Digest highlights

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Dave Natzke
Editor / Progressive Dairy

USDA announces second round of PMVAP payments

The USDA’s Agricultural Marketing Service (AMS) announced it will issue a second round of Pandemic Market Volatility Assistance Program (PMVAP) payments totaling nearly $100 million. This round will provide assistance to medium-sized and larger producers who missed out on payments during the first round of PMVAP.

Under the second round, the production cap for eligible producer payments will be raised to cover between 5 million and 9 million pounds of Class I milk marketed through Federal Milk Marketing Orders (FMMOs) between July through December 2020.

A timeline for payments has not been released. Additional payments will not be made to those producers whose milk marketings for July-December 2020 did not exceed 5 million pounds.

The first round of PMVAP payments, administered during late 2021 and early 2022, paid over $250 million in payments to more than 25,000 eligible dairy farmers. Those producers were paid on up to 5 million pounds of fluid milk sales during the July-December 2020.

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The original PMVAP program covered financial losses resulting from the change in the Class I pricing formula, from the “higher-of” to the “average-of plus 74 cents” formula. Additionally, pandemic-related federal food box purchases weighted heavily toward cheese led to high Class III milk prices and FMMO depooling, creating significant losses for some producers. 

Under round two, dairy producers are eligible if their handler or cooperative participated in a FMMO during July-December 2020. The basis for payment rates will be identical to the first round of payments: 80% of the revenue difference per month during that period. The payment rate will vary by region based on the actual losses on pooled milk related to price volatility. 

As in the first round, the second round of payments will be distributed through agreements with independent handlers and cooperatives, with additional reimbursement to handlers for allowed administrative costs. The USDA will contact handlers with eligible producers to notify them of the opportunity to participate.

Under round one of PMVAP, the USDA AMS established individual agreements with each eligible milk handler and cooperative. There were two payment calculation steps contained in each agreement that ultimately determined what eligible dairy producers received.

While the PMVAP program utilizes data regarding milk marketed through the FMMO system, it is not part of the FMMO program. It is being administered by AMS, not a regional FMMO administrator or county USDA Farm Service Agency (FSA) offices.

As in other USDA programs, producers must also meet adjusted gross income (AGI) requirements. PMVAP payments are considered taxable income and must be reported.

More information about the PMVAP production cap increase is available at the AMS website.

“While losses due to the combination of unforeseen market circumstances and an inadequate Class I pricing system have not been fully remedied, USDA and congressional efforts will aid thousands of dairy producers who otherwise would have absorbed losses created by policies that didn’t work for them,” said Jim Mulhern, president and CEO of National Milk Producers Federation (NMPF).

NMPF will continue in its efforts to remedy losses among dairy farmers of all sizes, as well as for those farmers unable to receive program funds because their milk was not pooled on a FMMO but still endured similar price losses.

$100 million Organic Dairy Marketing Assistance Program announced

In addition to a second round of the Pandemic Market Volatility Assistance Program (see above), the USDA also announced a new Organic Dairy Marketing Assistance Program (ODMAP) to assist small organic dairy producers.

The program is still in development, and final spending will depend on enrollment and each producer's projected production. The ODMAP has been allocated up to $100 million, with funding coming from unused Commodity Credit Corporation funds remaining from earlier pandemic assistance programs. 

Administered by the FSA, the program is intended to help smaller organic dairy farms. The assistance, made on a per hundredweight basis, will help eligible organic dairy producers with up to 75% of their future projected marketing costs in 2023, based on national marketing cost estimates. The payments will be capped at the first 5 million pounds of anticipated production.

Details about the Organic Dairy Marketing Assistance Program, including fund availability and an application process, will be available and updated here.

WOTUS lawsuit filed

The ink was barely dry on a “waters of the U.S.” (WOTUS) regulation proposal when the first lawsuit against it was filed.

Announced on Dec. 30, the EPA and Army Corps of Engineers posted the revised waters of the U.S. rule in the Federal Register on Jan. 18. A day later, 17 farm, construction, real estate, oil and other organizations jointly filed a lawsuit seeking to block its implementation.

Agricultural organizations expressed almost immediate displeasure with the proposal when it was unveiled. (Read: Timing, scope of WOTUS rule disappoints dairy)

Ag organizations joining the lawsuit, filed in the Southern District of Texas in Galveston, include the American Farm Bureau Federation, National Cattlemen’s Association, National Pork Producers Council, Texas Farm Bureau, and the U.S. Poultry and Egg Association. They are seeking to block implementation of the rule that redefines the jurisdiction of the Clean Water Act.

With publication in the Federal Register, the rule is scheduled to become effective on March 20.

IDFA adds economist, policy support

The International Dairy Foods Association (IDFA) has named Mike Brown as chief economist. In his new role, Brown will join IDFA’s legislative affairs and economic policy team, reporting to Dave Carlin, IDFA senior vice president.

Recognized as an expert on milk pricing policy, Brown most recently led the milk and dairy procurement team for The Kroger Co. as director of dairy supply chain. Prior to Kroger, Brown served as a dairy economist for Glanbia, Darigold and National All-Jersey Inc.

With a FMMO hearing likely to begin in 2023, as well as the 2023 Farm Bill, IDFA also announced that it has engaged in consulting agreements with three policy and legal experts to support dairy policy and pricing efforts. They are Chip English, Steven J. Rosenbaum and former U.S. Rep. Collin Peterson, president and founder of The Peterson Group.

IDFA represents the nation’s dairy manufacturing and marketing industry, with members accounting for 90% of the milk and dairy products and ingredients produced and marketed in the U.S.

USDA updates organic enforcement rule

The USDA National Organic Program (NOP) published the Strengthening Organic Enforcement (SOE) final rule in the Federal Register on Jan. 19.

According to a USDA press release, the update implements 2018 Farm Bill mandates and strengthens oversight and enforcement of the production, handling and sale of organic products. 

The rule may affect USDA-accredited certifying agents, organic inspectors, certified organic operations, operations considering organic certification, businesses that import or trade organic products and retailers that sell organic products. 

The rule becomes effective March 20, 2023. Organic operations, certifying agents and other organic stakeholders affected by the rule will have one year from that date to comply with the changes.

2025-30 Dietary Guideline Advisory Committee named

Twenty nutrition and public health experts have been named to the 2025 Dietary Guidelines Advisory Committee. The first meeting of the panel is scheduled for Feb. 9-10.

The committee is responsible for reviewing nutrition research and developing a scientific report used by the Department of Health and Human Services (HHS) and the USDA as they develop the Dietary Guidelines for Americans (DGA), 2025-30. 

A full list of the committee members is available here.

Beyond providing dietary recommendations, the document is also used as the basis for dairy options served as part of the National School Lunch and Breakfast programs and other federal feeding programs.

The DGA is updated every five years. Read: 2020-25 Dietary Guidelines for Americans status quo for dairy

Organizations such as the National Dairy Council (NDC), Dairy Management Inc. (DMI) and IDFA cannot lobby the government agencies, but they can submit comments and provide dairy research updates that could be incorporated in the DGA. Past efforts have been to include providing research on the benefits of dairy fat and including whole milk in school meal programs.

Read: Research seeks to fill milk ‘whole’ in dietary guidelines

USDA seeks comment on proposed animal disease traceability regulations

The USDA’s Animal and Plant Health Inspection Service (APHIS) is accepting public comments, until March 22, on a proposed rule to amend animal disease traceability regulations. 

Designed to strengthen the ability of the U.S. to quickly respond to significant animal disease outbreaks, the proposal would apply to certain classes of cattle that are crossing state lines and meet any of the following conditions: 

  • Sexually intact and 18 months of age or older
  • All female dairy cattle of any age and male dairy animals born after March 11, 2013
  • Cattle and bison of any age used for rodeo or recreational events
  • Cattle or bison of any age used for shows or exhibitions

APHIS estimates about 11% of the national herd of approximately 100 million cattle and bison would be impacted by the changes in the proposal.

The proposed rule would require official eartags to be visually and electronically readable for official use for interstate movement of certain cattle and bison. Some examples of official identification are available here. 

The rule would also revise and clarify certain record requirements related to cattle, including requiring official identification device distribution records to be entered into a tribal, state or federal database, and available to APHIS upon request.

APHIS began soliciting input on the animal disease traceability program in 2017, continuing discussions with industry stakeholders through 2019. An initial proposal, published in July 2020, approved only RFID tags as the official eartag for use in interstate movement of cattle and bison that are covered under the regulations. However, APHIS reopened the rule-making process in March 2021 for further action related to the proposal.

Comments received by March 23, 2023, will be considered in a final rule, which would become effective 180 days after publication. Review the proposed rule and make comments here.

Animal welfare group wants increased regulation of ‘custom-exempt’ slaughter operations

With ongoing efforts to expand livestock slaughter capacity in the U.S., an animal welfare organization has petitioned the USDA to revise its directive on custom-exempt slaughter operations.

Under current law, the custom slaughter of animals is exempt from federal inspection regulations only if the meat is slaughtered for personal, household, guest or employee use. In recent years, federal and state lawmakers have attempted to increase the number of custom-exempt slaughter establishments in response to consolidation in the meat industry. 

Introduced in Congress in 2019 and again in 2021, the Processing Revival and Intrastate Meat Exemption (PRIME) Act would give individual states the freedom to permit intrastate distribution of custom-slaughtered meat.

Charging that the USDA consistently fails to review and respond to animal welfare violations at custom-exempt slaughter facilities, Animal Welfare Institute called on the USDA’s Food Safety and Inspection Service (FSIS) to apply Humane Methods of Slaughter Act (HMSA) requirements. It also requires dates and times of slaughter to be listed so FSIS animal inspections can be scheduled.

Other news, briefly

  • Dairy-based meat? In a press release, Top Protein, based in Orlando, Florida, said it is introducing “dairy-based alternative meats” made from milk and readying products for the retail, food service and institutional markets. The portfolio includes whole cuts, shredded red and white meats, including burgers, chicken cutlets, hot dogs, pulled pork, brisket, scallops and fish filets.