News for Dairy Co-Ops

Seventh-generation Pennsylvania dairy farmer Lolly Lesher emphasized the importance of farm bill safety net programs and called for milk pricing improvements at a House Agriculture Committee hearing held on June 22 to review the dairy provisions of the farm bill.

The Farm Bill, a twice-a-decade reauthorization of USDA programs, includes provisions important to dairy farmers such as risk management, pricing policy and support, conservation, trade promotion, nutrition, and rural development programs.

“The Dairy Margin Coverage (DMC) program is a significant improvement over its predecessor and has been a strong safety net for dairy farmers during difficult times. It offers producers affordable coverage for margin levels that reflect the milk price and feed cost challenges they face,” Lesher said in her testimony.

Lesher, a member-owner of Dairy Farmers of America, testified on NMPF’s behalf. She thanked Ranking Member G.T. Thompson (R-PA) for his years of advocacy on behalf of dairy farmers in Pennsylvania and beyond, and for his key role in overhauling the dairy safety net during the last farm bill. She also expressed her gratitude to Chairman David Scott (D-GA) for his work and for convening the hearing.

Created to replace the previous Margin Protection Program at NMPF’s urging in the 2018 Farm Bill, USDA’s Dairy Margin Coverage program offers effective margin protection for small and mid-sized farms and affordable catastrophic coverage for large farms. Lesher, whose family milks 240 cows in southeastern Pennsylvania, said in her written testimony that the program “has provided important security to [her] family’s farm” and noted that her family has purchased the maximum available coverage every year.

She also urged the committee to make additional updates to reflect current production. Congress enacted Supplemental Dairy Margin coverage payments to account for modest production increases since 2014, and Lesher urged the committee to build on this progress in the next farm bill.

Lesher highlighted the need for improvements to the Federal Milk Marketing Order (FMMO) system, citing the heavy revenue losses incurred by dairy farmers nationwide from a milk pricing change made in the previous farm bill as an example of the need for change.

“The change made to the Class I mover combined with the government’s heavy cheese purchases cost dairy farmers over $750 million in revenue in the last six months of 2020 alone,” she said. Lesher detailed the asymmetric risk that farmers bear under the current mover, with limited upside risk and a potentially limitless downside.

Meanwhile, NMPF is leading a nationwide effort to craft consensus on a wide range of FMMO improvements, including the Class I mover, that can be taken to USDA for consideration in a federal order hearing. “We recognize that for our efforts to succeed, we must all work together, giving a bit to get a bit. It’s just too important for our future,” Lesher added.

“We appreciate the opportunity to share what has worked well—and what needs to be modernized—to meet the needs of dairy farmers in the 2023 Farm Bill,” said Jim Mulhern, president and CEO of NMPF.  “As Lolly Lesher outlined during today’s hearing, dairy producers need continued access to an effective safety net, flexible risk management tools that protect all farmers, and an update to the FMMO system that addresses the unequal risk dairy farmers bear compared to processors during unusual market volatility. We look forward to our continued work with the House Agriculture Committee and USDA on these and other farm bill priorities in the coming months.”

President and CEO Jim Mulhern participated in a White House ceremony on June 16 to celebrate President Biden’s signing of the Ocean Shipping Reform Act (OSRA).

The new law comes after more than a year’s worth of intense effort and has been among NMPF’s highest priorities, bolstered through its partnership with the U.S. Dairy Export Council (USDEC) and a joint member export supply chain working group. The organizations helped to build an influential coalition of agricultural and transportation allies, crafting a bipartisan group of congressional supporters and educating the administration about dairy’s export supply chain crisis.

OSRA directs the Federal Maritime Commission to craft regulations that prohibit ocean carriers from “unreasonably” declining shipping opportunities for U.S. exports and requires certification of detention and demurrage fees that have been incurred outside of U.S. exporters’ control. The commission must also craft regulations that bar retaliation against U.S. shippers. To learn more about additional OSRA protections and the FMC’s pivotal role, see NMPF’s Member Alert here.

OSRA’s passage shifts NMPF’s and USDEC’s focus to the next, equally critical step of ensuring the legislation is swiftly implemented and that the maritime commission develops strong rules to crack down on carrier misbehavior. NMPF and USDEC will be heavily engaged in rulemaking processes and will continue to push for robust congressional oversight of the implementation phase.

NMPF and USDEC is also continuing work with allied groups to address delays, congestion, equipment and labor shortages, major gaps in data, high costs and other issues hampering U.S. exports. As part of those ongoing efforts, NMPF’s Executive Vice President for Policy Development and Strategy Jaime Castaneda participated in the Agriculture Transportation Coalition’s 34th Annual Meeting in June, taking part in the members-only strategy session on agricultural export priorities to identify additional steps in resolving the ongoing crisis.

NMPF’s Board of Directors took additional steps toward modernizing the federal milk pricing system at their meeting June 7-8 in Arlington, VA.

The board reviewed and provided feedback on a series of recommended improvements generated by a member task force of Federal Milk Marketing Order experts.

The task force formed four committees earlier this year to assess specific areas in need of modernization, including Milk Composition; Dairy Products and Product Specifications; Make Allowances; and Class I Pricing. The task force unanimously recommended 10 proposals to the Economic Policy Committee in those four areas, which now are being shared more broadly with NMPF membership and other stakeholders for further discussion and refinement. The goal to create a single package of recommendations for final approval by the full Board of Directors later this year.

The Board also welcomed two new directors: Joe Coote from Darigold/Northwest Dairy Association and Dan Rosen from Ellsworth Cooperative Creamery.

The USDA-reported national average all-milk price for May was $27.30/cwt, topping the April price by $0.20/cwt for a new monthly record, the third consecutive month of all-time-high prices.

The May DMC feed cost eased back by two cents from April’s record to $14.79/cwt, boosting the May DMC margin by $0.22/cwt to $12.51/cwt, the highest monthly margin since the DMC program began in January 2019.

The milk price outlook for the remainder of 2022 has been weakening slightly in recent weeks, as high dairy product wholesale prices have caused a spike in retail dairy price inflation, generating concerns about whether consumers may respond by buying fewer dairy products. All current projections of the DMC margin continue to anticipate that it will remain above the $9.50/cwt maximum coverage level under the program for the remainder of 2022.

Sheryl Meshke, co-president and CEO of Associated Milk Producers Inc. and a member of NMPF’s board of directors, told a Senate subcommittee on June 9 that the U.S. government must pursue additional market access opportunities and address export supply-chain delays in order for the U.S. dairy industry to keep up with its global competitors.

“In pursuing exports, the U.S. dairy industry faces experienced and well-established competitors who have been exceptionally active with free trade agreements,” Meshke told the Senate Agriculture Committee’s Subcommittee on Commodities, Risk Management, and Trade. “The U.S. needs to get back in the game and craft an approach to pursuing comprehensive trade agreements.”

Meshke also emphasized the importance of enforcing existing trade agreements, particularly U.S. dairy export access to the Canadian market under the U.S.-Mexico-Canada Agreement.

American dairy risks losing its competitiveness, as the global playing field slowly tilts against the United States due to competitors’ trade agreements with key dairy importing markets, Meshke noted in her testimony. She also said U.S. trade negotiators need to target priority markets for expanded access, including Southeast Asia, Japan, China, the Middle East and the United Kingdom.

Meshke also emphasized the importance of combating non-tariff trade barriers, particularly the European Union’s (EU) aggressive efforts to confiscate food and beverage names in global markets by abusing geographical indications systems. She urged a strong defense of common food names: “We can’t wait any longer for the U.S. government to proactively defend the use of common food and beverage names against aggressive global efforts by the EU to restrict the use of generic terms we rely on.”

“As Sheryl outlined so well, we are now seeing dairy consumption grow at exceptional rates in many markets around the world,” said Jim Mulhern, president and CEO of NMPF. “The U.S. dairy industry is well-positioned to meet the expanding global demand for sustainably produced dairy products. But to seize those opportunities, we must take a leadership role along with like-minded countries – advancing policies and crafting trade agreements that can deliver real benefits for dairy farmers.”

NMPF trade staff spent much of June encouraging the Biden Administration’s new Indo-Pacific Economic Framework (IPEF) to move forward while pushing it to go even further toward ensuring more-open markets for U.S. dairy producers.

IPEF encapsulates a regional trade agenda focused on advancing supply chain resilience, sustainability, economic growth, and competitiveness. Depending on its outcomes, IPEF’s effects on U.S. dairy exporters could range from tiny to quite notable. The collection of interested countries includes seven of the United States’ top ten dairy export markets, but the framework announced May 23 does not address tariff reductions

NMPF and USDEC have broadcasted these concerns to the administration during a Farmers for Free Trade virtual townhall, comments, and direct communications to trade negotiators. The organizations also have been leading drivers behind bipartisan Congressional engagement on the issue, supporting the work of scores of Members as they press the administration to prioritize agriculture in IPEF negotiations and outline examples of both tariff and nontariff opportunities.

An agreement that does not directly tackle tariffs might still deliver meaningful benefits for dairy, and NMPF and USDEC continue to advocate for inclusion of specific nontariff items that could help improve trade flows. These include protecting the use of common cheese names and cutting red tape by streamlining import requirements. Also, NMPF and USDEC note that tariff reductions could be possible under IPEF should the U.S. Trade Representative secure unilateral foreign tariff reductions that benefit all World Trade Organization (WTO) members, including the United States. Such a reduction would provide U.S. exporters with greater parity with competitors that have already secured comprehensive tariff agreements throughout the region.

The U.S.-Taiwan Initiative on 21st-Century Trade announced June 1 faces similar hurdles. Taiwan was the 12th largest market for U.S. dairy exports last year, buying $140 million of U.S. dairy products, primarily higher-value exports such as fluid milk and cheese.

While NMPF welcomes all initiatives aimed at increasing trade, the Taiwan proposal does not contain plans to reduce tariffs. NMPF believes stronger economic ties must include additional trade opportunities for the dairy sector and will continue to press for these policies at every opportunity.

The House Appropriations Committee passed its Agriculture-FDA spending bill for Fiscal Year 2023 on June 23, the first congressional move toward enacting spending for next year’s federal budget. NMPF is remaining active in advocating for dairy as appropriations moves forward, working for more funding for dairy producers of all sizes in the Pandemic Market Volatility Assistance Program and additional members to assist farmers. Highlights for dairy producers include:

• Nutrition – The measure continues to fund at $3 million the Healthy Fluid Milk Incentives Projects authorized in the 2018 Farm Bill to create pilot programs to increase milk consumption among SNAP households.
• Dairy Innovation – The measure provides $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. This is the same level of funding enacted for fiscal year 2022.
• Broadband – The measure includes $450 million for the ReConnect program, the USDA Rural Development program working to provide broadband service to eligible rural areas.
• Farm Stress – The measure allocates $10 million for the Farm and Ranch Stress Assistance Network, a USDA program aimed at connecting those working in agriculture to stress assistance and support programs.
• Standards of Identity – Noting concern with FDA’s failure to enforce dairy standards of identity, the committee report repeats previous language pointing to FDA’s current process regarding plant-based product labeling and calling on FDA to continue working toward enforcement.
• Dairy in WIC – The committee report also highlights the repeated finding in the Dietary Guidelines for Americans that dairy foods are both nutrient-dense and underconsumed, including among the WIC-population, in the report’s discussion of FNS updating its food allowance for the WIC program.

NMPF also worked with several members, including House Agriculture Appropriations Subcommittee Ranking Member Andy Harris (R-MD) and Reps. David Valadao (R-CA) and Josh Harder (D-CA), to give priority to NMPF’s request for additional funding for USDA’s Pandemic Market Volatility Assistance Program to further support those farmers who were impacted by the program’s five-million-pound limitation. Subcommittee Chairman Sanford Bishop (D-GA) committed to working with those lawmakers to address this issue as the bill advances.

The House is expected to pass its appropriations measures before members return home for the August in-district work period, with the Senate expected to release its bills this summer. NMPF will continue building bipartisan support for dairy programs and issues as the appropriations process moves forward, working to ensure the continuing advancement of the priorities of dairy farmers and the cooperatives they own.

The U.S. Securities and Exchange Commission’s (SEC) proposed rule mandating extensive climate disclosures from publicly traded companies could undermine the dairy industry’s progress toward its sustainability goals and create far-reaching technical and financial challenges for American dairy farmers and their cooperatives, NMPF said in comments submitted June 17.

“Dairy farmers are on the frontlines confronting the many challenges associated with climate change and remain committed to making progress to reduce the industry’s environmental impact,” said Jim Mulhern, president and CEO of NMPF. “The SEC rule, as written, could hamper our ability to make progress through the industry’s robust, voluntary greenhouse gas (GHG) assessment program, and jeopardize our goal of reaching GHG neutrality by 2050.”

SEC’s proposed rule, “The Enhancement and Standardization of Climate Related Disclosures for Investors”, would require public companies to disclose GHG emissions, including emissions from upstream and downstream activities in its value chain, known as Scope 3. NMPF cautioned SEC in its comments that the inclusion of Scope 3 emissions disclosure within the rule is premature, and risks undermining the extensive efforts the dairy industry has made toward developing trust and buy-in for its voluntary GHG assessment program through the National Dairy Farmers Assuring Responsible Management (FARM) Environmental Stewardship program.

NMPF also pointed out that U.S. dairy farmers have been leading environmental stewards for decades, tending their animals, land and water with great care. Thanks to improvements in productivity, new technologies and evolving best management practices, the environmental impact of producing a gallon of milk requires less water, less land and has a smaller carbon footprint than ever before. Still, the industry remains committed to its continued progress, devoting resources to programs, research and services that advance its 2050 goals to achieve industrywide neutral or better greenhouse gas emissions, optimize water usage and improve water quality.

To track progress and reach these important environmental goals, the FARM Program in 2017 launched the Environmental Stewardship platform. The program provides a comprehensive estimate of GHG emissions and energy use on dairy farms with a suite of tools and resources for farmers to measure and improve their environmental footprint. FARM ES is the dairy community’s platform for a consistent, unified approach to GHG measurement that is free and accessible to all dairy farmers. Currently, over 80 percent of U.S. milk is handled by cooperatives and processors participating in FARM Environmental Stewardship.

NMPF also emphasized the significant financial burden the proposed rule would have on dairy farmers and their cooperatives related to the collection and aggregation of on-farm GHG data.

NMPF and Newtrient submitted joint comments to USDA Natural Resources Conservation Service on June 15 supporting a modernized “NRCS Conservation Practice Standard 592 – Feed Management.” The portion of the feed management standard which addresses air quality was expanded to include ammonia, volatile organic compounds, greenhouse gases, and dust to be consistent, which will expand the opportunity for dairy farmers to use that standard for enteric methane-reducing feed additives.

Dairy farmers currently don’t use the Feed Management practice. NMPF and Newtrient anticipate that changes to the practice standard, along with updated cost share rates, will result in a practice that works for dairy farmers and result in reduced methane emissions. In reviewing data from NRCS related to dairy producers’ use of NRCS conservation programs between FY2014 and FY2020, dairy operators across the country had one contract for a Feed Management plan and only three associated with the use of the Feed Management Conservation Practice Standard. None of the contracts had financial assistance obligations associated with the Feed Management practices.

The most significant positive impact on the environment that in animal agriculture is the incredible efficiency that has been achieved by U.S. producers. This efficiency can be improved through the feed and feeding practices as new advances are made. The potential of using this NRCS Feed Management Conservation Practice Standard (592) is tremendous, particularly if it encourages the goal of increasing efficiency while reducing the environmental impact.

NMPF’s Young Cooperators (YC) met in Washington, D.C. for the first time since 2019 on June 6-7 for the National YC Program’s capstone Dairy Policy and Legislative Forum, held in conjunction with NMPF’s June Board of Directors meeting.

Forty-five young and beginning dairy farmers from 15 states and representing ten member cooperatives participated in the two-day event, which included discussions about political engagement and dairy policy issues, along with training on how to be an effective advocate and spokesperson for dairy. YCs then headed to Capitol Hillto speak with members of Congress and their staffs about NMPF priorities including agricultural labor reform, dairy labeling, market access and the supply chain crisis.

Since 1950, the National YC Program has provided emerging dairy leaders with a better understanding of issues facing farmers and their cooperatives. The program is open to younger and beginning dairy farmers who own or are employed on a dairy farm that is a member of one of NMPF’s member cooperatives.

The YC Program hosts monthly webinars that are open to dairy farmers and industry affiliates and available at no cost. The 45-minute webinars, each covering a different topic, are held every month. This month, the program will host a webinar discussing new tools and resources for safety and health risk management. Registration is available here.

In addition to the Dairy Policy and Legislative Forum, NMPF also offers YCs two other in-person opportunities annually. The program will host a workshop and reception at World Dairy Expo on Oct. 6 in Madison, Wisconsin. Later that month, it will hold its annual Leadership and Development Program Oct. 23- 24 in Denver, Colorado. Click here and check the National YC Program box to stay up to date on program activities.

The governance committees of the National Dairy Farmers Assuring Responsible Management (FARM) Program continue to make meaningful progress on updates to Version 5 of the Animal Care program that culminated in the third in a series of Industry Town Halls held June 30.

The FARM Animal Care Task Force, comprised of dairy farmers, veterinarians, dairy welfare academics, and cooperative and processor staff have met over a dozen times during the past year to review existing standards, results of an industry-wide survey and other sources of feedback to inform recommendations to improve the program. Thus far, task force meetings have highlighted the following areas:

• Refinement to the how broken tails are evaluated
• Establishment of a moderate lameness benchmark
• Maintenance of the pain management for disbudding standard and heightened industry adoption
• Consistency in pain management expectation for painful procedures of disbudding, castration and branding
• Outcomes-based approach to nutrition provisions

The task force presented their initial recommendations for modifications to the program to the NMPF Animal Health and Well-Being Committee on June 8-9 following the NMPF Board Meeting. Once approved, the revisions will be put forward for a public comment period beginning after Labor Day that will be open through the end of October. A final proposal from the Committee will be presented to the NMPF Board of Directors in March 2023, and the new program will be implemented starting July 2024.

At their meeting June 7, the NMPF Scholarship Committee selected two graduate students to receive scholarships as part of the 2022 NMPF National Dairy Leadership Scholarship Program. These students are conducting research in areas that will benefit dairy cooperatives and producers. Scholarships were awarded to:

• Catherine McVey, a PhD candidate in Animal Biology at the University of California – Davis, whose research focuses on a model-free approach to extracting complex behavioral patterns from precision livestock farming data streams through unsupervised machine learning. Catie is this year’s recipient of the Hintz Memorial Scholarship given to the top scholarship candidate.
• Kirby Krogstad, a PhD candidate in Animal Science at Michigan State University, whose research focuses on nutritional strategies and feed additives to modulate inflammation and health of dairy cows.

NMPF will host a webinar this summer to introduce this year’s scholarship recipients and offer the opportunity to hear more about their research. Details will be shared in the coming weeks.

Abdullah Ibrahimzada has joined the staff as the FARM Program’s information system analyst. In this role, he will manage the ongoing relationship with the program’s technology provider.

Ibrahimzada comes to NMPF after five years of program management experience with USAID, World Bank, and The Borgen Project. He is a Fulbright and Campus France scholar and holds a master’s degree in Agricultural Economics from the University of Arkansas and another master’s degree in Marketing and Management from Lille Catholic University, France. Ibrahimzada speaks five languages and loves soccer.

CWT member cooperatives secured 51 contracts in June, adding 5.6 million pounds of American-type cheeses, 254,000 pounds of butter and 600,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 62 million pounds of milk on a milkfat basis. These products will go customers in Asia, Central America and Middle East-North Africa, and will be shipped from June 2022 through January 2023.

CWT-assisted 2022 dairy product sales contracts year-to-date total 53.4 million pounds of American-type cheese, 348,000 pounds of butter, 5.6 million pounds of cream cheese and 28.5 million pounds of whole milk powder. This brings the total milk equivalent for the year to 754 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.

NMPF led eleven national agricultural, anti-hunger, nutrition and medical groups in a virtual listening session June 30 urging the White House to place a high priority on access to affordable, diverse and nutritious foods when it holds its Conference on Hunger, Nutrition, and Health this September.

The NMPF-organized session, which included the International Dairy Foods Association, the National Dairy Council and other allies, offered the White House both expertise and lived experience from a wide range of organizations on how important increased access to food and a diverse range of food choices are to fight nutrition insecurity and improve nutrition-related health.

“When the White House announced its Conference on Hunger, Nutrition, and Health, we at NMPF were excited by the potential for this conference to help propel meaningful advancement toward achieving the conference’s stated goals of ending hunger, increasing healthy eating and physical activity, and decreasing the prevalence of diet-related diseases in America,” said NMPF President and CEO Jim Mulhern in remarks at the session.

Also sharing stories and potential solutions at the listening session were American Academy of Pediatrics, American Society for Nutrition, Feeding America, Food Research and Action Center, and International Fresh Produce Association, the School Nutrition Association and United Egg Producers.

The effort was part of a broader drive to provide input to the White House as it crafts its strategy to end hunger and increase healthy eating and physical activity by 2030, which the White House has said it plans to release at the September conference.