There’s been no shortage of heated rhetoric on the presidential campaign trail in recent months about the impact of trade policy on America’s economy. Much of that language has been derogatory as the leading contenders in both the Democratic and Republican primaries express their opposition to the new Trans-Pacific Partnership (TPP) that was negotiated last year, and blame trade agreements in recent decades for costing America jobs.

Setting aside politics for the moment, the fact is that trade agreements, as with other forms of diplomacy, are a two-way street, involving significant compromises in search of a win-win outcome. They never produce black-or-white outcomes. The benefits, as well as the losses, can sometimes be hard to quantify.

But given the potential consequences of the TPP for our domestic dairy economy, National Milk, working with the U.S. Dairy Export Council, vigorously engaged in the years-long negotiations to protect and promote the interests of the U.S. dairy industry. We fought to the last minute of the last day of the trade talks in advocacy of a positive outcome for our members.

Once the final details were announced last fall, we spent the following several months weighing the overall potential impact of the TPP for our industry. Our verdict is that America’s dairy farmers and marketers will be better off with this agreement than without it.

At the same time, however, the still-pending trade agreement with the European Union is another story altogether, and it’s clear that, in the case of the Transatlantic Trade and Investment Partnership (TTIP), having no deal is better than what has been achieved to date.  More on that later.

If adopted, the TPP would be one of the largest trade agreements in decades, as it involves the United States and 11 other countries bordering the Pacific. When the TPP talks were initiated more than eight years ago with a smaller set of countries, our primary concern was the insistence by New Zealand – a prime mover behind the TPP – on unfettered access to our market, while the United States lacked a commensurate opportunity to increase its own dairy exports through the agreement. Fortunately, our prospects brightened when Japan and Canada subsequently joined the negotiations. While we sought significant new access into those markets, at the end of the day our negotiators were only able to achieve some modest new benefits for the United States. 

Taken together, the overall market opportunities in the TPP are neutral to positive for our industry. We avoided an unbalanced outcome that could have left America’s dairy farmers with far more imports and no new exports. There is also the likelihood of other Asian nations signing onto this agreement in the future and thereby continuing to expand the pie.

Just as important, the TPP contains new provisions to avoid future barriers that could hinder our exports. The agreement’s language on food safety issues, as well as common food names, should greatly reduce the opportunity for our TPP partners to create sudden and unwarranted barriers to trade. These features are among the primary benefits of an FTA, if they are implemented properly. 

In expressing support for the TPP, NMPF has emphasized that the fine print really matters. We are endorsing the outlines of the agreement, but will continue to insist that the terms agreed to need to be followed by the other countries in this agreement. We’ve seen some recent disturbing examples – such as Canada threatening to arbitrarily change its cheese standards to hamper U.S. milk protein exports – where our partners are trying to backslide on compliance with previous commitments. The U.S. needs to be continually vigilant so that doesn’t happen with the TPP signatories down the road.

Regrettably, the status of the still-evolving major European free trade agreement isn’t nearly as encouraging. The most important element of the transatlantic trade discussions – tackling the EU’s various nontariff constraints on U.S. dairy exports, including the inappropriate use of geographical indications – remains unresolved.  And the concern now is that with nine months left in the Obama Administration, there could be an effort to sweep these serious U.S. dairy sector concerns under the rug so that that the TTIP deal can be finished.  We have sent the unequivocal signal that such an outcome is a deal-breaker for our farmer members.

What’s lost in this election-year, silly season is that regardless of whether one country agrees to a free trade agreement with others, the overall forces of globalization will continue, as they have for decades. The world has gotten smaller.

Think of it as a highway where agreements like the TPP help to police the rules of the road. They enable us to avoid costly pile-ups by enforcing the rules. This is all the more important because when we produce 30 billion pounds more milk than we have a market for in this country, we are well past the point where we can ignore the seven billion people that live beyond our borders.

 

From Jim Mulhern, President and Chief Executive Officer, NMPF:

ARLINGTON, VA – “Today’s vote is a disappointment, but not a defeat for those of us seeking a strong, clear, national and rational standard for food labeling.

“Despite today’s vote, we believe a bi-partisan federal policy is within reach, based on discussions with Senate offices in the last few days. We are committed to working to bridge differences and get a compromise agreement through the Senate.

“Passage of a coherent food label disclosure law by Congress is the only logical approach in order to avoid the chaotic mess that would arise from leaving this issue up to the whims of 50 different states.”

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

ARLINGTON, VA – The National Milk Producers Federation Board of Directors yesterday approved changes to the National Dairy FARM (Farmers Assuring Responsible Management) Program to strengthen the effectiveness and credibility of its animal care standards.

Revisions to the FARM Program occur every three years and are based on input from farmers, veterinarians, and others involved in the FARM Program’s Technical Writing Group, NMPF’s Animal Health and Wellbeing Committee, and recommendations received through a public comment period. The revision process began in May 2015; the NMPF Board’s decision to approve the recommended revisions was the final step in the nearly 10-month process. The updates approved Tuesday during NMPF’s Board of Directors meeting will be reflected in version 3.0 of the program when it is implemented starting Jan. 1, 2017.

“The core of the FARM Program is the concept of continuous improvement,” said NMPF president and CEO Jim Mulhern. “Not only do dairy farmers in the program work hard to evolve and improve their practices over time, but we work hard to ensure that the FARM Program guidelines reflect the most up-to-date scientific research and advice from our technical experts.”

One outcome of the revisions is a greater emphasis on accountability among program participants. The advisory committees identified several FARM Program guidelines which they felt deserved heightened focus and attention. Such criteria include a greater emphasis on employee training, having a documented Veterinarian-Client Patient Relationship, updated protocols on euthanasia and non-ambulatory cattle, and the cessation of tail docking.

Though evaluations on the new version of the FARM Program won’t begin until January 2017, new resources and training materials will be available to program participants beginning this April to help prepare for the changes.

For a complete summary of all the changes made to the program, visit www.nationaldairyfarm.com.

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

ARLINGTON, VA – The National Milk Producers Federation voted Tuesday to support the Trans-Pacific Partnership (TPP) agreement, an historic pact between 12 countries containing features that will help America’s dairy farmers in the future.  The organization is now urging Congress to pass the agreement this year, even as it also registered concerns with another major trade pact being negotiated with Europe.

In addition to adopting a resolution of support for TPP, the NMPF board expressed its opposition today to moving forward with the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) in light of Europe’s continued refusal to remove barriers to U.S. dairy exports.

“Taken in its entirety, the TPP agreement is positive for the U.S. dairy industry,” said Jim Mulhern, president and CEO of NMPF.  “Although it achieves less than we wanted in terms of throwing open new markets in Japan and Canada, I am particularly pleased that we did not concede to a huge surge in new imports.” NMPF’s position reflects a detailed assessment of the entire package conducted by the staffs of both NMPF and the U.S. Dairy Export Council (USDEC).

The TPP agreement also contains important provisions designed “to knock down other trade barriers, such as food safety disputes, and to challenge the growing number of restrictions limiting trade of foods with commonly-used names such as parmesan,” Mulhern said.

Despite its endorsement, in order to make sure that U.S. dairy farmers and exporters receive the full benefit of the package, NMPF said U.S. government agencies must take concrete steps to ensure the diligent enforcement of the agreement’s provisions with America’s trading partners. The NMPF resolution also urged the U.S. to establish proper enforcement measures regarding access granted to the domestic market, and monitor compliance with those measures after the TPP is implemented.

The board also formally registered its view that given the lack of significant export inroads in the agreement, the TPP market access package should not be used as a template for future U.S. trade agreements.

NMPF’s board weighed several factors in making its decision to support the TPP agreement.  Among these were:

• The net effect on the U.S. dairy industry of all TPP market access concessions is expected to be neutral to slightly positive, with the most notable U.S. export gains coming in Canada and Japan, along with somewhat smaller increases in new imports.
• There is the potential for the agreement to expand over time to include additional participants in Asia, particularly nations that currently – or will soon – have trade agreements with major dairy competitors. It is imperative that the U.S. remain a key player in the region as its works to expand future U.S. exports.
• In the areas of sanitary and phytosanitary (SPS) provisions, the TPP features groundbreaking new commitments that should help keep in check the possibility for participating countries to erode existing and future market access for U.S. dairy exporters through unjustified regulatory determinations.
• The TPP contains new Geographical Indications (GI) provisions establishing a more equitable international model on registering GIs for food. The text does not directly block the EU from inappropriately restricting the use of common food names important to global trade, but it does significantly strengthen the ability for the U.S. to combat barriers when they arise, thereby helping preserve market access opportunities for U.S. companies.

At the same time it voted to support the TPP, the NMPF board also went on record to oppose any further advancement of the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) negotiations that does not include fully addressing U.S. dairy export concerns related to SPS, TBT and common name issues.

Mulhern indicated that at the present time, “the negotiations have not demonstrated concrete progress towards addressing food safety challenges and other non-tariff trade barriers. In addition, we remain extremely concerned” about the EU’s efforts to claw back common food names for its members.  The failure to resolve these issues in the TTIP “would exacerbate the existing U.S. dairy trade deficit with the EU of over $1 billion,” Mulhern said.

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more on NMPF’s activities, visit our website at www.nmpf.org.

In the department of “those who forget history are condemned to repeat it,” we have today the matter of the labeling of foods made with ingredients derived through biotechnology.  Many of us in the dairy industry have lived this history during the past 20 years, and we need to avoid repeating it.

The food industry is deeply apprehensive about Vermont’s new food labeling law mandating a disclosure on foods made with genetically modified (GM) ingredients, which will take effect on July 1.  Although there are significant exceptions to the law, the product lines that would be regulated fill the shelves of America’s grocery stores.  And while there have been extensive efforts to battle it in court, so far the legal system has not ruled definitely on the case.  So right now the only avenue is to have Congress step in and preempt Vermont’s labeling law – and other state laws that could surely follow – from taking effect.

Until the advent of bio-engineered foods, the issue of state vs. federal labeling had long been settled. Recognizing our national marketplace and the interstate movement of goods, food labeling has historically been the regulatory purview of the federal government.  This is the only logical approach in order to avoid the chaotic mess that would arise from wildly different labeling requirements that could crop up if left to the whims of 50 different states.

Ironically, the current debate over the state regulation of biotech food labeling claims first emerged in the milk business in the mid-1990s, when the FDA’s approval of recombinant bovine somatotropin as a production tool for dairy farmers sparked a huge outcry.  In a foreshadowing of today’s debate over GM crop use, back then activists attacked rBST as unnatural, and urged several states to require dramatic label disclosures or even outright bans on the use of the product. It was the first sign of things to come, and even in the days long before social media and the internet, it was noisy, messy and polarizing.

When the federal government completed its scientific review of rBST and approved it for commercial use in 1994, the U.S. Food and Drug Administration stipulated that using rbST didn’t warrant a mandatory label disclosure, since the hormone produced through the use of biotechnology was the same as that produced naturally in the cow. The agency determined there were no health or safety issues with the use of rBST, and therefore no reason to require labeling. While “absence claims” about not using rbST in the milk supply were permitted – and we still see them today across the dairy case – those declarations have to be consistent with the facts and grounded in science. 

The dairy case became, in effect, a Cold War battleground over what can and cannot be asserted about how food is produced. After 20 years, we continue to see an uneasy truce in the grocery aisles, but at least it is consistent from coast to coast.  Marketers that want “hormone-free milk” can’t describe it as such, because that’s not a factual statement. All milk – from humans, cows and all mammals – contains hormones.  They can tout their “farmers’ pledge not to use artificial growth hormones,” but such labeling must be accompanied by another statement that no difference is shown in milk from cows treated with rbST compared to those not using it. 

All of this is relevant to the latest battle over food labeling.  The activists driving the state-level labeling campaigns and opposing our federal preemption efforts are driven by a desire to stigmatize foods produced through biotechnology. With not a single documented study showing any health or safety issues from the consumption of GM foods – despite millions and millions of servings consumer worldwide over the last 20 years – one would think this issue would be put to rest. But there’s clearly money to be made by conjuring fears in consumer’s mind. And there’s nothing like a scarlet letter on a food label to instill that fear.

Yes, consumers should have access to information about the sources of their food, but singling out GM traits for mandatory on-pack labeling from among many other potential disclosures is capricious.  Federal food law focuses on meaningful nutrition and food safety information on the label, not every potential variation in food sourcing.

Agriculture Secretary Tom Vilsack has played the role of peacemaker in trying to broker a compromise approach that will satisfy both sides.  To his credit, he realizes that this effort must be settled at the national level. 

The House of Representatives has already passed a law allowing voluntary GMO usage disclosures, similar to what we have now in the dairy sector on rbST use.  Those products that don’t source from GMO supplies can assert that fact on their labels, with a greater manner of consistency than what is already happening now. 

Meanwhile, the Senate has recently begun work on a similar piece of legislation, as the clock ticks towards July 1^st.  The Senate Agriculture Committee, chaired by Sen. Pat Roberts of Kansas, has just approved a simpler version of the House bill that basically preempts state laws like Vermont’s, and allows the USDA to establish a national labeling framework. 

Given the limited amount of time for Congress to work on this or any other issue in 2016, the window of opportunity to get something done on Capitol Hill is narrow. But the alternative to federal labeling regulation is a mess of confusing state requirements that shed much more heat than light.  As political as food production has become across America, we need lawmakers to set a national policy based on science and evidenced-based food safety, not activist-driven agendas.   

Two decades’ worth of history in the dairy business have taught us a lesson, if only Washington is listening.

NMPF’s forecast for 2016 MPP margins – based on early March milk and feed futures prices – indicates that margins in the first half of 2016 may dip below the $8 threshold in the spring, before strengthening in the latter half of 2016. As evidenced by the wide confidence interval, a high degree of uncertainty remains in milk and new crop feed prices.

The 2015 edition of NMPF’s Dairy Data Highlights, packed with 53 tables, 20 graphs and other resourceful information, is available for purchase by members and non-members alike.  The 50-page booklet features detailed data on all aspects of milk production, federal milk marketing orders, sales of milk and dairy products, farm and retail prices, and dairy export and import information.

Dairy Data Highlights has been published annually by NMPF for more than 60 years. A must for anyone involved in milk production, it is available to NMPF member cooperatives and associate members for $7.50 per copy. For orders larger than 10, it costs $5.00 per copy. Non-members can purchase a booklet for $10. Orders larger than 10 cost $7.50 per copy.

Also included in the booklet, among others:

• National milk production data going back to 1925
• Cow numbers, farms and herd size data going back to 1950
• Milk production and prices, production‐per‐cow, cow numbers and dairy herd by state, with comparative data from earlier years
• Annual wholesale prices for butter, cheddar cheese, and nonfat dry milk from 1975
• A short glossary of dairy industry terms and useful conversion factors for milk and dairy products

If interested in purchasing a copy, please visit the NMPF website or contact Khadija Gibson-White.

In December, the National Dairy FARM (Farmers Assuring Responsible Management) Program launched its new website and FARM Proud Blog. Since then, both have been used to share important information and FARM Program successes. The FARM Proud Blog has also been promoted on the new FARM Facebook, Twitter and Instagram accounts.

This year, the FARM Program plans to share cooperatives’ and members’ stories on animal care. Recently, the FARM Proud blog featured two standout examples of these stories: one authored by upstate New York dairy farmer Jessica Ziehm on her family farm’s transition away from tail docking, and last week’s story about the recent El Nino rains and the animal care challenges associated with inclement weather, written by California farmer Richard Wagner.

The FARM Program is looking to fill the blog’s pages with stories like these that discuss the dairy community’s commitment to animal care — both the successes and the challenges. This is also an opportunity to spotlight cooperatives’ use of the program, and members of the NMPF staff are in the process of contacting some to interview about their commitment to FARM to be featured on the FARM Proud blog. 

NMPF continued its ongoing efforts to promote food safety by asking state lawmakers in February to reject bills that would liberalize the sale of raw milk products, citing the increased risk of foodborne illness outbreaks in states that permit broader sales of the unpasteurized products.

NMPF, in collaboration with the International Dairy Foods Association (IDFA), took aim at bills in the Virginia and West Virginia state legislatures that would allow raw-milk sales more broadly, loosening regulations requiring pasteurization for public health. In addition to urging a rejection of West Virginia Senate Bill 387, NMPF criticized two measures in Virginia, House Bills 62 and 619.

On March 4, West Virginia Gov. Earl Ray Tomblin signed Senate Bill 387, legalizing “herd sharing,” an arrangement in which people buy shares of the animal so they can receive milk from it.

Both NMPF and IDFA had asked Tomblin to veto the bill, writing that “while choice is an important value, it should not pre-empt consumers’ well-being.” Tomblin vetoed a similar bill last year.

From 1993 to 2006, there were 73 known foodborne illness outbreaks associated with unpasteurized dairy products, according to the Centers for Disease Control and Prevention. Of these outbreaks, three-quarters occurred in states where raw milk sales are legal, suggesting that state legislators who support relaxing regulations may unintentionally be setting up their states for more foodborne illness. Two-thirds of the outbreaks involved children.  The CDC also found that unpasteurized milk was 150 times more likely to cause illness than pasteurized milk.

“No matter how carefully it is produced, raw milk is inherently dangerous,” NMPF and IDFA said in their letters to Virginia lawmakers. The organizations also reminded legislators that “no claim related to the health benefits of consuming raw milk has been substantiated in any of the medical literature.”

The groups emphasized that only 1 or 2 percent of foodborne outbreaks are attributed to dairy products, but over 70 percent of those dairy outbreaks have involved raw milk and raw milk cheeses.

More than 23,000 dairy operations representing 162.3 billion pounds of milk enrolled in MPP for the 2016 coverage year, according to recently released data from the U.S. Department of Agriculture Farm Service Agency. The overwhelming majority of farms enrolled in MPP did so at the base level of $4.00/cwt. catastrophic coverage.

Given USDA’s forecast for 211.9 billion pounds of milk produced in 2016, the milk enrolled in MPP represents 77 percent of the U.S. milk supply. Additionally, based on the number of licensed dairy operations in 2015, 54 percent of licensed dairy operations are participating in MPP for 2016. These participation rates are down slightly from last year, as 80 percent of the U.S. milk supply and 55 percent of licensed dairy operations participated in MPP during 2015.

Of the participating farms, 18,000 purchased the $4.00 catastrophic coverage while just over 5,300 farms purchased a higher level of coverage.

Cooperatives Working Together members received 31 contracts in February to sell 3.95 million pounds of cheese, 2.54 million pounds of butter, and 5.59 million pounds of whole milk powder to customers in Asia, Central America, the Middle East, Oceania, and South America. The product will be shipped from February through August 2016.

Combined with the contracts member cooperatives captured in January, CWT-assisted transactions so far in 2016 total 8.23 million pounds of cheese, 5.4 million pounds of butter and 6.85 million pounds of whole milk powder going to customers in twelve countries on five continents. The sales are the equivalent of 247.519 million pounds of milk on a milkfat basis.

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