Tag: dairy exports

NMPF Continues Push on Supply Chain Constraints

Posted on by Theresa Sweeney

While national headlines are dominated with news of delayed imports threatening to put a damper on the upcoming holidays as a result of supply chain disruptions, U.S. dairy exporters are facing an increasing, and in some ways opposite, difficulty: Securing containers and cargo ship space for their products.

That issue is gaining broader attention as well, thanks in large part to the efforts of the U.S. Dairy Export Council (USDEC) and NMPF, which along with other ag organizations and companies are leading the policy push for supply chain improvements.

That work commanded a larger spotlight recently as Congress convened to examine the supply chain impacts on American agriculture and related sectors. The current supply chain crisis could cause “irreparable harm” to agriculture, Mike Durkin, President and CEO of Leprino Foods, said at a U.S. House Agriculture Committee hearing Nov. 3 about how supply chain issues are affecting export markets for Leprino and the U.S. dairy industry. USDEC and NMPF voiced strong support for Durkin’s call for U.S. government action to more effectively tackle the shipping crisis and its effects on dairy farmers and manufacturers.

“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon. I’m here to talk about a critical component of this disruption that has not received much attention – exports,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”

Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help American agriculture producers reach their foreign markets effectively.

Even as cargos coming from Asia are at full capacity, 72% of containers leaving major California ports are leaving empty – a record volume. While supply and demand issues are a large part of the problem, foreign-owned carrier lines have taken advantage of the situation to forgo loading U.S. exports in favor of loading empties for a quick turnaround toward more lucrative Asian imports. As a result, continually rolled bookings, unprecedented shipping rates, product deterioration, and high detention and demurrage fees have cost American dairy exporters nearly $1 billion through just the first seven months of the year. As a result, even as international demand for dairy products reaches records, U.S. shippers are losing market share to competitors as the United States risks its reputation as a reliable supplier.

NMPF, USDEC and policy partners continue to drive home with the administration and Congress the long-term implications this crisis will have on dairy exporters unless measures are taken to reign in unwarranted carrier behavior. That work has helped to build bipartisan support in Congress for the Ocean Shipping Reform Act (H.R. 4996), which now has 65 cosponsors. A briefing paper on the legislation is here; a new “frequently-asked questions” document compiled by NMPF can be found here. In October, NMPF and USDEC urged the Department of Transportation to voice support for the legislation and provided detailed recommendations on several other concrete steps that DOT and its interagency partners could take to help address the shipping crisis.

The past month has seen a spate of steps announced to begin to help address the supply chain problems. The announced follow a series of meetings NMPF, USDEC were the sole dairy organizations that a long with  a few other agricultural leaders held with officials in September, including with White House Ports Envoy John Porcari and other White House supply chain task force staff, to help drive home the depth and complexity of the shipping-related challenges facing dairy exporters.:

  • As a partial response to NMPF sharing specific data on the impact of the issue and direct advocacy, USDA announced Sept. 29 that the agency will provide $500 million “to provide relief from agricultural market disruption, such as increased transportation challenges, availability and cost of certain materials, and other near-term obstacles related to the marketing and distribution of certain commodities.” NMPF will be sharing member feedback on how the funds could be best used to mitigate the congestion in a meeting with USDA officials next week.
  • On Oct. 13, following months of intensive advocacy to the administration from NMPF, President Biden announced a series of public and private commitments from ports, dockworkers and large companies aimed at addressing port bottlenecks that have been snarling supply chains for nearly a year. The commitments included
    • An expansion to 24/7 operations at the Ports of Los Angeles and Long Beach
    • An International Longshore and Warehouse Union announcement that its members are willing to work the necessary extra shifts, and
    • A pledge from six large companies – Walmart, UPS, FedEx, Samsung, Home Depot and Target – to use the expanded hours to move more cargo off the docks so ships can come to shore faster.
  • On Oct. 20, California Governor Gavin Newsom issued an executive order that directs state agencies to identify state, federal and private land for short-term container storage; extend a temporary exemption to current gross vehicle limits to priority freight routes; and establish workforce training and education programs.

NMPF encourages the dairy farming community to reach out to elected officials to voice support for the proposed House legislation and highlight the importance of action to deal with the shipping crisis impacting dairy exports.

Dairy CEO Says Supply Chain Crisis Could Permanently Harm U.S. Agriculture

Posted on by Theresa Sweeney

The current supply chain crisis could cause “irreparable harm” to agriculture, Mike Durkin, President and CEO of Leprino Foods, said in testimony prepared for a U.S. House Agriculture Committee hearing today about how supply chain issues are affecting export markets for Leprino and the U.S. dairy industry. The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) voiced strong support for Durkin’s call for U.S. government action to more effectively tackle the shipping crisis and its effects on dairy farmers and manufacturers.

“The supply chain challenges have significantly impacted our business, and we don’t expect them to ease anytime soon. I’m here to talk about a critical component of this disruption that has not received much attention – exports,” Durkin said. “This export crisis may well result in irreparable harm to American agriculture as customers around the world are questioning the U.S. dairy industry’s reliability as a supplier.”

Durkin called on Congress to act on ocean shipping legislation, address critical transport-industry labor shortages, increase port hours of operation, and take other steps to help American agriculture producers reach their foreign markets effectively.

Leprino Foods, the largest purchaser of milk in the United States, is a family-owned, privately held company with 4,500 employees and facilities in Colorado, California, New Mexico, Michigan, Pennsylvania and New York. It supports over 1,000 dairy farms and is the largest producer of mozzarella cheese as well as a leading supplier of dairy nutrition products. Leprino exports 26% of its milk equivalent volume to 55 countries.

Across the industry, approximately one day’s worth of U.S. milk production each week goes to exports, which results in about $6.5 billion in U.S. dairy products being exported to over 133 countries.

“The strain of shipping challenges is taking a heavy toll on dairy exporters, which is why it was so important that the House Agriculture Committee heard today from companies such as Leprino Foods that are doing everything possible to hang onto foreign customers yet are still bearing the brunt of this problem,” said Krysta Harden, president and CEO of USDEC. “Dairy exporters are working hard to get American-made product to foreign customers in a reliable and affordable way, but the present situation can’t be sustained long-term. We need Congress and the Administration to move swiftly to improve the efficiency and fairness of supply chains.”

“Dairy depends on exports, a vital part of the total demand for the milk produced every day by America’s hard-working dairy farmers” said Jim Mulhern, president and CEO of NMPF. “We risk damaging foreign market relationships and long-term customers if we cannot better assure efficient export flows. Leprino Foods provided some important recommendations to Congress to address the supply chain challenges. We hope both they and the Administration act quickly to provide relief.”

Ports Crisis Costing Dairy Farmers, NMPF’s Castaneda Says

Posted on by Alan Bjerga

U.S. dairy exports are being hindered by supply chain backups as U.S. ports, NMPF Executive Vice President Jaime Castaneda says in an interview on RFD-TV. “It is holding up the amount of product that we can export overseas, therefore that actually impacts the price of every single producer in the country,” Castaneda said.

NMPF Works to Preserve Market Access in Colombia

Posted on by Theresa Sweeney

NMPF Executive Vice President for Policy Development and Strategy Jaime Castaneda testified in a hearing convened Aug. 12 by the Colombian Ministry of Trade, Industry and Tourism, calling on the Colombian government to terminate its safeguard investigation on imports of U.S. milk powder.

The Colombian government began the investigation in June to determine whether imports of U.S. milk powders were injuring its domestic industry, a move that appears to be politically driven. NMPF staff worked closely with USDEC’s regulatory team and South American office, as well as with U.S. exporters, to submit extensive data and information to Colombia to counter the Colombian livestock sector’s push to impose tariffs on U.S. milk powder exports.

Castaneda in his testimony highlighted that any imposed safeguard would create inefficiencies in the Colombian dairy processing sector and a market deficit of certain dairy products in Colombia, without helping its dairy producers. Castaneda called the safeguard request by Colombia’s cattle breeders purely political with no legal or factual basis.

“The milk powder import safeguards petition is a political action pursued in the months leading up to a presidential campaign at the expense of Colombia’s poorest and import-dependent small and medium-sized industries; it has no economic or commercial merit,” Castaneda said in his testimony. “By imposing a political safeguard, the Colombian government would create a serious conflict between Colombia and the United States, impacting Colombian exports of other products to the U.S.”

Castaneda encouraged the U.S. and Columbia to work together to expand overall milk consumption, benefiting farmers in both nations.

NMPF Works to Resolve EU Certification Barrier

Posted on by Theresa Sweeney

As a result of significant advocacy and technical engagement by NMPF in collaboration with USDEC August yielded two major milestones in NMPF’s year-long work with the U.S. government to preserve workable access opportunities for U.S. dairy exports requiring EU certification.

NMPF met Aug. 3 with a broad U.S. interagency team regarding the U.S. government’s plan on implementing the new EU certificates. That meeting provided critical clarifications on the extent of the new requirements and – most importantly – reassurances that the process would not impose new burdens on U.S. dairy farmers and processors. USDA on Aug. 13 then published a summary of that information, outlining that the new EU certification process would simply entail verification that the milk used was either regulated as Grade “A” or under AMS’s milk for manufacturing program.

That announcement resolved the crux of the concern – whether the U.S. would be able to implement the new EU certificates in a non-burdensome manner. The hard-won victory followed months of painstaking discussions between U.S. and EU officials regarding the strength of the U.S. dairy system and the upheaval that would unfold from either upending trade or imposing onerous new requirements on U.S. dairy This recognition that the U.S. dairy regulatory reliably produces safe products that meet the underlying goals of EU regulations even though implementation differs is precisely what NMPF had hoped to see achieved with the EU and had advocated for throughout the past year.

That breakthrough on core issues was complemented by an Aug. 12 announcement that would delay implementation of the new requirements from Aug. 21 to Jan. 15. Throughout 2021, NMPF advocated strongly both for a workable resolution to the new EU requirements and for more time to implement them.

The extension will enable USDA to ensure that the AMS Dairy Program will have its new electronic Agriculture Trade Licensing and Attestation Solution (ATLAS) system ready to be used by U.S. dairy exporters to complete the EU’s new certificates by the time they are required on Jan. 15. NMPF continues to work with the U.S. government to help ensure for a smooth transition and will closely continue to monitor implementation of the new certification program to make sure it works as advertised.

Congress and Maritime Commission Take First Steps on Ports

Posted on by Theresa Sweeney

NMPF welcomed bipartisan legislation introduced by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) on Aug. 10 to address unfair practices and charges implemented by ocean carriers. The legislation, entitled The Ocean Shipping Reform Act of 2021 (H.R. 4996), was the result of a strong push from NMPF, the U.S. Dairy Export Council (USDEC), and a coalition of agricultural exporters.

The bill would increase the Federal Maritime Commission’s authority to oversee and regulate ocean carrier activities, expand the agency’ enforcement options and penalties against violations, increase transparency and accountability of the commission and ocean carriers, and provide new opportunities for exporters to seek redress from ocean carriers for violations.

NMPF, with cooperation from the U.S. Dairy Export Council (USDEC), worked closely with congressional offices as the legislation was drafted, providing detailed examples and economic impact analysis with critical input from NMPF and USDEC members. The legislation represents an important step forward, but much work remains to be done to see it passed by congress.

The House also increased enforcement funding by $525,000 in late July for the maritime commission in the Department of Transportation’s appropriations bill and directed the agency to enhance assistance to U.S. exporters and importers without hiring lawyers.

Supplementing this congressional action, the maritime commission finally responded to persistent calls from NMPF and other agricultural organizations for more proactive enforcement measures by launching an audit of ocean carriers’ billing practices on July 20. The commission on Aug. 4 asked eight ocean carriers to justify port congestion surcharges as part of its investigation into unreasonable detention and demurrage charges.

NMPF will continue to proactively advocate with the administration and Congress to pursue additional solutions to support and complement the congressional action, including an effort to drive a more comprehensive near-term response from the administration to the shipping crisis.

Dairy Industry Commends Introduction of Ocean Shipping Reform Act

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) offered their support for bipartisan legislation introduced today by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), the Ocean Shipping Reform Act.

The dairy industry, as well as other exporters, has faced substantially increased costs to ship their goods overseas, challenges obtaining containers and other equipment to deliver their goods to ports and beyond, and often incur booking cancellations or delays for vessel space. Owing in part to the Covid-19 change in American online orders, imports have affected vessel operations and container availability, diminishing export options for American dairy products. Ocean carriers have exacerbated this situation with high detention and demurrage charges, the increased shipment of empty containers back to Asia, and other unfair practices.

The Garamendi-Johnson legislation is the result of a concerted effort by NMPF and USDEC, along with other agriculture producers and exporters, to highlight the challenges U.S. exporters face with port congestion and the unfair practices and charges implemented by ocean carriers. NMPF and USDEC are urging Congress and the executive branch to take swift action to address these critical problems.

The Ocean Shipping Reform Act would provide new authority to the Federal Maritime Commission (FMC) to address unjust and unreasonable practices by ocean carriers. It would institute new penalties against ocean carriers and marine terminal operators for violations of the Shipping Act, require expanded public disclosure from the FMC and carriers, and establish a series of new regulations against unfair carrier practices.

The bill also offers new oversight of carriers’ charges and fees and will permit the FMC to dedicate collected penalties as restitution to impacted exporters. NMPF and USDEC appreciated the opportunity to work closely with both Congressional offices as the legislation was drafted and are pleased to endorse the bill.

“We are grateful for the bipartisan leadership from Congressmen Garamendi and Johnson in developing and introducing the Ocean Shipping Reform Act,” said Krysta Harden, president and CEO of USDEC. “Dairy producers and manufacturers have faced unreasonable costs and unfair practices from ocean carriers that negatively affect U.S. exports, increasing costs and putting at risk established trading relationships. This legislation will hopefully curtail those abuses and encourage better export-oriented behavior moving forward.”

“Dairy exporters have faced unfair detention and demurrage charges, unreliable and unfair booking practices and cancellations, and unwarranted challenges trying to obtain containers and other equipment,” said Jim Mulhern, president and CEO of NMPF. “While some of these challenges are due to Covid-19 changes in retail purchases, carriers have abused the situation to their advantage. Our members need the U.S. government to act, and we welcome the introduction of this legislation as an important, positive step.”

The economic effects from these challenges are significant – the average cost of transporting a container is estimated to have increased by approximately 200% over the past year, while the estimated impacts to dairy producers from just January to May 2021 include over $200 million in added shipping and related costs, approximately 10 percent of the export value during the same period.

This legislation represents an important step toward implementing both short and long-term solutions, yet NMPF and USDEC continue to urge the importance of additional measures as well to address the challenges plaguing U.S. food and agricultural exporters expeditiously and fully. The organizations urged Congress to swiftly approve the Ocean Shipping Reform Act while at the same time championing the need for additional administrative solutions that could be implemented more immediately to address the ongoing shipping crisis.

Dairy Farmers Reinforce Trade Priorities with Ambassador Tai at Agriculture Event Hosted by Rep. DelBene

Posted on by Theresa Sweeney

The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) today thanked Representative Suzan DelBene (D-WA) for hosting U.S. Trade Representative Ambassador Katherine Tai for a roundtable in Burlington, WA to discuss agriculture trade priorities. At the event, Washington farmers and food producers from various sectors, including dairy, raised the importance of implementing a trade policy that expands agricultural exports.

Washington dairy farmers Jeremy Visser and Mike Schoneveld, member-owners of USDEC and NMPF-member Northwest Dairy Association/Darigold, conveyed the importance of exports and global market access for the dairy industry. Visser and Schoneveld praised Rep. DelBene for her leadership on dairy trade issues to help expand opportunities for dairy in international markets.

“NMPF appreciates the hard work that Rep. DelBene has long undertaken to encourage trade policies that help expand American agricultural exports. Her recognition of the critical role that exports play for farmers’ incomes and the rural economy has been central to the pursuit of trade policies that help deliver value to American dairy farmers and expand jobs in America. Dairy farmers are grateful to Ambassador Tai for launching the dispute settlement case against Canada’s restrictive access to U.S. dairy and appreciate Rep. DelBene’s advocacy on this matter as well. At the same time, dairy farmers are also keen to see a proactive trade agenda of opening new markets around the world,” said Jim Mulhern, president and CEO of NMPF.

“As solid as our track record has been to date, America’s dairy industry has not reached its full trade potential on the global stage. Each dairy product that we export – whether it’s cheese, milk powder, or another essential dairy ingredient – has a powerful impact across the entire supply chain.  Expanding while also defending market share abroad is critical to U.S. dairy manufacturers and exporters, especially cheese exporters that are encountering barriers disguised by the European Union’s Geographical Indications agenda,” said Krysta Harden, president and CEO of USDEC. “We thank Rep. DelBene for hosting Ambassador Tai to hear from Washington’s agricultural sector directly on how to support that work through new trade agreements, enforcing trade agreements, and resolving trade barriers in other countries.”

Feds Seeking Solutions to Port Problems

Posted on by Theresa Sweeney

Working with the U.S. Dairy Export Council (USDEC) and a group of agricultural organizations, NMPF is now seeing the administration and Congress seeking solutions to widespread concerns within dairy about ongoing ports congestion and unwarranted fees on exports.

President Biden issued an Executive Order, “Promoting Competition in the American Economy,” on July 15 that recognizes the need for executive branch action regarding consolidation and certain business practices in several industries, including the shipping sector. The order establishes the White House Competition Council to coordinate and advance efforts to limit overconcentration, monopolization, and unfair competition in or directly affecting the American economy. Relevant to the ocean shipping concerns, this Council will include the Secretaries of Transportation and Agriculture, as well as the chair of the Federal Maritime Commission (FMC).

The order also includes specific guidance to the FMC to “vigorously enforce the prohibition of unjust and unreasonable practices” regarding shipping fees. Additionally, it requests the FMC’s Shipper Advisory Committee to issue recommendations for improved enforcement of those and related rules, and for the FMC to consider issuing new regulations to improve export shipping conditions. It remains to be seen whether this process will be sufficient to prompt FMC to play a more proactive role in enforcing carriers’ compliance with the Shipping Act. The language regarding recommendations for improved enforcement and new regulations, however, is noteworthy and will help promote legislative options to address the challenge.

NMPF has hired a firm with expertise in maritime issues to closely monitor the implementation of this Executive Order and work with us in pressing for additional action from the administration and Congress.

On the Congressional front, NMPF, in coordination with USDEC, has provided input to proposed legislation from Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD) that extends stronger enforcement authority for the maritime commission to require ocean carriers to comply with guidelines on reasonable carrier practices. The draft legislation would force carriers to certify they are complying with commission guidelines on reasonable detention and demurrage fees, require the carriers to load product if it is at a port and does not exceed safe weight limits, and increases transparency into carrier action.

NMPF will continue to advocate for these important changes to the Shipping Act and continue to seek additional solutions to the ongoing crisis.

NMPF Presses for Delay on New EU Certification Requirements

Posted on by Theresa Sweeney

NMPF’s trade policy team, collaborating with the USDEC, continues to work with the Biden Administration and Congress to press for a delay in onerous European Union (EU) new certification requirements for dairy and composite products, as well as new flexibility from the EU on its overly prescriptive mandates for imports.

NMPF staff have met repeatedly with USDA, USTR and FDA officials to emphasize the issue’s urgency of the issue, outline key concerns and impacts of the EU certification scheme, and explore routes forward. U.S. Trade Representative Katherine Tai has engaged on the issue in June, and USDA Secretary Tom Vilsack has been active in pressing the EU for relief as well.

To complement this effort, NMPF and USDEC worked with leading members of Congress to support a Congressional letter sent on June 14 to the EU Ambassador to the U.S. Stavros Lambrinidis. The letter urged the EU to extend flexibility to these regulatory changes that are unduly prescriptive and ensure that U.S. dairy exports to the EU do not come to an abrupt stop. An additional Congressional spotlight was placed on the urgent need for resolution on June 24 when Sen. Thune (R-SD) emphasized the urgency of relief on the certification issue with Deputy USTR Nominee Jayme White during his confirmation hearing. White assured the Senate Finance Committee that he would prioritize resolution of the issue.

NMPF continues to insist that this and the wider set of challenges the U.S. dairy sector faces in shipping to the EU must be addressed more effectively.

“U.S. exporters continually have to chase new mandates by the European Union to retain our current access, even when there are no safety concerns with American dairy products,” said Jim Mulhern, NMPF President and CEO. “Too often dairy trade with the EU is a one-way street. The EU’s frequent approach to import requirements is to mandate prescriptive procedures that U.S. dairy exporters need to make time-consuming changes to conform just to retain access to that market for our safe products. The products we export today are entirely safe; new EU mandates that would seek to force the U.S. to change our regulatory system match theirs would do nothing to enhance that.”

Congress Hears from Dairy on Port Problems

Posted on by Theresa Sweeney

NMPF is seeking a wide range of solutions, including legislative ones, to problems at U.S. ports that continue to harm U.S. dairy exports.

NMPF and the U.S. Dairy Export Council (USDEC) are calling for legislation to amend the Shipping Act to strengthen the Federal Maritime Commission’s (FMC) authority to enforce reasonable ocean carrier guidelines to ensure more normalized trade opportunities for U.S. agricultural exports, working with the Agriculture Transportation Coalition and Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD).

Months of NMPF and USDEC efforts to raise congressional attention to port issues and exports also bore fruit when the House Subcommittee on Coast Guard and Maritime Transportation held an oversight hearing on June 15 highlighting the ongoing delays and increased costs for exports at U.S. ports. NMPF, USDEC and other agricultural organizations have actively encouraged the subcommittee to take this step to bring more focus to bear on the challenges U.S. exporters face.

Members of Congress at the hearing heard from U.S. agricultural organizations, FMC Commissioners Dan Maffei and Rebecca Dye, and port operations groups. NMPF President and CEO Jim Mulhern said in remarks issued the same day that “dairy producers throughout the country are feeling the consequences of port congestion as delays in loading U.S. dairy exports onto carriers creates a chilling effect on farm-gate milk prices.” NMPF and USDEC have particularly urged the commission to require ocean carriers to certify that they are complying with the agency’s guidelines.