To help dairy marketers and farmers feed consumers’ hunger for information about where their food comes from, the National Dairy FARM Program will be launching a new website this month. To help share the story of animal care on America’s dairy operations, this October, the FARM Program will be releasing a new suite of communications resources that includes a brand new, consumer-friendly and updated website; a catchy, modern, animated video explaining the program and a blog to talk about animal care.

The FARM Program will also be active on Twitter, Facebook and Instagram to cross-promote the content from dairy farmers and co-ops that are active on social media, especially when they’re mentioning or discussing topics that pertain to animal care. This activity is supported by Dairy Management Inc.

The new education tools come at a time when the number of consumers who say animal welfare is important has grown since 2013 from 17% to 31%.  Today, more than 93% of the domestic milk supply comes from farms that participate in the National Dairy FARM Animal Care Program.

Carrie Hughes, a Texas native with experience in nonprofits, has joined the NMPF staff as executive assistant to President and CEO Jim Mulhern. She will provide administrative support by facilitating day-to-day workflow, coordinating business trips and completing special projects. She replaces Brenda Rowe, who worked under Mulhern for two years.

Hughes has a family history of farming: Her father’s family previously owned a small farm in East Texas, and her aunt and uncle own a ranch in South Texas. Hughes attended Baylor University in Waco, where she majored in political science.

Since then she has received another degree in teaching, and worked for several nonprofits, including the Young Presidents Organization in Texas, and the D.C.-based Arthritis Foundation as administrative coordinator to the vice president of advocacy.

Hughes is attending George Washington University for her master’s in geographical information systems and geography.

OCTOBER 4, 2015 — The National Milk Producers Federation and the U.S. Dairy Export Council noted the conclusion today of Trans-Pacific Partnership (TPP) negotiations and thanked the U.S. negotiators for their work. NMPF and USDEC leadership and staff have attended the talks in Atlanta this week, which kicked off with a chief negotiators meeting on September 26 before shifting into a Ministerial on September 30. Both organizations have been providing input and guidance to negotiators throughout the duration of the regional trade pact.

As expected, details of the agreement were not immediately available. Transparency requirements under the Trade Promotion Authority legislation passed by Congress earlier this year, however, require the full text of the agreement to be released shortly. NMPF and USDEC will carefully review the agreement’s dairy provisions in the coming days.

The organizations expressed deep appreciation to the numerous members of Congress who have conveyed the importance of a successful dairy market access outcome during the years of negotiation, but in particular, during the closing negotiations this week.

 

The federal government has had a sometimes helpful, sometime hurtful role in agriculture throughout the nearly 100 years that the National Milk Producers Federation has been in existence. Various government programs to help level the economic playing field for food producers have come and gone. But the clear trend is toward providing farmers with skin-in-the-game risk management tools to cushion some of the downside damage from the often incredible volatility that they face – without creating a cradle so all-encompassing that it snuffs out competition or innovation.

For dairy farmers, this type of a government-sponsored system to hedge some of their economic risks is a relatively new paradigm.  Up until last year, and dating back well into the 20th century, the government used a mix of interventions, including the price support program, as well as periodic direct payments, to assist the dairy sector.  But as a result of the farm bill that Congress passed last year, those days are behind us.  Today, the same type of risk management that crop producers use – economic insurance to prevent catastrophic production losses – is what dairy farmers now have. 

The USDA’s Margin Protection Program, which took effect back in January, remains a work in progress, but overall, the MPP is functioning the way it was intended.  While older programs were linked to a specific price for milk and dairy products, the MPP recognizes that price alone doesn’t determine the economic health of the industry.  Feed costs play a crucial role – and in fact, have grown in importance given the increased reliance of today’s dairy sector on purchased feed.  That’s why the MPP is focused on the all-important margin between the price of corn, soybean meal and alfalfa, and the farm-level price of milk.

When the initial sign-up period for MPP coverage in 2015 got underway 12 months ago, farmers were enjoying a year of record-high milk prices. Despite our industry’s long history of up-and-down price cycles, the notion that the commodity supply-demand pendulum could swing dramatically back toward lower prices was far from many people’s minds. 

But the cycle did reverse itself, with a vengeance, as this year began.  Growing output in the world’s major milk production regions, the Russian embargo, China’s cooling economy and a strong dollar combined to dampen world dairy prices and U.S. exports. Dairy farmers in Europe and New Zealand are suffering through prices worse than we faced in 2009. Milk prices here have actually been surprisingly consistent – better than the rest of the world, but still disappointingly poor – during the first nine months of 2015.  Unlike several years in the recent past, feed prices have been in a consistently moderate range.

The result of this dynamic has been an average margin of around $8 per hundredweight, using the national formula established under the MPP program.  That figure is close to the average margin we’ve experienced over the past 15 years.  It is certainly well above the horrifically bad margins of 2009 and 2012, when the gap between feed and milk prices was less than $4/cwt.

This year’s distressing, but not disastrous, conditions have created a challenging freshman year for the MPP program.  For those who elected to purchase the maximum level of coverage, at $8, the program has made small payments in every one of the four, two-month payment cycles through August.  While few farmers elected to cover up to that maximum margin level, those that did have been paid.  Those who insured less, including the majority of farmers who paid only $100 for basic $4 coverage, have not received any compensation because margins haven’t been at catastrophic levels. 

From this perspective, then, the MPP has been like any other insurance program.  From a national standpoint, this year’s margins have been closer to a fender-bender, where one’s auto insurance coverage probably isn’t the best way to cover the damages.  This year isn’t the equivalent of a total bumper-to-bumper wreck, necessitating a large payout to fund an entirely new vehicle.  So from that standpoint, the MPP hasn’t been tested by a worst-case scenario. 

Some may have a sense of buyer’s remorse, wondering whether the old MILC payment program would have been more beneficial.  In fact, using the feed-adjusted MILC target price, this year’s milk prices would not have triggered any MILC payments in 2015. Class I prices have been well above the MILC trigger level every month this year. 

We are now in the MPP sign-up period for next year’s coverage. Thankfully, USDA Secretary Vilsack honored NMPF’s request last month for an extension of the sign-up period beyond the fall harvest. Dairy farmers now have until November 20 to elect their coverage level for next year, and will have until September 1, 2016, to pay any premium due for that coverage.

The choice farmers have to make for next year is whether market forecasts indicate that additional margin protection will be worth the added premiums. Such a question is a perennial consideration when purchasing any type of insurance, including protecting your home and property. 

The choice is not, however, whether some other type of government program for dairy farmers is a better approach.  That question was effectively answered in 2009 and again in 2012 – and also this year, which is a historically average one. In each case, the MPP program – a safety net, not an income enhancer – has been the consistent winner.

Jim Mulhern

Despite little indication when intensive negotiations on the Pacific Rim trade deal will resume, NMPF remains optimistic the talks can be concluded successfully in a way that addresses the priorities of the U.S. dairy industry.

Meeting in Hawaii in July, trade ministers for the 12 Trans-Pacific Partnership nations made some progress but failed to reach agreement on several important issues, including access to dairy markets.

Key to the impasse on dairy was Canada’s refusal to significantly open its highly protected markets, the limited access offered by Japan, and New Zealand’s desire that the United States compensate it in dairy access to the U.S. market given the limited offers from Japan and Canada.

“Despite the stalemate on dairy, we are optimistic negotiators can bring the TPP talks to a successful conclusion soon, and we look forward to the resumption of intensive discussions,” said NMPF President and CEO Mulhern.

“At the same time,” Mulhern said, “we are continuing to make clear that we will not support a package that would make U.S. dairy farmers a net loser in this agreement. We are prepared to do our part, but others need to do theirs, too. The burden of this agreement cannot be carried by the United States.”

Mulhern urged dairy producers to keep telling their House and Senate members they support a balanced Pacific trade pact that benefits the U.S. dairy industry. U.S. producers now export the equivalent of one-seventh of their milk production, and both Canada and Japan are viewed as key future markets U.S. dairy products.

Madelyn Berner, a Syracuse University graduate with five years of journalism experience, has joined the NMPF communications team. She will work with Senior Vice President Chris Galen on growing the Federation’s presence on social media and the web – including an eventual revamp of the NMPF website.

A native of Arlington, Va., Berner has Iowa roots and is a long-time milk drinker. She replaces Sarah Olson, who left NMPF after eight years.

Berner has worked for several Washington-area news organizations – including the Washington bureau of Agence France-Presse – since graduating from the S.I. Newhouse School of Public Communications at Syracuse in 2014. At the French news agency, Berner worked on the multimedia desk editing news videos. She also served as a staff writer for both Washingtonian Magazine and The Chronicle of Higher Education.

At Syracuse, Berner was managing editor of the campus newspaper, The Daily Orange. Between academic years, she held internships at Northern Virginia Magazine and DC Magazine.

There’s less than a month left for dairy farmers to sign up at their local Farm Service Agency office for 2016 coverage under the dairy Margin Protection Program. The second enrollment period under the new federal dairy safety net program closes September 30th.

To help farmers make decisions, NMPF has updated tools at www.FutureforDairy.com, a website serving as a clearinghouse for MPP information. Included are a brochure explaining the program and its importance to dairy farmers and a calculator allowing farmers to estimate future margins based on their forecasts of feed and milk prices.

MPP helps protect against the kind of catastrophic losses that many farmers experienced in 2009 and again in 2012. It allows farmers to insure the difference between milk prices and feed costs. Producers insure their operations on a sliding scale, deciding both how much of their production to cover and the level of margin to protect.

Through the first six months of 2015, the program has issued payments in each of the three bi-monthly coverage windows for those who elected the maximum $8 margin coverage.
 

In less than two months, hundreds of dairy industry leaders will converge in Orlando, Florida, for the joint annual meeting between the National Dairy Board (NDB), the National Milk Producers Federation (NMPF), and the United Dairy Industry Association (UDIA). “A Legacy of Leadership” will take place from October 26-28 at the Orlando World Center Marriott.

Farmers and other industry leaders will discuss the major trends and issues affecting today’s dairy industry, and how those trends will affect its future. The meeting will feature a special presentation from market expert Jeff Fromm on how best to reach millennial consumers, who are now controlling a significant share of the retail food dollar.  The meeting will also feature a panel discussion on animal care, and its significant across the food value chain.

With the days ticking away, it’s important to both register for the event and make hotel reservations. This year’s event features a new online registration site, Eventbrite, which is compatible with mobile phones. Please go to http://annualmeeting.dairy.org and register by Wednesday, October 7, 2015.

For hotel reservations, please visit https://aws.passkey.com/g/29748120 and mention “2015 NDB/NMPF/UDIA” to receive the group rate. The deadline for reservations is also October 7.

On the last day of August, NMPF urged the Obama Administration to hold off on the national enforcement of the new Waters of the U.S. (WOTUS) regulation. This comes in response to a court decision suspending the regulation in some states, but not others.

On August 27th, the U.S. District Court for the District of North Dakota halted implementation of the water regulation, granting a temporary injunction in favor of 13 states that brought suit in North Dakota against the Environmental Protection Agency and the Army Corps of Engineers. The EPA said after the court ruling that it would not implement the rule in the 13 states involved: Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.

Concerned about the potential for confusion and inconsistent application of the regulation following the court’s ruling, NMPF sent a letter to the EPA and Army Corps asking the government to suspend enforcement of the WOTUS nationwide.

“We ask that EPA and the Corp of Engineers use their enforcement discretion and cease application of the recent WOTUS rule in all 50 states, until such time as it can be evenly applied in every state,” said NMPF President and CEO Jim Mulhern.

NMPF’s letter continues: “Clean water is central to healthy ecosystems, secure water supplies for human and animal consumption, and to the production of milk and other dairy products. We are committed to working with the EPA and COE to find effective ways to achieve these important goals.”