Feb. 8 2023 08:00 AM

New trade pacts, a new farm bill, and federal order modernization could set dairy up for long-term success.

Former house speaker Paul Yyan shared that U.S. dairy exporters have one distinct advantage over other exporters. “Goods and services around the world are traded in the U.S. dollar,” he said.

Inspire” served as the overarching theme for the 2023 Dairy Forum as the industry’s processors, leaders, and greater dairy farming community from across the globe gathered to discuss the sector’s bright future.

“I’ve said it many times, I firmly believe the U.S. dairy industry can become the world’s leading supplier of affordable, sustainable dairy nutrition. I firmly believe it with every fiber in my body,” shared Michael Dykes, the president and CEO of the International Dairy Foods Association (IDFA), the organization that hosted the Dairy Forum.

A strong foundation

In making this prediction, Dykes shared that five leadership tenets will help the U.S. dairy industry reach the goal of becoming the world’s top dairy product source. Courage, the ability to anticipate and adapt, put people first, be bold, and unite were the five items in the playbook put forth by Dykes. While all will play important roles, unity was an area that received mention throughout the meeting.

“Since I’ve been at IDFA, I have encouraged unity — unity of our industry, uniting to come together for the great good of the industry,” shared Dykes, who grew up on a dairy farm and started his career as a veterinarian in Illinois. “That requires collaboration and courage, and we know courage will inspire others to act. I believe there is far more that unites us than divides us in the dairy industry,” he said of how dairy can continue to grow.

“We have been blessed to have demand up,” Dykes said of the recent past. “Dairy is growing. Dairy is a great place to be. We’re up 12 pounds per person per year in 2021, and when the data is collected, 2022 could be even better,” said the dairy industry leader.

Dairy demand overseas

“On the export side, we’ve had two great years. Not only record volume, but we also had record value — $9.5 billion and 2.8 metric tons when it’s done for 2022. Great success,” Dykes continued.

“We know free-trade agreements work,” shared Dykes, with his eye on the horizon. “Over the last 30 years, we’ve seen a 20% increase in agricultural exports across all commodities in countries where we have free-trade agreements.”

“The TPP would have been good for dairy,” said former House Speaker Paul Ryan, who shared the stage with Dykes one day earlier. “However, once the Trump and Clinton election campaigns took place, we no longer had the votes to pass it,” he continued, regarding the Trans-Pacific Partnership (TPP).

“Dairy farmers, if you are for trade, you need to let your elected leaders know,” advised the former 20-year member of the House of Representatives. “The best ‘China Policy’ for the U.S. would be to get back into the TPP. If the President of the United States got on the phone, we could be back in the TPP. Not being part of that trade pact opens the door for China,” continued the one-time vice presidential candidate who hails from Wisconsin.

Former House Speaker Collin Peterson also agreed that trade benefits both dairy and agriculture. “I am an optimist. I believe we can move trade forward. I believe USDA Secretary Vilsack understands trade,” said Peterson, speaking later at the Dairy Forum in Orlando, Fla. “We need to get President Biden to make it a priority,” continued the two-time chairman of the House Agricultural Committee.

Trade pacts are not only important but so is trade with China, as the country is the world’s leading dairy product and agricultural importer.

“The tone of the discussion on China needs to be brought down,” advised former USDA Secretary Dan Glickman, also speaking on trade in a joint panel with Peterson. “There are areas we can work together. If we are not careful, we are going to create a wall, and that will dramatically impact agriculture and agricultural exports,” advised Glickman.

Overall, economists agree that it’s rather impressive how the U.S. dairy sector is doing despite the lack of new trade agreements.

“It’s amazing how well our dairy exports have been doing without the TPP,” shared Rabobank’s Mary Ledman in a later discussion on the topic. “Think how much better exports could be with TPP!”

Will we have a farm bill?

“I am somewhat optimistic,” shared Peterson when asked if we will have a new farm bill by September, when the current bill expires. “It could be done if certain requirements are met.

“Can ag live with the money in the current farm bill? Also, we need to avoid a fight over Supplemental Nutrition Assistance Program (SNAP) and all nutrition programs,” he advised of an area that accounts for over 75% of the farm bill. “If we have a fight, we will struggle to get a farm bill done,” cautioned Peterson.

“The Republicans want to get something passed,” advised Glickman, who served 18 years in the U.S. House of Representatives prior to serving as USDA Secretary. “The farm bill is a place where they can all agree,” he said of the Republicans who hold a majority in the U.S. House of Representatives.

Glickman also offered additional insight into nutrition and the SNAP program.

“We don’t have famine in this country. We do have food insecurity,” he said. “A poor diet is the leading cause of early mortality. That’s why expanding the Healthy Incentives project is a good step forward. Dairy should be part of Healthy Incentives,” concluded Glickman.

“We have been working at IDFA for the past four years on getting dairy seen as good for you . . . modeled after fruits and vegetables,” said Dykes of work in this area. “Fruits and vegetables today are to the place where healthcare providers can write a prescription for you for fruits and vegetables. Wouldn’t it be nice if someone wrote a prescription for you to eat more cheese, drink more milk, and eat more yogurt?” asked Dykes of the 1,100 people attending Dairy Forum.

The pilot program was first authorized in the 2018 Farm Bill. This year it’s anticipated that dairy’s portion of Healthy Incentives will be available in 12 states and some 300 stores. Dykes and other team members at IDFA are hopeful to expand the program in the new farm bill.

“It’s a simple program. When you buy a gallon of milk, you get a coupon to purchase another gallon of milk or an equivalent amount of other dairy products,” explained Dykes. “We need to keep working for this. We need to keep pushing it.”

Order reform

“I think our USDA Secretary has done a great favor, has given us a great opportunity. He has said reform is needed,” Dykes commented. “I think we can all agree reform is needed. If we can come collectively to him, he will work with us to find a path forward. I am committed to try to do that,” said the leader of the largest dairy processor organization.