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Weekly Digest II: Quarterly dairy replacement cow prices slide a little

Progressive Dairy Editor Dave Natzke Published on 01 May 2020

Digest Highlights

Quarterly dairy replacement cow prices slide a little

With signs of weakening milk prices, dairy farmers were willing to pay a little less for replacement cows this spring, based on the USDA’s latest quarterly estimates.

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Preliminary April 2020 U.S. quarterly replacement dairy cow prices averaged $1,250 per head, down $50 from January but $110 more than April 2019. With the decline, the U.S. average was still 41% per head less than the latest peak of $2,120 in October 2014.

Among major dairy states (Table 1), highest April 2020 average prices were $1,350 in Arizona, Kansas, New Mexico and Texas. Other than Idaho, those four states also showed the largest quarterly increase in dairy cow numbers compared to the previous quarter, based on estimates from the USDA’s Milk Production report.

Lowest average prices in April 2020 were $1,100 per head in Minnesota and $1,170 or lower in Iowa, Ohio, Oregon, Pennsylvania, Utah and Virginia.

Only Michigan and Vermont saw small price increases compared to the previous quarter. Compared to a year earlier, average prices were up $200 in California and $180 in Vermont and Virginia.

The USDA estimates are based on quarterly surveys (January, April, July and October) of dairy farmers in 24 major dairy states, as well as an annual survey (February) in all states. The prices reflect those paid or received for cows that have had at least one calf and are sold for replacement purposes, not as cull cows. The report does not summarize auction market prices.

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043020 natzke cow prices

USDA buying dairy products

The USDA’s Agricultural Marketing Service (AMS) is making dairy product purchases under the Families First Coronavirus Response Act. Contracts were recently announced for:

  • 2.376 million pounds of process cheese from Associated Milk Producers Inc. (AMPI), New Ulm, Minnesota: Depending on delivery location, prices ranged between $1.33-$1.43 per pound, for delivery between June 1-30.

  • 2.216 million pounds of salted butter from AMPI in prices ranging from $1.47-$1.56 per pound, for delivery June 1-30

  • 3.763 million pounds of shredded cheddar cheese from Winona Foods Inc., Green Bay, Wisconsin, in prices ranging from $1.38-$1.46 per pound, for delivery June 1-30

The USDA is accepting bids until May 12 for delivery of more than 980,000 pounds of mozzarella string cheese during the period July 1-Sept. 15. The agency also is accepting bids until May 14 for delivery of more than 84,000 pounds of print butter, 373,400 pounds of flavored yogurt, 505,440 pounds of shredded pepper jack cheese, 112,320 pounds of sliced cheddar cheese, 198,000 pounds of American cheese blends and 237,600 pounds of process cheese, all for delivery between June 1-Sept. 30, 2020.

USDA funding Dairy Business Innovation initiatives

The USDA’s Agricultural Marketing Service will provide $18.4 million in funding for to support dairy businesses in the development, production, marketing and distribution of dairy products. Funded through the Dairy Business Innovation (DBI) Initiatives Program, direct technical assistance and grants will be offered through initiatives led by the University of Tennessee, the Vermont Agency of Agriculture, Food and Markets, and the University of Wisconsin. Focus areas include:

  • Diversifying dairy product markets to reduce risk and develop higher value uses for dairy products
  • Promoting business development that diversifies farmer income through processing and marketing innovation
  • Encouraging the use of regional milk production

The DBI Initiatives program was authorized under the 2018 Farm Bill and is expected to perform projects from fiscal years 2020 through 2022. Applications will be accepted electronically through June 23. For information about grant eligibility and previously funded projects, visit the DBI webpage or email Patrick Kelley.

Progressive Dairy COVID-19 resources

Progressive Dairy frequently provides updates on COVID-19 news and resources on a special webpage.

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  • Updates for April 30 covered President Donald Trump’s executive order directing the USDA ensure U.S. meat and poultry processors continue operations, the establishment of a National Incident Coordination Center to provide direct support to producers whose animals cannot move to market as a result of processing plant closures and frequently asked questions (FAQs) for nonprofit organizations seeking to receive food through the Farmers to Families Food Box Program.

There’s also information on event changes and cancellations; a list of recent dairy organization podcasts related to COVID-19; a comprehensive list of other state, regional and national resources; and helpful articles previously appearing on the Progressive Dairy website.  end mark

Dave Natzke
  • Dave Natzke

  • Editor
  • Progressive Dairy
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