Tag: dairy supply chain

NMPF Leads Charge in Dynamic Trade Environment

Posted on by Rachel Ravencraft
  • Advocated for dairy priorities in administration’s Reciprocal Trade Deals
  • Secured the reintroduction and advancement of key common names bill
  • Spurred federal investigation into global nonfat milk solids marketplace
  • Expanded network of allied organizations
  • Advanced key supply chain initiatives

NMPF has actively navigated the new administration’s proactive and unconventional trade approach to forge better global prospects for U.S. dairy exporters.

As the Trump administration’s trade negotiations unfold, NMPF Executive Vice Presidents Jaime Castaneda and Shawna Morris are serving as confidential private sector advisers to the U.S. Trade Representative and U.S. Department of Agriculture, offering guidance to ensure that U.S. dairy interests are represented and pursued across the globe.

To date, the United States announced trade frameworks with key dairy trading partners including South Korea, the European Union, the United Kingdom, Japan, Vietnam, the Philippines, and Indonesia. These frameworks vary in scope and detail and are designed to set the stage for more detailed negotiations to follow soon.

The frameworks with Indonesia, Vietnam and the Philippines are particularly promising for dairy exporters. It appears likely that all three countries will zero out tariffs on U.S. dairy exports, leveling the playing field with New Zealand and Australia, and in some cases the European Union too. Indonesia’s framework also addresses longstanding barriers that have made it difficult for American companies to compete in the market. This includes dairy facility registration approval improvements and steps that would help protect common name rights in Indonesia for products like “parmesan” and “feta.” Details on all announced trade details are forthcoming.

In addition to providing guidance as cleared advisors, NMPF worked hard in the months leading up to the negotiations to lay the groundwork for success. As the administration began to fill out its cabinet and agency positions, NMPF and the U.S. Dairy Export Council (USDEC) shared trade priorities  with incoming USTR and USDA officials to improve the global competitive landscape for U.S. dairy exporters. NMPF President and CEO Gregg Doud testified before the House Ways & Means Trade Subcommittee, where he called for the U.S. government to pursue greater market access for U.S. products and enforce existing trade agreements.

Throughout its meetings and engagements with the Trump Administration, NMPF has stressed the need to preserve trade flows, while encouraging a tailored approach to tariffs that ensure fairness for U.S. farmers and workers.

NMPF remained active in multiple trade-related areas that went beyond negotiations, for example supporting the Apr. 1 reintroduction of the Safeguarding American Food and Export Trade Yields (SAFETY) Act and continuing additional efforts to proactively protect common food names for American cheesemakers. Originally introduced as the Safeguarding American Value-Added Exports (SAVE) Act in 2023, the SAFETY Act would direct the U.S. Department of Agriculture and U.S. Trade Representative to prioritize the protection of common names like “parmesan” in international trade negotiations.

As Congress and the administration prepare for next year’s critical U.S.-Mexico-Canada Agreement (USMCA) review process, NMPF is engaging with and supporting the U.S. Trade Representative’s office and other key stakeholders to ensure that they have the information needed to strengthen the agreement for U.S. dairy producers and exporters.

A particular issue that needs addressing is Canada’s dairy policies that incentivize dairy protein to be produced, then offloaded globally at artificially low prices — including by shifting tariff codes to evade USMCA export surcharges.

NMPF responded to this issue by pressuring the administration to address Canada’s persistent flouting of USMCA commitments, which led to a U.S. International Trade Commission (USITC) investigation launched May 20 into the export competitiveness of nonfat milk solids industries in the United States and other major suppliers. NMPF submitted written comments as part of that investigation outlining underhanded practices by Canada and other global suppliers that harm U.S. producers. NMPF’s Jaime Castaneda and Will Loux further elaborated on those points at a July 28 USITC hearing in the case.

NMPF has expanded its network of international allies, strengthening its ability to advocate for U.S. dairy worldwide. During a March 17-20 trip to Central America, Castaneda closed a memorandum of understanding (MOU) between NMPF, USDEC, and the Guatemalan Dairy Development Association (ASODEL). The agreement strengthens ties between the U.S. and Guatemalan dairy industries as they advocate for free and fair-trade policies and promote greater dairy consumption.

NMPF and USDEC signed an MOU May 1 with KADIN, the Indonesian Chamber of Commerce, strengthening ties between the U.S. and Indonesian dairy industries. This agreement builds on a flourishing partnership between the two countries, launched by the establishment of the U.S.-Indonesia Dairy Partnership Program. This collaboration is focused on creating and distributing technical educational materials designed to empower small-scale dairy producers in Indonesia to improve the quality and quantity of their milk production while touting the value of complementary U.S. dairy imports to meet the full needs of Indonesia’s expanding school milk program.

To ensure that U.S. dairy exporters can depend on timely and reliable shipping and rail transportation, NMPF is prioritizing supply chain improvements.

USTR on Feb. 21 proposed to impose fees on Chinese-built and -operated cargo ships as part of a larger investigation into Chinese maritime dominance. While this action was well-intentioned, NMPF and USDEC filed comments on March 24 to warn the agency that additional service fees would significantly increase costs for American exporters and diminish shipping options for U.S. products — both of which could lead to loss of global market access. USTR heard the industry pushback and modified the rule on June 12 rolled back the severity of the proposed fees. NMPF continues to urge the agency to re-evaluate the remaining fees to ensure U.S. dairy exporters do not face additional costs to export.

New Maritime Fees Would Undermine U.S. Dairy, NMPF Argues

Posted on by Theresa Sweeney

NMPF and USDEC filed joint comments on March 24 to USTR urging the administration to reconsider proposed fees on Chinese-owned or built vessels under the agency’s Section 301 investigation into China’s maritime and shipbuilding practices. NMPF warned that fees ranging up to $1.5 million per port call would significantly increase shipping costs, undermining U.S. dairy export competitiveness abroad, even as it supported efforts to bolster the U.S. commercial fleet.

Nearly 40% of U.S. dairy exports rely on ocean freight. Higher fees risk lost market access, supply chain disruptions and economic harm to dairy farmers and exporters, NMPF and USDEC argued in their comments. NMPF joined two March 24 letters—one from a broad industry coalition and a second from agricultural organizations— call for alternative approaches that support U.S. strategic goals without disproportionately harming American exporters.

NMPF Highlights Supply Chain Security

Posted on by Theresa Sweeney

NMPF Trade Policy Director Tony Rice spoke to the challenges affecting the U.S. dairy industry due to shipping container break-ins at a Dec. 18 U.S. Chamber of Commerce event on supply chain security.

Organized crime groups in 2024 increasingly broke into intermodal containers on railroads in search of high-value items, causing collateral damage to dairy and other agricultural exporters.

Rice during a panel discussion detailed the financial losses that dairy exporters and producers incur when they must return and dispose of product that has been broken into, without the ability to file insurance claims. These break-ins also create significant food safety issues and could damage a producer’s reputation as a reliable supplier.

Congressmen Brad Schneider, D-IL, and David Valadao, R-CA, also spoke at the conference to highlight their co-sponsored bill, the Safeguarding Our Supply Chains Act. Endorsed by NMPF and the U.S. Dairy Export Council, the bill would authorize $20 million to create a crime coordination center within Homeland Security Investigations, as well as a task force comprised of relevant agencies.

NMPF Works to Mitigate Port Strike Disruptions

Posted on by Theresa Sweeney

A port workers strike that threatened millions in U.S. dairy exports was successfully limited Oct. 4, after NMPF and the U.S. Dairy Export Council (USDEC) called on the Biden Administration to intervene in the port workers strike.

NMPF and USDEC in an Oct. 1 joint statement and Oct. 2 industry letter co-signed by more than 270  agricultural, manufacturing, retail and additional supply chain stakeholders helped apply pressure on the negotiating parties, who agreed to resume work on Oct. 4.

More than $4.5 million in U.S. dairy exports moved through east and gulf coast ports in 2023 and a work stoppage forced exporters to cancel shipments and undertake costly reroutes. NMPF and USDEC relayed information between exporters and USDA to highlight and address storage and rerouting challenges as a result of the strike.

The International Longshoremen’s Association reached a tentative agreement with the United States Maritime Alliance to suspend the strike and resume normal operations on Oct. 3. NMPF and USDEC welcomed the end to the strike and pressed both parties to come to a long-term agreement before the current contract extension expires on Jan. 15, 2025.

Trust is a Dairy Superpower

Posted on by Rachel Ravencraft

What makes dairy so valued that milk alone is in 94 percent of U.S. refrigerators? Nutrition is one factor. So is affordability. But perhaps the greatest value is one that data supports: People trust it.

The dairy checkoff’s latest consumer perception tracker, conducted by Kantar Group, shows just how much confidence dairy has from consumers – and it’s a great contrast to the loud braying of the anti-dairy fringe, which takes up more brain space among the sane and grounded than should. Rated on a 1-7 scale of trust, with 1 being none and 7 being total, 58 percent of consumers rated dairy at 5 or above, according to the nationally representative sample of consumers aged 13-65.

That same survey, conducted last November and December, showed 35 percent either strongly or completely trusting dairy, shown by ratings of 6 and 7. That high trust level held across generations. Baby boomers led at 38 percent of strong or complete trust; Generation X, a cohort famed for trusting no one, was lowest at 33 percent. And the future looks stable and bright. About 34 percent of teenagers strongly or completely trusted dairy, with young adults at 35 percent and Millennials at 36. And again, these were the highest ratings of trust – including less-fervent support, clear majorities spanned generations.

Dairy also did well when compared with other foods and industries. Dairy’s 58 percent trust level compares well with beef (53), almonds (51), tech (53, sorry Zuckerberg and Musk) and finance (43 – with apologies to Wall Street).

To sum up: In an increasingly fractured climate plagued by misinformation, dairy continues to attract broad-based support across wide swathes of society. In a superpower nation where trust is declining, dairy has its own superpower – trust from consumers that remains strong.

Pretty heavy stuff, when you think about it. But dairy can carry the load, with unparalleled nutrition, uncommon consumer reach and high levels of consumer trust. It’s a refreshing situation, appropriate for refreshing products.

 

NMPF Works to Fortify the Export Supply Chain

Posted on by Theresa Sweeney

NMPF is offering its support and assistance for a pair of supply chain bills offered in June that address shipping container break-ins that are damaging dairy shipments.

Organized crime groups are indiscriminately breaking into intermodal containers traveling on rail from the Midwest to West Coast ports searching for high-value products, with dairy shipments frequently suffering collateral damage. The break-ins have created significant food safety and quality concerns, as well as financial costs for shippers who have no recourse to insurance claims.

Working with a coalition of industry stakeholders, NMPF helped secure $2 million within the FY25 House Homeland Security Appropriations bill dedicated to tackling the break-ins. NMPF also coordinated with and supported the June 25 introduction of the Safeguarding our Supply Chains Act. Led by Representative David Valadao, R-CA, and Brad Schneider, D-IL, the bill would authorize $100 million for fiscal years 2025-2029 to create a crime coordination center within Homeland Security Investigations and an interagency taskforce. The division would serve as a central command for shippers to report break-ins, providing direction to the agency on hot spots to target policing efforts.

NMPF’s Bjerga on Trade, FMMO

Posted on by Alan Bjerga

NMPF Executive Vice President Alan Bjerga speaks with RFD-TV about how all of agriculture needs to fight for the integrity of trade agreements in the wake of a USMCA dispute panel decision that failed to protect U.S. access to Canada’s market. The President’s Export Council, with member co-op Land O’Lakes representing farmers, discussed the importance of market access in a White House meeting on Wednesday. Bjerga also talked about the resumption of the USDA Federal Milk Marketing Order hearing in Indiana this week, and how repeated delays aren’t helpful for milk producers.

Overcoming challenges is what we do

Posted on by Alan Bjerga

By Randy Mooney, Chairman, NMPF Board of Directors

We’ve had a lot of achievements this year, but it’s also been a challenging time.

A year ago, costs on the farm were extremely high, but we had prices that would cover that. This year, costs are still high, but prices are down. That’s a lot of stress on the farm. And we’re also dealing with problems that we’ve dealt with for years.

There are labor problems; you just can’t find anybody to work. Supply chain disruptions are closer to the farm this year. It’s milk trucks getting milk off the farm; it’s feed trucks bringing feed into the farm. It’s getting simple parts that we took for granted we could get anytime we wanted to. There are geopolitical issues and extreme weather events.

We have challenges all the time, but it just seems like we continue to have more. It seems like we’re in the eye of a storm. But as farmers, we always anticipate a moment before the dawn, before things turn, before things get good again.

One of the things I’ve learned is that a lot of the world is envious of what we have.

They’re envious because we have the Farmers Assuring Responsible Management (FARM) Program, a self-governing program. We have a government that recognizes what we’re doing with sustainability — it’s not being mandated down from the top.

We’re taking care of our own. Today, we produce more milk using fewer and fewer natural resources. We’re revitalizing rural communities. For every dollar generated in dairy farming, it turns over three to seven times in local communities, generating $750 billion in the United States. That‘s pretty impressive.

We’re nourishing families around the world through milk’s unbeatable nutritional value. I’ve dairy farmed for a long time, through good times and bad times, but there’s never been a time that I haven’t laid my head down on my pillow at night and been proud of what I accomplished on my farm. We’re putting the most nourishing, most nutritious product known to man in that milk tank. And when that truck leaves, I know I’ve done something good.

Our ability to evolve how we work and adapt our resiliency is becoming more and more important. This year, we came together as an industry to unite around issues that helped build that resiliency. NMPF worked with member co-ops, farm bureaus, and state dairy organizations to come to consensus on the most substantial issues. Even going back to 2021, when you talk about Federal Milk Marketing Order modernization, we’ve worked hard to get these things done. Nobody knows what the outcome’s going to be, but you telling your story has made a difference.

Beyond that, we’re going to get a farm bill passed — we’re going have an extension. We’ve been working to implement the next version of FARM, FARM 5.0, that goes into effect in July. We also will work on promoting dairy’s sustainable nutrition. Dairy offers the most complete nutritional package available, and what’s amazing is that as we produce more milk, we’ll continue to use fewer natural resources. That’s the definition of sustainable nutrition.

For years, we’ve talked about sustainability in terms of environmental stewardship and how that translates into financial value for farms. Now, the financial values are there. You take solar panels, wind, methane digesters, and a lot of things happen on a farm that’s generating electricity to run your farms and to run your neighbor’s households. We’re there now. What we need is conservation funding in the farm bill through USDA grants through state and federal programs. There’s real money available to help us continue to do that, and we will.

No imitation food from a nut, a bean, or grain can hold a candle to dairy’s nutritional package. We all know that. That’s why it’s important to keep fighting the fight on plant-based alternative labeling. In the guidance that was issued earlier this year, the Food and Drug Administration (FDA) recognized and admitted that plant-based alternatives are nutritionally inferior to real dairy.

Dairy protein plays a critical role in feeding people around the world, and it can’t be replaced by alternatives, including plant-based. Consumers have the right to understand how they’re nourishing their families, and we’re going to continue to advocate for the Dairy PRIDE Act to try to get that passed in Congress.

We’re going to continue to fight for more flavored milk in schools and higher fat levels, especially for those children whose main source of nutrition is through the school milk program. Milk is essential to their diets, and we’re not going to give up that fight. We’re all part of an industry that’s doing remarkable things. We are winning.

This has been adapted from Chairman of the NMPF Board of Directors Randy Mooney’s speech at the National Milk Producers Federation annual meeting in Orlando, Fla., on Nov. 14, 2023. This column originally appeared in Hoard’s Dairyman Intel on Nov. 22, 2023.

NMPF Engages on New Federal Supply Chain Program

Posted on by Theresa Sweeney

NMPF and USDEC coordinated a Sept. 8 U.S. Department of Transportation briefing on its Freight Logistics Optimization Works (FLOW) program to a group of members that have been engaged in the organizations’ supply chain working group.

A novel approach to optimizing supply chain data, FLOW allows U.S. stakeholders including ocean carriers, ports, motor carriers, railroads, warehousers and others to exchange data and better measure cargo traffic demand versus equipment supply. FLOW incorporates elements of the now-defunct USDA Ocean Shipping Container Availability Report, which NMPF and USDEC have long advocated for resuming. The two organizations are also pressing the U.S. government for increased transparency into the export supply chain, including through expanding dairy exporter participation in FLOW.

NMPF Engages on Supply Chain Solutions

Posted on by Theresa Sweeney

As supply chains struggle to fully recover from the pandemic, NMPF continued to engage Congress and the administration on ways to improve ocean and freight shipping.

Representative John Garamendi, D-CA, introduced the Ocean Shipping Competition Enforcement Act on April 8. Supported by NMPF, the bill would allow the Federal Maritime Commission to block anti-competitive agreements among ocean common carriers and maritime terminal operators – an important step in leveling the playing field with dairy exporters.

Additionally, NMPF joined partner organizations in sending two letters from industry urging the U.S. government to address a pair of ocean shipping concerns.  NMPF joined leading agriculture and retail organizations March 24 in calling for the administration to help resolve the ongoing West Coast port labor negotiations. Ocean terminal operators and workers have made little progress on a new labor agreement since the last contract expired over ten months ago. U.S. dairy exporters need the two parties to reach an agreement so that West Coast ports can return to operating at full capacity, a message that NMPF continues to relay on Capitol Hill.

Separately, NMPF joined the Agriculture Transportation Coalition in sending a letter to Representatives Dusty Johnson and John Garamendi, asking the OSRA co-sponsors to direct the maritime commission to address fees being incurred at rail depots for factors outside of dairy exporters’ control. Although OSRA required a stop of unwarranted fees at ocean ports, railyards currently fall outside of the commission’s jurisdiction. NMPF and its allies are advocating for Reps. Johnson and Garamendi to formally clarify the authority of the maritime commission under the OSRA to regulate these charges and facilitate more efficient and fair ocean shipping.

Record Exports Drive U.S. Dairy Demand

Posted on by Theresa Sweeney

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.

NMPF Helps Keep Trains (and Boats) Running

Posted on by Theresa Sweeney

NMPF staff and allied organizations played critical roles in keeping transportation networks running in early December, as the prospect of a rail labor strike heightened concerns of an already strained supply chain completely derailing. To ensure that the rail service remained uninterrupted for dairy producers who rely on consistent rail movement both for sourcing feed and moving finished product, NMPF took member concerns to Capitol Hill.

Four rail labor unions voted in November to reject a tentative agreement arbitrated by the Biden Administration, authorizing a strike that could have begun as early as Dec. 9. To avoid a costly rail service shutdown, NMPF, the U.S. Dairy Export Council (USDEC) and allied groups pressed hard for congressional intervention via a series of letters and meetings. Congress passed legislation implementing the tentative agreement, with President Biden signing the law on Dec. 2 and averting a rail shutdown.

The rail efforts, while significant, were only one facet of NMPF’s recent supply chain efforts. NMPF and USDEC on Dec. 13 wrote to Federal Maritime Commission Secretary William Cody with feedback on the agency’s proposed rulemaking on detention and demurrage billing requirements for ocean-bound shipments.

The Ocean Shipping Reform Act of 2022, passed in June and championed by NMPF and USDEC, provided an important foundation in confronting abuses leveled by ocean carriers on dairy shippers. However, smart, balanced implementation is still needed to ensure that dairy exporters are fully protected against unfair fees, which cost significant resources to resolve.

In the letter to Secretary Cody, NMPF and USDEC recommended against allowing marine terminal operators to bill shippers directly, which could force shippers to resolve disputes with an unknown party, rather than with carriers – with whom they have an established relationship. NMPF also pushed for the FMC to require additional information on invoices, including how and by when a shipper would need to contest a charge, and to clarify the timeframes for when carriers could issue detention and demurrage charges.