The National Dairy Farmers Assuring Responsible Management, or FARM Program, is the U.S. dairy’s on-farm national social responsibility program. One of its important parts is on-farm biosecurity. Emily Yeiser-Stepp, executive director of the National Dairy FARM Program, says biosecurity is more important than ever after the recent outbreak of Highly Pathogenic Avian Influenza in dairy cattle herds
Author: Alan Bjerga
NMPF’s Doud Discusses HPAI, FMMO Modernization
NMPF President & CEO Gregg Doud discusses dairy’s response to Highly Pathogenic Avian Influenza (HPAI), the path forward for Federal Milk Marketing Order Modernization through an approach that puts farmers first, and opportunities for dairy in global markets. Doud spoke in an interview with the Agriculture of America podcast.
Pushing for Lower Tariffs Worldwide
By Jaime Castaneda, Executive Vice President, Policy Development & Strategy, National Milk Producers Federation
Exports are critical to America’s dairy farmers and processors. Last year, the American dairy industry exported $8.1 billion in dairy products, roughly 17% of total U.S. milk production. That’s the second-best year on record, falling just short of 2022.
As global demand for high-quality and sustainably-produced dairy products will grow, the U.S. dairy industry must keep exports expanding to thrive today and over the long term. To help encourage that, and in the absence of efforts by the U.S. government to secure new market openings, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) have taken the initiative to drive forward projects to pursue Most-Favored Nation (MFN) tariff reductions in multiple key export markets.
U.S. dairy’s quarter-century of export expansion hasn’t been by chance. The strong commitment from U.S. dairy producers and manufacturers to investing in painstakingly growing international sales, coupled with multiple trade agreements that opened the door for that growth to occur, are key drivers of the trend. Unfortunately, in recent years, anti-trade rhetoric has gained momentum from politicians on both sides of the aisle. Meanwhile, major competitors — namely in Europe, Australia, and New Zealand — have successfully negotiated new market access, advantaging their domestic producers through lower tariff rates and favorable trading conditions. The result is that U.S. producers are increasingly at a disadvantage in several key markets, including China and most countries in Southeast Asia.
MFN tariffs are tariff rates that one country applies to imports from all trading partners that are members of the World Trade Organization. Importantly, MFN tariffs do not apply to products that benefit from even lower rates due to preferential trade agreements, such as a free trade agreement or customs union.
Not content to yield key markets to trade competitors, NMPF and USDEC launched a formal initiative in 2014 to lower duties on U.S. dairy exports in China. Following years of engagement, that resulted in a tariff cut on U.S. cheese exports. A few years later in 2019, NMPF and USDEC’s efforts scored another breakthrough by securing tariff reductions on a variety of exported dairy products into Vietnam.
Halfway around the globe, NMPF and USDEC tallied a small victory in March by successfully petitioning the United Kingdom government to eliminate its 6% tariff on fat-filled milk powder for at least two years.
NMPF and USDEC are continuing to pursue MFN tariff cuts in other key markets around the globe as well, with an emphasis on the growing Asian region, even as government initiative is lacking.
For example, the Philippines is a sizable dairy importer, using those inputs in the Philippine food processing and food service sectors. NMPF and USDEC have impressed upon the Philippine government the advantages of diversifying its dairy supply chains further and are petitioning for MFN tariff reductions for a variety of products, including cheese, lactose, and milk powder.
Although these initiatives by NMPF and USDEC cannot fully replace government negotiation of new trade agreements, efforts to drive down tariffs in these countries represent just a few examples of the markets that NMPF and USDEC are prioritizing as they continue to fight for fair opportunities for U.S. dairy producers and companies to compete in the global market.
This column originally appeared in Hoard’s Dairyman Intel on April 4, 2024.
Dairy’s building a better environmental tool
By Nicole Ayache, Chief Sustainability Officer, National Milk Producers Federation
The Farmers Assuring Responsible Management Environmental Stewardship Program (FARM ES) is collaborating with the Innovation Center for U.S. Dairy to integrate a new, process-based model for greenhouse gas (GHG) accounting: the Ruminant Farm Systems (RuFaS) model. This rigorous, science-based (but user friendly) approach will position FARM ES as the key on-farm tool to support U.S. dairy community efforts to achieve its 2050 environmental stewardship goals, including to become GHG neutral or better. FARM ES is the U.S. dairy industry’s unified platform to track and aggregate on-farm environmental progress, with a suite of informational resources to support continuous improvement.
FARM ES will begin using RuFaS as its underlying GHG quantification model starting this summer with Version 3. This introductory launch will contain the core elements of the RuFaS model to enable farm-level GHG footprinting and scenario analyses, which help support informed decision-making about the adoption of practices and technologies. Further elements — like enhancements to the energy data inputs and conducting economic analyses — will be added to FARM ES as they become available through ongoing RuFaS research.
A key focus of the remainder this year will be to collect farmer, FARM evaluator, and other stakeholder feedback so the new platform can be refined in 2025.
Real-world refinement
The FARM Program relies on stakeholder feedback and guidance from the scientific experts at Dairy Management Inc. to guide its process of continuous improvement. Input from dairy farmers, cooperative and processor staff, and researchers informed the need to upgrade the GHG model that powers FARM ES. Stakeholders consistently requested a tool that can deliver insights as they evaluate opportunities to further improve on-farm environmental outcomes.
Stakeholder engagement and participatory research continue to be essential as FARM ES begins the work to integrate the RuFaS model. A working group composed of farmers and staff from dairy cooperatives and processors meet with RuFaS researchers to discuss the scientific model and tool functionality. The multi-stakeholder working group has met seven times so far, covering the animal, manure, feed, energy, and economic RuFaS modules and giving feedback on the structure of data inputs, desired functionality for the new FARM ES tool, and more.
More than 25 farms volunteered to participate in scientific model validation to support RuFaS calibration and refinement, with data collection complete in 2023. The volunteer farms ranged in size from 50 head to over 15,000 head and represent diverse geographies and production styles, including tie stalls, freestalls, dry lost, grazing, and more. The farms and the evaluators that supported their data collection were invited to provide written feedback and join live feedback sessions. They provided helpful guidance on topics such as ease and challenges in collecting and interpreting the data inputs, quality of data collection training in fully equipping evaluators, and the structure of the results report.
With the introduction of FARM ES Version 3, FARM will create feedback forms for farmers and FARM evaluators to provide suggestions. FARM also will host stakeholder webinars to foster discussion about the new platform.
This summer’s launch will bring exciting updates to FARM ES. They are only the beginning of the journey toward a more scientifically robust tool that brings greater insights to participating dairy farmers.
This column originally appeared in Hoard’s Dairyman Intel on March 18, 2024.
NMPF’s Castaneda Discusses WTO, India, CWT
NMPF Executive Vice President Jaime Castaneda discusses efforts to expand dairy market access at recent World Trade Organization meetings in Abu Dhabi in an interview with the Red River Radio Network. Castaneda also discusses trade relations with India and the importance of the NMPF-led Cooperatives Working Together program for the future of U.S. dairy exports.
The Class I Mover Needs to Move
By Paul Bleiberg, Executive Vice President, Government Relations, NMPF
Even as an election looms on the horizon, USDA will soon develop its Federal Milk Marketing Order (FMMO) modernization recommendations after months of proceedings. Meanwhile, Congress is preparing to advance a farm bill. U.S. dairy farmers and their cooperatives have a stake in both. But regardless of the policy landscape of the moment, one pressing priority that unites producers from coast to coast in every way, shape, and form is the need to restore the “higher of” Class I mover.
Since it was implemented five years ago, the current “average of” Class I mover has cost dairy farmers nationwide more than $1 billion in Class I skim revenue, with losses continuing to pile up monthly. This, of course, was not intended — but neither were the repeated price inversions that upended decades of data and showed the new mover is poorly adapted to dairy’s present and future in a variety of economic climates.
Congress changed the mover during the last farm bill to respond to fluid processor requests for risk management, but that was with the expectation that it would be revenue neutral for the dairy producer. Unfortunately, the new mover has been anything but revenue neutral, and it’s been so in a way that has overwhelmingly favored processors, who are not the epicenter of the FMMO system. The new mover has underperformed repeatedly, to the detriment of dairy farmers, in 2020, 2022, 2023, and again, month by month, in 2024. The current formulation has harmed farmers so consistently that it would have been nowhere close to revenue neutral even setting aside the calamity of 2020.
In an attempt to remedy an intolerable situation (everyone, even processors, agrees on that point, at least), several concepts have been put forth that are bandages to the problem but aren’t true solutions. Modifying the current formula, for example, to retroactively recoup producer losses would still fail to send timely price signals to farmers. The argument that this modified version would have paid more to farmers at some point just yet again exposes the problem with the “average of,” which is that it causes farmers to suffer losses when they should have been paid based on market signals and instead distorts the true market by paying them back later. That approach also provides little help to the many family dairy producers who don’t have years to be made whole, a fact underscored forcefully by continued trends toward farm consolidation.
The solution to this problem comes down to priorities. The current mover may have been a fair experiment to test, but with its performance now having been assessed, continuing the “average of” formulation can be to nothing except the detriment of dairy farmers who have lost more than $1 billion dollars of ongoing disorderly marketing of milk.
The right solution is the previous “higher of” mover. That tried-and-true approach, one that served farmers well for decades, responds quickly to and accurately reflects the marketplace, encouraging the orderly marketing of milk that provides the rationale for the FMMO system, and it helps dairy farmer cash flow when it counts. The “higher of” Class I mover must be reinstated.
This column originally appeared in Hoard’s Dairyman Intel on March 4, 2024.
NMPF’s Galen Urges DMC Signup
NMPF Senior Vice President Chris Galen detailed improvements to the Dairy Margin Coverage program in an interview with the National Association of Farm Broadcasters. “We encourage people to look at the dairy margin coverage program if they’re not already covered or to make adjustments in their coverage levels, because you don’t know what’s going to happen with either milk prices or feed costs,” he said.
NMPF’s Bjerga on the Urgency of Changing the Class I Mover
NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks with RFD-TV about the need to change the Class I mover in a way that ends losses to dairy farmers that have totaled $1.2 billion since 2019. The mover is in the spotlight with the conclusion of USDA’s Federal Milk Marketing Order hearing in Carmel, IN.
Whole and Lactose-Free Milk Shine Bright
By Alan Bjerga, Executive Vice President, Communications & Industry Relations, NMPF
This is shaping up to be an exciting year for both whole and lactose-free milk, two growing segments of fluid milk consumption that are poised for further gains in grocery aisles as well as Washington, D.C. policy circles.
First, the facts: Even as fluid milk continues its decades-long challenge of eroded consumption as beverage markets diversify and consumer preference shifts to other forms of dairy, both whole milk and lactose-free varieties are bucking that trend. According to data from Circana Inc., which tracks retail sales, whole milk sales rose slightly (up 8 million gallons, or 0.6%) in 2023 over 2022. Because overall fluid sales declined, whole milk now makes up 45.4% of total fluid volume sold and is easily the most popular variety.
Lactose-free milk, meanwhile, reached a milestone. By climbing 6.7% to 239.2 million gallons last year, it surpassed the sales volume of almond beverages, by far the most popular plant-based milk alternative beverage. Almond’s annual decline of 9.8% is a big part of an overall consumer move away from plant-based alternatives, which have now seen two straight years of sales volume drops. Buyers are emphatically rejecting years of misleading claims that these beverages are a worthy substitute to dairy.
What’s next?
The National Milk Producers Federation is pushing for full congressional passage of the Whole Milk for Healthy Kids Act, which overwhelmingly passed the House in December and stands good prospects of passage in the Senate — if the right legislative vehicle can be found in a jam-packed election year. Bringing whole and 2% milk back to school meal menus is a great way to improve the nutrition of the next generation of milk drinkers. We have a call to action on our website urging senators to take up the bill.
Lactose-free milk is becoming the industry’s spearhead in ensuring equitable access to milk across diverse populations in federal nutrition programs. It is simply asinine federal policy to do what some vegan activists are proposing — increase access in federal programs to plant-based beverages that are both nutritionally inferior and now falling out of favor with consumers — when a beverage exists that circumvents lactose intolerance and offers all of milk’s benefits because it is, after all, milk. You will be hearing more about this in upcoming months as we strive to make 2024 a year when people become more broadly aware of just how critical lactose-free milk can be for effective and fair nutritional choices.
In what’s been a challenging time for the industry, what can the success of whole and lactose-free milk tell us? It shows that, for all the proliferation of alternatives, consumers like milk that’s most like milk, in taste and composition. They also like milk that’s accessible for everyone who wants its benefits. Quality and diversity are promising building blocks for a prosperous future. That’s plentiful in dairy, and this year, what consumers are choosing also can inform better federal policy.
This column originally appeared in Hoard’s Dairyman Intel on Jan. 18, 2024.
NMPF’s Bjerga on Plant-Based Beverage Declines
NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga discusses the decline of plant-based beverage consumption in 2023 in an interview with RFD-TV. Fluid milk seized back market share last year as plant-based beverage volume sales fell to their lowest since 2019, led by a 10 percent drop in almond drinks.
NMPF’s Larson on Whole Milk for Healthy Kids Act in Senate
NMPF’s Claudia Larson, Senior Director for Government Relations and Head of Nutrition Policy, discusses the way forward for the Whole Milk for Healthy Kids Act in the U.S. Senate in an interview with the National Association of Farm Broadcasters. “The Whole Milk for Healthy Kids Act is a common sense approach to address this under consumption of critical nutrients because it expands the options that schools can choose to serve to include two percent and whole milk,” she said.
Setting the template for U.S. dairy in 2024
By Tony Rice, Trade Policy Manager, National Milk Producers Federation
While still historically strong, U.S. dairy exports this year are down from 2022’s record year, largely because of weaker global demand coupled with rebounded global supply. That doesn’t mean the U.S. isn’t making progress in overseas markets. Despite the headwinds, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) are moving toward boosting exports by successfully fighting against nontariff barriers in key markets and promoting the U.S. dairy industry.
Below are key trade policy efforts that affected the U.S. dairy industry in 2023, just a sample of NMPF and USDEC policy activities.
Working every angle to support trade
NMPF has been active this year across six continents, engaging governments and local organizations. At home, NMPF’s trade policy team filed six sets of confidential comments and seven additional sets of public comments while sending 17 letters to U.S. government agencies on issues ranging from trade negotiations to supply chain challenges.
NMPF and USDEC have also strengthened ties and forged new partnerships with local and regional organizations worldwide to improve dairy consumption while pursuing projects in the United Kingdom, China, Thailand, the Philippines, and Taiwan to boost U.S. dairy competitiveness.
Landmark common names bill introduced
For more than a decade, the European Union has imposed its geographical indication (GI) rules on countries around the world, limiting the ability of U.S. producers of common name cheeses — such as “parmesan” or “feta” — to sell their products worldwide.
Following advocacy led by NMPF, USDEC, and the Consortium for Common Food Names, as well as partners in the food and wine sectors, a bipartisan congressional group introduced the Safeguarding American Value-Added Exports (SAVE) Act in May. The SAVE Act would amend the Agricultural Trade Act of 1978 to explicitly define “common names” and direct USDA to coordinate with the U.S. Trade Representative to proactively negotiate protections for common names.
Securing a critical cheesemaker right in federal court
European interests even tried to extend their GI campaign into the U.S. market when a European dairy organization attempted to trademark “gruyere.” NMPF and its partners fought this shameless attempt to confiscate a common cheese term and secured a final victory in March when a U.S. Court of Appeals found “gruyere” to be a generic term, upholding prior decisions. This final ruling sets a strong precedent for protecting common names and should discourage EU attempts to expropriate generic terms in the United States.
Championing expanded trade following USMCA ruling
NMPF and USDEC coordinated a November 27 industry letter to the President’s Export Council (PEC) supporting recommendations from NMPF member and PEC representative Land O’Lakes to bolster American agricultural trade by expanding market access opportunities and tackling nontariff trade barriers. The Council — the primary advisory committee on international trade — unanimously approved the recommendations on Nov. 29.
The vote followed a November 24 U.S.-Mexico-Canada Agreement (USMCA) dispute panel ruling that allows Canada to continue to restrict its dairy market access. The disappointing ruling followed years of NMPF advocacy on the issue. It is work that continues as NMPF urges the U.S. government to address Canada’s trade distorting practices.
Showcasing U.S. dairy to the world
For first time in 30 years, the World Dairy Summit took place in the United States, offering an opportunity to highlight the U.S. dairy industry’s world-class products, leadership on sustainability, and dedication to innovation to an audience of over 1,240 dairy professionals from more than 55 countries.
Hosted in Chicago in mid-October, NMPF played a leading role, co-chairing the conference and helping design the conference. Over the four days, attendees enjoyed dynamic programming, including opportunities to tour nearby farms.
This column originally appeared in Hoard’s Dairyman Intel on Dec. 11, 2023.
