National Farmers joins 20 other dairy groups to support new Dairy Security Act

     AMES, Iowa (April 19, 2012)—Today, National Farmers Organization joined more than 20 other dairy cooperatives and associations to support the Dairy Security Act (DSA). In a letter to the Senate Ag Committee, the groups encouraged the committee to include DSA in the 2012 Farm Bill.
     “The Dairy Security Act zeros in on low milk margins, because in the past few years we’ve seen severe volatility in the difference between milk prices and feed costs,” said National Farmers Ag Policy Analyst Gene Paul.
     DSA is an update to the safety net policies for America’s dairy farmers. The legislation would offer optional risk management and supply stabilization strategies on the federal level. DSA includes provisions similar to National Farmers’ Cooperative Marketing Initiative (CMI) and its two-tier pricing proposal introduced in 2009.
     “We are disappointed that the legislation, in its present form does not include reforms in the makeup of the Federal Milk Marketing Orders,” Paul said. National Farmers favors eliminating manufacturer make allowances, and supports the use of a competitive price as a base price, rather than end product pricing, used in recent years.
     One aspect of DSA is designed to prevent sharp price downturns. The standby stabilization program is intended to manage supply, encouraging producers to reduce milk production for short timeframes. Producers who participate in the margin protection program would be the ones required to reduce milk output.
     Under DSA, when margins fall below $4 per hundredweight (cwt.), a margin protection program will bridge the difference between the farm price of milk and average feed costs on most of a farmer’s production. Producers also have the option to buy additional margin protection at levels higher than $4.

     The Dairy Security Act
        • Lowers government spending on dairy
        • Protects dairy farmers better than today’s dairy programs
        • Helps neediest Americans by providing dairy products to food banks and            low-income nutrition programs
        • Offers voluntary participation for margin protection

     “We encourage dairy cooperatives to join together and request a federal order hearing to deal with end product pricing and make allowances,” Paul said. “And, we urge USDA to expedite the process.”
     National Farmers is a price negotiation and risk management organization for the nation’s farmers and ranchers.

National Farmers Organization applauds USTR COOL rule challenge

     AMES, IOWA (March 28, 2012) - National Farmers Organization's Board of Directors commend the U.S. Trade Representative's decision to appeal the WTO ruling about country of origin labeling, that found COOL violated technical barriers to trade.
     March 23 was the last day the U.S. could challenge the ruling, which was handed down May 20 of last year. Although WTO representatives agreed that country of origin labeling is allowable in principle, they ruled the U.S., through its labeling requirements, provided less favorable treatment to Canada's and Mexico's livestock and meat products.
     "Market integrity and transparency are at stake here, not to mention consumers' right to know where their food comes from," said National Farmers Ag Policy Analyst, Gene Paul. "We agree with U.S. Sens. Mike Enzi, R-Wyo., and Tim Johnson, D-S.D., who see the U.S. appeal as an effort to ensure the law is implemented as intended,"
     The COOL rule makes it mandatory for grocers to label where their beef, pork, chicken and ground beef originate. Animals born, raised, and processed in the U.S. can only be labeled as U.S. origin. Meat from other countries must be labeled a mixed origin product.
     The mandatory version of COOL went into effect in March 2009. Six months later, Canada filed a complaint with WTO, and Mexico quickly followed suit. The two countries' trade officials said cattle and hog exports dropped sharply, and argued that U.S. mandatory COOL amounted to an illegal, non-tariff trade barrier.
     National Farmers is a price negotiation and risk management organization for the nation's farmers and ranchers.

Risks of domestic animal disease tied to free trade examined at farm convention

     AMES, Iowa (Feb. 7, 2012)-At National Farmers annual farm business convention in West Des Moines, Iowa last week, Dr. Max Thornsberry D.V.M., examined how current WTO policies allow countries to export meat and animals to the U.S., even though diseases such as FMD, TB and Brucellosis can be present in animals in other regions of that exporting country.
     "We don't want countries with foot and mouth allowed to conduct trade and transport meat and live animals into the U.S.A., because we can't afford to have foot and mouth in this country," said Dr. Max Thornsberry a veterinarian who has traveled extensively throughout the world.
     "What we would consider normal is not normal at all in developing countries. They don't have accredited veterinarians around the country, or the infrastructure to effectively control animal disease," Thornsberry said.
     Illustrating the lack of a control infrastructure in some WTO countries, Thornsberry cited a recent trip to Nicaragua, where he asked a local veterinarian how many of 100 randomly selected cows would have Brucellosis or TB. "The answer: twelve cows would blood test positive for Brucellosis, and six would have TB," he said.
     He pointed out the potential economic devastation that could occur in the U.S., if FMD were to be found. "The last time there was a market scare in Kansas, back in 2002, a veterinarian mistakenly thought some cows who had mouth sores were infected with foot and mouth," Thornsberry said. "The futures markets went down the limit two days in a row, just imagine the fear and consumer backlash from such an event." The price fallout is estimated to have cost the industry $50 million.
     FMD is a highly contagious degenerative viral disease of hogs, cattle and other cloven-hoofed animals. The virus is highly complex and can mutate rapidly, creating problems for vaccine developers. "The real issue here in the U.S. is wildlife," Thornsberry emphasized. "What if it (FMD) occurred in white tail deer, or elkI can't imagine how we could ever free this country from foot and mouth then.
     Max Thornsberry, D.V.M., is R-CALF USA's President of the Board of Directors and Region VI Director.
     National Farmers is a price negotiation and risk management organization for the nation's farmers and ranchers.

National Farmers Organization members re-elect Olson as president, install Riniker as vice president

     WEST DES MOINES, Iowa (Feb. 2, 2012)—National Farmers members re-elected dairy producer, Paul Olson, Taylor, Wis., to his fourth term as president of the commodity marketing organization.
     Olson has led the organization in growth initiatives, expansion and refining of risk management services, and growing relationships with other agricultural associations. Olson is the sixth president of National Farmers and a third generation dairy producer. He joined National Farmers in 1969, and operates a 500-acre diversified organic farm. Paul, and his wife, Judy, own a 100-head Holstein dairy herd, with a total cattle herd of about 250.
     “I am pleased to continue the initiatives the members have supported during my leadership of the organization, focusing on marketing and risk management, and returning revenue to our members across the country as they produce grain, dairy and livestock for consumers around the world,” he said.
     National Farmers members Thursday elected Paul Riniker, Greeley, Iowa, to be their new vice president. Riniker owns a 1,200 head cattle operation, and runs a 480-acre grain operation supporting the livestock. Riniker, and his wife, Janet, also own and operate a custom silage bagging business.
     Riniker has long capitalized on and advocated National Farmers and its marketing and risk management services. “As vice president, I will continue to support our group marketing, price negotiation and risk management programs. I’m a firm believer in spreading out risk, and marketing together,” Riniker said. He has served on National Farmers National Board of Directors, and in many other capacities.
     Vice President Ron Mattos, Hanford, Calif., did not seek re-election.

At National Farmers annual ag business meeting, Farm Bill realities examined

     WEST DES MOINES, Iowa (Feb. 2, 2012)—Speaking at National Farmers annual ag business convention in West Des Moines, Iowa, Tuesday, Dr. Daryll Ray, University of Tennessee, painted a less rosy price picture for agriculture during a year of Farm Bill focus.
     The Director of Agricultural Policy Analysis Center at the University of Tennessee said the current economic expectation is that extremely low prices won’t happen again, because of a hungry world, combined with ethanol production. He said the most popular Farm Bill policy direction is toward revenue insurance as the best option.
     But, Ray noted that reality could clash with that positive picture.
     Ray’s Seven Potential Reality Clashes:

1. Producers should not expect the rate of ethanol growth experienced the last few years to continue
2. The U.S. may benefit less than anticipated from the 70 percent world food demand growth forecast for the next four decades because major population growth areas will expand their own production
3. There are no price floors
4. A possible outcome from the first three keypoints could be excess worldwide production capacity, causing years of relatively low prices
5. High-price periods are the worst times to write a Farm Bill because of a tendency to focus on provisions that work well during those elevated price periods only
6. Insurance is not well suited for incidents that affect an entire pool of insurance clients
7. Revenue insurance only works well when prices are high, but does not provide a safety net when low prices occur — an upside down safety net

     “Relative to history, crop prices are extremely high, they (writers of the Farm Bill)
     come up with solutions that are just fine when prices are high,” Ray said. “But this is the worst time to write a Farm Bill.”
     Ray noted that while the U.S. has participated in the export markets, it has not lived up to the expectations that people have talked about. “We have been extremely flat as far as the tonnage of grain goes.”

Land ownership, commodity speculation, crop insurance key policy positions at National Farmers annual business meeting

     WEST DES MOINES, Iowa (Feb. 2, 2012)—Delegates at National Farmers National Convention, meeting in West Des Moines, Iowa, passed four key policy positions this week addressing crop insurance funding levels, commodity speculation reform, a national grain reserve, and estate tax relief connected to land ownership.
     National Farmers members voted yes on a policy position supporting current funding levels for the federal crop insurance program. The position notes the effectiveness of crop insurance in protecting farm incomes, and its importance for growers in securing operation loans.
     Belonging to National Farmers, which provides ag marketing and risk management, members voted to support legislation adding transparency to futures markets, and close the door to excessive speculation by tightening key investment laws. The resolution also calls for clarifying the oversight mission of the Commodities Futures Trading Commission.
     National Farmers also supports establishing a National Grain Reserve Program as advocated by National Farmers Union, and proposed by the Agricultural Policy Analysis Center, University of Tennessee Institute of Agriculture.
     “Each of these three measures would all work to help producers manage volatility or supply, or protect against disaster – weather and financial – as they navigate their farm businesses through today’s economic landscape,” said National Farmers Ag Policy Analyst Gene Paul.
     In another policy resolution, National Farmers members expressed increasing concern over foreign investors, insurance companies, lenders and commodity buyers, gaining advantage in farmland purchases, with concentration of capital. Members voted in favor of eliminating the 1031 tax exchange.
     Part of the same policy position, National Farmers members also voted to support estate tax relief for independent family owned farms, ranches and small businesses to facilitate the transfer of those enterprises to the next generation. Members said yes to making the 2010 tax package permanent, which sets the exemption of $5 million per individual and $10 million per couple. Estates worth more are taxed at a 35 percent rate.
     National Farmers members also supported indexing the exemption levels that reflect increases in asset values due to inflation, the step-up basis.
     “Estate taxes are of great concern as farmland moves from one generation into the hands of the next,” says Paul. “Handling this major concern more fairly today, will provide for better opportunities for a new generation of producers, an issue of critical importance in American agriculture.”
     National Farmers is a price negotiation and ag risk management organization for the nation’s farmers and ranchers.