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Weekly Digest: NAFTA dairy issues grow more contentious

Progressive Dairyman Editor Dave Natzke Published on 24 October 2017

Digest Highlights: NAFTA’s dairy issues grow more contentious. USDA providing dairy feed aid to Puerto Rico. Wisconsin dairy group and natural resources agency reach settlement. Find a summary of these stories and updates on previous Progressive Dairyman news stories here.

Dairy issues contentious as NAFTA talks move on

Dairy issues garnered attention and contentiousness during the latest round of North American Free Trade Agreement (NAFTA) renegotiation talks. The U.S.-hosted round four of the talks wrapped up last week, with the next round set for Nov. 17-21 in Mexico City, Mexico. Further rounds are now being scheduled into the first quarter of 2018.

Summarizing the latest round of talks related to dairy, one leading dairy economist sees the potential termination of NAFTA.

“Dairy trade groups in the U.S., such as the National Milk Producers Federation (NMPF), have recently upped the ante and taken a very hard line against not only the new pricing class that effectively neutered the ability of U.S. plants to sell milk proteins in Canada but against the supply management system that undergirds the Canadian pricing system,” said Andrew Novakovic, Cornell University dairy economist.

“Canadian dairy farmers are reacting strongly and vigorously to this,” Novakovic said. “It looks to me that the increasingly hard rhetoric and the Trump administration’s threat to terminate NAFTA altogether is being seen as a bit of bullying by their big Southern neighbor. Where all this ends up remains to be seen, but I do not dismiss the possibility of the U.S. initiating steps to terminate NAFTA.”

Withdrawing from NAFTA does not, in itself, compel Canada to do anything with respect to its supply management system, he noted.

“At least one analysis I looked at recently said that the elimination of NAFTA would put trade between all three countries back entirely under World Trade Organization (WTO) rules. Under these rules, tariffs would rise in all three countries, but the U.S. would face higher tariffs on its exports to Mexico in particular than Mexico would going in the other direction. This is primarily because WTO rules negotiated in the 1990s gave preferential treatment to less developed countries.”

In a statement released by NMPF, President and CEO Jim Mulhern supported a proposal advanced by the U.S. Trade Representative (USTR) negotiators. That proposal called for elimination of Canada’s “exorbitant tariffs” on dairy imports and an end to its Class 7 dairy export policy, which NMPF views as a means to dump Canada’s surplus milk solids onto the world market.

According to the release, NMPF’s board officers met Dairy Farmers of Canada (DFC) leaders earlier in October to impress upon them the importance of resolving these issues. Following the latest round of talks, however, DFC officials were not receptive to those changes.

Pierre Lampron, DFC president, called the latest U.S. proposal “outrageous” but not surprising. He said the Canadian government has been clear about its “continued support for supply management and dairy. We remain confident they will stay true to their word.”

USDA to provide feed aid to Puerto Rico’s dairy farmers

The USDA will provide emergency financial assistance to Puerto Rico’s dairy farmers devastated by Hurricanes Irma and Maria.

Roughly 25 percent of the island’s 75,000 cows have died or are missing, and barns were flattened. Much of the island has no electricity, and while Puerto Rican farmers have been using generators to milk their cows, the three processing plants on the island are down so all milk is being dumped.

Mike McCloskey, who has extensive family connections in Puerto Rico, has been leading NMPF advocacy for Puerto Rican dairy industry aid from the U.S. NMPF’s Clay Detlefsen is the chair of the Federal Emergency Management Agency (FEMA) food and agriculture infrastructure sector.

USDA Secretary Sonny Perdue said the Commodity Credit Corporation (CCC) will provide up to $12 million to enable Puerto Rico’s 253 licensed dairy operations to purchase cattle feed. The special initiative, applicable only to Puerto Rico, is called the Dairy Assistance Program for Puerto Rico (DAP-PR).

Beginning Oct. 21, dairy operators could apply to USDA’s Farm Service Agency (FSA) offices on the island to receive vouchers to purchase an estimated one month supply of feed. Individual vouchers are calculated based on 100 percent of estimated feed costs per cow for 30 days. There are an estimated 94,000 dairy cows on the island.

The USDA later amended the program, saying vouchers would only be paid when dairy operations received physical delivery of the feed and provided documentation for verification.

Application deadline is Dec. 1, 2017. If funding remains available at the end of the application period, FSA may provide assistance for additional feed or fuel purchases to further support these dairy operations.

California air district offers dairy feed-mixing electrification program

The San Joaquin Valley Air Pollution Control District (SJVAPCD) governing board approved a new pilot program for dairy farms, designed to reduce diesel emissions during feed mixing and delivery. The board will provide $4 million in incentive funding to help dairy farmers switch from diesel- to electric-powered equipment, according to Kevin Abernathy, general manager of California’s Milk Producers Council (MPC).

The Dairy Feed Mixing Electrification Program is an outgrowth of a demonstration project conducted by dairy farmer Philip Verwey, an MPC member from Hanford, California. Verwey replaced diesel tractor-powered feed mixing and delivery equipment with an electric feed-mixing station and delivery system. Following two years of operation, feed mixing time was reduced from 22 hours per day to less than 6 hours, feed quality improved and overall diesel fuel consumption was cut almost in half. It’s estimated the project is reducing nitrogen oxide emissions by about 21 tons per year.

See video of Verwey’s project.

Funding for the pilot program was approved Oct. 19 and included in the air district’s 2017-2018 budget. Funding levels are estimated to range between $700,000 and $1 million per project and will be available on a first-come, first-served basis. The incentive program will cover 60 to 75 percent of eligible project costs, with specific funding amounts based on estimated emission reductions and cost-effectiveness. Application information will be available through the SJVAPCD website.

Progressive Dairyman updates

Updates on articles appearing previously online and in print:

DBA, Wisconsin DNR reach settlement agreement

The Dairy Business Association (DBA) and Wisconsin Department of Natural Resources (DNR) reached a settlement agreement, Oct. 18, in a lawsuit over state environmental regulations affecting dairy farmers. 

Read: Dairy group files lawsuit against Wisconsin Department of Natural Resources

In the lawsuit, filed July 31 in the Wisconsin Circuit Court of Brown County, Green Bay, Wisconsin, DBA alleged DNR has circumvented procedures to establish rules regulating farms for several years. The DBA complaint identified calf hutch/vegetative treatment areas (VTAs) and regulation of runoff of leachate from feed storage areas as examples of rules it said Wisconsin DNR promulgated and implemented without going through proper rule-making processes.

In reaching the deal, the DNR vowed to follow proper rule-making processes and rescind the blanket change in standards for vegetative treatment areas and calf hutches. Instead, the agency will order changes on a case-by-case basis if a farm’s conditions warrant.

“More than anything, this is a victory for the rule of law,” said Mike North, DBA president. “The DNR or other state agencies can’t make up the rules as they go along. There is a process that must be followed, and that process promotes public participation, legislative oversight and transparency.”

All environmental safeguards for water quality remain in place, North said, noting that existing standards found in state and federal law are not changed by this settlement.

“This lawsuit was never about rolling back regulations. It was about creating regulations according to a legally prescribed process,” North said.

DBA agreed to drop a third claim related to a large farm’s duty to apply for a permit. The association had argued that the DNR was contradicting a state law by exceeding federal standards that require a specific type of permit only if the farm discharges nutrients to a navigable surface water. The DNR presumes all large farms have unlawful discharges and, therefore, regulates them as concentrated animal feeding operations (CAFOs) even if they’ve done nothing wrong.

North said DBA expected that its duty-to-apply claim would result in a harmonization of state and federal laws, while still providing for environmental oversight of farms. But, he said, the association realized the claim would be the most challenging to prevail on in court.

Iowa ‘ag gag’ statute challenged

Yet another state law intended to prevent undercover access to a farm or agricultural production facility for the purpose of finding unethical behavior is facing a court challenge.

On Oct. 10, the Animal Legal Defense Fund and others filed a complaint against the state of Iowa, challenging the constitutionality of a state law passed in 2012. The law makes it a misdemeanor to obtain access to an agricultural production facility by false pretenses or to obtain employment at such a facility by such means.

The suit (Case No. 4:17-cv-362) was filed in the U.S. District Court for the Southern District of Iowa, according to the “Food & Ag Law Insights” blog from the law firm of Husch Blackwell.

Hurricane Irma victims receive 30,000 pounds of Wisconsin cheese

Wisconsin cheesemakers sent 30,000 pounds of cheese to Florida for those affected by Hurricane Irma. The 32 pallets of cheese were delivered to Feeding South Florida, which distributes to a network of 400 partner agencies.

Seventeen cheese companies were involved in the relief effort. Participating companies include Arthur Schuman Inc., Artisan Cheese Exchange, Baker Cheese Inc., Cedar Valley Cheese, Dan's Prize Inc., Door Artisan Cheese Company LLC, Eau Galle Cheese Company, Foremost Farms USA Cooperative, Maple Leaf Cheese Co-op, Masters Gallery Foods Inc., Odyssey Cheese & Yogurt, Pine River Pre-Pack Inc., Saxon Cheese, Swiss Valley Farms Co-op, Valley View Cheese Co-op, Widmer's Cheese Cellars and Winona Foods Inc. Additional support was provided by Wisconsin Cheesemaker Association (WCMA).

The statewide effort was coordinated by Wisconsin cheesemakers, Wisconsin Milk Marketing Board (WMMB), Independent Procurement Alliance Program (IPAP) and Wisconsin dairy farmers.

Pennsylvania to reimburse Chesapeake Bay watershed water plans

Pennsylvania’s Department of Environmental Protection (DEP) will reimburse farmers in Pennsylvania’s part of the Chesapeake Bay watershed for the cost of preparing hundreds of agricultural plans for clean water.

To prepare their plans, many farmers enlist technical experts, whose services generally cost from $500 to $1,500 per plan, depending on the size of the farm. The Agricultural Plan Reimbursement Program will cover the cost of preparation of at least 800 and as many as 2,200 plans.

The deadline to register to participate in the program is April 1, 2018, and plans must be submitted to the appropriate consultant by May 30. Farmers can now be reimbursed for plans developed after Jan. 1, 2017.

Eligible farms within the watershed are in Bradford, Cameron, Carbon, Centre, Clearfield, Clinton, Columbia, Elk, Jefferson, Lackawanna, Luzerne, Lycoming, McKean, Montour, Northumberland, Potter, Schuylkill, Snyder, Sullivan, Susquehanna, Union, Tioga, Wayne and Wyoming counties.  end mark

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