News for Dairy Co-Ops

NMPF is pleased that the House’s version of the Fiscal Year 2022 Agriculture-FDA Appropriations bill (H.R. 4356) approved July 29 includes a number of policy provisions and funding levels of significance to dairy.

Importantly, the bill continues a critical provision NMPF secured in last year’s measure to continue to allow schools to serve low-fat flavored milk.  The continuation of this language helps to build momentum for NMPF’s work with Congress and USDA toward a long-term approach to keeping this option, likely as part of upcoming child nutrition reauthorization legislation.

H.R. 4356 funds two programs intended to boost dairy consumption and innovation.

• It 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 households receiving support from the Supplemental Nutrition Assistance Program.
• It allocates $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.

The House bill also funds several other key programs for dairy and agriculture, providing $10 million for the USDA Farm and Ranch Stress Assistance Network aimed at connecting those working in agriculture to stress assistance and support programs, and $800 million for USDA’s ReConnect program which works to provide broadband service to eligible rural areas.

Finally, the accompanying committee report includes NMPF-led language intended to speed up approval and market delivery of animal feed additives that can reduce enteric methane emissions by 30 percent or more, a critical component of dairy’s Net Zero Initiative to become carbon neutral or better by 2050. While growing research demonstrates the effectiveness of these additives, current policy classifies them as drugs, slowing their entrance to the U.S. marketplace even though they move solely through the animal’s digestive tract. The House report language directs the Food and Drug Administration to seek solutions that would regulate these additives as foods, rather than drugs, speeding their approval and allowing dairy farmers to fully capture the potential of this innovative new practice.

NMPF looks forward to working with Congress to enact this measure into law before current government funding expires Sept. 30.

NMPF Board of Directors member and Idaho dairy producer Allan Huttema testified July 27 before the Senate Finance Committee on U.S.-Mexico-Canada Agreement implementation and the importance of subsequent enforcement for dairy provisions.

Huttema, who also serves as chair of the Darigold and Northwest Dairy Association boards, highlighted the need for close monitoring of USMCA trade partners’ implementation of the trade deal – including Canada’s dairy tariff rate quota allocations and milk protein exports, and Mexico’s integration of common cheese name protections and its troubling increase of unwarranted regulatory barriers. During his testimony, he also stressed the critical importance of building on the progress initiated with USMCA by pursuing additional agreements with key dairy markets such as the United Kingdom and various Asian markets.

“It has been a very long time since Congress passed a new free trade agreement, aside from USMCA for which we are very grateful,” Huttema said in his testimony. “Our industry needs new trade agreements with key export markets to counter our competitors, namely the EU and New Zealand. As our competition continues to ink new trade deals, the United States is increasingly left in the dust.”

NMPF worked closely with Huttema and Northwest Dairy Association/Darigold to help strongly spotlight the dairy industry’s priorities and concerns during the hearing. Seven committee members raised dairy issues throughout the hearing including robust comments of support in the opening remarks of the Committee’s Chairman and Ranking Member. The Senators’ comments spanned the gamut including Canada compliance concerns, Mexican nontariff barrier issues, broader market access goals, and common names threats.

“NMPF and the dairy producers it represents are grateful to the Senate Finance Committee for inviting Allan to discuss the benefits that the USMCA has brought U.S. dairy producers and cooperatives,” said Jim Mulhern, President and CEO of NMPF. “But as Huttema said so well, adequate enforcement is necessary to ensure American dairy producers are provided the access promised in the agreement. We are grateful to the Senate Finance Committee members for their advocacy in support of the recently initiated dispute settlement proceedings over Canada’s dairy tariff rate quotas (TRQs) – a critical step in enforcement of this agreement.”

The June margin under the Dairy Margin Coverage program dropped 65 cents from May’s margin to $6.24/cwt, which will generate a June payment of $3.26/cwt for $9.50/cwt coverage. The DMC feed cost calculation for June was lower by $0.16/cwt of milk from May, mostly on lower soybean meal prices, while the June U.S. average all-milk price took a larger than expected drop of $0.80/cwt from May, a return to April levels. The blended alfalfa hay price increased in June, for the ninth straight month.

The current futures-based price outlook indicates that the DMC margin will not rise much above $7.00/cwt through the summer and remain below $9.50/cwt through the end of 2021. USDA reported that estimated DMC payments for the 2021 program exceed $543 million as of July 26.

Ag labor reform activity heated up in July, with dairy at the heart of action crucial to advancing long-term goals of greater workforce stability.

In the House of Representatives, Congressmen Henry Cuellar (D-TX) and Dan Newhouse (R-WA) introduced an amendment to the FY 2022 appropriations bill funding the Department of Homeland Security that would allow dairy producers to access the H-2A agricultural guestworker program for the fiscal year. The amendment would remove the seasonality requirement for H-2A visas for the fiscal year and allow farmers working in year-round sectors to hire H-2A workers to supplement their domestic workforce during the fiscal year that begins Oct. 1.

Although the amendment was approved by the full House Appropriations Committee on July 13, that doesn’t make the much-needed reform real, as amendments to appropriations measures that focus on immigration reform typically are removed from final packages. Still, as explained by Claudia Larson, NMPF Senior Director of Government Relations, in a July 15 “Adams on Agriculture” podcast, the amendment’s positive effects go beyond the amendment itself, as it adds momentum to our wider effort bipartisan ag labor reform efforts.

On the Senate side, the Senate Judiciary Committee held a hearing July 21 focusing on the importance of immigrant farmworkers, with testimony from USDA Secretary Tom Vilsack followed by farmers and farmworker organization representatives. Former dairy farmer Linnea Kooistra of Illinois was invited to testify by Committee Chair Richard Durbin (D-IL) on her more than 40 years of experience in the industry, sharing the urgency of dairy’s labor needs.

NMPF in a statement thanked the committee and Durbin for highlighting the importance of immigrant farmworkers to the nation’s food supply and rural communities and called on the Senate to craft its own ag labor reform measure, building on and improving upon the Farm Workforce Modernization Act that passed in the House in March.

Beyond Capitol Hill, Vilsack and Rep. Antonio Delgado (D-NY) hosted an ag roundtable in dairy-dense Cobleskill, New York on July 16, hearing from farmers and farmworkers on the unworkability of the current ag labor system, with dairy producers speaking to the special challenges the industry faces. NMPF president and CEO Jim Mulhern commended USDA and Rep. Delgado for supporting ag labor reform and organizing the roundtable meeting, noting that conversations need “to turn into action in congressional corridors so that farmers and farmworkers can benefit from a workable labor system.”

NMPF will continue its work building bipartisan support for ag workforce reform legislation that will address dairy’s workforce challenges, including protecting current workers and providing dairy meaningful access to a guestworker program that allows producers to remain competitive.

Working with the U.S. Dairy Export Council (USDEC) and a group of agricultural organizations, NMPF is now seeing the administration and Congress seeking solutions to widespread concerns within dairy about ongoing ports congestion and unwarranted fees on exports.

President Biden issued an Executive Order, “Promoting Competition in the American Economy,” on July 15 that recognizes the need for executive branch action regarding consolidation and certain business practices in several industries, including the shipping sector. The order establishes the White House Competition Council to coordinate and advance efforts to limit overconcentration, monopolization, and unfair competition in or directly affecting the American economy. Relevant to the ocean shipping concerns, this Council will include the Secretaries of Transportation and Agriculture, as well as the chair of the Federal Maritime Commission (FMC).

The order also includes specific guidance to the FMC to “vigorously enforce the prohibition of unjust and unreasonable practices” regarding shipping fees. Additionally, it requests the FMC’s Shipper Advisory Committee to issue recommendations for improved enforcement of those and related rules, and for the FMC to consider issuing new regulations to improve export shipping conditions. It remains to be seen whether this process will be sufficient to prompt FMC to play a more proactive role in enforcing carriers’ compliance with the Shipping Act. The language regarding recommendations for improved enforcement and new regulations, however, is noteworthy and will help promote legislative options to address the challenge.

NMPF has hired a firm with expertise in maritime issues to closely monitor the implementation of this Executive Order and work with us in pressing for additional action from the administration and Congress.

On the Congressional front, NMPF, in coordination with USDEC, has provided input to proposed legislation from Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD) that extends stronger enforcement authority for the maritime commission to require ocean carriers to comply with guidelines on reasonable carrier practices. The draft legislation would force carriers to certify they are complying with commission guidelines on reasonable detention and demurrage fees, require the carriers to load product if it is at a port and does not exceed safe weight limits, and increases transparency into carrier action.

NMPF will continue to advocate for these important changes to the Shipping Act and continue to seek additional solutions to the ongoing crisis.

The National Dairy Farmers Assuring Responsible Management Program (FARM) hosted the annual Evaluator Conference for a second year in a virtual format July 20-21. Evaluators, participant managers and personnel joined the FARM team for two days of town hall updates, external speakers and a fully virtual cheese tasting.

To kick off the event Dr. Bickett-Weddle, Associate Director of the Center for Food Security and Public Health at Iowa State University, spoke alongside Jamie Jonker and Miquela Hanselman from NMPF to introduce FARM Biosecurity. Then, FARM Program Evaluators Janae Klingler from Maryland & Virginia Milk Producers Cooperative, Deb Gingrich form Michigan Milk Producers Association, and Mike MacHado, from Glanbia discussed engaging producers in the FARM Environmental Stewardship program area.

“Glanbia decided to roll out FARM ES to our producers in a two-pronged system,” MacHado said. “We began with a targeted approach to our more influential dairy producers so we could learn about the program while the producers were learning about the program, at the same time.”

Other strategies for producer engagement included sharing info about the evaluation in advance; talking about how FARM ES helps tell a farm’s environmental story; and timing evaluations to fit farmers’ schedules and for when data is readily available, such as tax season.

Dr. Mike Lormore, Head of the US Cattle Technical Services organization within Zoetis’ cattle business rounded out the first day’s speakers and gave an overview of the current drug residue prevention landscape in the industry and talked about the challenges facing dairy farmers in the space.

Matt Lange, a business consultant with Compeer Financial, presented on the connections between cow comfort and dairy farm profitability. Lily Edwards Callaway, Assistant Professor of Livestock Behavior and Welfare at Colorado State University and Michelle Calvo-Lorenzo, Chief Animal Welfare Officer with Elanco discussed different aspects of prioritizing dairy cattle fitness for transport.

Callaway says fitness for transport decisions can be challenging but with the right protocols in place and the right understanding of the end goal for the cull cows, the process can run smoother for the cows and the farmers who care for them.

To end the conference, Julie Sorensen Director of the Northeast Center for Occupational Health and Safety, a program of the Bassett Medical Center in Cooperstown, NY spoke about how small behavioral changes through the process of ‘nudging’ can impact safety on the dairy farm.

FARM is planning on hosting Evaluator Conference in-person next year but until then, will continue providing virtual updates – like the monthly Summer Series for State and Regional Checkoff Staff. The next one on FARM Environmental Stewardship will take place Aug. 4.

NMPF and USDEC in July steadily worked to prevent potential trade barriers in trade with Colombia, working with governments in both countries to keep commerce open.

The Colombian Ministry of Commerce, Industry and Tourism formally announced on June 21 the launch of an investigation into imports of U.S. milk powder to determine whether U.S. product has negatively impacted Colombia’s local industry.

Sparked by a vocal domestic industry, the Colombian government’s investigation appears to be a politically driven attempt to impose additional tariffs under a safeguard mechanism. NMPF and USDEC’s trade policy team, working with USDEC regulatory staff, met with USDA’s Foreign Agricultural Service in early July to urge the U.S. government to engage the Colombian government in opposition to any potential safeguard. NMPF and USDEC have also reached out to seek the support of Colombian buyers in opposition to any safeguard.

While safeguards are allowed to be imposed under the U.S.-Colombia bilateral trade agreement if a domestic industry is “injured” from increased imports, the Colombian government must follow specific procedures in doing so. NMPF and USDEC, along with several USDEC members, submitted official comments and relevant data to the Colombian government on July 12. The next step is to await the findings and ruling on the investigation.

The NMPF Scholarship Committee has selected three graduate students to receive scholarships as part of the 2021 NMPF National Dairy Leadership Scholarship Program. These students are conducting research in areas that will benefit dairy cooperatives and producers. Scholarships were awarded to:

• Alycia Drwencke, a Ph.D. candidate in Animal Behavior at the University of California – Davis, whose research focuses on the welfare implications of caustic paste disbudding and pain mitigation for dairy calves.
• Paulo Menta, a Ph.D. candidate in Animal Science at Texas Tech University, whose research focuses on predicting metritis cure as a path to reducing antimicrobial use in dairy cattle.
• Kelly Mitchell, a Ph.D. candidate in Nutrition at Ohio State University studying the stimulation of microbial protein synthesis by branched volatile fatty acids.

CWT member cooperatives secured 58 contracts in June adding 5.8 million pounds of American-type cheeses, 906,000 pounds of butter, 1.3 million pounds of whole milk powder and 833,000 pounds of cream cheese to CWT-assisted sales in 2021. These products will go customers in Asia, the Middle East, Oceania, Central America and South America, and will be shipped June through November.

CWT-assisted 2021 dairy product sales contracts year-to-date total 31.1 million pounds of cheese, 11.8 million pounds of butter, 5.1 million pounds of anhydrous milkfat (AMF), 8.7 million pounds of cream cheese and 18.3 million pounds of whole milk powder. This brings the total milk equivalent for the year to roughly 894 million pounds on a milkfat basis. All these products are scheduled to ship in the 2021 calendar year.

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.