Tag: trade

Dairy Defined Podcast: Mooney Speaks at Annual Meeting

Posted on by Alan Bjerga

 

(Note: NMPF’s Dairy Defined podcast explores today’s dairy farms and industry using high-quality data and podcast-style interviews to explain current dairy issues and dispel myths.)

ARLINGTON, Va. – U.S. dairy farmers have been through challenging times, but they’re ready to face the challenges of trade, the environment, climate and changing consumer tastes, said Randy Mooney, a Missouri dairy farmer and chairman of the National Milk Producers Federation. Mooney spoke this morning at the organization’s annual meeting, this in New Orleans.

“Dairy farmers play an important role in society. We help preserve communities,” he said. “Like all of you, I’m proud to be a dairy farmer, producing the most nutritious product in the world.”

To listen to the full podcast, click here. You can also find the Dairy Defined podcast on Spotify and SoundCloud. Broadcast outlets may use the MP3 file. Please attribute information to NMPF.

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 The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies. For more, visit www.nmpf.org.

NMPF Helps Shape Trade Strategy

Posted on by Theresa Sweeney

The Agricultural Technical Advisory Committees (ATAC) for trade are tasked with providing guidance and technical advice to the USTR and USDA on trade negotiations. NMPF is pleased to share the recent announcement that NMPF’s Jaime Castaneda has been reappointed to the ATAC for Animals and Animal Products, along with John Wilson of Dairy Farmers of America, an NMPF member cooperative.

Castaneda and Wilson will play a valuable role through their continued service on the ATAC and their expertise and first-hand knowledge of the dairy industry will help the USTR and USDA develop effective trade strategies and objectives.

CWT-Assisted Export Sales Contracts Top 9 Million Pounds of Dairy Products

Posted on by Theresa Sweeney

 CWT in June assisted member cooperatives in securing 51 contracts to sell 2.888 million pounds of American-type cheeses, 154,324 pounds of anhydrous milkfat, 257,941 pounds of butter, 5.407 million pounds of whole milk powder, and 566,588 pounds of cream cheese. The products will go to customers in Asia, Central America, the Middle East, Oceania and South America. The product will be shipped during the months of June through December 2019, to customers in 14 countries in five regions of the world.

These contracts bring the 2019 total of the CWT-assisted product sales contracts to 30.953 million pounds of cheese, 4.213 million pounds of butter, 35.640 million pounds of whole milk powder, 3.139 million pounds of cream cheese and 154,324 pounds of anhydrous milkfat. These transactions will move the equivalent of 669.376 million pounds of milk on a milkfat basis overseas.

Assisting CWT member cooperatives gain and maintain world market share through the Export Assistance program expands demand for U.S. dairy products and the U.S. farm milk that produces them. This helps all U.S. dairy farmers by strengthening and maintaining the value of dairy products that effect their milk price.

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.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available at http://www.cwt.coop/membership.

NMPF, Agriculture Groups Work to Keep Science in Scientific Standards

Posted on by Theresa Sweeney

The Codex international food standards are meant to protect human health and establish fair trade practices by developing cohesive food safety standards for food and agricultural products. However, the mandate to base Codex international food standards on scientific fact may be up for debate in July.

The European Union and other countries are seeking to water down Codex’s scientific mandate and instead direct that nonscientific factors, such as consumer preference issues, be considered as Codex develops standards. This would have significant negative repercussions for the American dairy industry and its ability to challenge unscientific barriers to trade.

The Codex Executive Committee and Commission will meet at the beginning of this month to consider revising its procedures in light of EU pressure. NMPF is working with the U.S. Dairy Export Council to lead the charge against these changes and ensure that existing science-based Codex rules are enforced and followed to preserve a level playing field for U.S. exports. The outreach on this issue harnesses a united U.S. food and agricultural effort on this issue, including driving support for U.S positions at the meetings.

NMPF has joined with other leading U.S. agriculture groups to develop materials outlining this threat to share with policymakers and international stakeholders. Together with several of those groups and USDEC, NMPF staff met last month with USDA Undersecretary of Trade Ted McKinney and USTR Chief Agriculture Negotiator Gregg Doud to make the case as to why preserving the scientific structure of Codex is critical.

Dairy Farmers Count on Congress to Pass USMCA

Posted on by Theresa Sweeney

The push to complete the U.S.–Mexico–Canada agreement (USMCA) received a boost in June when Mexico became the first country to ratify the trade agreement. Still, Washington has yet to take action, making collaboration key as NMPF works with other stakeholders to get the agreement over the finish line.

The U.S. Trade Representative’s Office is working with leading members of Congress to hash out a way forward, specifically focusing on concerns expressed by Democrats to guarantee sufficient Congressional support. Complementing that work, about 50 dairy farmers and dairy-cooperative staff took NMPF’s message in support of USMCA’s passage directly to Capitol Hill in June. Their on-the-ground advocacy was dovetailed with NMPF’s work to educate policymakers on the importance of this trade agreement to the dairy industry.

Also last month, NMPF joined forces with the U.S. Dairy Export Council and the International Dairy Foods Association to write to members of Congress from top dairy-producing states, asking them to “please pursue a USMCA vote without delay” on behalf of the dairy farms and businesses they represent.

“Solidifying and expanding trade opportunities abroad through USMCA will improve the prospects of dairy farms here at home,” said Jim Mulhern, president and CEO of NMPF. “In the midst of uncertainty surrounding our trade relationships and yet another year of meager milk prices, the United States lost an average of seven dairy farms a day in 2018. The passage of USMCA will instill a renewed sense of optimism in our dairy farmers.”

USMCA will help bolster the U.S. dairy industry by locking in existing access to our key export market in Mexico while increasing trade opportunities in Canada and establishing new trade rules to discipline Canada’s trade-distorting dairy policies, discourage unscientific barriers to trade and preserve the rights of common cheese name users. U.S. government estimates calculate that USMCA will increase U.S. dairy exports to Mexico and Canada by $277 million once it is fully implemented.

CWT-assisted sales top 600 million pounds milk equivalent

Posted on by Theresa Sweeney

The 38 contracts Cooperatives Working Together member cooperatives secured in May added 1.9 million pounds of American-type cheeses, 654,773 pounds of butter, 632,727 pounds of cream cheese, and 6.8 million pounds of whole milk powder to CWT-assisted sales in 2018 bringing total milk equivalent for the year to 604 million pounds on a milkfat basis.

These products will go customers in Asia, Central and South America, the Middle East, and North Africa. The product will be shipped May through September.

CWT-assisted 2019 dairy product sales contracts total 26.1 million pounds of cheese, 4.6 million pounds of butter, 2.6 million pounds of cream cheese and 30.2 million pounds of whole milk powder. All this product is scheduled to ship in the first nine month of 2019.

A thriving dairy export sector is critical to the growth and 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, pasteurized process cheese, or whole milk powder, the growth potential in world markets is greater that domestic sales. 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.

All cooperatives and dairy farmers are encouraged to add their support to this important program. Membership forms are available at http://www.cwt.coop/membership.

Tariffs on EU Dairy Products on the Table

Posted on by Theresa Sweeney

NMPF sought to highlight the deep imbalance in U.S.-EU dairy trade by supporting the U.S. Trade Representative’s proposal to impose retaliatory tariffs on European dairy imports if Europe continues to flout its WTO subsidy commitments.

Europe has been found to have doled out unfair aircraft subsidies to Airbus by a World Trade Organization court, with damages to U.S. business of $11 billion, according to U.S. estimates. The WTO is assessing the size of the retaliatory tariffs it is willing to authorize the U.S. to levy against EU exports should the EU not comply with the WTO ruling. USTR anticipates a decision this summer.

European dairy products feature prominently on USTR’s intended retaliation list, a smart move according to National Milk Producers Federation President and CEO Jim Mulhern.

“We have a unique opportunity to make a big dent in the dairy market access gap we face with Europe,” Mulhern told USTR during testimony on May 15. “Including EU cheeses, yogurt, and butter on this list, as USTR has proposed, is entirely warranted, and we would encourage you to add additional EU dairy-related tariff lines,” he said. Doing so “would bring increased attention to the gross inequities that currently define our dairy trading relationship.”

The United States is currently running a $1.6 billion dairy trade deficit with Europe. A complex web of EU tariffs and nontariff obstacles, including Geographic Indication restrictions, are largely to blame.

“It is essential that America deliver a clear and powerful message across the pond,” Mulhern concluded. “Subsidies and barriers that handicap U.S. businesses in the global marketplace will not be tolerated. And the days of trade deficits induced by unfair trade practices are coming to an end.”

Trade War with China Deepens, Worsening Economic Damage to Dairy

Posted on by Theresa Sweeney

U.S. negotiations with China faced a serious setback in May, pushing off the prospect of a resolution in long-running U.S. efforts to reform a myriad of Chinese policies that harm U.S. interests.

The new tariffs that took effect June 1 included hikes by China of tariffs on lactose and infant formula. Still, greater damage to dairy is coming from prolonging the standoff that’s deeply damaged U.S. dairy exports to one of the world’s largest dairy markets, crimping U.S. sales while competitors take advantage of the impasse.

Tariffs erected in 2018 have proven to be a catastrophic blow for the U.S. dairy industry in its third-biggest overseas market. China’s dairy imports grew by 13 percent in the first quarter of 2019 compared to the same period last year; over the same period U.S. dairy exports fell by more than 40 percent, reversing the 10 percent annual growth the U.S. had seen in the Chinese over the past decade. Resulting losses in U.S. dairy farm revenues may reach $4.8 billion by 2020.

Tariff Threat Avoided

Posted on by Theresa Sweeney

The importance of committing to solidifying dependable trading conditions with our biggest export market – Mexico – was driven home in early June as President Donald Trump threatened to impose escalating tariffs against all Mexican products in an unrelated dispute over immigration. Numerous groups, including NMPF, swiftly spoke out against the proposal, and late on June 7th the White House announced it would not proceed with the tariffs.

In a statement issued the day after the President threatened to impose tariffs, NMPF President and CEO Jim Mulhern warned that “New tariffs against Mexico are unlikely to secure the border, but judging from reaction on Capitol Hill, they may very well jeopardize the chances of passing the USMCA, a key White House priority and one that’s crucial for future agricultural prosperity. Re-escalating trade tensions only harms farmers further, just when they were seeing glimmers of hope.” Over the course of the intervening week when the prospect of tariffs loomed, NMPF took the threat of upheaval to this critical market seriously, arming Young Cooperators meeting with dozens of Congressional offices with talking points urging maintenance of open trade with Mexico and joining onto a joint statement with others in the agriculture and business communities.

NMPF estimates that producers have lost at least $2.3 billion in revenues through March due to higher tariffs by Mexico and China against U.S. dairy, which have lowered milk prices for all producers.

Down Go Steel Tariffs, Up Goes USMCA’s Chances

Posted on by Theresa Sweeney

Dairy producers got a dose of much-needed good news in May when North American trading partners reached agreement to end a testy tariff dispute. The trade deal announced May 17 put an end to the Section 232 metal duties that the United States levied against Mexico and Canada last year. In return, Mexico and Canada agreed to end retaliatory tariffs against several U.S. products, including cheese and yogurt. Economists with Informa Agribusiness Consulting had estimated that Mexico’s retaliatory tariffs, left unchecked, would have cost dairy farmers nearly $1.2 billion in lost revenue by the end of 2019.

“Dairy farmers have much to celebrate, with the resumption of normal business with our largest export partner,” Jim Mulhern, president and CEO of the National Milk Producers Federation, said. Congress’s next step should be “to vote on USMCA and quickly ratify it,” he said.

Dairy quickly capitalized on the USMCA momentum, with NMPF joining with the U.S. Dairy Export Council and the International Dairy Foods Association to inform Congress in a letter sent June 10 endorsing swift USMCA approval. The next day NMPF joined with almost a thousand other food and agricultural organizations and companies, including many NMPF members, to send a unified message to the Hill urging movement on the trade agreement.

USMCA modernizes the North American Free Trade Agreement, maintains U.S. dairy sales into Mexico, expands dairy market access in Canada, and reforms many nontariff barriers to trade. Dairy sales to Mexico and Canada should grow by a total of $277 million once USMCA is fully implemented, according to U.S. government estimates.

Dairy exports to Mexico totaled $1.4 billion last year, or 80 percent of Mexico’s total imports, and are poised for further growth under the open trade conditions that USMCA solidifies. Negotiations of the trade deal were completed in November but requires congressional approval. NMPF and its partners at the U.S. Dairy Export Council have pushed for USMCA ratification through a series of Capitol Hill meetings, briefings, special events, and letters to lawmakers.

Dairy Takes Positive Steps Forward, But Trade Tremors Abound

Posted on by Theresa Sweeney

It would be nice to have time to savor real progress, but that seems such a luxury when turbulence is the new normal.

The long overdue end to Mexico’s retaliatory tariffs against U.S. cheese exports last month was a positive development, one of several indicators suggesting that dairy’s fortunes may be improving. But as has often been the case, even that gain was soon thrown into doubt, suggesting that much work remains before we can feel confident we’ve turned the corner on reestablishing a dependable trading relationship with Mexico.

First, the good news: Removing the tariffs, a barrier that has harmed trade with our largest international partner, is important progress in improving dairy’s fortunes. The end of the Mexican retaliatory tariffs put the U.S. fully back as the preferred supplier to what last year was a $1.4 billion dairy market. The May 17 agreement ending U.S. tariffs against Canadian and Mexican metals that prompted the retaliation in the first place shows that, for all the frustrations farmers have felt in the ongoing trade wars, progress can occur.

The end of the tariffs also improves prospects for passing the USMCA trade treaty. Mexico has revised its labor laws, which should help gain support for the agreement in the U.S. Congress, and Canada is vowing “full steam ahead” for ratification. Meanwhile, producer margins are improving, and a better safety net is arriving with Dairy Margin Coverage Program signup on pace to begin June 17, giving producers several reasons for greater optimism about dairy’s economic fortunes.

But the threat of new tariffs President Trump raised in early June, meant to change Mexico’s behavior on immigration issues that are unrelated to trade or agriculture, raised the specter of renewed retaliation. With the resolution of that threat late last week, we are hoping that USMCA momentum, temporarily slowed, may revive and that we can again focus on repairing and expanding U.S. dairy’s relationship with its largest customer. To help build that groundswell of support in Congress, NMPF sent a joint dairy letter on USMCA, together with USDEC and IDFA, to two dozen of the top dairy state delegations in Congress. A day later NMPF joined with almost a thousand other food and agricultural organizations and companies, including many NMPF members, to send a unified message to the Hill urging movement on the trade agreement.

At the same time, turbulence continues with China. New U.S. tariffs on Chinese goods, the result of derailed negotiations  between the world’s two largest economies (and the third-biggest importer of U.S. milk), are likely to invite further retaliation, compounding the sharp drop in dairy exports we’ve already seen to China.

To ease the blow for producers, the Trump Administration, through the U.S. Department of Agriculture, has promised to help producers across agricultural commodities to lessen the near-term economic damage from the trade war with up to $16 billion in a new round of aid.

We at NMPF have been in discussions with the department, suggesting how to target limited resources to best ameliorate the damage.

But we don’t yet know what will be in the assistance package, which means yet more question marks; we’ll keep pushing hard for assistance that mitigates the more than $2.3 billion in damages dairy farmers have faced because of the trade war. But no assistance package can completely capture the full effects of the market uncertainty, interrupted relationships and markets lost to unencumbered competitors who are seizing market share. That’s why we certainly hope the aid package isn’t just as fair as possible – we hope it’s the last one farmers need.

Significant work remains on numerous trade policy fronts to help dairy producers fully recover. In addition to working for USMCA passage, we will continue urging the White House to resolve the renewed tariff spat with China and conclude a bilateral agreement that lowers tensions and improves market access. We also need swift and robust progress in trade discussions with Japan, which the president has promised, so that U.S. dairy interests are not further punished by tariffs and TRQs that each year let our European and Oceania competitors gain ground due to the terms of their trade treaties with Japan.

These steps are necessary to provide certainty, opportunities and improved prices for U.S. dairy producers, something badly needed after the economic turmoil of recent years. If dairy truly is getting back on its feet – and positive signs are emerging – then the next step will be to start moving forward. The end of Mexico’s retaliatory tariffs put us on firmer ground. We can move ahead, despite the tremors that continue to shake things up.

 

 

 

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