Home Doll industry What happened? And after? – Updates on FMMO and PMVA ‘modification’

What happened? And after? – Updates on FMMO and PMVA ‘modification’

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In this columnProgressive dairy products summarizes current issues and attempts to describe how they might affect dairy farmers. Look for more detailed information and details about Progressive dairy products.

Items in this column are compiled from Progressive dairy products staff information sources. Send news to Dave Natzke.

FEDERAL MILK MARKETING ORDINANCES

What happened?

It’s cold outside, but discussions about the Federal Milk Marketing Ordinance (FMMO) system are heating up. With a growing call for change, Dana Coale, assistant dairy program administrator for the USDA Agricultural Marketing Service, took part in a cross-country trip to communicate with producers about the federal programs for which she provides administrative oversight. . During a stop at the annual DairyStrong conference in Wisconsin, Coale provided an overview of the FMMO hearing process.

What awaits us?

As a veteran of USDA dairy programs, Coale prefers to frame any potential changes to the FMMO system as “modifications” and not necessarily reaching the level of wholesale reforms implemented two decades ago. While there are issues that affect dairy producers and processors in all FMMOs, there are also regional issues that may impact one or more FMMOs depending on geography and market characteristics.

Whether modifying or reforming FMMOs, heat does not necessarily generate speed. Once dairy organizations request a hearing, the process will take over 12 to 18 months, with public notices, invitations to participate, formal hearings, analysis of comments and initial recommendations, comment periods, publication of a rule proposal and referendums within each FMMO. .

At the end of the line

Citing comments from US Secretary Tom Vilsack, Coale said changes to the FMMO system will require consensus within the dairy industry. She noted that it was up to dairy producer organizations to initiate the FMMO hearing process.

With both a potential FMMO audience and the upcoming 2023 Farm Bill, “Right now, we’re in a prime time for (producers) to engage; you can get involved,” Coale said.

PANDEMIC MARKET VOLATILITY ASSISTANCE PROGRAM (PMVAP)

What happened?

Last August, the USDA announced details of the Pandemic Market Volatility Assistance Program (PMVAP). This program was designed to reimburse dairy producers up to $350 million for unforeseen financial losses created during the COVID-19 pandemic when the Class I mover pricing formula change and federal purchases of boxes Food and beverages weighed heavily on the combined cheese to create significant losses for some producers.

Progressive dairy products has covered the basics of PMVAP in the past. According to the original schedule, the payments were to be distributed in December.

What awaits us?

Coale noted that the process has been slowed by the complexity of the program, as well as producer eligibility for payment due to milk production caps and federal farm program payment limits.

The good news for the producers concerned, the distribution of certain PMVAP payments to cooperatives and other managers was underway on January 20. These co-ops and other managers must distribute checks to producers within 30 days, and Coale anticipated that most if not all of the funds could be distributed by the end of February.

At the end of the line

The amount of money due to dairy cooperatives and/or other handlers is determined by the volume of milk regulated by the FMMO from July to December 2020. Payments were capped at 5 million pounds of milk marketed, or 833,000 pounds per month during the period. Producers of FMMOs with the highest Class I usage should receive the largest payments.

NORTHEAST ORGANIC CONTRACTS

What happened?

As reported earlier in this column, up to 135 organic dairy farmers in the Northeast have faced the termination of dairy contracts from Danone North America, owner of Horizon Organic and Maple Hill Creamery.

What awaits us?

Organic dairy organizations continue to seek out or offer markets to some of these producers by participating in the Northeast Dairy Working Group.

At the end of the line

In early January, the Northeast Organic Family Farm Partnership was formed to build support for regional organic dairy farmers. Launched by Gary Hirshberg, co-founder and longtime former CEO of Stonyfield Organic, the partnership asked consumers to sign a pledge to purchase a quarter of their weekly dairy purchases from 35 brands that pledged to increase their milk purchases from the northeast. Farmers.

The partnership also invited grocers, restaurants, cafeterias and all outlets that sell dairy products to become licensed partners, signing affidavits to increase their organic purchases, making them eligible to display the partnership logo. in point-of-sale and online marketing.

Later in January, farmer-owned co-op Organic Valley announced that it had added five small organic family farms that once supplied milk to Maple Hill and would take additional steps as part of a campaign to one year to support organic dairy farms in the northeast. To join the co-op, organic farms are required to meet animal care and quality standards and the co-op’s grazing expectations.

CLASS I MOVER

What happened?

After a seven-month reprieve, the debate over the formula “higher of” versus “average of plus 74 cents” resurfaced in February.

The “good” news: FMMO’s Advanced Class I base price hit an 86-month high in February.

The “bad” news: The February difference between the Advanced Class III skim milk price factor and the Advanced Class IV skim milk price factor is $2.54 per hundredweight (cwt). The addition of the advanced butterfat pricing factor means producers will see a negative impact using the Class I “average plus 74 cents” formula.

What awaits us?

The situation risks reigniting the debate on the two formulas. The situation should be short-lived. Current Class III-IV futures prices indicate a slight negative impact on the Class I mover in March, but then a net benefit to using the “average plus 74 cents” formula for the rest of the year. Markets change.

At the end of the line

Based on Progressive dairy products calculations, the Class I mover calculated by the “average plus 74 cents” formula is 51 cents lower than the “highest of” formula. However, this total difference will be reduced in producer milk checks, depending on the use of Class I in each FMMO and its impact on “blended” or uniform milk prices.

dave natzke

Forum on Future of Federal Milk Pricing Planned

In an effort to find consensus among dairy farmers on FMMO issues, the American Dairy Coalition (ADC) is hosting a virtual forum on the future of federal dairy milk pricing, February 15, from 11 a.m. to 12 p.m. 30 a.m. (Central time).

The forum is designed to gather input from individual producers, heads of state and national producer associations. Presenters will include:

  • Calvin Covington, retired co-op CEO with FMMO hearing experience, who will discuss what FMMOs do, don’t, can and cannot do, and how the hearing process works.
  • Frank Doll, a dairy farmer on the American Farm Bureau Federation’s dairy policy committee.
  • Mike McCully, a dairy industry consultant, will explain how changes to the price of Class I fluid milk are impacting farm gate box milk prices.

The panel will be moderated by Progressive dairy products editor Dave Natzke.

For more information and to join the free forum, visit American Dairy Coalition.