ARLINGTON, VA – Several crucial items for dairy farmers were approved by Congress in a massive year-end spending bill adopted Friday, including permanent tax relief for agricultural equipment purchases and the prevention of retaliatory tariffs on U.S. dairy products, the National Milk Producers Federation said today.

The must-pass omnibus spending bill for Fiscal Year 2016, coupled with a major tax package, together were used as catch-all vehicles for a number of items important to the dairy sector, including:

• Repeal of Country-of-Origin Labeling (COOL) for beef and pork, the existence of which threatened to generate new tariffs on U.S. dairy products exported to Canada and Mexico;
• A permanent extension of the Section 179 tax credit, which allows farms and other small businesses to write off capital purchases immediately, instead of over time;
• A five-year extension of the 50% bonus depreciation, which allows companies to lower the cost of capital for investment in qualified assets while increasing the cash flow for their businesses.

The House and Senate each approved the combined spending and tax bill on Friday.

“The package features key items that will help make Christmas a little merrier for the nation’s dairy farmers,” said Jim Mulhern, President and CEO of NMPF.  “In particular, the tax measures will help farmers’ budgets in a year when they’ve been squeezed financially by low milk prices.  Making the Section 179 credit permanent is a very welcome outcome after several years of short-term extensions of the provision.”

Mulhern said the COOL repeal was important “to prevent new tariffs on U.S. dairy products at a particularly challenging time for our industry, given the depressed global market.”

“Repealing the six-year-old Country-of-Origin Labeling program for beef and pork prevents the loss of millions of dollars of U.S. dairy exports that would have resulted from the World Trade Organization ruling,” Mulhern said.

The WTO said earlier this month that parts of the COOL labeling program violate international trade rules, and that Canada and Mexico could respond by penalizing U.S. exports by more than $1 billion. Both countries had indicated their intention to include American dairy products on their retaliation lists.

The spending bill omitted other important policy objectives sought by NMPF, including a federal preemption of mandatory state GMO labeling laws; reforms to child nutrition programs to ensure increased access to nutritious dairy options in schools; halting the EPA’s efforts to enforce the Waters of the U.S. (WOTUS) rule; and a proposal creating a manure nutrient recovery tax credit.

Mulhern said NMPF will work with Congress to address these and other issues in the new year.  Senate agriculture leaders have already pledged to work on the reauthorization of the Child Nutrition Act early in 2016, while the WOTUS rule is likely to face continued opposition in Congress, even as its implementation is suspended nationwide for the time being because of a federal court challenge.

###

The National Milk Producers Federation, 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 trusted voice of dairy producers on Capitol Hill and with government agencies. Visit www.nmpf.org for more information.

ARLINGTON, VA – In response to a World Trade Organization (WTO) decision today announcing that Canada and Mexico are authorized to apply a total of over $1 billion in retaliatory tariffs to U.S. exports, dairy producers and exporters renewed their call for Congress to take swift action to eliminate the threat to dairy exports.

“The WTO decision makes it crystal clear that Congress must act immediately to prevent retaliation against the U.S. dairy industry and others whose products could be targeted by Canada and Mexico,” said NMPF President and CEO Jim Mulhern. “At a time of overall softening in the U.S. farm economy due to a drop-off in export demand, we cannot afford further erosion in income resulting from the unnecessary loss of markets that would result from the WTO sanctions.”

The WTO decision establishes the level of retaliation tariffs that Canada and Mexico will shortly be given final authorization to levy against a wide range of U.S. exports due to a WTO finding that parts of the U.S. country-of-origin labeling law violate international trade rules. U.S. dairy products are expected to be among the mix of items targeted for retaliation.

In anticipation of today’s announcement, the National Milk Producers Federation and the U.S. Dairy Export Council last week urged House and Senate leaders to head off the prospect of damaging new tariffs hitting dairy exports to Canada and Mexico. The groups’ letter asked Congress to include a legislative resolution for the COOL dispute in the massive year-end spending bill that has been under negotiation on Capitol Hill.

At this stage, after one more perfunctory approval step, the two countries could activate their tariff penalties as early as this month.

“Retaliatory tariffs would back up exports further onto the U.S. market during a time of overly abundant milk supplies,” added USDEC President Tom Suber. “U.S. dairy producers and processors cannot lose this chance to avoid considerable damage to the export markets they have invested so heavily in developing in recent years.”

“Retaliation against American dairy products would come at a particularly harmful time for our industry given the depressed global dairy market,” said Mulhern. “Multiple cooperatives have already faced an oversupply of milk this year.”

Canada and Mexico are two of the largest U.S. export markets. Together, they import more than $2 billion in U.S. dairy products annually.

###

The National Milk Producers Federation, 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 nearly 32,000 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 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 U.S. Dairy Export Council prohibits discrimination on the basis of age, disability, national origin, race, color, religion, creed, gender, sexual orientation, political beliefs, marital status, military status, and arrest or conviction record. www.usdec.org.

The highway transportation bill signed by President Obama last Friday includes a provision allowing milk trucks in some states to carry more dairy products without unloading some of their shipment at state borders – a development that will benefit dairy farmers and cooperatives.

The bipartisan amendment, supported by NMPF, was sponsored by House Transportation and Infrastructure Committee members Richard Hanna (R-NY) and Elizabeth Esty (D-CT) and championed by committee member Reid Ribble (R-WI). It gives states the option to issue permits to milk haulers to increase their truck weights beyond Interstate Highway System limits. The permits, however, would still need to comply with each state’s trucking laws.

NMPF and the International Dairy Foods Association hailed inclusion of the dairy truck amendment as benefiting consumers as well as milk producers and processors.

“This provision recognizes the specific challenges in transporting milk,” said NMPF President and CEO Jim Mulhern. “Because both the supply of milk coming from farms, and the needs of processing plants, can fluctuate unpredictably, handling requirements sometimes conflict with limits on truck weights.”

“It’s great to see Congress support something beneficial to our producers,” Mulhern added. He indicated the provision will result in fewer trucks on the road, cutting costs for producers and processors and, ultimately, for consumers.  

NMPF is currently working hard on Capitol Hill on a handful of other legislative items important to dairy producers.  The following items may also be approved by Congress in the final weeks of its 2015 session:

• Extension of the Section 179 tax credit, which allows farmers and small business to write off capital purchase immediately instead of over time.
• Consideration of a biogas and resource recovery tax credit for farms which invest in nutrient recovery technologies that will remove valuable nutrients while mitigating the environmental impact of the farm operation.
• Repeal of the Country of Origin Labeling for meat, which is threatening to trigger damaging new tariffs on U.S. dairy products exported to Canada and Mexico [see story below].
• A requirement that the Agriculture Department act to stop the decline in milk consumption in schools, which could see a return of low-fat chocolate milk to cafeterias.
• Language exerting federal pre-emption over state laws requiring the labeling of foods with genetically modified ingredients.
• Legislation blocking the implementation of the controversial Waters of the U.S. regulation that is temporarily suspended by a court ruling.

Most of these items are candidates for inclusion in a massive year-end spending bill Congress is expected to pass before adjournment for the year. 

With the World Trade Organization announcing today that Canada and Mexico can slap $1 billion in new tariffs against U.S. exports, NMPF is pushing Congress to fix the country-of-origin labeling law for meat as soon as possible.  The WTO said Monday morning that Canada may impose retaliatory tariffs of up $782 million, and Mexico may enforce $228 million in tariffs, on imported U.S. products to recoup damages caused by U.S. country-of-origin labeling rules for meat.

NMPF has been working with others in the dairy industry to urge the House and Senate to fix the COOL problem as part of the massive, year-end federal spending bill expected to be completed in the coming week. NMPF members are encouraged to contact their Capitol Hill representatives, stressing the importance of a fix as soon as possible in order to avoid the imposition of retaliatory tariffs on dairy sales to two of the U.S.’s largest export markets.

The WTO ruled against the U.S. meat labeling program last spring, saying Canada and Mexico had the right to respond with retaliatory tariffs on U.S. exports. American dairy products have been on Canada’s target list for retaliation, and the two countries could begin imposing new tariffs as soon as this month. The tariffs will come at a difficult time for U.S. exporters, who have faced a more challenging environment in 2015.

The conversation over genetically modified organisms flared up at the end of November, when the FDA made several big announcements on the issue. Most notably, it rejected a consumer activist petition seeking mandatory labeling of foods made with genetically modified ingredients, and then released its own recommendations on the voluntary labeling of GMO foods.

In its reason for the rejection, FDA said the petition did not provide enough evidence to show that foods derived from genetically modified ingredients present any different or greater safety concerns than foods developed traditionally.

By releasing its own recommendations for voluntary labeling, FDA said it recognized the desire of some consumers to know what goes into their food.

“These guidances provide recommended actions for manufacturers who may wish to voluntarily label their products with information about whether the foods contain ingredients from GE sources,” the agency said.

NMPF applauded both announcements in a statement.

“FDA’s rejection of the petition is a strong reaffirmation of the sound science policy underlying FDA’s approval process,” NMPF said. “Only products found to be safe for human or animal use should be approved. And if they are approved as safe, there is no basis for mandatory labeling.”

FDA also announced that it had approved genetically engineered salmon for human consumption, saying that the modified salmon is as nutritious and safe to eat as non-GMO salmon. This is the first GMO animal to be declared edible.

NMPF is looking for feedback on the third update to its reference manual from those participating in the National Dairy FARM (Farmers Assuring Responsible Management) Program. Open to all dairy farmers, co-ops and processors, the FARM Program sets the highest standards for dairy animal care. The reference manual, which outlines best management practices central to the program, is reviewed and reissued every three years.

This fall, NMPF’s Animal Health and Well-being Committee approved edits to the manual suggested by the FARM Program Technical Writing Group, comprising academics, veterinarians, producers and co-op staff who reviewed the latest research, discussed feedback received from FARM Program evaluators and sifted through recommendations from large dairy customers.

The committee’s draft includes both minor and substantive edits to all 11 chapters of the manual. Those interested in providing comments on the draft Animal Care manual should utilize the comment form.  All comments must be submitted to Emily Meredith, NMPF Vice President of Animal Care by Wednesday, January 6 at 5:00 pm. 

In honor of the first national Antibiotic Awareness Week, NMPF’s FARM Program participated in a social media drive to educate farmers and consumers on the proper use of antibiotics in animals. It also released an updated manual on drug residue prevention.

From Nov. 16-22, the Centers for Disease Control and Prevention and the World Health Organization hosted educational campaigns on antibiotic resistance. FARM focused its campaign on the agriculture sector. The program’s Facebook and Twitter accounts featured graphics, videos and facts about safely administering drugs to sick farm animals.

To coincide with this event, the FARM Program released its 2016 Milk and Dairy Beef Drug Residue Prevention Manual – one of the key components of the program. The manual offers a concise review of appropriate antibiotic use in dairy animals, and can also be used as an educational tool for farm managers as they develop their best management practices necessary to avoid milk and meat residues.

“We know that there is increased attention to the use of medicines in livestock, and in order to maintain the ability to use those products to treat sick animals, we have to demonstrate that we are using them judiciously,” said Jim Mulhern, President and CEO of NMPF.

NMPF has opposed the Food and Drug Administration’s latest proposal to revise the Nutrition Facts Panel to include an amount and percent Daily Value for “added sugars” on the label for consumers.

In comments sent to the agency in October, NMPF disagreed with the FDA that its proposal will help consumers make better food choices and improve their diets, noting the FDA itself has concluded there is no scientific basis for a recommended daily intake for added sugars.

As with comments submitted last summer on FDA’s original proposal, NMPF again emphasized that the FDA incorrectly and inappropriately extended the definition of “added sugars” to include the lactose in many concentrated and dried dairy ingredients, even though lactose is a naturally-occurring sugar and is not used primarily as a sweetener.

“FDA’s proposed definition of ‘added sugars’ falls woefully short in this regard and leaves our industry confused and ill-served . . . .” the Federation said. It encouraged FDA to rewrite its added sugars definition “or risk significant consumer misunderstanding . . . ” 

On Nov. 20, NMPF conducted its first Food Safety Modernization Act (FSMA) webinar. Clay Detlefsen, Senior Vice President of Regulatory & Environmental Affairs, and Beth Briczinski, Vice President of Dairy Foods & Nutrition, presented on the Preventive Controls for Human Food (PCHF) rule — the most significant of the seven major FSMA rules.

The preventive controls rule requires human food facilities to develop food safety plans that indicate any problems that could affect the safety of their products, then outline steps the facility would take to minimize the likelihood of those problems occurring.

Detlefsen and Briczinski outlined the rule’s requirements and provided some background on how it was developed, emphasizing that there is still considerable uncertainty about how effective and burdensome the PCHF rule will be. A much better assessment will be made when FDA releases numerous guidance documents on hazard analysis, preventive controls, allergen control and environmental monitoring, they said. However, there is no set date for the release of these documents.

NMPF plans to replicate this educational tool for other FSMA rules and guidance documents in the coming months, to ensure that cooperatives are well informed on the implications of the FSMA regulations.