United States 

Department of 

Agriculture

National Dairy 

Promotion and Research 

Program

National Fluid Milk 

Processor Promotion 

Program

2010 Program Activities

Report to Congress
U.S. Department of Agriculture

Report to Congress

on the

National Dairy Promotion

and Research Program

and the

National Fluid Milk

Processor Promotion Program

2010 Program Activities 

 
ii

Contact Information

To obtain additional copies of this Report to Congress on the National Dairy Promotion and 

Research Program and the National Fluid Milk Processor Promotion Program and the complete 

independent analysis of the programs, please contact:

Promotion, Research, and Planning Division 

Dairy Programs, Agricultural Marketing Service, USDA

Stop 0233, Room 2958-South 

1400 Independence Avenue, SW

Washington, DC 20250-0233 

(202) 720-6909 

http://www.ams.usda.gov/dairy

To obtain copies of the complete independent analysis report or for questions on Chapter 3, 

please contact:

Harry M. Kaiser, Ph.D. 

Cornell Commodity Promotion Research Program 

Department of Agricultural, Resource and Managerial Economics 

Cornell University 

349 Warren Hall 

Ithaca, NY 14853 

(607) 255-1598 

http://www.cornell.edu

For additional information about the National Dairy Promotion and Research Board and Dairy 

Management Inc., please contact:

National Dairy Promotion and Research Board 

Dairy Management Inc.

10255 West Higgins Road, Suite 900 

Rosemont, IL 60018-5616 

(847) 803-2000 

http://www.dairyinfo.com

For additional information about the National Fluid Milk Processor Promotion Board, please 

contact:

National Fluid Milk Processor Promotion Board 

1250 H Street, NW, Suite 950 

Washington, DC 20005 

(202) 737-0153 

http://www.whymilk.com
iii

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and 

activities on the basis of race, color, national origin, gender, religion, age, disability, political 

beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all 

programs.) Persons with disabilities who require alternative means for communication of 

program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET 

center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 

326-W, Whitten Building, 1400 Independence Avenue, SW, Washington, DC 20250-9410 or call 

(202) 720-5964 (voice and TDD). USDA is an equal opportunity provider and employer. 
iv

Contents

Contact Information ............................................................................................................. ii

Executive Summary ...............................................................................................................1 

Chapter 1: The Dairy and Fluid Milk Promotion Programs ............................................3 

National Dairy Promotion and Research Board .......................................................................3 

National Dairy Council® ..........................................................................................................4 

Child Nutrition and Fitness Initiative. .....................................................................................5 

Fuel Up to Play 60 ...................................................................................................................5 

GenYOUth Foundation ............................................................................................................6 

Washington Post Childhood Obesity Summit .........................................................................7 

Partnerships ..............................................................................................................................7 

Domino’s..................................................................................................................................7 

Lactaid......................................................................................................................................8 

Export and Dry Ingredients ......................................................................................................8 

Innovation Center for U.S. Dairy ...........................................................................................11 

Sustainability..........................................................................................................................12 

Dairy Research Institute .........................................................................................................13 

Industry and Image Relations ................................................................................................13 

Qualified State or Regional Dairy Product Promotion, Research

 or Nutrition Education Programs .....................................................................................15 

National Fluid Milk Processor Promotion Board ..................................................................15 

Medical and Scientific Activities ...........................................................................................16 

National Fluid Milk Programs ...............................................................................................17 

Moms .....................................................................................................................................17 

Teens ......................................................................................................................................18 

Hispanic .................................................................................................................................20 

Board Research and Development .........................................................................................21 

Chapter 2: USDA Activities ...............................................................................................24 

National Dairy Promotion and Research Board Oversight ....................................................24 

Nominations and Appointments ............................................................................................24 

Organic Exemption ................................................................................................................24 

Amendment to the Dairy Act .................................................................................................25 

Foreign Agricultural Service..................................................................................................25 

Contracts ................................................................................................................................25 

Contractor Audits ...................................................................................................................26 

Collections .............................................................................................................................26 

Compliance ............................................................................................................................26 

Qualified Programs ................................................................................................................26 

National Fluid Milk Processor Promotion Board Oversight ..................................................27 

Nominations and Appointments ............................................................................................27 

Program Development ...........................................................................................................27 
v 

Contents, continued

Contractor Audits ...................................................................................................................27 

Compliance ............................................................................................................................27 

Chapter 3: Impact of Generic Fluid Milk and Dairy Advertising and Promotion 

 on Dairy Markets: An Independent Analysis .................................................................28 

Highlights ...............................................................................................................................29 

Analysis of Generic Fluid Milk Marketing ............................................................................30 

Fluid Milk Model Estimation ................................................................................................37 

Fluid Milk Model Simulation ................................................................................................40 

Fluid Milk Processor Benefit–Cost Analysis .........................................................................40 

Analysis of All-Dairy Product Generic Marketing ................................................................43 

All Dairy Products Model Estimation....................................................................................46 

Dairy Farmer Benefit–Cost Analysis .....................................................................................49 
1 

Executive Summary

The enabling legislation of the dairy producer and fluid milk processor promotion programs 

requires the Department of Agriculture (USDA) to submit an annual report to the House 

Committee on Agriculture and the Senate Committee on Agriculture, Nutrition, and Forestry. 

The producer and processor programs are conducted under the Dairy Production Stabilization 

Act of 1983 (7 U.S.C. 4501 et seq.) (Dairy Act); the Dairy Promotion and Research Order 

(7 CFR § 1150) (Dairy Order); the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6401 et seq.) 

(Fluid Milk Act); and the Fluid Milk Promotion Order (7 CFR § 1160) (Fluid Milk Order), 

respectively. This report includes summaries of the activities for the producer and processor 

programs, including an accounting of funds collected and spent; USDA activities; and an 

independent analysis of the effectiveness of the advertising campaigns of the two programs. 

Unless otherwise noted, this report addresses program activities for the fiscal period January 1 

through December 31, 2010, of the Dairy Promotion and Research Program and the Fluid 

Milk Processor Promotion Program. 

National Dairy Promotion and Research Program 

Mandatory assessments collected under the Dairy Act totaled $289.9 million in 2010. The 

National Dairy Promotion and Research Board (Dairy Board) portion of the revenue from 

the 15-cent per hundredweight producer assessment was $95.9 million for 2010, and Qualified 

Programs revenue from the producer assessment was $194 million. Expenditures by the Dairy 

Board and many of the Qualified Programs are integrated through a joint process of planning and 

program implementation so that the programs on the national, regional, State, and local level 

work together. The Dairy Board continued to develop and implement programs to expand the 

human consumption of dairy products by focusing on partnerships and innovation, product 

positioning with consumers, and new places for dairy product consumption. 

The Dairy Board continued its support for Fuel Up to Play 60, a partnership between the 

National Dairy Council, the National Football League, and in collaboration with the USDA, to 

combat childhood obesity in schools. Working through the Innovation Center for U.S. Dairy, the 

dairy industry completed a carbon footprint study that measured the greenhouse gas emissions 

associated with producing a gallon of milk. Results of the study showed that the U.S. dairy 

industry accounts for approximately 2 percent of total U.S. greenhouse gas emissions. Keeping a 

focus on research in 2010, the Dairy Board, through Dairy Management, Inc. (DMI) created the 

Dairy Research Institute to expand and create greater research investment efficiencies for 

nutrition and product research. Details of the activities of the Dairy Board are presented in 

Chapter 1. 

National Fluid Milk Processor Promotion Program 

The National Fluid Milk Processor Promotion Board (Fluid Milk Board) continued to administer 

a generic fluid milk promotion and consumer education program funded by America’s fluid milk 

processors. The program is designed to educate Americans about the benefits of milk, increase 

milk consumption, and maintain and expand markets and uses for fluid milk products in the 48 

States and the District of Columbia. During 2010, the Fluid Milk Board evolved its messaging to 
2 

support “Building Strong Families.” Messaging centered on reminding consumers about family 

occasions that can include milk. Additionally, serving as a central theme, the Fluid Milk Board 

continued its’ successful exercise and refuel messaging. 

The Fluid Milk Board’s messaging in 2010 kicked off with the “Great Gallon Give,” and 

continued through the year with the “Milk the Moment” campaign. This promotion reminded 

moms to encourage drinking milk as a family during mealtimes. For teens, the Fluid Milk Board 

continued messaging for the “Refuel With Chocolate Milk” campaign to continue to stress the 

importance of muscle recovery and rehydration post-exercise by drinking a glass of low–fat or 

fat–free chocolate milk. 

Assessments generated $106.9 million in 2010. The Fluid Milk Order requires the Fluid Milk 

Board to return 80 percent of the funds received from California processors to the California 

Milk Processor Board. The amount returned to California from the 2010 assessments was 

$10.0 million. The California fluid milk processor promotion program uses the funds to conduct 

its promotion activities, which include the got milk?® advertising campaign. The fluid milk 

marketing programs are research based and message focused. The 2010 activities of the 

National Fluid Milk Processor Promotion Program are presented in Chapter 1 of this report. 

USDA Oversight

USDA has oversight responsibility for the dairy producer and fluid milk promotion programs. 

The oversight objectives ensure that the boards and qualified programs properly account for all 

program funds and that they administer the programs in accordance with the respective acts and 

orders. All advertising, promotional, research, and educational materials are developed under 

established guidelines. All board budgets, contracts, and advertising materials are reviewed and 

approved by USDA. USDA employees attend all board and committee meetings, monitor all 

board activities, and have responsibility for obtaining an independent evaluation of the programs. 

Additional USDA responsibilities relate to nominating and appointing board members, amending 

the Orders, conducting referenda, assisting with noncompliance cases, and conducting periodic 

program audits. The boards reimburse the Secretary of Agriculture (Secretary), as required by 

the acts, for all of USDA’s costs of program oversight and for the independent analysis. In 2010 

the Secretary appointed 12 members to the Dairy Board and 7 members to the Fluid Milk Board. 

Chapter 2 details USDA’s oversight activities. 

Independent Analysis 

Chapter 3 presents the results of the independent econometric analysis, conducted by Cornell 

University (Cornell), of the effectiveness of the dairy producer and fluid milk promotion 

programs. It is estimated that the generic fluid milk marketing efforts activities sponsored by 

fluid milk processors and dairy producers have helped mitigate the decline of fluid milk 

consumption. Had there not been a generic fluid milk marketing conducted by the two 

programs, fluid milk consumption would have been 13.9 percent less than it actually was over 

the period of 1995–2010. Cornell concluded that these marketing efforts have had a positive and 

statistically significant impact on per capita fluid milk consumption. Details of Cornell’s 

independent evaluation are presented in Chapter 3. 

 
3 

Chapter 1

The Dairy Producer and Fluid Milk Promotion Programs

The Dairy Board and the Fluid Milk Board continued to develop and implement programs to 

expand the human consumption of dairy products and fluid milk. This chapter details the 

activity of each board. 

National Dairy Promotion and Research Board 

The mission of the Dairy Board is to coordinate a promotion and research program that 

maintains and expands domestic and foreign markets for fluid milk and dairy products produced 

in the United States. The Dairy Board is responsible for administering the Dairy Order, 

developing plans and programs, and approving budgets. Its dairy producer board of directors 

administers these plans and monitors the results of the programs. 

The Secretary of Agriculture (Secretary) appoints 36 dairy producers to administer the Dairy 

Order. The appointments are made from nominations submitted by producer organizations, 

general farm organizations, qualified State or regional dairy products promotion, research or 

nutrition education programs (Qualified Programs), and by other means as determined by the 

Secretary (7 CFR §1150.133(a)). Dairy Board members serve 3-year terms and represent 

1 of 13 regions in the contiguous 48 States. Dairy Board members elect four officers: Chair, 

Vice Chair, Treasurer, and Secretary. Dairy Board members are listed in Appendix A–1. A map 

of the contiguous 48 States depicting the 13 geographic regions is shown in 

Appendix H–1. 

Total Dairy Board revenue for 2010 was $95.9 million (including assessments and interest). The 

Dairy Board amended its budget to $105.8 million by incorporating program development funds 

not budgeted previously and carry-forward from their 2009 budget. The Dairy Board budget for 

2011 projects total revenue of $96.2 million from assessments and interest. The Dairy Board’s

administrative budget continued to be within the 5–percent–of–revenue limitation required by 

the Dairy Order (7 CFR §1150.151(a)). A list of actual income and expenses for 2010 is 

provided in Appendix B–1. USDA’s oversight and evaluation expenses for 2010 are listed in 

Appendix B–2. Appendix B–3 displays the Dairy Board’s approved budget for 2010. An 

independent auditor’s report for 2010 is provided in Appendix C–1. 

The Dairy Board has two standing committees: the Finance and Administration (F&A) 

Committee and the Executive Committee. The F&A Committee is made up of the Dairy Board 

officers and appointees named by the Dairy Board Chair. The Dairy Board Treasurer is the chair 

of the F&A Committee, and the full Dairy Board serves as the Executive Committee. The 

remaining committees for the Dairy Board are joint program committees with the United Dairy 

Industry Association (UDIA). 

Dairy Management Inc. (DMI), a management and staffing corporation, is a joint undertaking 

between the Dairy Board and UDIA. UDIA is a federation of 18 of the 58 Qualified Programs 

under the direction of a board of directors. DMI manages the Dairy Board programs as well as 
4 

those of the American Dairy Association® and National Dairy Council®. The mission of DMI is 

to drive increased sales of and demand for U.S. dairy products and ingredients, on behalf of U.S. 

dairy farmers. DMI works proactively in partnership with leaders and innovators to increase and 

apply knowledge that leverages opportunities to expand dairy markets. The DMI Board of 

Directors comprises all Dairy Board (36) and all UDIA (44) members. Voting is equalized 

between the Dairy Board and UDIA.

DMI serves both boards and facilitates the integration of producer promotion funds through a 

joint process of planning and program implementation so that the programs on the national, 

regional, State, and local level work together. The Dairy Board and UDIA Board separately 

must approve the DMI budget and annual plan before they can be implemented. In December 

2009, both boards approved the 2010 unified dairy promotion plan budget and national 

implementation programs. During 2010, DMI continued to implement a national staffing 

structure which utilizes personnel throughout DMI and the UDIA federation to plan and execute 

the national programs. 

DMI funds 1 to 3–year research projects that support marketing efforts. Six Dairy Foods 

Research Centers and one Nutrition Institute provide much of the research. Their locations and 

the research objectives are listed in Appendix E–1. DMI’s dairy foods competitive research 

activities and nutrition competitive research projects can be found in Appendices E–2 and E–3, 

respectively. Universities and other industry researchers throughout the United States compete 

for these research contracts.

The joint Dairy Board and UDIA Board committee structure provides the framework for DMI 

program activities. The Dairy Board and UDIA Board Chairs assign their respective board 

members to the following joint program committees: Research and Insights; Health and 

Wellness; Export and Ingredients; and Producer Relations and Consumer Confidence. Each 

committee elects a Chair and Vice-Chair. The joint committees and the DMI staff are 

responsible for setting program priorities, planning activities and projects, and evaluating results. 

During 2010, the Dairy Board and UDIA Board met jointly six times.

DMI again hosted dairy director regional planning forums across the country to review and 

create marketing strategies for development of the unified dairy promotion plan. These forums 

are designed to create one unified dairy promotion plan and allow opportunity for grass roots 

dairy producers to ask questions, raise concerns, and offer their thinking on the plan’s direction 

and development. 

The following information describes Dairy Board and UDIA program activities along with new 

programs and initiatives implemented in 2010. 

National Dairy Council®

The National Dairy Council® http://www.nationaldairycouncil.org (NDC), the nutrition 

marketing arm of DMI, has been the leader in dairy nutrition research, education, and 

communication since 1915. NDC provides timely, scientifically sound nutrition information to 

the media, physicians, dieticians, nurses, educators, consumers, and other health professionals. 
5 

Additionally, NDC funds independent research to aid in the ongoing discovery of information 

about dairy foods’ important role in a healthy lifestyle. This research provides insights to 

industry for new dairy product innovation.

Health professional outreach remained a critical component of NDC and the 3-Every-DayTM

program. The American Academy of Family Physicians, the American Academy of Pediatrics, 

the American Dietetic Association, the National Medical Association, the School Nutrition 

Association, and the National Hispanic Medical Association all continued their support and 

partnership with DMI and 3-Every-DayTM. By working with key health professional partners like 

these, DMI continued to provide a clear, practical message to the public on the importance of 

consuming three daily servings of low–fat and fat–free dairy. Combined, these organizations 

represent more than 250,000 health professionals nationwide. 

As an extension of its online engagement of health professionals, NDC continued its blog, “The 

Dairy Report” (www.thedairyreport.com). Blog contributors include NDC registered dietitians, 

Ph.D. nutritionists and communication experts, as well as guest experts. Through the blog, NDC 

provides the latest news, analysis, and opinion on nutrition and health research related to dairy. 

NDC continued its active support and participation in the 

Action For Healthy Kids® (AFHK) initiative. AFHK 

(www.actionforhealthykids.org) was created in response 

to the Healthy Schools Summit in 2002 and its mission is 

to inform, motivate, and mobilize schools, school districts, 

and States to chart a healthier course for the Nation’s children and adolescents. AFHK is 

comprised of 51 State teams (including all 50 States and the District of Columbia) and a 

partnership of more than 40 national organizations and Government agencies spanning 

education, health, fitness, and nutrition arenas. 

Child Nutrition and Fitness Initiative

The Child Nutrition and Fitness Initiative (CNFI) is a platform of health and wellness initiatives 

designed to improve the health and wellness of the Nation’s youth, many of whom are 

overweight and undernourished. CNFI’s initiatives are focused on reaching youth in schools and 

build on existing producer–funded programs, including New Look of School Milk and 

Expanding Breakfast. The programs use youth–focused messaging to educate and motivate 

children to consume a healthy diet that includes milk and dairy products and get daily physical 

activity. Additionally, CNFI’s priorities align with the strategies of the Health and Wellness 

Committee of the Innovation Center for U.S. Dairy. 

Fuel Up to Play 60 

Fuel Up to Play 60 (FUTP60) is the centerpiece of CNFI. This 

in–school program combines the nutrition expertise of NDC and 

the fitness expertise and star power of the National Football 

League (NFL) to combat childhood obesity and provide youth 
6 

with resources necessary to improve their personal health and school environment. FUTP60 is 

based on the U.S. Dietary Guidelines for Americans that recommend the consumption of more 

fruits, vegetables, low–fat and fat–free dairy foods, and whole grains, and getting 60 minutes of 

daily physical activity. 

FUTP60 reached more than 36 million students in more than 70,000 schools during the 

2010/2011 school year. Students and schools joined the program by signing up at 

www.fueluptoplay60.com. Each enrolled school received a School Wellness Kit that contained 

in–school promotional materials and a “Playbook” containing healthy eating and physical 

activity strategies, or “plays.” Each of the plays could be tailored to individual school health and 

wellness needs. Students were encouraged to form teams, with supervision from an adult 

program advisor, to carry out the plays and generate excitement for making healthy changes 

throughout the student body. 

FUTP60 gained further momentum during the 2010/2011 school year when representatives from 

USDA, the Department of Education, the Department of Health and Human Services, NDC, the 

NFL, and a newly formed foundation, Gen YOUth, signed a memorandum of understanding 

setting a new precedent for public-private partnerships and a cross-department collaboration 

committed to childhood health and wellness, in February 2011. Additionally, the event included 

the debut of a public service announcement (PSA) developed by the Ad Council in collaboration 

with Michelle Obama’s Let’s Move! program, USDA, NFL, NFL Player Association, NDC, and 

Brunner advertising. The PSA features Tony Romo, Quarterback for the Dallas Cowboys, and 

encourages youth to get healthy and be active by joining the FUTP60 movement. The television 

spot aired nationwide in time donated by the media, per the Ad Council model, and is featured 

on the FUTP60 website. 

Gen YOUth Foundation 

The Gen YOUth Foundation (Foundation) was launched in 2011 by NDC as a non-profit 

organization whose mission is to create a movement that will inspire youth to change their 

behavior. The Foundation will work with schools, communities, and business partners to 

develop and support programs that create lasting changes in the child health and wellness arena, 

including FUTP60. 

The Foundation is governed and managed by a board of directors that covers multiple fields of 

expertise, including agriculture, health and nutrition, sports and fitness, media, education and the 

culinary arts. The Foundation Board will meet twice a year to identify sustainable solutions to 

the childhood obesity epidemic. Board members include: 16th U.S. Surgeon General Dr. David 

Satcher, known for first labeling childhood obesity an epidemic; National PTA President Charles 

Saylors; former NFL player and FOX Sports commentator Howie Long; Washington Post Senior 

Associate Editor Lally Weymouth; Top Chef All-Star Carla Hall; LALA USA Chief Executive 

Officer (CEO) Steve McCormick; and Purdue University Foods and Nutrition Department Head 

Dr. Connie Weaver. Former financial executive and media personality Alexis Glick will oversee 

the Board of Directors as CEO of the Gen YOUth Foundation. 
7 

Washington Post Childhood Obesity Summit 

FUTP60 and the Foundation co-hosted “Weighing In on America’s Future: Childhood Obesity 

Summit” with the Washington Post in March 2011. The summit highlighted successful 

approaches and programs that are helping children become healthier. The summit was 

comprised of panel discussions, question and answer sessions, and a live on-site poll that 

provided insight on the issue of childhood obesity. Approximately 160 national decision 

makers, health and nutrition professionals, academia, business leaders, and media attended the 

event. An additional 2,500 people throughout the country streamed the event online and 

participated by asking questions and participating in polls. 

Participants in the panel discussions agreed that solving the issue of childhood obesity requires

partnerships that bring together industry, parents, and communities and that local initiatives are 

just as important as larger, national initiatives. Additionally, the panel participants stated that 

childhood obesity is a financial and national security issue and that education about health and 

nutrition is a key to curbing childhood obesity. 

Partnerships

Domino’s 

DMI continued its partnership with Domino’s Pizza (Domino’s) in 2010 

through the collaboration of increasing the availability of Smart Slice pizza.

Domino’s Smart Slice is a line of kid-approved pizzas that uses light and 

reduced-sodium mozzarella cheese in addition other reduced-fat and 

reduced-sodium ingredients. Domino’s Smart Slice is available in 317 U.S. school districts, 

moving nearly 3.5 million pounds of milk through more than 2,000 schools. The Smart Slice 

line was also promoted through 50-plus school nutrition shows and industry conferences. 

DMI continued to support Domino’s American Legends line of pizzas in 2010. The American 

Legends line of pizzas was launched by Domino’s as a permanent menu item that use up to 40 

percent more cheese than a regular Domino’s pizza. Through the checkoff’s partnership, a 

seventh pizza, the Wisconsin 6 Cheese, was added to the American Legends line. The 

Wisconsin 6 Cheese quickly became the third most popular pizza during a one-month national 

promotion that resulted in a 12 percent increase in cheese sales compared with a 2009 promotion 

period. The other American Legends pizzas include: 

• Honolulu Hawaiian – sliced ham, smoked bacon, pineapple, and roasted red peppers with 

Provolone and Mozzarella cheeses on a cheesy Parmesan crust. Customers can add 

Tabasco® pepper sauce and jalapenos for some extra “fire.” 

• Cali Chicken Bacon RanchTM – chicken breast, white sauce, smoked bacon, tomatoes, 

and parsley with Provolone and Mozzarella cheeses on a cheesy Parmesan crust. 

• Pacific Veggie – roasted red peppers, spinach, onions, mushrooms, tomatoes, and black 

olives with Feta, Provolone and Mozzarella cheeses on a cheesy Parmesan crust. 
8 

• Memphis BBQ Chicken – chicken breast, barbecue sauce, onions, and parsley with 

Cheddar, Provolone, and Mozzarella cheeses on a cheesy Parmesan crust. 

• Buffalo Chicken – chicken breast, buffalo hot sauce, onions, and parsley with American 

and Provolone cheeses on a cheesy Cheddar crust. 

• Philly Cheese Steak – steak, onions, green peppers, and mushrooms with American and 

Provolone cheeses on a cheesy Provolone crust. 

Lactaid 

The dairy industry has committed resources to better understanding lactose intolerance, which 

keeps many consumers from consuming dairy products. DMI partnered with HP Hood and its 

Lactaid brand to educate consumers about lactose intolerance and the variety of dairy foods that 

can be enjoyed by lactose intolerant individuals. The lactose-free fluid milk category grew by 

nearly 80 million incremental pounds in 2010. 

MooVision, a social media tool, was created to help address misperceptions about lactose 

intolerance, lactose-free milk, and to encourage consumers to share their ideas for managing the 

condition. The website, www.moovision.com, features a series of shows including: Moolah!, a 

trivia game about lactose-free milk; Gourmoo, a series of cooking demonstrations featuring 

lactose-free milk; and Moo News, a mockumentary news channel that covers breaking news for 

milk lovers. The website also features lactose-free milk recipes, a blog, and educational 

material, including links to the NDC and the National Institutes of Health. 

DMI and NDC also placed an emphasis on educating health professionals by hosting a webinar 

titled “New Directions in Lactose Intolerance: Moving from Science to Solutions.” NDC also 

created a lactose intolerance education kit that contained resources for health professionals such 

as a lactose intolerance patient education handout and a consumer research fact sheet. 

Export and Dry Ingredients

DMI’s export enhancement program is implemented by the U.S. Dairy Export Council 

(USDEC), supported by U.S. dairy producers through the checkoff program. USDEC receives 

primary funding from three sources: DMI, USDA’s Foreign Agricultural Service (FAS), and 

membership dues from dairy cooperatives, processors, exporters, and suppliers. In 2010, 

USDEC received $12.1 million from DMI; $5.8 million from USDA’s Market Access Program, 

Foreign Market Development Program, and other FAS programs that support commodity groups 

in promotion of their commodities in foreign markets; $830,000 from membership dues; and 

$624,000 from other sources. USDEC began its 15th year of operation in 2010 and its total 

budget was approximately $20 million. 

USDEC has offices in Washington, D.C.; Mexico City, Mexico; Tokyo, Japan; Seoul, South 

Korea; Hong Kong, Taipei, and Shanghai, China; Bangkok, Thailand; Beirut, Lebanon; London, 

England; and São Paulo, Brazil (Figure 1–1). 
9 

Figure 1–1. USDEC Offices.

After struggling through 2009, the U.S. dairy sector redoubled their efforts to serve global buyers 

and recaptured share they had lost the previous year. In doing so, they chipped further away at an 

unflattering portrayal as an opportunistic participant in global trade and built on a budding 

reputation as committed suppliers to the world. 

Export data confirms that U.S. dairy product export value reached $3.7 billion, while volume 

reached 3.04 billion pounds in 2010 (Figure 1–2). In 2010, 12.8 percent of total U.S. milk solids 

were exported, while imports represented 2.9 percent. For comparison, in 2009, exports 

represented 9.3 percent of U.S. milk solids production and imports were greater at 3.4 percent

(Figure 1–3).

Figure 1–2. Value and Volume of U.S. Dairy Exports. 

Source: NMPF, USDA
10 

Figure 1–3. U.S. Dairy Trade Balance, 1996–2010. 

Source: USDEC, USDA

Exports showed increasing levels, representing 47 percent of the nonfat dry milk and skimmed 

milk powder produced in the United States last year, 55 percent of the whey proteins, 68 percent 

of the lactose, 7.9 percent of the butter, and 3.7 percent of the cheese. Mexico, Canada, and 

Southeast Asia remained the largest destinations for U.S. dairy products. 

Over the last 15 years, the investment that U.S. dairy producers and processors have made in 

USDEC’s marketing programs and technical support has helped suppliers position themselves 

for the more globalized business setting seen today. 

USDEC, with the support of U.S. dairy producers through their checkoff, continued working to 

improve the global (export and U.S. ingredient) capabilities of domestic dairy companies by 

providing up–to–date information on market conditions, global trade trends, and regulatory 

requirements for export. 

USDEC continued the use of the Web site www.innovatewithdairy.com to help increase demand 

for U.S. dairy ingredients by promoting how dairy adds the difference in taste, functionality, and 

convenience. The ingredient program supports dairy product and nutrition research, ingredient 

applications, development, and technical assistance for the dairy, food, and beverage industries. 

Dairy, food, and beverage manufacturers use this program to find know-how, laboratory, and 

professional resources to help develop or improve foods using dairy ingredients. 

Publications that support the innovation and ingredients program include: (1) Dairy Council 

Digest–published six times per year focuses on the latest dairy nutrition research relevant to 

dairy, food and beverage manufacturers, and health professionals; (2) Ingredient Specification 

Sheets–cover technical basics of a variety of dairy ingredients and are updated as new data is 
11 

available; (3) Dairy Herald–reports periodically on how food formulators and markets can take 

advantage of taste, cost, functional, and nutritional appeal of dairy ingredients; (4) Application 

Monographs–published as necessary, provide a comprehensive look at how whey protein and 

other dairy ingredients can be used in foods and beverages for different functionality needs; 

(5) Tools for Innovation–a periodic supplement from DMI and Dairy Foods magazine that 

covers dairy product trends and research; (6) Innovations in Dairy–a technical bulletin, published 

two to three times a year on specific topics in dairy products, ingredients, processing, and 

packaging; and (7) Dairy Business View–an e-newsletter published bi-monthly with Dairy Foods

magazine covers dairy industry news, new technologies, business trends, innovation, and 

research.

Innovation Center for U.S. Dairy 

Dairy producers, processors, and manufacturers 

announced an unprecedented agreement in 2008 

to collaborate on pre-competitive initiatives 

through a new Innovation Center for U.S. Dairy 

(Innovation Center). The goal of the agreement is 

to accelerate industry innovation throughout the supply chain to increase sales in an increasingly 

competitive consumer marketplace.

The Innovation Center was established by dairy producers through DMI. It is the first 

organization of its kind to bring together milk producers, processors, and manufacturers under 

one organization to collaborate on major issues affecting the industry. 

The Innovation Center provides a forum for the entire dairy industry to work together to offer 

consumers the products they want—when and where they want them—and increase dairy sales 

through pre-competitive collaboration. It combines the collective resources of the industry to 

provide consumers with nutritious dairy products and foster industry innovation for healthy 

people, healthy products, and a healthy planet. The Board of Directors for the Innovation Center 

represents leaders from across the dairy value chain, including producers and chief executives of 

the Nation’s leading processors, manufacturers and brands. The Innovation Center is supported 

and staffed by DMI. The priorities include: Sustainability, Health and Wellness, Product 

Development, Information and Communications, Regulatory Issues (excludes pricing), 

Consumer Confidence, and Globalization. 

The Innovation Center will move forward its priorities through enlisting cross-industry 

Operational Committees charged with developing action plans. These committees and purposes 

include: Health and Wellness Committee – to increase category sales and demand for dairy 

products by identifying and meeting the health and wellness needs and desires of consumers; 

Product Development and Information Committee – to act as the steward of the pre-competitive 

innovation assets and resources of the industry; Globalization – to provide a strategic analysis of 

the global dairy landscape to provide a common understanding of the challenges, opportunities, 

and threats posed by increasing globalization to the U.S. dairy industry; and Sustainability – to 

provide consumers with the nutritious dairy products they want in a way that is economically 

viable, environmentally sound, and socially responsible. 
12 

Sustainability 

Dairy leaders continued their industry-wide commitment to reduce fluid milk’s carbon footprint 

while increasing business value, from farm to consumer. Through this commitment, the 

sustainability initiative achieved a significant milestone in 2010 with the completion of a carbon 

footprint study that measured the greenhouse gas (GHG) emissions associated with a gallon of 

milk in the United States. 

The lifecycle assessment (LCA) studied the entire life cycle of a gallon of milk, starting with the 

raw materials and ending after consumer use and disposal. The Innovation Center commissioned 

the Applied Sustainability Center at the University of Arkansas, one of the Nation’s leading 

agricultural LCA research groups, to conduct the LCA of fluid milk. The study, together with 

data from additional studies measuring GHG emissions helped validate that total U.S. dairy 

GHG emissions are approximately 2.0 percent of total U.S. emissions. This is far less than 

earlier figures reported about the global livestock industry. Key learnings from the study showed 

that management practices, rather than the size or location of the farm or processing facility, 

makes the biggest difference in reducing GHG emissions. Additionally, the study created a 

scientific foundation to measure progress and provides a basis for dairy businesses to make 

independent decisions about management practices that are economically and environmentally 

feasible for their operations. The findings of the study were presented at the International Food 

LCA Conference in Italy in September 2010 and were submitted for publication in a peerreviewed journal.

In addition to the LCA study, dairy leaders continued to focus on their industry-wide action plan 

that was an outcome of the industry’s June 2008 Sustainability Summit for U.S. Dairy, a 

gathering of 250 leaders representing producers, processors, non-governmental organizations, 

university researchers, and government agencies, held in Rogers, Arkansas. 

The plan focuses on operational efficiencies and innovations to reduce greenhouse gas emissions 

while ensuring financial viability and industry growth. The dairy industry has committed to a 

goal to reduce the carbon footprint of fluid milk by 25 percent by the year 2020 — equivalent to 

taking more than 1.25 million cars off the road every year. The industry will reduce greenhouse 

gas emissions throughout the entire dairy value chain – from production of feed for dairy cows 

through retail. Based on goals from the Sustainability Summit, 12 prototype projects are being 

tested to determine their real–world viability as ways to reduce greenhouse gas emissions. 

1. Dairy Feed Systems – Nutrient management techniques and best practices.

2. Farm Energy Audit Program (FEAP) – Energy audits of dairy operations to find energy 

saving techniques. 

3. Cow of the Future – Reduction of enteric methane by accelerating identification and 

adoption of new practices and technologies.

4. Dairy Underground – Assesses the viability of turning digester-generated methane into 

salable energy and the reduction of operational costs. 

5. Dairy Power – Explores barriers to methane digester adoption. 
13 

6. Dairy Processing Carbon through Energy Efficiency (D-CREE) – Identification and 

adoption of energy efficiency best practices in milk processing plants. 

7. Non-Thermal UV Processing – The use of UV technology as an alternative method to 

heat–based pasteurization. 

8. Next Generation Clean-In-Place (CIP) – Reduced–temperature CIP technologies to 

reduce costs and greenhouse gas emissions. 

9. Dairy Delivery Systems Life Cycle Assessment (LCA) – Assessment of the 

environmental impact of fluid milk products. 

10. Environmentally Sustainable Methods for Achieving Responsible Transportation 

(E-SMART) – Transportation and fuel efficiency best practices.

11. Financial Resources – Coordination for funding sources for the greenhouse gas reduction 

projects that fall outside of the scope of the checkoff program. 

12. Common Voice – Supports strategies and awareness of greenhouse gas reduction goals, 

projects, best practices, and results. 

Dairy Research Institute

The Dairy Research Institute (DRI) 

was created by DMI in 2010 to 

conduct research on behalf of the 

Innovation Center, the NDC, and other sponsors, by building on dairy producers’ investment in 

research. The nonprofit organization works with and through industry, academic, government, 

and commercial partners to increase pre-competitive, technical research in nutrition, products, 

and sustainability. DRI is the first organization of its kind to provide an industry-wide approach 

to technical research for the dairy industry. 

The Innovation Center board of directors identifies pre-competitive priorities that address 

industry research issues and opportunities. Then, DRI defines an industry-wide research plan 

and identifies funding for the plan. 

DRI research priorities are categorized into four areas. Nutrition Research includes blood 

pressure, dairy protein, digestive health, milk fat/cheese, obesity, metabolic, health, body 

composition, and performance, and relationship of food and beverage nutrient density to climate 

impact. Product research includes applications and technical support, cheese, fluid milk/cultured 

products, milk ingredients/fractions, partnerships, and whey/co-products. Sustainability research 

projects include greenhouse gas reduction opportunities and lifecycle assessments. Finally, 

planning/partnership/regulatory research includes business development strategy, planning and 

partnerships, and regulatory affairs guidance. 

Industry and Image Relations 

Each year, fewer consumers are connected to food production and receive mixed messages 

through the media about the agriculture industry. As part of an effort to help protect the image 

of dairy producers and the dairy industry among the public, DMI continued its Website, 

www.dairyfarmingtoday.org. The site educates the public about how today’s dairy producers 

care for their animals, protect the land, and produce safe, wholesome milk.
14 

To help dairy producers directly communicate with consumers about dairy farming practices, 

DMI continued its “Telling Your Story” (TYS) program. TYS provides dairy producers with 

public relations, presentation, and media training to build and maintain consumers’ confidence in 

the dairy industry’s production practices and products. 

DMI continued the social media component of its TYS program, which utilizes Facebook, 

YouTube, blogs, and other social media. The goal of myDairy is to develop a network of social 

media–savvy dairy advocates who use online communication to tell the dairy industry’s story, 

reinforce and build its positive image, and counter inaccurate or uninformed online commentary 

about dairy farming practices. Dairy producers and industry representatives are provided with an 

online toolkit of social media and dairy resources that can be used to tell dairy’s story through 

blogs, social networking sites, and positive dairy videos and photos. 

DMI also worked to inform dairy producers about how their assessment dollars were being used. 

The organization continued to communicate to dairy producers and other industry audiences 

through the TYS program, publications (such as the annual report, joint newsletters with 

Qualified Programs, and dairy cooperative check inserts), dairy industry events (including major 

trade shows and producer meetings), and media relations (including press releases, feature 

placement, and farm broadcast interviews). 

DMI continued its Issues Management and Crisis Readiness programs in 2010. DMI staff and 

related dairy industry representatives work to monitor and identify current and potential issues 

where the safety, benefit, or reputation of dairy producers or dairy products may be called into 

question publicly. As needed, the network of representatives respond to media requests, train 

dairy spokespeople, build third–party relationships within the agricultural industry, and distribute 

media alerts with key messages to maintain consistent industry–wide responses. Primary areas 

of focus include animal welfare, environment, sustainability, food safety, child nutrition, and 

modern farming practices. 

The Crisis Readiness program continued to develop a strong network of dairy industry and 

agricultural representatives. Through this coordinated effort, a communication plan was 

developed to communicate quickly, accurately, and effectively in the event of a crisis, such as 

disease outbreak, product contamination, or food-borne illness. The checkoff led three regional 

crisis drills in 2010 that engaged many sectors of the industry, focusing on hypothetical scenarios 

ranging from animal disease outbreaks to the international tampering of dairy products. These 

drills help to maintain the industry’s state of readiness and reinforce the critical nature of steps 

taken within the first 24 hours of a crisis. 

DMI continued its support for butter through cooperation and public relations activities with the 

American Butter Institute, including the Web site www.butterisbest.com, a consumer resource 

center with current cooking trends and ideas, butter recipes, and links to other butter-related Web 

sites. DMI also continued to work with Wisconsin Milk Marketing Board to execute co-funded 

retail butter promotion activities. The national effort helped to drive incremental retail butter 

sales in select markets across the United States.
15 

Qualified State or Regional Dairy Product Promotion, Research, or Nutrition Education 

Programs 

Qualified State or Regional Dairy Product, Promotion, Research, or Nutrition Education 

Programs (Qualified Programs) are certified annually by the Secretary. To receive certification, 

the Qualified Program must: (1) conduct activities that are intended to increase human 

consumption of milk and dairy products generally; (2) have been active and ongoing before 

passage of the Dairy Act, except for programs operated under the laws of the United States or 

any State; (3) be primarily financed by producers, either individually or through cooperative 

associations; (4) not use a private brand or trade name in its advertising and promotion of dairy 

products (unless approved by the Dairy Board and the Secretary); and (5) not use program funds 

for the purpose of influencing governmental policy or action (7 CFR §1150.153). A list of the 

Qualified Programs is provided in Appendix F. 

The aggregate revenue from the producers’ 15-cent per hundredweight assessment directed to the 

Qualified Programs in 2010 was $194 million (approximately 10 cents out of the 15-cent 

assessment). See Appendix B–7 and Appendix B–8 for aggregate income and expenditure data 

of the Qualified Programs.

Some of these Qualified Programs participate in cooperative efforts conducted and coordinated 

by other Qualified Programs and/or other organizations such as DMI, the Dairy Board, and 

UDIA. Their goal in combining funding and coordinating projects is more effective and efficient 

management of producers’ promotion dollars through larger, broad-based projects. For example, 

UDIA coordinates nationally through DMI the programs and resources of 18 federation members 

and their affiliated units to support the unified marketing plan. 

National Fluid Milk Processor Promotion Board 

The National Fluid Milk Processor Promotion Board (Fluid Milk Board) as authorized in the 

Fluid Milk Act administers a fluid milk promotion and consumer education program that is 

funded by fluid milk processors. The program is designed to educate Americans about the 

benefits of milk, increase fluid milk consumption, and maintain and expand markets and uses for 

fluid milk products in the contiguous 48 States and the District of Columbia. The fluid milk 

marketing programs are research-based and message-focused for the purpose of positively 

changing the attitudes and purchase behavior of Americans regarding fluid milk. 

The Secretary appoints 20 members to the Fluid Milk Board. Fifteen members are fluid milk 

processors who each represent a separate geographical region, and five are at-large members. Of 

the five at-large members, at least three must be fluid milk processors and at least one must be 

from the general public. Four fluid milk processors and one public member serve as at-large 

members on the current Fluid Milk Board. The members of the Fluid Milk Board serve 3-year 

terms and are eligible to be appointed to two consecutive terms. The Fluid Milk Promotion 

Order (Fluid Milk Order) provides that no company shall be represented on the Fluid Milk Board 

by more than three representatives. Fluid Milk Board members are listed in Appendix A–2. A 

map of the Fluid Milk Board regions is shown in Appendix H–2. 
16 

The Fluid Milk Board elects four officers: Chair, Vice-Chair, Secretary, and Treasurer. Fluid 

Milk Board members are assigned by the Chair to the Fluid Milk Board’s target-focused program 

committees (Moms, Teens, Hispanics, and Business Development and Research) to address the 

Fluid Milk Board’s concern that it provide the best possible oversight of program spending. The 

program committees are responsible for setting program priorities, planning activities and 

projects, and evaluating results. The Fluid Milk Board maintains a Finance Committee that 

reviews all program authorization requests for funding sufficiency, the Fluid Milk Board’s 

independent financial audit, and the work of the Fluid Milk Board’s accounting firm. The Fluid 

Milk Board met three times during 2010. 

The National Fluid Milk Processor Promotion Program (MilkPEP) is funded by a 20-cent per 

hundredweight assessment on fluid milk products processed and marketed commercially in 

consumer-type packages in the contiguous 48 States and the District of Columbia. The program 

exempts from assessment those processors who process and market 3 million pounds or less of 

fluid milk products each month, excluding fluid milk products delivered to the residence of a 

consumer. Assessments generated $106.9 million in 2010. The Fluid Milk Order requires the 

Fluid Milk Board to return 80 percent of the funds received from California processors to the 

California Milk Processor Board. The amount returned to California from 2010 assessments was 

$10 million. The California fluid milk processor promotion program uses the funds to conduct 

its promotion activities which include the “got milk?®” advertising campaign.

The actual income and expenses for 2010 are provided in Appendix B–4. The Fluid Milk 

Board’s administrative expenses continued to be within the 5-percent-of-assessments limitation 

required by the Fluid Milk Order. USDA’s oversight and evaluation expenses for 2010 are 

detailed in Appendix B–5. Appendix B–6 contains the Fluid Milk Board’s approved budget for 

2010. Appendix C–2 contains an independent auditor’s reports for the period of 

January 1 through December 31, 2010. 

Medical and Scientific Activities

The Fluid Milk Board’s Medical Advisory Board (MAB), comprised of academic, medical, and 

health care professionals with expertise relevant to the health benefits of fluid milk, met in June 

2010. The MAB provides guidance to the Fluid Milk Board’s development of key nutritional 

and health messages for consumers and health professionals. MAB members assisted the Fluid 

Milk Board in continuing relationships with health and health professional organizations such as 

the American Academy of Pediatrics, the American Dietetic Association, and the American 

Heart Association. They also appeared as medical professionals in the media, providing sciencebased statements supporting the health benefits of milk. 

The medical and scientific activities of the Fluid Milk Board also included preparing press 

materials and acting as spokespersons on breaking research with relevance to fluid milk. The 

MAB worked over the past year to inform others in the scientific community of research that 

showed that consuming milk after exercise can aid in muscle recovery and rehydration. 

Additionally, the MAB continued to increase awareness about the nutritional benefits of serving 

both flavored and non-flavored white milk to children in schools. These communications and 
17 

activities continue to highlight milk’s nutritional profile that includes nine essential vitamins and 

minerals. 

National Fluid Milk Programs 

In 2010, fluid milk marketing plans were designed to conduct marketing and promotional 

activities emphasizing milk’s role in building strong families. The Fluid Milk Board continued 

promoting the importance of refueling after exercise with chocolate milk and utilized television 

and print advertising, press releases, promotions, Internet, and other media to accomplish to 

promote the refuel messages. The program’s target audiences included women and moms, teens, 

and Hispanics. The got milk?®/milk mustache advertising campaign continued to provide the 

basis for advertising activities and other program delivery methods. A description of the 2010 

program activities listed by advertising target area follows.

Moms

The Fluid Milk Board advertising campaign for the Moms target in 2010 focused on Mom 

building a strong, healthy family with the “Building Strong Families” campaign. Throughout the 

year, the Fluid Milk Board based their promotions on three concepts: strengthening family 

connections, creating occasions to enjoy milk, and student achievement during a back to school 

campaign. Additionally, the Fluid Milk Board launched their annual highly-successful

“Chocolate Milk: The Official Drink of Halloween” promotion to remind Mom to provide a 

healthy Halloween “treat” to her own trick-or-treaters. 

The Fluid Milk Board kicked off the year with the “Building Strong Families” campaign, which 

was the overarching theme of the year. This campaign was designed to increase sales by 

encouraging moms to serve milk at mealtimes. Through the use of in-store POS, national print 

and television advertising, public relations and local market processor events, “Building Strong 

Families” provided the basis for additional supportive campaigns throughout the year. 

“Building Strong Families” awarded free milk for a year to four instant winners each day for 30 

days. The promotion was highlighted during multiple popular morning shows, urging Mom to 

head to the dairy section. Additionally, Moms could enter the online sweepstakes and receive a 

coupon for a free gallon of white or flavored milk with purchase to encourage continued, future 

consumption of milk. 

The “Building Strong Families” theme continued throughout 

the year, with the support of additional smaller campaigns. 

“Milk the Moment,” which began in March 2010, reminded 

Moms to continue to set the table with milk. Moms were 

able to access quick and easy dinner recipes online and could 

also enter for prizes by describing how they “milk the 

moment.” Additionally, one grand prize entry was selected 

from the prize winners. 
18 

In April 2010, the Fluid Milk Board partnered with “The Biggest Loser: Couples” in an effort to 

remind consumers that including milk at the dinner table helps to “pump up” the nutrition in a 

meal. Contest entrants were invited to follow the Fluid Milk Board’s social media, and submit 

their own stories of how milk is a great complement to their meals. A winner was selected from 

the submissions to attend the Biggest Loser finale, broadcast live in Los Angeles, California. 

In June, the Fluid Milk Board celebrated families at 

Scholastic Parent & Child’s ‘Family of the Year’ event. The 

event was held in New York City and featured celebrity milk 

mustache stars Elisabeth and Tim Hasselbeck. The 

Hasselbecks read from the new storybook, The Giverback 

Parade, and unveiled their new milk mustache ad. The ad 

debuted in print in the 2010 June/July issue of Scholastic 

Parent & Child magazine. 

In July and August 2010, the Fluid Milk Board partnered with Post Cereals to help remind moms 

about the benefits of a breakfast including milk as they helped their students get ready for back 

to school. The “Unlock Their Potential” campaign featured an instant win contest through the 

Fluid Milk Board’s www.whymilk.com Web site. Prizes were geared around the back-to-school 

time, and winners had a chance to win laptops, Leap Frog® learning electronics, backpacks, and 

gift cards. 

In October 2010, the Fluid Milk Board brought back their highly-successful annual Halloween 

promotion “Chocolate Milk – the Official Drink of Halloween.” The campaign was a flavored 

milk feature incentive program that rewarded retailers for feature ad and display activity. The 

program promoted flavored milk as a healthy treat for Moms to give their kids 

at Halloween. Retailers were rewarded with prizes based on their level of 

feature activity. The rewards could be used as in-store giveaways, employee 

incentives, or other ways to help increase flavored milk sales. Promotional 

point-of-sale materials included banners, wobblers, and static clings that were 

used to aid retailers in creating exciting in-store displays. Additionally, the 

Fluid Milk Board hosted an essay contest for Moms to share their experience 

of how they incorporate low-fat chocolate milk into their children’s diets 

during the Halloween season. One grand prize winner was selected to win a 

family-friendly trip to Orlando, Florida. 

Appendix G includes thumbnail images of the Fluid Milk Board’s promotional activities for 

Moms in 2010. 

Teens 

The Fluid Milk Board continued their “Drink Milk for a Change” promotion in 2010. “Drink 

Milk for a Change” showcased the collaboration between singing sensation and American Idol 

winner Jordin Sparks and the Fluid Milk Board to inspire teens to make a difference. The two 

partnered with VH1 Save the Music to launch the “Drink Milk for a Change” program to benefit 
19 

school music departments across the country. The campaign kicked off on September 23, 2009, 

in Los Angeles, California. The campaign showed teens simple changes they could take to help 

make a difference in themselves and the world. Teens could make their own milk mustache ads 

on www.bodybymilk.com and for each mustache ad created, $1 went toward the VH1 Save The 

Music Foundation to help restore school music programs, up to $50,000. This campaign helped 

inform teens that making nutritious choices, like drinking low-fat milk, would affect how they 

look and feel. Packed with nine essential nutrients, drinking milk could help teens make the 

changes they wanted to see in themselves—including strong bones, lean muscles, and healthy 

hair and skin. 

In continuing the “Change” theme, the Fluid Milk Board created the “Change Your Look” 

campaign featuring Lauren Conrad. Lauren, whose stardom began with MTV reality series 

Laguna Beach: The Real Orange County and The Hills, partnered with the Fluid Milk Board to 

help support www.donatemydress.org and provide prom dresses to needy prom attendees. The 

campaign also focused on the benefits of drinking milk as a teen girl. Lauren shared her “beauty 

secret” with teen girls and spoke to how she drinks milk to help her look and feel her best. 

Lauren shot two different “got milk?” ads and teen girls were asked to vote for which style 

should be used; a casual “California girl” shot or a glam “night out” shot. Each time teens voted 

for their favorite style on 

www.bodybymilk.com, $1 was donated to 

prom dress drives nationwide via 

www.donatemydress.org. Additionally, 

voters were entered to win fashion and 

beauty items from Lauren’s ad shoot, a 

professional style session, and the chance 

to attend a special event where Lauren 

revealed the winning “California girl” milk 

mustache ad. 

In August 2010, the Fluid Milk Board teamed up with some of the biggest athletes to promote 

the benefits of refueling with chocolate milk in their “Refuel America” tour. Eight-time speed 

skating medalist Apolo Anton Ohno and USA Basketball Men's National Team member Chris 

Bosh donned milk mustaches and spoke about low-fat chocolate milk providing an easy, 

effective, and cost-efficient way to refuel after a tough workout. The "Refuel America" program 

aims to educate Americans that no matter what sport they play, low-fat chocolate milk is an easy, 

effective, and cost-efficient way to refuel the 

body after a tough workout. Refueling after 

exercise, especially during the two-hour recovery 

window, is key in helping the body recover and 

prepare for the next workout or competition. 

Low-fat chocolate milk offers the right mix of 

protein and carbohydrates to repair and refuel 

exhausted muscles, plus fluids and electrolytes to 

rehydrate and help replenish what's lost in sweat. 
20 

Fellow milk mustache athletes and refuel with chocolate milk proponents, including gold 

medalist Shawn Johnson, USA Basketball star Chauncey Billups, and WNBA star Crystal 

Langhorne, joined Ohno and Bosh to unveil their milk mustache ads and the new “Refuel 

America” program. The campaign continued to educate Americans through various smaller 

programs throughout 2010, including celebrity milk mustache print ads; television and online 

public service messages featuring athletes like Chris Bosh and Shawn Johnson; refueling athletes 

at sporting events around the country; a virtual personal training program for teens; and grants to 

schools.

The Fluid Milk Board again held the annual Scholar Athlete Milk Mustache of the Year 

(SAMMY) program and awarded 25 high school students from various regions across the United 

States a $7,500 scholarship. Each applicant was required to list his/her high school achievements 

and tell why milk is an important beverage to include in his/her daily regimens. The SAMMY 

program received more than 40,000 applications in 2010. In addition to the scholarship award, 

each of the 25 winners was inducted into the SAMMY Hall of Fame and featured in a special 

milk mustache advertisement which appeared in USA Today, Sports Illustrated, and ESPN

magazine. The 25 winners were selected by a panel of superstar athlete milk mustache judges 

including Andy Roddick, Steve Nash, Chauncey Billups, Dara Torres, and Michelle Kwan. 

Winners were honored during an awards ceremony at Disney’s Milk House in Orlando, Florida, 

with various star-studded events. The opening ceremony featured former SAMMY winner and 

bronze medal bobsledder Elana Meyers, and the weekend activities concluded with an awards 

ceremony hosted by milk mustache celebrity guests NBA All-Star and Denver Nuggets point 

guard Chauncey Billups and gold medal gymnast Shawn Johnson. 

Appendix G includes thumbnail images of the Fluid Milk Board’s promotional activities for 

teens in 2010. 

Hispanic 

The national Hispanic advertising campaign 

continued as part of industry outreach to the 

growing Hispanic population. Most of the 

promotions in 2010 geared towards general 

market moms also featured a Hispanic 

component. For example, the “Ejemplo de 

Amor” and “Mesa Puesta con Leche” 

programs reminded Hispanic moms to enjoy 

milk with their families and accomplish that 

through serving milk at the dinner table.

In addition, the Fluid Milk Board introduced a teen promotion to celebrate Quinceñera, the 

recognition of when a Hispanic girl makes the transition to womanhood. Typically, this occurs 

when a girl turns fifteen. Actress Victoria Justice donned a milk mustache and became the face 

of this promotion in celebration of the fifteenth anniversary of the got milk?® campaign. In 

conjunction with the new ad, the Fluid Milk Board held a contest in which entrants could win a 
21 

cash prize to use toward their very own Quinceñera, as well as hair and makeup application for 

the winner and her mom, spa gift certificates, consultation with a Quince expert, and more. 

In October 2010, the Fluid Milk Board continued with the “Dia de los 

Muertos,” or “Day of the Dead” campaign during the Chocolate Milk: 

The Official Drink of Halloween promotion. This promotion 

reminded Hispanic consumers of the bone-building nutrients that milk 

provides. 

Throughout the year, the Fluid Milk Board continued with their print 

advertisement campaign that featured Hispanic celebrities with the 

famous Milk Mustache. In addition to Victoria Justice, celebrities included Paulina Rubio and 

her mom Susana Dosamentes, Cristian de la Fuente, Maggie Jiminez, Sofia Vergara, and cartoon 

Handy Manny.

Appendix G includes thumbnail images of the Fluid Milk Board’s promotional activities for 

Hispanic consumers in 2010. 

Business Development and Research

The Business Development and Research committee (BDR) is a joint effort of the Fluid Milk 

Board, processors, and suppliers. This ongoing effort was established to address barriers to fluid 

milk consumption not targeted by the advertising, promotions, and public relations activities. 

Over the years, BDR, formerly known as the Fluid Milk Strategic Thinking Initiative (FMSTI), 

has conducted market tests and studies in various business channels to develop proven ways to 

increase milk sales and subsequently turned these studies into customer-friendly processor 

materials which may be found at www.milkpep.org. These materials include reports on milk’s 

opportunities in vending, foodservice, convenience and drug store, supermarket, and school 

foodservice channels. Some of the materials included are brochures focusing on new ways to get 

kids to drink more milk; vending sales kits containing results from the Multi-Channel Vending 

Test; and many other reports and studies published in prior years highlighting opportunities for 

increasing milk sales. 

 

The promotion programs continued to focus on: (1) the nutritional benefits of milk; (2) 

emerging scientific studies that highlight milk’s benefits; (3) leveraging the high interest 

generated by the celebrities and the got milk?®/milk mustache campaign; and (4) preparing for 

and responding to misinformation and negative news about milk or the educational campaign. A 

wide variety of initiatives were implemented to reach specific target audiences. 

Promotion messaging was shifted to center on the enjoyment of milk (and its nutritional benefits) 

as a family. The 2010 activities included print, radio, online and television advertisements; 

major nationwide campaign launch events; promotions and contests; celebrity wellness 

spokespeople; engaging processors at local events; and Hispanic market outreach.
22 

Research was a major priority in 2010. Facing concerns over added sugars in children’s diets, 

the Fluid Milk Board continued to conduct and analyze studies of the effects on consumption if 

flavored milk was removed from schools. Trending from years past, some studies suggested that 

by removing flavored milk from school meals, consumption would decrease, thus potentially 

leaving children lacking in the essential nutrients that milk provides in the diet. Additionally, the 

Fluid Milk Board continued studying the positive recovery benefits of low–fat chocolate milk on 

the body after strenuous exercise, as showcased in their “Refuel with Chocolate Milk” campaign. 

In 2010, after soliciting proposals from consulting companies, the Fluid Milk Board chose to 

work with Monitor Group, an international consulting firm that specializes in advisory projects 

and strategic planning, designing and implementing capability-building programs, and providing 

financial advisory services. The Fluid Milk Board’s main objective with this study was to learn 

more about the decline of fluid consumption and to determine what actions could be taken in the 

future to slow or halt the decline. 

MilkPEP continued providing processors access to customizable national programs such as the 

Milk Mustache Mobile and related media materials at www.milkpep.org to use in their own 

public relations efforts. Brochures, news releases, and other information on milk advertising and 

promotions were made available to consumers through the following Web sites: 

www.whymilk.com, www.bodybymilk.com, and www.eligeleche.com. 

Complete reports, studies, executive summaries, and press releases for the Fluid Milk Board’s 

ongoing processor initiatives are available for processors on the Web site www.milkpep.org. 

Customers can also visit www.milkdelivers.org, or call the milk hotline at 1-800-945-MILK 

(6455) for copies of presentations, videos, and printed materials. 
24 

Chapter 2

USDA Activities

The USDA’s Agricultural Marketing Service’s (AMS) Dairy Programs has day–to–day oversight 

responsibilities for the Dairy Board and the Fluid Milk Board. AMS Dairy Programs’ oversight 

activities include reviewing and approving the Dairy and Fluid Milk Boards’ budgets, budget 

amendments, contracts, advertising campaigns, and investment plans. Approval of program 

materials is a major responsibility of AMS Dairy Programs. Program materials are monitored 

for conformance with provisions of the respective Acts and Orders, the U.S. Dietary Guidelines 

for Americans, and other legislation such as the Nutrition Labeling and Education Act. AMS 

Dairy Programs also uses the “Guidelines for AMS Oversight of Commodity Research and 

Promotion Programs” to govern oversight and facilitate the application of legislative and 

regulatory provisions of the Acts and the Orders. 

AMS Dairy Programs continues to ensure that the collection, accounting, auditing, and 

expenditure of promotion funds is consistent with the enabling legislation and orders; to certify 

Qualified Programs; and to provide for evaluation of the effectiveness of both promotion 

programs’ advertising campaigns. AMS Dairy Programs assists the boards in their assessment 

collection, compliance, and enforcement actions. 

Other AMS Dairy Programs responsibilities relate to nominating and appointing board members, 

amending the orders, conducting referenda, and conducting periodic management reviews. AMS 

Dairy Programs representatives attend full board and committee meetings, and other meetings 

of consequence to the program. 

National Dairy Promotion and Research Board Oversight

Nominations and Appointments 

The 36 members of the Dairy Board who administer the program serve 3-year terms, with no 

member serving more than two consecutive terms. Dairy Board members must be active dairy 

producers and are selected by the Secretary from nominations submitted by producer 

organizations, general farm organizations representing dairy producers, Qualified Programs, or 

other interested parties.

A list of Dairy Board members appears in Appendix A–1. Appendix H–1 is a map depicting the 

13 geographic regions under the Dairy Promotion and Research Order (Dairy Order). 

Organic Exemption 

Effective February 14, 2005, any persons producing and marketing solely 100 percent organic 

products were exempted from paying assessments to any research and promotion program 

administered by the Agricultural Marketing Service (70 FR 2743, published January 14, 2005). 

The final rule amended Section 1150.157 of the Dairy Order. In States that have mandatory 

assessment laws, dairy producers are exempt only from the Federal assessment. Producers are 

still responsible for remittance of State assessments. In 2010, approximately 1,026 dairy 
25 

producers were granted exemptions, representing approximately 1.6 billion pounds of 

production. The Dairy Order requires producers to re-apply annually to continue to receive the 

exemption. 

Amendment to the Dairy Act 

Section 781 of the Dairy Act was amended in 2005 to allow the Dairy Board to obligate and 

expend funds for any activity to improve the environment and public health, and required the 

Secretary to review the impact of any such expenditure and include the review in the annual 

report to Congress. 

The Dairy Board authorized the expenditure of up to $6 million during 2006 to fund a portion of 

the National Air Emissions Monitoring Study (NAEMS). The NAEMS is a multi–year research 

effort to collect air emission data and create tools that all dairies can use, whether they are 

participating in the Environmental Protection Agency Air Quality Compliance Agreement 

(Consent Agreement) or not, to determine whether their air emission levels are in excess of the 

Clean Air Act thresholds and Comprehensive Environmental Response, Compensation and 

Liability Act, and Emergency Planning and Community Right to Know Act reporting 

requirements. The Consent Agreement was developed to offer protection to operations while 

research is conducted to determine the size and type of farms that may have regulatory 

responsibilities. Currently, little air emissions data exists for dairy operations.

Data collection for the study was completed during the first half of 2010, and Purdue University 

and principal investigators completed an initial summary of the data that was transferred to the 

Environmental Protection Agency (EPA). The EPA will have up to 18 months to complete its 

data interpretation. The equipment used to conduct the study is owned by the Dairy Board, and 

at a May 2010 meeting, the Dairy Board passed a motion to donate the equipment to universities 

to be used for further research. Additionally, the Dairy Board will use $100,000 of the 

remaining NAEMS money to fund an interpretive summary that will compare the NAEMS data 

with previous studies, identify future research needs, create an outreach document, evaluate the 

NAEMS data quality in terms of completeness and representativeness, and determine 

relationships of other measured variables on farm emissions. 

Foreign Agricultural Service 

The Secretary of Agriculture has delegated oversight responsibility for all foreign market 

development activities outside the United States to the Foreign Agricultural Service (FAS) 

(7 CFR 2.43(a)(24)). FAS reviews the USDEC foreign market development plan and related 

contracts. USDEC contracts also are reviewed by AMS Dairy Programs to ensure conformance 

with the Dairy Production Stabilization Act of 1983 (Dairy Act), Dairy Order, and with 

established USDA policies. AMS Dairy Programs reviewed 80 USDEC contracts during 2010. 

Contracts 

The Dairy Act and Dairy Order require that all contracts expending assessment funds be 

approved by the Secretary (7 CFR 1150.140). During 2010, Dairy Programs reviewed and 
26 

approved 300 Dairy Board and Dairy Management Inc. (DMI) agreements, amendments, and 

annual plans. Appendix D–1 lists the contractors and corresponding board initiatives approved 

by USDA.

Contractor Audits 

DMI retained the certified public accounting firm of Ernst & Young to audit the records of the 

following contractors: Digital Influence Group, Edelman Public Relations Worldwide, and 

Weber Shandwick Worldwide (communications, public relations, and nutrition education); and 

The University of Connecticut (nutrition research). These contractors represented expenditures 

totaling approximately $3.3 million. Audit findings will be presented to the Dairy Board when 

completed. 

Collections

The Dairy Act specifies that each person making payments to a producer for milk produced in 

the United States and purchased from the producer shall, in the manner as prescribed by the 

order, collect an assessment based upon the number of hundredweights of milk for commercial 

use handled for account of the producer and remit the assessment to the Dairy Board. The 

current rate of assessment is 15 cents per hundredweight of milk for commercial use or the 

equivalent thereof as determined by the Secretary.

The Dairy Act provides that dairy farmers can direct up to 10 cents of their 15-cent per 

hundredweight assessment to Qualified Programs. During 2010, the Dairy Board received 

about 5.04 cents per hundredweight of the 15-cent assessment.

Compliance 

Compliance by responsible persons in filing reports and remitting assessments continues in a 

timely manner and at a high rate. No significant differences were discovered when comparing 

the audit results to what was reported by the responsible persons. The Dairy Board verifies that 

the credits claimed by responsible persons are actually sent to Qualified Programs. This 

verification is done by contract with each Qualified Program. When noncompliance exists, the 

Dairy Board takes initial action on the matter. If the Dairy Board is unsuccessful in resolving the 

violation, the matter is referred to USDA for further action. 

Qualified Programs 

Dairy Programs reviewed applications for continued qualification from 58 Qualified Programs. 

A list of the active Qualified Programs is provided in Appendix F. Consistent with its 

responsibility for monitoring the Qualified Programs, Dairy Programs obtained and reviewed 

income and expenditure data from each of the programs. The data reported from the Qualified 

Programs are included in aggregate form for 2010 in Appendix B–7 and Appendix B–8. 
27 

National Fluid Milk Processor Promotion Board Oversight 

Nominations and Appointments 

The 20 members of the Fluid Milk Board serve 3-year terms, with no member serving more than 

two consecutive terms. The Fluid Milk Promotion Order (Fluid Order) provides that no 

company shall be represented on the board by more than three representatives. Fluid Milk Board 

members who fill vacancies with a term of 18 months or less are permitted to serve 2 additional 

3-year terms. Fluid Milk Board members are selected by the Secretary from nominations 

submitted by fluid milk processors, interested parties, and eligible organizations. A list of 

current Fluid Milk Board members appears in Appendix A–2. Appendix H–2 shows a map 

depicting the 15 geographic regions under the Fluid Milk Order. 

Program Development 

The Fluid Milk Board contracted directly with Deutsch Worldwide; DRAFTFCB; Weber 

Shandwick; and Siboney, U.S.A., to develop its mom and teen advertising, promotions, 

consumer education/public relations, and Hispanic advertising/public relations, respectively. 

Contractor Audits 

The Fluid Milk Board retained the certified public accounting firm of Snyder, Cohn, Collyer, 

Hamilton & Associates, P.C., in 2010 to audit the records of Weber Shandwick to determine if 

the agency had conformed to the financial compliance requirements specified in its agreement 

with the Board for the period of January 1 through December 31, 2009. 

The Board continues to enhance its internal contract control system in order to ensure that the 

amounts invoiced to the Board are in compliance with established contracts and procedures. 

Compliance 

Compliance by fluid milk processors in filing reports and remitting assessments continues in a 

timely manner and at a high rate. 
28

Chapter 3

Impact of Fluid Milk and Dairy Advertising and Non-Advertising Promotion 

on Dairy Markets: An Independent Analysis

The Dairy Production and Stabilization Act of 1983 (Dairy Act; 7 U.S.C 4514) and the Fluid 

Milk Promotion Act of 1990 (Fluid Milk Act; 7 U.S.C. 6407) require annual independent 

analyses of the advertising and promotion programs that operate to increase consumer awareness 

and sales of fluid milk and dairy products. Since 1998, economists from the Department of 

Applied Economics and Management at Cornell University have conducted the independent 

analyses of the Dairy Promotion and Research Program (Dairy Program) and the Fluid Milk

Processor Promotion Program (Fluid Milk Program). In this chapter, the 2010 evaluation results 

of the effectiveness of the Dairy and Fluid Milk Programs are presented. The economic 

evaluation focuses on marketing activities by dairy farmers and fluid milk processors that are 

designed to increase the demand for fluid milk and dairy products. The results of two separate 

models are presented. 

The first is a fluid milk-only demand model used to evaluate the economic impacts of all fluid 

milk marketing activities of both programs on fluid milk demand. The fluid milk marketing 

activities include generic1

 fluid milk advertising and non–advertising marketing activities used to 

increase demand. Advertising includes all media activities such as television, print, radio, 

outdoor, and web advertising by dairy farmers and fluid milk processors. In 2010, dairy farmers 

spent $21.2 million and fluid milk processors spent $51.6 million on advertising fluid milk 

activities. Non–advertising fluid milk marketing refers to both activities that have a shorter term 

impact on demand as well as those that have a longer term impact. These activities include 

programs such as Dairy Management Inc.’s (DMI) partnership activities, health and nutrition 

education programs, public relations, promotion programs, school milk programs, food service 

programs, retail programs, the Child Nutrition and Fitness Initiative, single serve milk 

promotions, value added marketing (issues/crisis, trade service communications, strategic 

research, Real Seal), and trade service communications. In 2010, dairy farmers spent $72.1 

million and fluid milk processors spent $32.3 million on non-advertising fluid milk activities. 

The second model is a combined fluid milk and dairy product demand model (measured in terms 

of domestic commercial disappearance) used to evaluate the economic impacts of all marketing 

activities for those products. This model, which is hereafter referred to as the “all-dairyproducts” model, is included because the Dairy Program now emphasizes an “all-dairy” 

promotion strategy over product-specific campaigns. As in the first model, marketing activities 

in the second include generic advertising and non-advertising (shorter and longer term)

marketing activities. Advertising and non-advertising marketing strategies are included as two 

separate variables in the demand model. Unlike the first model, the marketing activities in the 

second model include activities for all dairy products (fluid and manufactured dairy products). 

This model provides a measure of the economic impact of all demand-enhancing, generic 

1 Generic means non–branded activities designed to enhance the overall demand for fluid milk and dairy products 

rather than firm or brand specific demand. All activities conducted by the Fluid Milk Program are generic, but some 

of the activities conducted by DMI, such as brand partnerships, are not generic. However, the majority of fluid milk 

processor and dairy farmer marketing activities are generic, and this report will use the term generic to describe all 

advertising and non–advertising demand enhancing activities by these two groups.
29

marketing activities by processors and farmers. In 2010, dairy farmers spent $72 million and 

$171 million on all-dairy advertising and non-advertising, respectively.

More recently, DMI has focused more on longer-term impact non-advertising activities such as 

partnership programs, value-added projects, product research, nutritional research, and 

nutritional affairs. Previous analyses have not included these activities. However, since they 

now represent the major activities conducted by DMI they are included in the fluid (and alldairy-products) model. In 2010, DMI spent $54.3 million on longer term impact non-advertising 

activities for fluid milk and dairy products. 

Highlights

While per capita fluid milk consumption has been declining for decades in the United States at 

about 1.0 percent per year, generic fluid milk marketing activities sponsored by the Dairy and 

Fluid Milk Programs have helped mitigate at least some of this decline. It is estimated that these 

marketing efforts have had a positive and statistically significant impact on per capita fluid milk 

consumption. Specifically, over the period 1995 through 2010, it is estimated that a 1.0 increase 

in generic fluid milk advertising expenditures resulted in a 0.038 percent increase in per capita 

fluid milk consumption when holding all other demand factors constant. Over the same period, 

it is estimated that a 1.0 percent increase in generic fluid milk non-advertising marketing 

expenditures resulted in a 0.051 percent increase in per capita fluid milk consumption when 

holding all other demand factors constant. 

In terms of total consumption of fluid milk, generic fluid milk marketing activities increased 

fluid milk consumption by an average of 7.7 billion pounds per year. Stated differently, had 

there not been generic fluid milk marketing conducted by the two national programs, fluid milk 

consumption would have been 13.9 percent less than it actually was over this time period. 

Hence, the bottom line is that the fluid milk marketing efforts by the Dairy and Fluid Milk 

Processor Programs combined have had a positive and statistically significant impact that is 

partially mitigating declines in fluid milk consumption. 

An average benefit-cost ratio (BCR) was computed for the Fluid Milk Program based on the 

period 1999-2010. The BCR was 10.38, implying that, on average over the period 1999-2010, 

the benefits of the Fluid Milk Program have been 10.38 times greater than the costs, i.e., every 

dollar invested in Fluid Milk Program marketing yielded an additional $10.38 in industry net 

revenue. To make allowance for the error inherent in any statistical estimation, a 90 percent

confidence interval was calculated for the average BCR. The estimated lower bound for the 

average BCR was 4.84. Hence, it is reasonable to conclude that this confidence interval gives 

credence to the finding that the benefits of the Fluid Milk Program marketing activities have 

been considerably greater than the cost of the program.

In terms of the all-dairy product demand analysis, a 1.0 percent increase in media advertising 

expenditures resulted in a 0.031 percent and 0.048 percent increase on a skim milk solids and 

milk fat basis, respectively, in per capita all-dairy product demand when holding constant all 

other demand factors. A 1.0 percent increase in non-advertising expenditures resulted in a 

0.015 percent and 0.016 percent increase on a skim milk solids and milk fat basis, respectively, 

in per capita all-dairy product demand when holding constant all other demand factors. Thus, 
30

the total marketing (advertising and non-advertising) effort by dairy farmers and fluid milk 

processors has had a positive and statistically significant impact on dairy consumption.

A BCR was calculated for the Dairy Program for the period 1999 through 2010. The benefits of 

the Dairy Program were calculated as the change in dairy farmers’ net revenue (producer 

surplus) due to demand enhancement from all marketing activities under the Dairy Program by 

way of increased sales and higher prices. The costs of the Dairy Program were calculated as the 

differences in the costs of demand enhancing activities before and after the national program was 

enacted. The results show that the average BCR for the Dairy Program was 4.93 (skim milk

solids basis) and 9.02 (milk fat basis) from 1999 through 2010. This means that each dollar 

invested in generic dairy marketing by dairy farmers during the period would return between 

$4.93 and $9.02, on average, in net revenue to farmers. These BCRs are a combined estimate for 

all DMI and all of the QP’s marketing programs. The reason the BCR was higher on a milk fat

basis than on a skim milk solids basis is that the estimated advertising and non-advertising 

elasticities were higher on a milk fat basis than on a skim milk solids basis. The level of the 

non-advertising BCR suggests that the combined non-advertising programs supported by dairy 

farmers have been a successful investment. The estimated lower bounds for a 90 percent

confidence interval for the average BCR in the skim milk solids basis and milk fat basis models 

were 3.12 and 1.71, respectively. Hence, it is reasonable to conclude that these confidence 

intervals give credence to the finding that the benefits of the Dairy Program’s marketing 

activities have been considerably greater than the cost of the program.

In addition to computing a BCR for the overall marketing efforts of dairy farmers, an average 

BCR also was calculated for generic advertising and non-advertising activities by dairy farmers. 

The average BCR for generic advertising in the skim milk solids basis model was 6.03 compared 

with 3.31 for non-advertising marketing activities, and this difference was statistically significant 

at the 1.0 percent level. The average BCR for generic advertising in the milk fat basis model was 

13.42 compared with 5.54 for non-advertising marketing activities, and this difference was 

statistically significant at the 1.0 percent level. The reason for the substantially higher BCR for 

advertising than non-advertising is due to the much higher advertising elasticity than nonadvertising elasticity estimated in the econometric model.

Analysis of Generic Fluid Milk Marketing

Per capita fluid milk consumption in the United States has been steadily declining for decades. 

Among the factors behind this decline are changes in demographics, changes in consumer 

preferences for fluid milk, how and where people consume food, changes in consumer income, 

changes in retail fluid milk prices, changes in advertising and marketing by producers of 

beverages that compete with fluid milk, and changes in generic fluid milk advertising and 

marketing. The following is a brief graphical overview of changes in per capita fluid milk 

consumption and factors hypothesized to affect fluid milk consumption from 1995 through 2010. 

It is important to emphasize, however, that the decline in per capita fluid milk consumption has 

occurred over a significantly longer period of time than since 1995. Figure 3-1 illustrates the 
31

Figure 3-1. Per Capita Fluid Milk Consumption

annual per capita consumption declined by just under 15 percent. This translates into an average 

annual rate of decline of 0.9 percent per year. 

One potential cause of declining per capita fluid milk consumption over this time period may be 

the increasing trend in food consumed away from home. As people consume more food away 

from home, fluid milk consumption may be diminished by the lack of availability of many 

varieties of fluid milk products at the nation’s eateries as well as the expanding availability of 

fluid milk substitutes. Many eating establishments carry only one type of fluid milk product, 

which causes some people who would normally drink fluid milk to consume a different beverage 

if the preferred fluid milk product is not available. Figure 3-2 illustrates the trend in 

expenditures on food consumed away from home as a percentage of total food expenditures. 

From 1995 through 2010, the annual average percentage of expenditures on food consumed 

away from home increased by 11.6 percent. While there were some ups and downs in the 

percentage of food consumed away from home over this period, the general trend is increasing 

from 1995 through 2006. From 1998 to 1999, there was a small dip in food away from home 

expenditures as a percent of total food expenditures and the decline in per capita fluid milk 

consumption lessoned considerably. From 2006 to 2009, food away from home expenditures as 

a percent of total food expenditures decreased in each successive year, however, rebounded from 

2009 to 2010. It is evident from Figures 3-1 and 3-2 that per capita fluid milk consumption and 

eating away from home are negatively correlated. Thus, the increase in food consumed away 

from home appears to be responsible for some of the decrease in per capita fluid milk 

consumption. 

A second factor for declining per capita fluid milk consumption may be changes in U.S. 

demographics. One important change is the proportion of young children in the population, 

which is lower than it was in 1995. Since young children are one of the largest fluid milkconsuming cohorts, any decline in that cohort negatively impacts per capita fluid milk 

170.0

175.0

180.0

185.0

190.0

195.0

200.0

205.0

210.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Pounds

Year
32

Figure 3-2. Food Away From Home Expenditures as a Percent of Total Food Expenditures. 

consumption. Figure 3-3 shows the percentage of the population that was under 6 years old from 

1995 through 2010, a segment of the population that decreased 7.1 percent between 1995 and 

2002. Therefore, there is a positive correlation between per capita fluid milk consumption and 

this age cohort—both have declined since 1995. Note that since 2000, there has actually been a 

marginal increase in this age cohort, but it is still below levels in the mid-1990s. 

Between 1995 and 2008, the retail price of fluid milk products has generally been rising relative 

to the retail price of other nonalcoholic beverages. This pattern is displayed in Figure 3-4. 

While there have been some times over this period where retail fluid milk prices declined 

relative to other beverage prices, there is clearly an increasing trend over time making milk more 

expensive than other nonalcoholic beverages. However, this pattern significantly reversed itself 

in 2009, when the relative price ratio decreased 17.2 percent, which, by itself, had a positive 

effect on consumption. However, the price of fluid milk relative to other beverages rose again in 

2010. Over the entire period of 1995 through 2010, annual average fluid milk prices rose 18.7 

percent relative to other beverages. These retail fluid milk price increases were likely 

responsible for some of the decline in per capita fluid milk consumption. 

Fluid milk’s loss of market share to other beverages also may be due to aggressive marketing by 

competing beverage producers. Indeed, both dairy farmers and fluid milk processors started 

generic marketing programs to combat competing marketing from other beverage producers. 

Figure 3-5 displays the combined real (inflation-adjusted) generic and brand fluid milk 

advertising expenditures divided by real bottled water, plus juice, plus soy beverage advertising, 

which are major competitors of fluid milk products. The general trend has been erosion in the 

ratio of generic fluid milk advertising to competing beverage advertising. For example, in 1995, 

this ratio was 0.30, indicating that total generic and brand fluid milk advertising was 30 percent 

of the combined total advertising budgets for bottled water, juice, and soy beverages. By 2010, 

46.0

47.0

48.0

49.0

50.0

51.0

52.0

53.0

54.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percent

Year
33

Figure 3-3. Percent of Population Under 6 Years of Age. 

Figure 3-4. Retail Price of Fluid Milk Relative to Other Beverage Retail Prices (set equal to 

1.00 for 1995). 

6.60

6.70

6.80

6.90

7.00

7.10

7.20

7.30

7.40

7.50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Percent

Year

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Price index ratio

Year
34

Figure 3-5. Generic and Brand Fluid Milk Advertising Divided by Soy Beverage, Juice, and 

Bottled Water Advertising. 

this ratio fell 15.4 percent to 0.25. Hence, in terms of advertising, fluid milk has lost advertising 

market share to three of its main competitors, which likely had a negative impact on per capita 

milk consumption over this time period. However, this ratio has been trending up since 2005 

indicating that the share of fluid milk advertising has been increasing relative to bottled water, 

plus juice, plus soy beverage advertising.

One factor that may have diminished some of the decline in per capita fluid milk consumption is 

the growth in real (inflation-adjusted) income over this period. Fluid milk is considered to be a 

“normal” good, which means that consumption increases as consumers’ disposable incomes 

increase. Figure 3-6 illustrates the steady positive trend in real per capita income (in 2010 

dollars) from 1995 through 2010. Since 1995, real per capita income has increased by 26.6 

percent, although it leveled off in 2007 and showed only weak growth since then. 

Another factor that may have diminished some of the decline in per capita fluid milk 

consumption over part of this time period is generic marketing efforts by fluid milk processors 

and dairy farmers. The Dairy Program is the largest generic checkoff promotion program in the 

United States in terms of revenue, and the third largest program is the Fluid Milk Program. 

Figure 3-7 shows generic fluid milk advertising real expenditures (adjusted for inflation) by 

dairy farmers and fluid milk processors. Over this period, dairy farmers, primarily through DMI, 

have significantly reduced their investment in generic fluid milk advertising, taking inflation into 

account. Real fluid milk advertising expenditures by dairy farmers have fallen from almost $150 

million in 1995 to $21.2 million in 2010, an 85.9 percent decrease. Since the Fluid Milk 

Program’s first full year in 1997, its inflation-adjusted expenditures on fluid milk advertising 

0.10

0.15

0.20

0.25

0.30

0.35

0.40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Advertising ratio

Year
35

Figure 3-6. Real Per Capita Disposable Income, in 2010 Dollars. 

Figure 3-7. Real Fluid Milk Advertising Expenditures, in 2010 Dollars, by Dairy Farmers and 

Fluid Milk Processors. 

28.0

29.0

30.0

31.0

32.0

33.0

34.0

35.0

36.0

37.0

38.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Dairy farmers Fluid milk processors
36

have also declined from $101.3 million (1997) to $51.6 million in 2010, or 49.1 percent in real 

terms. However, over the same period, real brand milk advertising by fluid milk processors has 

increased from $17 million to $50.2 million, which has reduced the decline in processor 

advertising of fluid milk to 14 percent (instead of 49.1 percent) over this period. Collectively, 

generic and brand fluid milk advertising by both dairy farmers and fluid milk processors 

decreased by 54.2 percent in real terms. 

Figure 3-8 shows generic fluid milk non-advertising marketing activities by the Dairy and Fluid 

Milk Programs. The trends in these expenditures have been the opposite of generic advertising. 

The Dairy Program increased annual expenditures of non-advertising marketing from $26.2 

million in 1995 to $72.1 million in 2010, an increase of 175 percent in inflation-adjusted terms. 

The Fluid Milk Program increased expenditures in this category from $17.2 million in 1997 to 

$32.3 million in 2010, an 87.8 percent increase in real terms. Collectively, generic fluid milk 

non-advertising marketing expenditures by both dairy farmers and fluid milk processors 

increased by 140.2 percent in real terms. 

Figure 3-9 shows combined generic fluid milk marketing (advertising and non-advertising) 

activities by dairy farmers and fluid milk processors. The trend here has been negative for both 

farmers and processors. Dairy farmers have decreased their annual expenditures of combined 

fluid milk marketing from $176.1 million in 1995 to $93.3 million in 2010, a decrease of 47 

percent in real (inflation-adjusted) terms. Some of this decline is due to inflation, which has 

eroded the purchasing power for marketing activities, and another reason for this decline has 

been a decision by DMI to reduce expenditures on fluid milk marketing. 

Figure 3-8. Real Fluid Milk Non-Advertising Expenditures, in 2010 Dollars, by Dairy Farmers 

and Fluid Milk Processors. 

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Dairy farmers Fluid milk processors
37

Figure 3-9. Real Fluid Milk Advertising Plus Non-Advertising Expenditures, in 2010 Dollars, 

by Dairy Farmers and Fluid Milk Processors. 

Fluid milk processors decreased their combined generic marketing expenditures from $118.6 

million in 1997 to $83.9 million in 2010, a 29.3 percent decrease in real terms. Almost all of the 

decline in fluid milk processor generic milk marketing has been due to inflation eroding the 

purchasing power of their marketing dollars. Collectively, generic fluid milk marketing 

expenditures by both the Dairy and Fluid Milk Programs decreased by 39.9 percent in real terms 

since 1995. 

Fluid Milk Model Estimation

To more formally evaluate the relationship between per capita fluid milk consumption and 

factors hypothesized to influence that consumption, an econometric modeling approach was 

used. Because there are factors other than generic marketing by dairy farmers and fluid milk 

processors that influence the demand for fluid milk, this model was used to identify the effects of 

individual factors affecting demand. The following variables were included as factors 

influencing per capita fluid milk demand: the consumer price index (CPI) for fluid milk; the CPI 

for nonalcoholic beverages, which was used as a proxy for fluid milk substitutes; the percentage 

of the U.S. population less than 6 years old; per capita disposable income; variables to capture 

seasonality in fluid milk demand; expenditures on food consumed away from home as a 

percentage of total food expenditures; expenditures on competing beverage advertising (bottled 

water, juice, and soy beverage advertising combined), expenditures on generic fluid milk 

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Dairy farmers Fluid milk processors
38

advertising,2 and expenditures on generic fluid milk non-advertising marketing activities. Since 

the goals of the Dairy and Fluid Milk Programs are the same with regards to fluid milk, all 

generic fluid milk advertising by both programs was aggregated into a single advertising 

variable, and all fluid milk non-advertising marketing by both programs were aggregated into a 

single non-advertising marketing variable.

The model was estimated with national quarterly data from 1995 through 2010. To account for 

the effects of inflation, prices and income were deflated by the CPI for all items. Generic fluid 

milk advertising as well as competing advertising expenditures were deflated by a media cost 

index computed from annual changes in advertising costs by media type. Similar procedures 

were used to capture this carry-over effect for competing (bottled water, soy beverage, and juice) 

advertising. The shorter and longer term impact non-advertising variables were combined into 

one variable, which was deflated by the CPI for all items. Current expenditures for shorter-term 

activities were added with longer term activities lagged four quarters, which was determined by 

the model to fit the data the best. The resulting variable was then included in the model using a 

distributive-lag structure similar to the advertising variables.

The impacts of variables affecting demand can be represented with what economists call 

“elasticities.” Elasticities measure the percentage change in per capita demand given a 1.0 

percent change in one of the identified demand factors while holding all other factors constant. 

Table 3-1 provides average elasticities for the period 1995 through 2010.3

 For example, a price 

elasticity of demand for fluid milk equal to -0.078 means that a 1.0 percent increase in the real 

(inflation adjusted) retail fluid milk price causes a decline in per capita fluid milk quantity 

demanded by 0.078 percent, holding all other demand factors constant. The most important 

factors influencing per capita fluid milk demand are age demographic changes and the 

proportion of food expenditures on food eaten away from home. While not as large in 

magnitude, income, retail fluid milk prices, expenditures on generic fluid milk advertising and 

non-advertising marketing efforts, and competing beverage advertising expenditures also 

impacted per capita fluid milk demand. Each factor is further discussed in detail.

The percentage of the population under 6 years of age is the most important factor affecting fluid 

milk consumption. This factor has an estimated elasticity of 0.708, which means that a 1.0 

 

2 As mentioned in the introduction, the advertising expenditures include media expenditures for television, radio,

print, and outdoor advertising. Brand fluid milk advertising was initially included in the model, and while it was 

positive, it was not statistically significant and hence was not included in the final model. Recall there are two types 

of generic fluid milk non-advertising marketing expenditures: (1) shorter term impacts (designed to last less than 

one-year) and (2) longer term impact (designed to have a longer than one year impact). These two types of nonadvertising marketing activities were combined into one variable. However, a shorter lag duration was used for the 

shorter-term impact activities while a longer lag duration was used for the longer-term impact activities. Because

advertising has a carry-over effect on demand, past generic fluid milk advertising expenditures also were included in 

the model as explanatory variables using a distributed-lag structure. Specifically, a second-degree polynomial lag 

structure was imposed. The demand model included current and lagged advertising expenditures to capture the 

carryover effect of advertising. Similarly, competing advertising included current and lagged expenditures.

3 The estimated model fit the data extremely well. Most variables were statistically significant at the 1.0 percent

significance level or better. The adjusted goodness-of-fit measure indicated that the explanatory variables explained 

99 percent of the variation in per capita fluid milk consumption. Various statistical diagnostics were performed and 

no statistical problems were found.
39

Table 3-1. Average Elasticity Values (1995-2010) for Factors Affecting the Per Capita Retail

Demand for Fluid Milk.a

Demand factor Elasticity

Percent of population under 6 years of age 0.708*

Percent of food away from home expenditures -0.268*

Per capita income 0.165* 

Retail fluid milk price -0.078*

Bottled-water + soy beverage + juice advertising expendituresb -0.046**

Generic fluid milk advertising expendituresb 0.038*

Generic fluid milk non-advertising marketing expendituresb 0.051*

a Example: A 1.0 percent increase in the retail price of fluid milk is estimated to reduce per capita sales of fluid milk 

by 0.078 percent. For more information on the data used, see Appendix Table 3-A1.

b

Long-run elasticity computed as the sum of current and all lagged impacts.

* Statistically significant at the 5.0 percent significance level or less.

** Statistically significant at the 7.0 percent significance level.

percent increase in this age cohort measure would result in a 0.708 percent increase in per capita 

fluid milk demand when holding all other demand factors constant. This result is consistent with 

previous studies, which show that one of the largest fluid milk-consuming segments of the 

population is young children. While this age cohort declined between 1995 and 2000, it has 

slowly increased since then, which should have a mitigating influence on declining per capita 

fluid milk consumption. 

The amount of food that is consumed away from home, measured in this model as expenditures 

on food eaten away from home as a percentage of expenditures on all food, has an elasticity of 

-0.268. This means that a 1.0 percent increase in the food consumed away from home would 

result in a 0.268 percent decrease in fluid milk demand when holding all other demand factors 

constant. As mentioned previously, this negative relationship may be due to the limited 

availability of fluid milk products and high availability of fluid milk substitutes at many eating 

establishments, which frequently offer only one or two types of fluid milk beverages. One can 

hypothesize that because of these limited choices, some people who would ordinarily choose 

fluid milk choose another beverage instead. This result suggests the need to target the retail food 

service industry in an effort to increase away from home consumption. 

Per capita disposable income has a positive and statistically significant impact on per capita fluid 

milk consumption. A 1.0 percent increase in real per capita income would result in a 0.165 

percent increase in per capita fluid milk demand, holding all other demand factors constant. 

Similar to the price elasticity in magnitude, the income elasticity is consistent with the notion of 

fluid milk products as a staple commodity in the United States. With real per capita income up 

by 26.6 percent since 1995, this has lessened the decline in per capita fluid milk consumption. 

Holding all other factors constant, this 26.6 percent increase in real income increased per capita 

fluid milk consumption by 4.4 percent over this period. 
40

Not surprisingly, the retail price of fluid milk has a negative and statistically significant impact 

on per capita demand. The results indicate that a 1.0 percent increase in the real retail price of 

fluid milk would result in a 0.078 percent decrease in per capita fluid milk quantity demanded. 

The magnitude of this elasticity is relatively small, which indicates that consumers’ fluid milk 

purchasing behavior is relatively insensitive to changes in the retail price. This result, which is 

consistent with other studies, is likely due to the fact that fluid milk is generally regarded as a 

staple commodity in the United States. 

Combined soy beverage, juice, and bottled water advertising also has a negative impact on fluid 

milk demand during the study period. The estimated fluid milk demand elasticity with respect to 

soy beverage, juice, and bottled-water advertising is -0.046, and statistically significant. 

Finally, the generic fluid milk marketing activities conducted by the Fluid Milk and Dairy 

Programs have a positive and statistically significant impact on per capita fluid milk demand. 

The average advertising elasticity is computed to be 0.038 and is statistically significantly 

different from zero. Thus, a 1.0 percent increase in generic fluid milk advertising would increase 

per capita fluid milk consumption by 0.038 percent holding all other demand factors constant. 

The generic non-advertising marketing elasticity is computed to be 0.051 and is statistically 

significant. The non-advertising elasticity is 1.3 times larger than the advertising elasticity, and 

the difference is statistically significant at the 1.0 percent level.

Fluid Milk Model Simulation 

To examine the impact of dairy farmer and fluid milk processor marketing on total consumption 

of fluid milk, the estimated demand equation was simulated for two scenarios for the period from 

1999 through 2010: (1) a baseline scenario in which the combined fluid milk marketing 

(advertising and non-advertising) expenditures were equal to actual marketing expenditures 

under the two programs, and (2) a no national Dairy Program, no Fluid Milk Processor Program 

scenario in which there was no fluid milk processor-sponsored marketing and dairy farmersponsored fluid milk marketing was reduced to 42 percent of actual levels to reflect the 

difference in assessment before the national program was enacted. 

A comparison of these two scenarios provided a measure of the impact of the national Dairy and 

Fluid Milk programs. Figure 3-10 displays the simulation results for annual fluid milk 

consumption for the two scenarios. These marketing activities were responsible for creating an 

additional 7.7 billion pounds more milk consumption each year on average. Put differently, had 

there not been generic fluid milk marketing conducted by the two national programs, fluid milk 

consumption would have been 13.9 percent less than it actually was over this time period. 

Hence, the bottom line is that the fluid milk marketing efforts by dairy farmers and fluid milk 

processors combined have had a positive and statistically significant impact that is partially 

mitigating declines in per capita fluid milk consumption. 

Fluid Milk Processor Benefit-Cost Analysis 

One way to measure whether the benefits of a program outweigh the cost is to compute a BCR. 
41

Figure 3-10. Simulated Milk Consumption With and Without Generic Fluid Milk Marketing. 

A BCR can be computed as the change in net revenue (processor surplus)4 due to generic dairy 

marketing divided by the cost of the checkoff program. To compute the BCR for the Fluid Milk 

Program,

5 the estimated demand equation was simulated for two scenarios for the period from 

1999 through 2010: (1) a baseline scenario in which the combined fluid milk marketing 

(advertising and non-advertising) expenditures were equal to actual marketing expenditures 

under the two programs, and (2) a no Fluid Milk Program scenario, in which fluid milk

processor-sponsored marketing were reduced to 5.0 percent of their actual levels, but dairy 

farmer fluid milk marketing expenditures were set at historical levels.6 A BCR for the fluid milk 

processor program can be computed on the basis of the difference in market conditions between 

these two scenarios.

To estimate the BCR, an estimate of the supply response by fluid milk processors and a retail-

 

4 “Net revenue” is defined as the aggregate gain in total fluid milk processor revenue from price and demand 

enhancements due to generic fluid milk advertising and non-advertising less the increase in supply costs for the 

additional milk marketed by fluid milk processors. Economists refer to this notion of net revenue as “producer 

surplus.” The same term could be used for dairy farmer supplying milk to processors or processors supply milk and 

dairy products to consumers. For this paper, in order to avoid confusion, we make a distinction between “processor” 

surplus and producer surplus since the term producer usually refers to dairy farmers in the dairy industry.

5 A separate BCR is computed for the dairy farmers’ program in the next section.

6 5.0 percent rather than 0.0 percent of fluid milk processors’ actual marketing expenditures was used since this is a 

logarithmic model and the logarithm of zero and other small positive amounts can result in extreme values. 

 

44.0

46.0

48.0

50.0

52.0

54.0

56.0

58.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Billion pounds

Year

Program No Program
42

processor margin equation are necessary in addition to the fluid milk demand equation.7 Using 

quarterly data from 1995 through 2010, the supply from fluid milk processors was estimated as a 

function of fluid milk supply in the previous quarter, inflation-adjusted processor fluid price, 

inflation-adjusted Class I price, and a trend term. The estimated long-run own price elasticity of 

supply was computed to be 0.122, i.e., a 1.0 percent increase in the processor price results in a 

0.122 percent increase in quantity of fluid milk supplied. In addition, a retail-processor margin 

equation was estimated by regressing the retail price index on the wholesale processor price. 

The three equations, retail demand equation, processor supply equation, and the margin equation 

were used to simulate the processor market impacts of the Fluid Milk Program. 

Table 3-2 presents the average quarterly impacts and BCRs (from 1999 to 2010) for the Fluid 

Milk Program. Fluid Milk Program generic marketing had a positive impact on the price fluid 

milk processors received over this period. The average increase in price from 1999 to 2010 was 

5.1 percent. In other words, had there not been any marketing by the Fluid Milk Program, the 

average fluid milk processors’ price would have been 5.1 percent lower from 1999 to 2010 than 

it actually was. The increase in overall milk consumption due to the Fluid Milk Program (not the 

dairy farmers’ marketing) was 6.0 percent. 

Fluid Milk Program marketing efforts had a positive impact on processor net revenue over this 

period as well. The average increase in processor net revenue from 1999 to 2010 was $1.144 

billion per year. In other words, had there not been any Fluid Milk Program marketing, average 

fluid milk processor net revenue would have been $1.144 billion per year lower from 1999 to 

2010 than it actually was. 

How does the gain in processor net revenue compare with the costs of the fluid milk processors’ 

program? To answer the question, an average BCR was computed. A BCR greater than 1.0 

implies that the total benefits of the Fluid Milk Program exceed the costs. The average BCR 

from 1999 to 2010 was 10.38. 

Table 3-2. Average Market Impacts of Fluid Processor Generic Marketing Program, 1999-2010. 

Item

Change in processor price (percent) 5.1

Change in milk consumption (percent) 6.0

Change in processor net revenue ($ million per year) 1,144

Change in marketing costs ($ million per year) 110.2

Benefit-cost ratio 10.38

Lower bound of 90 percent confidence interval for BCR 4.84

 

7 All the results of the econometric estimation are provided in the following report: Kaiser, Harry M. “Measuring 

the Impacts of Generic Fluid Milk and Dairy Marketing.” NICPRE Research Bulletin, School of Applied Economics 

and Management, Cornell University, 2011, which is available from the following Website: 

http://www.aem.cornell.edu/research/rb.php. 
43

This implies that, on average over the period 1999-2010, the benefits of the Fluid Milk Program 

marketing programs have been 10.38 times greater than the costs, i.e., every dollar invested in 

Fluid Milk Program marketing yielded an additional $10.38 in industry net revenue. 

To make allowance for the error inherent in any statistical estimation, a 90 percent confidence 

interval was calculated for the average BCR, providing a lower for the average BCR. One can 

be 90 percent “confident” that the true average BCR lies within those bounds. The estimated 

lower bound for the average BCR was 4.84. Since this lower bound is well above 1.0, it is 

reasonable to conclude that these confidence intervals give credence to the finding that the 

benefits of the Fluid Milk Program’s marketing activities have been greater than the cost of the 

programs. 

Questions often arise with respect to the accuracy of these BCR estimates. BCRs for commodity 

promotion programs are generally found to be large because marketing expenditures in relation 

to product value are small and, as such, only a small demand effect is needed to generate large 

positive returns. For example, generic milk marketing expenditures by fluid milk processors is a 

mere 0.9 percent of the recent average annual value of processor milk sales. The marketing 

activities resulted in modest gains in the quantity of milk products and a positive effect on 

processor prices, resulting in large positive net revenue from the marketing investment.

Analysis of All-Dairy Products Generic Marketing 

The following is a brief graphical overview of changes in per capita domestic commercial 

disappearance of all dairy products and factors hypothesized to affect it from 1995 through 2010. 

Figures 3-11 and 3-12 display the per capita domestic commercial disappearance of all dairy 

products since 1995 on a skim milk solids basis and milk fat basis, respectively. The trends in 

per capita consumption are substantially different for the milk fat basis measure compared with 

the skim milk solids based measure. On a milk fat basis, per capita consumption has increased 

by 8.5 percent over this period, although it actually decreased by 1.5 percent from 2008 to 2010. 

On a skim milk solids basis, per capita consumption has actually decreased by 1.3 percent since 

1995. 

An important factor influencing per capita commercial disappearance of all dairy products is the 

retail price of dairy products. Figure 3-13 displays the Consumer Price Index (CPI) for all dairy 

products relative to the CPI for all items. This figure indicates that there have been both ups and 

downs for retail dairy prices relative to all prices in the economy. For instance, the price of all 

dairy products declined in the most recent two years by 7.1 percent. 

A factor that had a positive impact on per capita commercial disappearance of all dairy products 

is the growth in real (inflation adjusted) income over this period. All dairy products are 

considered to be “normal goods,” which means that consumption increases as consumers’ 

disposable incomes increase. Figure 3-6 illustrates the steady positive trend in real per capita 

income (in 2010 dollars) from 1995 through 2010. Since 1995, real per capita income has 

increased by 26.6 percent, although it leveled off in 2007, and showed only weak growth since 

then. 
44

Figure 3-11. Domestic Per Capita Commercial Disappearance of Fluid Milk and Dairy Products 

(skim-milk-solids basis).

Figure 3-12. Domestic Per Capita Commercial Disappearance of Fluid Milk and Dairy Products 

(milk fat basis).

500

510

520

530

540

550

560

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Pounds

Year

550

560

570

580

590

600

610

620

630

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Pounds

Year
45

Figure 3-13. Retail Price of Dairy Products Relative to All Other Retail Prices.

Another factor that may have contributed to increasing per capita domestic commercial 

disappearance of all dairy products over part of this time period is generic marketing efforts by 

fluid milk processors and dairy farmers. Figure 3-14 shows generic fluid milk and dairy product 

advertising real expenditures by dairy farmers and fluid milk processors. Real (inflation

adjusted) dairy farmer advertising expenditures have fallen from $272.9 million in 1995 to $71.9 

million in 2010, a 73.6% decrease. Since the first full year of the Fluid Milk Program in 1997, 

expenditures on fluid milk advertising have also declined from $101.3 million (1997) to $51.6 

million in 2010, or 49.1 percent in real terms. Collectively, generic fluid milk advertising 

marketing expenditures by both dairy farmers and fluid milk processor increased by 67 percent. 

Figure 3-15 shows generic dairy non-advertising marketing activities (in 2010 dollars) by dairy 

farmers and fluid milk processors. Again, both shorter and longer term non-advertising 

marketing activities are included in these expenditures. The trend in these expenditures has been 

the opposite of generic advertising. Dairy farmers have increased their annual expenditures of 

non-advertising dairy marketing from $74.1 million in 1995 to $171 million in 2010, an increase 

of 130.8 percent. Fluid milk processors increased their expenditures in this category from almost 

$17.2 million in 1997 to $32.3 million in 2010, an 87.8 percent increase. Collectively, generic 

fluid milk non-advertising marketing expenditures by both dairy farmers and fluid milk

processors increased by 122.4 percent. 

Figure 3-16 shows combined generic dairy marketing (advertising and non-advertising) activities 

(in 2010 dollars) by dairy farmers and fluid milk processors. The trend here has been negative 

for both farmers and processors. Annual expenditures of combined dairy marketing by dairy 

farmers decreased from $347 million in 1995 to $242.9 million in 2010, a decrease of 30 percent. 

Annual combined generic marketing expenditures by fluid milk processors decreased from 

$118.6 million in 1997 to $83.9 million in 2010, a 29.3 percent decrease. Collectively, generic 

0.85

0.87

0.89

0.91

0.93

0.95

0.97

0.99

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Year
46

Figure 3-14. Real Dairy Advertising Expenditures, in 2010 Dollars, by Dairy Farmers and Fluid 

Milk Processors.

dairy and fluid milk marketing expenditures by both dairy farmers and fluid milk processors 

decreased by 29.8 percent. For fluid milk marketing expenditures, the decrease has been 

primarily due to inflation in media costs as well as the CPI, while some of this has been offset in 

total dairy marketing expenditures by increased farm marketings.

All Dairy Products Model Estimation 

To examine the overall impact of the Fluid Milk and Dairy Programs on overall dairy demand, 

we estimated a combined fluid milk/dairy product demand model that included all generic dairy 

advertising activities as one demand determinant, and all non-advertising dairy marketing 

activities as another demand determinant. Expenditures by dairy farmers and fluid milk 

processors for the following advertising activities were aggregated into one variable assumed to 

impact the all-dairy product demand model: television, radio, print, and outdoor media 

advertising for fluid milk and manufactured dairy products. Expenditures for the following 

shorter and longer term impact non-advertising, marketing activities were aggregated into one 

variable: retail programs, school marketing, food service and manufacturing programs, 

integrated communications, public relations, sales promotions, nutrition education, retail 

programs, sponsorships, nutrition on-pack communications, value-added projects, NFL 

marketing, product research, nutritional research, and nutritional affairs conducted by fluid milk 

processors and dairy farmers. In addition, the following variables were included as factors 

influencing per capita all-dairy products demand: the CPI for all-dairy products, per capita 

disposable income, and variables to capture seasonality in dairy product demand. Similar to the 

0

50,000

100,000

150,000

200,000

250,000

300,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Dairy farmers Fluid milk processors
47

Figure 3-15. Real Dairy Non-Advertising Expenditures, in 2010 Dollars, by Dairy Farmers and 

Fluid Milk Processors.

Figure 3-16. Real Dairy Advertising Plus Non-Advertising Expenditures, in 2010 Dollars, by 

Dairy Farmers and Fluid Milk Processors. 

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Dairy farmers Fluid milk processors

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$1,000

Year

Fluid milk processors Dairy farmers
48

fluid milk demand model, the all-dairy products demand model was estimated on a per capita 

basis to control for the influence of population increases on demand. The model was estimated 

with national quarterly data for 1995 through 2010. To account for the impact of inflation, all 

prices and income variables were deflated by the CPI for all items. Generic fluid milk and dairy 

product advertising expenditures were deflated by a weighted average media cost index 

(television, radio, print, and outdoor). Generic fluid milk and dairy product non-advertising 

marketing expenditures were deflated by the CPI for all items, and were lagged to capture 

carryover effects of advertising. Generic advertising expenditures were deflated by the media 

cost index, and were lagged two quarters in the milk fat basis model and one quarter in the skim 

milk solids basis model. While non-advertising marketing activities were combined into one 

variable, longer term non-advertising expenditures were lagged 9 quarters, while shorter term 

expenditures were lagged 4 quarters. 

Table 3-3 provides elasticities for the all-dairy product demand models on a milkfat and skimmilk-solids basis.8

 All variables, except income in the skim milk solids basis model, were 

statistically significant. The results indicate that a 1.0 percent increase in the real price for dairy 

products would result in 0.243 percent and 0.166 percent decreases in per capita all-dairy product 

quantity demanded on a skim milk solids basis and milk fat basis, respectively, holding all other 

variables constant. The average income elasticities for 1995 through 2010 were 0.078 (skim 

milk solids basis) and 0.900 (milk fat basis); in other words, a 1.0 percent increase in real per 

capita income would result in 0.078 percent (skim milk solids basis) and 0.900 percent (milk fat

basis) increases in per capita demand for all-dairy products holding all other variables constant. 

The major interest here is the advertising and non-advertising marketing elasticities. The 

average advertising elasticities for this period on a skim milk solids basis and milk fat basis were

0.031 and 0.048, respectively; a 1.0 percent increase in media advertising expenditures would 

increase per capita all-dairy product demand by 0.031 percent (skim milk solids basis) and 0.048 

percent (milk fat basis). 

Table 3-3. Average Elasticity Values (1995–2010) for Factors Affecting Per Capita All-dairy 

Products Demand. 

Skim-milksolids basisMilkfat 

basis

Demand Factor Elasticity Elasticity

CPI for all-dairy products -0.243** -0.166*

Per capita income 0.078 0.900**

Generic dairy advertising expendituresa 0.031** 0.048**

Generic dairy non-advertising marketing expendituresa 0.015** 0.016**

* Statistically significant at the 10 percent level or better.

** Statistically significant at the 1.0 percent level or better. a Long run elasticity computed as the sum of current and all lagged impacts.

 

8 The two models are for milk equivalent, calculated on a milk fat solids basis and skim milk solids basis. Not to be 

confused with models for skim milk solids and milkfat solids.
49

The average non-advertising marketing elasticities for this period were 0.015 (skim-milk-solids 

basis) and 0.016 (milk fat basis), respectively; a 1.0 percent increase in media advertising 

expenditures would increase per capita all-dairy product demand by 0.015 percent (skim- milksolids basis) and 0.016 percent (milk fat basis). The advertising elasticity in both models was 

found to be statistically larger than the non-advertising elasticity in both models: two times 

higher on a skim milk solids basis, and three times higher on a milk fat basis. (See Table 3-3). 

Dairy Farmer Benefit-Cost Analysis 

A BCR was calculated on both a milk fat basis and a skim-milk-solids basis by simulating two 

scenarios: (1) a baseline scenario in which combined marketing (advertising and non-advertising 

marketing) levels were equal to actual marketing expenditures under the two programs, and (2) a 

no national Dairy Program scenario in which there was fluid milk processor-sponsored 

marketing, but dairy farmer-sponsored marketing was reduced to 42 percent of actual levels to 

reflect the difference in assessment before and after the national program was enacted. A 

comparison of these two scenarios provided a measure of the impact of the Dairy Program. 

The benefits of the Dairy Program were calculated as the change in dairy farmer producer net 

revenue (i.e., producer surplus) due to demand enhancement from all marketing activities under 

the Dairy Program (i.e., the difference in producer net revenue between scenarios 1 and 2). The 

demand enhancement reflects increases in quantity and price as a result of the dairy farmers’ 

marketing program. The costs of the Dairy Program were calculated as the differences in total 

marketing costs before and after the national program was enacted. These scenarios were run for 

the time period 1999 through 2010 for the two milk-equivalent models: skim-milk-solids basis 

and milk fat basis. 

As was the case for the Fluid Milk Program, an own price elasticity of farm supply was 

necessary to compute the BCR, and consequently a farm milk supply equation was estimated. 

Using quarterly data from 1995 through 2010, a supply function for dairy farmers was estimated 

and the long-run own price elasticity of supply was computed to be 2.41, i.e., a 1.0 percent 

increase in the all milk price results in a 2.41 percent increase in quantity supplied of farm milk. 

This long run supply elasticity estimate was used as the base case for computing the BCR. 

Table 3-4 presents the average quarterly impacts and BCR (from 1999 to 2010) for the Dairy 

Program. The average all milk price from 1999 through 2010 was $14.74 per hundredweight. In 

the counter factual no national Dairy Program scenario for the skim-milk-solids model, the 

average all milk price was $14.43 per hundredweight, which is 31 cents lower. Thus, had there 

been no national Dairy Program over this period, the price farmers receive for their milk would 

have been 2.13 percent lower than it actually was. The total quantity of milk demand was 

estimated to be 1.64 percent higher, on a skim-milk-solids basis as a result of the Dairy Program. 

In the counter factual no national Dairy-Program scenario for the milk fat model, the average all 

milk price was $14.20 per hundredweight, which is 54 cents lower. Thus, had there been no 

national Dairy Program over this period, the price farmers receive for their milk would have been 

3.67 percent lower than it actually was. The total quantity of milk demand was estimated to be 

2.54 percent higher, on a milk fat basis as a result of the Dairy Program.

The results show that the average BCR for the Dairy Program was 4.93 (skim-milk-solids basis) 
50

Table 3-4. Average Market Impacts of Dairy Farmer Generic Marketing Program, 1999-2010. 

Item Skim-milksolids basisMilk fat basis

Change in all milk price (percent) 2.13% 3.67%

Change in total milk marketings (percent) 1.64% 2.54%

Change in producer net revenue ($ million per year) 754.1 1,380.0

Change in marketing costs ($ million per year) 152.9 152.9

Benefit-cost ratio (ratio) 4.93 9.02

Lower bound of 90 percent confidence interval for 

 BCR (ratio)

3.12 1.71

and 9.02 (milk fat basis) from 1999 through 2010. This means that each dollar invested in 

generic dairy marketing by dairy farmers during the period would return between $4.93 and 

$9.02, on average, in net revenue to farmers. The level of the BCR suggests that dairy farmer 

expenditures on advertising and non-advertising promotions have been a successful investment. 

In another interpretation of the BCR, the increase in real (2010 dollars) generic dairy marketing 

expenditures resulting from the Dairy Program costs dairy producers an additional $152.9 

million per year on average from 1999 through 2010. The additional generic dairy marketing 

resulted in higher demand, prices, and net revenue for dairy producers nationwide. Based on the 

simulations conducted, it is estimated that the average annual increase in producer net revenue 

(reflecting changes in both revenues and costs) due to the additional generic marketing under the 

Dairy Program was $754.1 million on a skim-milk-solids basis and $1.38 billion on a milk fat

basis. Dividing $754.1 (or $1,380) million by the additional Dairy Program cost of $152.9 

million results in the estimated BCRs of 4.93 (skim-milk-solids basis) and 9.02 (milk fat basis).

To make allowance for the error inherent in any statistical estimation, a 90 percent confidence 

interval was calculated for the average BCR, providing a lower estimate for the average BCR. 

One can be 90 percent “confident” that the true average BCR lies within those bounds. The 

estimated lower bound for the average BCRs in the skim-milk-solids basis and milk fat basis 

models are 3.12 and 1.71, respectively. Since both lower bounds are above 1.0, it is reasonable 

to conclude that these confidence intervals give credence to the finding that the benefits of the 

Dairy Program’s marketing activities have been greater than the cost of the programs. 

The change in generic dairy marketing expenditures noted previously is a mere 0.5 percent of the 

recent average annual value of farm milk marketings from 1999 through 2010 ($29.21 billion). 

The marketing activities resulted in modest gains in the quantity of dairy products and a positive 

effect on milk prices, resulting in large positive net revenue from the marketing investment. 

In addition to computing a BCR for the overall marketing efforts of dairy farmers, an average 

BCR was also calculated for generic advertising and non-advertising activities by dairy farmers. 

Similar to the elasticity results, the average BCR for advertising was significantly higher than for 

non-advertising. The average BCR for generic advertising in the skim-milk-solids model was 

6.03 compared with 3.31 for non-advertising marketing activities, and this difference was 

statistically significant at the 1.0 percent level. The average BCR for generic advertising in the 
51

milk fat model was 13.42 compared with 5.54 for non-advertising marketing activities, and this 

difference was statistically significant at the 1.0 percent level. Hence, dairy farmers are 

receiving a higher return from their generic advertising activities than the non-advertising 

marketing activities.
52

Table 3-A1. Description of Variables Used in Econometric Models.a 

Variable Description Units Meanb

Consumption Variables

RFDPC Annual retail fluid demand per capita lbs 191.0

(9.7)

RDDPCNF Annual retail all-dairy product demand per capita on a 

skim-milk-solids basis

lbs 542.5

(7.2)

RDDPCF Annual retail all-dairy product demand per capita on a milk

fat basis

lbs 590.8

(20.7) 

Price Indices

RFPCPI Consumer retail price index for fresh milk and cream 

deflated by consumer price index for nonalcoholic 

beverages (1982–84=1)

# 1.18

(0.10) 

RDPCPI Consumer retail price index for all-dairy products deflated 

by consumer retail price index for all items (1982–84=1)

# 0.93

(0.03)

RBEVCPI Consumer retail price index for non-alcoholic beverages 

(1982–84=100)

# 142.9

(11.1)

Demographic and Income Variables

INCPC Annual per capita disposable income, deflated by the 

consumer retail price index for all items (2010=1)

$ 33,200

(2,700)

AGE5 Percent of the population under age 6 % 6.95

(0.15)

FAFH% Food away from home expenditures as percent of total food 

expenditures

% 50.8

(2.1)

Marketing Expenditures

GFMA Annual generic fluid milk advertising expenditures by dairy 

farmers deflated by media cost index (2010 $)

$mil 61.0

(52.1)

GFMN Annual generic fluid milk non-advertising marketing 

expenditures by dairy farmers deflated by consumer price 

index (2010 $)

$mil 49.3

(17.9) 

GFDA Annual generic milk and dairy advertising expenditures by 

dairy farmers, deflated by media cost index (2010 $)

$mil 153.8

(74.9)

GFDN Annual generic milk and dairy non-advertising marketing 

expenditures by dairy farmers, deflated by media cost index 

(2010 $)

$mil 128.7

(40.5) 

GPMA Annual generic fluid milk advertising expenditures by fluid 

milk processors, deflated by media cost index (2010 $)

$mil 67.6

(25.7)

GPMN Annual generic fluid milk non-advertising marketing 

expenditures by fluid milk processors, deflated by 

consumer price index (2010 $)

$mil 20.9

(8.5) 

CBA Annual soy beverage + juice + bottled-water advertising 

expenditures deflated by media cost index (2010 $) 

$mil 209.2

(160.8) 

a Quarterly dummy variables and a time trend are also included in the model to account for seasonality in demand 

and changes in preferences.

b Computed over the period 1995–2010. Standard deviation in parentheses.
Appendix A-1 

National Dairy Promotion and Research Board

Member Listing

Region 1 (Oregon and Washington) 

George E. Marsh

Cornelius, Oregon 

1st Term Expires 10/31/12 

Region 2 (California) 

James L. Ahlem Renae A. De Jager 

Hilmar, California Chowchilla, California 

2nd Term Expires 10/31/13 1st Term Expires 10/31/13 

 

John B. Fiscalini Ronald L. Koetsier 

Modesto, California Visalia, California

2nd Term Expires 10/31/13 2nd Term Expires 10/31/11 

Stephen D. Maddox Ray S. Prock 

Riverdale, California Denair, California 

2nd Term Expires 10/31/13 1st Term Expires 10/31/12 

Brad J. Scott Arlene J. Vander Eyk

Moreno Valley, California Pixley, California

2nd Term Expires 10/31/13 1st Term Expires 10/31/12 

 

Region 3 (Arizona, Colorado, Idaho, Montana, Nevada, Utah, and Wyoming) 

Brian W. Esplin Jeffrey A. Hardy

Shelley, Idaho Brigham City, Utah

1st Term Expires 10/31/12 1st Term Expires 10/31/13 

 

Ronald E. Shelton Harold A. Wick 

Greeley, Colorado Austin, Colorado 

1st Term Expires 10/31/11 1st Term Expires 10/31/11 

Region 4 (Arkansas, Kansas, New Mexico, Oklahoma, and Texas) 

William R. Anglin Steven R. Hanson 

Bentonville, Arkansas Clovis, New Mexico

2nd Term Expires 10/31/11 1st Term Expires 10/31/13 

Neil A. Hoff Byron A. Lehman 

Windthorst, Texas Newton, Kansas 

1st Term Expires 10/31/12 1st Term Expires 10/31/11 
Appendix A-1, continued

Region 5 (Minnesota, North Dakota, and South Dakota) 

Paul A. Fritsche Kenton W. Holle 

New Ulm, Minnesota Mandan, North Dakota 

1st Term Expires 10/31/12 1st Term Expires 10/31/11 

Region 6 (Wisconsin) 

Patricia M. Boettcher Douglas T. Danielson 

Bloomer, Wisconsin Cadott, Wisconsin 

1st Term Expires 10/31/12 1st Term Expires 10/31/13 

 

Sharon K. Laubscher Randy G. Roecker 

Wonewoc, Wisconsin Loganville, Wisconsin 

1st Term Expires 10/31/11 2nd Term Expires 10/31/12 

Carl F. Van Den Avond 

Green Bay, Wisconsin 

2nd Term Expires 10/31/11

Region 7 (Illionis, Iowa, Missouri, and Nebraska) 

Mark E. Erdman Douglas D. Nuttleman

Chenoa, Illinois Stromsburg, Nebraska 

1st Term Expires 10/31/12 2nd Term Expires 10/31/11

Region 8 (Alabama, Kentucky, Louisiana, Mississippi, and Tennessee) 

Larry B. Jaggers 

Glendale, Kentucky

1st Term Expires 10/31/11

Region 9 (Indiana, Michigan, Ohio, and West Virginia) 

Douglas L. Krickenbarger Carl A. Schmitz 

West Alexandria, Ohio Wadesville, Indiana 

1st Term Expires 10/31/13 2nd Term Expires 10/31/11 

Susan D. K. Troyer 

Goshen, Indiana

1st Term Expires 10/31/12 

Region 10 (Florida, Georgia, North Carolina, South Carolina, and Virginia) 

Zachary H. Myers

Jonesville, North Carolina 

1st Term Expires 10/31/13 
Appendix A-1, continued

Region 11 (Delaware, Maryland, New Jersey, and Pennsylvania) 

David P. Crowl Rita P. Kennedy 

Forest Hill, Maryland Butler, Pennsylvania 

1st Term Expires 10/31/13 2nd Term Expires 10/31/12 

 

Region 12 (New York) 

Ronald R. McCormick Sanford Stauffer

Java Center, New York Nicholville, New York 

1st Term Expires 10/31/12 1st Term Expires 10/31/13 

Region 13 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 

Vermont)

Ellen H. Paradee

Grand Isle, Vermont

1st Term Expires 10/31/11
4 

Appendix A-2 

National Fluid Milk Processor Promotion Board

Member Listing

Region 1 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 

Vermont)

Michael F. Touhey, Jr. 

Dean Foods Company 

Franklin, Massachusetts 

Term Expires 06/30/2010 

Region 2 (New Jersey and New York)

James F. Walsh

H.P. Hood, L.L.C. 

Lynnefield, Massachusetts 

Term Expires 06/30/2011 

Region 3 (Delaware, District of Columbia, Maryland, Pennsylvania, and Virginia) 

Jay S. Bryant 

Maryland and Virginia Milk Producer’s Cooperative Association, Inc. 

Reston, Virginia 

Term Expires 06/30/2012 

Region 4 (Georgia, North Carolina, and South Carolina) 

Charles L. Gaither, Jr.

Milkco, Inc.

Asheville, North Carolina 

Term Expires 06/30/2010 

Region 5 (Florida) 

Michael R. Smith

Publix Super Markets, Inc.

Lakeland, Florida

Term Expires 06/30/2011 

Region 6 (Ohio and West Virginia) 

Charles S. Mayfield, Jr. 

Mayfield Dairy (a subsidiary of Dean Foods Company) 

Athens, Tennessee 

Term Expires 06/30/2012 
5 

Appendix A-2, continued

Region 7 (Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin) 

James B. Green

Kemps, L.L.C. (a subsidiary of H.P. Hood, L.L.C.) 

St. Paul, Minnesota 

Term Expires 06/30/2010 

Region 8 (Illinois and Indiana) 

Brian Haugh 

National Dairy Holdings (a subsidiary of Grupo Lala)

Dallas, Texas

Term Expires 06/30/2011 

Region 9 (Alabama, Kentucky, Louisiana, Mississippi, and Tennessee) 

Edward L. Mullins 

Prairie Farms Dairy, Inc.

Carlinville, Illinois

Term Expires 06/30/2012 

Region 10 (Texas) 

Robert B. McCullough 

H.E. Butt Grocery Company

San Antonio, Texas 

Term Expires 06/30/2010 

Region 11 (Arkansas, Iowa, Kansas, Missouri, Nebraska, and Oklahoma) 

Steven M. Turner 

Turner Dairy L.L.C. (a subsidiary of Prairie Farms Dairy, Inc.)

Covington, Tennessee 

Term Expires 06/30/2011 

Region 12 (Arizona, Colorado, Nevada, New Mexico, and Utah) 

John R. Zuroweste 

Dean Foods Company 

Dallas, Texas

Term Expires 06/30/2012 

Region 13 (Idaho, Montana, Oregon, Washington, and Wyoming) 

Jerry N. Tidwell

Safeway, Inc.

Pleasanton, California 

Term Expires 06/30/2010 
6 

Appendix A-2, continued

Region 14 (Northern California) 

Jay B. Simon 

Super Store Industries 

Stockton, California 

Term Expires 06/30/2011 

Region 15 (Southern California) 

Timothy Kelbel

The Kroger Company, Western Division 

Cincinnati, Ohio 

Term Expires 06/30/2012 

Members-At-Large (Processors)

Miriam E. Brown

Anderson Erikson Dairy 

Des Moines, Iowa 

Term Expires 06/30/2012 

Michael A. Krueger

Shamrock Foods Company 

Phoenix, Arizona 

Term Expires 06/30/2011 

Randy D. Mooney 

Hiland Dairy Foods Company, L.L.C. 

Springfield, Missouri 

Term Expires 06/30/2010 

Teresa E. Webb

Farmland Dairies, L.L.C.

Wallington, New Jersey 

Term Expires 06/30/2010 

Members-At-Large (Public)

Mary A. Hill

Jackson, Mississippi

Term Expires 06/30/2012 
1

Appendix B–1 

National Dairy Promotion and Research Board

2010 Actual Income and Expenses

(Thousands)

 

Income

Assessments $95,701 

Interest 23 

NAEMS1 Interest 221

Total Income $95,945 

General Expenditures

General and Administrative $3,796 

USDA Oversight 927 

Total General Expenditures $4,723 

Program Expenditures

Domestic Marketing and Export Enhancement $95,941 

Excess of Revenue (Under) Over Expenditures ($4,719) 

Fund Balance, Beginning of Year $22,339 

Fund Balance, End of Year $17,620 

1

National Air Emissions Monitoring Study.

Source: Independent Auditor’s Report of the National Dairy Board and USDA records. 
2

Appendix B–2 

2010 USDA Oversight Costs for the

National Dairy Promotion and Research Board

(Thousands)

 

Salaries and Benefits $588 

Travel 65 

Miscellaneous1 55 

Equipment 1 

Total $709 

Independent Evaluation $125 

Total2 $834 

1

Includes overhead, transportation, rent, communications, utilities, postage, contracts, supplies, photocopying, and 

 Office of General Counsel costs. 2

The totals for USDA expenses differ slightly from those shown in Appendix B–1 because of end-of-year estimates

 which are adjusted in the following year and correspond to the Federal fiscal year, which runs from 

 October 1 through September 30.

Source: USDA Accounting Reports. 
3

Appendix B–3 

National Dairy Promotion and Research Board

2010 Approved Budget

(Thousands)

 

Revenues

Domestic Assessments $91,650 

Import Assessments 4,700 

Program Development Fund Draw 14,600 

Interest 55 

Total Income $111,005 

Expenses

General and Administrative $4,162 

USDA Oversight 948 

Subtotal $5,110 

Program Budget

Milk $17,423 

Cheese 11,695 

Ingredients 418 

Export Enhancement 12,669 

Children’s Fitness and Nutrition Initiative 15,350 

Product Research 872 

Nutrition Research 1,096 

Nutrition Affairs 5,677 

Industry Image and Relations 9,173 

Foodservice 374 

Retail 1,379 

Strategy and Insights 5,715 

Sustainability 1,609 

Other1 4,545 

Subtotal $87,995* 

Dairy Research Institute 14,984 

Business Development Fund 1,900 

Total Budget Expenditures $104,879 

1

Other includes fixed commitments, butter promotion, value–added milk, and value–added cheese. 

*UDIA Expense share of total is $23,805. 

Source: Budgets received and approved by USDA from the National Dairy Board. 
4

Appendix B–4 

National Fluid Milk Processor Promotion Board

2010 Actual Income and Expenses

(Thousands)

Income

Assessments $106,974 

Late-Payment Charges 80 

Interest 144 

Other 8 

Total Income $107,206 

General Expenditures

California Refund 10,001 

Administrative 2,520 

USDA Oversight 471 

USDA Assessment Verification 87 

Total General Expenditures $13,079 

Program Expenditures

Moms Target $57,641 

Teens Target 24,365 

Hispanic Target 6,948 

Market Research 4,308 

Business Development 5,009 

Program Measurement 45 

Total Program Expenditures $98,316 

Excess of Revenue (Under) Over Expenditures ($4,188) 

Fund Balance, Beginning of Year $19,356 

Fund Balance, End of Year $15,168 

Source: Independent Auditor’s Report of the Fluid Milk Board and USDA Records. 
5

Appendix B–5

USDA 2009 Oversight Costs for the

National Fluid Milk Processor Promotion Board

(Thousands)

Salaries and Benefits $403 

Travel 17 

Miscellaneous1 40 

Equipment 5 

Printing 1 

Total $466 

Independent Evaluation $37 

Total2 $503 

1 Includes overhead, transportation, rent, communications, utilities, postage, contracts, supplies, photocopying, and 

 Office of General Counsel costs. 2 The totals for USDA expenses differ slightly from those shown in Appendix B–4 because of end-of-year estimates

 which are adjusted in the following year.

Source: USDA Accounting Reports.

 
6

Appendix B–6 

National Fluid Milk Processor Promotion Board

2010 Approved Budget

(Thousands)

 

Revenues

Assessments $107,500 

Interest 160

Total Income $107,660 

Carryover from Previous Fiscal Year $4,269 

Total Available Funds $111,929

Expenses

General and Administrative $2,855 

USDA Oversight 570 

California Refund 10,210 

Subtotal $13,635 

Program Budget

Moms $58,450 

Teens 24,320 

Hispanic 7,090 

Business Development 5,246 

Research 4,774 

Program Measurement 105 

Subtotal $99,985 

Unallocated 973 

Total Budget Expenditures $100,958

1

Independent Evaluation costs are included in Program Measurement Expenses.

2

Processor Compliance is included in General and Administrative Expenses.

Source: Budgets from the National Fluid Milk Board received and approved by USDA. 
7

Appendix B–7 

2010 Aggregate Income and Expenditure Data 

Reported to USDA by the Qualified Programs

(Thousands)

 2009 

Income

Carryover from Previous Year $73,3271 

Producer Remittances 194,240 

Transfers from Other Qualified Programs2 57,958 

Transfers to Other Qualified Programs -58,803 

Other Income 5,198 

Total Adjusted Annual Income $271,920 

Expenditures

General and Administrative $8,728 

Advertising and Sales Promotion 68,605 

Unified Marketing Plan4 72,933 

Dairy Foods and Nutrition Research 5,981 

Public and Industry Communications 13,198 

Nutrition Education 18,058 

Market and Economic Research 1,934 

Other5 2,049 

Total Annual Expenditures $191,486 

Total Available for Future Year Programs $80,434 

 

1 Differences are due to audit adjustments and varying accounting periods.

2 Payments transferred between Qualified Programs differ due to different accounting methods and accounting 

 periods. 3 Includes interest, income from processors and handlers, sales of supplies and materials, contributions, and rental

 income. 4 Unified Marketing Plan: Reported local spending by United Dairy Industry Association units participating in the

 Dairy Management Inc. unified marketing plan to fund national implementation programs. 5 Includes capital expenses.

Source: Data reported by the Qualified Programs. 
8

Appendix B–8 

Aggregate 2010 Advertising Expenditure Data Reported 

to USDA by the Qualified Programs

(Thousands)

 

Advertising Programs

Fluid Milk $12,642 [18.4%]

Cheese 34,129 [49.7%]

Butter 8,801 [12.8%]

Frozen Dairy Products 1,650 [2.4%]

Other1 11,383 [16.6%]

Total $68,605 [100%]

1 Includes “Real Seal,” holiday, multi-product, calcium, foodservice, product donation at State

 fairs, and other events and contributions for displays or promotional events.

Source: Data reported by the Qualified Programs. 








































1

 Appendix D–1 

National Dairy Promotion and Research Board 

and Dairy Management Inc. 

Contracts Reviewed by USDA

Advertising and Marketing Services

American Dairy Association Mid East–Professional Staff Services

Dairy Farmers, Inc.–Professional Services

Domino’s Pizza–Cheese Promotion Activity 

G2 Promotional Marketing–Marketing and Retail Support Activities

H.P. Hood–Lactose-Free Half-and-Half Market Introduction 

Media Management Services–Child Nutrition & Fitness Initiative strategic support and 

 planning 

Prevail! Strategic Marketing and Communications–Health and wellness communications 

 services

Southeast United Dairy Industry Association–Professional services

Willard Bishop–Market research on packaging innovation; strategic insights program services

Wisconsin Milk Marketing Board–National butter program

Communications, Public Relations, and Nutrition Education

Action for Healthy Kids, Inc.– Fuel up to Play 60 school recruitment and implementation 

Bader Rutter & Associates–Sustainability and Hispanic marketing communications; dairy 

 snacking white paper; www.USDairy.com website development; ingredients communications; 

 lactose intolerance white paper communications; international dairy show communications; 

 health and wellness communications

Baxter Communications–Video and communications services

Blu Skye Sustainability–Dairy industry sustainability initiative services

Burson–Marsteller–Dairy market research

Ceres Connections–Child Nutrition and Fitness Initiative consulting 

Cleveland Dovington Partners, Inc.–Information technology services and consulting; 

contracts management enhancements

Dairy Farmers, Inc.–Communication activities, unified marketing plan implementation

Digital Influence–Lactose-free social media campaign

Edelman Public Relations Worldwide–Public relations support; spokesperson strategic 

 consulting and coordination; lactose intolerance; Fuel Up to Play 60, health professional public 

 relations, National Dairy Council news bureau public relations, Website, newsletter and 

 e-mail services

FoodMinds L.L.C.–Whey protein communications; sports nutrition; regulatory affairs; 

 healthy aging and bone and joint health consumer research; issues training support, Nutrient 

 Rich Foods public relations; nutrition research honorariums; child nutrition; sports nutrition; 

 lactose intolerance public relations 

Food, Research, and Action Center– Breakfast and Fuel up to Play 60 expansion services

Fresh Approach–Commodity roundtable services

The Hartman Group–Assess consumer motives and drivers for plant-based diets 

Health & Nutrition Network–Consulting services

I–Site Web Design–School marketing Website program; Fuel up to Play 60 program services
2

Appendix D-1, continued

Kelly Czerwonka–Consulting services 

LevCom–Professional services 

Marketing Drive–Communication services

National Dairy Shrine–Dairy scholarship program

Nutrition Impact L.L.C.–Nutrient consulting and project services

Results Direct–USDEC Website activities

Richter Studios–www.dairyfarmingtoday.org Website activities

Ruby–Do Special Projects–Industry image and relations consulting 

School Nutrition Foundation–School marketing and promotion

Weber Shandwick, Inc.– Issues monitoring and response; crisis communications program; 

 Mydairy social media; on-line dairy advocates program

Export and Ingredients

2020 Company L.L.C.–eTrade document exchange system 

American–Mexican Marketing–Mexican market representation and program activities 

Arab Marketing Finance, Inc.–Middle East market representation and program activities

Bain & Company- Analysis of global dairy market

Canadean Limited-Global dairy ingredients database

Carla Sorenson–Professional services

Contacts International Consulting, Ltd.–South American market representation and program 

 activities

Dairy Farmers, Inc.–Caribbean retail promotion activities

DH Business Consulting–Consulting services 

Howard Valentine–Consulting services

IntNet–Korean market representation and program activities

Joan C. Parker–Consulting services 

Knowledge Networks–Consumer confidence messages and claims 

Market Makers–Japanese market representative and program activities 

Midwest Dairy Association–Ingredient trade servicing

National Milk Producers Federation–Global and domestic research activities; trade

 barriers; marketing information and economic research services; animal health and welfare

 issues 

Novak Birch–Website creative and design services

PR Consultants–Chinese market representation and program activities

Pacrim Associates–Southeast Asian market representation and program activities

Results Direct–USDEC Website activities www.usdec.org

Schonrock Consulting–Professional services

Steve Calhoun–Consulting services 

Story Consulting–Consulting services 

Synovate–Consumer awareness of sodium research; plant-based diets

Market and Economic Research, Consulting Services 

Burrelle’s Luce–Media monitoring 

CFE Solutions, Inc.–Consulting services
3

Appendix D-1, continued

Clift Research–Milk and cereal qualitative research

Culinary Sales Support–Menu development, pizza workshops; American pizza tradition and 

 trends monograph

Global Dairy Platform, L.L.C.–Development, maintenance and dissemination of specific

 market and consumer research 

GFK Custom Research–Health professionals dairy nutrition tracking study 

Hartman Group–Explore consumer attitudes and behaviors with regard plant-based diets

Marketecture–Issues management and monitoring 

Marketing Concepts–Research and innovation services; Real Seal administration

National Milk Producers Federation–Domestic research program activities/animal health 

 and welfare issues activities; global research

NPD Group–Lactose free specialty coffee market research

Peryam & Kroll– Nutritional beverage sensory test

Results Direct–Website support services 

Shainwright Consulting–Consulting and research services

TNS Custom Research–World panel beverage usage data subscription; milk competitive set

 projects; Milk barriers and opportunities research tracking project 

Valid International–Development, acceptability and effectiveness trial of milk whey protein 

 based ready-to-use therapeutic food in treatment of severe acute malnutrition in under-five 

 children 

Video Monitoring Services–Broadcast and communications monitoring 

Watson Mulhern L.L.C.–Consulting services 
4

Appendix D–2 

National Fluid Milk Processor Promotion Board 

Contracts Reviewed by USDA

Robert P. Heaney–Medical Advisory Board member services

James O. Hill–Medical Advisory Board member services

Christina Economos–Medical Advisory board member services

Advertising, Promotion, and Public Relations

CMGRP, Inc. d/b/a Weber Shandwick–Direct marketing and promotion services

Inland Label and Marketing–Customer service, storage and fulfillment services

NFL Properties–Player services

Outloud–Marketing communications 

Real Media Value–Media evaluation services

Siboney USA–Hispanic marketing program

Market Research and Evaluation, and Consulting Services

Applied Thinking–-Market mix methodology review

Artemis Strategy Group–Market research

Beverage Marketing Corporation–Consulting/competitive strategy development

Data Development World Wide–Market research

Deutsch-Hispanic market research; creation of a market research database

Dynamic Logic–Advertising analysis

Gavin Chalcraft–Analysis and development of strategic recommendations 

Greenfield Consulting Group–Qualitative market research

Guia Brand Plannning–Hispanic teen market research

International Dairy Foods Association–Professional consulting and communications services 

Kaley Warner Klemp–Consulting services

Kelly Fisher–Consulting services

Monitor Company–Market research services

Phoenix Marketing Group–Hispanic qualitative market research

Prime Consulting Group–Consulting services, survey analyses and strategic planning 

Radius Global Market Research–Hispanic teen market research; serving size assessment

RealMediaValue Company–Media evaluation services

Team Services–Strategic consulting services

Victor Zaborsky–Consulting services

Other Agreements 

International Dairy Foods Association–Professional management services

Kaley Warner Klemp–Staff development and strategic planning retreat

L&M Productions–Audiovisual services

Snyder, Cohn, Collyer, Hamilton & Associates, P.C.–Audit services
1

Appendix E-1 

Dairy Foods Research Centers

California Dairy Foods Research Center 

(University of California–Davis and California Polytechnic State University–San Luis Obispo): 

Specializes in Product Technology Development, Ingredient Technology, Product Health 

Enhancement Properties, Food Safety, and Quality Assurance.

Midwest Dairy Foods Research Center

(University of Minnesota–St. Paul, Iowa State University-Ames and South Dakota State 

University–Brookings): Concentrates on Natural and Processed Cheese Functionality and 

Flavor, Fluid Milk Flavor and Shelf Life, Genomics of Probiotic Bacteria, and Utilization of 

Acid and Salt Whey. 

Southeast Dairy Foods Research Center 

(North Carolina State University–Raleigh and Mississippi State University–Starkville): 

Specializes in Milk and Whey Ingredient Functionality, Thermal and Biological Processing, 

Sensory Properties of Cheese and Dairy Ingredients, Dairy Food Safety, and Microbial 

Technologies for Starter Cultures and Probiotics. 

Western Dairy Center 

(Utah State University–Logan): Specializes in Cheese Flavor and Functionality, Fluid Milk 

Processing, Whey and Milk Utilization, and Microbial Genetics and Physiology.

Wisconsin Center for Dairy Research

(University of Wisconsin–Madison): Explores Functional Flavor and Physical Properties of 

Cheese and Cheese Products, Whey and Whey Components, and Milk Components Used as 

Ingredients and as Finished Products, Cheese Making and Whey Processing and Separation 

Procedures, Use of Milkfat, and Food Safety and Quality Technology. 
2

Appendix E-2 

Dairy Foods Competitive Research Projects Active in 2010

Principal Investigator, Institution, and Project Title 

Allen E. Foegeding, Ph.D. (North Carolina State University): A Broad Survey of Chelating 

Agents to Enhance Heat Stability of Whey Proteins, in the Presence of Calcium, for Beverage 

Application [began in 2009]; Developing Whey Proteins Having Less Astringency at Low pH 

[began in 2009]; Designing Filler Particles to Imitate Fat in Cheddar Cheese [began in 2009]; 

Developing Whey Proteins Having Less Astringency at Low pH [began in 2009]; and Modifying 

Whey Proteins Having Less Astringency at Low pH [continued in 2010]. 

Daniel J. O’Sullivan, Ph.D. (University of Minnesota): De-Lactose Whey Fermentate Food 

Ingredient with Very Broad-Spectrum Antimicrobial Properties [began in 2009]; Factors 

Effecting Stability of Freeze-Dried Bifidobacteria [began in 2009]; and Over-Expression of 

Stress Genes to Improve Stability of Bifidobacteria in Yogurt [began in 2009].

Devin Peterson, Ph.D. (University of Minnesota): Inhibition of Off-Flavor Development in 

Non-Refrigerated Milk by Phenolic Chemistry [began in 2009]. A systematic study of cheese

microbiology and flavor based on salt cation substitution in lower sodium cheddar cheese 

Donald McMahon, Ph.D. (Utah State University): Designing Filler Particles to Imitate Fat in 

Cheddar Cheese [began in 2009]; A systematic study of cheese microbiology and flavor based on 

salt cation substitution in lower sodium cheddar cheese [began in 2010]; Designing filler particles 

to imitate fat in cheddar cheese; Influence of Salt-In-Water Content on Flavor of Full-Fat and LowFat Cheddar Cheese [began in 2009]; Influence of Starter Culture Growth on the Development of 

Rosey and Burnt-Brothy Flavors During Aging of Low Fat Cheese [began in 2009]; Flavor 

Comparison Between UHT Milk Heated by Conventional Methods and Electrical Resistive 

Heating [began in 2008]; Improve the Flavor of Low-Fat Cheese by Adding Innovative Cultures 

and/or Flavoring Systems [continued in 2010]; Innovative Approaches for Improving Low-Fat 

Mozzarella Cheese [continued in 2010]; At What Level do Consumers Notice Decreasing Salt 

Concentrations and at What Concentration is Acceptance Negatively Impacted [began in 2010] 

Francisco Diez-Gonzalez, Ph.D. (University of Minnesota): Improving the Safety of Queso 

Fresco Using GRAS Ingredients [began in 2008]. 

James L. Steele, Ph.D. (University of Wisconsin): Evaluation of Compositional Factors of 

Low-Fat and Low-Sodium Cheddar Cheeses on the Growth of Potential Pathogens in a Model 

System [began in 2009]; 

John A. Lucey, Ph.D. (University of Wisconsin): High Pressure Processing of Low-Fat Cheese 

[began in 2009]; Combined Native Whey and Casein Concentrate Production [continued in 

2010]; and Milk Protein Concentrate Functionality Improvement Program [continued in 2010].
3

Appendix E-2, continued

Lloyd Metzger, Ph.D. (South Dakota State University): Prediction of Process Cheese 

Instrumental Texture and Melting Characteristics Using Dielectric Spectroscopy and 

Chemometrics [began in 2009]; Evaluation of NFDM and MPC in Yogurt Manufacture 

[continued in 2010]; Low-Fat/Fat-Free Process Cheese For Slice-on-Slice Applications 

[continued in 2010]; and Manufacture of Reduced/Low Sodium SOS Process Cheese [continued 

in 2010].

MaryAnne Drake, Ph.D. (North Carolina State University): Influence of Starter Culture 

Growth on the Development of Rosey and Burnt-Brothy Flavors During Aging of Low-Fat 

Cheese [began in 2009]; Understanding the Role of Beverage Processing Steps on Whey Protein 

Flavor Contributions [began in 2009]; Identification of Chemical Components Responsible for 

Specific Flavors in WPC80 and WPI [continued in 2010]; Improving Whey Protein Off-Flavor 

Prevention Via Alternative Process Step Optimization [continued in 2010]; Low Fat Cheese 

Platform Study (Part 2): Quantify Compounds for Flavor in LF Cheddar Cheese [continued in 

2010]; Quantification and Aroma Quality of the Compounds Responsible for Desirable and 

Undesirable Flavor in Low-Fat Cheddar Cheese [continued in 2010]; At What Level do 

Consumers Notice Decreasing Salt Concentrations and at What Concentration is Acceptance 

Negatively Impacted [began in 2010]; Annatto partitioning in cheese and cheese whey [began in 

2010] 

Mark R. Etzel, Ph.D. (University of Wisconsin-Madison): Charged Ultrafiltration Membranes 

for Fractionation of Milk Proteins [began in 2009]; Electrostatic Repulsion Enhancement for 

Heat Stable, Clear Whey Protein Beverages [began in 2009]; and Creation of Whey Protein 

Enhanced Beverages that are Clear and Heat Stable at Acidic pH [continued in 2010].

Mark Johnson, Ph.D. (Wisconsin Center for Dairy Research): Influence of Starter Culture 

Growth on the Development of Rosey and Burnt-Brothy Flavors During Aging of Low-Fat 

Cheese [began in 2009]; 

Marie K. Walsh, Ph.D. (Utah State University): Production of High Protein Cheddar Cheese 

With an Improved Extrusion-Modified Texture [continued in 2010]; 

Nana Farkye, Ph.D. (California Polytechnic State University): Natural Mold Inhibition in 

Cheese by Lactic Acid Bacteria [initiated in 2009]; Influence of Starter Culture Growth on the 

Development of Rosey and Burnt-Brothy Flavors During Aging of Low-Fat Cheese [began in 

2009]; Improving Texture and Lubricity of Low-Fat Cheddar Cheese with Selected Surfactants 

and Gums [continued in 2010]; and Low- and Reduced-Sodium Cheese with Enhanced Flavor 

[continued in 2010] Can Increasing the Level of Primary Proteolysis Improve Lowfat Cheese 

Texture [began in 2010]; Effects of Salt Substitutes and Anti-Microbial Intervention Models on 

Functionality, Shelf-Life, and consumer acceptability of low sodium string cheese and the survival 

of pathogenic bacteria [began in 2010]
4

Appendix E-2, continued

Greg Thoma, Ph.D. (University of Arkansas) Comprehensive life cycle assessment for cheese 

and whey products; Comprehensive life cycle assessment for fluid dairy delivery systems 

[continued in 2010]

Peggy M. Tomasula, Ph.D. (USDA Agricultural Research Service): Development and 

Validation of the Effect of Interventions and Processes on Persistence of Listeria monocytogenes 

on Queso Fresco Cheese [continued in 2010].

Phillip S. Tong, Ph.D. (California Polytechnic State University): Evaluation of Properties of 

Vacuum Packaged Dry Dairy Powders [continued in 2010]; Improving Whey Protein Off-Flavor 

Prevention Via Alternative Process Step Optimization [continued in 2010]; and Milk Protein 

Concentrate Functionality Improvement Program [continued in 2010].

Qixin Zhong, Ph.D (The University of Tennessee): Magnetic Nanotubes to Purify High Value 

Peptides/Proteins from Unclarified Whey [continued in 2010]; Creating novel structures to 

stabilize whey proteins during heating nearby isoelectric points [began in 2010] 

Richard W. Hartel, Ph.D. (University of Wisconsin): Pro-Cream and DLP Blends as an 

Ingredient for Various Food Product Applications [began in 2009]; and Methods to Aid Drying 

of Delactose Permeate [continued in 2010]; Effect of Protein on Partial Coalescence in Ice 

Cream [began in 2010] 

Robert F. Roberts, Ph.D. (Pennsylvania State University): Influence of Delivery System on the 

Efficacy of a Probiotic Intervention [began in 2010] 

Roger Ruan, Ph.D. (University of Minnesota): Concentrated High Intensity Electric Field 

(CHIEF) Pasteurization of Milk [began in 2009]; and Non-Thermal Plasma and Electric Field 

Treatment of Milk [continued in 2010].

Selvarani Govindasamy-Lucey, Ph.D. (Wisconsin Center for Dairy Research): Low Sodium 

Cheddar Cheese by Controlling Microbial Activity and Enhancing Flavor [began in 2009]; and 

Manufacture of High Protein Cheddar Cheese Using Cold Extrusion [continued in 2010].

Tonya Schoenfuss, Ph.D. (University of Minnesota): Production of Low Sodium Cheddar 

Cheese; Improving Flavor Through the Use of Flavor Enhancers, Salt Replacers and Cheese 

Making Procedures [began in 2009]. 
5

Appendix E-3 

Nutrition Competitive Research Activities

Principal Investigator, Institution, and Project Title 

David J. Baer, Ph.D. (USDA-Agricultural Research Service-Beltsville Human Nutrition Research 

Center): Effects of Trans-Fatty Acids from Ruminant Sources on Risk Factor for Cardiovascular 

Disease [continued in 2010]; and Dietary Protein Sources and Their Effects on Risk Factors 

Associated with Cardiovascular Disease [continued in 2010].

Wayne Campbell, Ph.D. (Purdue University): Influence of Whey Protein on Body 

Composition, Glucose Metabolism, and Appetite in Middle-Aged Adults at Risk for Metabolic 

Syndrome [continued in 2010].

Joseph E. Donnelly, Ph.D., and Richard Washburn, Ph.D. (University of Kansas): Effects of 

Resistance Training and Milk Supplementation on Body Composition in Middle School Children 

[began in 2009].

Roger Fielding, Ph.D. (Tufts University): Efficacy of Whey Protein Supplementation on 

Resistance Exercise Induced Changes in Muscle Strength, Fat Free Mass, and Function in 

Mobility-Limited Older Adults [continued in 2010].

Ellen B. Fung, Ph.D., RD (Children’s Hospital Oakland Research Institute): Evaluation of a 

Pilot Project to Add Yogurt to the WIC Food Package for Women [continued in 2010].

Bruce German, Ph.D. (University of California-Davis): Milk Glycolipids: Capturing the Value 

of a Novel Class of Complex Molecular Conjugates [continued in 2010]. 

Michael Holick, Ph.D., M.D. (Boston University School of Medicine): The Effect of Dietary 

Calcium and Vitamin D on Prostate Cancer [continued in 2010]. 

Karl L. Insogna, M.D. (Yale University) The Impact of a Protein Supplement on Bone Mass in 

Older Men and Women [began in 2009]. 

John L. Ivy, Ph.D. (The University of Texas at Austin): The Effect of Chocolate Milk (CM) on 

Exercise Recovery and Training Adaptation [continued in 2010].

Rachel Johnson, Ph.D., MPH, RD (University of Vermont): Evaluating the Acceptance of 

Reformulated Flavored Milk in Schools [began in 2009]. 

Kerry E. Kaylegian, Ph.D., John Coupland, Ph.D., and Ryan Elias, Ph.D. (Pennsylvania 

State University) Reduction of the saturated fat content of milk fat fractions by dry 

crystallization of anhydrous milk fat made from small and large milk fat globules obtained by 

microfiltration [began in 2010] 
6

Appendix E-3, continued

Nancy L. Keim, Ph.D. (USDA-Agricultural Research Service-Western Human Nutrition 

Research Center): The Effect of Dairy Foods in Normalizing the Hypothalamic-PituitaryAdrenal Axis in Overweight/Obese Adults Following Diet-Induced Weight Loss [continued in 

2010].

Todd Klaenhammer, Ph.D. (North Carolina State University): Identification of Probiotic 

Features of Lactobacillus acidophilus Affected by Dairy Delivery [continued in 2010]; and 

Influence of Lactic Acid Bacteria, Milk, Yogurt and Milk Components on Gene Expression in 

Human Intestinal Epithelia Cells [continued in 2010].

Ronald M. Krauss, Ph.D. (Children’s Hospital Oakland Research Institute): Dietary Protein 

and Saturated Fat Effects on Insulin Resistance [continued in 2010]; Changes in LDL and HDL 

With Increased Intake of Saturated Fat from Dairy Foods in Individuals with Atherogenic 

Dyslipidemia and LDL Subclass Pattern B [continued in 2010]; and Association of Dairy 

Consumption with Lipoprotein Subfractions and Cardiovascular Disease in the Malmo Diet and 

Cancer Study [began in 2009]. 

Marlena C. Kruger, Ph.D. (Massey University): The Effect of Whey Protein Concentrate 

Supplementation on Body Composition, Physical Performance and Nutritional Status in Older 

Adults; A Pilot Study [began in 2009]. 

Andre-Denis Wright, Ph.D. (University of Vermont): Influence of Maternal Intake of 

Conjugated Linoleic Acid on Hormone Responses by the Mammary Glands of Female Progeny 

[continued in 2010]; and The Impact of Natural and Industrial Sources of Trans Fatty Acids on 

the Development of Atherosclerosis in the ApoE*3 Leiden Mouse Model [continued in 2010].

Schuichi Machida, Ph.D. (Tokai University, Japan): The Effect of Whey Protein on Sarcopenia 

in the Elderly [continued in 2010].

Juan Medrano, Ph.D. (University of California-Davis): Genomic Approach to Optimize the 

Content of Beneficial Oligosaccharides in the Milk Supply [continued in 2010].

David Mills, Ph.D. (University of California-Davis): Isolation and Characterization of Lactic 

Acid Bacteria that Selectively Grow on the Unique Set of Oligosaccharides Found in Milk 

[continued in 2010].

Lynn L. Moore, Ph.D. (Boston University) Dietary patterns in children and adolescents and 

selected health outcomes [began in 2010]

Theresa Nicklas, Ph.D. (Baylor College of Medicine): Understanding Perceived Lactose 

Intolerance in White, Black and Hispanic Adults; and Healthy Eating and Lifestyle for Total 

Health (HEALTH) [continued in 2010].
7

Appendix E-3, continued

Sharon M. Nickols-Richardson, Ph.D. (Pennsylvania State University): Does a dairy-rich diet 

modify indicators of inflammatory and oxidative stress in adults with excess adiposity [began in 

2010]

Stuart Phillips, Ph.D. (McMaster University): Responses of Muscle and Whole-Body Protein 

Turnover to Ingestion of Differing Doses of Whey and Soy Protein With and Without Resistance 

Exercise in Elderly Men [continued in 2010]; and The Impact of Higher Dairy and Dietary 

Protein on the “Quality” of Hypoenergetic Diet and Exercise Induced Weight Loss in 

Pre-Menopausal, Overweight, and Obese Young Women [continued in 2010]. 

Karen Rafferty, M.S., RD, Robert Heaney, M.D. (Creighton University): A Project to 

Advance a Research Data Infrastructure by Creating a Master Data Bank [continued in 2010]. 

Helen Raybould, Ph.D. (University of California-Davis): Effects of Milk Components on 

Gastrointestinal Signaling Pathways [continued in 2010]; and Host Effects Derived from 

Milk-Dependent Production of Soluble Signals from Bifidobacteria [began in 2010].

Karen Schmidt, Ph.D. (University of Kansas): RFDH: A process lethality treatment that 

impacts unique functionality [began in 2010] 

Gloria Solano-Aguilar, Ph.D., and Todd R. Klaenhammer, Ph.D. (USDA Agricultural 

Research Service-Beltsville Human Nutrition Research Center and North Carolina State 

University): Effect of Dairy Delivery on Survival and Activity of Probiotic Cultures in vivo 

[continued in 2010]. 

Brian Timmons, Ph.D. (McMaster University): Milk for Lean Mass for Overweight Kids: The 

MILK with Exercise Study [Continued in 2010] 

Jeff Volek, Ph.D. (University of Connecticut): Investigation of Whey Protein Supplementation 

for Physiological Enhancement to Resistance Training and Dietary Regimes in Young Adults 

[continued in 2010]. 

Marta Van Loan, Ph.D. (USDA Agricultural Research Service) ,The Role of Dairy Foods in 

Enhancing Central Fat Loss and Weight Loss with Moderate Energy Restriction in Overweight 

and Obese Adults [continued in 2010] 

Rosemary Walzem, Ph.D. (Texas A&M University): Can Dairy Calcium Modulate 

Bodyweight Through Changes in Fecal Microbial Diversity? [continued in 2010]; Can dairy 

calcium modulate bodyweight through changes in fecal microbial diversity? [began in 2010] 

Youfa Wang, M.D., Ph.D. (Johns Hopkins University Bloomberg School of Public Health): 

The Influences of Dairy Consumption and Related Nutrients on Obesity, Metabolic Syndrome, 

and Type 2 Diabetes and the Ethnic Differences [completed in 2010]. 
8

Appendix E-3, continued

Richard A. Washburn, Ph.D. (University of Kansas): Whey Protein Supplementation with 

Resistance Training: Effect on Body Composition of Young Adults [continued in 2010]. 

 

Connie Weaver, Ph.D. (Purdue University): Influence of Dairy on Bone Mass Accrual, Bone 

Size and Fat and Lean Body Mass in Early Pubertal Overweight vs. Healthy Weight Girls 

[continued in 2010]. 

Michael B. Zemel, Ph.D. (University of Tennessee): Effects of Dairy Components on 

Monocyte-Endothelial Cell Vascular Infiltration and Inflammation [began in 2010]; Effects of 

Dairy Consumption on SIRT1 and Metabolic Risk in Humans [began in 2010]; Modulation of 

human airway smooth muscle function and hyperactivity by dairy components, [began in 2010]
9

Appendix E-4 

Sustainability Competitive Research Activities

Heber, Albert J., Ph.D. (Purdue University): Assessment of Carbon Footprint Contributions to 

Milk Products by U.S. Dairies; and Greenhouse Gas Emissions at US Dairies [continued in 

2010]. 

Olivier Jolliet, Ph.D. (University of Michigan): US Fluid Milk: Beyond Carbon LCA Study 

[began in 2010] 

Darrin Nutter, Ph.D (University of Arkansas): Sharing and dissemination of industry best 

practices to increase market competitiveness through the application of “Green Practices” – 

Phase 2 [began in 2010]
1

Appendix F

Qualified State or Regional Dairy Product Promotion,

Research, or Nutrition Education Programs

Allied Milk Producers’ Cooperative

495 Blough Road 

Hooversville, PA 15936–8207 

American Dairy Association Mid East

5950 Sharon Woods Blvd. 

Columbus, OH 43229 

American Dairy Association and Dairy 

 Council, Inc.

Interstate Place II, 100 Elwood Road 

North Syracuse, NY 13212 

American Dairy Association of Alabama 

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of Georgia

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of Kentucky

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of Michigan 

2163 Jolly Road 

Okemos, MI 48864 

American Dairy Association of Mississippi

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of Nebraska 

8205 F Street 

Omaha, NE 68127–1779 

American Dairy Association of 

 North Carolina 

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of

 South Carolina

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

American Dairy Association of 

 South Dakota

2015 Rice Street

St. Paul, MN 55113 

American Dairy Association of Virginia 

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

California Manufacturing Milk Producers

 Advisory Board 

3800 Cornucopia Way, Suite D 

Modesto, CA 95358–9492 

California Milk Producers Advisory Board 

3800 Cornucopia Way, Suite D 

Modesto, CA 95358–9492 

Dairy Council of California 

1101 National Drive, Suite B 

Sacramento, CA 95834–1945 

Dairy Council of Michigan 

2163 Jolly Road 

Okemos, MI 48864 

Dairy Council of Nebraska

8205 F Street 

Omaha, NE 68127–1779 

Dairy Farmers, Inc.

166 Lookout Place, Suite 100 

Maitland, FL 32751–4496
2

Appendix F, continued

DairyMAX

2214 Paddock Way Drive, Suite 600 

Grand Prairie, TX 75050 

 

Dairy Promotion, Inc.

10220 NW Ambassador Drive 

Kansas City, MO 64153 

Georgia Agricultural Commodity 

 Commission for Milk

19 Martin Luther King Jr., Dr., SW, Room 328 

Atlanta, GA 30334 

Granite State Dairy Promotion 

c/o New Hampshire Department of Agriculture

25 Capitol Street, Box 2042 

Concord, NH 03302–2042 

Idaho Dairy Products Commission 

10221 West Emerald, Suite 180 

Boise, ID 83704 

Illinois Milk Promotion Board 

1701 Towanda Avenue 

Bloomington, IL 61701 

Indiana Dairy Industry Development Board 

9360 Castlegate Drive 

Indianapolis, IN 46256 

Louisiana Dairy Industry Promotion Board 

c/o Louisiana Department of Agriculture 

 and Forestry 

47076 North Morrison Street

Hammond, LA 70401 

Maine Dairy and Nutrition Council

333 Cony Road 

Augusta, ME 04330 

Maine Dairy Promotion Board 

333 Cony Road 

Augusta, ME 04330 

Massachusetts Dairy Promotion Board

Suite 500, 251 Causeway Street 

Boston, MA 02114 

Michigan Dairy Market Program

P.O. Box 8002 

Novi, MI 48376–8002 

Mid–Atlantic Dairy Association 

325 Chestnut Street, Suite 600 

Philadelphia, PA 19106 

Midwest Dairy Association 

2015 Rice Street

St. Paul, MN 55113 

Midwest Dairy Council

2015 Rice Street

St. Paul, MN 55113 

Milk for Health on the Niagara Frontier, Inc.

4185 Seneca Street

West Seneca, NY 14224 

Milk Promotion Services of Indiana, Inc.

9360 Castlegate Drive 

Indianapolis, IN 46256 

Minnesota Dairy Research and Promotion 

 Council

2015 Rice Street

St. Paul, MN 55113 

Nebraska Dairy Industry Development 

 Board 

8205 F Street 

Omaha, NE 68127–1779 

Nevada Farm Bureau Dairy Producers

 Committee

2165 Green Vista Drive, Suite 205 

Sparks, NV 89431 
3

Appendix F, continued

New England Dairy and Food Council, Inc.

1034 Commonwealth Avenue 

Boston, MA 02215 

New England Dairy Promotion Board 

1034 Commonwealth Avenue 

Boston, MA 02215 

New Jersey Dairy Industry Advisory 

 Council c/o New Jersey Dept. of Agriculture

PO Box 330 

Trenton, NJ 08625–0330 

New York State Dept. of Agriculture and

 Markets

Division of Milk Control and Dairy Services 

10 B Airline Drive 

Albany, NY 12235–0001 

North Dakota Dairy Promotion Commission 

2015 Rice Street

St. Paul, MN 55113 

Oregon Dairy Products Commission

10505 Southwest Barbur Boulevard 

Portland, OR 97219 

Pennsylvania Dairy Promotion Program 

c/o Pennsylvania Department of Agriculture 

2301 North Cameron Street 

Harrisburg, PA 17110–9408

Promotion Services, Inc.

5340 West Fayetteville Road 

Atlanta, GA 30349–5416 

Rochester Health Foundation, Inc.

c/o ADADC, Inc. 

Interstate Place II, 100 Elwood Road 

North Syracuse, NY 13212 

Southeast United Dairy Industry Association

5340 West Fayetteville Road

Atlanta, GA 30349–5416 

Southwest Dairy Museum

P.O. Box 936

Sulphur Springs, TX 7548

Tennessee Dairy Promotion Committee

5340 West Fayetteville Road

Atlanta, GA 30349–5416 

United Dairymen of Arizona

2008 S. Hardy Drive

Tempe, AZ 85282

Utah Dairy Commission

1213 East 2100 South

Salt Lake City, UT 84106 

Vermont Dairy Promotion Council

116 State Street, Drawer 20

Montpelier, VT 05620–2901 

Washington State Dairy Council

4201 198th Street, SW, Suite 102

Lynnwood, WA 98036–6751 

Washington State Dairy Products 

Commission

4201 198th Street, SW, Suite 101 

Lynnwood, WA 98036

Western Dairy Association

12000 North Washington Street, Suite 200

Thornton, CO 80241

Wisconsin Milk Marketing Board, Inc.

8418 Excelsior Drive

Madison, WI 53717
1 

Appendix G

National Fluid Milk Processor Promotion Board 

Promotional Materials – Teens 

Milk Mustache Posters

 Deron Williams Shawn Johnson Albert Pujols

 Crystal Langhorne Reggie Bush & Reggie Wayne Reggie Bush
2 

Appendix G, continued

Milk Mustache Posters (cont.)

 Jennifer Hudson Dwight Howard Oreo

Milk the Moment

 Elizabeth & Tim Hasselbeck Michael Ventrella Jennifer Hudson

 MM Poster MM Ad

 Tyler Florence MM Banner
3 

Appendix G, continued

Body By Milk Celebzone Banners

 Shawn Johnson Deron Williams

 Albert Pujols Crystal Longhorne 

 Apolo Ohno Lindsey Vonn

 Jennifer Hudson Lauren Conrad 
4 

Appendix G, continued

Refuel With Chocolate Milk

 Refuel Banner Refuel with Celebs Refuel Poster

 Refuel Poster Refuel with Chris Bosh Refuel Wobbler

 

 Refuel Banner

Promotional Materials – Moms and Hispanics

Milk Mustache Posters - Hispanic

 Cristián de la Fuente Paulina Rubio Maggie Jimenez
5 

Appendix G, continued

Milk Mustache Posters – Hispanic (cont.)

Victoria Justice Handy Manny Sofia Vergara 

Halloween

 Halloween Cling – Bottle Halloween Banner Halloween Wobbler

Dia de los Muertos – Hispanic 

 Halloween Wobbler – Skeleton Halloween Cling – Bottle
6 

Appendix G, continued

Great Gallon Give 

 Give Banner GGG Cling GGG Wobbler GGG Wobbler – Hispanic

Liquid Sunshine

 LS Cling LS Banner LS Wobbler

Oreo

 Oreo Wobbler Pure Joy Cling Milk Mustache Poster 

Unlock Their Potential

 UTP Wobbler UTP Banner – Hispanic UTP Banner - Hipanic

 
1 

Appendix H-1

Regions of the National Dairy Promotion and Research Board

Region 1

[1]

Region 2

[8]

Region 3

[4]

Region 4

[4]

Region 5

[2]

Region 7

[2]

Region 6

[5]

Region 9

[3]

Region 11

[2]

Region 12

[2]

Region 8

[1]

Region 10

[1]

Region 13

[1]

Note: The number in brackets below each region

indicates the number of members within that region.
2 

Appendix H-2

 Regions of the National Fluid Milk Processor Promotion Board

Region 13

Region 14

Region 15

Region 12

Region 7

Region 11

Region 10

Region 8

Region 2

Region 1

Region 3 Region 6

Region 9 Region 4

Region 5