2023 Promises Policy Progress

A Washington truism is that the period that occurs after an election cycle is complete, but the next one hasn’t yet overtaken everyone’s attention, is when policy gets done. That makes it important for this industry to push for significant progress in 2023, as the 118th Congress convenes and clear policy challenges lie ahead.

High on NMPF’s priorities is leading the way toward federal adoption of a modernized Federal Milk Marketing Order system for producers that promotes a stable industry and provides fairer, more-up-to-date pricing for the nutritious and necessary products dairy farmers and their cooperatives provide. We made tremendous progress on this issue in 2022, driving a consensus approach that gathered many of this industry’s smartest minds and, through more than 100 committee and task force meetings of NMPF Board members and producers, and marketing experts from our member cooperatives, from all regions of the country, arrived at a proposal unanimously endorsed at our annual meeting in October. That’s a lot.

But there’s much more required to bring these efforts to fruition – much, much more. NMPF’s proposal itself isn’t quite complete – an important part of the plan, recommendations on updates to the nation’s  Class I price surface, are expected this month. From there, we will seek a final endorsement that prepares the way for us to request a USDA federal order hearing. That also will require extensive preparation, as the national consensus we’ve built among NMPF members will then form the basis of a conversation in which the entire industry will participate.

We welcome that conversation, which undoubtedly will include some good and not-so-good ideas from multiple interests. But throughout that conversation – and the hearing, and ultimately a producer vote – it will be critical to transcend narrow self-interest and work in a spirit of good faith to ensure that FMMO modernization is truly in the best interests of all producers. NMPF has kept that goal throughout; by crafting the most thoroughly researched, discussed, vetted and voted-upon of all proposals, we are in a strong position to meet the leadership challenge that falls to us as the nation’s dairy producer organization. We look forward to meeting this challenge, which will benefit all of dairy for years to come.

At the same time the FMMO discussions advance, we will be very active in shaping the farm bill due later this year, along with engaging in other legislative opportunities (and challenges) that come dairy’s way.

The twice-a-decade reauthorization of federal farm and nutrition programs sets the rhythm of ag policy in Washington, but it’s also important to remember that, in the end, the 2023 Farm Bill is simply another vehicle for advancing better policy, and it’s far from the only one available. Unlike the previous two farm bills, in which dairy policy clearly required significant change, this time around the main farm bill dairy safety net and risk-management programs – the Dairy Margin Coverage Program created at NMPF’s insistence, and the Dairy Revenue Protection and Livestock Gross Margin programs, which NMPF’s efforts made workable for broad producer participation – need evolution more than revolution.

Let’s not forget that the Farm Bill has many components, including sections governing trade, conservation and other areas critical to agriculture, so we’ll make sure all our priorities in the bill are addressed while pursuing other legislative goals, which range from financial incentives that support dairy’s Net Zero vision to immigration programs that work for dairy, through any means possible.

FMMO modernization and the farm bill alone would be more than enough to fill one year of Washington policy work. But of course, these two items are only the beginning of a long list of what must get done, from other legislative initiatives to federal nutrition policy proposals to overcoming regulatory challenges to expanding overseas markets The Biden Administration needs to pick up the pace on new trade deals even as it aggressively enforces existing ones. Yet another iteration of EPA’s Waters of the U.S. rule – this one going the wrong direction for agriculture – requires a strong response. And of course, we’re still waiting for FDA to give its guidance on labeling of plant-based dairy imitators, eternally hoping the agency charged with enforcing accurate nutrition labeling does what’s right for consumers.

Each year in Washington represents a new beginning. Opportunities are plentiful, and opportunities go to those who seize them. We embrace the challenge and expect that, working with the community that moves dairy forward, we can achieve great policy progress in the year ahead.


President & CEO, NMPF

NMPF Statement on New WOTUS Rule

From NMPF President and CEO Jim Mulhern:

“NMPF is disappointed that once again dairy farmers, who every day strive to be leaders in environmental stewardship, may need to live under a WOTUS rule that is cumbersome, unclear and overly complicated. Because the EPA’s most recent iteration fails to resolve what is now a 50-year struggle to define what constitutes a water body subject to federal regulation under the Clean Water Act, our members will face continued uncertainty as they attempt to comprehend and comply with unclear regulations.

“NMPF was pleased with the Navigable Waters Protection Rule (NWPR) and disappointed when it was revoked. NMPF is also disappointed that EPA failed to listen to numerous agriculture stakeholders that called on the agency to stay rulemaking on a new WOTUS rule until the Supreme Court ruled on the Sackett case, expected this spring.

“It’s important to note that EPA’s latest iteration is not a complete return to the unworkable rule adopted in 2015. EPA’s listed exemptions at least try to address some of agriculture’s concerns over lack of clarity. Even so, EPA is reintroducing considerable ambiguity in this version of the rule as it attempts to determine what is a “Water of the US” as seen in the treatment of ditches, ephemeral streams and groundwater, all of which were largely categorically out under the NWPR. NMPF fully anticipates continued litigation as a result of this rule.

“It’s now clear that four successive administrations of both political parties have been unable to resolve this matter in a way that satisfies the broad range of stakeholders and provides long-term regulatory certainty which is badly needed. Depending on the outcome of the Sackett case this spring, it may be time for Congress to step in in a bipartisan manner to provide clarity regarding which bodies of water are under the jurisdiction of the Clean Water Act.”

CWT Assists with 5.9 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 23 offers of export assistance from CWT that helped them capture sales contracts for 5.8 million pounds (2,600 MT) of American-type cheese and 37,000 pounds (17 MT) of cream cheese. The product is going to customers in Asia, Central America and Oceania, and will be delivered from December through June 2023.

CWT-assisted member cooperative year-to-date export sales total 99.1 million pounds of American-type cheeses, 657,000 pounds of butter (82% milkfat), 30.7 million pounds of whole milk powder and 8.8 million pounds of cream cheese. The products are going to 21 countries in six regions. These sales are the equivalent of 1.223 billion pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and cooperatives by fostering the competitiveness of US dairy products in the global marketplace and helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has helped significantly expand the total demand for U.S. dairy products and the demand for U.S. farm milk that produces those products.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to the bidders only when export and delivery of the product is verified by required documentation.

NMPF Scholarship Supports Dairy’s Future

Holiday giving season is under way, and NMPF’s National Dairy Leadership Scholarship Program is a worthy beneficiary for anyone who cares about a better industry future, explains Nicole Ayache, who leads the program at NMPF, in the latest Dairy Defined podcast. The scholarship supports graduate students, enrolled in master’s or doctoral programs, who are actively pursuing dairy related fields of research that directly benefit milk marketing cooperatives and the U.S. dairy industry at large. To learn more about it or to donate, just go to NMPF’s home page, nmpf.org, and click on the blue bar.

“As we look at the last 10 years or so of recipients, all of those recipients have stayed within agriculture,” said Ayache, who also serves as NMPF’s vice president for environmental stewardship and sustainability and leads the FARM Program’s Environmental Stewardship initiative. “In research, academia, allied industry, whatever it might be, those individuals have stayed within agriculture, and the majority within dairy itself. So we do believe that the scholarships we are awarding are really fulfilling our goal, which is to support the future of dairy.”

The full podcast is here. You can also find the podcast on Apple Podcasts, Spotify and Google Podcasts. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.


NMPF Statement on USDA’s Extended Deadline for Dairy Margin Coverage Signup

From NMPF President and CEO Jim Mulhern:

“NMPF thanks Secretary Vilsack and USDA’s Farm Service Agency for extending the deadline for Dairy Margin Coverage Program signup to Jan. 31. With input costs at record highs and early projections showing possible DMC payments for the first eight months of 2023, it’s imperative that producers have time to consider their coverage needs and make choices that best fit their operations and risk-management plans.

“Farmers also should use this extended DMC signup period to consider USDA’s full suite of risk-management options, all supported by NMPF. While DMC is designed to promote stable revenues and protect against financial catastrophe for small and medium-sized producers, other options including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, both of which were revamped in the 2018 Farm Bill at NMPF’s urging, provide important and effective risk management.

“NMPF also thanks USDA for giving farmers who did not sign up for supplemental DMC coverage in 2022 based on updated production levels another opportunity to do so this year. Finally, producers should keep in mind that USDA is developing a separate milk loss program that was provided for in legislation enacted last year. The program reimburses dairy producers of all sizes for milk dumped on account of disasters that occurred in 2020 and 2021. NMPF is working with USDA as it develops the initiative.”

November CWT-Assisted Dairy Export Sales Totaled 18.6 Million Pounds

CWT member cooperatives secured 52 contracts in November, adding 6.2 million pounds of American-type cheeses, 348,000 pounds of whole milk powder and 1.2 million pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 69 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, Middle East-North Africa, Oceania and South America, and will be shipped from November through May 2023.

CWT-assisted 2022 dairy product sales contracts year-to-date total 92.1 million pounds of American-type cheese, 657,000 pounds of butter, 8.8 million pounds of cream cheese and 30.7 million pounds of whole milk powder. This brings the total milk equivalent for the year to 1.157 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 Program Releases Everyday Biosecurity Manual

The National Dairy FARM program Oct 24. released Version 1 of the FARM Everyday Biosecurity manual, one of the key deliverables tied to 2020 National Animal Disease Preparedness and Response program funding to develop FARM Biosecurity. The manual focuses on everyday steps dairy farmers should take to protect herd and employee health. Taking a building block approach, the manual outlines key focus areas that include:

  • Animal health and disease monitoring
  • Animal movements and contact
  • Animal products, vehicles and equipment
  • Personnel, cleaning and disinfection; and
  • Line of separation.

Operations just getting started in biosecurity should focus on animal movements and contact, animal health and disease monitoring and personnel, the FARM Biosecurity task force recommends. FARM Biosecurity is the newest pillar of the FARM program and participation is voluntary. In addition to everyday biosecurity mentioned above, enhanced biosecurity for the Secure Milk Supply Program  focuses on the steps that need to be taken in the event of a Foot and Mouth disease outbreak.

NMPF Urges Sped-Up FDA Approval of Climate Friendly Feed Additives

NMPF called on the U.S. Food and Drug Administration on Nov. 16 to use existing legal authority to modernize its regulations allowing for faster approval of animal-feed additives that reduce greenhouse gas (GHG) emissions, submitting comments to the agency highlighting the need for urgent action to enhance dairy’s role as a climate solution.

Published in 1998, the FDA requested comment on its “Policy and Procedures Manual 1240.3605, Regulating Animal Foods with Drug Claims” to evaluate how the policy could be updated to reflect evolving scientific knowledge and promote innovation.

NMPF in its comments urged FDA to modernize the policy, which will allow for pre-market approval for important feed additive products like those which reduce enteric methane. Enteric emissions directly from cows currently account for roughly one-third of all GHG emissions from dairy farms and present an important area of opportunity for methane reductions. While animal-feed additives are a promising path toward a net-zero future for dairy as outlined in industry goals, their pace of approval lags that of competitors such as the European Union due to current FDA processes. Modernizing the process and allowing feed additives to be treated as foods rather than as drugs, can help the United States maintain and advance its global leadership in sustainability. Embracing new practices and technologies are key to making America’s dairy farmers an environmental solution while providing wholesome and nutritious dairy products to the U.S. and the world.

The feed additive comments were one of several NMPF submitted to federal agencies in November, with others including:

  • Comments to USDA Agricultural Marketing Service National Organic Program (USDA-AMS-NOP) on the proposed rule Organic Livestock and Poultry Standards, submitted Nov. 10 (USDA-AMS-NOP-21-0073-0001). USDA-AMS-NOP has proposed to amend the organic livestock and poultry production requirements by expanding and clarifying existing requirements covering livestock care and production practices and mammalian living conditions;and
  • Comments to the USDA Animal and Plant Health Inspection Service, submitted Nov.7, on the new approach to indemnity value determination and a new framework for the indemnity regulations.

NMPF Calls on Lawmakers to Support Domestic Infant Formula Production

In a letter to lawmakers, NMPF on Nov. 17 urged support for increased domestic infant formula production as shortfalls that stripped store shelves of necessary infant formula have eased. Given the improved situation, tariff waivers that could discourage the production of a safe, secure domestic infant formula supply should be allowed to expire at end of this year as scheduled, NMPF said in the letter to the chairmen and ranking members of the Senate Finance Committee and House Ways and Means Committee.

“Given that the temporary production shortfall that gripped American families in need of formula earlier this year has abated, we urge Congress to ensure that the unique, unilateral tariff benefits granted to our trading partners under the Formula Act and the Bulk Infant Formula to Retail Shelves Act end as scheduled at the close of this year,” said NMPF Chairman and CEO Jim Mulhern in the letter. “We respectfully request your opposition to any effort to extend these preferential tariff benefits beyond the end of this year.”

A strong, diversely sourced domestic infant formula production industry ensures the highest quality, safest products while supporting rural jobs and domestic producers.

NMPF Outlines Export Market Priorities to USTR

NMPF and the U.S. Dairy Export Council (USDEC) submitted comments to the U.S. Trade Representative (USTR) on Oct. 28 in response to the agency’s request for more information on foreign obstacles to trade and investment for its annual National Trade Estimate (NTE) report.

Over the last several years, the U.S. dairy industry has been put at a disadvantage by a lack of ongoing free trade agreement (FTA) negotiations and uneven enforcement of existing agreements. This inaction especially hurts American producers at a time when global demand for dairy products is rising. Given the great importance of exports to the success of the industry, NMPF called for the Administration to negotiate new FTAs and otherwise expand market access for U.S. exporters.

The comments also summarized country-specific barriers that governments around the world are implementing to impede U.S. dairy exports. Those measures include traditional tariffs, the misuse of geographical indications and overly burdensome health and safety regulations that target dairy products. In total, the comments outline trade issues with 37 countries or regions, as well as concerns related to Codex, World Health Organization and World Trade Organization issues.

Through its work with industry partners, NMPF will continue to encourage Congress and the Biden Administration to stand up for U.S. dairy and negotiate trade deals that support American dairy farmers.

NMPF, IDFA Push for WIC Fix to Flawed Proposal That Potentially Limits Dairy

Representing dairy farmers, cooperatives, and processors, NMPF and the International Dairy Foods Association (IDFA) issued a joint statement Nov. 17 responding to proposed USDA changes to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) released that day.

“It is unfortunate for WIC participants that the proposed rule would decrease access to dairy products and the unique nutrient profile they provide, especially considering the current Dietary Guidelines for Americans (DGA) note that a staggering nearly 90 percent of the U.S. population does not consume enough dairy to meet dietary recommendations,” the groups said in their statement. “At a time of rising food costs and high food insecurity, we should focus on increasing access to a wide variety of healthful, nutrient-dense, and affordable foods, including both fresh produce and dairy products. It’s disappointing that the proposed rule would limit WIC family purchasing power for nutritious dairy foods, particularly at a time like this.

The dairy organizations commended USDA for expanding options for yogurt and cheese varieties and proposing WIC participants have wider purchase options and also lauded its support for nutritional equivalence in substitute products as recommended in the Dietary Guidelines for Americans. That said, the overall plan fell short, NMPF and IDFA argued.

“IDFA, NMPF, and our members will advocate against reducing the amount of nutritious dairy foods provided through WIC in USDA’s final rule because we are committed to reducing food insecurity, malnutrition, and diet-related disease while improving health outcomes by making it easier for all Americans to access healthy, affordable foods, including nutritious dairy products. We hope USDA will work to achieve these same objectives.”

No DMC payments for October as Prices Rise

The U.S. average all-milk price rose $1.50/cwt in October from a month earlier, boosting the month’s DMC margin well above the $9.50/cwt maximum coverage level needed to trigger program payments, after two months of payouts.

The October margin was $10.71/cwt, $2.09/cwt higher than September’s margin. The DMC feed cost dropped by $0.59/cwt in October, driven entirely by a sizeable drop in the price of corn.

Another small payment for $9.50/cwt Tier 1 coverage may be triggered in December, based on current projects. Payments this year under the program, for August and September, together total the equivalent of about $0.19/cwt on an annualized basis and would be enough to cover the annual premium for a farmer enrolled in DMC at the $9.50 coverage level.