Dairy Policy

Reciprocity and Balance: The New Blueprint for U.S. Agricultural Trade Agreements

Thu, 05 Mar 2026 21:01:55 GMT

Ambassador Julie Callahan is the chief ag negotiator at the U.S. Trade Representative, and she reports positive momentum toward rebuilding trade agreements equating to a positive U.S. ag trade balance.

“We came into a situation in January 2025 where the US ag trade deficit was ballooning in a really unsustainable manner,” she says.

At the beginning of 2025, USDA forecasted a $50 billion deficit for U.S. agricultral trade.

“Compare that to an agricultural trade surplus in 2020 when President Trump left office, of a $6 billion surplus. So we were $56 billion in the hole, you might say, at the beginning of the administration, but through the efforts of the president ensuring trading partners understand they need to treat U.S. farmers and ranchers right, we are seeing real shifts in our trade balance and chipping away at the deficit toward a surplus.”

Trade Wins Highlighted by Government Officials

Callahan points to eight signed trade agreements with: Malaysia, Cambodia, El Salvador, Guatemala, Argentina, Bangladesh, Taiwan and Indonesia. She says these are binding agreements, where the foreign governments are:

lowering tariffs for U.S. ag products
removing unfair trade practices
and lifting regulatory barriers

“These are serious binding trade agreements that will deliver real value for U.S. farmers and ranchers,” Callahan says. And when asked if Congressional action to codify agreements is necessary, Callahan says that action would be supported but should not be necessary.

“These foreign governments have made binding commitments in terms of adjusting tariff schedules, they are also making regulatory changes. USTR will be enforcing these agreements. They are enforceable.”

Examples of enforceable commitments include:

Indonesia removes its import licensing requirements
Malaysia accepts facilities on their registration list as long as FSIS has them on their list

The Future of the U.S./China Trade Relationship

At the 2026 Top Producer Summit, Lyu Jiang, minister for economic and commercial affairs at the Chinese Embassy in the U.S., characterized the U.S. and Chinese relationship being a phase of stabilization.

When prompted to react, Callahan agreed saying, “We very much want a stable, predictable, transactional relationship with our Chinese counterparts. We do want to normalize, bring reciprocity and balance back to our trade relationship and ensure that U.S. farmers, and ranchers can benefit from the Chinese market again.”

She says her office is balancing the agricultural stakeholders wanting access to the large-scale Chinese market with a strategy to also diversify trade partnerships as to not be too reliant on a single country.

“We are working through the agreement on reciprocal trade to diversify our markets so we don’t overly rely on China,” she says. “We are looking to address that very serious situation where China may see agriculture as a pain point for the United States.”

With the upcoming meeting of President Trump and President Xi in April, Callahan says her team and the larger U.S. trade team is working to prepare and set the stage for a positive outcome. Callahan points to specific issues to be worked through and market focuses spanning crops and livestock.

“Both sides want the meetings to be a success,” she says. “Certainly, in the meetings leading up to the president level discussion, we will be having open and frank conversations with China where we need to see areas of improvement. That’s not limited to soybeans to sorghum. Our beef producers don’t have access to China due to China’s unfortunate actions that are not renewing facility registrations.”

The Review of USMCA

With a goal of “reciprocity and balance across north America” the trade team is working on its review of the North American trade deal.

“We absolutely understand the importance of USMCA for U.S. farmers and ranchers,” Callahan says.

Describing this as a “comprehensive review” she says that spans:

Look at what is working
Maintain what is working
Improve on areas not be delivering the benefits U.S. farmers and ranchers expect

She brings up the overall trade balance with Canada and specifically, Canadian dairy.

“With Canada, we went from a $3 billion deficit in 2020 and now we have an $11 billion ag trade deficit. So there are certainly areas for improvement, and we’re taking all of our stakeholders’ comments into consideration,” Callahan says.

Trump Signs Whole Milk for Healthy Kids Act into Law

Thu, 15 Jan 2026 15:52:05 GMT

President Donald Trump has signed the Whole Milk for Healthy Kids Act of 2025 into law, clearing the way for whole and 2% milk to return to America’s school cafeterias for the first time in more than a decade.

Schools Regain Full Milk Options

The bipartisan legislation reverses Obama-era restrictions that limited federally supported school meal programs to fat-free or low-fat milk options. The bill passed both chambers of Congress unanimously in late 2025, signaling broad agreement around child nutrition, school meal flexibility and dairy market access.

Under the new law, schools may now offer a wider range of fluid milk choices, including flavored and unflavored organic or conventional whole, 2%, 1%, skim and lactose-free milk. Supporters say the expanded menu better reflects current nutrition science and aligns school offerings with what families commonly consume at home.

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Farm and Dairy Groups Sing Praises

Farm organizations quickly praised the signing, calling it a practical policy win for both students and farmers.

“Farmers applaud Rep. GT Thompson and Sen. Roger Marshall for working to return whole milk to America’s schools, and to the president for signing the legislation today,” says Zippy Duvall, president of the American Farm Bureau Federation. “The commonsense, bipartisan bill ensures children will have access to important vitamins, protein and other nutrients while supporting dairy farmers who need access to expanded markets for their product.”

Dairy industry leaders emphasized that milk’s full nutritional profile was a key driver behind the legislation.

“Dairy farmers and their cooperatives couldn’t be more thrilled that whole and 2% milk is returning to school meals,” says Gregg Doud, president and CEO of the National Milk Producers Federation. “Dairy is a nutrition powerhouse that should be used to its fullest potential — and that means making it available in the same varieties families consume at home.”

Doud says NMPF is prepared to support implementation efforts as schools update menus and procurement plans.

“We are ready to help schools and USDA in any way we can as this important legislation is implemented, and we thank the Trump administration, our advocates on Capitol Hill, and everyone who has worked to make school meals better through increased access to dairy,” he says.

The International Dairy Foods Association also hailed the signing as a long-awaited milestone.

“The long wait is over! Whole milk is coming back to schools,” says Michael Dykes, president and CEO of IDFA. “This law is a win for our children, parents and school nutrition leaders, giving schools the flexibility to offer the flavored and unflavored milk options, across all healthy fat levels, that meet students’ needs and preferences.”

Dykes thanked a broad group of lawmakers for advancing the bill, including U.S. Rep. Kim Schrier and Thompson, and U.S. Sen. Peter Welch and Marshall, as well as congressional committee leadership involved in shepherding the legislation through Congress.

“IDFA is deeply grateful to President Trump for signing the Whole Milk for Healthy Kids Act into law,” Dykes says. “IDFA and our members stand ready to partner with USDA, states and school nutrition leaders to help schools offer the milk options kids prefer so more students can benefit from the 13 essential nutrients that milk provides.”

Schools could begin offering whole and 2% milk as soon as the next school year.

What's Missing in the Big Beautiful Bill When It Comes to Agriculture?

Tue, 10 Jun 2025 17:22:26 GMT

The fate of President Donald Trump’s One Big Beautiful Bill is with the Senate. The 1,000-page bill includes nearly $4.9 trillion in tax breaks and budget cuts, and is also packed with priorities that cover agriculture . That includes one provision that will allow community banks to pass along lower interest rates to ag producers. However, not all of agriculture’s wants are in the bill.

American Farm Bureau Federation (AFBF) recently dug into the details of the massive bill being debated in Washington. According to the nonpartisan Congressional Budget Office (CBO), the House-passed version of the One Big Beautiful Bill Act would increase spending for agriculture-facing programs by $56.6 billion over the next decade. Of that increase, $52.3 billion is for enhancements to the current farm safety net, including higher reference prices for ARC and PLC, and $4.3 billion is for trade promotion, livestock biosecurity, research and rural school funding.

According to AFBF, the One Big Beautiful Bill Act would increase agriculture-facing programs spending by $56.6 billion over the next decade (fiscal years 2025–2034).

(American Farm Bureau Federation (AFBF) )

According to AFBF, here’s what the current version of the bill includes for farm bill provisions (Title 1, Subtitle B-Investment in Rural America):

Updates and funding for many core agriculture titles through 2031.
Enhancements to safety nets including ARC, PLC and Dairy Margin Coverage (DMC) through the 2031 crop year.
Increases to reference prices for major covered commodities between 11% to 21% under the farm bill provisions of the bill.
Addition of a reference price escalator mechanism beginning in the 2031 crop year, which AFBF says would increase reference prices by 0.5% annually on a compounded basis. That increase is capped at 115% of the original statuary value.
Permits for farmers to add up to 30 million new base acres
Updates to ARC by adjusting revenue guarantee and the payment cap beginning in 2025. That would increase the coverage threshold to 90% of benchmark revenue, and increase the payment cap of 10% to 12.5%.
Enhancements to the DMC program and an increase of Tier 1 coverage eligibility from 5 million pounds to 6 million pounds per farm.

Proposed changes to the safety net

(AFBF)

Changes to Conservation Programs
AFBF’s analysis of the reconciliation bill shows long-term funding authority for USDA’s major conservation programs will continue through 2031. That includes the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP) and Agricultural Conservation Easement Program (ACEP).

The levels are higher than what was included in the 2018 farm bill, but align with funding under the Inflation Reduction Act (IRA), making these programs permanent baseline versus new program expansions.

AFBF says the bill doesn’t retain all IRA-funded initiatives.

“For example, it rescinds $450 million in unobligated IRA funds that had been allocated for competitive forestry grants to non-federal landowners. According to the Congressional Budget Office, these adjustments collectively result in a net reduction of $1.8 billion in conservation spending over the next decade,” said the AFBF analysis. “The bill also renews smaller initiatives that were not funded in the last farm bill extension. This includes the Grassroots Source Water Protection program, which safeguards well water, and the Voluntary Public Access and Habitat Incentive program, which rewards farmers for opening land to hunting and recreation. In addition, the Feral Swine Eradication and Control Pilot Program, a vital initiative to combat over $1.6 billion in annual damages caused by invasive wild pigs, is extended with new funding through 2031.”

Focus on Trade
Another important element included in the House version of the Big Beautiful Bill includes establishing a new Agricultural Trade Promotion and Facilitation Program, which would be similar to Market Access Program (MAP) and Foreign Market Development (FMD), while also providing $285 million annually in permanent, mandatory funding through a separate account.

“Because the bill does not modify or replace MAP or FMD, which are typically funded at $200 million and $34.5 million per year, respectively, the new program effectively doubles USDA’s total trade promotion capacity,” said AFBF’s analysis.

National Pork Producers Council (NPPC) CEO Bryan Humphreys says the trade portion of the bill, as well as the tax provisions, are a “win” for livestock producers.

“We’re very pleased with what came out of the House version. We included in there were animal health priorities, some additional funding for MAP and FMD to promote our product internationally, and then, of course, the tax package was included in there on things like 179, bonus depreciation and estate taxes,” he says. “We are very pleased those were in there even if some of our other assets we need to be in the farm bill weren’t able to make it in there.”

Humphreys says the House version of the reconciliation bill includes funding for animal health priorities, including $233 million per year on animal disease prevention and response.

What’s Not in the Bill?
According to Humphreys, there’s one major priority that didn’t make it into the Big Beautiful Bill — and that’s provisions for Prop 12.

“We still need a farm bill to address Proposition 12 in California. At the end of the day, this is an issue that, as California continues to regulate outside of their borders, is not just a pork industry issue. It is an American agriculture issue,” he says. “We’ve been asking — along with the American Farm Bureau, Corn, Soy and others — for Congress to address this issue of California regulating farmers outside of their borders. And we still need that to be addressed.”

Humphreys says a farm bill is still needed to address Proposition 12 in California. But if a farm bill doesn’t happen this year, Humphreys says NPPC is exploring other options to do it.

“Even though there are other solutions for Proposition 12 and other potential vehicles out there that we’ll continue to explore with our friends on the Hill, at the end of the day, we still believe as American pork producers that America and the pork industry need a farm bill — a skinny version, a large version or whatever. We need to maintain that coalition not just for now, but for decades to come as well. We’re not ready to give up on that yet,” Humphreys says.

Renewable Energy In The Bill
Energy programs are another area of focus under the reconciliation bill. According to AFBF, USDA’s farm energy and biofuel programs are reauthorized through 2031 to spur renewable energy innovation in rural America. That would include the Biobased Markets Program, which is a program that promotes biobased products through federal procurement. It also addresses the Bioenergy Program for Advanced Biofuels, which provides payments to producers of biodiesel, cellulosic ethanol and other next-generation fuels.

Tax Provisions That Would Benefit Ag

Farm CPA Paul Neiffer calls the tax provisions within the House version of the bill “very favorable for agriculture,” rating them a 8 or 9 out of 10. Here’s why:

As of Jan. 20, farmers will have 100% bonus depreciation for the next four years
The Section 199A deduction that was at the 20% level will now be bumped up to the 23% level.
Cooperative deductions will still be included
Starting next year, Section 179 will increase to $2.5 million, up from $1 million
An increase in the gift tax exemption amounts to $15 million per individual and $30 million per couple, adjusted for inflation annually.

Neiffer say farmers who’ve built net worth through land or other assets, there’s a piece of the legislation that will also benefit them.

“The lifetime exemption starting next year will be $15 million, and it’s made permanent,” Neiffer says.

Lower Interest Rates for Ag Producers?

According to Jeff T. Kanger, president of First State Bank in Lincoln, Nebraska, there’s another provision that will allow community banks to pass along lower interest rates to ag producers and rural housing.

“The community banks have less tax exposure and can therefore pass along some interest savings to customers,” Kanger told AgWeb. “This provision is very important to a lot of our growers.”

It’s called the “Exclusion of interest on loans secured by rural or agricultural real property.” According to the provision text, it “allows for a partial exclusion of interest on certain loans secured by rural or agricultural real estate. Speciﬁcally, it allows for the exclusion of 25 percent of interest received by a qualiﬁed lender on any qualiﬁed real estate loan.”

What’s Next?
The Senate could roll out its version of bill later this week, which is expected to include changes from the House’s version that passed in May by one vote.

House Speaker Mike Johnson also said this week he still believes July 4 is a realistic target for passing President Donald Trump’s “big beautiful bill.”

RFK Jr.: Friend or Foe to the Dairy Industry?

Thu, 27 Feb 2025 16:11:48 GMT

Robert F. Kennedy Jr.'s confirmation as Secretary of Health and Human Services (HHS) has sparked a lively debate in the dairy industry. While some see his “Make America Healthy Again” stance as a win for dairy products, others worry about his controversial views on raw milk and ultra-processed foods.

The big question is — will RFK Jr. be a friend or foe to the dairy industry?

Dairy Employee Milking Parlor_Reuters

(Reuters Marketplace - DPA Pictures Alliance)

RFK Jr.: Catalyst or Controversial Figure?
RFK Jr. has emerged as a polarizing figure whose name is now associated with a broader call for re-evaluating nutritional policies. His willingness to challenge long-standing dietary guidelines — particularly the vilification of fat — has put him at the center of a broader push to rethink what’s truly “healthy.”

While some see his rhetoric as a much-needed shake-up that could benefit both dairy producers and consumers, others worry his controversial positions could lead to increased regulatory uncertainty and public health risks.

Newly appointed Secretary of Agriculture, Brooke Rollins, recently sat down with Farm Journal at the Top Producer Summit and shared her thoughts on RFK Jr.’s impact on agriculture.

USDA Secretary Brooke Rollins headlined the opening of the 2025 Top Producer Summit in Kansas City, Mo. Moderating the discussion was Kansas Senator Roger Marshall.

(Rhonda Brooks)

“I know there’s a lot of concern in the community, and I understand that with the confirmation of Secretary Kennedy, RFK Jr., at HHS. Some of the things he has said in the past, I know, if implemented, would be devastating for a lot of our farming community,” Rollins said. “I believe, though, and maybe it’s the optimist in me and in the relationship that he and I have built, I have found him to be extremely reasonable.”

Despite concerns about Kennedy’s past statements, Rollins remains hopeful that open dialogue and collaboration will help navigate any policy disagreements.

“I believe he was very truthful and sincere when he said we will work this together. Will we have disagreements? Probably so. But when we do, we just take them to the President,” she Rollins said. “There may be a few of those [disagreements] in the coming months and years, but I am more confident than ever before that he understands the implications — at least a lot of them — of what would happen if some of these more bold ideas of his would get implemented.”

While policy clashes are inevitable, Rollins sees Kennedy’s appointment as an opportunity to drive important discussions — particularly on issues such as childhood obesity and nutrition policy.

“I think what Secretary Kennedy represents is a new day in America,” Rollins said. “We have a chronic childhood obesity disease issue in this country, and his focus on nutrition is really important. I’m looking forward to working with him on things like the food stamp program and the nutrition programs out of USDA. We’re going to be forced to work together, whether we want to or not, on dietary guidelines and other things. There’s a lot of work ahead between the two of us, but I remain optimistic we will get to the right place for our ag community.”

Kennedy’s Stance on Raw Milk
Kennedy has said he only drinks raw milk , and his recent endorsement of raw, unpasteurized milk has raised eyebrows among public health officials and industry leaders. He has criticized the Food and Drug Administration (FDA) for its stringent regulations against raw milk. In fact, Kennedy has referred to the FDA’s regulations on raw milk as part of the agency’s “war on public health.”

However, the FDA and numerous health experts warn consuming raw milk poses significant risks, including exposure to harmful bacteria that can lead to serious illnesses. Promoting raw milk could potentially result in increased health incidents, tarnish the dairy industry’s reputation and invite stricter regulatory scrutiny.

His Case for Whole Milk
While Kennedy’s positions on raw milk have sparked debate, his views on nutrition align with those advocating for a return to full-fat milk. The push for whole milk in schools — a movement that recently saw bipartisan support in Congress — has gained traction, with many arguing milk fat is not the enemy it was once made out to be.

Whole Milk

(Canva)

“Fat in milk is not a health risk,” noted Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF) , during a recent Farm Journal Unscripted podcast, “The majority of both parties in the House of Representatives recently agreed we need to get whole milk and 2% milk back in our schools in this country. I mean, I can’t think of something that’s more make America healthy again than this topic.”

RFK Jr.’s support of whole milk comes at a time when fluid milk is experiencing a resurgence, signaling a shift in consumer preferences toward full-fat dairy products.

“Last year, for the first time in 30-some-years, fluid milk consumption is actually on the uptick in the United States,” Doud said. “I think this whole conversation [on whole milk] is causing consumers to turn a corner — and we have to help them understand whole milk is not a bad thing. It’s something us farm kids have known forever.”

A Return to Fat and Flavor?
For decades, dietary guidelines steered consumers away from fat. However, that narrative is shifting. RFK Jr. has positioned himself as an advocate for real, minimally processed dairy products, arguing foods such as butter and whole milk have been unfairly demonized for decades.

Butter

(Canva)

Supporters argue the full-fat versions of milk and butter not only taste better but also provide essential nutrients being lost in a sea of processed alternatives.

“We had this whole conversation decades ago that eggs and bacon and butter were bad for you. I don’t know how we got off on this, whether it was the dietary guideline conversation, but I think it got totally off track. I agree with [RFK’s] notion that we have to get this realigned again.”

This shift in perspective comes at a time when butter consumption, both in the U.S. and globally, is on the rise.

“Look at butter consumption in the U.S. and in the world — it has been a driving force for dairy,” Doud noted. “We have completely changed dairy production in the U.S. for more solids and more butterfat. The demand for it is there.”

The Limits of Kennedy’s Influence
While RFK Jr. is a strong advocate for rethinking nutrition policy, his ability to directly influence federal dietary guidelines is limited. Although his position at HHS allows him to push for changes, the authority to revise the nation’s Dietary Guidelines ultimately lies with USDA, not HHS.

Nina Teicholz, author of “The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet,” recently touched on this during a podcast with NMPF .

“There’s a lot of support for changing our nutrition policy in various ways, in ways I consider to be good,” Teicholz said. “I know there’s support for bringing whole milk back to schools, and I think that will be supported by Bobby Kennedy. But really his whole focus of control is going to be about drugs, healthcare, all of the domain of HHS. And the action on food and dietary policy is going to happen at USDA.”

Friend or Foe?

RFK Jr. Swearing In

(Photographer: Jason C. Andrew/Politico)

So, will RFK Jr. be a friend or foe to the dairy industry? The answer isn’t entirely clear. On one hand, his push for whole milk and full-fat dairy products aligns with what many in the industry have been advocating for, especially with growing support for bringing these options back into schools. On the other hand, his stance on raw milk and some of his broader views on nutrition policy could bring some challenges and uncertainty.

One thing is for sure though – RFK Jr. is shaking up the conversation about food, health, and nutrition.

Your Next Read: Rethinking the Term ‘Cheap Labor’ in the Dairy Industry

Iowa Secretary of Ag Weighs In on The H5N1 Battle, Vaccine Potential And Trade Sensitivities

Wed, 29 Jan 2025 13:43:49 GMT

Eggs continue to be a hot topic in the news as supplies are down, prices are up – and expected to go even higher – and consumers are understandably concerned.

At the center of the issue, fanning the on-going problem for poultry and dairy producers as well, is the Highly pathogenic H5N1 avian influenza A virus (HPAI H5N1).

AgriTalk Host Chip Flory broached the topic with Iowa Secretary of Agriculture Mike Naig on Tuesday.

At the heart of their conversation was a two-part question – how does the U.S. address the virus and, in the process, prevent any potential negative ramifications on trade?

Naig says the federal government is taking what he described as a three-legged stool approach to addressing the problem in both industries.

He described the three legs of the stool as being USDA’s Animal and Plant Health Inspection Service (APHIS), individual state animal health officials and industry.

“We work very closely with APHIS on this, meaning that they’re the ones that are providing the indemnity payments to producers. They are providing the disposal and cleanup assistance, but they must work in close collaboration with the states and state animal health officials,” Naig says. “And then, of course, you’ve got to have the third leg, which is industry.”

Biosecurity Measures
Naig noted that while the virus hit the poultry industry hard in 2015, it struck even harder in 2024.

“It’s not just in the Midwest or West, it’s been really all across the country now, affecting the egg laying industry, broilers and turkey production,” Naig says.

A significant positive, Naig says, is that biosecurity measures in the poultry industry appear to be preventing farm-to-farm spread. “The industry continues to get high marks for that, which wasn’t the case in 2015, which was so devastating because we didn’t have those strategies in place.”

“I believe, and our experience has been, that our USDA partners in this regard have been very strong,” he adds.

As Naig addressed the three-legged stool approach the U.S. is taking to addressing the virus in dairy, he says the three partners have more work to do.

“Frankly, there’s been a lot of criticism to share around the three legs, if you will, on how states have reacted, or how strongly USDA should have reacted, and what the industry is doing to try to contain that virus. So, I would say on the dairy side of things, it’s a different story (than in poultry). There’s a lot more work that’s yet to be done to even understand how that virus is impacting those (dairy) herds.”

What Is The Role For Vaccines?
Flory asked Sec. Nagy whether he believes a vaccine could be part of the solution to the virus or whether that would set up too many trade barriers. Flory also asked whether the virus is stable enough for a long enough period of time for a vaccine to be developed that would work effectively.

Both are questions the U.S. is grappling with as it tries to get ahead of the virus in dairy and poultry.

Earlier this month, Reuters reported the U.S. will rebuild a stockpile of avian influenza vaccines for poultry that match the strain of the virus circulating in commercial flocks and wild birds, citing the Department of Agriculture.

Naig told Flory that he believes a vaccine could be developed, with regard to poultry specifically, and its use negotiated into trade agreements.

“Those are challenges, and yet those are things that can be worked on and can be done, but it’s not easily done. I would want to put a flag there,” Naig says.

“I’m supportive of developing … we should try to figure out whether this can be an effective tool. If you’re in the broiler business or if you’re in the turkey meat business or if you’re in the egg business or maybe you’re in the genetics business, those are very different in terms of how you view that vaccine.”

Naig explains part of the different viewpoints on vaccine use have to do with the difference between poultry business segments.

“We need to recognize that those sectors are different in how they’ll view and potentially use a vaccine,” Naig says.

“Don’t treat them all the same. It’ll make way more sense for some than others.”

Naig did not weigh in on vaccine development for the dairy industry specifically.

The full conversation between Naig and Flory on AgriTalk is available below.

Your next read: Think Egg Prices Are Already Too High? USDA Says Retail Egg Prices Could Jump Another 20% in 2025

What The Trump Administration's Mass Deportation Plans Could Mean for Agriculture

Mon, 23 Dec 2024 18:47:38 GMT

Farmers and food industry leaders are warning that President-elect Donad Trump’s plans to deport millions of immigrants could devastate agriculture — an industry in which immigrants make up a good chunk of the workforce.

Nearly half of all farmworkers are undocumented, and industries such as dairy and meatpacking plants are especially vulnerable to labor shortages.

“Admittedly, there are some people who slip through,” says Scott VanderWal, vice president of the American Farm Bureau Federation. “Perspective employers are required to take documentation that appears to be legal and valid. There are times when that’s not the case and then ICE [U.S. Immigration and Customs Enforcement] comes in and cleans house, the workers disappear and go wherever they take them and the employers are left without help.”

While the H-2A visa program has grown, it only covers seasonal work and cannot replace year-round jobs at meat processing plants and on dairy and pork farms.

“Our packing plants need labor. Many of our farms use temporary visa labor — educated, skilled individuals work on our sow farms,” says Lori Stevemer, president of the National Pork Producers Council. “We have been experiencing an increased number of denials over the past year, which really makes it a challenge to find workers. The H-2A visa doesn’t work well when we have animals that need care 24/7, year-round.”

Experts say mass deportations would disrupt food production, raise prices and jeopardize the stability of U.S. agriculture.

Deportation falls under the Department of Homeland Security. President-elect Trump has selected South Dakota Republican Gov. Kristi Noem to lead that agency.

“With Governor Noem at the helm, she’s going to bring common sense to that discussion and make sure we don’t close businesses, make sure we get everyone in line, get the workforce in line and then make sure we’re following our country’s rules,” says Hunter Roberts, secretary of South Dakota’s Department of Agriculture and Natural Resources.

Meanwhile, farm groups continue to urge for reforms to immigration policies or a guest worker program to secure a stable workforce.

“At the same time as controlling the border, we need to overhaul our labor system,” VanderWal says. “We need to make H-2A apply to your own workers or come up with a decent program that will help.”

We need some type of H-2A visa reform to allow those workers to stay year-round, Stevemer adds.

Even then immigration is likely to continue to be a political hot potato in 2025, and labor shortages will continue to top the list of challenges for agriculture.

Judge Blocks Rule Allowing H-2A Workers to Unionize in 17 States

Thu, 12 Sep 2024 15:30:02 GMT

A ruling by a federal judge has blocked the enforcement of a U.S. Dept. of Labor (DOL) rule designed to protect H-2A farmworkers from retaliation related to union organizing in 17 states.

The decision was made by U.S. District Judge Lisa Godbey Wood, who found the rule unconstitutional because it conflicted with the National Labor Relations Act (NLRA) by granting collective bargaining rights to farmworkers, a right that Congress has not legislated for under the H-2A program.

The blocked rule was part of a broader effort by the DOL to enhance protections for farmworkers under the H-2A visa program. This program allows U.S. employers to bring foreign nationals to the United States to fill temporary agricultural jobs. The rule aimed to prevent employers from retaliating against workers who engage in activities related to self-organization or other concerted activities concerning wages or working conditions.

Judge Wood’s ruling specifically restricts the enforcement of this rule in the states that were part of the lawsuit, which include Florida, Georgia, South Carolina, Louisiana, Arkansas, Kansas, Idaho, Indiana, Iowa, Missouri, Montana, Nebraska, North Dakota, Oklahoma, Tennessee, Texas, and Virginia. The judge argued that the DOL overstepped its authority by creating rights not granted by Congress, effectively acting beyond its constitutional powers.

Bottom line:
The ruling affects agricultural employers’ compliance costs by potentially reducing the immediate financial and administrative burdens associated with the blocked provisions. While the ruling alleviates some immediate compliance burdens, agricultural employers must still navigate the complexities of the H-2A program.

Is the Great Financial Reset Now Underway?

Mon, 19 Dec 2022 19:28:54 GMT

Dairy farmers are finishing a strong financial year, despite concerns about labor and feed costs, and those concerns are at the forefront of conversations as they enter 2023.

One major bright spot in 2022 is domestic dairy demand, which is on a record pace. During Farm Journal’s Milk Business Conference (MBC) this week in Las Vegas, it was clear it’s now a question on if inflation and higher dairy prices at the store will eat into consumers shopping decisions in 2023. “I think the cost of everything, and of course, water issues are huge in California,” says Arlene Vander Eyk, a dairy farmer in Pixley, California.

It’s not just dairy products seeing the impact of inflation. Dairy farmers from across the country are wading through the reality of higher feed prices, input prices and inflation across the board.

“Inflation has reached a zenith, it did so back in March. It’s now coming down,” says Dan Basse, president AgResource Company . “The question is, ‘How far will it fall in 2023? And what’s the new natural rate of inflation?’ Back in the last 10 years, it was somewhere around 1.4%. We now think it’s closer to 3% to 3.5%, meaning that interest rates are going to be staying higher.”

The Consumer Price Index (CPI) this week showed a positive sign and the rate of inflation is slowing. In the 12 months through November, the CPI climbed 7.1% which was the smallest advance since December 2021, and followed a 7.7% rise in October.

The annual CPI peaked at 9.1% in June, which was the largest increase since November 1981.

However, inflation remains above the Fed’s 2% target. And as the Fed make a decision on more rate hikes in 2023, Basse is dubbing it the “Great Reset,” and one that he says is costing farmers more money on nearly every corner of the farm.

“If you look at seventh district data for the Kansas City Fed, this is the big farm states and the I-States in the middle of the country, they are now looking at operational loan costs being around 6.8%,” says Basse. “If you needed to borrow money to buy farmland, it’s about 6.5%. This is up about three percentage points from last year substantially. And so, whatever your interest rates costs were last year, it’s going to be double.”

Basse thinks interest rates could increase again early next year. With the Fed Rate hike this week, he thinks two more could be coming in 2023.

“The great financial reset is happening where interest rates are rising,” says Basse. “There’s a new asset class called cash. And as we look forward, I think that reset will have a big impact on recall repricing assets, not so much farmland but equities and lots of other things and farmers need to be aware of that,” Basse says.

Farm Journal’s Washington correspondent, Jim Wiesemeyer, says he’s more concerned about 2024 than 2023 in terms of the great financial reset and impact on agriculture.

“Later in 2023, I think you’ll see some of the pressures start, because as the carryover from relatively firm prices, this past year play out and some of these ad hoc disaster payments are spent and other foreign program payments. So yeah, 2024 could be some crunch times. It has to be cash flow, your cash flow is your predominant and cutting costs,” Wiesemeyer says.

Sen. Stabenow Supports CFAP Freeze and Review

Thu, 28 Jan 2021 20:13:22 GMT

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) says she supports the Biden Administration’s move to freeze payments under the Coronavirus Food Assistance Program (CFAP) in order to review the rules put in place in the waning days of the Trump Administration.

USDA posted notice on their CFAP web page Wednesday night that program payments will stop while the administration reviews all rules put forth in the lame duck portion of the Trump Administration. USDA will continue to take applications for the program in the interim. Most directly affected is $2.3 billion in leftover CFAP 1 & 2 dollars that were opened up for contract growers and others who were left out of earlier programs.

“I think it’s important, and I agree with the idea of pausing and reviewing where we are now,” Stabenow says. “There’s dollars that have not have not been used. Where can we make sure that we are effectively using the dollars that remain?”

Stabenow says the legislation creating the CFAP programs call for specific assistance which was never given out. She wants those programs to be addressed with the remaining dollars.

“There are things that we wrote in that they should do that they did not do, like supply chain issues - one and a half billion dollars that would deal with some of the issues that are challenging our farmers who, because they’re in the bulk supply chain, aren’t able to then move surplus milk to the food bank and end up dumping that milk or turning their fruits and vegetables under. In addition to that, support for our farm workers and processors in terms of PPE that we had in there and that money was not used for that, and the support for our smaller processors and producers to retool given what has happened in the challenges in the food supply chain,” Stabenow says.

In addition to the remaining CFAP 1 & 2 dollars, Congress in December approved an additional $13 billion in ag aid, including a third round of CFAP payments.

A USDA spokesman said the agency will work as quickly as possible to complete the review, but offered no timeline for completion and did not respond when asked if USDA anticipated any changes to the CFAP program.

Related:

USDA Freezes $2.3 Billion Supplemental CFAP

Immigration Reform Legislation Leading Off for Biden

Wed, 20 Jan 2021 22:56:23 GMT

Immigration reform is often top of mind for dairy farmers. That’s because immigrant labor accounts for 51% of all dairy labor, and dairies that employ immigrant labor produce 79% of the U.S. milk supply. A study from National Milk Producers Federation shows that without immigrant labor dairies, retail milk prices would increase more than 90%.

On his first day in office, President Joe Biden plans to introduce ambitious immigration reform legislation that seeks to legalize millions of undocumented workers.

Biden will send a bill to Congress on Jan. 20 that would provide a path to citizenship for an estimated 11 million undocumented immigrants living in the U.S., according to reports from National Public Radio, the Chicago Tribune and other media outlets.

According to the NPR report, the bill creates an earned path to citizenship for farmworkers and other essential workers.

The Chicago Tribune reported that, under the legislation, those undocumented workers living in the U.S. as of Jan. 1 this year would have a five-year path to temporary green card legal status, followed by a three-year optional path to naturalization and citizenship.

Industry leaders welcomed movement on immigration reform in a new administration.

“The National Council of Agricultural Employers looks forward to engaging with the Biden administration to find solutions to the vexing challenge of agricultural labor reform,” said Michael Marsh, president and CEO of the National Council of Agricultural Employers.

“We are committed to working with President Biden’s administration to strengthen our national security by enhancing America’s food security while promoting the welfare of our workers and the sustainability of our nation’s farmers and ranchers.”

Any legislation that Biden proposes will need to be approved by Congress. That won’t be easy; Congress ultimately failed to pass similar reforms proposed by former President Barack Obama in 2013.

Robert Guenther, senior vice president of public policy for the United Fresh Produce Association , said immigration reform should have priority in the Biden administration.

“Given the challenges facing our country today, we are grateful that they immediately addressed one of the challenges that have been facing the fresh produce industry for decades — the need for immigration reform through legislation,” Guenther said.

“We strongly believe that the bipartisan Farm Workforce Modernization Act which passed the House in 2019 gives us that path forward to a bipartisan solution to our challenges. Congress and the administration needs to strongly consider this legislation when debating immigration reform.”

Anna-Lisa Laca contributed to this story.

Economist Says COVID Aid Will ‘Help Avert Disaster’

Fri, 20 Nov 2020 03:06:43 GMT

President Donald Trump and USDA released the long-awaited rules for direct payments under the Coronavirus Food Aid Program (CFAP) at the White House Tuesday, saying enrollment will start next week with initial payments to follow the week after. CFAP and Commodity Credit Corporation payments combined will total $6.20 per cwt for eligible producers. University of Minnesota economist Marin Bozic says the program will help avert disaster in the dairy industry.

“I think [the aid] helps a lot. I don’t think that this is going to be a trivial amount,” he says. “I think that when you combine what we’ll see happen with dairy margin coverage, dairy revenue protection and in this program, I think that we will have averted the disaster. We were staring into the abyss on April 15.”

In mid-April cheese prices were $1 per pound, and it was not clear what the COVID aid payments would look like for dairy producers.

“We only still have less than 40% of milk covered under other means so it was looking pretty terrible,” Bozic says.

The way USDA’s food box program was designed caused processors to get product churning pretty quickly which resulted in a rally that lifted prices for the first few weeks of May. However, producers suffered through poor prices in March and April as well.

“This payment is going to be a big help in that regard,” he says. “I’m very pleased with USDA actions.”

We are pleased that USDA heeded calls for higher payments, which will make more dairy farmers eligible for assistance closer to their actual losses, Edge Dairy Cooperative said in a statement.

“Still, there is more work to be done to ensure that all farms are treated equitably. It is vital that our dairy farmers, no matter the size of their businesses, be made as close to whole as possible and as soon as possible,” the Cooperative wrote.

The rule released on Tuesday does not cover any potential losses for the second half of the year, so it’s designed to leave the doors open to another round of direct payments if needed down the road.

“We’ve seen some of them already being incorporated in the HEROES Act, which is the democratic bill that is now with the Senate, setting the stage for another potential round of direct payments if they should be needed in a second part of the year,” Bozic explains.

The higher payment cap and flexibility for LLCs will also provide a benefit to producers, he says. The rule states that each stakeholder in the LLC is eligible for up to $250,000 in payments for a total of $750,000 per business, according to USDA. That is a far cry from the $125,000 per commodity originally announced.

“That will help producers that would have had payments that are over $1 million or much more. But $750,000 is a reasonable help in this situation,” Bozic says. “This just came out about 45 minutes ago; I’ve been chatting with producers around the country and the first reactions were very positive.”

Still, there are a few rules that need clarification including whether or not forward contracted milk will be included in the production count.

“Altogether, I think that it is reasonable,” he says. “I think that it is going to make a difference.”