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CWT Herd Retirement Commences
As dairy farmers suffer from dramatically higher costs of production, Cooperatives Working Together announced today that it will conduct its latest herd retirement round. Bids are being accepted starting now through Monday, June 30th, with cow removals to start in seven weeks.
"All of the economic indicators and benchmarks that guide CWT's decisions, including farmers' cost of production, show that now is the appropriate time for us to initiate this herd retirement," said Jerry Kozak, President and CEO of NMPF, which manages CWT. "In particular, significantly higher feed and energy costs have put dairy farmers between a financial rock and a hard place."
This is fifth herd retirement round since CWT began operations in the summer of 2003. It is the first that will offer bidding producers the option of including all their bred heifers, for a flat fee of $1,050 per animal.
Detailed information can be found at www.cwt.coop, including a bid application, a calculator to help estimate a farmer's bid, and answers to frequently-asked questions. All bids must be postmarked by Monday, June 30th, in order to be considered. All dairy producers submitting bids to sell their herds must be members of CWT as of January 2008, either through their membership in a fully participating cooperative, or as an independent member of CWT.
Bids will be reviewed in early July, with field auditors then proceeding after mid-July to visit each accepted farm to begin the cow removal process.
CWT is not targeting how many pounds of milk, cows, or herds will be removed.
"The final tally will be determined by the quality and quantity of the bids," Kozak said. "As always, we will operate CWT in a cost-effective and frugal manner."
Unlike past herd retirements, regional safeguard limits will not be utilized and, therefore, CWT bidders will not be competing regionally, but nationally.
Through the herd retirement program, if a farmer's bid is accepted, CWT pays that farmer for the volume of milk produced by that herd in a 12 month period. The farmer is responsible for selling the cows for slaughter, and he or she retains the proceeds from that transaction.
As in the past, any producer who had his bid accepted in any of the previous herd retirements is not eligible to participate again. Also, those producers who have a financial interest in more than one dairy farming operation must include all their cows in their bid. A dairyman cannot place a bid for just one of his herds, if he has an interest in multiple operations.
For more information on how to participate in CWT's herd retirement, visit www.cwt.coop, or call 888-Info-CWT (888-463-6298).
Farm Bill Survives Presidential Veto
Both the House and Senate voted last month to override President Bush's veto of the Farm Bill by substantial margins. However, due to a technical glitch, only 14 of the 15 titles are now law.
When the Farm Bill was submitted to the President after it initially cleared the House and Senate, it did not contain the Trade Title (Title III), due to a clerical error. Therefore, it is still necessary to correct the Bill by the inclusion of Title III. The House has already once again voted in favor of the entire Farm Bill (with veto proof margins). The Senate will need to take action this week ensure the inclusion of Title III in the overall package, but the Farm Bill is essentially complete. Title III does not contain any dairy provisions, but it does contain the MAP funding (Market Access Program) which is utilized by USDEC, so it will be important for this Title to get included. It also contains a number of food aid provisions.
According to Agriculture Secretary Ed Schafer "although the Administration has had significant policy differences with the Congress over the wisdom of many of the provisions in the new Farm Bill, it is now the law of the land." Find a summary of the Farm Bill on the NMPF website.
Immigration Reform Measure Fails In Senate
Efforts to provide a transitional solution for America's agricultural employers foundered last month in the Senate, when an immigration reform measure was added to, then dropped from, a spending measure.
Shortly after passage of the Farm Bill, the Senate Appropriations Committee approved including Senator Dianne Feinstein's (D-CA) Emergency Agriculture Relief Act amendment in the supplemental appropriations bill needed to fund the Iraq War. Feinstein's measure in the Appropriations Committee drew broad support, but when the bill went to the full Senate floor, Sen. Robert Menendez (D-NJ) worked to strip the immigration-related provisions from the supplemental appropriations bill. While this procedural challenge was not unexpected, it was particularly disappointing to see it come from an advocate for expanded immigration opportunities. Sen. Menendez claimed that the measures "didn't do enough to help immigrants."
Despite this setback, NMPF will not stop fighting to find a solution to the labor challenges facing dairy operations, including the pursuit of the organization's strategic immigration plan, and continued discussions with reform supporters on Capitol Hill.
Climate Change Legislation to Be Considered by Senate This Week
The Senate is expected to begin discussion on the Lieberman-Warner Climate Security Act of 2008 the first week in June, a measure that would regulate a cap and trade system for U.S. carbon emissions. NMPF has been closely monitoring the debate and making sure the dairy producer sector has an understanding of the potential benefits as well as the detriments of the legislation.
Through the proposed legislation, carbon-emitting companies would have to reduce emissions, or pay for credits to allow them to continue emitting greenhouse gases (GHG) at current levels. GHG emissions from certain industries will be capped at levels below their historic baseline. These industries can trade in the marketplace for GHG emission "credits."
U.S. agriculture, and especially dairy, is poised to play an important role in the climate change debate. Producers would have the opportunity, but not be required, to voluntarily mitigate GHG emissions through carbon sequestration in soils, methane capture and fertilizer management. The downside is a cap on GHG emissions would increase fuel, fertilizer and utility costs to farmers. At the same time, dairy could provide valuable offset credits to carbon-emitting companies.
NMPF is working with other agriculture organizations as well as utility groups to ensure the offset market remains a positive outcome for our industry.
USDA Eliminates Downer Cattle Exception
The USDA last month took actions that NMPF had requested earlier this spring to completely ban the use of non-ambulatory, or downer, cattle in the food supply.
Agriculture Secretary Ed Schafer said the USDA would now make sure that animals that become nonambulatory after initial veterinary inspection are never allowed into the human food supply. He explained that the new rule would be designed "to maintain consumer confidence in the food supply, eliminate further misunderstanding of the rule and, ultimately, to make a positive impact on the humane handling of cattle."
This new stance on the downer issue contrasts with the old USDA rule. Often cited as confusing and misleading, it had stated that cattle that went down after initial inspection could still be included in the human food supply if they passed a second inspection. Problems had developed with this practice, particularly with the Chino, CA meatpacking incident that led to the biggest meat recall in U.S. history.
In April, NMPF had submitted a citizen petition urging USDA to eliminate the old downer rule. NMPF President and CEO Jerry Kozak welcomed Secretary Schafer's announcement, saying: "This clarification of the rules preventing nonambulatory cattle from entering the food chain is a necessary development as much for what it says about consumer perception as its impact on food safety."
Kozak's full statement and a copy of the citizen petition can be found at the NMPF website.
IDFA Withdraws FDA Petition to Change Ice Cream Standards
A five year-old proposal to change the federal standards of identity for ice cream has been sidelined. On May 15, 2008, the International Dairy Foods Association (IDFA) sent a letter to FDA to withdraw its petition to change the standards of identity for ice cream and frozen desserts.
In the original petition, dated March 13, 2003, one of the items IDFA sought was to remove the whey limitation currently contained in the ice cream standard. NMPF was opposed to most of the provisions of the petition based on the potential for negative impacts on dairy producers as well as product quality.
The petition to FDA on the use of UF milk in cheese making is still under consideration. NMPF supports this petition and hopes for positive movement in the near future.
Conservation Reserve Program Participants Allowed to Use Restricted Land for Livestock Purposes
The USDA has opened previously restricted CRP acres to livestock producers for purposes of haying or grazing. On May 30, 2008 the Commodity Credit Corporation published a Notice in the Federal Register that allows Conservation Reserve Program (CRP) participants to use their land for haying or grazing.
CRP participants may request a contract modification to allow for a special, one-time, critical feed use of the property under contract and not be subjected to a rental rate reduction. The voluntary modification to the CRP contract will require a modified conservation plan for haying and grazing management and must follow the NRCS Field Office Technical Guide for these activities. The critical feed use activity must be completed by November 10, 2008 and there will be an administrative fee of $75 charged to the producer to make the modification.
A copy of the Federal Register notice is available here.
WTO Agriculture Ambassador Issues Text in Hope of Encouraging Agreement
The chairman of the World Trade Organization agriculture negotiations, Crawford Falconer, released his latest WTO text in mid-May. The text was yet another step towards trying to forge consensus among the WTO's member countries in order to try to reach an agreement this year.
The text contained few surprises but did provide more details on how to deal with the important issue of sensitive products (products that would face smaller tariff cuts in exchange for the creation of new tariff-rate quotas).
Negotiators continue to meet to discuss outstanding issues, particularly in the area of market access. There are hopes that if talks continue to progress well, a high-level ministerial meeting might be held this summer in late June or July to come to final agreement on a WTO package.
President Bush Acknowledges World Trade Week
At a public ceremony last week extolling the benefits of global trade, President Bush urged Congress to complete work on the pending Free Trade Agreements with Colombia, Panama and South Korea. Bush specifically cited U.S. cheese exports as a product that would benefit from these agreements.
NMPF and the U.S. Dairy Export Council both worked with member cooperatives to help donate products for the President's event. Land O'Lakes and Hilmar both contributed cheese blocks for display.
To read the full text of the President's speech, in recognition of World Trade Week, visit the White House website.
NMPF Board of Directors to Meet This Month
NMPF will host its summer Board of Directors meeting June 10-11 at the Westin Alexandria in Alexandria, VA.
Aside from the Board meeting, other important events will include the CWT Committee Meeting, a WTO Task Force meeting, and the NMPF Scholarship meeting. This year, NMPF's Capitol Hill Reception will take place on the 10th from 6:00-7:30 pm and will give NMPF members and staff the opportunity to visit with prominent figures in Congress and other areas of Capitol Hill.
Watch the NMPF website for updates after the meeting. For more information about the Westin Alexandria, visit their website.
NMPF Board Member Killed in Accident
Long-time dairy industry leader and NMPF board member Ray Veldhuis, from Winton, Calif., was killed in a tragic farm accident on Friday, May 30.
Ray served on DFA's corporate board from DFA's inception in 1998 through March of this year. He also served on the Western Area Council during those years and chaired the council from 2001 through 2008. Ray is a former president of Western United Dairymen, and served on the local school board for 25 years.
Latest in Dairy Research to be Presented at ADSA
The 2008 Annual Meeting of the American Dairy Science Association (ADSA) will be held July 7 - 11 in Indianapolis, IN. It provides an opportunity to learn about the latest dairy research from around the world. Early registration discounts are available until June 4, and ADSA members can save an additional $25 by registering on-line. Registration, housing and other meeting information is available at this website.
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