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.
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.”
The National Milk Producers Federation (NMPF) today was awarded funding from the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service National Animal Disease Preparedness and Response Program (NADPRP) supporting two projects advancing dairy cattle disease preparedness.
The first award will expand on USDA funding NMPF received in 2021 to build the National Dairy Farmers Assuring Responsible Management (FARM)Biosecurity Program. FARM Biosecurity provides dairy farmers with the tools to protect the health of their herds and employees from everyday and foreign animal diseases. Biosecurity resources developed from the initial 2021 USDA funding are currently being used to respond to the H5N1 animal health issue. This new funding will expand educational resources and training opportunities for producers, cooperatives, state animal health officials and FARM Program evaluators; update the Secure Milk Supply Plan guidance and further develop the capabilities of the FARM Biosecurity database.
The second award will bring together stakeholders including dairy cooperatives, milk haulers, milk testing labs, state and federal animal health officials and National Animal Health Laboratory Network (NAHLN) lab directors to conduct a gap analysis and create a report outlining current capabilities and guidance for industry and policymakers to implement a foot-and-mouth disease diagnostic assay using bulk tank milk samples to provide herd-level disease surveillance in the event of an outbreak.
“USDA funding for continued enhancement of biosecurity on dairy farms for emerging and foreign animal diseases arrives at a time when the dairy industry is already using USDA-funded resources to address the challenges of H5N1,” Gregg Doud, president and CEO of NMPF, said. “This ongoing collaboration between USDA and NMPF is building resiliency for the U.S. dairy industry now and for the future.”
The grants are funded by the 2018 Farm Bill as part of an overall strategy to help prevent animal pests and diseases from entering the United States and reduce the spread and impact of potential disease incursions through advance planning and preparedness. USDA has funded the NADPRP projects with the goal of individually and collectively addressing critical livestock biosecurity, large-scale depopulation and carcass disposal concerns in all major livestock industries across all U.S. regions. NMPF will apply the grant funding to advance biosecurity and diagnostic testing capabilities to support animal health on dairy farms by partnering with stakeholders and experts, including dairy farmers, veterinarians, dairy cooperatives and processors, NAHLN laboratories, Preventalytics LLC, and state and federal animal health officials.
Emily Yeiser Stepp, Executive Director of the National Dairy Farmers Assuring Responsible Management (FARM) Program, discusses best practices in biosecurity as dairy farmers navigating a new federal order on testing and interstate animal movement in an interview with the National Association of Farm Broadcasters. “We still don’t know a lot about this virus and are taking action to limit that risk of virus spread, not only to protect our own dairy herds but also those poultry facilities that are being impacted, as well as protecting our dairy workers,” Yeiser Stepp said.
NMPF’s Director of Regulatory Affairs, Miquela Hanselman, explains to Dairy Radio Now listeners the changes to the federal school lunch program meal requirements just announced by USDA. The new rules will maintain a place at the table for flavored milk, while also making modest adjustments to sodium levels that won’t negatively impact cheese offerings in school meals.
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 tells Dairy Radio Now listeners about the latest developments in efforts on Capitol Hill to fund the government in 2024 before certain agencies run out of money. He also explains the impact of the funding fight on efforts to pass a new Farm Bill in the spring months, before time runs out as the political focus shifts to the fall election campaign.
NMPF’s Chris Galen tells Dairy Radio Now listeners about the major national policy developments expected to top the headlines in early 2024. These include efforts to fund the government, including agencies like the USDA. Lawmakers also have to complete work on a new Farm Bill prior before the political focus shifts away from Washington toward the 2024 election campaign.
Krysta Harden, president and CEO of the U.S. Dairy Export Council, discusses the value of USDA support for U.S. agricultural exports in an interview with RFD-TV from the World Food Prize in Des Moines, IA. The department said Oct. 24 it plans to devote $2.3 billion from the Commodity Credit Corporation to promoting better market opportunities for U.S. agricultural producers and expanding food aid to support communities in need around the world, a move advocated for by NMPF and USDEC.
NMPF Executive Vice President for Communications and Industry Relations Alan Bjerga offers an update on where the USDA’s Federal Milk Marketing Order hearing stands as it goes on hiatus until late November. Bjerga also discusses the importance of the IDF-World Dairy Summit in Chicago and where the public can go to learn more about the FMMO discussion, in an interview with WEKZ radio, Janesville, WI.
USDA’s Federal Milk Marketing Order hearing in Carmel, IN, is providing the dairy industry with mountains of valuable information and insight that goes well beyond facts and figures.
The hearing isn’t only about shaping milk pricing; it’s also showing what needs improving in our industry, and it’s an opportunity to demonstrate what keeps dairy strong. And nothing is on display more emphatically than the power of dairy farmers and the cooperatives they own, and the importance of the cooperative structure to future progress in dairy, at all levels of production, processing and marketing.
Our breadth of membership and depth of milk marketing expertise has risen to every occasion during this hearing, relentlessly advancing the consensus proposal we adopted after two years of exhaustive study and discussion.
That plan, the only comprehensive solution that adequately makes the adjustments the FMMO system needs, would not have come about in the first place were we not able to rely on our farmer-cooperative members and staff to lead the industry. And without the unified voice a farmer cooperative provides its members in policy discussions, we never would have been able to achieve the unanimity in our membership that was necessary for USDA to take up our plan at all.
That final point is important. Cooperative membership holds multiple benefits for member-owners, beginning with having a guaranteed market for milk each day, but adding up to much more. Cooperatives provide technical expertise and risk-management assistance. Cooperatives pool supplies and capital, finance exports, enhance farmers’ bargaining position with proprietary processors, and even enable those farmers to become processors themselves.
These benefits have allowed dairy farmers to build multimillion-dollar processing plants in local communities, access needed financial resources, and capitalize on efficiencies in areas like milk hauling. Membership in a cooperative is the best way, and sometimes the only way, for a dairy farmer to get products to market and earn a decent return from doing so. Simply put, cooperatives make farmers stronger.
But for cooperatives to remain strong, they also need their members to actively engage.
That’s why it’s important to always remain vigilant against any effort to weaken cooperatives by limiting their ability to speak with a unified voice or adequately represent the best interests of their members. From time to time we hear of efforts on Capitol Hill or elsewhere to dilute the power of cooperatives to speak with one voice on votes on issues such as the Federal Milk Marketing Order system. Offered under the guise of encouraging individual choice, in practice these efforts are more like “divide and conquer” – chipping away at the benefits cooperatives provide by weakening their ability to pursue their members’ best interests.
Such efforts tend to be pursued by the same interests that, in the end, would rather that co-ops go away: companies that would prefer the benefits (to them) of vertical integration; agribusinesses that would rather not bargain with co-ops to get a better price for farmers; individual farmers who don’t feel they “need” co-ops to succeed (even as they buy inputs and sign contracts with them); and political ideologues who just don’t like the idea of farmers helping one another for mutual benefit. We’ve always been able to successfully resist them because, in the end, we use the very power we have to work together and protect our members’ interests.
As we celebrate October as National Co-op Month, with Farm Bill discussions underway and FMMO modernization making its way toward an eventual producer vote, we stand ever ready to defend cooperatives and their principles. Every day, at the federal order hearing in Indiana, we’re proving just how valuable to dairy the cooperative model remains. And every day across America, on farms, in milk trucks and in supermarkets, we remain proud of all we do to facilitate orderly marketing of milk and keep this nation nourished – and will continue to do so, with a strong, united voice, for many years to come.
NMPF Senior Director of Economic Research & Analysis Stephen Cain discusses progress thus far in USDA’s Federal Milk Marketing Order hearing on the Agriculture of America podcast. “We haven’t had a major update like this in over two decades, so it’s time for an update, and we’re trying to make sure we do it right,” Cain said. “So it’s going a go slowly, but we’re making progress and we’re moving through a lot of the key issues here to make sure that the orders are operating as effectively as they can.”
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