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More Work Begins When New Dairy Programs Take Effect

Posted on by Theresa Sweeney

Achieving policies that benefit the nation’s dairy farmers is one of the most gratifying parts of working on their behalf. Since the COVID pandemic began in 2020, there has been no shortage of federal acronyms – CFAP, PPP, EIDL, etc. – for programs to help family farms through difficult times. But these initiatives are also complex and imperfect, which is why once a program takes effect, the work has often only begun.

In dairy, USDA is currently implementing two important new initiatives – the Dairy Donation Program or DDP and the Pandemic Market Volatility Assistance Program or PMVAP – while another major program, Dairy Margin Coverage, prepares for 2022 signup. Even as we’re still working to improve them, it’s crucial over the next few months that the dairy community understand and benefit from these programs. As always, we at NMPF will do our best to both lead and assist as these important initiatives roll out.

The Dairy Donation Program, enacted by Congress late last year, represents a very important advance for the industry. We’ve been proud to shepherd it through the legislative and regulatory process, from proposing the initial idea to encouraging its use for all forms of dairy products, a change from the previous Milk Donation Reimbursement Program, which provides limited reimbursements for certain fluid milk product donations. We’re now actively working to help implement DDP, both through our partnership with Feeding America and by informing our members about the program on everything from how to set up relationships between dairy cooperatives and vendors to the ins and outs of how some processing costs will be covered.

It’s important to remember that donations can be reimbursed retroactive to Jan. 1, 2020, and that for now, only the first $400 million of donations will be compensated, making it smart to begin relationships with food banks and other charities that can receive and donate dairy foods. Although USDA expectations are that the full amount of funding will be used over several years, the sooner we demonstrate the benefits of DDP by exceeding USDA’s expectations, the earlier will be able to work to pursue additional resources.

Strengthening ties between dairy community farmers and the cooperatives they own with those helping families who will benefit by receiving dairy products is a great win-win, as it supports the resilience of our communities and ensures that everyone benefits from nutritious dairy products.

The Pandemic Market Volatility Assistance Program (PMVAP) is an important – if still incomplete — gain for dairy. We worked closely with USDA to demonstrate that last year’s price volatility harmed farmers and required a remedy, and PMVAP is an important first step toward recouping the $750 million farmers lost because of the 2018 Farm Bill’s change to the Class I mover that needs to be followed by an eventual fix to the mover itself. It wouldn’t have happened without months of careful consultation between NMPF and USDA that led to the program, which restores $350 million of those losses.

That amount, to be sure, doesn’t fully address the past losses, nor does it prevent future shortfalls. Nor does the program’s approach to allocating funds adequately account for differing farm sizes or regional impacts. But for all its faults, it’s important that farmers and cooperatives maximize PMVAP’s benefits, even as we work with advocates in Congress to obtain additional assistance. Milk handlers who will distribute the funds are already in discussion with USDA on how to do it, and farmers should receive payment during this year’s fourth quarter. Meanwhile, we are working with our members to secure the necessary improvements, and our Economic Policy Committee is discussing a more fundamental fix to various FMMO issues, including the Class I problem itself.

Finally, farmers should be on the lookout over the next few weeks for information on 2022 signup for the Dairy Margin Coverage program, the main federal safety net for dairy farmers that arose from efforts we and the dairy community made to improve assistance in the 2018 farm bill. DMC has something for every producer – inexpensive catastrophic-level coverage for larger producers and cost-effective margin insurance for everyone’s first five million pounds of milk annually. For this year’s signup, USDA improvements to the feed-cost formula and the use of updated production data – both of which fulfill longstanding NMPF goals – make the already compelling case for DMC even stronger, with payments that this year so far are averaging out to 7 percent more than they otherwise would have been just from the alfalfa-price adjustment alone.

Working to strengthen dairy farmers is why we’re here, and we’re proud of these gains. But the puzzle pieces are many, and the picture isn’t complete until they’re properly put together. We’re excited to help our members and the dairy community with assembly over the next several months, and beyond.

NMPF Applauds USDA Climate-Smart Initiative, Supply Chain Assistance

Posted on by Theresa Sweeney

The National Milk Producers Federation, which represents U.S. dairy farmers and the cooperatives they own, commended the Biden Administration and Agriculture Secretary Tom Vilsack for key steps announced today to assist U.S. farmers and consumers with current challenges while charting a course toward a long-term, climate-smart future for all of agriculture.

“NMPF applauds Agriculture Secretary Tom Vilsack and his team at USDA for its  climate smart agriculture initiative announced today,” said NMPF President and CEO Jim Mulhern. “By aiding the finance of climate-smart farming practices and the marketing of climate-smart commodities, this initiative will ensure even greater U.S. leadership in sustainably feeding the planet. It also will help keep U.S. farmers competitive in a global market that’s increasingly sensitive to agriculture’s effects on climate.

“U.S. dairy farmers have been and will remain leaders in sustainable agricultural production, supporting innovative use of technology and committing to a carbon-neutral future through its forward-thinking Net Zero Initiative. The recently concluded UN Food Systems Summit showed how U.S. government leadership can foster productive dialogue on agriculture and the world’s future climate. Dairy supports these efforts and looks forward to working with USDA and other agencies on crucial climate initiatives.”

Congress is currently considering additional conservation funding with an emphasis on climate smart practices. NMPF led a broad coalition last month supporting new investments in conservation programs targeted toward climate smart practices that can yield meaningful environmental benefits.

Mulhern also praised USDA’s move to provide $500 million in relief from agricultural market disruptions, such as backlogs at U.S. ports that are impeding the flow of dairy products to the consumers worldwide who are demanding them.

“In addition to these important climate initiatives, U.S. dairy farmers appreciate USDA’s allocation of Commodity Credit Corp. funds to alleviate the economic damage caused by recent backlogs at U.S. ports that are hindering access to critical markets overseas,” Mulhern continued. “Although dairy exports are at a record pace, it is coming at a heavy cost to our members and to exporters of U.S. dairy products. Foreign buyers are demanding even greater volumes while voicing growing concerns about U.S. reliability. We stand ready to assist the administration any way we can to help alleviate the ports crisis and aid those who have been negatively affected.”

 

All Too Quiet on the Fake-Dairy Front

Posted on by Theresa Sweeney

The news has been quiet on the fake-dairy front. Too quiet.

To update on the latest from FDA, which regulates food-product labeling: FDA is saying it will offer guidance on the labeling of plant-based milk alternatives by June. But indications of what that may actually mean are sparse, even though the agency’s own course of action – should they choose to follow their own rules — is clear.

A new rule on yogurt labels put into effect in July is a helpful, and hopeful, sign. The rule robustly defends standards of identity that ensure consumers purchase products that meet their expectations. As dairy farmers, and consumers, have always maintained, how a food is made, and where it comes from, matters. FDA’s recognition of that is a big win for labeling integrity, one we’re hoping is reflected in next year’s guidance.

But beyond that, nada from an agency that hasn’t inspired confidence via its 40 years of neglect on this issue. The quiet isn’t just unusual, it appears to be willful. In the past year, we at the National Milk Producers Federation have sent two letters – one last October, and another last month, to the FDA’s ombudsman, the office within the agency that members of FDA-regulated industries go to when they experience problems with the regulatory process.

Other than an acknowledgment of receipt of the first letter, again, nothing. And that’s strange, because, as we note in our second letter, if the FDA uses its guidance next June to do anything other than defend its own standards:

We caution FDA that rewriting an existing rule with guidance would be a violation of the Administrative Procedures Act (APA). The APA requires regulatory changes to be made using notice and comment rulemaking which a guidance cannot overrule. In addition, some federal courts are no longer bowing to an agency’s use of enforcement discretion when such discretion is broad and long-term and amounts to a de-facto re-write of existing rules.

And that makes us wonder what FDA is worried about. With food-labeling litigation becoming ever-more sophisticated and time-consuming, the temptation for a federal agency to simply throw up its hands on a hot-button issue would be high. We also know the lack of a new commissioner can slow down decision-making. And it’s not as if the agency isn’t trying to catch up on other pressing matters.

But that’s not serving the interest of the consuming public, which FDA is charged to do. And this issue isn’t a heavy lift – once again, as the FDA states, “Milk is the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows.” That’s the standard. Full stop.

And without that respect for standards – the same respect showed in the yogurt rule – and the courage required to enforce them, a Wild West approach to labeling predominates. And the problem of consumers being misled into incorrect notions of nutritional equivalence by bad-faith labeling – one that’s literally contributed to child malnutrition — only worsens.

We’re hoping to hear back soon.

Joint NMPF and USDEC Statement on UN Food Systems Summit

Posted on by Theresa Sweeney

From NMPF President and CEO Jim Mulhern:

“The National Milk Producers Federation commends U.S. officials for their leadership throughout the UN Food Systems Summit process, including the pre-summit ministerial meeting in Rome and today’s important UN discussions. We especially thank U.S. Secretary of Agriculture Tom Vilsack and USAID Administrator Samantha Power for clearly laying out key commitments of the United States in the journey to enhanced food systems. Global progress requires global engagement, and as the world’s leading producer and exporter of food, U.S. leadership is crucial to furthering sustainable approaches that enhance food and nutrition security for all.

“U.S. dairy farmers are proud of our industry’s critical support of food and nutrition security and sustainability through world-leading farming practices that create high-quality milk and dairy products. Animal agriculture plays an important role in providing a sustainable source of nutrition that’s critical for healthy diets and communities as well as a healthy planet, and we are encouraged by the many statements by world leaders today recognizing this important fact.

“U.S. dairy is proud to be part of the new Coalition of Action for Sustainable Productivity Growth for Food Security and Resource Conservation led by the U.S. government. We’re ready to do the work needed to advance the pragmatic, forward-looking approach the U.S. has charted throughout the summit’s process, in collaboration with other key players worldwide. This wide-ranging effort includes encouraging innovation through initiatives such as U.S. dairy’s Net Zero Initiative. It means applying the best science learned and adapted through our internationally recognized FARM Program. And it also means through working to mitigate food and nutrition insecurity by advocating for school milk programs worldwide, along with other important priorities.

“Some have viewed the summit as an opportunity to issue lengthy lists of do’s and don’ts to the farmers worldwide who work hard every day to feed us all. We’re proud to promote an approach that recognizes that farmers everywhere advance sustainability in many ways – with America’s dairy farmers at the forefront. Rather than trying to impose a uniform, misguided ideology on how the world eats, farms and produces food, we all need to do our part to use limited resources wisely and efficiently to feed a growing world population in environmentally sounds ways.

“NMPF looks forward to future events, such as the UN’s Climate Change Conference in November, as benchmarks to highlight and encourage further progress toward more innovative and efficient production practices. More than that, we look forward to productive, collaborative efforts that advance these goals.”

 

From USDEC President and CEO Krysta Harden:

“The U.S. Dairy Export Council deeply appreciates the extensive, high-quality work and crucial leadership the U.S. government has shown during the UN Food Systems Summit in fostering positive discussion on how the global food system can work for everyone. At a time when food and nutrition insecurity is tragically increasing in many parts of the world, the U.S. dairy industry is proud to be part of global solutions for feeding more people, more nutritiously and more sustainably than ever before. We applaud U.S. Secretary of Agriculture Tom Vilsack and USAID Administrator Samantha Power for their important remarks today highlighting the U.S. government commitments to improve global food security and invest in climate smart agricultural practices. And we look forward to working in the months ahead, both with the U.S. government through its Coalition of Action for Sustainable Productivity Growth for Food Security and Resource Conservation and with other crucial players, to build on the ambition and momentum the summit has generated to deliver a more sustainable global food system that works for all.

“Throughout these food-systems discussions, a few key principles are clear. Rules-based international trade matters. Science-based, practical policies matter. Access to affordable, nutritious foods matter. Without these key principles, conflict arises, ideology triumphs over principle, and human health suffers. To support these principles, we reaffirm our commitment to advancing science and evidence-based policy making, promoting rules-based international trade, minimizing environmental impacts without sacrificing overall diet quality and diversity, and avoiding food-systems approaches that lack the flexibility necessary to address diverse national, cultural, and personal circumstances. Instead of advancing flawed ideology, we will work with coalitions of like-minded countries and stakeholders around priority issues that encourage real progress towards more sustainable food systems and support U.S. dairy producers and exporters.

“The U.S. dairy sector excels at providing the world’s most sustainable milk at the highest level of quality, of which the world will only need more as population grows and nutrition demands increase. As an industry, U.S. dairy’s commitment to sustainability, productivity and nutrition security makes it a case study — not just in the livestock sector, but in all of global agriculture — of continuous improvement for the world’s benefit.

“We offer our continued support for the UN’s Sustainable Development Goals, for greater food and nutrition security, and all aspects of sustainability in the United States and worldwide. This dialogue will continue, and we are excited to contribute to it alongside robust U.S. leadership.”

Dairy Nourishes Africa, Building an Industry and Resilience

Posted on by Theresa Sweeney

With the UN Food Systems Summit this week and World Food Day next month, dairy’s global leadership in building sustainable, robust food chains are in the spotlight. Dairy Nourishes Africa, an initiative from Global Dairy Platform, is developing dairy’s potential in East Africa, where nutrition needs are great and dairy provides an economically promising, sustainable solution.

“It’s an opportunity for U.S. dairy to build a business base in one of the fastest-growing regions in the world over the next 20, 30 years,” said Andrei Mikhalevsky, a former CEO of California Dairies Inc. and an advisor on the DNA Project. “And it gives the US dairy industry a real opportunity to make a difference in this part of the world and to do good, starting with the work in Tanzania.”

The podcast focuses on one project, a small dairy processor in the Southern Highlands of Tanzania called Sebadom founded by entrepreneur Anaty Kokushubira Kombeson and her mother. Working with DNA, the processor is supplying local schools and working with smallholder farmers to supply fresh milk while creating jobs.

“We started this company when I had my kid, she’s six years now. When she was about to start consuming dairy products, it was a bit of a challenge to get the quality milk for her,” she said. “Because of that challenge that we faced, that is where Sebadom came in.”

Also discussing DNA and dairy’s promise are Jay Waldvogel, a board member of Global Dairy Platform and Senior Vice President of Strategy and International Development for Dairy Farmers of America, and Dai Harvey, DNA’s Regional Technical Director with Land O’Lakes Venture37, the project’s implementing partner.

To learn more about Global Dairy Platform and the DNA effort, visit globaldairyplatform.com. People interested in contributing to the effort can write the program at dna@globaldairyplatform.com. And Anaty has an Instagram page, be sure to follow it at instagram.com/sebadomyoghurt. 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. Please attribute information to NMPF.

NMPF Cooperative Leader Spotlights Need for Class I Pricing Changes at Senate Hearing

Posted on by Theresa Sweeney

Congress must do additional work to ensure dairy farmers are fairly compensated for losses rooted in a change to the pricing formula for Class I milk, a leader of Agri-Mark Cooperative and a member of NMPF’s Economic Policy Committee said today in a hearing called by Senate Agriculture Committee dairy subcommittee chair Sen. Kirsten Gillibrand (D-NY).

The hearing focused on issues related to milk pricing and the Federal Milk Marketing Order system, which has shown strains during the COVID-19 pandemic due in large part to flaws in the current Class I mover and its ripple effects through dairy revenues.  The pandemic “has created an even greater urgency to revisit orders,” said Catherine H. de Ronde, vice president for economic and legislative affairs for Agri-Mark, based in Andover, Massachusetts, in her testimony. “Negative PPDs had milk checks looking incredibly bizarre, de-pooling at a level never-before seen became a new phenomenon for many. The change to the underlying Class I mover was a key catalyst of these outcomes.”

The 2018 Farm Bill changed the Class I mover, which determines the price of fluid milk under the Federal Milk Marketing Order system, at the urging of dairy processors who sought greater price predictability. The change contributed to substantial market volatility last year and has led to an estimated $750 million in losses for farmers compared to the previous Class I formula. Without a fix, dairy farmers will permanently bear unfair and unnecessary price risk compared to processors during times of unusual market volatility.

USDA plans to mitigate last year’s losses somewhat through its Pandemic Market Volatility Assistance Program, which will reimburse farmers for $350 million of those losses. But that initiative distributes payments unevenly, requiring further remedies to equitably fill the gap for producers of all sizes.

“The National Milk Producers Federation appreciates the work of Senators Gillibrand and Hyde-Smith for today’s initial examination of crucial milk pricing issues,” said Jim Mulhern, president and CEO of NMPF. “Dairy farmers have done their best to navigate this ongoing crisis, aided in part by necessary disaster assistance. But without equitable assistance, many family dairy farmers across the nation will needlessly struggle from the effects of the Class I mover change they’ve already felt. And without a change in the mover, we can only expect these struggles will recur.”

Gillibrand leads the Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security. Sen. Cindy Hyde-Smith (R-MS) serves as the subcommittee’s Ranking Member.

U.S. Dairy Industry Supports Nomination of Elaine Trevino for Chief Agricultural Negotiator

Posted on by Alan Bjerga

On behalf of America’s dairy farmers, exporters and manufacturers, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) commend President Biden’s selection of Elaine Trevino as the Chief Agricultural Negotiator for the Office of the U.S. Trade Representative.

“The role of Chief Agricultural Negotiator is essential in pursuing positive trade policy results for U.S. dairy farmers and in expanding overseas markets for dairy products,” said Jim Mulhern, president and CEO of NMPF. “NMPF is pleased that in choosing Ms. Trevino to nominate for this position, President Biden has selected someone with the right background and clear understanding of trade’s importance to American agriculture, both of which are vital to success in this position. I’ve been fortunate to serve on the president’s Agricultural Policy Advisory Committee with Ms. Trevino and hope to see swift confirmation of her nomination by the Senate so she can commence the work that’s so key for farmers across the country.”

“U.S. dairy farmers, exporters and manufacturers have been eagerly awaiting the nomination of a Chief Agricultural Negotiator given the sizable role that trade plays in providing a home for the equivalent of more than a day’s worth of U.S. milk production each week,” said Krysta Harden, president and CEO of USDEC. “The world needs U.S. dairy and U.S. dairy needs the world. Our industry is eager for additional market opportunities to help us create more jobs here in America as we meet that demand with our high-quality, sustainably produced products. We urge the Senate to move swiftly to confirm Ms. Trevino and look forward to working closely with her to expand markets around the world.”

Dairy Associations Urge Additional White House Action on Ports Crisis

Posted on by Alan Bjerga

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) joined several other organizations urging the Biden administration to take additional steps to alleviate the ongoing ports crisis in a letter sent today to the White House from a coalition of 77 agriculture and food associations.

Since early 2021, dairy and other agriculture exporters have been facing unprecedented challenges in securing shipping container space on ocean vessels while contending with an accumulation of exorbitant detention and demurrage fees. Foreign owned and operated ocean carriers have been driving this crisis by providing unpredictable and unreasonable timelines for exporters to load agricultural goods and by exacerbating pressure on supply chains by opting to return empty containers rather than allowing time for them to be loaded with Asian-bound goods for the vessel’s return journey. As a result, over 70% of containers are leaving West Coast ports empty, an all-time record.

Delays and an intentional lack of transparency and flexibility from ocean carriers have cost American dairy exporters over $300 million dollars through just the first half of the year, or 12% of total export value. In addition to this added cost, continued delays put at risk critical trading relationships with Asian importers as the U.S. increasingly risks becoming viewed as an unreliable supplier.

“We thank the Biden administration for the initial actions taken to address the extraordinary challenges dairy exporters are facing when exporting their products,” said Krysta Harden, USDEC president and CEO. “Unfortunately, the shipping crisis only continues to grow as container availability becomes scarcer with the ocean carriers’ increasing refusal to export American-made products. To further its goals of supporting the workers and companies producing Made-In-America products, we are urging the White House to take a more active role in ensuring that foreign carriers are not permitted to dictate U.S. export flows and put our established trading relationships in jeopardy. Right now, imports seem to be enjoying the equivalent of an eight-lane highway while our exports have been relegated to narrow country roads; that’s not right and we know that Congress and the Administration can take steps to create fairer trading practices.

“Without question, ocean carriers are abusing a unique situation created by the pandemic and the lack of sufficient regulatory action to enforce reasonable shipping practices,” said Jim Mulhern, NMPF president and CEO. “We recognize that increased import demand has driven higher rates for shipping, but it does not warrant the cancellations, refusal to load U.S. dairy and agriculture products, and unreasonable detention and demurrage practices that ocean carriers have turned into an additional revenue stream. It is imperative that the Administration takes immediate steps to work with Congress and the FMC to limit these unfair practices and ensure our exporters can reach their customers around the world.”