News for Dairy Co-Ops

August is unique in Washington, as members of Congress spend the month in their districts and government officials go on vacation. That doesn’t mean nothing gets done – in fact, the passage of the Inflation Reduction Act last month is one of the biggest pieces of legislation approved by the current Congress. But it does mean that, with elections looming, it’s time to take stock on what’s been achieved and decide which steps to take next.

We at NMPF are always focused on achievements for our members, and this pause in Washington’s year also provides an opportunity to share what we have done on behalf of our members. In this edition of News for Dairy Cooperatives, once you get past the August highlights (and they’re worth the read!), you will see a detailed recap of what we’ve been doing to serve our members and advance this industry since March, when our Activities and Accomplishments annual report was published. Going beyond the monthly scope of a typical newsletter, we explore how patient efforts pay off, through significant progress in efforts ranging from NMPF’s leadership on milk pricing; to supporting record exports through sound policy; to making sure the latest insights in animal care are applied via farmer-focused consultation with the entire industry.

Thank you for this opportunity to serve.

The Inflation Reduction Act passed by Congress and signed into law by President Biden on Aug. 16 includes $20 billion in landmark new funding for USDA conservation programs that will help dairy farmers advance their proactive sustainability leadership, highlighting a month that normally sees less activity in Congress due to its traditional recess for the month.

The law, which spends record amounts to combat climate change while including initiatives related to health care and other issues, primarily affects agriculture through the additional conservation spending. NMPF has led efforts over the last year to advocate for this new funding, assembling one dozen agricultural and conservation groups on a letter to Congress last summer in support of enhanced climate smart ag funding.

The funding spearheaded by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, strengthens farm bill conservation programs with emphasizes key dairy areas of opportunity. The measure provides $8.45 billion in new funding for the Environmental Quality Incentives Program, which provides voluntary technical assistance to dairy farmers who undertake stewardship practices that can yield meaningful environmental benefits. This includes $25 million annually in targeted new funding for Conservation Innovation Trials, which emphasis on feed management to reduce enteric methane emissions, a major environmental opportunity for dairy producers.

“Dairy farmers seize environmental sustainability opportunities whenever possible,” said Jim Mulhern, president and CEO of NMPF. “In 2020, producers committed to becoming greenhouse gas neutral by 2050 while also maximizing water quality and optimizing water use. The funding increases in this package will better position dairy to effectively implement these critical environmental stewardship goals. We are very grateful to Chairwoman Stabenow for her success and leadership in securing this meaningful new conservation investment, which will be a game-changer for dairy.”

In other August highlights:

• August Dairy Margin Coverage drops by $2.00 a hundredweight in July from a month earlier. The July DMC margin was $9.92/cwt, $2/cwt less than June’s and within striking distance of the program’s $9.50/cwt Tier 1 coverage level. The drop was driven by a $1.20/cwt lower July U.S. average all-milk price of $25.70/cwt and an $0.80/cwt higher feed cost. The higher feed cost was due almost entirely by an unusually large monthly increase in the average price of premium alfalfa hay, equal to $0.77/cwt of milk in the feed cost formula. The additional 3 cents resulted from a $0.16/cwt of milk monthly increase in the price of soybean meal that was mostly offset by a lower price for corn. The July milk price was still high by historic standards, but milk and dairy product prices have been mostly falling from their earlier summer highs, driven by a combination of consumer reaction to this year’s rapid rise in retail dairy product prices and hints that U.S. milk production is beginning to grow again following a string of months with annually lower milk output that stretch back to last fall. Available forecasts currently indicate that small margin coverage payments may be generated for $9.50/cwt coverage in August and September this year.
• NMPF and the U.S. Dairy Export Council (USDEC) convened the fifth U.S.-Mexico Binational summit August 15-17 at Dairy Farmers of America headquarters in Kansas City to help the U.S. and Mexican dairy industries to further develop their vital relationship and identify areas for deeper cross-border cooperation. NMPF and USDEC leadership and staff, and dairy producer chairs of NMPF, DMI and USDEC participated alongside industry leaders in discussions with five leading dairy organizations from Mexico. The summit culminated in a new Statement of Collaboration.
• NMPF, USDEC and several other agricultural organizations held a series of key meetings in August with the Port of Oakland, the California Department of Agriculture, the Governor’s Office of Business and Economic Development (GO-Biz) and the administration’s new Port and Supply Chain Envoy, retired General Stephen Lyons. NMPF and USDEC also joined over a dozen other U.S. agriculture and business groups in sending a letter to Transportation Secretary Pete Buttigieg urging the administration to allocate infrastructure development funds toward the Oregon International EcoPort container shipping development project in Coos Bay.
• The Professional Animal Auditor Certification Organization (PAACO) has again certified the 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. 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.

Highlights

• Maintained protection of 1% flavored milk in school meal programs
• Led eleven national agricultural, anti-hunger, nutrition, and medical groups in a virtual listening session urging the White House to prioritize access to affordable, diverse and nutritious foods
• Helped organize a message from 446 agricultural stakeholders calling on the Senate to pass ag labor reform this year
• Urged President Biden to grant dairy access to the H-2A agricultural guestworker visa program

NMPF has made significant progress in advancing policy on behalf of its members in 2022, despite the slowing pace of legislation typical to an election year.

NMPF’s work on federal nutrition programs made significant inroads. Ensuring students access to healthy milk has long been a dairy priority, with NMPF leading efforts to safeguard schools’ ability to choose the milk varieties they serve. USDA in February issued a final rule protecting the allowance of 1% flavored milk in school meal programs through the 2023-24 school year, and the House Committee on Education and Labor in July approved a child nutrition reauthorization bill which bars USDA from preventing schools from offering milk varieties that are consistent with the Dietary Guidelines for Americans (DGA). The House bill, if enacted, would protect 1% flavored milk and all varieties consistent with the DGA as options for schools. Equally important, it signals to USDA and other policy makers that protecting milk varieties consistent with the DGA is a House priority.

NMPF is also advocating for increased access to affordable, diverse, and nutritious food in all federal nutrition programs. This summer’s focus has been on the White House as it crafts its nutrition strategy to be released at its Conference on Hunger, Nutrition, and Health later this month. In June, NMPF led 11 national agricultural, anti-hunger, nutrition, and medical groups in a virtual listening session urging the White House to prioritize increased access to food and providing in federal programs food options that allow for cultural influences, nutritional needs, and taste preferences.

NMPF also has led focused efforts on agricultural labor reform. Senators Mike Crapo, R-ID, and Michael Bennet, D-CO, continued their negotiations on an ag labor reform measure in 2022, working on improvements to the bipartisan House-passed Farm Workforce Modernization Act that will provide the changes vital for agricultural producers and maintain protections for farm workers. NMPF has been assisting this delicate process, informing Senate offices of dairy’s specific workforce needs and building broader support for passing ag labor reform. In addition to meeting with key Senate offices, NMPF helped organize a message to all senators and leadership in August from 446 agricultural stakeholders calling on the Senate to pass agricultural workforce reform this Congress, citing rising food costs and the current labor market crisis as adding to the dire need for reform.

Outside Congress, NMPF continues to explore more immediate relief for dairy farmers, urging the Biden Administration to allow dairy access to the H-2A agricultural guestworker visa program. NMPF president and CEO Jim Mulhern wrote President Biden in May, imploring him to issue an executive order to exempt dairy worker positions from H-2A’s seasonality requirement. This would allow dairy farmers access to the guestworker program. Given dairy’s worsening workforce situation, the nation’s inflation challenges, and the administration’s interest in immigration reform, this has been the right time for NMPF to renew its relevant and increasingly urgent request.

Highlights

• Provided backbone of FMMO economics analysis as NMPF guides industry to modernized pricing system
• Focused industry communications to build consensus as FMMO modernization moves forward

Federal Milk Marketing Order modernization is a critical goal for NMPF members in 2022, with NMPF asserting leadership through its discussions with members and stakeholders on how to best craft solutions for farmers and the industry.

Economic analysis and guidance is the backbone of successful FMMO changes. The focus of FMMO modernization is the dairy product pricing formulas, which determine the federal order component and Class prices and thus constitute the foundation of the entire order system. The formulas need to provide accurate reflections of the real-world conditions under which the components of dairy farmers’ milk are actually transformed into such products, via such factors as producer milk composition, manufacturing costs, and product yields. These formula factors mostly have not been updated since 2000, while the dairy industry has evolved significantly.

About 20 federal order and milk marketing specialists from the staffs of NMPF member cooperatives, led by including Chief Economist Peter Vitaliano and Jim Sleper, a consultant and FMMO expert, are actively participating in this extensive effort, which so far has involved over 60 virtual and in-person meetings, with a goal of having a complete package of all pertinent recommendations for consideration and approval by the NMPF Economic Policy Committee and the Board of Directors at the annual meeting this fall. After that, NMPF will offer a comprehensive proposal to USDA to amend the orders, potentially leading to a national hearing on these issues in 2023.

In tandem with the policy analysis meeting, NMPF experts have worked with its member services staff on a series of hour-long Zoom webinars for membership to reviewed FMMO issues, giving participants the opportunity to pose questions, offer input and understand how task force recommendations may affect their respective cooperatives. NMPF staff also provided customized webinars to three cooperative members.

In addition to those virtual sessions, NMPF created a structured dialogue among state dairy organizations about major policy issues, including milk pricing, by organizing a state dairy association summit meeting on July 11-12 that gathered 45 farmers and executives from 22 state organizations in Chicago. Participants gained a deeper understanding of pressing public policy challenges affecting other regions and learned more about how national issues are being handled at the local level, in milk pricing and in areas both within and outside economics.

While FMMO work continues, the economics team continues to oversee the administration of the Cooperatives Working Together (CWT) program, a voluntary, marketing-focused export program, helping member cooperatives gain and maintain market share in the international market. The team’s work in administering the program includes recommending assistance levels, providing market insight and managing the dispersal of funds.

Finally, the team, which in July merged with USDEC economics staff to provide comprehensive analysis across the dairy spectrum, offered its economic and market insight through engaging with farmers, cooperatives, processors and the broader industry, through August delivering nearly 40 speaking engagements and 42 market publications in addition to many telephone conversations, Zoom meetings and in-person conversations throughout the year.

Highlights

• Championed the Ocean Shipping Reform Act as it became law and worked to ease record port congestion and fees.
• Led efforts to advance the U.S. government’s initiation of a second case against Canada for their non-compliance with USMCA’s dairy provisions.
• Successfully held at bay several proposed policies to limit dairy trade in Latin America.

NMPF’s work to expand export market opportunities for U.S. dairy products has helped support a record $4.8 billion in dairy exports in the first half of 2022, a year-over-year increase of 27 percent. NMPF collaborates with the U.S. Dairy Export Council (USDEC) to advance NMPF member interests.

President and CEO Jim Mulhern joined President Biden at the White House in June to welcome the signing of the Ocean Shipping Reform Act (OSRA) into law. The legislation, aimed at easing the port congestion plaguing dairy and other exporters, caps NMPF and USDEC’s year-long efforts to help shape and advance the bill in Congress.

In addition to new protections for dairy exporters, including limits on fees incurred outside of exporters’ control, the new law directs the Federal Maritime Commission to draft additional regulations to ensure ocean carriers are not unduly refusing to transport U.S. exports. NMPF has also pressed the administration for measures to expand shipping equipment availability and iron out logistics challenges, including securing key port pop-up sites to facilitate the processing of shipping containers.

NMPF and USDEC also continue to be vocal advocates for free trade agreements that lower barriers for dairy exports, with the Biden Administration heeding NMPF’s calls to ensure existing deals are strongly enforced. Part of this year’s effort included successfully securing U.S. government support for a second dispute settlement panel over Canada’s refusal to expand dairy market access in accordance with its U.S.-Mexico-Canada Agreement commitments.

Additional efforts have focused on Mexico and Central and South America as protectionist sentiments continue to surge from Mexico to Chile. NMPF has focused on ensuring existing market access opportunities are preserved in the face of regulatory changes and anti-trade policies.

In Mexico, after deep engagement from NMPF and USDEC, new Mexican milk powder regulations were implemented on July 8 in a manner that allowed trade to keep flowing. The trade policy team also helped ensure that Panama’s appeals to shirk its dairy market access FTA obligations were rejected by the U.S. government and to push back against anti-import sentiment in Colombia, Chile, Peru, Ecuador, and other key regional markets. As additional countries retreat inward and embrace protectionist stances toward trade, NMPF strives to ensure counterproductive policies that would limit the ability of consumers to access U.S. dairy products are met with strong opposition.

Highlights

• Developed strategies to maximize benefits of sustainability provisions included in the Inflation Reduction Act, a key accelerator towards meeting the dairy industry’s 2050 sustainability goals
• Helped shape the upcoming FDA antibiotic residue sampling assignment to ensure farmer and cooperative needs are being met
• Advanced development of the FARM Biosecurity module, bringing in on-farm elements from the Secure Milk Supply Plan for continuity of business as herd-threatening diseases make headlines around the world
• Seized a once-in-a-generation opportunity, collaborating with USDEC and Dairy Management Inc., to host the International Dairy Federation World Dairy Summit in 2023
• Prepared NMPF’s response to an expected FDA guidance on the use of dairy terms in plant-based beverages while arguing the need for labeling integrity before the agency.

Regulatory work often focused on building upon past successes and slowly erasing regulatory mistakes. NMPF regulatory staff’s wide breadth of issues in 2022 including monitoring the development of the new WOTUS rule and the evolving PFAS regulations to expanding NMPF’s nutrition presence through the Dietary Guidelines for Americans and Women, Infant and Children supplemental nutrition program.

Critical support to the organization ran across the full scope of regulatory efforts. The Inflation Reduction Act passed in August includes numerous provisions that may benefit dairy farmers, but only if their revenue and carbon-reduction possibilities are maximized. NMPF regulatory staff are working with dairy farmers and stakeholders across the industry to enhance opportunities.

NMPF collaborated with FDA, state officials and industry to develop a new antibiotic residue sampling program being administered by FDA. NMPF sits on the NCIMS Appendix N committee to ensure dairy farmer needs are being met during the development of such programs.

Herd-threatening diseases continue to pop up around the world from high pathogenic avian influenza in the United States to foot and mouth disease threatening to enter Australia. NMPF through the National Dairy FARM Program is continuing to expand the suite of biosecurity resources available for dairy farmers to work to protect their herd and employees from a potential outbreak.

The United States is set to host the 2023 International Dairy Federation World Summit in Chicago, Illinois. NMPF, working with USDEC and DMI, is a key player in developing the agenda for the conference which is set to highlight the United States dairy industry.

In light of the draft guidance “Labeling of Plant-based Milk Alternatives and Voluntary Nutrient Statements; Draft Guidance for Industry “being sent to the Office of Management and March for review before its potential release, NMPF continues to argue the need for labeling enforcement and transparency  by FDA. While what the guidance outlines is unknown, NMPF continues to emphasize to FDA that any guidance which does not align with the standards of identity regulations is in violation of the Administrative Procedures Act.

Highlights

• Hosted more than a dozen meetings on updating FARM Animal Care standards
• Unveiled new FARM Environmental Stewardship questionnaire enabling dairy farmers to better share their sustainability story
• Provided resources and training to support farmers raising dairy calves through the Calf Care and Quality Assurance program
• Convened working group to update Environmental Stewardship program

The National Dairy Farmers Assuring Responsible Management (FARM) Program is refining and growing its Animal Care and Environmental Stewardship program areas in preparation for new versions in 2024 as it harnesses the latest science and best management practices with significant farmer leadership, feedback and stakeholder discussion.

FARM’s Animal Care program standards are revised every three years to reflect the most current science and best management practices within the dairy industry. Working closely with the FARM Animal Care Task Force and NMPF’s Animal Health and Well-Being Committee, those committees have been developing recommendations for Animal Care Version 5 throughout 2022, This effort has included over a dozen meetings and town hall discussions to review existing standards, incorporating results from an industry-wide survey into discussion and using other sources of feedback to inform recommendations to improve the program.

The FARM Animal Care Program this year has also co-led an initiative with National Beef Quality Assurance to elevate U.S. calf raiser standards by uniting around key best management practices. The Calf Care and Quality Assurance (CCQA) program was developed with an understanding of the diversity of calf-raising enterprises, being science and outcomes-based while maintaining facility type and size neutrality. CCQA’s animal care reference manual, online modules and self-assessment tool serve as a framework and valuable resource for the calf-raising industry.

FARM’s Environmental Stewardship program area has seen similar growth and development, unveiling a questionnaire that enables dairy farmers to better share their sustainability story. The Conservation Practice Questionnaire (CPQ) is an optional add-on to the existing Environmental Stewardship Version 2 evaluation, reporting dairy farmers’ field and dairy-level conservation practices. After the questionnaire’s pilot, refinement and approval process earlier this year, the CPQ has been fully integrated into evaluations for participating farms.

With the launch of Environmental Stewardship Version 3 on the horizon in 2024, the FARM Program has also convened a working group and is collaborating with the Innovation Center for U.S. Dairy to update the greenhouse gas model that powers the program. Work is underway to transition to a “process-based” model through work with RuFaS – an initiative involving researchers from across the country focused on environmental modeling of dairy farms. Shifting to a process-based model offers several benefits for addressing customer requests while offering more insights to farmers and FARM Program participants.

Highlights

• Coordinated farmer appearances at numerous congressional policy panels
• Placed farmer perspectives in mass-market media
• Developed dairy’s next-generation leadership through timely webinars

Farm Bill hearings and listening sessions held by the House and Senate Agriculture Committees this spring and summer provided another opportunity for NMPF to proactively engage its members of all sizes, and across the country, to provide critical input to Congress as they prepare to craft a new farm bill next year.

NMPF recruited and worked closely with several farmer leaders, including Melvin Medeiros, a Dairy Farmers of America producer from California and NMPF Executive Committee member; Ashley Kennedy, a Michigan Milk Producers Association producer from Michigan; and Lolly Lesher, a DFA producer from Pennsylvania and NMPF Dairy Voice Network member on their testimony before Congress in favor of maintaining and strengthening the Dairy Margin Coverage program and providing additional resources to help farmers enhance their ongoing environmental stewardship efforts.

More informally, NMPF also worked with its member cooperatives to secure farmer participation at a variety of listening sessions held in the field. The events featured multiple members of NMPF’s farmer leadership, including Steve Schlangen, Chairman of Associated Milk Producers Inc. and an NMPF Executive Committee member from Minnesota; Joey Fernandes, a Land O’Lakes producer from California and NMPF board member; Jim Boyle, a United Dairymen of Arizona member from Arizona and Chairman of NMPF’s Immigration Task Force; and Medeiros. Other producer witnesses included Jeremy Visser, a Northwest Dairy Association/Darigold board member from Washington; Jim Werkhoven, an NDA/Darigold member from Washington and former NMPF board member; Charles Krause, a DFA member from Minnesota; and KC Graner, an LOL ag retail member-owner from Minnesota.

While NMPF-affiliated farmer participants hailed from different parts of the country, NMPF helped hone a cohesive message nationwide, focused on continuing and building on current dairy policy and making additional, needed investments in conservation, trade, and nutrition programs.

NMPF also communicated dairy’s policy message through targeted efforts to place farmers voices in mass-market media, allowing the industry’s best messengers to break through media noise. Brittany Nickerson-Thurlow, Medeiros, and Josh Gladden, all members of the NMPF Dairy Voice Network created last year, each bylined op-ed articles on dairy’s policy needs in daily newspapers in Florida, California and Arizona, resulting in follow-up interviews from the Wall Street Journal, BBC and other globally known outlets.

At the same time, NMPF communications staff helped develop and serve the next generation of dairy-farmer leadership through its Young Cooperators (YC) program. The YC Program is providing virtual and in-person educational and leadership development opportunities every month this year, covering a variety of topics of importance to young and beginning farmers including farm safety, employee onboarding, transition planning and consumer perspectives on dairy cattle welfare.

YCs also met this year in Washington, D.C. for the first time since 2019 for the program’s capstone Dairy Policy and Legislative Forum. 45 dairy farmers from 15 states and representing ten member cooperatives participated in the two-day event, which included discussions about political engagement and dairy policy issues, along with training on how to be an effective advocate and spokesperson for dairy. YCs then headed to Capitol Hill to speak with members of Congress and their staffs about NMPF priorities.