The Office of the U.S. Trade Representative’s annual National Trade Estimate (NTE) report issued late last month highlighted many of the dairy trade priorities that NMPF has been encouraging the Trump Administration to address.

The NTE, submitted to Congress and the president, highlights significant foreign barriers to U.S. exports. It is intended to represent an “inventory of the most important barriers affecting U.S. exports” and to “enhance awareness of these trade restrictions and facilitates negotiations aimed at reducing or eliminating these barriers.”

To ensure that USTR incorporated in its list several key issues for U.S. dairy producers, NMPF and the U.S. Dairy Export Council filed detailed comments, and many of the topics the groups highlighted were subsequently cited in the 2017 report. Among the dairy trade issues included were: Canadian dairy trade barriers and policies; geographical Indications and their role in impeding US exports; Japan’s high dairy tariffs; EU regulatory issues such as certification concerns and country of origin labeling requirements; Israel market access; Russia dairy plant registration requirements; Indian dairy certificate requirements; and other topics.

NMPF President and CEO Jim Mulhern, along with his counterparts at the U.S. Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA), pledged a continued commitment to dairy trade with Mexico during discussions last month with Mexican government, dairy farmers and industry officials.

Mulhern, joined by Tom Vilsack of USDEC and Michael Dykes of IDFA, stressed the U.S. dairy sector’s robust commitment to Mexico’s dairy industry – the No. 1 market for American dairy exports.

“Mexico is our friend, ally and most important trading partner,” said Mulhern in meetings with high-ranking leaders of the Mexican dairy industry. “Our goal in visiting Mexico is to communicate our steadfast dedication to our partnership with the Mexican industry, even as we continue to explore ways to deepen that relationship by working on issues of mutual benefit.”

Mulhern and Vilsack spoke at the Femeleche conference in Mexico City, which brought together Mexican dairy industry leaders, farmers and government officials. To further convey the organizations’ commitment to collaboration with Mexico, the three CEOs also met with Mexican Minister of Economy Ildefonso Guajardo Villarreal (pictured above), as well as the Mexican Minister of Agriculture Jose Eduardo Calzada Rovirosa and the U.S. Ambassador to Mexico Roberta Jacobson.

“By working together on these issues, we can harness the strength of our voices,” Mulhern said during the forum. NMPF’s outreach follows the Memorandum of Understanding NMPF and USDEC signed last August with key Mexican industry organizations, creating the U.S.-Mexico Dairy Alliance. Both initiatives were aimed at cultivating the critically important U.S.-Mexico relationship, which has provided a boon to U.S. dairy exports and helped spur gains in Mexican dairy consumption, to both nations’ benefit.

The reassurance from U.S. dairy leaders is coming at a pivotal time in U.S.-Mexico trade relations. The Trump Administration recently released a draft of the NAFTA renegotiations letter it intends to submit to Congress. That letter references the goal of “maintaining and expanding current market access” to Mexico and Canada – echoing a key message Mulhern delivered while in Mexico last month.

NMPF, together with the U.S. Dairy Export Council and the International Dairy Foods Association, are urging the Trump Administration and the governors of northern border states to fight back against protectionist Canadian trade policies that are increasingly shutting out American dairy exports, and thereby violating existing trade commitments between the two nations.

Canada’s new “Class 7” pricing policy, which is expressly designed to disadvantage U.S. exports to Canada and U.S. milk powder exports to other markets, has resulted in multiple dairy companies in Wisconsin and New York informing many of their supplying farmers that the Canadian market for their exports is drying up. A number of dairy farmers in Wisconsin have been told by the company processing their milk and shipping it to Canada that they can no longer accept it starting in May as a result of Canada’s National Ingredients Strategy and new Class 7 milk pricing program.

NMPF has been focusing on Canada’s use of policy and regulatory tools to harm U.S. dairy exports for some time. In light of Canada’s disregard for its trade obligations, and the damage this disregard causes to U.S. dairy farmers, NMPF has strongly urged the U.S. government and states to attack Canada’s habitual efforts to negatively impact dairy trade.

“Canada’s protectionist dairy policies are having precisely the effect Canada intended: cutting off U.S. dairy exports of ultra-filtered milk to Canada despite long-standing contracts with American companies,” said Jim Mulhern, president and CEO of NMPF. “American companies have invested in new equipment and asked dairy farmers to supply the milk to meet demand in the Canadian dairy market. This export access has suddenly disappeared, not because the market is gone, but because the Canadian government has reneged on its commitments.”

Although the near-term consequences of Canada’s harmful approach to dairy policy affect farmers in the regions of this country that were exporting ultra-filtered milk to Canada, the even larger concern is the impact Canada’s new ingredients strategy and Class 7 program could have on global milk powder markets. U.S. exports of skim milk powder play a critical role in contributing to the prices farmers receive for their milk.

Roughly half of U.S. milk powder is exported around the world. Part of what Canada has sought to do with its new program is to use it to move significant quantities of excess skim solids out of Canada and onto global markets – at whatever the price may be. This intention to undercut global milk powder markets poses a risk of hundreds of millions of dollars to American dairy farmers through downward pressure on global milk powder markets. This element has been a key concern for NMPF throughout the process and is part of what makes this a national issue with the risk to impact producers across the country.

While Canada goes to great lengths to limit U.S. dairy access to the Canadian market, our northern neighbor is quite happy to ship goods to the U.S. — we are Canada’s largest export market, accounting for approximately three-fourths of Canada’s total exports.

During a Senate Agriculture Committee confirmation hearing March 23, Agriculture Secretary-elect Sonny Perdue indicated he supports improvements to the dairy safety net, and as head of USDA would also advocate for policies that expand the availability of farm labor in dairy production.

The nomination of the former Georgia governor as the next Secretary of Agriculture was approved by the Senate Agriculture Committee on March 30. His confirmation now awaits action by the full Senate, expected to take place sometime after Congress returns from its two-week Easter recess beginning April 7. NMPF has urged the Senate to swiftly confirm Perdue.

Perdue, who grew up on a farm, told Agriculture Committee members that he understands the plight of dairy farmers, and promised to work with the dairy sector on improving the Margin Protection Program (MPP). This includes reviewing NMPF’s recent four-point plan to fix the MPP. Perdue also expressed an openness to examining ways to create additional risk management coverage for milk through USDA’s Risk Management Agency.

Perdue said he is “absolutely committed to looking for a way to give immediate and temporary relief ahead of the 2018 farm bill.”

On the issue of immigration reform, Perdue said he would support an exemption to the H-2A program so that dairy farms could hire workers for year-round labor. The current seasonal H-2A visa program does not apply to dairy farms because of their perennial need for farm labor.

Perdue was the last of Trump’s nominees to receive a hearing. After the announcement of his nomination, NMPF joined more than 600 other farm organization in January urging his approval to the post. NMPF believes Perdue’s extensive experience in public policy, business and agriculture makes him well-positioned to lead USDA. In addition to serving as governor for eight years, Perdue is the founder of three agribusiness firms and is trained as a veterinarian.

Congress must make it a priority to adopt badly needed improvements to the dairy safety net as soon as possible, said NMPF President and CEO Jim Mulhern at a House hearing last month on dairy policy and the upcoming farm bill.

Mulhern told members of the House Agriculture Committee on March 22 that the current Margin Protection Program (MPP) contains several flaws – including a faulty calculation of the true cost of feeding dairy cattle – that need to be resolved to make the program effective and restore farmers’ faith in it.  Absent the necessary changes, Mulhern said the MPP will not be the safety net that dairy farmers and Congress envisioned when it was first proposed.

“While MPP was, and is, the right approach for the future of federal dairy policy, the program in its current form does not provide meaningful safety net support to the nation’s dairy farmers,” Mulhern said. To rectify that problem, Mulhern shared with the committee the NMPF Board of Directors’ recommendations to improve the MPP, unanimously approved earlier in March.

Since its creation in the 2014 farm bill, the MPP has offered little effective support to dairy farmers, resulting in dwindling participation and diminished confidence in the program. Of the four main areas within NMPF’s package of reforms, the most important is restoring the feed cost formula to the level originally proposed by NMPF.  That formula was cut by 10 percent due to erroneous cost estimates generated by the Congressional Budget Office. The resulting formula “understates the price to farmers of producing 100 pounds of milk, thereby overstating the actual margins farmers are experiencing,” Mulhern said, adding that the Agriculture Committee “got the calculation right the first time,” and thus needs to restore the MPP feed formula to its original level.

Mulhern’s testimony also addressed an issue of great concern to many in the dairy community: the need for immigration reform. Because the seasonal H-2A visa program does not apply to dairy farms with their year-round demand for labor, Congress must provide the agriculture industry with an effective guest worker program to meet its future needs, while also providing a way to address current workers with improper documentation.

“Without access to a steady and reliable workforce, our industry will not be able to survive, let alone thrive, in the future,” Mulhern said.

He also emphasized the critical importance of dairy trade policy, highlighting the U.S. dairy industry’s strong relationship with Mexico while chastising Canada for implementing a pricing policy designed to block American dairy imports.

Mulhern also stressed the need for strong congressional support of the DAIRY PRIDE Act, introduced in the House and Senate in January. Plant-based alternatives lack real milk’s consistent and high levels of nutrition, he said, and in the absence of proper labeling enforcement, increasing numbers of nutritionally inferior dairy imitators will continue to create confusion for consumers in the marketplace.

WASHINGTON, D.C. – U.S. dairy organizations today urged the Trump Administration to fight back against protectionist Canadian trade policies that are slamming the door to American dairy exports in violation of existing trade commitments between the two nations.

The National Milk Producers Federation (NMPF), the U.S. Dairy Export Council (USDEC) and the International Dairy Foods Association (IDFA) called on the federal government, and on governors in northern states, to take immediate action in response to Canada’s violation of its trade commitments to the United States.

Because of the new “Class 7” pricing policy, which is expressly designed to disadvantage U.S. exports to Canada and globally, multiple dairy companies in Wisconsin and New York have been forced to inform many of their supplying farmers that the Canadian market for their exports has dried up. For some farmers, this means that the company processing their milk and shipping it to Canada can no longer accept it starting in May. This is a direct consequence of Canada’s National Ingredients Strategy and new Class 7 milk pricing program.

“Canada’s protectionist dairy policies are having precisely the effect Canada intended: cutting off U.S. dairy exports of ultra-filtered milk to Canada despite long-standing contracts with American companies,” said Jim Mulhern, president and CEO of NMPF. “American companies have invested in new equipment and asked dairy farmers to supply the milk to meet demand in the Canadian dairy market. This export access has suddenly disappeared, not because the market is gone, but because the Canadian government has reneged on its commitments.”

“Our federal and state governments cannot abide by Canada’s disregard for its trade commitment to the United States and its intentional decision to pursue policies that are choking off sales of American-made milk to the detriment of U.S. dairy farmers,” said Tom Vilsack, president and CEO of USDEC “It is deeply concerning that Canada has chosen to continue down a ‘beggar thy neighbor’ path of addressing its internal issues by forcing the U.S. dairy industry to bear the harmful consequences.”

Vilsack noted that while farm families in the Northeast and Midwest are suffering the immediate consequences of the loss of Canadian markets, “thousands more will suffer if Canada persists in using its programs to distort the global milk powder markets so critical to tens of thousands of American dairy farmers.”

“The U.S. dairy industry is united on this issue because these restrictive policies effectively bar a significant U.S. export to Canada, with total losses estimated to hit $150 million worth of ultra-filtered milk exports from Wisconsin and New York. As we feared, these policies are now prohibiting our nation’s dairy processors from accessing the Canadian market,” said Michael Dykes, D.V.M., president and CEO of IDFA. “IDFA is speaking out against Canada’s protectionist policies on Capitol Hill, and asking the Trump Administration and state governors and legislators to insist that Canada honor its trade commitments and allow more market access for U.S. dairy products.”

Despite efforts by the U.S. government and dairy organizations to shed more light on the Canadian program, Canada is refusing to share sufficient details. For instance, limited information has been posted online by certain provinces, and some of that information has subsequently been removed from provincial milk authorities’ websites in what appears to be aimed at obfuscating how the program operates. Despite this lack of transparency, U.S. companies and their supplying farmers are already feeling its real-world consequences.

The United States is Canada’s largest export market, accounting for approximately three-fourths of Canada’s total exports. The organizations urged both federal and state governments to move swiftly to demonstrate to Canada that trade is a door that must swing two ways to have a functional relationship.

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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.

The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation’s dairy manufacturing and marketing industries and their suppliers with a membership of nearly 525 companies within a $125-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA’s nearly 200 dairy processing members operate more than 600 manufacturing facilities and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese, ice cream and frozen desserts produced and marketed in the United States. Visit IDFA at www.idfa.org.

If experience is the best teacher, Congress should have learned an important lesson from the experience with the dairy Margin Protection Program during the past two years: letting policy be dictated by an inaccurate Congressional Budget Office computer model that attempts to predict costs of a proposed program 10 years into the future is a recipe for failure.

That’s exactly the place we find ourselves in as discussions begin on the 2018 farm bill. A reliance on CBO budget projections that were wrong right out of the gate – they missed the mark in both the first two full years of the program – has resulted in a program in need of improvement to become the safety net it was envisioned to be.

The good news is that National Milk’s members have developed a carefully-calibrated series of changes that will patch the holes in this new federal safety net, restoring it to its original form, so that it will have value to farmers.

The dwindling participation between 2015 and 2017 in the MPP’s supplemental coverage option paints a clear picture of the current shortcoming. Farmers’ use of the MPP – which enables them to insure the margin between milk prices and feed costs, paying premiums for increasing levels of coverage – has declined because the program underestimates their true feed costs. 

In 2015, the MPP’s first full year, 56% of dairy farmers elected to pay premiums to purchase coverage above the bare-bones $4 margin level.  But even with the higher coverage levels selected by many farmers, who paid $73 million in premiums that year, MPP issued only miniscule payouts, amounting to less than $1 million.  This was despite the fact that actual margins were tight in 2015.  The program’s enrollees experienced a similar frustration last year, again paying millions more in premiums than the program returned to participants, even though just 23% purchased supplemental coverage.

This year, only 8% of the farms, producing just 2% of the milk supply, are paying premiums for enhanced coverage.

The takeaway from this situation is that there is a profound mismatch between farmer needs and expectations, and the usefulness of the Margin Protection Program.  And because much of the structure of the MPP is written into the 2014 Farm Bill, it will take congressional action to rectify the program’s shortcomings.

The MPP’s limitations are an issue affecting the entire dairy sector, not just the farmers using the program.  Without an effective safety net to better manage risk, both milk production and milk prices are likely to be as volatile as they’ve been for the past 15 years.  This unpredictability becomes a challenge for the entire value chain: cooperatives, processors, retailers and ultimately, consumers.

NMPF has engaged in a top-to-bottom review of the MPP during the past six months, culminating in March with a decision by the NMPF Board to recommend changes in four key areas that will revitalize the MPP. These include:

• Restoring the original feed cost formula first proposed by NMPF.  The feed formula assigns a value to corn, soybean meal and alfalfa hay in order to capture the national average cost of feeding dairy cattle.  But that formula was cut by 10% due to the erroneous budget forecast by CBO. This decision has resulted in USDA-reported margins that are almost $1 per hundredweight higher than they would be under the original blueprint.  I told the House Agriculture Committee at a hearing last month the proposal was right the first time, and the MPP should revert to the original feed formula. We’re also asking that Congress work with the USDA to evaluate the pricing data used for corn, soybean meal, hay, and the all-milk price – all of which should be refined to more closely match the margin conditions experienced across the country.
• Improving the affordability of the program’s premiums.  The cost of premiums should be adjusted to incentivize increased farmer participation in the program, but this must be done in such a fashion that overall MPP budget costs remain reasonable. To be an effective safety net the program needs to enable more robust participation than the current 8% of farms opting for supplemental coverage.  This is not an encouraging participation level for a program of this importance.
• Making payments and annual enrollment more farmer-friendly. Currently the program calculates margins every other month, rather than monthly.  This is a small change that would also boost participation.  Likewise, rather than closing the annual enrollment window in the summer, farmers should have until the end of the year prior to the coming calendar year in which to make enrollment decisions. This another small convenience that enhances the ability of farmers to use the MPP properly.
• Expanding the use of the Livestock Gross Margin Program with the MPP.  Under current law, dairy farmers must choose either the MPP, or the Livestock Gross Margin (LGM) program to manage their risks – even though the programs are complementary, not duplicative.  The LGM works well for some farmers, and modest improvements to it, along with changes to the MPP, would greatly expand the risk management safety net available to dairy producers.

Taken together, these proposals will have a modest budget impact – indeed, how could they not, when right now more revenue is flowing to the government from farmers’ premiums than the MPP is returning to enrollees?  Fortunately, the leaders of the House Agriculture Committee have acknowledged that the farm bill priority of Congress should be to first develop the proper policy, and then allocate resources to properly implement that policy. 

Right now, instead, the budget tail is wagging the dog, which is the wrong way to formulate a viable dairy program, and not what farmers need and deserve. By applying these lessons learned, Congress can fix the MPP in the upcoming farm bill and we will have a viable, and effective, dairy safety net for the future.

Mulhern-Farm-Bill-Testimony 032217.pdf

WASHINGTON, D.C. – As Congress begins its deliberations on the next farm bill, improvements to the dairy Margin Protection Program must be a top priority for lawmakers, said Jim Mulhern, president and CEO of the National Milk Producers Federation, who spoke today before the House Agriculture Committee.

During the farm bill hearing on Capitol Hill, Mulhern told committee members that the dairy Margin Protection Program (MPP) is failing to live up to its intended role as a viable economic safety net for farmers, and that a series of changes is needed to restore dairy producers’ confidence in the program. Mulhern’s full testimony can be found here.

“While MPP was, and is, the right approach for the future of federal dairy policy, the program in its current form does not provide meaningful safety net support to the nation’s dairy farmers,” Mulhern said.

The MPP is designed to allow farmers to insure the gap between milk prices and the cost of purchasing feed for dairy cattle. Farmers can choose to pay higher premiums for additional levels of margin coverage, although a decreasing number have elected that approach as they saw the program underperforming. The MPP will continue to falter “without action by this Congress to move it closer to the program it was originally proposed to be,” Mulhern said.

Since its creation in the 2014 farm bill, the MPP has offered little effective support to dairy farmers, resulting in dwindling participation in the program. To rectify that problem, Mulhern shared with the committee members the recommendations to improve the MPP that NMPF’s Board of Directors unanimously approved earlier this month.

NMPF’s proposal includes a series of adjustments that will affect the way both feed prices (including corn, alfalfa and soybean meal) and milk prices are calculated. The most needed improvement is restoring the feed cost formula to the one originally developed by NMPF, he said. During Congress’s deliberations in 2014, lawmakers implemented a 10-percent cut to the weightings of all three feedstuff components of the MPP feed cost formula, due to what turned out to be an inaccurate budget score from the Congressional Budget Office. The resulting feed formula “understates the price to farmers of producing 100 pounds of milk, thereby overstating the actual margins farmers are experiencing,” Mulhern said, adding that the Agriculture Committee “got the calculation right the first time,” and thus needs to restore the MPP feed formula to its original level. Margins using the current formula are approximately $1 per hundredweight higher than they would be if the original feed formula were in place.

NMPF is also asking that Congress direct the Agriculture Department to obtain more precise data for the prices dairy farmers are paying for corn, soybean meal and hay, while also collecting better data for the price farmers receive for milk. These changes will more accurately reflect the true margin dairy producers are experiencing, Mulhern said.

The other NMPF recommendations include: Improving the affordability of the program’s premiums; changing the timing of payments and annual enrollment to be more farmer friendly; and expanding the use of additional risk management tools, such as the Livestock Gross Margin Program, to complement the risk management offered by the MPP safety net.

“We look forward to working with this committee to enact these changes in the next farm bill,” Mulhern said.

His testimony also addressed an issue of great concern to many in the dairy community: the need for immigration reform. The importance of immigrant workers to the U.S. dairy industry cannot be overstated, Mulhern said. At least 50 percent of the U.S. dairy farm workforce is comprised of foreign-born labor. Because the seasonal H-2A visa program does not apply to dairy farms with a year-round demand for labor, Congress must provide the agriculture industry with an effective guest worker program to meet its future needs, while also providing a way to address current workers with improper documentation.

“Without access to a steady and reliable workforce, our industry will not be able to survive, let alone thrive, in the future,” Mulhern said.

Mulhern also touched on trade’s impact on dairy, which has expanded considerably in the last decade. The United States has gone from exporting less than $1 billion of dairy products in 2000 to a record $7.1 billion in 2014 – an increase of 625 percent. Because of this, Mulhern said, the United States must preserve and enhance successful elements of its free trade agreements, such as its partnership with Mexico, America’s No. 1 dairy export market. The federal government should also work to rectify problematic trade issues, such as Canada’s protectionist attempt to undermine its trade commitments to the United States, and the European Union’s attempts to co-opt the use of common food names like parmesan and feta.

“If we aren’t in the game actively negotiating on these issues, we are ceding ground to our competitors and those looking to make it tougher for us to do business in their markets,” said Mulhern.

Mulhern’s testimony also stressed the need for congressional support for the DAIRY PRIDE Act, introduced by Reps. Peter Welch, Mike Simpson and Sean Duffy in the House, and Sen. Tammy Baldwin in the Senate. The legislation would force the U.S. Food and Drug Administration to enforce its long-standing rules defining the composition of products that use the term “milk.”

Mulhern said that plant-based alternatives lack real milk’s consistent level of nutrition, and that in the absence of proper labeling enforcement, increasing numbers of nutritionally inferior dairy imitators will lead to confusion in the marketplace.

WASHINGTON, D.C. – As Congress begins its deliberations on the next farm bill, improvements to the dairy Margin Protection Program must be a top priority for lawmakers, said Jim Mulhern, president and CEO of the National Milk Producers Federation, who spoke today before the House Agriculture Committee.

During the farm bill hearing on Capitol Hill, Mulhern told committee members that the dairy Margin Protection Program (MPP) is failing to live up to its intended role as a viable economic safety net for farmers, and that a series of changes is needed to restore dairy producers’ confidence in the program. Mulhern’s full testimony can be found here.

“While MPP was, and is, the right approach for the future of federal dairy policy, the program in its current form does not provide meaningful safety net support to the nation’s dairy farmers,” Mulhern said.

The MPP is designed to allow farmers to insure the gap between milk prices and the cost of purchasing feed for dairy cattle. Farmers can choose to pay higher premiums for additional levels of margin coverage, although a decreasing number have elected that approach as they saw the program underperforming. The MPP will continue to falter “without action by this Congress to move it closer to the program it was originally proposed to be,” Mulhern said.

Since its creation in the 2014 farm bill, the MPP has offered little effective support to dairy farmers, resulting in dwindling participation in the program. To rectify that problem, Mulhern shared with the committee members the recommendations to improve the MPP that NMPF’s Board of Directors unanimously approved earlier this month.

NMPF’s proposal includes a series of adjustments that will affect the way both feed prices (including corn, alfalfa and soybean meal) and milk prices are calculated. The most needed improvement is restoring the feed cost formula to the one originally developed by NMPF, he said. During Congress’s deliberations in 2014, lawmakers implemented a 10-percent cut to the weightings of all three feedstuff components of the MPP feed cost formula, due to what turned out to be an inaccurate budget score from the Congressional Budget Office. The resulting feed formula “understates the price to farmers of producing 100 pounds of milk, thereby overstating the actual margins farmers are experiencing,” Mulhern said, adding that the Agriculture Committee “got the calculation right the first time,” and thus needs to restore the MPP feed formula to its original level. Margins using the current formula are approximately $1 per hundredweight higher than they would be if the original feed formula were in place.

NMPF is also asking that Congress direct the Agriculture Department to obtain more precise data for the prices dairy farmers are paying for corn, soybean meal and hay, while also collecting better data for the price farmers receive for milk. These changes will more accurately reflect the true margin dairy producers are experiencing, Mulhern said.

The other NMPF recommendations include: Improving the affordability of the program’s premiums; changing the timing of payments and annual enrollment to be more farmer friendly; and expanding the use of additional risk management tools, such as the Livestock Gross Margin Program, to complement the risk management offered by the MPP safety net.

“We look forward to working with this committee to enact these changes in the next farm bill,” Mulhern said.

His testimony also addressed an issue of great concern to many in the dairy community: the need for immigration reform. The importance of immigrant workers to the U.S. dairy industry cannot be overstated, Mulhern said. At least 50 percent of the U.S. dairy farm workforce is comprised of foreign-born labor. Because the seasonal H-2A visa program does not apply to dairy farms with a year-round demand for labor, Congress must provide the agriculture industry with an effective guest worker program to meet its future needs, while also providing a way to address current workers with improper documentation.

“Without access to a steady and reliable workforce, our industry will not be able to survive, let alone thrive, in the future,” Mulhern said.

Mulhern also touched on trade’s impact on dairy, which has expanded considerably in the last decade. The United States has gone from exporting less than $1 billion of dairy products in 2000 to a record $7.1 billion in 2014 – an increase of 625 percent. Because of this, Mulhern said, the United States must preserve and enhance successful elements of its free trade agreements, such as its partnership with Mexico, America’s No. 1 dairy export market. The federal government should also work to rectify problematic trade issues, such as Canada’s protectionist attempt to undermine its trade commitments to the United States, and the European Union’s attempts to co-opt the use of common food names like parmesan and feta.

“If we aren’t in the game actively negotiating on these issues, we are ceding ground to our competitors and those looking to make it tougher for us to do business in their markets,” said Mulhern.

Mulhern’s testimony also stressed the need for congressional support for the DAIRY PRIDE Act, introduced by Reps. Peter Welch, Mike Simpson and Sean Duffy in the House, and Sen. Tammy Baldwin in the Senate. The legislation would force the U.S. Food and Drug Administration to enforce its long-standing rules defining the composition of products that use the term “milk.”

Mulhern said that plant-based alternatives lack real milk’s consistent level of nutrition, and that in the absence of proper labeling enforcement, increasing numbers of nutritionally inferior dairy imitators will lead to confusion in the marketplace.

###

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.

MEXICO CITY –The leaders of three major U.S. dairy organizations Wednesday promised to continue a strong commitment to their time-tested partnership with Mexico’s dairy industry and consumers.

“We have always seen Mexico as a partner first and a customer second,” U.S. Dairy Export Council (USDEC) President and CEO Tom Vilsack told Mexican dairy leaders attending the National Dairy Forum in Mexico City. “That’s why we intend to continue working with you and your industry to expand the consumption of dairy products in a way that benefits both countries.”

“Mexico is our friend, ally and most important trading partner,” said Jim Mulhern, President and CEO of the National Milk Producers Federation. “Our goal this week in visiting Mexico is to communicate our steadfast commitment to our partnership with the Mexican industry, even as we continue to explore ways to deepen that relationship by working on issues of mutual benefit.”

“The United States proudly provides the majority of imported dairy products to Mexican consumers,” said Michael Dykes, D.V.M., President and CEO of the International Dairy Foods Association, which represents dairy food companies and their suppliers. “We strongly believe that it’s in the best interest of both countries to preserve and enhance our excellent trade relationship, now and in the future.”

Vilsack and Mulhern spoke at the Femeleche conference here, which brought together Mexican dairy industry leaders, farmers and government officials. As part of the coordinated message of collaboration and partnership with Mexico, the three CEOs of the leading U.S. dairy policy organizations are also meeting with a variety of government officials, including the Mexican Minister of Agriculture and the U.S. Ambassador to Mexico.

The reassurance from U.S. dairy leaders comes during a time of political uncertainty on both sides of the border.

Since NAFTA became law in 1994, U.S. dairy exports to Mexico have more than quadrupled to $1.2 billion. That makes Mexico the U.S. dairy industry’s No. 1 export market, accounting for nearly one-fourth of all U.S. dairy exports last year.

Put another way, exports to Mexico require the milk of 345,000 American cows. They create approximately 30,000 U.S. jobs, according to USDA, and $3.6 billion in U.S. economic impact.

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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.

The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation’s dairy manufacturing and marketing industries and their suppliers with a membership of nearly 525 companies within a $125-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA’s nearly 200 dairy processing members operate more than 600 manufacturing facilities and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese, ice cream and frozen desserts produced and marketed in the United States. Visit IDFA at www.idfa.org.

ARLINGTON, VA – The National Milk Producers Federation Board of Directors today unanimously approved a series of recommended changes to the dairy Margin Protection Program (MPP) that will restore several key elements first proposed by NMPF during development of the 2014 Farm Bill. These changes to the MPP will ensure an effective safety net for the nation’s dairy farmers – if the recommendations are adopted by Congress.