USDA Ends Dairy Checkoff Funding for ESG Projects

The U.S. Department of Agriculture (USDA) announced on September 17 that it is ending Dairy Checkoff support for projects related to environmental, social, and governance, or ESG, initiatives.

The action directs the Agricultural Marketing Service to ensure that dairy checkoff funds are not used for ESG-related projects and that research and promotion funds in other commodity checkoff programs do not advance ESG mandates, according to USDA. The Dairy Checkoff is funded through mandatory producer assessments and is authorized for dairy promotion, research, and nutrition education.

What Dairy Producers Need to Know

USDA said the action ends checkoff support for ESG-related projects pursued through the Innovation Center for U.S. Dairy, including greenhouse-gas and net-zero targets. The department said necessary administrative functions that do not advance those initiatives will remain eligible for support.

The Dairy Production Stabilization Act authorizes checkoff funds for promotion, research, and nutrition education intended to strengthen markets for U.S. dairy. Dairy farmers currently pay a 15-cent-per-hundredweight assessment on milk under the national Dairy Research and Promotion Program.

USDA Secretary Brooke L. Rollins said the change is intended to return the program's spending to its statutory purpose.

“American dairy producers, cattle ranchers, and farmers pay checkoff assessments so those dollars can build demand for their products - not bankroll radical climate agendas that raise costs and constrain production," said U.S. Secretary of Agriculture Brooke L. Rollins. "Today's action returns the Dairy Checkoff and all research and promotion programs to their core mission: expanding markets and supporting the hardworking men and women who feed this country. We will not allow producer dollars to underwrite mandates that put American agriculture at a disadvantage.”

Checkoff Research and Promotion

USDA also cited economic research on the dairy checkoff's promotion activities. The department said independent economists at Texas A&M found that checkoff investments increased demand for promoted dairy products and dairy exports, with producer-level gains from promotion exceeding program costs.

According to USDA, the analysis found an aggregate return on investment of $5.93 for every dollar spent on dairy checkoff activities. USDA also cited returns of $4.16 for fluid milk, $2.67 for cheese, $24.85 for butter, and $12.82 for exports. The department said similar return-on-investment studies are conducted for other research and promotion boards.

USDA said the new action is intended to keep producer-funded research and promotion activities focused on strengthening agricultural markets while ending checkoff support for ESG-related projects.