The U.S. Department of Agriculture recently reported that America’s dairy farmers produced a record 200 billion pounds of milk in 2012. Depending on your perspective, that’s both a problem, and an opportunity.

Increased milk production – and 2012’s total was up 2.1% from the 196 billion pounds produced in 2011 – is in most respects a good thing. It indicates that our industry is growing, not declining. Not all sectors of agriculture can say that. The problem that can arise from added production is reflected in the iron law of supply and demand. If there’s not enough demand for that new milk production, farmers’ milk prices will fall. That’s what happened in the first part of last year, until milk production slowed somewhat and demand caught up. New supplies of any commodity have to match up reasonably well with demand. If there’s an imbalance, prices can crater (or skyrocket, if the issue is supply not keeping up with demand).

The real driver of increased demand in the past decade has been the international market. While demand in the U.S. is growing 1.2% per year, sales of U.S. products to foreign markets are booming, rising from 5.1% of production in 2002, to 13.2% of production last year, on a total solids basis.

But this surge didn’t just happen. And it won’t continue to happen, absent the full and continued deployment of all the tools needed to keep the momentum going.

First of all, our increased export sales are the result of favorable trade policies, particularly the North American Free Trade Agreement (NAFTA). Mexico is our number one market, and continues to grow. Canada, even though it’s a protected market, is still our number two customer. Other free trade agreements in Latin America and the Pacific Rim have helped the cause, as has the overall trend towards more Westernized diets in the developing world. That’s one reason why NMPF is so heavily invested in creating favorable trade deals across the Pacific, and now, potentially, across the Atlantic with the European Union.

Another factor in increased foreign sales is the marketing expertise and intelligence provided by the U.S. Dairy Export Council (USDEC). The creation and sustenance of USDEC was always a long-term play by the U.S. dairy sector as it prepared for a globalized 21st century. Those seeds, planted in the 1990s, are now really bearing fruit, as the U.S. dairy industry capitalizes on opportunities it didn’t have a generation ago.

And one of the biggest factors behind this growth is another investment that farmers are making, in Cooperatives Working Together (CWT). Since its formation 10 years ago this spring, CWT has played a vital role in boosting U.S. dairy sales by helping assist its members in closing export deals. Last year, as a record volume of milk came from U.S. farms, CWT was essential in making certain at least some of that milk found a home in foreign markets.

Last year, CWT assisted in selling nearly 125 million pounds of American–style cheeses, 73 million pounds of butter, plus 128,000 pounds of anhydrous milkfat and 172,000 pounds of whole milk powder. To put those figures into perspective, cheese sold as a result of CWT assistance represented 83% of all American-style cheese exported, and even more importantly, 18% of all cheese exported. Since American–style cheese like cheddar is the product that most influences dairy producer prices in Federal Order calculations, these increased sales benefit all CWT contributors. Similarly, CWT-assisted butter sales were 62% of all the butter exported from the U.S. last year.

Many of America’s dairy farmers are rightly proud that they are participating in the world market like never before. But those sales don’t just happen; they result from a variety of forces, both short- and long-term, to help U.S. vendors capture market share, often wrestled away from competitors who are entrenched and tough businessmen.

As it starts its 11th year of operation, CWT continues to play a key role in minimizing inventories for butter and cheese products, thus fostering a more stable producer milk price. This is especially valuable at a time when no significant federal safety net exists for farmers. The next ten years will offer more opportunity for export sales, and more volatility in global pricing. We need tools like CWT to help take advantage of the first, and protect against the second.

With immigration reform moving high up on the list of issues that both political parties will address in the new Congress, NMPF President and CEO Jerry Kozak says he is “more optimistic than I have been in several years that the dairy industry’s call for legislation providing a stable, legal, year-around workforce will be included in a comprehensive immigration package this year.”

NMPF has been working closely for the past year and a half with other key farm groups, including the American Farm Bureau Federation and the National Council of Farmer Cooperatives, on efforts to develop a unified voice for agriculture on the immigration reform issue.” Now that the debate over immigration reform has moved to the fore, it is more important than ever for agriculture to be working together,” Kozak said.

To further that collaboration, NMPF helped to create the Agriculture Workforce Coalition (AWC), a coalition that is representing agriculture’s needs as immigration reform legislation is developed. NMPF has worked to ensure that AWC endorses policy proposals consistent with the needs of NMPF’s dairy farmer members. Specifically, the proposal moves agriculture away from a focus on the failed H2A program – which has never met the needs of dairy farmers – in favor of a new program that encompasses the workforce challenges faced by year-around industries like dairy farming. Additionally, the AWC proposal, if adopted, will ensure that farmers do not lose their current workforce due to changes to the U.S. immigration system.

According to Kozak, NMPF was pleased with the recent Senate proposal released by the “Gang of 8,” a bipartisan group of Senators who have drafted a comprehensive solution to immigration and border security challenges. NMPF and AWC have worked closely with Senator Dianne Feinstein (D-CA) and Senator Marco Rubio (R-FL) to develop legislation that considers the needs of dairy farmers and agriculture in general. These efforts will become the starting point for the Senate’s efforts to pass an immigration measure.

NMPF also has been meeting with members of the House of Representatives and their staffs to discuss agriculture’s priorities. At the first House hearing this week on immigration reform, Judiciary Committee Chairman Bob Goodlatte, (R-VA), noted the specific needs of agriculture in the immigration reform effort, saying that U.S. laws “erect unnecessary hurdles for farmers who put food on America’s tables. Our agriculture guestworker program is simply unworkable and needs to be reformed.”

“It is clear from these efforts that members of both parties and both chambers understand the unique needs of agriculture with regards to immigration reform,” Kozak said. “We are very pleased with the tenor of these discussions and we remain confident that when legislation regarding immigration reform is considered in the House, the needs of dairy will be addressed.”

Last month, the U.S. Farmers & Ranchers Alliance (USFRA®), a coalition of which NMPF is a member, announced that dairy farmer Will Gilmer (left) from Sulligent, AL, had been selected as one of four winners in its Faces of Farming & Ranching program, a nationwide search launched in summer 2012 to help put real faces on the American agriculture industry.

Chris Chinn from Clarence, MO, Katie Pratt from Dixon, IL, and Bo Stone from Rowland, NC, were the other three winners. The winners will act as national spokespeople and share stories and experiences on a national stage to help answer consumers’ questions about how food is grown and raised to feed our nation. More than 100 applications had been submitted to the Faces of Farming & Ranching program from passionate, dedicated farmers and ranchers across the country.

Gilmer and his father own/operate a dairy farm in Alabama’s Lamar County. The dairy has been in continuous operation since Will’s grandfather established it on his parents’ farm in the early 1950s. They currently milk 200 Holstein cows and raise their own replacement heifers, while managing 600 acres of land used for pasture and forage production. Those forages include hay, summer silage crops, and small grains/ryegrass for both silage and strip grazing. Gilmer is an active contributor to social media, with a series of videos on his YouTube channel. He is a member of Dairy Farmers of America.

From Nov. 15 – Dec. 15, 2012, thousands of people visited www.fooddialogues.com/ to learn more about the candidates and to vote for whom they believed best represented American agriculture. In addition to the public vote, a panel of judges from throughout the food and agriculture community interviewed and evaluated the finalists to help determine the winners of Faces of Farming & Ranching. Criteria included the ability and commitment to share their stories about continuous improvement; involvement with the community and agricultural organizations; strong speaking capabilities, and a passion for what they do.

NMPF is accepting applications for its National Dairy Leadership Scholarship Program for academic year 2013-2014.

NMPF's Board of Directors offers scholarships each year to qualified graduate students (enrolled in Master's or Ph.D. programs) who are actively pursuing dairy-related fields of research that are of immediate interest to NMPF member cooperatives. Graduate students pursuing relevant research are encouraged to submit an application (applicants do not need to be members of NMPF to qualify). The top scholarship applicant will be awarded the Hintz Memorial Scholarship, which was created in 2005 in honor of the late Cass-Clay Creamery Board Chairman Murray Hintz, who was instrumental in establishing NMPF's scholarship program.

Recommended fields of study include but are not limited to Agriculture Communications, Animal Health, Animal and/or Human Nutrition, Bovine Genetics, Dairy Products Processing, Dairy Science, Economics, Environmental Science, Food Science, Food Safety, Herd Management, and Marketing and Price Analysis.

Applications are due no later than Friday, May 3, 2013. For an application or more information, please visit the NMPF website. For questions, please contact Betsy Flores.

A comprehensive new government analysis of the sources of foodborne illness found that because of the consumption of raw milk products, dairy foods are the second leading source of viral and bacterial problems.

The report, produced by the Centers for Disease Control and published in the journal Emerging Infectious Diseases, found that during a ten-year period from 1998 to 2008, dairy products caused 14 percent of the illnesses and 10 percent of the deaths. Only leafy greens had a higher incidence of illness. Part of the reason why dairy products were commonly linked to foodborne illness is that their level of consumption is high, with many Americans eating some form of dairy product every day. The other reason is that the consumption of raw fluid milk, and home-made cheeses made from raw milk, continues to grow.

The CDC report is “a compelling illustration of why NMPF has asked federal and state regulators and legislators to more aggressively oppose efforts, many of them at the state level, to expand the sales and availability of raw milk,” said Jerry Kozak, President and CEO of NMPF. “The purported benefits of the products over pasteurized milk have no scientific validity and are impossible to prove, but the health risks are clear, as this report indicates.”

Foodborne illness sends 128,000 Americans to the hospital each year and leads to 3,000 deaths annually. To compile the report, the CDC evaluated more than 4,500 food-borne disease outbreaks from 1998 to 2008.

Dairy producers from around the country will pack their bags and head to Indianapolis, Indiana, for the April 7 – 9, 2013 National Dairy Producers Conference (NDPC). Held every other year, the NDPC will provide an in-depth discussion of the issues facing the dairy industry, with educational discussions on many of the key challenges looming in 2013.

"We are excited to be heading to Indianapolis for this year’s meeting," said Jerry Kozak, President and CEO of NMPF, which hosts the conference. "The NDPC is an effective way to analyze the status of the dairy industry now, and discuss possible solutions for the future."

The meeting will include panels on some of the most important topics dairy producers are facing today. Immigration reform will be taking center stage in 2013, and dairy farmers will be fully engaged in that debate in Congress. Financing issues continue to challenge farmers, even though the general farm economy is improving, and there are still several questions and uncertainties about dairy lending.

Some dairy producers don’t realize the impact on the entire market chain that can result when they decide to sell or euthanize a dairy cow. Thus, one panel will address the importance of making informed decisions and ensuring that an animal is appropriate to market, is handled humanely throughout the process, and that the meat that results is a safe, quality product.

Protecting and promoting the integrity of U.S. dairy products has always been a challenge, and there are threats from non-dairy pretenders such as “soy milk” seeking to cash in on the appealing image of traditional dairy foods. In addition, European competitors are trying to prohibit the use of long-standing common names like parmesan and feta by American dairy producers and manufacturers.

A final panel will examine livestock manure and water quality issues, and look at innovative ways to turn manure management from a cost-center to a profit-center.

Individual speakers will also discuss the Dairy Security Act’s margin insurance program, technology and innovation on dairy farms, and the challenge of high and volatile feed prices.

The NDPC sessions will be preceded by an optional farm tour that will take place on Sunday, April 7. Participants will visit Fair Oaks Farms in Fair Oaks, IN.

Although the conference is geared primarily toward dairy producers, anyone with a stake in the dairy industry is invited to attend. This may include dairy cooperative executives and directors, processors, suppliers and consultants to the dairy industry, state and federal regulators, promotion organization executives, and academics.

Participants are encouraged to secure their farm tour spot, meeting registration, and hotel reservation at www.registration123.com/NMPF/2013NDPC. The hotel’s cut-off date for discounted room reservations is Thursday, March 14. After that date, the room rate will be confirmed on a space and rate-available basis.

For complete information about the NDPC, please visit www.nmpf.org/NDPC.

The U.S. has successfully negotiated a resolution with China on an import dairy certificate, a measure that provides certainty to U.S. dairy exporters in order to enhance U.S.-China dairy trade.

U.S. and Chinese government officials had been negotiating a new certificate for nearly three years, since China revised its requirements under the dairy certificate in the first part of 2010. Despite continued access to the Chinese market, the lack of an agreed-upon certificate impeded greater U.S. dairy exports, due to the uncertainty of whether the issue would ultimately be resolved.

“We commend the administration, as well as the Chinese government, for their conscientious and cooperative work on the dairy certificate over the past three years,” said Jerry Kozak, NMPF President and CEO. “The positive announcement of a new certificate lifts the uncertainty that hung over the Chinese market, thereby encouraging greater U.S. dairy sales.”

U.S. dairy sales to China in 2012 were an estimated $400 million. U.S. dairy exports to China have grown by more than 100% since 2010 and are expected to continue to grow to help meet the increasing demand for dairy products in that country.

The U.S. will begin issuing the new certificate immediately for product destined for China. Certificates issued by the U.S. prior to Jan. 18, 2013 will be valid through March 20, 2013 but not accepted by China after that date.

Members of Family Dairies USA, Manitowoc Milk Producers Cooperative, and Milwaukee Cooperative Milk Producers successfully voted on December 18, 2012 to merge the three cooperatives and create FarmFirst Dairy Cooperative, which began operating as a unified entity on January 1, 2013. The new cooperative’s headquarters is in Madison, WI.

FarmFirst will represent more than 5,000 farms in Wisconsin, Minnesota, South Dakota, Michigan, Iowa, Illinois, and Indiana through policy bargaining, dairy marketing services, laboratory testing opportunities, and industry promotion.

Dennis Donohue, general manager of Manitowoc Milk Producers Cooperative, will serve as the General Manager of FarmFirst. Donohue will continue to serve as the cooperative’s representative on the NMPF Board of Directors. Peter Kleiman, who owns and operates a 100-cow, 800-acre operation in Wilson, Mich., was elected president of the FarmFirst Dairy Cooperative board of directors. David Cooper, General Manager of Family Dairies USA, will serve as assistant general manager, and Jim Bird, General Manager of Milwaukee Cooperative Milk Producers, will assume the role of manager and director of lab services and special projects.

Under FarmFirst Dairy Cooperative, the combined member representation will be divided into a total of nine districts, based on membership within each district. The current directors from each of the three cooperatives will transition into the new organization, helping ensure consistency in leadership and membership voice.

Family Dairies USA Milk Program and the Fox Valley Quality Control Laboratory will continue to operate as subsidiaries of the new cooperative.

To learn more about FarmFirst Dairy Cooperative, please visit their website at www.farmfirstdairycooperative.com.

The 2013 Cooperatives Working Together (CWT) Export Assistance program got off to a record start in January, receiving 160 requests for assistance from 10 CWT member cooperatives. That total included 128 assistance requests for cheese, 28 for butter, and two each for whole milk powder (WMP) and anhydrous milkfat.

After doing a comprehensive economic review of the requests received each week, four were accepted by CWT at the level of support members had requested. For the remainder, CWT advised members that the level of assistance they asked for was too high, based on market fundamentals. CWT determined that assistance should not be necessary on two of the requests submitted.

Of the 154 counter offers CWT made to members, 66 cheese offers were accepted, bringing the total cheese sales assisted to 19.3 million pounds. Twenty butter offers were accepted, taking total sales to 9.8 million pounds, and two WMP offers totaling 88,185 pounds were accepted. This was the equivalent of 391 million pounds of milk, or the same as the annual production of 18,600 cows.

The product was destined for 23 countries on six continents and will be delivered from January through July.

Senate Majority Leader Harry Reid reintroduced into the Senate the same farm bill that previously passed the full Senate last summer, as a signal that the chamber plans to move aggressively on passing a new farm bill in 2013.

The 2013 farm bill has been formally designated as S. 10, making it part of a short list of priority pieces of legislation awaiting action in the Senate. NMPF applauded Reid’s decision, saying that “it recognizes that the dairy policy reforms contained in the bill, along with other provisions in the measure, passed with overwhelming, bipartisan support last summer. The bill’s Dairy Security Act will give farmers a better safety net while reducing taxpayer costs at a time when Congress is searching for ways to trim federal spending,” said Jerry Kozak, President and CEO of NMPF.

“We look forward to working with Senator Reid, as well as with Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and new ranking minority member Sen. Thad Cochran (R-MS), as the Committee updates the Farm Bill in the coming weeks. We will continue our bipartisan efforts in both the Senate and House to get a five-year farm bill passed that provide our producers the security and stability they need.”

Last week, the U.S. Department of Agriculture (USDA) officially announced the terms for the Milk Income Loss Contract (MILC) program extension, as included in the fiscal cliff bill passed on January 1, 2013. The payment rate for September 2012 milk production is $0.59 per hundredweight, the last month in Fiscal Year 2012. The payment rate for October 2012 is approximately $0.02 per hundredweight, and there is no payment for November 2012.

Before the October MILC payment can be issued, dairy farmers must complete a new Average Adjusted Gross Income (AGI) form for 2013. The new form, CCC-933 Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information, must be completed by producers before they can receive payments for a variety of programs administered by FSA and USDA’s Natural Resources Conservation Service. The AGI limit for dairy is $500,000 for off-farm income. There is no AGI limit for on-farm income.

Dairy operations may select a production start month in FY 2013 other than October 2012. If they do, they must visit their local FSA office between February 1 and February 28, 2013, also known as a relief period.

For more information about MILC updates, please visit the USDA website. Information is also posted on the NMPF website, including NMPF’s own approximate projections for possible payments.

When the dust settles after each presidential election, political analysts often trip over themselves trying to figure out the meaning of the choices voters made, in both local and national campaigns. It’s debatable as to whether there were many clear take-aways from the recent 2012 election, but if anything obvious emerged, it was a need to address the politics and policy of the nation’s immigration laws.

After the election outcome in several states turned on the proportion of Latino voters giving a margin of victory to President Obama, Republican political strategists have recognized that the party’s implacable opposition to a reasonable reform of immigration policies – one that moves beyond just “enforcement only” – is the politically prudent path. Meanwhile, Democrats also recognize the importance of this issue to the growing Hispanic population in America. Not only is fixing this contentious issue good politics, it also will help shore up the economics of importance business sectors, ranging from construction and hospitality, to agriculture – especially dairy farming.

As a result of this emerging consensus on the need to act, leaders of both parties, including President Obama himself, have pledged in the past month to focus on a comprehensive approach to immigration reform. This shift in tone and outlook is welcome news for America’s dairy farmers, who, along with many other agricultural employers, have been pushing for nearly a decade for labor policy reforms that will favorably affect their current and future workforce.

The National Milk Producers Federation is one of these farm groups, who have recently formed a new alliance, the Agriculture Workforce Coalition (AWC), to marshal the resources of 11 national and regional organizations dedicated to reforming immigration policy. The AWC membership has forged a consensus proposal to make badly-need changes in laws affecting the farm sector, as part of any large immigration reform package that moves this year through Congress.

The AWC proposal includes both an opportunity for adjustment in legal status to be earned by current agricultural employees who presently lack such status, and a program to ensure an adequate farm workforce in the future. Also, unlike current programs such as the H-2A visa, the AWC proposal is meant to ensure that all types of food producers—including both those with seasonal labor needs and ones with year-round labor needs (i.e., dairy farmers) —have access to the workforce they need to remain productive and competitive.

It’s one of the ironies of the national economy in the past five years that, even while the unemployment rate has remained stubbornly high, business owners in some areas have trouble recruiting a suitable labor force. The fact is that farmers and ranchers have long experienced difficulty in obtaining workers, as the jobs they offer are physically demanding and conducted year-round in all types of weather. To most U.S. residents seeking employment, these conditions, which are typical of dairy farms, are not attractive.

A number of studies document this fact, including one conducted in 2009 by NMPF and Texas A&M University, which found that U.S. dairies employed 138,000 full-time equivalent workers, of which 57,000, or 41%, were foreigners. The NMPF survey found that if federal labor policies were to result in the loss of just half of those 57,000 workers, an additional 66,000 workers would also be lost, due to the closure of some dairy farms, and the resulting multiplier effect of fewer jobs in grain and fertilizer production and sales, veterinary services, milk hauling, and related agricultural service jobs. This would produce an economic loss of $11 billion.

Recognizing the need to achieve a once-in-a-generation public policy reform, and actually getting it done, are two very different things. The 2012 farm bill is a good example of how the best intentions can be thwarted at the last minute by the forces of inertia. But in addition to pushing again on the farm bill in 2013, NMPF views the immigration policy reform opportunity as incredibly necessary, and increasingly likely.