In a joint letter to USDA's Tom Vilsack, NMPF and Feeding America asked last month for the Secretary's support for using the $60 million appropriated in FY 2010 Agriculture Appropriations by January 2010 to fund programs for purchases of processed cheeses, including American, cheddar, and mozzarella, among others, that can in turn be used to provide emergency food assistance to feed American families experiencing economic hardship.

In addition to helping food-insecure households, the purchases of cheese would help dairy producers currently struggling through the economic crisis as well.

NMPF and Feeding America recommended that the product purchases from the market be done at a price level necessary to pay for processing, packaging, and delivery to the emergency food network. The plan would include targeted assistance, which would maximize the cost-effectiveness of emergency feeding programs and limit disruptions in the commercial market.

The USDA is expected to announce soon how that $60 million figure will be spent, along with the $290 million in direct payments to producers.

Cooperatives Working Together (CWT) announced last week that it has tentatively accepted 154 bids in the fourth herd retirement it has conducted in the last 12 months. The 26,412 cows and 517 million pounds of milk accepted in this round, combined with CWT’s three previous herd retirements since December 2008, equal a total reduction of milk production capacity of five billion pounds.

“Coming into 2009, CWT’s economists estimated that we would need to remove between five and six billion pounds of milk, the production of approximately 250,000 cows, through herd retirements,” said Jerry Kozak, President and CEO of the National Milk Producers Federation, which administers CWT. “We are pleased that the participation in this third herd retirement of 2009 has brought us to our goal of aligning supply with demand, and hastening the recovery of farm-level milk prices that plunged because of the global recession.”

CWT member farmers in 33 states submitted a total of 168 herd retirement bids during the two-week bidding period which ended October 15th. This is the ninth herd retirement in the past six years of CWT’s existence, and featured a maximum acceptable bid threshold of $5.25 per cwt., the same price ceiling as in the retirement conducted in August.

“We felt it was important to help milk prices continue to strengthen by conducting another herd retirement as soon as we completed farms audits for the previous round one in the summer,” noted Kozak. He said in addition to the 26,000 cows, 465 bred heifers were also accepted this week.

This week, CWT field auditors began visiting the 154 farms whose bids were accepted, checking their milk production records, inspecting their herds, and tagging each cow for processing. All farmers will be notified no later than November 16, as to whether their bid was among those accepted.

For more on CWT’s activities, visit www.cwt.coop.

In comments to USDA’s Natural Resources Conservation Service, NMPF stated that many dairy farming systems in use today in various parts of the U.S. are well suited to participation in the Conservation Stewardship Program (CSP).

 

NMPF is a founding member of the Innovation Center for US Dairy, a collaborative effort to develop a roadmap for reducing greenhouse gas emissions by 20% by year 2020 within the dairy industry. The council is comprised of producers, processors, manufacturers, retailers, and other dairy industry stakeholders. The Innovation Center is working to implement and obtain funding for the 12 approved project plans that were endorsed in January, along with several other projects that are undergoing further analysis and refinement.

NMPF stressed that the fundamental goal in the final rulemaking must be to make it simple and easy for CSP to be of real, concrete, and practical assistance to farmers struggling to deal with their real and immediate conservation and environment needs and challenges. NMPF also encouraged NRCS, under the flexibility granted to the Secretary in the statute, to ensure that everything has been done to support this objective.

Based on current futures market prices, Milk Income Loss Contract (MILC) payments are winding down, with only a small payment projected for December milk, and none after that through the 2011 fiscal year. A combination of high feed prices and low milk prices led to record-high MILC payment rates in 2009.

NMPF posts updated projections weekly at www.nmpf.org/milk_pricing/milc_payments.

NMPF's website, www.nmpf.org, underwent a much-needed upgrade last month to improve its efficiency and performance. While most of the site looks the same, there are a few new capabilities on select pages, such as RSS feeds for press releases, CEO's Corner, and News for Dairy Co-Ops. There is also a new video function, which will allow viewers better access to NMPF's videos. Some of the website's URLs have changed to enhance search engine optimization.

If you have any questions about the NMPF website, please contact Sarah Olson.

The 93rd annual meeting of the National Milk Producers Federation will start on Monday, Nov. 9, at the Gaylord Texan Hotel in Grapevine, TX.

The meeting will start Monday with the semi-annual business meeting of the Cooperatives Working Together committee. Tuesday, NMPF’s Board of Directors, and its Delegates body, will meet. Wednesday will feature a Town Hall meeting to review the activities of NMPF in 2009. Wednesday’s opening luncheon will feature a presentation from former Dallas Cowboy running back and FOX sports analyst Daryl Johnston. The general session Wednesday afternoon will feature a presentation on the future of the global dairy business from Clinton Anderson of Bain Consulting. Thursday, USDA Under Secretary Jim Miller will talk about dairy policies, while Domino’s Pizza CEO Dave Brandon will discuss the state of the pizza business.

A complete list of events and programming can be found on the NMPF website.

NMPF continues to provide substantive comments to the New York City (NYC) Department of Health and Mental Hygiene on its National Sodium Reduction Initiative. As the city’s health department examines alternatives to reduce sodium intake, cheese has become a primary target. The Initiative is recommending a 30% reduction of sodium in pizza served at schools.

In a letter to the New York City Department of Health and Mental Hygiene, NMPF stressed the technical challenges associated with reducing sodium in cheese in terms of taste, functional, and safety attributes. Such challenges are even more pronounced in lower fat cheese varieties. The primary points of the letter included:

• Sodium is important in terms of safety, functionality, and quality of cheese. Salt helps control the fermentation process, and it maintains characteristics such as flavor, texture, and shelf life. It helps minimize spoilage and prevent the growth of pathogenic organisms.
• These roles are more pronounced as related to the production of lower fat cheeses. In response to public health recommendations, the industry has placed a high priority on work to increase the availability of good tasting, lower fat cheeses.
• Consumer acceptance of low sodium cheeses currently available has not been promising. This is of particular concern from a nutritional perspective given that cheese is a significant source of essential nutrients in the diets of growing children and teens. For example, a single serving of Cheddar cheese provides nearly one‐fourth (23%) of the recommended calcium intake of 1300 mg/day for 9‐18 year‐olds.

For two dairy cooperatives, 2009 and 2010 have been and will be big years for them and their members.

Tillamook County Creamery Association (TCCA), headquartered in Tillamook, OR, is wrapping up its 100th anniversary this year. Formed as a farmer-owned cooperative in 1909, TCCA has earned a reputation as one of the nation’s premier makers of cheese. TCCA markets an extensive line of dairy products, including naturally aged cheddar and a variety of other cheeses, butter, premium ice cream, sour cream, and yogurt. Learn more about TCCA by visiting their website at www.tillamookcheese.com.

Another NMPF member coop, United Dairymen of Arizona (UDA), will be celebrating its 50th anniversary in 2010. Located in Tempe, AZ, UDA is an agricultural milk marketing cooperative that was incorporated in 1960. UDA produces high, medium, and low heat nonfat dry milk (including vitamin fortified products), MPC, cream, butter, skim milk, condensed skim milk, and lactose powder. The cooperative is among the few remaining full service dairy coops in the country. Find out more about UDA at their website at www.uda.coop.

NMPF is headed to Grapevine, TX next month for its joint annual meeting with the National Dairy Promotion and Research Board (NDB) and the United Dairy Industry Association (UDIA). The meeting will be held November 10-12 at the Gaylord Texan Hotel & Convention Center and will focus on "Building Partnerships, Building Opportunities: Now More Than Ever."

Time is running out for participants to register for the meeting and book their hotel rooms. The deadline for both is next week on Friday, October 16.

Online registration for individuals and groups is encouraged and can be accomplished by visiting www.dairyevents.com. The Dairy Events website offers a direct link to the Gaylord Texan Hotel reservations website, since hotel reservations must be made separately from meeting registration.

Please check out www.nmpf.org/annual_meeting for more information about the Annual Meeting.

NMPF, with support from Dairy Management, Inc. (DMI), formally launched the National Dairy FARM Program: Farmers Assuring Responsible Management at a news conference last week during the 2009 World Dairy Expo at the Alliant Energy Center in Madison, Wis., unveiling key components of the voluntary, nationwide program designed to bring consistency and uniformity to animal care through education, on-farm evaluations and objective third-party verification.

“Dairy farmers are passionate about the care they provide to their animals. The National Dairy FARM Program takes that producer passion and quantifies it to tell the story of dairy animal care to our customers and consumers,” said Jamie Jonker, vice president of scientific and regulatory affairs at NMPF. “This is a very thorough program that was created with input from all sectors of the dairy industry, including producers, veterinarians and other animal care experts. It includes current best practices, innovations, and advances in technology.”

The dairy industry has an excellent track record of responsible management practices, said Jonker. “This program simply offers producers an avenue to demonstrate and validate their commitment to doing what’s right,” he said.

At the news conference, Jonker provided an overview of the program and the National Dairy FARM Program Animal Care Manual, which details best management practices for a variety of issues, including animal health, facilities and housing, animal nutrition, and transportation and handling. The content of the manual is consistent with the principles and guidelines of the National Dairy Animal Well-Being Initiative, which was introduced in 2008.

Participating producers will be provided with training materials that include a comprehensive animal care resource manual, a quick-reference user guide, an animal care instructional video, and other educational materials. An on-farm instructor may be available from a producer’s cooperative or other source, said Jonker.

Through a statistical sampling, a certain number of participating dairy farms will be randomly selected for third-party verification.

On-farm evaluations will begin in 2010; third-party verification will follow in 2011, said Jonker.

To participate, producers, co-ops, processors, and state and regional dairy producer organizations can contact NMPF. Costs of the program are still being determined. Implementation of the program, including cost, will depend on whether participants join the program through a co-op or proprietary processor, or as an individual producer.

Effective October 1, 2009, CWT is implementing its third herd retirement of the year. All bids submitted must be postmarked no later than Thursday, October 15. This is the fifth herd retirement that CWT has conducted in the past 18 months.

The two herd retirements in the second half of 2008, plus the two herd retirements so far in 2009, have removed 250,000 cows from the nation’s dairy herds, helping to bring the supply of milk more in line with demand. This third herd retirement of 2009, along with an improving domestic economy and a stabilizing global economy, should further accelerate the recovery in dairy farmers’ prices.

As with past herd retirements, producers wishing to submit bids into the program must be members of CWT, either through their membership in a CWT member cooperative, or as an individual, as of January 2009. Producers whose bids were selected in previous herd retirements will not be eligible to bid again. This round will once again include a bred heifer option.

The maximum bid CWT will consider is again $5.25 per hundredweight of milk. CWT will select bids beginning with the lowest bid with consistent milk production. However, given budgetary considerations, there is no guarantee that every producer submitting a bid up to the maximum $5.25 bid level will be accepted.

Once again, producers whose bids are accepted in this herd retirement will be paid in two installments: 90% of the amount bid times the producer’s milk production from September 1, 2008, through August 31, 2009, when it is verified that all cows have gone to processing plants. The remaining 10% plus interest will be paid at the end of 12 months if neither the producer nor the dairy facility – whether owned or leased – go back into in the commercial production and marketing of milk during that period.

Farm audits should begin the first week of November and be completed by early December.

The table below shows the total number of cows and the pounds of milk production that CWT has removed since June of 2008 by acting decisively in a timely way to aggressively drive supply into balance with demand.

 

	Milking Cows	Dry Cows	Total Dairy Cows	Bred Heifers	Total Milk Production (Pounds)
2008-1	21,215	3,370	24,585	275	431,742,946
2008-2	42,571	8,059	50,360	1,240	976,002,015
2009-1	88,821	12,219	101,040	818	1,963,134,948
2009-2	63,413	10,700	74,113	2,958	1,523,171,807
Total	216,020	34,348	250,368	5,291	4,894,051,716

 

In addition to the actual milk production CWT removed, additional future milk production is impacted by reducing the number of new animals entering the milking herd. The bred heifers removed would have produced another 100 million pounds of milk and their heifer calves as well as the heifer calves of the dry cows removed raise the total to another 140 million pounds per year.

House and Senate appropriations negotiators agreed last week to divide up a $350 million dairy aid package between direct payments and cheese purchases. The bill is awaiting final approval in the House and Senate, respectively.

NMPF had urged congressional leaders last month to allocate all of the $350 million to the acquisition by the USDA of consumer cheese products that could then be donated through food banks and other charities to help feed the hungry.

However, the appropriators agreed on a compromise that will allocate most of the money to direct payments. The USDA, once the money is approved, will determine the precise formula for how to pay out the $290 million, and NMPF will work with USDA to determine the most equitable payment formula.