Author: Theresa Sweeney

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.

Climate Smart Ag Priorities Advance in House

Posted on by Theresa Sweeney

NMPF’s year-long advocacy for robust new conservation funding yielded another step forward as the House of Representatives passed its budget reconciliation measure on Nov. 19. The bill, now known as the Build Back Better Act, includes a once-in-a-generation, NMPF-backed $27 billion funding boost for conservation programs, with an emphasis on climate smart agricultural practices. This substantial funding will provide producers with technical assistance for sustainability and stewardship practices, which will be critical to realizing the dairy industry’s 2050 sustainability goals, as embodied in the Net Zero Initiative.

The House’s action is no small feat. Democratic leadership negotiated for months to find a compromise that would satisfy the various factions of their caucus while also fulfilling budget reconciliation requirements that allow the measure to pass the Senate with a simple majority. NMPF has worked throughout this process to further the interests crucial to dairy farmers and their cooperatives, both advocating for key provisions and urging against harmful efforts that would undermine dairy’s stewardship goals.

NMPF praised the new climate-smart ag investments in the bill as the measure moved closer to full House consideration. “Dairy farmers have long been proactive land and water stewards because they seize opportunities for innovation,” said NMPF President and CEO Jim Mulhern. “These investments will better position dairy farmers to proactively implement the dairy sector’s Net Zero Initiative and fulfill its 2050 environmental stewardship goals.” Mulhern also thanked Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) for her leadership in spearheading the climate smart ag provisions.

Highlights among the bill’s investments:

  • $9 billion in new funds for the Environmental Quality Incentives Program, which provides important technical assistance to dairy farmers, targeted toward stewardship practices that can reduce greenhouse gas emissions;
  • $25 million annually for Conservation Innovation Trials, with the new funding targeted toward initiatives that use feed and diet management to reduce enteric methane emissions, which can comprise roughly one-third of a dairy farm’s greenhouse gas footprint. NMPF is excited for this opportunity to amplify its focus on innovative feed additives and rations that reduce enteric emissions;
  • A new cover crop initiative to pay producers $25 per acre of established cover crop practices to reduce nutrient runoff and soil erosion; and
  • $7.5 billion in new funds for the Regional Conservation Partnership Program, which funds locally developed, targeted partnership projects, with emphasis on initiatives that incentivize or target reduced methane emissions.

NMPF has also worked successfully to exclude from the measure proposed changes to the tax code which would have changed how and when capital gains on inherited assets are taxed, including inherited farms and other farm assets. NMPF has actively worked to prevent these changes – commonly referred to as modifying “stepped-up basis” – since they were initially floated earlier this year to pay for the spending initiatives in the larger package.

Thanks to significant NMPF-led advocacy, the tax-writing House Ways and Means Committee did not include these changes in its original portion of the measure, and the full House upheld the committee’s decision. “We are grateful that Congress is likely to heed our call and put aside problematic tax proposals that if enacted would have harmed the future of family farming,” Mulhern said.

The Senate is expected to take up the budget reconciliation package after Thanksgiving. The Senate will likely change the measure in some respects, which will require the House to vote on the revised version. NMPF does not anticipate modifications to the climate smart ag provisions or an attempt to insert the problematic capital gains taxes changes and will work closely with congressional offices to ensure that these dairy priorities make it across the finish line.

EPA Delays Pyrethrins Decision After NMPF Comments Advocate Use

Posted on by Theresa Sweeney

The Environmental Protection Agency in early December decided to delay a decision on the use of pyrethrins in agriculture until at least 2024 after NMPF filed joint comments with other agricultural organizations, including the American Farm Bureau Federation and the National Pork Producers Council, 3 advocating for the continued use of pyrethrins on agriculture operations.

“The pyrethrin + products are fundamentally important to the US livestock and poultry sectors for the control of many airborne and other animal house insect pests, especially house and stable flies,” the groups wrote on Nov. 3. “These insects are highly detrimental to the health and welfare of the animals, the persons working in the houses, and lead to risks of spread of food safety pathogens.

Pyrethrins are the most effective and safe product to use for adult fly control on agriculture operations. After initiating a registration review on Dec. 2011, EPA proposed the prohibition of multiple applications of pyrethrins, including the use in animal barns, even after recognizing that this could negatively impact pest control, citing “potential risks of concern for residential handlers and adults and children who are exposed after application.”

The joint comments emphasized the important role pest management plays in biosecurity and disease control, noting and that there is little to no public exposure to pyrethrins when applied properly.

OSHA Issues Emergency Vaccination Mandate; Litigation Ensues

Posted on by Theresa Sweeney

On Nov. 4, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS) requiring employers with more than 100 employees to develop, implement and enforce a COVID-19 vaccination policy. The mandate’s fate remains in question as intense legal activity surrounding it will likely send it to the Supreme Court. NMPF has been engaged with federal officials throughout, protecting dairy interests as the controversial measure plays out.

The Emergency Temporary Standard (ETS) action is one part of President Biden’s overall multi-prong plan to vaccinate the unvaccinated, potentially affecting more than 80 million people. The ETS released Nov. 4 requires employers with more than 100 employees to ensure the workers are vaccinated against COVID-19 or have a negative weekly COVID-19 test. The ETS requires employers subject to the OSHA ETS Vaccination Mandate to have a written policy in place by Dec. 5.

Several members of the National Council on Farmer Cooperatives and NMPF met with the White House Office of Management and Budget (OMB) on Oct. 18, more than two weeks before the rule was released, to discuss the standard then under development. The coalition that met with OMB raised numerous concerns about the mandate while making it clear it will continue to advocate for vaccinations.

Key questions include whether there will be enough tests to handle the demand. If there are insufficient tests to meet demand, the coalition is concerned the program will fail, further disrupting an already fragile supply chain. NMPF suggested that the White House should consider invoking the Defense Production Act (DPA), as it did several times in the past year to address other COVID related issues, to ensure availability of affordable rapid COVID-19 tests.

The group also raised concerns about record-keeping, time-off requirements, and potential suspension of the ETS if it creates supply chain disruption, particularly for workers deemed essential by DHS-CISA in its Critical Infrastructure Workers v 4.0 NMPF helped develop in 2020. Still, despite the ongoing litigation, NMPF suggests employers complete their written policies to avoid any negative repercussions and to encourage vaccination.

To assist in compliance, OSHA has provided two templates that are available from NMPF. One is for employers that mandate all employees get vaccinated and one is for employers that give employees the option to get vaccinated or wear a face covering and submit weekly negative COVID-19 test results. OSHA is suggesting that employers incorporate any existing COVID-19 policy into one of these templates.

The blue text in the templates show where they need to be customized. Below are the requirements that need to be in place by the respective compliance dates. OSHA has been clear in stating the ETS preempts any state or local prohibition on mandates. But OSHA also cautions employers to be mindful of conflicts with collective bargaining agreements.

The following details what needs to be achieved by requirement deadlines, however, OSHA has agreed to not enforce these requirements as long as the nationwide 5th Circuit Court of Appeals stay is in effect.

Dec. 5, 2021:

Employers must: (1) collect each employee’s vaccination status; (2) require unvaccinated employees to wear masks; (3) educate employees on and promote the benefits of the COVID-19 vaccine; and (4) require employees who are COVID-19 positive to quarantine and set protocols for dealing with the same.

Jan. 4, 2022:

Employers must begin requiring testing of unvaccinated employees weekly. (Note: employers are not required to pay for testing).

NMPF has shared several documents with its Regulatory Committee to help understand and prepare for compliance with the ETS which we will be happy to share with the broader NMPF membership. NMPF has also shared the CDC’s Key Things to Know About COVID-19 Vaccines, OSHA’s Penalties document about supplying false information and OSHA’s Worker’s Rights Under the ETS document. These documents may collectively be used meet the employee education requirements.

Finally, NMPF provided the link to OSHA’s ETS page: COVID-19 Vaccination and Testing ETS | Occupational Safety and Health Administration (osha.gov)   This requirement will impact over 80 million workers in private sector businesses with 100+ employees.

Current Litigation Status

Lawsuits were filed in every Court of Appeals shortly after the ETS was issued, on November 16th all cases were consolidated and the 6th Circuit Court of Appeals was selected to hear the case.  The Court has set a schedule and it appears that the stay will remain in place until at least December 10th. Any decision by the 3-judge panel would be appealed “en banc” to all active judges in the 6th Circuit, after that an appeal would go straight to the Supreme Court.

Because this is an extremely high-profile issue, NMPF expects the litigation will move swiftly and the stay could be terminated any time after Dec. 10th. NMPF advises members to at the least be familiar with the issues, action and materials that will be needed should the stay be lifted. Those materials are available on NMPF’s website and questions can be directed to Clay Detlefsen on NMPF’s staff.

NMPF Vice Chair Urges Congressional Committee to Focus on Trade

Posted on by Theresa Sweeney

NMPF First Vice Chair and California dairy producer Simon Vander Woude highlighted the need for the U.S. government to pursue new market access opportunities in a Nov. 17 U.S. House of Representatives subcommittee hearing on agricultural trade.

Vander Woude, who also serves as chairman of California Dairies, Inc., pointed to the preferential market access that the European Union, Australia, and New Zealand have aggressively negotiated in a list of key dairy markets and the subsequent loss of American dairy competitiveness as the playing field continues to tilt against the United States. The list of priority markets to target for expanded access included China, Southeast Asia, Japan, the Middle East, and the United Kingdom.

“We farmers need a proactive trade policy to keep pace and continue to increase sales to support the good farm and manufacturing jobs our industry creates,” Vander Woude said.

Vander Woude in his testimony also said Congress and the administration need to address supply chain delays that call into question the reputation of the United States as a reliable supplier, as well as for enforcement of existing trade agreements. He noted that both new trade deals, such as the USMCA agreement, and longstanding bilateral agreements warrant strong enforcement, in addition to ensuring WTO members live up to their obligations to preserving hard-won market access opportunities.

“As Simon outlined so well to the House Livestock and Foreign Agriculture subcommittee today, exports are essential to the health of dairy farmers and to our wider industry,” said Jim Mulhern, NMPF president and CEO. “New access into markets like Canada and Japan last year was a welcome first step, but still far less than what our farmers need to remain competitive globally. The United States needs to begin moving forward again with trade agreements and other policies that expand foreign market opportunities to help family dairy farms thrive and support the thousands of jobs that depend on dairy across this country.”

October DMC Margin Shows Another Large Monthly Increase

Posted on by Theresa Sweeney

The October margin under the Dairy Margin Coverage program was $8.77/cwt, $1.85/cwt higher than a month earlier, as prices rose and feed costs fell. The October margin will produce a payment of about $0.73/cwt for coverage at the $9.50/cwt level. When eventually topped up with the full dairy-quality alfalfa cost figured in, this payment will rise to $0.96/cwt.

The October DMC feed cost dropped $0.55/cwt from a month earlier, mostly on a lower corn price, while the milk price rose by $1.30/cwt to $19.70/cwt. The increase was the third largest one-month increase since milk price-minus-feed cost margins were first calculated for federal dairy safety-net programs in 2014. Together with August’s increase, October’s margin rose $3.53/cwt over a two-month period.

The recent strength of milk prices is expected to continue through the end of the year, potentially ending this year’s unbroken string of margins below $9.50/cwt.