In this column, Progressive Dairy summarizes issues in the news and attempts to describe how they might affect dairy farmers. Look for more extensive background, details and updates on the Progressive Dairy website.
Items in this column are compiled from Progressive Dairy staff news sources. Send news items to Progressive Dairy Editor Dave Natzke.
DAIRY MARGIN COVERAGE PROGRAM
What happened?
Dairy producers can now enroll and make coverage elections under the Dairy Margin Coverage (DMC) Program for 2023, through Dec. 9, at USDA Farm Service Agency offices. (An initial USDA press release, widely reported, erroneously indicated the enrollment period would close on Dec. 7.)
What’s ahead?
Producers will need to certify to commercially marketing milk, pay the $100 administrative fee and sign the DMC contract, selecting the annual milk volume and coverage level for the year.
Recent adjustments to DMC continue in effect in 2023. Small and mid-sized dairies can enroll in the Supplemental DMC and adjust annual milk production histories to 2019 levels, up to the 5-million-pound Tier I cap. Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023.
Producers who did not enroll in Supplemental DMC last year should complete that enrollment before enrolling in the 2023 general DMC program. For producers who enrolled in Supplemental DMC in 2022, the supplemental coverage will automatically be added to the 2023 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.
Bottom line
The August 2022 DMC margin was $8.08 per cwt, down $1.84 from July and the first month the margin fell below the top Tier I insurable level of $9.50 per cwt in 2022, triggering indemnity payments estimated at $47.9 million to more than 17,000 dairy operations.
The September 2022 DMC program margin will be announced on Oct. 31, after Progressive Dairy’s deadline. Based on margin estimates on Oct. 13, substantial indemnity payments are projected for September milk marketings, with smaller payments possible through the end of the year. The September margin was expected to fall to $7.68 per cwt, triggering indemnity payments at $8, $8.50, $9 and $9.50 cover levels. Margins for the final four months of 2022 were estimated as follows: October – $9.19 per cwt; November – $9.36 per cwt; and December – $8.69 per cwt.
Margin forecasts have not been calculated for 2023.
FEDERAL MILK MARKETING ORDERS
What happened?
Federal Milk Marketing Orders (FMMO) were the focus of multiple meetings in October, with more to come.
Also in late September, several members of the U.S. Senate called for the U.S. Government Accountability Office (GAO) to review the FMMO program, asking for an investigation into whether it was being administered in a manner that accounts for the interests of smaller-scale operations.
What’s ahead?
Meeting in early October, the National Milk Producers Federation’s (NMPF) Economic Policy Committee examined its FMMO Task Force recommendations but didn’t approve them all, awaiting additional financial analysis. Following a review of that analysis, the Economic Policy Committee will then seek to vote on final recommendations that, if approved, could be presented to the NMPF board of directors annual meeting, held in late October, after Progressive Dairy’s deadline. If approved there, the NMPF recommendations could be the foundation for an official petition for the USDA to hold a formal FMMO hearing.
During an FMMO panel discussion held during World Dairy Expo, Dana Coale, deputy administrator of the USDA Agricultural Marketing Service Dairy Program, said she anticipated a petition for a national hearing will probably come in the first half of 2023. The layers of potential topics, however, complicate the timeline moving forward.
Following receipt of an initial proposal, it will be up to USDA Secretary Tom Vilsack to determine the scope of any hearing, including issuing a call for additional proposals, collecting evidence and establishing timeline provisions to take both oral and written testimony. That will likely be followed by preliminary rulemaking, additional comment periods on proposals, final rulemaking and a producer referendum.
Bottom line
Two of the most heated topics – depooling and producer price differentials (PPDs) – aren’t likely to be part of a national hearing, according to other members of the World Dairy Expo panel.
Jim Sleper, managing partner of Sleper Consulting LLC, who is overseeing NMPF’s FMMO Task Force, said those hot-button topics were regional issues separate from the national discussion, and should be handled within individual FMMOs. NMPF is looking at ways to modernize FMMOs to diminish the impact on PPDs and depooling, Sleper said.
As a “referee” in FMMO discussions, Coale agreed those topics should be left to individual orders.
AFBF DAIRY POLICY PRIORITIES
Separate from any FMMO hearing, the American Farm Bureau Federation has released its 2023 Farm Bill policy priorities. Specific to dairy, those priorities include:
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DMC program: Retaining the current DMC program with supplemental and feed cost updates; increasing the 5-million-pound annual milk production limit for Tier 1 coverage; and updating production averages to a three-year rolling average, or current production, for payment calculations.
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FMMOs: Add transparency to milk checks, including listing the percentage of pooled and depooled milk by each processor, and PPD calculations. Modify block voting flexibility within co-ops on FMMO referendums, allowing farmers to vote independently unless a farmer opts out after being given notice of a referendum; and eliminating provisions on a “no” vote on a referendum causing elimination of the entire FMMO.
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Safety nets: All federal dairy margin/income insurance programs should take into consideration negative PPDs to ensure that farmers actually receive the margin they insured.
- Fluid milk: Promote whole milk for distribution through federal school, nutrition assistance and U.S. military programs; and oppose any regulations or legislation that will ban or limit flavored milk in schools.
Here’s some other news you’ll find on Progressive Dairy’s website:
EPA AND CAFO WATER REGULATION
A broad coalition of environmental organizations has filed a lawsuit to compel the U.S. Environmental Protection Agency (EPA) to move forward on manure and water quality regulation of concentrated animal feeding operations (CAFOs). The lawsuit, filed Oct. 7, in the Ninth Circuit Court of Appeals, follows a 2017 rulemaking petition asking EPA to overhaul its regulations and permitting system for CAFOs under the federal Clean Water Act (CWA).
The Ninth Circuit Court of Appeals is headquartered in California. Petitioners in the lawsuit include: Food & Water Watch, Center for Food Safety, Dakota Rural Action, Dodge County Concerned Citizens, the Environmental Integrity Project, Helping Others Maintain Environmental Standards, Institute for Agriculture and Trade Policy, Iowa Citizens for Community Improvement, Kewaunee CARES, Midwest Environmental Advocates and the North Carolina Environmental Justice Network.
NEW FORM I-9 FORMS COMING
The U.S. Citizenship and Immigration Services (USCIS) issued an alert instructing employers to continue using the current Form I-9 to verify the identity and employment authorization of employees until further notice. Current forms were due to expire on Oct. 31. According to the alert, the U.S. Department of Homeland Security will publish a Federal Register notice to announce the new version of the Form I-9 once it becomes available.
