Digest highlights
- August-September DMC payments near $85 million
- WCMA endorses FMMO improvement provisions
- Western organic dairies seek financial assistance
August-September DMC payments near $85 million
Dairy Margin Coverage (DMC) program indemnity payments on August and September 2022 milk marketings enrolled in the program are estimated at about $84.6 million, according to the latest update from the USDA’s Farm Service Agency (FSA).
The August DMC margin was $8.08 per hundredweight (cwt), triggering indemnity payments at $9.50, $9 and $8.50 per cwt coverage levels. The September DMC margin was $8.62 per cwt, triggering indemnity payments for Tier I producers covered at the $9 and $9.50 per cwt levels.
Wisconsin led all states in August-September DMC indemnity payments at $19.2 million. That was followed by: California – $8.4 million, Minnesota – $7.6 million, New York – $7.1 million and Pennsylvania – $6.5 million. All payments are subject to a 5.7% sequestration deduction.
The October DMC margin and potential indemnity payments will be announced Nov. 30.
Dairy producers can enroll and make 2023 DMC coverage elections through Dec. 9 at FSA offices.
WCMA endorses FMMO improvement provisions
In late October, leadership of the National Milk Producers Federation (NMPF) unanimously endorsed a proposal to modernize the Federal Milk Marketing Order (FMMO) milk-pricing system.
Read: Weekly Digest: NMPF endorses FMMO modernization provisions
Also in late October, the Wisconsin Cheese Makers Association (WCMA) board of directors approved concepts to improve and reform pricing provisions from a processor perspective. WCMA endorsed four provisions for consideration in a FMMO hearing:
- Adoption of make allowances for milk price formulas, utilizing cost data from regular mandatory USDA dairy plant audits
- Examine alternatives to cheddar block and barrel cheese pricing to determine the value of protein in the Class III milk price
- Examine alternatives to dry whey to determine the value of other solids in the Class III milk price
- Maintain depooling and repooling provisions in individual FMMOs
Two additional provisions would require congressional action outside of the FMMO hearing process:
- Permanent adoption of the Dairy Forward Pricing Program
- Expand funding for staffing and services provided by USDA’s Agricultural Marketing Service to improve the scope of and industry participation in the National Dairy Product Sales Report, as well as to execute mandatory dairy plant cost of production audits
Western organic dairies seek financial assistance
Members of the newly formed Western Organic Dairy Farming Crisis Coalition are seeking help in getting emergency drought relief assistance for organic dairy farmers.
The coalition created an online petition, asking the public to join in asking USDA Secretary of Agriculture Tom Vilsack, California Food and Agriculture Secretary Karen Ross and other Western U.S. governors to take steps to assist organic dairy producers. Potential steps include targeted state and federal funding to offset the feed price premiums for organic hay and grain, as well as the purchase of products from local organic dairy farms.
Petition organizers said the cost of production for organic milk could reach up to $42 or more per cwt, well above the average pay price range of $29-$35 per cwt. Some organic farms reported a 50% increase in off-farm feed costs, with organic alfalfa hay prices rising from $350 per ton in January 2020 to $475 per ton in October 2022. The high cost and limited availability of organic hay could force up to 15% of the organic dairy farms in California to close.
Several organic dairies expect financial losses to average $250,000 this year, with losses growing in 2023 if the drought and inflation continue.
The coalition includes Western organic dairy producers and brands, local government, feed suppliers and local farm bureaus – Straus Family Creamery, Clover Sonoma, Cowgirl Creamery, Alexandre Family Farm, Darigold (Northwest Dairy Association), Mount Rainier Creamery, Neutral, Organic West Milk, Rumiano, Organic Farmers Association, Western Organic Dairy Producers Association, California Certifiers of Organic Farmers (CCOF), County of Marin and Sonoma County Farm Bureau.
