Pizza firms prosper off slice of U.S. dairy fees

WASHINGTON - It’s no secret that Americans eat a lot of pizza. Indeed, about 13 percent of the population is eating a slice or two on any given day, according to a recent report from the U.S. Department of Agriculture.

It all adds up to a lot of calories: On an average day, the report notes, pizza provides 6 percent of the total caloric intake for American children and 4 percent for American adults.

But there’s also a subtle policy angle. Pizza is popular because it’s delicious, but its roaring success isn’t entirely a free-market story. “In recent years, [the USDA] has spent many millions of dollars to increase pizza consumption among U.S. children and adults,” Parke Wilde of Tufts University wrote on his U.S. Food Policy blog.

He’s referring to the USDA’s “dairy checkoff program,” which levies a small fee on milk (15 cents for every hundredweight of milk sold or used in dairy products) and raised about $202 million in 2011. The agency uses that money to promote products such as milk and cheese. And,it turns out, pizza.

The USDA says its checkoff program has been well worth it: For every $1 it spends on increasing cheese demand, it estimates that farmers get $4.43 in additional revenue. But the results have been mixed. Milk consumption has declined in recent decades while cheese consumption has soared.

The program also helps pizza-makers, which use one-quarter of the nation’s cheese. A 2010 USDA report detailed how Dairy Management Inc., a corporation funded by these government checkoff fees, spent $35 million in a partnership with Domino’s to boost pizza sales.

“According to Patrick Doyle, President and CEO of Domino’s Pizza, ‘DMI support has allowed us to focus some advertising dollars on areas we would not have considered otherwise. The Wisconsin 6 Cheese pizza has twice the cheese of a regular pizza, but we had neither developed nor advertised such a product. DMI helped fund the research and media to launch this product,’” according to the 2010 USDA report.

That report also chronicled how the dairy checkoff program worked with McDonald’s to launch McCafe specialty coffees and three new burgers with two slices of cheese. It also helped Yoplait develop new yogurt-chip technology. The program was renewed in the most recent farm bill.

So what’s the problem? Critics often note that efforts to promote fruits and vegetables haven’t received nearly the same level of support as dairy and meat products (a few fruits do have their own checkoff programs, including blueberries and watermelons, but not many). That imbalance doesn’t explain the popularity of pizza, obviously, but it’s one extra unseen force at work.