WASHINGTON (DTN) -- U.S. Agriculture Secretary Brooke Rollins is directing the National Dairy Promotion and Research Board to end dairy checkoff funding for projects advancing environmental, social and governance (ESG), net-zero and climate-neutrality initiatives, while ordering a review of all other checkoff programs for alignment with the policy.

In a Sept. 17 letter to National Dairy Board Chair Lolly Lesher, USDA said the dairy checkoff must focus on "long-term value creation for future generations" and not fund activities advancing climate-neutrality initiatives.

The decision follows legal action by the Wisconsin Institute for Law and Liberty (WILL), which represents Wisconsin dairy farmers and sued the department over the use of checkoff funds for the programs. The lawsuit was dismissed when USDA disclosed its intention to amend the rules.

Rollins said the move is aimed at ensuring "every dollar collected from American producers serves American agriculture for the better."

But the policy also reverses farmers' decisions. Every expenditure made through a checkoff program is voted on by commodity producers and approved by USDA itself.

The agency identified several initiatives as supporting ESG activities, including Farmers Assuring Responsible Management (FARM) Environmental Stewardship, participation in Scope 3 greenhouse gas (GHG) accounting, the U.S. Dairy Materiality Assessment, U.S. Dairy Net Zero Initiative, Pathways to Dairy Net Zero, Greener Cattle Initiative, Sustainability Alliance and the U.S. Dairy Stewardship Commitment.

The letter noted that "other initiatives may also be misaligned with departmental policy," and directs the Agricultural Marketing Service to evaluate the other 21 programs.

Dairy Management Inc. administers the dairy checkoff and has said it will comply with the directive.

The organization told DTN it would review projects and take the necessary steps to modify or terminate contracts and activities.

"We will continue to fully support the USDA's directive to prioritize agricultural production, producer profitability, and market expansion, ensuring all activities remain aligned with statutory authorities and administration policy," DMI said.

Abby Swan, a Wisconsin dairy farmer involved in the suit, said in a statement: "Farmers were being forced to subsidize private organizations pushing climate change research and costly mandates for family farms. Middle America has had enough. We are fighting back to end ridiculous practices like these once and for all."

CHECKOFF REFORM

The most widely adopted program on the list is commonly known as FARM, or Farmers Assuring Responsible Management, an environmental stewardship program developed in 2009.

It is unclear whether ending checkoff funding for FARM Environmental Stewardship would affect the broader FARM program. National Milk Producers Federation (NMPF) Chief Science Officer Nicole Ayache told DTN in a statement, "NMPF and DMI leadership are reviewing USDA's guidance and assessing current work against the identified ESG areas."

USDA's announcement characterized participation in FARM Environmental Stewardship as "mandatory." But the program website and NMPF say participation is not required by law.

FARM Environmental Stewardship is one of five pillars within the National Dairy FARM Program. Launched in 2017, it is a voluntary, farmer-led initiative that offers on-farm environmental assessments and tools to support dairy businesses.

"NMPF does not mandate participation in any pillar of the FARM Program," Ayache said.

With participants representing 99% of the U.S. milk supply in the FARM program, milk cooperatives, processors, individual farms and other organizations with dairy farm members can elect to participate in a FARM pillar on behalf of their members.

Scope 3 GHG accounting by dairy producers is also not mandatory at the federal level in the U.S., though large companies doing business in California are slated to begin mandatory Scope 3 value-chain emissions disclosures in 2027.

ROLLINS DOUBLES DOWN

At a press conference Monday, Rollins defended the decision when asked by DTN whether it contradicted the wishes of farmers who established the programs.

She responded: "This is just one step that we are taking to ensure that our farmers, but especially those who are smaller and midsize, and especially in dairy, are not subject to the strangulation of an overregulated government regime that abides and aligns with a climate agenda that the majority of Americans do not agree with or believe in."

She said smaller farmers do not have the lawyers and armies to fill out paperwork on "what they're feeding, what their manure pile looks like." The money is better spent on increasing profit margins, she said.

Rollins was also asked why USDA characterized the FARM program as mandatory for dairy farmers. Rollins referred the question to the USDA press team, which has not yet responded.

Two long-time dairy consultants told DTN the programs were developed by farmers and cooperatives in response to customer demands.

"I was in the rooms where these programs were built," said Josh Luther, a dairy consultant with Clarity-E Solutions LLC. "They weren't imposed on farmers by activists. They were built by farmers and their co-ops because customers, at home and abroad, were asking hard questions, and we decided dairy should answer with its own data instead of letting others define us."

Thomas Subber, a former president of the U.S. Dairy Export Council for 21 years, said sustainability initiatives helped the industry respond to consumer concerns.

"Providing fact-based evidence on dairy's true impact on the land and greenhouse gas emissions served to undermine the distortions of those wholly opposed to animal agriculture," he said. "Real, tangible progress in reducing emissions and preserving farmland was being made."

He said one thing that worries him is the future of other commodities and their checkoffs. The nutritional promotion of soybeans and other oilseed crops with checkoff boards could be at risk of funding restrictions due to political pressure from the Make America Healthy Again movement, he said.

USDA cited the dairy checkoff as successful with a $5.93 return for every dollar spent on dairy checkoff activities.

Read the letter here: https://www.usda.gov/….

Read the press release here: https://www.usda.gov/….

See the original Wisconsin Dairy Farmers case against USDA's checkoffs here:

https://will-law.org/….

Jake Zajkowski can be reached at jake.zajkowski@dtn.com

Follow him on social platform X @jzajkow

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