Tag Archives: Dairy

On the other side of the election.

How has the dollar been hit by the election?
How is all the waiting affecting the trade market?
2012 was the last inflationary area
Will ethanol margins remain tight?
The Boy that called wolf
Workings of the dairy prices
Supply demand mismatch on beef demand

During a virtual annual meeting of dairy industry groups, Dairy Management Incorporated reflected on strategically adjusting business plans due to the impacts of COVID-19. They told farmers and industry representatives that this year’s results are due to industry unity, agility, and relentless relationship building.

“The systems farmers have put in place work, and in normal times, we celebrate those successes,” said Barbara O’Brien, President of DMI. “What the last seven months have proven is that it also works in difficult times, frankly times we couldn’t have imagined.”

The virtual meeting included representatives from the United Dairy Industry Association, National Dairy Promotion, and Research Board, and the National Milk Producers Federation. DMI CEO Tom Gallagher said one of the highlights of the USDA per capita report shows consumption reached 653 pounds per person in 2019, a 60-year high for dairy.

“This comes as a shock to a lot of people who say dairy is dead,” Gallagher says. “They think about the decline in fluid milk, but they don’t think about all of the other areas that have grown exponentially.”

Gallagher credits these successes to farmers who took leadership in creating the dairy promotion program through a Congressional act in 1983. Per capita growth since that year has increased by 80 pounds.

Senate Ag Committee Member Debbie Stabenow is leading a group of 15 senators asking Ag Secretary Sonny Perdue to reverse a decision that excluded dairy farmers from getting coronavirus aid for losses from meat produced from breeding animals.

The Hagstrom Report says the senators point out that losses from meat produced from breeding animals were included in the first Coronavirus Food Assistance Program, but not in the second, which is known as CFAP 2. “This change will affect the livestock industry and will be particularly harmful to dairy farmers, who often operate at extremely tight margins,” the senators wrote in the letter. “The decision is even more troubling considering that USDA clearly has sufficient resources to cover these losses.”

Additionally, they say the move would avoid confusing farmers. “It will be less complicated for both USDA and livestock farmers to cover all livestock and avoid confusion about what animals are covered or excluded,” they add. The senators say dairy farmers were struggling with prolonged market uncertainty, unfair trade practices, and the Administration’s “chaotic trade policies” long before COVID-19 hit.

Considering the industry’s tight margins, the decision to exclude dairy farm losses related to meat production will be a significant blow.

The National Milk Producers Federation urges all dairy farmers to sign up for the Dairy Margin Coverage Program. Enrollment in the program administered by the Department of Agriculture opened Tuesday.

NMPF cites the ongoing COVID-19 crisis, and the expectation of volatile dairy margins in the next year, in the need for DMC protection. NMPF President and CEO Jim Mulhern says, “Coronavirus-related volatility in dairy markets is expected to continue well into 2021, with DMC payments a possibility.” DMC, the main risk-protection tool for dairy farmers enacted in the 2018 farm bill, is designed to promote stable revenues and protect against financial catastrophe on some or all of a farmer’s milk.

Despite forecasts in late 2019 predicting that DMC assistance would not be needed by farmers in 2020, margins instead fell to their lowest levels in more than a decade in the first half of this year, triggering payments that kept many dairies afloat. NMPF says DMC coverage offers certainty in times of need, allowing for better financial planning and faster payment when necessary.

The Innovation Center for U.S. Dairy Monday unveiled the Net Zero Initiative. The industry-wide effort will help U.S. dairy farms of all sizes and geographies implement new technologies and adopt economically viable practices.

The initiative is a critical component of U.S. dairy’s environmental stewardship goals. The plan is endorsed by dairy industry leaders and farmers to achieve carbon neutrality, optimized water usage and improved water quality by 2050. The organization also announced a key milestone on its journey toward carbon neutrality, an up to $10 million commitment and multi-year partnership with Nestlé to support the initiative and scale access to environmental practices and resources on U.S. farms.

The goals include becoming carbon neutral or better, optimize water use while maximizing recycling, and improve water quality by optimizing utilization of manure and nutrients. Officials say dairy companies and farms are already contributing to the goals in individual ways, and the dairy community will continue those efforts through the U.S. Dairy Stewardship Commitment.