News for Dairy Co-Ops

The margin in January for the Dairy Margin Coverage program, the main federal dairy safety-net initiative, was $7.14 per cwt, down from $8.78 per cwt in December. That generated a payment of $2.36 per cwt for $9.50 per cwt coverage for January – which, by itself, was already more than enough to repay the full cost of signing up for the program at the maximum coverage level for the entire year.

The January all-milk price dropped another dollar from December to $17.50 per cwt. Meanwhile, the remaining $0.64 per cwt monthly drop in the margin was generated almost entirely by increases in corn and soybean meal costs. The one-month increase in the margin’s feed cost was the highest for the DMC as well as for its predecessor, the Margin Protection Program, which was initiated in 2014.

With current futures prices indicating that the all-milk price won’t rise above January’s level for several months and that corn will keep rising and soybean meal will not get much cheaper over the same period, the program is expected to generate substantial payments in 2021.

NMPF filed comments Feb. 22 urging FDA to withdraw a proposed traceability rule that identifies what foods are high-risk and would warrant additional recordkeeping requirements to improve their traceability.

FDA proposed that all cheeses other than hard cheese should be considered high-risk foods.  FDA’s risk-ranking model, under the proposal, would place “pasteurized cheese, other than hard” as the riskiest of all foods in the marketplace — even above cheese made from raw milk, a finding NMPF thought was absurd.

This questionable ranking was partly caused by FDA adding a new criterion to its risk ranking model beyond what Congress had instructed it to do in the Food Safety Modernization Act, landmark food-safety legislation that became law in 2011. FDA added consumption data to the model, which had the effect of increasing a food’s risk rating due to its popularity. NMPF stated in its comments that popularity and risk do not go hand-in-hand — nor can FDA override what Congress has directed.

The comments also took issue with the agency’s interpretation that cheese made with pasteurized milk is not a food that has been subjected to a kill step, and therefore that full recordkeeping provisions should apply. Food subjected to a kill step has significantly fewer recordkeeping requirements, according to the proposed rule.

This rule, if put into effect, would increase consumer confusion, as FDA has long told consumers to choose pasteurized cheeses over raw-milk cheeses based on food safety concerns.

NMPF reviewed comments filed by the International Dairy Foods Association and supported their filing in its comments.

NMPF staff, working together with the U.S. Dairy Export Council (USDEC), joined several agriculture organizations last month to press the Federal Maritime Commission to help address severe shipping-related challenges plaguing dairy and other U.S. agricultural sectors.

A shift in U.S. consumer preferences for stay-at-home goods has led to a surge in imports from Asia, driving up container demand around the Pacific Rim. Meanwhile, several agricultural exporters, including U.S. dairy, are struggling with cancelled shipments, exorbitant detention and demurrage charges, and broken contracts as shipping companies are moving containers and vessels quickly back to Asia. Freight costs are netting 20 to 30 times more from Asia to the U.S. than vice versa and carriers are restricting availability of containers to rural points of origin in the interior U.S., preferring coastal drop-off and pickup.

In multiple meetings with maritime commissioners in February, NMPF and other organizations representing agricultural exporters stressed the urgent need to step-up regulatory compliance on detention and demurrage guidelines issued last year and to explore ways to address the container shortage issues. Alongside these organizations, NMPF is pursuing congressional outreach to encourage tougher FMC enforcement while working with other sectors to evaluate the need for changes to legislation to better equip the FMC to deal with such issues.

The US International Trade Commission (ITC) unanimously voted Feb. 11 to reject import restrictions on blueberries from Mexico, Canada, Argentina, Chile and Peru, ending the threat of retaliatory tariffs against U.S. dairy exports.

In testimony before USTR in August, NMPF Senior Vice President Jaime Castaneda urged the commission to avoid putting U.S. dairy producers again in the crosshairs of a trade dispute with Mexico. Per U.S. census data, over $1.4 billion of U.S. dairy products were sold to Mexico in 2020 – a market that would be at risk if tariffs on blueberry imports from Mexico are imposed.

NMPF in December joined 34 other agriculture and food groups to write the US Trade Representative (USTR) opposing limitations on blueberry imports. This broader coalition effort also secured a bipartisan, bicameral Congressional letter from Senator Kyrsten Sinema (D-AZ) and Senator Jerry Moran (R-KS) arguing against action that would invite subsequent retaliation against U.S. agricultural exports.

NMPF, working in concert with USDEC, provided early warning to U.S. trade officials in February regarding brewing safeguard tariff and regulatory threats in two key U.S. Free Trade Agreement partners’ markets: Panama and Colombia. In discussions with USTR and USDA officials in February, NMPF and USDEC underscored the importance of preserving commitments made by each country through the free trade agreements in place with the U.S. for nearly a decade.

Sparked by growing protectionist sentiment among domestic dairy interests, the Colombian and Panamanian governments are faced with calls to apply tariff safeguards on imported cheese and milk powder from the U.S. In the case of Panama, government official have used safeguard tariffs on certain cheese and yogurt products since imports have reached levels that automatically trigger the permissible safeguards under the FTA. In the case of Colombia, local dairy producers are campaigning for safeguard tariffs to be levied on U.S. milk powder imports, a move that would upend U.S. access to its 10^th-largest export market. Additionally, each government is considering labeling and other regulatory changes aimed at making U.S. dairy imports more difficult.

As both countries consider protectionist measures, NMPF will continue to work with USDEC and the U.S. government to preserve access to these markets.

Sage Saffran joined the FARM team on Feb. 1 as its Sustainability Initiatives Coordinator, supporting FARM’s Environmental Stewardship and Workforce Development program areas.

Immediately prior to joining the FARM team she was the Public Policy Intern at the National Association of State Departments of Agriculture (NASDA) where she worked with leaders of agriculture across all 50 states and four U.S. territories on policy solutions. Saffran grew up in a small Connecticut town, with a dairy farm in her backyard. She is a recent graduate of the University of Connecticut with a B.S. in Animal Science and Applied Resource Economics.

Sage is an avid polo player and proud alumni of the UConn Polo Team. She enjoys rock climbing, hiking, and spending time outdoors.

Two training opportunities will be available to FARM WFD Program Participant evaluators in March and April.

FARM staff and ACER Consulting, FARM’s training provider, piloted the training with a group of FARM evaluators and subject matter experts in January. Feedback from the pilot was instrumental in refining the content and curriculum.   The trainings equip evaluators  to conduct WFD evaluations for Version 1.0 of the program. The first of these trainings will be held virtually  on March 10th and 11th. A second training session will be held April 14 and 15. The separate trainings are limited to 20 individuals per training. Interested FARM evaluators can register for the March training here and the April training here.

The launching of Version 1.0 of FARM WFD was one of many FARM achievements captured in the annual FARM Year in Review, released in February. The overview details the resources developed across all program areas anddetails how aspects of FARM were brought into a fully virtual environment. Events like the annual Evaluator Conference, monthly Evaluator Engagement Hours and the program’s Quick Convos series gave FARM staff the ability to connect with all stakeholders and provided relevant and sought-after information as 2020 presented unrivaled challenges in providing on-farm social responsibility assurances.

2020 also saw FARM Animal Care Version 4 go into effect supporting closer farmer-veterinarian relationships, requiring continuing education for all employees and adding a new standard for pain management when disbudding animals. FARM also launched Version 2 of the Environmental Stewardship program which includes updated crop emissions factors, a breakdown of greenhouse gas emissions by gas type, a metric on the use of nutrient management plans, and the ability to capture the benefits of solid-liquid separation, and solar and wind energy.

NMPF released Feb. 9 a dairy farmer’s guide to the COVID-19 vaccine rollout and expanded its natural disaster resource page to include information for preparing for and dealing with winter weather emergencies on a dairy farm, part of its commitment to providing timely and relevant information to its members.

Vaccinating essential workers, including the dairy workforce, is important because of their role in maintaining critical infrastructure operations and their increased risk of getting and spreading COVID-19. NMPF’s guide to the COVID-19 vaccine rollout compiles state-by-state vaccine information, tools for communicating with employees, and answers to frequently-asked-questions about the vaccine.

Later that month, widespread freezing temperatures and power outages from Winter Storm Uri prompted NMPF to update its natural disaster page with winter weather emergency resources for dairy farmers. The page includes information from trusted sources on preparing for emergencies and power outages, workforce safety and animal care during extreme winter weather.

Because emergencies and disasters can occur at any time and without warning regardless of where a farm is located, NMPF urges all dairy producers to consider developing or updating comprehensive Emergency Action Plans on their farms.

CWT assisted member cooperatives in securing 64 contracts with sales of 5.2 million pounds of American-type cheeses, 3.9 million pounds of butter, 3.5 million pounds of whole milk powder, 1 million pounds of anhydrous milkfat (AMF) and 1.2 pounds of cream cheese. The product is going to customers in Asia, Central and South America, Europe, the Middle East, North Africa and Oceania. The product will be shipped during the months of February through August 2021.

These transactions bring the 2021 total of the CWT-assisted product sales contracts to 8.117 million pounds of cheese, 7.277 million pounds of butter, 6.495 million pounds of whole milk powder, 2.013 million pounds of AMF, and 3.530 million pounds of cream cheese. These contracts will move the equivalent of 368.4 million pounds of milk on a milkfat basis overseas in 2021.

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 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 www.cwt.coop/membership.