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Weekly Digest II: Senate committee advances USMCA

Progressive Dairy Editor Dave Natzke Published on 08 January 2020

Digest Highlights

Senate committee advances USMCA

The Senate Finance Committee approved the U.S.-Mexico-Canada Agreement (USMCA) on a 25-3 vote, Jan. 7. The next step requires review by several Senate committees with oversight on provisions in the trade agreement and sets the stage for final approval in the full Senate, where the schedule remains clouded by the possibility of impeachment proceedings for President Donald Trump.

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“The benefits of the USMCA are substantial for dairy farmers, but our work is not complete until it receives the president’s signature,” said Jeff Lyon, general manager for FarmFirst Dairy Cooperative. “Certainly, there are other issues that have the attention of our Senate leaders, but passage of the USMCA should not be clouded by other political issues at hand.”

“U.S. dairy farmers have long-awaited movement on these trade discussions,” said American Dairy Coalition CEO, Laurie Fischer. “We’re eager to see final passage of USMCA and anxious for the benefits of these trade deals to reach our farmers.”

Fischer said one scenario would limit debate to 20 hours maximum before a Senate vote.

The House of Representatives overwhelmingly approved the USMCA on a 385 to 41 vote, Dec. 19. Mexico has already approved the agreement, and Canada is likely to hold a vote in late January.

According to the National Milk Producers Federation (NMPF), dairy would gain an estimated $528 million in increased revenues over the agreement’s first six years, as well as protection for common cheese names and enforcement mechanisms to ensure the repeal of Canada’s Class 6 and 7 milk pricing system. Read: Deal boosts dairy hopes for USMCA.

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“U.S. dairy farmers have much to gain from this new trade agreement, and after five years of a challenging dairy economy, passage of this trade agreement would be positive news for dairy farmers,” said John Rettler, dairy farmer from Neosho, Wisconsin, and president of FarmFirst Dairy Cooperative. “USMCA shows the rest of the world that the U.S. is capable of modernizing a trade agreement – and passing one. Getting this trade agreement across the finish line sends a positive message to the rest of the world that the U.S. is open for business.”

Missouri city files lawsuit over DFA wastewater discharges

The city of Cabool, Missouri, has filed a lawsuit against Dairy Farmers of America (DFA), alleging Clean Water Act violations related to a DFA plant’s wastewater discharges.

The lawsuit, filed in the U.S. District Court in the Western District of Missouri, alleges DFA discharged untreated or inadequately pre-treated waste materials into the city’s wastewater system on numerous occasions in 2018-19, costing the city $1.2 million in additional facility investment and operating expenses. It also accuses DFA leadership with failing to cooperate with city officials regarding the discharges. The lawsuit seeks financial remediation, civil penalties, funding for a water quality project to protect the Big Piney River, and attorney fees and court costs.

DFA expressed disappointment in the lawsuit. “The allegations made against DFA are unfounded, and we do not believe that the problems with the city’s wastewater facilities fall squarely on DFA,” according to a statement released by the organization. “Despite this, DFA has been in regular communication with the city to identify what information exists suggesting DFA caused its issues. In addition, DFA has been implementing improvements to its wastewater system, many of which were previously planned.

“DFA remains committed to operating in a sustainable way and is hopeful that the city will join us in identifying a fair and equitable resolution to the outstanding lawsuits,” the statement concluded.

Japan to subsidize dairy herd expansion

While a new U.S.-Japanese trade agreement will provide some benefits to the U.S. dairy industry by providing additional access for exports, a separate Japanese program seeks to strengthen its domestic milk production by subsidizing dairy herd expansion.

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A new report from the USDA Foreign Agricultural Service said the Japanese Cabinet approved new support programs for livestock producers under the 2019 supplementary budget for the Ministry of Agriculture, Forestry and Fisheries (MAFF). The new programs include payments to producers who expand the number of dairy and beef cows retained for breeding purposes.

In the budget, MAFF was allocated 24.3 billion yen ($223 million U.S. dollars) to support the Japanese dairy and beef industries. About $100 million will be spent to increase the number of Wagyu beef cows and dairy cows in Japan. Incentive payments for dairy replacements will be about $2,523 per head, or about 39% of the average cost of a bred dairy heifer.

The report notes Japanese calf production had slowed dramatically in recent years as aging producers gradually exited the industry, reducing the total cow population and pushing calf prices to all-time highs. A start date and application process for the program has not yet been announced.

Global Dairy Trade index rises

The index of Global Dairy Trade (GDT) dairy product prices increased in the first auction of the year, Jan. 7. The overall index rose 2.8%, with all major dairy products showing price improvement:

  • Skim milk powder was up 5.4% to $3,026 per metric ton (MT).
  • Cheddar cheese was up 3.7% to $4,015 per MT.
  • Butter was up 3.7% to $4,029 per MT.
  • Whole milk powder was up 1.7% to $3,150 per MT.

The next GDT auction is Jan. 21.  end mark

Dave Natzke
  • Dave Natzke

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