News for Dairy Co-Ops

Yet another iteration of federal rulemaking guiding regulation of Waters of the U.S., released Dec. 30, drew criticism from NMPF and numerous agricultural groups for adding unnecessary confusion for farmers.

“NMPF is disappointed that once again dairy farmers, who every day strive to be leaders in environmental stewardship, may need to live under a WOTUS rule that is cumbersome, unclear and overly complicated,” NMPF said in a statement released Jan. 3. Because the EPA’s most recent iteration fails to resolve what is now a 50-year struggle to define what constitutes a water body subject to federal regulation under the Clean Water Act, our members will face continued uncertainty as they attempt to comprehend and comply with unclear regulations.

NMPF, a supporter of the Navigable Waters Protection Rule that had previously guided WOTUS policy, noted that the new rule was not a complete retreat from that regulation. “EPA’s listed exemptions at least try to address some of agriculture’s concerns over lack of clarity,” NMPF said in the statement. “Even so, EPA is reintroducing considerable ambiguity in this version of the rule as it attempts to determine what is a ‘Water of the US’ as seen in the treatment of ditches, ephemeral streams and groundwater, all of which were largely categorically out under the NWPR. NMPF fully anticipates continued litigation as a result of this rule.

NMPF called for congressional action to break the back-and-forth that has created confusion and brought added costs to dairy producers.

“It’s now clear that four successive administrations of both political parties have been unable to resolve this matter in a way that satisfies the broad range of stakeholders and provides long-term regulatory certainty which is badly needed. “Depending on the outcome of the Sackett case this spring, it may be time for Congress to step in in a bipartisan manner to provide clarity regarding which bodies of water are under the jurisdiction of the Clean Water Act.”

NMPF members gained support for their agriculture-leading sustainability efforts in the massive spending bill signed into law Dec. 29, as lawmakers included the Growing Climate Solutions Act and the SUSTAINS Act in its final fiscal year 2023 budget package.

The measures will help dairy farmers seek additional sustainability opportunities as they work to fulfill the dairy sector’s voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050.

“Environmental markets and conservation programs have the potential to meaningfully assist dairy producers as they work to meet their 2050 environmental stewardship goals,” said NMPF president and CEO Jim Mulhern in a statement. “The Growing Climate Solutions Act and the SUSTAINS Act will strengthen these important tools.”

The Growing Climate Solutions Act, authored by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, and Senator Mike Braun, R-IN, passed the Senate last June on a bipartisan vote of 92-8. The legislation enables USDA to register technical service providers that help farmers implement stewardship practices that can generate credits on environmental markets. Producers then will be better positioned to participate in these important markets. Reps. Abigail Spanberger, D-VA, and Don Bacon, R-NE, introduced companion legislation in the House.

The SUSTAINS Act, led by House Agriculture Committee Chairman-elect Glenn ‘GT’ Thompson, R-PA, passed the House Agriculture Committee in May on a bipartisan voice vote. The measure would allow private sector funds to supplement existing funding for farm bill conservation programs, which are continuously oversubscribed. The bill is an innovative approach to boosting funding for USDA conservation programs, which provide important technical assistance to dairy farmers for a variety of stewardship practices.

In addition to the sponsors of both bills, committee leaders Rep. David Scott, D-GA, and Sen. John Boozman, R-AR, also played important roles in finalizing the bipartisan package.

“We commend the leaders of the Agriculture Committees – Senators Debbie Stabenow and John Boozman and Reps. David Scott and GT Thompson – for working together to fashion this bipartisan agreement on agricultural climate legislation,” Mulhern said. “We look forward to working with them and their colleagues to build on this progress in the new year.”

After a steady – and loud – drumbeat of NMPF and USDEC insistence that Canada must honor its dairy obligations in the U.S.-Mexico Canada Agreement (USMCA), the U.S. Trade Representative (USTR) announced Dec. 20 that it is filing a new request for dispute settlement consultations with Canada.

The move will expand the scope of a second USMCA dairy dispute to include additional elements necessary to ensure that Canada fully complies with its USMCA market-access obligations. Since the United States launched its initial USMCA dispute panel in May 2021, NMPF and USDEC have fully and vocally supported USTR and USDA in their dogged attempts to secure for American dairy producers the agreement’s full negotiated benefits.

For over a year, Canada has violated USMCA’s tariff-rate quotas (TRQs) provisions by reserving most of its preferential dairy TRQs for Canadian processors. Canada’s revised approach to TRQs, released in March 2022, still violated the agreement – prompting USTR to pursue a second USMCA enforcement action.

While NMPF is grateful for USTR’s meticulous work that has led to this new announcement, Canada has a long history of restricting trade and not honoring existing agreements. NMPF and USDEC will push for retaliatory measures that make Canadian officials reconsider their actions should that continue.

NMPF joined with other agricultural organizations and farmworker groups in one final concerted effort in December to enact agricultural labor reform by the end of 2022, an effort that ultimately stalled but may create a framework for future progress.

Since March 2021, Senators Michael Bennet (D-CO) and Mike Crapo (R-ID) had been working to negotiate a bipartisan agreement for a Senate ag labor reform bill that would build upon and improve the House-passed Farm Workforce Modernization Act. The two Senators had made progress toward a bipartisan compromise bill by December – an effort supported in a letter signed by more than 350 ag organizations sent Dec. 6 – but were unable to resolve all issues needed to introduce a bipartisan measure.

From those discussions, Senator Bennet used the points of agreement he had come to with Senator Crapo as the starting point for a Bennet-only ag labor reform bill. That bill, the Affordable and Secure Food Act, gained NMPF’s support by addressing dairy’s two overarching workforce needs – providing protection for current workers and their families, and providing dairy access to the H-2A program – in spite of other weaknesses in the bill, such as its cap on the number of year-round worker visas.

NMPF participated in Sen. Bennet’s press conference announcing the bill’s introduction Dec. 15, and NMPF’s Claudia Larson joined a panel discussion broadcast by Agri-Pulse which focused on ag labor reform and the Affordable and Secure Food Act. In addition to NMPF-targeted outreach to numerous Senate Republican offices, NMPF also continued working with the Agricultural Workforce Coalition – an umbrella organization representing farm groups – to send a clear message to Senate leadership that ag-labor reform is urgent and necessary.

Those efforts fell short. Ultimately, Sen. Bennet’s measure was not included in the government spending bill to which it needed to be attached so it could receive a Congressional vote in 2022. However, the reform efforts and public pressure built in the 117th Congress have left a nationwide impression on the urgent need for ag labor reform. These efforts have laid an important foundation for future work in DC, and NMPF will continue leading the charge to ensure dairy’s needs are represented in any future reforms.

The November DMC margin was $10.89/cwt, eighteen cents higher than the October margin, as costs fell faster than prices.

The U.S. average all-milk price dropped $0.30/cwt in November from a month earlier to $25.60/cwt, while the DMC November feed cost was $0.48/cwt lower than the prior month, driven mostly, in equal measure, by lower soybean meal and premium alfalfa hay prices.

Available forecasts currently project the DMC margin will fall below $9.50/cwt during the first three quarters of 2023.  Enrollment for both calendar year 2023 DMC and Supplemental DMC closes on Jan. 31.

NMPF executive vice president for policy development & strategy Jaime Castaneda highlighted U.S. dairy’s strong sustainability commitments in Brussels Dec. 5-7 while meeting with American and European agriculture stakeholders under the U.S.-EU Collaboration Platform on Agriculture, a position reinforced in U.S. meetings later in the month.

The collaboration, launched by U.S. Secretary of Agriculture Tom Vilsack and European Union Agriculture Commissioner Janusz Wojciechowski in November 2021, created a new forum for representatives from both the United States and the European Union to better collaborate and address common issues affecting agriculture, in key part to head off future trade conflicts.

Castaneda participated in the conference’s first panel. Castaneda also met with the Directorate-General (DG) Office for Health and Food Safety while in Europe to discuss the EU’s changing dairy import certificate requirements and the importance of smoothly implementing any new requirements. Following the conference, Castaneda joined the DG Office of Agriculture’s Unit Head and Deputy Director for the Americas to discuss ongoing trade issues, including the EU’s continued abuse of geographical indications to monopolize common cheese names around the world.

On Dec. 15, Shawna Morris, NMPF’s senior vice president for trade policy, joined Castaneda and Nick Gardner, senior vice president for sustainability and multilateral affairs with the U.S. Dairy Export Council to present to approximately two dozen European embassy officials on the progress U.S. dairy sector has made on sustainability in the past 15 years. Morris underscored the importance of a trade-friendly, incentive-based approach to new policies the EU is exploring in this space. The presentation also highlighted the sector’s goals and strategies and reinforced U.S. dairy’s reputation as a global trailblazer on climate and sustainability in agriculture.

NMPF staff and allied organizations played critical roles in keeping transportation networks running in early December, as the prospect of a rail labor strike heightened concerns of an already strained supply chain completely derailing. To ensure that the rail service remained uninterrupted for dairy producers who rely on consistent rail movement both for sourcing feed and moving finished product, NMPF took member concerns to Capitol Hill.

Four rail labor unions voted in November to reject a tentative agreement arbitrated by the Biden Administration, authorizing a strike that could have begun as early as Dec. 9. To avoid a costly rail service shutdown, NMPF, the U.S. Dairy Export Council (USDEC) and allied groups pressed hard for congressional intervention via a series of letters and meetings. Congress passed legislation implementing the tentative agreement, with President Biden signing the law on Dec. 2 and averting a rail shutdown.

The rail efforts, while significant, were only one facet of NMPF’s recent supply chain efforts. NMPF and USDEC on Dec. 13 wrote to Federal Maritime Commission Secretary William Cody with feedback on the agency’s proposed rulemaking on detention and demurrage billing requirements for ocean-bound shipments.

The Ocean Shipping Reform Act of 2022, passed in June and championed by NMPF and USDEC, provided an important foundation in confronting abuses leveled by ocean carriers on dairy shippers. However, smart, balanced implementation is still needed to ensure that dairy exporters are fully protected against unfair fees, which cost significant resources to resolve.

In the letter to Secretary Cody, NMPF and USDEC recommended against allowing marine terminal operators to bill shippers directly, which could force shippers to resolve disputes with an unknown party, rather than with carriers – with whom they have an established relationship. NMPF also pushed for the FMC to require additional information on invoices, including how and by when a shipper would need to contest a charge, and to clarify the timeframes for when carriers could issue detention and demurrage charges.

NMPF submitted comments Dec. 21 to USDA’s Natural Resources Conservation Service urging it to prioritize critical opportunities for dairy as it implements new climate-smart conservation funding in the Inflation Reduction Act enacted in August.

In its letter, NMPF urged USDA to develop new initiatives focused on manure and feed management, both of which will help dairy farmers advance their sustainability leadership as the sector works to fulfill its voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050.

NMPF supported the Inflation Reduction Act’s $20 billion in landmark new funding for farm bill conservation programs.

“Dairy farmers seize environmental sustainability opportunities whenever possible,” said Jim Mulhern, president and CEO of NMPF. The funding increases “better position dairy farmers to effectively implement the dairy sector’s Net Zero Initiative and fulfill its 2050 environmental stewardship goals.”

USDA conservation programs offer important voluntary, incentive-based assistance to dairy farmers as they carry out multiple stewardship practices, but more can be done to emphasize systems and technologies that can yield meaningful environmental benefits for dairy producers. In its letter, NMPF urged USDA to “give priority to innovative approaches to manure and feed management, both of which are significant areas of opportunity for dairy producers as the industry strives to become GHG-neutral or better by 2050.”

NMPF’s submission recommended a new multi-pronged manure management initiative within the Environmental Quality Incentives Program, which received the largest share of the new funding provided in the Inflation Reduction Act. This initiative, if implemented, would focus on reducing methane emissions associated with manure handling and storage by targeting investments in waste separation and handling as well as methane digesters, which can capture as much as 80 percent of the methane from a waste stream. The initiative would also include a cap and flare component, emphasizing an approach better suited to those dairy operations that do not have the capacity for larger technologies like methane digesters.

NMPF also urged an enhanced focus on feed management to help dairy farmers augment their work to reduce enteric methane emissions, which can comprise as much as one-third of a dairy farm’s greenhouse gas footprint. NMPF’s recommendation included a focused effort to better educate NRCS staff on innovative new feed management strategies to increase the number of technical service providers that can work directly with producers on feed management plans.

NMPF will work closely with USDA as the department moves forward with implementation of this important new funding and will also partner with Congress in the upcoming farm bill to further target conservation programs toward meeting dairy’s environmental stewardship needs.

CWT member cooperatives secured 25 contracts in December, adding 7.0 million pounds of American-type cheeses and 37,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 65.2 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean and Oceania, and will be shipped from December 2022 through June 2023.

CWT-assisted 2022 dairy product sales contracts year-to-date total 99 million pounds of American-type cheese, 657,000 pounds of butter, 8.8 million pounds of cream cheese and 30.7 million pounds of whole milk powder. This brings the total milk equivalent for the year to 1.223 billion 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.

Karen Jordan, DVM and chair of NMPF’s Animal Health and Wellbeing Committee, and Dr. Jamie Jonker, NMPF’s chief science officer, met with USDA APHIS Administrator Kevin Shae and other USDA animal health leadership Dec. 6 to discuss animal-health issues for U.S. dairy farmers, focusing on trade and biosecurity.

Jonker spoke about the importance of USDA advocacy for science-based World Organization for Animal Health and Codex Alimentarius standards allowing the safe trade of dairy products, noting that U.S. dairy exports will be nearly 20% of domestic production and $10 billion in 2022. He thanked USDA for the initial funding for the federal-state-industry partnership that developed the Secure Milk Supply Plan. He also reported on the progress being made to advance and integrate Everyday and Enhanced/Secure Milk Supply biosecurity into the National Dairy FARM Program due to the NADPRP cooperative agreement.

Jordan requested acceleration of development of a milk bulk tank Foot and Mouth Disease (FMD) test which could be used to augment the Secure Milk Supply Plan to assist in maintaining continuity of business for dairy farmers should an FMD outbreak occur in the United States. USDA also handles health certification for dairy export certificates, which are vital to maintain and expand trade.

Jordan also reported on the progress of the NMPF-led multi-stakeholder task force with dairy farmers, veterinarians, and state and federal animal and public health officials to address the transmission of Bovine Tuberculosis from cattle to humans and humans to cattle. She also stressed the overall importance of USDA cattle health programs for dairy farmers, including revising and updating the National Tuberculosis Eradication Program standards to meet contemporary challenges of disease eradication, including disease transmission, lower disease incidence, and changing production systems.

Jonker expressed hope that USDA would publish the long-delayed update to the National Tuberculosis Eradication Program standards soon. He also discussed the importance emerging animal health and safety issues including the Asian longhorn tick and black vultures, which are a threat to dairy cattle on pasture, and long-term issues like animal identification and disease traceability to dairy farmers.