NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks with RFD-TV about the need to change the Class I mover in a way that ends losses to dairy farmers that have totaled $1.2 billion since 2019. The mover is in the spotlight with the conclusion of USDA’s Federal Milk Marketing Order hearing in Carmel, IN.
By Alan Bjerga, Executive Vice President, Communications & Industry Relations, NMPF
This is shaping up to be an exciting year for both whole and lactose-free milk, two growing segments of fluid milk consumption that are poised for further gains in grocery aisles as well as Washington, D.C. policy circles.
First, the facts: Even as fluid milk continues its decades-long challenge of eroded consumption as beverage markets diversify and consumer preference shifts to other forms of dairy, both whole milk and lactose-free varieties are bucking that trend. According to data from Circana Inc., which tracks retail sales, whole milk sales rose slightly (up 8 million gallons, or 0.6%) in 2023 over 2022. Because overall fluid sales declined, whole milk now makes up 45.4% of total fluid volume sold and is easily the most popular variety.
Lactose-free milk, meanwhile, reached a milestone. By climbing 6.7% to 239.2 million gallons last year, it surpassed the sales volume of almond beverages, by far the most popular plant-based milk alternative beverage. Almond’s annual decline of 9.8% is a big part of an overall consumer move away from plant-based alternatives, which have now seen two straight years of sales volume drops. Buyers are emphatically rejecting years of misleading claims that these beverages are a worthy substitute to dairy.
What’s next?
The National Milk Producers Federation is pushing for full congressional passage of the Whole Milk for Healthy Kids Act, which overwhelmingly passed the House in December and stands good prospects of passage in the Senate — if the right legislative vehicle can be found in a jam-packed election year. Bringing whole and 2% milk back to school meal menus is a great way to improve the nutrition of the next generation of milk drinkers. We have a call to action on our website urging senators to take up the bill.
Lactose-free milk is becoming the industry’s spearhead in ensuring equitable access to milk across diverse populations in federal nutrition programs. It is simply asinine federal policy to do what some vegan activists are proposing — increase access in federal programs to plant-based beverages that are both nutritionally inferior and now falling out of favor with consumers — when a beverage exists that circumvents lactose intolerance and offers all of milk’s benefits because it is, after all, milk. You will be hearing more about this in upcoming months as we strive to make 2024 a year when people become more broadly aware of just how critical lactose-free milk can be for effective and fair nutritional choices.
In what’s been a challenging time for the industry, what can the success of whole and lactose-free milk tell us? It shows that, for all the proliferation of alternatives, consumers like milk that’s most like milk, in taste and composition. They also like milk that’s accessible for everyone who wants its benefits. Quality and diversity are promising building blocks for a prosperous future. That’s plentiful in dairy, and this year, what consumers are choosing also can inform better federal policy.
This column originally appeared in Hoard’s Dairyman Intel on Jan. 18, 2024.
The November margin under the Dairy Margin Coverage (DMC) program inched up $0.14/cwt from a month earlier to $9.58/cwt, marking its first time in 2023 above the maximum $9.50/cwt Tier 1 coverage level.
The monthly change was a product of modest price movements. The all-milk price rose $0.10/cwt to $21.70/cwt, while the DMC feed cost formula dropped $0.04/cwt to $12.12/cwt of milk. There was a bit more drama inside the DMC feed cost formula, with a $0.35/cwt increase in the soybean meal price factor slightly more than offset by a combined drop in the prices of corn and premium alfalfa hay. During the first ten months of this year, the average monthly change, plus or minus, in the margin was $1.22/cwt, the average monthly change in the all-milk price was $1.15/cwt and the average monthly change in the DMC feed cost was $0.37/cwt.
With one more month in to be reported for last year, the 2023 average margin is on track to average about $6.80/cwt, which would be the second-lowest margin for the DMC and its predecessor Margin Protection Program (MPP), just above 2021’s average DMC margin of $6.70/cwt. The end-of year futures prices indicated the margins would average about $8.60/cwt during January-September this year but improve during the fourth quarter to average about $9.10/cwt for the year.
NMPF’s Chris Galen provides the latest developments for the listeners of Dairy Radio Now on two key priorities for farmers: updating the milk pricing system, and expanding milk options in schools. The USDA’s national hearing on Federal Order modernization continued its review of Class I differentials this week in Indiana, while back in Washington, NMPF is building support for an anticipated vote next week in the House of Representatives on a bill that would expand students’ milk options in schools.
The future of U.S. dairy farming is bright as global growth and American capacity for innovation and production combine to create a powerhouse, NMPF incoming president and CEO Gregg Doud and the organization’s economists said in presentations at NMPF’s annual meeting.
“In terms of the world of protein, dairy is a huge part of the future,” said Gregg Doud, who will take over NMPF’s reins on Jan. 1. Doud, a former chief agricultural trade negotiator for the Office of the U.S. Trade Representative, said opportunities are there for U.S. dairy’s taking with robust outreach and appeals to consumers worldwide.
“My message to you today is very simple,” he said. “Let’s go. Let’s get it in gear.”
Dairy producers in the past year have faced operating margins at their lowest since the federal dairy safety net was adopted in its current structure in 2014 as prices plummeted from record highs. In a panel of NMPF economists following Doud’s remarks, forecasts showed an improving price outlook next year, even as inflation continues to pose challenges for consumers.
“We see a road to recovery in 2024,” said Will Loux, head of the joint economics unit serving NMPF and the U.S. Dairy Export Council. “Things aren’t all roses, we still have really significant headwinds on the demand side both here at home and abroad, but we look at the world with a lot of optimism still, especially in the long run.”
NMPF Executive Vice President Alan Bjerga speaks with RFD-TV about how all of agriculture needs to fight for the integrity of trade agreements in the wake of a USMCA dispute panel decision that failed to protect U.S. access to Canada’s market. The President’s Export Council, with member co-op Land O’Lakes representing farmers, discussed the importance of market access in a White House meeting on Wednesday. Bjerga also talked about the resumption of the USDA Federal Milk Marketing Order hearing in Indiana this week, and how repeated delays aren’t helpful for milk producers.
NMPF Board of Directors Chairman Randy Mooney of Dairy Farmers of America explains the organization’s role as the essential advocate for dairy farmers in Washington and how the organization works with other groups to advance industry prosperity in an interview with RFD-TV. Mooney also talks about what challenges the industry faces and how resilience is the key to future success. The segment also highlights Prairie Farms’ overall win in this year’s NMPF cheese contest.
By Randy Mooney, Chairman, NMPF Board of Directors
We’ve had a lot of achievements this year, but it’s also been a challenging time.
A year ago, costs on the farm were extremely high, but we had prices that would cover that. This year, costs are still high, but prices are down. That’s a lot of stress on the farm. And we’re also dealing with problems that we’ve dealt with for years.
There are labor problems; you just can’t find anybody to work. Supply chain disruptions are closer to the farm this year. It’s milk trucks getting milk off the farm; it’s feed trucks bringing feed into the farm. It’s getting simple parts that we took for granted we could get anytime we wanted to. There are geopolitical issues and extreme weather events.
We have challenges all the time, but it just seems like we continue to have more. It seems like we’re in the eye of a storm. But as farmers, we always anticipate a moment before the dawn, before things turn, before things get good again.
One of the things I’ve learned is that a lot of the world is envious of what we have.
They’re envious because we have the Farmers Assuring Responsible Management (FARM) Program, a self-governing program. We have a government that recognizes what we’re doing with sustainability — it’s not being mandated down from the top.
We’re taking care of our own. Today, we produce more milk using fewer and fewer natural resources. We’re revitalizing rural communities. For every dollar generated in dairy farming, it turns over three to seven times in local communities, generating $750 billion in the United States. That‘s pretty impressive.
We’re nourishing families around the world through milk’s unbeatable nutritional value. I’ve dairy farmed for a long time, through good times and bad times, but there’s never been a time that I haven’t laid my head down on my pillow at night and been proud of what I accomplished on my farm. We’re putting the most nourishing, most nutritious product known to man in that milk tank. And when that truck leaves, I know I’ve done something good.
Our ability to evolve how we work and adapt our resiliency is becoming more and more important. This year, we came together as an industry to unite around issues that helped build that resiliency. NMPF worked with member co-ops, farm bureaus, and state dairy organizations to come to consensus on the most substantial issues. Even going back to 2021, when you talk about Federal Milk Marketing Order modernization, we’ve worked hard to get these things done. Nobody knows what the outcome’s going to be, but you telling your story has made a difference.
Beyond that, we’re going to get a farm bill passed — we’re going have an extension. We’ve been working to implement the next version of FARM, FARM 5.0, that goes into effect in July. We also will work on promoting dairy’s sustainable nutrition. Dairy offers the most complete nutritional package available, and what’s amazing is that as we produce more milk, we’ll continue to use fewer natural resources. That’s the definition of sustainable nutrition.
For years, we’ve talked about sustainability in terms of environmental stewardship and how that translates into financial value for farms. Now, the financial values are there. You take solar panels, wind, methane digesters, and a lot of things happen on a farm that’s generating electricity to run your farms and to run your neighbor’s households. We’re there now. What we need is conservation funding in the farm bill through USDA grants through state and federal programs. There’s real money available to help us continue to do that, and we will.
No imitation food from a nut, a bean, or grain can hold a candle to dairy’s nutritional package. We all know that. That’s why it’s important to keep fighting the fight on plant-based alternative labeling. In the guidance that was issued earlier this year, the Food and Drug Administration (FDA) recognized and admitted that plant-based alternatives are nutritionally inferior to real dairy.
Dairy protein plays a critical role in feeding people around the world, and it can’t be replaced by alternatives, including plant-based. Consumers have the right to understand how they’re nourishing their families, and we’re going to continue to advocate for the Dairy PRIDE Act to try to get that passed in Congress.
We’re going to continue to fight for more flavored milk in schools and higher fat levels, especially for those children whose main source of nutrition is through the school milk program. Milk is essential to their diets, and we’re not going to give up that fight. We’re all part of an industry that’s doing remarkable things. We are winning.
This has been adapted from Chairman of the NMPF Board of Directors Randy Mooney’s speech at the National Milk Producers Federation annual meeting in Orlando, Fla., on Nov. 14, 2023. This column originally appeared in Hoard’s Dairyman Intel on Nov. 22, 2023.
NMPF Executive Vice President of Communications & Industry Relations Alan Bjerga speaks on WEKZ Radio, Janesville, WI, about the resumption of USDA’s Federal Milk Marketing Order hearing in Carmel, IN, next week. The hearing, which was originally expected to last until mid-October, may now slip into 2024. Scheduling issues and unexpected confrontations are pushing back the timeline for the necessary modernization many farmers are hoping can take effect to help their operations thrive, Bjerga said.
Incoming NMPF President & CEO Gregg Doud explains NMPF’s role in Washington policy formulation and dairy farmer priorities, including a new farm bill, Federal Milk Marketing Order modernization, integrity in plant-based labeling and dietary guidelines that maximize the benefits of dairy, in an interview with RFD-TV. He also emphasized the importance of international trade and global issues to U.S. dairy’s future. “We need to look five, 10 years ahead and see what this industry needs,” he said.
