CWT to Increase Resources Through 10 Cent Assessment

The members of Cooperatives Working Together voted last week to double the program's current five-cent per hundredweight assessment, in order to accumulate the additional financial resources necessary to address the surge in U.S. milk production that is beginning to depress farm-level prices. The higher assessment will begin on July 1st, 2006, and run through 2007.

"We've demonstrated in the past three years that CWT can help dairy farmers address a supply and demand imbalance, but we need more leverage as we look ahead into 2006 and 2007," said Jerry Kozak, President and CEO of NMPF, which manages CWT. Milk production was up 3.5% last year, he noted, and continues to grow rapidly in 2006. Kozak said that the farmer-funded self-help program "risks being irrelevant in the marketplace if we don't have sufficient resources to do what farmers expect of us."

CWT's current budget does not contain sufficient revenue to fund additional herd retirement rounds, Kozak said. The higher assessment, to be collected starting in July, will bring in the additional money needed over 18 months to continue both the herd retirement program, and the ongoing export assistance program.

Kozak said that once the new assessment begins, he expects that the level of overall participation in CWT will remain at the 74% level of the nation's milk supply that it presently enjoys.

"Every one of CWT's 49 member cooperatives, along with the hundreds of individual farmers paying into the program, recognizes that the stakes have gotten higher as the extent of the supply/demand imbalance has grown. The more money we are able to collect, the more effective we can be in meeting the goals of our members," he said.

In addition to voting for a higher assessment, CWT's members also modified several other of the program's features.

First, the regional safeguard levels in the Northeast, Southeast and Midwest were raised to ¾ of one percent of each region's annual milk production, up from ½ of one percent. Second, Whole Milk Powder was added to the list of dairy products eligible for export using CWT bonuses. Additionally, Mexico, a major market for WMP, was added to the list of eligible destinations for that specific product.

Third, the target price for cheese under the export assistance program was moved from $1.40 per pound, to $1.30. The target butter price remains at $1.30 per pound.

NMPF Takes Stand on Immigration Legislation

NMPF has developed a three-point position on immigration policy, which is a front-burner issue currently on Capitol Hill.

Last December, the House of Representatives passed an extremely restrictive bill that would jeopardize the labor force used on many dairy farms. If this bill makes it through the Senate, it would threaten many employers with strict penalties, even if they were unaware that their employees' immigration documents were not genuine. The Senate is now working on drafting its own immigration reform legislation in the Judiciary Committee, which is chaired by Sen. Arlen Specter (R-PA).

In order to make certain that any resulting policy doesn't disadvantage dairy producers, NMPF's Board of Directors approved a policy statement last week that lays out the key components that a congressional reform of U.S. immigration laws should contain. These include:

• An affordable & efficient guest-worker program that ensures the continued availability of immigrant labor for all of agriculture, including dairies;
  
• A provision that allows those currently employed or with recent employment history in the U.S. to earn the right to work here legally, regardless of their current legal status, and;
  
• A provision that specifies that the responsibility for ultimate verification of the legal status of a worker lies with the government, not with employers.
  

Dairy producers are urged to contact their members of Congress to stress the importance of these three provisions. NMPF has drafted an on-line letter on Dairy GREAT for farmers to send to their two senators.

NMPF Asks USDA to Adjust Price Support Program Price Thresholds

NMPF asked the U.S. Department of Agriculture last week to adjust purchase prices for butter, cheese and nonfat dry milk to account for the unique costs manufacturers face in selling to the Commodity Credit Corporation (CCC). NMPF also asked that potential increases in the manufacturing cost allowances used to calculate Federal Order milk prices also be used when calculating the corresponding dairy support purchase prices.

The full letter is available on the NMPF website.

NMPF Supports National Uniformity Legislation in House

NMPF is part of a coalition that supports passage of H.R. 4167, the National Uniformity for Food Act of 2005. The purpose of the Act is to create a national law to address food safety tolerances and warning labels through a science-based, measured approach. It will rectify the current "patchwork quilt" of different states adopting different regulatory requirement of identical food products. It will also make food warning labels and safety tolerances consistent among all states, enabling consumers to make educated decisions regarding their food purchases.

Animal ID Tag Numbers Released

The USDA's Animal and Plant Health Inspection Service (APHIS) has announced the implementation of the animal identification number (AIN) as the next phase of the voluntary National Animal Identification System (NAIS).

APHIS has adopted an option to allow producers to use AIN tags with radio frequency identification (RFID) technology. To ensure compatibility and uniformity is achieved in the national program, APHIS has establish technology and performance standards for RFID tags are contained in the document entitled Administration of Official Identification Devices with the Animal Identification Number. These technology and performance standards for RFID tags were first proposed by the Cattle Identification Working Group. RFID tags are the preferred method of identification supported by IDairy.

Companies or individuals wishing to manufacture or distribute RFID tags as part of the NAIS must apply for approval with USDA. On February 24, 2006, APHIS issued guidance for manufacturers and distributors of AIN tags for participation in the USDA AIN Management System. Currently, three RFID tags are approved for use in cattle as part of the USDA TB program. Approved RFID tags are listed on the NAIS website.

South Korea to Start Free Trade Talks with U.S. in June

The United States and South Korea agreed to start a formal round of free trade talks in June, which Korean farmers are expected to oppose.

South Korea's chief negotiator, Kim Jong-hoon, told reporters four additional rounds of talks were planned in alternate capitals for this year to open up trade between the two countries that in 2004 totaled more than $70 billion. South Korea is currently the 7th largest dairy export market for the U.S., having imported $46 million worth of American products in 2005, and an estimated $58 million last year. South Korea is also the 4th-largest market for U.S. cheese, behind Mexico, Japan and Canada.

Korean free trade opponents, fearing free trade will spark a flood of cheap imports from the United States that could ruin their livelihoods, promised fierce demonstrations against the government of President Roh Moo-hyun to try to prevent a deal going ahead.

Rice will be one contentious area in the talks between Seoul and Washington. South Korea insists rice will not be part of a free trade deal, while the United States says it must be included in the talks.

Kim said the talks will be open-ended even though White House authority to negotiate a trade pact that can not be amended by Congress runs out in July next year.

BSE Inconclusive Test Announced

The U.S. Agriculture Department is conducting further tests on an animal suspected last week of being infected with bovine spongiform encephalopathy, or mad cow disease. The test results should be made public later this week.

After announcing Saturday that a routine screening test was inconclusive, the USDA’s Chief Veterinarian, John Clifford, said the sample was being sent for more definitive testing. The agency isn’t releasing any further details, including where the animal was from. As of last Friday, 645,000 of the nation's estimated 95 million head of cattle had been tested for BSE.

“Inconclusive results are a normal component of most screening tests, which are designed to be extremely sensitive," Clifford said in a statement. He indicated that the cow’s tissues did not enter the human or animal food chain.

U.S. government investigators have found two cases of mad cow disease. The first was in December 2003 in a Canadian-born dairy cow in Washington state. The second was last June, in a beef animal that was born and raised in Texas.

Associate Member Focus: Quality Chekd Dairies, Inc.

Quality Chekd is an organization of dairy processors who achieve the highest levels of quality and food safety in their products and processes.

With more than 35 members worldwide, Quality Chekd validates its members' performance through third-party product testing and frequent audits.

The organization also helps member dairy processors to be successful by providing hands-on human resource & training, marketing tools and trends, purchasing benefits, quality assurance measures and evaluations, laboratory resources, and the Quality Chekd trademark logo signaling product excellence.

To learn more about Quality Checkd Dairies, Inc. contact Peter Horvath at phorvath@qchekd.com or visit their website at www.qchekd.com