Author: Theresa Sweeney
Cheese Sales Drive U.S. Dairy Consumption Growth
IDF World Dairy Summit a U.S. Dairy Opportunity
The International Dairy Federation (IDF) World Dairy Summit brings unique opportunities for U.S. dairy as the host nation for the Chicago event, to be held next Oct. 16-19. The global conference returns to the United States for the first time in three decades, at a moment when rising exports and world-leading sustainability gives the U.S. industry a great story to tell, according to three leaders in organizing next year’s events.
“It’s a really exciting time for our industry, and we think that there’s a tremendous opportunity, a tremendous amount of potential that dairy, globally, has here,” said Shawna Morris, Senior Vice President for Trade at the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC). “Looking at how we tap into that together is what we’re focused on doing through the conference.”
“Bringing all of these folks to the United States creates an opportunity to get folks into facilities, to get them out to farms, to really show the rest of the global dairy industry what the U.S. dairy industry is all about,” said Nick Gardner, chairman of the U.S. International Dairy Federation, the Senior Vice President for Sustainability and Multilateral Affairs at USDEC, and with Morris the co-chair of next year’s summit.
“This is an excellent opportunity for the U.S. dairy industry to highlight its world leading dairy production from the farm through our cooperatives and processors and out to the consumers,” said Jamie Jonker, NMPF’s chief science officer and chair of IDF’s Science Program Coordinating Committee. “It’s a way for us to step on the world stage, reintroduce U.S. dairy, its innovation and technology to the global marketplace, and demonstrate how we are world leaders.”
Morris, Gardner and Jonker also discuss how the dairy community can get involved with supporting the event, already highlighted by platinum-level sponsor Dairy Management Inc., as planning for it is already in full swing. More in the summit can be found here. You can find the podcast on Apple Podcasts, Spotify, Google Podcasts and Amazon Music.
Happy Thanksgiving! There’s Plenty of Butter
First, the bad news (for consumers): Heading into the holiday baking season, butter prices are, indeed at an all-time high. That’s for a few reasons. The biggest one is simple demand. Americans love butter, with the highest per capita consumption since the 1960s leading to the highest overall demand ever for the nation’s pre-eminent spread and ubiquitous baking ingredient. Overseas markets are also getting in on the act, with another record year for dairy trade possible in 2022.
Meanwhile, butter supplies haven’t, as of yet, been able to keep up with that demand enough to stabilize prices. That’s especially been the case in the past couple months, when retailers traditionally stock up in anticipation of the holidays. And of course, once you get past the actual cost of making butter itself and then add transportation, packaging, labor, and all the other the costs that are making everything else more expensive too, you have a recipe for record butter prices on the grocery shelf. And that’s making consumers (and media) notice.
But are higher prices the same thing as a “shortage”? We posit, not. Are store shelves empty? There’s always some one-off instances somewhere, but with those exceptions, no. Are crowds of consumers lining up for blocks outside local supermarkets to buy out rationed supplies, like early-COVID toilet paper? (Everyone stand six feet apart, please!) No again. And is anyone who wants to buy butter currently being deprived of anything other than $5 should they choose a four-pack, maybe a little extra if it’s extra-creamy European Style?!?? (And often less is you catch a good sale.)
That’s three strikes, and still, no one’s out of butter.
It’s easy to understand the concern: Butter is, after all, nature’s most perfect sandwich spread, the ingredient that makes a top-quality croissant worthy of a nasal-sounding French pronunciation. And even with all this, the underlying concern that’s fueled the “shortage” worries is itself showing signs of fading. Milk production is on the rise again, and with that, butter futures traded on commodities markets are declining. While some product prices rise and stay that way, butter goes up and down. Take a look at this chart — a dozen years of butter-price history that includes both the value of butterfat to a farmer (blue line) and the cost at the grocery store (orange line). See how they move together – and see where the blue line’s expected to go in 2023.
“What goes up, must come down” applies to butter. Production chases prices, and eventually higher production pushes prices down. That’s not always so great for farmers, by the way – and one nice thing for them about current pricing is that it’s helping farmers smooth out a challenging few years and rebuild the balance sheets they need to thrive. So be patient if you’re feeling sticker shock, and in the meantime, feel good that you’re helping a farmer.
But above all, don’t feel like you’re at risk of a butterless Christmas. The food chain, and the law of supply and demand, are ensuring that doesn’t happen. The holidays would be less happy without butter, but it just ain’t gonna happen. So Happy Thanksgiving. And here’s to, um, butter days ahead.
Congressional Balance Affects Dairy Policy but Doesn’t Shift Priorities
Control of the House of Representatives remains in doubt nearly one week after last Tuesday’s elections. But regardless of who is in charge in 2023, dairy’s priorities will move forward, says Paul Bleiberg, NMPF’s Senior Vice President for Government Relations, in a Dairy Defined podcast released today.
“The basic policy priorities remain the same,” said Bleiberg. “There are some areas where we might have more support from Republicans, some where we might have more support from Democrats, some where we might have more support on regional lines, and it’s really a question of strategy. Who’s going to be on the Agriculture Committee? Who’s going to be on the Appropriations Committee or the Ways and Means committee? Who are the members that we might go to kind of champion different priorities in those or other committees? That sort of is subject to those dynamics, but our priorities will be our priorities.”
You can also find the podcast on Apple Podcasts, Spotify, Google Podcasts and Amazon Music. Broadcast outlets may use the MP3 file. Please attribute information to NMPF.
October CWT-Assisted Dairy Export Sales Totaled 5.1 Million Pounds
CWT member cooperatives secured 39 contracts in October, adding five million pounds of American-type cheeses and 77,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 47 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, Europe and Middle East-North Africa, and will be shipped from October through April 2022.
CWT-assisted 2022 dairy product sales contracts year-to-date total 86.1 million pounds of American-type cheese, 657,000 pounds of butter, 7.6 million pounds of cream cheese and 30.3 million pounds of whole milk powder. This brings the total milk equivalent for the year to 1.090 billion pounds on a milkfat basis.
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.
FARM Participants Opt-In to the Environmental Stewardship Conservation Practice Questionnaire
Since its launch in August, when FARM Environmental Stewardship (ES) launched the Conservation Practice Questionnaire (CPQ), an optional add-on questionnaire to the FARM ES Version 2.0 evaluation. Since its launch, seven FARM Program participants have opted to implement it.
The existing FARM ES evaluation focuses on greenhouse gas emissions and energy use; this conservation questionnaire goes beyond these topics to ask about dairy farmers’ field and dairy-level conservation practices to capture a more holistic sustainability story. The questionnaire addresses areas covered in the industry’s 2050 environmental stewardship goals along with other topics that are of growing interest to customers and consumers.
Organizations that participate in FARM ES Version 2.0 have the option to voluntarily sign on to use the CPQ. Organizations may also choose not to use the CPQ with no impact on their participation in FARM ES. Interested participants should email dairyfarm@nmpf.org.
NMPF Provides Opportunities for FARM Participants, YCs at World Dairy Expo
The National Dairy FARM Program and YC Program joined industry stakeholders in Madison, WI Oct. 3-7 for the 2022 World Dairy Expo, boosting NMPF’s presence at the prestigious event for dairy farmers yet again.
FARM hosted a Lunch & Learn session with Zoetis and Alltech about employee management on, Oct. 6, with a session recording made available here. FARM also co-sponsored a Fitness to Transport “Knowledge Nook” session with Elanco Animal Health on Oct. 7.
The YC Program hosted a workshop, “Road Markers to the Future Business of Milking Cows,” on Oct. 6, in which YCs explored the steps that young and beginning dairy farmers must take to be successful today, and in the future. The session recording is available here. Forty YCs from seven member cooperatives participated in the session and reception later that day.
NMPF also sponsored a panel on the Federal Milk Marketing Order system, “The Future of our Dairy Markets – What Reforms Are Needed?” to introduce FMMO reforms and highlighted the NMPF internship program at the “Career Connections Networking Event”.
NMPF, USDEC Strengthen Ties Throughout Latin America
NMPF, USDEC and Sociedad Rural Argentina (SRA) announced an agreement Sept. 8 to foster cooperation between the three groups to advocate for science-based regulations across food and agricultural trade policy. SRA, a civil association of agricultural landowners, is an influential economic and political player in Argentina, and will be a valuable partner in advocating for international food policy priorities.
NMPF and USDEC built on the momentum with an agreement finalized Sept. 30 with the Chilean Federacion Nacional de Productores de Leche (Fedeleche). The memorandum of understanding places an emphasis on improving mutual understanding through conferences, seminars and events so that the three organizations can collaborate in fighting for clear, fair, science-based rules.
These latest developments complement the long-standing relationship NMPF and USDEC have cultivated with the Pan-American Dairy Federation (FEPALE), which held its 16th Congress in Quito, Ecuador, Oct. 19-21. NMPF Executive Vice President for Policy Development & Strategy Jaime Castaneda presented on behalf of FEPALE member USDEC at its Board of Directors meeting, supporting collaboration and joint work in international forums. Castaneda discussed supplemental partnership opportunities with dairy farmers in Ecuador that would increase dairy consumption and bilateral trade.
NMPF and USDEC look forward to continuing to expanding and collaborating with their regional partners to promote and defend the image of dairy and increase trade.
DFA Farmer Named NMPF “Communicator of Year,” Tillamook Recognized Among Co-ops
California dairy farmer Melvin Medeiros, a family farm-owner of Dairy Farmers of America (DFA), was named NMPF’s Farmer Communicator of the Year at the organization’s annual gathering of dairy-cooperative communicators Oct. 18. Tillamook earned top overall communications honors among NMPF member co-ops.
Medeiros, who milks around 1,600 cows roughly 30 miles northwest of Visalia, is a member of NMPF’s executive committee. Melvin serves as chair of the Agricultural Council of California’s Dairy Committee, sits on the Cattlemen’s Beef Board and the California Cares and Environmental Justice Fund Committee. He is also chairman of DFA’s Western Area Council and a member of DFA’s Executive Committee.
He’s also a member of NMPF’s Dairy Voice Network of farmer spokespeople and was profiled in a recent NMPF Farmer Focus. He is the second straight DFA farmer to earn Farmer Communicator of the Year, following last year’s awardee, Charles Krause of Buffalo, MN.
“Melvin is a consistent advocate for dairy,” DFA wrote in its nominating letter. “This year specifically, Melvin testified in front of the House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture. It’s imperative that dairy farmers tell their story in front of the committees that work on relevant and pertinent farm policy, and we’re proud Melvin was collectively representing dairy farmers alike in front of this committee.
“Producers like Melvin, who tell their story to the congressmen and women alike who are further away from dairy, create a trusted source and sounding board for policy decisions that directly affect dairy farmers.”
Tillamook was recognized for its numerous first-place awards in NMPF’s annual communications contest, highlighted by its “Best in Show” recognition for its 2021 Annual Report, led by Tillamook’s Corporate Communications team.
“Great balance of content across having the required business stats, mixed with content on leadership, cows, dairy products and most importantly the people who make it all happen,” read the judge’s comments in response to one of Tillamook’s prize-winning entries. “Loved the beautiful graphics, product highlights. Unique size/binding of the piece was a nice touch. Well done!”
Medeiros and Tillamook will also be recognized at NMPF’s annual meeting in Denver next week. A full list of the winners of the NMPF communications contest, which received entries from 13 member cooperatives, can be found here.
NMPF Presses for Supply Chain Progress
NMPF and U.S. Dairy Export Council (USDEC) leadership met with Federal Maritime Commission (FMC) Chairman Daniel Maffei on Oct.13 to discuss the implementation of the Ocean Shipping Reform Act and ongoing shipping challenges. The organizations touched on the results of a recent NMPF-USDEC membership survey and the need for further FMC actions to improve shipping flow dynamics, as well as relayed information on persistent backlogs at key ports nationwide.
The organizations followed the meeting with comments filed to the maritime commission Oct. 21, giving input to the agency as it starts rulemaking on prohibiting ocean carriers from unreasonably refusing to deal or negotiate with respect to vessel space accommodations. Given the severe shipping challenges that many dairy exporters have dealt with in the past two years, NMPF sees these proposed rules as a positive step. NMPF supports the agency’s stance that ocean carriers should outline their export strategies, which would balance negotiations and allow shippers to better understand how carriers operate.
Finally, California Governor Gavin Newsom of California on Sept. 30 signed Assembly Bill 2406 into law, placing new limits on the ability of ocean carriers to charge detention and demurrage fees to exporters and truck drivers that were incurred outside of a shipper’s control. NMPF and USDEC support the bill, sending letters in March and August to California Assembly Transportation Committee leadership and Newsom, respectively.
DMC Pays Again in September
The September margin under the Dairy Margin Coverage program was $8.62/cwt, up by $0.54/cwt from the August margin and generating a payment of $0.88/cwt for Tier 1 coverage at the $9.50/cwt level under the program.
The September U.S. average all-milk price rose $0.10/cwt from August. The DMC feed cost formula produced a $0.45/cwt lower feed cost for the month, due almost entirely to lower soybean meal and corn prices (numbers don’t add exactly due to rounding).
Together, the September payment and the August one for $1.42/cwt will return more to producers enrolled for $9.50.cwt Tier 1 coverage than their annual premium payments. Current forecasts indicate that, of the remaining three months in 2022, additional margin coverage payments are most likely to occur in December.
USDA’s Farm Service Agency opened enrollment for both calendar year 2023 DMC and for Supplemental DMC on Oct. 17. The deadline to enroll is Dec. 9, 2022.
