Exports Going Nowhere

USDA's Dairy Export Incentive Program (DEIP) was all but invisible in the second half of 2003. USDA records show there was no activity in the program since August. For the current DEIP fiscal year, which began on July 1, 2003, USDA previously announced partial allocations for nonfat dry milk, cheese, and butterfat, equal to one-third of the maximum allowable volume under U.S. international trade commitments. USDA invited bids for nonfat dry milk and that allocation was awarded in August. But since August, USDA has made no DEIP announcements. Industry officials say current market prices for nonfat dry milk are higher than the price under the Dairy Price Support Program.

The food industry faces more scrutiny in 2004 as Congress, consumer activists, and regulators focus on obesity. But milk producers and processors believe they are well positioned to benefit from growing obesity awareness, and are promoting their products as "part of the solution" to the problem of overweight Americans. FDA has signaled its intention to use tools within FDA's jurisdiction, which includes food labeling and packaging rules, to combat obesity.

In comments to FDA, the International Dairy Foods Association made its case for dairy's nutritional value, along with new and emerging scientific research that it says suggests a link between dairy consumption and reduced body weight. Industry officials believe FDA is leaning toward mandating changes to food label and packaging requirements as a major part of its action plan, in an effort to communicate more effectively with consumers about achieving better nutrition through dietary choices.

Milk producers are seeking reparations, charging that imports of caseins and milk protein concentrates (MPC) have unfairly harmed dairy farmers. The National Milk Producers Federation says the reparations are called for under a recently passed trade bill, because the most recent marketing year's farm milk prices are less than 80% of the five-year running average, and that the decline in those prices was caused by increased imports. NMPF has filed a petition with USDA seeking the compensation.

FDA announced that it plans to complete the final two biosecurity rules - on recordkeeping and administrative detention - by the end of March 2004. The agency had planed to release them in December. To accommodate FDA's new timing, IDFA has changed the dates of its 2004 Biosecurity Workshop, moving its March program to June 8-9. For more information on FDA's announcement, or the IDFA workshop visit www.idfa.org.