Agency refocuses farmer-funded checkoff programs on market growth and promotion
The U.S. Department of Agriculture (USDA) has announced a major policy shift that will change how dairy checkoff funds are used across the country. The decision ends the use of farmer-funded dairy checkoff dollars for Environmental, Social, and Governance (ESG) initiatives and returns the program to its original purpose of supporting dairy promotion, research, and nutrition education.
U.S. Secretary of Agriculture Brooke L. Rollins said: "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.”
The Dairy Checkoff Program was established to help build demand for dairy products through marketing campaigns, consumer education, research, and export development. Funding for the program comes from mandatory assessments collected from dairy producers.
Over the years, some checkoff-supported organizations expanded their efforts into sustainability initiatives, including greenhouse gas reduction goals, emissions tracking, and net-zero commitments. USDA's latest action ends financial support for those ESG-related projects through checkoff funds.
The agency also directed the Agricultural Marketing Service (AMS) to ensure that other commodity checkoff programs do not use producer-funded dollars to advance ESG-related mandates. USDA stated that checkoff funds must be used only for activities authorized under federal law and designed to strengthen agricultural markets.
Despite the change, USDA emphasized that the Dairy Checkoff Program remains valuable when focused on its core objectives. Independent studies have shown that investments in dairy promotion and research continue to generate positive economic returns for farmers.
Research conducted by economists at Texas A&M University found that dairy checkoff investments increased demand for dairy products in domestic and international markets. The study reported that producer profits generated by dairy promotion programs exceeded the costs of the program.
According to the research, the overall return on investment (ROI) for dairy checkoff spending is $5.93 for every dollar invested. Product-specific returns were also significant, including $4.16 for fluid milk, $2.67 for cheese, $24.85 for butter, and $12.82 for dairy exports.
USDA noted that other commodity checkoff programs have produced strong economic returns as well. Studies reported returns of $13.41 for beef, $6.40 for cotton, and $33.54 for softwood lumber promotion efforts.
Supporters of the policy change argue that the decision will provide greater accountability for how producer assessments are spent. They believe farmer-funded dollars should remain focused on activities that directly improve market opportunities, increase product demand, and enhance industry competitiveness.
The decision is expected to generate discussion throughout the dairy industry as producer groups, processors, and checkoff organizations evaluate its long-term implications. USDA has indicated that administrative functions necessary for operating checkoff programs may continue, provided they do not advance ESG-related agendas.
As the policy is implemented, dairy producers across the United States will be watching closely to see how future checkoff investments are directed and how the changes affect industry programs. The USDA says its goal is to ensure that producer-funded initiatives remain focused on delivering measurable benefits for American agriculture and the farmers who support these programs.
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