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12 CapitalPress.com January 5, 2018 ‘You’re not going to stop imports, but you can compete with them’ LABELS from Page 1 Consumer preference A 2011 survey of primary grocery shoppers by Dairy Management Inc. showed 78 percent of respondents viewed the “100 percent USA” label on milk, cheese and yogurt as extremely important or very important in their purchas- es. Some 18 percent saw it as somewhat important, and only 5 percent considered it not very or not at all import- ant. The survey also found con- sumers were willing to pay an average of 5 percent more for those labeled products. “Our co-ops need to proud- ly display the USA seal,” Eby said. Identifying the product as “100 percent USA” would in- crease the value of the product and U.S. milk — and it might have helped his situation, he said. “I think I would have been more profitable because the milk would have been worth more,” he said. But co-ops don’t use the label because they blend low- er-cost imported ingredients into their products, he said. If co-ops would use the “100 percent USA” label, the problem of low milk prices and import competition would fix itself, he maintained. “You’re not going to stop imports,” said Bob Krucker, an Idaho dairy farmer and NDPO board member. “But you can compete with them, and we can successfully com- pete with them.” The key is showing con- sumers which products are made with U.S. milk and which aren’t, he said. “Right now, they can’t tell the differ- ence.” NDPO’s trademark “100 percent USA” is available to any food producer or retailer that can verify the product. “We need to give the con- sumers the tools to choose because consumers will make the right choice, they will make the U.S.-made choice,” he said. And dairy producers don’t need government-mandated country-of-origin labeling — known by the acronym COOL — to do it, he said. “We can do it on our own; we don’t need permission from anybody. We have the solution right here,” he said. Farmer-owned co-ops could put the seal on every product they make that is 100 percent U.S., he said. But they don’t seem will- ing to do that, he said. Either they don’t have the best inter- est of their dairy farmers at heart or they’re using cheap imported ingredients or non- dairy ingredients, he said. “We’re here to promote U.S. agricultural products. And if we do that right, we won’t have to worry about imported product,” he said. Bigger concerns The dairy industry already has a de facto COOL label with its REAL Seal, said Chris Galen, senior vice pres- ident of communications for National Milk Producers Fed- eration. Several versions of the seal are available, includ- ing one that states a product is Courtesy of the Eby family Mike Eby, left, and his son, Jackson, 17, walk their cows to a neighboring farm, which purchased the animals when Eby decided to exit the dairy business in 2016. 2016 U.S. agricultural trade ... ... by value ($ millions) 134,713.6 114,476.8 ... by quantity (metric tons) 218.4 million Source: USDA FAS 63.3 million Exports Imports Exports Imports U.S. ag imports by select commodity, 2016 Quantity Total domestic use Imports/share of domestic use Item (Million pounds) (Million pounds) (% percent) Dairy Beef 7,034 3,015 209,766 25,673 3.4 11.7 Source: USDA Economic Research Service *Fiscal year Carol Ryan Dumas and Alan Kenaga/Capital Press “American Made.” It’s up to the marketer to choose which version to use, he said. The voluntary label has been around since 1976 and can only be used on food products made in the U.S. that contain only real dairy ingre- dients produced from U.S. milk. The seal allows marketers to identify products that con- tain 100 percent U.S. milk ingredients. More than 200 companies use the seal on more than 6,000 products, and NMPF would like to see those numbers grow, he said. A bigger concern for the industry, however, is the mis- leading labeling and branding of imitation dairy products — plant-based products us- ing dairy terminology, such as “milk” made from nuts and other crops, he said. “Imports are a very small component of the dairy indus- try. We’re much more con- cerned with imitation dairy products,” he said. Those products mimic dairy products but don’t have the same level of nutrition or product attributes as real dairy products, he said. Another concern is the use of “absence” labels — such as “GMO-free” or “hor- mone-free” — that are used to scare consumers, he said. Such labels refer to whether the product contains geneti- cally modified organisms and whether cattle are given a ge- netically modified hormone to increase milk production. Transparent labeling of imitation products and “ab- sence” products is where NMPF sees a need to police food marketing, he said. Dairy Farmers of America doesn’t currently use a U.S. label on its products but does have several regional brands found at retail stores, said John Wilson, DFA senior vice president and chief fluid milk marketing officer. These in- clude Borden and Dairy Maid. “Many of our packages highlight the brand’s local heritage of our American farm ownership, as our research has shown that this messaging resonated with consumers,” he said. DFA does support COOL laws for foods sold at retail. However, the reality is there are World Trade Organization issues that limit the laws’ ef- fectiveness, he said. As a national dairy cooper- ative owned by family farm- ers, DFA monitors world trade of dairy products, and the quantity of dairy imports into the U.S. has been relatively flat over time, he said. “The United States imports approximately 4 percent of the dairy products consumed today, and this amount hasn’t varied significantly over the last several years. In contrast, U.S. dairy exports have re- cently risen to more than 14 percent of the total market,” he said. In 2016, U.S. dairy exports were more than 2 million metric tons, compared to im- ports of 841,198 metric tons, according to USDA’s Foreign Agricultural Service. Increasing exports to sup- port the growing U.S. dairy industry is the goal at Inter- national Dairy Foods Associ- ation, the association said in a statement to Capital Press. U.S. milk production is projected to grow 23 percent over the next 10 years. Cou- pling that additional 48 billion pounds with the 30 billion pounds being exported today, there will need to be either greater domestic consumption or increased export opportuni- ty for about 80 billion pounds of milk. A 2013 bill makes it easier for farmers to replace buildings DISPUTE from Page 1 “I think that’s overblown,” Gelardi said. The matter has ended up before the Oregon Court of Appeals, which is scheduled to hold oral arguments in the case on Jan. 9. In 2013, Oregon lawmak- ers passed a bill that made it easier for farmers to replace buildings that had become di- lapidated, or that had been de- stroyed or demolished. The law basically stated that dwellings on farmland could be replaced as long as they once had modern ameni- ties, such as indoor plumbing, electricity and heat. Previous- ly, dwellings could only be replaced if they currently had those features. Another requirement per- tained to whether property tax- es had been paid on the prop- erty, and how recently. This awkwardly worded provision is at the heart of the legal dis- pute. A permitting authority can allow replacement dwellings as long as they were subject to property taxes for the lesser of: “A) The previous five prop- erty tax years unless the value of the dwelling was eliminated as a result of the destruction, or demolition in the case of resto- ration, of the dwelling; or (B) From the time when the dwelling was erected upon or affixed to the land and be- came subject to assessment as described in ORS 307.010 un- less the value of the dwelling was eliminated as a result of the destruction, or demolition in the case of restoration, of the dwelling.” The government of Lane County interpreted this passage to mean that dwellings can be rebuilt at any time after they were eliminated, regardless of the five-year property tax rule. After the county approved King’s application to rebuild the three homes, Landwatch Lane County objected to the decision before Oregon’s Land Use Board of Appeals, or LUBA. The board rejected the county’s interpretation and overturned the dwelling ap- proval, rejecting the concept that demolished or destroyed homes could be rebuilt after an indefinite period of time. The five-year period was es- tablished as a maximum “look- back,” according to LUBA. In other words, dwellings could only be rebuilt if they were sub- ject to property taxes within the past five years until they were destroyed or demolished within that time window. The provi- sion also applied to homes that were built and taxed less than five years before they had to be replaced. “With more than 95 per- cent of our potential cus- tomers living outside our borders, expanding access to international markets is essential for our future suc- cess,” DFA stated. The Asia-Pacific region is one such crit- ical market, and the U.S. should pur- sue bilateral trade agree- ments with key markets Jayson Lusk in the region. The EU, Australia and New Zealand are already negoti- ating with key markets, such as China and Japan, and “the U.S. must not fall behind the curve,” DFA said. Where’s the beef? Beef imports are a big problem for U.S. ranchers, said Bill Bullard, CEO of the cattlemen’s group R-CALF USA. “They are a substitution for domestic product and as a result reduce the demand for U.S. cattle,” he said. They undermine the value of U.S. beef, causing prices to fall to the lowest common denominator, he said. “We import from about 20 different countries, and the mix of imported product is changing. It used to be low- er-value grinding product to mix with our higher-quality trim. Now it’s more muscle cuts of beef,” he said. A COOL label would help because consumers could choose to buy beef exclusive- ly produced in the U.S. and support U.S. ranchers, he said. Several studies have shown the labeling would in- crease demand for U.S. beef, he said. A 2014 survey by Oklaho- ma State University indicated consumers were willing to pay $1.05 per pound more for beef steak labeled born, raised and slaughtered in the U.S. than beef born and raised in Canada. A 2003 survey by Colora- do State University indicated 73 percent of consumers were willing to pay an 11 percent premium for U.S.-labeled steak and a 24 percent premi- um for U.S.-labeled hamburg- er, he said. Surveys do show consum- ers desire country-of-origin labeling and are willing to pay more for U.S. products, but it’s a mixed bag, said Jayson Lusk, who leads the Depart- ment of Agricultural Econom- ics at Purdue University. “What we (economists) haven’t seen is that translate to demand in the market- place,” he said. When country-of-origin labels were on beef, retailers didn’t promote it, most con- sumers weren’t aware of it and economists weren’t able to pick up much effect, he said. Economists who say there was no increased demand are looking at selective data, Bul- lard said. “The historical facts dis- prove the economic theories that have been proffered in opposition to COOL,” he said. After COOL was amend- ed in May 2013 to label beef that was born, raised and slaughtered in the U.S., cattle producers saw prices and de- mand skyrocket, he said. The high prices continued until November 2014, when it was clear to everyone that COOL would be short-lived, he said. Canada and Mexico took the matter of COOL on beef and pork to the World Trade Organization. After a series of rulings and subsequent ap- peals by the U.S. government, the WTO determined the mandatory COOL constituted unfair trade practices and the U.S. would have to repeal the law or face retaliatory trade measures. Cattle prices continued to fall and hit bottom in 2016 after COOL was repealed in December 2015, Bullard said. Lusk looked into that issue and concluded that the fall in cattle prices after the COOL repeal had more to do with normal changes in cattle sup- ply resulting from the cattle cycle than anything to do with COOL. There’s nothing stopping packers from voluntarily la- beling their products as U.S. beef. If there’s money to be made doing it, they will — and some have, Lusk said. Private affair National Cattlemen’s Beef Association supports voluntary labeling but is staunchly against mandatory labeling. “We don’t believe the government should be in competition with private la- beling,” said Kent Bacus, NCBA director of trade and market access. COOL for beef was on the books for about six years, and it had nothing to do with food safety; it was a market- ing program run by USDA, he said. The law didn’t ap- ply to about half of the meat sold because it only applied to beef sold in grocery stores and wasn’t required for fast- food and restaurant chan- nels, he said. “It didn’t make a whole lot of sense to have that law in the first place,” he said. The problem was it put a lot of cost on producers without rendering any bene- fit, with packers and feeders passing down the cost of im- plementation to producers. It also resulted in retaliato- ry tariffs of $1 billion from Canada and Mexico when the WTO ruled it discrimi- natory, he said. And it had no value, he said. It’s one thing to ask consumers if they want to know where their food comes from and another to actually see if they bought the product. When it came down to it, consumers were more interested in price, cut and grade, Bacus said. “Consumers honestly didn’t pay attention to it,” he said. The mandatory labeling was really small, black and white print and nobody no- ticed it, he said. “We think we can do a better job marketing our beef than the government can,” he said. NCBA isn’t opposed to labeling U.S. product as long as it’s private industry doing the labeling, but it doesn’t support the mandatory com- ponent that other groups do, he said. “We’ve already gone down this road before. It did noth- ing to add benefit to prices, did nothing to build consum- er confidence, did nothing to improve food safety,” he said. USDA FAS pegs beef im- ports in 2016 at more than 1 million metric tons, compared to exports of 813,332 metric tons. Beef coming into the U.S. is labeled as coming from a certain country and is in- spected to meet U.S. safety standards. Most of it is frozen lean trimmings from Austra- lia and New Zealand used to mix with U.S. higher fat trim- mings to make ground beef patties for fast-food restau- rants, Bacus said. The benefits While producers have dif- fering views on imports, most consider them to be a reality that is here to stay. The net effect of trade on individual producers is a bit ambiguous, said Purdue’s Lusk. Trade is going two ways, and it largely depends on the commodity, he said. For example, the U.S. both imports and exports beef. While domestic producers might face more competi- tion, two-way trade also gives them more customers and a larger market. In addition, an animal is made up of many cuts, and the U.S. has more use for some cuts than others. While the U.S. is importing some prod- ucts, exports allow the entire animal to be used efficiently, he said. The real question is “What would we give up if we didn’t have imports?” he said. For U.S. consumers, im- ports are a clear benefit. With- out imports, there’d be more volatile food prices, less vari- ety and fewer options, he said. Other countries export to the U.S. because they want the higher prices the U.S. offers. That can bring food prices down in the U.S., and consumers get more options available to them at a lower price. “The main effect is it helps cushion price swings,” he said. For instance, the U.S. im- ports a lot of fruits and veg- etables, which gives consum- ers year-round availability to products — and at a lower price than if they were solely dependent on U.S. produc- tion, he said. “The benefit to consum- ers is we get things cheaper than we would otherwise,” he said. Original policy wasn’t a problem for farmers, foresters DEQ from Page 1 This original policy wasn’t a problem for farmers and foresters, though, be- cause it largely just required them to follow the EPA pes- ticide label and general “in- tegrated pest management” standards, said Scott Dahl- man, policy director for the Oregonians for Food and Shelter agribusiness group. “It formalized what these guys are already doing,” Dahlman said. “Most people were cov- ered but didn’t know it,” added Cooper. That original general per- mit expired in 2016, which prompted DEQ to begin de- vising an updated version. The Oregon Farm Bureau and Oregonians for Food and Shelter are concerned by proposed drafts they’ve dis- cussed with DEQ, which in- dicate dry waterways would be defined broadly, requiring many more farmers to regis- ter with the agency and sub- mit pesticide management plans. “We’re seeing no justifi- cation as to why this is nec- essary,” said Dahlman. Even if the DEQ wouldn’t enforce the general permit as applying to every dry pud- dle, the program would fall under the federal Clean Wa- ter Act, which allows for pri- vate litigation over alleged violations, Cooper said. “There would be citizen suit enforcement,” she said. If the DEQ seriously ex- tended its authority over pes- ticide spraying, that would also effectively usurp the Oregon Department of Ag- riculture’s jurisdiction under the agricultural water quality program, Cooper said. Growers have been en- couraged to advise ODA on water quality plans and vol- untarily improve water con- ditions on their properties, which would be undermined by DEQ’s planned policy, she said. “That’s a big be- trayal of trust for a lot of farmers.” Ron Doughten, water quality permitting manager for DEQ, said the agency is in the process of addressing comments about the general permit. The agency is still analyz- ing which pesticide applica- tions would be considered to come from “point sources” — opening them to Clean Water Act regulation — and which waters would be cov- ered by the permit, whether wet or dry, Doughten said. “How and where that ap- plies is still a part of the dis- cussion,” he said. “We’re far from anything being settled.”