2018 

November 2020 
 

Contact Information 

Promotion, Research, and Planning Division 

USDA, Agricultural Marketing Service, Dairy Program 

Stop 0233, Room 2958-South 

1400 Independence Avenue SW 

Washington, DC 20250-0233 

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

Oral Capps, Jr., Ph.D. 

Executive Professor, Regents Professor and Co-Director of Agribusiness, Food and 

Consumer Economics Research Center 

Texas A&M University 

Department of Agricultural Economics 

2124 TAMU 

College Station, TX 77843 

(979) 845-5911 

Email: AFCERC@tamu.edu 

http://AFCERC.tamu.edu 

National Dairy Promotion and Research Board 

Dairy Management Inc. 

10255 West Higgins Road, Suite 900 

Rosemont, IL 60018 

(847) 803-2000 

http://www.dairy.org 

National Fluid Milk Processor Promotion Board 

1250 H Street NW, Suite 950 

Washington, DC 20005 

(202) 737-0153 

http://www.milklife.com 

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Mention of a trade name or brand name does not constitute endorsement or recommendation by 

USDA over other similar products not named. 

November 2020 

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Contents 

Contact Information.........................................................................................1 

Executive Summary..........................................................................................4 

Chapter 1: The Dairy and Fluid Milk Processor Promotion Programs.................................7 

Chapter 2: USDA Activities..............................................................................18 

Chapter 3: Quantitative Evaluation of the Effectiveness of Promotion Activities by the National 

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

Program........................................................................................................21 

Chapter 4: Qualified State, Regional, or Importer Dairy Product Promotion, Research, or 

Nutrition Education Programs..............................................................................43 

Additional Information: 2018 Approved Contracts, National Dairy Foods Research Centers, 

Research Activities, and Audits............................................................................68 

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Executive Summary 

The enabling legislation of the dairy producer, dairy importer, and fluid milk processor 

promotion programs requires the U.S. 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 dairy and fluid milk promotion 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 

dairy and fluid milk programs, including an accounting of funds collected and spent, USDA 

activities, and an independent analysis of the effectiveness of the programs. Unless otherwise 

noted, this report addresses program activities for January 1 through December 31, 2018, of the 

Dairy Promotion and Research Program and the Fluid Milk Processor Promotion Program. 

Dairy Promotion and Research Program 

Mandatory assessments collected under the Dairy Act totaled $412.3 million in 2018. The Dairy 

Board portion of assessments totaled $117.9 million and the Qualified Dairy Product Promotion, 

Research, or Nutrition Education Programs (QPs) totaled $294.4 million. Expenditures by the 

Dairy Board and many of the QPs are integrated through a joint process of planning and program 

implementation to work together on the national, regional, State, and local level. 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. 

During 2018, the Dairy Board continued its commitment to “sustainable nutrition.” Sustainable 

nutrition is the intersection of agriculture, food production, nutrition and health, and 

understanding how food nourishes the population while contributing to a healthy economy and 

environment. Building on the sustainable nutrition initiative, the Dairy Board launched the U.S. 

Dairy Stewardship Commitment. Through this program, the U.S. dairy community can 

document and demonstrate progress in important areas including animal care, environmental 

stewardship, and community impacts and contributions. The Stewardship Commitment will help 

show consumers and customers how the dairy industry is working collectively to continuously 

improve and transparently report its social, economic, and environmental impact. 

In 2018, the U.S. Dairy Export Council (USDEC) unveiled its newly developed “Next 5 Percent” 

plan. The plan aims to increase U.S. dairy export volume from 15 to 20 percent of total U.S. 

milk solids production by 2022. The plan focuses on building U.S. dairy’s visibility and 

credibility as a value-added and consistent global supplier. 

Details of the Dairy Board’s activities are presented in Chapter 1. Details of the QPs’ activities 

may be found in Chapter 4. 

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Fluid Milk Processor Promotion Program 

Mandatory assessments collected under the Fluid Milk Act totaled $89.0 million in 2018. The 

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 fluid milk, 

increase 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 Board focused on driving 

milk consumption and sales through increasing consumer relevance and trust in fluid milk 

through a renewed focus on helping build milk brands, working with industry partners, launching 

new campaigns promoting the positive attributes of milk’s nutrition, optimizing national 

partnerships, long-range planning, and a strategic roadmap to stem the decline in fluid milk 

consumption. 

In 2018, the Fluid Milk Board launched its Pour More Milk campaign, a program raising 

awareness around the importance of milk in childhood nutrition. According to the American 

Academy of Pediatrics, one out of two kids are falling short on the nutrients they need to grow 

strong and having milk with meals and water in between can help remedy this deficit. The Pour 

More Milk campaign focused on moms, encouraging them to serve more milk so their kids get 

the nutrients they need. 

The Fluid Milk Board continued its partnership during the 2018 Winter Olympic games with the 

United States Olympic Committee, naming white milk as an official sponsor of the Olympic 

Games through 2020. The Fluid Milk Board promoted a variety of messages and ads 

highlighting milk’s 8 grams of protein per 8-ounce serving. Through these messages, the Fluid 

Milk Board sought to educate the general market and Hispanic consumers on the importance of 

protein in the morning and milk’s essential nutrients. The Fluid Milk Board also continued its 

efforts to position chocolate milk as an authentic recovery beverage of choice for adult 

exercisers, by partnering with famous and elite athletes serving as influencers, through its Built 

with Chocolate Milk campaign. 

The Fluid Milk Order requires the Fluid Milk Board to return 80 percent of the funds received 

from California fluid milk processors to the California Milk Processor Board. Per the Fluid Milk 

Order requirement, $7.8 million was returned to the California Milk Processor Board. The 

California Milk Processor Board uses the funds to conduct its promotion activities, which 

include the got milk?® advertising campaign. The activities of the Fluid Milk Processor 

Promotion Program are presented in the Fluid Milk Board section in Chapter 1. 

USDA Activities 

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

oversight objectives ensure the boards and QPs properly account for all program funds and 

administer the programs in accordance with the respective acts, orders, USDA guidelines, and 

policies. USDA reviewed and approved all board budgets, contracts, and advertising materials. 

USDA employees attended all board and committee meetings, monitored all board activities, and 

were responsible for obtaining an independent evaluation of the programs. Additional USDA 

responsibilities include nominating and appointing board members, amending the orders, 

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conducting referenda, assisting with noncompliance cases, and conducting periodic program 

management reviews. The boards reimbursed the U.S. Secretary of Agriculture (Secretary), as 

required by the acts, for all of USDA’s costs of program oversight and for the independent 

analysis discussed in Chapter 3. Chapter 2 details USDA’s oversight activities. 

Independent Analysis 

Chapter 3 describes the results of the independent econometric analysis, conducted by Texas 

A&M University, on the effectiveness of the programs implemented by the Dairy Board and the 

Fluid Milk Board. The analysis indicates that the generic fluid milk marketing activities 

sponsored by the programs have mitigated the decline of fluid milk consumption. 

In addition, Chapter 3 presents the combined effects of 2017 promotion activities on the 

consumption of fluid milk, cheese, butter, all dairy products, and dairy exports and includes 

benefit-cost ratios (BCRs) for dairy producers, dairy importers, and fluid milk processors. For 

every dollar invested in demand-enhancing activities, the BCRs for producers were as follows: 

(1) fluid milk – $3.37, (2) cheese – $3.63, and (3) butter – $15.67. The BCR for fluid milk 

processors attributed to fluid milk promotion activities is $3.39. 

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Chapter 1 

The Dairy 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 fluid milk and dairy products. This chapter details the 

activities of each board. 

1. 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. The 

Dairy Board is responsible for administering the Dairy Order, developing plans and programs, 

approving budgets, and monitoring the program results. 

The Secretary appoints 37 members to the Dairy Board, 36 of whom are dairy producers, each 

representing 1 of 12 geographic regions within the United States, and 1 representing dairy 

importers. The appointments are made from nominations submitted by individual applicants, 

producer organizations, importer organizations, general farm organizations, and QPs. Dairy 

Board members must be active dairy producers or dairy importers. Members serve staggered 3-

year terms, with no member serving more than two consecutive terms. 

Total Dairy Board income and expenses are provided in the annual independent audit report. 

The Dairy Board’s administrative budget continued to be within the 5-percent-of-revenue 

limitation required by the Dairy Order. An independent auditor’s report for 2018 can be found in 

the Additional Information section of this report. 

The Dairy Board has two standing committees: the Finance Committee and the Executive 

Committee. The Finance Committee consists of the Dairy Board officers and appointees named 

by the Dairy Board Chair. The Dairy Board Treasurer chairs the Finance Committee. The full 

Dairy Board serves as the Executive Committee. The other Dairy Board committees are joint 

program committees with the United Dairy Industry Association (UDIA). 

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

between the Dairy Board and UDIA. UDIA is a federation of 19 of the 62 QPs under the 

direction of a board of directors. The mission of DMI is to drive increased sales of and demand 

for dairy products and ingredients on behalf of dairy producers and dairy importers. DMI works 

proactively, in partnership with leaders and innovators, to increase and leverage opportunities to 

expand dairy markets. The DMI Board of Directors comprises all Dairy Board (37) and all 

UDIA (45) members. Voting is equalized between the Dairy Board and UDIA. 

DMI serves the Dairy Board and the UDIA Board and facilitates the integration of 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 

must separately approve the DMI budget and annual plan before these plans can be implemented. 

During 2018, DMI continued to implement a national staffing structure to plan and execute the 

national programs. 

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DMI funds 1- to 3-year research projects supporting marketing efforts. Six Dairy Foods 

Research Centers and one Nutrition Institute provided much of the research in 2018. 

Universities and other industry researchers throughout the United States compete for these 

research contracts. A description of the research objectives and locations can be found in the 

Additional Information section of this report. 

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 four 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 DMI Board and joint committees set program 

priorities, plan activities and projects, and evaluate results. During 2018, the Dairy Board and 

UDIA Board met jointly six times. 

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

marketing strategies for the unified dairy promotion plan in 2018. These forums are designed to 

create one unified dairy promotion plan and allow opportunities for grassroots dairy producers to 

ask questions, raise concerns, and offer thoughts on the plan’s direction and development. 

The following information describes the Dairy Board and UDIA Board activities and initiatives 

implemented in 2018. 

National Dairy Council 

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

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

communication for more than 100 years. NDC provides timely, scientifically sound nutrition 

information to media, physicians, dietitians, nurses, educators, consumers, and other health 

professionals. NDC also funds independent research to aid in the ongoing discovery of 

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

industry for new dairy product innovation. 

In 2018, NDC published more than 30 scientific papers related to the health and nutrition 

benefits of dairy. NDC’s published research included the role that eating yogurt plays in 

reducing inflammation in women, protein’s association with physical function in older adults, 

and an evaluation of the link between whole and fat-free milk to cardiovascular risk factors in 

healthy adults. NDC’s research highlighting dairy’s role in reducing chronic inflammation was 

published in the British Journal of Nutrition and presented at the American Academy of Family 

Physicians’ Family Medicine Experience, reaching more than 5,000 family doctors. 

NDC’s product research aims to identify innovation and technical advancements to improve the 

shelf life and quality of cheese and milk powders to meet growing export demand. Coordinating 

environmental, nutrition, and product research and extension activities, NDC also works with 

third-party experts to ensure dairy is a sustainable, nutritious and safe food source meeting 

consumers’ needs. In 2018, NDC completed 19 research projects to grow sales for cheese, 

powder and other dairy products globally. 

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During 2018, NDC held its seventh annual new product competition. The competition provides 

an opportunity for undergraduate and graduate students to work in teams to develop a new dairy 

or dairy-based product and present the product at the American Dairy Scientists Association 

annual meeting. Through the competition, students research how dairy products and ingredients 

can meet consumer needs for taste, functionality, health, and wellness. The competition also 

provides insights into the opportunity for employment in the dairy industry related to product 

formulation. In 2018, NDC chose six winning teams from Clemson University, The Ohio State 

University, the University of Massachusetts Amherst, Kansas State University, and two entries 

from Cornell University. The winning teams’ product descriptions can be found at 

www.usdairy.com. 

Fuel Up to Play 60 

Fuel Up to Play 60 (FUTP60) is an in-school program combining the nutrition expertise of NDC 

and the fitness expertise and star power of the National Football League (NFL) to combat 

childhood obesity and provide the Nation’s youth with resources necessary to improve their 

personal health, school nutrition, and wellness environment. FUTP60 is based on the USDA’s 

Dietary Guidelines for Americans that recommends the consumption of low-fat and fat-free dairy 

foods; more fruits, vegetables, and whole grains; and getting 60 minutes of physical activity 

daily. Students and schools join the program by signing up at www.fueluptoplay60.com. 

Through enrollment, students and schools gain access to a School Wellness Kit containing inschool promotional materials and a “Playbook” containing healthy eating and physical activity 

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

wellness needs. Students are 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. Since the program’s inception in 2009, FUTP60 has reached more than 38 

million students in more than 73,000 schools. 

In 2018, FUTP60 partnered with Chelan FreshTM to increase student access to nutritious foods, 

serving an additional 1.3 million meals in 11 States through a donation of portable 

breakfast/salad bar carts offering dairy foods, fruits and vegetables, and whole grains. FUTP60 

also partnered with General Mills and Land O’Lakes to create dairy-focused recipes for schools. 

Through its continued partnership with Discovery Education, FUTP60 provided virtual dairy 

farm field trips featuring 360-degree video and farm images, classroom guides, and lesson plans. 

More than 2 million students nationwide learned about where their food comes from, and the 

people, science, and technology behind food production. 

GenYOUth Foundation 

The GenYOUth Foundation (GenYOUth), launched in 2011 by NDC, is a nonprofit organization 

working to create a movement inspiring youth to develop healthier eating and physical activity 

behaviors. GenYOUth works with schools, communities, and business partners to develop and 

support programs creating lasting changes in the child health and wellness arena, including 

FUTP60. 

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During 2018, GenYOUth continued its partnership with the PepsiCo Foundation to fight student 

hunger. Together, they expanded the school breakfast programs in an additional 25 schools 

across 18 States. The expanded breakfast program provided approximately 2.25 million 

nutritious school breakfasts to students throughout the school year. 

GenYOUth also continued its Adventure Capital (AdCap) program in 2018. AdCap is an 

entrepreneurship program designed to empower students to create and pitch ideas, and earn 

funding, for improving nutrition and physical activity in their schools and communities. In 2018, 

the largest AdCap challenge to date was held in Missouri in collaboration with No Kid Hungry 

Missouri. Winning pitches from a variety of high schools included: a snack cart program for 

after-school students; a healthy after-school cooking program; and providing refrigerated storage 

for students who need to stay after school and want access to a healthy meal at the end of the 

day. Fourteen student teams were each awarded a $1,000 grant for their ideas. 

U.S. Dairy Export Council 

DMI’s export enhancement and ingredient programs are implemented by the U.S. Dairy Export 

Council (USDEC). USDEC has representatives in 11 offices worldwide, providing support in 

identifying opportunities and monitoring regulatory activities: Washington, D.C.; Mexico City, 

Mexico; São Paulo, Brazil; Brussels, Belgium; Beirut, Lebanon; Tokyo, Japan; Seoul, South 

Korea; Hong Kong and Shanghai, China; Ho Chi Minh City, Vietnam; and Singapore. USDEC 

is headquartered in Arlington, Virginia. 

In 2018, U.S. dairy exports represented nearly 16 percent of total U.S. milk solids production. 

Suppliers shipped 2.188 million tons of milk powders, cheese, butterfat, whey products and 

lactose in 2018, and total dairy exports added up to 1.993 million tons (4.394 billion lbs.) of total 

milk solids. The value of U.S. exports was $5.59 billion, 2 percent more than the prior year. 

This progress was achieved as part of USDEC’s newly developed plan to achieve the “Next 5 

Percent” in global demand. The plan aims to increase U.S. dairy export volume from 15 to 20 

percent of total U.S. milk solids production by 2022. The plan furthermore aims to build U.S. 

dairy’s visibility and credibility as a value-added and consistent global supplier. As part of its 

“Next 5 Percent” plan, USDEC hired seven new staff members in strategic locations across Asia, 

the Middle East/North Africa, and Latin America to help create markets for U.S. cheese, 

ingredients, and other dairy products. 

During 2018, USDEC partnered with 11 stakeholder organizations including culinary 

institutions, retailers, and foodservice organizations. One of the partnerships, with Pan American 

Dairy Federation (FEPALE), encouraged collaboration in promoting trade. Another partnership, 

with Jiangnan University, helped educate on dairy product and ingredient usages in culinary 

applications and encourage U.S. dairy export growth in China. The partnerships created in 2018 

helped USDEC reach potential customers, including chefs and foodservice formulators, about 

the benefits of U.S. dairy and establish relationships to grow future demand. 

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Innovation Center for U.S. Dairy 

In 2008, dairy producers, processors, and manufacturers entered into an unprecedented 

agreement to form the Innovation Center for U.S. Dairy (Innovation Center). The goal of the 

Innovation Center is to collaborate on industry issues and accelerate industry innovation 

throughout the supply chain to increase sales in the competitive consumer marketplace. 

In late 2018, the Innovation Center launched the U.S. Dairy Stewardship Commitment, a 

voluntary pledge through which the U.S. dairy community documents and demonstrates progress 

in important areas including animal care, environmental stewardship, and community impact and 

contributions. The U.S. Dairy Stewardship Commitment brings together initiatives developed by 

the Innovation Center over the last 10 years and shows consumers and customers how the dairy 

industry is working collectively to continuously improve and transparently report its social, 

economic, and environmental impact. Within the first 2 months of its launch, 15 dairy 

cooperatives and processors, representing 60 percent of U.S. milk production, voluntarily 

adopted the Stewardship Commitment. Materials and information related to the U.S. Dairy 

Stewardship Commitment can be found at www.committment.usdairy.com. 

Food Safety 

The Innovation Center’s Food Safety Committee works across all aspects of milk production and 

processing with the goal of reducing food safety risks and ensuring dairy products are safe to 

consume. Committee members provide input on and help promote research and science-based 

food safety tools; design and coordinate food safety training; and develop guidance, assessment 

materials, and metrics for dairy processors. 

Between 2011 and 2018, more than 3,500 dairy company, co-op, and artisan/farmstead dairy 

farm employees participated in food safety training workshops. Dairy processors funded the 

development and implementation of these workshops. In addition, 10 research projects were 

underway in 2018 to address Listeria through the Innovation Center’s Listeria Research 

Consortium. 

Dairy Sustainability Alliance 

The Dairy Sustainability Alliance (Alliance), originally the Sustainability Council, continued in 

2018. The Alliance represented over 100 member organizations in 2018, including crop and 

dairy farmers, processors, manufacturers, retailers, suppliers, and representatives from 

nonprofits, trade organizations, government, and academia. The Alliance is committed to 

advancing dairy sustainability and social responsibility, by providing a forum where member 

organizations can share knowledge, collaborate on issues affecting the dairy industry at large, 

and accelerate progress toward common sustainability goals. The Alliance seeks to improve, 

measure, and communicate dairy’s role in a sustainable food system. 

Industry and Image Relations 

Undeniably Dairy 

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In 2018, DMI continued Undeniably Dairy, a national, multi-year, multi-dimensional campaign 

to provide a platform for the entire dairy community to engage and speak with one voice and 

“reintroduce” dairy to consumers. The campaign aims to bring dairy’s story to life by 

showcasing the nutrient-rich profile of dairy foods, along with a farm-to-table look at the 

commitment the industry has to responsible production and positive local community impact. 

The Undeniably Dairy campaign is based on four key pillars to grow trust in relevant and 

relatable ways: 

• Nutrient-Rich—Dairy’s nutrients, including protein, help fuel the body and mind, and are 

readily available in a variety of products in the dairy aisle. 

• Locally Driven—Dairy products are fresh, locally sourced, and have a positive impact on 

local communities. 

• Real Enjoyment—Dairy is a part of so many foods people love to eat and plays a big part 

in some of the most special moments in consumers’ lives. 

• Responsibly Produced—The dairy industry uses technology, sustainable practices, and 

animal care to ensure dairy is always becoming a better product. 

A digital consumer study of 2018 Undeniably Dairy programming and content showed 

consumers who were exposed to Undeniably Dairy digital and podcast stories were 12 percent 

more likely to agree farmers care for the land and the environment and were 25 percent more 

likely to agree farmers treat cows humanely. The Undeniably Dairy logo was placed on 

Domino’s and Pizza Hut pizza boxes and reached over 8 million customers each week. 

Domino’s and Pizza Hut also placed the Undeniably Dairy logo and messaging on their 

websites, social media channels, and ordering apps. 

The Undeniably Dairy campaign includes a strong digital and social media presence while also 

creating opportunities for people to connect face-to-face with farmers – both on the farm and in 

their own backyards. In 2018, Undeniably Dairy highlighted the people who produce the foods 

that end up on consumer tables, from farmers to chefs, and everyone in between, through 

“Stories of Devotion.” These stories were shared in media articles, podcasts, and videos. In 

addition to traditional and online storytelling, the campaign featured painted murals that 

appeared in high-profile locations from coast to coast to tell dairy’s story. Murals were created 

on the walls of a famed New York City restaurant, on the walkway to the pits at the Indianapolis 

500, and on the side of a multi-story dairy processor’s visitor center. In addition, 21 dairy 

farmers from across the United States participated in two food festivals in New York City in 

October 2018 where they reminded thousands of dairy-loving attendees about the joy of dairy, 

shared their stories of devotion, and answered questions while serving samples of grilled cheese 

and chocolate milk. 

Dairy Partnerships 

The Dairy Board has a strategy of forming targeted partnerships with foodservice leaders to drive 

sales. These partnerships help ensure dairy’s relevance with menu innovation and new product 

creation and result in more than $1.5 billion annually in dairy-centric partner advertising and 

marketing support. In 2018, the Dairy Board partnered with foodservice leaders such as 

Domino’s®, McDonald’s®, Pizza Hut®, and Taco Bell® by supporting product and technology 

innovation to grow dairy sales. More cheese was included on and in the crust of pizzas, in tacos, 

and a new cheese taco shell was created. New products included ice cream specialties, 

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reformulated chocolate milk for kids, nacho fries, and cheese on chicken sandwiches. Partners 

also included Undeniably Dairy messaging in their digital ordering platforms. 

The Dairy Board continues to work with leading fluid milk processors to help meet the 

challenges facing the fluid milk category. In 2018, the Dairy Board partnered with Dairy 

Farmers of America®, Darigold®, fairlife®, Kroger®, and Shamrock Farms®, offering category 

insights and expertise to spur new thinking and investments in infrastructure, product 

development, packaging innovation, and marketing. 

In 2018, the Dairy Board convened category leaders, including MilkPEP, State and regional 

promotion organizations, processors and dairy companies, and cooperatives to lead a 

conversation with retailers and fill a void related to the fluid milk and dairy category. Through 

the Milk Revitalization Alliance, retailers are learning about opportunities to protect and grow 

dairy sales through category and shopper insights, product and packaging innovation, and the 

right mix of dairy products through dairy case management to optimize milk sales opportunities. 

II. National Fluid Milk Processor Promotion Board 

The Fluid Milk Board, as authorized in the Fluid Milk Act, administers a fluid milk promotion 

and consumer education program funded by fluid milk processors. The program is designed to 

educate Americans about the benefits of fluid milk, increase 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. The members of the Fluid Milk Board serve 3-year terms and are 

eligible to be appointed to two consecutive terms. The Fluid Milk Order provides that no 

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

Milk Board members who fill vacancies with a term of 18 months or less may serve two 

additional 3-year terms. The Milk Processor Education Program (MilkPEP) carries out the 

activities of the Fluid Milk Board. 

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 occasion-based 

program committees. The program committees are responsible for setting program priorities, 

planning activities and projects, and evaluating results. In addition, the Fluid Milk Board has a 

Finance Committee to review all program authorization requests for funding sufficiency, the 

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

The Fluid Milk Board met three times in 2018. 

Total Fluid Milk Board income and expenses are displayed in the annual independent financial 

audit. The Fluid Milk Board’s administrative budget continued to be within the 5-percent-of13 
 

 

 

 

 

 

 

 

 

 

revenue limitation required by the Fluid Milk Order. An independent auditor’s report for 2018 

can be found in the Additional Information section of this report. 

Medical Advisory Board 

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, continued to 

meet in 2018. The MAB provides guidance to the Fluid Milk Board’s development of key 

nutritional and health messages for consumers and health professionals. As in previous years, 

the MAB members assisted the Fluid Milk Board in continuing relationships with health 

professional organizations such as the American Academy of Pediatrics, the Academy of 

Nutrition and Dietetics, and the American Heart Association. 

MAB activities also included acting as spokespersons on breaking research relevant to fluid 

milk, conducting research on the benefits of consuming milk, and being quoted in relevant press 

materials. The MAB continued to inform others in the scientific community about the strong and 

growing body of research showing the benefits of consuming milk, particularly flavored milk, 

after exercise for muscle recovery and rehydration. 

Fluid Milk Programs 

I. Milk Life Committee – General Market and Hispanic 

MilkPEP’s Milk Life consumer campaign continued to focus on fluid milk and its nutritional 

benefits, including high-quality protein and its ability to help power the potential of each day. 

The Milk Life campaign also continued its efforts to improve consumers’ perceptions of milk and 

focused on kids as a primary strategic objective. 

Milk Life’s 2018 efforts drove $93.4 million in incremental milk gallon sales, representing 2.69 

gallons sold for every marketing dollar spent. In addition to spending on television promotions, 

MilkPEP employed new tactics in 2018, including search engine optimizations, radio, social 

media hyper-targeting, shopper media, and a digital advertising campaign that drove an 

additional 4.18 gallons sold for every marketing dollar spent. 

MilkPEP launched the Milk It! Campaign in 2018 to engage kids directly. In its first full year, 

the Milk It! campaign focused on speaking directly to kids by reaching them online through kid 

connections and engagements through 15 influencers kids trust. The 15 high-profile influencers 

included Disney kid influencers and showcased how milk helps them do awesome things and 

encouraged their fans to do the same. More than 40 pieces of influencer content drove 30.3 

million impressions and 14 million engagements. Milk It! also partnered with Playwire to 

redesign three of their top performing games in a Milk It! theme and garnered over 2 million 

plays with 1.7 million unique users during the 3-month activation. Milk It! also sponsored the 

Nickelodeon Kids Choice Sports Awards, including commercials, billboards, and a custom 

vignette featuring milk, and was viewed by 2 million kids. 

The first quarter of 2018 focused on the 2018 Winter Olympics campaign and the connection 

between drinking milk and becoming an athlete. MilkPEP partnered with high-profile 

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Olympians to represent Team Milk and developed two commercials with Olympic skier Maddie 

Bowman. The commercials were leveraged across television, online, video, and retail in-store 

channels. All Winter Olympics content outperformed the 2016 MilkPEP Summer Olympics 

campaigns with a 60-percent increase in content likeability and a 25-percent increase in message 

memorability. MilkPEP’s digital efforts netted 9.1 gallons of fluid milk sold per marketing 

dollar spent. According to MilkPEP research, after watching milk’s Olympic content, moms’ 

perceived healthfulness of milk increased by 9 percent and their willingness to serve milk 

increased by 12 percent. Additionally, MilkPEP’s Team Milk roster of Olympic athletes and 

hopefuls provided the opportunity for 24 brands, and for State and regional promotion 

organizations, to partner with over 33 athletes nationwide, creating a national buzz for brands in 

their local markets. 

Through research, MilkPEP discovered moms’ attitudes towards milk continues to neutralize, so 

MilkPEP employed new data-driven, emotional, and functional tactics in 2018 to engage moms 

in the Milk Life campaign. In 2018, MilkPEP launched its Pour More Milk campaign to raise 

awareness around the importance of milk in childhood nutrition. According to the American 

Academy of Pediatrics, one out of two kids are falling short on the nutrients they need to grow 

strong, and having milk with meals, and water in between, can help remedy this deficit. The 

Pour More Milk campaign focused on encouraging moms to serve more milk so their kids get the 

nutrients they need. These efforts earned more than 127 million impressions and 2.09 gallons 

sold for every marketing dollar spent. 

MilkPEP continued its Hispanic promotional efforts in 2018, as part of the industry’s outreach to 

the growing Hispanic population, through greater synchronization with its general market 

consumer campaign. In 2018, MilkPEP developed a plan to drive Hispanic fluid milk 

consumption through a powerful network of Hispanic milk advocates. These efforts drove an 

increase in Hispanic moms’ milk consumption by 1.78 incremental gallons sold per marketing 

dollar spent, an increase of 25 percent over 2017. 

MilkPEP built and launched a new and robust shopper marketing campaign in 2018, aligning 

with MilkPEP’s strategic imperatives to “Win with Kids,” “Invest in Growth,” and “Help Build 

Brands.” The campaign kicked off during the 2018 Winter Olympic Games with a News 

America partnership featuring legendary figure skater and mom, Kristi Yamaguchi. 

Additionally, MilkPEP launched shopper efforts around back-to-school time, Halloween, and the 

holiday seasons. MilkPEP partnered with shopper media partners, including iBotta, Chicory, and 

Cluep to gain shopper insights. These insights were shared with milk brands to help shape and 

strengthen MilkPEP’s future strategic marketing plans. 

In 2018, MilkPEP, continued its partnership for the fourth year with Feeding America and the 

National Dairy Council to promote the Great American Milk Drive, an initiative designed to 

deliver nutrient-rich gallons of milk to families who struggle with food insecurity. Milk is one of 

the most requested, yet least donated, items at America’s food banks because it is perishable. As 

a result, Feeding America is only able to provide, on average, less than 1 gallon of milk per 

person per year. MilkPEP’s Great American Milk Drive program encouraged consumers across 

the United States to donate milk to families in need through online or in-store donations and 

increased the awareness and need for more milk in food banks. In 2018, the program secured 

381,000 gallons of milk from consumer donations. To date, the program has received over 1.9 

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million gallons of donated milk and donated 31 million servings of milk to children and families 

in need across the country. 

II. Built with Chocolate Milk Committee 

MilkPEP’s Built with Chocolate Milk program has helped to reposition low-fat chocolate milk 

from a kid’s treat to a recovery beverage for adult exercisers. Built with Chocolate Milk’s 

promotions continued in 2018 and included promotional efforts focused on athletes, digital 

activations, and strategic partnerships. The campaign appealed to adult exercisers through 

activations in basketball, hockey, and other endurance sports. To further engage adult audiences, 

MilkPEP promoted the benefits of recovering and rebuilding muscles with low-fat chocolate 

milk after strenuous exercise with professional athletes representing Built with Chocolate Milk in 

tennis, basketball, hockey, and IRONMAN. 

Built with Chocolate Milk continued its relationship with NBA star Klay Thompson for the 

second and final year. Klay Thompson, a shooting guard for the Golden State Warriors, reached 

millions of basketball fans through television advertisements, engaging in social conversations 

on game days, and publishing posts on his personal social media accounts. MilkPEP also 

activated 7 creative Klay Thompson features through Reddit to yield clickthrough rates nearing 

0.26 to 0.49 percent, exceeding Reddit’s benchmark of 0.15 to 0.20 percent. 

Built with Chocolate Milk established a new relationship with professional tennis player Sloane 

Stephens, champion of the 2017 U.S. Open. MilkPEP ran television spots on the Tennis Channel 

during the French Open, Wimbledon, and U.S. Open, as well as on ESPN’s homepage. The 

television spots and ESPN homepage yielded 29 million impressions and Instagram activations 

garnered 764,000 impressions. Print ads featuring Sloane Stephens appeared in a variety of 

magazines including ESPN Magazine and Women’s Health. 

In 2018, MilkPEP renewed its partnership with professional NHL player, father, and former 

Olympian Zach Parise. Partnering with Zach Parise allowed MilkPEP to repurpose creative 

assets from 2014 for the winter games and utilize Zach for a media tour and online takeover of 

the Built with Chocolate Milk Instagram account. The Built with Chocolate Milk campaign also 

worked with Jimmy Nguyen, a long-standing member of Team Chocolate Milk and Olympic 

skeleton hopeful. 

In 2018, the Built with Chocolate Milk campaign continued its existing relationship with Mirinda 

(Rinny) Carfrae—the campaign’s longest standing elite athlete partnership. A three-time 

IRONMAN champion, Rinny authentically conveys the chocolate milk recovery message to the 

endurance consumer. In 2018, Rinny brought a new lens to the program as a first-time mom. 

Rinny demonstrated to consumers how she balances motherhood, training, and recovery with the 

help of chocolate milk. Additionally, MilkPEP featured Rinny as a new mom in a Mother’s Day 

video featuring messages about adults and kids exercising together. 

In 2018, Team Chocolate Milk members remained equally as passionate about the campaign as 

the elite professional athletes. Overall, the endurance athletes continued to act as chocolate milk 

ambassadors nationwide, wearing branded gear on race day, engaging actively on social media, 

and educating other everyday athletes on the benefits of recovering with chocolate milk. 

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In a new initiative for 2018, Built with Chocolate Milk partnered with four of the top health and 

wellness brands in the Hearst portfolio to create a year-long video-, article-, and social mediadriven digital promotion about chocolate milk’s benefits with strategically chosen influencers. 

This partnership promoted chocolate milk as a recovery beverage of choice by influential 

spokespersons including: CrossFit champion and Fittest Man on Earth, Rich Froning, featured in 

Men’s Health; Working mom, IRONMAN, and former Army Captain Michele Gonzalez, 

featured in Running World; Team Chocolate Milk athlete and brain injury-surviving cyclist 

Allison Tetrick, featured in Bicycling; and Muay Thai fighter, model, and body positivity activist 

Mia Kang, featured in Women’s Health. This partnership was highly successful and yielded 1.5 

million video views and more than 1 million social media views, and the average time spent 

visiting content pages ranged from 2-6 minutes, far exceeding Hearst’s benchmark of 1 minute. 

The year 2018 saw Built with Chocolate Milk advertise on Spotify for the first time, with the 

campaign running spots on workout playlists, which allowed for relevant messaging to reach the 

target audience of adult exercisers. The Spotify platform proved successful with clickthrough 

rates ranging from 0.16 to 0.47 percent, far above Spotify’s benchmark of 0.08 percent. 

For the seventh consecutive year, the Built with Chocolate Milk campaign continued its 

partnership with the Rock ‘n’ Roll Marathon and featured chocolate milk in the “Official 

Recovery Beverage of the Marathon” series. Each of the 18 Rock ‘n’ Roll races in 2018 featured 

more than 153,000 chocolate milk samples, tents, and signage. Eighteen milk brands 

participated in the Rock ‘n’ Roll partnership and donated chocolate milk samples for use in their 

local markets. 

In 2018, the Built with Chocolate Milk campaign maintained its partnership with USA 

Swimming as the “Official Recovery Beverage of USA Swimming.” The campaign continued to 

highlight the important role chocolate milk plays in recovery, and chocolate milk samples were 

handed out at large swim meets across the country. Additionally, MilkPEP ran chocolate milk 

print advertisements in more than 1 million issues of Splash magazine and featured television 

spots within USA Swimming programming during key swimming events throughout the year. 

This partnership will continue throughout the 2020 Summer Olympics. 

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Chapter 2 

USDA Activities 

The USDA, Agricultural Marketing Service (AMS) Dairy Program has oversight responsibilities 

for the Dairy Board and the Fluid Milk Board. The AMS Dairy Program’s oversight activities 

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

investments, and marketing campaigns. Materials are monitored for conformance with 

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

other legislation. The AMS Dairy Program 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. 

The AMS Dairy Program ensures that the collection, accounting, auditing, and expenditures of 

promotion funds are consistent with the enabling legislation and Orders, certifies Qualified 

Programs, and provides for the evaluation of the effectiveness of both promotion programs’ 

advertising campaigns. The AMS Dairy Program assists the boards in their assessment 

collection, compliance, and enforcement actions. 

Other AMS Dairy Program responsibilities include facilitating the nomination and appointment 

process of board members, amending the Orders, conducting referenda, public and industry 

communications, and conducting periodic management reviews. AMS Dairy Program 

representatives attend full board and committee meetings and other meetings related to the 

programs. 

Dairy Promotion and Research Program Oversight 

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 should, in the manner prescribed by the 

Order, collect an assessment based on the number of hundredweights of milk for commercial use 

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

current rate of assessment for dairy producers is 15 cents per hundredweight of milk for 

commercial use or the equivalent thereof, as determined by the Secretary. In addition, the rate of 

assessment for imported dairy products prescribed by the Order is 7.5 cents per hundredweight 

of milk for commercial use or the equivalent thereof, as determined by the Secretary. 

Contracts 

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

by the Secretary. During 2018, the AMS Dairy Program reviewed and approved 545 Dairy 

Board and DMI agreements, amendments, and annual plans. During 2018, DMI retained the 

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

contractors: American-Mexican Marketing S.A. de C.V.; fairlife LLC; Inmar, Inc.; Lowe & 

Partners Worldwide, Inc.; and MMS Education, Inc. No material exceptions were found. 

18 
 

 

 

USDA, Foreign Agricultural Service 

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

development activities outside the United States to the USDA, Foreign Agricultural Service 

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

related contracts. The AMS Dairy Program also reviews USDEC contracts to ensure 

conformance with the Dairy Act, Dairy Order, and established USDA policies. In 2018, the 

AMS Dairy Program reviewed and approved 79 USDEC agreements, amendments, and annual 

plans. 

Organic Exemption 

On December 31, 2015, a final rule was published, with an effective date of February 29, 2016, 

to amend the organic exemption regulations to allow persons that produce, handle, market, 

process, manufacture, feed, or import “organic” and “100 percent organic” products to be exempt 

from paying assessments associated with commodity promotion programs administered by AMS, 

regardless of whether the person requesting the exemption also produces nonorganic products 

(80 FR 82005, published December 31, 2015). In States having mandatory assessment laws, 

organic dairy producers are exempt only from the Federal assessment. Organic producers are 

still responsible for remittance of State assessments. In 2018, the amount of exempted 

assessments was $1,605,815. The Dairy Order requires organic producers to reapply annually to 

continue to receive the exemption. 

USDA Dairy Promotion and Research Program Expenses 

Per the enabling legislation, the Dairy Board reimburses the AMS Dairy Program for the cost of 

administrative oversight and compliance audit activities. In 2018, the AMS Dairy Program’s 

oversight expenses totaled $650,275, and verification audits conducted on behalf of the Dairy 

Board by the Federal Milk Market Administrators resulted in $214,693 in expenses. 

Qualified Programs 

Qualified Programs are State, regional, or importer organizations conducting dairy product 

promotion, research, or nutrition education programs, authorized by Federal or State law, or were 

active programs prior to the Dairy Act. In 2018, the AMS Dairy Program reviewed applications 

for continued qualification from 62 Qualified Programs. A list of Qualified Programs is 

provided in Chapter 4. Consistent with its responsibility for monitoring the Qualified Programs, 

the AMS Dairy Program obtained and reviewed income and expenditure data from each 

Qualified Program, and data reported are included in aggregate for 2018 in Chapter 4. 

National Fluid Milk Processor Promotion Board Oversight 

Program Development 

The Fluid Milk Board contracted with Arc USA Chicago and the Interpublic Group Agencies of 

Campbell-Ewald and CMGRP, Inc., d/b/a Weber Shandwick to develop programs for 

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advertising, promotion, and consumer education in connection with the national fluid milk 

campaign. 

Contracts 

The Fluid Milk Act and Fluid Milk Order require that budgets and contracts expending 

assessments be approved by the Secretary. During 2018, the AMS Dairy Program approved 98 

Fluid Milk Board agreements, amendments, and annual plans. The Fluid Milk Board retained 

the certified public accounting firm of Snyder, Cohn, Collyer, Hamilton & Associates, P.C., in 

2018 to audit the records of: Campbell Ewald, Arc USA Chicago and CMGRP, Inc. d/b/a Weber 

Shandwick. No material exceptions were found. 

Collections 

The Fluid Milk Act specifies that each fluid milk processor marketing more than 3 million 

pounds of fluid milk per month pay an assessment on fluid milk processed and marketed 

commercially in consumer-type packages. The current rate of assessment is 20 cents per 

hundredweight of fluid milk products marketed. 

Organic Exemption 

On December 31, 2015, a final rule was published, with an effective date of February 29, 2016, 

to amend the organic exemption regulations to allow persons that produce, handle, market, 

process, manufacture, feed, or import “organic” and “100 percent organic” products to be exempt 

from paying assessments associated with commodity promotion programs administered by AMS, 

regardless of whether the person requesting the exemption also produces nonorganic products 

(80 FR 82005, published December 31, 2015). In 2018, the amount of exempted fluid milk 

assessments was approximately $1,566,514. The Fluid Order requires organic fluid milk 

processors to reapply annually to continue to receive the exemption. 

USDA Fluid Milk Processor Promotion Program Expenses 

Per the Fluid Milk Act, the Fluid Milk Board reimburses the AMS Dairy Program for the cost of 

administrative oversight and compliance audit activities. In 2018, the AMS Dairy Program’s 

oversight expenses totaled $477,105, and verification audits conducted on behalf of the Fluid 

Milk Board by the Federal Milk Market Administrators resulted in $115,578 in expenses. 

20 
 

 

Chapter 3 

Quantitative Evaluation of the Effectiveness of Promotion Activities by the 

National Dairy Promotion and Research Program and the National Fluid 

Milk Processor Promotion Program – 1995 to 2018 

Introduction 

The Dairy Act and the Fluid Milk Act require an annual independent analysis of the advertising 

and promotion programs that operate to increase consumer awareness and sales of fluid milk and 

dairy products. Texas A&M University researchers were awarded a competitive contract to 

conduct this study. This chapter is a summary of the 2018 quantitative evaluation of the 

effectiveness of the dairy and fluid milk promotion programs. 

Background on the Promotion Program 

The National Dairy Research and Promotion Program is a coordinated national research and 

promotion program intended to maintain and expand domestic and foreign markets for fluid milk 

and dairy products. To fund the program, U.S. dairy producers pay a 15-cent-per-hundredweight 

assessment on milk marketing, and importers pay a 7.5-cent-per-hundredweight assessment, or 

equivalent thereof, on dairy products imported into the United States. Dairy Management Inc. 

(DMI), a management and staffing corporation, is a joint undertaking between the National 

Dairy Promotion and Research Board (Dairy Board) and the United Dairy Industry Association 

(UDIA). UDIA is a federation of 19 of the 62 Qualified Programs1 (QPs) under the direction of 

a board of directors. DMI’s mission is to drive increased sales of and demand for dairy products 

and ingredients on behalf of dairy producers and dairy importers. DMI works proactively in 

partnership with leaders and innovators to increase and apply knowledge that leverages 

opportunities to expand dairy markets. 

The Fluid Milk Processor Promotion Program develops and finances generic advertising 

programs designed to maintain and expand markets for fluid milk products produced in the 

United States. Fluid milk processors marketing more than 3 million pounds of fluid milk per 

month pay a 20-cent-per-hundredweight assessment on fluid milk processed and marketed in 

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

Processor Education Program (MilkPEP) is the staffing organization that carries out the 

promotion programs on behalf of the National Fluid Milk Promotion Program. 

The Dairy Research and Promotion Program, funded by dairy producers and dairy importers, and 

the Fluid Milk Processor Promotion program, funded by fluid milk processors, are hereinafter 

referred to jointly as the National Programs. 

Objectives of the Evaluation Study 

The National Programs are evaluated with two key questions in mind: (1) Have the demandenhancing activities conducted by dairy producers, importers, and fluid milk processors actually 

1 Qualified Dairy Product Promotion, Research or Nutrition Educational Programs (Qualified programs or QPs) are 

State, regional, local, or importer promotion programs certified annually by the Secretary of Agriculture to receive a 

portion of the funds generated under the Dairy Research and Promotion Program. 

21 
 

 

 

 

 

 

 

 

increased the demand for fluid milk and manufactured dairy products?; and (2) Did those who 

paid for the promotions conducted actually benefit from them? 

Historically, this question has been answered through econometric studies of the relationships 

between the consumption of dairy products and promotion program demand-enhancing 

expenditures. These demand relationships are estimated in a structure that controls for the 

impacts of key market forces. Economic returns to dairy producers, importers, and fluid milk 

processors that result from marketing and promotion activities and the associated changes in 

consumption are calculated using the parameters obtained from the estimated demand models. 

The summary indicator of economic return on investment is a benefit-cost ratio (BCR). 

The level of the BCR is often taken as an indication of the impact of a program. For example, a 

$1 investment that returns $5 in incremental revenue generates a BCR of 5 to 1. However, a 5-to1 BCR also results from a $5 billion return from a $1 billion investment. Despite resulting in the 

same BCR, the magnitude of the impact from the $1 billion investment is obviously much 

greater than that of the $1 investment. In addition, due to diminishing marginal returns, the ratio 

between the incremental revenue generated and the level of funding (the BCR) declines as 

funding increases. Consequently, metrics other than the BCR, such as the level of impact on 

consumption and exports, are more revealing and useful indicators of the magnitude of program 

impact and effectiveness than the BCR. 

The objectives of this report are fourfold, namely to: 

1. Statistically measure the combined effects of the promotion activities of the National 

Programs on the consumption of fluid milk, cheese, butter, all dairy products, and dairy 

exports; 

2. Update and utilize a previously developed simulation model of the U.S. dairy industry to 

calculate: (a) the quantity and price effects of the National Programs in U.S. fluid milk, 

cheese, butter, and all dairy product markets, and on dairy exports; and (b) the BCRs 

corresponding to promotion in each of those markets (and exports) for dairy producers and 

fluid milk processors; 

3. Provide a qualitative and quantitative analysis of dairy product imports and import 

assessments; and 

4. Update the benefit-cost analysis of the National Programs. 

This project covers the period of 1995 to 2018 and captures the joint efforts of DMI, MilkPEP, 

and QPs. The shares of each promotion entity in the total demand-enhancing expenditures over 

this period are as follows: (1) DMI — 25.74 percent; (2) MilkPEP — 23.84 percent; and (3) QPs 

— 50.43 percent. 

Summary of the Findings 

The overall finding of this evaluation is that the dairy promotion under the National Programs 

have effectively increased U.S demand (domestic and exports) for dairy products. 

The gains in profit at the farm level were far larger than the costs associated with the National 

Programs combined. The returns from the programmatic activities of producers and to fluid milk 

processors are summarized with BCRs. The BCRs are based on the demand-enhancing 

expenditures only; therefore, they do not account for certain operating expenses such as 

22 
 

 

 

 

 

 

 

 

 

overhead, technical support, and industry relations. 

Over the period from 1995 to 2018, the BCRs expressed in terms of producer profit at the farm 

level were calculated to be $3.37 for every dollar invested in demand-enhancing activities for 

fluid milk, $3.63 for every dollar invested in demand-enhancing activities for cheese, and $15.67 

for every dollar invested in demand-enhancing activities for butter. For other non-specific 

promotion activities, the BCR was calculated to be $7.20 for every dollar invested. Over the 

same period, the BCR of export promotion was $6.74 per dollar invested. On a fat and skim 

solids basis, a significant positive relationship existed between the demand for all dairy products 

and the advertising and promotion expenditures associated with the National Programs. The 

aggregate all-dairy BCR was 4.78, meaning that, on average, producer profit increased by $4.78 

for each dollar invested in demand-enhancing activities. 

Importers of dairy products have paid assessments to the Dairy Research and Promotion Program 

since August 2011. Total import assessment funds varied between $3.41 million and $4.18 

million per year between 2012 and 2018. The import assessment represents approximately 1 

percent of the total demand-enhancing expenditures made by DMI, MilkPEP, and the QPs. 

Imported cheese levels were higher by 1.18 million pounds due to promotion funds collected 

from importers. Unit values of cheese imports amounted to roughly $3.18 per pound on average 

over the period between 2012 and 2018. Hence, incremental revenue to importers solely from 

cheese attributable to the import assessment (on cheese) totaled roughly $3.74 million. 

Available expenditure data from DMI and MilkPEP also allows for the calculation of separate 

BCRs at the farm level for the two groups. The BCR associated with DMI spending was 

estimated to be 5.31, quite similar to the 4.78 return on investment for all dairy product 

promotion investments. The BCR for MilkPEP was estimated to be 3.39, slightly above the 3.37 

calculated for all fluid milk promotional spending. 

The BCR of fluid milk at the processor level was estimated to be 5.94 over the period 1995 to 

2018. Importantly, this measure captures the gross return on investment for fluid milk market 

participants beyond the farm level. Any additional costs incurred by these market participants 

from handling the larger volume of fluid milk that occurs due to MilkPEP promotion are 

excluded because we simply do not know the magnitude of these additional costs. Further, 

others in the marketing channel besides fluid milk processors capture a portion of this return too. 

But we have no knowledge of the portion captured by processors versus other milk market 

participants beyond the farm gate. As such, we exercise caution due to these caveats in 

providing this estimate of the BCR attributed to the promotion of fluid milk at the processor 

level. 

DMI, MilkPEP, and QP Promotion Program Expenditures 

The expenditure data for this analysis were acquired from DMI, QPs, and MilkPEP. The 

demand-enhancing expenditures from all three entities were aggregated. 

The National Programs use advertising as well as other means to influence consumers. 

Advertising dollars are directed to media outlets including television, outdoor, print, radio, and 

the internet. Marketing activities other than advertising are directed at the retail level of the 

marketing channel or at intermediaries. The non-advertising marketing expenditures include 

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health and nutrition education programs, public relations, food service and manufacturing 

programs, sales promotion programs, school milk programs, school marketing activities, retail 

programs, child nutrition and fitness initiatives, and single-serve milk promotion. 

Certain promotion expenditures are not directed at the retail level of the marketing channel; these 

types of expenditures include crisis management, trade service communications, and strategic 

research activities. Because their intent is to directly increase or support sales of dairy products, 

these expenditures are classified as demand-enhancing expenditures. Expenditures for overhead, 

technical support, and industry relations are excluded from this analysis because they are not 

primarily related to demand-enhancing efforts. 

Over the past several years, the DMI Board of Directors changed their marketing strategies to 

focus more on partnerships within the dairy industry to increase demand for fluid milk, 

manufactured dairy products, and dairy ingredients. Currently, DMI’s strategies include the 

following: (1) working with and through specific partners to achieve sustainable, category-level 

sales impacts; (2) attracting partner co-investment to fund demand-enhancing efforts; and (3) 

maximizing resources and impacts in increasingly competitive markets. These efforts include 

co-developing marketing information, research, business models, and best practices that can be 

used by the industry to increase sales of fluid milk and dairy products. 

Annual promotion program expenditures made by DMI, MilkPEP, and QPs over the period 1995 

to 2018 are depicted in Table 3-1 and in Figure 3-1. On average, slightly less than $370 million 

in total were spent annually by the respective entities over this period and between $400 million 

and $415 million since 2013. 

The data associated with the demand-enhancing activities initiated by DMI and MilkPEP are 

both available on a quarterly basis. QP data, however, are only available on an annual basis. To 

estimate quarterly data for the QPs, the seasonal nature of DMI and MilkPEP expenditure data is 

assumed to be similar to the QP expenditure data. Consequently, the seasonal factors associated 

with DMI and MilkPEP data are obtained and applied to the annual QP data to arrive at quarterly 

expenditures. The estimation of these data on a quarterly basis is important in allowing for 

sufficient observations to conduct the econometric analysis of demand for dairy products. 

Nominal seasonally adjusted, demand-enhancing expenditures by DMI, MilkPEP, and QPs for 

all dairy products (fluid and manufacturing) combined on a quarterly basis from 1995 to 2018 

are exhibited in Figure 3-2. These demand-enhancing expenditures varied from $54.2 million to 

$99.4 million per quarter, averaging $82.5 million. 

Nominal seasonally adjusted demand-enhancing expenditures for fluid milk from DMI, 

MilkPEP, and QPs on a quarterly basis from 1995 to 2018 are exhibited in Figure 3-3. Over that 

period, nominal seasonally adjusted quarterly promotion program expenditures for fluid milk 

ranged from roughly $23.5 million to $63.3 million per quarter. On average over the same 

period, nominal seasonally adjusted demand-enhancing expenditures for fluid milk were $34.2 

million per quarter. 

As exhibited in Figure 3-4, over the period 1995 to 2018, nominal seasonally adjusted demandenhancing expenditures for cheese averaged $16.0 million per quarter, ranging from $8.1 million 

to $27.7 million. From 2005 to the third quarter of 2008, promotion expenditures associated 

with cheese were much smaller compared to the period of 1995 to 2004. On average, 

24 
expenditures on cheese marketing and promotion were $12 million during this period. From the 

fourth quarter of 2008 through the end of 2018, nominal quarterly expenditures on cheese marketing 

and promotion activities ranged from $8.1 million to $17.1 million, averaging $11.8 million per 

quarter. 

25 
 

 

Table 3-1. Annual Dairy Management Inc. (DMI), Milk Processor Education Program 

(MilkPEP), and Qualified Program (QP) Promotion Expenditures, 1995 to 20181 

Year DMI MilkPEP QPs Total 

1995 $88,105 $43,654 $160,832 $292,592 

1996 $99,674 $38,690 $159,600 $297,964 

1997 $93,859 $101,850 $160,379 $356,088 

1998 $97,570 $100,901 $158,348 $356,819 

1999 $96,010 $97,023 $161,161 $354,194 

2000 $94,260 $95,158 $169,654 $359,072 

2001 $102,835 $95,112 $169,967 $367,914 

2002 $98,752 $93,511 $174,857 $367,120 

2003 $94,256 $95,688 $165,973 $355,917 

2004 $90,171 $97,167 $172,667 $360,005 

2005 $83,484 $83,527 $175,081 $342,092 

2006 $73,067 $92,029 $182,443 $347,539 

2007 $74,623 $101,125 $190,289 $366,037 

2008 $99,051 $97,003 $181,092 $377,146 

2009 $94,071 $95,109 $187,992 $377,172 

2010 $87,512 $98,316 $166,459 $352,287 

2011 $88,456 $91,289 $214,763 $394,508 

2012 $82,360 $91,893 $216,484 $390,736 

2013 $93,184 $89,633 $216,844 $399,662 

2014 $102,728 $83,426 $211,919 $398,074 

2015 $107,133 $83,098 $219,660 $409,891 

2016 $102,712 $84,858 $227,834 $415,404 

2017 $110,005 $82,910 $218,548 $411,462 

2018 $115,442 $80,817 $207,903 $404,163 1

Thousands of dollars. 

Source: Data from DMI, MilkPEP, and the U.S. Department of Agriculture. 

Figure 3-1. Annual Dairy Management Inc. (DMI), Milk Processor Education Program 

(MilkPEP), and Qualified Program (QP) Promotion Expenditures, 1995 to 2018 

$0 

$50,000 

$100,000 

$150,000 

$200,000 

$250,000 

DMI MilkPEP QPs 

Source: Data from DMI, MilkPEP and the U.S. Department of Agriculture. 

26 
Figure 3-2. Quarterly All-Dairy Product Promotion Expenditures (Nominal, Seasonally 

Adjusted) by Dairy Management Inc. (DMI), Milk Processor Education Program (MilkPEP), and 

Qualified Programs (QPs), 1995 to 2018* 

$40,000,000 

$50,000,000 

$60,000,000 

$70,000,000 

$80,000,000 

$90,000,000 

$100,000,000 

$110,000,000 

*

Includes expenditures for advertising, promotion, dairy foods and nutrition research, nutrition education, and 

market and economic research. 

Source: Data from DMI, MilkPEP, and QPs. Calculations by the authors. 

Figure 3-3. Quarterly Fluid Milk Promotion Expenditures (Nominal, Seasonally Adjusted) by 

Dairy Management Inc. (DMI), Milk Processor Education Program (MilkPEP), and Qualified 

Programs (QPs), 1995 to 2018 

$0 

$10,000,000 

$20,000,000 

$30,000,000 

$40,000,000 

$50,000,000 

$60,000,000 

$70,000,000 

Source: Data from DMI, MilkPEP, and QPs. Calculations by the authors. 

27 
 

 

 

Figure 3-4. Quarterly Cheese Promotion Expenditures (Nominal, Seasonally Adjusted) by Dairy 

Management Inc. (DMI) and Qualified Programs (QPs), 1995 to 2018 

Source: Data from DMI and QPs. Calculations by the authors. 

$0 

$5,000,000 

$10,000,000 

$15,000,000 

$20,000,000 

$25,000,000 

$30,000,000 

As shown in Figure 3-5, nominal seasonally adjusted demand-enhancing quarterly expenditures 

on marketing and promotion of butter ranged from close to $60,000 to $6.8 million, averaging 

slightly more than $1.3 million per quarter over the period 1995 to 2018. Marketing and 

promotion expenditures for butter are a fraction of the expenditures for fluid milk and cheese. 

Beginning in 2006, DMI transitioned from featuring milk, cheese, and butter in product–specific 

promotions to broader campaigns that relate to a number of dairy products. As a result of an 

increasing number of campaigns affecting multiple products, assessing demand enhancements 

for the aggregate of dairy products as well as within specific product classes is important. 

DMI also invests in dairy export promotion through the U.S. Dairy Export Council (USDEC). 

Nominal seasonally adjusted DMI expenditures directed to dairy export promotion on a 

quarterly basis ranged from just under $800 to approximately $6.4 million (Figure 3-6a). These 

expenditures trended upward from 1995 to 2018, averaging about $2.6 million per quarter over 

this period. As exhibited in Figure 3-6b, nominal seasonally adjusted funds awarded through 

USDA’s Foreign Agricultural Service (FAS) directed to exports of dairy products varied from 

just under $310,000 to about $1.8 million, averaging nearly $1.1 million per quarter over the 

period of 1997 to 2018. The funds are awarded through USDA FAS’s Foreign Market 

Development (FMD) program and the Market Access Program (MAP). The aggregate of DMI 

and FMD/MAP expenditures (nominal, seasonally adjusted) ranged from $881 to $7.9 million 

per quarter, averaging $3.6 million on a quarterly basis over the same period from 1995 to 2018 

(Figure 3-6c). 

28 
Figure 3-5. Quarterly Butter Demand-Enhancing Expenditures (Nominal, Seasonally Adjusted) 

by Dairy Management Inc. (DMI), and Qualified Programs (QPs), 1995 to 2018 

$0 

$1,000,000 

$2,000,000 

$3,000,000 

$4,000,000 

$5,000,000 

$6,000,000 

$7,000,000 

$8,000,000 

Source: Data from DMI and QPs. Calculations by the authors. 

Figure 3-6a. Quarterly Dairy Product Export Expenditures (Nominal, Seasonally Adjusted) by 

Dairy Management Inc. (DMI), 1995 to 2018 

$0 

$1,000,000 

$2,000,000 

$3,000,000 

$4,000,000 

$5,000,000 

$6,000,000 

$7,000,000 

Source: Data from DMI. Calculations by the authors. 

29 
Figure 3-6b. Quarterly Dairy Product Export Expenditures (Nominal, Seasonally Adjusted) 

through the Foreign Market Development/Market Access Programs, 1997 to 2018* 

*Data were not available prior to 1997. Also, only annual data were available for 1997 and 1998. Quarterly 

interpolations were made for these years. 

Source: Data from U.S. Department of Agriculture, Foreign Agricultural Service. Calculations by the authors. 

Figure 3-6c. Quarterly Aggregate Dairy Product Export Expenditures (Nominal, Seasonally 

Adjusted) by Dairy Management Inc. (DMI) and the Foreign Market Development/Market 

Access Programs, 1995 to 2018 

$0 

$200,000 

$400,000 

$600,000 

$800,000 

$1,000,000 

$1,200,000 

$1,400,000 

$1,600,000 

$1,800,000 

$2,000,000 

Source: Calculations by authors. 

$0 

$1,000,000 

$2,000,000 

$3,000,000 

$4,000,000 

$5,000,000 

$6,000,000 

$7,000,000 

$8,000,000 

$9,000,000 

30 
 

 

 

 

The assessment that importers of dairy products have paid to the National Dairy Promotion and 

Research Program effective August 1, 2011 is based on milk content as follows: 

“This rule requires importers to calculate assessments due based upon documentation 

concerning the cow’s milk solids content of the imported products. Products shall be 

assessed at the rate of $0.01327 per kilogram of cow’s milk solids” 

(Agricultural Marketing Service, 2011, “Rules and Regulations,” Federal Register, 

Volume 76, No. 53, page 14479). 

Two-thirds of the import assessment are allocated to the National Dairy Board. The remaining 

amount was designated to be used by one of three QPs to support dairy promotion: (1) Cheese 

Importers Association of America; (2) Global Dairy Platform; and (3) the Wisconsin Milk 

Marketing Board, Inc. 

Import assessment funds totaled between $3.41 million and $4.18 million per year from 2012 to 

2018, averaging $3.7 million. The cumulative import assessment funds totaled $26.95 million 

from September 2011 to December 2018. On a monthly basis, funds from the dairy import 

assessment ranged from $210,086 to $492,219, averaging $306,229 over the period of September 

2011 to December 2018 (Figure 3-7). The import assessment averaged just under 1.0 percent of 

the total demand-enhancing expenditures made by DMI, MilkPEP, and the QPs between 2012 

and 2018. 

Trends in Dairy Use 

Per capita fluid milk consumption trended downward between 1995 and 2018 (Figure 3-8). In 

2018, per capita consumption of fluid milk ranged from 34.64 pounds per person to 37.45 

pounds per person, down from 50.44 pounds per person to 53.20 pounds per person in 1995. 

Seasonality also is evident in per capita U.S. consumption of fluid milk. The downward trend 

likely reflects changes in the frequency of fluid milk intake rather than changes in portions 

(Stewart, Dong, and Carlson, 2013). The majority of Americans born in the 1990s tend to 

consume fluid milk less often than those born in the 1970s, who in turn consume fluid milk less 

often than those born in the 1950s. U.S. per capita milk consumption has declined roughly 30 

percent since 1995 due to changing consumption habits as well as increased competition from 

other beverages. 

Cheese consumption per capita has grown over time and exhibits seasonal patterns (Figure 3-9). 

Between 1995 and 2018, the commercial per capita disappearance of cheese ranged from 6.4 

pounds per quarter to 9.8 pounds per quarter, averaging about 7.9 pounds. Over the same period, 

per capita butter consumption grew modestly and exhibited seasonal patterns as well (Figure 3-

10). The commercial disappearance of butter on a per capita basis ranged from 0.9 pounds per 

quarter to 1.8 pounds per quarter, averaging slightly more than 1.2 pounds. 

On average over the period 1995 to 2018, the per capita commercial disappearance of all dairy 

products on a fat basis amounted to 150 pounds per quarter, ranging from 134 pounds to 170 

pounds per quarter (Figure 3-11). On a skim-solids basis, the per capita commercial disappearance 

of all dairy products over that same period amounted to 137 pounds per quarter, ranging from 

130 pounds to 143 pounds per quarter (Figure 3-12). 

31 
 

 

Between 1995 and 2018, quarterly dairy exports on a fat basis averaged nearly 1,350 pounds and 

close to 5,500 pounds on a skim-solids basis (Figure 3-13). 

Figure 3-7. Monthly Dairy Import Assessment Funds, September 2011 to December 2018 

Source: U.S. Department of Agriculture 

$0 

$100,000 

$200,000 

$300,000 

$400,000 

$500,000 

$600,000 

Figure 3-8. Quarterly Per Capita U.S. Consumption of Fluid Milk, 1995 to 2018 

30.00 

35.00 

40.00 

45.00 

50.00 

55.00 

Pounds 

Source: U.S. Department of Agriculture. 

32 
Figure 3-9. Quarterly Per Capita U.S. Consumption of Cheese, 1995 to 2018 

11.00 

10.50 

10.00 

9.50 

9.00 

8.50 

8.00 

7.50 

7.00 

6.50 

6.00 

Pounds 

Source: U.S. Department of Agriculture. 

Figure 3-10. Quarterly Per Capita U.S. Consumption of Butter, 1995 to 2018 

1.80 

1.70 

1.60 

1.50 

1.40 

Pounds 1.30 

1.20 

1.10 

1.00 

0.90 

0.80 

Source: U.S. Department of Agriculture. 

33 
 

 

Figure 3-11. Quarterly Per Capita U.S. Consumption of All Dairy Products on a MilkEquivalent Fat Basis, 1995 to 2018 

160.00 

165.00 

170.00 

175.00 

Pounds 155.00 

150.00 

145.00 

140.00 

135.00 

130.00 

Source: U.S. Department of Agriculture and calculations by the authors. 

Figure 3-12. Quarterly Per Capita U.S. Consumption of All Dairy Products on a Skim-Solids 

Basis, 1995 to 2018 

145.00 

143.00 

141.00 

139.00 

137.00 

Pounds 135.00 

133.00 

131.00 

129.00 

127.00 

125.00 

Source: U.S. Department of Agriculture and calculations by the authors. 

34 
 

 

 

 

 

 

Figure 3-13. Quarterly U.S. Dairy Commercial Exports on a Milk-Equivalent Fat Basis and 

Skim-Solids Basis, 1995 to 2018 

Source: U.S. Department of Agriculture and calculations by the authors. 

0 

2,000 

4,000 

6,000 

8,000 

10,000 

12,000 

14,000 

Million Pounds 

Milk-Equivalent Fat Basis Skim Solids Basis 

The United States imported between $3.1 billion and $3.5 billion in dairy products in each of the 

last 5 years (Table 3-2). Cheese products accounted for slightly more than one-third (by value) 

of the dairy imports (Figure 3-14). Cheese imports as a percent of total dairy imports were 

highest in 2013 and 2018 at 37.6 percent and lowest in 2012 and 2017 at 35.8 percent. 

Given these trends, the analysis in the next section addresses the response of consumers to dairy 

promotion expenditures. Structural econometric models were developed to isolate the effects of 

those expenditures on demand for dairy products from those of other fundamental economic 

forces such as price and income. The results are reported in the next section. 

Findings on Impacts of Promotion Expenditures on Dairy Demand 

The primary objective of the analysis is to answer two key questions regarding the National 

Programs over time: (1) What have been the effects of dairy promotion programs on the 

domestic consumption of fluid milk, dairy products, and exports?; and (2) What have been the 

returns to dairy promotion programs? In answering the first question, the focus is on the effects 

of the dairy promotion program on U.S. demand and exports of fluid milk and dairy products. 

Once those market effects have been determined, a benefit-cost analysis of the dairy program at 

the producer level and at the fluid milk processor level is done to answer the question about 

returns to producers. 

35 
 

 

 

Table 3-2. U.S. Dairy Product Imports and Import Assessment Funds, 2012 to 20181 

Value of All Dairy 

Imports ($1,000) 

2012 

$3,059,069 

2013 

$3,051,985 

2014 

$3,452,772 

2015 

$3,453,239 

2016 

$3,397,211 

2017 

$3,297,323 

2018 

$3,418,570 

Value of Cheese 

Imports ($1,000) $1,093,017 $1,145,000 $1,274,747 $1,290,771 $1,262,797 $1,179,030 $1,279,283 

Quantity of Cheese 

Imports, (metric tons) 153,964 147,196 164,778 197,767 205,286 182,401 176,211 

Unit Value of Cheese 

Imports ($/MT) $7,099 $7,779 $7,736 $6,527 $6,151 $6,464 $7,260 

Import Assessment 

Funds ($) 

Import Assessment 

per $1,000 of dairy 

imports 

$3,527,145 

$1.15 

$3,441,461 

$1.12 

$3,564,781 

$0.99 

$4,175,783 

$1.21 

$3,441,461 

$1.01 

$3,564,781 

$1.08 

$4,175,783 

$1.22 

1 The import assessment went into effect August 1, 2011. Funds have been collected in each month from September 

2011 to present. The table shows funds collected from January 2012 to December 2018. 

Sources: Import Assessment data from the U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing 

Service. Trade data from USDA’s Foreign Agricultural Service. 

Figure 3-14. U.S. Dairy Imports and Cheese Share of Dairy Import Value, 2012 to 2018 

33.5% 

34.5% 

35.5% 

36.5% 

37.5% 

38.5% 

39.5% 

0 

500,000 

1,000,000 

1,500,000 

2,000,000 

2,500,000 

3,000,000 

3,500,000 

4,000,000 

2012 2013 2014 2015 2016 2017 2018

 Cheese Share of Dairy Import Value Total Dairy Import Value, $1,000 

Source: Data from the U.S. Department of Agriculture, Foreign Agricultural Service. Calculations by authors. 

36 
 

 

 

 

 

 

 

 

Estimation of Dairy Consumption and Export Changes Due to Promotion Program 

Expenditures 

This evaluation study finds a significant positive association between dairy promotion program 

expenditures and consumer demand for dairy products. This association holds for all dairy 

products in the aggregate as well as for fluid milk, cheese, butter, and the activities of the 

National Programs individually. The impacts generally are modest during the quarter in which 

expenditures are made but larger cumulatively over time. 

The key indicator of the effect of promotion expenditures on dairy product demand is a measure 

of the relative sensitivity of demand to such expenditures. This measure, known as the 

promotion expenditure elasticity, is defined as the percentage change in consumption given a 1-

percent change in promotion expenditures, holding all other variables constant. 

The statistical analysis centers attention on the retail level of the marketing chain. The economic 

model provides structural parameter estimates that are statistically valid and consistent with prior 

studies in the literature on evaluation of generic commodity promotion. Two key findings of the 

statistical analysis are as follows: 

• Demand-enhancing expenditures have a significant positive impact on domestic consumption 

of dairy products. (Domestic consumption is defined as domestic commercial disappearance 

plus imports.) 

• The promotion elasticities for butter, cheese, and fluid milk for 2018 were 0.036, 0.014, and 

0.074, respectively. The promotion elasticities for all dairy products on a skim-solids basis 

and on a fat basis for 2018 were the same at 0.061. 

The demand responsiveness to promotion was allowed to vary over time. Further, the 

cumulative impact of promotion was also identified. Demand-enhancing expenditures affect: the 

market for cheese for up to 2 quarters, the market for fluid milk for up to 8 quarters, and the 

market for butter for up to 12 quarters. For the aggregate of all dairy products, the effect 

persisted for 6 quarters on both a fat and skim-solids basis. 

To measure the effects of DMI export promotion enhancement expenditures on U.S. dairy 

commercial exports, two U.S. dairy export demand models were specified and estimated using 

two different data series for dairy exports supplied by USDA: (1) dairy exports on milkequivalent skim-solids basis (SSB), and (2) dairy exports on a milk-equivalent fat basis (FB). 

The results indicated that when U.S. dairy prices were low (high) relative to Oceania dairy 

export prices, the United States exported more (fewer) dairy products.2 The lag length for SSB 

export promotion expenditures was estimated to be 9 quarters. The SSB export promotion 

expenditure elasticity was estimated to be statistically significant at 0.055 over the sample period 

(Table 3-3). The lag length for the FB export promotion expenditures was estimated to be 6 

quarters. The FB export promotion expenditure elasticity was estimated to be statistically 

significant at 0.099 (Table 3-3). 

2 Key drivers of dairy demand were found to include the ratio of the Oceania export butter price to the U.S. butter 

price on a fat basis; the ratio of the Oceania export price for skim milk powder (SMP) to the U.S. nonfat dry milk 

(NDM) price on a skim-solids basis; a measure of real world income; seasonality; and inertia or stickiness of dairy 

exports in world markets. 

37 
 

Table 3-3. Estimated Dairy Demand Sensitivity to Promotion, Prices, and Income, 1995 to 2018 

Promotion Elasticities Own-Price Income 

1995 to 2018 2018 only Elasticity Elasticity 

Butter1 0.030 0.036 -0.121 0.276 

Cheese1 0.018 0.014 -0.137 0.518 

Fluid milk1 0.096 0.074 -0.075 -0.441 

All dairy1 

Skim-solids basis 0.067 0.061 -0.063 0.089 

Fat basis 0.067 0.061 -0.066 0.425 

Exports1 

Skim-solids basis 0.055 0.055 -0.201 0.650 

Fat basis 0.099 0.099 -0.294 0.611 

1

Over the time period 1995.1 to 2018.4. 

The analysis covers the period of 1995 to 2018. The results are decomposed for comparison 

purposes into four similar time periods: (1) 1995 to 2000, (2) 2001 to 2006, (3) 2007 to 2012, 

and (4) 2013 to 2018. The analysis starts in 1995 and ignores any promotion effects that would 

have occurred prior to 1995. The analysis was accomplished by first aligning the annual model 

of the U.S. dairy industry maintained at the University of Missouri—the Agricultural Markets 

and Policy Group Dairy Model (AMAP Dairy Model) as modified to account for dairy 

promotion—with the observed data over the 1995 to 2018 period. Then the impact of promotion 

was obtained by removing demand-enhancing expenditures from the model. The model was first 

simulated over history to generate a “with promotion” scenario representing the effects of the 

dairy programs over actual history. A second “no promotion” scenario (the counterfactual 

scenario) was then generated by setting promotion expenditures to zero. The “zero promotion” 

scenario results represent the levels of prices and quantities that would have existed if the 

National Programs had not been created and, thus, dairy promotion had not been done. 

The results for selected key variables in the model for the “with promotion” and “no promotion” 

scenarios are presented in Table 3-4. These tables provide a comparison of the “with promotion” 

levels of each variable (actual historical data) to the “no promotion” levels (simulated levels 

without promotion) to show the effects across time from dairy promotion spending. There are 

many factors at play in the year-by-year results, including the level of promotion expenditures 

each year and the supply dynamics built into the AMAP structural dairy model. To provide 

some insight into these model dynamics, four sub-periods of results are shown as well as the 

entire period for selected endogenous variables. The analysis starts in 1995 and, thus, does not 

include the effects of any dairy promotion that may have occurred prior to that year. 

Because no exogenous variable in the model (e.g., levels of inflation, exchange rates, income 

levels, Government policies, etc.) other than dairy promotion expenditures is allowed to change 

in either scenario, this analytical process effectively isolates the effects of the National Programs 

on U.S. dairy markets and exports. 

38 
 

 

Table 3-4. Effects of Dairy Promotion on U.S. Dairy Markets Based on Simulation of Supply 

Response – Per Capita Consumption 

Fluid Milk 

Per Capita 

Consumption 

(pounds) 

Cheese 

Per Capita 

Consumption 

(pounds) 

Butter 

Per Capita 

Consumption 

(pounds) 

Nonfat Dry Milk 

Per Capita 

Consumption 

(pounds) 

Period 

8

With Promotion (lbs) 173.22 35.92 5.64 2.98 

2 - 013 201

No Promotion (lbs) 

Change (lbs) 

158.88 

17.33 

34.46 

1.47 

5.41 

0.23 

2.93 

0.05 

Percent Change 11.1% 4.3% 4.2% 1.8% 

12

With Promotion (lbs) 193.53 32.95 5.08 3.25 

2007 – 20

No Promotion (lbs) 

Change (lbs) 

173.22 

20.30 

31.55 

1.40 

4.93 

0.15 

3.20 

0.05 

Percent Change 11.7% 4.4% 3.0% 1.4% 

06

With Promotion (lbs) 200.86 30.99 4.49 3.21 

2001 – 20

No Promotion (lbs) 

Change (lbs) 

177.87 

22.99 

29.75 

1.24 

4.43 

0.06 

3.21 

0.00 

Percent Change 12.9% 4.2% 1.4% 0.0% 

With Promotion (lbs) 209.35 28.02 4.35 3.13 

20 1995 - 00

No Promotion (lbs) 

Change (lbs) 

184.70 

24.66 

27.09 

0.93 

4.31 

0.04 

3.16 

-0.03 

Percent Change 13.3% 3.4% 0.9% -1.0% 

With Promotion (lbs) 194.24 31.97 4.89 3.14 

20 1995 - 18

No Promotion (lbs) 

Change (lbs) 

172.92 

21.32 

30.71 

1.26 

4.77 

0.12 

3.12 

0.02 

Percent Change 12.3% 4.1% 2.5% 0.5% 

Source: Calculation by the authors. 

That is, the simulated differences between the values of the endogenous variables from the “with 

promotion” scenario and those from the “no promotion” scenario provide direct measures of the 

historical effects of the dairy promotion expenditures (and only those expenditures) on U.S. dairy 

markets and exports. 

As shown in Table 3-4, the average annual per capita consumption of fluid milk, cheese, and 

butter was higher by 12.3 percent, 4.1 percent, and 2.5 percent, respectively, over the period of 

1995 to 2018 due to promotion efforts, all other exogenous factors held constant. The average 

annual per capita consumption of nonfat dry milk (NFDM) would have been 3.12 pounds per 

capita annually without promotion versus 3.14 pounds per capita as actually occurred with 

promotion over the 1995 to 2018 period, an increase of 0.5 percent. 

These results indicate that the overall downward trend of per capita fluid milk consumption 

between 1995 and 2018 was mitigated to some extent by the promotional efforts of the National 

Programs. Without the promotion programs, fluid milk consumption would have averaged 

172.92 pounds per capita annually instead of 194.24 pounds per capita annually over the 1995 to 

2018 period as actually occurred with promotion. Hence, promotion expenditures associated 

with the National Programs’ spending on fluid milk reduced the rate of decline in per capita 

consumption. 

39 
 

 

 

 

The results also indicate that the annual per capita consumption of cheese would have averaged 

30.71 pounds without promotion versus the 31.97 pounds as actually occurred with promotion 

over 1995 to 2018. For butter, annual per capita consumption would have averaged 4.77 

pounds without promotion versus the 4.89 pounds that actually occurred with promotion over the 

same period. 

Average annual per capita consumption of fluid milk, cheese, and butter were higher by 11.1 

percent, 4.3 percent, and 4.2 percent, respectively, due to promotion during the 2013 to 2018 

period (Table 3-4). Annual exports of butter averaged 15.4 percent less than would have 

occurred without promotion while annual exports of nonfat dry milk and cheese averaged 1.1 

percent and 4.3 percent higher, respectively, due to promotion. 

The average annual per capita consumption of cheese was also higher by 0.018 pounds (0.05 

percent) as a result of the promotion funded by the importer assessment. What then is the impact 

of the assessment on imports of dairy products? Given that cheese occupies a notable share of 

imported dairy products, we focus attention on the incremental amount of imports of cheese 

attributed to the importer assessment. Over the period between 2012 to 2018, total cheese 

consumption in the United States amounted to 90.4 billion pounds. Because of the assessment 

from importers, total domestic cheese consumption was higher by 45.2 million pounds. To 

arrive at this figure, we multiply 90.4 billion pounds by the percentage change in cheese 

consumption as a result of the importer assessment (0.05 percent as noted previously). Further, 

because cheese imports are roughly 2.6 percent of domestic consumption (United States 

Department of Agriculture), then due to promotion funds collected from importers, imported 

cheese levels were higher by 1.18 million pounds. Further, unit values of cheese imports 

amounted to roughly $3.18 per pound on average over the period between 2012 to 2018. Hence, 

incremental revenue to importers solely from cheese attributed to the import assessment was 

$3.74 million on average. 

Dairy Promotion Program Benefit-Cost Analysis 

This section provides a benefit-cost analysis of the National Programs based on the results of the 

scenario analyses discussed in the previous section. As calculated, the producer profit BCR is 

the additional industry profits (additional cash receipts net of additional production costs and 

promotion assessments) earned by producers as a consequence of the promotion expenditures (as 

measured through the scenario analyses) divided by the historical level of promotion 

expenditures made to generate those additional profits. The fluid milk processor BCR is 

calculated similarly to the producer BCR in which the cost of milk is used as a proxy for the cost 

of production since data for fluid milk processors’ cost of production are not available. 

Based on a comparative analysis, results for the “promotion” and “no-promotion” scenarios as 

summarized in the previous section (see Table 3-4) demonstrate that the National Programs have 

effectively increased the demand of promoted dairy products. 

As exhibited in Table 3-5, over the period 1995 to 2018, the gains in profit at the producer level 

were far larger than the expenditures on demand-enhancement programs. The BCRs for 

producers for fluid milk were calculated to be $3.37 for every dollar invested in dairy demand 

promotion; for cheese, $3.63 for every dollar invested; and for butter, $15.67 for every dollar 

invested. For other non-specific dairy promotion activities, the BCR was calculated to be $7.20 

40 
 

 

 

 

for every dollar invested. Dairy export promotion expenditures increased foreign demand for U.S. 

dairy products by $6.74 for every dollar invested. For the aggregate of all dairy products, the net 

profit BCR is $4.78 for every dollar invested. 

Table 3-5. Calculated Benefit-Cost Ratio (BCR), 

in Net Profit at the Producer Level Attributable 

to the National Programs, 1995 to 2018 

Producers 

Product BCR 

All Dairy 4.78 

Fluid milk 3.37 

Cheese 3.63 

Butter 15.67 

Exports 6.74 

Other Non-Specific Dairy Promotion 7.20 

The fluid milk processor BCR cannot be calculated as simply as the producer BCR since the 

cost-of-production data are not available. To calculate the fluid milk BCR, the milk cost is used 

as a proxy for cost-of-production since milk would be the largest input cost. Over the period 

1995 to 2018, the gains in profit at the fluid milk processor level were larger than the 

expenditures on demand-enhancement programs. The BCRs for fluid milk were calculated to be 

$3.39 for every dollar invested in demand-enhancing activities for fluid milk processors. 

Available expenditure data for the two participating entities in dairy promotion, DMI and 

MilkPEP, also allow for the calculation of separate BCRs at the farm level for the two groups. 

To address the effectiveness of the investments made by DMI and MilkPEP separately, we 

simulated “with promotion” and “without” promotion” scenarios for each of the two entities 

following the same methodology as for the aggregate analysis. DMI promotion expenditures 

have largely focused on promotion programs for fluid milk, cheese, butter, non-delineated 

products, and exports. By contrast, MilkPEP promotion expenditures have targeted fluid milk 

exclusively. The scenario simulation results indicate that the BCR associated with DMI 

spending was 5.31, quite similar to the 4.78 return on investment shown in Table 3-5 for all dairy 

product promotion investments. The BCR for MilkPEP was calculated at 3.39, slightly above the 

3.37 calculated for all fluid milk promotional spending in Table 3-5. 

The BCR for fluid milk at the processor level was estimated to be 5.94 over the period between 

1995 and 2018. Importantly, this measure captures the gross return on investment for fluid milk 

market participants beyond the farm level. Any additional costs incurred by these market 

participants from handling the larger volume of fluid milk that occurs due to MilkPEP promotion 

are excluded because we simply do not know the magnitude of these additional costs. Further, 

others in the marketing channel besides fluid milk processors capture a portion of this 

41 
 

 

 

 

 

 

 

incremental total value, too. But we have no knowledge of the portion captured by processors 

versus other milk market participants beyond the farm gate. As such, we exercise caution due to 

these caveats in providing this estimate of the BCR attributed to the promotion of fluid milk at 

the processor level over the 1995 to 2018 period. 

Concluding Remarks3 

This report provides an independent evaluation of the effectiveness of the National Programs 

covering the period 1995-2018. The key findings regarding markets for milk and manufactured 

dairy products over that period include the following: 

• The National Programs have effectively increased the demand for promoted dairy products, 

especially cheese and butter, and moderated the decline in per capita fluid milk consumption. 

• The gains in profit at the producer and fluid milk processer level from promotion were far 

larger than the costs of the National Programs. The overall BCR (using profit over costs) of 

the dairy producer promotion program was calculated to be 4.78. That is, for every $1 spent 

on demand-enhancing activities, dairy producers received an additional $4.78. 

• Exports of butter and nonfat dry milk were smaller by annual averages of 26.2 percent and 

10.1 percent, respectively, but exports of cheese were higher by an annual average of 5.8 

percent. 

• Promotion funds collected from importers boosted the annual average level of cheese imports 

by 1.18 million pounds. Annual unit values of cheese imports amounted to about $3.18 per 

pound on average over the period from 2012 to 2018. Hence, the incremental revenue to 

importers solely from cheese attributable to the expenditure of the import assessments for 

cheese promotion totaled roughly $3.74 million. 

• The BCR for fluid milk promotion was calculated to be $3.37 for every dollar invested in 

demand-enhancing activities. For cheese promotion, the BCR was calculated to be $3.63 per 

dollar invested in cheese promotion and $15.67 for every dollar invested in butter promotion. 

The BCR for dairy export promotion was calculated to be $6.74 per dollar invested. 

• The BCR for fluid milk processors attributed to the Fluid Milk Promotion Program was 

calculated to be 3.39. 

With regard to methodology, the analysis was accomplished by first statistically estimating the 

relationships between dairy product demands and the respective demand drivers including prices 

and promotion expenditures. The structural econometric models used for this analysis are 

statistically valid and largely consistent with prior studies evaluating generic commodity 

promotion. 

3 A reference list is available upon request. 

42 
 

Chapter 4 

Qualified State, Regional, or Importer 

Dairy Product Promotion, Research, or Nutrition Education Programs 

The Secretary annually certifies Qualified Programs as part of the Dairy Act and Order. To 

receive certification, the Qualified Program must meet the following (7 CFR §1150.153): 

1. Conduct activities intended to increase human consumption of milk and dairy products 

generally; 

2. Be active and ongoing before passage of the Dairy Act, except for programs operated 

under the laws of the United States or any State; and except for importer programs; 

3. Be primarily financed by producers, either individually or through cooperative 

associations or dairy importers; 

4. Not use a private brand or trade name in its advertising and promotion of dairy products 

(unless approved by the Dairy Board and USDA); 

5. Certify that requests from producers or importers for refunds under the program will be 

honored by forwarding to either the Dairy Board or a Qualified Program designated by 

the producer or importer that portion of such refunds equal to the amount that would 

otherwise be applicable to that program; and 

6. Not use program funds for the purpose of influencing governmental policy or action. 

The aggregate revenue from the assessment directed to the Qualified Programs in 2018 was $294 

million (approximately 10 cents of the 15-cent producer assessment and 2.5 cents of the 7.5-cent 

import assessment). This chapter provides the aggregate income and expenditure data of the 

Qualified Programs as well as a list of certified programs in 2018. 

43 
 

 

 

 

 

 

 

 

 

 

 

 

2018 Qualified State, Regional or Importer 

Dairy Product Promotion, Research or Nutrition Education Programs 

Aggregate Income and Expenditure Data Reported to USDA 

(Thousands) 

Aggregate Income FY 2018 

Carryover from Previous Year 1 $75,345 

Producer Remittances 218,955 

Transfers from Other Qualified Programs 67,858 

Transfers to Other Qualified Programs (78,386) 

Other Income 10,650 

Total Adjusted Annual Income $294,422 

Aggregate Expenditures FY 2018 

General and Administrative $11,329 

Milk Advertising and Promotion 13,399 

Cheese Advertising and Promotion 32,664 

Butter Advertising and Promotion 6,360 

Frozen Dairy Products Advertising and Promotion 3,671 

Other Advertising and Promotion 2 6,242 

Unified Marketing Plan 3 81,202 

Dairy Foods and Nutrition Research 8,749 

Public and Industry Communications 21,419 

Nutrition Education 15,424 

Market and Economic Research 2,383 

Other 5,396 

Total Annual Expenditures $208,238 

Total Available for Future Year Programs $89,934 

1 Differences can occur because of audit adjustments and varying accounting periods. 

2 “Other” includes “Real Seal,” holiday, multi-product, calcium, foodservice, product donations at State fairs, and 

other promotional activities. 

3 Unified Marketing Plan: Reported local spending by United Dairy Industry Association units participating in 

DMI’s Unified Marketing Plan to fund national implementation programs. 

Source: Data reported by qualified dairy product promotion, research, and nutrition education programs. 

44 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018 Qualified State, Regional or Importer 

Dairy Product Promotion, Research or Nutrition Education Programs 

Alabama: 

• American Dairy Association of 

Alabama, Inc. 

Arizona: 

• Dairy Council of Arizona 

California: 

• California Milk Advisory Board 

• Dairy Council of California 

Connecticut: 

• Connecticut Milk Promotion Board 

Florida: 

• Florida Dairy Farmers, Inc. 

Georgia: 

• Georgia Agricultural Commodity 

Commission for Milk 

• Southeast United Dairy Industry 

Association, Inc., doing business as 

(d/b/a) Dairy Alliance 

• American Dairy Association of Georgia 

Idaho: 

• Idaho Dairy Products Commission 

• Dairy Food Dairy West 

Illinois: 

• Illinois Milk Promotion Board 

Indiana: 

• American Dairy Association of Indiana, 

Inc. 

• Indiana Dairy Industry Development 

Board 

Kansas: 

• Kansas Dairy Commission 

Kentucky: 

• American Dairy Association of 

Kentucky, Inc. 

Louisiana: 

• Louisiana Dairy Industry Promotion 

Board 

Maine: 

• Maine Dairy and Nutrition Council 

• Maine Dairy Promotion Board 

Massachusetts: 

• Massachusetts Dairy Promotion Board 

• New England Dairy and Food Council, 

Inc. 

• New England Dairy Promotion Board 

Michigan: 

• American Dairy Association of 

Michigan 

• Dairy Council of Michigan, Inc. 

• Michigan Dairy Market Program 

Minnesota: 

• Midwest Dairy Association 

• Midwest Dairy Council 

• Minnesota Dairy Research and 

Promotion Council 

Mississippi: 

• American Dairy Association of 

Mississippi, Inc. 

Missouri: 

• Dairy Promotion, Inc. 

• Promotion Services, Inc. 

• St. Louis District Dairy Council 

Nebraska: 

• Nebraska Dairy Industry Development 

Board 

45 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nevada: 

• Nevada Farm Bureau Dairy Producers 

Committee 

New Hampshire: 

• Granite State Dairy Promotion 

New Jersey: 

• New Jersey Dairy Industry Advisory 

Council 

New York: 

• American Dairy Association & Dairy 

Council, Inc., d/b/a American Dairy 

Association Northeast 

• Milk for Health on the Niagara 

Frontier, Inc. 

• New York State Department of 

Agriculture, Division of Milk Control 

and Dairy Services 

• Rochester Health Foundation, Inc. 

North Carolina: 

• American Dairy Association of North 

Carolina, Inc. 

North Dakota: 

• North Dakota Dairy Promotion 

Commission 

Ohio: 

• American Dairy Association Mideast 

Oregon: 

• Oregon Dairy Products Commission 

Pennsylvania: 

• Allied Milk Producers' Cooperative, 

Inc. 

• Mid-Atlantic Dairy Association d/b/a 

American Dairy Association Northeast 

• Pennsylvania Dairy Promotion 

Program d/b/a American Dairy 

Association Northeast 

Puerto Rico, Commonwealth of: 

• Milk Industry Development Fund of 

Puerto Rico (Fondo Fomento Industria 

Lechera) 

South Carolina: 

• American Dairy Association of South 

Carolina 

South Dakota: 

• American Dairy Association of South 

Dakota 

Tennessee: 

• American Dairy Association of 

Tennessee, Inc. 

• Tennessee Dairy Promotion Committee 

Texas: 

• Dairy MAX, Inc. 

• Western Dairy Association (Inactive) 

• Southwest Dairy Museum, Inc. 

Utah: 

• Utah Dairy Commission 

Vermont: 

• Vermont Dairy Promotion Council 

Virginia: 

• American Dairy Association of 

Virginia, Inc. 

Washington: 

• Washington State Dairy Council d/b/a 

Dairy Farmers of Washington 

• Washington Dairy Products d/b/a Dairy 

Farmers of Washington 

Wisconsin: 

• Wisconsin Milk Marketing Board, Inc. 

67 
 

Qualified Importer Programs: 

Cheese Importers Association of America 

Global Dairy Platform 

Wisconsin Milk Marketing Board, Inc. 

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2018 Dairy Management Inc. and United States Dairy Export Council 

Contracts Approved by USDA 

Contractor Name [Contract Activities]: 

B = Business Development C = Communications Co = Consultants 

F = Fluid Milk Revitalization 60 = Fuel Up to Play 60 E = Exports 

N = Nutrition and Wellness I = Ingredients K = Knowledge and Insights 

P = Partnerships S = Sustainability U = Unified Marketing Plan 

Academy of Nutrition and Dietetics [N] 

ACE Secretarial Solutions [B] 

Advantage Point Internationale, LLC [C] 

Agribusiness-Connect Asia [E] 

ALG Worldwide Logistics [B] 

Alchain, Maribel [Co] 

American Academy of Pediatrics [N] 

American Butter Institute [U] 

American College of Sports Medicine [N] 

American Dairy Association Indiana, Inc. [U] 

American Dairy Science Association [K] 

American-Mexican Marketing [E] 

American Registry of Professional Animal 

Scientists [K] 

American Society for Bone and Mineral 

Research [N] 

American Society for Nutrition [N] 

Animal Agriculture Alliance – College Aggies 

Online [B] 

Arab Marketing Finance, Inc. [E] 

ASK-Comm Strategies, LLC [C] 

Bader Rutter and Associates, Inc. [C, E, S] 

Baker Communications [B] 

Baxter Communications, Inc. [C] 

Bodhi Road, Inc. (Fresh Company) [B] 

Bokma, Dr. Bob [Co, E] 

Bryant Christie [Co] 

Burson-Marsteller Korea [E] 

C+R Research Services [F, K] 

Cady, Roger [Co] 

California Dairy Research Foundation [K] 

Campus Kitchen [B] 

Catalina Marketing Corporation [C] 

CEB, Inc. [B] 

Center for Food Integrity [C] 

Center for Food Safety & Regulatory Solutions 

[E, I] 

Centre National Interprofessional de 

l'Economie Laitere (CNIEL) [E, K] 

CFE Solutions, Inc. [Co] 

Cheese Chef John Esser [I] 

Cheese Market News [K] 

Cheese Reporter [K] 

Chicago Council on Global Affairs [K] 

CliftonLarson Allen, LLP [B] 

College & Professional Sports Dieticians [N] 

Commonwealth Agriculture Strategies [K] 

ConferenceDirect, LLC [B] 

Copyright Clearance Center [B] 

Costco Wholesale Corporation [B, K] 

Covance Laboratories, Inc. [I] 

Cowboy Media Productions, LLC [C, E] 

Crimson Hexagon [C] 

Crowd Companies, LLC (Catalyst) [C] 

CSS360, LLC [B] 

Culinary Institute of America [I] 

Current Marketing – Brandwitch Consumer 

Research [Co] 

CustomED [C] 

D.L. Peterson Associates [K] 

Dairy Council of Utah [U] 

Dairy Farmers of America [P] 

Dairy Girl Network [B] 

Dairy Insights, LLC [Co, E] 

Dairy Max, Inc. [U] 

Darigold, Inc. [P] 

Digital SpeakEasy, LLC [C, S] 

Discovery Education, Inc. [C] 

Domino’s Pizza Enterprises – Japan [E] 

Domino’s Pizza Enterprises – Oceania [E] 

68 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domino’s Pizza, LLC [P] 

Drake, Dr. MaryAnne [K] 

DuPuis Group [C, F] 

Dutcher & Associates, LLC [C] 

Dynamic Signal [B] 

Earthwide Business Intelligence Limited [E] 

EAS Consulting Group [I] 

Eat Well Global, Inc. [N] 

Edelman Public Relations Worldwide [C, 60] 

Elsevier B.V. [K] 

Ernst & Young Global Limited [B] 

Exponent, Inc. [K] 

fairlife, LLC [P] 

Feeding America [P] 

Fleishman-Hillard, Inc. [C] 

Florida Dairy Farmers, Inc. [U] 

Food & Culinary Professionals DPG [I] 

Food Nutrition Magazine [I] 

Food Research and Action Center [N] 

FoodMinds, A Division of Padilla Speer 

Beardsley, Inc. [E, I] 

Foodsense, LLC [C, N] 

Foundation for Food Integrity [N] 

Getty Images [C] 

Girag & Associates [K] 

Global Dairy Platform, Inc. [C] 

Global Food & Nutrition, Inc. [E, I] 

GlobalData Plc (Canadean Consumer) [E, K] 

Green Insights [K] 

Hartman Group [K] 

Hebrew Rehabilitation Center [K] 

Hillstrom Communications, Inc. [C] 

Hruska, Cindy [B, E] 

Hutchinson Cancer Research Center [K] 

Idea Couture [F] 

IDEA Health & Fitness [C] 

Image Base, Inc. [B] 

Information Resources, Inc. [K] 

Ink Factory [C] 

Inmar Analytics, Inc. [K] 

Innerspace Studio [C] 

Innova Market Insights [K] 

Interbrand [C] 

International Dairy Federation [K] 

International Dairy Foods Association [E, K] 

International Scientific Association for 

Probiotics and Prebiotics [N] 

Interpublic Marketing Services Ltd. Beijing 

Branch (Weber Shandwick Shanghai) [E] 

IntNet (South Korea) [E] 

Ipsos Insights, LLC 

J.C. Small Global Limited [Co, E] 

JF Pontzer, LLC [C] 

Joslin Diabetes Center Inc. [N] 

K&M Printing [B] 

Kantar, LLC d/b/a Kantar TNS [C] 

Kantar Retail d/b/a Kantar Worldpanel [K] 

Keenan, Judy [Co] 

Kemps [P] 

KJ Marketing Consulting [60] 

Kolade, Osho [K] 

Kopman, Chris [Co] 

Koski, Shannon [C, E] 

Land O'Lakes, Inc. [P] 

Levinson & Associates [B] 

Lee, Jay [Co] 

LexisNexis [K] 

Lowe & Partners Worldwide Inc. dba 

Campbell Ewald New York [Co] 

Maine Dairy Promotion Board [U] 

Market Makers, Inc. [E] 

Market Solutions, LLC [C] 

Marketing Concepts, Inc. [C, I] 

McDonald’s USA, LLC [P] 

McLeod, Watkinson & Miller [B] 

McClelland, Alyssa [Co] 

Meros Consulting [E] 

MMS Education, Inc. [C, N, 60] 

Moss, Melinda [Co] 

National Academy of Sciences [I] 

National Dairy Shrine [B] 

National Football League Players Inc. [60] 

National Football League Properties [60] 

National Milk Producers Federation [E, K] 

National Osteoporosis Foundation [N] 

New England Dairy & Food Council, Inc. [U] 

Next Course Co [B] 

Nokose, Inc. [K] 

Novak Birch [C, E] 

NPD Group, Inc. [K] 

NTT Data, Inc. [B, C] 

69 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nutrition Insights, LLC [N] 

Nutritional Strategies, Inc. [N] 

Nygaard Consulting, LLC [E, K] 

O’Donohue, Katherine [Co] 

Orrani Consulting Ltd. [E, K] 

P R Consultants Limited [E] 

P&K Research [I] 

Parody, Kristen [Co, E] 

Pelzer Communications Resources, Inc. [C] 

Philip, Preeti [Co] 

Pizza Hut, LLC [P] 

Pizza Hut Restaurants Asia Pte. Ltd. [E] 

PR Consultants Limited [E] 

Protagonist/ExactCast [C] 

Quadrant Nutrition, LLC [E, N] 

Quaife, Tom [Co] 

Qualtrics [K] 

Quantis [S] 

Quarterra LLC [E] 

RB International [Co] 

Ready Ink Communications [C, E] 

Results Direct [C, E] 

Rise Interactive Media & Analytics, LLC [C] 

River Global LLC [E] 

Rogers, Paul [Co, E] 

Ruby Do, Inc. [C] 

Salesforce.com, Inc. [B] 

Schonrock Consulting [Co, E] 

School Nutrition Association [N] 

School Nutrition Foundation [N] 

Shainwright Consulting & Research Group [E] 

Shamrock Foods Company [P] 

Sheppard, Liz [B] 

Sheryl Stern Sachman & Associates, LLC [N] 

Shutterstock [B] 

Significant Outcomes [E] 

Social Deviant [C] 

Sorenson, Carla [Co] 

Southeast United Dairy Industry Association 

d/b/a The Dairy Alliance [U] 

Southeast Milk, Inc. [P] 

sparks & honey, LLC [C, K] 

Spectrum Sustainability [K] 

Spire Research and Consulting [Co, E] 

Spredfast [K] 

Sports, Cardiovascular and Wellness Nutrition 

[N] 

SRW Marketing, Inc. [I, N] 

Stiefer, David L. [Co, E] 

Story Consulting [Co, E] 

Strategy Muse [K] 

Suber Global [E] 

Tableau Software [B] 

Taco Bell Corporation [P] 

Taylor, Tammy [Co] 

Team Services, LLC [60] 

Technomic, Inc. [K] 

Texas A&M AgriLife Research [K] 

The Center for Generational Kinetics [N] 

The Context Network, LLC [S] 

The Economist Intelligence Unit, NA, Inc. [C] 

The Family Room Strategic Consulting Group, 

LLC [K] 

The Foundation for the National Institutes of 

Health [N] 

The Fresh Approach, Inc. [C] 

The Kroger Company [P] 

The McCully Group [E, I] 

The Mixing Bowl [I] 

The Richards Group, Inc. [F, C] 

Think Healthy Group, Inc. [C] 

TNS Custom Research, Inc. d/b/a Kantar 

Worldpanel [K] 

Tong, Dr. Phillip [E, K] 

TradeMoves, LLC [E, K] 

Tractus Asia Limited [E] 

Trusted Translations, Inc. [B] 

United Dairy Industry Association, Inc. [P, U] 

United Dairymen of Arizona [U] 

USDA Agriculture Research Service, Western 

Human Nutrition Research Center [K] 

Washington Dairy Products Commission [U] 

Watson Green, LLC [B, N, U] 

We Are All Human Foundation [B] 

Weber Shandwick Worldwide [C] 

World Wildlife Fund, Inc. [C] 

Youth Improved Inc. d/b/a GenYouth [N, 60] 

Yum! Restaurants International, Inc. [P] 

Zenith International Ltd. [E, I] 

Zosspack Consulting [F] 

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2018 National Fluid Milk Processor Promotion Board 

Contracts Approved by USDA 

Contractor Name [Contract Activities]: 

A = Advertising and Marketing B = Business Development K = Knowledge and Insights 

M = Medical Advisory P = Partnerships 

Abrams, Dr. Steven [M] 

A Better Life, Inc. [A] 

Ace Metrix, Inc. [K] 

Academy of Nutrition and Dietetics 

Foundation [K] 

Arc USA Chicago [A] 

American Egg Board [P] 

Barr, Dr. Susan [M] 

Brier, Michele V. [B] 

Bluetext, LLC [B] 

Calabasas Pediatrics [A] 

Campbell Ewald [A] 

CMGRP, Inc., d/b/a Weber Shandwick [A] 

Collective Bias [A] 

Competitor Group, Inc. [P] 

Crazy Cool Media, LLC [A] 

Crème de la Crumb, LLC [A] 

Dairy Management, Inc. [P] 

DoExtra CRM Solutions, LLC [B] 

Dream Tree Foundation [A] 

EcoNet Ventures, LLC d/b/a Latinium 

Network [K] 

Economos, Dr. Christina [M] 

Edwatds, Tiffany [A] 

Escobar, Su-Nui [A] 

Feeding America [P] 

Food for Thought Consulting, Inc. [K] 

Gail Golden Consulting, LLC [B] 

Giorgio Rapicavoli, Inc. [A] 

Glass, Alicia [A] 

Grand Sports Management, LLC [A] 

Gundell Company Inc. [A] 

Hass Avocado Board [P] 

Hartman Group [B] 

Hill, Dr. James [M] 

Hutchins, Emily [A] 

Hype Agency [A] 

I Heart Nap Time, LLC [A] 

Information Resources, Inc. [B] 

InTech Integrated Marketing Services [B] 

International Dairy Foods Association [B] 

Interpublic Group of Companies, Inc. [A] 

Ipsos-Insight, LLC [K] 

James Madison University [K] 

Joanne Davis Consulting, Inc. [K] 

Johnson, Dr. Rachael [M] 

JR15, Inc. [A] 

LH Nutrition, LLC [A] 

Latin Marketing Entertainment Corp. [A] 

Leidy, Dr. Heather [M] 

Liminal Research, LLC [K] 

Lindsay, Stone & Briggs [K] 

Lorena Garcia Group, Inc. [A] 

Lowe & Partners Worldwide Inc. d/b/a 

SociedAD [A] 

Lowe Campbell Ewald [A] 

May, Gavin [A] 

Mullen Lowe Profero, LLC [A] 

National High School Athletic Coaches 

Association [P] 

Next Step Consulting Services [M] 

Nguyen, Jimmy [A] 

Oh Sweet Basil, LLC [A] 

One Funny Mother, Inc. [A] 

Parise, Zach [A] 

Popular Pays, Inc. [A, B] 

Prime Consulting Group [A] 

Protagonist, LLC [K] 

Radius Global Market Research [K] 

Red Spark Consulting, LLC [A] 

Richards, Doyin [A] 

Rinny Runs Endurance Sports, Inc. [A] 

Roundarch Isobar, Inc [A] 

Rubin, Ronald [B] 

71 
 

 

 

 

Saunders, Dr. Michael [M] 

SCA Promotions, Inc. [B] 

Shapiro, Dr. Ilan [A] 

Snyder-Cohn, PC [B] 

Spectrum Group Productions, Inc. [B] 

Tennis4Sloane, Inc. [A] 

Tetrick, Alison [A] 

The Colony Group, LLC [B] 

The Marketing Arm, Inc. [A] 

ThinkVine Corporation [K] 

Thompson, Klay [A] 

United States Olympic Committee [A, P] 

United States Swimming, Inc. [P] 

United States Triathlon of Colorado [P] 

Victory Marketing Agency, LLC [B] 

Watkinson Miller, PLLC [B] 

Whistle Sports, Inc. [A] 

Whitman Insight Strategies, LLC [K] 

Wilkin, Claudette Aimee [A] 

Zuroweste Marketing Consulting [K] 

81 
 

 

 

 

 

 

 

 

 

2018 National Dairy Foods Research Centers 

Established in 1987, there are six university-affiliated National Dairy Foods Research Centers 

supported by the National Dairy Council. The mission of the National Dairy Foods Research 

Centers is to conduct research, educate professionals, transfer knowledge to industry, and create 

dairy products and ingredients with improved health, safety, quality, and functionality. 

California Dairy Foods Research Center 

The California Dairy Foods Research Center is located at the Dairy Innovation Institute at 

California Polytechnic State University–San Luis Obispo and supports the dairy industry from 

farm to table. Working with the California Dairy Research Foundation, the California Dairy 

Foods Research Center conducts applied and strategic dairy research and development in the 

areas of product technology and utilization, ingredient technology and utilization, products for 

health enhancement, food quality, and food safety. Adjacent to the Dairy Innovation Institute is 

the Cal-Poly University dairy farm, where fresh milk is available for research and development 

activities. For additional information, please visit www.dptc.calpoly.edu. 

• California Polytechnic State University–San Luis Obispo 

David W. Everett, Ph.D., Center Director 

• California Dairy Research Foundation 

Midwest Dairy Foods Research Center 

The Midwest Dairy Foods Research Center is a collaborative effort between dairy farmers and 

land-grant universities with a mission of providing responsive, agile, and thorough and 

comprehensive product research. The Midwest Dairy Foods Research Center is well equipped 

with dairy processing and research facilities located at the University of Minnesota (St. Paul), 

South Dakota State University (Brookings), and Iowa State University (Ames). The Center’s 

research focuses on improving and controlling flavor development and functionality in cheese; 

improving the performance of cheese starter cultures through genetics; adding value to milkbased products with probiotics and nutraceuticals; improving the shelf life of flavored milks; 

reducing undesirable taste attributes of milk; improving functionality and controlling flavor 

attributes of milk fractionation components; and developing methods for effective and profitable 

uses of whey. For additional information, please visit www.midwestdairy.umn.edu. 

• South Dakota State University–Brookings 

Lloyd Metzger, Ph.D., Center Director 

• University of Minnesota–St. Paul 

Peggy Lehtola, Center Assistant Director 

• Iowa State University–Ames 

Stephanie Clark, Ph.D., Center Associate Director 

• Midwest Dairy Foods Research Center-Affiliated Universities: 

University of Nebraska - Lincoln 

Kansas State University 

82 
 

 

 

 

 

 

 

 

 

University of Missouri 

Northeast Dairy Foods Research Center 

The Northeast Dairy Foods Research Center, located at Cornell University, Ithaca, NY, was 

formed to conduct fluid milk and dairy ingredient research, provide applications and technical 

support for improvements in milk powder quality, and help establish the next generation of dairy 

ingredients. The Northeast Dairy Foods Research Center provides new learning opportunities 

for industry with short-course training in dairy food safety, Hazard Analysis and Critical Control 

Points, and dairy processing, including artisan dairy production, with certificate programs in 

fluid milk processing, cheesemaking, and yogurt production. Facilities available at Cornell 

University include the Food Processing and Development Laboratory, Cornell Dairy Processing 

Plant, the Food Safety Laboratory, and the Sensory Evaluation Center. For additional 

information, please visit www.foodscience.cals.cornell.edu/research. 

• Cornell University 

David M. Barbano, Ph.D., Center Director 

Martin Wiedmann, Ph.D., DR. Med. Vet., Center Associate Director 

• University of Vermont 

Southeast Dairy Foods Research Center 

The Southeast Dairy Foods Research Center has been in operation since 1988. Facilities are 

located at North Carolina State University, which is the lead institution, joined by Mississippi 

State University (Starkville). The Southeast Dairy Foods Research Center conducts research, 

educates scientists, and develops and applies new technologies for processing milk and its 

components into dairy products and ingredients with improved health, safety, and quality, and 

expanded functionalities. The Southeast Dairy Foods Research Center hosts a Food Rheology 

Laboratory, Nutrition Technical Services Laboratory, and a Sensory Applications Laboratory, 

conducting analytical, qualitative, and affective sensory tests and flavor chemistry analyses 

tailored to meet specific needs of the dairy industry. For more information, please visit: 

https//sdfrc.ncsu.edu/. 

• North Carolina State University 

MaryAnn Drake, Ph.D., Center Director 

• Mississippi State University–Starkville 

Western Dairy Center 

The Western Dairy Center is located at the Utah State University, which is the lead institution. It 

is joined by affiliated universities through the Build University-Industry Linkages through 

Learning and Discovery Program (BUILD). The Western Dairy Center research focus includes 

cheese flavor and functionality; cheese technology; fermented products, including cheese and 

yogurt; ultra-high-temperature and extended-shelf-life fluid milk beverages; milk protein 

chemistry, including coagulation, denaturation, and separation; milk fractionation and use of 

membrane separation in dairy foods; anaerobic digestion of dairy processing waste; whey protein 

extrusion; application of genetics, genomics, and metabolomics to lactic acid bacteria; whey and 

83 
 

 

 

 

 

 

 

 

 

 

milk utilization; and microstructure of dairy. For additional information, please visit 

www.usu.edu/westcent. 

• Utah State University–Logan 

Donald J. McMahon, Ph.D., Center Director 

• Western Dairy Center-Affiliated Universities: 

Brigham Young University 

Oregon State University 

Texas A&M University 

University of Idaho 

Washington State University 

Weber State University 

Wisconsin Center for Dairy Research 

Building on Wisconsin’s tradition as “the Dairy State,” the Wisconsin Center for Dairy Research 

was established in 1986 to provide the foremost scientific expertise in dairy research, technical 

support, and education. The Wisconsin Center for Dairy Research is located within a licensed 

operating dairy plant on the University of Wisconsin-Madison campus. The Wisconsin Center 

for Dairy Research offers expertise in five main program areas: cheese, dairy ingredients and 

functionality, cultured products and beverages, quality/safety, and dairy processing. Each of 

these areas in turn is supported by expertise in dairy product research, sensory research, 

analytical research, training, and outreach. In addition to degree programs, the Wisconsin Center 

for Dairy Research provides specialized training and short courses to over 1,400 industry 

personnel annually and cosponsors the Wisconsin Master Cheesemaker Program. Its extensive 

facilities include a cheese pilot plant, dairy ingredients pilot plant, sensory lab, and analytical lab, 

and an applications lab. For additional information, please visit www.cdr.wisc.edu. 

• University of Wisconsin–Madison 

John Lucey, Ph.D., Center Director 

Mark Johnson, Ph.D., Assistant Director 

84 
 

 

 

 

 

 

2018 Nutrition Competitive Research Activities 

Lacy Alexander, PhD (Pennsylvania State University): Milk and Cheese Consumption and 

Human Microvascular Function [ongoing 2018]. 

David Allison, PhD and Andrew Brown, PhD (Indiana University-Bloomington): Science 

Dialogue Mapping of Knowledge and Knowledge Gaps Related to the Effects of Dairy Intake on 

Human Health [ongoing 2018]. 

Connie W. Bales, PhD, RD (Duke University Medical Center): An enhanced protein (dairy) 

weight loss intervention for Dynapenic Obesity: Impact on Muscle Quality and Composition 

[ongoing 2018]; An Enhanced Protein (Dairy) Weight Loss Intervention for Dynapenic Obesity: 

Impact on Muscle Quality and Composition” – Additional Experiments [commenced 2018]. 

Leila Barraj, D.Sc. (Exponent, Inc.): Health Care Costs and Savings Associated with Increased 

Dairy Consumption among Adults in the United States. [ongoing 2018]. 

Christopher Blesso, PhD (University of Connecticut): Milk Phospholipids for the Prevention of 

Atherosclerosis [ongoing 2018]. 

Richard Bruno, PhD, RD (Ohio State University): Regulation of Postprandial Nitric Oxide 

Bioavailability and Vascular Function by Dairy Milk [concluded 2018]. 

In-Young Choi, PhD (University of Kansas Medical Center): Dairy Intake and Cerebral 

Antioxidant Defense in Aging: A Dietary Intervention Study [ongoing 2018]. 

David Clark, PhD (Bovina Mountain Consulting): Review and Prepare Summary Papers on the 

Influence of Dairy Consumption on Child (12-60 Months) With Maternal Nutrition [commenced 

2018]. 

Sharon Donovan, PhD, RD & Barbara Fiese, PhD (University of Illinois at Urbana -

Champaign): STRONG Kids 2: A Cells-to-Society Approach to Nutrition in Early Childhood 

[ongoing 2018]. 

Adam Drewnowski, PhD, Victor and Colin Rehm, PhD, MPH (Nutriscore), and Victor Fulgoni, 

PhD (Nutrition Impact): Replacing Dairy Fat With Pufas: A Food Level Modeling Study of Diet 

Quality and Nutrient Intake [commenced 2018]; Towards A New Nutrient Density Score: An 

NRF Nutrient Profiling Tool for Global Use [commenced 2018]. 

Rajavel Elango, PhD (The University of British Columbia, School of Population and Public 

Health (co-funding with Dairy Farmers of Canada)): Dietary Protein Quality Assessment of Milk 

in School-Age Children to Meet the Nutritional Need for the Most Limiting Amino Acid, Lysine, 

When Combined with Cereals [commenced 2018]. 

Darcy Freedman, PhD, MPH (Case Western University): Modeling the Future of Food in Your 

Neighborhood Study [commenced 2018]. 

85 
 

 

 

 

 

 

 

 

 

Foundation for the National Institutes of Health: The Performance of Novel Cardiac Biomarkers 

in the General U.S. Population [ongoing 2018]. 

Osama Hamdy, MD, PhD, FACE (Joslin Diabetes Center): Dairy and Type 2 Diabetes: 

Research, Outreach, and Education [ongoing 2018]. 

Andrea R. Josse, PhD (York University): Assessing Diet Quality and the Use Of Dairy Foods in 

Meals and Snacks During and After A Lifestyle Modification Intervention in Overweight and 

Obese Adolescent Girls [Commenced 2018]. 

Naiman A. Khan, PhD, RD (University of Illinois at Urbana - Champaign): Diet Quality & 

Cognitive Control Function in Early Childhood: A Pilot Study [concluded 2018]; CrossSectional and Longitudinal Predictors of Cognitive Control and Early Academic Abilities among 

Preschool Children [commenced 2018]. 

Jana Kraft, PhD (University of Vermont): Full-Fat Yogurt and Glucose Tolerance [ongoing 

2018]. 

Mario Kratz, PhD, MS (Fred Hutchinson Cancer Research Center - University of Washington): 

The impact of Low-fat and Full-fat Dairy Consumption on Glucose Homeostasis [concluded 

2018]. 

Ronald M. Krauss, MD (Children’s Hospital Oakland Research Institute): Effects of a Modified 

High-Fat Mediterranean Dietary Pattern On Lipoprotein and Inflammatory Markers Of CVD 

Risk in Adults [ongoing 2018]; A Randomized Study of the Effect of Replacing Sugar-Sweetened 

Soda by Reduced Fat Milk on Cardiometabolic Health in Male Adolescent Soda Drinkers 

[ongoing 2018]. 

Benoit Lamarche, PhD, FAHA (Laval University (Canada)): Investigation of the Impact of 

Cheese Consumption on HDL Function [concluded 2018]. 

Kevin C. Maki, PhD (Midwest Biomedical Research, a division of MB Clinical Research & 

Consulting): Scientific Literature Review on the Naturally-Occurring Hormone Contents of 

Foods [commenced 2018]. 

Andrew Mente PhD, MA ((McMaster University (co-funding with Dairy Farmers of Canada)): 

Dairy Consumption and Cardiovascular Disease in Diverse Populations [commenced 2018]. 

Benjamin F. Miller, PhD (Colorado State University): Activation of Nrf2 by Conjugated Linoleic 

Acid to Decrease Oxidative Stress and Inflammation and Thereby Increase Muscle Building 

Effects of Milk Proteins [concluded 2018]. 

Daniel Moore, PhD (University of Toronto): Anabolic Potential of Dairy and Dairy Products 

For Active Children and Adolescents [commenced 2018]. 

Lynn L. Moore, D.Sc., MPH (Boston University School of Medicine): Protein Effects on 

Metabolic Outcomes in Older Adults [concluded 2018]; Cardiometabolic Effects of Butter and 

Other Fats and Oils in Framingham Offspring Study Adults [commenced 2018]; Yogurt and 

86 
 

 

 

 

 

 

 

 

 

 

 

 

Total Dairy Intake Among Women: Effects On Weight Change and Fracture Risk During 

Critical Life Stages [commenced 2018]. 

Paul Moughan, PhD (Massey University (New Zealand)): Determination of True Ileal Amino 

Acid Digestibility In Dietary Protein Sources Commonly Consumed By Humans: Toward An 

International Database of the Protein Quality of Human Foods [concluded 2018]; A Study of The 

Role for Dairy Proteins in Optimally-Costed Diets for Adult Humans – A Linear Programming 

Approach [commenced 2018]. 

Kristin Nieman, PhD (Katalyses LLC): Dairy and Inflammation: A systematic review of the 

evidence [commenced 2018]. 

Stephen Ritchie, PhD (University of Alabama): Functionalized Mesh Materials for Listeria 

Mitigation in Milk and Milk-Derived Products Processed in Dairy Plants [ongoing 2018]. 

Shivani Sahni, PhD (Harvard University - Hebrew Rehabilitation Center): Dairy food intake, 

vitamin D status and bone measures [ongoing 2018]. 

Jeffery Schwimmer, MD (University of California, San Diego): In Children with Obesity, the 

Intake of Dairy-Derived Odd Chain and Branched Chain Fatty Acids is Inversely Associated 

with the Risk for Nonalcoholic Fatty Liver Disease [ongoing 2018]. 

Mary Beth Spitznagel, PhD (Kent State University): The Influence of Glucoregulatory Function 

in Postprandial Cognition Following Dairy Milk: A Secondary Data Analysis [commenced 

2018]. 

Lyn Steffen, PhD, MPH, RD (University of Minnesota): Dairy Consumption, Dietary Patterns 

and Cardiac Phenotypes [ongoing 2018]. 

Hirofumi Tanaka, PhD (University of Texas): Destiffening and hypotensive effects of whole milk 

and full-fat dairy products [concluded 2018]. 

Jeff Volek, PhD, RD (Ohio State University): Controlled clinical study to determine novel health 

benefits of cheese consumption [concluded 2018]. 

Elena Volpi, MD, PhD (University of Texas Medical Branch at Galveston): A Phase I 

randomized clinical trial of in-hospital and post-hospital whey protein vs. isonitrogenous 

collagen protein vs. isocaloric placebo maltodextrin supplementation to improve recovery from 

hospitalization for an acute medical illness in previously independent community dwelling older 

adults [commenced 2018]. 

Taylor Wallace, PhD, CFS, FACN (Think Healthy Group Inc., and George Mason University): 

Protein intake and bone health – Phase II Systematic review and meta-analysis [concluded 

2018]; Dairy consumption across menopause transition into later life - impact on bone mineral 

density and risk of fractures in women enrolled in the SWAN cohort [commenced 2018]; Effect 

of dairy, calcium and vitamin D intakes on bone health across the lifespan: a systematic review 

and consensus report [commenced 2018]. 

87 
 

Gareth Wallis, PhD (University of Birmingham (United Kingdom)): Exploring novel uses for 

lactose constituents in sports nutrition [ongoing 2018]. 

Connie Weaver, PhD (Purdue University): Guidelines for Enhancing Design and Analysis of 

Prospective Cohort Studies Related to Bone Health for Use in Nutrition and Health Research 

[concluded 2018]; The Effect of Dairy vs. Plant-Based Beverages on Bioavailability of Calcium 

and Vascular Function [commenced 2018]. 

Robin White, PhD (Virginia Polytechnic Institute and State University): Nutritional and 

Environmental Consequences of Dairy Removal from US Agriculture [ongoing 2018]. 

88 
 

 

 

 

 

 

 

 

 

2018 Product Competitive Research Projects 

Principal Investigator, Institution, Project Title and Status 

Alirez Abbaspourrad, PhD (Cornell University): Annatto-free Cheddar Cheese Whey Powder: 

Enzymatically-triggered microcapsules as a novel method to partition color to Cheddar cheese 

and obtain white whey powder [ongoing 2018]. 

Jayendra K. Amamcharla, PhD (Kansas State University): Use of Nano-scale aqueous ozone to 

remove biofilms from selected dairy product contact surfaces [concluded 2018]; Altering the 

microstructure to improve functionality of dairy powders using micro- and nano-bubbles 

[ongoing 2018]; Development and evaluation of selective methods for rapid detection of Bacillus 

endospores in nonfat dry milk [commenced 2018]. 

Jayendra K. Amamcharla, PhD (Kansas State University) & Lloyd Metzger, PhD (South Dakota 

State University): Understanding the effects of various intrinsic and extrinsic factors on the 

stability of lactose-rich co-product [ongoing 2018]. 

Samuel Alcaine, PhD (Cornell University): Evaluation of Protective Bacterial Cultures for the 

Effective Control of Listeria in High Risk Cheese [ongoing 2018]; Evaluation of commercial bioprotective cultures and their ability to inhibit the outgrowth of eukaryotic spoilers in cheese 

[ongoing 2018]; Create Nationwide Food Safety Resources and provide support for 

Artisan/Farmstead Dairy Producers [ongoing 2018]; Designed Survival of Protective and 

Probiotic Cultures through HPP for Novel Dairy Products [concluded 2018]. 

Sanjeev Anand, PhD (South Dakota State University): Scale up of hydrodynamic cavitation as 

an in-line process combined with milk pasteurization for sporeformer control [ongoing 2018]; To 

identify quorum inhibitor based anti-biofilm molecules for developing new generation 

membrane-biofilm cleaners for the dairy industry [ongoing 2018]; Understanding the Process of 

Spore Germination or Sporulation, and Biofilm Formation under Simulated Skim Milk Powder 

Manufacturing Conditions [concluded 2018]. 

David M. Barbano, PhD (Cornell University) & MaryAnne Drake, PhD (North Carolina State 

University): The Impact of Milk and Whey Protein Based Ingredients on Sensory and Physical 

Properties of Beverages [ongoing 2018]; The Role of Protein, Protein Ratio, and Fat Content on 

Consumer Acceptance [ongoing 2018]. 

David J. Baumler, PhD (University of Minnesota): Evaluation of Intense Pulsed Light 

Technologies for Non-Thermal Processing to Kill Bacterial Spores in Dry Milk Powders 

[commenced 2018]. 

Maire Begley, PhD (Cork Institute of Technology (Ireland)): Identification of microbiallyderived anti-listeria compounds using high-throughput robotics [concluded 2018]. 

Andreia Bianchini, PhD (University of Nebraska): Application of interventions at farm level to 

reduce sporeformer bacteria [ongoing 2018]. 

89 
 

 

 

 

 

 

 

 

 

 

 

 

 

Mindy Brashears, PhD (Texas Tech University): Inhibition of Listeria monocytogenes on Cheese 

using Lactic Acid Bacteria as a Biocontrol System Intervention [concluded 2018]. 

Stephanie Clark, PhD & Tong Wang, PhD (Iowa State University): Technology for novel and 

scalable isolation of dairy phospholipids (PL) and its stabilization against lipid auto-oxidation 

[ongoing 2018]. 

Michael Culhane, PhD (Dairy Advance Business Consulting): Optimizing Research Strategies 

for Whey Protein Technology Development [commenced 2018]. 

Dennis D’Amico, PhD (University of Connecticut): Determining the efficacy of glycolipids to 

control Listeria monocytogenes in Queso Fresco [ongoing 2018]. 

Robert Dando, PhD (Cornell University): Eliminating Photosensitive Absorption Bands from 

LED Light Engines to Preserve Dairy Quality [commenced 2018]. 

MaryAnne Drake, PhD (North Carolina State University): Southeast Dairy Center Application 

Laboratory Program [ongoing 2018]; Identification of the Chemical Flavor Differences Between 

Milks Ultra-Pasteurized by Indirect or Direct Heat [concluded 2018]; Consumer Perceptions of 

Lactose Free Milk [ongoing 2018]; Sensory Analysis of White And Chocolate Milk on Child 

Acceptance [concluded 2018]; Determination of the Impact of Anticake Agents on Consumer 

Perception of Cheddar Cheese Shreds [concluded 2018]; The Role of Vitamin Premix on Flavor 

and Flavor Stability of Fluid Milk [concluded 2018]; Evaluation of Methods to Reduce 

Astringency in Clear Acidic Protein Beverages [concluded 2018]; The Role of Packaging on the 

Flavor of Fluid Milk [ongoing 2018]; Consumer Perception of Sustainability and its Relation to 

Labeling Dairy Foods and Ingredients [commenced 2018]; MCC Purity and Functionality for 

Ingredient Applications [commenced 2018]; Comparison of the Efficiency Of Ceramic and 

Polymetric Microfiltration Removal of Whey Protein From Sweet Whey [commenced 2018]. 

Susan E. Duncan, PhD (Virginia Polytechnic Institute and State University): Color Temperature 

Guidance for Optimizing LED Lighting in Retail Dairy Cases [concluded 2018]. 

David W. Everett, PhD (California Polytechnic State University – San Luis Obispo): California 

Dairy Center Application Laboratory Program [ongoing 2018]; Improving the Flavor of Cheese 

Made from Powdered Milk Using Buttermilk [commenced 2018]. 

Kathleen Glass, PhD (University of Wisconsin-Madison): Inhibition of Clostridium Botulinum In 

Reduced-Sodium Pasteurized Cheese Products – Validation of Model 2 [ongoing 2018]; Control 

of Listeria Monocytogenes in High-Moisture Cheese [ongoing 2018]; Safety of Reduced Sodium 

Processed Cheese [ongoing 2018]. 

Julie Goddard, PhD (Cornell University): Mining value added, naturally derived, sweeteners 

from dairy co-product streams [commenced 2018]. 

Lisbeth Goddik, PhD (Oregon State University): Impact of Milk Hauling and Receiving on 

Microbial Content in Raw Milk [concluded 2019]; A Comprehensive Approach to Reducing the 

Risk Of E. Coli in Bloomy Rind Cheeses: Product Reformulation and HPP [ongoing 2018]. 

90 
 

 

 

 

 

 

 

 

 

 

 

 

 

Selvarani Govindasamy-Lucey, PhD (University of Wisconsin-Madison): Controlling Cheese 

Acidity by Adjustment of the Lactose to Protein Content of Cheese Milk [ongoing 2018]; 

Extending the Shelf-Life Performance of Natural Mozzarella Cheese for Export Markets 

[ongoing 2018]; High Quality Block Gouda by Dry Salting Method [ongoing 2018]. 

Federico Harte, PhD (Pennsylvania State University): High Pressure Jet Spray Drying to Create 

Novel Dairy Powders [ongoing 2018]; Prototype to Study the Effect of Ionic Environments on 

Casein Micelle Integrity [concluded 2018]. 

Shinya Ikeda, PhD (University of Wisconsin-Madison): Inhibiting the Formation of Poorly 

Soluble Skin Layers on High Milk Protein Powders [ongoing 2018]. 

Helen Joyner, PhD (University of Idaho): Enhancing the Functionality of Milk Protein 

Concentrate through Direct Steam Injection Cooking [commenced 2018]. 

Mark Johnson, PhD (University of Wisconsin-Madison): Improving the Functionality and 

Quality of Large Cheese Blocks [ongoing 2018]; Use of Extrusion Technology for Snack Cheeses 

[ongoing 2018]. 

Kevin Keener, PhD (Iowa State University): Controlling Listeria Monocytogenes in Soft Cheeses 

with High Voltage Atmospheric Cold Plasma (HVACP) Treatment [ongoing 2018]. 

Nancy L. Keim, PhD, RD (USDA-Agricultural Research Service): Evaluation of Health Benefits 

of a High-Quality Diet in Persons at Risk for Development of Metabolic Disease: Rapidity and 

Weight-Independent Effects [ongoing 2018]. 

John A. Lucey, PhD (University of Wisconsin-Madison): Wisconsin Center for Dairy Research 

Applications Laboratory [ongoing 2018]; Designing Novel Cheese with High Levels of Intact 

Casein [ongoing 2018]; Separation and Characterization of Phospholipids From Whey Protein 

Phospholipid Concentrate (WPPC), And Other Dairy Feed Streams [ongoing 2018]; Impact of 

Microfiltration Retentates on Cheese Quality [ongoing 2018]; New Membrane Technology to 

Make High-Value Dairy Ingredients [ongoing 2018]; Controlled Pilot-Plant-Scale Evaluations 

of Charged Spiral-Wound Ultrafiltration Membranes [ongoing 2018]. 

Sergio Martinez-Monteagudo, PhD (South Dakota State University): Development of a Two-Step 

Process for the Production of Food Ingredients from Whey Permeate [commenced 2018]. 

Lloyd Metzger, PhD (South Dakota State University): Midwest Dairy Foods Applications 

Laboratories Program [ongoing 2018]; Explore Technologies to Reduce Microbial Load in 

Dairy Powders At/Before Packaging Step [ongoing 2018]. 

Carmen Moraru, PhD (Cornell University): Use of Forward Osmosis as a Non-Thermal Method 

of Concentration for the Manufacture of High-Quality Milk Concentrates and Powders [ongoing 

2018]. 

NIZO Food Research B.V. (Netherlands): Reduction of Spore Count in Milk Powder Production 

- Phase II Of Development of an Improved Enumeration Method for Highly Heat Resistant 

Spores [ongoing 2018]. 

91 
 

 

 

 

 

 

 

Hasmukh Patel, PhD & Lloyd Metzger, PhD (South Dakota State University) & Cordelia 

Selomulya, PhD (Monash University (Australia)): Single Droplet Drying Technology for 

Optimization of Dairy Ingredients for Best Quality and Functionality [ongoing 2018]. 

Scott A. Rankin, PhD and George Huber, PhD (University of Wisconsin-Madison): Catalytic 

Conversion of Lactose-Rich Co-Products Into Value-Added Components [ongoing 2018]. 

Tonya Schoenfuss, PhD (University of Minnesota): Improving Sensory and Functional 

Properties of Reduced Sodium Low—Moisture Part—Skim Mozzarella Cheese Via Brine and 

Make Procedure Modifications [ongoing 2018]. 

Karen Schmidt, PhD (Kansas State University): Producing Dairy Protein Ingredients for 

Targeted Markets [concluded 2018]. 

Clint Stevenson, PhD and MaryAnne Drake, PhD (North Carolina State University): Food Safety 

Course for Artisan and Farmstead Cheesemakers [ongoing 2018]. 

Martin Wiedmann, PhD, DVM (Cornell University): Impact of Bedding Type in Raw Milk 

Contamination with Spore Formers Affecting Dairy Powder Quality [concluded 2018]; 

Evaluation of Variation in Spore Count Methods and Determination of Optimal Parameters for 

Standardization of Milk Powder Spore Testing [concluded 2018]. 

Bongkosh Vardhanabhuti, PhD (University of Missouri) & Lloyd Metzger, PhD (South Dakota 

State University): Whey Protein Ingredient with Improved Emulsification Properties [concluded 

2018]. 

Haotian Zheng, PhD (California Polytechnic State University - San Luis Obispo): The Milk Fat 

Globule Membrane Generates Flavor in Cheese Made from Recombined Milk [ongoing 2018]. 

Qixin Zhong, PhD (University of Tennessee): Delivery System of Lactose to Improve the Quality 

of Milk for Lactose-Intolerant Consumers [concluded 2018]. 

92 
 

 

 

 

 

 

 

2018 Sustainability Competitive Research Activities 

Principal Investigator, Institution, Project Title and Status 

Diana Aga, PhD (University of Buffalo) and Chintala, Rajesh (Innovation Center for Dairy): 

Understanding and Guidance on the Fate and Transport of Pharmaceuticals, Endocrine 

Disrupting Compounds (Edcs), Herbicides, and Pathogens in Dairy Manure [concluded 2018]. 

Olivier Jolliet, PhD (University of Michigan): Dairy’s Nutritional Benefit and Environmental 

Impact – Phase II [ongoing 2018]. 

Ermias Kebreab, PhD (University of California - Davis): Interactions Between Dairy Cattle 

Nutrition and Management Interventions Versus Enteric and Manure Emissions and Nitrogen 

Excretion – Model Assessment [concluded 2018]; Quantitative Assessment for Feed Additives 

Enteric Methane Mitigation Protocol [commenced 2018]. 

Johannes Lehmann, PhD (Cornell University): Feasibility Assessment of Dairy Biochar as a 

Value-Added Potting Mix in Horticulture and Ornamental Gardening [concluded 2018]. 

Meredith Niles, PhD (University of Vermont): Assessing Dairy Farmer Decisions and Barriers 

for Adopting Sustainable Manure Management Systems [ongoing 2018]. 

Mary Beth de Ondarza, PhD (Paradox Nutrition): Advantages and Limitations of Dairy 

Efficiency Measures and the Effects of Nutrition and Feeding Management Interventions II 

[concluded 2018]. 

93 
 

 

 

 

F I N A N C I A L S T A T E M E N T S

National Dairy Promotion and Research Board

Years Ended December 31, 2018 and 2017

With Reports of Independent Auditors
 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Financial Statements

Years Ended December 31, 2018 and 2017

Contents

Report of Independent Auditors.......................................................................................................1

Report of Independent Auditors on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance With Government Auditing Standards................................................3

Financial Statements

Statements of Financial Position......................................................................................................5

Statements of Activities and Changes in Net Assets.......................................................................6

Statements of Cash Flows................................................................................................................7

Notes to Financial Statements..........................................................................................................8

1901-3012757
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Report of Independent Auditors

The Board of Directors

National Dairy Promotion and Research Board

We have audited the accompanying financial statements of National Dairy Promotion and

Research Board, which comprise the statements of financial position as of December 31, 2018 and

2017, and the related statements of activities and changes in net assets and cash flows for the years

then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements

in conformity with U.S. generally accepted accounting principles; this includes the design,

implementation, and maintenance of internal control relevant to the preparation and fair

presentation of financial statements that are free of material misstatement, whether due to fraud or

error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We

conducted our audits in accordance with auditing standards generally accepted in the United States

and the standards applicable to financial audits contained in Government Auditing Standards,

issued by the Comptroller General of the United States. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud

or error. In making those risk assessments, the auditor considers internal control relevant to the

entity’s preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such

opinion. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of significant accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

1901-3012757 1
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of National Dairy Promotion and Research Board as of December 31, 2018

and 2017, and the changes in its net assets and its cash flows for the years then ended in conformity

with U.S. generally accepted accounting principles.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we also have issued our report dated May 3,

2019, on our consideration of National Dairy Promotion and Research Board’s internal control

over financial reporting and on our tests of its compliance with certain provisions of laws,

regulations, contracts, and grant agreements and other matters. The purpose of that report is to

describe the scope of our testing of internal control over financial reporting and compliance and

the results of that testing, and not to provide an opinion on internal control over financial reporting

or on compliance. That report is an integral part of an audit performed in accordance with

Government Auditing Standards in considering National Dairy Promotion and Research Board’s

internal control over financial reporting and compliance.

May 3, 2019

1901-3012757 2
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Report of Independent Auditors on Internal Control Over Financial Reporting and

on Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance With Government Auditing Standards

The Management and Board of Directors

National Dairy Promotion and Research Board

We have audited, in accordance with auditing standards generally accepted in the United States

and the standards applicable to financial audits contained in Government Auditing Standards,

issued by the Comptroller General of the United States, the financial statements of National Dairy

Promotion and Research Board, which comprise the statements of financial position as of

December 31, 2018 and 2017, and the related statements of activities and changes in net assets and

cash flows for the years then ended, and the related notes to the financial statements, and have

issued our report thereon dated May 3, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered National Dairy

Promotion and Research Board’s internal control over financial reporting (internal control) to

determine the audit procedures that are appropriate in the circumstances for the purpose of

expressing our opinion on the financial statements, but not for the purpose of expressing an opinion

on the effectiveness of National Dairy Promotion and Research Board’s internal control.

Accordingly, we do not express an opinion on the effectiveness of National Dairy Promotion and

Research Board’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent,

or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or

combination of deficiencies, in internal control, such that there is a reasonable possibility that a

material misstatement of the entity’s financial statements will not be prevented, or detected and

corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of

deficiencies, in internal control that is less severe than a material weakness, yet important enough

to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph

of this section and was not designed to identify all deficiencies in internal control that might be

material weaknesses or significant deficiencies. Given these limitations, during our audit we did

not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.

1901-3012757 3
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compliance and Other Matters

As part of obtaining reasonable assurance about whether National Dairy Promotion and Research

Board’s financial statements are free of material misstatement, we performed tests of its

compliance with certain provisions of laws, regulations, contracts, and grant agreements,

noncompliance with which could have a direct and material effect on the determination of financial

statement amounts. However, providing an opinion on compliance with those provisions was not

an objective of our audit, and accordingly, we do not express such an opinion. The results of our

tests disclosed no instances of noncompliance or other matters that are required to be reported

under Government Auditing Standards.

Purpose of This Report

The purpose of this report is solely to describe the scope of our testing of internal control and

compliance and the result of that testing, and not to provide an opinion on the entity’s internal

control or on compliance. This report is an integral part of an audit performed in accordance with

Government Auditing Standards in considering the entity’s internal control and compliance.

Accordingly, this communication is not suitable for any other purpose.

May 3, 2019

1901-3012757 4
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Statements of Financial Position

2018 2017

Assets

Current assets:

Cash and cash equivalents $ 27,383,133 $ 37,988,171

Domestic assessments receivable, net of allowance

for doubtful accounts of $40,000 in 2018 and 2017 10,834,609 10,772,223

Import assessments receivable 373,824 382,786

Other current assets 50,086 –

Total current assets 38,641,652 49,143,180

Total assets $ 38,641,652 $ 49,143,180

Liabilities and net assets

Current liabilities:

Accounts payable $ 298,908 $ 263,108

Accrued expenses and other liabilities 268,323 497,932

Amount due to related party – Dairy Management Inc. 7,445,844 16,214,547

Total current liabilities 8,013,075 16,975,587

Net assets without donor restrictions:

Designated 22,675,707 19,148,520

Undesignated 7,952,870 13,019,073

Total net assets without donor restrictions 30,628,577 32,167,593

Total liabilities and net assets $ 38,641,652 $ 49,143,180

See accompanying notes.

December 31

1901-3012757 5
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Statements of Activities and Changes in Net Assets

2018 2017

Revenues

Domestic assessments $ 107,875,040 $ 107,428,437

Import assessments 2,966,188 3,393,646

Select funding 6,803,518 6,533,055

Interest income 209,873 –

Total revenues 117,854,619 117,355,138

Expenses

Programs:

Domestic and export marketing 114,202,743 110,545,613

QP program support 100,000 100,000

Total programs 114,302,743 110,645,613

General and administrative:

Dairy Management Inc. general and administrative 3,653,052 3,981,938

General and administrative 674,419 721,225

Total general and administrative 4,327,471 4,703,163

Other operating expenses:

United States Department of Agriculture oversight 763,421 770,434

Dairy Management Inc. additional pension contribution – 344,579

Total other operating expenses 763,421 1,115,013

Total expenses 119,393,635 116,463,789

Change in net assets without donor restrictions (1,539,016) 891,349

Net assets without donor restrictions, beginning of year 32,167,593 31,276,244

Net assets without donor restrictions, end of year $ 30,628,577 $ 32,167,593

See accompanying notes.

Year Ended December 31

1901-3012757 6
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Statements of Cash Flows

2018 2017

Operating activities

Change in net assets $ (1,539,016) $ 891,349

Adjustments to reconcile change in net assets to net cash

used in operating activities:

Depreciation – 1,005

Changes in assets and liabilities:

Assessments receivable (53,424) 685,099

Other current assets (50,086) –

Accounts payable 35,800 97,221

Accrued expenses and other liabilities (229,609) (125,082)

Amount due to related party – Dairy Management Inc. (8,768,703) (7,708,436)

Net cash used in operating activities (10,605,038) (6,158,844)

Net decrease in cash and cash equivalents (10,605,038) (6,158,844)

Cash and cash equivalents, beginning of year 37,988,171 44,147,015

Cash and cash equivalents, end of year $ 27,383,133 $ 37,988,171

See accompanying notes.

Year Ended December 31

1901-3012757 7
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Notes to Financial Statements

December 31, 2018 and 2017

1. Organization

National Dairy Promotion and Research Board (NDB) was established on May 1, 1984, pursuant

to The Dairy and Tobacco Adjustment Act of 1983 (Public Law 98-180), as part of a

comprehensive strategy to reduce milk surplus supplies in the U.S. and increase human

consumption of fluid milk and other dairy products. The purpose of NDB is to establish a

coordinated program of promotion and research designed to strengthen the dairy industry’s

position in the marketplace and to maintain and expand domestic and international markets’ usage

of U.S.-produced fluid milk and other dairy products.

United States Department of Agriculture (USDA) approved a joint venture between NDB and

United Dairy Industry Association (UDIA) to form Dairy Management Inc. (DMI) effective

January 1, 1995. The purpose of DMI, a related-party organization, is to promote greater

coordination, efficiency, and effectiveness and to avoid incompatibility and duplication in the

marketing programs and projects undertaken by NDB and UDIA, which jointly plan, develop, and

implement their various marketing programs and activities through DMI, subject to the approval

of USDA. These collective programs and activities are called the Unified Marketing Plan (UMP).

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements are prepared on the accrual basis of accounting in conformity with U.S.

generally accepted accounting principles (GAAP). These principles require management to make

estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure

of contingent assets and liabilities and the reported amounts of revenues and expenses in the

reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include checking, overnight sweep, certificates of deposit, and interestbearing demand deposit accounts with financial institutions. NDB considers investments with an

original maturity of 90 days or less to be cash equivalents.

NDB has cash balances in a financial institution that exceed federal depository insurance limits.

Pursuant to guidelines published by USDA’s Agricultural Marketing Service, NDB’s cash

balances are reviewed daily by the financial institution in which the balances are held and are fully

collateralized by U.S. Treasuries at the Federal Reserve Bank of St. Louis.

1901-3012757 8
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Net Assets

NDB follows the reporting requirements of GAAP which require that resources be classified for

reporting purposes based on the existence or absence of donor-imposed restrictions. This is

accomplished by classification of fund balances into two classes of net assets: without donor

restrictions and with donor restrictions. Descriptions of the two net asset categories and the types

of transactions affecting each category follow:

• Without Donor Restrictions – Net assets that are not subject to donor-imposed restrictions.

This net asset category principally consists of unspent assessment revenues that are

recognized in the month in which milk is marketed.

Prior to 2016, NDB’s Board of Directors designated a portion of net assets without donor

restrictions for cash reserves. In addition, designated net assets without donor restrictions

also include funding required to cover subsequent year budget deficits as well as carryover

funding for projects not completed prior to year-end. The amounts designated to cover

subsequent year budgets were approved by the board during the fourth quarters of 2018

and 2017. The carryover funding was approved by the board during the first quarters of

2019 and 2018. Total designations of net assets without donor restrictions are as follows:

2018 2017

Designated net assets

Cash reserves $ 1,800,000 $ 1,800,000

Subsequent year program activity 20,875,707 17,348,520

Total designated net assets 22,675,707 19,148,520

Undesignated net assets 7,952,870 13,019,073

Total net assets without donor restrictions $ 30,628,577 $ 32,167,593

• With Donor Restrictions – Net assets subject to donor-imposed restrictions that will be met

either by actions of NDB or the passage of time. NDB has no net assets with donor

restrictions at December 31, 2018 or 2017.

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National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Financial Instruments

The carrying values of cash and cash equivalents, domestic assessments receivable, import

assessments receivable, other current assets, accounts payable, accrued expenses and other

liabilities, and amount due to related party are reasonable estimates of fair value due to the shortterm nature of these financial instruments.

Assessments

Domestic assessment revenue is generated by a mandatory assessment of $0.15 per hundredweight

on all milk produced and marketed in the U.S. Milk producers can direct up to $0.10 per

hundredweight to USDA-qualified state and regional generic dairy promotion organizations. For

the years ended December 31, 2018 and 2017, the net NDB assessment was $0.0536 and $0.0535,

respectively, per hundredweight of milk marketed. Assessment revenue is recognized in the month

in which milk is marketed. In addition, effective August 2011, the mandatory assessment was

extended to dairy importers at $0.075 per hundredweight. Importers can direct $0.025 per

hundredweight to USDA-qualified generic dairy promotion organizations.

Income Taxes

The Internal Revenue Service has ruled that NDB is an entity engaging in an activity under the

oversight of USDA and, accordingly, is not subject to federal taxation.

Recent Accounting Pronouncements

Accounting Pronouncement Adopted

During 2018, NDB adopted Accounting Standards Update (ASU) 2016-14 – Not-for-Profit

Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. This

guidance is intended to improve the net asset classification requirements and the information

presented in the financial statements and notes about a not-for-profit entity’s liquidity, financial

performance, and cash flows. The ASU requires presentation of two classes of net assets versus

the previously required three. The guidance also enhances disclosures for board-designated

amounts, composition of net assets without donor restrictions, liquidity, and expenses by both their

natural and functional classification. The adoption and retrospective application of ASU 2016-14

did not impact NDB’s classification of net assets.

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National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Accounting Pronouncement Not Yet Adopted

In June 2018, the FASB issued ASU 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the

Scope and the Accounting Guidance for Contributions Received and Contributions Made. This

ASU provides a more robust framework to determine when a transaction should be accounted for

as a contribution or as an exchange transaction and provides additional guidance about how to

determine whether a contribution is conditional. This ASU is effective January 1, 2019 and will

be applied on a modified prospective basis. Upon NBD’s adoption of this ASU, assessment

revenues are accounted for as unconditional contributions. The impact to the financial statements

upon adoption is not material.

Reclassifications

Certain amounts in the 2017 statement of activities and changesin net assets, have been reclassified

to conform to current year presentation. Commensurate with the adoption of ASU 2016-14, NDB

reassessed the allocation of functional expenses between program expenses and general and

administrative expenses. As a result of this reassessment, a reclassification was made between

program expenses and general and administrative expenses. This adjustment resulted in no impact

to total expenses or changes in net assets for fiscal year 2017.

3. Related-Party Transactions

NDB funds DMI on a cost-reimbursement basis. DMI core costs include staff salaries and benefits

of DMI employees, travel, Board of Directors’ expenses, and office operating expenses. These

costs are funded primarily by NDB, with UDIA funding one-half of the DMI Office of CEO and

Board of Directors costs. DMI marketing program costs include costs attributable to implementing

DMI’s programs which are based on the annual UMP budget.

NDB funded DMI program and core costs as follows:

2018 2017

Program costs $ 81,691,180 $ 76,868,916

Core costs 36,164,615 38,003,214

Total funding to DMI $ 117,855,795 $ 114,872,130

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National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

3. Related-Party Transactions (continued)

U.S. Dairy Export Council (USDEC) was incorporated in 1996 to improve the marketing

conditions for the U.S. dairy industry with respect to the export of U.S. dairy products by

promoting their acceptability, consumption, and purchase in international markets. DMI is the

primary source of USDEC’s funding. Of the program funding, NDB reimbursed DMI $12,710,157

and $11,945,636 for 2018 and 2017, respectively, for USDEC’s program and operational expenses.

Youth Improved, Inc. was incorporated in 2009 and obtained a certificate of registration in 2001

to operate under the trade name GENYOUth Foundation (GENYOUth). GENYOUth was formed

for the purpose of encouraging, monitoring, and assisting organizations in implementing youthoriented health programs in schools and promoting healthy diet and exercise programs. DMI is the

primary source of GENYOUth’s unrestricted contributions, which are used to fund its operating

costs. NDB reimbursed DMI $1,841,081 and $1,839,396 for 2018 and 2017, respectively, in

support of GENYOUth.

Dairy Research Institute (DRI) was incorporated in 2010 for the purpose of dairy scientific

research and sustainability advancement and operates under the oversight and control of DMI.

NDB reimbursed DMI $81,378 and $80,360 for 2018 and 2017, respectively, for DRI’s program

and operational expenses.

4. Functional Classification of Expenses

NDB’s primary program activities involve providing funding in support of domestic and

international dairy promotion as part of the UMP. Additionally, expenses reported as general and

administrative and other operating are incurred in support of these primary program activities.

Expenses by functional classification for the year ended December 31, 2018 consist of the

following:

Program Services

Domestic and

Export

Marketing

QP Program

Support

Support Activities

General and

Administrative

Other

Operating

Total

Expenses

Program support $ 114,202,743 $ 100,000 $ – $ – $ 114,302,743

DMI – general and administrative – – 3,653,052 – 3,653,052

USDA oversight – – – 763,421 763,421

Collection and compliance – – 358,134 – 358,134

Other – – 316,285 – 316,285

$ 114,202,743 $ 100,000 $ 4,327,471 $ 763,421 $ 119,393,635

1901-3012757 12
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

4. Functional Classification of Expenses (continued)

Expenses by functional classification for the year ended December 31, 2017 consist of the

following:

Program Services

Domestic and

Export

Marketing

QP Program

Support

Support Activities

General and

Administrative

Other

Operating

Total

Expenses

Program support $ 110,545,613 $ 100,000 $ – $ – $ 110,645,613

DMI – general and administrative – – 3,981,938 – 3,981,938

USDA oversight – – – 770,434 770,434

Collection and compliance – – 387,125 – 387,125

Other – – 334,100 344,579 678,679

$ 110,545,613 $ 100,000 $ 4,703,163 $ 1,115,013 $ 116,463,789

5. Financial Assets and Liquidity Resources

As of December 31, 2018 and 2017, financial assets and liquidity resources available within one

year for general expenditures were as follows:

2018 2017

Financial assets

Cash and cash equivalents $ 27,383,133 $ 37,988,171

Domestic assessments receivable, net 10,834,609 10,772,223

Import assessments receivable 373,824 382,786

Other current assets 50,086 –

Total financial assets and liquidity resources available

within one year $ 38,641,652 $ 49,143,180

As part of its liquidity management, NDB has a defined practice to structure its financial assets to

be available as its general expenditures come due. In addition, NDB invests cash in excess of daily

operating needs in overnight investments and certificates of deposit.

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National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

6. Assessments Receivable

Domestic and import assessments receivable are recorded at the estimated net amounts to be

received based on the amount of milk marketed and the average payment per hundredweight when

collectability is reasonably assured. Domestic and import assessments receivable for which

collectability is not reasonably assured are not recorded as revenue until such payments are

ultimately received. Additionally, in accordance with Public Law 98-180, NDB forwards unpaid

assessments to USDA for collection and other legal proceedings. As of December 31, 2018 and

2017, cumulative unpaid assessments of $1,421,166 and $1,216,853, respectively, were at USDA

pending further action. Such amounts are not included in assessments receivable as of

December 31, 2018 or 2017, and will not be recorded as revenue until such amounts are ultimately

received. Civil penalties exist for any persons who do not pay the assessment and/or file required

documentation as outlined within the Dairy Promotion and Research Order.

7. Guarantees

NDB has guaranteed DMI’s five-year note payable with CoBank, which was initiated in

October 2016 to fund the deficiency in plan assets upon termination of the UDIA-sponsored multiemployer pension plan. The note payable balance was $2,397,881 and $5,455,986 at December 31,

2018 and 2017, respectively. The terms of the note agreement require quarterly principal payments

and monthly interest payments, based on the outstanding loan balance, at an annual interest rate of

3.93%.

The following is a schedule of future expected principal payments of the CoBank note as of

December 31, 2018:

2019 $ 871,957

2020 871,957

2021 653,967

$ 2,397,881

DMI has entered into separate loan agreements with a number of the other participating employers,

under the same terms as its loan with CoBank. The notes receivable balance related to these loan

agreements totaled $2,397,881 and $5,114,987 at December 31, 2018 and 2017, respectively.

1901-3012757 14
 

 

 

 

 

 

 

National Dairy Promotion and Research Board

Notes to Financial Statements (continued)

8. Subsequent Events

NDB evaluated events occurring between January 1, 2019 and May 3, 2019, which is the date

when the accompanying financial statements were available to be issued. No events subsequent to

December 31, 2018 have been identified that require recognition or disclosure in the financial

statements.

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Independent Auditors’ Report on Compliance

The Board of Directors

National Dairy Promotion and Research Board

We have audited, in accordance with auditing standards generally accepted in the United States

and the standards applicable to financial statement audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States, the financial statements of

National Dairy Promotion and Research Board (NDB), which comprise the balance sheets as of

December 31, 2018 and 2017, and the related statements of activities and cash flows for the years

then ended, and the related notes to the financial statements, and have issued our report, with an

unmodified opinion thereon, dated May 3, 2019.

In connection with our audit, nothing came to our attention that caused us to believe that NDB

failed to comply with the items listed below insofar as they relate to accounting matters. However,

our audit was not directed primarily toward obtaining knowledge of such noncompliance.

Accordingly, had we performed additional procedures, other matters may have come to our

attention regarding NDB’s noncompliance with the below referenced items, insofar as they relate

to accounting matters.

• Provisions of laws, regulations, contracts, and grant agreements, noncompliance with

which could have a direct and material effect on the determination of 2018 financial

statement amounts, as described below:

– Dairy Promotion and Research Order, revised as of May 22, 2012, Section 1150.154,

which requires that funds shall not be used for the purpose of influencing government

policy or action, which is defined in USDA Guidelines for Agricultural Marketing

Service (AMS) Oversight of Commodity Research and Promotion Programs, Section

VII, Influencing Legislation and/or Government Policy, as any action the principal

purpose of which is to bring about a change in existing policy or regulation or affect

the outcome of proposed policy or regulation, except those actions that are specifically

provided for.

– Dairy Promotion and Research Order, revised as of May 22, 2012, Section

1150.153(b)(1), which requires that a qualified program must conduct promotion,

research and nutrition education activities, as defined in Sections 1150.114, 1150.115,

and 1150.116, which are intended to increase consumption of milk and dairy products

generally.

1901-3012757 1
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

– NDB Policy Guidelines, which require the NDB Board to approve capital and operating

budgets.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section II, Budget Approval, which requires the U.S. Department of

Agriculture (USDA) to review and approve all budgets. When submitting budgets for

approval, NDB is required to include detailed information regarding administrative

expenses and other costs. Budget submissions are required to include five specific

components that are listed in this section.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section II, Budget Approval, which requires NDB’s Board to review and

approve NDB’s annual budget before submitting to AMS for its approval prior to

obligating any funds.

– NDB Policy Guidelines, which require that a written contract signed by the Board and

contractor and approved by USDA is required for all work performed. No payment is

to be authorized until the contract is signed by both parties and approved by the USDA.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section V, Financial, Compliance, and Program Accountability,

Subsection D, Annual Financial Audits, which requires NDB’s Board to have

independent audits performed annually in accordance with Government Auditing

Standards. In addition, funds are to be used only for projects and other expenses

authorized in a budget approved by the USDA.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section V, Financial, Compliance, and Program Accountability,

Subsection F, Independent Evaluation, which requires NDB’s Board to conduct an

independent evaluation of the effectiveness of the promotion programs every five years

and to make the report available to assessment payers and the AMS.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section V, Financial, Compliance, and Program Accountability,

Subsection G, Travel Expense Claims, which requires NDB’s Board to establish travel

policies and procedures, approved by AMS, including the individual(s) designated to

approve travel. Policies and procedures are required to address and incorporate 12

specific items that are listed in the subsection.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section V, Financial, Compliance, and Program Accountability,

Subsection H, Credit Card Use, which requires NDB’s Board to establish procedures

for the use of such cards and have internal controls in place and approved by AMS.

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Credit card procedures established by NDB’s Board are required to include ten specific

procedures listed in the subsection.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section XI, Administration, Subsection B, Investment of Funds, which

requires NDB’s Board to follow AMS’ investment policy, as described in Directive

2210.2, Investment of Public Funds, dated May 1, 1998, included in Appendix 3 of

USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, which requires investments to be short-term, risk-free, and interest-bearing

instruments with maturity periods of one year or less; federally insured or fully

collateralized; and fully secured.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section XI, Administration, Subsection F, Prohibited Expenditures, which

states that NDB’s Board may not spend assessment funds for spouse and family

expenses, open bars, influencing government policy or action, and personal expenses.

– USDA Guidelines for AMS Oversight of Commodity Research and Promotion

Programs, Section XI, Administration, Subsection G, Board Donations, which states

that NDB’s Board is required to develop a written policy statement regarding donations

utilizing funds derived from assessments. In general, the NDB Board is precluded from

making financial and gift contributions to any organization. The written policy

established by NDB’s Board is required to include five specific areas, as listed in the

subsection.

• Establishment and maintenance of effective internal control over financial reporting, such

that there is a reasonable possibility that a material misstatement of the 2014 financial

statements would be prevented, detected, and corrected on a timely basis.

This report is intended solely for the information and use of management and the Board of

Directors of National Dairy Promotion and Research Board and the U.S. Department of

Agriculture and is not intended to be and should not be used by anyone other than the specified

parties.

May 3, 2019

1901-3012757 3
National Fluid Milk Processor

Promotion Board

Financial Statements

and

Independent Auditor’s Report

Years Ended December 31, 2018 and 2017
 

 

 

 

 

Part I

Financial Statements and Independent Auditor’s

Report for the Years Ended December 31, 2018 and 

2017 

Part II

Independent Auditor's Report on Internal Control Over

Financial Reporting and on Compliance and Other 

Matters Based on an Audit of Financial Statements 

Performed in Accordance with Government Auditing

Standards 

Part III

Independent Auditor’s Comments on Compliance with 

Government Auditing Standards
PART I
 

 

 

 

 

 

 

 

 

 

Table of Contents

Independent Auditor’s Report .................................................................................. 1-2 

Financial Statements:

Statements of Financial Position ............................................................................. 3 

Statements of Revenues, Expenses and Changes in Net Assets .......................... 4 

Statements of Cash Flows ....................................................................................... 5 

Notes to Financial Statements................................................................................. 6-14

Supplementary Information:

Schedules of Actual Compared to Budget:

Revenues and Expenses (Budget Basis) ........................................................... 16

Program Expenses (Budget Basis) ..................................................................... 17

Administrative Expenses (Budget Basis) ............................................................ 18

Schedule of Cash Receipts and Disbursements..................................................... 19
 

Independent Auditor’s Report 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Washington, D.C. 

Report on the Financial Statements

We have audited the accompanying financial statements of the National Fluid Milk Processor Promotion 

Board, which comprise the statements of financial position as of December 31, 2018 and 2017, and the related

statements of revenues, expenses and changes in net assets, and cash flows for the years then ended, and 

the related notes to the financial statements. 

Management's Responsibility for the Financial Statements 

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with accounting principles generally accepted in the United States of America; this includes the 

design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of 

financial statements that are free from material misstatement, whether due to fraud or error. 

Auditor's Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted 

our audits in accordance with auditing standards generally accepted in the United States of America and the 

standards applicable to financial audits contained in Government Auditing Standards, issued by the 

Comptroller General of the United States. Those standards require that we plan and perform the audits to 

obtain reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditor's judgment, including the assessment of 

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those 

risk assessments, the auditor considers internal control relevant to the entity's preparation and fair 

presentation of the financial statements in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal 

control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of 

accounting policies used and the reasonableness of significant accounting estimates made by management, 

as well as evaluating the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 

audit opinion. 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial 

position of the National Fluid Milk Processor Promotion Board as of December 31, 2018 and 2017, and the 

results of its operations and its cash flows for the years then ended in conformity with accounting principles 

generally accepted in the United States of America. 
 

 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Page two 

Report on Supplementary Information 

Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. 

The accompanying supplementary information shown on pages 16 through 19 is presented for purposes of 

additional analysis and is not a required part of the financial statements. Such information is the responsibility

of management and was derived from and relates directly to the underlying accounting and other records used 

to prepare the financial statements. The information, other than the budget amounts, has been subjected to 

the auditing procedures applied in the audit of the financial statements and certain additional procedures, 

including comparing and reconciling such information directly to the underlying accounting and other records 

used to prepare the financial statements or to the financial statements themselves, and other additional 

procedures in accordance with auditing standards generally accepted in the United States of America. In our 

opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. 

Budget amounts have not been subjected to the auditing procedures applied in the audits of the financial 

statements, and accordingly, we do not express an opinion or provide any assurance on these amounts. 

Report Issued in Accordance with Government Auditing Standards 

In accordance with Government Auditing Standards, we have also issued a report dated April 1, 2019 on our 

consideration of the National Fluid Milk Processor Promotion Board's internal control over financial reporting 

and on our tests of its compliance with certain provisions of laws, regulations, contracts, agreements, and 

other matters. The purpose of this report is to describe the scope of our testing of internal control over 

financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal

control over financial reporting or on compliance. This report is an integral part of an audit performed in 

accordance with Government Auditing Standards and should be considered in assessing the results of our 

audits. 

SNYDER COHN, PC 

North Bethesda, Maryland 

April 1, 2019 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Statements of Financial Position

December 31 2018 2017

Assets

Current assets:

Cash and cash equivalents $ 12,275,887 $ 13,906,998

Assessments receivable, net 8,563,992 8,831,113

Future year costs 1,650,563 3,726,203

Prepaid expenses 75,008 75,689

Other receivables 19,271 -

Total current assets 22,584,721 26,540,003

Property and equipment, net 27,034 37,202

Total assets $ 22,611,755 $ 26,577,205

Liabilities and net assets

Current liabilities:

Accounts payable and accrued expenses $ 10,901,612 $ 12,531,651

Coupon liability 592,516 449,604

Capital lease, current portion 6,664 7,252

Total current liabilities 11,500,792 12,988,507

Other liabilities:

Capital lease, net of current portion - 6,664

Total liabilities 11,500,792 12,995,171

Commitments

Net assets:

Board designated for contingencies 2,500,000 2,500,000

Undesignated 8,610,963 11,082,034

Total net assets 11,110,963 13,582,034

Total liabilities and net assets $ 22,611,755 $ 26,577,205

See Accompanying Notes

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National Fluid Milk Processor Promotion Board

Statements of Revenues, Expenses and Changes in Net Assets

For the years ended December 31 2018 2017

Revenues:

Assessments $ 89,007,314 $ 91,664,161

Late payment charges 35,844 22,811

Interest income 48,133 49,032

Other 818 236,118

Total revenues 89,092,109 91,972,122

Expenses:

Program expenses:

Meals at home 67,307,924 68,960,076

Built with chocolate milk 11,085,494 11,309,361

Strategy and market research 2,423,790 2,640,281

Total program expenses 80,817,208 82,909,718

Other expenses:

California grant 7,843,127 8,201,379

Administrative 2,309,019 1,964,224

USDA oversight 477,105 473,949

USDA compliance audit 115,578 123,989

Interest expense 1,143 1,878

Total other expenses 10,745,972 10,765,419

Total expenses 91,563,180 93,675,137

Excess of expenses over revenues (2,471,071) (1,703,015)

Net assets - beginning 13,582,034 15,285,049

Net assets - ending $ 11,110,963 $ 13,582,034

See Accompanying Notes

4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Statements of Cash Flows

For the years ended December 31 2018 2017

Cash flows from operating activities:

Excess of expenses over revenues $ (2,471,071) $ (1,703,015)

Adjustments to reconcile excess of

expenses over revenues to net cash

provided by (used in) operating activities:

Depreciation and amortization 12,784 11,102

(Increase) decrease in:

Assessments receivable 267,121 403,133

Future year costs 2,075,640 (2,467,561)

Prepaid expenses 681 918

Other receivables (19,271) -

Increase (decrease) in:

Accounts payable and accrued expenses (1,630,039) 5,738,843

Coupon liability 142,912 (150,446)

Net cash provided by (used in) operating activities (1,621,243) 1,832,974

Cash flows from investing activities:

Payments made for property and equipment (2,616) (25,151)

Cash flows from financing activities:

Payments made on capital lease (7,252) (6,517)

Net increase (decrease) in cash and

cash equivalents (1,631,111) 1,801,306

Cash and cash equivalents - beginning 13,906,998 12,105,692

Cash and cash equivalents - ending $ 12,275,887 $ 13,906,998

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Interest $ 1,143 $ 1,878

See Accompanying Notes

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National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 1: Summary of significant accounting policies:

The National Fluid Milk Processor Promotion Board (the Board) was established 

pursuant to the authority of the Fluid Milk Promotion Act (the Act) of 1990, Subtitle H of

the Title XIX of the Food, Agriculture, Conservation and Trade Act of 1990. The purpose

of the Board is to administer the provisions of the Fluid Milk Promotion Order (the Order)

established pursuant to the Act which establishes an orderly procedure for the 

development, and the financing through an assessment, of a coordinated program of

advertising, promotion, and education for fluid milk products.

The Act required that a referendum be conducted among processors to determine if a 

majority favored implementing the fluid milk program. In the October 1993 initial 

referendum, the majority of processors voted to approve the implementation of the fluid 

milk program. A continuation referendum was held in February-March 1996. Of the

processors voting in that referendum, the majority favored continuation of the fluid milk 

program. In November 1998, another continuation referendum was held at the request

of the Board and processors voted to continue the fluid milk program as established by

the Order. The Act and the Order state that the United States Department of Agriculture

(USDA) will hold future referenda upon the request of the Board, processors 

representing 10% or more of the volume of fluid milk products marketed by those 

processors voting in the last referendum, or when called by the U.S. Secretary of

Agriculture.

For financial reporting purposes, the Board is considered a quasi-governmental agency

of the U.S. government. As such, it is exempt from income taxes under the Internal 

Revenue Code. The USDA and its affiliated agencies operate in an oversight capacity

of the Board.

The financial statements of the Board are prepared in conformity with accounting 

principles generally accepted in the United States of America. To facilitate the

understanding of data included in the financial statements, summarized below are the 

more significant accounting policies.

Assessments - Assessments are generated from any person who processes and 

markets commercially more than 3,000,000 pounds of fluid milk per month by a 20-cent

per hundred weight assessment on fluid milk products processed and marketed 

commercially in consumer-type packages in the 48 contiguous United States and the

District of Columbia. Assessment revenue is recognized in the month in which the fluid 

milk product is processed. Late payment charges are assessed, as provided under the 

Act, to processors who do not remit monthly assessments within 30 days following the

month of assessment.

6 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 1: Summary of significant accounting policies: (continued)

Assessments (continued) - The late payment charge is equal to 1.50% of unpaid 

assessments and accrues monthly. For both 2018 and 2017, an allowance for doubtful 

accounts of $-0- has been established for those amounts where the late charges are 

being appealed.

California grant - In accordance with the Act, the Board is required to provide a grant to a

third party equal to 80% of the assessments collected from Regions 14 and 15 to 

implement a fluid milk promotion campaign. Disbursements under these provisions are 

recorded as “California grant” in the accompanying financial statements.

Cash equivalents - For purposes of the statements of cash flows, the Board considers all

highly liquid investments with an original maturity of three months or less to be cash 

equivalents.

Future year costs - Future year costs represent costs incurred for the next budget year‘s 

projects.

Assessments receivable - An allowance for uncollectible accounts is established for 

those assessments which management has determined as uncollectible. The total

allowance for uncollectible accounts at December 31, 2018 and 2017 was $-0-.

Property and equipment - Property and equipment are stated at cost. Depreciation is 

provided over the estimated useful lives of the related assets on a straight-line basis.

Expenditures for repairs and maintenance are charged to expense as incurred.

Use of estimates - The Board has made certain estimates and assumptions that affect

the reported amounts of assets and liabilities and the disclosure of contingent assets

and liabilities at the date of the financial statements, and the reported amounts of

revenue and expenses during the period. Actual results could differ from those 

estimates.

Investments - The Board is required to follow the Agricultural Marketing Service (AMS) 

investment policy. Accordingly, the Board is authorized to invest in securities consisting

of obligations issued or fully insured or guaranteed by the U.S. or any U.S. government

agency, including obligations of government-sponsored corporations that mature within

one year or less from the date of purchase.

7 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 1: Summary of significant accounting policies: (continued)

Fair value measurements - The FASB Accounting Standards Codification (ASC) 820,

Fair Value Measurements and Disclosures, provides the framework for measuring fair

value. That framework provides a fair value hierarchy that prioritizes the inputs to 

valuation techniques used to measure fair value. The hierarchy gives the highest priority

to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 

measurements) and the lowest priority to unobservable inputs (level 3 measurements).

The three levels of the fair value hierarchy under FASB ASC 820 are described as

follows:

Level 1 - inputs to the valuation methodology are unadjusted quoted prices for identical

assets or liabilities in active markets that the Board has the ability to access.

Level 2 - inputs to the valuation methodology include:

- quoted prices for similar assets or liabilities in active markets;

- quoted prices for identical or similar assets or liabilities in inactive markets;

- inputs other than quoted prices that are observable for the asset or liability;

- inputs that are derived principally from or corroborated by observable market data

by correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must be

observable for substantially the full term of the asset or liability.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair

value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is 

based on the lowest level of any input that is significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable inputs and minimize

the use of unobservable inputs.

The preceding methods described may produce a fair value calculation that may not be

indicative of net realizable value or reflective of future fair values. Furthermore, although

the Board believes its valuation methods are appropriate and consistent with other 

market participants, the use of different methodologies or assumptions to determine fair

value of certain financial instruments could result in a different fair value measurement at

the reporting date.

Advertising - In accordance with its mission, the Board has approved the development of

direct and nondirect response advertising and promotional activities. All costs related to

these activities are charged to expense as incurred.

8 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 2: Cash and cash equivalents:

At December 31, 2018 and 2017, the bank balance of the Board’s cash deposits was

entirely covered by federal depository insurance or was covered by collateral held by the

Board’s agent in the Board’s name. Included in cash and cash equivalents is 

$2,500,000 of Board designated cash reserves (net assets without donor restriction) at

December 31, 2018 and 2017.

Note 3: Property and equipment:

Property and equipment consist of the following as of December 31:

2018 2017 

Furniture and fixtures $ 30,261 $ 30,261 

Leasehold improvements 159,941 159,941 

Office equipment 122,374 119,758 

312,576 309,960 

Less: accumulated depreciation (285,542) (272,758)

$ 27,034 $ 37,202 

Depreciation expense for the years ended December 31, 2018 and 2017 was $12,784

and $11,102, respectively.

Note 4: Capital lease:

In October 2014, the Company exchanged its 2012 copier for a new copier by entering 

into a new capital lease with an effective interest rate of 10.73%. The terms of the lease 

require 60 monthly payments of $700, plus additional usage charges as outlined in the 

agreement. The lease is effective through October 1, 2019.

9 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 4: Capital lease: (continued)

Future minimum lease payments under the capital lease are as follows:

2019 minimum lease payment $ 6,996 

Less amount representing interest (332)

Present value of minimum lease payment $ 6,664

Note 5: Line of credit:

During December 2011, the Board obtained a revolving line of credit for up to

$2,500,000. The line provides for advances from time to time, but must be paid down to 

$-0- and remain at $-0- for 90 consecutive days at least once every 12 months. Interest

is accrued on outstanding balances at prime minus 0.25% with an interest floor of

5.25%. The line is secured by a first position lien on all receivables of the Board and all 

general intangibles. The Board is also subject to reporting requirements and financial 

covenants as outlined in the line of credit agreement. The line of credit agreement

expires in January 2021. The amount outstanding on the line of credit at December 31,

2018 and 2017 was $-0-.

Note 6: Compliance matters:

In accordance with the Act and the Order, effective one year after the date of the 

establishment of the Board, the Board shall not spend in excess of 5% of the

assessments collected for the administration of the Board. For the years ended

December 31, 2018 and 2017, the Board did not exceed this limitation.

10
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 7: Program administration:

During 2018 and 2017, the Board entered into agreements with various organizations to

develop programs for advertising, promotion, consumer education and certain minority

initiatives in connection with the national fluid milk campaign. The funding levels vary for

the various organizations and are subject to approval. The organizations and the 

expiration dates of the agreements are as follows:

Agency Expiration 

Foote, Cone, & Belding Terminated 2017

Campbell-Ewald Until Terminated

CMGRP, Inc. d/b/a Weber Shandwick Until Terminated

Arc USA Chicago January 31, 2020

To assist the above organizations in the development of advertising, promotion,

consumer education and certain minority initiatives in connection with the national fluid 

milk campaign, the Board has also entered into numerous other smaller contracts

throughout the years ended December 31, 2018 and 2017. In addition, the Board has 

three master service agreements with three contractors which allow for scopes of work 

to be attached on an as needed basis by the Board.

In October 2007, the Board entered into two agreements, an office services and a 

professional services agreement, with the International Dairy Foods Association (IDFA).

The duration of the office services agreement was from October 1, 2007 through 

September 30, 2008 and was subsequently extended multiple times through December

31, 2019. Under this agreement, IDFA provides certain administrative services and 

resources to the Board. Fees for these services are based on predetermined amounts

totaling $3,370 and $4,370 per month plus out-of-pocket costs and hourly charges for 

additional services for years ended December 31, 2018 and 2017, respectively. During 

the years ended December 31, 2018 and 2017, the Board incurred fees in the amount of

$40,870 and $54,270, respectively, under this agreement.

11
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 7: Program administration: (continued)

The duration of the professional services agreement was from October 1, 2007 through 

September 30, 2009 and was subsequently extended multiple times. The current

agreement is effective until December 31, 2019. The agreement allows for IDFA to 

assist the Board in performing general services pursuant to its responsibility under the 

Fluid Milk Promotion Act of 1990. General services are set forth in greater detail in the 

agreement, but include areas such as:

 Medical and nutritional 

 Communications and public relations 

 Sales and econometric analysis

 Other services as requested

Fees for these services are based on hourly rates of $360 plus out-of-pocket costs.

Total costs incurred under this agreement were $16,699 and $17,931 for the years 

ended December 31, 2018 and 2017, respectively.

12
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 8: Operating lease:

In October 2007, the Board entered into a sublease agreement with IDFA, which has 

been extended through May 31, 2022. Under the terms of the sublease, the Board is 

required to pay escalating monthly base rent plus additional monthly charges equal to a 

pro rata portion of the building’s operating expenses and other charges as defined in the

sublease agreement. From January 1, 2019 through March 1, 2019, the Board shall 

have a sixty day window within which it can terminate the sublease by providing nine

months’ notice. If the Fluid Milk Promotion Order, 7 C.F.R. Part 1160 (the “Fluid Milk

Order”), is terminated for any reason, then the sublease shall automatically terminate six

months from the date that the U.S. Secretary of Agriculture announces that the Fluid Milk

Order will be terminated. In the event of termination, monthly rent payments will increase

up to the termination date as outlined in the agreement.

The future minimum payments under this sublease for the years ending December 31 

are as follows:

2019 $ 170,816

2020 175,941

2021 181,219

2022 67,875

Total $ 595,851

The Board incurred $165,841 and $161,012 of rental expense during the years ended 

December 31, 2018 and 2017, respectively.

Note 9: Transactions with the United States Department of Agriculture:

Under the provisions of the Act and the Order, the Board is required to pay the United

States Department of Agriculture certain fees for oversight and evaluation costs. These

costs were $592,683 and $597,938 during 2018 and 2017, respectively.

Note 10: Related party activity:

Accounting services for the Board are performed by The Colony Group, LLC (The 

Colony Group). The agreement is effective through December 31, 2022. The costs of

accounting services were $386,250 during 2018 and 2017. A principal of The Colony

Group serves as the Chief Financial Officer of the Board, for which The Colony Group is

compensated. At December 31, 2018 and 2017, the total amount due to The Colony

Group was $-0-.

13
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Notes to Financial Statements 

December 31, 2018 and 2017 

Note 11: Retirement plan:

In October 2007, the Board adopted a safe harbor 401(k) plan. An employee is eligible 

to participate in the plan once the service requirement is completed as defined in the

plan document. If an employee was employed by the Board on October 1, 2007, the

service requirement was waived and those employees were immediately eligible to

participate. Participants may elect to defer a portion of their salary and contribute it to 

the retirement plan. Additionally, the Board will make a safe harbor matching 

contribution equal to 100% of deferrals that do not exceed 3% of the employees’ 

compensation plus a 50% match for deferrals between 3% - 5% of employees’ 

compensation. However, for any plan year when the plan is not a “safe harbor” plan, the

contribution is at the Board’s discretion. The Board's contribution totaled $141,645 and 

$118,882 for the years ended December 31, 2018 and 2017, respectively.

Note 12: Concentration:

Accounts payable to two vendors represented approximately 80% of total accounts

payable at December 31, 2018. Payments to these vendors represented approximately

91% of total program expenses for the year ended December 31, 2018.

Accounts payable to three vendors represented approximately 86% of total accounts

payable at December 31, 2017. Payments to two of these vendors represented

approximately 85% of total program expenses for the year ended December 31, 2017.

Note 13: Subsequent events:

Subsequent events have been evaluated through April 1, 2019, which is the date the 

financial statements were available to be issued.

14
SUPPLEMENTARY

INFORMATION 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Schedule of Revenues and Expenses

Actual Compared to Budget

(Budget Basis)

For the year ended December 31, 2018

Unexpended/ Actual

Amended Current Year Over (Under)

Budget Actual Budget

(Unaudited)

Revenues:

Assessments $ 90,000,000 $ 89,007,314 $ (992,686)

Late payment charges - 35,844 35,844

Interest income - 48,133 48,133

Other - 818 818

Total revenues 90,000,000 89,092,109 (907,891)

Expenses (refunds):

Program expenses (refunds):

Program - current year 83,538,250 80,946,139 (2,592,111)

Program - prior years 1,294,969 (128,931) (1,423,900)

Total program expenses, net 84,833,219 80,817,208 (4,016,011)

Other expenses:

California grant 8,100,000 7,843,127 (256,873)

Administrative 2,184,750 2,309,019 124,269

USDA expenses 575,000 592,683 17,683

Interest expense 2,000 1,143 (857)

Total other expenses 10,861,750 10,745,972 (115,778)

Total expenses, net 95,694,969 91,563,180 (4,131,789)

Excess of expenses over revenues $ (5,694,969) $ (2,471,071) $ 3,223,898

See Independent Auditor's Report

16
 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Schedule of Program Expenses

Actual Compared to Budget

(Budget Basis)

For the year ended December 31, 2018 

Current Year Expended Actual Prior Year Expended Actual Total

Amended Current Year Over (Under) Unexpended (Refunds) Prior Over (Under) Program

Budget Actual Budget Budget Year Actual Budget Activity

(Unaudited) (Unaudited)

Meals at home $ 68,656,000 $ 67,636,324 $ (1,019,676) $ 923,177 $ (328,400) $ (1,251,577) $ 67,307,924

Built with chocolate milk 11,322,000 11,062,224 (259,776) 277,346 23,270 (254,076) 11,085,494

Strategy and market research 2,500,000 2,247,591 (252,409) 94,446 176,199 81,753 2,423,790

Unallocated/opportunistic 1,060,250 - (1,060,250) - - - -

Total program expenses $ 83,538,250 $ 80,946,139 $ (2,592,111) $ 1,294,969 $ (128,931) $ (1,423,900) $ 80,817,208

See Independent Auditor's Report 

17 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Schedule of Administrative Expenses

Actual Compared to Budget

(Budget Basis)

For the year ended December 31, 2018 

Current Year Actual

Amended Current Year Over (Under)

Budget Actual Budget

(Unaudited)

Board meeting expenses $ 200,000 $ 208,063 $ 8,063

Staff salaries and benefits:

Staff salaries and benefits 1,664,000 1,573,725 (90,275)

Program management salary

allocation (1,350,000) (1,043,903) 306,097

Total staff salaries and benefits 314,000 529,822 215,822

Finance and administration:

Contract staff 160,000 160,000 -

Consultants - HR, IT, strategic 84,000 123,752 39,752

Financial services 386,250 386,250 -

Total finance and administration 630,250 670,002 39,752

Other operating expenses:

Audits 65,000 60,079 (4,921)

Depreciation 10,000 12,784 2,784

Dues and memberships 16,000 17,000 1,000

Employee development 20,000 22,560 2,560

IDFA professional & office support 50,000 38,156 (11,844)

Insurance 40,000 40,214 214

Legal 410,000 291,412 (118,588)

Miscellaneous 2,500 525 (1,975)

Office facilities 160,000 165,841 5,841

Office supplies and expense 21,000 13,833 (7,167)

Payroll service and

pension administration 6,000 5,628 (372)

Postage and delivery 10,000 10,369 369

Recruiting expense - 360 360

Staff travel 205,000 199,288 (5,712)

Telephone 25,000 23,083 (1,917)

Total other operating expenses 1,040,500 901,132 (139,368)

Total administrative expenses $ 2,184,750 $ 2,309,019 $ 124,269

See Independent Auditor's Report

18 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Fluid Milk Processor Promotion Board

Schedule of Cash Receipts and Disbursements

For the year ended December 31, 2018

Cash receipts from operations:

Assessments $ 89,255,164

Late payment charges 35,844

Interest income 48,133

Other 818

Cash receipts from operations 89,339,959

Cash disbursements for operations (90,961,202)

Cash disbursements for investing activities:

Purchase of property and equipment (2,616)

Cash disbursements for financing activities:

Payments made on capital lease (7,252)

Excess of disbursements over reciepts (1,631,111)

Cash and cash equivalents - beginning 13,906,998

Cash and cash equivalents - ending $ 12,275,887

See Independent Auditor's Report 

19
PART II
 

 

 

Independent Auditor's Report on Internal Control 

Over Financial Reporting and on Compliance and Other Matters 

Based on an Audit of Financial Statements Performed in Accordance 

with Government Auditing Standards 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Washington, D.C. 

We have audited, in accordance with auditing standards generally accepted in the United States of 

America and the standards applicable to financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States, the financial statements of the 

National Fluid Milk Processor Promotion Board (the Board) which comprise the statements of 

financial position as of December 31, 2018 and 2017, and the related statements of revenues, 

expenses and changes in net assets, and cash flows for the years then ended, and the related 

notes to the financial statements and have issued our report thereon dated April 1, 2019. 

Internal Control Over Financial Reporting 

In planning and performing our audits of the financial statements, we considered the Board’s 

internal control over financial reporting (internal control) to determine the audit procedures that are 

appropriate in the circumstances for the purpose of expressing our opinion on the financial 

statements, but not for the purpose of expressing an opinion on the effectiveness of the Board’s 

internal control. Accordingly, we do not express an opinion on the effectiveness of the Board’s 

internal control. 

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent,

or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or 

combination of deficiencies, in internal control, such that there is a reasonable possibility that a 

material misstatement of the Board’s financial statements will not be prevented, or detected and 

corrected on a timely basis. A significant deficiency is a deficiency, or a combination of 

deficiencies, in internal control that is less severe than a material weakness, yet important enough 

to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of 

this section and was not designed to identify all deficiencies in internal control that might be material

weaknesses or significant deficiencies. Given these limitations, during our audits we did not identify

any deficiencies in internal control that we consider to be material weaknesses. However, material 

weaknesses may exist that have not been identified. 
 

 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Page two 

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the Board’s financial statements are free 

of material misstatement, we performed tests of its compliance with certain provisions of laws, 

regulations, contracts, and agreements, noncompliance with which could have a direct and material 

effect on the determination of financial statement amounts. However, providing an opinion on 

compliance with those provisions was not an objective of our audits, and accordingly, we do not 

express such an opinion. The results of our tests disclosed no instances of noncompliance or other 

matters that are required to be reported under Government Auditing Standards. 

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of internal control and 

compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 

Board's internal control or on compliance. This report is an integral part of an audit performed in 

accordance with Government Auditing Standards in considering the Board's internal control and 

compliance. Accordingly, this communication is not suitable for any other purpose. 

This report is intended solely for the information of the Board of Directors of the National Fluid Milk 

Processor Promotion Board, management, and the Dairy Programs, Promotion and Research 

Branch of the Agricultural Marketing Service Agency of the United States Department of Agriculture, 

and is not intended to be and should not be used by anyone other than these specified parties. 

SNYDER COHN, PC 

North Bethesda, Maryland 

April 1, 2019 
PART III
 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Washington, D.C. 

We have audited, in accordance with auditing standards generally accepted in the United States of 

America and the standards applicable to financial statement audits contained in Government 

Auditing Standards issued by the Comptroller General of the United States, the financial statements 

of the National Fluid Milk Processor Promotion Board which comprise the statements of financial 

position as of December 31, 2018 and 2017, and the related statements of revenues, expenses and 

changes in net assets, and cash flows for the years then ended, and the related notes to the 

financial statements and have issued our report thereon dated April 1, 2019 The financial 

statements were prepared in conformity with accounting principles generally accepted in the United 

States of America. 

In connection with our audits, nothing came to our attention, insofar as it relates to accounting 

matters, that causes us to believe that the National Fluid Milk Processor Promotion Board: 

 Failed to comply with laws and regulations applicable to the National Fluid Milk Processor

Promotion Board;

 Failed to comply with Section 1160.212 of the Fluid Milk Promotion Order, relating to the

use of assessment funds for the purpose of influencing governmental policy or action;

 Expended assessment funds for purposes other than those authorized by the Fluid Milk

Promotion Act and the Fluid Milk Promotion Order;

 Expended or obligated assessment funds on any projects prior to the fiscal year in which

those funds were authorized to be expended by the National Fluid Milk Processor

Promotion Board’s approved Budget and Marketing Plan;

 Did not adhere to the original or amended Budget and Marketing Plan for the years ended

December 31, 2018 and 2017;

 Did not obtain a written contract or agreement with any person or entity providing goods or

services to the National Fluid Milk Processor Promotion Board;

 Failed to comply with Section 1999H, paragraph (g) of the Fluid Milk Promotion Order,

relating to the limitations on the types of investments which may be purchased by the

National Fluid Milk Processor Promotion Board and the insurance or collateral that must be

obtained for all National Fluid Milk Processor Promotion Board deposits and investments;
 

To the Board of Directors 

National Fluid Milk Processor 

Promotion Board 

Page two 

 Failed to comply with internal controls; 

 Failed to comply with disclosure requirements for lease commitments; 

 Failed to comply with standards established requiring signed contracts, USDA approval 

letters (if necessary), contract term documentation within the file, and CFO’s signature on 

the Board approval letter; 

 Failed to comply with the by-laws of the National Fluid Milk Processor Promotion Board or 

any other policy of the National Fluid Milk Processor Promotion Board, specifically as they 

relate to all financial matters, including time and attendance, and travel; or 

 Failed to comply with USDA guidelines for AMS Oversight of Commodity Research and 

Promotion Programs. 

During the course of our audits, no compliance matters came to our attention, insofar as it relates to 

the USDA guidelines for AMS Oversight of Commodity Research and Promotion Programs. 

However, our audits were not directed primarily toward obtaining knowledge of such 

noncompliance. 

This report is intended solely for the information and use of the National Fluid Milk Processor 

Promotion Board, management, and the Dairy Programs, Promotion and Research Branch of the 

Agricultural Marketing Service Agency of the United States Department of Agriculture and is not 

intended to be and should not be used by anyone other than these specified parties. 

SNYDER COHN, PC 

North Bethesda, Maryland 

April 1, 2019 
Snyder Cohn, PC 

CPAs and Trusted Advisors 

11200 Rockville Pike, Suite 415 

North Bethesda, MD 20852 

www.snydercohn.com 

301-652-6700