News for Dairy Co-Ops

NMPF’s September newsletter sums up the work its dedicated staff have done for dairy farmers and the cooperatives they own so far this year, heading into the critical election season. With August a slower month in Washington in late summer because of the annual congressional recess, Labor Day week is a great chance to take stock of what’s been done so far.

Thank you for reading this team-by-team update of NMPF’s work so far this year and that you find it useful. We strive to lead dairy toward its best possible prospects for policy progress, no matter who may win in November. Thank you, again, for this opportunity to serve.

• USDA’s recommended FMMO decision incorporates NMPF proposals
• Economics team member provided market outlooks and FMMO process updates across the country

NMPF’s Joint Economics Unit saw intense Federal Milk Marketing Order modernization in 2024, especially in the year’s earlier months. NMPF submitted its final legal brief to USDA in March, emphasizing that farmers are the reason the order system exists and that they should be the priority as USDA considers its final decision.

USDA released its recommended FMMO modernization plan July 1, agreeing in large part with the underlying principles of NMPF’s proposal. USDA’s biggest difference with NMPF was its establishment of a Class I mover for extended shelf-life products, which consists of the average of with an adjustable mover, even as most of the U.S. milk supply would revert to the “higher-of” formula in effect until 2019, as NMPF and its members advocated. NMPF-USDEC Joint Economics team members explain USDA’s recommended decision here.

Members of NMPF’s FMMO task force have reconvened to write comments on the recommended decision, which will be handed in by the Sept. 13 comment deadline for all stakeholders. USDA will review submissions and issue a final decision in November, followed by a producer referendum likely near the end of the year. Any changes will be implemented in early 2025, ending the formal FMMO modernization process.

Even as FMMO consumed team energy, members of the economics team traveled the country in 2024, providing expertise on changing market conditions throughout the year and updates on the FMMO modernization process.

Stephen Cain, senior director of research and economic analysis for NMPF, and Dr. Peter Vitaliano, vice president for economic policy and market research for NMPF, presented updates on the federal order modernization efforts to the NMPF Young Cooperators in February, the Southeast Milk Inc., Leadership Experience (SMILE) in May, and to the NMPF Board of Directors periodically. In August, Cain travelled to Detroit to update Michigan Milk Producers Association on the next steps in the process.

Producers were also updated on current and changing market conditions through 2024. Will Loux, senior vice president of global economic affairs for NMPF and USDEC, presented a domestic and export market outlook to South Dakota Dairy Producers in January and Dairy Farmers of America in July, as well as an update on the state of the dairy industry to the Idaho Milk Processors Association in August.

The economics team also met with the boards of United Dairymen of Arizona, Agri-Mark, Land O’Lakes, and Michigan Milk Producers Association to provide an update on Cooperatives Working Together renewal and modernization efforts. Cain and Dr. Vitaliano also provided outlook presentations for the National Ice Cream Mix Association annual meeting in January and to the American Butter Institute in April. Dr. Vitaliano also gave a butter-specific presentation to the joint American Dairy Products Institute-American Butter Institute annual conference in April.

Amid this backdrop, the dairy economy itself showed signs of improvement. The Dairy Margin Coverage Program, the main federal safety net for U.S. milk producers, saw its fourth highest ever margin in July, at $12.23/cwt, with the all-milk price at $22.80/cwt. End of August dairy and grain futures indicated that the DMC margin would average around $12.25/cwt for all of calendar year 2024.

• Secured common dairy priorities across farm bill titles in all three farm bill proposals
• Built bipartisan congressional support to restore “higher of” Class I mover formula
• Won legislative victories on flavored milk and sodium to shape school meals rule
• Advocated successfully for FDA authorization of Bovaer to curb enteric methane emissions

NMPF has worked with Congress throughout the year to ensure that both chambers reflect strong and shared support for dairy priorities, even as work to pass a new farm bill stalled. The result is overlapping, pro-dairy policies in every significant legislative farm bill proposal offered thus far, including the House farm bill sponsored by Chairman GT Thompson, R-PA, the Senate Democratic framework introduced by Chairwoman Debbie Stabenow, D-MI, and the Senate Republican framework proposed by Ranking Member John Boozman, R-AR.

Each of these proposals reauthorizes the Dairy Margin Coverage safety net and updates its production history calculation to use recent data. They also require USDA to conduct mandatory, biennial manufacturing cost surveys to provide dairy stakeholders with better data to inform future make allowance discussions. And each also continues USDA’s voluntary conservation programs and moves the remaining Inflation Reduction Act funds into the conservation baseline while keeping the Environmental Quality Incentives Program’s 50% livestock set-aside. And all of them continue important trade promotion programs and include vital language to protect the use of common food names worldwide.

Differences remain, of course. NMPF is pleased that the House bill and the Senate Republican framework include the bipartisan Whole Milk for Healthy Kids Act to reverse the underconsumption of nutritious milk in schools. Similarly, NMPF is glad that the Senate Democratic framework includes the bipartisan EMIT LESS Act to better target conservation programs toward helping farmers reduce enteric methane emissions. Both provisions merit inclusion in the final farm bill.

NMPF also appreciates efforts among dairy’s congressional champions to restore the “higher of” Class I mover formula to reinstate orderly milk marketing. House Agriculture Committee Chairman Thompson included this fix in the House’s farm bill, while Senate Dairy Subcommittee Chair Kirsten Gillibrand, D-NY, led a bipartisan letter urging USDA to restore the previous formula. Finally, House Ag Representative Nick Langworthy, R-NY, and others in both parties advocated vocally for the restoration in the House farm bill. NMPF is pleased that USDA included this proposal for most milk in its Federal Milk Marketing Order recommended decision and commends these members of Congress for pushing for this solution.

NMPF secured more policy successes in other vehicles while laying farm bill groundwork. The fiscal year 2024 agriculture funding package included language to allow schools to offer low-fat flavored milk and to follow manageable sodium rules in any final school meals rulemaking. These provisions ensured that USDA’s school meals rule, made final in April, would enable schools to serve nutritious dairy foods that students will consume.

Years of NMPF efforts also drew dividends in May when the Food and Drug Administration announced that it had completed its review of the Bovaer feed additive and granted Elanco Animal Health, its U.S. sponsor, the right to market the product for use in lactating dairy cows. Bovaer has a proven track record of reducing enteric methane emissions, so this represents a milestone in NMPF’s years-long advocacy for enteric-reducing solutions. NMPF continues to seek enactment of the bipartisan Innovative FEED Act to provide FDA with clear authority to review similar future products as foods, not as drugs. This bill is included in the Senate’s fiscal year 2025 Agriculture-FDA funding bill, a path to enactment this year.

NMPF’s work all year also sets the stage for potential progress during the post-election “lame duck” congressional session, when Congress will need to pass either a farm bill or an extension and likely will need to pass a government funding bill.

• Secured funding to advance dairy industry disease preparedness
• Submitted comments reflected in USDA rulings on school meals
• Intensified dairy advocacy in the Dietary Guidelines for Americans
• Defended dairy’s interests against proposed EPA changes including manure reporting, rodenticide

The Regulatory Affairs team this year has protected and advanced dairy’s interests across areas including disease preparedness, nutrition, on-farm environmental practices and animal health.

The detection of HPAI H5N1 in dairy cattle in March spurred industry-wide coordination and partnership with state and federal agencies with NMPF central to the ongoing response, staying in constant communication with the agencies involved.

NMPF in August was awarded a cooperative agreement with USDA to collaborate on an H5N1 technical group that will address pressure points in the outbreak response. The technical group consists of dairy farmers, cooperative and processor representatives, veterinarians, state animal and public health officials, National Animal Health Laboratory Network (NAHLN) laboratorians, milk quality testing laboratorians, licensed milk haulers and other federal regulatory representatives. The group will evaluate current challenges and gaps in H5N1 testing and surveillance, culminating in recommendations on strategies and industry guidance. NMPF will communicate response and recovery strategies to our stakeholders as the discussions progress.

Building on a 2021 grant from USDA which allowed for the creation of the Farmers Assuring Responsible Management (FARM) Biosecurity Program, NMPF secured funding from USDA APHIS’ National Animal Disease Preparedness and Response Program (NADPRP) in May to support two projects advancing dairy cattle disease preparedness. The first project, which kicked off in July, will expand on the current enhanced biosecurity resources and develop an in-person enhanced biosecurity plan training. The second grant, which launches in December, will bring together a group of stakeholders including dairy farmers, veterinarians, dairy cooperatives and processors, NAHLN laboratories and state and federal animal health officials to look at implementing the Foot and Mouth Disease bulk tank milk test during an outbreak.

NMPF filed comments Feb. 13 and joined with other agriculture groups in coalition comments to EPA’s Advanced Notice of Proposed Rulemaking weighing in on the reporting of air emissions from manure under the Emergency Planning and Community Right-to-Know Act (EPCRA). Air emissions reporting under EPCRA has been an ongoing battle that NMPF has contested for years.  NMPF and other agriculture groups also sent comments to EPA on Feb. 13 strongly opposing any policy in the “Draft Biological Evaluation for the Rodenticides and the Rodenticide Strategy” that involves making rodenticides restricted-use products.

In nutrition, a critical area of regulatory concern this year, a dozen years of steady NMPF effort paid off for dairy farmers and the broader industry April 24, when USDA solidified 1% and fat-free flavored milk in school meals for children of all ages in its final school nutrition standards rule. This rule also includes added sugar limits by product and a weekly sodium limit. The amount of added sugar in flavored school milk generally falls below the new limit thanks to the dedication and work of NMPF members.

NMPF also underscored the significant role dairy plays in American diets in comments submitted July 26 to the Dietary Guidelines Advisory Committee. NMPF also jointly with IDFA sent a letter on Aug. 19 to Agriculture Secretary Tom Vilsack and Health and Human Services Secretary Xavier Becerra expressing concern with how the current Dietary Guidelines for Americans process has been unfolding. The letter voices concern with the committee’s lack of transparency when developing draft conclusion statements and urges the departments to adhere to the law’s science-based mandate for drafting, considering and publishing the guidelines.

The guidelines have significant effects on nutrition in the United States as the basis of federal nutrition policy and programs; they also help guide health promotion and disease prevention initiatives at the federal, state and local levels. The dietary guidelines committee is expected to release its scientific report with recommendations to USDA and HHS for updating the guidelines later this year; NMPF is committed to highlighting dairy’s value for American nutrition.

• Helped prevent international trade disruptions during H5N1 outbreak.
• Led engagement to implement several pressing supply chain priorities.
• Strengthened relationships in protecting common cheese names
• Secured a tariff cut from the United Kingdom.
• Established and renewed key alliances with dairy and agriculture organizations around the world.

NMPF this year has successfully pursued initiatives this year to promote U.S. dairy products around the world and support a positive trading environment for U.S. dairy exporters.

NMPF and USDEC collaborated with USDA officials on a regular basis to educate trade partners about the H5N1 virus and the continued safety of U.S. dairy products to successfully preempt implementation of trade barriers not founded in science.

The organization also played a key role in a trio of new policies that will help ensure a smoother export supply chain for U.S. dairy exporters. As part of implementing the Ocean Shipping Reform Act of 2022, the Federal Maritime Commission issued a final rule on May 28 that will help put guardrails around carrier billing practices and a final rule on July 23 that will define and regulate ocean carriers’ ability to use prohibitive pricing or to outright refuse to accept contracted shipments. The commission referenced NMPF and USDEC’s comments on the issues more than two dozen times in crafting the final rules that will ensure that U.S. dairy exports are reaching end customers on time and shippers are not being charged for fees incurred for factors outside of their control.

To help fortify the rail side of the supply chain, NMPF and USDEC worked with a coalition of supply chain service providers to secure $2 million within the 2025 Homeland Security appropriations bill to create a task force dedicated to tackling supply chain theft and fraud and coordinated with a coalition of shippers to support the June 25 introduction of the bipartisan Safeguarding Our Supply Chains Act Led by Representatives David Valadao, R-CA, and Brad Schneider, D-IL, the bill would authorize $100 million for fiscal years 2025 through 2029 to create a crime coordination center within Homeland Security Investigations, as well as a task force comprised of relevant agencies. These funds come as organized crime groups have increased container break-ins this year, damaging dairy shipments in the process.

In collaboration with USDEC and the Consortium for Common Food Names, NMPF has continued to champion the bipartisan, bicameral Safeguarding American Value-Added Exports (SAVE) Act in Congress. Originally introduced in May 2023 as a bipartisan effort to increase U.S. government action to protect common food names – like “parmesan” and “feta” – the SAVE Act would represent the first farm bill effort on common names. Following extensive engagement from NMPF staff, both Senate and House Agriculture Committee leadership included the SAVE Act in their publicly released farm bill frameworks, signaling the bill’s widespread and bipartisan support.

NMPF’s common names advocacy also resulted in the House of Representatives including new agricultural-specific eligibility criteria in its Apr. 15 bill to renew the Generalized Systems of Preferences (GSP) trade program. The requirements to provide open and fair market access to U.S. agriculture exports and protect the generic use of common food and beverage terms would give U.S. dairy producers a fairer opportunity to succeed in key, developing markets.

NMPF’s efforts to secure greater market access expanded across the pond. NMPF and USDEC have worked to close the access gap in the United Kingdom, where EU suppliers still receive zero-tariff access post-Brexit, and Australia and New Zealand exporters enjoy preferential access. In response, NMPF and USDEC petitioned for the United Kingdom to reduce its most-favored nation (MFN) tariff rates for variety of dairy products. This effort yielded an important early success on March 16, when the United Kingdom announced that it was suspending tariffs on imports of certain milk powders used for food preparations for at least two years, lowering a 6 percent tariff to zero.

To grow U.S. dairy’s voice globally and preserve and expand market access in key markets, NMPF forged and renewed partnerships with influential agricultural and dairy organizations. Strengthening its presence in Latin America, NMPF and USDEC signed a memorandum of understanding (MOU) with Brazilian milk producers federation Abraleite and renewed an existing agreement with Argentine farmer organization Sociedad Rural Argentina during a July 28-Aug. 3 trip to South America. These announcements followed a partnership that NMPF and USDEC signed with Colombian dairy organization, Asoleche, on June 4. The alliance has provided NMPF and USDEC with important insight and help during Colombia’s anti-trade efforts, including its unfounded investigation into U.S. exports of powdered milk products.

Colombia’s Ministry of Commerce, Industry and Tourism started a Subsidies and Countervailing Measures investigation on July 5 alleging that between 2020-2023, U.S. powdered milk products that were exported to Colombia were subsidized by state and federal programs, damaging domestic Colombian producers of raw milk.

NMPF and USDEC in response have worked extensively with their legal team and affected members to cooperate with the investigation and develop the strongest reply possible. The effort includes close collaboration with the U.S. government to ensure that the government also sends a strong response. NMPF and USDEC have been supporting members exporting to Colombia with their own company response submissions to comprehensively refute the Colombian allegations.

NMPF and USDEC have also raised awareness and garnered political support for strongly responding to a potentially adverse outcome. In an Aug. 9 letter to U.S. Trade Representative Ambassador Katherine Tai and U.S. Department of Agriculture Secretary Tom Vilsack, NMPF and USDEC urged the U.S. government to prepare all available tools to respond forcefully should Colombia’s politically motivated investigation yield a decision that would lead to tariffs on U.S. milk powder imports. This coincided with another letter sent on Aug. 9 by the U.S. House Agricultural Trade Caucus to the Colombian Ambassador to the United States. The Congressional letter highlighted the long-standing commitment of the U.S. dairy industry to working with its Colombian counterparts and encouraged the two industries to work together to strengthen the dairy sectors in both countries instead of pursuing meritless investigations.

Investigators must rule on the preliminary results of the investigation within several weeks, and, if applicable, order the establishment of provisional measures. This would be followed by a public hearing and more comment periods.

Additionally, in preparation of global climate talks next year, NMPF and USDEC signed an MOU with World Farmers’ Organization on April 30, to support greater farmer representation in global trade and sustainability policymaking.

• Member-driven proposals potentially expand exports
• Plan gains support across memberships

A painstaking process toward an improved, renewed Cooperatives Working Together Program has highlighted 2024, with NMPF staff experts, member cooperative economists, and dairy farmer leaders from NMPF members together re-envisioning a critical program for boosting U.S. dairy exports, with NMPF’s Board of Directors on Aug. 22 approving a series of proposed improvements to CWT.

Proposed changes include expanding product eligibility to all cheese varieties, extended shelf life/aseptic fluid milk, evaporated/condensed milk and ice cream; piloting programs offering targeted support for value-added skim milk powder sales to Southeast Asia and cheese sales to Central America and the Caribbean; increasing bid flexibility to extend eligible delivery periods, and removing volume limits on a trial basis; providing increased insight on market dynamics driving support levels with participating cooperatives; and creating an advisory group to provide strategic direction.

The adjustments will be considered at NMPF’s annual board meeting in Phoenix in October and comes after months of advisory, member-led meetings and discussion. Meanwhile, the current program continues to deliver results for U.S. dairy farmers and cooperatives.

CWT member cooperatives secured 49 contracts in August, adding 5.2 million pounds of product to CWT-assisted sales in 2024. In milk equivalent, this is equal to 44.8 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, Middle East-North Africa and South America and will be shipped from August 2024 through January 2025.

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.

• Launched Animal Care Version 5
• Launched Workforce Development Version 2
• Provided Biosecurity best practice amidst H5N1 Outbreak

The National Dairy Farmers Assuring Responsible Management (FARM) Program’s commitment to continuous improvement has shown throughout the year. Updated versions of its Animal Care, Workforce Development, and Environmental Stewardship program areas are advancing its commitment to sharing dairy’s positive social responsibility story. The program also turned its attention to supporting farmers as they navigated the H5N1 outbreak, an immediate crisis that may become a long-term effort.

FARM Animal Care Version 5 released updates July 1 focusing on best practices for calf disbudding, colostrum management, and pre-weaned calf care. Euthanasia and fitness to transport for all age classes rounded out the latest updates. The changes came after a two-year review and revision period that included input from FARM’s Farmer Advisory Council and Animal Care Task Force, along with NMPF’s Animal Health and Well-Being Committee. Since launching, 448 Version 5 evaluations have been completed by 72 participant cooperatives and processors.

FARM Workforce Development Version 2 also debuted in July, with updates focused on improving the evaluation tool used on-farm to assess human resource management and safety best practices. Seven questions were added to strengthen the tool’s coverage of communication and performance management.

FARM Environmental Stewardship Version 3 will integrate the Ruminant Farm Systems (RuFaS) model, as the new engine behind the tool. This model incorporates updated science and the ability to run what-if scenarios to assess practice and technology options. results. The updated platform offers flexibility, with the choice to enter minimum data inputs like Version 2 and optional data inputs – like details on crop production practices – for more tailored results. This upgrade will support industry efforts to be greenhouse gas-neutral by 2050 and respond to growing customer requests.

While FARM Program updates have been implemented, FARM Biosecurity proved essential in helping guide dairy farmers through a real-time biosecurity threat – the presence of H5N1 virus in dairy cattle. FARM provided timely, accurate information and industry-leading resources as the first cases of H5N1 appeared in U.S. dairy cattle.

NMPF’s Chief Science Officer. Dr. Jamie Jonker, served as a leading industry expert and spokesperson shortly after the first USDA confirmation of H5N1 in Texas dairy cattle on March 25. Jonker also led an April 1 NMPF member and FARM participant webinar on the topic that also featured Dr. Mark Lyons from USDA and Dr. Fred Gingrich from the American Association of Bovine Practitioners, giving the latest information on the fast-moving situation. The webinar attracted 1,380 registrants and began an ongoing industry education effort.

Dairy producers and cooperatives can enroll in FARM Biosecurity- Enhanced training to learn the basics of developing an enhanced biosecurity plan. Additionally, there is a suite of resources such as the Biosecurity Prep Guide, User Guide for the FARM Biosecurity database, map checklist, and video tutorials for those interested.

Also highlighting the first half of 2024, FARM held its annual Evaluator Conference July 22-24 in Lexington, KY for FARM Program Evaluators to connect, learn about recent program updates and hear from allied industry subject matter experts. The first in-person Evaluator Conference since 2021 featured 50 evaluators and 29 organizations and was sponsored by Alltech, which also provided an evening reception and distillery tour. Participants heard from industry professionals on assorted topics surrounding the Animal Care, Environmental Stewardship, Biosecurity and Workforce Development program areas.

• Helped lead and coordinate industry response to H5N1 in dairy cattle developments
• Expanded educational opportunities for NMPF members
• Generated advocacy opportunities via Young Cooperators program and other initiatives

NMPF communications staff played an industry leading role in heading off a potential crisis in the public’s confidence in milk via responding to the H5N1 outbreak in dairy cattle, coordinating media outreach while providing members with up-to-the-minute updates on federal and marketplace responses to an unprecedented animal health concern.

Coordinating with other industry actors including the cross-sector Dairy Communications Management Team, NMPF led the drafting of initial messages to dairy farmers and assisted in messages distributed to the public and media upon USDA’s first disclosure of cases on March 25. Numerous NMPF staff interviews with news organizations, combined with frequent member alerts and a series of well-attended webinars represented a multi-prong approach to managing the acute phase of reporting. In recent weeks, as cases have ebbed, NMPF has continued in its informational role.

As a result in part of NMPF’s efforts, no discernable decrease in milk sales was connected to the outbreak, while farmer navigation of changing federal and state rules, while inevitably rocky at times, was smoothed considerably by accurate, timely information. As 2024 approached its waning month, continued sporadic cases of H5N1 in dairy herds signaled that the virus wasn’t simply going to disappear, underscoring the need for continued vigilance.

NMPF this year significantly expanded its webinar offerings, providing members with valuable educational opportunities. NMPF offered 13 member webinars during the first eight months of the year, covering critical topics such as FMMO modernization, biosecurity, cybersecurity and farmer mental health. By broadening its educational resources, NMPF continues to provide tools to its members to help them navigate complex challenges, enhance operations and maintain a competitive edge in the marketplace.

NMPF also developed and served the next generation of dairy-farmer leadership through its National Young Cooperators (YC) program, hosting its annual Dairy Policy and Legislative Forum in June. Forty-nine young dairy farmers and cooperative coordinators from 17 states representing ten member cooperatives participated in 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 staff about NMPF priorities including the 2024 Farm Bill, dairy labeling and foreign market access.