Even though the congressional supercommittee process failed to reach an agreement on how to make $1.2 trillion in spending cuts, the leaders of the House and Senate Agriculture committees did agree last month to a 2012 Farm Bill framework that includes the NMPF-backed Dairy Security Act.

The top Democrats and Republicans on the House and Senate panels had been negotiating throughout the autumn on the outlines of a new farm bill, in an effort to reduce overall agriculture spending by $23 billion. That effort paralleled the larger supercommittee process that targeted farm programs as part of its package of trillion-dollar cuts. Because the Dairy Security Act provides a budget savings compared to current policies – and because it offers farmers a better safety net – the Ag committee negotiators included the DSA as part of the overall package.

Specifically, both the Dairy Margin Protection Program and the Dairy Market Stabilization Program were featured in the Farm Bill draft, while the Dairy Product Price Support Program, the Milk Income Loss Contract Program and the Dairy Export Incentive Program were eliminated.

Although the demise of the supercommittee process has now pushed consideration of the next Farm Bill into 2012, NMPF is confident that the Dairy Security Act remains the foundation of dairy policy reform as the next Farm Bill is refined. NMPF will continue working with its members to urge House and Senate members to build on the agreement achieved last month, so that dairy policy reform can be finalized next year.

Dairy cooperatives and individual farmers representing 70.1% of the nation’s milk have committed two cents per hundred pounds of milk to Cooperatives Working Together (CWT) for 2012 and 2013. As a result of reaching the minimum participation level that the CWT Committee established, the Export Assistance program will carry on with assisting member cooperatives in selling U.S. cheese to key markets around the world. The two-cent investment will begin with milk marketed in January 2012, and continue on member milk marketings through December 2013.

Meanwhile, CWT members continued to aggressively sell American cheeses to key markets in November. A total of 9.5 million pounds of cheddar and Monterey Jack cheese, scheduled for shipment through April 2012, will receive assistance from CWT. This brings the total export sales assisted so far in 2011 to 88.3 million pounds going to 25 countries on four continents.

CWT requires extensive documentation from cooperative members showing that the product was delivered in order for assistance payments to be made.

 

NMPF announced last month that it is releasing an updated version of the Milk and Dairy Beef Drug Residue Prevention Manual for 2012. One of the areas of focus for the National Dairy FARM Program^TM, the residue prevention document can be found online at www.nationaldairyfarm.com.

The Milk and Dairy Beef Drug Residue Prevention Manual is a concise review of appropriate antibiotic use in dairy animals. The manual is a quick resource to review those antibiotics approved for dairy animals, and also can be used as an educational tool for farm managers as they develop their on-farm best management practices necessary to avoid milk and meat residues. Additions to the 2012 version include a section on meat drug residue testing, an expanded list of products and risk factors for residues, as well as an updated drug and test kit list. The 2012 manual includes a certificate of participation that can be signed by a producer and their veterinarian to demonstrate their commitment to proper use of antibiotics on the dairy.

“The use of antibiotics in livestock is undergoing increased scrutiny, and this manual will help ensure that veterinary treatments are used appropriately,” said Jerry Kozak, President and CEO of NMPF.

The Residue Prevention manual was sponsored by Charm Sciences, IDEXX, and Pfizer Animal Health. No check-off finds were used in the development and distribution of this manual.

For more information on the residue prevention manual or the National Dairy FARM Program, contact Betsy Flores at (703) 243-6111.

In August 2011, the U.S. Department of Agriculture’s, Agricultural Marketing Service (USDA-AMS) released a draft of the “European Health Certification Program” to dairy industry trade associations (NMPF, the U.S. Dairy Export Council, the International Dairy Foods Association, and the American Dairy Products Institute) for review and comment. After gathering member feedback, NMPF submitted comments and questions last month to AMS, expressing general support for the program, and requesting additional clarification on specific points.

On November 21, 2011, USDA-AMS met with industry stakeholders, including NMPF, to discuss the logistical details of the project and to review the stakeholders’ remaining questions. As a result of that meeting, USDA-AMS finalized the requirements of the “European Health Certification Program”.

The effective date for beginning the transition to the new program requirements is January 1, 2012. After March 31, 2012, all shipments of dairy products requiring an EU health certificate must comply with the updated certification program and must be accompanied by an updated Certificate of Conformance.

The major differences between U.S. and EU milk requirements are: 1) the EU somatic cell count (SCC) and bacterial standard plate count (SPC) requirements apply at the farm level, and 2) the EU maximum SCC in raw cow’s milk is 400,000 cells/mL. Additional highlights of the program include:

• Milk suppliers, dairy processors, and applicants for EU Health Certificates are responsible for maintaining records to trace their product back one step in the supply chain (toward the raw milk production) for all dairy products/ingredients intended for export to the EU.
• Processors of dairy products/ingredients that require an EU Health Certificate will be responsible for maintaining Certificates of Conformance (COCs) demonstrating the dairy products/ingredients meet EU SCC and SPC requirements.
• Testing of the farm-level milk supply will be necessary to document compliance with the requirements for export of dairy products to the EU (both Grade A and Grade B milk for SCC, and Grade B milk for SPC). Grade A plants that supply ingredients or raw milk are generally exempt from requirements to keep additional records on SPC to confirm compliance with EU regulations.
• Milk suppliers will be responsible for providing COCs to processors, as well as maintaining records of individual farms, to confirm that raw milk meeting SCC and SPC requirements of the EU is received at facilities manufacturing dairy products for shipment to the EU.
• With respect to timing and implementation, all farms will be given three months to establish initial rolling three-month means – that is, SCC data collected in January, February, and March will be used to determine the rolling three-month mean for April. Non-Grade A farms will be given two months (January and February) to establish initial rolling two-month means for SPC. This data will serve as the initial basis for updated COCs under the new program requirements. According to the new program instructions, if a rolling mean exceeds EU requirements, the milk supplier must then notify AMS.
• The program instructions include a level of flexibility for farms that exceed EU SCC or SPC requirements, but work toward compliance. (For detail on these provisions, see Section F “Milk Supplier’s Responsibility” (pages 6-7), sections b and c.)

Information on the certification program may be found online. Please contact Beth Briczinski if you have questions or trouble accessing the link.

 

 

 

 

 

Often times, the wheels of government hardly turn at all…until an emergency appears, and then suddenly they spin like crazy to get traction. Such has been the case in Washington regarding farm policy, where a process that could have taken years has been accelerated into a period of a couple months. The threat of shrinking federal budgets has been the torque to prompt our legislators to make hard, necessary and prudent choices about the future.

By all appearances, it looks like the next Farm Bill essentially has been drafted, in a very focused fashion. And that means that regarding dairy policy, a lengthy journey is nearer to completion…even while we can’t (to mix metaphors) count our chickens before they’re hatched.

The federal budget crisis has been the dominant theme in Washington this year. Every decision made, every proposal offered, has been shadowed by the need to align spending with priorities, and shrinking resources. Because the choices have become so tough, Congress as a whole delegated the really hard decisions to the special 12-person supercommittee, appointed earlier this year.

It’s now obvious that the supercommittee effort has failed to live up to expectations. The six Democrats and six Republicans on the panel struggled in vain to agree on a mix of $1.2 trillion in revenue enhancements and spending cuts. But even if that larger process didn’t pan out, an enormous, bipartisan agreement was achieved was in the area of agricultural programs that will bear real fruit.

The credit for that development goes to the leaders of the House and Senate agriculture committees, who sensed that this extraordinary budget pressure was both a threat and an opportunity. While existing farm programs certainly are threatened by the need to generate budget savings, the workings of the supercommittee also have offered an opportunity to make some sweeping changes. Sensing that a planned, methodical reduction in spending is preferable to an indiscriminate haircut, the House and Senate ag committees didn’t let this crisis go to waste.

What that means for dairy policy is that the benefits of NMPF’s Foundation for the Future program have risen to the fore. As I’ve written previously in this space, the FFTF offers a better safety net for dairy producers, while it reduces the dairy budget 20%, or $131 million, compared to the current Farm Bill. Rarely is a budget cut simultaneously both good policy and good politics, but in this case, it is. These budget savings are the right fiscal medicine, at the right time.

It’s important to acknowledge that Foundation for the Future has evolved into the Dairy Security Act, and that NMPF’s initial proposal has changed in important and beneficial ways. Most critically, the proposal now offers farmers a choice between the protections of a government safety net, and the prospect of a completely free-market approach with essentially no government support at all.

Those who choose the first option will be subject to the Market Stabilization program so that they can help reduce milk production during times when markets are out of kilter, and margins are poor. Those who want some help from the government will be expected to be part of the solution. But those who don’t believe in such an approach will not be mandated to be part of it. There’s no free lunch, and this program reflects the new reality of a government with limits. Current dairy programs, including the MILC, the dairy product price support program, and the Dairy Export Incentive Program, will be eliminated. None of these individually, or even together, are as an effective a safety net as the new Dairy Security Act will be.

The Dairy Security Act isn’t about raising farm-level prices, but about helping prevent the hemorrhaging of dairy farmers’ equity when their margins are severely compressed. After all, the farmer’s share of the consumer’s dairy dollar is only about 30 cents anyway, and retail prices often don’t reflect changes in farm prices anyway. 2009 was an example of that, when processors recorded record profits, and farmers suffered record losses.

So supercommittee effort may be D.O.A., but its legacy is an agreement for how to save $23 billion in farm program spending in the next decade. The fiscal forces bearing down on the agriculture committees in the House and Senate have produced a series of carefully calibrated compromises and trade-offs. Pressures in Washington to cut spending generally, and farm programs in particular, are not going to abate. And the ag committee members, having just trod this path, will be loathe to walk away from this deal regardless of when the next Farm Bill actually gets passed.