Tag Archives: Dairy

Reports coming out of New Zealand point to a possibly sizeable increase in beef supplies from the small country, due to a nationwide attempt to eliminate Mycoplasma bovis from all beef and dairy herds.

While small, the country exports nearly 90% of its beef production, and competes with the U.S. for lucrative Asian markets like Japan, China and South Korea. One estimate shows the country exports beef at a level that is roughly 45% of U.S. exports.

The eradication program will result in the unplanned slaughter of an estimated 126,000 or more head, from at least 190 farms. Because Mycoplasma bovis is not a danger to the food supply, that beef is expected to be added to the country’s export numbers this year. There is also likely to be an impact on another of the country’s big export items, dry powdered milk, supplies of which would likely be reduced as a result of the culling on the dairy side.

Purdue University’s Chris Hurt, agricultural economist, says the USDA shows the country has about 6 million milk and beef cows. Assuming a slaughter of 150,000 head, that is about 2.5% of New Zealand’s herd. He says the degree to which this added supply might impact beef prices will be partially tied to how quickly the animals are slaughtered and moved into supply channels.

“New Zealand is big enough to effect volumes in those markets where we compete with them,” said Hurt. “There is certainly potential for a short term price depressing impact.”

However, after that downside, it will take two three years for producers in New Zealand to get enough heifers back into place and bred, to return to production levels prior to the culling.

“So the short term impact is we’ll probably see more beef exported by New Zealand to those markets in Asia,” concluded Hurt. “The long term view is there may be a benefit to the U.S. producer in terms of modestly less export competition.”

According to reports from Biosecurity New Zealand, the government, dairy and beef industries agreed to the attempted eradication, a process set to take place over the next one to two years. At presstime, the government had identified 37 infected farms, and 260 “suspect” farms infected cattle will come from. There will also be “movement controls” for any farms considered high risk. This is out of 20,000 total farms.

Mycoplasma bovis was first found in the country last July. May 10, 2018, the government reported a cull of 22,000 cows was underway. Half had already been destroyed, sending a signal the cull is moving rapidly in an attempt to contain the spread of the bacterium. Diseases and production problems known to be caused by it include mastitis, arthritis, pneumonia and late-term abortions.

Agriculture and Biosecurity Minister in New Zealand, Damien O’Connor, reported through government websites that to date they are finding all of the infected properties are connected in some way. He added: “The tracing of Mycoplasma bovis is made harder by the poor use of the national animal tracing system [NAIT]. We could have tracked this more quickly if the system had been used properly. The previous Government’s inaction, lack of enforcement and promotion of NAIT has created major issues for hunting down Mycoplasma bovis.”

A full cost of phased eradication over 10 years is projected to cost $886 million, of that $16 million is being born by farmers in lost production. Most of the actual eradication work will take place in less than two years. When making the decision to eradicate or manage Mycoplasma bovis, long-term management was projected to cost $1.2 billion, with producers bearing $698 in lost production costs. No action was also estimated, at a cost of $1.3 billion.

ARLINGTON, VA – Total 2018 Cooperatives Working Together (CWT) assisted member sales reached 72.5 million pounds of American-type cheeses, 17.4 million pounds of butter (82% milkfat) and 41.6 million pounds of whole milk powder. The milk equivalent of these sales is 1.364 billion pounds on a milkfat basis.

For the week of December 17th, member cooperatives accepted 23 offers of export assistance from CWT that helped them capture sales contracts for 3.214 million pounds (1,458 metric tons) of Cheddar and Monterey Jack cheeses, 204,462 pounds (100 metric tons) of butter and 476,199 pounds (216 metric tons) of whole milk powder. The product will be delivered during the period from January through June 2019.

Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and all dairy cooperatives by strengthening and maintaining the value of dairy products that directly impact their milk price. It does this by helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has significantly expanded the total demand for U.S. dairy products and the demand for U.S. farm milk that produces those products.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to the bidders only when export and delivery of the product is verified by required documentation.

All dairy farmers and all dairy cooperatives should invest in CWT. Membership information is available on the CWT website.

ARLINGTON, Va. – The National Milk Producers Federation (NMPF) thanked members of Congress, especially the bipartisan leaders of the House and Senate Agriculture Committees, for crafting a farm bill that includes much-needed reforms to help American dairy farmers. The 2018 Farm Bill reached a key milestone on Monday with the release of a long-awaited conference report.

“Members of Congress on both sides of the aisle should be commended for reaching a deal that will benefit U.S. agriculture and ensure safe, affordable food for Americans and the world,” said Jim Mulhern, president and CEO of NMPF. “A new law is especially important for dairy, a sector struggling with low prices and disrupted exports. We thank lawmakers for addressing our concerns with measures that will help producers in need.”

NMPF called on the full Congress to pass the bill quickly while thanking its four principal negotiators: Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI), as well as House Agriculture Committee Chairman Mike Conaway (R-TX) and Ranking Member Collin Peterson (D-MN).  While the bill includes a vast array of farm policy changes, improvements benefiting dairy include:

  • Higher coverage levels in a renamed Margin Protection Program (MPP) that address deficiencies in the current program’s feed-cost formula
  • Greater flexibility to allow producers of all sizes to access Tier 1 premium rates
  • Expanded access to additional risk management tools, allowing producers to participate in both MPP and the Livestock Gross Margin insurance program
  • Continued support for land and water conservation programs that assist dairy producers
  • Full funding for Farm Bill trade promotion programs, a crucial concern in an era of markets lost to tariffs
  • Nutrition provisions intended to enhance consumption of fluid milk

The law’s provisions build on improvements enacted in the Bipartisan Budget Act earlier this year, including dairy safety net reforms spearheaded by Stabenow and Sen. Patrick Leahy (D-VT), as well as risk management provisions championed by Conaway and Peterson.

America’s dairy farmers are urging President Trump to work on opening up the Japanese market as soon as possible. Officials are getting ready to begin trade talks between the two countries next month.

The National Milk Producers Federation was one of four groups that gave testimony at the U.S. International Trade Commission hearing on the potential trade pact. The Office of the U.S. Trade Representative will also hold a hearing on  Monday about the possible agreement with Japan. U.S. dairy exports to Japan could grow by 450 percent if American farmers had full access to the country’s market.

It would also raise dairy farmers’ income by up to $12 billion over the next decade. However, Politico says there might be a problem with that idea. President Trump has already agreed not to press the Japanese Prime Minister, Shinzo Abe to expand access to Japan’s ag markets when they agreed back in September to start talks aimed at establishing a bilateral agreement between the nations.

The U.S. dairy industry pushed President Donald Trump’s administration on Thursday to ensure increased access to the Japanese market, saying the United States lags behind other farming nations that have tariff-cutting agreements with Japan.

In a hearing on bilateral trade negotiations that Washington and Tokyo are set to start as early as in mid-January, a labor union representing American automobile manufacturing employees meanwhile urged the administration to maintain U.S. tariffs on Japanese cars, parts and trucks to curb increases in imports.

Speaking at the United States International Trade Commission hearing, Jaime Castaneda, senior vice president of trade policy at the U.S. Dairy Export Council and the National Milk Producers Federation, said upcoming talks for a bilateral trade agreement should achieve “a high level of market access” in Japan.

Castaneda said that in terms of access to the world’s third-largest economy, the United States is behind Australia — which already has a bilateral free trade agreement with Japan — as well as the 11 members of a Pacific FTA and the European Union, a 28-nation bloc that has signed an FTA with Japan.

“America is already behind and we ask the administration to act soon,” he said.

In a written testimony, the council and federation effectively pushed Japan to reduce tariffs on dairy products beyond levels agreed to under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the 11-nation FTA that will enter into force on Dec. 30, and the Japan-EU FTA.

The organizations urged the administration to use the trade talks with Japan to secure “a better outcome” than that contained in the CPTPP or in the Japan-EU FTA “for each tariff line.”

Japan and the European Union are speeding up domestic procedures for the early enforcement of their FTA.

“Japan’s market for imported dairy products is tightly restricted in most product areas,” the testimony said. “In addition to tariffs, Japan maintains a complex quota system for several of its dairy products which it uses to allocate its in-quota quantities according to designated uses.”

Josh Nassar, legislative director for the United Automobile, Aerospace and Agricultural Implement Workers of America International Union — also known as the United Automobile Workers, or UAW — accused Japan of having a “closed market” for American automobiles.

The United States should maintain tariffs on Japanese cars, parts and trucks “until their market is truly open to actually see big increases in allowing imports,” he said.

While acknowledging Japan imposes no tariffs on foreign cars, Nassar argued the Japanese government has set up “a web of closed systems” such as dealerships that make it difficult for foreign automakers to have successful sales in Japan.

Nassar also claimed Japan has not been hesitant about manipulating its currency to give its exports an unfair trade advantage.

Aside from Thursday’s hearing, the Office of the U.S. Trade Representative is scheduled to hold a separate hearing for industries on Monday regarding bilateral trade agreement talks with Japan.