The Senate Judiciary Committee last week began consideration of S. 744, the comprehensive immigration reform bill containing the crucial agriculture worker provisions backed by NMPF.

The Senate legislation is the product of NMPF’s efforts in recent years to resolve the employment needs of dairy farmers, and agriculture overall. This legislation under consideration includes farm worker provisions crafted by the Agriculture Workforce Coalition (AWC) – of which NMPF is a member – and the United Farm Workers (UFW). More than 300 amendments have been filed to the Senate legislation. Many of these could have a direct or indirect impact on farmers, and NMPF staff members are carefully weighing positions on each. Despite the sensitive nature of the immigration issue, NMPF is optimistic that this legislation will advance through the Judiciary committee with the vital reforms needed by dairy farmers as part of the package. The committee will likely take a number of days to complete consideration of the bill.

Meanwhile, in the House of Representatives, Judiciary Committee Chairman Bob Goodlatte recently introduced H. R. 1773, the Agricultural Guestworker Act. While the AWC remains committed to the agreement reached with UFW, the coalition remains deeply engaged with Rep. Goodlatte and other House members on this matter. The House Judiciary Committee will have an agriculture-focused hearing this week to begin the process of developing a farm worker immigration plan. While the path ahead remains unclear in the House, NMPF will continue working to ensure that the needs of dairy farmers are addressed.

In April, Cooperatives Working Together (CWT) received a total of 126 requests for export assistance from member cooperatives. Of those, 28 counter offers made by CWT were accepted, resulting in 3.9 million pounds of cheese and 5.2 million pounds of butter being sold, primarily to customers in Asia, the Middle East, and North Africa.

Through April, CWT has assisted 10 member cooperatives in making 308 export sales totaling 50.9 million pounds of cheese, 51.7 million pounds of butter, 44,092 pounds of anhydrous milk fat, and 218,258 pounds of whole milk powder. The product will be shipped through October of this year. It is equivalent to 1.6 billion pounds of milk, which exceeded USDA’s estimate of the increase in U.S. milk production in 2013.

CWT-assisted shipments of cheese and butter in 2013, through April, totaled 52.9 million pounds of American-type cheeses and 29.9 million pounds of 82% milkfat butter. The majority of cheese will be going to Asia, while the majority of butter will be shipped to the Middle East and North Africa.

NMPF’s efforts to revitalize the REAL® Seal will take a big leap forward this spring, as a new campaign to build interest in the seal through social media is being launched. The campaign will galvanize interest among consumers in real, American-made dairy products, using a new Facebook page, blogger outreach, and digital advertising. The program will be launched in time for June Dairy Month.

The revamped REAL Seal® Facebook page will create a new voice and visual feel to engage and cultivate target audiences, especially moms and heads of households consuming dairy products. The page’s content will include interaction-provoking updates, multimedia presentations, contests, polls, and quizzes. One of the elements of the launch will feature a “Name the Character” contest. Kids submitting the winning name will receive a packet of coupons provided by product marketers using the REAL® Seal.

The blogger outreach will generate engagement, online conversation, and awareness surrounding the REAL® Seal campaign by driving consumers to official REAL® Seal platforms, and by interacting with bloggers writing about the mom/parenting, food/cooking, health/wellness, and lifestyle topic areas. Starting in July, a special Buyer’s Guide section will be added to the REAL® Seal website, where consumers will be able to go to find REAL® dairy products, foods made with REAL® dairy products and restaurants that use and serve only REAL® dairy products. REAL® Seal users will have the option of providing links to their company’s website as well.

For the second time in two years, state public health and agriculture department officials participating in the National Conference on Interstate Milk Shipments (NCIMS) turned down a proposal to reduce the maximum allowable level of somatic cell counts in milk.

At its meeting in Indianapolis last month, the NCIMS voting delegates – a group of state regulators overseeing milk safety rules – considered a proposal sponsored by NMPF to reduce the maximum threshold of allowable somatic cells in milk at the farm level from the current 750,000 cells/mL, down to 400,000, starting in 2015. But on a close vote, the delegates rejected the proposal, meaning that the status quo threshold of 750,000 will remain for domestic milk production – putting the U.S. “behind the curve when it comes to milk quality standards,” according to Jerry Kozak, NMPF President & CEO.

On a related decision with trade policy implications, the NCIMS delegates approved a proposal to permanently allow foreign dairy marketers to participate in the U.S. Grade A program, by permitting required sanitation evaluations of overseas dairy farms and processing facilities to be carried out by third-party, non-governmental inspectors.

“Dairy farmers in the world’s major milk producing regions have made great strides in reducing somatic cell count levels. Regulatory systems around the world have moved to incorporate these lower somatic cell count levels, and the U.S. needs to be on board with that process, not be left watching from the side of the road by the failure to update our standards,” said Kozak. “We continue to be perplexed by the inconsistency of those state regulators who voted to make it easier to import Grade A dairy products into the United States by outsourcing mandatory inspections, while at the same time rejecting efforts to facilitate the export of American dairy products,” Kozak said.

A similar somatic cell count proposal was defeated by the NCIMS in 2011. Since then, the European Union has moved ahead with a somatic cell count limit of 400,000 for dairy products being exported by the U.S. to EU member countries.

NMPF also expressed disappointment at the NCIMS delegates’ rejection this week of a resolution calling for the enhanced enforcement of federal labeling regulations affecting the marketing of imitation Grade A dairy products, such as soy, hemp and rice “milks,” and soy and rice “yogurt.”  The recommendation was also opposed by representatives of the dairy processing community.

NMPF and the U.S. Dairy Export Council (USDEC) applauded the United States’ decision last month to welcome Japan into Trans-Pacific Partnership (TPP) free trade negotiations.

“Japan greatly enhances the potential value of the TPP to U.S. dairy producers and processors,” said Jaime Castaneda, senior vice president for strategic initiatives and trade policy. “Japan is the third-largest economy in the world and already a major dairy importer. Reducing excessive tariffs and removing non-tariff barriers to trade will significantly increase U.S. dairy export opportunities, which will help drive overall U.S. dairy industry growth.”

U.S. suppliers shipped $284 million worth of cheese, whey proteins, milk powder and other dairy products to Japan in 2012. It is the fifth-largest U.S. dairy export market, despite substantial market access barriers in many of the biggest dairy categories.

The U.S. Trade Representative’s Office officially notified Congress of the American government’s intention to enter into TPP trade talks in 2009. At that time, it did so with the idea that the TPP would eventually expand from the initial eight participants—Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States and Vietnam—to the entire Asia-Pacific, thus expanding the economic significance of the deal.

A group of 130 members of the dairy industry met last month in Indianapolis for the 2013 National Dairy Producers Conference (NDPC). The conference kicked off with a behind-the-scenes tour of Fair Oaks Farms. The program included topics such as understanding the importance of immigrant labor, technology and innovation, agricultural lending, dairy beef quality assurance, high feed prices, and international trade issues, among others.

Presentations and photos from the conference are available at www.nmpf.org/NDPC.

The 15th joint annual conference of the American Butter Institute (ABI) and the American Dairy Products Institute (ADPI) was held April 28-30, in Chicago.  This year’s meeting drew over 850 industry executives, government officials, academia, and media.

The two-and-a-half-day meeting addressed the manufactured dairy product industry’s latest challenges and opportunities, featuring presentations from a wide range of speakers. The opening panel discussion outlined topics and issues that would affect business, including weather conditions, feed costs, global economic and population growth, as well as production and pricing.

Other topics covered included industry relations and opportunities with China, dairy industry traceability issues, best practices to follow in the event of a recall, and uses of milk protein concentrate as an ingredient. Top industry chief executives also shared their vision of opportunities for the dairy industry in future years.

The 2013 conference also featured a silent auction that was held during the Grand Chicago Reception, which raised $5,000 to benefit the Jim Page Memorial Scholarship Fund. In addition, Phillip S. Tong, Professor of Dairy Science and Director of the Dairy Products Technology Center at California Polytechnic State University, received the 2013 ADPI Award of Merit.

The ABI Board Meeting was held on Tuesday, April 30^th, where the board elected Josh White, Hoogwegt, U.S., Inc.; William Schreiber, O-AT-KA Milk Products Coop, Inc.; and Keith Murfield, United Dairymen of Arizona to serve on the ABI Board for 2013-2014. The board also got an opportunity to listen to presentations on ABI’s Strategic Planning Meeting, Butter Economic & Market Outlook , an update on the Butter Promotion Program, as well as learn more about the REAL® Seal and Cooperative Working Together.

The complimentary social hours held each afternoon in the exhibit hall and the sizeable receptions held on Monday and Tuesday evenings provided abundant opportunities to network with producers, marketers, suppliers, distributors, and brokers of manufactured dairy products.

From Jerry Kozak, President and CEO, NMPF:

“The National Milk Producers Federation (NMPF) is pleased that the Farm Bill unveiled today by the House Agriculture Committee contains dairy program reform provisions based on the Dairy Security Act (DSA). These are the same provisions that were included in last year’s bill that the committee approved. The DSA updates the badly frayed dairy safety net, and it enjoys strong support among dairy farmers nationwide.

“In addition to providing dairy farmers an effective safety net, the DSA is fiscally responsible. The alternative to the DSA, expected to be offered by Reps. Goodlatte and Scott, is unfortunately not fiscally responsible and could return us to the bad old days of huge price-depressing dairy surpluses. Goodlatte-Scott would guarantee cheap milk for processors while dulling market signals to farmers through margin insurance payments. If milk prices fall sharply or feed costs soar – both common occurrences in recent years – government costs of the dairy program could spiral out of control.

“The DSA provides the right combination of effective risk management for dairy farmers while minimizing program costs to the taxpayer. NMPF commends both Committee Chairman Frank D. Lucas (R-OK) and Ranking Member Collin D. Peterson (D-MN) for their support of DSA over the last two years and looks forward to continuing to work with them to enact this crucial legislation in the months ahead.”

 

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies.

From Jerry Kozak, President and CEO, NMPF:

“We are pleased that the dairy title of the Farm Bill released today by the Senate Agriculture Committee contains the Dairy Security Act (DSA), just as it was included in last year’s Senate Farm Bill. The DSA is the best approach for providing a cost-effective safety net for dairy farmers, and we commend Chairwoman Debbie Stabenow (D-MI) and Ranking Member Thad Cochran (R-MS) for their efforts to pass the DSA into law. The DSA provides the right combination of effective risk management for dairy farmers while minimizing program costs to the taxpayer.

“NMPF is part of a coalition of more than 50 state and national farm groups that have been working since 2009 on replacing outdated dairy programs that don’t work, with a new safety net that reflects that realities of dairy farming in the 21st century. Dairy farmers throughout the U.S. support the proposal that the Agriculture Committee will be reviewing next week, and urge members of the committee – and their counterparts in the House Agriculture Committee, which will also review the DSA next week – to pass this critical legislation.”

 

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies.

ARLINGTON, VA – More than 50 state and national dairy organizations, including the National Milk Producers Federation (NMPF), sent a joint letter today to members of the House Agriculture Committee, urging that panel to include the Dairy Security Act (DSA) in upcoming Farm Bill. The House Ag panel is expected to begin drafting a Farm Bill next Wednesday.

The letter, which can be found online, said that dairy producers need “a financially-sound risk management program to help farmers better manage margin volatility,” noting that the economic conditions that led to the development of the DSA after the dairy depression in 2009 – low milk prices and high feed costs generating terrible margins – were experienced again by America’s dairy farmers last year, when feed costs soared to record levels as milk prices dropped.

The coalition’s letter – signed by 52 separate organizations – urged House members to oppose a competing proposal to be offered by Reps. Bob Goodlatte (R-VA) and David Scott (D-GA), the “Dairy Freedom Act,” because it would weaken the safety net for farmers in order to benefit dairy processors. The Dairy Freedom Act strips out the market stabilization component from the DSA.

The letter says that “Without the discipline offered by market stabilization, low milk prices will continue for longer periods. This is detrimental to farmers. Low milk prices will lead to more government outlays. This is detrimental to taxpayers. The Dairy Freedom Act is supported by processors precisely because it offers them the prospect of lower milk prices, subsidized by government insurance payments. This scenario is not sustainable. Free margin insurance alone is a costly ruse.”

The farm groups assert that “Market stabilization sends a clear signal to farmers participating in this program that a bit less milk is needed. Not only does this hasten a rebound in low-margin situations, it reduces the cost of the program to the government.”

The joint letter points out that “The real threat to the growth of our domestic dairy industry is not a market stabilization program that will only rarely activate; it’s the further damage to our dairy producer sector that would result from an ill-conceived processors’ dream plan to assure themselves a sea of taxpayer-subsidized milk.” Also, the letter notes, the DSA is “a voluntary approach to risk management, which offers producers the choice to participate.”

“The U.S. dairy industry is demonstrating a level of unity and support for the Dairy Security Act that is unprecedented for our industry. These organizations share the belief that the status quo is not an option for our future, and we stand united behind the Dairy Security Act as a rare opportunity for the dairy industry to collectively support reasonable, financially-sound changes to our Federal policies,” said the letter.

The following groups signed onto the letter: Agri-Mark, Alabama Dairy Producers, Arkansas Dairy Cooperative Association, Associated Milk Producers Inc., Colorado Dairy Farmers, Continental Dairy Products, Inc., Cooperative Milk Producers Association, Dairy Farmers of America, Dairy Farmers Working Together, Dairy Producers of New Mexico, Dairy Producers of Utah, Dairylea Cooperative Inc., Dairymen’s Marketing Cooperative, Inc., Ellsworth Cooperative Creamery, Farmers Cooperative Creamery, FarmFirst Dairy Cooperative, First District Association, Foremost Farms USA, Holstein Association USA, Inc., Idaho Dairymen’s Association, Iowa State Dairy Association, Kansas Dairy Association, Land O’Lakes, Lone Star Milk Producers, Maryland Dairy Industry Association, Maryland & Virginia Milk Producers Coop. Assoc., Michigan Milk Producers Association, Midwest Dairy Coalition, Milk Producers Council, Missouri Dairy Association, National Council of Farmer Cooperatives, National Farmers Organization, National Milk Producers Federation, North Carolina Dairy Producers Association, Northeast Dairy Farmers Cooperatives, Northwest Dairy Association, Oregon Dairy Farmers Association, Prairie Farms Dairy, Inc., Premier Milk Inc., Scioto County Cooperative Milk Producers’ Association, Select Milk Producers, Inc., South Carolina Dairy Association, South Dakota Dairy Producers, St. Albans Cooperative Creamery, Swiss Valley Farms Company, Tillamook County Creamery Association, United Dairymen of Arizona, Upstate Niagara Cooperative, Inc., Virginia State Dairymen’s Association, Washington State Dairy Federation, and Zia Milk Producers, Inc.

 

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies.

May is going to be a pivotal month in the crusade to create a better future for dairy farmers, as both the Senate and House Agriculture Committees will, in the next two weeks, begin marking up the five-year farm bill that stalled out at the end of 2012. Dairy farmers have a huge stake in how the farm bill gets resolved.

Unfortunately, our efforts to obtain an effective safety net for farmers, in the form of the Dairy Security Act (DSA), have been contested every step of the way by dairy processors. Their main goal in this process has been assuring themselves of an abundance of cheap milk, priced at levels that will harm farmers over the long term, and bankrolled by taxpayers. This is a recipe for disaster.

How did we reach this point? NMPF’s members have been working across the farmer community for four years to develop a better safety net, one that eliminates the ineffective and costly MILC, price support, and dairy export incentive programs. In their place, we are asking for the creation of a voluntary program to address not just milk prices, but margins: the gap between national average milk prices, and national feed costs. This insurance program allows up to 90% of a farm’s production to be covered by this risk management approach. Importantly, the Dairy Security Act contains a mechanism to temporarily adjust milk production when periods of low margins threaten farm balance sheets and – just as critically – threaten to drive up the cost of the insurance payouts to unsustainable levels.

Thus, the DSA has a market stabilization element that asks farmers who choose to enroll in this government program to trim their milk output by a few percentage points only when margins are severely compressed—as they have been on a handful of occasions over the last ten years. Now, there is no requirement that a participating farm actually cut milk production. It’s just that they won’t be paid on 100% of their output when the market is clearly indicating it doesn’t need all that milk. The idea is that it’s better to trim a slight amount for a short time, rather than suffer prolonged poor margins for months on end, as happened in 2009.

The DSA’s market stabilization component has processors and their allies using all manner of distortions and misrepresentations to attack it. The biggest ruse is that the stabilization program is a government assault on a farmer’s milk check. Remember, this is a voluntary approach to risk management, which offers producers the choice to participate. If they do, market stabilization makes the program more effective by reducing milk output to keep prices from hitting rock bottom. In reality, the program will improve farm income more quickly than without it, by better aligning supply with demand. Just as importantly, this approach saves taxpayers money.

The alternative endorsed by processors features no mechanism to curtail potentially excessive milk production. This is a great deal for them: it offers processors an over-abundant, cheap milk supply, ensuring that farmers are underpaid for the milk they produce, while taxpayers are asked to make up the difference.

We’ve seen spurious claims aplenty about the Dairy Security Act: it would kill exports (no, there’s a provision to suspend the market stabilization element if a misalignment between U.S. and world prices arises that could disadvantage U.S. dairy exports); it would stop the growth of the industry (no, the analyses done show that long-term growth is not hampered); the DSA would gouge consumers (hardly; an analysis by the University of Missouri said that farm-level milk prices will rise only ½ of one cent per gallon because of the DSA, not even noticeable given the monthly volatility of farmers’ milk prices – not that they set retail prices to begin with!).

One processor-affiliated group has even distorted a recent study of the DSA by Midwestern university economists by asserting that margin insurance by itself has a better net benefit. It reached that conclusion by claiming credit for the market-stimulating (and thus revenue-enhancing) effects of the stabilization program, even though such a program doesn’t even exist under a limited, margin insurance-only approach! And this assessment also assumes farmers will continue to produce and dump milk, even when they have two months advance notice to trim milk production and save on feed costs.

As has been noted since the days of the ancient Greek empire, when it comes to war, truth is the first casualty. The same observation applies to the processors’ war on the Dairy Security Act. The truth is, the dairy farmer-developed DSA is a better deal for farmers and for taxpayers. The real threat to the growth of our domestic dairy industry is not a market stabilization program that will only rarely activate; it’s the further damage to our dairy producer sector that would result from an ill-conceived processors’ dream plan to assure themselves a sea of taxpayer-subsidized milk. Congress should choose wisely, as truly the best and most honest approach is the Dairy Security Act.

From Jerry Kozak, President and CEO, NMPF:

“Goodlatte and Scott’s misnamed Dairy Freedom Act is nothing more than an unacceptable attempt by dairy processors to assure themselves access to a sea of taxpayer-subsidized cheap milk. Congress rejected this approach last year, and should do so again this year.

“What processors claim is a compromise is nothing more than a costly ruse that will hurt farmers and taxpayers alike.

“Because it features no mechanism to put the brakes on potential excess milk production, it offers dairy processors an over-abundant, cheap milk supply that will help their corporations’ bottom lines, while ensuring that farmers are underpaid for the milk they produce. Dairy processors are simply trying to have taxpayers make up the difference.

“The market stabilization program in the Dairy Security Act that was approved last year by both the House and Senate Agriculture Committees makes our program cost-effective. Creating an effective, voluntary participation program supported by dairy farmers from coast to coast most certainly is the business of the federal government. That program is the Dairy Security Act, not this dairy processor-backed Trojan Horse.”

 

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies.