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.
Tag: USDA
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 Bleiberg Explains Federal Funding Process to Avert Government Shutdown
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.
Galen Offers Preview of Upcoming Dairy Policy Developments in Early 2024
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.
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USDEC’s Harden discusses USDA Support for Trade
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’s Bjerga on How to Learn More About FMMO
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.
FMMO Hearing Shows Strength of Co-ops
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.
Jim Mulhern
President & CEO, NMPF
NMPF’s Cain Breaks Down FMMO Hearing Progress
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.”
NMPF’s Bjerga on FMMO Hearing Progress
NMPF Senior Vice President of Communications Alan Bjerga discussed progress so far at USDA’s Federal Milk Marketing Order hearing, which began last month, in an interview with RFD-TV. Testimony thus far has focused on proper pricing for milk components, an area in which dairy farmers have made significant headway in the past quarter century.
NMPF’s Cain on USDA’s FMMO Hearing
USDA’s Federal Milk Marketing Order modernization hearing begins Wednesday and dairy farmers are eager to be part of the process. National Milk Producers Federation Director of Economic Research and Analysis, Stephen Cain, says there is a lot of ground to cover. “We’ve developed a big package that we think is going to help the U.S. dairy farmer,” Cain told the National Association of Farm Broadcasters.
NMPF’s Galen on Farm Bill Progress
NMPF Senior Vice President Chris Galen discusses the state of play in the upcoming farm bill on Dairy Radio Now. Current spending debates are slowing progress on the five-year reauthorization of USDA programs, which include nutrition assistance and commodity payments. The current law expires Sept. 30 — because many commodity programs, including dairy, run on a calendar-year basis, any threat of near-term disruption is limited, Galen said.
NMPF Board of Directors Approves Comprehensive Farm Bill Recommendations
NMPF’s Board of Directors approved June 7 a suite of farm bill policy priorities covering the commodities, conservation, trade, and nutrition titles, working to enhance federal support for producers and expand access to nutritious dairy products for consumers at home and abroad.
With the current farm bill set to expire Sept. 30, Congress is working to enact a new bipartisan five-year farm bill. NMPF’s recommendations will aid in enacting an on-time farm bill that provides dairy producers the certainty they need as they manage their risks and resources while seeking market opportunities at home and abroad.
“The farm bill is crucial both to dairy farmers seeking to effectively manage their risk and to the consumers who benefit from the nutritious products dairy farmers work every to provide,” said Randy Mooney, chairman of NMPF’s board and a dairy farmer outside Rogersville, MO. “We stand ready to work with lawmakers as they craft this complex, extremely important legislation that touches everyone.”
In the Commodities title:
NMPF seeks to build on its successes in the last farm bill to strengthen the dairy safety net and provide producers with access to a range of risk management tools. NMPF’s board voted to support continuing the Dairy Margin Coverage safety net while updating the program’s production history calculation. The board also voted to prioritize improving the Livestock Gross Margin-Dairy and Dairy-Revenue Protection programs should new funding become available.
The board also voted to seek farm bill language to direct USDA to conduct mandatory plant cost studies every two years to provide better data to inform future make allowance reviews. This would complement the near-term make allowance update NMPF is pursuing through its Federal Milk Marketing Order initiative via the USDA hearing process announced last week. Similarly, the board also voted to pursue restoring the previous “higher of” Class I mover in the most expeditious manner possible, either administratively via the FMMO process or legislatively through the farm bill, in which the mover was last changed in 2018.
In the Conservation title:
NMPF is advocating for policies that better position the dairy industry to meet its voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050. NMPF’s board voted to support maintaining robust funding for voluntary conservation programs, such as the Environmental Quality Incentives Program that supports dairy farmers in their ongoing land and water resource management efforts, with additional emphasis on feed and manure management both of which are major areas of opportunity in sustainability. The board also voted to seek relief from program payment limitations that prevent the family farmers that produce most of the nation’s milk supply from fully using these programs.
In the Trade title:
NMPF will support policies recognizing the growing importance of trade for U.S. dairy, with exports accounting for one-sixth milk of all U.S. milk production, a share expected to grow. NMPF’s board voted to support enhancing funding for trade promotion programs like the Market Access Program and the Foreign Market Development program, which promote American-made dairy and agriculture products that compete with heavily subsidized foreign products and return well over $20 in export revenue for every dollar invested.
The NMPF board also voted to seek language to protect common food names, as embodied in the bipartisan, bicameral SAVE Act that would establish an official list of common food and beverage names and direct USDA and the U.S. Trade Representative to prioritize this issue in international trade negotiations.
In the Nutrition title:
NMPF will support policies that reflect dairy’s role as an excellent source of 13 essential nutrients, some of which are under-consumed, according to the most recent Dietary Guidelines for Americans. The Supplemental Nutrition Assistance Program is vital to linking the food we produce as farmers to families across the country facing difficult circumstances. NMPF’s board voted to support the enhancement of federal nutrition programs to provide nutritious dairy products to beneficiaries. NMPF also supports the bipartisan Dairy Nutrition Incentives Program introduced in the Senate to encourage SNAP participants to choose healthful dairy products at the grocery store.
