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DMC Margin Rises in March

Posted on by Theresa Sweeney

The March margin under the federal Dairy Margin Coverage Program rose $0.24/cwt above February’s to $6.46/cwt, with forecast for future margin’s indicating that February may have been the year’s low.

The March U.S. average all-milk price was $17.40/cwt, $0.30/cwt higher than in February, while the DMC March calculated feed cost was just $0.06/cwt higher than February’s. On a per hundredweight of milk basis, a higher corn price in March was almost entirely offset by a lower cost of soybean meal. The March payment for $9.50/cwt DMC program coverage is $3.04/cwt. On an annualized basis, the DMC program will have already paid the equivalent of $2.17/cwt for coverage at $9.50/cwt during the first quarter of 2021 alone.

Current futures prices indicate that the DMC program margins going forward may remain below $9.50/cwt until late summer, as rising milk prices compete with higher costs for corn and hay. USDA reported that 164.7 billion pounds of production history, or 79.4 percent of the total, was enrolled in the 2021 DMC program, with an estimated $223 million in payments for disbursement as of April 19.

USDA Moves Forward on NMPF-Led Dairy Donation Program, Adds Dairy Purchases

Posted on by Theresa Sweeney

NMPF lauded USDA’s April 13 announcement that it will soon implement the $400 million Dairy Donation Program (DDP) that NMPF secured in a COVID-19 relief package Congress passed last December. The department issued an advance notice of the minimum provisions to be included in the program, including the initial reimbursement rate for dairy product donations, which will cover at a minimum the full cost of the raw milk and therefore be significantly higher than under the existing Milk Donation Reimbursement Program created in the 2018 Farm Bill.

The announcement is especially crucial because it comes at a time when the spring flush is building across the U.S. and is meant to “encourage the dairy industry to process and donate surplus milk supplies during the spring surplus milk production season,” according to USDA. This aligns with the intent of Congress to allow USDA to make retroactive reimbursements for donations made before final program regulations are announced later this year.

“NMPF worked closely with Congress to enact the Dairy Donation Program in the Consolidated Appropriations Act of 2021. This important program will help dairy farmers and the cooperatives they own to continue to do what they do best – feed people,” said Jim Mulhern, NMPF president and CEO, in a statement commending the USDA announcement. “Dairy stakeholders are eager to expand their partnership efforts with food banks and other distributors to provide a variety of nutritious dairy products to food-insecure households who have faced uniquely difficult challenges throughout the COVID-19 pandemic, as hunger has risen significantly during the last year.

“We commend USDA for prioritizing implementation of the DDP and look forward to continue working with the Department, the food bank community and all involved to make the program a success,” Mulhern said.

NMPF will continue to work closely with USDA and other interested stakeholders as the department works to finalize the program’s complete parameters. In particular, recognizing that processing and other expenses can significantly raise the cost of donating dairy products, NMPF is urging USDA to reimburse for these additional costs in order to make the DDP as effective as possible.

Beyond the DDP, NMPF looks forward to working with USDA on buying more of a wider variety of dairy products. Along with the department’s expected announcement that the Farmers to Families Food Box Program will end this month, Agriculture Secretary Tom Vilsack has indicated that USDA will continue to purchase dairy and other products through a variety of channels, such as Section 32 and The Emergency Food Assistance Program. NMPF is urging continued robust purchases of dairy products, with an emphasis on securing a better product balance between cheese and butter, to avoid the extreme market volatility that dairy farmers endured last year.

Dairy Farmers to Seek Emergency USDA Hearing on Class I Mover Reform

Posted on by Theresa Sweeney

NMPF’s Board of Directors voted April 23 to request an emergency USDA hearing on a Federal Milk Marketing Order proposal to restore fairness for farmers in the Class I fluid milk price mover. The endorsement of the board, which represents dairy farmers and cooperatives nationwide, followed approval April 16 from the organization’s Executive Committee.

The NMPF plan would ensure that farmers recover lost revenue and establish more equitable distribution of risk among dairy farmers and processors. The current mover, adopted in the 2018 farm bill, was intended to be revenue neutral while facilitating increased price risk management by fluid milk bottlers. But the new Class I mover contributed to disorderly marketing conditions last year during the height of the COVID-19 pandemic and cost dairy farmers over $725 million in lost income.

NMPF’s proposal would help recoup the lost revenue and ensure that neither farmers nor processors are disproportionately impacted by future significant price disruptions.

“As the COVID-19 experience has shown, market stresses can shift the mover in ways that affect dairy farmers much more than processors. This was not the intent of the Class I mover formula negotiated within the industry,” said Randy Mooney, the dairy farmer chairman of NMPF’s Board of Directors. “The current mover was explicitly developed to be a revenue-neutral solution to the concerns of fluid milk processors about hedging their price risk, with equity among market participants a stated goal.

“Dairy farmers were pleased with the previous method of determining Class I prices and had no need to change it, but we tried to accommodate the concerns of fluid processors for better risk management. Unfortunately, the severe imbalances we’ve seen in the past year plainly show that a modified approach is necessary. We will urge USDA to adopt our plan to restore equity and create more orderly marketing conditions,” Mooney said.

While the current Class I mover was designed to improve the ability of fluid milk handlers to hedge milk prices using the futures market, it was also expected to be revenue-neutral compared to the formula it replaced. But that has not been the case. The significant gaps between Class III and IV prices that developed during the pandemic exposed dairy farmers to losses that were not experienced by processors, showing the need for a formula that better accounts for disorderly market conditions.

NMPF’s proposal would modify the current Class I mover, which adds $0.74/cwt to the monthly average of Classes III and IV, by adjusting this amount every two years based on conditions over the prior 24 months, with the current mover remaining the floor. NMPF’s request will be to limit the hearing specifically to proposed changes to the mover, after which USDA would have 30 days to issue an action plan that would determine whether USDA would act on an emergency basis​. NMPF plans to formally submit its proposal to USDA this month.

NMPF Offers Dairy Industry Support to Ambassador Tai on Expanding Agricultural Markets

Posted on by Theresa Sweeney

In a meeting today with U.S. Trade Representative Katherine Tai, Jim Mulhern, President and CEO of the National Milk Producers Federation, and NMPF’s Chairman Randy Mooney offered to closely collaborate with Ambassador Tai and the entire Biden Administration on trade in order to strengthen the health of the U.S. dairy industry to allow for further expansion of the hundreds of thousands of dairy-reliant jobs across the country.

“From farmers to farm workers, dairy manufacturers, milk haulers, and port workers – all these are just some of the Americans that are increasingly reliant on dairy exports for their prosperity,” Mulhern said. “Expanding access for Made-In-America dairy products and eliminating the non-tariff trade barriers that impede them is fundamental to supporting the U.S. dairy industry and the millions more who depend on a robust dairy supply chain.”

In the meeting with Ambassador Tai, Mulhern emphasized the need for new market opportunities, noting in particular the importance of enforcement of existing trade agreements such as ensuring Canada meets its trade obligations; countering European Union attempts to misuse common food names through inappropriate geographical indication rules; engaging with Mexico to ensure a normal flow of trade; and concluding new market expanding trade agreements.

“We’re grateful to Ambassador Tai for taking the time to meet with us and discuss a few of the trade-related issues on the minds of America’s dairy farmers,” said Mulhern. “Our industry is an agricultural leader in improving sustainability, promoting high animal care standards, and providing high quality products. Together with the U.S. Dairy Export Council we’re eager to work closely with the Ambassador and her team to meet growing global dairy demand with sustainably produced American dairy products.”

Dairy Helps Get Rural America Vaccinated, With Co-ops Leading the Way

Posted on by Theresa Sweeney

The robust pace of U.S. COVID-19 vaccinations is the most important story in the country right now – and not just because vaccinations make the U.S. healthier and safer. They’re also important to building back economies – in the case of dairy, they get people into restaurants, keep schools open for in-person learning (and nutritious school lunches), and revive outlets for dairy-farmer products that have been hampered by pandemic-era life.

But herd immunity, the threshold at which the spread of the virus is broken, doesn’t happen on its own. It takes a lot of shots in a lot of arms — and a lot of trust, as people who for whatever reason may be hesitant to receive a vaccine shy away from inoculation. This is frequently the case in rural areas, where many lives are naturally socially distanced, human interactions are fewer and access to health care facilities and educational materials may not be as readily available.

That’s where dairy farms and their cooperatives come in. Dairy farmers are leaders in their communities, as well as significant employers. They’re also usually part of a cooperative, which has expertise and resources that can be applied in many areas, including public health. They’re no stranger to shots – people who work with cows knew the word “coronavirus” for decades before it became socially distanced coffee shop conversation – and they know how to organize a vaccination effort.

For all these reasons, and more, dairy has emerged as a key part of outreach to medically underserved rural areas, making sure those regions – and with it, the nation — has its fair chance to overcome COVID-19. Below is only a sampling of grassroots efforts in the dairy community to keep America safe and get it moving again.

  • Farmers and cooperatives across the country are putting together vaccination events for farmers, staff and farmworkers in the fields where they live and work. Natural Prairie Dairy, a member of Select Milk Producers Inc. organized a vaccination event for 300 of its employees at its organic dairy farm in Dalhart, Texas. And Michigan Milk Producers Association has been driving employees to vaccination sites when necessary: “We worked with the local health department and got all employees that wanted a vaccine scheduled on a few different dates,” said Gertie van den Goor, an MMPA member and dairy farmer outside Marlette, MI. “We drove everyone who needed transportation up there, and most of them were able to go during work time. We have around 80-90 percent of our employees fully vaccinated.”
  • At Maryland & Virginia Milk Producers Association, employees receive a $50 Amazon gift card upon receiving a single dose of a COVID-19 vaccine; at Dairy Farmers of America, co-op employees are offered two hours of pay for each vaccine they receive; and at Lone Star Milk Producers, employees can take paid time off to get their shots;
  • Northwest Dairy Association/Darigold, Prairie Farms and Associated Milk Producers Inc., among others, have organized vaccinations at their processing plants;
  • And at NMPF, we’re offering our COVID-19 vaccination resource toolkit, with materials in English and Spanish, to make sure that people who have been putting themselves at risk every day as part of the essential dairy workforce have access to the information they need. That’s in addition to the wide range of materials we’ve developed and publicized on how to maintain a safe work area and ensure best practices throughout the pandemic.

To get the nation where it needs to go in COVID-19 protection, it’s going to take efforts big and small, from organizations that care, across the country. To be successful, those organizations need to be ones that live in the same places as the people are who need vaccinations and are led by people trusted by those who may be vaccine-hesitant, or simply find it harder to get to one. As a 50-state, 24/7 industry, dairy is in these places and well-positioned to make a difference. It’s already happening – and it will continue to do so until the return to something resembling normal that everyone craves has arrived.

Together, we can do this. And dairy’s an important part of “we.”

U.S. Trade Representative Calls Out EU GI Abuses and Impacts on U.S. Exporters

Posted on by Theresa Sweeney

The Consortium for Common Food Names (CCFN), National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) today commended Ambassador Katherine Tai and U.S. Trade Representative Office staff, as well as the U.S. Department of Agriculture and other administration partners, for reaffirming in its Special 301 Report the U.S. government’s commitment to tackling continued European Union (EU) misuse of legitimate geographical indications (GI) protections.

USTR’s Special 301 Report, an annual publication tallying global challenges pertaining to intellectual property issues, called out the EU’s policy of blocking fair competition through the pursuit of geographical indications restricting the use of common food and beverage terms, which erect barriers to trade in products relying on common food names. “As part of its trade agreement negotiations, the EU pressures trading partners to prevent all producers, other than in certain EU regions, from using certain product names, such as fontina, gorgonzola, parmesan, asiago, or feta. This is despite the fact that these terms are the common names for products produced in countries around the world.”

“USTR has accurately diagnosed the problem. Now the task before the U.S. is to take the necessary steps to effectively curb this scourge to U.S. food and agricultural producers,” said CCFN Executive Director Jaime Castaneda. “The EU’s GI policy is intentionally barring competition from a host of other suppliers that all simply seek a level playing field including small and medium-sized family-owned companies, farmer-owned cooperatives, producers in developing countries and other actors throughout the supply chain that bear the brunt of these harmful restrictions. The U.S. must build on past advances to pursue a more proactive and effective path to combating the misuse of GIs by establishing concrete market access protections for the use of widely used terms.”

“Last year over 170 members of Congress urged an expansion of the trade toolkit the U.S. deploys to deal with geographical indications that block the use of common food names,” said Jim Mulhern, President and CEO of the National Milk Producers Federation. “It’s time to put that into practice and secure affirmative protections for the key common terms on which U.S. cheesemakers and other food producers rely. We look forward to working closely with USTR to achieve those gains to keep doors around the world open to made-in-America products.”

“U.S. dairy farmers and processors are counting on the U.S. government to have their back and defend their rights to cultivate opportunities around the world,” said Krysta Harden, President and CEO of the U.S. Dairy Export Council. “Our industry produces great products here at home and then works hard to market them overseas. To be as successful as possible, however, they count on strong U.S. government support to head off and combat unfair trade barriers such as geographical indications that ban the use of generic cheese terms. We want to partner with USTR to help bring the right policy tools to bear to make headway on this thorny issue.”

CCFN filed extensive comments with USTR outlining GI-related developments, foreign governments’ roles in driving those policies and the impacts on U.S. farmers and food producers. NMPF and USDEC also submitted comments supporting CCFN’s global overview and the need for a more robust U.S. trade policy approach to tackling GI abuses.

U.S. Dairy Exports a Sustainable Success, USDEC’s Harden Says

Posted on by Theresa Sweeney

A career devoted to agricultural sustainability – capped by a stint as the U.S. Deputy Secretary of Agriculture – has prepared new U.S. Dairy Export Council President and CEO Krysta Harden well for her new role. Dairy’s stewardship at home is a powerful message to boost sales abroad, she says – and that story is becoming ever-more-important to hear as dairy’s critics try to shape global agriculture.

“Our future is exciting,” she said. “I think we have great products. I think our farmers are the most productive in the world. They’re ready to meet the challenges of the world. And there’s a great demand for what we produce. And so we’ve got to be there, we’ve got to be in those markets, we’ve got to be building trust, building our reputation, building our image.”

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.

Dairy Farmers to Seek Emergency USDA Hearing on Class I Mover Reform

Posted on by Theresa Sweeney

The National Milk Producers Federation’s Board of Directors voted today to request an emergency USDA hearing on a Federal Milk Marketing Order proposal to restore fairness for farmers in the Class I fluid milk price mover. The endorsement of the board, which represents dairy farmers and cooperatives nationwide, follows approval from the organization’s Executive Committee last week.

The NMPF plan would ensure that farmers recover lost revenue and establish more equitable distribution of risk among dairy farmers and processors. The current mover was adopted in the 2018 farm bill and intended to be revenue neutral while facilitating increased price risk management by fluid milk bottlers. But the new Class I mover contributed to disorderly marketing conditions last year during the height of the pandemic and cost dairy farmers over $725 million in lost income. NMPF’s proposal would help recoup the lost revenue and ensure that neither farmers nor processors are disproportionately harmed by future significant price disruptions.

“As the COVID-19 experience has shown, market stresses can shift the mover in ways that affect dairy farmers much more than processors. This was not the intent of the Class I mover formula negotiated within the industry,” said Randy Mooney, the dairy farmer chairman of NMPF’s Board of Directors. “The current mover was explicitly developed to be a revenue-neutral solution to the concerns of fluid milk processors about hedging their price risk, with equity among market participants a stated goal.

“Dairy farmers were pleased with the previous method of determining Class I prices and had no need to change it, but we tried to accommodate the concerns of fluid processors for better risk management. Unfortunately, the severe imbalances we’ve seen in the past year plainly show that a modified approach is necessary. We will urge USDA to adopt our plan to restore equity and create more orderly marketing conditions,” Mooney said.

While the current Class I mover was designed to improve the ability of fluid milk handlers to hedge milk prices using the futures market, it was also expected to be revenue-neutral compared to the formula it replaced. But that has not been the case. The significant gaps between Class III and IV prices that developed during the pandemic exposed dairy farmers to losses that were not experienced by processors, showing the need for a formula that better accounts for disorderly market conditions.

NMPF’s proposal would modify the current Class I mover, which adds $0.74/cwt to the monthly average of Classes III and IV, by adjusting this amount every two years based on conditions over the prior 24 months, with the current mover remaining the floor. NMPF’s request will be to limit the hearing specifically to proposed changes to the mover, after which USDA would have 30 days to issue an action plan that would determine whether USDA would act on an emergency basis​.

NMPF Supports Labeling Integrity Through DAIRY PRIDE Act

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) commended Representatives Peter Welch (D-VT) and Mike Simpson (R-ID) and Senators Tammy Baldwin (D-WI) and James Risch (R-ID) today for reintroducing the DAIRY PRIDE Act, a bill that would bring clear, accurate labeling information for consumers and end harmful mislabeling of dairy foods by peddlers of plant-based products. The legislation requires the U.S. Food and Drug Administration (FDA) to enforce its own existing standards of identity on imitation dairy products after decades of inaction.

The DAIRY PRIDE Act directs FDA to follow its own rules and establish an agency approach for enforcement of existing dairy standards of identity.

“NMPF thanks Representatives Welch and Simpson and Senators Baldwin and Risch for reintroducing the bipartisan DAIRY PRIDE Act in both the House and Senate, yet one more example of their ongoing leadership working to ensure FDA does its job,” said Jim Mulhern, NMPF president and CEO. “FDA is responsible for the integrity and safety of our nation’s food, medicine, and medical devices, and it’s crucial that it enforce its own standards and requirements. Without enforcement, we are left open to the potential for questionable products, deceptive practices, and, in cases such as mislabeled plant-based products that masquerade as having nutritional benefits similar to dairy’s, negative effects to our health.”

Standards of identity legally define what constitutes a specific food or food product, requiring the food product to carry certain qualities. When enforced, these legal standards protect consumers by helping to ensure the integrity of their food. Standards also create a common understanding of what a food product is, helping consumers make informed choices.

FDA’s lack of enforcement of dairy standards of identity has led to consumer misunderstanding of the nutrients – or lack thereof – in imitation dairy products. An IPSOS survey conducted in 2018, for example, found that 73% of consumers surveyed believe that almond-based beverages have as much or more protein per serving than milk. In reality, milk has up to eight times as much protein. A follow-up survey found that roughly 50 percent of consumers mistakenly believe that the main ingredient in a plant-based beverage is the plant itself. Such drinks are actually mostly flavored water.

Medical groups including the American Academy of Pediatrics are voicing concerns over the harm this confusion is having on public health as misinformed consumers unintentionally choose less nutritious products for themselves and their families.

Congress has also shown a growing concern for FDA’s failure to enforce. In early 2020, the House held a hearing on the agency’s lack of enforcement. Then late last year Congress included in the report accompanying the FDA funding bill for FY 2021 a statement of concern and directive to FDA regarding enforcing dairy standards of identity.

“The reintroduction of the DAIRY PRIDE Act helps NMPF and consumers continue to move forward toward solving this critical public health and fairness issue,” Mulhern said.

More on NMPF’s efforts on this issue, including survey data and statements from medical professionals, can be found here.