NMPF Senior Vice President of Communications Alan Bjerga discusses how the support of the American Farm Bureau Federation is a powerful statement of farmer consensus for NMPF’s Federal Milk Marketing Order modernization plan currently before USDA. Bjerga also talks about the industry’s active discussions on fighting misinformation about dairy, in an interview with RFD-TV’s Christina Loren.
By Jim Mulhern, President and CEO, NMPF
The march to milk-pricing modernization reached another milestone this month, as the National Milk Producers Federation (NMPF) submitted to USDA our comprehensive proposal for Federal Milk Marketing Order (FMMO) reform.
After more than 150 meetings over nearly two years, a strong consensus has emerged among producers and our allies for changes that hold benefits for farmers of all sizes, in all regions, and for the broader industry that, together with producers, serves wholesome, nutritious products to consumers 24 hours a day, seven days a week.
A lot of work has gone into this effort. We have examined the program in great detail and came up with a plan that modernizes and updates Federal Milk Marketing Orders so they can work better for today’s dairy industry.
Some key highlights:
The first five of these are part of our proposal before USDA. We’re seeking the make-allowance review via the farm bill and the forward-pricing plan through separate federal rulemaking.
The components work together
It’s important to note how much the elements of our proposal rely on one another to succeed. Take the make-allowance, for example. It hasn’t had a meaningful update in 15 years. It’s a key priority of our hearing request, and it’s of intense interest to some. But it still needs to be addressed in a way that benefits all. Handling that issue in isolation would have the effect of reducing milk prices to farmers, a non-starter in a program that’s ultimately supported by a vote from producers.
That’s why we have the make allowance issue in our proposal, but one that’s included along with other necessary updates to milk pricing help economically offset our proposed make allowance adjustment, by bringing pricing formulas up-to-date and minimizing disruption to markets.
Modernizing the Federal Milk Marketing Order system has been due for some time; the pandemic experience, which exposed fault lines in the system, underscored just how necessary this effort has been and created the impetus for change. We’ve been deliberate in our approach because we wanted to make sure that we addressed the concern that Agriculture Secretary Vilsack stated well over a year ago when he said it was important to have consensus within the producer community.
We have achieved that consensus, and we believe we have sent USDA a strong signal — both in the thoroughness of our proposal and our depth of support among producers — that our comprehensive proposal is the proper basis for FMMO hearings and a path toward modernization.
And we’ll need to maintain that consensus throughout the process. As we move forward toward a hearing, we’ll continue listening to any concerns and providing any information that’s helpful for progress. Please don’t hesitate to write to the special address we’re using so that staff can respond to your questions. Thank you for your help and support.
This column originally appeared in Hoard’s Dairyman Intel on May 11, 2023.
NMPF President and CEO Jim Mulhern says the industry need a modernized Federal Milk Marketing Order that works better for dairy farmers, in an interview with the National Association of Farm Broadcasters. “We’re really excited that is a plan that will point a way toward a much brighter future for us dairy industry,” Mulhern said.
NMPF President and CEO Jim Mulhern explains the importance of modernization to the Federal Milk Marketing Order system and the benefits it hold from farmers to consumers in an interview with AgriTalk, a daily national conversation about the latest issues impacting agriculture and rural America. NMPF’s proposal to update the system, which governs milk pricing, is currently before USDA.
By William Loux, Vice President, Global Economic Affairs, NMPF and U.S. Dairy Export Council.
U.S. dairy exports excelled again in 2022, with record shipments further cementing its role as the key demand driver for U.S. milk.
For the third consecutive year, the U.S. dairy industry set a record for the volume of dairy products exported on a milk solids equivalent basis, with the current record now surpassing 2.4 million metric tons — the equivalent of over 40 billion pounds of raw milk, or 18% of the U.S. milk supply.
Perhaps even more impressive, for the fifth time in the last six years, U.S. exports grew by more than domestic consumption. Of that six-year window, 2019 was the only time in that span when exports grew by less than domestic sales. That’s the year the U.S. faced prohibitive retaliatory tariffs on dairy products destined for China. In addition, African Swine Fever was cratering China’s demand for whey products. At the same time, U.S. skim milk powder exporters were facing headwinds from EU intervention storage stocks that began hitting the market at below-market prices in 2019. All this noted, with 2019 being a particularly unique exception, the international market has been the driver of U.S. dairy demand growth for the past six years.
Success can’t be taken for granted
European milk production came on strong at the tail end of 2022 as favorable weather and margins boosted output. Conversely, demand within the European Union bloc has reportedly weakened as consumers feel the squeeze on their wallets, which is causing European wholesale prices to dip. With more supply, weaker internal demand, and low prices, we can expect significantly more competition from Europe in the international market than we did in 2022 when their exports dropped 10% during the first 11 months of the year.
Additionally, the international demand picture remains uncertain. Despite the clear success of U.S. dairy, the world’s collective dairy trade actually dropped 4% in 2022 — primarily on account of China. The world’s largest dairy product-importing nation contracted dairy imports by 21% as the country drew down inventories built in 2021, witnessed a surge in domestic milk supplies, and instituted movement restrictions, all of which damaged dairy consumption and imports.
China’s return to the market in 2023 remains uncertain. The lockdowns have been lifted, but milk production in the country is still growing, and inventories of milk powder reportedly remain heavy. Optimistically, consumption in the country will rebound and stockpiles will be reduced, setting the stage for China’s return as a global buyer in the middle part of the year. But until they do, New Zealand, which exported over 40% of its production to China at its peak, will have plenty of products available for customers elsewhere, meaning increased competition with the United States.
Outside of China, the demand picture will likely be mixed depending on local conditions, but broadly, slower economic growth and inflation are expected to challenge lower-income consumers and push buyers to look for bargains.
Overall, I am forecasting international demand in 2023 to return to growth, but not at a spectacular rate, and with more suppliers competing for business.
Given the expected headwinds this year, industry investment in international markets will be critical to success. To set another record in 2023, the U.S. must continue the work being done to build demand for U.S. dairy products overseas and expand market access in key markets, all while maintaining reliability with international customers by being engaged and responsive.
This column originally appeared in Hoard’s Dairyman Intel on Feb. 21, 2023.
As the year comes to a close, the National Milk Producers Federation is applauding two recent measures that support the dairy industry. NMPF Senior Vice President of Communications Alan Bjerga spoke with RFD-TV’s own Janet Adkison about how the Growing Climate Solutions Act and Sustains Act benefit dairy farmers, and what USTR’s announcement of a new request for dispute settlement consultations with Canada means for U.S. dairy.
https://www.rfdtv.com/two-recent-measures-from-congress-and-ustr-are-giving-a-boost-to-dairy-farmers
The National Dairy Leadership Scholarship Program supports dairy research — and the industry as a whole — by assisting students who do cutting-edge scholarship, and then stay within the sector, said Nicole Ayache, National Milk Producers Federation Vice President, Environmental Stewardship and Sustainability, in an interview with the National Association of Farm Broadcasters. “We’re really trying to support those individuals and their career. We want them to stay within dairy and contribute to our community,” she said. More information on the scholarships and how to donate to them is here.
The National Milk Producers Federation (NMPF) today commended Congress for including the Growing Climate Solutions Act and the SUSTAINS Act in its final fiscal year 2023 budget package. These measures will help dairy farmers seek additional sustainability opportunities as they work to fulfill the dairy sector’s voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050.
“Environmental markets and conservation programs have the potential to meaningfully assist dairy producers as they work to meet their 2050 environmental stewardship goals,” said NMPF president and CEO Jim Mulhern. “The Growing Climate Solutions Act and the SUSTAINS Act will strengthen these important tools.”
The Growing Climate Solutions Act, authored by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, and Senator Mike Braun, R-IN, passed the Senate last June on a bipartisan vote of 92-8. The legislation would enable USDA to register technical service providers that help farmers implement stewardship practices that can generate credits on environmental markets. In turn, producers will be better positioned to participate in these important markets. Reps. Abigail Spanberger, D-VA, and Don Bacon, R-NE, have introduced companion legislation in the House.
The SUSTAINS Act, authored by House Agriculture Committee Chairman-elect Glenn ‘GT’ Thompson, R-PA, passed the House Agriculture Committee in May on a bipartisan voice vote. The measure would allow private sector funds to supplement existing funding for farm bill conservation programs, which are continuously oversubscribed. The bill is an innovative approach to boosting funding for USDA conservation programs, which provide important technical assistance to dairy farmers for a variety of stewardship practices.
In addition to the sponsors of both bills, committee leaders Rep. David Scott, D-GA, and Sen. John Boozman, R-AR, also played important roles in finalizing the bipartisan package.
“We commend the leaders of the Agriculture Committees – Senators Debbie Stabenow and John Boozman and Reps. David Scott and GT Thompson – for working together to fashion this bipartisan agreement on agricultural climate legislation,” Mulhern said. “We look forward to working with them and their colleagues to build on this progress in the new year.”
In a letter to lawmakers, the National Milk Producers Federation urged support for domestic infant formula production as the production shortfalls that stripped store shelves of necessary infant formula have eased. Given the improving situation, tariff waivers that could discourage the production of a safe, secure domestic infant formula supply should be allowed to expire at end of this year as scheduled, NMPF said in the letter to the chairmen and ranking members of the Senate Finance Committee and House Ways and Means Committee.
“Given that the temporary production shortfall that gripped American families in need of formula earlier this year has abated, we urge Congress to ensure that the unique, unilateral tariff benefits granted to our trading partners under the Formula Act and the Bulk Infant Formula to Retail Shelves Act end as scheduled at the close of this year,” said NMPF Chairman and CEO Jim Mulhern in the letter, dated Nov. 17 . “We respectfully request your opposition to any effort to extend these preferential tariff benefits beyond the end of this year.”
A strong, diversely sourced domestic infant formula production industry ensures the highest quality, safest products while supporting rural jobs and domestic producers.
