Making Headway Despite Headwinds

May 05,2017

The first four months of 2017 have been rather stormy for America’s dairy farmers, and for National Milk’s advocacy on the main policy challenges affecting them. The good news is that on almost every issue in which we’re engaged – from fixing the farm bill’s Margin Protection Program, to holding countries like Canada accountable for their unfair trade practices, to improving federal nutrition programs – we’ve made tangible headway already this year.

As 2017 began, it was clear there would be both opportunities and challenges in the days ahead. We geared up to deal with major challenges on some issues, such as immigration, while marshaling resources to pursue potential opportunities on others, such as demanding that FDA enforce federal dairy labeling standards.  Here’s a brief assessment of where things stand this spring:

Fixing the farm bill safety net.  Following months of review by our Economic Policy Committee, earlier this year the NMPF board unanimously approved a series of recommended improvements to the Margin Protection Program (MPP). In order to secure these necessary changes, we will need congressional action. Now in its third full year, the program in its current form has been a disappointment, and needs to be revamped in order to function as an effective risk management program and regain the faith of dairy farmers. NMPF’s recommendations – including restoring our originally proposed feed formula, recalculating margins, and adjusting the price levels of premiums – have a price tag for which Congress will need to allocate additional resources.  We had worked with leaders in Congress on the recently passed FY 2017 federal spending bill in an effort to find additional money for some of the badly-needed changes, but the new funding didn’t develop.  So, we will continue to work with bipartisan leaders in both the House and Senate, to drive home the message that our dairy producers need a functioning safety net working for them – and that will require resources from Congress.   We need to get the right policy for farmers, and not let the budget tail wag the dog.

Maintaining and expanding export markets.  We discovered the power of the “Trump Tweet” when the President last month used Twitter to express his solidarity with dairy farmers hurt by Canada’s new milk pricing scheme.  Along with support we’ve garnered from many governors and congressional leaders, having President Trump talk about the issue has made our trade dispute with Canada front page news.  Now that nearly all of those farmers most immediately impacted by the loss of milk protein sales have found new markets, the real challenge will be to keep the pressure on Canada to end its national ingredients strategy.  This becomes even more imperative as Canada unfairly offloads its milk protein exports and drives down world market prices for milk powder, harming all U.S. dairy farmers, as well as those in other exporting nations like New Zealand, Australia and the 28-country European Union.  This is part of a pattern of misbehavior by Canada, and it simply cannot stand. 

At the same time, as NAFTA is reassessed by the Administration, we are continuing to stress the need to preserve our partnership with America’s #1 export market: Mexico.  I traveled to Mexico in March, joined by Tom Vilsack and Michael Dykes, my colleagues who head the U.S. Dairy Export Council and International Dairy Foods Association, respectively.  In meetings with farmer and industry groups, as well as Mexican government officials, we drove home our commitment to our customers there. In the days and weeks ahead we must keep our focus on both the north of the border confrontation with Canada, as well as the continued value of our relationship with customers south of the border in Mexico.

Reforming immigration policy and addressing labor needs.  As the new year began we anticipated that the Trump Administration was going to ramp up enforcement against illegal immigrants – actions that could create concerns for farm employers who rely on immigrant workers.  National Milk continues to emphasize in Congress that conversations about law enforcement approaches to immigration also must recognize that we need realistic solutions to the labor challenges farmers face.  This is particularly true for dairy, because the only existing farm worker visa system, the seasonal H-2A program, cannot be used by our sector with its year-round labor demands.  The good news is that we’re seeing evidence our message is being heard: in his first days on the job, Agriculture Secretary Sonny Perdue has discussed the labor dilemma dairy farmers face, and pledged to address the issue as he gets situated at USDA.  Members of Congress are also suggesting legislative avenues to help milk producers, giving me greater hope that we can find a way to rectify this years-long challenge.

Improving school nutrition.  In one of his first official acts as Agriculture Secretary, Sonny Perdue announced a series of changes to the federal school lunch program, including one advocated by NMPF for more than five years: bringing low-fat flavored milk back to the lunch line.  Chocolate and other flavored 1% milks were removed from the school lunch program in 2011, with only non-fat white and flavored milk, and 1% white milk, remaining.  Milk consumption in many schools across the country declined as a result of that regulatory change. The policy change announced this month will harmonize USDA policy with that of the federal Dietary Guidelines for America, which recognize the value of low-fat flavored milk as an important vehicle to deliver nine essential nutrients to our children.  This common-sense regulatory change is welcome news for dairy farmers and processors, with whom we’ve worked to get 1% flavored milk back in schools, and augurs well for our future relationship with Secretary Perdue.

These four issues are just a part of National Milk’s efforts to advance member interests so far this year.  Later this month we’ll advocate for common sense regulatory changes at the biennial meeting of the National Conference of Interstate Milk Shipments in Michigan.  One of our proposals aims to make sure that milk imitators are not able to take advantage of the halo of the real milk products they wish to copy.  Also on the regulatory front, we’re encouraging efforts to roll back the Environmental Protection Agency’s controversial Waters of the U.S. regulation.  We’re also working to create a new tax credit to incentivize the adoption of nutrient recovery and biogas systems to capture the value of manure.

Meanwhile, from an economic standpoint, our Cooperatives Working Together program, in the first four months of 2017, has been busy assisting our member cooperatives find markets for the equivalent of 306 million pounds of milk in 14 countries.  As domestic milk production grows and global competition for international markets intensifies, our CWT program provides a critically important and unique tool to assist America’s farmer-owned cooperatives in being more competitive in overseas markets.

As spring gives way to summer, we’re going to continue our intense focus on these and other policy issues to improve the economic environment for farmers and find creative ways to put our community on better footing as we move through 2017.