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Setting the template for U.S. dairy in 2024
By Tony Rice, Trade Policy Manager, National Milk Producers Federation
While still historically strong, U.S. dairy exports this year are down from 2022’s record year, largely because of weaker global demand coupled with rebounded global supply. That doesn’t mean the U.S. isn’t making progress in overseas markets. Despite the headwinds, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) are moving toward boosting exports by successfully fighting against nontariff barriers in key markets and promoting the U.S. dairy industry.
Below are key trade policy efforts that affected the U.S. dairy industry in 2023, just a sample of NMPF and USDEC policy activities.
Working every angle to support trade
NMPF has been active this year across six continents, engaging governments and local organizations. At home, NMPF’s trade policy team filed six sets of confidential comments and seven additional sets of public comments while sending 17 letters to U.S. government agencies on issues ranging from trade negotiations to supply chain challenges.
NMPF and USDEC have also strengthened ties and forged new partnerships with local and regional organizations worldwide to improve dairy consumption while pursuing projects in the United Kingdom, China, Thailand, the Philippines, and Taiwan to boost U.S. dairy competitiveness.
Landmark common names bill introduced
For more than a decade, the European Union has imposed its geographical indication (GI) rules on countries around the world, limiting the ability of U.S. producers of common name cheeses — such as “parmesan” or “feta” — to sell their products worldwide.
Following advocacy led by NMPF, USDEC, and the Consortium for Common Food Names, as well as partners in the food and wine sectors, a bipartisan congressional group introduced the Safeguarding American Value-Added Exports (SAVE) Act in May. The SAVE Act would amend the Agricultural Trade Act of 1978 to explicitly define “common names” and direct USDA to coordinate with the U.S. Trade Representative to proactively negotiate protections for common names.
Securing a critical cheesemaker right in federal court
European interests even tried to extend their GI campaign into the U.S. market when a European dairy organization attempted to trademark “gruyere.” NMPF and its partners fought this shameless attempt to confiscate a common cheese term and secured a final victory in March when a U.S. Court of Appeals found “gruyere” to be a generic term, upholding prior decisions. This final ruling sets a strong precedent for protecting common names and should discourage EU attempts to expropriate generic terms in the United States.
Championing expanded trade following USMCA ruling
NMPF and USDEC coordinated a November 27 industry letter to the President’s Export Council (PEC) supporting recommendations from NMPF member and PEC representative Land O’Lakes to bolster American agricultural trade by expanding market access opportunities and tackling nontariff trade barriers. The Council — the primary advisory committee on international trade — unanimously approved the recommendations on Nov. 29.
The vote followed a November 24 U.S.-Mexico-Canada Agreement (USMCA) dispute panel ruling that allows Canada to continue to restrict its dairy market access. The disappointing ruling followed years of NMPF advocacy on the issue. It is work that continues as NMPF urges the U.S. government to address Canada’s trade distorting practices.
Showcasing U.S. dairy to the world
For first time in 30 years, the World Dairy Summit took place in the United States, offering an opportunity to highlight the U.S. dairy industry’s world-class products, leadership on sustainability, and dedication to innovation to an audience of over 1,240 dairy professionals from more than 55 countries.
Hosted in Chicago in mid-October, NMPF played a leading role, co-chairing the conference and helping design the conference. Over the four days, attendees enjoyed dynamic programming, including opportunities to tour nearby farms.
This column originally appeared in Hoard’s Dairyman Intel on Dec. 11, 2023.
Whole Milk Brings the Nutrition Children Want, and Need
Much has changed about milk consumption since 2012, the year that whole and 2 percent milk varieties were no longer allowed in federal school meal programs. Since then, the body of research supporting the benefits of fuller-fat milk has grown more robust, with research showing that dairy foods at higher fat levels are linked to outcomes such as lower total body mass in kids and lower childhood obesity. Milk is, simply put, a nutrition powerhouse.
Concern over food waste has also grown, with food waste rising when kids are given meals they don’t want to eat. Meanwhile, the gulf between what kids drink at home versus what they’re served in schools – already gaping when the ban took effect — has only widened.
This is the percentage of U.S. fluid milk consumption, excluding flavored varieties, in 2012, and again in 2022. Even at the time the rules changed, keeping whole and 2 percent milk off school meal menus was out of step with what parents gave their own children, with roughly 68 percent of consumption coming from those varieties. That should have been an ominous sign for anyone who ever thought children would flock to milk that didn’t taste like what they had at home.
That disconnect is even worse today.
In 2022, whole and 2 percent milk accounted for roughly 80 percent of consumption – and still, students don’t have access to the same healthy choices they almost certainly have at home. This is a lost opportunity for high-quality, affordable nutrition that kids would gladly consume. And that’s why, when the House of Representatives takes up the Whole Milk for Healthy Kids Act this week, lawmakers should take heed of the choices voters make at the grocery store – decisions that align with the latest scientific research on the benefits of dairy at all fat levels as well as consumer preference.
Having whole and 2 percent milk in school meals will nourish children and reduce food waste. And most importantly, it encourages kids to consume the nutrients they need. Taking the most popular varieties of milk out of meals was a questionable decision in 2012 – it’s indefensible in 2023. NMPF has a call to action urging lawmakers to pass the bill – the bigger the margin, the more pressure on the Senate to make it law. Dairy farmers, as well as parents and educators everywhere, will be watching the House with great interest this week.
And when common sense wins, we know exactly what we’ll drink at the celebration.
NMPF’s Galen Outlines Latest Developments on FMMO Hearing, School Milk Legislation
NMPF’s Chris Galen provides the latest developments for the listeners of Dairy Radio Now on two key priorities for farmers: updating the milk pricing system, and expanding milk options in schools. The USDA’s national hearing on Federal Order modernization continued its review of Class I differentials this week in Indiana, while back in Washington, NMPF is building support for an anticipated vote next week in the House of Representatives on a bill that would expand students’ milk options in schools.
DMC Margin Gains $1 in October
The Dairy Margin Coverage (DMC) Program margin in October saw another significant monthly increase, as the futures markets had been anticipating. The all-milk price rose $0.60/cwt from September to $21.60/cwt., and the October DMC cost was down by $0.40/cwt to $12.16/cwt., mostly due to a lower corn price. The October margin was therefore $9.44/cwt, generating just a 6-cent margin payment for coverage at the $9.50/cwt Tier 1 level.
The dairy and grain futures markets are anticipating the substantial increases the DMC margins have made over the past three months, from $3.52/cwt in July to October’s $9.44/cwt, have hit pause, and the margin will remain at or modestly below the $9.50/cwt level for the next several months.
FMMO Hearing Focuses on Price Surface, May End in February
NMPF witnesses advocated for a fairer Class I price surface dominated testimony in USDA’s Federal Milk Marketing Order hearing, which resumed Nov. 27 in Carmel, IN. That’s critical for its contributions to the hearing record the Agriculture Department is building to craft a proposal to submit to farmers next year.
Economist Peter Vitaliano continued to anchor NMPF’s testimony, joined by multiple co-op experts explaining the effects of a modernized formula taking account of differing cost structures for milk production in various regions of the country. With NMPF’s Proposal #19 taking the bulk of the hearing time over a scheduled two-week period, the team effort highlighted the unanimous co-op unity that’s allowed NMPF to lead the discussion, aided by organizations such as the American Farm Bureau Federation and the Milk Producers Council that are aligned with NMPF positions and show broader farmer and industry support for the proposal.
The hearing itself, however, is becoming significantly delayed, with an original timeline of wrapping up in mid-October now being pushed as late as early February due to venue availability and delays for holidays. That potentially may cost millions of dollars to farmers who would not benefit from the improved component pricing, modernized Class I price surfacing and the return to the “higher of” Class I mover. NMPF continues its thorough preparation for all scenarios.
EPA Calls for Nominations to Animal Agriculture and Water Quality Subcommittee
EPA has opened nominations for the Animal Agriculture and Water Quality Subcommittee, a subcommittee of the Farm, Ranch and Rural Communities Advisory Committee.
The subcommittee goal is to inform agency decisions on how to improve the implementation of the Clean Water Act National Pollutant Discharge Elimination System (NPDES) Concentrated Animal Feeding Operation permitting program to effectively reduce nutrients and other types of water pollutants from animal feeding operations. The subcommittee will help determine whether any revisions to regulations are warranted and whether EPA can otherwise support the efforts of AFO operators to protect water quality.
EPA is looking for a diverse range of qualified candidates, with applications due on Jan. 2, 2024. If interested in serving, please reach out to Miquela Hanselman at mhanselman@nmpf.org. The announcement can be found here.
NMPF Promotes FARM Program Efforts to Track Antibiotic Use in Livestock
NMPF extolled the FARM antibiotic stewardship program in comments filed with the FDA on Oct. 31 as a means of overseeing and promoting the judicious use of antimicrobial products in dairy cattle.
Our comments were filed with FDA related to the Reagan Udall Foundation summary report “Establishing a Draft Framework for a Public-Private Partnership to Support the Tracking of Antimicrobial Use in Food-Producing Animals,” released this summer. The Reagan-Udall Foundation for the Food and Drug Administration is an independent 501(c)(3) organization created by Congress to modernize medical and veterinary product development and oversight.
NMPF comments addressed:
- The role of the National Dairy FARM Program in promoting the judicious and responsible use of antimicrobials by U.S. dairy farmers;
- The important requirements of confidentiality, voluntary participation, and data aggregation for any collection of antimicrobial use data, and;
- Response to specific FDA requests about cost estimates and oversight.
November CWT-Assisted Dairy Export Sales Totaled 5.4 Million Pounds
CWT member cooperatives secured 43 contracts in November, adding 4.6 million pounds of American-type cheeses, 231,000 pounds of butter, and 525,000 pounds of cream cheese to CWT-assisted sales in 2023. In milk equivalent, this is equal to 52.1 million pounds of milk on a milkfat basis. These products will go to customers in Asia and Middle East-North Africa, and will be shipped from November 2023 through February 2024.
CWT-assisted 2023 dairy product sales contracts year-to-date total 46.1 million pounds of American-type cheese, 1.1 million pounds of butter, 26,000 pounds of anhydrous milkfat, 8.3 million pounds of cream cheese and 39 million pounds of whole milk powder. This brings the total milk equivalent for the year to 801.6 million pounds on a milkfat basis.
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 Plays Leading Role at U.S.-China Ag Forum
Jaime Castaneda, NMPF Executive Vice President for Policy Development and Strategy, traveled to Beijing and Shanghai on Nov. 1-7 to promote the competitiveness and sustainability of the U.S. dairy industry at the U.S.-China Agricultural Trade Cooperation Forum.
Castaneda began the trip meeting with Chinese trade associations to discuss the country’s high agricultural tariffs and other challenges faced by U.S. companies. He then spoke at the forum alongside representatives from other U.S. commodity groups and met with U.S. and Chinese government officials to discuss barriers to trade—including high tariffs, geographical indications restrictions and dairy facility listing requirements.
Castaneda also presented at the Global Dairy Forum hosted by the China International Import Expo, the world’s largest import-themed national-level conference. The event featured a panel discussion with other agricultural organizations and a group media interview. Throughout all discussions Castaneda emphasized that the U.S. dairy industry is committed to the Chinese market and advocated for better trade conditions that will allow American exporters to compete and succeed.
NMPF Submits Comments on Dietary Guidelines Protocols
NMPF submitted comments on Nov. 17 on recently released Dietary Guidelines for Americans (DGA) protocols that emphasize the need to include the newer science on dairy fats in their review and to shorten the duration of time required for randomized controlled trial studies.
NMPF comments focused on protocols for two scientific questions: What is the relationship between food sources of saturated fat consumed and risk of cardiovascular disease, and what is the relationship between dietary patterns consumed and risk of cardiovascular disease?
On the first question, NMPF pointed to the complexity of dairy fat and the growing body of evidence that supports dairy consumption, regardless of fat content, does not increase cardiovascular disease. On the latter question, NMPF pushed for a shorter duration to be used for randomized controlled trials. Changes in blood lipid levels in randomized controlled trials can be seen in 3 weeks which is much shorter than the 12 proposed by the committee in this protocol.
These protocols will, when final, inform the conduct of systematic reviews and food pattern modeling that will form the science base of the 2025 Dietary Guidelines for Americans. The committee has released the protocols in waves as they are developed. The full comments can be found here.
NMPF Champions President’s Export Council Recommendations after Canada Disappointment
The President’s Export Council approved an agricultural trade proposal introduced by NMPF member Land O’Lakes at a Nov. 29 council meeting. The unanimous decision followed a Nov. 27 letter of support coordinated by NMPF and the U.S. Dairy Export Council (USDEC) and signed by 35 leading agricultural organizations.
The approved proposal calls on the administration to diversify the U.S. agricultural supply chain, establish a robust agricultural trade agenda, enforce existing trade agreements, and lead on international climate initiatives.
The President’s Export Council is the primary White House advisory committee on international trade. It includes a broad mix of groups, with Land O’Lakes being the sole agricultural voice. To build support for the recommendations, the letter highlighted the importance of agricultural trade for the U.S. economy and the indispensable role that American agriculture plays in achieving global food security.
With a projected food and agriculture trade deficit of $17 billion for 2023, the letter calls on the administration to implement the recommendations and provide the U.S food and agriculture industry an opportunity to meet growing international demand.
The need to prioritize proper enforcement of trade agreements became especially timely after a U.S.-Mexico-Canada Agreement (USMCA) dispute panel ruling issued Nov. 24 that will allow Canada to continue to restrict market access for U.S. dairy products, weakening the agreement’s principles.
The ruling follows nearly two years of NMPF advocacy and collaboration with the U.S. Trade Representative and U.S. Department of Agriculture aimed at enforcing USMCA’s dairy provisions.
An earlier panel ruled in January 2022 that Canada had improperly restricted access for U.S. dairy products. In response, Canada made inadequate changes to its dairy tariff rate quota system, resulting in a second challenge by the United States. The decision means Canada is not obligated to make further changes, a disappointment to U.S. dairy farmers and exporters.
“It is profoundly disappointing that the dispute settlement panel has ruled in favor of obstruction of trade rather than trade facilitation,” said Jim Mulhern, president and CEO of NMPF. “Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector. We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated.”
Despite the discouraging result, NMPF will continue to work with USTR and USDA to address Canada’s ongoing practices to depress U.S. imports and distort dairy trade.
