Dairy Risk Management Act of 2018

To amend the Agricultural Act of 2014 to provide support for dairy producers, and for other purposes. 1. Short title This Act may be cited as the Dairy Risk Management Act of 2018 2. Dairy risk management program for dairy producers (a) Review of data used in calculation of average feed cost Not later than 60 days after the date of the enactment of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report evaluating the extent to which the average cost of feed used by a dairy operation to produce a hundredweight of milk calculated by the Secretary as required by section 1402(a) of the Agricultural Act of 2014 ( 7 U.S.C. 9052(a) (b) Corn silage report Not later than 1 year after the date of the enactment of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report detailing the costs incurred by dairy operations in the use of corn silage as feed, and the difference between the feed cost of corn silage and the feed cost of corn. (c) Collection of alfalfa hay data Not later than 120 days after the date of the enactment of this Act, the Secretary of Agriculture, acting through the National Agricultural Statistics Service, shall revise monthly price survey reports to include prices for high-quality alfalfa hay in the top five milk producing States, as measured by volume of milk produced during the previous month. (d) Registration of multiproducer dairy operations Section 1404(b) of the Agricultural Act of 2014 ( 7 U.S.C. 9054(b) (1) in paragraph (3), by striking If Subject to paragraph (5), if (2) by adding at the end the following new paragraph: (5) Certain multiproducer dairy operation exclusions (A) Exclusion of low-percentage owners To promote administrative efficiency in the dairy risk management program, a multiproducer dairy operation covered by paragraph (3) may elect, at the option of the multiproducer dairy operation, to exclude information from the registration process regarding any individual owner of the multiproducer dairy operation that— (i) holds less than a five percent ownership interest in the multiproducer dairy operation; or (ii) is entitled to less than five percent of the income, revenue, profit, gain, loss, expenditure, deduction, or credit of the multiproducer dairy operation for any given year. (B) Effect of exclusion on dairy risk management payments To the extent that an individual owner of a multiproducer dairy operation is excluded under subparagraph (A) from the registration of the multiproducer dairy operation, any dairy risk management payment made to the multiproducer dairy operation shall be reduced by an amount equal to the greater of the following: (i) The amount determined by multiplying the dairy risk management payment otherwise determined under section 1406 by the total percentage of ownership interests represented by the excluded owners. (ii) The amount determined by multiplying the dairy risk management payment otherwise determined under section 1406 by the total percentage of the income, revenue, profit, gain, loss, expenditure, deduction, or credit of the multiproducer dairy operation represented by the excluded owners. . (e) Relation to livestock gross margin for dairy program Section 1404(d) of the Agricultural Act of 2014 ( 7 U.S.C. 9054(d) (1) by striking but not both but not on the same production (2) by striking or the and the (3) by striking margin protection program dairy risk management program (f) Production history of participating dairy operators (1) Continued use of prior dairy operation production history Section 1405(a)(1) of the Agricultural Act of 2014 ( 7 U.S.C. 9055(a)(1) The production history of a participating dairy operation shall continue to be based on annual milk marketings during the 2011, 2012, or 2013 calendar year notwithstanding the operation of the dairy risk management program through 2023. (2) Adjustment Section 1405(a) of the Agricultural Act of 2014 ( 7 U.S.C. 9055(a) (A) in paragraph (2), by striking In subsequent years In the subsequent calendar years ending before January 1, 2019 (B) in paragraph (3), by inserting , as applicable paragraph (2) (3) Limitation on changes to business structure Section 1405 of the Agricultural Act of 2014 ( 7 U.S.C. 9055 (d) Limitation on changes to business structure The Secretary may not make dairy risk management payments to a participating dairy operation if the Secretary determines that the participating dairy operation has reorganized the structure of such operation solely for the purpose of qualifying as a new operation under subsection (b). . (g) Dairy risk management payments (1) Election of coverage level threshold and coverage percentage Section 1406 of the Agricultural Act of 2014 ( 7 U.S.C. 9056 (A) in subsection (a), by striking annually (B) by adding at the end the following new subsection: (d) Deadline for election; duration Not later than 90 days after the date of the enactment of this subsection, each participating dairy operation shall elect a coverage level threshold under subsection (a)(1) and a coverage percentage under subsection (a)(2) to be used to determine dairy risk management payments. This election shall remain in effect for the participating dairy operation for the duration of the dairy risk management program, as specified in section 1409. . (2) Additional coverage level thresholds for certain producers Section 1406(a)(1) of the Agricultural Act of 2014 ( 7 U.S.C. 9056(a)(1) or $8.00 (and in the case of production subject to premiums under section 1407(b), also $8.50 or $9.00) (3) Election of production history coverage percentage Section 1406(a)(2) of the Agricultural Act of 2014 ( 7 U.S.C. 9056(a)(2) beginning with 25 percent and not exceeding but not to exceed (h) Premiums for participation in dairy risk management program (1) Premium per hundredweight for first 5 million pounds of production Section 1407(b) of the Agricultural Act of 2014 ( 7 U.S.C. 9057(b) (A) by striking paragraph (2) and inserting the following new paragraph: (2) Producer premiums The following annual premiums apply: Coverage Level Premium per Cwt. $4.00 None $4.50 $0.002 $5.00 $0.005 $5.50 $0.008 $6.00 $0.010 $6.50 $0.017 $7.00 $0.041 $7.50 $0.057 $8.00 $0.090 $8.50 $0.120 $9.00 $0.170 ; and (B) by striking paragraph (3). (2) Technical correction Section 1407(d) of the Agricultural Act of 2014 ( 7 U.S.C. 9057(d) Time for Method of (i) Conforming amendments related to program name (1) Heading The heading of part I of subtitle D of title I of the Agricultural Act of 2014 ( Public Law 113–79 I Dairy Risk Management Program for Dairy Producers . (2) Definitions Section 1401 of the Agricultural Act of 2014 ( 7 U.S.C. 9051 (A) by striking paragraphs (5) and (6) and inserting the following new paragraphs: (5) Dairy risk management program The terms dairy risk management program program (6) Dairy risk management payment The term dairy risk management payment ; and (B) in paragraphs (7) and (8), by striking margin protection (3) Calculation of Actual Dairy Production Margin Section 1402(b)(1) of the Agricultural Act of 2014 ( 7 U.S.C. 9052(b)(1) margin protection dairy risk management (4) Program operation Section 1403 of the Agricultural Act of 2014 ( 7 U.S.C. 9053 (A) in the section heading, by striking ESTABLISHMENT OF MARGIN PROTECTION DAIRY RISK MANAGEMENT (B) by striking Not later than September 1, 2014, the Secretary shall establish and administer a margin protection program The Secretary shall continue to administer a dairy risk management program (C) by striking margin protection payment dairy risk management payment (5) Participation Section 1404 of the Agricultural Act of 2014 ( 7 U.S.C. 9054 (A) in the section heading, by striking MARGIN PROTECTION (B) in subsection (a), by striking margin protection program to receive margin protection payments dairy risk management program to receive dairy risk management payments (C) in subsections (b) and (c), by striking margin protection (6) Production history Section 1405 of the Agricultural Act of 2014 ( 7 U.S.C. 9055 (A) in subsection (a)(1)— (i) by striking margin protection program dairy risk management program (ii) by striking margin protection (B) in subsection (c), by striking margin protection (7) Payments Section 1406 of the Agricultural Act of 2014 ( 7 U.S.C. 9056 (A) in the section heading, by striking MARGIN PROTECTION DAIRY RISK MANAGEMENT (B) by striking margin protection dairy risk management (C) in the heading of subsection (c), by striking Margin Protection (8) Premiums Section 1407 of the Agricultural Act of 2014 ( 7 U.S.C. 9057 (A) in the section heading, by striking MARGIN PROTECTION DAIRY RISK MANAGEMENT (B) in subsection (a), by striking margin protection program dairy risk management program (C) in subsection (e), by striking margin protection (9) Penalties Section 1408 of the Agricultural Act of 2014 ( 7 U.S.C. 9058 margin protection dairy risk management (10) Administration and enforcement Section 1410 of the Agricultural Act of 2014 ( 7 U.S.C. 9060 margin protection dairy risk management (j) Effective date The amendments made by this section shall take effect 60 days after the date of the enactment of this Act. (k) Duration Section 1409 of the Agricultural Act of 2014 ( 7 U.S.C. 9059 (1) by striking margin protection dairy risk management (2) by striking 2018 2023 3. Class I skim milk price (a) Class I skim milk price Section 8c(5)(A) of the Agricultural Adjustment Act ( 7 U.S.C. 608c(5)(A) Throughout the 2-year period beginning on the effective date of this sentence (and subsequent to such 2-year period unless modified by amendment to the order involved), for purposes of determining prices for milk of the highest use classification, the Class I skim milk price per hundredweight specified in section 1000.50(b) of title 7, Code of Federal Regulations (or successor regulation), shall be the sum of the adjusted Class I differential specified in section 1000.52 of such title 7, plus the adjustment to Class I prices specified in sections 1005.51(b), 1006.51(b), and 1007.51(b) of such title 7 (or successor regulation), plus the simple average of the advanced pricing factors computed in sections 1000.50(q)(1) and 1000.50(q)(2) of such title 7 (or successor regulation), plus $0.74. (b) Effective date and implementation (1) Effective date The amendment made by subsection (a) shall take effect on the first day of the first month beginning more than 120 days after the date of the enactment of this Act. (2) Implementation Implementation of the amendment made by subsection (a) is not subject to any of the following: (A) The notice and comment provisions of section 553 of title 5, United States Code. (B) The notice and hearing requirements of paragraphs (3) and (4) of section 8c of the Agricultural Adjustment Act ( 7 U.S.C. 608c (C) The order amendment requirements of section 8c(17) of such Act ( 7 U.S.C. 608c(17) (D) A referendum under section 8c(19) of such Act ( 7 U.S.C. 608c(19) 4. Extension of dairy forward pricing program Section 1502(e) of the Food, Conservation, and Energy Act of 2008 ( 7 U.S.C. 8772(e) (1) in paragraph (1), by striking 2018 2023 (2) in paragraph (2), by striking 2021 2026 5. Extension of dairy indemnity program Section 3 of Public Law 90–484 7 U.S.C. 450 l 2018 2023 6. Extension of dairy promotion and research program Section 113(e)(2) of the Dairy Production Stabilization Act of 1983 ( 7 U.S.C. 4504(e)(2) 2018 2023 7. Repeal of dairy product donation program Section 1431 of the Agricultural Act of 2014 ( 7 U.S.C. 9071

Summary: Dairy Risk Management Act of 2018 This bill reauthorizes and modifies the Department of Agriculture (USDA) Margin Protection Program for dairy producers, which is a voluntary program that pays participating dairy operations when a formula-based national margin (the difference between milk prices and feed costs) falls below a producer-selected insured margin. The bill changes the name of the program to the Dairy Risk Management Program and modifies coverage levels and premiums. With respect to other USDA dairy programs, the bill: reauthorizes the Dairy Forward Pricing Program, reauthorizes the Dairy Indemnity Program, reauthorizes the Dairy Promotion and Research Program, and repeals the Dairy Product Donation Program.