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Weekly Digest: Dairy climate research project gains funding

Progressive Dairy Editor Dave Natzke Published on 21 June 2021

Digest Highlights

Dairy climate research partner receives $10 million grant

A research partner in a six-year project to analyze the greenhouse gas footprint related to dairy cattle feed production and explore new carbon, water quality and soil health market opportunities has received a $10 million grant. The Foundation for Food & Agriculture Research (FFAR) awarded the grant to the Soil Health Institute (SHI), a global nonprofit with a mission to safeguard and enhance the vitality and productivity of soil through scientific research and advancement.

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The Dairy Soil & Water Regeneration research project is seen as essential to advancing the work of the U.S. dairy Net Zero Initiative (NZI). The project will be executed across four dairy regions (Northeast, Lakes, Mountain and Pacific) responsible for about 80% of U.S. milk production. Dozens of dairies representing climates and soils of these regions will participate in a baseline survey of soil health and carbon storage. Additionally, eight farms, including five operating dairies, two university research dairies and one USDA Agricultural Research Service (ARS) research farm will participate in the project.

Collaboration will come from researchers at Cornell University, University of California – Davis, Texas A&M AgriLife Research, University of Wisconsin – Madison, University of Wisconsin – Platteville, University of Vermont and USDA ARS’s Northwest Irrigation and Soils Research in Kimberly, Idaho.

The FFAR grant will be matched by financial and in-kind contributions totaling about $23 million from NZI partners such as Nestlé, Newtrient and others. The funds will be managed by the Dairy Research Institute (DRI), a 501(c)(3) nonprofit entity founded and staffed by Dairy Management Inc. (DMI).

NZI is an industry-wide effort led by six national dairy organizations: DMI, Innovation Center for U.S. Dairy, International Dairy Foods Association, Newtrient, National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC).

Consumer switch impacting retail dairy sales

"Normalizing” shopping patterns indicate consumers are making more trips to the grocery store but spending less per trip, according to a monthly update from the International Dairy Deli Bakery Association (IDDBA). The impact is being felt in the dairy aisle.

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Based on Information Resources Inc. (IRI) U.S. grocery store sales data, dairy categories that had very strong sales in May 2020 had a hard time matching those results in May 2021, with overall dairy sales value down about 9%. Individually, the sales value of fluid milk (-6%), natural cheese (-12%), butter (-25%), process cheese (-13%), creams and creamers (-3%), sour cream (-17%), whipped toppings (-12%), cream cheese (-9%) and cottage cheese (-9%) were all lower. Only one category, yogurt, managed an increase versus year-ago sales, up 5%.

The numbers were similar on unit and total volume basis, with May 2021 sales percentages down double digits from May 2020. Exceptions were yogurt, refrigerated desserts and cheese snack kits, where unit and volume sales were higher.

The good news: Compared to May 2019, the value of May 2021 dairy sales was up 11%, with biggest contributions from fluid milk (+8%), natural cheese (+16%), yogurt (+8%), and creams and creamers (+18%). The value of sales of cream cheese and whipped toppings were up more than 20%.

“Importantly, demand is holding strong against the 2019 pre-pandemic normal, with [value] increases ranging from 8.6 to 16.2 percent across the five weeks [of May],” said Eric Richard, industry relations coordinator with IDDBA.

What’s ahead? “Consumers’ re-engagement with restaurants may signal a greater share of food dollars starting to flow from retail to food service,” according to the report. “This means it is more important than ever for retailers to actively promote their deli-prepared offerings as viable restaurant alternatives, whether for takeout, delivery or consumption in store.”

2021 fluid sales: Conventional, organic both lower

Here’s an update on U.S fluid milk sales data from the USDA Agricultural Marketing Service for April 2021.

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  • Total sales: April 2021 sales of packaged fluid milk products totaled 3.72 billion pounds, down about 3.8% from the same month a year earlier. At 15.1 billion pounds, year-to-date (January-April 2021) sales of all fluid products were down 4.9%.

  • Conventional products: April sales totaled 3.48 billion pounds, down 3.7%. Flavored milks were the only major categories showing growth, with sales of flavored whole milk up 21% and flavored reduced-fat (2%) milk up nearly 51%. Year-to-date sales of conventional products were down 5.4% at 14.1 billion pounds.

  • Organic products: Monthly sales totaled 240 million pounds, down 4.8% from a year earlier. Only 2% flavored milk posted a sales gain compared to April 2020, up 9.5%. At 976 million pounds, 2021 year-to-date sales of organic products were up 2.3%. Organic represented almost 6.5% of total fluid product sales in April 2021.

The U.S. figures represent consumption of fluid milk products in Federal Milk Marketing Order (FMMO) areas and California (now a part of the FMMO system), which account for approximately 92% of total fluid milk sales in the U.S. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, non-food stores, schools, the food service industry and home delivery.

Good news: Domestic dairy consumption higher

April dairy consumption numbers weren’t all bad. The USDA Economic Research Service (ERS) reported that April cheese consumption increased 19.7% from 2020 to 1.087 billion pounds. April butter consumption at 156 million pounds was down 7.8% from the prior year, but consumption is still up 2.4% year-to-date. Nonfat dry milk and skim milk powder consumption totaled 78.2 million pounds in April, up 23.5% from the same month a year earlier.

On a milk equivalent fat basis, April 2021 domestic consumption was up 10% compared to a year earlier. On a milk equivalent skim solids basis, domestic consumption was up more than 5%.

Dairy defenders: AEM

The Association of Equipment Manufacturers (AEM) put together an informational flyer detailing the top 10 myths prevalent regarding modern dairy farming. Listed below are the top five myths; click on the link above for the full list and additional details.

1. Cows in barns are less happy than those out in the field.

2. Dairy alternatives are more environmentally friendly.

3. Dairy milking is not a technologically advanced industry.

4. Humans don’t need dairy in their diets.

5. Dairy cows are pumped full of antibiotics.

Monthly dairy checkoff podcast launched

National and local dairy checkoff organizations have launched a monthly Your Dairy Checkoff podcast. The first episode, “Reaching Gen Z: Through the World of Gaming,” features a conversation about how the checkoff is looking to online video gaming to reach this consumer segment (ages 10 to 23).

Each subsequent episode will be hosted by dairy farmers or industry experts. Listeners will hear conversations focused on local, national and global dairy promotion, including consumer research, dairy nutrition, science and issues updates. Farmers will help guide the selection of topics through their feedback.

Things you might have missed

  • Surging export numbers show U.S. dairy products are increasingly competitive globally, according to dairy economists participating in a recent NMPF Dairy Defined podcast. Wiliam Loux, the director of global trade analysis for the USDEC, and Stephen Cain, an economic analyst for NMPF and USDEC, said global markets are being strengthened by an improving economy in Mexico and demand growth in China, Southeast Asia and the Middle East, and at the same time, the European Union and New Zealand dairy industries are struggling to maintain production levels.

  • HP Hood will purchase 90 gigawatt-hours (GWh) of wind energy annually under a contract signed with Enel Green Power North America Inc. The 12-year virtual power purchase agreement means Hood will purchase the electricity delivered to the grid by Enel Green Power’s Azure Sky Wind project in Texas. The annual purchase would cover about 33% of the electricity used across all 13 of Hood’s manufacturing facilities in 2020.

  • Led by the USDA, the U.S is joining a global coalition focused on improving the nutrition, health and education of vulnerable children and adolescents worldwide. The coalition, called “School Meals: Nutrition, Health and Education for Every Child,” will officially launch at the United Nations’ Food Systems Summit in September. Specifically, the coalition aims to ensure that by 2022 all countries restore school meals programs for the 370 million children who lost access during the COVID-19 pandemic, as well as reaching 73 million additional children living in extreme poverty and hunger who were not receiving school meals pre-pandemic.

  • Landowners and agricultural producers currently enrolled in the Conservation Reserve Program (CRP) now have a wider opportunity to enroll in a 30-year contract through the Clean Lakes, Estuaries and Rivers Initiative (CLEAR30). The USDA is expanding CLEAR30 participation nationwide and extending original 10- to 15-year CRP contracts. Interested producers with CRP contracts expiring Sept. 30, 2021, should sign up by Aug. 6, 2021. Annual rental payments for landowners who enroll in CLEAR30 will be equal to the current continuous CRP annual payment rate plus a 20% water-quality incentive and annual rate adjustment of 27.5%. The USDA also announced sign-up periods for general CRP and CRP grasslands programs. The sign-up period for the general program is July 23; the sign-up period for CRP Grasslands in Aug. 20. Contact your local USDA Service Center for information.  end mark
Dave Natzke
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