News for Dairy Co-Ops

An important phase of NMPF’s months-long campaign against the misuse of dairy terms by plant-based imitators concluded in late January with the end of a U.S. Food and Drug Administration (FDA) comment period. The agency received more than 10,000 comments weighing in on the issue.

NMPF provided a toolkit of resources to help members with comment submissions, including an instructional video, colorful graphics, a dedicated webpage and a social media marketing campaign as part of the campaign. Each element focused on the importance of FDA enforcing its existing labeling standards.

In its own comments, NMPF focused heavily on consumer confusion over the nutritional content of non-dairy imitators.

“Consumers are being misled about the nutritional content of plant-based imitators relative to real dairy products, creating marketplace confusion and inappropriately blurring well-defined standards of identity,” NMPF said. “That confusion creates a public health issue by causing harm to our nation’s children and, potentially, other consumers – a concern also raised by FDA commissioner Scott Gottlieb.”

Shortly before comments closed, NMPF released consumer research showing widespread consumer disapproval of dairy terms being appropriated by fake-milk producers and confusion over the nutritional content of milk versus plant-based imitators.

The survey conducted by IPSOS a global market research and consulting firm, found:

• Only 20 percent of all consumers said plant-based beverages should be labeled milk, as U.S. dietary guidelines do not recommend imitators as a substitute for dairy milk; even when limited to buyers of plant-based drinks, support for mislabeling rose to only 41 percent.
• About 50 percent of consumers mistakenly perceive that the main ingredient of a plant-based beverage is the plant itself; such drinks are mostly flavored water.
• More than one-third of consumers erroneously believe plant-based beverages have the same or more protein than dairy milk. Milk has up to eight times more protein than its imitators.

Earlier survey data, also from IPSOS, found that 61 percent of consumers believe FDA should restrict non-dairy beverage companies from using the term “milk” on their product labels. Only 23 percent said FDA should not limit the term “milk” to dairy products.

“NMPF has diligently encouraged FDA to act for over 40 years,” said NMPF. “FDA inaction has allowed marketplace confusion to fester while state and international bodies fill the breach. NMPF supports marketplace clarity and free speech.”

The comment period completed simply signals the next phase of NMPF effort on this issue, which, until resolved favorably by the FDA, will remain a crucial issue for dairy. NMPF will remain vigilant in spotlighting this issue, working with lawmakers, allied groups and public-health professionals to inform and educate.

New legislation introduced in mid-January would address dairy farm labor needs by reforming the immigration system.

The Agricultural Worker Program Act, introduced in both chambers of Congress, would provide farmers with access to a legal workforce, a key element in the solution to the dairy industry’s workforce challenges. Rep. Zoe Lofgren (D-CA) and Senate Judiciary Committee Ranking Member Dianne Feinstein (D-CA, the bill’s lead sponsors, have long been involved in the immigration policy debate.

“NMPF is eager to work with Congress on this issue, as we seek to establish a program for both current and future agricultural workers, which is another critically important component of the debate,” said Jim Mulhern, president and CEO of NMPF. “This bill enables that conversation to start and we commend its introduction.”

NMPF welcomed the introduction at the end of January of legislation sponsored by Reps. Glenn Thompson (R-PA) and Collin Peterson (D-MN), chairman of the House Agriculture Committee, that would allow whole milk in school nutrition programs.

The Whole Milk for Healthy Kids Act of 2019 (H.R. 832) has eight other co-sponsors, including Rep. Mike Conaway (R-TX), ranking Republican on the House Agriculture Committee.

Adding whole milk to school menus reflects research showing that such products benefit children and gives school administrators one more tool with which to develop healthy eating habits. NMPF jointly with the International Dairy Foods Association spoke out in support of the bill.

“Whole milk provides yet another way for children to receive dairy’s nutritional benefits as part of a healthy eating pattern,” said Jim Mulhern, president and CEO of NMPF. “This bill encourages the proper nutrition they need to lead healthy lives.”

The bill’s introduction comes after  regulatory changes finally return low-fat flavored milk in the school breakfast and lunch programs. Milk has been an integral part of school meal programs since they began, and NMPF has continually explained to policymakers that greater milk consumption equals better nutrition for America’s kids.

Two large dairy-importing markets present promising opportunities for the U.S. dairy industry in 2019. One, Japan, ranks just behind China as a buyer of U.S. dairy. The other, the United Kingdom, is a sizable dairy purchaser that gets a large share of those suppliers from Europe — though that may be changing soon.

NMPF’s goals on Japan include expanding existing market share and becoming a key foreign supplier to fill the country’s growing demand. These goals are particularly urgent this year as Europe, Australia and New Zealand have new trade deals with Japan, making it easier to sell into a market that imported nearly $1.2 billion worth of cheese in 2017 alone.

A study from the U.S. Dairy Export Council released in January projected that new trade agreements between Japan and other countries will put U.S. dairy exports at a competitive disadvantage, making a U.S.-Japan accord an urgent priority for dairy producers this year.

Lost sales in Japan for U.S. dairy exports may total $5.4 billion over 21 years without any action to rectify the current imbalance in trade access, according to the study conducted by Tokyo-based Meros Consulting. In contrast, the United States could roughly double its market share with a level playing field, according to the study, which was conducted by Tokyo-based Meros Consulting.

“These agreements will give our competition a significant economic advantage that will enable them to increase their market share in Japan, costing the U.S. dairy industry billions of dollars in lost sales,” said Tom Vilsack, USDEC president and CEO. “U.S. dairy farmers and processors strongly support the Administration’s launch of trade talks with Japan. We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture.”

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe announced plans to launch trade talks last September. But progress was delayed by the government shutdown, which slowed U.S. preparation, and by renewed U.S. focus on trade negotiations with China. NMPF is geared up to support the U.S. Trade Representative (USTR) in negotiations by providing input to the Trump Administration on dairy priorities; educating congressional allies on what dairy is looking for; and working with the U.S. food and agriculture community to push for a swift, yet strong, deal with Japan. In doing so, NMPF is fighting to preserve and grow exports.

“U.S. dairy farmers are facing economic hardships, and expanding opportunities overseas is the best way to counter that,” said Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). “A trade deal with Japan that significantly expands dairy access would make 2019 a brighter year.”

While Japan is the fourth-largest destination for U.S. dairy products, the United States currently sells close to nothing to the United Kingdom. America exported just $7 million worth of dairy products to the island nation in 2017, while importing $76 million during the same period. NMPF believes that Brexit and a U.S.-U.K. free-trade agreement can change that dynamic.

NMPF has told the administration this lopsided trade dynamic is driven by disparities in market access opportunity created by current tariff and nontariff policies – not a lack of interest or availability of product. NMPF has urged the removal of those barriers to level the playing field for U.S. suppliers. In comments filed with the USTR in December, NMPF noted:

“It is our hope that post-Brexit, the UK – traditionally a champion of free trade and of a science-based approach to decision making – can forge its own regulatory environment in a way that is more conducive to fair trade in safe food products than is the current EU regime. If that is the path the UK pursues, we believe that there is strong potential to expand bilateral dairy trade and bring benefits on both sides of the Atlantic.”

NMPF staff drove home this point and detailed how to get there in testimony at a USTR hearing on the U.S.-Japan agreement at the end of the month.

This year presents encouraging opportunities to gain momentum in negotiations with both Japan and the United Kingdom, making an investment in improved trade relations a worthwhile effort.

As U.S. dairy companies build relationships in new markets that desire high-quality American products, foreign regulatory red-tape has held back gains. NMPF works closely with the U.S. Dairy Export Council (USDEC) and the U.S. government to tackle these issues to ensure that American-made dairy products can reach customers abroad.

Solving these issues requires working with the foreign government to find a reasonable and commercially viable pathway, but sometimes it also involves work closer to home to ensure that the U.S. government is equipped to provide U.S. exporters with the support they need to comply with foreign regulatory requirements.

For example, in recent years a growing number of countries have begun requiring that the U.S. government provide a list of companies authorized to export to their country as a condition to keep the market open – or sometimes even before sales with that country can commence. To meet that need, existing U.S. regulations have required the U.S. government to undergo a time-consuming and overly burdensome rulemaking process, country by country, which acts as a constraint on export opportunities.

NMPF and USDEC have steadily pushed the U.S. Food and Drug Administration (FDA) and its inter-agency partners to address this shortcoming by streamlining the FDA process for creating lists of authorized exporters.

In response, FDA recently proposed cutting through a large part of that red tape by presenting a plan that would give the agency the authority to work with partners in other federal agencies to quickly compile these lists as needed without going through the bureaucratic rulemaking process each time.

NMPF and USDEC filed joint comments in support of this approach and urged FDA to continue to consider ways to maximize the efficiency of how the administration approaches dairy trade issues.

The U.S. Department of Agriculture (USDA) is gradually catching up on releasing data delayed by the partial government shutdown. The monthly margin under the now-expired Margin Protection Program (MPP) for November 2018 was $8.66/cwt., down $0.30 from the October margin. The November all-milk price dropped $0.40 from October, to $17.00/cwt., and the November MPP feed cost calculation was 10 cents lower than the previous month at $8.34/cwt. Under the new Farm Bill signed in December 2018, the program will go forward as the Dairy Margin Coverage (DMC) program. The USDA MPP Decision Tool currently projects that the margin will remain above the old $8.00/cwt. maximum margin coverage level during December 2018 and for every month during 2019 but will remain all this year below the new maximum DMC margin coverage level of $9.50/cwt. for the first 5 million pounds of a producer’s milk production history under the program, as shown in the chart. Under this current forecast, payments for $9.50 coverage, which would cost $0.15/cwt. for the year, would amount to just over $0.30/cwt. when averaged over the year. No date has been set for USDA to announce the sign-up period for DMC coverage in 2019.

The new Farm Bill also removes the previous restriction that prohibited producers from enrolling milk in both the MPP and the Livestock Gross Margin for Dairy (LGM-Dairy) program during the same month. It further allows farmers previously prevented from enrolling in MPP during 2018 due to this restriction to enroll retroactively in MPP and collect payments for 2018 for the months during which they were prevented from doing so.

USDA’s MPP margin forecasts can be accessed online.

Cooperatives Working Together (CWT) helped member cooperatives secure 60 contracts, resulting in sales of 11.7 million pounds of American-type cheeses, 707,684 pounds of butter and 2.2 million pounds of whole milk powder. The product is going to 38 customers in Asia, Central America, the Middle East, North Africa, Oceania and South America. The product will be shipped during the months of January through July 2019. These transactions will move overseas the equivalent of 140.6 million pounds of milk on a milkfat basis.

Assisting CWT member cooperatives to gain and maintain world market share through the Export Assistance program in the long-term expands the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively impacts all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

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 required documentation.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available online.

In what has become an annual affirmation of dairy farmers’ commitment to keeping antibiotic residues out of the milk supply, the 2018 U.S. Food and Drug Administration (FDA) report tracking residue levels continued to show a decline in positive drug test results.

Released in late December, the 2018 National Milk Drug Residue Data Base survey found that only 0.010 percent of all bulk-milk tankers – or 1 in 9,900 loads – showed any sign of animal antibiotic drug residues. On-farm vigilance in following drug withdrawal times has led to a steady decline in detectable antibiotic residues, with 2018’s figure falling from an already low level of 0.028 percent in 2008, a decline of over 65 percent in the last decade. All milk loads are tested for antibiotics. Any tanker that tests positive for a drug residue is rejected before entering a dairy plant and does not enter the market for human consumption.

In December, FDA announced that domestic sales and distribution of all medically important antimicrobials intended for use in food-producing animals decreased by 33 percent between 2016-2017. This reduction in sales volume indicates that ongoing efforts to support antimicrobial stewardship are having a significant impact.

In the past few months, NMPF and its NCIMS Committee have engaged in discussions about its participation in the 2019 National Conference on Interstate Milk Shipments (NCIMS) in St. Louis, Missouri.

The conference is a collaborative process by which the states, industry and federal government come together to determine how to best regulate the production of Grade “A” milk and milk products. NMPF has played a key role in the bi-annual conference since its inception.

On April 3 in Arlington, NMPF and members will meet in person to review any proposals for changes to the Pasteurized Milk Ordinance. Proposals were due Feb. 1 – NMPF submitted four. In past conferences, there have been more than 100 proposals up for deliberation.

The conference will take place in St. Louis from April 26-May 1 at the Hyatt Regency St Louis at the Arch. For more information about this year’s conference or NCIMS in general, visit the NCIMS website. For more information about participating in the conference, contact Clay Detlefsen.

NMPF is now accepting applications for its National Dairy Leadership Scholarship Program for academic year 2019-2020. The deadline to apply is Friday, April 5.

Each year, NMPF awards scholarships to outstanding graduate students (enrolled in master’s or Ph.D. programs) who are actively pursuing dairy-related fields of research of direct interest to NMPF member cooperatives and the greater U.S. dairy industry.

Graduate students pursuing research of direct benefit to milk marketing cooperatives and dairy producers are encouraged to apply. (Applicants do not need to be members of NMPF to qualify.)  The top scholarship applicant will be awarded the Hintz Memorial Scholarship, which was 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.

For an application or more information, please visit the NMPF website or call the NMPF office at 703-243-6111.