During the past month, NMPF has continued to advocate for the advancement of the three pending Free Trade Agreements (FTAs) with South Korea, Colombia, and Panama. However, it doesn’t appear Congress will take final votes prior to the upcoming August recess.

In the month of July, both the U.S. House of Representatives and the U.S. Senate passed different versions of the FTAs. The Senate Finance committee approved a bill that included the Trade Adjustment Assistance (TAA), while the House Ways and Means Committee approved the FTAs on their own with a plan to move the TAA in parallel fashion through the House. There is still some concern on whether the House and Senate will be able to come to an agreement on the FTAs. However, several Republican Senators, including Sens. Roy Blunt (R-MO) and Rob Portman (R-OR), have secured several other Republican Senators who are committed to vote for the current FTA agreements including the TAA.

At its June meeting, the NMPF Scholarship Committee selected four graduate students to receive scholarships as part of the 2011 NMPF National Dairy Leadership Scholarship Program.

These students are all conducting research in areas that will benefit dairy cooperatives and producers.

The 2011 Hintz Memorial Scholarship, given to the top scholarship candidate, was awarded to João Paulo Nascimento Martins (in the photo), a Ph.D. candidate in Animal Science at the Michigan State University. His research project is “The effect of enhanced luteinizing hormone pulses during ovulatory follicle development on oocyte competency and subsequent pregnancy losses in dairy cattle.”

Other scholarship winners included:

• Daniel Garrido, a Ph.D. candidate in Food Science at the University of California-Davis, with his research project, “Molecular validation of the prebiotic properties of casein glycomacropeptides.”
• Amanda Sterrett, a M.S. candidate in Animal Science at the University of Kentucky, with her research project, “Characterization of relationships between lying behavior, rumination behavior, and core body temperature using novel precision dairy farming techniques.”
• Laura Bradner, a M.S. candidate in Biochemistry at the Iowa State University, with her research project, “Optimization of methods for the detection of Mycobacterium avium subsp. paratuberculosis in milk and colostrum of naturally infected dairy cows.”

The Scholarship Committee was impressed with the quality of applications and thanked all of the students who applied for the 2011 program. All eligible students are encouraged to apply next year.

If you have any questions about the NMPF scholarship program, please call the NMPF office at 703-243-6111, or email Beth Briczinski.

Although it’s still more than three months way, staff members have been working on plans for the 2011 annual meeting that NMPF shares with the National Dairy Promotion and Research Board and the United Dairy Industry Association. This year’s meeting will be held November 14 – 16 at the Town and Country Resort & Convention Center in San Diego, CA.

Centering on the theme “Navigating a New Course,” 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.

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

July was a very challenging month in Congress, where partisan battling over government spending was the only game in town. The federal debt ceiling and budget reduction debate continued until the final hours, almost literally. But the House of Representative finally passed a package of spending cuts yesterday, hours before the August 2nd deadline for increasing the debt threshold. The Senate is expected to vote today, Tuesday, on the House-passed version and send it to the White House for President Obama’s signature.

The bill includes nearly $1 trillion in deficit reduction, while allowing the President the authority to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013. A bipartisan committee must accept or identify an additional $1.5 trillion in deficit reduction by November 23, 2011. These cuts may include entitlement program reductions, and also tax reforms.

The plan would result in $21 billion in cuts in its first year. Time and again, members of Congress have called for cuts to agricultural programs. The best-case scenario appears to be $11 billion in agriculture spending cuts over the next 10 years. This will require real and significant farm policy reform that will impact direct payments and conservation programs.

NMPF’s dairy policy reform, Foundation for the Future, was written in order to provide a better safety net to dairy producers while staying within the current budget baseline, with likely savings of more than 10% over 10 years.

In response to concerns that the use of E-Verify may soon become mandatory across the country, the National Milk Producers Federation, along with several other agricultural interest groups, sent a letter to the House leadership seeking inclusion of a “workable, efficient worker program that encompasses all of U.S. agriculture.” This came as a response to a bill offered by Congressman Lamar Smith (R-TX) that would impose mandatory E-Verify for all businesses in the United States, but would also pre-empt all state bills that have instituted similar and harsher legislation.

The letter makes the argument that in order to continue food production, the agricultural industry needs an opportunity to secure a suitable workforce. While no date has been scheduled for the House to start marking up H.R.2164, Smith’s Legal Workforce Act, NMPF and the agricultural community will continue to advocate for positive changes to be made so that the agricultural industry can continue to function in an efficient and productive manner.

 

Nearly 50 Percent of Milk Supply Now Under FARM Umbrella

ARLINGTON, VA – Today’s consumers want to know that the food they purchase is safe, wholesome, nutritious, and produced with integrity. U.S. milk producers are demonstrating that commitment by enrolling at a rapid pace in the National Dairy FARM Program: Farmers Assuring Responsible Management (FARM). In fact, since enrollment began in September 2010, 45 percent of the nation’s milk supply now comes from farmers, cooperatives, and proprietary processors implementing the FARM program.

Voluntary and open to all producers, FARM is a national dairy animal care, third-party verified program designed to demonstrate dairy farmers’ commitment to outstanding animal care and a quality milk supply. Independent dairy producers, proprietary processors, and cooperatives are quickly coming on board.

“Telling this story is essential at a time when consumers want to know how their food is produced,” said John Miles, Land O’Lakes FARM implementation leader. “The FARM program helps us reach out to customers, consumers, and the entire marketing chain. It sends a strong message that Land O’Lakes member producers work hard caring for their animals and producing quality milk.”

FARM was created by the National Milk Producers Federation (NMPF), along with support from Dairy Management, Inc. FARM provides thorough animal care education for producers, on-farm evaluations, and objective third-party verification, giving customers and consumers the assurances they deserve.

“Dairy farmers are passionate about the care they provide to their animals and have an excellent track record of responsible management practices,” said Jamie Jonker, Vice President of Scientific and Regulatory Affairs at NMPF. “This program quantifies that passion and allows them to speak with one voice as they market nationally and internationally. The pace of participation has surpassed our expectations.”

Developed in partnership with producers, veterinarians, and animal care experts, FARM is a comprehensive program that incorporates the latest innovations in animal care from birth to marketing.

Participating producers are provided comprehensive training materials and undergo an on-farm evaluation conducted by a trained veterinarian, extension educator, co-op field staff member, or other FARM-trained professional. Evaluators then provide a status report and, if necessary, recommendations for improvement.

To protect the integrity and credibility of the program, a certain number of participating dairy farms will be randomly selected for objective third-party verification. Validus, an Iowa-based certified auditing company with more than 10 years of experience verifying on-farm animal care, has been selected to conduct all third-party evaluations and will begin that process this summer.

In addition to Land O’Lakes, participating cooperatives and proprietary producers include Agri-Mark, Inc., Hilmar Cheese Company, Foremost Farms USA, and Maryland and Virginia Milk Producers (MDVA) Cooperative.

“In today’s society we have to prove that animal care is important to all dairy farmers in a manner that our neighbors and customers can understand and respect. The best solution is FARM,” said Kevin Satterwhite, a dairy farmer and MDVA member from Newberry, S.C., who is an active participant in the FARM program.

A complete list of participants and all training materials in both English and Spanish can be found at www.nationaldairyfarm.com.

Dairy Management Inc., based in Rosemont, IL, is the domestic and international planning and management organization that builds demand for dairy products on behalf of America’s 60,000-plus dairy producers. DMI works with state and regional dairy promotion organizations to integrate marketing, promotion, advertising, public relations, nutrition education, and nutrition, product and technology research programs. www.dairycheckoff.com

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.

From Jerry Kozak, President and CEO of the National Milk Producers Federation

“While everyone is entitled to their own opinions about the best approach to reforming dairy policy, no one should be allowed to misrepresent the facts or make unfounded assertions. There are several misleading claims that were made in Wednesday’s statement from IDFA President and CEO Connie Tipton regarding the release of a legislative draft by Rep. Collin Peterson (D-MN).

These include:

• The U.S.’s ability to export dairy products will be severely hindered or jeopardized.

FACT: Dairy farmers have invested millions of dollars in building and fostering an export capability, through the creation and continued funding of both the U.S. Dairy Export Council, and the Cooperatives Working Together program. We are fully aware that foreign sales of U.S.-made dairy products are crucial to the current and future health of our industry, and don’t want policies that would detrimentally affect our export capabilities.

In fact, we believe export opportunities will be enhanced with the elimination of the Dairy Product Price Support program, which is contained in this proposal. Currently, the price support program acts as a government-funded buyer of last resort for a limited list of commodities, including cheddar cheese, butter and nonfat dry milk powder. Unfortunately, this program also acts as a disincentive to exports. Once this program is eliminated, markets during periods of surplus will clear more quickly. Product manufacturers will no longer have the incentive to make dairy foods intended only for the government, and every incentive to sell those products on the world market. The price support program has hindered our ability to fully develop and capitalize on foreign markets, as was the case in 2009, when U.S. dairy exports dropped and government price support purchases surged. Foundation for the Future (FFTF) changes this for the better.

• U.S. farm-level prices could become distorted and out of alignment with world prices.

FACT: While the triggers contained in the Dairy Market Stabilization Program (DMSP) are tied to margins, not price, the FFTF program was designed to account for the possibility that periodic discrepancies could occur where the U.S. farm-level milk price is above the world price, creating an imbalance that could incentivize more imports, and/or hinder exports.

That’s why this proposal contains an explicit clause that prevents the DMSP from kicking in if U.S. prices are 20% or more above world prices for cheddar cheese and skim milk powder. This clause will ensure that any market stabilizing slowdowns in milk production don’t unintentionally distort the relationship between U.S. and world prices.

• The program contains new taxes on farmers.

FACT: Any revenue collected from the DMSP will help ensure two things: one, that commercial products are purchased and used for feeding programs that benefit needy consumers; and second, that the costs of this overall package are mitigated through the DMSP revenue collection. The money collected is not a tax on consumers; it’s a user fee paid by farmers which will, only as needed, be used to help stimulate demand, and help defray the overall costs of the Foundation for the Future program. Similar fees are already collected from farmers to pay for the operation of the Federal Milk Marketing Order system.

Dairy farmers understand the importance of this approach in order to keep government expenses down in a period when reducing federal spending is a key priority in Congress. In fact, the Congressional Budget Office calculates that the savings of this program will amount to $166 million over five years, a 25% reduction from the current federal dairy program budget.

• The proposed Federal Milk Marketing Order reforms are insufficient.

FACT: This proposal establishes only two prices for milk: a Class I price for bottled milk, and a manufacturing price for all other forms of dairy products. There is no longer a minimum price for four separate classes of milk, as there is today under the current system. Under the new program, the manufacturing class of milk will be determined by a competitive pay price, and not tied directly to Chicago Mercantile Exchange prices for commodities such as cheese, whey, butter and nonfat milk powder. This evolution is the most significant change in milk pricing in a generation, and will eliminate controversial elements such as end-product pricing and make allowances.”

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.

Discussion Draft Paves Way for Further Congressional Consideration of Dairy Reforms

ARLINGTON, VA – The effort to make dramatic improvements in U.S. dairy policy took a big step forward Wednesday with the release of draft legislation incorporating the key elements of NMPF’s Foundation for the Future program.

The discussion draft text has been made available by the House Agriculture Committee’s Ranking Member Collin Peterson (D-MN) here: http://democrats.agriculture.house.gov/.

“This is a long-anticipated and very welcome next step in the process of upgrading dairy policy to better provide farmers with protection, stability, and the opportunity for growth,” said Jerry Kozak, President and CEO of NMPF. “We appreciate the attention that Congressman Peterson has brought to this issue, and we will be working with him and his colleagues on Capitol Hill to help advance and implement the concepts of Foundation for the Future.”

The legislative language is termed a discussion draft, rather than a bill, as it now provides members of Congress with the opportunity to allow fellow congressmen, key stakeholders, and constituents the opportunity to view the language prior to the official introduction of a bill. It also allows backers of the draft to seek cosponsors who wish to affix their names to the bill, prior to it being formally introduced.

Kozak noted that the economic impact of the reforms contained in the Foundation for the Future proposal will save the government money, compared to current dairy program spending. Such a development “becomes a critical part of the effort to help us move it forward, because all of the talk in Washington lately has been about cutting spending, and specifically, which farm program expenditures can be reduced,” Kozak said. “We now have a good answer to that question where dairy programs are concerned.”

The Congressional Budget Office has evaluated, or scored, the legislative draft to assess its budget impact, and that process necessitated two changes, compared to the original Foundation for the Future package as proposed by NMPF (which can be reviewed in this magazine describing the program).

With respect to the Dairy Producer Margin Protection Program (DPMPP), the amount of basic (no cost to the farmer) margin coverage has been adjusted to 75% of a producer’s production history. This change saves money, compared to the current baseline for dairy. However, the DPMPP supplemental coverage option remains at 90% of the producer’s production history, as NMPF had proposed.

In addition, due to a number of issues that deal with tax provisions and the overall federal budget deficit, CBO has determined that 50% of any dollars collected as a result of the implementation (i.e. “triggering in”) of the Dairy Market Stabilization Program (DMSP) will be remitted to the Treasury, rather than being spent to purchase dairy products. This provision ensures a measure of cost savings sufficiently significant to reduce the overall cost of FFTF.

Kozak said that NMPF will spend the coming weeks building support for the legislative draft, in anticipation of the subsequent formal introduction of a bill in the House, “with an emphasis on obtaining bipartisan support from across the country for this critically-important improvement in dairy policy. We also hope the Senate will take up the charge, so that we can get the legislation passed and implemented as soon as possible.”

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.

Producers interested in learning more about the reforms contained in NMPF’s Foundation for the Future may register for 12 meetings being held across the country in July and August that will provide more information on the significant changes in dairy policy contained in the proposal. The three-hour meetings are free to all attendees.

“The U.S. dairy industry has called for dramatic changes in dairy policy, and Foundation for the Future answers that call,” says Jerry Kozak, NMPF President and CEO. “Our summer meetings will explain how Foundation for the Future’s dairy policy reforms will safeguard dairy producers’ equity, ensure the future of their operations, and stabilize dairy markets.”

The meetings, starting next week, are slated to take place throughout the United States between July 12 and August 22. Each meeting will feature an in-depth presentation, and question and answer session led by NMPF’s Kozak, along with other staff. Meeting locations include:

• Olympia, Wash., Red Lion Hotel – July 12
• Visalia, Calif., Holiday Inn – July 13
• Lubbock, Texas, Overton Hotel & Conference Center – July 18
• Alexandria, Minn., Holiday Inn – July 20
• Dubuque, Iowa, Grand River Center – July 21
• Lansing, Mich., Ramada Lansing Hotel & Conference Center – July 26
• Green Bay, Wis., Comfort Suites – July 27
• Stevens Point, Wis., Ramada Hotel – July 28
• Harrisburg, Pa., Holiday Inn Harrisburg – East – August 8
• Syracuse, N.Y., Holiday Inn Syracuse/Liverpool Airport Hotel – August 10
• Ocala, Fla., Hilton – August 12
• Nashville, Tenn., Embassy Suites Nashville Airport – August 22

Dairy producers, milk processors, and other key industry stakeholders are encouraged to attend. Visit www.registration123.com/NMPF/2011FFTF/ to register, and check out www.futurefordairy.com for additional meeting information. Space is limited, so register early.

 

On September 27, 2010, the Mandatory Price Reporting Act of 2010 was signed into law, with NMPF’s support. The Act gave USDA one year to implement newly invigorated and electronic dairy product price reporting in the collection of prices used to set Federal order milk prices. On June 10, USDA published a proposed rule that would:

• Transfer the dairy product prices program from the National Agricultural Statistics Service to the Agricultural Marketing Service (AMS), as NMPF had originally proposed;
• Require plants to report prices electronically;
• Move up the plant reporting deadline by one day, to Tuesday at noon, for products sold the week before ending with Saturday; and
• Set the deadline for publication by AMS at 3 p.m. on Wednesday.

Manufacturers who process and market less than one million pounds per year of the specified dairy products would be exempt from mandatory reporting, as they are now.

Comments on this proposed rule are due August 9; this should put AMS on schedule to implement the rule by the statutory deadline of September 27, one year after the Act’s signing.

The rule can be found online. If you have any questions about this, please contact Roger Cryan at NMPF, or USDA’s Joe Gaynor at (202) 720-9351.

The Obama Administration reached an agreement on June 28th with Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI) regarding how to proceed with the three pending Free Trade Agreements (FTAs), and with the complementary trade program, Trade Adjustment Assistance (TAA), that Democrats have insisted must be part of any plan for advancing the three FTAs.

Continued Senate Republican resistance regarding how to deal with TAA, however, prevented the Finance Committee from considering the FTAs on June 30th. All sides have been continuing to work to find a way forward on these issues, given a desire from all involved to see these agreements considered before the August congressional recess.

The House Ways and Means Committee approved the draft implementing bills for the three pending FTAs on July 7th, although the version the House panel approved does not include an extension of TAA. Meanwhile, the Senate Finance Committee also approved the draft implementing bills on July 7th, and its version did include a TAA extension. As this newsletter goes to press, there is not yet an agreement to submit the FTAs and TAA to a full vote in Congress.