In recognition of your time, we’ll attempt to summarize recent events or actions making dairy headlines and reported in our weekly digital newsletter, Progressive Dairy Extra. Then we’ll try to put that news into perspective and briefly describe how it might affect you.
In this issue, we follow up on a number of topics previously covered in this column.
MILK POWDER LAWSUIT
What happened?
Last May, Progressive Dairy reported that the U.S. District Court Eastern District of California approved a $40 million settlement agreement regarding the lawsuit Carlin, et al. v. DairyAmerica Inc., et al. However, an appeal of the settlement was filed before payments were distributed, sending it back to court.
The class-action lawsuit stemmed from the misreporting of nonfat dry milk (NFDM) prices by DairyAmerica to the USDA’s National Ag Statistics Service (NASS) from April 2006 to April 2007. Because the NASS prices were used to establish Federal Milk Marketing Order prices for milk in Class II, Class IV and, in some instances, Class I milk, the reporting of lower NFDM prices directly resulted in lower minimum milk prices paid to dairy farmers. In June 2007, the USDA concluded the reporting errors reduced dairy farmer income by about $50 million.
What’s next?
According to settlement administrator Rust Consulting Inc., there have been no updates to the appeals process since last October, and the appeal could take anywhere from six months to a couple of years to resolve. Updates about the appeals process will be posted to the settlement agreement website (Milk powder settlement) as soon as they become available.
Bottom line
After deducting about $14 million for attorney and administrative fees, about 26,000 U.S. dairy farmers are waiting for approximately $26 million in settlement agreement payments.
U.S.-MEXICO-CANADA AGREEMENT
What happened?
President Donald Trump signed the U.S.-Mexico-Canada Agreement (USMCA) on Jan. 29; Mexico previously ratified the agreement last December.
What happened?
That leaves Canada, where a bill to ratify the agreement had its first reading in the House of Commons on Jan. 29. The National Milk Producers Federation (NMPF) anticipates Canadian passage by the end of March.
Bottom line
According to Livingston, an international trade consulting firm, implementation would take place about three months after ratification by all three countries. Another important date: Canada would be required to eliminate Class 6 and 7 milk pricing programs within six months of enactment.
MARKET FACILITATION PROGRAM
What happened?
Eligible dairy producers should have already received the third and final 2019 Market Facilitation Program (MFP) payment. USDA Secretary Sonny Perdue announced authorization of the payments on Feb. 3. The final payment, equal to 5 cents per hundredweight (cwt) on a dairy farmer’s annual milk production history – was scheduled to be deposited in dairy producers’ bank accounts during the first week of February. MFP was part of a larger Trade Mitigation Program (TMP), designed to assist farmers hurt by tariff and trade wars.
What’s next?
Under a separate provision of the TMP, the USDA continues to purchase dairy products through the Food Purchase and Distribution Program (FPDP), administered by Agricultural Marketing Service (AMS). The USDA had earmarked about $85 million for the purchase of fluid milk and other dairy products for U.S. food banks and other feeding programs.
Bottom line
Previous analysis by John Newton, chief economist with the American Farm Bureau Federation, estimated U.S. dairy farmers would receive between $351 million and $371 million after all three MFP payments were issued, representing 2.4% to 4.6% of all MFP payments.
DAIRY and DIETARY GUIDELINES FOR AMERICANS
What happened?
An advisory committee to update the Dietary Guidelines for Americans (DGA) met in late January. Cary Frye, senior vice president for regulatory affairs with the International Dairy Foods Association (IDFA), defended dairy’s important place in the DGA, countering anti-dairy claims she said were designed to mislead and scare consumers. Frye’s requests submitted to the advisory committee included:
- Dairy should continue as a separate food group in the DGA.
- The DGAs must preserve the recommended three servings of dairy per day in dietary patterns to ensure Americans meet their recommended intakes of essential nutrients.
- The DGA advisory committee should embrace the evidence showing dairy foods at all fat levels are part of a nutritious diet.
What’s next?
Updated every five years, the 2020-25 DGA update is scheduled for release at the end of 2020.
Bottom line
Beyond providing dietary recommendations, the document is also used as the basis for dairy options served as part of the National School Lunch and Breakfast programs and other federal feeding programs.
FDA, DAIRY LABELS and THE DAIRY PRIDE ACT
What happened?
The FDA’s process of reviewing requests to enforce restrictions on the use of dairy terms on labels and in the marketing of nondairy products has been ongoing for more than a year.
A handful of dairy state lawmakers sent a letter to new FDA Commissioner Stephen Hahn, urging his agency to take action. Lawmakers signing the letter included authors of the Defending Against Imitations and Replacements of Yogurt, milk, and cheese to Promote Regular Intake of Dairy Everyday (DAIRY PRIDE) Act: U.S. Reps. Peter Welch (D-Vermont) and Mike Simpson (R-Idaho) in the House and Sens. Tammy Baldwin (D-Wisconsin) and Jim Risch (R-Idaho) in the Senate.
Additionally, Tom Balmer, executive vice president of the National Milk Producers Federation (NMPF), told a congressional subcommittee that FDA’s failure to take action made it imperative that Congress pass the DAIRY PRIDE Act. Balmer testified at a hearing on “Improving Safety and Transparency in America’s Food and Drugs” before the House Energy and Commerce Committee’s Subcommittee on Health.
The DAIRY PRIDE Act would require FDA to issue guidance for nationwide enforcement of mislabeled imitation dairy products within 90 days of its passage and require FDA to report to Congress two years after enactment to hold the agency accountable in its enforcement.
What’s next?
Good question; stay tuned.
Bottom line
The wheels of bureaucracy turn slowly. 
-
Dave Natzke
- Editor
- Progressive Dairyman
- Email Dave Natzke
