News for Dairy Co-Ops

The 15th joint annual conference of the American Butter Institute (ABI) and the American Dairy Products Institute (ADPI) was held April 28-30, in Chicago.  This year’s meeting drew over 850 industry executives, government officials, academia, and media.

The two-and-a-half-day meeting addressed the manufactured dairy product industry’s latest challenges and opportunities, featuring presentations from a wide range of speakers. The opening panel discussion outlined topics and issues that would affect business, including weather conditions, feed costs, global economic and population growth, as well as production and pricing.

Other topics covered included industry relations and opportunities with China, dairy industry traceability issues, best practices to follow in the event of a recall, and uses of milk protein concentrate as an ingredient. Top industry chief executives also shared their vision of opportunities for the dairy industry in future years.

The 2013 conference also featured a silent auction that was held during the Grand Chicago Reception, which raised $5,000 to benefit the Jim Page Memorial Scholarship Fund. In addition, Phillip S. Tong, Professor of Dairy Science and Director of the Dairy Products Technology Center at California Polytechnic State University, received the 2013 ADPI Award of Merit.

The ABI Board Meeting was held on Tuesday, April 30^th, where the board elected Josh White, Hoogwegt, U.S., Inc.; William Schreiber, O-AT-KA Milk Products Coop, Inc.; and Keith Murfield, United Dairymen of Arizona to serve on the ABI Board for 2013-2014. The board also got an opportunity to listen to presentations on ABI’s Strategic Planning Meeting, Butter Economic & Market Outlook , an update on the Butter Promotion Program, as well as learn more about the REAL® Seal and Cooperative Working Together.

The complimentary social hours held each afternoon in the exhibit hall and the sizeable receptions held on Monday and Tuesday evenings provided abundant opportunities to network with producers, marketers, suppliers, distributors, and brokers of manufactured dairy products.

A group of 130 members of the dairy industry met last month in Indianapolis for the 2013 National Dairy Producers Conference (NDPC). The conference kicked off with a behind-the-scenes tour of Fair Oaks Farms. The program included topics such as understanding the importance of immigrant labor, technology and innovation, agricultural lending, dairy beef quality assurance, high feed prices, and international trade issues, among others.

Presentations and photos from the conference are available at www.nmpf.org/NDPC.

NMPF and the U.S. Dairy Export Council (USDEC) applauded the United States’ decision last month to welcome Japan into Trans-Pacific Partnership (TPP) free trade negotiations.

“Japan greatly enhances the potential value of the TPP to U.S. dairy producers and processors,” said Jaime Castaneda, senior vice president for strategic initiatives and trade policy. “Japan is the third-largest economy in the world and already a major dairy importer. Reducing excessive tariffs and removing non-tariff barriers to trade will significantly increase U.S. dairy export opportunities, which will help drive overall U.S. dairy industry growth.”

U.S. suppliers shipped $284 million worth of cheese, whey proteins, milk powder and other dairy products to Japan in 2012. It is the fifth-largest U.S. dairy export market, despite substantial market access barriers in many of the biggest dairy categories.

The U.S. Trade Representative’s Office officially notified Congress of the American government’s intention to enter into TPP trade talks in 2009. At that time, it did so with the idea that the TPP would eventually expand from the initial eight participants—Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States and Vietnam—to the entire Asia-Pacific, thus expanding the economic significance of the deal.

For the second time in two years, state public health and agriculture department officials participating in the National Conference on Interstate Milk Shipments (NCIMS) turned down a proposal to reduce the maximum allowable level of somatic cell counts in milk.

At its meeting in Indianapolis last month, the NCIMS voting delegates – a group of state regulators overseeing milk safety rules – considered a proposal sponsored by NMPF to reduce the maximum threshold of allowable somatic cells in milk at the farm level from the current 750,000 cells/mL, down to 400,000, starting in 2015. But on a close vote, the delegates rejected the proposal, meaning that the status quo threshold of 750,000 will remain for domestic milk production – putting the U.S. “behind the curve when it comes to milk quality standards,” according to Jerry Kozak, NMPF President & CEO.

On a related decision with trade policy implications, the NCIMS delegates approved a proposal to permanently allow foreign dairy marketers to participate in the U.S. Grade A program, by permitting required sanitation evaluations of overseas dairy farms and processing facilities to be carried out by third-party, non-governmental inspectors.

“Dairy farmers in the world’s major milk producing regions have made great strides in reducing somatic cell count levels. Regulatory systems around the world have moved to incorporate these lower somatic cell count levels, and the U.S. needs to be on board with that process, not be left watching from the side of the road by the failure to update our standards,” said Kozak. “We continue to be perplexed by the inconsistency of those state regulators who voted to make it easier to import Grade A dairy products into the United States by outsourcing mandatory inspections, while at the same time rejecting efforts to facilitate the export of American dairy products,” Kozak said.

A similar somatic cell count proposal was defeated by the NCIMS in 2011. Since then, the European Union has moved ahead with a somatic cell count limit of 400,000 for dairy products being exported by the U.S. to EU member countries.

NMPF also expressed disappointment at the NCIMS delegates’ rejection this week of a resolution calling for the enhanced enforcement of federal labeling regulations affecting the marketing of imitation Grade A dairy products, such as soy, hemp and rice “milks,” and soy and rice “yogurt.”  The recommendation was also opposed by representatives of the dairy processing community.

NMPF’s efforts to revitalize the REAL® Seal will take a big leap forward this spring, as a new campaign to build interest in the seal through social media is being launched. The campaign will galvanize interest among consumers in real, American-made dairy products, using a new Facebook page, blogger outreach, and digital advertising. The program will be launched in time for June Dairy Month.

The revamped REAL Seal® Facebook page will create a new voice and visual feel to engage and cultivate target audiences, especially moms and heads of households consuming dairy products. The page’s content will include interaction-provoking updates, multimedia presentations, contests, polls, and quizzes. One of the elements of the launch will feature a “Name the Character” contest. Kids submitting the winning name will receive a packet of coupons provided by product marketers using the REAL® Seal.

The blogger outreach will generate engagement, online conversation, and awareness surrounding the REAL® Seal campaign by driving consumers to official REAL® Seal platforms, and by interacting with bloggers writing about the mom/parenting, food/cooking, health/wellness, and lifestyle topic areas. Starting in July, a special Buyer’s Guide section will be added to the REAL® Seal website, where consumers will be able to go to find REAL® dairy products, foods made with REAL® dairy products and restaurants that use and serve only REAL® dairy products. REAL® Seal users will have the option of providing links to their company’s website as well.

In April, Cooperatives Working Together (CWT) received a total of 126 requests for export assistance from member cooperatives. Of those, 28 counter offers made by CWT were accepted, resulting in 3.9 million pounds of cheese and 5.2 million pounds of butter being sold, primarily to customers in Asia, the Middle East, and North Africa.

Through April, CWT has assisted 10 member cooperatives in making 308 export sales totaling 50.9 million pounds of cheese, 51.7 million pounds of butter, 44,092 pounds of anhydrous milk fat, and 218,258 pounds of whole milk powder. The product will be shipped through October of this year. It is equivalent to 1.6 billion pounds of milk, which exceeded USDA’s estimate of the increase in U.S. milk production in 2013.

CWT-assisted shipments of cheese and butter in 2013, through April, totaled 52.9 million pounds of American-type cheeses and 29.9 million pounds of 82% milkfat butter. The majority of cheese will be going to Asia, while the majority of butter will be shipped to the Middle East and North Africa.

The Senate Judiciary Committee last week began consideration of S. 744, the comprehensive immigration reform bill containing the crucial agriculture worker provisions backed by NMPF.

The Senate legislation is the product of NMPF’s efforts in recent years to resolve the employment needs of dairy farmers, and agriculture overall. This legislation under consideration includes farm worker provisions crafted by the Agriculture Workforce Coalition (AWC) – of which NMPF is a member – and the United Farm Workers (UFW). More than 300 amendments have been filed to the Senate legislation. Many of these could have a direct or indirect impact on farmers, and NMPF staff members are carefully weighing positions on each. Despite the sensitive nature of the immigration issue, NMPF is optimistic that this legislation will advance through the Judiciary committee with the vital reforms needed by dairy farmers as part of the package. The committee will likely take a number of days to complete consideration of the bill.

Meanwhile, in the House of Representatives, Judiciary Committee Chairman Bob Goodlatte recently introduced H. R. 1773, the Agricultural Guestworker Act. While the AWC remains committed to the agreement reached with UFW, the coalition remains deeply engaged with Rep. Goodlatte and other House members on this matter. The House Judiciary Committee will have an agriculture-focused hearing this week to begin the process of developing a farm worker immigration plan. While the path ahead remains unclear in the House, NMPF will continue working to ensure that the needs of dairy farmers are addressed.

The Agriculture Committees in both the Senate and House will be working this week on the Farm Bill, with the fate of a new safety net for dairy farmers hanging in the balance.

On Tuesday, May 14th, the Senate Agriculture Committee will mark up its version of the Farm Bill. The Dairy Security Act (DSA), the reform packaged supported by dairy farmers, will be included as part of committee Chairwoman Debbie Stabenow’s overall Farm Bill draft. NMPF issued a statement last Thursday thanking the committee leadership for its support of the DSA.

The next day, on May 15th, the House Agriculture Committee will work on its own version of the Farm Bill. The House committee released its version of the farm bill Friday afternoon, and that bill also contains the Dairy Security Act as its dairy program provisions. While committee Chairman Rep. Frank Lucas and ranking member Rep. Collin Peterson both support the DSA, the committee is expected to debate an alternative approach, the so-called Dairy Freedom Act, which would effectively gut the DSA.

NMPF has been working hard on a bipartisan basis to build support for the DSA, and expose the flaws of the Dairy Freedom Act, which will be offered by Reps. Bob Goodlatte and David Scott. NMPF circulated a letter signed by its members, along with nearly two dozen other national and state associations, demonstrating the depth and breadth of support for the DSA among the dairy farmer community. The letter reiterates the reasons why members of the House and Senate should support the Dairy Security Act, including the fact that the DSA has the support of farmers; it is the fiscally-responsible approach to providing a dairy farmer safety net; farmers have already compromised with processors by eliminating three programs and moving to a voluntary program featuring the market stabilization component; and the real threat to the future of our dairy industry is not the DSA, but rather a processor-backed approach that will generate cheap milk and lower prices for our farmers.

Farmers can contact their elected officials in support of the DSA by using our online Dairy GREAT tool.