In May, NMPF told the U.S. Food and Drug Administration (FDA) that the agency needs to adopt a prudent approach on dairy equivalence issues that will be supportive of U.S. dairy exports. At issue is FDA’s determination of whether a foreign country has “equivalent” food safety parameters to the United States, such as those followed by dairy farmers and processors to ensure consumers receive safe milk products.

Earlier this spring, in its first-ever equivalence action, FDA determined that European Union (EU) shellfish are as safe as those harvested in the United States, and as a result recommended granting equivalence to certain types of raw shellfish coming from the EU. This determination is meant to restart trade after an eight-year stalemate that began when the EU abruptly cut off access to its market for U.S. shellfish.

NMPF expressed concerns that the manner in which the U.S. government is handling this shellfish trade topic would pose a deep concern if that same process were applied to the trade of dairy foods. National Milk raised the issue in light of the publication this spring of FDA’s shellfish equivalence determination, and ongoing “Grade A” dairy equivalence assessments of New Zealand, Canada and various countries in the European Union (EU).

In detailed comments to FDA, NMPF and the U.S. Dairy Export Council (USDEC) pointed out that it would be extremely problematic if the agency applied the same process to the dairy industry, as that approach would run counter to nationally harmonized food safety regulations for dairy, fall short of upholding high U.S. consumer protections, and fail to sufficiently tackle barriers to U.S. dairy exports, among other concerns.

NMPF also met with Dr. Stephen Ostroff, deputy commissioner of FDA, and numerous FDA staff working on dairy and trade issues to explain why the U.S. dairy industry has concerns, and to pledge to work with FDA to address these worries by pursuing a more workable approach to tackling dairy trade issues, including those pertaining to equivalence. In a follow-up, NMPF and USDEC jointly sent a letter to FDA Commissioner Scott Gottlieb to reiterate dairy’s concerns and commitment to collaborating with FDA and its interagency partners.

The U.S. Department of Agriculture (USDA) announced on June 7 that California dairy producers approved a Federal Milk Marketing Order (FMMO) for the entire state of California.

The new California FMMO will be implemented on Oct. 17 with the publication of the Announcement of Advanced Prices and Pricing Factors. Affected parties must comply with all provisions beginning Nov. 1. USDA will work over the next few months to educate handlers who will be regulated by the new FMMO.

California represents over 18 percent of all U.S. milk production and is currently regulated by a state milk marketing order administered by California Department of Agriculture (CDFA). Once this new FMMO is established, over 80 percent of the U.S. milk supply will fall under the FMMO regulatory framework.

Under the dairy Margin Protection Program (MPP), the monthly margin for April 2018 decreased an additional $0.15 per hundredweight from March, to $6.62/cwt. This was the fifth consecutive drop in the MPP monthly margin. The April all-milk price increased by $0.20/cwt. from March, to $15.80/cwt. The April feed cost formula was up by $0.35/cwt. from March, with most of the increase – on a per-hundredweight-of-milk basis – due to an increase in the cost of alfalfa hay. The prices of corn and soybean meal also contributed smaller increases to the MPP feed cost formula calculation.

USDA’s MPP Decision Tool projects that coverage at the $8.00/cwt. and $7.50/cwt. coverage levels could result in total payments in excess of premiums and fees for up to 5 million pounds of production history, based on the May 29 CME dairy and grain futures settlement prices, shown in the accompanying graph. This will be true even if the remaining margins this year are above $8.00/cwt.

USDA has now twice extended the June MPP sign-up deadline. Producers have until June 22 to sign up for coverage for the entire 12 months of 2018. The USDA also has begun issuing payments to farmers who already elected coverage for this year.

USDA’s MPP margin forecasts are updated daily online. NMPF’s Future for Dairy website offers a variety of educational resources to help farmers make better use of the program.

An amendment to the 2018 House Farm Bill that would have allowed the interstate sale of unpasteurized milk was soundly defeated thanks to strong opposition from National Milk, its member cooperatives, several other key industry stakeholders, as well as consumer and public health advocates.

A coalition of dairy farmers, processors, consumer groups, food safety advocates, federal and state public health regulators and the medical community wrote to House leaders last month expressing serious concern with Amendment 30. Offered by Rep. Thomas Massie (R-KY), the amendment would have removed existing regulations that prohibit the interstate sale of raw milk for direct human consumption. It ultimately failed by a vote of 331 against to 79 in favor.

“This amendment would have rolled back decades of food safety improvements by eliminating requirements for pasteurization, which has been cited by the U.S. Department of Health and Human Services as one of the great achievements in public health in the 20th century,” said Jim Mulhern, president and CEO of NMPF. “We greatly appreciate those who joined the current effort and took a stand to oppose this irresponsible amendment that would have significantly compromised food safety.”

In a May 14 letter to House leaders Paul Ryan (R-WI) and Nancy Pelosi (D-CA), NMPF and the International Dairy Foods Association (IDFA) said Massie’s proposed amendment to the Farm Bill represented “an unnecessary risk to consumer safety and public health.” NMPF also organized a coalition of 53 dairy cooperatives, state dairy associations and the American Association of Bovine Practitioners in signing a similar letter of disapproval.

According to the dairy coalition letter, the Centers for Disease Control and Prevention (CDC) reported that nearly 75 percent of raw milk‐associated outbreaks have occurred in states where the sale of raw milk was legal. Thus, the dairy groups argued, eliminating any regulations that stem the interstate sale of raw milk in the United States “would increase the risk to public health, exposing consumers nationwide to the inevitable consequence of falling victim to a foodborne illness.”

NMPF continues to work with its congressional allies to ensure the enactment of a bipartisan, bicameral Farm Bill before the current one expires on Sept. 30. Both the House and Senate are making progress on their respective versions of the Farm Bill, with action likely in both chambers in June.

The 2018 Bipartisan Budget Act – the large spending bill passed earlier this year – made key improvements to the dairy Margin Protection Program (MPP) and expanded risk management tools for dairy farmers, but additional dairy policy changes are needed in the 2018 Farm Bill. NMPF is seeking additional improvements to the MPP, such as increasing the program’s coverage levels to ensure that it better reflects producer margins, as well as ensuring that the program is applied equitably to producers of all sizes.

The House Agriculture Committee adopted its Farm Bill in April, but disagreements between the two parties on nutrition issues resulted in a party-line vote on the measure in committee.  The House bill includes several NMPF priorities, including additional reforms to the dairy safety net, as well as provisions on conservation, trade and nutrition.

When brought to the House floor on May 18, the Farm Bill failed to pass due to an unrelated dispute over the future of immigration policy. During the bill’s consideration, NMPF, the International Dairy Foods Association and a broad coalition of agricultural, public health and consumer organizations worked to resoundingly defeat an amendment that would have permitted the sale of raw milk across state lines (see following story).

The House is now slated to re-vote on its version of the bill on June 22.  Meanwhile, the Senate Agriculture Committee approved its version on June 13. It also makes several improvements to the dairy safety net, although the bills are not identical and will need to be reconciled in a conference committee once approved by each chamber of Congress. Given that the impending election season is likely to deter action on any congressional initiatives, NMPF has continued to urge lawmakers to prioritize work on the Farm Bill this summer.

In May, member cooperatives in the Cooperatives Working Together (CWT) program secured 33 contracts to sell 2.36 million pounds of American-type cheeses, 2.54 million pounds of butter and 9.26 million pounds of whole milk powder to customers in Asia, Central America, Europe, the Middle East, North Africa and Oceania. The product will be shipped to customers in 25 countries in five regions of the world from May through October 2018.

The 2018 total of CWT-assisted dairy product sales is 35.36 million pounds of cheese, 11.04 million pounds of butter and 10.18 million pounds of whole milk powder. The total tonnage is up 46 percent compared to the first five months of 2017. These transactions will move overseas the equivalent of 649 million pounds of milk on a milkfat basis.

The amount of dairy products slated for export through CWT reflects 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.

A thriving dairy export sector is critical to the growth and viability of dairy farmers across the country.  Regardless of whether a cooperative is actively engaged in exporting cheese, butter or whole milk powder, the domestic market cannot absorb the current level of domestic milk production. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome certain disadvantages, such as the domestic/global price gap and shipping costs.  All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available on the CWT website.

The NMPF Board of Directors voted in early June to continue the Cooperatives Working Together (CWT) program, the historic dairy farmer self-help export assistance effort.

CWT’s three-year extension, through 2021, comes at a time of growing U.S. milk production, weak global dairy prices and increased worldwide competition. CWT – developed and managed by NMPF – is the only program of its kind that enables farmers to use a private enterprise that increases the competitiveness of U.S. dairy exports. CWT is funded by dairy cooperatives and individual dairy farmers, who contribute $0.04/cwt. on their milk production.

“CWT is a unique and highly cost-effective tool for America’s dairy farmers, and the ongoing commitment of America’s farmer-owned dairy cooperatives to the program sends a signal to dairy producers at home, and dairy exporters abroad, that the United States will maintain a strong competitive stance in the global dairy market,” said NMPF Chairman Randy Mooney, a dairy farmer from Rogersville, Missouri.

Through the first five months of 2018, CWT has facilitated the sale of 56 million pounds of dairy products, representing the equivalent of 649 million pounds of milk. Since the export assistance program’s inception in 2003, it has helped members sell 887 million pounds of dairy products, the equivalent of more than 11.1 billion pounds of milk. For more information on CWT, visit www.cwt.coop.

ARLINGTON, VA – The board of directors of the National Milk Producers Federation (NMPF) today voted to extend funding through 2021 for Cooperatives Working Together (CWT), the farmer-funded export assistance program that assists member cooperatives in exporting dairy products.

CWT’s three-year extension comes at a time of growing U.S. milk production, weak global dairy prices and increased worldwide competition. CWT is the only program of its kind that enables farmers to fund a private enterprise that increases the competitiveness of U.S. dairy exports. NMPF developed and manages the 16-year-old self-help program.

“CWT is a unique and highly cost-effective tool for America’s dairy farmers, and the ongoing commitment of America’s dairy cooperatives to the program sends a signal to dairy producers at home, and dairy exporters abroad, that the United States will maintain a strong competitive stance in the global dairy market,” said NMPF Chairman Randy Mooney, a dairy farmer from Rogersville, Missouri.

CWT is a voluntary membership program funded by contributions from NMPF’s member cooperatives and more than 100 individual farmers. The funds raised from the CWT membership fee of $0.04/cwt. help maintain U.S. exports in an increasingly competitive world market.

CWT’s member cooperatives submit bids requesting help with sales in specific foreign markets. After independent review and justification, bids are either accepted or CWT makes a counteroffer. Financial assistance is provided only after the sale is completed.

Through the first five months of 2018, CWT has facilitated the sale of 56 million pounds of dairy products, representing the equivalent of 648 million pounds of milk. Since the export assistance program’s inception in 2003, it has helped members sell 887 million pounds of dairy products, the equivalent of more than 11.1 billion pounds of milk.

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The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit www.cwt.coop.

The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

ARLINGTON, VA – The National Milk Producers Federation (NMPF) today expressed thanks to Agriculture Secretary Sonny Perdue for his department’s decision to give dairy farmers additional time to review their 2018 coverage options in the dairy Margin Protection Program (MPP).

The U.S. Department of Agriculture (USDA) said Monday it is extending the June 1 sign-up deadline to Friday, June 8.  NMPF, along with key members of the U.S. Senate, had recently asked USDA to consider giving farmers additional time to enroll in, or adjust their existing coverage in, the MPP for calendar year 2018.

“We believe an extension of the sign-up period beyond the June 1 deadline will be beneficial in recruiting as many farmers as possible into the program,” said Jim Mulhern, president and CEO of NMPF. “In particular, the late spring planting in numerous dairy states, especially in the Midwest, means that many farmers have been in their fields in recent weeks and unable to sit down and make decisions about their risk management options available through USDA.”

Dairy producers must select new coverage in the MPP for 2018, even if they enrolled during the previous sign-up period last fall. Coverage choices made this spring for calendar year 2018 will be retroactive to Jan. 1, 2018. Producers can participate in either MPP or the Livestock Gross Margin program for dairy (LGM-Dairy), but not both.

NMPF also thanked members of the Senate for making a similar request to USDA to allow farmers additional time to enroll in the MPP. Sens. Tina Smith (D-MN) and Rob Portman (R-OH) spearheaded a bipartisan letter making the request on May 31, and Sens. Debbie Stabenow (D-MI) and Patrick Leahy (D-VT) advocated strongly for an extension to build on their success earlier this year in making legislative improvements to the structure of the MPP.

Mulhern also complimented USDA for planning to issue payments starting this week to farmers already enrolled in the MPP, saying that the “timely issuance of payments to producers will send an important signal to additional producers who are considering enrolling.”

USDA’s web tool allows dairy farmers to quickly and easily combine unique operation data and other variables to calculate their coverage needs based on price projections. NMPF’s Future for Dairy website also offers informative resources and tools to help farmers determine the best insurance options for their operations.

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

Increased production per cow and expectations for additional milk production growth is dampening the outlook for milk prices for the remainder of 2016. Spot market prices for Cheddar cheese are under pressure from rising inventories, and this will soon be reflected in the USDA/AMS dairy product price survey and in Federal Order Class III prices.Nonfat dry milk and dry whey prices remain in line with world market-driven, depressed levels, although butter prices continue to hold at around $2 a pound.These anticipated low milk prices and the recent rally in grain prices during the spring planting and growing season have combined to push projections for the dairy-income-over-feed-cost margin to its lowest levels since 2013.USDA’s NMPF decision tool for the Margin Protection Program (MPP) now indicates that the MPP margin may fall below $6.00 per hundredweight for the May-June period.

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