Tag: trade

Pushing for Lower Tariffs Worldwide

Posted on by Alan Bjerga

Jaime Castaneda HeadshotBy Jaime Castaneda, Executive Vice President, Policy Development & Strategy, National Milk Producers Federation

Exports are critical to America’s dairy farmers and processors. Last year, the American dairy industry exported $8.1 billion in dairy products, roughly 17% of total U.S. milk production. That’s the second-best year on record, falling just short of 2022.

As global demand for high-quality and sustainably-produced dairy products will grow, the U.S. dairy industry must keep exports expanding to thrive today and over the long term. To help encourage that, and in the absence of efforts by the U.S. government to secure new market openings, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) have taken the initiative to drive forward projects to pursue Most-Favored Nation (MFN) tariff reductions in multiple key export markets.

U.S. dairy’s quarter-century of export expansion hasn’t been by chance. The strong commitment from U.S. dairy producers and manufacturers to investing in painstakingly growing international sales, coupled with multiple trade agreements that opened the door for that growth to occur, are key drivers of the trend. Unfortunately, in recent years, anti-trade rhetoric has gained momentum from politicians on both sides of the aisle. Meanwhile, major competitors — namely in Europe, Australia, and New Zealand — have successfully negotiated new market access, advantaging their domestic producers through lower tariff rates and favorable trading conditions. The result is that U.S. producers are increasingly at a disadvantage in several key markets, including China and most countries in Southeast Asia.

MFN tariffs are tariff rates that one country applies to imports from all trading partners that are members of the World Trade Organization. Importantly, MFN tariffs do not apply to products that benefit from even lower rates due to preferential trade agreements, such as a free trade agreement or customs union.

Not content to yield key markets to trade competitors, NMPF and USDEC launched a formal initiative in 2014 to lower duties on U.S. dairy exports in China. Following years of engagement, that resulted in a tariff cut on U.S. cheese exports. A few years later in 2019, NMPF and USDEC’s efforts scored another breakthrough by securing tariff reductions on a variety of exported dairy products into Vietnam.

Halfway around the globe, NMPF and USDEC tallied a small victory in March by successfully petitioning the United Kingdom government to eliminate its 6% tariff on fat-filled milk powder for at least two years.

NMPF and USDEC are continuing to pursue MFN tariff cuts in other key markets around the globe as well, with an emphasis on the growing Asian region, even as government initiative is lacking.

For example, the Philippines is a sizable dairy importer, using those inputs in the Philippine food processing and food service sectors. NMPF and USDEC have impressed upon the Philippine government the advantages of diversifying its dairy supply chains further and are petitioning for MFN tariff reductions for a variety of products, including cheese, lactose, and milk powder.

Although these initiatives by NMPF and USDEC cannot fully replace government negotiation of new trade agreements, efforts to drive down tariffs in these countries represent just a few examples of the markets that NMPF and USDEC are prioritizing as they continue to fight for fair opportunities for U.S. dairy producers and companies to compete in the global market.

This column originally appeared in Hoard’s Dairyman Intel on April 4, 2024.

NMPF’s Castaneda Discusses WTO, India, CWT

Posted on by Alan Bjerga

NMPF Executive Vice President Jaime Castaneda discusses efforts to expand dairy market access at recent World Trade Organization meetings in Abu Dhabi in an interview with the Red River Radio Network. Castaneda also discusses trade relations with India and the importance of the NMPF-led Cooperatives Working Together program for the future of U.S. dairy exports.

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.

USMCA Dispute Panel Limits Canadian Market Access

Posted on by Alan Bjerga

Today’s ruling by a U.S-Mexico-Canada Agreement (USMCA) dispute panel allowing Canada to restrict the dairy access that the United States negotiated for in the USMCA pact weakens the agreement’s value to the US dairy industry, according to the National Milk Producers Federation and the U.S. Dairy Export Council.

An earlier panel ruled in January 2022 that Canada had improperly restricted access to its market for U.S. dairy products. In response, Canada made insufficient changes to its dairy tariff rate quota (TRQ) system, resulting in an outcome that still fell far short of the market access the U.S. expected to receive under USMCA. To address that shortcoming, the U.S. brought a second case to challenge the changes that Canada instituted. Today the panel announced that Canada was not obligated to make further changes.

“It is profoundly disappointing that the dispute settlement panel has ruled in favor of obstruction of trade rather than trade facilitation,” said Jim Mulhern, president and CEO of NMPF. “Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector. We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated.”

Since the U.S. Trade Representative initially launched the first dispute settlement case against Canada in 2021, USDEC and NMPF have worked with USTR, USDA, and Congress to try to secure full use and value of USMCA’s dairy TRQs for American dairy producers and processors.

“By allowing Canada to ignore its USMCA obligations, this ruling has unfortunately set a dangerous and damaging precedent,” said Krysta Harden, president and CEO of USDEC. “We do however want to express our appreciation for allies in Congress and the Administration for their efforts and commitment to fighting for U.S. dairy. This is unfortunately not the only shortcoming in Canada’s compliance with its international commitments. We are committed to working with USTR and USDA to evaluate efforts to address Canada’s continued harmful actions that depress dairy imports while simultaneously evading USMCA’s dairy export disciplines.”

When first implemented in 2020, USMCA established 14 different TRQs, which allow a predetermined quantity of imports at a specified low tariff rate. The TRQ system that Canada implemented awarded the vast majority of TRQ volumes to Canadian processors and granted very limited access to TRQs to distributors – resulting in limited market access for U.S. exporters. Minor modifications to that system made in 2022 have continued that imbalanced approach.

NMPF’s Doud Discusses Dairy’s Future

Posted on by Alan Bjerga

Incoming NMPF President & CEO Gregg Doud explains NMPF’s role in Washington policy formulation and dairy farmer priorities, including a new farm bill, Federal Milk Marketing Order modernization, integrity in plant-based labeling and dietary guidelines that maximize the benefits of dairy, in an interview with RFD-TV. He also emphasized the importance of international trade and global issues to U.S. dairy’s future. “We need to look five, 10 years ahead and see what this industry needs,” he said.

Dairy is a staple in spite of inflation

Posted on by Alan Bjerga

By Allison Wilton, Coordinator, Economic Policy and Global Analysis, NMPF

U.S. dairy consumption has been steadily rising for years, reaching more than 11.5 million metric tons (milk solids equivalent) in 2022. This is up 15% from ten years ago. As one of the highest dairy consuming countries in the world, U.S. per capita consumption of cheese, yogurt, and butter has grown steadily for years. Recent food trends are bringing fun and innovative twists on common dairy products; as examples, butter boards went viral last year as a new “charcuterie” option, and health influencers are raving about the benefits of adding cottage cheese into recipes for higher protein and healthy fats. Ultimately, dairy demand remains resilient even when facing significant headwinds.Dairy’s resiliency is true on a global basis, too. On average, 13% of the global consumer’s protein came from dairy in 2022, a rise compared to 2021 and a significant leap over the past decade. In fact, global dairy protein consumption has grown by nearly 25% over the last decade.

 

Still, despite that resiliency, inflation and economic uncertainty have affected consumers and the dairy industry.

Inflation had mixed effects

In 2022, consumers started to really take notice of rising grocery and food costs. Prices for goods across all categories, not just dairy, were starting to climb more than usual due to several factors, including the ongoing COVID-19 pandemic and international supply chain disruptions. Inflation reached a peak in summer of 2022, and though it has eased slightly since, prices are still significantly higher compared to three years ago.

 

Source: NMPF-USDEC, IRI, NPD

Grocery and food items were some of the most prevalent and hardest hit areas by inflation, and dairy products were not immune. The price of dairy in food and beverage stores rose by more than 15% in 2022 compared to 2021, the highest jump in prices of all categories. The value of dairy sales grew significantly in 2022. Even so, and although this can partially be attributed to the higher prices, the growth in dairy sales (up 14.7%) outpaced that of non-dairy categories (8.3% greater).

Additionally, though all categories’ volume fell, the volume of dairy products sold fell less than that of non-dairy products. In other words: even though dairy had higher inflation rates, the slide in volume sold was less than the dip of other food and beverage categories. Shoppers were continuing to put dairy products in their cart despite the higher prices. That’s a testament to the dairy’s place as a dietary staple for many around the country and the world.

Dairy demand persists

Consumers prefer dairy products over plant-based alternatives: sales of cheese, frozen products, and other dairy goods dwarf plant-based imitations in stores. As even more alternatives fill shelves, dairy doesn’t lose shelf space. Rather, per capita consumption in several areas have grown, including cheese (up 17% from 2020), yogurt (up 5%), and butter (up 21%). The dairy aisle remains of top value when compared to other aisles within major food and beverage stores and is one of the fastest growing aisles in terms of sales dollars, topping $75 billion in 2022.

Cheese is expected to grow only more popular as time goes on, as is butter and yogurt. The U.S. dairy industry is poised to meet this demand as the industry advances in the coming years. As inflation wanes, consumers may return to trying higher value dairy products, of which there is no shortage. U.S. dairy will continue to be a major part of consumers’ diets and shopping carts.

This column originally appeared in Hoard’s Dairyman Intel on Nov. 9, 2023.

USDEC’s Harden discusses USDA Support for Trade

Posted on by Alan Bjerga

Krysta Harden, president and CEO of the U.S. Dairy Export Council, discusses the value of USDA support for U.S. agricultural exports in an interview with RFD-TV from the World Food Prize in Des Moines, IA. The department said Oct. 24 it plans to devote $2.3 billion from the Commodity Credit Corporation to promoting better market opportunities for U.S. agricultural producers and expanding food aid to support communities in need around the world, a move advocated for by NMPF and USDEC.

NMPF’s Jonker Welcomes the World to U.S. Dairy

Posted on by Alan Bjerga

 

NMPF Chief Science Officer Jamie Jonker discusses the International Dairy Federation World Dairy Summit taking place in Chicago this week in an interview with RFD-TV. The summit, which is being hosted by the United States for the first time since 1994, brings together dairy experts from around the world and is proving to be a great showcase for U.S. dairy excellence.

The EU Wants to Tell Its Partners How to Farm

Posted on by Alan Bjerga

Shawna Morris HeadshotBy Shawna Morris, Executive Vice President, Trade Policy & Global Affairs, National Milk Producers Federation

In business, a top customer is a very important relationship, one that requires careful tending and cultivation to maintain. The best business relationships are two-way streets, with each party tending to the other’s needs with care. These are simple principles for successful commerce — but they also seem to have been forgotten in the European Union (EU) when it comes to dairy.

The U.S. is one of the EU’s top food and agricultural export markets; in dairy alone, it shipped an eye-popping $2.7 billion of cheese, butter, food preparations, and other dairy products to America. This year it’s on track to top that record, with sales through July up 12%. The U.S. is a major and lucrative market for the EU’s dairy industry and other food sectors.

With all that on the line, it would be reasonable to expect the EU to prioritize U.S. trade concerns. Instead, the EU is increasingly seeking to use trade policy to dictate to the world — including American dairy farmers — how to farm and, while serving its own self-interest, how to properly produce products.

National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) staff met last week with the EU’s Health and Food Safety Agency on one of the EU’s latest policies advancing that goal. Article 118 is a rule slated to impose new restrictions on which veterinary medicines EU trading partners can use for any products destined for the EU. Given the interconnected nature of milk flows in the U.S., however, requirements for EU shipments can impact a much wider swath of U.S. production to avoid disrupting supply chain flexibilities.

In that meeting, NMPF and USDEC, together with the other U.S. agricultural organizations, strongly objected to the EU imposing its domestic farm process steps on American farmers. We also pointed out the importance of a two-way relationship: The EU relies on the United States continuing to reliably import billions of dollars of EU products that are produced in keeping with EU farm process requirements, not American ones.

NMPF staff, working closely with our partners at USDEC, has engaged with the U.S. government, other agricultural sectors, and the EU itself for the past few years in trying to shape the implementation of this regulation. Thanks to that extensive investment in staving off the worst edges of this ill-conceived EU policy, U.S. dairy exports aren’t expected to be affected by the initial list of targeted veterinary medicines. But what’s true today may not be tomorrow. NMPF continues to work on this issue to guard against any future inclusion of more broadly used safe veterinary medicines down the road.

Article 118 is just one of many policies the EU is pushing to foist its farming preferences onto the world’s farmers. Issuing specific animal welfare standards for trading partners is also under development, even though U.S. dairy farmers know how to farm safely and hold high standards while exporting to more than 100 markets worldwide. European bureaucracy does nothing to elevate the quality of U.S. dairy products, but it does risk exacerbating trade tensions.

Because of this growing EU tendency to attempt to serve as a global regulator, NMPF is encouraging the U.S. government to look more strategically at the U.S.-EU agricultural trade relationship. Every customer has its breaking point, and the U.S. should make clear to the EU that we are no different. The trans-Atlantic partnership between U.S. and EU interests is one of the world’s most important. But all good relationships are based on care and respect. We in dairy are urging the EU to tend its trade relationship with the U.S. more carefully, because if they don’t, the consequences will be pleasant for no one.

This column originally appeared in Hoard’s Dairyman Intel on October 5, 2023.

The SAVE Act Stands Up for American Dairy

Posted on by Alan Bjerga

Tony Rice Headshot

By Tony Rice, Trade Policy Manager, NMPF

Parmesan. Feta. These are among the common cheese names that have been around for generations — and until the past 20 years, were uncontested in their use by U.S. dairy producers selling high-quality, commonly understood varieties in America and the world.

But an aggressive European Union (EU) campaign to use free trade agreement negotiations to confiscate common names through the misuse of geographical indication (GI) rules has seen American producers of cheeses like “parmesan” and “feta” forced in the past decade to withdraw from certain markets and have their products taken from store shelves.

A solution to this problem is making its way through Congress.

The bipartisan Safeguarding American Value-Added Exports (SAVE) Act was introduced in May. The legislation would spur greater action from U.S. administrations to prioritize the protection of common names. The SAVE Act would direct the secretary of agriculture to determine a list of common names frequently subject to GI restrictions around the world and deem restrictions on them by our trading partners an unfair trade practice. Currently, no such list exists, which gives the European Union and other foreign governments a free hand in claiming common names as GIs, despite them long being a part of the public domain.

The bill also directs the U.S. government to proactively negotiate the defense of generic name rights with foreign trade partners through all available avenues. It’s co-sponsored in the Senate by Senators John Thune (R-SD), Tammy Baldwin (D-WI), Roger Marshall (R-KS), and Tina Smith (D-MN). In the House, sponsors include Representatives Dusty Johnson (R-SD), Jim Costa (D-CA), Michelle Fischbach (R-MN), and Jimmy Panetta (D-CA). The congressional leads are likely to try to incorporate the SAVE Act into the upcoming farm bill text.

This effort wouldn’t be taking place without the hard work and advocacy of the dairy community. The Consortium for Common Food Names, in partnership with National Milk Producers Federation and U.S. Dairy Export Council, has been at the forefront of opposing bad-faith GI recognitions that restrict generic terms, including winning a landmark court case in March that preserves free use of “gruyere” in the United States. As important as the defense strategy has been, growing aggressiveness by the EU on GIs and persistent lack of action by previous U.S. administrations has made the Capitol Hill effort necessary.

The benefits of tackling illegitimate GIs would extend up and down the dairy supply chain. Farmers’ and manufacturers’ international markets access would be preserved, consumers would have more choices at the grocery store, and retailers would benefit from the competition of more options and greater sales. Without adequate protection for generic terms, lost export opportunities due to GI misuse and rebranding to alter the name of a product translate to lower demand for fluid milk to make those products.

The SAVE Act is not a silver bullet. The EU will continue to push for illegitimate GIs in markets around the world. But after years of losing ground as American dairy farmers and producers had their rights violated and market opportunities lost, Congress has demonstrated that they are ready to take on this fight. NMPF has a call to action here for dairy advocates who wish to contact their lawmakers to support this important legislation. America’s dairy industry deserves nothing less than a fair playing field to compete in, and the SAVE Act is a key step to securing international market access for U.S. dairy farmers for generations to come.

This column originally appeared in Hoard’s Dairyman Intel on Aug. 3, 2023.