Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

2023 DMC enrollment period is Oct. 17-Dec. 9

Editor's note: This article has been updated to correct the closing date for 2023 DMC enrollment period.

Fresh off the first Dairy Margin Coverage (DMC) program indemnity payments of the year, the enrollment and coverage election period for the 2023 DMC program will be held Oct. 17-Dec. 9, 2022, through Farm Service Agency (FSA) offices.

As in previous years, producers will need to certify to commercially marketing milk, pay the $100 administrative fee and sign the DMC contract.

If a dairy operation enrolls in 2023 DMC and has 2022 DMC unpaid premium fees or unpaid receivables for regular or supplemental premium fee debt, 2023 enrollment will not be approved until the 2022 premium debt is satisfied.

Advertisement

For dairy operations that established supplemental production history and enrolled that production under Supplemental DMC in 2022, that supplemental production history will be included on the 2023 DMC contract. 

For additional information on payment premium options, contact your county or regional FSA office.

Farm bill dairy provisions reviewed

Work on the next farm bill has started during a period of volatility on every front – political, economic, weather and beyond – notes Daniel Munch, economist with the American Farm Bureau Federation (AFBF). 

As discussions ramp up for the 2023 Farm Bill, understanding the history of existing dairy programs and how they’ve performed under unprecedented volatility will allow for more informed recommendations, Munch said.

Writing in a recent AFBF Market Intel report, Munch provides a summary of several dairy programs, including:

  • Dairy Margin Coverage (DMC)
  • Dairy Forward Pricing Program (DFPP)
  • Dairy Indemnity Payment Program (DIPP)
  • Milk Donation Reimbursement Program (MDRP)
  • Dairy Donation Program (DDP)
  • Dairy Business Innovation (DBI) Initiatives

For more information, read “Overview of Dairy Programs in the Farm Bill.” 

California, New York approve farm labor laws

Recent state labor law developments have the potential to impact farmers in terms of production costs and the adaptation of technology and automation.

In New York, Department of Labor Commissioner Roberta Reardon issued an order accepting the recommendation of the Farm Laborers Wage Board that lowers the current agricultural employee 60-hour threshold for overtime pay to 40 hours per week over a 10-year period. The phase-in schedule will begin Jan.1, 2024, with the threshold set at 56 hours, and reduced four hours each in 2026, 2028, 2030 and 2032, reaching 40 hours in 2032.

In California, Gov. Gavin Newsom signed Assembly Bill No. 2183, legislation proponents say will intends to make it easier for farmworkers to vote in union elections. It allows farmworkers, beginning in 2023, to vote either at a physical location or by dropping off a ballot card at the Agricultural Labor Relations Board office, a process known as a “card check.”

For more on the regulatory impact and adaptation of dairy automation, read, “Effects of state agriculture overtime laws on dairy automation,” by Progressive Dairy Editor Kimmi Devaney.

GDT product prices decline

The latest Global Dairy Trade (GDT) auction saw the overall price index drop 3.5%, reversing a two-event increase. Average prices in individual product categories were all lower in the Oct. 4 auction, including:

  • Skim milk powder was down 1.6% to $3,497 per metric ton (MT, or about 2,205 pounds).
  • Whole milk powder was down 4% to $3,573 per MT.
  • Butter was down 7% to $4,983 per MT.
  • Cheddar cheese was down 3.8% to $4,966 per MT.
  • Anhydrous milkfat was down 1.7% to $5,811 per MT.

The GDT platform offers dairy products from six global companies: Fonterra (New Zealand), Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland). The next GDT auction is Oct. 18.

Ag producer sentiment drifts lower

Both current and future economic outlooks among U.S. farmers weakened in September, according to results of the monthly Purdue University/CME Group Ag Economy Barometer survey. Survey respondents, weighted toward corn and soybean producers, cited both costs and availability of inputs and higher interest rates for the cloudier outlook.

The Ag Economy Barometer provides a monthly snapshot of farmer sentiment regarding the state of the agricultural economy. The survey collects responses from 400 producers whose annual market value of production is equal to or exceeds $500,000. Minimum targets by enterprise are as follows: 53% corn/soybeans, 14% wheat, 3% cotton, 19% beef cattle, 5% dairy and 6% hogs. Latest survey results, released Oct. 4, reflect ag producer outlooks as of Sept. 19-23.

When asked to look ahead to 2023, the largest share (38%) of producers responding to the survey expect input prices to rise from 1% to 9% compared to 2022 prices. Meanwhile, nearly a fourth (24%) of producers expect input prices to rise from 10% to 19%, and 9% of survey respondents said they expect an input price rise of 20% or more, said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture.

Producers continue to indicate now is not a “good time” to make large investments in their farming operations, citing increasing prices for farm machinery and new construction as well as higher interest rates. Despite that negative perspective, fewer producers plan to reduce their farm machinery purchases.

This month’s survey included a series of questions to understand producers’ cover crop usage. Nearly six out of 10 (57%) respondents said they currently plant cover crops on a portion of their farmland, while approximately one in four producers said they have never planted a cover crop.