaths due to peanuts or tree nuts,” Switch4Good said, “yet the rate of lethal exposure to cow’s milk has increased, now making it the most common single cause of fatal anaphylaxis.”
Switch4Good ads refused
Continued Switch4Good, “Consuming cow’s milk and dairy products is also dangerous for adults, who get sick from milk allergies, lactose intolerance and in extreme cases, fatal anaphylaxis. Heart disease is the most common cause of death,” Switch4Good recited, “which is often caused by artery-clogging saturated and trans fat intake. Dairy products, mainly cheese, are the number one source of saturated fat in the American diet. Dairy consumption has also been shown to increase the risk of developing breast cancer and prostate cancer.”
Despite all that, the Switch4Good billboard ads “were repeatedly declined by the three largest outdoor advertising companies,” the organization said. “The original artwork contained a child’s picture on a milk carton, missing because she was killed by milk. Every billboard company refused it, with one of the big three billboard companies saying, ‘No creative that promotes “no dairy” will be accepted.’”
Dairy Checkoff Program
Why does the dairy industry have that much clout in the billboard business?
Alleged Switch4Good, “For decades, Big Dairy has manipulated research and nutritional science to construct billion-dollar marketing campaigns,” that “are responsible for some of the most popular and misleading advertising campaigns in history.”
Funding for those campaigns comes from the National Dairy Promotion & Research Board, created by Congress in 1983, financed by the Dairy Checkoff Program, which amounts to a tax paid by dairy farmers based on the weight of the milk they sell.
“The Board has worked with dozens of companies to promote dairy-heavy menu items, resulting in 40% more cheese on Domino’s pizzas, more milky drinks at Starbucks, and larger cheese slices on Egg McMuffins,” charges Switch4Good.
Big Dairy killed the ADD SOY Act
Dairy industry clout on December 13, 2023 killed the addition of the Addressing Digestive Distress in Stomachs of Our Youth (ADD SOY) Act to the “Whole Milk for Healthy Kids Act of 2023,” a “revision of the requirements for milk provided by the National School Lunch Program of the Department of Agriculture,” according to the Congressional bill summary, which “permits schools to offer students whole, reduced-fat, low-fat, and fat-free flavored and unflavored milk,” either organic or nonorganic,” but does not give children a plant-based alternative.
The “Whole Milk for Healthy Kids Act of 2023” is of critical importance to the fluid milk industry because USDA data shows that 35% of milk consumption by grade school-age children comes at school, along with 25% of milk consumption by teenagers.
This amounts to more than 10% of total U.S. fluid milk consumption, and includes the 29% of milk cartons served with school lunches that are tossed into the trash unopened, a volume of waste equivalent to the total milk production of about 21,500 Holstein cows, birthing 21,500 calves to produce the milk.