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Milk Pricing Modernization Now at a Pivotal Point

Posted on by Theresa Sweeney

After more than 150 meetings of our dairy farmer members and co-op technical experts. After extensive outreach and consultation with national organizations, including the American Farm Bureau Federation and state and regional dairy associations. And after multiple unanimous votes at all levels of our organization, NMPF this month will submit to USDA our proposal for the first significant update of the Federal Milk Marketing Order system since 2000.

All those meetings, as well as the preparation and examination that accompanies them, add up to many hours and an incredible amount of analysis on Federal Milk Marketing Orders. But by doing the heavy lifting – one that understands and accounts for the reality that a change to one part of the system affects other important parts — we at the National Milk Producers Federation feel confident in the comprehensive proposal our Board of Directors unanimously approved last month.

While the process of a USDA FMMO hearing and a referendum vote by producers will take some time, we’ve already come a long way toward achieving improvements to milk pricing that will modernize this important program. Through our proposal, dairy farmers have found common ground, and we believe the broader dairy sector can rally around these efforts to strengthen our industry. Important components of our proposal include:

  • A return to the “higher of” Class I mover that’s fairer for farmers than the current system that seemed reasonable when it was included in the 2018 Farm Bill, but which the COVID-19 pandemic showed exposes farmers to disproportionate price risks during market disruptions;
  • Updated milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas, recognizing that these components have increased in the U.S. farm milk supply since the current formulas were established;
  • Specific make allowance adjustment numbers for the four products contained in the Class III/IV pricing formulas – cheese, dry whey, butter and nonfat dry milk – to help address increases in processing costs, as well as creating a mechanism to keep those calculations up-to-date; and
  • Updated Class I differential prices that reflect changes in the cost of delivering bulk milk to fluid processing plants.

This is difficult work, and at times it’s involved difficult conversations. But the alignment we’ve achieved among farmers, cooperatives and the cooperative-owned processing community has been one of the most critical, and gratifying, parts of the process.

An important principle we’ve followed is that, while building consensus, we’ve recognized that we can’t craft solutions that are one-size-fits all, nor can any proposal succeed when it’s narrowly tailored to what amounts to one-size-fits-one. What do I mean by that? As we quickly learned when we first started looking at federal reform in 2021 with a re-examination of the Class I Mover, a narrowly targeted approach doesn’t work when there are other major imbalances in the system.

In the end, we didn’t pursue Class I alone because we found serious modernization required a serious look at all aspects of federal milk marketing orders and their complex interactions. Now that we’ve done exactly that, we are hoping the industry can broadly rally around the conclusions at which we’ve painstakingly arrived. We owe it to this industry – and especially to the farmers who are at the heart of it – an honest, deliberative, thorough approach that creates opportunities for everyone to thrive.

Our proposal has come after discussions that reflect the great diversity of this industry. We’ve been transparent, driven by an interest in the industry’s overall success, and we aren’t afraid to lay our cards on the table with specific numbers and forecasted impacts. On the make allowance, for example, the majority of our farmers are members of cooperatives that own dairy processing plants; therefore, they have a vested interest in setting the make allowance at the right level — from both the producer and processor perspective. That balance, which runs throughout our proposal, is what is needed to modernize this important program.

After leading the most comprehensive discussion of federal orders this industry’s seen in the past quarter-century, we’re confident we’ve crafted solutions that all of dairy should get behind – with the unanimous approval our board gave to it in March as evidence of our hard work and dedication to consensus. We are heartened by the strong support among dairy farmers from coast to coast for this proposal. A comprehensive, thoughtful, measured, farmer-centric approach to modernizing the program is exactly what USDA should consider as the basis for a national federal order hearing, and we are proud to offer it.

To better understand our proposal, please explore our website at www.nmpf.org. We of course encourage feedback and any helpful comments that should be considered when finalizing our submission, which is currently under way. To reach out to us with questions as we move toward a federal hearing, feel free to write us at info@nmpf.org.

We’re looking forward to advancing this industry in collaboration and partnership. As the national organization representing most of the dairy producers who, in the end, are the ones voting on any changes to the FMMO system, we take our responsibilities seriously. And we look forward to discussing and advocating for our proposal as this critical next phase begins.

Jim Mulhern

President & CEO, NMPF

 

 

Be It Bank or Beverage, Choices Matter

Posted on by Theresa Sweeney

While we’ll leave fuller explanations for the turmoil financial institutions such as Silicon Valley Bank, Signature Bank and others to those with more expertise, it’s clear that good-old-fashioned poor choices played a role.

It turns out that betting heavily on low-interest government debt when that government is hiking interest rates to fight inflation might not work well; nor is overloading your portfolio on cryptocurrency. And given that propensity for bad bets, it isn’t shocking to see what Silicon Valley Bank had to say about plant and cell-based meat-and-dairy alternatives in this 2019 analysts’ report, which mixed tired tropes of the ills of animal agriculture with boosterism for the future of dairy ripoffs like Ripple and Perfect Day as well as alt-protein companies like Beyond Meat, which “has wowed consumers with its realistic taste and meat-like appearance,” according to the authors.

“At Silicon Valley Bank, we embrace the future of the food industry. We have deep expertise working with foodtech companies and strong ties to the Silicon Valley ecosystem,” the analysts wrote. “If you are working in this space and would like to learn more about SVB’s role, please reach out to chat.”

Of course, we know that that turned out. Beyond Meat stock is now considered a “recipe for disaster” due in part because of its wildly self-inflated expectations. Plant-based beverage sales fell last year. And Silicon Valley Bank? It’s now part of First Citizens Bank & Trust Company after being unloaded by the Federal Deposit Insurance Corporation, which took over the institution upon Silicon Valley’s failure.

So yes, perhaps it’s time to “reach out to chat.” About how venture capital investors have thrown good money after bad at products of questionable quality that are more about marketing pitch than actual market need. About how banks seeking a quick buck put depositors at risk with poor investment choices, which include those products. And about how high-quality, proven nutrition, with a product that’s been in demand for millennia, might, unsurprisingly, be the best investment anyone could make – both for consumers and for investors who’d happily have a little less drama in their financial futures.

Dairy, like every other industry, has its challenges, which it’s dedicated to meet. But with record exports and the highest U.S. per-capita consumption since 1959, it’s a safe bet to say its future is bright. That’s what you get with real quality.

You can bank on it.

IDF World Dairy Summit Returns to the United States, Registration Open

Posted on by Theresa Sweeney

Registration opens today for the International Dairy Federation (IDF) World Dairy Summit 2023 to be held October 16-19 in Chicago, Illinois.

The Summit is returning to the United States for the first time in 30 years and is the world’s largest annual global dairy conference. Under the theme “BE Dairy…Boundless Potential and Endless Possibilities,” the Summit’s immersive program will bring together dairy leaders and renowned experts to address dairy’s most significant opportunities in a dynamic global marketplace.

Hosted by the United States National Committee of the IDF (US-IDF), the IDF World Dairy Summit is expected to attract more than 1000 participants and expert speakers from around the world, including industry leaders, scientists, and producers. The Summit’s expo will showcase dairy companies, suppliers, dairy trade organizations, and products while 23+ thematic sessions offer engaging content from health and nutrition to sustainable production, consumer expectations, policy and innovation.

Set against the backdrop of beautiful Chicago, the best of American food, arts, music, and culture will be on full display, and participants will have easy access to some of America’s most famed dairy regions. Attendees will have the option to register for half-day, one and two-day farm and technical tours showcasing the diversity of U.S. dairy farms, research centers, processing facilities and retail in America’s heartland states of Michigan, Wisconsin, Illinois and Indiana.

Register online at www.idfwds2023.com by June 30 to receive a discounted rate. Full IDF World Dairy Summit 2023 details and program available here. Sponsorship opportunities are available.

Credentialed members of the news media should contact heather.oldani@dairy.org to express interest in registering. News media must present credentials to qualify for registration and special rates.

CWT Assists with 419,000 Pounds of Dairy Product Export Sales

Posted on by Khadija Gibson-White

ARLINGTON, VA – Cooperatives Working Together (CWT) member cooperatives accepted six offers of export assistance from CWT that helped them capture sales contracts for 251,000 pounds (114 MT) of American-type cheese and 168,000 pounds (76 MT) of butter. The product is going to customers in Asia, Central America, the Caribbean and Middle East-North Africa, and will be delivered from March through July 2023.

CWT-assisted member cooperative year-to-date export sales total 12.6 million pounds of American-type cheeses, 550,000 pounds of butter (82% milkfat), 17.8 million pounds of whole milk powder and 2.0 million pounds of cream cheese. The products are going to 18 countries in five regions. These sales are the equivalent of 274.8 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and cooperatives by fostering the competitiveness of US dairy products in the global marketplace and helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has helped significantly expand the total demand for U.S. dairy products and the demand for U.S. farm milk that produces those products.

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

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The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins.

NMPF’s Bjerga on Fair Nutrition Access in Federal Programs

Posted on by Alan Bjerga

 

NMPF Senior Vice President of Communications Alan Bjerga talks about the importance of equal nutrition for all — and how milk in both regular and lactose-free options can assist in that goal — is a bedrock principle in federal nutrition programs. Bjerga also updates on the latest in NMPF’s comment campaign regarding the FDA’s draft guidance for proper terminology in plant-based beverages, discussing the topics in an interview with RFD-TV.

If You Want Equity, You Want Milk

Posted on by Theresa Sweeney

Faced with demand that’s found its ceiling and with its sustainability and health claims coming increasingly under question, the plant-based imitation milk marketing machine is now coming for your children. Despite the critical importance of dairy nutrients to childhood development, nut-based beverage purveyors are pushing for their white-colored sugar water to have greater access to federal nutrition programs, all in the name of “equity” – an emphasis on fairness and justice that’s become an important paradigm in policy debates.

But equity, in food, requires a quality product and equality in access. And for that, milk, a natural product offered with both regular and lactose-free options, remains by far the best solution. Equity in food policy means making sure that everyone has access to the nutrients they need to thrive. The federal school lunch and breakfast programs, the WIC Program, and other initiatives are meant to ensure nutrition for all.

Lactose intolerance is a concern for populations that have higher rates of difficulty absorbing lactose, particularly African American, Asian American, American Indian and Hispanic/Latino populations. That, unfortunately, is now being used by dairy’s opponents to tout their inferior nutrition as a solution to the problem lactose intolerance.

The latest ploy among the vegan, animal rights and plant-based lobbies is to suddenly paint themselves as social justice crusaders, demanding that their nutritionally inferior (which, even when fortified, remain unequal to dairy’s unique nutritional package) products should now be treated as legitimate milk substitutes in federal nutrition programs – all the while conveniently forgetting that a widely available alternative already exists that circumvents lactose intolerance and delivers the exact same nutritional profile as milk. Because that’s what it is.

The lactose-free milk moment has arrived.

To note: This year, at its current pace, lactose-free milk consumption is set to overtake almond beverages – the most popular plant-based category — in overall U.S. sales volume. Its total consumption is already more than half that of the entire plant-based sector, and it’s four times as much as oat drink, the current darling for aficionados of heavily processed, artificially colored liquids. The rise of low- and no-lactose milk comes even though Starbuck’s doesn’t serve it, many consumers unfortunately aren’t even sure that it comes from a cow, and it doesn’t get nearly the attention it deserves as a solution to lactose intolerance – because the plant-based beverage-makers who shout loudest care more about their marketing pitch and ideologies than in actual nutrition solutions.

Imagine how equitable a solution it would be for lactose-intolerant populations if nutrition programs touted lactose-free milk as aggressively as plant-based lobbyists tout their artificially concocted, nutritionally inferior beverages. And when you think of it that way, it’s an insult to the spirit of equity to tell lactose-intolerant children that they should receive nutrition that’s unequal to what others receive.

These are sensitive topics, but for an honest discussion, sometimes it’s important to “go there.” Fortunately, we’re seeing encouraging signs of progress, with recent USDA proposals beginning to acknowledge the need for greater lactose-free dairy access in federal nutrition programs.

But to get the most equitable nutrition policy, it’s important to point out what equity would look like. It doesn’t mean self-serving arguments designed to goose sales for the declining plant-based beverage industry. It doesn’t mean allowing their advocates to cynically tout a “solution” that would worsen nutrition outcomes. It means making sure that everyone – especially children – gets the best available nutrition, so that everyone has an opportunity to thrive.

And that means milk. We’re more than able to provide that solution.

CWT Assists with 1.6 Million Pounds of Dairy Product Export Sales

Posted on by Khadija Gibson-White

ARLINGTON, VA – Cooperatives Working Together (CWT) member cooperatives accepted 19 offers of export assistance from CWT that helped them capture sales contracts for 1.5 million pounds (686 MT) of American-type cheese and 77,000 pounds (35 MT) of cream cheese. The product is going to customers in Asia and Middle East-North Africa and will be delivered from March through September 2023.

CWT-assisted member cooperative year-to-date export sales total 12.4 million pounds of American-type cheeses, 383,000 pounds of butter (82% milkfat), 17.8 million pounds of whole milk powder and 2.0 million pounds of cream cheese. The products are going to 17 countries in five regions. These sales are the equivalent of 268.7 million pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and cooperatives by fostering the competitiveness of US dairy products in the global marketplace and helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has helped significantly expand the total demand for U.S. dairy products and the demand for U.S. farm milk that produces those products.

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

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The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins.

FDA Guidance an Incomplete Win for Dairy

Posted on by Alan Bjerga
By Alan Bjerga, Senior Vice President, Communications, National Milk Producers Federation 

FDA’s split-decision draft guidance on plant-based beverage labeling offered last month gave everyone something to be mad about. For dairy producers and consumers, the fact the agency would allow plant-based beverages to call themselves “milk” is unacceptable. For plant-based beverage manufacturers, guidance that they should disclose their nutritional inferiorities prominently on the packaging makes using a dairy term much less attractive. And even though the guidance is voluntary — and thus in theory could be ignored — companies that want to stay on FDA’s good side and avoid being called out on their noncompliance by dairy’s defenders have the incentive to either follow the guidance or sidestep the issue completely by avoiding dairy terms altogether. Either way, consumers win.That makes dairy the net winner in the decision, however incomplete it may be. Crucially, FDA is accepting the National Milk Producers Federation’s core argument — that ample consumer research shows that consumers are confused over the nutritional content of plant-based beverages and the need for labeling. And that provides a great opportunity for dairy and consumers to make progress in achieving the logical outcome of that acceptance — ending altogether the mislabeling of plant-based beverages that’s plagued the U.S. market for more than four decades.

It’s much easier to win a debate when the premise of the debate is set on your own terms. Decades of calling on the FDA to enforce its own standard of identity for milk mostly fell on deaf ears. Even if dairy’s argument was clearly correct, FDA could choose to do nothing about it, and doing nothing was a task in which FDA excelled.

As plant-based beverages proliferated and it became clear that stolen dairy terms encouraged consumers to assume an incorrect nutritional profile for these products, nutritional confusion among consumers has become a public health issue the agency simply can’t ignore. And to its credit, FDA’s guidance, for all its flaws, is an attempt to seriously address a problem it began to acknowledge only in the past half-decade.

But now that the agency has acknowledged the problems and offered guidance, it will be critical to keep up the pressure to follow this progress to a successful conclusion. Consumers, dairy producers, and their allies need to make sure FDA’s approach isn’t weakened, and then to make sure that now that our analysis of the problem has been accepted, the logical solution of that analysis – limiting dairy terms only to dairy products – is the eventual outcome.

On the first point, FDA has opened its guidance up for public comment. NMPF has set up its own simple guide on how to submit a comment. Through this form, members of the public can either personalize their own message to FDA or have access to resources that will help them write their own comments from scratch.

On the second point, we are advocating for congressional passage of the DAIRY PRIDE Act, which has been introduced in the U.S. Senate and House of Representatives. The legislation would require FDA to enforce its standard of identity for milk, solving the problem at its root.

The fight for labeling integrity has taken patience and persistence. But progress is real, and with momentum on our side, we can make a real difference in the marketplace for public health. Please consider joining us in this effort.

This column originally appeared in Hoard’s Dairyman Intel on March 20, 2023.

NMPF’s Bjerga on Plant-Based vs. Lab-Based Labeling Concerns

Posted on by Alan Bjerga

 

NMPF Senior Vice President of Communications Alan Bjerga discusses the differing challenges of plant-based beverages that use dairy terms vs. lab-created dairy alternatives using a replicated dairy protein, in an interview with WEKZ radio in Janesville, WI. While plant-based beverages have widely divergent nutritional profiles, lab-based dairy does incorporate actual dairy — but doesn’t duplicate the complex interactions and processes that create a true dairy product.

On Labeling, Keep Your Eye on the Carton

Posted on by Theresa Sweeney

FDA has finally offered its draft guidance on the “Labeling of Plant-Based (Nutritionally Inferior and Misleading) Milk Alternatives.” So now what?

Pay attention to this:

This is from FDA’s draft guidance, showing labeling best practices for plant-based manufacturers. The guidance itself would allow plant-based beverage manufacturers to keep using “milk” on their labeling, but only if – and this is a huge “if” – they include disclosures like the ones above specifying nutritional differences. That isn’t enough to truly protect consumers, but it’s a start. Even more importantly, the agency has accepted the reality of consumer confusion over nutritional equivalence, the main argument dairy and its allies have been making for years. With that premise acknowledged and accepted, the logical conclusion –end the confusion by getting dairy terms off the labels – becomes much easier to achieve.

The draft guidance gives plant-based beverage purveyors a choice: They can use “milk” with their plant-based term and disclose their differences (i.e. shortcomings) on their packaging, or they can skip the disclaimers by not using a dairy term at all. That’s the solution consumer advocates and dairy farmers have been pushing for all along.

The next few months will be telling in whether the plant-based beverage industry gets the message.

If this guidance is taken seriously, the most misleading labels should start to disappear as packaging gets updated and store shelves get restocked. Many mislabeled “milks” that are really drinks or beverages should start being labeled as drinks or beverages. For those that stubbornly insist on misleading consumers, disclosures should appear – real ones with clear statements, not wiggle words in tiny print that say differences exist without stating what those differences are. The guidance is voluntary, and it’s only a draft, but FDA has put the industry on notice. The next move’s on them.

And it’s on us too, to make sure positive change really happens. FDA’s public comment period on the guidance lasts until April 24. NMPF has directions on how you can submit a comment. Meanwhile, take pictures to post on social media. Write companies that aren’t living up to the labeling example above. FDA’s guidance is far from enough. That’s why we’re pushing to pass the DAIRY PRIDE Act, which would direct FDA to enforce its own standard of identity for milk – which, had that occurred in the first place, plant-based misinformation would never have proliferated.

The fight for transparent labeling, is far from over, but it’s going the right way. Keep your eye on the carton. Change should be coming. It’s up to all of us to make sure that it does.

NMPF Lauds House Re-Introduction of DAIRY PRIDE Act, Following Senate

Posted on by Theresa Sweeney

From NMPF President and CEO Jim Mulhern:

“The National Milk Producers Federation applauds the bipartisan members of the House of Representatives who today re-introduced the DAIRY PRIDE Act, which adds momentum to legislation that saw Senate re-introduction last week and needs to pass Congress this year.

“With proposed FDA guidance that acknowledges the problem of consumer confusion over the nutritional content of plant-based beverages, but doesn’t go far enough to solve the problem by enforcing its own standards of identity and limiting dairy terms used in food labeling to dairy products, DAIRY PRIDE is necessary for FDA to fulfill its own responsibilities.

“To eliminate consumer confusion over their nutritional content, plant-based drinks or beverages shouldn’t be allowed to use dairy terms in their labeling. That’s common-sense, and DAIRY PRIDE is a common-sense solution. We thank the House sponsors of the legislation – Reps. John Joyce, R-PA; Ann Kuster, D-NH; Mike Simpson, R-ID; Joe Courtney, D-CT; Derrick Van Orden, R-WI; and Angie Craig, D-MN – for being champions for consumers in this important nutrition and health issue.

The Defending Against Imitations and Replacements of Yogurt, Milk, and Cheese To Promote Regular Intake of Dairy Everyday Act” aka DAIRY PRIDE, requires FDA to enforce its standards of identity and would supersede the inadequate solution it offered last week, in which plant-based beverages could call themselves “milk” as long as they clearly state their nutritional differences with real dairy. FDA is accepting comments on its draft guidance until April 24.

DAIRY PRIDE was introduced in the Senate last week. Lead sponsors in that chamber were: Sens. Tammy Baldwin, D-WI; Jim Risch, R-ID; Peter Welch, D-VT and Susan Collins, R-ME.