Digest Highlights

USDA to buy fluid milk, butter in 2021

While the future of the Farmers to Families Food Box Program remains uncertain under the Biden administration, the USDA has already scheduled “Section 32” purchases of $110 million worth of dairy products for 2021.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

In an announcement on Dec. 7, the USDA said outlays would include $60 million for fresh fluid milk and $50 million for butter. Fluid milk purchases will include gallon and half-gallon containers of whole, 2% and 1% milk; butter purchases will include 1-pound packages of print salted butter.

Formal solicitations will be issued through the Web-Based Supply Chain Management (WBSCM) system.

Solicitations will be issued in December 2020 for delivery in February-March 2021, in February for delivery in April-June 2021, in May for delivery in July-September 2021 and in August for delivery in October-December 2021.

The purchases will made under the authority of Section 32 of the Agricultural Adjustment Act of 1935, which authorizes the USDA to buy surplus commodities to support prices, then distributing them through domestic nutrition programs.

Advertisement

The National Milk Producers Federation (NMPF) estimated USDA dairy product purchases totaled nearly $1.9 billion in 2020. About two-thirds of those purchases were through the Farmers to Families Food Box program, created to provide food assistance to those in need during the COVID-19 pandemic.

Going forward, some political analysts forecast the Biden administration will favor more traditional programs, such as Section 32, the Supplemental Nutrition Assistance Program (SNAP) and Women, Infants and Children (WIC) programs to distribute food assistance.

The Farmers to Families Food Box program placed a heavy emphasis on cheese, impacting cheese and Class III milk prices and resulting in some “disorderly” marketing through Federal Milk Marketing Orders (FMMOs), including depooling and negative producer price differentials (PPDs). Hypothetically, at least, these fluid milk and butter purchases should have broader impact on farmer milk prices.

CFAP 2 sign-up deadline is also Dec. 11

While the enrollment period for the 2021 Dairy Margin Coverage (DMC) program has been getting a lot of attention, the sign-up period for the second Coronavirus Food Assistance Program (CFAP 2) also closes on Dec. 11 at USDA Farm Service Agency (FSA) offices.

Created to assist farmers who saw market disruptions and losses due to the COVID-19 pandemic, direct payments (through Dec. 6) to dairy farmers for milk have topped $2.86 billion through CFAP 1 and CFAP 2. Addressing the FarmFirst Dairy Cooperative 2020 virtual district meeting, Dec. 2, Jim Mulhern, CEO and president of the National Milk Producers Federation (NMPF), estimated dairy farmer milk payments through CFAP 1 and CFAP 2 have been equivalent to nearly $2.50 per hundredweight (cwt) on 2020 milk production.

Through Dec. 6, CFAP 2 payments for milk totaled $1.08 billion. Topping the list of state’s receiving dairy payments were: Wisconsin, $210.3 million; California, $160.2 million; New York, $107.3 million; Michigan, $62.8 million; and Minnesota, $61.2 million.

  • CFAP 1 payments totaled $1.776 billion. Topping the list of state’s receiving dairy payments were: Wisconsin, $342.8 million; California, $272.9 million; New York, $166 million; Minnesota, $109.8 million; and Pennsylvania, $106.3 million. The application period closed Sept. 11; the USDA will finalize action on all CFAP 1 applications by Dec. 11.

Read: Myths debunked: Coronavirus Food Assistance Program 2 (CFAP 2).

Vilsack headed back to USDA; congressional ag leadership has emerged

Numerous organizations and news outlets are reporting Tom Vilsack, CEO and president of the U.S. Dairy Export Council (USDEC) since 2017, has been tapped as U.S. ag secretary by President-elect Joe Biden. Vilsack previously served in the top USDA post for eight years under the Obama administration. A formal nomination must be approved by the Senate.

Leadership of U.S. House and Senate committees with oversight on dairy and agricultural policy in the 117th Congress has also emerged.

In the House, U.S. Rep. David Scott (D-Georgia) will serve as Ag Committee chair, with Rep. G.T. Thompson (R-Pennsylvania) serving as ranking member. They replace outgoing chair, U.S. Rep. Collin Peterson (D-Minnesota), who lost in his reelection bid, and ranking member Michael Conway (R-Texas), who retired.

In the Senate, the top Democrat will be current ranking member, Sen. Debbie Stabenow (D-Michigan), while the top Republican will be Sen. John Boozman (R-Arkansas). Which of those two will serve as chair and ranking member will be determined after Senate runoff elections in Georgia in early January. Republicans currently hold a two-seat edge, and they’ll hold the Senate majority if one or both GOP candidates win election. However, if the two Democrats win Senate races in Georgia, the Senate would be evenly balanced at 50-50, with Vice President-elect Kamala Harris serving as president of the Senate.

House Democratic and Republican caucuses have also approved party leadership for other major committees in the 117th Congress. While final steering committee approval must still be granted, following are the list of chairs and ranking members of other committees with most direct oversight on policies affecting agriculture:

  • Appropriations (funding): Reps. Rosa DeLauro (D-Connecticut) and Kay Granger (R-Texas)
  • Natural resources/environment (water and air quality): Reps. Raúl Grijalva (D-Arizona) and Bruce Westerman (R-Arizona)
  • Judiciary (immigration): Reps. Jerrold Nadler (D-New York) and Jim Jordan (R-Ohio)
  • Ways and Means Committee (trade): Reps. Richard Neal (D-Massachusetts) and Kevin Brady (R-Texas)

Progressive Dairy will update committee makeup and leadership lists as they become available.  end mark

Dave Natzke