News for Dairy Co-Ops

NMPF joined other key agriculture stakeholders on May 10 in sending a letter to the top Democrat and Republican in each chamber of Congress, urging them to not alter or eliminate long-standing tax code provisions fundamental to farm businesses.

“Because assets in agriculture are typically held by one owner for several decades, resetting the basis on the value of the land, buildings, and livestock on the date of the owner’s death under a step-up in basis is important for surviving family members and business partners to ensure the future financial stability of the operation,” said the groups in the letter, which came from NMPF and organizations including the American Farm Bureau Federation and the National Association of State Departments of Agriculture. The letter was addressed to House Speaker Nancy Pelosi, D-CA; House Minority Leader Kevin McCarthy, R-CA; Senate Majority Leader Chuck Schumer, D-NY; and Senate Minority Leader Mitch McConnell, R-KY.

Woven throughout Congress’s discussion of a broad, multi trillion-dollar infrastructure package are proposals for how to pay for the bill’s programs and projects, including several changes to the tax code. Two potential tax-code changes could impact farms and farmer assets in specific, yet common circumstances. The first would alter estate tax provisions, which could increase the taxes paid on inherited farm assets. The second changes how capital gains are taxed – repealing the “step-up basis” currently used – which could increase the taxes due on capital gains made on farm and farm-related assets.

While NMPF recognizes the importance of investing in the nation’s infrastructure, the negative impact of these proposed tax changes on producers and their businesses is too vast. These changes could make it more difficult for dairy producers to continue their operations without tax-caused disruption, including buying and selling land and other assets and for families to hold on to their farms through generational changes.

NMPF also joined 115 groups on May 25 organized through the Family Business Estate Tax Coalition (FBETC) in calling on the Leadership of the Senate Finance Committee and the House Ways and Means Committee to oppose these proposed tax changes. “Repealing stepped-up basis by imposing capital gains taxes when assets transfer ownership at death would force many family-owned businesses to liquidate assets or lay off employees to cover the tax burden,” the group’s statement then said. The coalition then urged committee leaders to “protect family-owned businesses from tax increases by defending stepped-up basis and opposing any changes to current law.”

NMPF was pleased to see both Democrats and Republicans in the House send their own messages to their chamber’s leadership, calling for both proposed changes to be dropped from consideration in infrastructure discussions, and will continue to be active in the discussions as they evolve.

Following a year of persistent advocacy, NMPF celebrated the Office of the U.S. Trade Representative’s (USTR) May 25 announcement that the agency will request a Dispute Settlement Panel be established to consider Canada’s failure to comply with dairy tariff-rate quota (TRQ) provisions in the U.S.-Mexico-Canada Agreement (USMCA).

This milestone move is a powerful message not only in the Canada dairy context but also in demonstrating to the world the willingness of the United States to use enforcement procedures when it’s clear a country is violating its agricultural trade commitments.

Since mid-2020 Canada has maintained dairy tariff-rate quota (TRQ) measures that run counter to its market access obligations under USMCA, including by awarding the bulk of the TRQs to Canadian processors, not providing fair or equitable procedures for administering the TRQs and not giving retailers any access to the TRQs. While the United States tried to resolve the matter through consultations with Canada, Canada refused to change its policies. With the broad backing of the U.S. dairy industry and clear bipartisan support from Congress for holding our trading partners accountable, USTR has now launched USMCA’s first dispute settlement case. As a result, a panel of judges will evaluate Canada’s actions and determine whether they must be revised to come into compliance with USMCA.

NMPF’s work on reaching this point has been extensive and includes working with the U.S. Dairy Export Council to support U.S. government negotiators during USMCA negotiations to secure the NAFTA upgrades on dairy trade that USMCA put in place.

Once it became clear that Canada had failed to abide by its commitments post-USMCA implementation, NMPF dug in further to arm U.S. government staff with information and to launch wide-spread outreach urging policymakers to support strong enforcement action. A marker of the high level of bipartisan support for just such a step was seen last August in a set of letters sent to USTR by Congress: one letter signed by 25 Senators, and a companion message from 104 members of the House of Representatives, both urging enforcement action be pursued. USTR commenced the first step in the enforcement process in December by initiating formal USMCA consultations with Canada regarding dairy market access. Canada refused to change.

Subsequent Congressional outreach and a direct meeting between the newly appointed U.S. Trade Representative, Ambassador Katherine Tai, and NMPF Chairman Randy Mooney and President and CEO Jim Mulhern on May 3 helped elevate USTR’s awareness and focus on the need for a dispute settlement case to bring Canada into compliance. As part of that process, NMPF worked with USDEC to coordinate a dairy industry letter signed by 68 dairy cooperatives, processors, state associations and dairy trade associations, pushing USTR take the necessary next steps. Meanwhile, Reps. Ron Kind, D-WI, and Tom Reed, R-NY, on May 21 joined with six other leaders, primarily from the House Ways and Means and Agriculture Committees on a bipartisan message to USTR urging further enforcement action.

Additional members of Congress have signaled their support. Rep. Elise Stefanik, R-NY, also sent a letter May 21 encouraging USTR to act and multiple members of Congress voicing their support for further dairy Canada market access enforcement steps during Amb. Tai’s trade oversight hearings this past month. This work, together with outreach from dairy voices across the country over the past year, ultimately resulted in the long-anticipated May 25 announcement that a formal panel will be established.

While the formation of a USMCA dispute settlement panel is a key part of ensuring U.S. dairy producers are provided the access USTR has worked hard to negotiate, it is only one piece of the puzzle dairy needs to be successful global. Even while celebrating this big step forward, NMPF continues to advocate consistently for the importance of expanding market access opportunities elsewhere in the world as well and for ensuring that our existing markets remain open and unimpeded for American dairy products.

As the school year ends across the country, a bipartisan coalition of 57 House members asked USDA to ensure that school children have access to low-fat flavored milk as the new school year begins in three months. NMPF worked with letter authors Reps. Joe Courtney (D-CT) and Glenn “GT” Thompson (R-PA) to emphasize the importance of aligning USDA school milk regulations with the recommendations of the brand-new Dietary Guidelines for Americans (DGAs), the latest of which were finalized by USDA in January.

As with past versions, the DGAs continue to recommend consumption of low-fat and fat-free milk, with allowance for limited amounts of added sugar to these and other nutrient-dense foods.  Accordingly, USDA has the ability under current law to allow schools to serve low-fat flavored milk.  After USDA removed 1% flavored products a decade ago, the option was reinstated as part of a 2018 rulemaking, which then was overturned in court last year on issues unrelated to the dairy provisions.

NMPF was able to preserve the low-fat flavored milk option for the current school year through congressional appropriations but is now working with Congress to bolster this position for the longer term. The letter helps reinforce NMPF’s message and signals that Congress will be closely watching the issue as the Senate and House prepare to take up child nutrition legislation.

NMPF Chairman Randy Mooney and President and CEO Jim Mulhern met with U.S. Trade Representative Katherine Tai on May 3 to discuss the dairy industry’s trade policy priorities.

Issues addressed included the importance of expanding market access opportunities around the world for American dairy products and enforcement our agreements, including ensuring Canada fully implements its tariff-rate quotas for U.S. dairy consistent with the U.S.-Mexico-Canada Agreement (USMCA). Mooney and Mulhern also raised concerns with EU policies that restrict the use of common food names by American cheese producers.

In a follow-up letter to Ambassador Tai, NMPF laid out how the dairy industry’s commitment to sustainable dairy production and the real-world progress America’s dairy farmers have made to reduce greenhouse gas emissions can further USTR’s climate and sustainability goals if more export opportunities are available to U.S. dairy products.

NMPF, working with the U.S. Dairy Export Council, continues to advocate for the importance of opening and expanding global markets, enabling American dairy farmers to compete on a level playing field and meet the world’s dairy needs with high-quality, sustainable products.

The April payment under the Dairy Margin Coverage program fell $0.48/cwt from March to $2.56/cwt for $9.50/cwt coverage, as higher milk prices that easily outstripped rising corn costs boosted margins. The April U.S. average all-milk price rose a full dollar per hundredweight from a month earlier to $18.40/cwt, while the April DMC feed cost calculation was $0.52/cwt higher, due almost entirely to a higher corn price.

Current futures prices indicate that the DMC program margins will continue to rise at a moderate pace, thus reducing monthly payments, and surpass $9.50/cwt by late summer. USDA reported last week that as of May 24, estimated DMC payments for this year have exceeded $344 million.

NMPF’s Board of Directors has welcomed five new members this spring, from four member cooperatives. New members include: Melvin Medeiros and Ed Gallagher from Dairy Farmers of America; Duane Hershey from Land O’Lakes; Tony Freeman from Northwest Dairy Association; and Craig Caballero from United Dairymen of Arizona.

They are replacing retiring board directors Case Van Steyn and Greg Wickham of DFA; Levi Ransom of LOL; Leroy Plagerman of NDA; and Keith Murfield of UDA.

NMPF worked throughout May to leverage regulatory and legislative opportunities to improve dairy farmer access to financial resources as well as voluntary ecosystem services trading markets that enhance affordability and revenue opportunities, continues its advocacy on behalf of U.S. dairy farmers as global leaders in addressing climate change,.

These most recent efforts included comments to USDA to improve NRCS conservation practice standards to meet real-world dairy farm needs; meeting with FDA to streamline regulatory approval of feed additives which may reduce enteric methane; and working through coalitions such as the Food and Agriculture Climate Alliance to advocate for legislation to make access to voluntary ecosystem service markets easier.

NMPF on April 29 submitted a series of comments to USDA on the Executive Order on Tackling the Climate Crisis at Home and Abroad. President Biden issued the Executive Order on Jan. 27 “to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents.  Domestic action must go hand in hand with United States international leadership, aimed at significantly enhancing global action.” The comments spoke to the ability of U.S. dairy and U.S. agriculture in general to be environmental solutions to climate change. The three sets of comments are:

• NMPF-Newtrient joint comments specific to US dairy
• Food and Agriculture Climate Alliance specific to US agriculture
• Biotech coalition comments specific to biotechnology

NMPF hosted the first in its series of virtual training sessions for the Dairy Voice Network May 25. The program, which aims to help farmer leaders further develop their roles as dairy advocates, kicked off with a “Spokesperson 101: How to Lead Dairy Through a Media Minefield” training led by NMPF’s Alan Bjerga, senior vice president of communications.

The Dairy Voice Network is tasked with equipping a select group of dairy farmers with the tools necessary to communicate to the broader public about issues important to the dairy community. Participants are undergoing training through one-on-one coaching and virtual sessions on working with the media to effectively communicate dairy’s message in interviews.

The program’s 31 participants, representing 11 member cooperatives and 17 states, were nominated by their cooperatives earlier this year and reflect a diverse dairy community, with farms ranging in size from 45 to 10,000 cows. The second session, held June 1, featured a panel on subject-matter expertise from NMPF senior vice presidents Paul Bleiberg and Shawna Morris, who respectively lead NMPF government relations and trade functions, along with Chief Science Office Jamie Jonker; and an interviewing sessions and training led by Bjerga and Senior Vice President for Membership Services and Strategic Initiatives Chris Galen.

NMPF invites business and organizations to reach their customers and key audiences through sponsoring an episode of the Dairy Defined podcast. NMPF’s biweekly podcast is essential listening for dairy and the broader agriculture community. Guests on crucial dairy-related topics have included USDA Secretary Tom Vilsack, the chairs of both the House and Senate agriculture committees, experts on key agricultural issues such as climate change, and more. Dairy Defined has even profiled an Olympic athlete training for the Tokyo games on a dairy farm.

The Dairy Defined podcast is available on all major listening platforms and online at www.nmpf.org. Since its launch in September 2019, its episodes have been downloaded over 25,000 times. Sponsorship will help significantly expand that reach and help build true partnerships with its listeners.

Sponsorship includes:

• Exclusive sponsorship of an episode, including your organization’s name and logo in the episode description published online;
• A 30-second advertisement scripted by the sponsor and read by the podcast host;
• Recognition on Twitter, Facebook and LinkedIn, with a minimum of one post per platform; and
• $150 in social media advertising promoting each sponsored episode.

Click here to request more information.

 The Professional Animal Auditor Certification Organization (PAACO) has certified the National Dairy Farmers Assuring Responsible Management (FARM) Animal Care Program as an approved animal welfare evaluation. PAACO provides training and certification credentials for animal welfare auditors and audits for all sectors of food animal production.

“PAACO’s certification of FARM Animal Care affirms our commitment to the highest standards of animal welfare,” says Emily Yeiser Stepp, Vice President of the FARM Program. “This provides another layer of assurance to the supply chain that FARM is a comprehensive and rigorous tool that ensures dairy products are produced responsibly.”

To receive PACCO certification, the FARM Program went through a thorough review process of its Animal Care Version 4 standards, resources and evaluator training materials as compared to standards set by the PAACO Board of Directors. The review ensured that the FARM Program evaluation includes all the key components required for evaluation of livestock animal welfare and is committed to continuous improvement.  “The FARM program has met requirements for audit structure, auditor expectations, and oversight and measurement of animal outcomes, facilities, and documentation” said PAACO Executive Director Collette Kaster.

FARM staff will also participate as members of the instruction team for PAACO dairy welfare auditor trainings. PAACO auditor certifications provide professional development opportunities for those looking to grow their animal welfare evaluating skillset.

PAACO was developed in 2004 in response to the growing use of animal welfare audits by the retail and food service sectors. This created the need for training, certification, and continuing education. Since its creation, PAACO’s vision is to be the trusted authority on animal welfare auditing, providing consistency and science-based training of auditors as well as rigorous, science-based audit standards.

Registration is now available for the 2021 FARM Evaluator Conference which will be held virtually July 20-21. The conference will include program area specific Town Halls and sessions focused on best practices for safety training, the profitability of quality animal care and Biosecurity – FARM’s newest program area. Evaluation resumption will be a significant focus of the discussion time. Evaluators will also be able to ask questions, learn about the FARM Program’s progress since last year, and meet new staff members.

NMPF and the FARM Program will host this year’s Virtual Dairy Industry Stakeholder Summit on July 14-15. All companies and organizations who serve the dairy industry are invited to join the virtual meeting for an organizational overview and discussions on current policy work, FARM program priorities and industry initiatives. Sessions will run from 10 a.m.-1 p.m. ET each day.

The 58 contracts Cooperatives Working Together member cooperatives secured in May added 3.4 million pounds of American-type cheeses, 524,700 pounds of butter, 908,305 pounds of whole milk powder, 1.6 million pounds of cream cheese, and 4,409 pounds of anhydrous milkfat to CWT-assisted sales in 2021. These products will go customers in Asia, the Middle East, Oceania, and South America, and are being shipped May through October.

CWT-assisted 2021 dairy product sales contracts total 17.9 million pounds of cheese, 10.4 million pounds of butter, 7.1 million pounds of anhydrous milkfat (AMF), 6.9 million pounds of cream cheese and 16.6 million pounds of whole milk powder. This brings the total milk equivalent for the year to over three-quarters of a billion pounds on a milkfat basis. All these products are scheduled to ship in the first ten 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.