NMPF continues to work hard to maintain existing markets around the world – most notably in Europe and China – and to work to help expand opportunities as well in places like Cuba. First, NMPF has played defense in both China and Europe.

NMPF has continued to work closely with our government as it has worked to propose new certificate language to China to address China’s professed concerns with the current food-grade dairy health certificate and its perceived lack of adequate food-safety-related assurances. (Please see this month’s CEO's Corner column for more information on this issue.) The tenuous market situation is such that no formal approval exists for the acceptance of the current certificate, but China has indicated that it does not plan at this time to enforce a market closure. This puts shipments at risk, however, of later enforcement efforts by China that could conceivably negatively impact product already en route to China. USDA’s Under Secretary Miller and USTR’s Ambassador Siddiqui have remained personally involved in the ongoing certificate negotiations. A letter from them to Chinese authorities will accompany the latest certificate proposal this week.

Meanwhile, in Europe, NMPF remains concerned by the impending plans by the E.U. to begin requiring U.S. dairy exporters to test for compliance to the 400,000 SCC limit at the individual farm level, rather than at the tanker or silo levels, as had customarily been the practice. The lack of scientific justification for this requirement and concern that the E.U. is seeking to impose unfounded and onerous product quality and/or animal health requirements on the U.S. has driven NMPF’s response to this situation. NMPF joined with the U.S. Dairy Export Council to write to FDA Commissioner Margaret Hamburg last week about these concerns and to urge FDA to work appropriately with the other relevant U.S. agencies and with appropriate EU counterparts to address the negative economic impact this could have on many coops and farmers, as well as the scientific and W.T.O.-compliant justifications for a requirement of this nature.

In a related vein, NMPF has also been partnering with USDEC and the International Dairy Foods Association to combat ardent efforts by the European Union to claw back generic cheese names like “parmesan” and “provolone.”

This effort came to light late last year, as details of the EU-South Korea FTA became public. All indications over the past several months have been that the EU is pursuing an aggressive strategy with all its FTA partners (including U.S. existing or prospective FTA partners such as Peru, Central America, Colombia, and Canada) to get protection for geographical indications like “Parmigiano Reggiano.” In the EU’s eyes, this would prohibit anyone outside of the Parma, Italy, region from selling a cheese labeled as “parmesan” into those FTA markets – which would allow the EU to commandeer for its own use commonly used cheese name categories. Many generic cheese names used in the U.S. could be impacted by such as push, which is why NMPF has been working closely with our government to develop strategies for combating this blatant market share grab by the EU.

NMPF has also played offense on experts, urging Congress to open new opportunities in Cuba. The House Agriculture Committee held a hearing on June 30th to consider the Travel Restriction Reform & Export Enhancement Act (H.R. 4645), which would ease agricultural payment restrictions limiting U.S. competitiveness, as well as permit travel by all Americans to Cuba. The Committee narrowly approved the legislation, which will move in the coming weeks to a vote by the full House.

As NMPF and USDEC noted in a joint letter to House Agriculture Committee members this week, “Economists at Texas A&M University estimated the impact of eliminating U.S. financial constraints on agricultural exports to Cuba, and allowing U.S. citizens to travel to Cuba, at $50 million a year in additional dairy exports.” Given these anticipated gains in new export avenues for the U.S. dairy industry, NMPF has strongly supported this legislation.

The Senate last month failed to pass Sen. Lisa Murkowski’s (R-Alaska) Resolution of Disapproval that would have prevent the Environmental Protection Agency from moving forward with greenhouse gas regulations under the Clean Air Act. Those potentially regulated could range from the largest textile factory and coal-fired power plants, to possibly even small dairy operations. In fact, if these efforts ultimately move forward, nearly 99% of all U.S. dairy farms could be hit with the new EPA regulations.

With the new regulations now looming, many in Congress are looking to move ahead with Sen. Rockefeller’s legislation (S. 3072), a bill that would delay the EPA’s climate regulations for stationary sources for two years. While halting the agency’s efforts to regulate stationary sources, the bill would allow for other actions to still move forward, including vehicle emissions standards. Rockefeller currently has six Democrats joining him in support of the bill. Rep. Nick Rahall (D-W.V.) has introduced a companion bill (H.R. 4753) in the House of Representatives. Another potential option could be through the appropriations process; however, it is unclear if Congress will even get as far as subcommittee markups this year.

It is also unclear if the Senate will take up a comprehensive energy package this summer, which could include language to mitigate GHG emissions. Senators on both sides of the aisle are jockeying for what the legislation will ultimately look like if it were to reach the Senate floor. Several related bills, including the American Clean Energy Leadership Act which passed the Senate Energy and Natural Resources Committee last year; the American Power Act, a climate change bill introduced by Sen. John Kerry (D-Mass.) and Sen. Joe Lieberman (I-Conn.); the Carbon Limits and Energy for America's Renewal (CLEAR) Act (S.2877); and the Practical Energy and Climate Plan Act of 2010 (S. 3464), have all been mentioned as potential vehicles to see action this year.

NMPF applauded Congress for unanimously passing the bipartisan resolution recognizing June as National Dairy Month. The measure was passed on the evening of June 14, 2010. Seventy-nine members of the House of Representatives co-sponsored the resolution introduced by Rep. Joe Courtney (D-CT). Since 1939, June has been celebrated as National Dairy Month, honoring the important role the dairy industry has played in the economic and nutritional well-being of Americans.

“As Congress prepares to reauthorize the Child Nutrition Act (CNA) and the United States Department of Health and Human Services and the United States Department of Agriculture review the Dietary Guidelines for Americans, it is timely that milk and dairy products are being recognized for their role in the diets of Americans,” said Dr. Beth Briczinski, NMPF Director of Dairy Foods and Nutrition. The CNA and Dietary Guidelines serve as the basis for federal food and nutrition education and feeding programs.

Arriving on the heels of June Dairy Month, members of the dairy industry will now turn their attention to the celebration of National Ice Cream Month. Started in 1984, then-president Ronald Reagan designated July as the official time of year to acknowledge the importance of ice cream in the U.S. He also declared the third Sunday of the month (July 18 this year) as National Ice Cream Day. Reagan recognized ice cream as a fun and nutritious food that is enjoyed by 90% of the nation's population.

After a debate that captured national attention, Wisconsin Governor Jim Doyle last month vetoed legislation that would have allowed raw milk sales directly to consumers in that state.

Doyle’s office announced that because of public health concerns, he was vetoing state senate bill 434. That decision came a week after NMPF and the International Dairy Foods Association (IDFA) issued a statement expressing concern that, absent Doyle’s veto, Wisconsin would join other states in allowing further distribution of raw milk, a product which “remains a demonstrable threat to people of all ages in every state.”

Federal law prohibits the interstate sale of raw milk, but allows states individual discretion to regulate raw milk sales within their borders. Several states in recent years have loosened restrictions on the sales and marketing of raw milk, even as the product has been repeatedly linked to serious illnesses from coast to coast.

“Many other state dairy organizations in Wisconsin, along with the health professional community, made a major effort in the past week to provide some badly-needed perspective on the potentially deadly consequences if the state were to have passed this bill,” said Jerry Kozak, President and CEO of NMPF. “On behalf of the national dairy producer sector, we appreciate the statement that Gov. Doyle is making by vetoing this bill.”

The National Dairy FARM Program^TM continues to gain momentum. The completion of the first training workshop signals the start of the second phase of the implementation of the FARM animal care program.

In May, the first “Train-the Trainer” workshop was held in Rochester, MN. Over 20 veterinarians, cooperative field staff, and university extension educators participated in the training. By successfully completing the two-day workshop, the attendees are certified to train other evaluators to conduct on-farm evaluations. Additional workshops are schedule for June 29-30 in Fresno, CA, and July 20-21, in Harrisburg, PA. On-farm evaluations are expected to begin in July.

On May 26, a videotape from an Ohio dairy was released showing deeply disturbing images and animal handling practices. Ohio’s animal cruelty laws prohibit acts of unnecessary or cruel beating of domestic or livestock animals. NMPF supports further investigation into the situation on the farm.

Though some try to paint all of dairy with a broad brush when these videos are released, the vast majority of dairy producers practice responsible animal stewardship. The National Dairy FARM Program is designed to promote and verify the best practices in animal care. By collecting information on current animal care practices on the farm and verifying that information is accurate, the dairy industry can assure consumers an customers that producers are committed to providing the highest level of animal care.

The goal of the Environmental Protection Agency’s (EPA) Spill Prevention, Control, and Countermeasure (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 (including animal fats, i.e. milk) of 1320 gallons or more for every storage container larger than 55 gallons. This storage does not include vehicle storage capacity. A farm with less than 10,000 gallons of total storage capacity and no single storage greater than 5,000 gallons can self-certify their SPCC plan. Farms that do not meet this exemption must have a plan certified by a professional engineer.

On May 24, 2010, NMPF sent a letter to EPA requesting finalization for the bulk milk storage exemption from the SPCC rule. On January 15, 2009, EPA proposed to exempt bulk milk storage that is subject to the PMO from requirements of the SPCC to provide significant relief to dairy farmers by removing a great number from having to produce a SPCC plan (those under 1320 gallons of storage) and moving many more into the self-certification option, rather than requiring a professional engineer-certified plan. In the letter, NMPF requested that EPA finalize the exemption quickly, to allow dairy producers adequate time to comply with the SPCC regulatory deadline later this year.

Late in May, Rep. Candice Miller (R-MI) introduced H.R.5426 to require the Administrator of the Environmental Protection Agency to finalize a proposed rule to amend the spill prevention, control, and countermeasure rule to tailor and streamline the requirements for the dairy industry. The legislation, supported by NMPF, directs EPA to finalize the bulk milk storage exemption for the SPCC rule and provides forbearance on regulatory actions until such time.

In the coming weeks, a highly anticipated vote is expected to take place in the U.S. Senate to halt the Environmental Protection Agency (EPA) from moving forward with its plans to regulate greenhouse gases (GHG). As the issue of climate change is being debated in Congress, the EPA is moving ahead to establish permits, through its authority under the Clean Air Act (CAA), for emitters of GHGs. Those required to get these new permits could range from the largest textile factory and coal-fired power plants, to possibly even small dairy operations. In fact, if this vote fails, nearly 99% of all U.S. dairy farms could be hit with the new EPA regulations.

In accordance with a law known as the Congressional Review Act of 1996, Sen. Lisa Murkowski (R-AK) introduced a resolution of disapproval (S.J. Res. 26) to veto the EPA’s expansion of authority. That act provides Congress with the ability to reject certain rules and regulations developed by federal agencies. Currently, there are 40 cosponsors signed on to the legislation. Fortunately, unlike many other controversial measures in the Senate, the resolution only requires 51 votes to succeed.

For further details on S.J. Res. 26, as well as for information on how to get involved, please visit the NMPF Dairy G.R.E.A.T. website.

NMPF has been active in working to keep key markets open in both Europe and China, while also attempting to increase market opportunities in Cuba.

The situation in China is a challenging and continually evolving one. The Chinese government indicated in late April that it would continue to accept only U.S. food-grade dairy products accompanied by a certificate dated May 31st or earlier, regardless of when the product actually arrived in China. On May 31st, Chinese authorities told the U.S. government that it does not currently plan to enforce the June 1 health certificate deadline that had been previously announced. Chinese customs officers have not been informed that they are to stop accepting shipments lacking a certificate dated prior to June 1. Although this far falls short of the certainty that is needed to restore smooth market functioning, it is better than a definitive market closure. It is NMPF’s understanding that swift movement by the U.S. to work towards finding agreement on new certificate language has been helpful, and could resolve this situation, if China accepts reasonable offers by the U.S. government.

Another issue of great concern to many NMPF members has been the E.U. Somatic Cell Count issue. Late last year, the E.U. informed the U.S. government that exporters would need to test for compliance to the E.U.’s 400,000 SCC limit at the individual farm level, rather than at the tanker or silo levels, as had customarily been the practice. This poses a significant challenge for many coops and as a result, NMPF has been working with our government to evaluate the legitimacy of the EU’s requirements, and to evaluate more workable compliance criteria.

Concrete information from the U.S. government regarding how it plans to require companies to document compliance with the E.U. criteria remains extremely limited – a point that heightens the challenge facing coops as they find ways to deal with this issue. NMPF will continue to keep members fully informed of developments as work with the government moves forward.

Finally, NMPF is also working to expand markets. The U.S. currently ships some dairy products to Cuba, a market where close proximity would give the U.S. a strong advantage were policies not complicating our ability to sell there. To help correct this, House Agriculture Committee Chairman Peterson, along with Rep. Jerry Moran (R-KS), have introduced H.R. 4645, which would ease agricultural payment restrictions limiting U.S. competitiveness, as well as permit travel by all Americans to Cuba. The latter is expected to offer the prospect of expanded agricultural sales, including of higher value-added products such as cheese. As a result, NMPF has been strongly supportive of this legislation and is hopeful that it soon will be taken up in the House Agriculture Committee.

On April 28, 2010, NMPF sent a letter to the Food and Drug Administration asking it to take action against imitation dairy products that were misbranded by illegally using terms for which standards of identity have been defined (e.g. milk, cheese, yogurt, etc.). Thus far, there has been no official response to the letter from FDA.

Efforts to increase awareness about the issue of misbranding have been successful. On April 29th, a story ran on the front page of USA Today and a Facebook page (www.facebook.com/theydontgotmilk) was launched. Within a week, over 250 comments were posted on the USA Today discussion board, and the Facebook page had been visited over 5,100 times. Currently, over 800 people are fans of the “They Don’t Got Milk” site, representing 20 different countries and 6 continents.

NMPF has dedicated a webpage (www.nmpf.org/fda-form) that allows consumers to directly email a letter to the FDA urging them to take action on the issue of misbranded imitation dairy products. Currently, 67 letters have been sent to FDA through the site. The letter contains pre-written text to simplify the process, although there is the option to add customized text and include a photo of a misbranded product. The form was designed to make the process simple and fast, so NMPF encourages people to send a letter today to the FDA.

To those in the dairy industry, the month of June not only means the arrival of summer, but also the observance of June Dairy Month, which started in 1937 as a promotion to help distribute extra milk when cows started on pasture in the warm summer months. Today, its rich history continues, with communities, companies, and people from all over the country observing June Dairy Month in a variety of ways.

Throughout the month of June, spread the word about the goodness of dairy products and their nutritional significance in a healthy diet.

After reviewing a number of economic benchmarks including cull rates and cull cow prices, Cooperatives Working Together (CWT) announced last week that it will conduct a herd retirement. Bids will be accepted until Friday, June 25. Bid forms can be downloaded here:www.cwt.coop/action/action_herd.html.

“It is our belief that a herd retirement at this time will add to the positive momentum already building and should result in speeding up the milk price recovery already in progress,” said Jerry Kozak, President and CEO of NMPF, which manages CWT.

This is the tenth herd retirement since CWT began operations in the summer of 2003. The most recent was conducted in the fall of 2009. As was the case in 2009’s herd retirement rounds, CWT has no set target for the volume of milk or the number of cows to be removed in this herd retirement.

“With beef prices very strong, and replacement cow and springer prices still relatively low, CWT has determined that it will consider bids up to, but not to exceed, $3.75 per hundredweight,” noted Mr. Kozak. “However, there is no guarantee that a producer who bids at the maximum level will be selected.”

Producers must still bid on a per hundredweight basis, and CWT will continue to review and accept bids beginning from the lowest bids received, moving up toward the maximum level. Farmers whose bids are accepted are paid by CWT for their milk production, and they also retain the beef value of the cows they send to processing.

Meanwhile, CWT’s export assistance program has been aggressive in the past three months since it was reactivated. The program has helped export nearly 16,000 metric tons of cheese to 17 countries.