Dairy Group Pushes for Guest Worker Program, Opposes Enforcement-Only Approach

ARLINGTON, VA – In written testimony provided today to the Senate Judiciary Committee, the National Milk Producers Federation (NMPF) said that current labor and immigration policies put the U.S. dairy farm sector at a disadvantage, and that a change in laws is necessary in order to address the realities of dairy production in America.

In testimony presented to the Senate Judiciary Subcommittee on Immigration, which held a hearing Tuesday on the agricultural labor crisis, NMPF wrote that there remains a persistent shortage of native-born workers interested in employment on dairy farms, which is why farmers cannot find enough American workers to milk cows and perform other critical job functions on dairies.

“Even in this time of high unemployment, our dairy farmers universally report an inability to find enough American workers…even if they offer better pay than other jobs,” said Jerry Kozak, President and CEO of NMPF. “Sufficient numbers of local workers are simply not available or not interested in working on dairy farms.”

The challenge of hiring workers in 2011 is no different than in 2008, when NMPF conducted a survey to quantify the workforce hiring practices of dairy farms. That survey found that U.S. dairies employed 138,000 full-time equivalent workers, of which an estimated 57,000, or 41%, were foreigners.

Some other sectors in agriculture facing the same problem may be able to use the H-2A visa program to hire seasonal immigrant workers despite the significant flaws in the program, but the dairy sector cannot, a situation that is “fundamentally unfair. America’s dairy farmers need and deserve to have the access to legal foreign workers as other sectors of the agricultural industry,” Kozak said.

Most current proposals to provide agriculture with a labor fix are designed to address the seasonal hiring needs of other portions of agriculture, but not the labor needs of dairy farmers every day of the year, NMPF’s position is that the domestic dairy sector needs a year-round guest worker program.

Among other key criteria, such a program must feature no seasonality requirement, as does the H-2A program currently, along with most agricultural labor proposals in Congress; allow immigrants to work for at least three years; and make the process of applying for work simpler and quicker, NMPF said.

NMPF’s testimony also highlighted concerns the organization has with an enforcement-only approach to immigration policy, such as shifting to the mandatory use of the E-Verify database system for verifying the immigration status of prospective workers.

“If Congress is going to enact a nationwide E-Verify requirement, then it also needs to provide agriculture with a workable guestworker program to meet our future needs and a means to allow those who are currently working in undocumented status to be eligible for that guestworker program.”

“A failure to do so risks severely damaging the economic vitality of the nation’s entire agriculture sector,” NMPF wrote.

The National Milk Producers Federation, 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 31 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 40,000 dairy producers on Capitol Hill and with government agencies.

The National Milk Producers Federation (NMPF) is working to build support for H.R. 3062, the Dairy Security Act of 2011, which was formally introduced in the House of Representatives last month. The bill closely follows the concepts of NMPF’s Foundation for the Future proposal to reform and improve federal dairy policy, but contains several improvements compared to the original concept, changes that were endorsed last month by NMPF.

These changes include making voluntary the Dairy Market Stabilization Program (DMSP), which will help reduce milk output during times of low margins. While farmers will not be required to participate in efforts to stabilize markets, if they wish to enroll in the subsidized margin insurance program through the U.S. Department of Agriculture, they will automatically be enrolled in the DMSP so that they are promptly alerted when additional production may affect their overall margins.

The new legislation is also an improvement over the earlier version because it extends the Basic level of margin insurance coverage to 80 percent of a producer’s production history, up from 75 percent as initially proposed. The Supplemental margin coverage option is also improved, as it will now allow producers to purchase insurance for growth in their milk production history.

Other changes to the final version of the legislation include a refined provision in the Dairy Market Stabilization Program to ensure that it does not activate during times when signals for farmers to reduce production may impinge on the ability of the U.S. to export dairy products. Also, all of the money collected by USDA through the DMSP will go to dairy product purchases.

Lastly, the Dairy Security Act of 2011 simplifies the Federal Milk Marketing Order pricing system through a formal hearing process conducted by USDA. The proposal directs changes in the way milk used to manufacture cheese (Class III) is priced, from a complicated end-product formula, to a more market-oriented competitive pricing system.

The Congressional Budget Office has scored the legislative draft to assess its budget impact, and finds that the DSA will reduce federal spending by $167 million during the next five years, and $131 million during the next ten. That level of savings “represents one of the major benefits of this approach, since it will not only provide farmers better security, but also save the government money when the main topic of conversation in Washington is on reducing the deficit,” said Jerry Kozak, President and CEO of NMPF.

In the photo: Members of the House Agriculture Subcommittee on Livestock and Dairy expressed their misgivings with current dairy policies during a hearing in September. The Subcommittee is chaired by Rep. Tom Rooney (R-FL), seen at right, discussing policy options with NMPF President Jerry Kozak.

Last month, the House Judiciary committee approved the controversial E-Verify bill. Adopted along a party line vote, 22-13, Committee Chairman Lamar Smith’s bill would require all U.S. employers to use E-Verify, an online worker verification system that matches job applications with data from the Social Security Administration and the Department of Homeland Security.

Under the bill, agriculture employers would be given 36 months from the date of enactment to comply with its provisions. During the mark up of the bill, Representative Dan Lungren unsuccessfully offered an agriculture-specific amendment that would have issued 10 month visas for agriculture workers. As it stands, Smith still is considering an agriculture-specific workforce act, H.R. 2847, but has yet to move it out of Committee. While the full House of Representatives may soon vote on the E-Verify legislation, the bill is not expected to be considered by the Senate.

NMPF continues to reinforce that it will not support enforcement-only legislation. Without a viable answer for the future workforce of the agriculture industry, NMPF cannot endorse any legislation that will increase the burden of America’s farmers.

Toward that end, in written testimony provided today to the Senate Judiciary Committee, NMPF said that current labor and immigration policies put the U.S. dairy farm sector at a disadvantage, and that a change in laws is necessary in order to address the realities of dairy production in America.

In testimony presented to the Senate Judiciary Subcommittee on Immigration, which held a hearing on the agricultural labor crisis, NMPF wrote that there remains a persistent shortage of native-born workers interested in employment on dairy farms, which is why farmers cannot find enough American workers to milk cows and perform other critical job functions on dairies.

The full news release on the Senate hearing is available on the NMPF website.

Last month, America’s farmers and ranchers – in an effort to lead a conversation and answer those questions – kicked off The Food Dialogues, the launch of a new effort to bring together different viewpoints on farming and ranching and the future of food. The effort was sponsored by the U.S. Farmers and Ranchers Alliance, of which NMPF is a member.

Four panels across the country, including Washington, D.C.; New York City; Fair Oaks, Indiana; and Davis, California, featured leaders and voices across the food spectrum, addressing American’s stated concerns about how their food is grown and raised.

While the discussion started on Sept. 22, it’s just the beginning a long-term effort and will continue at the website www.fooddialogues.com. Those who want to see the entire discussion or share comments can go there to join the conversation.

NMPF’s 2010 Young Cooperator (YC) Chairman Marty Burken, a dairy producer with Swiss Valley Farms cooperative, has been named the National Progressive Dairy Producer for 2011 in the large herd division. The award was announced by the National Dairy Shrine, an organization of over 18,000 members that brings together dairy producers, scientists, students, educators, marketers, and others who share a desire to preserve dairy’s heritage and keep the dairy industry strong.

Burken’s award includes a $2,000 travel stipend to attend a conference or seminar to learn new techniques to improve his dairy business. He and his wife Lisa, along with their family, operate Blue Hyll Dairy LLC, a 774-cow dairy in Clinton, IA. Burken will be recognized for his achievement at the Dairy Shrine banquet at the World Dairy Expo in Madison, WI on Thursday, October 6.

Participants wishing to attend NMPF’s joint annual meeting with the National Dairy Promotion and Research Board (NDB) and the United Dairy Industry Association (UDIA) have until Monday, October 24 to register and make hotel reservations. Both may be done online by visiting www.dairyevents.com.

The meeting will be held November 14 – 16 at the Town and Country Resort & Convention Center in San Diego, CA and center around the theme “Navigating a New Course.” Dairy producers, cooperative staff, Young Cooperators (YCs), industry suppliers, trade press, and others from within the dairy sector are all invited to attend.

For complete information about the meeting, visit www.nmpf.org/nmpf-joint-annual-meeting.

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) applaud the submission to Congress by President Obama of the legislation to implement the three pending free trade agreements (FTAs) with South Korea, Panama and Colombia. The dairy industry is also supportive of the bipartisan compromise on the Trade Adjustment Assistance (TAA) legislation.

These FTAs have the potential to expand U.S. exports and create thousands of export-supporting jobs in the U.S. dairy industry, in particular. NMPF and USDEC “thank members of Congress for their diligent work in supporting the drafting of this legislation,” said Jerry Kozak, president and CEO of NMPF.

The U.S. dairy sector will see significant gains from each of the agreements, but particularly from the agreement with South Korea. “We are pleased that achieving these benefits is finally within sight,” said Kozak. “These agreements will not only expand export sales for such products as cheese, whey, skim milk powder, and other dairy products, they will also prevent our competitors from taking market shares that we currently have in those countries.”

Tom Suber, president of USDEC, agreed, pointing out that the industry estimates that as many as 10,000 additional U.S. jobs, both on and off the farm could be created by the Korea agreement alone. “The growth in exports of dairy products from these agreements will not only help bolster milk prices for America’s dairy farms, it will also expand jobs in the dairy processing and transportation sectors,” he said. “The FTAs represent a big win-win for all elements of the U.S. dairy industry.”

The dairy organizations noted that the export benefit from the Korea FTA to the U.S. dairy industry in the first few years after implementation will be approximately $380 million per year, on average, and the gains from the Colombia and Panama FTAs will add another $50 million annually. NMPF and USDEC highlighted the growing importance of export sales to dairy producers’ bottom lines and the need to continue to open and develop new markets regardless of their size. In international trade, “unless we continue to move forward, we risk falling behind our competitors,” Suber said.

“We urge members of Congress to approve the implementing bills for all three FTAs, and support the economy of thousands of America’s dairy farmers,” said Kozak. “Our producers are pleased that after four years, a breakthrough has been achieved, and Congress will finally have an opportunity to act on the FTAs. Now, we just need a “yes” vote.”

The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the export trade interest of U.S. milk producers, proprietary processors, dairy cooperatives, and export traders. Its mission is to enhance international demand for U.S. dairy products and assist the industry to increase the volume and value of exports. USDEC accomplishes this through market development programs that build overseas demand for U.S. dairy products, resolving market access barriers and advancing the industry’s trade policy goals. USDEC activities are supported by staff in Mexico, Japan, South Korea, China, Taiwan, Hong Kong, Southeast Asia, South America, Middle East and Europe. Website: www.usdec.org.

The National Milk Producers Federation, 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 31 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 40,000 dairy producers on Capitol Hill and with government agencies.

 

In the development of any new concept or product, there comes a time when the pursuit of perfection ultimately shifts toward the exploration of what’s possible. We’ve now reached that point in the development of new federal dairy policy.

From the summer of 2009 – when the brutality of the Great Dairy Depression first manifested itself – to this past summer, NMPF solicited and then synthesized a variety of viewpoints in the development of a radical reassessment of the best safety net for dairy farmers. We called it Foundation for the Future, and a great deal of spadework was done by a full cross-section of the dairy industry in providing unique, and sometimes opposing, perspectives on how best to form that foundation.

We took the resulting product this summer and road-tested it. At 13 meetings in 12 towns across the country, we walked through the detailed elements of Foundation for the Future in front of 1,300 dairy producers, and others involved in our business. It’s fair to say that no other dairy program has received the same degree of scrutiny or self- assessment, either within the industry, or by Congress. Even the safety net policy we have today, featuring the MILC and the price support programs, hasn’t received nearly the thorough examination that Foundation for the Future was subject to this year.

What we heard during our summer grassroots tour was a uniform agreement that the status quo is not acceptable, because it didn’t prevent the loss of billions of dollars in equity two years ago, and it leaves farmers equally vulnerable when the next market downturn arrives. Most farmers clearly see the value in a margin-based safety net, since our current price-centered programs were designed in the 20th century, for milk price targets that are no longer relevant in the new era of much higher feed costs. Thus, a margin insurance program was well received.

Many producers also see the value in having a means of managing the market during periods of low margins, in order to hasten a recovery. The current approach where individual farms make decisions to keep putting out more milk when margins are bad, even if the collective impact of those specific choices is bad for every farmer, is less than desirable. Hence, Foundation for the Future initially contained a mandatory Market Stabilization program to put the brakes on milk output when dire conditions imperil every farm’s bottom line.

But a compulsory approach to stabilizing the market in such a fashion proved to be a daunting goal. In essence, it was the potentially perfect solution that, for a variety of reasons, was not going to be politically possible to achieve.

So now, we’ve engaged in a course correction. No longer is the Dairy Market Stabilization Program going to be mandatory. In fact, the approach we have endorsed, which is now embodied in the new “Dairy Security Act of 2011,” introduced last week in the House of Representatives, offers farmers a clear choice.

Those who wish to have government-subsidized margin insurance, at both a basic and supplemental level, can opt for that safety net…but they must also then agree to participate in the market stabilization program, so they are expected be part of the solution when the problem of poor margins appears. On the other hand, those who for whatever reason don’t want the government to tell them what to produce will not be asked to help stabilize the market…but they don’t receive any help from the government if and when market conditions are poor.

The beauty of this approach is that it preserves a safety net for those who want it, and yet it also offers others a complete free-market approach. And just as the federal government is being forced to cut back spending and entitlements in other areas, there is no more free lunch with this new dairy program: there is no free government money without a corresponding obligation to help the greater good of the industry. We are past the point as a country where people can expect something for nothing from Uncle Sam.

In addition to the safety net components, the Dairy Security Act requires the U.S. Department of Agriculture to reform the way the Class III price is determined, doing away with end product pricing formulas and make allowances, and going to a competitive pay price.

Is this pivot toward a compromise approach a perfect solution? Of course not, and there will remain those who either feel it does too much, or doesn’t go far enough. But it’s a sound foundation, economically and politically. Compared to current program, the DSA saves taxpayers $131 million over ten years, which is good politics and good policy. Beyond being a necessary course correction, it’s the correct course for America’s dairy producers.

Key Farm Programs Among First To End

ARLINGTON, VA – Dairy farmers have lost a safety net because the 2008 farm bill expired Sunday and Congress has yet to pass a new Farm Bill, according to the National Milk Producers Federation (NMPF), which said today that farmers need to continue to voice their dissatisfaction with the lack of action in Washington on farm policy.

Members of the House left Washington last month without completing work on the 2012 Farm Bill. Although Congress is expected to return to Capitol Hill after the November elections, the status of many farm and food programs is in limbo until then, along with the rest of the pending farm bill that contains a new and better safety net for dairy farmers.

“Dairy is among the first sectors in agriculture to feel the impact of Congress’s inability to reach accord on most anything, including a new Farm Bill,” said Jerry Kozak, President and CEO of NMPF. “Had the House leadership brought the bipartisan farm bill to the floor, I believe we could have passed a bill containing the Dairy Security Act. Instead, we are in uncharted waters, and one of our life rafts has disappeared.”

Dairy farmers continue to suffer from high feed costs, and the other program intended to serve as a safety net – the dairy product price support program – was created years before feed costs started to escalate, Kozak said.

That’s why NMPF has been urging Congress to pass the Dairy Security Act, which instead of focusing simply on milk prices, takes into account the margin between farm-level milk prices and feed costs.

“We strongly encourage our dairy farmer members to visit with their members of Congress during the pre-election recess to determine a path forward for the 2012 Farm Bill soon after the elections,” Kozak said. “We need a full, five-year bill to be passed in the House, sent to a conference committee, and approved before the end of the year.”

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.

House Bill Embodies Improved Version of Foundation for the Future Package

ARLINGTON, VA – The National Milk Producers Federation (NMPF) is giving its full support for a new bill introduced today in the House of Representatives that would make broad improvements in dairy policy.

The bipartisan “Dairy Security Act of 2011” was formally introduced today by the House Agriculture Committee’s Ranking Member Collin Peterson (D-MN), along with senior House Republican Mike Simpson (R-ID). The bill is modeled on the dairy reforms developed and promoted by NMPF, and would revamp and improve the farm-level safety net for dairy producers.

“It’s been a long journey of reforming dairy policy following the difficult days of 2009, when America’s dairy producers lost billions of dollars in equity, but the introduction of the Dairy Security Act is a huge step towards ending an ineffective program, and replacing it with something much better,” said Jerry Kozak, President and CEO of NMPF.

“We are thankful for Congressman Peterson’s diligent attention this issue, as well as his commitment to real reform, and we look forward to working with him and Congressman Simpson to get this bill passed,” Kozak added. The bill reflects the changes endorsed this week by NMPF to its initial “Foundation for the Future” proposal to reform dairy policy.

The Dairy Security Act (DSA) bill is somewhat different from the legislative discussion draft introduced by Peterson this summer, in that it now makes voluntary the Dairy Market Stabilization Program (DMSP), which will help reduce milk output during times of low margins. However, if dairy producers wish to elect to enroll in the subsidized margin insurance program through the U.S. Department of Agriculture, they will automatically be enrolled in the Dairy Market Stabilization Program so that they are promptly alerted when additional production may affect their overall margins.

The new legislation is also an improvement over the earlier version, according to NMPF, because extends the Basic level of margin insurance coverage to 80 percent of a producer’s production history, from 75 percent as initially proposed. The Supplemental margin coverage option is also improved, as it will now allow producers to purchase insurance for growth in their milk production history.

Other changes to the final version of the legislation include a refined provision in the Dairy Market Stabilization Program to ensure that it does not activate during times when signals for farmers to reduce production may impinge on the ability of the U.S. to export dairy products.

Lastly, the Dairy Security Act of 2011 simplifies the Federal Milk Marketing Order pricing system through a formal hearing process conducted by USDA. The proposal directs changes in the way milk used to manufacture cheese (Class III) is priced, from a complicated end-product formula, to a more market-oriented competitive pricing system.

The Congressional Budget Office has evaluated, or scored, the legislative draft to assess its budget impact, and finds that the DSA will reduce federal spending by $167 million during the next five years, and $131 million during the next ten. That level of savings “represents one of the major benefits of this approach, since it will not only provide farmers better security, but also save the government money when the main topic of conversation in Washington is on reducing the deficit,” Kozak said.

The National Milk Producers Federation, 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 31 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 40,000 dairy producers on Capitol Hill and with government agencies.

New Version Would Give Farmers Choice of Opting for Government Safety Net

ARLINGTON, VA – The National Milk Producers Federation’s Board of Directors voted today in favor of a revised approach to reforming federal dairy policy, with the key change of allowing farmers an individual choice between receiving the financial protection of a government safety net, or opting out of such protection.

As originally proposed back in 2010, NMPF’s Foundation for the Future (FFTF) program contained a government-subsidized safety net, the Dairy Producer Margin Protection Program, to protect against periods of low milk prices, high feed costs, or a combination of the two. This program offered a Basic level of subsidized insurance coverage, plus the option of Supplemental fixed-cost coverage partially paid by farmers. The FFTF program also contained the Dairy Market Stabilization Program, which was a mandatory means to reduce market volatility by discouraging new milk production during periods of compressed margins.

Under the revised approach backed today by NMPF, the Dairy Producer Margin Protection Program (DPMPP) would continue to be voluntary, but if a producer opts to participate in the DPMPP, his/her participation in the Dairy Market Stabilization Program (DMSP) would then be mandatory. If a producer chooses not to participate in the insurance program, then participation in the DMSP would not be required. As with NMPF’s original reform package, the Milk Income Loss Contract program would be eliminated, as would the Dairy Product Price Support Program.

The NMPF Board believes that the new approach will result in beneficial changes to the legislative version of Foundation for the Future, which is expected to soon be formally introduced in the House of Representatives by Reps. Collin Peterson (D-MN) and Mike Simpson (R-ID).

“Based on the feedback we received this summer from our cooperative membership, and during our grassroots tour, when 1,300 farmers came to 12 cities to talk with us about Foundation for the Future, we decided that a slightly different approach to reforming dairy policy was the best way to go,” said Randy Mooney, NMPF Chairman, and a dairy farmer from Rogersville, MO. “Clearly, a number of farmers are uncomfortable about having a mandatory government program to manage milk production. So we are endorsing a new approach which gives farmers a clear choice.”

“This new approach of making the Market Stabilization program optional will appeal to those who philosophically do not want government telling them what to produce. At the same time, those who want the benefits of a government safety net must accept some government-led market stabilization as the price of that protection,” Mooney said.

The other changes endorsed today by NMPF include:

• Increasing the Basic Plan’s coverage to 80% of a producer’s production history on margins between $0.00 and $ 4.00 per cwt. In the legislative draft of FFTF released earlier this summer, the Basic coverage was limited to 75% of a farm’s production history.
• Giving farmers the option of acquiring coverage for their production growth under the Supplemental Plan. Under such an option, the production history would be revised annually as the producer’s production grows. The percentage of the producer’s production history to be covered, and the premium rate per cwt., would remain fixed over the life of the Farm Bill.
• Accepting an administrative fee to be charged to all producers signing up for margin protection coverage under the DPMPP, with modest fees on a sliding scale. This will help keep the cost of the program to a minimum.
• Eliminating the distribution of 50% of producer-generated funds to the U.S. Treasury under the Dairy Market Stabilization program, ensuring that all of the monies generated by producer withholdings would be available to purchase dairy products for donation to non-commercial food assistance programs as originally proposed.

Lastly, the revised FFTF package endorsed by NMPF alters how reforms to the Federal Milk Marketing Order system would be pursued. Under NMPF’s original approach, the legislation would have specifically prescribed how competitive prices and a streamlining of the classified pricing system were to be implemented by the USDA, without a hearing process. The new version directs the USDA to eliminate the cumbersome end product price formulas and make allowances for Class III, and use a competitive pay price instead to determine the Class III price. It also specifies that after USDA makes its decision, a majority vote by producers will put the changes into effect. If the changes are not approved, the current Federal Order provisions remain in place.

“The underlying objectives we have been pursuing for the past two years – offering a better dairy program featuring protection, stability, and growth – remain intact in what our Board has endorsed today,” according to NMPF President and CEO Jerry Kozak. “But by making some adjustments, we strongly believe that many of the concerns raised in the past year to our first approach now have been addressed and eliminated.”

Kozak went on to point out that NMPF’s Foundation for the Future proposal, along with the initial legislative discussion draft released this summer by Rep. Peterson and cosponsored by Rep. Simpson, allowed the dairy industry and Congress “to kick the tires and really scrutinize the best way to reform dairy policy. We’ve listened, we’ve analyzed and considered options, and now we’re endorsing a course correction that will still take us to the same place, only with greater unanimity and support from dairy farmers, and hopefully from others across the industry and on Capitol Hill.”

Mooney added that “it’s time everyone in the dairy industry recognizes that the Peterson-Simpson bill offers the best – and perhaps only – opportunity to create an effective safety net that allows us to take advantage of the challenges and opportunities of a global marketplace.”

The National Milk Producers Federation, 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 31 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 40,000 dairy producers on Capitol Hill and with government agencies.