NMPF, NCFC Lead Coalition Backing Climate-Smart Ag Investments

The National Milk Producers Federation (NMPF) and the National Council of Farmer Cooperatives (NCFC) on Aug. 5 led a coalition of 12 agricultural and conservation organizations on a letter advocating for significant new funding for climate-smart agricultural practices that can help farmers to build on their environmental stewardship leadership.

Congressional efforts toward infrastructure legislation provide opportunities for substantial new investments in conservation support, with more emphasis on climate-smart agricultural practices. USDA conservation financial incentives provide farmers with voluntary technical assistance to carry out numerous stewardship practices. But more can be done to enhance practices that can yield meaningful environmental benefits, such as climate-smart manure and feed management on dairy farms.

“Dairy farmers are proactive stewards of their land and water resources, but they are always seeking to innovate further. Dairy farmers in 2020 committed to become carbon-neutral or better by 2050 and maximize water quality around the country. Bolstering conservation investment and focusing on climate-smart practices better positions dairy farmers to fulfill the dairy sector’s 2050 environmental stewardship goals as envisioned in the Net Zero Initiative,” said Jim Mulhern, president and CEO of NMPF.

NMPF, NCFC, and their colleagues call in the letter for increased spending on conservation incentives, including strong technical and financial assistance, with a greater focus on climate-smart practices. The organizations also support new rural broadband resources in pending infrastructure legislation. The letter also reiterates the signers’ major concerns regarding several proposed changes to tax policy that would undermine the transfer of family farms from one generation to the next.

Congress is expected this fall to pass a major budget package using a process known as reconciliation, which eliminates the 60-vote threshold normally needed to adopt legislation in the Senate. The budget resolution Congress is advancing this month to tee up that bill includes instructions to the House and Senate Agriculture Committees to enable them to boost funding for conservation and climate smart ag practices. The Senate passed the budget resolution on Aug. 11, and the House subsequently adopted it Aug. 24.

Organizations that joined NMPF and NCFC on the letter include the Agricultural Retailers Association, American Seed Trade Association, CropLife America, National Association of Conservation Districts, National Association of State Departments of Agriculture, National Association of Wheat Growers, National Farmers Union, National Potato Council, Produce Marketing Association, and U.S. Apple Association.

NMPF Priorities Advance in Appropriations Process

NMPF saw several policy improvements and funding priorities included in the Fiscal Year 2022 Agriculture-FDA Appropriations bill (H.R. 4356) at the House Appropriations Committee level. Since then, NMPF has seen even more key issues incorporated into legislation as appropriations moves forward.

During floor consideration of the House bill, Reps. Jim Baird (R-IN) and Angie Craig (D-MN) secured an amendment to provide $5 million for FDA to develop solutions on how ingredient claims on animal feed additives can be regulated as foods, not drugs. The amendment builds on the report language NMPF successfully worked to include at the Committee level to direct FDA to update its Policy and Procedures Manual to achieve this goal.

FDA’s current process raises an obstacle for dairy’s use of numerous feed additives that can reduce enteric methane emissions by 30 percent because it currently treats these food additives as drugs. Combined, the Baird/Craig amendment and report language could help address the problematic process.

The House also adopted an amendment by Reps. Peter Welch (D-VT) and Fred Upton (R-MI) to direct FDA to ensure that pending guidance on Labeling of Plant-based Milk Alternatives takes the approach of consistently enforcing against violations of the existing dairy standards of identity. Following adoption of these and other amendments, the House passed this bill on July 29.

The Senate Appropriations Committee passed its own version of the Agriculture-FDA Appropriations bill on Aug. 4. The Senate bill differed from the House measure while funding NMPF program priorities including:

  • $25 million for the Dairy Business Innovation Initiatives program, which provides direct technical assistance and grants to dairy businesses to further the development, production, marketing, and distribution of dairy products
  • $700 million for the ReConnect program, the USDA Rural Development program working to provide broadband service to eligible rural areas;
  • $3 million for the Healthy Fluid Milk Incentives Projects authorized in the 2018 Farm Bill to create pilot programs to increase milk consumption among SNAP households;
  • Nearly $105.83 billion for SNAP.

Also, in addition to mandatory funding for nutrition programs:

  • $6.278 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
  • $332 million for the Commodity Supplemental Food Program;
  • $90 million for TEFAP transportation, storage, and program integrity;
  • $10 million for the Farm and Ranch Stress Assistance Network, a USDA program aimed at connecting those working in agriculture to stress assistance and support programs.

The Senate version also includes a provision to allowing 1% flavored milk to continue to be served in school nutrition programs through the 2022-23 school year.  The Senate measure also includes feed additive provisions similar to the House’s as well as report language similar to House language addressing FDA’s lack of enforcement of dairy standards of identity. The Senate legislation additionally provides $7.030 billion in emergency funding to support farmers and ranchers impacted by various natural disasters through 2023. Under this bill, milk would be eligible for the emergency funding and dairy cooperatives would be eligible to deliver funds directly to their producers.

Appropriations legislation may become final this fall, once Congress and the White House agree on spending numbers.

DMC Margin Drops Again in July; Margin Formula to Be Updated

USDA has reported the July margin under the Dairy Margin Coverage program at $5.68/cwt, a drop of 56 cents from the June margin and the lowest DMC margin since May 2020. The lower July margin resulted from a $0.50/cwt drop in the U.S. average all-milk price, to $17.90/cwt, and a six-cent per hundredweight higher feed cost. A lower soybean meal price offset a good part of a higher price of corn, while alfalfa hay prices were slightly higher.

USDA announced Aug. 19 that it will “make improvements to the Dairy Margin Coverage safety net program updating the feed cost formula to better reflect the actual cost dairy farmers pay for high quality alfalfa. This change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021.” Full details will be provided when regulations are published in the coming weeks, but it is expected that the price of alfalfa hay used in the DMC feed cost calculation will be changed, from the current 50-50 blend of the U.S. average price for all alfalfa and the average price of premium and supreme alfalfa hay in the five largest milk producing states, to just the 5-state average for premium and supreme alfalfa.

For the July DMC margin, the change would result in a margin of $5.47/cwt for the month, another 21 cents a hundredweight lower than the margin USDA has preliminarily announced. Averaged over all months from January 2020 through this past July, the change would result in an average $15 per ton higher alfalfa hay price used in the DMC feed cost calculation and a 13.1-cent higher average payment for DMC coverage at $9.50/cwt.

USDA reported that, as of August 30, the 18,992 operations enrolled in this year’s DMC program are expected to receive $669,741,798 in payments based on previously announced margins, or an average of $35,264 per enrolled operation.

New USDA Program Addresses Class I Shortfall, But Work Remains

NMPF’s reaction was mixed toward USDA’s new Pandemic Market Volatility Assistance Program, announced Aug. 19. While the initiative, which will distribute $350 million in assistance payments to dairy farmer, arose from NMPF and member-cooperative advocacy, significant issues remain with how payments are distributed, making improvements necessary.

Under the program, USDA will reimburse producers for unanticipated losses created during the COVID-19 pandemic prompted by a change to the Class I fluid milk price mover formula that put price risks disproportionately on the backs of farmers, burdens which were increased by the government’s pandemic dairy purchases last year. Still, caps on the production amount covered by the program will limit assistance in ways that create inequitable outcomes among dairy producers.

The plan “is an initial step in this effort that will help many producers, but it unfortunately falls significantly short of meeting the needs of dairy farmers nationwide,” said NMPF President and CEO Jim Mulhern in a statement the day of the announcement.

Congress’s change to the previous Class I mover in the 2018 Farm Bill was never intended to hurt producers, and in fact was envisioned to be revenue neutral. However, the government’s COVID-19 response created unprecedented price volatility in milk and dairy-product markets that produced disorderly fluid milk marketing conditions. Those disruptions thus far have cost dairy farmers nationwide more than $750 million when compared to what they would have been paid under the previous system.

The new USDA program will reimburse qualified dairy farmers for 80 percent of the revenue difference per month on up to 5 million pounds of milk marketed and on fluid milk sales from July through December 2020. The payment rate will vary by region based on the actual losses on pooled milk in each order.

NMPF has been working on approaches to right this unintended wrong to dairy farmers by recouping as much of the loss as possible.

“The arbitrary low limits on covered milk production volume mean many family dairy farmers will only receive a portion of the losses they incurred on their production last year,” NMPF President and CEO Mulhern. “These losses were felt deeply by producers of all sizes, in all regions of the country, embodying a disaster in the truest sense of the word. Disaster aid should not include limits that prevent thousands of dairy farmers from being meaningfully compensated for unintended, extraordinary losses.”

Additional work lies ahead to remedy this shortfall more fully for all dairy producers. “We very much appreciate USDA’s persistence and efforts to find a way to cover some of these losses using existing authorities, but NMPF represents producers from all regions and of all sizes and believes that losses incurred by producers must be addressed equitably,” Mulhern said. NMPF will work with Congress to seek supplemental funding to close this gap.

NMPF also is continuing discussions about the current Class I mover to prevent a repeat of this problem.

NMPF Pursuing Needed Fixes on Disaster Assistance and Class I Mover

Dairy farmers welcomed assistance from USDA in August via the new Dairy Donation Program, which NMPF championed through the legislative process; adjustments to the Dairy Margin Coverage program; and the new Pandemic Market Volatility Assistance Program, which will partially reimburse farmers for losses that arose from how the department approached dairy purchases for food-insecure families in 2020. These initiatives will help farmers during difficult times, and they happened because NMPF worked closely with USDA and Congress to help dairy farmers better manage their risks and serve their communities.

That doesn’t mean our work is over – especially on the pandemic market program. The $350 million in reimbursements is a partial balm that begins to redress policies that created unintended harm. But it isn’t a fair deal for all dairy farmers. NMPF is committed to lead efforts for fairness on behalf of our members.

Some background: USDA’s new program attempts to rectify two policy actions that left many in dairy on the wrong end of unplanned consequences. The immediate trigger was government food-box program purchases that were heavily weighted toward cheese. That over-emphasis sent Class III cheese prices to all-time highs and caused unusual and uneven impacts on milk checks, most commonly noticed via the record negative Producer Price Differentials (PPDs) seen during the pandemic.

The other culprit was an attempted good-faith policy change that inadvertently became a ticking time bomb, exploded by those same milk-price gyrations. A change to the Class I mover formula, which sets the price of Class I fluid milk, in the 2018 farm bill was originally proposed as a revenue-neutral adjustment designed to encourage increased fluid milk sales without hurting farmers. It turned out to be anything but that. Last year’s unprecedented discrepancies between Class III and Class IV prices, which are used to calculate the mover, pushed Class I skim milk prices dramatically lower than they would have been under the previous formula, leaving dairy farmers with roughly $750 million in losses.

At NMPF, we repeatedly urged the government to make more balanced purchases last year because we feared that unbalanced dairy-buying would wreak havoc on markets, as it did. Subsequently, when the effects of the new Class I mover formula became clear, we voiced support for an emergency Federal Milk Marketing Order hearing focused specifically on addressing the problem. We have held back on a formal hearing request, choosing instead to work with USDA toward creative solutions to more quickly assist producers, such as the new pandemic program. With USDA’s announcement – a milestone in the government’s response to the pandemic’s toll on dairy — it’s time to look at where we are, and where we need to go.

We are grateful that the department found a way to provide some relief, and that many members of Congress worked with us to advocate vocally for dairy farmers.

And while the program will help many producers, its lack of fairness is a major concern for NMPF and many of its members. The payment is calculated based on only 5 million pounds of milk per farm during the period of July-December 2020. That level is well below the production of thousands of dairy farms, meaning many family dairy farmers will only receive a portion of the losses they incurred. Losses were felt by producers of all sizes and in all regions: It was a disaster in the truest sense of the word. And like most other disaster programs, this one shouldn’t be subject to such arbitrary low limits on assistance. We are already working with allies in Congress to further supplement USDA’s already announced funding.

Meanwhile, we still need to address the risk imbalance in the current Class I mover formula that was exposed by the pandemic. The proposed adjustment to the mover NMPF developed last spring was designed to account for past losses and to restore needed balance for farmers going forward. The COVID-19 pandemic is (we hope) a once-in-a-lifetime occurrence. But as we can now see, a large spread between Class III and IV milk prices is not, making a Class I mover fix essential. Along with more fully recouping last year’s losses, we look forward to advancing positive solutions to this and other federal-order issues.

NMPF applauds USDA’s and Congress’s many crucial efforts for dairy. But fair is fair. As the advocate for U.S. dairy farmers, we’re leading the fight for fairness. Our efforts, along with those from our member-allies across the dairy farmer community, have already yielded a lot. And they’re far from over.

NMPF Joins Agricultural Leaders in Urging Farmers and Rural Communities to Get Vaccinated

NMPF and several of its member cooperatives are among the more than 30 state and national agricultural organizations representing farm, commodity and agribusiness communities that have joined together to promote vaccination among farmers and other rural Americans, sending an open letter to association members to add another voice to the call to get vaccinated.

“With a presence in all 50 states, dairy farmers know well the impacts vaccinations have on communities and how important it is for businesses and the economy to move beyond the COVID-19 pandemic,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “We’re proud of dairy’s leadership in the agricultural community on this crucial issue and pledge to do what we can to help make our communities safe.”

NMPF Chairman Randy Mooney, along with Zippy Duvall, president of the American Farm Bureau Federation, co-bylined an editorial published in the Des Moines Register last week to share a message about the important connection between agriculture, science, and health.

“The key to defeating coronavirus, like it was for polio, measles, and other diseases that left their mark across the countryside, is the vaccine,” the two wrote. “Success will only be achieved one decision — and one person — at a time.”

The effort is in response to the continued challenge of the COVID-19 Delta variant cases increasing precipitously among the unvaccinated populations across the country. Many rural communities have been hit hard by the Delta variant, which has stressed healthcare systems and threatens to greatly impact those we depend on for a safe food system. Agricultural leaders in the letter are asking farmers to protect their health and their communities by getting vaccinated saying, “Farmers make science-based decisions every day to protect their farms and their communities – they should make these same decisions to protect their health as well.”

An Open Letter to Our Members

As we hear heartbreaking accounts of the COVID-19 resurgence depleting resources in rural communities and overwhelming already stressed rural health care systems, we can’t help but feel a deep sense of frustration. After so much progress in fighting the pandemic – the decisions we’ve all made to stay safe, the work to develop a vaccine and a distribution system that could reach every American — we still have so far to go. As a farmer, a food worker or an input provider, we know that you play a critical role in the health of our rural towns and businesses. We know that you take great pride in helping keep your communities vibrant. Unfortunately, the virus is still threatening that vibrancy in many rural areas and indeed, in our nation.

That’s why, as leaders of agricultural organizations, we are speaking up to support vaccination efforts in our rural communities and in all communities nationwide. To enable informed choices, it is critical that accurate information be heeded — and there has been no shortage of scientific data that supports the effectiveness and necessity of the COVID-19 vaccines. We know that you make science-based decisions every day—whether those decisions are how best to protect your crops or your livestock. Now, however, we need your help in ensuring the health of your families and your communities, which is why we urge you to support vaccinations in your community.

We know that you are no stranger to vaccines. Those of you who raise livestock administer vaccines regularly to protect your animals. Agriculture pioneered the development of safe COVID vaccines decades ago. Shots that prevent bovine coronavirus have been available since the 1970s. Technological advances have long benefited agriculture, but the development of safe, effective COVID vaccines for humans has only further confirmed our already-strong appreciation for science and research. We hope this appreciation for science and research is a lesson that will long outlast the pandemic. We saw the promise of vaccination against COVID early on: We urged the federal government to make farmers and other essential food workers a top vaccination priority. We know many of you have led vaccination efforts your communities across the country, and for that we are grateful.

Recent events, however, show us that much more work needs to be done. The need for shots remains, as does the need to share accurate information that addresses people’s concerns. There will always be some people who, for whatever reason, can’t or shouldn’t get a shot; but these numbers are very small. If you have questions, please talk to your doctor or a local medical expert you can trust to give you the facts.

The rise in cases as a result of the Delta variant only further highlights what’s been true all along: For a vaccination campaign to work, people must individually decide to protect themselves, their families, and their communities. The pandemic’s toll on rural health and businesses, as well as our broader economy, won’t ebb until that happens. The key to defeating coronavirus, like it was for polio, measles, and other diseases that left their mark across the countryside, is the vaccine. Success will only be achieved one decision—and one person—at a time.

You know how powerful an individual decision can be. The decision you make on your farm today will feed your family and consumers around the world. Your choices and your dedication keep families and communities healthy. And just like these farm decisions, the decisions you make now can help ensure the months and years ahead are much brighter as we wrestle COVID-19 to the ground. In farm country, we talk a lot about rolling up our sleeves to get the job done in our fields and pastures. Now it is time that we join together and roll up our sleeves one more time to get this job done.

 

Sincerely,

Tara Artho, Texas Grain and Feed Association

William Beaton, Agri-Mark, Inc.

Jay Bryant, Maryland and Virginia Milk Producers Cooperative Association

Stephen Censky, American Soybean Association

Chuck Conner, National Council of Farmer Cooperatives

Daren Coppock, Agricultural Retailers Association

Jon Doggett, National Corn Growers Association

Zippy Duvall, American Farm Bureau Federation

Stephanie Eckroat, Kansas Dairy Association

Dr. Barbara Glenn, National Association of State Departments of Agriculture

Allan Huttema, Darigold

Janet Klein, Maryland and Virginia Milk Producers Cooperative Association

Daryl Larson, Bongards Creameries

Andrew LaVigne, American Seed Trade Association

Kirk Leeds, Iowa Soybean Association

Chuck Lippstreu, Michigan Agri-Business Association

Jim Mulhern, National Milk Producers Federation

Chris Novak, CropLife America

Steve Records, Grain Elevator and Processing Society

Corey Rosenbusch, The Fertilizer Institute

Greg Schlafer, Foremost Farms USA

Jayne Sebright, Center for Dairy Excellence

Ron Seeber, Kansas Grain & Feed Association

Mike Seyfert, National Grain & Feed Association

Joseph Smentek, Minnesota Soybean Growers Association

Jim Sutter, U.S. Soybean Export Council

Owen Wagner, North Carolina Soybean Producers Association

Betsy Ward, USA Rice

Gary Wheeler, Missouri Soybean Association

Richard Wilkins, Mid-Atlantic Soybean Association

NMPF Lauds Establishment of Dairy Donation Program to Fight Food Insecurity

The National Milk Producers Federation (NMPF) today commended USDA for finalizing rules implementing the new Dairy Donation Program enacted by Congress last year. The program will help expand partnerships between dairy organizations and food banks to provide a wide range of dairy products to food-insecure households.

“We thank USDA leadership for their work to bring the Dairy Donation Program to fruition. This important program will help dairy farmers and the cooperatives they own to do what they do best: feed families nationwide,” said Jim Mulhern, president and CEO of NMPF. “Dairy stakeholders are eager to enhance their partnerships with food banks and other distributors to provide dairy products to those experiencing food insecurity, which the COVID-19 pandemic has only exacerbated.”

NMPF championed the proposal throughout the legislative process and worked closely with Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), who led the effort to include this new program in COVID-19-related legislation enacted last year. The new Dairy Donation Program expands the original Milk Donation Reimbursement Program and has one-time funding of $400 million to reimburse farmers, cooperatives, and other dairy organizations for the full cost of raw milk needed to make finished dairy products for consumers.

NMPF worked closely with USDA to ensure that the program addresses additional costs, such as processing and transportation, as well as other elements that make the program more viable. The provision covering the cost of processing is a significant enhancement from the previous program. NMPF also worked closely with Feeding America to support the program and recommend approaches to ensure its effectiveness.

“We are grateful to USDA for helping ensure wholesome dairy products can be provided to food banks and other food distributors by reimbursing for some of these costs,” said Mulhern. “We have also been pleased to work with Feeding America to advance the partnership approach taken by this program as it will help to target dairy donations in a manner that effectively meets on-the-ground demand.”

“Feeding America applauds today’s announcement implementing the Dairy Donation Program, which has the potential to connect millions of additional pounds of dairy donations through food banks to the people we serve. We look forward to working with USDA and our dairy partners to make this program a success now and in the future,” said Vince Hall, Interim Chief Government Relations Officer at Feeding America.

Mulhern said NMPF appreciates Chairwoman Stabenow’s leadership in securing the program’s enactment last year, as well as the support for dairy donation offered by other key members, including Senate Appropriations Committee Chairman Patrick Leahy (D-VT) and House Agriculture Committee Ranking Member Glenn ‘GT’ Thompson (R-PA).

“We commend Chairwoman Stabenow for her leadership in authoring this program and look forward to working with Congress to secure additional funding for this program in the future to continue to minimize food waste by providing nutritious dairy products to those who need them most,” Mulhern said.

NMPF Statement on USDA Dairy Announcement

From NMPF President and CEO Jim Mulhern:

“NMPF is grateful to Agriculture Secretary Tom Vilsack and his team for working hard to provide needed support to dairy farmers. This includes implementing the congressionally-enacted Dairy Donation Program, which will foster partnerships between dairy organizations and food banks to help combat food insecurity and minimize food waste, as well as the Supplemental Dairy Margin Coverage program to reflect modest increases in farm milk production history. We also appreciate USDA’s work to incorporate the premium-quality alfalfa price into the Dairy Margin Coverage program; this will improve the DMC feed cost formula and enhance the dairy baseline ahead of the next farm bill, to the betterment of all farmers.

“While we will comment more fully on those initiatives once details are available, today’s announcement includes the Pandemic Market Volatility Assistance Program to compensate for some of the damage resulting from the pandemic. NMPF asked the department to reimburse dairy farmers for unanticipated losses created during the COVID-19 pandemic by a change to the Class I fluid milk price mover formula that was exacerbated by the government’s pandemic dairy purchases last year.

“When Congress changed the previous Class I mover, it was never intended to hurt producers. In fact, the new mover was envisioned to be revenue-neutral when it was adopted in the 2018 Farm Bill. However, the government’s COVID-19 response created unprecedented price volatility in milk and dairy-product markets that produced disorderly fluid milk marketing conditions that so far have cost dairy farmers nationwide more than $750 million from what they would have been paid under the previous system.

“NMPF has been working on approaches to right this unintended wrong to dairy farmers by recouping as much of the loss as possible. Today’s announcement is an initial step in this effort that will help many producers, but it unfortunately falls significantly short of meeting the needs of dairy farmers nationwide. The arbitrary low limits on covered milk production volume mean many family dairy farmers will only receive a portion of the losses they incurred on their production last year. These losses were felt deeply by producers of all sizes, in all regions of the country, embodying a disaster in the truest sense of the word. Disaster aid should not include limits that prevent thousands of dairy farmers from being meaningfully compensated for unintended, extraordinary losses.

“Additional work lies ahead to more fully remedy this shortfall for all dairy producers. We very much appreciate USDA’s persistence and efforts to find a way to cover some of these losses using existing authorities, but NMPF represents producers from all regions and of all sizes and believes that losses incurred by producers must be addressed equitably. Consequently, NMPF will work with Congress to seek supplemental funding to close this gap.

“NMPF also is continuing discussions about the current Class I mover to prevent a repeat of this problem. The COVID-19 pandemic may be a once-in-a-lifetime occurrence, but a large spread between Class III and IV milk prices is not, making it necessary to fix the Class I mover and put this problem to rest.

“We appreciate USDA’s attention to this problem as well as those in Congress who have advocated for addressing this unique loss to farmers and ensuring that it does not happen again.”

FARM Evaluator Works as a Partner

National Dairy Farmers Assuring Responsible Management (FARM) Program evaluators provide a critical link between a dairy farmer and the consumer, working to ensure best practices. But they’re also a resource for farmers, said Janae Klingler, Manager of Animal Care and Sustainability for the Maryland and Virginia Milk Producers Cooperative Association, in the latest Dairy Defined podcast.

“We are a trusted advisor to our farms,” Klingler said. “Yes, we are here to make sure that our farms are meeting the program standards, but even a bigger part of our job is making sure that our farms get to that point of meeting those program standards and helping them figure out who can help them get there.”

The full podcast is here. You can also find the podcast on Apple Podcasts, Spotify and Google Podcasts. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.