Digest Highlights: Droughty dairy areas primarily in the Southwest. USDA reopens disaster programs. Two dairy promotion groups merge. May milk prices improve a little in federal, California orders. Find these and other news summaries affecting dairy farmers here.
‘Dry’ cows mostly in the Southwest
Improving moisture conditions mean fewer U.S. dairy cows are located in “drought areas,” according to the USDA’s World Agricultural Outlook Board. As of the end of May, about 15 percent of the nation’s milk cows were located in areas experiencing drought (Figure 1), a 1 percent improvement compared to a month earlier.
The weekly U.S. Drought Monitor overlays areas experiencing drought with maps of major production areas for hay, alfalfa hay, corn, soybeans and other crops, as well as primary dairy and all cattle areas.
A large droughty swath continues to cover most of the Southwest, including major dairy areas in Kansas, Texas, New Mexico, Arizona and California. Outside the Southwest, dairy areas in western North Dakota and South Dakota and much of Oregon remain under drought conditions.
The report also showed about 23 percent of major alfalfa hay production areas were in areas experiencing drought, unchanged from a month earlier. The same dairy areas experiencing drought had some of the highest alfalfa hay prices in the U.S., according to latest USDA price data. April (latest available) alfalfa hay prices averaged $205 to $211 per ton in Arizona, California, New Mexico and Texas.
Application periods for USDA disaster programs reopened
The USDA's Farm Service Agency (FSA) began accepting disaster assistance program applications on June 4 from agricultural producers who suffered livestock and other losses due to natural disasters. The application deadlines will be in early August, 60 days after USDA publishes notices in the Federal Register.
FSA will accept new applications for losses for calendar year 2017 or 2018 filed under the Livestock Indemnity Program (LIP) or Emergency Assistance for Livestock, Honey Bees and Farm-raised Fish Program (ELAP). Producers who already submitted applications and received decisions on their applications for these years do not need to file again, but they can reapply if they have additional losses or their application was disapproved because it was filed late.
The application periods were reopened in response to statutory changes made by Congress earlier this year. Changes made in February’s Bipartisan Budget Act of 2018 included removing ELAP’s $20 million fiscal year funding cap, removing the per person and legal entity annual program payment limitation of $125,000 for LIP for 2017 and future years (producers with an adjusted gross income of more than $900,000 remain ineligible), and changing LIP to allow producers to receive a payment for injured livestock that are sold for a reduced price due to an eligible event. Previously, the program only covered financial loss for livestock death above normal mortality.
To apply, contact your local USDA service center.
Dairy MAX, Western Dairy Association complete merger
Processors and farms aren’t the only dairy organizations consolidating. Two regional dairy checkoff-funded organizations have merged.
The merger brings together Texas-based Dairy MAX, founded in 1995 to represent dairy farmers across Texas, western Oklahoma, New Mexico and southwest Kansas; and the Colorado-based Western Dairy Association, which has represented farmers across Colorado, Wyoming and Montana since 1936.
Both were regional nonprofit “qualified programs” authorized to conduct dairy product promotion, research or nutrition education programs, and primarily funded by the national dairy checkoff program.
The combined organization, which will be known as Dairy MAX, represents more than 900 dairy farmers and their families in the seven-state region.
Land O’Lakes’ Policinski to retire
Chris Policinski will retire as Land O’Lakes Inc. president and chief executive officer, effective June 30.
Policinski was appointed to the dual position in 2005. His tenure was marked by significant growth in the size of the company. In addition, Policinski oversaw global expansion in recent years with joint ventures in both South Africa and Kenya, and the biggest merger in the company’s history with United Suppliers in 2016.
Peter Janzen, senior vice president, general counsel and chief administrative officer, has been appointed as interim CEO.
May Class III, IV prices continue improvement
May 2018 federal order Class III and Class IV milk prices continued to post modest gains.
The May Class III price is $15.18 per hundredweight (cwt), up 71 cents from April but still 39 cents less than May 2017. The year-to-date Class III price average stands at $14.25 per cwt, down $1.80 from the same period a year earlier.
The May Class IV price is $14.57 per cwt, up $1.09 from April and 8 cents more than May a year ago. The January-May Class IV price average is $13.42 per cwt, down $1.50 from the same period a year earlier.
California 4a, 4b prices improve a little more
California’s May 2018 Class 4a (butter) and 4b (cheese) milk prices improved to their highest points in many months but remain below levels a year earlier.
The May Class 4a price is $14.06 per cwt, up 77 cents from April but 37 cents less than May 2017. The year-to-date 2018 average stands at $13.20 per cwt, compared to $14.64 per cwt a year ago.
The May 4b price is $14.90 per cwt, up 63 cents from April but 35 cents lower than May 2017. The January-May 2018 average stands at $13.98 per cwt, compared to $15.02 per cwt a year ago.
April cull cow prices slip
After a bump up in March, April 2018 U.S. cull cow prices fell slightly in April, according to the USDA National Ag Statistics Service Ag Prices report.
April 2018 cull cow prices (beef and dairy combined) averaged $67.50 per cwt, down $1.40 from March and $4.70 per cwt less than April 2017.
Year-to-date, the cull cow price average is $66.33 per cwt, down $1.33 per cwt from January-April 2017.
Last chance to complete the 2017 Census of Agriculture
The USDA National Agricultural Statistics Service (NASS) is wrapping up data collection for the 2017 Census of Agriculture. The deadline for submitting the paper questionnaire is June 15. Farmers who have not responded by that date have until the end of July to complete the census online through the secure website. Phone follow-up and personal interviews will also continue through July.
The questionnaire must to be completed by everyone who received a form – including landowners who lease land to producers, those involved in conservation programs, even those who may have received the census and do not farm.
Federal law requires NASS to keep all information confidential.
For more information about the 2017 Census of Agriculture or to respond online, visit the website. 
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Dave Natzke
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