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CWT Task Force Approves Recommendations from Expert Working Groups

Posted on by Theresa Sweeney

The task force of farmers and cooperative leaders evaluating Cooperatives Working Together’s future on June 24 approved a series of improvements for the self-help program when it is renewed after 2024.

Following an extensive review of CWT’s current operations and an evaluation of the potential value of an expanded export assistance program, the task force endorsed several detailed proposals developed and refined by three working groups of cooperative staff experts in the areas of Product Mix; Bid Process Adjustments; and Market Development.

The task force’s decision will now be reviewed July 9 by the NMPF Executive Committee, and later by the full NMPF Board of Directors. The recommendations would then become part of the next CWT program cycle that begins Jan. 1.

The working group recommendations include updates to or added resources within the following program areas:

  • All cheese varieties will be eligible for CWT’s price gap support
  • CWT will create targeted pilot programs to address tariff coverage for value-added skim milk powder sales to Southeast Asia, and a target market premium for cheese sales to Central America & the Caribbean
  • CWT will offer fat-equivalent support for the following products: ESL/aseptic fluid milk; evaporated/condensed milk; and ice cream
  • CWT will increase its operating program bid flexibility to extend eligible delivery periods to 12 months, and remove volume limits on a trial basis
  • CWT staff will provide increased insight on bid acceptance parameters, sharing a brief summary with weekly offers explaining shifts in support levels; and
  • CWT will create an advisory group to provide strategic direction and market development support, with a Phase I emphasis on pre-competitive support that provides opportunities for all cooperatives to participate.

The task force met earlier at NMPF’s June Board meeting to receive a preview of working group activity and to review a recent assessment of CWT’s impact on milk prices.

During its meeting, the Board of Directors approved five objectives to pursue as part of the renewal effort for the CWT program after 2024. They include:

  • CWT should seek to achieve the highest participation of cooperatives in the export assistance program
  • The contribution made to CWT should be at a level that maximizes the benefit back to dairy producer milk prices, not to exceed 4 cents per cwt.
  • CWT’s export assistance program should promote consistent supplies of U.S. dairy products into foreign markets. Assistance offered should create competitively landed values for U.S. dairy products that will impact milk prices paid to U.S. dairy producers
  • CWT should enhance program operations (e.g., processes and program reviews) including establishment of an operating committee to help direct those functions; and
  • CWT should explore market development opportunities within its overall program budget structure.

June CWT-Assisted Export Sales Top 5.4 Million Pounds

CWT member cooperatives secured 56 contracts in June, adding 5.4 million pounds of product to CWT-assisted sales in 2024, an amount equal to 47.8 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, Middle East-North Africa, Oceania and South America and will be shipped from June through December 2024.

Exporting dairy products is critical to the viability of dairy farmers and their cooperatives across the country. Whether or not a cooperative is actively engaged in exporting cheese, butter, anhydrous milkfat, cream cheese, or whole milk powder, moving products into world markets is essential. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome U.S. dairy’s trade disadvantages.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

NMPF Board Calls for Milk-Pricing Fairness, Leads on H5N1 Response

Posted on by Theresa Sweeney

NMPF leadership expressed confidence that farmers would soon see a fairer federal system for milk pricing and highlighted dairy farmers’ robust response to H5N1 influenza in dairy cattle at the organization’s Board of Directors meeting June 4-5.

“Even with all the stresses on the farm, there’s still not a better industry,” said Randy Mooney, a dairy farmer from Rogersville, MO, and a member of the Dairy Farmers of America cooperative, in remarks at the meeting. “I’m proud of where we’re at, producing high quality, nutritious food for the consumer. It’s amazing how dairy farmers do it.”

Board members spent two days reviewing recent policy developments, including Federal Milk Marketing Order deliberations, the progress of the 2024 Farm Bill, and up-to-date information on H5N1, which has led to significant federal and farmer investments in biosecurity and testing. NMPF Chief Science Officer Dr. Jamie Jonker led discussion on the issue.

The meeting was held with NMPF’s annual Young Cooperators fly-in (see separate story), in which young dairy farmers meet with lawmakers to advocate for the industry. Dairy farmers urged passage of a Farm Bill, expanded market access for U.S. dairy products and federal action toward integrity in milk labeling, restricting the use of dairy terms to animal products in line with Food and Drug Administration standards.

The Board also examined potential improvements to the NMPF-led Cooperatives Working Together program (see separate story), the 21-year-old farmer self-help initiative that is up for renewal after 2024. A member task force has been weighing a range of options to expand the use of CWT’s export assistance program. The NMPF Board approved a series of five directional goals for CWT as it considers the program’s parameters in 2025 and beyond.

The board also elected three new members: Dave Peterson of Minnesota, representing Associated Milk Producers, Inc.; Alex Peterson of Missouri, representing Dairy Farmers of America; and Mike Schoneveld of Washington, representing Darigold.

FMMO Recommendations Build on NMPF Success

Posted on by Theresa Sweeney

USDA’s proposed plan for Federal Milk Marketing Order (FMMO) modernization release July 1 reflected years of painstaking NMPF efforts in crafting a comprehensive plan and building consensus across dairy, leading to recommendations that will set dairy up for success.

The proposal, which is open for comment through August, comes after USDA examined hearing briefs submitted by participants in 2023’s record-long federal order hearing. NMPF again led with its comprehensive approach to improved milk pricing, offering the department detailed proposals that worked to ensure benefits for farms in all regions, of all sizes.

“NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended FMMO modernization plan,” NMPF President and CEO Gregg Doud said in a statement the day the plan was released.

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years,” Doud said. “We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”

Doud elaborated on USDA’s plan, and its relationship to proposals by NMPF and others, in NMPF’s monthly CEO’s Corner column.

The proposal is now in a 60-day comment period. NMPF’s member-led task force on FMMO is meeting July 11 to discuss the plan and offer member input, while the following day NMPF’s Co-op Communicators Committee is discussing publicity and farmer-communications efforts to educate the industry on the proposal. After USDA reviews public comments, a final plan will be put to a vote of producers, likely in the early months of 2025.

Dairy Farmers See Advances in USDA’s FMMO Plan, NMPF’s Bjerga Says

Posted on by Alan Bjerga

Dairy farmers have reasons to be pleased with the draft proposal for Federal Milk Marketing Order modernization, NMPF Executive Vice President Alan Bjerga said in an interview with Dairy Radio Now. That said, the process isn’t complete. Farmers still have a 60-day comment period and a final producer vote before any final proposal is implemented. NMPF is ready to lead, as it has throughout, Bjerga said.

Co-op Leadership Brings FMMO Modernization Success

Posted on by Theresa Sweeney

Well done, co-ops. Your leadership is shaping a better future for dairy.

On Monday, an effort that took more than three years, more than 200 meetings, 49 days of a record-long Federal Order hearing, and countless hours of analysis and discussion were reflected in a recommended USDA plan for Federal Milk Marketing Order modernization that incorporates much of the comprehensive approach to improvements we advocated throughout.

Yes, not every detail is exactly as we would have had it – we always knew that would be the case. And USDA’s plan isn’t set in stone – we take very seriously the comment period we will soon be in and plan a detailed response to this proposal. Our FMMO task force is meeting to discuss the plan next week; even as we speak, our staff and cooperative experts are putting pen to paper to better understand how various parts of the USDA plan will interact to affect dairy farmers and the cooperatives they own, as well as the broader industry.

That’s all to say our work is far from over. But Monday’s decision was arguably the critical milestone in this process. And this industry – led by the member-owners of the nation’s leading dairy cooperatives – has many reasons to be heartened by the improvements USDA has proposed to the nation’s Federal Milk Marketing Order system.

A few notes on what USDA offered, and how it compares to what we’ve advocated.

  • On the “higher of” Class I mover. Noting that dairy farmers have lost roughly $1.3 billion in revenue since the mover was changed in 2019, we fought for a return to the higher-of in the name of fairness and real-time market signals. Processors proposed a different formula, citing its importance to risk management, especially for extended shelf-life milk. Recognizing the need to restore orderly milk marketing, USDA decided to go back to the higher-of, with an accommodation for extended shelf-life milk, thus granting NMPF’s request for the vast majority of U.S. fluid milk. USDA’s solution is, frankly, as innovative as it is fair – a classic case of two sides not getting all that everyone wanted, but everyone getting what they most needed.
  • On make allowances. USDA’s numbers for an adjustment were higher than what NMPF proposed, though not greatly out of line with our analysis. And USDA denied the processors’ request to automatically increase the numbers over the next three years, which NMPF opposed. Agreement was nearly universal that make allowances, which hadn’t been revised since 2000, needed to change. The next step now will be seeking better plant-cost data through mandatory surveys via legislation, a step that’s been included in every significant congressional farm bill plan that’s been proposed.
  • On increasing the Class price skim milk component factors. Again, USDA’s plan takes a direction similar to NMPF’s, though it doesn’t include the automatic update provision we proposed.
  • On the Class I differentials. In many cases, USDA’s county-level calculations matched our own. In many others, the calculations deviated minimally. And in a few others, the differences were significant. Meanwhile, USDA denied a processor proposal to zero out the base differential, which would have significantly reduced every differential in the country and set the Class I differentials to zero at some locations in the West. We will be examining USDA’s methodology to better understand its calculations, reflecting the best data and our members’ input.
  • On removing barrel cheese from the protein price formula. USDA accepted NMPF’s proposal without modification.

As has always been the case, member leadership is what has made this process work for dairy. The conversation is continuing, and the comprehensive, consensus-driven approach that has been our hallmark will also continue.

Once Monday’s proposal is officially published in the Federal Register, we and other stakeholders will have 60 days to submit comments to USDA. A final producer vote is projected for early 2025. Again, thank you to all the cooperative leadership for what has been accomplished so far, and for the good work for dairy that will continue. And with that, happy Independence Day. We’ll be back next week for the second half of an already successful year.

Gregg Doud

President & CEO, NMPF

 

NMPF Statement on USDA’s Recommended FMMO Modernization Plan

Posted on by Rachel Ravencraft

From NMPF President & CEO Gregg Doud:

“Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan.  

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years. We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”  

 

NMPF Makes Progress on Future Direction of CWT Program

Posted on by Chris Galen

NMPF’s Senior Vice President Chris Galen explains for Dairy Radio Now listeners the series of changes that NMPF is reviewing to improve the effectiveness of its self-help program, Cooperatives Working Together. A member task force has been assessing ideas to revamp the program and expand its export activities starting in 2025.

Methane-Reducing Feed Additive Creates Revenue Streams

Posted on by Theresa Sweeney

With FDA’s review complete, Elanco’s Bovaer is getting ready for the U.S. marketplace. But the methane-reducing feed additive’s success will be as much about economic as environmental sustainability, said Katie Cook, Elanco’s Vice President of Livestock Sustainability and Farm Animal Marketing, in a Dairy Defined podcast released today.

“The biggest thing, and the thing that’s most important, is not only are we making sure that we’re providing an environmental sustainability practice to our producers, but most importantly we’re providing them with additional profitability,” Cook said. “It’s a key tool as we think about telling our dairy story and the value that our dairy products bring to consumers. But more importantly, as a producer, it’s also giving you an additional revenue stream as we think about the economic viability of our farms’ longer term.”

You can find and subscribe to the Dairy Defined podcast on Apple Podcasts and Spotify under the podcast name “Dairy Defined.”

Media outlets may use clips from the podcast on the condition of attribution to the National Milk Producers Federation.

NMPF’s Bjerga on H5N1, Farm Bill

Posted on by Alan Bjerga

NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks on RFD-TV about dairy farmer challenges and their broader relationship with agriculture, ranging from H5N1 in dairy cattle to discussions of the 2024 Farm Bill in Washington. Success across all fronts will require communication and collaboration across agricultural sectors, he said. Meanwhile, NMPF is optimistic regarding the future of milk pricing, with a USDA plan on Federal Milk Marketing Order modernization expected within the next few weeks.

https://www.rfdtv.com/from-farm-bill-to-hpai-what-is-dairy-farmer-sentiment-looking-like

 

Work Continues to Strengthen Supply Chains

Posted on by Alan Bjerga

Tony Rice Headshot

By Tony Rice, Director, Trade Policy, National Milk Producers Federation

America’s dairy producers rely on a global supply chain that is reliable, transparent, and predictable to thrive in the competitive global dairy market — a reality made apparent during the COVID-19 pandemic, when supply chain snarls created headaches for dairy and the entire global economy.

But while many pandemic-era export issues have eased, an emerging threat to secure, reliable U.S. rail shipping is worsening.

Organized crime groups are increasingly breaking into shipping containers headed from the Midwest to West Coast ports in search of high-value consumer products. That’s creating serious food safety issues and forcing exporters to return the cargo at a financial loss, with limited recourse for insurance claims.

The National Milk Producers Federation (NMPF), in collaboration with the U.S. Dairy Export Council (USDEC), is tackling the issue on two fronts. Exporters experiencing break-ins are being connected with relevant railroads to determine best practices to mitigate theft, including lock and tracking recommendations. Meanwhile, NMPF is engaged with the Federal Bureau of Investigations, Surface Transportation Board, Homeland Security Investigations, and rail police forces to identify options to heighten policing efforts and best practices for reporting break-ins. NMPF and USDEC are also pursuing new appropriations funding for a Homeland Security task force dedicated to addressing supply chain theft, with language specific to agricultural cargo.

Encouragingly, the Biden Administration is implementing new guardrails to prevent dairy exporters from having to deal with the sorts of record costs, unprecedented fees, and unpredictable shipping schedules that occurred during the pandemic.

That work started two years ago when NMPF fought hard to help shape and pass into law the Ocean Shipping Reform Act of 2022, which mitigated unfair and harmful carrier practices. The law’s far-reaching nature has resulted in a lengthy and deliberative implementation process — one to which NMPF has dedicated almost two years of engagement to ensure the rules are fair for dairy exporters.

That work paid off when the Federal Maritime Commission’s final rule on detention and demurrage billing practices took effect May 28. The rule reflects official recommendations from NMPF and USDEC, including important clarity on who should be billed, the time frames for billing, and a streamlined dispute process.

In tandem with upcoming rulemaking from the maritime commission on what determines a carrier’s unreasonable refusal to deal or negotiate, these statutes will bring much-needed stability to what has been a difficult shipping market to navigate. These developments are especially timely given the potential disruptions that a full reopening of the Red Sea would have on sailing schedules, as well as ongoing East Coast port labor negotiations.

While there are many moving pieces in shipping legislation, NMPF is engaging with Congress on two critical new bills. The bipartisan Ocean Shipping Reform Implementation Act would update supply chain data standards, and the Ocean Carrier Rail Storage Charges Act is a bill to clarify jurisdictional gaps between the Surface Transportation Board and the Federal Maritime Commission regarding fees oversight.

As dairy exporters navigate uncertain waters, NMPF and USDEC remain dedicated to supporting a resilient and secure supply chain. The work continues to ensure that U.S. dairy exporters continue to thrive in a dynamic global market.

This column originally appeared in Hoard’s Dairyman Intel on June 13, 2024.

NMPF Statement on Senate Ag GOP Farm Bill Framework

Posted on by Theresa Sweeney

From Gregg Doud, President and CEO, National Milk Producers Federation:

“Dairy farmers and their cooperatives commend Senate Agriculture Committee Ranking Member John Boozman, R-AR, for issuing a strong farm bill framework that marks another important step toward enacting a bipartisan farm bill into law this year. Ranking Member Boozman’s framework includes numerous dairy priorities, such as reauthorizing and updating the vital Dairy Margin Coverage safety net and advancing NMPF-led bipartisan bills to spur approval of innovative feed ingredients, protect the use of common food names, and boost consumption of nutritious milk among our nation’s youth.

“A five-year farm bill provides producers with certainty as they manage their risk and resources and feed consumers at home and abroad. We stand ready to continue working with House and Senate Ag leaders in both parties to complete the job this year.”