News for Dairy Co-Ops

The dairy community will join in-person at the Mirage Hotel in Las Vegas from Nov. 14-17 for the 2021 NMPF annual meeting, held in conjunction with the national dairy checkoff organizations overseen by Dairy Management Inc.  

With a theme of “Make Every Drop Count,” this year’s event will examine how dairy’s policy and promotion organizations work together globally to build markets for dairy products. The program will cover key topics of interest to farmers, including economics, sustainability, nutrition policy, trade, animal care, and changes in the global dairy marketplace.  

This link directs registrants to the official conference website to learn more about what’s to come; the meeting registration deadline (without late fee) is Oct. 21. To reserve rooms at the Mirage, follow this link to the hotel’s reservation page. Please mention “2021 Joint Annual Dairy Meeting” to receive the group rate. The hotel registration deadline is Oct. 13. 

In response to elevated COVID-19 caseloads, the city of Las Vegas is currently requiring indoor mask use in public meeting facilities, regardless of vaccination status. MGM Resorts, the corporate parent of the Mirage Hotel, is also requiring indoor masking. NDB/NMPF/UDIA will follow these policies.   

NMPF lauded USDA for finalizing rules implementing the new Dairy Donation Program, which set implementation into motion in September. The program will help expand partnerships between dairy organizations and food banks to provide a wide range of dairy products to food-insecure households.

The Dairy Donation Program, enacted by Congress last December as part of COVID pandemic-related legislation, builds on the original Milk Donation Reimbursement Program. It has one-time funding of $400 million to reimburse farmers, cooperatives, and other dairy organizations for the full cost of raw milk needed to make finished dairy products for consumers. Following its enactment, NMPF worked closely with USDA to ensure that the program addresses additional costs, such as processing and transportation, to make the new program more viable. The provision covering the cost of processing is a significant enhancement from the previous program.

“We thank USDA leadership for their work to bring the Dairy Donation Program to fruition. This important program will help dairy farmers and the cooperatives they own to do what they do best: feed families nationwide,” said Jim Mulhern, president and CEO of NMPF. “Dairy stakeholders are eager to enhance their partnerships with food banks and other distributors to provide dairy products to those experiencing food insecurity, which the COVID-19 pandemic has only exacerbated.”

NMPF championed the proposal throughout the legislative process and worked closely with Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), who led the effort to include this new program in COVID-19-related legislation enacted last year. Mulhern said NMPF appreciates Chairwoman Stabenow’s leadership in securing the program’s enactment and lauded the support for dairy donation offered by other key members, including Senate Appropriations Committee Chairman Patrick Leahy (D-VT) and House Agriculture Committee Ranking Member Glenn ‘GT’ Thompson (R-PA).

NMPF also worked closely with Feeding America to support the program and recommend approaches to ensure its effectiveness. NMPF hosted a webinar on September 16 with Feeding America and USDA to educate dairy stakeholders about the program.

“We have also been pleased to work with Feeding America to advance the partnership approach taken by this program as it will help to target dairy donations in a manner that effectively meets on-the-ground demand,” Mulhern said.

A leader of an NMPF member cooperative amplified its call to reform the Class I milk pricing formula to ensure dairy farmers are fairly compensated both now and into the future at a Senate Agriculture dairy subcommittee hearing on milk pricing Sept. 15.

The pandemic “has created an even greater urgency to revisit orders,” said Catherine H. de Ronde, vice president for economic and legislative affairs for Agri-Mark, based in Andover, Massachusetts, in her testimony. “Negative PPDs had milk checks looking incredibly bizarre, de-pooling at a level never-before seen became a new phenomenon for many. The change to the underlying Class I mover was a key catalyst of these outcomes,” added de Ronde, a member of NMPF’s Economic Policy Committee.

The hearing, led by Sens. Kirsten Gillibrand (D-NY) and Ranking Member Cindy Hyde-Smith (R-MS), focused on issues related to milk pricing and the Federal Milk Marketing Order (FMMO) system, strained during the COVID-19 pandemic due in large part to flaws in the current Class I mover and its ripple effects through dairy revenues. The 2018 Farm Bill changed the Class I mover, which determines the price of fluid milk under the FMMO system, at the urging of dairy processors who sought greater price predictability.

The change contributed to substantial market volatility last year and has led to an estimated $750 million in losses for farmers compared to the previous Class I formula. Without a fix, dairy farmers will permanently bear unfair and unnecessary price risk compared to processors during times of unusual market volatility.

USDA plans to partially mitigate last year’s losses through its Pandemic Market Volatility Assistance Program, which will reimburse farmers for $350 million of those losses. But that initiative distributes payments unevenly, requiring further remedies to equitably fill the gap for producers of all sizes, as noted at the hearing by Sen. Roger Marshall (R-KS). NMPF is working with Congress to provide full funding to reimburse for these losses and in a manner that does not limit payments to producers based on volume or size.

Sen. Gillibrand chairs the Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security and Sen. Hyde-Smith serves as the subcommittee’s Ranking Member. Sens. Gillibrand and Hyde-Smith called attention to the losses farmers have faced on account of the new Class I mover and discussed a range of possible options for reform.

“The National Milk Producers Federation appreciates the work of Senators Gillibrand and Hyde-Smith for today’s initial examination of crucial milk pricing issues,” said Jim Mulhern, president and CEO of NMPF, in a statement. “Dairy farmers have done their best to navigate this ongoing crisis, aided in part by necessary disaster assistance.

“But without equitable assistance, many family dairy farmers across the nation will needlessly struggle from the effects of the Class I mover change they’ve already felt. And without a change in the mover, we can only expect these struggles will recur.”

NMPF and other farm groups have thus far successfully protected the current tax policy referred to as “stepped-up basis” during the ongoing budget reconciliation negotiations, with the House Ways and Means Committee excluding any change to current policy in its contribution to the reconciliation package.

The reconciliation bill, which has been actively worked on since August, will only pass Congress with unanimous support from Senate Democrats and near-unanimous backing from their House counterparts, due to united Republican opposition. Reconciliation has become the vehicle for the Democratic legislative agenda, and its final form will include critical provisions to raise the revenue required to pay for various programs and projects.

One proposal initially floated to raise these funds was to change when capital gains on inherited assets are taxed as well as altering the basis for evaluating the amount of capital gains to be taxed. NMPF and other farm groups have been working to prevent these proposed changes from becoming law and protect stepped-up basis.

While many provisions currently in the mix for the final reconciliation package are popular within agriculture – such as funds for rural development, climate change research, biofuel investment, and forestry – agriculture has solidly opposed any proposals to eliminate or otherwise change stepped-up basis because it would likely increase taxes heirs have to pay on inherited farm assets. NMPF and the agriculture community are hopeful the committee’s preservation of current policy will be maintained in the final package and will continue work to ensure that outcome, although circumstances can change rapidly as last-minute negotiations occur.

One area of special interest to dairy — funding for conservation programs with emphasis on climate-smart ag practices — will likely be included in the bill. The plan will invest nearly $28 billion in such programs, which will benefit dairy’s proactive sustainability efforts to become carbon neutral or better by 2050 and to improve water quality and optimize water use. NMPF previously led 12 agricultural and conservation organizations in advocating for this important new funding.

The August margin USDA announced for the Dairy Margin Coverage program, $5.25/cwt., fell to its lowest-ever since margin protection became the main federal dairy safety net in 2014, slipping below the previous low of $5.37/cwt. margin from May 2020. A $0.20/cwt. drop in the U.S. average all-milk price from a month earlier, to $17.70/cwt., and a $0.24/cwt. rise in feed costs, mostly due to a higher corn price, produced the August margin.

USDA has still not begun to announce the revised margins using 100 percent dairy quality alfalfa, a change to the program’s feed-cost calculation made in August at NMPF’s urging. Incorporating the change, which will be retroactive to 2020, would set the August margin at $5.03/cwt.

USDA reported that, as of Sept. 27, the 19,009 operations enrolled in this year’s DMC program are expected to receive $817,171,664 in payments, based on previously announced margins.  Margins for the remaining five months in 2021, including August, are not included in this total.  Dairy futures continue to indicate further DMC payments for $9.50/cwt coverage for every month remaining this year.

Dairy efforts led by NMPF and the U.S. Dairy Export Council (USDEC) capped off months of work Sept. 23-24 by making great strides in positioning dairy as a core part of a sustainable food system in a well-balanced UN Food Systems Summit.

NMPF and other farm organizations have spent much of the year conducting extensive outreach with U.S. officials to help ensure that the U.S. government maximized its ability to shape the summit and the additional efforts it has been spurring to move in a trade-friendly, science-based direction.

NMPF seized multiple opportunities in September to emphasize key dairy priorities to the U.S. interagency team working on finalizing U.S. stances and messages for the summit.

• NMPF delivered remarks at a Sept. 3 State Department summit preparation listening session calling on U.S. government leadership to ensure that future food systems work supports the role of trade, agricultural innovation, and livestock products.
• NMPF and USDEC also submitted more detailed recommendations 8 to the U.S. government underscoring the additional needs to: (1) clearly communicate and promote the positive role of sustainable livestock systems; (2) promote a role for school milk as a key component in school meals; (3) actively work to shape UN leadership comments and reports to align with the U.S. interests; and (4) work to shape future work and steer that process toward being conducted by multilateral organizations that prioritize science-based policy making.
• NMPF also worked with USDEC to play an active role in helping shape an agriculture coalition letter outlining summit priorities that was sent to USDA Secretary Tom Vilsack and Secretary of State Antony Blinken on Sept. 13. The letter urged enhanced work with like-minded countries to promote the benefits of rules-based international trade; support science, innovation, and technology; recognize that all production systems should seek to minimize environmental impacts without sacrificing overall diet quality and diversity; and support flexibility in addressing national, cultural, and personal interests without prescriptive or “one-size-fits-all” approaches.
• On Sept. 14, NMPF joined a small group of other agricultural organizations to meet with USDA Deputy Secretary Jewel Bronaugh and emphasize the type of results that U.S. agriculture views as critical to feeding the world sustainably.

Secretary Vilsack and USAID Ambassador Samantha Powers announced U.S. commitments near the outset of the summit Sept. 23; those remarks focused on addressing hunger and drawing on a variety of tools to build sustainable food systems. NMPF’s President and CEO Jim Mulhern said dairy farmers need to be at the table given the positive role they play on both fronts.

“Some have viewed the summit as an opportunity to issue lengthy lists of dos and don’ts to the farmers worldwide who work hard every day to feed us all,” Mulhern said in a statement released in conjunction with the summit. “We’re proud to promote an approach that recognizes that farmers everywhere advance sustainability in many ways – with America’s dairy farmers at the forefront. Rather than trying to impose a uniform, misguided ideology on how the world eats, farms, and produces food, we all need to do our part to use limited resources wisely and efficiently to feed a growing world population in environmentally sound ways.”

The U.S. dairy industry has a big role to play to sustainably meet the world’s growing demand for dairy. To allow that to flourish, NMPF will continue to promote trade-friendly and evidence-based solutions to support diverse and healthy diets as core to sustainable food systems as U.S. dairy enhances its critical role in sustainably meeting growing global dairy demand.

NMPF, USDEC and a coalition of agricultural associations are keeping up pressure on the White House and Congress to take immediate, substantive actions to relieve worsening problems with port delays and costs.

NMPF and over 75 national and regional agricultural organizations, companies, and dairy cooperatives sent a letter to President Biden Sept. 13 listing specific steps the administration can take to provide near-term solutions to supply chain problems. NMPF and USDEC wrote the letter and initiated the effort.

Meanwhile, NMPF’s Trade Policy team organized an agricultural coalition meeting Sept. 14 with Carlos Monje, U.S. Department of Transportation Under Secretary for Policy, and John Pocari, Port Envoy to the Administration’s Supply Chain Disruptions Task Force, to discuss additional specific steps the White House and Transportation Department could take to force a change in carrier behavior and improve the conditions facing agricultural exporters.

NMPF, USDEC and other members of the agriculture coalition also met virtually Sept. 2 with Tim Manning, White House National COVID-19 Supply Coordinator, to recommend the administration build upon a July 9 Executive Order from President Biden directing the Federal Maritime Commission to “vigorously enforce” guidelines on reasonable detention and demurrage fees by taking additional steps to address the mounting shipping crisis.

Throughout these discussions, NMPF, USDEC and coalition members have also urged the administration to work to extend terminal gate hours and push for the integration of key technology to optimize port efficiency, among other key funding and enforcement steps. The Los Angeles and Long Beach ports announced Sept. 17 they were incrementally increasing their hours operations – a step in the right direction but not yet enough to provide the capacity needed to process increasing shipping flows.

NMPF Trade Policy staff is also continuing to build bipartisan support in Congress for the Ocean Shipping Reform Act (H.R. 4996), introduced on August 11 by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD). The legislation would address the unfair practices and charges implemented by ocean carriers.

The bill currently has 32 cosponsors, and NMPF is working to encourage additional members of Congress to sign onto the legislation. The bill was referred to the House Transportation and Infrastructure Committee, Subcommittee on Coast Guard and Maritime Transportation for consideration. A briefing paper on the legislation can be found here.

The National Dairy Farmers Assuring Responsible Management (FARM) Program released its Animal Care Version 5.0 Stakeholder Survey on Sept. 22. This survey gives dairy farmers, industry stakeholders, and partners an opportunity to provide early input on topics, issues, and potential changes they would like considered for Version 5.0.

FARM will use the input from this survey and work with the FARM Farmer Advisory Council, Animal Care Task Force, NMPF Animal Health and Wellbeing Committee, and the NMPF Board of Directors to review Version 4.0 of the program and design updates and improvements for Version 5.0, which would come into effect July 1.

Survey information will be used to inform decisions, although no decisions will be made solely from the responses, which are anonymous. The survey will take approximately 15 minutes to complete and is open to any farmers and other stakeholders wishing to lend their expertise to the FARM Animal Care Program update. Click here to access and complete the survey. For more information and to follow Version 5.0 progress, visit the development page on the FARM website.

The FARM Program has also provided support to Kansas State University to develop an antibiotic stewardship use survey for dairy farmers to provide a better understanding of dairy producer perceptions of antibiotic stewardship and their willingness to contribute to a dairy antibiotic use database. The survey is also anonymous, and input received will serve as a valuable resource for university researchers who are collaborating with FARM and participating in discussions on national policies related to dairy antibiotic use.

NMPF’s National Dairy FARM Program and Young Cooperators (YC) Program joined industry stakeholders in Madison, Wisconsin Sept. 28-Oct. 2 for the 2021 World Dairy Expo. The annual event, which attracts over 50,000 attendees annually, serves as a forum for dairy producers, companies and organizations to come together to compete, and to exchange ideas, knowledge, technology and commerce.

The FARM Program hosted a panel lunch on Thursday, Sept. 30 in which 50 industry stakeholders, farmers and NMPF staff discussed the newest FARM initiatives, FARM Biosecurity and the Calf Care & Quality Assurance (CCQA). Miquela Hanselman, manager of regulatory affairs for NMPF, introduced the new FARM Biosecurity program area address producer’s biggest concerns in the biosecurity space. Kris Scheider, Wisconsin farmer and vice-chair of the FARM Farmer Advisory Council, talked about farmer involvement in the program and what biosecurity looks like on his farm.

“At the on-farm level we have our vaccines, we have animal identification, and we have two skid steers – one for pushing feed and the other for manure handling,” Scheider said. “There are all these steps we are taking and now were ready for Enhanced Biosecurity.”

Justin Potts, senior manager of Dairy 2025 at Land O’ Lakes talked about the customer concerns in the biosecurity space and how the organizations are approaching calf care considerations.

Josh White, executive director of producer education at the National Cattlemen’s Beef Association, explained why the CCQA program was developed and what is included within the standards. Dr. Jennifer Van Os, PhD animal welfare assistant professor and extension specialist at University of Wisconsin – Madison, answered questions about pressure points in the calf space and veterinary involvement in the CCQA program.

“We wanted to inform the CCQA recommendations with the latest scientific research and find any pain points within the calf space,” Van Os said. “Those were identified as special needs of calf raisers and animal husbandry.” The recording of the event is available on the FARM Program’s Facebook page.

The National YC Program sponsored a Dairy Cow Productivity Seminar Sept. 29 featuring NMPF’s Peter Vitaliano, Ph.D., vice president of economic policy and market research. And later that day, the program hosted an offsite reception and dinner, offering 30 YCs the opportunity to network with each other and to meet and ask the seminar speaker questions in an informal setting.

CWT member cooperatives secured 40 contracts in August adding 2.3 million pounds of American-type cheeses, 5.5 million pounds of whole milk powder, 567,000 pounds of anhydrous milkfat and 891,000 pounds of cream cheese to CWT-assisted sales in 2021. These products will go customers in Asia, Middle East-North Africa, Central America, Caribbean and South America, and will be shipped September 2021 through February 2022.

CWT-assisted 2021 dairy product sales contracts year-to-date total 37.7 million pounds of American-type cheese, 12.7 million pounds of butter, 6.1 million pounds of anhydrous milkfat, 10.4 million pounds of cream cheese and 24 million pounds of whole milk powder. This brings the total milk equivalent for the year to roughly 1.056 billion 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.