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Ironically, the morning after the White House dinner, there was another “Nixon goes to China” moment, only this time, it involved the First Lady, along with an institution perhaps even more powerful than China: Wal-Mart. Michelle Obama appeared on January 20th with top Wal-Mart executives to endorse the retailing behemoth’s five-year plan to reduce sodium, fat and sugar in many of its food offerings.

The significance of this announcement is that it’s the first time Mrs. Obama – whose signature issue is healthier lifestyles, achieved through better eating and exercising habits – has lent her support behind the goals of a particular company. And, of course, it happens to be the biggest retail company in the country. Wal-Mart is a sextant for the entire consumer marketing chain.

This development happened, just coincidentally, a week after the U.S. Department of Agriculture announced a new set of proposed guidelines for the foods served in the school lunch line. As has already been widely reported, these guidelines portend big changes for what school-aged kids may be served, starting in the 2012 school year. Any milk with a fat content higher than 1 percent is out. Flavored milk with any fat is also out. So while the good news is that the USDA is not instituting a blanket ban on chocolate milk, as some had advocated, any flavored milk, chocolate or otherwise, must be fat-free.

The truth is, this development is just more writing on the wall about where both the government and the private sector are going with respect to food formulations and the types of menu items offered. More than 75% of the white milk, and 90% of flavored milk served in schools, is already 1% or less. Over one-third of school districts already are serving fat-free flavored milk, while a few have banned flavored milk entirely.

The dairy industry needs a two-pronged approach in response to the USDA proposal: first, we have to seek assurances that reformulating flavored milks to either reduce sugar, or eliminate fat, doesn’t result in a decrease in overall consumption. In some school districts where chocolate milk has already been dropped from school meals, there are reports of significant drop-offs in total milk consumption. More research is needed to dig into that prospective reaction on the part of students.

While the goal of getting the healthiest-possible products in schools is, on paper, a laudable one, the paramount goal of the government should be ensuring that the foods kids actually eat – as opposed to those they are offered but choose not to consume – provide them with the proper nutrition. Or, as Wal-Mart executive Leslie Dach told the New York Times in explaining why Wal-Mart is giving consumers a five-year adjustment period as reformulated products are introduced: “It doesn’t do you any good to have healthy food if people don’t eat it.”

The second prong of the response is that dairy processors have to rise to the challenge of formulating their school offerings in ways that will comply with these regulations. There’s already been a great deal of work done to fiddle with sugar and flavor intensities to make chocolate milk as “healthy” as possible. More work in that regard will be needed as the USDA proceeds down this path. This may include using non-nutritive imitation sweeteners, a position that NMPF endorses as a way to minimize added sugars, which are also being targeted by some schools.

At the end of the day, the USDA probably doesn’t need to issue a single new dietary recommendation or regulation on ways to reduce sugar, fat and sodium from people’s diets, if Michelle Obama continues to team up with Wal-Mart and other food processors and vendors to push changes throughout the food chain. The trends are clear; it’s up to affected parties, like the dairy sector, to make the necessary adjustments in order to continue to sell our products. We landed men on the moon; we should be capable of reformulating our products to meet nutritional trends as they wax and wane.