Farm Bill Tops List of Thorny Issues as Congress Returns

In a situation reminiscent of last year, Congress returns to Washington this week with a limited amount of time to deal with the farm bill before several current programs expire.

In 2012, the election season limited the amount of time Congress could deal with a new farm bill, and ultimately, a new measure wasn’t passed. This year, in addition to farm policy, lawmakers must also deal with the expiration of the fiscal year funding authority after Sept. 30th, extend the debt ceiling, and consider authorizing military action in Syria. These contentious items are expected to dominate action on Capitol Hill in September.

For those in agriculture hoping for action on the farm bill, the focus remains on the House, which passed a flawed, farm-programs-only measure in July as part of a two-step process. House leaders have talked recently in generalities about taking up the nutrition-policy-only title soon after reconvening on Monday. If that nutrition bill passes, the House presumably would name agriculture committee conferees to meet and hash out a final farm bill with counterparts from the Senate.

But the nutrition bill the House will consider is expected to cut $40 billion from food stamps, ten times the size of the reduction contained in the Senate farm bill. The extent of that reduction will not attract much, if any, support from House Democrats, and it will be a difficult figure to reconcile with the Senate’s version, once both measures reach the House-Senate conference committee process. If the two congressional chambers fail to agree on a farm bill that can be signed by President Obama by September 30, yet another extension of current programs is one potential outcome.

Another is that those programs that expire at the end of this month – including the Milk Income Loss Contract (MILC) program – will be left in limbo until a decision is made about whether to try for a new bill, or extend the current one – as was the case in the fall of 2012. Given where dairy prices are, no MILC payments are expected in the remaining four months of this year.

Other farm programs, including the dairy product price support program, are authorized through December 31. If either a new farm bill isn’t in place by then, or current programs aren’t extended yet again, the provisions of the Agricultural Acts of 1938 and 1949 will take effect, potentially resulting in much higher price support levels for a variety of commodities, including milk.

Dairy farmers should continue to urge lawmakers to pass a farm bill, including the dairy policy reforms endorsed by the Senate in June. The House gutted those reforms in July by approving margin insurance without a stabilization program to keep supplies from building up and prices from plummeting. Farmers can use NMPF’s Dairy GREAT system to send an email.

CWT Exports Top 150 Million Pounds

The month of August was another solid month for the Cooperatives Working Together (CWT) Export Assistance program. Assistance was provided to member cooperatives on cheese totaling 10.820 million pounds and on butter (82% fat content) totaling 5.932 million pounds.

These sales bring the year-to-date total sales to 86.5 million pounds of cheese and 67.2 million pounds of butter. On a milkfat basis, that is the equivalent of 2.312 billion pounds of milk.

Exports of U.S. dairy products are up significantly this year and CWT has been a major contributor to the increase. Through June, CWT-assisted product shipments are 51% of total butter exports, 72% of total American cheese, and 18% of total cheese.

USDA Quarterly Milk Production Reports to Resume in October

USDA’s National Agricultural Statistics Service (NASS) said last month that with the start of a new fiscal year on October 1, it will resume the quarterly milk production producer surveys it suspended earlier this year due to budget cuts.

Back in April, NASS suspended its monthly milk production report because of the federal budget sequester. After NMPF protested the lack of government data, NASS agreed to continue providing a monthly production estimate, albeit produced without the use of farmer surveys to help verify milk output trends. Since April, the USDA has used data from federal milk marketing orders, dairy checkoff data, state departments of agriculture, and other administrative sources.

The producer survey program will resume with a late September mailing to dairy producers, and the release of resulting data on October 21. With the quarterly surveys, the dairy cow and milk per cow statistics will once again be available.

New REAL® Seal Campaign Continues to Grow

NMPF continues to create awareness of dairy products – and the REAL Seal itself – through its new social media campaign connecting a new generation of consumers with products that use the Seal.

To date, NMPF has made a significant initial investment to underwrite a variety of promotional activities, including a new website, a new Facebook page, blogger outreach, and a new animated character. This brief video highlights activities already underway, and those planned for the future.

Until last fall, the REAL® Seal website – www.realseal.com – was targeted only at companies using the REAL® Seal to help them learn what they needed to do to qualify for the program. Today, the website is focused on consumers of dairy products and foods with dairy as a significant ingredient. The REAL® Difference for Consumers section tells consumers how to differentiate REAL® dairy products and foods made with REAL® dairy ingredients from imitators. Another subsection provides nutrition information comparing the natural goodness of REAL® dairy products, to the fabricated nutrition of imitators.

In addition, a buyer’s guide will soon be added to the website. All companies using the REAL® Seal will receive a free basic listing, and the opportunity to expand their presence in the Buying Guide. Consumers interested in buying REAL® dairy products, or foods made with REAL® dairy ingredients, will be able to do so by using this Guide.

The REAL® Seal Facebook page — www.facebook.com/REALSealDairy — is reaching consumers, and more importantly, engaging them in why they should buy REAL® dairy products, and foods made with REAL® dairy ingredients. Since the Facebook page was launched in June, it has received nearly 60,000 “Likes.” This is the result, in part, of a paid advertising campaign initially funded by NMPF. The Facebook campaign has also benefited from the strong click-through rate, meaning consumers are continuing on to the REAL® Seal Facebook page rather than simply clicking “Like” on the REAL® Seal ad in their news feeds.

The program user fees being collected will go toward continuing these and other campaign elements, strengthening the connection between consumers and REAL® Seal users’ products. Future program elements will include a national blogger network, a Pinterest presence, email-driven direct marketing, and mobile apps.

NMPF Stresses Need for Improved USTR Approach to Geographical Indications Issue

NMPF has joined with the Consortium for Common Food Names (CCFN) and several other cooperatives, proprietary companies, and organizations to send a strong message to the U.S. Trade Representative (USTR) regarding the need for an improved approach to tackling the problem of escalating efforts by the European Union (EU) to monopolize the use of many common food names. For instance, in several U.S. free trade agreement (FTA) partners, the EU is on the brink of successfully restricting use of cheeses widely made in the U.S. such as parmesan, gorgonzola, and several others. NMPF and the letter’s other signatories stressed the importance of tackling this issue not solely as an Intellectual Property topic, but also as a de facto barrier to market access.

Through its membership in CCFN, NMPF has been actively supporting efforts to oppose these naming restrictions not only in our export markets, but also here at home. The launch of U.S.-EU FTA talks threatens to impose these name product limitations on our own domestic market, a concern of even greater proportion than the sizable export challenges we currently face.

Trans-Pacific Partnership Negotiators Aim for 2013 Close

Trans-Pacific Partnership (TPP) trade ministers met at the outset of the latest round of TPP trade negotiations in late August. The meeting was intended to help spur progress in the talks and move discussions closer to a goal of concluding by the end of this year.

The U.S. in particular has been increasingly vocal about the need for greater focus and progress to advance challenging issues at this stage. On two items in particular – market access talks with Canada & Japan – are at very early stages: August represented Japan’s first full TPP round of negotiations and Canada has to date continued to resist opening up its dairy market to any meaningful degree. NMPF remains closely involved in discussions with U.S. negotiators on all topics of interest to the dairy industry and has made the U.S. government well aware of the key deliverables needed in order to secure the industry’s support.

Registration Open for NMPF Annual Meeting in Phoenix

In a little more than two months, dairy farmers from around the country will gather at the Arizona Biltmore in Phoenix, AZ for the 2013 annual meeting that NMPF hosts jointly with the National Dairy Promotion and Research Board (NDB) and the United Dairy Industry Association (UDIA). The meeting will be held November 11 – 13.

The joint annual meeting offers attendees several days of informative programming, in addition to opportunities to interact and network with dairy producers and industry leaders from across the country. Dairy producers, cooperative staff, Young Cooperators (YCs), industry suppliers, trade press, and others from within the dairy sector are all invited to attend.

Individual and group meeting registration, along with hotel reservations, can be made online at www.dairyevents.com. Although online registration is preferred, a registration form may also be filled out and submitted via mail or fax. Online, mail, and fax registration must be submitted with payment by Thursday, October 17. Visit www.nmpf.org/nmpf-joint-annual-meeting for more information.

Genetically Modified Opportunity

In Mary Shelley’s classic 19th-century horror novel Frankenstein, all manner of troubles result after a scientist brings a dead human back to life. Today, the term “Frankenfood” is often used by activists to demonize genetically-modified plants. Attacks on the use of biotechnology in the 21st century are themselves coming back to life, after having been mostly dormant the past decade. Just as in the fictional account of Dr. Frankenstein and his monster, the real-life reinvigoration of the anti-GMO food movement is creating all sorts of new troubles for food producers. It’s as if the past 200 years of scientific progress and enlightenment are being cast aside by forces that focus on fear and demagoguery, not the facts.

It’s a bit puzzling why this issue is resurfacing, given that the production of genetically-modified corn, soybeans, cottonseed, and canola on millions of acres has been growing for more than 15 years, without a single food safety issue – not one – arising during this period of widespread use. There was an initial surge of criticism of biotech seeds in the late 1990s, and then the issue seemed to fade…until lately. The expensive and testy ballot initiative in California two years ago, over whether to require the labeling of foods using GMO ingredients, certainly gave new life to the issue. Similar recent state labeling proposals and popular referenda, along with efforts at the federal level to establish biotech food labeling, are adding fuel to the fire.

What’s new this time around is that anti-GMO groups are now attempting to target specific brands in the value chain, from processors to retailers to foodservice companies, urging them to repudiate the use of any GMO ingredients in their food supply. There’s no clear reason articulated as to why these products should be eliminated or targeted for labeling, other than vague insinuations about the fear of the unknown. This, despite the fact that biotech seeds and plants have been subject to rigorous scientific testing, review, and approval by government authorities worldwide.

So far, these efforts, led by groups such as GMO Insider, haven’t harvested any changes in behavior. But the consequences for livestock producers, including dairy farmers, would be severe if the question about how to produce food becomes focused on eliminating GMO seeds from the process.

Anti-GMO activists are seeking to drive a wedge between the decision-makers across the food production chain, since our complex system necessarily involves the unique choices of many individual suppliers. Food processors and marketers have little or no means of controlling or verifying the choices that go into the production of livestock at the start of the value chain. And for farmers, they have little to no ability to provide the types of often technical details that justify their decision to use GMO seeds as they raise cows and other meat, milk, and egg-producing animals.

The rationale for using modified seeds is clear: these plants help reduce soil erosion, increase the crop yield, reduce the amount and number of pesticides needed, and cut the carbon footprint of agriculture because less tillage requires less fuel. In a world where the population is growing, but arable land and fresh water are not, GMO seeds have a critically-important role to play in both the developed and developing world.

In America, these benefits have resulted in widespread adoption of GMO products. Today, 90+% of corn, soy, cottonseed, and sugar beets are genetically modified, meaning there are few remaining acres devoted to producing “traditional” feed crops. At the farm gate, the demand for GMO seeds is emphatic and undeniable. But at the grocery store, efforts to sow misunderstanding and harvest mistrust of GMO products are likewise undeniable. Witness the fact that retailer Whole Foods will spend the next five years verifying whether all of the foods it sells, including livestock products, were fed or produced with GMO ingredients.

This type of activism ensures that the issue will not quickly disappear. The use of social media to generate vocal opposition to certain food production tools, including GMOs, is likely to fan the flames in the future. But there’s good news as well as bad news here.

The fact that there’s a great deal of misinformation about food biotechnology is indeed a cause for concern, but it’s also an opportunity for those who understand and support the technology. The National Milk Producers Federation is working with other farm groups to share information about how genetically-modified food plants help increase crop yields and decrease chemical inputs including fertilizer and pesticides. Coalitions like the U.S. Farmers and Ranchers Alliance (through its FoodSource online tool) have devoted considerable resources to providing clear, fact-based resources that help dispel the misconceptions surrounding the use of GMO feeds.

As is always the case, the best proponents for a particular product are its practitioners – in this case, the farmers who grow and harvest the crops. Sixteen million farmers around the world use biotech crops, and not just in the U.S. The social media tools that farmers need to explain their choices will, in the future, be just as important as the technology itself that creates GMO seeds. That’s a great opportunity, and also an obligation we can’t hesitate to pursue.

Congress Leaves Town with Farm Bill Issues Unresolved

Congress left Washington August 1st for a five-week recess, with the fate of the 2013 farm bill still very much up in the air. Prior to leaving town, House Republican leaders negotiated a farm bill nutrition title that raises to $40 billion the level of cuts to food stamp programs. This food stamp-only measure is likely to be voted on once the House returns Sept. 9.

The House has already passed a farm programs-only version of the farm bill, while the Senate’s farm bill contains both farm and nutrition programs. Prior to leaving on recess, the Senate named 12 conferees from the Agriculture Committee to meet with their counterparts in the House, once the House leadership names its set of conferees.

The August recess offers another chance for dairy farmers to tell lawmakers how important it is to pass a farm bill that includes the dairy policy reforms endorsed by the Senate in June. This message can be delivered in the coming weeks at August town hall and Congress-on-your-corner meetings, Labor Day parades, individual office meetings, and so forth.

Once Congress returns to Capitol Hill after Labor Day, the time frame in which to pass a compromise bill is limited. Many farm programs, including the MILC program, expire September 30th. Further complicating things, the current agriculture appropriations measure expires the same day.

The price support program is authorized through December 31st, after which permanent law likely would be activated, potentially resulting in much higher support levels for a variety of farm commodities, including milk.

3 Key Messages for Legislators in August

Here are three key reasons why Congress must enact the Senate dairy reform provisions over those in the House bill:

  • The Senate provides an effective dairy safety net at low cost, while the House does not. The House bill encourages milk supplies to build up and prices to plummet. Without a market stabilization program, the House margin insurance plan will threaten the viability of dairy farming.
  • The Senate dairy title is fiscally responsible, while the House version is not. The House bill creates a new, open-ended dairy subsidy. Taxpayer costs would have been $1 billion higher under the House bill, had it been in effect over the last four years.
  • Contrary to misleading statements from dairy processors, the Senate dairy provisions will not hurt consumers. Had it been in effect between 2009 and 2012 the Senate bill would cost the average American family only 25 cents extra per year for dairy products.

Promising Start to Immigration Reform Turns to Frustration

After a promising start in 2013, efforts to reform America’s immigration policies have stalled in the House of Representatives, and frustration is beginning to spread in the organizations that have worked on the issue, from agriculture, to the business community, to religious groups.

Democrats have said immigration reform should include a path to citizenship for undocumented immigrants, but many Republicans have said they will not support legislation containing such a provision. Instead, House Republicans are pursuing a number of smaller bills, each addressing a piece of the puzzle, including border security, agriculture workers, and high-skilled visas.

Majority Leader Eric Cantor (R-Va.) and Judiciary Committee Chairman Bob Goodlatte (R-Va.) are leading the immigration reform efforts, including a bill to legalize undocumented young people who came to the U.S. as children. But their efforts do not include any easy path to legalization for their parents, or any other currently undocumented workers. A seven-member bipartisan group in the House has been working for several months on comprehensive legislation with a path to citizenship, but they haven’t been able to find common ground on all issues, including how to deal with the extent to which those affected by immigration reform will be treated under the new healthcare reform law.

Rep. Cantor has said the House will hold a series of votes at some point, but he hasn’t been clear on the timing for them. Rep. Paul Ryan, Chair of the Budget Committee, has said the House will vote this fall on several reform components.

Since the Senate has already passed a comprehensive immigration reform bill, the ball is in the House’s court. The majority of Americans strongly believe that immigration reform must be dealt immediately, and that any legislation should address border security, currently undocumented workers, and the future flow of new workers. The process will continue this fall once Congress returns from its August recess.

REAL® Seal Campaign Grows in July

NMPF’s campaign to reposition the REAL® Seal program continued in July, with a big push to garner visibility on Facebook, where in less than two months, the RealSealDairy page has earned nearly 50,000 fans.

The Facebook site is one of three elements to create stronger consumer awareness for the Seal, and where and why it is used by dairy companies. The other two are blogger outreach, and a more consumer-focused website, www.realseal.com. The blogger component of the campaign connects bloggers writing about food, health and family, with farms and dairy products, establishing why products with the REAL® Seal are a desirable choice for their recipes.

The revamped REAL® Seal website also has new consumer-friendly information about the Seal. And through the month of August, it features a naming contest where people can submit recommendations for what to name the animated REAL® Seal logo that greets those who go to the website.

Another new educational tool for companies using the Seal is a short video that’s available on YouTube. The video summarizes the NMPF-designed campaign, and how it will connect a new generation of American consumers with dairy products displaying the Seal.

CWT Assists with 17.8 Million Pounds of Cheese and Butter Export Sales

Of the 124 requests for export assistance that Cooperatives Working Together (CWT) received in the month of July, it accepted or had its counter offers accepted on 67. Forty were for cheese exports totaling of 8.755 million pounds, and 27 were for butter exports totaling 8.879 million pounds. With large inventories of cheese and butter hanging over the market, moving these quantities should help alleviate some of the pressure growing inventories are causing.

For the first seven months of 2013, CWT has helped member cooperatives to sell 75.7 million pounds of cheese and 61.3 million pounds of butter. These products are going to 34 countries on all six continents, and it will all be shipped in 2013. On a milkfat basis, that is the equivalent of 2.1 billion pounds of milk, nearly 400 million pounds more than USDA’s latest projected increase in 2013 production over 2012 of 1.7 billion pounds.

As it is designed to do, CWT’s Export Assistance program helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the farm milk used to produce them.