Archive for the ‘Government Reports’ Category

University Team to Create Web Based Margin Protection Tool

June 10, 2014 – Members of the Dairy Markets and Policy Team were asked by the Farm Services Agency of the U.S. Department of Agriculture to partner with them in developing a web-based tool that will assist farmers in making their decisions about participating in the new Margin Protection Program for Dairy Producers (MPP). In addition to developing the tool, the team will organize various educational activities and materials to help producers understand how they can use the tool, identify the nuances of how the program works, and think about the milk price and margin risks they face.

“In designing and developing these materials we fully expect to work with and be a resource for the large network of extension educators and industry partners who are routinely in the business of working with dairy farmers and helping them gather the information to think about the management decisions they face every day,” the team said in a statement.

The partnership with USDA will allow FSA and the University based team to coordinate separate responsibilities for the ultimate benefit of dairy farmers. FSA and its regional offices will be the source of information and place to go for producers who want specific information about the program, signup procedures and other specific program information such as eligibility, payment processes and so on. USDA can answer questions about how MPP works and can show interested parties how to find the University based materials. There will be a link to all the Farm Bill decision tools on the USDA website. However, USDA staff will not provide advice to farmers on what decision they should make under MPP.

Our decision support aids will not be designed to provide financial or risk management advice, rather we will try to give producers the tools to help them make the most informed MPP coverage decisions for their farm operation,” team members said. “We encourage producers to take full advantage of all the resources available to them. This is a brand new program, with new rules and new mechanisms. We know quite a bit about the sequence of things that need to happen before MPP is formally launched, but we do not have a specific timetable.”

The Agricultural Act of 2014 instructs USDA to “establish and administer” the new program by 1 September. In the press release announcing the University awards, USDA states: “Sign-up for the newly established Margin Protection Program for Dairy (MPP) begins late this summer”.

This is a strong indication of their goal but not a specific timetable for the various steps of releasing the rules, starting a sign-up period, and concluding enrollment. There remain many details for FSA to sort out in the implementation of the final and formal program. The framework for a MPP decision tool has been created, but the University team will need to know the final rules before a tool can be finalized and released publically. At this time, they cannot be more specific about when the tool will be available. USDA is already beginning to provide information about the program and will no doubt add to the information on their website as new information becomes available.

Although it is difficult to plan a specific schedule or even to know how much time will be available for various activities, the team is developing a multipronged education plan. There will be web-based educational materials and webinars, but team members also want to do some hands-on workshops.

“As a group, our focus will be on several “trainthe- trainer” type workshops around the U.S. We anticipate that extension educators and industry groups will be developing local educational programs,” they said.  ”Indeed, USDA is providing additional funding to State Cooperative Extension systems to support the overall producer education effort relative to new FSA-based programs. In our home states and in collaboration with partners elsewhere, we intend to be involved in more direct producer training as well. It will be our highest priority to provide producers with the tools and information that will help them to make the most informed decision possible.”

In the coming weeks and months, producers may visit: for information on the tool and our educational activities. This website contains publications, data tools, and a variety of information generally applicable to dairy markets and policy.

Members of the Dairy Markets and Policy Team :
Marin Bozic, University of Minnesota
Brian Gould, University of Wisconsin
John Newton, University of Illinois
Charles Nicholson, Penn State University
Andrew Novakovic, Cornell University
Mark Stephenson, University of Wisconsin
Cameron Thraen, Ohio State University
Christopher Wolf, Michigan State University


Federal Order Benchmark Milk Price Drops $1.74

June 4, 2014 – The Agriculture Department announced May Federal order milk prices this afternoon. The benchmark Class III price is $22.57 per hundredweight (cwt.), down $1.74 Calffrom April, $4.05 above May 2013, $3.23 above California’s comparable 4b price, and equates to about $1.94 per gallon.    Looking ahead, Class III futures settled today as follows: June, $21.21; July, $20.33; August, $20.21; September, $20.23; October, $19.85; November, $19.42; and December, $18.95.

The five month Class III average now stands at $22.94, up from $17.69 at this time a year ago and $16.65 in 2011.

The May Class IV price is $22.65/cwt., down 69 cents from April but $3.76 above a year ago. The Class IV average for the year thus far now stands at $23.08, up from $18.02 a year ago and $15.24 in 2012.

The four-week, NDPSR cheese price average used in calculating this months’ prices was $2.1703/lb., down 18.4 cents. Butter averaged $2.0477, up 12.5 cents. Nonfat dry milk averaged $1.8768, down 14.2 cents, and dry whey averaged 67.45 cents per pound, down fractionally.

Here Comes the Milk

May 27, 2014 – Milk production is steady to easing in the Northeast and Mid-Atlantic Regions, according to USDA’s Dairy Market News. Manufacturing milk supplies were heavy goingDBU into the Memorial holiday period. Balancing plants are working through the increased volumes with minimal delays.

According to NASS, in New England, above average temperatures and sunny days helped to speed along fieldwork, and crop progress this past week. Milk production in the Southeast varies. Most of region’s farm volumes are leveling out, with slight increases in some parts, due to cooler temperatures.

Milk/cream sales are slightly down. Some haulers are having issues with load temperatures when making deliveries, as warmer conditions necessitate equipment adjustments.

Farm milk production in Florida is still on the decline. Class I demand was down, as expected, due to Memorial Day and schools closing for the summer. Last week, Florida’s milk supply has led to the exporting of 120 spot loads.

According to NASS pastures in southwest Florida received some rain recently, which helped improve conditions. Cream supplies are tight. Demand has eased in some channels as most cream-based operations finalized holiday production volumes clearing to retail outlets. Ice cream sales are improving.

June Federal Order Class I Price Drops $1.61

May 21, 2014 – The Agriculture  Department announced the June Federal order Class I base milk price this  afternoon at $22.86 per hundredweight, down $1.61 from the record high May  price, but still $3.93 above June 2013, and the highest June Class I price since  June 2011. It equates to about $1.97 per gallon.

That puts the six-month Class I  average at $23.02, up from $18.22 at this time a year ago, $16.48 in 2012, and  $18.14 in 2011.    The  two-week, NDPSR-surveyed butter price used in calculating today’s price was  $2.0176 per pound, up 4.7 cents from May. Nonfat dry milk averaged $1.8768, down  12.7 cents. Cheese averaged $2.2029, down 16.7 cents, and dry whey averaged  67.24 cents, down fractionally from May.

April Milk Production Up 1.2%

May 19, 2014 –  The Agriculture  Department’s preliminary data issued this afternoon in its latest Milk Production report, shows April milk  output in the top 23 producing states at 16.3 billion pounds, up 1.2 percent  from April 2013. The 50-state total, at 17.43 billion pounds, was up 1.0 percent  from a year ago.    Revisions added 6 million pounds to the original March 23-state estimate,  now reported at 16.7 billion pounds, up 1.1 percent from a year ago.    April cow numbers in the 23  states, at 8.53 million head, were up 10,000 from March. Year ago data was not  available due to the Sequester.    April output per cow in the 23 states averaged 1,911 pounds, down from  1,958 pounds in March, but the highest production per cow for the month of April  since the 23 State series began in 2003. Again, year ago data was not available  due to the Sequester.

EPA Administrator Addresses Proposed Water Act Rule

May 13, 2014 — EPA Administrator Gina McCarthy met with farm broadcasters at the recent NAFB ‘Washington Watch’ in D.C. last week. She addressed the new environmental

Gina McCarthy, EPA Administrator

Gina McCarthy, EPA Administrator

challenges that agriculture and rural communities face and admits the Clean Water Act has been bogged down by confusion. That’s why a Clean Water Act rule is proposed that clarifies which waters are protected.

New Dairy Safety Net Expected By Sept. 1st

May 12 2014 — The main dairy provision from the new farm bill is the Margin Protection Program and  Agriculture Secretary Tom Vilsack reassured producers last week that

Ag. Secretary Vilsack meeting with farm broadcasters in Wash. D.C.

Ag. Secretary Vilsack meeting with farm broadcasters in Washington, D.C.

implementation is on schedule.

“I’m confident we will be ready to go by September 1st,” he told farm broadcasters in Washington, D.C. “This is part of what we’ll be doing this spring and summer – getting the educational information out to producers so they can make an evaluation and determination about precisely what’s in their best interest.”

The Margin Protection Program will be a new 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. The goal is to protect farm equity by guarding against destructively low margins, not to guarantee a profit to individual producers.

“Right now we are looking at a pretty healthy dairy market and milk market,” Vilsack reported. “We know that changes and we are very cognizant of the responsibility we have to get this thing set up and set up right, and getting information to producers as quickly as we can.”

The farm bill requires the Margin Protection Program to be established no later than September 1, 2014. In the interim, producers have access to the Milk Income Loss Contract (MILC) program so that there is still some protection if high milk prices suddenly and precipitously drop.

As for the new program, “We have to do it right and that’s why Congress basically gave us two tranches of $3 million each,” he said.

One tranche goes for outreach to help get information to producers during this spring and summer. Another tranche will go to a handful of universities who will create the decision making tools for producers.

“That second tranche is complicated because, depending upon how you set the model up, it could favor one commodity or one type of item more,” Vilsack said. “So you have to be real careful that you have sort of a neutral model so that people can make the best possible decision.”

That’s why USDA is taking a little time to make sure they get it right. Once implemented, all dairy operations will be eligible to participate in the program. Producers will be able to select margin protection coverage at 50 cent increments beginning at $4 per cwt. Premiums will be fixed for 5 years.

Vilsack is hopeful the educational materials will be available in the coming months to give dairy producers time to really think about it because it is obviously an important set of decisions they have to make.

Benchmark Milk Price Sets New Record High at $24.31/cwt.

April 30, 2014 –  The Agriculture Department announced the April Federal order Class III milk price today at an all time record high of $24.31 per hundredweight (cwt.), up 98 cents from March, $6.72 above April 2013, and equates to about $2.09 per gallon.

That will likely be the peak for 2014 as Class III futures settled today as follows: May, $22.55; June, $21.22; July, $20.43; August, $19.97; September, $19.87; October, $19.40; November, $18.94; and December, $18.61.

The Class III average for 2014 now stands at $23.04, up from $17.48 at this time a year ago, $16.14 in 2012, and $16.69 in 2011.

The April Class IV price is $23.34, down 32 cents from March but $5.24 above a year ago. Its 2014 average now stands at $23.19, up from $17.81 a year ago, $15.66 in 2012, and $18.50 in 2011.    The 4-week, NDPSR-surveyed cheese price used in calculating today’s milk prices was $2.3547 per pound, up 8.6 cents from March. Butter averaged $1.9227, up 6.7 cents. Nonfat dry milk averaged $2.0191, down 7.1 cents, and dry whey averaged 67.74 cents, up 2.2 cents. California’s comparable 4a and 4b prices will be announced tomorrow by the California Department of Food and Agriculture.

Risk Management Decisions

April 29, 2014 — Dairy producers have a decision to make on what type of risk management program is best for them. University of Wisconsin’s Brian Gould says several questions need to be answered before deciding.

Producers Face Risk Management Decisions

April 28, 2014 — Dairy producers are in a quandary when it comes to a risk management plan. Producers already have access to USDA’s Livestock Gross Margin for Dairy (LGM-Dairy) CenterForDairyExcellenceprogram – but should they be waiting until the new Margin Protection Program (MPP) is implemented? Alan Zepp, Risk Management Coordinator from the Center for Dairy Excellence, joins us to discuss on today’s DairyLine: