UPDATE: USDA Announces Top Off to 100% of Projected Marketing Costs
On September 20, 2023, USDA announced a second round of payments would be disbursed automatically to producers who have been approved through the Organic Dairy Marketing Assistance Program (ODMAP). The Farm Service Agency reported $15 million had been paid out already for 75% of projected 2023 marketing costs. The second round of payments would increase assistance by 25% to 100% of projected marketing costs.
OTA is following up on the letter we sent to Secretary Vilsack last month and will continue to advocate that the entire $104 million relief fund is paid to the farmers it was set aside for.
Original Post
After several years of inflated feed prices, organic dairy farmers continue to struggle to cover their costs. On January 23, 2023, the United States Department of Agriculture announced that $104M of direct farmer assistance would be available through the new Organic Dairy Marketing Assistance Program (ODMAP) at the Farm Service Agency. Applications to the program closed on August 11, 2023 – however, participation was lower than initially anticipated due to how the relief payments are calculated. On August 17th, the Organic Trade Association, joined by Organic Farmers Association (OFA), National Organic Coalition (NOC), Northeast Organic Dairy Producers Alliance (NODPA), and Western Organic Dairy Producers Alliance (WODPA), sent a letter to USDA Secretary Tom Vilsack urging increased and reformulated relief payments to dairy farmers.
ODMAP promises direct payments to farmers for up to 75% of estimated 2023 marketing costs for up to 5 million pounds of milk. Therefore, organic cow, goat, and sheep dairies are eligible for reimbursement of the $1.10 per hundredweight for marketing costs, up to $40,000 per operation. Under the terms of the program, if every organic dairy farmer in the country applied for assistance, OTA estimated that just $30 million would be spent. In our letter, OTA urged several adjustments to the program to expend the full amount provided by Congress and support the viability of organic dairy farms:
- Immediately increase ODMAP payments to 100% of 2022 marketing costs and automatically send additional payments to approved farmers;
- Accurately reflect prices experienced by organic producers by revising calculations to estimate average organic marketing costs;
- Increase percentage of marketing cost per hundredweight from 5.346% to 6.913% by weighting FMMO estimates by volume instead of straight averaging the relationship estimates for each FMMO; and
- Increase estimated marketing costs from $1.10 to $2.17 using the latest NASS organic milk pricing instead of conventional pricing.
- Increase the maximum payment from 5 million to 11.94 million pounds of milk to provide relief to all small organic dairies; and
- Reopen ODMAP to allow more farmers to apply and increase FSA education on the program.
Over the last several years, organic livestock farmers have been challenged by declining organic feed availability and increased feed prices escalated by a perfect storm of trade disruptions, international conflicts, and acute drought conditions. Data from Mercaris, a market research firm specializing in organic agriculture, showed the average price of feed for organic dairy cows jumped by nearly $200 per head from 2018 to 2022.
OTA responded in the fall of 2022 by launching the Organic Feedstuff Trade Relief Task Force, which has a mandate to research, develop and secure trade disruption relief payments for livestock producers dependent on organic feedstuffs. The Task Force is a coalition of organic livestock farming stakeholders who engaged Congress and USDA to urge emergency relief through the FY23 appropriations omnibus bill. The Task Force helped coordinate a letter joined by 202 farmers, a letter joined by 30 farm organizations and businesses, and Dear Colleague letter joined by 25 members of Congress led by Representatives Huffman and Pingree, and Senator Baldwin.
Thanks to the advocacy of the Task Force and organic champions in Congress, the FY23 omnibus appropriations summary language directed USDA to create a report on available funding sources to address the feed crisis as it related to dairy – leading to the creation of ODMAP. OTA applauds USDA for investing in organic dairy and will continue to press for long term solutions in the Farm Bill to shore up the resilience of the organic industry.
