Tag: trade

NMPF Supports USTR Proposal to Target EU Dairy in Airbus Retaliation

Posted on by Theresa Sweeney

ARLINGTON, Va. – The U.S. Trade Representative’s Office (USTR) should slap tariffs on dairy shipments from Europe in response to the $11 billion in damage EU Airbus subsidies caused the United States, National Milk Producers Federation President and CEO Jim Mulhern said today in testimony before a USTR panel.

The World Trade Organization recently found that Europe’s large civil aircraft subsidies were against international trade rules and permitted the United States to levy duties on EU products until Europe comes into compliance.

“We have a unique opportunity to make a big dent in the dairy market access gap we face with Europe. 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,” Mulhern said. Doing so “would bring increased attention to the gross inequities that currently define our dairy trading relationship,” he said.

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

“Simply put, we are largely being blocked from the EU market despite being a trusted and proven dairy supplier to the rest of the world,” he said, singling out Europe’s use of Geographic Indication requirements that target common products carrying geographic names like parmesan, feta, and muenster cheeses. Europe blocks sales of these everyday products from the United States and is aggressively pressuring other countries to do the same.

“It is essential that America deliver a clear and powerful message across the pond,” Mulhern said. “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.”

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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 the majority of U.S. milk, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more, visit www.nmpf.org.

Ensuring Milk’s Recent History Doesn’t Repeat Itself

Posted on by Theresa Sweeney

“History doesn’t repeat itself, but it often rhymes.”

I’m reminded of this saying, usually attributed to Mark Twain, as we look at dairy’s price outlook over the next few months. For the first time since before the retaliatory trade tariffs hit last summer and ruined a promising market outlook, real signs of a milk-price recovery have once again been apparent, just as an improved USDA safety net takes effect to provide at least some relief to struggling producers.

But just like a year ago, trade turmoil – in this case, new and higher tariffs against China – now clouds the market outlook. At NMPF we are doing what we can to ensure that history doesn’t repeat itself, and that even if it rhymes, this time the song needs a better melody.

Now in our fifth year of low prices and our third year of trade wounds, we’re hopeful that the market signals — that the worst may be over and that better days may lie ahead – are not derailed by a trade war train wreck.

For some of the positive, hopeful signs:

  • After years of rising cow numbers dating to 2011, herd sizes have dropped every month since last July, with March’s decline the biggest of the entire period. The steady decline in cow numbers in March finally pushed milk production to levels lower than a year earlier, reducing the supply overhang that has depressed prices.
  • Futures markets have noticed the tightening. Forecasts for milk prices this year as reflected in futures show a rise of $1.80 per hundredweight over last year, stabilizing around $18, and have been rising by the week.
  • The higher milk prices, combined with steady feed costs, have improved producer margins.
  • And finally, sustained improvement in world prices for butter, skim-milk powder and cheese are in turn helping lift domestic prices, showing how global demand can benefit U.S. dairy, despite the trade-policy and export challenges we currently face.

These developments show a sector experiencing an improving outlook, perhaps putting us back on the path we appeared to be on in 2018, when retaliatory tariffs against dairy from Mexico and China disrupted exports to two of our largest markets. The question before us is whether the economic fundamentals today are strong enough to maintain the nascent recovery.

Until trade turmoil is resolved, the battle to open and expand new markets — our best hope for real, sustainable recovery — will be fought with one hand tied behind our back. And the previous half-decade has taken such a toll on farmer finances that, over the next few months, many dairies will likely continue to struggle. Help from the market is critically important – but it’s inevitable that the economic pain on the farm won’t end overnight.

That’s why there is significant work to do to help producers weather the dairy crisis over the next few weeks and months.

The immediate task is to encourage and guide producers through signup for new dairy programs, most importantly the new Dairy Margin Coverage program. At a congressional hearing on dairy’s struggles convened April 30, Minnesota farmer Sadie Frericks told lawmakers she’d be signing up for five years of coverage at the maximum, $9.50 per hundredweight level. “Dairy farming requires smart business decisions. This was an easy one,” she said after the hearing.

Many other farmers, especially small and medium-sized producers, need to make the same choice as Sadie’s family. We will be ready to help producers understand their full options, which includes not only DMC but other risk-management tools, as well as ways to gain premium discounts and allocate refunds for previous Margin Protection Program premiums provided for under the farm bill passed last year. Please watch our website, nmpf.org, in coming weeks for more information and resources as we head toward the DMC signup date in mid-June.

At the same time, we can’t accept gridlock in Washington’s ability to improve trade policy. A renewed tariff spat with China cannot be an end in itself – it must lead quickly to a bilateral agreement that lowers tensions and establishes more and better market access. The Administration must lift the steel and aluminum tariffs on Mexico and Canada, and the Congress must ratify the U.S.-Mexico-Canada Agreement this year. We also need quick resolution to trade discussions with Japan so that U.S. dairy interests are not further punished by tariffs much higher than those negotiated by our European and Oceania competitors. These steps are necessary to provide some measure of certainty and new opportunities for dairy producers, something badly needed after the economic turmoil of recent years.

These are building blocks for longer-term recovery that need to be laid down now, when the urgency of dairy’s hard times is still fresh in the public’s mind and concern about them isn’t limited to the dairy sector itself.

If dairy truly is getting back on its feet – and we hope this spring’s positive signs show it’s about to happen, despite deeply worrisome trade tensions – then the next step will be to gain traction and move forward, because we don’t want history to repeat itself.

A little rhythm would be nice, but we’re ready to be done with the blues.

VIEW BIO

With $277 Million at Stake for Dairy, USMCA Progresses

Posted on by Theresa Sweeney

The U.S.-Mexico-Canada Agreement (USMCA) cleared an important procedural step in recent weeks, moving it one step closer to possible ratification, as the U.S. International Trade Commission (ITC) released an economic impact study touting the pact’s financial benefits for the U.S. The 375-page ITC report found that, if fully implemented and enforced, USMCA would add more than $68 billion to the U.S. economy and 176,000 U.S. jobs by its sixth year. For dairy, ITC projected a positive impact of $277 million, with most gains coming from increased tariff-rate quota access to Canada.

USMCA’s importance for dairy extends well beyond the market access improvements with Canada that the ITC accounted for, as NMPF noted in our release welcoming the publication of the report. USMCA solidifies essential trading channels with Mexico – where the U.S. shipped $1.4 billion in dairy products last year – and tears down the controversial Class-7 milk pricing scheme, instituting new disciplines on Canadian dairy policies to keep their trade-distorting capacity in check. Moreover, the deal ushers in new rules on GIs and SPS issues to reduce the prospect of unjustified barriers to trade cropping up.

USTR touted those improvements in an agriculture-focused fact sheet released in early May that prominently featured dairy’s gains. The document’s heavy dairy focus illustrated the outsized benefits the agreement holds for it compared to other farm sectors, a result of NMPF’s strong investment in using USMCA as a vehicle for pursuing further upgrades to the existing NAFTA deal that’s boosted exports to Mexico.

“It’s important to keep the full picture in mind of what’s at stake when examining USMCA’s benefit to the economy,” said Jim Mulhern, president and CEO of National Milk Producers Federation. USDA recently reported that the U.S. lost more than seven dairy farms a day in 2018 due to poor economic conditions. NMPF is pushing back against this trend on multiple fronts. USMCA does that that by safeguarding our largest export market and instituting valuable new improvements to dairy trade in North America.

To continue to advocate for passing USMCA – and also the end of the Section 232 tariffs that curb U.S. cheese exports to Mexico – NMPF and its members participated in events taking place with members of Congress in the Midwest over last month’s Congressional recess. That included an event hosted by NMPF member Associated Milk Producers Inc. for Representative Jim Hagedorn (R-MN) from Minnesota and a roundtable with Rep. Ron Kind (D-WI) attended by Mulhern and Jeff Lyon, general manager of FarmFirst, an NMPF member cooperative.

Given the importance of NAFTA/USMCA to dairy and the urgent need to lift Mexican retaliatory tariffs levied in response to U.S. metal tariffs, NMPF will work closely with member co-ops and state dairy associations nationwide to build support for action by the government on both fronts.

Farm Groups Unite to Demand Level Playing Field in Japan

Posted on by Theresa Sweeney

Expanded agricultural market access to Japan is vital for America’s struggling rural economy, and that access needs to be on par with what’s already enjoyed by U.S. competitors. That was the message delivered by NMPF, many of its members and dozens of other farm and food organizations among the nearly 90 signatories of a letter sent last month to the U.S. Trade Representative. The letter detailed the need for a swift and strong U.S.-Japan trade deal that addresses the needs of American farmers and food makers.

“The U.S. food and agriculture industry is increasingly disadvantaged by competing regional and bilateral agreements with Japan that have already been implemented, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Japan Economic Partnership Agreement (EU-Japan EPA),” the groups, which included the American Farm Bureau Federation, the International Dairy Foods Association, and other agricultural leaders said in their letter to USTR.

Japan recently decreased tariffs on agricultural imports from the European Union and CPTPP member countries, which, the group warned, is stealing markets once enjoyed by American exporters.

NMPF has worked with others in agriculture over the past two years for the launch of trade negotiations with Japan as other competitors have begun to enjoy the fruits of expanded market access not shared by the U.S. The administration finally took the necessary step of announcing talks late last year, formally starting negotiations last month. NMPF is focused on touting the urgent need for a deal with Japan that helps U.S. dairy exporters maintain and grow their competitiveness in this dairy-hungry market.

The United States exported $270 million in dairy goods to Japan in 2018, making it the fifth-largest buyer of U.S. products. A USDEC study earlier this year showed that America could double its share of the Japanese market over the next 10 years if given appropriate market access. Without positive action from trade officials, the USDEC study forecast that dairy exports to Japan will fall 20 percent over the next 5 years, as Europe, Australia, and New Zealand increase their dominance in the market, given the benefits their own trade treaties with Japan provide them.

Because of that risk, NMPF will continue to work with the Trump Administration and others in food and agriculture to drive towards robust results for dairy in the ongoing U.S.-Japan trade negotiations. A U.S. trade agreement with Japan is needed quickly, and it must include market access provisions at least equal to the terms of the CPTPP and the EU-Japan EPA, building on those precedents where possible, the letter urges.

CWT-assisted Dairy Product Export Sales Greatly Exceed U.S. Milk Production Increase

Posted on by Theresa Sweeney

While U.S. milk production increased 103 million pounds in the first three months of 2019 according to the USDA, the Cooperatives Working Together (CWT) export assistance program for member cooperatives have captured sales contracts that will move overseas five times that amount in milk equivalent this year, proving again the self-help program’s worth to U.S. dairy farmers.

In April, CWT members secured 52 contracts to sell 1.2 million pounds of American-type and Swiss cheese, 1.2 million pounds of butter, 1.3 million pounds of whole milk powder, and 1.9 milk pounds of cream cheese. These products are going to customers in Asia, Central and South America, and the Middle East, and will be shipped April through October 2019.

These sales bring the total 2019 CWT-assisted dairy product exports to 26.6 million pounds of cheese, 4 million pounds of butter, 23.4 million pounds of whole milk powder, and 1.9 million pounds of cream cheese. These transactions will move the equivalent of 520.8 million pounds of milk on a milkfat basis overseas, all in 2019.

2019 will be pivotal for dairy farmers, with higher milk prices a necessity following the challenges of the past half-decade. Dairy farmers and dairy cooperatives now and in the years ahead will increasingly rely on a thriving export market for growth and viability. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome certain disadvantages such as the domestic/global price gap and shipping costs.

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 here.

Cooperative Members, Dairy Experts Testify in Agriculture Subcommittee’s First Hearing

Posted on by Theresa Sweeney

In its first hearing of the 116th Congress the House Agriculture Committee’s subcommittee on livestock and foreign agriculture focused on dairy’s improved safety net and the need for expanded exports, with farmers from NMPF cooperatives and industry leaders bringing national attention to industry concerns.

The hearing, called by Subcommittee Chairman Jim Costa (D-CA), spotlighted the low prices and trade concerns the sector faces while discussing the opportunities offered for producers through the new Dairy Margin Coverage program, calling solutions to dairy’s struggles one of the subcommittee’s highest priorities.

Testimony included:

  • Minnesota dairy farmer Sadie Frericks, a member of Land O’Lakes, spoke of the importance of the new Dairy Margin Coverage program as a risk management tool as her family weathers economic challenges;
  • California Dairies, Inc. President and CEO Andrei Mikhalevsky provided an overview of dairy’s trade issues, a rising concern as exports are crucial to increasing dairy demand;
  • Pennsylvania dairy farmer Dave Smith, Executive Director of the Pennsylvania Dairymen’s Association, discussed additional challenges including the importance of milk consumption in schools and the need to combat mislabeled fake milks in the marketplace;
  • New York dairy farmer Michael McMahon gave voice to the dairy industry’s unique workforce challenges, including the lack of a viable guest worker program that covers year-round workers;
  • and Dr. Scott Brown, Director of Strategic Partnerships for the University of Missouri’s College of Agriculture, Food and Natural Resources, provided economic insight.

NMPF President and CEO Jim Mulhern thanked the participating farmers and industry leaders for bringing their crucial dairy perspectives to a national level and applauded the subcommittee for putting dairy first on its 2019 agenda, noting that the sector’s “challenges reverberate through the U.S. economy.” Mulhern also thanked lawmakers including Costa, subcommittee ranking member Rep. David Rouzer (R-NC), Agriculture Committee Chairman Rep. Collin Peterson (D-MN), and Congressman GT Thompson (R-PA) for their helpful opening and closing statements at the hearing.

NMPF Applauds House Subcommittee for Putting Dairy First; DMC Decision Tool Now Online

Posted on by Alan Bjerga

ARLINGTON, Va. – As key milestones are being met in offering much-needed financial relief for dairy producers, the National Milk Producers Federation today thanked the House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture for choosing dairy as the subject of its first hearing this year.

Lawmakers heard a diverse array of witnesses who provided important perspectives on the state of U.S. dairy, which is in its fifth year of low prices and its second year of trade-related hardships. In their opening statements:

  • Minnesota dairy farmer Sadie Frericks spoke of the importance of the new Dairy Margin Coverage program as a risk management tool as her family weathers economic challenges;
  • California Dairies, Inc. President and CEO Andrei Mikhalevsky provided an overview of dairy’s trade issues, a rising concern as exports are crucial to increasing dairy demand;
  • Pennsylvania dairy farmer Dave Smith, Executive Director of the Pennsylvania Dairymen’s Association, discussed additional challenges, including the importance of milk consumption in schools and the need to combat mislabeled fake milks in the marketplace.
  • New York dairy farmer Michael McMahon gave voice to the dairy industry’s unique workforce challenges, including the lack of a viable guest worker program that covers year-round workers
  • and Dr. Scott Brown, Director of Strategic Partnerships for the University of Missouri’s College of Agriculture, Food and Natural Resources, provided economic insight.

“Dairy’s challenges reverberate through the U.S. economy, and it’s appropriate that lawmakers put dairy first on its 2019 agenda,” said Jim Mulhern, president and CEO of NMPF. “We thank all of the farmers and industry leaders who spoke out. We also commend subcommittee Chairman Rep. Jim Costa (D-CA) and ranking member Rep. David Rouzer (R-NC), as well as Agriculture Committee Chairman Rep. Collin Peterson, (D-MN), who made helpful opening statements at the hearing, for their attention to dairy’s urgent needs.”

The NMPF continues to encourage farmers to prepare for Dairy Margin Coverage signup, scheduled to begin June 17. The USDA’s decision tool, designed to help farmers determine their appropriate coverage level, is now online here. Later this week, letters will be sent to producers informing them of their premium refunds under the previous Margin Protection Program.

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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 the majority of U.S. milk, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more, visit www.nmpf.org.

USMCA Passage Critical to Preserve and Strengthen Dairy Export Markets

Posted on by Chris Galen

 

ARLINGTON, VA – The U.S. International Trade Commission (ITC) released an economic analysis of the U.S.-Mexico-Canada Agreement (USMCA) today and dairy industry officials eager to see USMCA’s passage welcomed this key step in the trade agreement approval process.

Tom Vilsack, president and CEO of the U.S. Dairy Export Council, said the ITC study is important because it moves the USMCA process closer to ratification, a step urgently needed to secure trading conditions with Mexico and usher in the improvements the agreement makes for U.S. exports.

“We shipped $1.4 billion in dairy products to Mexico last year, which accounts for more than one-fourth of U.S. dairy exports,” he said. “Without a trade treaty with Mexico in place, the dairy industry would be hard pressed to maintain and expand these sales, as our competitors in Europe are expected to implement a lucrative new trade arrangement with Mexico by next year. Moreover, without USMCA we lose out on the new rules this deal puts in place such as key reforms to Canada’s dairy system. Congress must pass USMCA to shore up our market in Mexico and harness the gains made in other areas through USMCA.”

In addition to increases in tariff-rate quota access for dairy products to the Canadian market, Canada will remove a controversial milk pricing scheme that disadvantaged American businesses, impose new disciplines on its dairy pricing programs and Mexico will update the way it treats imports of common-name food products like parmesan and swiss cheeses that could face trade roadblocks.

“When examining USMCA’s benefit to the economy, we believe it is important to keep the full picture in mind of what’s at stake here,” explained Jim Mulhern the president and CEO of the National Milk Producers Federation. “USDA recently reported that our country lost an average of seven dairy farms a day in 2018 due to the poor economic conditions in rural America. That’s a startling number, and reversing this alarming trend is what we should be discussing. USMCA helps put us on a path to doing that by safeguarding our largest export market and instituting valuable new improvements to dairy trade in North America.”

The benefits of USMCA expand far beyond just dairy; the Food & Agriculture Dialogue on Trade also summarized the value of the agreement and the proper lens through which to examine the ITC report’s results. That document lays out why American Agriculture needs passage of USMCA noting for instance that: “uncertainty about NAFTA’s future threatens the North American market integration that has created and supports jobs for many U.S. food and agriculture producers.”