News for Dairy Co-Ops

The Agriculture Environmental Stewardship Act, which advances key environmental policy priorities for dairy farmers, has made strides in both houses of Congress in the past few weeks, with introduction in the House of Representatives and advancement in a Senate committee.

Reps. Ron Kind (D-WI) and Tom Reed (R-NY), both of whom serve on the tax-writing Ways and Means Committee, introduced on June 16 the House version of the bill, which would create a 30 percent Investment Tax Credit for nutrient recovery technologies and biogas systems. Much of the measure initially advanced in the House last summer as part of a larger package called the Moving Forward Act. This legislation will help fulfill the goals of the dairy sector’s Net Zero Initiative by spurring greater on-farm energy production and enhancing environmental mitigation.

The House introduction followed Senate action that moves the bill even further in that chamber. Senator Sherrod Brown (D-OH) successfully secured the inclusion of the legislation as part of Senate Finance Committee Chairman Ron Wyden’s Clean Energy for America Act. The Senate Finance Committee successfully advanced the bill on May 26, positioning it for inclusion in a broader legislative package.

NMPF has long sought passage of this measure in partnership with the American Biogas Council to reduce dairy’s environmental footprint and help address nationwide water-quality challenges.

“The bipartisan Agriculture Environmental Stewardship Act recognizes the value that biogas systems can have for dairy producers of all sizes as they continuously improve their sustainability nationwide,” said Jim Mulhern, President and CEO of NMPF in a statement. “This new investment tax credit also incorporates nutrient recovery technologies, which can transform manure into fertilizer for crops and bedding for cows. These technologies are important, but expensive. This bill will help farmers incorporate these new technologies into their operations, for the benefit of everyone.”

NMPF applauded the Senate passage of legislation that aims to bolster the conservation and environmental efforts dairy producers are leading as they continue their everyday stewardship of air, land, and water resources.

The bipartisan Growing Climate Solutions Act, led by Senator Mike Braun (R-IN) and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), passed with overwhelming bipartisan support on June 24 by a vote of 92-8.

If passed, this legislation would create a USDA certification program that would permit the department to informally endorse technical service providers that can help farmers implement environmental stewardship practices that may generate carbon credits. The legislation would be invaluable for dairy farmers seeking to achieve the sector’s goal to achieve carbon neutrality or better by 2050 through dairy’s Net Zero Initiative.

“NMPF commends the United States Senate for passing the bipartisan Growing Climate Solutions Act by an overwhelming margin,” NMPF President and CEO Jim Mulhern said in a statement. “This important legislation will enable USDA to informally endorse technical service providers that help farmers implement stewardship practices that can generate carbon and other environmental credits.”

As a leader in ag labor reform, NMPF has been working with members of Congress and others on a bipartisan effort to enact legislation this year addressing dairy’s workforce challenges.

After helping secure House passage of the bipartisan Farm Workforce Modernization Act in March, NMPF has shifted focus to improving the bill in the Senate, with the goal of ultimately advancing legislation to the President’s desk. NMPF also has been working to build support for ag labor reform more broadly throughout the Senate, looking to increase congressional urgency. NMPF took part in two key momentum-building efforts this past month.

NMPF first worked with colleagues in the Agriculture Workforce Coalition steering committee to bring together nearly 300 groups to call on Senate Leaders Chuck Schumer (D-NY) and Mitch McConnell (R-KY) to take up ag labor reform in the Senate. The message noted how American agriculture’s workforce crisis has only intensified due to the COVID-19 pandemic, emphasizing the urgent need for Senate action. It also highlighted specific, longstanding problems with the H-2A agricultural guestworker visa program to be addressed in a Senate measure, including the need to grant dairy farmers and other year-round producers access to guestworkers. The coalition followed up its June 8 letter to leadership but sharing it with all Senate offices, helping to ensure agriculture’s dire need for ag labor reform is understood across the entire chamber.

NMPF, other agricultural organizations, and farmworker groups on June 16 met with Agriculture Secretary Tom Vilsack and Senators Michael Bennet (D-CO) and Mike Crapo (R-ID) for an ag labor reform roundtable. During the forum, stakeholders underscored the need for Senate action on its answer to the Farm Workforce Modernization Act, and both senators reiterated their commitment to introduce a measure that builds and improves upon the House legislation. Vilsack also pledged to prioritize ag workforce reform within the Biden Administration.

The May margin under the Dairy Margin Coverage program dropped 5 cents from April to $6.89/cwt, which will generate a May payment of $2.61/cwt for $9.50/cwt coverage, as increases in feed costs more than offset gains in milk prices.

The May U.S. average all-milk price rose by $0.80/cwt from April to $19.20/cwt, but the May DMC feed cost calculation also rose from a month earlier, by $0.85/cwt. This was the largest one-month jump in the margin program’s feed cost calculation since margin protection first became the main federal safety-net program for dairy in early 2014. Corn prices were higher in May by the equivalent of $0.64/cwt of milk in the formula, which was also the highest ever single-month increase since the inception of dairy margin protection in the formula’s corn-price component. Meanwhile, the blended alfalfa hay price increased by the equivalent of $0.15/cwt of milk in the formula, the highest single month increase in the formula’s alfalfa price component since premium alfalfa was added to it at the beginning of 2019.

The current futures-based price outlook indicates that the national all-milk price will not likely further rise much more than a dollar per hundredweight above its May level through the end of 2021, while the DMC program’s feed cost calculation may not recede much from May, thus raising the prospect that the margin could stay below $9.50/cwt for all of 2021. USDA reported that estimated DMC payments exceeded $446 million as of June 28.

NMPF is seeking a wide range of solutions, including legislative ones, to problems at U.S. ports that continue to harm U.S. dairy exports.

NMPF and the U.S. Dairy Export Council (USDEC) are calling for legislation to amend the Shipping Act to strengthen the Federal Maritime Commission’s (FMC) authority to enforce reasonable ocean carrier guidelines to ensure more normalized trade opportunities for U.S. agricultural exports, working with the Agriculture Transportation Coalition and Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD).

Months of NMPF and USDEC efforts to raise congressional attention to port issues and exports also bore fruit when the House Subcommittee on Coast Guard and Maritime Transportation held an oversight hearing on June 15 highlighting the ongoing delays and increased costs for exports at U.S. ports. NMPF, USDEC and other agricultural organizations have actively encouraged the subcommittee to take this step to bring more focus to bear on the challenges U.S. exporters face.

Members of Congress at the hearing heard from U.S. agricultural organizations, FMC Commissioners Dan Maffei and Rebecca Dye, and port operations groups. NMPF President and CEO Jim Mulhern said in remarks issued the same day that “dairy producers throughout the country are feeling the consequences of port congestion as delays in loading U.S. dairy exports onto carriers creates a chilling effect on farm-gate milk prices.” NMPF and USDEC have particularly urged the commission to require ocean carriers to certify that they are complying with the agency’s guidelines.

A new Food and Drug Administration (FDA) final rule on yogurt that takes effect July 12 strongly defends standards of identify, a key pillar of NMPF’s effort to ensure transparency in dairy-product labeling.

The final rule published June 9 amends the standard of identity for yogurt and revokes the standards of identity for low-fat and nonfat yogurt, modernizing the yogurt standard to allow for technological advances while preserving the basic nature and essential characteristics of yogurt and promoting honesty and fair dealing in the consumer interest. FDA strongly defends the importance of standards of identity, stating “any food that purports to be or is represented as yogurt, must conform to the definition standard of identity for yogurt” further proving that plant-based products need to be held accountable for illegally using dairy names.

This action was in part responding to a citizen petition submitted by the National Yogurt Association in February of 2000, and it’s the first time in recent history FDA has modernized a standard of identity. NMPF was pleased with the outcome this rule and FDA’s clear and precise response to the 32 issues it covers. The full preamble and rule can be found here.

NMPF’s trade policy team, collaborating with the USDEC, continues to work with the Biden Administration and Congress to press for a delay in onerous European Union (EU) new certification requirements for dairy and composite products, as well as new flexibility from the EU on its overly prescriptive mandates for imports.

NMPF staff have met repeatedly with USDA, USTR and FDA officials to emphasize the issue’s urgency of the issue, outline key concerns and impacts of the EU certification scheme, and explore routes forward. U.S. Trade Representative Katherine Tai has engaged on the issue in June, and USDA Secretary Tom Vilsack has been active in pressing the EU for relief as well.

To complement this effort, NMPF and USDEC worked with leading members of Congress to support a Congressional letter sent on June 14 to the EU Ambassador to the U.S. Stavros Lambrinidis. The letter urged the EU to extend flexibility to these regulatory changes that are unduly prescriptive and ensure that U.S. dairy exports to the EU do not come to an abrupt stop. An additional Congressional spotlight was placed on the urgent need for resolution on June 24 when Sen. Thune (R-SD) emphasized the urgency of relief on the certification issue with Deputy USTR Nominee Jayme White during his confirmation hearing. White assured the Senate Finance Committee that he would prioritize resolution of the issue.

NMPF continues to insist that this and the wider set of challenges the U.S. dairy sector faces in shipping to the EU must be addressed more effectively.

“U.S. exporters continually have to chase new mandates by the European Union to retain our current access, even when there are no safety concerns with American dairy products,” said Jim Mulhern, NMPF President and CEO. “Too often dairy trade with the EU is a one-way street. The EU’s frequent approach to import requirements is to mandate prescriptive procedures that U.S. dairy exporters need to make time-consuming changes to conform just to retain access to that market for our safe products. The products we export today are entirely safe; new EU mandates that would seek to force the U.S. to change our regulatory system match theirs would do nothing to enhance that.”

The National Young Cooperators (YC) Program hosted a half-day virtual Dairy Policy and Legislative Forum June 15. The capstone event, typically held in person in conjunction with NMPF’s June Board of Directors meeting, attracted nearly 100 attendees from 14 member cooperatives.

U.S. Representative David Valadao (R-CA) was the keynote speaker for the event, discussing leadership, policy and how his background in dairy inspired his interest in public service. NMPF staff experts contributed to the event and provided an overview of the role of dairy farmers in the policymaking process, updates on dairy policy issues and tips for how to be an effective dairy advocate. In a panel discussion, cooperative leaders and NMPF Board members Jackie Klippenstein of Dairy Farmers of America, Rob Vandenheuvel of California Dairies Inc. and Ken Nobis of Michigan Milk Producers Association shared their perspectives on the importance of dairy farmer leadership in policy discussions.

Now in its 71^st year, the National YC Program was created to provide up-and-coming leaders in the dairy industry with a better understanding of issues facing farmers and milk marketing cooperatives. The program’s goal is to educate and build leadership abilities in the next generation of dairy farmers. The virtual event was sponsored by Farm Credit.

The National YC Program will continue to offer monthly, 45-minute virtual webinars covering a variety of dairy policy topics throughout the summer. Employees and owners of dairy farms that are members of an NMPF member cooperative and under the age of 45, as well as co-op staff, are invited to participate.

The FARM Biosecurity webpage is now live and will offer resources, information for farmers and a timeline of deliverables for the newest FARM program area.

Funded through a cooperative agreement with the USDA National Animal Disease Preparedness and Response program, FARM Biosecurity will integrate select on-farm elements (like the enhanced biosecurity plan) of the Secure Milk Supply program into the FARM Program and will develop an everyday biosecurity plan and resources for dairy farmers.

FARM also is launching a new awards program to recognize farms and FARM evaluators who demonstrate excellence in their FARM Program. Award categories include Animal Care & Antibiotic Stewardship, Environmental Stewardship, Workforce Development, and FARM Evaluators. Nominations are open from July 1-Sept. 1. Farms or evaluators can be nominated by fellow dairy farmers, members of their communities, extension, cooperative or processor staff, veterinarians, themselves or others. Winners in each category will receive tickets for two individuals to attend the Dairy Joint Annual Meeting in Las Vegas, Nov. 15-17.

Visit the FARM Excellence Awards page for more details.

The FARM Program will host a series of monthly webinars for state and regional checkoff staff that will run July 7-Oct. 6. The webinars will offer attendees an opportunity to learn about the program and each specific program area. The FARM Virtual Evaluator Conference will also take place this month on July 20-21.

CWT member cooperatives secured 59 contracts in June adding 7.4 million pounds of American-type cheeses, 749,572 pounds of butter, 436,515 pounds of whole milk powder, 1.1 million pounds of cream cheese, and 231,485 pounds of anhydrous milkfat to CWT-assisted sales in 2021. These products will go customers in Asia, the Middle East, Oceania, Africa and South America, and will be shipped June through November.

CWT-assisted 2021 dairy product sales contracts year-to-date total 25.5 million pounds of cheese, 11.2 million pounds of butter, 7.3 million pounds of anhydrous milkfat (AMF), 7.9 million pounds of cream cheese and 17.2 million pounds of whole milk powder. This brings the total milk equivalent for the year to roughly 873 million pounds on a milkfat basis. All these products are scheduled to ship in the first eleven months of 2021.

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.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available at http://www.cwt.coop/membership.