News for Dairy Co-Ops - September 7, 2011

Volume 69. No. 9

Newsletter Stories

CWT Continues Export Efforts in February

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CWT Continues Export Efforts in February

The CWT Export Assistance program provided assistance in February to four CWT member cooperatives selling 11.2 million pounds of Cheddar and Monterey Jack cheese to 10 countries on four continents. The product is scheduled to be shipped from March through June 2011. Add to that the 22.7 million pounds of CWT-assisted 2010 cheese sales scheduled to be shipped in the first six months of 2011, and the Export Assistance program will be making a significant contribution to expanding overseas sales.

The 52 million pounds of cheese exports assisted by CWT and shipped in 2010 account for 13.6% of total U.S. cheese shipments. The 17 million pounds of butterfat (in the form of butter and anhydrous milk fat) CWT assisted and shipped in 2010 equaled 14.1% of total butterfat exports. These CWT sales produced an additional $398 million of revenue, adding an average of 18 cents per hundredweight to U.S. producers’ milk checks in 2010.

Some producers have questioned why CWT provides export assistance when the cheese price is $2.00 a pound. The purpose of CWT is to help maintain the role of the U.S. as a consistent, reliable exporter of value-added dairy products, which is not a role that American suppliers have played historically. In the past, the tendency of U.S. manufacturers was to export only what the domestic market would not absorb. By 2008, the export arena became a major buyer of U.S. milk solids, with total sales of 11%.

In 2009, a combination of factors resulted in U.S. dairy product exports dropping 15.5%, the equivalent of 1.7% of total U.S. milk solids produced. However, it was in products that most impact producer milk prices where the biggest drops occurred – cheese exports down 50 million pounds, butter exports down 126 million pounds, and skim milk powder (protein standardized nonfat powder) down 314 million pounds.

In order to prevent a re-occurrence of 2009 in the coming year, CWT must continue to assist U.S. cheese sales in the world marketplace. When the participation in CWT reaches the 75% level necessary for the 2¢ assessment to begin, CWT will be able to add to the products receiving export assistance and maintain U.S. dairy producers’ world market share and reasonable margins.

 

Dairy Legislation Among Items Congress Expected to Deal With This Fall

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Dairy Legislation Among Items Congress Expected to Deal With This Fall

Congress returns to Washington this week with a busy agenda, including a heavy focus on economic issues, such as the Obama Administration’s unveiling of a new job growth plan, and the first meeting of the congressional budget-cutting “super committee,” both set for tomorrow.

Dairy policy is also likely to be a lively topic, as House Agriculture Committee Ranking Democrat Collin Peterson prepares to formally introduce legislation modeled after NMPF’s Foundation for the Future package. Last month, Congressman Mike Simpson of Idaho’s second district, a senior Republican from one of the largest dairy states, announced he will be a cosponsor of the draft legislation, once it is introduced. The current draft is available online.

NMPF believes Simpson’s support is “an important step in demonstrating the bipartisan, national scope of the effort to reform dairy policy,” according to NMPF President and CEO Jerry Kozak. “We’ve come a long way in the past two years in devising a sensible compromise approach to new dairy policy. While still have a great deal of work ahead of us, the advent of legislation based on Foundation for the Future is a huge opportunity to make badly-needed changes in the status quo system.”

Peterson, along with Simpson, will now be seeking additional cosponsors, in both parties, to cosponsor the legislation.

Dairy Producers Encouraged to Register for NMPF Annual Meeting

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Dairy Producers Encouraged to Register for NMPF Annual Meeting

Registration is open for those wishing to attend the 2011 annual meeting that NMPF hosts jointly with the National Dairy Promotion and Research Board and the United Dairy Industry Association. This year's meeting will be held November 14 - 16 at the Town and Country Resort & Convention Center in San Diego, CA.

With the theme of "Navigating a New Course," the meeting offers attendees several days of informative programming in addition to opportunities to interact and network with dairy producers and industry leaders from across the country. Dairy producers, cooperative staff, Young Cooperators (YCs), industry suppliers, trade press, and others from within the dairy sector are all invited to attend.

Individual and group meeting registration, along with hotel reservations, can be made online at www.dairyevents.com. Although online registration is preferred, a registration form may also be filled out and submitted via mail or fax. Online, mail, and fax registration must be submitted with payment by Monday, October 24. Visit www.nmpf.org/nmpf-joint-annual-meeting for more information about the annual meeting.

House Subcommittee to Review Dairy Federal Dairy Programs Thursday

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House Subcommittee to Review Dairy Federal Dairy Programs Thursday

The House Agriculture Livestock, Poultry and Dairy Subcommittee will host a dairy audit hearing on Thursday, September 8. The hearing witnesses will only include U.S. Department of Agriculture (USDA) officials from the Farm Service Agency (FSA) and Agriculture Marketing Service (AMS). A video stream from the hearing, which starts at 2 pm EDT, is available here.

USDA will testify and answer questions regarding current dairy policies and programs. NMPF will be preparing written testimony for the record outlining why Foundation for the Future (FFTF) is the best approach for reforming dairy programs. For more information on FFTF, please visit www.futurefordairy.com.

Mexico Trucking Agreement Reached, Implementation Delayed

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Mexico Trucking Agreement Reached, Implementation Delayed

The United States and Mexico signed a Memorandum of Understanding (MOU) on July 6, 2011 formally outlining a pilot program to allow Mexico-domiciled motor carriers to operate throughout the United States.

Despite concern raised in a recent report by the Inspector General of the U.S. Transportation Department, the Federal Motor Carrier Safety Administration (FMCSA) is ready for implementation of the U.S. – Mexico cross border trucking program. Some areas of concern in the Transportation Department IG’s report are: clarification of how it will accomplish compliance reviews inside Mexico’s borders, site specific plans for verification of drivers and trucks at the border, implementation plans for electronic on board recorders for pilot program trucks, and training for inspection personnel for the pilot program.

In addition, Department of Transportation (DOT) has stated that approximately 46 Mexican carrier companies will need to participate in the pilot cross-border trucking program before it terminates in three years. A Federal Register notice stated that this “statistically valid sample” must be achieved by the pilot program before a longer-term cross-border trucking program can be implemented. However, analysts suggest that, absent a longer-term cross-border trucking program, Mexico is entitled under NAFTA to re-impose “retaliatory tariffs” on US goods previously lifted.

CEO’S CORNER


Jim Mulhern
NMPF President & CEO
Associate Member Focus: 

 

CoBank

CoBank is a $69 billion cooperative bank serving vital industries across rural America. CoBank provides loans, leases, export financing, and other financial services to agribusinesses and rural power, water, and communications providers in all 50 states.

CoBank is a proud member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture and the nation's rural economy. Headquartered near Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

CoBank’s representative is Michael Oleksak, who can be reached at 860-814-4047 or by email at MOleksak@cobank.com. To learn more about CoBank, please visit their website at www.cobank.com.