Chris Galen, NMPF’s senior vice president of member services and governance, discusses the change in leadership in Congress resulting from the budget bill approved on Oct. 1 i this audio segment from Dairy Radio Now. He also updates listeners on USDA’s national hearing on Federal Order modernization, and the timing for that as well as a possible 2023 Farm Bill.
Tag: Federal Milk Marketing Order
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
Milk Prices on the Rise
NMPF’S GALEN DISCUSSES CHANGING FLUID MILK PRICING SYSTEM
Chris Galen, NMPF’s senior vice president of member services and governance, discusses the fifth week of USDA’s national hearing on Federal Order modernization, which focused on returning to the “higher of” Class I fluid milk price system. Galen also discussed what may happen to the hearing process if the federal government shuts down in October.
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 Economists Lead on Path to FMMO Modernization
- Led development of NMPF’s policy proposals to modernize the Federal Milk Marketing Orders.
- Requested national order hearing to amend five pricing provisions, as agreed unanimously by the NMPF Board.
- Developed testimony and gathered witnesses in support of the FMMO modernization efforts in advance of the hearing.
The Economics team this year has led NMPF’s efforts to modernize the Federal Milk Marketing Order system, a complex and critical component of the industry’s future.
After nearly two years of work and more than 200 virtual and in-person meetings, NMPF’s FMMO efforts reached another milestone August 23 on the long path towards implementation. with the start of the national USDA hearing in Carmel, IN. NMPF’s Chief Economist, Peter Vitaliano, providing the first testimony of any of the interested parties presenting at the hearing, expected to last six weeks. Vitaliano’s initial testimony laid out the context for NMPF’s full proposal before he focused on the rationale for updating the milk component factors in the skim milk price formulas, the first of National Milk’s five proposals to amend the FMMO pricing provisions.
Before the hearing concludes, Vitaliano will testify another four times on NMPF’s other proposals to ensure the FMMO better reflects current market conditions. Those additional four proposals recommend that USDA:
- Discontinue use of barrel cheese in the protein component price formula
- Return to the “higher-of” Class I mover
- Increase make allowances in the component price formulas; and
- Update the Class I differential pricing surface.
In addition to Vitaliano, experts from NMPF member cooperatives along with dairy farmer leaders will be testifying in support of NMPF’s proposals. Throughout the process, NMPF staff, attorneys, and consultant/FMMO expert Jim Sleper will remain actively engaged in formulating strategy to achieve the best possible outcome for U.S. dairy farmers and their member cooperatives. Economics has also assisted Government Relations in advocating for Farm Bill language to direct USDA to conduct mandatory plant cost studies every two years to better inform future make allowance discussions.
Beyond the extensive Federal Order work, the Economics team provided the analytical and administrative backbone to the Cooperatives Working Together program, supporting the export of more than 600 million pounds milk equivalent of dairy products through August of this year. Additionally, the team has been helping members and farmers stay ahead of the market, publishing 40 market reports and delivering over 35 presentations so far this year.
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.
As Hearing Moves Forward, Dairy’s Path is Becoming Clearer
USDA’s Federal Milk Marketing Order (FMMO) hearing is well underway, and thus far its progress is much as expected. With NMPF’s proposed modernization plan serving as its bedrock, the topics under discussion very much reflect the areas we identified as key areas of improvement to FMMOs. At the same time, cross-examination and counter-proposals from other parties have been thorough, and at times, off-base.
Unsurprisingly, those questions and perspectives reflect the vested interests of the questioners, with changes often presented as zero-sum games in which the questioner’s ideas and opinions just-so-happen to benefit its bottom line. Our position at NMPF is a little different. We recognize that any proposal USDA puts up to a producer vote will need to meet a balance of interests, as admittedly, some regions, sizes or business models may benefit more than others depending on the issue. That’s a simple fact of reality in the world of policy progress. In that sense, we’re not always arguing specifically for the benefit of one party – we’re defending the consensus we’ve crafted that provides the greatest benefit to the industry as a whole, dairy farmers, processors, and consumers alike, because that’s the only approach that will bring the lasting improvements for the entire dairy industry.
This is why we at NMPF can’t help but smile a bit when we hear someone bring up an idea that we considered – and discarded – as far back as two years ago, when we began holding more than 200 meetings among farmers, cooperative analysts and industry-leading economists that generated our comprehensive improvement plan. We’ve literally been there and done that. But interested parties must have their say, and differing proposals can be brought before USDA – and in fact, they should be, so as to serve the important interests of transparency and continued consensus.
This is where all those meetings, and the thorough preparation our cooperative-led team has made for this generational opportunity for improvement, reaps dividends. We’ve faced tough questions. We’ve developed industry-leading analysis. We’ve even “war-roomed” the hearing process itself, meeting to discuss anticipated critiques of our proposal and preparing authoritative responses. Our approach is exhaustive, but never exhausting, because we’ve always kept our eyes focused on the ultimate goal of a modernized, fairer, more robust system of milk pricing for dairy farmers. And with each step toward that goal, we feel we’re only gaining more momentum – one that in the end will benefit everyone, even those who, at this moment, are offering alternatives aimed at simply boosting their narrower self-interests.
Leadership isn’t easy. As this is being published, we still have several weeks of proposals to wade through, after which further discussion and USDA consideration begins. But thus far we’re gratified that our leadership on this issue has taken dairy thus far. We set out to modernize the system. We worked with USDA, which decided it was time to examine that modernization. Now we’re explaining and justifying our proposals, with dairy’s brightest and most articulate analysts, economists and farmers testifying to the value of what we painstakingly crafted and impressing upon all of agriculture just how seriously we’ve taken this mission. We look forward to showing why our comprehensive proposal – the unanimous choice of dairy cooperatives that produce more than two-thirds of the nation’s milk — is the best approach for dairy’s future.
This occasion is incredibly important, and we’re rising to it. We look forward to continued progress.
Jim Mulhern
President & CEO, NMPF
NMPF’s Bjerga on FMMO Hearing and Dairy Leadership
NMPF Senior Vice President of Communications Alan Bjerga discusses where USDA’s hearing on Federal Milk Marketing Orders stands and outlines the road ahead once the process is complete. Bjerga was interviewed on RFD-TV.
FMMO Hearing Heralds Farmer-Led Progress for Dairy, NMPF Says
The first day of USDA’s once-in-a-generation hearing on federal milk pricing represents a critical moment for dairy’s future, one in which the National Milk Producers Federation intends to lead, President and CEO Jim Mulhern said today.
“Thanks to the tireless efforts of dairy farmers and their cooperatives, this industry is poised for progress as Federal Milk Marketing Order modernization is now in sight,” Mulhern said, as dairy experts and government officials gathered in Carmel, IN, for what’s expected to be five to seven weeks of testimony and discussion of proposals to update and improve the FMMO system, which last saw a major revision in 2000. “NMPF’s comprehensive proposal for improvements to the system forms the basis of this hearing, and through our members’ depth of expertise and unmatched team of dairy farmers and cooperative analysts, we are prepared to advance our industry’s need for these updates.”
Following USDA’s initial presentations, the hearing will then launch into discussions of specific issues placed within the scope of the hearing, including; milk composition; surveyed commodity products; Class III and Class IV formula factors; the Base Class I skim milk price; and Class I and Class II price differentials.
After the hearing’s conclusion, entities involved in the hearing then have a period of time to respond to the testimony, followed by a USDA draft decision, then more discussion, and ultimately a vote among dairy farmers on a final proposal, likely in the second half of 2024.
Because of the hearing’s complexity and the multi-step process of formulating and approving a final plan afterward, Mulhern noted that the hearing itself is far from the culmination of the process. Still, as the centerpiece of milk-pricing efforts, the next few weeks will be the most intense for public discussion of how to create a better milk-price system for dairy farmers – a moment NMPF has spent literally years waiting for.
“Though far from the final word, this national hearing stage is a critical phase that starts a foreseeable timeline for a new system to become real,” Mulhern said. “That’s exciting for our industry. It took a long time, and incredible effort, to get to where we are today. With the leadership I know our member cooperatives will provide, it can only lead to a brighter tomorrow.”
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.
USDA Sets Aug. 23 FMMO Hearing, NMPF Plan as Basis
The U.S. Department of Agriculture’s (USDA) announced plan for a hearing beginning this month on modernizing the Federal Milk Marketing Order (FMMO) system reflects the comprehensive approach to improvement carefully crafted by the National Milk Producers Federation (NMPF), an emphatically positive development for dairy farmers.
“Dairy farmers nationwide are grateful that USDA is moving forward by including the full scope of NMPF’s proposal to guide the dairy industry forward as it modernizes the Federal Milk Marketing Order system,” said Randy Mooney, a dairy farmer near Rogersville, MO, and chairman of NMPF’s Board of Directors, in a statement released July 21, the day plans for the hearing were announced.
The hearing will begin on Aug. 23 in Carmel, IN, and is expected to last several weeks. NMPF’s cooperative-led effort will be involved in every significant topic, reflecting its detailed proposal and the nationwide scope of its effort.
“This recognition of NMPF’s consensus-based leadership allows us to continue the substantial momentum for change that we’ve achieved,” Mooney said in his statement. “Each piece of our proposal, from returning to the “higher-of” Class I mover as soon as possible, to updating both Class I price differentials and manufacturing cost allowances, has been crucial toward building that consensus, and all components of our plan are critical to a successful update to this important program.
“There is still a long journey ahead toward a modernized federal order system that works better for farmers, but NMPF is ready, with co-op led efforts well under way to ensure that we are well-prepared for the FMMO hearing,” Mooney said. “We’re excited to lead this industry toward solutions that will offer benefits for everyone, and we are gratified that USDA is showing thoughtful leadership through its responsiveness and support for dairy.”
