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TAKE ACTION: If recent reporting on Dairy Management Inc.’s executive salaries has you upset, make your voice heard and take constructive action.

Keeping perspective on Dairy Management Inc. salaries

The executive salaries controversy is one of many issues affecting dairy farmers today.

Of all the jobs in farming, being a dairy farmer, in my opinion, is the hardest job out there.

Think about it: You wake up every morning at the crack of dawn to milk cows, do tons of work in the middle of the day, milk cows again toward the end of the day, and finally end the day when the sun is setting, with just enough time to kiss your loved ones good night before starting the day again in just a few hours.

All the while, you’re not really making a lot of money. In fact, at least the past few years, most dairy farmers have lost money, and many have decided to call it quits and sell the cows.

So, I can imagine the frustration a dairy farmer must feel when they see top executives of the industry’s checkoff-funded organization make millions of dollars in salaries and benefits while most dairy farmers scratch and claw just to break even.

I can imagine the frustration a dairy farmer must feel knowing that their checkoff dollars are funding these salaries while at the same time dairy prices remain stagnant and farmers are going out of business.

A recent series of articles in the Milwaukee Journal Sentinel painted a sobering picture. They showed that the salaries of top executives at Dairy Management Inc., funded through the dairy checkoff, were among the highest of comparable CEO salaries of nonprofits and dwarfed the salaries of top executives representing the beef and pork industries, also funded by their respective checkoffs.

One article revealed that the salary of DMI CEO Thomas Gallagher topped $1 million three times from 2013 to 2017. His compensation also included access to first-class travel and money to cover part of his taxes.

Other executives also got big salaries. DMI’s executive vice president, former USDA Secretary Tom Vilsack, was paid $800,557 in 2017.

In fact, according to the article, Gallagher's pay package was more than double the median salary paid to CEOs at large nonprofits in 2015 and 2016. 

Last year, checkoff programs collected a combined $895 million to promote various commodities. Of that, more than $420 million — 47% — came from dairy farmers, according to the Journal Sentinel. Bottom line, dairy farmers carry a heavier burden when it comes to funding their checkoff.

Of course, no one complains when things are going well, but things aren’t going well for dairy farmers. I don’t care what business you’re in, when things start to sour, everything gets looked at.

Having said that, let’s put this entire checkoff controversy into perspective: It’s one of many issues affecting dairy farmers these days.

The checkoff doesn’t directly control how the dairy price is calculated, nor does the checkoff control the effects of trade. If you talk to anyone who is a so-called expert in dairy pricing, they will tell you that dairy exports are a big deal, and that they can affect a big portion of the farm gate price.

The checkoff also doesn’t directly control what people eat. When it comes to competing against the likes of Coca-Cola and Pepsi, the former of which produces Fairlife, the dairy checkoff’s budget doesn’t even come close. In 2018, Coca-Cola spent $5.8 billion on worldwide marketing, according to Investopedia. That’s more than twice as much as Pepsi spent on marketing, $2 billion. Both companies dwarf the dairy checkoff’s budget.

Most importantly, though, the checkoff doesn’t control how a farmer runs their operation. If a dairy farmer wants to go the conventional route, they can. If they want to direct-market their milk and sell products directly to consumers, nothing is stopping them from doing that. Heck, if they want to produce organic milk and get paid a higher price, that option is available, too.

Folks, this is what’s called a free market, and in 15 years of reporting on the dairy industry, I’ve learned that, by and large, dairy farmers want a free market. Mention the Canadian-style supply management system and most farmers cringe at the thought of having something similar here.

Now, don’t get me wrong, I was alarmed at the articles written by the Journal Sentinel. It made me sad knowing that dairy farmers I’ve known for years have gone out of business while the people who are supposed to be promoting dairy continue to get huge salaries.

If dairy farmers are required to pay into the checkoff, then they have a right to know how their dollars are being spent.

So, what is a dairy farmer to do? Well, you can start by contacting your representative at the National Dairy Promotion and Research Board. The list can be found online. This is the board that controls DMI, so if you want to make your voice heard, contact your regional representative.

This is your money, and you should be vocal about what your leaders are doing. So, if you want change, don’t just get angry, do something about it.

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