News for Dairy Co-Ops

NMPF celebrated strong global demand for U.S. milk in a time of turmoil and asserted leadership in its efforts toward Federal Milk Marketing Order modernization during its Board of Directors meeting March 8-9.

High on NMPF’s list of priorities for 2022 is leading discussions on updating the Federal Milk Marketing Order system, the bedrock of orderly milk markets in the U.S. NMPF is taking a deliberate approach toward meaningful modernization, crafting consensus among all sizes and regions, said Jim Mulhern, president and CEO of NMPF.

“We may take the rest of this year to get this all done and get it right,” Mulhern said. “If we can keep a spirit of collaboration going throughout the process, we’re going to end up in a very good place. I’m confident that we’ll have a national federal order hearing proposal that reflects the consensus of our membership and reflects the needs of dairy producers across the country.”

NMPF’s Economic Policy Committee since last fall has been conducting analysis and engaging with farmers on the FMMO system, created in the 1930s and last updated in 2000.

NMPF’s board also discussed the response of agriculture and dairy to the humanitarian crisis in Ukraine and potential resulting volatility in agricultural markets. Board members pledged to seeks ways to assist Ukrainian families and farmers as the fast-developing situation evolves. The board unanimously adopted a resolution calling on policymakers “to immediately take the steps necessary to facilitate increased domestic energy production of all forms” to avoid agricultural supply disruptions at a time of already high and rising input costs.

Other topics ranged from sustainability to supply chains during the meeting, which also featured remarks from Rep. Glenn “G.T.” Thompson, R-PA, ranking member of the House Agriculture Committee. Valerie Lavigne, a dairy farmer from Schaghticoke, NY, and a member of Agri-Mark, also spoke in her new role as chairwoman of NMPF’s Young Cooperators.

New directors welcomed to NMPF’s board included:

• Rob Byrne, Dairy Farmers of America
• Chris Sukalski, Land O’Lakes
• Andy Mason, Land O’Lakes
• Frank Doll, Prairie Farms

NMPF helped secure important financial support for numerous priorities in the final government spending bill for Fiscal Year 2022, which President Biden signed into law in March. Key dairy provisions include:

• $6 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and $440 million for commodity assistance programs, including $332 million for the Commodity Supplemental Food Program and $81 million for TEFAP administration. Additionally, the measure provides $3 million for the Healthy Fluid Milk Incentives Projects authorized in the 2018 Farm Bill to create pilot programs to increase milk consumption among SNAP households. This represents an increase of $2 million over FY 2021.
• $486 million for the ReConnect program, the USDA Rural Development program working to provide broadband service to eligible rural areas.
• $25 million for the Dairy Business Innovation Initiatives program, which provides direct technical assistance and grants to dairy businesses to further the development, production, marketing, and distribution of dairy products. This is an increase of $1 million over Fiscal Year 2021.
• $10 million for the Farm and Ranch Stress Assistance Network, a USDA program aimed at connecting those working in agriculture to stress assistance and support programs.
• $1 million for FDA to seek solutions on regulating ingredient claims on animal feed additives as foods, not drugs. NMPF led efforts in Congress to secure this important component of dairy’s sustainability efforts and policy agenda that will provide a jumping-off point for additional work.

NMPF will continue building bipartisan support for dairy programs and issues to help ensure the needs of dairy farmers and the cooperatives they own across the country are heard and met.

NMPF welcomed progress on legislation to address the supply chain challenges facing U.S. dairy exporters this month.  The U.S. Senate passed the Ocean Shipping Reform Act of 2022 (OSRA) by voice vote on March 31, following the Senate Commerce, Science and Transportation Committee’s March 22 unanimous approval of the bill. Working with the U.S. Dairy Export Council (USDEC) and a coalition of agriculture organizations, NMPF contributed to shaping the bill’s language and worked to secure cosponsors for the measure.

In addition to the standalone bill led by Senators Amy Klobuchar (D-MN) and John Thune (R-SD), the House-passed version of OSRA has been included in the America COMPETES Act (H.R. 4521), a bill soon headed to conference with the Senate’s U.S. Innovation and Competition Act (S. 1260). Congress hopes to determine a path toward reconciling differences in the two bills within the next month.

NMPF also continues to work closely with its allies in Congress to ensure that regardless of its final legislative form, OSRA’s benefits address the harmful practices of foreign-owned ocean carriers and help alleviate the supply chain congestion. Shipping disruptions have contributed to well over $1.5 billion in added costs and lost sales for dairy exporters in 2021 alone.

NMPF’s Jaime Castaneda highlighted this need in a March 17 roundtable hosted by the U.S. House of Representative’s Problem Solvers Caucus. Coordinated by Reps. Jim Costa (D-CA) and Dusty Johnson (R-SD), bipartisan lawmakers gathered a small group of industry representatives, including NMPF, to identify additional steps necessary to address the supply chain crisis. Castaneda joined the panelists in urging Congress to tackle immigration reform and quickly pass OSRA as well as the Ocean Shipping Antitrust Enforcement Act (H.R. 6864), which NMPF has endorsed.

USDA also announced March 18 a new partnership with the Northwest Seaport Alliance (NWSA) on a plan to enhance access to a 49-acre “pop-up” site to accept dry and refrigerated containers for temporary storage. The move is intended to reduce operational hurdles and costs at the ports of Seattle and Tacoma and allow the agriculture industry’s containers to be loaded more quickly onto ships. NMPF is working with USDEC and USDA to identify additional pop-up locations in other regions throughout the United States.

The second highest monthly surge in feed costs since the emergence of margin protection as the main federal safety net for farmers lowered the Dairy Margin Coverage Program margin by $0.34/cwt, to $11.20/cwt, in February.

Steady increases in feed costs for the past year and a half were kicked into a yet higher gear by the developing Russia-Ukraine situation, raising fears of reduced global grain production. The February DMC feed cost was $13.50/cwt, up $0.84/cwt from a month earlier and the highest since the introduction of margin protection in 2014. Two-thirds of this increase came from a jump in the price received by U.S. farmers for corn.

Offsetting the jump somewhat – but not enough – was an increase of the U.S. average all-milk price by $0.50/cwt to $24.70/cwt.

The dairy and grain futures markets currently indicate the DMC margin will gradually increase during the remainder of 2022.

In keeping with tradition, NMPF released its annual report at the March board meeting March 8, chronicling the organization’s many activities and accomplishments of the past year.

“The return to more normal times – and prospects for greater prosperity on dairy farms in 2022, as years of tireless effort bear fruit in the form of higher prices and better balance sheets – animals this year’s NMPF Activities and Accomplishments,” said NMPF President and CEO in his introduction to the report.

The document organizes NMPF’s works through sections spotlighting its efforts in government relations; economics; trade; regulatory affairs; and the FARM Program, along with special member-focused initiatives.

Along with the review of the highlights of what NMPF achieved in 2021, the annual report lays out some of the challenges that lie ahead, including the development of meaningful Federal Milk Marketing Order changes and the implementation of dairy’s Net Zero Initiative. In addition to online resources, anyone interested in ordering hard copies of the annual report may contact NMPF staff at info@nmpf.org.

NMPF submitted joint comments March 24 with the International Dairy Foods Association to the USDA Food and Nutrition Service urging the agency to improve nutrition security by updating school meal nutrition standards to encourage increased consumption of dairy. Doing so would be in keeping with recommendations made in the 2020-2025 Dietary Guidelines for Americans (DGA) report and by leading health organizations.

USDA announced transitional school meal nutrition standards for the next two school years that will allow schools to continue to serve low-fat flavored milk consistent with DGA recommendations while pausing overly stringent sodium reduction targets that threaten the ability of school meals professionals to serve nutrient-rich cheeses. USDA intends to craft more permanent standards for school year 2024/2025 to pave the way for healthy and nutritious school meals.

Highlighted in the comments are the nutritional benefits that the low-fat flavored milk provides students- the same 13 essential nutrients which unflavored offers. NMPF and IDFA also point out that the Dietary Guidelines for Americans say modest amounts added sugars can be added to nutrient-dense foods – including low-fat or fat-free milk – to help meet food group recommendations.

The comments also emphasize the need to work with industry before implementing further sodium reduction targets, the importance of lactose-free and reduced-lactose options for schools and dairy products at a variety of fat levels.

NMPF continues to identify and advocate for pathways that increase foreign market access for U.S. dairy while the Biden Administration remains slow to pursue comprehensive trade agreements.

The Indo-Pacific Economic Framework (IPEF), a limited trade contract intended to strengthen trade relations, supply chain resiliency, and cybersecurity in the region, may offer the broadest non-FTA opportunity to advance that goal for now. The framework under development touts a “fair and resilient” trade module focused primarily on addressing nontariff issues.

NMPF, together with USDEC, is working to ensure the dairy industry has a hand in shaping its development as the effort gains momentum. The Senate Finance Committee held a March 15 hearing on the framework, where NMPF helped members with questions for  Sharon Bomer Lauritsen, who testified on behalf of the agricultural industry, to draw out how dairy market barriers could best be addressed in the IPEF.

Several of the recommendations Bomer offered echoed those NMPF shared with USTR in early February in a confidential submission outlining various dairy market access priorities including reductions by our trading partners of their World Trade Organization tariffs.

NMPF also worked with a coalition of agricultural organizations to generate support for a March 30 bipartisan Congressional letter to Ambassador Tai and Secretary Vilsack, urging the administration to make agriculture a priority in IPEF negotiations. Led by Reps. Jimmy Panetta (D-CA) and Jodey Arrington (R-TX), together with Jim Costa (D-CA), Dusty Johnson (R-SD), Ron Kind (D-WI) and Randy Feenstra (R-IA), the letter called on the administration to use IPEF to address barriers to U.S. agricultural exports, create mutually agreed-upon regulatory reforms that would benefit U.S. dairy and others in American agriculture, “include efforts to reduce tariffs on U.S. agricultural exports” and more.

The FARM Program released its 2021 Year in Review March 9, highlighting new initiatives and program area advancements.

“The FARM Program expanded its efforts to connect, support and recognize dairy farmers and program participants in 2021,” said Emily Yeiser Stepp, vice president of the FARM Program. “Our progress has enabled us to provide meaningful assurances of on-farm social responsibility to the entire dairy supply chain.”

The annual report chronicled the FARM Program’s many activities and accomplishments of the past year, which included adding the FARM Biosecurity program area, implementing the FARM Excellence Awards and developing a formal partnership program.

The complete 2021 Year in Review is available for download here. For a printed copy, contact dairyfarm@nmpf.org.

NMPF firmly rejected a proposal made public on March 3 by Global Affairs Canada that outlined “modifications” to its U.S.-Mexico-Canada Agreement (USMCA) dairy tariff rate quota (TRQ) allocations and has urged the U.S. government to do the same.

The Federation initially called out Canada’s attempts to circumvent its dairy market access obligations shortly before the trade pact’s implementation in July 2020. Following evaluation of input submitted by NMPF and the U.S. Dairy Export Council, the U.S. Trade Representative (USTR) launched the first-of-its-kind USMCA dispute settlement panel in May 2021 over Canada’s TRQ allocations. The panel’s ruling, released in January 2022, requires Canada to modify its TRQ allocation process to come into compliance with the trade agreement.

Unfortunately, Canada’s plan to revise its tariff-rate quotas (TRQs) falls well short of its USMCA requirements. For instance, the new proposal continues to exclude retailers and food service companies and to strongly favor Canadian dairy manufacturers. USTR had raised these specific concerns during the dispute panel process.

Given Canada’s proposal is more akin to a token gesture than an actual remedy to the industry’s concerns, NMPF is now working with allies in the House and Senate to urge USTR to reject Canada’s proposal. Multiple House letters are being sent to USTR to this effect.

As the first such dispute panel under the USMCA, USTR’s actions in this matter will set a powerful precedent on whether USMCA enforcement cases are up to the task of holding all Parties to the agreement to account. USTR will need to demonstrate that the USMCA enforcement process can deliver the reforms needed to bring about full implementation of the agreement.

The deadline for NMPF’s National Dairy Leadership Scholarship Program is fast approaching, with applications being accepted until Friday, April 15.

NMPF awards scholarships annually, ranging from $3,000 to $7,000, to outstanding graduate students (enrolled in Master’s or Ph.D. programs) who are actively pursuing dairy-related fields of research that are of immediate interest to NMPF member cooperatives and the US dairy industry at large.

Graduate students pursuing research of direct benefit to milk marketing cooperatives and dairy producers are encouraged to submit an application (applicants do not need to be members of NMPF to qualify). Scholarship recipients will be invited to present their research via webinar during the summer of 2022. Top applicants are eligible to be awarded the Hintz Memorial Scholarship, created in 2005 in honor of the late Cass-Clay Creamery Board Chairman Murray Hintz who was instrumental in establishing NMPF’s scholarship program.

Recommended fields of study include but are not limited to Agriculture Communications and Journalism, Animal Health, Animal and/or Human Nutrition, Bovine Genetics, Dairy Products Processing, Dairy Science, Economics, Environmental Science, Food Science, Food Safety, Herd Management, and Marketing and Price Analysis.

Applications must be received no later than April 15. For an application or more information, please visit the NMPF website or email scholarship@nmpf.org.

CWT member cooperatives secured 67 contracts in March, adding 6.7 million pounds of American-type cheeses, 37,000 pounds of butter, 611,000 pounds of whole milk powder and 895,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 74 million pounds of milk on a milkfat basis. These products will go customers in Asia, Central America, Middle East-North Africa, Oceania and South America, and will be shipped from March through September 2022.

CWT-assisted 2022 dairy product sales contracts year-to-date total 36.5 million pounds of American-type cheese, 37,000 pounds of butter, 4.0 million pounds of cream cheese and 14.7 million pounds of whole milk powder. This brings the total milk equivalent for the year to 477 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.