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Trade Win Over Canada Builds on Dairy’s Policy Successes

January 5, 2022

Every day, across the full range of dairy policy and on-farm needs, NMPF seeks tangible gains for our members. Only a few days into the new year, our approach is already serving dairy well in 2022.

After focused and relentless efforts from NMPF, our member cooperatives and the U.S. Dairy Export Council, dairy farmers are on track to gain greater, well-deserved access to Canada’s dairy market. A USMCA Dispute Settlement Panel on Tuesday agreed with the United States that Canada is not living up to its end of the dairy deal it agreed to under the U.S.-Mexico-Canada Trade Agreement.

NMPF’s been fighting for U.S. dairy farmers throughout. I and members of my staff serve as confidential advisors to the U.S. Trade Representative, and we were able to press our case on the need for U.S. government action to call Canada to account. As the conflict unfolded, we were able to build support among lawmakers and trade officials for forceful action. In fact, the resolution mechanism itself may not have been so robust without NMPF/USDEC efforts – dairy urged that strong dispute settlement procedures be included in USMCA. The dispute over Canada’s dairy policies, which backtracked on Canada’s promises of greater U.S. dairy market share, was that mechanism’s first test.

And U.S. dairy, led by its cooperatives, won, sending a signal not just to Canada but to other trading partners as well about the importance of abiding by their trade commitments.

The gain is the latest in a string of wins for our members. In the past few months alone, we’ve taken the lead in achieving:

• A boost in federal insurance against market risk for dairy farmer through USDA’s new alfalfa-cost calculations under the Dairy Margin Coverage program. The gain of 23 cents/cwt. in enrolled production in 2020 and of 20 cents/cwt. in 2021, announced last month, goes above and beyond the improved feed-cost calculation we had already achieved after DMC’s creation in the 2018 Farm Bill. It’s one of many safety-net improvements that have given dairy farmers hundreds of millions of dollars more in additional income beyond what they otherwise would have received.
• Along with the alfalfa-cost improvement, the Supplemental DMC program implemented in December provides additional payments to those producers whose Dairy Margin Coverage production history is below five million pounds but has increased since 2014.
• In the Infrastructure Investment and Jobs Act signed into law in November, the bipartisan, NMPF-backed DRIVE Safe Act addresses the ongoing shortage of truck drivers nationwide by creating an apprenticeship program for young adults ages 18-21 who already hold Commercial Drivers Licenses to drive in-state to be able to cross state lines. Also in the bill are NMPF-advocated broadband provisions that allocate more than $65 billion to increase high-speed internet access, improving service in rural areas.
• Dairy Donation Program implementation in late August culminated 18 months of NMPF’s work with Congress and USDA. The program uses $400 million to facilitate and expand existing partnerships between dairy organizations and non-profit distributors like food banks to combat food insecurity, increase dairy consumption, and minimize food waste. The program reimburses dairy co-ops and other processors for the full value of the raw milk needed to make the dairy product, as directed by Congress. NMPF also worked with USDA to secure reimbursement for processing and transportation costs.
• After a months-long campaign by NMPF and the U.S. Dairy Export Council, Colombia’s Trade Ministry in December informed the U.S. Ambassador in Colombia that the agency was concluding a milk-powder safeguard investigation by deciding there was insufficient evidence to impose tariffs on U.S. exports, safeguarding dairy sales to a growing market. That decision agreed with legal and market assessments that USDEC, working with NMPF, delivered to Colombia’s government, helping to maintain our sixth-largest market for U.S. milk powder exports.
• Also in December, the U.S. House of Representatives passed the Ocean Shipping Reform Act by an overwhelming bipartisan margin of 364-60. NMPF, USDEC and other agricultural organizations have been pursuing a months-long, multi-pronged approach to tackling the shipping crisis, an effort that remains underway. In response to such efforts, the Biden Administration has now adopted a more-muscular approach toward foreign shippers that pass on transporting U.S.-made goods, positioning the industry well for legislative progress as we pursue companion legislation in the Senate in the new year and for further steps by the Administration to tackle the complex challenges of the export supply chain crisis.

We’ve also seen gains that help dairy operations do what they do best – provide high-quality, nutritious products to Americans and the world.

• The FARM Program has restarted in-person evaluations, assuring the supply chain that dairy farmers are continuously improving the top-quality animal care, antibiotic stewardship, biosecurity, environmental stewardship, and workforce development that consumers demand. FARM also was cited as a “game changer” in dairy sustainability at the UN Food Systems Summit in September, helping further cement U.S. dairy as a global stewardship leader as that becomes a greater key to competitiveness. NMPF was a leader in defending U.S. agriculture against attacks on animal agriculture at the summit.
• And after coordinated comments with other agricultural organizations, EPA in early December decided to delay a decision on the use of pyrethrins in agriculture until at least 2024 after EPA had advocated for their prohibition. Pyrethrins are the most effective and safe product to use for adult fly control on agriculture operations.

Each success helps dairy farmers in our member cooperatives – NMPF’s core mission – as we head into 2022.

The year’s challenges will be many. A new Farm Bill looms in 2023; this is the year the debate becomes fully engaged. Federal Milk Marketing Order issues demand attention. Progress toward sustainability goals remain crucial on the farm and in the global marketplace. Plant-based dairy alternatives continue to compete with dairy using unfair labels, with FDA action on the issue expected in the year’s first half, and cell-based imposters loom on the horizon. The Administration remains stalled on the pursuit of new trade agreements which are urgently needed to further expand opportunities for our exports.

Our progress builds confidence that 2022 will also bring tangible policy and on-farm gains for our industry. We look forward to more progress as our challenges evolve, the dairy producer community comes together as one to meet them, and we move our industry forward.