Digest Highlights: MPP-Dairy has late-filing provision. McCarty, VanTilburg families form Ohio dairy partnership. NMPF targets dairy imitation products. Despite hurricane damage, cottonseed supplies should be ample. Find a summary of these stories and updates on previous Progressive Dairyman news stories here.
MPP-Dairy: Late filing an option
Dairy farmers have until Dec. 15, 2017 to make 2018 Margin Protection for Dairy (MPP-Dairy) decisions. As in previous years, they can decide to enroll in the program and select the milk-income-over-feed-cost margin coverage, as well as the percentage of milk to be covered. For the 2018 program year only, they can also decide to opt out of the program.
There’s one other lesser-known option to participate in MPP-Dairy, with limited coverage: late filing. Cindy Walters, agricultural program specialist with Pennsylvania’s USDA Farm Service Agency (FSA), described the late-filing process and limitations during a recent Center for Dairy Excellence “Protecting Your Profits” conference call.
USDA allows late filing for an MPP-Dairy program year, so farmers could sign up for 2018 participation until Oct. 31, 2018. However, the late-filing provision only allows participation at the catastrophic level, providing protection at the $4 per hundredweight (cwt) margin level. And, late filing does not provide protection retroactively. If a farmer files for 2018 MPP-Dairy in July 2018, he/she would not receive any payment for the January-February, March-April of May-June MPP-Dairy pay periods, even if the margin falls below $4 per cwt at any time during the first six months of the year.
Although current forecasts don’t foresee margins falling anywhere near that level, Alan Zepp, risk management program manager at Pennsylvania's Center for Dairy Excellence (CDE), said late filing does provide an additional option in case of a “black swan” event (an unforeseen dramatic decline in margins).
One other factor determines if a dairy farmer can file late for MPP-Dairy: They cannot be enrolled in Livestock Gross Margin for Dairy (LGM-Dairy), a separate margin insurance program administered through the USDA’s Risk Management Agency. Participating in both federal programs remains prohibited.
Looking ahead, producers who opt out of 2018 MPP-Dairy coverage (and don’t late file for MPP-Dairy) will be eligible to purchase LGM-Dairy coverage beginning with the Nov. 24-25, 2017 sales period, with margin coverage beginning in January 2018. This allows farmers to transition from MPP-Dairy to LGM-Dairy without a lapse in coverage, and will ensure coverage under both programs does not overlap.
McCarty, VanTilburg families form partnership
Two fourth-generation dairy farm families, McCarty Farms and VanTilburg Farms, are partnering to build a new dairy in Mercer County, Ohio that will produce milk to fulfill demand for Dannon dairy products.
McCarty Farms has dairies located near Rexford, Bird City and Scott City, Kansas, and Beaver City, Nebraska. The four sites house 8,200 milking cows producing about 248 million pounds of milk annually. Under a business arrangement with Dannon, the McCartys are the sole supplier for fresh milk at Dannon’s yogurt plant in Fort Worth, Texas.
VanTilburg Farms, Celina, Ohio, is a multi-faceted farm business, producing grain and operating a commercial grain elevator. In addition, the business provides agricultural supplies and services in northwestern Ohio, including custom fertilizer and chemical application, poultry litter, soil sampling, crop insurance, trucking and excavation.
Plans call for a spring 2018 opening of MVP Dairy, an 82-acre site located in northern Mercer County, adjacent to Hasis Road and the south side of U.S. Route 33. It will house 4,500 cows in six barns and include a carousel parlor and anaerobic manure treatment cell system.
NMPF targets ‘Blue Magic’
The National Milk Producers Federation (NMPF) called on federal and state food regulators to take enforcement action against “Blue Magic Cashew Milk.”
In a letter to the U.S. Food and Drug Administration (FDA) and California Department of Food and Agriculture (CDFA), NMPF said that the use of “milk” on a plant-based imitation is a violation of standards defining milk as the product of a dairy animal.
“Beyond ignoring clearly-defined regulations specifying what milk is, this ‘Blue Magic’ product is an affront to consumers seeking appropriate levels of nutrition for their families,” said Jim Mulhern, NMPF president and CEO. “It’s obvious that this beverage is not a nutritional substitute for real milk, regardless of its desire to co-opt dairy terms.”
NMPF first evaluated Blue Magic Milk, manufactured by Californian company Urban Remedy, in June 2017 as part of a marketplace survey examining the nutrients in imitation dairy foods. NMPF found that of the 244 beverages it reviewed, Blue Magic’s two-cup serving contained the highest sodium content, grams of fat and calories.
NMPF’s action is part of a new, recurring campaign calling attention to other food brands that label their products using dairy terminology. The campaign includes a gallery of imitation dairy products on its website.
Changes proposed to Wisconsin co-op statute
A Wisconsin legislative proposal to change a state statute governing cooperatives was the subject of a committee hearing in late September.
If passed, the proposed revisions would allow cooperatives to have increased flexibility in how their cooperative operates, according to John Manske, Cooperative Network’s senior government affairs director.
Provisions included in the Cooperative Statute Modernization Bill (AB 353 and SB 281) would be the first significant proposed changes to the statute (Chapter 185) in more than 30 years. The proposal includes the following:
• Allows the option to appoint outside experts to a cooperative’s board. No more than 20 percent of the total board seats or two individuals – whichever is less – could be selected by the elected board members.
• Gives cooperative holding companies the ability of approving voting based on patronage. The provision only applies to cooperative holding companies, of which there is only one in Wisconsin: Cooperative Resources International. The holding company would have to receive approval from their member delegates in order to implement this change. This provision will have no impact on traditional, one-member, one-vote cooperatives.
• Removes an 8 percent cap on dividends. Removing the cap on dividends applies to all membership capital, thus allowing co-ops to give higher profits back to the member-owners they serve in good years, rather than being forced to keep earnings.
CMAB launches food bank milk drive
The California Milk Advisory Board (CMAB) unveiled a social media campaign designed to provide 4,000 gallons of milk to food banks serving families affected by recent hurricanes Harvey and Irma.
The campaign asks people to post a photo of a dairy product (cheese, yogurt, cottage cheese, butter, ice cream) showing the Real California Milk seal on Facebook or Instagram using the hashtag #SealsForGood. The campaign runs through Dec. 31.
For each qualifying post, $5 – representing a gallon of milk – will be donated to the Great American Milk Drive (up to $20,000 total) through Feeding America to provide vouchers for fresh milk to families in need in Florida and Texas.
Milk is one of the most-requested staples at food banks, but among the least donated, according to CMAB. On average, people served by food banks receive the equivalent of less than 1 gallon per person per year.
Progressive Dairyman updates
Updates on articles appearing previously online and in print:
• MPP-Dairy changes in the fiscal year budget
MPP-Dairy changes inserted in a Senate spending bill await approval, but the changes are not entirely what proponents sought, according to the Minnesota Milk Minute, a weekly enewsletter from the Minnesota Milk Producers Association (MMPA).
Read: Senate appropriations proposal may jump-start MPP-Dairy changes
University of Minnesota dairy economist Marin Bozic said the changes will lower MPP-Dairy premiums for dairy operations covering less than 5 million pounds of milk production annually, and change MPP-Dairy margin payment calculations to monthly, instead of six times per year. In addition, the bill changes the hay price factor in feed cost calculations to include Premium quality hay, recognizing the higher-quality hay required in dairy cow rations.
What is not changed, however, is an adjustment in the overall feed cost calculations proposed by the National Milk Producers Federation (NMPF) and others. Those changes would have effectively increased feed costs used in margin calculations by about 10 percent, as proposed in the original MPP-Dairy program developed in 2012.
Separate from 2018 Farm Bill discussions, the changes were included in a Senate agricultural appropriations bill for fiscal year 2018, approved in committee and by the full Senate. The fiscal year 2018 federal spending package must be approved by the House, but a continuing resolution pushed congressional budget action into December. Fiscal year 2018 started Oct. 1, 2017.
• Minnesota delegation seeks expanded margin insurance option
Minnesota’s congressional delegation joined a previous request from counterparts in the Northeast in asking USDA Secretary Sonny Perdue to improve income insurance options for dairy farmers.
Read: Weekly Digest: Lawmakers urge USDA to improve dairy income insurance options
U.S. Sens. Amy Klobuchar and Al Franken and U.S. Reps. Collin Peterson, Tim Walz, Rick Nolan and Tom Emmer asked Perdue to take the necessary steps to make milk a separate agricultural commodity eligible for coverage under the Federal Crop Insurance Program administered by the USDA Risk Management Agency (RMA).
Under the current RMA program, Livestock Gross Margin for Dairy (LGM-Dairy) is lumped with several other commodities, sharing limited available federal funds. In 2015, LGM-Dairy exhausted all funding and required supplemental funding.
• Despite hurricanes, cottonseed supply, prices should be favorable for dairy
Despite hurricane-related crop losses in Texas and Georgia, there should be ample supplies of cottonseed at favorable prices for dairy feed, according to Cotton Incorporated.
USDA’s estimate of the 2017 cottonseed harvest will be updated on Oct. 12, but current estimates forecast the largest crop since 2007.
While southern and rolling plains regions of Texas suffered significant losses and quality degradation due to Hurricane Harvey, the 41-county Texas High Plains is expected to yield one of the largest cotton crops in history. That area produces two-thirds of the Texas cotton crop and about 30 percent of the nation’s crop each year.
With plentiful cottonseed in the pipeline, cottonseed prices look favorable for dairy farmers, said Darren Hudson, professor of agricultural and applied economics at Texas Tech University, Lubbock, Texas.
After the hurricane-related bump in September, prices are expected to slide. Some large companies have placed large orders for delivered cottonseed, effectively placing a floor on the market. With sufficient sales orders, ginners may store seed hoping for better prices in 2018. Others are actively marketing in anticipation of further price declines at the gin level, according to Nigel Adcock with Cottonseed LLC.
Recent USDA National Ag Statistics Service weekly crop progress reports indicate 60 percent of the cotton crop is in good to excellent condition, with harvest of the new crop slightly ahead of the five-year average. Reports regarding old-crop seed availability vary.
Tom Wedegaertner, director of cottonseed research and marketing, Cotton Incorporated, suggests producers get in touch with their cottonseed merchant or feed dealer to check prices, or submit a request for cottonseed quotes through its Cottonseed Marketplace.
• FAQ: California stand-alone quota plan
A document with answers to “frequently asked questions” regarding California’s quota implementation plan has been posted to the California Department of Food and Agriculture (CDFA) website.
The plan was created by the state dairy Producer Review Board (PRB) and approved by CDFA secretary Karen Ross. The plan is seen as a necessary step to gain support for California’s entry into the federal milk marketing order (FMMO) system. It must now be approved in a dairy producer referendum. Ballots are expected to be mailed to Californian dairy farmers in the next few weeks.
The stand-alone quota program would be administered by CDFA, but only if California’s dairy producers also vote to join the FMMO system. 
PHOTOS: While the hurricane season has devastated some cotton-growing regions, reports show ample, quality cottonseed from the dominant cotton-producing Texas High Plains area. Photos by Dwight Jackson.
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