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Good News for Consumers on Inflation
When dairy prices rise, people notice.
That’s what happens when your product is so ubiquitous that grocery stores price it below-cost to bring in consumers who make up for the loss by buying higher-margin items. That’s what happens when your products are so essential that there’s no way around spending a premium if that’s what it takes to bake a perfect cake. And that’s what happens when people rely on you for affordable, efficient nutrition.
But in recent months, even as last year’s general run-up in inflation has eased, some of that easing has been even more pronounced in dairy products. Butter prices, which in December were 31 percent higher than a year earlier, are now only up 5 percent year-over-year, according to the latest Consumer Price Index numbers – much more in line with overall inflation. Cheese was up 13.5 percent last August – but by April it has fallen to 6.1 percent, less than overall food inflation of 7.5 percent.
And fluid milk, which last August was witnessing year-over-year inflation of 17 percent, in April was up a meager 1.6 percent over the year before, a number that, given all that’s occurred, seems positively … normal.
Which shouldn’t be surprising in the end. While dairy, like many perishable products, is prone to more dramatic price swings than many other goods, over the long haul it remains extremely affordable, and has only become more so over time. Check out the divergence seen from 2008, when long-term overall inflation, food inflation and dairy inflation were relatively equal, through today, as dairy prices have risen less, during most of that period, relative to those other categories.
The best bargain in nutrition is only getting better. And while short-term blips get headlines, as the spikes recede, all that remains is dairy’s well-deserved reputation for quality and affordability. Something to keep in mind as the summer months heat up – dairy will cool you down, from your body to your pocketbook.
NMPF’s Bjerga on the Whole Milk for Healthy Kids Act
NMPF Senior Vice President of Communications Alan Bjerga discusses the Whole Milk for Healthy Kids Act and the importance of bringing back whole milk as an option in school meal programs. The Whole Milk for Healthy Kids Act was introduced in the House of Representatives on Tuesday, and is another step acknowledging the increased understanding of the benefits of whole milk in diet. Bjerga speaks on RFD-TV.
May CWT-Assisted Dairy Export Sales Totaled 5 Million Pounds
CWT member cooperatives secured 41 contracts in May, adding 4.1 million pounds of American-type cheeses, 99,000 pounds of butter, 88,000 pounds of whole milk powder and 717,000 pounds of cream cheese to CWT-assisted sales in 2023.
In milk equivalent, this is equal to 46.3 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, Oceania, South America and Middle East-North Africa, and will be shipped from May through November 2023.
CWT-assisted 2023 dairy product sales contracts year-to-date total 19.7 million pounds of American-type cheese, 594,000 pounds of butter, 24.6 million pounds of whole milk powder, 4.1 million pounds of cream cheese and 2,000 pounds of anhydrous milkfat. This brings the total milk equivalent for the year to 407.6 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.
Recording Available for Eurofins Webinar on new rBST Testing Method
NMPF hosted a webinar May 25 on a new rBST testing method featuring Eurofins’ Senior Applications Scientist, Sarah King, and Vice President of Business Development, Dino Holmquist. Sarah and Dino provided an overview of how the method works and answered questions about the test’s capabilities.
The testing method, developed by Eurofins, detects a peptide of the recombinant protein. The peptide is detected utilizing liquid chromatography tandem mass spectrometer (LC-MS/MS). This state-of-the-art technology allows for sensitive and accurate detection of rBST at concentrations lower than 0.001%. Many dairy companies state on their labels that the product is “rBST-free” without any scientific data to support this claim. This new testing offers an interesting opportunity while raising many questions about how it can be implemented and what the implications may be. The recording can be watched here with the passcode #hBv7QJ2.
NMPF Board of Directors Approves Comprehensive Farm Bill Recommendations
NMPF’s Board of Directors approved June 7 a suite of farm bill policy priorities covering the commodities, conservation, trade, and nutrition titles, working to enhance federal support for producers and expand access to nutritious dairy products for consumers at home and abroad.
With the current farm bill set to expire Sept. 30, Congress is working to enact a new bipartisan five-year farm bill. NMPF’s recommendations will aid in enacting an on-time farm bill that provides dairy producers the certainty they need as they manage their risks and resources while seeking market opportunities at home and abroad.
“The farm bill is crucial both to dairy farmers seeking to effectively manage their risk and to the consumers who benefit from the nutritious products dairy farmers work every to provide,” said Randy Mooney, chairman of NMPF’s board and a dairy farmer outside Rogersville, MO. “We stand ready to work with lawmakers as they craft this complex, extremely important legislation that touches everyone.”
In the Commodities title:
NMPF seeks to build on its successes in the last farm bill to strengthen the dairy safety net and provide producers with access to a range of risk management tools. NMPF’s board voted to support continuing the Dairy Margin Coverage safety net while updating the program’s production history calculation. The board also voted to prioritize improving the Livestock Gross Margin-Dairy and Dairy-Revenue Protection programs should new funding become available.
The board also voted to seek farm bill language to direct USDA to conduct mandatory plant cost studies every two years to provide better data to inform future make allowance reviews. This would complement the near-term make allowance update NMPF is pursuing through its Federal Milk Marketing Order initiative via the USDA hearing process announced last week. Similarly, the board also voted to pursue restoring the previous “higher of” Class I mover in the most expeditious manner possible, either administratively via the FMMO process or legislatively through the farm bill, in which the mover was last changed in 2018.
In the Conservation title:
NMPF is advocating for policies that better position the dairy industry to meet its voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050. NMPF’s board voted to support maintaining robust funding for voluntary conservation programs, such as the Environmental Quality Incentives Program that supports dairy farmers in their ongoing land and water resource management efforts, with additional emphasis on feed and manure management both of which are major areas of opportunity in sustainability. The board also voted to seek relief from program payment limitations that prevent the family farmers that produce most of the nation’s milk supply from fully using these programs.
In the Trade title:
NMPF will support policies recognizing the growing importance of trade for U.S. dairy, with exports accounting for one-sixth milk of all U.S. milk production, a share expected to grow. NMPF’s board voted to support enhancing funding for trade promotion programs like the Market Access Program and the Foreign Market Development program, which promote American-made dairy and agriculture products that compete with heavily subsidized foreign products and return well over $20 in export revenue for every dollar invested.
The NMPF board also voted to seek language to protect common food names, as embodied in the bipartisan, bicameral SAVE Act that would establish an official list of common food and beverage names and direct USDA and the U.S. Trade Representative to prioritize this issue in international trade negotiations.
In the Nutrition title:
NMPF will support policies that reflect dairy’s role as an excellent source of 13 essential nutrients, some of which are under-consumed, according to the most recent Dietary Guidelines for Americans. The Supplemental Nutrition Assistance Program is vital to linking the food we produce as farmers to families across the country facing difficult circumstances. NMPF’s board voted to support the enhancement of federal nutrition programs to provide nutritious dairy products to beneficiaries. NMPF also supports the bipartisan Dairy Nutrition Incentives Program introduced in the Senate to encourage SNAP participants to choose healthful dairy products at the grocery store.
NMPF Protecting Dairy in School Nutrition Programs
NMPF submitted comments on May 10 advocating for continuing to serve low-fat flavored milk in addition to fat-free varieties for all grade levels and highlighting the role milk, cheese and yogurt play in making school meals the healthiest meals children consume.
The comments were in response to a proposed rule USDA’s Food and Nutrition Service (FNS) published Feb. 7 to update school meal standards, intended to take effect beginning with the 2024-2025 school year. This proposed rule is the latest step FNS has taken to update school meal standards dating to passage of the Healthy, Hunger Free Kids Act in 2010.
The proposed rule continues to allow low-fat flavored milk in school meals, but potentially in a more limited fashion. FNS puts forward two different options for flavored milk in its proposed rule, requesting input on both options. The first would allow low-fat and fat-free flavored milk for either grades 6-12 or 9-12 only. The second would maintain current standards, allowing low-fat and fat-free flavored milk for all grade levels. The proposal also puts forward added sugar and sodium limits that will be phased into school meals in future school years, both of which could limit varieties of school milk, yogurt, and cheese that can be served in school meal programs.
Since 2010, multiple USDA rulemakings have intended to make school meals healthier, with NMPF working hard to ensure that changes don’t inadvertently reduce kids’ actual diet quality and nutrient intake. This includes NMPF’s leading role in getting USDA to reinstate the low-fat flavored milk option in school meal programs after its removal by a 2012 rule. NMPF’s work here includes working closely with Chairman GT Thompson, R-PA, and Representative Joe Courtney, D-CT, over multiple congresses on their School Milk Nutrition Act, which would guarantee that schools have the choice to serve any milk variety consistent with federal dietary guidelines.
To further support school meals, NMPF and IDFA submitted joint comments May 8 on the proposed rule, “Child Nutrition Programs: Community Eligibility Provisions – Increasing Options for Schools” supporting lowering the percentage of enrolled students certified for free school meals without submitting a household application from 40% to 25%. As noted in the preamble to the rule proposing the change, a study showed that schools that implemented the community eligibility provision (CEP) attained participation rates about 7 percent higher for lunch and 12 percent higher for breakfast, compared to similar schools that did not choose the provision.
Providing healthy meals to all students helps address longstanding inequities based on race, income and other factors that contribute to disparities of nutritional intakes and health outcomes.
NMPF Sends Joint Letter to HHS, USDA Secretaries Urging Inclusion of Dairy Fats Science
NMPF and the International Dairy Foods Association (IDFA) sent a joint letter to Health and Human Services Secretary Xavier Becerra and Agriculture Secretary Tom Vilsack on May 9 calling for the inclusion of the growing body of science studying dairy fats in the 2025 Dietary Guidelines Advisory Committee (DGAC) review.
Several scientific research studies, including multiple meta-analyses, demonstrate that dairy foods, regardless of fat level, appear to have neutral or beneficial effects on cardiovascular disease, type 2 diabetes, obesity, stroke and other conditions.
The committee, which held its second public meeting on May 10, will use three approaches to examine the evidence used to answer the scientific questions: systematic reviews, food pattern modeling and data analysis. NMPF and IDFA state in the letter, “NMPF and IDFA hope this committee won’t default to the overly broad recommendation to avoid saturated fats regardless of food source. This would fail to answer the 2025 proposed scientific question and, equally important, it would fail to address the 2020 DGAC report’s directive. We strongly urge the committee to develop protocols that will enable it to answer the question about specific food sources of saturated fat, including consideration of the recent science on dairy fats.”
NMPF Urges Trade-Compliant Approach to New USDA Country of Origin Labeling Rule
NMPF encouraged the USDA Food Safety and Inspection Service office to ensure that a newly proposed Country of Origin Labeling (COOL) rule does not result in Mexican and Canadian retaliatory tariffs on the U.S. dairy industry in comments filed May 11 on the proposal.
The proposed rule would allow the voluntary use of “Product of USA” or “Made in the USA,” only if the meat, poultry and egg products are derived from animals born, raised, slaughtered and processed in the United States. Prior U.S. mandatory country of origin rules on beef and pork were found to violate World Trade Organization (WTO) rules, resulting in WTO-authorized tariff retaliation rights that included U.S. dairy exports to Mexico and Canada. While USDA’s proposed rule would be voluntary, NMPF made clear it must be written in a way that ensures compliance with WTO and U.S.-Mexico-Canada Agreement commitments.
NMPF warned that should the rule undermine imports to the United States, both Mexico and Canada could impose retaliatory tariffs that would significantly harm American dairy farmers and producers.
NMPF-Led Common Names Legislation Introduced in Congress
NMPF, working in collaboration with the Consortium for Common Food Names (CCFN) and the U.S. Dairy Export Council (USDEC), spurred the May 17 introduction of the bipartisan Safeguarding American Value-Added Exports (SAVE) Act, a milestone in the organizations’ efforts to preserve common cheese names in export markets around the world.
Outlined and supported by NMPF, CCFN and USDEC, the SAVE Act would amend the Agricultural Trade Act of 1978 in two keys ways by:
- Explicitly defining “common names” as a term ordinarily used for marketing a food product, as determined by the U.S. Department of Agriculture (USDA);
- Defining foreign restrictions of those common names as an unfair trade practice; and
- Directing USDA to “coordinate with the U.S. Trade Representative to proactively defend the right to use common names for agricultural commodities or food products in their markets” through various negotiating tools.
The legislation calls for USDA and USTR to use bilateral, plurilateral, or multilateral agreements, memoranda of understanding, and other instruments to ensure that American dairy and other agricultural producers will be able to use the common names in food and beverage exports.
Led in the Senate by Sens. John Thune, R-SD, Tammy Baldwin, D-WI, Roger Marshall, R-KS, and Tina Smith, D-MN, and in the House by Reps. Dusty Johnson, R-SD, Jim Costa, D-CA, Michelle Fischbach, R-MN, and Jimmy Panetta, D-CA,, NMPF plans to work with the bill’s leads to ensure the legislative text is captured in the Farm Bill. That would mark the first farm bill effort on common names.
Given the outsized impact that illegitimate geographical indications have on American cheesemakers, the SAVE Act signifies a much-needed development that would benefit the U.S. dairy industry should it become law. NMPF will continue to work with its allied organizations and supporting members to ensure passage of this important new tool.
DMC Margin Drops Below $6 in April
The April Dairy Margin Coverage (DMC) margin dropped by $0.25/cwt from a month earlier to $5.84/cwt, the first time the margin fell below $6 since August 2021. The April all-milk price was $20.70/cwt, down $0.40/cwt from March, while the DMC feed price was down for the month by $0.15/cwt, due entirely to a lower soybean meal price. The April payment for maximum Tier 1 coverage at the $9.50/cwt level will be $3.42/cwt. T
Available forecasts continue to indicate that monthly DMC margins will stubbornly remain around $6 into the summer and then slowly rise during the second half of the year, not topping $9.50/cwt until November.
NMPF to EPA on WOTUS: We Told You So!
The Supreme Court on May 25 handed EPA a devastating ruling, restricting its jurisdiction over Waters of the U.S. (WOTUS), a move agricultural groups and landowners are praising and that NMPF predicted in earlier statements.
The court’s 5-4 decision was led by the conservative justices and featured three other concurring opinions that agreed with the outcome but differed in how to reach the conclusion that the Sackett property was not subject to the Clean Water Act’s jurisdiction. Moving forward, federal jurisdiction will be limited to traditional navigable waters and adjacent wetlands with continuous surface connection to those waters.
NMPF released a statement on EPA’s new WOTUS rule in January which said that “NMPF is disappointed that once again dairy farmers, who every day strive to be leaders in environmental stewardship, may need to live under a WOTUS rule that is cumbersome, unclear and overly complicated. Because the EPA’s most recent iteration fails to resolve what is now a 50-year struggle to define what constitutes a water body subject to federal regulation under the Clean Water Act, our members will face continued uncertainty as they attempt to comprehend and comply with unclear regulations.”
NMPF also repeatedly told EPA not to issue any rule until the Supreme Court ruled on Sackett v. EPA this year because of the high likelihood that the Supreme Court decision would alter any new WOTUS rule. The only surprise, one shared by many in agriculture, was how forcefully the court’s decision limited EPA’s authority.
While it is clear that the new WOTUS rule is essentially dead, the mechanism for how that will occur is yet to be determined, as EPA can either withdraw the rule on its own or a federal court judge with WOTUS cases before them can throw out the rule. In either case, EPA will certainly write yet another WOTUS rule, one expected to be seen more favorably in agriculture given the narrowed scope created by the Sackett ruling.
