The U.S. House Agriculture Committee continues a series of listening sessions as it prepares for the 2023 Farm Bill, with recent stops in two Southwest major dairy states and additional sessions set for dairy states in the Northwest and Midwest.
Upcoming House Ag Committee farm bill listening session will be held July 22 in Carnation, Washington, and July 25 in Northfield, Minnesota. The first listening sessions in the series were held June 25 in Arizona.
A listening session held July 7 in California was led by U.S. Rep. Jim Costa (D-California), chair of the ag committee’s Livestock and Foreign Agriculture subcommittee, and featured comments from three representatives of the state’s dairy industry.
In both oral and written comments, Geoff Vanden Heuvel, former dairy producer and current director of regulatory and economic affairs with California’s Milk Producers Council (MPC), praised changes made to the Dairy Margin Coverage (DMC) program. (Hear Vanden Heuvel’s comments beginning at about 1:09 in the video recording.)
Vanden Heuvel said DMC was a very good safety net for producers even though milk production caps of 5 million pounds of milk for Tier I coverage limited California producer participation in the program. With that cap, milk production from about 250 cows – far below the average herd size in California – received the most economical coverage.
Nonetheless, Vanden Heuvel said MPC recognized the financial and political constraints of raising DMC production caps significantly higher than the 5-million-pound level and would oppose raising the cap. Instead, he said the Dairy Revenue Protection (Dairy-RP) program, a subsidized insurance program overseen by USDA’s Risk Management Agency, provides the best return for the government dollar in providing risk management for dairy producers and is not size discriminatory.
If additional federal funds can be found, increasing the Dairy-RP premium subsidy by 5%-10% would likely increase dairy farmer participation in the program significantly, he noted in separate written calculations submitted to the House Ag Committee. “Assuming our goal was to get 70 percent of U.S. production covered in [Dairy-RP], it would cost about $154 million to increase the premium subsidy by 10 cents per hundredweight of covered milk,” Vanden Heuvel said.
Defending FMMO
With calls for Federal Milk Marketing Order (FMMO) reforms growing louder, Vanden Heuvel also defended the FMMO system, calling it “one of the most successful government market regulatory programs in our country.”
He noted that in the 40-month period since California joined the FMMO system in late 2018, the state’s producers had seen a $1 per hundredweight (cwt) increase in their mailbox milk prices relative to the all-milk price.
Vanden Heuvel said the FMMO system is probably due for a little updating – but not reforming – through a formal hearing process. Among the updates, he suggested a need for better data so the USDA can carry out the function of updating milk pricing formulas. That would include authority to conduct mandatory manufacturing cost studies used to calculate make allowances in milk class pricing formulas.
Medeiros, Fernandes comment
Another dairy producer submitting comments during the California listening session was Melvin Medeiros, a Dairy Farmers of America (DFA) producer from Laton, California, and a member of the National Milk Producers Federation’s (NMPF) executive board, which is currently considering FMMO modernization proposals. (Hear Medeiros’ comments beginning at about 1:16 in the video recording.)
Read also: Weekly Digest II: NMPF lays out FMMO modernization timeline.
Medeiros suggested federal dairy safety net program changes were necessary to make them more relevant for all producers, regardless of size and magnitude, without creating division among U.S. dairy producers.
“We feel that these programs are designed as safety nets and should be equitable for all size producers and not just be catering to one size or another,” he said.
Additionally, Medeiros urged continued and increased federal support for dairy trade, nutrition and sustainability programs.
Joey Fernandes, a Land O’Lakes producer who farms with his wife and three sons near Tulare, said the current milk production caps made DMC a “weak safety net” for California producers, with changes necessary to further reduce consolidation within the industry. (Hear Fernandes’ comments at about 2:06 in the video recording.)
Addressing other dairy issues, he said ongoing rail and port transportation and supply chain challenges were plaguing the dairy industry, especially in California, costing producers billions of dollars over the past years through higher direct costs, reduced value, and additional labor costs and lost sales.
In responding comments, Costa said political and financial sensitivity made raising the DMC production cap above 5 million pounds of milk unlikely and suggested dairy producers direct their attention to other policy issues with positive financial impacts.
Upcoming House Ag Committee farm bill listening session include:
- July 22, 10 a.m. (Pacific time) at Remlinger Farms in Carnation, Washington – the session will be streamed live online via YouTube here.
- July 25, 10 a.m. (Central time) at the Bruce Peterson Farm in Northfield, Minnesota – the session will be streamed live online via YouTube.
The first listening sessions in the series were held June 25 in Arizona. Among those testifying was James Boyle, owner of Casa Grande Dairy, a 3,500-cow Arizona dairy. Boyle said production limits on DMC and the Pandemic Market Volatility Assistance Program (PMVAP) meant large-herd producers received far less in safety net protection than small producers. (Hear Boyle’s comments at about 1:20 in the recording.)
A House hearing to review dairy provisions of the farm bill was held June 22. Find resources here. Read: DMC, FMMO reform highlight House Ag Committee dairy hearing.
