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Weekly Digest: Hay stocks third lowest since 1977

Progressive Dairy Editor Dave Natzke Published on 19 January 2022

Digest Highlights

Hay stocks third lowest since 1977

All hay stored on U.S. farms as of Dec. 1, 2021, totaled about 79 million tons, down 6% from Dec. 1, 2020, and the third-lowest on-farm hay inventory for that date since 1977, according to a semiannual hay stocks report from the USDA.

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Among the 24 “major” dairy states listed by the USDA, dry hay inventories were down 953,000 tons (2%) from Dec. 1, 2020.

Compared to a year earlier, differences varied widely by state and geography. Twelve dairy states had had larger hay inventories, while 10 had smaller stocks stored on farms. Kansas and Washington were unchanged. Those with largest hay inventory increases compared to a year earlier were Texas, up 1.8 million tons (28%), followed by New York and Iowa, up 700,000 (70%) and 690,000 (28%) tons, respectively. Other states with larger inventories included Wisconsin, Colorado, Michigan, Indiana, Ohio, Georgia, New Mexico, Pennsylvania and Vermont.

Decliners were led by South Dakota, where hay stocks were estimated to be down by 2.5 million tons (43%) from the year before, followed by Minnesota and Oregon, down 780,000 (35%) and 680,000 tons (42%), respectively. Others with smaller inventories included California (-27%), Virginia, Utah, Idaho, Arizona, Florida and Illinois.

GDT price index jumps

The second Global Dairy Trade (GDT) auction of the new year saw dairy prices move higher, with the overall index up 4.6%. Established in 2008, the global dairy trading platform hosted its 300th auction on Jan. 18. Dairy product prices were:

  • Skim milk powder was up 5% to $3,963 per metric ton (MT, or about 2,205 pounds).
  • Whole milk powder was up 5.6% to $4,082 per MT.
  • Butter was up 5% to $6,158 per MT.
  • Cheddar cheese was up 1.1% to $5,546 per MT.
  • Anhydrous milk fat was up 0.6% to $6,720 per MT.

The GDT platform offers dairy products from six global companies: Fonterra (New Zealand), Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland). The next GDT auction is Feb. 1.

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Organic Valley adding organic dairies in Northeast

Organic dairy organizations continue to provide markets for some Northeast producers facing termination of their milk supply contracts.

Danone North America, owner of Horizon Organic, has notified 89 organic dairies in four states that milk supply contracts will be terminated in February 2023. In addition, Maple Hill Creamery announced the cancellation of contracts for an additional 46 farms.

Recently, a Northeast Organic Family Farm Partnership was launched to provide markets for organic dairy producers in the Northeast. (Read: Northeast organic partnership launched.)

This week, farmer-owned cooperative Organic Valley announced it added five small, organic family farms formerly supplying milk to Maple Hill and would take additional steps in a yearlong campaign to support organic dairy farms in the Northeast.

Organic Valley representatives have been visiting other Northeast farms that face lost markets. To join, organic farms are required to meet the co-op's animal care, quality standards and pasture expectations.

“We want to help family farms in the region throughout 2022 by providing membership options,” said Bob Kirchoff, Organic Valley CEO.

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Organic Valley is also joining other organizations to offer recommendations for building a future for small, organic family farms though participation in the Northeast Dairy Task Force.

December retail dairy sales mixed

High levels of COVID-19 cases, supply chain challenges and inflation continued to impact food purchasing practices as 2021 came to a close, according to a monthly update from the International Dairy Deli Bakery Association (IDDBA).

“As we enter 2022, it is clear that disruptive forces will continue to affect the retail marketplace,” said Jeremy Johnson, IDDBA vice president of education.

Focusing on the retail grocery store dairy department, purchasing patterns followed October and November. Retail dairy sales (value basis) exceeded year-earlier levels, up 2.1% from December 2020 and up 11.7% from December 2019. However, sales performance compared to a year earlier remained mixed at the category level.

Sales of yogurt, cream cheese and dairy desserts were up in terms of value, unit sales and total volume. The value of December 2021 fluid milk sales was up 0.3%, but both unit and total volume of sales were down 3.9% and 5.3%, respectively. Sales of natural cheese and butter were down slightly in all three measures.

The value of December deli cheese sales exhibited a big increase over November levels, underscoring the importance of deli cheese trays at various winter holiday events. With an increase of 3.1% in the average price per pound in December for deli cheese, prices grew far less than in most other categories. On a unit sales and volume basis, however, deli cheese sales were virtually flat compared to year ago. Compared to the pre-pandemic normal, 9.8% more deli cheese pounds were sold in December 2021 versus 2019.

Other highlights of the report indicated:

  • While 94% of primary shoppers noticed inflationary impacts on food prices, higher prices for milk were cited by about 59%. In response to inflationary pressures on food prices, more shoppers said they looked for sales specials, purchased private brands or even visited other stores.

  • Meals remained home-centric in December. Based on an Information Resources Inc. (IRI) primary shopper survey, the share of meals prepared at home remained at 80%.

What’s ahead? While some areas did better than others, dairy remained a sales powerhouse and that strength is expected to continue, said Jessica Ives, IDDBA professional development coordinator. Marketplace disruption is likely to continue through the first quarter of 2022 at a minimum.

November 2021 fluid sales reviewed

Here’s an update on U.S. fluid milk sales data from the USDA Agricultural Marketing Service for November 2021.

  • Total sales: November 2021 sales of packaged fluid milk products totaled about 3.8 billion pounds, down about 0.9% from the same month a year earlier. At 40.4 billion pounds, year-to-date (January-November 2021) sales of all fluid products were down 4.2%.

  • Conventional products: October sales totaled 3.57 billion pounds, down 0.8% from November 2020. Year-to-date sales of conventional products were down 4.3% at almost 37.9 billion pounds.

  • Organic products: Monthly sales totaled 230 million pounds, down 1.8% from a year earlier. At 2.56 billion pounds, 2021 year-to-date sales of organic products were down about 2.5%. Organic represented about 6.1% total fluid product sales in November and 6.3% of total fluid product sales in January-November 2021.

The U.S. figures are based on consumption of fluid milk products in Federal Milk Marketing Order (FMMO) areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.

World Dairy Expo accepting nominations for 2022 awards

Nominations for the 2022 World Dairy Expo’s Dairy Producer of the Year, Industry Person of the Year and International Person of the Year are being accepted through Feb. 1. The awards will be presented during the 55th World Dairy Expo, set for Oct. 2-7, in Madison, Wisconsin.

Organizations, academic staff, producers and others involved in the dairy industry are encouraged to nominate individuals in three categories:

  • The Dairy Producer of the Year award is presented to an active dairy producer whose primary source of income is derived from his or her dairy enterprise.

  • The Industry Person of the Year award is presented in recognition of an individual’s excellence in research, development, education, marketing, manufacturing or other fields that provides goods or services to the dairy industry.

  • The International Person of the Year award is presented to an individual living primarily outside of the U.S. who has contributed to research, development, education, marketing, manufacturing or other fields in the international dairy industry.

The nomination form and additional information are available on the World Dairy Expo website or by contacting the expo office via phone (608) 224-6455 or email.  end mark

Dave Natzke
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