Tag: dairy safety net

USDA’S Feed-Cost Decision Improves DMC Payment Outlook

Posted on by Theresa Sweeney

USDA’s announcement that it was modifying the feed-cost calculation for the DMC margins to reflect the cost of dairy-quality alfalfa hay has offered additional assistance for producers who sign up for the program.

Under USDA’s formula, the department will use the simple average of the U.S. average price received by farmers for all alfalfa hay and the average price received in the five largest milk-producing states for premium and supreme grade alfalfa hay. That’s a change from the previous Margin Protection Program, which used only the lower U.S. average price for all alfalfa hay. The change will increase the calculated DMC feed costs for the first five months of the year by an average of 21 cents per hundredweight of milk, which reduces the DMC margin by the corresponding amount. This will generate larger payments for program participants whose coverage level is high enough to trigger compensation.

The National Milk Producers Federation has long urged USDA to calculate the margins using the cost of higher quality alfalfa used in dairy feed rations and secured a provision in last year’s farm bill directing the department to collect and report the necessary data. In its announcement, USDA stated that the change would “provide a total feed cost that more closely aligns with hay rations used by many producers.”

The DMC margin for May is $9.00 per cwt, generating a payment for the month of 50 cents per cwt for producers who purchase coverage for 2019 at the DMC maximum level of $9.50 per cwt, for up to 5 million pounds of production history. May’s DMC margin was $0.18 per cwt higher than April’s, resulting from a $0.30 per cwt higher milk price and $0.12 per cwt higher feed cost.

USDA’s DMC Decision Tool, which assists producers in making their program enrollment decisions, has been updated to reflect the recent change to the feed cost calculation. As of June 28th, the tool, which can be accessed online, was projecting margins that would generate payments that average $0.49 per cwt., net of estimated federal sequestration, for all of 2019 to producers who sign up for $9.50 per cwt coverage on up to 5 million pounds of production history. Coverage at this level costs $0.15 per cwt for the year.

The NMPF’s DMC information page on its website offers a variety of educational resources to help farmers make better use of the program.

Farmers Begin DMC Signup with Extra Incentive From NMPF-Supported Feed-Cost Change

Posted on by Theresa Sweeney

Signup for the long-awaited Dairy Margin Coverage program began June 17, including a late change to DMC feed-cost calculations that will bring dairy farmers millions of dollars in additional aid and that NMPF had been quietly advocating with the White House and USDA for months. More than 5,000 dairy farmers signed up for the program in its first 10 days, according to USDA.

The 2018 Farm Bill created the DMC program, which replaces the Margin Protection Program for Dairy. The program protects dairy producers when the difference between the milk prices and feed costs (the margin) falls below a certain dollar level of coverage selected by the producer. The USDA’s decision to include the cost of high-quality alfalfa feed in the payment calculations, announced shortly before signup began, increases calculated feed costs and thus lowers margins, triggering higher payments to producers. The decision will be a boon for dairy farmers facing a fifth year of low prices.

“The DMC provides a stronger safety net for America’s dairy producers, one sorely needed as low prices, trade disturbances and chaotic weather patterns combine to create hardships,” said Jim Mulhern, president and CEO of the NMPF. “We have advocated for months that margin calculations must consider the higher feed costs dairy producers pay to properly nourish their livestock. USDA’s decision to include premium and supreme quality alfalfa feed is appropriate and is another win for dairy farmers that will provide additional, crucial aid.”

Producers may cover up to their first 5 million pounds of milk production history (equivalent to the production of a 215-cow dairy farm) at a margin of up to $9.50 per hundredweight. Payments under the program will be retroactive to January 1. Calculations already made for the first five months of the year show that producers signing up at the $9.50 level would receive payments for each month, with total payments far exceeding the already-set annual premium. All producers will be able to access this affordable coverage regardless of size, and larger producers will have access to significantly more affordable $5.00 catastrophic-type coverage.

As far back as the Farm Bill signing in December 2018, NMPF advocated for USDA to prioritize implementation of the dairy program given the prolonged distress producers have faced.  USDA heeded this call early on and members of Congress gave voice to it as well.  This spring, House Agriculture Committee Chairman Collin Peterson (D-MN) and Rep. Glenn ‘GT’ Thompson (R-PA) as well as Senate Agriculture Committee Ranking Member Debbie Stabenow (D-MI) and Senator Roy Blunt (R-MO) spearheaded bipartisan letters urging USDA to promptly finalize the DMC program in a farmer-friendly manner.

“We very much appreciate USDA Secretary Sonny Perdue sticking with the department’s pledge to make dairy a priority in Farm Bill implementation,” Mulhern said. “And we again want to express our appreciation to Congressional agriculture leaders who worked together on a bi-partisan basis to deliver these program improvements,” he said.

Dairy farmers have begun to receive letters in the mail from USDA’s Farm Service Agency to make them aware of their enrollment and coverage options under the DMC. NMPF looks forward to working closely with USDA to ensure that any remaining producer questions or concerns are addressed as the implementation process unfolds.

NMPF Welcomes California Dairies Inc., Second-Largest U.S. Dairy Cooperative, Into Membership

Posted on by Alan Bjerga

ARLINGTON, Va. – The National Milk Producers Federation today welcomed California Dairies Inc. into its membership, as the addition of the largest dairy cooperative in the biggest dairy-producing state significantly bolsters the strength of dairy producers in speaking with a unified voice on national and international issues of concern to farmers.

“We are very pleased to have CDI’s voice among our already strong and active membership,” said Jim Mulhern, president and CEO of NMPF, which is the largest U.S. dairy-farmer organization. “CDI bolsters the nationwide reach and diversity of our organization and strengthens our ability as farmer-owned cooperatives to tackle a wide array of challenges in marketing, farm labor and trade, food safety, nutrition and product labeling.”

CDI, based in Visalia, produces 40 percent of California’s milk and about 8 percent of all milk in the U.S. By volume, it is the second-largest dairy cooperative in the United States. Co-owned by more than 370 dairy producers who ship 16 billion pounds of milk annually, CDI makes high-quality butter, fluid milk products and milk powders. It produces two leading brands of butter – Challenge and Danish Creamery — and its products are available in all 50 states and more than 50 foreign countries.

“California Dairies, Inc. is excited to begin our membership with the National Milk Producers Federation as we work toward a stronger U.S. dairy industry,” said Simon Vander Woude, Chairman of the CDI Board of Directors.  “Both CDI and NMPF are active and respected organizations in Washington, DC, advocating on behalf of our respective memberships. However, we believe by combining our efforts, we can be an even stronger and more effective coalition, advocating pro-dairy policies that fundamentally strengthen our farmers and our industry as a whole.”

CDI officially joined National Milk today by a unanimous vote of its board of directors at NMPF’s June meeting. The cooperative will have five seats on that board of 53 members. In addition to approving CDI’s membership, NMPF also created a 14-member executive committee, which will include one member from CDI, to serve as a core leadership body, supplementing the work of its officers and board. The members of the executive committee include:

Jay Bryant, Maryland & Virginia Milk Producers Cooperative Operation (Reston, VA)

Beth Ford, Land O’Lakes Inc. (Arden Hills, MN)

Tony Graves, Prairie Farms Dairy, Inc. (Edwardsville, IL)

Mike McCloskey, Select Milk Producers Inc. (Dallas, TX)

Randy Mooney, Dairy Farmers of America (Kansas City, KS)

Keith Murfield, United Dairymen of Arizona (Tempe, AZ)

Ken Nobis, MMPA (Novi, MI)

Doug Nuttelman, DFA

Leroy Plagerman, Northwest Dairy Association/Darigold (Seattle, WA)

Neal Rea, Agri-Mark, Inc. (Andover, MA)

David Scheevel, Foremost Farms USA (Baraboo, WI)

Steve Schlangen, Associated Milk Producers Inc. (New Ulm, MN)

Simon Vander Woude, CDI

John Wilson, DFA

“The addition of the new executive committee will be helpful in gaining additional member input on often fast-developing policy issues, and it reflects the strong interest of our membership in united dairy community action,” said Randy Mooney, NMPF’s chairman and dairy farmer from Rogersville, MO.

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce the majority of U.S. milk, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more, visit www.nmpf.org.

NASS Numbers Show Third Straight Month of DMC Payouts

Posted on by Theresa Sweeney
The USDA’s National Agricultural Statistics Service (NASS) reported for the third consecutive month that dairy farmers would receive a payout should they elect to sign up at the $9.50 coverage level under the new Dairy Margin Coverage program.
The March 2019 milk and feed-price margin under the Dairy Margin Coverage (DMC) program is $8.85 per cwt., which would generate a payment that month of $0.65 per cwt. for producers who purchase 2019 coverage at the DMC maximum level of $9.50 per cwt. for up to 5 million pounds of production history. The March DMC payment would be $0.64 per cwt. lower than February’s, due to a $0.70 per cwt. rise in the milk price offset slightly by a smaller increase in the price of alfalfa hay.
The projected March payout adds to January and February margins that together already ensure that producers who enroll at the $9.50 coverage level will receive more in DMC payments during 2019 than they will pay in premiums. USDA is currently predicting that $9.50 DMC coverage will generate additional payments for April through July. Signup is expected to begin June 17.
The 2018 Farm Bill also removes the previous restriction that prohibited producers from enrolling milk in both the Margin Protection Program that DMC replaced and the Livestock Gross Margin for Dairy (LGM-Dairy) program during the same month. It further allows farmers previously prevented from enrolling in MPP during 2018 due to this restriction to enroll retroactively in MPP and collect payments for 2018 for the months during which they were prevented from doing so. Farmers who purchased buy-up coverage under MPP during 2014-2017 are also eligible under the Farm Bill to receive a partial refund of their net payments during those years.
USDA’s DMC margin forecasts and DMC Decision Tool also now can be accessed online.

Cooperative Members, Dairy Experts Testify in Agriculture Subcommittee’s First Hearing

Posted on by Theresa Sweeney

In its first hearing of the 116th Congress the House Agriculture Committee’s subcommittee on livestock and foreign agriculture focused on dairy’s improved safety net and the need for expanded exports, with farmers from NMPF cooperatives and industry leaders bringing national attention to industry concerns.

The hearing, called by Subcommittee Chairman Jim Costa (D-CA), spotlighted the low prices and trade concerns the sector faces while discussing the opportunities offered for producers through the new Dairy Margin Coverage program, calling solutions to dairy’s struggles one of the subcommittee’s highest priorities.

Testimony included:

  • Minnesota dairy farmer Sadie Frericks, a member of Land O’Lakes, spoke of the importance of the new Dairy Margin Coverage program as a risk management tool as her family weathers economic challenges;
  • California Dairies, Inc. President and CEO Andrei Mikhalevsky provided an overview of dairy’s trade issues, a rising concern as exports are crucial to increasing dairy demand;
  • Pennsylvania dairy farmer Dave Smith, Executive Director of the Pennsylvania Dairymen’s Association, discussed additional challenges including the importance of milk consumption in schools and the need to combat mislabeled fake milks in the marketplace;
  • New York dairy farmer Michael McMahon gave voice to the dairy industry’s unique workforce challenges, including the lack of a viable guest worker program that covers year-round workers;
  • and Dr. Scott Brown, Director of Strategic Partnerships for the University of Missouri’s College of Agriculture, Food and Natural Resources, provided economic insight.

NMPF President and CEO Jim Mulhern thanked the participating farmers and industry leaders for bringing their crucial dairy perspectives to a national level and applauded the subcommittee for putting dairy first on its 2019 agenda, noting that the sector’s “challenges reverberate through the U.S. economy.” Mulhern also thanked lawmakers including Costa, subcommittee ranking member Rep. David Rouzer (R-NC), Agriculture Committee Chairman Rep. Collin Peterson (D-MN), and Congressman GT Thompson (R-PA) for their helpful opening and closing statements at the hearing.

NMPF Applauds House Subcommittee for Putting Dairy First; DMC Decision Tool Now Online

Posted on by Alan Bjerga

ARLINGTON, Va. – As key milestones are being met in offering much-needed financial relief for dairy producers, the National Milk Producers Federation today thanked the House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture for choosing dairy as the subject of its first hearing this year.

Lawmakers heard a diverse array of witnesses who provided important perspectives on the state of U.S. dairy, which is in its fifth year of low prices and its second year of trade-related hardships. In their opening statements:

  • Minnesota dairy farmer Sadie Frericks spoke of the importance of the new Dairy Margin Coverage program as a risk management tool as her family weathers economic challenges;
  • California Dairies, Inc. President and CEO Andrei Mikhalevsky provided an overview of dairy’s trade issues, a rising concern as exports are crucial to increasing dairy demand;
  • Pennsylvania dairy farmer Dave Smith, Executive Director of the Pennsylvania Dairymen’s Association, discussed additional challenges, including the importance of milk consumption in schools and the need to combat mislabeled fake milks in the marketplace.
  • New York dairy farmer Michael McMahon gave voice to the dairy industry’s unique workforce challenges, including the lack of a viable guest worker program that covers year-round workers
  • and Dr. Scott Brown, Director of Strategic Partnerships for the University of Missouri’s College of Agriculture, Food and Natural Resources, provided economic insight.

“Dairy’s challenges reverberate through the U.S. economy, and it’s appropriate that lawmakers put dairy first on its 2019 agenda,” said Jim Mulhern, president and CEO of NMPF. “We thank all of the farmers and industry leaders who spoke out. We also commend subcommittee Chairman Rep. Jim Costa (D-CA) and ranking member Rep. David Rouzer (R-NC), as well as Agriculture Committee Chairman Rep. Collin Peterson, (D-MN), who made helpful opening statements at the hearing, for their attention to dairy’s urgent needs.”

The NMPF continues to encourage farmers to prepare for Dairy Margin Coverage signup, scheduled to begin June 17. The USDA’s decision tool, designed to help farmers determine their appropriate coverage level, is now online here. Later this week, letters will be sent to producers informing them of their premium refunds under the previous Margin Protection Program.

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The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce the majority of U.S. milk, making NMPF the voice of dairy producers on Capitol Hill and with government agencies. For more, visit www.nmpf.org.

Congressional Farm Leaders, Secretary Perdue Thanked for Work on Swift Dairy-Program Implementation

Posted on by Alan Bjerga

NMPF worked closely with key House and Senate dairy leaders in March to add bipartisan momentum to the U.S. Department of Agriculture’s efforts to implement the new Dairy Margin Coverage program created in the 2018 Farm Bill, highlighted by letters to Agriculture Secretary Sonny Perdue urging dairy implementation backed by members of both parties in both chambers.

Perdue has prioritized dairy programs in his farm-bill rollout, noting in testimony before Congress on April 9 that DMC outreach materials are being prepared for distribution via Farm Service Agency offices nationwide. NMPF appreciates the Secretary’s commitment to a timeline as well as congressional support for fast, farmer-friendly implementation of reforms. The bipartisan House and Senate letters urge USDA to implement the dairy provisions of the 2018 Farm Bill as quickly as possible and in a farmer-friendly manner.

House Agriculture Committee Chairman Collin Peterson (D-MN) and senior committee member Representative Glenn ‘GT’ Thompson (R-PA) led the House effort, and Senate Agriculture Committee Ranking Member Debbie Stabenow (D-MI) and Senator Roy Blunt (R-MO) led in the Senate.  As noted in the letters, DMC and the other improvements will provide critical help to dairy farmers this year.

The letters, signed by 77 House members and 38 Senators from both parties, also urge USDA to engage actively with farmers on multiple levels, including mailings, phone calls and local meetings, as well as collaboration with stakeholders including state officials, cooperatives, producer groups and institutions of higher education.

NMPF participated heavily in generating support for the letters among members, and appreciates how bipartisan, bicameral efforts in Congress draw attention to the challenges dairy farmers are facing and applauds Secretary Perdue for putting forward a timeline for implementation.  While urging action to speed up implementation wherever possible, the organization continues to work with USDA and Congress to ensure the DMC program best serves hard-working, economically stressed dairy producers.