The U.S. Department of Agriculture convened the first meeting of its Dairy Industry Advisory Committee April 13th through the 15th. The 17 members of the committee included producers and producer representatives, processors, state government, retail, and academia. In total, NMPF member representatives included five member producers and two cooperative CEOs.

USDA Secretary Vilsack opened the meeting by saying that the group’s genesis was in the dairy crisis of 2009. He stated that the industry “needs to get control of itself” and challenged the committee to come up with a common-sense solution. His charge to the committee was to come up with something within a year.

Following comments by the committee members, a series of background reports from USDA staff, and Dr. Scott Brown of FAPRI, were presented to the committee.

USDA staff reports continued the morning of the second day, including a review of the Dairy Options Pilot Program, and the Livestock Gross Margin Insurance Program.

Jim Tillison, NMPF Senior Vice President, gave a report on the Cooperatives Working Together (CWT) program activities from its inception in 2003 to the present. NMPF President and CEO Jerry Kozak presented an overview of Foundation for the Future, and answered a number of questions from committee members primarily focused on the Dairy Producer Income Protection Plan. Connie Tipton, CEO of the International Dairy Foods Association (IDFA), presented her members’ thoughts and concerns regarding future dairy programs. She was followed by representatives from the Milk Producers Council of California, who discussed its Dairy Price Stabilization Plan.

More information on USDA’s Dairy Industry Advisory Council can be found athttp://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=dia-mt.

The new rules for producer-handlers were published in the Federal Register on April 23, following successful producer referenda in all Federal Order markets, and will take effect on June 1. Under the new rule, vertically integrated bottlers with over three million pounds of fluid milk sales will be required to participate in the Federal order pool just like any other large bottler.

Before this, subject to certain conditions, a large bottler with its own farm production could avoid contributing to the Federal Order pool in its market, and thus received a significant pricing advantage against other bottlers. The new rules are based on proposals made by the National Milk Producers Federation and the International Dairy Foods Association last year. A successful result on this issue was one of NMPF’s major goals of 2009. This change will add millions of dollars to the Federal Order producer pools. More importantly, it will prevent further erosion of producer prices through what had become a loophole for large producer-handlers.

The new rules can be found at this site: /sites/default/files/2010-9402.pdf. If you have questions, please call Roger Cryan in the NMPF offices.

Many NMPF members expressed concern over the April 22nd announcement by China that it planned to stop accepting the current U.S. dairy health certificate for food-grade shipments as of May 1. Sales to China are considerable, and future opportunities for making further inroads for our cheese and dairy ingredients there are even larger.

We were happy to receive confirmation last week that China has granted a 30-day delay in its plans, and therefore will continue accepting the current U.S. dairy health certificate until June 1. USDA’s Foreign Agricultural Service is seeking clarity on whether product shipped prior to June 1 but arriving after the 1st will also be permitted entry using the current U.S. certificate.

NMPF will continue to work with USDEC on this issue, as we work to ensure that technical engagement is given the appropriate degree of priority required to achieve resolution and agreement on a new certificate by June 1.

In the five weeks since CWT reactivated its Export Assistance program, it has assisted member cooperatives in making sales overseas that total nearly 22 million pounds of Cheddar cheese and Monterey Jack cheese. Using the milk to Cheddar cheese yield factor of 10 pounds of milk to make one pound of cheese, it will take 220 million pounds of milk to make the 22 million pounds of cheese. Put another way, the milk equivalent of those sales is the annual milk production of nearly 10,000 cows.

Using the Export Assistance program to build sales overseas can arguably have a greater and longer term impact than retiring cows. Independent analysis showed that the impact of retiring cows can last three years but at a steadily declining rate. Building markets for U.S. dairy products overseas with the help of CWT export assistance can have a longer term impact at a constant or growing rate.

As a follow-up to their June 2009 visit to Washington, DC in conjunction with the NMPF Board of Directors meeting, more than 30 Young Cooperators (YCs) returned to the area in April 2010 to talk to their congressional offices about dairy industry issues and increase the visibility of dairy producers on Capitol Hill.

During the two-day event, YCs were briefed by NMPF staff on important topics the industry is currently facing. The briefing was followed the next day by visits to offices of various Representatives and Senators so that the YCs could urge them to exclude U.S. dairy trade with New Zealand in the Trans-Pacific Partnership, and increase milk consumption in schools, among other things.

A new group of YCs will visit in June during NMPF's Board of Directors meeting that will take place June 7th through the 9th.

In the photo: YCs Dan and Rachel Gallagher had a chance to visit with Senator Patrick Leahy (right) from their home state of Vermont.

This week David Hickey joined the NMPF staff as the Director of Government Relations.

David was previously with the National Association of State Departments of Agriculture (NASDA) as Manager of Legislative and Regulatory Affairs. His portfolio includes dairy, energy, climate change, rural development, farm safety net, crop insurance, and disaster assistance. He was actively engaged in the drafting and reporting of legislation during the 2008 Farm Bill and Energy Acts.

Prior to working at NASDA, David was a Legislative Correspondent for Sen. Norm Coleman (R-MN) from May 2006 – Jan. 2009.

Originally from Minnesota, David holds a degree in Political Science from Arizona State University. He can be reached at dhickey@nmpf.org.

Cooperatives Working Together (CWT) reactivated its Export Assistance program to boost sales of U.S.-made cheddar cheese. Block cheese prices have risen by 25 cents per pound since the announcement on March 18.

Last used in 2008, CWT's Export Assistance Program assists member cooperatives with exporting eligible dairy products and establishing overseas markets for their members' milk. While the program had, in the past, exported whole milk powder, butter, and butterfat, the focus in the short-term was on cheddar cheese, as this would have the most impact on farm-level milk prices.

“After conducting a thorough economic analysis, it was clear that implementing the Export Assistance program and focusing on cheddar cheese could provide the most immediate positive signal to address continuing low producer milk prices,” said Jerry Kozak, President and CEO of NMPF, which manages CWT. “Given the smaller spread between U.S. and global cheese prices, and given the sizeable inventories of cheese that are hampering a recovery in milk prices, using CWT’s export program will be expedient and effective.”

While the program had previously exported 186 million pounds of dairy products to 55 countries, CWT advised its members that it would provide additional incentives for sales to the target markets of Japan, Algeria, Egypt, Saudi Arabia, and Australia. CWT believed these were prime markets for sales of significant quantities of cheddar cheese, although it would consider bids for sales to other markets as well.

Cooperatives seeking assistance submit a bid specifying the product to be exported, the quantity of product, the end customer, the country in which the customer is located, and the amount of assistance per metric ton of product needed to make the sale. CWT and U.S. Dairy Export Council (USDEC) staffs evaluate each bid received against world market conditions and the world product prices. If they determine that the assistance requested is reasonable, the bid is accepted. The cooperative does not receive payment from CWT until paperwork is submitted showing that the product has been delivered to the customer.

NMPF’s major restricting of dairy policy, entitled Foundation for the Future, continues to develop momentum. The three subcommittees that are fleshing out details of the various programs – producer income insurance, production management, and Federal Order reform – have met repeatedly over the winter, and will continue to finalize details of their respective proposals.

The NMPF Board of Directors received a status update on the Foundation effort at its meeting last month, and directed the association’s staff to finalize the package in time for the next Board meeting in June.

The concepts behind the Foundation for the Future have been presented at several dairy conferences recently, including the Western United Dairymen annual meeting, the 2010 Wisconsin Dairy Policy conference, and the Dairy Farmers of America convention. In addition, Pennsylvania dairy farmer Lauren Mosemann will present a summary of the program at a House Agriculture Committee hearing April 20th in Harrisburg, PA.

On March 11, NMPF testified in favor of a recently introduced House bill that would foster additional U.S. agricultural exports to Cuba, and permit open travel for all Americans to that nation.

NMPF Board member John Wilson (in the photo), who is Sr. Vice President of Marketing & Industry Affairs for Dairy Farmers of America, urged support for the Travel Restriction Reform and Export Enhancement Act (H.R. 4645). The legislation is being championed by House Agriculture Committee Chairman Collin Peterson and Representative Jerry Moran of Kansas. The legislation presently has 37 additional co-sponsors supporting it.

“NMPF believes that efforts to help regain the exports we lost last year are essential to helping farmers and putting the U.S. dairy industry on a firmer footing going forward,” said Wilson. “H.R. 4645 represents one such positive step in the right direction to increase demand for U.S. dairy products.”

The bill would establish clarity and predictability regarding the “cash-in-advance” provision of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) by ensuring its interpretation according to the original intent of Congress to allow for payment in a manner that did not impede trade, while also not offering the extension of credit to Cuba. Prior interpretations of this provision have hampered U.S. dairy exporters’ ability to ship product to Cuba in a safe and cost-efficient manner, Wilson said.

The legislation would also remove a costly and unnecessary burden on U.S. agricultural exporters by allowing payment to pass from Cuba directly to U.S. banks in place of the current, more costly requirement that payments be routed through banks in other countries.

In closing, said Wilson, “We look forward to enjoying the impact this legislation would have on our ability to more easily provide the Cuban people and those Americans wishing to travel to Cuba with the nutritious and safe foods that we produce in such abundance here in the United States.”

NMPF, along with other representatives across the dairy industry, met last week with USDA and the U.S. Trade Representative (USTR) regarding the new EU export certification requirements that take effect October 1, 2010. These new requirements change the 400,000 somatic cell count requirement from sampling at the processor-level (co-mingled milk), to individual farms. Details related to these requirements were provided to members last week.

Moving forward, NMPF will work with the U.S. Dairy Export Council (USDEC) to present USDA with a reasonable and workable interpretation of what would satisfy compliance with the new EU regulations, and allow USDA to continue issuing certificates. NMPF will also be coordinating with the International Dairy Foods Association (IDFA) and the American Dairy Products Institute (ADPI) throughout that process. Additionally, we will continue to work with USTR as they initiate a dialogue with the EU regarding the WTO compliance of this requirement.

Interested students have two weeks left to submit applications for the National Dairy Leadership Scholarship Program.

Each year, NMPF awards four to five scholarships to outstanding graduate students (enrolled in Masters or Ph.D. programs) who are actively pursuing dairy-related fields of research that are of immediate interest to NMPF member cooperatives. Graduate students pursuing research of direct benefit to milk marketing cooperatives and dairy producers are encouraged to submit an application (applicants do not need to be members of NMPF to qualify). The top scholarship applicant will be awarded the Hintz Memorial Scholarship, which was created in 2005 in honor of the late Cass-Clay Creamery Board Chairman Murray Hintz, who was instrumental in establishing NMPF's scholarship program.

Recommended fields of study include but are not limited to agriculture communications and journalism, animal health, economics, environmental science, food safety, genetics, herd management, marketing and price analysis, nutrition, and product development. Applications are due no later than Monday, April 26, 2010. For an application or more information, please visit the NMPF website or call the NMPF office at 703-243-6111.

The 2010 Annual Conference of the American Dairy Products Institute (ADPI) and the American Butter Institute (ABI) is just three weeks away. Record attendance is projected for this year’s conference, which will be held in Chicago, Illinois, from April 25–27 at the Hyatt Regency Chicago.

The 2010 Conference will feature two full days of outstanding speakers and informative programs on current industry topics. There will also be abundant opportunities to network with over 750 senior level executives from manufacturers, marketers, suppliers, distributors, and brokers of manufactured dairy products. Other registered attendees will include industry analysts, journalists, key government officials, and trade exhibitors.

Information about the 2010 Conference is available at the official conference website, www.adpi.org, which includes online registration and exhibitor registration forms. Additional details may also be obtained by contacting ABI (www.butterinstitute.org) at 703-243-5630 or by email at AMiner@nmpf.org. The current agenda for the 2010 ADPI/ABI conference is also available on the website.

“The ABI and ADPI meeting remains a crucial opportunity for dairy industry leaders to discuss where the industry is going in the future, and that need is all the more urgent in today’s changing global and business climate,” said Jerry Kozak, Executive Director of ABI.