Northeast Dairy Magazine | Q1 2020

MARKETING

MilkPEP Strategies

First Quarter 2020

MEMBER PROFILE

Holland Farms

EDUCATION

Virtual Farm Tours

BUSINESS

Family Succession Planning

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contents

First Quarter • Spring 2020 • Volume 3, No. 1

FEATURES

KEEPING THE DAIRY CASE RELEVANT

FRONT DESK 03

PRESIDENT’S MESSAGE: NDFA Dairy Isn’t Going Anywhere

05

BY MIKE SUEVER

NDSA MESSAGE

Spring/Summer Has Plenty to Offer

BY OZZIE ORSILLO

06

EXECUTIVE VP MESSAGE Thanks, Bob!

BY BRUCE W. KRUPKE

08

Who Drinks Milk Anymore?

BY CAROLINE K. REFF

13

28

Is Sugar the Villain?

30

MilkPEP Offers Strategic Campaigns

23

Kids Are Saying No

24

32

MilkPEP Initiatives

Milk Purchases

BY CAROLINE K. REFF

26

PA Offers Processors Re-labeling Options

32

Support the Great American Milk Drive

27

34

Hoods Says Oat Milk Is Answering Consumer Need

LEGISLATIVE REPORT Let Representatives Know Where You Stand

18

Virtual Tours Educate Students on Industry

MEMBER NEWS

BY BRUCE W. KRUPKE

ECONOMIC REPORT Trade Agreement Could Mean Good News

36

BY BY GARY LATTA

38

STAY CONNECTED

39

43

Welcome New Members

44

Member and Industry News

BY CAROLINE K. REFF

46

E-Newsletter Revamped

Be The Next NDFA Customer Of The Year

49

NYS Moves to Make Alcohol Legal in Ice Cream

Scholarships Available Now

40 www.nedairyfoods.org www.neastda.org

MEMBER PROFILE The Women of Holland Farms

BY ALEX WALSH

lant Tour Has Record P Attendance

BY ALEX WALSH

427 S. MAIN ST, NORTH SYRACUSE, N.Y. 13212 315-452-MILK (6455)

NED Magazine | First Quarter 2020 • 1

contents

First Quarter • Spring 2020 • Volume 3, No. 1

NORTHEAST DAIRY FOODS ASSOCIATION, INC. EXECUTIVE VICE PRESIDENT

Bruce W. Krupke

EXECUTIVE ASSISTANT

Leanne Ziemba

DIRECTOR OF MEMBERSHIP AND COMMUNICATIONS

Alex Walsh PRESIDENT

Mike Suever HP Hood, LLC

VICE PRESIDENT

Daniel R. Lausch Lactalis America Groups, Inc. TREASURER

Michael P. Young Guida’s Dairy SECRETARY

Rick Sedotto Midland Farms

NORTHEAST DAIRY SUPPLIERS ASSOCIATION, INC. PRESIDENT

TREASURER

VICE PRESIDENT

SECRETARY

Ozzie Orsillo Evergreen Packaging Co. Bill Elliott Northeast Great Dane

Melissa Fryer Alfa Laval Ryan Osterhout KCO Resource Management

NORTHEAST DAIRY MAGAZINE TEAM WORKPLACE TOOLS OF THE TRADE 50

he Need for T Succession Planning

54

2020 State Tax Withholding Changes

EXECUTIVE EDITOR

Bruce W. Krupke bk@nedairyfoods.org PUBLISHER/DIRECTOR OF SALES

Bill Brod billbrod@nedairymedia.com EDITOR

BY GINA VONO

Caroline K. Reff creff@nedairymedia.com

Cheese Launches into Space

CONTENT DIRECTOR

What Cheese Can You Freeze?

GRAPHIC DESIGNER

56

OSHA Update

55

55

Steve Guglielmo Greg Minix

SALES

Tim Hudson thudson@nedairymedia.com Hannah Gray hannahg@nedairymedia.com CONTRIBUTORS

Gary Latta, Rick Schweitzer, Mike Suever, Gina Vono, Alex Walsh, Jason Woodruff PRODUCED BY

Northeast Dairy Media

Editorial correspondence should be directed to editor@nedairymedia.com.

Advertising correspondence and materials should be sent to billbrod@nedairymedia.com.

POSTMASTER: Send address changes to bk@nedairyfoods.org.

BY JASON WOODRUFF, CIH, CSP

58

rivers, Employees D Should Be Wary of CBD Product

BY RICK SCHWEITZER

An official magazine of the Northeast Dairy Foods Association, Inc., a nonprofit organization. This publication carries authoritative notices and articles in regard to the activities and interests of the associations. In all other respects, neither the association nor the producer of the publication, Northeast Dairy Media, is responsible for the contents thereof or the opinions of the contributors.

The entire contents are © 2020 by Northeast Dairy Media. Nothing may be reproduced in whole or in part without written permission of the publisher. The association and Northeast Dairy Media reserve the right to print portions or all of any correspondence mailed to the editors without liability on its part and no such correspondence will be returned.

Visit Northeast Dairy Foods Association online at nedairyfoods.org for current information on association programs and services, or call the association at 315-452-MILK (6455). Questions and comments may also be sent to the association at bk@nedairyfoods.org.

2 • Northeast Dairy Foods Association, Inc.

FrontDesk

Dairy Isn’t Going Anywhere, but We Need to Take Risks and Use Facts to Evolve

BY MIKE SUEVER, PRESIDENT, BOARD OF DIRECTORS, NDFA

I

n my role as president of the NDFA board of directors and in my capacity at Hood, I am constantly faced with many questions and concerns surrounding the idea that dairy consumption is becoming less and less relevant. While this might make great headlines, it is, in essence, a far cry from the truth. Think about it.

The dairy industry does a remarkable job of getting fresh nutritious products to every retail location in the entire country every day. Even in parts of our country considered “food deserts,” or areas where there are few, if any, nutritious products available, fresh fluid milk is almost always on the shelves.

So why is the word on the street that no one is drinking milk anymore? Everyone from the media to the anti-animal agriculture advocates seems to be taking shots at our industry, while spreading erroneous messages to the general public that the dairy case is to be avoided. These messages may make good headlines, but those of us in the industry know that there are plenty of milk myths that need to be debunked.

This issue of Northeast Dairy addresses this topic with some of our features. “Who Drinks Milk Anymore?” disproves some of the myths with solid statistics from the American Dairy Association and Dairy Management, Inc. — information that each of us can arm ourselves with as we advocate strongly for our industry. Another feature, “MilkPEP Offers Strategic Campaigns to Increase Consumption,” focuses on the efforts the organization is making to show that milk is fuel. Milk is nutrition. Milk is good for you! Even if you’re not specifically a milk processor, this article can help you spread this message — backed by scientists and nutritionists — and promote

Everyone from the media to the anti-animal agriculture advocates seems to be taking shots at our industry, while spreading erroneous messages to the general public that the dairy case is to be avoided.

— MIKE SUEVER

consumption of milk and other dairy products. Collectively, we need to focus on promoting the things that ARE great about milk — vitamins, minerals, protein and overall deliciousness. The nutrition drum is one that we should be beating loudly as an industry at a time when many are trying to push milk aside.

Dairy in itself isn’t going anywhere, but it does need to evolve and keep pace with consumer trends, tastes and buying habits. Unfortunately, due to outdated regulations (continued on next page) NED Magazine | First Quarter 2020 • 3

FrontDesk that cover things like package size, fat content and protein levels that trigger reclassification, the new-found “fear of sugar” over flavor, and standards of identity that force us to work within limits that are restrictive and very unique to our industry. We are trapped in a box of our own making, but only we can take the risk toward change. We need to stop falling into the “fluid milk marketing mindset,” shaking our heads every time we see a report that tells us that fewer consumers are lugging home a couple of gallons of milk each time they go to the grocery store. Certainly,

fluid milk is at the heart of our industry, but we need to be innovators. If consumers aren’t buying whole milk in gallon jugs, then what do they want? We need to find those answers and respond with other dairy options. Look at what an exceptional job the cheese segment of our industry has done in reinventing itself over and over again.

I hope you enjoy this issue of Northeast Dairy and that the ideas and concepts in these articles inspire you to help spark innovation and promote what’s great about milk and the dairy industry.

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4 • Northeast Dairy Foods Association, Inc.

solutions

services

FrontDesk

NDSA Has Plenty to Offer This Spring and Summer

BY OZZIE ORSILLO, PRESIDENT, NORTHEAST DAIRY SUPPLIERS ASSOCIATION

H

ere we are pulling out of another long, cold and dreary winter. One simple and old-fashioned beverage that made it bearable for me was hot chocolate made with real milk!

Now I am ready for spring and summer, as well as all the great events and programs our associations have in store for you.

Our board of directors has voted to make two changes to our popular scholarship program. First, we have increased the total scholarship offering from $15,000 to $20,000. The full amount will be awarded through 10 scholarships; five $2,500 scholarships to college students in dairy science programs and five $1,500 scholarships to college students in any major.

Secondly, we have opened up our scholarship program to both NDSA and NDFA members. That right’s, all members, members’ families and the employees and their families of both associations are eligible to apply for these valuable scholarships. This is one program our association is very proud to offer and is made possible only through the proceeds of our annual events and your participation. Thank you! Full details and an application can be viewed and downloaded at www.neastda.org.

This summer, we are hosting our annual Clambake at The Spinning Wheel at 7384 Thompson Rd. in North Syracuse, New York. As always, this event will be held on the second Wednesday of July, which happens to be July 8 this year. Mark your calendars now. Don’t miss out, as this is a must-attend event! To make it easier to attend, our

board of directors has lifted ticket purchasing restrictions.

Before now, tickets could only be purchased by members of the NDSA. This year and hereafter, tickets can also be directly purchased by members of the NDFA. Now you have no excuse not to join us for some delicious eats and a great day of networking and fun! Go to www.neastda.org to buy your tickets, and don’t forget to buy enough for your plant staff. This is a great opportunity to say thank you by treating your key managers and employees to a great day of golf at Rogue’s Roost, fun, food, socializing and outdoor competitive games. Clams, beer and pulled pork with all the people you enjoy being with…really, does it get any better?

See you there.

Later this summer, our partners at the Northeast Dairy Foods Association and Pennsylvania Association of Milk Dealers with be hosting their annual conference at the Mount Airy Casino Resort, Aug. 12 through Aug. 14. This event provides a fantastic networking opportunity for all members of the Northeast Dairy Suppliers Association (and is open to NDFA members, as well). Our venue this year at Mount Airy offers the best vendor exhibit area we have ever had. Exhibit space and attendee flow will provide you direct contact with the decision makers from your customers and prospects. Go to www.neastda.org to register for the conference and sign up for a display table. The success of this event always relies on the generosity of our sponsors, so please consider taking advantage of the many sponsor opportunities we have.

Enjoy our publication and, as always, thank you for your support.

NED Magazine | First Quarter 2020 • 5

FrontDesk

New York State Supreme Court Justice Robert Antonacci with his son, Bobby, left, wife Michelle, right center, and daughter, Jackie, right.

Thanks, Bob! Loyal Supporter of Association Moves on to New York State Supreme Court

BY BRUCE W. KRUPKE, EXECUTIVE VICE PRESIDENT, NDFA

2019 was certainly a very busy one for us from a legislative and lobbying perspective, and 2020 will be even more so. I’ll provide timely updates on lobbying and introduced laws and regulation to members during the legislative season (Take a look at my legislative report on page 8 of this issue).

Keep up-to-date on the laws affecting your state by utilizing our website’s “Member’s Only” legislative links to bills being introduced by individual states. Visit www.nedairyfoods.org, and sign in to learn more.

Ok, so who is Bob, and why am I thanking him? Well, it began more than 25 years ago when I first met Robert (Bob) E. Antonacci II when he graduated from Syracuse University’s law school in 1993 and passed the bar exam. I was hired by the Northeast Dairy Foods Association in January 1992, and one of my first initiatives later that year was to find a lawyer to assist us in our board meetings. For associations that ask members (many of whom are competitors) to sit in a room 6 • Northeast Dairy Foods Association, Inc.

and set policy, it is very important that there is legal counsel present to prevent any potential anti-trust conversations.

That is when our association’s board of directors took my recommendation to hire Bob as our legal counsel to help guide us. Who would have known at that time the trusted relationship that would develop over all these years and where it would take Bob on his career path?

Bob and I were much younger then and excited to get moving and active. We both shared the same vision to help revive the association and make it what it is today.

I remember when Bob attended our first convention after his hire. It was at a resort where they provided individual cabins. Well, Bob was assigned to one of these, and he happily agreed to host an after-dinner poker game with a bunch of our supplier members. He didn’t know how to play poker, and let me just say, the wolves were salivating. There were some good drinks and cigars introduced during the game,

but Bob was neither a drinker nor a cigar smoker. He was a good sport though when they all gave him the nickname “Esquire” and took him to the cleaners! I think we played past midnight, and we had a good time. Bob quickly learned to “fit in” with our members, and I could tell he would be a good fit for us.

One of the key qualities Bob has is his motivation. He graduated from Le Moyne College in 1987, obtaining his accounting degree and eventually his CPA accreditation.

Not only did I have a lawyer to rely on, but also having someone with an accounting background came in handy over the years. I eventually referred to him as the “boy wonder.”

Over time, Bob made it his job to learn about the dairy industry, the complex laws, regulations and Federal Milk Market Order system. He became a specialist, which really helped provide me with an extra ear and mind when complex issues arose.

The reason I’m thanking Bob is because, as of Dec. 31, 2019, he has moved on to even greater achievements. Over

the years, Bob had a desire to get into politics, so in 2008 he ran for Onondaga County (NY) comptroller and won. He served in that capacity for 10 years. Then, in 2018, he was asked to run for the New York State Senate 50th District seat and won that race, too. During his first year as a state senator, a New York State Supreme Court justice passed away, and his party asked him if he would consider running for that post. He accepted and won that race, as well. As a state Supreme Court justice, he has to resign all outside jobs and posts, thus leaving our association.

I have come to consider Bob a loyal associate and industry supporter, hard worker, confidant, professional, family man and great trusted friend. Our board members, staff and I will miss his advice and professional help.

I want to wish him and his family the very best as he now pursues his new path. He has been a great friend to our association, and, on behalf of our membership and board of directors, I want to say, “Thank you, Bob,” — and hopefully, we won’t see you in court!

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EXPERT COST VERIFICATION OF THE FOLLOWING EXPENSES: Electric • Gas • Water • Sewer • Local and Long Distance • Cell/Wireless • Internet • Data • Waste • Recycling • Shredding

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2020 GOVERNMENT LOBBYING & GOVERNMENT RELATIONS REPORT: IT MAKES A DIFFERENCE Let Representatives Know Where You Stand

BY BRUCE W. KRUPKE

I

would like to get your attention regarding your state’s government activity, bill introductions and potential new regulations that will affect your company’s ability to do business. What your state enacts could affect your ability to compete and stay profitable.

As this is an election year, I want to impress upon you how important your interaction with your state legislators will be. This is in addition to both your statewide and federal elections, which will take place in November. I strongly encourage you to consider some of these suggestions.

If you do not know who your state senator and assembly 8 • Northeast Dairy Foods Association, Inc.

representatives are, you should. They are going to vote on introduced legislation that will affect you. By knowing who they are, you can easily contact them to introduce your business. If legislators do not know you, then you are invisible to them when they make decisions about how they will vote on issues that will directly affect you.

You are not alone, our association will be there commenting and telling legislators who our members are and our position on introduced bills that could become law.

So how do you learn how to interact with your legislators?

It is not that hard and will pay dividends. First, you can ask

Legislative+RegulationsReport us to find out who they are and how to get in contact with them. You should consider attending and/or contributing to their re-election campaigns. A small contribution gets you on their list. It says you support them to represent you and, in turn, makes them consider how they vote. You can send a letter to them personally introducing yourself and your company. Tell them how many employees you have, how many companies you buy from in your community, what you support in your community and your general outlook towards key topics like taxes and other regulations costing you more money.

Open your doors to them. Invite them to take a tour of your company, so they can see firsthand who you are and what you do. We can help set up this tour for you — just let us know. The best times are when they are out of session or not campaigning.

Consider supporting certain legislators, and let your employees know of this support. There is strength in numbers, and if your employees know who you support and why, it might help influence them to vote for the best candidate.

Our association’s main responsibility to you as a member is to stay on top of the bill introductions in each state and represent your position. We do this through an approval process that starts with our board of directors, which sets specific policy. Then, we adopt that policy into a general position on

several topics. After that, we decide if we support, oppose or take no position on a bill or regulation. Springtime and into early summer, legislators are in session. We monitor introduced bills every day in all states that could affect our members. We contact the sponsors of these bills and even the committee they are assigned to let them know our position.

And, we make appointments with those legislators on bills that may move faster. It is a process we are experienced at, and it can make a difference.

I would like to encourage you to look at our bill report of all the legislation we are monitoring in your state. This is easily accomplished by visiting our member website at www.nedairyfoods.org, created to provide you with a lot of information, including our bill report by state (just click on a bill and read the information provided). If you haven’t already, set up your member ID and then proceed to “Members Only Services.” There, you’ll see a slew of information, including legislative updates where you’ll find the bill reports.

I’d like to provide you with some examples of state bills we are working on to give you an idea of some of the topics we are addressing. If you have an opinion on any of this legislation, please contact me personally, I’d love to further delve into the topic with you. (continued on next page)

NED Magazine | First Quarter 2020 • 9

Legislative+RegulationsReport But, before I give you the state reports, there is some good news. As I reported in the last issue of Northeast Dairy, one issue that we have supported since inception is the new version of the North American Free Trade Agreement. Under President Donald J. Trump, a new agreement has been crafted, called the USMCA, or United States-Mexico-Canada Agreement.

USMCA, finalized after intense negotiations between the three countries, was approved by the respective presidents or prime ministers in each country. What remained was the passage of the USMCA by each country’s legislative bodies.

Mexico signed before the end of 2019, and, just recently, our Congress passed it after some hand wringing. All that is left is to have Canada’s Parliament pass it. Canada held its elections late last fall, and it is our hope it will be signed soon. The passage of this agreement will be good for our dairy industry’s ability to export more processed and manufactured dairy products to both Canada and Mexico.

NEW YORK As usual, New York is the poster child for a lot of legislation we are working on. One of the issues involves Gov. Andrew Cuomo’s initiative to eliminate all Styrofoam in the state by 2022. He is adding this mandate to his 2020-2021 budget. His stated reasons to do this involve environmental concerns. We are apprehen-

10 • Northeast Dairy Foods Association, Inc.

sive because our ice cream manufacturers that make cups for schools, nursing homes and hospitals could be directly affected. There is a reason other than being much cheaper than paper counterparts that they are used — Styrofoam keeps the product better insulated for consumption. We are opposing this initiative and hope to keep it out of the budget approval process.

A second very important topic that we are monitoring is single payer health care. The Democratic Party has been pushing this paid “health care for all” for many years. Now, the Democrats are in the majority in the legislature, and they have the votes to pass this law. We are in opposition for many reasons. Mainly, the cost to implement health care for all from cradle to grave could more than double our state budget from about $178 billion to over $320 billion. Who will pay for the cost to cover the estimated 400,000 state citizens out of 19 million who do not have current healthcare coverage?

The answer is business owners and taxpayers! There is no way your taxes will not go up if this program is passed. This is one issue you should contact your legislators about now to let them know you are not in favor of passage. For more background on this topic, visit https://realitiesofsinglepayer. com/ to get the facts about how this will affect your business.

A third topic we are opposing is the expanding prevailing wage mandates to private construction projects. The governor’s proposal would require prevailing wage to be paid

Legislative+RegulationsReport on construction projects of $5 million dollars or more that are paid for with at least 30% public funds. A newly created public subsidy board would be empowered to examine and make any necessary adjustments to thresholds included in the bill. Our association has strongly opposed expanding these mandates on to private construction projects. Doing so would dramatically increase costs and devastate development efforts throughout Upstate New York.

CONNECTICUT We are finding in many states, including Connecticut, an attempt to try to mandate beverage requirements for any food service location selling children’s meals. The idea is to reduce the amount of sugar included in the meal to combat obesity in kids. We oppose this type of legislation because it is the parent’s responsibility to determine what kids can or cannot eat, not the state’s. Restaurant owners will respond to consumers if they request alternatives for beverages in kid’s meals.

This type of law affects our fluid milk industry, as chocolate milk can have more calories than what will be mandated in the law. So only white milk would meet the requirements.

White milk doesn’t sell as often, creating inventory problems. And, chocolate milk, which is arguably a more popular choice by kids, has only a few extra calories and provides much better nutrition than soda or water options.

The bill we are specifically opposing is Connecticut House Bill 7006. This would be a good bill to contact your House representatives about and let them know your opinion. If you would like more background and assistance with this, contact us.

MAINE Do you do business in Maine? If so, there is one major issue that could possibly affect you regarding recycling. The Maine Environmental Protection Legislative Committee is calling for any producer of a package that can be recycled to pay for that

process. It would shift the cost of recycling from Maine’s 400-plus municipalities and taxpayers to the producer of the packaging. This would be done by establishing a costshare system managed by one or more nonprofit third-party stewardship administrators that internalizes most of the cost of municipal management of end-of-life packaging within the purchase price of a product. It would provide incentives for producers to use — and, to the extent costs are passed on in the purchase price, for consumers to buy — less packaging and packaging that is more recyclable.

Last year, the legislature asked for research to be conducted to put together the program and report back in 2019.

The comments received were very much against such a proposal by business and industry but strongly supported by environmental groups. One of the key comments received was from the commissioner of the Maine Department of Environmental Protection. This agency is opposed to the program, stating it requires at least more study and should be held from passing. (continued on next page)

A

t Agri-Mark, we are continually investing in the Northeast Dairy industry because this is our home. We have finished the $21 million investment in a new dryer at our butter/powder/condensing plant in West Springfield, Mass., shown above, for the 950 dairy farm families that own the co-operative. This project boosts the plant’s capacity by roughly 33% and will allow us to better serve our customers. Please contact us at 978-552-5500 for more information on how we can serve you!

NED Magazine | First Quarter 2020 • 11

Legislative+RegulationsReport

With this information, the legislative committee disagreed by responding that it should be moved forward. Our association will continue to lobby along with others in the state to oppose this program.

NEW JERSEY A topic that seems to come up each year in the legislature is a bill that allows the sale of raw milk direct to consumers from the dairy farm.

We oppose this concept because raw milk can be dangerous to consumer. In New York state alone in the past year, four dairy farms that have been cited for potential listeria or other contaminants are being told to stop selling the product until the issue can be resolved. If a milk plant were to be found with unpasteurized milk on the shelf, there would be an immediate recall with the possibility of having the plant shut down. The law that allows the permitted dairy farms to sell raw milk should be repealed. We are trying to prevent any new permits from being issued.

In New Jersey, Assembly Bill #502 would permit the sale of raw milk under certain conditions and establishes a raw milk permit program. Currently, New Jersey doesn’t allow the sale of raw milk, and we are lobbying to keep it that way.

Every time a raw milk desist order is issued, it makes the news. We do not need to scare people and give them a reason not to drink milk. The public doesn’t necessarily make the connection between raw and pasteurized. People simply interpret it as a problem with milk in general. This kind of negative press does the entire legitimate milk industry harm.

VERMONT The Vermont Senate Bill 141 would mandate specific calories in the entire children’s meal served by any food service institution or restaurant to no more than 600 calories. It must contain no more than 770 milligrams of sodium, 35% of calories from total sugars, 35% of calories from fat, 10% of calories from saturated fat and 0.5 grams of trans fat.

It includes at least a half cup of unfried fruit or unfried vegetables, excluding white potatoes, and at least one of the 12 • Northeast Dairy Foods Association, Inc.

following: a whole-grain product that contains not less than 51% by weight in whole-grain ingredients or lists whole grains as the first ingredient; a lean protein, consisting of at least 2 ounces of meat; one 20-ounce portion of nuts, seeds, dry beans, or peas, or one egg; or at least a half cup of nonfat or 1% milk or low-fat yogurt, or two 1-ounce portions of reduced-fat cheese. For the purposes of this section, juices, condiments and spreads shall not be considered fruits or vegetables. If a children’s meal includes a beverage, that beverage shall be water, sparkling water or flavored water with no added natural or even artificial sweeteners. Milk or dairy alternatives, 100% juice with no added sweeteners in a serving size of not more than 8 ounces.

Although milk is included, keeping to the 600 calorie total mandate would make it hard for chocolate milk to be included. In general, more and more customers are simply not asking for any kind of milk in fast food restaurants, and, consequently, fewer establishments are keeping it in inventory.

These are just a few examples of the 50-plus bills we are monitoring and working on. As the legislative season progresses, we can expect many more to be introduced that will impact your business, including wage laws, energy, environmental issues and health.

Rest assured, your membership dues are being put to great use. We have your backs and will continue to strive to educate lawmakers before a bill is passed. These representatives take our positions seriously, and it is imperative that we protect your ability to compete in the marketplace by keeping costs and burdensome regulations from hindering your business.

If you have any questions about a law or regulation, please do not hesitate to contact us at 315-452-MILK. We look forward to hearing from you.

Bruce W. Krupke is the executive vice president of Northeast Dairy Foods Association, Inc.

VARIOUS TRADE AGREEMENTS COULD MEAN GOOD NEWS FOR U.S. DAIRY IN 2020

A

BY GARY LATTA

s this article is being drafted, President Donald J. Trump and Chinese Vice Premier Liu He are in Washington, D.C., signing the long-awaited Phase One trade deal in an elaborate ceremony at the White House. The agreement ends a long, 19-month U.S.-China trade war that has been costly for both sides. During the ceremony, the U.S. and international stock markets were jumping to new record highs. All this was taking place while at the same time impeachment proceedings were underway across town in the House of Representatives.

While there is plenty of optimism surrounding the deal, there are skeptics who understandably question whether China can fulfill all its obligations established under the terms. China has agreed to purchase a minimum of $200 billion in U.S. products and services over the next two years. There are four basic areas of focus in Phase One of the agreement, which China has agreed to purchase from U.S. suppliers:

1. Manufacturing purchases will expand an additional $77.7 billion over two years from the 2017 baseline level. The new agreement is for an additional $32.9 billion increase in 2020 and an additional $44.8 billion increase in 2021.

2. Energy purchases will expand an additional $52.4 billion over two years beyond the 2017 baseline level of $9.1 billion. This will be an additional $18.5 billion in 2020 and an additional $33.9 billion in 2021.

3. Services purchases will expand $37.9 billion over two years. The breakdown is an additional $12.8 billion in 2020 and $25.1 billion in 2021 above the 2017 baseline.

4. Agricultural purchases will grow an additional $32 billion over the next two years. From the 2017 baseline of $24 billion, China has agreed to purchase an additional $12.5 billion in 2020 and $19.5 billion in 2021. (continued on next page) NED Magazine | First Quarter 2020 • 13

Economic Outlook

Adding the projected annual incremental increases to the baseline of $24 billion, we can see how Trump and his administration came up with a total of $80 billion — or $40 billion per year in total agricultural sales to China.

For its part of the commitment, the U.S. has agreed to roll back by 50% the tariff rate imposed on China in September 2019. The new, lower U.S. tariff rate will be 7.5% on about $120 billion of products from China. However, U.S. tariffs that were put in place before September will remain in effect to serve as leverage in successfully negotiating Phase Two of the agreement and to ensure that China lives up to its promises under Phase One. Under the terms, $250 billion of Chinese products will remain under a tariff of 25%. Phase Two negotiations are to begin immediately. Tariffs from both countries, which were to go into effect Dec. 15, 2019, have been suspended.

Details of just how much of an impact the U.S.-China Trade Agreement will specifically have on dairy are sparse at this time. The U.S. Department of Agriculture and Office of the President have published some fact sheets that briefly outline a few of the components specific to dairy and infant formula products. These fact sheets touch upon the rising incomes of the Chinese population and the growing demand for high-quality 14 • Northeast Dairy Foods Association, Inc.

animal proteins that include dairy. The Chinese have viewed U.S. dairy products as high quality and very safe compared to other sources. In years past, and, of course, during the recent trade war, strict Chinese regulatory requirements have been an impediment to U.S. dairy product exports. Phase One of the new deal specifically addresses many of these limitations.

Under the new terms, China will supposedly recognize U.S. dairy systems for food safety and oversight. In years past, China’s tough restrictions on U.S. dairy served as an impediment to sales there. The USDA believes the Phase One terms will serve to open markets for infant formula, extended shelf life milk, dairy permeate, ultra-filtered milk and other U.S. dairy products. Under the terms, China will relax its inspection, audit and approval requirements, which should help streamline the export process.

Phase One hopefully puts an end to much of the trade tension that weighed heavily on both economies. Many agricultural leaders see Phase One as a significant step torward what should further open the door to more dairy exports negotiated under Phase Two. It is important that dairy leaders and dairy trade organizations exercise their influence with the president’s administration early in the development of Phase Two.

Economic Outlook USMCA TO ENHANCE U.S. DAIRY EXPORTS The United States-Mexico-Canada Agreement is another trade victory finally approved by the House of Representatives on Dec. 19, 2019. The USMCA has passed over to the Senate, where it was approved 89 to 10 and sent to the president’s desk.

Sadly, eight of the 10 senators that voted “no” on USMCA were from the Northeast states.

USMCA replaces and improves the North American Free Trade Agreement and will enhance and expand U.S. dairy exports to Mexico and Canada. Under the terms of the new agreement, rule changes aimed at eliminating some distorting policies in Canada, such as the Class VII program, should benefit the U.S. USMCA relaxes the restrictions on U.S. dairy exports to Canada that should provide access to an additional 3.6% of its market. To our south, Mexico is our top destination for U.S. dairy products, particularly cheese, followed

by Southeast Asia and then Canada. The International Trade Commission reports that U.S. dairy exports are projected to increase by more than $314 million per year under USMCA.

NEW DEAL RENEWS ACCESS TO JAPANESE MARKETS In late September 2019, the U.S. and Japan reached an agreement to further enhance trade between the two countries. This new deal, officially called The U.S.-Japan Trade Agreement, renews access to the Japanese market that became at risk when the U.S. withdrew from the Trans-Pacific

Partnership in 2017. Until this renewed agreement was made, other countries exporting dairy products to Japan were receiving preferred treatment. This new agreement levels the playing field to ensure U.S. dairy has equal access to the growing Japanese market. Japan remains another top lucrative market for cheese. According to the U.S. Dairy Export Council, Japan’s purchases of U.S. cheese have tripled in the last decade. Two competitors for the Japanese cheese market in recent years have been Australia and New Zealand. Both countries are currently facing difficulties with milk production due to severe weather issues.

SIGNS OF HERD EXPANSION, NORTHEAST APPEARS TO HAVE HEALTHY GROWTH Last year, milk production growth slowed in the U.S. and globally, while surplus inventories in storage were trimmed, bringing them into better balance. While the number of U.S. milk cows continues to fall, per cow production is constantly growing. Individual states and regions report varying degrees of change in milk production depending on herd sizes and per cow productivity. The latest USDA Milk Production report shows January 2020 production up 0.9% in the U.S. but up 1.2% in the top 24 states. While the U.S. was down 6,000 cows from this same time last year, the top 24 states were up by 16,000 cows. (continued on next page)

NED Magazine | First Quarter 2020 • 15

Economic Outlook

So, at least among some states in the top 24, there is herd expansion still going on. A couple of the presenters at the January Cornell Agribusiness Outlook Conference mentioned that dairy herds are not always eliminated via slaughter when farms exit but are sold to neighbors who expand their operations and continue to milk them. Northeast milk production varies by state but appears relatively healthy overall. Among the top 24 states in this latest report, the USDA shows New York up 2.2%, Ohio up 2.6%, Vermont down 1.7% and Pennsylvania down 0.8%.

The USDA reports that 2019 annual milk production was up just 0.4% from 2018 in the U.S. Total annual milk production has increased 13% from 2010. Production per cow averaged 23,391 pounds in 2019, up 241 pounds from 2018. The average annual production per cow in the U.S. has grown 10.6% from 2010, while the average number of cows on farms increased 2.3% from 2010.

Class prices turned upward rather sharply last year, especially during the second half. Northeast Federal Milk Marketing Order One reported January 2019 Class I fluid prices at Suffolk County, Massachusetts (Boston), at $18.37 per hundredweight.

After January, Class I fluid milk prices steadily rose throughout the year, hitting a peak of $22.58 in December, an increase of $4.21 from the start of the year. Much of the increase in fluid milk price was driven by national cheese prices, which also climbed steady throughout 2019. With cheese prices dropping off near the end of the year, the January and February 2020 Class I price rescinded to $22.26 and $20.80 respectively.

16 • Northeast Dairy Foods Association, Inc.

Butter prices were somewhat steady throughout 2019, with a modest trend down during the second half. Cheese and non-fat dry milk prices climbed steadily pretty much throughout 2019 and served to drive the skim component of both Class IV and Class III prices.

USDA is forecasting 2020 milk prices higher than 2019 but has scaled previous forecasts back just a bit due to uncertainty surrounding the coronavirus impact on international agricultural markets. Recently, global dairy market prices have been feeling downward pressure over coronavirus concerns. Dairy market prices in the U.S. may not be as robust until China and the rest of the world get this outbreak under control. The number of individuals infected climbs daily and is at 79,000 as this is written. That’s about 77,000 of these infections in China and 2,000 outside China.

The Chinese economy has slowed considerably with widespread disruption in shipping and supply chains. Transportation and travel have been restricted in many Chinese cities. Numerous eating establishments have closed or reduced the number of hours of operation. Chinese food manufacturing facilities that utilize dairy-based components are operating on reduced schedules or have shut down altogether. Obviously, this is eroding sales of agricultural products including dairy. How much the coronavirus outbreak will impact China’s ability to import dairy products remains to be seen.

Individual country opinions concerning the impact of coronavirus on dairy on exports varies among experts and observers.

Some reports from New Zealand and Australia indicate they

Economic Outlook expect the impact of the virus on agriculture to be modest and short-lived. Other countries, like Ireland and the U.S., are showing more concern. Global dairy markets have shown some softness in reaction to the outbreak, and the U.S. wonders what the impact will be on Phase One of the U.S.-China Trade Agreement. So far, China has not indicated it intends to back off from the large agricultural purchase commitment it made under the terms of the trade deal.

The USDA’s latest product price forecast shows cheddar cheese prices higher in 2020, especially during the first two quarters. Lat year, cheddar cheese prices averaged $1.759 per pound and are estimated to average $1.790 in 2020. These estimates have been revised downward from the previous month due to changes in global markets. Butter prices are expected to weaken in 2020 and average $1.910, down from the average of $2.243 in 2019. Non-fat dry milk is expected to see sizable increases in 2020. Strong domestic and global demand is driving U.S. non-fat dry milk to higher levels. Nonfat dry milk is now estimated to average $1.255 per pound in 2020, up substantially from last year’s average of $1.042. Dry whey is estimated to average $0.345 per pound in 2020, down from $0.380 last year.

Dry whey prices have trended down in 2019 and the USDA expects this to continue. U.S. whey prices could potentially

climb higher than indicated if China reverses its struggle with swine flu and gets control of coronavirus. Dairy component prices could be driven higher as a result of newly signed trade deals and the potential for depressed milk output from exporting countries like New Zealand and Australia. At this time, there appears to be good demand for U.S. nonfat dry milk that could lead to further exports in 2020.

The latest USDA dairy forecast shows U.S. milk production to grow 1.69% in 2020. Some industry observers believe this much growth in production is optimistic. It is possible that growth in output per cow may not be as robust if feed quantity and quality are less than optimum. USDA now estimates 2020 Class III prices to average $16.95 per hundredweight, compared to $16.96 in 2019. Class IV is forecast to average $16.70 in 2020, compared to $16.30 last year. The all-milk price is forecast to average near $18.85 in 2020 compared to $18.60 in 2019.

Gary Latta is a dairy product specialist consultant for the Northeast Dairy Foods Association, Inc. He has more than 30 years of experience in providing economic analysis, statistics and information to the dairy processing industry.

NED Magazine | First Quarter 2020 • 17

COVER STORY- STYLE CAN CHANGE

18 • Northeast Dairy Foods Association, Inc.

BACK TO THE DAIRY CASE

C

onsumers don’t stop at the dairy case anymore. Who drinks milk anyway? There are too many other beverage choices. Dairy is dying. You hear these platitudes all the time, but are they fact or fiction?

When you look at the data, much of it is fiction. The trouble is that consumers often believe what they hear and make their choices accordingly. The industry, as a whole, needs to counteract these misconceptions with facts, innovation and effective messaging in and around the dairy case.

Of course, there’s no denying that various factors have negatively impacted dairy. Yes, the price of raw milk has been fluctuating, which has put a real challenge on many in the industry. Sales of fluid cow’s milk have been on the decline for more than a decade, and the recently announced bankruptcies of both Dean Foods and Borden have also fueled the idea that the dairy industry is in trouble.

In most instances, the size of the dairy case has not really expanded much for most retailers in years, but the number of products has exploded with everything from almond “milk” to endless choices of yogurt for every taste. This makes for a tight squeeze and some highly competitive shelf space.

But there’s good news, too. Fluid milk is still found in the refrigerators of most American homes in one form or another. Retailers know this and continue to capitalize upon it. In some cases, retailers use milk as a loss leader, knowing that a great price on milk will bring shoppers into the stores for other items. In fact, statistics show that consumers who have milk in their shopping carts tend to spend more overall at the register.

Retailers have no intention of giving up on the sale of fluid cow’s milk. According to Dave Damrath, COO, American Dairy Association North East, 77% of all fluid milk is sold at retail stores, while the remainder goes mostly to food service and schools. He believes that the demise of fluid cow’s milk is “largely exaggerated,” stating the 94% of U.S. households still keep some kind of milk on hand.

Yes, this is a decline, but only by 1% — from 95% to 94% — hardly the dramatic decrease that consumers have been led to believe.

Fluid milk is still found in the refrigerators of most American homes in one form or another.

Retailers know this and continue to capitalize upon it.

Statistics from Dairy Management Inc., as of Dec. 29, 2019, seem to back this up. Overall, retail milk sales volume was down 3.9%, in part due to rising prices that were up 8% in the last four weeks of the year compared to 2018.

The gallon size has definitely taken a hit, posting losses of 5.6% in 2019 compared to the previous year. It is still the most popular size with almost 75% of the market share.

However, that pertains to the size of the milk container, not the product itself.

Damrath noted that the decrease in milk sales and the size of the container purchased may be more of a reflection of the evolution of the American lifestyle than on retail choices.

“Many of us grew up at a time when you had breakfast and dinner at home every day with a glass of milk,” he said.

“That just doesn’t happen anymore. Families are smaller.

They are on the go. Many people rarely sit down to eat at the dinner table every night. People aren’t suddenly hating on dairy. They just aren’t having the demand or occasion-based ability to drink large quantities of milk all at once like we used to do.”

The U.S. Department of Agriculture backs this up, citing that the average person now drinks approximately 18 gallons of milk per year. In contrast, in the 1970s, the average American drank close to 30 gallons per year, mostly because (continued on next page) NED Magazine | First Quarter 2020 • 19

BACK TO THE DAIRY CASE

milk was regularly consumed in the morning breakfast cereal or was the only beverage option at dinner.

So, 94% of households do keep milk in the refrigerator today, but not necessarily in the quantity or type they used to. According to the USDA, other types of milk are growing in popularity. For example, flavored whole milk jumped almost 9% in sales from January 2019 through October 2019 (the most recent data available). In the same period, organic milk sales increased by 4.4%, and lactose-free or lactose-reduced milk sales grew by more than 11% — with no signs of stopping. While this could be seen as a rejec20 • Northeast Dairy Foods Association, Inc.

tion of whole white milk, it may also simply be a shift as consumers weigh choices, patterns and quantities. In the end, however, the Dairy Management, Inc., report states that while whole milk did flatten in 2019, the segment still continues to be the top performer in the retail category at 40% volume share nationally.

KEEPING THE DAIRY CASE RELEVANT Certainly, the industry is keeping a close eye on consumer buying habits, as the dairy case continues to offer more and more options – many of which are not actually dairy products.

BACK TO THE DAIRY CASE

The American Dairy Association North East has established the Dairy Aisle Reinvention Program to make sure people can’t help but be drawn to the dairy case. The goal of the program is to assist retailers in contemporizing the look of the dairy case as a place with fresh, tasty products and on-target messaging, which, consequently, encourages shoppers to spend more time in this section examining the various choices. Some of the American Dairy Association North East’s efforts include three-dimensional signage that calls out nutritional benefits, offers dairy recipes and clearly categorizes dairy with labels like “snacks” or “probiotics” to make it easy for consumers to find what’s on their list (and more!). In addition, the program also features appealing photography that promotes the idea of locally-sourced dairy products.

COMPETITION IS FIERCE The average grocery store carries approximately 2,500 beverage items. That sounds like a really big number until you consider that there are approximately 80,000 non-alcoholic beverage choices out there. If beer, wine and other alcoholic beverages are included, that number jumps up to a whopping 150,000! Just a decade ago, there were less than one-third of the options that exist today. Milk’s real competition, however, isn’t really sports drinks, fruit juices or soda — or even more trendy items like oat milk, kombucha or cold brew; it’s water.

In fact, 53% of fluid milk volume loss can be attributed to consumers choosing water to quench their thirst.

Of course, there’s no ignoring the fast-growing plant(continued on next page)

NED Magazine | First Quarter 2020 • 21

BACK TO THE DAIRY CASE

based beverages category. However, it may not be growing as quickly as marketers may want consumers to believe, according to the American Dairy Association. In fact, overall growth in 2019 actually slowed to single digits (less than 6%) and continues to decelerate. Almond “milk” remained the favorite, representing nearly 80% of the plant-based beverage category (and a 7.6% increase in the past year).

Soymilk is not nearly as popular as it once was, but it remains a contender, as some consumers drink it to avoid milk and nut allergies. The verdict is still out on the relatively new oat “milk,” although, at present, it seems to be a very popular trend and saw an astronomical 662% increase in sales last year.

Still, milk sales far surpass plant-based alternatives. While plant-based products do represent a respectable 302 million total gallons in U.S. retail (about $1.9 billion), they cannot compare to the 3.5 billion gallons of cow’s milk (about $12 billion) sold at retailers each year.

Bottom line: Consumers are still buying milk. Yes, they may purchase it in smaller amounts at one time or choose organic or lactose-free over traditional whole white milk, but, in the end, it’s still milk. So, the next time someone tells you that no one drinks milk anymore, remind him or her that, in fact, most people still do, and, in all likelihood, they will continue to do so.

22 • Northeast Dairy Foods Association, Inc.

BACK TO THE DAIRY CASE

MORE KIDS ARE SAYING NO TO SODA, SWEETENED DRINKS A report released in 2019 from the U.S. National Health and Nutrition Examination Survey of the American Journal of Preventative Medicine states that children are actually drinking less soda and surgary beverages — and that’s good news for kids’ health and the dairy industry.

This research was based on information collected from more than 15,600 children and teens in the U.S. The data indicated that children from higher income levels showed a 14% drop in sugary drink consumption.

In contrast, children from lower incomes families, particularly those enrolled in the Supplemental Nutrition Assistance Program, also known as SNAP, fell only slightly more than 8% in the same time period.

While any decrease is a step in the right direction, the news isn’t all good. The report shows that 61% of all children and teens still consume some type of sugary beverage — particularly sports and energy drinks — on a daily basis, too, which translates into empty calories and no nutritional value.

EDITOR’S NOTE ON DAIRY STATISTICS

This issue of Northeast Dairy contains a multitude of statistics from a variety of reliable sources.

We acknowledge that some do not match up exactly but hope you will consider that these discrepancies are a reflection of research and data that may have had slightly different parameters.

In the end, the Northeast Dairy editorial staff chose statistics that were similar enough, even if not exactly the same, in an effort to give you an overall picture of the various points made in this issue.

We welcome your feedback.

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NED Magazine | First Quarter 2020 • 23

BACK TO THE DAIRY CASE

(Source: DMI; Statistics compiled between Dec. 1, 2018, and Dec. 1, 2019.)

24 • Northeast Dairy Foods Association, Inc.

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NED Magazine | First Quarter 2020 • 25

PENNSYLVANIA OFFERS MILK PROCESSORS OPPORTUNITY TO RE-LABEL WHOLE MILK

I

n February, the Pennsylvania Department of Agriculture offered state milk processors new labeling advice and the opportunity to rebrand whole milk thanks to the flexibility in federal milk labeling requirements, according to a memo put out by Agriculture Secretary Russell Redding. At the request of the industry, the Bureau of Food Safety issued a guidance memo clarifying Food and Drug Administration requirements and highlighting the opportunity to label whole milk as 3.25% fat.

“We’re living in a society where people want to know where their food comes from and what’s in it,” said Redding. “This memo provides clarity to the industry on labeling requirements and offers an opportunity to rebrand Pennsylvania’s state beverage.”

Whole milk has traditionally been labeled as such because it is unaltered from the cow before processing. No fat has been removed from the naturally occurring average of 3.5%.

“While this clarification may offer a new opportunity to the industry to possibly improve their market for whole milk, we are hopeful that they fully realize the need for a re-education of consumers,” Redding added. “For generations, consumers have been trained to look for skim, 1%, 2% or whole.”

The Pennsylvania Farm Bill’s Pennsylvania Dairy Investment Program has made funds available for marketing and promotion campaigns. To date, more than $800,000 has been awarded for 11 state-specific marketing campaigns through this program.

The Commonwealth Financing Authority has made a total of $10 million in grants available through the program, as well, for value-added processing, research and development, organization transition assistance and marketing and promotion.

Pennsylvania processors interested in making changes should contact the state’s Bureau of Food Safety and Laboratory Services to make sure potential changes do not conflict with federal labeling regulations.

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BACK TO THE DAIRY CASE

HOOD: New Oat Milk Is Answering Consumer Need

T

he dairy case is filled with plant-based “milk” alternatives — almond, cashew, soy, coconut, etc. — and the industry seems split on whether it’s a positive or a negative. Many, including the Northeast Dairy Foods Association, take issue with beverages that do not originate from a cow (or other mammal) being labeled as “milk.” Some of our members see plant-based options as damaging to the sales of fluid cow’s milk, while others see it as an opportunity to leverage consumer interest and further profits and their overall brands.

HP Hood LLC, a member of the Northeast Dairy Foods Association and a leader in the dairy industry, has taken the leap into what is considered one of the newest and trendiest products in the dairy case right now, oat milk, branded by the company as Planet Oat. Northeast Dairy interviewed Hood’s Vice President of Marketing Christopher Ross to get some insight into why the company decided to venture forth with this new product.

NED: Why did Hood make the decision to add oat milk to its brand? How has it been received by consumers, and why do they like it?

Ross: We’ve done extensive listening and talking to consumers about what they want in the beverage space and know that Planet Oat is an extension of what consumers are looking for today. With so much innovation and choice in the plant-based category, consumers are leaning into that innovation and looking into what’s next. Yet, despite all of that innovation, we also heard that, while consumers love or have learned to love plant-based milks, they aren’t always

satisfied. Both of these things told us there was room for oat milk. We connected the dots, did more consumer work and decided moving forward was the right thing to do.”

NED: Some in the dairy industry have a difficult time with plant-based alternatives because they believe these are taking away from traditional fluid cow’s milk. However, it seems that more and more companies are starting to offer both. Why do you think offering this type of product is a good decision for both Hood and the industry?

Ross: Hood has been launching milks — both dairy and non-dairy, in all iterations — for a long time now. Even in our earliest days, our company was committed to making sure the consumer was receiving the best possible products for their needs. It’s been a part of our DNA as a company for the past 170-plus years. Superior quality checks, high-quality processing, working with the best farmers and suppliers — that discipline has been nurtured for generations. With Planet Oat, we’ve created an unbelievable product that eliminates those tradeoffs consumers are forced to make — our oat milk tastes delicious, is rich, creamy and full-bodied, is versatile and is sold at a reasonable price point. It can be used by everyone, every way, every time.

NED: How are plant-based alternatives helping to keep dairy relative for consumers?

Ross: What we are hearing from consumers about the potential for oat milk to fill a void is what drove our decision to enter. We champion products that meet consumer needs.

That’s at the heart of innovation. There’s always going to be room for dairy milk, and there’s going to be room for what consumers need next.

NED Magazine | First Quarter 2020 • 27

FOR YOUR HEALTH

E

IS SUGAR REALLY THE VILLAIN?

veryone in the dairy industry has heard the latest: Sugar is bad for you! It’s a theory that’s spreading rapidly through the general public, and it’s negatively impacting the sale of dairy with misinformation that is steering consumers away from the dairy case. The debate has been particularly strong in the face of plant-based alternative beverages and when it comes to what should or shouldn’t be allowed in school lunchrooms across the nation. It is the responsibility of the dairy industry to not only keep up with fact versus fiction but spread the word on the truth about milk’s nutritional value.

MILK DOES CONTAIN NATURAL SUGAR Today’s consumers want simple ingredients without fillers, chemicals or other additives that no one can pronounce. They also want food that is locally sourced whenever possible. That makes cow’s milk a perfect fit. It has limited ingredients, and a great deal of milk in the U.S. comes to consumers from within 30 to 60 miles of where they live and work.

There’s no disputing that milk does contain some sugar, but it’s naturally derived sugar and certainly not enough to outweigh the other nutritional benefits that come with this beverage staple. That seems to be the message that consumers often miss.

28 • Northeast Dairy Foods Association, Inc.

According to Hilary Walentuk, MS, RD, LDN, a registered dietitian and nutrition specialist with New England Dairy, white milk contains sugar in the form of naturally occurring lactose, not added sugar. All white milk, whether it be fat-free, low-fat, 2% or whole, has the same amount of natural lactose — about 12 grams per 8-ounce glass. Some lactose-free milks may have less sugar if filtration was used versus using lactase to break down the sugar. (To keep this all in perspective, an 8-ounce glass of milk has the same amount of natural sugar as one small banana.)

Even drinking 100% fruit juice, which also contains naturally derived sugar, often results in a far greater sugar intake than the equivalent glass of milk. Why? There’s simply more sugar in most fruit. Fruit drinks, sports drinks and soda all contain some form of added sugar, often high fructose corn syrup, and typically have no nutritional value.

NUTRITIONAL VALUE CAN’T BE BEAT Many consumers hear about the danger of sugar but forget about the other essential nutrients milk has to offer. All milk, whether white or flavored, provides nine essential nutrients: protein, potassium, calcium, vitamins A, D and B12; riboflavin, niacin and phosphorus, according to Walentuk.

The 2015-2020 Dietary Guidelines for Americans recom-

FOR YOUR HEALTH

mends that healthy eating patterns limit added sugar to less than 10% of calories daily, according to Walentuk. That’s about 12 teaspoons — or 48 grams — of added sugar in a 2,000 calorie diet. According to these guidelines, “There is room for Americans to include limited amounts of added sugar in their eating patterns, including those that improve the palatability of some nutrient-dense foods.” That’s good news because it means that reasonable portions of flavored milk or sweetened yogurt can help children and adults get the essential nutrients from dairy that are important for a lifetime of healthy eating.

“Don’t forget that food is more than just nourishment for our bodies. It’s a source of enjoyment in our lives,” said Walentuk.

“So, when we refuel with chocolate milk or grab a flavored yogurt for a midday snack, we can enjoy them knowing that it still fits within the guidelines.”

CHILDREN LIKE THEIR CHOCOLATE MILK The debate about the consumption of chocolate milk rages on, particularly when it comes to school lunches. Some school districts across the country have banned chocolate milk, stating that it exceeds nutritional guidelines for sugar consumption.

(In some instances, however, school districts reversed this decision when it became apparent that children weren’t drinking any milk at all.) However, the facts state that kids who drink chocolate milk actually have better quality diets and are just as likely to be at a healthy weight as kids who do not drink chocolate milk, according to Walentuk. Flavored milk contributes only 4% of the sugar children and adolescents consume daily, while, again, providing those nine essential nutrients that other beverages simply don’t have. In addition, children simply like the taste of chocolate milk, which, in the end, means they are drinking milk — and any milk is better than other sugar-filled beverages.

TOO MANY CHOICES CAN CAUSE CONSUMER CONFUSION The dairy case used to be fairly straight forward, but now it is a crowded place with many options. Aside from milk, the shelves are stocked with plant-based beverages, which are often labeled as “milk,” but are, in fact, derived from things like almonds, oats, coconut, soy and more.

According to Walentuk, plant-based alternatives have no standard nutrient composition, so nutritional value can vary from product-to-product and brand-to-brand. In addition, many of the plant-based beverages have added sugar, even the non-flavored versions, so consumers may be taking in a larger percentage of the recommended daily intake of sugar than they realize. In addition, many plant-based alternatives have more than 10 ingredients, including stabilizers and emulsifiers. The bottom line when it comes to plant-based alternative beverages is that consumers need to become savvy label readers in order to make informed decisions on how a product may impact their health and nutrition.

In the end, sugar is hardly the villain it’s been made out to be, but it is up to the dairy industry to help spread the message through proper labeling, marketing and education, so consumers can base their buying choices on facts not fiction.

For nearly 100 years, New England Dairy has strived to be a catalyst — activating farmers, partners and thought-leaders to create a vibrant dairy community. The organization works in five New England states supporting, improving and celebrating all things dairy – farming, food, nutrition and wellness. New England Dairy does this by sharing the dairy farming story, connecting people to dairy farms, supporting youth wellness in schools and delivering the latest nutrition and sustainability science to health professionals, scientists and media.

NED Magazine | First Quarter 2020 • 29

MARKETING DAIRY

MILKPEP OFFERS STRATEGIC CAMPAIGNS TO INCREASE CONSUMPTION

M

any of you have seen the advertising and media campaigns for Milk. Love What’s Real, a message that inspires audiences to “savor what’s real and what matters” in life’s smaller moments, or another, Built with Chocolate Milk, that features elite athletes spreading the message of how the science and nutrition behind chocolate milk can help adult exercisers be their best. These campaigns, along with a host of others, are created by the Milk Processor Education Program, or MilkPEP, to help the dairy industry promote consumer consumption of fluid milk in a highly competitive market. Are you utilizing the valuable resources that MilkPEP provides?

The Washington, D.C.-based MilkPEP is funded by a 20 cent-per-hundredweight assessment on the nation’s fluid milk processors — which includes NDFA member brands that process more than 3 million pounds in a month — in an effort to increase fluid milk consumption. MilkPEP’s activities are led by a board of directors monitored by the U.S. Department of Agriculture’s 30 • Northeast Dairy Foods Association, Inc.

Agricultural Marketing Service. According to MilkPEP’s 2018 annual report (the most recent data available), the total spent on advertising, promotion and education for fluid milk products and other expenses totaled an estimated $91.7 million.

“MilkPEP builds best-of-class marketing and communication programs to win volume with each consumer target, including creating new and powerful consumption occasions to regain volume,” according to Melissa Malcolm-Cullison, director of national sales and field marketing, MilkPEP. Many will undoubtedly remember one of MilkPEP’s most iconic campaigns — the milk mustache — which featured celebrities like Jennifer Aniston and Harrison Ford, as well as athletes like Venus and Serena Williams in “Got Milk?” ads. Today, Milk. Love What’s Real, Built with Chocolate Milk and Milk It! have updated that message and continue to promote fluid milk consumption at a time when it is declining.

These three current “powerhouse” campaigns connect directly and authentically and are aimed at getting consumers to retail to buy milk regularly, according to Malcolm-Cullison, who

MARKETING DAIRY explained that MilkPEP works with milk brands to ensure access to data, insights and communications assets that the organization believes will transform people’s attitudes and behaviors to drive milk sales.

MilkPEP’s efforts strongly support the farming community and work closely with Dairy Management, Inc., to amplify a common message — the importance and relevance of milk in people’s lives. Local, state and regional organizations can access MilkPEP resources and partner with milk brands to utilize these marketing tactics year-round, as well as incorporate available tools in existing programs.

“Any milk processor who pays into the MilkPEP Program should take advantage of what it has to offer in order to promote the consumption of fluid milk,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association. “The program has many options to tie your brand into a national campaign designed to attract the consumer’s attention to the benefits of drinking milk. If you’re contributing to MilkPEP, why not take advantage of the benefits, too?”

With the popularity of plant-based dairy alternatives and even water, MilkPEP’s efforts are working to continue to drive consumers to the dairy case for their beverage of choice.

According to MilkPEP, it’s working. Despite a great deal of competition, milk still remains the third largest beverage category, with 94% of households still purchasing milk, according to Malcolm-Cullison. “Milk IS growing — nearly half of the full milk category is experiencing short and long-term growth; look at what is happening in flavored, whole, lactose-free and value-added milk,” she said.

In addition, as a key trip and profit driver, milk delivers 20% of store profit and 10% of sales from just 3% of store space, according to Malcolm-Cullison. “That’s why it is critical for milk brands and retailers to keep up with today’s consumers and ensure dairy shelves are in line with the way consumers shop and what they are seeking,” she added.

“It is MilkPEP’s mission to support milk brands through every facet of the consumer journey, yet, national marketing efforts mean nothing without support from the industry,” said Malcolm-Cullison. “Milk brands, state and regional organizations, farmers and industry partners alike, we’re calling on you in 2020 to rally your teams and full organizations to blanket the country with milk activations. Together, we will make an impact on how people view, purchase and, ultimately, consume milk.”

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NED Magazine | First Quarter 2020 • 31

MARKETING DAIRY 2020 BRINGS SPORTY AND SPOOKY MILK OPPORTUNITIES While MilkPEP generates ideas all year round, it strategically activates key programs during peak seasonal windows to connect with key customer targets and amplifies its ongoing demand-driven campaigns. Two such programs include a partnership with the 2020 Summer Olympics and a campaign marking milk as the Official Drink of Halloween slated for fall 2020. To leverage your brand through these opportunities and resources, contact MilkPEP at info@milkpep.org.

Support Milk. Support the U.S.A.!

Summer’s coming, and so are the 2020 Summer Olympic Games in Tokyo, Japan. MilkPEP is again leveraging an opportunity to partner with the U.S. Olympic and Paralympic Committee for white milk and U.S.A. Swimming for chocolate milk. MilkPEP is working with athletes from across the country to tell real stories about how milk plays an important role in their lives. Data shows that past Olympic partnerships helped increase milk sales by more than 5% from 2017 to 2018. (Did you know that nine out of 10 Olympians grew

up drinking milk?) MilkPEP is currently offering pass-through rights of celebrity and hopeful athletes, Olympic logo marks, exclusive social and digital assets and a full shopper marketing program, including free point-of-sale materials.

Get in the Halloween Spirit Before you know it, the leaves will be turning the bright colors of fall in the Northeast, and with that comes Halloween.

Through its Milk. Love What’s Real campaign, MilkPEP will again promote the balance of feeding kids nutritious foods without losing the spirit of the spooky season by making chocolate milk the Official Drink of Halloween. This campaign leverages MilkPEP’s national efforts and activations from milk brands across the industry, in-store and online (this helped increase chocolate milk sales by 1.8% last October). Through this campaign, brands have introduced Halloween-themed packaging labels, retail secondary displays and even recipes in past years. MilkPEP promises to have plenty of new assets for this campaign in 2020.

SUPPORT THE GREAT AMERICAN MILK DRIVE Since 2014, MilkPEP has worked with Feeding America and the dairy industry to make sure underserved children and families get the milk they need. The Great American Milk Drive has delivered more than 33 million gallons of milk through this effort.

The program paved the way for the first-ever purchase of fluid milk from the USDA, which was distributed to food banks across the country. Without this assistance, many food banks are only able to supply less than one gallon of milk per person each year. Thanks to milk brands throughout the dairy industry, the USDA has continued to purchase milk for those who do not have regular access to it, while also driving growth in the category. According to MilkPEP, the USDA purchased $65 million in 2019 and is expected to purchase $50 million this year. Eighteen processors have participated since the program started. MilkPEP encourages other processors to join this worthy initiative by submitting bids for USDA milk purchases in your area. More information is available at www.MilkPEP.org.

32 • Northeast Dairy Foods Association, Inc.

TRENDS

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NEW TRENDS IN FLAVOR AND COLOR FOR 2020

lavorchem, a company specializing in the creation and manufacturing of flavor and color solutions for the food, beverage and nutraceutical industries, recently released its “Flavor & Trend Forecast 2020” with information on what’s certain to be “hot” in the market for the coming year and beyond.

SUSTAINABILITY Consumers will continue to look for authenticity in their food, bringing sustainability to the forefront, as they make choices based on eco-preservation like reduced packaging, sustainable alternatives, upcycling and even the use of less-than-perfect “ugly” produce in their food and beverage products.

PLANT-BASED INNOVATION While many in our industry reject plant-based products as a true alternative to cow’s milk or other milk products, it is a trend that doesn’t seem to be

going away. Consumers are embracing this wave because they believe plantbased products are healthy. Oat “milk” is one of the products highlighted in the Flavorchem study as one to watch.

like North Africa and Southeast Asia, and hybrid products that combine items across product categories are all part of an expected consumer trend for adding interesting flair to traditional dishes.

CBD According to Forbes, “The consumer CBD market is estimated to grow to $2.1 billion in 2020.” Flavorchem predicts that food products containing CBD will become “mainstream” in both foods and beverages in 2020 with coffee shops, cafés and restaurants working CBD oil into their menus. While CBD in dairy is not mentioned in the forecast, Flavorchem expects CBD-infused waters, coffees, teas, energy drinks and alcoholic beverages to gain significant ground in the coming year. Will dairy be far behind?

SMARTER SNACKING On-the-go consumers will continue to look for nutritious but indulgent foods that are convenient, portable (think single-serve packaging) and easy to transport or prepare. Indulgent snacks will be key in 2020 but in smaller portions with healthier ingredients.

ADVENTUROUS FLAVORS Unique fruits (think prickly pear, yuzu, blood orange), textural sensations, global flavor profiles from places

SOCIAL MEDIA Not a second goes by when someone isn’t posting a photo of food on social media, and this trend is only going to get stronger in 2020. With this in mind, color and visual appeal are more important than ever, according to Flavorchem. However, brands are now opting for natural color enhancements over artificial colorings.

For more information on the latest flavor trends, visit www.flavorchem.com.

NED Magazine | First Quarter 2020 • 33

TRENDS

Dairy Farmer George Andrew gives school children a virtual tour of his farm.

VIRTUAL TOURS EDUCATE STUDENTS ON FARMS, DAIRY INDUSTRY

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BY CAROLINE K. REFF

o many of our association members, a farm and its operations are commonplace. Not surprisingly, however, there is a large portion of the general public that has never set foot on a farm, much less understands what it takes to operate one efficiently, safely and profitably.

The American Dairy Association North East aims to change that, as it has, over the past three years, been offering virtual farm tours to school children from Pre-K to Grade 12 in order educate the youngest generation about the foundation of the dairy industry. Due to geography and tight budgets, many schools cannot offer their students field trips to a dairy farm.

Instead, the farm is brought to them through technology.

34 • Northeast Dairy Foods Association, Inc.

“It’s a perfect fit for these digital natives, who are using technology every day to talk to friends and family, access school materials, play video games and track down information,” said Emma Andrew-Swarthout, director of dairy industry image, American Dairy Association North East. “Connecting with others through technology doesn’t faze them at all.”

The association started the program in 2018 and now promotes its virtual tours through social media within a five state region —New York, New Jersey, Pennsylvania, Delaware and Maryland (as well as the Washington, D.C., area). The program is farmer and Checkoff funded, so participation is free to schools. The virtual field trips are not just for fun, however.

Teachers work them into lessons built around core learning

TRENDS

standards and receive FAQs and definitions of terms to enhance the educational element of the tours with their classes.

In the spring of 2019, the program was revamped to be more age specific. Students in Pre-K through Grade 3 watch a farmer give a live 30-minute tour, offering them a baseline of the work required to care for the animals and maintain the farm on a typical day. Grades 4 through 6 get a more detailed 30-minute tour, again led by a farmer, that explains how a calf is born or explores some of the more technical aspects of the milking process. Middle and high schoolers get a longer and more complex presentation where farmers discuss the science and technology that plays a critical role in running a farm, as well as how dairy farming is helping the economy.

Students at this level are interested in where their food comes from, animal health and welfare, sustainability, nutrition and more. No matter the grade level, however, the presenting farmer is always available at the end of the virtual tour to answer questions from the students in real time. If students are unable to participate in the live virtual tour, they do not miss out. According to Andrew-Swarthout, the American Dairy Association North East posts each tour on YouTube.

Andrew-Swarthout tries to find new farms to tour every few months, and she is happy to receive recommendations.

There are some requirements, however. Farms must have good Wi-Fi and cell phone service in order for the virtual session to work properly, and the farmers leading the tour must not only be knowledgeable but comfortable in front of a camera or computer screen.

When looking for her first farm, Andrew-Swarthout had the perfect fit — the farm she grew up on, El-Vi Farms, LLC, in Newark, New York. Her dad, George Andrew, is always happy to lend a hand by giving a virtual tour.

“I get excited when someone takes time out of their busy

day and shows an interest in what I do for a living — that means a lot to me,” he said. “I love to answer questions from students who have a genuine interest in the field of agriculture, particularly dairy farming. Yes, they can Google something or look for answers through social media, but these virtual tours give them the chance to talk to a real farmer, someone who does this for a living and really knows how things are done. Google doesn’t milk my cows three times a day, so if you want the real answer, talk to a real farmer.”

George grew up on a dairy farm and raised his children there, too. He understands that many school children have never been to a working dairy farm, don’t know where their food comes from or can’t understand all that goes into operating a successful business.

“Part of the mission of our farm is to be a good neighbor and citizen,” George added. “This gives us the opportunity to share what we love to do every day. The actual farm visit is still the gold standard, of course, but it’s not as efficient and practical. Since we have the technology at our fingertips, we’re able to bring the farm to thousands of students, where a typical field trip might bring only 30 students here. I was concerned that it would be impersonal, but I’m actually finding that the way the younger generation is used to communicating through technology makes it so they don’t think it’s much different than talking face-to-face.”

“Farmers love what we do and love to give back. We’re not doing virtual tours to try to put more money in our pockets and sell more milk,” he said. “If that happens, great, but I’m doing this to connect with people and meet a need that I’ve been blessed to have.”

For more information on virtual school tours through the American Dairy Association North East, visit https://www. americandairy.com.

NED Magazine | First Quarter 2020 • 35

MemberProfile

The Women of Holland Farms Have Continued Family Legacy

Heather Potrzeba, right, and her mother, Suzanne Harrington, are two of three women keeping Holland Farms going strong.

BY CAROLINE K. REFF

I

f you’ve never had a jelly bun from Holland Farms Bakery & Deli, then you are missing out. With a history planted firmly in the dairy industry, Holland Farms in Yorkville, New York, has put itself on the map, not only for its delicious baked goods, deli and dairy products, but for the two generations of strong women who have continued a 90-year family legacy.

In the 1920s, John Piersma, a young man of only 21, built a creamery on his farm with an investment of just $1,000.

Back then, Piersma was bottling his own milk at what was then Holland Farms. In 1928, Piersma started delivering milk door-to-door and was soon joined by his new bride, Evlyn, who also helped with the deliveries. In 1955, Piersma decided to expand his business by opening the Holland Farms Dairy Bar and Bakery in Yorkville, where he hired two Dutch bakers to produce what has become the shop’s famously delicious baked goods. In 1966, the business moved to its present location at 50 Oriskany Blvd. in Yorkville, where it remains today. In the 1970s, two of Piersma’s brothers, Herman and Richie, took over

36 • Northeast Dairy Foods Association, Inc.

the bottling business and changed the name to Holland Dairy, an operation they continued until the early ’90s. It was around the same time that the name of the shop changed to Holland Farms Dairy Bakery & Deli.

In 1980, two of Piersma’s daughters, Suzanne Harrington and Marolyn Wilson — both divorced with seven children between them to support — took over the family business from their father. Over the years, their children worked there, too, including Heather Potrzeba, who today is the owner and general manager. She has fond childhood memories of her grandfather beeping the horn under her window at 4 a.m., so she could go help out at the store. From peeling eggs for salads as a child to working as a clerk at age 15 and managing the front of the store by 17, Potrzeba didn’t realize then that one day she would be in charge. In fact, she left the business for a while to pursue college before working as a special education teacher for 18 years. But, as time went on, the three women started talking seriously about Potrzeba’s interest in taking over the store and solidifying Holland Farms for the future.

MemberProfile “My siblings and cousins took other paths around the country and the world,” she said. “I was the only one who expressed an interest in taking over the business.”

Today, Potrzeba represents the second generation of women in her family running the operation — something that was certainly not a traditional path when her grandfather started the business so many year ago. She is certain, however, that he would be supportive of the decision.

John Piersma started delivering milk in the 1920s.

The original farm.

“My grandfather was an entrepreneur, and he was around when my mother and aunt were running the business,” she said.

“He was so happy to see the business grow. There was never a question that the women in this family couldn’t do this. He was a really good man, and he would have loved it that the family is keeping Holland Farms going strong.”

Despite growing competition from big retailers and chain coffee and donut shops in the area, Holland Farms Bakery & Deli is still thriving and today employs 70 people. To stay competitive, it has added a coffee bar and a custom cake service. Potrzeba also hopes to increase shipping capabilities in the near future.

“I’m a dreamer, so the business has got to keep growing, and it can’t become static. When my mother and aunt hesitate on something, I say, ‘Let’s do it!’” Potrzeba said. “We need to keep coming up with fresh ideas, making different products and continuing to stay with the trends, while also making sure to maintain the quality of our staple products to keep people coming back.”

And, people do keep coming back for dairy products, a large line of milk, eggs, eggnog and, of course, the baked goods.

“We have competition in every direction, but we’ve managed to stay above it,” said Potrzeba. “Customers return because they want locally sourced fresh products — probably more so today than ever. Our dairy products come from five or six area farms, and people appreciate that. And, our baked goods continue to be made daily on site. ” Potrzeba and her husband have two boys, ages 12 and 15, who may just take over the family business one day, but only time will tell. Until then, she feels privileged to be able to carry on the legacy that keeps Holland Farms Bakery & Deli — and its famous jelly buns — going strong.

Sisters Suzanne Harrington, left, and Marolyn Wilson, right took over the business in 1980.

NED Magazine | First Quarter 2020 • 37

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38 • Northeast Dairy Foods Association, Inc.

YOU COULD BE THE NEXT NDFA CUSTOMER OF THE YEAR NDFA to Recognize Customer of the Year at 2020 Convention

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he Northeast Dairy Foods Association, Inc., will present its annual Customer of the Year Award at the 2020 Northeast Dairy Convention, August 12-14, 2020, at the Mount Airy Casino Resort in Mount Pocono, Pennsylvania.

The award will recognize the loyalty, leadership and supportive role customers play in the important and evolving customer partnership within the ever-changing and complex dairy processing, manufacturing and distribution industry in the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

Members of the Northeast Dairy Foods Association should have received nomination forms for the Customer of the Year in the mail already, and these are also available online at www. nedairyfoods.org. Completed forms must be returned to the NDFA by Friday, May 15, and the recipient will be chosen and contacted by Monday, June 1.

Nominations will be judged based on the following criteria: • Efforts to sell, promote, merchandise, increase dairy sales and bring attention to the dairy sections in their operations • Interaction with a dairy product supplier • Ability to support their communities • Efforts to support their local environment • Works to recognize the agriculture industry in their regions • Activity with local charities • Longevity, loyalty within their industry The 2019 Customer of the Year Award was presented to Sonbyrne Sales, Inc., at last year’s convention.

For more information, contact the Northeast Dairy Foods Association, Inc., at 315-452-MILK (6455).

MemberNews

Erika Vrooman, agriculture science major at SUNY Cobleskill, received a $2,000 scholarship award from NDFA’s Bruce W. Krupke in 2019.

SCHOLARSHIP APPLICATIONS AVAILABLE NOW TO NDSA & NDFA MEMBERS

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BY ALEX WALSH

or decades, the Northeast Dairy Suppliers Association, Inc., has been a tremendous supporter of the Northeast Dairy Foods Association in many ways. This year, it has shown that support by opening up its scholarship applications to NDFA members and their employees who have college-age children. Additionally, NDSA has increased the amount each scholarship recipient will receive, awarding 10 scholarships to college students for the 2020-21 academic year totaling $20,000, a $5,000 increase from last year.

Applicants must be an immediate family member of a current NDSA or NDFA member company or student member of NDSA, enrolled for the 2020-21 academic year as a full-time college student with a minimum of 12 credit hours and a GPA of 2.5 or greater to be eligible.

The scholarship committee will award five $2,500 scholarships to students whose majors are related to the dairy/food industry or an agriculture program related to the dairy/food industry.

Five $1,500 scholarships for students studying any major will also be awarded.

“Each year, we receive many strong applications for scholarships,” said Bruce W. Krupke, executive vice president. “It

is fantastic to see young, ambitious students, with solid backgrounds who are seeking a career in the dairy or food industry and pursing other goals.”

“The Northeast Dairy Suppliers Association is honored and pleased to present students with the opportunity to receive a scholarship again this year,” said Ozzie Orsillo, president of the NDSA. “We encourage young people to continue their studies, especially those seeking a career in the dairy industry.

We hope that the scholarship is financially helpful and is our way of providing a benefit to companies for being a member of NDSA or NDFA.” Scholarship information can be found on the associations’ respective websites at www.neastda.org or www.nedairyfoods. org. Applications are due by Monday, June 1, 2020, and applicants will be notified if they have been awarded a scholarship

by Wednesday, July 1, 2020.

Funding for the scholarships comes directly from the association’s annual dairy industry clambake, members’ dues and sponsorships of annual dairy industry events.

Alex Walsh is the director of membership and communications for NDFA. NED Magazine | First Quarter 2020 • 39

MemberNews

2019 NDSA ANNUAL PLANT TOUR SETS RECORD ATTENDANCE

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BY ALEX WALSH

ach year, the Northeast Dairy Suppliers Association coordinates a tour of a dairy processing facility, usually in the Northeast, to allow members to see the plant’s operation and get a first-hand look at what goes on inside. It is also a great opportunity for NDSA members to network with the location’s plant manager, staff and other key personnel.

In 2019, NDSA elected to offer a tour of the HP Hood plant in Batavia, New York, and a record number of 50 had the opportunity to go through the former Muller-Quaker yogurt plant. The plant closed in 2016 but was later purchased by HP Hood and underwent a $205 million expansion and renovation.

“HP Hood employees provided an in-depth guided tour as association supplier members walked through the plant and witnessed various aspects of production,” said Bruce W. Krupke, executive vice president of the Northeast Dairy Foods Association.

Attendees were amazed at the new technology that went into the expansion efforts and were particularly impressed with the cleanliness and efficiency of the operation.

40 • Northeast Dairy Foods Association, Inc.

“So many members wanted to see the plant that, unfortunately, due to capacity, some were unable to be a part of this tour, which was disappointing,” said Krupke. “But, it also indicates the level of enthusiasm our members have for learning, growing and networking through best practices in the workplace. We are looking at alternatives for future tours in order to accommodate a larger group.”

Following the tour, NDSA hosted a networking cocktail party and dinner. Seventy people gathered at the Batavia Downs Hotel.

“The Northeast Dairy Suppliers Association is very appreciative to HP Hood, the Batavia facility plant manager, Mike Corporon, and his staff and employees for their generosity in welcoming tour attendees. It was a great day,” said Krupke.

The plant tour date and location for 2020 has yet to be determined. Any suggestions are welcomed. Please email info@neastda.org.

Alex Walsh is the director of membership and communications for NDFA.

MemberNews

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MemberNews

NEW MEMBERS

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he following new members recently joined Northeast Dairy Foods Association Inc., and the Northeast Dairy Suppliers Association, Inc. For more information about the benefits and services

DEEP DAIRY PRODUCTS, LLD 61 Swift St. Waterloo, NY 13165 315-220-8013 Subodh Amin, general manager Sra2118@yahoo.com Gary Bensley, plant manager bensleygary@yahoo.com Adam Brown, production manager/PPS ajbrown@me.com

INTEGRITY COST CONSULTING 111 Riverglen Rd. Liverpool, NY 13090 315-935-9379 Steve Thompson, president steve@integritycostconsulting.com

LAND O’LAKES, INC. 405 Park Drive Carlisle, PA 17015 717-512-3007 Ron Davis, Member Relations Operations Manager RJDavis@landolakes.com Brittini Davis, Eastern Milk Supply Manager bstreichler@landolakes.com

available in both the Northeast Dairy Suppliers Association, Inc., and the Northeast Dairy Foods Association, Inc., contact Alex Walsh, director of membership and communication, at 315-452-MILK (6455) or aw@nedairyfoods.org.

Amanda Rife, Member Relations & Quality Manager anrife@landolakes.com Matthew Wohlman, Government Relations mwohlman@landolakes.com

LINEAGE LOGISTICS PFS, LLC 45 Campanelli Dr. Westfield, MA 01085 www.lineagelogistics.com Jason Adams, sales manager 413-562-0885 jaadams@lineagelogisitcs.com

NALCO WATER 4673 Watch Hill Rd. Manlius, NY 13104 315-558-7823 www.ecolab.com/nalco-water/ Mike Osterhaudt, account manager 315-558-7823 Michael.osterhaudt@ecolab.com

MONTROSE ENVIRONMENTAL 50 Hudson Ave. Chatham, NY 12037 518-951-5766 www.montrose-env.com Paul Greene pgreene@montrose-env.com

Ryan Brocamp rbrocamp@montrose-env.com Bernie Sheff bsheff@montrose-env.com

OLIVIERI RECRUITING 252 State St./Suite 203 Schenectady, NY 12305 518-812-9927 www.olivierirecruiting.com Gina Olivieri, CEO Gina@olivierirecruiting.com

PACKAGING CORP. OF AMERICA P.O. Box 584 4471 Steelway Blvd. South Liverpool, NY 13088 www.packagingcorp.com George Kerr, general manager 315-461-4301 gkerr@packagingcorp.com

SURPASS CHEMICAL CO. 1254 Broadway Albany, NY 12204 518-588-0007 www.surpasschemical.com Louis Carrazzone, sales Louis.carrazzone@surpasschemical.com

NED Magazine | First Quarter 2020 • 43

MemberNews

MEMBER & INDUSTRY NEWS Byrne Dairy celebrated its Founders Day on Feb. 3, marking 87 successful years since Matthew V. Byrne established the company. Congratulations!

Upon the retirement of Steve Murphy, Mary Wilcox was recently named executive vice president of The Dairy Practices Council, a nonprofit organization of education, industry and regulatory personnel concerned with milk quality, sanitation and regulatory uniformity publishing education guidelines for the dairy industry.

Dopkins & Company, LLP, a full service accounting and consulting firm out of Buffalo, New York, announced that Andrew J. Reading, CPA, has been named a partner with the firm. A member of the Dopkins Assurance Service Group, he serves as the leader of the firm’s food and beverage industry service group with specializations in dairy and cooperatives.

During his tenure, he has regularly advised food and beverage clients on complex business transactions related to mergers and acquisitions, significant contracts with customers and financing arrangements. Additionally, he has led numerous improvement initiatives for clients related to profitability and internal controls.

Cream O Land Dairy’s Cream O Land product was ranked in the top ten brands of refrigerated whole milk that posted double-digit gains, according to research from the Chicago-based market research firm IRI in a February article on DairyFoods. com. Cream O Land posted a 122.4% dollar sales increase and a 117.5% increase in unit sales. Another positive was HP Hood’s 44 • Northeast Dairy Foods Association, Inc.

Hood Lactaid, which saw an increase of 11.6% in sales and a 9.5% rise in unit sales in 2019.

With the emerging interest from consumers for differentiated milk and dairy products with specific beta-caseins, leading food laboratory Eurofins Scientific now performs a test to detect A1 and A2 beta-caseins. Eurofins offers analysis to be done on all products containing caseins, and the methods have so far been validated on everything from raw milk to finished product, including homogenized, pasteurized fluid milk, milk powder, yogurt, cheese and butter. Since the launch of this in November 2019 in the U.S., the company has received a great deal of interest both domestically and abroad.

Herbein + Company, Inc. announced that David W. Stonesifer, CPA, has become Herbein + Company, Inc.’s managing partner as part of the firm’s previously released succession plan. Stonesifer succeeds Michael J. Rowley, CPA/ABV, CVA, CFF. Rowley previously succeeded Carl D. Herbein, CPA, who founded the firm in 1972. Under their leadership, Herbein has grown to be recognized as one of the top 115 largest firms in the United States, according to Accounting Today. While his focus is soundly on the future, Stonesifer is also appreciative of all he’s learned from Rowley and Herbein. “I am very cognizant of the responsibilities I will be inheriting, including our clients’ success, our team’s growth and their families security and prosperity, and our continuing support of the communities in which we serve. Carl and Mike have set the bar high, but

MemberNews

knowing our team and our culture, I am confident that our firm’s future is very strong,” he said.

The International Dairy Foods Association is seeking applicants for its 2020 summer internship, which will offer one undergraduate or recent graduate firsthand experience in Washington, D.C., with the association’s advocacy efforts on dairy policy with lawmakers on Capitol Hill and federal officials in regulatory agencies. The position is paid and will begin in May or June for 10 to 12 weeks. Students with an interest in food and agriculture policy are encouraged to apply. Applicants must be currently enrolled or have recently graduated from an accredited college or university while pursuing a Bachelor of Science or Bachelor of Arts degree with a major in business, political science, international affairs, agriculture, the food and beverage industry, food science or a related field. For more information, visit idfa.org or contact Heather Soubra, IDFA, 1250 H St. NW, Suite 900, Washington, D.C., 20005.

On Jan. 1, the KROHNE Group welcomed a new chairman of the advisory board and a changed executive board.

After almost 40 years as chairman of the advisory board, Prof.

Dr. Rolf Theenhaus has retired, and Michael RademacherDubbick, who has led the company for 25 years as managing shareholder, was appointed the new chairman. Dr. Attila Biligic is now the CEO and speaker of the KROHNE Group’s executive board. He has been a board member since 2017 and chief technical officer since 2019. In addition, Stephan Neuburger will oversee growth in new business areas as chief business development officer. He has served on the management board since 1999. Chief financial Officer Ingo Wald and Chief Sales Officer Ansgar Hoffman have been appointed to the executive board. Headquartered in Duisburg, Germany, KROHNE is a global manufacturer and provider of process instrumentation, measurement solutions and services.

In January, supply chain leader QCS Purchasing named Ken Klug as its new president and CEO. In his new role, Klug will oversee all operations for QCS Purchasing, a nonprofit, member-owned cooperative that provides supply-chain solutions to the food and beverage industry.

In January, Ronnybrook Farm Dairy was recognized for producing the No. 1 chocolate milk in New York state in a review posted to YouTube by afoolzerrand.com. The reviewer touted Ronnybrook’s Creamline Chocolate Milk as “phenomenal,” as well as “creamy, chocolatey, salty, malty…It’s everything you want.” To watch the video, go to https://youtu.be/kFRAIqwrOwI. Schenck Process has announced its new hygienic bag dump station for manually emptying bulk solid materials. It is loaded with features that are important to manufacturers in sanitary processing environments and is offered in both filtered and non-filtered styles. All models include interior and exterior finishes to meet 3-A sanitary requirements, ferrules mounted for use with clean-in-place systems; large openings that enable a sanitary method for internal CIP cleaning; removable internal bag rest, all stainless steel diaphragm bodies, 304 stainless steel bag cages; 16 ounce singed polyester, side removal bags that meet 3-A requirements; flanged exhaust, 7 gauge stainless steel housing and hopper and hinged doors with gas springs. The hygienic bag dump stations will be manufactured in the new Schenck Process Whitewater, Wisconsin, dedicated stainless steel production plant.

Stewart’s Shops’ Holiday Match program raised more than $1.79 million for local children’s organizations. From last Thanksgiving through Christmas, customers donated more than $895,000 to the program, which was matched penny-for-penny

by Stewart’s – a 5% increase from 2018. One hundred percent of the funds raised at Stewart’s 336 shops were given to local nonprofit children’s organizations.

In January, Stewart’s Shops President Gary Dake got behind the register at two locations to personally thank customers and shop partners for their support in this successful fundraising effort. Dake visited the shop at 225 Ballard Rd., Gansevoort, New York, which was one of the top collection shops with $6,307 raised, as well as the shop at 777 Quaker Rd., Queensbury, New York, which was one of the highest growth shops with an increase of 67.6% over the previous year. The Holiday Match program has been in place since 1986. A listing of all charities that received funding is available at www.stewartsshops.com.

NED Magazine | First Quarter 2020 • 45

E-NEWSLETTER HAS NEW LOOK, MORE INFORMATION, OPPORTUNITIES TO SHOWCASE YOUR COMPANY

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Do you sell products or services to companies that process, manufacture and distribute dairy products?

Let us help you make a splash.

Boost your bottom line and brand awareness within the industry. Contact us today to learn about the opportunities.

Hannah Gray, Relationship Manager hannahg@nedairymedia.com 315-445-2347 Ext. 115 46 • Northeast Dairy Foods Association, Inc.

any of you may have noticed that our digital newsletter, sent exclusively to NDFA and NDSA members each Wednesday, has a new look. It’s been rebranded and redesigned as the Northeast Dairy Connection in partnership with Northeast Dairy Media, which also produces our quarterly magazine.

“One of the perks of membership is the ability to receive the most current news available about our industry, recent legislation and members news, as well as other topics that impact all of us on the regional, national and international levels,” said Bruce W. Krupke, executive vice president, NDFA. “The new bright and modern format is easy to navigate and gives you instant links to articles and other information from every corner of the dairy world.”

This Weekly Dairy Newsroom also includes a link to the Northeast Dairy Media Buyers Guide, information on upcoming educational programs, conferences and training; the most recent dairy pricing and economic news, information on new members and a list of upcoming “Dairy Days,” to help you plan related marketing or celebratory events. Other information includes links to NDFA and NDSA’s social media, connections to our endorsed service partners, reminders about upcoming events like our July clambake and August Northeast Dairy Convention, as well as access to our most recent edition of Northeast Dairy magazine in a digital format. It’s all just a click away!

Because so many of our members look forward to this newsletter each week, it’s also a great opportunity to advertise.

With a strong open rate of 26% and a click-through rate of 24%, it is the ideal vehicle to advertise your company and link to your own website.

Two advertising options are available to members: • A spotlight gives your company a 50-word description at the very top of the newsletter, as well as a logo and an ad in the body of the text that can link back to your company’s website • A banner ad is placed within the body of the newsletter and can also link back to your website.

If you’d like to advertise, contact Bill Brod at billbrod@ nedairymedia.com or at 315-445-2347 x138.

Check your inbox every Wednesday for the latest news!

MemberNews

Northeast Dairy welcomes our new readers from the Pennsylvania Association of Milk Dealers.

We look forward to sharing your news in upcoming issues of our magazine.

2020 Northeast Dairy Events

Northeast Dairy Convention Wednesday, Aug. 12 through Friday, Aug. 14 at Mount Airy Casino Resort in Mount Pocono, Pennsylvania.

Northeast Dairy Industry Golf Tournament and Clambake Wednesday, July 8 at Rogues Roost Golf Course and The Spinning Wheel Event Center in North Syracuse, New York.

NED Magazine | First Quarter 2020 • 47

MemberNews

T

PLAN NOW TO CELEBRATE DAIRY DAYS IN 2020 here are so many opportunities to promote the dairy industry in 2020. Here are just some of the months or specific dates dedicated to various dairy products or other topics connected to the

success of the dairy industry. Think about what you can do to connect your customers to these fun-filled days! Send photos and a brief description of your events to Northeast Dairy Media at Creff@nedairymedia.com.

APRIL 2020

SEPTEMBER 2020

April 4: Vitamin C Day April 6: Student Athlete Day April 10: Farm Animals Day April 11: Cheese Fondue Day April 12: Grilled Cheese Day April 17: Cheeseball Day April 20: Cheddar Fries Day April 22: Administrative Professionals Day April 22: Earth Day April 22/23: Take Your Son/Daughter to Work Day

NATIONAL FOOD SAFETY EDUCATION MONTH HISPANIC HERITAGE MONTH

MAY 2020

Oct. 2: National Diversity Day

NATIONAL OSTEOPOROSIS MONTH May 10: Mother’s Day May 15: National Pizza Party Day May 25: Memorial Day

JUNE 2020 NATIONAL DAIRY MONTH June 1: World Milk Day June 4: National Cheese Day June 21: Father’s Day

JULY 2020 NATIONAL ICE CREAM MONTH July 4: Independence Day July 14: National Mac and Cheese Day July 16: Get To Know Your Customer Day July 24: 2020 Olympic Summer Games Begin July 25: National Wine and Cheese Day

Sept. 7: Labor Day Sept. 13: National Grandparents Day Sept. 27: National Chocolate Milk Day Sept. 29: National Coffee Day Sept. 30: World School Milk Day

OCTOBER 2020 NATIONAL PIZZA MONTH Oct. 12: National Farmers Day Oct. 12-16: National School Lunch Week Oct. 31: Halloween

NOVEMBER 2020 NATIONAL EAT SMART MONTH Nov. 3: Election Day Nov. 4: National Eating Healthy Day Nov. 5: National Quesadilla Day Nov. 11: Veterans Day Nov. 11: National Sundae Day Nov. 15: America Recycles Day Nov. 26: Thanksgiving Day

DECEMBER 2020 Dec. 4: National Cookie Day Dec. 10: Hanukkah Begins

AUGUST 2020

Dec. 13: National Hot Cocoa Day

August 2: National Ice Cream Sandwich Day August 8: National Frozen Custard Day

Dec. 31: New Year’s Eve

48 • Northeast Dairy Foods Association, Inc.

Dec. 25: Christmas

NYS MOVES TO MAKE ALCOHOL-INFUSED ICE CREAM LEGAL

A

nd you already thought ice cream was delicious! New York State lawmakers are considering allowing hard liquor to be added to ice cream, part of a list that already includes beer, hard cider and wine. If the bill passes, it would limit the alcohol content to less than 5% — the same as existing “boozy” ice cream flavors, and consumers would still need to be 21 to purchase it. Gilligan’s Island from Sherburne, New York, lobbied for the change in the law following its lead into beer ice cream, which was made legal in 2018. Alcohol was first introduced to ice cream

in 2008 thanks to a lobbying effort led by NDFA member Mercer’s Ice Cream of Boonville, New York. Mercer’s is widely known for its wineflavored ice creams like Chocolate Cabarnet and Peach Wine Zinfandel.

Last year, Haagen-Dazs introduced a new line of alcohol-infused ice creams in states where hard liquor ingredients are legal. The Haagen-Dazs line has only about half of the alcohol content that is allowed in New York state.

Boozy ice cream has developed a following at some scoop shops, particularly in New York City, as well as wineries and breweries.

(amazing)

Source: PPAI 2017 Consumer Study

NED Magazine | First Quarter 2020 • 49

BusinessPlanning

THE NEED FOR SUCCESSION PLANNING Don’t Let a Triggering Event Take Down Your Family Business

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BY CAROLINE K. REFF

orty years ago, your father and mother started a family business. They worked hard, and the business grew. Maybe as a child, you helped behind the counter or, as a teen, started to learn some of the skills required on the production end of the business. Your three siblings did the same. At some point, however, you and your siblings each had to decide whether to make the family business a career. Maybe your parents influenced you, pressuring you to stay with the business or conversely deciding that you needed to go to college and/or work in the outside world first to gain some experience. As the years went on, some of the siblings took on roles with the business and others did not. Now, mom and dad are ready to retire but will still depend on the income from the business and want it to continue to be family-owned and operated. So, what happens now?

50 • Northeast Dairy Foods Association, Inc.

The answer is not an easy one, and the details for each family situation certainly differ, but the need for preparation is the same, according to Daniel G. Van Der Vliet, executive director, Smith Family Business Initiative at Cornell University.

“Succession planning should be viewed as a process, not an outcome, and, as such, an opportunity to craft a desired pathway forward for all interested parties,” said Van Der Vliet, who noted that families should not wait until there is a disruption — death, divorce, retirement, the possibility of a sale or acquisition, etc. — before discussing the future and putting a plan in place.

A particular challenge to succession planning is the separation of family, business, and ownership — what we commonly refer to as the three-circle model of family business,” he explained. “Often, in smaller businesses, people

BusinessPlanning wear multiple hats simultaneously, and, as such, fail to see the differences between family and business decisions and outcomes.”

Many don’t see the need for a formalized plan, but it is particularly important for a family-run business to have one, as there are so many factors, and emotions can run high in a crisis or transition. What if parents start a business and gift each of the children a share of the company, yet only a few of the children actually work for the business? What if a parent dies or steps away from the business? What about spouses? Does he or she retain a piece of the company if the couple divorces?

In many cases, small family businesses tend to have a harder time discussing these unknowns, no less formalizing some kind of written agreement. “Families are great at unwritten rules, informality and going with the flow,” said Van Der Vliet. “In a family business, very little gets delegated, and plans are not always spelled out but instead tend to be assumed.”

“The most important factor is going through the process,” said Van Der Vliet. He explained that 50% of business failures are precipitated by an owner’s death. That is why meaningful discussions and more formalized succession planning are vital to the continuation of a family business.

Van Der Vliet encourages family businesses to treat family members like any company would treat its employees. In any other type of working environment, an employee would have some sort of contract, an expectation of employment, education requirements, a negotiated salary, etc. However, in the case of family businesses, “a lot of that goes out the door,” he said. “Often, family business owners think, ‘Why would I need that? I know my son or daughter. I don’t need to have these discussions or have anything in writing. They’ll know what to do.’”

Putting together a succession plan “removes the emotion from the decision,” said Van Der Vliet, who noted that this kind of agreement can range from formal legal documents to something written down in a notebook. He suggests some type of “family constitution” or protocol that outlines a set of rules to follow in regard to each person’s role or ownership in the business. Another good option is a buy/sell agreement, which outlines ownership or the transfer of ownership both in and outside of the family, should a disruption occur.

“Essentially, what we’re talking about here is called ‘governance,’ and that word has a tendency to scare families,” said Van Der Vliet. “Still, it’s just a formal word for a discussion and possible documentation to clearly outline the primary (continued on next page)

NED Magazine | First Quarter 2020 • 51

BusinessPlanning owners of the business, the company’s long- and short-term goals, the qualifications that members of the next generation need to join the business, and the expectations regarding input and profits for those working in the business versus those who are not part of the day-to-day operations. Putting this kind of work into the business before a triggering event can take some of the emotions and/or sense of entitlement off the table and help everyone understand the expectations and goals needed to keep the family business going strong.”

According to Van Der Vliet, having a board of directors, or at least a board of advisors, made up of primary shareholders and owners, as well as a few non-family members, can be advantageous to succession planning and good governance.

Having people outside of the family participate on a board is usually beneficial, as their primary interest is in making solid business decisions and offering objective ideas and observations that are separate from the emotions that can run deep in even the closest of families.

From the corner store to a national brand, family businesses span the economic spectrum, but, regardless of the size, “matters of family are fairly universal no matter how many zeros are added to the bottom line,” Van Der Vliet said. “Addressing the difficult, yet necessary, decisions up front will help make things easier later on.”

WHERE TO START? Are you thinking of putting together a succession plan for your family business but aren’t quite sure how to get started? The Smith Family Business Initiative at Cornell University in Ithaca, New York, has a variety of educational and networking tools, as well as resource referrals for family business owners, successors and students. For more information, go to: https://www.business.cornell.edu/familybusiness.

This site also offers a directory of university-based family business programs across the globe through the Family Business Alliance.

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This partnership allows us to have a digital arm that combines local, regional and national insights from more than 1.5 million campaigns delivering over 285 million leads. Combining the power of Northeast Dairy Media print products and LocaliQ digital solutions allows us to further reach your targeted audience and continue to propel success for all aspects of your campaigns.

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We are a trusted partner of NDFA and NDSA.

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We have a full range of digital marketing services and can help build the most optimum package for your business and budget.

We have a partnership with the USAToday Network that ensures we reach the most sizeable and diverse audience possible.

We have a vested interest in your success.

Contact us today to get a free digital audit of your business website with recommendations: William Brod billbrod@nedairymedia.com 315.445.2347 x138

WEBSITE DEVELOPMENT Site designed for your industry and customer needs. Clear calls-to-action drive form fills, calls, emails and chat. Built for mobile devices first, then desktop, for the best responsive experience.

BRANDED CONTENT We help you connect with your audience in unique ways that drive engagement and grow your business. Seventy percent of consumers prefer learning about products through content.

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SEARCH MARKETING Our proprietary technology optimizes based on conversions (not clicks). Our sponsorship with USAToday Network ensures your campaign reaches where 98% consumers search with transparent results.

LISTINGS MANAGEMENT Inaccurate business directory listings lead to missed opportunities. Getting your business listed across the internet is the best way to be found, attract new customers and increase revenue.

No matter what you offer, potential customers are looking for it online. Are they finding you?

GEO-FENCING Powerful, efficient and accurate way to target specific businesses and get a leg up on your competition with mobile advertising.

KEYWORD TRACKING One of the major benefits to a properly executed local campaign is a sharp increase in your local keyword ranking.

Your directory listings should be optimized for critical keywords that your potential customers are using in their searches.

Use our proprietary Client Center hub to measure your performance.

REVIEWS Manage your online reputation and make sure you look good in your customers’ eyes. Use our proprietary Client Center hub to monitor reviews, respond to them in real time and stay on top of your online reputation.

SOCIAL MEDIA STRATEGY/SET UP We help set up your social media presence and can help more people discover your business, engage with you and choose you through an organic and paid social media advertising strategy.

SOCIAL ADS Our smart optimization technology uses artificial intelligence (AI) to maximize leads (form fills, phone calls, website conversions) using machine learning to deliver the best results.

LEAD MANAGEMENT Use our Client Center for easy review of campaign performance within a single dashboard. View leads via email or mobile. Play back phone calls and respond immediately to leads.

RETARGETING Maximize your marketing by getting web visitors to return to your site over and over. Retargeted viewers are 70% more likely to convert than the average NED Magazine online user. | First Quarter 2020 • 53

BusinessPlanning

2020 STATE TAX WITHHOLDING CHANGES MAY WARRANT ATTENTION

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BY GINA VONO

he IRS recently released the final version of the 2020 Form W-4, Employee’s Withholding Certificate. The form contains major changes, including several new input elements for federal income tax withholding calculations.

(For more information, visit https://www.irs.gov.)

In most states, employers are also required to withhold state taxes, as well as federal income taxes from employees’ wages. Many states require employees to complete a state withholding certificate or the IRS Form W-4 for state purposes.

With the major changes to the IRS Form W-4, most states have updated their requirements along with withholding certificates.

Since federal allowances were removed from the redesigned federal Form W-4, the form cannot be used in certain states.

Prior to 2020, Massachusetts, New Jersey, New York, Rhode Island and Vermont were NDFA and NDSA member states that accepted the federal Form W-4 as an alternative to the state withholding certificate. Pennsylvania did not use a withholding certificate. It required employers to calculate the state tax to be withheld from an employee’s wages using a flat percentage rate, currently 3.07%.

With all of these changes, employers will need to carefully review each of the state requirements. Certain states revised their state withholding certificates for wages paid after 2019.

Like the IRS, states will generally not require existing employees to complete new withholding certificates. Rather, the new withholding certificates will apply to newly hired employees and existing employees who wish to adjust their withholdings.

Additionally, states may have specific work requirements for employers to follow when an employee does not complete a state withholding certificate.

Make sure that you’re using the correct state withholding certificate and following the applicable state requirements.

You can locate the state tax information via the IRS website at https://www.irs.gov/tax-profesionals/government-sites.

54 • Northeast Dairy Foods Association, Inc.

Within the NDFA and NDSA membership, the state of New Hampshire does not impose a state income tax on wages. As of Jan. 1, 2020, Pennsylvania uses a flat percentage rate for withholding (no withholding certificate). Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island and Vermont have their own withholding certificates.

EMPLOYERS SHOULD ALREADY BE PREPARED FOR 2020 CHANGES Payroll departments, human resources and others involved in the hiring process will need to be aware and monitor ongoing changes in light of the significant IRS and related state income tax withholding requirements. It may be necessary to adjust certain hiring and/or onboarding procedures. For example, it may be helpful to offer new employees additional time and a private room to complete the Form W-4 and/or state withholding certificate or permit new employees to take the forms home for completion.

WHAT CAN ADP DO FOR YOU? ADP is one of the NDFA and NDSA’s endorsed service members that offers expert advice and prices specifically designed for our members. ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefits administration and help ensure that ADP systems are updated as relevant laws evolve.

For the latest on how federal and state tax law changes may impact your business, visit the ADP “Eye on Washington” web page at www.adp.com/regulatorynews.

Gina Vono is a sales executive with ADP. Reach her at 315-591-6139 or gina.vono@adp.com for more information on how ADP’s endorsed member services can assist your business.

CHEESE LAUNCHES INTO SPACE

A

ccording to the Associated Press, cheese was one of the items rocketed to the International Space Station in February to satisfy the cravings of the astronauts working there. The capsule held a variety of equipment, as well as snacks requested by the two American and one Russian astronauts, which included cheddar and manchego cheeses.

WHAT CHEESE CAN YOU FREEZE? Some cheeses freeze beautifully, but others — well, not so much.

Here are some cheeses you can freeze: • Cheddar • Gouda • Swiss • Havarti • Parmesan • Feta • Mozzarella Try to use the frozen cheese within six months for best results.

And, here are those you shouldn’t freeze: • Brie • Camembert • Stilton • Cream cheese • Low fat versions of most cheeses (Source: Dairy Council of Northern Ireland) NED Magazine | First Quarter 2020 • 55

OSHA UPDATES Dairy Processing Safety: Emergency Action Plans Required

BY JASON WOODRUFF, CIH CSP

T

he Federal Occupational Safety and Health Administration requires all facilities to have an emergency action plan, which also usually includes a fire prevention plan. The regulatory requirements for these are found in 29 CFR 1910.38 and 29 CFR 1910.39.

EMERGENCY ACTION PLANS An emergency action plan needs to cover at least the following: 1. Procedures for reporting a fire or other emergency 2. Procedures for emergency evacuation, including type of evacuation and exit route assignments 3. Procedures to be followed by employees who remain to operate critical plant operations before they evacuate 4. Procedures to account for all employees after evacuation 5. Procedures to be followed by employees performing rescue or medical duties 6. The name or job title of every 56 • Northeast Dairy Foods Association, Inc.

employee who may be contacted by employees who need more information about the plan or an explanation of their duties under the plan.

These topics must be included in the written program of the emergency action plan. Implementation of these topics is critical to effectively managing emergencies at your facility.

As a part of your emergency action plan, your employees should conduct routine inspections of emergency exits, fire extinguishers, emergency lighting, muster points and equipment (flashlights, defibrillators, windsocks, etc.) to ensure their operability and accessibility.

An emergency evacuation drill should be conducted for each shift of operation, including exit due to fire, medical emergency and ammonia (if applicable) evacuation. Alarm sounds for each of these types of emergencies should be recorded, so that they can be played for training purposes, and all personnel can discern between different types of alarms. All personnel should

be involved in an after action review of any emergency drill to identify any deficiencies (locations with no lighting, alarm sounds, etc.) to improve the emergency response actions.

Your facility may need to identify critical operations. These could include continued operation of an ammonia refrigeration system and the ancillary systems associated with the ammonia refrigeration. Where possible, the control systems can be potentially automated or remotely controlled, as this will assist with maintaining these operations in order to prevent catastrophic circumstances. It is a good idea to ensure you have accurate standard operating procedures for shutdown, emergency shutdown and restarting of your critical operations.

FIRE PREVENTION PLAN Your fire prevention plan typically should be nested within your emergency response plan. It may be a good idea to develop one emergency response map and include with it locations of emergency response equipment, as well as fire

OSHAUpdates prevention related information. The fire prevention plan should include, at a minimum: 1. A list of all major fire hazards, proper handling and storage procedures for hazardous materials, potential ignition sources and their control and the type of fire protection equipment necessary to control each major hazard 2. Procedures to control accumulations of flammable and combustible waste material 3. Procedures for regular maintenance of safeguards installed on heat-producing equipment to prevent the accidental ignition of combustible materials 4. The names or job titles of employees responsible for maintaining equipment to prevent or control sources of ignition or fires

5. The names or job titles of employees responsible for the control of fuel source hazards.

Practicing your emergency response and fire prevention plan with employees, as well as local emergency response personnel, will assist you in identifying shortfalls/ resource deficiencies and logistics difficulties. In an emergency, your team will unfortunately default to its lowest level of competent training.

As part of your overall business continuity plan, you want this competent training to turn what could have been a catastrophic event into a minor hiccup.

Jason Woodruff, CIH CSP, is a senior consultant with Partners E n v i ro n m e n t a l C o n s u l t i n g i n Syracuse, New York.

Read the previous issues of Northeast Dairy Magazine online.

Visit issuu.com/nedmagazine NED Magazine | First Quarter 2020 • 57

LegalNews

DRIVERS AND EMPLOYEES SHOULD BE WARY OF CBD PRODUCTS

C

BY RICK SCHWEITZER

ongress, the Food and Drug Administration and the Federal Motor Carrier Safety Administration have all been active in considering the regulation of products containing cannabidiol, commonly referred to as CBD. Drivers of commercial motor vehicles and their employers should not assume that these products are legal, safe or harmless, however.

In the 2018 Farm Bill, Congress removed hemp (defined as cannabis with less than 0.3% THC) from the list of Schedule I controlled substances and made it an ordinary agricultural commodity. The recently passed 2020 Agriculture Appropriations Bill gave the FDA $2 million for research, policy evaluation, market surveillance and issuance of an enforcement discretion policy relating to products containing CBD. But the FDA has not yet established any regulations for the safe use of products containing CBD. The FDA has a listing of resources on its website, www.fda.gov, regarding the use and regulation of CBD. But even though possession and use of CBD oil are legal under the laws of almost every state, and it is used by many 58 • Northeast Dairy Foods Association, Inc.

persons to treat a variety of conditions, including anxiety, depression, nausea, pain, sleep disorders and even acne, to date, the FDA has approved only one CBD product, a prescription drug product to treat two rare, severe forms of epilepsy. It is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement. The FDA has also released a great deal of consumer information on its website on the effects of and concerns relating to use of products containing CBD. In November 2019, the FDA issued warning letters to 15 companies for illegally selling products containing CBD in ways that violate the Federal Food, Drug, and Cosmetic Act. The agency also published a revised consumer update detailing safety concerns about CBD products more broadly.

Based on the lack of scientific information supporting the safety of CBD in food, the FDA has asserted that it cannot conclude that CBD is generally recognized as safe among qualified experts for its use in human or animal food.

The FDA website states: “The revised consumer update outlines specific safety concerns related to CBD products, including potential liver injury, interactions with other drugs,

LegalNews

drowsiness, diarrhea and changes in mood. In addition, studies in animals have shown that CBD can interfere with the development and function of testes and sperm, decrease testosterone levels and impair sexual behavior in males.

Questions also remain about cumulative use of CBD and about CBD’s impacts on vulnerable populations, such as children and pregnant or breastfeeding women.”

Additionally, the FMCSA still requires drug testing of commercial motor vehicle drivers for marijuana and its main hallucinogenic component, THC. A driver who has used a product containing CBD runs the risk of a positive test for marijuana. Because of lack of quality control in production, a person using products containing CBD cannot be certain of the concentration of THC in the product.

Thus, one truck driver recently filed a class action lawsuit in federal court in Illinois against a manufacturer of CBD oil, claiming that the product caused the driver to fail a DOT drug test. The complaint alleges that the defendant advertised its products as containing no THC, the main psychoactive chemical in marijuana. The plaintiff ate some “Just CBD” watermelon gummy rings and later tested positive on a DOT drug test and was terminated. He filed suit under the Illinois Consumer Fraud and Deceptive Trade Practices Act on behalf of himself and all other persons similarly situated.

In addition, the Vermont Department of Motor Vehicles recently placed a driver out of service for 24 hours because he had a bottle of CBD oil in his vehicle. Your company drivers may face similar risks if they use these products.

The FMCSA has said that it will be issuing guidance to motor carriers and drivers on the legal implications of using products containing CBD, but that document is still in the works.

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EMAILinfo@probstgroup.com

NED Magazine | First Quarter 2020 • 59

ADVERTISERS INDEX Ace Sanitary �������������������������������������������������������������������������������������������������������������������������������������������������������������������������55 Afgritech ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������26 Agri-Mark Cooperative �������������������������������������������������������������������������������������������������������������������������������������������������������� 11 Dopkins & Company ������������������������������������������������������������������������������������������������������������������������������������������������������������52 Evergreen Packaging �����������������������������������������������������������������������������������������������������������������������������������������������������������38 Farm Credit East ������������������������������������������������������������������������������������������������������������������������������������������������������������������23 Gelpac, Rouville Packaging �������������������������������������������������������������������������������������������������������������������������������������������������32 H.S. Crocker �������������������������������������������������������������������������������������������������������������������������������������������������������������������������57 Herbein & Company, Inc ������������������������������������������������������������������������������������������������������������������������������������������������������41 Integrity Cost Consulting �������������������������������������������������������������������������������������������������������������������������������������������������������7 Krohne, Inc ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������4 Marathon Energy �����������������������������������������������������������������������������������������������������������������������������������������������������������������BC Nelson-Jameson, Inc �����������������������������������������������������������������������������������������������������������������������������������������������������������60 Northeast Dairy Media ��������������������������������������������������������������������������������������������������������������������������������������������25, 46, 53 Schenck Process ������������������������������������������������������������������������������������������������������������������������������������������������������������������31 The Probst Group �����������������������������������������������������������������������������������������������������������������������������������������������������������������59 Tremcar USA Inc �������������������������������������������������������������������������������������������������������������������������������������������������������������������52 Tri Tank Corp ������������������������������������������������������������������������������������������������������������������������������������������������������������������������26 WestRock ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������� IFC

GIVE US SOMETHING TO CHEW ON. Are you introducing an interesting product?

Your safe, quality food is our business.

Enriching our future while maintaining the values and service we have been bringing to the cheese, dairy, and food industries since 1947.

Have you instituted cuttingedge processes?

Are you welcoming a new hire?

Is your business expanding, moving or changing?

Do you have other news to share?

Northeast Dairy magazine is always looking for Member and Industry News.

Email your information, news releases and/or captioned

photographs to us at editor@ nedairymedia.com.

Growing in 2020: Expanded Team

Improved Resources

New Location

Building on our product and market expertise.

Robust website with easy to use search capabilities.

Updated corporate office with room to grow.

1-800-826-8302 • nelsonjameson.com • sales@nelsonjameson.com 60 • Northeast Dairy Foods Association, Inc.

BeneďŹ ts of Association Membership EXECUTIVE DIRECTOR AND INDUSTRY CONSULTANT SUPPORT

NDFA

Legislative Representation Through Executive Lobbying and Networking Safety and Environmental Information Economic Analysis and Forecasting Continuing Education and Certification Opportunities Industry Spokesperson Emergency Preparedness

PROFESSIONAL COST-SAVING PROGRAMS Dedicated Industry-Specialized Insurance Programs Employee Benefits, Including 401(k) Retirement Program Energy Supply and Consulting Services

NETWORKING AND MEETING EVENTS Annual Northeast Dairy Convention Contact Booth at the Annual Convention Annual Dairy Industry Clambake Hospitality and Sponsorship Opportunities Industry Plant Tours Annual Charity Golf Outing Fundraiser

COMMUNICATIONS AND PUBLIC RELATIONS Quarterly copy of Northeast Dairy Magazine Direct Customer Advertising Opportunities Industry Scholarship Program Membership Directory with Key Contacts in the Dairy Industry Digital Buyers Guide (launching in 2019)

ADVOCACY An association represents your interests before your government leaders, industry and business community. If your business/industry faces major threats or needs support, our association is right there on the front line fighting for you.

NETWORKING Association events, meetings and member directories make networking a reality for you and your peers. This is the one advantage many view as the most important reason to join!

NDSA

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