Chris Clayton1/22/2020 | 8:32 AM CST
AUSTIN, Texas (DTN) — Delegates from the American Farm Bureau Federation chose to keep a continuation of Market Facilitation Program payments in their resolution book during debate on Tuesday, reflecting farmers’ desire to see results from trade deals before abandoning the aid.
More than 300 farmers from across the country made changes to their policy book on issues ranging from trade aid and dairy policy to farm labor, as well as defining their recommendations for changes to USDA’s hemp-production rules. AFBF’s delegate session closed out the group’s annual meeting this year in Austin, Texas.
Farm Bureau resolutions set the organization’s lobbying policies on the federal level. Given that AFBF is one of the most influential agricultural organizations in the country, the group’s policies can sway Congress and federal agencies in making regulatory changes.
On the continuation of USDA’s MFP payment, Agriculture Secretary Sonny Perdue said there would be a third tranche of payments under the 2019 program coming soon, but there would be no 2020 program. Still, Farm Bureau members voted to keep language in the policy book supportive of MFP payments even with President Donald Trump touting trade wins in China and the congressional approval of the U.S.-Mexico-Canada Agreement (USMCA).
“Our members are basically saying ‘Show us results’,” said Scott VanderWal, a South Dakota farmer and AFBF’s national vice president. “We’re very, very happy the president has the China phase-one agreement in place, USMCA in place and will be signed very soon, but no products have moved, implementation hasn’t happened yet, and it’s kind of a ‘prove it to me’ thing. When we get down the road, there is nothing we would like better than to really see these agreements kick in and show us some expanded market opportunities, and hopefully the markets will come back with that to where we can go back to making all of our income off the market rather than having the government make up for those trade disputes and the damage to the market that has been done.”
Dairy was the major area of debate on Tuesday after Farm Bureau had set up a task force specifically to look at policy changes for the Federal Milk Marketing Orders. The group proposed changes to improve price discovery under FMMO with mandatory price reporting on most dairy products, including high value dairy products and prices paid for milk and milk components.
“You’re seeing a lot of frustration in the dairy industry and it came through from our members who are dairymen. The lack of profitability has been pretty severe and long-standing for the dairy industry, and they are looking for ways to change the pricing structure in the United States to make it more fair, reduce overlap and duplicity, things that make the dairy industry less efficient,” VanderWal said.
The farmers want USDA to develop an improved method to determine Class I Milk Mover Base Price, which is not reliant solely on manufactured dairy prices.
A big part of the debate was to move the Southeast part of the country to “component pricing” for dairy products under the federal marketing orders. There was still some division within Southeastern delegates over whether that change would help dairy profitability in the region or not. Other parts of the country already have component pricing, but it is not in the Southeast. Currently, more than 70% of dairy sales in the Southeast are fluid milk, but those fluid sales are flat.
A delegate from South Carolina said on the floor that a change to component pricing would offer more reasons for dairies to increase protein feed rations and provide a reason to produce high-component milk.
Dairy farmers also want to change the “make allowance” that goes to processors, looking to limit the allowance. That led to a debate whether restricting the make allowance would further reduce processors for dairy products. The debate among delegates was whether to strike language that would “modify” the make allowance and cap it, but the delegates kept the resolution.
Delegates also added language to support “flexible farmer and industry-driven milk management system” that could be used in some states such as Wisconsin and Vermont where dairy farmers are increasingly supporting more supply-management programs. Delegates also included language allowing producers to vote on these type of programs individually rather than voting en bloc as a cooperative, as is done now. Farm Bureau also added language to oppose any mandatory federal quota system.
“Again, it goes back to the frustration over profitability,” VanderWal said. “Any way we can make the system more efficient can translate into better economic conditions for our producers.”