Trade is pinched, trust is lacking, engagement is paramount

MADISON, Wis. — Dairy trade is dealing with tailwinds and headwinds, according to American Farm Bureau Federation (AFBF) economist Danny Munch. It was one of numerous topics that he addressed here in Madison on October 2nd at the American Dairy Coalition’s (ADC) Dairy Hot Topics session. Nearly 100 people were in attendance to hear his presentations during the recent World Dairy Exposition. ADC CEO Laurie Fischer called it “a straight-talk update from someone who really cares what’s happening on your milk check.” (See related article).

On the subject of dairy trade — tailwinds and headwinds — Munch gave the following overview:

While overall U.S. ag trade shows a $20 billion trade deficit, dairy holds a $1 billion surplus, with Mexico (30%) and Canada (15%) remaining as the top markets while China’s share is slipping.

Exports of co-products remain vital, with 85% of lactose, 75% of nonfat dry milk, 69% of whey leaving the country.

Still, Munch warned of falling Chinese imports and of rhetoric that cools foreign demand. He zoomed out to global competition showing Brazil’s vast, low-cost production and U.S. port inefficiency.

“Not one U.S. port ranks in the world’s top 50,” he said. “Until our infrastructure improves, others will have the advantage.”

Farmer-first priorities: Transparency and voice

AFBF’s dairy agenda centers on two grassroots priorities that didn’t make the recent Farm Bill:

The first is milk check transparency. Proprietary handlers must break down payments; cooperatives handling over 70% of milk sales are exempt from this requirement because the law views the cooperative processor as ‘the producer.’

AFBF and ADC want comparable disclosure from co-ops so farmers can see the regulated minimum and the handler’s adjustments, including any pooling or de-pooling.

Munch urged dairy farmers to share milk checks stubs after removing their personal information, to show confusing line items, such as ‘market adjustments,’ and ‘PPD’ labels or other deductions that don’t add up. Share these with Farm Bureau, ADC, and market administrators.

The second priority is modified block voting, which would allow individual farmers to vote independently on Federal Order referenda even if their co-op block votes. “If farmers want their co-op to vote for them, fine,” he said. “But they should have the option to vote on their own if they choose.”

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