Tag: FMMO modernization

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.

How the World Dairy Expo Shows NMPF’s Breadth

Posted on by Alan Bjerga

Alan Bjerga, NMPF Executive Vice President of Communications, discusses how NMPF’s strong presence at the World Dairy Expo shows the breadth of the organization’s service to its members in an interview with WEKZ, Janesville, WI. NMPF-affiliated offerings include a panel on Federal Milk Marketing Order modernization, a seminar on succession planning, a look at women’s leadership in dairy and H5N1 biosecurity management on dairy farms. The National Dairy FARM Program will also be out in full force, Bjerga noted.

Much Good, Some Surprises in FMMO Plan, NMPF’s Cain Says

Posted on by Alan Bjerga

Stephen Cain, senior director of economic research and analysis for the National Milk Producers Federation, said NMPF is “very pleased with the recommendation that USDA has come up with” for Federal Milk Marketing Order Modernization. “Fundamentally, USDA agreed with our premise and methodology for all the changes we were asking for,” said Cain in an interview with the National Association of Farm Broadcasters.

 

Economists Find Much to Like in USDA Pricing Plan

Posted on by Theresa Sweeney

USDA’s plan for modernizing the Federal Milk Marketing Order system aligns well with the principles outlined in NMPF’s own proposals, NMPF economists Peter Vitaliano and Stephen Cain said in a Dairy Defined Podcast released today. Still, analysis is ongoing, and NMPF will be suggesting improvements during a public comment period that lasts through mid-September.

“It’s important that we have a national system that helps level the playing field across the country,” said Cain, NMPF’s senior director for economic research and analysis. “We do not want regulation to create winners and losers or incentivize actions that distort the marketplace or market dynamics in any way.

More on NMPF’s federal order efforts can be found on nmpf.org. You can find and subscribe to the Dairy Defined podcast on Apple Podcasts and Spotify under the podcast name “Dairy Defined.”

Media outlets may use clips from the podcast on the condition of attribution to the National Milk Producers Federation.

Dairy Farmers See Advances in USDA’s FMMO Plan, NMPF’s Bjerga Says

Posted on by Alan Bjerga

Dairy farmers have reasons to be pleased with the draft proposal for Federal Milk Marketing Order modernization, NMPF Executive Vice President Alan Bjerga said in an interview with Dairy Radio Now. That said, the process isn’t complete. Farmers still have a 60-day comment period and a final producer vote before any final proposal is implemented. NMPF is ready to lead, as it has throughout, Bjerga said.

Co-op Leadership Brings FMMO Modernization Success

Posted on by Theresa Sweeney

Well done, co-ops. Your leadership is shaping a better future for dairy.

On Monday, an effort that took more than three years, more than 200 meetings, 49 days of a record-long Federal Order hearing, and countless hours of analysis and discussion were reflected in a recommended USDA plan for Federal Milk Marketing Order modernization that incorporates much of the comprehensive approach to improvements we advocated throughout.

Yes, not every detail is exactly as we would have had it – we always knew that would be the case. And USDA’s plan isn’t set in stone – we take very seriously the comment period we will soon be in and plan a detailed response to this proposal. Our FMMO task force is meeting to discuss the plan next week; even as we speak, our staff and cooperative experts are putting pen to paper to better understand how various parts of the USDA plan will interact to affect dairy farmers and the cooperatives they own, as well as the broader industry.

That’s all to say our work is far from over. But Monday’s decision was arguably the critical milestone in this process. And this industry – led by the member-owners of the nation’s leading dairy cooperatives – has many reasons to be heartened by the improvements USDA has proposed to the nation’s Federal Milk Marketing Order system.

A few notes on what USDA offered, and how it compares to what we’ve advocated.

  • On the “higher of” Class I mover. Noting that dairy farmers have lost roughly $1.3 billion in revenue since the mover was changed in 2019, we fought for a return to the higher-of in the name of fairness and real-time market signals. Processors proposed a different formula, citing its importance to risk management, especially for extended shelf-life milk. Recognizing the need to restore orderly milk marketing, USDA decided to go back to the higher-of, with an accommodation for extended shelf-life milk, thus granting NMPF’s request for the vast majority of U.S. fluid milk. USDA’s solution is, frankly, as innovative as it is fair – a classic case of two sides not getting all that everyone wanted, but everyone getting what they most needed.
  • On make allowances. USDA’s numbers for an adjustment were higher than what NMPF proposed, though not greatly out of line with our analysis. And USDA denied the processors’ request to automatically increase the numbers over the next three years, which NMPF opposed. Agreement was nearly universal that make allowances, which hadn’t been revised since 2000, needed to change. The next step now will be seeking better plant-cost data through mandatory surveys via legislation, a step that’s been included in every significant congressional farm bill plan that’s been proposed.
  • On increasing the Class price skim milk component factors. Again, USDA’s plan takes a direction similar to NMPF’s, though it doesn’t include the automatic update provision we proposed.
  • On the Class I differentials. In many cases, USDA’s county-level calculations matched our own. In many others, the calculations deviated minimally. And in a few others, the differences were significant. Meanwhile, USDA denied a processor proposal to zero out the base differential, which would have significantly reduced every differential in the country and set the Class I differentials to zero at some locations in the West. We will be examining USDA’s methodology to better understand its calculations, reflecting the best data and our members’ input.
  • On removing barrel cheese from the protein price formula. USDA accepted NMPF’s proposal without modification.

As has always been the case, member leadership is what has made this process work for dairy. The conversation is continuing, and the comprehensive, consensus-driven approach that has been our hallmark will also continue.

Once Monday’s proposal is officially published in the Federal Register, we and other stakeholders will have 60 days to submit comments to USDA. A final producer vote is projected for early 2025. Again, thank you to all the cooperative leadership for what has been accomplished so far, and for the good work for dairy that will continue. And with that, happy Independence Day. We’ll be back next week for the second half of an already successful year.

Gregg Doud

President & CEO, NMPF

 

NMPF Statement on USDA’s Recommended FMMO Modernization Plan

Posted on by Rachel Ravencraft

From NMPF President & CEO Gregg Doud:

“Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan.  

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years. We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”  

 

NMPF’s Bjerga on H5N1, Farm Bill

Posted on by Alan Bjerga

NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks on RFD-TV about dairy farmer challenges and their broader relationship with agriculture, ranging from H5N1 in dairy cattle to discussions of the 2024 Farm Bill in Washington. Success across all fronts will require communication and collaboration across agricultural sectors, he said. Meanwhile, NMPF is optimistic regarding the future of milk pricing, with a USDA plan on Federal Milk Marketing Order modernization expected within the next few weeks.

https://www.rfdtv.com/from-farm-bill-to-hpai-what-is-dairy-farmer-sentiment-looking-like

 

Fairness to Farmers Makes Dairy Work

Posted on by Theresa Sweeney

Happy National Dairy Month!

It’s hard to have National Dairy Month without dairy, and it’s hard to have dairy without dairy farmers – and that’s why it’s important to treat them well.

But what hasn’t worked out well for milk producers since 2019 is the current formula for the Class I mover – the formula that helps set the price of fluid milk under Federal Milk Marketing Orders — was changed in the 2018 Farm Bill. Under current rules, which were adjusted so that milk processors could better manage pricing risk, dairy producers have lost an estimated $1.2 billion compared to the previous formula.

The losses are occurring because farmers now bear a disproportionate part of the burden when prices turn volatile. That wasn’t foreseen when the change to the formula went into effect. It wasn’t the intention of what was meant to be a revenue-neutral adjustment, and it isn’t fair. And fairness to farmers is what makes dairy work.

Fortunately, momentum for relief is building. NMPF’s proposal before the USDA’s Federal Milk Marketing Order hearing restores the old formula, and the farm bill that passed the House Agriculture Committee also brings it back. That’s more than just relief for farmers – it’s the right thing to do. And it would be a great thing to raise a glass to this Dairy Month.

USDA Decision Time Nears for FMMOs

Posted on by Alan Bjerga

By Peter Vitaliano, Vice President, Economic Policy & Market Research, NMPF

The April 1 deadline for interested parties to submit post-hearing briefs summing up their arguments for changes to the Federal Milk Marketing Orders (FMMO) has passed. Now that participants in USDA’s record-length FMMO hearing having had their final say, it’s time for USDA to review the complete hearing record and formulate its recommended decision, which should be reported around July 1.

The National Milk Producers Federation offered by far the most comprehensive and constructive set of proposals for effecting long-overdue updates to the federal order pricing formulas. Our brief reemphasized that updating formulas to reflect the dynamically changing structure of the U.S. dairy industry is critically important for the order program to achieve its basic purposes of ensuring an adequate supply of milk for fluid milk use, promoting orderly marketing, and providing adequate prices to dairy farmers for doing so. NMPF’s five specific proposals put farmers first, in keeping with the FMMO mission. They also have very broad support from groups and individuals representing dairy farmer interests.

By contrast, the major hearing participants representing processors opposed most of the hearing’s 21 proposals, including NMPF’s proposals to raise the Class III and Class IV skim milk component composition factors, remove barrel cheese from the protein component price formula, and update the Class I differentials to reflect current costs of supplying milk for fluid processing. Advocacy by proprietaries focused primarily on just two issues: the particularly high profile matters of the make allowances and the Class I mover.

While all parties to the hearing broadly agreed that the make allowances in the orders’ component pricing formulas need to be updated in stages — due largely to how much current costs likely exceed the current make allowances — hearing participants significantly disagreed on specifically how to do so. NMPF and its member cooperatives argued that USDA needs to have the authority and the directive to conduct regular mandatory, audited studies of manufacturing costs and yield factors so the industry, and dairy farmers in particular, can have confidence that the numbers are truly accurate — certainly more accurate than the voluntary cost studies that have more holes than Swiss cheese. All parties support mandatory studies, which almost certainly will be included in the upcoming farm bill. But proprietary manufacturer interests have requested that substantial increases, based only on voluntary studies, be fully implemented with a relatively short phase-in period, a move that would significantly harm dairy farmer incomes.

NMPF and other parties representing dairy farmer interests also universally support returning to the “higher of” Class I mover, a position equally strongly opposed by proprietary processor interests. No one supports the current “average of” mover, with its 74-cent per hundredweight fixed factor, but proprietary interests lined up behind keeping the average of mechanism with an adjustable factor that would mimic, with considerable lags, the higher of mover. This approach, done in the name of improving risk management, unfortunately mutes the immediate market signals the higher of approach sends. It also offers cold comfort to dairies that might go out of business because of a lower mover and don’t have the lag time to wait for a make-up adjustment later.

A low point in the hearing from the standpoint of farmer interests was reached when a group of proprietary fluid processors pushed back against NMPF’s carefully worked out proposal to increase the Class I differentials by proposing instead to eliminate the fixed portion of the current ones, which would effectively erase any difference between Class I and the manufacturing class prices in many orders and render them unworkable. It garnered no support from any other party.

But for all the controversy seen thus far, soon it will all be superseded by USDA’s plan. NMPF remains hopeful that careful thinking and attention to the purpose and mission of federal orders carries the day. We’re confident in a positive outcome.

This column originally appeared in Hoard’s Dairyman Intel on April 15, 2024.

NMPF’s Doud Discusses HPAI, FMMO Modernization

Posted on by Alan Bjerga

NMPF President & CEO Gregg Doud discusses dairy’s response to Highly Pathogenic Avian Influenza (HPAI), the path forward for Federal Milk Marketing Order Modernization through an approach that puts farmers first, and opportunities for dairy in global markets. Doud spoke in an interview with the Agriculture of America podcast.

 

Economists Confident in NMPF Milk-Pricing Plan

Posted on by Theresa Sweeney

The briefs are in, and now it’s up to USDA to consider the arguments and craft a proposed modernization for Federal Milk Marketing Orders, which govern milk pricing. NMPF economists Peter Vitaliano and Stephen Cain said they’re confident in the strength of NMPF’s proposals in a Dairy Defined Podcast released today.

“If you were to read through our brief, I think you’d be struck by the fact that it is an integrated, well-reasoned, constructive proposal for doing some long overdue maintenance on the federal order program to position it for many more years of effective operation,” said Vitaliano, vice president for economic policy and market research at NMPF. “We’re very confident that when we see what USDA comes up with in a recommended decision in early July, we’re very confident that we’ve made a good enough case, that a lot of it will be adopted.”

More on NMPF’s federal order efforts can be found on nmpf.org. The Dairy Defined podcast, you can find and subscribe to the podcast on Apple Podcasts and Spotify under the podcast name “Dairy Defined.”