Dairy margins in the red

Class III milk prices have slipped into the high $15 level, causing problems for the entire dairy industry. AgResource Company president Dan Basse said it is a demand issue: “It’s really a problem in the whey market; China has not shown up for whey and that’s been leaning on price.” European butter imports into the United States have also surged. The combination has brought milk prices to their lowest level in a year and a half. Basse said the dairy industry is not in a good place. “The big problem would be if feed prices rocket to the upside due to a weather problem,” Basse said. “The only helpful aspect is that the price of beef is at a record high. That’s giving the cull cow market some opportunity.”

USDA drops milk production forecast
According to the June U.S. Department of Agriculture supply demand report, the 2023 milk production forecast is down from the previous month due to slower than previously expected growth in the amount of milk per cow. The annual production estimate is 228.4 billion pounds, down 200 million pounds from the May report. The forecast for 2024 milk production was left unchanged.

Dairy industry quantifies its economic impact
The International Dairy Food Association has released its latest economic impact study. The report said the U.S. dairy industry’s economic impact totaled nearly $794 billion and is responsible for 3.2 million jobs. An additional 60,000 new jobs were created in the past two years.

Changes proposed for DMC update
Improvements are being recommended for the Dairy Margin Coverage program in a bill titled the Dairy Farm Resiliency Act. This bill would require the USDA to update the production history calculation every five years and be based on the higher production year out of the last three years. The proposal also increases the Tier 1 threshold from 5 million pounds to 6 million pounds to reflect how the average herd size has risen since the 2018 farm bill. New York Republican Marc Molinaro introduced this bill.

Smith seeks to maintain milk options
Minnesota Sen. Tina Smith and Iowa Sen. Joni Ernst have sent a letter to Agriculture Secretary Tom Vilsack, urging USDA to continue to allow non-fat and low-fat flavored milk in schools. The letter said a decision to remove flavored milk could “have devastating effects on student’s consumption of essential nutrients and their ability to learn in the classroom.”

Wolf delisting bill introduced
Legislation has been introduced in the Senate to delist the gray wolf from the endangered species list. This plan would create a region-specific plan to delist the wolf in Minnesota, Wisconsin and Michigan’s Upper Peninsula. It would create an advisory committee to create the final delisting rule for the region.

Dairy leaders travel to Singapore
A delegation of U.S. dairy leaders traveled to Southeast Asia to visit the U.S. Center for Dairy Excellence. This Singapore-based education hub opened in 2020, but the in-person visit was delayed for three years due to the pandemic. Southeast Asia is the second largest market for U.S. dairy exports on a volume and value basis. The center is used to educate potential buyers about U.S. dairy ingredients through training and customer engagement. There were a dozen dairy leaders on the trip, including Charles Krause of Buffalo, Minnesota.

Dairy innovation grants available
USDA is making $23 million in grant funds available for the Dairy Business Innovation program. This program supports the expansion of processing capacity, on-farm improvements and technical assistance for dairy farmers. The application process continues until Aug. 10.

Dealing with difficult times
Farmers have always faced issues beyond their control. Rural mental health specialist Monica McConkey said that uncertainty is the norm in agriculture. “It’s not like they can slap a price tag on their product and that is what they’re going to get for it, and they can’t dial in the weather they want,” McConkey said. The current input costs and the volatile commodity markets are among the current challenges, increasing anxiety for farm families. The Minnesota Department of Agriculture hosted a webinar on dealing with difficult times. Ted Matthews, who is a rural mental health specialist, believes in the value of communication. “The more we don’t talk about those things, the more we pull back, and the more we pull back, the worse things get, so getting people to talk about what’s going on and getting people from point A to point B becomes really, really important,” Matthews said. MDA has resources available on its website to help farmers deal with stress and mental wellness.

Doud to succeed Mulhern at NMPF
The National Milk Producers Federation board of directors has unanimously voted to name Gregg Doud as its next president and CEO. Doud will succeed Jim Mulhern, who is retiring at the end of the year. Doud was the chief agricultural trade negotiator during the Trump administration. Doud is now with Aimpoint Research. Previously, the Kansas native was president of the Commodity Markets Council, chief economist for the National Cattlemen’s Beef Association and a member of the Senate Agriculture Committee professional staff.

Wagner moves to IDFA
The International Dairy Foods Association has named Roberta Wagner as its senior vice president of regulatory and scientific affairs. Wagner succeeds Joseph Scimeca, who announced his retirement earlier this year. Wagner comes to IDFA from Consumer Brands Association, formerly known as the Grocery Manufacturers Association.

Anti-BST activist passes
Longtime activist, Ronnie Cummins, 76, has died. Cummins and his wife, Rose Welch, founded the Organic Consumers Association in Finland, Minnesota, in 1998. Before that, Cummins worked with environmental activist Jeremy Rifkin to oppose recombinant bovine somatotropin. He continued his battle against BST after establishing the Organic Consumers Association. In 2008, Cummins was quoted as saying BST “is bad for dairy cows, literally burning them out in three or four years.” Biotechnology was another frequent target for Cummins.

Trivia challenge
It takes 10 pounds of milk to make 1 pound of cheese. That answers our last trivia question. For this week’s trivia, how many pounds of whole milk are needed to produce 1 pound of ice cream? We will have the answer in our next edition of Dairy Star.
    Don Wick is owner/broadcaster for the Red River Farm Network, based in Grand Forks, North Dakota. Wick has been recognized as the National Farm Broadcaster of the Year and served as president of the National Association of Farm Broadcasting. Don and his wife, Kolleen, have two adult sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.