CWT assisted member cooperatives in securing 44 contracts to sell 5.3 million pounds of American-type cheeses, 3.8 million pounds of whole milk powder, 35,274 pounds of anhydrous milkfat (AMF), and 504,859 pounds of cream cheese to customers in Asia, Central and South America, the Middle East, North Africa, and Oceania. The product will be shipped to customers in 12 countries in those six regions of the world during the months of July through December 2019.

The contracts bring the 2018 total of the CWT-assisted product sales contracts to 35.8 million pounds of cheese, 4.2 million pounds of butter, 35.6 million pounds of whole milk powder, 189,598 pounds of AMF and 3.6 million pounds of cream cheese. These transactions will move the equivalent of 726.4 million pounds of milk on a milkfat basis overseas.

Assisting CWT member cooperatives gain and maintain world market share through the Export Assistance program, in the long-term expands the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively impacts all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact 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.

The Codex Executive Committee met the first week of July in Geneva, Switzerland, with the question of whether to preserve the scientific basis of international food standards high on the agenda. The committee recommended that Codex should not embrace other non-scientific factors in its decision-making, a topic then hotly debated during the Codex Alimentarius Committee meeting. The U.S. emerged victorious against an EU-led charge to undermine Codex’s scientific mandate.

This win would not have been possible without the efforts of NMPF staff to build partnerships and strengthen U.S. relationships with overseas authorities and organizations.

For years, the United States struggled to rally support from other countries for the U.S. position on Codex. However, NMPF has worked hard to drive greater cooperation and build allies internationally. USDEC colleagues leveraged the Memorandum of Understanding established with our FEPALE partners to rally support for the U.S. position and to present a united front against the EU’s effort to seek revisions to Codex’s scientific mandate.

Continuing to build upon these international relationships will be key to defending Codex’s science-based standards. NMPF is pleased to report the signing of a new Memorandum of Understanding (MOU) with the Inter-American Institute for Cooperation on Agriculture (IICA). This MOU will complement the one NMPF already shares with FEPALE and provide NMPF with another way to engage directly with stakeholders in Central and South America.

NMPF has endorsed the bipartisan Agriculture Environmental Stewardship Act (H.R. 3744), reintroduced July 12 in the House by Representatives Ron Kind (D-WI) and Tom Reed (R-NY), both members of the tax-writing House Ways and Means Committee.

NMPF has worked in partnership with the bill sponsors and the American Biogas Council to craft this proposal, which makes nutrient recovery and biogas systems eligible for a Section 48 Investment Tax Credit to cover 30 percent of the upfront capital costs of installing the technologies.

“This measure recognizes the value that biogas systems can have for dairy producers of all sizes as they continuously improve their sustainability nationwide,” said Jim Mulhern, president and CEO of NMPF.  “The creation of this new investment tax credit would also address the value of nutrient recovery technologies, which can transform manure into fertilizer for crops and bedding for cows.  These technologies are important, but expensive.  If passed, this bill will help farmers incorporate these new technologies into their operations, for the benefit of everyone.”

The bill would enable dairy farmers to increase their investment in technologies that help recover and recycle nutrients from animal waste, in turn improving water quality in communities.

NMPF regulatory expert Miquela Hanselman testified on July 11 at a joint U.S. Department of Agriculture and U.S. Department of Health and Human Services meeting soliciting public comment on the upcoming update of the Dietary Guidelines for Americans, making the case that dairy needs to remain its own food group, plant-based products shouldn’t be included in the dairy category, and that dairy protein is superior to plant protein.

“Dairy foods are one of the top sources of calcium, protein, phosphorus, magnesium, potassium, vitamins A, B12, D and riboflavin in children’s diets,” Hanselman said. “In fact, it was determined in 2015 that 42% of individuals over the age of 1 don’t get enough calcium or vitamin D–two micronutrients that dairy products are full of. If dairy were removed from the diet, people would fall significantly below the estimated average requirement.”

The meetings began with each of the DGAC’s six subcommittees and one working group presenting draft protocols or proposed scientific approaches which then will be used to examine the scientific evidence. These protocols include analytic frameworks, inclusion and exclusion criteria, and search strategies, all of which are available online.

While the committee continues to put together the 2020 guidelines, a comment period will remain open for anyone who would like to submit comments. Submissions may be made here.

The second part of the meeting focused on comments from members of the public. The dairy industry was united in promoting the importance of dairy in healthy diets, even as some public comments were anti-dairy and not supported by scientific literature. NMPF and the National Dairy Council commented on key areas regarding dairy’s important place in the dietary guidelines.

Key priorities for dairy include:

• Maintaining dairy as a separate nutritional group
• Maintaining the recommendation of three dairy servings per day
• Preventing non-dairy beverages from being allowed into the dairy group
• Emphasizing the protein quality of dairy products

You can find the full statement here. NMPF will submit written comments and continue to monitor the dietary guidelines as more information is released. The next public meeting will be on October 24-25 in Washington, D.C.

focused on the importance of trade to agriculture and the need for Congress to quickly pass USMCA, focusing on the dairy industry.

In his remarks, Pence recognized CDI members Jim Wilson, Johnny Fagundes III, and John Fagundes IV and highlighted the benefits that USMCA will bring to our nation’s dairy farmers.

“I have to tell you, I watched this president drive a hard bargain,” on dairy during USMCA negotiations with Canada, Pence said. “The USMCA is a win for American dairy.”

Also as part of USMCA advocacy, Northwest Dairy Association Board Chairman and NMPF executive committee member Leroy Plagerman recently hosted a Farmers for Free Trade event at his family farm near Ferndale as part of the nationwide #MotorcadeForTrade.

NMPF is encouraging its members to take the opportunity to engage their representatives while they are in their home districts in August to emphasize the dairy-specific benefits of USMCA, such as locking in existing access to Mexico and disciplining Canada’s milk-pricing system.

NMPF has created an internal document on USMCA with background information, talking points, and an extensive list of actions taken to help move this agreement forward. Click here to download this reference document to help shape any comments. NMPF has also created a flyer on USMCA’s dairy benefits.

NMPF and its USDEC colleagues sent a letter July 12 to FDA and USDA encouraging the agencies to negotiate and make final a Memorandum of Understanding (MOU) establishing a smooth-functioning interagency process to support dairy exports, citing the indispensable role such exports play in supporting U.S. dairy farms.

“A successful MOU should outline key roles and responsibilities of each agency in order to foster the ability of the agencies to work in a collaborative manner on the various tasks involved in keeping American-made dairy products flowing freely abroad,” NMPF and USDEC wrote.

FDA has taken proactive steps in recent years to work in conjunction with USDA and better support the U.S. dairy industry in facilitating exports around the world. But more work remains.

Without careful coordination within the dairy industry, disagreement and communication breakdowns can derail export avenues. The MOU would tackle this challenge and proactively eliminate obstacles to expanding trade opportunities for the U.S. dairy industry.

The margin for June under the Dairy Margin Coverage program will be $8.63 per cwt, $0.37 per cwt lower than a month earlier, as rising feed costs negated any economic gains created by a higher milk price. The falling margin will generate a June DMC payment of $0.87 per cwt for producers who purchase coverage at the DMC maximum level of $9.50 per cwt for up to 5 million pounds of production history. Thus far, margins under maximum DMC coverage would generate a payment for every month of 2019.

The All-Milk Price in June was up by 10 cents a hundredweight over May, but the June feed cost calculation was $0.47 per hundredweight higher than a month earlier, as the effects of this year’s weather disruptions in the heart of the country began to take effect began to hit feed prices. On a per hundredweight of milk basis, the calculated feed cost for June rose 38 cents from May because of higher corn prices and 20 cents due to a higher soybean meal price, offsetting a decline of 11 cents in the average alfalfa hay price.

The June feed cost would have been 16 cents a hundredweight of milk lower, raising the June margin and lowering DMC payments by the same amount, had the dairy quality alfalfa pay price not been added into the calculation.

As of July 29, USDA’s DMC Decision Tool, which can be accessed online, projected the margins shown below. These calculations would generate payments averaging $0.51 per cwt., net of sequestration, for all of 2019 to producers who sign up for $9.50 per cwt coverage on up to 5 million pounds of production history. Coverage at this level costs $0.15 per cwt for a one-year signup, or $0.1125 for the year, if signing up for five years.  Producers have until September 20^th for 2019 enrollment.

NMPF’s DMC information page on its website offers a variety of educational resources to help farmers make better use of the program.

In welcome news for dairy producers, the U.S. Department of Agriculture met its projected timeline of beginning payments under the Dairy Margin Coverage program by early July.  NMPF thanked Agriculture Secretary Sonny Perdue for meeting its stated goal.

“DMC aid represents significant improvement from previous programs, and with dairy farmers facing a fifth year of low prices, receiving better assistance in a timely fashion is a matter of survival for some family farms,” said Jim Mulhern, president and CEO of the NMPF.  “The DMC program doesn’t replace a healthy market, but it is a crucial safety net in turbulent times.  All dairy producers should strongly consider enrolling, and to look closely at coverage at the $9.50 maximum level.”

More than one-third of all U.S. dairy farms have signed up for DMC since it was rolled out June 17, according to USDA.  Enrollment will continue through Sept. 20, and coverage is retroactive to Jan. 1.  NMPF has a resources page on DMC and other dairy assistance programs on its website.

Milk producers will do better the second time around than they did in the first round of Market Facilitation Program payments, which the U.S. Department of Agriculture announced July 25.

The trade-mitigation payments are the key component of the $16 billion aid package the White House has offered, intending to compensate agricultural producers for lost and diminished export markets resulting from the trade policy wars.

MFP payments will be made in up to three tranches, with the second and third tranches to be determined as market conditions and trade opportunities dictate. For dairy farmers, the payment rate is $0.20/cwt., compared to a $0.12 rate used in 2018. The first tranche will include 50% of the total payment, which for dairy farmers should mean an initial rate of $0.20/cwt. on half of their production history.  The other 50% will be divided between the following two tranches. If conditions warrant, the second and third payments will be made in November and January 2020. USDA will begin issuing the first payments in mid-to-late August.

The higher rate for dairy is a welcome development and reflects NMPF efforts both last year and this one to convince the administration that losses suffered by dairy farmers have been greater than the compensation provided to them.

While an improvement over the first MFP payments, NMPF still expressed concerns over details of the new program and will work with USDA to implement the initiative in as pro-farmer a way as possible. NMPF opposed USDA’s continued use of dairy farms’ outdated production history in assessing payments and will continue working with the agency and allies in Congress to push the USDA to update that data.

“We appreciate the efforts of USDA and the White House to assist farmers who have suffered significant losses due to retaliatory tariffs,” NMPF President and CEO Jim Mulhern said. “Dairy producers have so far lost more than $2.3 billion in revenues since tariff escalation began in earnest one year ago. USDA’s new approach raises the level of aid to dairy farmers from last year’s program, a step in the right direction. We also urge the department to revise the outdated production history information used to calculate payments, because these old production numbers lessen the effectiveness of the program.”

In addition to the direct payments, USDA will spend$1.4 billion to buy commodities and redistribute them to food banks, school cafeterias and other nutrition programs, including $68 million of milk. Another $100 million is earmarked for food and farm groups, including the U.S. Dairy Export Council, to develop new export markets. MFP signup at local FSA offices will run from Monday, July 29 through Friday, December 6, 2019.

The second round of government assistance for farmers, and the inability of the aid package to replace the near-term losses for dairy, shows the need for resolution to the trade wars, Mulhern said.

“Today’s announcement underscores that dairy farmers need to rely on trade, not aid, to prosper in a global marketplace,” he said. “Resolving the current trade impasse with China and aggressively expanding ties with other trading partners also is essential to make these aid packages unnecessary. We are also working with the administration and Congress to pass USMCA, which would immediately create new opportunities for U.S. dairy.”

Economic recoveries don’t happen overnight.

But we are starting to see enough hopeful signs to become more confident that, despite continued trade turbulence, better times may be near. While not exactly a boom, the second half of 2019 may provide producers with the best milk prices they’ve seen in half-a-decade – and with that, a chance to repair battered bottom lines while we work for policies that maintain the recovery and benefit dairy in the months and years to come.

Here’s the good news.

According to CME forecasts, dairy prices in the second half of this year may be the highest since the record-setting year of 2014. In contrast to this year’s first half, when the average milk price was $17.45 per hundredweight, second-half prices may average $19.22 per hundredweight. That’s more than $1.50 per hundredweight above any annual average since 2014, a clear improvement for producers.

Two main trends are driving higher prices: one that’s as old as dairy economics, the other one something that’s more important each year. First, dairy-product demand has been outpacing growth in supply. Increases in U.S. milk production have nearly ground to a halt after several years of expansion. Meanwhile, cheese and milk-powder demand is increasing enough to offset declines in other categories, raising the overall need for dairy products.

Second – and this is a testament to the quality of U.S. dairy and the competitiveness of its producers – exports continue to be strong by historical standards, despite severe losses in sales to China and, until recently, significant disadvantages placed upon us in Mexico, our largest market. Total U.S. dairy exports in May were valued at $539.1 million, the highest for that month in four years, thanks to rising cheese exports and world prices. U.S. dairy export volume is on track for its third-best year ever, trailing only 2018 and 2014. All this occurred despite a two-thirds drop in sales of milk powders, cheese, butterfat, whey products, and lactose to China.

To be sure, the export situation remains difficult. Overseas sales of every significant dairy product but cheese are down so far this year, and as a share of U.S. dairy production, exports thus far have fallen three full percentage points below the levels of 2018. But stronger world prices, particularly for dry milk ingredients, help strengthen domestic prices, even when exports are down. That remains good news for U.S. producers – but it also points us toward the work we need to do as markets slowly recover in the second half of this year.

It’s clear that, if U.S. dairy access to overseas markets were expanded, even more of our production could be shipped abroad, increasing the benefit to producers of greater demand for our products. We continue to press, with the White House and lawmakers in Congress, on the need to restore trade with China and aggressively pursue other markets through trade negotiations with Japan, and a greater focus on new trade agreements around the world. We need the administration to support initiatives that seek to boost U.S. dairy-market share in emerging regions and develop new markets, so that domestic producers aren’t shut out of growing global demand.

Maximization of Dairy Margin Coverage program benefits also remains important as an extra boost for farmers who  will not be made whole by a recovery that’s more than a mirage, but still not a boom. It’s a positive development that more than one-quarter of all U.S. dairies have already signed up for coverage, but we will keep pushing  for maximum signup before it concludes Sept. 20. With aid levels already known for the first six months of the year, joining DMC is a no-brainer – but we are available to help with decisions such as whether to lock in coverage for five years at a lower premium or go year to year, as well as explain more technical details of the program.

And, as always, we need to devote time to make sure that positive momentum in consumer demand and world markets is furthered by making sure the marketplace is fair for dairy and dairy producers. That means heading off regulations that impose burdensome business costs. It also means encouraging new rules (or at the very least, enforcement of existing ones) that ensure that milk is called milk and imposters are called something else. These initiatives can sometimes pale next to an immediate financial crisis, but they create the longer-term market conditions that help milk thrive in the years to come.

Higher prices create a rising tide for all of dairy. For all our efforts we will be the first to acknowledge that federal aid is no substitute for a vibrant market that puts more money in a farmer’s pocket.  That’s why we’re working for a stronger marketplace, and for putting farmers in a better position to adapt to it and to shape it.

After five years, it will be gratifying to see distress lessen for producers. That will only make us stronger as we tackle the next set of challenges.

We invite you to participate in our Twitter #dairychat next Wednesday, August 7 from 1:00 – 2:00 PM EST. Our goals for the chat are to solicit input from our followers, engage co-ops and farmer members on a variety of topics and increase awareness about the work of our organization.

There are six questions that will be scheduled to go out every 10 minutes. Please tag your answers with Q1, Q2, Q3, etc. and use the hashtag “#dairychat” and make sure your profile is public so we can find your tweets. Here are the questions:

• Q1 (1:00 PM): What do you perceive as being the biggest challenge for U.S. dairy farmers today? #dairychat
• Q2 (1:10 PM): Where do you go to learn about what’s happening in the dairy industry? #dairychat
• Q3 (1:20 PM): What is the most effective way to engage lawmakers? #dairychat
• Q4 (1:30 PM): When you have a policy-related question or issue, where is the first place you turn? #dairychat
• Q5 (1:40 PM): What platforms do you use to share your dairy story? Which one do you find is most effective? #dairychat
• Q6 (1:50 PM):What message about dairy farming do you want lawmakers to hear? #dairychat

If you plan to participate, please RSVP here so we can monitor and amplify your tweets!

Last month, U.S. Department of Agriculture (USDA) and the Department of Homeland Security signed a Memorandum of Agreement that formally outlines how the departments will transfer ownership and operational responsibility for the National Bio and Agro-Defense Facility (NBAF) from DHS’ Science and Technology Directorate to USDA. When completed, NBAF will be a biosafety level-4 laboratory in Manhattan, Kansas – the only large-animal BSL 4 lab in the United States’ mainland- for the study of diseases that threaten both U.S. agriculture and public health. The state-of-the-art NBAF facility will replace the aging Plum Island Animal Disease Center in New York. USDA also released a document outlining USDA’s strategic vision for NBAF summarizing how NBAF will serve as a national biosecurity asset to protect human and animal health, food safety and the ag economy.

Under the terms of the memorandum, DHS retains responsibility for completing construction and commissioning of the $1.25 billion facility, while USDA will assume responsibility for all operational planning and eventual operation of the facility. DHS’ efforts are on schedule and on budget to complete construction in December 2020 and to complete commissioning in May 2021, when ownership of NBAF will be formally transferred to USDA. USDA does not currently have an operational and maintenance budget for the NBAF facility, so new funds will need to be authorized and budgeted to ensure it becomes the world-class animal disease research center that has been envisioned.

Contact: Jamie Jonker