Moosletter: November 2018

Moosletter: November 2018
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November 2018                                                                    Volume : 4 Issue: 11
Click here for the Dairy Revenue Protection Webinar recording
Dairy Revenue Protection Webinar
On October 23, 2018 Dr. Marin Bozic from the University of Minnesota presented a webinar on the new Dairy Revenue Protection webinar.  If you were not able to join the webinar or would like to view the webinar again, click on the blue box above for the recorded webinar.  
Listen to an interview with Chris Galen at the National Milk Producers Federation. What does the US-Mexico-Canada trade agreement mean for dairy?
A Closer look at the United States/Mexico/Canada Agreement (USMCA):
(from the American Dairy Coalition)
After 13 months of negotiations, which included nine rounds of negotiation discussing 34 separate policy chapters, the United States-Mexico-Canada Agreement (USMCA) finally was agreed upon by all three countries and, if approved by Congress, will replace the North American Free Trade Agreement (NAFTA). 
 However, the USMCA recently has received criticism from the U.S. dairy industry that it doesn’t do enough for farmers. Some felt this agreement was going to save the sector. Let’s look into this deal a bit more …
 A key feature of the USMCA was removing Canada’s class 7 pricing formula and expanding Canadian dairy markets to U.S. exports. Class 7 pricing was a huge concern in drafting this agreement because the U.S. dairy industry believed this new class pricing saturated the international markets. A win for U.S. producers in USMCA is preventing long term expansion of Canada’s dairy ingredient pricing strategy.  
 The final negotiation of USCMA actually involved China. USMCA blocks China, which is the world’s largest market for baby formula, from continuing to benefit from the Canadian Class 7 pricing scheme. USMCA puts a cap on Canadian exports on baby formula and stops further Chinese investments in Canada that were anticipated if Class 7 remained in place. If passed through Congress the way it has been negotiated, the new agreement prevents long-term loss of market share from shifting toward Canada. 
 In 2016, after China discontinued its one-child policy, a Chinese baby food company by the name of Feihe International announced it was going to invest hundreds of millions of dollars in order to build a factory in Canada to make baby formula. This new factory hasn’t opened yet, but China would be directly benefiting from Canada’s system for pricing, which would detrimentally cut into U.S. business for baby formula. If the Class 7 continued, the U.S. dairy experts estimate it would have grown to equal 20 percent of the U.S. export in just a matter of a few years as well as spur the loss of dairy farms in the U.S.
 Recall the Trump Administration worked to push back on trade agreements the U.S. deemed as unfair by increasing tariffs on certain products. As a result, many of these countries retaliated by placing their own tariffs on U.S. export products which includes cheese.  
 In Mexico, the U.S. placed new tariffs on steel and aluminum and Mexico retaliated by placing 20% to 25% tariffs on U.S. dairy products — a big problem for the U.S., since Mexico is a key trading partner for dairy. 
 Check out the statics below:
  How significant are U.S. cheese exports to Mexico ? * Facts thanks to USDEC:
·        Mexico is the  No. 1  U.S. cheese export market.
·        In 2017, the United States held a 75% share of Mexico’s cheese import market.
·        U.S. cheese shipments to Mexico were valued at $391 million last year.
·        Last year's U.S. cheese exports to Mexico increased 8% in value over 2016.
·        Mexico accounts for 28% of total U.S. cheese exports.
·        U.S. suppliers shipped 96,413 tons of cheese to Mexico in 2017.
·        Over the last decade, both the volume and value of U.S. cheese exports to Mexico have nearly tripled.
 Settling the USMCA was extremely important to protect and grow this valuable market for our U.S. cheese exports
What Is Next?
 The negotiation of USMCA still is not over because it is not yet law. The agreement must be passed by the U.S. Congress and the upcoming election will determine how this plays out. The final vote isn’t expected until early next year. 
 Since a USMCA agreement was finalized by all three countries on Sept. 30, 2018, it opens up an opportunity for ADC and the dairy industry to advocate on removing the U.S. steel and aluminum tariffs in exchange for Mexico and Canada to remove their tariffs on dairy products. While the removal of Class 7 pricing and expanding markets to Canada is a step in the right direction for dairy, the removal of tariffs to Mexico is now our focus. 
Ag Leaders Working Group
Tax Reform

The NSDA is an active partner with our “farmyard friends,” meeting for over 2 years as the Ag Leaders Working Group, representing all the major commodities.     We have been addressing issues affecting farmers and all of our economy.   Currently, property taxes comprise 48%, income taxes comprise 33% and sales taxes comprise 19% of the total tax liability within the State of Nebraska’s general fund.  It is the goal of the Nebraska Ag Leaders Working Group to outline a plan for addressing the imbalance and overreliance on property taxes to fund government services, including education.
 To that end the Nebraska Ag Leaders Working Group  agree to the following principles in the pursuit of comprehensive tax reform:
 1.     Tax reform, whether through legislation or ballot initiative, should seek a more balanced tax system to fund government services and education and benefit all property owners, including agriculture, residential, and commercial property. Collections from property, sales and income taxes shall share the burden with none of the three individually exceeding 35% of the tax liability.
 2.     Agricultural property owners currently pay a disproportional amount of the total property tax liability.  All future property tax relief produced at the state level must seek to reduce this proportional share. 
 3.     Tax reform should encourage fiscal responsibility and be revenue neutral. Actions to achieve such measures may include new tax sources or modifying existing revenue sources to provide dollar for dollar reductions in property taxes.
 4.     Reform must ensure adequate funding for high quality education for Nebraska students, but reduce the reliance on property taxes for educational funding.
 5.     Tax reform must provide fiscal restraint in government spending, including budget growth limitations.  
 The Agriculture Leaders Working Group principles for tax/education funding reform are:
1.     Reform must reduce the state’s overreliance on property taxes.
2.     Reform must seek a more balanced tax system to fund education and other government services.
3.     Reform must benefit all property owners, including agriculture, residential, and commercial/industrial property.
4.     Reform may include new sources of revenue or modifying existing revenue sources.
5.     Reform must provide fiscal responsibility in government spending.
6.     Reform should modernize our state’s education funding formula in order to reduce its overreliance on property taxes and still adequately fund K-12 education.
7.     The target amount of new property tax relief, above that currently provided in the Property Tax Credit Fund, needs to be between $600 million and $1 billion.
8.     An acceptable timeline to achieve reform is 3-5 years.
NSDA Update
2019 NSDA Annual Convention is scheduled for February 26, 2019 in Columbus at the Ramada Hotel and Conference Center.  Mark your calendars!
2019 Dairy Ambassador application process open
Midwest Dairy and Nebraska Dairy Extension are again partnering to offer a Dairy Ambassador program in 2019. This program is a Dairy Ambassadors tour Cast Dairy farm near Beaver Crossing, Nebraskayear-long leadership program where students have the opportunity to learn about the dairy community and share their love for dairy with students, future leaders and consumers while learning and advancing their leadership skills.  Ambassadors will participate in a number of events throughout the year such as Ag Literacy Festivals, Moo at the Zoo, the Nebraska State Fair, dairy farm tours, agribusiness tours and other leadership programs.  At the end of the program, Ambassadors will receive a $1,000 scholarship from Midwest Dairy.  In addition to the scholarship, Ambassadors will receive a $75 per diem for each day they participate in events. 
 Applications are to be completed online at this link:  Applications are due December 1. 
In this Issue
Flyer invitation for next generation dairy producers tailgate
Calendar of Events

November 9: Midwest Dairy Nebraska Division meeting, Lincoln, NE
November 17: Next Generation Dairy Producers tailgate, Lincoln, NE - RSVP to Kim Clark, or 402-472-6065
Nebraska State Dairy Association logo
Rod Johnson, Exec. Director
Phone: (402) 853-2028
Are you an NSDA member? Click here for membership information.
Nebraska Extension logo
Kim Clark, Dairy Ext Educator
Phone: (402) 472-6065
Thank you to our sponsors
Thank you to our sponsors
Automated Dairy Specialists      Midwest Dairy Association     Nebraska Corn Board   
SoyBest/Grain States Soya, Inc.
Aschoff Construction    Enogen Feed    Farm Credit Services     Frontier Mills, Inc.   
Nebraska Vet Services     Nebraska Soybean Board    Nutrient Advisors
Ag Processing, Inc./Amino Plus    Bio-Resources Application Management, LLC    Cappel Sales, Inc.
Hiland Dairy Foods     Midwest Livestock Systems   Progressive Nutrition
Agri-King Nutrition, Inc.     Associated Milk Producers, Inc.    Balchem Corp    Central Dairy Supply     Central Confinement Services     Connor Agriscience     Dehaan, Grabs and Associates     Ecosyl Products, Inc.     Elanco     Heartland Builders Co.       IDEXX     LG Pumping, LLC    Legend Seeds   
Nebraska Dairy Systems      Peterson Ag Systems, Inc.    Select Sires         USDA/NASS
Agropur   CMP Dairy Consulting     Custom Feed Service    Dairy Farmers of America     Dean Foods    
LALA Brands   Nebraska Farm Bureau Federation    Nebraska Cattleman
Nebraska Public Power District   RABO AgriFinance   Settje Agri Service    XFE Products
Alliance for the Future of Agriculture in Nebraska    Bills Volume Sales       Central Plains Dairy Expo Eurofins     Jisa Farmstead Cheese      Nebraska Department of Agriculture       Nebraska Department of Economic Development        Northeast Community College       West Point Dairy Products   
Nebraska State Dairy Association Mission: The purpose of the Nebraska State Dairy Association is for the promotion of dairy interests in the state of Nebraska.


Nebraska Dairy Extension Mission: As Nebraska Extension faculty with expertise in dairy production and agriculture systems, we provide science-based programs, resources, and knowledge to Nebraska’s dairy producers. Our aim is to empower dairy operations to be both sustainable and resilient while maintaining profitability. Our ideas, actions, and communications will promote resource-based stewardship while enhancing human and animal well-being.
Copyright © 2016 Nebraska State Dairy Association, All rights reserved.

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Nebraska State Dairy Association · 6409 Tanglewood Lane · Lincoln, NE 68516 · USA

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