Dairy industry representatives increasingly view the next round of WTO talks as critical for the U.S. dairy industry, as it seeks to open global markets to more dairy products. U.S. negotiators attending this month's Doha Round in Hong Kong are pushing for lower tariffs and fewer subsidies, but in the past have run into stiff opposition, especially in Europe.

The Bush Administration has signaled its desire to slash long-standing agricultural subsidies as part of the next WTO pact. U.S. Trade representative Robert Portman is suggesting cuts of up to 60% in U.S. subsidies to producers, which drew enthusiastic support from dairy manufacturers' representatives.

Hurricane Katrina made an already tight U.S. sugar market even tighter as the storm battered the Gulf coast. In response, USDA is increasing the current fiscal year's domestic marketing allotments and has allowed early entry of some imports scheduled for the new fiscal year. USDA is increasing the current fiscal year (FY05) overall allotment quantity by 105,000 short tons raw value (STRV), 55% of which is assigned to the domestic sugar beet sector. The remaining 45% will be reassigned to additional imports, since there are no U.S. cane sugar stocks available. USDA is also increasing the fiscal year 2006 tariff-rate quota for refined sugar imports by 75,000 STRV for a total of 129,013 STRV, which will be allocated on a first-come, first-serve basis.

USDA has joined with other federal agencies, including the FBI and Department of Homeland Security to institute new protections for the nation's food supply against terrorist threats. Agriculture Secretary Mike Johanns says the federal agencies will work with states and private industry to improve bio-terror defenses.

USDA closed the books June 30 on its FY 2005 Dairy Export Incentive Program (DEIP) with almost no activity for the year. During the entire year, USDA never requested bids or awarded bonuses, so no dairy products were exported under the once-popular program. The reason is not much of a mystery. Demand for U.S. dairy products was strong throughout the year, keeping prices high, making government compensation for exporters unnecessary. International milk production was down, and the currency battering suffered by the dollar worked to U.S. producers' advantage, pumping up demand for U.S. non-fat dry milk. U.S. NFDM exports are up 155% since July 1, 2004, when the DEIP fiscal year began.

If the U.S. Free Trade Agreement with Central America and Dominican Republic (CAFTA-DR) ends up road-blocked in Congress, it will likely be over the always-sensitive issue of sugar imports. At a meeting of the House Ways and Means Committee, members from sugar-growing districts expressed concerns about the sugar provisions of the treaty, echoing comments from their counterparts on the Senate Finance Committee. The treaty does in fact provide new access to U.S. markets for foreign sugar growers, but the U.S. Trade Representative's Office says those new imports would not negatively impact the current U.S. sugar program. Top White House and Agriculture Department officials have held meetings on how to counter U.S. sugar growers' objections and push the agreement through Congress.

The dairy industry is closing ranks with representatives of other agricultural groups and the U.S. Trade Representative's Office to push for passage of the Free Trade Agreement with Central America and the Dominican Republic (CAFTA-DR). Congressional hearings have begun with a vote in the full House and Senate expected later this year.

A bi-partisan group of dairy state lawmakers is pushing a measure through the U.S. Senate to double the size of the Milk Income Loss Contract (MILC) subsidy, which provides payments to producers when milk prices fall. Sen. Norm Coleman (R-MN) and Sen. Herb Kohl (D-WI), the measure's co-sponsors, say it would extend MILC through September 2007 and increase the cap to 4.8 million gallons per year. Coleman says the measure has quickly gained support in the Senate - and beyond.

The dairy industry is cheering the January release of the U.S. Government's new Dietary Guidelines for Americans. The guidelines, a joint effort between USDA and the Department of Health and Human Services, calls for at least three servings a day of low-fat or fat-free dairy food products.

J. Mark HuffmanDonation Program Extended Agriculture Secretary Ann Veneman says USDA has extended the program to donate nonfat dry milk (NFDM) to nonprofit, faith-based and community organizations for use in