Archive for the ‘NMPF’ Category

Margin Insurance: A Better Risk Management Tool

nmpfJanuary 30, 2014 — The National Milk Producers Federation didn’t get what they wanted regarding dairy provisions in the new farm bill, but admit the new margin insurance program will be a far better risk management tool than the dairy safety programs it replaces. NMPF’s Chris Galen joined us on Thursday’s DairyLine to share his insights:


Summary of Dairy Title Provisions

Margin Protection Program

The main feature of the new Farm Bill Dairy Title is the Dairy Producer Margin Protection Program. The Margin Protection Program is a new and unique safety net program that will provide dairy producers with indemnity payments when actual dairy margins are below the margin coverage levels the producer chooses on an annual basis. Its focus is to protect farm equity by guarding against destructively low margins, not to guarantee a profit to individual producers. The Farm Bill requires the Margin Protection Program to be established no later than September 1, 2014.

The program supports producer margins, not prices and is designed to address both catastrophic conditions as well as prolonged periods of low margins. Under this program, the “margin” will be calculated monthly by USDA and is simply defined as the all-milk price minus the average feed cost. Average feed cost is determined using a feed ration that has been developed to more realistically reflect those costs associated with feeding the entire dairy farm enterprise consisting of milking cows, heifers, and other related cost elements.

Margin Protection Program details are as follows:

1. All dairy operations will be eligible to participate in the program. If one or more dairy producers participate in the production and marketing of milk on a single operation, all producers will be treated as a single dairy operation. If a dairy producer operates two or more operations, each operation will be required to register separately to participate in the program.

2. In the first year of the Margin Protection Program, coverage will be limited solely to the volume of milk equivalent to the producer’s production history. Production history is defined as the highest level of annual milk production during 2011, 2012 or 2013. In subsequent years, annual adjustments to the producer’s production history will be made based on the national average growth in overall US milk production as estimated by USDA. Any growth beyond the national average increase will not be protected by the program.

3. In 5 percent increments, producers will be able to protect from 25 percent up to 90 percent of their production history.

4. Producers will be able to select margin protection coverage at 50 cent increments beginning at $4 per cwt. through $8 per cwt. Premiums will be fixed for 5 years (through 2018) and are as follows:

Marketings Under 4 Million Pounds Marketings Over 4 Million Pounds

Coverage Level Premiums* Coverage Level Premiums

$4.00 None $4.00 None

$4.50 $.01 $4.50 $.02

$5.00 $.025 $5.00 $.04

$5.50 $.04 $5.50 $.10

$6.00 $.055 $6.00 $.155

$6.50 $.09 $6.50 $.29

$7.00 $.217 $7.00 $.83

$7.50 $.30 $7.50 $1.06

$8.00 $.475 $8.00 $1.36

*Except for the premium at the $8.00 level, these premiums will be reduced by 25 percent for each of calendar years 2014 and 2015 and only for marketings under 4 million pounds.

5. Payments will be made to producers based on the percentage of their production history they have chosen to protect (25-90 percent) and the level of margin coverage they have selected ($4.50 to $8 per cwt). Payments will be distributed when margins fall below $4 (or below the selected level of coverage if a producer has selected a level above $4) for two consecutive months (defined as Jan-Feb, Mar-Apr, May-Jun, Jul- Aug, Sep-Oct, Nov-Dec)

6. Farmers will pay an annual administrative fee of $100 in order to access the new Margin Protection Program.

7. Should conditions warrant, the MILC payments will be temporarily available for dairy producers until the implementation of the Margin Protection Program or September 1, 2014 – whichever occurs first.

Dairy Product Donation Program

The new Farm Bill also creates a new Dairy Product Donation Program that would be triggered in the event of extremely low operating margins for dairy farmers and would also provide nutrition assistance to individuals in low income groups by requiring USDA to purchase dairy products for donation to food banks and other feeding programs.

The new program would only activate if margins fall below $4.00 for two consecutive months and would require USDA to purchase dairy products for three consecutive months, or until margins rebound above $4.00. The program would trigger out if US prices exceed international prices by more than 5%. Under this provision USDA would purchase a variety of dairy products to distribute to food banks or related non-profit organizations. USDA is required to distribute, not store, these products. Organizations receiving USDA purchased dairy products would be prohibited from selling the products back into commercial markets.

Programs That Were Eliminated

In addition to the creation of the Margin Protection Program and the Dairy Product Donation Program, the new Farm Bill eliminates the outmoded and ineffective Dairy Product Price Support Program and the Dairy Export Incentive Program. The Federal Milk Marketing Order Review Commission established in the previous Farm Bill is also eliminated. As noted earlier, once the Margin Protection Program is up and running, the Milk Income Loss Coverage (MILC) program will also be eliminated.

Programs That Were Renewed

Three existing dairy programs will be renewed under provisions of the new Farm Bill: the Dairy Promotion and Research Program (“checkoff”), the Dairy Indemnity Program, and the Dairy Forward Pricing Program. The authority for all three programs is extended through 2018.

New Dietary Guidelines Discussed

Briczinski-Dietary-Guidelines-011414January 16,2014 — Get ready for another round of dietary advice from the U.S. government. However this time the focus is not only on the plate but where our food comes from. The 2015 Dietary Guidelines Advisory Committee (DGAC) held two days of public hearings last week in Bethesda, Maryland to gather information to update basic consumer diet advice for Americans.

The 15 member group is charged with reporting back to the departments of agriculture and health and human services every five years in an effort to establish federal nutrition policy.

“What’s interesting is that they are looking at not just the contents of the food in terms of calories and nutrition, they are also looking at how it’s produced,” NMPF’s Chris Galen told DairyLine Radio. “A lot of the same arguments that we in the dairy industry have been looking at for the last decade or so.”

Galen said an issue like sustainability might be woven in the dietary guidelines process as they figure out how to measure certain foods to see if they are more sustainable than others.  A variety of agriculture production practices that focus on food safety is also being addressed, like organic versus conventional, or perhaps corn fed beef and dairy versus grass fed.

 “I don’t know how they are going to process all that, or make those decisions,” Galen said. “That’s a process that’s going to take a while, but those were the questions that were asked earlier last week.”

One thing is certain; NMPF is keeping the pressure on to maintain three daily servings of dairy products for most Americans, since dairy products are the number-one source of nine key nutrients.

“Dairy foods are uniquely nutrient-rich and virtually irreplaceable in the diet if we want to meet nutrient recommendations,” said NMPF Vice President for Dairy Foods & Nutrition Beth Briczinski. “We strongly urge the committee to maintain the current recommendation of three daily servings of dairy, and to focus on the serious public health problem of under-consumption of milk and dairy products.”

Briczinski reminded the group that milk, cheese, and yogurt contribute more than half the calcium and vitamin D in the American diet, and are the primary source of seven other essential nutrients in children’s diets: phosphorus, magnesium, potassium, vitamins A, B12, D, and riboflavin.

In fact, the 2010 Dietary Guidelines Advisory Committee (DGAC) found that when foods from the milk group were removed from model food patterns, intakes of calcium, vitamin D, and three other important nutrients fell below the goals.

“Even if calcium levels can be maintained with alternative foods, the levels of other nutrients such as protein, potassium, and vitamin D are adversely affected – there is simply no substitute for dairy,” she said. “Americans have major shortfalls in recommended milk consumption starting at four years of age.
None of us should find that acceptable.”

Research published since 2010 has strengthened the case for dairy’s beneficial role in reducing the risk of several chronic diseases, according to Briczinski.

“The good news is that if people who under-consume dairy would add even one serving a day, that would bring average daily intakes of Americans much closer to meeting Dietary Guideline recommendations. We hope this committee will encourage people who are under-consuming dairy to add that extra serving.”

Briczinski cited recent research indicating dairy is an inexpensive way of providing these nutrients, and that since the last round of federal nutrition advice, the case has been strengthened that dairy is beneficial in reducing the risk of several chronic diseases.

“Many population groups do not consume anywhere near the recommended amounts of dairy,” she said. “The good news is that if people who under-consume dairy would add even one serving a day, that would bring average daily intakes … much close to meeting Dietary Guideline recommendations.”

The Latest Butter News is All Positive

ABI Logo_FINAL_10.24.13January 9, 2014 — The American Butter Institute has a new executive director, a new logo, and exciting news regarding butter consumption. National Milk’s Chris Galen tells us more in this DairyLine Radio broadcast.


2013 Recap: A Better Year Economically

December 26, 2013 — Chris Galen from the National Milk Producers Federation joined us the day after Christmas to recap 2013 and look ahead to an optimistic outlook.

New FARM Program Report Quantifies High Level of Animal Care on U.S. Dairy Farms

November 13, 2013 — Dairy farmers participating in the industry’s program to quantify animal care practices are continuing to improve the manner in which they adhere to the program’s standards, according to a new summary year in review report issued today by the National Milk Producers Federation (NMPF).

Available to all dairy farmers in the United States, Farmers Assuring Responsible Management (FARM) is a voluntary, national set of guidelines designed to demonstrate farmers’ commitment to outstanding animal care and a quality milk supply. Cooperatives, proprietary milk processors, and individual producers are using the program to assure consumers that the dairy foods they purchase are produced with integrity. Since enrollment began in September 2010, the FARM Animal Care Program has been implemented by suppliers accounting for 70% of the nation’s milk supply.

At this week’s NMPF annual meeting in Phoenix, a newly-released annual assessment derived from 8,000 second-party evaluations, found universal adoption of many of the best practices from the program. For example, 94% farms enrolled in the program train their employees to properly move animals that cannot walk, and 98% train employees to handle calves with a minimum of stress. Other findings included:

  • 99% of farms observe animals daily to identify health issues for early treatment;
  • 93% have protocols developed with veterinarians for dealing with common; diseases, calving and animals with special needs.
  • 92% train workers to recognize the need for animals to be euthanized.

On the other hand, the report found some areas still in need of improvement. For example, the report indicated less than 82% of farms in the program have a valid veterinarian-client relationship, and just 67% of farm operators apply antiseptic to the navels of calves after birth as a preventative health measure.

Participants are given training materials and are evaluated by a veterinarian or another trained professional. Evaluators provide a status report and, if necessary, recommend areas for improvement.

Each year, a nationwide sample of dairy farms in the program is randomly selected for visits from third-party “verifiers” to assure (to a 95% confidence interval) that the observations recorded during the second-party evaluations are valid. Validus Certification Services, an Iowa-based certified auditing company, is used to conduct the third-party verification process.

“The thousands of data points this program collects on an ongoing basis show that dairy farmers aren’t just talking the talk about animal care – they’re performing dozens of practices on a daily basis to provide for animal well-being and produce high-quality milk,” said Jamie Jonker, NMPF’s vice president of scientific and regulatory affairs. “Still, we’re not yet where we want to be. The journey is continuing.”

The second annual third-party verification of the FARM program was begun in 2012 with on-farm evaluations, and completed in 2013 with statistical analysis of results. This analysis confirmed that effective implementation of the FARM program is occurring through producer education and on-farm evaluation. The third-party verification for 2013 is currently underway, Jonker said.

Also today, NMPF released its 2014 safe use manual for antibiotics and other animal drugs. TheMilk and Dairy Beef Drug Residue Prevention Manualpermits producers to quickly review those antibiotics approved for use with dairy animals. It can also be used to educate farm managers in how to avoid drug residues in milk and meat.

New in the 2014 edition is a section on multiple drug screening tests, as well as an updated drug and test kit list. The 2014 manual also includes a certificate that can be signed by both a producer and veterinarian to demonstrate commitment to proper antibiotic use.

“With each year, the use of antibiotics and other drugs in livestock is more intently scrutinized,” said Jonker. “To maintain consumer confidence, we must show we are using these medicines properly. This manual shows dairy farmers’ commitment to using antibiotics responsibly.”

The residue prevention manual was sponsored by Charm Sciences, Elanco Animal Health, IDEXX, and Zoetis. No government funds were used in its development. For more information on the FARM program, contact Betsy Flores at (703) 243-6111 or

The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies. for more information.

NMPF Hosts Joint Annual Meeting Next Week

November 7, 2013 — Every fall the National Milk Producers Federation organizes a joint annual meeting with the National Dairy Promotion and Research Board and United Dairy Industry nmpflogoAssociation. This year’s meeting is scheduled for next week in Phoenix, Arizona. NMPF’s Chris Galen gave us a preview on Thursday’s DairyLine Radio program.

A town hall meeting will give dairy producers an opportunity to field questions from the farmers in attendance and provide updates for all the issue important to the dairy industry.

“We are going to have a lengthy discussion on a variety of issues that we have been working on the past 12 months,” Galen said.

The meeting will also feature outside speakers like Herman Edwards, a former NFL coach and player turned football analyst. He will speak at the opening luncheon on Tuesday, November 12th. USDA Ag Secretary Tom Vilsack will also give a presentation on Wednesday, November 13th.  Other speakers representing the dairy industry, food service, and business professionals will also participate.

Another highlight will be the announcement of the Real Seal naming contest winner.

“The Real Seal is important for us to promote and defend the overall dairy brand,” Galen said. “We’ve had an animated version of the Real Seal and earlier this summer we had a naming contest where we used our Facebook page to allow people to submit naming the character.” The winner of that contest will be announced on Tuesday morning.

More info about next week’s annual meeting:

At Long Last, Lawmakers Talk Farm Bill

October 31, 2013 — House and Senate lawmakers responsible for writing a new Farm Bill finally met publicly this week to hammer out an agreement on a long list of issues relating to a new bill. Chris Galen, Sr. VP of Communications with the National Milk Producers Federation joined us on Thursday’s DairyLine to discuss. nmpflogo

Food Safety is the Best it’s Ever Been

October 24, 2013 — Food safety in this country has been the best it’s ever been.  That’s according to many in the agriculture industry who are responding to a highly critical report on food animal

Chris Galen, NMPF

Chris Galen, NMPF


You have to go back five years to 2008 when the Johns Hopkins Center for a Livable Future worked with the Pew Commission put together a panel including former secretaries of agriculture and public health experts to provide a critique of livestock agriculture.

“To no ones great surprise they found fault with a lot of what is happening today in conventional food production,” National Milk’s Chris Galen said.

Last week the commission chose the fifth anniversary of the initial release of that report to provide a scathing critique of what has happened, or more appropriately what has not happened since 2008.

National Milk along with many livestock groups representing beef, pork and poultry knew that this fifth anniversary update report was coming out and knew that it was going to be quite caustic in its critique of livestock groups as well as the Food and Drug Administration. So they released their own preemptive report entitled: ‘What the Center for Livable Future Aren’t Telling You about Food Production.’

Galen said the dairy industry needs to share the story of the glass being half full, not half empty.

“Not just from the standpoint of animal health, which was the big focus of the Johns Hopkins report, but also sustainability, reducing the carbon footprint, and the animal care program that we have,” he said.

A positive proof point for the dairy industry is the National Dairy Farm Program, currently in its fourth year, with 70 percent of the nation’s milk supply committed to the program. Another big difference between today and five years ago is social media.

“People back then were just figuring out what Facebook was and what a tweet was and now it is part of our every day vocabulary,” he said. “The nice thing is that dairy farmers and other food producers are also taking up those social media tools and put some balance in this.”

The big concern is this Johns Hopkins study really paints things terribly bad. That we have widespread public health issues, particularly because of the antibiotics used in the livestock industry.

“For dairy, we just don’t see that,” Galen said. “It was such an off base report that it describes a world that is very different than I think most dairy farmers and dairy consumers don’t see on a regular basis.”

What some people don’t understand is that the dairy industry tests every load for antibiotics, and they are only administered to ill animals, which is not what you would understand by reading this latest report from Johns Hopkins.

The bottom line, according to Galen, is there were a lot of half truths regarding statements in the study and that’s where the agriculture industry really needed to set the record straight.

Dairy Farm Groups Urge Conferees to Support DSA

October 17, 2013 — More than 50 state and national dairy and farm organizations have joined together to urge congressional farm bill conferees to adopt the Senate’s Dairy Security Act (DSA), because it offers farmers the most effective safety net for the future. The groups expressed their support in a joint letter sent today to the Senate and House members who will decide the fate of the 2013 farm bill.

On Saturday, the House leadership named 17 Republicans and 12 Democrats to the conference committee that will reconcile the respective House and Senate farm bills passed earlier this year. They are joining seven Democratic Senators and five Republicans.

“As we reach what we all hope is the home stretch in the quest to develop a better economic safety net, dairy farmers from coast to coast are saying loud and clear that the Senate approach is not just the best choice; it’s the most effective choice for farmers,” said Jim Mulhern, Chief Operating Officer of NMPF. “The large number of organizations signing this letter highlights the breadth of support among the dairy farmer community for the Senate version of the farm bill, because it offers producers of all sizes the best safety net.”

The letter to the conferees points out that the “Dairy Security Act is specifically designed to offer dairy farmers help when they desperately need it: when margins between farm milk prices and production costs shrink to dangerous levels. Equally important, the Dairy Security Act is designed to limit taxpayers’ liability through its market stabilization mechanism. This provision will help farm milk prices recover more quickly, while mitigating against prolonged or particularly serious downturns that would otherwise increase government program costs.”

The dairy and farm groups note that current programs have been a costly failure, because they “did nothing to address the underlying cause of the problem: low prices triggered by milk supplies that badly outstripped demand. Without the two-pronged Dairy Security Act, the conditions that created the crisis in 2009 will continue and could easily worsen in the future.”

Noting that individual farmers can decide whether or not to participate in the dairy program, the groups said the “DSA is a voluntary program that protects producers and keeps taxpayer costs in check. Contrary to the gross distortion pedaled by DSA’s opponents during the House debate, the plan doesn’t increase retail milk prices. It is designed merely to keep farm milk prices from staying too low for too long, conditions that put 2,000 dairy farms out of business in 2009.”

Reacting to opposition to the DSA from dairy processors, the dairy farmer groups point out that “processors, wholesalers and retailers receive 70% of the amount consumers pay for dairy products (with farmers receiving only 30%), and they employ their own supply management daily by buying only the amount of milk they want. Without the stabilization mechanism, when there are excess supplies that drive down the price of all milk it is dairy farmers, the cooperatives they own and taxpayers who would suffer.”

“Collapsing farm prices and unchecked milk supplies are a bonanza for dairy processors. Again in 2009, as prices fell precipitously and farmers lost money on every gallon of milk they produced, processors’ earnings soared (“the perfect sunny day,” as one processing industry leader said at the time). No wonder they oppose a system designed to keep milk supplies in better balance with demand and prevent a prolonged collapse in farmers’ margins.”

Mulhern said it is critical that farm bill conferees adopt the Senate dairy provisions in order to protect dairy farmers, provide greater stability to dairy markets and protect taxpayers.

“Without the DSA’s market stabilization program, dairy farmers will continue to suffer periods of unsustainably low prices, even as  taxpayers will subsidize processors by keeping milk prices artificially low through margin insurance that blunts the market signals contained in the market stabilization component,” he said.

The leaders of the farm bill conference said Wednesday they are likely to formally begin meeting the last week of October.




The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies. Visit for more information.