The 2016 joint annual meeting of the United Dairy Industry Association (UDIA), National Dairy Promotion and Research Board (NDB) and National Milk Producers Federation (NMPF) was held Oct. 31-Nov. 2 in Nashville, Tennessee. More than 800 dairy farmers and industry representatives attending the event, getting updates on dairy policy and promotion programs.
MPP-Dairy needs to be fixed
In the NMPF portion of the event, Randy Mooney, Missouri dairy farmer and NMPF chairman, and Jaime Casteneda, senior vice president of strategic initiatives and trade policy, pledged to work to fix the Margin Protection Program for Dairy (MPP-Dairy) in the next federal Farm Bill.
“There’s not an issue more important to us over the next couple of years then to get MPP fixed,” Mooney said. “I still believe it is the right program for dairy farmers, but it isn’t working as it was intended.”
“I know there is a lot of skepticism,” Casteneda said. “Originally, we got the program right, but unfortunately due to consequences in Congress, it is not the program it was intended to be.”
The NMPF leaders blamed Congress for adjusting the program’s feed cost index in monthly MPP-Dairy margin calculations, a change that effectively cut feed costs in determining margins by about $1 per cwt.
Mooney said a special economic policy committee had been established to look into all issues related to MPP-Dairy, with a goal of formulating proposed revisions by March of 2017.
Several NMPF leaders warned Congress would be unlikely to accept a program that required supply management provisions, and Mooney offered one additional warning: “This can’t be a program that guarantees profit. If it is, we will have way too much milk. It has to be a program that protects our balance sheets and assets against catastrophic losses.”
Non-GMO addressed
NMPF president and chief executive officer Jim Mulhern said the organization would take a more aggressive role in advocating on behalf of its members’ economic interests.
He spoke in depth about NMPF’s recent decision to join other farm groups in publicly challenging Dannon USA’s pledge to source milk for some of its yogurt products from cows not fed genetically modified organism (GMO) feedstuffs, an effort he called a “fear-based marketing tactic.” The farming community must continue to project a unified voice as it dispels false marketing claims about biotechnology and other claims like “hormone-free” and “antibiotic-free,” Mulhern said.
“We will speak out. We will push back when those who don’t necessarily have your interests at heart push their agenda at our expense,” he said.
Other issues
• NMPF staff claimed victory on ongoing GMO labeling issues, including federal preemption over state-by-state labeling initiatives, as well as preventing companies from labeling dairy products from animals consuming feed from GMO sources. USDA has started a two-year effort to develop federal labeling standards.
• John Hollay, vice president of government relations, said NMPF would seek to advance bills to provide federal tax credits for manure nutrient recovery and biogas production investment.
• With both major presidential candidates expressing opposition, Shawna Morris, vice president of trade policy, said NMPF held out slim hopes for passage of the Trans-Pacific Partnership trade agreement in a lame duck session of Congress, before a new administration begins next January.
• Jim Tillison, chief operating officer, and Peter Vitaliano, NMPF vice president of economic policy and market development, provided updates on the Cooperatives Working Together (CWT) export assistance program.
They said U.S. cheese and butter prices diverge from global prices much more than milk powder product prices. As a result of price disparity, the U.S. was losing cheese market share on the global market.
With U.S. and global milk powder and dry whey prices more closely aligned, CWT was suspending whole milk powder (WMP) export assistance, enabling more investment in cheese exports, which have a bigger impact on U.S. dairy farmer milk prices.
• Tom Balmer, executive vice president, discussed the decision to reach a $52 million class-action lawsuit settlement agreement related to CWT’s herd retirement program. NMPF officials said CWT cash reserves were adequate to cover the settlement, and the organization would not require a supplemental assessment to cover the costs.
Milk price outlook
Based on current futures prices, Vitaliano said the U.S. average milk price over the next 18 months should average about 80 cents to $1 per hundredweight (cwt) higher than the previous 18 months. Factors critical to prices include U.S. and global milk production in relation to demand, U.S. cheese exports, world dairy product prices and U.S. and global dairy product inventories.
A healthy defense of dairy fats
A keynote address was delivered by investigative journalist Nina Teicholz, who authored “The Big Fat Surprise: Why Butter, Meat & Cheese Belong in a Healthy Diet.”
The book, an international best seller and the Wall Street Journal’s “Best Book” of 2014, documents how decades of advice recommending low-fat diets is based on the intentional misinformation about saturated fats, leading to disastrous consequences for human health. She described how full-fat dairy products and meat are keys to reversing the epidemics of obesity, diabetes and heart disease.
“Despite the benefits of saturated fats, there’s an incredible movement to demonize dairy, motivated by plant-based diet people, for things like soy milk and soy proteins as acceptable foods in dietary guidelines,” said Teicholz. “There is a strong, motivated commitment to get rid of animal foods from our diet.”
Yum! International partnership launched
Dairy Management Inc. (DMI) staff, including Chief Executive Officer Tom Gallagher, updated dairy farmers on issues related to consumer trust and dairy product sales during the dairy promotion part of the meeting. Gallagher said dairy checkoff-funded partnerships between dairy producers and food companies had helped sell more than 5.5 billion pounds of additional milk over the past 52 weeks through domestic cheese sales alone.
To sell even more cheese and dairy products, Gallagher and Paul Rovey, Arizona dairy farmer and DMI chairman, unveiled a new partnership with Yum! Brands, the parent company of Kentucky Fried Chicken (KFC), Pizza Hut and Taco Bell with nearly 43,000 restaurants in 135 countries and territories.
The partnership seeks to build U.S. dairy sales internationally, specifically in Latin America, the Caribbean and the Asia Pacific. A pilot program with KFC aims to grow U.S. dairy sales in Latin America and the Caribbean by exploring innovation opportunities like cheese sauces and pairings to complement KFC’s international products, such as chicken sandwiches.
Another pilot program with Pizza Hut will seek to reach customers through 2,500 restaurants in 15 Asia Pacific countries. Pizza Hut sources 100 percent of its string cheese, used in stuffed-crust pizzas, from the United States.
“U.S. dairy farmers, importers and DMI have brought us tremendous value in dairy expertise and innovation,” said Greg Creed, CEO of Yum! Brands. “I’m incredibly excited about taking this relationship to international markets.”
Gallagher said another top mission of the checkoff is to grow consumer trust in dairy, emphasizing “it’s time dairy farmers took the microphone back” from voices who oppose animal agriculture. With consumers increasingly wanting to know how their food is produced, the Innovation Center for U.S. Dairy will kick off an industrywide social responsibility plan in 2017. The full supply chain program will help tell dairy farmers’ stories to consumers hungry for truthful information about their food.
Promotion efforts cited
Zach Myers, North Carolina dairy farmer and NDB chairman, presented 2016 Richard E. Lyng Awards to dairy farmer Steve Frischknecht, Manti, Utah, and Donald Gurtner, Fremont, Indiana. The award recognizes individuals for their contributions and distinguished service to dairy promotion. Frischknecht was a leader in dairy promotion for more than 20 years, including several years as secretary of UDIA. Gurtner has devoted 35-plus years to promoting dairy in Indiana, serving as a national director of UDIA for more than 20 years and as chair of American Dairy Association of Indiana since 1985. 
PHOTO 1: The 2016 joint annual meeting of the United Dairy Industry Association (UDIA), National Dairy Promotion and Research Board (NDB) and National Milk Producers Federation (NMPF) was held Oct. 31-Nov. 2 in Nashville, Tennessee. Dairy Management Inc. Chief Executive Officer Tom Gallagher updated dairy farmers on consumer trust and dairy product sales topics. Photo courtesy of Dairy Management Inc.
PHOTO 2: Nina Teicholz, who authored “The Big Fat Surprise: Why Butter, Meat & Cheese Belong in a Healthy Diet,” described how decades of advice recommending low-fat diets was based on the intentional misinformation about saturated fats, leading to disastrous consequences for human health. She described how full-fat dairy products and meat are keys to reversing the epidemics of obesity, diabetes and heart disease. Photo by Dave Natzke.
PHOTO 3: Utah dairy farmer Steve Frischknecht, center, is presented the Richard E. Lyng Award by Zach Myers, North Carolina dairy farmer and chair of the National Dairy Board. Joining Frischknecht is Jeff Hardy, chairman of the Dairy Council of Utah/Nevada. Photo courtesy of Dairy Management Inc.
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