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CEO's Corner:

Trade Success Shows How Patience, Persistence Pays

July 5, 2022

An invitation to the White House to represent dairy farmers and their cooperatives at the signing of important legislation that helps the dairy community is an honor. The chance to attend, along with U.S. Dairy Export Council CEO Krysta Harden and other ag leaders, the signing of the Ocean Shipping Reform Act last month was an opportunity to highlight dairy’s hard work to alleviate the shipping crisis that has impeded exports for the past year.

But to be honest, a greater honor comes from working with the NMPF and USDEC team that over the past year has led efforts in dairy and across agriculture to enact the legislation. And that effort’s success is only one more accomplishment in one of the biggest long-term successes of dairy and dairy policy over the past generation – the emergence of the United States as a critical player in international markets. This huge export growth boosts milk prices, alleviates pressure on an industry whose productivity outpaces domestic population growth, and feeds the world with the nutritious products Americans have long enjoyed.

The Ocean Shipping Reform Act sets in motion a series of new rules and regulations governing ocean freight shippers that the Federal Maritime Commission must implement over the next year. These rules should help dairy-product exporters get more of their goods onto ships that recently have been heading to Asia empty, trying to meet import demands rather than fill their hulls with the goods that create U.S. jobs.

Agriculture, a rare American industry that ships out more than it brings in, has suffered from practices that have created unnecessary, costly delays to serving overseas consumers. While this legislation alone won’t smooth out all the issues with supply chains that are struggling with even deeper structural issues, it will help dairy build upon the global competitiveness that made 2021 a record year for U.S. dairy exports.

That’s gratifying. It’s also in keeping with the longer-term story of how patient, relentless efforts in dairy-trade policy have helped build an emerging export powerhouse.

Day-to-day, few areas of the many in which NMPF serves the interests of its members can be as bedeviling as trade. U.S. dairy farmers gain a key win against Canada – and Canada responds by dragging its feet even further. A judge stands up for the integrity of common cheese names – and the European Union persists in its shenanigans. These are the sorts of setbacks and stonewalls that can obscure progress.

But the progress is real. In 1995, 4.4 percent of U.S. milk solids were exported to foreign destinations. Last year, it was 17.3 percent – nearly one out of every six gallons of milk. U.S. dairy trade set records in volume and value in 2021, international market share is increasing, and American milk producers stand to benefit more than farmers anywhere else from the world’s growing appetite for dairy as competitors craft policies that hinder their own dairy industries – a path we simply won’t let happen here.

That growth has been crucial as gains in U.S. dairy production have outstripped domestic population growth. It’s safe to say that, without the emergence of international markets, milk prices would be dramatically lower, and much of the current size and regional diversity of U.S. dairy farms would be lost due to intolerable economic conditions.

U.S. dairy exports have risen broadly in part because we sweat the details – the attentiveness NMPF and USDEC showed in pushing for the Ocean Shipping Reform Act is characteristic of its approach for years. Decades of diligent work on trade has built a brighter present for dairy, even though that work requires patience and persistence that at times would seem to go beyond reason.

The progress we’ve seen on trade has happened because of the painstaking work of beneficial free-trade agreements; of tariff reductions that improved access; of robust legal efforts that have successfully defended U.S. dairy in international law; and because of the re-orientation of the industry toward greater exports that were made possible because trade policy created a more hospitable environment in which to invest.

Foresight by earlier NMPF and dairy check-off program leaders – and a lot of hard work — built the U.S. Dairy Export Council, acting worldwide to promote U.S. products. The same can be said for the industry’s sustainability initiatives, which help U.S. dairy farmers be the most sustainable, and thus most competitive, milk producers in the world.

And just as past efforts have paid huge dividends, present and future ones will as well, from seeking continued opportunities through initiatives like the new Indo-Pacific Economic Framework to telling the world the compelling story of U.S. dairy through hosting the International Dairy Federation’s annual summit in Chicago in 2023. It’s the first visit of that global conference to the United States in three decades, and it’s being brought here through the efforts of Dairy Management Inc., USDEC and NMPF, after the previous host – China – backed out.

Dairy’s representation at the White House at the signing of policy that will advance this industry shows how much we matter in policy arenas. But it’s also only one part of a much larger, much more important effort. Through resilience, progress and determination to build a better future for U.S. dairy, we’ve come a long way. And whatever the specific successes – or momentary frustrations – may be, dairy’s advance will continue.