On-time farm bill is Chairman Thompson’s top priority, areas of USDA oversight also rank high

By Sherry Bunting, (Nov. 25 interview has been updated since Thompson’s official caucus election to Ag Committee chairmanship)

WASHINGTON – With Republicans securing a slim majority in the U.S. House after the midterm elections, Congressman Glenn ‘G.T.’ Thompson (R-Pa.) is preparing to move from ranking member to chairman of the House Agriculture Committee when the 118th U.S. Congress is sworn in for the next legislative session on January 3, 2023.

The House Republican Steering Committee made it official December 7, selecting Thompson incoming Ag Committee Chair, the first from Pennsylvania since 1859.

Outgoing Chairman David Scott (D-Ga.) expressed his appreciation to fellow committee members, sharing in a statement: “As I prepare to hand the gavel over to Mr. Thompson… I am encouraged by the bipartisan work we have accomplished together, particularly around our shared interest in broadband and access to USDA programs for our new and small producers. Heading into the 2023 Farm Bill, I am hopeful and prayerful that the collegial spirit will continue and that the Agriculture Committee will be able to deliver a farm bill with strong Republican and Democratic bipartisan support.” 

A first order of business for incoming Chairman Thompson is to host his first official 2023 farm bill field hearing on the first Saturday of the Pennsylvania Farm Show, January 7 in Harrisburg.

Thompson has had a long history of holding listening sessions during the Farm Show and bringing with him some committee members from other states. This time, he’ll be looking at a larger venue at the complex, and he’s inviting all Democrat and Republican members of the House Ag Committee as well as prospects.

“The committees won’t be fully populated by then, but the chairmanship will be confirmed,” said Thompson in a recent Farmshine phone interview.

“The most important priority is the on-time completion of the 2023 farm bill as the current farm bill expires at the end of September 2023,” says Thompson. “Certainly, beyond that, we have oversight functions that are really important too.”

One of those areas of oversight, he explains, is the House and Senate Republican request already sent to USDA Secretary Tom Vilsack asking for an audit on “all the pots of money” in USDA that have come through executive actions and the spending in bills passed by the Democrat majority.

“We are asking for this audit because we believe it will be helpful going into the farm bill process to see those funds outside of the baseline,” Thompson explains. “We’ll be following up and looking forward to getting that information.”

In addition to bringing USDA in for oversight within and outside of the farm bill process, Thompson mentioned the leadership will want EPA Secretary Michael Regan to explain the things EPA has been advancing that are creating uncertainty and problems for America’s farmers and ranchers.

Outside of the funding for USDA conservation programs, Thompson says he is “absolutely opposed to making (the farm bill) a climate bill.”

It’s going to be busy in Washington D.C. after January 3, but he says he remains committed to bringing the Whole Milk for Healthy Kids Act forward again with potential legislative improvements.

“We’ll jump on whole milk right away, but it’s not in the farm bill, and it’s not in the Ag Committee, it’s in the Education and Workforce Committee,” Thompson explains, noting that he will be a senior member of that committee also, and will work with the chairman.

He reports that the Republicans had teed up a version of the childhood nutrition reauthorization last summer in that committee, but their bill and their amendments to allow whole milk and 2% milk in schools and in the WIC program did not make it into the version passed by the House on party lines.

The good news is the House Democrats’ version of the childhood nutrition reauthorization, without the whole milk provisions, also did not advance through the Senate, so it will be a do-over next session.

“Let’s hope the third time is the charm,” says Thompson. “I remain hopeful we can do it through that. My goal is to work hard to get it in as part of that base bill and go from there. We’ll need bipartisan support in the Senate, where the childhood nutrition reauthorization requires 60 votes.”

The Senate remains split down the middle with an edge to the Democrats in terms of committee leadership in the next Congress.

Back to the farm bill priorities, Thompson said protecting crop insurance as well as other crop and livestock protection products like Livestock Gross Margin (LGM) and LGM-Dairy as well as Dairy Margin Coverage (DMC) and support for DRP are front-burner. Enhancing them — where possible — ranks high on his list.

Along with that, he says the committee is learning from the disaster payments that have been made outside of the farm bill baseline to be looking at how to incorporate more of that relief in a way that provides certainty for farmers and ranchers and for the lenders providing them with access to capital.

Another priority will be to look at the Title I reference prices for commodities.

“With record high inflation, the challenge is not what is paid, but the margin left at the end of the day,” says Thompson.

“There’s really no part of the farm bill that’s ‘unimportant.’ The nutrition help is important to give a hand-up to those in need, and to be using this to provide access to career and technology education so people can rise above their financial struggles,” he explains.

When asked about milk pricing reforms in the farm bill, and the change made to the Class I mover in the previous farm bill, Thompson said: “It’s all on the table. No conclusions have been drawn yet. As we do these listening sessions and hearings, this is where we’ll decide what the tweaks will be to areas of the farm bill.”

Asked what he thinks about the talk coming out of the COP27 in Egypt this week, of the U.S. pledging to pay $1 billion in reparations to other countries for climate impacts – noting that China is being exempted from paying such reparations because of still being defined as a ‘developing’ nation — Congressman Thompson was blunt in his response.

“It is absolutely ridiculous. We should not be paying for that. The United States of America leads the way in the reduction of greenhouse gases, and a big part of that is because of our farmers and ranchers. They are our climate heroes, and they’re not getting enough credit for that, for what they are already doing,” he said.

In a follow up question about the ESG scoring and the Securities and Exchange Commission (SEC) proposed rule to track scope 3 emissions back to the farm level, Thompson observes: “Those are political-science driven policies with no place in American agriculture or American finance for that matter.”

When asked about the $11.4 billion in annual funding the President pledged at COP27 for climate transitions in other countries, Thompson added: “We would be funding some of the dirtiest economies in the world. It’s not our role to do that.”

The House controls the ‘purse strings’ so to speak, so this could be a show-down.

Given how CBO scoring of baselines is sometimes a hair-splitting mechanism in a farm bill negotiation, what was implied, without being specifically said by the incoming Chairman, is that some of these climate funds going elsewhere with no accountability might best go to making sure America’s farmers and ranchers have the certainty and backing they need to continue as American food producers. That, in itself, is good for climate and the environment.

Stay tuned.

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For the love of cows

A girl and her heifer in the full-circle of a cow-loving community

AUTHOR’S NOTE: Sometimes you hear something that strikes a chord and you want to know more… As we start this season of thanksgiving, there are young people all over the country who are thankful for the love of cows. They may have parents and grandparents who feel this way too. Some may operate dairy farms, others may rely on the older generation and a tight-knit cow-loving rural community, like the one in Susquehanna County, to make it possible. Such is the story of Delaney Curley and her Red and White winter yearling Curlydell Warrior Summer-Red — each with her own tale that would not be possible except for the love of cows.

By Sherry Bunting, Farmshine, November 4, 2022

IRISH HILL, Pa. – The past three years have been a dream come true for Delaney Curley as her family moved to Irish Hill just a mile or so from her grandparent’s farm outside of Montrose. 

Growing up, she would stay with Bob and Mary Curley for weeks at a time in the summer. Laura, her mother, recalls the crying the entire hour and a half drive home to Mountain Top. The Susquehanna County farm is where Delaney had her 4-H club, her cousins and friends with similar interests and the wide open spaces of the mountains, hunting and fishing, all of it calling her to pursue conservation science after she graduates from Elk Lake High School this year.

“We didn’t always live here. When we lived in Mountain Top, grandma and grandpa’s farm was a magical place for me. I love every part of it – working with the animals especially,” Delaney reflects. “Here, in this tight knit rural community, I found people like me.”

Bob sold his 60-cow milking herd in 2001. He is the fifth generation with 540 acres of crop, hay and pasture land. The main farm has been in his family since the Curleys came to America from Ireland in 1840. Today, he rents corn acres to a nearby farm and he and son Bill, Delaney’s father, manage the hay and pasture land with 20 to 30 heifers on hand, additional progeny of earlier purchases by the sixth generation for the seventh generation to show over the years, and some dry cows.

If not for Bob’s love of cows, this story would not be unfolding. It began when Delaney’s cousin Cali was the first of Bob’s grandchildren wanting show calves but having no home herd to draw from.

While the Jersey, Holstein and Red and White heifers start out at Bob’s farm until they become milk cows, breeding for Red Holsteins has special significance. Bill recalls his dad breeding for Reds before it was cool, but as a youth, Bill never won a class in all of his show years. Back then, Red and White Holsteins showed with Black and Whites, but the industry’s breeding focus for Reds came later.

When his niece Cali started showing, “that’s when our quest to be an owner-breeder began,”  Bill reflects. They got her started with a calf purchased at the Nittany Lion Fall Classic, and she raised her to be grand champion Holstein of the State Junior Show. Bill’s son Patrick and later his sister Delaney got started with a purchase of bred Jersey heifers from Luchsingers in New York, and a Jersey calf out of that developed into a champion. 

Those heifers calved and the 20 to 30 milk cows they became went to Joe Vanderfeltz’s 400-cow freestall herd for milking, so the Curleys could keep working toward that owner-bred herd, which today includes the Holsteins. Heifers are pasture bred by genomic bulls, and the milk cows at Vanderfeltz’s are AI-bred. Those calves come back to Curlydell.

For the love of cows, they didn’t want to just buy and show, but rather to breed for show. That was especially important to Delaney.

“We’ve always viewed the show animals as 4-H projects to go through to states and have the kids working with them and making those decisions… to take out to show what you are proud of,” says Bill.

Even for Patrick, who gravitates to the technology side of dairy data working for Ever.Ag, showing cows was fun, he says.

In Delaney’s case, however, it’s for the love of cows. 

It’s a foggy, drizzly morning on Irish Hill and the family reflects over breakfast on the move here and the owner-breeder herd that’s been developed over the decade of youth shows. For example, Delaney’s first Jersey ‘Ricki’ was purchased as a two-month-old calf and won banners as a 4-year-old in 2018. Today, she is 10 years old in the retired cow meadow.

Yes, for the love of cows they have a meadow for special retirees.

Throughout the mountains of Susquehanna County in Northeast Pennsylvania, there are families who still milk cows, but even more families who still love them, breed them, show them and care for them. 

The county show at the Harford Fair in New Milford is always quite competitive.

“Our county show is small, but the quality is always amazing,” Bill relates. “If we do well locally, we know we can be competitive to do well in Harrisburg. The competition is deep with so many top breeder herds right here in our county.”

In fact, three of the animals in the pull for junior champion at the 2022 Premier National Junior Show (PNJS) during the All American in Harrisburg in September came from Susquehanna County. 

“That’s a nice meter stick,” Bill affirms, noting that Delaney’s Summer was one of them. Her first-place winter yearling Curlydell Warrior Summer lived up to her name and gave Delaney a perfect undefeated summer from county to districts to states and nationals.

Further testament to the owner breeder herds of the area, when Delaney’s heifer earned bred and owned junior champion, all but two of the breeds had owner-breeder champions from Susquehanna County.

“They are all friends. To have that competition and friendship starting out in your home county, it really pushes you to up your game,” says Laura.

Summer was taken off pasture just 10 days before the county show, where she won her class and was reserve junior champion. Her dam Scarlet had done okay before her — winning districts and doing well in the state show against 30 other animals. 

But then she had this polled Warrior heifer.

“There’s something about when your animal that you own has her calf, it’s just more special,” says Delaney.

Summer did well as a winter calf last year. She started out small, born at 70 pounds as the offspring of a first-calf heifer, but nice and solid with show type. She had placings of 4th and 5th in her class and onlookers told Delaney she’d be one to beat the following year.

And so she was, this year winning her classes against Reds and Blacks.

“She’s the kind of heifer that the more you look at her, the more you like her, not a lot of flaws,” says Bob, knowingly.

With Scarlet’s second calf Sage, Delaney was excited to show produce of dam. The best feeling, she says, “is to win when you’re not expecting it.”

When Delaney and Summer entered the PNJS showring in Harrisburg, the judge took one look and moved right on. She recalls positioning Summer for another look, but figured she was written off. Then, halfway around the ring, “he pointed to me for the pull, and I thought he wasn’t interested.” 

That’s a thrill that is hard to describe, she recalls with a smile.

For Bill, the win was a full-circle of emotion involving Summer’s story that goes back to Bill’s longtime friend.

“We did the easy thing, breeding Scarlet to Warrior. You would have to go back to Starbuck for a bull that stamps them like that,” he says.

“But David Mattocks bred her mother. He did the hard work,” Bill recalls his good friend who lost his battle with cancer four years ago this month. Summer’s granddam was purchased from the Da-Vue dispersal.

It was Dave’s love of cows, his commitment to four decades of breeding until those last several months of his life, that also live on in this heifer, a heifer that Bill’s father has also bonded with.

Bill had intended to buy her as a bred heifer at the Da-Vue dispersal in 2018. He and Joe had picked two heifers on conformation.

“Then I looked at the pedigrees and saw one traced back to Dave’s first Excellent cow. That cow was all he talked about on our trips back and forth to Penn State,” Bill recalls their college years in the late 1980s.

“Dave had big dreams, we lost him way too soon,” says Bill. While they were in college, Dave was in partnership with his uncle, and he always talked about this cow Scenic-Vue Stewart Starr. She was Good Plus at the time and became his first Excellent cow.

When Bill got to the dispersal at Fisher’s, he ended up missing the heifer that went back six generations to that cow, but he bought three or four others, “just not the one I wanted.”

A couple weeks later Bill got a call from Dave Lentz, that a few animals were left over from the sale, and by some miracle Starr was one of them. 

“Dave (Mattocks) and I went down together to pick her up. His health was failing,” Bill recalls, explaining that the heifer represents so many ties – family, friendship, dreams, memories, past, future, all for the love of cows. 

It was definitely for the love of cows that Dave knew at age 10 he wanted to be a dairy farmer. He learned from his uncle before him and credited the dairy community around him in his welcome letter for the dispersal, writing: “There is no other industry that so abounds in people that would do anything  for you,” thanking those by name who helped when he was down. 

The sale was in February 2018 and in November that year, Dave was called to his heavenly home.

That bred heifer Bill bought — Da-Vue Reality Spirit-Red, granddam to Delaney’s Summer — now represents a blending of seven generations of Very Good and Excellent cows from Dave’s herd, his dreams and vision, now part of the owner-breeder herd at Curlydell with Summer and Sage from Spirit’s daughter Da-Vue Fusion Scarlet-Red.

“Her name was Spirit, and she was surely spirited,” Bob recalls the chase when she came off the truck the day Bill and Dave brought her to Irish Hill. Her first few weeks there in the tiestall and pasture, not quite a springer yet, were not without challenges.

“I try not to let any of her calves see an open barn door,” Bob laughs, remembering the time Spirit managed to get into the hay mow through the hay drop, and the devil of a time getting her out. He and Delaney baby the calves that have come from her. Today, Spirit is part of the flow of the freestall herd that suits her as a milking cow, making 40,000 pounds of milk at Vanderfeltz’s.

“He takes care of our milk cows like they are his own, and we consult on the breeding decisions,” says Bill, getting the calves back and returning them as milk cows. 

Making the move three years ago to Irish Hill was Delaney’s idea to be where her cows are, along with her 4-H club, her cousins and friends, her grandparents and the hunting and fishing. 

“If we were going to do it, that was the time, before she started high school,” says Bill. Leaving Mountain Top, where Laura grew up, was hard, but her parents had passed away and Bill’s parents are like her own. 

The entire family moved, first renting a place, then buying a home just down the road from the farm.

For the love of cows, Delaney is where she wanted to be, where she could double-down on her 4-H projects – her Jerseys and Holsteins, especially the Red and Whites.

“We’re glad we’re here on Irish Hill. It’s a place where life really hasn’t changed much. There is a good core of families and kids here all engaged in showing cows, a place where we can wake up and take the 4-wheeler to the barn. It’s hard to describe what that means,” Bill explains.

For the love of cows, they are home and the outdoors from the cow pastures to the mountain wilderness are what steer this Elk Lake High School senior to take her basketball skills and interest in conservation to Paul Smith’s College in the Adirondacks next fall.

While some cattle from the heifer meadow will be sold, Delaney wants to keep a core herd of pedigreed Jerseys and Red and Whites, to keep showing as an owner-breeder – even after 4-H.

“My grandfather did it all before we moved up here,” says Delaney.

“None of this would work without Dad. We could only do this with him. Some would call that elder-abuse,” Bill laughs, adding that living here gives him time he’s glad to have, even if it’s just 45 minutes a day doing chores with his dad and hearing stories… for the love of cows.

Laura relates how her father-in-law loves the baby calves, “even after they are weaned and two months old, he’s bringing warm water to them twice a day.”

Quietly listening, Bob puts it all into perspective.

“I’d be lost if I didn’t have it to do,” he said.

For the love of cows, adds Bill, “this is how we end up with retired cows living in a pasture.”

But more to the point, he says as the rest of the family nods in agreement: “Every single thing that we have here, or that the farm has, is owed to the cows. Period. I can’t imagine not having at least one, and so we do things that might not make sense but that we feel good about.”

If only the generations removed from farms could have this shared experience, to get in touch with this feeling… For the love of cows, they might not believe the cow blame-game regarding climate and the environment.

With her eye toward a future in the open spaces and conservation science, maybe this young lady — and others of her generation like her — can bring that love of cows to others and keep it going.

For the love of cows, family and friendships — three generations reminisce: Bob Curley and granddaughter Delaney with her undefeated homebred polled winter yearling Curleydell Warrior Summer-Red, and Delaney’s parents Bill and Laura with Summer’s dam, Da-Vue Fusion Scarlet-Red. Her dam Da-Vue Reality Spirit-Red is a productive milk cow at the nearby Vanderfeltz farm that Bill purchased as a bred heifer from the Da-Vue herd dispersal in 2018. She goes back to the first Excellent cow his longtime friend, Dave Mattocks would talk about during their college years driving back and forth to Penn State in the 1980s. Dave was called to his heavenly home in November 2018, nine months after the herd dispersal and his courageous battle with cancer. Photos by Sherry Bunting

World Dairy Expo honors trailblazers Shelly Mayer, John Ruedinger, Mark Comfort

World Dairy Expo award recipients were honored at the Dinner with the Stars, (l-r) Expo Board President Bill Hageman, Producer of the Year John Ruedinger, Industry Person of the Year Shelly Mayer, International Person of the Year Mark Comfort, and Expo General Manager Laura Herschleb.

By Sherry Bunting, Farmshine Nov. 11, 2022

MADISON, Wis. — “The cows bring us together, but it’s always the people that make it impactful. This industry is great because we do it together,” said Shelly Mayer, executive director of Professional Dairy Producers of Wisconsin, based in Juneau as she accepted the 2022 World Dairy Expo Industry Person of the Year award at the Dinner with the Stars, October 5.

“Friendships and trust, so needed in today’s world, come in heaping portions here at World Dairy Expo. I’m just one piece of a much larger team,” said Mark Comfort, co-founder of Udder Comfort, Cardinal, Ontario, Canada, as he was awarded 2022 International Person of the Year.

Grateful for “the privilege of being able to represent dairy farmers in Wisconsin, the U.S. and around the world,” 2022 Dairy Producer of the Year, John Ruedinger of Ruedinger Dairy, Van Dyne, talked about the importance of the industry working together to move dairy forward.

The awards dinner was attended by over 200 people during the 55th World Dairy Expo last month in Madison. The annual event recognizes dairy trailblazers, mentors and those making longstanding impacts.

Shelly Mayer

In industry service, Mayer has been with PDPW since its start in 2001. The organization has grown to become the nation’s largest professional dairy group with 1700 members from 32 states and an impact on the industry primarily through education.

Citing this leadership and development among the founding principles that Mayer puts to work on her own family’s dairy farm, award presenters highlighted the mark she has left on the Wisconsin dairy industry and beyond through her “unmatched passion and servant leadership.”

Her passion for dairy began growing up on a farm in southwest Wisconsin and continued through Mayer’s education at the University of Wisconsin-Madison, where she received her degrees in ag journalism and dairy science and was recognized by National Dairy Shrine as an outstanding student.

Mayer was credited with the PDPW’s early work on animal well-being standards that later were incorporated in the FARM program as well as the ‘meat matters’ program on residue avoidance that later became an antimicrobial stewardship education for the dairy and livestock industries through the Food Armor Foundation.

Award presenters also noted Mayer’s influential part in the Dairy Innovation Hub, representing a $7.8 million investment by the state of Wisconsin in cutting edge research for the future of dairy. The ‘hub’ concept was born from a drawing she made in the office of Mystic Dairy when Mitch Breunig was PDPW’s president several years ago.

Breunig called Mayer’s work “truly inspirational,” helping dairy farmers learn to more professionally run their farms. “As we have fewer farms and fewer farmers, it’s going to take leadership from all of us,” he said.

Pointing out many of PDPW’s founders and her family in attendance, Mayer credited and thanked them, and especially the team of staff she works with for the organization’s far-reaching impact. In 2021 and 2022, alone, PDPW will have provided more than 220 days of education and outreach.

“Education is a powerful force that can change the world. It brings out the best in people and grows leaders who can ask the tough questions,” she said.

Mayer touched on the regenerative and sustainable agriculture story, telling attendees that, “this is the time to stand together, not at the sidelines, to tell that story. We’re so busy feeding the world, that we haven’t taken the time to share… to get out there and tell it.”

John Ruedinger

As Dairy Producer of the Year, Ruedinger was highlighted for his domestic and global contributions as a member of the board and former chairman of Genex, leading to the creation of Cooperative Resources International, the industry’s first combination of a dairy cattle breeding company and a dairy records provider and later URUS Group, the combination of both cooperative and private entities.

Ruedinger is a sought-after speaker at home and abroad on cooperative principles and industry leadership and was a founding board member of PDPW. Today he serves as vice chairman of URUS Group and on local boards for agribusiness leadership and Holstein breeders. He thanked the past and present members of the URUS Council who were present.

“The farmer spirit was never lost in the formation of URUS,” said Ruedinger, honored to have been part of the success, part of the process and part of the collaboration and humbled to receive the World Dairy Expo honor as a dairy producer who learned from his father the pride in his family, his dairy farm and his involvement in the cooperative system.

Also highlighted were Ruedinger’s accomplishments as the third generation at Ruedinger Dairy, which has transitioned to the fourth generation with 1500 cows milking over 90 pounds per day with somatic cell counts averaging 87,000.

A devastating fire in 1996 was a pivotal time, but the decision to move forward was made, and they’ve never looked back, with consistent growth every year since.

Mark Comfort

As International Person of the Year, Comfort’s four decades of impact in dairy genetics, market access, products and practices were recognized. Presenters highlighted his achievement of a dairy genetics-based crossborder relationship between Canada and the U.S., developing his former company Transfer Genetics in the 1980s, which later became part of Select Sires in 2000, as well as currently on the management side as co-founder of Udder Comfort and his continued work in genetics through Comfort Holsteins and Comfort Tunis sheep.

Award presenters traced Comfort’s early days showing dairy cattle and sheep with his grandfather by the time he was four, milking cows and raising livestock with his family, developing a keen interest in genetics and pursuing entrepreneurial ideas while studying at University of Guelph, where he revived the dairy cattle judging team and served as college Royal Show chairman. 

Comfort’s brother Neil and wife Margaret operate Brookturn Holsteins at the Niagara County farm that has been in the family since 1797.

Notably, Comfort was instrumental in changing Canadian law as he took on the AI regulations of the 1980s — and won. His early work also created the first process for Canadian dairy farmers to learn how to do their own AI, which helped open access to then emerging U.S. sires like Chief Mark, Blackstar, and Elevation.

Combined with the elite genetics of Canadian Holstein cow families and their owner-breeders ‘armed’ with the power to breed their own cows, proved to be a nexus for what legends are made of, including top sires and legacies of the World Dairy Expo, such as Braedale Goldwyn, and the millionaire sires of Comestar — and further impacts from the showring to the commercial cow management side today.

Award presenters thanked Comfort for Udder Comfort’s generosity, giving away pallets of product for exhibitors throughout the cattle barns, a tradition that began in 2007 and was followed in 2008 by sponsorship of the grand champion cash awards for all seven breed shows, followed by initiating in 2009 the cash awards for all seven breed grand champions in the junior show as well.

Comfort was quick to credit the people around him through the years, including his longtime friend and mentor the late George Miller of Select Sires. “Without incredible friends, people who believed in me and shared these goals, this would not be possible. I am humbled,” he said, introducing his family, friends, colleagues and the Udder Comfort team in attendance and thanking those who nominated him.

Citing World Dairy Expo as “truly the place where the global dairy industry meets, it all began here for us,” Comfort said with appreciation for the hundreds of dairy farmers who have shared their stories over the years.

“Your stories move us,” he said. “Your competitiveness and cooperation together inspire us, your friendships encourage us, and your feedback and suggestions help us raise the bar to improve how we deliver tools of progress and cow comfort.”

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Biden, Vilsack pledge “whole of government approach” in scripted White House Nutrition Conference that converged with Tufts ‘Food Compass’ and FDA’s ‘healthy labeling’ rule; Fed. Reg. comments due Dec. 28, 2022

By Sherry Bunting, updated from original publication in Farmshine, Sept. 30, 2022

WASHINGTON — Get ready for unscientific nutrition bullying. Announced more than a year ago, the White House Conference on Food, Nutrition and Health Wednesday, September 28 was cloaked in secrecy until the eve of the event, when the 44-page “Biden-Harris Administration National Strategy on Hunger, Nutrition, and Health” was released Tuesday, September 27 around Noon. 

By 5:00 p.m., the Conference agenda appeared in the inbox of registered participants, and during the overnight hours, the Biden Administration released a fact-sheet announcing $8 billion in “new commitments” from over 100 private businesses, local governments and philanthropies for what it calls a “transformational vision.”

Taking a page from the World Economic Forum’s (WEF) Davos-style approach to food transformation, the White House solicited pledges to address the five “pillars” in its playbook. 

Of note among them are a $500 million investment by Sysco (foodservice vendor), nearly $50 million by Danone, $250 million from a collaboration of the Rockefeller Foundation and the American Heart Association on a ‘food as medicine’ initiative, and an undisclosed amount for a collaboration between Environmental Working Group, the James Beard Foundation, the Plant Based Foods Association and the Independent Restaurant Coalition to prompt more plant-based alternative and vegan offerings in foodservice — to name a few.

Then, at 9:15 a.m., just 15 minutes before USDA Secretary Vilsack was set to open the Conference ahead of President Joe Biden’s remarks, the Food and Drug Administration (FDA) announced its “proposed updated definition of a ‘Healthy’ claim on food packages to help improve diet and reduce chronic disease.”

Presto: FDA provided the ‘teeth,’ describing its proposal as aligning directly with the Dietary Guidelines. For the proposed rule, click here and to submit a comment by Dec. 28, 2022, click here

This morsel had been under development over the past four years after public hearings in 2018-19 were reported by Farmshine and then deliberations went silent – until now.

The flurry of activity appeared in scripted fashion within the 24-hours prior to the start of the White House Nutrition Conference convening stakeholders. The first such conference was over 50 years ago and had served as the launch pad for what are known today as the infamous Dietary Guidelines for Americans (DGAs).

A Senate nutrition hearing exactly one year ago in November 2021 paved the way for the September 2022 White House Nutrition Conference.

CAPTION: “We have to give families a tool to keep them healthy. People need to know what they should be eating, and the FDA is already using its authority around healthy labeling so you know what to eat,” said President Biden. White House Conference screen capture

The Conference and follow up actions, said President Biden on Sept. 28, are being devoted to “nourishing the soul of America so that no child goes to bed hungry and no parent dies of a disease that can be prevented. We can do big things,” he said about the stated 2030 goals of ending hunger, increasing healthy eating and physical activity, and reducing diet-related illnesses and other nutrition-related health inequities.

“But,” Biden declared: “We have to give families a tool to keep them healthy. People need to know what they should be eating, and the FDA is already using its authority around healthy labeling so you know what to eat.”

The President continued: “We can use these advances to do more to be a stronger and healthier nation, to achieve ambitious goals. We must take advantage of these opportunities when we have these children in a whole of government, whole of society approach. We need to think in ways we never thought before.”

CAPTION: Ag Secretary Tom Vilsack told the White House Nutrition Conference crowd of more than 500 in-person and more than 6000 logged-in virtually that the Administration is looking to extend the child tax credits, provide more funds for more free school meals, and “take nutrition in a new direction using a whole of government approach that involves the entire federal family.” White House Conference screen capture

In his remarks ahead of the President, Ag Secretary Tom Vilsack stated that government programs feed 1 in 4 children. He and Biden both talked about expanding the child credit permanently. They talked about $2 billion in funding for food banks and schools, including $100 million for ‘incentives’ to make school meals healthier. They both noted funding to make free school meals available for 9 million additional children. A laundry-list of throwing money at a problem without re-evaluating the flawed guidelines that run the school meals and other USDA food programs despite preponderance of evidence that saturated fats are not the enemy.

There was talk of going “a new direction” but this is all process-based. There was no talk of reviewing the flawed Dietary Guidelines that helped get us here and that the Biden-Harris strategy puts so much emphasis on.

Parsing through the 44-page National Strategy, the bottom line is to expect more of the same drill-down on eliminating animal fats, only worse and with stiffer process, labeling and speech boundaries through FDA and the FTC.

We can expect nutrition bullying to commence — if we step outside of the still-vague but Dietary Guidelines-centered White House playbook. In fact, in addition to the FDA ‘Healthy’ label update, a small-print detail in the 44-page Strategy promises power and funding to the Federal Trade Commission (FTC) to scrutinize and penalize food marketing claims for being out-of-bounds on the Biden-Harris DGA-scripted nutrition field of play.

Vilsack noted the National Strategy’s approach is a “whole of government approach that involves the entire federal family.”

In preparation for the Conference, many have lamented the lack of transparency leading up to it. For months, the Conference website gave instructions on how to hold a ‘watch party,’ or a ‘satellite event,’ and how to rally support for nutrition and health ahead of time. But all of the necessary details were missing — until the day of the conference. 

Emailed invitations were sent to those who registered just three days before — requesting that they visit a web-portal and record an interview to provide input. There, people respond to White House questions and their faces are added to a streaming screen full of moving mouths — giving the appearance of broad input flowing in from Americans.

Made nervous by the lack of a published agenda or framework, over a dozen agricultural organizations had sent a letter to President Biden on September 8th asking for a “seat at the table.” Those organizations included American Farm Bureau and commodity groups for wheat, beef, sorghum, peanuts, canola, soybeans, barley, corn, sunflower, eggs and rice.

Dairy organizations were conspicuously absent from any of the pre-Conference letter-writing or other such public statements. But then, the dairy industry has its man Vilsack in play, and its DGA 3-a-day – so case-closed – can’t be bothered on the milkfat and whole milk issue.

On the agenda provided the day of the Conference, we found former DMI vice president of sustainability, Erin Fitzgerald — who now serves as CEO of the U.S. Farmers and Ranchers Alliance and who represented USFRA and referenced her boss at the dairy checkoff during a WEF panel in Davos earlier this year — leading a plenary session on “access to affordable foods.” Also, Chuck Conners of the National Association of Farmer Cooperatives led the plenary discussion on “empowering consumers to make healthy choices.”

(We learned after the Sept. Conference that National Milk Producers Federation and the National Dairy Council, funded by the mandatory dairy farmer checkoff, were invited to attend. They were represented, and they brought “student leaders” from GENYOUth. To read NMPF’s statement after the Conference, click here).

Key questions around “what are those healthy choices” to be compassed in tools and identified in FDA labeling went repeatedly unanswered as the discussions focused on approaches and processes, perhaps deeming the unsettled dietary science on fats to be settled science with no need for discussion.

Nutrition Coalition founder, advocate, author and investigative journalist Nina Teicholz has been writing about the Conference for weeks before it began, noting the lack of a pre-conference agenda and the refusal of the Administration to review the science on saturated fats ahead of this ‘landmark’ event.

She points out that the White House delegated Conference planning to the Dean of the Tufts Friedman School of Nutrition Science and Policy at Tufts University Professor Dariush Mozaffarian — developer of the Food Compass, which is a new method for rating and ranking foods in categories to be consumed frequently, modestly, and occasionally.

To understand what the Food Compass looks like — sugary cereals rank far ahead of the milk that goes in the bowl with them. And, nearly 70 brand-named cereals from General Mills, Kellogg’s, and Post are ranked twice as high as eggs cooked in butter! Alternative fake milk beverages, such as almond juice, rank ahead of skim milk and far ahead of whole milk. Potato chips (yes, potato chips) are an example of a food that ranks ahead of a simple hard-boiled egg and light-years ahead of whole milk, most cheeses and real beef.

In fact, the only cattle-derived product to get top sector ranking is plain non-fat yogurt. (Surprise: Danone was one of the Food Compass development sponsors). Meanwhile, most cheeses, whole milk, and beef ranked near or at the very bottom of the lowest categories.

Coincidentally, Mozaffarian’s department at Tufts also received a $10 million grant from USDA in November 2021 for a five-year project “to help develop cultivated meat” (aka lab-created meat) through assessment of consumer attitudes and development of K-12 curriculum.

Teicholz laments the lack of consideration by the White House, USDA, HHS and FDA as they ignore many reviews including the most recent state-of-the-art review on saturated fats, whose authors include five former members of the Dietary Guidelines Advisory Committee.

“These are the people who wrote the guidelines saying: ‘We got it wrong,’” writes Teicholz.

Their paper was published in the prestigious Journal of the American College of Cardiologists, whose Editor in Chief named it as one of the top 5 papers of the year. Science like this appears to be off the menu of the White House nutrition playbook.

The entire playbook hinges upon the main tenets of the current Dietary Guidelines for Americans even though the DGAs are being questioned by the scientific community… Even though the DGAs have screened out sound science on dietary animal fats and proteins for at least the past three cycles (15 years)… Even though the rates of American obesity and diet-related illnesses were mostly stable pre-DGA but have risen steadily since the DGA cycles began… And even though these consequences have risen dramatically among children and teens during the past decade since school meals, school milk and a la carte competing foods and beverages were further restricted to the low-fat levels of the DGAs.

What does the White House blame for this poor performance? The playbook cites the Covid pandemic food choices of Americans — stuck at home — for the deteriorated statistics. Unbelievable! These statistics have been deteriorating for decades, especially since 2012.

Looking over the playbook, it closely follows the pattern of FDA’s Multi-year Nutrition Innovation Strategy proceedings that have been quietly underway after public hearings in 2018-19 until the ‘Healthy’ label proposal was announced Sept. 28, 2022.

Appearing in the White House playbook is the proclamation that food and beverage packaging will move toward simpler nutrition guidance under FDA, that an easily recognizable ‘healthy symbol’ will be reserved for front-of-package labeling on those foods the government deems Americans should eat, and a potential ranking system for symbols will be developed for packaging of foods and beverages the federal government deems unhealthy.

This is all coincidentally similar to the Tufts Food Compass, and the substance behind these simplified ‘healthy’ (or not) symbols is a doubling-down on the low-fat DGAs as a primary base metric. Here is a deep dive into the Tufts Food Compass that Mozaffarian, the White House Nutrition Conference Chairman, had a critical role in developing to now be the formation of future food policy. Read the comprehensive analysis here

The National Strategy calls for even more adherence to the flawed DGAs among every sector of the economy beyond government feeding programs, schools, hospitals, and military diets to include foodservice offerings, supermarket layouts, online shopping algorithms, even licensing for all daycare or childcare providers and nutrition certification for these licensed childcare providers – not just those receiving government subsidies for food. 

This is so-called “stealth-health” at its best — or rather its worst.

The Biden Administration professes to be concerned about the 1 in 10 households experiencing food insecurity and the rise in diet-related diseases among the leading causes of death and disability in the U.S. The White House cites data showing 19 states have obesity prevalence at 35% or higher with 1 in 10 citizens having diabetes, 1 in 3 with cancer in their lifetime, and nearly 5 in 10 with high blood pressure. 

Yet, there is no pause for a comprehensive review of the very dietary guidance, the DGAs, that helped get us here. 

The National Strategy reveals how the Administration is assembling executive orders, legislative prompts, calls for action among food organizations, companies, agencies, academia and state and local governments to get everyone on the same page making Davos-style pledges and to conform to the federal playbook.

In the executive summary, the President writes: “Everyone has an important role to play in addressing these challenges: local, State, territory and Tribal governments; Congress; the private sector; civil society; agricultural workers; philanthropists; academics; and of course, the Federal Government.”

(Note Biden’s only reference to farmers or food producers is as “agricultural workers.”)

The playbook’s five pillars talk about improvement, integration, empowerment, support and enhancement. It coins phrases like ‘food as medicine’ and ‘prescriptions for food.’ Reading deeper, we see a launch pad for a new method of nutrition ranking and labeling with the primary factors listed as low-sodium, low-fat and reduced added sugars.

CAPTION: This diagram on page 6 of the 44-page Biden-Harris Nutrition Strategy, the White House ‘playbook,’ clearly identifies the very real concerns, but the pillars of this strategy double-down on perpetuating the problem by giving even more influence to the low-fat / high-carb Dietary Guidelines that many in the scientific community are questioning. The ‘playbook’ also increases the reach of the federal government into the diets of children in daycare and schools. 

The playbook’s diagrams show us the concerning impact of food insecurity and diet-related diseases in poor overall health, poor mental health, increased financial stress, decreased academic achievement, reduced workforce productivity, increased health care costs and reduced military readiness – but then doubles-down on the solution being more of the same low-fat / high-carb dietary path that got us here.

The White House playbook states that, “The vast majority of Americans do not eat enough vegetables, fruits or whole grains and eat too much saturated fat, sodium and added sugars.” But at the same time, on the saturated fat question, the data show per capita consumption of red meat has declined since the start of the DGAs, and milk consumption has substantially declined.

Americans are being called upon to “unify around a transformational vision,” said Biden. 

This vision includes more federal control of diets and nutrition education after failing miserably with the control it already possesses. There is no talk of revisiting the path we are on, just doubling-down on how to get more Americans onto that DGA path, to tell them what to eat, and to put the FDA stamp on ‘approved’ foods and beverages while having the FTC investigate health and nutrition claims that fall outside of the flawed DGAs.

Translation: Let the ‘nutrition bullying’ from the White House bully-pulpit begin. Some of us are ready to rumble.

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NMPF’s FMMO Modernization Plan hits high note on Cl. I mover, but eliminating barrel cheese from protein formula is head-scratcher

By Sherry Bunting, Farmshine, October 28, 2022 (updated with additional information after publication)

The National Milk Producers Federation (NMPF) Board gets high marks for passing a Federal Milk Marketing Order Modernization Plan this week at its annual meeting in Denver, Colorado that includes returning the Class I mover to the previous ‘higher of’ formula — a virtually unanimous consensus item that came out of the Farm Bureau Forum in Kansas City earlier in the month.

However, the NMPF modernization plan also includes a few items that were not fully discussed, items that seem to run counter to what dairy farmers were prioritizing, and it leaves out a few items the consensus-builders were vocal about in Kansas City.

The recommendation to return to the higher of Class I mover is an important response by NMPF to dairy farmer concerns. That ball has been in USDA’s court after the first two years of implementation, according to the farm bill language that changed it to an averaging method in the first place. Four years and nearly $1 billion in cumulative Class I net value losses have passed (see chart), but Ag Secretary Tom Vilsack said he needed to see “consensus” before allowing a hearing to be opened.

In post-conference interviews, several Farm Bureau Forum attendees said this was their main priority for participating  – to show Secretary Vilsack there is consensus to “fix the mistake.”

For NMPF to include it in their plan is a win.

Another item in the NMPF plan is to develop a process to ensure make allowances are reviewed more frequently through legislation directing USDA to conduct mandatory processor cost studies every two years and to update the make allowances contained in the USDA milk pricing formulas.

There was general agreement from stakeholders in Kansas City that processor costs need to be evaluated and make allowances updated. Over half of the table-groupings identified this. There was also healthy discussion of some ways to do this to minimize the sudden impact on farmer milk checks – all good points for developing a process and for a USDA hearing process to fully evaluate it.

Of the bones to pick, one NMPF recommendation that runs counter to what more than half of the table-groupings prioritized in Kansas City concerns expansion of the pricing survey to include more products. NMPF’s task force decided not to add any products to the price survey, and in fact they are recommending dropping one. 

On the chopping block is the 500-pound barrel cheese price in the protein calculation for Class III.

Initially, NMPF’s task force committees looked at adding unsalted butter, skim milk powder (a higher value more standardized product than nonfat dry milk), and they looked at mozzarella cheese. In all three cases, the task force chose not to recommend additional products.

The fact that they are recommending elimination of a product from the pricing survey is curious.

Less than one-third of the Kansas City table-groupings listed elimination of barrel cheese pricing as a priority. Few people questioned NMPF economist Peter Vitaliano on the sensibility of this recommendation – except for yours truly.

I asked this question: “On the blocks and barrels, what do you foresee happening if the barrels are dropped? Right now we’ve got barrels doing more trading than blocks. We’re really not seeing much trading at all in blocks on the CME spot market. Also, would this mean that the cost of making those barrels will be backed out of the processing cost survey in terms of establishing new make allowances?

Vitaliano gave this answer: “That’s an interesting question. I’ve heard different interpretations of what’s going to happen to barrels if they are not used in the formula. Some folks feel they’ll just be priced at a discount to blocks, and the cash market for barrels will go away. I’m not sure I buy into that totally because barrel cheese is becoming a different product.”

The NMPF economist continued with his answer: “Under current quality standards, barrel cheese is the only major way that you can get uncolored whey, which is demanding a premium in the marketplace because all of these nutrition products, these high value nutrition products in demand by millennials and others, they don’t want to show ‘bleached whey’ on the label, they want the white uncolored whey powder that comes from barrel cheese production.” 

Apparently, yellow whey from block Cheddar production is less desirable. But we’ve known this for at least 15 years.

In other words, according to Vitaliano, there is right now a ‘subsidy’ effect from the premium paid for the higher value of the uncolored whey that creates the environment to produce more barrel cheese – regardless of what the cheese market is doing. 

Vitaliano noted that FDA is going to consider some changes that might alter how this cross-product scenario is playing out by allowing microfiltered milk to be used in plants producing standard-of-identity cheese, but the bottom line is that barrel processors making whey protein concentrate as co-products benefit from the white-whey premium whereas block cheese processors do not. 

When the two are averaged together in the Class III protein formula, they represent different markets when they historically moved together, said Vitaliano.

Interestingly, however, barrels have traded higher — not lower — than blocks on the CME for most of this year.

In the purely cheese market history, barrels and blocks moved together more closely, then in times of market shocks beginning in 2009, we would see periods of wide spreads and inversions, sometimes barrels over blocks and most of the time blocks over barrels. During intervals in 2016-17, barrels sold at 10 to 20-cent discounts to blocks. Since 2018, we’ve seen long intervals of barrels over blocks by up to 25 cents and then the flipside with blocks over barrels.

This year (2022), barrels have sold at a premium to blocks consistently since April. The barrel premium over blocks stood at 15 cents per pound last week. That’s a significant impact on farm-level milk prices — to the good.

Coincidentally, barrel prices crashed this week, losing 22 cents, where blocks lost a nickel, thereby pushing barrels under blocks by a few cents on Oct. 25, the same day that the NMPF Board voted unanimously to endorse the multi-pronged modernization plan that includes dropping 500-lb barrel cheese out of the FMMO end-product pricing formula.

For the year (2022), barrels will likely average a nickel above blocks.

There is also the question of price discovery. For the year, we have seen more barrels traded on the CME compared with the volume of blocks.

When following up in a question about what happens to price discovery if the barrels are eliminated from the pricing formula, Vitaliano responded that 15% of the cheese reported in USDA’s weekly price survey is barrel cheese. Rather than reduce the weighted average to reflect that, and rather than including mozzarella in the pricing survey (a higher volume and value item than cheddar), NMPF is simply recommending the elimination of barrels to avoid the block/barrel spread.

Vitaliano said pricing formulas are based on the USDA price survey, not on the CME spot market. However, the CME spot market is used to set pricing for the USDA-reported sales.

Vitaliano also noted that price discovery on the CME spot market is achieved even if no product changes hands because it is a marginal market-clearing trade in the first place.

“The whole industry is watching that market, so if that block price is, let’s say, overvalued, and I have extra blocks and I think that market is high, anybody can go to that market and sell; or if you think it’s undervalued, you can go to that market to buy,” he said. “Just because there’s not a lot of trading, doesn’t mean it’s not necessarily representative of the market… we just have to trade the marginal excess or shortage.”

According to Vitaliano, even the regulators have looked at this and concluded that since the whole industry watches that market — everybody has the opportunity to jump in, and they are not shy if they have a different idea about what the market should be, they can go in and make bids or offers. Those bids and offers move the market whether or not a trade is completed.

Even in light of these explanations, the NMPF recommendation to eliminate barrels from the pricing formula remains a bit of a head-scratcher and needs more discussion and evaluation.

NMPF also wants to expand the forward pricing window for whey and nonfat dry milk (NFDM) price-reporting to 45 days instead of 30 in order to “capture more of the global market in the pricing formula.”

However, when asked why NMPF is not seeking to expand the price reporting to include skim milk powder (SMP) – the globally traded powder – as a means of capturing more of the higher-value global market, Vitaliano said SMP is sold at differing standardized protein rates as a value-added product. NFDM, on the other hand, often has more protein in it, but it’s variable and a lower-priced bulk commodity. It’s a true bulk product that is made to soak up excess milk, he explained. 

Vitaliano also noted that NFDM is used by domestic cheese makers, whereas SMP is not. 

Ditto the answer for unsalted butter. While the sales of unsalted rival salted butter in volume, and it is a bulk product more consistent with higher-value global markets, the NMPF task force perspective is that the unsalted butter is also a step up as a value-added product for a specific market in foodservice, not a commodity bulk product a plant would make with excess milk.

Ditto for mozzarella, which NMPF maintains is already priced off the USDA-reported cheddar price even though the U.S. sells more mozzarella than cheddar today.

Next week, we’ll dig into the yield factor changes in the NMPF plan and the glaring absence of a recommendation on depooling issues across the country. Solving the depooling conundrum was a priority listed by over half of the consensus-building table-groupings at the Farm Bureau Forum and producers from multiple regions were vocal about it throughout the three-day meeting.

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Fluid milk’s precarious future can’t be ignored

Class I is at a tipping point, will future FMMO strategies strengthen or exploit it?

“Probably some of you have never recently met an independently owned fluid milk bottler. We are the only prisoners in the Federal Order system. Everybody else can opt in or opt out. Even now… our cooperative competitors don’t have to pay their member producers a minimum price — but we do. I just ask that you take into consideration not just what we can get from Class I … We are on a 13-year losing streak that fluid milk consumption has declined on a total basis. We are at a tipping point,” said Farm Bureau member Chuck Turner, Turner Dairy Farms, a third generation independent milk bottler near Pittsburgh, Pa.

By Sherry Bunting, Farmshine, October 28, 2022

KANSAS CITY, Mo. — The precarious future of Class I fluid milk was an underlying concern expressed in different ways at the AFBF Federal Milk Pricing Forum in Kansas City recently. Some have written off the future of fresh fluid milk and have turned sights elsewhere. Others recognize federal orders don’t fulfill their purpose when fresh fluid milk doesn’t get to where the people are. And then there’s the wedge product — aseptic milk — in the mix as some changes have already been made to promote investment in it.

Since the federal orders are based on regulation of Class I fluid milk, its future is most definitely at the core of the Federal Milk Marketing Order (FMMO) discussion. 

A critical point made by panelists is that more money is needed to get fresh milk to consumers in high population areas. Also mentioned was the restoration of higher over-order premiums to farmers in milk-deficit areas to keep these areas from becoming even more deficit.

But at the same time, Class I sales are declining relative to a growing dairy pie of other class products, and the flurry of fluid milk plant closures near population areas has caused further disruption. 

On day three of the forum in Kansas City, Phil Plourd of Ever.Ag attributed most of the fluid milk sales decline to the fact that “milk lost its best friend – cereal.” When asked, he did acknowledge that about one-third of the problem facing fluid milk is rooted in the low-fat school milk requirement. He also pointed out how the entire food industry is changing, and he warned about the lab-created dairy proteins made in fermentation tanks that can be ‘turned on and off.’

Bottom line is the growth markets are in other products, he said. The declining fluid milk sector can no longer shoulder all of the responsibility for the federal order system. 

He showed a bar-graph depicting the decline in the share of total U.S. production participating in federal or state revenue sharing pools. Using estimates of California’s pre-federal order mandatory state order, the percentage of U.S. milk production that was pooled exceeded 80% in 2018. In November of 2018, California became a federal order. Pooled volume vs. total production fell to just over 70% in 2019, the first year the new Class I mover formula was implemented. In 2020, during the pandemic, pooled volume fell to just over 60% and ticked a few points lower to 60% in 2021.

Several panelists, including Calvin Covington, confirmed that cooperatives, especially DFA, own the majority of the fluid milk plants in the U.S. today. This evolution has only increased with plant closures over the past 18 months, and cooperatives have payment and pooling flexibilities not enjoyed by proprietary plants.

As the Class I sector consolidates to roughly 80% owned by cooperatives and the balance owned by grocery chains and independents, there is another problem with federal orders that is easily overlooked. Who is it regulating? It does not regulate what cooperatives pay their members, therefore, it is regulating a declining number of participants in a growing global industry.

A milk bottler from Pennsylvania used the open-microphone between panels to address this 800-pound gorilla in the room full of consensus-builders doing their level-best to ignore it.

“I am sort of an ‘odd duck’ here. Probably some of you have never recently met an independently owned fluid milk bottler. We are the only prisoners in the Federal Order system,” said Chuck Turner, a long-time Farm Bureau member and third-generation milk bottler from Pittsburgh.

“Everybody else can opt in or opt out. Even now, with recent developments, our cooperative competitors don’t have to pay their member producers a minimum price — but we do,” he confirmed.

Turner asked the room of consensus-builders to “take into consideration not just what we can get from Class I — but let’s think more about what we need to do to sell it. We are on a 13-year losing streak with Class I — 13 years that fluid milk consumption has declined on a total basis. We are at a tipping point,” said Turner.

While half of the forum’s table groupings agreed Class I differentials need to be increased, others wondered how much more money can be extracted from Class I without killing it?

Joe Wright, former president of Southeast Milk Inc., laid out the problem as a “downward spiral” — making it more difficult to attract milk to populated areas in the Southeast. He said it started with the Dean and Borden bankruptcies and continues with more plant closings announced every few months.

In the Southeast, said Wright, it’s to the point where school kids won’t get fresh milk in some areas because no one will bring it.

He noted that the over-order premiums in Florida have decreased by $1.50 per hundredweight. Some 30 years ago, it was $3.00. “We don’t have that now,” said Wright, noting this makes it difficult for farms to continue producing milk for the Class I market in the face of encroaching subdivisions and other pressures to sell.

“There are 9 million people just from Miami to Orlando,” said Wright. “But if we don’t do something soon, we’ll have no dairy farms left in Florida. Do we want the answer to be a push to aseptic milk? Total milk consumption was stable until 2010. That’s when the government gave us low-fat, low-taste milk in schools. Now, we’re going to start them with low-fat, low-taste, aseptic milk? That is going to kill fluid milk.”

He also noted that fluid milk sales are not helped when dairy shelves are empty, showing slide after slide of empty Walmart dairy cases in the same town in Florida in December – three years straight (pre-Covid, during Covid, and post-Covid). When he asked attendees if they have seen this in their own areas, many hands were raised.

He pointed out that when the fresh milk is completely missing on store shelves, it is the aseptic or ESL milk – and plant-based alternatives – that are available. This has a cumulative effect on fresh fluid milk sales.

Again, the topic of aseptic, shelf stable, warehoused milk was brought up with feelings of ambivalence as milk producers are both drawn to it as a hedging mechanism to even-out the supply and demand swings in areas like the Southeast, but on the other hand offended by the prospect that this product can be considered by bottling retailers like Kroger as an innovative “value added” growth category, while the original fresh fluid milk is treated like the Cinderella sister – a low-margin commodity non-growth category.

As more aseptic packaging comes on line, and as schools go without milk and stores short customers on the availability of fresh milk, a transition is being signaled toward packaged milk that is capable of moving farther without refrigeration cost — from anywhere to anywhere – right along with Coke or Pepsi for that matter.

“How do we fix the empty case syndrome that has gotten worse over the years? It’s all about being accountable,” said Wright, giving some history on how this was handled in the past and voicing his hope that having the Dean plants under DFA and Prairie Farms ownership could help.

“Can they push back on Walmart on stocking? I don’t know. There has to be margin in that relationship, but these are correctable problems that affect milk sales,” he said.

For its part, Kroger also closed a plant last year that was running half-full, according to Mike Brown, senior VP of Kroger’s dairy supply chain. 

Milk bottling is consolidating rapidly to run the remaining plants at or above capacity to capitalize on throughput and improve margin.

“The reality,” says Wright, “is we are seeing a downward spiral, and milk is not always available where the people are. The question is, what are we going to do about it?”

Brown noted that the Class I mover formula change, which was an agreement by IDFA and NMPF in the 2018 farm bill, was intended to make fluid milk pricing “more predictable.” This was deemed necessary to attract investment to make fluid milk “more durable and transportable.”

In short, the Class I change was done to attract investment in expensive aseptic packaging to make shelf-stable milk and milk-based high protein beverages. 

Going forward, said Brown: “Risk management is important and especially for specialty products such as extended shelf-life and aseptic milk, which are growing more than the plant-based beverages for Kroger. We have to be sure we nurture these new products because they are value-added growth markets for fluid milk.”

On the other hand, farmers in Kansas City voiced their concern for what happens to fresh fluid milk, that it matters for consumers and it matters for their dairy farms, and it also matters for the continuation of the federal orders. 

Aseptic milk is experiencing growth, but why? Is necessity the mother of invention or is the investment driving the necessity. 

After all, it is the regional and perishable nature of fresh fluid milk that led to the development of the federal orders in the 1930s. Aseptically-packaged and warehoused milk is not fresh enough — and may not be local enough — to be the product that helps extend the viability of the federal orders. 

Despite frustrations, G.T. is not giving up on ending federal prohibition of whole milk in schools

After his whole milk in schools amendment failed on a committee-level party-line vote in August, G.T. Thompson said he’s not giving up, but that a change in leadership is needed to get this done. “Current leadership has an anti-kid, anti-dairy bias. This has become all politics with no logic,” he said.
Bills that would end federal prohibition of whole milk in schools are before the United States Congress and in the Pennsylvania and New York state legislatures. In the U.S. House there are 95 cosponsors. In the Pennsylvania House, it was passed almost unanimously, but the PA Senate refuses to run it because of lunch money scare tactics. Proponents of the various whole milk bills say Democrat party leaders oppose this common sense measure. Some Democrat lawmakers have signed on along with the Republicans as cosponsors; however, as the fight to include it as an amendment in childhood nutrition reauthorization proved — the Democratic leadership has another agenda for America’s foods and beverages and has therefore halted any movement of this measure to end federal prohibition of whole milk in schools and in daycares and in WIC. This bill is simply about allowing a choice that would be healthy for America’s children and rural economy. The evidence is overwhelming that the Dietary Guidelines and Healthy Hunger Free Kids Act got it wrong. Our children and farmers are paying the price for this mistake. Those in charge don’t seem to care about science, freedom of choice, nor petitions signed by tens of thousands of people.

By Sherry Bunting, Farmshine, August 5, 2022

WASHINGTON, D.C. — An attempt by Congressman Glenn “G.T.” Thompson (R-Pa.) to get his Whole Milk for Healthy Kids bill attached as part of an amendment to the Childhood Nutrition Reauthorization package failed last week despite the bill having nearly 100 cosponsors, including both Republicans and Democrats.

Joining him in introducing the amendment during the Committee’s markup of the Democrat’s child nutrition reauthorization were Representatives Elise Stefanik (R-N.Y.), Fred Keller (R-Pa.) and Russ Fulcher (R-Idaho).

“Unfortunately, the Democrats folded on us, and the amendment was defeated,” said Thompson in a Farmshine phone interview Tuesday (Aug. 2). The amendment also included language that would have allowed whole milk for mothers and children over age 2 enrolled in the WIC program.

“The current leadership has an anti-kid, anti-dairy bias, that’s my interpretation,” Thompson said. “Our whole milk provisions are good for youth and their physical and cognitive well-being. It’s also good for rural America.”

Thompson said his effort as a member of the House Committee on Education and Labor was to include the substance of two bills related to whole milk in the huge reauthorization package. Child nutrition reauthorization is normally a five-year cycle, but it has not been updated in over a decade since the Healthy Hunger Free Kids Act passed under a Democrat majority in 2010 to double-down on anti-fat policies in all government feeding programs, including schools.

“We wanted moms and children to get access to the best milk, but this has become all politics with no logic,” he said.

The Committee moved the child nutrition package forward last week without the whole milk provisions. That package will now go to the full House for a vote.

Thompson said its fate is uncertain, that it is likely to pass the House, although the margins are tighter there, he explained. 

However, he believes the child nutrition package will be “dead on arrival” in the Senate where it likely will not receive the 60 votes needed to pass.

If that happens, then the task of writing it would begin again in the next legislative session (2023-24).

“Our best hope (of getting the whole milk provisions for schools and WIC) is for Republicans to take back the majority in November,” said Thompson, explaining that he is already working with Ranking Member Virginia Foxx, a Republican from North Carolina. “She understands the issue and knows this is one of my top priorities.”

If Republicans gain a House majority in the midterm elections, Foxx is a likely candidate for chair of Education and Workforce, and Thompson would be a senior member of that committee as well as being a likely candidate for chair of the House Agriculture Committee, where he is currently the Ranking Member.

In fact, he said he is “very positive” about being successful getting Whole Milk for Healthy Kids out of committee under Republican leadership and is already working hard to ensure its success out of the full House, pending who is in leadership after the midterms.

Thompson said he is also working on allies in the Senate.

Up until now, it has been the outgoing Senator from Pennsylvania – Pat Toomey – who has “carried the milk” on this issue with companion legislation in the Senate.

“His bill impressed me in how he and his team thought through the issue on fat limits that are imposed on our nutrition professionals in schools,” said Thompson, taking note for future reintroductions of his bill.

On the House side, the Childhood Nutrition Reauthorization originates in the Education and Workforce Committee, but in the Senate the package originates in the Agriculture Committee.

Thompson notes that if the Republicans have a majority in the Senate, the current Ranking Member of the Ag Committee, John Boozman of Arkansas, is a likely candidate for chair. Boozman, who previously served in the U.S. House and was a mentor to Thompson. Today, they are the Ag Ranking Members in the two chambers and work closely on issues important to farmers and ranchers.

Back in 2018, when Thompson was asked at a farm meeting why his first introduction of the Whole Milk for Healthy Kids did not pass when Republicans did have a majority in the House and Senate in the 2017-18 legislative session, Thompson noted that National Milk Producers Federation, at that particular time, supported a more gradual shift to first codify the permission for 1% flavored milk then work up to the whole milk provision. 

When asked the question again after his amendment failed, he reflected, noting that in the 2017-18 legislative session, the school milk issue was not well-understood in either chamber of Congress. Then Secretary of Agriculture had made an executive decision to provide flexibility for schools to serve 1% flavored milk instead of limiting it to fat-free. But a bill to codify that change into law has also failed to pass in its three attempts as well. 

It’s not hard to believe that members of Congress do not understand this issue — given the fact that it has taken many years and much grassroots education effort to open even the eyes of parents to the school milk issue. Today, many parents are still unaware that their children over age two at 75% of daycares and 95% of schools (any that receive any federal dollars) do not have the option of drinking whole and 2% milk. Their only milk options by federal prohibition are 1% and fat-free. People just don’t believe it to be true and figure the problem kids have with milk at school is because it’s not chilled enough or comes in a hard to open carton.

In the current effort to get whole milk provisions into the child nutrition reauthorization, however, Thompson confirmed that in addition to the Grassroots PA Dairy Advisory Committee and 97 Milk effort —  “all major dairy organizations were working on this.”

Put simply, said Thompson, if the Republicans gain a majority in November, they are likely to be the ones who will write the next child nutrition package. As the one written recently by the Democrats is headed to the full House and has a tough-go in the Senate, Thompson said even if it does pass, targeted legislative fixes could be achieved in the next legislative session, pending a change in leadership.

“My goal is to work hard. The package that is going to the House now under the Democrats not only does not include whole milk provisions, it continues to micromanage school nutrition professionals who are the ones who know the kids the best and are in the best position to know how to help them eat in a healthy way,” said Thompson.

“Under the current (Healthy Hunger Free Kids Act of 2010) and this update — if it passes — kids aren’t eating the lunches. If they are not eating the meals (or drinking the milk), then it is not nutritious,” he added.-30-

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Bishop family starts new chapter at Bishcroft Farm, large herd dispersal of 1500 head Sept. 1 and 2

With mixed emotions as they transition away from dairy at Bishcroft Farm are Herman and Marianne Bishop flanked on the left by Tim and Anne and their children (from left) Thomas, Esther, Jim and Elizabeth and on the right by Rich and Nikki and their children (from left) Peter, George, and Bethany (not pictured).

By Sherry Bunting, Farmshine, August 19, 2022

ROARING BRANCH, Pa. — It is likely to be the largest dairy herd dispersal in the Commonwealth of Pennsylvania when the Bishop family has their two-day auction of 1500 head on September 1st and 2nd at Bishcroft Farm here in Roaring Branch, Tioga County.

The sale is managed by Fraley Auction Company, Muncy.

The Bishops have been dairying 83 years across three generations. Herman and Marianne are in their 75th year of membership with Land O’Lakes and were recently recognized for that milestone. They operate the farm in partnership with sons Tim and his wife Anne and Rich and his wife Nikki and are transitioning toward a more flexible future, while leaving open the option that another generation may want to milk cows on a smaller scale someday.

The closed commercial herd of sire-identified, AI-bred Holsteins is attracting interest with 580 first and second lactation out of the 750 total milking and dry cows selling Thursday (Sept. 1) and the 750 heifers selling Friday (Sept. 2), ranging 4 months old to springing, with 100 heifers due from sale time through December.

The herd makes an RHA of 26,146M 1021F 797P with somatic cell count averaging 138,000 on the sale cattle.

The sale list will note whether cows are bred to beef or sexed semen Holstein.

They started with Angus beef-on-dairy three to four years ago, primarily on the cows that weren’t settling — resulting in those genetics leaving the herd, Rich explains.

They use Holstein sires on the cows that are daughters from higher net merit bulls, and all bred heifers are due to Holstein sires with 90% to sexed semen, the Bishops confirm. Two-year-olds are also bred first service to sexed semen with a high percentage due to sexed-semen.

The Bishops are keeping all crossbred cattle and all calves under four months of age to raise and sell at breeding age, as they have forage to use up.

“We’re also keeping the bottom end of the cows to continue milking 100 to 150 head for a while,” Rich explains. That is until their valuable production base with Land O’Lakes is sold. 

“Our base is listed on the Land O’Lakes website and must transfer through their system, but they don’t set the prices,” he explains. “The buyer and seller negotiate the price and quantity with a 1000-pound daily base minimum transaction.”

Bishcroft currently ships a trailer load of milk every 21 hours. They have worked hard to manage their production to their daily base of 64,352 pounds of milk, which can only be sold to existing Land O’Lakes members.

During a recent Farmshine visit, Rich’s son Peter, 13, was the one to say he’ll really miss the dairy cows.

“He’s never known anything different,” says Nikki. “He fed the calves with me since he was a toddler.”

At the time of the sale, the Bishops are milking 750 cows 3x, having peaked in January milking 820. They have always milked 3x, even experimenting with 4x, seeing 7 to 8 pounds of additional milk per cow, but finding it unsustainable in terms of labor.

The Bishops observe that smaller dairies and more diversified farms have more flexibility to navigate changes in weather patterns, markets, labor and policies.

“I don’t see ever going back to milking a large herd here,” says Rich. “Maybe a small herd. Maybe Peter will want to do something like that with direct-to-consumer sales. But I don’t see going back to what we have today.”

At Ag Progress Days last week, a panel of experts said Pennsylvania is the state with the second largest volume of direct-to-consumer sales of farm products. A relationship with consumers holds some appeal for the Bishops as they transition into cash cropping with some beef on the side and a limited amount of pork as well.

The Bishops have always strived to be near the top of the dairy pack. Progressive and forward-thinking, the brothers participated in industry conferences and geared decisions toward cow comfort, productivity, quality and efficiency.

In fact, that’s something they’ll miss most — the friends they would regularly see at dairy industry meetings. 

“Things aren’t what they used to be,” says Tim.

“We see this developing to where larger herds like ours have to be in the top 10 to 20% or we are going backward,” Rich observes. “Dad is almost 77, and he’s doing the majority of the feeding. Tim and I want to spend more time with our families off the farm, and it’s getting harder to attract and keep employees that are willing to work these hours or to make enough money in dairy here to pay the wages and overtime competing with what is happening in New York State.”

The milk price jump of 50% this year was welcome relief after six years of tight margins and uncertainty. That’s when the Bishops really took stock of their position and decided to invest differently.

When asked how it feels to see the herd being sold, Herman, the patriarch, replied: “This is no different than what I did in 1970 when I increased my dad’s herd.

“It’s the way it goes. We made a change in 2004 and 2005 for another generation, not for me. I had a registered herd of 150 cows. We did a lot of research. The boys went and looked at 60 farms. They built this and expanded the herd (from 150 to 350 and from 350 to 650 and from 650 to 800). We changed things for the times, and that’s what’s happening now, a change for another generation,” Herman explains.

Rumors have run rampant, but the simple truth is this: The families are transitioning to options they see as more flexible and less stressful. 

They began transitioning their cropping this spring, knowing they wouldn’t need the same mix of crops and forages. They had already been doing trial work for Syngenta. They started looking into utilizing the freestall facilities for beef to some extent, maybe converting to a bedded pack. They’ll still make some hay, but their investments now are in equipment for cash cropping the 1450 acres of land they own and rent.

They planted soybeans for the first time and handled the cover crops differently, harvesting some as small grains, and burning a lot of it down as ‘green manure’ fertilizer to minimize their need for purchased fertilizer.

This will also be their first year combining corn, Tim explains, noting that on-farm grain storage is something they are looking at as they planned to go to Empire Farm Days the day after our visit.

In fact, the brothers note the higher milk price this year allowed them to make some crop equipment investments from cash flow.

As the Bishops raise and feed-out their beef-on-dairy crossbreds, they realize they have a learning curve ahead of them if they move further into beef production.

“We hope to do some direct-to-consumer sales,” says Tim, “feed some of these cattle and bring in a few pigs, even look at doing a truck patch (garden).”

Nikki says the family has always taken time to educate and advocate with the community of consumers around them. Tim’s youngest daughter is a Little Miss U.S. Agriculture, and Nikki fields questions constantly from her colleagues where she works at a local hospital. They want to know where their food comes from.

“People are curious. I have explained cattle rations, comparing it to the ‘ages and stages’ diets we have for kids (at the hospital). The response I would get is ‘that sounds like complicated hard work, why don’t you just buy milk at the store like everyone else?’” Nikki relates.

“These are educated people, and they didn’t quite get it until I explained that if they went to Weis Markets, the milk they were buying might be ours!”

She also tells the story from a few years back when fellow nurses saw the rBST-free pledge on the little milk chugs in the hospital cafeteria and started asking what it was because they thought they were going to win a ‘free rBST.’

While young Peter said several times that he’ll miss the cows, others in the family said they’ll miss the fresh milk.

“We might have to keep a few to milk for ourselves and to have milk to feed to the pigs,” says Tim.

“Excited and nervous” were the two words he used to describe the transition ahead.

“It is nerve-wracking but also feels a little like seeing a bit of light at the end of the tunnel,” Rich adds, noting the stress that comes with price volatility and labor issues will now flip to adjusting to managing cash flow without the regularity of a milk check.

The children are still adjusting to the news, having learned of the decision just a few weeks before our visit.

Some have favorite cows they’ve grown and shown that will have to stay, but Rich also notes none of the kids were “dying to milk cows,” and if they decide they want to do that, some assets are here they can put to use on a smaller scale.

“We have ideas and thoughts about how to utilize what we have differently, but we want to walk before we run,” he says.

Toward that end, the brothers are participating in seminars and looking at beef programs that are coming along. Their main focus will be low input, feeding the current beef-on-dairy crossbreds, raising the 120 heifer calves under 4 months of age they are retaining to breeding age, seeing how the sale goes, maybe looking at buying some feeder cattle… Time will tell as they look and learn and adjust.

“When you realize what a huge world God has created and we’re out here trying to feed the world, you realize how fortunate you are to live here and to be farming,” says Tim.As Herman affirms, this is another chapter in the story:

“The farm and the family are here. As for the future, we never know what it brings.”

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Why did PMMB go after raw milk farms for Milk Dealer licenses? Small farm bottlers push back, PMMB puts further licensing ‘on hold’

When Lone Oak shared their public post to customers on facebook that their raw milk and chocolate milk would no longer be available at Back to Nature, they encouraged their customers in Indiana, Pennsylvania to come the extra 20 miles to the farm in Marion Center. The response was overwhelming. They chose to only sell their milk at the farm after being notified by PMMB about needing an intrusive Milk Dealer’s license on top of the PDA permit, inspections and testing they already do. Small processors are pushing back, and PMMB has put licensing of small processors on hold as it evaluates what to do. Facebook photo

By Sherry Bunting, Farmshine, August 19, 2022

HARRISBURG, Pa. — Calls and mailings from the Pennsylvania Milk Marketing Board to small dairy farms processing and selling their very own milk — including those that are permitted by the Pennsylvania Department of Agriculture to sell raw milk — are stirring up a hornet’s nest .

The context of the communications was to get these very small processors to fill out the intrusive applications for Milk Dealer’s licenses, to pay the flat fee, and to do the ongoing monthly milk accountant reporting and calculate and further pay their 6 cents per hundredweight on sales.

To most, this made no sense, given these farms do not purchase milk from other farmers. They do their own pricing based on their expenses — always well above the state-mandated retail minimum — and many are selling raw milk, which is not a general or interstate commerce item.

In the case of raw milk, these producers operate outside of the Federal Milk Marketing Orders, so why is the Pennsylvania Milk Marketing Board (PMMB) coming after them for a Milk Dealer’s license? And why now? Could it have something to do with the bill seeking to collect over-order premium and pool it and pay it to producers directly so that the big players can’t continue to strand some of that premium?

Think about it. The PMMB doesn’t license entities doing cross-border sales of packaged milk whether it was produced in-state or out-of-state to follow the money, but they want small raw milk farms to be licensed Milk Dealers? Something isn’t right.

To their credit, however, the pushback from raw milk producers and citizens has resulted in PMMB putting this licensing effort “on hold”… for now.

Lone Oak Farm, Marion Center, Pennsylvania was one of the small producers to get a voice mail from an attorney identifying himself as a “special investigator for the Milk Marketing Board” wanting to know the name and address to send a packet to fill out.

The packet came. It was the same packet they had received two years earlier — a month before the Covid pandemic — but at that time they were only selling their raw milk and chocolate milk at the farm. They had stated in 2020 that the Milk Dealer’s license did not apply to them and never heard back from the PMMB.

That was the end of it, until August 2022.

This time, the packet included the same letter, along with an intrusive form requiring them to list all of their assets, liabilities — a complete financial statement of personal information — as part of a Milk Dealer’s License application along with monthly forms for calculating their 6 cents/cwt monthly licensing fee and the lesser fee for milk sold through products on which PMMB does not fix a price.

“There was no flow chart to determine if we needed to do this (like is shown below at PMMB website: https://www.mmb.pa.gov/Licensing/Dealer/Documents/License%20Flowchart%202020.pdf). My wife emailed back wanting to know why this pertained to us,” said Aaron Simpson of Lone Oak Farm in an Aug. 17 phone interview with Farmshine. “We were told it pertains to us because we were selling a small amount of milk off site at Back to Nature,” a health store in Indiana, Pennsylvania.

“Someone tipped them off,” he guesses. “We didn’t fill anything out (in the packet), and my wife responded that we would pull our small wholesale account out of Back to Nature rather than jump through these hoops.”

For Lone Oak and other small producers voicing concern, it isn’t even the 6 cents/cwt licensing fee that is the biggest problem, though they believe it is unnecessary. The real problem is the onerous and intrusive forms and the logistics and time it takes to fill out monthly milk accounting to the PMMB. Farms like Lone Oak already applied for and were granted raw milk permits by the Pennsylvania Department of Agriculture (PDA), which inspects them.

Furthermore, as a small producer, with several entities from produce to bakery to milk and more under one umbrella on the farm, the financial statement that the PMMB was requiring was information Lone Oak was not comfortable providing. Why should they? Why is it the PMMB’s business to know their personal business?

“They asked for our entire financial rundown of the farm — as a whole — right down to every asset we own, some of it not even related to the dairy. We are not willing to give that up for a (Milk Dealer’s license),” said Simpson. “This is not how it should be. The only reason we exist is because selling all of our milk conventionally has not been feasible. We are one of three dairy farms left in our township. We are down to the bits and pieces of who makes it and who doesn’t, and that’s been a failure of the dairy industry.”

Most farmers wouldn’t really choose to do customer service as they would rather focus just on farming and taking care of the cows, not running a store. Many have turned to this to preserve their livelihoods, their dairy farms.

“The whole reason we are doing this is because the Milk Marketing Board has failed the farmers, the dairy industry has failed the farmers. How many farms has Pennsylvania lost since 2015?” Simpson pondered aloud. “Within five miles of us, we have lost five or six farms since 2015, so we started selling our own milk with a permit from PDA in 2016.”

Simpson is part of the fourth generation at Lone Oak Farms, milking 40 cows in the same 1960s barn, and diversifying over the years instead of expanding the dairy herd. Now he gets calls from other farmers with all herd sizes wondering how they got started, including large farms wanting to scale back their herd size and get closer to consumers.

When Lone Oak shared their public post to customers on facebook that their raw milk and chocolate milk would no longer be available at Back to Nature, and encouraged their customers in Indiana, Pennsylvania to come the extra 20 miles to the farm in Marion Center, the response was overwhelming.

As the post was shared multiple times, PMMB executive secretary Carol Hardbarger commented that the PMMB staff was looking into what could be done, but that they had to “follow the law.”

The law, according to the flow chart found at the PMMB website (above), stipulates that any dairy farmer selling more than 1500 pounds of milk per month (less than 6 gallons per day) direct to consumers, would have to be a licensed Milk Dealer if they sold any of that milk at a site off the farm or if they sold more than two gallons per day to one customer.

This week, an official response from PMMB executive secretary Hardbarger notes that, “we have officially put licensing of small processors on hold until we decide what to do, sending a letter from me to each not licensed yet, to the ag committees with an explanation, and to PDA.”

But how did this come about and what will happen going forward?

If this requirement is truly part of the law, and if it requires small producers selling their very own milk privately in small amounts must be licensed as Milk Dealers, why have we not heard about it before?

In fact, a Penn State extension educator preparing for a value-added dairy seminar reached out to Farmshine for clarification after reading about the issue in Market Moos last week. She wanted to know why this was never brought to her attention when she asked state agencies for all of the things a small value-added dairy producer needed to know and do to sell milk and dairy products made on the farm. She wanted clarification.

According to Hardbarger, small producers, and those with raw milk permits have received packets and calls in the past, but that a list of raw milk permits was made available to PMMB recently through the online data-sharing that was set up this year between PDA and PMMB now that the weigh-sampler certification work PMMB used to help with has transferred exclusively to PDA. This put the list of raw milk permits directly into the PMMB’s hands.

This PDA list of raw milk permits has always been publicly available and updated online. So why was the action to get small producers to become licensed Milk Dealers started in earnest at this particular time? No clear answer has been given, except that the PMMB is now looking at the situation and putting it ‘on hold.’

Perhaps the biggest players in the industry — that have a stake in preserving the price-regulating and milk-accounting functions of the PMMB — are concerned about the increasing number of Pennsylvania producers going this route outside the system with some or all of their milk. Some dairy farmers are making and selling pasteurized milk and dairy products, others are selling raw milk.

In fact, at Ag Progress Days recently, a panel talked about farm transitions and how important value-added direct-to-consumer sales are for Pennsylvania’s agricultural industry. The Commonwealth has the second largest volume of direct-to-consumer sales of farm products in the U.S., and this is growing as farms are also becoming more diversified, the experts shared.

“As farmers, we don’t need another irritant to yield a pearl for PMMB. This (Milk Dealer’s license) is more administrative paperwork and a check we would need to send every month. It’s one more thing,” Simpson explained, listing all of the things they already do to sell milk through their permit with PDA and in general as dairy farmers.

“Fluid milk is breakeven across the spectrum,” he said. “We have enough irritants in a year’s time, and just that statement about irritants and pearls shows the disconnect between farmers and the PMMB.”

Farmers and dairy professionals around the state are questioning the very low 1500-pounds per month threshold on private sales of milk from farms that pushes these small producers into the category of a Milk Dealer — if any of that milk is sold at a store off the farm.

For example, Lone Oak milks just 40 cows and markets about one-third of that as direct-to-consumer sales of milk, chocolate milk, ice cream and yogurt. The rest goes to United Dairy. They are inspected four times a year for the raw milk permit and twice a year for the conventional bulk sales and federal inspection every 18 months as well. The milk tests are done twice every time they pull milk from the tank – once for the private sales and once for the conventional sales. There will also be new types of inspections coming as well, farmers are told.

Yes, small on-farm processors do not need ‘one more thing.’

“The limit for the number of gallons sold privately off the farm needs to be set drastically higher for this (Milk Dealer license),” said Simpson. “We are not even a blip on the radar, so there needs to be very large exemptions if we are to keep small farms in Pennsylvania.”

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Net loss to farmers now $824 mil. over 41 months as change to Class I formula costs farmers $132 mil. so far in 2022

By Sherry Bunting, Farmshine, August 26, 2022

WASHINGTON —  Against the backdrop of declining fluid milk sales, declining Federal Milk Marketing Order (FMMO) participation, coinciding with the accelerated pace of plant mergers, acquisitions and closures in the fluid milk sector, farm bill milk pricing reform discussions are bubbling up.

The two main issues are the negative impact from the Class I price formula change in the last farm bill, and how to ‘fix it,’ as well as how to handle or update processor ‘make allowances’ that are embedded within the Class III and IV price formulas. 

Other issues are also surfacing regarding the pricing, marketing, and contracting of milk within and outside of FMMOs as historical pricing relationships become more dysfunctional — in part because of the Class I change. 

The change in the Class I price mover formula was made in the 2018 farm bill and implemented in May 2019. It has cost dairy farmers an estimated $132 million in lost revenue so far in 2022 — increasing the accumulated net loss to $824 million over these 41 months that the new average-plus-74-cents method has replaced 19 years of using the vetted ‘higher of’ formula. 

The change was made by Congress in the last farm bill in the belief that this averaging method would allow processors, retailers and non-traditional milk beverage companies to manage their price risk through hedging while expecting the change to be revenue-neutral to farmers. No hearings or referendums were conducted for this change.

Instead of being revenue-neutral for farmers, the new method has significantly shaved off the tops of the price peaks (graph) and only minimally softened the depth of the price valleys, while returning net lower proceeds to farmers and disrupting pricing relationships to cause further farm mailbox milk check losses in reduced or negative producer price differentials (PPD), reduced FMMO participation (de-pooling) as well as disruption in the way purchased price risk management tools perform against these losses.

In 2022, we are seeing this Class I ‘averaging’ method produce even more concerning results. It is now undervaluing Class I in a way that increases the depth of the valley the milk markets have entered in the past few months (graph), and as the Class IV milk price turned substantially higher this week against a flat-to-lower Class III price, the extent of the market improvement will be shaved in the blend price by the impact on Class I from what is now a $2 to $5 gap between Class III and Class IV milk futures through at least November.

During the height of the Covid pandemic in 2020, the most glaring flaw in the Class I formula change was revealed. Tracking the gains and losses over these 41 months, it’s easy to see the problem. This new formula puts a 74-cents-per-cwt ceiling on how much farmers can benefit from the change, but it fails to put a floor on how much farmers can lose from the change.

The bottomless pit was sorely tested in the second half of 2020, when the Class III and IV prices diverged by as much as $10, creating Class I value losses under the new formula as high as $5.00/cwt.

The bottomless pit is being tested again in 2022. The most recent Class I mover announcements for August and September are undervalued by $1.04 and $1.69, respectively, as Class IV and III have diverged by as much as $4 this year.

In fact, 6 of the first 9 months of 2022 have had a lower Class I milk price as compared to the previous formula. The September 2022 advance Class I mover announced at $23.82 last week would have been $25.31 under the previous ‘higher of’ formula. 

This is the largest loss in value between the two methods since December 2020, when pandemic disruptions and government cheese purchases were blamed for the poor functionality of the new Class I formula.

No such blame can be attributed for the 2022 mover price failure that will have cost farmers $132 million in the first 9 months of 2022 on Class I value, alone, as well as leading to further impacts from reduced or negative PPDs and de-pooling.

The graph tells the story. The pandemic was blamed for 2020’s largest annual formula-based loss of $733 million. This came out to an average loss of $1.68/cwt on all Class I milk shipped in 2020.

These losses continued into the first half of 2021, followed by six months of gains. In 2021, the net gain for the year was $35 million, or 8 cents/cwt., making only a small dent in recovering those prior losses.

Gains from the averaging formula were expected to continue into 2022, but instead, Class IV diverged higher than Class III in most months by more than the $1.48 threshold. Only 2 months in 2022 have shown modest Class I mover gains under the new formula, with the other 7 months racking up increasingly significant value losses – a situation that is expected to continue at least until November, based on current futures markets.

Bottomline, the months of limited gains are not capable of making up for the months of limitless loss, and now the hole is being dug deeper. 

True, USDA made pandemic volatility payments to account for some of the 2020 FMMO class price relationship losses. Those payments were calculated by AMS staff working with milk co-ops and handlers using FMMO payment data.

However, USDA only intended to cover up to $350 million of what are now $824 million in cumulative losses attributed directly to the formula change.

Furthermore, USDA capped the amount of compensation an individual farm could receive, even though there was no cap on the amount the new formula may have cost that farm, especially if it led to reduced or negative PPDs, de-pooling, and as a result, negatively impacted the performance price risk management tools the farm may have purchased.

The estimated $824 million net loss over 41 months equates to an estimated average of 58 cents/cwt loss on every hundredweight of Class I milk shipped in those 41 months.

Using the national average FMMO Class I utilization of 28%, this value loss translates to an average loss to the blend price of 16 cents/cwt for all milk shipped over the 41 months, but some FMMOs have seen steeper impacts where Class I utilization is greater.

This 16-cent average impact on blend price may not sound like much, but over a 41-month period it has hit mailbox milk prices in large chunks of losses and smaller pieces of gains, which impact cash flow and performance of risk management in a domino effect.

The 2022 divergence has been different from 2020 because this year it is Class IV that has been higher than Class III. During the pandemic, it was the other way around.

Because cheese milk is such a driver of dairy sales nationwide, the FMMO class and component pricing is set up so that protein is paid to farmers in the first advance check based on the higher method for valuation of protein in Class III. Meanwhile, other class processors pay into the pool using a lower protein valuation method, so the differences are adjusted based on utilization in the second monthly milk check.

This means when Class III is substantially higher than Class IV, as was the case in 2020-21, there is even more incentive for manufacturers to de-pool milk out of FMMOs compared to when Class IV is higher than Class III.

The PPD, in fact, is defined mathematically as Class III price minus the FMMO statistical uniform blend. Usually that number is positive. In the last half of 2020 and first half of 2021, it was negative for all 7 multiple component pricing FMMOs, while the 4 fat/skim Orders saw skim price eroded by the variance.

Now, the situation is different because Class III has been the lowest priced class in all but one month so far in 2022. The milk being de-pooled — significantly in some orders and less so in others — is the higher-priced Class II and IV milk. The Class II price has surpassed the Class I mover in every settled month of 2022 so far — January through July — and the Class IV price also surpassed the Class I mover in 2 of those 7 months. 

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