How will DOGE review of USDA impact dairy? It’s complicated.

Posted on February 21, 2025 by Agmoos

By Sherry Bunting, Farmshine, Feb. 21, 2025 (with updates after print publication)

WASHINGTON – Upon reading the Feb. 14 news release about USDA’s 78 terminated contracts totaling $132 million, as identified in the ongoing review by the Department of Government Efficiency (DOGE), we noticed only 10 examples were given, totaling only $4.21 million. Reports had surfaced about Conservation Districts receiving project or program termination notices via email, and a few farmers communicated their concern about frozen funding for grant reimbursements.

So, we looked into it.

One email notice that Farmshine was able to view, dated Feb. 14, for a project in a Colorado Conservation District, stated the reason in the subject line: “The project no longer effectuates agency priorities regarding diversity, equity, and inclusion programs and activities.”

However, the notice also clearly stated that final payments would be made on work already conducted for the terminated project — as long as the final reports and final payment requests are submitted within 120 calendar days of the notice.

We emailed the USDA press office on Feb. 18, as follows:

“A few farmers have communicated about canceled contracts or frozen funds related to conservation projects, some in which projects were started or planned, and these farmers were expecting reimbursement through grants. The news release about the $132 million in canceled contracts lists 10 things as examples outside of the core mission of USDA, but these examples only total $4.21 million, not $132 million. Where can we find a list of the balance?”

The press office turned our request over to the Freedom of Information Act (FOIA) officer at the USDA Farm Production and Conservation Business Center, who promptly responded by email on the very same day, Feb. 18, directing us to a government information specialist who could help us file an official FOIA request.

The specialist answered our call on the first try that same day (Feb. 18). Our official FOIA request was modified to seek a listing of the 78 terminated contracts referenced in the USDA press release. This experience runs contrary to what some in the mainstream media have reported about FOIA officers being “gone.”

In fact, we received a follow up email the next morning (Feb. 19) with additional information and a link to https://doge.gov/savings, where all terminated contracts throughout all federal agencies will be updated twice a week. USDA ranks 5^th in the top 10 federal agencies in amount of savings as of Feb. 18.

A look at the listing shows zero terminations of any on-farm conservation project contracts.

Furthermore, $100 million of the $132 million is accounted for in the four separate $25 million contracts with four separate consulting companies, mostly located in the Capitol region, for “Diversity, Equity, Inclusion and Accessibility (DEIA) Assessment and Training Services” within the USDA’s Food and Nutrition Service, or FNS.

(Just think how much of the currently banned whole milk — which former Ag Sec. Vilsack said schools cannot afford anyway — could be purchased for the FNS-controlled National School Lunch Program with such savings!)

Also terminated was a contract with a Vermont consulting firm for “Environmental Compliance Services for the implementation of Partnership for Climate-Smart Commodities.” Even though this $8.2 million award had already been paid, the termination prevents additional orders.

While the government information specialist cannot answer abstract questions, she did indicate that conservation projects through EQIP and NRCS — that are attributed to the farm bill — are not included in the contract terminations. However, Climate Smart projects under the Inflation Reduction Act (IRA) were included in the funding that was ‘on hold’ for review.

Then USDA announced in a Feb. 20 press release that, “Secretary Rollins will honor contracts that were already made directly to farmers. Specifically, USDA is releasing approximately $20 million in contracts for the Environmental Quality Incentive Program, the Conservation Stewardship Program, and the Agricultural Conservation Easement Program.”

This is the first tranche released from the ‘pause’ as USDA continues to review IRA funding “to ensure that we honor our sacred obligation to American taxpayers—and to ensure that programs are focused on supporting farmers and ranchers, not DEIA programs or far-left climate programs,” the press release stated.

We also learned from other sources that commodity checkoff programs are part of the broader DOGE review of all USDA activities for the purpose of evaluating, and potentially reforming both spending and policy in agriculture.

The dairy promotion and research program, funded by the 15 cents per cwt checkoff, is one of 22 such mandatory commodity programs overseen by USDA AMS. According to repeated statements by dairy checkoff leaders over the past five years, this oversight involves USDA AMS reviewing all checkoff-funded activities, including for USDA staff attending all DMI meetings “even conference calls.”

This oversight comes at a cost. Of the 2022 and 2023 financial statements available for Dairy Management Inc (DMI), National Dairy Promotion and Research Board (NDB) and the consolidated United Dairy Industry Association (UDIA) and National Dairy Council (NDC), only the NDB listed USDA Oversight as a line item under its operating costs, totaling just under $1 million annually, along with a collections and compliance line item totaling just over $500,000.

How might the DOGE algorithms decipher these costs and engagements, given both USDA and DMI have contracted with NGOs like World Wildlife Fund (WWF)?

How might it interpret WWF’s published playbook of leveraging the supply-chain of 300 to 500 companies controlling 70% of consumer food choices?

WWF’s playbook uses the consolidation in the middle (above) to move the much larger number of food producers and food consumers toward implementing their sustainability goals, the so-called ESGs (Environmental, Social, Governance) that focus on DEI, biodiversity, and their particular take (and flawed math) on the climate impact of methane emissions from cattle, disregarding the carbon cycle that is the essence of life.

In fact, upon being provided with the link to USA Spending as part of the response we received from the current administration regarding our FOIA request, we found that the federal government has awarded the NGO World Wildlife Fund (WWF) more than $500 million since the start of the Obama administration in 2009. The bulk of the funds were awarded in 2022-24 during the Biden administration.

Of the over $500M, USAID awarded WWF $310M; the Department of Interior awarded WWF $149M; and USDA awarded WWF $36M, with other federal agencies rounding out the total. ($500M is a large sum that the mainstream media refer to as “merely a rounding error” next to the $36T (trillion) in national debt, but where else do these layers lead in terms of money and policy?)

We already know that the dairy and beef checkoffs began their alliances with WWF in the 2008 to 2010 time frame — when the work to develop their Net Zero and Sustainability platforms for dairy and beef producers began, and really ratcheted up by 2021.

Contracts with NGOs in other departments of the federal government have also been terminated through the DOGE reviews, especially via USAID, according to repeated press reports. What more may we learn from the DOGE review on potential entanglements between USDA, checkoff programs, NGO’s like WWF, and the food industry — that are not truly farmer-led but impact farmers?

To-date, there are no indications that the USDA AMS administration of the Federal Milk Marketing Orders are part of the DOGE review; however, it’s possible, depending on how these FMMO administration costs are allocated.

According to the Congressional Research Service (CRS), the 1937 Agricultural Marketing Agreement Act gives USDA several authorities in Federal Milk Marketing Orders (FMMO) that are administered through Dairy Programs under AMS. The associated costs of FMMO administration, according to the CRS “are partly covered by an assessment levied on handlers at no more than five cents per cwt., which is often passed on as deductions on farm milk checks.

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‘Farmers will be at the table’ (Rollins confirmed Ag Secretary)

Posted on February 13, 2025 by Agmoos

Brooke Rollins — now on Feb. 13, 2025 confirmed as the next Secretary of Agriculture and the second woman ever to lead the USDA — stands to be sworn in for testimony during her confirmation hearing before the U.S. Senate Ag Committee back on Jan. 23. She was joined by a room full of family, friends, colleagues, her high school Ag teacher, fellow 1990-91 state FFA officers, the little league softball team she coaches, and a pastor from Georgia who prayed with her and her family that morning. Senate Agwebsite livestream screen capture by Sherry Bunting

Rollins pledged ‘fast and furious’ first 100 days.

By Sherry Bunting, Farmshine, Jan. 24, 2025

WASHINGTON, D.C. — The growing U.S. Agriculture trade deficit was a key topic when on Jan. 23, President Trump’s nominee for Secretary of Agriculture, Brooke Rollins, gave testimony and answered four hours of questions before the U.S. Senate Committee on Agriculture, Nutrition and Forestry.

(UPDATE: Rollins was confirmed by the full Senate on Feb. 13, 2025)

Along with the trade deficit, Senators were keen to talk about Trump’s trade policies and tariffs, while also asking questions that covered everything from immigration and the ag workforce, to biofuels, the farm bill, SNAP, WIC, and other feeding programs, as well as revitalization of rural communities and preparing the next generation.

Rollins even had an important exchange with Senator Roger Marshall, a medical doctor from Kansas, about bringing the choice of whole milk back to schools. (See related story here.)

Both Texas Senators John Cornyn and Ted Cruz introduced Rollins, calling her nomination “a no-brainer.”

She grew up in the small agricultural town of Glen Rose, Texas, where she was a barrel racer, a state FFA officer, helped make hay on the ranch, and raised and showed cattle in 4-H. She also spent some summers on the farm of extended family in Minnesota.

An admitted “policy wonk,” she earned her Ag Leadership and Development degree at Texas A&M and her Law degree, with honors, at the University of Texas School of Law.

“Everyone who knows Brooke, loves Brooke, and I know you will too as you get to know her,” said Sen. Cornyn.

Sen. Cruz highlighted her proven leadership, “profound appreciation for the challenges and rewards of life in agriculture,” reputation as an “independent policy thinker” and as a person who can “bring people together to accomplish major policy objectives.”

In her opening testimony, Rollins acknowledged that farmers and ranchers are currently facing “extraordinary challenges.”

She credited her FFA years for putting her on a course for where she is today and said it would be her great honor to “serve the men and women, who daily without pause or complaint provide our great nation and the world with the best food, fiber and fuel. It is clear farmers and ranchers are the cornerstone of our communities, and I will do everything in my ability to make sure (they) thrive.”

When asked to describe her first 100-days, she used the words “fast and furious,” especially in delivering into the hands of farmers and ranchers the disaster and economic relief recently passed by Congress.

On biofuels, she noted the President included year-round E15 fuels in his energy emergency proclamation.

Pressed for hope on the current $45 billion U.S. Ag trade deficit. Rollins said a key priority will be to expand access to export markets.

“We are vision-boarding to hit the ground running to bring that trade deficit down. It is up 42% in the last year,” she said. “Agriculture is in a tough spot right now in moving our products out. The USMCA is up for renegotiation, and other trade agreements.”

Rollins stressed that she will be working with Congress to be sure the White House and partners across agencies have what they need “to work across the world to bring in new trade partners to expand access to new markets.”

At the same time, she addressed questions about the Trump tariff agenda, saying “This is no surprise. He believes it is a tool to bring America back to the forefront of the world. He also understands the potential devastating impact to farmers and ranchers. I have spoken with Sonny Perdue on how that was managed in the first term for something similar, to close any potential temporary holes.”

Keenly aware that farmers “want trade not aid,” that they want to “grow markets not government payments,” Rollins said: “President Trump is a consummate deal maker. I believe that his skill and intense focus is on making deals for his people, not only for America, but for the Ag community that supported him at 90%. He knows that these are the people who have been with him the longest.”

Rollins served in the last Trump White House in key domestic policy roles. She is well versed in how Trump’s inter-agency process works, how discussions are handled, what the oval office meetings look like, and says she “will ensure our Agriculture community is strongly represented at that table.”

She gave the example of working with the incoming Labor Secretary, if confirmed, on the immigration and ag workforce needs, and asked the Senate to quickly confirm nominated undersecretaries to get the ball rolling.

Several Senators said they see Rollins, if confirmed, bringing this “value add” to the Ag cabinet position as someone who has been with the President for nine years. She knows how his White House process works and pledges to make sure “farmers will be at that table” with her job making sure “Agriculture is front and center where decisions are made.”

From trade and immigration to land management and regulation and from nutrition and hunger to preparing agriculture’s next generation, Rollins was clear: “We will follow the data, and we will listen to our farmers and ranchers as this is moving forward. We as leaders, as Agriculture, we will work together to understand and solve for these problems.”

Rollins cited these immediate priorities if confirmed as Ag Secretary:

— Ensuring disaster and economic relief that was passed by Congress at the end of 2024 is deployed quickly into the hands of farmers and ranchers;

— Working with the men and women of USDA and state leaders on animal disease outbreaks such as H5N1 in poultry and dairy cattle;

— Dedicating timely technical assistance to ensure a modernized farm bill moves forward that meets the needs of farmers and ranchers;

— Modernizing, restructuring, and re-aligning the U.S. Department of Agriculture;

— Supporting rural development to ensure rural communities are equipped and benefit from development of strong markets, including export markets;

— Eliminating burdensome and costly regulations;

— Preparing the next generation in agriculture; and

— Ensuring efficient nutrition programs for a healthy next generation.

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House Ag Chair and new Ranking Member share bipartisan priorities at Farm Show listening session

Posted on January 24, 2025 by Agmoos

Whole milk, new farm bill top their bipartisan to-do list

By Sherry Bunting, Farmshine, Jan. 17, 2025

HARRISBURG, Pa. – Bipartisan priorities were evident — especially on getting whole milk back in schools and completing a new farm bill — during Rep. Glenn ‘GT’ Thompson’s annual listening session on opening day of the Pennsylvania Farm Show Jan. 4th in Harrisburg.

With a thin Republican House majority, Thompson, who represents the largely rural 15^th district of north central Pennsylvania, will continue as Chairman of the Ag Committee.

He introduced the more than 100 attendees to the Ag Committee’s new top Democrat, Ranking Member Angie Craig, who represents the mostly rural 2^nd district of southeast Minnesota.

They were joined by Ag Committee and Ag Appropriations Committee member, Rep. Chellie Pingree, representing the 1^st district of Maine, and by Pennsylvania Secretary of Agriculture Russell Redding.

Whole milk

“We got really close to getting this done,” said Thompson about his Whole Milk for Healthy Kids Act after Berks County dairy farmer Nelson Troutman with the Grassroots Pennsylvania Dairy Advisory Committee asked: What’s next for the bill in the new 2025-26 Congress?

“We have to start over, but there is a lot more support this time,” Thompson replied. He doesn’t see any obstacles on the House side after overwhelming bipartisan support in the 2023 floor vote.

He expects the bill to move quickly through the Education and Workforce Committee under its new Chairman Tim Walberg (R-Mich.), a whole milk bill cosponsor. Then Thompson will work with House leadership to get it on the calendar for a 2025 vote.

He said the Senate side also looks “very promising” as Sen. John Boozman (R-Ark), a supporter of the bill, replaces former Ag Committee Chair Debbie Stabenow (D-Mich.) who had blocked it.

Craig gave further assurance. She and the new Ag Committee Ranking Member on the Senate side, Amy Klobuchar (D-Minn.), are working together on this. “We do not see what we saw last time on the Democratic side to get this done for GT,” said Craig.

Both are Democrats from Minnesota who previously cosponsored the bill – Craig on the House side, Klobuchar on the Senate side.

Thompson credited the education and leadership of the Grassroots Pennsylvania Dairy Advisory Committee and 97 Milk in raising awareness and support. “The grassroots effort also helped improve the bill by suggesting language that makes sure the calories don’t count toward the fat in the school meal,” he said.

Pingree is also a big supporter of whole milk in schools. She was “amazed” to see all the Drink Whole Milk signs, banners, and painted bales while visiting her brother-in-law in Lancaster County, Pennsylvania.

“I don’t know too many states where you see something this interesting while you’re driving down the road. It’s pretty impressive. It has spread far and wide,” she noted.

Congresswoman Chellie Pingree (D-Maine) was “impressed” by the Drink Whole Milk signs along roadsides when she spent time in Lancaster County, Pennsylvania. That was music to the ears of Berks County dairy farmer Nelson Troutman with the Grassroots Pennsylvania Dairy Advisory Committee. His original painted round bales in December 2018 motivated the launch of the 97 Milk education movement in February 2019. It is run by volunteers and donations at 97milk.com

ESL milk

Troutman asked if the bill could address extended shelf life (ESL) milk in schools. He is concerned about taste and acceptance by students, saying “schools should only be allowed to serve ESL milk if that’s the only option available to them.”

His concern arises from the volume of new plant capacity coming online across the country for ESL and aseptic shelf-stable milk packaging, along with new Federal Milk Marketing Order formulas that will price Class I milk differently based on shelf life. This creates potential competitive issues, especially in Pennsylvania, for bottlers of conventionally pasteurized milk that tends to be more local vying for school contracts with ESL milk coming from potentially more distant locations.

Farm-to-School

State lawmakers and young people in attendance voiced further concerns about the quality of school meals and the practice of schools shipping-in prepackaged meals prepared out-of-state, leaving Pennsylvania agriculture out of the loop.

They requested incentives for local farm-to-school food programs. Frank Stoltzfus, a 9^th generation farmer from Lancaster County pointed to the PA Beef to PA Schools program as a successful example.

These discussions come under the jurisdiction of the House Education and Workforce Committee and its “long overdue overhaul,” said Thompson: “The Childhood Nutrition Reauthorization is where we reform and refine to update school meals. I’ll be encouraging Chairman Walberg that we do that reauthorization, and this (ESL question) is something we can certainly take a look at.”

Pingree noted “some farm bill funding also goes to school meals, and we can put more into resupplying kitchens for on-site meal prep and local procurement.”

Nutrition overhaul

The last time Congress did a Childhood Nutrition Reauthorization was in 2010, when it tied school meals more strictly to the Dietary Guidelines for Americans (DGAs).

“When it comes to nutrition, if kids won’t eat it, then it’s not nutritional, and we are seeing a lot of waste today,” Thompson observed.

On that score, he pointed to “good reforms” to the Dietary Guidelines process that will again be part of the markup of the farm bill to “take some of the food politics out of the process coming from the so-called ‘experts.’ We want science-based not agenda-based guidelines.”

Farm bill

Asked about a timeline for the new farm bill, Thompson was optimistic. New committees are still being populated, and new members will need some farm bill education.

“But I would love to see this farm bill go to committee markup in the first quarter of this year — that is my goal – and then see it move quickly to the floor,” he said in a Farmshine interview after the event. “We will continue to do listening sessions, but I want to move ahead. We’ve had great input from all across the country, but I do think it’s important that we keep listening and touching base.”

Both he and Craig shared concerns about nosediving grain prices and net farm income. They differed on what constitutes cuts vs. cost-control on the Supplemental Nutrition Assistance Program (SNAP) that makes up the bulk of the now over $1 trillion farm bill. They both want the Inflation Reduction Act (IRA) funds pulled into the conservation title and baseline, but they differ on removing the IRA’s climate mandates for these funds.

Thompson warned about competition from conservatives who are interested in using these funds as ‘pay-fors’ on tax policy, which he said Ag Committee Republicans would oppose. “I want these IRA funds in this farm bill,” he said.

Craig said the IRA funds best practices like carbon sequestration, and Pingree said she likes the focus on resilience for healthy soils. They pointed to carbon markets that see the value and lauded Sec. Vilsack’s use of $3 billion in CCC funds for pilot projects that will “help give us better metrics.”

While there is general agreement that most practices on farms improve the planet, the question is – how do the things farmers already do get monetized?

“They are not getting enough credit for their ecosystem services — carbon sequestration, air quality, water quality, filtration of rain. Farmers improve our environment just by farming,” said former State Senator Mike Brubaker. “Is there some way for them to get paid?”

SUSTAINS Act

Thompson said the farm bill does not address this specifically, but legislation passed in 2022 includes the SUSTAINS Act, which he described as “providing a framework for private industry to be involved.”

Corporations and foundations can donate funds to USDA for conservation purposes, like improving technical assistance for more farmers to have access to popular programs like EQIP. He cited a “great return on investment” from Chesapeake Bay Foundation initiatives as an example.

But he pushed back on the Ag Secretary’s use of CCC funds for such purposes because administrations come and go, with their own changing priorities.

“Having certainty going forward is incredibly important,” he said. “Sec. Vilsack wanted to do things by regulation and his interpretation of how CCC funds could be used. He should have come to us (Congress), instead.”

Likewise, concerns were voiced about emerging land use policies at local, county, state and federal levels.

Renewable energy

Asked for their views on traditional and alternative energy, a bipartisan preference emerged for balancing affordable and renewable sources with science, technology and innovation as “pathways for solutions.”

“We need ‘all of the above’ because energy will be a mix for a very long time,” said Pingree. “But we have to stay in this (renewable) dialog.”

Thompson said the ultimate destination of the Farm Show butter sculpture — a digester on a Pennsylvania dairy farm — is a good example of renewable energy produced from cow manure and food waste.

Craig said biofuels through E15 standards are vital for corn and soybean farmers in her district of Minnesota, with new biobased aviation fuel standards an exciting opportunity that U.S. farmers should benefit from, not imported corn from Brazil.

“Our farmers have to be at the forefront of it, we have to get this right,” said Craig. “As Ranking Member, I’ve got to manage my caucus just like GT does as Chairman, to work together for the right solutions, which are probably somewhere in the middle.”

Food security

Questions were also raised about invasive species, animal health, and safeguarding the food supply — especially in regard to inspection of border crossings for invasive pests that threaten all types of agriculture and novel cross-species migration of highly pathogenic avian influenza (HPAI H5N1) in poultry and now dairy operations.

“We have to make sure we keep investing in our laboratories, inspections, and research,” said Thompson.

According to Redding, the Pennsylvania Diagnostic Laboratories System (PADLS) was born out of the poultry industry’s first difficult encounter with avian influenza back in the early 1980s. Today PADLS is instrumental as the state is one of the first to enter the mandatory national bulk milk testing strategy, and has established some protocols credited to the poultry industry.

He stressed the importance of cross-species engagement between Pennsylvania’s top two ag sectors of poultry and dairy, where biosecurity is essential.

“We’re at about 100% of milk representing our nearly 5000 dairy farms, and we’ve not found (H5N1) on the third cycle of testing now,” Redding reported. “The difficulty with a national strategy is finding a model that fits the diversity of all the states.”

Craig said HPAI is a big concern for her home state of Minnesota, which is No. 1 in turkey production and No. 7 in dairy.

They look forward to working with the new U.S. Secretary of Agriculture on what the national strategy looks like going forward “without overburdening the farmers.”

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The good, bad, and unknown of new FMMO pricing formulas ‘approved’ by producer referendum

Posted on January 23, 2025 by Agmoos

Calvin Covington shared that the collective impact of all the FMMO changes on the Northeast Order farms is likely to be neutral to slightly beneficial, while farms in the three Southeast Orders will benefit the most because of bigger Class I differentials and greater Class I utilization. Butterfat and other solids prices will be lowered, and the wild card will be protein because barrel cheese prices moved higher than blocks in 2024, but the barrel price will no longer be used in the protein price formula after June 1st. Photo by Sherry Bunting

By Sherry Bunting, Farmshine, Jan. 31, 2025

SAVANNAH, Ga. and EAST EARL, Pa. — As part of his annual outlook for Southeast milk markets, and also in his look ahead for the milk market nationally and in the Northeast, well-respected retired milk co-op executive Calvin Covington broke down the final USDA Federal Milk Marketing Order (FMMO) formula changes into three categories: The positive, the negative, and the unknown. (Plus, there is also the ‘unvetted.’)

Covington spoke to over 300 attendees from 10 states at the 2025 Georgia Dairy Conference in Savannah on Jan. 20^th, just a few days after USDA’s announcement that producers in each of the 11 FMMOs approved the final rule. Then, on January 28th, he was in eastern Lancaster County, Pennsylvania speaking to 250 dairy farmers on this topic at R&J Dairy Consulting’s 18^th Annual Dairy Seminar at Shady Maple Smorgasbord.

The FMMO changes will be implemented June 1, 2025, except for the increased milk composition factors, which will be delayed six months due to impacts on “risk management.”

Covington shared collective analysis based on USDA’s backward-looking data (2019-23), showing that all six pricing changes, combined, would have benefited producers by 26 cents per hundredweight across all FMMOs, nationwide, during those years.

“But, like the disclaimer on a financial prospectus, ‘past performance is not an indicator of future results.’ It is all relative,” he said. “The three Orders of the Southeast are by far the biggest beneficiaries, but going forward, there are a lot of things we just don’t know.”

Calvin Covington shared analysis of how the recently approved FMMO milk pricing changes could collectively impact each of the 11 Orders, but warned that analysis based on past performance, may not be an indicator of future results.

Orders with estimated negative net impact at test are: Pacific Northwest (124) -5 cents; Upper Midwest (30) -9 cents; Arizona (131) -11 cents; and California (51) -27 cents.

Orders with estimated positive impacts at test are: Appalachian (5) +$1.90; Southeast (7) +$1.80; Florida (6) +$1.43; Central (32) +52 cents; Mideast (33) +50 cents; Northeast (1) +35 cents; and Southwest (126) +7 cents.

The good

“The Southeast will see the majority of benefit, with the updated Class I differentials,” Covington reported, illustrating how they vary by location for an average increase of $1.42 per cwt across the country – but only for Class I milk. The three Orders of the Southeast will see more of this benefit because they have the largest Class I differential increases and their blend prices are predominantly Class I.

A University of Wisconsin-Madison study had previously looked at where the plants are and where the milk is, in order to think about moving milk from where it more is produced to where it is needed.

The highest differential increase is along the route 85 corridor, beginning near Atlanta, up into West Virginia, where there are plants but no milk. Interestingly, his chart showed that the smallest increases for the region are in Florida locations as well as Valdosta, Georgia, where the new Walmart milk plant is being built.

In the Northeast, Covington said dairy farmers will have to get used to what this looks like on their milk check, and they will also see more incentive to move milk South under these new differentials.

“Each county has a differential assigned to it,” he said, pointing to the area of the R&J Meeting, near New Holland seeing a $1.40 per cwt. increase in Class I differential, but this is a smaller increase compared to the much larger increase put on at Boston, Mass.

“That big increase in Boston is because there’s not any milk around there, and it’s raised to get the milk to move to the people there,” he said. This means that even though the new Class I differential will raise the Class I price in New Holland, “farmers will have to get used to seeing their location differential as a bigger negative on the milk check,” because the increased differential in Boston is so much bigger.

The milk composition factor updates are straightforward, he said, yielding about a 35 cents per cwt benefit to the Class I milk price in all FMMOs, and will raise the standardized skim value of the other classes in the three southeastern Orders that are still priced as fat/skim instead of by multiple component pricing.

The bad

The make allowance increases will lower the price for butterfat and other solids value, he said, “but we don’t know what will happen with the protein price because of the elimination of the barrel cheese prices from the formula.”

This will manifest as lower butterfat and other solids component prices for the Northeast, he said. “We would expect the protein price to be higher, based on history, but that depends upon the block to barrel price spread and its relationship to the butterfat price.

The unknown

Historically, the 500-pound barrel cheese price was lower than 40-pound block price.

“Last year, however, barrels have been higher, so we don’t know,” said Covington.

Also in the unknown category is the return to the ‘higher-of’ as USDA’s method for setting the base Class I skim price.

“In the past five years, the average-of method cost dairy farmers millions of dollars, but we don’t know going forward if the skim factors (Class III vs. Class IV) will get back to being closer together, which would lower prices. If the spread stays wide, this change to the higher-of will increase prices,” he explained.

When asked if the Covid pandemic created the loss in Class I value under the average-of vs. higher-of, Covington said the Covid period — while most obvious — only accounts for one year out of five years in which the spreads between Class III and Class IV and between block and barrel cheese were detrimental.

“The thing going forward is, we just don’t know,” he said.

The unvetted

The sixth change is not listed separately in the Jan, 16^th USDA notice to trade, and it was not part of any hearing proposal. Covington said he views the extended shelf life (ESL) adjuster as “a new class of milk.”

“The ESL adjuster is only on Class I. You’ll have a Class I mover skim price that will be calculated for conventional milk based on the higher-of III or IV,” he said. “Then you need a big spreadsheet to show what’s going to happen next. They’ll look 36 months previous to 12 months previous at the difference between the higher-of and the average-of, and that will be the adjuster to use for ESL milk that month.”

He estimates the ESL adjuster would have averaged -30 cents in 2024, but for some months it would have been a plus.

“My initial analysis is that it will not make a whole lot of difference in the short term, but we just don’t know going forward if some will try to manipulate this,” he said. “My concern is that it was not proposed at the hearing at all, and there’s no definition for extended shelf life. I know being in this business all these years, if there is a way to work around it for a benefit, they will find a way to do it.”

When asked about the competitive issues between conventional and ESL fluid milk and between out-of-area packaged ESL milk competing with in-area fresh milk, Covington observed potential competitive issues between conventional and ESL milk in the same area.

“You’ll have two different costs at the same location. What has always been the beauty of the Federal Order system is having the same raw product costs at the same location,” he said, adding that new ESL plants are being built and others are expanding.

“As ESL grows… there could be some months with a price advantage,” Covington suggested, pegging that difference historically to be as much as $1.00 per cwt in some months. “That kind of difference can create disparity between conventional and ESL milk.

“The thing is, we just don’t know, going forward, what it’s going to look like.”

Covington urged farmers to pay attention and be involved. Federal Order reforms are a slow process involving a lot of time and compromise. Changes this big only happen about every 25 years, he said.

He noted that Farmshine has kept dairy farmers “well-informed” with effective reporting on the markets and the FMMO process.

He said that as more manufactured products are sold and less fluid milk, compared with 25 years ago, the future could look different if future administrations and lawmakers feel differently about the pricing of milk. If manufacturers perhaps choose not to participate, FMMOs could some day be looked to primarily for handling the payments and test weights.

However the future plays out, Covington urged: “Stay informed and be involved because it is your milk check.”

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Good news may trump bad nutrition policies

Posted on January 13, 2025 by Agmoos

Editorial Analysis: Tumultuous 2024 spills over into 2025 – Part One

By Sherry Bunting, Farmshine, January 3, 2025

EAST EARL, Pa. – Year 2024 was tumultuous, and 2025 is shaping up to be equally, if not more so. Spilling over from 2024 into 2025 are these three areas of potential for good news to trump bad nutrition policies that are having negative impacts on dairy farmers and consumers.

Farm bill and whole milk bill

Both the farm bill and the whole milk bill showed promise at the start of 2024. No one championed the two pieces of legislation more than House Ag Committee Chairman Glenn ‘GT’ Thompson (R-15^th-Pa.). He even found a way to tie them together — on the House side.

The Whole Milk for Healthy Kids Act made it farther than it ever has in the four legislative sessions in which Thompson introduced it over the past 8 to 10 years. It reached the U.S. House floor for the first time! But even the overwhelming bipartisan House vote to approve it 330 to 99 at the end of 2023 was not enough to seal the deal in 2024.

That’s because over in the U.S. Senate, then Ag Committee Chairwoman Debbie Stabenow (D-Mich.) blocked it from consideration — despite over half her committee signing on as cosponsors.

GT Thompson, found a workaround to include it in the House farm bill, which passed his Ag Committee on a bipartisan vote in May. The language was also part of the Senate Republicans’ draft farm bill under Ranking Member John Boozman (R-Ark.)

It too fell victim to Stabenow dragging her feet in the Senate. By the time the Ag Chairwoman released a full-text version of the Senate Democrats’ farm bill, little more than 30 days remained in the 2023-24 legislative session.

Key sticking points were the House focus on dollars for the farm side of the five-year package. It put the extra USDA-approved Thrifty Food Plan funding into the overall baseline for SNAP dollars and brought Inflation Reduction Act climate-smart funds under the farm bill umbrella while removing the methane mandates to allow states and regions to prioritize other conservation goals, like the popular and oversubscribed EQIP program.

Attempts to broker a farm bill deal failed, and on Dec. 20, another one-year extension of the current 2018 farm bill was passed in the continuing resolution that keeps the government funded into the first part of 2025, without amendments for things like whole milk in schools. However, Congress did manage to provide $110 billion of disaster relief for 2022-24 hurricanes, wildfires, and other events. Of this, roughly $25 billion will go to affected farmers and ranchers, plus another $10 billion in economic disaster relief for agriculture.

Looking ahead, there is good news for the farm bill and whole milk bill in the new 2025-26 legislative session. The House Ag Committee will continue under Rep. GT Thompson’s leadership as Chairman. On the Senate side, whole milk friendly Boozman will chair the Ag Committee. With Stabenow retiring, Sen. Amy Klobuchar (D-Minn.) will serve as Ranking Member, and she previously signed on as a Whole Milk for Healthy Kids Act cosponsor in March 2024.

The whole milk bill will have to start over again in the Education and Workforce Committee with another vote on the House floor. It was enthusiastically supported by prior Education Committee Chairwoman Virginia Foxx (R-5^th-N.C.). Her years of chairing this committee have expired, but the good news is Rep. Tim Walberg (R-5^th-Mich.) will step in, and he was an early cosponsor of the Whole Milk for Healthy Kids Act in the 2021-22 and 2023-24 legislative sessions.

New Dietary Guidelines

The 2025-30 Dietary Guidelines Advisory Committee (DGAC) submitted its ‘Scientific Report’ to the outgoing USDA and HHS Secretaries on Dec. 19, 2024 — just 40 days before they head out the door to be replaced by incoming Trump appointees.

The Report is the guidance of the so-called ‘expert committee’ that reviews evidence and makes recommendations for the Secretaries of USDA and HHS to formalize into the 2025-30 Dietary Guidelines for Americans (DGAs). This process occurs every five years.

The DGAs are used in all USDA feeding programs, including school lunch, childhood daycare, and eldercare institutional feeding, as well as military mess halls. They also inform food offerings in many other controlled settings.

The bad news is the Report has gone from being increasingly pro-plants over the past nine cycles to being outright anti-animal in this 10^th cycle.

The good news is that dairy keeps its special spot on the so-called ‘My Plate.’ The bad news is that despite acknowledging evidence about the benefits of milkfat in nutrient dense milk and dairy foods, the DGAC rated the evidence as ‘limited’ – largely because USDA screened much of it out of the review process.

In the section on under-consumed nutrients of public health concern, especially for children and elders, the DGAC noted that whole and 2% milk were top sources of three of the four: Vit. D, calcium and potassium. Even this was not enough to persuade them to loosen the anti-fat grip that governs milk in schools, daycares and eldercare.

The DGAC states in its Report that their ‘limited access’ to research showing positive relationships between higher fat dairy and health outcomes was “too limited to change the Guidelines.”

They even doubled-down on the beverage category by recommending against flavor-sweetened fat-free and low-fat milk and that water be pushed as the primary beverage.

In the Report, the DGAC also doubled-down on saturated fat with recommendations to “reduce butter, processed and unprocessed red meat, and dairy for replacement with a wide range of plant-based food sources, including plant-based protein foods, whole grains, vegetables, vegetable (seed) oils and spreads.”

This opens the door for more non-dairy substitutes beyond soy-milk, which is already allowed in the dairy category. In fact, the Report looks ahead to future cycles changing the name of the dairy category to broaden what qualifies as makers of new dairy alternatives improve their nutrition profiles via ultra-processing. At the same time, the DGAC punted the ball on the question they were given about “ultraprocessed” foods and beverages, stating they didn’t have access to enough evidence on health outcomes to answer that question. (The next HHS Secretary might have something to say about that.)

Other animal-based foods such as meat and eggs took a big hit this cycle. The 2025-30 Report uses stronger methods for discouraging consumption. They recommend moving peas, beans and lentils out of the vegetable category and into the protein category and listing them FIRST, followed by nuts and seeds, followed by seafood, then eggs, and lastly meat.

Once again ‘red meat’ is mentioned throughout the report as being lumped in with ‘processed meat’ even though not one stitch of research about negative health relationships with processed meats included any unprocessed red meat in the studies! Clearly, consumption of whole, healthy foods from cattle is in the crosshairs. This 10^th edition of the Scientific Report just continues the trend.

As in past cycles, a whole core of research on the neutral to beneficial relationships between consumption of saturated fat in high-protein, nutrient-dense foods was screened out of the DGAC’s review process by current Ag Secretary Vilsack’s USDA.

This Report essentially sets the stage for ultra-processed plant-based and bioengineered alternative proteins to play a larger role in the institutional meal preps of American schools, daycares, eldercare, and military.

But here’s the good news! The DGAC was late in finishing its 2025-30 Scientific Report!

The law requires a 60-day public comment period before USDA and HHS formulate the actual Guidelines for 2025-30. This mandatory comment period ends Feb. 10, 2025. Comments can be made at the Federal Register link at https://www.regulations.gov/document/HHS-OASH-2024-0017-0001

By the time the comment period ends, Vilsack and company will have left town. Let’s hope Senators confirm Trump appointees before the public comment period ends on Feb. 10 so their eyes are on this before the bureaucracy finishes the job.

This is a golden opportunity for the dairy and livestock sectors, along with health and nutrition professionals and health-conscious citizens to weigh-in. (Look for ways to participate in a future Farmshine.)

Meanwhile, commenters can remind the incoming Secretaries of how flawed the DGA process has become; how Americans, especially children, have become increasingly obese with increasing rates of chronic illness and underconsumption of key fat-soluble nutrients during the decades of the DGA’s increasingly restrictive anti-fat, anti-animal dogma.

Commenters should point out the fact that the Committee was not provided with all of the evidence on saturated fat. This is a message that is likely to land well with USDA Secretary designate Brooke Rollins and HHS Secretary designate Robert F. Kennedy Jr. In fact, RFK Jr. is on record opposing the low-fat dictates and has said nutrition will be among his first priorities, if he is confirmed by the Senate for the HHS post.

FDA’s final rule on ‘healthy’ labeling

In the mad rush at the end of 2024, the FDA released its final rule about using the term “healthy” on the label of foods and beverages.

This process was outlined in the White House National Strategy on Hunger, Nutrition and Health. FDA’s preliminary ‘healthy’ labeling rule was released on Sept. 28, 2022, on the first day of the first White House Nutrition Conference since the 1980s.

At that Conference, Ag Secretary Vilsack said: “The National Strategy’s approach is a whole of government approach that involves the entire federal family.” And President Biden said: “We have to give families a tool to keep them healthy. People need to know what they should be eating, and the FDA is using its authority around healthy labeling so you know what to eat.”

In short, the FDA’s role here is to restrict healthy label claims to foods and beverages that meet its criteria and allow them to also use a new FDA ‘healthy’ symbol that is still under development.

“Nutrient-dense foods that are encouraged by the Dietary Guidelines – vegetables, fruits, whole grains, fat-free and low-fat dairy, lean game meat, seafood, eggs, beans, peas, lentils, nuts, and seeds – with no added ingredients except for water, automatically qualify for the ‘healthy’ claim because of their nutrient profile and positive contribution to an overall healthy diet,” the FDA final rule states.

No surprise that whole milk (3.25% fat) will not qualify, nor will real full fat cheeses, yogurts, and other dairy foods that are not fat-free or low-fat (1%). Natural, unprocessed beef, pork and poultry are off the ‘healthy’ list too.

Specifically, the FDA’s final rule states: “To meet the updated criteria for the ‘healthy’ claim, a food product must: 1) contain a certain amount of food from at least one of the food groups or subgroups (such as fruit, vegetables, grains, fat-free and low-fat dairy and protein foods) as recommended by the Dietary Guidelines for Americans, and 2) meet specific limits for added sugars, saturated fat, and sodium.

The fat and sodium criteria are a double-whammy against most real dairy cheeses. A single 1-oz slice of American, Swiss, or Cheddar won’t make the cut on saturated fat or sodium; even part-skim Mozzarella is slightly over the limit. Furthermore, low-fat, high-protein cottage cheese barely makes the cut on saturated fat, but far exceeds the new limit on sodium. Likewise, a typical yogurt cup only qualifies if it is low-fat or non-fat, and fruited yogurts must steer clear of added sugars.

Dairy can’t win in this labeling scheme unless products are made with virtually no saturated fat and far less sodium. To sell flavorless cardboard and chalk water that fails to deliver key fat-soluble nutrients, products will undergo more ultra-processing, and Americans will consume more artificial sweeteners.

Under dairy products, FDA’s final rule for ‘healthy’ label claims states: 1) Must contain a minimum of 2/3 cup food group equivalent of dairy, which includes soy; and 2) Each serving must have under 2.5 g of added sugar, under 230 mg sodium, and under 2 g saturated fat.

This means even a serving size of exactly 2/3 cup (6 oz) of 2% milk might barely squeak by, and a full cup (8 oz) of 1% or fat-free milk would be – you guessed it – ‘healthy’. Flavoring the fat-free and low-fat milk will not qualify, except by using artificial sweeteners to stay within added sugar limits.

Under protein foods, the FDA is even more restrictive. The only protein foods listed in the ‘healthy’ labeling final rule are: game meat, seafood, eggs, beans, peas, lentils, seeds, nuts, and soy products. Furthermore, these options must meet the criteria of less than 1 g added sugars, less than 230 mg sodium and less than 1 to 2 g saturated fat.

But here’s the good news! This FDA final rule (21 CFR Part 101, RIN 0910-AI13) falls under the Department of Health and Human Services (HHS). It’s not likely to sit well with HHS Secretary designate RFK Jr. The rule becomes effective Feb. 25, 2025. The compliance date is three years later, so there is hope of requesting HHS initiate a new rulemaking process under new HHS leadership.

Bottom line is all three of these bad nutrition policies impact consumer health and dairy farm economic health and are rooted in the flawed Dietary Guidelines process.

There is good news on that front in Congress as well. House Ag Committee Chairman GT Thompson included DGA reform and oversight in the farm bill that had passed his Committee in the 2023-24 legislative session. It is critical that this issue be part of the new farm bill that moves forward in the 2025-26 legislative session.

Part II in a future Farmshine will look at the tumultuous 2024 dairy markets and margins spilling over into 2025.

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Organizations react to USDA, HHS picks as Trump nominates Brooke Rollins to top Agriculture post

Posted on December 1, 2024 by Agmoos

Brooke Rollins, photo courtesy America First Policy Institute

Bringing whole milk choice back to schools could align with Rollins’ and Kennedy’s priorities

By Sherry Bunting, Farmshine, November 29, 2024

WASHINGTON, D.C. – President Elect Donald Trump has nominated Brooke Rollins of Fort Worth, Texas to be the 33rd U.S. Secretary of Agriculture. She would be the second woman to serve in the top USDA post, the first being Ann Veneman in 2001 under President George W. Bush.

Trump’s announcement Saturday, Nov. 23 brought ripples of surprise across ag media outlets after many had floated a long list of other names under consideration.

In the end, it came down to Rollins, a lawyer and trusted advisor who previously served on Trump’s 2016 Economic Advisory Council as well as Director of Domestic Policy Council and Assistant to the President for Strategic Initiatives in Trump’s first term.

Rollins has spent the past four years as founder and CEO of the America First Policy Institute (AFPI). Trump highlighted her commitment to American farmers, food self-sufficiency, and rural small-town restoration.

The AFPI has not had much to say on agriculture, specifically, but has advocated for a ban on China’s ownership of American farmland. Rollins also spoke out against any sort of carbon or methane tax in a 2018 Texas Public Policy Foundation broadcast.

“As our next Secretary of Agriculture, Brooke will spearhead the effort to protect American farmers who are truly the backbone of our country,” Trump stated.

Raised with a generational ranching background in the small town of Glen Rose, Texas, Rollins was involved in 4-H and FFA leadership and credits her high school ag teacher for “changing her life.”

She earned her B.S. in agriculture development at Texas A&M and spent her public policy career in nonprofit and governmental leadership at the state and federal levels.

She and her husband Mark have four teenage children, who avidly show cattle.

While searches for paper or interview trails on her agriculture policy positions come up mostly empty, what can be gleaned is that Rollins has the President-Elect’s ear and a penchant for analyzing issues with an ear to those affected, not just the ‘experts.’

In a post on X (formerly twitter), Rollins thanked Trump for “the opportunity to serve… It will be the honor of my life to fight for America’s farmers and our Nation’s agricultural communities. This is big stuff for a small-town ag girl from Glen Rose, Texas… Who’s ready to Make Agriculture Great Again?”

Ag and dairy organizations responded. Several took the opportunity to also weigh-in on Trump’s nomination of Robert F. Kennedy Jr. a week earlier for Secretary of Health and Human Services with the Make America Healthy Again agenda.

The two departments jointly issue the Dietary Guidelines for Americans (DGAs) every five years, which USDA uses to regulate meals (and milk) served at schools, daycares, and senior centers. A large chunk of USDA’s massive budget and staff administer and regulate nutrition programs.

The next cycle of DGAs is already in process with the two new USDA and HHS secretaries tasked with finalizing the 2025-30 DGAs by the end of next year that will set the rules for schools and other nutrition programs for years to come.

American Dairy Coalition CEO Laurie Fischer observed in a statement that the incoming secretaries will have the opportunity “to fix food nutrition policy, such as a long overdue reform of the Dietary Guidelines that govern school meals where children have been prohibited from choosing whole milk and 2% milk since 2010.”

Grassroots Pennsylvania Dairy Advisory Committee chairman Bernie Morrissey also expressed hope that Rollins and Kennedy, if confirmed by the Senate, will work together to bring the choice of whole milk back to schools.

“For far too long, America’s children have been deprived of the choice of delicious, nutrient-dense whole milk. USDA requires schools to only offer fat-free and 1% low-fat milk. Many children throw that milk away, so they are missing nature’s nutrition powerhouse. Now, more than ever, we need to offer the “good stuff,’” Morrissey stated, adding that “Rollins is a mother, and that helps. We have mothers on our committee and they really get it.”

He explained that his committee includes dairy farmers, allied industry representation, a recently retired internal medicine doctor, school nurse, school foodservice director, and former school board director who have worked on this issue over more than a decade. He wants the incoming secretaries to understand the problem so they can unwind the decades of worsening low-fat rules that pave the way for more ultra-processing leaving children with less nutrient-dense choices and unfavorable nutrition and health outcomes.

“We look forward to working with the next Administration on reforms that allow dairy farmers to market the whole milk they produce and allow children the opportunity to choose milk they will love,” Morrissey added. “Our friends at the 97 Milk organization are doing a wonderful job educating the public. Now, we just need real leaders willing to stand up and roll back the federal ban on whole milk in schools. We are eager to help Make America Healthy Again and Make Agriculture Great Again.”

The International Dairy Foods Association (IDFA) has conducted surveys showing the vast majority of parents want their kids to have the choice of whole milk at school.

In his response to the Rollins and Kennedy nominations, IDFA CEO Michael Dykes, DVM also highlighted the joint nutrition roles of USDA and HHS, citing the need to “enhance the diet quality of Americans, protect the integrity of food production and processing, and establish a regulatory environment that drives innovation and efficiency… to continue leading the world in the production of high-quality dairy nutrition.”

In a follow up interview with ADC, Fischer said dairy labeling integrity is another big issue for dairy farmers in the wheelhouse of both USDA and HHS. “We hope to see the restoration of labeling integrity in the dairy case when it comes to plant-based lookalikes that don’t even come close to real dairy’s nutrition. That includes the regulation and clear labeling of these novel bioengineered fake ‘dairy’ and ‘meat’ lab-created proteins.”

More broadly, she cited the need for real world application of sound farmer-led policy and innovation that meet the realities farmers face daily.

“ADC looks forward to working with the next Secretary on ways to reduce redundancies and wasteful spending to improve efficiency so more of the dollars intended to support farms get to the actual farmers. We are encouraged by Rollins’ history with the Office of American Innovation in Trump’s first term because our farmers are key innovators and lifelong stewards of natural resources,” she said.

As of Nov. 26, National Milk Producers Federation (NMPF) had not yet released a public statement to the media on the nominations of either Rollins or Kennedy, stating simply in a social media post on X: “Congratulations to Brooke Rollins on her nomination to become the next USDA Secretary. Dairy farmers are ready to hit the ground running in 2025!”

National Cattlemen’s Beef Association VP of government affairs, Ethan Lane touted Rollins’ “history of fighting for Main Street and Rural America. America’s cattle producers need a secretary of agriculture who will protect family farms and ranches, roll back crushing regulations, and stand up for rural values.”

American Farm Bureau president Zippy Duvall weighed in, noting the “good relationship” Rollins has with the Texas Farm Bureau: “We hope to build on that. We’re encouraged by her statement that she’d ‘fight for America’s farmers and our nation’s agricultural communities.’ Effective leadership at USDA is more important than ever as farmers and ranchers face a struggling agricultural economy.”

Trump’s cabinet nominations are now complete and require confirmation by the U.S. Senate.

Check out some other interesting perspectives on the next USDA Secretary, pending Senate confirmation.

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Milk Market Moos, Nov. 29, 2024

Posted on December 1, 2024 by Agmoos

USDA Standoff?

DTN policy editor Chris Clayton is reporting that a standoff could be brewing at the USDA between current Ag Secretary Tom Vilsack and the Trump transition team. Vilsack has urged the Trump team to sign “key ethics documents required by the Presidential Transition Act as soon as possible” so they can start the process of “educating folks… about what they are walking into,” and so the next Secretary of Agriculture “can be fully prepared for the job she is undertaking.”

After 12 years at the helm of USDA, with a 4-year intermission between the Obama and Biden Administrations, pulling a cool million in dairy checkoff salary, Sec. Vilsack has watered down dairy in the WIC program, mangled the recently completed Dietary Guidelines Advisory Committee selection and recommendation process, further deflated whole milk and dairy’s position in the school lunch and other nutrition programs, and has been tightly tied to his pet projects, especially the climate-smart partnerships he lobbied the Senate for in 2019 while working for DMI, given the ‘slush fund’ appropriated through the so-called Inflation Reduction Act that many describe as the undercover Green New Deal.

For that initiative, alone, Vilsack told the House Ag Committee a year ago he was hiring 4000 new USDA employees and that 4000 more would be needed at local levels to gather data, do the monitoring, and herd farmers into the data-collection squeeze chute to participate in climate-smart projects. The House Ag Committee expressed their concern about funds getting to actual farmers. (See Feb. 16, 2024 Milk Market Moos ‘carrot and stick’)

Hog wrestling strategy?

One could say there are a lot of pigs at the USDA climate trough. The whole deal needs a good auditing to see how much of what was spent or promised is getting into the hands of actual farmers and their on-farm contractors vs. going into the black hole of bureaucracy.\

While Trump’s Ag Secretary-Designate Brooke Rollins, still to be confirmed by the Senate, is only the second woman nominated to head the USDA, don’t let her femininity fool you. One thing we learned watching Rollins, 52, as a guest on legendary football coach Lou Holtz’s Nov. 4th Show about faith and leadership, this Texas Aggie was a hog wrestling champion.
Holtz asked Rollins about the hog wrestling title. It was 10 years ago when she and her sister Ann went to Bandera, Texas for an annual festival. They decided that year to enter the annual Wild Hog Explosion Contest. They won, even set a record, against younger women in the competition.

Rollins recalled: “We had a strategy and a plan, which seems to be a common theme in my life. You always have to have a strategy, and you always have to have a plan. We had a plan to wrestle that wild hog — and he was a wild, big hog — and put him into a bag and drag him across the finish line.”

A mom-coach could do wonders

USDA Secretary nominee Rollins also revealed that while coaching her daughter’s softball team a few years back when she was 10, they wrote their own mission statement that hung on the fence for every game. “Coaching is a reflection of life, to be our best, work as a team, have a common goal, never give up, and go for the win, every time.”

Rollins and Holtz talked of her leadership style to “find amazing people” to build teams that work together “not caring who gets the credit, but what gets accomplished.”

When asked the Bible verse most meaningful in her life, she said for this season in time “with the arrows slinging every which way,” Joshua 1:9 “Be strong and courageous. Do not be afraid; do not be discouraged, for the Lord your God will be with you wherever you go.”
One that strikes a chord throughout her life is: Matthew 25:40: “Whatever you did for one of the least of these brothers and sisters of mine, you did for me.”

When it comes to USDA’s failed nutrition policy, this verse rings true. It’s also worth noting that Rollins is a mother. That may be just what USDA needs at the top! Mom’s understand the school meal and school milk issue! Can we imagine how many more hungry children could be nourished if USDA devoted funds to the food that are now going to the bureaucrats calculating fat percentages and other criteria to regulate schools so they don’t violate the fat limits; and how much better off those children most reliant on school meals would be if they could choose nutrient-dense delicious whole milk, 3.25% healthy fat.

What’s up with milk production?

USDA Dairy Market News reports that milk availability is still tight for processors. Some processors expect milk availability to loosen in coming weeks, as plants slow production or shut down during the week of Thanksgiving. Class I bottling is strong as demand from schools is steady up to the coming holiday, and consumer demand increases. Demand from Class III is strong. Cheesemakers report that some plants are running as much as possible. Component levels are reported to be strong across the board. We’ll did into the report next week.

The USDA NASS milk production report released late Wednesday showed total U.S. milk production was up 0.2% in October vs. year ago. Meanwhile, milk production in the 24 major milk producing states gained 0.4% over year ago. For Q3, USDA reports total U.S. milk producers virtually flat with a year ago.

This indicates that states and regions that are expanding milk production rapidly in the Plains from western Minnesota, Iowa, South Dakota south to Texas, have large expansion units coming online — and their own circular systems for heifer-rearing are geared up to fill new stalls to supply new cheese processing that is coming online — perhaps not at all impacted by the overall tight supplies of milk cows, springing heifers, and bred heifers in today’s marketplace.

Remember, the current Secretary of Agriculture, Tom Vilsack, canceled the July 2024 mid-year All Cattle and Calf Inventory, so the industry won’t get a look at dairy and beef numbers until the end of January 2025.

In the East and Mideast, October’s milk production was generally steady vs. year ago. USDA estimates for Northeast and Midatlantic: Pennsylvania up 0.6%, New York up 0.2%, Vermont and Virginia down 0.5%; In the Southeast, Florida down 0.6% and Georgia up 1.9%; In the Mideast: Michigan up 0.5%, Indiana up 0.3% and Ohio down 0.2%.

Midwestern milk production slipped 0.2% and 0.5% in Wisconsin and Minnesota, but grew across the Central Plains, up 3.3% in Iowa, up 4.2% in Kansas, up 9.6% in South Dakota.
Southwest milk production grew a substantial 8.8% vs. year ago in the No. 3 milk producing state of Texas, while New Mexico continued its decline, off 4.4%.

California is in the midst of an escalation in bird flu with production down 3.3% vs. year ago. USDA APHIS reports 261 herds have had the virus in the past 30 days in California, 436 since the first outbreak there in September.

Dec. Class I mover drops $0.90 at $21.43

The December advance Class I base price mover was announced at $21.43 on Wed., Nov. 20 for a loss of 90 cents per hundredweight below November’s Class I mover, but up $1.67 per cwt. above a year ago.The USDA NASS milk production report showed total U.S. milk production was up 0.2% in October vs. year ago. Meanwhile, milk production in the 24 major states gained 0.4% over year ago. For Q3, USDA estimates total U.S. milk production virtually flat vs. year ago.

Class III milk slips lower despite less cheese

Despite USDA again reporting cheese stocks smaller than a year ago for the 8th straight month, dwindling to levels 8% below year ago, the CME spot cheese price headed south this week, dragging Class III milk futures lower too. On Tues., Nov. 26, Class III milk future averaged $18.77 for the next 12 months (Nov24-Oct25), losing 29 cents/cwt — more than was gained last week. Class IV milk futures were mixed, but the 12-month average fell a dime to $20.85.

CME dairy lower, but whey skyrockets

Dairy product prices on the CME daily spot market lost ground across the board this week, except dry whey gained an unprecedented nickel per pound, reaching just shy of what would be a near record 70 cents per pound.

On Tues., Nov. 26, the ‘market clearing’ dry whey price on the spot CME was a whopping 69 cents/lb with 6 loads trading over the 4 days pre-holiday. That’s more than a dime per pound higher than the weekly USDA National Dairy Product Sales Report price that has lagged all year and is the one used in the Federal Milk Marketing Order pricing formulas. Whey is usually the commodity to watch in relation to future milk prices, but it’s not translating. The 40-lb block cheddar price was pegged 4 cents lower at $1.6950/lb with just 2 loads trading over 4 days. Pegged at $1.64/lb, the 500-lb barrel cheese price lost 9 cents per pound with 8 loads trading across the 4 days.

On the Class IV side, the spot butter price fell 11 cents per pound, pegged at $2.4850/lb with 18 loads trading. Nonfat dry milk lost the penny gained last week, pegged at $1.39/lb with 21 loads trading in 4 days.

Live cattle imports from Mexico ‘paused’

USDA APHIS will halt cattle imports from Mexico due to a detection of New World screwworm (NWS) in Mexico Nov. 22. It was discovered in a cow at an inspection checkpoint close to Mexico’s border with Guatemala. USDA reports that around 5% of feeder cattle placements come from south of the border, meaning this pause in live cattle imports will further tighten beef supplies. The USDA cold storage report indicates red meat supplies continue to run below year ago levels.

How these dairies manage with innovation, diversity

Posted on November 27, 2024 by Agmoos

By Sherry Bunting, Farmshine, November 15, 2024

HARRISBURG, Pa. – Innovation on the dairy farm isn’t just the big investments that come to mind, but a mix of changes and a mindset to improve. Three distinctly different Pennsylvania dairy farms were showcased in a producer panel during the 2024 Dairy Financial and Risk Management Conference hosted by the Center for Dairy Excellence recently.

The audience of mainly ag lenders and industry representatives along with some fellow dairy farmers, had the opportunity to see how producers think through the challenges, progress, and investments, and how they manage their risk in areas such as herd health, feed and nutrition, as well as adversities they can’t control like weather, markets, and labor.

Automation at Oakleigh

For Matt Brake of Oakleigh Farm, Mercersburg, the five-year plan was accelerated in a different direction after a barn fire in December of 2019 forced the family to ask the question whether they would even continue in dairy. No animals were lost, and the 1950s parlor was saved, but they had big decisions to make about the future without a facility.

“We did a lot of praying and had a lot of difficult conversations,” he recalls.

By July 2020, they were milking 120 registered Holsteins with two Lely robots, automated feeding, automated bedding, and retained their preference for a bedded pack barn rebuilt within the existing footprint.

“We really appreciate the cow comfort we get from a bedded pack, and the longevity, which is something we are really seeing now, more than ever,” Brake explains.

They didn’t know — at first – that they would go robotic, but they did know the Lely Vector feeding system would be used for feeding in place of buying a new tractor and mixer and firing it up twice a day.

“It’s amazing to see how all these different pieces of technology play together,” says Brake.

The curtains and fans are all automated and integrated. All data points for the herd are displayed on every single milking. The system ranks cows from zero to 100 on percentage chance of illness, and the automatic sorting for individual attention is based on things like activity, rumination, production, and intakes.

“Everything just plays together in real time, without guessing. We’re still involved as managers, but the data and automation are the tools we didn’t have before. We saw an increase in production, but farming is still farming,” Brake relates, giving examples of ration changes that had to be made with a forage quality issue, and how data systems helped with early detection.

Overall, the animals are doing better in this system, and they are treating fewer cows because they are getting to them earlier.

“It’s really true that an ounce of protection is better than a pound of cure. The quicker we can give those cows the attention, the less likely they are to really nosedive on us,” he says.

Brake sees how automation saves labor in some respects, but it’s more accurate to say that, “With automation, we are better utilizing our skills. We’re able to spend our time better with the cows or focusing on priorities – like chopping corn or getting the alfalfa harvested at the right time.

“We don’t have to stop those activities two times a day or worry about if we have enough help in the parlor, and do we trust that person to stand in the parlor. The robot might ‘call in sick’ temporarily here and there, but in general, compared with some of the employees we’ve had, it’s reliable.”

Moving from just the paper DHIA to incorporating this into the electronic records, changes how they manage culling to be more voluntary than involuntary.

“We can look at space and overcrowding and begin to evaluate cows not just on milk but how efficient they are in the robots looking at deviation from the average with rankings on everything from performance in the robot to reproductive performance and past treatments and other metrics,” he explains.

Better management of the culling decisions also gives them the ability to plan how many heifers to raise. “One of the things we are doing is using more beef semen and using the system to decide who to use it on,” he says.

Renovation at Mount Rock

For Alan Waybright, innovation was the focus when he purchased Mount Rock Dairy from the Mains five years ago near Newville.

A building project was in order to update the over 30-year-old milking systems. About a year ago, they began milking in a 50-stall rotary, which changed the milking time on 2.5 times a day with each milking in a double-12 taking 9 hours, to now milking 4 times a day with each milking taking 3 hours and 45 minutes.

Waybright has been expanding from the 650 cows and 150 bred heifers he brought to Mount Rock from his prior home farm involvement at Mason Dixon, to milking 940 cows today with a 92-pound average, 4.2F and 3.3P.

Automation features were part of the rotary to reduce labor, and the calf barns include the wet barn to get them started before grouping for automatic feeders where they receive four to five feedings a day, resulting in healthier, better growing calves.

With the automated pre- and post-dipper, Waybright says the milking procedure in the DeLaval 50-stall rotary is very consistent, requiring just two employees, the first to wipe and forestrip and the second to dry and attach.

“This is a labor savings, yes, but there have been other benefits for udder health too,” Waybright reports. “When we went from the double-12 where we were hand dipping to the sprayer, a 50-gallon drum used to last seven days, now it’s three days.”

One of the innovative things he has worked on is the use of manure solids for bedding while keeping somatic cell counts low. His system uses two screw-presses dropping manure into the drum, leaving about two days’ worth of bedding at the other end with moisture levels around 50%.

They bed stalls every day during the week to use the solids as they come right out of the separator drum, adding acidifying ag lime to control mastitis.

Diversity key at Slate Ridge

“For us the secret weapon is diversity,” says Ben Peckman of Slate Ridge Dairy, Thomasville. He and his wife and high-school aged children milk 150 cows and raise 100 heifers, also feeding out all bull calves as steers.

He says there’s not one multi-million-dollar investment here, just the things that altogether add up to make a large impact.

At the dairy, he looks for ways to streamline, like ovsynch for repro. “It’s the little pieces here and there, he says, mentioning the machine with a smart phone app he purchased to do daily dry matter analysis on feedstuffs before mixing.

“Instead of always looking at the past for those adjustments, I can go out and see what the DM is right now,” says Peckman.

He fills the small sampler with three samples to get an average. “I have feed charts on my phone, pop in that number, and it changes out what I put in the mixer to get the same DM pounds,” he explains.

With feed stored in drive over piles, this is even more important to get the accurate measures each day, according to Peckman, who sees how it changes daily, firsthand.

“On a rainy day, it goes up, and on a dry, hot day, it goes down,” he says. “When changes happen day to day, testing every two weeks is not enough. My spreadsheet smooths out the changes by using the average of the past three days. When we started doing this we saw better production and components.”

A robotic feed pusher is another feed technology that’s made a difference. “We see higher intakes, fresher feed, labor savings and the ability to do this when I’m not there,” Peckman relates.

Bankers asked what ‘calculus’ goes into making such investments. For Peckman, the answer was blunt. “It’s something that improves how my herd performs but the robotic pusher does something I’m not willing to do. I’m not getting out of bed at 2:30 a.m. to push up feed.”

Other barn updates include ventilation controls and ceiling fans above bed pack areas. It’s better for cow comfort but there’s also a cost savings. “We use half as much straw and bedding with the new fans drying the air.”

His wife’s mobile milk pasteurizer is another innovation. They always fed whole milk and had a few problems when they fed it unpasteurized.

With the mobile pasteurizer, it’s two-fold: “the milk is better, but also the temperature is much better. It keeps the milk warmer, and we have healthier, better growing calves.”

Peckman really enjoys the cropping side, farming 1100 acres of diversified crops to feed the cowherd and take advantage of other markets.

“Diversity is how I mitigate risk. It’s my key technology. Diversity can’t be bought, but it pays. It helps me combat weather, combat markets, and combat other adversities in general,” he says, adding that it’s “not rocket science,” just looking at things other farmers are doing and adapting.

He does use GPS guidance for his tractors for planting and spraying, which saves seed and inputs and work off field monitoring with yield maps.

In addition to traditional corn for grain and silage and alfalfa haylage, they grows high oleic soybeans at Slate Ridge Dairy. “We saw a drastic increase in butterfat percentage,” Peckman reports.

On his silage ground, small grains are grown — triticale, wheat, and barley. The barley he harvests after it gets the head, two weeks before it would be a grain harvest, as silage for feeding heifers.

One “big new innovation” he’s excited about is male sterile forage sorghum.

“It puts a head on without developing grain in the head,” Peckman explains. “This allows the plant to concentrate on putting energy into a plant that is a high sugar crop not a high starch crop. It’s very comparable to corn silage. I take a pound of corn silage out of the ration and put a pound of this stuff right in.”

He has replaced up to 40% of his corn silage with this particular sorghum silage and would like to get to 50% because “it’s a very economical feed to grow, the seed is cheap and inputs are less. It’s working well for me, but you have to have a way to harvest it as the BMR forage sorghums don’t ‘stand’ all the way to harvest.

“We started feeding this two years ago, and our components are up.”

Another newer crop in Peckman’s diversified portfolio is milo, or grain sorghum. He says it’s economical to grow and drought resistant, and they have a market for bird seed.

The wheat is grown as a cash crop but it has been fed too. The barley he harvests is a supplement for dry corn, depending on the year. He likes to grow these crops because they make good straw to bed the cows.

Peckman is a big believer in keeping his soil covered at all times, so some of the decisions and rotations are tweaked with weather and calendar. Over the past couple years, he has added a few acres of sunflowers to the crop rotations.

“We can double crop sunflowers after wheat, and there is a viable bird seed market for those,” he says.

“Mainly, they are beautiful, and I see people enjoying them. Nobody is paying me for that part of it, but it warms my heart to see neighbors stopping with the families, taking pictures and looking at my flowers. With everything going on in the world today, if I can see someone go out and smile a little, it’s worth it.”

Awareness, appreciation, and praise don’t pay the bills

Posted on November 24, 2024 by Agmoos

97 Milk is a 501(c)3 non-profit. Donations are tax deductible.

By Sherry Bunting, Farmshine, November 22, 2024

EPHRATA, Pa. – Farmshine readers are no-doubt aware of the work of the volunteers operating the 97 MILK education efforts. But awareness and thank you’s don’t pay the bills.

First of all, 97 MILK is a 501c3 non profit, meaning donations are tax deductible.

Secondly, 97 MILK is managed and operated by volunteers. Not a single person doing any of this great work is paid a dime or a nickel (not even a penny) for their time and only in some cases are personal expenses for projects reimbursed

97 MILK has made huge strides on literally a shoestring budget.

However, even the frugal cannot survive without donations because printers have to be paid for printing materials like the popular and eye-opening 6×6 cards.

Website hosts and programmers have to be paid to keep the platform up and running.

When whole milk isn’t donated for an event, it has to be purchased.

When dieticians or other experts are interviewed for a Q&A at the website or on social media platforms, they expect their expert time to be paid.

Boosting the best and most informative ad posts on facebook also comes at a cost.

The list goes on, and it doesn’t even cover the things 97 MILK wants to do that are expensive, like BILLBOARDS.

There’s a reason Nelson Troutman started this movement by painting a wrapped round bale, or BALEBOARD — because the billboards were too expensive, but wouldn’t it be nice to amplify the good work of 97 MILK with a few larger than life billboards?

These are tangible costs that surround the small but strong and dedicated army of 97 MILK volunteers.

When it comes to the content created, the daily social media posts, the educational printed materials, the interactions with followers to answer their questions on social media, the constant monitoring of social media conversations, along with the answering of emailed questions at the website question desk, the compiling of new information for the website designer to keep it refreshed, the staffing of booths at consumer-facing events, the painting of bales, the miles driven, time spent talking to consumers, time spent designing eye catching ads to show consumers, time spent actually communicating with consumers – that is all done by volunteers who take time away from their paid livelihoods to voluntarily promote whole milk education, often not even being reimbursed their personal costs for supplies.

We are in the season of Thanksgiving. A great way to show some gratitude to the hardworking 97 MILK volunteers is to help keep the boat afloat with a donation. Apart from a few regular givers, donations have not come into this volunteer effort for a long time, and the shoestring is baring thread, despite the important advances this educational effort has made for dairy farmers and the many agribusinesses that serve and depend on them.

A recent Dairy Foods Magazine website panel discussed the State of the Dairy Industry in 2024. One panelist observed that their monitoring data show a 30% increase in social media conversations about milk and dairy products. We can chalk some of that gain up to 97 MILK, posting six days a week and reaching hundreds of thousands of consumers every quarter, with many reacting and having conversations with 97 MILK volunteers — engaging directly.

The website, alone, is averaging 200 users per day, most of them new users. That’s a big number.

Total page views at 97milk.com were 11,000 over the past 30 days – another big number.

Facebook reached tens of thousands of people last week, without any paid ads, but reaches tens of thousands more with boosting. Of these numbers, the nationwide reach is broad. Nope, they don’t all come from Pennsylvania. The places with the highest views register as California and Texas, along with states all in between East to West and North to South.

Of the website interactions, the No. 1 draw is the Milk Facts section. Visitors to the website spend an average of 2 minutes and 40 seconds there. In today’s fast-paced digital world, that’s a long visit!

97 MILK is doing things right.

And guess what? Have you read the Oct. 16, 2024 Farmshine story about fluid milk trends? Do you read Market Moos keeping you up to date on the monthly estimated packaged fluid milk report by USDA?

Fluid milk sales are UP year-to-date over year ago, and have been trending this way since partway through last year. In fact, the long-term fluid milk sales downturn was slowed and flattened ever since 97 MILK was formed in February 2019. But in the past 18 months, it’s turning slightly higher. There is momentum now — enough that industry trade organizations and other farm publications are beginning to take notice.

This is spurred by the big increases in whole milk sales as one of the main categories turning the trend around when looking at the volume, not just the percentage of increase on a smaller volume category. Whole milk sales are up 21% since 2019 when 97 MILK was formed.

Consumers want to eat and drink more healthfully. They want to know about milk!

97 MILK has caught their attention, piqued their curiosity to learn more, and helped reveal the details about the nutrition in a glass of whole milk. Not to mention, the Whole Milk for Healthy Kids Act that passed the House of Representatives 330 to 99 last December got this far because of one thing: Whole Milk Education.

Whole milk bill champion, Representative G.T. Thompson, Chair of the House Ag Committee, said it best during a 97 MILK meeting attended by farmers in 2021, and he’s repeated similar statements at other meetings and panels where the subject of whole milk in schools comes up:

“Keep doing what you are doing with the well-designed combination of influencing, marketing and providing factual information. Keep up the education. It’s working,” said G.T.

I personally want to thank each and every person who has donated funds and / or donated their time to help keep this whole milk education movement going. Thank you 97 MILK for all you’ve done for America’s dairy farmers and consumers – and above all for America’s children!

So, what are you waiting for? Want 97 MILK to continue and do more? If so, go to https://www.97milk.com/donate/ and prove it, or mail your donation to 97 MILK, PO Box 87, Bird In Hand, PA 17505.

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USDA to complete producer vote before new administration comes to town

Posted on November 14, 2024 by Agmoos

Final FMMO rule adds more to make allowances, shortens delay on composition updates, restores higher-of, keeps controversial ESL adjuster.

By Sherry Bunting, Farmshine, Nov. 15, 2024

WASHINGTON, D.C. – The USDA released on Nov. 12 the Secretary’s nearly 400-page final decision on the Federal Milk Marketing Order (FMMO) price formula changes, with a few changes from the July ruling.

USDA rejected comments seeking to forestall the make allowance increases or to reduce their size. All make allowances are further raised in the final rule vs. preliminary rule by a fraction of a penny for marketing costs. Also, USDA has added more than a penny per pound to its earlier decision on the nonfat dry milk make allowance. These are milk check deductions that are embedded in the class and component formulas.

USDA also plans to stick with its earlier decision to introduce a rolling adjuster for extended shelf life (ESL) milk, which creates essentially two-movers for Class I that was not part of the hearing scope. The Department further defined ESL milk by processing method to be all milk using ultra-pasteurization, not just relying on the shelf life designation of 60 days or more.

The broad range of changes in the proposed final rule are the result of the national hearing and rulemaking process that began in 2023. It will be made final for implementation after dairy producers vote to approve these changes in the Order-by-Order referendum that will be completed before the new administration takes office on January 20^th.

USDA AMS will mail voting ballots to eligible producers and qualified cooperative associations — which may bloc-vote on behalf of their eligible members — after the final rule is published soon in the Federal Register. Ballots must be returned with a postmark of December 31, 2024 or earlier and be received by the Department by January 15, 2025 in order to be counted.

Not all producers in a Federal Order will be eligible to vote. Only producers with milk pooled on a Federal Order in the month of January 2024 are eligible to vote in that Federal Order.

A ‘yes’ vote accepts all parts of the final rule. A ‘no’ vote rejects the changes but also rejects the continuation of that Order. Any of the 11 Federal Orders that does not meet the two-thirds majority requirement for acceptance of these changes will be terminated. The two-thirds majority is calculated among eligible producers in the Order who return a ballot.

USDA AMS will host three public webinars to further inform stakeholders of the changes and referendum process on Nov. 19 and Nov. 25 at 11:00 a.m. ET and Nov. 21 at 3:00 p.m. ET. A link to access the webinars will be provided at the AMS hearing website along with supplementary educational documents.

Using its backward-looking analysis of applying the changes to actual 2019-23 pool test data, the combined net benefit for all 11 Federal Orders of all the changes in the final rule is estimated at +$0.26 per hundredweight. However, an average does not tell the full story, and it does not include the positive orderly marketing impact of restoring the higher-of method for calculating the Class I base price mover.

USDA’s Table 5 above is the backward-looking static analysis of the weighted Statistical Uniform Price (SUP) – at actual pool component test – showing net benefits for the following Orders: Appalachian +$1.90 per hundredweight, Southeast +$1.80, Florida +$1.43, Central U.S. +$0.52, Mideast +$0.50, Northeast +$0.35, Southwest +$0.07.

Table 5 shows net-negative impact for California -$0.27, Upper Midwest -$0.13, Arizona -$0.11, and Pacific Northwest -$0.05.

However, this analysis does not factor-in the positive impact of restoring the higher-of method for calculating Class I. The Orders showing net negative impacts above have more liberal policies for jumping in and out of FMMO pools. Since USDA did not quantify the benefit of its restoration of the higher-of method for the Class I mover, it’s important to note that this can soften the blow.

According to experts consulted by Farmshine on this matter, the potential average benefit for the same 2019-23 period of orderly marketing under the higher-of method in a low-Class-I FMMO like the Upper Midwest is 7 to 10 cents per hundredweight.

More importantly, the orderly marketing restored by this part of the final rule has a protective effect on the month-to-month hits taken by pooled producers from opportunistic depooling and negative PPDs. Why? Because the higher-of method — used for two decades, before the legislative change in 2019 — encourages functional class price relationships that promote orderly marketing.

In short, producers should realize that the restoration of the higher-of reduces the prevalence of very large negative PPDs that can disrupt performance of their risk management tools and treat pooled producers inequitably during black swan events and times of major market imbalances — like have been experienced over the past five years under the average-of method. This is a benefit that is difficult to quantify, but is contained in this decision nonetheless.

On the positive side for dairy farmers, the USDA will also shorten the delay from 12 months to six months for implementing the updated skim milk composition factors. These updates are shown above, which witnesses testified would raise Class I prices in all Federal Orders by an estimated 70 cents per hundredweight (based on 2022 data), while also increasing the manufacturing class prices in the four fat/skim Orders.

Raising the skim component standards helps bring the Class I, III, and IV in alignment, reduces the frequency of negative PPDs, and reduces the incentives for depooling that undermine orderly marketing.

The manufacturing class prices in the other seven Orders that use multiple component pricing are already paid on actual components, not by standardized levels.

Standardized butterfat composition at 3.5% will not be updated in this decision because this is a paper number that does not affect how producers are actually paid. Each pooled producer’s individual minimum price in all Federal Orders is already based on their actual butterfat test for pounds shipped.

The updates to county-by-county Class I location differentials were also tweaked in places, compared with the July preliminary decision, and the base differential for all counties at $1.60 per hundredweight remains in place.

Butterfat recovery within class and component formulas will be updated from 90% to 91%. Several proposals had requested a larger increase.

The Secretary’s final decision on the Class I base price mover remains unchanged from July.

USDA will restore the higher-of formula, which had been changed to an average-of formula in the 2018 farm bill. USDA is also sticking with the ESL adjuster, creating what is essentially a two-mover system for fluid milk.

Processors will separately report sales of conventionally processed (HTST) and ultra-pasteurized (ESL) fluid milk product sales each month. The higher-of method will set the base price mover, and USDA will apply the new ESL adjuster to the sales of ultra-pasteurized milk to determine their final pool obligation.

The ESL adjuster represents the difference between the higher-of vs. the average-of the Class III and IV advance pricing factors over a 24-month period with a 12-month lag. USDA states that it sees this adjuster “stabilizing” the difference between HTST and ESL over time.

USDA also rejected comments that had raised competitive concerns, stating: “The record does not contain evidence to support the implication that manufacturers of dairy products, the majority of which do not manufacture ESL products, would make business decisions to gain an advantage in the fluid market where they do compete.”

On the negative side for dairy farmers, the large increases in processor make allowance credits were made a bit larger, not reduced, after the 60-day public comment period.

USDA relied on the voluntary surveys of processor costs that were presented at the hearing as customary data sources from past make allowance adjustments. While USDA did not fully meet the requests of International Dairy Foods Association (IDFA) and Wisconsin Cheesemakers Association (WCMA), it does recommend much larger make allowances than what National Milk Producers Federation (NMPF) had proposed.

Make allowances represent the costs of converting raw milk into the four manufactured dairy products surveyed by USDA. They are embedded in the pricing formulas, not line items on a milk check, and they aggregate to an impact of 75 cents to $1.00 per hundredweight — depending on product mix and Class utilization.

USDA responded to processor comments about marketing costs, adding $0.0015/lb to its previously proposed processor make allowance credits for cheese, butter, nonfat dry milk, and dry whey. USDA also responded favorably to the processors’ request to adjust the nonfat dry milk make allowance to be more than a penny per pound higher than previously proposed.

The final decision will raise the make allowances on the four products used in class and component pricing – per pound — as follows:

Cheddar cheese will be increased from the current make allowance of $0.2003 to $0.2519 per pound; dry whey from $0.1991 to $0.2668; butter from $0.1715 to $0.2272, and nonfat dry milk from $0.1678 to $0.2393.

In its rationale, USDA stated that NMPF member-cooperative-processors supported the NMPF proposal as “a more balanced approach” to consider impacts on producers and processors. However, they also testified that the smaller increases proposed by NMPF “did not cover their costs.”

This put USDA in the position of having to rely only on the cost data provided by IDFA and WCMA because NMPF offered no cost data to support their smaller proposal. USDA said it rejected consideration of the impact on dairy farmers because the Agricultural Marketing Agreement Act does not include producer profitability as a factor for the Secretary’s consideration on this matter.

USDA chose not to wait for the mandatory and audited cost of processing survey that Congress is expected to authorize and require USDA to utilize in the future. This language is included in all versions of the new farm bill and is reportedly supported by NMPF, IDFA and American Farm Bureau Federation (AFBF).

The final rule also removes 500-pound barrel cheese prices from the protein and Class III formulas, meaning only 40-pound block Cheddar price surveys will be used going forward. USDA rejected proposals that sought to add 640-pound block Cheddar, bulk mozzarella cheese, and unsalted butter to the pricing survey.

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Ag Moos

Category Archives: agriculture

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House Ag Chair and new Ranking Member share bipartisan priorities at Farm Show listening session

The good, bad, and unknown of new FMMO pricing formulas ‘approved’ by producer referendum

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Organizations react to USDA, HHS picks as Trump nominates Brooke Rollins to top Agriculture post

Milk Market Moos, Nov. 29, 2024

How these dairies manage with innovation, diversity

Awareness, appreciation, and praise don’t pay the bills

USDA to complete producer vote before new administration comes to town

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