MPP Forecast: August 2018

The monthly margin under the Margin Protection Program (MPP) for June 2018 was $7.37/cwt., $0.58/cwt. higher than the May margin. The June all-milk price was $16.30/cwt., $0.10 higher than a month before, and the June MPP feed cost formula was $0.48/cwt. lower than in May. More than half the drop in the monthly feed cost was due to lower soybean meal prices.

Dairy farmers who signed up for $8.00 margin coverage at the lower, Tier 1 premium cost would receive a net return of $0.46/cwt. – after payment of premiums and sequestration reduction of payments – on their covered milk production for all of 2018, based on USDA’s MPP Decision Tool forecast calculated using the August 6 CME dairy and grain futures settlement prices, shown in the graphic.

USDA’s MPP margin forecasts can be accessed online. NMPF’s Future for Dairy website offers a variety of educational resources to help farmers make better use of the program.

NMPF Supports Passage of Amendment to Expand H-2A Program to Dairy Workers

With support from NMPF, Rep. Dan Newhouse (R-WA) led an effort last month in the House of Representatives to use the annual federal appropriations process to create more options for dairy farmers to obtain year-round labor.

Newhouse’s amendment, approved as part of the Fiscal Year 2019 Homeland Security Appropriations bill, would allow farm employers to use the H-2A visa program to hire foreign workers, regardless of whether those employees are engaged in temporary or seasonal work. NMPF and members of its Immigration Task Force worked with Rep. Newhouse (picutred right) and other congressional leaders, including Reps. David Valadao (R-CA) and Henry Cuellar (D-TX), to advance the proposal so that dairy farmers can more readily use the H-2A visa program, even while NMPF continues to work in Congress on a long-term, more comprehensive solution to the immigration challenges facing agriculture.

“On behalf of America’s dairy producers, we greatly appreciate Rep. Newhouse’s work to expand the H-2A farm worker visa program to include year-round employees on farms,” said NMPF President and CEO Jim Mulhern. “We believe that creating an additional legal pathway for workers to connect with farm employers deserves bipartisan support.”

The full Homeland Security Appropriations bill will likely be considered later this year as Congress works to fund the government for the 2019 fiscal year, and NMPF will be encouraging the adoption of the H-2A provision in the final, overall funding measure.

At the same time, NMPF continues to seek enactment of broader legislation that would create an agricultural guest worker program and provide permanent legal status for current workers.  House Judiciary Committee Chairman Bob Goodlatte (R-VA) introduced the AG and Legal Workforce Act (H.R. 6417), cosponsored by House Agriculture Committee Chairman Mike Conaway (R-TX), Ranking Member Collin Peterson (D-MN), Rep. Newhouse, and other members. The bill would create a new H-2C guest worker program for agricultural workers – including dairy – and allows current workers to participate in the program as well.  NMPF will work with members to pass this bill in the House as an initial step, with the goal of improving the measure further as it moves through Congress. The House may vote on this bill following the summer recess, but no plans have been finalized.

FDA Head Announces Intent to Regulate Dairy Terms; Senate Rejects Measure to Impede FDA Action

After a years-long effort by NMPF to halt the misleading labeling practices of imitation dairy foods, the commissioner of the U.S. Food and Drug Administration (FDA) last month acknowledged that “almonds don’t lactate” and said his agency intends to enforce dairy standards following a period of public comment.

Prior to the start of a July 26 FDA hearing on government nutrition and labeling standards, Commissioner Scott Gottlieb released a lengthy statement explaining that the agency plans to address the deceptive marketing tactics utilized by makers of plant- and seed-based imitation products. Gottlieb recognized that the issue needs greater clarity, acknowledging that plant-based copycats are not the foods that have been standardized under the name “milk” and often vary widely in their nutrition.

“Because these dairy alternative products are often popularly referred to as ‘milk,’ we intend to look at whether parents may erroneously assume that plant-based beverages’ nutritional contents are similar to those of cow’s milk, despite the fact that some of these products contain only a fraction of the protein or other nutrients found in cow’s milk,” Gottlieb said.

“Dr. Gottlieb’s announcement that the agency is intending to act on this issue is very encouraging,” said Jim Mulhern, president and CEO of NMPF. “This issue is not just an arcane dispute but has significant public health implications because dairy imitators lack any consistent nutritional profile.”

During the FDA’s hearing last month, NMPF reiterated its insistence that any modernization of food standards should start with enforcing ones that already exist for products like milk, cheese and yogurt. Consumers use these standards to make informed purchasing decisions and “expect a certain level of product performance in return,” said Tom Balmer, NMPF’s executive vice president.

“[Alternative] products not only lack ingredients specified by the standards, they frequently fall short in expected characteristics like mouthfeel, taste and texture, and are nearly always less nutritious,” he testified.

NMPF also worked last week with a bipartisan coalition of senators to fend off an amendment that would have impeded the ability of FDA to enforce standards of identity.  Sens. Tammy Baldwin (D-WI) and Jim Risch (R-ID) garnered an overwhelming amount of support to defeat, by a vote of 14-84, a proposed amendment to the fiscal year 2019 FDA appropriations bill that would have instructed the agency to severely limit any action against misleading dairy labeling practices.

“We fought this amendment because it would have undermined the decades-long policy, established by Congress, that FDA should regulate food names to promote honesty and fair dealing in the interest of consumers,” said Mulhern.  “This vote should send a very strong message to food marketers who have long been ignoring FDA’s food labeling standards that those days are numbered. FDA now knows it has strong, bipartisan support in Congress in its efforts to assure a fair marketplace.”

Statement on Senate’s 84-14 rejection of Lee-Booker Effort to Block FDA Food Labeling Standards Enforcement

From Jim Mulhern, President and CEO, National Milk Producers Federation:

Aug. 1, 2018 – “We are very pleased with the Senate’s overwhelming rejection of Sen. Lee’s blatant attempt to interfere with the ability of the Food and Drug Administration to enforce standards of identity for dairy products and other foods.  We fought this amendment because it would have undermined the decades-long policy, established by Congress, that the FDA should regulate food names in order to promote honesty and fair dealing in the interest of consumers.

Standards of identity for milk and other products guarantee that consumers’ expectations are met both in terms of minimum levels of key ingredients and consistency of key sensory and quality attributes. As FDA Commissioner Gottlieb stated last week, consumers are being misled by the nutritional content of plant-based beverages that use the term “milk” on their labels.

Today’s vote should send a very strong message to food marketers who have long been ignoring FDA’s food labeling standards by inappropriately using dairy terms on products that do not contain any dairy. Those days are numbered.  FDA now knows it has strong, bipartisan support in Congress in its efforts to assure a fair marketplace. We thank Senators Tammy Baldwin (D-WI) and Jim Risch (R-ID) for their bipartisan work to defeat this amendment.

We also commend Sen. Baldwin for her successful work on a separate amendment that will create additional dairy innovation grants to help companies expand initiatives that will add more value to the milk farmers produce.”

Defending the Good Name of Milk

“An almond doesn’t lactate, I will confess.”

Sometimes, the simplest, most obvious declarations here in Washington are also the most impactful.  With this statement, U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb announced at a policy conference on July 17 that his agency is finally moving toward enforcing its standard of identity for “milk.” This has set off panic among the deep-pocketed marketers of the many plant-based products exploiting that term – including nut beverages – that aren’t (spoiler alert) actually made of milk.

Dr. Gottlieb’s acknowledgment that FDA has for years largely ignored enforcement of its own standards was a welcome development to us, and to all companies dedicated to manufacturing and marketing real dairy products. Even more important than Dr. Gottlieb’s recognition that fake food marketers are abusing his agency’s regulations, is the commissioner’s indication the FDA is finally going to take a prescribed course of action to regulate the use of dairy terms on decidedly non-dairy products.

This comes after an intensive effort by NMPF over the past two years to force this issue to the fore within FDA. In the absence of a strong hand – or really, much of any regulation at all – we’ve witnessed a proliferation of plant powders and nut slurries mimicking real milk in a transparent attempt to bask in milk’s healthy halo.

Decades ago, when the primary offender was products marketed as soy “milk,” NMPF warned FDA that if it didn’t circumscribe the use of that term as defined by its existing standards, we’d see a mushrooming of other products also co-opting the word – along with other popular and legally defined dairy terms such as yogurt, cheese, ice cream and butter.  And sure enough, as regulators looked the other way, the field has expanded past soy (which is actually decreasing in sales) to things like almonds, quinoa, hemp, potatoes and bananas.

Indeed, this is much more than just a concern regarding fluid milk, as the fake food crowd is increasingly trying to peddle products mimicking cheese and yogurt made from the same substrates as the fluid milk imitators, but again containing no real dairy ingredients.

If you thought butter was off limits because there is a clear standard of identity for butter (one actually codified in federal law, not just regulation) and another standard of identity for plant-based substitutes – known as margarine – think again. With sales of real butter increasing and margarine sales tanking, it doesn’t take a marketing genius to figure out where this is headed. Yep, butter substitutes that meet the existing standard of identity of margarine (or even the lesser standard of a product called “vegetable oil spread”) are starting to be re-branded as “vegan butter.”  This development alone demonstrates the crass commercialism at play here by the fake food marketers. Their fight to keep stealing dairy’s good name is about nothing more than building market share, in any way possible.

As encouraged as we are about Dr. Gottlieb’s proclamations that “we do have a standard of identity [for milk]” and “I do intend to enforce that,” we also have to be prepared that the regulatory course will take time and require a committed dairy community of farmers, processors and others to achieve a satisfactory outcome.  We know that an army of vegans and animal rights activists, working in concert with the marketers of these imitation products, oppose any effort by FDA to enforce the clear and unequivocal dairy standards. The agency will likely solicit public comments to build a legal case for why the existing dairy label standards should finally be consistently applied.  It’s sad that regulators should need additional data to support an action that seems obvious and necessary, but that is the reality of the process.

Toward that end, NMPF will work with our members and other like-minded defenders of dairy’s good name to urge FDA to change course. We all need to impress upon the agency how important it is that the current dairy standards of identity are enforced and followed in the future. On July 26, we testified as part of FDA’s effort to modernize food standards, but more voices are needed.

What does the end game look like? It certainly won’t result in a major hardship for the marketers of the plant-based copycats, as the required labeling changes will be similar to what’s required elsewhere in the world.  Many of the most popular brands of plant-based beverages are also sold in Canada, the United Kingdom and the European Union, in packages that are very similar to those sold here.  The only difference is that these brands actually follow the rules against using “milk” as a product term.  The United States – although it has the same standards – hasn’t enforced them, which created this Wild West environment of products displaying food names they don’t actually contain.

As we’ve repeatedly told FDA, the reason that this issue matters is that nutrition matters.  The term “milk,” regardless of the product using it, conveys that the substance inside the carton is healthy and nutritious.

Real milk always has the same nutritional content, with the only variation being the fat content a consumer decides to choose. Milk is the No. 1 source of nine essential vitamins and minerals in children’s diets, but the imitators lack any consistent profile. Their nutritional content is all over the map, and none deliver the same beneficial nutrients as real milk in each and every glass.  That’s why resolving this dispute is a consumer health imperative requiring FDA’s engagement, and not just a squabble between the dairy community and the upstarts wanting to ride on our coattails. FDA has even acknowledged this, announcing on July 26 that it intends to review its standards of identity in relation to potential public health consequences.

While these fake foods have every right to be in the marketplace, they don’t have the right to call themselves something they are not – especially not a food with an existing standard of identity. At the very least, removing the dairy-specific terms from their labels will hopefully help consumers realize that not all “milks” are created equal.

NMPF Tells FDA: Review of Food Standards Should Start with Enforcement

ARLINGTON, VA – The U.S. Food and Drug Administration (FDA) must enforce standards of identity for dairy products because these federal definitions are critical to safeguarding consumers from making purchases of products whose labels are false and misleading, the National Milk Producers Federation (NMPF) said today.

At an FDA hearing Thursday focused on modernizing food standards of identity, NMPF argued that the agency should first start enforcing the existing standards for dairy foods like milk, cheese and yogurt. Consumers use these standards to make informed purchasing decisions and expect a certain level of product performance in return, said Tom Balmer, NMPF’s executive vice president.

“It seems inconsistent to talk about modernizing standards to improve nutrition and assure accurate information to consumers when FDA has been allowing nutritionally inferior products to use standardized terms like ‘milk’ for so long,” Balmer testified. “Instead of continuing to look the other way, let’s start by enforcing current standards of identity and then talk about potential improvements.”

Food standards help guarantee that consumer expectations are met both in terms of levels of key ingredients and consistency sensory attributes like taste and mouthfeel, said Balmer. While standards weren’t initially developed for nutritional reasons, there is a direct link between the ingredients found in a standardized food and the nutrient package that results from their consumption.

Such is the case with dairy imitation foods like “almond milk,” “soy cheese” and “rice yogurt.” For too long, these products have used dairy terms to associate themselves with the positive traits of milk-based foods, including the significant levels of nine essentials nutrients found in real milk. Because of this marketing tactic, consumers don’t realize they’re being tricked into thinking these products are suitable replacements for the real thing.

“This is a marketing gimmick, and a clever one,” Balmer said. “Such products not only lack ingredients specified by the standards, they frequently fall short in expected characteristics like mouthfeel, taste and texture, and are nearly always less nutritious.”

FDA acknowledged the public health consequences when it released a statement before the hearing announcing it would prioritize taking a closer look at the standards of identity for dairy products (NMPF published its response to this earlier today).

Over the last 20 years, NMPF and its members have made repeated requests for FDA to take enforcement action on misbranded imitation dairy products, with FDA continually claiming the issue is not an agency priority. The public, however, feels differently. A recent independent poll found that American consumers, by a 2-to-1 margin, oppose the use of “milk” as a designation for non-dairy beverages.

Balmer insisted that FDA start enforcing the labeling laws already on the books and rein in the “marketplace chaos,” adding that that the process “doesn’t need to take a year or more.” NMPF also plans to file written comments as part of the FDA’s review of this issue.

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

NMPF Statement on FDA Announcement to Prioritize Review of Standards of Identity for Dairy Products

From NMPF President and CEO Jim Mulhern

ARLINGTON, VA – “We are pleased to see that the U.S. Food and Drug Administration (FDA) has finally recognized the need to increase its scrutiny of plant-based products imitating standardized dairy foods.

“The statement released earlier today by FDA Commissioner Scott Gottlieb echoes our long-standing public health concerns regarding nutritional deficiencies in plant-based foods bearing the term ‘milk.’

“We are further encouraged by FDA’s recognition that standards of identity also verify that a food must possess a ‘basic nature’ and measure of expectation to earn the use of the standardized name.

“We applaud Commissioner Gottlieb’s assertion that FDA will take regulatory action against products bearing misleading labels. Our hope is that such regulatory actions will begin promptly and not be further delayed by the announced dairy standards review process.”

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

NMPF Statement on Passage of Newhouse Amendment to Improve H-2A Program for Dairy Producers

From NMPF President and CEO Jim Mulhern

ARLINGTON, VA – “We greatly appreciate Rep. Dan Newhouse’s (R-WA) work on behalf of America’s dairy producers to expand the H-2A farm worker visa program to include year-round employees on farms.

“Rep. Newhouse’s amendment to the Homeland Security Appropriations bill would allow farm employers to use the H-2A visa program to hire foreign workers, regardless of whether those employees are engaged in temporary or seasonal work. NMPF and members of its Immigration Task Force have worked with Rep. Newhouse on this proposal so that dairy farmers can more readily use the H-2A visa program to fill their need for year-round workers. We’re also grateful for Rep. David Valadao’s (R-CA) support in keeping this issue at the forefront.

“Dairy farmers have largely have not been able to utilize the H-2A visa program because the current version restricts the visas only to the temporary and seasonal labor needs of agricultural employers. The H-2A program simply isn’t an option for a commodity that harvests its product multiple times a day, every day.

“We believe that creating an additional legal pathway for workers to connect with farm employers deserves bipartisan support. It is critical that the government creates a system that provides secure, legal employment. We thank Rep. Newhouse for this efforts toward achieving this goal.”

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

NMPF Welcomes Assistance to Dairy Farmers Suffering Economic Losses from Retaliatory Tariffs

ARLINGTON, VA – The new tariff mitigation program announced Tuesday by the Trump Administration should provide badly needed economic assistance to dairy farmers facing significant financial losses, the National Milk Producers Federation said today.

The U.S. Department of Agriculture (USDA) announced today that it is preparing a $12 billion economic assistance program designed to help dairy farmers and other agricultural producers suffering from the effects of retaliatory tariffs imposed by Mexico, China and other key trading partners. NMPF’s economic estimates indicate that these tariffs will cost U.S. dairy farmers $1.8 billion just through the remainder of this year, based on the decline in milk futures prices since the retaliatory tariffs were implemented.

“We appreciate the president following through on his pledge that America’s farmers won’t bear the brunt of the economic losses generated by the current trade conflicts,” said Jim Mulhern, president and CEO of NMPF. “Today’s announcement reflects requests that our organization has made of USDA to relieve some of the financial pain dairy farmers are feeling due to lost export opportunities.”

NMPF has been engaged in ongoing discussions with USDA about how to reduce the economic harm caused by the trade disagreements between the United States and other nations. The plan announced today will use USDA’s authority to help farmers through a combination of direct payments to farmers, milk product purchases for distribution to feeding programs, and additional export development assistance. Further details about the exact nature of the relief measures will be unveiled later in the summer, USDA officials said.

“We thank the administration for incorporating our recommendations. We will continue working with USDA on program details to achieve provisions that are efficient, cost-effective and equitable to farmers of all sizes in all regions,” Mulhern said.

NMPF is also encouraging the administration to conclude the North American Free Trade Agreement (NAFTA) negotiations and pursue new trade opportunities, “which is the long-term solution to the current situation. We need this assistance for now, but we also need new trade deals that allow our farmers to reach customers in other nations,” Mulhern said.

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

NMPF Encouraged by FDA Commissioner’s Desire to Enforce Dairy Labeling Regulations

ARLINGTON, VA – U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb told an audience at a Politico Pro Summit on Tuesday in Washington that his agency will soon begin enforcing regulations that define milk as an animal product, not a plant-based food – an indication that the National Milk Producers Federation’s (NMPF) requests for action by the agency are being heard. After acknowledging that “an almond doesn’t lactate,” Dr. Gottlieb said the agency soon will seek public input as a prelude to enforcing existing regulations on dairy labeling standards.

NMPF welcomed Gottlieb’s recognition today that the labeling practices of many plant-based dairy imitators violate long-standing federal standards. Gottlieb said that going forward, “he intends to enforce” those standards.

“After years of inaction in response to our complaints about these labeling violations, Dr. Gottlieb’s announcement that the agency is intending to act on this issue is very encouraging,” said Jim Mulhern, president and CEO of NMPF. “The marketing of non-dairy imitators must comply with federal standards of identity, and consumers should not be misled that these products have the same nutrition as real milk, yogurt, cheese and other actual dairy products.”

NMPF wrote to Gottlieb last year to complain that the agency has not been enforcing labeling standards, pointing out that FDA’s lack of action “has led to rampant consumer fraud related to the inferior nutrient content of these non-dairy products compared to their true dairy counterparts,” Mulhern said, adding that in addition to fake “milks,” there also are a proliferation of products calling themselves “yogurt,” “cheese,” “ice cream” and “butter.”

The enforcement issue is not just an arcane dispute, but has significant public health implications because dairy imitators lack any consistent nutritional profile, while real milk always has the same nutritional package, varying only by standardized fat content, NMPF said.

“Consumers who purchase these imitations are not receiving the same level of nutrients found in cow’s milk, and that contributes to Americans falling short of the recommended amount of vitamins and minerals for a healthy diet,” said Mulhern. “FDA must act on this matter or else see the further decline of proper nourishment of our children and families.”

Gottlieb’s comments today are similar to testimony he presented this spring to the Senate, when he acknowledged that the agency has “exercised enforcement discretion” in not holding food marketers to federal standards limiting the use of standardized food terms.

Mulhern said he hopes the agency will rapidly move to take enforcement action, adding that “this issue can be quickly resolved. Once FDA acts to provide guidance to industry on enforcement of existing standards of identity, manufacturers currently playing fast and loose by using standardized dairy terms on products containing no dairy will know the jig is up. Their products have every right to be in the marketplace, but they will have to be properly identified to comply with FDA standards.”

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

Enforcement of Labeling Regulations is Critical to Any Future Policy on Cell-Cultured Products Replicating Meat, Dairy

ARLINGTON, VA – As the use of laboratory-based cell culture technologies to replicate naturally made foods continues to develop, the U.S. Food and Drug Administration (FDA) must first enforce its own existing regulations on the labeling of imitation products, according to the National Milk Producers Federation.

At an FDA hearing today focused on the regulation of cell-cultured products replicating meat, NMPF said that these rapidly evolving technologies impact dairy foods, as well. Just as scientists have discovered how to make “meat” imitations look and feel like the real thing, so, too, have they used genetically modified yeast to produce proteins that share a chemical identity with those found in milk.

FDA has asserted jurisdiction over products manufactured from cell culture technology, but Beth Briczinski, NMPF’s vice president for dairy foods and nutrition, warned that the agency’s failure to enforce existing labeling standards is a major concern.

“For decades, manufacturers have been making fake milk and other imitation dairy beverages, and inappropriately using the names of products on their labels that have clear FDA standards of identity,” said Briczinski. “What began as a clever marketing tactic has led to the rampant abuse of legally defined dairy terms, while FDA has looked the other way. Most importantly, it has misled consumers over the nutritional composition of these products in comparison to traditional milk and its contributions to a healthy diet.”

Over the last 20 years, NMPF and its members have made repeated requests for FDA to take enforcement action on misbranded imitation dairy products, with FDA continually claiming the issue is not an agency priority.  “As a result, we now have an ‘anything goes’ attitude in the marketplace,” said Briczinski. The recent debate over how to regulate and market synthetic meat developed in a lab has brought an added sense of urgency for the dairy industry.

Without a consistent regulatory framework that addresses the marketing of imitation meat and dairy products, in addition to FDA’s selective enforcement, NMPF believes labeling abuses by product manufacturers, further consumer confusion, and a lack of U.S. compliance with international standards will continue to spread.

Briczinski once again reiterated the industry’s request that FDA enforce the labeling laws already on the books regarding fake “milks,” stressing that “it’s beyond time to resolve this problem.” NMPF also plans to file written comments.

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The National Milk Producers Federation (NMPF), 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 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.