Domino’s net income was more than $400 million in 2022. With all that dough, why do they need struggling dairy farmers to fund the marketing of their products?
Commercials for Domino’s new pepperoni cheesy bread have recently taken over televisions across America. While there’s nothing new about getting bombarded by food advertisements, Domino’s latest marketing effort is leaving a bad taste in our mouths. That’s because the government is forcing dairy farmers to fund this marketing campaign.
To make matters worse, the marketing efforts don’t benefit the farmers forced to fund it. They benefit the single cheese supplier for Domino’s — a secretive billionaire — and a handful of corporate mega-dairies.
Unchecked Checkoff Programs
This scheme is orchestrated through a partnership between Domino’s and Dairy Management Inc. (DMI), which is the primary dairy checkoff contractor. Checkoff programs collect money from farmers for research and marketing, but they have been plagued by corruption and lack of transparency for decades.
Although the information is challenging to track down, checkoff funds often wind up in the hands of the largest food corporations and lobbyists in the name of research and promotion. Checkoff dollars typically entrench the power held by monopolistic corporations in our food system, rather than benefiting the family farmers and ranchers paying into these programs.
This isn’t the first time DMI has partnered with Domino’s on the farmers’ dime. DMI gives the pizza giant millions in funds collected from dairy farmers — $5.8 million in 2019 alone. But DMI’s recently announced deal with Domino’s to promote a new pepperoni item in its lineup of cheesy bread products is a particularly rotten deal for America’s dairy farmers.
Farmers’ Checkoff Dollars Squandered…Again
Because checkoff fees are mandatory, dairy farmers are forced to subsidize Domino’s marketing every time they sell their milk. The thing is, increased sales of Domino’s pizza don’t benefit most dairy farmers. They benefit Domino’s sole cheese supplier, Leprino Foods.
Owned by a secretive billionaire, Leprino Foods controls as much as 85% of the pizza cheese market. In churning out their products, this company uses five to seven percent of the nation’s total milk supply, which it receives from the largest U.S. dairy cooperatives like the Dairy Farmers of America (DFA). DFA has faced plenty of accusations of anticompetitive behavior, including collusion to lower milk prices and investing in milk processing instead of promoting and selling the milk of its members.
This means that most family dairy farmers will not see a return on their mandatory Domino’s marketing investment. The reality is that dairy farmers are going bankrupt while Leprino Foods makes billions. The U.S. lost 20,000 dairy farms between 2010 – 2020.
It’s also important to note that checkoff funds are only authorized to promote dairy products generally, not one brand over another. For example, many are familiar with the dairy industry’s “Got Milk?” marketing campaign, which ran until 2014 and was funded by dairy farmers’ checkoff dollars to increase demand for dairy products. Whether this campaign was actually effective in boosting profits for dairy farmers is another story, but it did at least promote the product across the whole industry. Dairy farmers’ checkoff funds shouldn’t be used to pick winners and losers in the pizza market and favor Domino’s over other competitors.
Adding more salt to the wound, dairy farmers are also on the hook for boosting pork demand thanks to this deal, as their checkoff dollars are funding the promotion of a new pork product in Domino’s existing lineup of cheesy breads.
Time to Crack Down on the Dairy Checkoff
The dairy checkoff program is uniquely problematic. As the largest of all checkoff programs, USDA is required to submit annual financial reports to Congress; but under current USDA Secretary Tom Vilsack, these reports have failed to appear. That means that nearly a billion dollars of dairy farmers’ money has been spent without oversight or transparency.
But these failures are getting called out across the country and on Capitol Hill. This summer, Farm Action and the National Dairy Producers Organization called for the release of these reports in a letter to USDA. And just a few weeks ago, a bipartisan group of Congressional lawmakers sent a letter of their own to USDA, saying they “are highly troubled that dairy farmers have been denied access to federally mandated reports detailing the efficacy of programs they must fund.”
In fact, we were only able to obtain information on this partnership with Domino’s through industry press releases — the rest of the dairy checkoff expenditures are highly secretive.
America’s dairy farmers are struggling enough as it is. The last thing they need is the government siphoning money out of their pockets to fund marketing efforts for corporate fast-food chains. It’s past time we reform checkoff programs to ensure they’re working for farmers, not corporate interests.
Written and edited by: Jessica Cusworth, Angela Huffman, Dee Laninga, Christian Lovell, and Joe Maxwell. Concept by: Angela Huffman and Joe Maxwell.
