Cooperatives Working Together member cooperatives captured 36 contracts to sell 5.392 million pounds of American-type cheese, 440,925 pounds of butter, and 573,202 pounds of whole milk powder in August. These products will go to customers in Asia, Central and South America, the Middle East, North Africa, and Oceania. The product will be shipped from August 2016 through February 2017.

Through August of 2016, CWT assisted members in getting exports sales contracts totaling 34.778 million pounds of American-type cheese, 8.814 million pounds of butter (82% milkfat) and 21.301 million pounds of whole milk powder going to customers in 21 countries on 5 continents. The sales are the equivalent of 674.815 million pounds of milk on a milkfat basis.

The amounts of dairy products and related milk volumes reflect 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.

Assisting CWT member cooperatives gain and maintain world market share through the Export Assistance program, in the long-term expands the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively impacts all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available at http://www.cwt.coop/membership.

A continual challenge for U.S. dairy exporters in recent years has been shifting sets of import requirements on dairy certificates that accompany U.S. products shipped around the world. Numerous countries require government assurances and documentation of the safety of the dairy foods they are importing. As these requirements have proliferated in recent years, though, some countries’ requirements have ground trade to a halt or needlessly put export access at risk through overly burdensome requirements.

To address this persistent concern, NMPF & USDEC are spearheading an effort to build support in the Asia-Pacific Economic Cooperation (APEC) region for a model dairy certificate. The project is aimed at creating a viable go-to dairy documentation template for countries considering putting in place new certification requirements for dairy imports. NMPF believes that encouraging countries to agree on a model certificate could help to alleviate the risk of sudden shifts in import requirements in key U.S. export destinations.

Jaime Castaneda, NMPF SVP for Strategic Initiatives & Trade Policy (pictured at right), participated in recent APEC committee meetings last month to lay out the concept to APEC governments and begin to build support for it, as well as to help foster a wider discussion about the importance of trade-friendly measures. As part of that work, Castaneda moderated a panel on the importance stakeholder consultations in government rulemaking and participated as a speaker in a panel focused on finding trade-facilitating solutions to a variety of supply chain constraints.

Under the APEC procedures, the U.S. dairy industry will work closely with the United States and other governments to establish a technical group that would review the current Codex certificate guidance and other certificates, including the U.S. AMS certificate, to discuss options for establishing a more formal regional certificate. The project is anticipated to enter into a more technical stage of discussions early next year at meetings in Vietnam.

Industry leaders from both the U.S. and Mexican dairy sectors held a two-day summit last month to foster a renewal of the strong relationship between farmers in both countries. Representatives from both nations, including NMPF President and CEO Jim Mulhern and U.S. Dairy Export Council President Tom Suber, pledged to work together to boost trade between the two countries, address mutual challenges and increase dairy consumption while also promoting milk production on both sides of the border.

At the summit, the dairy leaders signed a memorandum creating the US-Mexico Dairy Alliance, which will meet annually to exchange information, review industry trends and identify and seek solutions for problems affecting the dairy sector in each country. Additionally, the industries committed to seeking ways to further reduce trade barriers between the two countries and defend against efforts to capture generic cheese names like parmesan, asiago and feta for the exclusive use of some European producers.

Signing the memorandum for the United States were Mulhern, and Suber. Signing for Mexico were Salvador Álvarez Morán, president of the Mexico Livestock Association (CNOG) and Juan Carlos Pardo, president of the National Chamber of Industrial Milk (CANILEC).

The summit re-energized a relationship forged under the North American Free Trade Agreement (NAFTA), which was created in 1994. NMPF has consistently pointed to NAFTA as an example of a trade agreement that substantially benefits the countries involved.

“Since NAFTA, our markets have converged seeing both U.S. and Mexican dairy farmers growing. U.S. dairy exports to Mexico have increased significantly, while Mexico’s internal milk production has also seen expansion,” said Mulhern.

NMPF President and CEO Jim Mulhern was one of several top agriculture leaders who discussed the outlook for the Trans-Pacific Partnership during a recent segment on RFD-TV.  Mulhern told the audience watching a special segment last Thursday of RURAL AMERICA LIVE that the TPP will benefit America’s dairy farmers if it is properly implemented.  Mulhern was invited to participate in the RFD-TV segment to explain why the 12-nation pact matters to dairy farmers, and what it could mean for the future of American agriculture.

NMPF joined the U.S. Dairy Export Council last week in commending two U.S. Senators for urging the U.S. government to investigate new Canadian dairy pricing policies. These policies have impacted current trade and stand to negatively affect U.S. dairy farmers and manufacturers, jeopardizing the country’s trade commitment to the United States, they said.

In a letter to U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack, Sens. Chuck Schumer (D-NY) and Tammy Baldwin (D-WI) expressed concern about Canada's recently announced National Ingredients Strategy, and its already active Ontario Class VI pricing program. According to the senators, these programs incentivize Canadian processors to use Canadian milk and dairy inputs, penalizing them for the use of imported dairy products.

The letter highlights the impact of the Canadian approach on exports of ultrafiltered milk from New York and Wisconsin.

“Companies from our states inform us that they have already lost considerable export sales as a result of the Ontario dairy policy introduced this past spring,” the letter said. Not only would these types of programs discourage the use of U.S. dairy exports, the senators continued, they could raise further compliance issues with Canada’s NAFTA and WTO obligations by “impeding dairy trade” between the two countries.

NMPF President and CEO Jim Mulhern noted that the letter is coming at a critical time for dairy trade. “We appreciate the Senators’ attention to the importance of holding one of our largest trading partners to its international commitments and the key role that the U.S. government must play in doing so,” Mulhern said.

 

 

 

 

 

 

 

 

 

 

 

 

 

Early September futures for feed and milk prices indicate that MPP margins should continue rebounding from the $5.76 per hundredweight rate announced for the May-June period. The monthly MPP margin for July was $7.59 per hundredweight, and USDA’s MPP decision tool still projects just a 33% probability that the combined July-August margin will be less than $8 per hundredweight, with margins above $9 projected for this fall and into next year.  USDA’s MPP margin forecasts are updated daily here.

The U.S. Department of Agriculture announced in late August that it would purchase $20 million worth of cheese as the dairy industry weathers a prolonged period of low milk prices.

The announcement by Agriculture Secretary Tom Vilsack came in response to requests for assistance from more than 60 members of Congress, as well as from NMPF, the American Farm Bureau Federation, National Farmers Union and the National Grange. In its letter, NMPF asked USDA to utilize its Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation, to purchase the cheese.

NMPF President and CEO Jim Mulhern said the organization was appreciative of USDA’s prompt action. “This cheese purchase will provide some assistance to America’s dairy farmers through increased demand for their milk, while also serving the needs of Americans who patronize food banks that will distribute the USDA purchases.”

Global dairy demand has sagged in the past two years, due primarily to a reduction in purchases by China and Russia. Meanwhile, a world-wide rise in milk production – particularly in Europe, where production quotas were removed last year – has led to an imbalance between supply and demand, pushing prices down for farmers across the globe. U.S. dairy exports have slumped, leading to a large domestic buildup of American-type cheese (between 2014 and 2016, U.S. cheese exports dropped by almost 20 percent).

Mulhern said NMPF will continue to assess the impact of the cheese purchase as markets respond during the remainder of 2016.  The USDA also announced that it is extending until December 16 the deadline for farmers to enroll in or change their coverage for next year in the dairy Margin Protection Program.  NMPF’s www.futurefordairy.com website offers informational resources and a calculator to help farmers assess their coverage for calendar year 2017.

In response to a request from NMPF to help America’s dairy farmers, the Department of Agriculture announced in late August that it would purchase $20 million worth of cheese as the dairy industry weathers a prolonged period of low milk prices.

On August 12, National Milk sent a letter to USDA Secretary Tom Vilsack, asking the department to purchase $100 million of cheese for donation to food assistance programs. NMPF asked USDA to utilize its Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation, to purchase the cheese.

The USDA responded 12 days later by announcing a cheese purchasing program of $20 million, which will remove approximately 11 million pounds of cheese from commercial storage.

NMPF President and CEO Jim Mulhern said the organization was appreciative of USDA’s prompt action. “This cheese purchase will provide some assistance to America’s dairy farmers through increased demand for their milk, while also serving the needs of Americans who patronize food banks that will distribute the USDA purchases.”

Global dairy demand has sagged in the past two years, due primarily to a reduction in purchases by China and Russia. Meanwhile, a world-wide rise in milk production – particularly in Europe, where production quotas were removed last year – has led to an imbalance between supply and demand, pushing prices down for farmers across the globe. U.S. dairy exports have slumped, leading to a large domestic buildup of American-type cheese (between 2014 and 2016, U.S. cheese exports dropped by almost 20 percent).

Mulhern said NMPF will continue to assess the impact of the cheese purchase as markets respond during the remainder of 2016.  The USDA also announced that it is extending until December 16 the deadline for farmers to enroll in or change their coverage for next year in the dairy Margin Protection Program.  NMPF’s www.futurefordairy.com website offers informational resources and a calculator to help farmers assess their coverage for calendar year 2017.

Congress has returned to Washington from its summer recess for a brief period to work on the federal budget, before leaving Capitol Hill by the end of the month to campaign for the November elections.  Also left behind will be a number of important policy items that remain the focus of NMPF – and which we’ll continue to push hard for action on, even if it means it will be 2017 before they can be addressed in earnest.

 

Congress is also likely to assemble in a lame-duck session after the November elections, but apart from a focus on annual spending matters, it doesn’t currently appear there is much momentum behind addressing many of the other major challenges facing the country.  That said, we are having ongoing discussions with lawmakers about how important it is to dairy farmers that work continue on our list of priorities, whether yet in 2016, or in 2017 when a new Congress convenes.  Here are a few of those key issues:

 

Immigration reform.  Much has been said on the campaign trail this year about our nation’s immigration laws, but not much helpful or hopeful light has been shed on the subject.   Despite the rhetoric, the fact remains that we have a serious mismatch between the supply of workers available to farming and agriculture, and the labor demand on dairy farms, orchards, nurseries, meat packing plants, and other places where much of the hard work wouldn’t get done without immigrant workers.  Whoever is in the White House in January – and whoever controls the Senate and House next year – must make it a priority to address our labor situation, and a key piece of it is immigration policy reform that provides viable answers for agriculture’s labor needs. Any future solution needs to ensure an adequate, productive and competitive farm workforce, while also dealing with undocumented workers who are already here.  The dairy sector, as well as much of the rest of agriculture and the larger U.S. business community, will be pushing for a constructive resolution of this issue after two decades of inaction.

 

The Trans-Pacific Partnership.  Another hot topic in this year’s campaign, and ironically an issue where both Donald Trump and Hillary Clinton appear to find common ground, is the impact of trade agreements on growing our economy. Trade deals are always a mixed bag and, like all negotiations, they involve compromises. But in the case of the Trans-Pacific Partnership, contrary to the views of the White House aspirants, we would be better off with it in place.  The U.S. government has spent five years negotiating the TPP, and it’s now up to Congress to vote it up or down.  But delaying consideration of the deal, or voting against it, would reduce our opportunities to capture growing dairy markets in the Pacific Rim.  The TPP isn’t perfect, and we have been clear that implementation of it must be carefully monitored and its provisions must be strictly enforced.  But punting on the TPP is a serious mistake and would greatly reduce opportunities for increased access to overseas dairy markets that are growing faster than our own.

 

Child nutrition and the school lunch program.  The reauthorization by Congress of the policies that govern our school lunch program is supposed to be an every-five-years’ event, and one that was to have been completed last year.  After some positive momentum by both the House and Senate in 2016, however, the process has bogged down – meaning this also may be an issue that gets pushed into 2017.  One important reason we need action here is because the pending nutrition bill would rectify a misguided policy that eliminated the ability of schools to offer flavored, 1 percent milk.  Right now, only 1 percent white milk is allowed by USDA in schools – and any flavored milk must be fat-free. That restriction has reduced overall school milk consumption, and for that matter, student participation in the entire school lunch program. The reauthorization of the child nutrition act would change this situation for the better, but it remains hung up in both chambers.  That logjam needs to be broken next year, if not this year.

 

Biogas recovery tax credit. Leaders in both the House and Senate have introduced identical measures that would expand existing renewable energy tax credits to farmers who invest in nutrient recovery technologies as well as manure digesters. The tax measure would create incentives to make biogas and manure resource recovery technologies more affordable, in the same way that tax incentives are used to stimulate investments in other energy sources.  There is a slim possibility Congress might take up some tax relief measures after the November elections, but the more likely scenario is that we’ll have to push for this as part of a larger tax reform measure next year.

 

The Farm Bill and dairy’s safety net.  The current farm bill, authorized in 2014, runs through 2018.  But we are already in early discussions with members of Congress about ways to remedy some of the deficiencies in the Margin Protection Program, so that the key structural issues that need to be examined – including feed cost calculations, premium levels for supplemental coverage, and the margin thresholds for payouts – are addressed sooner rather than later. Our message to lawmakers is that the MPP is not completely fulfilling its objective as an effective safety net, and that means more work is needed.

 

Elections are about choices, and America’s voters will choose in just two months who will be in charge in Washington next year. But regardless of who’s in office, our task is to ensure that they devote the time and attention necessary to resolve these – and other — issues that are very important to dairy farmers. That work never ends.

 

ARLINGTON, VA – The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) today praised Sens. Chuck Schumer (D-NY) and Tammy Baldwin (D-WI) for urging an investigation into Canadian dairy pricing policies that have impacted current trade and stand to negatively affect U.S. dairy farmers and manufacturers, jeopardizing the country’s trade commitment to the United States.

In a letter to U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack, Schumer and Baldwin expressed concern about Canada’s recently announced National Ingredients Strategy and its already active Ontario Class VI pricing program. According to the senators, these programs incentivize Canadian processors to use Canadian milk and dairy inputs, penalizing them for the use of imported dairy products.

“We are particularly concerned about reports that through these types of programs, Canada is moving to target New York and Wisconsin exports of ultrafiltered milk,” the letter continues. “Companies from our states inform us that they have already lost considerable export sales as a result of the Ontario dairy policy introduced this past spring.”

These types of programs are intended to discourage the use of U.S. dairy exports, the senators said, potentially worsening an already challenging economic situation for American dairy farmers.

Schumer and Baldwin also voiced their concern that implementing the new National Ingredients Strategy across Canada could raise further compliance issues with Canada’s NAFTA and WTO obligations by “impeding dairy trade” between the two countries.

Jim Mulhern, President and CEO of NMPF, commended the senators for their push to have Canada’s policies evaluated, saying: “This letter comes at a critical time for both trade and the well-being of America’s dairy producers. We appreciate the Senators’ attention to the importance of holding one of our largest trading partners to its international commitments and the key role that the U.S. government must play in doing so.”

Tom Suber, president of USDEC, concurred, noting: “Canada has built up a deeply problematic track record of instituting program after program to intentionally erect roadblocks to dairy imports. This volatile situation with a country that should be one of our most reliable trading partners, given the strength of the U.S.-Canada relationship, cannot continue to erode the investments that U.S. dairy companies have made in shipping to this market.”

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The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe.

The National Milk Producers Federation (NMPF), based in Arlington, Va., develops and carries out policies that advance the well-being of U.S. dairy producers and the cooperatives they collectively 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 www.nmpf.org.

From Jim Mulhern, President and CEO of NMPF:

ARLINGTON, VA – “We appreciate the prompt action taken by the U.S. Department of Agriculture today to purchase $20 million worth of cheese products to donate to food assistance programs, following the request made to USDA by NMPF on August 12.

“This cheese purchase will provide some assistance to America’s dairy farmers through increased demand for their milk, while also serving the needs of Americans who patronize food banks and other charitable assistance organizations that will distribute the cheese purchased by USDA.

“We will continue to assess the economic situation facing dairy farmers, and suggest ways to help farmers endure this lengthy period of low prices.

“We also appreciate the USDA extending the sign-up deadline for enrollment decisions in the dairy Margin Protection Program. Giving farmers until December 16 to adjust their coverage levels for calendar year 2017 will help increase the opportunity for dairy farmers to utilize this crucial risk management tool.

“We will continue to work with USDA and Congress to find ways to further improve the Margin Protection Program for dairy farmers.”

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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.

Aug. 12 – As America’s dairy farmers endure the lowest milk prices since the Great Recession of 2009, the National Milk Producers Federation today asked the U.S. Department of Agriculture to provide a measure of relief by purchasing at least $100 million worth of cheese products for donation to the needy