Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

USDA proposes amendments to Southeast regional FMMOs

We’re still waiting on a formal announcement regarding a national hearing on Federal Milk Marketing Order (FMMO) modernization proposals. However, the USDA’s Agricultural Marketing Service (AMS) has issued a recommended decision amending the Appalachian, Southeast and Florida FMMOs.

Specific details of the proposal are posted in the July 18 Federal Register. The proposed rule, along with links to submit comments, is available on the Federal Register website. Written exceptions and comments to the proposed rule must be submitted on or before Sept. 18, 2023.

In summary, the proposals seek to increase transportation credits and/or establish distributing plant and assembly performance credits, providing financial incentives for more orderly movement of milk in the region.

The proposed amendments make changes to the transportation credit balancing fund (TCBF) provisions in the Appalachian and Southeast FMMOs that would: update the components of the mileage rate calculation, revise the months of mandatory and discretionary payment, revise the non-reimbursed mileage factor and increase the maximum assessment rate on Class I milk.

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The recommended decision also proposes establishing distributing plant delivery credit (DPDC) provisions in the Appalachian, Florida and Southeast FMMOs, making marketwide service payments to qualifying handlers and cooperatives for milk shipments to pool distributing plants from farms that are year-round, consistent suppliers.

The AMS held a public hearing, Feb. 28-March 2, in Franklin, Tennessee, to consider proposals from multiple Southeastern U.S. dairy cooperatives in October-December 2022. Proponents of amending the FMMOs contended that the three Southeastern FMMO areas have a chronic milk deficit, creating challenging marketing conditions to ensure that the fluid milk needs of the orders are met.

For additional background information, read these regional summaries in the Progressive Dairy’s special 2023 "State of Dairy" editorial package: Southeast: The future hinges on marketing changes and Appalachian: Similar concerns, diverse answers

Senate bill reauthorizes, strengthens DBI

A proposal to reauthorize and strengthen the Dairy Business Innovation (DBI) Initiatives program has been introduced in the U.S. Senate.

The program, created in the 2018 Farm Bill and overseen by the USDA, established multiple dairy business and innovation centers designed to partner dairy farmers and processors to spur dairy product and market innovation. Since the program was established in 2019, DBI Initiatives have supported over $150 million in awards through regional centers across the country.

The Dairy Business Innovation Act of 2023 raises the program’s annual authorization from $20 million to $36 million. The proposal was introduced by U.S. Sens. Tammy Baldwin (D-Wisconsin) and Marsha Blackburn (R-Tennessee).

GDT index dips lower

A measure of world dairy product prices, the latest Global Dairy Trade (GDT) price index declined in an auction held July 18. Prices in individual product categories were mostly lower:

  • Skim milk powder (SMP) was down 0.6% to $2,503 per metric ton (MT, or about 2,205 pounds).
  • Whole milk powder was down 1.5% to $3,100 per MT.
  • Anhydrous milkfat was up 3.4% to $4,745 per MT.
  • Butter was down 2.7% to $4,705 per MT.
  • Cheddar cheese was down 10.1% to $3,955 per MT.

The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland).

The next GDT auction is Aug. 1.

Coming up: Organic, FDA label deadlines

  • The deadline to apply for the USDA Organic Dairy Marketing Assistance Program (ODMAP) is July 26, at USDA Farm Service Centers. The ODMAP provides a one-time cost-share payment for organic producers’ projected 2023 marketing costs based on 2022 costs and pounds of organic milk marketed in the 2022 calendar year. USDA’s Farm Service Agency (FSA) is making $104 million available to certified organic dairy operations that produce milk from cows, goats and sheep.
  • The public comment period on the FDA’s proposed guidance regarding labeling and marketing of plant-based dairy alternatives closes on July 31. The proposal, “Labeling of Plant-based Milk Alternatives and Voluntary Nutrient Statements: Guidance for Industry,” recommends that a plant-based milk alternative product that includes the term “milk” in its name, and that has a nutrient composition that is different than milk, include a voluntary nutrient statement that conveys how the product compares with milk. Comments may be submitted via Regulations.gov. The National Milk Producers Federation has also established an “advocacy alert” to assist dairy producers and others to comment.
  • Due to heavy flooding, the USDA’s FSA has extended the deadline for some 2023 crop acreage reporting requirements in all or parts of eight states in the Northeast. Affected states include Connecticut, Maine, New Hampshire, western New York, Pennsylvania, Rhode Island and Vermont. Contact a local USDA Service Center for details.

ICYMI (In case you missed it)

  • World Dairy Expo will remain in Madison, Wisconsin, through at least 2028. The new five-year contract also includes an option to extend the agreement for three additional years, through 2031. The 2023 World Dairy Expo will be held Oct. 1-6, at the Alliant Energy Center in Madison.
  • The average inflation rate for retail dairy product prices was higher in the first half of 2023 (+8.6%) compared to the first half of 2022 (+8.3%), according to the U.S. Department of Labor’s Bureau of Labor Statistics consumer price index (CPI).