ARLINGTON, VA – The current free trade agreement with Mexico is the driving force behind $1.2 billion in U.S. dairy exports to our southern neighbor, as well as billions more in economic contributions, according to an analysis released today by Informa Economics.

Mexico is the No. 1 market for U.S. dairy product exports, accounting for roughly one-fourth of total U.S. exports. In 2016, the most recent year examined by Informa, the United States shipped $1.2 billion worth of dairy products to Mexico, up from $201 million in 2002. In 2016, Mexico accounted for 45 percent of total U.S. skim milk powder exports to all destinations, as well as 30 percent of cheese exports, 10 percent of butter exports and 8 percent of whey exports.

According to the analysis, total economic contributions (direct, indirect and induced) created by dairy sales to Mexico show the true importance of these exports to the overall U.S. economy. Including impacts to industries that are linked to U.S. dairy exports to Mexico, the aggregate 2012-2016 output value of $6.7 billion is magnified to $23.3 billion in economic output.

Informa’s analysis found that for every $1 of sales associated with dairy exports to Mexico, an additional $2.50 in output (industry sales) is supported elsewhere in the U.S. economy. U.S. dairy exports to Mexico also created 16,492 full-time equivalent jobs while directly generating an aggregate GDP of $8.4 billion over that five-year period.

“This analysis not only illustrates the importance of preserving existing market access to Mexico under North American Free Trade Agreement (NAFTA), but also demonstrates why we are urgently pursuing new opportunities via U.S. free trade agreements around the globe,” said U.S. Dairy Export Council (USDEC) President and CEO Tom Vilsack. “Virtually every U.S. free trade agreement to date has yielded positive results for dairy, and current negotiations hold great potential for the industry.”

The authors of the analysis note that under NAFTA, U.S. exports of dairy products to Mexico are duty free. This provides a significant advantage to the United States because export competitors shipping to Mexico are subject to MFN tariff rates of 20-45 percent on cheese, 45 percent on skim milk powder and 10 percent on whey products.

“Without NAFTA, the United States would be paying higher tariffs in terms of MFN tariff rates of 20 to 45 percent, or the same levels as its competitors,” the authors wrote.

Some competitors, including the European Union (EU), are already negotiating trade agreements with Mexico that could make their exports more competitive in the Mexican market.

“As this analysis shows, the relationship between the U.S. and Mexican dairy sectors is of great importance, not just to our producers, but to our economy as a whole,” said Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). “We are committed to working toward a modernized NAFTA agreement that preserves this open and dependable trade relationship with Mexico, while removing massive barriers to dairy trade with Canada that were not adequately addressed in the original agreement.”

The analysis notes that while transportation advantages will continue with or without NAFTA, these logistical advantages would, at best, only partially offset economic losses in terms of business sales, GDP and jobs.

The study also reviews the potential increase in competition through the renegotiation of the EU-Mexico free trade agreement and the implementation of the newly established Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11) negotiations. Both negotiations could improve market access for competitor dairy product exports to Mexico.

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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 U.S. dairy producers and the cooperatives they collectively 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 www.nmpf.org.

The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe.

ARLINGTON, VA – The U.S. Department of Agriculture (USDA) must move swiftly to reopen sign-up for the dairy Margin Protection Program (MPP) for 2018 now that Congress has made significant improvements to the dairy economic safety net program, according to the National Milk Producers Federation (NMPF).

ARLINGTON, VA – The National Dairy FARM Program is now the first livestock animal care program in the world to be recognized internationally for its industry-leading animal welfare standards. The U.S. Department of Agriculture (USDA) affirmed this week that the program complies with the International Organization for Standardization (ISO) Animal Welfare Management/General Requirements and Guidance for Organizations in the Food Supply Chain.

USDA’s affirmation that the FARM Program is ISO-compliant “validates the hard work of everyone who has contributed to the FARM Program in the past decade — from the veterinarians and academics who helped design the program, to the farmers and dairy cooperatives who implement it,” said Emily Meredith, NMPF’s chief of staff. “The U.S. dairy industry has worked hard to make the FARM Program a best-in-class animal care program, not just in the United States, but now around the world.”

ISO’s animal welfare technical specification was designed to evaluate if animal welfare programs meet international standards for animal care. ISO, an independent, international standards-setting body, has worked for several years with the World Organization for Animal Health (OIE) to help farmers and animal welfare programs like FARM determine how to implement species-specific animal welfare standards. The OIE, the World Trade Organization-recognized body for setting animal health and welfare standards affecting international trade, adopted dairy cattle welfare standards in 2015. In the United States, the USDA’s Agricultural Marketing Service (AMS) offers a voluntary marketing program that ensures independent welfare programs meet the specifications of the ISO standard.

“ISO compliance means that dairy customers both here and abroad can safely trust that their products meet the stringent, internationally recognized animal welfare standards set by the OIE,” added Meredith. “What’s more, our dairy farmers can rest assured they only need to comply with one program — FARM — and not a potential myriad of other guidelines. This recognition becomes even more critical as nearly 16 percent of U.S. milk production is exported to foreign customers.”

After a lengthy assessment process, the FARM Program now has a prestigious, independent corroboration that its science-based approach to high-quality animal care sets the standard for the dairy value chain in the United States and around the world. Consumers can trust that the dairy foods they consume came from animals treated under internationally recognized, quality animal care 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.

ARLINGTON, VA – The National Milk Producers Federation (NMPF) today lauded new bipartisan legislation in the Senate that would prevent dairy farms from having to generate meaningless air emissions data under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The Fair Agricultural Reporting Method (FARM) Act, introduced in the U.S. Senate on Tuesday afternoon, would prevent farms, ranches and other agricultural operations from having to report livestock manure emissions data under CERCLA. The CERCLA provisions in question were originally enacted to address accidental hazardous air emission emergencies from toxic waste sites. However, because of recent court decisions, the CERCLA law soon will require farms to generate reports that regulatory agencies do not want and will not use – unless Congress legislates a change to the underlying law.

“CERCLA was never intended to be applied in this way to dairy farms,” said NMPF President and CEO Jim Mulhern. “Congress needs to stipulate that this burdensome regulatory overreach serves no legitimate health or safety purpose, and needs to stop.”

The FARM Act’s lead sponsors include Sens. Deb Fischer (R-NE) and Joe Donnelly (D-IN), along with 18 other Republican and Democratic senators, including Environment and Public Works Committee Chairman John Barrasso (R-WY) and Ranking Member Tom Carper (D-DE).

In 2008, the U.S. Environmental Protection Agency (EPA) exempted most farms from reporting the release of manure-related ammonia and hydrogen sulfide under both CERCLA and the Emergency Planning and Community Right to Know Act of 1986 (EPCRA), deeming such reports unnecessary. However, in April 2017, the D.C. Court of Appeals directed the removal of this exemption for dairy and other livestock operations from the two federal laws.

In October 2017, EPA filed a motion requesting that the court extend its stay on requiring livestock farm compliance with CERCLA and EPCRA until January 2018. It also issued its interpretation that reporting under EPCRA was not necessary because the air emissions are associated with routine agricultural operations, which are exempt. EPA plans to address the interpretation further via a rulemaking process. The court was expected to issue its mandate after Jan. 22, but on Jan. 19, EPA filed a request to delay the compliance date for an additional 90 days. The court granted EPA’s request, giving Congress time to change the underlying legislation at issue in the courts.

NMPF and other animal agriculture associations have assisted EPA in petitioning the appeals court to delay issuing a mandate. In the interim, NMPF worked with EPA to clarify reporting obligations in dairy production and develop meaningful guidance for farms of all sizes.

NMPF continues to recommend that producers do not file any emissions reports until the legal issue is resolved. In the meantime, it has been preparing preliminary materials to assist dairy farmers in calculating emissions and filing reports if it becomes necessary.

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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.

ARLINGTON, VA – The U.S. Department of Agriculture (USDA) must move swiftly to reopen sign-up for the dairy Margin Protection Program (MPP) for 2018 now that Congress has made significant improvements to the dairy economic safety net program, according to the National Milk Producers Federation (NMPF).

In a letter sent Tuesday to Agriculture Secretary Sonny Perdue, NMPF said that the agency needs to quickly re-open the sign-up period to give farmers the opportunity to enroll in or change their calendar year 2018 MPP coverage, given that the program will now provide more affordable coverage for farmers during a time when milk prices are at a two-year low. The enrollment window for selecting 2018 MPP coverage closed in December, but the new disaster aid legislation that Congress approved last week directs the USDA to revise that deadline.

“Congress was clear in the legislation that farmers be given the opportunity to elect or adjust their coverage for all of the 2018 calendar year,” said NMPF President and CEO Jim Mulhern in the letter. “Thus, it is critically important that the department move quickly to re-open enrollment and provide MPP coverage retroactive to Jan. 1, 2018.”

The larger budget law also makes several crucial improvements to the MPP, including:

• Raising the catastrophic coverage level from $4.00 to $5.00 for the first tier of covered production for all dairy farmers;
• Adjusting the first tier of covered production to include every dairy farmer’s first 5 million pounds of annual milk production (about 217 cows) instead of 4 million pounds, a recognition of the growth in herd sizes across the country;
• Reducing the premium rates, effective immediately, for every producer’s first 5 million pounds of production, to better enable dairy farmers to afford the higher levels of coverage that will provide more meaningful protection against low margins;
• Modifying the margin calculation to a monthly (from bi-monthly) basis, to make the program more accurate and responsive to producers in difficult months;
• Waiving the annual $100 administrative fees for underserved farmers.

Mulhern also urged that USDA update its education materials for farmers, so that the department’s Farm Service Agency field offices can “ensure that dairy producers across the country receive accurate, timely information about the changes that have been made to MPP.”

NMPF also asked USDA to remind farmers using the MPP that they can receive catastrophic coverage on 90 percent of their milk production history, “with the option of then purchasing buy-up coverage on between 25 and 90 percent of production history. Since the catastrophic coverage level has been modified, we think farmers will be well-served by this reminder,” NMPF wrote.

The newly passed disaster package also removes the $20 million cap on insurance programs offered by USDA’s Risk Management Agency (RMA), which NMPF supported as a means to deliver additional risk management options to farms of all sizes. NMPF said it will work with USDA to help farmers understand existing tools and develop future programs that could be made available through USDA.

NMPF also reminded the agency that the current Farm Bill does not allow farmers to opt back and forth between the MPP and Livestock Gross Margin (LGM) programs. “Therefore, we ask that you give producers one-time flexibility to terminate their LGM contracts” if they wish to utilize the revised MPP in 2018, Mulhern wrote.

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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 is still accepting applications for its National Dairy Leadership Scholarship Program for academic year 2018-2019. Applications must be received by Friday, April 6, 2018.

Each year, NMPF awards scholarships to outstanding graduate students (enrolled in master’s or Ph.D. programs) who are actively pursuing dairy-related fields of research that are of immediate interest to NMPF member cooperatives and the greater U.S. dairy industry.

Graduate students pursuing research of direct benefit to milk marketing cooperatives and dairy producers are encouraged to apply (applicants do not need to be members of NMPF).  The top scholarship applicant will be awarded the Hintz Memorial Scholarship, which was created in 2005 in honor of late Cass-Clay Creamery Board Chairman Murray Hintz, who was instrumental in establishing NMPF’s scholarship program.

Recommended fields of study include, but are not limited to: Agriculture Communications and Journalism, Animal Health, Animal and/or Human Nutrition, Bovine Genetics, Dairy Products Processing, Dairy Science, Economics, Environmental Science, Food Science, Food Safety, Herd Management, and Marketing and Price Analysis.

For an application or more information, please visit the NMPF website or call the NMPF office at 703-243-6111.

The U.S. Food and Drug Administration (FDA) issued materials on Jan. 24 to help importers and food producers comply with the food safety rules mandated by the Food Safety Modernization Act (FSMA). One of the documents, “Chapter 15: Supply Chain Program for Human Food Products,” covers the supply-chain program, required by the Preventive Controls Rule for Human Food. NMPF is reviewing the complex document and will work with FDA to prevent the imposition of burdensome audits across the dairy processing chain related to FSMA compliance.

At issue for the dairy industry is a ready-to-eat (RTE) food manufacturer’s use of milk powder or cheese in a RTE food. FDA says that because L. monocytogenes (Lm) can cause serious health issues, there must be an annual on-site audit to ensure the dairy manufacturing facility is controlling the pathogen. The guidance describes how to approve suppliers, determine supplier verification activities and determine the frequency of conducting verification.

In addition, FDA discusses how an environmental monitoring program is used to verify that the supplier’s sanitation controls are working, and described situations where an immediate supplier may not be the only one performing a preventive control. For example, if a RTE food manufacturer’s immediate supplier does not make the cheese, but cuts and wraps it, then the RTE food manufacturer will need information from its immediate supplier about its environmental monitoring program. The RTE manufacturer will also need from the cheese manufacturer (or the supplier’s supplier) information regarding milk pasteurization and its environmental monitoring program.

NMPF envisions that most cut-and-wrap operations will secure the appropriate verification from the cheese manufacturers and pass it along to the RTE food manufacturers, thereby cutting down on an endless stream of on-site audits. NMPF has told FDA in the past that too many audits detract from food safety.

While the draft guidance does not specify a due date for comments, NMPF plans to file and address this issue.

In mid-January, National Milk expressed support for the U.S. Department of Agriculture’s (USDA) withdrawal of an organic farming regulation that would have created a variety of new animal care and housing standards, as the changes would not have improved on the standards already employed by the National Dairy Farmers Assuring Responsible Management (FARM) Animal Care Program.

On Jan. 17, National Milk submitted comments to USDA’s National Organics Program on Organic Livestock and Poultry Practices, which requested feedback on potentially withdrawing the final rule that amends the organic standards by adding new provisions for livestock handling and transport for slaughter, and expands and clarifies existing requirements covering livestock care and production practices.

NMPF initially commented on the proposed animal production standards in July 2016, saying the changes fall short of what is already used in FARM Animal Care program. In the comments shared with USDA last month, NMPF stated that the FARM Animal Care program assures animal care and wellbeing throughout the U.S. dairy industry, and thus the requirements in USDA’s final rule are unnecessary and duplicative for dairy cattle. Already, the leading organic cooperatives and independent producers participate in the FARM Program.

The basis of the FARM Animal Care program is sound science, and standards are updated every three years to accommodate the latest research around animal health and wellbeing. NMPF will continue to work with USDA on any future National Organic Program animal welfare standards to ensure their alignment with the FARM Program.

Cooperatives Working Together (CWT) helped member cooperatives in January secure 63 contracts to sell 9.71 million pounds of American-type cheeses and 729,730 pounds of butter to customers in Asia, the Middle East, North Africa and Oceania. The product will be shipped during the months of January through April 2018.

These transactions will send cheese and butter to 10 countries in four regions of the world, and will move overseas the equivalent of 106.08 million pounds of milk on a milkfat basis. The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

Helping CWT members gain and maintain world market share through the Export Assistance program in the long term expands the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively impacts all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available on the CWT website.

At the start of February, a district appeals court granted the U.S. Environmental Protection Agency (EPA) additional time to delay the compliance date for manure-related air emissions reporting. The agency now has more time to modify the reporting requirements and develop helpful materials for farmers. While the EPA continues to make modifications to the requirements, NMPF strongly recommends that no reports be filed, and has prepared preliminary materials to assist dairy farmers in calculating emissions and filing any necessary reports.

In October 2017, the EPA filed a motion requesting that the D.C. Court of Appeals extend its stay on requiring livestock farm compliance with the CERCLA and EPCRA acts until January 2018. The court was expected to issue its mandate after Jan. 22, which would have triggered reporting requirements for many dairy producers. However, on Jan. 19, the EPA filed a request to delay the compliance date for an additional 90 days. The other parties involved had 10 days to file a response to EPA’s motion, after which the agency would have had seven days to respond.

In a surprise development this month, all parties filed responses in support of the motion, which meant the seven-day response time was not needed and the court issued its ruling sooner than expected.

NMPF is working with other animal agriculture groups to seek a permanent fix from Congress in the form of legislation to clarify that the CERCLA and EPCRA laws were not intended to require monitoring and reporting of manure-related ammonia and hydrogen sulfide. NMPF is working with other farm groups to build bipartisan support for a legislative solution before the 90-day extension expires.

Margins under the dairy Margin Protection Program (MPP) averaged $9.71/cwt. for the six bimonthly periods during calendar year 2017. This was the second-highest average for a calendar year during the past decade, behind only the $13.30/cwt. average during 2014. The low annual average during those 10 years was $4.58/cwt in 2009.

The monthly USDA margin for December 2017 was $9.36/cwt., $1.03 lower than November’s monthly margin. Most of the decline was driven by a $0.90 reduction in the all-milk price, to $17.20/cwt. in December. On a per-hundredweight-of-milk basis, an increase in the corn price contributed a further $0.09 to the lower December margin, and a higher soybean meal price caused an additional $0.04 drop. Alfalfa hay prices were unchanged from November to December. The bimonthly MPP margin for November-December was $9.88/cwt.

The CME dairy and grain futures continue to indicate that the monthly MPP margin is on the verge of a steep drop, taking it below $8.00/cwt and possibly triggering program payments for those covered at higher margin levels during the first three, and possibly four, bimonthly periods of 2018. Most of the projected changes in the margin during the coming year will be due to a lower all-milk price, which could drop another $2.00/cwt from its December level by late winter and early spring.

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

A proposed regulatory change to put low-fat flavored milk back into schools will greatly bolster the nutrition intake of America’s children, NMPF told the Agriculture Department in late January. USDA has been taking steps to enhance milk options in schools since Agriculture Secretary Sonny Perdue arrived at the agency last year.

In comments submitted with the International Dairy Foods Association, NMPF praised the proposed regulation for the positive effect it will have on the widely recognized problem of declining school milk consumption. In 2012, over NMPF’s objections, USDA eliminated low-fat flavored milk as an option in the school meal and a la carte programs, resulting in students consuming 288 million fewer half-pints of milk from 2012-2015.

NMPF’s comments were in response to a formal proposal, issued by USDA in late November, allowing school districts to solicit bids for low-fat flavored milk this spring, prior to the 2018-19 school year. This gives milk processors time to formulate and produce a low-fat flavored milk that meets the specifications of a given school district for the next school year. The proposal also enables schools to offer low-fat flavored milk during the next school year without requiring schools to demonstrate either a reduction in student milk consumption or an increase in school milk waste.

Milk is the No. 1 source of three out of four nutrients of public health concern because they are under consumed: potassium, vitamin D and calcium. The dairy groups called the lack of adequate levels of those nutrients “a threat to public health and to the nutritional intakes of all Americans, notably children and adolescents.” Milk is also the leading dietary source of six other essential nutrients.

This interim rule, NMPF said, is consistent with the 2015-2020 Dietary Guidelines for Americans (DGA), which does not suggest that flavored milk should be fat-free or that there is any reason to avoid low-fat flavored milk. It also aligns with the recent re-examination of fat – and dairy fat specifically – that suggests previous dietary advice was misguided.

The regulation is in now effect for the Fall 2018 school year. USDA will continue to review comments and finalize the rule for future school years by this fall.