Author: Theresa Sweeney

U.S. Triumphs in USMCA Dispute with Canada Over Dairy Market Access

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) celebrated a landmark decision published today which found Canada is improperly restricting access to its market for U.S. dairy products in violation of its U.S.-Mexico-Canada Agreement (USMCA) tariff-rate quotas (TRQs) commitments. The case is the first of any kind brought before a USMCA Dispute Settlement Panel and was launched with broad bipartisan support last May at the urging of NMPF and USDEC. NMPF and USDEC urged Canada to comply swiftly with the panel’s ruling.

“The United States and Canada negotiated specific market access terms covering a wide variety of dairy products, but instead of playing by those mutually agreed upon rules, Canada ignored its commitments. As a result, U.S. dairy farmers and exporters have been unable to make full use of USMCA’s benefits,” said Jim Mulhern, president and CEO of NMPF. “Today’s decision is an important victory for U.S. dairy farmers and the millions of Americans whose jobs are tied to the U.S. dairy industry. America’s dairy farmers appreciate the Biden Administration’s dedication to preserving dairy export opportunities and the many members of Congress that have also stressed the importance of aggressive enforcement of dairy access rights in our trade agreements.”

“On behalf of America’s dairy farmers and manufacturers, we want to thank Ambassador Katherine Tai for launching the dispute settlement process and Congressional leaders for strongly supporting the need to uphold USMCA’s dairy provisions. We expect Canada to abide by its trade commitments so that the American dairy industry can fully access the Canadian markets just as USMCA promised,” said Krysta Harden, president and CEO of USDEC. “While this is an essential victory, it is one step in a much longer journey. Our work to uphold the full benefits of USMCA continues, as we strive to reduce supply chain disruptions for our exports and ensure Mexico’s adherence to the dairy provisions of the USMCA, among other key matters.”

TRQs are a system of tariffs negotiated between countries that allow a predetermined quantity of imports at a specified tariff rate, where that rate is often at or near zero. Any additional imports above that predetermined quantity are subject to significantly higher tariffs. In the case of U.S. dairy products, these additional Canadian tariffs typically price U.S. dairy products out of Canada’s market, making fair access to Canadian dairy TRQs vital to maximizing exports to that market.

When the Office of the U.S. Trade Representative (USTR) brought the case in May 2021 following persistent advocacy from NMPF and USDEC, it argued that Canada has maintained dairy TRQ measures that run counter to its market access obligations under USMCA. USMCA specifically requires that Canada open its TRQ application process to anyone active in the Canadian food and agriculture sector. Yet USTR noted that Canada designates the bulk of the TRQs to Canadian dairy processors who have little incentive to import, does not provide fair or equitable procedures for administering the TRQs, and does not give retailers any access to the TRQs. These measures deny the ability of U.S. dairy farmers, workers, and exporters to utilize the TRQs and realize the full benefits of the USMCA.

While the United States tried to resolve the matter through consultations with Canada before initiating the Dispute Settlement Panel, Canada refused to change its policies. NMPF and USDEC engaged USTR and Congress, achieving broad bipartisan support from more than 125 members of the House and Senate for bringing this matter to the USMCA Dispute Settlement Panel. There, a panel of legal experts evaluated Canada’s current dairy trade policies against its commitments under USMCA and found Canada was not meeting its USMCA obligations.

USDEC and NMPF Applaud USDA, DOT Strong Message of Support for Agricultural Exporters

Posted on by Theresa Sweeney

On behalf of dairy farmers and manufacturers across the country, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) praised yesterday’s strong message from the U.S. Department of Agriculture (USDA) and the U.S. Department of Transportation (DOT) urging the world’s leading ocean carriers to reform their practices to provide better service to U.S. agricultural exporters. The letter specifically referenced the need to expand use of available West Coast terminal capacity and to “restore reciprocal treatment of imports and exports [which] is inherent in trade.”

USDEC and NMPF repeatedly met with USDA and DOT officials as well as the White House over the past several months to urge a greater Administration focus on the shipping supply chain crisis’s impact on agricultural exporters. The dairy organizations have urged the Administration to call out profiteering by foreign-owned carriers at the expense of dairy exporters and take steps to address the supply chain crisis that’s cost the dairy industry $1.3 billion over just the first three quarters of 2021.

Yesterday’s letter was a key step in the right direction and builds on last week’s successful passage of House legislation designed to curb some of the bad-faith practices by ocean carriers. USDA and DOT noted that, “This imbalance is not sustainable and contributes to the logjam of empty containers clogging ports. The poor service and refusal to serve customers when the empty containers are clearly available are unacceptable and, if not resolved quickly, may require further examination and action by the Federal Maritime Commission.”

“Dairy exporters are enduring tremendous challenges in getting their high-quality products to customers in overseas markets, which puts our industry’s reputation as a reliable supplier at risk. Our competitors in the European Union and Oceania are eager to swoop in and scoop up those sales,” said Krysta Harden, president and CEO of USDEC. “USDEC commends the Administration’s recognition that the current situation facing our dairy exporters cannot continue and strongly supports further steps by the Federal Maritime Commission and other Administration entities to drive change swiftly.”

“Dairy farmers and their cooperatives have invested significantly in painstakingly cultivating export markets to help meet the growing global demand for dairy. This year’s shipping supply chain crisis has created enormous upheaval in maintaining those sales, which are so critical to the overall demand for American milk,” said Jim Mulhern, president and CEO of NMPF. “Dairy farmers strongly support USDA and DOT’s castigation of ocean shippers’ abusive practices and urge the Administration to take the steps necessary to bring about meaningful reforms in export access for our dairy industry.”

Both organizations formed an Export Supply Chain Working Group earlier this year and have worked on a range of initiatives to address the shipping crisis including the passage of HR 4996 and work to drive further Congressional advancement of this legislation. Steps by the Administration to fully use all existing authorities are a crucial complement to that ongoing legislative reform effort.

NMPF Thanks Sen. Baldwin for Prodding FDA Nominee Califf on Dairy Labeling

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) thanked Senator Tammy Baldwin for her continued advocacy for accurate labeling and public health in her questions for Dr. Robert Califf during today’s hearing on his nomination to be commissioner of the U.S. Food and Drug Administration.

“Labeling integrity needs to be a top-of-mind issue for Dr. Califf as he moves toward his second stint as FDA commissioner. The ground has shifted since his previous tenure in the Obama administration, both as dairy imitators proliferate and the abuse of lax labeling enforcement creates nutritional confusion for consumers,” said Jim Mulhern, president and CEO of NMPF. “FDA has pledged to offer guidance on this issue within months. Given this, we thank Senator Baldwin for pressing for urgent action today in her questioning.”

In response to a question from Sen. Baldwin, D-WI, asking him whether and when the FDA will begin enforcing its own labeling standards, Dr. Califf said he would make the issue a priority should he be confirmed as FDA commissioner.

There is “almost nothing more fundamental about safety than people understanding exactly what they’re ingesting, so I am committed to making this a priority if I am confirmed,” Dr. Califf said. Video of the exchange with Sen. Baldwin is here.

The National Milk Producers Federation has been speaking out on FDA’s lack of enforcing its own rules against mislabeled plant-based imitators for four decades and is encouraged by recent, long overdue FDA attention to the issue. For more background on NMPF’s position and statements of support from public-health organizations, click here. An NMPF “road map” outlines how the agency can adapt existing standards to reflect the current marketplace and protect labeling integrity. The organization has also repeatedly called on the FDA’s ombudsman to look into the agency’s lack of enforcement of current rules on product labeling for dairy labels and alternatives.

 

Dairy Cooperative Leader Highlights Need for New Market Access Opportunities at Virtual Town Hall

Posted on by Theresa Sweeney

Robert Chesler, CEO of the United Dairymen of Arizona, emphasized the importance of securing new market access opportunities through bilateral or multilateral Free Trade Agreements during a virtual town hall organized today by Farmers for Free Trade (FFT). For American dairy farmers to remain competitive in the international market, the United States must unlock new export markets, Chesler said.

As FFT members, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) have a leading role in carrying out its mission of informing the public about the benefits of free trade and supporting the pursuit of beneficial trade agreements that expand export opportunities for American farms.

During today’s virtual event, Chesler spoke of the challenges that American dairy exporters face as the United States’ trade competitors continue to secure greater dairy market access in key export markets. He noted that countries such as New Zealand, Australia, and the EU are aggressively pursuing new trade deals, which then harms the competitiveness of U.S. dairy products at a time when international demand is growing. In his remarks, Chesler said that policy actions focused on increased competition and removing burdensome market barriers are key to sustaining our existing export markets and opening additional opportunities for U.S. dairy producers.

“We urge the Administration to seek Trade Promotion Authority renewal to go after new trade agreements,” Chesler noted in his comments. “This is critical to realizing fully the potential of dairy markets in places like Vietnam, Indonesia, the United Kingdom and other major dairy purchasers. In the meantime, the U.S. should be using all types of trade tools to expand access and reduce barriers to U.S. exports with major agricultural importing markets.”

An NMPF and USDEC member based in Tempe, the United Dairymen of Arizona is a full-service milk marketing cooperative founded in 1960. Its farmer-owned manufacturing facility produces milk powder, cream, butter, and a variety of other dairy ingredients, many of which are exported around the world.

“We thank Robert for representing the industry and outlining provisions that could improve our export market,” said Jim Mulhern, NMPF president and CEO. “American dairy farmers support thousands of jobs in rural communities. Unfortunately, the lack of a trade agenda that focuses on opening markets limits our ability to grow. We need the administration to aggressively pursue greater market access opportunities to ensure American dairy exporters can effectively compete with other dairy exporting nations that continue to ink new agreements.”

“We applaud Robert’s remarks today about the competitive disadvantage that U.S. dairy producers are facing and encourage this administration to address the issue by engaging in negotiations with our trading partners,” said Krysta Harden, USDEC president and CEO. “What we are seeing today are unfavorable tariff rates when compared to our competitors and regulatory barriers that are hampering our exporters’ ability to access their full market potential. USDEC strongly supports UDA’s call to action for the administration to use its trading tools to pursue new opportunities.”

Ports Progress Critical, NMPF’s Rice Says

Posted on by Theresa Sweeney

Overwhelming support received last week in the U.S. House of Representatives for badly needed shipping-policy reforms is a crucial step, but far from the only one needed, to ensure reliable exports of U.S. dairy products to growing overseas markets, said Tony Rice, trade policy manager for NMPF and the U.S. Dairy Export Council, in a Dairy Defined podcast released today.

Since the Ocean Shipping Reform Act passed the House last week, “We are focused on keeping up that pressure and ensuring both in Congress and both with the administration that there are fixes out there and the fixes are not just a one-time or one-off, that these are going to be some fundamental reforms that are much needed in this industry to ensure that this situation doesn’t happen again,” Rice said.

Rice explains the complexities of challenges facing U.S. port traffic, with ships experiencing powerful financial incentives to quickly travel to Asia without carrying farm exports necessary to boost rural incomes and the U.S. economy. Rice also explains why public policy changes are essential, and how NMPF is working for full congressional package of reforms. 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.

Dairy Industry Commends House Passage of Ocean Shipping Reform Act on Wide Bipartisan Vote

Posted on by Theresa Sweeney

Proactive efforts throughout this year led by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) to alleviate dairy supply chain disruptions took a significant step forward today with the U.S. House of Representatives passing the bipartisan Ocean Shipping Reform Act of 2021 (OSRA) on an overwhelming bipartisan vote of 364 – 60.

If passed by the Senate and signed into law, the legislation will help alleviate delays and disruptions at U.S. ports that have cost the U.S. dairy industry well over $1 billion this year. American dairy exporters since late 2020 have faced unprecedented challenges in securing shipping container accommodations on ocean vessels while contending with record-high fees and shipping access volatility, most of which has been driven by foreign-owned ocean carriers.

With input from their newly formed Supply Chain Working Group of dairy exporters, USDEC, jointly with NMPF, worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), as well as other agricultural partners, in helping to shape the legislation. In addition, a letter from 78 dairy cooperatives, companies and associations sent today reiterated the importance of OSRA to the continued success of U.S. dairy exports.

As the letter noted, “Ocean carriers are shipping empty containers across the Pacific Ocean at record rates of over 70%. Put simply, this is wreaking havoc on U.S. dairy exports, which are important ingredients in supply chains that help feed consumers in Asia and elsewhere. Unfortunately, our global competitors in the European Union and New Zealand are not facing the same level of volatility in supplying those markets which puts U.S. dairy exports at high risk of being displaced for more reliable suppliers… It is critical that Congress pass the Ocean Shipping Reform Act to address this crisis and deliver relief from the supply chain snarls and market failures that are bogging down the export of American-made dairy products.”

USDEC and NMPF were among the first contributors to drafting OSRA. The bill supports key steps to resolve supply-chain obstacles by amending the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among ocean carriers and other parties. The bill specifically would restrain carriers’ ability to deny export shipments, increase the availability of containers, improve protections against retaliation, and better address unfair detention and demurrage charges.

To help ensure that an effective revision to current law can be swiftly enacted, the organizations will continue working to secure a strong Senate version as well. Congressional reform of the Shipping Act is one vital piece to the broader set of steps NMPF and USDEC continue to promote to alleviate the shipping crisis impacting U.S. dairy exporters.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, president and CEO of USDEC. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized. We commend House leadership for taking this critical step to tackle these challenges.”

“NMPF thanks Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward. Given the complexity of the export shipping crisis, we also encourage the Administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”

USDEC, together with NMPF and their joint Supply Chain Working Group launched in early 2021, continues to urge the importance of strong Senate companion legislation and additional measures to address the challenges plaguing U.S. food and agricultural exporters quickly and fully.

DMC Signup to Begin; USDA, Congress Thanked for NMPF-Backed Improvements

Posted on by Theresa Sweeney

The National Milk Producers Federation is urging farmers to sign up for maximum coverage in 2022 under the Dairy Margin Coverage (DMC) program, which USDA today announced will open for enrollment from Monday, Dec. 13, through Feb. 18. This year’s DMC signup is accompanied by new enhancements that make the program even more valuable for producers seeking protection against unforeseen market risks.

“Signing up for DMC, which offers cost-effective margin protection for small and medium-sized producers as well as inexpensive catastrophic coverage for larger dairies, is a no-brainer for 2022, especially considering the improvements we fought for in Congress and advocated for at USDA,” said Jim Mulhern, president and CEO of NMPF. “This year has illustrated just how valuable this program is for those producers that can take advantage of it, and DMC will once again be an essential part of many farmers’ risk management in the coming year. We thank Congress and USDA for making the program stronger and helping dairy farmers in challenging times.”

DMC is part of a suite of federally backed risk-management tools, including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, which were revamped in the 2018 Farm Bill at NMPF’s urging. DMC resulted from NMPF’s effort to improve inadequate federal margin-protection insurance. LGM-Dairy and DRP were made workable via NMPF’s efforts to remove spending caps and a ban on enrollment in multiple programs, which previously limited their usefulness.

More than $1.1 billion – a record – in DMC payments are expected to be distributed to dairy producers under the 2021 program, according to USDA data as of Dec. 6.

While DMC in 2022 will fully incorporate the premium-quality alfalfa price into the DMC feed cost formula, an improvement from the current structure that uses a 50-50 blend between the premium-quality price and the regular price, USDA will make retroactive payments to producers to January 2020. Meanwhile, the new Supplemental Dairy Margin Coverage program will enable some producers who are also enrolled in DMC to receive additional payments reflecting increases in their production since 2014 retroactively to January 2021.

Both improvements occurred at NMPF’s urging. The alfalfa recalculation also will further benefit dairy in the next farm bill, as it will increase the amount of funds available for all programs that benefit dairy farmers.

CWT-Assisted Dairy Export Sales Through November Reach 1.4 Billion Pounds

Posted on by Theresa Sweeney

Despite not taking bids for two weeks during November breaks, CWT member cooperatives secured 94 contracts in November adding 11.5 million pounds of American-type cheeses, 2.6 million pounds of butter, 1.1 million pounds of whole milk powder and 183,000 pounds of cream cheese to CWT-assisted sales in 2021. These products will go customers in Asia, Middle East-North Africa, Europe, South America and Oceania, and will be shipped from November 2021 through May 2022.

CWT-assisted 2021 dairy product sales contracts year-to-date total 49.9 million pounds of American-type cheese, 15.9 million pounds of butter, 6.1 million pounds of anhydrous milkfat, 11.5 million pounds of cream cheese and 45.1 million pounds of whole milk powder. This brings the total milk equivalent for the year to 1.404 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.

NMPF Works to Preserve Market Access to the European Union

Posted on by Theresa Sweeney

After months of dedicated work by NMPF and USDEC, both organizations welcomed USDA’s Agriculture Marketing Service (AMS) Nov. 22 announcement to add the new EU dairy certificates, as well as the associated transit versions of each dairy certificate, to its ATLAS system. AMS plans to begin issuing the new dairy certificates in early December.

The European Union has long sought to stymie market access for dairy imports through a litany of nontariff barriers, including complex certification requirements. The late 2020 announcement of new EU certificates for dairy products and composite products (i.e., processed foods containing both animal sourced ingredients) were yet another hurdle that had the potential to completely choke off U.S. access to that market. NMPF and USDEC adopted a multi-track approach to the issue:

  • Successfully working with the U.S. government and Congress to secure a compliance approach that did not impose onerous new burdens on dairy farmers and manufacturers as well an initial delay of the certificate implementation date; and
  • Ensuring that USDA was equipped with the authorization and tools necessary ensure that the certificates could be issued well ahead of the extended deadline to avoid shipping delay problems. These efforts helped ensure that the certificates could be implemented in a timely manner even as the U.S. government continues to work to resolve challenges in other product areas so that dairy trade to and through the European Union can continue uninterrupted.

NMPF Files Comments to Cell-Based Meat Docket

Posted on by Theresa Sweeney

NMPF filed comments to USDA’s Food Safety Inspection Service’s Advanced Notice of Proposed Rulemaking entitled “Labeling of Meat or Poultry Comprised of or Containing Cultured Animal Cells,” emphasizing consumers right to know that they are consuming cell-based/lab-grown products through the label on the product. The comments, filed Nov. 9, highlighted:

  • The need to enforce already existing standards;
  • That the word “cultured” should not be used to describe these products, as the term is associated with cultured dairy products including yogurt, and kefir among others;
  • Products containing lab-grown animal cells should clearly state that;
  • USDA should coordinate policies with FDA while developing these standards; and
  • “Cell-based,” “lab-grown,” or “synthetic” would all be appropriate labels for these products.

FSIS should move expeditiously through the normal rulemaking process and not waste years developing rules while not making the same blunders that FDA has. The full comments can be found here.

Efforts Advance to Alleviate Port Congestion

Posted on by Theresa Sweeney

NMPF and the U.S. Dairy Export Council (USDEC) continue to make strides to prompt government action to alleviate ongoing port congestion and high fees limiting U.S. dairy exports.

President Biden’s Nov. 17 announced his support for the Ocean Shipping Reform Act of 2021, a key step made last month. The bipartisan legislation provides new authority to the Federal Maritime Commission to address unjust and unreasonable practices by ocean carriers. NMPF has been asking the White House to support this important legislation, which now has 80 congressional cosponsors. A briefing paper on the legislation is here and a “frequently-asked questions” document NMPF and USDEC created can be found here. NMPF continues work with agricultural organization partners to guide expeditious introduction of partner Senate legislation to limit carrier refusal to load agricultural exports in lieu of returning empty containers to Asia and address unprecedented fees that are oftentimes accrued outside of the exporter’s power.

NMPF Executive Vice President for Policy Development & Strategy Jaime Castaneda also joined members of the Biden Administration’s Supply Chain Task Force on Nov. 12 to discuss export challenges for the U.S. dairy industry. While keeping up the pressure for the administration to fully tackle the long-term implications the shipping delays have on U.S. dairy’s reputation as a reliable supplier, NMPF welcomed as notable progress a spate of announcements from the federal, state and local levels throughout November, including advancements on:

  • Individual port operation improvements;
  • Temporary easement of truck weight limits in California; and
  • The government’s release of “the Biden-Harris Action Plan for America’s Ports and Waterways,” which will accelerate port infrastructure grants, new construction projects for coastal and inland waterways and land ports of entry.

Beyond highlighting the need for additional government action, the dairy industry is also looking to rewrite the media narrative on the effects of supply chain snarls on the U.S. economy. While most of the focus of the supply chain crisis throughout the fall has been on imports of consumer goods, NMPF is working to shift the focus to include the impact that the challenges have on dairy farmers, cooperatives and the thousands of American workers throughout the dairy supply chain.

As part of this effort, NMPF contributed to a Nov. 14 New York Times article illustrating the strain that export complications have placed on U.S. agriculture, with trade team staff making key connections that made the piece an important opportunity to share dairy’s story. In the article, Brad Anderson, the chief executive of NMPF member California Dairies, Inc. noted the breadth of the issue: “This is not just a problem, it’s not just an inconvenience, it’s catastrophic.”

“Are we going to get toys for Christmas? Are we going to get chips for automobiles? We think those are real concerns and they need to be talked about,” Anderson said. “What’s not being talked about is the long-term damage being done to exporters in the world market and how that’s going to be devastating to our family farms.”

NMPF and USDEC continue to collaborate with the Ports Working Group of dairy producers and exporters to identify additional solutions to alleviate the crisis.