Dairy policy leaders looking to bolster the Margin Protection Program for Dairy (MPP-Dairy) as a federal dairy safety net may find skeptics in Wisconsin.
The Wisconsin Farmers Union (WFU) recently released results of a statewide survey covering dairy issues. The survey, conducted between August and October 2016, was mailed to 8,442 dairy farmers in the state, according to survey analyst Gabriel Chapman. WFU received 1,050 responses from dairy farms of differing sizes across the state. The average respondent began farming in 1986, and the average milking herd size was 126 cows.
Of those responding, 765 said they had signed up for the MPP-Dairy. Of those, only 93 farms (12 percent) said they had received any MPP-Dairy indemnity payments. And, only five indicated they considered the program to be supporting their farm.
Comments related to MPP-Dairy expressed a heavy dose of frustration. Comments ranged from "it's a joke" and "total waste of time and money," to frustrations that the program doesn't appropriately account for the cost of inputs other than feed for Wisconsin dairy farmers.
That frustration is despite the fact that the survey was conducted after the MPP-Dairy May-June 2016 pay period, which saw Wisconsin dairy farmers among the largest recipients of indemnity payments during a time of very small income margins.
May-June MPP-Dairy payments to Wisconsin dairy producers totaled $2.83 million, more than 25 percent of the U.S. total payout of $11.17 million.
Payments were based on the level of coverage and the pounds of milk production enrolled in MPP-Dairy in 2016. At 1,465, the number of Wisconsin farmers led the nation in selecting margin insurance coverages in the $6, $6.50, $7, $7.50 and $8 per cwt ranges, and protected the largest volume of milk production.
Read: Three states receive half of May-June MPP-Dairy indemnity payments
Although MPP-Dairy doesn’t expire until Dec. 31, 2018, leaders of the National Milk Producers Federation (NMPF) said they recognize the program’s shortcomings, and will propose program changes in early 2017, for consideration during development of the 2018 Farm Bill.
NMPF blames congressional tinkering in the waning days of development of the 2014 Farm Bill. They said adjustments made to the program’s feed cost index effectively overestimated monthly margin calculations by about $1 per cwt.
Addressing an Oct. 31-Nov. 2, 2016 joint annual meeting of dairy policy and promotion leaders, Missouri dairy farmer and NMPF chairman Randy Mooney and Jaime Casteneda, senior vice president of strategic initiatives and trade policy, pledged to work to fix MPP-Dairy in the next federal Farm Bill.
“There’s not an issue more important to us over the next couple of years then to get MPP fixed,” Mooney said. “I still believe it is the right program for dairy farmers, but it isn’t working as it was intended.”
“I know there is a lot of skepticism,” Casteneda said. “Originally, we got the program right, but unfortunately due to consequences in Congress, it is not the program it was intended to be.”
Mooney said a special economic policy committee had been established to look into all issues related to MPP-Dairy, with a goal of formulating proposed revisions by March of 2017.
Read: Dairy leaders set sights on fixing policy, taking promotion abroad
The enrollment period to select an MPP-Dairy coverage options for 2017 closes on Dec. 16 at USDA Farm Service Agency offices.
Other survey responses
In addition to MPP-Dairy, the WFU survey addressed trade and other dairy economic issues.
More than 70 percent of respondents expressed support for federal or state milk supply management programs.
Despite that favorable feedback for government controls, respondents also conveyed a strong desire to see supply management measures implemented by cooperatives and industry groups, rather than by the government.
Sixty-three percent of the dairy farmer respondents indicated a negative profit margin during the survey period, according to Chapman. The average estimated cost of production for conventional milk between August and October 2016 was $15.77 per cwt; the average conventional milk pay price was $14.81 per cwt.
Seventy-one percent of respondents indicated that growing unpredictability in dairy prices made it more difficult to invest in needed equipment and upgrades; 52 percent said that milk price unpredictability had resulted in health problems from undue stress; and 54 percent of respondents indicated that volatile prices had led them to consider exiting from dairy farming.
About 79 percent of respondents favored rejection of the Trans-Pacific Partnership (TPP) trade agreement until concerns over low-cost milk imports and protein concentrates were resolved. Seventy-one percent of respondents also indicated a strong sense of concern for currency manipulation among TPP nations.
"The survey results will help Wisconsin Farmers Union bolster our policy decisions here in the state and as we join other farmers from across the United States in March at the next National Farmers Union Convention," said WFU president Darin Von Ruden, a third-generation dairy farmer from Westby.
WFU scheduled a Dec. 20 webinar for dairy farmers and other ag industry professionals interested in the results. More information is available on the WFU website.
- Progressive Dairyman
- Email Dave Natzke