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August Highlights: NMPF Secures Robust Conservation Funding in IRA Law

September 7, 2022

The Inflation Reduction Act passed by Congress and signed into law by President Biden on Aug. 16 includes $20 billion in landmark new funding for USDA conservation programs that will help dairy farmers advance their proactive sustainability leadership, highlighting a month that normally sees less activity in Congress due to its traditional recess for the month.

The law, which spends record amounts to combat climate change while including initiatives related to health care and other issues, primarily affects agriculture through the additional conservation spending. NMPF has led efforts over the last year to advocate for this new funding, assembling one dozen agricultural and conservation groups on a letter to Congress last summer in support of enhanced climate smart ag funding.

The funding spearheaded by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, strengthens farm bill conservation programs with emphasizes key dairy areas of opportunity. The measure provides $8.45 billion in new funding for the Environmental Quality Incentives Program, which provides voluntary technical assistance to dairy farmers who undertake stewardship practices that can yield meaningful environmental benefits. This includes $25 million annually in targeted new funding for Conservation Innovation Trials, which emphasis on feed management to reduce enteric methane emissions, a major environmental opportunity for dairy producers.

“Dairy farmers seize environmental sustainability opportunities whenever possible,” said Jim Mulhern, president and CEO of NMPF. “In 2020, producers committed to becoming greenhouse gas neutral by 2050 while also maximizing water quality and optimizing water use. The funding increases in this package will better position dairy to effectively implement these critical environmental stewardship goals. We are very grateful to Chairwoman Stabenow for her success and leadership in securing this meaningful new conservation investment, which will be a game-changer for dairy.”

In other August highlights:

• August Dairy Margin Coverage drops by $2.00 a hundredweight in July from a month earlier. The July DMC margin was $9.92/cwt, $2/cwt less than June’s and within striking distance of the program’s $9.50/cwt Tier 1 coverage level. The drop was driven by a $1.20/cwt lower July U.S. average all-milk price of $25.70/cwt and an $0.80/cwt higher feed cost. The higher feed cost was due almost entirely by an unusually large monthly increase in the average price of premium alfalfa hay, equal to $0.77/cwt of milk in the feed cost formula. The additional 3 cents resulted from a $0.16/cwt of milk monthly increase in the price of soybean meal that was mostly offset by a lower price for corn. The July milk price was still high by historic standards, but milk and dairy product prices have been mostly falling from their earlier summer highs, driven by a combination of consumer reaction to this year’s rapid rise in retail dairy product prices and hints that U.S. milk production is beginning to grow again following a string of months with annually lower milk output that stretch back to last fall. Available forecasts currently indicate that small margin coverage payments may be generated for $9.50/cwt coverage in August and September this year.
• NMPF and the U.S. Dairy Export Council (USDEC) convened the fifth U.S.-Mexico Binational summit August 15-17 at Dairy Farmers of America headquarters in Kansas City to help the U.S. and Mexican dairy industries to further develop their vital relationship and identify areas for deeper cross-border cooperation. NMPF and USDEC leadership and staff, and dairy producer chairs of NMPF, DMI and USDEC participated alongside industry leaders in discussions with five leading dairy organizations from Mexico. The summit culminated in a new Statement of Collaboration.
• NMPF, USDEC and several other agricultural organizations held a series of key meetings in August with the Port of Oakland, the California Department of Agriculture, the Governor’s Office of Business and Economic Development (GO-Biz) and the administration’s new Port and Supply Chain Envoy, retired General Stephen Lyons. NMPF and USDEC also joined over a dozen other U.S. agriculture and business groups in sending a letter to Transportation Secretary Pete Buttigieg urging the administration to allocate infrastructure development funds toward the Oregon International EcoPort container shipping development project in Coos Bay.
• The Professional Animal Auditor Certification Organization (PAACO) has again certified the FARM Animal Care Program as an approved animal welfare evaluation. PAACO provides training and certification credentials for animal welfare auditors and audits for all sectors of food animal production. To receive PACCO certification, the FARM Program went through a thorough review process of its Animal Care Version 4 standards, resources and evaluator training materials as compared to standards set by the PAACO Board of Directors.