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USDA Announces NMPF-Backed DMC Enhancements, 2022 Signup Underway

Posted on by Theresa Sweeney

NMPF is urging farmers to sign up for maximum coverage in 2022 under the Dairy Margin Coverage (DMC) program.

This year’s signup, with a deadline of Feb. 18, is accompanied by new enhancements that make the program more valuable than ever for producers seeking protection against unforeseen market risks. NMPF-backed improvements include an enhanced feed cost formula to better reflect the cost of high-quality alfalfa hay, and Supplemental DMC enrollment for many producers whose milk production has increased since 2014.

More than $1.2 billion – a record – in DMC payments are expected to be distributed to dairy producers under the 2021 program, according to USDA data as of Jan. 3.

“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, in a statement when the program was announced.

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.

DMC in 2022 will fully incorporate the premium-quality alfalfa price into the DMC feed cost formula, an improvement from the previous structure that used a 50-50 blend between the premium-quality price and the overall average price. USDA also will make retroactive payments to producers using the new formula, dating from 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.

More information about the DMC Program, including a webinar detailing this year’s improvements and a Supplemental DMC Q&A, can be found here.

U.S. Wins USMCA Dispute with Canada Over Dairy Market Access

Posted on by Theresa Sweeney

More than a year of work from NMPF and the U.S. Dairy Export Council (USDEC) reaped dividends for dairy Jan. 4, as a landmark decision found that Canada is improperly restricting access to its market for U.S. dairy products and violating its U.S.-Mexico-Canada Agreement (USMCA) tariff-rate quota (TRQs) commitments.

The case, the first of any kind brought before a USMCA Dispute Settlement Panel, was launched with broad bipartisan support last May after months of urging from NMPF and USDEC, which is urging 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, calling the decision” an important victory for U.S. dairy farmers and the millions of Americans whose jobs are tied to the U.S. dairy industry.”

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, 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 its quotas to Canadian dairy processors who have little incentive to import, does not provide fair or equitable procedures for administering the quotas, and does not give retailers any access to them. These measures deny the ability of U.S. dairy farmers, workers, and exporters to use the TRQs and fully benefit from 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.

Trade Win Over Canada Builds on Dairy’s Policy Successes

Posted on by Theresa Sweeney

Every day, across the full range of dairy policy and on-farm needs, NMPF seeks tangible gains for our members. Only a few days into the new year, our approach is already serving dairy well in 2022.

After focused and relentless efforts from NMPF, our member cooperatives and the U.S. Dairy Export Council, dairy farmers are on track to gain greater, well-deserved access to Canada’s dairy market. A USMCA Dispute Settlement Panel on Tuesday agreed with the United States that Canada is not living up to its end of the dairy deal it agreed to under the U.S.-Mexico-Canada Trade Agreement.

NMPF’s been fighting for U.S. dairy farmers throughout. I and members of my staff serve as confidential advisors to the U.S. Trade Representative, and we were able to press our case on the need for U.S. government action to call Canada to account. As the conflict unfolded, we were able to build support among lawmakers and trade officials for forceful action. In fact, the resolution mechanism itself may not have been so robust without NMPF/USDEC efforts – dairy urged that strong dispute settlement procedures be included in USMCA. The dispute over Canada’s dairy policies, which backtracked on Canada’s promises of greater U.S. dairy market share, was that mechanism’s first test.

And U.S. dairy, led by its cooperatives, won, sending a signal not just to Canada but to other trading partners as well about the importance of abiding by their trade commitments.

The gain is the latest in a string of wins for our members. In the past few months alone, we’ve taken the lead in achieving:

  • A boost in federal insurance against market risk for dairy farmer through USDA’s new alfalfa-cost calculations under the Dairy Margin Coverage program. The gain of 23 cents/cwt. in enrolled production in 2020 and of 20 cents/cwt. in 2021, announced last month, goes above and beyond the improved feed-cost calculation we had already achieved after DMC’s creation in the 2018 Farm Bill. It’s one of many safety-net improvements that have given dairy farmers hundreds of millions of dollars more in additional income beyond what they otherwise would have received.
  • Along with the alfalfa-cost improvement, the Supplemental DMC program implemented in December provides additional payments to those producers whose Dairy Margin Coverage production history is below five million pounds but has increased since 2014.
  • In the Infrastructure Investment and Jobs Act signed into law in November, the bipartisan, NMPF-backed DRIVE Safe Act addresses the ongoing shortage of truck drivers nationwide by creating an apprenticeship program for young adults ages 18-21 who already hold Commercial Drivers Licenses to drive in-state to be able to cross state lines. Also in the bill are NMPF-advocated broadband provisions that allocate more than $65 billion to increase high-speed internet access, improving service in rural areas.
  • Dairy Donation Program implementation in late August culminated 18 months of NMPF’s work with Congress and USDA. The program uses $400 million to facilitate and expand existing partnerships between dairy organizations and non-profit distributors like food banks to combat food insecurity, increase dairy consumption, and minimize food waste. The program reimburses dairy co-ops and other processors for the full value of the raw milk needed to make the dairy product, as directed by Congress. NMPF also worked with USDA to secure reimbursement for processing and transportation costs.
  • After a months-long campaign by NMPF and the U.S. Dairy Export Council, Colombia’s Trade Ministry in December informed the U.S. Ambassador in Colombia that the agency was concluding a milk-powder safeguard investigation by deciding there was insufficient evidence to impose tariffs on U.S. exports, safeguarding dairy sales to a growing market. That decision agreed with legal and market assessments that USDEC, working with NMPF, delivered to Colombia’s government, helping to maintain our sixth-largest market for U.S. milk powder exports.
  • Also in December, the U.S. House of Representatives passed the Ocean Shipping Reform Act by an overwhelming bipartisan margin of 364-60. NMPF, USDEC and other agricultural organizations have been pursuing a months-long, multi-pronged approach to tackling the shipping crisis, an effort that remains underway. In response to such efforts, the Biden Administration has now adopted a more-muscular approach toward foreign shippers that pass on transporting U.S.-made goods, positioning the industry well for legislative progress as we pursue companion legislation in the Senate in the new year and for further steps by the Administration to tackle the complex challenges of the export supply chain crisis.

We’ve also seen gains that help dairy operations do what they do best – provide high-quality, nutritious products to Americans and the world.

  • The FARM Program has restarted in-person evaluations, assuring the supply chain that dairy farmers are continuously improving the top-quality animal care, antibiotic stewardship, biosecurity, environmental stewardship, and workforce development that consumers demand. FARM also was cited as a “game changer” in dairy sustainability at the UN Food Systems Summit in September, helping further cement U.S. dairy as a global stewardship leader as that becomes a greater key to competitiveness. NMPF was a leader in defending U.S. agriculture against attacks on animal agriculture at the summit.
  • And after coordinated comments with other agricultural organizations, EPA in early December decided to delay a decision on the use of pyrethrins in agriculture until at least 2024 after EPA had advocated for their prohibition. Pyrethrins are the most effective and safe product to use for adult fly control on agriculture operations.

Each success helps dairy farmers in our member cooperatives – NMPF’s core mission – as we head into 2022.

The year’s challenges will be many. A new Farm Bill looms in 2023; this is the year the debate becomes fully engaged. Federal Milk Marketing Order issues demand attention. Progress toward sustainability goals remain crucial on the farm and in the global marketplace. Plant-based dairy alternatives continue to compete with dairy using unfair labels, with FDA action on the issue expected in the year’s first half, and cell-based imposters loom on the horizon. The Administration remains stalled on the pursuit of new trade agreements which are urgently needed to further expand opportunities for our exports.

Our progress builds confidence that 2022 will also bring tangible policy and on-farm gains for our industry. We look forward to more progress as our challenges evolve, the dairy producer community comes together as one to meet them, and we move our industry forward.

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.

NMPF’s Bjerga on DMC

Posted on by Alan Bjerga

NMPF Senior Vice President of Communications Alan Bjerga discusses this year’s enhanced benefits under the Dairy Margin Coverage Program on RFD-TV. A better feed-cost calculation and a production update for some smaller producers- are 2022 highlights for DMC, which along with risk-management initiatives such as Dairy-RP and LGM-Dairy from USDA, offer a wide range of tools for producers, all made more workable and useful via NMPF advocacy.

High Plains Ponderosa and Shell create fuel now, and a net-zero tomorrow

Posted on by Alan Bjerga

In an innovative collaboration that’s pointing dairy – and transportation – toward a net-zero future, Royal Dutch Shell and High Plains Ponderosa are working together to construct their first integrated dairy manure to renewable natural gas (RNG) facility in Plains, Kansas. Greg Bethard, General Manager, CEO and CFO of High Plains Ponderosa Dairy, says that in addition to the carbon reduction, sustainability at the dairy means longevity and economic viability.

“It is gratifying to contribute to reducing carbon load in the atmosphere while making positive enhancements to our dairy and our business,” Bethard says. “That is a win-win for everyone.”

In the latest Farmer Focus, Shell and Bethard share what led them to the inception of the RNG facility and why animal care and sustainability are so important to their shared 2050 goals.

For more Farmer Focus stories, co-sponsored by NMPF and the FARM Program, check out NMPF’s Sharing Our Story page, which also includes its Dairy Defined thought-leadership series and CEO’s Corner, a monthly column from NMPF President and CEO Jim Mulhern.

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’s Galen on DMC Signup

Posted on by Alan Bjerga

 

NMPF Senior Vice President Chris Galen discusses this year’s signup for the Dairy Margin Coverage program with Michael Clements of the National Association of Farm Broadcasters. This year’s DMC features a production update for some producers and an improved feed-cost calculation, further enhancing its value as a risk-protection program for dairy farmers.

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.