Safety Net with Margin Insurance, Market Stabilization, Steadies Milk Prices, Lowers VolatilityARLINGTON, VA – A new analysis issued by the Congressional Research Service (CRS) points out the advantages of the margin insurance and market stabilization-based approach to reforming dairy policy, according to the National Milk Producers Federation (NMPF), which urged members of Congress to review the report and act on the Farm Bill yet in 2012.

The CRS report was released earlier this week in order to help members of Congress and their staffs better understand the details of current dairy policy, and potential changes to those programs. More importantly, the CRS report provides an impartial view of the specific programs contained in the Dairy Security Act of the pending Farm Bill.

NMPF President and CEO Jerry Kozak said that the CRS report “should greatly clarify and simplify the decision-making process on Capitol Hill. It dispels the scare-mongering distortions offered by opponents of the Dairy Security Act, highlights the benefits of a new, voluntary approach to providing a safety net to farmers, and reinforces the need to include the Dairy Security Act in a new farm bill.”

Kozak said that even though the House has failed to act on the farm bill in September, the CRS report should expedite the process of considering the bill after the November elections in a lame duck session of Congress.

Under the Dairy Security Act, those farmers who voluntarily elect to receive support through the margin protection program will be subject to the Dairy Market Stabilization Program (DMSP), which sends signals to participants to reduce their production when margins are severely compressed. The CRS analysis clarifies the function of the DSMP by stating (p. 17) that “Although the DMSP is referred to as a supply management program, it is perhaps more accurately described as a production disincentive program [emphasis added], since there are no production limits or quotas, and the dairy operator may continue to run his operation at any production level.” CRS reported that the resulting milk production reductions, along with greater demand stimulated by USDA purchases of dairy products using funds collected by the DMSP, “is expected to result in a high future farm price for milk.”

CRS also flagged (p. 20) a key provision: that the DMSP ends either when margins improve, and/or when U.S. prices for cheddar cheese and nonfat dry milk exceed world prices by a certain percentage, thus preventing a loss of export markets and a surge of imports.

The CRS report also reviewed a competing approach to providing margin insurance: the Goodlatte-Scott House amendment, which offers a weaker insurance program that does not contain a market stabilization element. CRS noted (p. 22) that with the Goodlatte-Scott approach, “no production growth is permitted,” and insurance coverage is limited to only 80% of a farm’s production – compared to 90% under the Dairy Security Act.

The CRS report points out (p. 10) that the margin insurance program creates “a timely and transparent measure of a dairy production margin that will be useful across all dairy production regions.” The margin’s feed costs are calculated comparing the national all-milk price with national average costs for corn, soybean meal and alfalfa hay.

In reviewing other empirical studies of the provisions of the Dairy Security Act, CRS highlighted (p. 23-24) several major improvements compared to current programs:

• The combination of the margin insurance and market stabilization programs “appears to substantially mitigate the dairy operating margin volatility.”
• The Dairy Security Act “will provide a stronger safety net in extremely low margin events.”
• An analysis by agricultural economist Mark Stephenson found that net milk exports actually expand under the Dairy Security Act.

The congressional analysis of the Dairy Security Act also notes that the proposed Farm Bill programs are voluntary. Farmers would elect to participate in the margin protection and market stabilization programs, rather than choose private insurance that is already available.

 

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 30 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.

Time Running Out for Legislators to Improve Dairy Farmer Safety Net

WASHINGTON, DC – Members of the National Milk Producers Federation (NMPF) joined hundreds of other farmers on Capitol Hill today at a rally urging Congress to pass a new, five-year farm bill before current farm programs expire in less than three weeks.

NMPF is a founding member of the Farm Bill Now coalition, which brought dozens of groups and hundreds of farmers together Wednesday at the steps of the U.S. Capitol. One of them was NMPF First Vice Chairman Ken Nobis (in the photo), a dairy farmer from St. John, Michigan, who told those assembled that politics shouldn’t stand in the way of helping America’s farmers.

“Dairy farmers have worked with Democrats and Republicans, in the Senate and the House, to create a farm bill that saves taxpayers money, and at the same time offers dairy producers a more effective safety net when times are tough,” Nobis said. “It would be a tragic mistake, after this bill has already passed the Senate, and the House Agriculture Committee, to let it wither and die on the political vine, rather than make the necessary effort to get it passed in the coming weeks.”

Nobis reminded lawmakers that the dairy reforms included in the new farm bill will reduce government expenditures compared to current policy, which should appeal to those members of the House concerned with the deficit.

“If the question in Washington is how to reform government programs and make them more effective, we have an answer: pass the 2012 Farm Bill. The dairy title, along with the rest of the program, is budget-friendly. By not acting on this measure, Congress actually increases federal spending next year,” Nobis said.

There are fewer than ten days left on the legislative calendar of the House of Representatives before the Congress adjourns in October. If the bill can’t be approved this fall, the path forward is murky at best. Other possible outcomes include a farm bill being passed by a lame duck session of Congress after the November elections, or a one-year extension of current farm programs.

NMPF’s Board of Directors earlier this year came out against the latter option, asserting that an extension of current policy through 2013 does dairy farmers no real good, and leaves the tough choices about budget priorities unresolved.

NMPF President and CEO Jerry Kozak said that if Congress can’t generate the necessary effort to pass a new farm bill this year, the organization would not support an extension of current dairy programs, and instead would insist on getting the Dairy Security Act – the dairy reform bill already included in the Senate version of the Farm Bill – included in any extension package of other farm programs.

“We’ve come too far to acquiesce to another serving of the status quo. Dairy farmers need more than platitudes from Congress – we need action and leadership,” he said.

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 30 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.

With less than two months to go, dairy farmers are encouraged to register soon for the 2012 annual meeting that NMPF hosts jointly with the National Dairy Promotion and Research Board and the United Dairy Industry Association. The meeting will be held October 29 – 31 at the Walt Disney World Dolphin Hotel in Lake Buena Vista, FL.

With the theme of “Securing Dairy’s Future,” the meeting offers attendees several days of informative programming, in addition to opportunities to interact and network with dairy producers and industry leaders from across the country. Dairy producers, cooperative staff, Young Cooperators (YCs), industry suppliers, trade press, and others from within the dairy sector are all invited to attend.

Individual and group meeting registration, along with hotel reservations, can be made online at www.dairyevents.com. Although online registration is preferred, a registration form may also be filled out and submitted via mail or fax. Online, mail, and fax registration must be submitted with payment by Friday, October 5. Visit www.nmpf.org/nmpf-joint-annual-meeting for more information.

 

In recognition of his dedication to environmental stewardship on his dairy farming operations, NMPF’s 2010 Young Cooperator (YC) Chairman Marty Burken was selected last month as a recipient of the 1st annual Iowa Farm Environmental Leader Awards. The awards were sponsored by the Iowa Governor’s Office, Iowa Department of Agriculture & Land Stewardship, Iowa Department of Natural Resources, and Monsanto. Burken was chosen because of the steps he has taken and leadership he has demonstrated to help protect Iowa’s natural resources. The nomination was approved by a committee representing multiple commodity, conservation, and environmental groups.

The awards were presented at the Iowa State Fair on August 17th by Iowa Secretary of Agriculture Bill Northey, Iowa Governor Terry Branstad, and Iowa DNR Director Chuck Gipp.

In the photo: Burken receives his award from Gov. Terry Branstad. He is joined on stage by his youngest daughter Hillary and his father Loran Burken.

 

 

 

The U.S. cheese business is built on a heritage dating back hundreds of years, since the time when immigrants, mostly from Europe, brought their food preferences with them from the Old World to the New. Unfortunately, the Europeans now want to ignore that global migration, and reclaim some products’ names just for themselves.

For the past several years, trade negotiators with the European Union (EU) have been making greater inroads in restricting the use of the names and translations – in trade parlance, the Geographic Indications (GIs) – for some foods and beverages made in certain parts of the world. Champagne from France is an obvious example. But so are cheeses such as Feta from Greece, Gorgonzola from Italy, and others. The EU asserts that if the principle of Geographic Indications is applied to these cheeses, any similar food products made elsewhere, from Argentina to the U.S., are not just pale imitators, but in violation of international trade laws.

While clawing back these names of common and popular consumer products may seem like a far-fetched goal, the EU has already had success in restricting the use of several key GIs in a free trade agreement it reached with South Korea. For instance, any cheeses labeled as Asiago, Feta, Fontina, and Gorgonzola now sold in Korea can only come from Europe. And even though the U.S. just signed its own free trade deal with South Korea, we’re now subject to the cheese GI restrictions written into the deal between the EU and Korea.

The stakes for this battle are big and growing. More than $20 billion in U.S. cheese production utilizes European-origin names. Last year, almost $1 billion in U.S. cheeses were exported; many of these could be harmed by the EU’s aggressive attempt to confiscate common names.

In order to fight this trend, NMPF earlier this year joined with the U.S. Dairy Export Council and other domestic and international organizations to form the Consortium for Common Food Names (CCFN). The CCFN is devoted to informing consumer groups, farmer associations, manufacturers, trade and intellectual property officials of the damage that will be caused in their own countries if efforts to restrict the use of common food names go unchecked. CCFN provides an internationally-organized counterbalance to the EU’s overly-aggressive approach to restricting product names. Its website, www.commonfoodnames.com, provides information to companies interested in joining this important effort, as well as to policy makers around the world.

While focused on more than just dairy foods, the Consortium for Common Food Names is reaching to all manufacturers of cheeses and milk producers to encourage them to challenge the EU’s attempt to produce more free trade deals like the one between Europe and South Korea. While the World Trade Organization talks are in suspended animation, other broad, multi-party talks are moving forward, where a discussion of limiting the use of GIs may be on the table. The EU has concluded free-trade agreement talks with South Korea, Colombia, Peru, and Central America in the past few years. Negotiations with India, Brazil, Singapore, Malaysia and more than 30 other countries are ongoing. And once a precedent is set among these countries to restrict GIs, the limitations could be very damaging to future commerce, even if the U.S. isn’t a party to the agreement.

Moreover, the biggest prize of all – the U.S. market – is one the EU is keenly eyeing as it insists on imposing its views on GIs on the U.S. With a potential U.S.-EU trade deal currently under consideration, the U.S. cheese sector faces a very real threat if negotiators write any GI restrictions into a resulting agreement.

A reasonable path exists to protect location-specific GIs, say, for Parmigiano Reggiano, as opposed to the much more generic Parmesan. The U.S. has some interest in using GIs of its own, but a clear and limited scope of protection is what is needed, not a blanket restriction. It doesn’t help that Europe has been incredibly arbitrary in fighting for some GIs, such as Asiago, but not others, such as “Cheddar.”

As global trade barriers gradually come down, bit by bit and country by country, groups like NMPF and the CCFN have to ensure that new barriers in different forms – or in different names – don’t rise to take their place. The U.S. versions of Feta and Gorgonzola should be able to compete with versions made elsewhere. Consumers around the world will be the ultimate judges as to which are best.

 

Website, events in Iowa, D.C., highlight effort to provide American farmers with security

ARLINGTON, VA – The National Milk Producers Federation (NMPF) has joined forces with nearly 40 other farm and ranch organizations to raise public awareness of the need for Congress to pass a new, comprehensive, five-year farm bill before current farm programs expire in September.

The coalition, called Farm Bill Now, comprises associations and coalitions representing commodity crops, livestock, specialty and minor crops, energy and biobased product groups, farm cooperatives and financial groups, as well as the nation’s two largest farm groups, the American Farm Bureau Federation and the National Farmers Union.

“National Milk stands united with these other groups – each of which has strong and distinct policy priorities – yet all of whom are committed to passing a new, comprehensive bill this year,” said Jerry Kozak, President and CEO of NMPF. “Dairy farmers have been working for three years on developing a new and better safety net, and we need a new farm bill to bring that effort to fruition.”

In addition to Wednesday’s launch of the coalition, Farm Bill Now is launching an interactive web portal at www.FarmBillNow.com, through which visitors can connect to their members of Congress and show their support for a new five-year farm bill. Using messages to Congress via social media, event locations and times, and an online petition, FarmBillNow.com gives both farmers and consumers the resources they need to make their voices heard, telling Congress that the farm bill needs to be completed before the current farm food law expires in September.

Kozak said that the coalition effort will call attention to the fact that the farm bill is important to more Americans than just those working in agriculture.

“Calling the farm bill the ‘farm bill’ suggests its impact is limited only to farms and to the rural areas to which they are so closely tied. It’s really a jobs bill, a food bill, a conservation bill, a research bill, an energy bill, and a trade bill. In other words, it’s a bill that affects every American,” he said.

“The farm bill has a broad impact on our citizens and our economy. It provides healthy foods to millions of schoolchildren and nutritious options to families in need. It develops and expands trade with valuable foreign markets. By reducing spending significantly compared to prior farm bills, the proposals pending right now in Congress address the need to get our nation’s fiscal house in order,” Kozak said.

In the coming weeks, Farm Bill Now will hold events in Iowa, and on Capitol Hill, to underscore this message. On Tuesday afternoon, August 28, farmers representing multiple groups within the coalition will discuss the Farm Bill Now effort at the annual Farm Progress Show in Boone, Iowa, the nation’s largest outdoor farm show.

On Wednesday morning, September 12, the groups will gather on the grounds of the U.S. Capitol alongside members from the Senate and the U.S. House of Representatives, as well as leaders from other major farm and commodity groups, rural development, livestock, conservation, hunger, consumer and energy organizations to encourage Congress to pass the bill before programs expire at the end of the month.

Farm Bill Now is a coalition of 39 agricultural groups, each with strong and varied policy priorities, yet all committed to passing a farm bill this year. Learn more at www.FarmBillNow.com.

25x’25 Alliance
Agricultural Retailers Association
American Beekeepers Federation
American Farm Bureau Federation
American Feed Industry Association
American Pulse Association
American Seed Trade Association
American Sheep Industry Association
American Soybean Association
American Sugar Alliance
Biobased Products Coalition
Council of State Governments East
Council of State Governments Midwest
Farm Credit Council
National Association of Wheat Growers
National Barley Growers Association
National Cattlemen’s Beef Association
National Corn Growers Association
National Cotton Council
National Council of Farmer Cooperatives
National Farmers Union
National Milk Producers Federation
National Potato Council
National Sorghum Producers
National Sunflower Association
Northharvest Bean Growers Association
Northeast State Association for Agricultural Stewardship
Produce Marketing Association
Southern Peanut Farmers Federation
Specialty Crop Farm Bill Alliance
State Agriculture and Rural Leaders
United Dairymen of Arizona
United Fresh Produce Association
U.S. Canola Association
U.S. Dry Bean Council
USA Dry Pea and Lentil Council
USA Rice Federation
Western Growers Association
Western Peanut Growers Association

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 30 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.

After serving at NMPF for three months, staff member John Hollay has been promoted to the position of Senior Director, Government Relations. Hollay has done an outstanding job in the time he has been with NMPF, and the organization has benefited from his legislative experience and political acumen. He has been instrumental in successfully positioning the Dairy Security Act in both the Senate and the House.

With less than three months to go, staff members have been working on plans for the 2012 annual meeting that NMPF jointly hosts with the National Dairy Promotion and Research Board and the United Dairy Industry Association. This year’s meeting will be held October 29 – 31 at the Walt Disney World Dolphin Hotel in Lake Buena Vista, FL.

Centering on the theme “Securing Dairy’s Future,” attendees will arrive for a few days of speeches, reports, banquets, general sessions, town hall meetings, and award ceremonies. Dairy producers, cooperatives, Young Cooperators (YCs), industry representatives, staff, and others from within the dairy sector are all invited to attend. Guest speakers will include AgriTalk host Mike Adams, sports commentator Dick Vitale, political pundit Stu Rothenberg, and entertainer Laura Bell Bundy.

Information will be posted online at www.nmpf.org/nmpf-joint-annual-meeting as it becomes available.

The battle over the Farm Bill shifts this month from Washington, DC, to the hundreds of congressional districts across America, to which members of Congress have returned for their August recess. NMPF has issued a call to action to its members, urging dairy farmers and their cooperatives to voice strong support for the passage of a new farm bill while their elected representatives are back home.

Last week, the House tried and failed to pass a one-year extension of the current farm bill that would have offered no value to dairy farmers. Because NMPF and most other farm groups opposed this approach, the House leadership pulled the bill, and instead passed a $300 million drought assistance bill that also offers little real support to dairy farmers. NMPF sent a letter to Congress expressing its disappointment that the House failed to act on a new Farm Bill.

The current farm bill expires at the end of September, and once the House and Senate return to Capitol Hill on Sept. 10th, there are fewer than 10 legislative days for them to act on farm policy before that deadline. The most likely current scenario is that farm policy will have to wait until an anticipated lame duck session of Congress is held after the November elections. In order to bring the Dairy Security Act to completion, members of both the House and Senate need to hear that getting a new bill is a priority to dairy farmers.

Through the end of July, Cooperatives Working Together (CWT) has assisted member cooperatives in making 436 sales of cheese and butter to 33 countries on five continents.

Sales of Cheddar, Monterey Jack, and Gouda cheeses accounted for 302 sales totaling 71.5 million pounds, while the 134 sales of butter totaled 55.3 million pounds. This compares to 2011, when CWT assisted with 184 sales for the first seven months of the year, totaling 56.6 million pounds.

The milk equivalent on a milk fat basis of CWT’s 2012-assisted sales is 1.87 billion pounds, or the same as the annual production of 88,800 dairy cows. This accounts for half of the increase in milk production through the first six months in 2012.