USDA Farm Bill Proposal Reflects NMPF Direction

The U.S. Department of Agriculture's blueprint for the future of farm policy focuses on issues similar to those that NMPF has been addressing in preparation for the upcoming Farm Bill, a fact which drew plaudits from NMPF.

Agriculture Secretary Mike Johanns specifically mentioned the value of maintaining the dairy price support program last Wednesday as he unveiled the USDA's list of items it will ask Congress to consider adopting. NMPF also supports continuing the general framework of the price support program in the next Farm Bill.

"We are greatly encouraged that the USDA will advocate the continuation of the dairy price support program," said Jerry Kozak, President and CEO of NMPF. "Our organization is still working on its own detailed proposals for the future of the price support program, and it's heartening to know that we appear to be on the same wavelength as the Agriculture Department when it comes to the need to keep this safety net program."

Kozak said that NMPF staff will be reviewing the full details of the USDA proposal in the coming days to better understand the approach that Agriculture Secretary Johanns announced last week. In addition, NMPF's Economic Policy Committee will be meeting later this week to examine how the USDA proposal compares to ideas that are being considered by National Milk.

The USDA is also proposing a new system of direct payments in lieu of the Milk Income Loss Contract (MILC) program. Kozak noted that NMPF understands that there is no single program that addresses all of the industry's complex needs.

The USDA is also proposing a new system of direct payments in lieu of the Milk Income Loss Contract (MILC) program. Kozak noted that NMPF understands that there is no single program that addresses all of the industry's complex needs.

"We are pleased to see that the USDA has not only recognized the pain inflicted on our dairy farmers by the twin troubles of low prices and high input costs, but that it also is attempting to alleviate that distress with its farm bill proposal," said Kozak. "Our challenge now is to build upon NMPF's proposal, along with USDA's, in order to find common ground. We look forward to working both with the Department and members of Congress to fashion a comprehensive package of dairy and related programs that address the needs of producers in all regions and regardless of size."

Kozak said he was also encouraged by USDA's plan to implement a promotion assessment on imported dairy products. NMPF worked to include the import assessment in the 2002 Farm Bill, but it was never implemented because not all U.S. dairy farmers currently pay the 15 cents per hundredweight promotion checkoff. The few farmers in Alaska, Hawaii and Puerto Rico are exempt, which will be addressed in the new Farm Bill.

"We have argued for six years that it's a matter of basic fairness that if imported products enjoy access to our consumers, they should help pay the same promotion assessment that our own farmers pay to develop the U.S. dairy market. So, we are very thankful that the USDA will work with us in asking Congress to make the necessary adjustments to implement the import assessment."

Kozak also said that the next Farm Bill should focus on renewable energy with an eye toward spurring the use of technologies that farmers can use to convert animal waste to electricity - "a development that is a win-win for consumers, farmers and the environment," Kozak said. He said NMPF also will be suggesting ways that the government can provide incentives to spur such technologies.

NMPF Asks USDA To Examine Implications of Ethanol Production on Dairy Economics

Because of concerns about the economic health of dairy farmers, NMPF is asking the U.S. Department of Agriculture to investigate the overall implications of the rising production of biofuels, such as ethanol, on food production in the United States.

In his State of the Union address last month, President George W. Bush called for even greater development and use of corn-based ethanol. The U.S.'s ethanol production is expected to reach 7.5 billion gallons this year, and next year, ethanol could use nearly half of the nation's annual corn production.

While NMPF understands the need to develop alternatives to imported petroleum fuels, "We think it is important for both sides of this story to be evaluated, and that is why we are asking the Agriculture Secretary to form a working group to study the implications on food producers of the emerging biofuels industry," said Jerry Kozak, President and CEO of NMPF.

In the letter sent last month, NMPF, along with five other organizations representing the livestock sector, asks Secretary Mike Johanns to assemble a working group within the USDA's Chief Economist's office to study the emerging biofuels economy and its full implications for milk and meat producers, as well as consumers of those products.

Other signatories to the letter include the American Meat Institute, the National Cattlemen's Beef Association, the National Chicken Council, the National Pork Producers Council and the National Turkey Federation. These groups share NMPF's concern that producers may face challenges in sustaining their operations along side a robust and growing ethanol economy.

"Ethanol production will have an economic impact on the U.S. livestock industry; good for some, and bad for others. Given that corn prices are the major feed input cost for dairy cows, and that corn is expected to reach record prices levels in 2007, the USDA needs to do more homework on the implications of the ethanol gold rush on milk and meat costs," Kozak said. "What's good for energy prices may not be so good for food prices, and we don't want the viability of the biofuels sector to come at the cost of losing the viability of our dairy industry."

NMPF Asks USDA To Extend Comment Period On Opening Of Canadian Border to Imported Cattle

In order to give the domestic dairy industry more time to assess the potential impact of a surge of imported Canadian dairy animals, NMPF is asking the U.S. Department of Agriculture to extend the comment period on its proposal to re-open the Canadian border after a four-year hiatus.

The USDA recently invited public comments on its proposal to open the Canadian border to live animals to be used for breeding purposes, which includes dairy heifers. Canadian had been exporting approximately 60,000 dairy heifers annually to the U.S., until the border was closed in May 2003, following the discovery of bovine spongiform encephalopathy, or mad cow disease, in a Canadian cow. The comment period closes next month, after which USDA is expected to move forward with plans to reopen the border to full Canadian imports of live animals and cuts of meat.

In a letter sent last Thursday to Agriculture Secretary Mike Johanns, Jerry Kozak, President and CEO of NMPF, wrote that NMPF "is concerned that opening the border for live bovines will have significant economic impact upon U.S. dairy producers, and the livestock industry in general."

"NMPF feels additional time is necessary, beyond the 60 days provided in the proposed rule, to thoroughly review and evaluate the proposed rule and accompanying documents with our membership," NMPF's letter said. The letter asks the USDA for an additional 60 days to comment, beyond the scheduled end of the comment period on March 12.
Even though eight cases of BSE have been found in Canadian cattle in the past four years, the USDA regards Canada as a nation at minimal risk for BSE. Under USDA's proposal, no cattle born before March 1, 1999, would be allowed to be exported to the U.S. when the border reopens.

However, NMPF points out in its letter that "three of the last five Canadian BSE cases were cattle born after this date. If Canada has other cows born after this date that are BSE positive, then they could be brought into the U.S. and live amongst the U.S. dairy herd."

The discovery of any additional cattle in this country with BSE, even if they are of Canadian origin, could generate a significant negative effect on the U.S. cattle industry, NMPF noted, writing that "the economic impact of this possibility needs to be carefully examined and analyzed." The first case of mad cow disease discovered in the U.S. in 2003 was in a dairy animal imported from Canada.

White House Urges Renewal of Bush Trade Promotion Authority

The White House last week urged Congress to renew President George W. Bush's fast-track authority to negotiate a new world trade deal - a development supported by NMPF - but the renewal effort may face opposition in the Democratic-controlled Congress.

The White House needs the Congress to approve at least a short extension of fast-track trade promotion authority, which expires July 1, to finish the Doha round of World Trade Organization talks, along with other bilateral trade deals with South Korea and Malaysia, which have fallen behind schedule.

The trade promotion authority law allows the White House to negotiate trade pacts Congress must accept or reject without making any changes.

Associate Member Focus: Nelson-Jameson, Inc.

Nelson-Jameson, Inc., a supplier of products used by food, dairy and beverage processing facilities, was founded in 1947 and is headquartered in Marshfield, WI. Nelson-Jameson represents over 750 vendors and sources over 20,000 products in hundreds of classifications providing their customers the convenience of one stop shopping.

Nelson-Jameson's member representative is Jerry Lippert, President. He can be reached at 715-387-1151. For additional information, please visit their website.