FMMO Persistence Pays off for Farmers

  • USDA’s recommended FMMO decision incorporates NMPF proposals
  • Economics team member provided market outlooks and FMMO process updates across the country

NMPF’s Joint Economics Unit saw intense Federal Milk Marketing Order modernization in 2024, especially in the year’s earlier months. NMPF submitted its final legal brief to USDA in March, emphasizing that farmers are the reason the order system exists and that they should be the priority as USDA considers its final decision.

USDA released its recommended FMMO modernization plan July 1, agreeing in large part with the underlying principles of NMPF’s proposal. USDA’s biggest difference with NMPF was its establishment of a Class I mover for extended shelf-life products, which consists of the average of with an adjustable mover, even as most of the U.S. milk supply would revert to the “higher-of” formula in effect until 2019, as NMPF and its members advocated. NMPF-USDEC Joint Economics team members explain USDA’s recommended decision here.

Members of NMPF’s FMMO task force have reconvened to write comments on the recommended decision, which will be handed in by the Sept. 13 comment deadline for all stakeholders. USDA will review submissions and issue a final decision in November, followed by a producer referendum likely near the end of the year. Any changes will be implemented in early 2025, ending the formal FMMO modernization process.

Even as FMMO consumed team energy, members of the economics team traveled the country in 2024, providing expertise on changing market conditions throughout the year and updates on the FMMO modernization process.

Stephen Cain, senior director of research and economic analysis for NMPF, and Dr. Peter Vitaliano, vice president for economic policy and market research for NMPF, presented updates on the federal order modernization efforts to the NMPF Young Cooperators in February, the Southeast Milk Inc., Leadership Experience (SMILE) in May, and to the NMPF Board of Directors periodically. In August, Cain travelled to Detroit to update Michigan Milk Producers Association on the next steps in the process.

Producers were also updated on current and changing market conditions through 2024. Will Loux, senior vice president of global economic affairs for NMPF and USDEC, presented a domestic and export market outlook to South Dakota Dairy Producers in January and Dairy Farmers of America in July, as well as an update on the state of the dairy industry to the Idaho Milk Processors Association in August.

The economics team also met with the boards of United Dairymen of Arizona, Agri-Mark, Land O’Lakes, and Michigan Milk Producers Association to provide an update on Cooperatives Working Together renewal and modernization efforts. Cain and Dr. Vitaliano also provided outlook presentations for the National Ice Cream Mix Association annual meeting in January and to the American Butter Institute in April. Dr. Vitaliano also gave a butter-specific presentation to the joint American Dairy Products Institute-American Butter Institute annual conference in April.

Amid this backdrop, the dairy economy itself showed signs of improvement. The Dairy Margin Coverage Program, the main federal safety net for U.S. milk producers, saw its fourth highest ever margin in July, at $12.23/cwt, with the all-milk price at $22.80/cwt. End of August dairy and grain futures indicated that the DMC margin would average around $12.25/cwt for all of calendar year 2024.

Editor’s Note

NMPF’s September newsletter sums up the work its dedicated staff have done for dairy farmers and the cooperatives they own so far this year, heading into the critical election season. With August a slower month in Washington in late summer because of the annual congressional recess, Labor Day week is a great chance to take stock of what’s been done so far.

Thank you for reading this team-by-team update of NMPF’s work so far this year and that you find it useful. We strive to lead dairy toward its best possible prospects for policy progress, no matter who may win in November. Thank you, again, for this opportunity to serve.

Dairy Deserves Prominence in the Dietary Guidelines

The federal government is pressing ahead in crafting a new iteration of the Dietary Guidelines for Americans, the twice-a-decade guide to science-based advice on what to eat and drink for health and well-being. The guidelines also inform federal nutrition programs, such as school meals and food assistance.

Dairy, to no one’s surprise, is critical to the discussion. For the sake of our nation’s health, this discussion has to be done right, with proper deliberation and dairy maintaining its role as a central component of healthy eating.

A committee of experts is reviewing the latest evidence and preparing recommendations for the next iteration of the guidelines, due next year. As we said in the comments we submitted to that committee: Dairy foods are essential for optimal nutrition and health. Foods such as milk, cheese and yogurt provide a unique package of nutrients American often lack, such as calcium, vitamin D, potassium, protein and iodine. Dairy also reduces chronic disease risk, lowers blood pressure, improves blood sugar control, and protects bone health. And dairy is especially important for children, who need adequate calcium and protein for growth and development.

When the government released its current guidelines in 2020, it noted that dairy is under-consumed by 89 percent of the population. Dairy’s role as a critical nutrient provider, and its underconsumption, is why dairy needs to continue as its own food group, with three recommended servings per day, in the 2025 guidelines. That standard is consistent with current practice, reflected in the nutrition guidance of many other countries and health organizations, and supported by decades of scientific research. Guidelines that don’t give dairy its due simply would not be credible – not when the science, the general public and the mainstream nutrition community all recognize that, without dairy, health outcomes suffer and families, especially families with children, don’t get the nourishment they need.

Maintaining dairy’s place at the bedrock of proper nutrition is of paramount importance as the guidelines are under review. NMPF is fighting for dairy’s necessary pride of place through our public comments, our meetings at all levels of decision-making, our partnerships with allied organizations, and our daily fight against anti-dairy misinformation in media interviews and outreach. Because, as is inevitable in Washington, the guidelines are the subject of intense advocacy efforts, often by groups that have goals in mind other than better nutrition.

For example, some vegan and environmental activists are pushing for replacing some dairy foods with plant-based alternatives in the guidelines, all in the name of reducing greenhouse gas emissions. Even setting aside the flawed sustainability arguments, the answer to that is no. Plant-based products are not nutritionally equivalent to dairy foods and do not have the same health effects. In fact, most plant-based alternatives are low in protein and have added sugars, oils, and synthetic nutrients that are in no way nutritionally equivalent to dairy in terms of human health.

Children who consume plant-based alternatives instead of dairy may be at risk of nutritional deficiencies, growth impairment, and bone fractures. Pregnant women who avoid dairy may not get enough iodine, which is essential for fetal brain development. Three of the four nutrients identified in 2020 as issues of public concern because of their widespread under-consumption — specifically vitamin D, calcium and potassium — are abundant in dairy, but not so much in plant-based products. And low-income consumers who choose plant-based alternatives may face higher food costs and lower nutrient density.

And when we talk about low-income consumers, inevitably we need to talk about equity. Dairy foods are widely available, affordable, and culturally acceptable for most Americans. They’re also a major component of federal nutrition programs, such as school meals and WIC, which serve millions of low-income and vulnerable Americans and help ensure that children and families have access to nutritious foods that support their health and learning.

Dairy is an excellent nutritional option for populations who face disproportionate rates of chronic diseases, such as hypertension, diabetes, and osteoporosis. And dairy foods can accommodate different preferences and needs, such as lactose intolerance, vegetarianism, or environmental concerns.

Contrary to the claims of misguided social-justice activists that dairy products can’t possibly serve diverse populations because of intolerance, the reality is that lactose-free and low-lactose dairy products, such as lactose-free milk, yogurt, and hard cheeses, can provide the same nutrients and benefits as regular dairy. For all these reasons and more, dairy needs to maintain its prominence in American diets, in federal programs, and in the Dietary Guidelines for Americans.

The guidelines also need to be the product of thoughtful, science-based, and careful deliberations. Another threat facing dairy is that, as election-year politics combine with activist agendas, a devil’s brew of flawed science and ill intentions could result in hastily released guidelines that do a disservice to American health and destroy the very legitimacy of the guidelines. This is the worst possible outcome of all – and it’s one we’re guarding against as we work on this issue through the fall.

Dairy foods are essential for optimal nutrition and health. They provide a unique package of nutrients, they’re an equitable option for health and wellness, and they’re widely available, affordable, and culturally acceptable for most Americans. They deserve thoughtful consideration and a prominent place in the dietary guidelines, as well as in our plates and cups.


Gregg Doud

President & CEO, NMPF

 

NMPF Finds (Ice Cream) Thrills on Blueberry (Capitol) Hill Event


July is National Ice Cream Month – and National Blueberry Month. That observation was the root of a first-ever joint Ice Cream Social with the North American Blueberry Council, held July 22 in the House Agriculture Committee hearing room (and its outdoor patio). DFA provided Friendly’s Ice Cream, here gladly consumed by (l to rt) NMPF’s Paul Bleiberg and Tony Rice, North American Blueberry Council’s Alyssa Houtby and NMPF’s Peter Vitaliano and Alan Bjerga.

Morris Represents Dairy at Congressional Briefing; Saffran Co-Hosts Thought Leaders

NMPF Executive Vice President for Trade & Global Affairs Shawna Morris represented NMPF at a House Agricultural Trade Caucus briefing for Congressional staff on July 22, underscoring the critical role of trade for U.S. dairy and agriculture. She was joined by representatives from the American Soybean Association, the North American Blueberry Council, and the National Grain and Feed Association.

The event drew over 60 congressional staff in the inaugural briefing for the caucus, which NMPF helped launch in January.

Morris emphasized the benefits of market-opening trade agreements for the U.S. dairy industry and called for more proactive congressional engagement in trade policy, highlighting the growing tariff disadvantages faced by U.S. dairy exporters as the European Union and New Zealand continue to pursue agreements advantageous to their exporters. She also touched on examples of the various trade agreement compliance and non-tariff barrier challenges the U.S. dairy industry is facing around the world.

This session marked the first in a series to be hosted on educating congressional staff on agricultural trade policy issues. And the event was one of several highlights of NMPF staff outreach in July.

Sage Saffran, NMPF’s manager for sustainability initiatives co-hosted a session at Midwest Dairy’s Sustainability Thought Leader Symposium in Rosemont, IL on July 30 with Suzanne Vold, owner of Dorrich Dairy near Glenwood, MN. The session detailed the FARM Program’s five program areas, highlighting the standardization of greenhouse gas emission measurement through the FARM Environmental Stewardship tool.

Beverly Hampton-Phifer, NMPF’s senior director of animal care, spoke with The Center for Dairy Excellence on July 12 during its monthly “Protecting Your Profits” webinar to share an overview of the FARM Program and explain how FARM serves dairy farmers.

Hampton-Phifer also discussed Animal Care Version 5 updates that launched July 1, in addition to sharing how adhering to FARM guidelines can effectively mitigate risk for dairy producers.

Science Based Targets Initiative Informational Session Recap

NMPF, the Innovation Center for U.S. Dairy and the International Dairy Foods Association jointly hosted July 11 a meeting with individuals from the Science Based Targets initiative, SBTi, to discuss questions that U.S. dairy has in interpreting and implementing SBTi standards.

Diana Farmer, North American Regional Lead, and Kyra Power, North America Engagement Manager, joined from SBTi, addressing topics such as:

  • SBTi governance and opportunities for stakeholder participation;
  • SBTi FLAG standards (https://sciencebasedtargets.org/sectors/forest-land-and-agriculture);
  • SBTi consideration of market instruments (e.g. carbon credits, and others)
  • SBTi target setting and validation process; and
  • SBTi develops standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what is needed to keep global heating below 1.5 degrees C and reach net-zero by 2050. Companies may use FARM Environmental Stewardship aggregate data in assessing progress toward their SBTi targets.

The FARM Program aims to stay informed of the corporate GHG accounting standards, like SBTi, to ensure FARM Environmental Stewardship remains useful and relevant for aggregating GHG data.

NMPF Advances Dairy Export Prospects in South America

NMPF’s Jaime Castaneda joined USDEC leadership and staff in Brazil July 28-31 to explore market opportunities and address trade barriers for U.S. dairy products. While there, Castaneda met with key executives, agribusiness leaders, and policymakers in São Paulo and Brasília, Brazil. The discussions in Brazil focused on the quality, safety, and sustainability of U.S. dairy products and the tariff and nontariff barriers to reaching the market.

The group then traveled on to Argentina for additional meetings Aug. 1-3.

A key focus of the mission was the signing of two Memoranda of Understanding (MOUs). NMPF and USDEC established a new MOU with Abraleite in Brazil to foster collaboration and strengthen trade relationships. The organizations also plan to renew an existing MOU with Sociedad Rural Argentina, continuing their commitment to cooperation and support for U.S. dairy exports and a unified voice at international gatherings.

NMPF Touts Dairy’s Importance in Dietary Guidelines Comments

NMPF underscored dairy’s important role in American diets in comments submitted July 26 to the Dietary Guidelines Advisory Committee (DGAC). Milk supplies 13 essential nutrients and dairy is a good or excellent source of nutrients that continue to be identified as nutrients of public health concern—calcium, vitamin D and potassium.

NMPF stated in its comments that dairy should remain a distinct food group, with at least three servings recommended for older children and adults, and corresponding amounts for younger children in the next Dietary Guidelines for Americans (DGA). NMPF also argued against suggestions that plant-based alternatives be included as allowable substitutes for dairy beyond fortified soy, noting that little to no science supports the nutritional equivalence of plant-based alternatives.

“Dairy foods have been well-studied over decades, and the evidence for the benefits of the dairy food matrix, including nutrient bioavailability and impacts on health outcomes, is well-established,” the comments state. “We are aware of few if any studies that have similarly tracked and identified health outcomes for highly-processed plant-based dairy alternatives. These products vary tremendously in their nutrient content, and in contrast to dairy foods, FDA has not established Standards of Identity for any of the alternatives, so there is no requirement that they meet any particular nutrient content.”

NMPF also encourages the DGAC to review the growing body of science that shows dairy foods have beneficial or neutral effects on chronic disease risk at all fat levels.  “The scientific evidence supports removing low-fat and fat-free limitations on dairy recommendations, although consumers should certainly be able to choose these varieties if they enjoy them or they need to limit caloric intake,” NMPF said.

The Dietary Guidelines for Americans has significant impacts on nutrition in the United States because it forms the basis of federal nutrition policy and programs; it also helps guide health promotion and disease prevention initiatives at the federal, state and local levels. The Dietary Guidelines Advisory Committee is expected to release its scientific report with recommendations to USDA and HHS for updating the DGA in the fall.

FARM Program Hosts 2024 Evaluator Conference

With FARM Animal Care and Workforce Development updates now in effect, the National Dairy Farmers Assuring Responsible Management (FARM) Program gathered program Evaluators to connect, learn about recent program updates and hear from allied industry subject matter experts at its annual Evaluator Conference, held this year July 22-24 in Lexington, KY.

This was the first in-person evaluator conference since 2021, with 50 evaluators and 29 member organizations represented.

Attendees heard from industry professionals on topics surrounding the Animal Care, Environmental Stewardship, Antibiotic Stewardship, Biosecurity and Workforce Development program areas, with Animal Care Version 5 and Workforce Development Version 2 launched July 1. President & CEO of the Animal Agriculture Alliance, Hannah Thompson-Weeman, discussed animal welfare trends in state legislatures to kick off the first session for Day 1 of the conference. Participants also heard from American Farm Bureau Federation’s Bailey Corwine on Farm State of Mind, a look into mental health and wellbeing resources for farmers and agricultural workers.

Alltech, which sponsored the conference, welcomed attendees to an evening reception at the Town Branch Distillery to close out the first day. During the reception, Alltech gave a sneak preview of its latest documentary “A World without Cows”, which examines the real economic and environmental impact of cows on our world.

Participants the next day heard from Alltech’s Agolin and Carbon lead Martha Baker on understanding carbon markets and its on-farm applications. Attendees also participated in a townhall discussion surrounding FARM Program’s resources and evaluation system. This was an opportunity for participants to provide feedback and suggestions on current program implementation. To close the conference, attendees enjoyed   optional tours at Ridge Mill Farm and Alltech Headquarters.

Evaluator trainings will continue through 2024 as program participants prepare for evaluations under these new versions.

June DMC Margin Gains $1.14/cwt to $11.66/cwt

The Dairy Margin Coverage Program margin in June was $11.66/cwt after adding $1.14/cwt over the previous month.

The June all-milk price was $22.80/cwt, up $0.80/cwt from May, and the DMC feed cost dropped by $0.34 for the month, mostly on a lower premium alfalfa price. The DMC margin calculated by USDA has risen $2.06/cwt over the past two months, reaching a level well above the threshold at which payments are generated by falling margins.

Futures-based forecasts at the end of July indicate that the DMC margin will average about $11.90/cwt during 2024, $0.40/cwt higher than similar forecasts indicated a month ago, with a peak in October, a sign that producers may have an opportunity to repair battered balance sheets over the next several months.

Special August Board Meeting Will Assess Proposed CWT Improvements

NMPF’s Board of Directors will hold a special, virtual meeting Aug. 22 to review and potentially a package of changes to the Cooperatives Working Together export assistance program, with the goal of implementing the changes on Jan. 1.

NMPF’s Executive Committee approved July 9 a CWT renewal package initially developed and endorsed by NMPF’s CWT Task Force. The renewal process now requires Board approval, after which individual co-ops will determine their support for the program in its new form.

The Board will reconvene at its Oct. 21 meeting to evaluate the level of support for the program going into 2025.

The package approved by the CWT Task Force and the Executive Committee includes updates in the areas of Product Mix; Bid Process Adjustments; and Market Development. The recommendations include updates to or new resources in the following program areas:

  • All cheese varieties will be eligible for CWT’s price gap support
  • CWT will create targeted pilot programs to address tariff coverage for value-added skim milk powder sales to Southeast Asia, and a target market premium for cheese sales to Central America & the Caribbean
  • CWT will offer fat-equivalent support for the following products: ESL/aseptic fluid milk;  evaporated/condensed milk; and ice cream
  • CWT will increase its operating program bid flexibility to extend eligible delivery periods to 12 months, and remove volume limits on a trial basis
  • CWT staff will provide increased insight on bid acceptance parameters, sharing a short summary with weekly offers explaining shifts in support levels
  • CWT will create an advisory group to provide strategic direction and market development support, with a Phase I emphasis on pre-competitive support that provides opportunities for all cooperatives to participate.


July-to-Date CWT-Assisted Export Sales Top 5.8 Million Pounds

 

 

CWT member cooperatives secured 52 contracts in July with one week still outstanding for the month. These contracts added 5.8 million pounds of product to CWT-assisted sales in 2024. In milk equivalent, equal to 56.8 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean and Oceania and will be shipped from July 2024 through January 2025.

Full-month numbers were not available at the time of publication.

Exporting dairy products is critical to the viability of dairy farmers and their cooperatives across the country. Whether or not a cooperative is actively engaged in exporting cheese, butter, anhydrous milkfat, cream cheese, or whole milk powder, moving products into world markets is essential. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome U.S. dairy’s trade disadvantages.

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.