Tag: USDA dairy

DMC Margin Drops More than $1 in May to Record Low

Posted on by Theresa Sweeney

The May Dairy Margin Coverage (DMC) margin dropped by $1.01/cwt from April to $4.83/cwt, the lowest it’s ever been and the first time below $5/cwt during the life of the current program or that of its predecessor, the Margin Protection Program (MPP), triggering payment at both the Tier I and Tier II levels.

The May all-milk price dropped by $1.40/cwt from a month earlier to $19.30/cwt, while the DMC feed cost eased lower by $0.39/cwt in that time, on lower corn and soybean meal prices. The May payment for the maximum Tier 1 coverage at the $9.50/cwt level will be $4.67/cwt. The May payment for the low-cost Tier 2 coverage at the $5.00/cwt level will be $0.17/cwt.

Available forecasts anticipate the margin dipping down closer to $4/cwt during early summer, with a bottom in July, and not rebounding above $9.50/cwt until early in 2024.

NMPF Communicates Dairy Priorities to New Ag Trade Representatives, Congratulates Hill Leaders

Posted on by Theresa Sweeney

NMPF and USDEC sent a letter on Jan. 23 to the U.S. Trade Representative’s Chief Agricultural Negotiator Doug McKalip and USDA Under Secretary of Trade and Foreign Agricultural Affairs Alexis Taylor congratulating them on their confirmations and detailing the market access and trade priorities that NMPF is looking to advance in 2023 and beyond.

After many months of delay, Congress finally confirmed McKalip and Taylor at the end of 2022. NMPF and USDEC strongly supported both McKalip and Taylor’s nominations and called on Congress to quickly confirm both nominees throughout the delay. NMPF looks forward to working with Taylor and McKalip to expand market access and push for other dairy priorities.

NMPF and USDEC also sent letters congratulating the new leadership of the House committees responsible for agricultural export promotion efforts and trade policy. The letters to Agriculture Committee Chairman Glenn “GT” Thompson (R-PA) and Ranking Member David Scott (D-GA), and Ways and Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA) relayed NMPF and USDEC’s dairy trade priorities, including increased funding for the Foreign Market Development and Market Access Programs, stronger protections for common names like “parmesan” and “feta,” and a more ambitious approach to tacking barriers to U.S. dairy exports.

NMPF will work closely with both committees to heighten the Congressional focus on agricultural trade issues in the coming year.

November DMC Margin Rises, Generates Smallest Payment Since 2020

Posted on by Theresa Sweeney

The November margin under the Dairy Margin Coverage program was $9.14/cwt, up $0.60/cwt. from October, as higher milk prices more than offset gains in feed costs. The new calculation will generate a payment of $0.36/cwt. for $9.50/cwt. coverage, which will be the smallest since September 2020.

The all-milk price component of the November margin was $20.80/cwt., $1.10/cwt. higher than a month earlier. The November DMC feed cost was also higher for the month, by $0.50/cwt., with nearly equal contributions from higher corn and soybean meal prices. The November premium alfalfa hay price was down slightly from a month earlier after rising steadily almost every month since September 2020.

The end-of-year dairy futures indicate a possible small payment to $9.50/cwt. coverage for December, but the current strong milk price outlook makes this questionable for future months, given the current market outlook.

Signup for the 2022 DMC program is underway and will close on Feb. 18. This year’s program has paid out $1.2 billion as of January 3, and NMPF is urging dairy farmers who haven’t yet joined the program to do so. NMPF has a page of resources for members who may have questions here.

August DMC Margin Lowest Ever

Posted on by Theresa Sweeney

The August margin USDA announced for the Dairy Margin Coverage program, $5.25/cwt., fell to its lowest-ever since margin protection became the main federal dairy safety net in 2014, slipping below the previous low of $5.37/cwt. margin from May 2020. A $0.20/cwt. drop in the U.S. average all-milk price from a month earlier, to $17.70/cwt., and a $0.24/cwt. rise in feed costs, mostly due to a higher corn price, produced the August margin.

USDA has still not begun to announce the revised margins using 100 percent dairy quality alfalfa, a change to the program’s feed-cost calculation made in August at NMPF’s urging. Incorporating the change, which will be retroactive to 2020, would set the August margin at $5.03/cwt.

USDA reported that, as of Sept. 27, the 19,009 operations enrolled in this year’s DMC program are expected to receive $817,171,664 in payments, based on previously announced margins.  Margins for the remaining five months in 2021, including August, are not included in this total.  Dairy futures continue to indicate further DMC payments for $9.50/cwt coverage for every month remaining this year.

NMPF Lauds Establishment of Dairy Donation Program to Fight Food Insecurity

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) today commended USDA for finalizing rules implementing the new Dairy Donation Program enacted by Congress last year. The program will help expand partnerships between dairy organizations and food banks to provide a wide range of dairy products to food-insecure households.

“We thank USDA leadership for their work to bring the Dairy Donation Program to fruition. This important program will help dairy farmers and the cooperatives they own to do what they do best: feed families nationwide,” said Jim Mulhern, president and CEO of NMPF. “Dairy stakeholders are eager to enhance their partnerships with food banks and other distributors to provide dairy products to those experiencing food insecurity, which the COVID-19 pandemic has only exacerbated.”

NMPF championed the proposal throughout the legislative process and worked closely with Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), who led the effort to include this new program in COVID-19-related legislation enacted last year. The new Dairy Donation Program expands the original Milk Donation Reimbursement Program and has one-time funding of $400 million to reimburse farmers, cooperatives, and other dairy organizations for the full cost of raw milk needed to make finished dairy products for consumers.

NMPF worked closely with USDA to ensure that the program addresses additional costs, such as processing and transportation, as well as other elements that make the program more viable. The provision covering the cost of processing is a significant enhancement from the previous program. NMPF also worked closely with Feeding America to support the program and recommend approaches to ensure its effectiveness.

“We are grateful to USDA for helping ensure wholesome dairy products can be provided to food banks and other food distributors by reimbursing for some of these costs,” said Mulhern. “We have also been pleased to work with Feeding America to advance the partnership approach taken by this program as it will help to target dairy donations in a manner that effectively meets on-the-ground demand.”

“Feeding America applauds today’s announcement implementing the Dairy Donation Program, which has the potential to connect millions of additional pounds of dairy donations through food banks to the people we serve. We look forward to working with USDA and our dairy partners to make this program a success now and in the future,” said Vince Hall, Interim Chief Government Relations Officer at Feeding America.

Mulhern said NMPF appreciates Chairwoman Stabenow’s leadership in securing the program’s enactment last year, as well as the support for dairy donation offered by other key members, including Senate Appropriations Committee Chairman Patrick Leahy (D-VT) and House Agriculture Committee Ranking Member Glenn ‘GT’ Thompson (R-PA).

“We commend Chairwoman Stabenow for her leadership in authoring this program and look forward to working with Congress to secure additional funding for this program in the future to continue to minimize food waste by providing nutritious dairy products to those who need them most,” Mulhern said.

Dairy ‘Cliffhangers’ Need Resolution

Posted on by Theresa Sweeney

Cliffhangers are great in movies, but they’re frustrating in public policy. Congress is entering its traditional August recess with a big not-yet-done list on topics ranging from infrastructure to immigration. For the sake of dairy farmers, we’d like to see faster movement.

But hope and hard work are dairy strengths, and we at NMPF continue our efforts to make sure that at least some of these cliffhangers resolve quickly and positively. Each gain, big and small, improves livelihoods. Here are a few cliffhangers awaiting resolution as lawmakers leave Washington and head to their districts to reconnect at county fairs and town halls. (Feel free to tell them NMPF says hello.)

  • USDA’s Dairy Donation Program. This initiative provides compensation for dairy-product donations, with support retroactive to last Dec. 27. The $400 million program, part of a COVID relief package Congress approved that month, is largely ready to go, thanks to USDA’s diligence, but it’s awaiting signoff from the White House Office of Management and Budget. Final details are expected to be worked out soon, encouraging dairy community efforts to aid needy families through food banks and other distributors.
  • Direct Producer Support. USDA has indicated plans to offer details within the next few weeks on other COVID-related initiatives to provide direct relief to dairy producers. In response to NMPF entreaties, USDA is seeking to reimburse dairy producers for uncompensated losses they’ve suffered when traditional milk price relationships were turned upside down last year. Meanwhile, the Supplemental DMC program would allow producers whose annual production was below 5 million pounds in 2014, but has modestly increased, to receive corresponding payments. This not only aids small producers; it increases the amount of money available to dairy in the next farm bill. Finally, we’re seeking to correct a flaw in last year’s Coronavirus Food Assistance Program to help producers who experienced serious losses due to the pandemic but saw their assistance hindered by CFAP payment caps. NMPF has spearheaded efforts to remedy this imbalance with USDA.
  • Programs that advance dairy’s Net Zero Initiative goals. As NMPF’s Senior Vice President for Government Affairs, Paul Bleiberg, noted in a recent NMPF podcast, Congress is making progress in several areas that will help dairy reach its ambitious goal of net-zero greenhouse gas emissions by 2050. The Growing Climate Solutions Act, which passed the U.S. Senate by a 92-8 vote in June, encourages better-functioning environmental markets, which will help farmers achieve the industry’s net zero goal. Meanwhile, an investment tax-credit bill for greenhouse-gas-reducing technologies is making headway on Capitol Hill, and Congress is considering enhancing conservation policy to encourage climate-friendly agricultural practices and markets that compensate farmers for being stewardship leaders.
  • Finally, addressing dairy’s ag-labor crisis. Perpetually among the heaviest lifts in Congress, agricultural labor reform has at least some momentum this year via the Farm Workforce Modernization Act, which passed the U.S. House of Representatives in March. Senate discussions remain behind-the-scenes, but we have positioned dairy prominently in this debate via the many opportunities we’ve had to spotlight dairy’s labor needs, ranging from a Senate Judiciary Committee hearing on agricultural labor issues and public events with key federal officials to the inclusion of language expanding the current H-2A visa program to accommodate dairy in a recent appropriations bill. These are the types of smaller actions that lead to larger ones, and we will continue this drumbeat to prod Congress to get the job done.

This list, of course, isn’t comprehensive. Dairy’s activities in Washington range widely, from legislation on school milk and plant-based product labeling to forceful advocacy on trade. And other issues, especially those related to milk pricing, are sure to heat up in the months ahead, leaving no shortage of suspense in Washington.

But progress does occur, and we’re looking forward to seeing more progress soon. Washington may be taking a “break,” but we aren’t. And we look forward to helping to resolve at least a few “cliffhangers” in the weeks and months to come.

DMC Margin Drops Again in June

Posted on by Theresa Sweeney

The June margin under the Dairy Margin Coverage program dropped 65 cents from May’s margin to $6.24/cwt, which will generate a June payment of $3.26/cwt for $9.50/cwt coverage. The DMC feed cost calculation for June was lower by $0.16/cwt of milk from May, mostly on lower soybean meal prices, while the June U.S. average all-milk price took a larger than expected drop of $0.80/cwt from May, a return to April levels. The blended alfalfa hay price increased in June, for the ninth straight month.

The current futures-based price outlook indicates that the DMC margin will not rise much above $7.00/cwt through the summer and remain below $9.50/cwt through the end of 2021. USDA reported that estimated DMC payments for the 2021 program exceed $543 million as of July 26.

NMPF Statement on the Confirmation of Dr. Jewel Bronaugh as Deputy Agriculture Secretary

Posted on by Theresa Sweeney

From NMPF President and CEO Jim Mulhern:

“Dairy farmers and their cooperatives congratulate Dr. Jewel Bronaugh on her confirmation as U.S. Deputy Secretary of Agriculture and stand ready to work with her as she tackles the many pressing issues facing agriculture and rural communities today. Her depth of experience with all types of farms, and all types of communities, make her an ideal occupant of this important position, and her deep understanding of food and farm policy will benefit the entire nation.

“We look forward to joining with her in efforts that will improve and aid agriculture and all who benefit from its products. We are excited to discuss many of our own industry-leading efforts with her, such as the dairy industry’s Net Zero Initiative and sustainability goals, and work toward solutions that will only enhance dairy and U.S. agriculture’s global leadership in the years to come.”