News for Dairy Co-Ops

The U.S. House of Representatives approved the Whole Milk for Healthy Kids Act on Dec. 13 with a commanding 330-99 margin, demonstrating compelling bipartisan support for expanding dairy in school meal nutrition programs.

The measure, led by Representatives GT Thompson, R-PA, and Kim Schrier, D-WA, expands the milk options schools can choose to include 2% and whole milk, in addition to the skim and 1% varieties currently allowed, increasing the number of tools schools can use to deliver vital nutrition to students by allowing more nutritious milk options schools can opt to serve.

“Expanding the milk schools can choose to serve to include 2% and whole is a common-sense solution that will help ensure kids have access to the same healthful milk options they drink at home,” said NMPF President and CEO Jim Mulhern upon House approval.

The House vote came after extensive Hill work and grassroots advocacy, including an NMPF call to action to its mailing list of dairy advocates that can be joined here. The legislation gained near-unanimous support among House Republicans and a majority of Democrats, generating significant momentum for Senate consideration this year.

NMPF has been committed to reinstating in schools the milk options removed in 2012, including 1% flavored milk and all varieties of 2% and whole. After years of working with members of Congress, meeting with USDA, and filing regulatory comments, 1% flavored milk was returned to school lunch menus on more permanent footing in 2022. NMPF has simultaneously built bipartisan support for 2% and whole milk options. NMPF also has been urging the Dietary Guidelines Advisory Committee to incorporate the robust body of scientific evidence showing the health benefits of dairy in all compositions, which should help expand dairy options in nutrition programs limited by dietary guidelines recommendations.

When USDA’s Federal Milk Marketing Order hearing reconvenes on Jan. 16, it will set a new record for the longest hearing in USDA history. NMPF’s proposals, however, have all been examined, with dairy cooperative leadership firmly stamped on testimony and cross-examination that will likely reach more than 15,000 pages by its expected conclusion on Groundhog Day, Feb. 2.

NMPF’s December focus was finishing region-by-region discussion on its final proposal, Proposal #19 to update Class I differentials. NMPF testimony concluded with analysis supporting the full range of NMPF proposals for comprehensive modernization offered by Dr. Scott Brown of the University of Missouri. Cooperative experts also explained both the need for updated differentials and the detailed analysis behind NMPF’s plan.

The final two weeks of presentations on the final three of 22 total proposals are scheduled for Jan. 16-19 and Jan. 29-Feb. 2, more than three months later than USDA’s originally projected completion date. The dragged-out hearing, largely because of an unexpectedly contentious atmosphere encouraged by exhaustive cross-examination by processor groups, may potentially cost farmers millions of dollars due to current inequities in the current, unmodernized system. Upon its conclusion, the next stage will be to create a legal brief, a written argument of NMPF’s case presented at the hearing to USDA using testimonies, exhibits, and cross-examinations.

For all the effort expended thus far, 2024 may be the most critical year of the entire FMMO modernization process that began with NMPF examination in 2021, as co-op leadership and farmer-owners lead the way in ensuring a final, adopted USDA proposal that heavily incorporates NMPF’s unanimously adopted, farmer-led, consensus and common-sense proposal for change.

NMPF began its new year with a new President and Chief Executive Officer, as Gregg Doud succeeded outgoing leader Jim Mulhern on Jan. 1.

“As NMPF’s new president and CEO, I am duty-bound to defend this industry. And because of our farmer and co-op leadership and first-class staff, we defend it well,” Doud said in his first CEO’s Corner, published yesterday. “2024 is also exciting because of the great potential we in dairy have to take the initiative. We can attack as well as defend. 2024 is going to be a great year for this industry. Thank you for giving me the opportunity to share in the leadership of this journey.”

Doud has served in numerous leadership roles in trade association and government work in his more than 30-year career in agricultural policy and economics, most recently at Aimpoint Research, a global intelligence firm specializing in agriculture and food. From 2018 to 2021 he served as Chief Agricultural Negotiator for the U.S. Office of the Trade Representative, appointed by President Donald Trump and confirmed by the Senate, where he led numerous successful efforts to create a fair, prosperous environment for U.S. agricultural exports, including the U.S.-China “Phase One” agreement and the USMCA negotiations.

Before that role, he served as president of the Commodity Markets Council, a trade association for commodities exchanges and industry counterparts; as senior professional staff on the Senate Agriculture Committee; and as chief economist for the National Cattlemen’s Beef Association, among other roles.

Mulhern leaves NMPF with the organization spearheading a once-a-generation update of federal milk marketing orders; with dairy farmers benefiting from a comprehensive federal safety net that features a suite of risk-management programs tailored to farms in all sizes and regions; agriculture-leading initiatives on sustainability and animal care; and undeniable progress in creating a more transparent marketplace for consumers amid the proliferation of plant-based dairy imposters, among other accomplishments.

The November margin under the Dairy Margin Coverage (DMC) program inched up $0.14/cwt from a month earlier to $9.58/cwt, marking its first time in 2023 above the maximum $9.50/cwt Tier 1 coverage level.

The monthly change was a product of modest price movements. The all-milk price rose $0.10/cwt to $21.70/cwt, while the DMC feed cost formula dropped $0.04/cwt to $12.12/cwt of milk. There was a bit more drama inside the DMC feed cost formula, with a $0.35/cwt increase in the soybean meal price factor slightly more than offset by a combined drop in the prices of corn and premium alfalfa hay. During the first ten months of this year, the average monthly change, plus or minus, in the margin was $1.22/cwt, the average monthly change in the all-milk price was $1.15/cwt and the average monthly change in the DMC feed cost was $0.37/cwt.

With one more month in to be reported for last year, the 2023 average margin is on track to average about $6.80/cwt, which would be the second-lowest margin for the DMC and its predecessor Margin Protection Program (MPP), just above 2021’s average DMC margin of $6.70/cwt. The end-of year futures prices indicated the margins would average about $8.60/cwt during January-September this year but improve during the fourth quarter to average about $9.10/cwt for the year.

CWT-assisted dairy product sales contracts in 2023 totaled 58.4 million pounds of American-type cheese, 1.1 million pounds of butter, 46,000 pounds of anhydrous milkfat, 9.1 million pounds of cream cheese and 39.0 million pounds of whole milk powder. This brings the total milk equivalent for the year to 922.1 million pounds on a milkfat basis, equal to 107.7 million pounds on a product volume basis. Product destinations include Aisa, Central America, the Caribbean, Middle East-North Africa, Oceania and South America.

Apart from cheese, all CWT supported products increased sales volumes through the program in 2023. Notably, CWT-assisted butter sales rose 73% and whole milk powder gained 27%. CWT supported sales also reached more countries than the year before – helping more consumers around the world access high-quality, U.S. dairy products.

CWT member cooperatives secured 55 contracts in December, adding 12.4 million pounds of American-type cheeses, 20,000 pounds of anhydrous milkfat, and 827,000 pounds of cream cheese to CWT-assisted sales in 2023. In milk equivalent, this is equal to 121.3 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Middle East-North Africa, Oceania and South America and will be shipped from December 2023 through May 2024.

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 built on its work to spur approval of enteric methane-reducing animal feed ingredients by securing bipartisan sponsors for the Innovative FEED Act in the House of Representatives. The House bill was introduced Dec. 7 by Representatives Greg Pence, R-IN, Kim Schrier, D-WA, Jim Baird, R-IN, and Angie Craig, D-MN.

Like its Senate counterpart, the House measure would give the U.S. Food and Drug Administration (FDA) the ability to review and approve animal feed ingredients using the agency’s Food Additive Petition pathway. This approach would allow FDA to review animal feed additives, which are not drugs, in a more efficient manner that would preserve animal, human, and environmental safety. Doing so would better position U.S. dairy farmers to act quickly and proactively to reduce enteric methane emissions and maintain global competitiveness. Products like Elanco’s Bovaer, or 3-NOP, can reduce enteric methane emissions by as much as 30 percent, making them poised to play a key role in dairy’s voluntary, producer-led sustainability efforts once approved.

The Innovative FEED Act was adopted by the Senate Health, Education, Labor, and Pensions Committee on June 15 by an overwhelming 19-2 vote. The House measure already has meaningful bipartisan support from members of the Energy & Commerce Committee, which oversees FDA-related policy. NMPF looks forward to working with its congressional champions and stakeholder partners to enact this bill into law early in 2024.

Iowa dairy farmers and Prairie Farms, Inc. member-owners Hannah and Matthew Lansing were elected by their peers to serve as chairpersons of the National Young Cooperators (YC) Program in 2024.

The pair will steer the program toward its mission by providing key information and making recommendations on topics and activities of interest to young dairy leaders, representing NMPF and the YC Program at events and meetings throughout the year and reporting progress to the NMPF Board of Directors.

Together with Hannah’s grandparents, Hannah and Matthew milk 1,100 cows and farm more than 5,000 acres at Blue Hyll Dairy in Clinton, IA. The Lansings say they are enthusiastic about the opportunity and look forward to “continuing to grow as individuals by learning from others and sharing ideas on how we can all work together to become better advocates for dairy while improving our operations,” Matthew Lansing said.

Ohio dairy farmer Karl Wedemeyer was elected to serve as vice chairperson Karl milks 200 Jerseys and farms 80 acres in partnership with his parents and brother at White Diamond Farm in La Rue, Ohio. He is a member-owner of Dairy Farmers of America, and currently serves on the cooperative’s area resolutions and corporate resolutions committees.

The National YC Program has provided training and leadership development opportunities to beginning dairy farmers for more than 70 years, with a mission to provide producers with the education, tools and resources they need to improve their leadership skills, profitability and resilience through year-round virtual and in-person programming. Click here to stay up to date on program activities.

NMPF signed and helped lead outreach for signatories on a Dec. 12 letter to the U.S. House of Representatives’ Select Committee on the Chinese Communist Party that argued against escalating trade tensions with China.

In its report released shortly thereafter on fortifying the American economy to compete with China, the Committee refrained from calling for a complete repeal of China’s Permanent Normal Trade Relations (PNTR) status – a decision that would have serious repercussions for U.S. dairy farmers.

Since Congress first granted China PNTR status in 2000, Chinese demand for U.S. agricultural exports has rapidly grown. China now purchases 19% of America’s food and agriculture exports and is the third largest export destination for U.S. dairy products. The letter warns of the potential fallout from PNTR revocation, citing as an example Chinese retaliatory tariffs on U.S. agricultural products after the U.S. imposition of Section 232 and 301 tariffs on Chinese goods. Those retaliatory tariffs led to a significant reduction in U.S. dairy exports to China.

While the final select committee report stops short of calling for outright revocation of China’s PNTR status, the recommendations urge Congress to move China to a “new tariff column” to decrease reliance on Chinese imports and develop U.S. leverage to address trade issues.

NMPF strongly opposes increased tariffs on Chinese imports that could invite additional retaliatory measures against U.S. dairy and agricultural exports – a message that NMPF continues to highlight on Capitol Hill as the select committee’s recommendations are considered for further action.