Dairy Policy

Reciprocity and Balance: The New Blueprint for U.S. Agricultural Trade Agreements

Thu, 05 Mar 2026 21:01:52 GMT

Ambassador Julie Callahan is the chief ag negotiator at the U.S. Trade Representative, and she reports positive momentum toward rebuilding trade agreements equating to a positive U.S. ag trade balance.

“We came into a situation in January 2025 where the US ag trade deficit was ballooning in a really unsustainable manner,” she says.

At the beginning of 2025, USDA forecasted a $50 billion deficit for U.S. agricultral trade.

“Compare that to an agricultural trade surplus in 2020 when President Trump left office, of a $6 billion surplus. So we were $56 billion in the hole, you might say, at the beginning of the administration, but through the efforts of the president ensuring trading partners understand they need to treat U.S. farmers and ranchers right, we are seeing real shifts in our trade balance and chipping away at the deficit toward a surplus.”

Trade Wins Highlighted by Government Officials

Callahan points to eight signed trade agreements with: Malaysia, Cambodia, El Salvador, Guatemala, Argentina, Bangladesh, Taiwan and Indonesia. She says these are binding agreements, where the foreign governments are:

lowering tariffs for U.S. ag products
removing unfair trade practices
and lifting regulatory barriers

“These are serious binding trade agreements that will deliver real value for U.S. farmers and ranchers,” Callahan says. And when asked if Congressional action to codify agreements is necessary, Callahan says that action would be supported but should not be necessary.

“These foreign governments have made binding commitments in terms of adjusting tariff schedules, they are also making regulatory changes. USTR will be enforcing these agreements. They are enforceable.”

Examples of enforceable commitments include:

Indonesia removes its import licensing requirements
Malaysia accepts facilities on their registration list as long as FSIS has them on their list

The Future of the U.S./China Trade Relationship

At the 2026 Top Producer Summit, Lyu Jiang, minister for economic and commercial affairs at the Chinese Embassy in the U.S., characterized the U.S. and Chinese relationship being a phase of stabilization.

When prompted to react, Callahan agreed saying, “We very much want a stable, predictable, transactional relationship with our Chinese counterparts. We do want to normalize, bring reciprocity and balance back to our trade relationship and ensure that U.S. farmers, and ranchers can benefit from the Chinese market again.”

She says her office is balancing the agricultural stakeholders wanting access to the large-scale Chinese market with a strategy to also diversify trade partnerships as to not be too reliant on a single country.

“We are working through the agreement on reciprocal trade to diversify our markets so we don’t overly rely on China,” she says. “We are looking to address that very serious situation where China may see agriculture as a pain point for the United States.”

With the upcoming meeting of President Trump and President Xi in April, Callahan says her team and the larger U.S. trade team is working to prepare and set the stage for a positive outcome. Callahan points to specific issues to be worked through and market focuses spanning crops and livestock.

“Both sides want the meetings to be a success,” she says. “Certainly, in the meetings leading up to the president level discussion, we will be having open and frank conversations with China where we need to see areas of improvement. That’s not limited to soybeans to sorghum. Our beef producers don’t have access to China due to China’s unfortunate actions that are not renewing facility registrations.”

The Review of USMCA

With a goal of “reciprocity and balance across north America” the trade team is working on its review of the North American trade deal.

“We absolutely understand the importance of USMCA for U.S. farmers and ranchers,” Callahan says.

Describing this as a “comprehensive review” she says that spans:

Look at what is working
Maintain what is working
Improve on areas not be delivering the benefits U.S. farmers and ranchers expect

She brings up the overall trade balance with Canada and specifically, Canadian dairy.

“With Canada, we went from a $3 billion deficit in 2020 and now we have an $11 billion ag trade deficit. So there are certainly areas for improvement, and we’re taking all of our stakeholders’ comments into consideration,” Callahan says.

Beyond An '80s Buyout: A New Voluntary Approach to Dairy Surpluses and Beef Supply

Tue, 20 Jan 2026 17:10:56 GMT

The dairy industry is no stranger to the relentless cycle of “low prices cure low prices,” a brutal reality where dwindling profits force producers to consider exiting the business. The rearview mirror of history reveals a pattern: When milk prices plummet, the government intervenes.

From the 1980s to more recent times, various assistance programs have attempted to curb milk supply and stabilize prices with mixed results. Now, as dairy producers once again grapple with challenging margins and low milk prices, a new farmer-driven proposal is emerging.

Voluntary Program to Cull Dairy Cows

The Make America More Ground Beef (MAMGB) initiative is designed to help dairy farmers monetize surplus dairy-origin cattle, increase domestic beef supply and help lower grocery prices for American families. Bolstered by Western United Dairies, it is not a mandate but a voluntary program open to all U.S. dairy operations, potentially launching as early as this spring.

Anja Raudabaugh, CEO of Western United Dairies, a trade organization that represents more than 75% of milk produced in California, says they’re answering the Trump’s administration’s call to make real food affordable while putting American farmers first.

“This plan is something new and different. We don’t have to choose between America’s affordable access to high quality nutrition and farmers’ bottom lines,” Raudabaugh says. “Incentivizing farmers to cull only what’s needed to generate affordability for the American consumer is a win-win. It is not a herd buyout, and there are guardrails to ensure the cows end up in slaughter. We want to ensure the U.S. dairy industry stays strong and resilient in the future, and that we have a long-term, reliable supply of American-grown beef in our feedlots.”

Recently, the American Farm Bureau Federation (AFBF) has been vocal in opposition to such government interventions. During the organization’s recent annual convention, an amendment was made from the floor because “USDA started having talks about a dairy buyout program to bring down beef prices,” said Mike McCormick, Mississippi Farm Bureau president, when introducing the amendment.

AFBF delegates added language by unanimous consent opposing “any federally funded dairy buyout program that has the potential to create further market volatility in livestock market sectors.”

“Discussions of such a program are deeply concerning. We need solutions that benefit all of agriculture, not solutions that benefit one ag sector at the expense of another,” says John Newton, vice president of public policy and economic analysis with AFBF. “Solutions to help farmers should be market-driven and lasting, not short-term actions that could potentially damage the long-term strength of agriculture. We recognize the challenges facing dairy farmers and look forward to partnering with them to find solutions that work for all of agriculture.”

A Legacy of Government Intervention

The MAMGB proposal follows a long history of interventions, starting with the first significant federal effort to address milk surpluses in 1984-1985 with the USDA-Administered Milk Diversion Program. Responding to a surge in surplus dairy product purchases that cost USDA $2.7 billion in 1983, Congress enacted a temporary program. Farmers were paid $10 per cwt. to reduce their milk marketings by 5% to 30%, funded by a farmer assessment.

While $955 million was paid out and milk production was reduced by an estimated 3.74 to 4.11 billion pounds in 1984, the program suffered from “adverse selection” and “moral hazard” issues. Many participants had already reduced production, and non-participants expanded, leading to no measurable impact on national average milk price or overall production trends. Milk supply quickly rebounded, prompting further intervention.

This led to the more drastic 1986-1987 Milk Buyout Program (Dairy Termination Program - DTP), part of the 1985 farm bill. The goal was ambitious: Reduce U.S. milk production by 12 billion pounds annually by paying farmers to permanently exit production. Approximately 15,000 farmers accepted bids, removing about 1.55 million cows at a cost of $1.8 billion. However, like its predecessor, the DTP faced “free-rider” problems; non-participating farms increased their output, offsetting the intended reduction. While growth remained flat, national milk production did not decline as significantly as intended.

“The Dairy Termination Program, or Whole Herd Buyout, legislated in the 1985 farm bill, was a response to the now discontinued dairy price support program that had ratcheted milk prices to a level that was generating very costly surpluses of government dairy product purchases under the program,” says Peter Vitaliano, long-time chief economist of the National Milk Producers Federation. “Our analysis suggests that DTP and support price reductions during 1986-90 have proven to be a cost-effective means of reducing the quantity and expense of government purchases under the price support program.”

According to Vitaliano, the beef cattle industry strongly opposed any future legislated programs due to the impact on the cattle market and prices.

“The current political sensitivity about food affordability could also attract a wider focus on any legislated program to ‘elevate milk prices,’ he says.

Following these federal efforts came industry-funded voluntary herd buyouts from 2004 to 2011 through the National Milk Producers Federation Cooperatives Working Together (CWT) program. Dairy farmer cooperatives collectively aimed to reduce the milk supply by more than 1 billion pounds annually, ultimately removing an estimated 510,000 milking cows over seven years, with a notable 250,000 in 2009.

“The CWT program, a consortium of dairy cooperatives, initially operated a herd retirement program, loosely modeled on the DTP, in addition to an export assistance program,” Vitaliano says. “It attracted some class-action lawsuits brought under various state antitrust-type laws that resulted in a large legal settlement. This has established some legal precedents that would doubtless prove cautionary to undertaking a similar program in the future.”

A more recent concept, the Dairy Market Stabilization Program (DMSP), was debated in the 2014 farm bill. This proposed program would have been coupled with the Margin Protection Program (MPP), levying penalties on dairy farmers who didn’t reduce supply when MPP margins fell below certain thresholds. Though not enacted, historical analysis shows DMSP would have been infrequently triggered, highlighting the challenge of effective supply control.

How Make America More Ground Beef Would Work

Western United Dairies shares the MAMGB program aims to divert 800,000 to 1 million additional dairy-origin cattle in spring 2026, injecting an estimated 900 million to 1.1 billion pounds of lean trim into the ground beef market. This added supply is projected to:

Lower retail ground beef prices by 18% to 25%.
Increase overall beef demand.
Support packing plants and rural jobs. This aligns with national dietary guidance encouraging affordable, high-quality protein.

MAMGB offers two voluntary tracks with payments on top of normal market sale prices:

Immediate Cull Track. For culling dairy cows of any age or condition, this track offers $1,600 per head, plus a $200 early-delivery bonus, for a total potential payment of up to $1,800 per head, paid upon proof of slaughter within 30 days.
Feedlot Beef Track. For dairy heifers over 400 lb. shipped to approved feedlots for a minimum finishing period, this track offers $1,800 per head, plus a $200 early bonus, for a total potential payment of up to $2,000 per head.

MAMGB is designed with guardrails to protect long-term dairy viability:

Above-Baseline Rule. Incentives apply only to additional animals beyond a farm’s normal culling levels.
Strict Dairy-Only Verification. Ensures only dairy-origin animals qualify through breed checks, RFID and packer attestations.
Capacity Safeguards. Real-time monitoring can pause regional signups if packing plants near 90% capacity, preventing bottlenecks.
USDA-Aligned Caps. Per-entity payment caps adhere to standard USDA program limits.

Dairy Industry Optimism and Growth

Michael Dykes, CEO of the International Dairy Foods Association, stresses the industry’s eagerness for growth among both dairy producers and processors.

“The U.S. dairy industry is growing thanks to record domestic demand and exports and innovation from the farm to the plant. Dairy is meeting the moment because it delivers what matters most today — flavor, affordability and complete nutrition,” he says. “That growth has led dairy processors to invest more than $11 billion in new processing capacity to come online by 2028. We’re optimistic that our industry will continue to grow with the passage of the Whole Milk for Healthy Kids Act and the recently released Dietary Guidelines that recognizes the nutritional benefits of dairy in all fat levels. Our industry continues to produce innovative new products that meet the evolving consumer interests, and we’ll continue to grow dairy’s market share at home and abroad in the coming years for the benefit of the entire industry.”

This excitement has spread from boardrooms to barns, driving remarkable growth in milk production across the U.S. The latest USDA Milk Production Report details a vigorous increase in milk output. November’s milk production in the 24 major states reached a total of 18.1 billion pounds, reflecting a 4.7% increase from the previous year.

Phil Plourd, president of Ever.Ag Insights, says he looks at cow numbers first and with 211,000 more cows year-over year, he says it will be a while before we see a dramatic slowdown in milk production.

“We’ve got over 200,000 more cows, and those cows are producing around 20 pounds more milk than last year,” adds Robin Schmahl of AgMarket.net. “We have a lot of milk.”

As the dairy industry continues its perennial battle against the “low prices cure low prices” cycle, the landscape of intervention remains complex and ever-evolving. History shows a clear pattern of attempts, from direct government payments to voluntary buyouts and proposed stabilization programs, each with its own set of challenges and limited long-term success in fundamentally altering market dynamics. What remains constant is the dairy producer’s pursuit of resilience and profitability. Whether through farm diversification, such as the strategic growth of beef-on-dairy, or through collective industry efforts, the quest for stable margins and a sustainable future continues to drive innovation and adaptation.

Whole Milk is Back: The Dairy Farmers Who Witnessed History, and the Whirlwind Trip to Get There

Fri, 16 Jan 2026 22:24:37 GMT

What would you do if the White House called and asked you to get on a plane the next day to be part of a bill signing? For several dairy farmers this week, that whirlwind invitation became reality.

Nutrition shouldn’t be controversial. It’s common sense. #DrinkWholeMilk pic.twitter.com/le9vHOWXqs
— Dept. of Agriculture (@USDA) January 15, 2026

The occasion? President Donald Trump signing the Whole Milk for Healthy Kids Act into law, legislation aimed at giving students across the country access to whole milk in school lunches, a move the administration is calling “common sense” for both nutrition and parental choice.

“Whether you’re a Democrat or a Republican, whole milk is … a great thing,” Trump said during the signing, surrounded by farmers, legislators and a giant bottle of milk on the desk. “I’m delighted to sign the Whole Milk for Healthy Kids Act into law, which is very important for our farmers and maybe even more important for the people that drink milk.”

USDA Secretary Brooke Rollins highlighted the nutritional benefits, noting that the law allows schools to expand milk offerings beyond low-fat or nonfat options within just a few weeks.

“It’s a big announcement for our schools and our children,” Rollins said, emphasizing that the law empowers parents to make milk choices for their children without requiring medical exemptions.

🖊️ INTO LAW: President Donald J. Trump signs the Whole Milk for Healthy Kids Act, ensuring millions of children have access to high-quality milk in schools.

MAKE AMERICA HEALTHY AGAIN 🥛🐄 pic.twitter.com/VUI36QKgnU
— The White House (@WhiteHouse) January 14, 2026

For New Mexico dairy farmer Tara Vander Dussen, a fifth-generation dairy farmer and host of the “Discover Ag” podcast, she didn’t just experience the White House for herself; she actually attended the signing with her two daughters, making sure the experience was unforgettable.

“Oh my gosh, it was such a whirlwind,” Vander Dussen tells U.S. Farm Report. “I got the call on Monday, and within 24 hours, I needed to be in D.C. Thankfully, my mom packed everything in less than three hours so we could make it. I was on vacation with my husband, so it was a crazy scramble, but we made it.”

View this post on Instagram

A post shared by Tara Vander Dussen | New Mexico Milkmaid (@taravanderdussen)

Van Dussen says she almost turned down the invitation, as she was already on a trip and her girls were back at home in New Mexico, but she knew this was a once-in-a-lifetime opportunity she needed to make a reality for her family.

“Not only was it an incredible opportunity to meet the president, for the girls to meet him, but this is a huge win for dairy farmers across the country, a huge one for school-aged kids that depend on school lunches,” the New Mexico dairy farmer says. “And Trump, I think, said it best when he said, this is common sense. Why can’t kids have whole milk? And it’s not just a win for a whole milk; it’s also a win for parents’ choice. So before this bill was passed, if you wanted to have your kids have an alternative milk option, you had to have a sign to know from a doctor. Now parents can make that choice themselves.”

A really special moment with a fifth-generation dairy farmer, @TaraVanderDussn, and her two beautiful little girls yesterday (who already plan to be the SIXTH generation!!) — all headed to the White House for a big win for kids and real food. 🥛🐮🐄

With the Whole Milk for… pic.twitter.com/9RFoGbwDIC
— Secretary Brooke Rollins (@SecRollins) January 15, 2026

The White House signing included farmers from operations of all sizes. USDA highlighted attendees like William Thiele, who milks 40 to 60 cows in Butler County, Pa., and Jamie Witcpalek, of Pagel’s Ponderosa Dairy, LLC from Wisconsin, who manages 5,000 cows.

“This is such a monumental day in agriculture, not just for dairy farmers, but for all of agriculture,” Thiele said during the White House signing. “It helps producers, processors and these kids. It’s a perfect piece of legislation, a great day for America.”

Mr. President, I love Butler, PA too — and I’m always amazed by our hardworking dairy farmers across the Commonwealth 👍 pic.twitter.com/VbwuaL5muA
— Dave McCormick (@DaveMcCormickPA) January 15, 2026

U.S. Farm Report had the chance to talk to Thiele fresh off his trip to D.C. this week. He also emphasized the nutritional impact of the law, noting that the fat in whole milk is beneficial.

“I believe it was Secretary Brooke Rollins and Secretary Robert Kennedy [who] said yesterday about how important this is to a growing children’s diet and for brain health, brain function and physical health and all those things,” he says.

The signing marked the first bill of the year and quickly became a social media sensation, with images of Trump as the “Milk Man” and USDA posts celebrating the law’s passage. For dairy producers, it was a moment of recognition and celebration, a rare spotlight for an industry often overlooked.

Make Whole Milk Great Again.🥛 pic.twitter.com/l14FZhZDgw
— The White House (@WhiteHouse) January 15, 2026

This historic signing brings a personal element to legislative victories, a reminder that policy decisions can directly impact farmers’ livelihoods and children’s nutrition. For the dairy families who boarded planes at a moment’s notice, it was a trip of a lifetime and a reason to toast milk instead of debate it.

Standing Up for Whole Milk by Sharing the Whole Story

Fri, 12 Dec 2025 15:12:25 GMT

Every now and then, amidst the never-ending lists of tasks and chores, you hear something that reminds you why you do it. Often finding herself surrounded by kindergarteners, Magdalene Gerst frequently hears comments like, “Oh, this is the dark brown chocolate milk. This is the really good stuff!”

It’s a cute quote, and it was fun to hear. It may have even been one of those “why we do it” moments, but it’s also part of a story that proves something has to change.

Gerst is a seventh-generation farmer from Richmond Farms Dairy, a 200-cow dairy in North Collins, New York. As a past dairy princess and mom of three, she has a knack for connecting with young kids about what she does and where their milk comes from.

During her visits to schools, Gerst has noticed an unfortunate trend. “Kids won’t even touch the one percent,” she says. “They can only get non-fat for lunch, and if a five-year-old can notice, it really says something.” At home, many kids are drinking two percent or whole milk. And when the milk at school tastes different, the kids don’t drink it, and they miss out on the nutrients dairy provides.

(Magdalene Gerst)

Seeing this part of the story play out time and again has given Gerst the motivation and message she needs to speak with the legislators who can help make a change. “We had our congressman out to the farm when he first got elected,” she recalls. “We talked to him about things that are important to us and just let him see what’s going on.”

More recently, Gerst traveled with the National Young Cooperators to Washington, DC. “We talked to our representatives about the key things, one being ‘Whole Milk for Healthy Kids,’” Gerst says. “That was an easy thing to talk about from being in the schools.”

(Magdalene Gerst)

From those experiences, Gerst has learned what works – and what doesn’t. “In the past, we’ve written letters,” she says. “I’m sure they get them but there’s no follow-through. But when we physically made an appointment and we’re sitting in their office, follow that up with a thank-you card and they’re gonna remember that connection.”

Since hosting the congressman on the farm, communication has opened up both ways. “You’ve got to set up that first connection. I like to keep the door open so they’re welcome to visit anytime,” Gerst says. “I’ll show them around and answer any of their questions.”

Gerst wears many hats on the farm, and she pulls from all of her experiences to make sure she has a good story to share with anyone she meets. On any given day, she could be managing embryo transfers, payroll, or working with the vet – and all with a toddler in tow.

(Magdalene Gerst)

For both legislators and kindergarteners, she says those real-life stories are key: “Letting them know what the day-to-day looks like, and letting them feel included,” she says. “Especially for the kids, they want to see pictures, or they want something physical they can touch. So I take a calf into the school. I take feed and let them make a trail mix – as we call it – but then teach them what that is.”

Several months after her visits to her kids’ schools, Gerst is still hearing those reaffirming comments like, “Did you bring chocolate milk today?” or “Are you gonna bring a calf again?”

Gerst feels strongly about bridging those gaps right from the beginning, instead of trying to correct misinformation. She loves seeing their faces light up and knowing she’s showing them something they will remember and share at home. “I love kids, so that makes it even more fun. We have a great story to tell, and if we don’t tell it, someone else is going to make up their own story to tell on us.”

Why Dairy Is Dominating: America's New Billion-Dollar Ag Success Story

Wed, 08 Oct 2025 11:33:04 GMT

The U.S. dairy industry is in the midst of a record-breaking boom — fueled by premium beef-on-dairy calves, historic investments in processing plants and surging demand for protein both at home and abroad.

Beef-on-Dairy: A Revenue Stream That’s Reshaping the Market

Dairy farmers across the U.S. aren’t just milking cows — they’re tapping into a lucrative side market. Record cattle prices are giving rise to “beef-on-dairy,” a crossbreeding trend that’s bringing in premium prices and reshaping the value chain.

“I think it is an enormous revenue stream for dairy farmers,” said Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF). “The number I hear is about $1,400 for that black day-old calf. As the old beef guy, I think that’s going to be there for at least another year or so — maybe more.”

The result, Doud says, is the dairy industry is “hitting on all cylinders,” as dairy producers capitalize on strong beef genetics and elevated cattle values to diversify income.

New Wave of Investment

At the same time, the U.S. is seeing a level of investment in dairy processing never before witnessed in American agriculture.

“It really is $10 billion — 2023, 2024, 2025, 2026 — in new dairy processing investment in the U.S.,” Doud said. “There’s nothing like it in the history of U.S. agriculture, of any commodity, anywhere in the world.”

Dairy’s $10 billion in investment in dairy processing over the next three years spans across the country.

(Ever.Ag)

According to Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), more than $11 billion is flowing into 53 new or expanded dairy manufacturing facilities across 19 states, from New York to Texas to Idaho. These projects are slated to come online between 2025 and 2028.

“Investment follows demand,” Dykes says. “It’s phenomenal — the scale and scope of what’s happening right now.”

Production Rising to Meet Global Appetite

Farmers are responding to those signals. USDA data shows U.S. milk production is up nearly 5% year over year, and the agency projects another 27 billion pounds of milk by 2034.

Exports have also surged, reaching a record $8.2 billion last year.

“I can’t tell you how many meetings I went to where people said, ‘We’re scared to death there won’t be enough milk,’” Dykes recalls. “I said, don’t fret for one moment — dairy farmers hear the market calling for milk. Milk will come.”

America’s Dairy Demand Hits Record Highs

Domestic demand is booming too. Americans are consuming an average 661 pounds of dairy per person per year — the highest ever recorded.

“Cheese is driving the bus,” Dykes said. “We’re eating about 42 pounds of cheese per person per year — and pizza has clearly contributed to that.”

But it’s not just cheese. Butter, yogurt, premium ice cream and even milk itself are seeing renewed strength.

“Milk has been trending downward for the last few years,” Dykes said. “But even last year, milk took a turn up — led by whole milk, high-protein milk and lactose-free options.”

The Protein Craze Powering Dairy’s Momentum

Behind this surge is one key word: protein.

“The demand for protein globally is unbelievable,” Doud says. “Everywhere I go, I tell people — we’re having a moment here on the dairy-side of the equation.”

Doud notes dairy’s protein-rich products — from cheese to whey — are meeting consumer demand both domestically and internationally.

“We’re up 2% this year in volume, 16% in value,” he says. “Global demand for dairy is rolling, and we are right in the hunt.”

Dykes agrees, pointing out the “protein craze” isn’t just helping beef and pork — it’s boosting dairy too.

“Most of the products that have ‘protein added’ are dairy-derived proteins, like whey from cheese plants,” he says. “Consumers globally cannot get enough protein. Dairy has a protein that’s highly digestible and fits perfectly with the health and wellness mood of this country. We’re even adding protein to ice cream.”

A Growing Industry with a Rural Footprint

The dairy industry’s impact stretches far beyond store shelves. Dykes says the U.S. now has 1,200 processing plants, employing 3 million people, generating $200 billion in wages and paying $83 billion in state and local taxes.

“These plants are going into rural communities — where the milk is produced,” Dykes adds. “That’s where the jobs and opportunities are being created.”

Texas, South Dakota and Kansas are seeing the largest waves of new investment, with New York emerging as a new processing hub.

Labor: The Industry’s Biggest Challenge

Even with growth on nearly every front, one major hurdle remains: labor.

“The administration is working on short-term solutions through the Department of Labor — mainly H-2A or seasonal programs,” Doud explains. “But that really doesn’t do anything for us on the dairy side because we need year-round help.”

He says lasting change will require Congressional action.

“We have to have Congress change the law,” Doud says. “House Ag Committee Chairman G.T. Thompson is working on this, but it’s a big lift. We always get stuck on the 60-vote issue in the Senate. We’ve got to make another run at this.”

Doud remains hopeful a political breakthrough could come — much like the immigration reforms of the late 1980s — to finally deliver a sustainable labor solution for dairy.

America’s Dairy Future

From booming exports to billion-dollar investments, the dairy sector is on a trajectory few could have predicted a decade ago. Industry leaders say if trade and labor challenges can be addressed, the U.S. will continue to cement its place as a global dairy powerhouse for years to come.

“We’re hitting on all cylinders right now,” Doud says. “And if we can keep that momentum going, there’s no limit to how far U.S. dairy can go.”

What's Missing in the Big Beautiful Bill When It Comes to Agriculture?

Tue, 10 Jun 2025 17:03:44 GMT

The fate of President Donald Trump’s One Big Beautiful Bill is with the Senate. The 1,000-page bill includes nearly $4.9 trillion in tax breaks and budget cuts, and is also packed with priorities that cover agriculture . That includes one provision that will allow community banks to pass along lower interest rates to ag producers. However, not all of agriculture’s wants are in the bill.

American Farm Bureau Federation (AFBF) recently dug into the details of the massive bill being debated in Washington. According to the nonpartisan Congressional Budget Office (CBO), the House-passed version of the One Big Beautiful Bill Act would increase spending for agriculture-facing programs by $56.6 billion over the next decade. Of that increase, $52.3 billion is for enhancements to the current farm safety net, including higher reference prices for ARC and PLC, and $4.3 billion is for trade promotion, livestock biosecurity, research and rural school funding.

According to AFBF, the One Big Beautiful Bill Act would increase agriculture-facing programs spending by $56.6 billion over the next decade (fiscal years 2025–2034).

(American Farm Bureau Federation (AFBF) )

According to AFBF, here’s what the current version of the bill includes for farm bill provisions (Title 1, Subtitle B-Investment in Rural America):

Updates and funding for many core agriculture titles through 2031.
Enhancements to safety nets including ARC, PLC and Dairy Margin Coverage (DMC) through the 2031 crop year.
Increases to reference prices for major covered commodities between 11% to 21% under the farm bill provisions of the bill.
Addition of a reference price escalator mechanism beginning in the 2031 crop year, which AFBF says would increase reference prices by 0.5% annually on a compounded basis. That increase is capped at 115% of the original statuary value.
Permits for farmers to add up to 30 million new base acres
Updates to ARC by adjusting revenue guarantee and the payment cap beginning in 2025. That would increase the coverage threshold to 90% of benchmark revenue, and increase the payment cap of 10% to 12.5%.
Enhancements to the DMC program and an increase of Tier 1 coverage eligibility from 5 million pounds to 6 million pounds per farm.

Proposed changes to the safety net

(AFBF)

Changes to Conservation Programs
AFBF’s analysis of the reconciliation bill shows long-term funding authority for USDA’s major conservation programs will continue through 2031. That includes the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP) and Agricultural Conservation Easement Program (ACEP).

The levels are higher than what was included in the 2018 farm bill, but align with funding under the Inflation Reduction Act (IRA), making these programs permanent baseline versus new program expansions.

AFBF says the bill doesn’t retain all IRA-funded initiatives.

“For example, it rescinds $450 million in unobligated IRA funds that had been allocated for competitive forestry grants to non-federal landowners. According to the Congressional Budget Office, these adjustments collectively result in a net reduction of $1.8 billion in conservation spending over the next decade,” said the AFBF analysis. “The bill also renews smaller initiatives that were not funded in the last farm bill extension. This includes the Grassroots Source Water Protection program, which safeguards well water, and the Voluntary Public Access and Habitat Incentive program, which rewards farmers for opening land to hunting and recreation. In addition, the Feral Swine Eradication and Control Pilot Program, a vital initiative to combat over $1.6 billion in annual damages caused by invasive wild pigs, is extended with new funding through 2031.”

Focus on Trade
Another important element included in the House version of the Big Beautiful Bill includes establishing a new Agricultural Trade Promotion and Facilitation Program, which would be similar to Market Access Program (MAP) and Foreign Market Development (FMD), while also providing $285 million annually in permanent, mandatory funding through a separate account.

“Because the bill does not modify or replace MAP or FMD, which are typically funded at $200 million and $34.5 million per year, respectively, the new program effectively doubles USDA’s total trade promotion capacity,” said AFBF’s analysis.

National Pork Producers Council (NPPC) CEO Bryan Humphreys says the trade portion of the bill, as well as the tax provisions, are a “win” for livestock producers.

“We’re very pleased with what came out of the House version. We included in there were animal health priorities, some additional funding for MAP and FMD to promote our product internationally, and then, of course, the tax package was included in there on things like 179, bonus depreciation and estate taxes,” he says. “We are very pleased those were in there even if some of our other assets we need to be in the farm bill weren’t able to make it in there.”

Humphreys says the House version of the reconciliation bill includes funding for animal health priorities, including $233 million per year on animal disease prevention and response.

What’s Not in the Bill?
According to Humphreys, there’s one major priority that didn’t make it into the Big Beautiful Bill — and that’s provisions for Prop 12.

“We still need a farm bill to address Proposition 12 in California. At the end of the day, this is an issue that, as California continues to regulate outside of their borders, is not just a pork industry issue. It is an American agriculture issue,” he says. “We’ve been asking — along with the American Farm Bureau, Corn, Soy and others — for Congress to address this issue of California regulating farmers outside of their borders. And we still need that to be addressed.”

Humphreys says a farm bill is still needed to address Proposition 12 in California. But if a farm bill doesn’t happen this year, Humphreys says NPPC is exploring other options to do it.

“Even though there are other solutions for Proposition 12 and other potential vehicles out there that we’ll continue to explore with our friends on the Hill, at the end of the day, we still believe as American pork producers that America and the pork industry need a farm bill — a skinny version, a large version or whatever. We need to maintain that coalition not just for now, but for decades to come as well. We’re not ready to give up on that yet,” Humphreys says.

Renewable Energy In The Bill
Energy programs are another area of focus under the reconciliation bill. According to AFBF, USDA’s farm energy and biofuel programs are reauthorized through 2031 to spur renewable energy innovation in rural America. That would include the Biobased Markets Program, which is a program that promotes biobased products through federal procurement. It also addresses the Bioenergy Program for Advanced Biofuels, which provides payments to producers of biodiesel, cellulosic ethanol and other next-generation fuels.

Tax Provisions That Would Benefit Ag

Farm CPA Paul Neiffer calls the tax provisions within the House version of the bill “very favorable for agriculture,” rating them a 8 or 9 out of 10. Here’s why:

As of Jan. 20, farmers will have 100% bonus depreciation for the next four years
The Section 199A deduction that was at the 20% level will now be bumped up to the 23% level.
Cooperative deductions will still be included
Starting next year, Section 179 will increase to $2.5 million, up from $1 million
An increase in the gift tax exemption amounts to $15 million per individual and $30 million per couple, adjusted for inflation annually.

Neiffer say farmers who’ve built net worth through land or other assets, there’s a piece of the legislation that will also benefit them.

“The lifetime exemption starting next year will be $15 million, and it’s made permanent,” Neiffer says.

Lower Interest Rates for Ag Producers?

If the bill passes, agricultural producers could also see lower interets rates for loans. According to Jeff T. Kanger, president of First State Bank in Lincoln, Nebraska, there’s another provision that will allow community banks to pass along lower interest rates to ag producers and rural housing.

“The community banks have less tax exposure and can therefore pass along some interest savings to customers,” Kanger told AgWeb. “This provision is very important to a lot of our growers.”

It’s called the “Exclusion of interest on loans secured by rural or agricultural real property.” According to the provision text, it “allows for a partial exclusion of interest on certain loans secured by rural or agricultural real estate. Speciﬁcally, it allows for the exclusion of 25 percent of interest received by a qualiﬁed lender on any qualiﬁed real estate loan.”

What’s Next?
The Senate could roll out its version of bill later this week, which is expected to include changes from the House’s version that passed in May by one vote.

House Speaker Mike Johnson also said this week he still believes July 4 is a realistic target for passing President Donald Trump’s “big beautiful bill.”

Water Woes, Labor Limitations and Regulatory Restrictions Put California's Dairy Industry At A Crossroads

Wed, 26 Mar 2025 16:51:20 GMT

The California dairy industry, renowned for its significant contributions to agriculture, is navigating a series of challenges that demand substantial adaptation to ensure future success. Water scarcity, stringent labor laws and complex permitting regulations top the list of challenges in the Golden State, the nation’s largest milk producer and home to 1.71 million milk cows.

Regulatory and Economic Pressures

Karen Ross, secretary of the California Department of Food and Agriculture, emphasizes the need to support the state’s farmers during these challenging times.

“What we would like to do is focus on smart incentives because, over the years, the cumulative effect of so many regulatory agencies is adding to the complexity … as well as the cost of compliance,” Ross said in a one-on-one interview with Farm Journal during the California Dairy Sustainability Summit. “We’re engaged in a very small pilot project with the state water board to see if it’s possible to cut through some of that [complexity], find ways to ease the burden [on producers] and educate agencies about how complex and costly regulations are.”

In addition to the regulatory challenges in California, Ross is concerned about market disruptions and stresses the importance of compensation strategies to ensure dairy operations can look to the future.

“Secretary Rollins has already made it clear they’ll offer help for farmers through these periods of disruption, and certainly [that was the case] in the first Trump administration,” she says. “What I’m most concerned about is the lost markets that still haven’t fully recovered and the opportunity costs lost. But [Rollins] has been very clear they want to make sure there’s compensation for growers to keep them in business.”

Water Woes

For Ryan Junio , owner of Four J Jerseys in Pixley, Calif., his primary concern is the states’ ongoing water crisis.

“As a dairy producer, this is an ever-growing challenge,” he says, reflecting the sentiments of his fellow producers in the state.

The California water issue is complex and long-standing. Geoff Vanden Heuvel, director of regulatory and economic affairs with the California Milk Producer Council, says some of the surface water that used to come into the Central Valley from northern California was diverted to the ocean to save fish in the early 1990s as part of the Endangered Species Act.

“California has overdrafted about 2-million-acre feet on average over the years,” he says. “We had a crisis in 2014 with a drought and the state decided to regulate groundwater, which they probably should have done 50 years ago.”

Labor Limitations

Layton, Calif., dairy producer Melvin Medeiros says the labor quality is tough and he doesn’t have a magic wand to fix it. In 2019, California began phasing in overtime for agricultural workers. In 2022, the state began requiring any agriculture employees working more than 8 hours a day or 40 hours a week receive overtime compensation.

“I do know when legislation gets involved, it turns into a mess,” Medeiros says. “We’re in that mess now and trying to figure out how to invest in this farm to make it more efficient and cut back on labor.”

David Lemstra’s story illustrates the transition faced by many. After searching for a decade, Lemstra and his family relocated from central California, where they had been established for more than 40 years, to South Dakota. Three pivotal factors — feed availability, easier permitting and processing capacity — led them to their new home where they now milk 4,000 cows and supply Agropur.

One benefit Lemstra has discovered in South Dakota is a more favorable labor market.

“Some locals say labor is very hard, but they don’t know how hard it can potentially get,” he says, appreciating the motivated workforce available in the region.

Regulatory Restrictions

Lemstra describes his family’s coordinated departure from the state as “death by 1,000 cuts,” citing the impact of long-standing political and resource management decisions. California’s overtime labor rule stands out as a considerable obstacle, especially when compared to South Dakota’s business-friendly environment.

As California continues to confront these pressing issues, the resilience and adaptability of its dairy producers are noteworthy. While some, such as Lemstra, found new horizons elsewhere, efforts are ongoing to streamline regulatory processes and stabilize one of the state’s most crucial agricultural sectors.

Mike Boudreaux, Tulare County Sheriff, who also spoke at the California Dairy Sustainability Conference in Visalia this week, expresses the need for the state and federal government to reduce the regulatory burden, thereby allowing greater industry control.

“Some of the issues many of you are facing, quite frankly, just explodes my mind when it comes to large sustainability, manure and different regulations,” he says. “The state of California and the federal government need to lift and reduce the amount of regulation the state can control for our dairy industry.”

Innovation and Sustainability Efforts

Despite the challenges producers continue to face, the dairy industry is making strides in sustainability. California boasts 238 dairy digester projects, capturing methane to create renewable energy sources and contributing to a reduction in greenhouse gas emissions.

“I’m very proud of the work we’ve been able to do on climate smart agriculture,” Ross says. “I love the fact that 24.3 million metric tons of CO2 equivalent reductions in greenhouse gasses are because of dairy digesters.”

When it comes to Highly Pathogenic Avian Influenza (HPAI), Ross is grateful for how the industry has handled the outbreak that started in September in California, six months after it was first reported in Texas and Kansas. As of late March, HPAI has impacted 755 herds in the state.

The path forward for California’s dairy industry relies on innovative strategies, supportive policies and the continuous perseverance of its producers. As the industry adapts, the focus remains steadfast on ensuring the vitality and sustainability of a sector pivotal to California’s heritage and economy.

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Iowa Secretary of Ag Weighs In on The H5N1 Battle, Vaccine Potential And Trade Sensitivities

Tue, 28 Jan 2025 23:15:24 GMT

Eggs continue to be a hot topic in the news as supplies are down, prices are up – and expected to go even higher – and consumers are understandably concerned.

At the center of the issue, fanning the on-going problem for poultry and dairy producers as well, is the Highly pathogenic H5N1 avian influenza A virus (HPAI H5N1).

AgriTalk Host Chip Flory broached the topic with Iowa Secretary of Agriculture Mike Naig on Tuesday.

At the heart of their conversation was a two-part question – how does the U.S. address the virus and, in the process, prevent any potential negative ramifications on trade?

Naig says the federal government is taking what he described as a three-legged stool approach to addressing the problem in both industries.

He described the three legs of the stool as being USDA’s Animal and Plant Health Inspection Service (APHIS), individual state animal health officials and industry.

“We work very closely with APHIS on this, meaning that they’re the ones that are providing the indemnity payments to producers. They are providing the disposal and cleanup assistance, but they must work in close collaboration with the states and state animal health officials,” Naig says. “And then, of course, you’ve got to have the third leg, which is industry.”

Biosecurity Measures
Naig noted that while the virus hit the poultry industry hard in 2015, it struck even harder in 2024.

“It’s not just in the Midwest or West, it’s been really all across the country now, affecting the egg laying industry, broilers and turkey production,” Naig says.

A significant positive, Naig says, is that biosecurity measures in the poultry industry appear to be preventing farm-to-farm spread. “The industry continues to get high marks for that, which wasn’t the case in 2015, which was so devastating because we didn’t have those strategies in place.”

“I believe, and our experience has been, that our USDA partners in this regard have been very strong,” he adds.

As Naig addressed the three-legged stool approach the U.S. is taking to addressing the virus in dairy, he says the three partners have more work to do.

“Frankly, there’s been a lot of criticism to share around the three legs, if you will, on how states have reacted, or how strongly USDA should have reacted, and what the industry is doing to try to contain that virus. So, I would say on the dairy side of things, it’s a different story (than in poultry). There’s a lot more work that’s yet to be done to even understand how that virus is impacting those (dairy) herds.”

What Is The Role For Vaccines?
Flory asked Sec. Nagy whether he believes a vaccine could be part of the solution to the virus or whether that would set up too many trade barriers. Flory also asked whether the virus is stable enough for a long enough period of time for a vaccine to be developed that would work effectively.

Both are questions the U.S. is grappling with as it tries to get ahead of the virus in dairy and poultry.

Earlier this month, Reuters reported the U.S. will rebuild a stockpile of avian influenza vaccines for poultry that match the strain of the virus circulating in commercial flocks and wild birds, citing the Department of Agriculture.

Naig told Flory that he believes a vaccine could be developed, with regard to poultry specifically, and its use negotiated into trade agreements.

“Those are challenges, and yet those are things that can be worked on and can be done, but it’s not easily done. I would want to put a flag there,” Naig says.

“I’m supportive of developing … we should try to figure out whether this can be an effective tool. If you’re in the broiler business or if you’re in the turkey meat business or if you’re in the egg business or maybe you’re in the genetics business, those are very different in terms of how you view that vaccine.”

Naig explains part of the different viewpoints on vaccine use have to do with the difference between poultry business segments.

“We need to recognize that those sectors are different in how they’ll view and potentially use a vaccine,” Naig says.

“Don’t treat them all the same. It’ll make way more sense for some than others.”

Naig did not weigh in on vaccine development for the dairy industry specifically.

The full conversation between Naig and Flory on AgriTalk is available below.

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