Author: Theresa Sweeney

US-EU Trade Discussion Features NMPF’s Morris Representing Dairy

Posted on by Theresa Sweeney

Shawna Morris, Executive Vice President for Trade Policy and Global Affairs, attended U.S. Trade and Technology Council (TTC) events on Jan. 30-31 representing U.S. dairy in discussions via the Transatlantic Initiative on Sustainable Trade (TIST) work program.

The European Commission launched the initiative last May to boost bilateral engagement with the United States and accelerate the transition to a climate-neutral economy. Morris participated in a high-level plenary session, a smaller breakout session, and a Jan. 30 welcome reception. While there she focused on the need to ensure EU agricultural policymaking is not wielded as a barrier to trade, encouraging the European Union to focus on collaboration on shared objectives rather than prescriptive dictates that would deepen U.S.-EU agricultural trade tensions.

NMPF Advocates for Common Names Protections in USTR Comments

Posted on by Theresa Sweeney

NMPF, in partnership with the U.S. Dairy Export Council (USDEC), submitted comments to the U.S. Trade Representative Jan. 24 that emphasized the U.S. government’s need. to secure commitments from trading partners to assure the future use of certain generic cheese terms. The comments, part of NMPF’s ongoing mission to protect the rights of U.S. cheesemakers to use common names like “parmesan” and “feta” worldwide, were submitted in response to the agency’s request for input on its annual Special 301 review of intellectual property trade issues.

NMPF and USDEC’s submission supported more comprehensive comments from the Consortium for Common Food Names (CCFN), which NMPF’s trade policy team staffs. CCFN reiterated how producers on-the-ground are negatively affected when the European Union confiscates common names, and detailed the specific markets that the administration should prioritize work in to preserve export opportunities.

Ag Trade Caucus Launches as NMPF Pushes Export Opportunities

Posted on by Theresa Sweeney

NMPF Trade Policy Director Tony Rice joined Farmers for Free Trade for Jan. 31 and Feb. 1 meetings with key lawmakers and staff to promote a more proactive U.S. trade agenda. The meetings coincided with the Jan. 31 launch of the new Congressional Ag Trade Caucus, inspired by the farmer group to elevate the importance of trade policy that levels the global playing field for America’s dairy and ag producers.

Rice spoke with congressional staff about the need for new market access for American dairy exports, relaying the industry’s concern that U.S. exporters are seeing growing disadvantages versus America’s competitors. The discussions also offered the opportunity for NMPF and Farmers for Free Trade to educate newer congressional staffers from agricultural districts about the value of exports to their districts and constituents.

FARM Animal Care Kicks Off Version 5 Training

Posted on by Theresa Sweeney

In preparation for new standards that go into effect July 1, the National Dairy FARM Program hosted the 2024 FARM Animal Care Version 5 trainer course Denver, CO from Jan. 9-11.

Nineteen trainers reviewed Version 5 revisions, discussed evaluation best practices, and calibrated animal observation scoring on a nearby farm. The trainers will manage training sessions to FARM’s 400 Animal Care evaluators throughout 2024. The first of those sessions for evaluators are Feb. 13-15 in Minneapolis, MN. That meeting will have training content for both seasoned and first-time FARM Animal Care evaluators.

Visit the FARM Program website to learn more about the FARM Animal Care Program evaluator expectations. Check back throughout Q1, as FARM will continue to release more Version 5 specific materials including an evaluation prep guide and reference manual.

The FARM Program’s aim is to continue to proactively communicate updates and prepare cooperatives, processors, and farmers during the first half of 2024, before new FARM Animal Care Version 5 standards are implemented.

NMPF Submits Comments on Voluntary Added Sugars Reduction

Posted on by Theresa Sweeney

NMPF emphasized the need for a realistic and balanced approach to reducing added sugars in comments submitted to FDA Jan. 22. The comments, which supported the agency’s overall goal to improve healthful eating in the US, but urged for added sugars reductions to be voluntary, were a follow-up to an FDA listening session in which NMPF participated.

NMPF cited dairy’s successful work in voluntarily reducing added sugars in flavored school milk in its comments. “The dairy industry’s proactive, voluntary reduction of added sugars in school milk demonstrates the power of industry-led initiatives in this area,” it said in the comment. “Industry leaders came together around reducing added sugars, investing the time, energy, and resources to reformulate products into healthier options that people still enjoy.”

NMPF also pointed out that modest amounts of added sugars can make nutritious food more palatable, thus encouraging consumption and improving health. The American Academy of Pediatrics and the American Heart Association have both noted that using small amounts of added sugars has effectively increased vital nutrient intakes in a way that improves overall diet quality without increasing calories to unhealthy levels.

FDA Moves Toward Improved Feed Ingredient Reviews

Posted on by Theresa Sweeney

In an important step to modernize its review and approval of animal feed ingredients, the Food and Drug Administration said Feb. 2 it’s withdrawing long-standing policy that classifies animal feed ingredients as animal drugs if making claims on production, environment, or food safety-related benefits.

NMPF has long advocated for FDA to rescind this policy to help pave the way for faster review and approval of animal feed ingredients that can reduce enteric methane emissions. A streamlined approval process, specifically one that would allow feed additives to be reviewed as foods rather than as drugs, is important for dairy farmers seeking to maintain global competitiveness as trade rivals adopt such ingredients, which currently are not allowed in the United States because of lengthy regulatory hurdles.

FDA also made clear that it supports the legislative authority embodied in the NMPF-backed Innovative FEED Act (H.R. 6687, S. 1842), which directs the agency to review enteric-reducing and other products using its Food Additive Petition process. That shift would represent an improvement over the current approach of reviewing such additives as drugs.

NMPF is urging dairy allies to write members of the House of Representatives to become sponsors for the Innovative FEED Act, which is critical to speeding FDA approval of Elanco’s 3-NOP (Bovaer) and similar future products. This NMPF call-to-action contains a pre-drafted message seeking House member endorsement of the legislation.

NMPF Creates Task Force to Develop CWT Renewal Plan

Posted on by Theresa Sweeney

NMPF established in January a team of cooperative leaders and farmers to develop ideas for the next era of Cooperatives Working Together (CWT) after the current membership funding commitment expires at the end of this year.

This task force, chaired by NMPF Treasurer Pete Kappelman of Land O’Lakes, will focus on identifying and advancing strategies that will enable CWT to maximize its positive affect on farmers’ milk checks while growing U.S. dairy exports. Task force members will re-examine CWT’s role in dairy exports and define what’s needed to expand U.S. dairy sales growth overseas without duplicating existing export efforts.

Others on the task force include:

  • Catherine De Ronde, Agri-Mark
  • Tom Beringer and Scott Tomes, Bongards
  • Rob Vandenheuvel, CDI
  • Monty Schilter, Darigold
  • Michael Lichte and Chris Kraft, DFA
  • Darin Hanson, Foremost Farms
  • Mike John, Maryland and Virginia Milk Producers Cooperative Association
  • Chris Hoeger, Prairie Farms
  • Ashley Ellixson and Robert Chesler, United Dairymen of Arizona
  • Steve Patience, Tillamook

The task force will share preliminary recommendations with NMPF’s Board later this spring, assembling a series of actions for the program after 2024, with the expectation that individual cooperatives will vote to renew their support of CWT (or join the program if they are not currently contributing) by the end of this year.

December DMC Margin Reverses Trend, Drops to $8.44/cwt

Posted on by Theresa Sweeney

The December margin under the Dairy Margin Coverage (DMC) program bucked the trend that began in August of improving milk prices and margins, sliding $1.14/cwt to $8.44/cwt and matching the margin last seen in September. The renewed weakness was due almost entirely to a $1.10/cwt fall in the December all-milk price from November. The December DMC feed cost rose by 4 cents a hundredweight to $12.16/cwt of milk, with higher corn and premium alfalfa hay prices almost offset by a lower soybean meal price.

The average margin for all months of 2023 was $6.70/cwt, effectively tying last year with 2021 for the lowest average calendar-year margin under both the DMC and its predecessor, the Margin Protection Program (MPP). End-of-January futures-based forecasts indicated DMC margins averaging between $10.20/cwt and $11.00/cwt in 2024.

FMMO Hearing Ends with NMPF Unity Strong as Ever

Posted on by Theresa Sweeney

USDA’s longest-ever federal order hearing ended Jan. 30 with NMPF’s comprehensive approach to modernizing milk pricing at the center of industry discussion. With the FMMO update process now moving to its next phase, NMPF leadership remains critical as USDA moves to formulating its own proposal to put before producers.

“NMPF spent more than two years preparing for USDA’s Federal Order hearing, and that preparation paid off,” said NMPF President and CEO Gregg Doud in a statement after the end of testimony and rebuttals. “Our proposals, unanimously supported by our Board of Directors, reflect farmer unity and a good-faith effort to build industry consensus.

“After five months, 12,000 pages of testimony, and almost two dozen separate proposals considered, our plan remains the most comprehensive, coherent, and compelling framework for modernizing a system that’s badly in need of improvement. We look forward to working with USDA and the entire industry in the weeks and months to come, noting that any plan USDA designs will by necessity require complex analysis to result in a proposal that serves diverse farmer needs well.”

Organized discussions of the federal milk-pricing system, which showed strains under the weight of the COVID-19 pandemic and continues to struggle in the face of a changing industry, began with NMPF in 2021. The five-month USDA hearing in Carmel, IN, revolved around NMPF’s suite of proposals for change unanimously adopted by its Board of Directors last year.

The hearing has addressed critical issues for dairy farmers, including the “make allowance” re-imbursing processor costs, component pricing for milk, and the Class I price surface that considers travel expenses. Recent discussions have revolved around the so-called Class I mover, a change to which in 2019 has cost farmers roughly $1.2 billion. Doud called for change to the mover in his statement and in NMPF’s monthly CEO’s Corner column published today.

“We’ll continue to advocate for badly needed changes in areas such as the Class I mover,” he said. “It needs to change back to the previous “higher-of’ formula that served farmers best. The higher-of responds quickly to the marketplace, it helps farmer cash flow, it’s simple to understand, and it would have no real impact on processors who are using the formula to boost their immediate balance sheets, not manage future risk as they claim.”

NMPF and member cooperative staff are currently formulating NMPF’s elaboration and defense of its positions in the hearing to USDA, the first step toward USDA’s own proposal. That’s due in less than two months – and only underscores how much work is left to do in creating a fairer pricing system for farmers, Doud said.

“This final year is the most critical,” he said. “We are excited to continue our leadership, and will, as always, fight for the best approaches to ensure that dairy farms prosper.”

FMMO Modernization Needs to Move – And So Does the Class I Mover

Posted on by Theresa Sweeney

The long, patience-testing — and absolutely necessary – Federal Milk Marketing Order hearing is nearly over.

The longest-ever USDA federal order hearing ended last Tuesday, after roughly 12,000 pages of testimony and nearly two dozen separate proposals considered. Through it all, NMPF’s impressive unity never faltered – our plan remains the most comprehensive, coherent, and compelling plan for modernization of a system that’s showing its creaks after a generation.

Now, the next phase of the arduous process of amending federal orders begins, as USDA begins considering the hearing record and hearing participants have 60 days to elaborate and defend their positions. USDA, of course, will have the final say in crafting its own proposal, but we’re confident our plan will remain the basis of progress, and we look forward to adding information and reinforcing our own arguments in the weeks to come. It’s critical to keep in mind that any plan designed to have national support needs to address diverse interests. That’s why our comprehensive plan covers areas ranging from the Class I price surface and make allowances to component pricing formulas and forward contracting.

One area that’s so important that we’re seeking resolution in the quickest manner possible is the Class I mover, which sorely needs to go back to the “higher-of” formula that served farmers well before the current “average of” approach took effect in 2019.

Processor interests aggressively pushed for the change to the mover in the 2018 Farm Bill. At the time, the adjustment seemed reasonable for farmers too, based on data going back to 2000. However, the lessons of the COVID-19 pandemic, and the current prolonged spread between the Class III and Class IV prices, have shown how poorly the current mover works for farmers in today’s agricultural environment. Milk producer losses are growing, with the amount of money taken from their milk checks soon to surpass $1.2 billion by April – all because of a system that now limits risks for processors while putting potentially unlimited losses on farmer backs.

This is unacceptable, a reality the hearing only made more obvious. While processors continually talked about how important the current mover is for their risk management strategies, no one in months of testimony ever presented definitive proof that such risk management is occurring at any meaningful level. Meanwhile, the processors continue to rake in dollars that would have gone to farmers – and will keep raking it in, by the way, until the mover is changed, a potentially huge financial incentive to work against positive changes for dairy farmers.

Knowing that the current mover isn’t defensible, these groups have suggested a modification to the current approach that’s largely based on a proposal that NMPF developed in 2021 under dire straits, but processors rejected. Their plan would adjust the mover in a backward-looking fashion that would allow farmers to recoup losses years after the fact. That reduces losses over the long term, but it’s cold comfort to farmers whose operations are struggling to live month-to-month and don’t have two years to be made right again. Moreover, it’s now clear that the losses farmers suffered in 2020 were not a one-off fluke.

And thus, given the current difficult times on dairy farms, we’re now pushing hard for the return to the higher-of. It responds quickly to the marketplace, it helps farmer cash flow, it’s simple to understand, and it would have no real impact on processors who are using the formula to boost their immediate balance sheets, not manage future risk as they claim.

Dating to NMPF’s first internal discussion, our path toward FMMO modernization is now nearly three years old. This final year, which, should all required timelines be met, would result in a producer vote roughly one year from now, is the most critical. It’s when, after all the research and talking, USDA will propose a new approach – and farmers will decide. These decisions are likely to shape the future of dairy for the next generation. We are excited to continue our leadership in this critical area, and will, as always, fight for the best approaches to ensure that dairy farms prosper.

Gregg Doud

President & CEO, NMPF

 

NMPF Statement at FMMO Hearing Conclusion

Posted on by Theresa Sweeney

From Gregg Doud, President and CEO, National Milk Producers Federation:

“NMPF spent more than two years preparing for USDA’s Federal Order hearing, and that preparation paid off. Our proposals, unanimously supported by our Board of Directors, reflect farmer unity and a good-faith effort to build industry consensus. After five months, 12,000 pages of testimony, and almost two dozen separate proposals considered, our plan remains the most comprehensive, coherent, and compelling framework for modernizing a system that’s badly in need of improvement.  We look forward to working with USDA and the entire industry in the weeks and months to come, noting that any plan USDA designs will by necessity require complex analysis to result in a proposal that serves diverse farmer needs well.

“In the meantime, we’ll continue to advocate for badly needed changes in areas such as the Class I mover. The current formula has cost farmers $1.2 billion in losses since its implementation after the 2018 farm bill, with additional losses expected in the coming months. It needs to change back to the previous “higher-of’ formula that served farmers best. The higher-of responds quickly to the marketplace, it helps farmer cash flow, it’s simple to understand, and it would have no real impact on processors who are using the formula to boost their immediate balance sheets, not manage future risk as they claim.

“Dating to NMPF’s first internal discussions, our path toward FMMO modernization is now nearly three years old. This final year is the most critical. We are excited to continue our leadership in this critical area, and will, as always, fight for the best approaches to ensure that dairy farms prosper.”

FACTS ABOUT NMPF’s FMMO PROPOSAL:

 

NMPF supports the federal legislation that authorizes the FMMO system, as well as improvements that increase clarity and producer understanding of milk pricing and ensure an orderly market and fair prices for dairy farmers.

NMPF’s proposed changes to the Federal Milk Marketing Order System include:

  • Returning to the “higher of” Class I mover;
  • Discontinuing the use of barrel cheese in the protein component price formula;
  • Extending the current 30-day reporting limit to 45 days on forward priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting;
  • Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas;
  • Developing a process to ensure make-allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years;
  • Updating dairy product manufacturing allowances contained in the USDA milk price formulas; and
  • Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

For more information, visit here.