NMPF Senior Vice President of Communications Alan Bjerga discusses this year’s enhanced benefits under the Dairy Margin Coverage Program on RFD-TV. A better feed-cost calculation and a production update for some smaller producers- are 2022 highlights for DMC, which along with risk-management initiatives such as Dairy-RP and LGM-Dairy from USDA, offer a wide range of tools for producers, all made more workable and useful via NMPF advocacy.
Tag: USDA
NMPF’s Galen on DMC Signup
NMPF Senior Vice President Chris Galen discusses this year’s signup for the Dairy Margin Coverage program with Michael Clements of the National Association of Farm Broadcasters. This year’s DMC features a production update for some producers and an improved feed-cost calculation, further enhancing its value as a risk-protection program for dairy farmers.
NMPF’s Mulhern Speaks at Annual Meeting
NMPF President and CEO Jim Mulhern speaks at the organization’s annual meeting in Las Vegas, NV on Nov. 16.
USDA Announces Risk-Management Revisions Affecting Dairy
USDA on April 28 announced an update of its livestock insurance policies intended to improve options for producers and create additional opportunities for producers to participate. NMPF, which in the last Farm Bill played a critical role in allowing Risk Management Agency programs to allocate unlimited funds for dairy farmers to protect themselves against market volatility, urges dairy producers to consider the new provisions when making risk-management plans.
The USDA Risk Management Agency (RMA) updates to the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) policies will be effective for the 2022 and succeeding crop years.
DRP, which covers about 30% of U.S. milk production, paid roughly $478 million to dairy producers in 2020 as the COVID-19 pandemic brought heightened volatility to markets. Changes for the 2022 crop year include:
- Ensuring the Class Pricing Option remains available for purchase even when either the Class III or Class IV milk price is not published.
- Relaxing records requirements by allowing monthly total pounds of milk and milk components (butterfat and protein) to be acceptable records instead of daily.
- Modifying weekend sales period to end on Sunday at 9 a.m. Central Time.
The LGM program, available for dairy, cattle, and swine producers, provides protection against loss of gross margin (market value of livestock minus feed costs). Changes for the 2022 crop year include allowing producers to purchase coverage weekly instead of monthly.
For more detailed information on changes to these and other USDA Risk Management Agency crop insurance programs, visit rma.usda.gov.
NMPF’s Bjerga on Food Box, Vaccinations, and Butter’s Bright Future
NMPF Senior Vice President of Communications Alan Bjerga discusses the rise and fall of the Farmers to Families Food Box program and the potential for improved food-assistance programs, along with the need for stepped-up rural COVID vaccinations and how the pandemic could brighten the long-term outlook for butter. Discussion on WEKZ radio, Janesville, Wisconsin.
DMC’s January Payout Exceeds Annual Premium Costs
The margin in January for the Dairy Margin Coverage program, the main federal dairy safety-net initiative, was $7.14 per cwt, down from $8.78 per cwt in December. That generated a payment of $2.36 per cwt for $9.50 per cwt coverage for January – which, by itself, was already more than enough to repay the full cost of signing up for the program at the maximum coverage level for the entire year.
The January all-milk price dropped another dollar from December to $17.50 per cwt. Meanwhile, the remaining $0.64 per cwt monthly drop in the margin was generated almost entirely by increases in corn and soybean meal costs. The one-month increase in the margin’s feed cost was the highest for the DMC as well as for its predecessor, the Margin Protection Program, which was initiated in 2014.
With current futures prices indicating that the all-milk price won’t rise above January’s level for several months and that corn will keep rising and soybean meal will not get much cheaper over the same period, the program is expected to generate substantial payments in 2021.
NMPF Statement on Confirmation of Tom Vilsack as Secretary of Agriculture
From NMPF President and CEO Jim Mulhern:
“All of U.S. agriculture has an effective advocate in Tom Vilsack, and the nation will be well-served by his return to public service leading the U.S. Department of Agriculture.
“We in the dairy community who have had the opportunity to work with him have seen first-hand his deep passion for rural America and his commitment to advancing agriculture and the communities it serves, from farmers and food-sector workers to the consumers and businesses that depend on USDA to meet their needs every day, in every way. That’s especially important in light of today’s pressing challenges, which include a farm economy battered by the COVID-19 pandemic; climate change, sustainability and the environment; nutrition and food insecurity; international trade policies that limit U.S. exports; labor shortages that are worsening with time; and the legacies of societal injustice that need to be addressed.
“Tom Vilsack’s experience and leadership will be crucial to meeting these challenges, and more. We congratulate him on his confirmation and pledge to do our best to contribute to his successful service.”
Dairy Key to USDA Ag Innovation Agenda Research Strategy
USDA released on Jan. 12 the U.S. Agriculture Innovation Strategy Directional Vision for Research summary and dashboard that will help to guide future research decisions within USDA. The strategy synthesizes information USDA collected as part of the public engagement in 2020 on research priorities under the Agriculture Innovation Agenda.
NMPF, Newtrient LLC, and the Innovation Center for U.S. Dairy submitted a series of comments to USDA on their request for comments on the Ag Innovation Agenda. These wide-ranging comments helped USDA put forth a clear and comprehensive research strategy specific for the U.S. dairy industry under four aspirational goals:
- Production Aspirational Goal: Increase agricultural production by optimizing yield and/or quality with higher input use efficiency;
- Production Capability Aspirational Goal: Increase agricultural production capabilities of soil, water, and air by developing and implementing sustainable farming tools and practices;
- Market Expansion and Diversity Aspirational Goal: Increase market diversity and product utility of the farming system to expand value, reach, and resiliency; and
- Data Aspirational Goal: Standardize, align, and integrate agricultural research and operational data to enable and energize a broad informatics ecosystem to drive tomorrow’s agricultural operations and state and federal programs.
NMPF Calls for More-Equitable Class I Mover as Part of Push for Improved Dairy-Pricing
The National Milk Producers Federation today called for changes to the so-called Class I fluid milk price mover to recover losses dairy producers have faced from the extreme price disruptions caused by the coronavirus pandemic, part of a suite of policies essential to advancing the well-being of dairy farmers and the entire industry in response to challenges brought to light by the COVID-19 pandemic.
“We are seeking consensus across the dairy industry for changes to the Class I mover that remedy economic damage to dairy farmers who have disproportionately suffered as a result of this pandemic,” said Jim Mulhern, President and CEO of NMPF, after a meeting of NMPF’s Executive Committee on Friday to discuss policy approaches. “The intent behind the current mover was a revenue-neutral solution to the concerns of fluid milk processors about hedging their price risk. With that balance severely upended due to the pandemic, a modified approach is necessary. We need a solution that provides more equity and balance between farmers and processors.”
The current Class I mover used to price fluid milk in federal milk marketing orders took effect in 2019. It applies a $0.74/cwt adjuster to the monthly average of Class III and IV prices. That replaced the previous Class I formula, which was based on either the Class III or IV price each month, whichever was higher – an approach that worked for farmers but made it more difficult for fluid milk handlers to hedge milk prices using the futures market. The 2019 change was intended to be revenue-neutral and was widely supported across dairy when it was implemented. But the significant gap between Class III and IV prices that has developed during the pandemic has exposed dairy farmers to asymmetrical losses not experienced by processors.
Dairy farmers may lose roughly $800 million in revenues under the current Class I mover, making its re-examination necessary.
NMPF’s Executive Committee on Friday supported a motion directing the organization to explore, with other industry stakeholders, updates to the pricing formula that better protect dairy producers. The committee also discussed other dairy-pricing improvements as part of an ongoing in-depth NMPF examination of important issues related to Federal Milk Marketing Orders. NMPF leadership directed staff to convene NMPF’s Cheese Pricing Task Force to further refine proposals involving both public and private sector organizations that could help address ongoing imbalances in the pricing of block and barrel cheese.
“These issues are challenging and complex, but also crucial to face if we are to best promote prosperity among dairy farmers, their cooperatives, and the entire industry,” Mulhern said.
Dietary Guidelines Reaffirm Dairy’s Crucial Nutritional Benefits; Fats Review Urged for 2025
The National Milk Producers Federation praised USDA and HHS today upon the release of the 2020-2025 Dietary Guidelines for Americans (DGA), which reaffirmed dairy’s central role in diet as a provider of essential nutrients that are often under-consumed in American diets. NMPF also pledged to continue efforts to broaden consideration of the latest science on dairy fats in the next examination of the federal guidelines, which are released twice each decade.
“USDA and HHS deserve praise for once again recognizing just how vital dairy is to the nation’s health and well-being,” said Jim Mulhern, president and CEO of NMPF. “We encourage them to affirm that role even more clearly in the next iteration of the Dietary Guidelines, to reflect the positive contribution of dairy fats in diets that’s increasingly recognized in a growing body of evidence.”
The guidelines culminate nearly two years of work that began in 2019 with the selection of the Scientific Advisory Committee, which drafts recommendations for the U.S. Department of Agriculture and the Department of Health and Human Services.
The latest update to the dietary guidelines restates dairy’s importance to diet. Highlights include:
- A recommendation of three servings of dairy in the Healthy U.S. Eating pattern and Healthy Vegetarian Eating patterns, in keeping with past guidelines
- Dairy’s continued recognition as a distinct food group
- A recognition that Americans aren’t consuming enough dairy to meet their nutritional needs
- Dairy’s reaffirmation as a source of four nutrients of public health concern, including potassium, calcium, and vitamin D, as well as iodine for pregnant women
- A recommendation of milk, yogurt, and cheese in the first-ever healthy eating patterns geared toward infants and toddlers ages birth to 24 months.
“The panel’s recognition that dairy is a key source of ‘nutrients of concern’ in U.S. diets is especially important,” Mulhern said. “During a time of food insecurity and concerns about proper nutrition among Americans, dairy is a readily accessible solution to clearly identified public-health challenges. Dairy farmers work hard to be part of that solution, and the panel’s recognition of the nutritional importance of dairy is greatly appreciated.”
The Dietary Guidelines for Americans have significant implications for numerous government policy areas, including guiding the types of milk served in school meal programs and setting the parameters for how nutrition programs are implemented and developed.
NMPF Thanks Congress for Dairy Provisions in COVID Assistance Package
The National Milk Producers Federation (NMPF) thanked Congress today for the positive steps it is taking through COVID relief legislation to assist dairy farmers who have faced unprecedented market volatility while working every day to nourish struggling families.
“With difficult months of the pandemic still ahead, it was crucial for lawmakers to come to a bipartisan agreement that helps farmers do what they do best: feed families. To do this, they need financial stability and ways to connect to families in need. We thank Congress for its leadership, and we look forward to working with USDA in implementing this legislation. Importantly, this package includes nearly $1 billion in targeted support to help dairy producers continue to feed families throughout these difficult times,” said Jim Mulhern, NMPF president and CEO.
Highlights of the pandemic legislative package for dairy producers include:
- Dairy Donation Program – the measure provides $400 million for a new NMPF-backed Dairy Donation Program to help dairy stakeholders and non-profits work together to provide dairy products to food-insecure households and minimize food waste. This program is carefully balanced and is open to all dairy products. NMPF is grateful to Senator Debbie Stabenow (D-MI) and Rep. Collin Peterson (D-MN) for their leadership in securing this and other dairy provisions in the package.
- Payment Limits Flexibility – the bill includes dedicated funding to allow USDA to provide additional compensation to producers who were unable to receive the full support they needed under the Coronavirus Food Assistance Program on account of payment limitations. NMPF thanks Rep. Mike Conaway (R-TX) for advocating for this provision, as well as the many members who have sought flexibility on this front all year long including Sens. Jerry Moran (R-KS) and Dianne Feinstein (D-CA) and Rep. Jim Costa (D-CA).
- Supplemental DMC Payments – the measure establishes Supplemental Dairy Margin Coverage payments for farms that have increased their DMC production history since 2014. These payments will be based on the difference between the farm’s 2019 actual production and its DMC production history. While the provision is targeted to smaller operations, it will enhance the farm bill baseline for all dairy farmers as it runs concurrently with DMC up to 2023.
- Paycheck Protection Improvements – the bill includes the bipartisan NMPF-backed Paycheck Protection for Producers Act which would make the Paycheck Protection Program work better for sole proprietor, independent contractor, and self-employed dairy farmers by allowing them to use their 2019 gross farm income to determine their PPP loan amounts. NMPF commends Sens. John Thune (R-SD) and Tammy Baldwin (D-WI) and Reps. Ron Kind (D-WI), Glenn ‘GT’ Thompson (R-PA), Anthony Brindisi (D-NY), and John Joyce (R-PA) for their work on this measure.
Dairy producers will also be eligible for support in the $11 billion agricultural disaster assistance package Congress has included in the legislation, with additional details expected in coming days. Of note, at least $1.5 billion of this package is dedicated to additional product purchases.
NMPF has served its members as the leading advocate for U.S. dairy farmers throughout the coronavirus pandemic. It has also been an industry leader in providing useful informational resources for the dairy sector.
NMPF’s Mulhern Speaks on Tom Vilsack’s Nomination to Lead USDA
NMPF President and CEO Jim Mulhern talks about Tom Vilsack’s nomination to become USDA Secretary on Brownfield Ag News. “He has a deep understanding of our industry and frankly, I think a deeper understanding of all of U.S. agriculture,” Mulhern says in the broadcast.
