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Weekly Digest: NMPF to request FMMO hearing on Class I mover

Progressive Dairy Editor Dave Natzke Published on 26 April 2021

Digest Highlights

NMPF to request FMMO hearing on Class I mover

The National Milk Producers Federation’s (NMPF) board of directors voted to request an emergency USDA hearing to consider its proposal to add flexibility to the Federal Milk Marketing Order (FMMO) Class I milk price formula. The board vote, April 23, followed previous approval of the request from the organization’s executive committee. (Read: NMPF moving toward request for limited FMMO hearing.)

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The current formula to calculate the “Class I mover” was established in the 2018 Farm Bill. The change from the previous formula, implemented in May 2019, provided fluid milk processors with price risk management protection and was meant to be revenue neutral for dairy farmers. However, with the onset of the COVID-19 pandemic and USDA Farmers to Food Box program dairy product purchases, the new Class I mover contributed to disorderly marketing conditions and cost U.S. dairy farmers over $725 million in lost income, according to NMPF.

NMPF’s proposal would modify the current Class I mover, making adjustments every two years based on market conditions over the prior 24 months. The current Class I mover, which adds 74 cents per hundredweight (cwt) to the monthly average of Classes III and IV milk prices, would serve as the floor.

NMPF’s request would limit an FMMO hearing specifically to proposed changes to the Class I mover. Once NMPF officially submits the request, the USDA would have 30 days to issue an action plan that would determine whether the USDA would act on an emergency basis.

Follow Progressive Dairy for additional news and comments regarding the request.

DAIRY PRIDE Act reintroduced

Congress will make another attempt to require the U.S. Food and Drug Administration (FDA) to take enforcement action against manufacturers labeling non-dairy products as “dairy” with the reintroduction of the Defending Against Imitations and Replacements of Yogurt, Milk and Cheese to Promote Regular Intake of Dairy Everyday (DAIRY PRIDE) Act.

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Companion bills were reintroduced in both the House, by Reps. Peter Welch (D-Vermont) and Mike Simpson (R-Idaho), and in the Senate by Sens. Tammy Baldwin (D-Wisconsin) and Jim Risch (R-Idaho).

The DAIRY PRIDE Act would stop the use of dairy terms such as milk, yogurt and cheese on the labels of nondairy products made from nuts, seeds, plants and algae. The legislation does not prevent the sale of nondairy products, only their labeling as dairy products.

The bill would require the FDA to issue guidance on its enforcement of its regulations on mislabeled dairy products within 90 days and require the agency to report to Congress on its implementation of the law two years after its enactment.

“For decades, dairy farmers have called on FDA to simply enforce the law and follow its own standards designed to protect product integrity, marketplace transparency and the ability of consumers to make informed choices about what they feed themselves and their families,” said Jim Mulhern, NMPF president and CEO. “The medical community is increasingly concerned about mislabeled dairy imitators that harm public health, while consumers demand honesty in labeling.”

For more on NMPF’s policy priorities related to labeling, click here.

May 2021 Class I base moves above $17

The FMMO Class I base price is $17.10 per cwt for May, up $1.59 from April and the highest in five months. While the May 2021 price is $4.15 above the Class I base price paid in May 2020, the five-month average is $15.70 per cwt, about $1 less than the same period a year ago.

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CDE ‘Protecting Your Profits’ webinar is April 28

Pennsylvania’s Center for Dairy Excellence (CDE) is hosting its monthly “Protecting Your Profits” webinar on April 28, beginning at noon (Eastern time). Zach Myers, CDE risk education manager, will review current data and updates about dairy markets to guide decision-making and risk management strategies. In addition, Phil Taylor, business consultant with AgChoice Farm Credit, will provide insights on writing a dairy business plan.

Advance registration is not necessary. To participate in the webinar, click here or phone: (646) 558-8656. When prompted, enter meeting ID 848 3416 1708 and passcode 474057.

For a comprehensive look at a schedule of upcoming dairy risk management reports and deadlines, read Progressive Dairy’s April-May risk management calendar: The floor remains important.

USDA seeks bids for evaporated, UHT milk, mozzarella

The USDA is seeking bids to deliver dairy products for use in federal food and nutrition assistance programs, with deliveries scheduled between July 1-Sept. 30. Bids close May 4-5. Bids are being sought for:

  • 12.53 million pounds of 1% milkfat ultra-high-temperature (UHT) pasteurized milk
  • 111,537 pounds of evaporated skim milk
  • 504,000 pounds of shredded mozzarella cheese and 1.02 million pounds of mozzarella string cheese

The USDA also awarded bids to United Dairy Inc., Charleston, West Virginia, for delivery of 36,450 gallons of 2% milk to various locations in Pennsylvania between May 3-June 30.

Things you might have missed

  • Domestic dairy product use is increasing with signs that the country is making another run at moving on from the COVID-19 pandemic, according to Peter Vitaliano, NMPF chief economist, writing in the April Dairy Market Report. However, rising demand isn’t keeping pace with milk production, and stocks of major dairy products are rising. Milk prices remain well below a year ago, and payments under the Dairy Margin Coverage (DMC) program remain significant.

  • The outlook for dairy farmer income margins was mixed over the first half of April, strengthening in nearby slots but weakening in deferred marketing periods further out, according to Commodity & Ingredient Hedging LLC. Longer-term margin tightening resulted from the Biden administration’s announcement it would end the Families Food Box Program at the end of May. Despite what will likely be reduced government buying going forward, dairy demand in general remains quite strong. Unfortunately, renewed concerns over forward feed costs has tempered enthusiasm.

  • The USDA will open enrollment in the Conservation Reserve Program (CRP) with higher payment rates, new incentives and a more targeted focus on the program’s role in climate change mitigation. Additionally, the USDA is announcing investments in partnerships to increase “climate-smart” agriculture, including $330 million in 85 Regional Conservation Partnership Program (RCPP) projects and $25 million for on-farm conservation innovation trials. Find a USDA CRP fact sheet here.  end mark
Dave Natzke
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