Although federal dairy safety net programs have been strengthened, efforts to change dairy policy affecting milk pricing and production have not ended. After a hard winter saw a high number of dairy farm exits, policy meetings and proposals are emerging this spring. 
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Dave Natzke
Editor / Progressive Dairy

The three-pronged federal dairy safety net is substantially stronger than a year ago:

  • Enrollment for the 2018 Farm Bill’s Dairy Margin Coverage (DMC) program – which replaces the Margin Protection Program for Dairy (MPP-Dairy) – is set to begin in June, and indemnity payments are already assured, starting in July. 

  • As of March 18, milk volume covered under the Dairy Revenue Protection (Dairy-RP) program, launched last October, has reached nearly 20 billion pounds.

  • And, a federal budget bill signed in March 2018 eliminated the $20 million federal funding cap for the Livestock Gross Margin (LGM) program, including LGM-Dairy.

While those programs provide dairy farmers with milk income and/or margin insurance, they don’t fundamentally change the structure of the milk price or production landscape.

National Farmers unveils two-tier pricing proposal

The National Farmers Organization is proposing a new federal dairy policy that officials say will help keep more family dairy farmers in business. National Farmers unveiled its “Structured Dairy Pricing” proposal at its recent annual convention, March 11-13, in West Des Moines, Iowa.

National Farmers director of dairy sales, Dick Bylsma, who grew up on a Wisconsin dairy farm and has background in the Federal Milk Marketing Order (FMMO) system as well as with fluid milk and cheese processing companies, said the proposal stems from a growing concern over the loss of 94 percent of U.S. “family” dairy farms over the past five decades, from 670,000 dairy farms in 1970 to less than 40,000 in 2019. Citing that significant loss and consolidation of dairy farms across the U.S., along with persistently lower prices over the past four years, he said the program would “level the playing field” between small and large dairy farms.

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The proposal would not change the way milk’s four classes are currently used in calculating FMMO prices. It would, however, change the way money pooled on the FMMO system would be distributed, allocating funds to dairy farmers at two tiers based on milk marketing volume.

Under the proposal, once the FMMMO blend price is established, each dairy farmer would receive a premium of approximately $4 per hundredweight on the first tier of production, set at 1 million pounds of milk marketed each month. The remaining amount of money pooled on the FMMO each month would be equally allocated on a per hundredweight basis for the rest of the milk pooled that month.

“It would change the way we allocate the money collected for the milk we sell now, “Bylsma said. “We’re reallocating it to the farmers to address the difference in costs between a smaller farmer and a large dairy farmer.”

The program would require all milk marketed in the U.S. to be pooled on a FMMO or ideally, creation of a single, national FMMO. Given the necessary changes in the FMMO system, Bylsma said the changes would likely require congressional action.

Bylsma said the program would not change FMMO administrative costs nor does it increase costs to consumers.

“We believe our program offers a solution to help keep the family-sized dairy in business and makes our industry, our rural communities and our food supply better,” Bylsma said. “We know that there’s going to be some opposition to it because very large farmers will get a little bit less for their milk. But it evens the playing field.”

Dairy Together Roadshow scheduled

A “Dairy Together Roadshow,” organized by the Wisconsin Farmers Union, is being held at locations in seven states in late March through early May.

Dates and locations include:

  • March 27, Oshkosh, Wisconsin
  • March 28, Cortland, New York
  • April 2, Eau Claire, Wisconsin
  • April 3, Brattleboro, Vermont
  • April 4, Platteville, Wisconsin
  • April 9, St. Johns, Michigan
  • April 16, Greenwald, Minnesota
  • April 29, Modesto, California
  • May 2, Clovis, New Mexico

Click here or call (715) 723-5561 for a detailed schedule and to RSVP.

A Wisconsin Farmers Union proposal, the Dairy Price Stabilization Act, is one of more than 20 proposals growing out of a meeting held last August in Albany, New York. That and other proposals are available for download or comment. Read also: Time short for supply management action, but could tariff payout provide ‘diversion’?

Economists, policy analysts to meet

A national workshop for dairy economists and policy analysts will be held April 30-May 1 in Grand Rapids, Michigan. The 25th annual workshop is titled: “Up? Down? Sideways? What Direction for Dairy!”

Chairs of the workshop are dairy economists Andrew Novakovic, Cornell University, and Mark Stephenson, University of Wisconsin – Madison.

Topics and presentations include:

  • dairy markets and their impact on dairy farm structure and production impacts, as well as the impacts on logistics and consumer perceptions.

  • recent innovations in milk production and marketing for producers, processors and marketers.

  • panels of international dairy experts will share outlooks for milk production, dairy sales and prices over the next one to three years and major technological, consumer or policy challenges, and opportunities over the next five to seven years.

  • a panel of U.S. dairy experts will share outlooks for export markets.

The event includes an optional tour of a new and innovative processing plant and a Michigan dairy farm.

Registration fee for the workshop is $380, application deadline is April 26.  end mark

Dave Natzke