Immigration reform also will be in the spotlight as Congress returns for the second session of the 113th Congress. After numerous bills, including an agriculture-specific bill, stalled in the House at the end of 2013, prospects for action in 2014 received a strong boost when House Speaker John Boehner began signaling supporters of immigration reform that he would push for action on legislation this year. While the timing of that process remains unclear, the signals sent by Speaker Boehner are a marked improvement from even a few months ago.

Unlike the Senate, which passed a comprehensive reform measure, the House will pursue a piecemeal approach centered on a series of bills passed last year by the House Judiciary Committee. One of those measures, the Agriculture Guestworker Act (H. R. 1773), was created specifically to deal with the challenges of using immigrant labor in the agricultural sector. While this legislation includes important reforms that would benefit agriculture – and specifically dairy farms – improvements will be needed to ensure that this measure fully addresses the number one concern for the dairy industry: maintaining farmers’ current workforce.

NMPF has been deeply engaged in efforts to revise our nation’s immigration system through its work with the Agriculture Workforce Coalition (AWC), a coalition of more than 70 agriculture organizations dedicated to reforming our nation’s immigration laws for the benefit of producers and growers. NMPF will continue to work with the AWC and members of Congress to ensure that any legislation that is passed by the House fully addresses the needs of dairy farmers.

Cooperatives Working Together (CWT) had its biggest year in 2013, with American-type cheese export sales topping 127 million pounds, and butter exports approaching 90 million pounds. The product is going to 40 countries on six continents.

CWT-assisted cheese sales rose 5.4 million pounds (4.4%) over 2012’s level, to 127.9 million pounds. The primary type of cheese sold was cheddar at 76%; however, the percentage of export sales that was Gouda reached 5% in 2013, up from just 2% in 2012. Monterey Jack exports through CWT reached 19% last year, up from 13% in 2012.

The majority of cheese sales were in Asia, with Japan the largest buyer. North Africa accounted for 25% of sales, with the lion’s share being sold in Egypt. Sales to countries in the Middle East accounted for 12% of sales.

CWT-assisted butter sales (at 82% fat content) reached 97.2 million pounds in 2013, up 16.1 million pounds (22%) from the sales level reached in 2012. The Middle East bought 53% of the 2013 CWT-assisted butter sales, with Saudi Arabia accounting for 40% of the sales in the Middle East, followed by Iran at 21%.

Through October of 2013, shipments of CWT-assisted sales represented 19% of total U.S. cheese exports, and 82% of all American-type cheese exports. For butter, the 80.5 million pounds of shipments sold with CWT export assistance is equal to 57% of all butter exported in the first 10 months of 2013.

Thanks to the continuing investment of the dairy farmer members of 38 cooperatives in 2014 and 2015, CWT will be able to provide export assistance when needed to cooperative members that are expanding the market for U.S. American-type cheeses, butter and whole milk powder in key foreign markets.

Just in time for the playoffs, NMPF is out with a video reminding the public that “real dairy products and football are a great team.” The 26-second YouTube video features DairyUS, the newly created, animated version of the REAL® Seal logo. The video highlights the fact that nachos, dips, and pizza—all made with real cheese—are a great complement to watching football.

NMPF took over management of the REAL® Seal in 2012 and has been promoting the seal heavily on the internet and in social media in recent months. In February, these efforts will focus on Valentine’s Day, and in March they will leverage March Madness and St. Patrick’s Day.

The American Butter Institute (ABI), managed by NMPF, has unveiled a new logo for the association, one of the many recent changes at the 106-year-old organization.

“As a result of the changes made through our strategic planning process, it was determined that ABI needed to revitalize and revamp its logo to bring it more into the 21st century. The ABI board voted on the new logo at its October meeting, and we are launching it this week,” said Anuja Miner, the Executive Director of ABI.

In addition to approving a new logo, the ABI Board last autumn named Miner the organization’s Executive Director. She takes over as the chief ABI staff person from Jerry Kozak, who has retired from the dairy industry after running ABI for the previous 22 years.

ABI also reported this week that U.S. butter consumption in 2013 reached its highest level in 40 years. Miner attributed the increase in part to a shift in consumer preferences away from highly processed foods, artificial ingredients, and trans fats derived from partially hydrogenated vegetable oils. Recently, the U.S. Food and Drug Administration began the process of banning trans fats from the American food supply.

“Margarine and other spreads are no longer viewed as healthier alternatives,” she noted, as consumers are demanding more pure and natural products. Since 2002, Americans increased their butter intake by 25 percent. In 2012, per capita consumption reached 5.6 pounds a year, up from a low point of 4.1 pounds in 1997.

December was an intensive month for trade negotiations of importance to U.S. dairy farmers. Heated negotiations in both the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) dominated last month.

In early December, NMPF staff traveled to Singapore for a TPP Ministerial meeting at which the 12 TPP countries sought to make significant progress on many of the issues that remain unresolved in the negotiations. Market access was one notable topic of focus – particularly as it relates to Japan and Canada. NMPF joined with several other U.S. agricultural organizations in sending two letters to the Obama Administration about the critical importance of securing access into Japan and Canada. The letters are available here and here.

Also last month, the U.S. and European Union (EU) officials continued to negotiate TTIP provisions. NMPF gave a presentation at the stakeholder session focused on the core parameters dairy farmers need to see in this agreement in order to address the $1 billion dairy trade deficit the U.S. would like to close with members of the EU.

Staff stressed that this imbalance is the result of overly-restrictive EU rules that impose unscientific and onerous requirements on imports from the U.S., as well as other barriers to trade such as banning the use of many common product names. The EU has made clear that one of its key goals for TTIP is to extend these product naming barriers to the U.S. market as well. NMPF is vehemently opposed to any such restrictions on the names U.S. companies can use – whether in the U.S. market, overseas, or in the EU itself.

NMPF and the U.S. Dairy Export Council (USDEC) have welcomed the introduction this week in Congress of the Trade Priorities Act (TPA) of 2014 by Sens. Max Baucus and Orrin Hatch, and Rep. Dave Camp. The bipartisan legislation sets forth key negotiating objectives for the Administration, and outlines engagement requirements providing for an enhanced role for Congress in trade negotiation consultations.

The TPA-2014 legislation contains several elements of importance to the U.S. dairy industry, including:

• Prioritization of tariff reduction for U.S. products that face significantly higher foreign tariffs or subsidy regimes by major producing countries, both of which are global challenges for U.S. dairy exports;
• The pursuit of strong and enforceable rules on sanitary and phytosanitary (SPS) measures;
• Direction urging the Administration to eliminate and prevent the undermining of market access for U.S. products through improper use of geographical indications; and,
• A specific negotiating focus on goods subject to U.S. tariff rate quotas, as is the case for most dairy products.

“This legislation recognizes the importance of clearly identifying the goals and priorities that are most vital to the successful negotiation of balanced trade agreements,” said Jim Mulhern, president and CEO of NMPF.

Both organizations stressed that TPA’s role is to lay the ground work for Congressional consideration of trade agreements, but it is by no means an automatic stamp of approval on any agreement currently underway. The details of each final trade deal and the degree to which it meets the dairy industry’s key priority for that negotiation will determine whether or not that agreement is one that merits support.

The Food and Drug Administration announced Jan. 7 that it will be establishing a list of U.S. dairy companies interested in exporting to China. This is being done to help comply with new Chinese government regulations relating to the importation of dairy products into China.

Any company that is currently exporting dairy products to China, or intending to export dairy products to China in the future (either directly or via a trading company), is strongly encouraged to follow the guidelines in the FDA notification about being placed on the list. China has advised FDA that products from companies not included on the list could be blocked from import. FDA plans to update the list quarterly going forward, with the first submission to China being made no later than April 30, 2014.

FDA’s announcement did not include a deadline by which companies must register. Therefore, NMPF encourages companies to initiate the registration process without delay and complete it no later than March 31st in order to avoid complications. The FDA registration guidance document can be found online.

Those with questions can contact Shawna Morris.

As the organization prepared for another active year in 2014, NMPF announced staffing changes to help achieve the best possible results over the next year.

In addition to Jim Mulhern taking over as the President & CEO, and Brenda Rowe joining the staff as Mulhern’s executive assistant, Beth Briczinski was promoted to Vice President, Dairy Foods & Nutrition. Also receiving a promotion was Betsy Flores, who now holds the title of Vice President, Animal Care. In addition, Jamie Jonker is now the Vice President of Sustainability & Scientific Affairs.

Long-time NMPF board member Bill Dropik, 75, passed away December 24th at his home in Nelson, MN. In addition to representing First District Association on the NMPF Board of Directors for eight years, Dropik was active in the Minnesota Milk Producers Association and the Dairy Leaders Roundtable. He farmed in central Minnesota for 50 years, and was still actively involved in his family dairy operation until his death. He is survived by his wife of 55 years Helen, eight children, 22 grandchildren, and 19 great-grandchildren.

As the new President and CEO of NMPF, I look forward in the coming years to continuing the use of this forum to communicate my views about the challenges – and opportunities – facing NMPF and the dairy industry. Hopefully, the timing of this, my first column, is fortunate in the sense that many of us start each New Year making lists of things we’d like to do (or stop doing), change or achieve. For my inaugural CEO’s Corner column, then, let me start with a brief list of the things we’ll being working on with NMPF’s members in the coming year.

The top item on that list is, for better or worse, a holdover from last year, and even the year before that: establishing a new and better safety net for dairy farmers. What should have been achieved by Congress in 2012, and what had a chance of getting done last year, was passage of a new farm bill containing the Dairy Security Act. NMPF and its members have been working hard with Congress since 2009 to devise and pass a new dairy program. The good news is that it appears we’re on the cusp of getting a farm bill done as 2014 begins.

Members of the House and Senate are returning to Capitol Hill this month, and finalizing the farm bill is also at the top of the list of New Year’s resolutions for them. I am cautiously optimistic that the farm bill negotiations between members of the House and Senate Agriculture committees will produce an economically and politically viable bill. It’s been bedeviled by controversies ranging from the marketing of catfish and eggs, to the level of spending on food stamps and crop insurance – but differences over these items can and will be resolved. We still need to thread the needle by ensuring that the resulting bill will pass both chambers, and be signed by the President, but I believe we’re just about there.

The second part of this resolution is just as critical: namely, ensuring that once Congress has finished its work in passing the farm bill, the resulting dairy program must be quickly and effectively implemented by USDA. New rules and regulations will have to be developed by USDA once the farm bill becomes law. Since the new margin insurance program will be the biggest change in dairy policy in many years, there’s going to be a learning curve, especially for farmers who will have to make important decisions about whether to participate in the insurance program, and at what level of coverage.

This isn’t on the scale of educational challenges resulting from, say, the Affordable Healthcare Act, but the point is still that information must be shared quickly and clearly with farmers, and we can’t rely just on the Agriculture Department to do that job. NMPF will be working hard with its members to help shoulder the load.

Another item that’s a holdover from the past, but that is also critical to the future success of the dairy industry, is immigration reform. That effort has moved in fits and starts for more than a decade. The passage of last year’s comprehensive reform bill in the Senate was a crucial and welcome step. The House needs to follow suit and pass similar legislation, in whole or in part, so that we can work with leaders in both chambers to get something done. The window for getting legislation passed in the coming year is narrow but not closed. That’s why we have to resolve to make it happen in 2014.

Yet another priority issue is maximizing the value of the pending Trans-Pacific Partnership (TPP) trade agreement to America’s dairy farmers. Negotiations of this pact will likely determine this year whether the TPP final agreement represents a net positive opportunity for the U.S. dairy sector. We need greater disciplines on non-tariff barriers, as well as greater access into Canada and Japan, in order for a TPP agreement to be useful to America’s dairy farmers. We also need reforms of New Zealand’s dairy policies as part of the deal.

The other thing I’m putting on my list is something I mentioned in my speech last November to NMPF’s members: beginning the dialogue on reforming the Federal Milk Marketing Order system. The industry will need time to adjust to a new dairy safety net in 2014, but the underlying system of determining classified prices also needs to be improved. I believe we can capitalize on the momentum behind the Dairy Security Act, and begin the work within the producer and cooperative community of solving the next, essential piece of the pricing puzzle by addressing federal order reform.

I look forward in 2014 to working on all of these issues, and more, to strengthen our industry and build a more prosperous future for America’s dairy farmers.

ARLINGTON, VA – ’Tis the season to enjoy real dairy products such as butter, cheese, whipped cream, and eggnog, according to DairyUS, the animated character based on the iconic REAL® Seal logo, who shares that perspective in a new video that was released today by the National Milk Producers Federation (NMPF).

Visitors to the REAL® Seal website www.realseal.com will be greeted by an animated DairyUS throughout the holiday season. Flying over snowy rooftops in a sleigh pulled by festive dairy cows instead of reindeer, DairyUS and his industrious little elf remind consumers that December is the perfect time to incorporate real dairy products into their holiday recipes.

DairyUS was created earlier this year to help a new generation of consumers distinguish between genuine U.S. dairy products and a growing list of list of imitations. A contest was held in the fall to select his name, with the winner being announced at NMPF’s annual meeting in Phoenix last month. In addition to his presence on the REAL® Seal website, he also has made appearances on the REAL® Seal Facebook page as well.

“DairyUS will help both kids and adults learn about foods made with real dairy products,” NMPF’s incoming President & CEO Jim Mulhern explained. “The REAL® Seal means a product is a real dairy product, made with milk from cows on U.S. dairy farms and without imported, imitation, or substitute ingredients. That’s an important distinction consumers can make when they’re browsing the grocery store aisles.”

The animated character has already appeared in other short videos this year. He will continue to do so in 2014 to highlight topical and seasonal events, such as holidays and sporting events, providing consumers with easy tips to incorporate more real dairy foods into their everyday meals.

 

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 more than 32,000 dairy producers on Capitol Hill and with government agencies.

The leaders of the House and Senate Agriculture committees continue to negotiate this week on a number of issues to break the impasse over the long-pending farm bill. Those differences include the final shape of an updated federal dairy program, but also range from the level of food stamp cuts, to conflicts between row crop producers in various parts of the country. 

The Senate will not formally return to Washington until next week, while the House is scheduled to adjourn for the year next Friday. Talk continues to grow about the need for a short-term extension of current policies to stave off the implementation of permanent agriculture law, and with it the dairy “cliff” of higher price support levels for milk and other commodities. NMPF continues to urge farm bill conferees to finish their work in the coming weeks so that pressure for a long-term extension of a year or more doesn’t gain any traction. Farmers can use NMPF’s Dairy GREAT system to urge Congress to support the dairy provisions in the Senate bill.

Meanwhile, NMPF last week circulated a new analysis of the House and Senate dairy plans, which showed the Senate language backed by NMPF will cost $100 million less over 10 years than the House program, which is backed by dairy processors.

The analysis, by the nonpartisan Congressional Research Service, was the first to directly compare the House and Senate versions of the farm bill. It put the 10-year cost of the Senate dairy program at $302 million above current programs, and the House language $418 above that so-called “baseline.”

Incoming NMPF President Jim Mulhern said the analysis, while conservative, buttressed NMPF’s point that the final dairy program needs to couple margin insurance with a market stabilization program that caps costs. That is essentially the Senate plan.

“Without the market stabilization program to both reduce the duration of low margin conditions, and reduce government outlays … the House plan would be a budget-buster—and one that we urge the conferees to reject,” Mulhern said.

Mulhern also criticized attempts to distort an earlier analysis to show that consumer prices will increase under the Senate program. The earlier analysis was done by University of Missouri agricultural economist Scott Brown.

“The purpose of market stabilization is to keep farmers’ milk prices from staying too low, for too long,” Mulhern said. “Any suggestion that it will spike retail prices to abnormally high levels is a deceitful and deliberate misinterpretation of the studies done on the impact of the (two bills).” In the Brown analysis, the average difference in farm milk prices between the two approaches was only two cents per gallon over four years, not enough to significantly impact retail prices.