Despite modifications to the dairy safety net earlier this year, the House version of the Farm Bill, which was released on Thursday, modifies the programs further. In addition to modifying the safety net program, the House draft changes to the formula used to calculate Class I milk prices.
According to Pro Farmer policy analyst Jim Wiesemeyer, several changes were made to the dairy safety net including the following:
- Changes the name from Margin Protection Program for Dairy Producers to Dairy Risk Management Program (DRMP) for Dairy Producers; and Authorizes DRMP through 2023.
- Requires the USDA Secretary to report on the accuracy of the data used to calculate the average cost of feed used by dairy operations to produce a hundredweight of milk and on the costs of using corn silage as a feed and the difference between feed cost of corn silage and feed cost of corn;
- Requires NASS to revise monthly survey reports to include prices for high quality alfalfa hay in the top 5 milk producing states as measured by milk produced in the previous month;
- Permits a multi-producer dairy operation to exclude information from the registration process regarding an owner who holds less than 5% interest in the operation;
- Allows a dairy to participate in both DRMP (MPP) and LGM, just not on the same production;
- Continues to base production history on the 2011, 2012, and 2013 calendar years through 2023;
- Eliminates the annual adjustment of production history going forward;
- Eliminates the annual election of coverage levels and percentage of coverage, instead requiring producers to make elections that are binding for the entire effective period of the program;
- Adds higher coverage levels of $8.50 and $9.00 for the first 5 million pounds of production (Tier I);
- Eliminates the current 25% minimum coverage level, allowing producers to elect levels in 5% increments from 5% to 90% of production history;
- Provides new premiums for coverage levels under Tier I (first 5 million pounds);
Jim Mulhern, president and CEO of the National Milk Producers Federation praised the draft bill adding that the organization has worked closely with Agriculture Committee Chairman Mike Conaway as well as other members of the committee in the development process.
“As the House developed its Farm Bill, we have worked closely with the leaders of the Agriculture Committee, including Chairman Mike Conaway, Ranking Member Collin Peterson, Vice Chairman Glenn Thompson and others to make further improvements to the Margin Protection Program and enhance farmers’ ability to use the Livestock Gross Margin program and other risk management tools,” he said. “The bill introduced today includes several changes we have advocated for, particularly in improving coverage levels and providing greater coverage flexibility for dairy producers. It also includes important language on price risk management, which NMPF has worked on closely alongside the International Dairy Foods Association.”
Mulhern said NMPF will continue to “work with our allies in Congress on a bipartisan, bicameral basis to further strengthen the dairy safety net for producers of all sizes.”