Covering Ag since 1981. The faces, places, markets and issues of dairy and livestock production. Hard-hitting topics, market updates and inspirational stories from the notebook of a veteran ag journalist. Contributing reporter for Farmshine since 1987; Editor of former Livestock Reporter 1981-1998; Before that I milked cows. @Agmoos on Twitter, @AgmoosInsight on FB #MilkMarketMoos
USDA production and cow number revisions reveal how very small changes in domestic production now have very large and disproportionate impact on milk prices
By Sherry Bunting, Farmshine, November 3, 2023
EAST EARL, Pa. – The editorial opinion/analysis on the cover of the Oct. 27 Farmshine tells only part of the story after reviewing the USDA NASS downward revisions of five months of previous milk production data on Oct. 19 and looking at the monthly USDA Economic Research Service Supply and Utilization Report, released Oct. 16.
From a supply and demand perspective, there have been more positive fundamentals this year than the spring and summer milk prices would have led us to believe.
The graph shows it all.
We went back to 2018 to calculate January through August year-to-date (YTD) total solids on a milk equivalent (m.e.) basis for the supply side: milk production, imports, beginning stocks on January 1st and ending stocks on August 31 in each of the six years 2018 through 2023. We also took this approach with the demand side: exports and domestic disappearance.
Here’s what we found:
First and foremost, beginning stocks of dairy products came into January 2023 up 0.5% above year ago. Milk production also came into the first quarter on an upswing of just slightly more than 1%. After the USDA revisions of previously reported April through August data, cumulative milk production Jan-Aug 2023 is 152.8 billion pounds, up 0.3% from Jan-Aug 2022 but unchanged from Jan-Aug 2021.
Meanwhile, exports started the year on a higher note before slipping through the middle months to be down 7.4% as a cumulative total for the Jan.-Aug. period compared with the year-to-date totals for Jan.-Aug. 2022. The cumulative export volume total for those months was also 3.96% lower than Jan-Aug 2021, but nearly 6.5% above 2020 and 2018 and nearly 24% above 2019.
Simultaneously, dairy imports ended the period 3.7% higher than a year ago, and back in the January through April period —precipitating the steep drop in farm level milk prices — we saw cumulative total solids imports up a whopping 15.3% above year ago.
By April 30th, ending stocks had crept 3.3% higher than the previous year, but domestic disappearance was still beating the previous year by 1 to 4%, except January’s domestic disappearance was off 1.5%. For the Jan-Aug 2023 period, domestic disappearance is up 2.5% vs. the same period in 2022.
By August, ending stocks dropped to levels 1.3% below year ago and the lowest August ending stocks on m.e. solids basis since 2019.
Given these numbers, we see precious little space to maneuver in these markets when changes in exports and imports become the tail wagging the entire dog. Combined, they can make such a big difference to the farm-level milk price – even in the face of domestic demand beating year ago every month and what has turned out to be flattish cumulative milk production.
Since April 2023, not only have milk production and cow numbers now declined after several months of disastrous prices, the USDA has now also re-evaluated and revised lower its previously reported numbers. (We said from the beginning the cattle inventory just wasn’t there to support the earlier-reported milk cow numbers, so either USDA under-estimated the biannual inventory or over-estimated the monthly milk cow numbers).
The accelerated imports were a wild card this year from January through April before slowing down in May through August. The cumulative year-to-date total for January through August is 3.7% higher than a year ago after being double-digits higher at the end of April.
Still, when we factor in the 8% gain in imports in 2022 vs. 2021, the total of 4.5 billion pounds (milk equivalent) for the first eight months of 2023 beats the same period in 2021 by 12%. That’s significant.
Ending stocks were higher each month this year until July and August; however, exports were also holding steady to strong through May.
It is the continued year over year increases in domestic disappearance that support the uptrend in milk prices since mid-July.
Bottom line, U.S. dairy producers have just weathered a storm where even though cow numbers were not a whole lot different from a year ago, and even though milk production and beginning stocks were not so out of whack, and even though exports were generally stable until July, we saw prices this spring and summer fall 37% below the previous year, and the DMC margin fell to a record low $3.52 in July, fully 63% below the milk margin of $9.92 the previous year.
This illustrates how tiny the margins are in these supply and demand equations that can make big dents in the farm level milk price.
Increasing the national herd by a mere 5,000 cows deals a much bigger blow when it is coupled with modest gains in milk production per cow. And, even though exports are about four to six times greater in volume than imports, a sudden increase in those imports – even while exports are steady or higher – can bump the market disproportionately lower.
The good news in these graphs is that ending stocks have trended lower through the year, dipping under year ago since July, while domestic use has trended higher than a year ago every month but January. Yes, export volumes have now slowed, but so have import volumes and milk production.
The trouble I see for the future is this: As dairy farmers become more efficient, producing more milk per cow, and against this backdrop of more imports and volatile exports… the risk of extreme volatility becomes even greater whenever a new 5,000 head dairy expansion starts up or a new 10,000 to 20,000 cow dairy is built. Current replacement cattle prices at their highest level since 2015 and record high culling values for beef further push consolidation. Renewable Natural Gas credits push the type of expansions at a minimum 2500 to 7000 cow clip, replacing the diversity of farm sizes in the dairy industry at a more rapid pace.
Against this backdrop of the disproportionate impact of imports and exports on dairy markets today, the entire industry is now disproportionately more vulnerable to small changes in cow numbers. All it takes today is one large-scale business decision to flip the switch and wreck the train and bump more small- and mid-sized family dairies off the track.
It’s to the point where milk production forecasts need a microscope for the minutia, not a telescope to see the planetary alignments.
Most of the information for this report was derived from the USDA Economic Research Service data that are reported around the 16th of every month. The report includes both the dry milk powder and whey stocks as well as cold storage butter and cheese. The monthly ERS Supply and Utilization of Dairy Products by Category reports the imports, exports, and ending stocks on a milk equivalent basis separately for fat and skim solids. Using the 40/60 ratio, we figured the milk equivalence (m.e.) on a total solids basis to generate the graphs. We also updated the milk production totals to reflect the NASS revisions two weeks ago, which were not yet updated in the available ERS reports.
EAST EARL, Pa. — In the June 30 and July 7 editions of Farmshine, we covered the milk market conditions behind the drama that sent farm-level milk prices spiraling lower. The two-part “rockier road for milk prices” series explored factors and asked questions about a situation that was not making sense.
Farmshine readers will recall that we questioned dubious math on the huge milk price losses in farm milk checks – far beyond the predictions for modest declines – in the April through August period.
We questioned the accuracy of government milk production reports and the USDA’s World Ag Supply and Demand Estimates that kept telling us there would be more milk cows on farms and that milk production would continue higher for the year because of… more cows.
We doubted this was possible given the semiannual cattle inventory reports over the past year showing static to shrinking milk cow numbers and major shrinkage in the number of dairy heifer replacements (down 2% in Jan. 1 inventory, down 3% in mid-year inventory, a drop of over 100,000 head!). We have reported the escalating dairy replacement cattle prices setting multi-year record highs that are bearing these inventory numbers out.
We asked: Where are all these cattle coming from?
The June and July two-part series also indicated the 51% increase in the volume of Whole Milk Powder (WMP) imports coming into the U.S. compared with a year earlier in the January through May period — the highest volume for that 5-month period since 2016. (WMP is basically dehydrated milk for use in making any product or reconstitution.)
We also consulted Calvin Covington for his read of the situation. He reported to us that his calculations showed a 15% cumulative increase in total milk solids imported January through April, and that this extra volume was equal to 63% of the year over year increase in ending stocks on a total solids basis.
Well, what do you know! On Thursday, October 19, USDA issued its monthly milk production report for September. The report also went back and revised downward the previously reported totals for milk production and cow numbers for April through August.
Lo, and behold, in June and July while markets crashed, U.S. farms milked 13,000 and 34,000, respectively, fewer cows than a year ago. The September Milk Production report has now gone back to shave around 0.1% off of several months of previously reported milk production, and it has revised milk cow numbers lower than previously reported as follows: The May revision added 1000 head vs. prior report, the June revision shaved 4000 head off the prior report, July’s revision shaved 11,000 head, and August 14,000 head.
How convenient that while the Milwaukee Sentinel and area news stations were reporting five weeks of milk dumping in the sewers during June and July, and USDA Dairy Market News was reporting six to eight weeks of spot milk loads selling at $10 to $11 under the abysmal Class III price as it hit multi-year lows, the USDA reports had been telling us we were milking more cows than a year earlier, and those cows were making more milk.
Prices had plunged by more than 37%, and no one was talking about the scale-back of mozzarella cheese production and the ramp up of whole milk powder imports.
Sure, they were talking about the softening of dairy exports, and maybe that’s the point. The industry had to get the U.S. price levels below global levels in a hurry to honor the global goals set by the national dairy checkoff under previous USDEC president Tom Vilsack to keep growing exports on a Net-Zero pathway to get to 20% of milk production on a solids basis.
We wrote with concern in June and July about how even those prior numbers did not make sense at those previously incorrect levels, how a tiny change such as milking 7000 more cows in May vs. year ago and a little more milk per cow through the period could result in prices falling this hard in June and July. We have even more questions as even those small supply-margin factors have now been edited by USDA to be lower than previously reported for the April through August period.
Cow numbers have always been a driver for milk prices. Now we know there was an average of 21,000 fewer cows milked in the June-July period. And, by July, there were actually 34,000 fewer cows on U.S. farms vs. year ago.
For the Q-3 July through September period, the revisions show an average of 33,000 fewer cows nationwide compared with the third-quarter of 2022. Maybe this will also be revised lower in the future — as it includes the number of milk cows on U.S. farms in September that is now said to be 9.37 million as a preliminary figure.
In the space of six months, U.S. total milk production has gone from running 1% above year ago in Q-1 to nearly 1% (0.7%) below year ago in Q-3. But within that difference lies a revision that begs big questions about what was really going on while prices were plunging.
According to the tables in the September milk production report, the reality of the situation in June and July — while milk prices hit rock bottom and milk was being dumped and sold for $10 to $11 under class — we were already milking 13,000 fewer cows in June compared with a year ago and a whopping 34,000 fewer cows in July vs. year ago, according to these revised numbers. Now, in September, we’re milking 36,000 fewer cows in the U.S. vs. year ago.
In fact, these revised reports show that milk cow numbers have fallen by 74,000 head from the March 2023 high-tide – an unrevised and supposed 9.444 million head — to the August revised number of 9.376 million head and the September preliminary 9.37 million.
Think about this for a moment. We had unprecedented sets of proposals for milk pricing formula changes flowing into USDA in April and May with USDA announcing in June that a hearing of 21 proposals in five categories of formula changes would begin August 23rd.
While this was staging, we saw milk pricing drama unfold.
How useful this drama was for processors during the first eight weeks of the USDA Federal Milk Marketing Order hearing that has now been postponed due to “scheduling conflicts” to pick up where it left off on Nov. 27.
How convenient it was for processor representatives to be able to point to dumped milk, below-class spot milk prices and negative premiums as justification for their proposals to increase make allowances while attempting to block farm-friendly formula changes — all in the name of investments needed in capacity to handle “so much more milk!”
(A year earlier, Leprino CEO Mike Durkin warned Congress in a June 2022 Farm Bill hearing that, “The costs in the formula dramatically understate today’s cost of manufacturing and have resulted in distortions to the dairy manufacturing sector, which have constrained capacity to process producer milk,” he said, calling the situation “extremely urgent” and warning that immediate steps needed to be taken to “ensure adequate processing capacity remains.”)
Fast forward to the first eight weeks of the USDA FMMO hearing in Carmel, Indiana in August, September and October. We listened as large global processing representatives (especially Leprino) pontificated about how the make allowances are set too low, saying USDA is setting the milk prices too high. They pointed to all of the drama this summer as proof that farmers are suffering because processors can’t afford to invest or retain capacity to handle “all this extra milk.”
Now here we are, September milk production nationwide is down 0.2% from a year ago, product inventories are tight to adequate, prices have improved… but along the way the industry managed to shake out hundreds of dairy farms — large and small — that have liquidated during the steep downhill slide this summer that so few were prepared for, as no one had a clue it would be this bad given the tight number of milk cows and replacements steadily reported in inventory.
What was really behind the dairy cliff we just experienced, where even USDA Dairy Market News recently reported a significant number of herds milking 200 cows or less have recently liquidated in the Upper Midwest?
With record WMP imports, a pull-back in fresh Italian cheese production, and other elements behind the scenes… was the fall-out of a so-called milk surplus manufactured to prove a point? (Remember, Leprino’s Durkin warned that if make allowances aren’t raised, sufficient processing capacity may not remain. And take note that other Leprino representatives warned during the USDA FMMO hearing last month that they may not invest in U.S. processing capacity in the future, if make allowances are not raised and FMMO minimum prices lowered.)
Or was the fall-out this summer manufactured to fulfill the dairy checkoff’s goals for exports? You see, we are told there was excess product in Europe and New Zealand, and our overseas sales were softening, but still well above 2020 and about even with 2021. The industry is driven to get the deals to secure more global market each and every year, even if the means to those ends are detrimental to how we serve our domestic market in the future.
Given the pullback in mozzarella production during this “rockier road for milk prices”, we have to wonder about the testimony of Leprino representatives in the FMMO hearings. They have been doing the loudest complaining.
Leprino is also a major strategic partner with DMI and the organizations under that umbrella: USDEC, Innovation Center for U.S. Dairy, Net Zero Initiative, and on and on.
They want FMMO milk prices lowered, they said, so they can pay premiums again (?), and they believe you, the farmers, should help pay for their sustainability pledges within the make allowance formulas as a cost of doing business.
They likely want to free up capital out of the FMMO pricing levels to pay for Scope 3 emissions insets from RNG-project dairies to compete with other industries that can buy those renewable clean fuel credits as offsets.
They likely want to use your milk money to pay for concentrated manure-driven expansion in the Net Zero wheel-of-fortune pathway that has been constructed with your checkoff money.
Updated from Milk Market Moos, by Sherry Bunting, Farmshine, Oct. 20, 2023
On the day after the global dairy industry had just gathered at World Dairy Expo — a place where people come from all over the world of different backgrounds and cultures to see great cows, learn about new technologies, meet up with old friends and make new ones, we learned of the orchestrated terrorist attack in southern Israel.
Listening to the news of the atrocities committed Oct. 7 in communities along the Gaza border, the farthest thing from my mind was dairy.
But over the following days, we’ve learned that dairies were hit hard in these attacks. Dozens of dairy farmers, managers, workers, and interns were murdered and taken hostage, including those who came from other countries to work and to learn. One college student from Cambodia had just arrived two weeks earlier to begin his internship, gone now at the hands of unspeakable evil, his family talking of his love of animals and how he had looked forward to what he would learn there.
Cows were killed, equipment and barns have been burned. Reports indicate that 16 dairy farms have been impacted representing more than 5% of Israel’s milk production. Five of these farms were completely closed off to access in a “no-go” zone for at least a week, with soldiers reportedly putting hay out for the now isolated cows.
The terrorist attacks have impacted Israeli agriculture as each kibbutz that came under attack is a community centered around a farm, including a dairy, in the rural areas. According to the Israeli Institute for Dairy Farming, the 537 farms operate under two systems: 167 are kibbutz farms, the balance are private “moshav” farms.
International journalist Chris McCullough of Belfast, Ireland writes in Agri-view, a Madison, Wisconsin-based newspaper about the tragedy that unfolded as farms were finishing up the milking that morning.
In the aftermath, he interviewed Ofier Langer, who has run the Israeli Dairy School for the past 13 years. The school attracts people from 30 countries to these farms each year, educating them on the practicalities of dairy farming, Israeli style. He personally knows many of his colleagues that were murdered.
McCullough writes: “Holding back the tears, Ofier said: ‘It’s hard to take this all in. Hamas entered a number of farms and shot people indiscriminately. The area that came under attack is not just any area as it’s home to 16 dairy farms… home to anything from 350 to 700 cows per farm with average milk yields of 12,500 litres per cow per year. A few of them are even among the top 10 in the country for production per cow.All of these farms were attacked. The loss we have suffered is immense. We’ve lost friends and colleagues. Two dairy farm managers and dozens of workers were murdered. This is a heartbreaking moment for our tight-knit community. We share the pain deeply.’“
He tells of a glimmer of hope, that the Israeli Institute for Dairy Farming is collecting volunteers to help on the farms that can be reached to take care of the cows.
In a later report from McCullough for The Fence Post (see photos and report here), we are learning that efforts are underway by volunteers in bullet-proof vests trying to prevent more cows dying from starvation.
“Normal operations on those farms are slowly recovering but many have suffered serious damage as well as a loss of workers and cattle,” writes McCullough. “Following a period of five days of not being milked or fed, the cows on the farms in the military no go zone are now receiving food as trucks carrying forage are allowed in under armed military guard.”
One thing we are learning is that the attacks in kibbutzim of southern Israel targeted civilians — men, women and children, people of service, doctors, nurses, teachers, and farmers — people going about their day in their communities taking care of each other, and their animals.
WASHINGTON – Several important amendments aimed at limiting USDA and FDA powers in the administration’s climate agenda, nutrition mandates, even an amendment on checkoff transparency, peppered the hotly debated FY2024 Ag Appropriations bill in an overnight marathon at the end of September as House of Representatives worked to avoid a government shut-down Oct. 1.
Some amendments passed and others failed.
Perhaps most notable was the Spartz Amendment (76) related to commodity checkoff transparency. It passed on a voice vote in the near midnight hour Sept. 26, but a recorded vote was requested by the opposition, and it was soundly defeated 326 to 72 in the late afternoon on Wednesday.
Here’s what we’ve learned from C-SPAN coverage and other sources about key agricultural amendments that are included and excluded.
The defeated Spartz Amendment would have prohibited use of taxpayer funds to carry out, administer or oversee the 22 commodity checkoff programs.
Other amendments that succeeded would prohibit USDA’s use of the appropriated funds to carry out the administration’s “climate agenda” via a long list of executive orders. Some amendments that passed prohibit USDA’s use of appropriated funds to enforce certain school meal rules, such as a proposed to ban chocolate milk in elementary schools and the current 14-year ban on whole milk at all grade levels.
A half-dozen amendments targeted specific USDA and FDA bureaucrat’s salaries by using the Holman Rule to cut down to $1 the salaries of, for example, the USDA Food Nutrition Services deputy under secretary for her role in expanding SNAP eligibilities beyond congressional intent and in expanding USDA diet-police tactics in schools by implementing the whole milk ban from a la carte offerings in 2012.
On the failure side, in addition to the Spartz amendment, another amendment offered by Wyoming Congresswoman Harriet Hageman would have undone the USDA mandate for electronic cattle identification. It would have left the funding in place for farmers and ranchers wanting to use the electronic ID (EID) system, but would have removed the mandate language.
Said Hageman: “Ireland required this. Today, a year later, there are untold numbers of reports they must fill out for the government, and Ireland now is considering killing off 1.3 million head of cattle to reach their ‘climate targets.’ Their EID mandate will help them carry out this slaughter.”
She said mandatory EID “will cost ranchers millions in compliance cost, causing smaller farms to sell out and accelerating vertical integration so the farmers and ranchers will be nothing but serfs. This is supported primarily by the four big packers — two of which are owned by Brazil and by China.
In opposition to the EID amendment, Chairman of the House Ag Committee, Glenn G.T. Thompson (R-Pa.), said technology and innovation are needed to protect livestock agriculture from disease outbreaks.
On the Spartz checkoff amendment, Thompson said the place to handle this is in the farm bill, not appropriations.
In defense of her approps amendment, Indiana Congresswoman Victoria Spartz said: “I am a farmer, and my cosponsor is a farmer, and we want to stand with the farmers.
“Farmers used to pay a checkoff voluntarily to promote the commodities. Then Congress made it mandatory, and there is no transparency,” she said. “If you are going to force farmers to pay the money, they should know where their money goes. Do they promote commodities? Or do they promote very wealthy jobs?”
She explained further that her amendment had two parts. One calls for checkoff transparency language in the farm bill. The other sought to be included in the Ag Appropriations, simply stating that no taxpayer funds can be used to carry out or oversee checkoff programs.
“It’s a simple amendment, but the special interests have gone on the attack saying: ‘How can Congress ask us what we’re doing with the money?’” said Spartz. “Now it has become imperative since they are now lobbying with this money against this amendment and against transparency.
“They say they aren’t using taxpayer money… So, just clarify this to Congress — that no taxpayer dollars are going to these boards that who knows where they spend the money,” she explained.
Cosponsoring the amendment, Rep. Tom Massie of Kentucky said: “This program has gone rotten and no longer serves farmers. In fact, we just sent a bipartisan letter to Secretary Vilsack reminding him that the USDA is required to report annually to Congress on the disbursement of these funds and show a third-party audit of their effectiveness.”
Massie noted that these reports to Congress have not been filed since 2018 for dairy, during which time dairy farmers paid over $1 billion, and more than 6000 have gone out of business.
Thompson stressed that the debate on checkoff transparency “should be reserved for the farm bill, not appropriations.” He said taxpayer funds are not being used in checkoff programs nor to oversee them.
Thompson expressed caution that some recent challenges to checkoff programs can be a veiled attack by animal rights groups that see this as an opportunity to weaken livestock agriculture. He said the farm bill is the place, “where conversations are already occurring, to improve these programs, to refine them, and to make them more transparent. I see the farm bill process as the appropriate path forward for achieving this transparency.”
“They should already want to be transparent to show this great thing they do for farmers,” Spartz countered. “But they are serving large monopolies, contributing to more consolidation so the little guy cannot survive.”
Spartz noted that Congress should “not be afraid to challenge these programs… to be the lobby for the people.”
For the three days leading up to the vote on the Spartz amendment, many agricultural groups with close ties and joint programs with commodity checkoff organizations amassed a barrage of lobbying efforts in opposition.
National Milk Producers Federation and National Cattlemen’s Beef Association spearheaded these efforts, including a letter signed by 130 organizations, saying that the Spartz amendment “unfairly targeted ‘producer-led’ checkoff programs that only use funds collected from proceeds of sale of these commodities – not taxpayer funds.
Here’s how I see it… If that premise is true, then what are the lobbyists opposing it so afraid of? No foul, no harm, right?
Perhaps they are afraid of the auditing that may be required to prove to Congress that no taxpayer funds are used to carry out checkoff programs. In fact, at the 11th hour, the Ag Environmental Coalition signed on to the letter opposing the Spartz amendment that was sent broadly to congressional offices urging a ‘no’ vote.
Could it be that taxpayer funds in the USDA coffers are being coughed up to further so-called ‘net-zero’ pathways initiated by the national dairy checkoff via DMI and its various tentacles?
It was USDA Secretary Vilsack, himself, who was first to announce Dairy Net Zero while testifying to the U.S. Senate in 2019 — asking them to fund Net Zero pilot programs. At that time, he was employed by checkoff, pulling down a million dollar salary via checkoff.
Now, Net Zero is the centerpiece of DMI’s “U.S. Dairy transformation” and the USDA ‘climate agenda’.
In fact, during a debate on an amendment offered by Florida Congresswoman, Kat Cammack, she cited a recent report citing Vilsack’s coordination with Arabella Advisors, a Soros-funded group, on “transforming the U.S. food system.”
She said the U.S. “can’t produce and process food for this country and abroad if we can’t rely on fuel and food systems not to be hijacked by the extremest climate agenda” and noted “many of these radical things do more harm than good to our environment. Our farmers and ranchers are the best in the world, and this amendment prevents the Biden administration from pushing its climate initiatives. It safeguards farmers and ranchers from these misguided policies.”
Could there be some blurred lines between taxpayer and checkoff funds piled into the climate-smart wheel-of-fortune?
Is there some leakage of taxpayer funds into certain checkoff industry structures and pre-competitive proprietary partnerships that create winners and losers among farms, among processors, among regions?
Certainly, Secretary Vilsack’s salary has been drawn from two pockets over the past 15 years (taxpayer, then checkoff, then taxpayer). This raises eyebrows as do the shared pathways to the same destination (net-zero) being paved with funds from both pockets. Each may fund a different track, but moving in unison to the same destination: putting the cow in the loser column so that Big Food and Big Tech can collect Big Money with the tools to move her over to the winner column (temporarily, folks, because cows don’t stop belching).
The way I see it, DMI and its many tentacles have charted a path for dairy that deems the cow a loser while developing the pathway to be her savior — to turn her into a winner and then tell her story. They promote the RNG projects, feed additives and sustainability practices that reduce her natural methane emissions, but forget to promote the fact that
With or without these pathways to Net Zero, the cow is already a winner! Cows are not the problem! A cow’s global warming potential (GWP) is not new, it is a constantly recycled baseline in a natural biochemical cycle that is as old as life itself. Math matters here!
Meanwhile, some of the checkoff-promoted tools deemed to make her loser-methane a “winner” will actually consolidate the dairy industry even more rapidly.
Large new production sites hinge on huge Renewable Natural Gas (RNG) projects that hinge on lucrative renewable fuel credits. Each permit recorded over the past two years and forward for the next five equals 2500 to 10,000 cows in expansions and new dairy sites.
These operations are less dependent on the level of the milk price to cash-flow, and they are bound by contracts to milk large numbers of cows to produce quantities of methane to then offset via RNG production to then generate credits for the exchanges.
At the federal milk pricing hearing in Indiana, we have heard processors lament that the FMMO minimum prices are too high. They’ve said the proof is the negative premiums and dumped milk this summer.
Are they really looking at getting the milk price minimums low enough that they can pay for those large new and expanded farm methane credits for their own scope 3 portfolios? Some processor testimony has mentioned sustainability costs in the make allowance part of the FMMO hearing. Do they want to weaken FMMO uniform pricing so they can cut farms that don’t measure up and use creative methane math to buy credits from others via milk premiums built on lower FMMO minimum prices?
We even have a global processor in New York State already doing a ‘pilot’ right now to monitor methane by analyzing their shippers’ Dairy One milk test data to benchmark farm methane emissions and make “recommendations.”
There’s a lot of money to be made by keeping cows in the loser column, and then building the consolidated pathways to move her into the Net Zero winner column.
Unfortunately, the math doesn’t add up, and the real losers will be our beloved cows – foster mothers of the human race — and our children and grandchildren who are already deprived of the very best our cows have to offer during 2 meals a day, 5 days a week, 9 months a year at school.
Farmshine editor and publisher Dieter Krieg hit the nail on the head in his editorial in the September 22 edition. The anti-animal agenda is real, and that fox is has been inside our henhouse with an agenda that began in 1995 when DMI was created to manage both halves of the checkoff structure, and it has become more obvious since 2008, when the Innovation Center for U.S. Dairy was created. This is also the year the whole milk ban train started rolling and DMI began conspiring with USDA to “advance the dietary guidelines” via a memorandum of understanding that initiated GENYOUth.
We’ve reported extensively on the murky methane math, the ten-fold typographical errors, the worsening dietary guidelines that ignore science, and the progressively more restrictive fat rules for school meals that are now morphing to anti-cow climate considerations.
More recently, we’ve reported on how the bubble-up in milk production in the Central U.S. that led to dumping of milk and unforeseen disastrous prices this summer was largely fueled by new RNG projects like are promoted by checkoff to help our very-bad, no-good cows become good for the planet.
The misappropriation of math and science has been staggering. Government is the problem, not the solution. Cows are the solution, not the problem. Newsflash: cows are already good for the planet, and they provide us with optimum natural nutrition we enjoy.
Farmers testify, Farm Bureau stands firm, USDA asks good questions, wants to hear from farmers
Bryan Henrichs, an Illinois dairy farmer, included a chart in his testimony showing these PPD swings in his milk marketing area (Order 32) from January through December 2019, before and after the Class I mover change — a year BEFORE the pandemic hit.
Sherry Bunting, Farmshine, September 22, 2023
CARMEL, Ind. – The controversial “make allowances” took center stage for the past 10 days at the USDA federal milk price hearing in Carmel, Indiana. Witness testimony and attorney cross examinations — as well as follow up questions by USDA staff — have been particularly revealing. To-date there are nearly 300 exhibits, and the hearing is two-thirds of the way through its 21 proposals in five categories. The hearing can be followed daily at the live stream link: https://www.zoomgov.com/j/1604805748 
American Farm Bureau Federation economists Danny Munch and Roger Cryan have been exemplary in the way they are bringing their grassroots policy to the USDA hearing setting and standing up to heavy cross examination by attorneys for the processors as they seek to undermine AFBF’s position that no make allowance increases should be granted by USDA without a mandatory, audited cost survey, and that the Class I mover should go back to the ‘higher of’ calculation.
Entering its fifth week on Tues., Sept. 19, the emphasis has shifted to the various proposals on how to calculate the Class I base price ‘mover’ – whether to return to the ‘higher of’ or to use one of several proposals from processor groups that want to keep the ‘average of’ method but propose complicated ‘look-back’ adjusters to incrementally ‘pay back’ future Class I value losses incurred by farmers over a distant multi-year time frame.
Last Friday, September 15, several dairy farmers testified. In this week’s hearing update, we’ll focus on one farmer’s illustrative testimony in support of National Milk Producers Federation’s proposal 13 to return to the ‘higher of’ for the Class I mover calculation.
While several testified, it was dairy farmer Bryan Henrichs, of Breeze, Illinois who best described the impact of the Class I mover change made legislatively five years ago on farmers’ ability to do risk management and on the FMMO mandate for ‘orderly marketing’ and service of the Class I fluid milk markets.
“With some classes having the ability to depool, this has created disorderly marketing as there isn’t the incentive to serve the Class I market,” said Henrichs. “I am unable to have my cooperative depool my milk due to my milk serving the Class I market. I have heard from some in the industry that the negative Producer Price Differentials (PPDs) (and resulting losses to dairy farmers) were caused by the USDA food box program. I would disagree as the negative PPDs began not too long after the industry moved to the ‘average of’ in May 2019.”
Henrichs operates a 300-cow dairy farm, is on the Prairie Farms board, the American Dairy Coalition board, and was part of the American Farm Bureau Federation (AFBF) dairy task force. He saw first hand the devastating consequences to farmers from the Class I pricing change.
Henrichs included a chart in his testimony showing these PPD swings in his milk marketing area (Order 32) from January through December 2019, before and after the Class I mover change a year before the pandemic hit.
He noted the industry has well documented the severity of losses much larger than this during the 2020-21 pandemic as well as the continuation of Class I value losses and depooling to farmers, even when it doesn’t show up as negative PPD — when Class IV is higher than Class III as has been the case in 2022 and 2023.
Henrichs expressed appreciation to USDA for the Pandemic Market Volatility Adjustment Program (PMVAP) payments that were aimed at covering just a fraction of these losses.
However, Henrichs duly noted the problem with “support” after-the-fact and the problem with “rolling adjusters” that try to make up for these losses later. They don’t help much if the large losses — the large negative basis that can’t be managed — hits cash flow so hard that farms are out of business by the time it’s “made up” to them and then only “made up” partly or quite gradually.
“I know some dairy producers that needed that money at that time — not 12 to 18 months later. I know of some that are no longer in business when they received the (PMVAP) payments,” said Henrichs. “The ‘higher of’ will ensure that the dairy producer is compensated at the time of the sale instead of later by some other form of support… and I worry if the USDA will always have the funds to provide such support.”
Henrichs pointed out that risk management doesn’t help in this scenario.
“We have used risk management tools in the past such as forward-contracting and DRP to help manage the price volatility of the dairy markets. With the ‘average of,’ we see the higher level of negative PPDs, which acts as ‘negative basis’,” Henrichs testified.
“We are familiar with ‘negative basis’ with corn as that indicates what the market values the commodity at the time of sale. At least with corn, I can call the elevator and find out what the basis is and decide if I want to ship to market,” he explained, adding that as dairy farmers, “we produce and ship a perishable product. With a negative PPD, we don’t know until two weeks after we are done shipping for the entire month whether or not there is a negative basis.”
Henrichs noted that he was shown a check from a neighbor who forward contracted in July 2020.
“He shared with me his check as he locked in $18.00/cwt. milk in a Class III futures contract. He lost on the futures contract — as he would expect when the market rises — but due to the negative basis or negative PPD, he ended up with a net check of around $9.00/cwt. I continue to evaluate the amount of negative PPDs since going to the ‘average of,’ and I am reluctant to use forward contracting or DRP as part of my farm’s risk management program,” said Henrichs.
He stood his ground as attorney Steve Rosenbaum for IDFA made several attempts to trip him up on cross-examination. Rosenbaum tried to ‘cherry pick’ a few months in 2019 when the ‘average of’ yielded a slightly higher Class I mover compared to what it would have been under the ‘higher of.’
Henrichs’ matter-of-fact answers left the IDFA attorney unable to break him down. Rosenbaum asked if Henrichs had done monthly analysis of the ‘average of’ vs. the ‘higher of’ to see the months when it was positive. Henrichs replied: “Yes, we’re always watching.”
“No one questions, obviously, that when it comes to 2020 and the pandemic, Class III and IV started diverging substantially, and you ended up with less… but do you agree with me that until that happened, you weren’t experiencing this kind of ‘anomalous’ result, were you?” queried attorney Rosenbaum for IDFA.
“Not at that point, but once we started receiving the negative PPDs, they got extremely large, as you can see,” Henrichs replied, referring to Table I in his testimony. “It was way more of the negative than what the positives were prior to that.”
(Table I shows the PPD in Order 32 for all 12 months of 2019 — before and after the Class I formula change, which was implemented in May of 2019. This was a year before the pandemic. In fact, going forward it is still “way more negative than positive.” Farmshine has also been watching this accumulation of over $1 billion in cumulative net losses to farmers across 53 months, a graph that has been updated and published several times in Market Moos.)
Erin Taylor, acting director of USDA AMS Dairy Programs, questioned Henrichs about risk management: “So is this ‘negative basis’ the reason you are not using risk management tools currently?”
“Yes,” Henrichs replied, adding that, “as a custom operator putting silage up for a lot of dairy farmers, a lot of questions on dairy pricing get sent to me. We’ve had producers that bought DRP contracts, and in the months of April, May and June 2020, they were set to receive a pretty large sum, but because of depooling, with around a $20 to $21 Class III price in June of 2020, farmers in our area — because of depooling — were unable to receive that (higher price) in their milk checks, but they were also not able to receive the DRP payments that were set to come to them.
“They were kicked out because the price on the futures was higher than their contract that they purchased – that they bought for an $18 coverage for example – well that $20 (Class III price) kicked them into being above that ($18) they purchased, and they didn’t get a payment. So, even though on the Board of Trade, they may have looked good, that’s not what we received on our dairy farms,” Henrichs shared.
“Because that Class III milk wasn’t pooled?” Taylor picked up his the thought train in the form of a question.
“Yes, In Order 32 only 6% of Class III milk was pooled that month, so our price was around $12 to $13 per hundredweight for our dairy farms, but their contract for ($18) was set to pay them but did not because of that $20 Class III price on the Board of Trade (which became the announced FMMO price that led to Class III depooling).”
(Put simply: That higher price the DRP contract ‘saw’ meant no DRP payment for the farmer, but that price wasn’t realized by the farmer. This is similar to having your barn burn down, and your insurance adjuster saying ‘well, because your neighbor’s barn didn’t burn down or something on paper says your barn should not have burned down, you are not entitled to a payment for your barn that in fact burned down.)
Taylor also asked what disorderly marketing looks like to dairy farmers. Henrichs gave perhaps the best explanation yet on this hearing record. He explained how the upside-down pricing — the misalignments that have been brought on by the switch from ‘higher of’ to ‘average of’ — caused pooled farmers to have ‘uniform prices’ vastly different within miles of each other due to depooling incentives on some Orders.
“Going back to the months of June 2020, and July, we saw large Class III prices, whereas in the ‘average of’, we saw Class I and Class IV were much lower, and you had farmers in Wisconsin, in Order 30, getting $4 a hundredweight more per the FMMO website, on the uniform price. We have producers that are within miles of 30, shipping in FMMO 32, who were $4 different, and their milk was being produced not far from each other. That’s disorderly marketing in my opinion,” said Henrichs.
“When you have guys not wanting to go to a Class I plant because the Class III price is so much higher, that is what I consider disorderly marketing — where you would have people jumping in and out of which product they want to sell their milk to that day because of the pricing disparity amongst the classes. Part of the class pricing in the FMMOs are to stabilize pricing to producers in each Order to be pretty similar.”
“So you’re saying that you see class prices being in typical historical alignment as orderly?” asked Taylor.
“Yes,” said Henrichs.
“Because then the incentive is there to service the Class I plants?” Taylor asked further.
“Yes, service the Class I first… make sure those are full for the fluid industry because they’re not able to store product like the powder and cheese plants,” Henrichs added.
Throughout this hearing, attorneys for IDFA and Milk Innovation Group scoffed at the idea that Class I plants could have any trouble getting milk for fluid use because the country has more than enough milk to go around.
They avoided the question of what does it cost or how do they attract the milk to the Class I plant when the historical alignments are out of whack.
They put forward witnesses from very large international processors saying that the FMMO minimum prices are set too high, that they must be lowered by raising make allowances and keeping the ‘average of’ mover and cutting Class I differentials and all sorts of changes.
They pointed to the dumping of milk this spring in the Central U.S. as proof that FMMO minimum prices are set too high and must be lowered so that processors can pay premiums if they want to and can invest in plant capacity to soak it up so it doesn’t go to the sewer.
USDA’s Taylor went so far as to ask these processor witnesses what other factors affected the milk dumping this spring, what other factors affect milk production growth (in the Central U.S.).
Processor witnesses stammered around on these capacity and innovation questions. They weren’t sure how to answer some of the very direct USDA questions over why they are so fast to make sure every bit of their cost is covered in that make allowance and yet balk at the idea of being asked to account for more of the pricing or value side.
Henrichs is just one example of farmers who are testifying in person on various days or virtually via Zoom on Friday afternoons. It is obvious that USDA AMS personnel want to hear from farmers – what they have to say, how all of this affects them.
Farmers are the only ones who can show up at the hearing venue on any day, let an official know they are there to testify, and be worked into the schedule without sending written testimony or notice ahead of time. USDA merely asks that farmers bring their written testimony with them and make copies to hand out.
Virtual testimony must be pre-registered, but in-person testimony can happen any day.
Those farmers wanting to testify virtually have one more scheduled opportunity on Friday, Sept. 29. To get one of the available slots for that day, go to the hearing page on Monday, Sept. 25 at noon to look for the signup link. Be quick about it, because last Monday, the slots for Sept. 15 filled up within less than two hours. If the hearing continues into October, go to the webpage on subsequent Mondays to sign up for any slots offered on subsequent Fridays.
USDA’s Taylor brings the department’s questions for every witness. She has done a noteworthy job of this, pressing industry witnesses for details and bringing the deeper levels of farmer testimony to the fore.
Remember, when this is all over, and the t’s are crossed and i’s dotted on a USDA final decision, farmers will vote ‘yes’ to accept these changes or ‘no’ to dissolve their Federal Milk Marketing Order. This means even if co-ops bloc vote for their members, the co-ops and farmers have the final say.
There is an obvious concern among some in the processing sector that the FMMO system could be dissolved. One may believe that processors want the FMMOs to end because more and more of the cheese and other dairy products are being manufactured and sold outside of the FMMO system and outside of the pooling process.
However, processors have an interest in seeing the FMMO system continue because they rely on the pricing data, the benchmarking, and a built-in make allowance.
The existence of FMMOs and those announced prices actually settle Class III and IV milk futures on the CME. Even if processors hedge risk by using dairy product futures contracts — instead of the milk futures contracts — they still rely on the USDA price survey every week that yields an official weighted average price for the four FMMO commodities that are traded on the CME to come up with the weighted average price of those commodities at the end of each month to settle butter, nonfat dry milk, 40-lb block and 500-lb barrel cheese and dry whey futures contracts.
Some argue that the daily CME spot cash markets for these products could be simply used. However, just think what this would mean if the CME became the only market to look to for futures and cash. Milk doesn’t have a real cash market reported every day on the farmer or processing sides like beef and other commodities.
Furthermore farmers ship milk for four to six weeks before ever knowing what they’re going to get paid for what they shipped, or what the basis is going to be. They can’t look at a market and make decisions. They can’t call an elevator. They can’t hold their product for a week or a month… or even a day.
— Along with more imports and shifts in cheese production, major manure-driven expansion in cheese-heavy Central U.S. put pressure on region’s ‘disrupted’ processing capacity
By Sherry Bunting, Farmshine, Updated in reflection from original publication in July 7, 2023 Farmshine
EAST EARL, Pa. — What has driven the rockier road for 2023 milk prices? Many things, and manure may be top on the list.
In fact, we’ll cover the ‘manure effect’ in a future article. But are we beginning to see the methane wheel-of-fortune behave with the ‘cobra effect’? (The British government, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead cobra. Eventually, however, enterprising locals bred cobras for the income.)
This happened with greenhouse gases in the past. It happened with a byproduct gas of making refrigeration coolant. In 2005, when the UN Intergovernmental Panel on Climate Change began an incentive scheme. Companies disposing of gases were rewarded with carbon credits, which could eventually get converted into cash. The program set prices according to how serious the environmental damage was of the pollutant. (Like making cow methane seem like new methane when it’s not). As a result, companies began to produce more of the coolant in order to destroy more of the byproduct gas, and collect millions of dollars in credits. This increased production also caused the price of the refrigerant to decrease significantly.
With this prelude, let’s look back in retrospect on what I reported in the July 7, 2023 Farmshine when milk markets were in a tailspin hitting their low for the year — just 10 days before the gradual turnaround began.
As losses in the CME spot cheese markets and Class III milk futures markets continued through July 6, the Federal Order benchmark Class III price for June was pushed down to $14.91 per cwt. and protein down to $1.51/lb, July and August futures went well below the $15 mark, with Class III below $14.
Let’s look at the supply side of the January through June 2023 supply and demand equation.
Looking at the May Milk Production Report that was released in June, it’s hard to believe the bearish response we saw in milk futures and spot cheese markets that occurred based on a mere 13,000 more cows nationwide that month. It was a paltry 0.1% increase over a flat 2022, along with 11 more pounds of milk output per cow for the month (up 0.5% over flat 2022).
This flipped the switch from a gradually lower-than-2022 market to one that plunged sharply and suddently into the dumps – and all the analysts said: ‘We’ve got too much milk for demand.’ (In fact, two months later, processors are pointing to June and July milk dumping and $10 under class spot milk price as proof that USDA is setting Federal Milk Marketing Order minimum prices too high! — I digress).
As noted in Part One of this series that was published in the june 30 edition of Farmshine, other converging supply-and-demand factors plagued cheese markets that month until July 17 — despite basic fundamentals of these milk production reports not being all that bad.
USDA Dairy Market News said spot loads of milk were being discounted in June by as much as $11 below the already abysmal FMMO Class III price in the Midwest. The milk dumping that reportedly began in May in Minnesota moved into Wisconsin through June and into July. The July 5th Milwaukee Journal Sentinel reported “Truckloads of fresh farm milk have been flushed down the drain into Milwaukee’s sewer system recently as dairy plants, filled to the brim, couldn’t accept more.” The story notes this had gone on for weeks, and the amount has declined to 5 trailer loads per week by the time The Milwaukee Journal Sentinel published its report.
For the price and milk dumping fallout, economists and analysts blamed the higher milk production (though it was modest on a national basis but huge in the Central U.S.). They blamed the higher cheddar cheese production (not accompanied by higher inventory), and they blamed the lower volume of exports (modestly below year ago on a year-to-date solids basis).
Globally, milk production was up (it is declining this fall), they said, suggesting U.S. prices needed to get below the falling global prices in order to recover more export volume (instead of dumping in the sewer). Well, they got what they wanted as the U.S. prices dropped like a rock through June until the turnaround on July 17.
Of course, no one (but Farmshine) mentioned the rising imports that were reported in Part One of this series.
Looking for context on the imports, we reached out to retired cooperative executive Calvin Covington, who follows these things on a total solids basis and has been watching the whey market as a leading milk market indicator. We learned that his calculations on a total solids basis, pegged January through April 2023 imports of dairy products into the U.S. at levels 15% higher than a year ago!
“The 15% equals 39.3 million lbs. more solids,” Covington wrote in an email response to a Farmshine question. “Most of the imports are coming from Europe. Dairy demand is very weak in Europe, consumers have less money to spend. Those milk solids are moving out of Europe.”
Noted Covington in June: “On a total solids basis, ending dairy stocks as of April 30th are 3% higher than last April. The 3% equals 61.5 million lbs. more solids.”
This means the 15% increase in January through April dairy product imports — on a total solids basis — were equal to more than half (63%) of the 3% increase that was reported in April domestic ending stocks of all dairy product inventories on a total solids basis.
Think about that for a minute. Product came in and was inventoried while domestic milk was dumped, and producer prices were crushed so that the domestic price could fall below the global price so then the U.S. dairy exports could increase? It makes the head spin.
Class I sales were down during this time, especially in the Midwest where some fluid plants have closed. Fresh Italian cheese production was down, and that’s a big one for Wisconsin. Together these factors pushed more milk to make more American cheese at that time, some of it delivered to consumers in smaller packages (rationing).
A wrinkle in the market-fabric comes from the dairy foods complex importing higher volumes, and there are the fake bioengineered microorganisms from which excrement is harvested and described as ‘dairy casein or whey protein without the cow.’ These analogs are being heavily marketed to large food manufacturers making dairy and bakery products as carbon-footprint-lowering dairy protein ‘extenders.’
However, as we look at the modest milk production increase for the first half of 2023, overall, and compare it to 2022, the total comparison was flattish then and it is declining now as we move toward Q3.
But there’s another major twist to this supply-demand equation:
The location and purpose of dairy expansion is undergoing accelerated transformation on a geographic and structural basis. This transformation is part of the “U.S. Dairy transformation” that the national dairy checkoff has promoted in its Pathways to Net Zero Initiative… and it is affecting the milk pricing for all U.S. dairy farmers, everywhere.
Here’s the problem: Milk production in the Central U.S. has expanded by much more than the national average.
Even University of Wisconsin economics professor emeritus Bob Cropp noted in his writing after the May report that growth in the Midwest — where cheese rules the milk check — was outpacing processing capacity, and the existing capacity to process all this milk was being reduced by labor and transportation challenges.
The concentrated expansion of milk production in the Central U.S. has been accelerating since 2018, but a new paradigm is now in effect: New concrete is being poured in the targeted growth areas driven more by manure, than by milk, and new dairy processing plant construction that is completed and in the works is targeting the same areas.
This is creating a production bubble that is a flood within calmer seas.
Some are calling it the California RNG gold-rush as developers construct Renewable Natural Gas (RNG) projects — especially on new large dairies — for the California RNG market and to collect the low-carbon-fuel credits for the California exchange and other exchanges that are and will be emerging, thanks to the USDA Climate Smart wheel-of-fortune.
We’ve heard the national dairy checkoff managers from DMI talk about profitable sustainability, markets for manure, promotion of other revenue streams for dairy farms as part of the mantra the checkoff has assumed for itself as speaker for all-things-dairy for all-dairy-farmers on what is “sustainable” for the industry.
When the Net-Zero Initiative was launched — along with DMI’s industry transformation plan — it was something that had been in the works since 2008 and emerged more prominently in the 2017-21 period when the former and current U.S. Ag Secretary Tom Vilsack did his stint as top-paid DMI executive, presiding over the U.S. Dairy Export Center (USDEC) under DMI’s umbrella and as a top-talker on the Innovation Center for U.S. Dairy, also under DMI’s umbrella.
All three: DMI, USDEC, and Innovation Center for U.S. Dairy are 501c6 non-profit organizations contracted to spend checkoff dollars. A 501c6 is essentially a non-profit that can lobby policymakers, whereas the 501c3 National Dairy Board cannot.
In 2020 and 2021, the Innovation Center — filing tax returns under the name Dairy Center for Strategic Innovation and Collaboration Inc. — doubled its revenue from around $100 to $150 million annually to $300 to $350 million.
We all heard it, read it, thought about it – maybe – that the checkoff was morphing into a facilitator for the transformation of the dairy industry led by manure-promotion, not necessarily milk promotion, with the mantra of feeding the world, being top-dog internationally, and meeting international climate targets with a Net Zero greenhouse gas pledge. (That pledge and the methane calculation are another story Farmshine readers are aware of, but we’ll leave that big driver off the table for this discussion.)
Here we are, now seeing an industry being created from within the broader dairy industry with new production driven by manure, in regions where new or expanding cheese, whey and ingredient plants are being located and potentially displacing production from plants and farms elsewhere that are not tied-into this manure-to-methane wheel-of-fortune using dubious science and math to overpeg a cow’s global warming impact.
While that production bubble is building in targeted growth regions with cheese-heavy milk checks, driven in part by manure-focused expansion, it bursted at the seams this summer due to a processing capacity bottleneck, compounded by supply chain disruptions and a sudden decrease in the production of fresh cheese at other plants and a sudden 18% decline in the amount of milk processed for Class I fluid use in the Upper Midwest.
Here’s the sticky wicket. A review of the 2022 end-of-year milk production report along with reports issued in the first half of 2023, revealed that, indeed, the Central U.S. was “awash in milk.”
Zooming in on the milk production reports, we see South Dakota continuing its fast and uninterrupted growth — up 15.5% for 2022 vs. 2021, and up 7.4% Jan-May 2023 vs. 2022 — having leapfrogged Vermont, Oregon and Kansas and closing in on Indiana in the state rankings.
Neighboring Iowa leapfrogged Ohio in 2022 with a 4.7% gain in milk production Jan-May 2023 vs. 2022. Number 7 Minnesota grew again after taking a breather with a 0.6% decline in 2022, then increasing 2% in production Jan-May 2023.
The tristate I-29 corridor, where cheese processing capacity has been expanding, was up 3.3% in milk production collectively with 19,000 more cows Jan-May 2023. Add to this the 1.3% increase in number 2 Wisconsin’s May milk production, and we saw the quad-state’s collective increase was 203 million pounds of additional milk in the region vs. year ago in May, although Wisconsin’s contribution came from 3000 fewer cows, according to USDA.
Just west in number 3 Idaho, production jumped 3.1% with 7,000 more cows Jan-May 2023.
To the east in the Michigan-Indiana-Ohio tri-state region — where the large new cheese plant in St. John’s, Michigan is fully operational — collective milk output was up 2% over year ago with 11,000 more cows. In 2022, this tri-state region was down 2 to 3% for the year compared with 2021.
Number 5 New York made 2.1% more milk with 7,000 more cows in May vs. year ago, with most of this expansion in the western lake region.
Number 1 California shrank milk production by 0.7% in May with 2000 fewer cows, and number 4 Texas flattened out its multi-year accelerated growth curve to make just 0.8% more milk in May than a year ago with just 1000 more cows, largely affected by the devastating Texas barn April fire resulting in the loss of around 20,000 cows.
Neighboring New Mexico continued its multi-year downward slide, ranked number 9 behind a flat-to-slightly-lower milk output in number 8, Pennsylvania.
Milk production in New Mexico fell 3.8% in May vs. year ago with 10,000 fewer cows. This followed an 8.4% decline in milk production and a 30,000-head cut in cow numbers for the year in 2022. Producers there cite well-access limitations, severe drought, high feed costs with reduced feed availability, as well as receiving the rock-bottom milk price as the reasons dairies in New Mexico are closing or relocating.
With all of these factors in play, the production reports show a clear paradigm shift in how the dairy industry expands via transformation. It is being driven to where feed is available and milk output per cow is higher, and it’s now being driven by a non-milk-related factor: MANURE for the RNG ‘goldrush’
A saving grace is cattle are in short supply, with replacements bringing high prices. This fact is slowing the bubble, production is declining now, and prices are recovering from those unanticipated lows.
NMPF, NAJ say higher solids worth more nutritionally,Seek FMMO updates to avoid misalignments and disorderly marketing
Calvin Covington (left) for Southeast Milk and Peter Vitaliano for National Milk Producers Federation testified on what the outdated skim milk component standards mean in terms of underpaying farmers and eroding producer price differentials (PPD), leading to disorderly marketing. This occurs because the skim portion of the milk that is utilized in manufactured products (Class III and IV) is paid per pound of actual protein, solids nonfat and other solids; whereas the skim portion of the milk bottled for fluid use (Class I) is paid on a per hundredweight basis using the outdated standard skim solids levels. The fat portion is not an issue because it is already paid per pound in milk class uses. Screen captures, hearing livestream
By Sherry Bunting, Farmshine, Sept. 8, 2023
CARMEL, Ind. – The national Federal Milk Marketing Order hearing completed two weeks of proceedings, so far, in Carmel, Indiana. The entire hearing is expected to last six to eight weeks, covering 21 proposals in five categories.
Picking up the livestream online, when possible, gives valuable insight into a changing dairy industry and how federal pricing proposals could update key pricing factors.
The first week dug into several proposals to update standard skim milk components to reflect today’s national averages in the skim portion of the Class I price.
Here is a bite-sized piece of that multi-day tackle.
National Milk Producers Federation (NMPF) put forward several witnesses to show what the outdated component levels mean in terms of underpaying farmers, and how paying for the skim portion based on outdated component levels has eroded producer price differentials (PPD), leading to disorderly marketing.
IDFA’s attorney Steven Rosenbaum grilled NMPF economist Peter Vitaliano on this. He tried on seven attempts to establish that the fat/skim orders in the Southeast don’t have component levels as high as the national average, suggesting this change would “overpay” producers in some markets.
In his questioning, Rosenbaum stressed that fluid milk processors can’t recoup the updated skim component values if those components do not “fill more jugs.”
Vitaliano responded to say that protein beverages are a big deal to consumers, and some milk marketing is being done on a protein basis. Rosenbaum asked for a study showing how many fluid processors are actually doing this.
Attorneys for opposing parties kept going back to this theme that the skim solids should not be updated because the FMMOs are based on “minimum” pricing. They contend that processors can pay “premiums” for the extra value if they have a way of recouping the extra value by making more product or marketing what they make as more valuable.
Vitaliano disagreed, saying that even though many processors do not choose to market protein on the fluid milk label, “more protein makes fluid milk more valuable to consumers.”
Attorney Chip English went so far as to ask Calvin Covington on the stand: Why should my clients (Milk Innovation Group) have to pay more for the additional solids in the milk when they are removing some of those solids by removing the lactose?
“Consumers don’t want lactose,” English declared.
Covington, representing Southeast Milk and NMPF, responded to say: “I don’t know that to be true. It is unfair to suggest all.”
Bottomline, said Covington, raising standard skim solids to reflect the composition of milk today vs. 25 years ago adds money to the pool to assist with the PPD erosion so that Federal Orders can function as they were intended and so producers are paid for the value.
As English further questioned whether consumers even care about the higher skim solids and protein levels of milk today, Covington replied: “Skim milk solids have a value in Class I, or fluid milk. People don’t buy milk for colored water. The solids give it the nutritional value. That’s the reason they buy milk. That’s why FDA set minimum standards in some states. Why would you drink milk if not for the nutritional value?”
He also pointed out that the increase in solids nonfat over the past 20-plus years has improved the consistency of lower fat milk options. As noted previously, the milkfat is a separate discussion and is not included in this proposal because farmers are already paid per pound for their actual production of butterfat in all classes, including Class I.
Under cross examination, Covington explained that the Class I price in all Federal Orders pays for skim on a standardized per hundredweight basis and pays for fat on actual per pound basis. Meanwhile, the manufacturing classes pay for both skim and fat on a per pound of actual components basis.
As skim component levels have risen in the milk, the alignment of Class I to the manufacturing classes narrows because of the differences in how the skim is paid for. When this happens, it becomes more difficult to attract milk to Class I markets. That’s one example of disorderly marketing. PPD erosion and depooling of more valuable manufacturing class milk is another example.
Covington explained the impact of this misalignment on moving milk from surplus markets to deficit Class I markets, that the lower skim value becomes a disincentive.
Vitaliano explained the depooling issue as “creating disorderly marketing conditions also, and great unhappiness when one farm is paid a certain price and another handler pays a different price (in the same marketing area). That’s disorderly unhappiness for the Federal Order program,” he said.
He noted that the fundamental reason for pooling is to take the uses in a given area with different values to achieve marketwide pooling where producers in that Federal Milk Marketing Area are paid similarly, regardless of what class of product their milk goes into.
“This removes the incentive for any one group to undercut the marketwide price to get that higher price (for themselves),” he said. “The Orders create orderly marketing with a uniform price. Depooling undermines that fundamental purpose that is designed to create orderly marketing.”
Either way, whether indirectly paying to bring supplemental milk into Class I markets from markets with higher manufacturing use, or in the case of depooling, the dairy farmers end up paying for the fallout from this erosion of the PPD.
Since the beginning, even before 2000 Order Reform, figuring the Class I base milk price had to begin somewhere, according to Covington. Federal pricing has always used the manufacturing class values in determining that base fluid milk price.
The trouble today is that Class III and IV handlers pay farmers per pound of actual skim components in the milk they receive, while the Class I handlers pay per hundredweight based on an arbitrary outdated national average skim component standard. Thus, the “opportunity cost” of moving this now higher component milk to manufacturing classes that pay by the actual pound of protein, for example, instead of by the old standard average protein levels is not accounted for in the Class I price that still uses the old standard average levels.
Pressed again on how it makes sense to raise Class I prices by raising the component level of the skim to more adequately reflect the national average today, Covington said: “It adds to the nutrition, and I stand by that. In proposal one, the price will go up (estimated 63 cents per cwt or a nickel per gallon). I am comfortable charging that extra price to Class I processors.”
Attorney English, representing MIG, retorted that, “The handlers who buy milk and then by adding a neutralizing agent remove the lactose, they’re going to pay more for the milk that they then have to process to subtract the lactose.”
Covington responded that, “There are consumers who think about lactose. There are consumers who buy lactose-free products, yes, because it is on the shelf, but it’s not all consumers.”
On the higher protein, English asked Covington how Class I processors are supposed to monetize that protein in a label-less commodity, a commodity that is declining in its share of total milk utilization?
“We are still selling 45 billion pounds of packaged fluid milk (annually) in this country,” said Covington. “Consumers wouldn’t buy that 45 billion pounds if it wouldn’t have some nutrition.”
English argued that milk is sold as whole, 2%, 1% and non-fat. It is not sold by its protein, so isn’t it “so highly regulated in ways that alternatives are not that any increase in price hinders sales of fluid milk?”
Covington acknowledged that, “yes, it is regulated, but I’m not convinced that this proposal will hinder fluid milk sales. Again, (higher components) add to the nutrition and I stand by that.”
Opponents kept coming back to these value questions, while proponents focused on the price alignment issue and orderly marketing.
AUTHOR’S NOTE: National Wildlife Refuge designations and land protection plans are long-simmering recipes, so it’s important to keep eyes on the pot while the heat is presumed to be turned down. Will a watched pot boil?One thing to keep in mind is to look overseas at the Netherlands, where the government, thrown this week into disarray to where the farmer-citizen party may gain strength, has been using climate-based targets to begin pushing buyout or closure of an estimated 3000 farms. Dutch farms have been zoned for a range of production-cuts from 15 to 90% with options to sell their land to the government. The Dutch farms identified for the largest production cuts of 75 to 90% would obviously be economically unsustainable and therefore more apt to sell. These are the farms that are located closest to EU Nature Preserves that were designated decades ago. When I spoke with a Dutch dairy farmer last year about this, he explained that the nature they have has been built, improved, by the farmers, but those close to the network of EU preserves are in the current crosshairs. Yes, these are long-simmering recipes. Here in the U.S., Northwest Pennsylvanians are being told it will take decades to complete a land protection plan if a French Creek National Wildlife Refuge is eventually designated for the watershed by the U.S. Fish and Wildlife Service Director. They are told that farming can continue, that they want to ‘help’ local conservancy efforts and that only willing sellers would be pursued. That’s not how it went when the Erie Refuge was completed at the center of the French Creek watershedin the 1970s. Some saw farmland fall to eminent domain two decades after that Refuge was established. Bottomline: Keep an eye on the pot, even if doing so draws accusations of claiming a tepid pot is about to boil. Every cook knows what happens when looking away. Here’s an update since the meeting between elected officials and the U.S. Fish and Wildlife Service.
MEADVILLE, Pa. – The U.S. Fish and Wildlife Service (USFWS) has “committed to a ‘pause’ and will draft a new proposal that could potentially limit the size and scope of a National Wildlife Refuge in the French Creek watershed,” according to a press release from Congressman Mike Kelly’s office.
Congressman Kelly and elected officials from affected counties met on July 6 at the Crawford County Courthouse in Meadville to discuss the proposed Refuge with USFWS representatives Vicki Muller, the project manager, and Mark Maghini, a realty chief.
This comes after the ‘public scoping’ phase where opposition and concerns were raised by farmers, members of Congress, county leaders, local residents, as well as questions about its necessity being raised by those involved in local land trusts and conservation efforts already operating in the watershed.
The ‘planned Refuge’ would create new federal ownership and oversight of lands in the watershed of nearly 800,000 acres along the 117-mile French Creek through portions of Crawford, Erie, Mercer and Venango counties, Pennsylvania and Chautauqua County, New York.
According to Congressman Kelly’s office, the USFWS acknowledged it did not properly engage and inform the communities of impact and will include elected officials in future planning.
“A pause on the proposed French Creek National Wildlife Refuge is absolutely necessary. Officials from the U.S. Fish and Wildlife Service have told us there is no official plan or size for this refuge, and I believe that’s exactly the problem — this has been a solution in search of a problem with farmers and landowners caught in the middle. The federal government does not need to have control of French Creek,” said Rep. Kelly in the statement.
“We all support a healthy and vibrant French Creek, but I believe local conservation efforts are already accomplishing what the USFWS is trying to do,” he noted.
Nothing to see here. Just go about your business…
Meanwhile, Maghini, the realty chief (land acquirer) for the Northeast region of the Fish and Wildlife Service indicated in an email to the Meadville Tribune that there is “no proposal,” pointing to a June 4 update at the special webpage for the project with these words highlighted in bold type.
He insists that the goal of the meetings and input-gathering this spring was to “identify whether there’s a role USFWS can play in the French Creek watershed.”
However, the agency’s own documents at the site show it already has a plan and has identified the next steps, which indicate it is already in the process of evaluating those public comments to develop a final proposal, which had a summer 2023 timeline.
Specifically, the “Schedule for Establishing the Proposed French Creek National Wildlife Refuge” on the second page of the May 9 FAQ document at the project webpage, is as follows:
1) Develop draft Land Protection Plan (LPP) and Environmental Assessment (EA) in the Spring of 2023;
2) Conduct public review and comment on proposal in the Spring of 2023; and
3) Evaluate the comments and develop the final plan for approval in the summer of 2023.
The customary procedure is for comments from the public scoping phase to be used when USFWS develops a land protection plan and environmental assessment. The ‘pause’ may extend this schedule to allow more time for the agency to evaluate the comments it received and to include elected officials in its planning.
Whenever a final plan is developed, the public then has 45 days to review and comment before it is ultimately left to the USFWS director, who has the sole authority to approve or disapprove a plan, according to the agency’s FAQ.
Residents tell Farmshine they hope a new draft provides more detail and a much smaller scope, but they also hope the ‘pause’ allows time for more public input on whether or not the Refuge designation is even needed.
The designation of the French Creek as 2022 River of the Year by Pennsylvania Organization for Watersheds and Rivers came largely due to the success of the existing local conservation efforts in promoting the health and biodiversity of French Creek in the first place, they say.
This brings the feeling that one can farm for generations, keep the working lands clean and natural, and then find out this can lead to being more, not less, vulnerable to having a Refuge designation with potential impacts for the future.
Pennsylvania Farm Bureau legislative director Nick Mobilia said as much to the Corry Journal: “I feel we have presented our issues with the refuge as positively as we can. We asked what USFWS thought was wrong with the waterway — they did not have any areas of concern.
“We as a local collective maintain French Creek and take pride in it — of course we are going to fight for it to be left as it is,” he said. “I think this was realized on (July 6) and (USFWS) will walk away from French Creek and focus on waterways that do need the government’s help.”
Will USFWS walk away? Doubtful.
Maghini, the USFWS realty chief for the region told the Meadville Tribune Friday (July 7) that the agency “looks forward to working with local officials once a plan that incorporates local feedback already collected has been prepared.”
Interestingly, the title of the FAQ document on the project webpage refers to the project as a “Proposal to Expand Refuge Lands in the French Creek Watershed.”
This reference to “expansion” is significant. At the center of the land protection plan “areas of interest” on the USFWS conceptual map (above) lies the already existing Erie National Wildlife Refuge (shaded pink within the green). Previously managed by Muller, the existing Erie National Refuge encompasses 8,777 acres of the 798,000-acre French Creek watershed.
At public meetings this spring, a farmer recalled his family’s farmlands eventually falling into eminent domain in the 1970s – more than a decade after private lands within what is today the Erie National Wildlife Refuge were originally designated by the USFWS in the late 1950s.
According to local newspaper accounts, Muller responded by telling the crowd that the USFWS “doesn’t do that anymore.”
The other significant aspect of ‘expanding’ an existing refuge vs. declaring a new one is that the Inflation Reduction Act provided climate resiliency and biodiversity funds for 2023 through 2026, including more than $121 million to the USFWS for restoration, rebuilding and expansion of existing wildlife refuges and $125 million for endangered species recovery.
The latter identifies 32 initial plant and animal species to be recovered “wherever found.” One, for example, is the snufflebox mussel with one area shown on its map as the French Creek watershed.
Will the public get more input? Will it help?
USFWS documents explain that when land protection plans are drafted and approved, they include land acquisition timelines that follow a “Landscape Conservation Design to ensure actions contribute to the landscape-level vision.”
Will a ‘pause’ give farmers, landowners and communities more say in the vision for their landscape, one they want to retain locally? Will the USFWS commitment to include elected officials in the planning happen before or after the new draft is presented?
Revamped ‘live text’ at the special webpage for the proposal notes that the USFWS review of public comments in April and May boil down to the following beliefs held by residents that USFWS says it agrees with:
1) Residents have a deep affection for French Creek;
2) They believe maintaining use of prime agricultural lands is important;
3) They value the rural character of the watershed and want to ensure its persistence; and
4) They value local land trusts within the community and trust them in their land protection efforts.
USFWS states further that a National Refuge designation is what authorizes the agency to pursue the land acquisitions from willing sellers and that it does not detail how USFWS would manage the lands it acquires through fee-title or easement.
USFWS also states that it does not fund local conservation efforts because it must show a dollar of federally-acquired land for every federal dollar it spends.
However, within this two-page “Proposal to Expand Refuge Lands,” the agency lists goals for “new refuge lands” (beyond the existing Erie National Refuge) that would allow the agency to “protect and manage the French Creek and its tributaries and wetlands.”
It also purports to “help” local conservancies by adding federal acquisitions to local acquisitions since none of these entities have access to unlimited funds. The only way it can “help” is to federally acquire land.
The U.S. Fish and Wildlife Service is a Bureau within the U.S. Department of Interior that operates in a quasi-independent fashion, having federal authority to establish and manage protected lands within its National Wildlife Refuge System, and to complete approved land protection plans over subsequent years, through its Land Acquisition and Realty division.
According to that division’s section of the USFWS website, funding for land acquisition comes from the Migratory Bird Conservation Fund through federal Duck Stamps and import duties on arms and ammunition as well as through the Land and Water Conservation Fund from offshore oil and gas leases.
In 2021, at the start of the Biden Administration, the USFWS updated its “Climate Adaptation Strategy” to be a framework that is part of the Administration’s “U.S. Climate Resilience Toolkit.”
Several documents available at the USFWS website explain that this toolkit has now equipped USFWS to “take immediate action to build ecosystem resilience in the face of climate challenges.”
As noted in the previous Farmshine articles, this is a process that moves at a snail’s pace — with or without a ‘pause.’
The ‘pause’ is expected to move the project from the front-burner to the back-burner — for now — amid the public heat surrounding it, but this doesn’t mean it is off the stove.
National Wildlife Refuge designations and land protection plans are long-simmering recipes, so it’s important to keep eyes on the pot while the heat is presumed to be turned down. Does a watched pot boil?
PREVIEW – By Sherry Bunting, Farmshine, June 30, 2023
WATTSBURG, Pa. — Kevin and Amanda Bush are fourth generation dairy farmerswith their children Ava, 17, Clara, 6, Jarrett, 5, Georgia, 1, and 110 milk cows. On an early June day, unseasonably cold even for Erie County, Pennsylvania, a visit to the Bush Family Farm shed light on farmers’ concerns about a U.S. Fish and Wildlife Service proposal to designate 798,000 acres of French Creek watershed as a National Wildlife Refuge. Potential land acquisitions could begin a year from now if approved by the USFWS Director later this summer. Mark Muir from Erie County Farm Bureau, who raises hay and livestock, and Brian Young, whose extended family operates a nearby seventh generation farm were part of the discussion of the proposed protection area that would stretch 117 miles from Chautauqua County, New York south through Erie, Crawford, Mercer and Venango counties, Pennsylvania. The region is home to farms and other businesses that are the lifeblood of rural towns and counties. They use conservation practices and a lot of grazing and haying, with a vested interest and pride in their stewardship and relationships with existing conservation efforts.
On a map showing land protection ‘areas of interest,’ whole farms are included, not just setbacks (see map in main story below). This includes many dairy farms ranging from small herds managed by young next-generation farm families, like the Bushes, to larger farms with multiple generations of families involved. USFWS wants to purchase land or use permanent easements for whole farms. ‘You can still farm it,’ they say. But when specific questions were brought to an April meeting, the locals came away with very few answers. They anticipate another meeting in July.
Why are farmers concerned? They fear future use of eminent domain and farming restrictions as dominos start to fall. A National Refuge designation with Land Protection Plan, is perpetual. They fear the loss of rented ground to feed their cows. They worry about their towns and counties. They want to know the minimum goals of the project so they can have an intelligent conversation with USFWS. They have asked for scientific studies to be shared that show how the freshwater mussel population and other aquatic life are actually doing today vs. 10, 20, 30 years ago.
It feels like the start of what could become a gradual 30 x 30 land grab. Surely, if this was happening in agricultural communities of southeastern Pennsylvania along the Susquehanna River in the Chesapeake Bay watershed, instead of northwestern Pennsylvania in the French Creek watershed, there would be much more attention paid. See main story below as published in July 7, 2023 Farmshine, and stay tuned as we follow this developing story.
They say National Refuge for mussels will move at snail’s pace, but farmers see muddied water ahead
MAIN STORY – By Sherry Bunting, Farmshine, July 7, 2023
WATTSBURG, Pa. — The rural French Creek watershed is in the sights of the U.S. Fish and Wildlife Service for a proposed National Wildlife Refuge that could span nearly 800,000 acres, stretching 117 miles from the headwaters in Chautauqua County, New York across the Pennsylvania border through Erie, Crawford, Venango and Mercer counties.
Meetings this spring in Meadville and Edinboro were part of the ‘public scoping’ phase. They were packed with citizens and fraught with questions, deep concern and objections.
An initial public comment period ended May 19.
From the Southwest corner of New York through the Northwest corner of Pennsylvania, the French Creek river and watershed runs through rural communities where farming is the lifeblood. If this potential land-grab were happening in southeastern Pennsylvania in the Chesapeake Bay watershed, more attention would be paid to the concerns of the farmers and communities.
Vicki Muller, the proposed Refuge’s project manager, told local television station FOX-66 that the U.S. Fish and Wildlife Service (USFWS) is “looking to protect and preserve more wildlife habitat within the French Creek watershed, so this plan is just the beginning stages of that.”
Mentioned were freshwater mussel species, said to be the only populations east of the Mississippi, along with several species of fish, wetlands, and migratory waterfowl.
Land acquisitions are about a year away, Muller confirmed.
Farmers and other community members, along with managers of existing conservation efforts, say federal land acquisition is not necessary to meet environmental goals because those who are living, working, farming in the region already work with local conservationists to manage the land in ways that have been recognized for success.
French Creek was named Pennsylvania’s “River of the Year” in 2022.
Opponents of the Refuge argue that its designation could place federal regulation on private landowners for perpetuity. They say an accompanying Land Protection Plan (LPP) could take properties and money off local tax rolls, move land ownership away from local residents, and take products generated on the farmland away from local communities, weakening the region’s economy and food security.
To top it off, USFWS could offer no evidence that this would improve — at all — the status of French Creek and its aquatic life, nor any evidence that either are in trouble.
USFWS is currently in the process of reviewing public comments and stakeholder feedback and is developing a final plan for approval by the USFWS Director later this summer, according to a Q&A document at the webpage devoted specifically to the French Creek proposal at https://www.fws.gov/project/evaluating-new-refuge-lands-french-creek-watershed.
A June 4 ‘Public Scoping Recap’ is also provided at this webpage, stating the proposal is not yet an official proposal because it is still in the ‘public scope and biological environmental assessment’ phase.
The webpage indicates that the framework would be built after they get the buy-in, after they get the National Refuge designation and LPP approved, and after they complete the biological environmental assessment. That’s when officials say they can answer the probing questions of locals about environmental and land acquisition goals.
Isn’t that putting the cart before the horse?
One of the strategies being used here is to protract the conversation and soothe public concern with assurances that the Refuge to save mussels will move at a snail’s pace.
Essentially USWFS is looking to designate land now for decades of acquisition and that it will answer specific questions as the process moves forward working collaboratively to refine the plan after the designation and plan are approved.
Such circular talk makes farmers and landowners skeptical, uneasy.
Within the “land protection areas of interest” on the ambitious map, there are both small and larger farms, many of them dairy farms as well as beef cattle, crop and produce growers.
“I started looking at the map, and I see I am an area of interest. Everything I own is an area of interest,” said Mark Troyer, a potato, corn and wheat grower, in an on-camera interview during the Edinboro meeting. “I think we can work and live hand-in-hand (with wildlife) and have been doing a great effort. We’ve already been doing a great job.”
Concerns about eminent domain were specifically raised. Muller stated this will not happen.
Landowners are not convinced. They want to know the endgame.
They want to know what happens once there is an approved LPP with specified land acquisition timelines. What happens to their farms if they are eventually surrounded by acquired land? What happens to the farms outside of the areas of interest that will find themselves next to a National Refuge? What is the ultimate land acquisition goal?
What are the actual environmental goals, and why does the federal government need to acquire the land to meet those undisclosed goals, instead of supporting existing local conservation efforts that show measurable success?
They share the concern that once the designation and LPP are approved, this could take on a life of its own… forever.
A pristine view across the road from the Bush Family Farm. Behind the trees is French Creek. The Bushes wonder why land acquisitions are needed. Farms throughout the watershed do a good job. They wonder what will happen to their farm if there are willing sellers up and down the road from them…
According to the USFWS Q&A, the land protection plan will take decades to complete as the number of willing sellers and the availability of funding will determine the timeline.
With that in mind, U.S. Congressmen Mike Kelly (R-Pa.) and Nick Langworthy (R-N.Y.), whose congressional districts cover the “areas of interest” in the draft proposal, along with U.S. House Ag Committee Chairman Glenn ‘G.T.’ Thompson (R-Pa.), led a letter calling on the USFWS to reconsider federal designations on private land.
In the letter, the members of Congress recognize that a healthy, vibrant ecosystem along French Creek must continue to be protected, but also that local farmers and residents are better suited than Washington bureaucrats hundreds of miles away to dictate how this land is best protected.
Mark Muir with the Erie County Farm Bureau grows hay and raises livestock in the area. He has been involved in the meetings, asking questions at the front end of this proposal.
Farmshine met in June with Muir at the Bush Family Farm outside of Wattsburg in Erie County. He was joined by Kevin and Amanda Bush as well as Brian Young, whose extended family operates a nearby 7th generation farm.
The Bush farm has been in the family since 1939. French Creek borders it, surrounded by grasses across the road from the dairy barn and hillside grazing paddocks. The Bushes also rent crop ground in the watershed.
They and others are concerned that once a final plan is developed and approved later this summer, land acquisitions from willing sellers could eventually morph into a land-grab that won’t stop until all of the “areas of interest” are federally owned or controlled by the USFWS.
The designation of the land as a National Wildlife Refuge and the approval of an LPP would be the first concrete steps.
“We are told there is nothing set in concrete yet,” says Muir, “But we had many questions they couldn’t answer at the meetings. We tried to talk to them about farm BMPs (best management practices), but they didn’t understand the concept.”
Because the USFWS is still in the ‘public scoping, comment review and final development’ phase,’ officials won’t engage in land use questions or what-if scenarios. They don’t answer questions that help farmers understand the ultimate impact because they say that completion of the Refuge would be “decades away.”
“Decades away” is really tomorrow for most farmers who continually look ahead at their operations and land use, making plans for future generations.
Mark Muir (right) and Brian Young stand across the road from Bush Family Farm by a section of French Creek that runs parallel. This is just one small part of what could be a massive target for federal land acquisitions and easements if the watershed is designated a National Refuge.
“At the end of the day,” says Young, “Fish and Wildlife can target any wildlife and the ecosystem areas that an environmental assessment deems necessary. They are not like the BLM or NRCS. The USFWS is comparatively small and does not have the cross-correlation to agriculture.”
Furthermore, land acquisitions are funded by duck stamp sales, land access fees, and other sources of revenue that make USFWS less reliant on tax dollars to use their authority. In other words, Congressional oversight — from an appropriations standpoint — is lacking.
If a final plan and Refuge designation are approved, the gradual creep of land acquisitions would begin, giving USFWS oversight of current working lands that could affect the fate of farming in the region, in particular dairy and beef cattle.
Without data and without answers, this becomes “a slippery slope with no guard rails,” says Muir. “We want to be objective about it, and to have those conversations at a July meeting. We need certain information to have a meaningful conversation so we can see if and where we might be able to work together.”
Meanwhile, Kevin and Amanda and their four children milk 110 cows and raise their youngstock. They are a small family dairy on land that the Bush family has been farming for 85 years.
There is not only a legacy here, but also progress as they have implemented many BMPs, just as other farms have throughout the region.
Muir notes that NRCS funding, and other cost-shares, don’t seem to flow as much in the Northwest direction of the state.
He says BMPs on farms could improve even more with cost-sharing and a productive dialog, which is preferable to a multi-decade federal plan to acquire the land.
“If this is supposed to be to save the freshwater mussels, and they have these dollars to spend, why not try other approaches first?” Amanda wonders, adding that they could promote BMPs that farms can do even better than what they are already doing, and cost-share some of that. “It would go a lot farther instead of designating a Refuge, buying up land, and disrupting family farms, local towns and their economies.”
“We do no-till and minimum tillage here. We do cover crops wherever we can, and we are working now already with the County Conservation District,” Kevin adds.
Bottom line, these and other young farmers want to continue farming and producing food for their communities. They are part of these rural communities where cows and crops, grazing and haymaking, youth programs and showing at the county fair are part of the fabric.
Maybe it’s more important to identify the rural community fabric that is at stake — the younger generations who want to continue. As farm families of all sizes, they are accustomed to working with USDA, NRCS, county conservation districts, local conservation efforts that all have connections to agriculture, so they speak the same language.
But when Fish and Wildlife makes its entrance with a draft proposal for a National Refuge of immense proportions across so many miles, acres and counties — having no crossties to agriculture — that’s a scary place for any farm family to be, and it can lay threadbare the fabric of the communities beyond the farms.
To be continued
AUTHOR’S NOTE: A USFWS National Refuge designation and Land Protection Plan includes acquisition timelines and a “Landscape Conservation Design” to “ensure actions contribute to the landscape-level vision,” according to USFWS documents. USFWS is a Bureau within the Department of Interior and operates in a quasi-independent fashion, having federal administrative authority to establish and manage such refuges and complete them over time with its own sources of funding. In 2021, at the start of the new Administration, the USFWS updated its “Climate Adaptation Strategy” to be a framework that is part of the Administration’s “U.S. Climate Resilience Toolkit,” equipping USFWS to “take immediate action to build ecosystem resilience in the face of climate challenges.” (One thing to keep in mind is to look overseas at the Netherlands, where the climate-based land-grab is in full swing. Farms have been ordered to cut from 15 to 90% of their production or sell their farms to the government. The farms identified for 75 to 90% production cuts to be economically unsustainable are those that are closest to the EU Nature Preserves designated decades ago.)
Thompson: ‘This is a win for children and dairy farmers, but we’re not done’
“This policy has cheated our children and has led to economic demise in Rural America as we’ve seen a loss of dairy farms and small businesses that are in that supply chain. It’s time to reverse the mistake that was made in 2010. We need to follow real science, not political science. I question the process of the Dietary Guidelines Advisory Committee. These are unelected bureaucrats, and there’s no oversight. This is our chance to actually do something positive in that process to say ‘hey we’re watching what you’re doing. We’re looking over your shoulder,’” said Rep. GT Thompson (R-PA-15). In a bipartisan 26 to 13 vote, the Committee on Education and Workforce passed Thompson’s motion to report the Whole Milk for Healthy Kids Act, H.R. 1147, to the House of Representatives with recommendation of passage. On the Republican side, 21 voted yes and 4 were absent. On the Democratic side, 5 voted yes, 13 no, and 3 were absent. The next step is getting the bill on the calendar for a vote on the House floor.
WASHINGTON — The Whole Milk for Healthy Kids Act, H.R. 1147, reached a major milestone this week, passing mark-up in the U.S. House Committee on Education and Workforce.
Dairy farmers could not have asked for a better way to kick off June Dairy Month as the committee discussion exposed the sides of this issue, and Congressman Glenn ‘GT’ Thompson, the Republican from Pennsylvania and the bill’s prime sponsor, laid out the case for children to have true access to the most nutritional beverage — milk.
In the end, the Education Committee on Tuesday, June 6 approved the bill in a bipartisan 26 to 13 vote.
(Cross-section highlights of Education and Workforce Committee discussion and vote.)
Now that it is recommended by the House Education and Workforce Committee, the next step is scheduling of the vote on the House floor.
This is the first time in three legislative sessions that the bill to restore the choice of whole and 2% unflavored and flavored milk in schools has made it this far in the legislative process.
“This is a win for children and dairy farmers, but we’re not done. I took a deep breath to see this satisfying outcome in this first stage and another deep breath as we move to the next stage to get it onto the House calendar,” said Rep. Thompson in a Farmshine interview after committee passage.
A further breath of bipartisan fresh air also came from Rep. Jahana Hayes, a Democrat and educator from Connecticut. She rose in support of the bill, quoting from the Dietary Guidelines 2020-25 report and from USDA, giving statistics about what is offered and what is consumed in recommended dairy intake, especially for children ages 2 to 18.
“I have belabored this point that children receive a huge amount of their daily nutrition at schools. Also, the school meal programs are a significant source of milk and dairy for kids,” said Hayes.
“But the part that sticks for me is that none of this matters if kids aren’t drinking the milk. We can have as much data and statistics on what kids need as dietary dairy intake, but if they’re not drinking it, then it’s all for naught,” she stressed. “We’ve seen students take less milk and throw away more milk when they don’t like the way it tastes.
“I support this amendment. I drink whole milk. My kids drink whole milk. We like it,” Hayes asserted.
Chairwoman Virginia Foxx, a Republican from North Carolina said the debate over whole milk “takes the cake.”
She talked about how previous recommendations have been “walked back,” and she bemoaned the fact that there are “no checks and balances” over the Dietary Guidelines process of making these recommendations.
“I was shocked last year when I learned that whole milk has only 3.5% fat content, when we are saying to students: ‘drink skim milk or 1% milk,” the Chairwoman said.
“Surely-to-goodness, that kind of fat content is not doing the damage that some people are saying. This Dietary Guidelines Advisory Committee is just a small group of unelected, appointed people, and we want to turn children’s lives over to groups like this? We should be dealing with this,” she added.
The bill’s champion, Rep. GT Thompson is a senior member of the Education Committee, and chairs the Agriculture Committee.
Thompson said he is discussing the next stage with the House Majority Leader to schedule the legislation for a vote on the House floor.
“The bill had 106 bipartisan cosponsors supporting it from 39 states — before this committee vote — and we can build on that,” said Thompson. (As of June 16, there are 110 from 40 states).
This cosponsor list includes 22 members of the Education Committee. It also includes bipartisan cosponsors from the Agriculture Committee. It includes prime cosponsor Rep. Kim Schrier, a pediatrician from Washington State, and numerous members of Congress who are doctors, educators, parents. It has garnered the support of schools, students, parents and families throughout America who will benefit, according to Thompson.
His staff reports that more cosponsors continue notifying their office to sign on to the bill.
“This has been a really grassroots effort. Dairy farmers, the dairy industry, all of the rural businesses who provide inputs, the folks in the schools, the parents… we’ve had great support for this bill, and all of that helps,” said Thompson with a tip of the hat to the grassroots 97 Milk effort.
In fact, while speaking on his bill, Thompson mentioned “how this policy has negatively impacted the economy in Rural America. This (federal prohibition of whole milk in schools) negatively impacts kids and dairy farmers, and it’s time to turn that around.”
The Whole Milk for Healthy Kids Act allows the 95% of schools that are participating in the school lunch program to serve all varieties of flavored and unflavored milk, including whole milk. Thompson amended the bill from previous renditions to make minor technical changes that will help ensure foodservice workers have the flexibility they need in serving the students whole milk.
“Some Democrats on the committee spoke in opposition to the bill, using the same outdated science, but in the end, the committee vote to approve it was bipartisan,” said Thompson.
During the committee discussion, he told his colleagues that he is focused on “listening to the school professionals who serve students every day and parents who are concerned about the lack of options.
“We need to follow real science, not political science. It’s time that we push back on the notion that federal bureaucrats know what’s best for students. Although there is more work to be done on school nutrition, this bill gives students access to the milk they want and need. The bottomline is the Whole Milk for Healthy Kids Act is all about ensuring students have the necessary nutrients to learn and grow,” he said.
Thompson was quick to point out that, “We’re not force-feeding anybody anything. We’re providing children options so we don’t turn them over to less healthy beverages.
“We’ve really ruined an entire generation of milk drinkers and have cheated them out of access to the most nutritional beverage. I appreciate the comments that there is nutrition also in 1% milk, but even that’s because of the milkfat, the vehicle that delivers the nutrition,” he explained.
This bill “will improve the nutritional status of our children going forward. If we give them a good milk experience … I would argue we will see a reduction in childhood obesity,” he said, pointing to studies showing whole milk to be an effective drink weight management because of how satisfying it is.
To his colleagues citing ‘the science’, Thompson was tactful but blunt: “I agree we ought to do things with data and science, I just question the process of the Dietary Guidelines Advisory Committee. They’re completely appointed. These are unelected bureaucrats, and there’s no oversight. This is our chance to actually do something positive in that process to say ‘hey we’re watching what you’re doing. We’re looking over your shoulder.’”
Chairwoman Foxx reminded her committee that, “This is a choice. Instead of having bureacrats tell us what to do… we give a choice and not let someone else run our lives.”
At the start of the discussion, she explained the Whole Milk for Healthy Kids Act as “empowering food service providers and parents to make decisions on the health and welfare of children.”
Ranking Member Bobby Scott (D-VA-3, right) and Rep. Jamaal Bowman (D-NY-16) read from a letter of opposition to the whole milk bill from the Physician’s Committee for Responsible Medicine (PCRM). According to Guidestar, PCRM describes its vision as “creating a healthier world through a new emphasis on plant-based nutrition and scientific research conducted without using animals. ” In 2010, Newsweek and New York Times articles identified PCRM links to extreme animal rights organizations such as PETA.
Ranking member Bobby Scott, a Democrat from Virginia, was one of four Democrats voicing opposition, saying H.R. 1147 is “an attempt to legislate nutrition standards and disregard evidence-based recommendations made by the Dietary Guidelines for America.” He said the bill would allow schools to “violate current science-based standards.
“If it was consistent with science, we wouldn’t be here. The science-based committees would have already done this,” he said, also objecting to considering the bill outside of doing a comprehensive childhood nutrition reauthorization.
The last childhood nutrition reauthorization by Congress was the 2010 Healthy Hunger Free Kids Act, which tied schools more closely to the saturated fat restrictions of the Dietary Guidelines in the first place.
Scott noted the American Heart Association, Association of Nutrition and Dietetics, Center for Science in the Public Interest have “expressed concerns for this bill.” But mostly, he quoted from a letter of opposition from the Physicians Committee for Responsible Medicine. (PCRM is a known animal rights group tied to PETA.)
Rebutting Scott’s assertions in his characteristic calm and methodical manner, Congressman Thompson said he appreciated the recognition of science but that, “we don’t always get it right, and that’s what we’ve found with the Dietary Guidelines process.
“You reference the Dietary Guidelines Committee, but the most recent Dietary Guidelines reported that more than two-thirds of school age children FAIL to meet the recommended level of dairy consumption, and a big part of that is, quite frankly, we gave them since 2010 an awful milk experience,” said Thompson.
“We’re talking about 3.5% milkfat. I was here for that 2010 debate. It’s been proven since then that it was bad science. The most recent science I referenced and our practioners, the American Academy of Pediatrics, have stated that dairy plays an important role in the diet of children, and it’s the leading food source for three of the four nutrients of public health concern — calcium, vitamin D and potassium,” said Thompson, providing 15 academic studies for the record on full fat dairy.
As members of Congress, “we visit our schools and spend time in the lunch line, and we see the waste and the unopened half-pint milk containers that are discarded. Quite frankly, we’ve been contributing to childhood obesity because … children are going to drink some type of beverage, and the substitutes have been high sugar beverages that do not have healthy outcomes,” said Thompson.
“This policy has cheated our children… and has led to economic demise in Rural America as we’ve seen a loss of dairy farms, dairy herds and small businesses that are in that supply chain. It’s time to reverse the mistake that was made in 2010,” he stressed.
Rep. Jamaal Bowman, a Democrat from New York agreed that the meals at school are for some kids the most important that they receive, and he said these meals should be consistent with the “latest science on nutrition.”
However, he maintained that the Dietary Guidelines for Americans (DGAs) are “based on up-to-date science” and said “allowing whole milk to be served to children contradicts those recommendations.”
Rep. Bowman called the bill an “inappropriate attempt to legislate nutrition standards,” but he failed to acknowledge the shortcomings observed by other independent scientific bodies calling into question the research screening methods used in the DGA process, the make-up of the DGA committee, and the predetermined questions that form the boundaries for what “up-to-date research” will be included as “relevant” to the predetermined questions in each 5-year DGA cycle.
Bowman quoted extensively from the PCRM letter, which stated that “full fat milk is both unnecessary and harmful to children’s health.” Reading from the PCRM letter, Bowman said “early signs of heart disease, high total and LDL cholesterol and other indicators of impending cardiovascular disease are appearing in children with increasing frequency.”
(If that’s the case, then how can whole milk be blamed? How can saturated fat be blamed? Whole milk is nonexistent at school, and saturated fat is limited to less than 10% of calories in school meals since 2010. Children receive one, two, or even three meals a day, five days a week for at least three-quarters of the year at school. If the poor health outcomes the PCRM letter identifies are rising, doesn’t that tell us something about the scientific validity of the DGA recommendations? The PCRM’s own letter hits that nail on the head with its own statistics. PCRM calls “whole dairy milk a troubling source of saturated fat.” And yet, kids have not been allowed to have whole milk or 2%, and in some cases not even 1% fat milk, for the past 13 years during two meals a day, five days a week, most of the year!)
Here’s an eye-opener: Quoting again from PCRM, Bowman said lactose intolerance among communities that have been impacted by “historic racism” and “health inequities” are those less likely to be able to see a doctor for the doctor’s note to have dairy substitutes at school. The letter even mentioned children needing ‘climate friendly’ beverages.
The roots of the anti-whole-milk agenda are clear in terms of encouraging more “non-dairy substitutes” for children in schools.
Rep. Alma Adams, a Democrat from North Carolina said the bill sets a “dangerous precedent” that takes the years of building nutrition programs backward, noting this would cause poor health outcomes. (But the poor outcomes were said to be already happening by those opposing the whole milk bill. This is occurring while whole milk is prohibited.)
During the committee markup, Thompson said he is proud of the number of cosponsors to-date and the broad and bipartisan support for the whole milk bill.
“My legislation supports students and dairy farmers across America,” he explained. “Milk is an essential building block for a well-rounded and balanced diet offering 13 essential nutrients and numerous health benefits. However, out of touch federal regulations have imposed dietary restrictions on the types of milk that students have access to in school meals… limited to fat free and low-fat milk since 2010. For our children to excel in the classroom and beyond, they must have access to more nutritious options they enjoy.”
Thompson also stressed that the situation could become worse if the Whole Milk for Healthy Kids Act is not enacted into law.
“The USDA’s latest proposed guidelines could roll back options even further by restricting flavored milk only to high school students and counting milk fat against weekly saturated fat allowances,” he said, giving several reasons why these top-down regulations are harmful to students and school districts that are forced to comply.
“First, we have seen students opt out (from milk) altogether,” said Thompson. “Let’s face it, the only way to benefit from milk’s essential nutrients is to consume it, and when students turn away from milk, they often opt for far less healthy alternatives.”
Thompson noted that these regulations also “perpetuate baseless claims that milk is bad for kids, but research has shown time and time again that whole and 2% milk are not responsible for childhood obesity and other health concerns. In fact, these beverages are so nutritious that research consistently shows positive health outcomes for children who consume milk.”
Referencing the 15 academic studies submitted from researchers across the country and around the world, Thompson asserted that, “These studies, and there are more, show that full fat dairy foods have no association with high blood pressure, cardiovascular disease, type II diabetes, obesity or cholesterol. In fact, several show full fat foods helped improve or lower negative health outcomes for children who drank more full fat dairy beverages.”
He also added to the record several letters of support, including a letter from the Nutrition Coalition (founded by science journalist Nina Teicholz, author of the Big Fat Surprise), the International Dairy Foods Association, the Northeast Dairy Foods Association, and a coalition of dairy producers from across the country.
He said the bill has the support of schools and families across the country.
This is evident by the tens of thousands of citizen petition signatures over the past few years and a 2021 IDFA survey of parents showing 78% find whole or 2% milk healthier for their families. Trouble is, their kids can’t get it at school where most of their meals are consumed.
Ag Moos 