ITC Blueberries Decision Heads Off Potential Retaliation Concerns

The US International Trade Commission (ITC) unanimously voted Feb. 11 to reject import restrictions on blueberries from Mexico, Canada, Argentina, Chile and Peru, ending the threat of retaliatory tariffs against U.S. dairy exports.

In testimony before USTR in August, NMPF Senior Vice President Jaime Castaneda urged the commission to avoid putting U.S. dairy producers again in the crosshairs of a trade dispute with Mexico. Per U.S. census data, over $1.4 billion of U.S. dairy products were sold to Mexico in 2020 – a market that would be at risk if tariffs on blueberry imports from Mexico are imposed.

NMPF in December joined 34 other agriculture and food groups to write the US Trade Representative (USTR) opposing limitations on blueberry imports. This broader coalition effort also secured a bipartisan, bicameral Congressional letter from Senator Kyrsten Sinema (D-AZ) and Senator Jerry Moran (R-KS) arguing against action that would invite subsequent retaliation against U.S. agricultural exports.

Questionable Shipping Practices Prompt NMPF Action with Maritime Commission

NMPF staff, working together with the U.S. Dairy Export Council (USDEC), joined several agriculture organizations last month to press the Federal Maritime Commission to help address severe shipping-related challenges plaguing dairy and other U.S. agricultural sectors.

A shift in U.S. consumer preferences for stay-at-home goods has led to a surge in imports from Asia, driving up container demand around the Pacific Rim. Meanwhile, several agricultural exporters, including U.S. dairy, are struggling with cancelled shipments, exorbitant detention and demurrage charges, and broken contracts as shipping companies are moving containers and vessels quickly back to Asia. Freight costs are netting 20 to 30 times more from Asia to the U.S. than vice versa and carriers are restricting availability of containers to rural points of origin in the interior U.S., preferring coastal drop-off and pickup.

In multiple meetings with maritime commissioners in February, NMPF and other organizations representing agricultural exporters stressed the urgent need to step-up regulatory compliance on detention and demurrage guidelines issued last year and to explore ways to address the container shortage issues. Alongside these organizations, NMPF is pursuing congressional outreach to encourage tougher FMC enforcement while working with other sectors to evaluate the need for changes to legislation to better equip the FMC to deal with such issues.

NMPF Pushes Back on FDA Over Proposed Traceability Rule

NMPF filed comments Feb. 22 urging FDA to withdraw a proposed traceability rule that identifies what foods are high-risk and would warrant additional recordkeeping requirements to improve their traceability.

FDA proposed that all cheeses other than hard cheese should be considered high-risk foods.  FDA’s risk-ranking model, under the proposal, would place “pasteurized cheese, other than hard” as the riskiest of all foods in the marketplace — even above cheese made from raw milk, a finding NMPF thought was absurd.

This questionable ranking was partly caused by FDA adding a new criterion to its risk ranking model beyond what Congress had instructed it to do in the Food Safety Modernization Act, landmark food-safety legislation that became law in 2011. FDA added consumption data to the model, which had the effect of increasing a food’s risk rating due to its popularity. NMPF stated in its comments that popularity and risk do not go hand-in-hand — nor can FDA override what Congress has directed.

The comments also took issue with the agency’s interpretation that cheese made with pasteurized milk is not a food that has been subjected to a kill step, and therefore that full recordkeeping provisions should apply. Food subjected to a kill step has significantly fewer recordkeeping requirements, according to the proposed rule.

This rule, if put into effect, would increase consumer confusion, as FDA has long told consumers to choose pasteurized cheeses over raw-milk cheeses based on food safety concerns.

NMPF reviewed comments filed by the International Dairy Foods Association and supported their filing in its comments.

DMC’s January Payout Exceeds Annual Premium Costs

The margin in January for the Dairy Margin Coverage program, the main federal dairy safety-net initiative, was $7.14 per cwt, down from $8.78 per cwt in December. That generated a payment of $2.36 per cwt for $9.50 per cwt coverage for January – which, by itself, was already more than enough to repay the full cost of signing up for the program at the maximum coverage level for the entire year.

The January all-milk price dropped another dollar from December to $17.50 per cwt. Meanwhile, the remaining $0.64 per cwt monthly drop in the margin was generated almost entirely by increases in corn and soybean meal costs. The one-month increase in the margin’s feed cost was the highest for the DMC as well as for its predecessor, the Margin Protection Program, which was initiated in 2014.

With current futures prices indicating that the all-milk price won’t rise above January’s level for several months and that corn will keep rising and soybean meal will not get much cheaper over the same period, the program is expected to generate substantial payments in 2021.

Dairy Leadership Crucial in U.S., Global Climate Debate

The recent below-zero temperatures in Texas and a blast of late-winter snowstorms aren’t the only signals that climate conversations are destined to become more prominent in agriculture. The Biden Administration is showing its desire to participate actively in global decision-making, rejoining the Paris Climate Accord and making climate an early focus of executive orders. Congress is expected to tackle climate-change legislation this session. And newly confirmed Agriculture Secretary Tom Vilsack has pledged to make climate change – and climate-friendly incentives for farmers – central to his agenda in his leadership return at USDA.

And that’s just in the United States. Globally, climate concerns and food-production discussions are merging, with sustainability increasingly moving from buzzword to marketplace demand, to potentially a requirement to participate in the global food system.

The United Nations is convening a Food Systems Summit in September in which agriculture and sustainability will be the central discussion, and we are working shoulder-to-shoulder with our colleagues at Dairy Management, Inc. and the U.S. Dairy Export Council to make sure U.S. dairy’s leadership is recognized and to partner with other organizations in underscoring the nutritional value of our products as well as the sustainability advances already achieved. But the UN conversation could easily turn negative for dairy, given the role that anti-animal agriculture voices are playing in driving it.

Real movement domestically – and real threats globally – make it imperative that dairy be active as important choices are made. Fortunately, the dairy community, through the hard work of farmers and support for their efforts throughout the entire supply chain, has a proactive, positive story to tell. The Summit offers an opportunity we must seize to tell our story, which is essential in this new era.

We in dairy know just how effective we are in sustainably managing our operations. The U.S. dairy industry is responsible for less than two percent of the nation’s greenhouse gas emissions. Much of that is methane, a relatively short-lived gas that has an impact many scientists say is likely overstated. Meanwhile, according to the Food and Agriculture Organization of the United Nations, North American dairy – which is dominated by U.S. production – is the only dairy region in the world where absolute emissions decreased from 2005 to 2015, by a total of 5 percent. That occurred even as milk production increased over that same period.

Dairy is already part of agriculture’s climate solution, but U.S. dairy is going even further. Our Net Zero Initiative will make domestic dairy production carbon-neutral by 2050 and is accompanied by quantifiable, verifiable goals that will guide the industry to that destination.

We are also playing a leading role in seeking the public-policy solutions and incentives necessary to make plans reality. Last week we announced our membership in the Food and Agriculture Climate Alliance, a coalition of organizations across food, agriculture and the environment that collectively seek voluntary, incentives-based and market- and science-driven approaches to tackle climate policy and build resilient rural communities. Through leading by example in agriculture and building consensus among its constituents, U.S. dairy farmers can meet ambitious goals that will improve our prosperity as well as the planet’s health, with benefits for all.

But before we paint an outlook that’s too rosy, an important note: For all our leadership within the U.S., numerous vocal advocates in the world are in a different place.

While we seek solutions, others, many of whom have an interest in agriculture but live outside it, are calling for certain farmers not to be part of a “solution.” Instead, such farmers would be swept up (and perhaps swept aside) by “revolution,” one they envision would create a sector with less (if any) livestock, fewer farm inputs, and a bias against technological innovation. As U.S. dairy relies more on global markets, and as global actions on climate-change increasingly affect how the U.S. does business, these realities become ever-more-important to address.

As always, the solution is to never shrink from the challenge. The common goal of improving the planet requires neither surrendering to a misguided agenda nor ignoring the problem. Again: We all know what a positive story dairy can tell and the sizable sustainability investments that the U.S. dairy sector in particular is making. Tangible progress on emissions. Innovative practices that can be widely adopted in all regions, on farms of all sizes, with proper incentives. Ambitious goals backed by data. The reality is the world would be better off if the rest of the global dairy industry became as efficient – in milk production and resource use – as U.S. dairy. But much of the global audience, through misunderstanding or simple self-interest, is skeptical of this message.

This is our task in advocacy. As we’ve seen in recent years, in our response to the coronavirus crisis and to our own economic challenges, we can get things done when we’re united and clear in what we set out to achieve. Dairy can and will be – and in fact, always has been – a positive contributor to sustainability solutions. Our products nourish people around the world, and we care for its resources well. Tumultuous weather will always be with us – but with growing shifts in climate, those challenges are becoming more calamitous. We are rising to the challenge as well, as a domestic and global solution and as an informed voice in all debates. We look forward to the opportunity.

Dairy Defined: The World Wants U.S. Dairy

The false-but-pernicious idea that dairy is dying has already been laid to rest multiple times. Per-capita consumption of all dairy is its highest since the 1950s. Even fluid-milk purchases (the dairy opponents’ cherry-picked data of choice) rose at grocery stores last year, as consumers sought out what they needed most during a time of higher stress.

But even all that analysis fails to point out another, increasingly important fact crucial to understanding U.S. dairy’s true importance: More than ever, it’s not just Americans seeking out these high-quality, high-nutrition products. U.S. dairy increasingly nourishes the world, with 2020 the most emphatic illustration of that point.

U.S. Dairy Exports Reach Record

Last year, total milk solids exports (the measurement accommodates for the different types of products milk’s made into) topped 2 million metric tons for the first time, reaching 2.086 million, based on government data crunched by the U.S. Dairy Export Council. Revenues were the highest since 2014. And the percentage of U.S. milk production that’s shipped to other countries increased to 16 percent, showing just how important exports are becoming for U.S. dairy producers – and the consumers around the world who rely on them.

These gains will only continue, given the markets that most crave U.S. dairy. Of those exports, 27 percent were to Southeast Asian markets, 21 percent went to Mexico and 15 percent to China – all areas with growing populations, along with the growing wealth that correlates with greater demand for the high-quality proteins and nutrients that dairy provides.

As the world’s leader in dairy greenhouse-gas reductions and as a trailblazer in animal-care practices, U.S. dairy farmers play an increasingly vital role in sustainably providing nutrition well beyond its borders. The world’s consumers are taking notice. We hope its narrative-setters soon will too.

NMPF Statement on Additional COVID Relief Package

“NMPF is grateful to Congress for working to enact additional COVID-19 stimulus legislation. The pending bill includes critical additional agriculture and nutrition support intended to help farmers, rural communities, and food-insecure households throughout the nation.

“Throughout the COVID-19 pandemic, the federal government’s strong response has proven invaluable to dairy producers as they keep working, day-in and day-out, to sustainably provide families here at home and abroad with an abundant supply of nutritious dairy products. However, while the availability of a vaccine is cause for hope, difficult months remain ahead.

“NMPF appreciates the additional $3.6 billion Congress would provide to bolster food supply chains and facilitate additional purchases and donations of dairy and other food products to those who need them most. NMPF also supports the legislation’s increased funding for the Supplemental Nutrition Assistance Program and the Commodity Supplemental Food Program, which will provide dairy and other nutritious foods to those households and senior citizens who have faced added hardship and unique struggles during this challenging period.

“Finally, the package includes important provisions that strengthen resilience and improve equity in rural America and take critical steps to improve the livelihoods of historically underserved farmers, including debt relief and access to credit. These actions will better position all parts of the country to recover from the stresses of the pandemic and strengthen our communities for years to come.”

NMPF Statement on Confirmation of Tom Vilsack as Secretary of Agriculture

From NMPF President and CEO Jim Mulhern:

“All of U.S. agriculture has an effective advocate in Tom Vilsack, and the nation will be well-served by his return to public service leading the U.S. Department of Agriculture.

“We in the dairy community who have had the opportunity to work with him have seen first-hand his deep passion for rural America and his commitment to advancing agriculture and the communities it serves, from farmers and food-sector workers to the consumers and businesses that depend on USDA to meet their needs every day, in every way. That’s especially important in light of today’s pressing challenges, which include a farm economy battered by the COVID-19 pandemic; climate change, sustainability and the environment; nutrition and food insecurity; international trade policies that limit U.S. exports; labor shortages that are worsening with time; and the legacies of societal injustice that need to be addressed.

“Tom Vilsack’s experience and leadership will be crucial to meeting these challenges, and more. We congratulate him on his confirmation and pledge to do our best to contribute to his successful service.”

Dairy Playing Its Part as a Climate Solution, NMPF’s Jonker Says

Through commitments like the Net Zero Initiative and efforts like the National Dairy Farmers Assuring Responsible Management (FARM) Program, dairy farmers are well-positioned to be agricultural leaders in mitigating climate change, said Dr. Jamie Jonker, NMPF’s Vice President for Sustainability and Scientific Affairs, in an NMPF podcast released today.

“We’re producing more milk, we’re having less greenhouse gas emissions overall, which means that the U.S. dairy sector is already the most efficient in the world,” said Jonker, who also serves as chairman of the International Dairy Federation’s Science Program Coordinating Committee. Still, farmers face regulatory and financial challenges in their efforts to reduce greenhouse gas emissions and increase the sustainability of their resource use, he said. “The biggest challenge is really the technology and financial side. If we’re not able to have our dairy farmers afford to make changes in their operations, then they cannot put these technologies and best practices into practice on their farms.”

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

Biden Immigration Plan the Starting Point for Negotiations

The Biden Administration this week put forward an immigration reform package that would give a path to citizenship for immigrants already in the United States. That plan would give priority to ag workers, but would not expand the H2A visa plan for those ag workers.  Paul Bleiberg of the National Milk Producers Federation joins Pro Farmer’s Jim Wiesemeyer and John Herath of Farm Journal to sort through the details of the immigration proposal on this week’s DC Signal to Noise Podcast.  The three see the Biden immigration package as an opening offer in what will be a series of negotiations over issues such as the ag exemption for overtime and an expanded H2A program.

Other issues covered in this episode:

    • USDA Ag Outlook projects record corn and soybean acres
    • Climate at the center of USDA Ag Outlook
    • When will CFAP money be released?
    • Update on COVID aid package