NMPF’s Director of Trade Policy Tony Rice tells Dairy Radio Now listeners how NMPF is working to prevent a loss of milk powder exports to Colombia, which is taking unjustified steps to raise tariffs on U.S. products. Rice also provides an outlook of the potential impact on the dairy sector if a threatened labor strike materializes next week in Eastern and Southern ports.
Tag: dairy exports
NMPF’s Morris Discusses Colombia Trade Dispute
Shawna Morris, NMPF’s executive vice president for trade policy & global affairs, explains how Colombia moving to impose an additional tariff on U.S. milk powder exports is unjustified and unhelpful for dairy farmers and consumers in both nations. Morris speaks in an interview with RFD-TV.
U.S. defends dairy in Colombia
By Jaime Castaneda, Executive Vice President, National Milk Producers Federation
NMPF and the U.S. Dairy Export Council (USDEC) are working to preserve market access for American dairy exports to Colombia following the Colombian government’s abrupt July 5 decision to initiate a politically driven “subsidies and countervailing measures” investigation into milk powder imports form the United States.
The move has little to do with U.S. milk and everything to do with Colombia’s domestic politics. In an effort to reverse slipping popularity with voters, the Colombian government has decided to misuse trade tools usually reserved for private industry to counter legitimate damage from “dumped” product sold at below market rates. In contrast to this, Colombia’s government has instead launched this case on its own, alleging that U.S. milk powder exports from 2020 to 2023 were unduly subsidized by U.S. government programs and damaged Colombian dairy producers. Unfortunately, due to the investigation’s political nature, the Colombian government could impose tariffs on imported U.S. milk powder products as early as September 16. That would be certain to stifle trade to the market.
NMPF and USDEC have been working with U.S. exporting cooperatives and companies, legal teams, and the U.S. government to submit a strong, data-driven defense proving that this investigation is without merit.
In their counterarguments, NMPF and USDEC note that the investigation is baseless for many reasons, including:
- Product comparison: Imported U.S. milk powder and domestically produced Colombian fluid milk are distinct products with different physical characteristics and end uses, making them non-comparable.
- Subsidy misinterpretation: The Colombian government incorrectly assumes that U.S. dairy producer support directly benefits milk powder manufacturers, which is not the case.
- Lack of causal link: U.S. milk powder imports haven’t caused any damage to the Colombian dairy industry. Evidence simply doesn’t exist.
Because of the political nature of this investigation, a fair result is not guaranteed, which means that U.S. government intervention may be necessary. NMPF and USDEC are urging U.S. Trade Representative Katherine Tai and U.S. Department of Agriculture Secretary Tom Vilsack to use all available tools to respond forcefully should Colombia impose tariffs on U.S. milk powder imports despite the lack of evidence meriting such a result.
Congress is also paying attention. A letter sent by the bipartisan leads of the U.S. House of Representative’s Agricultural Trade Caucus to the Colombian Ambassador to the United States highlights the U.S. dairy industry’s long-standing commitment to work with its Colombian counterparts and encouraged the two industries to work together to strengthen the dairy sectors in both countries instead of pursuing meritless investigations.
Colombia’s investigation will play out over months, starting with preliminary results and potential provisional measures as early as September 16, followed by a public hearing and additional comment periods.
At stake is $70 million in annual U.S. milk powder exports to Colombia.
While not a trivial amount by any means, this investigation could also set a dangerous precedent for like-minded governments to imitate. Over the past several years, protectionist sentiments have grown around the world, and Latin America is no exception. The region has become a battleground in the effort to preserve existing trade opportunities, flaring up from Peru and Ecuador to Brazil and Mexico.
While cooperating with the investigation, NMPF and USDEC continue to engage with policymakers and allied organizations to seek a positive conclusion. Regardless of which way this investigation turns out, it’s important for the United States to respond forcefully and let its trading partners know that such maneuvers will not be tolerated.
This column originally appeared in Hoard’s Dairyman Intel on Sept. 5, 2024.
NMPF Board Building a Better CWT Program
- Member-driven proposals potentially expand exports
- Plan gains support across memberships
A painstaking process toward an improved, renewed Cooperatives Working Together Program has highlighted 2024, with NMPF staff experts, member cooperative economists, and dairy farmer leaders from NMPF members together re-envisioning a critical program for boosting U.S. dairy exports, with NMPF’s Board of Directors on Aug. 22 approving a series of proposed improvements to CWT.
Proposed changes include expanding product eligibility to all cheese varieties, extended shelf life/aseptic fluid milk, evaporated/condensed milk and ice cream; piloting programs offering targeted support for value-added skim milk powder sales to Southeast Asia and cheese sales to Central America and the Caribbean; increasing bid flexibility to extend eligible delivery periods, and removing volume limits on a trial basis; providing increased insight on market dynamics driving support levels with participating cooperatives; and creating an advisory group to provide strategic direction.
The adjustments will be considered at NMPF’s annual board meeting in Phoenix in October and comes after months of advisory, member-led meetings and discussion. Meanwhile, the current program continues to deliver results for U.S. dairy farmers and cooperatives.
CWT member cooperatives secured 49 contracts in August, adding 5.2 million pounds of product to CWT-assisted sales in 2024. In milk equivalent, this is equal to 44.8 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, Middle East-North Africa and South America and will be shipped from August 2024 through January 2025.
Exporting dairy products is critical to the viability of dairy farmers and their cooperatives across the country. Whether or not a cooperative is actively engaged in exporting cheese, butter, anhydrous milkfat, cream cheese, or whole milk powder, moving products into world markets is essential. CWT provides a means to move domestic dairy products to overseas markets by helping to overcome U.S. dairy’s trade disadvantages.
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.
NMPF’s Castaneda on Colombian Trade, FMMO
NMPF Executive Vice President, Policy Development & Strategy Jaime Castaneda discusses potential dairy trade issues between the U.S. and Colombia, the latest on FMMO updates, and common food names with host Jesse Allen on this Agriculture of America podcast.
NMPF Board to Consider Refreshed CWT Program in August
NMPF’s Senior Vice President of Member Services, Chris Galen, outlines for Dairy Radio Now listeners the process underway in 2024 to revise the Cooperatives Working Together program. Since 2003, CWT has served as a farmer-funded self-help program; now, farmers and coops are considering a package of changes to CWT to make it even more impactful in helping sell U.S.-made dairy foods in foreign markets. Galen reports that the NMPF Board of Directors will vote on those improvements on Aug. 22.
NMPF, USDEC Urge U.S. Government to Preempt Colombian Trade Barriers
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) are asking the U.S. government to prepare a plan to “leverage all available tools” should Colombia move forward with imposing countervailing tariffs on U.S. milk-powder exports, making that request in a letter sent Friday to U.S. Trade Representative Katherine Tai and U.S. Agriculture Secretary Tom Vilsack.
NMPF and USDEC also commended a complementary Congressional letter sent Friday to Colombian Ambassador to the United States Luis Gilberto Murillo in response to the investigation. Led by Reps. Jim Costa, D-CA, Adrian Smith, R-NE, Jimmy Panetta, D-CA and Dusty Johnson, R-SD, the letter highlights that the U.S. and Colombian dairy industries should be working collaboratively to promote policies that strengthen the dairy sector instead of launching “damaging protectionist investigations.”
Colombia’s recent decision to initiate an unwarranted Subsidies and Countervailing Measures investigation into U.S. exports of milk powder is a tariff threat without merit, USDEC and NMPF say in the letter, noting that no causal link exists between U.S. milk powder exports and the injury alleged by Colombian officials. The letter also explains that imported milk powder products and domestically produced fluid milk are not interchangeable ingredients in a food manufacturing facility.
“The U.S.-Colombia Free Trade Agreement has been a success story for American and Colombian producers and consumers alike,” said Krysta Harden, president and CEO of USDEC. “Initiating unfounded investigations undermines this progress and is a step backward in our trade relationship. We appreciate the Ag Trade Caucus leaders for recognizing this investigation for what it is – baseless. USDEC commends the U.S. interagency team for their extensive work on the ongoing investigation and will continue to work closely with the U.S. government and Congress as the legal process moves forward.”
“NMPF appreciates Representatives Costa, Smith, Panetta and Johnson for standing up for American dairy producers’ market access rights,” said Gregg Doud, president and CEO of NMPF. “We will continue working with the U.S. government to ensure this unsubstantiated investigation doesn’t set a dangerous precedent.”
NMPF, USDEC Expand Strong Partnerships in South America
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) advanced a pair of partnerships in South America this week. The organizations signed a Memorandum of Understanding (MOU) with Abraleite, a prominent Brazilian milk producers association, and renewed an existing MOU with Argentine farmer organization Sociedad Rural Argentina (SRA).
The agreements enhance cooperation between the United States and South American dairy industries, focusing on critical areas such as the economic and social significance of the dairy sector and the removal of trade barriers affecting both producers and consumers.
“Our engagements in South America this week underscored the shared challenges and opportunities facing dairy producers and processors in the United States, Brazil and Argentina,” said Krysta Harden, president and CEO of USDEC. “Partnerships with likeminded organizations have been proven to be crucial as we strive to promote the benefits of dairy on the international stage and tackle attempts to erect trade barriers throughout the Americas.”
The updated MOU with SRA includes the launch of a Sustainability and Trade Taskforce, an initiative to provide a balance to European policies that could unfairly impact producers in the United States and Argentina. Objectives include demonstrating that livestock production is a cornerstone of sustainable food systems and advocating for science-based trade policies.
“Dairy producers throughout the Western Hemisphere confront many of the same issues and priorities,” said Gregg Doud, president and CEO of NMPF. “We look forward to working alongside Abraleite and SRA to advance policies that promote dairy and limit trade barriers.”
The two MOUs follow a partnership signed on June 4 with the Colombian dairy organization Asoleche. The partnership formalized USDEC and NMPF’s prior collaboration with Asoleche, demonstrating the value in focusing on areas of common ground, in contrast to the politically driven countervailing duty investigation into U.S. milk powder exports recently initiated by the Colombian government.
In addition to the Latin American partnerships in Argentina, Brazil, and Colombia, USDEC and NMPF have also established MOUs with the Inter-American Institute for Cooperation on Agriculture (IICA) and the Chilean Federacion Nacional de Productores de Leche (Fedeleche).
NMPF Advances Dairy Export Prospects in South America
NMPF’s Jaime Castaneda joined USDEC leadership and staff in Brazil July 28-31 to explore market opportunities and address trade barriers for U.S. dairy products. While there, Castaneda met with key executives, agribusiness leaders, and policymakers in São Paulo and Brasília, Brazil. The discussions in Brazil focused on the quality, safety, and sustainability of U.S. dairy products and the tariff and nontariff barriers to reaching the market.
The group then traveled on to Argentina for additional meetings Aug. 1-3.
A key focus of the mission was the signing of two Memoranda of Understanding (MOUs). NMPF and USDEC established a new MOU with Abraleite in Brazil to foster collaboration and strengthen trade relationships. The organizations also plan to renew an existing MOU with Sociedad Rural Argentina, continuing their commitment to cooperation and support for U.S. dairy exports and a unified voice at international gatherings.
NMPF Grows Latin American Network
Strengthening its trade and dairy priorities in Latin America, NMPF and USDEC signed a June 4 memorandum of understanding (MOU) with the Colombian Association of Dairy Industry (Asoleche).
The agreement details objectives that the U.S. and Colombian industries will undertake to improve knowledge sharing and eliminate trade barriers between the two countries. The MOU complements similar agreements USDEC and NMPF have made throughout Latin America, including with Sociedad Rural Argentina, the Inter-American Institute for Cooperation on Agriculture (IICA) and the Chilean Federacion Nacional de Productores de Leche (Fedeleche).
Gregg Doud, president and CEO of NMPF, said, “The U.S. and Colombian dairy industries share many of the same values and priorities. We’re excited to work alongside Asoleche to promote positive, sound policies that build a stronger dairy industry in the Americas and internationally.”
NMPF Works to Fortify the Export Supply Chain
NMPF is offering its support and assistance for a pair of supply chain bills offered in June that address shipping container break-ins that are damaging dairy shipments.
Organized crime groups are indiscriminately breaking into intermodal containers traveling on rail from the Midwest to West Coast ports searching for high-value products, with dairy shipments frequently suffering collateral damage. The break-ins have created significant food safety and quality concerns, as well as financial costs for shippers who have no recourse to insurance claims.
Working with a coalition of industry stakeholders, NMPF helped secure $2 million within the FY25 House Homeland Security Appropriations bill dedicated to tackling the break-ins. NMPF also coordinated with and supported the June 25 introduction of the Safeguarding our Supply Chains Act. Led by Representative David Valadao, R-CA, and Brad Schneider, D-IL, the bill would authorize $100 million for fiscal years 2025-2029 to create a crime coordination center within Homeland Security Investigations and an interagency taskforce. The division would serve as a central command for shippers to report break-ins, providing direction to the agency on hot spots to target policing efforts.
NMPF Makes Progress on Future Direction of CWT Program
NMPF’s Senior Vice President Chris Galen explains for Dairy Radio Now listeners the series of changes that NMPF is reviewing to improve the effectiveness of its self-help program, Cooperatives Working Together. A member task force has been assessing ideas to revamp the program and expand its export activities starting in 2025.
