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CWT Assists with 95,000 Pounds of Dairy Product Export Sales

Posted on by Khadija Gibson-White

ARLINGTON, VA – Cooperatives Working Together (CWT) member cooperatives accepted two offers of export assistance from CWT that helped them capture sales contracts for 51,000 pounds (23 MT) of American-type cheese and 44,000 pounds (20 MT) of whole milk powder. The product is going to customers in South America and Asia, and will be delivered from May through August 2023.

CWT-assisted member cooperative year-to-date export sales total 15.7 million pounds of American-type cheeses, 495,000 pounds of butter (82% milkfat), 2,000 pounds of anhydrous milkfat, 24.6 million pounds of whole milk powder and 3.4 million pounds of cream cheese. The products are going to 18 countries in five regions. These sales are the equivalent of 362.2 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 U.S. 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.

Co-ops Lead in Developing Milk-Pricing Consensus

Posted on by Theresa Sweeney

It would seem daunting that the highly diverse dairy community, which ranges from small, 20 cow farms to 20,000+ animal operations using state-of-the-art equipment for everything from housing to enhanced sustainability, would be able to reach a unanimous consensus on a comprehensive proposal to modernize milk pricing, which is both incredibly important and incredibly complicated for each of those farms.

But dairy farmers, as represented by the members of NMPF, have a mechanism that allows the industry to tackle complex issues and work on solutions that can make improvements for all: the cooperative. And after two years and more than 150 meetings on milk marketing orders, that structure again is proving essential to industry progress.

Even after decades of consolidation and increasingly sophisticated operations, the co-op remains the heart and soul of dairy. Cooperatives handle 85 percent of U.S. milk, produced on farms that are 97 percent family owned. By providing technical and risk-management support, economic expertise and most importantly, a guaranteed buyer for a perishable product, co-ops meet dairy needs – including the need to reach agreement on all-encompassing issues such Federal Milk Marketing Order modernization. Working together for mutual self-help is the cooperative spirit. It’s the engine that makes dairy move.

Though not every dairy cooperative is an NMPF member (although they should be, if they want to be engaged in building industry positions on critical issues such as FMMO modernization), the strength of its membership covers two-thirds of the U.S. milk supply –which enables us to solidly speak for dairy farmers in federal policy debates. That’s why NMPF became the natural place to craft an FMMO modernization proposal. Top economists and analysts from member cooperatives talked with the farmer-leaders of NMPF co-ops nationwide, arriving at solutions to thorny problems that respected the interests of all and, in total, achieves mutual benefits.

The result is the plan NMPF submitted to USDA last week. That’s how things should be done – and that’s how things will continue to be done as the Agriculture Department considers the plan and, assuming successful consideration, a federal order hearing takes place.

Not every dairy farmer is a co-op member, of course, and the industry includes other parts of the supply chain that have an interest in FMMO issues. That’s obvious, and the farmer-led plan NMPF has submitted wouldn’t have been as well-considered – and certainly not as likely to succeed – without the input and support from stakeholders across dairy.

But in the end, the vehicle driving the first major FMMO update in nearly a quarter-century is the farmer-owned cooperative. Co-ops are where the ideas come from, and where the initiative to realize those ideas come from as well. As the federal-order process continues, each will be important to success. Fortunately, supplies of both are ample.

NMPF’s Bjerga Discusses Benefits of Milk-Price Modernization

Posted on by Alan Bjerga

 

NMPF Senior Vice President of Communication discusses how the Federal Milk Marketing Order Modernization plan the organization submitted to USDA this week would create a firmer foundation for the U.S. dairy industry, with farmers being paid a price that better reflects the quality of their milk and sharing their price risk more equitably with processors. Ultimately, once needed updates are fully in place, everyone will benefit from milk that’s valued appropriately across the industry, he said. Bjerga speaks with Mike Pearson on the Agriculture of America podcast.

West Brings Finance Expertise to Staff

Posted on by Theresa Sweeney

NMPF’s newest staff member, David West, has joined the organization as its Vice President of Finance and Administration for the Federation and its related organizations.

In that role, West is responsible for overseeing all finance and accounting, human resources, information technology, contract management, and other administrative matters. He also serves as the advisor to the senior leadership team on financial planning, reporting, budgeting, and operations and ensures organizational legal and regulatory compliance. In carrying out these responsibilities, David supervises a team of in-house administrative personnel and outsourced accounting, human resources, and legal services professionals.

Prior to joining NMPF, David served as the Director of Finance and Administration at George Washington’s Mount Vernon, a non-profit with 650 employees that generates $70 million in revenue and $200 million in investments. During his tenure, he led the organization’s efforts, in budgeting, finance, compliance, payroll, and system administration. Before that, David worked in public accounting at Tate & Tryon, where he oversaw non-profit financial preparation for a variety of non-profit organizations.

A native of Northern Virginia, David resides in Springfield, VA and is a graduate of High Point University in North Carolina.

April CWT-Assisted Dairy Export Sales Totaled 10.7 Million Pounds

Posted on by Theresa Sweeney

CWT member cooperatives secured 38 contracts in April, adding 3 million pounds of American-type cheeses, 55,000 pounds of butter, 6.7 million pounds of whole milk powder, 2,000 pounds of anhydrous milkfat and 522,000 pounds of cream cheese to CWT-assisted sales in 2023. In milk equivalent, this is equal to 85.6 million pounds of milk on a milkfat basis. These products will go to customers in Oceania, South America, Asia, Central America and the Caribbean, and will be shipped from April through October 2023.

CWT-assisted 2023 dairy product sales contracts year-to-date total 15.6 million pounds of American-type cheese, 495,000 pounds of butter, 3.4 million pounds of cream cheese, 2,000 pounds of anhydrous milkfat and 24.5 million pounds of whole milk powder. This brings the total milk equivalent for the year to 361.4 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.

USDA Catching Up to NMPF on Animal Disease Traceability

Posted on by Theresa Sweeney

NMPF underscored its longstanding commitment to animal traceability to combat disease outbreaks while opposing a change to the definition of “dairy cattle” in comments it submitted  April 19to the United States Department of Agriculture Animal and Plant Health Inspection Service (USDA-APHIS) on the Use of Electronic Identification Eartags as Official Identification in Cattle and Bison (Docket No. APHIS–2021–0020).

USDA-APHIS is proposing to amend its animal disease traceability regulations to require that eartags be both visually and electronically readable to be recognized for use as official eartags for interstate movement of cattle and bison covered under the regulations. The agency also proposed changes to the definition of “dairy cattle” to include cross-bred dairy beef animals.

The proposed changes are intended to enhance the ability of tribal, state and federal officials, private veterinarians, and livestock producers to quickly respond to high-impact diseases currently existing in the United States, as well as foreign animal diseases that threaten the viability of the U.S. cattle and bison industries.

NMPF comments focused on the USDA-APHIS alignment with the longstanding NMPF policy supporting mandatory animal identification with radio frequency identification device (RFID) tags for dairy cattle. The USDA-APHIS requirement for eartags to be electronically readable comports with NMPF’s animal identification policy which is nearly two decades old.

NMPF in its comments opposed the APHIS proposed change to the definition of “dairy cattle” to include cross-bred dairy beef animals. APHIS contended that cross-bred dairy-beef animals, which are raised solely for meat and not for milk, represent increased risks of disease transmission and thus the animal disease traceability requirements should be the same as for dairy cattle. However, APHIS did not present data to indicate an increased risk of disease transmission and simply asserted that being raised and managed on a dairy farm result in increased risk. Many dairy farms also raise other livestock commercially, such as swine and poultry, yet USDA-APHIS did not propose to have similar disease traceability requirements for those animals. NMPF suggested these crossbred dairy-beef animals should have the same requirements as other beef cattle.

NMPF Engages on Supply Chain Solutions

Posted on by Theresa Sweeney

As supply chains struggle to fully recover from the pandemic, NMPF continued to engage Congress and the administration on ways to improve ocean and freight shipping.

Representative John Garamendi, D-CA, introduced the Ocean Shipping Competition Enforcement Act on April 8. Supported by NMPF, the bill would allow the Federal Maritime Commission to block anti-competitive agreements among ocean common carriers and maritime terminal operators – an important step in leveling the playing field with dairy exporters.

Additionally, NMPF joined partner organizations in sending two letters from industry urging the U.S. government to address a pair of ocean shipping concerns.  NMPF joined leading agriculture and retail organizations March 24 in calling for the administration to help resolve the ongoing West Coast port labor negotiations. Ocean terminal operators and workers have made little progress on a new labor agreement since the last contract expired over ten months ago. U.S. dairy exporters need the two parties to reach an agreement so that West Coast ports can return to operating at full capacity, a message that NMPF continues to relay on Capitol Hill.

Separately, NMPF joined the Agriculture Transportation Coalition in sending a letter to Representatives Dusty Johnson and John Garamendi, asking the OSRA co-sponsors to direct the maritime commission to address fees being incurred at rail depots for factors outside of dairy exporters’ control. Although OSRA required a stop of unwarranted fees at ocean ports, railyards currently fall outside of the commission’s jurisdiction. NMPF and its allies are advocating for Reps. Johnson and Garamendi to formally clarify the authority of the maritime commission under the OSRA to regulate these charges and facilitate more efficient and fair ocean shipping.

NMPF Co-Leads Dairy Dialogue on Climate

Posted on by Theresa Sweeney

NMPF’s Executive Vice President for Policy Development and Strategy Jaime Castaneda traveled to Argentina for a regional seminar April 19-20 on, “The road to sustainability in livestock production in the Americas,” Coordinated in partnership with USDEC, the Pan-American Dairy Federation (FEPALE) and the Federation of Rural Association of the Mercosur (FARM).

The seminar facilitated discussion of common opportunities and challenges for the dairy and livestock sectors in the Americas on sustainability and other food systems policy issues. Organizers also adopted a set of joint principles to formalize collaboration on climate, the role of trade, and the importance of sustainable productivity growth.

The new partnership will focus on engaging government officials and international organizations to promote climate policies that are attainable for the dairy and livestock industries, given their unique needs.

With the UN Food Systems Summit Stocktaking Moment and COP28 taking place next year, this collaboration will play a significant role in ensuring dairy and livestock producers have a seat at the table and shaping the discussion of the agricultural industry’s part in reaching climate goals.

USTR Report Emphasizes Importance of Preserving Common Food Names

Posted on by Theresa Sweeney

NMPF’s efforts to protect the rights of dairy producers to use common names such as parmesan or feta were supported by the U.S. Trade Representative’s (USTR) office in its April 26 report on international challenges to intellectual property rights.

In its annual Special 301 Intellectual Property Report, USTR highlighted several policy concerns that NMPF and USDEC raised in joint comments filed on Jan. 30, as well as in a separate filing by the Consortium for Common Names (CCFN), which NMPF’s trade policy team staffs.

The report describes in detail the European Union’s ongoing campaign to abuse and misuse geographical indication (GI) rules to confiscate generic food and beverage terms and prevent U.S. producers from selling certain common name foods in specific markets:

The EU GI system and strategy “adversely impact access for U.S. and other producers in the EU market and other markets by granting protection to terms that are considered in those markets to be the common name for products,” the report stated.  “The EU has granted GI protection to thousands of terms that now only certain EU producers can use in the EU market, and many of these producers then block the use of any term that even ‘evokes’ a GI.

“As part of its trade agreement negotiations, the EU pressures trading partners to prevent any producer, except from those in certain EU regions, from using certain product names, such as fontina, gorgonzola, parmesan, asiago, or feta. This is despite the fact that these terms are the common names for products produced in countries around the world.”

NMPF will continue to engage USTR and the rest of the administration to turn these concerns into concrete actions. The U.S. government has a full suite of tools at its disposal, including existing free trade agreements and upcoming trade negotiations, to establish firm and lasting market access protections with U.S. trading partners around the world.

NMPF Represents Members at Successful NCIMS Conference

Posted on by Theresa Sweeney

The National Conference on Interstate Milk Shipments (NCIMS) addressed 72 proposals submitted to revise the Pasteurized Milk Ordinance (PMO) and its related documents at a meeting in Indianapolis from April 3-7.

NMPF staff advocated positions of interest for dairy cooperatives and their producer members. Many NMPF members also attended and played key roles in the deliberations of the conference. The 2023 conference featured more than 400 attendees — a record — after taking a four-year hiatus due to the COVID-19 pandemic. NMPF was pleased with many of the outcomes of the proposals and made significant progress in achieving reasonable solutions on many key issues.

The conference once again highlighted the successful collaboration between the U.S. Public Health Service/Food and Drug Administration, state regulators and dairy industry representatives to continue to promote and protect a safe supply of Grade A milk and milk products.  A total of 40 proposals were passed by the delegates either as submitted or as amended. Below are the outcomes of the NMPF-submitted proposals.

  • Proposal 207 was submitted to require a 48-hour notice prior to on-farm inspection. Reasons for this include the risks to human health following the COVID-19 pandemic, the farm’s biosecurity and overall personnel safety. The proposal was amended at the conference and passed through the delegates to be assigned to a standing or ad-hoc committee to review sections 8, 13, and 14 of the PMO. This is an important first step in recognizing the importance of biosecurity measures on dairy farms and will hopefully lead to further discussion of inspection notices.
  • Proposal 301 provided a definition of equivalence for the USPHS/FDA responsibility to determine whether a foreign country’s regulatory program and government oversight of that program has an equivalent effect on the safety of the regulated milk or milk product. The term “equivalence” is important for international trade; unfortunately, the PMO has long lacked a definition. This proposal passed through the delegates as amended to include a plain language definition in line with that of the World Trade Organization. Defining equivalence provides clarity for industry, state and Federal stakeholders about foreign countries’ obligations to participate in the PMO. This proposal reinforces the importance of transparency when analyzing equivalence for foreign countries.
  • Proposal 302 was voted no action as 301 was decided to be the proper pathway for equivalence.

Also to note, Antone Mickelson, NMPF’s NCIMS committee chair, was re-elected to fill the western states industry seat on the NCIMS Executive committee and NCIMS Vice Chair. The next conference will be held in 2025 in Minneapolis.

DMC Margin Decline Slows Significantly in March

Posted on by Theresa Sweeney

Following three straight months when the Dairy Margin Coverage (DMC) margin dropped by well over $1.00/cwt, the margin dropped again in March, but by just 11 cents from February.

The milk price was down again, for the fifth month in a row, to $21.10/cwt, $0.50/cwt less than the month before, and feed costs were down by almost as much, $0.40/cwt, the first monthly drop on the DMC feed cost since last November. The lower feed costs were driven almost equally by drops in the prices of all three feed components of the formula, when expressed on a milk equivalent basis. The March DMC margin of $6.08/cwt will result in a payment of $3.42/cwt for Tier 1 coverage at the maximum $9.50/cwt level.

Available forecasts currently indicate that the monthly DMC margins are close to bottoming out for the year, at around $6.00/cwt in a month or two, followed by a slow rise that still looking may not exceed $9.50/cwt until the fourth quarter.