Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Petition seeks higher transportation credits in southeastern U.S. FMMOs

The USDA’s Agricultural Marketing Service (AMS) has received a formal proposal to amend intermarket transportation credits in the Appalachian and Southeast Federal Milk Marketing Orders (FMMOs) and adopt new provisions to establish distributing plant delivery credits in the Appalachian, Southeast and Florida FMMOs. 

The proposal was submitted on behalf of the Dairy Cooperative Marketing Agency (DCMA), which represents nine cooperatives supplying milk in the region. The proponents contend the three Southeastern FMMO areas have a chronic milk deficit to meet the needs of population growth, creating challenging marketing conditions. Further, they contend that intermarket transportation credits in the Appalachian and Southeast orders and distributing plant delivery credits in the Appalachian, Southeast and Florida orders will incentivize more orderly movement of milk in the southeastern U.S.

According to the information supporting the petition, annual milk production in 11 states in the southeastern U.S. declined by nearly 4 billion pounds (32%) between 2006 and 2021. The number of dairy farms licensed to sell milk in the region declined by 2,739 (-64%) over the same period.

With fewer producers and less milk, the petition cites longer distances and higher hauling costs from farm to plant, with higher costs primarily falling on the members of the DCMCA cooperatives. The longer hauls have been exacerbated the costs of balancing the needed supplies for Southeastern order distributing plants. 

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The USDA is considering initiation of a rule-making proceeding on the proposal. Additional proposals will be accepted until Dec. 19. Tentatively, a hearing could be held in late February.

USDA publishes ‘cattle contracts library’ rule

The USDA published a final rule to secure beef packer contract information needed to populate a Cattle Contracts Library. 

The rule will require large packers – those slaughtering an average of not less than 5% of the number of fed cattle slaughtered nationally during the preceding five calendar years – to submit contractual information for the purchase of cattle.

The Consolidated Appropriations Act of 2022 directed the USDA’s AMS to create a Cattle Contracts Library Pilot Program to increase market transparency for cattle producers. 

The rule, which goes into effect on Jan. 6, 2023, requires reporting of contractual information and volumes purchased against the contracts, including: supplemental information on cattle requirements; associated schedules of premiums and discounts; delivery and transportation terms and payments; appendices and agreements of financing, risk-sharing or profit sharing; or other financial arrangements associated with such contracts, whenever new contracts are offered or existing contracts are updated.

The USDA AMS expects to have a working pilot in early 2023, with plans to hold an industry briefing and producer education sessions through webinars, meetings and other opportunities.

Other news, briefly

  • Rail strike averted: President Joe Biden signed legislation to avert a national rail strike. Agricultural organizations, including the National Milk Producers Federation (NMPF), had called for federal intervention because of the heavy dependence of agriculture on rail service.
  • Livestock hauler hours-of-service exemption denied: The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) denied a request to exempt truckers hauling live animals from federal hours-of-service mandates.
  • Renewable fuels: The EPA issued a multipart proposal to expand the Renewable Fuel Standard (RFS) Program, setting and increasing biofuel volume targets for 2023-25. The EPA will hold a virtual public hearing on Jan. 10, 2023. 
  • California water allocations: The California Department of Water Resources announced an initial allocation of just 5% of requested 2023 water supplies from the State Water Project. Listen to a NMPF Dairy Defined podcast featuring Geoff Vanden Heuvel, director of regulatory and economic affairs for the California-based Milk Producers Council, discussing the California water crisis and its impact on dairy, recorded earlier this fall.
  • Biosecurity manual: The FARM Program released the first everyday biosecurity manual. The manual outlines small, routine steps dairy farmers can take to protect the health of their herds and employees. Funded through USDA’s National Animal Disease Preparedness and Response Program (NADPRP), FARM Biosecurity focuses on increasing awareness of biosecurity throughout the dairy industry by providing practical and effective steps to further promote cattle health.