Tag: dairy margin coverage

NMPF Board Member Advocates for Dairy Priorities at Senate Hearing

Posted on by Theresa Sweeney

Sixth-generation Vermont dairy farmer and NMPF Board Member Harold Howrigan urged the Senate Agriculture, Nutrition, and Forestry Committee to swiftly advance a five-year farm bill that renews the Dairy Margin Coverage program while also addressing other major dairy issues.

Howrigan, a board member of Dairy Farmers of America, a Kansas City, KS-based NMPF member cooperative, testified on NMPF’s behalf at a hearing held last Wednesday.

Howrigan focused on the dairy industry’s ongoing work with USDA and the Food and Drug Administration to safeguard dairy herds and farm employees from Highly Pathogenic Avian Influenza A H5N1. NMPF is pressing for swift advancement of effective H5N1 vaccines for dairy cattle, combined with a risk-based vaccine deployment strategy which mitigates trading partner concerns.

“We appreciate USDA’s work to accelerate vaccine development and urge that a vaccine be made available as soon as possible,” Howrigan said.

Howrigan also touted the revamped dairy safety net authorized in the 2018 Farm Bill and strengthened by subsequent legislative and administrative actions.

“The Dairy Margin Coverage program has served farmers well during difficult times. Since it was implemented six years ago, my farm has consistently purchased the maximum $9.50 coverage,” he said.

Howrigan called labor and trade issues essential priorities for dairy farmers and the cooperatives they own, urging Congress to pass long-overdue immigration legislation that meets dairy’s unique labor needs and to work with the administration to seek new market access worldwide.

“Failing to act risks damaging the vitality of our entire sector,” he said.

Finally, Howrigan urged the committee to pass the bipartisan Whole Milk for Healthy Kids Act, spearheaded by Sen. Roger Marshall, R-KS, and Sen. Peter Welch, D-VT. As he reminded members at the hearing, “Dairy is a nutrition powerhouse but continues to be under consumed by most Americans.”

Diving in on Dairy’s Legislative Agenda

Posted on by Alan Bjerga
By Paul Bleiberg, Executive Vice President, Government Relations, National Milk Producers Federation
President Donald Trump and Vice President J.D. Vance have now taken their oaths of office, and the 119th Congress has been seated. While the opening weeks of a new Congress and presidency focus on nominations and organization, these important housekeeping processes will soon give way to a busy legislative session.

We know dairy is ready for an action-packed 2025. National Milk Producers Federation’s (NMPF) major legislative goals begins with passage of a five-year farm bill, but what makes up that bill for dairy is just as important.

First, enabling schools to offer whole and reduced-fat milk is paramount. Milk provides 13 essential nutrients and is the top source of calcium, potassium, phosphorus, and vitamin D for children ages 2 to 18. However, just last month, the Dietary Guidelines Advisory Committee’s Scientific Report reaffirmed that 88% of all Americans are under consuming dairy. The bipartisan Whole Milk for Healthy Kids Act, recently reintroduced in Congress, provides the solution. This bill would allow, but not require, schools to serve all varieties of milk, including whole and reduced-fat milk. A growing body of evidence demonstrates that dairy foods at all fat levels have a neutral or positive effect on health outcomes. NMPF strongly supports swift passage of this measure to solve a critical child nutrition problem.

This problem is made clearer by data. Accurate, transparent data drives strong public policymaking. And that brings up another NMPF policy priority: remedying the persistent lack of accurate data when it comes to the costs of manufacturing raw milk into processed dairy products, which denies stakeholders an essential tool for assessing how milk pricing formulas ought to be structured.

A fix lies in the Fair Milk Pricing for Farmers Act, a bipartisan bill to require USDA to conduct mandatory dairy manufacturing cost surveys every two years. This will equip all voices in the dairy industry with better data to help drive future dairy pricing conversations.

Ongoing discussions on dairy pricing are vital for an industry that continues to innovate and advance. But milk pricing isn’t the only area where innovation is necessary. On the farm, U.S. dairy farmers benefit from safe and effective feed ingredients that can boost productivity in their herds and support environmental stewardship. However, the Food and Drug Administration’s (FDA) current outdated review process for these ingredients hinders their timely approval and puts U.S. dairy farmers at a disadvantage with their global competitors. NMPF supports the bipartisan Innovative FEED Act, first introduced in 2023, to create a safe but expeditious process for FDA to review these products to help farmers make important gains and stay competitive.

These are just a handful of the major legislative efforts NMPF seeks to advance. Each of these bipartisan bills made headway last year as the House and Senate began their respective farm bill processes. With the new Congress getting ready to produce results, dairy stands ready to get these important priorities signed into law.

r of choice.

This column originally appeared in Hoard’s Dairyman Intel on Feb. 6, 2025.

NMPF’s Bleiberg Reviews Capitol Hill Agenda in New Year

Posted on by Chris Galen

NMPF’s executive vice president Paul Bleiberg discusses the current agenda for Congress as the leadership transitions in Washington from President Biden to President-elect Trump.  Bleiberg also highlights that the USDA plans to soon open the 2025 sign-up for the Dairy Margin Coverage program, for those farmers not already enrolled in the federal safety net.

DMC Margin Drops Again – to Third Highest Ever

Posted on by Theresa Sweeney

The monthly margin under the Dairy Margin Coverage (DMC) program lost $0.88/cwt from a month before, yet, at $14.29/cwt, still came in as the third highest since margin protection became the basic safety net program for dairy in 2015.

The November U.S. average all-milk price dropped by $1/cwt from October to $24.20/cwt, while the DMC feed cost formula declined by $0.12/cwt. A lower soybean meal price more than offset a higher corn price; the premium alfalfa hay price was little changed.

The end of December dairy and grain futures indicated that the DMC margin would average around $12.50/cwt for all of calendar year 2025, which would be $0.60/cwt higher than the 2024 annual average and well above the trigger under which payments begin.

Year-End Legislation Preserves Dairy Safety Net, Ensures Disaster Relief

Posted on by Theresa Sweeney

Following advocacy from NMPF and other farm stakeholders, Congress passed legislation Dec. 20 extending the 2018 farm bill through 2025 and providing relief to farmers who suffered losses from natural disasters in 2023 or 2024.

The extension continues the Dairy Margin Coverage safety net for the entirety of 2025. Consistent with the extension enacted in 2023, the 2019 partial production history update is part of the underlying DMC program and will remain so over the long term. In addition, those producers that initially signed up in 2019 using the five-year “lock in” option will continue to receive a 25 percent premium discount in 2025. Further, the onset of permanent law, which would trigger outdated government support known as the “dairy cliff,” is also averted through the end of next year.

The disaster assistance portion of the package provides the U.S. Department of Agriculture with $30.78 billion to offer relief to producers who endured losses, including for milk, in 2023 and 2024 on account of a wide variety of natural disasters, including droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, and freezes. Within this larger total, the bill sets aside $2 billion for assistance to livestock producers for losses related to drought, wildfires, and floods.

NMPF is grateful to Rep. David Valadao, R-CA, for leading efforts to enact the overall package and for securing the inclusion of floods on account of damages California dairy farmers endured last year due to livestock relocation, shelter-in-place, and feed crop losses. The bill also allows USDA to provide some support in the form of block grants to states, a priority for southeastern producers recently impacted by devastating hurricanes.

With this package signed into law, NMPF looks forward to working with the House and Senate Agriculture Committees to complete a new farm bill in 2025 that makes needed policy improvements and provides dairy farmers and their cooperatives long-term certainty for the years ahead.

Dairy Poised for an Action-Packed 2025

Posted on by Alan Bjerga

By Paul Bleiberg, Executive Vice President, Government Affairs, National Milk Producers Federation

2024 was a tumultuous year on the political front, and 2025 promises to be just as eventful on the policy front.

The 2024 election resulted in President-elect Donald Trump winning a second term while Republicans simultaneously won control of the U.S. Senate and held their majority in the U.S. House of Representatives. With a governing trifecta in hand next year, Republicans are poised to put their stamp on many significant issues, several of which have direct implications for dairy farmers.

Picking up where this year left off, a new farm bill remains on the congressional to-do list. Lawmakers enacted a one-year extension before adjourning for the year, paving the way for House Agriculture Committee Chairman GT Thompson of Pennsylvania and incoming Senate Agriculture Committee Chairman John Boozman of Arkansas to lead their respective panels in drafting long-term farm policy legislation next year.

This year’s House and Senate farm bill frameworks included numerous dairy priorities, such as requiring USDA to conduct mandatory manufacturing cost surveys every two years, prioritizing common food name protection in trade discussions, and allowing schools to serve nutrient-dense whole milk. This year’s extension ensures that the Dairy Margin Coverage (DMC) program continues without disruption as the National Milk Producers Federation (NMPF) advocates for a new five-year farm bill next year that meets dairy’s needs.

Republicans will also turn their attention to extending the expiring provisions of the Tax Cuts and Jobs Act of 2017, one of President-elect Trump’s signature first-term accomplishments. NMPF will urge Congress to continue several pieces of the 2017 law, including the Section 199A domestic manufacturing tax deduction that allows agricultural cooperatives to pass the proceeds directly back to their farmer-owners. Congress is likely to complete this process using the tool known as budget reconciliation, which allows for the consideration of certain tax and spending legislation not subject to the Senate’s 60-vote filibuster requirement.

Finally, Congress will need to address an overall government funding deadline in early 2025. This year’s draft House and Senate agriculture funding bills included several NMPF-backed provisions, including House language to reverse the reduction in the maximum monthly milk allotment in USDA’s final foods package rule for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Senate language mirroring the Innovative FEED Act to allow the Food and Drug Administration to review animal feed additives in a more efficient manner. While a short-term funding extension will require the new Congress to complete the full-year bills, the bills drafted this year will likely serve as the starting point for final negotiations next year.

Beyond these priorities, Congress and the incoming Trump Administration are likely to address major issues ranging from environmental policy to labor to trade. At each step of the way, NMPF will advocate for dairy farmers and the cooperatives they own as they seek to provide the U.S. and the world with wholesome, nutritious, and sustainably-produced milk and dairy products.

lve harmful barriers to trade, and promote the U.S. dairy industry as the global supplier of choice.

This column originally appeared in Hoard’s Dairyman Intel on Dec. 26, 2024.

NMPF’s Galen Reviews 2024 Highlights, Latest on Farm Bill Extension

Posted on by Chris Galen

NMPF’s senior vice president Chris Galen outlines for Dairy Radio Now listeners how Congress is wrapping together a farm bill extension with a government funding bill, just a few days before Christmas, and how NMPF will work with Congress on a new farm bill early in 2025.  He also summarizes highlights for dairy farmers from 2024, including strong margins and near-record levels of dairy consumption.

October DMC Margin Recedes $0.40/cwt from September Record

Posted on by Rachel Ravencraft

The monthly margin under the Dairy Margin Coverage (DMC) program decreased by $0.40/cwt from September’s record level to $15.17/cwt. The October all-milk price was down $0.30/cwt from September to $25.20/cwt, while the DMC feed cost formula rose again from September, by $0.10/cwt of milk, mostly on a higher price for premium alfalfa hay. 

The end of November dairy and grain futures indicated the DMC margin would average around $11.85/cwt for all of 2024. 

Record DMC margins and relatively high prices come as policy and market developments continue to keep the NMPF/U.S. Dairy Export Council Joint Economics team busy with market analysis and events 

NMPF Senior Director for Economic Research & Analysis Stephen Cain presented a market outlook to the ADPI Risk Management Seminar on Nov. 6 in Chicago and an FMMO and a farm bill update to Texas Farm Bureau virtually on Nov. 7. Will Loux gave an overview of the impact of H5N1 on the market to the Innovation Center Animal Care Committee virtually on Nov. 14.  

September DMC Margin Sets Second Consecutive Monthly Record

Posted on by Theresa Sweeney

The monthly margin under the Dairy Margin Coverage (DMC) program rose by $1.85/cwt from August’s previous record level to $15.57/cwt, again the highest since margin protection became the basic dairy safety net program in January 2015.

The September all-milk price was $25.50/cwt, $1.90/cwt higher than the month before, while the DMC feed cost formula inched up from August by $0.05/cwt of milk, mostly on offsetting price moves for corn and premium alfalfa.

The end of October dairy and grain futures indicated that the DMC margin would average around $12/cwt for all of calendar year 2024.

August DMC Margin Sets Record

Posted on by Theresa Sweeney

The Dairy Margin Coverage (DMC) monthly margin rose by $1.40/cwt from the month before to $13.72/cwt, the highest since margin protection replaced the old price support program as the basic dairy safety net program in January 2015. The August all-milk price was $23.60/cwt, up $0.80/cwt from July, and the DMC feed cost formula dropped by $0.60/cwt of milk, driven mostly by a lower corn price.

Late September dairy and grain futures indicated that the DMC margin would average around $12.20/cwt for all of calendar year 2024.

FMMO Persistence Pays off for Farmers

Posted on by Theresa Sweeney
  • USDA’s recommended FMMO decision incorporates NMPF proposals
  • Economics team member provided market outlooks and FMMO process updates across the country

NMPF’s Joint Economics Unit saw intense Federal Milk Marketing Order modernization in 2024, especially in the year’s earlier months. NMPF submitted its final legal brief to USDA in March, emphasizing that farmers are the reason the order system exists and that they should be the priority as USDA considers its final decision.

USDA released its recommended FMMO modernization plan July 1, agreeing in large part with the underlying principles of NMPF’s proposal. USDA’s biggest difference with NMPF was its establishment of a Class I mover for extended shelf-life products, which consists of the average of with an adjustable mover, even as most of the U.S. milk supply would revert to the “higher-of” formula in effect until 2019, as NMPF and its members advocated. NMPF-USDEC Joint Economics team members explain USDA’s recommended decision here.

Members of NMPF’s FMMO task force have reconvened to write comments on the recommended decision, which will be handed in by the Sept. 13 comment deadline for all stakeholders. USDA will review submissions and issue a final decision in November, followed by a producer referendum likely near the end of the year. Any changes will be implemented in early 2025, ending the formal FMMO modernization process.

Even as FMMO consumed team energy, members of the economics team traveled the country in 2024, providing expertise on changing market conditions throughout the year and updates on the FMMO modernization process.

Stephen Cain, senior director of research and economic analysis for NMPF, and Dr. Peter Vitaliano, vice president for economic policy and market research for NMPF, presented updates on the federal order modernization efforts to the NMPF Young Cooperators in February, the Southeast Milk Inc., Leadership Experience (SMILE) in May, and to the NMPF Board of Directors periodically. In August, Cain travelled to Detroit to update Michigan Milk Producers Association on the next steps in the process.

Producers were also updated on current and changing market conditions through 2024. Will Loux, senior vice president of global economic affairs for NMPF and USDEC, presented a domestic and export market outlook to South Dakota Dairy Producers in January and Dairy Farmers of America in July, as well as an update on the state of the dairy industry to the Idaho Milk Processors Association in August.

The economics team also met with the boards of United Dairymen of Arizona, Agri-Mark, Land O’Lakes, and Michigan Milk Producers Association to provide an update on Cooperatives Working Together renewal and modernization efforts. Cain and Dr. Vitaliano also provided outlook presentations for the National Ice Cream Mix Association annual meeting in January and to the American Butter Institute in April. Dr. Vitaliano also gave a butter-specific presentation to the joint American Dairy Products Institute-American Butter Institute annual conference in April.

Amid this backdrop, the dairy economy itself showed signs of improvement. The Dairy Margin Coverage Program, the main federal safety net for U.S. milk producers, saw its fourth highest ever margin in July, at $12.23/cwt, with the all-milk price at $22.80/cwt. End of August dairy and grain futures indicated that the DMC margin would average around $12.25/cwt for all of calendar year 2024.

June DMC Margin Gains $1.14/cwt to $11.66/cwt

Posted on by Theresa Sweeney

The Dairy Margin Coverage Program margin in June was $11.66/cwt after adding $1.14/cwt over the previous month.

The June all-milk price was $22.80/cwt, up $0.80/cwt from May, and the DMC feed cost dropped by $0.34 for the month, mostly on a lower premium alfalfa price. The DMC margin calculated by USDA has risen $2.06/cwt over the past two months, reaching a level well above the threshold at which payments are generated by falling margins.

Futures-based forecasts at the end of July indicate that the DMC margin will average about $11.90/cwt during 2024, $0.40/cwt higher than similar forecasts indicated a month ago, with a peak in October, a sign that producers may have an opportunity to repair battered balance sheets over the next several months.