Tag: dairy farms

Farmers Gain Improved Access to Small Business Support as PPP Reopens

Posted on by Theresa Sweeney

The National Milk Producers Federation is pleased that farmers who run their operations as sole proprietors, independent contractors, or otherwise self-employed individuals will have newly expanded access as soon as today to the Paycheck Protection Program (PPP) under changes made in the COVID stimulus package Congress approved last month.

Producers who were denied PPP loans or whose loan amounts did not consider self-employment compensation may now be eligible for the vital federal small business support. Eligibility information and more details can be found here. Those wanting to apply for a PPP loan should contact lenders directly for more information on when PPP will be open for that specific lender.

“NMPF is pleased that many of our dairy farmers will have fewer restrictions and limitations on the PPP support available to them as the program reopens this week,” said Jim Mulhern, NMPF’s president and CEO. “We have been grateful for the support already extended to dairy through PPP, and we deeply appreciate the improved access found in the latest stimulus package.”

Congress created PPP in the CARES Act in March of 2020 to help American small businesses keep employees during the coronavirus pandemic. Still, the program’s emphasis on payroll raised inadvertent yet sizable challenges for many farmers and ranchers who do not issue structured payroll — namely those operating as sole proprietors, independent contractors, or self-employed producers who file a Schedule F with their 1040 income tax form. The program’s loan application required such producers to use their net farm profit amount from their Schedule F tax form as a stand-in for their self-employment compensation when applying for a PPP loan. However, many farmers and ranchers filed a zero or negative net farm profit on their 2019 tax forms, effectually making them ineligible for the small business support.

NMPF worked successfully to advance legislation to help producers gain better access to PPP COVID relief, working closely with members of Congress leading on the issue. In June, Senators John Thune (R-SD) and Tammy Baldwin (D-WI) and Representatives Ron Kind (D-WI), GT Thompson (R-PA), Anthony Brindisi (D-NY), and John Joyce (R-PA) introduced the Paycheck Protection for Producers Act (S. 3918 and H.R. 7175). The bipartisan legislation allows farmers and ranchers who file a Schedule F to use their gross income, capped at $100,000, when applying for a PPP loan. The bill also permits producers who received a PPP loan based on their net farm profit to reapply with their gross income figure, with lenders allowed to offer the difference should the new loan amount be larger than the original amount.

The coronavirus relief measure enacted in December incorporated key provisions from the Paycheck Protection for Producers Act, securing for these farmers and ranchers increased access to the low-interest, forgivable loans.

All farmers and ranchers who file a Schedule F can apply or reapply for a PPP loan under the new rules once the program reopens. In general, agricultural producers and co-ops with 500 or fewer employees, including employees of businesses with which they have an affiliation, are eligible. Alternative size standards may qualify larger businesses, and interested larger borrowers are encouraged to explore options with lenders and/or their accountants. The Small Business Administration announced PPP would reopen in multiple stages beginning this week.

2021 Promises Better Days Ahead, Thanks to the Successes of 2020

Posted on by Theresa Sweeney

A new year brings new hope, and there are plenty of reasons for hope in dairy as 2021 begins.

The arrival of COVID-19 vaccines promises an eventual return to more-normal patterns of life — and less volatility in markets — at some point this year.

A new Congress and administration will provide opportunities to address important concerns – and dairy, with its proud tradition of bipartisanship, is uniquely positioned to seize those opportunities even in a divided government.

And dairy’s 2020 track record of accomplishment – led by the advocacy of the cooperative community from the beginning of the coronavirus crisis last March to the latest federal assistance package signed into law in late December – provides a formidable foundation to build from as we stay true to our mission of serving our members during the challenging, though in the end brighter, year ahead.

About those accomplishments. There hasn’t been much time to pause and reflect on how profoundly dairy rose to the occasion in 2020 — not in a 24/7, 365-day-a-year industry that never stops producing products and serving consumers. This crisis has evolved too quickly, and the needs have been too ever-changing and acute, for anyone to truly rest. But the gains that our members, and everyone in dairy, have made through tireless advocacy have been substantial. The COVID stimulus bill approved in December alone included:

  • $400 million for a new NMPF-backed Dairy Donation Program open to all producers to help dairy stakeholders and non-profits work together to provide dairy products to food-insecure households and minimize food waste.
  • Provisions enabling USDA to provide additional compensation to producers who earlier were unable to receive the full support they needed under the Coronavirus Food Assistance Program, which had payment limitations that didn’t fully address the extent of the damages incurred on many dairy farms.
  • Supplemental Dairy Margin Coverage (DMC) payments for farms whose DMC production history has increased since 2014, up to 5 million pounds. The provision is a boon for smaller operations and increases farm bill baseline spending for all dairy farmers through 2023, the life of the current law.
  • Improvements that will make the Paycheck Protection Program work better for sole proprietor, independent contractor, and self-employed dairy farmers by allowing them to use their 2019 gross income to determine their PPP loan amounts.

And of course, dairy farmers will be eligible for support in the $11 billion agricultural disaster assistance package, of which at least $1.5 billion is already being targeted to additional product purchases for distribution to food insecure individuals, included in the legislation Congress has passed.

It’s important to note that the stimulus bill was only the most recent in a string of policy successes that together have generated well over $5 billion in assistance to dairy producers and helped stabilize markets. It’s also important to remember that each success builds upon earlier ones.

For example, the progress on payment limits built on the earlier victory of getting dairy farmers more equitable treatment in payments made under the Coronavirus Food Assistance Program than they had received in earlier programs, like the trade-mitigation payments. Now, CFAP itself has been improved upon. And the supplemental DMC payments will set the stage to remedy a niggling flaw in the DMC’s coverage, that of an out-of-date production history that does not reflect farmers’ current situations. But the DMC was itself a major improvement on the old Margin Protection Program. And now participation in DMC will be even more fruitful for many producers.

Such gains only come from credibility, persistence, tireless effort and the patient building of relationships with key officials on Capitol Hill and in the administration. It’s the kind of work NMPF has prided itself on, day-in and day-out, throughout its existence – and it’s the dedication that shines through during times of critical need, like what we’ve seen in these past few months.

The year’s successes extend beyond legislation as well. Gains in trade policy helped enable a year of progress for U.S. exports, which data indicates may end up being a record year for the total volume of milk solids exported. Our FARM Program continues to lead in industry best practices. Our successful advocacy in regulatory issues has aided our farmers in the eternal struggle against red tape. And we’ve effectively communicated dairy’s story, to farmers and to the world, letting everyone know that this sector is essential, and resilient, and well-positioned to thrive.

The lessons learned in 2020 both prepare us, and brace us, for the days ahead. With normal times not yet here, 2021 certainly won’t be easy. The economy will remain touch-and-go. Partisanship may intensify. Longstanding issues like agricultural labor will remain difficult to resolve, and rising issues such as climate change will pose additional challenges.

But we’re energized by the challenge of serving our members even more effectively. We know we can do it, because we’ve seen the dairy community rise to meet its challenges throughout this past year. And together, we will create better days to come.

NMPF Awarded USDA Grant to Advance On-farm Biosecurity Through FARM

Posted on by Theresa Sweeney

NMPF was awarded funding last month from USDA Animal and Plant Health Inspection Service (APHIS) to develop and improve biosecurity on U.S. dairy farms.

NMPF will use the grant to implement and coordinate the Secure Milk Supply plan and develop a biosecurity program area through the National Dairy FARM Program (FARM). The FARM Animal Care program places an emphasis on biosecurity as a key element of dairy herd health and the grant funding will allow for further prioritization.

“The dairy industry has partnered with USDA for more than a decade on the Secure Milk Supply Plan. With this new funding, we are eager to continue and expand our work on biosecurity through integration with FARM,” said Jim Mulhern, president and CEO of NMPF. “We applaud USDA’s work to enhance the prevention, preparedness, detection, and response to animal diseases that threaten the viability of U.S. dairy farms.”

The grant is funded by the 2018 Farm Bill as part of an overall strategy to help prevent animal pests and diseases from entering the U.S. and reduce the spread and impact of potential disease incursions through advance planning and preparedness.

USMCA Enforcement Stays at Top of USTR’s Agenda with NMPF Help

Posted on by Theresa Sweeney

After sustained engagement from NMPF and USDEC to bring the U.S. Trade Representative’s attention to Canada’s administration of its Tariff Rate Quota (TRQ) obligations under USMCA, USTR announced Dec. 9 it will initiate official consultations with Canada.

“Enforcement has been one of the top priorities of our industry since the final agreement was announced, and we’ve worked diligently to ensure that it remains one of USTR’s top priorities, as well,” said Jim Mulhern, president and CEO of NMPF, in a statement the day of the announcement. “Only when Canada is held fully accountable to its trade commitments will America’s dairy farmers be able to realize the full benefit of the provisions that the U.S. government worked so hard to secure.”

The USTR decision came after months of groundwork by NMPF and USDEC. Even prior to USMCA’s entrance into force, the two organizations called attention to the fact that Canada’s TRQ allocations undermined the intent of USCMA’s dairy provisions. The concerns of the organizations were shared with Congress, then echoed by a broad bipartisan coalition of members of Congress in two letters from the House and the Senate.

NMPF will continue to work with both trade officials and Congress to monitor Canada’s compliance with USMCA, as further enforcement may be necessary to effectively address Canada’s unfair dairy policies.

NMPF Sets Stage for a Successful 2021 in Trade

Posted on by Theresa Sweeney

NMPF is poised for further gains in 2021 after working hard to advance dairy’s trade priorities in 2020, delivering critical wins for America’s dairy farmers and farmer-owned cooperatives.

NMPF’s Jaime Castaneda, Senior Vice President of Policy Strategy and International Trade, wrote an op-ed for Hoard’s Dairyman detailing a few of the many ways NMPF worked closely with the U.S. Dairy Export Council to help to dismantle tariff and nontariff barriers and expand market access for dairy exports in 2020.

Examples included:

  • Pushed for successful implementation of the US-China Phase 1 deal’s dairy nontariff relief provisions, including removal of the dairy facility inspection requirement and more timely updates of China’s list of authorized U.S. exporters;
  • Marshaled robust support from 170 members of Congress demanding that the U.S. take a stronger approach to preserve U.S. rights to use common food names and safeguard U.S. market access abroad;
  • Secured tariff cuts from Vietnam and China to the benefit of U.S. dairy exporters; and
  • Fended off multiple regulatory and policy pressures in Mexico that threated access to our largest export market, and much more.

Each of these accomplishments has helped set the stage to bring home even greater benefits in the coming year. To achieve this, NMPF is working with the U.S. Dairy Export Council (USDEC) to ensure that the industry is well-positioned to swiftly execute on key issues as a new Congress and a new administration takes office in 2021.

Key goals include:

  • Robust enforcement regarding the implementation of USMCA dairy commitments by Canada and Mexico;
  • Pursuit of new trade agreements with sizable net dairy-importing nations; and
  • Strong action to address the use of nontariff trade barriers to hamper U.S. dairy exports’ opportunities.

As part of this important effort to secure new advances in trade policy, NMPF joined with Farmers for Free Trade to issue a report based on the AgTalks series NMPF helped sponsor and participated in earlier this year. The Farmers for Free Trade report includes an assessment on the state of American agriculture as well as policy analysis and recommendations.

Finally NMPF soon will launch a joint initiative with USDEC to equip dairy farmers and industry staff with the tools necessary to articulate dairy trade issues to policymakers and the media as the need arises.

November DMC Margin Above Assistance Threshold; 2021 Payments Expected

Posted on by Theresa Sweeney

The monthly margin for November under the Dairy Margin Coverage (DMC) program was $11.87 per cwt, the second-highest monthly margin of 2020. Margins are still expected to fall in 2021, with levels that trigger federal assistance payments for much of the year.

The November U.S. average all-milk price was $21.30 per cwt, the highest of all 2020 monthly milk prices, but that month’s DMC feed-cost calculation was $9.43 per cwt of milk, also the year’s highest. The highest margin in 2020 – and the highest since November 2014 – was $12.41 per cwt in July, when the all-milk price was $20.20 per cwt, but the feed cost was just $8.09 per cwt.

High margins and prices are expected to be distant memories for the foreseeable future, according to current dairy futures. Milk prices are not anticipated to rise much above $18.00 per cwt, with DMC margins projected to remain well below $9.50 per cwt, at least through next summer. Growth in dairy cow numbers and milk production are accelerating. Meanwhile, the COVID-19 pandemic is expected to keep food service use of dairy depressed for some time, and the outlook for continued USDA food purchases does not currently appear able to be fully adequate to bridge this growing gap between milk and supply and demand.

The cost side is also expected to be challenging: Increased prices of corn and soybean meal are projected to boost the DMC feed cost calculation well above $10.00 per cwt during this same forecast horizon.

The DMC information page on NMPF’s website offers educational resources to help farmers better use the program.

Key Dairy Wins in COVID-19 Legislation Bear NMPF Fingerprints

Posted on by Theresa Sweeney

Dairy farmers secured significant gains in 2020’s final major piece of legislation – a long-awaited COVID-19 stimulus and government funding bill that bore NMPF’s fingerprints.

The additional assistance to the dairy economy came on top of more than $5 billion in funds already secured for milk producers in large part because of the close work of NMPF and its member cooperatives with lawmakers.

“With difficult months of the pandemic still ahead, it was crucial for lawmakers to come to a bipartisan agreement that helps farmers do what they do best: feed families,” said Jim Mulhern, NMPF president and CEO, in a statement released after congressional passage. “To do this, they need financial stability and ways to connect to families in need. We thank Congress for its leadership, and we look forward to working with USDA in implementing this legislation. Importantly, this package includes nearly $1 billion in targeted support to help dairy producers continue to feed families throughout these difficult times.”

Highlights of the package include:

  • A Dairy Donation Program – $400 million for a new NMPF-backed Dairy Donation Program open to all producers to help dairy stakeholders and non-profits work together to provide dairy products to food-insecure households and minimize food waste. NMPF is grateful to Sen. Debbie Stabenow (D-MI) and Rep. Collin Peterson (D-MN) for their leadership in securing this and other dairy provisions in the package.
  • Flexibility on payment limits – Dedicated funding to allow USDA to provide additional compensation to producers who were unable to receive the full support they needed under the Coronavirus Food Assistance Program on account of payment limitations. NMPF thanks Rep. Mike Conaway (R-TX) for advocating for this provision, as well as the many members who have sought flexibility on this front all year long including Sens. Jerry Moran (R-KS) and Dianne Feinstein (D-CA) and Rep. Jim Costa (D-CA).
  • Supplemental DMC payments – Supplemental Dairy Margin Coverage payments for farms that have increased their DMC production history since 2014. These payments will be based on the difference between the farm’s 2019 actual production and its DMC production history. While the provision is targeted to smaller operations, it will enhance the farm bill baseline for all dairy farmers as it runs concurrently with DMC up to 2023.
  • Paycheck Protection Program improvements – The bipartisan, NMPF-backed Paycheck Protection for Producers Act was included in the bill. The initiative would make the Paycheck Protection Program work better for sole-proprietor, independent contractor, and self-employed dairy farmers by allowing them to use their 2019 gross income to determine their PPP loan amounts. NMPF commends Sens. John Thune (R-SD) and Tammy Baldwin (D-WI) and Reps. Ron Kind (D-WI), Glenn ‘GT’ Thompson (R-PA), Anthony Brindisi (D-NY), and John Joyce (R-PA) for their work on this measure.

Dairy producers will also be eligible for support in the $11 billion agricultural disaster assistance package Congress has included in the legislation, with additional details expected in coming days. Of note, at least $1.5 billion of this package is dedicated to additional product purchases. USDA has announced a fifth round of the Farmers to Families Food Box program using this funding. NMPF will be working closely with USDA and Congress on implementation of this package as well as on subsequent rounds of relief.