Tag: Farm Bill

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.