Project Equity at 50: the Fight that Changed Milk Pricing
Fifty years ago, Jersey leaders set out to fix an unfair, outdated milk pricing system that undervalued high-component, nutrient-dense Jersey milk. At that time, dairy consumption was shifting from fluid milk to processed products like cheese. Paradoxically, processors often struggled to turn a profit because they were paying too much for raw milk that yielded too little product. The need for change was clear.
Their answer was Project Equity. At its core was the push for component pricing—a concept that was revolutionary then but foundational to today’s dairy economy.
What began as a fight for a fair price ultimately reshaped milk pricing policy, elevated the Jersey cow’s relevance in commercial settings, and fueled decades of growth in registrations and market share.
“Without their opposition to the fair pricing of Jersey milk, we might never have developed the will, as a group, to get a fair price for our milk,” Joe Lyon, former NAJ and AJCC president, affectionately known as the “Father of Equity.”
Yet this is not just a story of past success. As markets evolve, policies shift and consumer preferences change, the principles behind Project Equity remain as relevant as ever.
This milestone anniversary offers a chance to reflect on how the effort began, the challenges it overcame, and the lasting impact Project Equity has had on the Jersey breed and broader dairy industry.
The Mission Begins with NAJ
Long before Project Equity took shape, Jersey leaders were already grappling with how milk was valued. By the mid-1950s, the breed faced mounting challenges. Homogenized milk had gained wide acceptance, wartime subsidies favored low-test, higher-volume breeds, and interest in Jerseys was declining.
The question was whether to pull back or push forward.
We can retrench, or we can attack, said James F. Cavanaugh, executive secretary of the American Jersey Cattle Club (AJCC), in 1956. He urged members to support an expanded national promotion effort, backed by increased registration and transfer fees.
Cavanaugh’s proposal, known simply as “The Program,” outlined four key objectives: demonstrate the value of Jersey milk, showcase the efficiency of Jersey cows, increase production and glamorize the breed.
Members backed the plan, approving the fee changes by an 89-11 margin in June 1957. Six months later, the AJCC board established a new entity, National All-Jersey Inc. (NAJ), to increase both milk sales and breeding stock sales.
“No dairy farmer on earth has more at stake in the pricing of milk than does the producer of high solids milk, be it of Jersey, Holstein, Guernsey, Brown Swiss or Ayrshire origin. No dairyman has more need to understand the influences, the factors, the agencies that create the price of milk in the U.S. and many other countries where the milk industry is treated as a quasi-public utility,” Dr. Guy Crews, NAJ assistant secretary and 2001 National Dairy Shrine Pioneer Award recipient.
Early results were encouraging. NAJ expanded the All-Jersey program—which had been assumed by the AJCC in 1954—and by March 1958, more than 9 million pounds of Jersey milk were being marketed monthly through 57 plants in 16 states. By 1962, that figure had climbed into the double-digit millions.
The Birth of Project Equity
By the early 1970s, however, new pressures had emerged.
While the All-Jersey program had built demand for Jersey milk, maintaining a steady milk supply was a challenge. Fluid milk consumption continued to decline, and processors failed to capture full value of the milk they purchased. At the same time, milk priced under Federal Milk Marketing Orders (FMMO) was pooled market-wide and priced the same, regardless of end use.
The structure rewarded volume over components, sending signals that ran counter to evolving product demand.
The impact was evident. Jersey registrations fell to 33,104 in 1973, the lowest of the modern era.
Jersey leaders knew the issue was not the milk itself, but how it was priced. NAJ spent three years building a case for change. Research demonstrated the clear manufacturing advantages of higher-protein milk: 100 lbs. of milk testing 3.2% protein yielded 9.8 lbs. of cheddar cheese while milk testing 4.0% protein produced 12.2 lbs. Staff reinforced those findings in the field, making targeted visits to processing plants in major dairy states to discuss yields and product value.
One cooperative soon put that principle into practice.
In August 1973, the Mississippi Valley Milk Producers Association became the first cooperative to implement a protein bonus, led by former NAJ and AJCC president, Joe Lyon of Toledo, Iowa, and NAJ assistant secretary, Dr. Guy Crews. When Lyon’s own co-op was unwilling to consider protein pricing, he moved his milk to Mississippi Valley (now Swiss Valley Farms), where general manager Carl Zurborg and president Elmer Paper supported the approach.
The co-op initially paid 3 cents per point over a crude protein base of 3.3% for Grade A milk and 6 cents for Grade B milk used directly in manufacturing. The plan proved so profitable that premiums soon increased to 4 cents and 9 cents, respectively.
Other processors, particularly in California, quickly followed with similar protein premiums.
With early success in place, the national Jersey organizations moved to formalize their efforts, calling for “the establishment of an equitable pricing system for milk in the USA” and the development of specialized markets, such as cheese plants, where producers of higher-protein milk could be rewarded in proportion to product yield.
Funding came through a voluntary check-off of 2 cents per hundredweight on milk shipped by participating dairy producers.
That effort—Project Equity—was formally adopted by joint resolution of the AJCC and NAJ boards at the annual meetings in 1976.
In its first year, 171 individuals and corporate entities invested. Although both boards had voted to appropriate $50,000 each over the next three years to fund the project, the money was never needed. Project Equity was self-sustaining from the start.
Fueling the Cause
Launching Project Equity was only the beginning. Expanding its influence required broader financial support, which led to the Campaign for 800 in ’80, an effort to sign up 800 investors in 1980.
The campaign succeeded. By January 1981, the Equity roll included more than 840 investors, and three full-time staff members—Phil Badger, Calvin Covington and Guy Crews—were dedicated to milk marketing.
Progress was also showing up in the marketplace. Plants across California, Idaho, Illinois, Iowa, Minnesota, New Hampshire, New York, South Dakota, Vermont, Washington and Wisconsin were paying some form of protein premiums.
Board minutes show the campaign accomplished more than raising funds or educating producers. It demonstrated to the broader dairy industry that Jersey leaders were serious about advancing milk pricing reform.
“We made believers out of many skeptics by getting 800 investors,” said Covington, who later became NAJ’s first general manager and then executive secretary of the national Jersey organizations. “Campaign 800 in ’80 also gave credibility to the key Jersey leaders and staff members who were working in the trenches for Equity.”
Asked what Project Equity ultimately accomplished, Covington doesn’t hesitate.
“The one-word answer is respect. Jersey really earned the respect of the dairy industry.”
The Equity pool was further strengthened in 1995 when the American Jersey Cattle Club (AJCA) bundled Equity with registration, performance evaluation and type appraisal under its flagship program, REAP.
“A milk that contains 20% more protein than another does not command a better price and never will until a value for protein is added to milk pricing formulas,” Guy Crews.
Since 1976, nearly $20.5 million has been invested to advance equitable milk pricing. Today, the investor roll stands at 950. Special recognition goes to the charter investors who have contributed every year, now 50 and counting: Ahlem Farms Partnership, Ahlem Jerseys (Jim and Grant Ahlem), C & S Livestock, Fanelli Dairy, Hilmar Jerseys (Chuck and Mark Ahlem) and Wickstrom Jersey Farms Inc., all of California; David and Donna Kunde and Summit Farm Inc., both of Iowa; H.H. Barlow of Kentucky; Ray and Margaret Schooley of Missouri; Dutch Hollow Farm (Chittenden Family) and Hi-Land Farms (Chamberlain Family), both of New York; Spahr Jersey Farm Inc. of Ohio; Graber Jersey Farms of South Dakota; and Molly Brook Farm of Vermont.
The March to Multiple Component Pricing
In the early 1980s, Edelweiss Cheese of Marshfield, Wis., offered a clear lesson in the value of milk components. Owned by Ralph and Diane Zirbel, the company was near bankruptcy, producing just 8.9 lbs. of cheese per hundredweight of milk.
A chance connection helped change its trajectory. Reed Ernstrom, a Utah State University student, was working on a cheese starter project at Edelweiss. His father, C.A. Ernstrom, a professor at the university, had developed a formula to predict cheese yield. Acting on his advice, the Zirbels tested their milk for both fat and protein and discovered the problem: low protein content was limiting yield.
Working together, the Zirbels and Ernstroms created an innovative component-based pricing system that rewarded higher-protein milk. The change initially cost them patrons, but with help from David Brandau, an area representative and Equity specialist, they secured new high-protein suppliers. Within a month, Edelweiss had regained all its milk and was turning a profit.
As the concept gained traction, a key hurdle remained: reliable protein testing. That changed in 1984, when Cornell University established standardized testing methods and a regulatory framework for measuring protein and solid-not-fat in the FMMO system.
“I think of the number of times we went into cheese plants and made cheese out of high protein milk to show cheesemaker the extra yield. I remember one plant where we increased the yield so much the agitator paddles would not turn. At another, the yield increased so much they closed the plant down an extra day a week,” Calvin Covington, former AJCC-NAJ executive secretary and 2003 World Dairy Expo Industry Person of the Year.
Momentum accelerated in 1986, when Western General Dairies Inc. and Lake Mead Cooperative Association petitioned to include multiple component pricing (MCP) in a merged Federal Order. The resulting Great Basin Federal Order, implemented in 1988, became the first to price milk based on both protein and fat.
NAJ’s grassroots advocacy and the significant number of plants already using protein pricing were critical to the historic decision. As expected, demand for Jerseys in the region ensued.
Other Federal Orders soon followed. By 1989, more than 60% of the U.S. milk supply was eligible for voluntary MCP, supported by major dairy organizations, including Holstein Association USA.
NAJ continued to lead into the 1990s. In 1995, staff spent a week in Washington, D.C., working with the House Agriculture Committee on Federal Order Reform. The following year, the U.S. Department of Agriculture (USDA) issued a recommended decision based on an NAJ proposal, the first time a major proposal had been accepted by an organization not directly marketing milk.
Federal Order Reform arrived January 1, 2000, when USDA adopted component pricing formulas recommended by NAJ, including the Van Slyke cheese-yield formula, to calculate Class III and producer price premiums. More than 30 orders were consolidated into 11, and roughly 85% of regulated milk was priced under MCP.
California joined the Federal Order system in 2018, also using MCP. Today, six of the 11 orders price milk on multiple components.
From Policy to Presence
In the decades since Project Equity began, the dairy industry has continued to evolve. Through it all, NAJ has remained focused on equitable pricing based on milk’s true value. While major progress has been made, challenges remain, particularly in Federal Orders where fluid-milk markets still influence pricing.
Most recently, NAJ testified and submitted comments during the national FMMO hearing process, helping shape USDA’s November 2024 final decision to modernize pricing formulas, including make allowances, milk composition factors and the Class I mover. The changes took effect in January 2025.
“Looking back over the 40 years of Equity, the single greatest testament that Equity was right for the dairy industry is this fact: There isn’t a single regulated milk pricing system that adopted component pricing that later reverted to fat-skim. . .Nobody said, ‘Oh this isn’t working. Let’s go back.’ If that’s not a track record of success, I don’t know what is,” Erick Metzger, former NAJ manager, at a ceremony to honor Equity investors in 2016.
That advocacy has extended beyond policy rooms into direct engagement with lawmakers. Beginning with Constituent Day on Capitol Hill in 2014, Jersey producers have participated in a series of fly-ins in 2015, 2017, 2019 and 2023, bringing their perspective straight to Congress. The effort was spearheaded by Erick Metzger, who started his Jersey career in the records department and later served as NAJ general manager from 2004 until his retirement in 2025, and longtime lobbyist Charlie Garrison.
Demand for Jerseys
Federal Order Reform created an environment for Jerseys to shine. As demand grew for high-component milk used in cheese and other manufactured products, so did demand for Jerseys.
It was a sharp contrast to the 1970s, when both Equity and Jersey Marketing Service (JMS), a subsidiary of NAJ, were launched.
“Back then, nobody wanted to sell Jerseys,” said Neal Smith, who managed JMS and then became executive secretary of the national Jersey organizations in 2000. “We struggled to get marketers and auction companies to pay attention to the Jersey cow because she was not in demand. We knew we would have to market them ourselves.”
Federal Order Reform laid the groundwork for moving brown cows into commercial settings, and JMS helped bridge the gap, facilitating large-volume and private-treaty sales that moved pot loads of cattle west into expanding dairies.
“Nothing will sell cows to more people faster than having distributors want (Jersey) milk and pay a good price for Jersey milk,” James F. Cavanaugh, former AJCC executive secretary.
The shift was reflected in the structure of the national dairy herd. Holsteins represented 92% of the population in 2000, with Jerseys at just 3.7%. By 2010, Jerseys had grown to 5.2% and another 6.6% were in mixed herds—a sign producers were actively adding non-Holsteins to capture components. Today, Jerseys make up nearly 13% of the U.S. dairy herd.
That impact also showed up in registrations and program participation. Registrations steadily climbed, surpassing 100,000 in 2012 and peaking at nearly 185,000 in 2017. Average annual registrations rose from 77,390 in the 2000s to more than 120,000 in the 2010s.
Momentum carried across programs, too. The appraisal team scored a record 119,545 cows in 2015, Jersey tag sales approached a record 582,000 in 2017, and nearly 49,000 females were genotyped in 2018. Enrollment in REAP grew to more than 165,000 cows in 1,000 herds by 2022.
“Today it’s a different picture,” Smith summed. “There are a lot of auction companies happy to market Jersey cows and producers happy to milk them because they have value. We expanded the market for Jersey cattle 1,000%.”
Built on Research
The surge in demand didn’t happen by chance. It was built on decades of intentional investment in research, using science to both validate Jersey strengths and uncover new opportunities for the breed.
Scientific evidence has long been central to the case for equitable pricing. As early as 1964, advertising highlighted laboratory results showing All-Jersey milk contained 20% more protein on average than competing brands.
That research-first approach has continued. NAJ-funded studies have explored everything from Jersey beef production to environmental impact.
A 2009 study co-funded by NAJ and the AJCA, led by Chad Mueller at Oregon State University, examined Jersey steer growth and carcass merit.
The following year, another NAJ-AJCA collaboration, the Capper-Cady life-cycle assessment, found that, per unit of cheese, Jerseys produced a 20% smaller carbon footprint than Holsteins, using 32% less water and 21% land while emitting fewer greenhouse gases. The work was later updated in 2022 by Dr. Frank Mitloehner at the University of California-Davis.
More recent research has explored human nutrition. A study led by Dr. Dennis Savaiano at Purdue University, co-funded by NAJ and the A2 Milk Company, examined the potential benefits of A2 milk for lactose-intolerant individuals. The findings point to opportunities for Jersey breeders focusing on A2 genetics.
Building Value Beyond the Farm
Branding has also played a key role in the Jersey strategy, from Jersey Creamline in the 1920s to the All-Jersey program. Jersey Pride branded cheese found favor in the early 1980s, followed by the Queen of Quality program, a reintroduced version of NAJ’s All-Jersey program, in 2008.
NAJ has also invested in helping individual producers navigate value-added opportunities. Jersey Value-Added 101 Workshops, held in Missouri (2017), Ohio (2018) and Vermont (2019). In 2018, a Jersey nutrition webinar series covering transition cows, milking cows, heifers and calves was developed as a resource hub, an initiative led by former NAJ president David Endres of Lodi, Wis.
Equity funds continue to support NAJ staff working one-on-one with producers, reinforcing the organization’s role as both advocate and partner.
As former NAJ vice president and Queen of Quality producer James S. Huffard III of Crocket, Va., put it, “NAJ plants the seed, does the prodding and keeps the ball rolling. Without NAJ doing battle for us, we’d be ignored.”
The Work Continues
Market forces will continue to shape how cattle are bred, managed and valued. For that reason, it remains critical for the breed to have a seat at the table and for NAJ to research, document and communicate the advantages of Jersey milk.
In a moment that feels almost like déjà vu, rising demand for protein is once again reshaping markets. With its natural protein edge, the Jersey breed is well-poised to benefit.
But as history shows, opportunity alone is not enough.
“Protein should now influence how we will mate our cows, feed our cows and reward those cows and their owners for their effort,” Richard Clauss, former NAJ and AJCA president and a founder of Hilmar Cheese Company.
“Equity was based on sound economics with research to support it; Equity reached across breed lines and made every dairy breed more aware of the need for higher-component milk; and Equity changed the dairy industry.”
Doug Wilson, former CEO of Cooperative Resources International/Genex, put it plainly in 2007: “As a breed, you must invest in the heavy lifting, continually fight the battles, and simply keep working at it. The bottom line is that no one else will do it for you.”
To celebrate 50 years of Project Equity, a ceremony will be held June 18, 2026, in conjunction with the NAJ annual meeting in Springfield, Mo.
