Last month, the Environmental Protection Agency (EPA) partially granted Growth Energy’s waiver request application to allow fuel and fuel additive manufacturers to introduce gasoline that contains up to 15 % ethanol (E15) for use in certain late-model motor vehicles.

As ethanol production increases to meet this demand, it is very possible that significantly higher feed prices will result. NMPF believes this is exactly why Congress should pass Foundation for the Future, including the Dairy Producer Margin Protection Program. Margin protection was specifically designed to protect producers against unforeseen or excessive feed prices caused by government programs to incentivize renewable energy programs, increases in demand, and/or shortage in stocks or production yields.

Meanwhile, Agriculture Secretary Tom Vilsack announced several measures to further develop our nation’s biofuel industry. To spur the production of new, non-food, non-feed biomass crops, USDA published the final rule to implement the Biomass Crop Assistance Program (BCAP). BCAP will provide farmers with assistance to encourage the establishment and production of eligible renewable biomass crops. Vilsack also announced a new partnership with the Federal Aviation Administration to develop and produce aviation fuel from forest and crop residues. Coinciding with the FAA agreement, USDA is also establishing five USDA regional Biomass Research Centers. These centers will be a collaboration between the Agricultural Research Service (ARS) and the U.S. Forest Service (FS).

The November 2nd election proved to be the wave of change predicted by most analysts. Republicans gained more than 60 seats in the House of Representatives, and edged closer to the majority in the Senate. The House is now split between 239 Republicans and 187 Democrats, with nine races still undecided.

The Republicans robbed the Democrats of a filibuster-proof majority in the Senate by picking up five seats. Sen. Lisa Murkowski’s (AK) write-in campaign did better than expected, and reports are she will maintain her current seat. As of November 5th, the Senate is split 53 to 46 in favor of the Democrats. Sen. Harry Reid (NV) narrowly defeated his tea-party opponent; therefore, he is expected to remain as Majority Leader in the Senate in 2011.

The new Republican chair of the Agriculture Committee is expected to be Rep. Frank Lucas (OK), while the current Democratic Chairman, Collin Peterson (MN), will become the Ranking Minority member once the 111th Congress ends. At least 15 Democrats on the House Agriculture Committee (more than half) will not return. Rep. Jim Costa’s (CA) race is still too close to call.

Four of the 16 House Committee Chairmen will not be returning in the 112th election. Appropriations Chairman Dave Obey (WI) retired (and his seat was taken by a Republican), but Armed Services Chair Ike Skelton (MO), Budget Chair John Spratt (SC), and Transportation and Infrastructure Chair James Oberstar (MN) lost reelection bids. None of the top Republicans on those committees, all of whom are expected to contend for the chairmanships of those panels in January, lost this week.

The conservative Democratic “Blue Dog” caucus took a beating. The caucus lost two members to retirement and had two others run for higher office, and out of the remaining 50 members, 24 Blue Dogs lost. This group of Democrats, mostly from rural districts, often bridged the gap between parties. Congress will be more divided into party extremes, which will only make passing controversial, comprehensive bills more difficult.

In the Senate, Sen. Debbie Stabenow (MI) is expected to be chosen as the Chair of the Senate Agriculture Committee, with the loss Tuesday of current Chair Blanche Lincoln (AR). Sen. Lincoln was the only member of the Senate Agriculture Committee to lose.

At least 25 members, all Democrats, of the Congressional Dairy Farmer Caucus (CDFC) will not return in the next Congress. A massive education process on dairy policy will be necessary in 2011, as NMPF and CDFC chairs recruit incoming freshmen representing dairy districts.

The game plan for “Lame Duck” session is still up in the air. Congress is scheduled to return November 15, 2010, for a week to vote on a continuing resolution (CR) to fund the government. There were 20 bills vying for time on the schedule. NMPF’s expectation is that very little will be accomplished other than the must-pass CR.

NMPF and other agriculture groups are campaigning for estate tax reform to be passed during the Lame Duck session.

If estate taxes are allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55%, the negative impact on the dairy industry will be significant. NMPF supports permanently raising the exemption to no less than $5 million per person, and reducing the top rate to no more than 35%. It is also imperative that the exemption be indexed to inflation, provide for spousal transfers, and include the stepped-up basis.

Family farmers and ranchers are not only the caretakers of our nation’s rural lands but also small businesses. The 2011 change to the estate tax law does a disservice to agriculture because we are a land-based, capital-intensive industry with few options for paying estate taxes when they come due. The current state of our economy, coupled with the uncertain nature of estate tax liabilities, makes it difficult for family-owned farm and ranches to make sound business decisions.

Congress is expected to address estate tax reform during its lame duck session later this November. Interested parties can contact their members of Congress on this issue by going to NMPF’s Dairy GREAT section.

Members of Cooperatives Working Together (CWT), the dairy farmer-funded self-help program, voted last week to focus the seven year-old program exclusively on building export markets after 2010.

At NMPF's Annual Meeting last week in Reno, Nevada, CWT’s management committee determined that an export-centered program was the most appropriate course to follow in the future. This means that CWT will no longer fund any herd retirement rounds, through which CWT member farms are paid to reduce their herds. CWT conducted its 10th and final herd retirement this past summer.

“CWT has undergone several shifts in how it has been operated since it started in 2003,” said Jerry Kozak, President and CEO of NMPF. “The decision to drop the herd retirement program, but to maintain the basic structure of CWT with an exclusive focus on helping sell U.S.-made dairy products in foreign markets, allows CWT to continue making positive contributions to dairy farmers’ bottom lines.”

NMPF’s Board of Directors voted to support a CWT program that will be funded at two cents per hundredweight, starting Jan. 1, 2011, and running through December 2012 (the program currently collects 10 cents/cwt. on its members' milk volume). Members also determined that 75% of the nation’s milk supply must be contributing at that level in order for the program to continue. They also voted to take the remaining funds not allocated so far in 2010, and shift those to the export assistance program in 2011.

A presentation by Dr. Scott Brown of the University of Missouri showed that the Export Assistance program has provided an excellent return on investment. For every one dollar spent assisting CWT member cooperatives in making export sales, U.S. dairy farmers received $15.53 in additional revenue. CWT’s export activity in 2010 has returned 18 cents per hundredweight, according to Brown’s analysis.

In the coming weeks, CWT will be reaching out to all cooperatives and all independent producers in order to achieve the minimum 75% participation level needed to move forward with the collection of the additional two cent investment that will provide total funding of approximately $40 million per year.

Kozak said that the membership commitment will be for 24 months for both cooperatives and individual dairy farmers. This will allow CWT to develop an export assistance strategic plan as to how and when to best utilize the funds committed, he noted.

Over 900 people representing various sectors of the dairy industry gathered at the Grand Sierra Resort in Reno, Nevada last week at the joint annual meeting of the National Milk Producers Federation (NMPF), the National Dairy Promotion and Research Board (NDB), and the United Dairy Industry Association (UDIA). It was NMPF's 94th Annual Meeting. Highlights of the meeting included appearances by researcher and author Jason Jennings; Informa Economics' Jim Wiesemeyer; and NFL Hall of Famer Howie Long.

NMPF Chairman Randy Mooney and President & CEO Jerry Kozak presented a joint speech to the membership again this year, describing the progress NMPF has made on a variety of legislative, regulatory, and economic issues, including the Foundation for the Future initiative.

Two new members were welcomed to the NMPF Board of Directors: Tim den Dulk, Continental Dairy Products; and Dennis Tonak, Mid-West Dairyman’s Cooperative. NMPF re-elected the current slate of officers.

At the Awards Luncheon, NMPF presented Certificate of Appreciation awards to the following retiring directors: Tom Camerlo, Dairy Farmers of America, Inc. (in memoriam); Rod DeJong, Northwest Dairy Association; Joe Kusilek, Ellsworth Cooperative Creamery; and Perry Tjaarda, Dairy Farmers of America, Inc.

NMPF also presented awards to recognize Honorary Directors: Tom Camerlo, Dairy Farmers of America, Inc. (in memoriam); and Rod DeJong, Northwest Dairy Association.

Kozak introduced the new NMPF Leadership Hall of Fame Award, which recognizes individuals possessing superlative and unparalleled leadership abilities, whose lasting accomplishments have brought about the betterment of NMPF as an organization, and the dairy producer community it serves. The award was given posthumously to former NMPF Chairman Tom Camerlo.

The 2010 Grand Champion Cheese was awarded to Agri-Mark, Inc. for its McCadam New York Empire Jack, produced in Chateaugay, NY. This year's Outstanding Achievement in Communications Award was awarded to the Dairy Farmers of America Communications Team.

Matt and Kristie Dorsey from Northwest Dairy Association were elected to be the new 2011 Young Cooperator (YC) Chaircouple. Next year's Vice Chaircouple will be Brandon and Megan Miller from Land O'Lakes, Inc., and Jared and Genny Myers from Dairy Farmers of America, Inc. will be the Secretary Couple.

Other 2011 YC Advisory Council members include: Marlow Duffy, Agri-Mark, Inc.; David and Jennifer Collins, Dairylea Cooperative Inc.; Matthew and Cindy Damm, Dairy Farmers of America, Inc.; Charlie and Sherry Patterson, Maryland & Virginia Milk Producers Cooperative; Burke and Lisa Larsen, Michigan Milk Producers Association; Travis and Jenna Frauhiger, Prairie Farms Dairy, Inc.; Roy and Shiloh Johnson, Swiss Valley Farms Company; Josh and April Neahring, Tillamook County Creamery Association; Kevin and Melanie Danzeisen, United Dairymen of Arizona; and William and Jamie Purdy, Upstate Niagara Cooperative, Inc.

The YCs appreciated everyone who purchased raffle tickets at the meeting. Thanks to the generous contributions of meeting participants, the raffle raised over $9,000 for NMPF's scholarship fund, which will be used to award scholarship to graduate students pursuing dairy-related fields of study next year.

Speeches and presentations from the 2010 Annual Meeting are available on the NMPF website. All of NMPF's photos from the meeting are also publicly available via Flickr.

NMPF has released the revised Milk and Dairy Beef Drug Residue Prevention Manual for 2011. The manual is a revision of the Milk and Dairy Beef Residue Avoidance manual that was previously published by the Dairy Quality Assurance Center that NMPF purchased in 2008. As a new area of focus for the National Dairy FARM Program^TM, the manual can be found online at www.nationaldairyfarm.com.

The newly revised Milk and Dairy Beef Drug Residue Prevention Manual is a concise review of appropriate antibiotic use in dairy animals. It is a quick resource to review those antibiotics approved for dairy animals and can also be used as an educational tool for farm managers as they develop their on-farm best management practices necessary to avoid milk and meat residues.

Congress has left Washington to begin campaigning in earnest for the November 2nd elections, but will return later next month to wrap up unfinished business during a lame duck session.

 

There are as many as 20 pieces of legislation that the House and Senate will act on during the lame duck period. Following is a list of bills that are competing for floor time:

1. Extension of Bush tax cuts
2. Defense Department authorization
3. DREAM Act
4. Senate bill to pre-exempt EPA action on carbon emissions
5. Spending bills (12 appropriations bills or an omnibus)
6. Tax extenders package
7. Renewable electricity standards
8. START treaty
9. Medicare physician payments
10. Unemployment insurance benefits
11. Cybersecurity
12. Child Nutrition
13. Food Safety
14. China currency
15. FAA multiyear authorization
16. Mine safety
17. South Korea trade pact
18. NASA authorization
19. Education Act reauthorization
20. Intelligence authorization

NMPF has been aggressively engaged in eight (bolded) of the twenty bills pending on issues that directly impact the dairy industry, and will be prepared to reengage on them when the House and Senate return to Capitol Hill.

Last month, NMPF completed the development of a self-certification template tool to assist dairy producers in developing Spill Prevention, Control, and Countermeasure (SPCC) plans that covers all fuel and oil storage on the farm. The template, developed with assistance from the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS), is available on the NMPF website.

“Dairy farmers want to do the right thing on environmental regulations, but in many cases lack readily available tools to assist with the complex regulations,” said Shawn Reiersgaard, Chair NMPF Environmental Issues Task Force. “The SPCC template provides dairy producers with a valuable tool to successfully implement SPCC plans on their farms and continue to be excellent stewards of our environmental resources.” The template was unveiled at the NMPF Environmental Issues Task Force meeting yesterday in Rosemont, IL.

The goal of the SPCC program is to prevent oil spills into waters of the United States and adjoining shorelines. A key element of the program calls for farmers and other facilities to have an oil spill prevention plan, called an SPCC plan. The SPCC plans are required for farms which have an aggregate storage capacity of oil products of 1320 gallons, or more, counting every storage container larger than 55 gallons. A farm with less than 10,000 gallons of total storage capacity and no single storage greater than 5,000 gallons can self-certify its SPCC plan.

Farms that do not meet this exemption must have a plan certified by a professional engineer. In August, EPA proposed to extend the compliance deadline for the bulk milk storage requirements until the SPCC exemption for bulk milk storage is finalized. Dairy producers are still required to comply with SPCC regulations for all other fuel and oil storage.

The National Dairy FARM Program: Farmers Assuring Responsible Management™ is now accepting enrollment in the Animal Care Program. This officially launches the second phase of the implementation process, which included the start of on-farm evaluations for participating producers. The National Dairy FARM Program, created by the National Milk Producers Federation (NMPF), provides consistency and uniformity to best practices in animal care and quality assurance in the dairy industry.

A participation fee is a shared responsibility for all participants of the National Dairy FARM Animal Care Program to fund the enrollment of on-farm data in a private database, as well as to pay for third-party verification of the program. While support for the development of educational training materials has been available from the national dairy check-off, such funding sources cannot be drawn upon for third-party verification.

“Producers can participate independently or through their cooperative or processor. Producers who are affiliated with a cooperative or proprietary processor should contact their representative to see if their milk marketing organization is participating in the program; or to encourage them to join in,” said Betsy Flores, NMPF Director of Regulatory Affairs. Participation information can be found at www.nationaldairyfarm.com.

To participate in the National Dairy FARM Program, producers, co-ops, processors, and state and regional dairy producer organizations can contact Betsy Flores at (703) 243-6111, or log on to www.nationaldairyfarm.com.

All the cows that were accepted in the Cooperatives Working Together (CWT) 2010 herd retirement (except for some treated dry cows) have gone to packing plants. When the few dairies have sent these last cows for processing, this latest herd retirement round (the sixth in three years) will be complete and final figures for number of dairies, number of cows, and pounds of milk production removed will be released.

Meanwhile, during the month of September, CWT accepted seven bids for export assistance in selling 1,173 metric tons (2.6 million pounds) of American cheeses to Asia and the Middle East. The total cheese that CWT has helped members sell to 23 countries on four continents now totals 44.5 million pounds in 2010. CWT has also assisted members in making export sales of 33.1 million pounds of butter and anhydrous milkfat since it started offered export assistance on March 18th.

The House Dairy Farmer Caucus (DFC) devoted considerable time this past month to addressing issues threatening some of our most important foreign markets.

On Sept. 28th, 56 members of the Caucus wrote to the U.S. Trade Representative to urge a robust defense of America’s dairy industry against efforts by the European Union to claw back for its countries’ sole use several generic cheese names such as parmesan, provolone, and feta, as well as other names of importance to the U.S. dairy industry.

This bipartisan effort was led by Caucus Co-Chairs Joe Courtney from Connecticut; Devin Nunes from California; Tim Walz from Minnesota; and Peter Welch from Vermont. The DFC applauded the dedicated efforts that the Trade Representative’s office has invested in this area, and stressed the importance of ensuring that as the United States exports more American-made cheeses, America must retain the right to use these common names that are so recognizable to consumers around the world. For more information, see NMPF’s press release on this issue.

The four Caucus Co-Chairs also took further action on behalf of dairy producers this month by writing to President Obama about another issue of concern: retaliatory tariffs by Mexico that threaten our largest export market (readNMPF's summary of the issue). The chairs urged the President to take swift action address this situation that’s already having a negative impact on cheese sales from many areas throughout the country.

In addition to the efforts by the Dairy Farmer Caucus Co-Chairs, Rep. Bill Owens (NY), a strong defender of New York's dairy farmers, led several members from the upstate NY delegation in sending a letter to President Obamasimilarly urging swift action by the President to resolve this situation that’s negatively impacting New York's dairy industry and threatening exports from that state to Mexico. NMPF applauded the willingness of these members to stand up and urge action by the White House to address a situation of great concern to the dairy industry.