In a little more than two months, dairy farmers from around the country will gather at the Arizona Biltmore in Phoenix, AZ for the 2013 annual meeting that NMPF hosts jointly with the National Dairy Promotion and Research Board (NDB) and the United Dairy Industry Association (UDIA). The meeting will be held November 11 – 13.

The joint annual meeting offers attendees several days of informative programming, in addition to opportunities to interact and network with dairy producers and industry leaders from across the country. Dairy producers, cooperative staff, Young Cooperators (YCs), industry suppliers, trade press, and others from within the dairy sector are all invited to attend.

Individual and group meeting registration, along with hotel reservations, can be made online at www.dairyevents.com. Although online registration is preferred, a registration form may also be filled out and submitted via mail or fax. Online, mail, and fax registration must be submitted with payment by Thursday, October 17. Visit www.nmpf.org/nmpf-joint-annual-meeting for more information.

In Mary Shelley’s classic 19th-century horror novel Frankenstein, all manner of troubles result after a scientist brings a dead human back to life. Today, the term “Frankenfood” is often used by activists to demonize genetically-modified plants. Attacks on the use of biotechnology in the 21st century are themselves coming back to life, after having been mostly dormant the past decade. Just as in the fictional account of Dr. Frankenstein and his monster, the real-life reinvigoration of the anti-GMO food movement is creating all sorts of new troubles for food producers. It’s as if the past 200 years of scientific progress and enlightenment are being cast aside by forces that focus on fear and demagoguery, not the facts.

It’s a bit puzzling why this issue is resurfacing, given that the production of genetically-modified corn, soybeans, cottonseed, and canola on millions of acres has been growing for more than 15 years, without a single food safety issue – not one – arising during this period of widespread use. There was an initial surge of criticism of biotech seeds in the late 1990s, and then the issue seemed to fade…until lately. The expensive and testy ballot initiative in California two years ago, over whether to require the labeling of foods using GMO ingredients, certainly gave new life to the issue. Similar recent state labeling proposals and popular referenda, along with efforts at the federal level to establish biotech food labeling, are adding fuel to the fire.

What’s new this time around is that anti-GMO groups are now attempting to target specific brands in the value chain, from processors to retailers to foodservice companies, urging them to repudiate the use of any GMO ingredients in their food supply. There’s no clear reason articulated as to why these products should be eliminated or targeted for labeling, other than vague insinuations about the fear of the unknown. This, despite the fact that biotech seeds and plants have been subject to rigorous scientific testing, review, and approval by government authorities worldwide.

So far, these efforts, led by groups such as GMO Insider, haven’t harvested any changes in behavior. But the consequences for livestock producers, including dairy farmers, would be severe if the question about how to produce food becomes focused on eliminating GMO seeds from the process.

Anti-GMO activists are seeking to drive a wedge between the decision-makers across the food production chain, since our complex system necessarily involves the unique choices of many individual suppliers. Food processors and marketers have little or no means of controlling or verifying the choices that go into the production of livestock at the start of the value chain. And for farmers, they have little to no ability to provide the types of often technical details that justify their decision to use GMO seeds as they raise cows and other meat, milk, and egg-producing animals.

The rationale for using modified seeds is clear: these plants help reduce soil erosion, increase the crop yield, reduce the amount and number of pesticides needed, and cut the carbon footprint of agriculture because less tillage requires less fuel. In a world where the population is growing, but arable land and fresh water are not, GMO seeds have a critically-important role to play in both the developed and developing world.

In America, these benefits have resulted in widespread adoption of GMO products. Today, 90+% of corn, soy, cottonseed, and sugar beets are genetically modified, meaning there are few remaining acres devoted to producing “traditional” feed crops. At the farm gate, the demand for GMO seeds is emphatic and undeniable. But at the grocery store, efforts to sow misunderstanding and harvest mistrust of GMO products are likewise undeniable. Witness the fact that retailer Whole Foods will spend the next five years verifying whether all of the foods it sells, including livestock products, were fed or produced with GMO ingredients.

This type of activism ensures that the issue will not quickly disappear. The use of social media to generate vocal opposition to certain food production tools, including GMOs, is likely to fan the flames in the future. But there’s good news as well as bad news here.

The fact that there’s a great deal of misinformation about food biotechnology is indeed a cause for concern, but it’s also an opportunity for those who understand and support the technology. The National Milk Producers Federation is working with other farm groups to share information about how genetically-modified food plants help increase crop yields and decrease chemical inputs including fertilizer and pesticides. Coalitions like the U.S. Farmers and Ranchers Alliance (through its FoodSource online tool) have devoted considerable resources to providing clear, fact-based resources that help dispel the misconceptions surrounding the use of GMO feeds.

As is always the case, the best proponents for a particular product are its practitioners – in this case, the farmers who grow and harvest the crops. Sixteen million farmers around the world use biotech crops, and not just in the U.S. The social media tools that farmers need to explain their choices will, in the future, be just as important as the technology itself that creates GMO seeds. That’s a great opportunity, and also an obligation we can’t hesitate to pursue.

Congress left Washington August 1st for a five-week recess, with the fate of the 2013 farm bill still very much up in the air. Prior to leaving town, House Republican leaders negotiated a farm bill nutrition title that raises to $40 billion the level of cuts to food stamp programs. This food stamp-only measure is likely to be voted on once the House returns Sept. 9.

The House has already passed a farm programs-only version of the farm bill, while the Senate’s farm bill contains both farm and nutrition programs. Prior to leaving on recess, the Senate named 12 conferees from the Agriculture Committee to meet with their counterparts in the House, once the House leadership names its set of conferees.

The August recess offers another chance for dairy farmers to tell lawmakers how important it is to pass a farm bill that includes the dairy policy reforms endorsed by the Senate in June. This message can be delivered in the coming weeks at August town hall and Congress-on-your-corner meetings, Labor Day parades, individual office meetings, and so forth.

Once Congress returns to Capitol Hill after Labor Day, the time frame in which to pass a compromise bill is limited. Many farm programs, including the MILC program, expire September 30th. Further complicating things, the current agriculture appropriations measure expires the same day.

The price support program is authorized through December 31st, after which permanent law likely would be activated, potentially resulting in much higher support levels for a variety of farm commodities, including milk.

3 Key Messages for Legislators in August

Here are three key reasons why Congress must enact the Senate dairy reform provisions over those in the House bill:

• The Senate provides an effective dairy safety net at low cost, while the House does not. The House bill encourages milk supplies to build up and prices to plummet. Without a market stabilization program, the House margin insurance plan will threaten the viability of dairy farming.
• The Senate dairy title is fiscally responsible, while the House version is not. The House bill creates a new, open-ended dairy subsidy. Taxpayer costs would have been $1 billion higher under the House bill, had it been in effect over the last four years.
• Contrary to misleading statements from dairy processors, the Senate dairy provisions will not hurt consumers. Had it been in effect between 2009 and 2012 the Senate bill would cost the average American family only 25 cents extra per year for dairy products.

After a promising start in 2013, efforts to reform America’s immigration policies have stalled in the House of Representatives, and frustration is beginning to spread in the organizations that have worked on the issue, from agriculture, to the business community, to religious groups.

Democrats have said immigration reform should include a path to citizenship for undocumented immigrants, but many Republicans have said they will not support legislation containing such a provision. Instead, House Republicans are pursuing a number of smaller bills, each addressing a piece of the puzzle, including border security, agriculture workers, and high-skilled visas.

Majority Leader Eric Cantor (R-Va.) and Judiciary Committee Chairman Bob Goodlatte (R-Va.) are leading the immigration reform efforts, including a bill to legalize undocumented young people who came to the U.S. as children. But their efforts do not include any easy path to legalization for their parents, or any other currently undocumented workers. A seven-member bipartisan group in the House has been working for several months on comprehensive legislation with a path to citizenship, but they haven’t been able to find common ground on all issues, including how to deal with the extent to which those affected by immigration reform will be treated under the new healthcare reform law.

Rep. Cantor has said the House will hold a series of votes at some point, but he hasn’t been clear on the timing for them. Rep. Paul Ryan, Chair of the Budget Committee, has said the House will vote this fall on several reform components.

Since the Senate has already passed a comprehensive immigration reform bill, the ball is in the House’s court. The majority of Americans strongly believe that immigration reform must be dealt immediately, and that any legislation should address border security, currently undocumented workers, and the future flow of new workers. The process will continue this fall once Congress returns from its August recess.

NMPF’s campaign to reposition the REAL® Seal program continued in July, with a big push to garner visibility on Facebook, where in less than two months, the RealSealDairy page has earned nearly 50,000 fans.

The Facebook site is one of three elements to create stronger consumer awareness for the Seal, and where and why it is used by dairy companies. The other two are blogger outreach, and a more consumer-focused website, www.realseal.com. The blogger component of the campaign connects bloggers writing about food, health and family, with farms and dairy products, establishing why products with the REAL® Seal are a desirable choice for their recipes.

The revamped REAL® Seal website also has new consumer-friendly information about the Seal. And through the month of August, it features a naming contest where people can submit recommendations for what to name the animated REAL® Seal logo that greets those who go to the website.

Another new educational tool for companies using the Seal is a short video that’s available on YouTube. The video summarizes the NMPF-designed campaign, and how it will connect a new generation of American consumers with dairy products displaying the Seal.

Of the 124 requests for export assistance that Cooperatives Working Together (CWT) received in the month of July, it accepted or had its counter offers accepted on 67. Forty were for cheese exports totaling of 8.755 million pounds, and 27 were for butter exports totaling 8.879 million pounds. With large inventories of cheese and butter hanging over the market, moving these quantities should help alleviate some of the pressure growing inventories are causing.

For the first seven months of 2013, CWT has helped member cooperatives to sell 75.7 million pounds of cheese and 61.3 million pounds of butter. These products are going to 34 countries on all six continents, and it will all be shipped in 2013. On a milkfat basis, that is the equivalent of 2.1 billion pounds of milk, nearly 400 million pounds more than USDA’s latest projected increase in 2013 production over 2012 of 1.7 billion pounds.

As it is designed to do, CWT’s Export Assistance program helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the farm milk used to produce them.

Edward Gallagher, head of risk management for Dairy Farmers of America, represented NMPF at a July 25 meeting of the Commodity Futures Trading Commission (CFTC)’s Agricultural Advisory Committee.

The five-hour meeting was the first for the panel in two years. The committee met at CFTC’s Washington headquarters to discuss implementation of the Dodd-Frank Wall Street reform law and other issues.

Gallagher raised several issues of concern to dairy farmers, including the need to exempt forward contracts from rules covering options trading, and relief for farmers from having to buy new financial entity identification numbers, known as Legal Entity Identifiers or LEIs, annually.

Gallagher said the CFTC staff was sympathetic on forward contracting and that former CFTC Commissioner Michael Dunn, who also attended the meeting, picked up on his concerns over LEI purchases.

Gallagher added that CFTC Chairman Gary Gensler participated in the entire meeting and wanted to learn more about issues affecting farmers. “I was very much impressed with his interest in our issues,” Gallagher said. “I believe he is really trying to limit Dodd-Frank’s impact on farmers.”

A coalition of more than 70 members of Congress recently sent a letter to U.S. Department of Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman urging them to put a high priority on achieving a positive outcome for the U.S. dairy industry in the final Trans-Pacific Partnership (TPP) trade agreement. The negotiations have been ongoing for the past several years.

The members of Congress were appreciative of the opportunities the TPP agreement would create for the U.S. dairy industry. However, they also voiced concern regarding market access with Canada and Japan, and market concentration with New Zealand, and stressed that those issues would need to be addressed in any final agreement.

The Consortium for Common Food Names (CCFN) condemned the European Union’s decision last month to delay implementation of its Free Trade Agreements (FTAs) with both Costa Rica and El Salvador – a move the EU made to pressure its trading partners to approve certain geographical indication (GI) applications that had been filed in those Central American markets.

“This heavy-handed action by the European Union amounts to nothing more than extortion and clearly demonstrates that the provisions in its FTA with Central America that call for independent internal review of GI applications are simply intended to be pro forma approvals of EU GIs,” explained Jaime Castaneda, CCFN Executive Director. “This is despite the negative effect that confiscation and monopolization of well-known terms such as ‘parmesan’, ‘provolone’, ‘fontina’, ‘gorgonzola’ and others would impose on the local companies that had already been producing these products in those markets for many years, as well as the harmful impacts on other trading partners using these common food names.”

The FTA between the EU and Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) included provisions that required a list of GIs (including many common food names) to be evaluated by each country prior to approval. In keeping with this obligation as well as with its pre-existing obligations to other trading partners, Costa Rica and El Salvador published several of these applications for comment by interested parties, as is standard procedure with requests for new GIs or trademarks.

CCFN called on the EU’s trading partners to resist the EU’s efforts to force them to prohibit usage of common food names, and called for continued unrestricted usage of these terms of importance to many food producers around the world.

Even while most members of Congress are getting ready to head back home for a long August recess, it’s getting to be crunch time in Washington where the Farm Bill is concerned. Leaders in the House and Senate will be conferring in the coming weeks, both formally and informally, about how to iron out the differences between the farm bill versions that passed earlier this summer. Dairy policy will be one noticeable point of contention. The choice about which way to go will come down to whether lawmakers want to move forward, or repeat the unfortunate past.

Both the Senate and House farm bills replace the long-standing programs that processors have advocated eliminating: the MILC direct payment program, the price support program, and the Dairy Export Incentive Program. With NMPF’s endorsement, these programs are not going to be resurrected with a new farm bill.

In place of these ineffective programs, both the Senate and House bills establish a form of margin insurance, allowing farmers to use risk management tools to protect themselves against low milk prices, high feed costs, or the combination. The Senate’s bill couples margin insurance with market stabilization; the House does not. So, the critical question is whether margin insurance, on its own, will be a sustainable, affordable dairy policy. History tells us the answer is no.

Some still involved in the dairy business today will recall the history lesson that I’m imparting. In the late 1970s, Congress and the U.S. Department of Agriculture boosted the level of the price support program significantly. By 1980, it was hard to lose money milking cows. Production exploded in response. Absent any means to mitigate milk output, a white sea spilled forth, for which there was no commercial market. By the mid-1980s, the USDA was buying 14% of the nation’s milk output.

And the cost of this well-intentioned but misguided dairy program was astronomical. From 1977-79, price support costs averaged $247 million per year. By 1981-83, program costs averaged $2.2 billion…nearly 10 times higher. It took a series of efforts, including the use of a diversion program, a national promotion checkoff, and a whole herd buyout, to get costs under control.

Thus, the debate this summer over whether to use market stabilization to disincentivize milk production when margins are poor, as featured in the Senate’s Dairy Security Act, is not merely an academic exercise. We’ve seen this show before. The wrong market signals – or in the case of the House bill’s Goodlatte-Scott program, no signals at all – will have costly and far-reaching consequences.

In addition to added costs to taxpayers, farmers would suffer painful, prolonged periods of low margins. Making matters worse, farmer-owned cooperatives would face a huge logistical and economic burden balancing the market, in the face of a chronic oversupply of milk from those taking advantage of a government-sponsored, 1970s-style production boondoggle.

We’ll know more after Labor Day about how the question will be answered regarding which path Congress will choose. It’s been said that those who forget history are condemned to repeat it. Most in Congress are unfamiliar with the past 35 years of dairy program history. Shame on those of us, who have better memories, if we don’t remember and share history’s lessons at this crucial point in time.

Stress Importance of Trade in Safe Foods

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) applauded U.S. Vice President Joe Biden’s remarks during a speech yesterday in India calling for expanded trade between India and the United States. The vice president also pointed to the need to negotiate and work through barriers to market access, among other trade priorities.

“For far too long, a wide range of U.S. dairy products have been effectively locked out of the Indian market without sound scientific justification,” said Tom Suber, president of USDEC. “U.S. dairy products are sold in over 100 markets around the world and are well known for their high level of food safety. We look forward to renewed discussions with India on how to remove inappropriate barriers to market access for safe products.”

Jim Mulhern, chief operating officer of NMPF, agreed and adds, “As we focus on tearing down unwarranted trade barriers so that our industry can continue to grow, it is equally important to ensure that we also maintain a strong focus on food safety and product integrity. U.S. dairy products have an excellent track record in this area while India’s own government has found serious problems with a majority of its dairy products.”

In early 2012, NMPF called the U.S. Food and Drug Administration’s attention to a study conducted by the Indian Food Safety and Standards Authority that found that 68% of milk samples analyzed did not meet Indian standards. “Given these alarming findings, we believed it was important for FDA to determine if adulterated dairy products in India were entering the U.S. market,” Mulhern stated. “We are gratified that FDA agreed that concern is warranted and this summer put in place an import alert on certain dairy products from India.” The FDA import alert calls for the detention of specified dairy products from certain Indian exporters and requires further documentation to ensure that the products are complying with U.S. regulations designed to protect food safety.

“U.S. dairy exporters believe that trade between the United States and India can be mutually beneficial, particularly as India struggles to consistently meet its growing domestic dairy demand,” adds Suber. “As the U.S. and India reengage in talks aimed at improving bilateral trade, we must ensure that a focus on the importance of safe and accurately labeled food remains at the core of discussions on agricultural trade.”

 

The National Milk Producers Federation, 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 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies.

 

The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe.

From Jerry Kozak, President and CEO, NMPF:

“The farm bill passed today by the House of Representatives is seriously flawed, in that it contains the Goodlatte-Scott dairy amendment, as well as a repeal of permanent agricultural law.  Neither of these measures serves the best long-term interests of dairy farmers. The Senate, by contrast, overwhelmingly passed the complete Dairy Security Act, which the National Milk Producers Federation and nearly all dairy farmers enthusiastically supported.

“Nevertheless, today’s action means that there is still hope that a new farm bill can be passed in 2013. Without any progress toward a Senate-House conference committee, we were looking at yet another one-year extension of current programs, which is unacceptable. Today’s vote means that agricultural leaders now can work on improving the House bill and developing better dairy policy than what exists now, and what is contained in this House bill.

“The bill today is not the end of the process, but rather a means to a better end that we will continue working with lawmakers to achieve. NMPF appreciates all the efforts put forth by Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) to try to move a 5-year farm bill through the House of Representatives by bipartisan means last month. We are committed to working with these two champions for agriculture through the conference process in the coming weeks. We urge the conference committee to include the Dairy Security Act.”

 

The National Milk Producers Federation, 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 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies. Visit www.nmpf.org for more information.