Recent articles in the Milwaukee Journal Sentinel raise questions about the salaries of top executives at Dairy Management Inc., the group in charge of the national dairy checkoff based in Rosemont, Ill., and whether checkoff programs are good for farmers.
According to the articles, in 2017, the top 10 executives at DMI were paid more than $8 million in salary and benefits. Tom Gallagher, who has been DMI’s CEO since it was incorporated in 1995, was paid $899,810 in 2017. Former U.S. Secretary of Agriculture Tom Vilsack, the group’s executive vice president, and president and CEO of the U.S. Dairy Export Council, was paid $800,557.
While I admit these DMI executives are getting paid a lot of money, and well more than any dairy farmer I know, you do get what you pay for. Additionally, the compensation amounts in the tax filings can be misleading. For example, beyond Gallagher’s salary, compensation includes benefits earned under a retirement plan that reflects the impact of his 20-plus years of service to the organization.
Dairy farmer Connie Seefeldt of Coleman, Wis., who serves on the National Dairy Board as vice chairperson, defends DMI executives’ salaries.
“They work hard for their money, just like dairy farmers do,” Seefeldt says. “Their pay is commensurate with other organizations or businesses.”
Seefeldt owns and operates a 115-cow dairy farm with her family, and also serves on the state dairy promotion board — Dairy Farmers of Wisconsin, formerly known as the Wisconsin Milk Marketing Board. She has served 25 years on that board, including four years as president.
Seefeldt says less than 5% of DMI’s budget is spent on general and administrative expenditures, as mandated by USDA. “That includes all salaries and benefits,” she says. “We review that every year.”
Seefeldt is a big believer in dairy promotion. “The reason I got involved with promotion is my kids’ teachers had more questions about dairy products than the kids,” she explains. “It became obvious to me that we needed to educate consumers about the benefits of dairy. Dairy promotion is important to Wisconsin farmers because 90% of what we produce is sold outside of Wisconsin.”
What’s at stake?
The articles in the Milwaukee Journal Sentinel also revealed that the Humane Society of the United States — yes, one of the largest anti-animal agriculture groups in the U.S. — has aligned itself with dairy farmers and ranchers opposed to checkoff programs; environmental groups; and The Heritage Foundation, a conservative think tank.
The team’s goal: Persuade Congress to pass legislation requiring public disclosure of financial records showing how $900 million paid by farmers into nearly two dozen mandatory checkoff programs is spent.
The sponsors of the bill are from opposite sides of the political spectrum. Lead sponsor Sen. Mike Lee, R-Utah, is joined by fellow conservative Sen. Rand Paul, R-Ky., and two liberal Democratic senators running for president — Elizabeth Warren and Cory Booker.
The proposal fortunately has died in Congress twice and has been opposed by the National Cattlemen’s Beef Association, the National Pork Producers Council, major food processors and the American Farm Bureau.
Opponents, which include some 40 groups, argue the proposal “will gut” the programs and “impose unnecessary, duplicative and counterproductive burdens” on them, according to a letter signed by the organizations. Bill proponents say their goal is not to kill the checkoff program, but to make it more transparent and more favorable to the small family farmer.
I think this is a smoke screen. Anything HSUS is involved in should immediately send up red flags to any dairy or livestock farmer. Their goal is to end animal agriculture. What better way to do it than to get rid of the checkoff programs?
With a trade war in place, dairy farmers should be thanking their lucky stars and Tom Vilsack that 16% of all milk produced in the U.S. is still being exported — that is thanks, in large part, to Vilsack’s efforts. If exports dropped like they did in December 2008 after the economy tanked and the stock market crashed, the Class III milk price would likely be closer to $9, like it was in the first eight months of 2009, than the $18.31 it is now.
Dairy promotion is working. While fluid milk consumption has steadily declined, overall consumption of dairy products, including cheese, yogurt and butter, has steadily risen. Cheese consumption has increased from 17 pounds per person in 1985, the year the checkoff program began, to 38 pounds per person in 2018.
While some dairy farmers may not like the salaries top executives at Dairy Management Inc. are being paid, they should be grateful the checkoff is doing what it is intended to do — increase the consumption of dairy products.
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