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.
Tag: milk prices
NMPF Statement on USDA’s Recommended FMMO Modernization Plan
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.”
Fluid Milk Sales and Cheese Exports Surge Amid Production Decline
NMPF Young Cooperators Take Dairy’s Message to Capitol Hill
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.
Cheese Exports Boost U.S. Dairy Market
Small Changes in Costs, Prices Move March DMC Margin Above $9.50 Trigger
The DMC margin rose by $0.21/cwt from February to March to $9.65/cwt, putting it just above the maximum $9.50/cwt maximum Tier 1 coverage level. The March All-Milk price rose by $0.10/cwt to $20.70/cwt, and the March DMC feed cost calculation dropped by $0.11/cwt, almost entirely on a $7.00/ton lower premium alfalfa hay price.
The DMC Decision Tool on the USDA/FSA website forecasts that the DMC margin will remain above $9.50/cwt for the rest of 2024. The enrollment period for the 2024 Dairy Margin Program ended on Tuesday. For those who are signed up for 2024 coverage, payments will be made for January’s and February’s triggered payments, depending on coverage level.
U.S. Dairy Exports Rebound as Milk Production Slowly Slips
USDA Decision Time Nears for FMMOs
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 Paul Bleiberg Outlines USDA Decision On WIC Dairy Purchases
NMPF’s Executive Vice President Paul Bleiberg gives Dairy Radio Now the background on this week’s decision by USDA to adjust spending for WIC program recipients, and how that will impact dairy purchases, including milk, as the changes are implemented.
February DMC Margin Gains Nearly $1/cwt Over January
The February margin under the Dairy Margin Coverage (DMC) program rose by $0.96/cwt from a month earlier to $9.44/cwt, triggering a payment of $0.06/cwt for coverage at the $9.50/cwt maximum Tier 1 level.
The rise was due to a $0.50/cwt increase in the February U.S. average all-milk price to $20.60/cwt, and a $0.46/cwt drop in the DMC feed cost formula, mostly as a result of lower corn prices.
Futures-based forecasts at the end of March indicated that DMC margins would remain mostly above the $9.50/cwt maximum Tier 1 coverage level during the remainder of the current calendar year, with possible brief dips below this level in late spring.
Key Dairy Statistics Reveal Continued Production Decline
NMPF’s Bleiberg discusses new congressional report on need for farm labor
NMPF’s Executive Vice President Paul Bleiberg joins Dairy Radio Now this week to assess the impact of a new report from the House Agriculture Committee on the need that dairy farms and other ag employers have for farm workers, and what the prospects are for the push to expand the H2A visa program to dairy employers.