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Johanns Resigns From USDA, Conner Named Acting Secretary
Chuck Conner, the Deputy Secretary of Agriculture the past two years, was named Acting Secretary last month following the resignation of Mike Johanns. Johanns, who came to Washington to head the USDA in early 2005, is returning to Nebraska, where he is expected to run for Senate next year.
After being named Acting Secretary on Sept. 20th, Conner told reporters that passing a farm bill remains a key priority for him and the Bush Administration.
"I was involved in every aspect of the formation of the Administration's Farm Bill proposal, from hosting Farm Bill Forums to testifying before Congress. I personally attended virtually every subcommittee and committee markup in the House of Representatives. I can assure you that we are going to continue to work with the Senate to advocate for policies that put the American farmer and rancher on a strong competitive footing while ensuring a very strong income safety net," Conner said.
Farm Bill Markup Pushed Into October In Senate
The timeframe for writing a Farm Bill in the Senate continues to slip, although indications are that the Agriculture Committee may hold a markup the first week of October, according to Committee Chairman Tom Harkin (D-IA).
The big reason for delays is the matter of how to obtain funding for certain programs. Harkin, Finance Committee Chairman Max Baucus (D-MT), and Budget Committee chairman Kent Conrad (D-ND), all have expressed differing opinions on programs that the Senate Farm Bill should contain.
With respect to dairy issues, NMPF is still pushing a comprehensive package similar to the one that the House approved in July. The House bill contains many different items that are NMPF priorities, such as a compromise approach to forward contracting featuring producer protections that NMPF sought, such as the ability to review a new forward contracting program through a public comment process. NMPF is also battling to ensure that the provision to include the 15 cent checkoff to imports is included in the Senate bill, where more opposition to the import assessment is expected than in the Senate.
Free Trade Agreements Gain Momentum
Congress has begun to tackle the free trade agreements that have been negotiated, but are awaiting approval on Capitol Hill.
Over the past two weeks, the Senate Finance Committee voted 18 to 3 in favor of the Peru FTA, while the House Ways & Means Committee unanimously approved the Peru pact in its mock markups of the trade deal. This was a strong kickoff for this FTA, which would benefit the U.S. dairy industry.
NMPF is working to secure passage of the Peru FTA, given the strong prospects it offers for new U.S. dairy export opportunities to this net dairy-importing country. As part of this effort, NMPF joined with USDA and other leading agricultural organizations in a press conference held Sept. 27th to urge pass of this and other pending FTAs, particularly those with Panama and South Korea, which would also offer benefits to U.S. dairy producers. NMPF stressed the remarkable growth of U.S. dairy exports over the past several years and urged Congress to pass these balanced, well-negotiated trade agreements in order to help us continue this positive track-record.
Appearing at the press conference last week, Steve Graybeal, a dairy farmer from Peach Bottom, PA, and the Chairman of Maryland-Virginia Milk Producers Association, said that the Peru FTA "is certainly one that meets the test of a well-negotiated deal, and U.S. dairy producers certainly look forward to enjoying the expansion of export potential that it would bring about to help us continue on our path of strong growth in our sales abroad."
WTO Talks Continue
World Trade Organization members continue to work diligently towards achieving a global trade agreement in the coming months. Negotiators recently wrapped up a lengthy session of discussions that went on throughout the first three weeks of September. Those discussions have focused on examining the paper released by Ag Negotiations Chairman Crawford Falconer in July, and exploring avenues for consensus.
Talks are currently on a brief hiatus, and will resume the week of October 8th. After further dialogue between WTO members, Chairman Falconer is expected to put out a new version of his text in mid to late October.
NMPF remains actively engaged in this process and in frequent communication with our negotiators to help ensure that dairy producers' concerns and goals are sufficiently addressed in any final agreement.
NMPF YCs Return to Capitol Hill to Lobbying for Immigration Reform
NMPF conducted its second Young Cooperator Fly-in of 2007 last month, when dairy producers from 19 different states and 10 different co-ops left their mark on Capitol Hill.
The hot issues this fall, as they were earlier in the summer during the first YC meeting in Washington, were immigration and the farm bill.
"It is critical, especially as the Senate is developing its farm bill, and when immigration policies could have a devastating impact on dairy operations, that contact is made with Congress by our members," said Jerry Kozak, President and CEO of NMPF.
The dairy producers who took part in the lobbying effort "really put a face and a name on the broader policy issues that we deal with on a regular basis," Kozak said. "Constituent contact has a powerful impact with Congress."
USDA to Offer Livestock Gross Margin for Dairy Farmers
On July 27, the Federal Crop Insurance Corporation approved a USDA pilot program to provide Livestock Gross Margin insurance for dairy farmers. This program would, in effect, repackage Class III milk futures options and corn and soybean options, in order to help farmers lock in their margin between feed costs and milk prices.
Under this program, policies would specify volumes of milk to be sold and corn and soybeans to be bought for feed each month, as well as the number of months covered. A gross margin is calculated as the Class III milk prices times milk sold minus corn and soy prices times feed bought. A choice of targets for this gross margin would be set, and insurance premiums determined, based on futures prices at the time of the policy. Payment would be made at the end of the period if the gross margin, totaled for all the months, fell below the chosen target.
The policies would use Class III milk futures prices as the basis for milk prices, and corn and soybean options for feed prices. This would make the program most effective for producers in high Class III markets, but a bit complicated in other markets. The program would not cover production risk, only milk and feed pricing. Finally, the contracts are designed to be revenue neutral; that is, USDA would not subsidize the contracts themselves, only provide some administrative support.
A description of the program and an accompanying slide presentation can be found with the August 24 minutes of the Massachusetts Dairy Farm Revitalization Task Force.
If you have questions, please call Roger Cryan at NMPF.
Livestock Compensation Program Sign Up Dates Announced
The USDA's Farm Service Agency has released a fact sheet on the Livestock Indemnity Program which compensates livestock owners for livestock losses between Jan.1, 2005 and Feb. 28, 2007 that resulted from natural disasters. To be eligible, livestock owners must have been located in a county or contiguous county designated a natural disaster and sign up beginning Sept. 10, 2007. Applicants are required to provide documentation about cattle ownership. A complete list of eligibility requirements can be found in the Fact Sheet. To read the full release detailing sign up dates visit to the FSA website.
CWT launches Ambassador Program
Cooperatives Working Together (CWT) is making a concerted effort to increase the number of dairy farmers supporting CWT.
Based on the success of dairy-farmer-to-dairy-farmer membership efforts in Idaho, CWT is launching the CWT Ambassadors program. CWT cooperative and individual members have been asked to nominate dairy farmers to serve as Ambassadors. Once selected, CWT Ambassadors will be asked to contact specifically-identified dairy farmers who are currently not supporting CWT. They will communicate the benefits of supporting CWT and tell these producers how their CWT membership will make it an even more effective program.
If you are interested in serving as a CWT Ambassador, please fax or e-mail complete contact information to Jim Tillison, fax number 703-841-9328.
CWT has also posted a variety of new informational materials on its website www.cwt.coop. These include a brochure and video clip highlighting the results of an economic analysis, released last month, about the 2007 return on investment that producers are receiving from CWT.
NMPF Disappointed with USDA Decision to Reopen Canadian Border in November to Dairy Animal Exports
NMPF has expressed its "serious reservations" about the impact of a renewal in Canadian dairy animal exports to the United States.
The U.S. Department of Agriculture announced last month it will reopen the U.S. border on Nov. 19 to all types of Canadian cattle, including those intended for slaughter, as well as those for breeding purposes, which would include dairy heifers.
The U.S. closed its borders to Canadian beef and live cattle four years ago, following the discovery of BSE, or mad cow disease, in May 2003. In 2005, the USDA reopened the border for younger animals destined for slaughter, and for meat from younger animals. The new regulation announced today will allow exports of all forms of Canadian cattle exports born after March 1, 1999, including milk cows to be used for breeding purposes.
"The USDA has dismissed as 'negligible' the economic impact of this decision, but dairy farmers are very concerned about what this will do to their milk prices," said Jerry Kozak, President and CEO of NMPF. "Our analysis shows that a return to export levels of 2003 will reduce milk prices by 18% over the next five years, cutting dairy farmer income by $5 billion."
Those figures were shared earlier in the summer with both the USDA and the Office of Management and Budget, which has the responsibility to assess the impact of major changes in federal regulations.
NMPF estimates that additional annual imports of between 47,000 and 60,000 Canadian dairy heifers could increase milk production by 0.5% per year over the next five years, which "is a large enough quantity to generate significant damage in the milk checks of dairy farmers," Kozak said.
In addition to a reduction in milk prices, a surge in Canadian dairy animals will reduce the current value of a farmer's dairy herd, "substantially reducing" his net worth, Kozak said.
NMPF is also concerned that while Canada is being classified as a "minimal risk" country, it could potentially export more animals infected with BSE with negative ramifications for beef prices as well as milk prices. There have been seven cases of BSE in Canadian cattle born after implementation of a feed ban in 1997 to prevent the spread of mad cow disease, and five of those were born after Mar. 1, 1999 - and thus could have been sent to the U.S. under the terms of the new regulation.
"Our dairy farmers can't take any comfort from USDA's probabilities and statistical projections. The reality is that animals infected with BSE in Canada become our problem when they arrive in the U.S.," Kozak said, pointing out that the first case of BSE in the U.S. in 2003, in an animal located in Washington State, was born in Canada.
"The existence of BSE-infected animals could substantially undercut demand for beef, as it has done in Europe. It could also lead to greater discounts for dairy cows at slaughter," Kozak said.
NMPF staff met with officials from the OMB last month, asking for an opportunity to further assist the OMB with a full review of the potential impact of this proposed regulation.
Kozak said that NMPF has "laid a clear and coherent foundation for any future action that may be necessary to protect the integrity of our national dairy herd. We are examining what additional recourse we may have in this matter."
Building A Better Future Meeting Deadlines & Sponsorship Opportunities Coming
The 2007 Joint Annual Meeting with NMPF and DMI will be held November 12 - 14 in Lake Buena Vista, Florida at the Walt Disney World Dolphin Hotel. Don't delay; make your room reservations now to secure your place before the October 5th cut-off date. The reservations number is 800-227-1500. To register for the meeting go online to www.dairyevents.com.
Also, contact Anuja Miner at 703-243-6111 to learn more about sponsorship opportunities or exhibitor information. Thank you to those sponsors that have already pledged their support. Dairy Bar sponsors include: Gustafson Dairy, Sargento and Kraft Foods, Unilever and Publix. General meeting sponsors include: T.C. Jacoby, National Rural Electric Cooperative Association, Western Dairyfarmers’ Promotion Association and Monsanto Company. There is still time to become a sponsor or have exhibit space, contact NMPF today.
Associate Member Focus: IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. is a worldwide leader in the development and commercialization of innovative technology-based products and services for veterinary, food and water applications.
The Company provides the preferred tools for monitoring the health of production animals, such as cattle, swine and poultry. IDEXX also provides diagnostics for detection of microbiological contamination of drinking water, and for screening of antibiotic residues in milk.
For more information on IDEXX, contact Roberta Lops who can be reached at 207-556-4965 or visit their website at www.IDEXX.com
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