2023 Special Orders of Business
Fair, open, and competitive markets are central to the health and wellbeing of the American economy and our democracy. For decades, the markets that farmers buy from and sell to, and the supply chains and infrastructure they rely on, have become increasingly consolidated and uncompetitive. There are high levels of corporate concentration and evidence of anticompetitive practices in sectors including meatpacking, seeds, crop protection, fertilizer, rail transportation, food retail, food distribution, and farm equipment manufacturing and repair.
Corporate monopolies limit farmers’ and ranchers’ choices, pay them less, and charge them more. Markets dominated by monopolies lack resilience and are susceptible to disruptions, harming family farmers, ranchers, farmworkers, consumers, and our communities. Corporate monopolies spanning many sectors of our nation’s economy have decimated small family businesses, especially in rural areas.
Additionally, the farmer’s share of every dollar consumers spend on food has fallen from 50 cents in 1952 to less than 14 cents today. All the while, consumers are facing inflated prices for food at the grocery store.
National Farmers Union (NFU) launched the Fairness for Farmers campaign to respond to these challenges. The campaign is a nationwide effort to give voice to farmers, ranchers, consumers, and communities being harmed by economic concentration and corporate monopolies. Fairness for Farmers calls for the revival of strong antitrust and competition law enforcement, the breakup of corporate monopolies, and the creation of new and diverse market opportunities for farmers, ranchers, and consumers.
To address the challenges outlined above, and to advance the efforts of NFU’s Fairness for Farmers campaign, we support:
- Ensuring the next farm bill includes provisions that increase competition and fairness in agricultural markets;
- Legislation that would strengthen antitrust and competition laws, reverse the trend of corporate consolidation, and protect family farmers and ranchers from anticompetitive practices;
- Legislation to bring greater transparency and price discovery to cattle markets;
- Truthful and transparent labeling of agricultural products, including reauthorization and full implementation of mandatory country-of-origin (COOL) labeling, and support for “Product of USA” or “Made in the USA” label claims on meat, poultry, and egg products, only when they are derived from animals born, raised, processed, and slaughtered in the United States;
- Requiring Livestock Mandatory Reporting (LMR) Act data to be consistently available;
- Robust enforcement of the Packers and Stockyards Act (P&S Act);
- The establishment and robust funding of an “Office of the Special Investigator for Competition Matters” at the U.S. Department of Agriculture (USDA) to aid in vigorous P&S Act enforcement;
- Interagency coordination between the Department of Justice (DOJ), Federal Trade Commission (FTC), and USDA to ensure our nation’s federal antitrust and pro-competition laws are enforced to the maximum extent possible;
- The blocking of harmful mergers throughout the food value chain including the acquisition of Albertsons by Kroger to prevent further consolidation within the retail grocery industry;
- Farmers having the right to repair their own equipment, because repair restrictions imposed by equipment manufacturers violates antitrust law, leads to increased costs and repair delays for farmers, and reduces repair choice;
- Spurring the development and expansion of diverse, local, and/or regional market opportunities throughout farm and food supply chains, including but not limited to production, processing, distribution, retail, and storage; and
- Establishing within USDA a program like the Fair Food Program, assuring a collaborative process between farmers and workers on farms to deliver certifiable, market-rewarded, and market-enforced payment on products to benefit wages, profits, and livelihoods of workers and of farmers.
The current farm bill expires on September 30, 2023, and our farm policy is due for important reforms. Farm bill reauthorizations serve as a periodic opportunity to debate and consider the policies that shape our farm economy, food system, and communities. Family farmers, ranchers, consumers, and our communities all benefit from a strong and resilient farm and food system. The farm bill helps to ensure our rural and agricultural economies thrive.
The farm economy is cyclical, and commodity price and input cost volatility are among the chief reasons that family farmers and ranchers are forced out of business. Farm bills should be written with tough times in mind so that programs serve as a safety net. Furthermore, farm bills work best when they are forward-looking; lawmakers should ensure the next farm bill anticipates future needs. These needs include strengthening farm bill conservation programs, which play a critical role in helping farmers implement practices that fight climate change, build soil health, and increase resilience. The farm bill is also a food bill. The nutrition title is key to reducing hunger and poverty, and improving food and nutrition security.
Farm bill programs are primarily implemented by the U.S. Department of Agriculture (USDA). In 2022, USDA had 5,300 fewer staff than in January 2017. Staffing shortfalls impede program implementation and must be rectified.
The following policies and provisions should be included in the 2023 Farm Bill.
- Advance NFU’s Fairness for Farmers campaign priorities in the 2023 Farm Bill. Reforms should include:
- A dedicated competition title;
- Bolstering cattle market price discovery and transparency;
- Creating the “Office of the Special Investigator for Competition Matters” at USDA to strengthen enforcement of the Packers & Stockyards Act (P&S Act);
- Strengthening of P&S Act rules to better protect livestock producers from anticompetitive practices;
- Reinstating mandatory country-of-origin labeling (COOL);
- Improving the Livestock Mandatory Reporting (LMR) Act to ensure data is consistently and fully available;
- Reforming checkoff programs to be producer controlled and regularly reviewed; and
- Spurring the development and expansion of diverse, local, and/or regional market opportunities through farm and food supply chains, including production, processing, distribution, retail, and storage.
- Maintain and improve the farm safety net through the commodity and crop insurance titles by:
- Increasing loan rates and other price-based triggers to reflect higher commodity prices and input costs;
- Allowing for a voluntary base acres and yield update;
- Making risk management products more accessible for specialty crop producers and diverse cropping systems;
- Maintaining livestock risk protection (LRP) and authorizing a new program, similar to LRP, that allows for market risk protection for crops; and
- Establishing a dual enrollment option that allows farmers to receive the higher of the Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) calculated payment.
- Address climate change, strengthen conservation programs, and expand renewable energy opportunities, including by:
- Increasing funding for voluntary, incentive-based conservation programs and conservation technical assistance;
- Expanding incentives for farmers to adopt climate mitigation and adaptation practices that build on-farm resilience and reduce emissions;
- Providing crop insurance discounts to farmers for planting cover crops or for using other conservation practices that increase resiliency or decrease risk;
- Building on programs that support biofuels infrastructure development;
- Supporting and improving the Rural Energy for America Program (REAP)
- Ensuring a strong Conservation Reserve Program (CRP) by maintaining the current CRP rental rate calculation and increasing Grassland CRP minimum enrollment; and
- Allowing annual crop strips left unharvested to qualify as buffer strips.
- Expand and enhance permanent disaster assistance programs by:
- Reducing implementation delays and equitably and appropriately targeting support to farmers and ranchers who have suffered losses;
- Creating a “conservation disaster fund” that automatically triggers conservation program eligibility for producers that qualify for disaster assistance; and
- Establishing a permanent disaster assistance program that supplements crop insurance indemnities when widespread disasters occur.
- Strengthen the dairy safety net by:
- Supporting dairy growth management principles to stem the loss of family dairy farms; and
- Strengthening the Dairy Margin Coverage (DMC) program, which, with improvements, can serve as a useful risk management tool.
- Other important policy priorities and reforms include:
- Increasing the overall farm bill baseline and funding;
- Increasing the definition for beginning farmer and rancher from 10 to 15 years;
- Maintaining a strong nutrition title that supports the food and nutrition security of our communities and that increases opportunities for local and regional procurement;
- Strengthening the research title, with a focus on research, outreach, and education to improve on-farm climate mitigation and adaptation;
- Expanding and funding the Farm and Ranch Stress Assistance Network (FRSAN);
- Addressing ongoing staffing shortages at USDA, including staff attrition and inadequate pay for field staff;
- Requiring USDA to take department-wide steps to streamline program applications forms and processes to make its programs more accessible;
- Streamlining access to USDA programs and hiring sufficient staff to service technical and administrative requirements of each program to assure timely, competent, and beneficial participation for family farmers; and
- Include in federal contracting language the means to adjust contract amounts in response to inflationary pressures.
Although milk prices paid to dairy farmers improved in 2022, feed prices and input costs reached record highs reducing dairy farm profitability. Since 1992, the number of US dairy farms has decreased by 79 percent or more than 103,577 farms due to low dairy farm margins. To reduce dairy farm closures and improve the outlook for US dairy farmers, we call on Congress to pass a farmer-led incentive-based milk production growth plan to match milk supply with profitable market demand.
As a result of widespread market concentration and consolidation, dairy farmers have little if any choice about where to ship their milk further depressing milk prices paid due to a lack of competition. The federal milk marketing order system was set up in the 1930s to establish minimum prices paid to dairy farmers and guard against non-competitive and predatory practices of milk handlers. Prior to the establishment of the federal milk marketing order system, dairy farmers around the country were at the mercy of milk handlers who controlled milk prices paid. Because milk is a highly perishable product that must leave the farm each day, federal milk market order regulations are vital to ensure dairy farmers are paid a minimum price for the milk they produce.
The last federal order hearing to consider major changes in the pricing formulas occurred 15 years ago and the dairy market has grown dramatically more concentrated since then, making federal order minimum milk pricing more important than ever before. Dairy farmers do not have the ability to change milk handlers given the level of consolidation and concentration that exists today. Therefore, minimum milk prices must ensure that dairy farmers are paid a price that reflects the value of all milk and dairy products sold to sustain dairy farmers and foster a secure food supply for consumers.
During the 2018 farm bill, Congress made a change in the Class I formula that led to more than $1 billion in losses to dairy farmers nationwide. The losses that resulted from the Class I price change demonstrate that amendments to federal order pricing should be made through the 12-step federal order hearing process, not through legislation. However, to immediately restore the Class I formula, we call on Congress to pass legislation to return to the higher value of Class III or Class IV instead of the average plus 74 cents.
Although the federal order system is set up to maximize dairy producer participation in the process, it is difficult if not impossible for dairy farmers to take a public position in opposition to that of their milk handler. Federal order hearings are made up of legions of lawyers and economists representing dairy processor interests that far outnumber dairy farmers and the organizations that represent them. For this reason, it is imperative that USDA convey added weight to positions taken by the limited number of dairy farmers willing to participate in public hearings.
NFU opposes the call for a federal order hearing, but if a hearing is granted by the United States Department of Agriculture (USDA), NFU supports:
- Establishing a price discovery formula at the producer level through a growth management program that incentivizes matching production with market demand;
- Reforming all Class formulas to reflect the value and volume of all dairy products sold in the market today as current milk pricing formulas fail to reflect the actual market value of dairy products, particularly higher moisture, and higher value cheese products;
- Requiring mandatory participation of processors in an audited National Agricultural Statistics Service (NASS) survey and in an audited cold storage report; and
- Establishing a national make allowance that is adjustable to reflect the difference between milk prices and the producer’s cost of production. This allowance should be generated from the market, not deducted from the established price through end-product pricing.