By LEE MIELKE
Mielke Market Weekly 

USDA Secretary Tom Vilsack announced Sept. 22 that he is extending the sign-up deadline for the dairy Margin Protection Program (MPP) until Friday, Nov. 20. Vilsack acknowledged that fall is a busy time for dairy producers and that the additional seven weeks for sign-up will help the decision-making process on using the MPP in 2016.

National Milk, which called on Vilsack to make the extension last week, praised the action, stating that it is "consistent with Congress’ goal in creating the program, a goal shared by NMPF, which is to maximize the opportunity for dairy farmers to utilize this crucial risk management tool."

But, Dairy Today’s Jim Dickrell, writing in his Dairy Talk blog, makes the point; "Left unstated is dairy farmer disgruntlement with the (MPP) program and its failure to pay out indemnities even though milk prices fell some 30 percent last year." Dickrell says, "An extension to Nov. 30 would allow farmers more time, obviously. But it would also give them a better read on futures markets and the likelihood of indemnities being paid. This is precisely what Congress wanted to avoid when it passed the 2014 farm bill."

"The fear then," he says, "was that allowing farmers to sign up just weeks before the next year’s program went into effect would allow farmers to milk the U.S. Treasury. There was real concern, since farms of all sizes can now participate, that government payouts could reach billions of dollars."

Meanwhile, Bob Gray, editor of the Northeast Dairy Farmers Cooperative’s newsletter, reports that 18 Northeast House members sent a letter to Secretary Vilsack and Farm Service Agency Administrator Val Dolcini, expressing concern with USDA’s feed price calculations used in determining MPP margin levels.

They suggest the USDA conduct a state by state survey of feed prices, noting that the feed price calculations don’t take into account the fact that Northeast dairy farmers generally have higher feed costs.

The hearing process got under way Tuesday in Clovis, Calif., to explore the formation of a Federal Milk Market Order in the nation’s number 1 milk producer. Speaking on Friday’s DairyLine, the Milk Producers Council’s Rob Vandenheuvel described the long slow process, which he says will likely take over a month.

USDA witnesses are entering various data into the record, including economic modeling, which is subject to questioning. Opening statements by proposal proponents may happen by week’s end, he said, and then the focus will be on the initial proposal made by California’s three largest dairy cooperatives. He adds that anyone can testify for as long as they want and anyone can cross examine those witnesses so it’s impossible to know how long the process will take.

A post-hearing brief will then be issued and those who testified have two months to amplify or clarify their testimony. Once completed the hearing is closed, USDA produces a Recommended Decision for the industry to review and comment on, and then USDA produces a Final Decision for dairy producers to vote on.

Vandenheuvel anticipates that the Final Decision will be issued about a year after the hearing is closed.

August milk production in the top 23 producing states totaled 16.3 billion pounds, according to USDA’s preliminary data, up 0.8 percent from August 2014. The 50-state output, at 17.37 billion pounds, was also up 0.8 percent. Revisions added 5 million pounds to the original July 23-state tally, now put at 16.6 billion pounds, up 1.3 percent from a year ago.

August cow numbers totaled 9.32 million head in the 50 states, unchanged from July but 53,000 more than a year ago. Output per cow averaged 1,863 pounds, down 31 pounds from July and just 5 pounds above August 2014.

California output remains depressed, down 3.4 percent from August 2014, which followed a 3.3 percent decline in July, and hasn’t been in positive territory since November 2014. The August decline came on a 65-pound-drop per cow and 1,000 fewer cows.