LEGISLATIVE WATCH

USDEC and NMPF applaud USDA, DOT

Strong message of support for agricultural exporters

On behalf of dairy farmers and manufacturers across the country, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) praised the strong message from the U.S. Department of Agriculture (USDA) and the U.S. Department of Transportation (DOT) urging the world’s leading ocean carriers to reform their practices to provide better service to U.S. agricultural exporters. The letter specifically referenced the need to expand use of available West Coast terminal capacity and to “restore reciprocal treatment of imports and exports [which] is inherent in trade.”

USDEC and NMPF repeatedly met with USDA and DOT officials as well as the White House over the past several months to urge a greater Administration focus on the shipping supply chain crisis’s impact on agricultural exporters. The dairy organizations have urged the Administration to call out profiteering by foreign-owned carriers at the expense of dairy exporters and take steps to address the supply chain crisis that’s cost the dairy industry $1.3 billion over just the first three quarters of 2021.

The letter sent mid-December was a key step in the right direction and builds on the successful passage of House legislation designed to curb some of the bad-faith practices by ocean carriers. USDA and DOT noted that, “This imbalance is not sustainable and contributes to the logjam of empty containers clogging ports. The poor service and refusal to serve customers when the empty containers are clearly available are unacceptable and, if not resolved quickly, may require further examination and action by the Federal Maritime Commission.”

“Dairy exporters are enduring tremendous challenges in getting their high-quality products to customers in overseas markets, which puts our industry’s reputation as a reliable supplier at risk. Our competitors in the European Union and Oceania are eager to swoop in and scoop up those sales,” said Krysta Harden, president and CEO of USDEC. “USDEC commends the Administration’s recognition that the current situation facing our dairy exporters cannot continue and strongly supports further steps by the Federal Maritime Commission and other Administration entities to drive change swiftly.”

“Dairy farmers and their cooperatives have invested significantly in painstakingly cultivating export markets to help meet the growing global demand for dairy. This year’s shipping supply chain crisis has created enormous upheaval in maintaining those sales, which are so critical to the overall demand for American milk,” said Jim Mulhern, president and CEO of NMPF. “Dairy farmers strongly support USDA and DOT’s castigation of ocean shippers’ abusive practices and urge the Administration to take the steps necessary to bring about meaningful reforms in export access for our dairy industry.”

Both organizations formed an Export Supply Chain Working Group earlier this year and have worked on a range of initiatives to address the shipping crisis including the passage of HR 4996 and work to drive further Congressional advancement of this legislation. Steps by the Administration to fully use all existing authorities are a crucial complement to that ongoing legislative reform effort.

DMC signup to begin; USDA, Congress thanked for NMPF-backed improvements

The National Milk Producers Federation is urging farmers to sign up for maximum coverage in 2022 under the Dairy Margin Coverage (DMC) program, which is open through Feb. 18. This year’s DMC signup is accompanied by new enhancements that make the program even more valuable for producers seeking protection against unforeseen market risks.

Signing up for DMC, which offers cost-effective margin protection for small and medium-sized producers as well as inexpensive catastrophic coverage for larger dairies, is a no-brainer for 2022, especially considering the improvements we fought for in Congress and advocated for at USDA.

“Signing up for DMC, which offers cost-effective margin protection for small and medium-sized producers as well as inexpensive catastrophic coverage for larger dairies, is a nobrainer for 2022, especially considering the improvements we fought for in Congress and advocated for at USDA,” said Jim Mulhern, president and CEO of NMPF. “This year has illustrated just how valuable this program is for those producers that can take advantage of it, and DMC will once again be an essential part of many farmers’ risk management in the coming year. We thank Congress and USDA for making the program stronger and helping dairy farmers in challenging times.”

DMC is part of a suite of federally backed risk-management tools, including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, which were revamped in the 2018 Farm Bill at NMPF’s urging. DMC resulted from NMPF’s effort to improve inadequate federal margin protection insurance. LGM-Dairy and DRP were made workable via NMPF’s efforts to remove spending caps and a ban on enrollment in multiple programs, which previously limited their usefulness.

More than $1.1 billion – a record – in DMC payments are expected to be distributed to dairy producers under the 2021 program, according to USDA data as of Dec. 6.

While DMC in 2022 will fully incorporate the premium-quality alfalfa price into the DMC feed cost formula, an improvement from the current structure that uses a 50-50 blend between the premium-quality price and the regular price, USDA will make retroactive payments to producers to January 2020. Meanwhile, the new Supplemental Dairy Margin Coverage program will enable some producers who are also enrolled in DMC to receive additional payments reflecting increases in their production since 2014 retroactively to January 2021.

Both improvements occurred at NMPF’s urging. The alfalfa recalculation also will further benefit dairy in the next farm bill, as it will increase the amount of funds available for all programs that benefit dairy farmers.