By LEE MIELKE
Mielke Market Weekly
Calls continue for repeal of Country of Origin Legislation (COOL). Bob Gray, in his Northeast Dairy Farmers Cooperatives newsletter last week, warned that “We are now at one month and counting to Dec. 18. That is the likely date on which Canada and Mexico can start retaliation proceedings through higher tariffs against U.S. products being imported into their respective countries. Dairy products will be included in the retaliation.”
“After winning four World Trade Organization complaints against the U.S. on its COOL labeling law for beef, pork and poultry products, Canada and Mexico now find themselves in the driver’s seat in terms of blocking the flow of imported U.S products,” according to Gray.
“There is no other recourse for the U.S. other than repealing the COOL law that was included in the 2002 farm bill and put in place in 2010,” Gray warned. “The House immediately passed COOL repeal legislation last spring within a week after the WTO made its final ruling against COOL. However, the Senate has not acted, and now six months later, the U.S. faces significant retaliatory measures from both countries in the form of higher tariffs.”
Gray adds that “Some members of the Senate want to include a provision in the COOL repeal legislation that would allow for a voluntary designation for beef, pork and poultry products to have a ‘Produced in the U.S.’ label, but both Canada and Mexico have totally rejected this provision and have sent letters to the U.S. Trade Representative’s office stating this in no uncertain terms.”
Canada and Mexico have claimed $3.2 billion in damages against the U.S. given the problems and loss of income from beef, pork and poultry sales, according to Gray’s report, and “The U.S. Trade Representative’s office countered with a $91 million offer. So as you can see, the two sides are very far apart.”
Gray warned that the retaliatory measures will “hurt our dairy industry and result in the loss of exports, lower farm milk prices and the loss of jobs in our dairy manufacturing facilities.” He points out that, in 2014, the U.S. exported more than $1.5 billion worth of dairy products into Mexico.
“They are our largest exporting partner for dairy products,” he said. “At the same time, a number of U.S. dairy cooperatives have developed some very good markets in Canada for specialized dairy products, including milk protein concentrates and these markets could be wiped out very quickly once higher retaliatory tariffs are put in place. And the chances of getting these markets back are about zilch.”
Meanwhile, the U.S. Food and Drug Administration has issued guidelines for industry voluntary labeling that indicate whether foods have or have not been derived from genetically engineered plants.
The National Milk Producers Federation (NMPF) commended the FDA, stating that “Once again, FDA has confirmed the safety of these products. Furthermore, we are heartened by FDA’s rejection of a petition seeking mandatory labeling of foods made with genetically modified ingredients,” the NMPF said. “FDA’s rejection of the petition is a strong reaffirmation of the sound science policy underlying FDA’s approval process. Only products found to be safe for human or animal use should be approved. And if they are approved as safe, there is no basis for mandatory labeling,” NMPF says.
In other NMPF news, the Federation released an updated version of its Milk and Dairy Beef Drug Residue Prevention Manual, one of the key components of the National Dairy FARM Program. In order to share the information widely with dairy farmers, the manual can be accessed for free on the FARM program website.
Many passing on MMP
U.S. dairy producers may have opted not to obtain coverage in the new round of USDA’s Margin Protection Program (MPP). The Nov. 20 Daily Dairy Report (DDR) stated that, as of Nov. 9, “almost half of all dairy farms in America have made their annual elections for 2016 coverage,” according to a USDA press release. This implies that more than half of U.S. dairy producers had still not enrolled despite a USDA extension provided in September.”
The DDR adds that “Over the past year, the MPP program paid very little to producers outside of the two highest margin indemnification levels of $7.50 and $8 per cwt.”