Tag: dairy donation program

NMPF Heralds New Dairy Donation Program to Fight Food Insecurity

Posted on by Theresa Sweeney

NMPF lauded USDA for finalizing rules implementing the new Dairy Donation Program, which set implementation into motion in September. The program will help expand partnerships between dairy organizations and food banks to provide a wide range of dairy products to food-insecure households.

The Dairy Donation Program, enacted by Congress last December as part of COVID pandemic-related legislation, builds on the original Milk Donation Reimbursement Program. It 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. Following its enactment, NMPF worked closely with USDA to ensure that the program addresses additional costs, such as processing and transportation, to make the new program more viable. The provision covering the cost of processing is a significant enhancement from the previous program.

“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. Mulhern said NMPF appreciates Chairwoman Stabenow’s leadership in securing the program’s enactment and lauded 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).

NMPF also worked closely with Feeding America to support the program and recommend approaches to ensure its effectiveness. NMPF hosted a webinar on September 16 with Feeding America and USDA to educate dairy stakeholders about the program.

“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,” Mulhern said.

More Work Begins When New Dairy Programs Take Effect

Posted on by Theresa Sweeney

Achieving policies that benefit the nation’s dairy farmers is one of the most gratifying parts of working on their behalf. Since the COVID pandemic began in 2020, there has been no shortage of federal acronyms – CFAP, PPP, EIDL, etc. – for programs to help family farms through difficult times. But these initiatives are also complex and imperfect, which is why once a program takes effect, the work has often only begun.

In dairy, USDA is currently implementing two important new initiatives – the Dairy Donation Program or DDP and the Pandemic Market Volatility Assistance Program or PMVAP – while another major program, Dairy Margin Coverage, prepares for 2022 signup. Even as we’re still working to improve them, it’s crucial over the next few months that the dairy community understand and benefit from these programs. As always, we at NMPF will do our best to both lead and assist as these important initiatives roll out.

The Dairy Donation Program, enacted by Congress late last year, represents a very important advance for the industry. We’ve been proud to shepherd it through the legislative and regulatory process, from proposing the initial idea to encouraging its use for all forms of dairy products, a change from the previous Milk Donation Reimbursement Program, which provides limited reimbursements for certain fluid milk product donations. We’re now actively working to help implement DDP, both through our partnership with Feeding America and by informing our members about the program on everything from how to set up relationships between dairy cooperatives and vendors to the ins and outs of how some processing costs will be covered.

It’s important to remember that donations can be reimbursed retroactive to Jan. 1, 2020, and that for now, only the first $400 million of donations will be compensated, making it smart to begin relationships with food banks and other charities that can receive and donate dairy foods. Although USDA expectations are that the full amount of funding will be used over several years, the sooner we demonstrate the benefits of DDP by exceeding USDA’s expectations, the earlier will be able to work to pursue additional resources.

Strengthening ties between dairy community farmers and the cooperatives they own with those helping families who will benefit by receiving dairy products is a great win-win, as it supports the resilience of our communities and ensures that everyone benefits from nutritious dairy products.

The Pandemic Market Volatility Assistance Program (PMVAP) is an important – if still incomplete — gain for dairy. We worked closely with USDA to demonstrate that last year’s price volatility harmed farmers and required a remedy, and PMVAP is an important first step toward recouping the $750 million farmers lost because of the 2018 Farm Bill’s change to the Class I mover that needs to be followed by an eventual fix to the mover itself. It wouldn’t have happened without months of careful consultation between NMPF and USDA that led to the program, which restores $350 million of those losses.

That amount, to be sure, doesn’t fully address the past losses, nor does it prevent future shortfalls. Nor does the program’s approach to allocating funds adequately account for differing farm sizes or regional impacts. But for all its faults, it’s important that farmers and cooperatives maximize PMVAP’s benefits, even as we work with advocates in Congress to obtain additional assistance. Milk handlers who will distribute the funds are already in discussion with USDA on how to do it, and farmers should receive payment during this year’s fourth quarter. Meanwhile, we are working with our members to secure the necessary improvements, and our Economic Policy Committee is discussing a more fundamental fix to various FMMO issues, including the Class I problem itself.

Finally, farmers should be on the lookout over the next few weeks for information on 2022 signup for the Dairy Margin Coverage program, the main federal safety net for dairy farmers that arose from efforts we and the dairy community made to improve assistance in the 2018 farm bill. DMC has something for every producer – inexpensive catastrophic-level coverage for larger producers and cost-effective margin insurance for everyone’s first five million pounds of milk annually. For this year’s signup, USDA improvements to the feed-cost formula and the use of updated production data – both of which fulfill longstanding NMPF goals – make the already compelling case for DMC even stronger, with payments that this year so far are averaging out to 7 percent more than they otherwise would have been just from the alfalfa-price adjustment alone.

Working to strengthen dairy farmers is why we’re here, and we’re proud of these gains. But the puzzle pieces are many, and the picture isn’t complete until they’re properly put together. We’re excited to help our members and the dairy community with assembly over the next several months, and beyond.

NMPF Pursuing Needed Fixes on Disaster Assistance and Class I Mover

Posted on by Theresa Sweeney

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 Lauds Establishment of Dairy Donation Program to Fight Food Insecurity

Posted on by Theresa Sweeney

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

Posted on by Theresa Sweeney

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.”

Dairy ‘Cliffhangers’ Need Resolution

Posted on by Theresa Sweeney

Cliffhangers are great in movies, but they’re frustrating in public policy. Congress is entering its traditional August recess with a big not-yet-done list on topics ranging from infrastructure to immigration. For the sake of dairy farmers, we’d like to see faster movement.

But hope and hard work are dairy strengths, and we at NMPF continue our efforts to make sure that at least some of these cliffhangers resolve quickly and positively. Each gain, big and small, improves livelihoods. Here are a few cliffhangers awaiting resolution as lawmakers leave Washington and head to their districts to reconnect at county fairs and town halls. (Feel free to tell them NMPF says hello.)

  • USDA’s Dairy Donation Program. This initiative provides compensation for dairy-product donations, with support retroactive to last Dec. 27. The $400 million program, part of a COVID relief package Congress approved that month, is largely ready to go, thanks to USDA’s diligence, but it’s awaiting signoff from the White House Office of Management and Budget. Final details are expected to be worked out soon, encouraging dairy community efforts to aid needy families through food banks and other distributors.
  • Direct Producer Support. USDA has indicated plans to offer details within the next few weeks on other COVID-related initiatives to provide direct relief to dairy producers. In response to NMPF entreaties, USDA is seeking to reimburse dairy producers for uncompensated losses they’ve suffered when traditional milk price relationships were turned upside down last year. Meanwhile, the Supplemental DMC program would allow producers whose annual production was below 5 million pounds in 2014, but has modestly increased, to receive corresponding payments. This not only aids small producers; it increases the amount of money available to dairy in the next farm bill. Finally, we’re seeking to correct a flaw in last year’s Coronavirus Food Assistance Program to help producers who experienced serious losses due to the pandemic but saw their assistance hindered by CFAP payment caps. NMPF has spearheaded efforts to remedy this imbalance with USDA.
  • Programs that advance dairy’s Net Zero Initiative goals. As NMPF’s Senior Vice President for Government Affairs, Paul Bleiberg, noted in a recent NMPF podcast, Congress is making progress in several areas that will help dairy reach its ambitious goal of net-zero greenhouse gas emissions by 2050. The Growing Climate Solutions Act, which passed the U.S. Senate by a 92-8 vote in June, encourages better-functioning environmental markets, which will help farmers achieve the industry’s net zero goal. Meanwhile, an investment tax-credit bill for greenhouse-gas-reducing technologies is making headway on Capitol Hill, and Congress is considering enhancing conservation policy to encourage climate-friendly agricultural practices and markets that compensate farmers for being stewardship leaders.
  • Finally, addressing dairy’s ag-labor crisis. Perpetually among the heaviest lifts in Congress, agricultural labor reform has at least some momentum this year via the Farm Workforce Modernization Act, which passed the U.S. House of Representatives in March. Senate discussions remain behind-the-scenes, but we have positioned dairy prominently in this debate via the many opportunities we’ve had to spotlight dairy’s labor needs, ranging from a Senate Judiciary Committee hearing on agricultural labor issues and public events with key federal officials to the inclusion of language expanding the current H-2A visa program to accommodate dairy in a recent appropriations bill. These are the types of smaller actions that lead to larger ones, and we will continue this drumbeat to prod Congress to get the job done.

This list, of course, isn’t comprehensive. Dairy’s activities in Washington range widely, from legislation on school milk and plant-based product labeling to forceful advocacy on trade. And other issues, especially those related to milk pricing, are sure to heat up in the months ahead, leaving no shortage of suspense in Washington.

But progress does occur, and we’re looking forward to seeing more progress soon. Washington may be taking a “break,” but we aren’t. And we look forward to helping to resolve at least a few “cliffhangers” in the weeks and months to come.