News for Dairy Co-Ops

NMPF’s momentum toward Federal Milk Marketing Order modernization grew in July as it actively engaged state dairy associations and member cooperatives in conversations on the future of milk pricing, building consensus on a critical undertaking for member co-op farmers and the entire dairy industry.

Helping to create a structured dialogue among dairy organizations about major policy issues, NMPF organized a state dairy association summit meeting on July 11-12 that gathered 45 farmers and executives from 22 state organizations in Chicago to gain a deeper understanding of pressing public policy challenges affecting other regions and learn more about how national issues are being handled at the local level.

FMMO presentations from Chief Economist Peter Vitaliano and Jim Sleper, an FMMO expert and veteran of past federal order hearings, served as the centerpiece of the event, which also featured in-depth discussions on farm labor; industry-driven environmental policy and sustainability initiatives; and best practices for public affairs advocacy and outreach.

Member outreach, meanwhile, expanded into exclusive webinars NMPF held in July to help farmers and cooperative staff better understand FMMO issues under consideration. The one-hour Zoom webinars provided detailed summaries of the issues being examined by our Federal Order Task Forces, including Class I Pricing; Dairy Products & Product Specification; Milk Composition; and Make Allowances.

The webinars gave participants the opportunity to pose questions, offer input and understand how task force recommendations may affect their respective cooperatives. Work continues this summer on these issues, with the goal of arriving this fall at a final recommendation package for consideration and review by the Economic Policy Committee and ultimately, the NMPF Board of Directors.

Dairy producers from NMPF member cooperatives nationwide are playing prominent roles in House Agriculture Committee listening session as the panel begins work toward the 2023 Farm Bill seizing the opportunity to elevate dairy priorities on farm policy, trade, sustainability and other issues.

Jim Boyle, a United Dairymen of Arizona member from Casa Grande, spoke at a session hosted by Rep. Tom O’Halleran (D-AZ) on June 25 in Coolidge, where he emphasized the need for more equitable treatment of dairy farmers of all sizes, including in pandemic relief programs to reimburse dairy farmers for COVID-19 losses. NMPF is working closely with Congress to provide additional reimbursements to producers participating the USDA’s Pandemic Market Volatility Assistance Program whose payments bumped against the program’s initial five-million-pound production cap.

Two NMPF board members also participated in a California session hosted by Rep. Jim Costa (D-CA) on July 7 in Fresno. Melvin Medeiros, a Dairy Farmers of America producer from Laton who sits on NMPF’s Executive Committee, and Joey Fernandes, a Land O’Lakes producer and NMPF board member from Tulare, urged Congress to craft policies that boost exports and aids dairy producers of all sizes in all regions.

On July 22, Northwest Dairy Association/Darigold board member Jeremy Visser and former NMPF board member Jim Werkhoven, also an NDA/Darigold member, spoke at a listening session in Carnation, Washington, held by Rep. Kim Schrier (D-WA). Visser and Werkhoven urged the committee to ensure that risk management tools work effectively for farmers of all sizes and urged robust funding for trade promotion programs, including the Market Access Program.

The committee’s final listening session of July took place in Northfield, Minnesota on July 25 at an event hosted by Rep. Angie Craig (D-MN). Steve Schlangen, Chairman of Associated Milk Producers Inc. and an NMPF executive committee member, emphasized the value the Dairy Margin Coverage program has provided to producers and urged the committee to strengthen the program. Charles Krause, a DFA farmer from Buffalo, MN, and KC Graner, a Land O’Lakes ag retail member-owner from Truman, highlighted topics including the Dairy Donation Program to provide dairy products to food insecure families and additional funding and policies to encourage and scale climate-smart ag practices.

“From trade, to sustainability, to providing an adequate safety net to producers of all sizes, the farmers who own NMPF’s member cooperatives are critical to conversations that affect all of agriculture in the next Farm Bill and beyond,” said Jim Mulhern, president and CEO of NMPF. “We commend our members from around the country for sharing their insights and thank Congress for making sure that dairy’s voice is heard as the next Farm Bill begins taking shape.”

Pennsylvania dairy farmer Clint Burkholder, owner of Burk-Lea Farms in Chambersburg, PA, and a part of NMPF member co-op the Maryland & Virginia Milk Producers Cooperative Association, hosted several members of Congress along with other area dairy farmers for a farm tour and roundtable discussion on July 15 on the importance of agricultural conservation.

Clint and his wife, Kara, are the third generation to farm on Burk-Lea Farms, milking 850 Holsteins and raising roughly 700 heifers. The Burkholders strongly prioritize both animal care and environmental conservation, housing their cows in freestall barns with sand bedding and using cover crops and no-till on their cropland to benefit soil and water quality. The farm also has a manure separation system and a water recirculating system to recycle water.

“We are grateful to the Burkholders for their leadership in this crucial discussion about the importance of voluntary, producer-led conservation and sustainability,” said Jim Mulhern, NMPF president and CEO. “Clint and Kara have a fantastic story to tell, and we’re glad members of Congress will have the opportunity to see their farm and hear their perspective.”

House Agriculture Committee Ranking Member Glenn “GT” Thompson (R-PA) and House Select Committee on the Climate Crisis Ranking Member Garret Graves (R-LA) led a delegation to the farm, visiting Burk-Lea Farms as part of a series of roundtables to receive stakeholder input and discuss policy opportunities on environmental and energy policy.

The roundtable also featured representatives of key dairy partner organizations, including Jayne Sebright, Executive Director of the Center for Dairy Excellence, and Jenna Beckett, Pennsylvania State Director and Agriculture Program Director at the Alliance for the Chesapeake Bay, which partners with Maryland & Virginia on the Turkey Hill Clean Water Partnership.

As the country has grappled with severe infant formula shortages brought on by a rare and temporary manufacturing issue, NMPF has worked to encourage a targeted and multi-faceted government response to increase domestic and imported formula supplies in the short-term while outlining the critical need for deeper policy reform to stimulate larger, more diversified U.S. formula production in the future.

NMPF staff in a July 14 meeting with Deputy Director of the White House National Economic Council Sameera Fazili underscored that the long-term solution to the crisis is boosting domestic production. Examining current policy and determining necessary changes to regulation around domestic processing to achieve that goal would best provide the type of production cushion the U.S. needs to ensure a formula availability crisis does not occur again in the future.

To complement its work with the White House and other agencies such as USDA and the U.S. Trade Representative, NMPF is continuing to advise the FDA leadership on weekly calls. The FDA has been providing certain infant formula importers “enforcement discretion,” which has had the effect of waiving certain FDA rules and regulations to enable short-term market access. NMPF has emphasized that these enforcement discretion efforts should only continue until the domestic market balance is restored.

NMPF staff also worked with Congress on the carefully tailored, time-limited Formula Act, H.R. 8351, which was signed into law July 21 after quick House and Senate passage. The law waives U.S. tariffs on certain infant formula imports until Dec. 31 to ensure that the domestic market has the necessary supplies to meet the needs of infants. NMPF insisted the legislation be short-term in light of the short-term nature of formula supply shortages and avoid granting tariff benefits for formula inputs that would simply displace U.S. dairy ingredients rather than work to bridge the remaining formula availability gap.

The average milk price in the United States dropped by $0.40/cwt in June from May’s all-time record level to $26.90/cwt. The Dairy Margin Coverage margin also fell by $0. 59/cwt from May to June, driven by a June feed cost that rose $0.19/cwt from the month before.

The milk price outlook for the remainder of 2022 has weakened in recent weeks, as dairy product price inflation has taken a toll on both retail and food service consumption. Since June 1, the futures-based average milk price forecast for the months of June through December has dropped by more than $2/cwt. Despite this, the futures do not currently indicate the DMC margins will drop below $11/cwt anytime during the remaining months of 2022. The DMC Decision Tool on the USDA/FSA website, on the other hand, is currently showing a much lower price forecast and a higher feed cost outlook, with margins falling slightly below $9.50/cwt during most of the months of July through November.

As the Ocean Shipping Reform Act (OSRA) takes effect and dairy supply chains continue to face turmoil, NMPF and partner organization the U.S. Dairy Export Council are seeking additional policy solutions while fostering cooperation with port authorities and other key supply chain players.

NMPF President and CEO Jim Mulhern and USDEC President and CEO Krysta Harden met July 7 with retired Army General Stephen Lyons, the new Ports and Supply Chain Envoy for the Biden Administration, to ensure the needs of U.S. dairy farmers remain a priority as OSRA, supply chain-relief legislation passed into law in June, is implemented and additional remedies are pursued, pressing him on a range of critical matters to ensure continued administration support solving supply chain issues.

NMPF also joined a coalition of 157 trade associations in urging the White House to provide support to parties locked in negotiations over a dock worker strike at West Coast ports. At issue is the expired contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.  A work stoppage, lockout or slowdown would come at a disastrous time for ag exporters.

NMPF also engaged the U.S. President and CEO of Mediterranean Shipping Company (MSC) Fabio Santucci on a wide-ranging call on July 12 to discuss the export crisis from the perspective of shippers. The meeting was part of a broader effort to identify opportunities to improve relations with carrier lines, which also included a meeting with Orient Overseas Container Line (OOCL) on July 8. In both meetings, NMPF focused on the challenges members face in container availability, cancellations, delays and fees and emphasized the negative impact these challenges had on relationships with import markets.

On the legislative front, NMPF provided input into and endorsed the American Port Privileges Act, legislation proposed  June 28 that would require U.S. ports to give priority to ships carrying U.S. exports. The legislation, introduced by Reps. John Garamendi (D-CA) and Jim Costa (D-CA), builds on OSRA and offers preferential berthing access by moving vessels that load 51% or more by volume or weight of American exports to the front of the loading queue. It also incentivizes ocean carriers to make second-leg voyages to ports like the Port of Oakland, the largest U.S. port for dairy exports.

All this comes as supply chain challenges continue to cascade across shippers and port facilities. As of late July, the Port of Oakland was closed due to protests over a new California trucking law. Meanwhile, even though several of OSRA’s helpful provisions have taken effect — including robust detention and demurrage payment guidelines – following them has not been instant, with the Federal Maritime Commission reminding shipping carriers on July 22 that compliance is necessary.

In that environment, NMPF and USDEC continue to pursue additional ways to advance policy and shipping-sector solutions.

EPA released July 14 the preliminary draft report on ammonia, hydrogen sulfide, and particulate matter emission models for dairy operations developed using data gathered during the National Air Emissions Monitoring Study (NAEMS). The report is now available via the NAEMS project site.

The report’s release will be followed by EPA’s draft report on Volatile Organic Compounds (VOC) emission models for dairy farms, set for release later this year. Once the second report is released, EPA will then take time to revise and improve the preliminary draft models for all animal types. Once all the models have been reviewed and revised, EPA will release the entire set of revised draft models for a formal public comment period currently scheduled for mid-year 2023 with finalization by that year’s end. NMPF will be reviewing the current and future drafts to provide comment to EPA.

The NAEMS was established in 2006 by a voluntary Air Compliance Agreement between the EPA and the pork, dairy, egg and broiler industries, to address the lack of scientific data. Funded through a one-time authorization through the national dairy checkoff, dairy farmers provided the financial support for NAEMS so that emissions data could be collected at select sites to first, accurately assess emissions from livestock operations and compile a database for estimation of emission rates, and second, promote a national consensus for emissions-estimation methods and procedures from livestock operations.

The National Dairy Farmers Assuring Responsible Management (FARM) Program hosted its annual conference for evaluators July 18-19 in Fort Worth, TX.

The two-day conference brought together nearly 70 FARM evaluators representing dairy cooperatives and processors throughout the country to discuss program updates and emerging research. The conference also offered attendees the opportunity to network with other evaluators and engage with program staff.

During the conference, evaluators heard from experts on a variety of topics relating to the FARM Program’s priority areas, including environmental stewardship, biosecurity, workforce development and animal care speakers. NMPF staff members Emily Yeiser Stepp, Sage Saffran, Miquela Hanselman, Jamie Jonker, Ph.D. and Beverly Hampton Phifer were among the subject matter experts who presented during the conference. Attendees toured the Fort Worth Stockyard and a nearby dairy farm and feedlot during their visit.

CWT member cooperatives secured 27 contracts in August, adding 3.7 million pounds of American-type cheeses, 110,000 pounds of butter, 44,000 pounds of whole milk powder and 866,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 44 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 July through January 2023.

CWT-assisted 2022 dairy product sales contracts year-to-date total 57.2 million pounds of American-type cheese, 459,000 pounds of butter, 6.5 million pounds of cream cheese and 28.6 million pounds of whole milk powder. This brings the total milk equivalent for the year to 797 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.

Pat Koch has joined NMPF as the organization’s finance and administration manager. In this role, she is responsible for vendor management and accounts payable for NMPF, CWT, the American Butter Institute, REAL® Seal program and contract administration for NMPF’s service contracts with Dairy Management Inc. and USDEC. Pat joined NMPF after relocating from Wisconsin, where she was Administrative Project Coordinator for M3 Insurance. Prior to that, she lived and worked in California. Her other business experiences include being the Lead Production Accountant for Pixar (A Bug’s Life), Financial Analyst for Disney and owning her own dog bathing and grooming business, Rub-A-Dub Dog Bath.