USDA announced a major dairy checkoff ESG funding change this week, ending mandatory farmer support for climate and sustainability initiatives inside the Dairy Checkoff. Agriculture Secretary Brooke Rollins revealed the decision Wednesday from Washington, D.C. The move blocks the Innovation Center for U.S. Dairy from spending checkoff dollars on environmental, social and governance projects, including greenhouse-gas and net-zero targets. Because dairy farmers pay these assessments automatically, USDA says the funds must return to their original purpose: building demand for dairy products. Additionally, the change affects checkoff programs for other commodities nationwide.
Why USDA Targeted ESG Spending in the Dairy Checkoff
Secretary Rollins said American dairy producers, cattle ranchers and farmers pay checkoff assessments to build demand for their products. She added that farmers should never fund what she called radical climate agendas that raise costs and limit production. As a result, USDA now prohibits checkoff-funded ESG projects such as net-zero emissions targets and greenhouse-gas reduction commitments.
The Dairy Production Stabilization Act originally authorized checkoff funds for promotion, research and nutrition education. However, the Innovation Center for U.S. Dairy, an organization created through the checkoff, expanded into broader ESG initiatives over time. USDA’s new policy ends that funding while still allowing routine administrative work that doesn’t advance ESG goals.
How the Dairy Checkoff Has Performed for Producers
Despite the ESG funding cut, USDA points to strong returns from the Dairy Checkoff’s core work. Furthermore, independent economists at Texas A&M University found that checkoff investments boosted demand for dairy products and exports. Additionally, researchers determined that producer profit gains from promotion outweighed the program’s costs.
The aggregate return on investment across all dairy products reaches $5.93 for every dollar spent, according to that research. Fluid milk returns $4.16 per dollar, while cheese returns $2.67. Butter delivers an even stronger return at $24.85, and dairy exports return $12.82 per dollar invested. Other commodity checkoffs show similar success. For example, beef returns $13.41, cotton returns $6.40, and softwood lumber returns $33.54 per dollar invested.
What the Dairy Checkoff ESG Funding Change Means for Other Commodities
USDA isn’t stopping at dairy. The department has directed the Agricultural Marketing Service to review every other commodity checkoff program for similar ESG spending. Consequently, no research and promotion board nationwide can use mandatory producer assessments to advance ESG mandates going forward.
USDA released a formal letter and memorandum outlining the policy change on September 17. Both documents explain how checkoff funds must serve their statutory purpose of strengthening markets. Instead, they must not fund outside agribusiness agendas that could raise costs for producers.
What Farmers Should Watch Next
This dairy checkoff ESG funding change marks one of USDA’s most direct interventions into how checkoff dollars get spent. For dairy farmers, the decision means their mandatory assessments will go strictly toward promotion, research and nutrition education. They will no longer fund sustainability commitments producers didn’t choose to support. Meanwhile, farmers across other commodities should watch for similar reviews of their own checkoff programs in the coming months.
Readers can find the full USDA letter detailing the policy change for more information. This story is based on a press release from the U.S. Department of Agriculture.