Senate Weighs In On TPP Trade Agreement

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Spencer Stevenson
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Northeast Dairy Farmers Cooperatives Agri-Mark, Inc. Dairy Farmers of America Northeast Council St. Albans Cooperative Creamery Upstate Niagara Cooperative, Inc.

1 Northeast Dairy Farmers Cooperatives Agri-Mark, Inc. Dairy Farmers of America Northeast Council St. Albans Cooperative Creamery Upstate Niagara Cooperative, Inc. NDFC NEWSLETTER Bob Gray, Editor Contact Bob and Mike Here: Phone: , FAX: Senate Weighs In On TPP Trade Agreement School Nutrition Programs Are Critical For Enhancing Milk Consumption Farm Credit System Reacts To American Bankers Association Call For Its Elimination House and Senate Grapple With Highway Bill Funding Double Trouble In The July 24, 2015 Edition: Life In Immigration Limbo Goes On Senate and House FY 16 Agriculture Appropriations Bills Oversight Hearing Of The USDA Continuation of SNAP Hearings Fewer Rail Delays? Update On Highway Bill Update: Debt Limit? MARCELLUS SHALE UPDATE Senate Weighs In On TPP Trade Agreement By Bob Gray As the final Trans Pacific Partnership 12 nation trade negotiations enter their final phase, a number of key Senators are stressing the importance of getting dairy market access to the Canadian and Japanese markets and to balance that with limited new market access by New Zealand into the United States. In a letter sent to U.S. Trade Representative Michael Froman on Thursday, the Senate clearly lays out its concerns with the final provisions contained in the TPP agreement as they pertain to dairy. The key points made by the Senate are enclosed below. Last week House members sent a strong letter to the Canadian Ambassador stressing the importance of the U.S. dairy industry getting access to the Canadian market. 1. Increase market access and reduce tariffs in Canada. Canada is a leading export market for our dairy products, valued at $592 million in 2014, notwithstanding exceptionally high tariffs that create barriers to our dairy products. However, most product is shipped under Canada s Import for Re-Export Program, which ultimately returns to the United States. It is critical that Canada offers significant and commercially-meaningful market access to U.S. dairy products. 2. Increase market access and reduce tariffs in Japan. Japan is also a leading export market for our dairy products, valued at $407 million in 2014, even though it imposes high tariffs and other trade barriers on our nation s dairy products. It is critical that TPP offers meaningful and expanded opportunities for our dairy products in Japan. 3. Ensure the domestic dairy industry gains significant market access in both Canada and Japan for key dairy commodities in a balanced way compared to any new market access granted to New Zealand s dairy industry into the United States. New Zealand exports 95 percent of its dairy products. If our dairy industry does not achieve comparable export gains in Japan and Canada as compared to those made by New Zealand into the United States, we are concerned that TPP could damage our industry s current export opportunities and domestic market share.

flavored milks as compared to other beverages.

2 This is yet another reason why significant market access gains for U.S. dairy products into Canada and Japan are essential for TPP. School Nutrition Programs Are Critical For Enhancing Milk Consumption By Bob Gray In last week s newsletter I presented information from the National Dairy Council on the minor amount of sugar in flavored milks as compared to other beverages. At the same time I mentioned the importance of increasing milk consumption among school children through the various nutrition programs that are available. The National Dairy Council has prepared information that summarizes student participation in the Breakfast, Lunch and after school Supper Programs. The first chart shows the steady increase in the breakfast program from 2010 to Over that five year period participation has increased from 1.9 million to 2.25 million which is excellent. However, the news on participation in the National School Lunch Program is not so favorable. Since 2010 student participation has declined from 5.2 million to 4.9 million as shown by the second chart. Some of this decline can certainly be attributed to recent changes in the lunch menus which have resulted in students not eating lunch at the school and finding other less healthy options in vending machines or fast food restaurants. This overall decline affects milk consumption as well. Flavored milk with at least 1% fat content could help to increase participation in the school lunch program. The above chart illustrates the decline in school lunch participation in the past five years. Not huge, but still not the kind of trend we would like to see.

The Senate Agriculture Committee and the House Committee on Education and the Workforce continues to work on the Federal Nutrition Program reauthorization which expires on September 30 th.

3 In 2012 the after school Supper Program was expanded to allow meals instead of just snacks. Although the Supper Program is still in it infancy, so far the trend line is good as shown in the third chart. The Senate Agriculture Committee and the House Committee on Education and the Workforce continues to work on the Federal Nutrition Program reauthorization which expires on September 30 th. I am expecting good news on having the fat content for flavored milk increased, but it is still a tough battle. Farm Credit System Reacts to American Bankers Association Call For Its Elimination By Bob Gray The Farm Credit System, as you all know, has been a major cornerstone of farm credit not only throughout the Northeast Region but across the entire U.S. as well. However, a few months ago the President of the American Bankers Association called for the elimination of the Farm Credit System during a radio interview. Our Farm Credit folks responded to ABA with the following letter outlining the need for a strong and viable Farm Credit System. Enclosed are key excerpts from the letter which was signed by a number of major farm organizations, including all NDFC members. Credit availability is absolutely critical to our members. The FCS as well as rural and other commercial banks play vital roles in ensuring that farmers, ranchers and other rural Americans have access to constructive, competitive credit on an ongoing basis. The array of credit products offered by both Farm Credit and commercial banks often in a collaborative, cooperative manner ensures that agricultural producers and their industry sector partners have access to financial tools that are vital to their success and economic sustainability. The suggestion that the FCS and/or commercial banks and other lending institutions should be further constrained or even eliminated from the marketplace would be unwelcome and injurious to those who live and work in rural America. Rather than calling for the elimination of the FCS, we believe it would make more sense to find improved ways to work collaboratively with Farm Credit and other credit providers for the benefit of farmers, ranchers and rural communities. The stakes are simply too high for rural America to have fewer financing options to meet the challenges of advancing rural economic growth. We want you to know that your effort to reduce competition is not supported by those of us whose members live, work and form the economic foundation in rural areas. We would appreciate the opportunity to work constructively with your organization and others, including the Farm Credit System, to improve and expand farmers, ranchers and rural businesses access to competitive and stable credit offerings to meet the challenges rural America faces in our still-recovering economy.

House And Senate Grapple With Highway Bill Funding By Bob Gray As you know, our Northeast dairy cooperatives have a very strong interest in the passage of a long term Highway Bill.

The states of Maryland, Pennsylvania and Connecticut could opt into the change in truck weights on their interstates by increasing the gross weight from 80,000 pounds to 97,000 pounds.

Well, last week the House kicked the can down the road by extending the current authorization for the Highway Program which runs out on July 31 st to December 18 th.

And we will be working to include truck weight reform in the highway legislation.

4 House And Senate Grapple With Highway Bill Funding By Bob Gray As you know, our Northeast dairy cooperatives have a very strong interest in the passage of a long term Highway Bill. We need to have Truck Weight Reform legislation packaged into the bill that would allow heavier trucks on our interstate highways throughout the region. The states of Maryland, Pennsylvania and Connecticut could opt into the change in truck weights on their interstates by increasing the gross weight from 80,000 pounds to 97,000 pounds. The heavier trucks would be required to add a sixth axle. In order to get this done, we need a highway bill. Well, last week the House kicked the can down the road by extending the current authorization for the Highway Program which runs out on July 31 st to December 18 th. The Senate, on the other hand, is working on funding options to pay for a long term six year Highway Bill. I am pulling for the Senate to find the money and pass a long term bill. And we will be working to include truck weight reform in the highway legislation. Today s Canines Use Modern Technology By Willow and Bonnie Gray There is a good chance that our readers remember an old TV show from years ago set on a farm that starred a collie named Lassie. We see reruns of it from time to time on certain TV stations that concentrate on Golden Oldies. There is one show where Lassie had to race up to the farmhouse and bark a certain way at the lady of the farm who asked her What s the matter, girl? and very quickly guessed, Timmy s in the well! (We think Timmy had some kind of inner ear Double Trouble problem cause he was always falling into or off of something.) Lassie barks victoriously and runs to the well. Timmy is rescued! Hooray! Well, these days a good dog in an emergency situation would use a cell phone to call for help, especially if he or she has been trained. That is what a smart Alsatian named Buddy did for his master, Joe, who suffers from seizures resulting from a brain injury while serving in the army. Joe had programmed his cell phone so that when he had a seizure Buddy would pick it up in his mouth, one tooth was certain to hit and hold a key for 3 seconds. That key and the hold would trigger the call to the local emergency phone line. When an emergency worker answered, Buddy barked and whined into the cell phone and help came running. Life In Immigration Limbo Goes On By Maggie McHugh The November, 2014 executive action still remains in limbo due to a court injunction. Much was anticipated by the Administration from implementation of the executive actions and heavy preparations were put into place. Then the waiting game began, particularly with the decision of the Fifth Circuit Court of Appeals, which has already acted on a technicality that continues a freeze implemented by a lower court on the executive actions. The same Court of Appeals is currently working on a second decision regarding the injunction. Readers will see the results here as soon as it is released. However, life in anticipation of activation of the executive action does go on. There is a high sense of protectiveness for possible applicants. Service providers and a variety of organizations and other advocates for the Deferred Action for Parental Accountability (DAPA), carry on with information sessions on the program. The concern is that fraudulent actors may spread disinformation. Further,

5 individuals are being briefed to use the space and time created by the suspension to prepare their paperwork in the event the case is resolved. The Deferred Action for Childhood Arrivals (DACA) experience has proved that coordination by civic organizations and state and local (no federal funding) as well as the federal government need to remain mobilized. Whereas, there are some similarities between DACA and DAPA there is on balance a few differences. The DACA youngsters have ties to U.S. schools, the English language and technology. The DAPA parents are less tied to mainstream educational institutions and not as tech oriented as their children. These very differences make it all the more arduous for organizations to assist DAPA-eligible people. Advocates and organizations are challenged to find inventive ways to reach out and interact with this cohort. In the final analysis, whatever happens to the executive action case now in the court system, the unauthorized immigrant population will remain here, possibly with temporary protection or maybe not. The answer lies in passing immigration reform legislation as a long-term solution. The last substantive immigration law, the Immigration Reform and Control Act of 1986 (IRCA), was passed 29 years ago during the Reagan Administration. The opportunity to legalize will be critical for not only the lives of family members but their contributions to the U.S. economy and society as well. Senate And House FY 16 Agriculture Appropriations Bills The FY 16 Senate Agriculture Appropriations appears to ensure that environmental factors will not be used in writing the new dietary guidelines. Conversely, the House Agriculture and Labor-HHS spending bills would bar any new recommendations that are not supported by evidence rated as strong under USDA scientific guidelines. The Senate provision states that the new guidelines should be solely nutritional and dietary in nature and based only on a preponderance of nutritional and dietary scientific evidence and not extraneous information. Chairman Jerry Moran of the Senate Agriculture Appropriations Subcommittee stated the bill reins in regulatory overreach by limiting the scope of the dietary guidelines. Other key provisions included in the bills are: Enforcement of the menu labeling requirement for restaurants, supermarket delis and convenience stores would be delayed one year to December 1, 2016, consistent with an extension announced recently by FDA. The House bill is slightly different. It would push the deadline to December 1, or until one year after FDA issues guidance to industry on how to comply with the rule. Similar to the House bill, the legislation would bar USDA s Farm Service Agency from closing local offices. FDA would receive an additional $45 million in fiscal 2016 to implement the new rules required by the Food Safety Modernization Act (FSMA). The House bill would provide a $41.5 million increase. The White House asked for a $106 million increase. The Senate bill earmarks $10 million in Food for Peace funding for overseas commodities purchases, or local and regional procurement (LRP). The 2014 farm bill authorized up to $80 million for such purchases, but Congress did not approve any LRP funding for fiscal The fiscal 2016 House bill has no LRP funding either. The Agriculture and Food Research Initiative would receive the same amount of money as fiscal The House bill would increase AFRI to $335 million. Unlike the House bill, the Senate version would not delay the effective date of the removal of FDA approval for partially hydrogenated oils. An amendment to the House bill would delay the removal of the generally recognized as safe (GRAS) status until the end of a three-year transition period. The delay is intended to protect food companies from lawsuits. The Senate bill omitted some requirements in the House legislation to increase animal care standards for USDA research facilities. The House bill would withhold 5 percent of the Agricultural Research Service (ARS) funding for 2016, or $56 million, until the agency takes certain steps in the wake of reports of past abuse at the Meat Animal Research Center in Nebraska, including certifying that it has implemented improvements in care.

6 Oversight Hearing Of The USDA On Wednesday, July 22 nd, the House Full Committee on Agriculture held a public hearing on the oversight of the USDA, which proved for some interesting debate on both sides of the committee. Continuation Of SNAP Hearings After starting in February, the House Agriculture Committee continues its oversight hearings on the Supplemental Nutrition Assistance Program (SNAP) with a session last Thursday focused on evidence-based solutions. Chairman Mike Conaway stated he s reviewing the program to gather ideas for possible reforms, but I would not look for proposals from the committee until it gets ready to write the next farm bill. Additionally, Chairman Conaway is waiting to review the 10 SNAP pilot projects that are testing approaches for moving beneficiaries into employment and better-paying jobs. Last year, USDA distributed almost $75 billion in program benefits. Finally, to fund the three-year projects, the 2014 farm bill required studies of their results and interim yearly reports. USDA awarded the projects earlier this year so they will be wrapping up in time for Congress to write the next farm bill; the 2014 farm bill expires in Fewer Rail Delays? Rail and freight passenger delays are finally beginning to subside due to fewer oil-laden trains, freeing up rail space and lessening the potential for another disastrous derailment. Since 2008, when North Dakota reached its capacity for pipeline shipments, the oil producers shipped their product on trains and that surge in train traffic to the East, West and Gulf Coasts plus oil-related inbound freight shipments resulted in long passenger rail delays across the northern tier of the U.S. and a major backlog of agriculture shipments across several farming states. However, with a new 84,000-barrel-per-day pipeline that went into service in February and a more than $425 million refinery in western North Dakota that in June began converting about 20,000 barrels of crude daily into diesel and other products, most of which remains in the state has improved the availability of train cars for agriculture shipments. Last summer, Amtrak said increased oil train traffic had caused long delays along its Chicago-to- Pacific Northwest Empire Builder route. The on-time performance percentage along the route had dropped to "the single digits," but has improved to as high as 60 percent this year. Update On Highway Bill The highway battle between the chambers of Congress has begun with the Senate Republicans pushing for a longer-term measure than their House counterparts. Senate GOP leaders are homing in on a multiyear highway bill that could resolve the perennial problem of how to fund surface transportation until well past the next presidential election. The measure would be paid for through a myriad of revenue raisers that have been cobbled together throughout the Republican conference. Last Friday, Senate Finance Chairman Hatch said that Senate negotiators were focusing on a draft three-year surface transportation reauthorization, with a projected cost of more than $40 billion. His comment comes as the chamber girds for a battle over a multi-year surface transportation bill that could include amendments offering tax breaks for multinational companies and reauthorization of the Export-Import Bank. On Tuesday, Senator McConnell scheduled a Tuesday cloture vote on the motion to proceed to the multiyear surface transportation bill that would replace a two-month spending authority patch expiring July 31st. Senator McConnell has resisted the $8 billion House measure passed last Wednesday to extend highway funding through December 18th and argued for action now on a multi-year highway measure.

Update: Debt Limit? At this stage of the appropriation process, I would expect the debt limit to be tied to the budget deal on FY16 appropriations bills.

7 Update: Debt Limit? At this stage of the appropriation process, I would expect the debt limit to be tied to the budget deal on FY16 appropriations bills. There are rumors of combining a number of legislative fixes to the final debt and budget deal including a multiyear highway bill and tax extensions. The debt limit must be addressed or the government will default on its legal obligations, which the Treasury Department warns would result in a financial crisis. Both sides are bracing for battle. House Rules Chairman Pete Sessions stated this will not be a clean debt limit increase, which makes absolutely no sense. However, Congressman Steve Israel, a senior member of House Democratic leadership, stated once again they just can t help themselves. They are obsessed with provoking a showdown and a shutdown. There is nothing to ask for. Stay tuned! MARCELLUS SHALE UPDATE On Wednesday, July 14, 2015, the University of Pennsylvania released their report that as more wells were drilled in Northeastern Pennsylvania, hospital admission rates for cardiovascular events rose in the same areas. Additionally, a June study from the University of Pittsburgh linked how far women live from wells in southwestern Pennsylvania with the incidence of babies born small for their gestational age and research out of Colorado in December found an association between living closer to natural gas development and having a child with a congenital heart defect. However, these studies only show links, not cause and effect, and are not based on direct calculations of exposure to contaminants.

8 The Penn study, published in the journal PLOS ONE, analyzed hospital discharge data for 93,000 inpatients, by zip code, between 2007 and 2011 in three counties in Pennsylvania's northeastern corner. Bradford and Susquehanna counties had large increases over that time period in hydraulic fracturing wells and neighboring Wayne County had no gas development. While hospital admission rates decreased slightly or remained constant overall, hospitalizations for cardiology were about 27 percent higher over five years among residents who lived in zip codes with more wells and more wells per square kilometer than among those whose zip codes had the least. Finally, neurology admissions increased significantly for zips with more wells.

Truck Weight Reform Issue Remains Front And Center By Bob Gray

Truck Weight Reform Issue Remains Front And Center By Bob Gray Northeast Dairy Farmers Cooperatives Agri-Mark, Inc. Dairy Farmers of America Northeast Council St. Albans Cooperative Creamery Upstate Niagara Cooperative, Inc. NDFC NEWSLETTER Bob Gray, Editor Contact