From Jim Mulhern, President and CEO, NMPF:

ARLINGTON, VA – “We are encouraged that the U.S. Department of Agriculture’s (USDA) principles for the next farm bill, released by Secretary Sonny Perdue on Wednesday, start with improving the farm safety net. The current farm bill’s dairy Margin Protection Program (MPP) has proven to be inadequate in providing help to America’s dairy farmers, and fixing it must be a priority in 2018.

“The USDA has taken significant steps at NMPF’s request in the past three years to improve the MPP, but now legislative changes are needed. NMPF continues to work with USDA and lawmakers in the House and Senate to strengthen the MPP to ensure meaningful assistance for those relying on it, and to find ways to expand risk management options for farmers. Making the MPP a reliable program for dairy farmers is vital to encouraging future farmer participation in the program. Additional risk management tools are also critical for the future of our dairy farmer community. Raising the current expenditure cap on programs available under USDA’s Risk Management Agency is vital to increasing the toolbox of options for farmers.

“As we begin 2018, milk prices and on-farm dairy margins are poor. It’s time to expand access to risk management tools and rectify the flaws in the MPP to create a workable safety net for dairy farmers.”

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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.

An 11-year-old law intended to minimize the risk of terrorist attacks in the U.S. may require dairy farmers to adjust their use of hydrogen peroxide as a sanitizer, based on information shared recently with NMPF by the Department of Homeland Security.

In 2007, Congress required the DHS to create a Chemical Facility Anti-Terrorism Standards (CFATS) program. The program identifies and regulates high-risk chemical facilities to ensure they have security measures in place to reduce the risk of a terrorist attack using certain chemicals. The CFATS regulation lists more than 300 chemicals of interest (COI) which, if held in specified quantities or concentrations, trigger reporting requirements to DHS. Facilities are required to report their chemical holdings within 60 days of coming into possession of a COI.

To assist agriculture, DHS granted an indefinite time extension for certain activities at agricultural facilities. The extension applies to chemicals used for soil preparation and the treatment of crops, feed, land, livestock, or other areas of an agricultural production facility (for example, ammonia used as a fertilizer falls under the extension, but propane for fuel or hydrogen peroxide for cleaning and water treatment must be reported).

In the past year, DHS has been visiting agricultural operations that may have their chemical use covered by the indefinite exemption. DHS has inspected several dairy farms where chemicals used to clean equipment and hydrogen peroxide was used to treat water – both potentially non-exempt activities. DHS subsequently contacted NMPF staff and asked for help in sharing the chemical security requirements with dairy producers.

Regarding hydrogen peroxide, the rule states that hydrogen peroxide with a 35% or higher concentration is a Chemical of Interest. If the concentration is below 35%, it is not a COI and it will not trigger reporting. NMPF urges dairy producers using hydrogen peroxide on their farms to immediately begin using a solution less than 35%, or ensure they have less than the threshold reporting quanitity of 400 pounds on site at any time. NMPF staff are also exploring whether other chemicals being used could trigger the rule. More information can be found here. Otherwise, contact Clay Detlefsen .

National Milk continues to advise dairy farmers not to file ammonia-related air emissions reports until an appeals court issues a mandate that triggers a reporting requirement – an action that could be taken later this month.

At issue is the extent to which livestock operations will have to report manure-related emissions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) regulation, and the Emergency Planning Community Right to Know Act (EPCRA). In 2008, EPA provided a broad exemption of all livestock operations from reporting requirements. However, last April, a federal appeals court ended EPA’s exemption for reporting of livestock air emissions under CERCLA/EPCRA, following legal challenges made by activist groups.

EPA sought and was granted additional time from the court to delay the effective compliance date so that the agency could develop materials to help farmers understand their obligations. In late October, the EPA filed a motion requesting that the stay remain in place until January 2018. The D.C. Court of Appeals should issue its mandate by Jan. 22, which may trigger reporting for many dairy producers.

EPA estimates that a single dairy cow emits 0.07 pounds of ammonia per day. Given that the ammonia threshold is 100 pounds per day, NMPF estimates that it will take approximately 1,428 cows to trigger reporting to the National Response Center. EPA has said that no one is obligated to use the 0.07 emission factor, and instead says farmers “may establish estimated quantities of releases by relying on: past release data, engineering estimates, your knowledge of the facility’s operations and release history, or your best professional judgment.”

Once the mandate is issued, if a farm has more than 1,428 cows, operators should consider reporting to the National Response Center via email within 24 hours of understanding the reporting obligation. Dairy operators must identify the reportable release as an “initial continuous release notification,” then submit an initial written notification to the EPA Regional Office within 30 days, and one year later submit an additional follow-up written notification to the EPA Regional Office.

For farms with fewer than 1,428 cows, NMPF suggests calculating emissions on paper, signing and dating it in front of a notary, and keeping it on file to defend against activists who may try to initiate litigation against livestock operations. NMPF staff are prepared to assist dairy operators with compliance efforts if the emissions reporting requirement is implemented in the coming weeks.  Contact Clay Detlefsen for more information.

Further, farm owners and operators in compliance with their Animal Feeding Operation Air Compliance Agreement are not expected to report air releases of hazardous substances from animal wastes under CERCLA and EPCRA. Per that agreement, participants must report air releases of hazardous substances equal to or exceeding the hazardous substances’ reportable quantities under CERCLA only when EPA completes the National Air Emissions Monitoring Study.

NMPF continues to work with other animal agriculture organizations, EPA and members of Congress to find a long-term solution that will preclude the need to file air emission reports stemming from the natural decomposition of manure.

The 2017 edition of NMPF’s Dairy Data Highlights is now available to order.

The Dairy Data Highlights booklet is an extensive collection of tables and graphs that provides national and state data on all aspects of milk production, federal milk marketing orders, sales of milk and dairy products, farm and retail prices, and dairy product production, as well as dairy export and import information through 2016. It has been published annually by NMPF for more than 60 years.

Copies of the current Dairy Data Highlights are available at the following rates:

NMPF member cooperatives or associate members:
Fewer than 10 copies: $7.50/booklet
Orders larger than 10: $5.00/booklet.

Non-members:
Fewer than 10 copies: $10/booklet
Orders larger than 10: $7.50/booklet.

To purchase copies, complete an order form and mail it back to NMPF with payment. We accept checks or money orders. Checks should be made payable to the National Milk Producers Federation. Booklets will be mailed upon receipt of payment. The booklet is not available electronically.

NMPF is now accepting applications for its National Dairy Leadership Scholarship Program for academic year 2018-2019. Applications must be received no later than 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 to qualify).  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 National Dairy FARM Program, in conjunction with Southeast Milk Inc., Merck Animal Health and the University of Florida, hosted four dairy stewardship meetings and training sessions in three southern states from Dec. 11-15. The meetings helped emphasize the importance of implementing the FARM program’s Version 3.0 protocols, which became official at the start of 2017.

Owners and managers within Southeast Milk’s membership attended the trainings (pictured right), held in Louisiana, Georgia and Florida. During each one-day training courses, facilitators addressed potential vulnerabilities on the farm, discussed creating a culture of proper cow care, and shared resources for training on-farm employees.

These sessions are the foundation of a larger initiative developed by Southeast Milk to foster a culture of continuous improvement throughout the Florida dairy farm community, in light of customer and consumer expectations about animal care.

NMPF expressed support this month for the Maryland Department of Environment’s regulation to establish a water quality trading program, one that could serve as model for how other states provide opportunities for dairy farmers to benefit from the management of nutrients.

In its comments, NMPF endorsed the nutrient removal technologies that will be eligible to participate in the program – an issue the organization raised several times over the years as Maryland officials worked on the issue. NMPF also requested that trading not be limited in terms of time, and that a trading system with a duration of 10 or more years is needed to make the economics of nutrient removal technologies work. Otherwise, interest in technology-based nutrient removal solutions will not materialize. NMPF believes nutrient removal technologies can play an important role in the MDE’s trading program.

Unfortunately, Maryland’s plan to reallocate $10 million from the Bay Restoration Fund (BRF) to water quality trading for nutrient credit purchases did not come to fruition. Had the proposal been approved, it would have created enormous interest in the nutrient trading program. NMPF was also disappointed that piloting interstate trades within the Chesapeake Bay watershed suffered a similar fate. Regardless, NMPF commended both the MDE and the Maryland Department of Agriculture for creating the program and the rule. NMPF will continue to support Maryland effort to establish a workable water quality trading program.

Cooperatives Working Together (CWT) helped member cooperatives secure 45 contracts to sell 6.06 million pounds of American-type cheeses and 1.10 million pounds of butter to customers in Asia, Central America, the Middle East, North Africa and Oceania. The product will be shipped in the months between December 2017 and March 2018.

These transactions bring the 2017 total of CWT-assisted product sales contracts to 73.38 million pounds of cheese and 5.91 million pounds of butter. The product is going to customers in 21 countries in five regions, and will move overseas the equivalent of over 810 million pounds of milk on a milkfat basis.

Helping CWT member cooperatives 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.

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.

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

Cooperatives Working Together (CWT) helped member cooperatives secure 45 contracts to sell 6.06 million pounds of American-type cheeses and 1.10 million pounds of butter to customers in Asia, Central America, the Middle East, North Africa and Oceania. The product will be shipped in the months between December 2017 and March 2018.

These transactions bring the 2017 total of CWT-assisted product sales contracts to 73.38 million pounds of cheese and 5.91 million pounds of butter. The product is going to customers in 21 countries in five regions, and will move overseas the equivalent of over 810 million pounds of milk on a milkfat basis.

Helping CWT member cooperatives 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.

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.

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

The monthly margin under the dairy Margin Protection Program (MPP) rose by $0.39/cwt from October to $10.39/cwt in November. The increase was generated by both a higher all-milk price, which rose by $0.20/cwt, as well as a $0.19/cwt drop in the MPP feed cost formula. Twelve cents of the feed cost drop were due to a decline in the corn price, $0.05 stemmed from a lower alfalfa hay price, and $0.01 resulted from a lower soybean meal price. The November monthly MPP margin was the highest since February 2017. The MPP monthly margin was last below $8.00/cwt in July 2016. The November monthly MPP feed cost was $7.71/cwt, the lowest since December 2016. The November all-milk price, $18.10/cwt., was the highest since February 2017.

The CME dairy and grain futures currently suggest that the monthly MPP margin is on the verge of a steep drop, which would take it below $8.00/cwt for the first three or four bimonthly periods of 2018. The MPP feed cost is projected to rise slowly from its current level throughout 2018, but not likely gain more than one dollar above its November 2017 level. The all-milk price, on the other hand, is currently forecast to drop by almost $3 through this winter, driven by expected falling cheese and whey prices. These changes would bring the MPP margin down to $7.00 for the March-April period. The USDA MPP Decision Tool margin forecast for next year has also moved lower, but currently shows a stronger recovery in the MPP margin in the second half of 2018. As shown in the chart above, the USDA tool projects that the MPP margin will fall below $8.00/cwt. during the first half of 2018, based on the latest available update. Just a month earlier, the tool showed the margin remaining above that level throughout 2018.

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.

The Consortium for Common Food Names’ (CCFN) work to protect common food names and safeguard global sales opportunities for cheeses finished the year with a flurry of important activity in key markets.

In early December, CCFN, founded by NMPF and the U.S. Dairy Export Council, submitted detailed filings to all four Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) opposing EU geographical indications (GIs) that would restrict the use of common food names. Mercosur and the European Union (EU) are nearing the end of free trade agreement negotiations, and the EU has been pushing hard to persuade Mercosur to provide them exclusive rights for hundreds of GIs. CCFN has worked extensively with local industry allies in Mercosur countries and through direct submission such as these filings to preserve market access rights for all in that major dairy region of the world.

Also last month, Japan announced the results of its own GI review process, in which CCFN, NMPF  and USDEC were heavily engaged last year. As part of its free trade agreement with the EU, Japan announced its plans to register a lengthy list of GIs, but assured that many terms the EU had sought to monopolize would remain available for use by all, including parmesan, romano, provolone and others. CCFN will continue to work with Japan with the goal of ensuring that companies that have marketed common terms in Japan can keep using them moving forward, such as feta and asiago.

Also in December, efforts to conclude the EU-Mexico free trade negotiations stalled, and here again the EU’s bullying efforts on GIs was a major factor. As with Japan and Mercosur, the EU is seeking to persuade Mexico to restrict a host of common names as part of a GI registration process. CCFN has aggressively battled this EU effort to erase NAFTA market access rights, and that work continued with intense negotiations in mid-December that aimed to conclude the agreement. Talks will continue this year with a final few issues remaining – GIs among them – and NMPF will remain actively engaged in fighting to maintain Mexican consumers’ access to U.S. products.

These and other priority areas in the battle to preserve common name use and market opportunities for U.S. companies were among those NMPF discussed with U.S. Patent and Trademark Office (USPTO) attachés at a USPTO roundtable event in mid-December. NMPF conveyed the high stakes of this issue and updated attendees on CCFN’s global activities – many of which were conducted in conjunction with a number of those foreign-posted USPTO attaches last year. This strong partnership with U.S. government officials remains vital to CCFN success given recent EU efforts.