NMPF Co-op Member Outlines Dairy Needs in Farm Bill Kickoff HearingMay 04, 2022
Michigan dairy farmer Ashley Kennedy, a member of the Michigan Milk Producers Association, testified on behalf of MMPA and the National Milk Producers Federation at the Senate Agriculture Committee’s first hearing dedicated to the upcoming Farm Bill, the twice-a-decade reauthorization of all USDA programs.
“I couldn’t have come back to the family farm if it were not for many of these programs,” said Kennedy, whose family milks 240 cows in east-central Michigan, at the field hearing held April 29 at Michigan State University in East Lansing. “Being a part of the conversation is essential to see a future that reflects opportunity and success.”
Addressing Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), who presided over the hearing, Kennedy discussed her perspective as a third-generation farmer on the successes and shortcomings of current dairy policies and programs Congress must address in the next reauthorization. Kennedy thanked the committee, and Chairwoman Stabenow in particular, for overhauling the dairy safety net during the last farm bill and providing producers with access to crop insurance-like risk management tools, which puts dairy farmers on par with producers of other commodities.
Kennedy praised the Dairy Margin Coverage program as “essential to our farm and family’s financial success last year” and called attention to recent improvements that accounted for modest production increases and better reflect dairy farmer feed costs.
Still, the lessons of the COVID-19 pandemic for the dairy sector in Michigan and nationwide need to be considered, Kennedy said in her written testimony, including the effects of a milk pricing change made in the previous farm bill. “The combined effects of the change made to the Class I mover in the last farm bill, and the government’s heavy cheese purchases, cost dairy farmers over $750 million in Class I skim revenue ring the last six months of 2020.”
The dairy industry, under NMPF leadership, is seeking consensus on a range of improvements to the Federal Milk Marketing Order system, including but not limited to the Class I mover, that can be taken to the U.S. Department of Agriculture for consideration in a national order hearing.
Beyond economic policy, Kennedy also advocated for additional investments in conservation programs to help dairy farmers build on their ongoing sustainability work; urged a doubling of funding for key trade promotion programs; and spoke to the importance of farm bill nutrition programs as “the bedrock of linking the food we produce as farmers to households across the country.”
Kennedy closed by offering a personal take on the need for significant mental health policy in the farm bill. “Stress in rural America is not talked about enough, which is unfortunate, because it’s a problem we can only solve by working together.” Kennedy thanked the committee for reauthorizing the Farm and Ranch Stress Assistance Network in the last farm bill but urged that even more robust resources be provided.
The Senate Agriculture Committee is expected to hold an additional field hearing in Arkansas, the home state of Ranking Republican John Boozman, in the coming weeks.
U.S. Monthly Average Milk Price Sets Record High in MarchMay 04, 2022
The highest-ever monthly U.S. average all-milk price was reported by USDA’s National Agricultural Statistics Service (NASS) for March, at $25.90/cwt. This was twenty cents per cwt higher than the previous record, in September 2014, the only year – until now – in which the monthly all-milk price topped $25.00/cwt.
The futures-based outlook for the milk price for all of calendar year 2022 halted its steady ascent since last summer during the fourth week of March, but it hasn’t dropped below $26.00/cwt since then, indicating there may be more monthly records ahead for this key measure of U.S. dairy farmers’ gross incomes from milk sales.
USDA has reported the March margin under the Dairy Margin Coverage program to be $11.55/cwt. Since March 2021, the DMC feed cost has increased by $3.22/cwt, while the all-milk price has risen by $8.50/cwt over the same period. The DMC Decision Tool on the USDA Farm Service Agency DMC website predicts that DMC margin will remain above the $9.50/cwt maximum coverage level under the program for the remainder of 2022.
NMPF, Congress Demand Canada Meet USMCA CommitmentsMay 04, 2022
NMPF soundly rejected a Canadian proposal to “modify” its dairy tariff rate quota (TRQ) administration process in joint comments with USDEC to the Canadian government on April 19. The action follows a January dispute settlement ruling that Canada is not abiding to its market access commitments in the U.S.-Mexico-Canada Agreement (USMCA).
NMPF’s comments outline how Canada’s TRQs fail to fulfill its dairy obligations including how Canada limits proposed TRQ allocations to Canadian processors and distributors based on dairy sales; how Canada excludes other dairy purchasers such as retailers from the system; and Canada’s lack of good regulatory practices designed to encourage effective use of the TRQs allocated to a given company.
NMPF called on Canada to “consider its larger interests” in the success of USMCA and modify its dairy TRQ allocation and administration policies to show its good faith toward USMCA.
Complementing this effort, NMPF worked with leading members of the U.S. House of Representatives on an April 5 bipartisan letter to Ambassador Katherine Tai and Secretary Tom Vilsack calling on the Biden administration to reject the proposal and ensure U.S. dairy producers are extended the market access that had been negotiated.
The letter was sent by Reps. Ron Kind (D-WI), Tom Reed (R-NY), Antonio Delgado (D-NY), Glenn Thompson (R-PA), Suzan DelBene (D-WA), Dusty Johnson (R-SD), Jim Costa (D-CA), and David Valadao (R-CA), the same congressional leaders who successfully urged USTR to launch a dispute settlement case against Canada in May 2021.
“A deal’s a deal; it’s not too much to ask that our trading partners live up to their end of the bargain,” the letter stated. “That is why it is critical that this compliance stage of the USMCA dairy case demonstrate that the USMCA enforcement process works—not just to deliver the right finding, as it did in January, but to ensure faithful implementation of the overall agreement and drive real, tangible reforms that are seen on store shelves, to the benefit of American dairy producers and manufacturers, as intended.”
The House letter follows a March 4 letter from Rep. Elise Stefanik (R-NY) to Ambassador Tai sharply criticizing the Canadian proposal. A similar bipartisan, bicameral letter was sent on April 6 from members of the Minnesota Congressional delegation, led by Rep. Michelle Fischbach (R-MN) and Sen. Amy Klobuchar (D-MN). Sen. Tina Smith (D-MN) and Reps. Tom Emmer (R-MN), Angie Craig (D-MN) and Pete Stauber (R-MN) also joined the letter.
NMPF continues to work with these and other congressional offices to help ensure that Canada is held to account so that U.S. dairy farmers can reap USMCA’s full promised benefits.
NMPF Pursues, Protects Dairy Market AccessMay 04, 2022
NMPF and the U.S. Dairy Export Council (USDEC) submitted joint comments to the U.S. Trade Representative’s Office on April 11 asking it to place a high priority on tariff cuts and nontariff barrier removals through the Indo-Pacific Economic Framework (IPEF).
While the administration still hesitates to pursue comprehensive free trade agreements, the framework, which is focused on defining shared objectives around trade facilitation, standards, supply chain resiliency, sustainability, and other common interests in the Indo-Pacific region, presents a potential opportunity to take one step forward on access terms in the region. NMPF in the comments urged that the Biden Administration pursue comprehensive trade agreements to establish lasting tariff and nontariff trade barrier reductions. While acknowledging that the economic framework will not be that kind of agreement, the comments make the case that it could still reduce or eliminate barriers to trade and suggest numerous areas for potential progress.
NMPF and USDEC worked closely with Congressional offices to bolster that message through a March 30 House of Representatives letter to U.S. Trade Representative Katherine Tai and Secretary of Agriculture Tom Vilsack urging the administration to prioritize U.S. food and agriculture in any IPEF negotiations. The bipartisan letter, led by Reps. Jimmy Panetta (D-CA) and Jodey Arrington (R-TX), and signed by 85 other members of Congress, called on the administration to use the Indo-Pacific negotiations to “include efforts to reduce tariffs on U.S. agricultural exports,” to establish regulatory reforms that would benefit U.S. dairy and others in American agriculture, and more.
NMPF also is continuing to safeguard free trade in Latin America, where growing anti-import sentiment from domestic agricultural industries is contributing to a proliferation of potential new market access barriers.
Panama formally petitioned the United States in March 16 to renegotiate several of the agricultural market access provisions in the U.S.-Panama Trade Promotion Agreement. In response, NMPF and USDEC, working together with the Corn Refiners Association, initiated an April 14 letter co-signed by fifteen other agricultural organizations to Ambassador Tai and Secretary Vilsack urging them to preserve the agricultural market access terms of the trade deal and ensure Panama honors its trade obligations. The letter states that modifying an already-implemented trade deal would set an “alarming precedent” and urges the administration to stay the course on FTA implementation.
Supply Chain Needs Outlined by NMPF, USDEC to AdministrationMay 04, 2022
NMPF and USDEC, with input from their joint export supply chain working group, took multiple steps last month to tout additional actions the U.S. government could take to help address the supply chain issues plaguing dairy exporters.
Highlighting the efforts were comments the two organizations submitted to the Federal Maritime Commission (FMC) on April 14 concerning detention and demurrage billing requirements. The comments outlined a series of nine recommendations for rulemaking focused on upgrading carriers’ information requirements related to detention and demurrage — measures that would help correct the current information power imbalance that favors carriers.
NMPF and USDEC also sent a letter April 21 to Secretary Tom Vilsack and Transportation Secretary Pete Buttigieg recommending five additional tools that could provide supply chain relief and support to dairy farmers and exporters. The leading recommendation called for USDA’s Agriculture Marketing Service (AMS) to restart its Ocean Shipping Container Availability Report (OSCAR) which previously detailed the availability of ocean shipping containers at locations across the United States on a weekly basis. NMPF export supply chain working group members have underscored the usefulness of this report and urged its reactivation.
Shortly thereafter, NMPF joined a coalition of agricultural associations in an April 25 letter to Director of the National Economic Council Brian Deese, Secretary Vilsack and Secretary Buttigieg, asking the administration to coordinate a meeting between exporters and ocean carriers to foster progress on export shipping access.
While these immediate steps could help deliver much-needed immediate relief, NMPF also remains focused on advancing longer-term legislative efforts to heighten the oversight of ocean shipping practices and mandate reforms.
The Ocean Shipping Reform Act (OSRA)– now passed by both the U.S. House and Senate – is headed to conference to reconcile differences in the two versions. NMPF and USDEC played a key role in shaping the text for both versions and securing bipartisan support, but the work continues to ensure the provisions that would deliver the most tangible solutions are retained in a final bill.
The most likely route forward is through the conference process slated to begin in May on a China competitiveness legislative package of which OSRA is a part. NMPF joined an April 20 letter from a broad coalition of U.S. exporting organizations to the conferees, urging the inclusion of the more prescriptive provisions unreasonable carrier behavior.
April CWT-Assisted Dairy Export Sales Totaled 67 Million PoundsMay 04, 2022
CWT member cooperatives secured 40 contracts in April, adding 6.3 million pounds of American-type cheeses, 9,000 pounds of butter, 827,000 pounds of whole milk powder and 331,000 pounds of cream cheese to CWT-assisted sales in 2022. In milk equivalent, this is equal to 67 million pounds of milk on a milkfat basis. These products will go customers in Asia, Central America, Middle East-North Africa, Oceania and Europe, and will be shipped from April through October 2022.
CWT-assisted 2022 dairy product sales contracts year-to-date total 42.8 million pounds of American-type cheese, 46,000 pounds of butter, 4.3 million pounds of cream cheese and 15.6 million pounds of whole milk powder. This brings the total milk equivalent for the year to 543 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.