Industry News

Interest rates on many types of agricultural loans in the nation’s midsection were already headed lower before the Federal Reserve’s Open Market Committee (FMOC) adjusted its benchmark lending rate lower in late July. In the first reduction since 2008, the FMOC dropped the rate to 2% from 2.25%, or 25 basis points from the previous level, and also left the door open to future cuts in 2019.

Digest Highlights

• Milk featured on fewer than 50% of top 200 restaurant chains’ kids’ menus
• Cover crop, prevent plant acreage jumps
• Non-real estate farm loans getting bigger, with longer terms
• Wisconsin dairy generates $45.6 billion in economic impact
• Idaho Milk Products expands Jerome facility
• Penn State Extension offers online ’milking practices’ course

The USDA’s latest milk production forecasts for both 2019 and 2020 were reduced, based on expectations of a smaller dairy herd and slower growth in milk per cow. As a result, price projections were increased slightly for 2019, with further improvement in 2020, based on USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released Aug. 12.

Last year brought no new entries to Rabobank’s list of the 2019 “Global Dairy Top 20” companies, although there was some reshuffling due to lower commodity prices, adverse weather in some key exporting regions and shifts in currency strength. Mergers and acquisitions were again the avenue for growth, according to the report’s authors, Rabobank dairy analyst Saskia van Battum and global dairy strategist Mary Ledman.

Digest Highlights

• Dairy Margin Coverage payments near $200 million
• Global Dairy Trade index falls
• Dairy margins end July stronger
• Chapter 12 bankruptcy filings up; bill raises debt limit
• Kentucky Dairy Development Council offers DMC premium incentive
• CMAB seeks to accelerate fluid milk innovation
• PMMB releases dairy producer survey results
• New York dairy promotion order board seeks proposals
• Wonder Why Farm cited by University of Vermont Extension
• Next week: Crop production, WASDE updates

With improving milk prices, average prices paid for dairy replacement cows came off the floor, based on the USDA’s quarterly estimates.