News for Dairy Co-ops

Volume 72, No. 9

Launch of New Dairy Safety Net Caps 5-Year Effort by NMPF, Co-ops and Producers

A day that many in the industry had been anticipating for five years finally arrived August 28, when the Agriculture Department formally launched the new federal dairy safety net included in the 2014 farm bill. Now, it’s up to producers to get to know the plan, make their coverage decisions and sign up before the November 28 deadline.

The program, called the Margin Protection Program, or MPP, allows producers to protect their margin – the difference between the price of milk and the cost of feed – rather than supporting milk prices. Farmers will insure margins on a sliding scale, and must decide annually both how much of their milk production to cover and the level of margin they wish to protect.

NMPF developed the key elements of the plan after the catastrophic losses producers suffered in 2009 and again in 2012.

NMPF President and CEO Jim Mulhern called the launch of the new program a major step forward for the industry. “The Margin Protection Program is more flexible, comprehensive and equitable than any safety net program dairy farmers have had in the past,” Mulhern said. “It is truly risk management for the 21st century, and we strongly encourage farmers to invest in using it going forward.”

To help farmers familiarize themselves with the new program, NMPF has put summaries and other materials on its website and the related www.futurefordairy.com website, which is serving as a hub for information on the plan. Included are a spreadsheet with past trends in the margin and an online calculator that will allow farmers to enter their own pricing and production data to help them select insurance coverage levels. In addition, NMPF held a series of webinars on the new program.

Every farm producing milk commercially is eligible for the program. Sign-ups started at local Farm Service Agency offices September 2 and will continue for 13 weeks until Friday, Nov. 28. Farmers can register for coverage for the last four months of calendar year 2014, as well as for the entire year of 2015.

A $100 annual registration fee qualifies a farmer to receive free, basic margin insurance coverage. A premium is required at higher levels of margin coverage. Producers can cover from 25 percent to 90 percent of their production history in five percent increments and can insure their margin from $4 per hundredweight to $8 per hundredweight in 50-cent increments.

Premiums equal a producer’s production history, times the percentage of the production history they cover, multiplied by the premium rate for the level of coverage selected.

Initially, there are two options for paying premiums. Producers can either pay 100 percent at the time they sign up or they can pay 25 percent by February 1, 2015, and the remainder by June 1. NMPF is working with USDA to set up additional payment plans, including an option to pay through monthly milk check deductions.

In one important decision, USDA agreed with NMPF that lower premium rates will apply to the first 4 million pounds of annual production enrolled for every dairy operation. For 2014 and 2015, the lower rates on the first four million pounds of production will be further reduced by 25 percent.

Release of the new dairy program’s details capped five years of work by NMPF, the nation’s dairy cooperatives and other farm groups. “We applaud the U.S. Department of Agriculture on its hard work putting the final touches on the plan over the last six months,” said Mulhern.

President Punts Immigration Until After Elections

President Obama will not take any administrative action on immigration until after the November elections, the White House announced earlier this week, ending expectations that agricultural employers will benefit any time soon from changes to the nation’s labor laws.

Earlier this year, the President announced that he was directing the Department of Homeland Security and the Justice Department to give him recommendations on administrative actions he could take to provide relief to individuals who lacked legal status in the United States. That led to hopes that, absent passage of comprehensive legislation in Congress, at least some current policies may change for farm employers.

Over the summer, NMPF met with White House officials on two separate occasions to share concerns with current immigration laws, and their impact on the dairy industry. NMPF believes that the only long-term solution to the dairy industry’s immigration challenges is legislation that addresses both current and future workforce challenges. However, given the lack of congressional action to pass legislation that provides relief to dairy farmers, NMPF welcomed the opportunity to share the dairy industry’s concerns, and propose to the administration possible short-term relief for workers and various industries.

Even administrative action proved to be too controversial, however, with several Senate Democrats facing reelection voicing their concerns to the White House that any action may cost them votes in November. Hence the decision this past weekend by the White House to forego any steps that might create problems at the polls for those seeking reelection. If and when the President decides to act after the November elections, NMPF will continue to pursue relief of any kind, be it administrative or legislative.

Similarly, NMPF remains committed to passing legislation that will provide certainty and relief to dairy farmers when the 114th Congress gets underway in January 2015. NMPF worked tirelessly to pass the comprehensive immigration reform bill in the Senate in 2013. Because similar legislation was not considered in the House of Representatives, new bills will have to be drafted and passed in both chambers in the next Congress, regardless of any action President Obama may take.

Growth of Export Markets for U.S. Dairy Products Helped by CWT

Cooperatives Working Together helped member cooperatives make export sales in August totaling 9.6 million pounds of dairy products. The 36 overseas sales to customers on all six continents included 7.4 million pounds of American-type cheese, 55,116 pounds of butter, and 2.205 million pounds of whole milk powder.

The August export sales bring the year-to-date total to 153 million pounds of dairy product export sales assisted by CWT, the equivalent of 2.012 billion pounds of milk on a milkfat basis.

Through July 2014, CWT has accounted for 55% of American-type cheese exports and 43% of butter exports.

CWT is a voluntary, farmer-funded program that provides assistance to member cooperatives to maintain and expand world markets for U.S. dairy products made from milk produced by America’s dairy farmers.

Trade Negotiations Advance on Two Fronts across Pacific, Atlantic Oceans

Additional Trans-Pacific Partnership (TPP) negotiations took place last month, as the 12 countries participating in those trade discussions continue to work to bring talks to a conclusion. The impasse at this stage remains how Japan and the U.S. will handle agricultural market access. The outcome of those talks is critical for NMPF’s members, not only because of the importance of a high quality deal for dairy access into the Japanese market, but also because the result of those agricultural discussions are expected to set the tone for additional elements that remain unresolved, such as access to the Canadian market. NMPF remains deeply engaged in advocating for a strong TPP agreement and is consulting regularly with the U.S. negotiating team to help support that result.

Later this month, Transatlantic Trade and Investment Partnership (TTIP) talks between the U.S. & the EU will also reconvene. The EU’s desire to use Geographical Indications (GIs) and other restrictions to limit U.S. cheese sales is expected to remain a hot topic of discussion in those negotiations. NMPF remains adamant in rejecting the EU’s efforts to use GIs as barriers to trade and competition. Other topics that NMPF is focused on will also be discussed during the September TTIP round, including various regulatory requirements that unjustly impede trade.

NMPF Agrees to Work with Municipal Treatment Plants on Water Quality

NMPF and the National Association of Clean Water Agencies (NACWA) have signed an agreement to work together on water quality projects that benefit both dairy farmers and wastewater treatment plants in the country’s largest cities.

“Many of those plants have already spent large amounts complying with requirements under the Clean Water Act,” said NMPF President and CEO Jim Mulhern, at a public signing event on Sept. 9th. “While many cities were able to install more affordable technologies to reach initial targets, further reductions will require exponentially more funding.”

NACWA estimates that over the next 20 years, its members are facing a shortfall in funding for wastewater infrastructure upgrades approaching $500 billion. This prompted NACWA members to search for new ways to comply with Clean Water Act requirements and improve water quality from the non-point source sectors, including agriculture.

The 2014 Farm Bill included language to allow municipal entities to partner with agriculture to improve water quality. Some projects that could be funded through collaboration with USDA and municipalities include installing edge-of-field filter strips and anaerobic digestion with nutrient separation technology on farms.

“This unique opportunity provides a framework for NACWA and NMPF members to work together on projects promoting water quality, while strengthening the dairy producer community’s engagement on these issues,” said Mulhern. “While the agreement doesn’t commit NMPF to any funds or explicit obligations, it does provide a framework for NACWA and NMPF members to explore potential pilot projects and policy synergies related to water quality.”

USDA, EPA, and prominent national lawmakers all commented favorably on the signing of the NACWA/NMPF agreement, which took place at the National Press Club in Washington on Sept. 9th.

In the photo: NACWA Executive Director Ken Kirk (left) and NMPF President & CEO Jim Mulhern (right)

Registration Open for NMPF Annual Meeting

NMPF members will be packing their bags to head to Grapevine, Texas October 27 – 29, 2014 for the organization’s joint annual meeting with the National Dairy Promotion and Research Board and the United Dairy Industry Association. The meeting will be held at the Gaylord Texan Resort (in photo), just outside of Dallas.

The meeting’s program will feature Daniel Burrus, CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology-driven trends to help clients profit from technological, social and business forces that are converging to create enormous, untapped opportunities. With an unparalleled reputation for helping businesses peer into the future, Burrus is one of the world’s most recognized experts at helping people understand how technological trends will shape the world of tomorrow. 

The program will also feature Stu Rothenberg, editor and publisher of The Rothenberg Political Report, who will explain the stakes and predict the outcomes of the November 4th mid-term elections. Patrick Doyle, CEO of Domino's® Pizza, will follow Rothenberg's presentation with an update on his company's partnership with the dairy checkoff.

The opening luncheon on Tuesday that attendees may remember from the past has been replaced by a Partner Luncheon, which will showcase the meeting’s exhibitors (including NMPF associate members) in the Dairy Bar. Wednesday's luncheon will include a presentation by Charlotte Jones Anderson, executive vice president and chief brand officer of the Dallas Cowboys, in addition to a shortened awards ceremony.

At the end of the meeting, attendees will have the opportunity to unwind and kick up their heels with the Big City Outlaws, the hottest country rock party band in the Texas music scene.

Registration and hotel reservations must be made by Friday, October 3rd. Both may be done by visiting www.dairyevents.com. The hotel is currently sold out of rooms outside of the meeting block, so if you contact the hotel directly, be sure to mention NDB/NMPF/UDIA to book a room within the block at the group rate.

More information about the meeting is available at www.nmpf.org/nmpf-joint-annual-meeting.

NMPF Joins USDEC Staff to Answer ALS Challenge

In response to a challenge from Hoogwegt's Dalyn Dye and his staff, NMPF and the U.S. Dairy Export Council (with whom NMPF shares an office) showed support for the ALS Association by taking the Ice Bucket Challenge. The Ice Bucket Challenge swept across the country late this summer as an awareness initiative for the ALS Association, an organization founded to draw attention to and help fight the disease amyotrophic lateral sclerosis.

USDEC President Tom Suber (right in photo) challenged Dave Thomas, Jerry Dryer, and Jerry Kozak to complete their own challenges. NMPF President & CEO Jim Mulhern (left in photo) challenged NMPF member cooperatives to support the cause as well.

Detlefsen, Baker Join NMPF to Help with Regulatory, Economics Issues

Clay A. Detlefsen, a 25-year veteran of the International Dairy Foods Association, joined NMPF as senior vice president for regulatory and environmental affairs in mid-August. An attorney and long-time specialist in dairy regulation and policy issues, Detlefsen will also serve as NMPF’s staff counsel.

NMPF President and Chief Executive Officer Jim Mulhern praised Detlefsen’s knowledge of issues including FDA inspections, food safety and defense, workplace safety and, in particular, sustainability and the environment.

“Clay is a trusted voice on many issues facing our industry,” Mulhern said. “He will enhance our resources on many fronts but most importantly his addition will increase our focus on the environmental challenges and opportunities that dairy farmers and their cooperatives are facing.”

Also joining the NMPF staff is Economic Analyst Dustin Baker, who earned a master’s degree in agricultural economics from Cornell University earlier this year. Baker grew up on a small family farm in central Michigan and has a bachelor’s degree in agribusiness management from Michigan State. His master’s research project examined welfare impacts of dairy policy.

“We’re glad to have Dustin on board to augment our analytic capabilities, and help farmers make sense of the many sources of data that affect dairy production and marketing,” Mulhern added.

Disney Celebrates 10-Year-Old Farm Girl for Teaching Peers about Dairy

Ten-year-old Jenna Kelsay, the youngest generation in a multi-generational dairy farm family, is the latest “citizen kid” to be featured in a Disney Interactive web series that celebrates the extraordinary things kids accomplish when they embrace their interests and talents.

For the last two years, Jenna has been leading tours of her family’s Indiana farm, educating children about the source of their food and the nutritional value of dairy products. “I really like teaching kids about dairy farming and why we do it,” Jenna said. “I want kids to know when they pour a glass of milk that it actually comes from a cow.”

“I’ve been giving tours here at the farm for about eight years,” said Jenna’s mom, Amy Kelsay. “I honestly think sometimes the kids listen better when she’s giving the tour rather than when I’m giving it.”

Jenna’s story, and the stories of other Citizen Kids, are part of a partnership between Disney and Milk Life, a project of the Milk Processor Education Program. During the 18-episode Citizen Kid series, viewers will see children use ordinary activities to better the world around them. Episodes appear on Disney.com, Disney’s YouTube channel and Disney’s Roku connected TV app.

CEO’S CORNER

Painting a Clear Picture about Dairy Farming

Jim Mulhern
NMPF President & CEO

Associate Member Focus: 

Dairy.com, headquartered in Frisco, Texas, is the industry'sleading provider of market intelligence and software-as-a-service solutions. Its suite of supply chain, transportation, and commodity trading solutions drive mission-critical activities for participants across the dairy manufacturing supply chain. Its customers represent more than 90 percent of annual dairy retail sales. Formed in 2000, Dairy.com views its customers as innovation partners and is committed to developing solutions for the entire supply chain.

Company contact Jim Boykin can be reached at Jim.Boykin@dairy.com.  For more information, visit the website.