National Milk expects big DMC signup as officials urge farmers to join |

National Milk expects big DMC signup as officials urge farmers to join

National Milk Producers Federation President and CEO Jim Mulhern spoke to reporters at a media briefing Monday.
Photo by Jerry Hagstrom/The Hagstrom Report

The National Milk Producers Federation expects a high rate of participation in the new Dairy Margin Coverage Program when farmer signup begins Monday, National Milk President and CEO Jim Mulhern said, but he and government officials are still urging the farmers to sign up amidst industry challenges.

“We are very pleased with the dairy title” in the 2018 farm bill, Mulhern said.

“The DMC provides a stronger safety net for America’s dairy producers, one sorely needed as low prices, trade disturbances and chaotic weather patterns combine to create hardships. We have advocated for months that margin calculations must consider the higher feed costs dairy producers pay to properly nourish their livestock. USDA’s decision to include premium and supreme quality alfalfa feed is appropriate and is another win for dairy farmers that will provide additional, crucial aid.”

Agriculture Secretary Sonny Perdue formally announced in a news release Friday that farmers can begin signing up for the DMC at their county Farm Service Agency offices on Monday.

Perdue noted that FSA personnel had met the Trump administration’s goal of making the DMC a top farm bill implementation priority.

“This new program offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer,” USDA noted in the release.

“With an environment of low milk prices, high economic stress, and a new safety net program with higher coverage levels and lower premiums, it is the right time for dairy producers to seriously consider enrolling when signup opens. For many smaller dairies, the choice is probably a no-brainer as the retroactive coverage through January has already assured them that the 2019 payments will exceed the required premiums,” Perdue said.

Mulhern said at the news conference that farmers need the program because “This is the fifth year of low prices. The last good year was in 2014.”

The new program replaces the Margin Protection Program, which was created in the 2014 farm program, but which most farmers found not worthwhile.

In a release, National Milk said, “Producers may cover up to their first 5 million pounds of annual milk production (equivalent to the production of a 200-cow dairy farm) at a margin of up to $9.50 per hundredweight. Payments under the program will be retroactive to Jan. 1.”

“Calculations already made for the first four months of the year show that producers signing up at the $9.50 level would receive payments for each of the year’s first four months, with total payments well over the already-set annual premium. All producers will be able to access this affordable coverage regardless of size, and larger producers will have access to significantly more affordable $5 catastrophic-type coverage.”

Mulhern said the program will be most valuable to smaller producers, while it will be “basic” for larger producers.

In a news release, House Agriculture Committee Chairman Collin Peterson, D-Minn., and House Agriculture Livestock and Foreign Agriculture Subcommittee Chairman Jim Costa, D-Calif., both urged farmers to sign up.

“The purpose of the Dairy Margin Coverage program is to ensure dairy farmers have an adequate safety net when they need it,” Peterson said.

“We put this program together in the farm bill to enable farmers to get their revenue from the market in those years when the milk price is up, but still provide a backstop in the event that milk prices come down or feed costs go up. I’ve said it before and I’ll say it again: dairies should sign up their first 5 million pounds of production history at the $9.50 coverage level. I know times are tough, but this program is going to provide some real help.”

“Dairy farmers were on our minds throughout the entirety of the farm bill process,” Costa said.

“Now that the program is being implemented, it is my goal to get information out to producers on Dairy Margin Coverage, as well as the other risk management tools available as soon as possible. DMC improves on the old Margin Protection Program in a number of ways including making it clear that all operations can enroll up to 5 million pounds of production history in tier one, regardless of their overall farm size. DMC also effectively improves catastrophic coverage by setting $5 margin protection at only half a cent per hundredweight, no matter how much production history is enrolled.”

Campaigns against plant-based products, for exports

At the news conference, Mulhern said National Milk will continue its campaigns to convince the Food and Drug Administration not to allow plant-based products to use dairy terms such as milk and yogurt and to improve conditions for dairy exports.

Mulhern said the departure of FDA Commissioner Scott Gottlieb “probably slowed things down a bit” but that National Milk will continue “pushing” the labeling issue with FDA “until we get resolution”

He noted that the Dairy Pride Act, which would require FDA to take action, has been introduced in Congress.

He maintained the big issue for National Milk is not sales but the nutritional difference between dairy products and plant-based products.

Mulhern said that 65 million gallons of dairy milk is sold each week compared to 6 million gallons of the “fake stuff,” as he refers to products such as soy and almond milk.

While per capita consumption of fluid milk has declined over time, cheese and butter consumption has risen so much that total milk consumption has risen four of the past five years, he said.

Mulhern said National Milk finds President Donald Trump’s use of tariffs in international negotiations “very concerning.” The group has urged Congress to approve the U.S.-Mexico-Canada Agreement on trade both to restabilize the market with Mexico and to improve access to Canada.

He said National Milk was “very pleased” that the Office of the U.S. Trade Representative has begun the process of terminating the preferential trade status granted to India on the grounds India failed to provide “equitable and reasonable access to its market” and comply with other provisions of the statute.

“It was the exact right move for USTR to proceed with that,” Mulhern said.


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