July 28, 2017
CapitalPress.com
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15
Dairy
Quota
National Milk welcomes improvements to MPP
MPP premiums
proposal
nears
finish line
By CAROL RYAN DUMAS
Capital Press
By CAROL RYAN DUMAS
Capital Press
California dairy farm-
ers are eager to abandon the
state’s milk marketing order
and join the federal market-
ing order system, hoping to
increase the price they re-
ceive for their milk.
They have, however,
been adamant that loss of the
state’s quota program would
be a deal breaker.
That program pays quo-
ta certificate holders $1.70
per hundredweight above
the state blend price for the
amount of milk covered by
their certificate. Those certif-
icates are together worth $1.2
billion, and are an asset that
can be transferred or sold.
USDA would allow the
quota program to continue in
the proposed federal order as
a stand-alone program run by
the California Department of
Food and Agriculture. And
a producer review board es-
tablished by CDFA has been
at work figuring out how the
program would operate.
The main issue was what
milk would be assessed and
how the assessment would
be collected. Under the
state order nearly all milk is
pooled and CDFA deducts
$12 million to $13 million a
month from the pool to fund
the quota program. Under a
federal order, however, only
Class I fluid milk is required
to be pooled, and milk for
other uses can move in and
out of the pool.
USDA would
allow
CDFA to assess pooled milk,
but producers’ initial con-
cern was there wouldn’t be
enough milk in the pool to
maintain quota value.
The review board has rec-
ommended all Class A milk
produced in the state be as-
sessed, with CDFA using a
settlement fund and requiring
handlers to help manage quo-
ta money. Handlers would
deduct money from their
producers’ milk payment to
pay the assessment and make
payments to producers hold-
ing quota certificates.
Handlers would either
make a payment to a settle-
ment fund or receive a pay-
ment from a settlement fund
based on the difference be-
tween the total money their
producers would be assessed
and the total money their pro-
ducers would receive in quo-
ta payment.
The proposed stand-alone
quota program, separate from
federal order pooling, clears
the way for producers to be
able to make a decision on
whether to join the federal
order system, said Geoff Van-
den Heuvel, a Chino dairy
producer and board member
of Milk Producers Council.
“Producers want the abili-
ty to consider a federal order,
but they want quota protect-
ed,” he said.
The proposed program
would function and operate
efficiently and effectively, he
said.
Western United Dairymen
has always been support-
ive of maintaining the quota
program, and the producer
review board came as close
as it could to keeping the
program as is, said Annie
AcMoody, WUD director of
economic analysis.
Producers shouldn’t feel
any big difference, but one
thing that might trigger a re-
action is that they will now
see a quota assessment as
a deduction on their milk
check. Currently quota is
funded by the pool with the
deduction in the background.
With the stand-alone pro-
gram, it will be assessed di-
rectly, she said.
That’s the main difference
in the proposed program, but
WUD will be working to
communicate to its members
that there’s really no differ-
ence in producers’ contribu-
tion to the quota program,
she said.
The Senate Appropria-
tions Committee on July 20
approved its fiscal year ag-
ricultural appropriations bill
containing improvements to
the Margin Protection Plan
for dairy producers.
The plan provides partici-
pants coverage when the na-
tional margin, the difference
between the all-milk price
and average feed costs, falls
below $4 per hundredweight.
The program has lost favor
with producers, who say it’s
failed to perform despite col-
lapsed milk prices and severe
losses. Most of the blame is
aimed at USDA’s feed costs
calculation, which producers
say is too low and doesn’t re-
flect reality.
National Milk Producers
Federation, which developed
the program in response to
catastrophic losses in 2009, is
aware of their frustration and
is pushing for changes to the
program in the next farm bill.
Enhancements in the Sen-
ate committee’s bill are a ma-
jor step in the right direction,
said Jim Mulhern, NMPF
president and CEO.
The bill lowers premiums
(Dollars/hundredweight of milk.)
Margin
coverage Current* Senate †
$4.00
0
0
4.50
0.010
0
5.00
0.025
0
5.50
0.040
0.009
6.00
0.055
0.017
6.50
0.090
0.043
7.00
0.217
0.068
7.50
0.300
0.094
8.00
0.475
0.153
Capital Press File
The National Milk Producers Federation is pushing Congress for
changes in the Margin Protection Plan.
for insured margins for the
first 5 million pounds of milk
a producer insures and raises
the threshold for free coverage
on that first 5 million pounds
from a margin of $4 per hun-
dredweight to $5.
“By making the dairy
safety net program more af-
fordable, this legislation will
ensure that more farmers have
access to better protection
against catastrophic losses,
like those we experienced
in 2009 an 20012,” Mulhern
said.
While 5 million pounds
represents production from
about 225 cows, the lower pre-
miums on the first 5 million
pounds of production apply to
farms of all sizes, said Chris
Galen, NMPF senior vice
president of communications.
“The measure will make in-
surance coverage for all dairy
farmers more affordable,” he
said.
The bill would also change
USDA’s margin calculation
from a two-month average to
a monthly calculation. Under
the current program, the mar-
gin could fall below a pro-
*Current; less than 4 million pounds.
† Senate appropriations; less than 5 million
pounds.
Source: National Milk Producers Federation
Capital Press graphic
ducer’s coverage level in one
month but be above it the other
month in one of the six pay
periods. That could result in a
two-month average above his
coverage level and not gener-
ate a payout.
The changes address criti-
cal shortcomings in the dairy
safety net that would strength-
en the program and help pave
the way for additional nec-
essary improvements in the
upcoming farm bill, Mulhern
said.
Minority committee lead-
ers said the updates will im-
2 join Wash. dairy commission
Cheese block
prices up,
barrels down
Capital Press
By LEE MIELKE
For the Capital Press
T
Courtesy of Dairy Farmers of Washington
Lana Smaciarz of Raymond, Wash., has been
elected to the Washington Dairy Products Com-
mission.
ington counties and southern
King County.
“Jim and Lana have differ-
ent backgrounds and unique
perspectives, which will help
our organization grow even
stronger,” Dairy Farmers of
Courtesy of Dairy Farmers of Washington
Monroe, Wash., dairy farmer Jim Werkhoven
has been elected to the Washington Dairy
Products Commission.
Washington CEO Scott Kin-
ney said in a written state-
ment.
Dairy farmers fund the
commission, which is a state
agency. The state agriculture
director makes appointments,
though the industry holds
advisory elections. The com-
mission supports the industry
through advertising, pub-
lic-relations work, retail pro-
motions, hunger-relief initia-
tives and nutrition education,
Group forms to defend Yakima dairies
By DON JENKINS
Online
Capital Press
The agricultural advocacy
group Save Family Farming
has launched an affiliate, Yaki-
ma Family Farmers, to defend
Central Washington dairies
dogged by citizen lawsuits and
the Environmental Protection
Agency.
The head of the group,
dairyman Bill Dolsen, said
Wednesday that his family’s
Cow Palace Dairy has gained
nothing by not commenting
publicly while enduring court
setbacks and government de-
mands.
“None, whatsoever,” he
said. “We were told more than
once by law firms to basically
sit down and shut up when we
heard anti-ag statements in the
media, and it drove me abso-
lutely crazy.”
Save Family Farming took
shape last year as north Puget
Sound dairies came under at-
tack from What’s Upstream, a
campaign that painted farmers
as unregulated polluters of wa-
ter. The campaign was orga-
nized by the Swinomish Indian
tribe, funded by an EPA grant
and supported by several envi-
ronmental groups.
In the Yakima Valley, dair-
ies have been bruised by ac-
cusations that cow manure is
Dairy
Markets
Lee Mielke
Westside farmers
fill seats
Two Western Washington
dairy farmers have been elect-
ed to the Washington Dairy
Products Commission.
Jim Werkhoven of Mon-
roe and Lana Smaciarz of
Raymond will fill seats on
the nine-member panel, also
known as the board for the
Dairy Farmers of Washington.
Werkhoven and his broth-
er, Andy, milk 1,300 cows
about 30 miles northeast of
Seattle, according to the Dairy
Farmers of Washington. He
has served on boards for Dari-
gold, the Innovation Center
for U.S. Dairy and the Nation-
al Milk Producers Federation.
He will fill an at-large po-
sition that was held by Cathy
Thomasson of Enumclaw,
whose term expired.
Smaciarz and her husband,
Terry, have a fourth-genera-
tion farm, Oxbow Dairy, in
southwest Washington. She
was born and raised on the
farm. She is a registered dieti-
tian and her daughter, Alicia,
was a 2016-17 dairy ambas-
sador.
She will replace Liz An-
derson of Onalaska, whose
term expired, and will repre-
sent District 2, which is made
up of 12 southwest Wash-
prove the program’s effec-
tiveness and offer greater
incentives to farmers to par-
ticipate in the insurance pro-
gram and select higher, more
meaningful levels of protec-
tion.
Annual premiums for cov-
erage of 90 percent of produc-
tion at a margin level of $6.50
per hundredweight, for exam-
ple, would go from $1,594
to $761 for an average 100-
cow dairy; from $21,504 to
$17,154 for a 500-cow dairy;
and from $56,313 to $51,963
for a 1,000-cow dairy.
NMPF is still working on
changes to improve the MPP
program, such as adjustments
to USDA’s national feed cost
calculation. But the commit-
tee’s provisions are a great
start, Galen said.
Hopefully, it will make
coverage better and cheaper,
and the additional revenue
being added for the lower pre-
miums will increase the fed-
eral baseline for spending on
the farm bill dairy title. That
would make requests for addi-
tional changes less costly.
While the committee’s
provisions don’t resolve all
the problems with MPP, en-
acting the changes will be a
major help, Mulhern said.
www.yakimafamilyfarmers.org
Courtesy of Yakima Family Farmers
A screen shot of the Yakima Family Farmers website. The group
has formed to tell agriculture’s side of the story in Washington
state’s Yakima Valley.
the principal cause of elevated
levels of nitrates in drinking
water. Dolsen said he appre-
ciated Save Family Farming’s
staunch response to accusations
by What’s Upstream.
“I contacted them and con-
gratulated them for having the
guts to stand up for our indus-
try and families,” he said. “I’ve
seen firsthand what’s happened
to my family and a couple of
other families and our industry
by remaining silent.”
Dolsen said he doesn’t ex-
pect the public-relations push
to help dairies battling lawsuits
now.
“I don’t think it’s going
to help them a bit, but it may
help some others in the fu-
ture,” he said. “We won’t have
an industry if we don’t stand
up for ourselves.”
On its website, Yakima Fam-
ily Farmers argues that dairies
have been unfairly singled out
for groundwater pollution and
are the victims of faulty science
and public misconceptions.
Save Family Farming di-
rector Gerald Baron, who also
directs the Yakima affiliate, said
the message is aimed at an audi-
ence beyond regulators, judges
and the Yakima Valley.
“We believe the future of
family farming in Washington
state resides in the opinions of
young, urban voters — non-
farmers,” Baron said. “These are
the people anti-farming activists
also are targeting.”
Yakima Family Farmers re-
news criticism of an EPA study
the led the Cow Palace and three
other dairies to agree in 2013 to
line manure lagoons with syn-
thetic material and make other
operational changes. A Natural
Resources Conservation Service
review of the study stated that
the EPA’s conclusions could not
be “scientifically defended.”
Baron said the group will
ask the next Northwest EPA ad-
ministrator to take another look
at the source of nitrates in the
Yakima Valley. The Trump ad-
ministration has yet to name a
successor to Obama appointee
Dennis McLerran.
An EPA spokesman said the
agency stands behind its sci-
ence, but the agency otherwise
declined to comment for this
story.
Jean Mendoza, executive
director of Friends of Toppen-
ish Creek, a plaintiff in lawsuits
against the dairies, said pin-
pointing groundwater pollution
has been difficult, but dairies
are a contributor.
“From my position, we
know for sure the dairies in the
Yakima Valley are polluting the
aquifer, so we’ll continue to fight
that,” she said. “We can argue
about the details all we want, but
it’s an established fact.”
he CME cheese price
gap shot higher last
week. The blocks closed
Friday at $1.7075 per pound,
up 3 1/4-cents on the week,
following a 12 1/4-cent jump
the previous week, and were
dead even with a year ago.
They were unchanged
Monday, as traders anticipat-
ed the afternoon’s June Cold
Storage report, which added a
tinge of bullishness to the mar-
ket Tuesday, but they remained
unchanged.
The barrels closed Friday
at $1.41, down 6 1/2-cents on
the week, 36 1/2-cents below
a year ago and gapping 29
3/4-cents below the blocks,
the largest spread since Oct.
22, 2014, when it hit 30 cents.
The record spread since dai-
ly trading began on Sept. 1,
1998 was 32 cents on July 30,
2008, according to FC Stone.
Eight cars of block were sold
last week at the CME and 40
of barrel.
The barrels were also un-
changed Monday but jumped 4
3/4-cents Tuesday, to $1.4575,
reducing the spread to 25
cents.
Central cheese contacts
suggest milk production is
easing a bit, but there is still
plenty of it, according to Dairy
Market News. Plants are run-
ning at or near full capacity
and demand is generally fol-
lowing seasonal patterns. Sales
into food service are steady to
lower, ahead of the seasonal
gear-up of school and college
cafeterias and the advance of
the fall pizza season.
Some
manufacturers’
cheese stocks are building so
they have been actively offer-
ing barrels on the CME. De-
mand for fresh barrel has been
able to provide some support
to prices, but “the disparity in
price, and the length to which
it has lasted, is unsettling to
some barrel cheese producers
in that it makes procurement
and cost management more
challenging.”
Cheese is also being pro-
duced at full capacity in most
Western plants as milk is read-
ily available despite higher
daytime temperatures. De-
mand is steady and “with cur-
rent higher cheese prices in the
EU, the international market is
showing more interest for U.S.
cheese.”
Spot butter finished Friday
at $2.5850 per pound, down 1
1/2-cents on the week but still
29 1/4-cents above a year ago,
with 26 cars selling last week.