Digest highlights

U.S. dairy groups reject Canadian USMCA dairy market access proposal

U.S. dairy organizations have rejected a proposal outlining Canadian changes to dairy tariff-rate quotas (TRQ) allocations under the U.S.-Mexico-Canada Agreement (USMCA).

Natzke dave
Editor / Progressive Dairy

Under the USMCA, U.S. dairy producers were granted increased market access to Canada by way of preferential tariff rates for in-quota quantities of certain products. However, in January, the U.S. trade representative’s (USTR) office announced a USMCA dispute settlement panel had ruled Canada’s dairy TRQ allocation process violated the trade agreement. The ruling said Canada’s implementation of the TRQs restricted access of U.S. dairy products by setting aside quotas specifically for Canadian processors.

Read: Panel sides with U.S. in Canadian dairy trade dispute.

In early March, Global Affairs Canada released proposed allocation and administration policy changes to the current scheme. The U.S. government is in the process of deciding whether the proposal brings Canada into compliance and has not indicated when there will be a decision on next steps.

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) quickly rejected the proposal, charging the changes continued efforts to undermine established trade commitments to favor Canadian dairy farmers.

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“Enough is enough. U.S. dairy producers are sick and tired of Canada’s game playing on dairy market access,” said Jim Mulhern, president and CEO of NMPF. “We urge the administration to demand that Canada go back to the drawing board until it can genuinely deliver on providing the U.S. dairy industry the full benefit of USMCA.”

“U.S. dairy farmers and manufacturers have only limited access to the Canadian market under USMCA. That makes it essential that Canada abide by its original commitments under that agreement,” said Krysta Harden, president and CEO of USDEC. “Canada’s recent dairy TRQ proposal will not lead to that result.”

“It’s clear that Canada is not seeking to provide actual market-based allocations,” said Brody Stapel, a Wisconsin dairy farmer and president of Edge Dairy Farmer Cooperative. Among other things, the proposed changes would not allow U.S. exporters to ship directly to the lucrative retail sector, he said.

The U.S. organizations said the U.S.-Canada dairy TRQ issue is a test case for whether or not the USMCA dispute settlement process can provide effective enforcement and deliver genuine compliance with the agreement.

USDA authorizing Dairy Donation Program (DDP) payments

The USDA is disbursing payments under the Dairy Donation Program (DDP). The $400 million program was created to facilitate dairy product donations and reduce food waste.

Last August, the USDA provided details covering the DDP, allowing eligible dairy organizations to partner with nonprofit feeding organizations that distribute food to individuals and families in need. Those partnerships may apply for and receive reimbursements to cover some expenses related to eligible dairy product donations.

Read: Dairy Donation Program details released.

The program accepts applications on a rolling basis and processes claims on a quarterly basis. Quarterly reporting on program participation and funds disbursed will begin in April 2022.

Dairy farmers, cooperatives or processors that purchase fresh milk or bulk dairy products to process into retail-packaged dairy products and meet other requirements are eligible to participate. Costs reimbursed through the program include the cost of milk used to make the donated eligible dairy product and some of the manufacturing and transportation costs.

If an eligible dairy organization made dairy product donations to nonprofit organizations between Jan. 1 and Dec. 27, 2020, those donations may be eligible to receive retroactive reimbursements. The deadline for submitting claims for retroactive reimbursement was March 1, 2022. The total funding amount allotted for retroactive reimbursements was limited to $50 million.

Entities previously enrolled with the Milk Donation Reimbursement Program (MDRP) are eligible to receive a supplemental payment on donations made since Jan. 1, 2020, that equals the difference between the DDP and MDRP payment rates. Supplemental payments to qualifying handlers have already been made.

An overview of the program, a short webinar, forms and frequently asked questions are also available on the DDP website.

USDA adds to Dairy Business Innovation funding

The USDA’s Ag Marketing Service (AMS) announced an additional investment of $80 million in the Dairy Business Innovation (DBI) Initiatives program, supporting regional efforts to expand dairy processing capacity, on-farm improvements and technical assistance to dairy producers.

Last November, DBI awarded $18.4 million to three current Initiatives at University of Tennessee, Vermont Agency for Food and Marketing and University of Wisconsin, and $1.8 million to a new initiative at California State University – Fresno. With the additional funding, the regional initiative will now have the opportunity to submit additional proposals for up to $20 million in American Rescue Plan (ARP) funds.

Since its inception in 2019, DBI initiatives have provided valuable technical assistance and subgrants to dairy farmers and businesses across their regions, assisting them with business plan development, marketing and branding, as well as, increasing access to innovative production and processing techniques to support the development of value-added products. Separate from this supplemental ARP funding, AMS plans to announce a new DBI request for applications later in fiscal year 2022, contingent upon appropriations.

Survey results support low-fat flavored milk in schools

Voters in New York City and across the country widely support offering low-fat flavored milk in public school meals, according to a Morning Consult national tracking poll commissioned by the International Dairy Foods Association (IDFA).

The online polls of about 1,500 parents were conducted in mid-February. Parents responding in the survey were nearly unanimous in their agreement that school meal health and nutrition were an important priority. Additionally, 90% of New York parents with kids in public school and 85% of parents nationally supported including low-fat flavored milk in public school meals.

School meal participation in cities across the country has fallen since the start of the pandemic, according to preliminary data from the USDA, which oversees the National School Breakfast and Lunch programs.

Meal participation in New York City schools fell by 300,000 students in 2020 and remains 75,000-80,000 students short of 2019 figures. As school districts look for opportunities to increase meal participation, IDFA is underscoring that when schools offer low-fat flavored milk options, school meal participation increases and children consume more of their meals and discard less food.

Weakened participation in school meals is a silent but growing crisis, said Michael Dykes, president and CEO of IDFA. “For children, school meals are by far the healthiest meal of the day. Offering more milk options in school plays an important role in the diet and nutrition of children because milk contains 13 essential nutrients that children need for growth, development, healthy immune function and overall wellness. The low-fat flavored milk offered in schools today contains 50% less added sugar and 40 fewer calories than it did a decade ago with all the same nutrition benefits our kids need. Rather than trying to limit school milk options for kids, policymakers should follow the lead of parents, physicians and school meals professionals who want to do what’s best for child nutrition.”

To read the full survey results, click here.

QIP petitions denied

In February, the California Department of Food and Agriculture (CDFA) denied two petitions related to the state’s Quota Implementation Plan (QIP). Both petitions were submitted by the STOP QIP organization in December.

Petition one sought to terminate the QIP; petition two sought a public hearing to consider the whether the QIP should be reapproved. Both petitions were submitted by the STOP QIP organization.

In spring of 2021, a referendum to sunset the QIP in early 2025 fell short of the necessary votes, leaving the program in place for the foreseeable future.  end mark

Dave Natzke