With the European Union (EU) continuing its aggressive campaign to confiscate common food names at the expense of American dairy farmers and consumers, NMPF is backing U.S. government efforts to defend U.S. exports.

The federal government over the past year defended American-made exports via approval of USMCA and through incorporating new safeguards for common names in its Phase One negotiations with China. During recent meetings with European agriculture and trade officials, Agriculture Secretary Sonny Perdue made it clear that the EU must drop its GI agenda in order to successfully negotiate a trade deal with the U.S.

However, NMPF is urging the U.S. government to more proactively posture confront this issue to preserve market access, protect American jobs and defend the legitimate rights of food manufacturers, farmers and exporters. NMPF joined  with USDEC and CCFN to issue a joint statement Jan. 30 applauding Secretary Perdue’s commitment to protecting common names. “As Secretary Perdue rightly noted, Europe’s unfair trade barriers have less to do with preserving the rights of legitimate GIs than with restricting competition from exceptional U.S. products,” the statement said. “Dismantling EU trade barriers that drive the dairy deficit and cause undue harm to our industry must remain a top priority in negotiations with the EU.”

NMPF and the U.S. Dairy Export Council (USDEC) also raised the issues of GIs in a joint statement submitted to the USTR touting support for a detailed accounting of global GI barriers submitted by the Consortium for Common Food Names (CCFN) in response to USTR’s call for input to inform its annual Special 301 report on intellectual property issues.

NMPF is an active member of CCFN, which works to dismantle trade barriers that prevent the U.S. dairy industry from selling common-name cheeses abroad. CCFN’s comments lay out concerns regarding the misuse of GIs on a country-by-country basis, focusing on the EU’s push to use GIs to block U.S. exports.

As the U.S. government now turns its attention towards implementing and ratifying the U.S.-Mexico-Canada Agreement, NMPF is encouraging the U.S. Trade Representative (USTR), working in concert with other parts of the USMCA implementation team including at the U.S. Department of Agriculture (USDA), to clearly outline U.S. expectations for how USMCA dairy provisions are implemented.

The forward-leaning posture, necessary to prevent bad-faith actors from undermining the full intent of USCMA’s dairy provisions, was signaled Feb. 27 NMPF joined with the U.S. Dairy Export Council (USDEC) in a letter to USTR and USDA outlining specific provisions that should command the administration’s dedicated attention. The provisions included: reforms to Canada’s dairy pricing policies; administration of Canada’s TRQs; and safeguards that protect U.S. companies’ rights to use common food names in Mexico.

These messages also were emphasized during recent in-person meetings NMPF held with USTR staff, Mexican industry and government officials and Canadian officials to discuss the importance of collaboration and good-faith implementation of USMCA to avoid trade disruptions. NMPF is continuing its work alongside government officials and industry stakeholders to ensure USMCA’s provisions are implemented and enforced in good faith.

NMPF, the U.S. Dairy Export Council (USDEC) and dairy allies in China are working both to solidify gains represented in the “Phase One” China trade deal that went into effect Feb. 14 and to advance beyond them by fostering the removal of all retaliatory tariffs on dairy.

The agreement, which includes pledges from China to step up its buys of U.S. agricultural goods, holds the potential for U.S. dairy exports to expand. However, still-in-place tariffs may curb those purchases relative to other farm products.

The tariff front saw a positive development March 2 when China’s Tariff Committee of the State Council opened a process for companies registered to conduct business in China to apply for exemptions from retaliatory tariffs still in effect. The process, intended to help fulfill China’s purchasing agreements under Phase One, may boost sales of skim milk powder, whey products and lactose, all among the products for which China specifically invited tariff exemption. Applications for additional products are permissible as well, according to China’s announcement of the program.

In addition to their efforts to lift retaliatory tariffs, NMPF, USDEC and the Consortium for Common Food Names (CCFN), sent a letter Jan. 27 to Ambassador Lighthizer and Secretary Perdue expressing support for the gains made in the China Phase One deal while noting the need to hold China accountable for its commitments made on facilities audits and listings, product registrations, and common food names.

The U.S. Trade Representative has established a Bilateral Evaluation and Dispute Resolution Office to oversee China’s compliance with the agreement. NMPF and USDEC are also actively monitoring China’s adherence to its Phase One commitments as coordinated enforcement efforts between the dairy industry and government partners will be key to ensuring that China upholds its trade obligations.

A combination of rising supplies and fears of lower demand due to the coronavirus worsened the economic outlook for U.S. dairy producers, with margins under the Dairy Margin Coverage program falling.

The January 2020 Dairy Margin Coverage margin was $10.72 per cwt., a drop of $1.23 per cwt. from the December margin, according to USDA data. This drop was the combined outcome of a $1.10 per cwt. lower all-milk price and a $0.13 per cwt. higher calculated DMC feed cost for January, compared with a month earlier. The January margin was $0.27 lower due to the incorporation of dairy-quality alfalfa in the DMC feed cost formula, which began in 2019.

At the end of February, USDA’s DMC Decision Tool, which can be accessed online, projected the DMC margin would drop sharply for the first several months of 2020 and fall below the $9.50 per cwt. coverage level for April through August. Based on that forecast, coverage at that level would pay an average of $0.18 per cwt. for all of 2020, which was above both the one-year and the 5-year discounted costs of that coverage.

As of Feb. 18, USDA reported that 13,024 dairy operations, or 47.71 percent of operations with production histories, had enrolled in the 2020 DMC program. Many of these enrollees are operations that signed up for 5-year coverage last year. Enrolling in the DMC program at the generous coverage and affordable premiums available will always be a highly recommended risk-management option for dairy farmers, and this year is a case in point. Just a month ago, the USDA DMC Tool indicated that the DMC margin would not drop below $10.00 per cwt. anytime during 2020 and thus would generate no payments during the year.

The DMC information page on NMPF’s website offers a variety of educational resources to help farmers make better use of the program. NMPF also posted a new video explaining how farmers can benefit from the DMC.

Reps. Peter Welch (D-VT), Mike Simpson (R-ID), Anthony Brindisi (D-NY), and John Joyce (R-PA) spearheaded a Feb. 18 letter urging new FDA Commissioner Stephen Hahn to quickly finish the job begun by his predecessor, Scott Gottlieb, in 2018 and finally begin to enforce standards of identity defining what may be labeled a dairy product. The letter garnered 58 bipartisan co-signers.

“The deception caused by mislabeling of imitation products is both unfair to our hardworking dairy farmers and problematic for consumers, making it harder for Americans to make educated decisions about what they feed themselves and their families,” wrote the lawmakers in the bipartisan letter.

Citing public health concerns expressed by medical groups including the American Academy of Pediatrics, the American Heart Association, the Academy of Nutrition and Dietetics, and the American Academy of Pediatric Dentistry, the members of Congress said they appreciated that Hahn saw the topic of fake dairy labeling as “a public health and nutrition matter” while calling action on it “long overdue.”

Many of the letter-signers are also co-sponsoring the DAIRY PRIDE Act, introduced by Representatives Welch and Simpson in the House and Senators Tammy Baldwin (D-WI) and Jim Risch (R-ID) in the Senate, and many also serve on the House Energy and Commerce Committee, which retains jurisdiction over this issue.

The DAIRY PRIDE Act would designate foods that make an inaccurate claim about milk contents as “misbranded” and require FDA to issue guidance for nationwide enforcement of mislabeled imitation dairy products within 90 days of its enactment.

During his confirmation process, Hahn voiced his support for “clear, transparent, and understandable labeling for the American people.” Given the agency’s inability to follow up on earlier pledges to act, NMPF supports DAIRY PRIDE’s passage. The strong bipartisan showing on the new letter will add momentum to this effort.

ARLINGTON, Va. – Tangible gains from the USMCA trade agreement, as well as progress on “Phase One” trade deals with China and Japan, underscore dairy’s persistent efforts to open new opportunities in foreign markets, Jaime Castaneda, NMPF’s senior vice president for policy strategy and international trade, says in this week’s Dairy Defined Podcast.

“I challenge anyone out there that says dairy is dead, or dairy is down. We are consuming more dairy products today than ever,” said Castaneda, a two-decade veteran of dairy trade issues. But because U.S. production is greater than what’s needed to meet domestic demand, “it is absolutely critical for the future of this industry to have market opportunities overseas,” he said.

To listen to the full podcast, click here. You can also find the Dairy Defined podcast on Apple Podcasts, Spotify,  SoundCloud and Google Play. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.

(Note: NMPF’s Dairy Defined podcast explores today’s dairy farms and industry using high-quality data and podcast-style interviews to explain current dairy issues and dispel myths.)

Dairy Market Report – February 2020

Listen to the latest updates on agricultural labor reform efforts in the U.S. Senate from NMPF Senior Vice President of Membership Services and Strategic Initiatives Chris Galen on Dairy Radio Now.

More than one year after comments closed on FDA’s request for information on fake-milk labeling; with health organizations warning against inappropriate consumption of plant-based beverages; with a rising number of lawmakers asking why nothing’s been done; and with a new FDA commissioner who seems to understand the problem, FDA still hasn’t resolved the public-health issue of mislabeled plant-based products using dairy terms that imply nutritional equivalence to consumers.

Why not?

That would be for FDA to answer. But if the concern is that FDA’s beginning to enforce its own longstanding rules may create confusion, we have an answer for that: a road map that updates dairy-labeling rules, clarifies marketplace practices and ensures fair competition among dairy and plant-based products. Written as a Citizen Petition responding to the comments FDA solicited, the map is NMPF’s proposed solution to the fake-dairy labeling problem – and it includes a few nuggets that might surprise consumers whose news diets include too much plant-based misinformation. For example:

• The petition would clarify that milk from animals other than cows, such as sheep, goats and water buffalo, are acceptable for dairy labeling, because milk only comes from mammals.
• It explains why terms like “Peanut Butter” and “Milk of Magnesia” are compatible with current FDA rules, while calling an almond-based beverage “milk” isn’t. (Short answer: It has to do with a product’s established use – these products aren’t marketed as substitutes for dairy.)
• It even reaffirms circumstances under which plant-based products could still use dairy terms, and it clearly does not ban the use of those dairy terms if used in a way that fits with with decades-old federal regulations that are consistent with the First Amendment. Words such as “alternative,” “imitation” and “substitute,” properly administered, can give consumers the information they need and maintain nutrition and labeling integrity, while allowing plant-based purveyors the leeway to market their heavily processed, flavored sugar waters largely how they’d like.
• Finally, the road map contains a detailed analysis of relevant case law to address First Amendment concerns over labeling terms. It surveys the legal landscape to ensure that solutions on disclosure requirements are narrowly tailored to improving labeling transparency and promoting informed consumer choice. It emphatically does not propose a blanket ban on the use of dairy terms by plant-based products.

Dairy farmers understand the FDA has a lot on its plate. But after more than 40 years of non-enforcement – and a nearly two-year-old pledge to act – let’s get real.  The path is clear, the road map exists. All that’s left is action – by FDA, Congress, or both – to do what’s right for consumers. We won’t be quiet until it’s done.

NMPF commends the 58 members of the House of Representatives who wrote FDA Commissioner Stephen Hahn today, urging the agency to quickly finish and act upon its examination of how to enforce regulations defining what may be labeled a dairy product.

“The deception caused by mislabeling of imitation products is both unfair to our hardworking dairy farmers and problematic for consumers, making it harder for Americans to make educated decisions about what they feed themselves and their families,” wrote the lawmakers in the bipartisan letter, which was led by Reps. Peter Welch (D-VT), Mike Simpson (R-ID), Anthony Brindisi (D-NY), and John Joyce (R-PA).

Citing public health concerns expressed by medical groups including the American Academy of Pediatrics, the American Heart Association, the Academy of Nutrition and Dietetics, and the American Academy of Pediatric Dentistry, the members of Congress said they appreciated that Hahn saw the topic of fake dairy labeling as “a public health and nutrition matter” while calling action on it “long overdue.”

“FDA knows this is a problem, and now is the time to solve it,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “Dr. Hahn has shown his interest in resolving it, public-health professionals have spoken out, and more and more members of Congress are as well. Agency inertia shouldn’t jeopardize public health. We applaud the efforts of lawmakers to prod FDA into action.”

Many letter-signers are also co-sponsoring the DAIRY PRIDE Act, introduced by Representatives Welch and Simpson in the House and Senators Tammy Baldwin (D-WI) and Jim Risch (R-ID) in the Senate. That legislation would designate foods that make an inaccurate claim about milk contents as “misbranded” and subject to enforcement of labeling rules. It would require FDA to issue guidance for nationwide enforcement of mislabeled imitation dairy products within 90 days of its passage and require FDA to report to Congress two years after enactment to hold the agency accountable in its enforcement.

Hahn has voiced his support for “clear, transparent, and understandable labeling for the American people.” Given the agency’s inability to follow up on earlier pledges to act, NMPF supports DAIRY PRIDE’s passage.