DMI CEO shares opportunities and reason for optimism in dairy farming, dairy processing
Tom Gallagher cites consumer demand for animal protein, international opportunities for fluid milk, environmental advances and a growing worldwide demand for dairy.
Orlando, Fla. – Tom Gallagher, CEO of Dairy Management Inc. (DMI), which manages the national dairy checkoff, delivered strong results and reasons for optimism to dairy farmers who are in the midst of a difficult economic year.
Gallagher spoke to more than 800 dairy farmers and industry representatives attending the 2015 joint annual meeting of the United Dairy Industry Association, National Dairy Promotion and Research Board and National Milk Producers Federation in Orlando, Fla.
“We’re here to deal with the opportunities, the optimism, the things that are going to grow your business,” he said.
Gallagher emphasized the checkoff’s goal is to be a “voice to the consumer” on behalf of the dairy farmers and importers who fund the dairy checkoff.
“We try to stimulate companies to do things with your product, to innovate with your product, to market your products and to spend money that they otherwise wouldn’t have done or to at least compress the time in which they do it to increase sales and increase trust,” he said. “We’re here to protect you and grow the business in ways that it otherwise wouldn’t have grown.”
Dairy checkoff dollars help cheese sales grow
Among Gallagher’s highlights are:
Growth of domestic cheese. Gallagher said 4 billion pounds of domestic cheese sales occurred from January of 2014 to July of 2015 and much of that resulted from the checkoff’s work with partners such as Domino’s Pizza.
“That first year we worked with Domino’s we took a big risk. By the ninth month, pizza started to turn around and it hasn’t stopped growing since then. That’s your checkoff,” he said.
Milkfat research led by the National Dairy Council (NDC). Gallagher said NDC-led research has made milkfat more acceptable in the eyes of consumers and health professionals and this could have positive ramifications on full-fat dairy products at schools.
He referenced the recent decision by McDonald’s to replace liquid margarine with butter in more than 14,000 U.S. restaurants as a catalyst that will have others following suit. The McDonald’s decision is expected to move as much as 600 million pounds of fluid milk equivalent in a year.
“I’m not sure if we have grasped the significance of milkfat yet,” he said. “It’s a great story that’s going to build forever. That story doesn’t happen without your investment.”
$750 million to revitalize fluid milk
Fluid milk partnerships. The checkoff is leading a fluid milk revitalization project with eight partners that is showing progress. More than $500 million has been invested by partners in plant revitalization efforts and another $250 million has been directed toward marketing programs.
“The farmers told us three years ago ‘either get in milk and try to fix it or get out of milk,” Gallagher said. “It has to start with changes at the plant level. If you don’t change the plant level, you can’t change what you’re providing to the consumer.”
One of the meeting’s highlights came when Gallagher called a team of checkoff staff dairy scientists to the stage to introduce themselves. Each scientist works at the headquarters of checkoff partners including Domino’s, McDonald’s, Pizza Hut, Taco Bell and Quaker. Gallagher asked each employee to reference a menu item or product advancement they are responsible for creating.
Gallagher said he did this to “put a face” on the people working behind the scenes to grow dairy demand.
“So if you’re at home and people ask you ‘what is the checkoff doing for me,’ give them the name of a product, give them the name of a person and give them the sales,” Gallagher said.
Gallagher closed the meeting with more reasons for optimism including:
• Consumer demand for animal protein
• International opportunities for fluid milk
• Environmental advances made by dairy farmers that build consumer confidence
• Growing worldwide demand for dairy
• The checkoff’s Amplification Center that is growing opportunities to share dairy’s story through social channels
• Farmers’ and importers’ continued investment in the checkoff
• Dairy farmers’ voice with consumers
Highlighting the last point, Gallagher emphasized the importance of the farmers’ collective voice to continue building consumer confidence in dairy.
“Integrity has a name, hard work has a name, family values has a name and hope has a name and that’s dairy farmers,” he said.