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Weekly Digest II: Class III and IV milk prices move to two-year highs; ‘forage crisis’ looms

Progressive Dairyman Editor Dave Natzke Published on 06 June 2019
Dairy on GMA

Digest Highlights

May Class III and IV milk prices move to two-year highs

Federal Milk Marketing Order (FMMO) Class III and Class IV milk prices improved in May, each reaching highs not seen in the latter half of 2017.

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The May 2019 Class III price was $16.38 per hundredweight (cwt), up 42 cents from April 2019 and $1.20 more than May 2018. It’s the highest Class III price since November 2017.

The May Class IV price was $16.29 per cwt, up 57 cents from April and $1.72 more than May 2018. It’s the highest Class IV price since August 2017.

Emergency forage provisions sought in Upper Midwest

Hoping to head off a “rapidly emerging forage crisis for livestock farmers across the Midwest,” a multistate coalition of agricultural organizations submitted a written request to U.S. Ag Secretary Sonny Perdue, seeking approval for emergency provisions allowing the planting and harvesting of forages on prevented plant acres without date restrictions.

The request was submitted by leaders of Farm Bureau organizations in Michigan, Indiana, Wisconsin and Ohio, along with the Michigan Cattlemen’s Association, Dairy Farmers of America and Michigan Milk Producers Association. They cited severe winterkill of alfalfa fields throughout the Upper Midwest, followed by record-breaking rainfall this spring that has prevented the timely harvest of alfalfa fields that did survive.

“Our dairy and livestock farmers are reporting a very serious forage and feed shortage for this year,” said Michigan Farm Bureau (MFB) Livestock Specialist Ernie Birchmeier. “We understand that portions of Michigan and Wisconsin and have severe winterkill damage – as high as 80%, depending on location.”

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Birchmeier said the loss of alfalfa forage and quality is compounded by concerns that delayed corn planting will take a heavy toll on corn-silage tonnage this fall as well. “Forage inventories were already strained before the magnitude of winterkill damage could be determined – delays in timely corn planting only make a bad situation worse,” he said.

While current USDA prevented plant provisions do allow planting and harvesting of potential forage crops, those provisions come with some impractical date requirements for both timely planting, currently Aug. 1, and a harvest date restriction of Nov. 1, which is long after a typical killing frost in the Upper Midwest.

According to MFB National Legislative Counsel John Kran, the request specifically seeks immediate provisions to:

  • Allow planting and normal harvest and grazing of forage crops and/or cover crops on prevent plant acreage for 2019 without penalty and without date restrictions

  • Allow harvest and grazing of forages on Conservation Reserve Program (CRP) ground and all eligible acres for 2019 without penalty and date restrictions

“Many of those same farms that lost or can’t harvest their alfalfa due to excessive rain, also can’t plant corn for silage, and many of those acres will likely be prevented plant as well,” Kran said. “Many of those prevented plant crop acres are adjacent to livestock farms and could be planted to alternative forages for harvest as livestock feed, but quick administrative action is needed to allow this to happen.

“We are not asking for a permanent change to prevented plant provision but simply a one-time allowance due to the unprecedented weather challenges dairy and livestock farmers are facing across the country along with cash crop farming operations in 2019.”

Birchmeier added that many dairy farmers have indicated that unless emergency provisions are made in the next 30 days, cows will eventually have to be sold.

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“This is not an isolated incident as this story is echoed across the Midwest and Upper Midwest — in fact, the scale of the forage and feed crisis is considered unprecedented,” he said. “For many farmers, this decision will be the deciding factor of whether their multigenerational family farms continue.”

California Dairies Inc. joins NMPF

California Dairies Inc. (CDI), the largest dairy cooperative in California, has joined the National Milk Producers Federation (NMPF). CDI will have five seats on NMPF’s 53-member board and one seat on NMPF’s new 14-member executive committee.

Adding CDI’s dairy farmer members and milk significantly bolsters NMPF’s strength in speaking with a unified voice on national and international issues of concern to farmers. CDI, based in Visalia, California, produces 40% of the state’s milk and about 8% of all milk in the U.S. By volume, it is the second-largest dairy cooperative in the U.S., behind Dairy Farmers of America (DFA). CDI is co-owned by more than 370 dairy producers who ship 16 billion pounds of milk annually, and manufactures butter, fluid milk products and milk powders at multiple facilities throughout California.

“We are very pleased to have CDI’s voice among our already strong and active membership,” said Jim Mulhern, president and CEO of NMPF, which is the largest U.S. dairy-farmer organization. “CDI bolsters the nationwide reach and diversity of our organization and strengthens our ability as farmer-owned cooperatives to tackle a wide array of challenges in marketing, farm labor and trade, food safety, nutrition and product labeling.”

“California Dairies Inc. is excited to begin our membership with the National Milk Producers Federation as we work toward a stronger U.S. dairy industry,” said Simon Vander Woude, chairman of the CDI board. “Both CDI and NMPF are active and respected organizations in Washington, D.C., advocating on behalf of our respective memberships. However, we believe by combining our efforts, we can be an even stronger and more effective coalition, advocating pro-dairy policies that fundamentally strengthen our farmers and our industry as a whole.”

The members of NMPF’s new executive committee include: Jay Bryant, Maryland & Virginia Milk Producers Cooperative; Beth Ford, Land O'Lakes Inc.; Tony Graves, Prairie Farms Dairy Inc.; Mike McCloskey, Select Milk Producers Inc.; Randy Mooney, Dairy Farmers of America; Keith Murfield, United Dairymen of Arizona; Ken Nobis, Michigan Milk Producers Association; Doug Nuttelman, DFA; Leroy Plagerman, Northwest Dairy Association/Darigold; Neal Rea, Agri-Mark Inc.; David Scheevel, Foremost Farms USA; Steve Schlangen, Associated Milk Producers Inc.; Simon Vander Woude, CDI; and John Wilson, DFA.

“The addition of the new executive committee will be helpful in gaining additional member input on often fast-developing policy issues, and it reflects the strong interest of our membership in united dairy community action,” said Randy Mooney, NMPF’s chairman and dairy farmer from Rogersville, Missouri.

Coast-to-coast dairy rally takes on child hunger

In honor of National Dairy Month, America’s dairy farmers, processors and other dairy organizations are joining forces with Feeding America to address food and nutrition instability and child hunger.

To help launch the effort, Maryland dairy farmer Katie Dotterer-Pyle joined Laila Ali, daughter of boxing legend Muhammad Ali, on Good Morning America, June 5, to talk about the dairy community’s commitment and passion for feeding families in need.

At the national level, a three-vehicle convoy will embark on a cross-country tour in June and July to provide kids with free milk and dairy foods at farmers markets, feeding sites, sporting events and other locations. Community pop-up events replicating the national convoy experience will also take place in markets coast to coast, from Hilmar, California, to New Gloucester, Maine.

The National Dairy Month effort is supported by the Innovation Center for U.S. Dairy and its Undeniably Dairy campaign, as well as the Milk Processor Education Program’s (MilkPEP) Milk. Love What’s Real campaign.

Related to the effort, people can take action against hunger and donate milk.

According to Feeding America, one in six children in the U.S. faces hunger. The problem is compounded in summer when more than 18 million children may lose access to free or reduced-price school meal programs. That’s why food banks play an even more critical role in helping children access nutrient-rich foods like dairy when school isn’t in session. As the largest hunger-relief organization in the U.S., Feeding America and its network of food banks provided 10 million meals through nearly 6,000 meal sites last summer.

“As farmers who produce quality milk and dairy foods for America, we believe that all families should have access to the nutritious foods they need,” said Marilyn Hershey, Pennsylvania dairy farmer, chair of Dairy Management Inc. (DMI) and a member of the Innovation Center for U.S. Dairy’s board.

Over the last five years, the dairy community has helped secure more than 31 million servings of milk to children and families in need through The Great American Milk Drive. It is committed to providing 50 million servings of milk to children and families in need by 2020.

Through additional efforts, including the USDA’s Trade Mitigation Program and The Emergency Food Assistance Program, last year alone, dairy farmers and companies contributed 686 million servings (or 275 million pounds) of milk, cheese and yogurt to the Feeding America network of food banks.

“One out of two kids in the U.S. don’t get critical nutrients in their diets that they need to grow strong – and their chances of missing out are even greater when they don’t have access to milk,” said Julia Kadison, chief executive officer at the Milk Processor Education Program (MilkPEP). “As one of the most requested items at food banks, every gallon of milk donated can make a big impact in the fight against childhood hunger right in your community.”

Wet weather slows field progress, barge traffic

Wet weather is slowing progress in Midwest farm fields and preventing movement of commodities on the Mississippi River, according to Nigel Adcock with Cottonseed LLC.

Significant rains and flooding continue to prevent corn and soybean planters in most Midwestern states from hitting the fields, with Illinois, Indiana, Michigan and Ohio impacted the hardest.

As of June 2, about 67% of intended corn acreage was planted compared to about 96% for both the same day a year ago and the five-year average. The report covers 18 major corn states, which collectively cover about 92% of U.S. corn acreage.

Trends were similar for soybeans: About 39% of intended soybean acreage was planted as of June compared to about 86% a year ago and the five-year average of 79%. The report covers 18 major soybean states, which collectively cover about 95% of U.S. corn acreage.

An estimate of actual planted acres will arrive with USDA’s Acreage report, scheduled for June 28.

Adcock said the Mississippi River remains closed to barge traffic. Currently, locks 12 (just south of Dubuque, Iowa) through 27 (just north of St. Louis, Missouri) are closed. They are not expected to open until after June 11. In St. Louis Harbor, the river was expected to exceed its all-time high, cresting at about 50 feet. Flood stage there is 30 feet, Adcock said.

The ongoing river delays are impacting barge deliveries of cottonseed to dairy producers in the Upper Midwest, Adock said. Some shipments have been on the water more than 40 days waiting for the Corps of Engineers to give the green light on the opening of the 2019 shipping season.

April dairy product output mixed

With April 2019 U.S. milk output up slightly from a year earlier, the production of dairy products was mixed. (Read: U.S. milk production growth remains small.)

  • Total cheese output (excluding cottage cheese) totaled 1.08 billion pounds, up 0.2% from April 2018 but 3.6% less than March 2019. Through the first four months of 2019, total cheese production was estimated at 4.3 billion pounds, up 0.3% from January-April 2018.

  • April production of American-type cheeses, including cheddar, was down from a year earlier, but Italian-type cheese output was up, led by a mozzarella.

  • Butter production was estimated at 166.7 million pounds in April, 3.9% less than March 2019 and 4.8% below April 2018; year-to-date (YTD) output was 694.5 million pounds, down 1.8%.

  • Compared to both year-earlier levels, production of nonfat dry milk and skim milk powder was lower. Dry whey and whey protein concentration output was also down.  end mark

PHOTO: Maryland dairy farmer Katie Dotterer-Pyle joined Laila Ali, daughter of boxing legend Muhammad Ali, on Good Morning America to talk about the dairy community’s commitment and passion for feeding families in need. Photo courtesy of Dairy Management Inc.  

Dave Natzke
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