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Dairy farmers are losing the battle over ‘milk’

Melody Hahm
Senior Writer
A dairy cow stops to look up while feeding at a dairy farm in Ashland, Ohio. FARMACEUTICALS-VETS/ REUTERS/Aaron Josefczyk

The word “milk” may be a misnomer.

Just a few years ago, your grocery store’s dairy aisle had a handful of milk choices — skim, 2%, whole, and maybe soy and almond, if you were lucky.

Now, the list has grown to include plant and nut-based “milks” like hemp, flax, hazelnut, coconut, oat, sunflower, cashew, macadamia nut, and pecan, just to name a few.

But the US Food and Drug Administration (FDA) defines “milk” as coming from actual animals. Milk is the “lacteal secretion…obtained by the complete milking of one or more healthy cows.” The word “milk” also includes goat, sheep and water buffalo milk.

Various types of milk are seen at the Safeway store in Wheaton, Maryland February 13, 2015. REUTERS/Gary Cameron

In response to all of these non-milk milks, Democratic Congressman Peter Welch of Vermont and Republican Congressman Mike Simpson of Idaho wrote a letter to the FDA, urging it to actually implement its own definition of “milk.” They were joined by 23 other members of Congress.

“Our call on the FDA is to enforce its own regulation. These seed, plant and nut-based beverages are fine drinks, but they’re not milk. They’re right in the dairy aisle so a lot of people incorrectly assume that the nutrients associated with dairy milk are the same,” Welch told Yahoo Finance.

This fight appears more of a marketing battle than a health argument, as many non-dairy alternatives claim to be just as nutritious as milk. Moreover, many Americans can’t drink milk in the first place and are actively eschewing dairy. Plus, it would be difficult to market delicious “soy water” to have with your coffee or cereal.

The plight of dairy farmers in America

This “milk” labeling issue is part of Welch’s larger effort to bring attention to the plight of dairy farmers in Vermont. With the milk of 131,000 cows producing $504.9 million last year, dairy farming is the largest chunk of the state’s agricultural economy.

But over the last few years, the situation has been dire for the dairy farmers across America, as people simply aren’t drinking milk as much anymore. Total fluid milk sales have hit a 40-year low. There has been a 9% decline in milk sold over the last five years alone.

Fluid milk sales by product, 1975 – 2015 (millions of pounds)

Sources: USDA Agricultural Marketing Service, California Dept of Food and Agriculture, selected other State Departments of Agriculture, and USDA National Agricultural Statistics Service

According to data from the Nielsen Company, almond milk is America’s top substitute for dairy milk. Over the last five years, almond milk sales have grown 250% while the total milk market has shrunk by more than $1 billion during that same period.

Whether plummeting milk consumption is correlated with or caused by booming sales of non-dairy products, it’s leaving dairy farmers in the lurch.

The situation has been so grim that in 2014, the USDA introduced a voluntary insurance plan, called the Dairy Margin Protection Program, that provides dairy producers “catastrophic coverage” for an annual $100 administrative fee. It will be effective through the end of 2018. In conjunction with this program, the government also requires the USDA to purchase dairy products for donation to food banks and feeding programs.

“Farmers are hanging on by their fingernails. For rural America, survival is an issue. And rural America feeds the entire country. This isn’t just about dairy farmers,” says Welch.

Chris Galen, the SVP of communications at the National Milk Producers Federation (NMPF), a non-profit that serves as “the voice of dairy producers on Capitol Hill and with government agencies,” says farmers find it unfair and irksome that they are expected to play by the rules and regulations while upstarts play fast and loose with labeling terminology.

“There is a federal regulation that defines what foods must be made of. We’ve seen an explosion of plant-based imitations. We’re not looking for new regulations — we just want the FDA to enforce the existing regulations,” Galen told Yahoo Finance.

The popularity of plant-based “milk”

But for companies like Milkadamia, a macadamia nut beverage that markets itself with taglines like “how milk tastes now” and “moo is moot,” the word “milk” is part of its brand ethos, even though its products are completely free of dairy.

Jim Richards, CEO of Jindilli Beverages (“jindilli” is one of several words used by indigenous Australians for macadamia), which produces Milkadamia, says plant-based milks do not mislead customers.

“Non-dairy is a prominent claim on all plant-based milk packs. Consumers seek out plant-based milk specifically because it is not dairy — not because they are confused,” he said. “Indeed, plant-based milk purchases are generally very informed about their food and dietary choices.”

His goal is “to meet the market and provide products that help consumers achieve their wellness aspirations,” which are increasingly gravitating toward plant-based diets. Richards says it’s a no-brainer to follow the consumer.

“Once considered fringe, vegans and vegetarians are being joined by an increasing number of mainstream consumers for whom dairy simply is no longer the first choice,” says Richards.

The nutrition debate

The trend toward plant-based foods in all categories is burgeoning as people seek wellness and make healthier lifestyle choices, says Richards.

Some research suggests that a plant-based diet can decrease type 2 diabetes, help you stay at a healthy weight, and improve brain health. According to a study in JAMA Internal Medicine, eating more plant protein is associated with a lower risk of death.

The reality is that many opt for dairy-free products, not by choice, but out of necessity. Sixty-five percent of the human population has a reduced ability to digest lactose after infancy, according to the National Institutes of Health. Lactose intolerance in adults is most prevalent in people of East Asian descent, affecting upwards of 90% in some of these communities.

Galen, however, says the non-dairy alternatives don’t offer the calcium, potassium, vitamin D and protein that milk does. However, according to USDA’s own website choosemyplate.gov, suggested calcium choices for those who don’t consume dairy products include “almond milk” and “rice milk.” Though the almond nut has a ton of protein, almond milk is not a great source of protein (1 cup has about 1g) unlike cow’s milk (1 cup of 2% has about 8g).

And Marion Nestle — nutrition professor at New York University and the author of six books, including “Food Politics: How the Food Industry Influences Nutrition and Health” — says though she does not believe milk is essential for a balanced diet, the nutritional value of almond milk is pretty similar to cow’s milk.

“You’re supposed to eat a variety of foods. Lots of societies don’t drink milk and they do just fine. The average consumer would be better off eating a modest amount of a large variety of foods,” she says.

But, according to Nestle, this is a debate about market share, not nutrition.

“Milk producers want milk to be milk and they don’t want anyone intruding. These plant-based drinks are being sold as a substitute of milk,” she says. “Milk is a food, and like any food, your whole diet shouldn’t depend on it. Lots of people are allergic to cow’s milk — if you have problems with the sugar in cow’s milk because you can’t digest it, then these are great alternatives.”

She reiterated, “There are no magic nutrients in milk….but milk is not poison.”

What’s next for “milk”?

When asked why the FDA hasn’t cracked down on non-dairy companies labeling their products as “milk,” Galen acknowledged, “I don’t think they feel it’s a sufficiently problematic matter to do research on. But, we beg to differ: there is potential for greater confusion, particularly as it pertains to nutritional equivalency.”

Meanwhile, as more consumers have been grabbing a bottle of plant-based milk for their homes, mega chains, restaurants and artisanal coffee shops have also been adding soy and almond as staples.

This fall, Starbucks (SBUX) introduced its own almondmilk (spelled as one word) as a non-dairy alternative. The chain first offered soymilk in 2004 and coconutmilk in 2015. In a move to follow the “latest industry approach,” Starbucks says it’s spelling its non-dairy alternatives as one word.

But many companies, like Oregon-based Pacific Foods, do not use the word “milk” in the packaging or marketing of any of its products. Instead, it uses “non-dairy beverage” to describe its hemp drink, made of hemp nut, brown rice syrup, vitamins and minerals. Still, many consumers have come to expect that even non-dairy products called “milk” didn’t actually come from a mammary gland.

Welch points out that the labeling issue won’t “solve” the drop in dairy consumption. “We need more dairy product proliferation, like more cheeses and yogurts. Labeling on its own won’t make the difference,” he says.

This appears to be an effort that’s trying to buck a trend that’s here for the long haul. The FDA may decide to expand its definition of “milk” to encompass the various new offerings that many of us have come to consider “milk.” You can’t regulate the changing tastes of Americans.

Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Read more from Melody here & follow her on Twitter @melodyhahm.