NMPF’s Senior Director Theresa Sweeney-Murphy tells Dairy Radio Now listeners about the recent visit to Washington by National Milk’s Young Cooperator representatives, who came to Capitol Hill this week to advocate for the dairy community on key issues like the farm bill and proper dairy foods labeling.
Tag: Farm Bill
House Farm Bill a Win for Dairy
The long-awaited Farm Bill debate has finally begun. As someone who has played a role in drafting one Farm Bill as a Senate Agriculture Committee staffer and stood on the sidelines here in Washington for five other Farm Bill debates, I’ve learned that the roads to success in passing farm bills through both houses of Congress can be long and challenging. Still, the path is always worthwhile: It’s critical to have a strong and stable farm policy that supports our industry and helps us overcome the challenges we face.
That’s why I am grateful to the House Agriculture Committee, under the leadership of Rep. Glenn “GT” Thompson, R-PA, for passing a 2024 Farm Bill that includes critical dairy priorities that will help us grow and thrive. As the first major step in the legislative process of approving a new law, it’s one that’s positive for dairy and should set a productive tone for developments moving forward.
The plan approved by the House Agriculture Committee on May 23 reflects much of the input we have received from our members. NMPF has worked closely with lawmakers from both parties to ensure the bill addresses the needs and concerns of dairy producers of all sizes, in all regions.
Some of the key provisions of the House Farm Bill that would benefit dairy are:
- Extending the Dairy Margin Coverage (DMC) program through 2029, with updated production histories and a 25% premium discount for locking five years of coverage. The DMC program, created at our urging in the 2018 Farm Bill, has been a lifeline for many dairy farmers who have faced low milk prices and high feed costs. By extending the program with this update, the House plan provides more certainty for dairy farmers who want to manage their risk and protect their income.
- Restoring the “higher of” Class I mover to reinstate orderly milk marketing, as well as requiring plant cost studies every two years to provide better data to inform future make allowance conversations. These are two key components of NMPF’s Federal Milk Marketing Order modernization proposal. The Class I mover is the formula that determines the minimum price that processors pay for fluid milk. After significant producer losses after a change to the formula in 2019, the House Farm Bill would restore the previous formula and ensure that dairy farmers receive a fair price for their milk. The House plan would also require the USDA to conduct regular studies on the costs of processing milk, which are used to inform the make allowances that affect the prices paid to dairy farmers. These studies would provide more transparency and accuracy in the pricing system and allow for adjustments based on changing market conditions.
- Supporting the bipartisan, House-passed Whole Milk for Healthy Kids Act to reverse the underconsumption of nutritious milk in our schools. The Whole Milk for Healthy Kids Act allows schools to offer 2% and whole milk as part of the school lunch and breakfast programs, giving students more choices and encouraging them to drink more milk.
- Boosting funds for critical dairy trade promotion programs and protecting the use of common food names worldwide. The bill would increase the funding for the Foreign Market Development program and the Market Access Program, which help U.S. dairy exporters develop and maintain overseas markets. The plan would also support the efforts of the U.S. government and the dairy industry to defend the use of common cheese names, such as parmesan and feta, against the European Union’s attempts to restrict them through geographical indications.
- Supporting voluntary, producer-led conservation programs, such as the Environmental Quality Incentives Program (EQIP) and improve the certification of Third-Party Service Providers with technical expertise related to conservation planning to better assist producers participating in National Resources Conservation Service (NRCS) programs. The committee-passed bill recognizes the environmental stewardship of dairy farmers and provides them with more resources and assistance to implement conservation practices on their farms. The House Farm Bill would also maintain the EQIP 50% livestock set-aside and allow states to offer larger payments for methane-reducing projects. Enhancing conservation programs and services available to dairy farmers helps them improve their environmental performance and sustainability, important components of meeting industry Net Zero goals.
- And also of note, given the H5N1 outbreak the industry currently faces, the bill also would increase funding for animal health programs, such as the National Animal Health Laboratory Network and the National Animal Disease Preparedness and Response Program, that help protect the health and welfare of dairy cows and other livestock from diseases and pests.
These are just some of the highlights of the House Farm Bill that demonstrate its strong support for the U.S. dairy industry. I commend Chairman Thompson and committee members from both parties for their hard work and bipartisan cooperation in crafting and approving this legislation. I also need to call out the efforts of NMPF staff who, working with our member cooperatives, tirelessly worked to shape legislation that, if adopted, would greatly benefit our industry.
So now we’ve made the opening lap around the field with the House Agriculture Committee’s approval of its bill. But keep in mind the current farm law itself is the result of a one-year extension of the previous bill, and uncertainty abounds given the political calendar this year. I urge the full House and the Senate to follow their lead and get down to work crafting and passing a new Farm Bill as soon as possible.
We know that dairy is well-served by what the House Agriculture Committee has approved. Let’s all take that as positive momentum moving forward.
Gregg Doud
President & CEO, NMPF
NMPF Statement on House and Senate Farm Bill Frameworks
From NMPF President & CEO Gregg Doud:
“Dairy farmers are heartened that today, both House Agriculture Committee Chairman Glenn ‘GT’ Thompson, R-PA, and Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, each released documents providing an overview of their farm bill priorities and plans. Dairy farmers and the cooperatives they own are better-served by the certainty provided under a five-year farm bill, and as both chairs point the way toward important dairy priorities across multiple farm bill titles, all of dairy is eager to see this process get moving.
“We look forward to the House Agriculture Committee’s markup of its bill on May 23. We’re ready, and excited, to work with both chairs and their ranking members to complete work on a farm bill this year.”
NMPF’s Galen Highlights Key 2023 Policy Achievements for Dairy Community As Christmas Approaches
NMPF’s Chris Galen offers a Christmas-themed list of for listeners of Dairy Radio Now on several major achievements for dairy farmers: updating the milk pricing system, improving the Farm Bill, and expanding milk options in schools. He describes how NMPF successfully created momentum in the House of Representatives for a bill that would expand students’ milk options in schools.
NMPF’s Galen on Farm Bill Progress
NMPF Senior Vice President Chris Galen discusses the state of play in the upcoming farm bill on Dairy Radio Now. Current spending debates are slowing progress on the five-year reauthorization of USDA programs, which include nutrition assistance and commodity payments. The current law expires Sept. 30 — because many commodity programs, including dairy, run on a calendar-year basis, any threat of near-term disruption is limited, Galen said.
DMC Margin Rises in March
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.
Milk-Production Increase Outstripping Supply Gains, NMPF’s Vitaliano Says
Milk production is increasing faster than demand is recovering, making 2021 a challenging year for dairy farmers, said Peter Vitaliano, NMPF’s chief economist, in an NMPF podcast released today.
“On balance, things are improving a little bit” in dairy demand, “but they’re still falling short of the milk production rate of increase,” Vitaliano said. Still, bright spots remain for the medium- and longer-term dairy outlook. Demand for U.S. dairy exports is at record levels, and demand for dairy away from home should increase as the COVID-19 pandemic fades, he said.
The full podcast is here. You can also find this and other NMPF podcasts on Apple Podcasts, Spotify, SoundCloud and iHeart Radio. Broadcast outlets may use the MP3 file. Please attribute information to NMPF.
2021 Promises Better Days Ahead, Thanks to the Successes of 2020
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.
November DMC Margin Above Assistance Threshold; 2021 Payments Expected
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
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.
